Speaker 1: Good morning. I'm Brian Curtis and I'm Doug Krisner. Here
Speaker 1: are the stories we're following today.
Speaker 2: Minneapolis FED President Neil Kashkari says the US will likely
Speaker 2: have a slowing economy, but the country will avoid a recession.
Speaker 2: He told CBS has faced the nation that US inflation.
Speaker 3: The outlook is quite positive.
Speaker 4: The economy continues to surprise how resilient it is. That's
Speaker 4: a really good thing. The unemployment rate is still very
Speaker 4: low at three point six percent. Nonetheless, I'm not going
Speaker 4: to dismiss the hardship that Americans are feeling. High inflation
Speaker 4: for several years has really put a dent in people's pocketbooks.
Speaker 4: We're now starting to dig our way out of that,
Speaker 4: so we're making progress.
Speaker 2: Despite the positive inflation data. Kashkari said that the fed's
Speaker 2: aggressive tightening campaign ending it won't end without job losses.
Speaker 2: He said unemployment may reach four percent. On Friday, we'll
Speaker 2: get the closely watched US jobs report. It's projected to
Speaker 2: show that higher increase at a healthy, yet more moderate clip.
Speaker 2: Kashkari said that the FED will remain data dependent as
Speaker 2: it decides whether more rate hikes are in the car well.
Speaker 1: As mentioned earlier, it's going to be a big week
Speaker 1: for US earnings, including megacap Tech the story from Bloomberg's
Speaker 1: Denise Pellegrini.
Speaker 5: Apple and Amazon are both scheduled to report quarterly results
Speaker 5: after the closing bell Thursday. Investors will be watching for
Speaker 5: more about Apple asking suppliers to keep iPhone shipments flat.
Speaker 5: You're on your We're also hearing Apple expects revenue to
Speaker 5: grow through price hikes for iPhone Pro models instead going forward.
Speaker 5: Apple's reliance on Chinese manufacturing is also of concern because
Speaker 5: of sour relations between Washington and Beijing, and also investors
Speaker 5: will be interested in anything Apple has to say about AI.
Speaker 5: As for Amazon, Bloomberg Intelligence says, watch to see if
Speaker 5: strength and streaming and advertising will be offset by slowing
Speaker 5: consumer and enterprise spending. Also, anything about online shopping and
Speaker 5: Amazon's push into pharmacy and grocery will be of interest. Shopify, PayPal, Qualcom,
Speaker 5: Western Digital, and Advanced micro Devices also report this coming week,
Speaker 5: along with Pfizer and merc Denise Pelgriny Bloomberg day Break Asia.
Speaker 2: US banks have been told to step up their contingency
Speaker 2: funding roadmaps. We get that story from Bloomberg's and Kate's.
Speaker 6: Agencies, including the Federal Reserve and the FDIC, have told
Speaker 6: lenders to review their plans for filling funding needs in
Speaker 6: times of stress to ensure they have access to a
Speaker 6: range of liquidity sources. The issue was spotlighted by the
Speaker 6: collapse of Silicon Valley Bank earlier this year. The guidance
Speaker 6: is part of a bid by federal regulators to encourage
Speaker 6: financial institutions to incorporate the Fed's discount window as part
Speaker 6: of their contingency planning. In Washington and Kates Bloomberg Day
Speaker 6: Break Asia.
Speaker 1: We go to China next, where the government says it
Speaker 1: will soon announce new measures to boost consumption the story
Speaker 1: from Bloomberg's Boneou in Hong Kong.
Speaker 7: These new directives follow a slew of other policies unfailed
Speaker 7: in recent weeks to revived economy growth. Momentum weakened in
Speaker 7: the second quarter as the property markets slumped. Just Friday,
Speaker 7: China laid out the plan to boost consumer industries. It
Speaker 7: also pushed efforts to grow an exchange dedicated to helping
Speaker 7: small firms get access to funds. Earlier this month, measures
Speaker 7: were introduced to lift sales of cars electronic products and
Speaker 7: rural consumption. The new consumption package will be announced this
Speaker 7: afternoon in Beijing. In Hong Kong, I'm Bonnie Olt Bloomberg
Speaker 7: day Break Asia.
Speaker 2: Meantime, Francis Finance Minister Bruno Lamarre has called on Chinese
Speaker 2: companies to invest more in Europe. Bloomberg's Joan Wong has
Speaker 2: that story from Hong Kong.
Speaker 8: Lamire said his talks in Beijing were positive on a
Speaker 8: variety of topics such as agro industry, finance, and electric vehicles.
Speaker 8: He singled out EV's and other sectors that would help
Speaker 8: fight climate change. The two countries said they'd work together
Speaker 8: on improving the regulatory environment surrounding cosmetics and data. Address
Speaker 8: concerns over intellectual property rights of French companies in China.
Speaker 8: Lamire said he wants to get better access in China.
Speaker 5: He added that.
Speaker 8: Decoupling is not possible. More meetings will be held in
Speaker 8: France before the end of the year. In Hong Kong,
Speaker 8: I'm joining Bloomberg day Break Asia.
Speaker 2: And on that Bruno Lamier said that de risking with
Speaker 2: China doesn't mean that China is risk so that's a
Speaker 2: further sort of softening of this whole idea of how
Speaker 2: much words matter in how countries characterize they're dealing with China.
Speaker 2: So if you're de risking and China's not a risk,
Speaker 2: I suppose that's just what diversification.
Speaker 1: It's going to be very interesting to see what the
Speaker 1: government rolls out in terms of this new stimulus. And
Speaker 1: I was struck by the news last Friday, Brian, As
Speaker 1: I'm sure you're well aware that the Security Regulatory Commission
Speaker 1: in China unveiled proposal to loosen some of the limits
Speaker 1: on market makers for the Beijing Stock Exchange. Now, this
Speaker 1: exchange was launched back in twenty twenty one, and the
Speaker 1: aim here was to create a broader financing for some
Speaker 1: of the small firms, particularly tech startups. And I'm wondering
Speaker 1: whether the government now is really leaning in on trying
Speaker 1: to revitalize the entrepreneurial spirit a little bit more.
Speaker 2: Well, that for sure, But to even have them push
Speaker 2: out measures focused on markets, on stocks and the bond
Speaker 2: market even is really quite surprising because it's not something
Speaker 2: that we've been used to, at least under this regime.
Speaker 2: And then if you look at the environment in the US,
Speaker 2: we have a piece running which I think is quite interesting.
Speaker 2: People can look for on the terminal that the year
Speaker 2: that was supposed to be the year of the bond
Speaker 2: market has completely changed. Now it's being overrun by all
Speaker 2: this demand for equities, and that has launched a rally
Speaker 2: right through the world. And it sort of starts to
Speaker 2: make you think whether there's a new wall of worry
Speaker 2: to climb investors worried about how much equities have rally.
Speaker 1: Speaking of walls of worry, another story from the Bloomberg
Speaker 1: terminal about Chinese firms lining up to invest in South
Speaker 1: Korea's battery industry. Now the aim here is to kind
Speaker 1: of get around the Biden administration's efforts to limit China's
Speaker 1: involvement in the ev supply chain of That was pretty interesting.
Speaker 2: Yeah, another story that we can spend some time on
Speaker 2: this morning. And then there's this one that the new
Speaker 2: Barbie film is reigniting discussion in China about feminism and
Speaker 2: women's rights. And as you know, there's not much in
Speaker 2: the way of roles for women in the power structure
Speaker 2: in China, so it comes at an interesting and opportune time.
Speaker 3: Now it's time for global news.
Speaker 2: Germany is warning officials its own officials that China is
Speaker 2: stepping up spying in the country. At Baxter has Global
Speaker 2: News from the nine to sixty newsroom in San Francisco.
Speaker 9: Ed.
Speaker 10: Yeah, when you go see Barbie, Brian, We're endeavoring to
Speaker 10: get your doll to take in with you.
Speaker 3: I'd loved it, love it, and I'll wear a pink
Speaker 3: T shirt.
Speaker 2: There you go.
Speaker 10: Okay, yeah, as you say. Germany warning its officials about
Speaker 10: China stepping up spying notice as China significantly stepped up
Speaker 10: efforts to obtain intelligence information in recent years and has
Speaker 10: built up a worldwide network of contacts and is constantly
Speaker 10: striving to expand. It also warned companies of caution and
Speaker 10: restraint in any active activities that could be interpreted as
Speaker 10: cooperation with a foreign secret service. China also getting a
Speaker 10: lot of attention on the US campaign trail, as well
Speaker 10: as a battle against fentanyl as well. A Republican Canada
Speaker 10: for President and former UN ambassador Niki Haley says the
Speaker 10: China military prowess continues to be built, continues to buy
Speaker 10: up US soil and property. She says that must stop.
Speaker 11: We wouldn't allow them to buy us soil. We would
Speaker 11: take the land that they bought back from them. We
Speaker 11: would go and say, no more, are we selling any
Speaker 11: sort of sensitive technologies that allow them to build up
Speaker 11: their military and threaten the US. We would stop that.
Speaker 11: We would tell our universities you either take Chinese money
Speaker 11: or American money, but the days of taking both are over,
Speaker 11: and we'd get that Chinese infiltration out.
Speaker 9: Yeah.
Speaker 10: She says she would ban Chinese companies from having access
Speaker 10: to sensitive technologies, not do business with any companies involved
Speaker 10: in technology theft. As for fentanyl on CBS, facination has
Speaker 10: heard here on Bloomberg says it must be addressed number one.
Speaker 11: Cause of debt for adults eighteen to forty nine. Margaret
Speaker 11: is fentanyl. And don't think for a second China doesn't
Speaker 11: know what they're doing. So what I would do is
Speaker 11: say to China, we will end all normal trade relations
Speaker 11: with you when until you stop killing Americans.
Speaker 10: Center Majority Leader Chuck Schumer today says a bill that
Speaker 10: will dent fentanyl trafficking is ready to go.
Speaker 12: For years, Chinese laboratories have been cooking up formulas of
Speaker 12: death and freely trafficking legal sentinel across New York and
Speaker 12: the United States, and this legislation can stop them dead
Speaker 12: in their track.
Speaker 10: Schumer says the bill will allow the president to declare
Speaker 10: a state of emergency with the ability to putting sanctions
Speaker 10: on China and on Mexico as well. US will give
Speaker 10: Taiwan three hundred and forty five million dollars in armed
Speaker 10: services and training, using a fast track authority that has
Speaker 10: relied on to speed up arms the Ukraine, US and
Speaker 10: Australia have reached an agreement to expand the US military
Speaker 10: footprint as both countries bolster defense ties and response to China.
Speaker 10: China Central Government telling local affair in Beijing and other
Speaker 10: areas of the North to be prepared for flooding. Donald
Speaker 10: Trump's Political Action Committee spent forty point two million dollars
Speaker 10: on legal costs in the first half of this year.
Speaker 10: Bloomberg sources say the group Save America set to disclose
Speaker 10: the amount and of filing tomorrow. New York Times says
Speaker 10: the money is significant enough that it could cause a
Speaker 10: potential money crisis for the campaign. Global News powered by
Speaker 10: more than twenty seven hundred journalists and analysts in over
Speaker 10: one hundred and twenty countries. In San Francisco, I'm Ed Baxter,
Speaker 10: and this is Bloomberg.
Speaker 2: I'm Brian Curtis in Hong Kong, along with Rashad Salomat
Speaker 2: in London, and our guest is Steve Sasnik, chief strategist
Speaker 2: at Interactive Brokers. Steve, I almost don't know where to start.
Speaker 2: We've got a pretty quiet vis at thirteen. We've got
Speaker 2: the bond market that's been pretty steady here of late,
Speaker 2: trapped with yields trapped in a tight range, equities that
Speaker 2: have been pretty positive. We talked about how there might
Speaker 2: be a new wall of worry, and that being that
Speaker 2: equities have gained too much too soon.
Speaker 3: How do you stand on that point?
Speaker 9: Well, good morning, Brian, and thanks as always for having me.
Speaker 9: You know, I'm actually sort of of that same belief
Speaker 9: that you know, the thing we have to fear most
Speaker 9: is the lack of fear. You know, I if you
Speaker 9: go back to the old saying, be greedy when others
Speaker 9: are fearful, and be fearful when others are greedy, well,
Speaker 9: you know, I think we're at a very greedy period
Speaker 9: right now and with very little fear being displayed. And
Speaker 9: and you you know, there's a million many different ways
Speaker 9: to do it, vics being one, and probably the most prominent,
Speaker 9: but that that starts to be concerning.
Speaker 13: Is it time? Then if it is concerning, Steve to
Speaker 13: perhaps change your out, perhaps look elsewhere, perhaps look a
Speaker 13: different asset classes, emerging markets instead.
Speaker 9: Rashard, I think that's that's I think one should always
Speaker 9: be looking at alternatives. I think, you know, especially when
Speaker 9: something's been working so well for so long, you know,
Speaker 9: it's tough to move away. It's tough to it's tough
Speaker 9: to fight the momentum. And I'm not really saying do that,
Speaker 9: but yes, I think that makes sense. I think if
Speaker 9: nothing else, you know, you have ten year US yields
Speaker 9: above four percent, you have you know, short term rates
Speaker 9: you know at five or or you know the very
Speaker 9: short term rates above five. So there is an alternative.
Speaker 9: There are places to put your money that that that
Speaker 9: can be safe if you think that stuff is going
Speaker 9: to come up. And we are, you know, a month
Speaker 9: away from what's always been a seasonally tricky time for
Speaker 9: global equities, particularly in the US.
Speaker 2: Does it feel a little like it's still going to
Speaker 2: run though for a while, maybe through August and then
Speaker 2: maybe then the mood might change.
Speaker 9: It does feel that way, you know it Right now?
Speaker 9: The momentum is so strong, and and you know, for example,
Speaker 9: we you know, we had that big bounce back on Friday,
Speaker 9: but you know, after the boj move, but it turns out,
Speaker 9: you know, the kind of little mini free week out
Speaker 9: we had Thursday afternoon was I think many ways emblematic
Speaker 9: of what happens when people are caught off guard. And
Speaker 9: I think so many people you know, are on one
Speaker 9: side of the trade right now, you know, they really
Speaker 9: flipped out, you know, Thursday after noon. Yeah, very short periods.
Speaker 9: I'm not necessarily even knowing why, because I don't think
Speaker 9: everybody fully appreciated that it was the Nikai story driving
Speaker 9: driving the market lower here.
Speaker 13: Oh, certainly before and everybody knew what was going on
Speaker 13: with the Nike report, but they didn't know exactly what
Speaker 13: was going to come out, And with the gyrations of
Speaker 13: the market gave you a sense that, hang on a second,
Speaker 13: are they or are they not abandoning YCC. In many ways,
Speaker 13: this is the first, the precursor to them doing it,
Speaker 13: but really it couldn't make sense of it. And I
Speaker 13: think that the Yen's behavior of a course of about
Speaker 13: twenty minutes is actually emblematic of that.
Speaker 9: Yeah, I mean, I think it's fascinating because last I
Speaker 9: guess two fridays ago, you know, I was on I
Speaker 9: was actually on Bloomberg Television in the States and in
Speaker 9: the UK, and you know, it was right after there
Speaker 9: was a different story saying that they weren't going to
Speaker 9: change their ICC policy at all, and so you know,
Speaker 9: I was asked and I said, oh, you know, boj
Speaker 9: should be the most interesting one, but it seems like
Speaker 9: they won't be. Then you know, then fast forward a
Speaker 9: week and you know, you know, they they they do
Speaker 9: what they said, they weren't what was reported they weren't
Speaker 9: going to do originally, and the market's just flipped out
Speaker 9: there they're having it was it was very minor uncertainty,
Speaker 9: but it's interesting how how spooked, you know, some real
Speaker 9: uncertainty got the marketplace. And not to me, it doesn't
Speaker 9: mean that it's time to abandon ship, but it tells
Speaker 9: me you've got to be a lot more wary because
Speaker 9: because people really do react very We turned from we
Speaker 9: turned from greed to fear very very quickly. Do you
Speaker 9: think turn it right around again?
Speaker 2: Can we sniff out a little bit of coordination efforts
Speaker 2: here between or among the FED the ECB and the BOJ,
Speaker 2: because it looks like you've got the Fed and the
Speaker 2: ECB maybe moving into a little bit of of an easing,
Speaker 2: not not necessarily easing, but easier than where they were,
Speaker 2: and that maybe, you know, they're always worried about markets
Speaker 2: running up, so maybe it's time for the BOJ to
Speaker 2: hint at just hint at getting a little bit more hawkish.
Speaker 9: Yeah, well, I mean, the BOJ you know, sort of
Speaker 9: the last easy central bank, you know, left Domino to fall,
Speaker 9: so to speak. You know, I think the rhetoric coming
Speaker 9: out of the Fed and the ECB is very much like,
Speaker 9: you know, all right, we're not really going to raise rates,
Speaker 9: but we're leaving it on the table. But the problem
Speaker 9: is what they have to They have to be very
Speaker 9: assiduous in their rhetoric because traders, if traders hear that
Speaker 9: there's some chance that they might not raise rates or
Speaker 9: that they might be easing, well then they take that
Speaker 9: to heart and run with it. And we saw that,
Speaker 9: you know, after Powell's comments. What we saw early Thursday
Speaker 9: was basically, you know, he said we might raise, we
Speaker 9: might not raise, and more or less Regard said the
Speaker 9: same thing, and the market's heard, oh we might not raise,
Speaker 9: that's wonderful, and off we went. So they the rhetoric
Speaker 9: will have to continue. And I think that, and now
Speaker 9: I think it's interesting that the boj is sort of
Speaker 9: on that same rhetorical side.
Speaker 2: Well.
Speaker 13: Absolutely, and it's interesting, you know, you win Powell switch
Speaker 13: from goldilocks not to not to gold amulet to raise
Speaker 13: or not to raise, which is what Lagarde is also echoing.
Speaker 13: Whereas and I just want to just carry on with
Speaker 13: the same sort of theme here, Richard. The third my
Speaker 13: kingdom for a horse is that's what everybody in China's
Speaker 13: screaming for with regard to stimulus.
Speaker 9: It's not just China. I think global markets are screened,
Speaker 9: you know they they are so eager for Chinese stimulus.
Speaker 9: And I and you know the story, the story that
Speaker 9: you know about the regulators calling in the brokers and
Speaker 9: trying to prop up the market. That is the stuff
Speaker 9: that that you know, That's that's what traders want to hear,
Speaker 9: is you know, anything any stimulative, any stimulus. But we've
Speaker 9: been disappointed by Chinese stimulus. Before I think everybody was
Speaker 9: expecting this big COVID recovery would happen just organically it didn't.
Speaker 9: I think what it hasn't happened. The markets have been
Speaker 9: itching for some some sort of sign that that there
Speaker 9: would be real stimulus from China, and up till now
Speaker 9: it's been baby steps. So I think, you know, if
Speaker 9: there's overt manipulation, overt goosing of the stock market, shall
Speaker 9: we say, traders want to hear that sort of thing,
Speaker 9: whether or not it's the right policy, whether or not
Speaker 9: it's it's going to be long term effective. Any move
Speaker 9: that stimulates markets is just being you know, wrapped up
Speaker 9: by traders eagerly.
Speaker 3: Yeah.
Speaker 2: Well, Risch asked you about emerging markets earlier, and I
Speaker 2: think we can note that EEM has had a nice
Speaker 2: bounce here and uh and stocks like ten Cent and
Speaker 2: Alibamba have had something like a ten percent bounce in there.
Speaker 2: How how strong could this phase be about money? Perhaps
Speaker 2: rather than going back to the bond mark, if it
Speaker 2: eases out of US stocks that it feeds into emerging
Speaker 2: market stocks.
Speaker 9: That really becomes a question of does the risk on
Speaker 9: trade that we're seeing broaden, and if and if it
Speaker 9: does broaden, emerging markets are a natural beneficiary of that,
Speaker 9: and especially if if, if we really do skirt a recession. Well,
Speaker 9: if we skirt a recession in the you know, in
Speaker 9: the G seven countries or at least in the US,
Speaker 9: you know, the emerging markets are definitely benefit from that,
Speaker 9: from that type of from that type of economic environment
Speaker 9: and that type of risk on thinking. So yeah, you
Speaker 9: do have to be considering, you know, smaller, smaller economies
Speaker 9: risk on markets. You know, the dollar. You know that
Speaker 9: the dollar is not as much of a headwind as
Speaker 9: it's been to a lot of them as well, which
Speaker 9: which is another good sign. So yeah, it's it's clearly
Speaker 9: something to keep in mind.
Speaker 2: Okay, Steve, we got really one time for one more question.
Speaker 2: We don't want to steal too much time from Ed Baxter,
Speaker 2: although he did have me carrying a Barbie doll into
Speaker 2: the movie theater. But anyway, number one, pick here, what's
Speaker 2: the best way to make money over the next few weeks.
Speaker 9: I think what you want to do for the next
Speaker 9: couple of weeks is start to diversify. I think if
Speaker 9: you're in stocks and making money, I think you don't
Speaker 9: necessarily run for the exits, but I think you start
Speaker 9: to hedge your bets, whether that's with options or volatility
Speaker 9: trades and moving into a little bit of fixed income,
Speaker 9: just broadening your portfolio out a little bit, getting a
Speaker 9: bit more defensive, because I think we've had this great
Speaker 9: run and I want to see it persist. But I
Speaker 9: want people to be little less risk. There's risk taking,
Speaker 9: little more risk averse.
Speaker 2: This is Bloomberg Daybreak Asia, your morning brief on this
Speaker 2: story is making news from Hong Kong to Singapore and
Speaker 2: Wall Street.
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Speaker 3: I'm Brian Curtis.
Speaker 1: And I'm Doug Chrisner. Join us again tomorrow for all
Speaker 1: the news you need to start your day right here
Speaker 1: on Bloomberg day Break Asia