Before we talk about markets. Ecigarette maker juul, which, pardon the pun, almost went up in smoke last year, bankruptcy. Were hearing the company is seeking to raise about 1 billion here and it is working with jeffries to do that fundraising effort. The company had a bite had about 800 million in revenue in 2022. The hot headline is they are looking for about 1 billion in funding there. We will get you more details later in the show. That aside, and smoking is not good for you just in case, markets right now, not really up in smoke but we are coming up to lows in the day. Were down for a third day. China opened up and is providing some left to these some lift to these markets. We will flash it on your screens in a moment. Down for a third day. Certain sectors are picking up the slack,. 5 to the downside still. But were stable here. You had a big drop in u. S. Markets overnight, you had a melt up on yields with a 10 and 30 year continuing to move up. We are now closing at 4. 10. It reminds us of nightmares of 2020, when the 60 40 portfolio went up in smoke. 10 year yield in japan is now flirting with 65. The bank of japan has so far refrained, at least early today, has refrained from coming in and intervening. So we will see what this holds right now. In a couple of more Central Bank Decisions on deck today. Rishaad lets look at this correlation between bonds and equities. This is the strongest monthly one we have seen since 1996. What we are looking at here is the yield curve and we are looking at yields rising, bonds going down, and it is a triple when he. We have the fitch downgrade for the u. S. And we certainly have more bonds coming onto the market as well. And of course strongerthanexpected adp private jobs report as we also look ahead to the nonfarm payroll. What we have is this kind of turn of events. Makes it very difficult when you cannot really hedge, mitigate losses on either side of the equation . And so, where does it leave you . This is the question, really. You look at what is going on, 10 year yields, 4. 09 . You have to ask yourself what is happening. Theres a lot of things which can occur from here. What does the dollar do . We saw some Dollar Strength. It is not there at the moment. What does it mean for u. S. Benchmarks . A selloff in commodities is also happening. Credit spreads widening as risk premiums push higher. That has negations for high yield. We are talking about the hedging problem as well which is also in the mix. There you go, thats it. David yeah, a couple of things. The credit widening story, i am wondering who said that because certainly we have gone the opposite way on high rate credit. We are now pushing towards 110. But there is a point to be made that may be parts of the highyield market might be at risk because that really has been one of the best performers of late. To your point, where do you hide . 60 40, that is more the treasury story in the s p. Perhaps if we forced a fixed income person to come on the show and told them to pick, i imagine they would still say ieg. But snapping back overnight was not a good thing. Rishaad certainly not. We can have a look at the overall markets to get a sense of what is going on on a day where a gain risk is not being taken on. There you go. David we are down for a third day on the benchmark. You have some bright spots though. Certainly not to the magnitude we had in the u. S. Overnight we are getting a little bit more support from chinese authorities on the currency front. Of that a than expected, 400 or so pips. Theres a rally taking place, things like copper, aluminum, iron ore. We are seeing that pull back a little bit today further on top of that there is a bloomberg scoop, on officials intensifying their crackdown on certain deals with any china commodity sector that may be taking advantage of government subsidies and low financing and taking that money and putting it into maybe speculative use because it is not so much benefiting the real economy. Sovereign bonds still feeling the pinch as you can see. Yields up across the board. We will talk about japan in a moment later on. David finn a tease is with us right now. A couple things. Big move up in the dollar overnight yet brazil this morning cutting more than expected. You have the bank of england coming up in a couple of hours. What is top of mind for you . David f the bank of england will be a really interesting one. For dollar move overnight, it was not a huge surprise if you look at yields moving higher and the riskoff sentiment. The tends to outperform. So that is interesting. Earlier today the blb becomes interesting because you may see more pressure on the yields. The boe is widely expected to do 25 basis points. They may do 50 but the market is really looking for 25. What you want to watch out for is do they signal at all that they may increase the Balance Sheet writedown. Increase the bond selling to cut back on and reduce the Balance Sheet. If they do that the market is not looking forward to that. If that happens, you are putting pressure on gilts. Yields start rising and they will take u. S. And japanese yields with it as well. The boe decision today could be the biggest catalyst near term for more volatility. Rishaad there is a lot of political pressure on Andrew Bailey as well. I want to dovetail to what you are making of the whole bond picture in the u. S. Right now. We have this triple whammy. We have the strong adp labor report. And a lot of issuers. David f i am not really surprised by fitch. At the end of the day in terms of the Market Reaction to it, the catch is even with the downgrade, the u. S. Is still the biggest and deepest liquid market. If i am not going to invest in treasuries, where else am to invest . There is nowhere else of that size you can. So the treasury market still be where everyone looks to for safe haven demand. What is interesting is the adp data came out strong. That is not a great correlation with the nonfarm payroll data due tomorrow. Last month you saw the adp did it was very strong and yet the payroll data disappointed compared to market expectations. And therefore yields moved on that. Even though they did it yesterday was strong it does not mean payroll data will be strong tomorrow, and that is really what the market is looking forward to. How strong is the labor market, how sticky is that . Because that adds to inflationary pressure. Is the fed done or not . This piece of data tomorrow will be key. Having said that, today you also have labor cost data, which again, is another gauge of inflation in the economy. I would also keep an eye on that and initial jobless claims. Rishaad always a pleasure, David Finnerty there. Great to see you. Is this a change in thinking by investors overall, or is this ultimately a Market Structure story, what is happening right now . I did not hear the first part of your question. Rishaad i am talking about the way we have this information we digested and is there a change in sentiment, i. E. What is being priced in now when it comes to bonds and equities . Mikio the fitch downgraded yesterday, it was sorting building up a little bit of a riskoff sentiment in recent days. But the trigger was perhaps offered by the fitch downgraded which was somewhat unexpected. I would not read too much into it. I think we had a very good run in the first half of the year, led by not more than a dozen stocks. Now investors realize there are still issues that are not unresolved, and the fitch downgraded was a good reminder. That said, yeah, i dont think we have a major regime change. I think this, too, shall pass. Rishaad so what happens next . It seems the narrative is changing not to when will Interest Rates peak, but when will they remain high . Seems everyone is pollyanna about it. Is this complacency . Mikio yes, i think that is the uncertainty, the main uncertainty that is out there. We know the fed is likely to at the very least pause at their next meeting. Then it will really depend. Really, we just have to wait and see. Were in the camp that were rather afraid well, afraid is perhaps not the right word, but the u. S. Economy is actually doing really well. You have low unemployment, Income Growth fueling consumption. We think inflation will stay separately highs of the fed will resume Interest Rate hikes later down the year, even if we are going for a hard landing which is the base case right now. Looking into next year there are still a lot of questions about the impact of the rate increases that we saw so far. And their risk is on the tight side. David so, interestingly enough, in one of your calls is not to throw reason out the window, but you have a call here on being reason agnostic on the yield curve. What does that mean . Mikio we thought if you look at the yield curve from a longerterm perspective it is very inverted. It did a sort of Double Bottom and triple bottom. Historically somewhere around these levels think it is without of course understanding we are not able to tame the market but is a good time to take a steep enough position. We got the agnostic view confirmed yesterday. We got this unexpected fitch downgraded, the yield curve did actually steepen in response. So that is one of the many things that can drive the yield curve higher from here. The reason is not the one we expected. Without more it would come from the Monetary Policy side. But we are happy that it is in line with our view on that specific segment of the market. David right. So do you think that we retest cycle highs on the longend of the curve . The pain trade seems to be higher yields there. Pain in most parts of the world. Mikio on the long and, yes, we have some upside. That would be consistent with a lot of the scenarios for the yield curve steepen or. But we might get a dovish a prize on the policy side. That would have the same effect. Rishaad now, you know, you can ignore the boj up to a couple weeks ago. You cannot ignore it anymore given what they are doing is becoming very interesting. What is your, i suppose, roadmap for what happens at the bank of japan . Mikio well, by now, i guess you know me a little bit. Im a bit of a Monetary Policy nerd, if you will. I think when it comes to the boj and how they think and what they actually do, or intend to do, i thing off and there is some misunderstanding in the markets in general. So in the runup to this week that we saw recently, the expectation was inflation. We saw it everywhere, so the boj has to normalize a little bit. I personally do not think it is so much about them intending to tighten policy in japan in a meaningful way. I think it is much more about weaning themselves out of the yield curve control policy and regaining all sovereign control, if you will, of their own monetary space. The reason i am saying this is because the yield curve control system basically makes you a passive or hands over control to the fed and other central banks. And i think that is what they want to achieve. And by making the first step was to make unclear where the exact target is, but i do not think they will allow yields to rise a lot higher, at least in the near term. So every time they see something that they do not really like in the market, they will come in big time. The message is we are in control of the market, and we are going to show you that we can remain in control of this market. So i think this is what is happening and it will stay for a while like this. David and by design, do you think that was by design captivate . Mikio yes think that was by design kept vague . Mikio yes, i think by design it was kept vague. I think they want to move away from this rigid specific target. There is a whole academic discussion about what the real purpose of that policy was when they did a few years ago. They want to do away, they want to reintroduce uncertainty. If you will, they want to instill a little bit of the fear of god into people who take over the speculated positions in one direction or the other. Or they may be willing, and should be willing to gradually adjust policy. Yes, we have a little bit of inflation pressure in japan. The Global Environment has changed. The yen is extremely cheap. So, there are reasons to tidy up policy a little bit, but its not a big tightening coming on in japan. David thank you so much for your time and as always, it is great to speak with you. Mikio kumada, financial economist at lgt. Still to come, we speak with executive chairman at private equity group. His thoughts on investment sentiments in china and the worsening ties between washington and beijing, and all things private money. That comes up in about 15 minutes. Plenty more ahead. This is bloomberg. The chase ink business premier card is made for people like sam, who make everyday products, designed smarter. Like a smart coffee grinder, that orders fresh beans for you. Oh, genius for more breakthroughs like that i need a breakthrough card. Like ours with 2. 5 cash back on purchases of 5,000 or more. Plus unlimited 2 cash back on all other purchases. And with greater spending potential, sam can keep making smart ideas a brilliant reality the ink business premier card from chase for business. Make more of whats yours. 76 of 23andme Health Customers surveyed threported taking healthierrd from chactions. Business. Because they know health isnt just a future state. Health happens now. Start your dnapowered Health Journey today with personalized insights from 23andme. David welcome back. If you saw that reminder of course, big eco day later tomorrow and within that, between that, apple and amazon are coming out with earnings. Also a big earnings day. Speaking of, qualcomm was are couple hours ago, a big drop in after hours trading. The guidance was not good. Su keenan is with us to talk about that. What do we know . Su the smartphone industry in the grips of a major downturn. This is not what investors and suppliers wanted to hear. They gave a very weak outlook, saying basically the cell phone slump would continue into next year. Sales will be 8. 1 billion to 8. 9 billion in the fiscal fourthquarter. That is well below the average estimate, so that had a negative impact on the stock after our. Qualcomm stock after hours. Qualcomm fell as much as 8 . We saw some asian stocks fall as well. Qualcomm saying overall handset shipments will decrease by at least a high single digit this year compared to 2022, and that indicates the outlook has dimmed. Qualcomm saying its chipmaking peers saw a steep drop, and that suddenly had more inventory than needed. A lot of red on the screen. Rishaad china is hugely important for qualcomm. Its very dependent on them. 60 plus in sales. It also provides modem chips to apple, which will be in the next iphone, but they will not say whether they will be in future ones after that because apparently, according to us at bloomberg, we reckon they will be making their own modem chips. Su you are underscoring the major problem, and that is that the china recovery, not really arrived yet. The region provides the company with more than 60 of their sales. Last year that was almost two thirds of its revenue. So its tied to smartphones, its tied to chinas recovery, and here is what the company is saying about all of that. Since it remains difficult to predict the timing of a sustained recovery and customers remain cautious with purchases, we continue to operate under the assumption that inventory drawdown dynamics will be a factor through the end of the calendar year. So they are not seeing a big improvement on the rise in. On the horizon. Everybody has to mention ai mention ai on the conference call. They are very much taking a conservative view of the market at this point. Rishaad good stuff. Su keenan there in new york. Having a look at some other earnings stories, china evergrandes Property Management unit plunging by a record. Resumed trading for the First Time Since march of last year. The resumption coming after they met regulatory requirements for releasing the delayed results. Pending the trading halt will perhaps help redditors gauge the merits for them to swap debt for equity. Budweiser apac shares suffering from a hangover, pardon the pun, after net income for the second court are missed the estimate. Net revenue just below 2 billion was nearly below forecast, despite budweiser seeing a strong recovery of volumes in china, and of course that is where recordbreaking heat waves have been helping to drive demand. Ok, well, we have a lot more including a market check. A down day generally for the region. This is bloomberg. Good night hey corporate types. Would you stop calling each other rock stars . Youre a rock star. You are a rock star. No more calling coworkers rock stars. Look, its great that you use workday to transform your business. But it still doesnt make you a rock star. So unless you work with an actual rock star. Hi, im ozwald. Hello ozwald. 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This is despite an exchange warning. We got these korean stocks related to superconductor extending their jump as the Korean Exchange issued a warning on a trading frenzy over this issue and asked investors to be cautious. Whoa, what a move up. Energy and material stocks, at the moment, there we go, Oil Prices Just coming off their recent highs. That is affecting some of those companies, depending on where they are in terms of downstream or upstream. Quality metals. Looking at the yield picture, this is central. David it really is. Wow. In the last 30 minutes or so we went from 4. 09 to 4. 11. Were up about three basis points in the asia pacific. Imagine we would be talking about, maybe do we test november high