WEBVTT - Nvidia Forecast Misses Loftiest Estimates

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<v Speaker 1>Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Krisner.

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<v Speaker 1>After the bell, in Vidia forecast revenue for the current

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<v Speaker 1>quarter below the most lofty expectations. Fiscal fourth quarter sales

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<v Speaker 1>will be about thirty seven and a half billion dollars.

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<v Speaker 1>Here's the thing. The range of analyst estimates was as

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<v Speaker 1>high as forty one billion. Let's take a closer look

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<v Speaker 1>now at the Nvidia story with Angelo Zeno. He is

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<v Speaker 1>vice president of equity research at CFR. Angelo, what did

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<v Speaker 1>you make of what you heard today from in video?

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<v Speaker 2>Yeah, so thanks for having me.

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<v Speaker 3>I think overall the results were pretty good and you know,

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<v Speaker 3>nothing that I'm concerned about here. To your point, they

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<v Speaker 3>provide guidance that I think was you know, it's about

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<v Speaker 3>a billion and a half or so below maybe where

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<v Speaker 3>the whisper numbers were looking for, but definitely above our expectations.

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<v Speaker 3>We were actually looking for about thirty seven billion in

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<v Speaker 3>the January quarter, and I think all us equal and

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<v Speaker 3>you kind of look at the beat that they had

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<v Speaker 3>in the October quarter, which was about two billion out there,

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<v Speaker 3>definitely shows that their demand remains very strong for their offerings.

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<v Speaker 3>I mean in the October quarter was largely driven by

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<v Speaker 3>their hopper architecture.

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<v Speaker 2>As we kind of look.

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<v Speaker 3>Ahead here in the January quarter, it was all about

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<v Speaker 3>the cadence and trajectory of the Blackwell ramp here. And

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<v Speaker 3>at least, you know, from the initial kind of view here,

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<v Speaker 3>it seems like in video is being somewhat conservative in

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<v Speaker 3>terms of that initial ramp with kind of a stronger

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<v Speaker 3>ramp kind of going into the April and July quarters.

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<v Speaker 1>Are you concerned at all that maybe maybe just a

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<v Speaker 1>bit the excitement that we have seen over artificial intelligence

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<v Speaker 1>maybe getting a little ahead of reality.

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<v Speaker 3>Well, I guess what I would say is, you know,

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<v Speaker 3>at some point in time, investors you know, almost kind

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<v Speaker 3>of become numb to the stuff. And you know, from

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<v Speaker 3>that perspective, we could potentially be you know, entering a

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<v Speaker 3>point in time here where investors might kind of be

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<v Speaker 3>willing to look elsewhere, at least over kind of the

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<v Speaker 3>next six to nine month period, especially with kind of

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<v Speaker 3>a new Trump administration entering, and that kind of you know,

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<v Speaker 3>typically kind of helping well, maybe some of the higher data,

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<v Speaker 3>more cyclical type names that maybe have underperformed, So maybe

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<v Speaker 3>from a sentiment perspective, we can kind of see a

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<v Speaker 3>period where some of these AI oriented.

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<v Speaker 2>Names take a step back.

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<v Speaker 3>But that said, when we start looking at the fundamentals

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<v Speaker 3>the major drivers for these AI semi stocks as well

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<v Speaker 3>as mag seven names here over the next three to

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<v Speaker 3>five years, we still remain extremely optimistic about the fundamentals

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<v Speaker 3>of these companies and believe that they will continue to

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<v Speaker 3>be primary drivers of growth for the broader markets here

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<v Speaker 3>in the coming years.

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<v Speaker 1>So, as we both know, Nvidia is restrained by the

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<v Speaker 1>policies of the Biden administration from allowing China to have

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<v Speaker 1>some of these most advanced and sophisticated graphics processors. You

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<v Speaker 1>mentioned the Trump administration and perhaps a little bit of

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<v Speaker 1>change in economic policy. Do you think that Trump administration

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<v Speaker 1>will continue of the Biden administration's hardline on chips where

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<v Speaker 1>China is concerned.

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<v Speaker 2>Well, I think that's a great question.

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<v Speaker 3>I think we have to wait and see, But I

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<v Speaker 3>will say this, we do think kind of inn Vidia

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<v Speaker 3>may be more of a beneficiary under kind of what

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<v Speaker 3>we would call a transactional based approach under a Trump administration.

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<v Speaker 3>So when you kind of think about the Biden Harris approach,

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<v Speaker 3>it really has been a kind of limit China to

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<v Speaker 3>certain advanced chips and equipment like GPUs. EUVS is another

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<v Speaker 3>great example made by the likes of ASML. But according

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<v Speaker 3>to our Washington Analysis team, Trump we think might be

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<v Speaker 3>willing to offer more advanced AI chips to other nations,

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<v Speaker 3>even China, if the price is right, while kind of

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<v Speaker 3>maintaining a certain technology lead. So China is held maybe

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<v Speaker 3>a generation or two behind. So this could drive we

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<v Speaker 3>think higher related and video revenue in regions like China

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<v Speaker 3>where the company could potentially be able to sell let's

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<v Speaker 3>say it's a one hundred.

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<v Speaker 2>Versus more, maybe more of a performance laid in h two.

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<v Speaker 3>So we see the potential for Nvidia to potentially actually

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<v Speaker 3>be better positioned under a Trump administration relative to a

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<v Speaker 3>Biden Harris administration.

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<v Speaker 1>I think we can agree that the centerpiece of the

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<v Speaker 1>Trump policy with respect to China on the economic side tariffs.

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<v Speaker 1>What do you think the fallout will be as the

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<v Speaker 1>result of tariffs that may approach at least sixty percent

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<v Speaker 1>and maybe even more than that.

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<v Speaker 3>Yeah, I mean, listen, on the surface, if they were

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<v Speaker 3>to go through the way they.

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<v Speaker 2>Are intended to come through.

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<v Speaker 3>If we're looking at sixty percent tariffs in China or

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<v Speaker 3>in north of twenty percent.

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<v Speaker 2>Let's say in.

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<v Speaker 3>Mexico for instance, you know clearly would have a negative

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<v Speaker 3>impact i'd say in a broader tech sector. And a

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<v Speaker 3>big reason for that if you think about about a

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<v Speaker 3>third of all electronic goods within the tech industry is

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<v Speaker 3>actually manufactured out in China, and when you think about

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<v Speaker 3>how important Mexico is for.

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<v Speaker 2>Industries like.

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<v Speaker 3>The automotive space, the number of industrial markets out there,

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<v Speaker 3>were a lot of semiconductors goods are kind of important

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<v Speaker 3>from there, not to mention you know, the number of

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<v Speaker 3>PC vendors like the Dells of the world. So there,

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<v Speaker 3>you know, definitely kind of implications. It will have a

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<v Speaker 3>negative impact and inflationary pressures, i'd say, to the overall

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<v Speaker 3>tech space as well as broader markets. So it's not

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<v Speaker 3>necessarily something we want to see. But in the same respect,

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<v Speaker 3>we think the Trump administration will kind of be a

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<v Speaker 3>little bit more.

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<v Speaker 2>Tactical out there.

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<v Speaker 3>So all in all, it's probably going to be messy

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<v Speaker 3>here for a little while, and I think investors just

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<v Speaker 3>have to be kind of willing to kind of go

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<v Speaker 3>for the roller coaster ride.

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<v Speaker 2>Angelo.

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<v Speaker 1>I'm not hearing a lot of concern from your perspective

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<v Speaker 1>about further decoupling of the trade relationship between the US

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<v Speaker 1>and China.

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<v Speaker 3>Is that the case again, I mean, listen, I think

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<v Speaker 3>it's it's something that we have to, you know, just

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<v Speaker 3>kind of wait and see how this all plays out.

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<v Speaker 3>I think kind of initially, the way we would kind

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<v Speaker 3>of look at it is I don't know if there

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<v Speaker 3>would necessarily be kind of more of a decoupling to

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<v Speaker 3>kind of be seen. But again, it's something that we

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<v Speaker 3>kind of have to wait and see.

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<v Speaker 1>A lot of what we've been focused on are the

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<v Speaker 1>nominees for various cabinet positions. We still don't have a

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<v Speaker 1>nominee for Treasury Secretary. We do know that Howard Lutnik

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<v Speaker 1>will be at Commerce and part of his portfolio will

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<v Speaker 1>include the Office of US Trade rep. Generally speaking, when

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<v Speaker 1>you assess the appointments that have been named so far,

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<v Speaker 1>what is the takeaway from your point of view on

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<v Speaker 1>how the Trump administration will proceed with governing.

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<v Speaker 3>No, I mean, that's listen, that's a good question. I mean,

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<v Speaker 3>when we kind of think about, at least initially, what

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<v Speaker 3>you know, what.

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<v Speaker 2>The impact is going to be to the broader tech space.

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<v Speaker 2>You know, I'd say right now.

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<v Speaker 3>It's one where you know, hopefully we kind of see

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<v Speaker 3>the ability for greater M and A potential within the

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<v Speaker 3>tech space, and I would say that would kind of

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<v Speaker 3>cause us to lean a little bit more in favor

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<v Speaker 3>of the software space relative to the semiconductor industry. I

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<v Speaker 3>think there are a lot more uncertainties as far as

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<v Speaker 3>this semiconductor industry is concerned, whether it's to your point

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<v Speaker 3>about tariffs, whether it be the unknowns about Taiwan, but

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<v Speaker 3>also as far as the M and A environment is concerned,

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<v Speaker 3>semiconductor names still do a lot of business overseas and

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<v Speaker 3>need to get approval in areas like China, which would

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<v Speaker 3>be would still be hard pressed to see, whereas kind

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<v Speaker 3>of in the software spectrum, you're in a much better

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<v Speaker 3>position out there.

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<v Speaker 2>M and A probably is.

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<v Speaker 3>More kind of fluid, and we think regulatory approval would

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<v Speaker 3>kind of be met more willingly under this new administration.

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<v Speaker 3>So I think there are different ways to kind of

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<v Speaker 3>play the tech space. Under this new administration.

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<v Speaker 1>You don't see regulatory risk and the possibility that some

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<v Speaker 1>companies like let's say alphabet would be confronted with the

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<v Speaker 1>possibility of having to maybe divest I certain assets I'm

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<v Speaker 1>thinking of the story that we had the other day

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<v Speaker 1>about maybe Google being forced to sell off the Chrome browser.

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<v Speaker 3>So possibilities absolutely, But you know that said, you know,

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<v Speaker 3>with the same respect, I think there's also a possibility

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<v Speaker 3>for a company like Alpha Bit to be able to

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<v Speaker 3>kind of go back into the deal making spectrum under

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<v Speaker 3>an administration, a Trump administration. So think about rumors earlier

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<v Speaker 3>this year of them potentially looking at a company like

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<v Speaker 3>a Hubstop or even on the cybersecurity side of.

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<v Speaker 2>Things with a company like Whiz.

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<v Speaker 3>I think all of that stuff now become possibilities for

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<v Speaker 3>a company like Alpha Bit, which is actually flushed with

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<v Speaker 3>a ton of cash and you know, potentially could further diversify,

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<v Speaker 3>let's say, their business away from search.

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<v Speaker 1>Angelo, I'm curious as to whether or not when you

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<v Speaker 1>are having conversations with your clients that there is one

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<v Speaker 1>issue that they are expressing a little bit of concern over.

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<v Speaker 3>You know, I think as far as you know where

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<v Speaker 3>clients are at right now, I mean, I would say

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<v Speaker 3>kind of the top of the list right now for

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<v Speaker 3>our clients we guest asked a lot about from a

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<v Speaker 3>concerned perspective, is on the valuation side of things, We've

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<v Speaker 3>had a hell of a run when it comes to

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<v Speaker 3>the markets here of last two years, especially on the

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<v Speaker 3>tech side of things. When you start looking at some

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<v Speaker 3>of the multiple expansion we've seen, I think there is

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<v Speaker 3>definitely fear out there from some investors that you know,

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<v Speaker 3>maybe some of those gains that have been pulled in

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<v Speaker 3>quite a bit kind of going into twenty twenty five.

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<v Speaker 3>And typically as you kind of go into year three

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<v Speaker 3>of a bull market, if you kind of view the

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<v Speaker 3>October twenty twenty two lows as kind of the lows,

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<v Speaker 3>then you know, the year three kind of period typically

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<v Speaker 3>tends to be one where you see lower gains relative

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<v Speaker 3>to those first two years, and especially kind of you know,

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<v Speaker 3>any environment where policy will kind of be a you know,

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<v Speaker 3>take kind of center stage here, there's definitely more risk

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<v Speaker 3>out there than what we've seen we think over the

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<v Speaker 3>last kind of twelve to eighteen months.

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<v Speaker 1>Angelo will leave it there. Thanks for making time to

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<v Speaker 1>chat with us. Angelo Zeno is the vice president of

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<v Speaker 1>Equity Research at CFRA, joining us here from New York

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<v Speaker 1>City on the Daybreak podcast. Welcome back to the Bloomberg

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<v Speaker 1>Daybreak Asia podcast. I'm Doug Chrisner. As we continue to

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<v Speaker 1>unpack the results from Nvidia. We also want to take

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<v Speaker 1>a broader look at what's happening in the Asia Pacific

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<v Speaker 1>and joining us for that is Stephanie holtza Jen. She

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<v Speaker 1>is the CIO for the APEC at Deutsche Bank Private Bank,

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<v Speaker 1>joining from our studios in Singapore. I know you're not

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<v Speaker 1>allowed to talk about specific stocks, but I have to

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<v Speaker 1>ask you about the Nvidia story. When you listen to

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<v Speaker 1>the narrative that the market's received from the company, what

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<v Speaker 1>conclusion do you come to.

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<v Speaker 4>The conclusion has to be that right now we're in

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<v Speaker 4>a setup in regards to companies related to artificial intelligence

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<v Speaker 4>theme that there has very lofty expectations out there. It's

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<v Speaker 4>also coming at a time where we had quite a

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<v Speaker 4>good market rally, where lots of investors are kind of

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<v Speaker 4>asking the right question, is that here to stay? And

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<v Speaker 4>of course you know these type of results are getting

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<v Speaker 4>scrutinized under the magnifying class and if there's any reason

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<v Speaker 4>to look for short term correction, then you know this

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<v Speaker 4>is being taken as such. However, it does not derail

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<v Speaker 4>I think the long term, medium term investment theme that

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<v Speaker 4>we've been going with on the back of the technological

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<v Speaker 4>advance you see with the help of companies like Invidia,

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<v Speaker 4>So you know, these are opportunities to get in at

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<v Speaker 4>better levels, but it doesn't derail the investment thesis.

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<v Speaker 1>So when you imagine the applications of artificial intelligence, is

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<v Speaker 1>there an industry that you would think really could benefit

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<v Speaker 1>most under these circumstances.

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<v Speaker 4>Well, we look at everything upstream, downstream around the technology

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<v Speaker 4>and the broader IT sector, and we have these as

0:11:54.000 --> 0:11:56.439
<v Speaker 4>our sector pigs for a long time already.

0:11:57.160 --> 0:11:59.320
<v Speaker 1>Let's talk a little bit about the leadership change that

0:11:59.400 --> 0:12:02.400
<v Speaker 1>we've been dealing with in Washington. I think for a

0:12:02.440 --> 0:12:05.040
<v Speaker 1>lot of people it means a new global paradigm where

0:12:05.080 --> 0:12:09.719
<v Speaker 1>trade is concerned. President Electroump has said that he loves tariffs.

0:12:09.760 --> 0:12:12.199
<v Speaker 1>He also loves to make deals too, And let's talk

0:12:12.240 --> 0:12:14.480
<v Speaker 1>a little bit about the dynamic that's playing out between

0:12:14.600 --> 0:12:19.240
<v Speaker 1>Washington and Beijing or will after the inauguration in January.

0:12:19.520 --> 0:12:21.439
<v Speaker 1>Do you think that the US and China can reach

0:12:21.720 --> 0:12:25.400
<v Speaker 1>some sort of grand bargain when it comes to trade

0:12:25.520 --> 0:12:28.960
<v Speaker 1>and avoid the application of a lot of these tariffs.

0:12:29.520 --> 0:12:32.320
<v Speaker 4>Well, I think there's a lot of speculation around and

0:12:32.320 --> 0:12:34.960
<v Speaker 4>I will not join the bandwagon of those because we're

0:12:34.960 --> 0:12:38.640
<v Speaker 4>not yet there. We can only look at what the

0:12:38.880 --> 0:12:42.480
<v Speaker 4>history is giving us to try to imply in the future.

0:12:42.520 --> 0:12:44.400
<v Speaker 4>I think more importantly is what is it that the

0:12:44.400 --> 0:12:47.719
<v Speaker 4>market is really concerned with at the moment. And there

0:12:47.800 --> 0:12:51.319
<v Speaker 4>is next to trade and tariffs which could have an

0:12:51.320 --> 0:12:56.320
<v Speaker 4>inflationary outcome. There's also the understanding that there will be

0:12:56.400 --> 0:12:59.640
<v Speaker 4>no austerity, that there's a fiscal imbalance and what's been

0:12:59.679 --> 0:13:02.520
<v Speaker 4>proposed and how it will be financed. Tariffs can only

0:13:02.559 --> 0:13:06.280
<v Speaker 4>make up for some part of the spend that's been proposed.

0:13:06.320 --> 0:13:09.640
<v Speaker 4>So you've seen the market has been reprising to that narrative,

0:13:09.760 --> 0:13:14.960
<v Speaker 4>looking at potentially less of a FED Central Bank reaction

0:13:15.120 --> 0:13:19.600
<v Speaker 4>function to that new environment being you know, looking at

0:13:19.679 --> 0:13:22.199
<v Speaker 4>less cuts as we do as well. We see street

0:13:22.240 --> 0:13:25.600
<v Speaker 4>cuts from the Fed coming towards us until the end

0:13:25.600 --> 0:13:28.520
<v Speaker 4>of next year only. So I think that is that

0:13:28.600 --> 0:13:33.440
<v Speaker 4>is the biggest topic right now, and that is also

0:13:33.520 --> 0:13:35.720
<v Speaker 4>informing how you structure portfolios.

0:13:36.600 --> 0:13:38.920
<v Speaker 1>I'm very curious about the way that you're viewing China

0:13:39.040 --> 0:13:41.520
<v Speaker 1>right now, in light of the lot of stimulus that

0:13:41.600 --> 0:13:45.480
<v Speaker 1>we have seen unleashed on the part of authorities in Beijing.

0:13:46.360 --> 0:13:48.800
<v Speaker 1>Does that leave you to be optimistic that there is

0:13:48.840 --> 0:13:52.040
<v Speaker 1>some sort of recovery happening in China right now, or

0:13:52.600 --> 0:13:56.079
<v Speaker 1>maybe what has been proposed will will fail to stimulate

0:13:56.200 --> 0:13:58.520
<v Speaker 1>in the way in which markets have been promised.

0:13:59.000 --> 0:14:02.320
<v Speaker 4>Yeah, I'm in the camp that I believe that the

0:14:02.360 --> 0:14:07.520
<v Speaker 4>probability for this stimulus to succeed has definitely picked up

0:14:07.559 --> 0:14:10.600
<v Speaker 4>and risen quite remarkably. And let me just quickly go

0:14:10.679 --> 0:14:14.120
<v Speaker 4>back and put this in context, because when we talk stimulus,

0:14:14.320 --> 0:14:17.320
<v Speaker 4>lots of people only remember the fiscal stimulus one and

0:14:17.320 --> 0:14:20.080
<v Speaker 4>a half weeks ago. I would want to put it

0:14:20.080 --> 0:14:23.920
<v Speaker 4>in context of the three different arrows. Let's let's let's

0:14:23.960 --> 0:14:27.480
<v Speaker 4>lose the analogy of ebinomics, the three arrows of genomics

0:14:27.520 --> 0:14:30.480
<v Speaker 4>that have been launched. We started out the structural reform

0:14:30.560 --> 0:14:34.080
<v Speaker 4>package during the third Planum in July. It was followed

0:14:34.160 --> 0:14:39.200
<v Speaker 4>up in September with the monetary policy stimulus package, which

0:14:39.240 --> 0:14:42.960
<v Speaker 4>came at the heels of the big, the big fat

0:14:43.000 --> 0:14:45.160
<v Speaker 4>cut that we saw. So I would I would put

0:14:45.280 --> 0:14:47.400
<v Speaker 4>the picture out that was when the wind was blowing

0:14:48.200 --> 0:14:51.000
<v Speaker 4>in China sales, so that was a very timely measure.

0:14:51.280 --> 0:14:53.920
<v Speaker 4>It was also very large and it had very important

0:14:53.920 --> 0:14:57.800
<v Speaker 4>components like stock stabilization program. Now the third arrow to

0:14:57.880 --> 0:15:00.680
<v Speaker 4>this is the fiscal stimulus which everybody been waiting for,

0:15:00.680 --> 0:15:04.440
<v Speaker 4>which has been finally launched in its first step, focusing

0:15:04.480 --> 0:15:10.800
<v Speaker 4>really on the local government, you know, re capitalization, recapitalization

0:15:11.000 --> 0:15:14.880
<v Speaker 4>exactly so right now if you look at it in

0:15:14.920 --> 0:15:18.160
<v Speaker 4>its entirety and the way it's been delivered timely, and

0:15:18.200 --> 0:15:20.720
<v Speaker 4>the two elements we hadn't in the past, which is

0:15:20.760 --> 0:15:23.240
<v Speaker 4>forward guidance that there can be more if there is

0:15:23.400 --> 0:15:25.560
<v Speaker 4>need be. And also I think there's quite a good

0:15:25.840 --> 0:15:28.360
<v Speaker 4>communication with the market at this moment in time, so

0:15:28.400 --> 0:15:31.440
<v Speaker 4>there's definitely listening to what the market is expecting and

0:15:31.480 --> 0:15:35.480
<v Speaker 4>trying not to underdeliver. Again, it leads me to conclude

0:15:35.480 --> 0:15:37.920
<v Speaker 4>that the probabilities have gone up that China has been

0:15:37.960 --> 0:15:41.160
<v Speaker 4>able to create its own kind of revival story without

0:15:41.200 --> 0:15:45.280
<v Speaker 4>having to necessarily react to you know, the concerns that

0:15:45.320 --> 0:15:47.560
<v Speaker 4>you mentioned earlier that come their way, and that are

0:15:47.600 --> 0:15:49.360
<v Speaker 4>of course concerns around tariffs.

0:15:49.560 --> 0:15:53.520
<v Speaker 1>So you talk about three arrows very similar to ebonomics. Obviously,

0:15:53.600 --> 0:15:57.320
<v Speaker 1>Japan had to fight deflation for three decades. China seems

0:15:57.320 --> 0:15:59.520
<v Speaker 1>to be struggling with that still, even though we've seen

0:15:59.520 --> 0:16:03.120
<v Speaker 1>evidence that retail sales are picking up, industrial production is

0:16:03.160 --> 0:16:06.600
<v Speaker 1>picking up. We just talked about how local governments may

0:16:06.600 --> 0:16:09.400
<v Speaker 1>be able to respond to the property market, but is

0:16:09.520 --> 0:16:14.160
<v Speaker 1>China's still confronted with a major deflationary problem that may

0:16:14.200 --> 0:16:15.480
<v Speaker 1>be persistent for a while.

0:16:16.560 --> 0:16:18.440
<v Speaker 4>At this moment, it still is. So I just came

0:16:18.480 --> 0:16:21.640
<v Speaker 4>back from Shanghai as well confirming this. So I do

0:16:21.760 --> 0:16:25.440
<v Speaker 4>not want to paint a different picture. But I think

0:16:25.440 --> 0:16:28.440
<v Speaker 4>it's also a little early to use activity data from

0:16:28.440 --> 0:16:31.760
<v Speaker 4>today or that are backward looking that are being released

0:16:31.760 --> 0:16:34.720
<v Speaker 4>in the market as we speak to kind of draw

0:16:34.720 --> 0:16:37.440
<v Speaker 4>a conclusion on whether these three errors have been successful

0:16:37.520 --> 0:16:42.080
<v Speaker 4>or art. So you look at a realistic pathway to

0:16:42.160 --> 0:16:46.280
<v Speaker 4>find out. The jury is out obviously whether all of

0:16:46.320 --> 0:16:49.720
<v Speaker 4>this works. I think we have to look into next year.

0:16:49.840 --> 0:16:51.880
<v Speaker 4>Most probably the first and the second quarter will be

0:16:51.880 --> 0:16:54.760
<v Speaker 4>there to stabilize the market, and then the third quarter

0:16:54.760 --> 0:16:57.000
<v Speaker 4>I will also see a pickup an activity data that

0:16:57.360 --> 0:17:02.320
<v Speaker 4>most probably will help to convince the last naser to

0:17:02.440 --> 0:17:07.440
<v Speaker 4>join the bandwagon also start broadening out investments into China again.

0:17:07.480 --> 0:17:10.960
<v Speaker 1>So how does everything that you're describing kind of inform

0:17:11.000 --> 0:17:14.080
<v Speaker 1>an investment strategy? What does it translate into.

0:17:14.760 --> 0:17:18.960
<v Speaker 4>It translates into not a negative view on China so

0:17:19.080 --> 0:17:23.080
<v Speaker 4>we are out there highlighting the medium and long term opportunity. Still,

0:17:23.160 --> 0:17:25.880
<v Speaker 4>you have heard me saying that before. We have now

0:17:26.320 --> 0:17:29.320
<v Speaker 4>seen that China is able to make a you to

0:17:29.480 --> 0:17:33.200
<v Speaker 4>date results that are resembling others in the region. So

0:17:33.240 --> 0:17:37.080
<v Speaker 4>as we're building a base, these are opportunities to build out. Well,

0:17:37.080 --> 0:17:39.840
<v Speaker 4>it's not just China. We also like Japan's middle and

0:17:39.880 --> 0:17:42.840
<v Speaker 4>long term story. Then of course this will be a

0:17:42.880 --> 0:17:47.080
<v Speaker 4>sideways market that also likewise gives opportunities to invest. But

0:17:47.160 --> 0:17:51.119
<v Speaker 4>having said that, we still prefer the US and equities

0:17:51.160 --> 0:17:55.080
<v Speaker 4>as to express our views that are fairly constructive.

0:17:55.520 --> 0:17:57.640
<v Speaker 1>Are there themes that you like right now? I'm sorry

0:17:57.680 --> 0:17:59.639
<v Speaker 1>to interrupt, but I'm curious about the themes that you

0:17:59.800 --> 0:18:03.119
<v Speaker 1>may be pursuing. And I know that when we were

0:18:03.160 --> 0:18:06.760
<v Speaker 1>talking earlier about artificial intelligence, there is a certain herd

0:18:06.840 --> 0:18:10.000
<v Speaker 1>mentality when it comes to technology. Maybe you can tell

0:18:10.040 --> 0:18:14.000
<v Speaker 1>me some of the contrary positions that you're taking kind

0:18:14.000 --> 0:18:17.359
<v Speaker 1>of avoiding. You know, what the mainstream is is trying

0:18:17.359 --> 0:18:18.600
<v Speaker 1>to accomplish.

0:18:18.640 --> 0:18:22.760
<v Speaker 4>Well, but you look at the playbook that we have

0:18:23.480 --> 0:18:27.679
<v Speaker 4>going into the elections, there is according to the different agendas,

0:18:28.280 --> 0:18:31.919
<v Speaker 4>some of the sectors were definitely experiencing tailwinds, and of

0:18:31.960 --> 0:18:34.560
<v Speaker 4>course we have been also riding these. You know, you

0:18:34.600 --> 0:18:37.639
<v Speaker 4>look at the energy sector, you look at financials that

0:18:37.720 --> 0:18:40.679
<v Speaker 4>will be benefiting from a more of a deregulatory angle.

0:18:41.280 --> 0:18:45.320
<v Speaker 4>So it's not necessarily necessary to go against the market

0:18:45.320 --> 0:18:49.040
<v Speaker 4>when these themes are playing out. Right now, you're looking

0:18:49.080 --> 0:18:51.720
<v Speaker 4>at long term investment themes as well that look also

0:18:51.800 --> 0:18:54.719
<v Speaker 4>like short term investment. Seems like the artificial intelligence. I

0:18:54.720 --> 0:19:00.199
<v Speaker 4>think you can also be joined joined in some of

0:19:00.240 --> 0:19:03.000
<v Speaker 4>these themes that then become long I think there's health

0:19:03.000 --> 0:19:06.359
<v Speaker 4>tech that is interesting, there's agritech that is interesting that

0:19:06.400 --> 0:19:10.000
<v Speaker 4>we keep on highlighting industrials. But the main drivers right now,

0:19:10.040 --> 0:19:13.040
<v Speaker 4>as we've seen and most probably will continue to see,

0:19:13.600 --> 0:19:19.920
<v Speaker 4>is writing on the current themes of deregulation benefiting financials, etc.

0:19:20.680 --> 0:19:23.080
<v Speaker 1>We were talking at the beginning of the conversation about

0:19:23.119 --> 0:19:27.160
<v Speaker 1>the inflationary impact of a tariff policy. Do you believe

0:19:27.160 --> 0:19:30.080
<v Speaker 1>there's opportunities still in fixed income right now? I hear

0:19:30.119 --> 0:19:32.480
<v Speaker 1>a lot of what you're describing more on the equity side,

0:19:32.480 --> 0:19:34.080
<v Speaker 1>but I'm wondering whether or not you want to be

0:19:34.680 --> 0:19:37.439
<v Speaker 1>maybe balanced in a way that would allow you to

0:19:37.480 --> 0:19:40.000
<v Speaker 1>place a bed in the fixed income markets.

0:19:40.000 --> 0:19:43.159
<v Speaker 4>Absolutely, and a balanced portfolio is also shown to be

0:19:43.240 --> 0:19:46.280
<v Speaker 4>working better again in signs of stress. So fixed income

0:19:46.359 --> 0:19:50.080
<v Speaker 4>is a very important part to our portfolios. And as

0:19:50.119 --> 0:19:52.800
<v Speaker 4>I said, we have never been in the camp of

0:19:53.480 --> 0:19:56.240
<v Speaker 4>looking for too many cuts from the FED down, never

0:19:56.359 --> 0:19:59.040
<v Speaker 4>joined the bandwagon when the market was going gung ho

0:19:59.160 --> 0:20:02.600
<v Speaker 4>and nine, so we didn't have to completely change our

0:20:02.680 --> 0:20:05.800
<v Speaker 4>views with the new administration coming in. So this higher

0:20:05.800 --> 0:20:10.320
<v Speaker 4>for longer relatively or relative attractiveness of US assets it's

0:20:10.359 --> 0:20:12.760
<v Speaker 4>been with us before. So you look at it from

0:20:12.760 --> 0:20:17.080
<v Speaker 4>a bond perspective, it still argues to have a large

0:20:17.280 --> 0:20:22.120
<v Speaker 4>fixed income allocations. We still prefer investment grade to express

0:20:22.160 --> 0:20:25.880
<v Speaker 4>that view, just to be on the higher quality side

0:20:25.920 --> 0:20:29.880
<v Speaker 4>of the spectrum. And yeah, most probably will also see

0:20:29.880 --> 0:20:32.880
<v Speaker 4>a lot of this in the short term, given that

0:20:32.960 --> 0:20:35.800
<v Speaker 4>we will see the Fed not being able to react

0:20:35.840 --> 0:20:41.200
<v Speaker 4>as swiftly and as pronounced as most probably the market

0:20:41.280 --> 0:20:42.560
<v Speaker 4>had been pricing in before.

0:20:42.800 --> 0:20:44.679
<v Speaker 1>We'll leave it there. Stephanie, thank you so much for

0:20:44.760 --> 0:20:48.159
<v Speaker 1>joining us. Stephanie holtze Jen, she is the CIO for

0:20:48.240 --> 0:20:51.439
<v Speaker 1>the APAC at Deutsche Bank Private Bank, joining from our

0:20:51.480 --> 0:20:58.600
<v Speaker 1>studios in Singapore. Thanks for listening to today's episode of

0:20:58.640 --> 0:21:02.240
<v Speaker 1>Bloomberg Daybreak Asia Edition. Each weekday, we look at stories

0:21:02.440 --> 0:21:06.399
<v Speaker 1>shaping markets, finance, and geopolitics in the Asia Pacific. You

0:21:06.440 --> 0:21:09.600
<v Speaker 1>can find us on Apple, Spotify, and the Bloomberg Podcast

0:21:09.680 --> 0:21:12.840
<v Speaker 1>YouTube channel, or anywhere else you listen. Join us again

0:21:12.840 --> 0:21:15.919
<v Speaker 1>tomorrow for insight on market moves from Hong Kong to

0:21:15.960 --> 0:21:19.600
<v Speaker 1>Singapore and Australia. I'm Doug Prisoner and this is Bloomberg