Good morning.
I'm Richard Saloma and I'm Doug Krisner. Here are the stories we're following today.
And it's all about also, you know what that job's report is likely to do in the US should provide us with just a snapshot of where the US economy is, which is of course vital for setting monetary policy. Getting that data in a little under fourteen and a half hours, Bloomberg's Michael McKee has a preview.
Barring a surprise, the payrolls report is forecast to show a continuing slowdown in hiring during August. Well, this week's Jolts report showed the number of openings remains elevated. Monthly jobs creation has been trending lower. Companies aren't laying off workers, but they are cutting back on hiring as they wait to see whether recession forecasts come true. FED officials also want to see if unemployment starts to rise. So far, it's remained near historic lows, even given the rise in
interest rates. And of course, top of mind for everyone will be average hourly earnings. Thursday's incomes report suggested wage game means are finally cooling as demand for workers eases. Michael McKee Bloomberg Daybreak Asia.
We go to China next to where the government is cutting down payments for home buyers and reducing mortgage rates. The story from Bloomberg's Juan Wong in Hong Kong.
The nationwide minimum down payment will be twenty percent for first time buyers and thirty percent for second time purchasers. The mortgage rate cuts will be negotiated between banks and customers. Both policies will go into effect on September twenty fifth. This is China's latest attempt to curup the country's property crisis. The announcements came as data showed China's two year property
slum worsened. This month's sales by the country's one hundred largest developers dropped thirty four percent from a year earlier, according to the China Real Estate Information Corporation. That was the biggest drop in more than a year. In Hong Kong, joined Wong Bloomberg Day Brigaisia.
And indeed staying with property and developers, a group of Country Garden creditors are seeking to declare a default on a Yuang bond. Let's get to this from Bloomberg's a Bonnie Out who has more from Hong Kong.
Investors have proposed a note be declared in default because of a recent downgrade. That's according to a filing to the Shanghai Stock Exchange's privatest Closure platform. The investors say that effectively hold ten and a half percent of a yuan bond effectively due September fourth, but at least fifty percent support is needed for each proposal being vaulted. Holders of the yuan bond had until yesterday to fault on the proposal to call it default. Moody's has downgraded a
country Garden three notches. As more pressure piles on the distressed developer in Hong Kong. I'm Bonnie Olt Bloomberg Daybreak Asia.
Meanwhile, the China evergrahamd said it couldn't make payments for investment products this once due to a liquidity crunch. Its restructuring process has been in limber since it defaulted a couple of years ago.
Well, US treasure Secretary of Janet Yellen is heading to India, but China is also very much on her mind. The story from Bloomberg's Denise Pellegrini.
Yellen will go to Delhi this second week in September joining President Biden at the G twenty summit. This is her fourth visit to India in less than a year. She'll be meeting her Indian counterparts and seeking to strengthen bilateral economic ties. The gathering will also offer another opportunity to engage with Chinese officials at a time of mounting concern over the potential ripple effect of China's economic slowdown
and financial strains among the property developers. President Biden says he hopes China's President Chi Jimping shows up, but sources tell Bloomberg that Chi Jimping will not be attending. Among the other issues on the US agenda for New Delhi, rallying support for Ukraine and for sanctions on Russia, and also bolstering the resources of multilateral development banks. Denise Pellegrini, Bloomberg day Break Asia.
We're hearing that All the Holdings is preparing to set a price range for its us IPO before embarking on an investor roadshow next week. The ship designer considering pricing its shares on the thirteenth of September, and it wants to begin trading the next day yes to promote the offering.
It's expected to come after the Labor Day holiday, and we're told arm is aiming to raise between five and seven billion dollars with this offering, and the valuation then could end up in the range of between fifty and sixty billion dollars.
Broadcom is one of the world's five largest semiconductor manufacturers, and today the company gave a disappointing forecast for the current quarter. Of the story from Bloomberg's Charlie Pellett.
It signals that demand for electronic components remains sluggish. Broadcom said revenue will be about nine point twenty seven billion dollars in the fiscal fourth quarter. That compares with an average Wall Street estimate of nine point twenty eight billion dollars, with some analysts predicting as much as nine point eight billion. The outlook shows that Broadcom is mired in a broad spending slowdown, even as the artificial intelligence boom fuels demand
and pockets of the industry in New York. Charlie Pellett Boomberg Daybreak Asia.
So the employment report for August due tomorrow morning, eight thirty am Walls Street Time. We told you about that a moment ago. Word today that US small businesses reported fewer unfilled positions in the month of August. This is
data from the National Federation of Independent Business. It shows unfilled positions are now at their lowest level since February twenty twenty one, and the NFIB also reported fewer small business owners raising worker compensation well at the same time today, job cuts, that's the survey from Challenger Gray in Christmas. Overall cuts totaled more than seventy five thousand in the month of August, obviously a number amplified by the bankruptcy
of Yellow Corporation. That August Employment data due tomorrow and today. A survey from twenty two v Research finds sixty percent of investors are expecting a softer than estimated number on job growth. Let's get to Global News next. Former President Donald Trump pleads not guilty in Georgia. Dan Schwartzman is here, Danny.
Doug, get your popcorn ready, because this is going to be something to behold. Trump has waived his right to an in person arraignment, sparing him from having to appear in court on September sixth, and that would have been broadcast live. Trump led not guilty to state charges he conspired to overturn the twenty twenty presidential election results. Excuse me. The seventy seven year old is one of nineteen defendants indicted by Fulton County da Fani Willis if participating in
a quote criminal enterprise to keep Trump as president. Meanwhile, the Atlanta Journal Constitution reports that the Fulton County judge has said that Trump court proceedings will in fact be televised. China and the US acknowledging that military officials from the two countries met earlier this month at a defense chiefs
conference in Fiji. Admiral John Aquilino, the head of the US Indo Pacific Command, in General Shu Sheiling, the deputy Joint Chief of Staff of the People's Liberation Army, held a meeting for what's believed to be the first time since August of twenty twenty two. China had suspended military ties with the US after then House Speaker Nancy Pelosi visited Taiwan. Relations were then even more strained after the U s shotdown in a ledged Chinese spy balloon that
flew over the country. That was back in February. Former House Speaker in Nancy Pelosi and has sit down with Bloomberg's Francine Lacoi and Venice Italy. Says, despite differences, we do have to work with China.
We don't have shared values, but we have a shared planet and we have to work with the Chinese to save the planet because they're now I think the biggest emitter, if not us, their second, and they're part of the solution in all of this.
You can see that full interview on Leaders with Lacroix, airing at nine thirty pm New York time on September twenty seventh in the States, then at six thirty pm London time the next day. President Biden says he'll visit Hurricane to dally a ravaged Florida on Saturday. The Category three storm flooded towns across the state, leaving hundreds of thousands without power. Biden has been criticized for a seemingly slow response to the wildfire and maw we earlier this month.
Biden says he has spoken with Governor Ron De Santis three times today to assure him that the federal government would continue to provide all necessary resources to help the state recover in Florida. DeSantis gives an update on power outages across the state.
As of six am today, there are approximately one hundred and forty six thousand power outages reported across the state, but power is being restored quickly. Thus far, four hundred and twenty thousand accounts that lost power during the storm have been restored.
Biden will be in Florida Saturday to tour areas hit hard by Hurricane Nadalia. Global News twenty five hours a day power by more than twenty seven hundred journalists and analysts in more than one hundred and twenty countries. I'm Dan Schwartzman. This is Bloomberg.
Let's get to our guest. Liz Anne Saunders is with us. She is managing director, also the chief investment strategistic Charles Schwab and Lizen is in Boston, Massachusetts. Lazan, thanks for being with us. I'm curious to get your take right out of the gate on how you see the economy in the States right now and where the FED is in all of that mix.
Sure, and thanks for having me. We've had the view that this has been a rolling recession or a series of rolling recessions at the sectoral level, meeting segments of the economy for more than a year and a half right now, and I think that's the best way to think about this very unique cycle where we've had recessions in areas of housing, housing related, a lot of consumer oriented goods, manufacturing, we just had the later offsetting strength on the services side and in turn the labor market.
And I think from the FEDS perspective, part of the reason why they're focusing on inflation metrics at a more granular level like core services x housing is they want to get to the heart of where inflation has been most sticky, and that's where it accelerated later. So I think the simplicity around recession versus no recession, and in turn what the Fed's reaction function misses the nuances that make this cycle unlike any other.
So tell me here as well, then you know when you look here at what happened, Liz with the design with the PCE number, what did you make of it? It was pretty much in line. But again it's not gone up.
It is it was in line, and it's PCE is often in line because although the weights are different, the components of PCE you have already via CPI and PPI. So economists don't tend to be all that far off, at least on the main headline and core numbers. Where there was a bit of an upside surprise today was in that core services x housing and interestingly, the biggest component of that outsize jump up was portfolio management fees, and that has been driven by the stronger performance by
the stock market. So that can obviously ebb and flow. But given that that Powell has stressed the desire to go to two percent, that two months trend does make a longer term trend. They're not there yet on inflation, and it's part of the reason why there's so much focus on tomorrow's jobs report. Today's action and the market was very churn like, and I think that reflects the uncertainty with regard to tomorrow.
So you were talking earlier about the notion of a rolling recession. Maybe we have seen a few, one possibly in manufacturing, another that was in the housing market, at least temporarily. But one of the things that's really surprising is how well the consumer is holding up. I was struck by the consumer spending number today again in July of six tens of one percent. Haven't seen that since the beginning of the year. Where is the American consumer right now?
In your view, so they've been in relatively healthy position given what had been some of the excess associated with this stimulus. Admittedly though that has really wound itself down, and given what you're seeing in terms of increased credit card usage and now delinquencies starting to kick in, and it wouldn't surprise me to start to see a bit of a faltering. When you saw the personal income and spending numbers today, the spending side was significantly higher than
the income side, hence the now lower saving trade. I think what has been most closely tied to the resilience of the consumer has been less about wages, less about confidence, but more about the labor market. And I think if we start to see more than just the cracks we've begun to see in the labor market, that probably puts a quicker dent in the consumption side of the economy,
especially with student loan forgiveness starting to wane here. So in addition, a lot of the consumption data retail sales is expressed in nominal terms, not in real terms, So I think important in this environment is to look at what's happening in terms of unit sales as opposed to dollar sales in nominal terms, which in many cases is sort of looks high because inflation and prices have been high.
Now when you then look at all of the what you've just talked about here, you know, then you look at what's going on in the bond market, and it's bifurcated in the sense that we've got hedge funds as still shorting treasuries in large part, and asset managers off for obvious reasons, locking in that yield and buying what side of the equation would you be on.
Well, you know, it's often said that the bond market tends to have a more rational perspective. I think maybe one of the ways to think about why the bond market and the equity market maybe aren't sending the same message is I think the bond market tends to live in the and if we were on camera, i'd have air quotes around the word the real world, meaning you know, x inflation. But I think the equity market tends to
live in the nominal world. And I think that's where there's a bit of a disconnect, because the nominal data still looks fairly decent. It's the real data that is a bit more questionable, and we haven't seen it yet in terms of a blowout in credit spreads. But I think at some point the equity market is going to heed the message from the bond market so.
Very quickly twenty seconds or so. Would you be expecting a significant move lower in stocks between now, let's say, in the end of the year.
Yes and no. You know, I don't try to forecast short term moves in the market. I think we're right now in a bad news is good news for the equity market. That doesn't last in portuity. In perpetuity, I think if the news continues to be bad at some point, that has a negative impact on equities.
This is Bloomberg day Break Asia. You're morning brief on the stories making news from Hong Kong to Singapore and Wall Street.
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