tv Bloomberg Daybreak Asia Bloomberg October 5, 2023 7:00pm-9:00pm EDT
7:01 pm
>> watching daybreak asia coming to you live from new york, sydney and hong kong. >> counting down to the major market opens in asia. >> australia hasjt opened for trade, the top stories this hour, traders on edge ahead of a job support that might set the tone for the november meeting. the sec is feet -- seeking to force elon musk to answer further cushions about twitter shells after -- shares after failing to show up as reflected -- requested. and jim makes a six wage offer as the strike heads for a fourth week. >> we have the open of the asx 200 here, and sherry has breaking news around peru. >> we will watching peru cutting the reference rate to 7.2 5% from 7.5%. this is the second straight month that we are seeing this cut from the central bank and peru.
7:02 pm
-- improve. they're very high given inflationary pressures in the country but we are starting to see more and more central banks across latin america start to cut, including brazil, and mexico. and now peru is cutting for a second straight month given that their economy is under pressure. inflation has also slowed to a two-year low while the economic challenges continue. and that is real hat that narrative has been around the world. inflation started to cool in emerging markets, but growth also being challenged. and now these developing economies are taking charge when it comes to monetary easing. >> that's right, sherry, but very sensitive to what is going on at the fed and whether we need to see or will see a further hike this year will perhaps be answered to some degree by that key u.s. jobs number coming out later this friday in the u.s.. the headline rating, i don't want to get through to many of thedetails, they expect 170,000
7:03 pm
jobs to be added over the course of september, if we come in hotter than that, when you look at those whisper numbers, traders expect 190,000 jobs, awaits cap there,ut if it comes in hotter that could put the need for a fed hike back firmly onto the table. i of that we expect very subdued range bound trading. you see the 600 in the opening moments here very flat. you can see no movement coming through with treasuries, the aussie dollar. let's change on and look across the rest of the region because kiwi stocks are already online and 20 ahead to the opens for japan and seoul and the next hour. but so far this data plate is very range bound, and we are just keeping a watch throughout the session on those numbers, on the countdown to the u.s. jobs numbers later. >> we aeady saw some indications of perhaps what we could expt with weekly jobless claims numbers ticking up
7:04 pm
slightly, but holding near historical lows. we are watching that resiliency in the labor market, and we saw u.s. socks finishing the session in new york fractionally lower. right now we are not dog much, but we are watchg the 4204 level for the p 500 because that would be the 200 day moving average. it could determine whether we see the longer term trend going up or down. in the meantime, treasuries are mixed. 10-year gilts down a little bit, a lot more stabilization in today's session towards at 4.7%, but the longer and still continues to rise. the 30 year yield still at the highest since 2007. we are now seeing oil gaining ground aftewe saw ses being extended i the new york session tr the worst day in oera year. an that market is al out whether we are concerned about e demand outlook given higher interest rates, but at the same time supply concerns.
7:05 pm
>> let's get some more conversation on this. our u.s. economy senior editor and chief correspondence -- correspond for asia joins us. chris, let's set up with you, expectations when it comes to payroll numbers and not just expectations but how much hinges on this number even we are seeing records -- record amounts of fed fund futures in this moment. >> that is an interesting group factoid that they are sharing. this does feel, there are always big reports, this is the month the u.s. jobs report, the biggest indicator in the world, but this one seems like, as garfield will no doubt under to shortly, if generally important one because of what has been going on in the bond market. this significant run-up to yields to levels that we have not seen in many many years. it seems like if we get a hot
7:06 pm
number tomorrow, and the whisper number is getting higher than the median with two hundred thousand forecast by goldman sachs for september payroll, it does feel like that would give selloff.fuel on the fire of this conversely, few people e, but a sudden drop off in hi could provide a little bit of relief. it does feel like this will be a big one. >> we got more indications of what the fed is thinking from the san francisco fed president merely -- mary daly, alluding to what the bond market tightening means to actually hiking rates. take a listen. >> the bond market has tightened considerably. 36 basis points since we met in september. that is equivalent to about a rate hike. the need to do more tightening is not there.
7:07 pm
>> we have seen a lot of hawkish rhetoric from the fed, but can i take this as a dovish call that perhaps given the market generations in the treasury space might not necessarily have to actually hike more? >> a lot of it depends on where yields go from here. there is a risk that if we did get softer than expected data today, out of payroll, you would see a fresh relief rally for bonds which would bring some yields back down. what we saw this week is yields jumping by 10 basis points, and then they came back down by more than that. in the wake of adp reports which showed private payroll was softening noticeably. this -- it is hard to say to senator flake -- definitively.
7:08 pm
it also depends where does the data coming. --, in. it was clear from that perhaps modestly dovish take from the san francisco fed president that they were not looking at moving towards lower rates. in the best case scenario, so to speak, they hold where they are, and they keep what they regard as being a restrictive level for a long time. and that is the very thing that has been spooking the bond market, along with other issues on supply at concerns about fiscal sustainability. because it's the long end of the bond market that has been leading the latest selloff. that has been something that has been very hard for a lot of investors to cope with in the bond market and without. because so many had piled into that long and thinking that the peak was in there and that the fed would succeed, and that was
7:09 pm
the place to get your gains over the medium term. >> it spooking everyone, because the concern continues to be that this -- we could see a policy mistake that over time lead to a recession. chris, we got more positive views from the imf that perhaps they are banking on a soft landing. >> that's true, although that report, this is the imf getting ready for their big shindig next week in morocco, their annual meeting, saying that well, it looks like there is a greater chance for policymakers around the developed world to bring inflation down while achieving that story itself landing. it does kind of feel like this was prepared three weeks ago or
7:10 pm
so before this big run-up in yields. the tone feels a little bit out of date, to be honest. and i think the core question is, as garfield was alluding to, how representative eased mary daly of the san francisco fed, how is the fed thinking about the extent to which this rise in yields or this tightening of financial conditions is effectively doing the fed's job for it. back in august, the new york fed president, john williams, had said that as inflation comes down, it's basically going to increase our real interest rate, we are going to maybe be tighter than we had planned. and were going to need to think about cutting rates. next year. we had not heard that, again, from fed officials recently.
7:11 pm
and if we don't, i think the danger is, indeed, going to be focused on a fed mistake. >> it could be pretty expensive as a mistake, or a mismatch with expectations for what we get. we talked about this and there, bond traders waging historic sums when it comes to that november outcome. >> that highlights what chris was saying, that this really is bigger than even the usual payrolls report. particularly, it's kind of strange to think that we have got this huge surge in bets on which way the fed might go in november. about four weeks out, more than four weeks out, from the meeting. this is the last payroll report we get for the meeting, but they will still be inflation data and a whole series of other reports that can feed into how the fed sees the economy developing. i don't think that interest is
7:12 pm
likely to come down rapidly either, we could see further searches because there's going to go on being a locking play, precisely because we have got yields at levels very few people expected to see them at, and the market is really in a sort of trackless wasteland when it comes to the bond market. once yields go past 5%, people start for the 10 year, though start talking about maybe the next level be 5.25, 5.5. there is no solid guideline out there, just people grasping around numbers as personal soon said they might have. it's a market that is really really uncertain about how much further this could go. >> garfield reynolds and chris there with our top stories today.
7:13 pm
7:16 pm
>> we have seen this backup in yields and pain that is coming. >> most of this selloff is overdone. treasuries have always been that supersafe asset and it feels like something is cracking. >> we are still waiting to see the worst of it, yields have gone up and there are plenty of reasons for that. >> we have new data that justifies 50 basis points higher in 10-year gilts in a short amount of time. >> if you see slowdown stabilization, the upward trend in yields stops, and if that stops, every other market stabilizes. >> were going to see treasuries go lower, and go back to thinking what is the long-term trade. that is probably higher yields. >> we are very bullish on short maturity high quality investment grade bonds right now. >> valuations are attractive here, this is a good entry point for yield investors. >> tv guests reacting to the
7:17 pm
recent selloff in bond markets. our next guest says her market outlook has deteriorated with the risk of stagflation looking more real than ever before. this is the founder of jl warren capital. thank you for them with us. we heard more positive sounds coming from the imf in a speech today that says the presidency is the likelihood of a soft landing for the world economy. is your concern about a deep global recession or chest that markets have not priced in any sort of slow? >> i think the market has priced in some slowdown, but will hear -- what we are seeing is a 180 degree reversal of before when they were tried to synchronize the growth in the two largest economies in the world, u.s. and china. to china's credit, at that time, the stimulus package that they put into roads and infrastructure to save them from
7:18 pm
going deeper into financial crisis around 2010 kind of, you know, save the world. you saw the developing markets starting to recover and starting to grow at 3%, and china, because of the infrastructure stimulus as well as real estate markets started to grow in the high single digits. what we are seeing now is the complete opposite of that. what we are seeing now is the federal reserve cut rates in a year and a half. the mortgage rate went from 2% to 8%, in just 18 months. versus china. everybody talks about credit easing not paying enough, and then starting to give handouts of dickens -- the consumers. the reality is the government is just out of cash.
7:19 pm
there testing throughout 2020-2022, that's more than the stimulus money, put into the infrastructure back in 2010. >> d expect a huge catch down when chinese markets come online again next week from golden week, and what you expect any sort of rebound going into next year given all of the stimulus measures that we have seen? although you do not seem to think that that would be enough. >> i think the market is probably going to move sideways, because on the one hand the expectation is pretty low. if there is any grain, it's likely rallying off low expectations. but there is no derivative, no clear guidance from a policy perspective. and i feel like the consumer is
7:20 pm
very cautious. you see record numbers golden week -- compared to 2019, they are not back to that level yet, they would rather spend more money on services, and cut spending on goods. so, and there's expatriation going on as well. and south korea, they might spend money there, and that will not help the gdp, i am sure. >> my question is, do we expect growth to ever go back to those levels, because if we accept that these kind of structural elements to the slow down, the property market might be allowed to at least achieve some sort of soft landing, but to correct, ultimately. does that mean normal growth for
7:21 pm
longer is what we expect for china, and how do you invest around that, what is resilient in that sort of environment? >> that's really interesting. we do expect no growth in china over the next couple of years. largely because the thing about the economic growth model, it largely hinged upon the housing market and export. the housing market has been declining in double digits for the last two years. and then the key point that people kind of don't quite realize is that in 30-40% of the house is sold, there yet to be completed. that is because developers are going through a liquidity crisis. it is going to take up to four years for that excess to washout. and for the market to recover. on the export side, the trade numbers, u.s., it's apparently putting incrementally more
7:22 pm
sanctions on china. and the u.s. has been their most lucrative trade partner. china has to look to less attractive partners like russia, which is going to have an impact, and not only the profit will -- on the fx will impact the trades in the basket. we do see a scenario where china no growth to slow growth can last through those years. in that sense, we discussed earlier, we are cautious and we believe that that sure strategy will work very well for the next few quarters. really great to chat with you, the founder of jl warren capital joining us. much more to come here on daybreak asia, this is bloomberg. ♪
7:25 pm
>> we do have breaking news crossing the bloomberg when it comes to twitter, advertisers are back but spending less, the ceo is giving an upbeat briefing to debt holders, saying that we will be cash flow positive, including debt, in 2024. x has given bankers an update about the attempt to reinvigorate growth, trying to return to twitter with smaller budgets and before. most of its advertisers have returned, up 35% in june according to the ceo, telling shareholders during the brief all -- during the briefing on tuesday according to someone in that call.
7:26 pm
most companies are being more conservative with their budgets. she joined the coming back in june and said that revenue is going in the high single digits quarter on quarter across advertising, data licensing, and subscriptions. we know that that $44 billion to cover up twitter really settled the company with $13 billion of debt, sherry. >> i was looking to that, because the sec is forcing elon musk to answer its latest questions about his purchase of twitter shares before he bought the entire social media platforms. for more, let's bring in vonnie quinn. funny, what do we know here? >> the sec is trying to force must to give testimony and this is very unusual that they they -- would do this. it is very rare, but when it happens, the judge usually sides with the regulator and would force, in this case, elon musk, to comply.
7:27 pm
the umbrella investigation is to whether or not he violated securities laws, that is the sec's drop, to see about market manipulation. before acquiring all of twitter in 2022, musk, he owned a stake in it. but he only disclose that to april. rules require that if people by more than 5%, they must disclose it within 10 days. there is a question of whether he defrauded investors in twitter, as it was called at the time, and shareholders would be interested to know that. incidentally, there is a shareholder lawsuit ongoing against him led by an oklahoma firefighters pension fund. and the judge in that case said that yes, it could go ahead. musk does need to understand that he has to face this lawsuit. the judge found evidence that musk does understand the five disclosure -- 5% disclosure rule , because he had testified about that wonderful. we now know that the sec is investigating, which is
7:28 pm
interesting. >> and we know that the test of fate -- testimony had to do with things about the location, but they were happy to move the legal home -- the testimony to his legal home in texas, and elon musk refuse to testify. >> vonnie quinn with the latest. coming up, golden week hollow lake shipping up to be one of the busiest ever, spending exceeding pre-pandemic levels. we have a closer look. this is bloomberg.
7:31 pm
rising only 1.1% year on year, and missg economist expectations. alo a slowdown from the previous month. adjusted for inflation and real ash earnings has a contraction of 2.5% year on year, also a much bigger contraction that economists -- that economists had expected. these week weight results are a setback for the boj, we have been watching these income trends closely there will be -- they wlbe a key factor in determining the lon-range likelihood of achieving sustainable inflation, not to mention, of course, a steeper decline in real eaigs expected to wait on consumption as well. heidi, again, labor cash earnings disappointing in japan. >> central banks in focus as we await u.s. payrolls and the indications for the fed. the federal reserve bank of san francisco says that the central bank can keep rates steady as indicators from inflation to joblessness continue to cool. speaking at the economic club of
7:32 pm
new york with our colleague, she weighed in on the recent selloff that we are seeing in the bond market. take a listen. >> the bond market has tightened considerably, 36 basis points since we met in september. that is equivalent to about a rate hike. and then, the need to do tightening additionally is not there. for my own perspective, that is what i look at. my job as i see, our job as i see it, is not to tighten and just do our part, it's to watch financial conditions. we have monitored how policy works, we have raised the funds rate, and it moves through all the other interest rates. if financial conditions are sufficiently tight, our work is not necessary because we need to boost the more. >> and the rising yields actually does the fed's job for it. would you agree with that? would you sympathize with that sentiment? >> that is how it works. if they tighten, one thing that
7:33 pm
is happening in the last three months and the last few weeks is that financial markets have collectively seemed to take on more of a variety of things. one of the things that i heard from many commentators and many of the market outreach as i do is that they have a general understanding that we are committed at the fomc to keeping rates higher for longer in an effort to bring inflation fully back down to 2%. and that recognition, along with all the other factors that we could put on a list about why bond yields have risen, are affecting the financial conditions and tightening. i see that as a positive outcome that you would have tighter financial conditions and we can really get the job done putting inflation back to rest. >> what is a selloff, something that is welcome from a perspective of the market coming to terms with what the fed has been saying? and when is it disorderly and disruptive on the level that causes concern?
7:34 pm
i see want an orderly repricing over a disorderly repricing. this is why we watch it so carefully, here's how i am seeing it. what is happening is that financial markets are trying to find their footing and the right price for these. and that's adjusted on a lot of information. supply and demand changes in the treasury space, right. supply is going up and demand is going down, especially from foreign buyers. that is one factor to digest. another vector is fed policy and guidance in the sep. another is increasing conversation people are have about whether the new neutral rate has risen. >> the san francisco fed president with lisa abramowicz. let's see how we are setting up for the asian market opens. >> are ending the golden week holiday, and china markets are coming back online.
7:35 pm
we will be monitoring what sort of tone they come back to. you have hefed on the one hand and also everybody coming out of golden week. we had u.s. banks oming out and upgrading their forecast for china's gdp. citigroup and jp morgan are revising their targets higher to say that china can now hit that 5% target. the reason they saying this, you look at some of the strength that has come through in recent data, we had stronger factory output numbers coming through and the pmi figures suggesting that there has been a bit of a bottoming in the manufacturing sector. policy support is also another factor in play. that is something that is on a positive note. what is interestingis the sort of data that we start to see coming out of the golden week holiday. if we change on now and take a look at this chart of traffic levels, essentially showing traffic levels for the 15 most congested cities indexed to 100
7:36 pm
[no audio] the line and blue that is the 2022 figure, that's the traffic levels during the golden week holiday, the seasonality factor because this is typically a time when people are not so much as he at work of course. what is interesting is what citigroup is saying, because softness could be coming through for this golden week holiday in the second half of the week versus other recent holiday stretches. we also want to talk about the september travel survey, changing onto the key takeaways, outbound tourism is continuing to recover, when you look at the plans for chinese travel domestically into the fourth quarter that is beginning to show signs of exhaustion and travel spending, that propensity does appear to be softened, yuan weakness is one of the factors being cited here.
7:37 pm
heidi, some green shift, but there is uncertainty on the horizon after this golden week holiday. >> let's talk about what resilience looks like in china, jacob co., the e-commerce consultancy joins us right now. full reyerson jacob, i know that this is one of the quietest times of the year to be in the chinese capital, but what is the feel that you get in terms of economic slowdowns and how that is impacting sentiment and household and business sentiment and consumers. >> we are actually coming out pretty good news. we have seen pretty good consumption news. the ministry is reporting that there are 400 million trips over the first three days of the holiday, the 6% increase over 2019. we are expecting not to finish up around 900 million, it is a record-setting for -- golden week holiday.
7:38 pm
a 50% from 2019, and spending will commit at 110 million u.s. dollars. this are all promising numbers. we don't have recovered international travel, if you look at what malaysia, thailand and south korea were reporting, they're back about 2019 levels. what you see these applications being relatively high, there is not a capacity there. that consumption has turned internally, and we are seeing positive numbers, and getting that from multiple sources. and makes one is increasing restaurant cookies. we are seeing definite consumer spending during golden week holiday. >> we want to know whether that is sustainable in the medium and shorter-term to the end of the year, because it's one thing to say it's golden week, this is one of maybe the two or three times of the year that the chinese consumer will spend up week, and we are in that post-covid bounce. you see the longer trend, given
7:39 pm
the broader slowdown and the woes with the property sector that are so tied to household wealth really creating issues? >> in previous instances where we have seen data where real estate prices have shot up, we did studies many years ago, we actually saw was dark -- reductions in consumer spending as housing was going out, who disposable income is being put into mortgages. outside of durable goods, with slowdowns there, we are seeing more consumers. they spending on hobbies, pets, leisure. but goods are showing a hesitant -- has its to return to pre-pandemic levels. we have to look at individual areas and start to understand what that post-pandemic consumer is going to look like. it's a consumer taking better care of themselves, they are healthier and spending money much differently than their
7:40 pm
parents it, their travel habits are different. they're not going on large tour groups. there much more willing to log into little red book and plan the trip for themselves. we see things like special forces travel being a big buzz word where people are traveling to many destinations very quickly. but overall, spending is up more than the number of trips being booked, spending up to 20% or 50% by the end of golden week. tommy on the back of really good consumption numbers reported by e-commerce in august and september, there is reason for optimism. >> i was going to say, are they spending more online, or are they going places in person and shopping off-line? >> it is to fully. we have usually seen, this is actually a pretty weak week in october for online sales due to
7:41 pm
sales next month, and people are just home, so deliveries can't get there quickly. we did see a bump towards the end of september, and it was things like -- that can be used as gifts. you have seen people go back and visit family, they shopped online at the end of september to bring those gifts back, but there are, the apple iphone 15 watch was very strong. stores with a lot of retail traffic. things are shifting online, but we see in the stores a lot of people livestreaming from inside and more digital innovation from actual off-line retailers taking advantage of that. >> we know how famous chinese consumers are for really liking luxury goods. are you continuing to see that appetite for luxury, or is it more about experiences going out, traveling active --? >> both of those are showing strong areas of growth. luxury is not coming back as
7:42 pm
strong, but it is on its way up. larger ticket items, again, with the iphone luxury goods, that's showing strong resilience, but less automotive and big-ticket and large and durable items. we are seeing good growth, we think that the consumer to be resilient through all of this. unemployment numbers are getting better. i think the savings rates are very high, and consumers will continue to spend for the rest of the year. christ's we have talked about the record -- >> we have talked about the records youth unemployment in china, numbers not being released anymore, is that hurting younger generations? can you see that on the ground? >> there are two things we have to look at. that number was cap delayed by looking at social security. we hired full-time people, we see that.
7:43 pm
with the gig economy that's difficult to find, and we will see that ticketed a differently as the economy changes how it works. we see good spending among the younger generation on things like travel. you have to give credit to the local provinces who have supported businesses for hiring new graduates and putting in subsidies and things like that to -- depending on degrees. youth unemployment will be a trigger problem, because it means a lot to institutions to catch up with the majors and guiding students into the fields that employers want, it's still in increment man, we seek greater demand like lululemon and apple. once these things catch up, it will be a problem that will be as bad as people think. we have always had relatively high youth on the. i have always felt that there needs to be a better match between the programs and more trade schools and matching up those skills with what employers are looking for.
7:44 pm
>> jacob truck, good to get your insights, the ceo at pw eic marketing and technologies. general motors makes a stiff offer to the united auto workers units, whether or not you could break the deadlock next. this is bloomberg. ♪ to find your personal style. endless hardie® siding colors. textures and styles. it's possible. with james hardie™.
7:46 pm
presented its sixth contract talk -- offer to the striking auto workers union. the new package represents progress on key issues. su keenan joins us now with the latest. where are we at in the negotiations? >> the negotiations are ongoing, this latest offer is interesting, because a source tells bloomberg that it is a step forward. it appears to represent progress, but it might not be enough to break from the impasse that has taken the strike into three weeks we are coming up on. the new progress -- package is said to make progress on key issues, and they are ready to willing -- and willing to negotiate in good faith 24/7 to reach an agreement. in other words, they would like to resolve this very quickly. while gm's proposal is a step forward, our source says that it
7:47 pm
may not be enough to resolve things and it really does not surpass what was offered by the rival fort and stelantis. general motors fel to a three year low, not only on the strike, but also on the report of a possible recall on its airbags. the uaw president will hold a facebook live event friday to discuss whether he will expand the strike on all three plants. we do know that the strike -- from someone close to the negotiations, the union has wanted at least 30% in a pay raise, but the automakers have been holding the line at 20% and then for its seventh offer is said to exceed 20%. that is still a significant gap, and many are waiting to see what shawn fain has to say.
7:48 pm
>> we see this spread to other sectors, hospitality workers in vegas might be next. >> this is a 50,000 strong combination of two unions, and if there were to be a strike, it could bring 39 casinos, hotels and resorts on the vegas strip to a standstill. we're talking about the culinary workers union and the bartenders union, which represents 50,000 workers. they have already voted by 90% to allow the unions to call a strike, and it appears on the latest statements back and forth that the union has sent the strongest message possible for the casino industry to settle as soon as possible. they are starting to draw a line. about 40,000 workers are under expired contracts at 22 different properties, and we are talking about mgm grand, little sees -- caesar's, the blusher,
7:49 pm
and they have rejected a second contract extension. a lot of focus on what happens next in vegas. >> so many labor disputes ongoing. we still have the holy would actors strike. any progress? >> it looks like there has been progress in that they did meet in the last 24 hours for a full day of negotiations and will meet again tomorrow, october 6, here in the u.s.. and that is viewed as progress. the fact that they were sharing the picket line with the writers guild who already settled the strike has perhaps, many say, given momentum. until there is a resolution on all of the points, the strike still exists. meanwhile, the wall street journal reports netflix plans to raise prices on its at free services at the end of the strike, and that the u.s. and canada will most likely be the first to be impacted. a lot of impact on that strike
7:50 pm
on the entertainment industry. >> su keenan there with the latest. and the threat of strikes is back on the agenda when it comes to chevron's australian lng plants, workers have discussed whether they should resume stoppages after unions raise campaigns over last month's -- templates over last month's the impaired chevron australia says that it has consistently engaged in efforts to finalize those agreements and will continue to do so. be sure to tune into bloomberg radio to hear more from the days big newsmakers and get in-depth analysis from the daybrak team, broadcasting live from our studio in hong kong. you can listen in via the app on radio plus i'm bloombergradio.com. plenty more ahead, this is bloomberg. ♪ ♪
7:52 pm
7:53 pm
>> good morning. value stocks have been at the center of japanese stock market rallies this year, and they did extremely well during the last quarter. but something seems to have happened late in september when valetocks started to underperform growth stocks. it is very interestingt the traditional value stocks tend to do very well when interest rates e rising. but this happened exactly one u.s. interest rates are rising. for instance, treasury yields have risen more than 40 basis points, but during this time, values have depreciated. when you look at value stocks in japan, for instance, bancshares have been rising along expectations of rising interest rates in japan, trading is another example, they are doing very well after warren buffett bought them and invested in five
7:54 pm
japanese trading houses. there has been a good story about them as well. with those steelmakers, these old economy shares tend to do very well. what happened over the past two weeks, worries of a rally in those valued shares, it is coming to an end. >> value shares are inherently supposed to be cheap, are they still cheat, and what is the outlook then? >> that's a good point. and one major thing here is that value stocks, there are no longer cheap. that is why investors are starting to take profits on them. if you look at technical analysis, the picture does not look very good. some index and value stocks have
7:55 pm
risen more than 20% above their 200 day moving average. this is a point highlighted by a music analyst, when this happens it is usually a very dangerous sign. it means that the market is pricing in many things about these assets, and they have gone a bit too much. last time this happened, the markets stagnated, and in case of different values -- value stocks that have been, they basically stagnated at 406 months after that. >> are reported there witha preview of what we expect from japan value shares as ead towards the open in tokyo and seoul. these are the tourism related
7:56 pm
stockseill be watching, with the talking about japan airlines, korean air, we of course are towards the end of chinas golden week. and early official data suggests that chinese travel demand made a solid bounceback compared with last year. int next hour, and bmg group teus why theyre especially cautious on u.s. equities, and we previewed the ubi's rate decision with a premier economist. the market opens her next. this is bloomberg. ♪
7:57 pm
you're probably not easily persuaded to switch mobile providers for your business. but what if we told you it's possible that comcast business mobile can save you up to 75% a year on your wireless bill versus the big three carriers? have we piqued your interest? you can get two unlimited lines for just $30 each a month. there are no term contracts or line activation fees. and you can bring your own device. oh, and all on the most reliable 5g mobile network nationwide. wireless that works for you. it's not just possible.
8:00 pm
>> this is daybreak asia, counting down to asia's major market opens after we saw u.s. assets studying, stocks and treasuries very little changed as we await the monthly jobs report later on friday. >> this is the waiting game in terms of what we get, we see these soaring bets when it comes to that fed funds future, november contract. a lot of the line for the bond trader at the moment, and we are expecting something of a muted session. >> we have been seeing trading volumes across the day, and very range bndtrading, because as you said, it really is that countdown to the key u.s. jobs number later on payroll, and we will see whether that is a fed rate hike still on the table. the start of trading here fr cash treasuries just have bad steadiness that came through into the session. you see the 10 year ied fairly
8:01 pm
flat as we get underway. we are watching what that means for the fed and for the boj as well, because it has been very differental, butthere's a lot of weakness in the japanese yen even though we see trading off of that mark. we need to know when the boj will be forced to change tact. we had an interview with the former boj policymaker saying that the boj could monitor yied your -- incur control and guidance weeks andelete the pledge to each other if the same. those of the highlights. we will be speaking with mliv on bloomberg television in a couple of hours from now. we will be, getting the outlook for the boj, with waitstaff that as bn coming through. wehae that softness still comig hrough into the waitress growth, and drill wages are other watch for us because those are si in the negative territory, down two point 75%,
8:02 pm
making for a contraction of 2.1% on real cap -- cash earnings here in here. let's look at korea at the start of trade, day to action for dusan robotics, we are looking at a bit of a weaker day, but that stock closed at 96% higher on its trading debut in saw yesterday, shares have been priced at the upper end of the range at 26,000 apiece, and we are dealing with that -- double that at this point of the d. we look at the kospi and its firmer, but we expect range from trading throughout the course of the session. the korean wo fimer against the greenback dollars softness had been the story in wall street on thursday. changing on, one of the factors that is really complicated the outlook for the be ok is the inflation picture and while plays into that in terms of what we are seeing with brent crude coming online, it's up .5%, but below the five dollarer barrel
8:03 pm
mark. and the outlook for trade is picking on that weakening economic backdrop. the asx is just a little bit higher as we get underway, but still, sherry, it's that story of wait and see. >> let's bring in paul campbell, the managing partner at mbmg. good to have you with us. this will decide where treasuries go, where stocks in currencies go, and are we near the peak for rates, and how are you positioning? >> good morning. great questions. we absolutely are near the peak for rates. irrespective of what today's data actually shows. i think that there are so many factors that suggest we are getting to the kind of narrowing portable wedge -- point of a wedge. when you look at the employment data specifically, the qc stated
8:04 pm
at this data, which people don't focus on as much as you three, but the data in the states actually suggests that we are starting to get weakness in the job market, but i think that the real key thing is when we look at job openings, when we look at those as a trend, and will look at other trends, over the last yourself there is a strong indication that we are getting to the end of the face where we were in a situation where openings were starting or exceeding labor markets. we now see weakness in openings, and we are starting to see a labor market where it is reflecting the fact that workers don't have the same sort of luxury in a sense that they had coming out of the pandemic where personal savings were so high. one key point that people are
8:05 pm
kind of ignoring or not giving enough weight to, when they look at the labor market, is the personal savings market, the u.s. physical savings rate has been so weak at 1.5% for the last year or so that is a real sign that if there isa problem, it's actually on tker side, not the emploside. we're starting to see consumer weakness and we think that is a sign that the job situation is nowhere near healthy or strong as the market perceives. >> so far, we have seen the fed continue its narrative of higher for longer, which is led to these huge spreads between jgb yields and treasury yields, and that has us thinking that we might see another run towards 150. what do you think? >> we absolutely could see that, but i think, the important thing
8:06 pm
is, that's not sustainable. i think that the real story from here is that we are going to see a structural, sustained unit compression. we are actually going to see a spread compression between treasuries and the boj. we are going -- we are at that kind of peak in terms of interest rates where whether the market actually wakes up day today, because the data leads him on the way, or whether it takes longer, it could easily be into next year, possibly halfway through next year, before that realization where we are sort of at a false take in markets in terms of them really not appreciating the fact that the pressure from next year onwards is massive downward pressure on u.s. rates. and we're going to see that with japanese rates as well, it's just not the same room for unit
8:07 pm
reduction and rate cuts in japan. i think that the story from now on is by the yen, by jgb's as a weight of doubling that effect. and certainly by treasuries, because this may not be the absolute peak, but it is so close to it. at the trough that we are heading into from here in terms of the u.s. rates is so much lower than when we were at today. and potentially that is very bad news for risk assets, the effect of lower rates may not offset or fully offset the effect of an economic slowdown. it really looks to us like u.s. recession is narrowed in 2024. that is the key driver. >> paul, we are not getting good news out of china, you're talking about this transition to a new economic model. can they do it without a reasonable level of pain? >> i would love to know the
8:08 pm
answer to that question. what we have to be aware of is that the policy challenges are very different in each economy. if the states, the policy challenges are that we have a fed that is completely out of touch with economic reality, and it is still pursuing policies by driving in the rearview mirror and doing things it should have done a year ago, causing massive damage. it's really not going to be able to offset that quickly. that is why recession is due in 2024. in europe, we have a problem where ecp does not have the same scope or control that the fed does. so europe really has the last say. china is really interesting and that in china there is a lot more scope for china to be able to manage fiscal monetary policy in a way that would have a far greater economic impact. they have done damage already to their economy, and they were
8:09 pm
able to change the direction of what happens in the future. the real problem is that it is a different will for china. they are going to have to get used to how -- how policymakers will stimulate when they have problems like the property sector. how can they make it so focused? with think that they can focus on consumption and they can avoid supporting the property sector until that is more manageable. but even things like local government financing, that's been the method that chinese policymakers have used for a long time to actually limit their policy, it has not been distribution from central government, it's been distribution at the local level. and with the well-known and well reported situation with lgf fees, there are challenges. there are real transmission challenges for china that policymakers will face. we think that they will find a way of doing it, but it's going to be talking. expect a positive outcome, but with massive volatility in china. >> i'm glad that we finally
8:10 pm
ended on a positive note. always good to chat with you, the managing partner at mbmg group. let's get you to bow, who is taking a look at movers in the tokyo session. >> we are just 10 minutes underway inoo, seoul and sydney. we will be watching the parent companies of some japanese insurers. what we have is a local media report fre nikkei over in japan saying essentially that the capitalsornment is investigating these companies over alletns of price-fixing. this is theegation that they colluded in bidding for auto insurance for government vehicles and the government may end up warning insurers or excluding them from hitting after it confirms reports of that. that is what we're hearing from local media in japan at the nikkei. let's change on, becauseas i mentioned at the top of the hour, it is that day to trading
8:11 pm
in focus, and we are seeing it turn into positive territory up 2.5%. putting it in context, it did search 100% or thereabouts into the close on the session on thursday. that is its trading day be. dusan robotics, the majority own 90% being dusan. it felt 20% in the session yesterday, and you are seeing that weakness coming through. but dusan robotics is still a -- high on a second day of training. >> the central bank watching its term, the rbis expected to hold hawkish the on friday, even as the cpi remains above target. we will be hearing from our senior asian economist later in the hour. ahead, the u.s. jobs report could be the most important this year when it comes to the influence on fed policy. this is your preview next, this
8:13 pm
fabulous surroundings... but everyone's looking at their phones for financial insights from merrill. is he hailing a ride to the concert hall? no. he's making sure his portfolio and retirement plans work in harmony. they want to adopt a child and build a new home. so they're talking numbers with their merrill adviser. she's not researching her next role. she's learning how to handle market ups and downs without the drama. personalized advice so impressive your money never stops working for you with merrill. a bank of america company.
8:14 pm
8:15 pm
>> we are seeing traders with a muted start in asia, friday -- friday's u.s. jobs report paving the way for the fed and let's take a look at how much interest there is when it comes to bets this november, fed funds future contracts, there are lot -- is a lot riding on this report. how much will this impact whether the fed moves in november? >> at this point, it's a pretty critically important report, we are expecting a bit of slowness at least from the economic aspects that we have so far, but look at some of the earlier employment related data that we have gotten over the past few days. that jolt report was a lot stronger than we expected, diting a lotf resilience in the labor market. there has been discordance with private data may be sharing some weakness, but oval job claims -- that data is really strong. i think that there is this big
8:16 pm
debate over whetherweet one more hike before the end of the year, the fed certainly has plotted something in other dot plot, and that has been a big point of contention that we have seen a lot of policymakers say the narrative rates being-longer, and this latest job report will add to the narrative here and maybe help solidify views we are a month off from that meeting. i think that this will be very closely watched. >> the concern for the higher for longer narrative might lead us into a recession. but the imf is more positive about the chances of a soft landing. >> the imf just released their latest report where they are struggling the idea of look, we think that -- strong on the idea that we can achieve a soft landing and get things under control.
8:17 pm
in that report they did flag major risks, including the slowdown in china and china's growth generally being weaker than we thought at the beginning of the year which continues to be average -- major list. -- rest. nd the imf is having their big annual meeting next week in morocco, these reports kind of capture a snapshot in time of where they see things going. what will be more interesting is what what she says and the rest of the policymakers say in morocco spotted two real-time events, including the recent surge in yields. i am not sure that was captured in this latest imf report. it's a good reminder to check in and see where global policymakers are going once we get into morocco next week. >> now, the san francisco fed president also said that the central bank can keep rates steady as key u.s. indicators from inflation to the labor market cool.
8:18 pm
speaking to bloomberg at the economic club of new york, they weighed in on the instance that -- recent selloff in the bond market. >> the bond market has tightened considerably. 36 basis points since september. that is equivalent to about a rate hike. the need to do additional tightening is not there. from my own perspective, that's what i look at. my job as i see it, our job, is not to tighten and do our part, it's to watch financial conditions. with monetary policy working, we raise the funds rate and it moves through all the other interest rates. if conditions are tight, our work is not necessary, because we don't need to boost it more. >> and rising yields actually does the fed's job for it. would you agree with that? would you sympathize with that sentiment? >> that is how it works.
8:19 pm
one of the things that has happened in the last 90 days and certainly within the last few weeks is that financial markets have collectively seem to take on board a variety of things. one of the things that i heard from many commentators and many of the market outreach -- much of the market outreach i do is that they have a general out -- understanding of keeping rates higher for longer to bring inflation fully back down to 2%. and that recognition, along with all the other factors we could put in that list on why bond yields have risen are affecting the financial conditions and tightening. i see that as a positive outcome that we would have tighter financial conditions because we can then get the job done putting inflation back to rest. >> what is a selloff, something that is welcome from a perspective of the market coming to terms with what the fed has been saying? and why is it disorderly and disruptive on the level that causes concern?
8:20 pm
>> you want an orderly repricing over a disorderly repricing. and so far what we see is this. this is why we watch it carefully. this is how we see them. what is happening is that financial markets are trying to find their footing and the right price for -- after sorting through a lot of information. supply and demand changes in the treasury space. supplies going up and demand going down, especially for foreign buyers. that is one factor to digest. another factor to digest is fed policy and guidance in the s&p. on third factor -- factor to digest is this conversation about whether the new neutral rate has risen. >> the san francisco fed president with lisa abramowicz. we are getting breaking news, hearing from the wall street journal that exxon mobil is closing in on a deal to buy pioneer natural resources. this would be a huge takeover
8:21 pm
which could be worth roughly 60 billion -- $60 million, and a deal could be sealed in the coming days assuming talks don't hit a last-minute snag, according to people familiar with the matter. pioneer natural resources is one of the largest independent e&p companies in the u.s.. it produces exclusively in the permian basin. we hear from the wall street journal that exxon mobil is nearing a deal to buy the company for $60 million and the deal could be sealed in the coming days. what you, on daybreak asia. this is bloomberg. ♪
8:23 pm
8:24 pm
joe biden and xi jinping at the next apec summit in california. the asian government management -- managing editor joins us in hong kong, we have seen more of these high-profile meetings between the two sides. what are we inspecting from a summit? -- expecting from a summit? >> whether or not it will take place is a main question, and we see signs of that with the u.s. preparing for that, china has not confirmed that it's meeting will actually happen, xi jinping skipped the g20 just last month. he indicated he has not traveled much at all. he went to moscow and south africa. if he said -- he shows up, that would be a big deal, showing that the u.s. and china relations are heading in a better direction. as far as breakthroughs of the relationship, that is very
8:25 pm
unlikely at this stage, particular with the election coming up. i can does not have much incentive to give xi jinping much of anything. fred xi jinping -- four xi jinping, he wants to stabilize china. there have been a lot of negative headlines around the s slowdown in particular, we have seen ministers, high-profile ministers, the foreign minister and the defense minister, suddenly disappeared and being kicked out of their roles. aipac is a good opportunity for him to reassure the world that you can't -- china is on the right track and his leadership is stable and sufficient for investors to take a look at china. >> stan, on a separate geopolitical story, here that former president trump may have revealed nuclear submarine
8:26 pm
secrets to australian businessman, what is that about? this is trump holding meetings at mar-a-lago trying to tell visitors some of the information he has had. there are some other examples of this, this would involves nuclear submarines and the u.s. times reporting that an australian businessman heard stuff like how many warheads in nuclear submarine can hold, how close it can get to russian subs, things like that. it really depends what information was shared, how sensitive was it, would that give any other governments some insight or hurt national security. that remains unclear. we have not yet heard from the australian government but we are seeking back. it's another example of what trump is being prosecuted for in the u.s. at the moment.
8:27 pm
>> our asian government managing editor there for us. a few other political stories we are following, bloomberg has learned that donald trump is considering a meeting with house republicans preparing to elect a new speaker. republican sources say that the president -- former president may visit the capital as lawmakers convene to make the pick. steve scalise and jim jordan have announced that they are seeking the speakership. the pentagon's number two official says that the stability of washington and the threat of a government shutdown undermine the u.s. military and support for ukraine. the defense secretary says that options remain for ukraine funding even if the administration -- administration's proposal fails to pass. the latest challenge of aid was -- package of aid was left out of the spending deal breach weekend. president biden has said that he has tried to redirect funds from building order wall unsuccessfully.
8:28 pm
he has announced plans to add 27 kilometers of barriers along the rio grande in texas. biden says he does not believe the border wall works but that congress refused his request to be appropriate wall funding. plenty more to come here on daybreak asia, this is bloomberg. ♪ nice footwork. man, you're lucky, watching live sports never used to be this easy. now you can stream all your games like it's nothing. yes!
8:29 pm
8:31 pm
30 minutes into the session. very modest games thrumming -- coming through. supportive factors. lower treasury yields. a softer dollar coming through. these are helpful to equities in this part of the world. what i want to point out is a low conviction session. the broader benchmark trading volumes on a 20 day moving average. 22% lower than they would typically be. taking a look at the function, you can see that dollar mining blew past the projection over the course of the day. that's the line above that in darker blue. wait and see mode is the story here. that key payrolls number is due later in the session on friday. that will help us understand whether the fed will hike again over the course of the year. one of the more interesting moves we are seeing over the course of the week has been oil.
8:32 pm
big fall back coming through. taking a look at the wti weekly change. we are close to that 9% mark. inventories and focus. supply cuts are still playing out. you have concerns around the impact of a tightening environment for rates and what that means in terms of the global economic backdrop. oil is the one we will be watching over the course of the week. haidi: we are getting statements from the reserve bank of australia at the moment. the review just released saying, a growing number of australian households are in the early stages for financial distress. lenders remain in a solid per session to absorb loan losses if needed. also citing the risk coming from china's property slow down and other imbalances within the economy. most borrowers are well-placed to cope with the further rate
8:33 pm
rise. markets are still putting in pricing in place for at least one more hike from the rba. a major downturn is unlikely to hurt financial stability. 0.1% of loans at current housing prices. lenders are singing the borrowers are proving more resilient than expected. households are well-placed to handle higher rates and higher prices. it comes amidst the most aggressive tightening cycle in more than three decades. all these concerns being stoked about the outlook when it comes to the heavily indebted household situation. that is a bit of an idiosyncratic aspect of the australian property sector that we've been watching very closely. four consecutive pauses for the r.b.i..
8:34 pm
it's not a restrictive level at 4.1%. let's get some analysis now with our --, senior asia economist at bp. so much hinges on the data. whether you talk about the rba, the fed, any other central bank. given that we've seen that resurgence when it comes to energy reflation as well as an uptick in the property market, do you think that the likelihood of more tightening being needed by the rba is a reality? >> well, we do think there continue to be upside risks to inflation and australia. likely, the rba will need to implement at least one more rate hike. that has been our view for the last couple of quarters or so. the rba remains concerned about the health hold sector in australia.
8:35 pm
most of the debt is concentrated in the household sector, linked to mortgages and the real estate bubble. whenever there's is an increase in borrowing costs, households tend to get hit more strongly. they are mindful and they've been dragging their feet. they are lagging other central banks in the region including the reserve bank of new zealand. they will need clear signs that there's a reflation price -- process in the making in order to deliver the last 25 basis point rate hike. what we are observing at this point is upside risks in the months ahead. shery: downside risk coming from china. how do central banks balance these uncertainties as we enter the last leg of the cycle? >> i would say the downside risk
8:36 pm
from china is less clear. we are likely going to see that with the september data next week. what we won't see is a resurgence in chinese demand, further fueling pressures on the oil price. it's mostly a supply narrative for the time being. what will be more key than the strength of the recovery in china is whether or not the u.s. taps into its strategic reserves of oil, whether that's enough to offset some of the supply cuts from opec. i think that's where we are going to head in the months ahead. personally, the recent pullback in oil places is mostly a technical correction. we should continue to see pressures with oil prices converging toward that level of 100 u.s. dollars per barrel. under that level is not a problem for asia. we need to start rethinking the
8:37 pm
outlook for next year. shery: how much upside do you expect in consumption from china's golden week holidays? >> we don't yet have a full picture in terms of the consumption numbers. we have started to see indications that tourism and travel was better than expected. we do expect to see consumption for services remain very strong through the golden week. i don't think that it's going to exert the upside pressure on gdp that many analysts have been hoping for. personally, although it should be a driver of sentiment, it's not going to be enough to offset the downside risks around u.s. 10 year yields. of course, i don't think it will entail any upside revisions to the gdp forecast across the board. tter demand priced into the
8:38 pm
forecast. haidi: india is a net oil importer. we are expecting the r.b.i. to come out with its rate decision. what are the risks in that economy, when we also have that country being hit by the el niño phenomenon and extreme weather affecting food prices as well? >> let me go over what the market is getting right and what the market is getting wrong about indian inflation. surely there has been a cooling in the cyclical pressures that drove that surge in price inflation over the summer. disruptions to crop production and crops that come for 50% of the cpi basket in india. we are starting to see that coming off. i would like to warn investors that even though prices are cooling, we have extremely volatile prices.
8:39 pm
onions, ginger, tomato above 100% year on year. not out of the woods yet. there are signs that things are cooling. what markets are not getting right is energy. we have seen fuel prices return back to positive territory in august. we feel that will accelerate in the months of head which compounded with this narrative of rising oil prices, one of the largest net energy importers in the world. that should fuel some of that headline cpi numbers in the fourth quarter of the year. it will be in interplay. is the decline in crude prices going to be enough to's offset the increase in energy prices? risks are so so to -- still tilted to the upside. r.b.i. is forced to deliver one last hike in the december meeting. for this week, it's mostly priced in.
8:40 pm
there will be no interest rate hikes. shery: good to have you with us. let's delve into one economic issue that we are watching very closely in the u.s.. some of the country's best-known brands are declaring bankruptcy after years of sheep are wing. the feds inflation fight has pushed up interest rates and this had made the price of debt more expensive. sonali basak tells us what this means for the economy and which industries are most at risk. sonali: companies are filing for bankruptcy at the fastest race -- rate since 2020. the record searches at the root of the issue. global companies have borrowed more than $500 billion of investment grade debt. the rate hike began in 2022. the vast majority of this was heaped onto u.s. balance sheets. despite the high borrowing costs , debt continues to grow. >> interest rates have
8:41 pm
increased. sonali: blue-chip names saw their borrowing costs rise by more than doubled to an average of 5.6%. junk rated companies were paying 8.7%. >> the problem is that this is a little bit by design. they want to slow down inflation. interest rates were cap higher for longer than a lot of people on wall street expected. sonali: this higher rate environment has created amount to him -- a mountain of distressed debt. this sort of debt has jumped around 400%. >> for consumer facing companies and those upstream supplying them, that will impact businesses and those can be difficult, particularly if they have a lot of space. the appetite for risk has declined a bit. there's less capital available to the companies, particularly that those are growing. sonali: from the 1950's to its
8:42 pm
high point in the 80's, interest rates have always fluctuated with the times. the near zero rates the last 15 years following the great financial crisis have hardly been the norm. the problem is, when companies aren't put off by higher rates and keep borrowing, it's a sign that the fed still has more work to do to bring down inflation which increases the odds of someone getting caught off sides and left to take the hit. shery: see our past interviews on our interactive tv function. there you can also dive into end of the securities or bloomberg functions that we talk about. also become part of the conversation by sending us instant messages during our shows. check it out at tv . this is bloomberg. ♪ that first time you take a step back. i made that. with your very own online store. i sold that.
8:43 pm
8:44 pm
shery: the sec is asking a judge to force elon musk to answer his latest questions about his purchase of twitter shares before he bought the entire social media platform. for more, let's bring in vonnie quinn. so what is the sec intent here? >> they just want elon musk to testify. he didn't turn up for a testimony last month in san francisco. his lawyer said, he's testified
8:45 pm
before and has given you everything that he needs to give to. the sec doesn't agree. very rarely does the sec try to get a judge to enforce a subpoena. in this case, the reason is so interesting is because this makes it public that the sec is investigating elon musk and his buying up of 9.2% of twitter which is now called x. disclosing it to investors in april of 2022. the sec wants to know exactly what happened and win. in the united states, there are strict rules about all of this. if somebody buys more than four -- 5% of a public company, they must disclose it within 10 days. the sec is trying to get to the bottom of whether elon musk did so and whether he could be accused of trying to defraud investors. in another case, a u.s. judge has found that a class-action can go ahead to try to test the
8:46 pm
hypothesis that musk did try to defraud investors by not letting them know about the buying up of this 9.2% stake. that case is going to be ongoing. the judge has said it that -- said that it can be heard. haidi: what is the desired outcome here? >> honestly, it's the idea that if there's market manipulation that went down, that they discover exactly what happened. for musk, the desired outcome would be for everything to go away. he's in the crosshairs of the sec constantly these days. he's already paid a settlement to the sec back in his funding secured tweeted days. at that point, he ended up having to pay the sec $20 million. he had to pay individuals in a class-action lawsuit as well. some money when it came to test the losses. he wants all of this to go to
8:47 pm
way. he doesn't want to appear and the sec is not letting him get away with it. he hadn't been going to testify. two days before the testimony, he complained about the location. the sec said, we will move into texas which is where you legally reside. at that point musk found other things to complain about and never appeared for the testimony in the end. haidi: when it comes to the business itself of x, it seems that profitability is insight according to the ceo. >> they have been speaking to debtholders just today. she was on a call to debtholders, reinvigorating the idea that acts will become profitable again. she said, if you take out the servicing of the debt which is a very massive parenthesis, because the debt is massive. she said, if you take out that, the company's cash flow positive.
8:48 pm
she said that advertisers are returning but with smaller budgets than before. this was a private call to debtholders but we did have sources that told us what was set on the call. she said roughly 90% of the company's top 100 advertisers have returned and that's up from 75% in june, when she joined as the ceo. she put in the cot -- caveat that it is not at historic levels. i want to point out that the most recent headline in this is that x will test re-tiers of service. it's becoming a little bit like netflix and so on. it's testing out the idea that people will pay the premium plan which costs 7.99. haidi: vonnie quinn there. taking a look at our story that we are watching closely.
8:49 pm
the ftx co-founder has taken a stand at a trial, saying immediately that he and his former childhood friend and m.i.t. roommate committed fraud. he's cooperating with prosecutors. his testimony promises to be among the most powerful in the government case against bankman-fried who has pleaded not guilty. also watching the state of these asian markets as we head into the rest of the friday session. broadly flat. a little downside when it comes to the nikkei. we are seeing value shares for japan flashing some of those warning signs. the strong rally that we've seen this year has run past its peak. we will see from -- some stagnation from here. we are also watching the boj, set to change guidance this month. elsewhere, upside. coming up next, china's golden
8:50 pm
8:52 pm
from the chinese economy. certainly the golden week data adding more to that story of growth stabilization and initial recovery. a very low status in the second quarter. haidi: the initial data from the golden holiday. let's take a look. are there any encouraging signs? what do we expect, catch up or a catch down? >> it's most likely the catch down. that's because of the global market turmoil that we are seeing this week. with treasury yields much higher now than a week ago, that means when the china markets open, the yield gap between the u.s. treasuries and chinese
8:53 pm
government bonds will be a much higher as well. that will certainly weigh on the yuan and also add pressure to capital outflows. that's not good news for the chinese stock market either. so as your previous guest was saying, yes the golden week holiday data or spending data has been promising. if you look at the hong kong market, traders are not trading on that kind of optimism. they were really focused on this macro uncertainty that's engulfing the global markets right now. shery: we saw turnover in hong kong stocks falling to the lowest in years. was that because of golden week? what is it telling us? >> yes. largely, i would say it's because of the closure of the market. that also means the closure of the stock connect between hong kong and china. it also reflects that traders are standing on the sidelines
8:54 pm
because of the economic slowdown and lack of fresh stimulus or catalyst for another like higher. if you look at the turnover for thursday on the hong kong mainboard, it dropped to $6 billion. that's the lowest since late 2019. overall if you look at the hong kong market, it dropped 24% from a january peak. you see a lot of pessimism out there. that's why traders actually choose not to trade. haidi: what is going to get people off the sidelines? and beyond that, more positive. we've seen over 200 incremental measures from the government to shore up economic growth. investors are not feeling like this. they are seeing effective policy. >> yeah. the main thing is still the property market. yes, the spending data has been good. hotel, movie, restaurant spending.
8:55 pm
we haven't seen that official data on property sales. i've heard's from economist that the sales have not been very good. they've been disappointing. if you look at the september sales for china's property market, the improvements was quite marginal. i think that was really the main thing. it is such a big component for china's economy. 25%. if we are not seeing consumers coming back to buy properties, all the related sectors will continue to suffer. shery: a preview of what to expect when the chinese mainland markets open next week. we do have markets opening in hong kong. these are some of the stocks we are watching. we continue to watch chinese e-commerce shares after news that consumer spending on the on pliant -- online platform surged during golden week.
8:56 pm
the financial times reporting that belgian intelligence has been monitoring ellie palma's main europe logistics hub for possible interference. take a look at how asian markets are trading at the market. a little bit muted. the nikkei is unchanged. real estate leading the gains. energy and tech stocks leading the decline. we are seeing really not much change when it comes to the japanese stock market. the kospi giving ground for the first time in three sessions. this at a time when we've seen u.s. stocks ending really unchanged. we are still waiting for the monthly jobs report. this is bloomberg. ♪
8:58 pm
uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today. the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network. hi, i'm katie, i've lost 110 pounds
8:59 pm
on golo in just over a year. learn more today. golo is different than other programs i had been on because i was specifically looking for something that helped with insulin resistance. i had had conversations with my physician indicating that that was probably an issue that i was facing and making it more difficult for me to sustain weight loss. golo has been more sustainable. i can fit it into family life, i can make meals that the whole family will enjoy. it just works in everyday life as a mom. it's an amazing thing when you show generosity
9:00 pm
of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. we have been able to reach over 100 million people impacted and affected, and at risk of hiv. the rocket fund takes all of the work that we're doing, all over the world, and looks at the most effective ways, to get resources to them, to get services to them. the idea that we have saved five million people's lives, it's overwhelming. it's everything.
64 Views
IN COLLECTIONS
Bloomberg TV Television Archive Television Archive News Search ServiceUploaded by TV Archive on