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Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Krisner. So trade talks between the US and China, and it on Monday after more than six hours at Lancaster House in London, and we are told that those talks will continue on Tuesday. Bloomberg's and Marie hor Dern is there and she says two issues are front and center.

Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Krisner. So trade talks between the US and China, and it on Monday after more than six hours at Lancaster House in London, and we are told that those talks will continue on Tuesday. Bloomberg's and Marie hor Dern is there and she says two issues are front and center.

One critical minerals when it comes to the United States, those magnets, those rare earths, they say that the licensing is not quick enough. Kevin Hassett over the weekend that a HEC director says they want to see a more advanced pace when it comes to those minerals coming into the United States. And then for China, they want access to the semiconductors. And it's very obvious that export controls potentially was going to be on the table when it came to the second round of negotiations following the talks in Geneva just a month ago.

One critical minerals when it comes to the United States, those magnets, those rare earths, they say that the licensing is not quick enough. Kevin Hassett over the weekend that a HEC director says they want to see a more advanced pace when it comes to those minerals coming into the United States. And then for China, they want access to the semiconductors. And it's very obvious that export controls potentially was going to be on the table when it came to the second round of negotiations following the talks in Geneva just a month ago.

That is Bloomberg's and Marie hor Dern. Now in terms of moving those restrictions on tech today, the director of the National Economic Council, Kevin Hassett told CNBC the US would stop short of including the most sophisticated AI chips made by in Nvidia. Joining me now is Jim Warden. He is the chief investment officer at the Wealth Consulting Group, joining from Sacramento, California. Jim, thank you so much for taking time to chat with me. How optimistic are you that we're going to get a trade deal between the US and China happening in the near term?

That is Bloomberg's and Marie hor Dern. Now in terms of moving those restrictions on tech today, the director of the National Economic Council, Kevin Hassett told CNBC the US would stop short of including the most sophisticated AI chips made by in Nvidia. Joining me now is Jim Warden. He is the chief investment officer at the Wealth Consulting Group, joining from Sacramento, California. Jim, thank you so much for taking time to chat with me. How optimistic are you that we're going to get a trade deal between the US and China happening in the near term?

You know, I'm really optimistic. I think we've seen a little bit of a pattern with some of these tariffs. They start off really, really ugly, and they look prettier as time goes on, things get worked out. You know, we don't have all the information exactly how things will look, but you know, I certainly believe with the rare earth there will be some good news.

You know, I'm really optimistic. I think we've seen a little bit of a pattern with some of these tariffs. They start off really, really ugly, and they look prettier as time goes on, things get worked out. You know, we don't have all the information exactly how things will look, but you know, I certainly believe with the rare earth there will be some good news.

So if you look at the S and P right now, we're just about two percent from that all time high that we reached in February. Say we get a deal, what does that mean for the equity market?

So if you look at the S and P right now, we're just about two percent from that all time high that we reached in February. Say we get a deal, what does that mean for the equity market?

So I think the equity markets continue grinding higher. Any good news that comes out of Washington, d C that is macro related is just a it's just a boon for the equity markets. I think we I think we'll get all time highs, even if there is a little bit of sideways news on the tariffs.

So I think the equity markets continue grinding higher. Any good news that comes out of Washington, d C that is macro related is just a it's just a boon for the equity markets. I think we I think we'll get all time highs, even if there is a little bit of sideways news on the tariffs.

The AI boom is real. It's it's this fast.

The AI boom is real. It's it's this fast.

Moving train that you can slow it down, but it's it's going to keep going. So any relief that we get, I believe is going to allow us to accelerate. And you know, there's still a lot of stocks that we're looking at, a lot of stocks that are still far from where they were the February highs, and so a lot of these are have trends that are reverse, so we're looking at those. But there's also a number of stocks that are already hitting all time highs.

Moving train that you can slow it down, but it's it's going to keep going. So any relief that we get, I believe is going to allow us to accelerate. And you know, there's still a lot of stocks that we're looking at, a lot of stocks that are still far from where they were the February highs, and so a lot of these are have trends that are reverse, so we're looking at those. But there's also a number of stocks that are already hitting all time highs.

So we have a FED meeting on the eighteenth officials right now, we're in a blackout period before that decision. Today, the New York Fed survey found that consumers are expecting lower inflation over the next year than I did a month ago when they were last surveyed. And obviously this week we have a number of price reports Wednesday at CPI, Thursday, PPI. How are you feeling about the US inflation story right now?

So we have a FED meeting on the eighteenth officials right now, we're in a blackout period before that decision. Today, the New York Fed survey found that consumers are expecting lower inflation over the next year than I did a month ago when they were last surveyed. And obviously this week we have a number of price reports Wednesday at CPI, Thursday, PPI. How are you feeling about the US inflation story right now?

We continue to feel pretty good about it. The trend has been that inflation's coming down. Now we may see a little bit of bump back up with regard to concerns about tariffs, but it's generally been pushing lower. I'm a little bit concerned with higher wages. That's not so much related to the tariffs as it is immigration, and so these are things that we're keeping an eye on. But I would generally say that the trend for inflation has been continues to be lower.

We continue to feel pretty good about it. The trend has been that inflation's coming down. Now we may see a little bit of bump back up with regard to concerns about tariffs, but it's generally been pushing lower. I'm a little bit concerned with higher wages. That's not so much related to the tariffs as it is immigration, and so these are things that we're keeping an eye on. But I would generally say that the trend for inflation has been continues to be lower.

In terms of the politics in Washington, the Senate right now is dealing with a President Trump's tax bill, and we are told that Republicans in the Senate are intending to propose some revisions, among them, maybe trying to extract some savings not only from Medicaid, but maybe even Medicare, and obviously that would depart from the House version. How are you feeling about the future of this tax bill. Is that something that is going to be resolved let's say before the fourth of July, or could this drag on for some time.

In terms of the politics in Washington, the Senate right now is dealing with a President Trump's tax bill, and we are told that Republicans in the Senate are intending to propose some revisions, among them, maybe trying to extract some savings not only from Medicaid, but maybe even Medicare, and obviously that would depart from the House version. How are you feeling about the future of this tax bill. Is that something that is going to be resolved let's say before the fourth of July, or could this drag on for some time.

That's I'm not a political expert. I would say that it probably does get resolved. I don't think that we're going to have concessions with regard to Medicare or Medicaid, and if we do, I believe that there'll be light I think that that would be too much of an impact for too many people to try to do that.

That's I'm not a political expert. I would say that it probably does get resolved. I don't think that we're going to have concessions with regard to Medicare or Medicaid, and if we do, I believe that there'll be light I think that that would be too much of an impact for too many people to try to do that.

If we're talking about adding much more to the deficit, maybe as much as two point four trillion, that's the CBO estimate. What does that mean for the bond market?

If we're talking about adding much more to the deficit, maybe as much as two point four trillion, that's the CBO estimate. What does that mean for the bond market?

Yeah, so we've gotten a little bit more cautious lately with bonds. You know that that is partly due to the technicals of the bonds and just what's happening with the dollar, what's happening overseas, and you know, kind of this flight away from US dollar denominated assets. We think there's still going to be volatility with the bond market, particularly the longer end of the yield curve. So we're we've we've shortened duration. We continue to like higher quality credit, so we're a little bit more cautious on just you know, the bond market in general than we are with equities.

Yeah, so we've gotten a little bit more cautious lately with bonds. You know that that is partly due to the technicals of the bonds and just what's happening with the dollar, what's happening overseas, and you know, kind of this flight away from US dollar denominated assets. We think there's still going to be volatility with the bond market, particularly the longer end of the yield curve. So we're we've we've shortened duration. We continue to like higher quality credit, so we're a little bit more cautious on just you know, the bond market in general than we are with equities.

That's interesting. So the sell America theme you see impacting the bond market impacting the dollar more than the stock market.

That's interesting. So the sell America theme you see impacting the bond market impacting the dollar more than the stock market.

Yeah, I think that's that's partly because we we we see you know a lot of these large companies that are within technology that the fundamentals are still good, the earnings growth is still good, the profit margins, there's still a lot of growth there, you know, And I wish I could say that across the board every single sector, but certainly with you know, the megacap technology companies, and you know, there's also some some trickle down thematic we thematically, we're also liking some of the energy and utility companies that have a story with technology, and those have all been performing really well. There's kind of this mean reversion trade where they sold off a lot and they've come back.

Yeah, I think that's that's partly because we we we see you know a lot of these large companies that are within technology that the fundamentals are still good, the earnings growth is still good, the profit margins, there's still a lot of growth there, you know, And I wish I could say that across the board every single sector, but certainly with you know, the megacap technology companies, and you know, there's also some some trickle down thematic we thematically, we're also liking some of the energy and utility companies that have a story with technology, and those have all been performing really well. There's kind of this mean reversion trade where they sold off a lot and they've come back.

But yes, we do like equities more than bonds.

But yes, we do like equities more than bonds.

How are you feeling about the American consumer broadly speaking, and whether or not you would be encouraged to take positions either in consumer staples or consumer discretionary stocks.

How are you feeling about the American consumer broadly speaking, and whether or not you would be encouraged to take positions either in consumer staples or consumer discretionary stocks.

Yeah, so we actually did own some consumer staples, you know, not that long ago.

Yeah, so we actually did own some consumer staples, you know, not that long ago.

Oh and we trim that position.

Oh and we trim that position.

We at we actually added to consumer discretionary partly, you know, because some of those names were just really really sold off.

We at we actually added to consumer discretionary partly, you know, because some of those names were just really really sold off.

There is still some risk there.

There is still some risk there.

So this is you know, that was kind of a longer term thesis in terms of macro improvements.

So this is you know, that was kind of a longer term thesis in terms of macro improvements.

We we thought that they sold off too much.

We we thought that they sold off too much.

There's still certainly going to be sensitivity when you when you get names like Apple and uh Tesla and you know Amazon. There, there's still going to be some some sensitivity here. But as we look at the big picture, you know, the consumer still seems to be in pretty good shape.

There's still certainly going to be sensitivity when you when you get names like Apple and uh Tesla and you know Amazon. There, there's still going to be some some sensitivity here. But as we look at the big picture, you know, the consumer still seems to be in pretty good shape.

Uh there, They're still spending.

Uh there, They're still spending.

You know, a lot of the spending is on services, but you know, we're we're watching that closely to see kind of, you know, if if that changes in terms of the trend and earnings.

You know, a lot of the spending is on services, but you know, we're we're watching that closely to see kind of, you know, if if that changes in terms of the trend and earnings.

Are you monitoring situations offshore, any opportunities there, whether it's in Asia or Europe or other jurisdictions.

Are you monitoring situations offshore, any opportunities there, whether it's in Asia or Europe or other jurisdictions.

Yeah, So we have added some individual names, some stocks that we like that are in Europe as well as Asia. You know, I would say from a bottom up standpoint, we're liking international a little bit more than we have before, and that is really just you know, improving fundamentals as well as the trend and momentum getting.

Yeah, So we have added some individual names, some stocks that we like that are in Europe as well as Asia. You know, I would say from a bottom up standpoint, we're liking international a little bit more than we have before, and that is really just you know, improving fundamentals as well as the trend and momentum getting.

Better and these are quality names.

Better and these are quality names.

From a macro standpoint, we're also you know, looking at areas where we can add to International.

From a macro standpoint, we're also you know, looking at areas where we can add to International.

Jim will leave it there. Thank you so much for joining us. Jim Warden is the chief investment officer at the Wealth Consulting Group. Joining from Sacramento, California. Here on the Daybreak Asia podcast. Welcome back to the Daybreak Asia Podcast. I'm Doug Christner, and as we have been discussing, trade talks between the US and China are set to continue for a second day in London. The aim here is to ease tension over US shipments of technology to China and shipments of Chinese rare earth elements to the US. For a closer look on what these talks may yield, we heard from Bloomberg's Jennifer de Loki in Washington. She joined Bloomberg's North Asia correspondent Stephen Engel. Stephen and Jennifer spoke with Bloomberg's Sherry On and Heidi Stroud Watts.

Jim will leave it there. Thank you so much for joining us. Jim Warden is the chief investment officer at the Wealth Consulting Group. Joining from Sacramento, California. Here on the Daybreak Asia podcast. Welcome back to the Daybreak Asia Podcast. I'm Doug Christner, and as we have been discussing, trade talks between the US and China are set to continue for a second day in London. The aim here is to ease tension over US shipments of technology to China and shipments of Chinese rare earth elements to the US. For a closer look on what these talks may yield, we heard from Bloomberg's Jennifer de Loki in Washington. She joined Bloomberg's North Asia correspondent Stephen Engel. Stephen and Jennifer spoke with Bloomberg's Sherry On and Heidi Stroud Watts.

Jennifer, let me start with you. I mean President Trump saying that China is not easy. I mean, what was he expecting? This is the second largest economy in the world. But what are we expecting in terms of any concrete breakthrough in London now that these talks continue for a second day.

Jennifer, let me start with you. I mean President Trump saying that China is not easy. I mean, what was he expecting? This is the second largest economy in the world. But what are we expecting in terms of any concrete breakthrough in London now that these talks continue for a second day.

Well, you know, I think the fact that you know, the officials from the US and China were able to meet face to face for more than six hours, and that they're continuing tomorrow was obviously taken.

Well, you know, I think the fact that you know, the officials from the US and China were able to meet face to face for more than six hours, and that they're continuing tomorrow was obviously taken.

As a good sign.

As a good sign.

It's a development that you know, signals possible progress and easing these trade tensions, and specifically what you know could come out of this is an easing of restrictions on the export of technology from the US. Obviously rare earth materials from China also on the table and being discussed. The US has signaled very clearly it's willing to remove curbs on the export of jet engine parts, nuclear plant equipment, chemicals, and other technology if it can secure assurances that China will ease its own limits on rare earth materials that are used in smartphones and fighter jets and other equipment. So at this point that seems to be, you know, the outlines of what's possible. Kevin Hassett, who HUDs Trump's National Economic Council, said earlier today that you know, his expectation is an agreement in London that will ensure rare earths are released in volume from China.

It's a development that you know, signals possible progress and easing these trade tensions, and specifically what you know could come out of this is an easing of restrictions on the export of technology from the US. Obviously rare earth materials from China also on the table and being discussed. The US has signaled very clearly it's willing to remove curbs on the export of jet engine parts, nuclear plant equipment, chemicals, and other technology if it can secure assurances that China will ease its own limits on rare earth materials that are used in smartphones and fighter jets and other equipment. So at this point that seems to be, you know, the outlines of what's possible. Kevin Hassett, who HUDs Trump's National Economic Council, said earlier today that you know, his expectation is an agreement in London that will ensure rare earths are released in volume from China.

And Steve we saw in the data right despite this fragile truth, exports from China to the US falling the motions twenty twenty. Other than, of course, a more sort of permanent pause to these tars What does Beijing really want? And I guess more importantly, what are they willing to give up? Given how closely held the supply of rarest earth and technology has been over the past decade or more.

And Steve we saw in the data right despite this fragile truth, exports from China to the US falling the motions twenty twenty. Other than, of course, a more sort of permanent pause to these tars What does Beijing really want? And I guess more importantly, what are they willing to give up? Given how closely held the supply of rarest earth and technology has been over the past decade or more.

Well, clearly Beijing is very suspicious of what the United States is trying to get out of these talks and of this trade war. They definitely want the reduction, if not elimination of the tariffs, because again the pause is only until August and then they resume, so they would like to see that taken away. They just like some clarity, and that's why having consistency and talks with the same people, beit Scott Bessant and then Jamison Greer, the US Trade Representative, and now in addition we have Howard Lutnik, the Commerce Secretary, which indicates that those export controls from the United States, including some of those that were added after that truce was reached in Geneva, which only added to the suspicion on the Chinese part. So that's why it's clear that export controls, perhaps as we just heard, could be a bargaining chip for the United States to reduce those that were added after that Geneva truth. So I think the Chinese side is trying to get a gauge of the intent and the end result that the White House is trying to get, and not necessarily whether it's going to be just unilaterally beneficial to the United States. This is so far. Let me just say after day one of the talks, the Chinese have kept really quiet. I scoured state media. There's hardly anything about the readout of the day one talks. Holy Funk, who's leading the Chinese delegation, walked right past the gaggle of reporters in London, did not say anything. The US side said only a few words like Howard Ludnox said they were fruitful, Scott Besson said good talks. Hollyfunk said absolutely nothing. Yesterday the China Daily said pressure and coercion are not going to work against China, which is ready to resolutely counter any ill intention to move by the US side. So that really indicates how suspicious the Chinese side is. They are willing to talk, as evidence by the phone call last week between Trump and She, but they're very skeptical.

Well, clearly Beijing is very suspicious of what the United States is trying to get out of these talks and of this trade war. They definitely want the reduction, if not elimination of the tariffs, because again the pause is only until August and then they resume, so they would like to see that taken away. They just like some clarity, and that's why having consistency and talks with the same people, beit Scott Bessant and then Jamison Greer, the US Trade Representative, and now in addition we have Howard Lutnik, the Commerce Secretary, which indicates that those export controls from the United States, including some of those that were added after that truce was reached in Geneva, which only added to the suspicion on the Chinese part. So that's why it's clear that export controls, perhaps as we just heard, could be a bargaining chip for the United States to reduce those that were added after that Geneva truth. So I think the Chinese side is trying to get a gauge of the intent and the end result that the White House is trying to get, and not necessarily whether it's going to be just unilaterally beneficial to the United States. This is so far. Let me just say after day one of the talks, the Chinese have kept really quiet. I scoured state media. There's hardly anything about the readout of the day one talks. Holy Funk, who's leading the Chinese delegation, walked right past the gaggle of reporters in London, did not say anything. The US side said only a few words like Howard Ludnox said they were fruitful, Scott Besson said good talks. Hollyfunk said absolutely nothing. Yesterday the China Daily said pressure and coercion are not going to work against China, which is ready to resolutely counter any ill intention to move by the US side. So that really indicates how suspicious the Chinese side is. They are willing to talk, as evidence by the phone call last week between Trump and She, but they're very skeptical.

Steve, how much pressure are Chinese policymakers on their right now given the state of the Chinese economy. I mean, we have seen them trying to make good with other training partners like the European Union recently.

Steve, how much pressure are Chinese policymakers on their right now given the state of the Chinese economy. I mean, we have seen them trying to make good with other training partners like the European Union recently.

Absolutely, and EU is going to be a key one because EU leaders will be going to China at the end of next month for the EU China Summit. There are talks about possible huge air bus deal. There's already negotiations that are according to the Ministry of Commerce in China on the minimum price guarantees on evs, possibly reaching a deal at some point this summer. So again, the Chinese are definitely engaging with the EU. They're also engaging throughout the rest of the world in Southeast Asia, as we saw in those export numbers yesterday, were exports to the United States fell thirty four percent, Imports fell nearly eighteen percent in two way trade with the United States, but they absolutely boomed with else other parts of the world. So China is diversifying its export destinations and its available markets. But it's not enough right now to counter what has been a lot of trade obviously across the Pacific to the United states. So yes, it adds definitely to the pressure on the Chinese economy, as evidence as well by the PPI the factory gate deflation extending its string of deflationary months to thirty two yesterday down more than three percent. So there is deflation definitely entrenched in China.

Absolutely, and EU is going to be a key one because EU leaders will be going to China at the end of next month for the EU China Summit. There are talks about possible huge air bus deal. There's already negotiations that are according to the Ministry of Commerce in China on the minimum price guarantees on evs, possibly reaching a deal at some point this summer. So again, the Chinese are definitely engaging with the EU. They're also engaging throughout the rest of the world in Southeast Asia, as we saw in those export numbers yesterday, were exports to the United States fell thirty four percent, Imports fell nearly eighteen percent in two way trade with the United States, but they absolutely boomed with else other parts of the world. So China is diversifying its export destinations and its available markets. But it's not enough right now to counter what has been a lot of trade obviously across the Pacific to the United states. So yes, it adds definitely to the pressure on the Chinese economy, as evidence as well by the PPI the factory gate deflation extending its string of deflationary months to thirty two yesterday down more than three percent. So there is deflation definitely entrenched in China.

Jennifer, I'm wondering how much sort of domestic judicial pressure it is. Obviously we had the sort of lower court ruling over.

Jennifer, I'm wondering how much sort of domestic judicial pressure it is. Obviously we had the sort of lower court ruling over.

The legality or the illegality of these tariffs.

The legality or the illegality of these tariffs.

Do we know if the polls on allowing them to continue to play out might be sustained?

Do we know if the polls on allowing them to continue to play out might be sustained?

Yeah, we could know very very soon. You know, a federal appeals court here could rule at any time on whether to continue pausing the vast majority of Trump's tariffs, basically all of those that are predicated on his assertion that US trade and balances constitute a national emergency warranting those love levies. And so you know, as we know as sure, a separate court already ruled against these tariffs toss them out very swiftly, another appeals court came in and put that whole order on pause. And the question before that court now is whether to extend its temporary pause the Trump administration today went to the court and said, please keep this going. Really the lower court order, if you toss these terraffs out, it really interferes with our ability, the president's ability to conduct foreign policy. And so the administration is making the case that these need to be extended because the legal you know, machinations over this will for months. They could go all the way to the Supreme Court, and in the meantime, you know, if the tariffs can't be collected, it really impinges on the President's ability to do business. So we could see a ruling at any time, potentially as soon as tomorrow.

Yeah, we could know very very soon. You know, a federal appeals court here could rule at any time on whether to continue pausing the vast majority of Trump's tariffs, basically all of those that are predicated on his assertion that US trade and balances constitute a national emergency warranting those love levies. And so you know, as we know as sure, a separate court already ruled against these tariffs toss them out very swiftly, another appeals court came in and put that whole order on pause. And the question before that court now is whether to extend its temporary pause the Trump administration today went to the court and said, please keep this going. Really the lower court order, if you toss these terraffs out, it really interferes with our ability, the president's ability to conduct foreign policy. And so the administration is making the case that these need to be extended because the legal you know, machinations over this will for months. They could go all the way to the Supreme Court, and in the meantime, you know, if the tariffs can't be collected, it really impinges on the President's ability to do business. So we could see a ruling at any time, potentially as soon as tomorrow.

We'll make ten of Adela there and Steven Angel as well with the latest on those US China trade talks.

We'll make ten of Adela there and Steven Angel as well with the latest on those US China trade talks.

Thanks for listening to today's episode of the Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at the story shaping markets, finance, and geopolitics in the Asia Pacific. You can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel, or anywhere else you listen. Join us again tomorrow for insight on the market moves from Hong Kong to Singapore and Australia. I'm Doug Prisner and this is Bloomberg,

Thanks for listening to today's episode of the Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at the story shaping markets, finance, and geopolitics in the Asia Pacific. You can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel, or anywhere else you listen. Join us again tomorrow for insight on the market moves from Hong Kong to Singapore and Australia. I'm Doug Prisner and this is Bloomberg,