November 6, 2025 • 20 mins
Asian equities fell after Wall Street shares declined, weighed down by concerns over stretched artificial intelligence valuations and signs of a cooling labor market. The MSCI Asia Pacific Index slipped 0.6%, led by declines in Japan, putting the gauge on track for its first drop in three weeks. US equity benchmarks dropped for the second time in three sessions with AI-related stocks such as Nvidia Corp. tumbling, while a closely watched volatility gauge spiked. We heard from Pruksa Iamthongthong, Aberdeen Investments Head of Equities Asia Pacific. She spoke to Bloomberg's Yvonne Man and David Ingles.
Plus - Tesla Inc. shareholders approved a $1 trillion compensation package for Chief Executive Officer Elon Musk, the largest payout ever awarded to a corporate leader. The pay agreement clears a path for Musk, the world's richest person, to become the first-ever trillionaire and expand his stake in Tesla to 25% or more over the next decade. To achieve the full payout, he'll have to deliver on targets to significantly expand Tesla's market value, revive its flagging car business and get the fledgling robotaxi and Optimus robotics efforts off the ground.
And in the US, volatility lashed Wall Street, with strong evidence of a cooling labor market pushing high-valuation tech stocks and crypto to big losses while bonds rallied on bets the Federal Reserve will cut rates. We spoke to Clark Geranen, Chief Investment Officer, CalBay Investments.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:11):
Welcome to the Daybreak Asia Podcast. I'm Doug Chrisner. Equity
markets across the Asia Pacific are slumping on the final
trading day of the week. In South Korea, the COSPY
is on track for a weekly loss of about three percent.
Earlier in the States, equities sold off for the second
time in three days. A lot of concern over valuations.
That's become a major factor, and that's where we started
(00:34):
the conversation with brooksa Iam Tongtong of Aberdeen Investments. She
spoke with Bloomberg TV host Von Men and Dave Dinglace.
Speaker 3 (00:41):
This is coming out a time when people are really
questioning the valuations of some of these sort of AI
tech darlings that really outperform for much of this year.
What has aberbeen been doing in the face of all
is volatility now.
Speaker 4 (00:54):
Yes, so we have been looking at the current earning
seasons very carefully, and as you can Mentionine, we in
the of the tech earning seasons, both for the key
suppliers like Taiwan Career which reported over the.
Speaker 5 (01:06):
Last two weeks, as well as for the US hyper scalers.
Speaker 4 (01:10):
And I think the summary of all the results have
basically shown that things are still looking pretty robust from
a fundamental perspective, and I think the key takeaway is
that where we are today, we are getting increasing visibility
about the growth in twenty twenty six. So actually all
the signs from a fundamental perspective is pointing to a
stronger year in twenty twenty six. I think what's not
(01:32):
very clear is about how will twenty twenty seven shape like.
And the evaluations have run ahead, so I think from
our perspective, given how fast the market have run, that might.
Speaker 5 (01:43):
Be a little bit of a hiccup.
Speaker 4 (01:44):
I wouldn't be surprised with regard to that, but we
will see this as a long term buying optionity because
we do think fundamentals are still stecking up.
Speaker 6 (01:51):
You mentioned some of the AI supply chain markets that
career and time people seem to be looking at AI
evaluations and to be only and I think it's erroneous,
just very extreme versions of it. Right, It's either you're
in a bubble or you're completely depressed. How would you
describe valuations are they? Do you see room for compression?
(02:12):
And might be a separate question, do you think they're overvalued,
which is a somewhat separate question to the first one.
Speaker 5 (02:17):
We don't think they're overvalued.
Speaker 4 (02:19):
We do think they are probably at the fairer stage
than they were at the start of the year, especially
when you look back at the Liberation Day that that
was a big sell off under a very different circumstance.
Speaker 5 (02:31):
So we do think that as long.
Speaker 4 (02:32):
As fundamentals continue to grow and that remains supportive, we
should continue to see valuations go up. I think there
is a bit of a discrepancy between where valuations of
tech companies in Asia and in China are at. But
to say that tech companies in the US are at
and I think from Asia point of view, the relative
valuation that we are having today, that's get a bit
(02:54):
of a buffer while fundamentals remain quite strong. So you
can tell that we are on the positive side of
the trade.
Speaker 3 (03:01):
Okay, in terms of how to play in position around
the AI theme, Now, what sort of advice to clients.
Speaker 4 (03:07):
From our perspective, we do have quite a good position
on a broader perspective. So you have the semiconductor supply chain,
which plays into the infrastructure layer. We look at the
application layer, which people might have forgotten, but China Internet
is actually one of the main players and the key
drivers within the application layer, which we do think that
(03:30):
the ability to monetize what they have invests in the
infrastructure layer is actually very strong.
Speaker 5 (03:35):
You have the.
Speaker 4 (03:35):
Broader ecosystem which you talk about. You know, nowadays you
are starting to see that power is the real bottleneck
as well, and you have the power equipment supply chain,
you have the energy storage system.
Speaker 5 (03:48):
That will be part of the power equipment.
Speaker 4 (03:50):
So we really look at things from a from a
broader perspective rather than just the actual tech sector as
a whole.
Speaker 6 (03:56):
And on side of that, are those still going to
deliver your the the alpha in China? I mean, is
it time to be looking at cyclical or is it
Are you not seeing that in the data just yet?
Speaker 4 (04:06):
I think we are not really seeing that in the
data just yet, but we it's actually looking pretty interesting.
And I think this is really because on the cyclical front,
activities have been quite slow and understandably so given you
know where the terriff situation have been at. Today we
are getting more clarity than than before. And what that
(04:26):
means is that as a business and the companies that
we talked to on this trip as well. They are
looking to continue to their plan and is business as
usual right? Once you have the teriff in place, you
now know how to plan your supply chain and therefore
you will continue to specify out China.
Speaker 5 (04:43):
Tell us about the trip.
Speaker 6 (04:44):
So what's what's the sense you're getting from this when
as you meet clients and companies.
Speaker 4 (04:49):
Yes, so I was in Shanghai and Soujo earlier during
the week hees meeting the team, but also meeting some
of the companies there, and it's a variety of companies.
But I think generally what the companies have been seeing.
I'm on the AI and Semiconductor's site and and what
they are saying continues to be very much what we
(05:11):
have observed in the overall market, which is demand remains
to be pretty strong. Some are in shot supply and
therefore they have to make prepayments.
Speaker 5 (05:20):
And I think that that very.
Speaker 4 (05:21):
Much is a good sign with regard to how tight
the supply chain is. Right, and and those are the
broader you know, data points that you don't get less
you start visiting to companies and then you start talking
about them about all the social data points.
Speaker 5 (05:34):
I was going to ask you about what we saw.
Speaker 3 (05:36):
I mean you starting to see maybe, as you mentioned,
China still offers those AI opportunities coming at a time
when I'm looking at a market like Korea where volatility
is picking up and you know, massive solo for some
is really big names that have done so well, and
in contrast, China actually has been seeing.
Speaker 5 (05:52):
Volatility head lower.
Speaker 3 (05:53):
What is what do these dynamics tell you about what
were best to kind of position and kind of hunger
down as we count down to this year.
Speaker 4 (06:00):
I think it still comes back to fundamentals because what
you have described is really just about a rotation in
the market from you know, things that have gone up
and it's looking slightly more expensive to where things that
have been so off and perhaps have been not looked
very closely. Like I think China volatility has come down,
but from a very high base.
Speaker 5 (06:19):
Yeah, you're still favor career, though we still.
Speaker 4 (06:21):
Favor career and moving career. I think it's not just
about the tech trade.
Speaker 5 (06:24):
In Korea.
Speaker 4 (06:25):
We have the value up trade that has been I
think not talked about much because of the excitement surrounding tech.
But I think if you look at you know, the
Korean financials, the insurance companies or even you know cyclical
like the shipbuilding companies there are really willing to come
up with measures to improve shareholders return as part of
(06:47):
the overall government campaign to really increase their dividend payment.
Speaker 5 (06:51):
So I think we do see quite a.
Speaker 4 (06:52):
Big change there, and we are excited about the value
up opportunities in Korea in addition to the tech.
Speaker 6 (06:57):
Opportunities estion for you, Southeast Asia, what's what's pretty there
going into next year?
Speaker 5 (07:04):
Southeast Asia?
Speaker 4 (07:05):
I think what's pretty is the valuation again a forgotten region.
I'm from Thailand, and Thailand has been one of the
weegest performing market for quite a long period of time
until we have a change in government.
Speaker 5 (07:19):
I think what you see in.
Speaker 4 (07:20):
Southeast Asia is that the positive side of things.
Speaker 5 (07:23):
You have pretty good rates cut.
Speaker 4 (07:25):
Back drop that is going to stimulate the economic growth.
And with that you have the government stepping in in
various countries like Indonesia or Thailand to really drive on
the fiscal front to stimulate the economic growth.
Speaker 5 (07:38):
So we do think things.
Speaker 4 (07:39):
Are looking pretty attractive and growth is coming back supported
by the government.
Speaker 2 (07:44):
That's Proxym Tong Tong of Aberdeen Investments speaking with Bloomberg
TV host Von Mann and David in Glaze bringing it
to you here on the Daybreak Asia podcast. Welcome back
to the Daybreak Asia podcast. I'm deg Krisner. Shareholders in
(08:05):
Tesla approved a one trillion dollar compensation package for CEO
Elon Musk. More than seventy five percent of the votes
were cast in favor. Now this clears the path from
us to expand his stake in Tesla to twenty five
percent over the next decade. Here is Bloomberg's ed ludlow.
Speaker 5 (08:22):
For Elon Musk.
Speaker 7 (08:23):
This was about having more voting power and voting control.
And for those institutional investors that voted no, they were
worried about concentration of voting power that he had and
dilution for them. In the end, voters have overwhelmingly come
out seventy five percent of them all more and said
we're happy to hand over more control to Elon Musk
and keep him in the driver's seat to realize these
(08:45):
longer term goals in robotics in an autonomous driving.
Speaker 2 (08:48):
That was Bloomberg's ed ludlow. Now, to achieve this full payout,
Musk must deliver on targets to significantly expand Tesla's market value.
He must also revive Tesla's our business and get the
company's robotaxi and robotics efforts off the ground. In the
regular session, Tesla shares were down three and a half
percent on a day when US equities sold off for
(09:11):
the second time in three days. For a look at
the market action, I'm joined by Clark Garrinen. He is
the chief market strategist at Calbay Investments. Clark is on
the line from the Bay Area of California. Thank you
so much for making time to chat with me. A
little bit of a pullback today inequities. That there's some
concern shouldn't be a surprise to you that valuations are stretched,
(09:33):
especially when we're talking AI, and perhaps more worrisome for
the market is the fact that breadth has been narrowing.
Are you still constructive on stocks?
Speaker 8 (09:44):
I am still constructive on stocks.
Speaker 1 (09:46):
You know, we have seen sort of this pull back
over the past couple of weeks, and really we've seen
that the sharp spike in the Vicks, But I'm really
not too concerned. We have been bullish really since April
and having seen the tariffs not really have the impact
(10:07):
that we thought they would. I think a lot of
it right now comes down to some of the headline
risk with unemployment numbers and the government shut down, so
that seems to be kind of playing a part in
all of this with the AI bubble, and.
Speaker 8 (10:24):
Talk about the AI bubble.
Speaker 1 (10:26):
I mean, we've still been really constructive on earnings and
where we're going. We're really not even that concerned about
unemployment at this point.
Speaker 8 (10:35):
So overall, yeah, i'd say we are.
Speaker 2 (10:37):
So you mentioned the April low. I think we're up
around thirty six percent from that low. If you look
at the S and P five hundred, that seems like
a pretty big move. And I would imagine statistically that
a pullback maybe of a magnitude between ten to fifteen
percent would not be out of the question.
Speaker 1 (10:58):
And I would say that maybe maybe between five and
ten percent could be where we potentially go. And honestly,
it kind of wasn't expecting that until the beginning of
the year. We just thought that there was still some
more room to run towards the end of the year
with rate cuts and just our seasonality in November and December,
(11:20):
typically we're going to see at least you know, four
to five percent on the positive side, whereas now we've
had rate cuts and the market's just been really trading sideways,
and so I think some of it is just this
fear of like you mentioned the thirty six percent up
since April, and I think some of it's also just
(11:42):
social too, you know, where you hear about Michael Berry
coming out with his puts on specific companies, and I
think that just kind of adds fuel to the fire.
And so that, combined with a lack of data that
we're seeing due to the government shutdown, I think it
(12:02):
kind of puts us back in that little side of
worry where hey, we don't really know where we're at
with inflation and unemployment, and so now we have to
really lean on some of the private data, which typically
just makes investors feel a little bit nervous, and I
think that's why I've seen the VIS run up.
Speaker 2 (12:23):
Yeah, well, I'm glad you mentioned that we had the
data from Challenger, Gray and Christmas today on October job
cuts one hundred and fifty three thousand, a little more
actually nearly triple the number during the same month last year.
Now you mentioned the AI trade, we can get back
to that in a moment. But in terms of what
(12:43):
the data may suggest about the FED and what it
does next. Today's fedspeak was a little hawkish. The head
of the Cleveland FED, Beth Hammock, was saying that inflation.
The head of the Cleveland FED, Beth Hammock, was saying
inflation is a bigger risk than job weakness. And we
heard from Austin and goulesby the head of the Chicago FED,
and he was telling CNBC the lack of inflation data
(13:05):
during the shutdown makes him a little bit uneasy when
it comes to talking about rate cuts. I thought it
was very interesting if you look at what was happening
in money markets yesterday, the odds of a December rate
cut were probably around seventy percent. Today that moved down
to around sixty percent. Again, inflation seems to be the
(13:26):
bigger worry at this point, and I'm wondering whether you
feel the same way.
Speaker 8 (13:32):
You know, I think I do.
Speaker 1 (13:33):
And it's flip flopped over the past six months, where
obviously with tariffs the main concern was going to be inflation,
but over the past few months we've really seen it
kind of hold tight right around three and I think
that is part of the reason why we've seen the
markets just flourish and then kind of shifted more towards
(13:57):
the unemployment numbers as that concern. Okay, tariffs are off
the table, inflation's off the table, and now we got
to look at unemployment. And then I think it was
last week or two weeks ago when Amazon came out
and said that they're going to be laying off thirty
thousand more white collar kind of you know, middle management
level jobs that I think that kind of sparked everyone's
(14:19):
main concern. Meantime, we're not getting any updates on unemployment numbers,
and so that was the main concern. But now, after
hearing some of the Fed governor's talk today that they're
flipping back to inflation, we're really not worried about the
unemployment side, and honestly, we don't think that we need
(14:39):
another rate cut, so we'd be in the camp of saying, yeah,
let's go ahead and pause at the end of the year,
reevaluate once we have additional numbers. So I think inflation
is probably our main point of target right now as
opposed to the unemployment.
Speaker 2 (14:55):
So have you been surprised by the apparent resilience of
the America can economy so far this year.
Speaker 1 (15:03):
Yes, And I think that always stands as just going
back to the consumer. You know, the consumer makes up
two thirds of our GDP. And while some people say,
you know, don't fight the FED, I think it's also true,
don't fight the consumer. And when we see the consumer
continue to spend like like they have been, not necessarily
(15:25):
in a reckless manner, but seeing that continue has been
just great to see, especially from you know, somebody who's
in the industry is just making sure that people are
still continuing to spend. And you know, our clients haven't
had an issue with that, and it's really a key
driver of the economy. So making sure that people are
(15:49):
still able to spend, making sure wage inflation is still
staying above price inflation, I think those are those are
really important for us as just a society, as well
as the GDP.
Speaker 2 (16:01):
Well, I'm glad you mentioned the consumer clerk because Bloomberg
data show the richest ten percent of households are fueling
nearly half half of total US spending. Yes, that's largely
due to the wealth effect. We know that the stock
market has been surging the last few days, kind of
put aside for a moment. But if there is a
(16:22):
more substantial pullback let's say in stocks and the richer
households in the economy kind of curtail they're spending, might
that not set us up for maybe a little bit
of a downturn in the economy. I won't say recession,
but certainly much more in the way of weakness.
Speaker 5 (16:43):
Sure.
Speaker 1 (16:44):
I think that's always the case, you know, is that
I think, like you mentioned, we've seen that number of
top ten percent. It moved from forty percent of the
spending I think ten years ago now to fifty percent
of the spending, and obviously that's not a great trend.
In the heart part is how do we fix that
as a society, And so I think that's kind of
(17:06):
always a risk that's on the table, you know, moving
into next year. If we do see a pullback within equities,
does that mean the high end consumer will stop spending
at the same clip?
Speaker 5 (17:19):
You know?
Speaker 1 (17:20):
Maybe, But at the same time, I'm also really hoping
that we see mortgage rates continue to come down so
that that would be a case for additional cuts just
so that we can see the housing market start to
move around again, because I know that's going to have
an impact on both the high end earner as well
as the low end earner.
Speaker 2 (17:40):
So let's get back to AI as I promised, and
you mentioned Michael Burry's move earlier in the week. He
spent more than a billion dollars to buy some put
options on both Nvidia and Peloton. You're in the Bay area,
tell me what the conversation is like where you are
when it comes to artificial intelligence and whether people are
perhaps a little concerned that things have become maybe a
(18:04):
little extended.
Speaker 1 (18:08):
You know, I do think that a lot of people have,
you know, expressed the fact that they think some things
are extended. I've seen that even with clients. You know,
I had one client that actually placed a trade in
a high end AI name last week and already decided
to jump out of the position this week. And I
(18:29):
think that kind of shows some of the greed and
fear that we're seeing in the markets right now. And
so I think there was a lot of fomo or
the fear of missing out for many clients where they
decide to jump in and then they see a pullback
and everybody just starts.
Speaker 8 (18:46):
To pile on and pull back.
Speaker 1 (18:49):
Based off of some of what you see in the
news like you hear about the Michael Burry position, and
to be honest with that position after it came out,
I believe that those were actually placed a few months ago,
and so for all we know, those could already be
closed out. So it's just interesting how stories like that
(19:10):
can be put around and can have such an impact
on just our general emotions as we see fear and
greed just play into this year, especially so much.
Speaker 2 (19:22):
Clark will leave it there, Thank you so very much.
Clark Garrinon is the chief market strategist at Calba Investments,
joining from the Bay Area of California here on the
Daybreak Asia podcast. Thanks for listening to today's episode of
the Bloomberg Daybreak Asia Edition podcast. Each weekday, we look
at the story shaping markets, finance, and geopolitics in the
(19:45):
Asia Pacific. You can find us on Apple, Spotify, the
Bloomberg Podcast YouTube channel, or anywhere else you listen. Join
us again tomorrow for insight on the market moves from
Hong Kong to Singapore and Australia. I'm Doug Chrisner and
this is Bloomberg.
Speaker 6 (20:08):
Hmm.
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:11):
Welcome to the Daybreak Asia Podcast. I'm Doug Chrisner. Equity
markets across the Asia Pacific are slumping on the final
trading day of the week. In South Korea, the COSPY
is on track for a weekly loss of about three percent.
Earlier in the States, equities sold off for the second
time in three days. A lot of concern over valuations.
That's become a major factor, and that's where we started
(00:34):
the conversation with brooksa Iam Tongtong of Aberdeen Investments. She
spoke with Bloomberg TV host Von Men and Dave Dinglace.
Speaker 3 (00:41):
This is coming out a time when people are really
questioning the valuations of some of these sort of AI
tech darlings that really outperform for much of this year.
What has aberbeen been doing in the face of all
is volatility now.
Speaker 4 (00:54):
Yes, so we have been looking at the current earning
seasons very carefully, and as you can Mentionine, we in
the of the tech earning seasons, both for the key
suppliers like Taiwan Career which reported over the.
Speaker 5 (01:06):
Last two weeks, as well as for the US hyper scalers.
Speaker 4 (01:10):
And I think the summary of all the results have
basically shown that things are still looking pretty robust from
a fundamental perspective, and I think the key takeaway is
that where we are today, we are getting increasing visibility
about the growth in twenty twenty six. So actually all
the signs from a fundamental perspective is pointing to a
stronger year in twenty twenty six. I think what's not
(01:32):
very clear is about how will twenty twenty seven shape like.
And the evaluations have run ahead, so I think from
our perspective, given how fast the market have run, that might.
Speaker 5 (01:43):
Be a little bit of a hiccup.
Speaker 4 (01:44):
I wouldn't be surprised with regard to that, but we
will see this as a long term buying optionity because
we do think fundamentals are still stecking up.
Speaker 6 (01:51):
You mentioned some of the AI supply chain markets that
career and time people seem to be looking at AI
evaluations and to be only and I think it's erroneous,
just very extreme versions of it. Right, It's either you're
in a bubble or you're completely depressed. How would you
describe valuations are they? Do you see room for compression?
(02:12):
And might be a separate question, do you think they're overvalued,
which is a somewhat separate question to the first one.
Speaker 5 (02:17):
We don't think they're overvalued.
Speaker 4 (02:19):
We do think they are probably at the fairer stage
than they were at the start of the year, especially
when you look back at the Liberation Day that that
was a big sell off under a very different circumstance.
Speaker 5 (02:31):
So we do think that as long.
Speaker 4 (02:32):
As fundamentals continue to grow and that remains supportive, we
should continue to see valuations go up. I think there
is a bit of a discrepancy between where valuations of
tech companies in Asia and in China are at. But
to say that tech companies in the US are at
and I think from Asia point of view, the relative
valuation that we are having today, that's get a bit
(02:54):
of a buffer while fundamentals remain quite strong. So you
can tell that we are on the positive side of
the trade.
Speaker 3 (03:01):
Okay, in terms of how to play in position around
the AI theme, Now, what sort of advice to clients.
Speaker 4 (03:07):
From our perspective, we do have quite a good position
on a broader perspective. So you have the semiconductor supply chain,
which plays into the infrastructure layer. We look at the
application layer, which people might have forgotten, but China Internet
is actually one of the main players and the key
drivers within the application layer, which we do think that
(03:30):
the ability to monetize what they have invests in the
infrastructure layer is actually very strong.
Speaker 5 (03:35):
You have the.
Speaker 4 (03:35):
Broader ecosystem which you talk about. You know, nowadays you
are starting to see that power is the real bottleneck
as well, and you have the power equipment supply chain,
you have the energy storage system.
Speaker 5 (03:48):
That will be part of the power equipment.
Speaker 4 (03:50):
So we really look at things from a from a
broader perspective rather than just the actual tech sector as
a whole.
Speaker 6 (03:56):
And on side of that, are those still going to
deliver your the the alpha in China? I mean, is
it time to be looking at cyclical or is it
Are you not seeing that in the data just yet?
Speaker 4 (04:06):
I think we are not really seeing that in the
data just yet, but we it's actually looking pretty interesting.
And I think this is really because on the cyclical front,
activities have been quite slow and understandably so given you
know where the terriff situation have been at. Today we
are getting more clarity than than before. And what that
(04:26):
means is that as a business and the companies that
we talked to on this trip as well. They are
looking to continue to their plan and is business as
usual right? Once you have the teriff in place, you
now know how to plan your supply chain and therefore
you will continue to specify out China.
Speaker 5 (04:43):
Tell us about the trip.
Speaker 6 (04:44):
So what's what's the sense you're getting from this when
as you meet clients and companies.
Speaker 4 (04:49):
Yes, so I was in Shanghai and Soujo earlier during
the week hees meeting the team, but also meeting some
of the companies there, and it's a variety of companies.
But I think generally what the companies have been seeing.
I'm on the AI and Semiconductor's site and and what
they are saying continues to be very much what we
(05:11):
have observed in the overall market, which is demand remains
to be pretty strong. Some are in shot supply and
therefore they have to make prepayments.
Speaker 5 (05:20):
And I think that that very.
Speaker 4 (05:21):
Much is a good sign with regard to how tight
the supply chain is. Right, and and those are the
broader you know, data points that you don't get less
you start visiting to companies and then you start talking
about them about all the social data points.
Speaker 5 (05:34):
I was going to ask you about what we saw.
Speaker 3 (05:36):
I mean you starting to see maybe, as you mentioned,
China still offers those AI opportunities coming at a time
when I'm looking at a market like Korea where volatility
is picking up and you know, massive solo for some
is really big names that have done so well, and
in contrast, China actually has been seeing.
Speaker 5 (05:52):
Volatility head lower.
Speaker 3 (05:53):
What is what do these dynamics tell you about what
were best to kind of position and kind of hunger
down as we count down to this year.
Speaker 4 (06:00):
I think it still comes back to fundamentals because what
you have described is really just about a rotation in
the market from you know, things that have gone up
and it's looking slightly more expensive to where things that
have been so off and perhaps have been not looked
very closely. Like I think China volatility has come down,
but from a very high base.
Speaker 5 (06:19):
Yeah, you're still favor career, though we still.
Speaker 4 (06:21):
Favor career and moving career. I think it's not just
about the tech trade.
Speaker 5 (06:24):
In Korea.
Speaker 4 (06:25):
We have the value up trade that has been I
think not talked about much because of the excitement surrounding tech.
But I think if you look at you know, the
Korean financials, the insurance companies or even you know cyclical
like the shipbuilding companies there are really willing to come
up with measures to improve shareholders return as part of
(06:47):
the overall government campaign to really increase their dividend payment.
Speaker 5 (06:51):
So I think we do see quite a.
Speaker 4 (06:52):
Big change there, and we are excited about the value
up opportunities in Korea in addition to the tech.
Speaker 6 (06:57):
Opportunities estion for you, Southeast Asia, what's what's pretty there
going into next year?
Speaker 5 (07:04):
Southeast Asia?
Speaker 4 (07:05):
I think what's pretty is the valuation again a forgotten region.
I'm from Thailand, and Thailand has been one of the
weegest performing market for quite a long period of time
until we have a change in government.
Speaker 5 (07:19):
I think what you see in.
Speaker 4 (07:20):
Southeast Asia is that the positive side of things.
Speaker 5 (07:23):
You have pretty good rates cut.
Speaker 4 (07:25):
Back drop that is going to stimulate the economic growth.
And with that you have the government stepping in in
various countries like Indonesia or Thailand to really drive on
the fiscal front to stimulate the economic growth.
Speaker 5 (07:38):
So we do think things.
Speaker 4 (07:39):
Are looking pretty attractive and growth is coming back supported
by the government.
Speaker 2 (07:44):
That's Proxym Tong Tong of Aberdeen Investments speaking with Bloomberg
TV host Von Mann and David in Glaze bringing it
to you here on the Daybreak Asia podcast. Welcome back
to the Daybreak Asia podcast. I'm deg Krisner. Shareholders in
(08:05):
Tesla approved a one trillion dollar compensation package for CEO
Elon Musk. More than seventy five percent of the votes
were cast in favor. Now this clears the path from
us to expand his stake in Tesla to twenty five
percent over the next decade. Here is Bloomberg's ed ludlow.
Speaker 5 (08:22):
For Elon Musk.
Speaker 7 (08:23):
This was about having more voting power and voting control.
And for those institutional investors that voted no, they were
worried about concentration of voting power that he had and
dilution for them. In the end, voters have overwhelmingly come
out seventy five percent of them all more and said
we're happy to hand over more control to Elon Musk
and keep him in the driver's seat to realize these
(08:45):
longer term goals in robotics in an autonomous driving.
Speaker 2 (08:48):
That was Bloomberg's ed ludlow. Now, to achieve this full payout,
Musk must deliver on targets to significantly expand Tesla's market value.
He must also revive Tesla's our business and get the
company's robotaxi and robotics efforts off the ground. In the
regular session, Tesla shares were down three and a half
percent on a day when US equities sold off for
(09:11):
the second time in three days. For a look at
the market action, I'm joined by Clark Garrinen. He is
the chief market strategist at Calbay Investments. Clark is on
the line from the Bay Area of California. Thank you
so much for making time to chat with me. A
little bit of a pullback today inequities. That there's some
concern shouldn't be a surprise to you that valuations are stretched,
(09:33):
especially when we're talking AI, and perhaps more worrisome for
the market is the fact that breadth has been narrowing.
Are you still constructive on stocks?
Speaker 8 (09:44):
I am still constructive on stocks.
Speaker 1 (09:46):
You know, we have seen sort of this pull back
over the past couple of weeks, and really we've seen
that the sharp spike in the Vicks, But I'm really
not too concerned. We have been bullish really since April
and having seen the tariffs not really have the impact
(10:07):
that we thought they would. I think a lot of
it right now comes down to some of the headline
risk with unemployment numbers and the government shut down, so
that seems to be kind of playing a part in
all of this with the AI bubble, and.
Speaker 8 (10:24):
Talk about the AI bubble.
Speaker 1 (10:26):
I mean, we've still been really constructive on earnings and
where we're going. We're really not even that concerned about
unemployment at this point.
Speaker 8 (10:35):
So overall, yeah, i'd say we are.
Speaker 2 (10:37):
So you mentioned the April low. I think we're up
around thirty six percent from that low. If you look
at the S and P five hundred, that seems like
a pretty big move. And I would imagine statistically that
a pullback maybe of a magnitude between ten to fifteen
percent would not be out of the question.
Speaker 1 (10:58):
And I would say that maybe maybe between five and
ten percent could be where we potentially go. And honestly,
it kind of wasn't expecting that until the beginning of
the year. We just thought that there was still some
more room to run towards the end of the year
with rate cuts and just our seasonality in November and December,
(11:20):
typically we're going to see at least you know, four
to five percent on the positive side, whereas now we've
had rate cuts and the market's just been really trading sideways,
and so I think some of it is just this
fear of like you mentioned the thirty six percent up
since April, and I think some of it's also just
(11:42):
social too, you know, where you hear about Michael Berry
coming out with his puts on specific companies, and I
think that just kind of adds fuel to the fire.
And so that, combined with a lack of data that
we're seeing due to the government shutdown, I think it
(12:02):
kind of puts us back in that little side of
worry where hey, we don't really know where we're at
with inflation and unemployment, and so now we have to
really lean on some of the private data, which typically
just makes investors feel a little bit nervous, and I
think that's why I've seen the VIS run up.
Speaker 2 (12:23):
Yeah, well, I'm glad you mentioned that we had the
data from Challenger, Gray and Christmas today on October job
cuts one hundred and fifty three thousand, a little more
actually nearly triple the number during the same month last year.
Now you mentioned the AI trade, we can get back
to that in a moment. But in terms of what
(12:43):
the data may suggest about the FED and what it
does next. Today's fedspeak was a little hawkish. The head
of the Cleveland FED, Beth Hammock, was saying that inflation.
The head of the Cleveland FED, Beth Hammock, was saying
inflation is a bigger risk than job weakness. And we
heard from Austin and goulesby the head of the Chicago FED,
and he was telling CNBC the lack of inflation data
(13:05):
during the shutdown makes him a little bit uneasy when
it comes to talking about rate cuts. I thought it
was very interesting if you look at what was happening
in money markets yesterday, the odds of a December rate
cut were probably around seventy percent. Today that moved down
to around sixty percent. Again, inflation seems to be the
(13:26):
bigger worry at this point, and I'm wondering whether you
feel the same way.
Speaker 8 (13:32):
You know, I think I do.
Speaker 1 (13:33):
And it's flip flopped over the past six months, where
obviously with tariffs the main concern was going to be inflation,
but over the past few months we've really seen it
kind of hold tight right around three and I think
that is part of the reason why we've seen the
markets just flourish and then kind of shifted more towards
(13:57):
the unemployment numbers as that concern. Okay, tariffs are off
the table, inflation's off the table, and now we got
to look at unemployment. And then I think it was
last week or two weeks ago when Amazon came out
and said that they're going to be laying off thirty
thousand more white collar kind of you know, middle management
level jobs that I think that kind of sparked everyone's
(14:19):
main concern. Meantime, we're not getting any updates on unemployment numbers,
and so that was the main concern. But now, after
hearing some of the Fed governor's talk today that they're
flipping back to inflation, we're really not worried about the
unemployment side, and honestly, we don't think that we need
(14:39):
another rate cut, so we'd be in the camp of saying, yeah,
let's go ahead and pause at the end of the year,
reevaluate once we have additional numbers. So I think inflation
is probably our main point of target right now as
opposed to the unemployment.
Speaker 2 (14:55):
So have you been surprised by the apparent resilience of
the America can economy so far this year.
Speaker 1 (15:03):
Yes, And I think that always stands as just going
back to the consumer. You know, the consumer makes up
two thirds of our GDP. And while some people say,
you know, don't fight the FED, I think it's also true,
don't fight the consumer. And when we see the consumer
continue to spend like like they have been, not necessarily
(15:25):
in a reckless manner, but seeing that continue has been
just great to see, especially from you know, somebody who's
in the industry is just making sure that people are
still continuing to spend. And you know, our clients haven't
had an issue with that, and it's really a key
driver of the economy. So making sure that people are
(15:49):
still able to spend, making sure wage inflation is still
staying above price inflation, I think those are those are
really important for us as just a society, as well
as the GDP.
Speaker 2 (16:01):
Well, I'm glad you mentioned the consumer clerk because Bloomberg
data show the richest ten percent of households are fueling
nearly half half of total US spending. Yes, that's largely
due to the wealth effect. We know that the stock
market has been surging the last few days, kind of
put aside for a moment. But if there is a
(16:22):
more substantial pullback let's say in stocks and the richer
households in the economy kind of curtail they're spending, might
that not set us up for maybe a little bit
of a downturn in the economy. I won't say recession,
but certainly much more in the way of weakness.
Speaker 5 (16:43):
Sure.
Speaker 1 (16:44):
I think that's always the case, you know, is that
I think, like you mentioned, we've seen that number of
top ten percent. It moved from forty percent of the
spending I think ten years ago now to fifty percent
of the spending, and obviously that's not a great trend.
In the heart part is how do we fix that
as a society, And so I think that's kind of
(17:06):
always a risk that's on the table, you know, moving
into next year. If we do see a pullback within equities,
does that mean the high end consumer will stop spending
at the same clip?
Speaker 5 (17:19):
You know?
Speaker 1 (17:20):
Maybe, But at the same time, I'm also really hoping
that we see mortgage rates continue to come down so
that that would be a case for additional cuts just
so that we can see the housing market start to
move around again, because I know that's going to have
an impact on both the high end earner as well
as the low end earner.
Speaker 2 (17:40):
So let's get back to AI as I promised, and
you mentioned Michael Burry's move earlier in the week. He
spent more than a billion dollars to buy some put
options on both Nvidia and Peloton. You're in the Bay area,
tell me what the conversation is like where you are
when it comes to artificial intelligence and whether people are
perhaps a little concerned that things have become maybe a
(18:04):
little extended.
Speaker 1 (18:08):
You know, I do think that a lot of people have,
you know, expressed the fact that they think some things
are extended. I've seen that even with clients. You know,
I had one client that actually placed a trade in
a high end AI name last week and already decided
to jump out of the position this week. And I
(18:29):
think that kind of shows some of the greed and
fear that we're seeing in the markets right now. And
so I think there was a lot of fomo or
the fear of missing out for many clients where they
decide to jump in and then they see a pullback
and everybody just starts.
Speaker 8 (18:46):
To pile on and pull back.
Speaker 1 (18:49):
Based off of some of what you see in the
news like you hear about the Michael Burry position, and
to be honest with that position after it came out,
I believe that those were actually placed a few months ago,
and so for all we know, those could already be
closed out. So it's just interesting how stories like that
(19:10):
can be put around and can have such an impact
on just our general emotions as we see fear and
greed just play into this year, especially so much.
Speaker 2 (19:22):
Clark will leave it there, Thank you so very much.
Clark Garrinon is the chief market strategist at Calba Investments,
joining from the Bay Area of California here on the
Daybreak Asia podcast. Thanks for listening to today's episode of
the Bloomberg Daybreak Asia Edition podcast. Each weekday, we look
at the story shaping markets, finance, and geopolitics in the
(19:45):
Asia Pacific. You can find us on Apple, Spotify, the
Bloomberg Podcast YouTube channel, or anywhere else you listen. Join
us again tomorrow for insight on the market moves from
Hong Kong to Singapore and Australia. I'm Doug Chrisner and
this is Bloomberg.
Speaker 6 (20:08):
Hmm.
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