Speaker 1: Good morning. I'm Abe Morris and I'm Karen Moscow. Here
Speaker 1: are the stories we're following today.
Speaker 2: Financial turmoil in Asia has been the focus all week long.
Speaker 2: Against that backdrop, we have a high profile meeting with
Speaker 2: Asian leaders at Camp David. Today, President Biden meets the
Speaker 2: heads of state from Japan and South Korea for a
Speaker 2: summit on global tensions. Bloomberg Daybreak Asia anchor Ed Bexter
Speaker 2: has that story.
Speaker 3: It is the Camp David Trilateral Summit, President Joe Biden
Speaker 3: hosting Prime Minister Fumio Kushia and President yunsuk Yuole Brigadier
Speaker 3: General Patrick Ryder speaking for the White House as very
Speaker 3: important event.
Speaker 4: What we expect to see to be significant outcomes that
Speaker 4: will cement our trilateral cooperation going forward. The deliverables that
Speaker 4: you'll see coming out of that will take that relationship
Speaker 4: to a new level.
Speaker 3: North Korea was a centerpiece of yesterday's UN Security Council
Speaker 3: meeting regarding human rights. I'm at Baxter Bloomberg Daybreak.
Speaker 1: All right, and thanks, And we have a politic we'll
Speaker 1: note this morning involving in Donald Trump. The former president
Speaker 1: has canceled a news conference plan for Monday, he had
Speaker 1: wanted to use the event to promote unfounded claims that
Speaker 1: the twenty twenty election was stolen. Trump says his lawyers
Speaker 1: urged him not to do so. Instead, the former president
Speaker 1: says he will make his case in legal filings.
Speaker 2: Moving overseas now, two China economic concerns in that country
Speaker 2: are still weighing on markets. China's state owned property developers
Speaker 2: this morning warning of widespread losses. Eighteen out of thirty
Speaker 2: eight builders listed in Hong Kong and China reported preliminary
Speaker 2: losses in the first half, and this morning, China's Evergrand
Speaker 2: Group filed for Chapter fifteen bankruptcy protection in New York.
Speaker 2: Dan Moss is a Bloomberg opinion columnist based in Singapore.
Speaker 5: We know the property sector is in trouble. If we're
Speaker 5: getting some quantifiable numbers from these private sector filings, then
Speaker 5: that's good because in otherwise China is closing off access
Speaker 5: to economic data. You'll recall early this Weekday said they
Speaker 5: would suspend publication of youth unemployment data. Just so happens
Speaker 5: that that data showed most recently a very high level
Speaker 5: of youth unemployment. Would they have suspended it if it
Speaker 5: was showing a very low level.
Speaker 2: Bloomberg opinion columnist Dan Moss says China's flattering or faltering,
Speaker 2: rather faltering economic growth and housing crisis are fueling concerns
Speaker 2: of contagion.
Speaker 1: And in the week of those concerns, Amy, China's central
Speaker 1: Bank is stepping of support for the yuan. The PBOC
Speaker 1: said it's daily reference rate for the currency at the
Speaker 1: strongest level ever. That's compared to estimates in a Bloomberg survey.
Speaker 1: We're also told Chinese authorities or telling state banks to
Speaker 1: ramp up intervention in the currency market.
Speaker 2: Staying in Asia now, we got fresh inflation data from
Speaker 2: Japan over night and for the first time in thirty years,
Speaker 2: price growth in services hit two percent in July. The
Speaker 2: acceleration is a long awaited development for the Bank of
Speaker 2: Japan as it looks for sustainable inflation before normalizing policy.
Speaker 1: Also happening in Japan today amy visit from the world's
Speaker 1: richest man, Elon Musk is in the country for his
Speaker 1: first known visit in nine years. The CEO of Teslas
Speaker 1: SpaceX and X formerly Twitter, arrived yesterday. It's his second
Speaker 1: trip to Asia this year. He was in China earlier,
Speaker 1: where he met with government officials and visited Tesla's Shanghai factory.
Speaker 2: And we have company news back here in the US,
Speaker 2: Goldman Sachs appears to be under pressure from the Federal Reserve.
Speaker 2: That's according to sources who say the regulatory scrutiny has
Speaker 2: Goldman going on a hiring spree. Bloomberg's Doug Krisner has
Speaker 2: those details.
Speaker 6: We're told Goldman is enlisting several hundred new staffers to
Speaker 6: help address concerns from US banking regulators, although it's unclear
Speaker 6: what deficiencies the pharma seeking to address. Last year, Goldman's
Speaker 6: effort to build out a new consumer bank was said
Speaker 6: to have set off questions from the FED, but the
Speaker 6: plan has largely been abandoned. Some managers blamed the failure
Speaker 6: for inviting regulatory attention, but to be fair, regulators routinely
Speaker 6: question large financial firms. Goldman executives privately described pressure from
Speaker 6: the FED over the past year.
Speaker 7: In New York.
Speaker 6: I'm Doug Krisner, Bloomberg Daybreak.
Speaker 1: All right, Doug, thanks. Severe weather also in focus this morning.
Speaker 1: We're seeing a powerful hurricane headed toward the southwestern US,
Speaker 1: and torrential rain could hit starting as soon as today,
Speaker 1: Bloomberg meteorologist Rob Carolyn has the latest on the storm
Speaker 1: that's building in the Pacific Ocean.
Speaker 8: Rob, Karen and Amy. Hurricane Hillary continues to intensify off
Speaker 8: the southwestern side of Baja California. The system is going
Speaker 8: to be moving northward along the western coast of Baja California.
Speaker 8: It will continue to intensify over the next twenty four hours,
Speaker 8: then as it gets over cooler water, it will weaken.
Speaker 8: Each track is going to bring gusty winds and some
Speaker 8: extremely heavy rain to portions of the southwestern California. Many
Speaker 8: areas in California as far north as Utah are under
Speaker 8: flesh flood watches and these will persist into the weekend.
Speaker 8: It looks like the rain continues to spread northward through
Speaker 8: the West early next week. I'm Rob Carolyn, Bloomberg daybreak, All.
Speaker 9: Right, Rob, thank you.
Speaker 2: Elsewhere in the South, we are seeing more spikes in
Speaker 2: Texas power prices. Spottalick tricity prices sarched six thousand percent
Speaker 2: as the state grid faces some of the tightest conditions
Speaker 2: so far this summer. Real time prices on the grid
Speaker 2: jumped to nearly five thousand dollars in megawatt hour, up
Speaker 2: from roughly seventy five dollars the day before. The Electric
Speaker 2: Reliability Council of Texas or ERCOT, is currently asking consumers
Speaker 2: to cut usage. If reserves stay narrow, it could trigger
Speaker 2: a so called Level one emergency that allows ARKOTT to
Speaker 2: call on more backup supplies.
Speaker 8: Thank you, Karen.
Speaker 2: Time now for a look at some of the other
Speaker 2: stories making news in New York and around the world.
Speaker 2: For that were joined by Bloomberg's Michael bar Good morning, Michael.
Speaker 7: Good morning. Amy, the head of the Mali Emergency Management
Speaker 7: Agency has resigned after facing criticism for not activating disaster
Speaker 7: sirens during last week's deadly wildfires that killed at least
Speaker 7: one hundred eleven people. The County of Maui announced that
Speaker 7: Herman and Daya cited unspecified health reasons for leaving his
Speaker 7: post on Wednesday, and day I defended the decision not
Speaker 7: to sound sirens, saying officials were afraid it would have
Speaker 7: prompted people to flee toward the mountains or inland, or
Speaker 7: into the flames. Meanwhile, FEMA spokesman John mills and Malvey
Speaker 7: says that the agency is taking a very somber and
Speaker 7: respectful approach to the tragedy.
Speaker 10: One of our Urban Search and Rescue Task Force leaders
Speaker 10: said this was the worst disaster he's ever seen, and
Speaker 10: that's coming from someone and the team that was involved
Speaker 10: in nine to eleven.
Speaker 7: Mills also said that FEMA is coordinating federal support with
Speaker 7: the state and is in no way taking over. The
Speaker 7: Justice Department is seeking thirty three years in prison for
Speaker 7: Enrique Tarrio, the former Proud Boys leader convicted of seditious
Speaker 7: conspiracy in the January sixth attack on the US Capitol.
Speaker 7: Tario and three lieutenants were convicted by a Washington jury
Speaker 7: in May of conspiring to block the transfer of presidential
Speaker 7: power in the twenty twenty election. A Mississippi judge has
Speaker 7: cited police errors in declaring a mis trial for two
Speaker 7: white men accused of chasing and shooting at a black
Speaker 7: FedEx employee who was making a delivery. Brandon Case and
Speaker 7: his father, Gregory Case, are charged with attempted first degree murder, conspiracy,
Speaker 7: and shooting into the vehicle driven by de Monterio Gibson.
Speaker 7: In January of twenty twenty two, Judge David Strong said
Speaker 7: he made the decision because of errors by a Brook
Speaker 7: Haven Police Department detective Parents are being urged to put
Speaker 7: childhood vaccinations on their back to school checklist. New York
Speaker 7: City Health Commissioner doctor Ashun Vassen says that he has
Speaker 7: focused on disease prevention among asylum seekers children entering schools.
Speaker 11: We're screening everyone and offering vaccination to everyone. The Department
Speaker 11: of Homeland Security and the CDC are offering COVID are
Speaker 11: giving COVID vaccinations at the southern border in New York.
Speaker 7: All childhood of vaccines, including shots from measles, polio, and
Speaker 7: chicken pot are required by state law. Global News twenty
Speaker 7: four hours a day, powered by more than the twenty
Speaker 7: seven hundred journalist and analysts over one hundred twenty countries.
Speaker 7: Him Michael Barr, this is Bloomberg Gaming.
Speaker 2: All right, Thank you, Michael. It's five ten on Wall
Speaker 2: Street time now for our Bloomberg Sports update, and for
Speaker 2: that we bring in John's Dash Hour.
Speaker 9: Thanks Amy. A year ago, the Yankees finished in first place.
Speaker 7: The Red Sox.
Speaker 9: Finished last, twenty one games behind. Different story. Now Yanks
Speaker 9: are in the cellar, three games behind Boston. The two
Speaker 9: arch rivals start a weekend series at the stadium Yanks,
Speaker 9: losers of their last five. They're under five hundred and
Speaker 9: they list their starting pitcher tonight as undecided. Mets at
Speaker 9: Jose Kintona on the Mount in Saint Louis, he got
Speaker 9: his first win as a Met four to two over
Speaker 9: the Cardinals, who liked the Mets a playoff team a
Speaker 9: year ago, but having a very rough twenty twenty three
Speaker 9: Dodgers playoff team every year. Last night, they got a
Speaker 9: home run from Austin Barnes, eighth in in his first
Speaker 9: form of the season. They topped Milwaukee won the nupping.
Speaker 9: The Dodgers have won eleven games in a row. Preseason
Speaker 9: football in Philadelphia, Eagles fans booed their new backup quarterback
Speaker 9: Marcus Mariota, who struggled in the game with Cleveland that
Speaker 9: ended with the unusual final score of eighteen to eighteen.
Speaker 9: Two games at MetLife this weekend Giants and Panthers Tonight,
Speaker 9: Daniel Jones might play. If he doesn't, Giants coach Brian
Speaker 9: Dabole says he definitely will next week against the Jets,
Speaker 9: who will again not play. Aaron Rodgers tomorrow against Tampa
Speaker 9: Bay Rodgers as a new teammate that earned running back
Speaker 9: Dalvin Cook who used to go against Rogers twice a
Speaker 9: year while with Minnesota being.
Speaker 12: On the other side of that for the last six years.
Speaker 12: You know, I couldn't be another side no more. So
Speaker 12: it was it like ben I got the chance to
Speaker 12: go join them and you know they'll help him win
Speaker 12: win again. You know that was that was a big
Speaker 12: thing to come come out here.
Speaker 9: Another running back, the Bengals, Joe Mixon found not guilty
Speaker 9: in a road rage case. Eating back to January, BMW
Speaker 9: Golf Damn Day outside Chicago co leaders after the opening round,
Speaker 9: Rory McElroy and the recent British Open champ Brian Harmer
Speaker 9: in built.
Speaker 7: Shot sixty five.
Speaker 9: John Stashower Bloomberg Sports.
Speaker 13: From coast to coast, from New York to San Francisco,
Speaker 13: Boston to Washington, DC, nationwide on sirisxam, the Bloomberg Business
Speaker 13: app in Bloomberg dot Com.
Speaker 7: This is Bloomberg Daybreak.
Speaker 3: Thank good Friday morning.
Speaker 2: I'm Amy mor As. We continue to follow the economic
Speaker 2: developments in China as state owned property developers are warning
Speaker 2: of widespread losses, the PBOC stepping up at support for
Speaker 2: the yuon. We are joined now by Bloomberg macro strategist
Speaker 2: Mark Kudmore, who's going to sort it all out for us. Mark,
Speaker 2: Thanks for taking the time. What is the risk or
Speaker 2: is there a risk of contagion?
Speaker 14: Good morning, Amy. Absolutely there is some risk of contagent,
Speaker 14: but very important to understand exactly what mess that contagion
Speaker 14: is going to come. So the economic impact of China's
Speaker 14: deceleration is really important for the rest of the world.
Speaker 14: We've got to remember it is the world's largest trading
Speaker 14: partner that is not the US, so that is really
Speaker 14: important for the growth story in many other countries. However,
Speaker 14: the financial market impact is much less. Not only are
Speaker 14: Chinese financial markets already been trading a structurally broken story
Speaker 14: for some time, but foreign money foreign participation is extremely
Speaker 14: low already. People who wanted to get out of the
Speaker 14: China story have long got out over the last couple
Speaker 14: of years, and so therefore the direct transmission from financial
Speaker 14: market pain isn't as direct. So it'll continge way and
Speaker 14: sentiment because the economic story, but that's more of a
Speaker 14: slow moving one and harder to interpret, rather than we're
Speaker 14: going to get sudden capitulation losses in other markets because
Speaker 14: of China's equity selling off.
Speaker 2: But it seems like there's some aggression here from the
Speaker 2: PBOC stepping into support the currency wild cutting interest rates
Speaker 2: that well, I know what I think, But what would
Speaker 2: you make of those latest moves?
Speaker 14: Actually? Look, I know it sounds very counterintuitive to both
Speaker 14: be kind of easing monetary policy on the right side
Speaker 14: and yet be defending the currency when you think that
Speaker 14: a lower currency is what the country needs. However, it
Speaker 14: does kind of make sense because while they want a
Speaker 14: weaker uan, it's all about managing the pace of that.
Speaker 14: What they cannot afford in a market where there are
Speaker 14: no animal spirits left, where the dissentiment from both companies
Speaker 14: spending and consumers is completely broken, is they can't afford
Speaker 14: a panic of capital oute flows like they had seven
Speaker 14: or eight years ago when they let kind of yuan
Speaker 14: deppreciate too quickly. So therefore they want to manage it.
Speaker 14: And actually, what's been really interesting is over the last
Speaker 14: few weeks the yuan has been one of the world's
Speaker 14: stronger currencies because it's during a massive dollar squeeze higher
Speaker 14: and because the PBOC has managed it against the dollar.
Speaker 14: In fact, the yuan has out before many other currencies.
Speaker 14: So if you see the yuan against the Sea FET's basket,
Speaker 14: for example, it has generally gone higher for most last
Speaker 14: week's actually gone quite sharply higher for last week's until
Speaker 14: the last couple of days where it fell back you
Speaker 14: get a bit again. So what they'll probably do is
Speaker 14: that when the dollar turns softer again, they just won't
Speaker 14: let the uan appreciate as great rate. So actually what
Speaker 14: you see if the yuan depreciates on a trade weighted
Speaker 14: basis much more when the dollar is falling, even though
Speaker 14: you don't see that in the dollar, you on exchange rate.
Speaker 2: Let's just focus then, specifically on shine and not so
Speaker 2: much contagion. But are they at risk of losing their
Speaker 2: standing as one of the strongest GDPs in the world,
Speaker 2: I mean, are they Are they slipping?
Speaker 14: No, they're not, none of us. I mean it's the
Speaker 14: world's second largest economy and it's going to say the
Speaker 14: world's secd largest economy for a long time to come.
Speaker 14: And they're so far clearly ahead of the other opposition.
Speaker 14: And we've got to remember that. You know, even though
Speaker 14: they're going to disappoint on growth this year, we're talking
Speaker 14: about growth of like maybe four to four and a
Speaker 14: half percent. It's growth that most developed markets would dream about,
Speaker 14: you know. Any In fact, while people are talking about
Speaker 14: the official level being down to just below five percent,
Speaker 14: even the unofficial levels that people think might be actually lower,
Speaker 14: you know, three and a half four percent. Again, they'll
Speaker 14: actually be closing the gap on the US on an
Speaker 14: economic basis over the coming years. The difference is that
Speaker 14: the currency evaluation has changed in that so China's share
Speaker 14: of global GDP webs the US did shrink last year,
Speaker 14: but that was much more due to the currency impact
Speaker 14: because we're in a stronger dollar environment. However, most of
Speaker 14: the world SAMs to the consensus that we've now had
Speaker 14: a strong dollar for many of years, and we've seem
Speaker 14: to be at the start of a new longer term
Speaker 14: dollar down wave, and that will probably actually help China
Speaker 14: regain share. So no, China's place the second largest economy
Speaker 14: is not in the threat at all now.
Speaker 2: Investors are clearly focused on what's going on with China
Speaker 2: and the economic situation there. I'm curious is that where
Speaker 2: we should be focusing What are you focusing on?
Speaker 14: Yeah, look, it's a good question. Look, I think the
Speaker 14: China story is massive and I'm based in Singapore and
Speaker 14: I'm based in the region, and so we can't get
Speaker 14: beyond it every day. But I do still think that
Speaker 14: the bigger story and the thing that's trading off this month,
Speaker 14: we've got to remember that there's been a couple of
Speaker 14: dynamics this month, and one is the higher yield story
Speaker 14: that's into the stronger dollar story and the China you know, negativity,
Speaker 14: and they're the things we kind of come in day
Speaker 14: after day in August. But in fact, Chinese markets aren't
Speaker 14: doing any worse than most global markets over this month.
Speaker 13: Right.
Speaker 14: We're generally seeing equities elsewhere so oft from particular in
Speaker 14: the US, and that is much more about the US
Speaker 14: yield story. And the backdrop here is that I think
Speaker 14: people are coming to the terms of the fact that hey,
Speaker 14: maybe the inflation story isn't kind of one as easily,
Speaker 14: and maybe that yes, we've we've we've contain inflation to
Speaker 14: some extent, but at a way too high level, that
Speaker 14: the labor markets toil still too strong, inflation is going
Speaker 14: to prove too sticky, and that there we are starting
Speaker 14: to kind of come around to the idea that we
Speaker 14: might really be in a new higher rates world so,
Speaker 14: and I think that's an interesting backdrop, especially with Jackson
Speaker 14: Hole next week. I am personally very much in the
Speaker 14: camp that we have not seen the peak in the yields.
Speaker 14: Like I've been long term kind of bond bear, and
Speaker 14: I remain a long term structural bond bear, even despite
Speaker 14: the yield rise we've seen over the last couple of years.
Speaker 14: What I will say is in the very short term,
Speaker 14: I kind of think we're already priced for relatively hawkers
Speaker 14: Jackson Hole. So I'm less excited in the short term
Speaker 14: dynamics of bond selling off much further from here in
Speaker 14: the short term, but I do think structurally yields are
Speaker 14: going higher.
Speaker 2: You're listening to Bloomberg Daybreak today, your morning brief on
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