Good morning.
I'm Brian Curtis and I'm Doug Krisner. Here are the stories we're following today.
General Motors CEO and chair Mary Bearra says the UAW strike did not need to happen. She says she's been directly involved in negotiations and that the company is well prepared to keep things running during this work stoppage. Is Bera, speaking Friday on.
Bloomberg, I will say we're ready for this, you know, as we've dealt with COVID and dealt with the semiconductor shortage as well as other supply chain challenges that have you know, continued to persist from Covid. Our team knows how to manage these situations. They're staying agile and we're going to do what's right for the company. We're going to make sure everyone stays safe.
The United Autoworkers began the strike against the Big three carmakers on Friday. It's an unprecedented move that could launch a costly showdown over wages and job security. The union has about one hundred and fifty thousand members at gm Ford and Stilantis. UAW says that he wants a share of corporate profits, which have surged since the last contract
was signed. Mary Barra said that GM's latest offer, which includes twenty percent raises over four years, cost of living allowances and boost to existing pensioners, all that together marks makes it the best in the one hundred and fifteen year history of the company.
Europe is pushing back against an influx of Chinese evs during German Foreign Minister and Alena Bherbach says the EU must reduce its reliance on China. She also supports the EU's investigation into the subsidies Beijing provides its EV industry.
If you're bound to closely, it can endanger yourself, especially if you are having such a high dependency no decoupling because you cannot decouple in an interconnected world. So being a partner in climate issues, being a competitor obviously with China with new technology, but also seeing that we are systematic rivals and we have to protect our own vulnerability.
That is German Foreign Minister and Alina Beherbach. By the way, the EU's anti subsidy probe could lead not only to tariffs on made in China EVE imports, it may spark a bit of retaliation from Beijing as well. Now, the EU says the probe will be discussed with Chinese officials during a high level visit to China in the next week.
And Chinese developer Country Garden faces two more deadlines today. Bloomberg's Joan Wong has more from Hong Kong.
Country Garden. Bondholders will have until ten pm Beijing time to vote on a proposal to stretch payments by three years. If they're rejected, the developer would need to pay about sixty eight million dollars of outstanding principal next month. This would be its largest near term maturity, just as its struggled to mix smaller payments. The developer already got approval to extend repayments on seven other notes. There's also about
fifteen million dollars of interest. Do you want a dollar security? In twenty twenty five in Hong Kong, I'm joined Wan Bloomberg Radio.
Chinese authorities have detained some staff members of China Evergrand Group the story from Bloomberg's Boniau in Hong Kong.
China has launched an investigation into Evergrant's wealth management unit. This is a sign that the defaulted developer has entered a new phase involving the criminal justice system. No charges were disclosed, and the official statement did not say how many people are in custody. Only one of the detainees, surnamed Dou was mentioned. Police have called on investors to provide any leads to authorities in Hong Kong. I'm Bonnie al Bloomberg Radio.
Well, the Federal Reserve will be very much in focus this week, along with a number of earnings reports. Let's get the story from Bloomberg's Charlie Pellett.
This week we hear from FedEx, General Mills, and Darden restaurants, and investors will be focusing on how they are dealing with higher input prices and weaker customer spending. David Lefkowitz is head of Equities Americas. That you financial services.
The earnings recession looks like it's over. It looks like we're going to be returning to earnings growth here in the third quarter. That's certainly I think the message we were getting from It's been conferences and a lot of companies out talking to investors, you know, sounds like it's more status quo, no big change in the in the environment.
Also reporting this week, AutoZone and kb Home in New York, Charlie Bloomberg Radio DOUG.
At the macro level, even at this stage, investors simply don't know whether the FED has already done enough or whether or not there's more work to be done. And even the FED, you know, with the expected pause this week, seems to suggest that they need to see more. So that's one big macro story that we'll be talking with our guests about. And also I wanted to mention that it became even clearer last week that foreign investors are fleeing China. So what does this mean for China's decoupling
from the rest of the world. Is that an example? So there's a lot to put to our guests. Upcoming Parker Roy will join as chief revenue officer at Access Capital.
Well to your point about the FED, Brian, I think that's why this week's dot plot projections are going to be all the more important. A couple of key issues here, not the least of which is whether or not the FIT is going to maintain expectations for one more rate hike by the end of the year. And secondly, how much easing is going to be penciled in by the end of twenty twenty four.
Yep, it sets up as a very interesting week for more the commentary than it does for whatever they exactly do. All right, now it's time for Global News. US and Chinese officials have met in Malta through the weekend with the goal of keeping communication lines open, and Baxter has Global News from the nine to sixty news room in San Francisco.
Ed, Yeah, exactly right. Brian US National Security Advisor Jake Sullivan with Chinese Foreign Minister Wang Yie discussed the possibility of a Shee Biden meeting, and it comes at a time when tensions between the two have reached a high point. Wellong a schedule a visit Moscow for talks this week. He and she are skipping the UN General Assembly in New York, and She and Biden are positioned to meet
at the APEX summit in San Francisco this November. Donald Trump, making an appearance on NBC's Meet the Press Today, has heard on Bloomberg very wide reaching. He hasn't stopped the name calling, referring here to prosecutors and judges in the case.
These people are thugs, horrible people, fascists, Marxist sick people. They've been after me from the day came down the escalator with Melania.
And saying that he would solve the Ukraine invasion first with Putin.
I would get him into a room. I'd get Zolenski into a room that I'd bring him together and I'd have a deal worked out. I would get a deal worked.
At and claiming still that the twenty election was rigged and saying that his asking for votes in Georgia doesn't mean anything. But listen to this question. Did he admit here that he lost the election?
Are you saying you needed those votes in order to win?
Are you acknowledging you didn't win. I'm not not acknowledging. No, I say I won the election.
And extrapolated to the election as a whole.
I think somebody said twenty two thousand votes to win. Yeah, if you divided among the states, it was twenty two thousand something.
To that effect to win the election.
If I would have had another twenty two thousand votes, overhaul but look the election.
And at one point told new moderator Christian Welker that she would never succeed at the job. Meanwhile, German foreign minister and Elena Barbeck says that Europe would be better prepared if Trump returned to the White House. She has been in the US ahead of the UN General Assembly talking with Republicans because she says Trump did some things that surprised all of Europe the first time around.
I would say hardly anybody in Europe could imagine there would be a US president who would question NATO, because this is for US Europeans our life insurance. So obviously, many many things back in time was a tootal shock. And this was also something I, for example, mentioned in the discussions I had with Republican.
She says Trump did some things that were well more than irritating UAW President Sean Fain today, while saying talks thus far this week and have been productive. The move by Stileanis to offer twenty one percent wage increase apparently will not work. Fain on CBS has heard on Bloomberg says their demand is still forty percent.
You know, our demands are just we're asking for our fair share in this economy and the fruits of our labor. So twenty one percent is a no go for you. It's definitely a no go, and we've made that very clear to the companies.
And he made an attack on GM CEO Mary Barrus twenty nine million dollar annual salary.
That a CEO gets on air this last in the last few days and says that her twenty nine million dollar salaries justified by her performance. No, it's not. It's justified by the performance of the worker on the backs of the workers and by paying them poverty wages, and that's unacceptable.
And Fain also said UAW workers believe in a great economy that want to be taken along and the profits made Global newspowered by more than twenty seven hundred journalist and analysts in over one hundred and twenty countries. In San Francisco, I'm Ed Baxter and this is Bloomberg.
This is Bloomberg Daybreak Asia. I'm Brian Curtis along with Rashad Salama. We are here in Hong Kong. Our guest is Parker Roy, chief revenue officer at Access Capital in Miami. So, Parker, we saw a big increase in bets last week that's kind of running on the opposite side of the higher
for longer at the FED. These bets are suggesting that the economy is going to hit the wall here sometime by the early part of next year, and these bets would make money if the fedastic cut rates aggressively before June of next year. Do you see that as as just a hedge or a reasonable bet your thoughts on that, so, thank you very much.
You know, look, we look at money supply and the inverted yield curve in its current environment, and it's very clear to us that there are significant recessionary pressures that are on the way. Right. If you look at money supply, it's contracting. You look at the inverted yield curve, and there is no doubt that there were recessionary pressures out there. So historically that has predicted recession. However, money supply has contracted to twenty trillion, that's still four trillion greater than
where we were pre pandemic. Where I'm going with this is that there is a soft landing. We believe. With unemployment at three point eight percent here domestically in the US, with significant money supplies still in the markets, we think that there is a soft land in the future. We think Powell actually can pull us off.
Well, it'd be quite something, But you know, I just goting to the other side of the equation, the market is pricing in some quite deep rate cuts next year, the latter part of next year. Do you think that they're being rather optimistic? And do you think there's this belief there that we're going to return to the free money we had before when we may only just get a you know, maybe one hundred basis points or less, which is taking us back to what the old normal was.
So so so I'm in agreement. I think I think they are overly optimistic. You know, we've gone down, We've had a five hundred basis point move to take inflation from eight percent to three percent. The last mile is going to be a heavy lift, and you know, I think that we may see potentially higher before we see substantially lower. But look, it's not going to return to a zero interest rate environment. We think that things are going to normalize and we move into a normalized environment
across the yield curve, a normalized environment across inflation. But that's going to take time as we move into twenty four, into twenty five and beyond.
Why do you think after all the action we've seen from the Fed and through all of this time, we don't seem to be any clearer to figuring out whether or not it's hard landing, soft landing, or something you know in between.
Look, you know obviously this isn't. If it was easy, we'd have much much clearer insight, right, I mean what Powell is trying to navigate here with all of the global macro issues, whether it's it's it's a war in Europe, where it's it's China GDP growth at I now, I think around five percent. You're looking at the US GDP growth at two percent, and navigating that arena is difficult, and I think I think given those challenges, there has been a steady and measured He's been very transparent and
what he's what he's attempted to achieve. We are likely going to pause here and hold and let these let the lag effect take place, which will which again I'll come back to our comment. We believe that it will be a softer landing than expected. We certainly do not expect a hard landing.
I'm just going to ask another question with regard to how the market is priced and what you do about this. If you take an equal weighting of the S and P five hundred, for instance, excluding of course the big boys, the big tech companies. You'll see it's about four percent higher. That's indicative really of how narrow based this market has gone up by i e.
Big Tech.
Now is that in itself with these other companies struggling to eke out gains a representative also perhaps falling earnings and earning throughcession and also what do you do in this environment? You expect to come back from those companies and stay away from big tech or mega tech will remain there.
Yees.
So, Look, the move in the S and P five hundred has been and by the top five to seven firms, and the market weighted S and P five hundred versus the equal weighted S and P five hundred has certainly outperformed. Look in an environment where you have elevated interest rates, we think that it actually represents opportunities for the smaller
and mid sized caps. We actually get access capital. We focus on private markets and we see a huge opportunity underway as we move towards these recessionary pressures, as we move into more distress, we think there are substantial opportunities within private equity. We think there's substantial opportunities within within private.
Credit This is Bloomberg Daybreak Asia, your morning brief on the story is making news from Hong Kong to Singapore and Wall Street.
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Listen coast to coast on the Bloomberg Business app, Sirius XM Channel one nineteen, the iHeartRadio app, and on Bloomberg dot Com. I'm Brian Curtis.
And I'm Doug Krisner. Join us again tomorrow for all the news you need to start your day, right here on Bloomberg day Break Asia.