HAIDI: WELCOME TO “DAYBREAK:AUSTRALIA.” THE MARKETS HAVE JUST COMEONLINE. PAUL: WE'RE COUNTING DOWN TO MEASURE– ASIA'S MAJOR TRADING. STOCKS AND BONDS FACINGPRESSURE AFTER ANOTHER WEW= — WEAK SALE.THE FED IS NO RUSH TO CUTE RATES. HAIDI:SALESFORCE SLOWING. AI GOING THE OTHER DIRECTIONAND A SIGN TOWARDS A SHIFT TOWARDS SOFTWARE TECHNOLOGIES.PAUL: BHP WALKING AWAY FROM ITS BIDFOR ANGLO AMERICAN LEAVING THE.
CEO TO LOOK ELSEWHERE FORGROWTH IN COPPER. WE ARE GOING TO BE TAKING ACLOSE LOOK AT BHP SHARES WHEN WE GET TRADING UNDERWAY HERE INSYDNEY AND ONE HOUR. AT UP THAT WE HAVE FUTURESLOOKING A LITTLE SOFTER IN NEGATIVE TERRITORY TO THE TUNEOF TWO THIRDS OF 1%. NIKKEI FUTURES ALSO LOOKINGFAIRLY SOFT. WE SAW A PRETTY BAD DAY FORAUSSIE AND JGB YESTERDAY. AFTER AUSTRALIA'S APRIL CPIBEAT. NEW ZEALAND GOING TO BE ONE TOWATCH.
THE MARKET CURRENTLY TRADINGSOFFER — SOFTER BY .5%. IT IS BUDGET DAY TODAY.NEW ZEALAND EXPECTED TO ANNOUNCE WEAK REVENUE, HIGHERBORROWING, AND A RETURN TO SURPLUS PROBABLY PUSHED OUTUNTIL 2028. WE WILL HAVE ALL OF OUR ANSWERSWITH REGARDS TO THE NEW ZEALAND BUZZ IT IN JUST UNDER THREEHOURS. HAIDI: THIS IS A MARKET THAT IS REALLYSEARCHING FOR ANSWERS AT THE MOMENT.PARTICULARLY AS TO WHERE THE FED WILL GO NEXT.PERHAPS UNSURPRISINGLY ARE.
GETTING EIGHT WEAK — NOT AGREAT DEAL OF ENTHUSIASM IN THE U.S. SESSION OVERNIGHT.S&P FUTURES CONTINUING TO LOOK SLUGGISH.TECH IS ALSO SEEING A FURTHER DRAG.IT REALLY WAS THAT SLIDE IN BONDS PULLING STOCKS DOWN WITHANOTHER WEAK SALE OF TREASURIES RAISING CONCERNS OF THE FUNDINGTHE U.S. DEFICIT WILL DRIVE YIELDS UP ATA TIME WHEN THE FED IS IN NO RUSH TO CUT RATES.44 BILLION DOLLARS SOLD IN SEVEN YEAR NOTES.THAT IS ABOVE THE PRE-AUCTION.
LEVEL.OF COURSE WE HAD TWO OTHER OFFERINGS A DAY AGO THAT SAWPRETTY LACKLUSTER DEMAND. THESE BOND SALES ARE SEEINGGROWING INFLUENCE IF YOU WILL OVER OTHER ASSET CLASSESINCLUDING THE SENTIMENT WHEN IT COMES TO STOCK TRADING.WATCHING CRUDE AS WELL. SAUDI ARABIA SET TO LAUNCH A$10 BILLION ARAMCO SALE AS WELL ON SUNDAY WE HAD M&A ACTION. AND OF COURSE WE ARE STILLWEIGHING THE IMPACT OF GEOPOLITICAL RISK AND LOOKINGAHEAD TO THE OPEC-PLUS MEETING.
PAUL: LET'S GET INSIGHT NOW FROMBELITA ONG. THE BEIGE BOOK WE GOT OUT OFTHE U.S. OF THE EARLIER IS NOT TOO BAD.SLIGHT MODEST EXPANSION FOR U.S. GROWTH AND WE SAW CONSUMERCONFIDENCE RISING IN MAY. THAT WAS THE FIRST RISE WE SAWTHEY ARE IN FOUR MONTHS. WE HAVE YIELDS RISINGANTISTRESS FOR PATIENTS. DO YOU THINK WE ARE GOING TOSEE ANOTHER REPRICING ON RATES? BELITA: THE FED HAS BEEN PRETTYCONSTANT IN ITS ATTITUDE ABOUT WHEN AND HOW IT WILL LOWERINTEREST RATES IN THE MARKET.
EXPECTATIONS HAVE MOVED ALLOVER THE PLACE. AS TO THE TIMING AND THE EXTENTOF RATE CUTS, I THINK THERE IS SO MUCH UNCERTAINTY BECAUSE THEFED HAS NOT DECIDED WHAT IT IS GOING TO DO AND WHEN.THAT IS BECAUSE GIVEN THE CIRCUMSTANCES TODAY THERE IS NOREASON TO EXPECT THEM TO CUT RATES.INFLATION IS NOT WHERE THEY WANT IT TO BE ANY STICKY PARTSOF INFLATION, WHICH ARE IN INSURANCE PREMIUMS AND RENTS,ARE LIKELY NOT VERY SENSITIVE TO RATE CUTS OR RATE INCREASES.SO I THINK FOR NOW WE JUST.
WATCH AND SEE WHAT THE DATABRINGS. PAUL: WHAT DO YOU ANTICIPATE AROUNDTHE STICKY AREAS INFLATION THAT YOU MENTION?CAN THAT BE BROUGHT UNDER CONTROL WITHOUT INFLICTING TOOMUCH PAIN ON THE ECONOMY? BELITA:FRANKLY I AM VERY UNCERTAIN ABOUT WHAT THE FUTURE WILLBRING IN TERMS OF INFLATION AND INTEREST RATES.PART OF ME HAS HELD BELIEF FOR A LONG TIME THAT REGARDLESSWHAT THE FED DOES ON SHORT RATES LONG RATES WILL HAVE ATOUGH TIME COMING DOWN.
THAT IS JUST BECAUSE OF THEVERY EXPANSIONARY FISCAL POLICY OF THE TREASURY IN THE U.S.AND OTHER GOVERNMENTS HAVE CONDUCTED FOR DECADES. AT SOME POINTS THE INTERESTRATES WILL REFLECT THE BORROWING THIS ACROSS THEDEVELOPED WORLD AND PERHAPS WE ARE BEGINNING TO SEE THAT.ON TOP OF THAT IN THE U.S. WE STILL HAVE A HUGE PROBLEM OFREGIONAL BANKS HAVING MORTGAGES ON THEIR BALANCE SHEETS THATARE PROBLEMATIC FOR THEM. THAT THEY CANNOT FUND AT APROFIT ANYMORE.
SO AT SOME POINT IN THE FUTUREIF RATES DON'T COME DOWN, THEY HAVE TO CONSOLIDATE AND CLEANUP THEIR BALANCE SHEETS BECAUSE THEIR BUSINESS IS NOT VIABLEANYMORE. SO THAT WILL CAUSE ALL SORTS OFDEMAND FOR CAPITAL WHICH BRINGS BACK THIS WHOLE ISSUE OF WHO ISGOING TO LAND AND AT WHAT RATES, ESPECIALLY IN THE LONGAND REGARDLESS OF WHAT THE FED DOES I THINK THE PROSPECT FORLONG RATES IS MURKY AT BEST. HAIDI:IS THIS AN ENVIRONMENT WHERE INTERNATIONAL BECOMES EVEN MOREINTERESTING?.
IF YOU TAKE A LOOK AT JAPAN FOREXAMPLE ARE THERE FURTHER LEGS AHEAD FOR THIS RALLY? BELITA:WE'RE STILL VERY OPTIMISTIC ABOUT INVESTMENT OPTIONS INJAPAN. EVEN AFTER THE RALLIES WE HAVESEEN LAST YEAR AND THIS YEAR THE JAPANESE MARKET IS VERYCHEAP. AS AN EXAMPLE JUST A SIMPLEBENCHMARK TO LOOK AT, EV OVER EMED AT WHICH IS A MUCH BETTERBENCHMARK TO LOOK AT IN JAPAN BECAUSE COMPANIES HAVE SO MUCHCASH ON THEIR BALANCE SHEETS. WE SEE SOMETHING LIKE 40 PLUSPERCENT OF COMPANIES UNDER $3.
BILLION WITH EV EBITA OF UNDERSIX. PRIVATE EQUITY FIRMS ARE DOINGPRIVATE EQUITY DEALS BETWEEN 15 TIMES AND 20 TIMES EARNINGS.OR ACTUALLY EBITA. SO THERE IS A HUGE GAP BETWEENVALUATIONS IN THE JAPANESE MARKET AND WHAT PRIVATE EQUITYIS WILLING TO PAY FOR IT. AT THE SAME TIME YOU HAVEENORMOUS PRESSURE FROM THE TOKYO STOCK EXCHANGE AS WELL ASTHE FSA TO IMPROVE CORPORATE GOVERNANCE AMONG CORPORATEMANAGEMENTS. AND WE ARE SEEING A BIG CHANGEIN THAT WHOLE PLACE.
ON TOP OF THAT EVEN THOUGH WEARE SEEING CHANGES THAT ARE VERY POSITIVE FOR STAFFVALUATIONS IN JAPAN, YOU STILL HAVE THE BULK OF GLOBAL EQUITYMANAGERS STILL UNDERWEIGHT JAPAN.IT IS HARD FOR ME BECAUSE WE'RE SO FOCUSED ON JAPAN TOUNDERSTAND WHY EXACTLY, BUT PERHAPS IT IS BECAUSE JAPAN HASBEEN SUCH A BAD PLACE TO INVEST FOR DECADES, PROBABLY FOR MOSTOF THE CAREERS OF PROFESSIONALS IN THE MARKET.BUT FOR US IT IS ONE OF THE BEST PLACES TO INVEST CURRENTLY.HAIDI:.
WOULD YOU ALSO BE, IN A SENSE,FRONT LOADING WHEN IT COMES TO KOREAN ASSETS?BECAUSE THERE IS THE SENSE THAT KOREA CAN, IN A LOT OF WAYS,REPLICATE THE SUCCESS STORY JAPAN HAS GOTTEN TO AT THISPOINT. HOW DO YOU POSITION GIVEN THATIS A LONGER-TERM STORY, IF WE GO ALONG — IF WE GO BY HOWLONG IT HAS TAKEN JAPAN? BELITA: IT HAS TAKEN JAPAN 10 YEARS ATTHIS POINT SINCE IT STARTED GOVERNANCE REFORM ANDENCOURAGED SHAREHOLDER ACTIVISM. WITH KOREA I THINK IT WILL TAKEA LONG TIME AS WELL.
BUT THE BIG PROBLEM IN KOREA ISTHAT OF TAXES. HERITAGE TAXES ARE VERY HIGHWHICH DISCOURAGES THESE FAMILIES WHO OWN THESE LARGECONGLOMERATES FROM HAVING A HIGH STOCK PRICE BECAUSE ITINCREASES THEIR TAX BURDEN WHEN THE MAIN SHAREHOLDER PASSESAWAY. SO THERE NEEDS TO BE SOME DRAMATIC CHANGES IN KOREA ATWHICH WE BELIEVE HAVE TO COME. BUT THAT JUST TAKES A LONG TIME.AND WITH THE RECENT ELECTIONS IT WILL PROBABLY TAKE EVENLONGER. NONETHELESS WE SEE COMPANIES INKOREA THAT ARE DOING THE RIGHT.
THING ALREADY.AND SO FOR STOCK PICKERS LIKE US , THERE ARE VERY ATTRACTIVEOPTIONS IN KOREA BUT FOR THE MARKET AS A WHOLE I THINK WEHAVE TO SEE SEVERAL YEARS OF CHANGES BEFORE IT BECOMES AMORE ATTRACTIVE MARKET FOR MORE PEOPLE WHO JUST WANT TO JUSTINVEST IN KOREA BROADLY. PAUL: ONE MARKET I KNOW YOU'RE VERYBULLISH ON AND YOU'RE CERTAINLY NOT ALONE IS INDIA.DO YOU FEEL THAT PERHAPS AFTER THE ELECTION IF THE MODIGOVERNMENT HAS RETURNED WITH A SLIGHTLY WEAKER MAJORITY, MIGHTYOU HAVE TO BECOME A STOCK.
TICKER THEERE AS WELL INSTEADOF A BROAD-BASED APPROACH? BELITA:IN INDIA IT IS PARTICULARLY IMPORTANT BECAUSE OF CORRUPTION.YOU HAVE TO REALLY DO YOUR HOMEWORK KNOW THE COMPANIESCOME UNDERSTAND THE FAMILIES THAT ARE SPONSORS OF THOSECOUNTRIES AND BE SURE THEY WILL TREAT YOU FAIRLY.SO THERE IS THAT HURDLE TO OVERCOME IN INDIA WHICH ISCRITICAL. RIGHT NOW FOR INSTANCE, WE AREAT AN UNUSUAL POINT IN TIME BECAUSE A LOT OF THE DOMESTICSAVERS HAVE THESE AUTOMATIC.
SAVINGS ACCOUNTS THAT INCREASEMONTHLY. WENT FROM NOWHERE BASICALLY TOABOUT $2 BILLION A MONTH. THE RETAIL INVESTORS TEND TO BEFAIRLY INDIFFERENT TO VALUATIONS.SO OUT OF THE BLUE SMALL-CAP INDIA HAS GOTTEN MORE EXPENSIVETHAN LARGE-CAP SO WE ARE CERTAINLY TAKING PROFITS WHEREPRICES HAVE RISEN WE THINK WELL ABOVE FAIR VALUE AND INVESTINGIN COMPANIES WHICH ARE OUT-OF-FAVOR FOR SOME REASON OROTHER. RIGHT NOW THEY SEEM TO BE THELARGER CAP COMPANIES.
SO WE DEFINITELY DO A LOT OFPORTFOLIO CLEANUP REBALANCING BETWEEN COMPANIES WHENVALUATIONS MOVE AROUND, WHICH THEY DO IN INDIA.BUT AS YOU SAY, WE ARE BULLISH LIKE A LOT OF PEOPLE AND WEREMAIN BULLISH BECAUSE THE FUNDAMENTAL STORY IN INDIA ISSO STRONG. HAIDI: ALWAYS GREAT TO CHAT WITH YOU.BELITA ONG FROM DALTON INVESTMENTS.WE ARE HEARING FROM SARAH HUNTER, ASSISTANT GOVERNOR OFTHE RESERVE BANK ALSO — OF AUSTRIA.SHE IS SPEAKING THIS MORNING AT.
A CONFERENCE ABOUT YESTERDAY'SHOTTER THAN EXPECTED INFLATION NUMBERS.INFLATION PICKING UP FOR A SECOND CONSECUTIVE MONTH INAUSTRALIAN, REALLY BOLSTERING THE CASE FOR THE RBA TO STAYHIGHER FOR LONGER AND REVIVING THIS CHAPTER ABOUT POTENTIALLYMORE TIGHTENING BEING NEEDED. SARAH HUNTER SAYING SHE BROADLYAGREES WITH THE TREASURY'S INFLATION FORECAST, THAT WHENIT COMES TO THE CPI NUMBER WE GOT IS WEAK, IT CONFIRMS THESTRENGTH OF A NUMBER OF CATEGORIES.UTILITIES, INSURANCE RENTS HAVE.
BEEN QUITE STICKY.SHE SAYS THE RBA BELIEVES WHICH IS GROWTH IS NEAR ITS PEAK.SOME COMPONENTS OF THAT WAGE GROWTH IS BEGINNING TO SEESOFTNESS, BUT THE RBA IS BEING VERY WATCHABLE ON WAGES ANDPRODUCTIVITY. REALLY ACKNOWLEDGING THEPRESSURE THAT COMES FROM THE COST-OF-LIVING CRISIS.SARAH HUNTER, THE ASSISTANT GOVERNOR, SAYING SOMEAUSTRALIAN HOUSEHOLDS ARE STRUGGLING AND THEY WILL NOT BEAN IMMEDIATE TURNAROUND AND HOUSEHOLD SPENDING.BUT ON THE CORPORATE SIDE,.
LENDING BUSINESS INVESTMENT ASA KEY DRIVER OF GDP GROWTH HAS HELD UP REASONABLY WELL. PAUL:WE WILL BE TAKING A CLOSER LOOK AT CURRENCIES LATER.WE ARE WATCHING THE AUSSIE DOLLAR AS SARAH HUNTER SPEAKS.STILL TO COME, THE YEN'S PERSISTENT WEAKNESS GOING TO BEADDED TO EXPECTATIONS OF A BOJ RATE HIKE.NATIONAL AUSTRIA BANK IS GOING TO JOIN US TO SHARE THE OUTLOOKFOR FX MARKETS LATER. FIRST, WE TAKE A LOOK AT WHATIS NEXT FOR BHP AFTER WALKING AWAY FROM ITS ANGLO-AMERICANAMBITIONS IN WHAT COULD'VE BEEN.
THE BIGGEST MINING DEAL IN ADECADE. AND WE ARE GOING TO LEAVE YOUNOW WITH LIVE PICTURES FROM ICELAND, PICTURES AT THE MOMENTTHERE. THAT IS A VOLCANO CURRENTLYERUPTING. WE'VE BEEN WATCHING THIS WERE AVERY LONG TIME. THIS IS A COASTAL TOWN OF 3800PEOPLE. IT WAS LARGELY EVACUATED INDECEMBER WHEN THINGS STARTED HAPPENING IN A GEOLOGICAL SENSE.SO WE HAVE GOT LAVA NOW SHOOTING 165 FEET INTO THE SKY.
HAT — THAT FISSURE MILES LONGTHERE. MORE IN A MOMENT. THIS IS BLOOMBERG. HAIDI:THE BIGGEST MINING DEAL IN WHAT WOULD HAVE BEEN OVER A DECADEIS NO MORE. IN FACT CHOOSING TO WALK AWAYFOR BHP, I GUESS THEY WILL BE SEEKING COPPER OPPORTUNITIESELSEWHERE. THIS IDEA OF HAVING ANOTHEREXTENSION THAT WAS REBUFFED AND I GUESS ULTIMATELY THESTRUCTURAL ISSUES THEY HAD WITH THIS DEAL WITH ANGLO AMERICANJUST NEVER GOT SORTED. PAUL:.
IT ENDED AS DRAMATICALLY AS ITBEGAN. AN HOUR BEFORE THE DEADLINE BHPSAID NO MORE AND WALKED AWAY. WOULD HAVE BEEN THE BIGGESTDEAL IN A DECADE. LEAVES ANGLO IN AN INTERESTINGPOSITION. THE CEO PROMISED TO DELIVER ATURNAROUND PLAN. HE IS NOW GOING TO HAVE TO MAKEGOOD ON THAT. BUT THE COMPLEXITY AROUND THISDEAL SEEMS TO BE WHAT BROUGHT IT UNDONE.BHP WANTED TO SPIN OFF THOSE SOUTH AFRICAN ASSETS.ANGLO NOT SO KEEN ON THAT.
THE LAW SAYS THAT BHP CANNOTHAVE ANOTHER STAB NOW FOR SIX MONTHS UNLESS THERE IS A RIVALBID. HAIDI: YOU WONDER IF RIVALS AREBREATHING A SIGH OF RELIEF OR LOOKING AT THE OPPORTUNITYTHERE TO PERHAPS HOVER AROUND A LITTLE MORE BECAUSE THIS WOULDHAVE CREATED A COMMODITIES POWERHOUSE THAT WOULD HAVETOWERED OVER COMPETITORS. IT STILL COMES AT A TIME WHEREDESPITE THE RECENT BIT OF A PULLBACK AND PROFIT-TAKING WHENIT COMES TO THIS COPPER RALLY, UP ABOUT 25% ALMOST THIS YEAR,THAT LONG-TERM BULL CASE IS.
VERY MUCH INTACT IN TERMS OFTIGHTER SUPPLY, GREATER DEMAND, EVEN WITHOUT THE CHINA RECOVERYSTORY. THERE IS SO MUCH DEMAND FORCOPPER ASSETS AND PRICES CONTINUE TO GO IN ONE DIRECTION.THIS KIND OF DECISION TO WALK AWAY BY BHP INSTEAD OFSWEETENING OR CHANGING ITS BID, IT IS A BIT OF A NEW REALITYFOR DEALMAKING. THEY ARE COMING BACK TO THESEDISCUSSIONS BUT CLEARLY BOARDS ARE NOT WANTING TO ANGERSHAREHOLDERS BY GOING TOO FAR. PAUL: PERHAPS A LITTLE BIT OFCAUTION.
WE SAW ANGLO SHARES FALL ON THEANNOUNCEMENT OF THIS. LET'S SEE HOW BHP WHEN WE GETGOING AT THE TOP OF THE HOUR. HAIDI:SOME OTHER HEADLINES WE ARE TRACKING, ACTIVIST INVESTORNELSON PELTZ HAS REPORTEDLY SOLD HIS ENTIRE DISNEY STAKEACCORDING TO CNBC. HIS FUND MANAGEMENT LAST MONTHLOST ITS BID TO OBTAIN DISNEY BOARD SHEETS — SEATS.SOURCES SAY SAUDI ARABIA SET TO LAUNCH A SECONDARY OFFERING OFSHARES IN OIL GIANT SAUDI ARAMCO THAT COULD RAISE OVER$10 BILLION.
WE ARE TOLD THE SALE COULDHAPPEN AS SOON AS SUNDAY WITH INFORMAL INTEREST ALL PURITY –ALREADY BEING EXPRESSED. PROCEEDS WILL DIVERSIFY THESAUDI ECONOMY AWAY FROM OIL. CONOCOPHILLIPS HAS AGREED TOBUY MARATHON. THE MOVE EXPANDS THEIR FOOTPRINT IN U.S. SHALE.IT ALSO EXTENDS A BUYING SPREE AMONG MAJOR U.S.AND OIL GAS LAYERS. MARATHON SURGED FOLLOWING THENEWS. BLOOMBERG IS LEARNED SONY MUSICIS IN TALKS TO ACQUIRE QUEEN'S MUTED CATALOG WHICH INCLUDESHITS LIKE BOHEMIAN RHAPSODY.
SONY IS WORKING WITH ANOTHERINVESTOR ON THE PURCHASE, WHICH COULD TOTAL $1 BILLION.EARLIER THIS YEAR SONY ACQUIRED A HALF INTEREST IN MICHAELJACKSON'S CATALOG FOR AT LEAST $600 MILLION.COMING UP IN THE NEXT HOUR, OUR INTERVIEW WITH THE CEO OF LINKASSET MANAGEMENT, A GROUP THAT MANAGES HONG KONG'S FIRSTLISTED REAL ESTATE INVESTMENT TRUST. TALKING ABOUT THEIRBUSINESS STRATEGY AFTER THE PORTFOLIO REPORTED AN EARNINGSMISS. MUCH MORE TO COME ON “DAYBREAK:AUSTRALIA.” THIS IS BLOOMBERG.
PAUL:TESLA HAS BEEN HAVING A TOUGH YEAR.LAYOFFS HAVE BEEN MOUNTING, ITS STOCK IS CRATERING, AND SOMEINVESTORS SAY IT HAS A DISTRACTED LEADER IN CHARGE ASELON MUSK MANAGES FIVE OTHER FIRMS. TODAY'S BIG TAKE TAKES ACLOSER LOOK AT MUSK'S ORBIT AND HOW HIS GALAXY OF COMPANIESSTAYS AFLOAT. DANA HULL JOINS US NOW FROM SANFRANCISCO. SO HOW DOES THIS ELON MUSKWORKFLOW, ORGANIZATIONAL CHART DIFFER FROM WHAT WE MIGHTCONSIDER NORMAL? DANA:.
A TYPICAL COMPANY WOULD HAVE ACLEAR ORGANIZATIONAL CHART ON ITS WEBSITE.TESLA AND ALL HIS OTHER COMPANIES DON'T HAVE THAT.SO WE CREATED A MORE FLUID, EVER SHIFTING AND SHAPING SOLARSYSTEM WOULD ELON AS THE SUN. I THINK IT GIVES PEOPLE ABETTER REPRESENTATION OF HOW MUSK OPERATES AND HOW HISCOMPANIES ALL KIND OF OVERLAP AND INTERACT WITH EACH OTHER.THERE ARE MANY PEOPLE WHO PLAY MULTIPLE ROLES, WEAR MULTIPLEHATS, THE SAME CHARACTERS SHOW UP OVER AND OVER AGAIN IN TERMSOF INVESTORS AND BOARD MEMBERS.
BUT THIS IS BY NO MEANSDEFINITIVE BUT IT SHOULD GIVE PEOPLE A CLEAR SENSE OF WHO ISSURROUNDING ELON AND THE CONSTELLATION OF THE COMPANIES.HAIDI: SOME OF THESE CRITIQUES OF ELONMUSK HAVE BEEN AROUND FOR A WHILE.THAT HE IS DISTRACTED AND HE HAS TOO MUCH ON HIS PLATE.I AM SURE A LOT OF HIS EXECUTIVE LEADERSHIP WOULDPREFER HIM TO BE MORE FOCUSED. WHAT INSPIRED YOU AND BLOOMBERGTO TAKE ON THIS PROJECT? I'M VERY INTRIGUED BY THISGRAPHIC THAT WE HAVE ON OUR.
SCREENS. DANA: SURE.PART OF IT CAME ABOUT BECAUSE TESLA IS FACING A VERY CRITICALSHAREHOLDER VOTE JUNE 13, AND THEY WILL BE VOTING, AGAIN ONAA PAY PACKAGE VOTERS FIRST APPROVED FOR TESLA IN 2018.BUT BETWEEN 2017 AND NOW MUSK HAS TWO MORE COMPANIES.HE BOUGHT TWITTER AND STARTED A BRAND-NEW AI COMPANY HE ISRAISING BILLIONS OF DOLLARS FOR. SO HIS INFLUENCE AND HIS EMPIRECONTINUES TO GROW. THE GUY HAS A LOT OF IDEAS FORCOMPANIES. USED TO RUN TWO, THAT IT WASFOUR, NOW IT'S SIX.
THERE DOES NOT SEEM TO BE ANEND FOR HIS APPETITE FOR STARTUPS AND DOING A LOT OFTHINGS BEYOND TESLA. HAIDI: OUR BLOOMBERG SENIOR REPORTERDANA HULL THERE. SUBSCRIBERS CAN READ MORE ONTHE TERMINAL. IT'S ALSO OVER AT BLOOMBERG.COM. THEY ARE CONFIDENT THEAUTOMAKERS BET ON GROWING U.S. DEMAND FOR ELECTRIC VEHICLESWHILE STILL INVESTING IN HYBRIDS.WE SPOKE EXCLUSIVELY WITH HIM, WHO ALSO GAVE US AN UPDATE ONHYUNDAI'S NEW GEORGIA EV PLANT.
>> WELL, WE ARE STILL VERYCONFIDENT AND I WAS VISITING OUR PLANT IN SAVANNAH LAST WEEKAND I AM HAPPY TO REPORT THAT WE WILL BE ABLE TO PRODUCETHREE MONTHS AHEAD OF SCHEDULE. SO, BY OCTOBER THIS YEAR WEWILL START PRODUCING ARE VERY POPULAR IONIC 5.SO THAT'S GREAT. WE'RE VERY CONFIDENT.AND AS I HAVE SAID MANY TIMES, WE CONTINUE TO DOUBLE DOWN ONOUR BET FOR ELECTRIFICATION. WE ARE HAPPY TO CONTINUE WITHTHAT. YOUR QUESTION ABOUT THE HYBRID,WE HAVE ALSO SEEN THAT THE.
EVOLUTION OF EV SALES IN THEINDUSTRY, MAYBE NOT AS FAST AS EVERYBODY EXPECTED, OR ASREGULATION WOULD EXPECT. AND WE HAVE SEEN ALSO THAT ANUMBER OF CONSUMERS ARE WAITING FOR MAYBE ALTERNATIVE FUELTYPES BEYOND ICE, LIKE HYBRIDS. THAT IS WHY WE'VE DECIDED THATIN OUR PLANS IN SAVANNAH WE'RE GOING TO PRODUCE ALSO HYBRIDVEHICLES. THIS IS GOING TO IMPLY ANINCREASE ON INVESTMENT, BUT WE BELIEVE IN THIS, AND WE AREHAPPY TO SEE THE REACTION OF OUR DEALERS AND STAKEHOLDERS ASWE HAVE ANNOUNCED THAT.
>> BY THE WAY, GREAT TO SEE YOUAS WELL. THE INOIC 5N HIT THE MARKET,WOWING A LOT OF PEOPLE WITH THE ICE EMULATION AND SPORTYPERFORMANCE. IS THAT THING SOLD OUT ALREADY?WHAT ARE THE ORDERS LOOKING LIKE FOR THAT? >> WELL, IONIQ 5 ISUNBELIEVABLE. FEW KNOW THIS LIKE YOU, WHATTHIS CAR CAN DO. MORE THAN 640 HORSEPOWER.IT JUST MADE IT TO THE PERFORMANCE CAR OF THE YEAR INTHE WORLD CAR EVENT THAT TOOK.
PLACE IN NEW YORK IN APRIL.THIS IS ONLY AFTER TWO YEARS. I THINK THIS IS ONE OF THE FEWCARS THAT COULD RAISE EVEN ONE OF YOUR MOTORCYCLES AND BEATYOU. BUT I WILL LEAVE THAT TO AN OPPORTUNITY IN THE FUTURE. >> I LOOK FORWARD TO IT. THE PRICE TAG CONTINUES TO GETHIGHER AS THESE CARS GAIN POPULARITY WITH CONSUMERS.OBVIOUSLY IT HAS DONE WELL. THIS ONE COSTS NORTH OF $65,000.THE GENESIS PRODUCT IS DOING SO WELL THAT YOU CAN TAKE MORERICE THERE.
DO YOU SEE THAT POWERINCREASING EVEN AS IT IS FALLING FOR YOUR COMPETITORS?JOSE: WE REALLY DO SEE THE POWER INCREASING.WE REALLY BELIEVE THAT THE FUTURE IS GOING TO BE ELECTRIC.IT'S NOT A MATTER OF IF, BUT WHEN.IF YOU GO TO EUROPE, THERE IS A 20% MIX OF EV'S.IF YOU GO TO OTHER REGIONS LIKE CHINA, IT IS ABOUT 30%.WE ARE STABLE IN THE U.S. AT ABOUT 8%.BUT WE CONTINUE TO DO VERY WELL. THIS YEAR TO DATE WE HAVEINCREASED OUR SALES OF EV'S BY.
MORE THAN 50%.LAST YEAR WE DOUBLED OUR SALES OF EV'S. ♪ PAUL:TIME FOR MOURNING CLOTHES AHEAD OF THE ASIA TRADING DAY.JP MORGAN CHAIR AND CEO JAMIE DIMON SAYS HE EXPECTS PROBLEMSTO EMERGE IN PRIVATE CREDIT A, ESPECIALLY AS A RETAIL CLIENTSGAIN ACCESS CLASS. HE SAYS THE INDUSTRY HAS NOTBEEN TESTED BY BAD MARKETS YET WHICH COULD EXPOSE THE WEAKNESSOF NEW PRODUCTS.
>> STRESS TESTED.DO PEOPLE UNDERSTAND WHAT I SAID ABOUT INTEREST RATESAFFECTING WITH THESE THINGS ARE WORTH? DO THEY?AND IF THE LITTLE LADY FINDS OUT YOU CAN'T GET HER MONEYBACK, THERE MAY BE DISCLOSURES SAYING THIS MONEY IS LOCKED UPFOR FIVE YEARS, BUT YOU KNOW WHAT, RETAIL CLIENTS WILLCIRCLE THE BLOCK AND CALL THEIR SENATORS AND CONGRESSMEN, ANDTHERE WILL BE HELL TO PAY. PAUL: MEANWHILE, MORGAN STANLEYINVESTMENT MANAGEMENT IS TURNING LESS BEARISH ON CHINESESTOCKS.
STATE SUPPORT THROUGH SHAREBUYBACKS ALONG WITH CHEAP VALUATIONS COULD HELP BOOSTPRICES, ACCORDING TO ONE ANALYST. BUT HE STILL QUESTIONSAS STRUCTURAL ISSUES REMAIN IN THE ECONOMY.GOLDMAN SACHS SEES THE BACK OF JAPAN APPROACHING QT WITHCAUTION, SAYING A PASSIVE RUNOFF BY THE BOJ WOULD DROPTHE PACE OF QUANTITATIVE TIGHTENING OF OTHER MAJORCENTRAL BANKS. THE ESTIMATE IT COULD ADD UP TOFIVE TO 10 BASIS POINTS ON JAPAN'S 10 YEAR BOND YIELDS PERYEAR, WITH SWAP SPREADS.
TIGHTENING BY A SMALLER AMOUNT.HAIDI: ALRIGHT, WE ARE GETTING A COMMENTARY FROM THE ASSISTANTGOVERNOR OF THE RBA SARAH HUNTER, SPEAKING IN A FIRESIDECHAT THIS MORNING. SHE TALKED ABOUT HOW HOUSEHOLDSPENDING IS NOT EXPECTED TO BOUNCE BACK QUICKLY.SHE IS TALKING NOW ABOUT THE LABOR MARKET SEEING SIGNS OFCOOLING DOWN, SHE EXPECTS IT WILL CONTINUE TO SO OFTEN.THE RBA IS CLOSELY TRACKING OTHER ELEMENTS INCLUDING THECLEAN ENERGY TRANSITION AS WELL AND THAT IMPACT ON THE ECONOMY.CLEARLY SHE HAS BEEN THINKING.
ABOUT THE STAGFLATION RISK FORTHE ECONOMY, SAYING THE RBA IS ALWAYS MINDFUL OF THESE, VERYFOCUSED ON THE CPI DYNAMICS. IT COMES AT THE SITE IS LOOKINGTO STAY HIGHER-FOR-LONGER ON YESTERDAY'S CPI NUMBERS, THESECOND MONTH OF ACCELERATION FOR INFLATION PRESSURES IN THEHISTORY OF SUGGESTING THE RBA HAS NOTHING TO CONTEND WITH ASIT GOES INTO ITS JUNE MEETING, POTENTIALLY HIGHER-FOR-LONGERIS THE PITCH. SHE DID ALSO TALK ABOUT THESTRUGGLE FOR A LOT OF HOUSE BOATS, THE IMPACT ON WAGES ANDPRODUCTIVITY WITH SOME.
COMPONENTS OF WAGE GROWTHSTARTING TO SEE SOME SOFTENING THERE AS WELL.TAKE A LOOK AT HOW WE ARE SETTING UP.IT WAS A WEAK LEAD IN THE EQUITY SESSION.ANOTHER SESSION ON WALL STREET DOMINATED BY THE SLIDE ANDBOUNDS. ANOTHER WEEK AUCTION CONTRIBUTING TO THE EARLIERLACKLUSTER DEMAND IN THE SALES WE SAW EARLIER IN THE WEEK.IT IS STARTING TO BECOME ONE OF THE DOMINANT THEMES FOR OTHERASSET CLASSES, NOT JUST TREASURIES.
NEW ZEALAND, AS WE LOOK AT THEBUDGET, WE ARE SEEING SOME WEAKNESSES THERE IN CASHTRADING. SINGAPORE AND MAKE A FUTURELOOKING LIKE WE WILL SEE A DROP FOR THE TOPIX WHEN WE COMEONLINE. THAT WEAKNESS BEING EXTENDEDINTO THE S&P FUTURES AND NASDAQ FUTURES AS WELL.LOOK AT CURRENCIES. THE DOLLAR NOW RISING THE MOSTSINCE APRIL. IT'S ABOUT INFLATION AND THEGLOBAL DEBT SUPPLY WEIGHING ON PRICES AND OF COURSE THECOMMENTARY THAT CONTINUES WHEN.
IT COMES TO STAYINGHIGHER-FOR-LONGER FOR THE FED. ALL OF THIS IS WEIGHING ONASIAN CURRENCIES, IN PARTICULAR, THE YEN.LET'S BRING IN OUR NEXT GUEST. WE ARE WATCHING THAT LEVEL FORTHE JAN THAT PREVIOUSLY INSTIGATED SUSPECTEDINTERVENTION, 157 .52 IS WHERE WE ARE.WE ACTUALLY WENT PAST THAT TWO AT 157 POINT 64.IS THERE A SENSE THAT THERE IS A LINE IN THE SAND?ARE QUESTION OF THE DAY ACTUALLY IS, WHAT HAPPENS IF WEGO TO 160 AND PASS? GUEST:.
160 IS THE LEVEL WHERE WE SAWSUSPECTED INTERVENTION, WE SHOULD GET CONFIRMATION OF THATAT THE END OF THE MONTH WHEN THEY PUBLISH THE MONTHLYBALANCE SHEET. NO DOUBT THE BANK OF JAPAN WASBAD. I THINK THE AMOUNT OF INTERVENTION THEY CONDUCTED WASPRETTY SUBSTANTIAL, PROBABLY NORTH OF $50 BILLION.I SUSPECT WE ARE NOT TOO FAR OFF FROM ANOTHER ONE, BUT WEHAVE TO REMEMBER WHAT IS THE SOURCE OF THIS UPTREND.10-YEAR YIELDS HAVE RISEN BASIS POINTS IN THE LAST 10 DAYS, ANDTHAT HAVE BEEN THE MAIN DRIVER.
OF MOST OF THE DOLLAR-YENVOLATILITY WE HAVE SEEN IN THE LAST COUPLE OF YEARS EVENTHOUGH THOSE JGB YIELDS HAVE GONE UP ABOVE ONE PERSON.IT'S THE LEVEL OF TREASURY YIELDS THAT SEEMS TO BEDOMINATING. UNLESS AND UNTIL WE SEE SOMEREVERSAL THERE, OR THAT WE SEE THE BANK OF JAPAN STEPPING UPWHETHER IT IS THE PACE OF QUANTITATIVE TIGHTENING, OR WHETHER WE SEE RISES IN THEOVERNIGHT RATE THAT GO BEYOND CURRENT MARKET EXPECTATIONS,IT'S DIFFICULT TO SEE A NEAR.
TERM REVERSAL OF THAT TREND.I THINK THE WARRANTY FOR BROADER ASIA IS THAT THE RATECONTINUES TO RISE, WE HAVE SEEN IT IN THE PBOC'S FIXING FOR THEYUAN WHICH WAS YESTERDAY. IT IS FEEDING BACK AND HASUNDERMINED THE AUSSIE DOLLAR STRENGTH WE SAW YESTERDAY ONTHE BACK OF CPI NUMBERS. SO THE RIPPLE EFFECTS FROM THECONTINUING TO WEEKEND ARE PRETTY BROAD-BASED. HAIDI:THAT E.M. CONTINUES TO WEAKEN AND THEDOLLAR CONTINUES TO STRENGTHEN WITH THE FED NOT IN A HURRY.I GUESS IT GOES TO THE QUESTION.
OF HOW WORRIED SHOULD BROADERASIA AGREE WITH THE GLOBAL IMPACT OF A FED THAT IS NOTGOING TO MOVE ANYWHERE TOWARDS EASING ANYTIME SOON. RAY:THE IMPLICATIONS OF THE FED NOT EASING ARE PROFOUND.BUT WE SHOULD REMEMBER THAT UP UNTIL LAST WEEK'S THAT S&PGLOBAL PMI AND THEN EARLY THIS WEEK, WE HAVE HAD FOUR OR FIVEWEEKS WHERE U.S. ECONOMIC DATA HAD BEENCONSISTENTLY SURPRISING TO THE DOWNSIDE.AND CLEAR SIGNS OF A SHIFT IN.
RELATIVE ECONOMIC PERFORMANCEAWAY FROM THE U.S. IN FAVOR OF THE REST OF THEWORLD, PARTICULARLY IN EUROPE. WE SAW THE DOLLAR UNDERSUBSTANTIAL PRESSURE. WE HOPE FOR THE FED EASING ASEARLY AS Q3 STARTING TO RATCHET HIGHER.SO IT WILL NOT TAKE MUCH IN TERMS OF THE INCOMING U.S.ECONOMIC CALENDAR IF IT REVERTS BACK TO ACTUALLY BE ECONOMY ISCOOLING, INFLATION IS STARTING TO MODERATE AGAIN, WE COULDEASILY SEE THAT PENDULUM SWING BACK OR START TO SEAT U.S.TREASURY YIELDS EASING BACK AND.
THAT COULD SET OFF A RENEWED,MODEST, AT LEAST DOLLAR DEPRECIATION CYCLE.AT THIS STAGE I HAVE NOT SEEN ENOUGH EVIDENCE OF THE DATA TOSAY THAT WE SHOULD BE CALLING TIME ON ANY PROSPECT OF THE FEDEASING THIS YEAR. PAUL: ASIDE FROM THE U.S.DOLLAR, WHAT ABOUT THE OTHER CURRENCY PAIRS, FOR EXAMPLE,THE EURO. YOU HAVE SEEN THE ECB PERHAPSCUTTING IN JUNE AND THEN AGAIN IN JULY, WHICH WE CAN'T RULEOUT, WHERE DO YOU SEE THAT PAIR HEADING?.
RAY: AT THE MOMENT WE ARE STILLPOSITIVE ON THE EURO. THAT JUNE CUT IS BAKED IN.I WOULDN'T BE CONFIDENT THAT WE WOULD SEE FOLLOW-UP CUTS.THE OFFICIAL VIEW IS THAT WE WILL SEE A CUT IN JUNE AND THENSEPTEMBER AND THEN AT THE END OF THE YEAR.IT'S A BIT MORE THAN MARKETS ARE CURRENTLY THINKING ABOUT ATTHE MOMENT. SO IF JAN WEAKNESS CONTINUES TOBE DOMINATED BY ONGOING RISES IN TREASURY YIELDS, YOU AREPROBABLY EXPECTING EURO-YEN TO CONTINUE RISING IN THATENVIRONMENT.
IT'S A CASE OF WHETHER THEDOLLAR GOES, PRETTY MUCH ALL CURRENCIES WILL GO. SO IT'S BASED FOR STRONG MOVESONE WAY OR THE OTHER. PAUL:WE ARE SEEING SIGNS OF THE BOJ MAY BE READY TO TIGHTEN AGAIN.WILL THAT HAVE MORE IMPACT ON INTERVENTION, AND DO YOU THINKTHE NARRATIVE IS BELIEVABLE? RAY: IT IS, WE HAVE SEEN ASIGNIFICANT SHIFT IN THE NARRATIVE COMING OUT OF BOJGOVERNOR UEDA. THE LAST MEETING, HE WAS PRETTYADAMANT THAT JAN WEAKNESS IS.
NOT HAVING A DETRIMENTAL EFFECTAS FAR AS THE INFLATION IMPACT. THAT GOT A STRONG NEGATIVE YENREACTION FROM THE FAST FORWARD AND THE NARRATIVE SEEMS TO HAVECHANGED. WE HAVE HEARD FROM THE DEPUTYGOVERNOR OF THE BEGINNING OF THIS WEEK OR LATE LAST WEEKECHOING SIMILAR COMMENTS. THE BOJ IS GIVING UP POSSIBLYFOR A REDUCTION IN THE PACE OF JGB BUYING AS EARLY AS THE JUNEMEETING WHICH WOULD SET THE MARKET UP FOR AN ACTUAL RATERISE OF THE SHORT END. MAYBE AS SOON AS THE JULYMEETING. IF THAT COMES TO PASS,.
DEPENDING ON WHAT IS HAPPENINGON THE U.S. YIELD AND END OF THE SPECTRUM,OUR FORECASTS HAVE US CLOSER TO 150 AND HEADING LOWER, BUT VERYMUCH PREDICATED ON THE FED STILL GOING TO EASE THIS YEAR.THE BANK OF JAPAN MAY SURPRISE WITH THE RATE AT WHICH ITSTARTS TO NORMALIZE POLICY. HAIDI:IT'S HARD TO SEE ANYTHING GOING RIGHT GOING FORWARD.FOR THE YUAN. BUT IT MAY BE THE RIGHT THINGFOR POLICYMAKERS IN TERMS OF BOOSTING EXPORTS.
RAY:AT THE SAME TIME,, THEY HAVE BEEN UNDER PRESSURE.THEY HAVE BEEN REASONABLY RESISTANT TO ALLOWING THE JUANTO WEEKEND. — THAT WON SO WE CAN.IT UNDERMINES THEIR EFFECTIVENESS IN TERMS OFCOMPETITION FOR EXPORTS. BUT THEY STILL HAVE THE VIEWTHAT IS STRATEGICALLY A FEEL THAT THEIR INTEREST MIGHT BEBEST SERVED BY DEMONSTRATING A COMMITMENT TO THEIR CURRENCY,THINKING ABOUT GREATER INTERNATIONALIZATION OF THECURRENCY.
DEMONSTRATING COMMITMENT TOSTABILITY, I THINK, SUITS THEM. AT THE THINK THERE ARE LIMITSTO HOW MUCH THEY CAN RESIST THE LURE OF A STRONGER U.S.DOLLAR AND A WEAKER YEN, SO THOSE FIXINGS WILL BE VERYIMPORTANT IN THE COMING DAYS. PAUL:WE WILL HAVE A BUDGET OUT OF NEW ZEALAND IN A COUPLE OFHOURS. THE QUANTITATIVE EASING IS BACKABOVE $.60, BUT WE EXPECT TO SEE DEBT INCREASING ON THEGOVERNMENT SIDE. WHAT IS YOUR OUTLOOK FOR THEKIWI DOLLAR? RAY:.
THE CONTEXT OF A BROAD DOLLARVIEW, WE ARE POSITIVE ON THE NEW ZEALAND DOLLAR.WE DON'T THINK THAT THE HAWKISH RHETORIC THAT HAS COME OUT OFTHE RV AND SAID LAST WEEK IN WHICH THE PRICE PEOPLE — WEARE STILL RETICENT TO BELIEVE THAT THAT COULD ACTUALLYTRANSLATE INTO TIGHTER POLICY. GIVEN THAT THE STATE OF THE NEWZEALAND ECONOMY, IT'S NOT OBVIOUS THAT HIGHER-FOR-LONGERRATES OR EVEN A RATE RISE WILL BE SUPPORTIVE, IF IT FURTHERDRIVE THE ECONOMY FURTHER INTO THE GROUND.BUT THE BUDGET TODAY MAY NOT BE.
HELPFUL TO THAT CAUSE.IF WE SEE A SIGNIFICANT LISTENING IN POLICY, WE WILLHAVE TO DISTINGUISH BETWEEN THE CYCLICAL BLOWOUT IN DEFICITS AS PURELY THE RESULT OF DECREASINGECONOMIC ACTIVITY THAN A RESULT OF FISCAL IMPULSE. IF THERE IS ANYTHING THATSUGGESTS A SIGNIFICANT FISCAL IMPULSE, MARKETS WILL MOVE ONAS FAR AS TIGHTENING IS CONCERNED.THE SHORT TERM OF THAT COULD BE QUANTITATIVE EASING POSITIVE.BUT I AM LESS CONVINCED THAT IT.
WOULD SUSTAIN ONGOING NEWZEALAND DOLLAR STRENGTH. PAUL: REACTION AHEAD OF FX STRATEGYFROM THE BANK OF AUSTRALIA. RAY IS — VRATE ATRIAL, THANK YOU SO MUCH FOR JOINING US.WE ARE EXPECTING A DEFICIT OF 5.7 BILLION DOLLARS, A LONGERROAD TO SURPLUS. BEYOND THAT, TAX CUTS ANDINFLATION, WHAT IS THAT GOING TO MEAN?RAY HAS GOT A SHORT-TERM UPSIDE FOR THE KIWI DOLLAR. HAIDI: IT'S DIFFICULT.WE HAVE A SIMILAR SITUATION.
THAT DEVELOPED NATIONS AREFACING, THE TENSION BETWEEN FISCAL AND MONETARY WHERE ONEUNDERMINES THE OTHER END IT IS AT A TIME WHEN COST-OF-LIVINGPRESSURES ARE PRESSURING GOVERNMENTS AND TREASURYDEPARTMENTS. SO THE PROMISED TAX CUTS TOALLEVIATE THE COST OF LIVING PRESSURES FOR HOUSEHOLDS EVEN AS WE SEE IT CONDITIONSRECEDING. THE FINANCE MINISTER SAID THEPACKAGE WILL BE FISCALLY NEUTRAL AND WILL NOT ADD TOINFLATION.
IT WILL BE FULLY FUNDED BYSAVINGS AND NEW REVENUE STREAMS. BUT OF COURSE OF THEINFLATIONARY MONTHS THAT SUPPOSE IS ONLY THE RISK. PAUL:AND NO RETURN TO SURPLUS BEFORE THE NEXT ELECTION EITHER. PAUL: THE U.S.HAS AGAIN WARNED BAKING IT IN FACE CONSEQUENCES IF CHINESECOMPANIES CONTINUE SUPPLYING RUSSIA WITH COMPONENTS FORWEAPONS USED TO ATTACK UKRAINE. THIS WAS ON A VISIT TO KIEV,REPEATING THAT WASHINGTON IS OPEN TO FURTHER SANCTIONS.
>> THE MOOD IN THE CAPITALTODAY IS ONE OF URGENCY IN TERMS OF DOING EVERYTHING THEYCAN TO DEFEND THEIR COUNTRY. I HAVE BEEN IMPRESSED BY THEBRAVE MEN AND WOMEN IN THE UKRAINE AND THE FACT THAT THEYARE COMMITTED TO FIGHTING FOR THEIR FREEDOM AND DOINGEVERYTHING THEY CAN TO BUILD AN ECONOMY AND A FREE ANDDEMOCRATIC COUNTRY. I AM HERE BECAUSE THE UNITEDSTATES WANTS TO BE THEIR PARTNER IN DOING THAT.IN ADDITION TO TALKING TO THEM ABOUT SANCTIONS, I HAVE BEENABLE TO TALK TO THEM ABOUT.
ECONOMIC SUPPORT AND THE WAYSWE CAN MAKE SURE OUR ALLIES AND PARTNERS STAND WITH THE BRAVEMEN AND WOMEN OF UKRAINE. >> YOU SAID YESTERDAY ON YOURTOUR IN KYIV THAT AN ACCEPTABLE AMOUNT OF WEAPONS COMPONENTSARE STILL GETTING INTO RUSSIA. THERE IS A SENTIMENT THATSANCTIONS ARE SIMPLY NOT WORKING.AS THE TREASURY'S POINT MAN ON SANCTIONS, DOES YOUR TRIPCONFIRM THAT? >> MY TRIP CONFIRM THAT WE NEEDMORE TO MAKE SURE SANCTIONS.
CONTINUED TO STOP RUSSIA FROMGETTING THE GOODS THEY NEED TO BUILDTHE WEAPONS THEY WANT. WE HAVE CHARGED THEM WITHTRYING TO GET AROUND OUR SANCTIONS AND WE ARE CONCERNEDRUSSIA IS GETTING ACCESS TO KEY COMPONENT PARTS PARTICULARLYFROM CHINA AND OTHER COUNTRIES THAT ARE ALLOWING THEM TO BUILDTHESE WEAPONS. WHAT I AM HERE TO DO IN KYIV ISTALK TO COUNTERPARTS ABOUT THE NEW TOOLS WE ARE CONSIDERING TOTRY AND GO AFTER THE ABILITY OF THE KREMLIN TO DO JUST THAT.FUNDAMENTALLY WE CAN'T DO THIS.
ALONE IN THE UNITED STATES, WENEED TO DO IT WITH ALLIES AND PARTNERS AND THAT IS WHY I AMHEADING TO GERMANY TO TALK TO MY GERMAN COUNTERPARTS ABOUTTHE IMPORTANCE OF US ACTING TOGETHER TO STOP THOSECOMPONENTS FROM GETTING TO RUSSIA. >> WELL, WE ARE LOOKING FORWARDTO THAT SPEECH, WILL YOU ANNOUNCE SECONDARY SANCTIONSAGAINST THOSE RESPONSIBLE FOR THOSE COMPONENTS GETTING INTORUSSIAN WEAPONS. >> I WILL NOT PREVIEW ANYACTIONS THAT WE WILL TAKE.
WHAT I WILL SAY IS WE WILL TALKABOUT THE FACT THAT THE UNITED STATES AND OUR ALLIES ANDPARTNERS ARE GOING TO BE OPEN TO SANCTIONING ANY COMPANY ORINDIVIDUALS THAT PROVIDE MATERIAL SUPPORT TO RUSSIA'SMILITARY INDUSTRIAL COMPLEX BECAUSE WE WANT TO MAKE SURERUSSIA DOES NOT HAVE ACCESS TO THE GOODS THEY NEED TO FIGHTTHE WAR IN UKRAINE. HAIDI: U.S. DEPUTY TREASURY SECRETARYSPEAKING TO BLOOMBERG'S JOE MATHIEU. LOOK AT HOW U.S.FUTURES ARE TRADING, THIS AFTER ANOTHER DISMAL SESSION FORTREASURIES, BONDS FALLING AND.
PUSHING YIELDS CLOSE TO THEHIGHEST LEVELS OF THE MONTH. THAT FINAL AUCTION OF THE WEEKREINFORCING THE BROADER TREND OF LACKLUSTER DEMAND.WE HAD TWO OTHER WEAK SALES EARLIER THIS WEEK AS WELL.SO THIS TRIO OF SUMMER AUCTIONS IS CONTRIBUTING TO A BROADERSOUR MOOD NOT JUST ACROSS TREASURY MARKETS, BUT ACROSSOTHER ASSET CLASSES AS WELL. WE ARE HEARING FROM THE ATLANTAPRESIDENT AT THE MOMENT SPEAKING IN A CONVERSATION AT AQ&A EVENT, SAYING THAT THE PASTOR THIS INFLATION WILL BEBUMPY, BUT THE GENERAL TREND IS.
DOWN.THE PATH TO PERCENT INFLATION IS NOT ASSURED AND THE FED ISVIGILANT. ALSO SAYING THAT THE JOB MARKETIS TIGHT AND NOT AS TIGHT AND CLOSER TO 2020 CONDITIONS.LAST INFLATION BREADTH WOULD ADD TO CONFIDENCE WHEN IT COMESTO A CUT. REFERRING TO THE FOURTHQUARTER, THAT MAY BE THE TIME WHEN THE FED CAN REDUCE RATES,SAYING THERE IS A NEED FOR PATIENTS, CONSUMERS ARE LESSSENSITIVE TO HIGHER RATES RIGHT NOW.
MORE OR LESS IN LINE WITH THEPOSSIBILITY OF HIGHER-FOR-LONGER, THE NEED FORMORE EVIDENCE AND CONVICTION IN THE DATA BEFORE THE FED WILLMOVE REALLY IN EITHER DIRECTION. YOU CAN CATCH US LIVE AND SEEOUR PAST INTERVIEWS IN OUR INTERACTIVE TV FUNCTION, TV
THIS IS BLOOMBERG. HAIDI:TAKE A LOOK AT THAT LATEST STORIES WERE FOLLOWING IN TERMSOF EARNINGS. HP SHARES AFTER QUARTERLYREVENUE TOPPED ANALYST ESTIMATES INCLUDING ITS FIRSTINCREASE IN PC SALES IN TWO YEARS.REVENUE FROM THE COMPUTER UNIT INCREASED 3% OF THE SECONDQUARTER DUE TO A RISE IN COMMERCIAL SALES, WHILECONSUMER SALES CONTINUED TO DECLINE.SHARES OF THIS COMPANY SLUMPED.
AFTER THE SOFTWARE MAKER SAIDSALES WITH STALLED TO THE LOWEST IN HISTORY.IT SEES REVENUE RAISING 8% IN THE CURRENT PERIOD, FUELINGCONCERNS ABOUT ITS ABILITY TO STAY RELEVANT AS THE INDUSTRYMOVES FORWARD TOWARDS ARTIFICIAL INTELLIGENCE.THAT SHIFT IS ALSO REFLECTED IN C3.AI'S STRONGER THAN FORECAST,ALMOST $400 BILLION IN 2025, HIGHER THAN THE AVERAGE ESTIMATE OF $360 MILLION.C3.AI HAS BEEN INTRODUCING PRODUCTS WITH GENERATIVE AITHAT CAN CREATE TEXT AND IMAGES.
IN RESPONSE TO A USER'S PROMPTS.PAUL: AND AI WILL BE A KEY FOCUS OFTHE TECH SUMMIT GETTING UNDERWAY IN SINGAPORE WHEREANNABELLE DROULERS IS. WHAT IS ON THE AGENDA?ANNABELLE: PAUL, IT'S ACTUALLY JUSTGETTING UNDERWAY THIS MORNING, WE HAVE THAT, COMING INTO ITSSECOND DAY. IT BILLS ITSELF AS A MAJOR TECHEVENT FOR ASIA. SINGAPORE WE KNOW IS REALLY ACITY THAT IS PUSHING TO BECOME THE SILICON VALLEY OF ASIA.WE ARE SEEING A VERY CONCERTED.
GOVERNMENT PUSH BEHIND THAT.WE HAVE HEARD FROM SINGAPORE'S PRESIDENT.WE WILL BE HEARING FROM THE PRIME MINISTER AS WELL THISMORNING. THAT ONLY THE ATTENDEES REFLECTTHAT. WE HAVE THE LIKES OF IBM, META,ANTHROPIC AND OPENAI ALL HERE. BUT PEOPLE HAVE BEEN SPEAKINGTO OUR FROM THE START OF COMMUNITY.IT'S BEEN INTERESTING TO UNDERSTAND MORE ABOUT WHAT ISTHE FUNDING A LANDSCAPE LOOKING LIKE RIGHT NOW?I AM HEARING IT'S VERY, VERY.
ACCESSIBLE AT THIS POINT INTIME PARTICULARLY IF YOU HAVE AI ATTACHED TO YOUR NAME.ALSO HEARING BECAUSE THAT THERE MIGHT BE A BUBBLE, MAY BE A BITTOO MUCH HYPE AND TOO MANY PROMISES AS WELL. HAIDI:LOTS OF GOOD CONVERSATIONS TODAY, BELLE. ANNABELLE: YES, THAT'S RIGHT, THAT STARTUP FOCUS AND ALSO KEEP THESE COMPANIES THAT ARE PRE-IPO.ONE OF THOSE IS DATABRICKS. WE WILL BE SPEAKING TO THECO-FOUNDER IN THE NEXT HOUR. IT'S A CLOUD-BASED PLATFORMWITH A LOT OF DIFFERENT.
TECHNICALITIES BUT IT HELPS THELIKES OF SHAND, CONDE NAST, BIG PHARMA GIANTS, MANY CUSTOMERSWORKING WITH LARGE DATA SETS, HELPS THEM BUILD MACHINELEARNING MODELS. THAT CONVERSATION IS COMING UPIN THE LAST HOUR. THAT COMPANY IS VALUED AT $43BILLION AND WE WILL GET AN UPDATE ON THEIR LISTING PLANS. THIS OTHER COMPANY WILL BETALKING ABOUT REGULATORY SCRUTINY IN THE U.S.FROM THE LIKES OF MAJOR MEDIA COMPANIES, NETFLIX AND TELCOSAND MORE, WITH SINGAPORE'S.
SENIOR MINISTER OF STATE. PAUL:BLOOMBERG'S ANNABELLE DROULERS THERE LIVE FROM THE ASIA TECHSUMMIT IN SINGAPORE. THESE ARE THE STOCKS WE WILL BEWATCHING. TRADE OPENS IN KOREA, JAPAN ANDAUSTRALIA AT THE TOP OF THE HOUR. BHP IS IN FOCUS AFTER THE AUSSIE MINER ABANDONED ITS BIDFOR ANGLO AMERICAN. SONY IS IN TALKS TO ACQUIREQUEEN'S MUSIC CATALOG WHICH COULD TOTAL OF $1 BILLION.AND KEEP AN EYE ON AUSTRALIAN.
AGRICULTURAL AND OTHERS ASCANBERRA ANNOUNCED THAT THESE EXPORTS TO CHINA ARE SAID ARESULT. ASIAN CARRIE IS ALSO IN FOCUSAFTER AMERICAN AIRLINES CUT ITS GUIDANCE. HAIDI:WHEN IT COMES TO COMMODITIES, OIL IN PARTICULAR, THIS IS THEPICTURE. NEW YORK CRUDE IS FLAT, JUSTUNDER $80 A BARREL. RETREATING ON WEDNESDAY ONBROADER RISK-OFF SENTIMENT OFFSETTING THE HEIGHTENEDTENSIONS THAT WE CONTINUE TO.
WATCH IN THE MIDDLE EAST, THISBEFORE THE OPEC-PLUS SUPPLIER MEETING ON SUNDAY.WE SEE A BIT OF A DECLINE, ALSO SOME STUDYING.COMMODITIES MORE BROADLY FOLLOWING BONDS AND STOCKS INTHE U.S., AT LOWER. THAT DISAPPOINTING CELL OFTREASURIES IS REVERBERATING ACROSS ASSET CLASSES INCLUDINGCOMMODITIES. ALSO WATCHING COPPER.THE HISTORIC SQUEEZE ON THE NEW YORK COPPER FUTURES.IRON ORE IS ONE TO WATCH AS WELL, SEEING A BIT OF WEAKNESSTHERE, BUT THE ADVANCE WE SAW.
FROM THE LOWEST CLOSE IN MORETHAN A WEEK IS REFLECTING THE OPTIMISM ON GRADUAL PROGRESSBEING MADE IN CHINA'S PROPERTY MARKET AND SOME OF THE SUPPORTMEASURES WE ARE SEEING FROM MAJOR CITIES THERE.COMING UP IN THE NEXT HOUR, OUR EXCLUSIVE INTERVIEW WITH THECEO OF LINK ASSET MANAGEMENT, TALKING STRATEGY, PORTFOLIOREPORTING, AND EARNINGS MISS.MEANTIME, THE MARKET OPENS IN SYDNEY, SO OBAMA AND 2Q ARENEXT. THIS IS BLOOMBERG.
