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 drop in stocks comes on more disappointing economic news
Speaker 3: out of China, and industry survey shows China's services sector
Speaker 3: side its slowest growth this year in August. Meanwhile, China's
Speaker 3: Country Garden Holdings has averted default on its dollar debt
Speaker 3: by paying coupons on two bonds within their grace periods.
Speaker 3: We get more on the troubled developer from Bloomberg's China
Speaker 3: Credit editor Kevin Kingsbury in Hong Kong.
Speaker 4: Certainly it takes a worry off the table right now
Speaker 4: that they've made these twenty two point five million dollars
Speaker 4: worth of payments. Comes on top of extending a yuan
Speaker 4: bond by three years over the weekend and making a
Speaker 4: separate payment of about six hundred thousand dollars on a
Speaker 4: offshore bond as well. So it kind of shows that
Speaker 4: we're even talking about a payment of six hundred thousand dollars.
Speaker 4: It would sound like peanuts, but it just shows just
Speaker 4: how much worry there has been about Country Garden, that
Speaker 4: each and every payment has gotten some increased scrutiny as
Speaker 4: to whether or not this copany He's going to be
Speaker 4: able to survive and be able to get through this
Speaker 4: rough patch here without any defaults.
Speaker 3: Bloomberg's Kevin Kingsbury says the payments by country guard in
Speaker 3: time as it tries to sort through one hundred and
Speaker 3: eighty seven billion dollars of liabilities.
Speaker 2: Meanwhile, Nathan Bloomberg Economics says China may never eclipse the
Speaker 2: US as the world's biggest economy. Therefore, cash shows China's
Speaker 2: GDP may briefly surpass that of America in twenty forty,
Speaker 2: but even then it will happen by only a small
Speaker 2: margin before falling back behind. Before the pandemic, the expectation
Speaker 2: was that China would be the leading economy by the
Speaker 2: start of the next decade.
Speaker 3: In Stink with the Economy, Karen, one major Wall Street
Speaker 3: firm thinks the US may avoid contraction. Let's get that
Speaker 3: story from Bloomberg's John Tucker.
Speaker 5: Good Morning John, and Nathan Goldman. Sachs has grow more
Speaker 5: confident the US ken Skirterer recession. They've lowered the odds
Speaker 5: to fifteen percent from twenty percent. So why the change?
Speaker 5: The firm's chief economist Yan Hansi says, among other things,
Speaker 5: solid job growth will boost wages. At the same time,
Speaker 5: he says cooling inflation may keep the Federal Reserve from
Speaker 5: raising industrates any further. Hatzi says a September rate hike
Speaker 5: by the Fed is off the table, and the hurdle
Speaker 5: for a November hike is significant. Goldvin's fifteen percent recession
Speaker 5: asked of it well below a Bloomberg consensus of sixty percent.
Speaker 5: The firm is also more optimistic than peers and US
Speaker 5: economic growth, predicting an average two percent pace through the
Speaker 5: end of next year.
Speaker 2: In New York.
Speaker 5: I'm John Tucker, Bloomberg Radio.
Speaker 2: All right, John, Thanks well. Another call out of Goldman
Speaker 2: this morning, this one on the equity side. Strategists led
Speaker 2: by Peter Oppenheimer say AI is not a bubble, saying
Speaker 2: the rally can continue. Goldman names eleven US stocks as
Speaker 2: near term beneficiaries of the AI revolution, including Nvidia, Microsoft,
Speaker 2: and Meta.
Speaker 3: Well, Karen A big paydays in store for bankers working
Speaker 3: in one of the year's most highly anticipated IPOs, sources
Speaker 3: tell Bloomberg Investment banks working on arm holdings initial public
Speaker 3: offering are set to share upwards of one hundred million
Speaker 3: dollars in fees from the chip designers listing. The soft
Speaker 3: bank owned ARM is poised to pay the banks two
Speaker 3: percent the five billion dollars that's seeking to raise in
Speaker 3: the IPO.
Speaker 2: Well, Nathan, we may have a takeover in the works.
Speaker 2: Bloomberg News has learned private equity firm Toma Bravo as
Speaker 2: in advanced talks to my health records software company next
Speaker 2: Gen Healthcare. Next Gen, which rose six percent on Friday,
Speaker 2: up another ten percent in early trading.
Speaker 3: Two stocks being added to the S and P five
Speaker 3: hundred are also on the move, Karen. Both Blackstone and
Speaker 3: Airbnb are up more than five percent. The two will
Speaker 3: replace Lincoln National and newer brands prior to the start
Speaker 3: of trading on September eighteenth.
Speaker 2: Well, let's turn to Washington now, Nathan, and some news
Speaker 2: on Jill Biden's health. The White House says the First
Speaker 2: Lady tested positive for COVID nineteen yesterday. The President was
Speaker 2: tested last night and came back negative. President Biden is
Speaker 2: set to attend the G twenty summit in India this weekend.
Speaker 2: The White House is not saying whether the First Lady's
Speaker 2: diagnosis will affect his travel plans well.
Speaker 3: Meantime, Karen Elon Musk is blaming the US Anti Defamation
Speaker 3: League for the slump in advertising revenue at his social
Speaker 3: platform x. We get that story from Bloomberg's at Backster.
Speaker 6: Ads sales are still down sixty percent, Musk posting, primarily
Speaker 6: due to pressure on advertisers mounted by ADL. He in
Speaker 6: a series of posts says it has been quote trying
Speaker 6: to kill the platform since he bought it, falsely accusing
Speaker 6: it and him of being antisemitic. Musk says it is
Speaker 6: a pro free speech platform, but against antisemitism of any kind.
Speaker 6: He says he is as well. He says legal action
Speaker 6: is an option in San Francisco. I'm at Baxter Bloomberg Radio.
Speaker 2: All righted, thanks, So we now turn to labor unrest overseas.
Speaker 2: Chevron's liquefied natural gas workers in Australia are threatening two
Speaker 2: weeks of twenty four hour rolling outages at two major
Speaker 2: export plans. It's an escalation of a dispute that is
Speaker 2: threatening global fuel supply. Be caught up with Colin Parfitt,
Speaker 2: Chevron's vice president of Midstream, at the Gas Tech conference
Speaker 2: in Singapore.
Speaker 7: With committee find a solution there, and we want to
Speaker 7: find solution that's a win win winn. We want to
Speaker 7: find it.
Speaker 4: It's a win for chev On, a wind farm employees
Speaker 4: and a win for the gas markets.
Speaker 2: And Chevron's Colin Purfect says the company has not canceled
Speaker 2: or delayed any LNG shipments as a result of the
Speaker 2: strength threat. All right, Nathan, thanks in time now for
Speaker 2: a look at some of the other stories making news
Speaker 2: around the world. For that, we're joined by Bloomberg's Amy
Speaker 2: Morris Samy, Good morning.
Speaker 8: Good morning, Karen. Congress returns to Capitol Hill today after
Speaker 8: its summer recess, facing a possible government shutdown in just
Speaker 8: a few geeks. Paul Helke is a professor of practice
Speaker 8: at the O'Neill School of Public and Environmental Affairs. He's
Speaker 8: also the founding director of the Civic Leaders Learning Center
Speaker 8: at Indiana University.
Speaker 9: In order to avoid a government shutdown, we need to
Speaker 9: have our elected representatives start thinking about the common good
Speaker 9: and majority rule and the importance of the budget rather
Speaker 9: than fighting out there their fringe partisan agendas.
Speaker 8: Professor Helmke says current partisan rancor in Washington makes it
Speaker 8: highly likely that there will be no continuing resolution, much
Speaker 8: less a full budget. A heat wave is expected to
Speaker 8: bring one hundred degree temperatures to tens of millions of
Speaker 8: Americans this week. It is likely to be between the
Speaker 8: lower and high nineties today in places like Philadelphia, Washington,
Speaker 8: d C, New York City, and Chicago. DC and Baltimore
Speaker 8: are under hot weather emergency declarations through Thursday, and a
Speaker 8: heat advisory is in place in New York City through
Speaker 8: Wednesday night. It's been about seventeen months since Republican governors
Speaker 8: from Texas and Arizona started sending thousands of migrants to
Speaker 8: d C, Los Angeles and New York City, along with
Speaker 8: other cities and protest of President Biden's border policies. The
Speaker 8: Washington Polish reports there are more questions now about short
Speaker 8: term shelter as those buses keep coming. SAMU First Response
Speaker 8: says DC has received about sixty bus loads of a
Speaker 8: islum seekers since May, raising the total number of buses
Speaker 8: sent to the district in the past year to two
Speaker 8: hundred and thirty nine. In New York, State Attorney General
Speaker 8: Letitia James is calling for coordination between federal, state, and
Speaker 8: city officials. New York Governor Kathy Hochel and New York
Speaker 8: City Mayor Eric Adams have been exchanging letters in recent weeks,
Speaker 8: but Letitia James says that doesn't help.
Speaker 10: The letters, the accusations, the recriminations don't serve anyone. And
Speaker 10: what we really need is someone to coordinate, and so
Speaker 10: I would urge everyone to get together in a room
Speaker 10: or on a zoom call to appoint a a migrant
Speaker 10: and czar.
Speaker 8: More than one hundred thousand migrants have arrived in New
Speaker 8: York City over the past year, with more than half
Speaker 8: of them overwhelming the city's shelter system. Global News twenty
Speaker 8: four hours a day, powered by more than twenty seven
Speaker 8: hundred journalists and analysts in more than one hundred twenty countries.
Speaker 8: I'm Amy Morris. This is Bloomberg Karen.
Speaker 2: All right, Amy, thank you. It's time now for the
Speaker 2: Bloomberg Sports some day. For that, we bring in John
Speaker 2: stash Hour, John Karen.
Speaker 11: Was a busy week one of college football, the entire
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Speaker 11: mostly no upsets. There was a big one Saturday when
Speaker 11: Colorado won at TCU. There was also an upset last night.
Speaker 4: Leonard from the Shotgun takes a step, quick look to
Speaker 4: the leftoks to Ron straight ahead, trying to break a tackle.
Speaker 6: He does.
Speaker 4: He's got a first out.
Speaker 7: In More thirty twenty leader touchdown. Goodness, how the Blue
Speaker 7: Devils have.
Speaker 11: The lead their field sports the Call. Duke upset ninth
Speaker 11: Frank Clemson twenty eight to seven. It's the Blue Devils
Speaker 11: first win over a team ranked in top ten since
Speaker 11: nineteen eighty nine. US Open saw top seed Carlos Alcarez
Speaker 11: advanced to the quarterfinals of straight set victory. Alex Zaverev
Speaker 11: won his match over Yannick Sinner at one forty am
Speaker 11: New York Times. The match went four hours, forty one minutes.
Speaker 11: Two upset so the women's side third seed is Jess Pagoula,
Speaker 11: trounced by a fellow American, Madison t sixty one sixty
Speaker 11: three and as Javor lost to Jiang Qinaan two and
Speaker 11: four baseball saw Baltimore beat the Angels six to three.
Speaker 11: The Red Sox won seven to three at Tampa Bay.
Speaker 11: They had lost their last thirteen games at Tampa. The
Speaker 11: Giants were shout out by the Cubs five and up.
Speaker 11: In his cup, pitcher Justin Streitch Steel improved as sixteen
Speaker 11: and three eight innings loud only two hit struck apps
Speaker 11: twelve the A's loss at Toronto six to five in tenanings. Also,
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Speaker 12: From coast to coast, from New York to San Francisco,
Speaker 12: Boston to Washington, DC, nationwide on Syrias XAM, the Bloomberg
Speaker 12: Business app in Bloomberg dot Com. This is Bloomberg Daybreak.
Speaker 3: Good morning, I'm Nathan Hager, and we are heading into
Speaker 3: a holiday shortened trading week with losses for stocks pretty
Speaker 3: much across the board around the world. Yet more weak
Speaker 3: economic data out of China, this time in the services sector,
Speaker 3: is putting a damper on sentiment after a week that
Speaker 3: saw the S and P five hundred rise to and
Speaker 3: a half percent on encouraging economic data for the US.
Speaker 3: So let's get this trading week started. We're joined by
Speaker 3: laur Calvacina, head of US Equity strategy at RBC Capital Markets. Laurie,
Speaker 3: it's great to speak with you. As always. What does
Speaker 3: ongoing weakness in China mean for investments here in the US?
Speaker 7: Hit Well, thanks for having me as always, and look,
Speaker 7: I think there are two issues. Whenever we see you know,
Speaker 7: sort of weakness in China is one, what does that
Speaker 7: mean for US equity markets from a flow perspective. China
Speaker 7: was one of the hot trades to start the year.
Speaker 7: There was a lot of negative views on the US
Speaker 7: and we've really seen that reverse, you know, in recent months. Unfortunately,
Speaker 7: we're not getting those inplos and the US equity funds,
Speaker 7: especially on the large cash side right now, so we'll
Speaker 7: need to watch that. But secondly, what are the skill
Speaker 7: of our effects into the US economy? And right now
Speaker 7: the vote seems to be that they'll be minimal. On
Speaker 7: the US economic outlook seems to be improving if you
Speaker 7: look at some of the calls that are being made
Speaker 7: around the street today, while the view on China and
Speaker 7: even Europe frankly seems to be softening. So I think
Speaker 7: those are really the two you know, kind of cross
Speaker 7: currents that are somewhat conflicting that we have to keep
Speaker 7: an eye on.
Speaker 3: No, I would be curious to get your call your
Speaker 3: team at RBC are thinking with particularly now that we've
Speaker 3: gotten this call from Goldman Sachs that the chance for
Speaker 3: a recession in the US is now down to what
Speaker 3: fifteen percent? Are you that bullish?
Speaker 7: Well, you know, it's interesting we watch you know, we
Speaker 7: watched the Goldman call. They're certainly quite prolific and vocal,
Speaker 7: and I think they've had a you know, sort of
Speaker 7: a good sense of where things are headed in terms
Speaker 7: of broader sentiments. But we've also been watching very closely
Speaker 7: that consensus data point tracked by Bloomberg, which has been
Speaker 7: sort of stubbornly stuck at the sixty percent level and
Speaker 7: not moving even though the news flow around the economic
Speaker 7: discussion has been improving. So I'm not quite sure what's
Speaker 7: going on with that ladder data set. But I do
Speaker 7: think this call today is interesting. You know, I have
Speaker 7: the luxury of being the US equity strategist, not in
Speaker 7: as so I make calls on the market as opposed
Speaker 7: to that GDP forecast directly. But what I do tell
Speaker 7: clients is it feels to me. And you know, this
Speaker 7: is something we were saying early last year that this
Speaker 7: really smells more like twenty fifteen twenty sixteen, where the
Speaker 7: economic damage may not quite end up being a recession,
Speaker 7: maybe something you know, sort of a cousin to a recession.
Speaker 7: But regardless, you know, my job is to call the
Speaker 7: equity markets, and I think we've priced in a recession
Speaker 7: last October. Whether or not we get one still remains
Speaker 7: to be seen, but I think we've paid the price
Speaker 7: for one that we may not even end up getting.
Speaker 3: So where do you see the momentum for stocks at
Speaker 3: this point? With the with the way that the economic
Speaker 3: backdrop looks right now.
Speaker 7: So I think that stocks are at an interesting point.
Speaker 7: You know, we've noted, similar to some of my other
Speaker 7: competitors on the street, that sentiment has gotten a little
Speaker 7: bit stretched over the summer. That's something we haven't liked.
Speaker 7: The appeal of stocks relative to bonds has been worsening,
Speaker 7: and that has actually been showing up in the flows,
Speaker 7: which is a little bit of a concern to me.
Speaker 7: Actually heading into sort of a seasonally tough period of
Speaker 7: the year. The last five or six years, August through
Speaker 7: October has not been a friend to the US equity market.
Speaker 7: That being said, the economic narrative does seem to be
Speaker 7: improving a little bit at the margin. I think that
Speaker 7: the conference season that we're heading into now post Labor
Speaker 7: Day has historically proven very, very valuable to investors because
Speaker 7: we can get answers to some extent to questions on
Speaker 7: whether or not those spillover effects from China will end
Speaker 7: up influencing the US. We know from the last reporting
Speaker 7: season and really the one before it that whatever this is, economically,
Speaker 7: it is starting. We are starting to see pockets of
Speaker 7: weakness in certain parts of the consumer, certain parts of
Speaker 7: the corporate psyche. How bad that is really getting, I
Speaker 7: think is going to be a key topic in this
Speaker 7: conference season the next few weeks.
Speaker 3: And one aspect of the market that you watch pretty
Speaker 3: closely is the impact of politics. We do have the
Speaker 3: prospect of a government shutdown at the end of this month.
Speaker 3: Is that something that you're concerned about. Is that something
Speaker 3: that you're warning your clients about.
Speaker 7: You know, we've been talking a little bit more about
Speaker 7: the election than the government shutdown, and frankly, we've been
Speaker 7: getting more questions on the election next year than the
Speaker 7: government shutdown. But I do think, you know, we are
Speaker 7: starting to hear more rumblanks about this potential shutdown just
Speaker 7: over the last week or so, and in a context
Speaker 7: in which you know, you sort of enter into again
Speaker 7: this seasonally kind of tough period for markets. It's definitely
Speaker 7: something to keep an eye on. I do think that
Speaker 7: equity investors tend to think when these issues come up
Speaker 7: that it will go down to the wire, it will
Speaker 7: get resolved at the end. So you really, you know,
Speaker 7: probably won't see it take too much of a hit
Speaker 7: until you really get close, you know, to that particular
Speaker 7: you know, date of stress. But it is, you know,
Speaker 7: it is. It is definitely a concern.
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