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This is the Bloomberg Daybreak Aisia podcast. I'm Doug Krisner. You can join Brian Curtis and myself for the stories, making news and moving markets in the APAC region. You can subscribe to the show anywhere you get your podcast and always on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App.

This is the Bloomberg Daybreak Aisia podcast. I'm Doug Krisner. You can join Brian Curtis and myself for the stories, making news and moving markets in the APAC region. You can subscribe to the show anywhere you get your podcast and always on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App.

Joining us for a closer look at Apple is Marabell Lopez, principal analyst at Lopez Research. So we had some gains in the after hours, so perhaps we can start from that. The stock was up around six percent in late training, albeit I'd imagine with fairly light light volumes and such. And we have maybe three things to talk about, the performance, the stock bypack, and the dividend. How do you think that sits with investors? And what was most important?

Joining us for a closer look at Apple is Marabell Lopez, principal analyst at Lopez Research. So we had some gains in the after hours, so perhaps we can start from that. The stock was up around six percent in late training, albeit I'd imagine with fairly light light volumes and such. And we have maybe three things to talk about, the performance, the stock bypack, and the dividend. How do you think that sits with investors? And what was most important?

I think everyone was surprised by the performance of the quarter. It was guided as a potentially weak quarter, so we were all expecting that. We had had many research reports that were coming out of China that said that Apple was losing tremendous share in that market. They frankly came into the call and said that they had done very well in mainline China, so I think that was a big surprise for one in a big win for Apple. In some ways, they didn't quite pull a rabbit out of the hat, which is always what one expects from Apple, but they did a very solid job of navigating the quarter. It was still a mixed bag.

I think everyone was surprised by the performance of the quarter. It was guided as a potentially weak quarter, so we were all expecting that. We had had many research reports that were coming out of China that said that Apple was losing tremendous share in that market. They frankly came into the call and said that they had done very well in mainline China, so I think that was a big surprise for one in a big win for Apple. In some ways, they didn't quite pull a rabbit out of the hat, which is always what one expects from Apple, but they did a very solid job of navigating the quarter. It was still a mixed bag.

Yeah, Greater China revenue was better than expected. I think we can agree on that. It's still about one and a half billion below where we were a year ago, So the year over year, I think that's negative eight point one percent. Have we kind of seen an inflection point here where Apple and China are concerned.

Yeah, Greater China revenue was better than expected. I think we can agree on that. It's still about one and a half billion below where we were a year ago, So the year over year, I think that's negative eight point one percent. Have we kind of seen an inflection point here where Apple and China are concerned.

I don't believe.

I don't believe.

So.

So.

I think we are still in a very tenuous position for Apple in the China market. It's going to take us at least a couple of quarters to figure that out, to see if there's any leveling out of that. Huiawe had a very strong quarter, so that certainly gives pause. It's an extremely competitive market and many of us are waiting to see what happens in the coming weeks with the software announcements that are expected at WWDC, the Big Apple Show.

I think we are still in a very tenuous position for Apple in the China market. It's going to take us at least a couple of quarters to figure that out, to see if there's any leveling out of that. Huiawe had a very strong quarter, so that certainly gives pause. It's an extremely competitive market and many of us are waiting to see what happens in the coming weeks with the software announcements that are expected at WWDC, the Big Apple Show.

Some might have had an inkling that the performance would not be so bad in that if you looked at Qualcom's earnings, and also Samsung the other day sort of spoke about you know, obviously returning to profit on semiconductors was the biggest thing for Samsung, but they also sort of indicated that smartphone sales were reasonably solid. So I'm wondering whether or not, you know, investors here are waiting on the next big thing, or if they're just waiting for us to see gradual recovery in the smartphone market.

Some might have had an inkling that the performance would not be so bad in that if you looked at Qualcom's earnings, and also Samsung the other day sort of spoke about you know, obviously returning to profit on semiconductors was the biggest thing for Samsung, but they also sort of indicated that smartphone sales were reasonably solid. So I'm wondering whether or not, you know, investors here are waiting on the next big thing, or if they're just waiting for us to see gradual recovery in the smartphone market.

I think we're the smartphone market have the same hit that the PC market did, but it certainly had everyone at some point in time experiencing some softness, and really a lot of that is timed to their releases, when they have their big flagship releases, and if they're a little earlier or a little later. So I do expect and even Apple, when they gave their guidance, expected they'd be up. They did not give guidance specifically on iPhone, but if they're expecting growth, iPhones are such a huge portion of the Apple revenue that we have to imagine that they're at least expecting some leveling. And they gave some good guidance in the emerging markets. The emerging markets have always been a bit of a wild card. It's the growth market for everybody in the smartphone business, and the issue is really in emerging markets, will people buy premium flagship phones, which is the market that Apple really tries to address.

I think we're the smartphone market have the same hit that the PC market did, but it certainly had everyone at some point in time experiencing some softness, and really a lot of that is timed to their releases, when they have their big flagship releases, and if they're a little earlier or a little later. So I do expect and even Apple, when they gave their guidance, expected they'd be up. They did not give guidance specifically on iPhone, but if they're expecting growth, iPhones are such a huge portion of the Apple revenue that we have to imagine that they're at least expecting some leveling. And they gave some good guidance in the emerging markets. The emerging markets have always been a bit of a wild card. It's the growth market for everybody in the smartphone business, and the issue is really in emerging markets, will people buy premium flagship phones, which is the market that Apple really tries to address.

The other thing that was better than forecast was the revenue for Apple services. I think about six hundred million of of what the street was looking for. Is it a problem for this company when we begin, as one analyst, to put it to focus on the services side at the and maybe put the hardware in the back or in the rear view a little bit.

The other thing that was better than forecast was the revenue for Apple services. I think about six hundred million of of what the street was looking for. Is it a problem for this company when we begin, as one analyst, to put it to focus on the services side at the and maybe put the hardware in the back or in the rear view a little bit.

I actually don't think so. I think that that is the nature of a diversified portfolio. Even if you look at Nvidia at their last GtC conference, you know, obviously a strong GPU hardware focused company spent a tremendous amount of time talking about building a software stack and creating a software revenue stream. So I think that that is a good portion of where Apple expects to see its long range growth. That doesn't mean that the smartphone market will fade. It also indicates, you know, we're talking about services, but really a lot of what's happening in smartphones now is not hardware based. Everybody has their chips. Everybody has a solid smartphone portfolio, with the exception there may be some of their full some that aren't. So a lot of the areas they're differentiating in right now happen to be around the AI software that runs on the device. So Apple already has AI capable chips in their device. Now. The question is, and that's what everybody's waiting for in the next coming weeks, are they going to make a big play that says that they're using a lot of AI to do things like help people take better photos with their camera.

I actually don't think so. I think that that is the nature of a diversified portfolio. Even if you look at Nvidia at their last GtC conference, you know, obviously a strong GPU hardware focused company spent a tremendous amount of time talking about building a software stack and creating a software revenue stream. So I think that that is a good portion of where Apple expects to see its long range growth. That doesn't mean that the smartphone market will fade. It also indicates, you know, we're talking about services, but really a lot of what's happening in smartphones now is not hardware based. Everybody has their chips. Everybody has a solid smartphone portfolio, with the exception there may be some of their full some that aren't. So a lot of the areas they're differentiating in right now happen to be around the AI software that runs on the device. So Apple already has AI capable chips in their device. Now. The question is, and that's what everybody's waiting for in the next coming weeks, are they going to make a big play that says that they're using a lot of AI to do things like help people take better photos with their camera.

Right, you've got the WWDC, the Worldwide Developers Conference coming up from Apple. I suppose they couldn't really say too much in this earnings report about what might be coming. Do you expect something kind of shocking and strong or just on the incremental in advancement.

Right, you've got the WWDC, the Worldwide Developers Conference coming up from Apple. I suppose they couldn't really say too much in this earnings report about what might be coming. Do you expect something kind of shocking and strong or just on the incremental in advancement.

I expect Apple to come in with on par features that are AI driven at WWDC, which is one of the things that they've been giving a lot of flak on. And frankly, if they come in with on par or slightly better, they'll actually do very well. They have a strong loyal base. The iOS base is actually doesn't move that much really, so this is one of the things that if they can just keep pace with innovation, they could do very well in the market.

I expect Apple to come in with on par features that are AI driven at WWDC, which is one of the things that they've been giving a lot of flak on. And frankly, if they come in with on par or slightly better, they'll actually do very well. They have a strong loyal base. The iOS base is actually doesn't move that much really, so this is one of the things that if they can just keep pace with innovation, they could do very well in the market.

It's kind of interesting Microsoft, you know, kind of works with open Ai. Then you've got Amazon and Alphabet together working with Anthropic. Has Apple kind of missed an opportunity here now very quickly Marble not to have partnered with an AI firm outside of the company.

It's kind of interesting Microsoft, you know, kind of works with open Ai. Then you've got Amazon and Alphabet together working with Anthropic. Has Apple kind of missed an opportunity here now very quickly Marble not to have partnered with an AI firm outside of the company.

It's still extremely early days. There are many large language models or foundation models being built every day. There's still billions that need to be invested in those guys to keep them going. So I still think Apple has a play yet there to announce.

It's still extremely early days. There are many large language models or foundation models being built every day. There's still billions that need to be invested in those guys to keep them going. So I still think Apple has a play yet there to announce.

Marble, thanks so much for joining us, Marble. Lopez, Principal analyst at Lopez Research. Well the end touched the three week high against the greenback in overnight trading, the currency really lifting its gains against the green back, the currency likely facing some official support and to discuss this, we're joined by Michael Wilson, Bloomberg FX rates market reporter and strategist to join us here on the program. So we've moved from about one sixty this past weekendto one fifty three and this range now one fifty two one fifty three could be a key level I suppose, because it was seen as resistance before. So how do we see it moving here in the short term and how much do we know about whether or not there has actually been intervention?

Marble, thanks so much for joining us, Marble. Lopez, Principal analyst at Lopez Research. Well the end touched the three week high against the greenback in overnight trading, the currency really lifting its gains against the green back, the currency likely facing some official support and to discuss this, we're joined by Michael Wilson, Bloomberg FX rates market reporter and strategist to join us here on the program. So we've moved from about one sixty this past weekendto one fifty three and this range now one fifty two one fifty three could be a key level I suppose, because it was seen as resistance before. So how do we see it moving here in the short term and how much do we know about whether or not there has actually been intervention?

Hi, Matte, thanks for having me. Well, the first things first, I think that the move today we actually made a new load down there one fifty two eighty eight not far from there right now, And I think the market has probably given up the ghost on the week in terms of taking it higher, just as buy the dip mentality. I think that the the price action itself with it without confirmation of intervention is enough to scare away dollar bulls for the moment, even heading into a non farm payroll number to nine. But you're quite right that a little bit further down that one fifty two level, which was previous resistance, that was also around about the level back on April tenth, twenty US hot CPI print landed, and that's when you know it all really started, I suppose. I know it's been building up for a while, but that was the catalyst, as it were, to really get those dollar bulls going and pushed up above that one sixty. You know, on Thursday we saw a nasty move again after Powell spoke in his press conference, and again the short priced favorite is intervention. Looking at the at the current account balances, I think they the contention is that they sold another twenty three billion dollars worth of yen that in that moment we won't obviously won't find out to the end of the month. But you know, if it walks like a duck and quacks like a duck, well probably is so. And what's been quite surprising just of late is that most of the commentary that you read, we get everything, as you know, from all the banks around the world, they've just they're casually just expressing that it was intervention. They're not hiding behind you know, possible maybes or rumored or any sort of qualifying phray, so just you know, calling it out as intervention, which is actually surprising because you know, we're very careful about those things ourselves, when most of the banks are too. But they resigned to the fact that that's probably the only thing that could have done or could have caused what happened.

Hi, Matte, thanks for having me. Well, the first things first, I think that the move today we actually made a new load down there one fifty two eighty eight not far from there right now, And I think the market has probably given up the ghost on the week in terms of taking it higher, just as buy the dip mentality. I think that the the price action itself with it without confirmation of intervention is enough to scare away dollar bulls for the moment, even heading into a non farm payroll number to nine. But you're quite right that a little bit further down that one fifty two level, which was previous resistance, that was also around about the level back on April tenth, twenty US hot CPI print landed, and that's when you know it all really started, I suppose. I know it's been building up for a while, but that was the catalyst, as it were, to really get those dollar bulls going and pushed up above that one sixty. You know, on Thursday we saw a nasty move again after Powell spoke in his press conference, and again the short priced favorite is intervention. Looking at the at the current account balances, I think they the contention is that they sold another twenty three billion dollars worth of yen that in that moment we won't obviously won't find out to the end of the month. But you know, if it walks like a duck and quacks like a duck, well probably is so. And what's been quite surprising just of late is that most of the commentary that you read, we get everything, as you know, from all the banks around the world, they've just they're casually just expressing that it was intervention. They're not hiding behind you know, possible maybes or rumored or any sort of qualifying phray, so just you know, calling it out as intervention, which is actually surprising because you know, we're very careful about those things ourselves, when most of the banks are too. But they resigned to the fact that that's probably the only thing that could have done or could have caused what happened.

It's kind of an interesting week, Mike, because there's been this this spurt of volatility that began during the holiday on Monday in the Japanese session in terms of dollar yen. Is volatility something that we've got to be dealing with a lot more now than let's say we've had in the recent past.

It's kind of an interesting week, Mike, because there's been this this spurt of volatility that began during the holiday on Monday in the Japanese session in terms of dollar yen. Is volatility something that we've got to be dealing with a lot more now than let's say we've had in the recent past.

Well, it's the overnight volatility was bid all week around about twenty four twenty five volst just under thirty vold, which is a lot for dolly and does have this seasonal spike that happens for say a non farm payroll or Bank of Japan meeting, but only this week, only like this this morning post New York has overnight volatively come off, which is actually unusual in itself in that we're just ahead of a nonfold non farm payroll print. But I do think the market's probably unless it's a really wild result there, I think the market's resigned to the fact that, you know, they're not initiating any new risk, they just want to get the weekend started, because normally that volatility would be north of twenty But I think it's down around fourteen now, so it's down five ticks since New York close, and that probably speaks to the event of the market's probably surrendering a little bit to the Bank of Japan or whoever is out there.

Well, it's the overnight volatility was bid all week around about twenty four twenty five volst just under thirty vold, which is a lot for dolly and does have this seasonal spike that happens for say a non farm payroll or Bank of Japan meeting, but only this week, only like this this morning post New York has overnight volatively come off, which is actually unusual in itself in that we're just ahead of a nonfold non farm payroll print. But I do think the market's probably unless it's a really wild result there, I think the market's resigned to the fact that, you know, they're not initiating any new risk, they just want to get the weekend started, because normally that volatility would be north of twenty But I think it's down around fourteen now, so it's down five ticks since New York close, and that probably speaks to the event of the market's probably surrendering a little bit to the Bank of Japan or whoever is out there.

Well, it's a holiday in Japan today too. That may account for some of the pullback, right, it is.

Well, it's a holiday in Japan today too. That may account for some of the pullback, right, it is.

And it is a start of Golden Wake, which is like four or five holidays in a row. And I think that that's one of the drivers of the Bank of Japan that they wanted to get this thing down and sorted before you know, the market's got very thin for the next few days.

And it is a start of Golden Wake, which is like four or five holidays in a row. And I think that that's one of the drivers of the Bank of Japan that they wanted to get this thing down and sorted before you know, the market's got very thin for the next few days.

Yeah, because Monday is a holiday too, and it is Japan, so yeah, it really does look like you know, it's hard to figure here. I still think the dollar is really driving this, right, because you had a big drop in the dollar, and a lot of that was tied to a kind of dubbish fed meeting and comments from from your own pal and at least at the moment, as long as the dollar is weakening, yeah, why why get out there and you know, and try to bet on weakness.

Yeah, because Monday is a holiday too, and it is Japan, so yeah, it really does look like you know, it's hard to figure here. I still think the dollar is really driving this, right, because you had a big drop in the dollar, and a lot of that was tied to a kind of dubbish fed meeting and comments from from your own pal and at least at the moment, as long as the dollar is weakening, yeah, why why get out there and you know, and try to bet on weakness.

In the end, I think you're right. I think that they were if they were in on the Thursday after Powell, that was very opportunistic on their part. They timed it well and they got a lot of bang for their buck. But if we get a fundamental, good fundamental from let's say a soft print tonight, it's best to let the fundamentals work their way through the market. You know, we might wake up and see Dolly in nearer to one fifty, you know, by about Tuesday when Japan returns, treasuries reopen. In Asia, there's no treasury market right now, or no cash treasuries. So I think that, you know, we've got ourselves a good catalyst to trade off tonight, and you know, hopefully that suits the boj and they, you know, just stand aside and let the market lick its wounds for now.

In the end, I think you're right. I think that they were if they were in on the Thursday after Powell, that was very opportunistic on their part. They timed it well and they got a lot of bang for their buck. But if we get a fundamental, good fundamental from let's say a soft print tonight, it's best to let the fundamentals work their way through the market. You know, we might wake up and see Dolly in nearer to one fifty, you know, by about Tuesday when Japan returns, treasuries reopen. In Asia, there's no treasury market right now, or no cash treasuries. So I think that, you know, we've got ourselves a good catalyst to trade off tonight, and you know, hopefully that suits the boj and they, you know, just stand aside and let the market lick its wounds for now.

Give me your take on the Korean one, because I see it strengthening quite a bit. I mean, obviously, intervention is not the story in South Korea, although they've been dealing with kind of the same effect on their currency that Japan has, and again it's the result of just this amazing dollar strength. What do you think is happening with the Korean one right now? As strong as it is.

Give me your take on the Korean one, because I see it strengthening quite a bit. I mean, obviously, intervention is not the story in South Korea, although they've been dealing with kind of the same effect on their currency that Japan has, and again it's the result of just this amazing dollar strength. What do you think is happening with the Korean one right now? As strong as it is.

I think that it's I wouldn't say it's a collective effort or coordinated bony measure, but there is certainly a They're just every bit as vigilant, I suppose as Bank of Japan, and I think that maybe the Bank of Korea is probably leveraging off that and using the sentiment as it were, where there's like this newfound respect for central banks to maybe not take them on. And but there is that by the dip mentality in dollar Korean as much as there is in dolly In. So you know, if the you know, I'm not as close to say that Japanese the Korean economy as the Japanese, but if the the Korean economy does turn around, you know, and any any time, say the next quarter, you might see this that high of fourteen hundred, It might be, you know, the equivalent of the one sixty for dolly In, and we might not see there be there for a few days, a few weeks.

I think that it's I wouldn't say it's a collective effort or coordinated bony measure, but there is certainly a They're just every bit as vigilant, I suppose as Bank of Japan, and I think that maybe the Bank of Korea is probably leveraging off that and using the sentiment as it were, where there's like this newfound respect for central banks to maybe not take them on. And but there is that by the dip mentality in dollar Korean as much as there is in dolly In. So you know, if the you know, I'm not as close to say that Japanese the Korean economy as the Japanese, but if the the Korean economy does turn around, you know, and any any time, say the next quarter, you might see this that high of fourteen hundred, It might be, you know, the equivalent of the one sixty for dolly In, and we might not see there be there for a few days, a few weeks.

Thank you, Michael. Michael Wilson joining US Bloomberg FX and Rates, Markets Reporter and Strategies. Cherry Spath, Founder and Chief investment Officer of Zoomo Wealth. Terry, great to have you on the program. It seems like earnings and a patient fed are enough, at least at the moment, to keep the plate spinning here in markets. Not everyone agrees of course, but the market has shrugged off this many correction that we've had, and it's hard to argue with the markets. I suppose, how would you characterize, you know, your arguments on the path forward.

Thank you, Michael. Michael Wilson joining US Bloomberg FX and Rates, Markets Reporter and Strategies. Cherry Spath, Founder and Chief investment Officer of Zoomo Wealth. Terry, great to have you on the program. It seems like earnings and a patient fed are enough, at least at the moment, to keep the plate spinning here in markets. Not everyone agrees of course, but the market has shrugged off this many correction that we've had, and it's hard to argue with the markets. I suppose, how would you characterize, you know, your arguments on the path forward.

Yeah, thanks for having me on lots so on path of that question, we are constructive on the US stock market kind of as a broad statement, where I would say definitely more constructive on large cap stocks versus small caps.

Yeah, thanks for having me on lots so on path of that question, we are constructive on the US stock market kind of as a broad statement, where I would say definitely more constructive on large cap stocks versus small caps.

It's just been, you know, a large and in charge.

It's just been, you know, a large and in charge.

Kind of market, and you know, a lot of that, as you pointed out, has been driven by earnings. We've had some very strong earnings reports so far in Q one, particularly in the tech sector as well as some of the other sectors out there. I do think that you need the bond, you know, the Federal reserve to be accommodative. I don't think earnings quite enough to overcome you know, some of these spears that have been floating around about potential FED rate hikes. We don't think that's going to happen. We're quite positive it's not. But that doesn't mean that it's not a risk out there, and it's not a concern. But overall, I mean, I think we're seeing really strong earnings. We were going to continue to see strong earnings. We're seeing a breath widening in large cap side of the US stock market, and so you know, we'll have to keep watching the Fed as we have been for a long time now as investors.

Kind of market, and you know, a lot of that, as you pointed out, has been driven by earnings. We've had some very strong earnings reports so far in Q one, particularly in the tech sector as well as some of the other sectors out there. I do think that you need the bond, you know, the Federal reserve to be accommodative. I don't think earnings quite enough to overcome you know, some of these spears that have been floating around about potential FED rate hikes. We don't think that's going to happen. We're quite positive it's not. But that doesn't mean that it's not a risk out there, and it's not a concern. But overall, I mean, I think we're seeing really strong earnings. We were going to continue to see strong earnings. We're seeing a breath widening in large cap side of the US stock market, and so you know, we'll have to keep watching the Fed as we have been for a long time now as investors.

Yeah, yesterday Chair Powell seem to take the notion of a rate hike off the table, which is not the same thing as saying that we may not get a rate cut this year. Would that if the Fed doesn't adopt a policy easing stance before the end of the year, Well, yeah.

Yeah, yesterday Chair Powell seem to take the notion of a rate hike off the table, which is not the same thing as saying that we may not get a rate cut this year. Would that if the Fed doesn't adopt a policy easing stance before the end of the year, Well, yeah.

It would. I mean, I do think it's time to.

It would. I mean, I do think it's time to.

Take a little off and to trim a little bit from these you know, two decade highs that we've seen very quickly.

Take a little off and to trim a little bit from these you know, two decade highs that we've seen very quickly.

In interest rates.

In interest rates.

On an absolute level, the interest rate level is still fine, but it's it went up so sharply and such a level that hasn't been seen, you know, twenty years, that that is going to play through in the economy, and and I think sometimes it can take a little bit longer than people expect it to. But I do think that that we'll see cuts this year. And it's not just you know, Terry sort of you know, putting that out there. I mean, when you look at the yield curve, it is still inverted, meaning that the short end of the yeal curve, ninety day treasuries are paying higher level than ten year treasuries and even two year and when that that's what that's saying to us pretty loudly, is that we're going to see a cut, and we'll probably see it.

On an absolute level, the interest rate level is still fine, but it's it went up so sharply and such a level that hasn't been seen, you know, twenty years, that that is going to play through in the economy, and and I think sometimes it can take a little bit longer than people expect it to. But I do think that that we'll see cuts this year. And it's not just you know, Terry sort of you know, putting that out there. I mean, when you look at the yield curve, it is still inverted, meaning that the short end of the yeal curve, ninety day treasuries are paying higher level than ten year treasuries and even two year and when that that's what that's saying to us pretty loudly, is that we're going to see a cut, and we'll probably see it.

You know, I would be.

You know, I would be.

Very surprised if we don't see a couple of cuts by the end of this year. We're still we're still expecting that. We think the data supports it, and certainly the yell curve is telling us that as well.

Very surprised if we don't see a couple of cuts by the end of this year. We're still we're still expecting that. We think the data supports it, and certainly the yell curve is telling us that as well.

I think it's a really interesting environment because you have almost in equal parts here people who think the Fed should cut to get out in front of a weakening economy, and that's versus those who sort of like the idea of keeping rates steady, and then you have those who think higher rates are absolutely needed to find inflation. I'm not sure if it says more about well, it's always hard to predict the future, or if it says more about this complicated environment that we seem to have gotten into. What do you think?

I think it's a really interesting environment because you have almost in equal parts here people who think the Fed should cut to get out in front of a weakening economy, and that's versus those who sort of like the idea of keeping rates steady, and then you have those who think higher rates are absolutely needed to find inflation. I'm not sure if it says more about well, it's always hard to predict the future, or if it says more about this complicated environment that we seem to have gotten into. What do you think?

Yeah, I think that's really interesting debate, and I think it's a you know, it's a complicated issue. When you look at inflation, it's it's above what the FEDS has you know, clearly said is there two percent target, and that's there, you know, I don't think it's quite their mandate, but they publicly said a lot, very long.

Yeah, I think that's really interesting debate, and I think it's a you know, it's a complicated issue. When you look at inflation, it's it's above what the FEDS has you know, clearly said is there two percent target, and that's there, you know, I don't think it's quite their mandate, but they publicly said a lot, very long.

Time that two percent is their target.

Time that two percent is their target.

We're above that, we're you know, a three percent. And you know, as you mentioned leading up to this show, you're gonna be looking for our you know, at the earnings at average hourly earnings in the jobs report tomorrow because that's going to give us some good insight as to, you know, our how far above this two percent level are we And as much as it's important to the Fed to get inflation down to two percent, I think that they can cut before kind of you know, they actually see that print. And so I don't think they need to keep raising rates. I don't think there's areas of clear overheating anywhere in the market. I don't think the labor markets are overheating. And I think when you have interest rates go up as sharply as they have recently, that's going to slam the brakes.

We're above that, we're you know, a three percent. And you know, as you mentioned leading up to this show, you're gonna be looking for our you know, at the earnings at average hourly earnings in the jobs report tomorrow because that's going to give us some good insight as to, you know, our how far above this two percent level are we And as much as it's important to the Fed to get inflation down to two percent, I think that they can cut before kind of you know, they actually see that print. And so I don't think they need to keep raising rates. I don't think there's areas of clear overheating anywhere in the market. I don't think the labor markets are overheating. And I think when you have interest rates go up as sharply as they have recently, that's going to slam the brakes.

So, you know, we do think that.

So, you know, we do think that.

Inflation's in control and it's moving in the right direction. There's no areas of overheating, and so it's safe to certainly to keep rates where they are and to you know, just give a little bit back to to investors.

Inflation's in control and it's moving in the right direction. There's no areas of overheating, and so it's safe to certainly to keep rates where they are and to you know, just give a little bit back to to investors.

So if the economy slows down and the Fed has leeway to begin easing as you expect. I'm wondering why the bond market is not a buy here. You're saying, perhaps it's not the best opportunity to go into the bond market here. I mean, I'm wondering why.

So if the economy slows down and the Fed has leeway to begin easing as you expect. I'm wondering why the bond market is not a buy here. You're saying, perhaps it's not the best opportunity to go into the bond market here. I mean, I'm wondering why.

Yeah, I think that's a good question, and it's one that we've been wrestling with. I mean kind of you know, at the start of the year, we did a lot of pencil to paper to do we want a lengthen duration in what meaning specifically, do we want to kind of lock in these rates that we're seeing now because a year from now, two years from now, we're going to look back and say, you know, wasn't that grand back when we could get five percent?

Yeah, I think that's a good question, and it's one that we've been wrestling with. I mean kind of you know, at the start of the year, we did a lot of pencil to paper to do we want a lengthen duration in what meaning specifically, do we want to kind of lock in these rates that we're seeing now because a year from now, two years from now, we're going to look back and say, you know, wasn't that grand back when we could get five percent?

Now we can't get it anymore.

Now we can't get it anymore.

What we really are doing in the bond market is just looking at what the market is telling us right now and where we're seeing the best opportunity is still in the very short end, and you know, keeping that five percent just kind of constantly rolling that over and over again and not taking any risk in our portfolios in terms of the fixed income side of things. So that's really why we haven't been, I guess, backing up the drug and buying duration and looking for gains there.

What we really are doing in the bond market is just looking at what the market is telling us right now and where we're seeing the best opportunity is still in the very short end, and you know, keeping that five percent just kind of constantly rolling that over and over again and not taking any risk in our portfolios in terms of the fixed income side of things. So that's really why we haven't been, I guess, backing up the drug and buying duration and looking for gains there.

On the intellectual level, what do you make of Bill Gross's comments about the sort of total return approach that he championed for so long of buying bonds is now defunct. Basically he says that yields draw it lower and it doesn't give you really all that much room for price appreciation.

On the intellectual level, what do you make of Bill Gross's comments about the sort of total return approach that he championed for so long of buying bonds is now defunct. Basically he says that yields draw it lower and it doesn't give you really all that much room for price appreciation.

Your thoughts quickly, Oh, I think that there can be room for price appreciation, but that's just not really where we want to take risk in the portfolios. And I think that, you know, the bond market is saying that clearly, and that's how we've got things positioned. You know, you're going to make money and on the large cap tech side of things on energy right now and then keep some fixed income safe for the bad days and the bad weeks.

Your thoughts quickly, Oh, I think that there can be room for price appreciation, but that's just not really where we want to take risk in the portfolios. And I think that, you know, the bond market is saying that clearly, and that's how we've got things positioned. You know, you're going to make money and on the large cap tech side of things on energy right now and then keep some fixed income safe for the bad days and the bad weeks.

All right, Terry, thanks so much for joining us. Terry Spath, founder and chief investment officer of Zoomawealth.

All right, Terry, thanks so much for joining us. Terry Spath, founder and chief investment officer of Zoomawealth.

This has been the Bloomberg Daybreak Asia podcast, bringing you the stories making news and moving markets in the Asia Pacific. Visit the Bloomberg Podcast channel on YouTube to get more episodes of this and other shows from Bloomberg. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen and always on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business app.

This has been the Bloomberg Daybreak Asia podcast, bringing you the stories making news and moving markets in the Asia Pacific. Visit the Bloomberg Podcast channel on YouTube to get more episodes of this and other shows from Bloomberg. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen and always on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business app.