Speaker 1: Good morning.
Speaker 2: I'm Nathan Hager and I'm Karen Moscow. Here are the
Speaker 2: stories we're following today.
Speaker 3: The latest fear centers on one of China's largest private
Speaker 3: wealth managers. It has now missed payments on multiple high
Speaker 3: yield products. Bloomberg Daybreak Asia anchor Brian Curtis has the
Speaker 3: details from Hong Kong.
Speaker 4: Three firms said they failed to receive payments on products
Speaker 4: issued by companies linked to Junjer Enterprise Group. The group
Speaker 4: manages about one hundred and forty billion dollars worth of assets.
Speaker 4: The missed payments are likely to raise concerns over China's
Speaker 4: trust industry. Firms there pool household savings to offer loans
Speaker 4: and to invest in real estate stocks, as well as
Speaker 4: bonds and commodities. The trust industry was once seen as safe,
Speaker 4: but is now a growing concern in On Kong. Brian
Speaker 4: Curtis Bloomberg.
Speaker 2: Daybreak, All right, Brian, thank you. On. One of China's
Speaker 2: largest property developers remains in the hot seat this morning.
Speaker 2: Shares of Country Garden are falling for a seventh straight day.
Speaker 2: The crisis at the company is deepening after units halted
Speaker 2: trading of local bonds. The situation at Country Garden underscores
Speaker 2: the challenges China faces and containing a property debt crisis.
Speaker 3: And concerns on growth in China are wearing their ugly
Speaker 3: head as well, Karen. On Friday, we learned that Chinese
Speaker 3: banks extended the smallest amount of monthly loans since two
Speaker 3: thousand and nine. That news rippled through markets overnight. Bloomberg's
Speaker 3: Jill Deesis in Hong Kong says the data paint a
Speaker 3: grim picture.
Speaker 5: It's that loan data that was absolutely horrific for China.
Speaker 5: You know, talk to a few analysts about this. Had
Speaker 5: some suggestion that really it's that household data as well.
Speaker 5: I mean, net household loans were incredibly poor, indicating that
Speaker 5: a lot of people are spending time repaying their mortgages.
Speaker 5: I mean, it's just another indicator along with that really
Speaker 5: bad deflation data that we had last week, that right
Speaker 5: now demand is incredibly weak in this economy, and you
Speaker 5: have to see how that's going to move forward.
Speaker 3: Bloomberg's Jill Deesis reports there's also hedge fund news weighing
Speaker 3: on China this morning. The number of active hedge funds
Speaker 3: focused on the country has slipped for the first time
Speaker 3: in more than ten years. Only five new funds launched
Speaker 3: in the first half of this year, while eighteen were liquidated.
Speaker 2: Well Staying in China now Nathan Tesla rolling out a
Speaker 2: new round of price cuts in the country. The automaker
Speaker 2: reduce the price of the top end versions of its
Speaker 2: model y Suv. The Tesla cuts scent Chinese auto stocks
Speaker 2: tumbling on concerns of another price.
Speaker 3: War with Tesla's owner. Elon Musk, is making news on
Speaker 3: another front this morning, Karen. There has been talk of
Speaker 3: a possible cage fight between Musk and Mark Zuckerberg, but
Speaker 3: now the Meta platform ceo says it's time to move on.
Speaker 3: Bloomberg's Ed Baxter has the story.
Speaker 6: The Meta ceo seems seriously up to his neck in disgust,
Speaker 6: leading to the question was this ever more than just
Speaker 6: an Elon Musk trolling expedition quote. If Elon ever gets
Speaker 6: serious about a real date and official event, he knows
Speaker 6: how to reach me. Otherwise, time to move on. He
Speaker 6: says he will focus on competing with people who take
Speaker 6: the sport seriously. Musk has not said much since he
Speaker 6: reported he had neck issues in San Francisco. I'm at Baxter,
Speaker 6: Bloomberg Daybreak.
Speaker 2: All right, ed, thank you. What we want to update
Speaker 2: you now on those devastating wildfires in Hawaii. They're now
Speaker 2: the deadliest in the United States in more than one
Speaker 2: hundred years. At least ninety six people have died on
Speaker 2: the island of Maui, and that figure is expected to
Speaker 2: rise as rescue efforts continue. Hawaii Governor Josh Green also
Speaker 2: says monetary losses are estimated to be in the billions
Speaker 2: of dollars.
Speaker 7: Twenty two hundred structures have been destroyed or damaged. Eighty
Speaker 7: six percent are residential. In Kula, five hundred and forty
Speaker 7: four structures have been exposed and ninety six percent were residential.
Speaker 7: The losses approached six billion dollars in estimate.
Speaker 2: In Hawaii, Governor Josh Green says the cause of the
Speaker 2: wildfires remains under investigation.
Speaker 3: And while officials continue to tally the economic impact of
Speaker 3: those fires. Karen, we're getting a new call on the
Speaker 3: US economy from Goldman Sachs. The firm predicts the Fed
Speaker 3: will start lowering interest rates by the end of June.
Speaker 3: Bloomberg Markets reporter Valerie titel More.
Speaker 8: Now, the interesting thing about this Goldman note is their
Speaker 8: call for cuts isn't necessarily alongside a bearish view on
Speaker 8: US economic growth. It's all just about the FED wanting
Speaker 8: to normalize rates because inflation is falling back to target, right.
Speaker 8: And I think what prompted this call from Goldman was
Speaker 8: that week inflation print we got last week where we
Speaker 8: saw the month on month figures really just being a
Speaker 8: second month in a row in line with the Fed's
Speaker 8: target only rising point two percent month on month, which
Speaker 8: you be annualize that it gets us to the Fed's
Speaker 8: two percent goal.
Speaker 3: And Bloemberg Stalary Titel says Goldman sees the FED cutting
Speaker 3: rates by a quarter percent next summer.
Speaker 2: Nathan Shares a US Steal surging more than twenty two
Speaker 2: percent this morning. The company rejecting a takeover offer from
Speaker 2: rival Cleveland Cliffs, and we'll begin to rig you of
Speaker 2: its strategic options instead. He offers value US steal at
Speaker 2: about seven and a quarter billion dollars.
Speaker 3: On the flip side, Karen shares of AMC Entertainment are
Speaker 3: down more than twenty five percent. The movie theater operators
Speaker 3: one quart approval for advised stock conversion plan. At the
Speaker 3: same time, AMC preferred shares ticker APE are up more
Speaker 3: than thirty percent.
Speaker 2: It's time now for a look at some of the
Speaker 2: other stories making news around the world. For that, we're
Speaker 2: joined by Bloomberg's Amy Morris Samy. Good morning, Good morning, Kieren.
Speaker 9: Atlanta is bracing for some legal chaos this week. The
Speaker 9: district attorney is expected to present a case against Donald
Speaker 9: Trump to the grand jury as soon as this week.
Speaker 9: Several witnesses have been subpoened, including former Lieutenant Governor Jeff
Speaker 9: Duncan and independent and journalist George Chety. They both say
Speaker 9: they will testify, and Gabe Sterling is a top deputy
Speaker 9: with the Secretary of State.
Speaker 2: If I am called, when I am called, I will
Speaker 2: go and do it before I will tell the truth.
Speaker 9: Sterling says, the truth is the state counted the ballots
Speaker 9: three times and the end result is Donald Trump did
Speaker 9: not win in Georgia. He is accused of pressuring state
Speaker 9: officials into reversing the election results. Streets around the courthouse
Speaker 9: in Fulton County are closed. Armed Sheriff's deputies are patrolling
Speaker 9: the area around the clock, and security measures are being
Speaker 9: taken at the Georgia State capital as well. The top
Speaker 9: Democrat on the House Oversight Committee. Meanwhile, says he wants
Speaker 9: Congress to stay out of the Justice Department's business.
Speaker 2: This is why we have a justice system.
Speaker 10: Let's just let them do their job.
Speaker 9: He was speaking on ABC's This Week. Maryland Congressman Jamie
Speaker 9: Raskin referring to David Weiss being named special counsel and
Speaker 9: the Hunter Biden case. Raskin criticized Republicans who called for
Speaker 9: a special prosecutor and then complained when Attorney General Merrit
Speaker 9: Garland named Weiss. The Trump appointed US Attorney for Delaware
Speaker 9: was already in charge of the case before a plea
Speaker 9: de plea deal fell apart. A political science professor says
Speaker 9: mainstream support in the US for political violence is actually
Speaker 9: on the rise.
Speaker 2: It's not just.
Speaker 11: About oath keepers proud boys.
Speaker 3: It is now breaching into the mainstream, and we're seeing
Speaker 3: the consequences of that.
Speaker 9: University of Chicago professor Robert Pate tells CBS's Face the
Speaker 9: Nation he conducted a survey in which nearly fifty million
Speaker 9: Americans believe the use of force is justified regarding a
Speaker 9: second Trump presidency. President Biden is leading an administration wide
Speaker 9: effort to mark the first anniversary of the Inflation Reduction Act.
Speaker 9: The President will travel to Wisconsin tomorrow and host an
Speaker 9: event at the White House on Wednesday. Democrats are counting
Speaker 9: on the landmark Climate and Drug pricing bill to fuel
Speaker 9: the president's re election. Bid Global News twenty four hours
Speaker 9: a day, powered by more than twenty seven hundred journalists
Speaker 9: and analysts in more than one hundred twenty countries. I'm
Speaker 9: Amy Morris, and this is Bloomberg.
Speaker 4: Karen.
Speaker 2: All right, Amy, thank you. It is five oh nine
Speaker 2: on Wall Street Time now for the Bloomberg Sports Update.
Speaker 2: For now we bring in Dan Schwartzman.
Speaker 1: Dan, good morning, Good morning, Karen.
Speaker 12: The Dodgers have now won eight straight games.
Speaker 13: They knock off the Rockies eight to three, locally, the
Speaker 13: Red Sox doubling up the Tigers six to three, the
Speaker 13: Nationals sneaking past the open A's eight to seven. It
Speaker 13: was the Yankees losing to the Marlins eight to seven,
Speaker 13: New York leading that game in fact seven to two
Speaker 13: in the eighth inning. Meanwhile, as the Giant slippm pass
Speaker 13: Rangers in ten innings three to two, Oriels in ten
Speaker 13: knocking off the Marlins five to three. Cedric Mullins hitting
Speaker 13: a game winning two run home run in that tenth inning,
Speaker 13: and it was the Mets holding on to knock off
Speaker 13: the Braves seven to six. NFL preseason Action four teams
Speaker 13: getting their preseason schedules underway, the Chiefs losing to the
Speaker 13: Saints in New Orleans twenty six to twenty four, as
Speaker 13: the Raiders all over the forty nine ers at home
Speaker 13: thirty four to seven.
Speaker 12: At the FedEx Saint Jude Championship in Memphis, Tennessee, it
Speaker 12: was Lucas Glover winning it in a playoff.
Speaker 9: Got a chance, oh sends the edge.
Speaker 6: And Lucas Glover goes pick to back including they open
Speaker 6: a leg for the FedEx Cup playoffs.
Speaker 12: That's courtesy of the Golf Channel. Glover wins it on
Speaker 12: the first hole of the playoff over Patrick Can'tley. Both
Speaker 12: finish at fifteen under Rory McElroy, Tommy Fleetwood both at
Speaker 12: fourteen under Taylor Moore comes in at twelve under. Jalen
Speaker 12: Brunson goes nine for nine from the field. He leaves
Speaker 12: a US Men's World Cup Basketball team to exhibition win
Speaker 12: over Spain, and by the way, he's the number one
Speaker 12: team in the world ninety eight to eighty eight. That's
Speaker 12: your Bloomberg Sports Update.
Speaker 13: I'm Dan Schwartzman.
Speaker 11: From coast to coast, from New York to San Francisco,
Speaker 11: Boston to Washington, DC, nationwide on SYRIASXAM, the Bloomberg Business
Speaker 11: app in Bloomberg dot Com. This is Bloomberg Daybreak. Good morning.
Speaker 3: I'm Nathan Hager. We're watching stocks move modestly higher this morning,
Speaker 3: with China making moves to deal with its worsening property slump,
Speaker 3: but concerns about the Chinese economy on a number of
Speaker 3: fronts could spark concern for investors. This morning, let's get
Speaker 3: you set up for the trading week ahead. We're joined
Speaker 3: by Dennis Gardman, now former publisher of the Gartment Letter,
Speaker 3: now chairman of the University of Akron Endowment Investment Committee. Dennis,
Speaker 3: it's good to speak with you this morning. We got
Speaker 3: the news late last week that private loans out of
Speaker 3: China had dropped to a more than decade low. Now
Speaker 3: we've got renewed concerns about the property sector. This word
Speaker 3: of missed payments by one of China's largest private wealth managers.
Speaker 3: Is there a read through for the slump that we're
Speaker 3: seeing in China to the broader global market.
Speaker 10: One would think that there would be one after another.
Speaker 10: We're seeing one more problem after another. The trusts, the
Speaker 10: commercial property area in China, the banks are having problems,
Speaker 10: the individuals seem to be having problems. It's one problem
Speaker 10: after another, and I think that this should have some
Speaker 10: believe through here in the United States. It's been about
Speaker 10: a month and a month, almost a month and a
Speaker 10: half since we've seen a new high in the Nasdaq.
Speaker 10: It's been about a month since we've seen a new
Speaker 10: high in the Dow. It's been about a month and
Speaker 10: a half since we've seen a new high in the
Speaker 10: S and P. We seem to be breaking trend lines
Speaker 10: along the way Timeshall tell I've been relatively bearish of
Speaker 10: the stock markets here in the United States and globally
Speaker 10: for quite some period of time. We'll see if that
Speaker 10: becomes if that comes to fruition. But I think that
Speaker 10: the Chinese problems are now on the front pages of
Speaker 10: the newspapers, on the front desk, so everybody of every
Speaker 10: investment manager, and I think it's going to become far
Speaker 10: more important over the course of the next several weeks.
Speaker 10: So yes, I think this is an important circumstance.
Speaker 3: It made the front pages late last week when President
Speaker 3: Biden was at a fundraiser he called the Chinese economy
Speaker 3: a ticking time bomb. How would you characterize the Chinese
Speaker 3: economy right now?
Speaker 10: I think that's probably a little bit too fighting, But
Speaker 10: nonetheless it is disconcerting. Let's use that term rather than
Speaker 10: a time bomb. It's disconcerting to see one problem after
Speaker 10: another come to the front pages of the newspapers.
Speaker 3: Time shall tell, well, what could the potential read through
Speaker 3: look like if the situation does get worse in China,
Speaker 3: if we don't see the kind of stimulus that it
Speaker 3: seems like the market is pushing for from the People's
Speaker 3: Bank of China, how could that redound to the US market?
Speaker 10: I think it's I think it shall be deleterious to
Speaker 10: the US market, no question about it. I doubt it's
Speaker 10: going to be terribly deleterious, but I think it'll be.
Speaker 10: I think it takes some of the bullish enthusiasm. I
Speaker 10: my own expectations that it takes a great good deal
Speaker 10: of the bullish enthusiasm out of the US market. That
Speaker 10: will be talk about the United States moving to easing
Speaker 10: monetary policy. That'll come to the front pages of the
Speaker 10: newspapers again. I think that that's ill advised. I think
Speaker 10: it's going to I think the Fed has made it
Speaker 10: a bundally clear that it shall be a long time
Speaker 10: into the future, probably late into twenty twenty four before
Speaker 10: any sign of easing the Fed funds RATEED comes to fruition.
Speaker 10: So I think it'll I think it'll red down to
Speaker 10: the United States. I think it redouns deletediously, but not
Speaker 10: dramatically so well.
Speaker 3: We did get a headline last night from an economist
Speaker 3: to Goldman Sachs pricing in the first rate cut from
Speaker 3: the Federal Reserve by the end of June of next year.
Speaker 3: It sounds like you think that might be a little
Speaker 3: too soon.
Speaker 10: I think that's a little too soon. I think it'll
Speaker 10: be late into twenty twenty four at the best. The
Speaker 10: Fed has been a bundally clear, Mister Powla has been
Speaker 10: a bunch clear that it's higher for longer and for
Speaker 10: a long, much longer period of time. I think it's
Speaker 10: late into twenty twenty four before we see any sign
Speaker 10: of a lower Fed funds rate. But I think the
Speaker 10: five and a half percent is probably as high as
Speaker 10: they want the Fed Funds rate to go. I think
Speaker 10: we've probably seen our last increase, but it'll be a
Speaker 10: long time before we see a decrease in the Fed
Speaker 10: funds rate.
Speaker 3: Well, where do you see bond yields going from here?
Speaker 3: If that scenario pans out. We've got the ten year
Speaker 3: right around four point one five. It's been hovering around
Speaker 3: four for quite some time. We heard Bill Gross late
Speaker 3: last week calling for four and a half. Is that possible?
Speaker 10: It's possible, I think it's highly unlikely. I think the
Speaker 10: most important thing is that we're going to see a
Speaker 10: d inverting of the yield curve. The twos tens have
Speaker 10: gotten over one hundred basis points now, I think it's
Speaker 10: about seventy two seventy four to seventy five basis points,
Speaker 10: and I think over the course of the next year
Speaker 10: or so, we see a dis inversion of the curve,
Speaker 10: but not a dramatic one. I think you're going to
Speaker 10: take the twos ten. It's probably closer to twenty five
Speaker 10: to fifty basis points over the course of the next
Speaker 10: six months to a year, and it's that rates at
Speaker 10: the back end come up rather than rates at the
Speaker 10: front end coming lower.
Speaker 3: Does that mean that you're thinking that the FED could
Speaker 3: pull off a soft landing?
Speaker 10: That is the question, isn't it. I think there's a
Speaker 10: greater probability that it will be a less than harsh landing.
Speaker 10: Let's put it that way. If it's a soft landing,
Speaker 10: the congratulations to the FED. It's a very difficult task.
Speaker 10: I think it'll be less than a hard landing, Let's
Speaker 10: put it that way.
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