Stocks Rise at Start of CPI Week; Iran's Hormuz Deal Elusive — Bloomberg Brief 08/10/2026

[00:00:00] Speaker ?: IT'S 5:00 AM IN NEW YORK CITY, 10:00 AM IN LONDON. [00:00:12] Speaker 1: LET'S GET YOU SET UP FOR THE DAY. FUTURES GAINING FOR THE MOST PART AFTER A SHARP SLOWDOWN IN THE U.S. LABOR MARKET PUSH STOCKS TO FRESH RECORDS. THANK YOU FOR JOINING US. THANK YOU FOR JOINING US. PRESIDENT TRUMP LEANS ON FINANCIAL PRESSURE AS TEHRAN REJECTS TALKS WITH WASHINGTON. ALL OF THAT AS MARKETS LOOK AHEAD TO THE LATEST INFLATION DATA COMING LATER THIS WEEK. [00:00:51] Speaker 2: LET'S GET A CHECK ON THE MARKETS AROUND THE WORLD. WE ARE SEEING THE JAPANESE CURRENCY WICKENING BY MORE THAN 0.5% TODAY AS IT INCHES CLOSER TO THAT 1.59 LEVEL AGAINST THE DOLLAR. NOW WE DID SEE A BIT OF A STRENGTHENING ON FRIDAY FOLLOWING THOSE SOFTER U.S. JOBS DATA. BUT WE ARE EVEN ALSO SEEING THE BANK OF JAPAN'S SUMMARY OF OPINIONS POINTING TO THE UPSIDE OF INFLATION RISKS AS WELL AS POTENTIALLY EARLIER HIKES. BUT THOSE ARE NOT REALLY HELPFUL BECAUSE INVESTORS ARE BETTING THAT THE YEN WOULD WEAKEN FURTHER GIVEN THAT WIDE GAP BETWEEN THE U.S. AND JAPAN'S RATE DIFFERENTIALS. AND FOR NOW AT LEAST THAT HAWKISH TONE FROM THE BANK OF JAPAN IS BEING REFLECTED IN THE BOND SPACE THE BANK OF JAPAN STOCKS IN THE BANK OF JAPAN STOCKS. AS WE SEE THE BOND YIELDS RISING FURTHER. WE TAKE A LOOK AT THE BROADER ASIA MARKET A BIT MORE TOWARDS THE UPSIDE. AND WE ARE SEEING TECH STOCKS DOING THE LIFTING WHILE KOREAN STOCKS UNDERPERFORMED A BIT TODAY [00:01:58] Speaker 1: AS INVESTORS ROTATING INTO THE SMALL CAP GAGE COSTEC WHICH IS UP ABOUT 6% TODAY. THANK YOU FOR JOINING US. [00:02:12] Speaker 3: NOW LET'S GET OVER TO LONDON FOR A LOOK AT EUROPE WITH JUSTINA LEE. GOOD MORNING BONNIE. IT'S A PRETTY QUIET DAY HERE TODAY WITH THE SOX EUROPE 600 ESSENTIALLY FLAT AND KIND OF HOVERING NEAR RECORD HIGHS. THE STRONGEST SECTOR TODAY THOUGH IS TECH LED BY THE LIFE OF ASML HAVING A GREAT DAY. NOW ONE HEADWIND AHEAD FOR EUROPE IS THAT YOU KNOW WITH IRAN AND OMAN KIND OF BEING NOT REACHING A DEAL FORMUSED THAT DOESN'T JUST AFFECT OIL. IT ALSO AFFECTS THE TRANSPORT OF THOSE NATURAL GAS SUPPLIES THAT EUROPE IS REALLY TRYING TO BUILD UP AHEAD OF THE HEATING SEASON. AND WE CAN SEE HERE THAT EUROPE GAS FUTURES ARE UP 5% TODAY. NOW THAT COULD BE A HEADWIND AT WHAT HAS BEEN A PRETTY GOOD TIME FOR EUROPE LATELY. NOW IF WE FLIP THE BOARD HERE WE CAN SEE THE CITY ECONOMIC SURPRISE INDEX FOR BOTH EUROPE AND THE U.S. AND WE CAN SEE HERE THAT FOR THE U.S. IT'S BEEN ROLLING OVER. BUT FOR EUROPE IT'S BEEN ON THE UP AND UP A SIGN THAT EUROPEAN ECONOMIC DATA ACTUALLY HAVE BEEN SURPRISING A LOT OF ECONOMISTS DESPITE THE GAINS IN OIL AND THAT'S KIND OF PART OF THE REASON WHY STOCKS OVER 600 HAS BEEN REACHING RECORD HIGHS AS WELL. BUT IF WE DO SEE FURTHER DISRUPTIONS IN NATURAL GAS SUPPLIES THAT COULD BE A HEADWIND WITH THE WINTER COMING UP. WE'RE ALL FOR HIGHS. [00:03:24] Speaker 1: 58 EUROS PER MEGAWATT HOUR NOT GOING TO BE VERY HELPFUL TO THE EUROPEAN MARKET THIS WINTER. LET'S TAKE A LOOK AT THE UNITED STATES BECAUSE OBVIOUSLY WE HIT A RECORD IN THE S&P ON FRIDAY EVEN AFTER THE WEAKER THAN EXPECTED JOBS REPORT. THAT SAID J.P. MORGAN IS UPPING ITS PRICE TARGET NOW TO 8,000 FOR YEAR END FOR THE S&P 500 LOOKING AT BETTER EARNINGS PARTICULARLY FROM THE HYPERSCALERS AND SUGGESTING THAT PERHAPS WE'LL SEE A 35% YEAR-OVER-YEAR GROWTH WHEN IT COMES TO EARNINGS PER SHARE FOR THE ENTIRE YEAR. THAT SAID WE ARE BASICALLY AT J.P. MORGAN'S PREVIOUS TARGET WHICH WAS 7800. THE NASDAQ 100 FUTURE IS ALSO POINTING TO NICE GAINS. THAT INDEX WAS UP 1.2% ON FRIDAY. THE OPTIMISM CONTINUES APACE EVEN AFTER THE WEAK PAYROLLS REPORT. WE ARE PRICING IN LESS OF A CHANCE OF A SEPTEMBER RATE HIKE NOW. RUSSELL 2000 FUTURES A LITTLE BIT LOWER AT THE MOMENT. WE DID SEE A LITTLE BIT OF BONDS SELLING. THE TWO-YEAR AT ALMOST 421 NOW. THE 10-YEAR AT 465. AND THAT 30-YEAR REMAINING ELEVATED AT 520. IT BEARS SAYING IN THIS CONTEXT AS WELL THAT OIL IS HIGHER TODAY WITH BRENT ABOVE $84 A BARREL. LET'S GET TO SOME INDIVIDUAL PRE-MARKET MOVERS NOW. [00:04:46] Speaker 4: THANK YOU, BONNIE. WE WILL START WITH BERKSHIRE HATHWAY, WHICH HAS BOUGHT BACK $4.5 BILLION OF ITS OWN SHARES. THIS IS SEEN AS THE COMPANY REALLY PUTTING ITS OWN CASH POWER TO WORK. WE ARE SEEING THAT BEING RECEIVED FAIRLY POSITIVELY BY THE MARKET THIS MORNING. WE ARE UP SLIGHTLY IN PRE-MARKET TRADING. MOVING ON TO TSMC, WHICH HAS REPORTED A BIG JUMP IN MONTHLY SALES, WHICH IS SEEN AS A SIGN OF SUSTAINED AI DEMAND. IT IS PROBABLY QUITE REASSURING AS WELL TO INVESTORS, GIVEN THE VOLATILITY IN THE AI SECTOR THAT WE HAVE SEEN RECENTLY. THE ADL IS UP SLIGHTLY AS WELL THIS MORNING. AND FINALLY, SPACE COMPANIES ARE IN FOCUS AS WELL TODAY BECAUSE WE HAVE ROCKET LAB EARNINGS LATER TODAY AFTER THE CLOSE. AND SO WE ARE UP IN THE GREEN AS WE WAIT FOR THOSE EARNINGS AFTER THE CLOSE TODAY. [00:05:34] Speaker 1: SPACEX AS WELL, AS YOU CAN SEE, UP 2.6%. CHOEY, THANK YOU SO MUCH. CHOEY MELLIE WILL BE BACK LATER IN THE HOUR. ALSO COMING UP THIS HOUR, WE WILL LOOK AT THE BOND MARKET AND THE UPCOMING CPI DATA WITH TERRY WEISEMAN OF MCMORRY. BUT FIRST, OIL ADVANCING AS A FINAL DEAL BETWEEN IRAN AND OMAN TO REOPEN THE STRAIGHT OF HOMUZE STILL HANGS IN THE BALANCE. ALSO RULING OUT DIRECT TALKS WITH WASHINGTON FOR NOW. BLOOMBERG'S ABHIR AMU OMAR JOINS US FROM DUBAI FOR THE LATEST. ABHIR, I THOUGHT WE HAD AN AGREEMENT BETWEEN IRAN AND OMAN. WHY AREN'T WE GETTING THE DETAILS? WHY IS IT NOT FINALIZED? [00:06:08] Speaker 5: REALLY GOOD QUESTION. GOOD MORNING. THE DEAL BETWEEN OMAN AND IRAN WE HAVE REPORTED ON THROUGH THE COURSE OF LAST WEEK IS THAT IT IS IN THE MIDST OF GETTING DISCUSSED. THERE HAVE BEEN SOME DELAYS. THE LATEST, WE KNOW, FROM THE IRANIAN SIDE IS THAT THE DEAL IS IN THE FINAL STAGES OF COMING TO THAT FINAL LINE OF MATERIALIZING. WE'VE REPORTED MULTIPLE TIMES, OF COURSE, ON WHAT IT WILL MEAN FOR THE STRAIGHT OF HOMUZE, THE MECHANISM THAT WILL ALLOW SHIPS TO START MAKING THEIR WAY THROUGH THE STRAIGHT OF HOMUZE. SOME DETAILS THERE ABOUT OUTBOUND SHIPS AND INBOUND SHIPS. BUT THE LATEST WE KNOW FROM IRAN'S FOREIGN MINISTER, ABBAS AHRI AKSHI, IS THAT FOR NOW IRAN IS RULING OUT NEGOTIATIONS OR WIDER TALKS WITH THE UNITED STATES. HE'S ALSO SAID THAT THE REPEATED VIOLATIONS FROM THE UNITED STATES ON THE CEASE-FIRE IN JUNE HINDER ANY PROGRESS IN THE WIDER NEGOTIATIONS. THAT FOR NOW THE ONLY TALKS THAT ARE HAPPENING ARE BETWEEN IRAN AND OMAN ON THAT MECHANISM THAT WOULD, ACCORDING TO THE IRANIAN SIDE, ONLY TEMPORARILY OPEN THE STRAIGHT OF HOMUZE JUST TO GET A TRICKLE OF THIS MUCH-NEEDED MOVEMENT OF THE OIL BARRELS STUCK IN THE WATERWAY. WHAT SHOULD WE READ INTO THE [00:07:20] Speaker 1: FACT THAT IRAN SEEMS TO BE CHANGING UP ITS SECURITY TEAM, ABIR? [00:07:24] Speaker 5: YEAH, SO THAT'S A REALLY -- THAT'S ANOTHER THING THAT'S HAPPENED OVER THE WEEKEND, VONNIE, RIGHT? THE RESHUFFLING, IF YOU WERE, IN THE ECHELONS OF POWER IN IRAN. WHAT WE KNOW, FOR EXAMPLE, IS THAT MOHAMMAD BAGIR, WHO IS A HARDLINER IN THE IRGC, WAS APPOINTED AS THE POLITICAL ADVISOR OF THE SUPREME LEADER, MUSHTABA KHAMINI. NOW, HE HAS COME UP OVER THE WEEKEND AS THIS KEY FIGURE WHO'S MENTIONED SOME CONCESSIONS FOR IRAN TO RE-OPEN THE STRAIT OF REMOVES. THAT INCLUDES FOR THE U.S. TO REMOVE ITS NAVAL BLOCKADE, FOR A PERMANENT END TO THE WAR, FOR UNBLOCKING OF THOSE FROZEN ASSETS, REMOVAL OF THE OIL SANCTIONS. THAT WAS NOT THE FORMAL LINE UP UNTIL ABOUT AN HOUR AGO WHEN THE FOREIGN MINISTRY CAME UP WITH A STATEMENT SAYING THAT THE UNITED STATES MUST END THE WAR PERMANENTLY AGAINST IRAN. AND SOME COMPENSATION FOR THE VIOLATIONS THAT HAVE OCCURRED NEEDS TO BE PAID TO IRAN FOR THE RE-OPENING OF THE STRAIT OF HAMUZ. WE'RE SEEING A LOT OF CONFLICTING STATEMENTS EVEN IN THE MINOR NEGOTIATIONS THAT ARE HAPPENING BETWEEN OMAN AND IRAN. AND WHAT EXACTLY IT WOULD TAKE FOR THE RE-OPENING OF THE STRAIT OF HAMUZ. NOW TO ANSWER YOUR QUESTION IN A NUTSHELL, THAT APPOINTMENT OR THOSE RESHUFFLING THAT WE'VE SEEN OVER THE WEEKEND, WE DON'T EXACTLY KNOW WHAT IT WOULD MEAN FOR THE STATE OF DIPLOMACY BETWEEN THE UNITED STATES AND IRAN. NOW THAT IS ALREADY NOT IN A GOOD ENOUGH PLACE BECAUSE WE DON'T HAVE ANY FORMAL DISCUSSIONS TAKING PLACE. BUT IT DOES LOOK LIKE IT MIGHT PAVE THE WAY FOR A MORE HARD-LINE APPROACH IF YOU WERE IN IRAN, WHICH COULD BE A DANGEROUS OR COULD LEAD TO A DANGEROUS AND EVEN MORE DANGEROUS RHETORIC IN THE WIDER NEGOTIATIONS THAT ARE, FOR THE TIME BEING, NOT TAKING PLACE. [00:09:05] Speaker 1: YEAH, AS THE PRESIDENT SAID, THE U.S. IS ONLY SEMI-NEGOTIATING WITH TEHRAN AT THE MOMENT. ABHIR ABU OMAR IN DUBAI, THANK YOU SO MUCH. STAYING IN THE MIDDLE EAST, ISRAELI PRIME MINISTER BENYAMIN NETANYAHU REJECTING A PROPOSAL FOR DISARMING HAMAS. NETANYAHU RESPONDING TO A ROADMAP PUBLISHED BY THE BOARD OF PEACE BACKED BY PRESIDENT TRUMP. [00:09:27] Speaker 6: ISRAEL REJECTS THE 15-POINT PLAN. THE IDF WILL NOT CARRY OUT ANY WITHDRAWAL UNTIL HAMAS IS [00:09:33] Speaker ?: DISARMED. [00:09:33] Speaker 6: AND WHEN I SAY DISARMING HAMAS, IT MEANS THE HEAVY WEAPONS, THE LESS HEAVY WEAPONS AND THE LIGHT WEAPONS. ALL OF THE WEAPONS. AND WE ARE TALKING ABOUT REAL DISARMAMENT, NOT A FICTITIOUS DISARMAMENT. [00:09:46] Speaker 1: BLOOMBERG'S DAN WILLIAMS JOINS US NOW FROM TELAVIV. SO WHAT EXACTLY IS ISRAEL RESPONDING TO IN THE BOARD OF PEACE'S PLAN, DAN? [00:09:56] Speaker 7: IT'S RESPONDING TO SOME DEGREE OF AMBIGUITY AROUND THE SEQUENCING, THE SCALE OF WHAT WOULD APPEAR TO BE A PROPOSAL FOR A QUID PRO QUO SET OF ISRAELI TROOP WITHDRAWALS IN THE GAZA STRIP IN RESPONSE TO HAMAS DISARMAMENT. THIS ROADMAP WAS INTRODUCED ABOUT A WEEK AND A HALF AGO. HAMAS CAME BACK WITH A HEDGED CONSENT. IT SAID, HOWEVER, IT WOULD ONLY GIVE UP HEAVY WEAPONS. IT ALSO TRIED TO FRONT LOAD ONTO THAT CONSENT ISSUES OF ISRAELI WITHDRAWALS, SWEEPING ISRAELI WITHDRAWALS FROM THE GAZA STRIP AND THE FOUNDATION OF A PALESTINIAN STATE, SOMETHING THAT IS WELL OVER THE HORIZON WHEN YOU ASK MOST DIPLOMATS IN THIS PART OF THE WORLD. WHAT THE ISRAELI PRIME MINISTER HAS DONE IS EFFECTIVELY HARDEN THE PREVIOUS MISGIVINGS THAT HE VOICED INTO WHAT SOUNDS LIKE AN OUTRIGHT REJECTION. IT SOUNDS DRAMATIC. HOWEVER, IT'S ACTUALLY OF FAIRLY LITTLE CONSEQUENCE GIVEN THAT IN THE SAME BREATH THE ISRAELIES POINT OUT THAT THEY ARE NOT ACTUALLY PART OF THIS ROAD MAP. IT IS A BRIDGING PROPOSAL MEANT TO BRING HAMAS TO DISARM AS PART OF THE TRUMP PROPOSAL FOR PEACE IN THE GAZA STRIP, A MOVEMENT FROM THE CEASEFIRE OF LAST OCTOBER TO PEACEMAKING AND STABILITY AND RECONSTRUCTION AND RECONCILIATION WITH ISRAEL. THAT VISION ALSO REQUIRES HAMAS EFFECTIVELY TO STEP AWAY FROM GOVERNMENT AND TO GIVE UP ITS ARSENAL. WHAT THE ISRAELIES ARE DOING IS TELLING HAMAS IT WON'T BE ALLOWED TO DO THINGS BY HALF MEASURE. IT'S TELLING THE BOARD OF PEACE THAT AS WELL. HOWEVER, NO ONE WAS EXPECTING ANY SERIOUS MOVEMENT ON THE PLAN BEFORE NOVEMBER WHEN THE FIRST NEW SO-CALLED HUMANITARIAN PILOT IS DUE TO OPEN IN THE GAZA STRIP TO HOUSE PALESTINIANS OR REHOUSE PALESTINIANS WHO HAVE BEEN IN TENSE CITIES UNDER HAMAS RULE. THAT WOULD BE ONCE THEY ARE PRESUMABLY FREED OF HAMAS RULE ONE WAY OR THE OTHER. NOVEMBER IS A MONTH AFTER THE ISRAELI ELECTION IN OCTOBER. IT APPEARS NETANYAU HAS HIS EYE ON THAT AND ON KEEPING HIS RIGHT-WING PARTNERS ON SIDE GIVEN THAT THE IDEA OF AN ISRAELI TROOP WITHDRAWAL REALLY IS ANATHEMER TO THAT POLITICAL CAMP IN ISRAEL CERTAINLY AS THIS ELECTION RACE HEATS UP. [00:12:01] Speaker 1: YOU WONDER HOW THE ASKS HAVE CHANGED POST-WAR. HAMAS ALWAYS WANTED ISRAEL WITHDRAWAL AND ISRAEL ALWAYS WANTED HAMAS DISARMAMENT. DAN, THANK YOU SO MUCH. BLOOMBERG'S DAN WILLIAMS IN TELAVIV. HATHWAY SPENT ABOUT $4.5 BILLION TO BUY BACK ITS OWN SHARES IN THE SECOND QUARTER, ALSO PURCHASING ALMOST $20 BILLION OF EQUITIES. THE MOVES SIGNAL CEO, GREG ABEL, IS PUTTING MORE OF BERKSHARE'S CASH PILE TO WORK. THE FIRM'S CASH HOARD FALLING FROM $397 BILLION TO $365.5 BILLION IN THE SECOND QUARTER. TAYLOR FARMS IS PULLING MORE THAN A DOZEN PREPARED FOOD ITEMS CONTAINING JALAPENOS FROM RETAILERS OVER SALMONELLA CONCERNS. THE COMPANY SAYS IT IS NO LONGER SOURCING JALAPENOS FROM THE SALINAS THE COMPANY FLAGGED AS A POTENTIAL SOURCE OF A SALMONELLA OUTBREAK. THE MOVES JUST WEEKS AFTER FEDERAL HEALTH OFFICIALS TIED TAILOR FARMS TO A CYCLOSPORA OUTBREAK. THE COMMANDER OF AN AIR INDIA FLIGHT THAT HIT SEVERE TURBULENCE LAST WEEK IS SET TO UNDERGO A SECOND ROUND OF DRUG SCREENING. INDIA'S GOVERNMENT IS LOOKING TO CONFIRM WHETHER HE WAS UNDER THE INFLUENCE OF A PSYCHOACTIVE SUBSTANCE. THE INCIDENT LEFT SEVERAL PASSENGERS AND CABIN CREW MEMBERS INJURED. IT'S GOING TO BE A LITTLE BIT OF JOB. A DEMAND ALIVE AND WELL. [00:13:25] Speaker ?: TSMC SALES UP 45% IN JULY. MORE ON THAT NEXT. THIS IS BLOOMBERG. [00:13:35] Speaker 1: THIS IS BLOOMBERG BEEF. I'M VONNIE QUINN IN NEW YORK. THE BEST BUYER FOR NVIDIA AND APPLE REACHED $14.5 BILLION IN REVENUE IN JULY. IN A SIGN, DEMAND FOR AI HARDWARE REMAINS STRONG. JOINING US NOW IS MATT BLOXAM OF BLOOMBERG INTELLIGENCE. HOW ON EARTH, MATT? ARE THESE NEW CUSTOMERS OR OLDER CUSTOMERS JUST BUYING MORE? WHAT'S GOING ON? [00:14:00] Speaker 8: I THINK THIS IS PRIMARILY EXISTING CUSTOMERS CONTINUING TO PUT IN BIG ORDERS TO THE COMPANY. 45% OF YOUR GROWTH FEELS LIKE A BIG NUMBER. IT'S ACTUALLY A SLOW DOWN FROM THE 68% OR SO GROWTH THEY SAW IN JUNE. BUT IT IS SIGNIFICANTLY AHEAD OF THE YEAR-TO-DATE TOTAL, WHICH IS AROUND THE 35%, 36% YEAR-ON-YEAR. MOMENTUM IS REALLY STRONG. I DON'T THINK THIS IS A BIG SURPRISE TO THE MARKET BECAUSE IT'S ONLY A FEW WEEKS BACK THAT THEY RAISED FULL-YEAR GUIDANCE ON A DOLLAR BASIS TO MORE THAN 40% GROWTH. THE PREVIOUS GUIDANCE WAS ABOUT 30% GROWTH. AND THEY RAISED THEIR CAPITAL SPENDING PLANS TO KIND OF MATCH THE DEMAND THEY ARE SEEING. SO I THINK THIS STRONG PRINT IS CONSISTENT WITH WHAT WE HAVE HEARD FROM THE COMPANY RECENTLY AND REFLECTIVE THAT NEAR-TERM DEMAND FOR AI COMPUTE AND ALL THE CHIPS THAT GO INTO THAT IS INCREDIBLY STRONG. [00:14:57] Speaker 1: THOSE CAPEX PLANS ARE NOW LOOKING AT $60 TO $64 BILLION THIS YEAR. IS THAT IN ARIZONA, IN TAIWAN? WHERE ARE THE DETAILS FOR US? [00:15:10] Speaker 8: I DON'T THINK THEY KIND OF GAVE SO MUCH AWAY WHEN THEY GAVE THAT GUIDANCE, BUT I THINK IT IS OF COURSE THEIR FULL CAPABILITY. THEY ARE INVESTING SUBSTANTIALLY IN TAIWAN, BUT THEY ARE ALSO INVESTING HEAVILY IN THE U.S. TO KIND OF MATCH THAT MADE IN AMERICA TAG THAT THE ADMINISTRATION IS GOING FOR. SO I THINK THAT INCREMENTAL SPEND IS COMING ACROSS A NUMBER OF REGIONS. [00:15:33] Speaker 1: MATH, CXMT, THE CHINESE CHIPMAKER THAT ROSE 500% AFTER ITS IPO, APPLE LOOKING TO USE IT NOW IN CHINA, IS THAT A MAJOR CUSTOMER FOR CXMT OR HAD APPLE ALREADY BEEN A CUSTOMER? [00:15:47] Speaker 8: SO I THINK POTENTIALLY APPLE COULD BE A MAJOR CUSTOMER FOR THEM. IT IS INTERESTING THAT APPLE IS LOOKING TO SOURCE LOCAL SUPPLY FOR CHIPS FOR ITS MAJOR PRODUCTS. I THINK THAT IS PARTLY REFLECTION OF THE CONSTRAINS ON GLOBAL SUPPLY FOR THE TECHNOLOGY THEY NEED. PARTLY ALSO THAT PERHAPS GEOPOLITICAL SENSITIVITY IS MEAN THEY MIGHT NEED TO SOURCE SOME COMPONENTS LOCALLY. BUT SUPPLY IS CONSTRAINED. SO I THINK THEIR ABILITY TO TAP INTO THIS COMPANY AS A NEAR-TERM SUPPLIER COULD BE LIMITED BECAUSE THAT COMPANY IS PRIORITIZING LOCAL CHINESE MANUFACTURERS. SO I THINK THIS IS PERHAPS MORE OF A LONG-TERM PLAY FOR APPLE RECOGNIZING THAT THEY NEED TO CONTINUE TO DIVERSIFY THEIR SUPPLY OF KEY COMPONENTS ACROSS THE GLOBE TO MAKE SURE THEY CAN MEET DEMAND WHEREVER IT IS. [00:16:36] Speaker 1: ALL RIGHT. MATT LOXOM OF BLOOMBERG INTELLIGENCE, THANK YOU SO MUCH. STAYING WITH CHINA, BEIJING HAS BEEN RAMPING UP EFFORTS TO CHALLENGE U.S. DOMINANCE IN A.I. BY MARSHALLING THE POWER OF ITS $28 TRILLION STOCK AND BOND MARKET. CXMT IS RISING 500 PERCENT IN THE FEW HOURS AFTER ITS I.P.O. WHAT IS THE SIGNIFICANCE OF CHINA BEGINNING TO USE THE HEFT OF ITS CAPITAL MARKETS AS A POLICY TOOL? [00:17:05] Speaker 9: ABSOLUTELY. IT IS QUITE AN EXTRAORDINARY STORY, OF COURSE. CXMT DISPLACING THE INDUSTRIAL COMMERCIAL BANK OF CHINA AS THE MAINLAND'S MOST VALUABLE SHARE WHEN IT LISTED. AND OF COURSE THAT WE KNOW GOING INTO THAT LISTING THERE WAS THIS TEG SELL-OFF THAT WAS SORT OF THREATENING TO RUIN THE MOMENTUM. AND THAT'S WHEN BEIJING INTERVENED WITH ONE OF ITS BROADEST RESCUE EFFORTS IN YEARS. AND NOW WE KNOW THAT FROM PEOPLE FAMILIAR REPORTING THAT CXMT'S DEBUT WAS ACTUALLY A FACTOR IN THAT DECISION TO INTERVENE. SO THIS COMBINED WITH SORT OF THESE EFFORTS TO FAST TRACK IPOs, TO ENCOURAGE BANKS TO BACK THESE SCIENCE AND TECHNOLOGY BONDS, IT REALLY SHOWS BEIJING'S SHIFTING STRATEGY ON HOW TO FINANCE ITS TECH PUSH AND ITS AI PUSH IN PARTICULAR. AND SO BY LEVERAGING, YOU KNOW, THOSE HOUSEHOLD SAVINGS AT 26, YOU KNOW, AT 26 TRILLION DOLLARS AT THIS POINT, YOU KNOW, IT'S THE WORLD'S LARGEST POOL OF HOUSEHOLD SAVINGS. YOU KNOW, BEIJING IS REALLY LOOKING TO CLOSE THAT GAP BETWEEN U.S. YOU KNOW, TECH LISTINGS, IT'S REALLY DORF KIND OF WHAT CHINA HAS HAD IN THE PAST YEARS AND, YOU KNOW, REALLY TRY TO PUSH FORWARD IN [00:18:24] Speaker 1: THIS AI TECH RACE. YEAH, A DATA POINT THAT REALLY STRUCK ME WAS THAT CHINESE TECH FIRMS HAVE RAISED $217 BILLION THROUGH IPOs. FOR EVERY DOLLAR THEY SECURED, U.S. PEERS RAISED MORE THAN SIX. BUT THAT'S NOT THAT WIDE OF A GAP GIVEN WHERE WE'RE COMING FROM. CAN I ASK YOU ABOUT THE ECONOMY, THOUGH, BECAUSE WE ARE STARTING TO SEE A LITTLE BIT OF DISINFLATION COMING BACK INTO THE [00:18:48] Speaker 9: CHINESE ECONOMY. HOW CONCERNED WILL POLICYMAKERS BE? YOU KNOW, WE DID HAVE THOSE CPI, PPI FIGURES. OF COURSE, WE'VE SEEN THIS IN JUNE A LITTLE BIT, BUT NOW IT'S BECOME VERY OBVIOUS, YOU KNOW, AS THE OIL SHOCK SORT OF FADES, YOU KNOW, CHINA'S DEFLATION IS COMING BACK INTO THE PICTURE. SO FOR PRODUCER PRICES IN PARTICULAR, THIS WAS THE FIRST TIME SINCE MARCH THAT WE'VE SEEN A SLOW DOWN. YOU KNOW, BOTH ARE STILL IN EXPANSION TERRITORY, BUT THEY ARE SLOWING, AND THEY DID SLOW MUCH MORE THAN EXPECTED IN JULY. SO, YOU KNOW, ANALYSTS ARE SAYING, YOU KNOW, THE DEFLATION PRESSURES ARE COMING BACK, AND ESPECIALLY SORT OF, YOU KNOW, AS THE OIL SHOCK FADES IN THIS POST-OIL SHOCK ERA, HAVING HEALTHY INFLATION IS STILL, YOU KNOW, A LONG WAYS OFF. SO, YOU KNOW, WE ARE -- WE DID HAVE THAT POLYBERO MEETING LAST MONTH, AND, YOU KNOW, THEY DID -- POLICYMAKERS DID SORT OF OPEN THE DOOR FOR STIMULUS, ALTHOUGH THEY DIDN'T ACTUALLY INTRODUCE ANY MEASURES, SO WE ARE LOOKING FOR THAT IN THE SECOND HALF OF THE YEAR. [00:19:51] Speaker 1: LUCILE, THANK YOU SO MUCH FOR THAT UPDATE. THAT IS BLOOMBERG'S LUCILE LIEU IN BEIJING. COMING UP, A LOOK AT WHAT'S MAKING HEADLINES IN YOUR FRONT PAGE NEWS, NEXT. THIS IS BLOOMBERG. THIS IS BLOOMBERG BRIEFS. I'M RONNIE QUINN IN NEW YORK. IT'S TIME NOW FOR YOUR FRONT PAGE NEWS. FIRST UP, THE WASHINGTON POST REPORTING THE PENTAGON IS PRESSING DEFENSE FIRMS TO RAPIDLY ESCALATE THE PRODUCTION AND DELIVERY OF WEAPONS AS THE WAR WITH IRAN DEPLEATES STOCKS. DEPUTY DEFENSE SECRETARY STEVE FEINBERG HAS GIVEN INDUSTRY LEADERS NO MORE THAN 21 DAYS TO SUBMIT PLANS TO DRIVE FASTER DELIVERY SCHEDULES. NEXT UP, THE NEW YORK TIMES REPORTING ON PRESIDENT TRUMP'S APPOINTMENT OF WILL SHARF AS WHITE HOUSE COUNCIL. SHARF, ACCORDING TO THE TIMES, A DEEPLY CONSERVATIVE LAWYER, CURRENT STAFF SECRETARY, THE TIMES SAYS SHARF HAS EMBRACED MOST EXTREME ELEMENTS OF TRUMP'S AGENDA BUT HAS THROWN UP FLAIRS OVER MATTERS HE BELIEVES COULD IMPERIL THE PRESIDENCY. HAPPENING. FINALLY, THE FINANCIAL TIMES, LEADING WITH CHINA'S SHIPPING GROUP, SEA LEGEND, STARTING A WEEKLY SERVICE THROUGH THE ARCTIC AS AN ALTERNATIVE TO THE WORLD'S TRADITIONAL SHIPPING ROUTE. LAST YEAR, HAPPENING IN THE LAST YEAR. THE USUAL 40-DAY SAILING TIME BETWEEN CHINA AND EUROPE AS MELTING POLAR ICE SHORTENS THE JOURNEY. THAT IS YOUR FRONT PAGE NEWS COMING UP. [00:21:23] Speaker ?: WE ARE GOING TO SPEAK WITH TERRY WEISMAN ABOUT FRIDAY'S [00:21:26] Speaker 1: NON-FARM PAYROLLS REPORT AND THE FED'S JOURNEY. IT IS 5:30 AM IN NEW YORK CITY, 10:30 AM IN LONDON. GOOD MORNING, I'M VONNIE QUINN WITH YOUR BLOOMBERG BRIEF. LAST YEAR, ELECTRON IN THE U.S. LABOR MARKET PUSHED STOCKS TO A RECORD. OIL HIGHER AS UNCERTAINTIES LINGER AROUND THE IRAN OMAN SHIPPING DEAL. PRESIDENT TRUMP LEANS ON FINANCIAL PRESSURE AS TEHRAN REJECTS TALKS WITH WASHINGTON. ALL OF THAT AS MARKETS LOOK AHEAD TO THE LATEST INFLATION DATA COMING LATER THIS WEEK. LET'S TAKE A LOOK AT THOSE MARKETS AND BEAR IN MIND OIL IS HIGHER WITH BRENT ABOVE $84 A BARREL NOW. SO YOU HAVE S&P FUTURES CONTINUING TO CLIMB. WE'RE BASICALLY AT J.P. MORGAN'S OLD TARGET AND THAT'S INTERESTING BECAUSE THEY JUST RAISED THEIR S&P YEAR-END TARGET TO 8,000 NOW ON A STRONG EARNINGS SEASON. THANKS FOR JOINING US TODAY. ASDAQ 100 WAS UP ONE AND A QUARTER PERCENT ON FRIDAY, UP ANOTHER HALF A PERCENT IN TERMS OF FUTURES TODAY. RUSSELL 2000 MAY BE THE LAGGERD TODAY. LET'S TAKE A LOOK AT YIELDS BECAUSE WE'RE REPRICING A POTENTIAL HIKE IN SEPTEMBER BUT WE'RE STILL AT A 45% CHANCE. THAT TWO-YEAR YIELD ALMOST AT 421, THE 10-YEAR YIELD HOLDING ON TO 465 EVEN AFTER WE HAD A BIT OF A SELL-OFF ON FRIDAY. AND THE 30-YEAR YIELD VERY CLOSE NOW TO 521, CREEPING EVER HIGHER. LET'S GET OVER TO LONDON AND CHLOE MELLIE. [00:22:54] Speaker 4: CHLOE MELLIE: GOOD MORNING, BONNIE. BERKSHIRE HAS SPENT ABOUT $4.5 BILLION TO BUY BACK ITS OWN SHARES. AND THIS IS THE COMPANY ESSENTIALLY PUTTING ITS HUGE CASH POWELL TO WORK. SOME ANALYSTS ARE ALSO SAYING THIS IS A WAY FOR THE CEO TO REALLY TAKE THE HELM AND ASSERT HIMSELF. AND SO WE ARE SEEING THIS BEING REACTED TO QUITE POSITIVELY BY THE MARKET. WE'RE UP ABOUT HALF A PERCENT THIS MORNING FOR BERKSHIRE IN PRE-MARKET TRADING. WE ARE ALSO MOVING HIGHER FOR TSMC. THE ADRs ARE IN THE GREEN THIS MORNING. AFTER THE COMPANY REPORTED A BIG JUMP IN MONTHLY SALES. OF COURSE, THIS IS SEEN AS QUITE REASSURING FOR INVESTORS IN THE AI TRADE, GIVEN ALL OF THE VOLATILITY AND THE INVESTOR FEARS AROUND AI OVERSPENDING THAT WE'VE SEEN IN THAT SECTOR LATELY. SO WE'RE UP ABOUT 0.3 PERCENT THERE. AND FINALLY, SPACE COMPANIES ARE ALSO IN FOCUS TODAY AND MOVING QUITE A LOT HIGHER. BOTH SPACEX AND ROCKETLAB ARE DEFINITELY IN THE GREEN THIS MORNING AHEAD OF THOSE EARNINGS FROM ROCKETLAB LATER TODAY AFTER THE CLOSE. BOTH OF THOSE COMPANIES, THE SECTOR IN GENERAL, IS REALLY BENEFITING FROM THOSE RISING INVESTMENTS IN SPACE PROGRAMS AND SPACE DEFENSE AS WELL. SO WE HAVE QUITE A LOT OF ENTHUSIASM AROUND THE INDUSTRY TODAY. [00:24:02] Speaker 1: BACK UP TO 1:37 AND CHANGE ON SPACEX. CHLOE, THANK YOU SO MUCH. CHLOE MELLIE THERE. FED GOVERNOR LISA COOK HAS WARNED ON INFLATION JUST IN THE LAST WEEK AS WE AWAKE THE LATEST PRINT ON WEDNESDAY. SHE SAID, QUOTE, WITH FIVE YEARS OF ABOVE TARGET INFLATION, THE RISK GROWS THAT HIGHER INFLATION MAY BECOME ENTRENCHED IN PRICE AND WAGE-SETTING BEHAVIOR, LEADING PERSISTENCE THAT WOULD BE MUCH HARDER FOR US TO ATTACK. WE BELIEVE THAT THE MEDIA AND FOMC VOTERS WILL DRAG KEVIN WARSCH TO ACCEPT A RATE HIKE LIKELY IN OCTOBER. I'M PLEASED TO SAY TERRY JOINS US NOW AT THE DESK. HE'S GOAL F-X AND RATE STRATEGIST AT MACQUARIE. THAT WAS BEFORE THE NONFARM PAYROLLS REPORT, TERRY. DID THE WEAKNESS IN THE LABOR MARKET CAUSE ANY CHANGE TO THAT [00:24:46] Speaker 10: OUTLOOK? LET'S START BY THE PREMISE OF YOUR QUESTION, WHICH IS THAT THE EMPLOYMENT REPORT WAS WEAK. IT WAS WEAK IN THE SENSE THAT NONFARM PAYROLLS WERE NEGATIVE. IT WAS NOT WEAK CERTAINLY IN THE UNEMPLOYMENT RATE. WE WENT FROM 4.2 PERCENT TO 4.1 PERCENT. IT'S IMPORTANT TO KEEP IN MIND THAT THAT 4.1 PERCENT IS BELOW WHERE THE FEDERAL RESERVE ITSELF IN ITS SUMMARY OF ECONIC PROJECTIONS BELIEVED THAT THE UNEMPLOYMENT WOULD BE AT THIS TIME OF THE YEAR. THEY THOUGHT IT WAS CLOSER TO 4.3 PERCENT. SO IN THAT RESPECT, THE LABOR MARKET MAY ACTUALLY BE TIGHTER RIGHT NOW THAN THE FED ANTICIPATED A FEW MONTHS AGO. ONE THING THAT'S IMPORTANT TO KEEP IN MIND IS ONE OF THE REASONS WHY NONFARM PAYROLLS WAS WEAK AND IN FACT IT WAS WEAK AND IT WAS A NEGATIVE NUMBER ABOUT NEGATIVE 23,000 IS IN PART BECAUSE WE HAVE LOWER LABOR PARTICIPATION, LABOR FORCE PARTICIPATION IN THE U.S. THAT WAS EVIDENT IN THE HOUSEHOLD SURVEY. IT'S BEEN FALLING AND THEREFORE PEOPLE ARE LEAVING THE LABOR MARKET AND OF COURSE THAT'S GOING TO PUT DOWNWARD PRESSURE ON THE NONFARM PAYROLLS. SO WILL THE ADMINISTRATION'S IMMIGRATION POLICIES I'M MORE INCLIENT TO JUST LOOK AND SEE WHAT THE UNEMPLOYMENT RATE IS DOING. IN EFFECT THE FED HAS TO BE LOOKING AT UNEMPLOYMENT. THAT'S PART OF THEIR DUAL MANDATE NOT EMPLOYMENT GROWTH. SO FROM THAT PERSPECTIVE IT WASN'T A VERY DOVISH REPORT. [00:26:04] Speaker 1: SO GREAT POINTS. THE ONLY THING IS IT'S NOT JUST THE UNEMPLOYMENT RATE. YOU HAVE TO LOOK AT THE DECLINING WAGE GROWTH. YOU HAVE TO LOOK AT THE SUPPLY. SO IF THE SUPPLY ISN'T THERE THEN MAYBE IT'S A DIFFERENT NUMBER THAT WE NEED IN ORDER TO KEEP THE U.S. ECONOMY TICKING ALONG IN TERMS OF THE LABOR MARKET. DO WE EVEN KNOW WHAT A WEAKER LABOR MARKET LOOKS LIKE? [00:26:26] Speaker 10: IT'S VERY TOUGH TO SAY WHAT A WEAK LABOR MARKET LOOKS LIKE. BUT THAT'S EXACTLY WHY THE FED AND ECONOMISTS DON'T NECESSARILY LOOK AT THE QUANTITY OF LABOR. THE THINGS THAT WE MEASURE THROUGH THE ESTABLISHMENT SURVEY, HOW MANY JOBS WERE CREATED. IT'S ALWAYS IMPORTANT TO LOOK BACK TO PRICES BECAUSE THOSE ARE THE BEST SIGNAL OF COURSE OF HOW TIGHT SOMETHING IS. IT'S STANDARD ECONOMICS. IF SOMETHING IS TIGHT, OF COURSE, THE PRICE WILL GO UP. IF IT'S LOOSE, THE MARKET IS LOOSE, THE PRICE WILL GO DOWN. THAT'S ANOTHER SIGNAL THAT THE FEDERAL RESERVE SHOULD BE USING. IF IT DOES, I THINK IT'S INCLINED TO STILL HIKE. WILL IT BE SEPTEMBER? I DON'T THINK SO. I SAID BEFORE THE REPORT THAT IT WAS LIKELY TO BE OCTOBER. BUT THAT WAS BECAUSE WE HAD TO WAIT UNTIL THE OCTOBER MEETING TO SEE THE REVISIONS IN THE PERSONAL CONSUMPTION EXPENDITURE PRICE INDEX. THOSE ARE GOING TO BE REVISED 12 MONTHS WITH A 12-MONTH LOOK BACK. NOW WITH THIS OSTENSIBLY WEAK EMPLOYMENT REPORT, IS IT POSSIBLE THAT WE WILL NOT GET A MAJORITY ON THE FOMC TO HIKE IN OCTOBER EITHER? YES, THAT'S POSSIBLE. DECEMBER DOESN'T LOOK LIKE THE WRONG TIME TO DO IT, OF COURSE, EITHER, BECAUSE WE HAVE A NEW SUMMARY OF ECONOMIC PROJECTIONS AND THE FED LIKES TO MAKE BOLD MOVES OR CHANGE OF DIRECTIONAL POLICY, CONCORDANT WITH THE RELEASE OF THE DOTS AND THE SEP. SO, DECEMBER IS CERTAINLY A POSSIBILITY. NOT THAT THE MIDTERMS HAVE [00:27:47] Speaker 1: ANYTHING TO DO WITH IT, BUT, OF COURSE, THEY WOULD BE OUT OF THE WAY, WHICH ALSO WOULDN'T HURT AT THE MARGIN, RIGHT? SO, TERRY, IF THAT'S INDEED THE CASE, YOU'RE ASSUMING THAT A HIKE IS THE NEXT STEP, THAT WE WILL NEED TO GET INFLATION UNDER CONTROL. WHAT IF THE CPI DATA COMES IN A LITTLE BENIGN? LOOK, IT'S ALTOGETHER POSSIBLE [00:28:02] Speaker 10: THAT THE CPI NUMBER COMES IN BENIGN, BUT EVEN IF IT COMES IN A LITTLE BIT BENIGN, IF YOU LOOK AT THE, LET'S SAY, THE FOUR IMPORTANT MEASURES THAT THE MARKET LOOKS AT, WHICH IS CORE CPI, HEADLINE CPI, CORE PCE PRICE INDEX AND HEADLINE PCE PRICE INDEX, THREE OF THEM ARE ABOVE 3% ON A YEAR-OVER-YEAR BASIS. SO, IT WOULD HAVE TO BE A DRAMATIC REDUCTION IN YEAR-OVER-YEAR INFLATION FOR THIS TO REALLY CHANGE THE ZEITGEIST AT THE FED, WHICH HAS BEEN VERY WELL ARTICULATED BY SOME OF THE CENTERS. THEY DON'T POINT TO JUST INFLATION BEING HIGH RECENTLY. THEY POINT TO INFLATION BEING HIGH FOR THE LAST FEW YEARS AS THE NARRATIVE THAT'S COMPELLING THEM TO HIKE. [00:28:44] Speaker 1: IT HAS BEEN A LONG TIME, AND IT DOES FEEL LIKE THE VOICES ARE GETTING MORE VACIFOROUS AS WE'RE GETTING LESS FORWARD GUIDANCE. THE IDEA THAT LONG-END RATES HAVE BEEN CREEPING HIGHER, AND THAT'S A CONCERN. WHY ARE PEOPLE SURPRISED? THE MARKET WAS A LITTLE BIT SURPRISED BECAUSE IT'S REPRICING, BUT MANY OF THE TOP HENCHFUND MANAGERS HAVE BEEN WAITING FOR LONG-END YIELDS TO RISE BECAUSE OF THE FISCAL SITUATION. [00:29:04] Speaker 10: THAT'S RIGHT. THE FISCAL SITUATION IS PART OF THIS. THE FACT THAT THE U.S. CAN'T SEEM TO GET -- IN MANY COUNTRIES, IN FACT, I SHOULDN'T SINGLE OUT THE U.S. HERE, CANNOT GET THEIR DEBT UNDER CONTROL, AND THAT THEY ARE LOOKING TOWARDS SEVERAL MORE YEARS OF HEAVY BOND ISSUANCE SHOULD BE SOMETHING THAT SHOULD DEPRESS THE PRICE NOW. YOU CERTAINLY WOULD NOT BUY SOMETHING TODAY IF YOU BELIEVE THAT THE SUPPLY IS GOING TO BE LARGE IN THE COMING FEW YEARS. SO I DO BELIEVE THAT AT LEAST PERCEPTIONS ABOUT THE DEFICIT PLAY A ROLE, BUT SO DO PERCEPTIONS ABOUT GROWTH. I MEAN, ONE CAN MAKE A CASE THAT IF GROWTH IS GOING TO BE HIGH AND PRODUCTIVITY IS GOING TO BE HIGH, REAL RATES OF INTEREST SHOULD BE HIGH TO ENABLE CONSUMERS TO SAVE MORE, NOT SPEND TODAY. AND ALSO, WE HAVE A SITUATION WHERE ALTHOUGH IN THE SURVEY, NOT ALL THE SURVEYS ARE POINT TO HIGH LONG-TERM INFLATION EXPECTATIONS. BUT SOME OF THEM ARE. AND OF COURSE, IF YOU'RE HOLDING NOMINAL BONDS AND IT'S AN INFLATIONARY ENVIRONMENT, STRUCTURALLY, THOSE ARE NO LONGER AS ATTRACTIVE AS THEY USED TO BE. SO THERE COULD BE A COMPLEX OF THREE REASONS WHY LONG-TERM YIELDS ARE HIGH. I LIKE TO THINK THAT A LOT OF THIS HAS TO DO ULTIMATELY WITH THE STRUCTURAL TREND BEHIND INFLATION. THERE'S A LOT OF THINGS GLOBALLY THAT ARE CREATING INFLATION. DEGLOBALIZATION, DEMOGRAPHIC CHANGES, CLIMATE CHANGES, ET CETERA. AND ALTHOUGH WE MIGHT GET A PRODUCTIVITY BOOST FROM A.I., IT'S NOT CLEAR THAT IT'S GOING TO MANAGE TO OFFSET ALL OF THE OTHER INFLATIONARY FORCES THAT ARE OUT THERE. [00:30:30] Speaker 1: OR HOW FAST IT WILL COME AND WE'LL SEE THE RESULTS OF IT. TERRY, I HAVE TO ASK YOU, THE OUTLOOK FOR THE DOLLAR AMONG ALL OF THIS. THE SELL AMERICA TRADE WAS SORT OF TRYING TO CREEP BACK IN AGAIN AT THE SAME TIME, YOU KNOW, WITH THE WAR IN IRAN AND OIL PRICES AND SO ON, DISINFLATION IN CHINA. I MEAN, THERE'S A LOT OF [00:30:46] Speaker 10: CHALLENGES OUT THERE. THERE ARE. I THINK THE KEY THING RIGHT NOW IS IN THE SHORT TERM IS THE PRICE OF OIL. MAYBE EVEN IN THE MEDIUM TERM AS WELL. WHAT WE HAVE SEEN DURING THE WAR, I.E. FROM THE LATE FEBRUARY INTO EARLY JUNE, LATE MAY, WAS THAT HIGH OIL PRICES WERE ACTUALLY GOOD FOR THE DOLLAR AND THAT MAKES A LOT OF SENSE AS I KEEP REPEATING BECAUSE THE U.S. IS A NET EXPORTER OF BASIC ENERGY. WHEN THE THING YOU EXPORT, PRICE GOES UP, YOU BENEFIT. INCOMES ACTUALLY BENEFITED IN THE U.S. REAL INCOMES BENEFITED IN AGGREGATE FROM THAT OIL PRICE INCREASE. IN THE MEANTIME, IF OIL PRICES STAY HIGH AND IT COMPELS THE FED TO RAISE RATES BECAUSE IT'S CERTAINLY PART OF THE PICTURE FOR THEM, I THINK THE DOLLAR WILL BE, LET'S CALL IT ROBUST, STEADY. LOOKING INTO NEXT YEAR, IF OIL PRICES FINALLY FALL, WE GET ON THE OTHER SIDE OF THESE FRENCH ELECTIONS AND THE DOLLAR FALLS OUT OF FAVOR IN LARGE PART BECAUSE THIS WAR HAS BEEN SEEN AS SOMETHING THAT HAS DEBILITATED THE PERCEPTION OF THE U.S. AROUND THE WORLD. WE WILL HAVE MANY CONVERSATIONS BEFORE THEN. [00:31:43] Speaker 1: THANK YOU SO MUCH FOR YOUR TRIP INTO STUDIO. IN PARTICULAR, THAT'S TERRY WISEMAN OF MACQUARRY. NOW TO OTHER TOP STORIES TRENDING ON THE TERMINAL THIS MORNING. RUSSIA SAYS 13 PEOPLE WERE KILLED IN A UKRAINIAN ATTACK ON A TATARSTAN ENERGY HUB. A LARGE-SCALE DRONE ASSAULT TARGETED INDUSTRIAL SITES AND RESIDENTIAL AREAS ACCORDING TO LOCAL OFFICIALS AND LEFT 40 PEOPLE INJURED. PARAMOUNT HAS AGREED TO SIGN CONTRACTS WITH MAJOR THEATER CHAINS GUARANTEEING IT WILL RELEASE 30 MOVIES IN THEATERS THIS YEAR IF IT ACQUIRES WARNER BROTHERS. BLOOMBERG LEARNS THAT AMC AND CINE WORLD'S REGAL CINEMAS HAVE BEEN OFFERED THREE-YEAR AGREEMENTS WHICH STATE THE MOVIES WOULD REMAIN EXCUSIVELY IN THEATERS FOR 45 DAYS AND U.S. WHEAT FUTURES JUMPED TO THEIR HIGHEST IN MORE THAN A WEEK ON CONCERNS, SHIPPING DISRUPTIONS IN THE BLACK SEA WILL CREATE SUPPLY SHORTAGES. TURKEY HAS TEMPORARILY HALTED ITS BLACK SEA TRANSITS OVER HEIGHTENED SECURITY RISKS BROUGHT ON BY THE RUSSIA-UKraine WAR. UKRAINE HAS ALSO STATED THAT RUSSIAN ATTACKS COULD CUT EXPORTS OF ITS AGRICULTURAL PRODUCTS IN HALF. COMING UP, IRAN AND OMAN REMAIN SHORT OF A DEAL TO REOPEN THE STRAIGHT OF HORMOUZ. WE'LL GET THE LATEST OUT OF THE MIDDLE EAST. THIS IS BOOMBERG. [00:33:01] Speaker 11: AT PRESENT, WE ARE NOT ENGAGED IN ANY NEGOTIATIONS WITH THE UNITED STATES. AS LONG AS THE AMERICAN VIOLATION OF THE MEMORANDUM OF UNDERSTANDING CONTINUES AND THE U.S. DOES NOT MAKE AMENDS FOR ITS VIOLATIONS, THERE IS NO POSSIBILITY OF [00:33:24] Speaker 1: RESUMING NEGOTIATIONS. IRAN'S FOREIGN MINISTER RULING OUT DIRECT TALKS WITH THE U.S. ADDING THAT AN AGREEMENT WITH OMAN TO ESTABLISH A SHIPPING ROUTE THROUGH THE STRAIGHT OF HORMOUZ IS VERY CLOSE. WE'LL BE PUTTING A POSITIVE TONE ON THINGS. [00:33:50] Speaker 5: WHAT HAS CHANGED HERE? GOOD MORNING. EVEN OVER THE PAST HOUR OR SO, WE HAVE HEARD FROM THE FOREIGN MINISTRY ASKING FOR COMPENSATION FROM THE UNITED STATES AND A COMPLETE END TO THE WAR BEFORE THEY CONSIDER EVEN COMING BACK TO THE NEGOTIATING WHEN IT COMES TO THE ECHELONS OF POWER IN IRAN. OVER THE WEEKEND, WE'VE REPORTED ON A FEW INDIVIDUALS WHO HAVE RESHUFFLED IN THE WIDER CABINET. THAT INCLUDES MOHAMMAD BAQHIR ZULGHADAR, WHO IS A HARDLINER, KNOWN HARDLINER IN IRAN. HE ACCEPTED THE NEW POSITION AS A POLITICAL ADVISER TO THE SUPREME LEADER MUSHTABA KHAMINI. NOW, THIS IS SOMEONE WHO HAS SAID OVER THE WEEKEND THAT IN ORDER FOR IRAN TO COME TO THE NEGOTIATING TABLE WITH THE UNITED STATES THAT THE U.S. NEEDS TO END THE WAR PERMANENTLY, LIFT THE U.S. NAVAL BLOCKADE ON THE STRAIGHT OF HERMOOZ, UNBLOCK THOSE FROZEN ASSETS, OIL SANCTIONS REMOVED. SO A RETURN REALLY TO SOME OF THOSE CONCESSIONS THAT WE HAVE SPOKEN ABOUT DURING THOSE MOU NEGOTIATIONS BACK IN JUNE IN SWEDERLAND. THOSE HAD OBVIOUSLY LEFT THE WINDOW WHEN WE STARTED DISCUSSING THE STRAIGHT OF HERMOOZ AND REOPENING THE STRAIGHT OF HERMOOZ. AND THIS IS STILL FRONT AND CENTER. I MEAN, IT'S NOTeworthy TO MENTION HERE THAT WHILE WE HAVE SEEN A RETURN TO A KIND OF HARDER APPROACH WHEN IT COMES TO IRANIAN OFFICIALS BRINGING THOSE SORT OF REQUESTS TO THE TABLE, FRONT AND CENTER REMAINS THE STRAIGHT OF HERMOOZ AND THE NEGOTIATIONS THAT YOU MENTIONED WITH OMAN TO ESTABLISH SOME KIND OF MECHANISM TO GET A TRICKLE OF MOVEMENT THROUGH THE WATERWAY. WE UNDERSTAND THAT THOSE NEGOTIATIONS BETWEEN OMAN AND IRAN ARE IN THE FINAL STAGES. A FORMALIZED DRAFT IS YET TO BE HERE. WE WILL BE ABLE TO BETTER DETERMINE JUST WHAT EXACTLY WOULD HAPPEN TO THE PHYSICAL MOVEMENT OF THOSE OIL BARRELS ONCE WE SEE WHAT THE FORMAL STATEMENT FROM BOTH SIDES LOOKS LIKE. FOR THE TIME BEING, THREATS IN THE STRAIGHT OF HERMOOZ ARE STILL VERY MUCH THERE. THE LATEST WE KNOW IS A SHIP OF ADNOC, THE UAE OIL COMPANY THAT WAS ATTACKED IN THE STRAIGHT OF HERMOOZ OVER THE WEEKEND, KILLING ONE INDIVIDUAL AND INJURING OVER A DOZEN PEOPLE. SO THAT THREAT THAT EXISTS IN THE WATERWAY IS STILL VERY MUCH THERE AND IS STILL AT THE TOP OF MIND FOR A LOT OF THE COUNTRIES IN THE GCC AND THEN A LOT OF THE SHIP OWNERS THAT ARE TRYING TO MAKE THEIR WAY THROUGH THE STRAIGHT OF HERMOOZ EVEN WITH THEIR LIGHTS SWITCHED OFF. [00:36:11] Speaker 1: THOUSANDS STILL STRANDED OF SAILORS. THANK YOU SO MUCH, ABU OMAR IN DUBAI. TURNING TO TECH, TSMC REPORTING A 45% INCREASE IN MONTHLY SALES, REVENUE REACHING $14.5 BILLION AS THE TAIWANESE CHIPMAKER BENEFITS FROM THE GLOBAL AI BUILDOUT. LET'S BRING IN MATT BLOXUM OF BLOOMBERG INTELLIGENCE FOR MORE. THAT'S ANOTHER WHOPPING SALES FIGURE. IS IT EXISTING CUSTOMERS BUYING MORE, PROMISING TO BUY MORE, [00:36:39] Speaker ?: NEW CUSTOMERS? [00:36:40] Speaker 8: YEAH, I THINK THIS IS LARGELY EXISTING CUSTOMERS COMING THROUGH WITH DEMAND. THE TSMC IS THE SUPPLIER TO A HUGE RANGE OF COMPANIES, NOTABLY NVIDIA AND APPLE. I THINK THIS IS REFLECTIVE OF THE AMOUNT OF DEMAND THOSE COMPANIES ARE SEEING FOR THEIR PRODUCTS AND SERVICES. IT'S A BIT OF A SLOWDOWN FROM THE JUNE MONTH WHICH GROWS SOMETHING LIKE 68% OR 69% YEAR-ON-YEAR, BUT IT'S STILL WELL AHEAD OF THE YEAR-TO-DATE GROWTH WHICH IS AROUND 35%, 36%. AND YOU'RE NOT THAT SURPRISING THAT WE'VE SEEN ANOTHER STRONG PRINT GIVEN THAT THE COMPANY NOT SO LONG AGO RAISED FULL-YEAR GRIDANCE FOR REVENUE GROWTH. SO IN U.S. DOLLAR TERMS LOOKING NOW TO GROW 2026 REVENUES BY MORE THAN 40%. THE PREVIOUS TARGET WAS AROUND 30%. SO MOMENTUM IS REALLY STRONG, CERTAINLY NEAR TERM FOR TSMC. [00:37:28] Speaker 1: SONY BACK IN THE HEADLINES. IT'S TEAMING UP WITH TSMC NOW TO BUILD A $6.4 BILLION PLANT, A JAPANESE SENSOR PLANT. WHAT WOULD THAT BE FOR, MATT? [00:37:40] Speaker 8: YEAH, SO I GUESS AS YOU SEE THE AI ENVIRONMENT EVOLVE AND WE GET INTO PHYSICAL AI WHERE YOU'VE GOT LOTS MORE ROBOTS, YOU'VE GOT AUTONOMOUS DRIVING, SENSORS IS GOING TO BE A MASSIVELY IMPORTANT PART OF HOW THESE BITS OF HARDWARE COMMUNICATE WITH EACH OTHER AND WITH THE WIDER INTERNET. AND SO I THINK ALONG WITH A NUMBER OF COMPANIES, BOTH TSMC AND SONY SEEING THAT THEY NEED TO BUILD A LOT OF CAPACITY BOTH FOR THEIR OWN PRODUCTS BUT FOR THE KIND OF BROADER MARKETS THIS YEAR WOULDN'T COME ON STREAM FOR A COUPLE OF YEARS, BUT IT'S ANTICIPATING THAT BIG SURGE IN THE NEED OF CENSORS FOR ALL OF THESE AI PRODUCTS THAT ARE YET TO COME ONTO THE MARKET. [00:38:19] Speaker 1: MATT, I WANT TO ASK YOU ABOUT THE CXMT STORY THAT THE WALL STREET JOURNAL IS REPORTING OUT, APPLE POTENTIALLY TAKING ON CXMT SEMICONDUCTORS FOR ITS PRODUCTS IN CHINA. THIS COULD BE THE BEGINNING OF A WHOLE NEW RELATIONSHIP, NOT JUST FOR APPLE BUT FOR OTHER COMPANIES TOO, POTENTIALLY. [00:38:35] Speaker 8: YEAH, IT COULD ALSO, YOU KNOW, WITH THE GEOPOLITICAL MENTIONS WE'RE SEEING QUITE A POLARIZATION AND A FRAGMENTATION OF WHAT USED TO BE A GLOBAL SUPPLY CHAIN. OBVIOUSLY, THERE'S HUGE SHORTAGES FOR THINGS LIKE MEMORY CHIPS, AND I THINK APPLE HERE IS LOOKING TO SECURE MORE OF A STRATEGIC MIDTERM LOCAL SUPPLY FOR SOME OF THAT ESSENTIAL TECHNOLOGY. I DON'T THINK THIS IS GOING TO MAKE A BIG DIFFERENCE NEAR TERM, BECAUSE FROM WHAT WE'VE HEARD, CXMT HAS ALREADY MAXED OUT ON THIS YEAR'S SUPPLY AND IS PRIORITIZING LOCAL COMPANIES SUCH AS BITE DANCE AND TEN CENT. BUT THEY DO HAVE PLANS TO SIGNIFICALLY INCREASE THEIR MANUFACTURING CAPACITY OVER THE NEXT COUPLE OF YEARS. SO I THINK THAT COULD CREATE AN OPPORTUNITY FOR APPLE TO KIND OF GET SOME OF THAT SUPPLY. [00:39:21] Speaker 1: AND INTERESTINGLY, CXMT ECLIPSED ICBC TO BECOME THE LARGEST MARKET CAP COMPANY IN CHINA AFTER ITS IPO JUST RECENTLY. MATT, THANK YOU SO MUCH. NOW TO EARNINGS IN BERKSHIRE HATHOWAY'S IN PARTICULAR, ITS LATEST REPORT REAILING IT SPENT ABOUT $4.5 BILLION TO BUY BACK ITS OWN SHARES AND ALSO PURCHASED NEARLY $20 BILLION OF EQUITIES IN THE PERIOD. THANK YOU FOR JOINING US. THANK YOU FOR JOINING US. WE ARE MAKING A LOT OF THIS BUT IT IS ESSENTIALLY A TINY, TINY PORTION OF THE CASH RESERVES. WAS IT MORE OF A STATEMENT THAT GREG ABLE IS NOT AFRAID TO MAKE DECISIONS OR IS IT REALLY A BELIEF THAT ALPHABET IS WORTH A COUPLE OF EXTRA BILLION DOLLARS IN INVESTMENT AT THESE PRICES? [00:40:09] Speaker 12: THAT IS ABSOLUTELY THE RIGHT CONTEXT. WE HAVE A COMPANY HERE IN BERKSHIRE WHICH HAS SOMETHING LIKE, YOU KNOW, CLOSE TO $400 BILLION TO DEPLOY. SO, YOU KNOW, WHATEVER THEY ARE DOING, BROADLY SPEAKING, IS FAIRLY MARGINAL UNTIL THEY REALLY BRING OUT THE BAZOUKAS WHETHER ON THE BUYBACKS OR, YOU KNOW, PERHAPS ON SOME ABSOLUTELY DECISIONS OF THE GINOMOUS MEGA DEAL WHICH WOULD PROBABLY TRANSFORM MARKETS. BUT, YOU KNOW, THERE ARE SOME INTERESTING SIGNS HERE. YOU HAVE A 4.5 BILLION BUYBACK SHOWS THAT HE IS NOT AFRAID TO PULL THAT LEVER. AND THEN, OF COURSE, IN TERMS OF WHERE THEY ARE PUTTING A BIT MORE MONEY IN THEIR EQUITIES BOOK, YES, ALPHABET AND INSURER AND SORT OF THE OTHER 5 TO 10 BILLION, WE ARE NOT ACTUALLY SURE WHERE IT HAS GONE YET. I THINK THE MOST IMPORTANT THING TO REMEMBER IS IF YOU ARE HOPING FOR BERKSHIRE TO REALLY SPEND DOWN ITS CASH PILE, WE ARE GOING TO NEED TO SEE A LOT MORE BIG SWINGS THAN WE HAVE SEEN SO FAR. [00:40:59] Speaker 1: STILL INTERESTED IN JAPANESE COMPANIES. THEY WERE INVOLVED IN THE BROKERAGES AND THIS DEAL WAS AN INSURANCE COMPANY. AND ALSO, OF COURSE, WE CAN'T FORGET THE TAYLOR MORRISON ACQUISITION. THAT WAS A PRETTY BIG ACQUISITION. [00:41:10] Speaker 12: YEAH, EXACTLY. THAT IS AN INTERESTING ONE WHERE THEY ARE BUYING INTO THE U.S. HOUSE MARKET. AGAIN, IT IS A NICE SIGN OF WHAT GREG ABELL IS TRYING TO DO IN THAT HE LOOKS LIKE FROM THAT ACQUISITION HE IS TRYING TO KIND OF MAKE A VERTICAL PROVIDER. HE CAN GO INTO THE INSURANCE, THE FINANCING, DO THE HOUSE BUILDING THEMSELVES. THAT IS WHAT SOME ANALYSTS ARE SAYING. MAYBE THAT IS HOW HE WILL LEAVE HIS IMPRINT ON BERKSHIRE HATHWAY. A BIT LIKE BERKSHIRE HATHWAY ENERGY WHERE EFFECTIVELY THOSE COMPANIES ALL SPOKE TO EACH OTHER OR WERE ALIGNED. IN OTHER AREAS OF BERKSHIRE HATHWAY, THESE OPERATING COMPANIES ARE EFFECTIVELY INDEPENDENT ENTITIES. THIS IS A SIGNAL THAT ABELL SEES, HEY, THERE IS A WAY WE CAN PUSH SYNERGIES, GET EVERYONE MUCH MORE CLOSELY ALIGNED AND TALKING TO EACH OTHER EVEN. THAT WOULD BE A WAY BERKSHIRE IS TRANSFORMED UNDER HIS TENURE. [00:42:06] Speaker 1: LOOKING FORWARD TO MORE. TOM METCALF, THANK YOU SO MUCH FOR THAT. COMING UP, WE ARE GOING TO GET [00:42:11] Speaker ?: YOU SET UP FOR YOUR TRADING WEEK. THIS IS BLOOMBERG. [00:42:18] Speaker 1: WE HAVE A LOOK AT WHAT'S AHEAD THIS WEEK THAT WE KNOW OF. FIRST OF ALL, WE GET TECH EARNINGS FROM CORWEAVE AND SUPER MICRO, THEY ARE COMING TOMORROW. THEN ON WEDNESDAY, THE MARKET WILL BE LOOKING AT CPI DATA, AND WE ARE GOING TO GET MORE FED SPEAK THIS WEEK. LET'S TAKE A LOOK AT YOUR MACRO PICTURE AS WE HEAD INTO A MONDAY, FOLLOWING AN S&P RECORD FRIDAY, BY THE WAY, WITH JP MORGAN TODAY UPPING ITS PRICE TARGET TO 8,000 FROM 7800. BRENT CRUDE IS ABOVE $84.50 A BARREL NOW AS THINGS LOOK A LITTLE BIT MORE FRAGILE IN THE MIDDLE EAST. MAYBE TALKS BREAKING DOWN OR NOT HAPPENING. THE MARKET IS HAPPENING FOR THE MARKET. THE MARKET IS DIGESTING THAT. THAT IS IT FOR BLOOMBERG BRIEF. SURVEILLANCE IS NEXT. THAT IS IT FOR BLOOMBERG BRIEF.