Zhongji Innolight Stumbles in Hong Kong Debut | The China Show | 7/30/2026

We understand that the five plus years of inflation above target cannot be cured in nine weeks, or by a single month of modest price decreases. This fed will not waver. Fed Chairman Kevin Warsh They're defending the decision to keep rates on hold, with three FOMC members calling for a hike or watching the China show on Yvonne Man with David Ingles. Good morning. We're counting down to the open of markets in Hong Kong, in Shanghai and in Shenzhen. Let's get to our top stories today. Stocks across the region. As you can see on a benchmark basis, flat under pressure. Underneath the hood you have long dated Treasury yields jumping as traders question the French credibility in the fight against inflation. Data center component maker Zhongyi and allies set to make its Hong Kong debut after raising close to $7 billion in the city's biggest listing in years, and China's AI disruptor moonshot, raising $3.5 billion in a larger than anticipated funding round that's ahead of its own IPO. Right. It's a day where you really have to focus on the micro and the macro. If anything, we're still waiting. Of course, a little bit more details on that Samsung earnings call for the second quarter. Certainly. That's one thing to watch here when it comes to where the eye trade goes. But we got to get back to what the fed did or did not do in some ways, right. How many times can you say hold. Yeah. Um, but still stay hawkish. But the bond market doesn't really buy it at this moment of how serious the fed is ready to really hike rates. Well I mean you look at how the market reacted once the statement came out. Yeah. And then once they got into the press briefing into into where we are. Right. And I think one of the headlines. I woke up to this morning was you had the fed that did hold. Yeah. But then you had a 30 year yield at a highest 19 year high at about since the mid 2000. So I guess the angst around the inflation story, debt burdens of course. And I guess to your point, at white equity risk assets, I was going to say equity market risk assets seem to be struggling right now, despite the fact that you're getting some decent earnings on the micro part, which you alluded to. Yeah, Samsung was pretty solid right then. And still the stock is lower. It's kind of like the SK Hynix sort of four that we've been seeing where they deliver, you know, really solid fundamentals 200%. You say north of growth in terms of revenue, but it's still not enough to appease, uh, the traders out there in some ways. So it continues to be that sort of trade. But even overnight. Right. You did have a mixed sort of US tech earnings wrap. You know, Microsoft actually gained meta was a disappointment on the outside of that. So uh, a lot of really digesting it in the last couple hours. Yeah. Yeah. As we go into today. Right. So I think the bar for markets to be in press is certainly much, much higher. It's not just in the U.S. and I think when you talk about this, the biggest debut, the biggest listing in Hong Kong in many, many years, the grain market suggested that we are looking at a lukewarm response. I think we're down about 4% on on in light as we go into the first trading session, which I guess goes into the fact that a macro is eating into the macro. Currently, the two year yield was down going into this morning to 30 yields on the upside. So you do the math and that you get an idea of the shape of the of the curve to your yield on your screens. You had the or closing the difference somewhat going into the Asian session today. The 30 year yield of course touched was about 5.2%. At one point were a touch below that. But that's simply academic. Just looking at how and on all in yield basis we are, as you can see on the ice, the chart shows back to 1920 year highs. That goes into the the equity market component to the market story today where you have US futures taking into account the after hours move in the US tech space. You have Taiwan. You have these new rules around Korea, which we'll get to in a moment. SK Hynix has done a further 3.3%. Um, as you look at, uh, on a benchmark basis, this is really what we're seeing there, 1.5% to the upside that we need to talk about the DOJ at some point, because that's the next one to watch on a macro front in the Asia-Pacific. Have a look at A50 futures just to note. So we noted in a light. We're also waiting for any updates in the Politburo on the China story. Uh, on top of that, there's this ongoing rally taking place here in Hong Kong with financials and Hang Seng Tech. We'll get to all of that and unpack most of those things over the next few hours or so. But just also mentioned we're also getting more updates coming through out of Iran there and the skirmishes that are again, taking. Yeah, we're still tracking oil prices here this morning as well. So that also reflects a little bit of the macro side of things. And really it goes to show through the angst, as you mentioned when it comes to that fed press briefing. Right. You think about the amount of questions that, you know, reporters kept pressing him on, on, on. Why are you still holding rates when inflation has been away from its target for for some time now? You did hear, of course, that still that hawkish rhetoric from the fed chairman, Kevin Warsh. Um, but it seems like you're getting more. It's not really just about what he said. Right. The fact that there are three dissents, all asking for hikes, does say something, right, that maybe this public family fight is getting a bit more public. Yeah yeah. It's no longer in the, uh, in the confines of the family home, as we just talked about there. But yes, I mean, despite the fact that you did have that decision to hold interest rates, you did have, of course, the fed chair, Kevin Warsh, reiterating that the central bank remains committed, uh, while of course not really having a lot of believers, when you look at market reaction committed to delivering price stability. Have a look. Let me reiterate there is no soft inflation target. There is no soft implicit target. Not on this committee's watch. Let's bring in our Bloomberg Economics chief U.S. economist Anna Wong. She's been standing by and joins us more with more from Washington. And I'm sure you were watching all that unfold very closely earlier on this morning. Just walk us through, you know, I mean, the amount of questioning and people have really pressing him for answers and why still hold. Um, what was your biggest takeaway from this decision today? Yeah, I think that had he canceled his press conference, then the 30 year would not have spiked as it had, because going into this meeting, the majority of the analysts on Wall Street believe that the fed will hold. And in fact, in the next, in the 30 minutes after the fed decision, uh, long term yield was pretty stable. It was only mid-way through his press conference where where I think investors started losing patience. Um, became very frustrated because what they were looking for is for Warsh to explain why the fed did not hike, and also what are the criteria for the fed to hike in the September meeting? They got none of that. And ultimately, investors likely walked away, concluding that despite his repeated insistence that the fed is committed to 2% inflation, he has no real plan or tactics to translate that into action. So how do we read through if that is at all possible, from the lack of details overnight, from the Asia-Pacific standpoint, of course, uh, into future meetings of the fed. I mean, to your point, right. Market reaction. This is from your research, by the way, we're showing on the screens the pricing around September all through December actually fell. Can markets expect the fed to be on hold until they blatantly tell us there about a hike? Yeah. So I think partly is that when the long end of the curve Really spiked, like what we are seeing right now. That is going to exert a lot of restraint onto the housing market and also tighten financial conditions. And as a result, it actually ironically, uh, reduces the the, um, likelihood of a hike in the next meeting as the economy slows altogether. So that probably is one of the calculus for why September uh, chance of hike also went down. Anna, thank you so much. Anna Wong. There are Bloomberg Economics chief U.S. economist, by the way. You can check out more Nana's work there. It's on Twitter slash X, of course. She has a currently an eight part guide, I believe, to trying to decipher the language coming through and the style of communicating coming out of Kevin Warsh and and his team there. All right. Uh, the other big story we're tracking, of course, is, uh, the biggest trading, the biggest trading debut here in Hong Kong in many, many years. Zhong Ji in a light, uh, close to $7 billion IPO here in the city. It's the biggest since, I believe, 2019. Uh, great. Markets were lackluster, down about 4% last we checked as we go into the open today. Uh, let's bring in Julia for forget to hear our Asia equity capital markets reporter to tell us more about this deal and the significance, of course, of this cash free cash race. So, as you said, it's the biggest in seven years. So there's quite a lot hinging on its performance. And it's doing well. It's the biggest since Alibaba's 2.9 billion listing, uh, back in 2019. And it's really a key, um, example of the whole thing that has been driving Hong Kong IPO activity this year. Basically, it's in the I infrastructure supply chain. It shares had before the drop in the last month. Yeah. Um more than doubled basically. And so it's been a key beneficiary of the eye boom. And we've seen many other companies in the whole infrastructure space coming to Hong Kong a list in Hong Kong. So it's it's really the the biggest example of this theme. But now obviously in a way it's coming at a very different backdrop to a few months ago. Obviously there's a lot of concerns around, um, excessive spending. Its biggest clients, uh, some of the US hyperscalers. So it's quite, uh, connected to the whole, um, the jitters that we're seeing over the CapEx. Yeah, I think it makes up about 40% of the revenue comes from their customers, like alphabet, Amazon. Uh, meta. So navigating those geopolitical tensions is certainly very key. So what can we expect on a debut today? So as as David said, the grey market wasn't great. It was down 4%. And it did price at a 20% discount to the close. Uh, mentioned that was on Monday though. Since then the shares have come down quite a lot. So the discount was narrowed significantly. So it's probably fair to say that we're not expecting a huge pop today. Um, if it doesn't drop, maybe it'll be flat. Uh, it's just coming at a worse time than than other other deals. Um, previously, there's a lot of concern about the valuations have just run on way too high that the, um, uh, spending is not sustainable, so we're not. So whilst it's obviously the largest deal in seven years, we're not expecting a blowout, uh, performance. All right. Uh, that ceremony underway there at the Hong Kong exchange. I believe that's where your headed off to next. We'll see you there. Our Asia equity capital markets reporter still ahead. We're talking more about the fed and the market reaction we've been seeing. The dollar certainly has cooled uh, since that fed decision here to hold HSBC. Paul McColl joins us to discuss of course, what went down overnight. And what does this mean for really the FX world. All right. Coming down to the open of trade in Shanghai, in Shenzhen and here in Hong Kong, futures are pointing, uh, as you can see, coming up on your screens, of course, as we go into this, uh, big IPO today, I think we're lastly called slightly on the weaker side of the quarter as we approach the opening bell 18 minutes away. There we go on your screens. This is the China show. Well, I think Warsh was a little bit more dovish than people expected, which is why you're seeing a rally on the two year and the long bond doesn't like it that long. Bond doesn't like that. They're not, uh, fighting inflation. I'm going to be looking for uh, you know eventually the next speech by Waller, because that's going to give us a sense of what did the core of the committee, actually, what does he think? And I also think many people on the board are leaning towards a rate hike as well. We've already gotten a lot of indication of that. And so I do think we do get rate hikes in September. I actually think today would have been better. The market reaction speaks very clearly that now we need to talk about what is the credibility of the committee, because it cannot only be talk, you will eventually have to follow through. And that's why the probability given this market reaction now has gone up. Quite significant, is that they will have to move at the next meeting. All right. Some of our guests are reacting to the Fed's decision to hold interest rates steady. Plus, of course, all the color in context. Um, if at all. Uh, during the, uh, during the briefing about, let's call about six, six hours back. Right. Joining us here in sets, uh, he's managed to get through with barely any sleep. So Paul McCandless will here with the global head of FX research at HSBC. He stays up so you don't have to. Do you watch the press briefing and everything else. What do you make of it in totality? Where are we now? Well, in totality, what we were just talking about is that there does seem to be somewhat of a sell America trade that had happened. Uh, they weren't very confident about the message being delivered. So we saw yields going up, Treasury yields. We saw the reaction the U.S. equity market and the dollar's softer. So this is the first time that we've seen this in a while in a good few months at least that the sell America trade had a had a glimpse of of coming back. How long lasting do you think this sort of steepen or trade is going to be? Because the fact that there are three descents. That sends a pretty strong signal that it just seems like these rate hikes are just being delayed more than anything. Well, actually, I think what it really means is that the next couple of CPI prints and labor market reports are so incredibly important in terms of what's going to happen in September. So we're probably more data dependent than we have been, and I think in quite a long time. So look, I think the market wants some some confidence and trying to understand what is this new regime looking like under the new chair. And it's still quite uncertain. The likelihood is rates go up rather than the opposite direction. What is positioning around the dollar tell you about where the dollar likely goes amidst that general backdrop? Well, the view in the bond market or the short term interest rate market is that the fed will be raising interest rates. But from our perspective, that they won't be on a prolonged period of of of of a pause. But in terms of the positioning of the dollar, I don't think the market is that long. The dollar, it's all, uh, you know, it's kind of waxed and waned over the last couple of months, but the only place where I think that the market is long dollars in a meaningful way is probably versus the Japanese yen. Mhm. And is I, I mean, one I mean we got something that's complicated. That's the line in the sand. Uh 163. We haven't seen anything as of yet. Of what the BOJ if the fed holds this week or what they have. What is the budget. What implications they have in the DOJ if any. I think that they're going to be unchanged as well. Yeah. It's highly unlikely that they're going to raise interest rates this week. I mean again it probably comes down to the messaging. What are they signaling about? Are they prepared to go faster. Like according to what the news reports were suggesting with regards to to raising interest rates. But there's probably some breathing room. The fact that the fed didn't move. But you talk about this line in the sand where there could be potential intervention that that line in the sand has been moving quite, quite a bit. So you can't be that confident that the line in the sand is 164 or so. But nonetheless, I think that given how the fed, uh, you know, its outcome from, from overnight, the BG can just sit back and probably have a little bit of breathing room. Okay. So how do we make market money in FX markets? Well, now that things do seem settled, I think I think from our perspective, we still think that the dollar is going to be grinding higher over the next, uh, the next few months. Okay. So as long as you still have a base rate hike to be in play and you still looking at other economies outlooks for monetary policy, maybe we're a lot of good news is already priced. The dollar still comes across as the cleanest dirty shirt, at least in the G10 uh, context. Okay, so I think there's been a lot of, uh, question marks still on the outlook for the euro. Uh, so you're trying to find opportunities to sell that, even something like the British pound? I think the Australian dollar in the back of the CPI numbers, which we had. I think that definitely takes a rate hike off the table. So there's a few currencies there that I think you could be looking to try and, uh, sell versus the U.S.. Do you think the RBA is done? Yes. Now you can cycle that. That's that's that's behind us now. Yeah, I think I think that's done. I think that the we did have quite a positive employment report, but that's not enough. Right. I think that again coming back to breathing room, uh, with the CPI numbers and also the way that the governor was talking about weak productivity growth, they've got they can sit back and wait. They were very proactive at the start of the year for the right reasons. And and if they can they're feeling comfortable. You've given 17 trade ideas. Oh you said most some of them have been quite have actually delivered and done. Well. Um, you said the clearest outperformance you seen is in within the Asia FX space. What's still going to work for the rest of the year, you think? Well, there's a small correction. There's actually a more than 40. Oh okay. There you go. Uh, but when it comes down to the Asian currencies, which have been performing quite well in our view and will continue to do so. One of them is a remember, you know, we've like to remind me on and off through, uh, different expressions, uh, since the start of the year, whether versus the dollar versus the euro or even something a little bit, uh, funkier like the Swiss franc. And it's this keeps performing. And I think what's happening there is that still, you have this FX policy bias from China to suggest that the currency is on this path towards, you know, getting stronger over time. It's very gradual, but it's, it's working and, and and we like that the other trade, which we like currency right now is the, the Indian rupee. Uh, given the regulatory changes that occurred and you're seeing the so-called CNR inflow actually happening and it's supporting the currency. So there's a window of opportunity for that to be performing better as well. So we're not spoilt for choice in terms of what to like in Asia at this juncture, in particular against what I'm saying about the dollar's still being relatively strong going forward. So you really have to pick your idiosyncratic stories. Can you clarify that for us? And when you look at which central bank out there has the loosest monetary policy, it's the PBoC relatively to three of the others. But that's also the currency where you expect more strength. And the opposite is true for the for the dollar and the fed. And of course, that the tightening bias that they might have square that circle for us. Why do we expect the Chinese currency to appreciate for the given that back row back? Well, it's a good question because what it really demonstrates over the last six months, if not longer, is that the behavior of the rim is not tied to interest rates or interest rate differentials is it's a completely different regime. And and if it was more aligned with what interest rate differentials were implying, then the exchange rate should probably be closer to seven, if not even above it. And I think it really comes back down to, you know, as I said, the policy guidance, the way that the corporates are dealing with their big stock of effects, that they're converting into local currency. And we think that's going to continue. Uh, the the underperformance has been the rupiah. I'm just wondering, have we seen enough from from regulators, from officials about ways. I mean, obviously with the bank governor having or leaving as well. Um, I mean, how much clarity are we still getting on that? I think if you look at the behavior of the exchange rate, it's actually been pretty stable in the last month. So it tells you the reaction function of the central bank to be raising interest rates pretty proactively has helped. Now, uh, is it a solution to the rupiah? Uh, I'd say probably not, because one, you're still going against this. I said the strong dollar tide. The second thing is just what's happening in terms of the structure, the balance of payments. A little bit of a boring topic, but, uh, those outflow pressures are ongoing so you can buy time. And I think that despite the change in the governor, the exchange rate has been stable. Uh, do we need to be worried about inflation at all globally? You know, oil prices here and there, they're 70 were close to 100. Uh, that doesn't seem to be showing up in rates markets as much as it did back in March. Look, I think we need to be very careful, of course, because it was only a few weeks ago where we all thought the tensions in the Middle East were, you know, coming down and this was going to be a series of calm for for an extended period and eventually maybe a solution that's completely changed. Okay. So the inflation numbers, which have been quite soft recently, are now a risk to surprising to the upside. So I don't think that we're out of the woods yet when it comes down to inflation, especially where energy prices are fall. It's good to have you. Hope you get some rest today. Paul Mac, global head of FX research at HSBC. Uh, take a look what it comes to, of course, the free market in Hong Kong. And certainly we're watching this debut in a light. This is, of course, a dual listing, uh, of the of the company that is also listed in Shenzhen. Uh, not too much excitement, I guess. Right now, uh, we are seeing the shares lower by 1%. Yeah. Um, grey market suggested something more, but I think in the cash markets it's somewhat of a gray opening. Kind of like the weather out there today. Okay, we have lots more ahead, including a preview of the trading day ahead. This is the China show. Your agenda today? Of course. We've been tracking this and a light debut in Hong Kong. It's the biggest one in years for the city but pretty lackluster start in the pre market here. Right now we're watching the likes of Jing Gold Moonshot. I will talk a bit more about what's been the plans there for the company. But yes the dig in gold at Ally Gold, scrapping that nearly $4 billion merger certainly could lead to some sort of reaction here today we're watching chips given the Samsung story and pretty decent numbers actually pretty strong numbers coming through from the company energy. Given what we've been seeing, oil prices as well. Financials in Hong Kong have been doing quite well as well. And of course, this tech rally maybe a little bit too well in finance. So it's I think it's the first time in about a year or so we're seeing some overheating signs on the technical side of things. We'll talk about that in, uh, in a moment. But yes. Uh, just to continue the earnings story and the Oriental we'll talk about that seems to be moving on the back of earnings and an upgrade. We have Yum China and Prada also injected in as far as results are concerned. Right. Uh, let's get to the trading debut today. And we are looking at a fairly subdued first day of trade here in Hong Kong. It has been, of course, listed, uh, in Shenzhen for some time. The opening bell, including the banning of that gong, quite literally. Why not proverbial. This is the China show. All. Right. Good morning. And we're counting down to the opening of the cash markets here, the biggest trading debut in Hong Kong in seven years since Alibaba listed and raised. What's 1112 billion back in 2019? Uh in a light is coming here. It's listing. It's raising about seven B uh and in a couple of seconds of course they'll be marking the open and the start of trade here in Hong Kong in what seem to be going into today a fairly lackluster open. But of course, it is just early days when you look at this one. Yvonne. Yeah. You got to look at the that that discount right, that we see in the Asian market. And whether we see that actually continue to narrow or not. Right. We have our BI analyst Sean Chen coming out um, here in the next hour. And he really thinks that it could be trading a bit more on the narrow range in terms of that discount. So certainly one thing to watch, given that they are the market leader when it comes to optical transceivers, are the part of the supply chain which has been a darling up until maybe recently. We have seen, of course, that the Shenzhen list of stock has come off some of its recent peaks. So certainly where that goes in the whole eye trade is one discussion, of course, and certainly a lot of questions about this company's exposure to the U.S. REITs that are key customers. Are these U.S. hyperscalers, right. So how are they going to navigate some of these geopolitical tensions between the U.S. and China, especially when it comes to this whole AI debate? That's going to be the key question there. I love body chat to suit today, though, by the way, I love it. All right. The back of a golf just happened. Nice gradient. Yes I like the gradient gradient effect there. Both shares and air are lower here this morning, with the Shenzhen listed shares heading more further south. Let's broaden out a little bit and look at what what we've been tracking right the last couple of hours with that fed meeting. We have to bring back to the macro risks out there. Right. Because now lingering question from the market as bond traders and the like wake up is is the fed behind the curve. The fact that you know, we've seen inflation be away from its target for the fed for for years now. And still you hear Kevin Warr say now why he decided to keep rates of the fed. Keep try to keep rates on hold. There is a sense that maybe the fed is losing their inflation fight credibility, right. That's why you're seeing well that's why the steepest sort of movement after a fed meeting when it comes the yield curve since the mid 1990s. Right. We saw that 30 year shoot up to a 19 year high. So there's that to do it that really has in some ways wobbled this equity rally as well. So not risk assets, not just the dollar but bonds on the long and have been selling off. I'm sure is looking like this though right. It's a little bit more stable. We're lower by about quarter 1%. Shanghai is slightly above water, but you are continuing to see a bit of that shakiness in that Shenzhen market. China is down close to 1%. We're watching of course, the chips, right. The financial story was actually quite strong, but still the stock reacted negatively. Perhaps that's why we are seeing the likes of Capricorn tax also lower by 2%. Media group. You see in quite some Japanese consumer names are doing a little bit better. We'll talk about the Hermes story in just a little bit, because quite interesting sort of lines of rhetoric came through from the earnings call about where they see the consumer sector. What indicators are they're looking at pork prices. They say to determine where sentiment is. Uh, cattle shows are slightly to the downside here. Today we're watching iron ore very closely. Shanghai crude also is elevated. We're up about 5% here right now. We continue to see more fallout when it comes to Shenzhen, where more than 1% losses. Now Hong Kong is looking like this. So yes, this rotation into Hong Kong seems to be gaining a bit more traction now. Right? We take a look at what was going on. Asia's tech had a stellar session yesterday as Dave mentioned right. The financials continue to do quite well here. We're watching very closely. Of course when it comes to you know where we are right. Dave has mentioned things are looking a little bit overheated in the banking space. But Asia's tech right. You know as a countdown to these earnings is going to be quite interesting. Right. Qaumi though is down by 1%. Interesting enough Macquarie actually just an upgrade on the stock. Um, so we'll see what the reasoning behind that is here today. But HSBC is slightly lower. Tencent and Baidu though are still in the green. Baba is lower by one. So not much really. I guess you could say direction of what we're saying, but overall things are looking modestly better compared to the rest of the region here today. 676 so uh, $4 China the cooling of the dollar is really strengthening the currency here today. We do have the likes of China from Goldman Sachs coming through in the next hour. You know they along with likes of Bank of America, a growing amount of economists are saying what we could expect from this Politburo meeting could be quite interesting than what we heard. Remember back then, September 2024, when the avengers of Chinese regulators, Chinese policymakers came through and basically unveiled, uh, you know, cuts and the like? So certainly maybe we would like to see some sort of stimulus that comes through the next 24, 48 hours or so. Uh, let's take a look when it comes to gold. So they scrapping this merger, uh, which we have been talking about months ago. Uh, the stock is doing this right now, so actually, maybe some relief. We're up from 4%. Obviously we're tracking gold prices as well after that fed meeting and also New Oriental. Right. So earnings were a beat. But Corey also upgrading this stock here. And you are seeing the stock flying in the pre-market. This is what it's doing here right now. We can fire that board. There you go 14% gains day. Yeah. Very nice day at school there. Uh for you Oriental uh, education if I'm just talking about this too, just to also mention the this rally across the financial space of the Hang Seng Finance Index has silently but very consistently, I think, over the past couple of days has had successive winning days. In fact, it's so much show chart goes back. That's price. That's a momentum gauge going back to early of 2025 here. So as you can see, fresh record. But for the very first time in a I would say about a year or so, uh, that we are now looking at a 77 handle. So above 70 of course, tends to indicate overheating signs. Just to note that we are in that sort of terrain. Given how quickly the rally has now, uh, come to fruition. Okay. Very, very quickly before I go, so we talked about the tech space and this outperformance in the Hang Seng index. So we're now up about 14% this current leg higher on the Hang Seng tech index. That is not the chart. We will correct that for you. In fact you know what. Why do we try and do this live TV? If I get asked my producers what do we spot? Can we, uh, orange box type and Hang Seng tech index? Oh, um, this is live TV that a lot of people watch this. Anyway, so we're going to give this a go. Can we try to please, just to correct the chart. But what it's going to show you is the downtrend that we've seen from the peak last year. We're at the upper end of that channel that take us all the way down. There we go. Hang Seng Tech t t Hang Seng tech. Not that okay. You know what? Okay. Fail. Yeah. Fail. Don't do that again. Well, live TV, why don't we talk about. Oh, no. I think we are going to get some. here. Here we go. There we go. Oh, there we go. There's the downtrend. 10% higher. 12%. We're at 14%. And as we were pointing to, we are at the upper end of the downward. No way there will be break above. That is something that we have to consider it in lieu of some of the technical issues here. You're going to give our producers a heart attack. Well, don't give me every day. Every single day. Stop. Stop making them do the things on live TV. It's tough. It's tough. All right. Let's talk a little more about, uh, cents on earnings here. Right now I'm looking at our chat, and this video is just like you owe me for that. All right, Samsung results. Let's talk a little more of that. That seems I've drawn a line under risk today, but there's still plenty of churn when it comes. Meanwhile let's talk about the macro font. We're seeing a sharp move the long end of the curve. Let's bring in our markets. Reporter Anthony Stevens. He's with us. Yeah a lot going on here today. Uh, Samsung finally taking up now uh, kind of conclusively as the earnings call begins, It seems to be a much cleaner picture. Remember that they have a lot more direct exposure than HBM exposure compared to Hynix, so they are benefiting from this spot price push. There is going to be a little bit more detail on shareholder return this coming soon. So very similar to Hynix. But the market is showing them a little bit more grace I want to say than high index. And that's important for Korea given that it's a much bigger company. Uh, and also important, uh, for the wider ecosystem because they have this foundry business. What is also interesting is that they continue to see a weakness in consumer demand. So this is not exactly good news for people who hold Apple or show me or these kind of things. Even Samsung is struggling to make money, even though it has its own in-house memory. So this memory chip, uh, kind of shortage is still a big problem for consumer electronics. So forgetting about the I trade for just a second. Now, going into Taiwan, finally, we have a day where, uh, company reports good earnings and the stock is up. So we have Ummc reporting good earnings and is almost limit up. That's is really important to stabilize Taiwan because under the hood of Taiwan there has been some huge downtrend. And Taiwan margin balances have gotten hammered because of that last thing in the stock market. We continue to see capital capital raising. We have quanta doing a GDPs. And as you guys touched on, uh, zongzi in a light, how those two trade in the coming days is going to be very important before we even get to the fed. People need to start making money on this capital raising. You know, uh, capital raising was very tough on people. Medium capital raising was very tough on people. Some of these days need to start making money for this pipeline to continue being as robust as it is. Okay, Anthony, thank you so much. Anthony Stevens there. On what's moving currently and what to watch over the next few days or so. Let's stay on the tech theme. And by the way, on detecting that Anthony just mentioned. We'll have more of course, in the ETF story. Oh yeah in a couple of minutes. Because that is the latest attempt, of course, to stabilize this market. Meanwhile moonshot AI has raised a larger than anticipated $3.5 billion in its latest financing round, writing certainly, the momentum at its breakthrough Kimi K3 model sends ripples for Silicon Valley. Let's bring in our China corresponding member and Lin Lo Ghosh. Um, tell us a bit more about what this tells us about investors interest in the company now. Yeah, it tells you that there is just a lot of appetite to invest in this company, right? Whose K3 model has really shocked the tech world to talk about his. It's fund raising. It's raised $3.5 billion, which is far above its own target of 1 to $2 billion. So it's a quite a valuation of 35 billion. And it's going to open a new round of financing. It's now seeking funding at a pre money valuation of $50 billion. And that's ahead of its expected IPO in Hong Kong possibly as soon as this year. And so far we understand that one of the key backers is a state fund, the National AI Investment Fund. So there's a lot of interest from the state and from private investors as well. Okay. Uh what? What is this about? The technology that they need? They're seeking more in video chat. Yeah. Again, this is from the information, which is reporting that the company is seeking more access to Nvidia's Blackwell chips to develop its next model, the K four model. And this comes as the U.S. has already accused moonshot of illegally accessing these Blackwell services in Thailand. And the U.S. is saying they want to investigate these Chinese AI models for IP theft as well. So at this point, it's not clear whether that would be more punitive actions from the U.S., but this is something that could potentially impact its future tech access, its client access, its reputation. It could impact fundraising as well. So it just adds to the challenges that it faces when it comes to the regulatory environment. All right. Thank you. And lo there a China correspondent joining us with the latest when it comes to of course a moonshot a still ahead. We've been talking about South Korea and this ETF market right. There are tightening curbs when it comes to leverage ETFs as it tries to stop a rout. That is why billions of dollars off investors holdings. While the details coming up next. This is Bloomberg. All right. We're tracking the Samsung earnings call here right now that is underway here. You're starting to see the stock actually turn a little bit more to the positive side because it actually for now it's flying on the Cosby here right now. There you go 7% gains for the stock. But we're hearing from the C-suite is that they're talking a lot more about where they see the constraints. Right. Memory supply constraints will be more severe in 2027. Perhaps that's what's really fueling the stock here right now. When is the overall consumer market demand softening in the second half? That's interesting enough, right? Because they also make their own cell phones. They also make. Yes. Uh electronics. Right. So they still see fully your mobile device ESPN volumes rising, but they are starting to see the softening demand, perhaps because of what we've been seeing here, higher prices and the like when it comes to, of course, these chips and the like. Yeah, we almost forget that they do a lot of other things. I mean, it's like the Apple Store apart from Chip to raise their prices on some products. Yeah, absolutely. Because of the same problems that the other part of their business is actually at the center of the chip and memory shortage story, which I think when you look at that, just on the absolute number itself, it's just mind boggling and just blows your mind when a company can report profits for a quarter of $62 billion. Right. That just underscores really how much money this, uh, this entire sector of the chip space is, is making right now between, of course, the few names there. Uh, the reason I mentioned that the CapEx story on to cue 16.8 trillion, of which the vast majority, 15.4 trillion was for chips. That's actually also coming through here out of this ongoing call. Uh, we're up 6.5%. The reaction, early reaction from our Bloomberg Intelligence analyst Masahiro Wakatsuki here, uh, discusses that. Can we get it up, please, if we can, to quote. Thank you so much. Uh, the the company's points for strong sales, operating profit growth as to Ivan's point and the guidance from the company moving forward, demand expands across the memory space with higher foldable display shipments for iPhone and Galaxy also adding some support to the overall Samsung, uh, story here. But yeah, so it's seems to be a very decent set of numbers and maybe hopefully adds to the stabilization. And I think they even said right when it came to second quarter memory revenue, according to side, it actually grew about ten percentage points higher faster than SK Hynix, uh, from the prior quarter. So maybe, you know, compared to SK Hynix, Samsung might have one, uh, for the second quarter here, but certainly that certainly is. Maybe that's why investors are getting a little bit more gray. So as Anthony said to the stock here today. Uh, on top of that, though, this bounce on the Cosby, perhaps because of what we've been hearing, the regulatory side of things when it comes to these leverage ETFs. Yes, uh, they have pledged some additional tools and measures to stabilize the stock market. We fell a 11, 12% yesterday. Uh, and really to curb the retail access to some of these very levered products, ETFs, uh, as a very good example of that, after the root wiping, um, billions of dollars of investors holdings, I think, to wipe out on the entire market itself has now exceeded, uh, north of 1 trillion in market cap has been wiped out, uh, since that uh, that decline from the top. Now, the steps were announced following this emergency meeting hosted by the finance minister. Uh, let's get the details of the latest efforts here. And he Sully, our deputy bureau chief, joins us from Seoul today to talk us through. They said. Yeah. He said, what prompted, uh, the authorities to come in with very strong, very strong measures this week? Yeah. Just like you said, the trigger was definitely a sharp market sell off. The coffee has plunged almost 40% from its June peak, and the market had circuit breakers for two consecutive days. Um, South Korea is experiencing this rout after it launched the single stock leveraged ETFs. And they have basically amplified volatility because they're heavily concentrated in a handful of companies such as Samsung Electronics and SK Hynix. Um, regulators have already announced initial set of restrictions that will take effect tomorrow. But last night's announcement reflects a view that these steps alone may not be sufficient. So this is essentially, uh, this essentially shows that the government is ready to further tighten the market if volatility persists. Okay. What I'm sure you're talking to a lot of analysts out there about what this means, right. Do you think these new measures will work? Will they be enough to stabilize the market? Yeah. So they can help reduce speculative trading over time, but they probably won't change market sentiment overnight. The government has outlined broad directions, like you said, such as, you know, possible investment caps and higher trading costs. But many details are still missing. Um, and ultimately, Korea's market is still heavily driven by the outlook outlook for Samsung and SK. So stabilizing volatility will depend not only on regulation but also on fundamentals and investor confidence. He su. Maybe just give us the background here. So we talk about these losses a lot. And I think you've gone through the market cap. Wipe out the declines we've seen from the top. And at the end of the day it's the retail investor that's been holding the bag here. Uh, what is our understanding of how much retail got involved in this rally bought at the peak. What are some of the conversations you're hearing on the ground? And as far as losses that many of these mom and pop investors are now having to deal with because of this decline we're seeing in the markets there. What do we know about that? Yeah, well, it is it is very controversial. And, uh, but the real issue isn't simply investor losses. It's whether those products should have been introduced in the first place. So a lot of discussions are kind of going on about that. Um, South Korea's stock market is much more concentrated than many others. Um, you know, so critics say that they, uh, that made leveraged products particularly risky. And one opposition lawmakers yesterday actually said that, um, and he actually even labeled the rollout a policy failure. And he said, um, the product has turned South Korea into a casino. Um, and he said the government was more interesting, higher stock prices over maintaining financial stability. So obviously there is a lot of controversy at the at this point. Mhm. Yeah, certainly a lot of lessons learned uh on what we've seen here. So thank you so much. Ah, deputy Seoul Bureau Chief Sue Lee. They're joining us with the latest on these latest curves, uh, other corporate stories that we're tracking for you today. Starbucks has raised its full year outlook after quarterly results topped estimates, suggesting CEO Brian Nichols efforts to win back customers with faster service and new products are gaining traction. The coffee chain posted a fourth straight quarter of comparable sales growth. The company says results reinforce confidence in its growth trajectory. Adani enterprises has posted a net loss of 21 million for the three months ending in June 30th, compared with a profit of $93 million a year earlier. The loss stems primarily from exceptional charges linked to the resolution of U.S. sanctions, investigations and revenue for the same period. surge 50% to about $3.8 billion. But putting more ahead. This is Bloomberg. Let me reiterate there is no soft inflation target. There is no soft implicit target. Not on this committee's watch. CapEx is preparing the ground for future growth. Nonetheless, the precise timing and magnitude of effects on the supply side remain hard to predict. I asked for a good family fight and I got one. I heard a lot of commonality on the questions. Were there different lines on the answers? You bet there was. In the high mountain there in Jackson, Wyoming. I'd like to also frame the big questions. There is a tendency, especially with the proliferation of meetings and press conferences, to get caught up in the myopic. That was Kevin Walsh a few hours ago following the decision in that briefing, of course, speaking after they held rates steady and, of course, cost. Um, there was a gap in information that the markets, I guess, interpreted and stepped into. Yeah. Uh, you see it in the long end of the curve, right? That three year yield surging on the back of that, as there is now this concern that the fed may be losing credibility here. I'm looking at my inbox here right now for the Bank of America. They just came up with their sort of report of this July FOMC decision. They said doubled and confused. Um, and basically, you know, the fact that there's three dissents in favor of a hike. But yet you still hear the old Kevin worth defending why they decide to hold. And really they said few starkly dovish remarks from the fed chair. Right. And he said, you know really the fact that markets are basically doing the Fed's tightening for them. Right. Given just the rally up in rates. So certainly that gets us even more question marks on really. Are they really ready to hike or not. But they say that does because of the credibility issue. This may mean there's more pressure for them to act really in September now. Yeah. Which the market did not price in. And they removed some of the pricing out of of the move in September. And the markets are now having to fill that gap. Right. And you know, with the lack of specificity on guidance, they're simply adding a premium in treasury markets, which is really pushing pushing things up. Um, we're just going to get used to still getting used to, of course, how the dynamics are, of course, with the new fed, with the new fed chair treasuries, to the point you were just making that. Right. So I think we're now slightly, uh, reversing some of the moves that we had from the overnight session, especially in the two year yields that were up ever so slightly. But yes, he the third year we're back about 5.2 5.2%. That's the macro picture. Uh, across these markets today there's a bounce rating across some of the tech space Korea, some parts of Japan, most parts of Taiwan, some parts in Hong Kong and China, lots far ahead. This is the China for. Us. Well I think Warsh was a little bit more dovish than people expected, which is why you're seeing a rally on the two year. And, uh, the long line doesn't like it. A long bond doesn't like that. They're not, uh, fighting inflation. I'm going to be looking for, uh, you know, eventually the next speech by Waller, because that's going to give us a sense of what does the core of the committee, actually, what is he thinking? And I also think many people on the board are leaning towards a rate hike as well. We've already gotten a lot of indication of that. And so I do think we do get rate hikes in September. I actually think today would have been better. The market reaction speaks very clearly that now we need to talk about what is the credibility of the committee, because it cannot only be talk, you will eventually have to follow through. And that's why the probability of given this market reaction now has gone up. Quite significant is that they will have to move at the next meeting. Oh, there you go. That was a commentary from the street there when it came to that fed policy decision to hold rates. And then of course, that press briefing, which was the seemingly dovish Kevin Warsh, was surprised the market in some ways. Right. And really the lingering questions. Right. Are they just delaying the inevitable of whether they have to actually hike in September now, or can the fed still hold for the rest of the year? Yeah. Which are all very valid questions. And the issue was he didn't really provide guidance to any of those questions that Americans have been asking rights in the art of deflecting, the art of deflecting. And I think anyone said it very best on her, on her Twitter, her ex account, when she said he could be a very good politician because he said a lot without really saying anything. Um, it's almost like Ronan Keating, you know, you say it best when you say nothing at all. Yes. Um, takes you to where you're going with um. Yes. There we go. Um, which is also when you look at markets today, I think when you look at Hong Kong, a bit flat following the rally we've seen in recent days, uh, and it's now shifted back into some of the old winners like Japan, Korea and Taiwan, which are actually ripping quite nicely. Uh, today, in fact, the exports about to show you that with the Nikkei, the Thai index, the Hang Seng tech, which has outperformed the last few days, have now seen a bit of a pause right now since like 300 coming up as well. On that very screen, there we go very nicely. The juxtaposition of Korean assets also coming up costs because Dak uh and some moves there to again uh protect the retail investor. Has it come too late though, in terms of just that specific part? Oil markets renewed attacks, in fact, an escalation in the last few hours or so. Ford, you look at oil and as you can see, we've been largely yawning at some of that VIX futures. Bottom of the screens have also not reacted to the latest escalation. Yeah we'll continue to watch. I mean at least Samsung is that bright spot here today after those earnings that came through. So you know you see that when it comes to tech. And the rest of all of that seems to be recovering after Samsung. Let's go to our markets. Reporter Anthony Stevens. He's back with us now Anthony. Yeah to stay with the musical theme back streets back. So we we kind of dynamic where we see good earnings and good results. That's very important for the tech trade. And we're starting with amongst the biggest names in Asia. And that's really reassuring. So in Japan you have advance test of beat and a raise up 13%, 14%. Uh, UMC in Taiwan UMC has been struggling in the last couple of sessions. Again a bit and a good numbers. You up 9% and Samsung off to a very choppy start. Very similar to a high index that gave people some jitters. The analyst call is going really well. The market is giving them a lot more grace than they did high index. And there are a lot more moving parts to Samsung to support the share price reaction. So 7% on Samsung is a very punchy earnings day. And that's drawing a line under risk over the whole session. Now switch the board again and you start to see the kind of, uh, I um, Charlotte's trade really stabilized today. You're seeing that across Taiwan unit micron. I had a couple of days back to back of kind of close to limit down moves. Now it's close to limit up. Yorkshire a pair of Samsung and Hynix is up 11%. This name has been off on off a huge cliff. It was down almost 40% from the highs. This reaction is going to be very important to stabilize Japanese retail sentiment. And you have the smaller names in Japan as well Tokyo Electron Murata on the I kind of semiconductor, uh, kind of basic materials trade kind of stabilizing. Finally after those concerns about Chinese, dove flipped the board again to the most pivotal aspect in the second half, which is what is going to happen to the all the deals that are coming in the ECM and DCM space, and how well do the trade going forward given the pace of capital raising? So we have two big capital raisers in Asia today, uh, quantum computer, the data GDS and the inner light IPO. These are on the back foot today as people are buying what fell down instead of new issues. And that balance between new issues and old issues is going to be very important going forward. We saw what what happened to space and America and the importance of new IPOs. Trading well cannot be understated in Asia. Okay Anthony. Fantastic. The context really in the relative space that one needs to make of course given. Given of course it only goes up to 100. Uh, in terms of your possible allocations there. So you have competing themes across markets today. You have Middle East tensions coming up. You had the fed conversation. You had melt up in bond yields. You have a decent set of earnings stories coming through as well. And you know, on aggregate age is better by about 1.2%. Arguably the bounce and the tech stories winning out currently. Joining us now is Hebei Chen, senior market analyst at Vantage Markets. Good morning. Uh, of the many things we perhaps touched on there competing, uh, themes across these markets. What do you as the biggest market story today and why? Well, I think there's no doubt that today Tiffany's the fed is leading the market narrative. And, um, it's I think, as you mentioned, that that sort of like, raised more questions than I had to answer the question. I think that what's next that all the markets will be looking forward to is, number one question is the when the that will hike. And I think the deeper Anthony's question is what is the trigger that will making the fed to make the move. And I think what the today what the fed saying to us is that we will do our job properly. I think they're very much trying hard to convince their to steal the target. But what they didn't say, and maybe this is the top one question the markets are asking is what is the roadmap to moving towards that? How are they going to narrow down the gap in between those 3.3 to 2%? I think this is going to question to impact the market quite profoundly and potentially will be the biggest catalyst for the second half of the year. Um, yeah. The interesting part I thought when he said was, you know what, the rates markets has gone up. You know, it's already doing the Fed's work for us in terms of tightening. Um, are we likely to see more of the sort of steepening trade moving forward here until we see a hike from the fed? Yeah. Yes. I think that's also the something that I feel extra bit confusing. And also concerning is that when he said that the market already do the job is sort of like market has already share some of the tightening job for the fed. I think that is also a warning sign for the fact that the feds are basically saying that they will be happy to move behind the market, rather than they were leading the market. So I think that was also an encouraging sign for the market to respond even more aggressively. So I think, as you say, that they will potentially see quite even larger volatility. We're going to see, of course, the bull market and of course the money market, because they are, as the caveat was, saying, that they are doing their job to respond to the inflation now. Mhm. Okay. Well it's gotten to a point where we all know of course markets have equity markets have corrected to the current level. Yields have risen. The 30 year has risen to its current level and it's almost become a relative trade. It seems stocks are now quite expensive relative to bonds from an asset allocation perspective. Do you think that might precipitate some flows back into into bond markets? Well, I think what you say the equity market actually push pull back quite a lot. I think that will have to take a quite a bit up to differentiate Asia view, because I will see that Nasdaq's back into the correction zone that has been down so much, and we know that has much driven by the eye trade within the. I try to have a bit of the association with the fact that that people are expecting the cost of capital will increase. I think that's definitely some of the impact of that. And also it has sort of absorbed a lot of liquidity from the equity market now seems to translating the impact and getting the impact more spreading out into a debt market. I think that's also on the trigger. And in terms of your question, operative Troy, I think to get into such an uncertain time that when the next high could come, um, maybe that earlier than everyone expected or they could be late much later. I think this is a period that would definitely a lot of uncertainty. And that will, as you said, that will definitely encourage multiple relative trade at this point of time. Yeah, we're watching what's going on in Korea. Right. And and quite a interesting sort of turn events for Samsung, right, where finally good earnings is leading to a positive reaction to the stock and really lifting the cost be. Do you think Korea can still lead this I rally for the rest of the year. Um, I think what I'm CFO KOSPI actually, I'm taking a more positive view in the way that I think the recent pullback, even though it seems quite sizable, I see that as a construction rebuild or an upgrade for the Korean market. I think it's just imagine that they told this building rises the more protectionist it definitely have to build up underneath for this building. So I think the cost is now going through a very healthy cycle. They exposed the issue of the overleveraged overcrowd trade, now have more policy or the more protectionist have been building in. So I think for that perspective, I feel quite positive for the longer term outlook for the Crosby. But whether or not they were leading the I uh. I think that also we have multiple competitors in the market now. China is one of the key competitors. We also had the of course, the Wall Street I player. So it's hard to say they were leading. But definitely for Crosby itself I think I feel more positive. Can we have we seen enough from the China AI story for that part of the market to perhaps outperform? Um, I think China, I will say that China's AI player do have two benefit or two advantages over these other peers. Number one, this is a pretty much a policy driven. The policy driven means that is quite selective. It basically the sectors, even the players companies handpicked by the policy makers. So I think that's one of the advantage there. Number two, it's probably more compared to the Wall Street is probably more liquidity insensitive. So when that was very concerning about the AI spending, concerning about the cost of capital, I will say that China's I play seems to have the beneficiary because they're getting support, more support from the top down. So in left to advantage I think that's over there. That would bring them more sort of the doing more leg room to run. Um, in terms of resets, I mean, we talked about Korea seeing a bit of a reset. Um, you could say that about gold prices as well. Yeah. Where to next for gold. Right. And we had a guest yesterday from, uh, LGT was saying, look, we're starting to see maybe a bit of a floor at 4000. Given the fact that central banks are now almost buying on this dip in gold. Um, are you seeing any sort of more of that opportunity now in gold for, for it to kind of head higher from here? Yeah. So interestingly, we see the gold prices are actually moving up today. And um, when they're responding to a quite hawkish, I would say hawkish tones from the Kevin Walsh. So I think that I agree with your point. I think that the gold prices do have a flow. That flow has been quite largely protected by the central bank's spying, and especially from the data point of view. I do think the central bank buying is actually coming back, though for May. They do slow down a bit, um, when that workflow spoke up, but now they're coming back. So I think they agree. I think they're 3900 to 4000 is the area that I do see that quite largely protected by the long term buyers. Heebie. We're gonna leave it there. Thank you. Hebei Chen their senior market analysts advantage markets. Still to come. We're continue to track Joji and his debut in Hong Kong. More next of course on the company's outlook with Bloomberg intelligence. Uh, they actually think that the eight shares should command a narrower discount to its mainland listing. But you can see right now the shares down some 6% in Hong Kong on the first day you're watching the Chinese show. All right. We're checking jongg in a light. Of course. You see, we're the debut. We're extending those losses here across the eight share market were down some 9% on the first day of trade there. So we're just about 45 minutes into the bang of that gong. And it's not looking too pretty right now. No, no it's I think we've seen we've seen better windows for listings here in Hong Kong. And not to say anything about the fundamental story of the company, which is obviously part of the story. But there's also, of course, some of the headwinds that we're having to deal with across the chip space recently. And I think when you look across the chip space in greater Chinese markets today, you're really seeing a downdraft there, not just in Gyeonggi and Shenzhen. You obviously see it here in Hong Kong. Uh, across some of the, uh, the SMI sees that the world also seeing declines here. Maybe on the back of the separate story across the rally we're seeing elsewhere again, like Japan, Taiwan and Korea. To put everything together for us. Joining us here in set is Sean Chen, Bloomberg Intelligence tech analyst with us here in said. This drop and we're seeing in cities, it's a surprise to you. Well, I think it's hardly a surprise as analyte has already been listed in Shenzhen, the debut of its eight shares. It's largely driven by the relative value, and I'd say it's its share debut. It's actually pretty resilient. Uh, given the ongoing pressure on the A-share, uh, I supply chain stocks, if we compare the discount, it's roughly 10% now putting at the actually the the third tightest stock among dual listed tech hardware companies trading both in Hong Kong and China. So tell us a bit more about what we should expect from an airline going forward here. When it comes to optical transceivers, I mean, they are lidar really the industry? Do you think they can sustain that sort of market share? Yes. Uh, I do believe in a lot of composed, a strong consensus beating growth in the next two years. In the near term, I believe securing upstream components would be a key, because the entire industry is undergoing, uh, a short supply of key materials such as optical chips and electrical chips. And Jones is in the light with its leading position in the market, is in a better position to secure these core components. In the longer term, we believe capacity expansion will be the key for suppliers to expand their market share, and with the IT share listing In the light can actually accelerate its overseas expansion in Thailand. To fund the, uh, capacity expansion and capture more market share, I'm looking at the breakdown of where they get most of their revenue right. And I think the full year last year was 90% was from outside the, uh, they obviously supply the US hyperscalers. How do we need to think about the risk of geopolitics? Uh, well, geopolitical uncertainty is a key concern for investors. But I do believe in the light. It's navigating the situation well, and it's doing things on two fronts. Firstly, it's actually actively migrating its production to Thailand for its overseas customers, and the share proceeds will accelerate that process as well. And the second thing it's doing is to prioritize its domestic exposure, which can sometimes be sensitive, its revenue mix from China, the domestic market actually decreased from 20% plus a few years ago to single digit percentage in 2025. So by doing this, two things at the same time, I believe in the light is navigating the geopolitical situation. Well, yeah, I think up until July I mean, this was a darling stock, right? People are saying this is the I. Supply chain bottlenecks that we're tracking here. The picks and shovels sort of trade. Um, but there's a lot of interesting technology that's emerging to the space as well. I mean, maybe you can educate us a little bit on what CEOs are cold package optics. How does these sort of next generation technology do that? Does that threaten you in any way? That's a very good point. So call Packaged Optics or CPO is an emerging optical interconnect technology that is competing with optical transceivers, which analyte is making. And a majority of the revenue comes from the transceiver modules. Uh, but that being said, uh, we believe that the pluggable modules that make will continue to dominate the market with at least a 60% market share up until 2030. And in the light is taking a lead in that 60% for the remaining 40%. That's CPO you've just mentioned. And also there are several other emerging optical technologies. Uh, in that front, we think the light also has an opportunity because we see it as more than a downstream module integrator. It does have the capability to design silicon photonic chips, which is a transferable know how to penetrate into, uh, for example, CPO and NPO. So that's how we see it analyzed. Longer term growth. Maintaining its lead in the traditional model market and penetrating into KPO and NPO Chan. Thank you. Fantastic. Thank you very much. Shaun Chen Bloomberg Intelligence Tech Analyst They're just, uh, really unpacking the, uh, the fundamental story across, uh, this the biggest debut here in Hong Kong in about seven years. Okay. Uh, just very quickly, since we're talking about chips, we're down 8% on the eight shares now for that company, Hanson tech down 1.2. And as you can see, some of these names um, listed in where are you. Okay. So these are both actually in Hong Kong and mainland China there is Kcmg in case you're curious where the stock is trading currently. Uh, we're all down quite modestly or significantly rather, uh, when you look at some of the price action today. China index. Yeah, this is one to watch. We're down about 3% on this one. Uh, going into the thick of the session. Yeah, it looks like a lot of the I guess the market is going back to Korea, which is quite interesting given those Samsung results. We're going to break down a bit more about that given the profits soaring some 250 fold when it came to those I memory shortages. We'll have more on those results coming up. And what does that say about really Samsung's outlook. Okay. US futures are about a couple of hours into of course that part of the evening session in the US. And you know, if you're curious why we are seeing some decent upside there. You are getting some punchy moves across some of the big tech names following the earnings after the closing. The closing bell, which will obviously be will obviously dominate the news flow and conversations when we approach. Of course, the U. As we approach the U.S. and Europeans. Yeah. The one who stood out really was Microsoft, it seems. Right, because it did see the shares climb in late trading after better than expected fourth quarter earnings and really helped by continued strength in cloud computing and AI. Bluebird tech. Anchor Ed Ludlow reports from San Francisco. Microsoft delivered what investors wanted to hear on two different fronts AI growth and some clarity around AI spending. Azure, the cloud computing unit, grew 43% in the quarter. That's its fastest pace since 2022, well ahead of expectations. And we got a figure for Azure annual revenue topping 00 billion for the first time. They looked as well outside of financials. So think about like how are the eye products doing? Microsoft said that 365 Copilot now has more than 30 million paid seats, up from 20,000,003 months ago. In the March quarter. It beat on the top line a beat on the bottom line. But the clarity on spending on a quarterly basis. Capital expenditures $41 billion. That represents a jump of 70% year on year. And accounting nuance Microsoft lowered its calendar 2026 CapEx expectations to 75 billion from about 90 billion, but stressed this does not represent a lower investment. It stems from extending the useful life of data centers and office buildings from 15 years to 25 years, and what that does is it shifts more future data center leases from finance leases to operating leases. Essentially, net net, the spending and investment expectation that Microsoft has is exactly the same. Nevertheless, that communication was really cheered by investors in the after hour. Also, perhaps the strongest signal on the AI future spending. Microsoft disclosed 30 billion of new data center leases and commitments during the quarter. And that brings the total future lease commitment for Microsoft to $329 billion. A year ago, it was just shy of 200 billion. Bottom line Microsoft's message wasn't that it's spending less on I. It's the I demand remain strong. Azure is accelerating. And despite our accounting changes, that lowers a reported CapEx figure. The underlying infrastructure build out continues at pace. This is Ed Ludlow for Bloomberg News in San Francisco. Right now staying on the tech earnings theme out of the US here. So let's have a look at meta. Of course, shares there fell in after our session after a disappointing revenue forecast there for the current quarter. It expects to come in 64 billion. The mid-line missing. Of course, the analyst estimate of 63.2 billion. ARM holdings also slid in late trade. That's after pointing to sluggishness in the smartphone industry. You have royalties from handset makers accounting for much of the company's revenues. Yeah. If you take a look at when it comes to ARM, that does in some ways have a read through to SoftBank. Right. So certainly that's one thing we're watching very closely here. And there you are. You see the shares down uh close to 2% in Tokyo here this morning. Uh also we're watching likes of LG core LG electronics. Uh, there is this line that LG is in talks with hyperscalers and U.S. utilities for a supply deal in the second half. So that's really helping some of these stocks. Here is why we're checking Hancock Cosmetics manufacturing. That's always nice for makeup and makeup always. We always like K-beauty don't. Yeah yeah yeah yeah. There's always a need for makeup. Certainly. Okay. Minimax and Z, I uh or Z I knew of course a big the big news in the I lab space is moonshot here surpassing the funding goal of 35. So that's something to watch. And of course, uh, Budweiser Asia Pacific that this is an earnings story here. Of course Korea helped offset China slowness. But yes. Well I can understand why. Perhaps the spike in alcohol consumption. Use your imagination. This is Bloomberg. Right. Welcome back. Uh, we're zeroed in on the Korean markets. Uh, recently, today, of course, the iteration of that is Samsung and the breakdown of the company's earnings. And I believe they just wrapped up, of course, the earnings call. Uh, we have an ongoing blog on the Bloomberg terminal in case you need to have a look and browse at some key takeaways there from the earnings call. Uh, markets are reacting quite positively to the news. Wasn't initially the case. And then we did pick up some momentum to the upside. And as you can see Samsung is trading 5% to the upside. And you look at some of these numbers, you would think at one point if you're not too familiar, you'd think these were typos. But yes, 60,000,000,250 Fold, of course, increase their, uh, in profits on the chip business. And they're also giving some guidance across the other businesses that, you know, for many people have been forgotten. Really, we seem to forget that Samsung is a diversified electronics company. And I think maybe that's initially why the stock was going to be wobbly, you know, in the first part of the session, because the first loss in the mobile division does show that when it comes to these rising memory chip prices there, it's beginning to really squeeze on some of their downstream businesses. Right? So certainly there is that factor that you have to contend with. But then again, as Dave mentioned, some of these numbers when it came to Chip, the chip arm are quite eye watering. And I guess you can't really ignore it here right now. And that's what's leading to this rebound. But you know, it's really kind of a welcome relief given the fact that in the last two days, the stock itself has lost a fifth of its market value. So yes, a 5% bump is much appreciated. I think today it is. And the market's giving. The company just gave us a very decent fundamental story perhaps for buyers to swap back in at these, uh, at these current levels. Uh, let's, uh, I guess it also helps that somewhat. The South Korean authorities have to put in some backstops as far as some of the ETF. So fixing some of the piping around the markets itself. Let's bring in our cell bureau chief Kat Barton who's with us right now. And it's certainly the top story I would imagine, in your side of the world Kat. Um, so we had a look at some key takeaways there. What stood out to you from what its earnings report or the earnings call? Just get us up to speed. Kat it's exactly what you're saying. Uh, obviously they're amazing figures. But the key thing is those those long term deals that Samsung is flagging because obviously that is what could really help them break this. Uh, you know, previous boom and bust cycle in the semiconductor industry, if they can ink those deals, if they can keep it going longer term. They are very optimistic. They are talking about seeing this incredibly strong demand from these AI service providers running through at least 2028, so they are very optimistic. The ironic thing obviously, is again, as you flagged, this has been an absolute, you know, stellar results for the semiconductor division. But the irony is that those rising, rising memory prices, uh, hitting that other section who make mobile phones and also need chips, which now are very, very expensive and that division has tipped into a loss. So it's a mixed picture. But obviously the semiconductor results are so spectacular. It kind of carries everything else. Yeah. What does it mean for the stock then, Katz. Well the interesting thing obviously now we're seeing, uh, you know, a positive on the stock. But yesterday SK who missed, uh, missed their expectations. They were really hammered. So the interesting thing in the South Korean market is it's been so volatile recently. And a lot of that is actually linked to these leveraged ETF products, which the South Korean government allowed for domestic roll out in May. So you had South Korean retail investors piling into leveraged ETFs. Single stock ETFs for Samsung and for SK. And that has really just accelerated that volatility. So a lot of the huge swings in the movements are not really connected to the news per se. But they are just kind of mechanical linked to these ETF products. The government is really aware of this issue. They held an emergency meeting last night, and they said that they're really going to step up curbs, including trying to raise the cost of these trades, trying to limit, uh, retail investor participation in them. And hopefully, um, we'll see some of that coming through and helping to stabilize the cost. Be. Cut it. The strange thing about the story is the some of, you know, the ETF story in Korea is extremely fresh and new. Uh, the way we talk about it, usually in this case where, you know, the government backs down and reverses some of the moves, uh, would be Several years after they reinstated or introduced something. These are several weeks, if not months old. Help us understand now, what is the general attitude of the government and policymakers towards these leveraged products? Did they make a mistake? Are they doing this to protect the retail investor? Where does his story go from here? They did it at first because South Korean retail investors love risk, right? So they were sending vast amounts of money into leveraged risky retail products in the US. So South Korea you know, fairly enough thought how can we keep that money at home? So they allowed these ETF products domestically, as I say, in May. But the government now has regret. The finance minister came out yesterday and apologized. The heads of the two main regulators also apologized. They're saying they should have looked more closely at the products. They should have scrutinized them. They maybe rolled them out a little too hastily. They were really being criticized by opposition lawmakers in parliament yesterday, with one of them accusing the government of turning the country into a casino. So there's a lot of backlash, and I think the government, with this new slew of measures, is desperately trying to protect and roll it down. Kat Martin, our cell bureau chief there, and I think we're just showing it to our viewers. The correction we've seen in the markets, including the stellar earnings recently, it means the Cosby index is now trading at a crazy four times earnings. Wow. The another record. Another record. Not the cheapest ever. And by an extremely wide margin for a Bloomberg client. You can check out the Samsung Story, the iTunes and credit stories in you know, amidst of course, the earnings results there. The macro story in Korea, the chart we just showed everything of course. Uh, on this TV on your Bloomberg terminal for more commentary, context and also analysis. Yeah, right. We're still trying to decipher what we're hearing from this earnings call. Is the pricing durability right from Samsung here moving forward these long term contracts. Are they going to be at the sort of today prices when it comes to memory. Are we seeing a super cycle or just an ordinary one? Um, so that's only one thing to watch. Uh, coming up, we're talking about the Politburo meeting, right? It brings us back to do you remember September 2024? Yeah. Um, you know, the likes of, you know, Cossacks and Bank of America. And I was, you know, it's reminiscent of that policy pivot that we saw just two years ago. Sean tells us more what to expect this time around at that polar bear meeting now underway. This is Bloomberg. All right. Uh, we teased it before, right. You're going to see a chart here that really basically shows where the trajectory of the economy of China is going here right now. And a lot of people among the, you know, economists or economists community is talking about, you know, is this reminiscent of what we saw back in 2024? You may remember that day, Dave. I still remember it very vividly, like the back of my head when Pangong Shen came live in this press briefing saying, we're going to cut rates, we're going to do this. Um, and it was this massive sort of policy pivot that we saw, uh, from not just the PBoC, but also other policymakers who are rolling out this broad stimulus to stabilize growth and markets. And some of the macro conditions were were similar. What we see now, right there was a tech led market rout. Retail sales were weak. Um, and so certainly there is some comparisons to that. Uh, you hear it from the street, right. So the likes of Helen Child from B of A, her team is basically saying, unlike the policy package announced back in autumn of 2024, the focus is to be on improving the delivery and effectiveness of existing stimulus measures. Meanwhile, Goldman's way, Sean says the current setup resembles that time in some respects, and they expect the Politburo meeting to deliver strong easing rhetoric. So the stage is set. Mhm. How special will the performance be compared to uh, quite a memorable September 9th 24 of course, as we just alluded to there who joins us here on set. Chief economist at Goldman Sachs. The key question is how bad is the economy doing. And is it bad enough that it merits something of a big bazooka? Right. If you look at the domestic economy. I think there's a lot of resemblances. The difference is on the tech sector. I'm sure you've been talking to a lot of guests about the technology and all that. That's different. But if you just as you're on the domestic economy, what is going on? You're seeing domestic demand, whether it's a consumption or investment, a slowing down, which is very similar to what we saw middle of 2024. And you also seeing the pressure on local governments, uh, adding up, uh, we saw in June the land sales and revenue down 40% year on year. The local governments are now more aggressively collecting tax revenues, which is a tightening the conditions for businesses. Remember, in 2024, local governments were also under tremendous pressure, and that was one of the reasons the policymakers turned. So what? How could they unveil this sort of what what sort of way could they show this easing tone? You think? Right. Right. So we'll be watching the language and to see remember, in the April Politburo meeting, they were very happy with a Q1, uh, GDP growth of 5%. And so they said this is a better than expected. So, um, in the second quarter, uh, you know, understandably, they ease off the gas. And we're expecting in this readout, there should be acknowledgement of a weak domestic demand. There should be language. Um, we should increase or accelerate, uh, domestic, uh, you know, government bond issuance, uh, government led investment to the Six Network's um, areas of that, you know, in the 615, a five year plan they said they were going to do. And this is a moment they can accelerate and just use the tools that they approved at the March 2nd sessions. Right. We still have that 800 billion, uh, new policy, uh, based financing instrument that they have not used yet. So just a start to accelerate the pace of a fiscal, uh, spending. Uh, and that will do a lot in accelerating sequential growth in the third quarter was fiscal spending, largely to the reason why growth was so slow is that the lever that they will likely mostly pull? Yes. Our calculations suggest are from Q1, Q2, there's a some sequential decline. And of that decline, nearly half of it can be explained by tightening fiscal impulse. Um, so the other half between the Iran war, uh, that that impact on chemical production, petroleum production, as well as the adverse weather conditions, um, these those are the second, um, part of the explanation. What about demand side stimulus? What are your expectations there? I mean, the way the sum of the investment of the underground pipelines or building up, uh, data centers, that is, demand is not consumption, but investment is also part of the demand. So we do think what's important is the demand side, uh, a stimulus, the demand side to boost it. That's what we needed to offset the private sector weakness. And that comes together the demand story. And the fiscal story comes together in the form of subsidies. Do you think we'll get a return of that? How do you think the fiscal then affects the consumer? All right. Good question. I think at this point a lot of the projects are it is hard to find a projects that give you a lot of returns. Uh, in other words, if there's a project that make financial sense with a lot of a financial returns, I would think a private sector, uh, would borrow from banks or collect, uh, financing elsewhere and invest in those projects. So the fact is that after such a long period of strong investment of growth in China, um, you know, it is hard to find projects with high returns. But within the projects, it was a low returns. There are still projects. It was big positive economist externalities. Right. If we can fix all these pipelines, look at the flooding in the different cities. And if you can build sort of the urban area infrastructure, even though they don't give you financial returns from the safety from people's livelihood, there is social returns for those projects. I think they will be doing more of that. We got so many news this week about the innovation that we're seeing in the tech sector, the AI sector, whether it's Kimi, whether it's six MT was listing debut, whether it's doves and how there may be some in some ways narrowing that technological gap with the West, how do you see that playing out for the the broader economy? Because right now it's been quite narrow in terms of where you're seeing that growth in the tech sector, do you see that in any way spilling into the broader economy? I think innovation in China most likely will be broadening out in a lot more, uh, industries. Um, even yesterday, the CCTV news or talking about the robotics, the AI and innovation drugs. So you're seeing more innovation. And that's based on, you know, the past a couple of decades or what the government has done to cultivate and promote these, uh, sectors. Um, I think in terms of, uh, uh, the policy implication when I was in Beijing last week and, uh, my sense is that because of these good news, uh, it reduces the pressure on policymakers because every day you're seeing these good using the economy, then you don't have as much urgency. This is a difference that between 2024 versus now, right. Uh, they recognize domestic economy is weak. They need to ease. But at the same time, there's good news. It could, um, make them want to take a more. Let's just do the things that we already said we're going to do, and if that's not enough for them, we can do more. But no need to to go all in. Uh, like, uh, September 2024. I think permits are coming out tomorrow, if I'm not mistaken. How do you think. What what do you think that's going to show about July and how the economy did? Yeah. July. When we look at the high frequency data, um, our equity analyst channel checks, uh, with on the ground. Uh, it doesn't look very strong. Um, and plus, there is a sort of seasonality, uh, every quarter, the last a month, they tend to be strong, but the first month tend to be weak. So for a PMI, as we're expecting both manufacturing and not manufacturing PMI tomorrow, uh, to decline from June to July. Okay. Are rates low enough? Um I think nominal rates certainly at very low levels. Yeah. Um, but if you think about inflation expectations. So currently with a higher oil prices and, uh, you know, memory prices, you have inflation not that low but inflation expectation from our client conversations that people just think the current a higher inflation is a temporary. So inflation expectations are low. So if your inflation expectations are low that means your real interest rate is still too high. And how does that affect things like demand. Because you mentioned demand for credit alluded to that. Things like demand for mortgages for example, you know you know, are rates low enough to incentivize people to stop renting and start buying. Is what I want to get. Because if you solve that you solve most of the consumption. Yeah, yeah. That's the point we have been making. Like sometimes that in certain areas, if you can figure out the financial ways for the math to work, then the market will help you, uh, stabilize the property sector or triggering an increase in demand for property. So, as you said, um, people don't live on the street, so either your rent or your own. Right. So the your calculation is a rental yield versus a mortgage interest rate. I'm simplifying it because there are other considerations. So if your rental yield let's say 2% in top tier cities Um, mortgage rate is three over 3% or 3.1 is the latest. The math doesn't work. So I do think that, uh, reducing that mortgage interest rate, uh, can help. Uh, you know, in Hong Kong, we've seen things in the middle of a 2025 property prices up 18%. Right? So the math works because the rental yield is a higher than mortgage interest rate. Okay, I'm going to have you there. Chief China economist at Goldman Sachs. Uh, we've been talking about, you know, really the consumption space and really the luxury sector. This is this is a great story, really, really of our men's. Right. Um, that earnings call and they were talking about the sort of the the weakness that we're seeing in China here and here, why the C-suite is watching very closely. They can to Perkins. Why are watching pork prices in particular when it comes to a key indicator of where sentiment is right now? Yeah. Uh, from snakeskin to skin, I think if you look at that. So it is. Well, of course, the what? The luxury handbag maker. Very leading indicator for luxury handbags? Yeah. And that's informing them of where demand is. Uh, across the Chinese, man. That we'll have more more meat on the bone, if you will. Coming up next, this is from birds. All right. We are checking all Hermes. Right. This is what happened in the last trade. They're falling 11% on the back of those group sales from the luxury group there. When it came to China that, you know, it really did show how, you know, how slow sales have been there and had did disappoint investors out there. But it's interesting, right? We kind of teased it. Yeah. They're looking at pork prices. What's the relationship between firkins and and pork, you think? Well it's the. The background is and I you know, we have we have time right to take a step back. Right. So you know we many years ago we were looking at how what is the appetite or how much room does the Chinese consumer have to spend on beyond staples. Right. And I think the pickup in protein consumption over many years is indicative of how the share of pocket for luxury goods has gone up. Right? So if they can afford to have more protein in the diet over a course of a few decades, then that takes us into their ability to spend on other things. Of course, this is the most expensive, so it's indicative of demand for luxury items. It's a long winded way of saying it's quite fast. They're looking at poor to hear the chairman of our mayor say that, right. The KPIs that he's watching very closely. Let's bring him in Menlo or tried our correspondent for more. Uh, tell us a bit more the context of this comment. And really, I thought it was quite fascinating that these they're linking the two in some way. Yeah. So, um, as reported as second quarter earnings, it was up 6.7%. But as you said, the big disappointment was the China sales because its Asia eggs Japan sales missed estimates by some 20%. So that's a big vulnerability for a company that continues to rely on a very lackluster Chinese luxury market. So the executive chairman was speaking to investors at the earnings call, and he was addressing this point. And he said there are two indicators that he watches in China. Have a listen. I look at two things. One is the real estate market. That is really important. But a less obvious KPI is the price of pork. That's interesting because the price of pork is very low. Pork is eaten particularly during banquets and in restaurants. So there you go. He said that, you know, you eat pork and banquets. And he said this is an indicator of optimism and desire for feeling joy. Something to that extent. Uh, and, yeah, I guess, you know, if you can afford braised pork belly, maybe you'd be in the mood for a buck and back. Yeah, I mean, I do feel good after I go to York. Uh, or that roast pork, deep fried pork chop. Uh, we love it. I think I think I know what we're doing. I think what we're doing for. Okay, let's say the leading indicator was accurate. What does that what does that tell us about the direction of the appetite? It's not very encouraging. If you look at pork prices, it is at a 16 year low in June. It's ticked up a little bit in July. But pork prices are notoriously volatile in China, so I'm not sure if it's a good idea to use it as a leading indicator because it's very tied to the hog cycle. And imagine this you need 18 to 20 months to raise a hog. And so whenever demand changes, it takes at least 20 months for supply to adjust. So there's always some form of structural mismatch here. And we are in a period of oversupply. So the government has been capping production for months, but supply is still above the production target, and hog farmers are making losses for every cell that they slaughter now. So I don't know. It's going to take a while for pork prices to recover. So not a good sign for for those. But it's a good time for them as consumers. Right. Because I think that and as a CFO mentioned that might mean product price hikes for 2027. Oh yes. Will be smaller than this year. So yeah, good for buyers. Not good for investors. No. But yeah if you if you're in the market for a Birkin or a Kelly. Yeah. Maybe this is the time. Good company bad stock. Is this is it good what. Pork prices are lower. Since when? 16 years. You know, it's also a 16 year low. The share price ever messed up? Since 2010. It's trading when a pair of jeans bought. If you know, of course, that, uh, relative. Not really a luxury maker but yes. No. So a brand. Yes. We track very closely I remember. Thank you. Of course, we're tracking all things. Not just for prices. Um, across our city. Yeah. Across asset into the luxury space. Here we watch, of course, that segment on our video hub subscribers going for live streams or news interviews there. Make sure to check it out at Bloomberg.com. Forward slash videos here. Never thought we'd be talking about luxury handbags. And really the correlation with pork prices, as you know, um, we're checking movers. Solar stocks are in focus, particularly in China here today. So there has been some efforts to curb the price where we've been seeing across all of these solar names as well. So there are seeing some decent gains for long green. Chrysler is up some five here this morning. I've still watching that listing debut or dual listing of Zhongyi in a light. Yeah. Uh, which is going the opposite way. In fact, we're now down 14 on the eight shafts, which have been trading, of course, in Shenzhen. And the debut not exactly the best first day at school, of course, but it is just the first day. We're down 8%. Lots more ahead. This is Bloomberg.