Iran Ready to Escalate War, Trump at RNC Convention

ONCE THIS IS THE ASIAN TRADE. ASIAN STOCKS LOOKED OPEN LOWER AS WILL PRICES STOKE INFLATION FEARS. THE TENURE HITTING THE HIGHEST LEVEL SINCE 2020 THREE. THOSE PRESSURES ARE SET TO LOOM OVER PRESIDENT TRUMP AS HE PREPARES TO TAKE CENTER STAGE AT A CONVENTION IN DALLAS. APPLE UNVEILS A FOLDABLE SMARTPHONE, IMPROVING ON MODELS FROM ITS RIVALS, ENTERING A NEW CATEGORY TO ENERGIZE GROWTH. HAIDI: TAKE A LOOK AT THE START OF TRADING ACROSS ASIA. THE PRICE ACTION WHEN IT COMES TO U.S. TREASURIES, KIND OF A REALITY CHECK. THE UPSIDE BUYBACK GETTING HIT BY A DONNING BOND MARKET REALITY FOR SCOTT BESSENT'S -- PLANNED TO BUY DEBT, FAILING TO HALT MARKET DECLINES. THE STATEMENT DID NOT PRODUCE THE SHOCK AND AWE STATEMENT THEY WOULD HAVE HOPED TO HAVE IMPACTED THE MARKETS. INVESTED WANTED -- INVESTORS WANTED MORE DRAMA. 10 YEAR YIELDS RISING TO 4.85%. NO INDICATION ABOUT WHETHER THEY ARE PREPARED TO GO FURTHER WITH BIGGER BUYBACKS. THE MAX PURCHASE SIZE EQUALS GREATER THAN $4 BILLION. THE U.S. DOLLAR IN FOCUS AS WE CONTINUE TO HAVE A DEBATE OVER HOW FAR THE YEN CONTINUES TO GIVE. THE DOLLAR ENDING THE DAY AT THE LOWEST SINCE FEBRUARY WITH SCOTT BESSENT COMMENTS AIDING THE YEN. THE WEAKEST FOR THE GREENBACK IN SEVEN MONTHS. THE CHALLENGED TO SCOTT BESSENT FROM TRADERS, SAYING I AM THE HOUSE NOW, ASYMMETRIC INFORMATION WITH THE 152 LEVEL INSIGHT FOR THE YEN. THIS GOING TO A POSITIVE PICTURE FOR TOKYO FUTURES, CHICAGO NIKKEI FUTURES UP 0.3% BUT A CHALLENGING SESSION FOR ASIAN STOCKS. DECLINES TRACKING THE LOSSES ON WALL STREET ON THE BACK OF SURGING OIL PRICES. WE SEE THE ACCELERATION IN CRUDE CLOSE TO $97 PER BARREL. AVRIL: IT IS THAT FOCUS ON SCOTT BESSENT EXPANDING THE TREASURY BUYBACK PLAN, HAVING FAILED TO IMPRESS INVESTORS. THE 10 YEAR YIELD CLIMBED TO THE HIGHEST LEVEL SINCE 2023. MARK CRANFIELD JOINS US. THERE IS A LOT OF FOCUS ON WHAT THE TREASURY BUYBACK PLAN ULTIMATELY DETAILED, BUT THERE WAS RISING OIL PRICES AND CORPORATE ISSUANCE. TALK ABOUT WHAT YOU SAW AS A DRIVER FOR TREASURIES SLUMPING. MARK: ALL OF THE ABOVE. THE THREAT FROM TODAY'S 30 YEAR OPTION AS WELL, WHICH IS ALWAYS DIFFICULT. WE HAVE HAD THREES COME TENS AND 30'S COMING UP AND THAT IS THE ONE THAT PEOPLE WERE MOST WORRIED ABOUT. ALL OF THOSE THINGS GOING INTO THE MIX AHEAD OF A DIFFICULT AUCTION SALE, MAKING PEOPLE MORE EDGY. BUT THE EXTRA INCREASE IN OIL PRICES, BRENT BACK ABOVE $100, THAT IS SOMETHING TRADERS HAVEN'T BEEN PRICING FOR UNTIL A FEW DAYS AGO. WE GOT COMFORTABLE WITH THE IDEA THAT OIL WOULD BE IN THE $80-$90 RANGE. OIL MARKETS HAVE BEEN BENIGN AND THEN YOU GET THE INCREASE IN THE MOVES BETWEEN THE U.S. AND IRAN AND THAT IS WORSENING, THE SITUATION. PEOPLE ARE GETTING EDGY ABOUT OIL. IT IS FURTHER DOWN THE ROAD, TO DECEMBER, THE RATE CONTRACT TRADING AT THE HIGHEST LEVELS THIS YEAR ALTHOUGH THE SPOT WENT TO 120 EARLIER. PEOPLE ARE CONCERNED ABOUT THE DURATION. THERE IS A WALL STREET JOURNAL HEADLINE THAT SOME OF TRUMP'S ADVISORS ARE SAYING THE WAR COULD CONTINUE THROUGH HIS TERM AS PRESIDENT. THAT WOULD FEEL MORE ANXIETY INTO THE OIL MARKET WHICH WILL FEED INTO TREASURIES AND PROBABLY FUELING MORE WEAKNESS IN THE EQUITY MARKET. THERE IS NO CLEAR BREAK FOR THE TIME BEING. AVRIL: WE ARE ALSO WATCHING OUT FOR SCOTT BESSENT'S COMMENTS IN TERMS OF WHAT HE SAID RELATED TO THE BOJ POLICYMAKING OR THE JAPANESE YEN. THERE IS EXPECTATION WRITING ON WHAT THE CENTRAL BANK OF JAPAN WILL DO NEXT WEEK. HAS HE TALKED THEM INTO A CORNER? HOW HAWKISH MUST THE HIKE BE NOW? MARK: HAWKISH THEN THEY INTENDED. WE HAD A STORY RUNNING THAT HAS BESSENT GIVEN THE BOJ TOO HIGH OF A BARTER CROSS? IF YOU THINK OF THE STRATEGY FOR THE BANK OF JAPAN, A COUPLE THINGS TRADERS NEED TO WATCH. WE HAVE THE DECISION COME OF THE VOTE ON THE BANK OF JAPAN WHICH IS EXPECTED TO BE A RATE HIKE. IT IS FULLY PRICED IN, 25 BASIS POINTS NEXT FRIDAY. WILL IT BE A 9-0 VOTE IN FAVOR? IF IT IS A SPLIT VOTE, THAT WILL BE NEGATIVE FOR THE YEN BECAUSE TRADERS ASSUME EVERYBODY IS ON BOARD. THAT MIGHT NOT BE THE CASE. THERE ARE DOVES ON THE BANK OF JAPAN. WE HAVE THE PRESS CONFERENCE LATER IN THE DAY, GOVERNOR UEDA'S TRACK RECORD IS NOT GREAT. HE TENDS TO GO FOR A NEUTRAL PRESS CONFERENCE, NOT GIVING AWAY MUCH ON FUTURE EXPECTATIONS OF WHERE BANK OF JAPAN POLICY IS GOING. THAT WILL NOT BE GOOD ENOUGH. YEN TRADERS WANT A 9-0 VOTE IN FAVOR OF A HIKE AND A HAWKISH OUTLOOK FROM THE GOVERNOR TO GIVE THE POSSIBILITY THAT OCTOBER COULD BE A FOLLOW UP WITH ANOTHER INTEREST RATE INCREASE. IF THOSE THINGS COME TOGETHER, YEN BEARS COULD BE BACK IN THE MARKET AND BESSENT WILL BE DISAPPOINTED. HAIDI: MARK CRANFIELD THERE. PRESIDENT TRUMP IS SET TO SPEAK AT THE REPUBLICAN CONVENTION IN DALLAS IN A FEW HOURS. THIS WILL BE THE REPUBLICANS CHANCE TO APPEAL TO DONORS AND VOTERS AHEAD OF THE COMING NOVEMBER ELECTION. FOR MORE, CARRY LINES JOINS US FROM DALLAS. -- KAILEY LEINZ JOINS US FROM DALLAS. THERE ARE UNRESOLVED WARS ON MULTIPLE FRONTS, THE BUILDING COST OF LIVING AND INFLATION CRISIS AT HOME. WHAT IS HE LIKELY TO FOCUS ON? WHAT MESSAGE WILL HE WANT TO GET ACROSS TO THE AUDIENCE? KAILEY: IT WILL BE A CHALLENGE FOR THE PRESIDENT AND EVERYONE ON STAGE IN DALLAS. THE MESSAGE AROUND AFFORDABILITY, AFTER BRENT CRUDE TOPPED 100 DOLLARS AGAIN, THERE IS A TRADE WAR WITH CANADA AND TARIFFS THREATENED TO RAISE PRICES IN THE UNITED STATES. THEY STILL HAVE TO PITCH TO VOTERS THAT THE REPUBLICANS ARE THE BEST STEWARDS OF THE GOVERNMENT. AS FAR AS WHAT THE PRESIDENT WILL FOCUS ON COMPANY CALLED FOR THE CONVENTION TO HAPPEN. THIS IS THE FIRST OF ITS KIND BECAUSE HE WANTS HIS SUPPORTERS TO TURN OUT IN THIS ELECTION CYCLE IN A YEAR IN WHICH HE HIMSELF IS NOT ON THE BALLOT. WHAT IS HAPPENING IN DALLAS IS REALLY A PEP RALLY MORE THAN ABOUT POLICY SUBSTANCE BUT THEY ARE TRYING TO FOCUS ON ECONOMIC ISSUES. WE WILL HEAR FROM SCOTT BESSENT LATER THIS EVENING BEFORE PRESIDENT TRUMP SPEAKS. TRUMP IS LIKELY TO TOUT THE ECONOMIC ACHIEVEMENTS IN HIS MIND HE HAS MADE INCLUDING THE ONE BIG BEAUTIFUL BILL IN WHICH LOWER TAXES IN MANY INSTANCES AS WELL AS BRINGING DOWN HEALTH CARE COSTS WHEN IT COMES TO PRESCRIPTION DRUGS. HE MAY TRY TO CONTRAST, WHICH WE HEARD A NUMBER OF SPEAKERS TALK ABOUT, REPUBLICANS AND DEMOCRATS WHICH IN SOME INSTANCES HAVE SHIFTED MORE TO THE LEFT. WE HEARD CHARACTERIZATIONS OF DEMOCRATS BEING COMMUNISTS AND WE COULD HEAR MORE OF THE SAME FROM THE PRESIDENT. HE MAKES HIS REMARK AS HIS APPROVAL RATING IS SITTING AT AN ALL-TIME LOW ACROSS HIS TWO TERMS. HE IS AT 33% SO NOT A POPULAR PRESIDENT TRYING TO RALLY THE CROWD. HAIDI: PARTICULARLY WHEN IT COMES TO SWING STATES, PROBLEMATIC FOR DIFFERENT REASONS. THE TARIFF WAR HAS BEEN REIGNITED. THAT IRAN WAR DOESN'T SEEM LIKE IT WILL SETTLE DOWN SOON. IT MIGHT JUST BE A LOWER KEY WAR THAT DRAGS ON. WHERE ARE WE SEEING FRICTION IN SWING STATES? HOW DOES THAT INFORM EXPECTATIONS FOR HOW THE MIDTERMS COULD TURN OUT? KAILEY: WE ARE SEEING THAT IN WHO HAS CHOSEN TO BE HERE IN DALLAS AND WHO SKIPPED THE CONVENTION. A NUMBER OF SWING STATE SENATE CANDIDATES ARE TAKING THE STAGE THIS EVENING. WE SAW SENATOR JOHN HOUSTON OF OHIO SPEAK AND BEFORE HIM WAS KEN PAXTON, VYING FOR A SENATE SEAT IN TEXAS. WE WILL HEAR FROM MIKE COLLINS IN GEORGIA. WE HEARD FROM THE NORTH CAROLINA REPUBLICAN SENATE CANDIDATE, WHO WILL NOT BE HERE. SUSAN COLLINS IS TRYING TO KEEP HER SEAT IN THE STATE OF MAINE. DAN SULLIVAN IN ALASKA HAS CHOSEN NOT TO BE HERE. THAT IS AT THE SENATE LEVEL. A NUMBER OF SWING STATE CANDIDATES IN THE HOUSE HAVE CHOSEN TO NOT ATTEND THE CONVENTION, PERHAPS IN PART OF ARE CONCERNED ABOUT BEING SHOWN AS TO CLOSE TO A PRESIDENT WHO IS DEALING WITH AN UNPOPULAR WAR AND UNPOPULAR TRADE WAR AND TRYING TO CREATE DISTANCE BETWEEN THEMSELVES AND THE PRESIDENT AS THEY TRY TO DRAW MODERATE VOTERS TO THEIR COALITION. I WOULD LOOK AT THE GUEST LIST OF SPEAKERS AS YOU LOOK AT WHO WANTS TO BE CLOSE TO THE PRESIDENT AND WHO DOES NOT. IT IS A MIXED BAG, WITH JUST OVER 54 DAYS UNTIL ELECTION DAY. HAIDI: A NUMBER OF KEY RACES TO WATCH. KAILEY LEINZ, BALANCE COANCHOR THERE. STILL TO COME, APPLE'S FIRST FOLDABLE SMARTPHONE. WE HAVE THE DETAILS NEXT. THIS IS BLOOMBERG. ♪ >> WE ARE GOING FROM AN EARLY CYCLE RECOVERY FROM THE RECESSION OF A YEAR AGO. EARNINGS WILL BE BETTER-THAN-EXPECTED. IT WAS BETTER THAN WE THOUGHT. THE ONLY THING THAT IS TROUBLING, THERE IS END OF CYCLE CALAMITY. IT IS NOT LIKE THE MARKET IS IGNORING THE RISKS. IT HAS BEEN DIGESTING IT IN A WAY THAT IT IS NOT OBVIOUS TO THE CASUAL OBSERVER. AVRIL: MORGAN STANLEY'S MIKE WILSON ON THE STATE OF MARKETS. OVERNIGHT WE SAW THE INDICES CLOSING LOWER DESPITE BRIGHT SPOTS IN TECH. IN TERMS OF WHAT YOU SEE ON NIKKEI FUTURES, MAYBE THEY CAN OVERCOME SOME OF THE OIL RALLY. OVERNIGHT WE SAW BRENT POPPING PAST $101 AND NEW YORK CRUDE IS NOT FAR BEHIND. THAT HAS BEEN PUTTING PRESSURE ON TREASURIES. THE YIELD CLIMBING TO THE HIGHEST SINCE 2023. THERE WAS DISAPPOINTMENT RELATED TO THE TREASURY BUYBACK PLAN. JOINING US IS THE MANAGING DIRECTOR FOR RESEARCH AND ADVISEMENT AT K2 ASSET MANAGEMENT. WHEN IT COMES TO THE RALLY IN OIL, WHAT DOES THAT LOOK LIKE IN TERMS OF HOW INSULATED STOCKS, PARTICULARLY TECH STOCKS, CAN BE IN YOUR MIND? GEORGE: GOOD MORNING. GOOD TO BE WITH YOU. MANY MOVING PARTS, BUT THE HIGH ENERGY PRICES THAT LOOK SET TO BE HERE FOR LONGER ON AVERAGE, AS THE YIELD CURVE ADJUSTS, WILL BE IMPACTING 2027 EARNINGS OUTLOOK. BROADLY, THE AI SECTOR, YOU'VE GOT THE ROTATION FROM CHIPMAKERS AND SOFTWARE REVERSING FROM THE PREVIOUS QUARTER. IN THE MAIN ENERGY GENERATION, IT WILL BE MORE DIFFICULT TO LOCK-IN. SO THAT WILL HAVE IMPLICATIONS FOR 2027 EARNINGS, DEPENDING ON WHERE ENERGY PRICES GO. THE THING TO REINFORCE IS, AS A STARTING POINT, U.S. EARNINGS ARE STRONG. THEY ARE INTO THEIR FOURTH YEAR OF DOUBLE-DIGIT APS UPSIDE IN THIS YEAR IS STRONG, WHICH IS RARE AS YOU HAVE THIS MOMENTUM GOING. THE COMPOSITION OF THE EARNINGS IN THE U.S. CHANGED YEAR ON YEAR. IT IS BROADENING OUT. YOU STILL GET A BROAD-BASED EARNINGS RECOVERY ARE CROSSED TO THE RUSSELL 2000. THERE IS FUNDAMENTAL EARNINGS GROWTH, BUT ENERGY PRICES WITHOUT A DOUBT MAKE IT DIFFICULT ON ENERGY GENERATION GOING FORWARD AND WILL IMPACT PPI AND WHOLESALE, IT WILL IMPACT MARGINS BROADLY, AND WILL HAVE IMPACT ON BROADER EARNINGS IN 2027. BUT THEY ARE IN A HEALTHY, STRONG STARTING POINT. AVRIL: YOU'RE OVERWEIGHT U.S. STOCKS, WHAT WAS YOUR SENSE ON HOW MUCH BREADTH YOU NEED TO SEE IN THE MARKET FOR THINGS TO FUEL FURTHER? GEORGE: THE CONTEXT IS IMPORTANT. EQUITIES VERSUS EARLIER THIS YEAR, OVERWEIGHT EM NDM. WHERE IS THE SUSTAINABILITY AND THE EARNINGS MOMENTUM AND BROADENING OUT? IT IS COMING OUT OF THE U.S.. ALL SECTORS OF THE U.S. ECONOMY ARE DOING QUITE WELL. HISTORICALLY STRONG EARNINGS BUT STRONG BROAD-BASED. CREDIT CONDITIONS FOR CORPORATE AMERICA ARE BETTER THAN IN THE DM WORLD AND THAT IS A GOOD SIGN. THAT IS TRUE AND THE YIELD CURVES BROADLY GLOBALLY ARE HIGHER. HIGHER REAL RATES IS A HEADWIND FOR CORPORATE EARNINGS IN THE U.S. AND A HEADWIND EVERYWHERE ELSE AND THAT IS WHY U.S. TREASURIES WERE HIGHER, OUTPERFORMING OTHER TREASURY MARKETS. CREDIT CONDITIONS ARE GOOD FOR THE U.S.. EARNINGS ARE STRONG, THE FUNDAMENTALS ARE THERE, HIGHER RATE ENVIRONMENT US THE CURVE. HIGH REAL RATES. BUT THERE IS MORE RESILIENCE WHEN SEARCHING FOR 27 EARNINGS AND WE BELIEVE THE U.S., BUT NEUTRAL EQUITIES, DM VERSUS EM AND THAT IS MAINLY COMING OUT OF THE U.S.. AVRIL: HERE POINT ABOUT CORPORATE STRENGTH, WE SAW CORPORATE ISSUE WEDNESDAY LUJAN THE PAST TWO DAYS. I THINK THE MOST IN THE U.S. SINCE JANUARY. AND HOW IT HAS BEEN ABSORBED TELLS US THAT IT IS NOT REALLY A SPECTER OF HIGHER RATES DERAILING ECONOMIC ACTIVITY. DO YOU THINK THIS WILL BE SAPPING DEMAND FOR TREASURIES? IS WHAT WE SAW OVERNIGHT, WILL IT FLIP THE SCRIPT IN TERMS OF THE DEMAND OUTLOOK FOR SOVEREIGN DEBT? GEORGE: AT THE MARGIN YES. YOU HAVE THIS $1 TRILLION AI DEBT EQUITY WHICH IS HISTORIC. THE QUALITY OF THE BALANCE SHEETS HE IS GOOD AND PEOPLE ARE SEARCHING FOR DIVERSIFICATION WITHIN THEIR FIXED INCOME PORTFOLIOS. COMPARE THAT WHAT TRILLION DOLLARS GOVERNMENT DEBT FACILITY WITH $18 BILLION ON THE SHORT END. AT THE MARGIN, THE MARGINAL INVESTOR OF FIXED INCOME ACTIVE WOULD BE BUYING THOSE TREASURIES. WITHIN THOSE BOND INDICES, THEY ARE BUYING INVESTMENT GRADE AND THE AI EXPANSION. ON ISSUANCE, THEY ARE DIVERSIFYING OUT OF U.S. DOLLARS AND THE DEMAND IS THERE BECAUSE FIXED INCOME ACTIVE GROWTH PORTFOLIOS NEED THE DIVERSIFICATION. IT IS AT THE MARGIN, BUT THE REINFORCEMENT WITH U.S. TREASURIES, THEY HAVE MORE DEBT ISSUANCE TO COME. IT IS A BIG PROGRAM. IT IS FUNDAMENTALLY, EVERYTHING IS ENGINEERED TO THE U.S. CAR. THE HIGH REAL RATES IS A HEADWIND FOR CORPORATE U.S. EARNINGS IT IS FOR EVERY OTHER EARNING AROUND THE WORLD AND THAT IS WHY THE U.S. TREASURY MARKETS ARE HIGHER. OTHER TREASURY MARKETS ARE EVEN HIGHER THAN THAT SO THEY ARE OUTPERFORMING. THE 10 YEAR AND THE VALUATION, 475 IN THE NOMINAL IS REASONABLE ABOVE 5% NOMINAL IS A HIGH REAL RATE AS WELL. IT WILL BE AN IMPACT FOR DEBT FINANCING FACILITIES IN NORTH AMERICA ONE YEAR FORWARD. IT IS SUSTAINABLE GIVEN THE RESILIENCE OF THE U.S. ECONOMY AND CORPORATE CREDIT CONDITIONS AND KNOWLEDGE IN IT IS UNEVEN. THE HIGHER REAL RATES, IF THEY ARE AT THESE LEVELS NEXT YEAR, THAT IS THE HANDBRAKE CORPORATE EARNINGS. AVRIL: WHAT ABOUT THE OUTLOOK FOR THE DOLLAR GIVEN HOW THE YEN HAS REBOUNDED? WHEN YOU LOOK AT THE OUTLOOK OR EXPECTATIONS OF OTHER CENTRAL BANKS OTHER THAN THE FED, IT IS THE EXPECTATION OF HIGHER RATES FOR THE. DOES THAT MEAN DOLLAR NEGATIVE? IS THERE SOMETHING IN THERE THAT COULD CHANGE THE TRAJECTORY? GEORGE: IT'S. IT IS NOT AN OFFICIAL DOLLAR WEAKNESS. SYNCHRONIZATION AT THE ECB, THE BOJ, BANK OF CANADA, EVERYONE IS IN A TIGHTENING ENVIRONMENT. IT IS COORDINATED AND THE FED IS PART OF THAT. BUT ON THE YEN, WE KNOW YEN SUSTAINED WEAKNESS ABOVE 160 CREATES UNSTABLE CONDITIONS. THE INTERVENTION FROM BESSENT FOLLOWED BY THE INTERVENTION FROM THE BOJ HAS BEEN SUCCESSFUL. SEE HOW THE BOJ RATE HIKE, HOW THAT IS COMMUNICATED TO THE MARKET. IT IS NOT GOOD ON GUIDANCE DOING WITH THE FED WANTS TO DO NOW. GO AND DO YOUR HOMEWORK, DON'T LOOK AT THE UNDERLYING DATA BUT WITH THE YEN, YOU ARE GETTING A SENSE 152, 157.5 IS A RANGE. UNLESS THERE IS A CHANGE IN CONDITIONS, I GET A SENSE THAT YEN SHORT-TERM WEAKNESS WILL COME BACK POST BOJ BUT NONETHELESS IT HAS BEEN SUCCESSFUL INTERVENTION BY THE U.S. AND BESSENT THAT IS HIS WHEELHOUSE. HE LOVES CURRENCY TRADING AND INTERVENTION. AND THE INTERVENTION BY THE JAPANESE, IT LOOKS LIKE WE HAVE TO COME ARE -- CONFER. IT HAS RALLIED STRONGLY BUT YOU GET A SENSE THAT THE YEN BEARS WILL COME IN AND THAT IS OK. GETTING IT BACK TO THE 157 LEVEL. AVRIL: A BIT OF A FLAW ON DOLLAR-YEN. THANK YOU, GEORGE. MANAGING DIRECTOR AT K2 ASSET MANAGEMENT. WE HAVE MORE AHEAD ON THE ASIAN TRADE. THIS IS BLOOMBERG. ♪ >> THE IPHONE DUO BRINGS A NEW DESIGN WHILE PRESERVING EVERYTHING YOU LOVE AND EXPECT FROM MY IPHONE. IT GIVES YOU THE LARGEST DISPLAY ON AN IPHONE WHILE FLITTING IN YOUR POCKET. IT REFLECTS COMPLEX ENGINEERING AND FEELS EFFORTLESS TO USE. IT MAKES NEW EXPERIENCES POSSIBLE. HAIDI: APPLE'S NEW CEO MAKING HIS KEYNOTE DEBUT, UNVEILING THE IPHONE DUO. APPLE SAYS IT WILL IMPROVE ON RIVAL MODELS AND COMES AS THE COMPANY AIMS TO SHOW IT CAN REFINE A CATEGORY THAT HAS BEEN DOMINATED BY SAMSUNG AND CHINESE MAKERS. ED LUDLOW WAS THERE FOR THE UNVEILING. >> APPLE UNVEILED ITS FIRST FOLDABLE IPHONE. $1999 WITH APPLES PREP SHIP, IMPROVED PROCESSING AND COMPUTE AND THE NEW CEO SAVED IT FOR A ONE MORE THING MOMENT THAT THE END OF THE PRESENTATION. WE KNEW THIS WAS COMING. 5.4 INCH SCREEN OPENED UP TO 7.6 INCHES BUT THEY HAVE WORKED HARD ON THE DURABILITY, THE MARGINAL CREASE OR LACK OF IT. IT IS MORE LIKE AN IPAD WHEN OPENED UP, UNFOLDED. IT HAS A BIG SPACE PREMIUM OVER EVEN THE IPHONE 18 PRO MAX. A LOT OF THAT WORK FROM APPLE, THEY MIGHT BE LATE TO THE MARKET BUT THEY TOOK THEIR TIME ON THE COMPONENTS AND SUPPLY CHAIN. THE OTHER NEWS WAS ON THE IPHONE 18 PRO AND 18 PRO MAX, $1199 FOR THE PRO, 1200 BLOCK $99 FOR THE PRO MAX, MORE EXPENSIVE THAN THE PRIOR GENERATION MODELS. WE KNOW ABOUT APPLE'S CALCULATIONS, HOW MUCH OF THE COST DO THEY EAT WITH MEMORY PRICES AND HOW MUCH TO PASS ON TO THE CONSUMER. OTHERWISE, JOHN TURNER IS EIGHT DAYS AND ISRAEL AS SEE JO AND THIS WAS ALL ABOUT AI. FRAMED AS, FOR THE IPHONE IT REPRESENTS THE INTELLIGENCE PERSONAL HUB. HIS PITCH IS THE IPHONE HAS THE CAMERAS AND THE APPS AND THE CONNECTIVITY AND THE COMPUTE TO BECOME THE CENTER OF YOUR PERSONAL AI, AND WITH THAT ONE MORE THING WITH THE FOLDABLE IPHONE, IT MIGHT BE A FIRST KEYNOTE AS CEO THAT WAS SUCCESSFUL. ED LUDLOW BLOOMBERG. HAIDI: WATCHING APPLE SUPPLIES IN THE SESSION AND WATCHING SOME OF THE DOLLAR ASSETS PARTICULARLY AS WE CONTINUE TO HAVE QUESTIONS OVER WHERE TREASURY YIELDS GO. THEY HAVE BEEN CLIMBING OFF THE BUYBACK TARGET THAT HAS BEEN DISAPPOINTING, LOT -- LACKING THE SHOCK AND OFF. WE SEND THE DOLLAR COMES STRENGTHEN THE. THE DOLLAR IS THE WEAKEST IN SEVEN MONTHS. AVRIL: A SELLOFF IN TREASURIES HAS BEEN IN FOCUS PARTICULARLY AGAINST THE BACKDROP OF HOW THE BUYBACK PLAN DISAPPOINTED SOME IN THE MARKETS THAT ARE LOOKING AT SOMETHING IN THE RANGE OF AN INCREASE AS MUCH AS $10 BILLION ON SOME INDIVIDUAL BUYBACK OPERATIONS. MISSING THE MARK COMPARED TO WHAT SOME STRATEGISTS EXPECTED. THERE WAS A LOT OF CORPORATE ISSUANCE SO THE DELUGE MIGHT HAVE BEEN A CASE OF BAD TIMING. TAKE ALSO INTO CONSIDERATION WHAT WE SAW IN THE RALLY IN OIL PRICES, STOKING THOSE CONCERNS OF INFLATION. BRENT OVERNIGHT POPPED PAST THE $101 HANDLE AS WELL. HAIDI: THAT IS RIGHT. WE CONTINUE TO WATCH THE BROADER INFLATIONARY AND RISK ASPECT OF HOW WE SEE OIL CLIMB. TAKE A LOOK AT HOW WE ARE SETTING UP, A DRAG ACROSS ASIAN EQUITIES POISED TO DECLINE. LOSSES ON WALL STREET ALTHOUGH U.S. FUTURES ARE LOOKING PEPPY YEAR. WITH OIL PRICES, PLAYING INTO THAT ALONG WITH RISING YIELDS. JAPANESE FUTURES TRADING IN SINGAPORE OFF BY 1.25%, NEW YORK CRUDE OVER 1% OVER THE $97 PER BARREL LEVEL. BRENT ABOVE 101 DOLLARS FOR THE FIRST TIME SINCE JULY. WE HAVE SEEN SIGNS THAT IRAN IS PREPARED TO SETTLE IN FOR ESSENTIALLY WHAT HAS BECOME A WAR OF ATTRITION. AVRIL: IT IS PREPARING FOR A MORE INTENSE WAR WITH THE U.S. AND WILL ESCALATE COUNSELOR STRIKES IF AMERICAN ATTACKS CONTINUE -- COUNTER STRIKES IF AMERICAN ATTACKS CONTINUE. . TO RUN SEES THE WAR AS AN EXISTENTIAL WILL RAT. -- TAMRON SEES THE WAR -- TEHRAN SEES THE WAR AS AN EXISTENTIAL THREAT. IRAN IS MORE WILLING TO GO MORE ALL OUT. >> WE HAVE SOME WISHFUL THINKING FROM PRESIDENT TRUMP TRAVELING TO THE REPUBLICAN CONVENTION IN DALLAS, TELLING REPORTERS HE BELIEVES THE IRAN WAR WILL END AFTER THE ELECTION. HE THINKS IRAN IS HOLDING UP TO INFLUENCE CRUCIAL MIDTERMS IN THE UNITED STATES. OUR SOURCES IN IRAN SAY THEY ARE IN FOR THE LONG HAUL AND THIS IS WISHFUL THINKING ON THE PART OF THE RESIDENT AND OIL PRICES AND INFLATION IN THE U.S. ARE SET TO BE AFFECTED BY THE WAR POTENTIALLY FOR YEARS TO COME. AVRIL: WHAT ABOUT THE IDEA THAT ENERGY PRICES MIGHT SOMEHOW FORCE THE PRESIDENT'S HAND? WHAT HAPPENED TO THAT NARRATIVE? ERIK: ONE THING REPUBLICANS HERE ARE WORRIED ABOUT IS ACTIVE HOSTILITIES, TROOPS ON THE GROUND, AND ESCALATION. THAT COULD ONLY HURT THEIR ATTEMPT TO KEEP CONTROL OVER THE YES -- THE U.S. CONGRESS. THERE IS POLITICAL PRESSURE ON THE PRESIDENT TO REFRAIN FROM AN ALL-OUT RESUMPTION OF HOSTILITIES AGAINST IRAN. THEY ARE TRYING TO TOW A CAREFUL LINE OF KEEPING PRESSURE ON, HOPING TO STRIKE A DEAL TO REOPEN THE STRAIT OF HORMUZ, GET THE GASOLINE PRICES DOWN IN THE U.S. WHICH WERE BELOW THREE DOLLARS PER GALLON AND ARE NOW NEAR SIX DOLLARS IN THE U.S.. BUT IS NOT LOOKING GOOD FOR THAT EFFORT. AVRIL: WE ARE SEEING A SENSE OF HOW ACTIVE HOSTILITIES MIGHT BE DISTRACTING FROM WHAT THE U.S. ADMINISTRATION HAS BEEN TALKING ABOUT, APPLYING ECONOMIC PRESSURE ON IRAN. WHAT IS THE STATE OF AFFAIRS ON THAT FRONT? ERIK: THAT IS NOT REALLY HAVING AN EFFECT ON THE SENIOR LEADERSHIP. THEY ARE WORRIED ABOUT THEIR OWN INTERNAL ABILITY TO CONTROL THEIR POPULATION. THE SENSE THAT THEY WOULD BE BACKING DOWN IN THE FACE OF SANCTIONS AND RATCHETING UP OF ECONOMIC ISOLATION DOESN'T SEEM LIKE WE ARE DEALING WITH THE KIND OF PEOPLE THAT WOULD BEND TO THAT KIND OF PRESSURE. THAT IS AN INTERNAL ASSESSMENT ON THE PART OF INTELLIGENCE AGENCIES AT THIS POINT. HAIDI: ERIK AT THE REPUBLICAN CONVENTION IN DALLAS WHERE THE WAR BETWEEN THE U.S. AND IRAN WILL NO DOUBT BE ONE PRESSURE POINT FOR PRESIDENT TRUMP AS HE SEEKS TO WIN OVER SENTIMENT CLOSE TO THE MIDTERMS. A POLITICAL RISK AT PLAY BUT WHEN IT COMES TO THE IRAN U.S. SITUATION, THREATS OF PROLONGED DISRUPTIONS TO THE STRAIT OF HORMUZ AND ENERGY SUPPLIES IS PUSHING THROUGH TO WHERE BRENT HAS BEEN HOLDING OVER 101 DOLLARS FOR THE FIRST TIME SINCE JULY. YIELD TRADED CRUDE, ABOVE $97 PER BARREL. SHOULD ENTERED -- ELEVATE ENERGY PRODUCERS IN SYDNEY, AND THAT MIGHT BE THE OUTPERFORMER AS WE SEE DOWNSIDE BROADLY FOR ASIAN STOCKS. SPRITES AS GASOLINE PRICES WILL GO DOWN IN THE COMING WEEKS AMID EFFORTS TO BOOST AMERICAN REFINING CAPACITY. HE SPOKE WITH KAILEY LEINZ IN DALLAS. >> THE PROBLEM IS MORE THAN OIL PRICES. THE BIGGER PROBLEM IS REFINING CAPACITY. UNDER THE BIDEN ADMINISTRATION THEY CLOSED A DOZEN REFINERIES. GAVIN NEWSOM HAS CLOSED TWO LARGE ONES IN CALIFORNIA. WE ARE GOING THE OTHER DIRECTION. WE WILL EXPAND REFINING CAPACITY. I THINK WE WILL SEE GAS PRICES GO DOWN IN THE COMING WEEKS. DIESEL IS A BIGGER CHALLENGE BUT WE ARE WORKING ON IT. EVERY DAY. >> CAN YOU GIVE US DETAIL ON HOW MUCH OF THIS IS A FACTOR OF THINGS THAT ARE BEYOND U.S. ENERGY SECRETARY'S CONTROL, LIKE UKRAINE GOING AFTER RUSSIAN REFINERIES? ARE THERE LIMITS TO WHAT YOU CAN DO TO ADDRESS THIS? >> THE UKRAINIAN ATTACKS ON RUSSIAN REFINERIES ARE THE SINGLE BIGGEST PROBLEM WITH DIESEL. RUSSA ARE NOT EXPORTING ANYTHING. THEY WERE IN EXPORTER OF GASOLINE IN THEY ARE A MEANINGFUL IMPORTER OF GASOLINE. CHINA HAS CREPT BACK ON REFINING CAPACITY, PUTTING UPWARD PRESSURE ON GLOBAL PRICES. IN THE UNITED STATES WE ARE CHANGING REGULATIONS, ALLOWING REFINERS TO PRODUCE MORE. WE ARE INVESTING IN VENEZUELA TO SEE THE OIL PRODUCTION AND RESTORE REFINING CAPACITY. WE HAVE DONE WAVERS TO MAKE SURE CALIFORNIA AND NEW ENGLAND HAVE SUPPLIES OF YULE CRITICAL FOR THEIR LIVELIHOODS -- FEEL CRITICAL FOR THEIR LIVELIHOODS. I THINK YOU WILL SEE THIS ROLLOVER AND PRICES HEADED DOWN BUT THESE ARE BIG CHALLENGES. THANK GOD WE HAVE THE TRUMP ADMINISTRATION OR WE WOULD BE IN A WORLD OF HURT. >> WHILE THE ADMINISTRATION PUSHED FOR GREATER AMERICAN ENERGY, IT HAS DECIDED TO PROSECUTE THE WAR AGAINST IRAN. GIVEN THE HOSTILITIES THAT FLARED UP IN THE LAST SEVERAL DAYS, THE U.S. ATTACKING FIVE IRANIAN TANKERS, HAS IT THAT IMPACTED WHAT CAN GET OUT OF THE STRAIT OF HORMUZ? YOU HAVE THE LATEST FIGURE FROM YESTERDAY OR TODAY? >> I DO. THE DATA AS OF THIS MORNING, WE ARE AT THE HIGHEST SINCE THE START OF THE CONFLICT, JUST UNDER 11 MILLION BARRELS PER DAY OF OIL AND OIL PRODUCTS GOING OUT OF THE STRAIT ON THE WATER. AND ANOTHER 3-5,000,000 BARRELS FROM THE BYPASS PIPELINES. WE CONTINUE TO GROW THE OIL PRODUCTS COMING OUT OF THE GULF. THE AMERICAN NAVY IS DOING A PHENOMENAL JOB SO A LOT OF GOOD PROGRESS BUT I HAVE TO SAY A LOT OF AMERICANS DON'T APPRECIATE WHAT WE ARE DOING. IRAN IS THAT -- NOT THAT FAR AWAY FROM THE NUCLEAR WEAPON. IF THE PRESIDENT HAD SAID I WILL KICK THE CAN DOWN THE ROAD, IMAGINE A WORLD WHERE DEATH TO AMERICA, THE BIGGEST TROUBLEMAKER IN THE WORLD'S NUCLEAR ARMED. THAT IS NOT ACCEPTABLE. AVRIL: U.S. ENERGY SECRETARY CHRIS WRIGHT SPEAKING WITH BLOOMBERG. 18 OF THE MOST IMPORTANT SHIPPING NATIONS ARE WARNING THE COMP TRADE WARS AND EXTREME WEATHER ARE SIGNS OF A STRUCTURAL SHIFT IN GLOBAL TRADE. THE SHIPPING GROUP SAYS THE ISSUES WILL UNDERMINE THE GLOBAL MARITIME FRAMEWORK AND INCREASE THE RISK OF DISRUPTIONS. THEY ARE CALLING FOR ENFORCEMENT OF INTERNATIONAL RULES AND MORE INFORMATION SHARING BETWEEN GOVERNMENTS. WE HAVE MORE AHEAD ON THE ASIA TRADE. THIS IS BLOOMBERG. ♪ >> I GIVE JENSEN ALL THE CREDIT IN THE WORLD. HE IS A GREAT PARTNER AND HE IS BUYING DEEPER LOYALTY INTO THE CUSTOMER BASE. HE KNOWS HIS CUSTOMERS ARE HYPERSCALERS. 'S CUSTOMERS OF THE FUTURE ARE NOT HYPERSCALERS. THE CUSTOMERS OF THE FUTURE ARE ENTERPRISES. HAIDI: THAT IS MIKE SPEAKING WITH STEPHEN ENGLE ON THE CIRCULAR NATURE OF DATA FUNDING, ONE FOCUS OF THE INFRASTRUCTURE BUILDOUT. STONE PEAK IS A PRIVATELY OWNED FIRM FOCUSED ON OPERATING INFRASTRUCTURE ACROSS DIGITAL, TRANSPORT AND ENERGY SECTORS. THEY MANAGE $93 BILLION ANNUALLY WITH OVER 100 INVESTMENTS IN 60 COUNTRIES. JOINING US IS THE CEO AND COFOUNDER. GREAT TO HAVE YOU WITH US AT A FRENETIC TIME FOR GLOBAL MARKETS. TELL US ABOUT THE AI AND DATACENTER OPPORTUNITIES. >>. . THERE IS A LOT GOING ON IT IS AN INTERESTING MARKET BECAUSE THERE IS A LOT OF ENTHUSIASM THAT ALWAYS BRINGS A LOT OF CAPITAL AND HIGHER PRICES. FOR US IT IS ABOUT PICKING OPPORTUNITIES WHERE YOU FEEL CONFIDENT IN THE CASH FLOWS FOR THE NEXT 10, 20 YEARS WHICH IS NOT ALWAYS EASY. YOU FIND WHERE THE GROUND IS MOVING. SO BUILDING CONTRACTED DATA CENTERS AT THE MOMENT. HAIDI: THAT MAKES ME THINK YOU ARE MINDFUL OF FINANCING COSTS AND WHAT IS GOING ON IN THE U.S. THAT COMPOUNDED WITH THE CIRCULAR FINANCING DEALS WE ARE LOOKING AT, DOES THAT INDICATE SOME PARTS OF THE MARKET MIGHT BE HEADED FOR A DOWNTURN? >> I LIKE THAT FINANCING COSTS ARE HIGHER. IT MAKES CAPITAL MORE SCARCE AND MEANS RETURNS TO EQUITY ARE HIGHER. I'M NOT WORRIED ABOUT HIGHER INTEREST RATES. I DO LOOK AT THE CURRENT VALUATIONS IN THE MARKET. WHEN YOU LOOK AT MULTIPLES ON WHAT YOU MIGHT CALL AVERAGE EARNINGS OVER TIME, WHEN YOU GO BACK TO THE DOS, ARRA AND LOOK AT THE STOCK MARKET -- THE.COM ERA AND LOOK AT THE STOCK MARKET WE ARE COGNIZANT OF THAT. THE CAREFUL INVESTOR NEEDS TO BE AWARE IT IS AN EXUBERANT TIME, SO YOU HAVE TO PICK YOUR SPOTS CAREFULLY. HAIDI: IT IS HARD WHEN IT IS A MOMENTUM PLAY. THERE IS A LOT OF FOMO WITH THE TECHNOLOGY. I GO BACK TO THE COMMENT THAT AI MAY BE VERY MUCH REAL AND CHANGING THE WORLD BUT IT MAY NOT BE A FINANCIAL RETURN. DO YOU SEE THE VALUE IN LOOKING AT THAT? MICHAEL: I THINK THAT IS THE KEY QUESTION. YOU READ ABOUT THE MARGINS FOR THE AI LABS FOR EXAMPLE. IT IS SOMEWHAT DIFFICULT TO GET A VIEW INTO THE DETAIL, BUT IT SEEMS AI LABS ARE OPERATING AT NEGATIVE MARGINS AT THE MOMENT. THERE IS A LOT OF MONEY IN INFRASTRUCTURE, A LOT OF MONEY MADE ON THE CLOUD SIDE, BUT THE UNDERLYING DRIVER OF THE AI ENTHUSIASM AND VOLUME, THE ECONOMICS ARE TO BE DETERMINED. I AGREE THAT IT IS AN UNBELIEVABLE TECHNOLOGY, IT IS CHANGING THE WORLD AND WILL CONTINUE. I THINK THESE THINGS CHANGE THE WORLD SLOWER THAN YOU EXPECT. BUT MAYBE HAVING A GREATER IMPACT OVER TIME SO MAYBE THAT IS THE CASE HERE, SIMILAR TO WHAT WE SAW WITH THE INTERNET. WITHOUT A DOUBT, THE JURY IS OUT AS FAR AS HOW THE ECONOMICS WILL GO FOR AI LABS. HAIDI: HOW DO THE ECONOMICS STACK UP WHEN IT COMES TO HOW YOU CHOOSE TO PUT DOWN MONEY? WHERE ARE YOU PUTTING DOWN COMMITMENTS? MICHAEL: IT IS SIMPLE. WE LOOK FOR THINGS THAT WE HAVE CONFIDENCE IN THE CASH FLOWS FOR A LONG PERIOD OF TIME. WHAT YOU WANT IS A STRONG CUSTOMER. ONE OF THE HIGH INVESTMENT HYPERSCALERS. YOU WANT A LONG-TERM COMMITMENT. SITTING HERE TODAY, THE TYPICAL CONTRACT TERM FOR A LEASE WITH HYPERSCALERS IS 15 YEARS. IF YOU CAN HIT MICROSOFT OR GOOGLE ON A 15 YEAR TERM CONTRACT, YOU HAVE A GOOD IDEA OF MINIMUM RETURNS. SO WE ARE FOCUSED ON THAT. HAIDI: IS PART -- AS PART OF YOUR WILL YOU TALK TO HYPERSCALERS. WHAT IS THE SENTIMENT AT THIS POINT? ARE THEY CONCERNED ABOUT CHINA? WHAT DO YOU THINK ABOUT OPPORTUNITIES IN CHINA GIVEN THE DISRUPTION? MICHAEL: CHINA IS AN INCREDIBLE MARKET. IT IS A DIFFICULT MARKET FOR U.S. INVESTORS TO DO A LOT. THE POLITICAL HEAT IS ONE THAT WE ARE NOT IN A POSITION TO JUDGE. I WOULD IMAGINE IF YOU ARE A HYPERSCALER YOU ARE INCREDIBLY FOCUSED ON THE AMOUNT OF AI TOKENS COMING OUT OF CHINA. I SAW A STATISTIC RECENTLY THE AMOUNT OF TOKENS, THE AMOUNT OF AI CONTENT CONSUMED IS GREATER FOR THOSE COMPANIES COMING OUT OF CHINA THAN IT IS IN THE U.S. AND MY FEELING IS, THE CHINESE AI COMPANIES ARE A BIT BEHIND THE U.S. FROM A TECHNOLOGY STANDPOINT, BUT THE COST TO USE IN CHINA IS MUCH LOWER THAN THE FRONTIER U.S. AI. AND THAT IS THE CONCERN I WOULD IMAGINE FOR THE U.S. TECH COMPANIES. THEIR PRODUCT IS A SIMILAR PRODUCT AS COMING OUT OF CHINA AND IT IS 5% OF THE COST OF THE U.S. EQUIVALENT. HAIDI: YOU HAD A WIDE ARRAY OF INVESTMENTS IN AUSTRALIA WE SPOKE LAST, FROM OIL AND GAS TO RETIREMENT VILLAGES. WE TALKED ABOUT DATA CENTERS. IS THAT A RENEWED FOCUS GIVEN HOW THE GOVERNMENT IS LOOKING AT THIS? MICHAEL: IT IS. WE HAVE DONE A LOT OF DATA CENTERS AROUND ASIA. WE WOULD BE ONE OF THE BIGGEST BUILDERS IN DATA CENTERS IN ASIA OF ANYONE. WE LOOK AT THE AUSTRALIAN MARKET AS WELL. SITE PRONOUNCEMENT THAT THE AUSTRALIAN GOVERNMENT IS TRYING TO LINK RENEWABLE DEVELOPMENT WITH DATACENTER DEVELOPMENT, WHICH I THINK IS CLEVER AND I'M SUPPORTIVE. THAT WOULD PLAY INTO ONE OF OUR STRENGTHS. WE ARE A BUILDER OF RENEWABLE POWER AROUND THE WORLD. BIG BUILDER OF DATA CENTERS. BRINGING THE SKILL SETS TOGETHER IS SOMETHING WE ARE FOCUSED ON IN AUSTRALIA. I'M MINDFUL OF COMMUNITY SENTIMENT. THE U.S., YOU ARE SEEING PUSHBACK. IN AUSTRALIA, YOU ARE SEEING SIMILAR THINGS. IT IS INCUMBENT UPON US AND BIG TECH COMPANIES TO COME UP WITH METHODS FOR DOING THIS THAT WIN OVER COMMUNITY SUPPORT, BRINGING POWER PRICES DOWN. THAT IS HOW WE APPROACH IT. HAIDI: GOOD TO CHAT WITH YOU, MIKE. AVRIL: TAKE A LOOK AT I GUESS THE READTHROUGH ON AI DEMAND. WHEN IT COMES TO THE KOREAN OUTPERFORMANCE THAT COULD BE CONTINUING FOR ANOTHER DAY ON THE KOSPI FUTURES SOARING, MAYBE THERE IS A BIT OF CONCERN ON THE MARGIN. BUT IN TERMS OF THE TAILWINDS, WE GOT JP MORGAN INITIATING THE UPGRADE FOR THE PRICE TARGET FOR SK HYNIX'S ADRS TO $245. THE INDICATION IS HIGHER IN THE EARLY GOINGS. SAMSUNG ALSO GETTING AN ASSIST AFTER OPENAI SAYS IT WOULD BE DEEPENING COOPERATION WITH IT WHAT IT COMES TO THE MAKING OF ITS OWN AI CHIPS. COMING UP, LIVE FROM SEOUL. WE WILL SPEAK WITH THE LAST REMAINING STARTUP IN SOUTH KOREA'S SO-CALLED AI SQUID GAME. IN THE NEXT HOUR, OUR INTERVIEW WITH SHIELD AI'S CO-FOUNDER ON WHY TAIWAN IS CENTRAL TO THE DEFENSE STARTUP'S GROWTH STRATEGY. THIS IS BLOOMBERG. ♪ HAIDI: TAKE A LOOK AT HOW WE ARE SETTING UP. THE START OF TRADING IN AUSTRALIA, ASX 200 FALLING TO THE LOWEST CLOSE SINCE THE END OF JULY, DECLINES IN FINANCIALS AND BANKS WERE THE BIGGEST LOSERS. CBA WAS A DRAGON THE PREVIOUS SESSION. THE RBA DEPUTY GOVERNOR SAID THE RESERVE BANK IS PREFERRED -- PREPARED TO RAISE RATES SO A BIT OF DOWNSIDE OF THE FUTURES ARE OFF THE SESSION LOWS. WATCHING YIELDS GIVEN THE MOVIE AND TREASURIES OVERNIGHT, THE DISAPPOINTMENT OVER THE BUYBACK ANNOUNCEMENT FROM THE TREASURY. AUSSIE DOLLAR FORGING AHEAD, HIGHER OVER THE LAST FOUR MONTHS. FOCUSING ON THE PROPERTY SECTOR BECAUSE NEW NUMBERS SHOWING HOME VALUES AT THE TOP END OF SYDNEY AND MELBOURNE'S HOUSING MARKETS ARE DOWN OVER 10% FROM THEIR PEAK. IT COMES FROM THE RBA POLICY MEETING THIS MONTH, MARKETS BRACING FOR ANOTHER POSSIBLE HIKE. OUR REPORTER JOINS US FOR MORE. THERE HAS BEEN FOCUS OVER THIS SITUATION. IS THIS A SIGN OF SYSTEMIC RISK? ARE DEVELOPERS AT RISK? >> GOOD QUESTION. A TRICKY ANSWER, YES AND NO. IN THE IMMEDIATE TERM, ON THE LISTED PROPERTY SECTOR THE IMPACT WOULD BE MORE TO DO WITH SENTIMENT IN THE COLLAPSE PUT A SPOTLIGHT ON THE MACROECONOMIC FACTORS MAKING IT SUCH A CHALLENGING ENVIRONMENT FOR PROPERTY DEVELOPERS. BORROWING IS HIGH AND DEMAND IS LOW BUT IF YOU LOOK AT INDIVIDUAL STOCKS, IT IS IMPORTANT TO NOTE THESE ARE DIFFERENT COMPANIES THAN BAFFLE A, WHICH IS A SUBURBAN PLAYER. THESE COMPANIES HAVE CLEARER REPORTING STANDARDS AND RISK MANAGEMENT STANDARDS AND WHEN WE LOOK AT AUGUST EARNINGS THEY HAVE A STRONGER BALANCE SHEET. ON THE RISK MANAGEMENT SIDE, THE RISK OF CONTAGION, PROBABLY NOT AS STRONG BUT LOOKING AT THE MACRO FACTORS, THEY ARE AT RISK. HAIDI: LOOKING AT THE LATEST FROM MORGAN STANLEY TALKING ABOUT SOFTENING SALES OUTLET OVER THE NEXT 6-12 MONTHS. WE HAVE MORE TO GO WHEN IT COMES TO ISSUES FACING THE PROPERTY MARKET. CARMELI: THE BIGGEST RISK IS HIGHER RATES AND AGGRESSIVE TIGHTENING FROM THE RBA. AUSTRALIA'S PROPERTY SECTOR IS ON TRACK FOR ITS WORST YEAR OF UNDERPERFORMANCE TO GLOBAL PEERS SINCE 2010. A BIG PART OF THAT HAS TO DO WITH THREE BACK-TO-BACK RATE RISES THE RBA HAS DONE SO FAR. THAT HAS IMPACTED BORROWING COSTS FOR DEVELOPERS, WHO ARE DEPENDENT ON DEBT TO FUND OPERATIONS. HIGHER INFLATION REMAINS A HEADWIND BECAUSE THAT LIFTS CONSTRUCTION COSTS. WITH THE WAR IN THE MIDDLE EAST AND HIGHER OIL PRICES, THAT IS NOT HELPING THE COST OF RAW MATERIALS. THE EXTENDED HOUSING DOWNTURN COMBINED WITH TAX POLICY CHANGES HAS BEEN TAKING THE HEAT OUT OF HOME BUYING DEMAND. HAIDI: YOU MENTIONED, IDIOSYNCRATIC BUT IN TERMS OF THE SENTIMENT CONTAGION COULD WE SEE STOCKS AFFECTED? CARMELI: I THINK SO. THE TWO BIG LISTED RESIDENTIAL PEERS ON THE STOCK MARKET, ONE OF THE FUND MANAGERS I TALKED TO SAID THEY COULD BE A NET BENEFICIARY AS PEOPLE LOOK TO A FLIGHT TO SAFETY AND MORE RELIABLE DEVELOPERS. THE MAIN STOCK IS SANTERIA. -- SANTERIA -- THEY HAVE SEEN A BIT OF A SELLOFF AFTER BATHLA WENT TO INSOLVENCY AND WE CAN SEE MORE COMING THROUGH WITH BATHLA CAN'T GET THE FUNDING TO STAY AFLOAT. HAIDI: LET'S TAKE A LOOK AT HOW WE ARE SETTING UP BECAUSE WE WILL FOCUS ON DEVELOPER STOCKS PARTICULARLY WITH THE OUTLOOK SOFTENING. A BUMPY RIDE FOR THE BROWSER -- THE BROADER RESIDENTIAL MARKET. QUITE A BIT OF DOWNSIDE, 1% LOWER FOR SYDNEY FUTURES AS WE ARE FIVE MINUTES AWAY FROM THE START OF TRAINING IN SYDNEY, SEOUL AND TOKYO. THIS IS BLOOMBERG. ♪ AVRIL: THIS IS THE ASIAN TRADE, COUNTING DOWN TO ASIA'S MAJOR MARKET OPENS. WE SAW THE OUTPERFORMANCE IN SOUTH KOREA A DAY AGO. WHETHER IT CAN CONTINUE BENEFITING FROM THE TAILWINDS RELATED TO AI DEMAND, PERHAPS THERE MIGHT BE PRESSURE GIVEN THE RALLY IN OIL PRICES DISRUPTING THE GAINS IN JAPANESE STOCKS. HAIDI: YOU CAN SEE THE EARLY MOVES AROUND SK HYNIX AND SAMSUNG SHRUGGING OFF HIGHER OIL PRICES. THAT WILL NOT BE THE CASE FOR THE BROADER MARKET, WHICH WILL SEE PRESSURE WHEN IT COMES TO A WAR OF ATTRITION, IRAN SAYING THEY ARE WILLING TO STAY THE COURSE AND AT THE SAME TIME WE ARE HAVING BOND MARKETS AND INVESTORS PUSHING BACK AGAINST TOUGH TALK FROM SCOTT BESSENT. AVRIL: ABSOLUTELY. . A BIT OF COMMENTARY ABOUT ASYMMETRIC INFORMATION. THE NIKKEI OPENING LOWER FOR YET ANOTHER SESSION, SO THREE DAYS AT LEAST THAT IT HAS BEEN OPENING ON THE BACK FOOT. THIS IS NO THANKS TO WHAT WE SEE IN THE RALLY IN OIL PRICES. BRENT POPPED ABOVE $101 OVERNIGHT, NEW YORK PRUDE IS NOT FAR FROM THE 100 HANDLE. INFLATION FEARS RESURFACING, PUTTING PRESSURE ON TREASURIES. WHAT THIS MEANS FOR JGB'S, THE PRESSURE IS THERE. THE TENURE MOVING BACK ABOVE THE 2.91 HANDLE IN TERMS OF YIELDS. MAYBE THIS IS CAPPING THE GAINS IN THE JAPANESE YEN. WE HAVE TO WATCH FOR NEXT WEEK WHEN IT COMES TO THE BOJ AND HOW HAWKISH A HIKE IT DELIVERS. LET'S TAKE A LOOK AT THE AI WINNERS. WE HAVE SEEN THE LIKES OF OPENAI TALKING ABOUT DEEPENING COOPERATION WITH SAMSUNG SO THAT IS A TAILWIND, AND SK HYNIX GETTING THE UPGRADE FOR ITS ADRS TO 245 DOLLARS ON ITS PRICE TARGET FROM THE LIKES OF J.P. MORGAN. THERE IS A BIT OF A PERFORMANCE IN THE KOSPI,. THE NOT BY MUCH. THE EXTENT TO WHICH THIS IS LED BY TECH STOCKS AND YOU ARE SEEING REVERSAL ON THE RALLY IN THE KOREAN WON. IT HAS LED THE PACK IN TERMS OF EMERGING MARKETS AND THIS IS DESPITE THIS MONTH, WHAT WE HAVE BEEN SEEING IN TERMS OF STOCKS AND BONDS IN KOREA MORE OR LESS SEEING INFLOWS. HAIDI: AT -- TAKE A LOOK AT THE REACTION ACROSS TREASURY MARKETS. WE MENTIONED THE LACK OF SHOCK AND AWE FROM THE BUYBACK PLAN. INVESTORS SHRUGGING THAT OFF. CONTINUED MOVES WHEN IT COMES TO THE 10 YEAR YIELD. THE BIGGER CONCERN WILL BE ENERGY MARKETS. BRENT CRUDE HOLDING ABOVE $101 FOR THE FIRST TIME SINCE JULY. NEW YORK TRADED CRUDE CLOSE TO $100 PER BARREL. IRAN IS PLANNING TO STAY THE COURSE WHEN IT COMES TO THE WAR. PRESIDENT TRUMP SAID IN HIS VIEW, HE DIDN'T SEE GAS PRICES COMING DOWN UNTIL AFTER THE MIDTERMS BUT THE READY TO -- THE READINESS TO ESCALATE WILL PLAY ON THE MINDS OF THOSE LOOKING AT BROADER INFLATION AND WHAT CENTRAL BANKS WILL DO. WE HEARD COMMENTS FROM THE DEPUTY GOVERNOR YESTERDAY OF THE RBA RATCHETING UP EXPECTATIONS THE RESERVE BANK WILL HAVE TO MOVE AGAIN. AUSTRALIAN EQUITIES OPENING LOWER BY 0.25%. WHAT ARE YOU WATCHING? BECAUSE OBVIOUSLY THERE IS THE TREASURY STORY, THE YEN STORY CONTINUES BUT THE BROADER DRAG FROM THE WAR, AND THE SENTIMENT IMPACT OF HIGHER OIL, IS REALLY AT PLAY. >> SCOTT BESSENT FORGOT TO LOAD THE BAZOOKA LAST NIGHT. AND THE REACTION IN THE BOND YIELDS CONFIRM THAT WHERE INVESTORS WERE DISAPPOINTED THAT , AFTER ALL THE TALK, THE BUYBACK CAME IN LOWER THAN EXPECTED. SO I THINK IT PUTS TONIGHT'S PRICE INDEX AND THE CPI FRIDAY MORNING INTO PLAY IN TERMS OF DIRECTIONAL FLOW FOR MARKETS. WE ARE IN A MACRO MARKET AT THE MOMENT. WE HAVE HAD THE BULK OF THE EARNINGS OF THE U.S. COME THROUGH SOME MARKETS ARE LOOKING FOR DIRECTION FROM THE MACRO POINT OF VIEW. THERE IS A BIT OF GREEN IN THE SEMICONDUCTOR SPACE OFF THE BACK OF A SUCCESSFUL LAUNCH FROM URBAN AI, WHICH REIGNITED INTEREST IN CHIP STOCKS. LARGELY MEMORY STOCKS. THEY HAVE BEEN LEADING THE MARKET OVER THE PAST FEW SESSIONS. HAIDI: YOU SEE THE EARLY PRICE ACTION FROM KOREA OR THE BIG KOREAN NAMES. NOT TOO CONCERNED OVER OIL. SUNNY: FOR THE MOMENT. THE INTERESTING THING ABOUT THE CRUDE MARKET, WE HAVE HAD SHANGHAI CRUDE FUTURES RALLY HARD OVER THE LAST FEW WEEKS. SHANGHAI CRUDE FUTURES ARE TRADING AT A BIG PREMIUM TO BRENT. SO THERE IS BUYING FROM THE CHINESE MARKET REEMERGING AGAIN. AND EVERYONE IS WATCHING THE PRICE OF GASOLINE RELATIVE TO OIL. HEATING UP RELATIVE TO OIL. A LOT OF UNDERLYING PRODUCT MARKETS ARE IMPLYING THE OIL PRICE SHOULD BE HIGHER AND I THINK IF THE OIL PRICE GOES UP $20 OR $30 IT WOULD WEIGH ON SENTIMENT AND ON THE CHIP STOCKS. THEY WILL PROBABLY NOT BE ABLE TO LOOK PAST IT. HAIDI: THE DOLLAR IS THE LOWEST IN SEVEN MONTHS. THE YEN IS NOT HEALTHY, BUT WHAT DOES THAT TELL YOU ABOUT THE U.S. ASSET COMPLEX AT THE MOMENT? SUNNY: INTERESTING OBSERVATION BECAUSE WHAT I THINK YOU WOULD NORMALLY SEE WITH A RISING BOND YIELDS MARKET IS A RISING CURRENCY. BUT THIS IS A WAY INVESTORS ARE VOTING ABOUT THE U.S. DOLLAR THROUGH, MANY OF THE MAJOR CURRENCIES AND GOLD. THAT HAS BEEN THE BID IN THE MARKET OVER THE LAST FEW WEEKS. I THINK THE INTERESTING THING WILL BE NOW, WHAT IS THE FEDERAL RESERVE DO NEXT WEEK IN TERMS OF ALLAYING FEARS OF INFLATION AND WHETHER THEY CAN GET THE NARRATIVE BACK IN TERMS OF INFLATION FIGHTING CREDENTIALS. THE DOLLAR WILL BE DEPENDENT ON HOW THE FED MANAGES MARKETS EXPECTATIONS. AVRIL: THANK YOU SO MUCH, SUNNY. LET'S GET MARKET ANALYSIS. CHRISTINA, WHAT DO YOU THINK? IS EVERYTHING GOING TO BE OK WITH THE WHALE RALLYING IN THIS MANNER? WHAT DOES THIS MEAN FOR SELF ARENA -- SOUTH KOREA? COULD IT RETURN TO OUTPERFORMANCE? >> IT IS AN IMPORTANT TOPIC. I THINK THE WAY WE SHOULD THINK ABOUT STOCKS AT THIS POINT IS THAT WE DO HAVE TO BE QUITE SELECTIVE AND SENSIBLE ABOUT THINGS. I'M NOT ENTIRELY SURE WE WILL SEE THE SAME STRENGTH OR BROAD-BASED RAILING WE SAW THIS YEAR. I THINK THAT WAS MORE OF A BEACH DRIVEN RISE GOING INTO THE SECOND HALF OF THIS YEAR OR THE LAST QUARTER ACTUALLY. WE WILL HAVE TO BE MORE SELECTIVE IN THE AREAS WE CHOOSE TO PLAY IN. INFLATION WILL BE SOMETHING THAT EVERYBODY WILL BE WATCHING INTO THE NEXT EARNINGS SEASON AS WELL AS NEXT WEEK, THE RATES TRAJECTORY. AVRIL: SO BEING MORE SELECTIVE. WHAT PART OF THE AI STACKED YOU LIKE? >> IF WE TALK ABOUT TECH, IF WE CHOOSE CERTAIN BITS THAT HAVE MORE FUNDAMENTALS THAT SUPPORT THEM ALONGSIDE VALUATIONS THAT ARE NOT AS, THAT HAVE NOT OVERSHOT ON THE OTHER END, THAT COULD BE WHERE YOU LOOK. WE LIKE TESTING NAMES IF WE THINK ABOUT THE COMPLEXITY OF CHIPS INCREASING AND THAT WILL REQUIRE MORE TESTING THAT WILL -- AND WILL ALSO REQUIRE UNDER TESTING AS WELL SO THIS IS AN AREA WE DO LIKE OR AREAS WITHIN THE AI SUPPLY CHAIN WHERE THERE ARE BOTTLENECKS, WE STILL SEE PRICING GO UP. SO THESE ARE EXAMPLES WHERE YOU HAVE TO PICK AND CHOOSE MORE SELECTIVELY. AVRIL: WHAT ABOUT OPTICALS? >> THAT HAS ALSO BEEN QUITE AN INTERESTING SPACE TO LOOK AT. WHAT WE HAVE SEEN EARLIER THIS YEAR WITH THE SHARP PRICE AND CORRECTIONAL, IT IS A GOOD REMINDER THAT EVEN IF THE STORY IS VERY INTERESTING, YOU HAVE TO MARRY THE RHETORIC ALONGSIDE FUNDAMENTALS. WITH THE RECENT CAN -- CORRECTION WE HAVE SEEN EXPECTATION BE VIEW BASED AS WELL SO THAT COULD BE INTERESTING. AVRIL: FOR KOREA IT LOOKS LIKE IN SEPTEMBER FOREIGN INVESTORS CAME BACK. WHAT ELSE DO YOU THINK THEY WOULD NEED FOR THINGS TO RUN FURTHER? >> I THINK IT WOULD BE IMPORTANT TO LOOK INTO THE EARNINGS SEASON THAT WILL COME AT THE END OF THE MONTH OR STARTING AT THE END OF THE MONTH. I THINK THAT WILL BE IMPORTANT. THE WAY THAT WE SEE THINGS PARTICULARLY FOR THE MEMORY STOCKS IS THAT THEY HAVE HAD A STRONG RUN THIS YEAR. FOR A COUPLE YEARS ALREADY. IT IS A CONSENSUS TRADE THAT PEOPLE LIKE AND IT IS NOT EARLY CYCLE AS WELL WHICH IS WHY I THINK WHERE THINGS ARE RIGHT NOW AND WITH THE CORRECTION WE SAW LAST MONTH GOING INTO THE REST OF THE YEAR, I THINK PEOPLE WILL BE MORE PRUDENT AND HOPEFULLY MORE TACTICAL WHEN IT COMES TO THINKING ABOUT TAKING PROFIT ON SPIKES. AVRIL: IS THERE A NEED TO BE DEFENSIVE ON THE MARGINS? WHAT WOULD THAT ENTAIL? >> I THINK IF THERE'S ANYTHING THEY LEARNED, IT IS HAVING DEFENSIVENESS IN YOUR STRATEGIES WILL BE IMPORTANT. THERE ARE SELECT FINANCIALS IN THE MARKET RIGHT NOW THAT COULD BE USEFUL FROM A DEFENSIVE STANDPOINT, NOT JUST THE FACT THAT THEY ARE A BIT MORE STABLE IN TERMS OF THE SECTORS THEY PLAY IN BUT IF YOU ARE THINKING ABOUT POSITIONING INTO POTENTIAL RATE HIKES, SOME OF THE FINANCIALS COULD PROVIDE A DIFFERENT FLAVOR TO THE PORTFOLIO THAN JUST BETTING EVERYTHING ON TECH. AVRIL: WHAT ABOUT CHINA FINANCIALS? IS THAT PART OF THE MIX? THEY HAVE DONE FAIRLY WELL. ARE THERE EXPECTATIONS OF RECAPITALIZATION? MAYBE THAT IS A FORESHADOWING OF POLICY EASING? >> I THINK THAT'S A GOOD PLACE TO BE LOOKING AT THIS POINT WITHIN CHINA FINANCIALS. YOU THINK ABOUT THE FACT THAT ALTHOUGH THEY HAVE BEEN HOLDING UP WELL, YOU LOOK AT THE YIELDS THEY HAVE BEEN GIVING, YOU LOOK AT THE RHETORIC FROM THE GOVERNMENT AND THE DEFENSIVENESS RELATIVE TO MANY OTHER PLACES IN ASIA, THAT ALLOWS THE SECTOR WITHIN CHINA TO STACK UP WELL IN THE MIX FOR ASIA PORTFOLIOS. AVRIL: DO YOU HAVE A PREFERENCE FOR H OR A? >> AT THIS POINT THERE ARE BENEFITS TO BOTH. FROM THE H PERSPECTIVE, MANY OF THESE NAMES HAVE A DEFENSIVE IS FROM THE YIELD COMPONENT. THAT IS WHERE WE ENJOYED SOME OF THE H SHARE EXPOSURE. WHAT WE GET IS, YOU CAN GET EXPOSURE TO CERTAIN COMPANIES WITHIN CHINA DOMESTICALLY THAT MAY NOT HAVE, THAT YOU MAY NOT BE ABLE TO ACCESS FROM THE HONG KONG LISTED SITE SO THAT IS WHERE I THINK RATHER THAN CHOOSING H OR A, YOU HAVE A MIX OF BOTH. AVRIL: WHAT ABOUT THE INTERNET MEMES? IN SPITE OF EARNINGS LOOKING OK THEY ARE UNDER PRESSURE. IT'S AT THE SPECTER OF THEM HAVING TO RAISE FOR MORE SHARE PLACEMENTS? MAYBE THEY ARE CONSTRAINED BY THE IPO BOOM. IS THAT IN PLAY WHEN IT COMES TO CHINESE INTERNET NAMES AND FOR THEM TO LIFT A BIT FURTHER? >> THIS YEAR THE CHINA INTERNET NAMES HAVE NOT BEEN WELL FAVORED BY INVESTORS. I THINK SOME PART OF THAT IS WHEN WE LOOK AT POSITIONING, THERE HAS BEEN A LOT MORE INTEREST TOWARDS THE TECH HARDWARE SIDE SO THAT SUPPLY CHAIN WITHIN CHINA. YOU SEE A BIT OF ROTATION ON THE BACK OF CHINA INTERNET NAMES BEING STRONG. WHEN YOU LUCK AT WHERE THINGS ARE NOW, VALUATIONS ARE MORE ATTRACTIVE. THESE ARE CASH FLOW GENERATING COMPANIES BEARING IN MIND THE REQUIREMENT GOING FORWARD. IF WE LOOK AT RECENT COMMENTARY, SOME OF THESE COUNTRIES HAVE BEEN MORE TRANSPARENT WHEN IT COMES TO PARAMETERS AROUND AI INVESTMENT AND THINGS LIKE THAT. THESE ARE GOOD DATA POINTS FOR INVESTORS TO BE ABLE TO HANG THEIR HATS ON AS WE CITE POSITIONING INTO THE NEXT OF THE YEAR. AVRIL: THANK YOU, CHRISTINA, PORTFOLIO MANAGER. CONTINUING THE CONVERSATION, APPLE SUPPLIES AFTER THEY DEBUTED A PORTABLE -- FOLDABLE IPHONE. IT IS A MIXED BAG DESPITE REPORTING ON HOW SAMSUNG AND LG WILL BE SUPPLIERS FOR THE FOLDABLE PHONE. WE HAVE MORE AHEAD ON THE ASIA TRADE THIS IS BLOOMBERG. ♪ HAIDI: TO COLLECT AND OIL AND -- TAKE A LOOK AT OIL AND GAS PRICES AS THEY PUSH HIGHER. IRAN SAYS IT IS PREPARED FOR MORE INTENSE WAR AS HOSTILITIES FLARE. ONE SENIOR IRANIAN OFFICIALS THAT THEY ARE PREPARED FOR MORE INTENSE HOSTILITIES SO HEIGHTENING CONCERNS ABOUT PROLONGED ENERGY DISRUPTIONS IN THE STRAIT OF HORMUZ. BRENT CRUDE ABOVE 101 DOLLARS FOR THE FIRST TIME SINCE JULY. DEAR TRADED CRUDE PUSHING HIGHER 0.8%. EUROPE GAS FUTURES LOWER 0.4%. HEARING FROM THE WALL STREET JOURNAL, THE SENIOR ADVISERS APPROACHED THE PRESIDENT INCLUDING JD VANCE ABOUT THE PROSPECT OF THE WAR DRAGGING FOR THE REST OF HIS PRESIDENCY. THERE ARE CONCERNS OF MILITARY DEPLETION AND THE INFLATIONARY IMPACT ON THE REST OF THE WORLD. WITH THE PREPAREDNESS FOR OR INTENSITY FROM IRAN, THE POTENTIAL TO ESCALATE, COUNTER STRIKES OF AMERICAN ATTACKS HAVE BEEN FLAGGED. TEHRAN SEES THE WAR WITH WASHINGTON AS AN EXISTENTIAL THREAT. NO DOUBT THE COMMENTARY AROUND WHERE THE GOES -- WHERE THE WAR GOES WILL BE PART OF THE MESSAGING. IT IS CONTRIBUTING TO SLUMPING POLES FOR PRESIDENT TRUMP AND ONE OF THE BIG ISSUES IN THE COST OF LIVING. WHATEVER HEARING IN TERMS OF THE IRAN SIDE AND HOW THE WHITE HOUSE IS PREPARED TO DEAL WITH A WAR OF ATTRITION? ERIK: REPUBLICANS AT THE CONVENTION WANT TO TALK ABOUT ANYTHING BUT THE IRAN WAR. THEY ARE TALKING ABOUT THE NEED TO KEEP AMERICA SAFE AND YOUR BUT THEY ARE MORE WORRIED ABOUT KEEPING IT SAFE AND SECURE FROM DEMOCRATIC SOCIALISTS. THAT IS THE MESSAGE WE ARE HEARING FROM THE STAGE FROM A SLEW OF CANDIDATES IN SWING STATES AND DISTRICTS. THERE IS PROMOTING OF TRUMP TAX CUTS AND THE IDEA THAT THEY MIGHT BE REPEALED IF DEMOCRATS COMING BUT THERE IS A REAL FOCUS ON WHAT THEY ARE CALLING EXTREME CANDIDATES THE DEMOCRATS HAVE NOMINATED THE STATES. WHEN YOU TALK TO REPUBLICAN STRATEGISTS OFF THE RECORD THEY WOULD LIKE TO SEE THE WALL WRAPPED UP. -- THE WAR WRAPPED UP. ACKNOWLEDGING THAT GAS PRICES, NEARING SIX DOLLARS PER GALLON IN THE U.S., WOULD BE CLOSER TO THREE DOLLARS IF THE WAR HADN'T TAKEN PLACE. HAIDI: THE PRESIDENT SAYING HE DOESN'T SEE GAS PRICES COMING DOWN UNTIL AFTER THE MIDTERMS. WHAT ARE WE EXPECTING POTENTIALLY, AND OTHER REPUBLICAN LEADERS ADDRESSING GIVEN THAT THERE ARE THE REVIVAL OF TRADE WARS, NOT HELPING IN KEY STATES. ERIK: ONE THING THEY ARE TRYING TO HIGHLIGHT IS WHAT THEY CALL THE REVIVAL OF MANUFACTURING. WE ASKED REPUBLICANS AND THEY SAID THIS IS A LONG-TERM STRATEGY. THIS IS SOME OF THE ORDINARY AMERICANS THAT HAVE BEEN FEATURED TO TALK ABOUT THEIR PARTICULAR BUSINESSES AND HOW THEY MAY HAVE BENEFITED. IT DOES -- THERE IS LITTLE ACKNOWLEDGMENT THAT CONSUMERS PAY THE ULTIMATE COST OF TARIFFS . MORE OF SUPPORT FOR PRESIDENT TRUMP, CONTINUING THE STRATEGY INTO THE NEXT TWO YEARS. HAIDI: CAN YOU TELL US ABOUT THE KEY RACES WE SHOULD WATCH CLOSELY IN THE MIDTERMS? ONE THING I'M LOOKING AT IS NORTH CAROLINA, MICHAEL WHATLEY WAS HERE ON THE STAGE. HE IS AGAINST A FORMER DEMOCRATIC GOVERNOR, BEHIND ABOUT EIGHT POINTS. WE ARE SEEING, AT WHAT POINT WILL REPUBLICAN DONORS CUT BAIT ON THAT RACE AND THE GEORGIA RACE? MIKE COLLINS IS VERY BEHIND. JON OSSOFF IS IN CONTROL. SHIFTING RESOURCES TO PLACES LIKE ALASKA, OHIO, IOWA, PLACES THAT ARE IN PLAY BECAUSE OF THE TRADE WITH CANADA AND SOME OF THE MISSTEPS THAT HAVE COST THE PRESIDENT'S POPULARITY. HAIDI: THAT IS ERIC AT THE REPUBLICAN COMMITTEE CONVENTION TAKING PLACE IN DALLAS. MORE AHEAD ON THE ASIA TRADE. THIS IS BLOOMBERG. ♪ AVRIL: INDIA'S AXIS BANK ONES A LIMITED OIL PRICES WILL KEEP HEAVY PRESSURE ON THE RUPEE. THE CEO DISCUSSED THE CURRENCY STRAIN WHILE DETAILING HOW ARTIFICIAL INTELLIGENCE IS IMPACTING LENDERS HIRING STRATEGY. >> OUR HOPE IS TO START WITH, THERE IS NO NEED TO CONTINUE TO INCREASE THE HEADCOUNT AT THE SAME PACE. MAYBE WE WILL MAINTAIN IN THE SAME ZONE AND GROW. THE BENEFIT OF AI IS MUCH MORE THAN THAT. YOU MIGHT SEE REDUCTION IN JOBS, THAT IS A GIVEN. WE WILL HAVE TO GO TO THAT AND MANAGE THE CHANGE. >> ARE YOU SAYING THE STATUS QUO COULD BE THE WAY FORWARD? WE HAVE BANKS GIVING ESTIMATES, 20,000 JOBS IN MULTIPLE YEARS FOR CITY. ENTER 200-7000. THESE ARE BIG NUMBERS. >> THEY ARE GROWING AT A LOWER PACE THAN US. IN THAT SENSE THEY CAN PREDICT BETTER. WE CAN ABSORB SOME OF THE GROWTH THROUGH NOT INCREASING HEADCOUNT. WE ARE NOT GOING TO ANNOUNCE A REDUCTION IN JOBS. WE DON'T INTEND TO BUT OUR HOPE IS THAT THE GROWTH AND ATTRITION WILL ALLOW US TO MANAGE THIS QUITE EASILY. THAT IS OUR HOPE. >> LET'S TALK ABOUT THE RECENT EASING IN FX DEPOSITS. >> THE NUMBER WAS HIGHER THAN WHAT ANYBODY PREDICTED. IT GOES TO SHOW THAT PEOPLE ARE WILLING TO TAKE A RISK AND THIS WAS A SCHEME WHERE MANY INDIANS THAT IT WAS INVESTING IN. LIKE ANY OTHER BANK USE THIS TO RAISE THIS AMOUNT OF MONEY. WE HAVEN'T DISCLOSED THE NUMBER. WE WILL LET THE RIGHT STAGE. >> REALISTICALLY HOW MUCH OF THE FLOWS CAN YOU CAPTURE? HOW MUCH CAN GO INTO LENDING AND GROWTH? >> IF YOU LOOK AT THE AMOUNT OF MONEY RAISED, THE GROWTH IN THE SYSTEM WILL ABSORB THIS OVER THE NEXT THREE QUARTERS. I DON'T THINK THAT IS A BIG PROBLEM. CURRENT GROWTH HAS PICKED UP. THE CREDIT GROWTH OVER THE LAST FEW MONTHS IS 18% SO AT THAT PACE IT WILL BE EASY TO ABSORB THIS. I'M NOT PRIVY TO WHAT IS HAPPENING IN THE MACRO. IT IS A TEMPORARY DOSE OF LIQUIDITY. IT WILL BE ABSORBED QUICKLY AND ALLOW THINGS TO LOOK BETTER. SOME BANKS HAVE MUCH MORE MONEY THAN OTHERS SO THEY HAVE BEEN ABLE TO TAKE ADVANTAGE OF THIS SORT OF BALANCE SHEET AND PAYROLL COUNT. >> IT HELPED STABILIZE THE RUPEE BUT WE HAVE AN ENVIRONMENT WHERE OIL PRICES KEEP HEDGING HIGHER. HAVE WE SEEN THE WORST FOR THE INDIAN RUPEE? IT BE UNDER TREMENDOUS PRESSURE FROM HERE? >> IT SEEMS TO BE UNDER PRESSURE IN SPITE OF INDIA RAISING MONEY. IN THAT SENSE WITH OIL PRICES, THE SPIKING AND UNCERTAINTY IN THE GULF CONTINUES, MY WORRY IS THE PRESSURE ON THE RUPEE WILL NOT GO AWAY. >> WHAT DOES INDIA NEED TO DO? TAKE A LOOK AT HOW IT HAS BEEN RESILIENT IN TERMS OF GROWTH. WHETHER OR NOT THAT IS SUSTAINABLE DEPENDS ON WHAT INDIA DOES. >> INDIA DID I GOOD JOB SUPPORTING THE BUSINESSES, THEY ABSORBED THE OIL PRICE AND SUPPLY SHOCK BY ENSURING THAT THEY DIDN'T PASS IT ON TO THE CONSUMER. THE INDIAN GOVERNMENT DID A GREAT JOB IN THE FIRST STAGE OF THE CRISIS. LET'S SEE HOW LONG THIS LASTS. THE ONES YOU HAVE BEEN SEEING THE LAST COUPLE DAYS, MY VIEW IS NONE OF THE PARTIES CAN AFFORD TO SUSTAIN IT FOR TOO LONG SO IF YOU COME BACK TO A SLIGHTLY LESSER LEVEL OF HOSTILITY THAN WHAT WE SEE TODAY. HAIDI: YOU TALK ABOUT -- >> YOU TALK ABOUT HDFC BANK LOOKING FOR A TOP MAN. HAVE YOU BEEN APPROACHED? >> I CAN'T COMMENT BUT I WORK FOR THE GROUP. I WANT THE BEST FOR THE GROUP. IT IS LED BY AN EMINENT CHAIRMAN AND I'M SURE THEY ARE LOOKING AT ALL THE POSSIBILITIES AND WILL COME UP WITH THE RIGHT SOLUTION. THE MEDIA IS HAVING A FIELD THAT. LET THEM. >> HAVE YOU BEEN APPROACHED? >> NO. >> WOULD YOU BE INTERESTED? >> THE POINT IS I HAVE BEEN WORKING, I HAVE ANOTHER 18 MONTHS TO GO. I WORKED FOR 36 MONTHS. I'M FOCUSED AND THAT IS WHAT I'M FOCUSED ON. HAIDI: THAT WAS THE ACCESS BANK OFFICIAL THERE. TREASURY SECRETARY SCOTT BESSENT IS SPEAKING AT THE REPUBLICAN NATIONAL CONVENTION. MUCH MORE AHEAD. THIS IS BLOOMBERG. ♪ ♪ >> LET’S TAKE YOU BACK TO DALLAS WITH THE TREASURY SECRETARY SCOTT BESSENT IS SPEAKING AT AN UNUSUAL MIDTERM CONVENTION AND FOR THE MOMENT HE’S BEEN TALKING ABOUT TAX CUTS, TRADE REBALANCING AS WELL. OF COURSE, THERE’S BEEN A LOT OF FOCUS IN THE SESSION OVERNIGHT GIVEN THE TREASURY’S BUYBACK PLAN AND SOME OF THE CENTRY SURROUNDING JAPAN’S POLICYMAKING OF LATE. LET’S LOOK AT WHAT WE’RE SEEING IN ASIAN MARKETS FOR THE MOMENT. THE SPECTER OF YET HIGHER YIELDS SEEMS TO BE PUTTING MORE PRESSURE ON STOCKS OVERALL, EVEN SOUTH KOREA’S KOSPI WHICH YESTERDAY BUCKED THE TREND IS BUCKLING TODAY AND THE LIKES OF SK HYNIX AND SAMSUNG ELECTRONICS ARE ALSO LOOKING WOBBLY. THE HANG SENG INDEX HAS EXTENDED ITS WEEKLY DECLINE TO ANOTHER WEAK SESSION AS SURGING SALES SHARE CONTINUES TO WEIGH ON THE CHINESE INTERNET SECTOR. FIRMS THERE HAVE RAISED FOR THAN 45 BILLION THIS YEAR. ANTHONY STEPHENS JOINS US FOR MORE. WHAT’S DRIVING THE CHINESE TECH COMPANIES TO EQUITY FUNDRAISING? ANTHONY: INTERESTING PUSH AND PULL DYNAMIC. YOU HAVE I.P.O.’S COMING IN ON THE L.L.M. SIDE, DEEPSEEK AND MOONSHOT AND THE CHINESE COMPANIES HAVE RAISED AROUND 25% OF SALES, COMPARED TO THE HIGH 30’S NUMBER FOR THE U.S. SO THERE’S STILL SOME ROWS TO PLOW FROM A CAPEX FRONT. IT SPEAKS TO A DIFFERENCE ON THE CAPITAL FRONT BETWEEN THE U.S. AND CHINA. IN CHINA THE DEBT CAPITAL RAISING IS IN BIG MULTIPLES IN FAVOR OF EQUITIES WHEREAS IN THE U.S. IT’S THE OTHER WAY AROUND WITH ISSUANCE BEING MATCHED IN DEBT ISSUANCE SO WHY IS THE U.S. DEBT CAPITAL MARKET MORE FAWNINGSENING THAN THE CHINESE? LACK OF HISTORY. THE CHINESE COMPANIES HAVE NOT HAD A LOT LONG HISTORY IN GOING TO THE BOND MARKET TO RAISE CAPITAL. CHINESE COMPANIES PREFER TO RAISE MONEY IN EQUITIES AND NOT STRAP ON MORE DEBT, QUITE DIFFERENT IN THE U.S. COMPANIES. IT’S QUITE EXPENSIVE FOR U.S. COMPANIES HISTORICALLY TO GO TO THE DEBT MARKET. OVER TIME MAYBE WE SEE CHINESE TECH COMPANIES GO TO THE DEBT MARKET MORE THAN EQUITIES BUT IT’S BADLY LAGGING TAIWAN AND KOREA TO PLAY IN THE AI TRADE. >> INTERESTING THE HISTORY AND CULTURE THAT YOU BRING UP. HOW IS ALL OF THIS GOING TO IMPACT CAPITAL ROLL OCCASION IN CHINESE EQUITIES? ANTHONY: YOU SEE AN EMERGENCE OF THE BIG TECH ATTENDANCE. CHINESE INTERNET COMPANIES IS LOOKING TO MAKE A NEW LOW THIS YEAR. THERE IS A VERY BIG DIFFICULTY IN TERMS OF TENCENT, ALIBABA AND BAIDU. ECM BANKERS CONTINUE TO BE QUITE OPTIMISTIC WHEN PRICING THESE DEALS. AND IT IS ALSO SUPPRESSING THE AFTER-MARKET PERFORMANCE. PEOPLE HAVE VERY LITTLE EDGE TO WORK WITH THIS CHINESE CAPITAL TRADES. THIS IS KEEPING PEOPLE OUT OF THE SOFTWARE SPACEX PILING ONTO THE OTHER PARTS OF ECONOMY THAT ARE BENEFITING SO YOU’VE SEEN SOME STRONG RALLIES IN CHINESE BANKS. IN BIOTECH AND STUFF LIKE T CHINEX EQUITY RATES. THIS IS SUPPORTING THEM IN THE CHINESE EQUITIES SPACE. HAIDI: CHINA SAYS IT’S WILLING TO HOLD TALKS WITH THE YOU SAID ON ARTIFICIAL INTELLIGENCE EVEN IF IT REJECTS THE ASSERTION THAT SOME OF ITS COMPANIES IMPROPERLY EXTRACTED KNOWLEDGE FROM U.S. MODELS. HOW DO WE SEE THIS PLAYING OUT? >> THIS BEIJING’S STRONGEST AND MOST FORCEFUL RESPONSE YET TO THE U.S. ALLEGATION OF DISTILLATION. THE CHINESE MINISTER LAST NIGHT SAYING ALL THESE ALLEGATIONS WERE BASELESS. IT IS, INDEED, USED BY A LOT OF AI DEVELOPERS TO TRAIN SMALLER MODELS BY USING OUTPUT OF MORE EXPENSIVE AND LARGER MODELS AS A WAY TO CUT COST BUT THE U.S. IS CLAIMING THAT THE CHINESE ARE DOING IT SYSTEMATICALLY ON AN INDUSTRIAL SCALE AND THIS HAS RAISED TENSIONS BETWEEN THE U.S. AND CHINA JUST WEEKS BEFORE PRESIDENT TRUMP IS SET TO WELCOME BING PING TO THE WHITE HOUSE FOR THEIR SECOND SUMMIT OF THE YEAR. CHINA IS WILLING TO HOLD AI TALKS WITH THE U.S. BUT THIS HAS RAISED A LOT OF TENSIONS BECAUSE THIS HAS BEEN A CENTER ISSUE OF CHINA’S TECH COMPETITION WITH THE U.S. AND IT’S GOING TO RAISE A LOT OF QUESTIONS OVER WHETHER THE TWO COUNTRIES CAN ACTUALLY SIT DOWN TO ADDRESS ALL OF THE THEORY RISKS IN AI. HAIDI: IN TERMS OF HOW THIS IMPACTS OBVIOUSLY AI MODELS AND SOME OF THE SECURITY CONCERNS, DO WE SEE IT AS BEING A MAJOR ISSUE AHEAD OF THE LITTLE SUMMIT BETWEEN TRUMP AND XI? COULD THE BROADER TRADE TRUCE BE IMPACTED AS WELL? >> THE FROM THE CHINESE STATEMENT WE CAN SEE THAT BEIJING DOESN’T SEE IT AS CHINA’S FAULT. IT SAYS THAT THIS IS A COMMON PRACTICE AND SUGGEST THAT IS U.S. COMPANIES HAVE DISTILLED CHINESE MODELS IN THE PAST SO WE’RE SEEING A BIG DIE VERNALLENS HERE. AI EMERGING AS A CENTRAL POINT OF TENSION BETWEEN THE TWO COUNTRIES PARTLY BECAUSE CHINA’S AI MODELS HAVE BEEN QUICKLY CATCHING UP WITH THE U.S. AND CLOSING THE PERFORMANCE GAP. ALIBABA MAKING A BIG RELEASE IN THE SUMMER AND THAT CAUSES A LOT OF CONCERN IN THE U.S. ABOUT WHETHER THE U.S. CAN CONTINUE TO BE AHEAD OF CHINA IN AI. AND THIS DISLIST OF INFORMATION WHICH FIRST CAME FROM U.S. AI LABS NOW BEING INCREASINGLY VOICED BY TRUMP ADMINISTRATION OFFICIALS. AND THE F.B.I. RELEASED A LATEST STATEMENT PUSHING ALL THESE ACQUISITIONS FURTHER BY NAMING SPECIFICALLY WHICH CHINESE COMPANIES ARE STEALING FROM WHICH U.S. MODELS AND FOR WHAT PURPOSE AND THAT IS WHAT PROMPTED THIS STRONGLY WORDED STATEMENT FROM THE STRAYING. AVRIL: THANK YOU SO MUCH. COMING UP, WE’RE SPEAKING WITH THE PRESIDENT AND CO-SOUNDER OF SHIELD AI ON WHY TAIWAN IS BECOMING A CENTRAL PLAYER TO ITS GROWTH STRATEGY. THIS IS BLOOMBERG. AVRIL: SOFTBANK SAYS IT WILL REPAY THE BALANCE OF A BRIDGE LOAN THAT WAS USED TO FINANCE ITS INVESTMENT IN OPENAI. THE JAPANESE CONGLOMERATE WILL PAY DOWN THE ROUGHLY $36 BILLION STILL OUTSTANDING IN BORROWING THIS YEAR. REFLECTING ITS DETERMINATION TO POSITION ITSELF AT THE CENTER OF GLOBAL AI BOOM. BLOOMBERG HAS LEARNED THAT DELL RAISED $5 BILLION FROM AN INVESTMENT-GRADE BOND SALE. INVESTORS PLACED ROUGHLY $23 BILLION OF ORDERS FOR THE OFFERING AT ITS PEAK OR ALMOST FIVE TIMES THE SIZE OF THE DEAL. THE COMPANY IS SAID TO BE USING THE PROSOLD TO PAY OFF NOTES MATURING THIS YEAR. A RESIGNATION FROM ANTHROPIC ACCUSING TOP TECH FIRMS OF OPERATING UNSAFELY. HIS EXIT COMES AMID GROWING ENTRY BACKLASH WITH RESEARCHER AND LAWMAKERS TO DELIBERATE PACE ADVANCED AI DEPLOYMENTS. HAIDI: DEFENSE TECH, SHIELD AI IS A U.S. BASED DEFENSE START-UP. IT REACHES TAIWAN AND UKRAINE. THE FIRM IS VALUED AT MORE THAN $12 BILLION. ITS CO-FOUNDER AND IF THE BRANDON JOINS NOW FROM SEOUL. GREAT TO HAVE YOU WITH US AND UNFORTUNATELY WE’RE LIVING IN A WORLD WHERE MILITARY CONFLICT AND SECURITY CONCERNS ARE PARAMOUNT AND IT SEEMS THINGS ARE ACTUALLY WORSENING ACROSS VARIOUS FRONTS RATHER THAN IMPROVING. CAN YOU TELL US WHERE YOUR BUSINESS FITS INTO ALL OF THIS? BRANDON: THANKS FOR HAVING ME. SHIELD AI TODAY IS A GLOBAL BUSINESS WITH 2,000 EMPLOYEES AND WE FIND OURSELVES AT THE CENTER OF EITHER IN A CONFLICT OR TRYING TO DETER A CONFLICT SO WE’RE OPERATING ACROSS 20 DIFFERENT TIME ZONES, 24 HOURS A DAY, SEVEN DAYS A WEEK, HAVE OUR PEOPLE IN A VARIETY OF DIFFERENT GEOGRAPHIES, WHETHER THAT’S OPERATING WITH THE UKRAINIANS, OUT OF THE ARABIAN GULF, IN THE SOUTHERN HEMISPHERE SUPPORTING U.S. OPERATIONS AND OBVIOUSLY WE’VE BEEN SPENDING A LOT OF TIME AND ATTENTION IN THE ERICA PACIFIC REGION AS WE THINK ABOUT OPPORTUNITY TO DETER A MAJOR CONFLICT. WE BELIEVE THAT THE GREATEST VICTORY REQUIRES NO WAR AND BELIEVE THAT PEACE IS ACHIEVED THROUGH OVERWHELMING STRENGTH. HAIDI: TELL US MORE ABOUT THE INVESTMENT IN TAIWAN AND SOME OF THE PARTNERSHIPS THAT YOU HAVE THERE AND WHAT EXPANSION OPPORTUNITIES YOU COULD SEE? BRANDON: THE REASON WE’RE IN TAIWAN IS BECAUSE IT’S A HUGE OPPORTUNITY TO DETER CONFLICT. IN PURSUIT OF DETERRING A MAJOR CONFLICT IN THE REGION, WE’RE SEEKING PARTNERSHIPS WITH THE MAJOR TAIWAN EASE AIR SPACE CON GLOM RATE. WE HAVE PARTNERED WITH THEIR SCIENCE AND SPACE INSTITUTE TO HELP LOCAL TAIWANESE COMPANIES, DRONE COMPANIES, BUILD AI AND AOF AUTONOMY AND WE’RE WORKING CLOSELY WITH THE TAIWAN EASE AUTHORITIES TO BUILD OUR DRONES AND OBVIOUSLY WE CARE VERY MUCH ABOUT WORKING WITH THE TAIWANESE NAVY AND AIR FORCE WITH A AREA VARIETY OF OUR DIFFERENT PRODUCTS. WE’RE VERY ACTIVE. HAIDI: THERE ARE SANCTIONS CONCERNS FROM CHINA’S COMMERCE MINISTER. CAN YOU TELL US ABOUT THAT IMPACT ON YOUR BUSINESS AND WHAT THAT NON-CHINA SUPPLY LOOKS LIKE? BRANDON: YEAH, IT HAS NOT IMPACTED OUR BUSINESS. EARLY ON IN THE UNITED STATES, OUR CONGRESS PUT IN A POLICY THAT -- IT’S CALLED NDAA SECTION 848 THAT BASICALLY FORCED AND RIGHTFULLY FORCED A LOT OF COMPANIES TO DIVEST OF CHINESE SUPPLY CHAINS SO SHIELD AI RELIES ON ZERO CHINESE SUPPLY CHAINS FOR OUR PRODUCT TODAY. OUR V-BACK AIRCRAFT IS THE ONLY GROUP THREE UNMANNED AERIAL SYSTEM TO BE DESIGNATED BY THE UNITED STATES AS A BLUE UAS DRONE, MEANING IT IS VOID OF CHINESE COMPONENTS, CHINESE SUPPLY CHAINS AND AS WE LOOK TO BUILD ADDITIONAL PRODUCTS LOOK OUR VERTICAL TAKE OFF FIGHTER JET, WE WILL NOT BE USING CHINESE SUPPLY CHAINS FOR ANY ASPECT OF THAT. AS YOU CAN IMAGINE, THE U.S. AND ALLIES DO NOT WANT THEIR SECURITY, THEIR MILITARY ASSETS RELIANT ON CHINESE SUPPLY CHAINS. HAIDI: THERE’S BEEN A LOT OF CONCERN OVER HOW MUCH WARS ON MULTIPLE FRONTS BUT NAMELY THE DRAGGING ON OF THE U.S.-IRAN WAR HAS CAUSED DEPLETION IN U.S. MILITARY ASSETS. HAS THIS FEATURED INTO ANY CONVERSATIONS AND DISCUSSIONS YOU’VE HAD WITH PARTNERS? BRANDON: YEAH, ALL MILITARIES RIGHTFULLY ARE VERY INTERESTED IN THE MOST RECENT ONGOING CONFLICTS BECAUSE IT INFORMS THEIR DECISION MAKING, BUYING BEHAVIORS, THEIR TACTICS, THEIR STRATEGY. I HA HAVE THE OPPORTUNITY TO TRAVEL TO A VARIETY OF REGIONS ACROSS THE GLOBE. MINISTERS OF DEFENSE ARE ALWAYS ASKING WHAT ARE YOU SEEING HAPPENING IN UKRAINE, IN THE ARABIAN GULF? THE BOTTOM SHRINE WHAT YOU’RE SEEING CONTINUES TO BE A DRIVE TOWARDS MORE AUTONOMOUS WARFARE. ED A VENT OF AI IN DRONES USED AT INCREASING LEVELS OF SCALE TO GREAT EFFECT. THIS WASN’T SOMETHING THAT WAS NEW IN THE IRAN CONFLICT BUT IT’S THE FIRST TIME THE U.S. HAS REALLY HAD TO FOCUS ON IT AT SCALE. CERTAINLY THIS HAS BEEN ONGOING IN THE RUSSIA-UKRAINE CONFLICT AND I THINK THE BEST THINGS THAT COUNTIES DO DO IN THE ASIAN PACIFIC REGION IS TAKE THE LESSONS LEARNED, IMPLEMENT IT INTO THEY CAN MILITARY AND ACQUISITION STRATEGIES. HAIDI: WHAT ARE YOUR FUNDRAISING PLANS GOING FORWARD AND HOW DOES THAT IMPACT PLANS FOR SCALE, PARTICULARLY WHEN IT COMES TO OPPORTUNITIES THAT ARE YET UNSEIZED ACROSS ASIA? BRANDON: THERE ARE A TON OF DIFFERENT GROWTH OPPORTUNITIES IN THE DEFINITION SECTOR SURROUNDING AI DRONES, MILITARY EQUIPMENT. THAT GROWTH OBVIOUSLY EATS CASH. WE WILL CONTINUE TO DRIVE OUR BUSINESS FORWARD AND ONE OF THE WEAPONS THAT WE CAN WRING TO BEAR IS ADDITIONAL CAPITAL AND SO WE ARE -- I’M CONSTANTLY TALKING TO INVESTORS. I WON’T COMMENT ON SPECIFIC FUNDRAISERS BUT LIKE CLOCK WORK, I HAVE HAD TO RAISE CAPITAL EVERY YEAR FOR THE PAST 11 YEARS. WE SEE A TREMENDOUS GROWTH OPPORTUNITIES IN THIS SECTOR WHERE YOU’LL SEE A NEW AGE OF DEFENSE AI, PRIME CONTRACTORS, SHIELD AI VERY MUCH IN THAT MIX. SO WE’LL CONTINUE TO RAISE CAPITAL. HAIDI: THE KOREAN -- MARKET FOR YOU, I BELIEVE AND PERHAPS A LITTLE BIT SURPRISING, YOU HAVE QUITE A SIZABLE FOOTPRINTS HERE IN AUSTRALIA. BRANDON: YEAH, AGAIN, WE STARTED THE CONVERSATION TALKING ABOUT TAIWAN BUT IT’S VERY MUCH IN THE REGION. WE HAVE OUR PRODUCTS, OUR SERVICES IN SINGAPORE, IN JAPAN, IN KOREA AND AUSTRALIA, IN TAIWAN. GROWING PRESENCES IN ALL THOSE COUNTRIES BECAUSE THERE IS AN APPETITE FOR NEW DEFENSE TECHNOLOGIES, PRODUCTS NASHEED AI BRINGS TO BEAR. I’VE BEEN OUT HERE IN CAREERERER FOR THE PAST COUPLE OF DAYS SPEAKING WITH POLICY LEADERS, MILITARY LEADERS, SPEAKING WITH DEFENSE COMPANIES LOOKING TO BUILD AI AUTONOMY. WE ENABLE COMPANIES AND GOVERNMENTS TO BUILD, MAIN TAKEN AND OPERATE AI IN AUTONOMY AND THAT’S BEEN AN INCREASING THING THAT WE’VE SEEN SNOT JUST IN THE ASIA PACIFIC REGION BUT ACROSS THE WORLD AS COUNTRIES AND MILITARIES ARE INCREASINGLY RECOGNIZING THAT AI AND AUTONOMY IS A NATIONAL SECURITY ASSET THAT THEY NEED TO HAVE A SENSE OF RECOVERTY BEHIND IT AND SHIELD AI IS THERE TO HELP THEM ACHIEVE THAT GOAL. HAIDI: IN A SAN FRANCISCO OF A FEW YEARS YOU’VE DAJUAN IN 1% TO OVER 16% INTO THIS COMPONENTS OF THE SUPPLY CHAIN. WHAT DO YOU THINK ABOUT THE GLOBAL DISRUPTIONS AND SOME OF THE TRAILED UNCERTAINTIES WE SEE AS WELL? >> I THINK THERE’S MINIMAL RISK. AT THE END OF THE DAY THE REASON WHY YOU’VE SEEN AN INKRESSE IN OUR SUPPLY BASE IS THAT THERE ARE FANTASTIC FLYERS IN THE REGION. THEY THINK MEET OUR TIME, QUALITIES, COST STANDARDS. SO WE’VE BEEN DELIGHTED TO GROW THE SUPPLY CHAIN IN THIS REGION. WE’RE COG ANY INSTANT OF THE RISKS THAT ARE OUT THERE BUT FROM OUR PERSPECTIVE TODAY VIEW THOSE RISKS AS RELATIVELY SMALL AND I THINK WE’LL CONTINUE TO GROW OUR SUPPLY CHAINS IN TAIWAN, IN THE ERICEN PACIFIC REGION WITH A LOT OF FANTASTIC COMPANY PARTNERS OUT HERE. HAIDI: AND I SHOULD MENTION AT THIS POINT THAT BLOOMBERG BETA, A VENTURE FIRM BACKED BY BLOOMBERG LP WAS ALSO PREVIOUSLY BEEN IT’SOR. MORE AHEAD ON "THE ASIA TRADE." THIS IS BLOOMBERG. AVRIL: APPLE SAYS ITS FOLDABLE SMART PHONE WILL IMPROVE ON LATER MODELS. BLOOMBERG TECH ANCHOR ED LUD LOW WAS AT APPLE PARK FOR THE UNVEILING. >> THE I PHONE DUO, $1,999 WITH APPLE’S A24 PRO CHIP AND FOR JOHN TERNUS, THE NEW CEO SAVED IT FOR A ONE MORE THING MOMENT RIGHTS AT THE END OF THE PRESENTATION. FOLDED A 5.4 INCH SCREEN. OPENED UP, 7.6 INCHES BUT THEY’VE WORKED VERY HARD ON THE DURABILITY. WHEN IT OPENS UP IT’S MUCH MORE LIKE AN I PAD PRODUCT WHEN IT’S AT UNFOLD FULL DISPLAY. IT HAS A REALLY BIG SPACE PRESUME YUM OVER EVEN THE PRO MAX. THEY MIGHT BE LATE WITH IT BUT THEY TOOK THEIR TIME AND HERE THEY ARE. THE PRO MAX, 1,999 FOR THE PRO, AND THE PRO MAX IS HIGHER. HOW MUCH OF THE COST DO THEY EAT WITH HIGH MEMORY PRICES? HOW MUCH DO THEY PASS ON TO THE CONSUMER, JOHN TERNUS, JUST EIGHT DAYS INTO THE C.E.O. ROLE, THIS WAS ALL ABOUT AI AND HE SAID IT REPRESENTS WHAT THEY CALL THE INTELLIGENCE PERSONAL HUB. HIS PITCH IS THAT THE IPHONE HAS THE CAMERAS, THE APPS, THE CONNECTIVITY AND NOW THE COMPUTE TO BECOME THE CENTER OF YOUR PERSONAL AI AND REGARDED AS A PRETTY SUCCESSFUL FIRST FULL KICKOFF FOR JOHN TERNUS. HAIDI: ED LUD LOW WITH THE APPLE DOER. THINGS ARE LOOKING A LITTLE BIT TRICKY. HONG KONG TECH FUTURES DOWN BY OVER 1%. TIE JUAN FUTURES LOOKING LIKE LAGGARDS AS WELL. INCREASING VOLUME OF CONVERSATION ABOUT POSSIBLE EASING COMING FROM BEIJING. THE STORY ABOUT THE WORSENING U.S.-IRAN WAR AND THE CONTINUED DRAG ON OIL PRICES AND INFLATION FRONT AND CENTER. THIS IS BLOOMBERG.