Transcripts For BLOOMBERG Bloomberg 20240703

Haidi welcomed today by garth roy im hiding stroudwatts in sydney. Annabelle im annabelle droulers. Shery im shery ahn. The top stories this hour. Treasuries excel off while equities churn as investors digest higher rates and Rising Oil Prices with the dollar extending its climate. Annabelle the largest u. S. Memory chipmaker warning of a steeper than expected loss this quarter. Shery how the new honda ce cash qantas ceo turns around mistrust after being grilled by australian lawmakers. How u. S. Futures are coming online after stocks finished the session mixed. We saw the s p 500 fluctuating between gains and losses to finish where it started. It erased some losses after President Biden touted artificial intelligence. The nasdaq 100 outperforming finishing in the green. We had at micron smiths after hours adding to technology pessimism. Look at the 10 year yield. The 460 level, the slump resuming in todays session. The 10 year yield is over one percentage point higher since midmay. We are still watching for the feds referred gauge of inflation this week. The bloomberg dollar index is the highest since november in the longest winning streak in one year, and that should pressure commodities but wti was of todays session to a fresh one year high. U. S. Stockpiles dropped to the lowest level since july 2022. You can see in asia hours above 93 per barrel. What we are watching now is the after our price of micron. It still under pressure on the painful outlook they put forth. In their Earnings Results they saw a worse loss than expected of it as much as 1. 14 per share even as sales improved. This tells us a lot about the broader industry slump. We have seen the likes of them some electronics, sk hynix suffer in 2023. It seems that might continue for a while. Haidi it has been brutal. This is why we are watching micron. It is such a bellwether for the broader industry. The other giants relevant to the story like samsung in asia and perhaps a little thankfully its a holiday in the korean markets given the impact of samsung as a heavyweight in the market. Perhaps we will see a little pent up reaction when they come back online. Sk hynix as well. For these companies 2020 three has been absolutely brutal. We have seen major markets across pcs and smartphones slashing orders for customers. Demand has been falling and stockpiles of excess parts have been building. The report we are seeing suggests may be some investor optimism we have seen about a rebound in profitability may have been premature. Shery it has caused to the Technology Sector and broader markets. With the ceo of wealth lies financial. Always great to have you with us. We have seen incredible pullback when it comes to Technology Mega caps given rising yields. You still see any opportunities in the sector . Certainly there are some opportunities. But what is interesting is when you take the equally weighted s p 500 that turned negative today. Whereas, the yeartodate returns. Most of that is from mecca cap companies. We expect more of a broadening in the market. And more of that generative ai story going down towards small and midcap companies. Most of the gains we have seen that for fueled by this idea of innovation and it generative ai were taking place in mentor cap companies. So, we are looking to the small and the midcap as we think there will be a broadening out. I think there will be more equalization between growth and value then we have seen year to date. When you look at the dispersion between the return on the nasdaq and the dow, thats substantial. So, i think there are some good opportunities especially in the value space. Shery in your nose you say you are purely focused on stable cash flow for any nearterm entries. This is a defensive play. Where you go from here in the longer term . Loreen yeah. Well, i would say right now we are being more defensive as we continue to see data and see the economy slowing down. When we look at the Consumer Confidence number, they came out this week. That came in quite a bit lower than we expected. With that, below the 80 mark Conference Board states is a critical area. So, we have seen that decline further depth the time. Further than that we think and the Conference Board believes within 12 months most likely there will be recession. Given that having more of a defensive play looking at financials, energy, health care, as areas of potential opportunity, as those areas have been hit substantially year to date. Annabelle what seems are you focusing on as we get into earnings . Loreen we have been in an earnings recession. As we expected, q2 we had negative around 5. 4 percent yearoveryear. We expect that to turn in the Third Quarter with more of may be a flat to a slight positive in yearoveryear earnings. We are coming out of an earnings recession. We are really looking at guidance. Looking to see what companies we think where stocks will move based on guidance, not as much as pure earnings numbers but where companies are going forward. We are seeing increased cost of capital that will continue to impact Profit Margins. So, where we have been around 11. 1 or so with Profit Margins continuing to compress we expect a continued compression of those Profit Margins. Haidi here we go again when it comes to being at the precipice of a Government Shutdown. Does this play into your risk analysis at all at this point . Loreen we look at history we see Government Shutdowns have not really impacted the markets. In fact, the longest shutdown we have seen, 35 days, we saw the s p 500 actually go up 10 during that time. So, we have not necessarily seen a huge impact. But, there are other factors that come into play when it comes to volatility of the markets. One of which is the employment numbers that we probably will not get. That could make the markets nervous because we have been seeing unemployment pick up from 3. 4 to 3. 8 . Without having that number one we have a black box, that can make the markets nervous. So, in that regard, i do think the markets could be a little bit uncertain. A little bit volatile. Until we get data once again. Shery that makes the job of the fed more complicated right now. How much does it help the federal reserve, the fact yields continue to rise, especially, when it comes to real yields in your account inflation . Loreen the fact is, what the fed is trying to do is to slow things down. What is interesting is when you look at consumers right now, we heard today that it is only the 20 wealthiest americans that still have excess savings from the pandemic. So, we do see that the consumer is going to have to slow down. We have not really seen that much to this point. It has been surprising to everybody that the consumer really has not slowing down much. But, that party is about to end. So, with that, i think eventually what the fed is time to do, in getting people to slow down, i think we that will eventually happen but they are not there yet. They are trying to continue with this hawkish stance and have the markets expect that rates will be higher for longer. Whereas, the market still continue to want to say the markets are that we will see a rate decrease in 2024. At least for now we need to really listen to what the fed is saying they will hold those right tire for longer area shery Noreen Gilbert ceo of wealth lies financial. The looming u. S. Government shutdown and the autoworkers a strike, a renewed focus on abortion rights will provide a volatile backdrop for the second republican primary debate in just a few hours. For more lets bring in bloomberg political news director Jodi Schneider in washington. A republican frontrunner for the nomination donald trump will not be on the stage. What are the candidates going to focus on tonight . Jodi they might focus a little more on donald trump than in the first debate last month. He was not there either. But this time its been another month and he is still the frontrunner. It looks like they might criticize him more. We are expecting that this time. The criticism of the former was fairly muted when it came to januarys except when it came to january 6 and they wanted to distance themselves from him and the events of that day. This time they may take him on a little more on other issues. Even former Vice President pence, that was his Vice President , is expected to try to distance himself from the former president saying that while he agreed with a lot of things he did as president and wants to take credit as Vice President he did not agree with a lot of the statements he is making sense. And he really wants to distance himself from that. They are all looking for a breakout moment as well. Nikki haley the former you in ambassador as United Nations ambassador and former South Carolina governor had those moments last time particularly when she took on Vivek Ramaswamy the businessman. But she has not really done that well lately. Of course, ron desantis, who is the second after donald trump, he distanced he falls way behind the former president in poland. 42 in a recent poll. So, he really has some ground to make up tonight. Shery lets talk about the looming Government Shutdown in a few days. What do we see as the economic and other consequences this time . Jodi well, it looks like we will have a shutdown. It is not a certainty. They could always have a socalled hail mary pass and somehow avert this last minute. If it does not happen it could start october 1 in a few days. Shutdowns tend to be fairly muted in terms of economic impacts. If they are short, just a few weeks. If they go longer the economic hurt is deeper. About 2 million civilian workers at 1. 3 active military members do not get paid. They may get up after the shutdown but do not get paid during the shutdown, nor to private contractors work with the government. While that does not add up to a huge blip in terms of economic impact, over time it does. Also, the entire effect of there being a shutdown, the longer it goes on, the more it seems to have that kind of Consumer Confidence intact as well. People started out some of there is more uncertainty out there with the government not being open. It can also affect things like tourism as monuments and parks are closed. But a shortterm run is not expected to have a terribly big effect. Of course, people are not getting paid during that time and that didnt really wreak havoc with family households. Shery Jodi Schneider there in washington. Quite a few risks for the market. Lets get a look at annabelle for asia. The police the u. S. Annabelle the u. S. Shutdown risk is one of them. Use a higher treasury yields for the 10 year. A firmer dollar for a six straight sessions food these are all factors. Oil prices put downward pressure on asia equities. In the currency space watch the japanese yen again getting closer to the 150 level we watched for intervention. Equities and assets looking to trade a little mixed in the session today. A lot of markets point to downside given the lead in from the wall street session. What is interesting is when you look at china. Here we see futures in the green. Yesterday was also a session that ended to the upside. We had industrial profits rebounding for the first time in about one year. Now lets look at the terminal chart. It is again telling a bit of a story, a different dynamic for chinese stocks. Earnings estimates are the line in white. You can see they are starting to pick up higher over september. Valuations, the low i line in blue, very cheap for this market. Are we starting to see investors return . Mainland buyers have become net powers over the past few sessions. That is really the question now. Will we see a turning point for the Chinese Market . A lot of that comes down to the outlook for the property sector as well as what sort of contagion we see from risk there. Shery ahead, a deeper dive into the chip industry after microns morning of lackluster demand following five straight quarters of shrinking sales. What bush securities joins us later in the hour. This is bloomberg. Shery chinese Property Developer Country Garden is set for talks with potential Financial Advisors that put together an offshore debt Restructuring Plan. For more, chief north agent correspondent Stephen Engle joins us from hong kong. How far along are the talks . Stephen sources say they are in the preliminary stage now. We are hearing that Country Garden which at one point was of chinas largest developer is now facing similar obvious liquidity woes and Debt Repayment woes that the rest of the industry like evergrande and others have been facing. Its really kind Development Test to see how far authorities will go to rescue the sector. There does not seem to be any reprieve inside. Contracted sales for properties fell again. I think it is down to an eight month low. The lowest in eight months plunging 72 in august yearoveryear. Country garden has warned of major uncertainties regarding Debt Repayment. Instead repayment schedule. Keep in mind that next week is the weeklong golden week holiday come as a National Holiday in china october 1 and onwards when these developers traditionally get a bulk of their sales. All of this negative news including the evergrande seeing its debt Restructuring Plan go off the rails, that news came earlier this week, on top of of course Country Gardens ongoing troubles will be a continued dampener on the sector. Keep in mind Country Garden has most of its developments in the third tier of cities and forths pierce cities. Any policy support coming from the government would probably be less focused on those cities rather than the bigger bed areas like beijing and shanghai. That adds extra trouble and uncertainty to Country Garden. People familiar are telling us now that cicc the Biggest Investment Bank in china, China International Capital Corporation along with restructuring expert houlihan loki have been in talks with Country Garden to be Financial Advisors and at least put together an offshore debt Restructuring Plan. All three parties, i my dad, have declined to comment when contacted by bloomberg news. Discussions are at a preliminary stage and there is no guarantee a data plan would actually emerge. Country garden has 11 billion of offshore bonds outstanding. It recently did when investor approval to delay during this gracen period for onshore and offshore bonds for you to do yesterday they had Interest Payments due again yesterday. One for a 41 million u. S. Dollar coupon and another 1. 66 million for a ring get bond in malaysia. They have these liabilities in continued coupon payments coming due. The early when i mentioned, the 41 million coupon has a 30 day grace period filled in but the bond with 1. 66 million has a five day grace period. I say this because Country Garden today has not technically defaulted but with a five day grace period five days from yesterday it did have the first onshore bond default. Shery Stephen Engle has the latest on Country Gardens. All the pessimism in the property sector reflected in the markets with chinese equities rebounding but not property stocks. We are talking about the lowest levels in about 12 years or so. Really that is being extended not only to the stock market but also to the bond markets. Chinese junk bonds also seen as uninvestable at this point. They are on their Third Straight year of doubledigit declines if we continue to go at this pace. Get a roundup of all the stories that you need to know to get your day going in todays edition of daybreak. Terminal subscribers go to dayb to customize your settings so you only get the news on the industries and assets that you care about. This is bloomberg. When you automate sales tax with avalara, you dont have to worry about things like changing tax rates or filing returns. Avalarahhh ahhh this does not mean the demand is going down. Demand is strong. Last year when we had on the table the price it was consumed. This year its normalized. What we are looking at now is a sustained demand at higher prices coming at us for everything we offer, many of our roots. Lewis strong, particularly leisure and demand, premium leisure is amazing. The corporate traffic is one that is lagging behind. Willie i think to mind demand is strong, certainly stronger than i expected for this time of the year. I think it will continue to be pretty good going forward. The issue is supply will be constrained. Shery Top Airline Executives speaking at the wild aviation festival in lisbon. The qantas executives face to grayling in front of an Australian Senate inquiry wednesday afternoon with the airline questioned overtreatment of staff, customers, and competitors. Paul allen joins us now with more. It was not an easy run for qantas. Paul it was not. It started off with the new Ceo Vanessa Hudson making conciliatory remarks admitting qantas really needed to do better. The Senate Committee chair Bridget Mckenzie really laid into the airlines challenging hudson on the new direction considering hudson had given support to the former Ceo Alan Joyce this policies during an investor day leading to ghost flights, illegal sackings, etc. Mckenzie asked a series of questions qantas did not have answers for. They did not make a submission into the inquiry either. It really built into an opportunity for the Senate Committee chair to scold qantas. Here is what you had to say. Chair mckenzie guess what . When you come to a Senate Inquiry we ask questions and you are supposed to come with the answers. Its a bit like failing to hand in a submission. Not having details about when you had made significant decisions in partnership with the government to show us a level of disrespect. Paul this committee was set up to investigate the government decision to block cotter airlines from getting more landing slots. Of course, senators did not let the opportunity pass to really get stuck into qantas about all the other issues. Shery qantas chair Richard Gorder seems in the firing line now. Paul he was asked if he intended to step down and said he is not going anywhere. He met with major shareholders a week ago and they expressed confidence in him and gave the board. Here is what he had to say. Richard while i return the confidence of our shareholders and the board i will continue to serve because i think we have got some very significant challenges in front of us and issues to deal with. I think that is the best outcome for qantas if that confidence is not maintained, clearly, i will review the decision. Paul rachel moran house is the ceo of the Australian Shareholder Association and says goyder should step down and he bears as much responsibility as former Ceo Alan Joyce for all the problems 3g says goyder needs to lay out a Succession Plan at the qantas agm in november. Shery look at how currencies traded at the moment. Big moves for the dollar again. Again we are talking about six sessions of gains, the longest winning streak of the year at the highest level since november. On the other side of the break the euro was one of the weakest performers falling to the weakest level since early january. The japanese yen headed towards the 150 level, a little bit of strength right now. Look out for the 150. The finance minister coming out repeating he is watching currencies with a strong sense of urgency. Coming up, the uaw planning to expand it strike. We have the details. This is bloomberg. So. I know you and george were struggling with the possibility of having to move. Hows that going . We found a way to make bathing safer with a kohler walkin bath. A kohler walkin bath provides a secure, spalike bathing experience in the comfort of your own home. A kohler walkin bath has one of the lowest stepins of any walkin bath for easy entry and exit. It features textured surfaces, convenient handrails for more stability, and a wide door for easier mobility. Kohler® walkin baths include two hydrotherapies whirlpool jets and our patented bubblemassage™ to help soothe sore muscles in your feet, legs, and back. A kohlercertified installer will install everything quickly and conveniently in as little as a day. They made us feel completely comfortable in our home. And, yes, its affordable. I wish we would have looked into it sooner. Think i might look into one myself. Stay in the home and life youve built for years to come. Call. To receive 50 off installation of your kohler walkin bath. And take advantage of our no interest [speaking foreign language] shery Goldman Sachs says the two months selloff in u. S. Stocks could take a turn for the worse unless for the worse. Lets bring in at ml in hong kong annabelle in hong kong. Goldman sachs is calling this a new no rules market. Annabelle thats a direct quote from Scott Ruffner somebody that has been studying the flow of equity funds for more than two decades here. Essentially what is driving the decision or view from Goldman Sachs is the actions in the options market. Ruffner is looking at ctas or Commodity Trading advisors in particular. Ctas serve momentum in markets by taking long and short bets in the futures area instead. Rogner is saying in the next couple weeks they will be forced to unload or unwind at 48 billion of global stocks even if we see benchmark standing still or continuing to churn as they have for the last couple sessions. We have seen over the past couple months the s p 500 for instance has broken below key thresholds. It causes selling for systemic funds. When they are calling the bottom for stocks, they are saying it could happen the first half of october. Thats a couple weeks away. That is the view from rubner that the stocks set off intensify shortterm. Haidi jp morgan is doubling down on his defensive view. Annabelle yes, quite bearish on the outlook over the course of 2020 three. Essentially saying today markets they are a lot of similarities to what we saw in the 2008 financial crisis. He is saying investor positioning, a lot of macroeconomic signals as well. 2 ongoing headwinds for risk assets. He says on the equity credit spreads that risk reward still looks unattractive relative to a fixed income alternative treated that is the view from marco kind of edge. He said we will see more volatility towards the end of the year. Look at the terminal chart, something we saw earlier in the week in the vix that coming in breaking above the 200 day moving average. You also saw the high yield spread higher as well telling us that the bearish sentiment, the volatility is pretty broadbased across different asset classes. Shery it is not surprising given all of the challenges that the economy faces here in the u. S. Including more labor action. The United Auto Workers union is putting more pressure on the big three u. S. Carmakers coming gm, ford and stellantis and plans to expand strikes if there is no progress in friday talks by a friday deadline. Su keenan joins us with more. What is the Union Strategy here . Su this strategy is to remain as flexible as possible and take cues from what is going on at the bargaining table. This has been a different strike from all those in the past. Its called a stand up strike in that the union is expanding its strike actions as the action goes on. They are trying to keep automakers guessing. A source tells us that this point, they do not have any talks scheduled immediately with fourdoor stellantis they were planning Late Wednesday today in the u. S. To meet with gm. They are planning to escalate their strike action as of friday noon if they dont see major progress. Again thousands of autoworkers began to strike on september 14. Last friday the union expanded the labor action 38 gm and stellantis distribution centers. Ford was spared because it made concessions. A source tells bloomberg this time ford made not to be spared and everything is on the table. Again this strategy is very different in that they are gradually ratcheting up pressure on all three automakers. Their demands, according to the automakers, a very are very difficult to meet. It automakers offered about a 20 wage increase. The uaw is seeking. The union is saying they are expected to release a video highlighting violence some strikers experienced on the picket line on tuesday afternoon in flint, michigan, somebody trying to exit the gm parts plant was blocked by picketers. According to police, that person drove right through the picket line striking five individuals. One of them was taken to a hospital. Again, they want to ensure the safety of their workers as well. Haidi we are you learning we are learning the unions push for a return to Pension Plans is a key sticking point. Su it is for almost any company. The three automakers have been happy to leave the Pension Plans in the past. They were a sacred benefit for the automakers. Those hired prior to 2008, the financial crisis, were given these pensions. Even after they retired, they would still get paid. Since 2008 those brought on have had 401 k plans instead. You are looking up President Biden that greeted and walked with the picketers on tuesday. Stopping short of supporting all of the uaws demands, but, supporting that they should be paid more. At the union is really demanding the package. We know that analysts with Bloomberg Intelligence find of gm were to agree to the uaw proposal to reinstate these benefit Pension Plans for hourly employees its pension liability could reach 129 billion dollars. All proposals are made on the table but such a move would certainly shift to the pension burden back to the company. We are also seeing this kind of demand for a pension plan resonate outside of the Auto Industry. If there is clearly concern by the uaw Union Members about retirement and security in retirement in this highly inflationary environment. We are also hearing their our requests being made outside the Auto Industry for this kind of security that is a reflection of the insecurity, if you will, in the current environment where prices are just going higher and higher here in the u. S. Haidi su keenan there has the latest. Other corporate stories this hour. Lululemon agreed to a fiveyear partnership with peloton involving tapping online workouts and teaming up on apparel. Lululemon will make cobranded closing that peloton will sell on its website and retail stores. Pelotons fitness content will be offered to users of the lululemon studio mirror. Elon musks spacex won its First Contact contract from the u. S. Spaceport to provide customized satellite communication for the military. The star shield service will be provided over spacex existing conservation of starting satellite data into spacexs growing defense portfolio. The pga tour is considering highprofile usa investors to help finance its goal deal with saudi back to liv golf. The pga says it had unsolicited interest from investors and is in evaluating opportunities. U. S. Lawmakers have been vocal about their opposition to liv golf despite pga assurances the saudis would only be minority investors in the combined entity. Bloomberg has learned the u. S. Justice department stepped up investigations into Credit Suisse and ubs over suspected compliance failures that allowed russian clients to evade sanctions. The doj briefed u. S. Based lawyers at ubs about Credit Suisses alleges exposure to sanctions violations. Since ubs acquired a small arrival in june. The doj is looking into a possible compliance failures at ubs itself. Next, wes bush securities tells us while they are still bullish on micron. More on the outlook is next. This is bloomberg. And when your teams are spread out, thats not always easy. Our experts can help by implementing poly audio and Video Solutions to keep you connected. From headsets to collaboration tools, poly Solutions Offer simple setup and eliminate distracting background noise, so the people youre talking to only hear you. To collaborate with quality, trust poly and it orchestration by cdw. People who get it. Explore endless design possibilities. Find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. Garfield taking heidi taking a look at how we are seeing micron after hours. Disappointment stoking concern the investor optimism over at the recovery across the broader chip sector may have been a little premature. I grin continuing to slide by just light of 4 there after we saw the prediction of a steeper loss than expected. They have been trying to bounce back from the broader industry slump did the ceo is saying the company has taken Decisive Action to cut cost but we are seeing decline in the stock in late trading after the worse loss than anticipated. Lets get views out of taipei with Matthew Bryson a senior Vice President of Equity Research at Wedbush Securities. You are looking at the numbers and the guidance. You think we have a wild to go before meaningful recovery . Matthew i do not think so. I think that with micron, management has a history of being relatively conservative with guidance. When you are in periods of recovery they tend to be guiding very conservatively versus where you end up in reality. They have told you on the call that pricing is moving upwards. When pricing move upwards, we tend to see relatively rapid correction in Gross Margins. They have other mechanisms that also benefit Gross Margins. The quarter shifted the ram which structurally has higher Gross Margins. A shift in newer dram products in dr five. Higher pricing, higher Gross Margins there. I think it just comes down to a conservative management take. Haidi as you say conservative guidance suggests more of a meaningful recovery come 2025. In the interim do you think they could serve dead surprise to the upside managing expectations for the next year to the lower end . Matthew they do not really explicitly give us 2024 guidance. They do talk to some broader trends. But, i mean, in the past month, month and a half alone we have seen noun pricing on the spot market move up 20 20 5 . Generally, we do see relatively rapid shifts in memory when fundamentals start to turn. When you have more demand and less supply. So, i think we are starting to see those trends in the memory markets and so i guess i see a recovery through this fiscal year. Certainly, when you look at the cloud, customers who are a large portion of their end market, there, the recovery may come a little later and it made might be more like q2, q3, calendar 24. I think even then what we are seeing now, again, dram pricing higher, nan pricing higher, that tells us recovery is started. Shery the ceo was talking about Decisive Action in order to cut cost. How well has he managed the company . Matthew i think he has done a great job from, certainly, both a longer term and short term look. From a longerterm perspective, micron is in the best place it has been Technology Wise since i started covering the company. They are leading in the cost of dram. As they are arguably one of the leaders on the nan side. A step about five or six years and they were lacquers in both materials. Shifting nearterm, the cuts they made in production came relatively early. You have seen everybody else in the market follow their lead. I think one of the reasons things are finally Getting Better is samsung cut back production substantially both in dram and nan. We are finally seeing that impact and market fundamentals. Shery why was the Market Reaction after hours so sharply negative . We saw the stocks falling as much as 5 at one point. Was it the sell the news is sort of scenario when you have a 30 plus gain this year already . Where you are reacting that way. Or is a devaluation just sort of discounting the recovery at this point . Matthew i think its a combination of, yes, there were High Expectations heading into the call because, the same things i am talking about in terms of memory fundamentals Getting Better, that is not my opinion alone. That is what is happening. So, people take the improvements in price, they factor in the models, when you get a relatively conservative guide, it approves disappointing. Then, again, i do not think that shifts the fact that fundamentals are Getting Better. So, at the end of the day i fully expect that when micron ends up reporting fiscal q1, they will end up giving us better numbers and that will filter into better q2 expectations. We will see what we have seen in past recoveries which is because they give these conservative guides. You just end up getting the getting to the end of the period, like, wow, things look better than the company anticipated. Haidi how much of a boost over the next couple years do we get from ai in terms of the pricing dynamics . Who do you see as being the leadership in out of the asian makers . Matthew . A so, from an ai perspective, and i assume you are talking about memory here, right now, hyneks is a leading in providing products. I think eventually everybody will have a highbandwidth memory product that will all be competing. It will just depend on who executes better. It could be micron. It could be tk hyneks. Microns recent history is of having stellar execution. So, i would mop not be surprised if they are in a good position there in a year or two. Because they have been executing well. Having said that one of the nice things about memory versus some other components, and, this is both man and it dram is the shift to ai does not there is no real risk. Think about compute. Certainly, gpus could cannibalize some demand for intel computing. Memory, you need memory in either case. With storage, generative ai, it is in the name. It generates data to build models. You need more data. If anything, it drives data growth. So, i do not think it is necessarily that ai drives a lot more demand for memory. But, i think that it will not also way on memory at all. So the trends we have seen in terms of dram, requirements increasing in the high teens, nan bit requirements increasing in the mid20s or low 30s depending on whos outlook you look at. I think those will continue as ai gains traction. Haidi Matthew Bryson is the senior Vice President for Equity Research at Wedbush Securities taking us through the numbers out of micron looking at the big numbers when it comes to australian kiwi bonds. We are seeing the following trajectory of treasury yields predate 10 year yield rising to the highest since 2011. We saw even with some pretty significant a resilient demand in the 5year note auction treasury yields continuing to pressure those fresh session highs, the cycle highs. Throughout the course of the session that has been replicated when it comes to trading here in asia as well. We are headed when it comes to the equities aside from earlier declines that were a pretty mixed picture in japan and australia as hong kong is also in play when it comes to what we are seeing with australian bonds. Its really the monthly Inflation Numbers that came through yesterday. An acceleration, looking like it could, given it is well above the 2 3 inflation target for the rba puts the rba in place, though, expectations are still sitting for a hold for a fourth straight month. 290 with Bloomberg Radio too to hear more from todays big newsmakers with indepth analysis from our team there. We are broadcasting live from our studio in hong kong area listen in via the app, radio plus or bloombergradio. Com. There is much more ahead. This is bloomberg. Our view is people will want to interact with a bunch of different ars for the Different Things you want to do. I think over time a lot of you will want to make your own ais to advance individual goals you have whether you are a Small Business and you want to attract new customers, or, if you are creator that wants to engage your community or whatever it is you do. Shery metaplatforms Ceo Mark Zuckerberg on bringing generative ai to instagram, messenger, and whats up. For more on that is plans for ai and Consumer Products bloomberg original spoke with the president of Global Affairs nick clegg. Nick when you look for instance at the where content comes from that is being recommended to you on instagram. We have been very open about the fact over the last year or two, we were already leaning into having more original unconnected content, content is not connected to your family and friends but that our ai systems have been abu able to scour the internet and say you might find this interesting, amusing, fun, educational. It gives you an acceleration of ai systems not only recommending content but now increasingly generating content. One of the things we have been working on is how to make sure people can distinguish between the providence, the origin of something that is generative generated by ai rather than human beings. We will have visible clear watermarks on the photorealistic imagery people will be able to use in something called imagine our photorealistic tool integrated into metaai power metachatgpt equivalent where you can ask it anything from a restaurant recommendation for the evening to help to plan your next summer holiday. This will be baked into messenger and what seven things like that . Nick yes, all of that then gets baked into all the platforms. It is a messaging apps as well as social media apps. Then, again, i think this is a new departure. But not entirely new. Some companies, character. Ai, for instance, have tried this. We will be leaning into the develop end of ai characters, personae, from jane austen to tom brady. That says a lot about your taste right now. Nick its a big range. Lets as more people start to use tools that sound really exciting i imagine it creates a really robust data set to train these models. Do users have the ability to opt out of they dont want to be part of that training . Nick they do. They have the ability to for instance delete the data w hich they had interacted with ai characters i spoke a lot earlier. Are they an alternative to having a friend . Can you message someone you wish existed and does not. Nick it will be interesting to see. I think the truth is, lets see how people use it. Often, it is the most on export unexpected use cases that really take off. You will be able to bring in these ai personae into a group chat. So, you have a mixture. If you are a group of friends organizing a holiday you will be able to altogether chat with one of these travel agents that is in a ai persona that will be able to give you recommendations in the chapter group. Haidi meadows president of Global Affairs there nick clegg speaking to bloomberg originals. Lets look at how we are setting up this thursday session. What a bit of Downside Pressure to be honest. We do have south korea away on holiday. So, a lack of liquidity is at play there as well. We are seeing downside when it comes to futures trading in sydney, though, potentially, seeing a little bit of a bright spot when it comes to oil producers. Oil jumping to a one year high. We could see some energy names perhaps the outliers there. Broadly speaking across the region shares in asia ahead of early declines, treasuries continuing to sell off despite ok demand out of the 5year note auction. We are seeing kiwi and australian yields surging to the highest level since about 2011. Here in australia, a broad picture of risk aversion across the board. When it comes to the dollar we are watching yen levels getting ever so close to the 150 level for the yen with the dollar touching the highest since november. The weakness in the euro is also to note as well. This is bloomberg