Bloomberg Dawn: Australia 05/31/2024

Welcome to DAYBREAK Australia.I'm Haidi Stroud-Watts. in Sydney?We're counting down to Asia's major market opens.I'm Annabelle Droulers in Singapore. And the top stories this hour.It's a really disgraceful trial. The real verdict is going to be November5th by the people. Donald Trump found guilty on all 34counts in his hush money trial. Now the first former US president tobecome a convicted felon. We're live in New York and Washingtonfor all of the reaction. Also ahead, Asian futures pointing tostock gains ahead of the Fed's key.

Inflation indicator.Fresh data showing the US economy is growing at a softer pace.Plus, Bloomberg reveals the U.S. is slowing chip exports to the MiddleEast while officials carry out a national security review.Well, Donald Trump is calling it a disgrace after a rigged trial.The Biden campaign says it proves no one is above the law.It is a momentous decision where a New York jury today convicted the formerpresident on all 34 counts in his hush money trial, with sentencing due forJuly 11th. That is just days before the Republicanconvention that's set to nominate him.

For another run at the White House.This was a disgrace. This was a rigged trial by a conflictedjudge who was corrupt as a rigged trial, a disgrace.It wouldn't give us a venue change. We were at 5% or 6% in this district, inthis area. This was a rigged, disgraceful trial.The real verdict is going to be November 5th by the people.Let's bring in Bloomberg's David Gura, as well as Kelly Lyons, joining us livefrom the courthouse in lower Manhattan. Kelly's joining us out of Washington.Kelly, I'll go to you first. I mean, what's been the immediatereaction given this is the first.

Criminal trial of a former president?It happens just five months out from the election.We cannot underscore enough how significant this day is in Americanhistory. This is not only a former president ofthe United States, but the current presumptive Republican nominee who nowstands a convicted felon, found guilty on all 34 counts of falsifying businessrecords. It's an incredible moment.Of course, Donald Trump has maintained, as he did so outside the courthousetoday, his innocence. He says he will appeal this.He also has said that this is a justice.

System being weaponized against him,even though that may be factually inaccurate.And all the while, he is actively campaigning to be president once more.And already we have seen a number of surrogates for the president, includinga number of Republican members of Congress, who have come out in defenseof him and against this verdict, against the way that the justice system workedhere, it is already having significant political ramifications.But we all will have to wait five months more to find out how it may actuallyinfluence voters opinions as they head to the polls and decide whether or notthey would like Donald Trump to have a.

Second term in the Oval Office.Right now, polling suggests that it may not actually influence that many votersat all, that not many minds will be changed as a result of the historicnature of the events that happened today.And David, I'll go to you now as well, because you're live from the courthouse.As we said, we will bring some footage of that as we get it.But just paint the picture of of what's happening down there and what's thetone. That's that's not only from perhapspeople that are protesting, but also those pro-Trump supporters that we knowwere there.

They've largely dissipated at thispoint. You know, the day had transpired untilabout 420 when the judge told people who were in the courtroom he was going tosend the jury home for the day. And then in a bit of a surprise move,the jury gave the judge a note saying they'd reached a verdict and asked forsome additional time to fill out the paperwork to let them know how they weregoing to render their verdict in this case.Then there was just electricity through the large media presence that's beendown here in lower Manhattan and in the park just next to me, in front of thecourthouse where you had protesters on.

One side and supporters of the formerpresident on the other. And they were kind of cheers from oneand jeers from the other as word of those guilty verdicts made their wayfrom the courtroom out to the public outside.This happened incredibly fast. Yes, there was that delay as thepaperwork was being put together. But once the clerk inside the courtroombegan reading those decisions, it was one, two, three, four, all the way up to34, 34 felony counts of falsifying documents in the service of anothercrime. That crime being interference in the2016 presidential election.

There has been a lot of police presencedown here around this courthouse over these last few weeks as this trial tookplace. Today was no exception.And again, as that verdict was announced, we saw police kind of line upsentry style behind me in front of the courthouse, one every about eight ornine feet, keeping watch over what was happening here.But by and large, despite how tense it became, how much anticipation led tothat verdict today, there were no scuffles.There were no major fights. Pretty people, pretty peaceful here inlower Manhattan.

David, what's likely to happen fromhere? Because we know theoretically he couldbe sentenced to a jail term. This is that sort of likely and I guessdoesn't matter when it comes to his supporters, because we know that hislegal shortcomings tend to kind of galvanize them, if anything else.It's a great question because you look at the polling and there were those whosupport the former president who are likely to continue supporting himdespite this. Maybe there is a sliver of theelectorate who might be swayed by the fact that he is now a convicted felon.We'll have to see how that plays out.

And as you were just discussing, theformer president very keen to look ahead to November or to the general electionand to move this from kind of a legal crucible into a political one.But that date of July the 11th really looms large.That is the sentencing date, and it is to the judge's discretion in this caseto decide what that sentence is going to be.So the maximum penalty for each of these 34 counts is four years in prison.They could be served concurrently. Again, it's up to the judge to decide.He may very well decide that he's not going to remand Donald Trump to prison.But there's this vacuum that's emerged.

Here.Yes, the president is going to move ahead in this political forum, but he'swaiting, as we all are, to see what this judge is going to decide.Again, it's up to him to make that decision based on the guidelines thatare in the law here in the U.S.. And Kelly, as Dave was just saying,that, yes, it could perhaps galvanize Trump's most most ardent supporters,could also help the most ardent supporters of Biden.But but what about that group of undecided voters?How does it influence them as well? Right.This is the question that we all have.

Based on Bloomberg's reporting, ourpolling, rather together with Morning Consult in the seven swing states thatare very likely to decide the outcome of this election, which was done back inJanuary and was purely hypothetical at the time in which this question wasasked. More than half of voters said in thoseswing states that they would not vote for Donald Trump if he were to beconvicted of a felony. The question is, does the answer to thatquestion change now that he actually is one just today?PBS and NPR put out a poll together with Marist that found two in threeregistered U.S.

Voters said a guilty verdict would haveno effect on who they plan to vote for in the presidential election.So we are going to be watching the polling in the coming weeks veryclosely. But of course, there's only so muchpolls can tell you when we're more than five months out from the actual vote inNovember. What could perhaps be more telling isthe fundraising that happens off the back of this.Earlier this evening, after this verdict came down, Winred, which is a popularRepublican donation site, actually was down because it was being overloadedwith so much activity.

So if Donald Trump is able to, as he hasdone in the past with his many legal challenges, fundraise off of this, bringmore money in to to go into his campaign to provide a cash cushion for him tocampaign with, that could really be telling.And of course, we'll be watching to see whether or not Joe Biden also shows thesame ability to fundraise off of this and to what extent, if at all, it couldhelp the incumbent president. Yeah.Spurring donations from supporters on either side, perhaps.Right. David, before we leave this, you know,what is sort of the gut sense that we're.

Feeling?We are, as we mentioned, just a few months out from November.Obviously, this complicates matters from the Republican side.Is there sort of both viable alternatives being raised here?No, not at all. And that that makes the situation evenmore perplexing. I mean, we had a host of candidates tryto vie against Donald Trump for the Republican nomination.He has emerged as the presumptive nominee.He was in the lead from the very beginning.So it really wasn't a question of who.

Might match him or who might replace himin this race. So it looks very much like it's going tobe Donald Trump, the 45th president United States against Joe Biden comeNovember. And this is just the backdrop to thatand something that I think voters are going to have to reckon with and thinkabout as they make their way to the polls in November.That was Bloomberg's David Gura there live from the courthouse in New York.And of course, Bloomberg's Kaylee Washington as well.In Washington, Kelly lines, rather, in Washington.And you can get more on the Trump.

Verdict and a roundup of the storiesthat you need to know to get your day going in today's edition of DAYBREAK.You can see here very much focused on Donald Trump, his conviction in thishistoric case. It's available on de be go.Also on mobile in the Bloomberg anywhere app and quick check on how markets arefaring as well because as we've got for us futures just coming online thismorning and a little bit of downside pressure you can see here so reallyreflects intraday the session as well given we had those U.S.GDP figures coming out and saw that slowing in the first quarter, reallypersonal spending or consumption weight.

On that particular pullback in the autosector as well. That led to concerns around the healthof the US economy and how that high rates environment could be impactingcorporate America tech stocks as well. They really did take a bit of a hit,Heidi. Take a look at how we're setting up.Of course, we're getting into the final Friday session of the week.And, you know, even as with that top news, with the political implications ofthat Trump verdict, we have see investors very quickly scanning forsigns of potential volatility after that verdict.Right.

In terms of a market, though, thatgenerally tends to tune out US political risk.And to that, we really are seeing not just US markets, but global marketslooking ahead to that key inflation gauge, some more of that US data showingthat mixed picture in the United States and what that means for the Fed and someof these other central banks within Sydney futures actually looking prettypositive, was sort of buying some early gains here, not just for Australia butalso in Japan and Hong Kong as well. New Zealand, the day after the budget,about 8/10 of 1% in the early part of the session, we did hear from NicolaWillis, the New Zealand Finance.

Minister, saying that her first budgetis a friend, not a foe to the RBNZ. So trying to sort ofcomfort some of these concerns that we do see that sort of fiscal and monetarytension with a lot of these budgets being delivered.Chicago Nikkei futures are looking a little bit softer, perhaps some weaknessfor Japan in the day session and China a50 futures looking actually prettyresilient at this point. We do also have south korean industrialoutput as one of the sort of data points that we should be looking at as well,seeing a rise of 6.1%. So actually some resilience there whenit comes to factory output in Korea.

More to come here on DAYBREAK.Australia. This is Bloomberg. Asia is at the forefront of some of theworld's biggest stories. And we're here where the action startsin Sydney and in Tokyo get ahead as the global trading day begins.The Asia trade premieres Monday only on Bloomberg. Taking you to some pictures here outsidethe courtroom where former President Donald Trump has just been found guiltyon all 34 felony counts. This is an historic verdict, of course,given we're just months out from the.

U.S.election as well. Big question, of course, for traders ishow that decision is going to be impacting markets that are alreadystarting to prepare for that vote ahead. Let's get more on that now and bring inGeorge blueberries, the managing director for research, investments andadvisory at K2 Asset Management. And George, we know that markets sort ofhave been largely immune to the political turmoil in the past, but stillyou've got this increased political volatility.What's the impact here for traders, do you think?Good morning.

Thanks for having me on.It's quite clearly extraordinary what's over say whether guilty and he's a felonnow in the state of New York. And markets are going to be lookingthrough this, as strange as that sounds. There's amplified, obviously, abehavioral component to this. And people will suffer from variousviews across the cross, both sides of politics.But looking through it, what markets will be saying is what will be theeconomic landscape after 5th of November under a Biden situation, more of thesame government, bigger footprint, driving aggregate earnings in thatcapacity with a recalibration of trade.

Wars and investments in South East Asiaand Mexico by NAFTA. That's the current state of the statusquo with the Trump going in as unlikely as it is.But the possibility is there they'll look through and say the tax cuts orthey will be embedded for the next term and a bit more color and amplified sortof language going forward. But that's what the markets will do.They have to go through this noise. It's extraordinary what's happened withthe 34 guilty charges. But they're going to look through thatand see what the opportunity is. And it's just the way it's going toland.

Politics is an extraordinary, brutallandscape. And the US politics, even so, just keepspopping up with some interesting new new ground.So, George, if you're saying that really not much of a reaction from this inmarkets, what's going to be the bigger driver, do you think then?Is that where the Fed goes or the cracks that would be happening in the USeconomy with those US GDP figures, figures that sort of undershotovernight? A combination.So aggregate conditions are quite reasonable and it's verified throughaggregate numbers that the power tools.

Build into and continue to be verifiedwith earnings. But when you break it down, you can takea different narrative depending where you stand.So quite clearly, higher bond yields can't be tolerated and won't be as muchof a headwind for equity valuations if if economic conditions and GDP isexpanding. That's an obvious statement.But if if you got additional reacceleration of core inflation andwe've seen with the pace of a court tonight and following from the core CPIthat the momentum is not behaving for the last three or four months, thenthen that becomes a bit of a headwind.

For valuations.So you've had an upgrade of economic conditions up until recent months and wemay have a downgrade in economic conditions going into the second half ofthis year. But I think when you look at the firstsix months of this year, on reflection, that is a reasonable economic backdropthat has been supportive for us to grow in North America.The higher bond yields can be tolerated as a headwind for most people, but canbe tolerated because it is expansionary conditions.But there are unknowns as the demand destruction kicks in for the restrictivepolicy.

So it's a reasonable landscape.But at the end of the day, at this stage, equities look like the best assetclass performer for Canada 2024, depending on the day acceleration andwhat happens to the momentum of some of the data.I have a longer in the US and maybe some uncertainty in the next few months,depending on the data. Does that make international marketsperhaps a little bit more alluring? Do you think that's further to go forJapan, for example, with or without the sort of, I guess, out of support of aweaker currency? Yeah, in part, yes.The resilience of the US dollar, we.

Think will continue for now.It's extraordinary what's going on. And it probably it looks a bit fatigueddepending what the ECB will do as well. But and how how they'll cut, we don'tthink will be as deep as what expectations will be.But taking a step back, it still seems more predictable for the earningslandscape, notwithstanding the comments on the politics front for North Americaand again, the trade war wars always it's really done in recent years andincreasing at an increasing rate is directed investment in US earnings intoSoutheast Asia and the old NAFTA agreement through Mexico in wayaccelerating the earnings momentum that.

Way.So there is a reasonable aggregate earnings backdrop which obviously we dolike. Nick ISE is another example that can bethe beneficiary of AI. And even though they've got some softconsumer components and demand in that economy, they export sector, that can bea resurgent, say, in the year ahead. And there's valuations.They look quite good in parts of in parts of Europe.But at the end of the day, the equity picture will still land, with S&P 500being the preferred for most people into year end.Paid credit and debt will continue to be.

A bigger footprint and people'sportfolio and again, it comes down to the US dollar picture.We still think that that that strength will be maintained in the shorter terminto the second half this year. You're not really at this point to wantto get direct exposure investing in China.What would be the trigger to change that?And in the meantime, what sort of compelling in terms of proxies inindirect ways. Yeah, exactly.So underweight China, like most people in the developed world, would be thethematic to be maintained since March.

Quarter 21 for those obvious reasons forthe Beijing overreach. But having said that, there's some goodscience and some good policy to deal with the housing construction issue andthe re acceleration that can be in part driven to this export momentum thatgetting into China. So the way to play it very quickly isexposure to earnings that export into China.And if you want to get into the technology side and the resurgence, theHang Seng would be the place to go. But exposure again, LNG and hardcommodities and some metals and and like I said, if you playing on the technologyresurgence for the mainland China to.

Play by the Hang Seng but an underweightinto investing into China. George, always great to chat with you,George. But Bruce, who's managing director ofResearch Investments and Advisory at K2 Asset Management, joining us out ofMelbourne today. What to come here on DAYBREAK,Australia. This is Bloomberg. With defense ties between the U.S.and China are set to take center stage at this year's Shangri-La Dialogue inSingapore. Military chiefs from both countries haveexpected to have their first in-person.

Meeting since Beijing named a newdefense minister nearly a year ago. Bloomberg Markets Asia anchors LindaAyman is at the event and joins us now. So has what are we expecting?Well, defense chiefs are looking for more than just a handshake.Heidi, we know that these are really volatile times.Tensions are escalating around the world.We have the South China Sea, the Taiwan Strait, the Ukraine war, which is intoits third year. And of course, tensions in the MiddleEast. Remember as well, North Korea launchmissiles recently tried to disrupt.

Communication in South Korea.And of course, we had China and those drills around Taiwan.It said just yesterday that it resulted in results that it was expecting.So these are potential flashpoints. There's a potential of escalation interms of tension. So there is a need for defense chiefs atthis Shangri-La dialogue to dial down the tensions now front and center, asyou said, US-China relations. We have the Defense secretary of the US,Lloyd Austin. He is expected to meet with hiscounterpart in China, Dongguan. Face to face meeting for the very firsttime.

We know that in terms of militaryrelations, it was resumed just about a year agoafter Nancy Pelosi's visit to Taiwan shut down relations between the twosides. Now, it is important that both sideshave candid discussions when it comes to key military relationsand key issues surrounding both sides. We know that relations have been under alot of pressure and recently put more pressure by the reimposition of tariffson Chinese imports. So lots to discuss between the twosides. And it is a challenging time,notwithstanding the South China Sea also.

Front and center.We're awaiting to hear the keynote address from Philippine PresidentFerdinand Marcos Junior. He is expected to talk about howtensions have escalated in the South China Sea, has pushed back a lot inrecent weeks. In recent months, remember, he has saidthat he wants to dial down tensions as well, bring back relations to an evenkeel. He said in an interview recently with methat he does not want to poke the bed. So we're waiting to hear what he has tosay since tensions have escalated since that particular interview.And of course, a lot coming right out.

We have key speakers, key voices thatyou want to keep a lookout for. We'll be speaking with General TimothyHoar. He is the U.S.National Security Agency director. We're taking stock of US-Chinarelations. We'll also be speaking to the defenseminister of New Zealand. Remember, this is one country that wantsto join forces. What's the state of play?What's happening to that bid? And well, New Zealand perhaps raised itsdefense budget to 2%. That is pretty much required by nature.And of course, we'll also be speaking.

With the Lithuanian prime minister totake stock of what's happening in Ukraine.Now she has come out to say that we have not seen the worst in the Ukraine war.So lots coming right out. And that was at Bloomberg Markets Asiaanchor and Chief South Asia correspondent, chief internationalcorrespondent for Southeast Asia Haslinda Amin there live from theShangri-La Dialogue in Singapore and some of the other geopolitical storiesthat we're tracking today. And that's Bloomberg being told that USofficials are slowing the issuing of licenses to chipmakers such as NVIDIAand AMD for large scale AI accelerated.

Shipments to the Middle East.This comes as officials conduct a national security review of Asiandevelopment in the region. Sources say they are particularlyfocused on high volume sales and it's not known how long the review couldtake. President Biden will allow Ukraine tolaunch U.S. provided weapons against militarytargets near the border area of Kharkiv to resist a Russian advance.But a top U.S. official says Kiev is still not allowedto carry out long range attacks inside Russia using American weapons.Biden had earlier opposed calls to use.

U.S.weapons in retaliatory strikes inside Russian territory Heidi.Take a look at as, of course, we digest the latest political news from the USthis morning, how US assets are reacting.Look at the former that really the impact of the former president DonaldTrump historic guilty verdict in this trial yet to kind of set in when itcomes to Wall Street. We do know that th is is a group ofinvestors that tends to see through quite often when it comes to domesticpolitical turmoil. And certainly we've had our fair shareof that over the past few years, and.

Potentially that continues depending onwhat we get in November. But we are seeing futures looking alittle bit softer at this point. So much of this, of course, wait and seefor the inflation numbers. All right.Taking a look at what we're getting across the Bloomberg when it comes toTokyo sepia. Of course, this is a pretty good leadingindicator in terms of where a broader Japan inflation pressures are going.The May CPI stripping out fresh food and volatile energy prices coming in at 1.7%year on near the overall consumer price rise seen at 2.2%, the core consumerprice rise at 1.9%.

That's more or less in line withexpectations, of course. But also much of this data is beingclosely scrutinized, given the weakness in the yen, where we see the Fed andwhether the Bank of Japan with these rising yields is going to be underpressure to put through that next rate hike sooner rather than later.Yeah, that's right. And of course, the jobs market reallykey to that as well. And we're getting out these joblessfigures, the job to applicant ratio and it just pretty much points this pictureof steadiness because the jobless rate has stayed unchanged at 2.6%.The job to applicant ratio as well, just.

A slight tick down there.So you're now seeing 1.26 jobs for every applicant instead of one point to eightbefore actually a little bit against the grain there of consensus because thesurvey had been in for it to stay steady as well.But yes, as you say, really key one to watch for the direction of the Bank ofJapan, whether we're seeing that economic strength sustained to reallywarrant moves higher. This is the state of play here.You've got the Japanese yen. Again, that weakness still holdingaround that 157 mark. Now, let's shift to two equities now andtake a look at how futures are looking,.

Because we're 30 minutes out from theopen here for Sydney, Seoul and Tokyo as well.And actually you're seeing a bit of upside momentum coming through,particularly for Aussie stocks. They're looking for gains of 7/10 of 1%.It is interesting actually because you look against the US futures picture andwe did see US GDP figures really undershooting expectations overnight,softness coming through in personal spending.So concerns around the health of corporate America perhaps.So we did actually see weakness there. But so far, Heidi, we're not reallyseeing that translating across so far.

But there's, of course, the politicalrisk to consider as well. And that is something that could really,of course, play out over the coming months.Yeah, really interesting. And of course, we know that, you know, alot of these markets tend to look through the domestic US colourful notesof domestic US politics, if you will. But really this is a historic story.Donald Trump being found guilty of multiple felonies at this hush moneytrial, making him the first former US president to be convicted of crimes.This verdict now creates a daunting legal and political path ahead for Trumpas he shapes up to take on President Joe.

Biden come November.Joining us now is a Bloomberg political contributor, Jenny Jones.I know, Jenny, really great to have you with us.And as we were just chatting about, we're kind of in uncharted territoryhere. What's your assessment of theimplications of this and how we proceed in terms of the various scenarios goingforward? Yeah, it's uncharted territory is thebest phrase to describe this. You know, we are just sort of coming tothe realization that we have the presumptive nominee of a major politicalparty who will be getting the nomination.

Of his party, presumably just a few daysafter he is sentenced for this crime. You know, you had the 12 New Yorkers,they heard all the evidence and they found him guilty beyond a reasonabledoubt of 34 felony counts. And those four counts that are veryserious, they are counts which suggest that he stole the 2016 election, and yethe's on the ballot again. And all polls indicate he's got a verygood chance of making it. So we don't know what the implication isgoing to be. The polls suggest that 6 to 7 out of tenAmericans say they won't change their vote regardless of whether he'sconvicted or not.

He's now been convicted.So we have to sort of take a wait and see attitude as to whether they followthrough with that. What does it mean then for for forDonald Trump in sort of the nearer term, because this trial has just taken up somuch of his time. What are we going to see him doing fromhere? Well, we know in the immediate tomorrowat 11 a.m. Eastern Time in New York, he is going tohave a press conference. They are already sending out fundraisingemails where he is saying he is a political prisoner there site to get indonations crashed, which they suggest is.

An indication of how many people weretrying to access it to donate to his campaign.So he is going to be hitting the trail in terms of fundraising and making thesame case he's been making for, you know, several, several months now, ifnot longer, which is that this is the Biden campaign.This is the Biden administration. They have gone after him.He is a political prisoner, a political, you know, the victim of politicalpersecution. This was all rigged.You know, that's going to be what he does.But the question is, what do the.

American voters do now that you havesomebody, somebody guilty of these felonies he can't buy or purchase a gunin his own home state. He maybe can't even vote.And yet the Constitution says he can be on the ballot and we can vote for him.So it is a very tricky political moment here to think about how they would eventry to make the case that he should be elected.And I would just add that the Republican Party has no means to take him off theballot now. So they are stuck with him, if you will.And already we've heard many Republicans come to his defense.And we know, as expected, the former.

President has used this to transfer moredonations. The emails have gone out pleading forhis supporters. We know that his legal and othershortcomings tend to, if anything, really galvanized his support base.But as you mentioned, this is a question about what happens to the swing states.We had this interesting graphic towards the end of January.We had reported that, at least according to some of this polling, more than halfof swing state voters wouldn't vote for Trump if he was convicted of a crime.Do you see that changing when it comes to the latest poll data that you'reseeing?.

How does this sort of play out for thoseundecided voters going into November? Yeah, the polls have indicated we maysee some fluctuation, but it has been very, very small and to your point, haschanged in the last several months. So the last set of data we got out wasjust yesterday. And I would just caution that this datais really difficult to tease out because we're asking voters what they might doin a hypothetical situation. But that said, the latest data we gotwas just 67% of Donald Trump supporters said they would not vote for him if hewas convicted. Now, six or 7% isn't a lot, but in anelection this close, that is a concern.

For his team because we're talking abouta few thousand people in 3 to 6 states that could make a difference given theway we've run our elections. So it may cost him the election.But again, I would underscore in May, where 159 days out of the election andhe is giving any every indication this is incentivizing him to remain on theballot more than he would have, because he feels now his life is on the line andhe feels that one way to avoid prison, which is a real possibility here, is torun and win in November. It's been really incredible to watchfrom from from an outsider's perspective here, just how strong that that view isfrom from some camps.

And Republicans, of course, that this isa trial that was very much rigged and and corrupt.And you're hearing that from a lot of different voices and including as wellfrom from the business community, because I was just reading the a tweetfrom Bill Ackman, for instance, saying that that he agrees with that sort ofsentiment. And it also could be likely to endorseTrump ahead of the election. How strong is that argument and is thereany sort of dismantling of it as well between voters views, do you think?Yeah, and I think Bill Ackman's voice is an example.I'm so glad you raised it.

This is something that we hear an awfullot over here, not just from Donald Trump's base, you know, the 30% who saythey will stick with him regardless. But you hear it throughout.We're hearing it from the speaker of the House.We're hearing it from Lindsey Graham, high ranking Republicans.And to your point, people in key positions in business and elsewhere thatthey feel like the Manhattan district attorney that is often described byDonald Trump as somebody who is Soros supported, he had an incentive as aDemocrat, which he is, to bring this case, that the case did not make sense.He should not have been charged with.

Felonies and that this is something thatshould not have happened but is happening in Donald Trump's own voice,in a state in a city where Joe Biden won by an enormous amount and probably willagain. So that sentiment is very, very real.And, you know, I should say there is absolutely no evidence that the case wasrigged. But people are echoing what Donald Trumpand his team have been saying for a long time.And, you know, we don't know maybe the 34 counts and the realization that 12New Yorkers found this may change some minds, but so far we haven't seenevidence of that.

And I think Bill Ackman, you look atpeople like Elon Musk and others as well.Elon Musk has not endorsed yet. He's, you know, being discussed assomebody who might play a role in the in the Trump of the Trump administration,if there is one. These people are making a case that thisis the Joe Biden DOJ who have gone after their political opponent for purelypolitical reasons. And that is resonating despite theabsence of evidence to that end. It.Really fascinating insights. That was Bloomberg's politicalcontributor, Jeannie Shane Zaino there.

And we'll have more ahead on DAYBREAKAustralia. This is Bloomberg. My next guest is warning of an increasein digital trust issues brought about by the unintended consequences ofinnovation from quantum computing to digital search as a security providerthat validates and authenticates online credentials.The company says it's working with 80% of Fortune 500 companies and 70% offirms listed on the ASX. Let's get more from the Sphere Singer.He joins us from Melbourne. Great to have you with us.And it makes complete sense, right, in.

Terms of this kind of era of digitaldistress that we're in and the escalating technology, but also risksposed by things like AI and generative AI.What does that mean for your business, which of course has been in the businessof authentication and security for so long?Yeah. First, thank you for having me.Digital art is the global provider of digital trust for, as you mentioned, 80%of Fortune 500 companies worldwide. You know, digital trust is foundationalinfrastructure that often we take for granted.It makes sure that all the interactions.

That you have online are secure andtrustworthy. For example, how do you know that you'reconnecting to your bank's website and not a fake one?And how do you know that the software you got on on your Apple iPhone camefrom Apple? You know, you may have signed a digitaldocument. How do you know that it's not beenaltered after you signed it? How does a hospital guarantee that itscritical medical systems haven't been tampered with?So all of this is based on digital trust.And under the hood is cryptography.

And Digital has been the leadingprovider for over 20 years, enabling all of this infrastructure on the Internet.Now, you know, you you mentioned quantum computing and generally I, you know,happy to talk about it. But fundamentally, all of this trust isbased on math problems that current computers can crack.However, sufficiently stable quantum computers can easily crack all that maththat is foundational to digital trust as we know it.So, you know, as you're aware, IBM, Microsoft, Google, many nation stateshave been have been pushing quantum computers.I was very happy to see that Australia.

Has decided to invest ,000,000,000 inin getting to quantum computers in Brisbane.Now, all of that is very, very exciting because quantum computers can solveproblems that current computers cannot, for example, climate modeling or, youknow, discovery of new medicines or even AI.But it's a double edged sword. Those same powerful quantum computerscan break current cryptography, and it would be an extinction level event fordigital trust on the Internet as we know it today.Yeah, I've got a question on that, because I think what you're referring tothere possibly is Shor's algorithm,.

Which is the point at which you couldhave quantum computers that could basically break all of the encryptedencryption systems that that are used today.How do you really prepare for that sort of future when the technology as wellisn't quite ready yet? That's a great question.In fact, I'm here in Melbourne. We have over 6000 customers in Australiaand a lot of discussion is around preparing for post quantum cryptography.Now Digicel has been working with the US National Institute of Standards andTechnology. We also co-chaired the InternetEngineering Task Force and we've been.

Busy developing what are known as bothquantum cryptography standards. Now, these standards are based on a newclass of math problems that even quantum computers cannot crack, and thosestandards will be available later on this summer.And digital it's announced on September 26, 2024, as the world's first quantumReadiness Day. What progressive organisations are doingis basically preparing for for crypto agility, which is the ability to upgradetheir digital trust infrastructure to post quantum cryptography standards.And it usually starts off with step one, which is discovery of all crypto assetswithin your organisation.

You know, just to kind of give you asimple example, you know, how do you get your identity?I mean, you go to a passport office and they check your documents credentialsand they give you a passport and now you can use that passport and go everywherein the world. Now think of an organisation, thatorganisation might have, you know, tens of thousands of servers,you know, user devices. Even users, organizations, softwarecontent. All of that is is protected usingcryptography and digital trust. And so organizations need to have aninventory of all of those cryptographic.

Assets.What algorithms are being used in it, and then prepare for automation so theycan quickly upgrade to new post quantum cryptography standards if and when theyare available. Now, you know, you'd be surprised toknow that messaging protocols such as iMessage andWhatsApp, more recently Zoom, they were all started switching to POS quantum keyencapsulation that makes sure that even if there are nation state actors thatare capturing packets with the hope that once stable quantum computers areavailable, they can decipher it. You know, they are still protectingtheir users using post quantum.

Cryptography.So digit. So it's kind of leading the way here,helping organizations with their trust lifecycle management, you know, withdiscovery and automation tools so they can quickly upgrade to newer protocolsas and when they get available. Now, it's interesting that pose quantumcryptography. Is it?Is it. Can you just give more context aroundthat for people that are perhaps unaware of of the risks from this sort oftransition or technological advancement and also that data that's now beingswitched across?.

Is that also being backdated or couldyou have sort of bad actors in the system going back and getting historicdata as well? That's a great question.And all of those are current threats, even though stable quantum computers arenot available. There's an attack on harvest now anddecrypt later where you can capture traffic on the Internet that's encryptedusing pre quantum standards. And now you have stored it and then youcan use it later on to decrypt and get access to keys and other information.Similarly, there might be long lived contracts.You might have signed a contract that.

Has to, you know, be valid for 20 years.With quantum computers, you can, you know, break those signatures and alterthe document and reassign it. So, you know, how do you make sure thatlong live documents, software that is out there, devices that are out therehave have identities that can be trusted with the looming threat of quantumcomputers. And, you know, if you if you take a lookat at the scope of the problem, it is is fairly massive.I think, you know, it's like a Y2K times ten problem without a clear date.You know, it can happen. It can happen a year from now.It can happen two years from now.

But regardless of the time frame, thetime for preparation is now. And that's what progressiveorganizations are doing. Yeah.And you talk about this as an extinction level event.Right. And I do have I guess my question istwofold in terms of how do you assess the level of preparedness andwillingness of businesses to be listening to the advice and how what'sthe readiness in terms of how quickly these algorithms can be deployed oncethere is that commitment? Yeah, it's a great question.Most organizations, unfortunately, are.

Not prepared.And, you know, we've been working with our customers.They are deploying digital at one of our trust lifecycle management platform thatenables discovery and automation of all the cryptographic assets that they haveinside their organization. And we are helping them prioritize theirtheir golden crown jewels first, because there's a there's a lot of upgrade thatneeds to happen, but it does represent an opportunity for organizations tobecome crypto agile and, and, you know, digital, it's leading the way, helpingorganizations achieve just that. That was amazing how their CEO added,You said.

Thanks so much for your insights there.And quick note on some data that's just coming out now.This is Japanese industrial production and retail sales figures that aredropping here. So industrial production is actuallyreally undershot economists estimates here with a contraction of 0.1% on themonth. The estimate had actually been forgrowth of 1.5%. Also taking a look at retail sales aswell on those figures, we're just getting through actually beatingestimates here. So month on month figures where we'relooking at.

Growth of 1.2%.That was double what the survey had suggested.And on the year as well, growth of 2.4% versus estimates of 1.7%.Pretty mixed bag really coming out because we've seen inflation picking upas well. But the jobless market or employmentmarket fairly steady at this point in time with the employment rate holding at2.6%. The Japanese yen there you can seeagain, steady near that 157 mark. More ahead on DAYBREAK, Australia.This is Bloomberg. And Bell as we continue, of course, thedrum beat of going into the end of the.

Week.The big headline when it comes to domestic US politics and hugeimplications potentially as we head into that November presidential election, isthe former president Donald Trump, being found guilty, becoming the first formerUS president to be found guilty of crimes in the nation's history?This could potentially reshape the political landscape.We are just, what, five months out before Election Day?That jury of 12 New Yorkers finding him guilty of all 34 counts of falsifyingbusiness records to conceal that hush money payment to a porn star, Beau.Yeah, And Heidi, that big countdown as.

Well to the sentencing, because we knowthat's been set for July 11. So really the timing of that probablycouldn't come worse for Trump because it's going to be just days before theRepublican National Convention on July 18.And that's where the party is going to be officially nominating Trump as the2024 nominee. So really, the question is what it meansfor voters. And we're discussing this hour.Yes, it's likely to really galvanize Trump's voters.And we're already seeing these signals of of lots of donations coming throughfor him being in space as well.

Also likely to get an uptick for thoseundecided voters. The big one, though, is that group inthe middle, those ones that haven't chosen just yet.And we'll be discussing that in the months to come.Heading into Election Day, what better place to do it than the Asia tradepremiere June 3rd on Bloomberg TV? I'll be joined by Shery Ahn in Tokyo.Everything you need to know to get ahead as Asia's trading day begins.The first episode of the Asia trade is coming up.

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