AI in Focus Amid Alibaba’s Record Share Sale and Nvidia’s Price Hike | The Asia Trade 8/24/2026

>> THIS IS "THE ASIA TRADE," I’M HAIDI STROUD WATTS IN SYDNEY. >> I’M PAUL ALLEN. NVIDIA’S EARNINGS SAID TO BE A KEY MARKET CATALYST AS IT PLANS TO RAISE PRICES FOR ITS A.I. SERVICE. ALI BABA SEEKING A SHARE SALE TO FUND ITS A.I. EXPANSION. HAIDI: INFORMSORS ARE WATCHING U.S. INFLATION DATA. FED CHAIR -- AND THE FED CHAIR’S SPEECH FOR DEADLINE OUTLOOK. PAUL: TALKS HAVE FALLEN APART OVER TARIFFS. HAIDI: WE HAVE NO NEWS ON THE STRAIT OF HORMUZ. MARKETS GOING MILDLY INTO POSITIVE TERRITORY. NVIDIA HIKING PRICES. ALI BABA LAUNCHING A $10 BILLION SHARE SALE ATTRACTING LOT OF CONVERSATION ABOUT THAT AS WELL. THOLE IS PLAYING INTO THE OUTLOOK AS WE GET INTO TECH-HEAVY MARKETS AROUND THE REGION. KOSPI FUTURES DOWN BY 2.5% AT THIS POINT. WE ARE WATCHING THE OIL PRICE SITUATION AS BRENT CRUDE LAST TRADED LOWER BY .8%. THE U.S. ISOLATION FLASH IRAN, WE DON’T HAVE A GREAT DEAL OF DETAILS ON THAT BUT THE TREASURY SECRETARY IS SET TO UNVEIL MORE DETAILS. WE HAVE THE U.S. LOOKING TO RATCHET UP PRESSURE ON ALLIES WITH THE STALEMATE AROUND THE U.S.-IRAN WAR. PAUL: ALI BE BE LOOK TO RAISE AROUND $10 BILLION FROM A SHARE SALE. THE MOVE IMMEDIATELY SPURRED CRITICISM IF HIGHER PROFILE INVESTOR MICHAEL BEHR RIFF. LET’S BRING IN MINMIN LOW IN HONG KONG. MINMIN, TELL US MORE ABOUT THIS PLAN AND IT HAS CERTAINLY GOT ITS CRITICS. WHAT ARE THEY SAYING? MINMIN: YEAH,S THE LARKEST FOLLOW-ON SHARE SALE BY ANY COMPANY IN HONG KONG ON RECORD AND THE COMPANY IS PLANNING TO ISSUE SOME 700 OVER A MILLION SHARES AT A 3.6 DISCOUNT TO ITS FRIDAY’S CLOSING PRICE OF ITS A.D.R. IF YOU CHECK THE A.D.R. THEY WERE DOWN AROUND 8.6% OR SO ON FRIDAY. ALREADY HUGE HIT TO THE COMPANY’S STOCKS POST EARNINGS AFTER IT RECORDED A 5% DECLINE ON YEAR WHEN IT COMES TO PROFITS. MICHAEL, THERE YOU GO, YOU CAN SEE A BIG DECLINE THERE. MICHAEL BERRY IS SAYING HE’S EXITED HIS POSITION IN ALI BABA SOME TIME BACK AND TRANSFERRED ALL HIS POSITION TO JD.COM INSTEAD, THAT’S AN ALI BABA RIVAL IN THE RETAIL ONLINE SPACE. HE SAID ALI BABA MADE A LOT OF INROADS IN THIS LLM BLOODBATH BUT THAT DOESN’T MEAN ITS R.O.I. WILL GET BETTER. HE INITIALLY PLANNED TO FLIP BACK TO ALI BABA IN A COUPLE OF MONTHS BUT IS NO LONGER PLANNING TO DO THAT AND THE COMPANY ESCHARS WOULD HAVE TO FALL BY HALF TO MAKE IT ATTRACTIVE FOR HIM TO ENTER INTO THE TRADE AGAIN. HAIDI: MINMIN WHEN IT COMES TO THE BROADER A.I. SPACE, WE HAVE HEARD A LOT ABOUT THIS MYSTERY A.I. MODEL, FOX ALPHA. DO WE KNOW MUCH ABOUT WHO MIGHT BE BEHIND THIS? MINMIN: WE DON’T HAVE ANY CONFIRMATION THOUGH THERE’S A LOT OF SPECULATION AND RUMORS ONLINE. THERE ARE PEOPLE SPECULATING THIS A MODEL FROM CHINA. SOME SAY ITS ARCHITECTURE IS SIMILAR TO GPOOLS. WHAT WE KNOW IS THEY LAUNCHED IT IN STEALTH MODE AND PROVIDED FREE ACCESS FOR A LIMITED TIME OF ONE WEEK. DEVELOPERS ARE TRYING IT OUT, IT’S GETTING A LOT OF REVAUGHNS PLACES LIKE REDDIT. EVEN THE C.E.O. COMMENTED ON X SAYING IT IS VERY IMPRESSIVE. IT’S INTERESTING. I DON’T KNOW IF YOU HEARD ABOUT THE VIRAL ANIMATION FILM CALLED NEW LIE IN CHINA A LOT OF PEOPLE ARE COMPARING THIS NICKNAMING IT AS NEW LIE BECAUSE OX MEANS OR TRANSLATES TO NEW IN CHINESE. >> I WANT TO SEE WHAT ALL THE EXCITEMENT ABOUT, IT’S BEEN CRITICIZED THAT IT’S SO BAD IT’S GOOD, IT’S A CULT CLASSIC NOW. MINUTE MINUTE LOWE IS WITH US. GETTING BACK TO THE NVIDIA NEWS WE HAVE HEARD SOME OF NVIDIA’S CUSTOMERS HAVE BEEN TOLD PRICES ARE GOING UP 15% IN MANY CASES. ASIAN MARKS WILL HAVE TO PRICE IN A NEWS AS WELL AS THE ALI BABA PLACEMENT HAS BECOME A NEW WEEK, MARKETS REPORTER ANTHONY STEVENS JOIN US FROM HONG KONG. A LOFT THE SAME QUESTION, EXISTENTIAL QUESTIONS OVER THE EXPENSIVENESS OF VARIOUS THINGS WITHIN THE A.I. UNIVERSE. THE ALI BABA BLOCK. HOW DOES THAT SET UP THE DAY FOR US? >> THERE’S A LOT OF MOVING PARTS IN THE A.I. TRADE. BUT THE FUNDAMENTAL PART IS FLOW KEEPS COMING. THERE’S A FLOOD OF A.I. PAPER COMING TO THE MARK, THE ALI BABA TRADE CAME TIGHT COMPARED TO WHERE IT SHOULD BE TRADING. IT’S AROUND THREE TIMES A.B.P. BLOCK. IT’S A ONE STANDARD DEVIATION MOVE FOR THE STOCK. YOU CAN SEE THERE’S A LOFT DEMAND FOR A.I., IT’S SEEMINGLY INSATIABLE. TALKING ABOUT. P.O. DEMAND, I.G. ISSUANCE DEMAND AND PRIVATE CREDIT DEMAND. WHILE THAT DEMAND PICTURE IS STILL VERY STRONG THAT SETS UP ASIA QUITE WELL AT LEAST IN THE KIND OF A.I. TRADE. BUT THE WEIGHT OF ALL OF THIS ISSUANCE CONS TO PUT PRESSURE ON LITERALLY EVERYTHING ELSE. WE SAW THE U.S. MOMENTUM FACTOR CONTINUING TO DETERIORATE SO THE HIGHEST RISK PARTS OF THE MARKET ARE CRACKING EVEN THOUGH THE MARKET OVERALL IN THE U.S. IS QUITE STABLE. AND THAT’S BEING REFLECTED MORE OR LESS IN ASIA AS THE BIGGER COMPANIES FIND THEIR FEET AND THEY RETURN CASH TO THE MARKET IN THE CASE OF KOREA FOR EXAMPLE. WE HAVE THE END OF THE EARNINGS IN THE BACK END OF THIS WEEK, RIGHT. SO WE GET A BIG UPDATE FROM THE TOP END OF THE A.I. TRADE AND MAYBE THAT STARTS TO DOMINATE AS MOMENTUM UNDERNEATH STAR TO PULL BACK. IT’S BE AN INTERESTING SESSION IN ASIA AS WE TRY DIGEST THE HUGE FLOW ALONGSIDE THE EVERYDAY PRICE HIKES. >> IN TERMS OF THE -- PAUL: IN TERMS OF THE NVIDIA PRICE INCREASE WARS THE IMPLICATION FOR ASIA? >> THEIR PRICE HIKE AROUND 15%. THAT’S CLOSELY MIRRORING THE THINGS MADE BY SAMSUNG AND HYNIX. THE ENTIRE A.I. SUPPLY CHAIN HAS BEEN INCREASING PRICES. CLEARLY NVIDIA CANNOT HOLD ON TO THAT AND HAS TO PASS IT ON TO CUSTOMERS. SO THAT’S AN INTERESTING DYNAMIC. BECAUSE WE ALSO HAVE SOME OF THE LISTED SERVICEMAKERS IN ASIA WHO WILL PROBABLY SUFFER ON THE BACK OF THAT. WHAT IS INTERESTING IN TERMS OF THE EVOLUTION OF THIS SPACE IS HOW MUCH PRICING POWER DOES NVIDIA HAVE BEFORE CUSTOMERS GO TO THEIR OWN CUSTOMER CHIP SET? BEAR IN MIND A LOT OF NVIDIA’S CUSTOMERS ARE DOING THAT IN PARTNERSHIP WITH ASIA, AGAIN IN TAIWAN, THE LIKES OF MEDIA TECH, FOR EXAMPLE. TODAY’S RESPONSE WILL BE INTERESTING IN TELLS OF THE FOUNDRIES IN TSMC. THE MEMORYMAKERS WHO ARE DRIVING THE CHIP SHORTAGE AND DRIVING THIS CHIP PRICE INCREASES IN SAMSUNG AND HYNIX AND TO A LESSER EXTENT CXMT. ALSO SOME OF THE LISTED SERVER NAMES IN TAIWAN. THE WHOLE SPACE WILL BE IN PLAY TODAY ESPECIALLY WITH WEAK LEADS OUT OF THE U.S. HAIDI: MARKET REPORTER ANTHONY STEPHENS. WE’RE WATCHING BOND MARKETS AFTER AN EVENTFUL WEEK LAST WEEK FOR TREASURY, LOOKING AHEAD TO KEVIN WARSH’S JACKSON HOLE SPEECH LATE THEY ARE WEEK. THE MINNEAPOLIS FED PRESIDENT, NEAL KASHKARI, IS DOWN PLAYING WORRIES RISING YIELDS. >> THERE’S EVERY INDICATION THAT THE U.S. TREASURY MARKET IS FUNCTIONING AS IT SHOULD. THAT TRADES ARE TAKING PLACE, THERE’S LIQUIDITY IN THE MARKET THAT. ENABLES US TO FOCUS ON THE FED FUND RATE AS OW PRIOR MARE TOOL TO GET INFLATION BECOME DOWN. HAIDI: LET’S BRING IN OUR BLOOMBERG MLIVE STRATEGIST MARC KROONFIELD. THIS IS WHAT WE’RE CALLING A TREASURY TWIST. DOESN’T SEEM TO BE A QUICK FIX HERE FOR SCOTT BESSENT. WHAT COULD WE HEAR FROM THE FED CHAIR THAT COULD HAVE AN IMPACT? MARK: HE’S IN A DIFFICULT SPOT. I DON’T THINK ANYBODY WOULD LIKE TO BE KEVIN WARSH THIS WEEK. MARKET EXPECTATION WERE HIGH THAT HE’D ADD SOME CLARITY TO WHERE HE SEES THE INFLATION IMPACT GOING. SOME KIND OF GUIDANCE. THOUGH HE’S A MAN THAT DOESN’T LIKE FORWARD GUIDANCE AT ALL. PEOPLE WERE EXPECTING A FEW WORDS TO THE INVESTOR BASE TO GIVE US A BIT OF AN IDEA OF WHAT’S ON HIS MIND WHERE HE SEES THINGS GOING AND THE BUILDOUT FOR SOME PROMPT HE IS HAS AT THE FEDERAL RESERVE GOING ON SYSTEM OF THAT REALLY MAY HAVE TO TAKE A BACKSTEP THANKS TO SCOTT BESSENT BECAUSE THE WAY IN WHICH THE TREASURY HAS INTERVENED IN THE BOND MARKET THEY’RE AFFECTING LONG-TERM YIELDS, THAT REALLY MAKES THE FED’S JOB MORE DIFFICULT. KEVIN WARSH NOW MAY FEEL LESS INCLINED TO TALK ABOUT THE BROAD MARKS WHILE THIS IS GOING ON IN THE BACKGROUND AND INVESTORS ARE TRYING TO DIGEST HOW BIG AN IMPACT THIS WILL HAVE ON LONG-TERM YIELDS IN THE PEEKS A-- WEEKS AHEAD. HE MAY BE MORE RETICENT THAN HE HAS BEEN IN THE PAST AND JUST KICK IT FORWARD TO THE NEXT FOMC MEETING IN SEPTEMBER WHERE IT’S GOING TO BE A CLOSE CALL BETWEEN THE HAWKS AND DOVES THAT ALREADY WE’VE HEARD A FEW PEOPLE LOOKING FOR AN IMMEDIATE INTEREST RATE HIKE AND WHETHER WE CAN GET TO THE MAJORITY IS NOT TOO FAR AWAY. INVESTORS WILL BE WATCHING THAT VERY CLOSELY SYSTEM OF ALL IN ALL, IT SETS UP THE PROSPECT FOR SOME HIGH VOLATILITY AROUND KEVIN WARSH’S SPEECH GOING INTO NEXT WEEK BECAUSE HE MAY WELL DISAPPOINT ON ALL ACCOUNTS HERE. HE MIGHT NOT BE ABLE TO GIVE A CLEAR MESSAGE ON ANYTHING. AND THE MARKET WILL HAVE TO MAKE UP ITS OWN MIND. IF BY THE END OF THE WEEK THE INFLATION SIGNALS ARE STILL HIGH, THE ECONOMIC WARFARE WITH IRAN AND CANADA NOW AS WELL IS INCREASING, THAT’S ALL GOING TO BUILD INTO INFLATION EXPECTATIONS. BOND MARKS ARE NOT GOING TO LIKE IT. BY THED ON THE WEEK WE COULD BE RIGHT BACK WHERE WE STARTED BEFORE SCOTT BESSENT EVEN DECIDE HEAD WANTED TO BUY BACK MORE BONDS. PAUL: MARK, IN TERMS OF MARKET MAKING UP ITS OWN MINDS, RAY DALIO IS ADVISING THAT HE LIKES GOLD AND CRYPTO IN AN ERA OF CURRENCY DEBATE. HOW LONG IS THIS ERA GOING TO LAST? MARK: IT COULD GO ON FOR QUITE SOME TIME. IT’S NOT JUST THE UNITED STATES. THIS CONCEPT, THAT COUNTRIES AROUND THE WORLD, PARTICULARLY MAJOR COUNTRY, ARE NOT REINING IN THEIR FISCAL DEFICITS, LOOKING TO JAPAN, TO EUROPE, WHEREVER YOU LOOK MOST GOVERNMENTS SEEM TO HAVE COME TO THE CONCLUSION THAT MARKS CAN ABSORB IT. WE CAB GET AWAY WITH NOT BALANCING OUR BOOKS FOR A LONG PERIOD OF TIME THERE ARE VERY FEW EXCEPTIONS IN THE WIDER WORLD. INVESTORS ARE GETTING USED TO IT. BUT THEY’RE PRICE NAG PREMIUM FOR LONG-TERM BONDS. UNTIL MAJOR COUNTRIES AROUND THE WORLD REALLY GET TO GRIPS AND SAY YES, WE’RE GOING TO TRY AND REIN IN OUR SPEND, WE’RE GOING TO TRY AND BALANCE THE BOOK, THE OUTCOME WILL BE THE BOND PEOPLE WILL BE HAPPY AND IT WILL BE A HIGH VOLATILITY GAME AND PEOPLE LIKE DAHLIO WILL BE RIGHT, YOU’LL HAVE TO LOOK FOR ALTERNATIVES BECAUSE THE MORE THAT FIXED INCOME LOOKS UNATTRACTIVE DOESN’T WORK AS A HEDGE AGAINST STOCK MARKS, THEN YOU HAVE TO LOOK AT OTHER THINGS. WHETHER YOU LOOK AT CRYPTO OR GOLD OR SOME PART THE EQUITY SPACE. ANYTHING ELSE STANDS UP AS BEING AN ALTERNATIVE HEDGE AGAINST THE BOND MARKET. PAUL: BLOOMBERG’S MLIFE STRATEGIST MARC KROONFIELD. OUR NEXT GUEST’S CONGRESS EARNINGS HAVE BROUGHT IT BACK TO LEVELS EVEN AS PRICES RISE. WE TALK STRATEGY AHEADS THIS BLOOMBERG. ♪ PAUL: BIG EVENT TO ROUND OUT THE WEEK, KEVIN WARSH’S SPEECH AT JACKSON HOLE. LET’S LOOK AT THE 30-YEAR BOND FUTURE, THEY ARE TICKING UP A LITTLE BIT. BUT THE 30-YEAR AND 10-YEAR FOR THAT MATTER BOTH ERASED ALL THE IMPACT OF SCOTT BESSENT’S SO-CALLED TREASURY TWIST LAST WEEK. WE’RE BACK TO WHERE WE WERE TAKE A LOOK AT OTHER RISK ASSETS. KOSPI FUTURES, A LITTLE WEAKER. WE’LL KEEP AN EYE ON BIG TECH NAME, S.K. HYNIX AND -- HYNIX AND SAMSUNG. AS THEY WARN PRICE MACE BE GOING UP BY AS MUCH AS 15%. NASDAQ FUTURES PRETTY FLAT AT THE MOMENT BIG EARNINGS EVENT OF THE WEEK SECOND QUARTER RESULTS FROM NVIDIA JOINING US NOW IS JAMES DERMOTT, FOUNDER AND C.I.O. OF RESEARCH. WE DO WANT TO START WITH THAT NVIDIA STORY AS WELL. LIFTING PRICES AHEAD OF SECOND QUARTER RESULTS. WHAT ARE YOU EXPECTING FROM THESE NUMBERS AND THE STOCK REACTION AS WELL? BECAUSE IT’S BEEN PRETTY MUCH FLAT SINCE LAST QUARTER. >> IT HAS BEEN. WHAT’S INTERESTING, WE’LL TALK ABOUT THAT, THE P.E. IS CONTRACTED, GROWING AT 50% A YEAR. I THINK IF ANYBODY CAN RAISE PRICES, THEY CAN. AND OF COURSE THEY’RE PASSING THE COSTS ALONG. THEIR COMPONENT INFLATION. BUT THEY ARE THE BEST IN THE BUSINESS AND I DON’T THINK THAT THEIR BUYERS, PURCHASERS ARE GOING TO FLINCH. I THINK INVESTORS ARE OVERCOMPLICATING THE NVIDIA POTENTIAL RESULTS. YOU HAVE TO LOOK AT THE HYPERSCALERS. WHAT THEY ARE THINKING ABOUT SPENDING OR GUIDED IN THE BILLIONS IS GOING TO GO CONNECTLY TO NVIDIA WE EXPECT THOSE NUMBERS TO BE FAR EXCEEDING ESTIMATES. AND WE THINK IT ALSO PERHAPS WOULD RE-AWAKEN THE CONFIDENCE IN THE A.I. CYCLE WHICH HAS BEEN LOST THAT THE LAST WEEK OR TWO. >> HOW DO YOU APPROACH THE A.I. TRADE AT THE MOMENT IN WHEN YOU’RE BEING SELECTIVE, WHAT ARE YOU LOOKING FOR? JAMES: I THINK IT’S A GOOD QUESTION, PAUL. INVESTORS NEED TO THINK HERE ABOUT VALUATION, IMPORTANTLY, NOT OVERPAYING AND THAT’S WHERE YOU GET IN TROUBLE IN THESE A.I. OR ANY TECHNOLOGY BUBBLES. VALUATION IS VERY IMPORTANT. I THINK THAT CLEARLY, WHO ARE THE LEADS FOR THE DIFFERENT AREAS? S.K. HYNIX OR MICRON IN THE MEMORY SPACE. IF YOU WANT TO GO AFTER CHIPS, LOOK AT NVIDIA. IF YOU LOOK AT THE HYPERSCALERS BE CAREFUL WITH YOUR SELECTIONS THERE. GOOGLE HAS THE BEST TECH STACK. AND THEN OF COURSE, YOU KNOW, MAYBE, I WOULD STAY AWAY WITH METAWHICH HAS ALL THOSE CONCERNS ABOUT THE COURT CASE WHICH IS SIGNIFICANT. HAIDI: I WANT TO ASK ABOUT THE BROADER MOMENTUM IN THIS MARKET. WE’VE GOT A GREAT CHART SHOWING THAT. THIS HAS BEEN SUCH A BIG DRIVE FOR THE TERMS OF THE A.I. TRADE. WE SAW A FEW CRACKS IN THAT IN THE LAST COUPLE OF SELLOFFS. DOES THAT CONTINUE TO PRESSURE THE STRATEGY? DOES THAT MEAN IN FUTURE SELLOFFS WE START TO SEE THE IDEA OF VALUE RETURNING TO THE FORE? JAMES: YEAH, HAIDI, I THINK THAT’S A GREAT CHART. INVESTORS SHOULD PAY ATTENTION TO THIS. WHEN YOU HAVE THESE TECHNOLOGY CYCLES AND YOU GO BACK TO THE 1990’S OR LOOK AT THIS ONE, YOU HAVE WINDOWS OF OPPORTUNITY WHERE EARNINGS ACCELERATES SO MUCH MORE THAN PRICES THAT PRICE EARNINGS CONTRACT. BASICALLY YOU LOSE THINK MOMENTUM. AND, YOU KNOW, IN OUR VIEW, WE’RE IN THE THIRD OR FOURTH INNING, NOT ONLY OF THE BUSINESS CYCLE BUT THE A.I. CYCLE. SO IF YOU BELIEVE THAT AND YOU HAVE P.E.’S CONTRACTING TO WAY LESS THAN GROWTH RATES, IN MANY CASES PRICE EARNINGS ARE HALF OF GROWTH RATES, THAT’S AN AMAZING OPPORTUNITY. YOU VERY SELDOMLY SEE THAT. AND THAT’S WHY WE WOULD SUNLIGHT JEST INVESTORS WANT TO LEAN IN HERE TO THE HIGHEST QUALITY NAMES AND HAVE THE PATIENCE SO WHEN THAT CONFIDENCE, MOMENTUM COMES BACK, THEY’RE POSITIONED CORRECTLY. HAIDI: THE OTHER FACTOR COMING INTO PLAY VERY AGGRESSIVELY IS WHAT’S GOING ON WITH LONGER TREASURY YIELDS. WE’VE SEEN THE TREASURY TWIST. DIDN’T SEEM TO HAVE MUCH LONGEVITY IN TERMS OF IMPACT AS WE WERE SPEAK ABOUT EARLIER. YOU DON’T WANT TO BE FED CHAIR WARSH THIS WEEK TRYING DELIVER THAT MESSAGE TO MARKETS. HOW DOES THIS END? YOU SAID BULL CYCLES CAN CONTINUE AT TIMES LIKE THIS, IF THEY CAN HANDLE THIS RIDE. JAMES: INVESTORS NEED TO REMEMBER THAT A GRADUAL RISE IN RATES IS A SIGN THAT THE ECONOMY, IT’S TRUE GLOBALLY, ARE IN VERY GOOD, STRONG SHAPE. WHEN YOU HAVE THAT KIND OF GROWTH, YOU’RE GOING TO HAVE MILD INFLATIONARY PRESSURES, GRADUAL. YOU’RE GOING TO NEED TO HAVE GRADUAL INCREASES IN INTEREST RATES. THIS DOESN’T HAVE TO DERAIL THE BULL MARKET IN. FACT THE 1990’S IS A GOOD EXAMPLE. WE HAVE THE 10-YEAR AT 6%. INFLATION AT 4 NEVADA%. THAT’S NOT WHERE WARSH WANTS IT TO BE. BESSENT IS CONCERNED ABOUT THE LONG END WHEN IT COMES TO THE FISCAL PROBLEMS IN THE U.S. THIS IS WHAT I THINK CAN SET UP AND SPOOK THE MARKET HERE, FOCUSING A LITTLE TOO MUCH ON THEIR DEBT PROBLEM. THAT CAN CAUSE AN 8% TO 10% CORRECTION WHICH COULD BE AN OPPORTUNITY. THIS IS BUSINESS AS USUAL IN A STRONG BUSINESS CYCLE. YOU’RE GOING TO SEE GRADUAL RATE INCREASES AND WE SHOULD, I THINK, WARSH IS GOING TO BE BEHIND THAT. BUT HE’S IN A TOUGH POSITION, NO QUESTION. PAUL: IN TERMS OF THE DEBT PROBLEM IT’S HARD TO LOOK AWAY. THE NUMBERS ARE STRAGGERING. $40 TRILLION IN U.S. DEBT. $1 TRILLION IN INTEREST PAYMENTS. IN YOUR VIEW DOES THIS EVER GET REVOLVED -- RESOLVED TO THE SATISFACTION OF THE MARKET? JAMES: PAUL, I’VE GOT TWO COMMENTS ON THAT. ONE IS, INVESTORS SHOULD BE CAREFUL IN THIS KIND OF MARKET. IT COULD GO UP FOR THE NEXT FIVE YEARS IS WHAT WE’RE EXPECTING, EVEN THE DOW GOING TO $100,000. IT COULD GET DERAILED, IF IT DOES IT’S THE U.S. DEBT PROBLEM TO STOP LOSSES. WE SUGGEST THERE’S A SILVER LINING FOR ALL OF US, IN THE U.S. AT LEAST, AROUND THIS DEBT. IT’S SIMILAR TO THE 1990’S WHERE THE A.I. PRODUCTIVITY GROWTH CREATES SUCH A RISE IN CORPORATE PROFITS, CORPORATE TAX REVENUE, THAT IT FILLS THE HOLE OF THIS $40 TRILLION PROBLEM OR AT LEAST GOES A LONG WAY TO DO THAT. I THINK THAT’S THE ONLY WAY OUT. I DON’T THINK WE CAN SPEND LESS. WE’VE SHOWN THAT WE’RE NOT ABLE TO DO THAT. WE COULD GROW OUT OF IT. I THINK THAT’S THE TREASURY SECRETARY THINKING THAT. THAT’S THE ONLY WAY OUT. I WOULD SUGGEST THAT USE SOME RISK MANAGEMENT TOOLS IN THIS MARKET. PAUL: ALL RIGHT, JAMES DENNETT, THANK YOU. HEADING INTO THE BUSIEST WEEK OF THE EARNINGS SEASON, THERE’S ABOUT 170 COMPANIES DUE TO DELIVER RESULTS. CXMT WILL REPORT FOR THE FIRST TIME SINCE IT BLOCKBUSTER I.P.O. WITH INVESTORS LOOK FOR SIGNS IT CAN BUILD ON THE A.I.-DRIVEN OPTIMISM TO THAT HELPED MAKE IT CHINA’S MOST VALUE USUAL COMPANY. MAKERS OF A.I. HARDWARE WILL ALSO BE IN FOCUS AS VICTORY GIANT REPORT EARNINGS, STRONG SENTIMENT ACROSS A.I. -- CHINA’S A.I. SUPPLY CHAIN. B.I.D. AND OTHERS OFFER FRESH CLUES ON THE STRENGTH OF CHINA’S CONSUMER RECOVERY. WE HAVE MORE AHEAD ON "THE ASIA TRADE." THIS IS BLOOMBERG. PAUL: LET’S GET THE LATEST FROM THE CORPORATE FRONT. SINOPEC HAS REPORTED A 12% RISE IN PROFIT AS A SURGE IN GLOBAL ENERGY PRICES BOOSTED UPSTREAM REVENUES EVEN AS IT SQUEEZED FUEL CELLS. PRELIMINARY NET INCOME WAS ABOUT $4 BILLION. IT ALSO INCREASED THE PRICE OF ITS OIL STORED IN TANKS. YMEC PLANS TO RAISE $10 BILLION IN A SHANGHAI I.P.O. FOLLOWING IN THE FOOTSTEPS OF RIVAL C.M.T. IT PLANS TO USE THE MONEY TO ENSURE STABLE SUPPLY IN CHINA AND GLOBALLY. CXMT OVERTOOK TENCENT AS CHINA’S MOST VALUABLE COMPANY AFTER LISTING THIS WEEK. SHEIN IS EXPECTED TO RAISE $10 BILLION U.S. IN A HONG KONG I.P.O. AS IT ENTERS THE FINAL STRETCH OF A LONG JOURNEY TO GO PUBLIC. IT PLANS TO SELL SHARES AT 49.5 HONG KONG DOLLARS. EARLIER LISTING ATTEMPTS IN THE U.S. AND LONDON FAILED AMID HEIGHTENED POLITICAL SCRUTINY AND TENSIONS. THE GOVERNMENT IS SAID TO BE SETTING ASIDE $44 MILLION FOR CHIPMAKER RAPIDUS. RAPIDUS IS AIMING TO COMPETE AGAINST THE LIKES OF TSMC WITH PLANS TO BEGIN PRODUCING CUTTING EDGE TWO NANOMETER CHIPS BY NEXT YEAR. >> WE ARE SEEING THE DOLLAR DEBASEMENT FLAYPLAYBOOK GETTING DUSTED OFF PARTICULARLY ON THE BACK OF COMMENTS FROM RAY DALIO. HE’S RECOMMENDING THAT INVESTORS CUT THEIR BOND HOLD, PUT AS MUCH AS 15% OF THEIR MONEY INTO GOLD TO HEDGE AGAINST THE RISK OF THE DEBT CRISIS. WE DID SEE A STELLAR WEEK WHEN IT COMES TO BITCOIN AND GOLD LAST WEEK AND VALUES CONTINUING TO ACCELERATE THERE. PUTTING ON ANOTHER .25%. THAT SOFTENING DOLLAR SITUATION CLEARING THE PATH FOR FURTHER GAINS. DESPITE ANTICIPATING THIS NARRATIVE THIS GREENBACK HAS BEEN UNDER PRESSURE SINCE LATE JUNE. WE ARE SEEING A BOUT THESE DOLLAR-SENSITIVE ASSETS BREAKING OUT. THIS IS BLOOMBERG. ♪ ♪ HAIDI: WE ARE WATCHING A COUPLE OF KEY THEMES CARRY THROUGH FROM THE END OF LAST WEEK. ONE IS THE IMPACT OF WHAT SCOTT BESSENT IS CALLING TREASURY TWISTS. THERE YOU HAVE IT. THAT EFFORT TO INFLUENCE TREASURY YIELDS WAS PRETTY SHORT-LIVED. WE ARE WATCHING TO SEE WHERE IT GOES FROM HERE. WE WILL ALSO HEAR FROM FED CHAIRMAN WARSH. WE ARE LOOKING AT THE AI TECH TRADE. THE ALIBABA BUG CAUSING SOME CONSTERNATION. NVIDIA, NOTCHES EARNINGS BUT WE ARE HEARING THAT SOME OF THE BIGGEST CUSTOMERS HAVE BEEN TOLD THESE AI CHIPS ARE GOING UP MORE THAN 15% IN MANY CASES. MEMORY CHIP COSTS ARE SOARING. PAUL: NOT HELPING THE SITUATION IS ALL THE DEBT THAT IS BEING BROUGHT TO MARKET. SO MUCH COMPETITION IN THAT SPACE RIGHT NOW. ALL OF THIS IS PLAYING INTO THE DEBASEMENT TRADE. TALKING ABOUT THE BID FOR GOLD. OTHER SAFE HAVEN ASSETS IN THIS ENVIRONMENT. AUSTRALIAN GOLD MINERS MIGHT BE EXPECTED TO DO QUITE WELL TODAY. THAT IS CLOSING ON THAT PRICE. BRENT CRUDE PRICES ARE COMING OFF THE BOARD A LITTLE BIT. PERHAPS IT WILL BE WISE TO GET USED TO THAT. WE WILL BE HEARING FROM SCOTT BESSENT LATER. WE ARE EXPECTING TO HEAR ABOUT ANOTHER ECONOMIC ISOLATION PLAN. WE WILL TALK ABOUT THE POTENTIAL EFFECTIVENESS OF THAT. THE CANADIAN DOLLAR IS DOWN AGAINST THE GREENBACK AND AGAINST EVERYTHING. IT IS REALLY GETTING HAMMERED. THIS IS WHY. A CANADIAN ENVOY SAID TRADE TALKS WITH THE U.S. COLLAPSED OVER THE FINE PRINT IN A POTENTIAL DEAL. THE U.S. IS NOT IMPOSED NEW TARIFFS. CANDIDATE IS PLANNING AT SOME COUNTERMEASURES. >> I WARRANTED THAT AMERICAN IS TRYING TO BREAK OUT SO THEY CAN OWN US. I PROMISE THAT THAT WILL NEVER, EVER HAPPENING. WE ARE KEEPING THAT PROMISE. CANADA IS BECOMING STRONGER AND LESS DEPENDENT ON AMERICA. WE ARE JUST GETTING STARTED. >> TO THINK THEY WILL GO TO WAR WITH DONALD TRUMP AND ACTUALLY WIN THAT WAR WITH THE U.S. IS FOOLISH. I THINK YOU WILL SEE MARK CARNEY COME TO THE TABLE VERY QUICKLY BECAUSE THIS WILL BE DEVASTATING FOR HIS COUNTRY. >> LET'S GET SOME MORE ON THIS. IT SEEMS LIKE THE DEVIL WAS IN THE DETAILS. WHAT HAPPENED EXACTLY? >> THE DEVIL WAS IN THE DETAILS. WHAT THEY AGREED TO SEEM TO PROGRESSIVELY GET WORSE. THE U.S. WAS OFFERING POINTS LIKE CANADA IS LIMITING ITS ABILITY TO TRADE WITH OTHER COUNTRIES. THE USE OF THE FRENCH LANGUAGE DOMESTICALLY. THAT DID NOT GO WELL WITH CANADA. THE BIG TICKET ISSUES WERE MEDIUM AND HEAVY TRUCKS. BUT THERE WERE A RANGE OF ISSUES THAT WENT INTO THIS. THERE IS A LACK OF TRUST BETWEEN THESE COUNTRIES. THEY SAY IT BECAME PROGRESSIVELY WORSE. AND THEN THEY WALKED AWAY FROM THE DEAL BECAUSE THEY DID NOT SAY WHAT WAS BEING PROMISED. HAIDI: WHO FEELS A BIGGER IMPACT HERE? >> FOR THE NATURE OF THE ECONOMIES, THE U.S. IS SUCH A LARGE ECONOMY. THE 20 BILLION AFFECTS CANADA MORE BECAUSE IT IS A SMALLER ECONOMY. THE TWO A TRADE BETWEEN THESE COUNTRIES IS ABOUT $900 BILLION A YEAR. IT DOES NOT HAVE A REAL HUGE IMPACT ON THE OVERALL TRADE. WE SAW SOME WEAKENING OF THE CANADIAN DOLLAR BUT THE WORRY IS ABOUT INCREASING TRADE WAR BETWEEN THESE COUNTRIES THAT ARE SO DEPENDENT ON EACH OTHER. THAT IS WHY WE HAVE SEEN TENTATIVE PUSHBACK AGAINST THE U.S. AND CHINA PUSH BACK AGAINST THE U.S. CHINA HAS MUCH MORE ECONOMIC POWER. PAUL: ON A RHETORICAL POINT, IT IS WORTH POINTING OUT THAT THAT WORD WAS USED BY THE CANADIAN PRIME MINISTER. WHAT DID HE MEAN WHEN HE DISCUSSED THAT IN THE CONTEXT OF TRADE? >> PC'S RELATIONS WITH THE U.S. AS FUNDAMENTALLY BEING ALTERED BY THE TRUMP ADMINISTRATION AND HE IS TRYING TO DECREASE CANADIAN DEPENDENCE ON U.S. FOR TRADE. HE GOT OUT AND THOUGHT TRADE DEALS WITH OTHER PARTS OF THE WORLD. HE IS TRYING TO DIVERSIFY THE EXPORTS THAT CANADA SENDS OUT. THERE IS POLITICAL LEVERAGE. THE OVERALL IMPACT ON THE U.S. IS NOT THAT GREAT BUT THERE ARE KEY STATES THAT HAVE TRADE WITH CANADA, MICHIGAN AND OHIO. THE MEDIUM AND HEAVY TRUCKS SUPPLY CHAINS ARE HEAVILY DEPENDENT BETWEEN THESE COUNTRIES. THERE ARE MINERALS THAT GET TRADED. ENERGY AS WELL. OVERALL THE IMPACT ON THE U.S. WILL NOT BE THAT GREAT BUT STATES THAT HAVE RACES THAT COULD DETERMINE THE BALANCE OF THE U.S. CONGRESS WILL BE THE FOCUS OF THE TRADE DISPUTE BETWEEN THESE COUNTRIES. HAIDI: OUR EAST ASIA GOVERNMENT EDITOR THERE. SAUDI ARABIA IS ONCE AGAIN BEING FORCED TO OVERHAUL HOW OIL GETS CUSTOMERS AROUND THE WORLD. THE TOP OF EXPORTED ASCENDING TANKERS THOUSANDS OF KILOMETERS OVER TO AFRICA TO AVOID OTHER AREAS. THIS IS PART OF SOME OF THE BROADER CHANGES AND SHIFTS WE ARE SEEING AROUND THE REGION AS GEOPOLITICAL UNCERTAINTIES CONTINUE TO DRAG. >> THAT IS RIGHT. WHETHER IT IS DIRECTLY CONNECTED WITH WHAT WE ARE SEEING. SAUDI ARABIA HAS BEEN INVOLVED IN THE CIVIL WAR IN YEMEN. ANOTHER CHOKEPOINT IS COMING UNDER THREAT. THAT ADDS TO COSTS AND TIME AND UNCERTAINTY. IT IS ANOTHER LAYER . PAUL: WE ARE EXPECTING TO HEAR FROM SCOTT BESSENT LATER. I RAN HAS BEEN ECONOMICALLY ISOLATED FOR QUITE SOME TIME. HOW EFFECTIVE CAN WE EXPECT THIS TO BE? >> THAT IS A REALLY GOOD QUESTION. DO THEY WANT TO SET OFF CHINESE RETALIATION? SOME OF THE SMALLER COUNTRIES LIKE TURKEY THAT HAVE RELATIONS WITH IRAN ARE IMPORTANT ALLIES. EVEN IF IT IS SOMETHING ELSE, WILL IT HAVE AN EFFECT? WILL IT HAVE AN IMMEDIATE IMPACT? WE ARE TALKING ABOUT MONTHS HERE. IRAN DOES NOT HAVE TO WORRY TOO MUCH ABOUT ITS PEOPLE. I SUSPECT HE CAN HOLD OUT LONGER THAN THE U.S. CAN. I RAN 10 LASH OUT AT U.S. ALLIES. THAT PUTS PRESSURE BACK OF THE U.S. IT IS HARD TO SEE WHAT THAT WILL BE. PAUL: WE HAVE MORE AHEAD. STAY WITH US. THIS IS BLOOMBERG. ♪ HAIDI: TAKE A LOOK AT WHAT WE ARE EXPECTING WITH JAPANESE MARKETS. WE ARE SEEING THE VOLATILITY WHEN IT COMES TO TREASURIES. WHEN IT COMES TO THE YEN, THE SOFTENING WE HAVE SEEN IN THE U.S. DOLLAR HAS BEEN HELPING TAKE THE PRESSURE OFF. ONCE IT GETS PAST THE 159 LEVEL, WE ARE LOOKING AT SOME HEAVY RESISTANCE. THE 160 LEVEL HAS BECOME A LITTLE BIT MORE DISTANT. THE FISCAL POLICY REMAINING UNCHANGED. VERY FEW CATALYSTS IN TERMS OF WHERE WE MIGHT SEE MORE ENTHUSIASTIC BUYING OF THE YEN. WE ARE SEEING THIS AS INFLATION PICKED UP. IF THAT BACKS OF THE BOJ CASE FOR A MORE AGGRESSIVE RATE HIKE. I NEXT GUEST SEES PRESSURE ON JAPANESE BONDS. DRIVEN BY INFLATION RISKS. JOINING US NOW, A SENIOR FIXED-INCOME STRATEGIST AT BNP PAIR ABOUT. TAKE US TO SOME OF THE ELEMENTS YOU SEE AS FAR AS HAVING A MEANINGFUL IMPACT HERE. WE KNOW THE BANK OF JAPAN STILL LOOKS LIKE IT WILL NOT BE RUSHED INTO ANY AGGRESSIVE ACTION. >> IT IS ABOUT 90%. THIS IS A RISING INFLATION RISK. [INDISCERNIBLE] IN MY OPINION, IT IS AN OVER ESTIMATION. THE BOJ HAS SOME CHALLENGES. BEFORE THEY MOVE TO THE NEXT RATE HIKE. [INDISCERNIBLE] THE PACE HAS SHORTENED TO EVERY THREE MONTHS. IT IS CLOSE TO THEIR ESTIMATED RANGE OF A NEUTRAL RATE. THEY PREFER A CAUTIOUS STANCE. THAT COULD HARM THEIR ECONOMY. IF THEY TIGHTEN THEIR MONETARY POLICY, HE COULD HARM THEIR RECOVERY. ESPECIALLY FOR THE BOJ. [INDISCERNIBLE] AFTER THE JOINT INTERVENTION BETWEEN THE U.S. AND JAPAN, THEY EXPECT THE NEXT RATE HIKE WILL BE DONE UNDER POLITICAL PRESSURE FROM U.S. TREASURY SECRETARY BESSENT. HE WOULD PREFER A TIGHTER YEN. IF THEY CONDUCT A RATE HIKE, IT SEEMS TO BE DONE. THEY COULD BECOME MORE FOCUSED ON WHAT SCOTT BESSENT SAYS NEXT. TO AVOID THIS RISK I THINK THE BOJ WILL POSTPONE THE RATE HIKE. IF SHE KEEPS SILENT ON MONETARY POLICY. SOME INTERPRET THAT THIS SILENCE WILL BE ABOUT A RATE HIKE IN JUNE. IT MIGHT INCREASE THE CONFLICT BETWEEN THE BOJ. HAIDI: WHAT IS YOUR VIEW ON THE YEN? THE SOFTENING OF THE DOLLAR TAKES A LITTLE BIT OF PRESSURE OFF. IS THIS A MEDIUM-TERM IMPACT THAT WE COULD SEE? >> THAT IS AN IMPORTANT POINT. THANKS TO THEIR SOFTENING DATA IN THE U.S. AND SOFTER RETAIL DATA, THEY COULD ACCEPT THE WEAKENING PRESSURE. THAT WILL SEND A STRONG MESSAGE. FOR THE OCTOBER RATE HIKE. THE PRESSURE TO BE CONSTANT. PAUL: GIVEN THE MACRO BACKDROP, WHAT IS YOUR CURRENT STRATEGY AROUND THE MARKET? DO YOU STAY DEFENSIVE? >> [INDISCERNIBLE] THERE ARE SOME IMPORTANT CHANCES IN THE BOND MARKET. FOR MARKET INTERVENTION. USING THEIR INCREASING BUYBACKS. THAT MIGHT SHOW SOME MESSAGE THAT THE U.S. AND JAPANESE GOVERNMENT ARE MORE ABOUT THE RATE HIKE. TODAY WILL CONDUCT OTHER POLICY AS WELL. IT IS ALSO ABOUT THE PROPORTION OF HOW MUCH OF THE TRILLION OF MONEY WILL BE ON BUYBACK AND CANCELLATION. >> WE CAN ADD ANOTHER QUESTION TO THAT LIST. WE ANTICIPATE THIS IS IT GOING FORWARD. AS LONG AS THE CHIP SUPER CYCLE LASTS. SAMSUNG HAS BEEN SAYING THAT THIS WILL BE SHARED. IF THAT 50% RETURN ON FREE CASH FLOW IS KEPT, INVESTORS ARE EXPECTING MUCH BIGGER SHAREHOLDER OVER THE NEXT THREE YEARS. THAT DETAIL WILL BE IN JANUARY. INVESTORS SHOULD WAIT FOR ANOTHER FIVE TO SIX MONTHS. >> OUR ASIA STOCKS REPORTER. LET'S GET YOU A QUICK LOOK AT HOW WE ARE SETTING UP. WITH THE START OF TRADING. KOREAN MARKETS OPENING. WE HAVE NVIDIA EARNINGS TO LOOK AT TWO. ALSO THE PRICE HIKE. AND THE ALIBABA BLOCK. FUTURES ARE UP. WE WILL BE WATCHING SOME OF THE GOALS HERE. WE STILL SEE THE DOLLAR DEBASEMENT TRADE. BITCOIN EXTENDING GAINS. AFTER WHAT WAS A SPECTACULAR RUN. THIS IS BLOOMBERG. PAUL: THIS IS THE ASIAN TRADE. WE ARE COUNTING DOWN TO ASIA'S MAJOR MARKET OPEN. IT WILL BE A BUSY WEEK AROUND THE ASIA-PACIFIC FOR EARNINGS. BUSY WEEK WHEN IT COMES TO FED SPEAK. KEVIN WARSH AT THE JACKSON HOLE SYMPOSIUM AT A TIME WHERE THERE IS SO MUCH SCRUTINY WHEN IT COMES TO WHAT'S GOING ON WITH THE TREASURY MARKETS AFTER THE TREASURY TWIST WE GOT FROM TREASURY SECRETARY BESSENT LAST WEEK. WE'VE ALSO GOT THE AI TECH PART OF THE EQUATION, THE NVIDIA EARNINGS AS WELL. AND A TRADE WAR. AT THIS POINT, WE ARE SEEING THE REVIVAL OF THE TRADE. CANADA SEEING LONG TRADE WAR WITH THE U.S. THAT MAY LAST PAST THE MIDTERMS. WE ARE GETTING A BIT MORE NUANCE AROUND HOW THAT RELATIONSHIP BETWEEN PRESIDENT TRUMP AND PRIME MINISTER CARNEY IS SHAPING UP. GOVERNMENTS SEEING LITTLE CHANCE OF RESUMING TALKS WITH PRESIDENT TRUMP BEFORE THE MIDTERM ELECTIONS AFTER THE TRADE TALKS COLLAPSED OVER THE WEEKEND. MARK CARNEY IS FOCUSING ON A DOMESTIC AID PACKAGES TO HELP BUSINESSES THAT HAVE BEEN IMPACTED BY U.S. TARIFFS. THEY WILL STAY IN PLACE THROUGH THE DURATION OF THE CONFLICT ENTER THE REST OF THE TRUMP PRESIDENCY IF NEED BE. WE'RE HEARING MORE DETAILS, ACCORDING TO PEOPLE GRANTED ANONYMITY TO DISCUSS THE SENSITIVE DELIBERATIONS, BUT THESE PREPARATIONS COMING FROM MARK CARNEY SIGNALING THE GRAVITY OF THE BREAKDOWN IN TALKS FRIDAY. THESE NEW TARIFFS BEING IMPOSED BY PRESIDENT TRUMP. CARNEY ANNOUNCING RETALIATION, THIS SPIRALING TRADE FIGHT BETWEEN THE TWO VERY CLOSELY INTEGRATED ECONOMIES. SO, WE CONTINUE TO WATCH AND WAIT TO SEE THE BROADER MARKET IMPACT. WE ASAW IT IN THE CANADIAN DOLLAR BUT THE U.S. SAYING THE PATH FOR TALKS LOOKING UNCLEAR AS WELL AS THEY HAD TOWARDS -- IT SOUNDS LIKE AN ENTRENCHED SITUATION. TAKE A LOOK AT HOW WE ARE FARING IN TERMS OF SOME OF THE CAUTION FOR VARIOUS REASONS PLAYING OUT THROUGH TO THE ASIA OPEN. WE ARE SEEING JAPANESE MARKETS COMING ONLINE BY .3%. THE SOFTENING DOLLAR SITUATION PROVIDING A LITTLE BIT OF ALLEVIATION ON THE JAPANESE YEN, BUT IT IS EXPECTED JGB'S WILL FOLLOW SUIT IN TERMS OF THE MOVES WE SAW AND TREASURIES. WE ARE SEEING DOLLAR-YEN AT THE 158 LEVEL. TAKE A LOOK AT HOW KOREA IS COMING ONLINE BECAUSE THE NVIDIA STORY -- WE HAVE EARNINGS THIS WEEK BUT THE REPORTS OF SOME CUSTOMERS LOOKING AT THESE PRICE HIKES FOR THE SERVICES CONTAINING AI CHIPS. THAT WILL BE FRONT AND CENTER AS THE FOCUS REMAINS ON THE RISING EXPENSES WITHIN THIS AI UNIVERSE. THAT IN AN ADDITION TO WHAT WE'VE SEEN IN TERMS OF THE ALIBABA BLOC, THE FUNDRAISING WE SEE OUT OF VERY FRENETIC PACE. SAMSUNG ELECTRONICS FALLING BY ALMOST 5% AFTER THE SHAREHOLDER RETURN PLAN BEING MULLED BY INVESTORS. SK HYNIX UP 3.5%. PAUL: OPEN FOR TRADE IN AUSTRALIA. SOME MODESTLY RISK ON SESSION ABOUT .4%. SOME OF THE GOLD MINERS PERFORMING PRETTY WELL. THIS AS THE GOLD PRICE GAINS AS WELL. ALTHOUGH, IS IT THE U.S. DOLLAR SOFTENING? THE DEBASEMENT TRADE IS ALIVE AND WELL. THE 10 YEAR PRETTY MUCH ERASED EVERYTHING IT GOT FROM WHAT SCOTT BESSENT WAS CALLING THE TREASURY TWIST LAST WEEK. THAT WAS VERY SHORT-LIVED. WE ALSO HAVE KEVIN WARSH SPEAKING A JACKSON HOLE TO ROUND OUT THE WEEK AND THE MARKET WILL BE HANGING ON EVERY WORD. LET'S GET TO DYLAN WOKE, RESEARCH STRATEGIST -- DYLAN WU, RESEARCH STRATEGIST. I WANT TO START WITH WHAT WE'VE SEEN. WE HAVE YIELDS CLIMBING AGAIN. THE BOUNCE THAT WE SAW LAST WEEK WAS VERY SHORT-LIVED. WE ARE EXPECTING TO HEAR FROM THE TRUMP ADMINISTRATION THIS WEEK AND A RANGE OF INITIATIVES TO ADDRESS THE PROBLEMS OF THE CORE OF THIS. WHAT DO YOU THINK IS NEEDED HERE? DILIN: WELL, I THINK THE BOND MARKET IS AHEAD OF THE FED RIGHT NOW. THAT GAP IS CLOSING. 5.3% IS A HIGH, BUT WHAT MATTERS IS MORE THAN DOUBLED THE BUYBACK PROGRAM AND THE NEWS BARELY FLINCHED. THAT TELLS US IT IS A TERM PREMIUM PROBLEM AND IT IS QUITE STRUCTURAL. YOU HAVE INFLATION THAT WILL COME DOWN TO TARGET THE FISCAL DEFICIT THAT IS THE WORST MONTH SINCE 2021 AND A $1 TRILLION CORPORATE BOND ISSUANCE, COMPETING WITH GOVERNMENT PAPER FOR THE SAME KIND OF BUYERS. THOSE THREE THINGS DO NOT GO AWAY BECAUSE THE TREASURY BUYS BACK SOME BONDS. IT WILL LIKELY CONTINUE OR DEMAND DESTRUCTION. IN THE NEAR TERM, THE LONG AND TREASURY YIELD WILL LIKELY STAY ELEVATED, I THINK. PAUL: IT IS ARGUABLY MAKING FED CHAIR KEVIN WARSH HIS JOB SOMEWHAT MORE CHALLENGING AND WE WILL BE HEARING FROM HIM AT THE END OF THE WEEK AT JACKSON HOLE. WHAT DO MARKETS NEED TO HEAR FROM THE FED CHAIR IN TERMS OF INFLATION TARGETING, COMMUNICATION ABOUT THE FED'S NEXT MOVE AND WHAT KIND OF MARKET REACTION YOU EXPECT IF IT DOESN’'T GET IT. DILIN: I THINK IT WILL OBVIOUSLY BE A REALLY CHALLENGING SPEECH FOR KEVIN WARSH. AND HE HAS NO GOOD OPTIONS, TO BE HONEST. YIELDS KEEP RUNNING, FINANCIAL CONDITIONS TIGHTENING WITHOUT A SINGLE RATE HIKE WHICH IS ALMOST POETIC IN THE DYSFUNCTION. ALSO, SIGNAL THAT HE IS OK WITH HIGHER WILL AND YIELDS, WHICH IS UP HIGH OR LOW AND YIELDS -- HIGHER LOW-END YIELDS. PUSHBACK DOVE ISHLY. I THINK IT WILL BE REALLY CHALLENGING OR HARD TASK FOR KEVIN WARSH TO BALANCE THE MARKET EXPECTATIONS OF A POTENTIAL HIKE. HE NEEDS TO CONSIDER A SLUGGISH LABOR MARKET AND A SLUGGISH RETAIL SALES DATA TO JULY. HAIDI: A LOT AT PLAY WHEN IT COMES TO THE GAINS ACROSS THE AI SPACE HAS BEEN DUE TO THE RENTAL AND THIS -- RELENTLESSNESS OF THE MOMENTUM FACTOR. AS THIS BEGINS TO FADE, IT HAS BEEN CHALLENGED OF THE LAST COUPLE OF ROUNDS OF SELLOFFS. DO YOU SEE MORE OF A DIFFICULT -- CERTAINLY A MORE DIFFICULT ENVIRONMENT FOR RETAIL INVESTORS, BUT PERHAPS MORE OPPORTUNITY IF YOU ARE LOOKING TO BE A LITTLE MORE PICKY AND PERHAPS VALUE-ORIENTED? DILIN: YES, I DO THINK IT IS BASICALLY YESTERDAY AND WE REALLY NEED TO POTENTIALLY FIND SOME SELECTIVE OPPORTUNITY IN THE AI TRADE. BECAUSE THE FUNDAMENTALS OF THE DEMAND IS QUITE INTACT. AI DEMAND IS QUITE STRONG. HYPERSCALERS CAPEX APPROACHING $7 BILLION FOR 2026. A STRUCTURAL SUPPLY CONSTRAINT THROUGH THE MIDDLE OF THE DECADE. BUT, THE MARKET IS DRAWING A HARD LINE BETWEEN COMPANIES SPENDING ON AI AND ALSO COMPANIES EARNING FROM IT. ALPHABET DELIVERED IN THE PAST QUARTER. MICROSOFT PASSED WITH FLYING COLORS BUT META WAS PUNISHED BECAUSE THEIR LACK OF AI SPENDING DISCIPLINE. THAT DIVERGENCE WIDENED FROM HERE IN THE NEAR FUTURE. I THINK IT IS A SELECTIVE STORY. AND WE OBVIOUSLY NEED TO LOOK INTO REPORTS RELEASED AFTER MARKET CLOSE ON AUGUST 26. IF WE ARE SEEING SOARING CHIP DEMAND AND POTENTIALLY MORE SUPPLY FROM THE NVIDIA SIDE, IT COULD BE A POTENTIAL BOOST TO THE AI TRADE. HAIDI: DILIN, ARE INVESTORS FOCUSING CLOSELY FOLLOWING THE REYKJAVIK -- LOOKING AT THE REPERCUSSIONS OF WHAT WE'VE SEEN FROM WHAT THE BOND MARKETS ARE DOING AND THE RELY IN THIS PACE OF FUNDRAISING BY HYPERSCALERS AND OTHER AI PLAYERS? DOES THAT THIS SOME POINT COME TO BE A CONFLUENCE BECAUSE YOU WOULD IMAGINE THIS ULTIMATELY RESULTS IN EVEN MORE EXPENSIVE LEVELS WHEN IT COMES TO THE AI BUILDOUT? DILIN: YEAH, I THINK THAT'S A FAIR POINT. I THINK THE INTERACTION EFFECT BETWEEN THE GOLD MARKET AND AI CAPEX IS SOMETHING WE NEED TO MONITOR AS WELL. THE HYPERSCALERS ARE PLANNING TO ISSUE ROUGHLY $400 BILLION IN INVESTMENT TO FUND THE AI INFRASTRUCTURE. BUT THE ISSUANCE HAS TO BE WORKED BY THE STATE BOND MARKET. THAT WAS UNDER STRUCTURAL PRESSURE BY FISCAL DEFICIT AND PERSISTENT INFLATION. IF THE 30 YEAR YIELD STAYS ABOVE 5% BECAUSE OF THAT DEBT FINANCING RISES MATERIALLY, AND IT CHANGES THE RETURN MAP WHEN AI INFRASTRUCTURE IN THE INVESTMENT THAT THEY ARE NOT REFLECTED IN TECH VALUATIONS. IF WE ARE STILL SEEING THE LEVEL OF PHYSICAL DISCIPLINE FROM THE -- FISCAL DISCIPLINE ON THE LONG END FROM THE U.S. DEBT MARKET, THEN IT WOULD BE A POTENTIAL CHALLENGE TO THE MID TO LONG-TERM DEVELOPMENTS IN AI TRADE. IN THE NEAR TERM, WHAT CAN BRING MARKETS MORE VOLATILITY IS THE REPORT. PAUL: JUST FINALLY, COPPER MINERS HAVE BEEN PERFORMING VERY WELL. AUSTRALIA IS HOME TO A LOT OF COPPER MINERS. COPPER OCCURS IN SIMILAR ORE BODIES TO GOLD WHICH IS ALSO PERFORMING WELL. WITH THAT IN MIND, HOW DID YOU LIKE THE EARNINGS STORY FROM MINERS AND HOW DO YOU PLAY THE AUSTRALIAN STORY AT THE MOMENT? DILIN: I THINK THE AUSTRALIAN OUTLOOK IS MIXED AND SUGGESTED BY THE EARNINGS SEASON. IT IS PLAYING OUT QUITE WELL IN AUSTRALIA. RESOURCES ARE CARRYING THE LOAD. IT IS UP 30% WHEN IT RECORD CORPORATE PRICES. THE BIGGEST DIVIDEND IN FOUR YEARS. EBITA UP 28%. GLOBAL COMMODITY EXPOSURES SPECIFICALLY ARE NAVIGATING THIS QUITE FINE. THE PROBLEM IS BASICALLY EVERYWHERE ELSE. EARNINGS ARE TRACKING AROUND 2.6% GROWTH AGAINST UNDERLYING INFLATION OF A ROUGHLY 3.6%. THAT IS A REAL CONTRACTION. IT IS NOT THAT SPECTACULAR, WEAKENING CREDIT QUALITY AND CONCERNS ABOUT A POTENTIAL ECONOMIC SLOWDOWN KEPT COMING UP ACROSS DIFFERENT REGIONS. THAT TELLS YOU THE CONSUMER IS UNDER SOME REAL PRESSURE. AND I THINK WE'RE BASICALLY LOOKING INTO A MULTISPEED -- GROWTH. IN AUSTRALIA, WE ARE STILL LOOKING AT POTENTIAL UPSIDE OF ALL THE ENERGY AS INCLUDING COPPER, THESE KINDS OF NAMES. WE NEED TO BE MORE CAUTIOUS ABOUT ALL THE ENERGY AND RETAIL SECTORS. HAIDI: DILIN WU, RESEARCH STRATEGIST AT PEPPERSTONE. WE WERE JUST TALKING ABOUT THE EXTRAORDINARY LEVELS OF FUNDRAISING WE ARE SEEING FROM THE BIG TECH GIANTS. SOFTBANK IS PLANNING ¥1 TRILLION RETAIL BOND SALE. WE ARE GETTING MORE DETAILS ON THAT, BUT IF IT GOES THROUGH THAT WILL BE THE LARGEST RETAIL BOND SALE BY ANY JAPANESE CORPORATION. THE NIKKEI DID REPORT LATE LAST WEEK THAT SOFTBANK GROUP WAS PREPARING TO -- ¥1 TRILLION AIMED AT RETAIL INVESTORS AND WE ARE HEARING CONFIRMATION OF THE SAME. THIS COMES AS WE CONTINUE TO SEE SOME REFINANCING FROM SOFTBANK, INCLUDING THAT OF A $40 BILLION BRIDGE LOAN THAT WAS DUE IN MARCH REALLY BEING SEEN AS KEY TO THE SOFTBANK GROUP CREDIT PROFILE. SO, WE HAVE BEEN EXPECTING OVER THE NEXT FEW MONTHS FOR SOFTBANK TO CONTINUING ISSUING BONDS AS IT CONTINUES TO FACE THE SHORTFALL OF NEARLY 30 BILLION EVEN AFTER 10 MILLION OPENAI LINKED MARGIN MINE. THIS WOULD INCLUDE UPSIZING THE MARGIN LOAN. SELLING INTEL SHARES WAS ONE OF THE OPTIONS BUT WE HEAR THAT SOFTBANK GROUP IS PLANNING THE ONE TRILLION BOND SALE. WE WILL BE GETTING YOU MORE DETAILS AS THEY COME TO US. SPEAKING OF JAPAN, WE CONTINUE TO WATCH SOME OF THESE AUTO NAMES. WE REPORTED EARLIER SOME OF THE CONTINGENCY MEASURES BEING PLANNED BY MARK CARNEY'S GOVERNMENT TO DEAL WITH THE IMPACT OF THE TRADE WAR WITH THE U.S., WHICH BY ALL ACCOUNTS SEEM TO BE BEING SEEN AS A PROTRACTED ONE. AS POTENTIALLY ON WASHINGTON'S SIDE AS WELL. ONE OF THE IMPACTS IN THIS PART OF THE WORLD, SHARES OF JAPANESE CARMAKERS SHOULD SEE AN IMPACT. WE ARE SEEING SOME DOWNSIDE FOR TOYOTA, HONDA, NISSAN FALLEN THE MOST BY ALMOST 2%. WE DID SEE SOME EARLIER GAINS IN THE PREVIOUS WEEK ON THE REPORTS THAT THE TRUMP WAS PLANNING TO REDUCE TARIFFS ON CARS IMPORTED FROM CANADA FROM 15% TO 25%. PAUL: LET'S CHECK IN ON PLS. THIS IS A LITHIUM MINOR BASED IN AUSTRALIA SEEING A REASONABLE BUMP IN ITS PRICE AT THE MOMENT, BETTER BY 3.5%. THIS IS AFTER RETURNING -- REPORTING A RETURN OF A NET PROFIT. THAT WAS A MISS BUT IT DOES REVERSE THE NET LOSS THAT WE SAW A YEAR EARLIER. PLS ALSO GOING TO BE PAYING OUT A FINAL DIVIDEND WHICH IS A PAYOUT OF ABOUT 22% OF ADJUSTED FREE CASH FLOW. REFLECTING THE REBOUND IN FORTUNES FOR LITHIUM. THE PLS MANAGING DIRECTOR AND CEO DALE ANDERSON WILL BE JOINING US TO DISCUSS THE COMPANY'S BUSINESS OUTLOOK FOLLOWING THE EARNINGS. MORE AHEAD. THIS IS BLOOMBERG. ♪ HAIDI: LET'S GET YOU A QUICK LOOK AT SOFTBANK IN LIGHT OF CONFIRMATION OF THE NEWS WE HEARD A LITTLE BIT ABOUT LAST WEEK WHICH WAS PLANNING A RECORD BOND OFFERING IN JAPAN. $6.3 BILLION IS WHERE THAT WOULD BE IN TERMS OF U.S. TERMS. SOFTBANK RAISING FUNDS FOR ITS INVESTMENT COMMITMENTS TO OPENAI. THAT IS ACCORDING TO A COMPANY FILING. I THINK THIS WOULD BE THE LARGEST EVER BY ANY JAPANESE CORPORATION IN TERMS OF THAT RETAIL OFFERING. WE ALSO HAD NEWS OF ALIBABA AS WELL. LET'S BRING IN OUR MARKET REPORTER. WE WERE JUST TALKING ABOUT THIS. THIS LOOP OF PRESSURES. IN TERMS OF THE TREASURY MARKETS AND DEBT CONCERNS AND THE COSTS IN THE U.S. THESE TECH GIANTS, IT FEELS LIKE WE ARE STRUGGLING TO KEEP UP WITH THE FINANCING EFFORTS. IS THERE A CAUSE FOR CONCERN? >> IT REALLY DEPENDS ON THE COMPANY AND THE SPECIFIC CREDIT YOU'RE TALKING ABOUT. THE FLOOD OF PAPER COMING INTO THE MARKET SEEMS TO BE UP AND DOWN THE CAPITAL STRUCTURE BASED ON WHAT IS MOST APPROPRIATE FOR THE COMPANY. THIS IS A SEVEN-YEAR DEAL. AROUND $6 BILLION. THAT COMPARES VERY FAVORABLY. YOU CAN SEE HOW THIS PRIVATE CREDIT ISSUE IS GOING TO COMPETE WITH THE GOVERNMENT. THEY ARE IN THE SAME KIND OF LEVELS. FIXED-INCOME INVESTORS WILL BE VERY HARD-PRESSED TO TURN THIS DOWN. ESPECIALLY IN A FAST-GROWING SECTOR. THAT IS THE COMPETITIVE ELEMENT OF THIS CAPITAL COMPETITION BETWEEN THE GOVERNMENT AND THE AI TRADE. THAT HAS BECOME A MUCH BIGGER FACTOR. AS OTHERS START TO CATCH UP. WHEN YOU HAVE SOBERING SIZE ISSUANCE. THAT IS A MATERIAL SIZE THAT COMPARES TO THE TREASURY OPTION. IT IS THE BIGGEST EVER SECONDARY PLACEMENT IN HONG KONG. NOW YOU'RE RENTING AROUND WERE PRICING OF THESE DEALS IS BECOMING PRIVATE. BUT THE AUCTIONS ARE STILL LOOKING AT THE PUBLIC LEVEL. PAUL: IT ALSO COMES AT A TIME WHEN NVIDIA IS PUTTING ITS PRICES UP. TALK ABOUT HOW MUCH AND WHAT PRODUCTS AND ALL OF THE IMPLICATIONS OF THIS? HOW WILL IT BE FELT DOWNSTREAM? >> THE PRICE INCREASES AROUND 15%. THAT IS CLOSELY TRACKING THIS PRICE. IT TRADES AT A SPOT BASIS. YOU CAN VERIFY THAT. SOME OF THIS WILL GO THROUGH TO CUSTOMERS. THIS WILL BE VERY INTERESTING TO WATCH. THAT WILL PROBABLY ACCELERATE. IF YOU SEE THIS PRICING. YOU SEE THEY HAVE DONE FANTASTICALLY WELL. DOUBLE DIGIT GAINS. THE CUSTOMERS ARE SMALLER. BOTH SIDES, CAN THEY CONTINUE TO BENEFIT? PAUL: OUR MARKETS REPORTER. THANK YOU. ALIBABA IS SEEKING TO RAISE ABOUT $10 MILLION FROM A HONG KONG SHARE. LET'S GET MORE DETAIL. THIS IS CERTAINLY NOT WITHOUT ITS CRITICS. >> ALIBABA IS LOOKING TO OFFER 7 MILLION SHARES. AT A DISCOUNT. MIND YOU, FRIDAY'S CLOSING PRICE WAS ABOUT 8.5% LOWER. HUGE TRADING VOLUMES AS WELL. PART OF THAT COULD BE BECAUSE OF EARNINGS. PROFITS WERE DOWN 75%. CLOSE TO $10 BILLION IN INVESTMENT. THEY WANT TO CONTINUE INVESTING IN THE SERVICES. YOU HAVE PROMINENT INVESTORS SAYING THEY HAVE EXITED THEIR POSITION IN ALIBABA AND SHIFTED TO BUYING OTHER STOCK INSTEAD. HE SAYS THE PRICE COMPETITION MIGHT BE EASING. HE IS NOT CONVINCED ABOUT THAT SPENDING. EVEN AS ALIBABA IS MAKING INROADS. WHAT HE CALLS THE BLOODBATH IN THE COMMODITIZED SECTOR. THIS IS CERTAINLY ONE WE WANT TO KEEP AN EYE ON WITH THE MARKET OPENS TODAY. HAIDI: OUR CHINA CORRESPONDENT. STILL AHEAD, THE CANADIAN ENVOY TELLS BLOOMBERG THAT U.S. TRADE TALKS COLLAPSED OVER THE FINE PRINT. THIS IS BLOOMBERG. ♪ PAUL: BLOOMBERG SOURCES SAY THE CANADIAN PRIME MINISTER NANCY SEES LITTLE CHANCE OF RESUMING TALKS WITH PRESIDENT TRUMP BEFORE THE U.S. MIDTERM ELECTIONS IN NOVEMBER. A CANADIAN ENVOY HAS TOLD US THAT NEGOTIATIONS UNRAVELED OVER THE FINE PRINT OF A PROPOSED AGREEMENT. IT LOOKS LIKE THE DEVIL WAS IN THE DETAILS. IN TERMS OF THIS DRAGGING ON TO INTO THE MIDTERMS, WHAT IS THE PLAY HERE? IS THIS A BARGAINING CHIP? >> FOR THE CANADIAN PRIME MINISTER, HE IS PREPARING AND A PACKET FOR THE INDUSTRIES THAT HAVE BEEN HIT BY THE TERRORISTS. HE IS PREPARING HIS COUNTRY FOR SEVERAL MONTHS OF TRADE DISPUTES WITH THE U.S. AT LEAST THROUGH THE MIDTERMS. FOR HIM THIS IS A SHIFT IN PRIORITIES. HE SPENT A LOT OF HIS FIRST YEAR TRYING TO COOL DOWN TENSIONS AS MUCH AS MUCH AS HE COULD WITH THE U.S. NOW HE IS REPAIRING FOR A FULL ON TRADE WAR. HE IS STANDING UP TO THE U.S. THE WAY THAT CHINA STOOD UP. WE WILL SEE IF HE DOES THAT. PAUL: IN TERMS OF THE IMPACT ON BOTH COUNTRIES, THE U.S. IS OBVIOUSLY A MUCH BIGGER ECONOMY. WHAT ARE WE HEARING ABOUT THE INDUSTRIES THAT MIGHT BE IMPACTED? >> THE OVERALL TRADE BETWEEN THE COUNTRIES IS LARGE. THERE ARE A LOT OF IMPLICATIONS THAT GO ALONG WITH THIS. ONE IS THE RISK OF ESCALATION. OVERALL FOR THE U.S. ECONOMY THAT IS NOT A LOT OF MONEY. BUT THERE ARE STATES THAT HAVE A LOT MORE TRADE WITH CANADA. AND ARE KEY IN THE MIDTERM ELECTIONS. MICHIGAN AND OHIO. ONE OF THE DISPUTES WAS OVER MEDIUM AND LARGE TRUCKS. OHIO MANUFACTURING IS ALSO INVOLVED IN SUPPLY CHAINS. THERE WERE CONTENTIOUS RACES FOR THE MIDTERMS THAT CAN DETERMINE THE BALANCE. THIS IS SOMETHING TO KEEP IN MIND AS TALKS GO FORWARD. HAIDI: OUR EAST ASIA GOVERNMENT EDITOR THERE. WE DO HAVE MUCH MORE COMING UP WHEN IT COMES TO THE U.S.-CANADA TRADE DISPUTE. HAIDI: LET'S GET A QUICK LOOK AT HOW ENERGY MARKETS ARE JUST CHUGGING ALONG GIVEN THAT WE DON'T HAVE A GREAT DEAL OF PROGRESS. WE KNOW THAT TREASURY SECRETARY SCOTT BESSENT TO SET TO UNVEIL SOME MORE DETAILS WHEN IT COMES TO THE ECONOMIC ISOLATION PLAN FOR IRAN. THAT IS EXPECTED A LITTLE BIT LATER IN THE U.S. ON MONDAY. WE ARE SEEING OIL DROPPING AFTER A COUPLE OF WEEKS OF GAINS. AS THE MARKET CONTINUES TO WAIT FOR THESE GLOBAL SUPPORT. DESPITE SOME BOUTS OF VOLATILITY, STILL UP MORE THAN 50% THIS YEAR. CHINA SAYS IT CONTINUES TO SUPPORT THE DIPLOMATIC AND TO THE U.S.-IRAN WAR. BEIJING RELEASED A STATEMENT TO THAT EFFECT. THE TIMING IS NOTABLE BECAUSE IT COMES JUST BEFORE THE U.S. IS SET TO UNVEIL THESE MEASURES TO PUNISH TEHRAN AND ITS ECONOMIC PARTNERS. LET'S BRING IN A MANAGING PARTNER FOR GEOPOLITICAL RISK. ALWAYS A PLEASURE TO HAVE YOU WITH US. WHEN ARE WE GOING TO TALK ABOUT IT? WE HAD A GREAT DEAL OF PROGRESS. IN TERMS OF WHAT IS GOING ON WITH WHAT FEELS LIKE A STALEMATE. WHAT ARE YOU EXPECTING GIVEN THAT IRAN IS AND HAS BEEN FOR A LONG TIME ECONOMICALLY ISOLATED? >> I THINK A LOT OF US WILL BE INTERESTED TO SEE WHAT SECRETARY BESSENT HAS TO SAY TOMORROW. HE WROTE A PIECE OF THE WEEKEND THAT DESCRIBES WHAT HE IS ABOUT TO ANNOUNCE AS AN ECONOMIC D-DAY. A SORT OF A BEGINNING OF A FINAL ASSAULT. IT FEELS LIKE THIS IS SOMETHING WE HAVE BEEN WORKING ON FOR MORE THAN A DECADE. OUR MAY BE SEVERAL DECADES NOW. ISOLATING AND SANCTIONING THE IRANIAN ECONOMY. WE REALLY HAVE VERY LITTLE SENSE OF HOW THINGS ARE IN THE IRANIAN ECONOMY RIGHT NOW BUT WE KNOW IT IS BAD BUT WE ARE NOT EXACTLY SURE WHERE THE PRESSURE POINTS ARE. THIS IS A REGIME THAT IS NOT POPULARLY ELECTED ARE FACING A MIDTERMS ANYTIME SOON SO EVEN IF THE PAIN GETS WORSE FOR THE PEOPLE OF IRAN, IT IS NOT CLEAR HOW THAT WILL CHANGE. HAIDI: DOES THE GREATEST IMPACT POTENTIALLY COME DOWN TO WHAT BEIJING AND RUSSIA COULD BE PERSUADED TO DO? WE KNOW THAT PRESIDENT XI IS EXPECTED TO HEAD TO WASHINGTON IN SEPTEMBER. IS THERE ANY LEVERAGE FOR PRESIDENT TRUMP? >> THE BIGGEST TRADING PARTNERS ARE CHINA AND WE HAVE A LOT OF OTHER BUSINESS TO DO WITH CHINA BEYOND IRAN. I'M NOT SURE WHAT KIND OF LEVERAGE THE PRESIDENT EXPECTS TO HAVE. OTHER THAN MAYBE TARIFFS ARE SANCTIONS. BUT WE HAVE THE CHINESE ALLOWED TO STAND AND TAKE IT. IF THOSE THREATS ARE RAISED. THEY HAVE PLAYED THEIR CARDS BEFORE RESPONDING TO BOTH SANCTIONS AS WELL AS BLOCKING MINERAL EXPORTS. I'M NOT SURE THAT'S A GAME THE PRESIDENT WANTS TO START PLAYING AT THIS STAGE. THE OTHER KEY PLAYERS IN THE REGION, AFGHANISTAN IS ON ONE BORDER, TURKEY AND RUSSIA ARE ON THE NORTHERN BORDERS. I'M NOT SURE WE HAVE ANY RELATIONSHIP WITH EITHER AFGHANISTAN OR RUSSIA. TURKEY MIGHT BE ABLE TO HELP OUT. THE ONE ENCOURAGING POINT THAT THE PRESIDENT HAS TREASURY SECRETARY TIM POINT TO IS THE ANNOUNCEMENT THAT THE UAE WILL STOP ALL OF ITS ECONOMIC RELATIONSHIPS WITH IRAN. THAT HAS BEEN A KEY CONDUIT OF MONEY IN AND OUT OF THE COUNTRY. IT IS THE GOVERNMENT ABLE TO CRACKDOWN ON THIS? PAUL: PART OF THE RATIONALE FOR THIS CONFLICT IN THE FIRST PLACE WAS TO PREVENT IRAN FROM GETTING A NUCLEAR WEAPON BUT A COUPLE OF THOUGHTS HERE. DOES THIS ENTIRE EXPERIENCE REINFORCE THE IRANIAN DESIRE FOR A NUCLEAR WEAPON AND PROVE THEIR POINT TO A DEGREE? IN TERMS OF ECONOMIC ISOLATION, EXHIBIT A, NORTH KOREA ENDURED DECADES OF ECONOMIC ISOLATION BUT THEY GOT A NUKE ANYWAY. >> YOU MAKE EXCELLENT POINTS ALL AROUND. OTHERS HAVE POINTED THAT OUT AS WELL. THE ATTACKS ON IRAN, AS YOU SAID, THEY REINFORCED THE CASE OF THE HARDLINERS WITHIN IRAN THAT SOMETHING NEEDED TO BE DONE. OBVIOUSLY THE BOMBINGS LAST YEAR AND THIS YOU HAVE DONE A LOT OF SETBACK THAT PROGRAM. I THINK EXPECTING TO RESUME THE COURSE OF NEGOTIATIONS REQUIRES TRUST TO BE BUILT ON BOTH SIDES. AND FOR IRAN TO TRUST TO THE FACT THAT ITS SECURITY IS NOT THREATENED. THEY HAVE BEEN DELIVERED A BIG SETBACK RIGHT NOW. THE QUESTION REMAINS WHAT GOOD DOES A NUCLEAR WEAPON DO? MAYBE IT HELPS IRAN AVOID ANOTHER ATTACK LIKE THIS. WHAT WE HAVE DEMONSTRATED WITH WHAT HAS HAPPENED IN THE LAST FEW MONTHS IS ATTACKS LIKE THIS DO NOT WORK. I DON'T REALLY CHANGE THE BEHAVIOR OF THE REGIME IN THE WAY YOU WANT TO CHANGE IT. PAUL: THE REGIME HAS BEEN AROUND SINCE THE 1980'S. PRESIDENT TRUMP HAS BEEN AROUND FOR SLIGHTLY OVER TWO YEARS. YOU MENTIONED THE IRANIAN REGIME DOES NOT HAVE TO FACE MIDTERMS FOR THE PRESIDENT DOES. IS THAT PART OF THE PLAY HERE, TO MAKE THINGS EXTREMELY UNCOMFORTABLE FOR THE U.S.? IN THE HOPE THAT THEY MIGHT BE DEALING WITH A NEW REGIME A COUPLE OF YEARS DOWN THE TRACK. >> TWO YEARS IS A LONG TIME FOR THE DIFFICULTY OF HAVING LOST THEIR ACCESS TO GLOBAL OIL MARKETS. THE STRAIT OF HORMUZ BEING CLOSE HAS INFLICTED PAIN ON THEM. I'M SURE THEY WOULD PREFER NOT TO. TWO YEARS IS PROBABLY SOMETHING THAT WOULD LOVE TO AVOID. BUT I THINK THE REAL QUESTION IS THE IMBALANCE IN STEADFASTNESS, FOR LACK OF A BETTER WORD. IRAN IS DEFENDING HIS COUNTRY. IT IS NEVER GOING TO GIVE UP ON THAT. THE HOPE IS THAT THE U.S. WILL EITHER GET DISTRACTED OR REALIZE THAT THE COST OF CONTINUING THIS EFFORT MILITARILY AND ECONOMICALLY ARE TOO HIGH. IT FEELS LIKE WE WILL STILL HAVE TO COME TO TERMS WITH SOME KIND OF AGREEMENT THAT NEITHER SIDE LOVES. WE ARE CLEARLY NOT THERE YET. WE WILL HAVE TO SEE WHAT THE SECRETARY ANNOUNCES TOMORROW. HE HAS HAD A COUPLE OF BIG ANNOUNCEMENTS OF THE LAST TWO WEEKS WITH THE YEN INTERVENTION AND THEN THE BUYBACKS OF U.S. TREASURY DEBT. HIS CREDIBILITY HAS BEEN DENTED IN THE LAST COUPLE OF WEEKS. IT IS NOT CLEAR THAT HE WILL BE RESTORING OR REINFORCING THAT REPUTATION. UNLESS IT IS SOMETHING COMPLETELY SURPRISING. HAIDI: AT ONE POINT DEZ FELT LIKE A WAR THAT NEEDED TO BE DEALT WITH BEFORE THE MIDTERMS. AS WE GET CLOSER TO NOVEMBER, IT FEELS LIKE THE INCENTIVE FOR INTEREST IS LAPSING. IS THIS JUST SETTING UP FOR CONTINUED WAR OF ATTRITION? >> I THINK WE ARE IN A POSITION WHERE IF WE ARE LUCKY, THINGS WILL STABILIZE INTO NEITHER WAR NOR PEACE. THIS WILL MAKE IT VERY DIFFICULT TO TACKLE BIGGER ISSUES. HOPEFULLY THINGS WILL GET TO NORMAL. AND THEN NEXT FEW WEEKS OR MONTHS. THE PRESIDENT WOULD HAVE BEEN DELIGHTED TO GET THINGS OVER WITH A COUPLE OF MONTHS AGO BUT HE REALIZED ONCE HE STARTED THIS IT WAS NOT REALLY IS TO DECIDE OR FINISH BECAUSE THE IRANIANS HAVE THAT CHOKEPOINT. PAUL: WE HAVE MORE AHEAD OF THE ASIA TRADE. THIS IS BLOOMBERG. ♪ PAUL: SAMSUNG IS ROLLING OUT THE LARGEST SHAREHOLDER RETURN PROGRAM. THEY ARE SHARING THE GAINS FROM THE AI BOOM. OUR ASIAN STOCKS REPORTER JOINS US NOW WITH MORE FROM SEOUL. WE ARE SEEING SAMSUNG SHARES LOSING A LITTLE BIT OF GROUND IN THE EARLY GOING. WHY ARE INVESTORS DISAPPOINTED BY THIS? >> SAMSUNG SHARES FELL 7% WHEN I LAST CHECKED AND INVESTORS ARE DEEPLY DISAPPOINTED BECAUSE OF THE LACK OF BUYBACKS OR CANCELLATION DETAILS. SAMSUNG ANNOUNCED THE BIGGEST SHAREHOLDER RETURN IN HISTORY. 80 BILLION DOLLARS INCLUDING CASH DIVIDENDS IN THE THIRD QUARTER. THE COMPANY ALSO SAID THAT INVESTORS SHOULD WAIT UNTIL THE JANUARY BOARD MEETING TO SEE HOW MUCH OF THOSE PROPORTIONS WILL BE ALLOCATED TO SHAREHOLDER BUYBACKS AND CANCELLATIONS. J.P. MORGAN JUST SAID THE COMPANY HAS FAILED TO DO THAT. THIS IS A NEAR TERM FOR INVESTORS AND EIGHT POINTED OUT THE ABSENCE OF A BUYBACK PROGRAM. SAMSUNG'S PRIORITIZE CASH DIVIDENDS OVER SHARE BUYBACKS. WHICH INVESTORS MUCH PREFER AS A REASON FOR THE NEAR-TERM DISAPPOINTMENT. THIS IS GOING TO SERVE AS A DISAPPOINTMENT TO INVESTORS. HAIDI: WHY ARE THESE RISKY STRUCTURED NOTES POPULAR AGAIN IN THE SOUTH KOREAN MARKET? >> SWITCHING THE TOPIC TO THIS RISKY STRUCTURED NOTE CALLED EQUITY LINKED SECURITIES, AFTER A HISTORIC SELLOFF IN JULY, THE SOUTH KOREAN STOCK MARKET SAW A SELLOFF. THEY ARE CALLED EQUITY LINKED SECURITIES. THEY PROMISED TO RETURNS OF 40% TO 50%. THEY ARE TIED TO STOCKS SUCH AS SAMSUNG AND SK HYNIX. AS LONG AS THE UNDERLYING ASSETS STAY IN THOSE RANGES, THEY PROMISED JUICY RETURNS TO INVESTORS. THERE ARE RENEWED INTERESTS IN SOUTH KOREA FOR THESE PRODUCTS. THEY HAVE HURT INVESTORS IN THE PAST AGAIN AND AGAIN. WHEN ASSETS ARE MOVING SIDEWAYS, THE KOSPI HAS BEEN MOVING IN THE RANGE BETWEEN 6000 AND 7000. THE STRUCTURED PRODUCTS ARE ALL THIN ATTRACTIVE. WE SAW THIS RISING TO THE HIGHEST SINCE APRIL OF 2023. WE ARE EXPECTING RENEWED INTEREST FROM RETAIL INVESTORS. FOR THESE RISKY PRODUCTS TO STAY FOR A LITTLE WHILE. HAIDI: OUR ASIA STOCKS REPORTER. UNPRECEDENTED SHAREHOLDER RETURN FANS. WHAT I STRATEGIST SAYING WHEN IT COMES TO THE SIGNALS? >> ABSOLUTELY. THE AI INVESTMENT BOOM IS REALLY PLAYING OUT IN THE MACRO SPACE. SOME SAY INVESTORS MIGHT BE DISAPPOINTED. AS FOR WHAT STRATEGIES ARE SAYING, DO YOU SEE STRATEGISTS OUT THERE THAT ARE SAYING 1350 AS ANOTHER LEVEL. OPTION TRADERS ARE ALSO SIGNALING FURTHER GAINS. INVESTORS ARE LOOKING AT THIS SAYING THERE WILL BE MORE DEMAND. CONVERTING SOME OF THEIR DOLLARS . PAUL:PAUL: WHAT ABOUT TRADER POSITIONING? AND HOW FAR THAT CAN REALLY GO. >> THAT 1400 LEVEL THAT WAS BREACHED WAS VERY TELLING. IT SHOWS THAT POSITIONING IS BULLISH ON THE KOREAN CURRENCY. WE SEE A 30% CHANCE THAT IT COULD TRADE AROUND 1300 BY THE END OF THIS YEAR. EVEN 1200 IS A POSSIBILITY BY THE SECOND QUARTER OF NEXT YEAR. ALL IN ALL, A PRETTY BULLISH PATH FROM HERE. HAIDI: WHAT ARE THE RISKS TO THESE POSITIONS? >> ABSOLUTELY. CURRENCIES AND FOREIGN EXCHANGES ARE NOTORIOUSLY DIFFICULT TO GET RIGHT ON THE MONEY EVERY TIME. IT IS OFTEN SEEN AS A BAROMETER FOR RISK. WE KNOW THE IRAN WAR IS STILL RAGING. SOUTH KOREA IS ONE OF THE BIGGEST IMPORTERS OF ENERGY FROM THE MIDDLE EAST. IT COULD BE A POTENTIAL CASUALTY. PAUL: OUR CHIEF ASIA RATES CORRESPONDENT. LET'S GET TO THE TOP CORPORATE STORIES WE ARE TRACKING. THE JAPANESE GOVERNMENT IS ALLOCATING MORE MONEY FOR A CHIP START UP. THEY SAY THE ADMINISTRATION WILL SEEK MORE FUNDS FOR THE FISCAL 2027 BUDGET. WITH PLANS TO PRODUCE CUTTING EDGE TWO NANOMETER CHIPS BY NEXT YEAR. THEY HAVE REPORTED A 12% RISE IN FIRST-HALF PROFIT. AS A SURGE GLOBAL ENERGY PRICES BURSTS UPSTREAM REVENUES EVEN AS THEY ARE SQUEEZED FUEL SALES. HIGHER PRICES ALSO INCREASE THE VALUE. WE HAVE MORE AHEAD. THIS IS BLOOMBERG. ♪ PAUL: ASIA IS HEADING INTO THE BUSIEST WEEK OF ITS EARNINGS SEASON. CXMT WILL REPORT FOR THE FIRST TIME SINCE ITS BLOCKBUSTER IPO WITH INVESTORS LOOKING FOR SIGNS THEY CAN BUILD ON OPTIMISM. MAKERS OF AI HARDWARE WILL ALSO BE IN FOCUS. PETROCHINA AND OTHERS WILL OFFER FRESH CLUES ON THE STRENGTH OF THE CHINESE RECOVERY. THEY ARE ALSO SUGGESTING A PLAN FOR A SALE. LET'S TAKE A LOOK AT HOW TRADERS ARE POSITIONING. WE ARE SEEING SOME INTERESTING MOVES WITH SK HYNIX AND SAMSUNG. TODAY WILL BE A CASE OF HOLD MY BEER FROM ALIBABA. >> VERY INTERESTING. YOU DO HAVE THESE BIG DEALS, THESE BIG SHAREHOLDER RETURN POLICIES. THERE IS A LOT HAPPENING. LET'S GET TO SAMSUNG AND SK HYNIX. WE HAVE THEM REACTING TO SHARES. THIS IS A HUGE SPREAD. IT IS WORTH WATCHING THIS LEVEL AS THE DAY GOES FIVE. THE SIZE OF THE DEAL IS REALLY SOMETHING. IT IS THE BIGGEST DEAL IN SECONDARY MARKET ACTION IN HONG KONG HISTORY. IT CAME REALLY QUITE TIGHT. IF YOU ADD THE HONG KONG AND THE ADR LINES TOGETHER. ONE STANDARD DEVIATION MOVE DOWN. THE INVESTOR BASE CLEARLY ONCE MORE ALIBABA SHARES ESPECIALLY AFTER THAT RESULT AS IT SEEMS TO PIVOT INTO BEING A CLOUD PROVIDER AND LESS EMPHASIS ON THE E-COMMERCE BUSINESS IN CHINA THAT IS FLAGGING. IN TERMS OF THE FUNDAMENTALS IT SEEMS TO BE PUSHING THE RIGHT DIRECTION. THIS REMAINS A BIG PROBLEM. THIS IS A LOT OF MONEY TO DIGEST. HONG KONG SHARES NORMALLY TRADE AROUND $50 BILLION OVERALL. THIS CONTINUES TO BE AN OVERHANG. THEY HAVE REALLY UNDERPERFORMED. THE ETF IN THE U.S. HAS BEEN A LAGGARD IN THE GLOBAL TRADE. THIS DOES NOT SEEM TO BE CONTRIBUTING. ON THE OTHER SIDE OF THINGS YOU HAVE TO THINK ABOUT WHAT ARE THEY GOING TO USE THIS MONEY FOR? THAT WILL BE TO CONTINUE TO BUILD OUT CLOUD INFRASTRUCTURE THAT WE HAVE IN CHINA. YOU SEE THE LIKES OF THE CHINESE INDEX AND OTHERS LOOKING TO BENEFIT. THAT IS WHY THE RESULTS YOU MENTIONED WILL BE CLOSELY WATCHED. CXMT AND ALL OF THESE OPTICAL NAMES. DO THEY BENEFIT FROM THIS? HAIDI: WE HAVE A COUPLE OF IPO'S TO WATCH AS WELL. AND SOME MEMORY TECHNOLOGY AS WELL. ANOTHER HOUSEHOLD NAME. >> THIS ONE IS INTERESTING. THEY PROBABLY MISSED THEIR WINDOW HERE A LITTLE BIT. IT IS COMPETING WITH ALL OF THIS AI PAPER. YOU SEE THE REFLECTION OF THE SCALE. ANOTHER BLOCK IS AROUND 10 BILLION. YOU SEE THE AI TRADE IS MULTIPLES LARGER THAN ANYTHING ELSE. THAT BEING SAID THIS IS ONE OF CHINA'S INNOVATIVE BRAND-NAME COMPANIES. IT WILL BE A REALLY INTERESTING REFLECTION OF THE MARKETS IN CHINA. WE KNOW OF THE CONSUMER SIDE TO CREATE BRANDS THAT PEOPLE WANT TO BUY AND DISTRIBUTE THEM GLOBALLY. THIS IS ALL THROUGH BECAUSE IT IS IN THE CROSSHAIRS OF THE TRUMP ADMINISTRATION. HOW THAT PLAYS OUT IN THE STOCK WILL BE VERY INTERESTING. ON THE OTHER HAND THEY ARE ON A MUCH MORE FIRM, FUNDAMENTAL GROUND. DEMAND PRICES ARE GOING THROUGH THE ROOF. NICELY TIMED TO INTO THE TOP THREE FOR SUPPLY GLOBALLY. IT WILL BE INTERESTING TO SEE HOW WELL IT DOES ON DAY ONE. THE FACT THAT CHINESE IPO'S ARE PRICED WELL ONE WILL PROBABLY SERVE THE STOCK VERY WELL. HAIDI: OUR MARKETS REPORT HER. -- REPORTER. THIS IS A GREAT VIDEO FROM THE WEEKEND. FROM THE ROBOT GAMES. THE SECOND WORLD HUMANOID ROBOT GAMES. 57 EVENTS. MORE THAN 600 TEAMS. MORE THAN 2000 ROBOTS. THIS WAS OBVIOUSLY THE HIGHLIGHT. I LOVE WATCHING THIS. HE DID MANAGE TO STOP. HE DID NOT DO THAT. HE DID NOT RUN INTO A WALL. HE DID NOT NEED A CUSHION. AT LEAST HE MANAGED TO GET THROUGH THE ENTIRE DAY. THE ENTIRE RACE WITHOUT QUESTION. WE HAVE SEEN SOME PRETTY DEVASTATING AND HILARIOUS INSTANCES OF THESE HUMANOID ROBOTS GOING DOWN. PAUL: I HAVE SEEN THINGS LIKE THAT OF MY LOCAL APART FROM JOGGERS. THE ENTIRE RUNNING INTO THE WALL THING DOES UNDERSCORE THIS ONGOING PROBLEM WITH ROBOTICS. THEY DO HAVE NARROW ARTIFICIAL INTELLIGENCE. THEY DO ONE THING EXTREMELY WELL. BUT NOT THINGS LIKE STOPPING OR UNDERSTANDING CRICKET. THIS PRETTY MUCH IT FOR THE ROBOTS. THEY RUN REALLY FAST. THERE WERE 666 TEAMS INVOLVED IN THIS COMPETITION. BUT WE WILL MOVE SWIFTLY ON FROM THAT. THERE ARE TENNIS PLAYING ROBOTS. THEY CAN DO A BACKHAND. I'M NOT SURE WHY YOU COULD TEACH A ROBOT THAT. YOU COULD JUST MAKE IT AMBIDEXTROUS. THERE ARE BALANCE ISSUES AND LIMITED AUTONOMY. WHAT WE KNOW ABOUT TECHNOLOGY AS IT GETS BETTER, NOT WORSE. HAIDI: IT DOES. THE BOXING LOOKS GOOD AS WELL. THE KUNG FU CHOREOGRAPHY. WE WILL HAVE TO LEAVE IT THERE. WE ARE NOT QUITE THERE YET WHEN IT COMES TO THE OLYMPICS BEING TAKEN OVER BY HUMANOIDS. THAT IS IT FOR THE ASIA TRADE. OUR MARKETS COVERAGE BEGINS NEXT WITH MARKET OPEN IN HONG KONG. ♪