WEBVTT - Debt Impasse Continues, Nvidia Soars on Sales Forecast

0:00:03.200 --> 0:00:06.480
<v Speaker 1>This is Bloomberg Daybreak Asia for this Thursday, May twenty

0:00:06.519 --> 0:00:09.760
<v Speaker 1>fifth in Hong Kong, Wednesday May twenty fourth in New

0:00:09.840 --> 0:00:10.920
<v Speaker 1>York and coming up.

0:00:10.880 --> 0:00:14.840
<v Speaker 2>Today, US equities decline as negotiations over raising the debt

0:00:14.880 --> 0:00:16.680
<v Speaker 2>ceiling remain at an impasse.

0:00:16.920 --> 0:00:19.800
<v Speaker 1>Fed Minute show officials who are divided in May over

0:00:19.840 --> 0:00:22.920
<v Speaker 1>whether future rate hikes would be necessary.

0:00:22.400 --> 0:00:25.240
<v Speaker 2>And in Nvidia gives a bullish revenue forecast for the

0:00:25.239 --> 0:00:25.880
<v Speaker 2>current quarter.

0:00:26.120 --> 0:00:30.600
<v Speaker 3>Ron desantus officially in presidential race. Microsoft blames China for

0:00:30.720 --> 0:00:34.560
<v Speaker 3>state sponsored hacks to US systems. Debt ceiling sides again

0:00:34.640 --> 0:00:37.919
<v Speaker 3>say they're optimistic, and then again far apart. I'm at

0:00:37.960 --> 0:00:39.160
<v Speaker 3>Baxter with Global News.

0:00:44.120 --> 0:00:47.800
<v Speaker 4>That's all straight ahead on Bloomberg Daybreak Asia, the business

0:00:47.840 --> 0:00:50.279
<v Speaker 4>news you need to start your day in just one

0:00:50.400 --> 0:00:55.320
<v Speaker 4>fifteen minute podcast available on Apples, Spotify, the Bloomberg Business App,

0:00:55.360 --> 0:00:57.280
<v Speaker 4>and everywhere you get your podcasts.

0:01:00.480 --> 0:01:03.600
<v Speaker 1>Good morning, I'm Doug Chrisner and I'm Brian Curtiz. Here

0:01:03.640 --> 0:01:06.640
<v Speaker 1>are the stories we're following today. Nvidia is trading up

0:01:06.680 --> 0:01:09.720
<v Speaker 1>right now twenty six point six percent in late trading.

0:01:10.120 --> 0:01:13.720
<v Speaker 1>Nvidia is already by far the world's most valuable chip maker,

0:01:14.040 --> 0:01:17.120
<v Speaker 1>and it gave a bullish revenue forecast for the current quarter.

0:01:17.319 --> 0:01:19.840
<v Speaker 1>It said sales would be about eleven billion dollars that

0:01:20.000 --> 0:01:23.959
<v Speaker 1>shattered estimates of seven point one eight billion by analysts.

0:01:24.160 --> 0:01:27.360
<v Speaker 1>The outlook shows that Nvidia is benefiting from the booming

0:01:27.440 --> 0:01:31.959
<v Speaker 1>demand for artificial intelligence services. The company has positioned itself

0:01:32.040 --> 0:01:35.360
<v Speaker 1>as the top provider of components for AI software, and

0:01:35.400 --> 0:01:38.160
<v Speaker 1>that has helped in Vidia weather a broader slowdown in

0:01:38.200 --> 0:01:41.840
<v Speaker 1>technology spending. Let's get more here from Bloomberg's men, Deep Sing.

0:01:42.400 --> 0:01:45.400
<v Speaker 5>I think what this company has showed is data center

0:01:45.480 --> 0:01:49.440
<v Speaker 5>is now sixty percent off their revenue, clearly. I think

0:01:49.440 --> 0:01:53.280
<v Speaker 5>they've found new applications where their technology and the chips

0:01:53.280 --> 0:01:55.600
<v Speaker 5>can be used, and there is a software element, and

0:01:55.680 --> 0:01:58.320
<v Speaker 5>the auto side is also new, which could be huge.

0:01:58.400 --> 0:02:01.160
<v Speaker 1>So we gave you the forecare asked on revenue, and

0:02:01.240 --> 0:02:04.080
<v Speaker 1>Nvidia also reported revenue in the first quarter that beat

0:02:04.120 --> 0:02:08.680
<v Speaker 1>analyst estimates by the widest margin in five years. And again,

0:02:08.840 --> 0:02:11.680
<v Speaker 1>Nvidia shares up twenty six percent in late trading.

0:02:11.760 --> 0:02:14.160
<v Speaker 2>Well, the elephant in the room, so to speak, seems

0:02:14.160 --> 0:02:17.160
<v Speaker 2>to be the debt ceiling. Today, Treasury Secretary Yellen said

0:02:17.240 --> 0:02:20.720
<v Speaker 2>signs of market stress are now beginning to emerge as

0:02:20.760 --> 0:02:23.840
<v Speaker 2>the federal government moves closer to running out of cash,

0:02:24.000 --> 0:02:28.160
<v Speaker 2>and Yellen said, the Biden administration is focusing on completing

0:02:28.240 --> 0:02:29.760
<v Speaker 2>a debt limit deal.

0:02:30.320 --> 0:02:34.560
<v Speaker 6>We are committed to not having mispayments and raising the

0:02:34.600 --> 0:02:38.440
<v Speaker 6>debt ceiling, so that's not a situation we face. We're

0:02:38.480 --> 0:02:43.359
<v Speaker 6>not involved in planning for what happens if there's a default.

0:02:43.480 --> 0:02:46.440
<v Speaker 2>That is Treasury Secretary Yellen there, who went on to

0:02:46.560 --> 0:02:50.240
<v Speaker 2>emphasize the level of uncertainty about day to day government

0:02:50.280 --> 0:02:54.320
<v Speaker 2>payments and receipts. She repeated Treasury may run out of

0:02:54.400 --> 0:02:57.680
<v Speaker 2>cash to pay its bills as soon as June first.

0:02:58.320 --> 0:03:01.839
<v Speaker 2>Now today, commisto for a JP Morgan Chase said there's

0:03:01.919 --> 0:03:06.040
<v Speaker 2>roughly a one in four chance twenty five percent probability

0:03:06.080 --> 0:03:08.800
<v Speaker 2>that the US will hit this state without a deal

0:03:08.880 --> 0:03:11.600
<v Speaker 2>to raise the death limit, and the Bank said those

0:03:11.639 --> 0:03:13.799
<v Speaker 2>odds are rising right well.

0:03:13.840 --> 0:03:17.000
<v Speaker 1>The Fed May minutes showed that officials were split on

0:03:17.160 --> 0:03:21.919
<v Speaker 1>monetary policy going forward, not on the May move because

0:03:21.960 --> 0:03:25.760
<v Speaker 1>that was unanimous, but looking ahead to June, some officials

0:03:25.760 --> 0:03:30.600
<v Speaker 1>saw additional tightening as warranted to lower inflation. Several figured

0:03:30.639 --> 0:03:32.880
<v Speaker 1>it may be time to stop hiking so as you

0:03:32.960 --> 0:03:36.360
<v Speaker 1>might imagine, one of the first questions to our guest

0:03:36.400 --> 0:03:39.480
<v Speaker 1>will be, what's more some or several. We'll get some

0:03:39.600 --> 0:03:42.680
<v Speaker 1>views on that anyway. Many were focused on the need

0:03:42.760 --> 0:03:48.920
<v Speaker 1>to retain optionality. Many participants emphasized communicating a data dependent approach.

0:03:49.520 --> 0:03:52.000
<v Speaker 1>Earlier in the day, FED Governor Chris Waller said it's

0:03:52.040 --> 0:03:55.000
<v Speaker 1>premature to declare that the tightening cycle is over.

0:03:55.480 --> 0:03:58.160
<v Speaker 7>I do not support stopping rate hikes unless we get

0:03:58.200 --> 0:04:01.440
<v Speaker 7>clear evidence that inflation is moving down towards our two

0:04:01.440 --> 0:04:05.000
<v Speaker 7>percent objective. Well, whether we should hike or skip at

0:04:05.000 --> 0:04:07.320
<v Speaker 7>the JEW meeting will depend on how the data come

0:04:07.360 --> 0:04:08.760
<v Speaker 7>in over the next three weeks.

0:04:09.000 --> 0:04:12.840
<v Speaker 1>Investors currently see the odds of a July rate cut

0:04:13.640 --> 0:04:18.960
<v Speaker 1>in above seventy percent, according to pricing and futures contracts

0:04:19.200 --> 0:04:22.560
<v Speaker 1>that officials have raised rates by five full percentage points

0:04:22.680 --> 0:04:25.839
<v Speaker 1>five hundred basis points over the past fourteen months.

0:04:25.960 --> 0:04:30.400
<v Speaker 2>Federal prosecutors are reviewing stock trades buy some employees at

0:04:30.480 --> 0:04:34.400
<v Speaker 2>First Republic Bank during the lenders collapse that story from

0:04:34.400 --> 0:04:35.560
<v Speaker 2>Bloomberg's and Kates.

0:04:35.600 --> 0:04:38.040
<v Speaker 8>The Justice Department is looking at whether anyone working at

0:04:38.040 --> 0:04:40.800
<v Speaker 8>First Republic used inside information as it was crumbling in

0:04:40.880 --> 0:04:43.839
<v Speaker 8>the second biggest bank failure in American history. The probe

0:04:43.839 --> 0:04:47.480
<v Speaker 8>is also scrutinizing the lenders' financial disclosures. Plus the Securities

0:04:47.480 --> 0:04:50.800
<v Speaker 8>and Exchange Commission is investigating whether any First Republic senior

0:04:50.839 --> 0:04:55.080
<v Speaker 8>executives traded using insider information. The inquiry significantly adds to

0:04:55.080 --> 0:04:58.240
<v Speaker 8>the legal scrutiny surrounding the demise of First Republic in

0:04:58.440 --> 0:05:01.360
<v Speaker 8>Washington and Kates bloomberg Our Day Break Asia.

0:05:01.040 --> 0:05:03.240
<v Speaker 1>Well, the Bank of Korea is likely to hold its

0:05:03.279 --> 0:05:07.240
<v Speaker 1>policy rate steady today for a third straight meeting. Bloomberg's

0:05:07.279 --> 0:05:09.400
<v Speaker 1>David and Glace as the story from Hong Kong.

0:05:09.600 --> 0:05:12.839
<v Speaker 9>All economists surveyed think the central bank will keep its

0:05:12.880 --> 0:05:16.040
<v Speaker 9>main rate at three and a half percent. Officials are

0:05:16.080 --> 0:05:19.320
<v Speaker 9>thought to be concerned about growth. The BOKA will update

0:05:19.360 --> 0:05:23.040
<v Speaker 9>its forecast for key economic indicators, including growth and inflation,

0:05:23.160 --> 0:05:26.760
<v Speaker 9>at today's meeting. Policymakers already said in recent weeks that

0:05:26.839 --> 0:05:30.520
<v Speaker 9>economic growth this year may be slower than expected. That's

0:05:30.560 --> 0:05:34.240
<v Speaker 9>as Korean exports weekend on slowing global demand. On inflation

0:05:34.600 --> 0:05:37.720
<v Speaker 9>gains and consumer prices have eased over the past three months,

0:05:37.800 --> 0:05:40.000
<v Speaker 9>but core inflation remains a concern.

0:05:40.240 --> 0:05:40.960
<v Speaker 2>In Hong Kong.

0:05:41.080 --> 0:05:43.240
<v Speaker 9>I'm David Ingless Bloomberg day Break Asia.

0:05:43.440 --> 0:05:46.040
<v Speaker 1>I'm Brian Curtis along with Rashad Salomat. He will join

0:05:46.160 --> 0:05:49.480
<v Speaker 1>us in a few moments. Doug Krisner is with me now,

0:05:49.880 --> 0:05:52.520
<v Speaker 1>So Doug, really, Nvidia' is a story of the morning.

0:05:52.560 --> 0:05:55.479
<v Speaker 1>I think it seems to even eclipse what's going on

0:05:55.560 --> 0:05:57.799
<v Speaker 1>with the debt ceiling, at least in the market action

0:05:59.000 --> 0:06:02.200
<v Speaker 1>post close rallying as much as it is the forward

0:06:02.279 --> 0:06:06.520
<v Speaker 1>pe is sixty one that might have some investors chafing,

0:06:07.040 --> 0:06:09.680
<v Speaker 1>but the average price target is only three hundred and

0:06:09.720 --> 0:06:12.360
<v Speaker 1>five on the street and as mentioned, with this rally

0:06:12.360 --> 0:06:15.520
<v Speaker 1>in after hours, stock would be up around three hundred

0:06:15.520 --> 0:06:16.440
<v Speaker 1>and ninety bucks.

0:06:16.680 --> 0:06:19.920
<v Speaker 2>Yeah, you know, the CEO, Jensen Huang was saying that

0:06:20.320 --> 0:06:23.800
<v Speaker 2>the installed global data center infrastructure is going to go

0:06:24.320 --> 0:06:28.160
<v Speaker 2>through a period of transission, a move away from general

0:06:28.200 --> 0:06:31.839
<v Speaker 2>purpose computing I think, to some type of accelerated computing

0:06:31.880 --> 0:06:35.600
<v Speaker 2>that is basically connected to artificial intelligence. And I was

0:06:35.640 --> 0:06:39.120
<v Speaker 2>talking to Paul Sweeney about this and his view is

0:06:39.560 --> 0:06:41.159
<v Speaker 2>right now, with a lot of the hype that we've

0:06:41.160 --> 0:06:44.279
<v Speaker 2>been hearing around AI, this may be a part of

0:06:44.279 --> 0:06:47.680
<v Speaker 2>that story as well, that maybe we are nearing some

0:06:47.760 --> 0:06:50.960
<v Speaker 2>sort of peak in a lot of the enthusiasm as

0:06:50.960 --> 0:06:52.680
<v Speaker 2>it relates to artificial intelligence.

0:06:52.680 --> 0:06:53.320
<v Speaker 4>Who knows.

0:06:53.640 --> 0:06:56.000
<v Speaker 1>Yeah, you would think that, but then you see earnings

0:06:56.120 --> 0:06:58.479
<v Speaker 1>like this and you almost wonder whether or not that

0:06:58.600 --> 0:07:03.920
<v Speaker 1>really jacks up a new round of positivity. China's going

0:07:03.960 --> 0:07:05.839
<v Speaker 1>the other direction. I know you were talking about that

0:07:05.880 --> 0:07:09.279
<v Speaker 1>a few moments ago. Seems like investors are losing faith

0:07:09.360 --> 0:07:13.720
<v Speaker 1>in the recovery in China, and it's reflected in four

0:07:13.760 --> 0:07:16.360
<v Speaker 1>to five different ways. If you look at the MMB

0:07:16.520 --> 0:07:19.280
<v Speaker 1>well pass seven now on the weak side, the CSI

0:07:19.360 --> 0:07:21.600
<v Speaker 1>three hundred giving up all of its gains this year

0:07:21.680 --> 0:07:25.080
<v Speaker 1>now negative on the year. Debt is weighing on the economy,

0:07:25.080 --> 0:07:28.560
<v Speaker 1>and growth is under pressure, and geopolitics is kind of

0:07:28.560 --> 0:07:30.840
<v Speaker 1>the icing on the cake. So that's five right there,

0:07:30.880 --> 0:07:31.760
<v Speaker 1>and there are others.

0:07:31.920 --> 0:07:35.120
<v Speaker 2>Yeah, I want to add the regulatory framework which has

0:07:35.160 --> 0:07:37.320
<v Speaker 2>been tweaked a little bit, and just maybe a lack

0:07:37.320 --> 0:07:40.560
<v Speaker 2>of conference in the government's ability to guide growth.

0:07:40.760 --> 0:07:43.720
<v Speaker 1>Yeah, you wonder why they are being so cautious. But

0:07:43.880 --> 0:07:46.160
<v Speaker 1>time and again we come back to the point. They

0:07:46.160 --> 0:07:49.560
<v Speaker 1>don't want to repeat what Japan did back in the eighties,

0:07:49.920 --> 0:07:54.720
<v Speaker 1>and they are extremely nervous about getting investors too excited

0:07:54.920 --> 0:07:58.640
<v Speaker 1>and having too much liquidity and too much easing, and

0:07:58.680 --> 0:08:03.120
<v Speaker 1>so they play it very much cautiously. It's an interesting path,

0:08:03.680 --> 0:08:05.920
<v Speaker 1>and of course we'll be reporting on it here this morning,

0:08:05.960 --> 0:08:08.280
<v Speaker 1>all throughout the morning. All right, it's time now for

0:08:08.320 --> 0:08:12.880
<v Speaker 1>Global News. Let's get to the nine to sixty newsroom

0:08:12.960 --> 0:08:16.120
<v Speaker 1>in San Francisco. Ron Decentis is officially in the race

0:08:16.280 --> 0:08:19.520
<v Speaker 1>for the presidency at Baxter has Global News ed.

0:08:19.760 --> 0:08:23.800
<v Speaker 3>Yeah, exactly right, Brian. He has filed papers with federal regulators,

0:08:23.880 --> 0:08:27.320
<v Speaker 3>running a Twitter space session with Elon Musk. Also has

0:08:27.440 --> 0:08:30.880
<v Speaker 3>released a video that we will have for you shortly.

0:08:31.000 --> 0:08:34.559
<v Speaker 3>Signals are that he plans to run a non traditional campaign,

0:08:34.640 --> 0:08:37.920
<v Speaker 3>built for social media error and centered around the culture

0:08:37.960 --> 0:08:42.560
<v Speaker 3>war debates. Bloomberg contributor Lisa Camuso Miller says, the process

0:08:42.559 --> 0:08:44.920
<v Speaker 3>here is unusual.

0:08:45.640 --> 0:08:47.800
<v Speaker 8>All of the elements of this don't make any sense

0:08:47.840 --> 0:08:50.200
<v Speaker 8>to me. But maybe this is by design.

0:08:50.240 --> 0:08:51.200
<v Speaker 7>Maybe this is a way.

0:08:51.080 --> 0:08:52.480
<v Speaker 8>To get Donald Trump back to Twitter.

0:08:52.480 --> 0:08:53.719
<v Speaker 10>If you're Elon Musk.

0:08:53.600 --> 0:08:57.280
<v Speaker 3>Yeah, he becomes Donald Trump's strongest contender yet, but his

0:08:57.360 --> 0:08:59.880
<v Speaker 3>polling numbers are not close at this point. The santas

0:09:00.040 --> 0:09:05.400
<v Speaker 3>As will model himself as drama free, although Disney execs

0:09:05.400 --> 0:09:08.800
<v Speaker 3>may disagree. Death ceiling talks have wrapped up for the day.

0:09:08.920 --> 0:09:11.400
<v Speaker 3>It looks as if legislators have been allowed to go

0:09:11.480 --> 0:09:14.560
<v Speaker 3>home for the long weekend. Speaker McCarthy's saying that he

0:09:14.720 --> 0:09:16.839
<v Speaker 3>sees time to get something done, but.

0:09:17.040 --> 0:09:19.520
<v Speaker 5>To try to finish up the negotiations with the White House.

0:09:19.520 --> 0:09:22.120
<v Speaker 9>There's a number of places that we are still far apart.

0:09:22.280 --> 0:09:25.440
<v Speaker 3>Yeah, maybe the spending cap language has changed a bit, though. Listen,

0:09:25.800 --> 0:09:27.640
<v Speaker 3>I've been very clear I will not put a bill

0:09:27.720 --> 0:09:28.240
<v Speaker 3>on the floor.

0:09:28.559 --> 0:09:30.560
<v Speaker 5>This spends more money next year than this year.

0:09:31.200 --> 0:09:36.320
<v Speaker 3>Then this year, all right, so that's maybe last year cap,

0:09:36.480 --> 0:09:37.840
<v Speaker 3>maybe this year CAP.

0:09:38.240 --> 0:09:38.360
<v Speaker 4>Now.

0:09:38.480 --> 0:09:41.839
<v Speaker 3>House Minority Leader Hakim Jeffreys' version is a bit more harsh,

0:09:41.880 --> 0:09:45.160
<v Speaker 3>saying the GOP is doing one of two things.

0:09:45.280 --> 0:09:53.120
<v Speaker 11>To either extract deep, painful cuts that will hurt the health,

0:09:53.160 --> 0:09:57.040
<v Speaker 11>the safety, or the well being of everyday Americans, or

0:09:57.080 --> 0:10:02.360
<v Speaker 11>crash the economy the fault on our dead and trigger

0:10:03.720 --> 0:10:04.800
<v Speaker 11>a painful recession.

0:10:05.120 --> 0:10:08.880
<v Speaker 3>So digging in a bit, what's really going on, Bloomberg's Kaylee.

0:10:08.559 --> 0:10:11.360
<v Speaker 12>Lines, it's not the fine tuning that is being hammered

0:10:11.400 --> 0:10:14.200
<v Speaker 12>out in public. It is happening behind closed doors, so

0:10:14.200 --> 0:10:16.120
<v Speaker 12>we don't really have a sense of the finer points

0:10:16.120 --> 0:10:18.200
<v Speaker 12>of what the deal they're working on is. But they

0:10:18.240 --> 0:10:20.280
<v Speaker 12>have to have that architecture in place, right If it's

0:10:20.320 --> 0:10:22.960
<v Speaker 12>going to ultimately be turned into legislative text and be

0:10:23.080 --> 0:10:25.360
<v Speaker 12>something that the House and Senate can vote on, it's

0:10:25.400 --> 0:10:28.240
<v Speaker 12>going to have to get specifically maybe just start laying

0:10:28.240 --> 0:10:30.560
<v Speaker 12>out all their cards in public here.

0:10:31.120 --> 0:10:34.160
<v Speaker 3>Yeah, so behind the scenes negotiations, a schedule to happen

0:10:34.200 --> 0:10:37.520
<v Speaker 3>could be sent to the districts in the next few days,

0:10:37.520 --> 0:10:40.640
<v Speaker 3>it come back the beginning of the week and vote. Meanwhile,

0:10:40.720 --> 0:10:45.760
<v Speaker 3>the dance continues or doesn't. Microsoft says it's found malicious

0:10:45.800 --> 0:10:48.719
<v Speaker 3>activity by a Chinese state sponsored hacking group that has

0:10:49.040 --> 0:10:53.200
<v Speaker 3>stealthily gained access in a critical infrastructure organizations in Guam

0:10:53.240 --> 0:10:55.959
<v Speaker 3>and elsewhere in the US. Says the likely aim was

0:10:56.040 --> 0:11:00.720
<v Speaker 3>disrupt critical communications in event of a crisis. Microsoft says

0:11:00.720 --> 0:11:04.360
<v Speaker 3>a group named a Bold Typhoon has been active since

0:11:04.520 --> 0:11:11.160
<v Speaker 3>mid twenty twenty one, targeting organizations that span manufacturing, construction, maritime, government,

0:11:11.160 --> 0:11:16.360
<v Speaker 3>information technology education. Microsoft says it is directly notified targeted

0:11:16.400 --> 0:11:21.440
<v Speaker 3>or compromised customers with moderate moderate confidence. Threats are mitigated.

0:11:21.679 --> 0:11:24.280
<v Speaker 3>Global News powered by more than twenty seven hundred journalists

0:11:24.280 --> 0:11:26.640
<v Speaker 3>and analysts in over one hundred and twenty countries. In

0:11:26.679 --> 0:11:30.079
<v Speaker 3>San Francisco, I'm Ad Baxter, and this is Bloomberg.

0:11:30.720 --> 0:11:33.600
<v Speaker 1>I'm Brian Curtis in Hong Kong, along with Rashad Salamat.

0:11:33.640 --> 0:11:38.479
<v Speaker 1>Our guest is Andy kapraan partner and Cocio Regent Atlantic

0:11:38.559 --> 0:11:41.439
<v Speaker 1>Private Wealth. So, Andy, I know we want to talk

0:11:41.480 --> 0:11:44.120
<v Speaker 1>about the debt sealing debate and also about the FED,

0:11:44.160 --> 0:11:46.040
<v Speaker 1>but I got to ask you about Nvidia. Right now,

0:11:46.120 --> 0:11:49.200
<v Speaker 1>Nasdaq futures are up some two hundred and fourteen points,

0:11:49.200 --> 0:11:51.680
<v Speaker 1>a gain of one point six percent, no doubt heavily

0:11:51.760 --> 0:11:55.440
<v Speaker 1>influenced there by the big gain after hours in Nvidia.

0:11:56.480 --> 0:11:59.360
<v Speaker 1>Nvidia is really a beast of its own. I'm not

0:11:59.400 --> 0:12:01.920
<v Speaker 1>sure that there's there's a lot of read through for

0:12:02.080 --> 0:12:05.520
<v Speaker 1>everybody out there, but do you think that that stands

0:12:05.520 --> 0:12:08.640
<v Speaker 1>a chance of kind of reducing up some of the

0:12:08.679 --> 0:12:12.000
<v Speaker 1>megacaps which actually hadn't done all that well in the

0:12:12.000 --> 0:12:13.120
<v Speaker 1>past three weeks or so.

0:12:14.120 --> 0:12:16.440
<v Speaker 10>I think I think this is really a very company

0:12:16.480 --> 0:12:20.840
<v Speaker 10>specific story about a company that has a lead in

0:12:21.240 --> 0:12:25.120
<v Speaker 10>a very important new technology lead that's very hard to catch.

0:12:25.200 --> 0:12:27.240
<v Speaker 10>Up with and I think if you're looking at the

0:12:27.280 --> 0:12:31.280
<v Speaker 10>market action uh this uh this evening, what you're seeing

0:12:31.440 --> 0:12:35.440
<v Speaker 10>is benefits for for tech broadly, for certain semiconductors in particular.

0:12:35.640 --> 0:12:38.000
<v Speaker 10>But it's really but it really is about companies with

0:12:38.240 --> 0:12:42.360
<v Speaker 10>some kind of a leading edge, whether it's whether it's

0:12:42.400 --> 0:12:44.960
<v Speaker 10>in the design of these chips or in the manufacturing

0:12:45.000 --> 0:12:45.280
<v Speaker 10>of them.

0:12:45.920 --> 0:12:48.360
<v Speaker 13>Well, absolutely, And you know it's always trying to get good,

0:12:48.360 --> 0:12:50.560
<v Speaker 13>to try and get the sect lead, isn't that you know?

0:12:50.720 --> 0:12:51.439
<v Speaker 4>Is that what you do?

0:12:51.520 --> 0:12:54.640
<v Speaker 13>Is that what you look at andy when you already

0:12:54.640 --> 0:12:57.439
<v Speaker 13>perhaps advising clients, so creating a poolfolio.

0:12:58.679 --> 0:13:01.480
<v Speaker 10>Sure, so when when I when I look at companies

0:13:01.520 --> 0:13:05.400
<v Speaker 10>with the leading edge, there's a given a take on

0:13:06.280 --> 0:13:09.000
<v Speaker 10>the leading edge of a really important change like AI

0:13:09.920 --> 0:13:14.520
<v Speaker 10>or chips for mining bitcoin and cryptocurrencies. You tend to

0:13:14.520 --> 0:13:16.920
<v Speaker 10>have an early leader. You tend to have to pay

0:13:16.960 --> 0:13:20.520
<v Speaker 10>a lot for that early leader, and it's very hard

0:13:20.520 --> 0:13:23.040
<v Speaker 10>to maintain that edge because you suddenly have a target

0:13:23.080 --> 0:13:26.440
<v Speaker 10>on your back. I think with the semiconductions in particular,

0:13:27.480 --> 0:13:31.600
<v Speaker 10>the lead times in developing new manufacturing techniques are so long.

0:13:31.840 --> 0:13:33.960
<v Speaker 10>It really creates a lot of cushion for those early

0:13:34.040 --> 0:13:35.760
<v Speaker 10>leaders and I think that's what we're seeing today with

0:13:36.040 --> 0:13:37.000
<v Speaker 10>stocks like Nvidia.

0:13:37.559 --> 0:13:39.439
<v Speaker 1>Yeah, to broaden it out though, I mean, it's one

0:13:39.480 --> 0:13:44.800
<v Speaker 1>thing for Microsoft and Alphabet and Nvidia clearly as providers

0:13:44.960 --> 0:13:49.280
<v Speaker 1>of artificial intelligence to the marketplace, But what about the recipients.

0:13:49.320 --> 0:13:52.080
<v Speaker 1>I mean, the way to get a read through right

0:13:52.080 --> 0:13:55.760
<v Speaker 1>across the markets is whether or not almost everybody benefits

0:13:55.800 --> 0:13:58.040
<v Speaker 1>from this, and if so, how do you put that

0:13:58.120 --> 0:13:59.160
<v Speaker 1>into the equation.

0:14:00.480 --> 0:14:03.560
<v Speaker 10>That's that's actually a really interesting point. I think one

0:14:03.600 --> 0:14:05.079
<v Speaker 10>of the ways that we're going to have to see

0:14:05.120 --> 0:14:08.280
<v Speaker 10>how AI really changes the world is how does it

0:14:08.320 --> 0:14:11.520
<v Speaker 10>become a productivity enhancing tool as opposed to just a

0:14:11.520 --> 0:14:16.160
<v Speaker 10>cool toy to write a customized novella of your very own.

0:14:17.640 --> 0:14:20.120
<v Speaker 13>All right, and we told Nvidia, let's talk a little

0:14:20.160 --> 0:14:23.320
<v Speaker 13>bit about overall and what's going on market wise and

0:14:23.560 --> 0:14:26.120
<v Speaker 13>what the biggest question apart from, of course, the FED

0:14:26.920 --> 0:14:28.600
<v Speaker 13>is from the clients that you have.

0:14:29.080 --> 0:14:31.360
<v Speaker 10>Sure so, by far away, the most common question I

0:14:31.360 --> 0:14:33.800
<v Speaker 10>am getting is what is going on with the debt

0:14:33.840 --> 0:14:37.280
<v Speaker 10>ceiling and how can we protect ourselves against it. I

0:14:37.320 --> 0:14:39.600
<v Speaker 10>think the challenge with the debt ceiling, and I think

0:14:39.600 --> 0:14:43.400
<v Speaker 10>in this round of the debt ceiling in particular is

0:14:43.520 --> 0:14:45.960
<v Speaker 10>we're having a moment in time when it's almost like

0:14:46.160 --> 0:14:49.080
<v Speaker 10>the Boy the Cried Wolf. We've seen this movie too

0:14:49.120 --> 0:14:52.760
<v Speaker 10>many times before. The market has been reluctant to respond

0:14:52.760 --> 0:14:55.840
<v Speaker 10>to it until just the past few days. And I

0:14:55.840 --> 0:14:58.280
<v Speaker 10>think the reason why we're starting to see our response

0:14:58.680 --> 0:15:02.040
<v Speaker 10>is we're cutting it to If you look at Janet

0:15:02.120 --> 0:15:05.520
<v Speaker 10>Yellen's announcements about the Treasury running out of funds as

0:15:05.520 --> 0:15:08.400
<v Speaker 10>soon as Junior first, which is barely a week away,

0:15:09.480 --> 0:15:12.000
<v Speaker 10>is really sharp point that, no, we don't have a

0:15:12.000 --> 0:15:14.040
<v Speaker 10>lot of time to get a deal done. We do

0:15:14.120 --> 0:15:16.760
<v Speaker 10>have to get one done. And now investors are starting

0:15:16.760 --> 0:15:20.480
<v Speaker 10>to consider what does this actually mean? Will the will

0:15:20.480 --> 0:15:23.000
<v Speaker 10>the Treasury default on a bond payment, will they announce

0:15:23.080 --> 0:15:27.200
<v Speaker 10>ind social Security checks? It's starting to boggles people's minds,

0:15:27.280 --> 0:15:29.160
<v Speaker 10>and it is the fear of the uncertain that that

0:15:29.200 --> 0:15:31.600
<v Speaker 10>really prompts a lot of investor behavior. I think, I

0:15:31.600 --> 0:15:34.080
<v Speaker 10>think this is only the beginning of a lot of

0:15:34.160 --> 0:15:36.840
<v Speaker 10>volatility unless we get a deal very quickly.

0:15:37.200 --> 0:15:40.320
<v Speaker 1>You wonder about those people buying the one month you know,

0:15:40.640 --> 0:15:44.440
<v Speaker 1>I'm proud to be getting seven percent seven percent. You know,

0:15:44.480 --> 0:15:47.200
<v Speaker 1>if you don't get that as annuallyzed you have thirty

0:15:47.320 --> 0:15:49.560
<v Speaker 1>days and to take on all that risk, I mean,

0:15:49.920 --> 0:15:51.360
<v Speaker 1>all heck could break loose.

0:15:51.440 --> 0:15:53.360
<v Speaker 4>If you know, if they.

0:15:53.280 --> 0:15:56.560
<v Speaker 1>Default, you wouldn't be buying a one month t bill,

0:15:56.600 --> 0:15:56.920
<v Speaker 1>would you?

0:15:57.280 --> 0:15:59.640
<v Speaker 10>So I say, you know, the one month's TBO presents

0:15:59.640 --> 0:16:01.920
<v Speaker 10>a really interesting story. On the one hand, are really

0:16:01.960 --> 0:16:04.880
<v Speaker 10>high annualized yield. On the other hand, you're really you're

0:16:04.920 --> 0:16:10.080
<v Speaker 10>really diving for a very apparent risk. I think, how

0:16:10.160 --> 0:16:10.840
<v Speaker 10>risky is it?

0:16:10.880 --> 0:16:11.240
<v Speaker 2>Truly?

0:16:11.800 --> 0:16:13.720
<v Speaker 10>When I think about the investments that are likely to

0:16:13.720 --> 0:16:17.680
<v Speaker 10>perform the best in a debt ceiling scenario where there

0:16:17.720 --> 0:16:21.480
<v Speaker 10>is a formal cap that, in my opinion, will be

0:16:21.480 --> 0:16:26.200
<v Speaker 10>a profoundly deflationary move. We're talking about the federal government

0:16:26.240 --> 0:16:29.160
<v Speaker 10>withdrawing a very substantial amount of funds from the economy,

0:16:29.200 --> 0:16:32.120
<v Speaker 10>either payments that aren't getting made to contractors, payments that

0:16:32.160 --> 0:16:35.920
<v Speaker 10>aren't getting made to welfare recipients or Social Security recimbients,

0:16:35.960 --> 0:16:38.320
<v Speaker 10>or payments that aren't getting made to bond funds. A

0:16:38.360 --> 0:16:43.320
<v Speaker 10>profoundly deflationary move that should create a deflation or response

0:16:43.320 --> 0:16:45.920
<v Speaker 10>in the market, which should which is ultimately really positive

0:16:45.920 --> 0:16:50.360
<v Speaker 10>for bonds. I think that's also really unlikely. So investors

0:16:50.400 --> 0:16:54.240
<v Speaker 10>that are buying that very short term tabill I don't

0:16:54.280 --> 0:16:56.560
<v Speaker 10>think they're taking as much risk as it perhaps sounds,

0:16:56.680 --> 0:16:59.560
<v Speaker 10>and that's why it's only a very high sounding yield

0:16:59.600 --> 0:17:03.280
<v Speaker 10>when you anualize it, it's it's only a few basis points.

0:17:03.280 --> 0:17:06.080
<v Speaker 13>If you don't, yeah, it's actually fifty eight basis points.

0:17:06.320 --> 0:17:10.399
<v Speaker 13>Actually a month, that seven percent if you're divided by twelve.

0:17:10.480 --> 0:17:13.920
<v Speaker 13>Of course, now looking at this, and does that also

0:17:14.000 --> 0:17:16.760
<v Speaker 13>mean you become defensive elsewhere? Do you have the most

0:17:17.359 --> 0:17:20.800
<v Speaker 13>doubt portfolio possibly going as a consequence of the outside noise?

0:17:21.200 --> 0:17:21.480
<v Speaker 5>Sure?

0:17:21.560 --> 0:17:26.480
<v Speaker 10>So, you know in this environment where you almost expect that,

0:17:26.600 --> 0:17:28.800
<v Speaker 10>then in the next few bix there is likely to

0:17:28.800 --> 0:17:32.320
<v Speaker 10>be an uncommonly high level of volatility. You hunker down

0:17:32.359 --> 0:17:35.080
<v Speaker 10>and you get close to your benchmark. I think the

0:17:35.800 --> 0:17:38.719
<v Speaker 10>what investors are likely to do over the course the

0:17:38.760 --> 0:17:41.359
<v Speaker 10>next few days, especially as the deal gets drawn out,

0:17:41.440 --> 0:17:44.320
<v Speaker 10>especially if it seems less likely that a deal arrives

0:17:44.359 --> 0:17:47.960
<v Speaker 10>in time, people will go back to safety, and people

0:17:48.000 --> 0:17:49.959
<v Speaker 10>are likely to go back to benchmark. In my opinion,

0:17:51.080 --> 0:17:56.720
<v Speaker 10>where that's likely to manifest itself is particularly in people

0:17:56.760 --> 0:17:59.320
<v Speaker 10>going back to the US dollar. I think there's been

0:17:59.320 --> 0:18:01.840
<v Speaker 10>an uncommon out of farishness for US dollars, some of

0:18:01.880 --> 0:18:02.800
<v Speaker 10>it rightfully.

0:18:02.840 --> 0:18:05.760
<v Speaker 1>So I just briefly, you've probably heard us talking about China,

0:18:05.960 --> 0:18:08.520
<v Speaker 1>just some general thoughts, really quickly in thirty seconds.

0:18:08.880 --> 0:18:11.879
<v Speaker 10>Sure, China is a very important economy and a very

0:18:11.880 --> 0:18:15.040
<v Speaker 10>important market. I think investors should be leery of avoiding it,

0:18:15.240 --> 0:18:19.200
<v Speaker 10>particularly after a really balat ale a handful of years.

0:18:19.880 --> 0:18:22.480
<v Speaker 10>As it recovers, as it comes back from COVID, it's

0:18:22.520 --> 0:18:24.760
<v Speaker 10>likely to be an attractive market. I think the challenge

0:18:24.840 --> 0:18:30.199
<v Speaker 10>is geopolitics, and the further we get away from some

0:18:30.240 --> 0:18:32.439
<v Speaker 10>of the crises in the US, particularly on the debt ceiling,

0:18:33.359 --> 0:18:35.639
<v Speaker 10>the closer we can get to more certainty about our

0:18:35.680 --> 0:18:36.680
<v Speaker 10>relationship with China.

0:18:36.840 --> 0:18:39.679
<v Speaker 1>Andy, thank you so much for joining us here this morning. Appreciated.

0:18:39.720 --> 0:18:45.320
<v Speaker 1>Andy caperan partner in Cocio Region Atlantic Private Wealth. This

0:18:45.640 --> 0:18:48.439
<v Speaker 1>is Bloomberg Daybreak Asia, your morning brief on the stories

0:18:48.520 --> 0:18:51.680
<v Speaker 1>making news from Hong Kong to Singapore and Wall Street.

0:18:51.720 --> 0:18:55.720
<v Speaker 2>Look for us on your podcast feed every day on Apple, Spotify,

0:18:55.960 --> 0:18:57.920
<v Speaker 2>and anywhere else you get your podcasts.

0:18:57.960 --> 0:19:00.760
<v Speaker 1>You can also listen live each day Onloomberg eleventh three

0:19:00.760 --> 0:19:03.160
<v Speaker 1>to zero in New York, Bloomberg ninety nine to one

0:19:03.200 --> 0:19:06.560
<v Speaker 1>in Washington. Bloomberg one oh sixty one in Boston and

0:19:06.600 --> 0:19:08.960
<v Speaker 1>Bloomberg nine sixty in San Francisco.

0:19:09.040 --> 0:19:11.920
<v Speaker 2>Our flagship New York station is also available on your

0:19:11.960 --> 0:19:17.119
<v Speaker 2>Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty plus.

0:19:17.320 --> 0:19:20.720
<v Speaker 1>Listen coast to coast on the Bloomberg Business app, Sirius

0:19:20.880 --> 0:19:25.080
<v Speaker 1>XM Channel one nineteen, the iHeartRadio app, and on Bloomberg

0:19:25.160 --> 0:19:27.560
<v Speaker 1>dot Com. I'm Brian Curtis.

0:19:27.560 --> 0:19:30.000
<v Speaker 2>And I'm Doug Chrisner. Join us again tomorrow for all

0:19:30.040 --> 0:19:32.520
<v Speaker 2>the news you need to start your day right here

0:19:32.600 --> 0:19:36.040
<v Speaker 2>on Bloomberg day Break Asia