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Speaker 1: This is Bloomberg Daybreak Asia for this Friday, June ninth

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Speaker 1: in Hong Kong, Thursday June eighth in New York and

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Speaker 1: coming up today.

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Speaker 2: The S and P five hundred enters of bull Market

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Speaker 2: as tech shares rally.

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Speaker 1: General Motors will adapt its electric vehicles to Tesla superchargers,

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Speaker 1: creating a new industry standard.

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Speaker 3: In the United.

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Speaker 2: States, and China's consumer price inflation may have stayed muted

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Speaker 2: last month.

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Speaker 4: The US has reports of China setting up spy facilities

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Speaker 4: on Cuba are not accurate. Sunak at the White House

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Speaker 4: talking China, Ukraine and sharing tech. Canadian wildfire smoke spreads

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Speaker 4: farther south in the US. I'med Baxter with Global News.

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Speaker 3: That's all straight ahead on Bloomberg Daybreak Asia, the business

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Speaker 3: news you need to start your day in just one

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Speaker 3: fifteen minute podcast available on Apple, Spotify, the Bloomberg Business App,

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Speaker 3: and everywhere you get your podcasts.

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Speaker 2: Good morning, I'm Doug Chrisner and I'm Brian Curtiz.

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Speaker 1: Here are the stories we're following today. Goldbin Sachs COO

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Speaker 1: John Waldron says the US may yet avoid a recession,

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Speaker 1: but he said the firm is preparing for a mini

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Speaker 1: stagflation scenario, is Waldron speaking at the Bloomberg invest conference

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Speaker 1: in New York.

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Speaker 5: It might not be massive stagflation, but if you have

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Speaker 5: sluggish growth one percent plus minus growth and inflation doesn't

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Speaker 5: really get down below three percent and rates have to

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Speaker 5: stay three plus percent for a while, that's not going

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Speaker 5: to feel It's not going to be called the recession.

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Speaker 5: It's not going to feel great.

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Speaker 1: Many economists have been predicting a recession is coming. As

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Speaker 1: to Fed aggressively hikes interest rates, traders are now wondering

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Speaker 1: whether FED officials will keep interest rates higher for longer.

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Speaker 1: Officials will have their eye on the key US inflation

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Speaker 1: data out next week, and of course they will have

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Speaker 1: been looking at those jobless claims today. After next week,

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Speaker 1: the FED or in next week, the FED will be

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Speaker 1: issuing its next policy decision on the fourteenth of June.

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Speaker 2: Big news after the bell when it comes to electric vehicles,

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Speaker 2: General Motors will now adapt its evs to Tesla's superchargers.

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Speaker 2: We have more from Bloomberg's Charlie Pellett.

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Speaker 6: It is following Ford Motor's lead, and it all but

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Speaker 6: ensures that it will become an industry standard. In the US,

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Speaker 6: GM CEO Mary Bara broke her seven month silence on

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Speaker 6: Twitter to announce the news, with Tesla's CEO Elon Musk

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Speaker 6: on Twitter spaces saying GM evs will gain access to

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Speaker 6: twelve thousand superchargers. Tesla's network will be open to GM

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Speaker 6: EV drivers starting in twenty twenty four and will require

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Speaker 6: an adapter beginning in twenty twenty five. GM will build

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Speaker 6: its electric vehicles with a port for direct access to

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Speaker 6: Tesla superchargers in New York. Charlie Pellett Bloomberg, Daybreak Asia.

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Speaker 1: And again as mentioned a few moments to go, Tesla

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Speaker 1: stock was a four point six percent in this latest session.

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Speaker 1: Citygroup has disbanded a global team that does foreign exchange analysis.

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Speaker 1: Get that story from Bloomberg's Tracy Junkie.

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Speaker 7: City FX is no more. The City Group Strategy team

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Speaker 7: provided commentary and analysis on foreign exchange markets, and it's

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Speaker 7: been dismantled. A person with knowledge of the change tells

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Speaker 7: Bloomberg that other parts of the bank perform similar services.

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Speaker 7: We're told some FX analysts may continue to work in

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Speaker 7: other areas at the bank, but employees in London and

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Speaker 7: New York are heading for the exits Tracy Junkie Bloomberg

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Speaker 7: Daybreak Asia.

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Speaker 2: Meantime, over at Bank of America are reworking of leadership

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Speaker 2: in the bank's investment banking unit. We have that story

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Speaker 2: from Bloomberg's and Kates.

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Speaker 8: Bank of America is shifting responsibility for its global transaction

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Speaker 8: services business to Mark Monaco, who will continue in his

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Speaker 8: current role leading Enterprise Payments. Faiza Model become co head

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Speaker 8: of Global Capital Markets alongside sirank On Kari. Bank of

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Speaker 8: America says bringing these areas more closely together supports efforts

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Speaker 8: to drive capabilities even further for its business, corporate, and

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Speaker 8: institutional clients in the US and around the world. Wall

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Speaker 8: Street investment banks are still facing a muted environment for

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Speaker 8: deal making in Washington and Kate's Bloomberg day Break Asia.

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Speaker 1: Chinese consumer prices are likely to have stayed flat again

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Speaker 1: in May. Bloomberg's Joan Wong has the story from Hong Kong.

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Speaker 9: High frequency data show a mixed picture, but on balanced

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Speaker 9: consumer inflation may have etched up. Bloomberg Economic SSS CPI

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Speaker 9: probably rose four tenths of one percent from a year earlier.

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Speaker 9: This would be a marginal pickup from April's a tenth

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Speaker 9: of one percent pace, but it would be well below

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Speaker 9: last year's two percent average. On the other hand, PBI

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Speaker 9: may have deepened this light to four point three percent,

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Speaker 9: reflecting weak demand, and that's reinforcing the need for further

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Speaker 9: stimulus in Hong Kong. I' join Wang Bloomberg Day brig Asia.

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Speaker 1: I'm Brian Curtis, along with Doug Christner and Rashad Sama

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Speaker 1: will join us a little bit later. So I heard

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Speaker 1: you mentioned bull market. Technically a bull market. The bears

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Speaker 1: don't seem all that concerned here at the moment about

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Speaker 1: forty two hundred or forty three hundred for the S

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Speaker 1: and P five hundred, Doug, because as you mentioned, the

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Speaker 1: gains are kind of technical in that what we're talking

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Speaker 1: about here as a cap weighted index and it's been

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Speaker 1: led by seven to ten stocks. But what we're hearing

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Speaker 1: on this program and other is from the bears is

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Speaker 1: that they're more concerned about breadth. If cyclical shares really

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Speaker 1: do make a comeback, it's in early days, and today

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Speaker 1: wasn't a day for that because, as you mentioned, we

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Speaker 1: had financials and materials and industrials not doing all that well.

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Speaker 1: But that would be significant, and it's actually been a

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Speaker 1: pretty good move for banks, small caps, transports, and industrials

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Speaker 1: in June.

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Speaker 2: Yeah, although the small caps I think hit a bit

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Speaker 2: of a wall today with a Russell down about four

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Speaker 2: tens to one percent. But to your point, Brian, so

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Speaker 2: far this week the Russell two thousand is up about

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Speaker 2: two point eight percent. And the theme of AI still

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Speaker 2: infecting the tech space. We were talking on the pre

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Speaker 2: show meeting about the Adobe News, the company planning to

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Speaker 2: sell a new Aive subscription with copyright services. That stock

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Speaker 2: popped by more than five and a half percent today.

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Speaker 1: Yeah, it's really still the case that if you deliver

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Speaker 1: on the earning side, you get rewarded. If you don't,

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Speaker 1: you're still getting punished pretty sharply. We did see a

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Speaker 1: pretty good move from docu signed today as well after

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Speaker 1: its earnings. But the jump in jobless claims is interesting.

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Speaker 1: Maybe take it with a grain of salt in that

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Speaker 1: it was a holiday week. Is that what you're hearing?

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Speaker 2: Maybe, Although there's some people are saying that a crack

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Speaker 2: may be emerging now in the labor market. That's one

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Speaker 2: of the things I think that the market has been

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Speaker 2: waiting for that would justify the FED maybe to sometime

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Speaker 2: down the road engineer a policy shift. I think it's

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Speaker 2: fair to say that we're expecting a pause next week.

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Speaker 2: Maybe the communication would include the fact that the FED

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Speaker 2: is poised to high rates if necessary in the future.

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Speaker 2: But when you get data like this today, I think

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Speaker 2: it just it creates a little bit of enthusiasm for

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Speaker 2: those who are hoping for a pivot.

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Speaker 3: Yeah.

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Speaker 1: I saw a few comments though that because of them

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Speaker 1: Orial Day holiday, might be good to wait another week

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Speaker 1: or two before we take any really make any start conclusions.

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Speaker 1: All right, now it's time for Global News. I'm Brian

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Speaker 1: Curtis along with Rishad Salamat, and let's get over to

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Speaker 1: Ed Baxter, who is looking at markets in San Francisco.

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Speaker 4: Ed, all right, thank you very much, Brian. The White

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Speaker 4: House is saying today that reports of China setting up

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Speaker 4: spying facilities in Cuba are not accurate. The report yesterday

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Speaker 4: had said that China would set up a spy base

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Speaker 4: on the island with the antent of targeting US military

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Speaker 4: bases and communications. National Security Council spokesman John Kirby on

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Speaker 4: MSNBC says, no, Look, I've seen.

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Speaker 10: That press report, it's not accurate. What I can tell

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Speaker 10: you is that we have been concerned since day one

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Speaker 10: of this administration about China's influence activities around the world,

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Speaker 10: certainly in this hemisphere and in this region. We're watching

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Speaker 10: this very very closely, and we will, and we have

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Speaker 10: and we'll continue to take steps to mitigate any potential

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Speaker 10: threat that those activities might post.

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Speaker 4: Now, Kirby did not expand on what is not accurate

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Speaker 4: or whether the report is not true. Kirby also said

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Speaker 4: he had no announcement to make about potential State Department

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Speaker 4: trip to Beijing, but says work is being done to

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Speaker 4: get it and Abiden she meeting as well on the books.

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Speaker 4: UK Prime Minister Rishiasunak at the White House today, saying

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Speaker 4: there is total agreement between the two countries about China's

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Speaker 4: threat to the globe.

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Speaker 11: Countries like China and Russia are willing to manipulate and

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Speaker 11: exploit our openness, steal our intellectual property, use technology for

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Speaker 11: authoritarian ends, or withdraw crucial resources like energy, they will

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Speaker 11: not succeed.

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Speaker 1: Yeah.

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Speaker 4: Meanwhile, the two have agreed to work on an agreement

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Speaker 4: that could help British automakers qualify for electric car subsidies

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Speaker 4: and speed the joint development of advanced weapons like hypersonic missiles.

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Speaker 4: This would entail using critical minerals, but President Joe Biden

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Speaker 4: says defense.

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Speaker 12: We're doing more to prevent technologies that are invented and

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Speaker 12: developed in our countries from being used for military or

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Speaker 12: intelligence purposes by countries that do not share our values.

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Speaker 4: Now both agreed aid for Ukraine would not be cut

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Speaker 4: or ended. The smoke from the terrible Canadian wildfires has

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Speaker 4: spread south along the eastern seaboard of the US. Stretches

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Speaker 4: from Canada down through Washington, d C. To the Carolinas.

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Speaker 4: Now Bloomberg's Laura Amayas and New York City.

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Speaker 13: New York City public schools are going to be remote tomorrow.

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Speaker 13: Several major outdoor events that were scheduled for today are canceled.

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Speaker 13: Some Shakespeare in the Park performances and Broadway shows have

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Speaker 13: been rescheduled.

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Speaker 4: Yeah, but Mayor Eric Adams says some relief may be coming.

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Speaker 14: As of right now, the smoke models are not indicating

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Speaker 14: another large plumb over the city, so there's a chance

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Speaker 14: for significant improvement by tomorrow morning and throughout the day tomorrow.

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Speaker 4: Good news, But New Jersey Governor Phil Murphy says. Canadian

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Speaker 4: authorities say while they are slowing the fire's progress, it

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Speaker 4: could still grow.

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Speaker 15: I was on with the Canadian authorities last evening and

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Speaker 15: the scale of this is extraordinary. They said they had

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Speaker 15: ten million acres burning, that that number was going to

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Speaker 15: go up.

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Speaker 6: They believed to twelve million.

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Speaker 4: Meteorologists say it's up to air and wind patterns now

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Speaker 4: to determine how bad things will get in each area.

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Speaker 4: Global News powered by more than twenty seven hundred journalists

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Speaker 4: and analysts in over one hundred twenty countries. In San Francisco,

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Speaker 4: I'm at Baxter and this is Bloomberg.

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Speaker 1: I'm Bran Curtis, along with Rushad Salamat. ELFREDA. Junka is

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Speaker 1: our guest at client portfolio manager and investment specialist at

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Speaker 1: Alfinity Investment Management. Elfreda, thank you for joining us. Is

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Speaker 1: that what you're looking for is breadth in the market

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Speaker 1: to confirm that this hasn't all been about the top

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Speaker 1: seven to ten stocks, but that the economy is coming back.

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Speaker 1: Is that important to you?

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Speaker 11: Yes?

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Speaker 16: Absolutely. Here Today, as you've mentioned earlier, it's been all

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Speaker 16: about the top seven stocks contributing one hundred percent. What

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Speaker 16: we as equity investors, need to see is a widening

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Speaker 16: of that breadth, not just in the tech sector, but

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Speaker 16: really what we want to see is that broadening across

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Speaker 16: most of the sectors in the in the economy, in

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Speaker 16: the market. So we're constantly looking for opportunities elsewhere as well.

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Speaker 17: So for a whay, actually are you investing then you

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Speaker 17: don't have really any exposure to Japan or China in

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Speaker 17: the case of the former, that's that's quite quite a lacuna.

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Speaker 16: Yes, So we are currently invested in the US Europe.

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Speaker 16: We always invest across the board. For example, one of

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Speaker 16: our biggest stocks currently is Macado Libre, which is in Latin.

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Speaker 16: So we really do try and have that broad exposure.

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Speaker 16: And what's important for US is also where companies generate

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Speaker 16: the revenues, not just where they are listed. So we

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Speaker 16: currently are finding new opportunities really across a number of

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Speaker 16: different regions. We're not just specifically looking at at the

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Speaker 16: US or you know, just just Europe. We are going

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Speaker 16: wide and far trying to find those opportunities. We specifically

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Speaker 16: look for companies that's in an earnings upgrade cycle and

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Speaker 16: that's high quality and trading at reasonable valuations and at

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Speaker 16: the moment that is that is quite a fee to

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Speaker 16: find companies with really solid earnings growth that you believe

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Speaker 16: can be sustainable in this environment.

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Speaker 1: Yeah, I see on your conviction list is Microsoft, McDonald's

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Speaker 1: and Intuitive Surgical. It's it's good to get some names

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Speaker 1: from our guests.

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Speaker 3: Yeah.

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Speaker 1: The important the importance of bread in the market. It

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Speaker 1: may not be so important for the index numbers themselves, right,

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Speaker 1: because if the megacaps settle back a little bit, then

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Speaker 1: the numbers may come down, but it would indicate I mean,

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Speaker 1: the only recent people would be buying cyclicals in numbers

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Speaker 1: would be that they see the economy as coming back,

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Speaker 1: and that would be a kind of indication perhaps that

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Speaker 1: you get as soft landing and not some sort of

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Speaker 1: stagflation or recession.

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Speaker 15: Yeah.

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Speaker 16: Absolutely, I think at this point in time we do

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Speaker 16: view the risks as being quite balanced. Yes, there's a

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Speaker 16: lot of optimism overnight on the back of the sort

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Speaker 16: of unemployment numbers spiking, but I think we really need

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Speaker 16: to look back to last week when you still had

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Speaker 16: really strong perils numbers. So the feed really has a

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Speaker 16: lot to look at and they won't react on one

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Speaker 16: specific point for us, what we do look for at

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Speaker 16: the moment, is we look, as you say, for that

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Speaker 16: broader breath in the market. I think it's quite early

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Speaker 16: to really say we out of the woods heat and

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Speaker 16: we can start to price in right cuts in the future.

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Speaker 16: So that is why if you think about that sort

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Speaker 16: of conviction list that you've mentioned, there is a defensive

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Speaker 16: name in there like McDonald's in combination with Microsoft. For US,

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Speaker 16: it's really important at this point in time to remain

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Speaker 16: quite diversified, not just across regions as we've previously mentioned,

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Speaker 16: but also across industries and seams playing out in the market.

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Speaker 16: I think it's quite dangerous to put all your eggs

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Speaker 16: in one basket and just go into tech stocks because

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Speaker 16: they the flavor of the month. For US, companies like

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Speaker 16: McDonald's play is an important part in a portfolio. On

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Speaker 16: evenings where you can see the uncertainty cree back in.

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Speaker 16: That's when they do their job.

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Speaker 11: For red.

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Speaker 17: Yeah, I've just looked at those dogs and I in surgery.

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Speaker 17: That's a crowded trade, isn't it around the healthcare side

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Speaker 17: of think so, I mean it's also one which has

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Speaker 17: had this pomo about it, but it's up forty four

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Speaker 17: percent from this time last year, McDonald's up eighteen percent,

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Speaker 17: and Microsoft up twenty two percent. At what point do

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Speaker 17: you actually say that's you know, I'm going to realize

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Speaker 17: these gains and what do you look at next?

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Speaker 16: Yeah, I think at this point these all stocks that

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Speaker 16: we've had for quite some time, and we've enjoyed the

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Speaker 16: fact that they've been relatively resilient in a very sort

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Speaker 16: of volatile environment over the last twelve months. For us,

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Speaker 16: it's important to ensure that there's still additional earnings growth

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Speaker 16: coming through. That's particularly important for us as we want

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Speaker 16: to ensure we find those companies that's in a longer

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Speaker 16: earnings upgrade cycle now, companies like McDonald's it's not expensive

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Speaker 16: yet and continue to trade well in evenings when TICH

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Speaker 16: stocks for examples, for example, don't trade well. But at

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Speaker 16: the end of the day, I think for us, it's

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Speaker 16: about managing your position size as these stocks become more expensive.

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