WEBVTT - Stocks Soft Open and More Flying Objects

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<v Speaker 1>This is Bloomberg Daybreak Asia for this Monday, February in

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<v Speaker 1>Hong Kong, Wednesday February twelve in New York, and coming

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<v Speaker 1>up today. US consumer prices are projected to pick up

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<v Speaker 1>in January. Sent A majority leader Chuck Schumer says the

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<v Speaker 1>US should look at banning TikTok in the United States.

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<v Speaker 1>Economist Kazo Huaida maybe the next bo j governor, as

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<v Speaker 1>leading candidate Massa Yoshi Amamiya refuses to take the role.

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<v Speaker 1>An unidentified object has reportedly been shot down over Lake Huron,

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<v Speaker 1>China is reportedly getting ready to take down an unidentified

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<v Speaker 1>object flying over Changdao. Turkey broadens its investigation into contractors

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<v Speaker 1>I America HRST wits with Global News. We'll keep you

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<v Speaker 1>up today on Super Bowl fifty seven and the latest

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<v Speaker 1>from the Pitch. I'm Pete Fox. Those stories and more

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<v Speaker 1>coming up in Bloomberg Sports. That's all straight Ahead on

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<v Speaker 1>Bloomberg Daybreak Asia on Bloomberg eleven and three on New York,

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<v Speaker 1>Bloomberg Washington, d See Bloomberg one six one, Boston, Bloomberg

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<v Speaker 1>nine sixties, San Francisco, Syrius x M one nineteen and

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<v Speaker 1>around the World on Bloomberg Radio dot Com and via

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<v Speaker 1>the Bloomberg Business app. Good morning, I'm Dud Prisoner and

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<v Speaker 1>I'm Brian Curtis Hero. The stories were following today, Japanese

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<v Speaker 1>Prime Minister Fumio Kishida seems to have chosen an outsider

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<v Speaker 1>as the next governor at the Bank of Japan. We're

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<v Speaker 1>told economist and former BOJ board member Casual Ueda is

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<v Speaker 1>sent to be nominated tomorrow our time, Earlier than Nick

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<v Speaker 1>had reported that the leading candidate, Deputy Governor Masayoshi Alma Mia,

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<v Speaker 1>had refused to take the post house Bloomberg's Kathleen Hayes

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<v Speaker 1>right now, you kind of have to guess, is he

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<v Speaker 1>going to be more hawkish as that why they he's

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<v Speaker 1>taking over instead of someone else, or is he going

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<v Speaker 1>to be dubbish. When he was approached by reporters just

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<v Speaker 1>in the last couple of days, he said the current

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<v Speaker 1>policy is appropriate, I read it too down on monetary

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<v Speaker 1>easy needs to be can teeded at this point. He

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<v Speaker 1>has also said policy review should be done at some point.

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<v Speaker 1>He also has said recently in an article that the

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<v Speaker 1>d o J is far from achieving two percent inflation

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<v Speaker 1>that sustainable and rate height to avoid a week again

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<v Speaker 1>would just lead the econom deterioration. The end initially rose

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<v Speaker 1>to the strong side of one thirty against the dollar

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<v Speaker 1>on media reports of Uwaita's selection, markets viewed him as

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<v Speaker 1>more hawkish than Almo Mia, but those gains were trimmed

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<v Speaker 1>after Huwaita said that the b o J stimulus should

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<v Speaker 1>stay in place. We've got a lot more for markets

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<v Speaker 1>to digest in the coming week, including the latest readings

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<v Speaker 1>on US inflation. We have more from Bloomberg, sas Anna Palmer.

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<v Speaker 1>The Consumer Prize Index comes out on Tuesday, with economists

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<v Speaker 1>predicting the prices of goods and services likely rose last month,

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<v Speaker 1>a development that would point to Federal Reserve policymakers needing

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<v Speaker 1>to do more to lower inflation. Economists surveyed by Bloomberg

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<v Speaker 1>are forecasting the CPI will have increased by a half

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<v Speaker 1>percent month over month in Jail Nuary, and the core

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<v Speaker 1>CPI excluding food and energy rose four tenths of one percent.

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<v Speaker 1>While the monthly cp I figure likely rose in January,

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<v Speaker 1>the annual headline number is projected to have come down

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<v Speaker 1>to six point two from six and a half percent

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<v Speaker 1>the prior month. Susanna Palmer Bloomberg Daybreak Asia. And beyond

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<v Speaker 1>the inflation data, there'll be an abundance of earnings to

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<v Speaker 1>sift through. We have a preview from Bloomberg's Charlie Pellett.

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<v Speaker 1>We'll be hearing from companies over a wide range of

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<v Speaker 1>industries amid anxiety over rising interest rates and inflation. Emily

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<v Speaker 1>Rowland is co chief investment strategist at JGE Investments. We

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<v Speaker 1>think this is going to be a top environment for

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<v Speaker 1>companies going forward. Costs or elevated, especially the cost of

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<v Speaker 1>capital having risen, a lot that is yet to be absorbed,

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<v Speaker 1>and top line growth slowing meaningfully. Is consumers start to

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<v Speaker 1>retrench companies have too much stuff. We think there's going

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<v Speaker 1>to be a major war on margins. Among the company's

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<v Speaker 1>reporting this week Airbnb, Analog Devices, a i G, Applied Material,

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<v Speaker 1>Cisco Systems, Coca Cola, and Zillo in New York, Charlie Pellett,

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<v Speaker 1>Bloomberg Daybreak Asia. Senate lawmakers have revived legislation to band

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<v Speaker 1>TikTok in the US. The concern is over data collected

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<v Speaker 1>by this app ending up in the hands of the

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<v Speaker 1>Chinese Communist Party. Now a similar measure failed in the

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<v Speaker 1>last Congress. This latest move is likely to prompt opposition

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<v Speaker 1>not only from the tech lobby, but millions of mostly

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<v Speaker 1>young users on this platform. Here is Senate Majority Leader

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<v Speaker 1>Chuck Schumer. It's something that should be looked at. We

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<v Speaker 1>do know there's Chinese ownership of the company that owns TikTok,

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<v Speaker 1>and so there are some people in the Commerce Committee

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<v Speaker 1>that are looking into that right now. We'll see, We'll

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<v Speaker 1>see where they come out. Senate Majority Leader Chuck Schumer

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<v Speaker 1>on ABC's This Week. Heard earlier here on Bloomberg Radio.

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<v Speaker 1>By the way, the CEO of TikTok, Shall Ze Chew,

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<v Speaker 1>is especially or he is due to appear, I should say,

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<v Speaker 1>before the House Energy and Commerce Committee on March. Bill

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<v Speaker 1>Ackman's Pershing Square Holdings is said to be considering a

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<v Speaker 1>possible listing in New York. Currently, the company trades in

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<v Speaker 1>London and Amsterdam. By listening in the United States, it

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<v Speaker 1>would allow Pershing to market shares directly to American investors.

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<v Speaker 1>The Sunday Times reports the move could help Pershing close

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<v Speaker 1>the discount at which it shares trade compared to its

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<v Speaker 1>net assets. Ackman had also floated this idea last summer

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<v Speaker 1>of Pershing listening. In the United States, we have Walter

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<v Speaker 1>Todd coming up in a few moments, president and chief

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<v Speaker 1>investment officer and managing director at Greenwood Capital, and among

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<v Speaker 1>the things we might be talking about, Doug is interesting

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<v Speaker 1>here to see UH an outsider possibly taking the helm

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<v Speaker 1>at the Bank of Japan, and if not really hawkish,

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<v Speaker 1>maybe a hawkish tilt is still in the guards. Clearly

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<v Speaker 1>an academic, former Treasury Secretary Larry Summers was telling our

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<v Speaker 1>David Western on a Bloomberg Wall Street week that he

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<v Speaker 1>is very much Japan's ben Burnanke. So as the b

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<v Speaker 1>o J looks for a way to unwind this ultra

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<v Speaker 1>easy monetary policy that it has had now for decades,

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<v Speaker 1>maybe he's the guy to do it. Yeah, And looking

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<v Speaker 1>at inflation in the United States, because everybody in the

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<v Speaker 1>world over is really thinking about inflation these days, even

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<v Speaker 1>there in in Tokyo. But I was amazed to see

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<v Speaker 1>that black Rock sees the pace of inflation hovering around

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<v Speaker 1>three and a half percent for the next five years.

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<v Speaker 1>And you remember how I responded or reacted to John

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<v Speaker 1>Williams comment last week that that the Fed needed to

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<v Speaker 1>get about five percent and keep it up there for

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<v Speaker 1>years maybe he said a few years I thought he

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<v Speaker 1>would be scolded by the Chair of the Fed, and

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<v Speaker 1>he may well have, but we don't know. Well. Pat

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<v Speaker 1>Harker was saying on Friday that the key rate, the

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<v Speaker 1>Fed funds rate, needs to get above five percent and

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<v Speaker 1>stay there, stay there. So I think they realize that

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<v Speaker 1>it's going to take a lot to get price pressures

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<v Speaker 1>under control. And to this point, Alliance Burnt Bernstein makes

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<v Speaker 1>this point that although inflation is moderating, that investors shouldn't

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<v Speaker 1>be betting on that. They are underestimating the structural changes

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<v Speaker 1>that we have seen to higher levels inflation that are

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<v Speaker 1>sticky changes brought by deglobalization and labor shortages. And black

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<v Speaker 1>Rock and Pimco also say it's no time to ditch

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<v Speaker 1>inflation linked debt, particularly in the services sector of the economy.

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<v Speaker 1>And look, I'm before I let you go. H New

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<v Speaker 1>Zealand's permanent UH Services Index, I'm sorry, that's performance Services

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<v Speaker 1>Index was up in the month of January to a

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<v Speaker 1>reading of fifty four five, much hotter than forecast. So

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<v Speaker 1>it just underscores the strength of the services economy. Alright,

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<v Speaker 1>it's nine minute minutes past the hour. It's time for

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<v Speaker 1>Global news. Another unidentified object shot down today, we get

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<v Speaker 1>to the Bloomberg New News room in Erica. Perskuitz, Erica, Brian.

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<v Speaker 1>It was shot down under over Lake Huron, I should

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<v Speaker 1>say in Michigan. This time. The Pentagon used an F

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<v Speaker 1>sixteen Fighter but took down the object with a sidewinder

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<v Speaker 1>air to air missile, the same missile used on the

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<v Speaker 1>other three objects that were also shot down this month.

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<v Speaker 1>The f A a closed airspace over parts of Lake

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<v Speaker 1>Michigan Sunday, sighting National Defense. It's the third object to

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<v Speaker 1>be shot down over North America this weekend. The first

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<v Speaker 1>was down over Alaska Friday, the second taken down over

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<v Speaker 1>Canada Sunday, and the White House says it is too

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<v Speaker 1>early to say what the latest objects shot down were. However,

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<v Speaker 1>Senate Majority Leader Chuck Schumer says they are believed to

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<v Speaker 1>have also been high altitude balloons appearing on CBS's face

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<v Speaker 1>the Nation. Montana's Senator John Tester says there's even a

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<v Speaker 1>possibility of another object flying over Montana's airspace. There was

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<v Speaker 1>an anomaly and they've investigated. I think it got dark

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<v Speaker 1>so they couldn't fully check it out. Tester said, it

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<v Speaker 1>could be a false alarm. Airspace over the central part

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<v Speaker 1>of the state was temporarily Saturday, while Norad sent military

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<v Speaker 1>aircraft to investigate. However, they were unable to find anything. Meanwhile,

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<v Speaker 1>according to reports, China is getting ready to take down

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<v Speaker 1>an unidentified object flying over waters near the port city

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<v Speaker 1>of ching Dao, which is home to a major naval

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<v Speaker 1>base for the People's Liberation Army. This according to Chinese

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<v Speaker 1>news outlet. The paper no word on what the object is.

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<v Speaker 1>The naval base hosts both ballistic and nuclear attack submarines

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<v Speaker 1>and is the command headquarter of the country's North Sea Fleet.

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<v Speaker 1>Turkey is widening its investigation into contractors as the earthquake

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<v Speaker 1>death toll rises. So far, more than thirty three thousand

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<v Speaker 1>people have died in Turkey and Syria as a result

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<v Speaker 1>of last week's devastating quake. At Turkish President Air Duan

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<v Speaker 1>is being accused of pushing through allowing property owners to

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<v Speaker 1>have construction violations forgiven without bringing their buildings up to code,

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<v Speaker 1>a move that seemed to have appealed to voters on

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<v Speaker 1>his two thousand nineteen campaign trail. The Turkish government has

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<v Speaker 1>has responded by arresting building contractors and others with ties

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<v Speaker 1>to collapse buildings, and the Justice Ministry has set up

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<v Speaker 1>investigation bureaus for earthquake crimes across the affected area. G

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<v Speaker 1>seven foreign ministers are preparing to meet in Munich as

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<v Speaker 1>Russia's military actions against eastern Ukraine appeared to be intensifying.

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<v Speaker 1>Top Us and Ukrainian military leaders spoke ahead of Tuesday's

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<v Speaker 1>meeting of the Allied Nations in Brussels, where foreign ministers

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<v Speaker 1>from the Group of Seven will reportedly also meet during

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<v Speaker 1>the Munich event. Russia on Friday launched its biggest barrage

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<v Speaker 1>of missile attacks so far this year, as President Zelinsky

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<v Speaker 1>seeks more weapons to fend off Putin's invasion. Global News

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<v Speaker 1>powered by more than journalists and analysts and more than

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<v Speaker 1>a hundred twenty countries. I America Hrstwaitz, this is Bloomberg,

0:10:38.559 --> 0:10:41.040
<v Speaker 1>and this is Bloomberg. Gaybreak Gasia in Hong Kong. I'm

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<v Speaker 1>Brian Curtis, along with Rashad Slam and our guest is

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<v Speaker 1>Walter Todd, President, Chief Investment Officer, Managing director at Greenwood Capital.

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<v Speaker 1>Walter a tough week last week, tough week for for

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<v Speaker 1>the stock market and the and the bond market. Is

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<v Speaker 1>the worst week for the bond market since back in September.

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<v Speaker 1>Is fair to say that all of a sudden, now

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<v Speaker 1>the inflation hawks have the upper hand, are they right? Yeah, well,

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<v Speaker 1>we'll see right on Tuesday. Um. Certainly the revisions that

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<v Speaker 1>came out that didn't get a lot of coverage, honestly,

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<v Speaker 1>But yeah, I think you did see some market reaction,

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<v Speaker 1>as you alluded to with with bonds move higher, and

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<v Speaker 1>of course we've seen commodities move up here recently, which

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<v Speaker 1>is probably putting some additional upward pressure on yields as well.

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<v Speaker 1>So I mean, it's it means it's safe to say

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<v Speaker 1>three is Um. It feels a bit like an episode

0:11:32.600 --> 0:11:35.320
<v Speaker 1>of the Twilight Zone. I don't know who had UFOs

0:11:35.360 --> 0:11:38.600
<v Speaker 1>on the bingo card, but I certainly did not. But anyway,

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<v Speaker 1>we'll see on Tuesday with the CPR report. Markets. Do

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<v Speaker 1>you think that risk has gone too far in some

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<v Speaker 1>senses and what we may well be witnessing is a

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<v Speaker 1>bit of a pullback taking place? Now? Yeah, absolutely agree

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<v Speaker 1>with that. I mean that what we saw that, I mean,

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<v Speaker 1>it's not unusual to see kind of the losers become

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<v Speaker 1>the winners in the first month of the year, but

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<v Speaker 1>the extreme to which we saw this UH in the

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<v Speaker 1>in January was really the most extreme that we've seen

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<v Speaker 1>since I think of the early nineties UH in terms

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<v Speaker 1>of this reversion trade. So I do think there's some

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<v Speaker 1>some money to come out of that and and have

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<v Speaker 1>that settle back out a little bit as we moved

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<v Speaker 1>through the rest of this month and get through earning season,

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<v Speaker 1>which has also been a little bit unusual given some

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<v Speaker 1>of the stock reactions both up and down UH and

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<v Speaker 1>the extent to which those have happened. UM, I think,

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<v Speaker 1>you know, we'll continue to see some We haven't seen

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<v Speaker 1>a huge uptick in inflation. We've just seen you know,

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<v Speaker 1>the jobs were strong, and then the Fed policymakers have

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<v Speaker 1>been out there just hammering the point. Let me have

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<v Speaker 1>some fun with you, Walter, and you can kind of

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<v Speaker 1>you can put me down a little bit. The Fed

0:12:47.040 --> 0:12:49.920
<v Speaker 1>doesn't want you to buy bonds because well, that would

0:12:49.920 --> 0:12:53.120
<v Speaker 1>bring yields down and that makes their job harder. They

0:12:53.120 --> 0:12:55.719
<v Speaker 1>don't want you to buy stocks because you know, companies

0:12:55.840 --> 0:12:58.719
<v Speaker 1>might buy equipment and hire people, and you know that

0:12:58.760 --> 0:13:02.079
<v Speaker 1>would make the Feds tom harder. You could put your money,

0:13:02.200 --> 0:13:04.240
<v Speaker 1>I guess in the bank, but then the bank might

0:13:04.280 --> 0:13:07.280
<v Speaker 1>just lend it out, So that's no good. Um, where

0:13:07.320 --> 0:13:11.920
<v Speaker 1>where does the Fed want you to put your money? Hello, Mattress? Yeah,

0:13:11.960 --> 0:13:13.680
<v Speaker 1>I was gonna say, dig a hole in the backyard,

0:13:13.760 --> 0:13:15.400
<v Speaker 1>I guess, or yes, stick it under the bath? What

0:13:15.480 --> 0:13:19.640
<v Speaker 1>sense does that make? Who's gonna do that? Now? It's listen,

0:13:19.640 --> 0:13:21.800
<v Speaker 1>it's it's a tough it's a tough job that they

0:13:21.840 --> 0:13:24.320
<v Speaker 1>have right here. They're they're trying to kind of talk

0:13:24.320 --> 0:13:26.520
<v Speaker 1>out of both sides of their mouth, you know, get

0:13:26.760 --> 0:13:30.760
<v Speaker 1>growth down, obviously, get inflation under control. But we've what

0:13:30.840 --> 0:13:33.719
<v Speaker 1>we've seen really since that hot CPI reading going back

0:13:33.720 --> 0:13:37.079
<v Speaker 1>in October, if you remember, we've seen financial Condiesian conditions

0:13:37.320 --> 0:13:41.640
<v Speaker 1>ease quite a bit. And honestly, I mean Powell's commentary

0:13:41.720 --> 0:13:44.000
<v Speaker 1>coming out of the last meeting and when he spoke

0:13:44.400 --> 0:13:47.880
<v Speaker 1>last week at that Economic Club, he hasn't really pushed

0:13:47.880 --> 0:13:51.040
<v Speaker 1>back too much. He keeps talking about disinflation has started.

0:13:51.120 --> 0:13:53.280
<v Speaker 1>So I'm not sure what he wants us to do

0:13:53.360 --> 0:13:57.400
<v Speaker 1>at this point. Good point, Well, that's just it, isn't it. Okay,

0:13:57.400 --> 0:14:01.720
<v Speaker 1>So it's real conundrum out there. Uh and so what

0:14:01.840 --> 0:14:06.360
<v Speaker 1>actually do you do then? Todd? Yeah, So what you know,

0:14:06.400 --> 0:14:08.640
<v Speaker 1>what we've been doing this year so far is just

0:14:08.720 --> 0:14:11.000
<v Speaker 1>trying to be very disciplined with you know, kind of

0:14:11.000 --> 0:14:13.920
<v Speaker 1>our our model weights and positions. So you know, we've

0:14:14.000 --> 0:14:16.560
<v Speaker 1>we've taken advantage of some of these moves and and

0:14:16.600 --> 0:14:19.880
<v Speaker 1>trim positions back, move some of that into cash, move

0:14:19.960 --> 0:14:22.560
<v Speaker 1>some of it into some positions that are you know,

0:14:22.720 --> 0:14:26.360
<v Speaker 1>underperformed so far this year. We sold out of position

0:14:26.440 --> 0:14:30.640
<v Speaker 1>like Meta that jump on the earnings beat. We just

0:14:30.640 --> 0:14:33.880
<v Speaker 1>thought that was too extreme. Um, So we've just try

0:14:33.920 --> 0:14:35.400
<v Speaker 1>to be a little bit more nimble, a little bit

0:14:35.440 --> 0:14:38.360
<v Speaker 1>more active, and take advantage of some of this early

0:14:38.400 --> 0:14:42.360
<v Speaker 1>strength in the year. I said I would I was,

0:14:42.120 --> 0:14:44.760
<v Speaker 1>I was thinking about, you know, running a diet tribal

0:14:44.800 --> 0:14:46.040
<v Speaker 1>on that, and I said I would do it with

0:14:46.080 --> 0:14:49.600
<v Speaker 1>the sort of stentorian tones of of Doug Chrisner. But

0:14:49.640 --> 0:14:51.600
<v Speaker 1>instead I put my edge on it. So I have

0:14:51.640 --> 0:14:54.280
<v Speaker 1>to apologize for that. But it's nice to see you

0:14:54.320 --> 0:14:56.920
<v Speaker 1>partially agree. Let's wish to China. So we had new

0:14:57.000 --> 0:15:00.600
<v Speaker 1>China loans in January, setting a record almost have trillion.

0:15:00.680 --> 0:15:05.560
<v Speaker 1>You on you like China at this juncture, Well, I

0:15:05.600 --> 0:15:07.760
<v Speaker 1>think you know it's China had It's kind of like

0:15:07.920 --> 0:15:10.200
<v Speaker 1>these other kind of mean versions that we've seen coming

0:15:10.240 --> 0:15:12.880
<v Speaker 1>into the new year, huge run off of the lows

0:15:12.920 --> 0:15:15.200
<v Speaker 1>in the fall um so I think there's you know,

0:15:15.280 --> 0:15:18.600
<v Speaker 1>some room for giveback. I think international in general, with

0:15:18.720 --> 0:15:20.960
<v Speaker 1>the fall in the dollar, it looks more attractive. But

0:15:21.000 --> 0:15:22.600
<v Speaker 1>we've again we've kind of seen a little bit of

0:15:22.680 --> 0:15:25.080
<v Speaker 1>uptick in the dollar, a little bit of downtick and

0:15:25.160 --> 0:15:28.040
<v Speaker 1>international markets. So I think it's definitely makes sense to

0:15:28.080 --> 0:15:32.400
<v Speaker 1>have exposure to international markets, including emerging markets like China,

0:15:33.000 --> 0:15:34.920
<v Speaker 1>but I think, you know, they probably need to cool

0:15:34.960 --> 0:15:37.360
<v Speaker 1>off a little bit before they may be re accelerated

0:15:37.400 --> 0:15:42.240
<v Speaker 1>and the dollar kind of rolls over. This is Bloomberg

0:15:42.320 --> 0:15:44.840
<v Speaker 1>Daybreak Asia, your morning brief on the story is making

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