July 15, 2025 • 18 mins
Asian stocks moved lower in the early Wednesday session after relatively tame inflation data failed to ease Wall Street's worries about the impacts of tariffs, with initial rallies in US stocks and bonds sputtering on bets the Federal Reserve will keep rates on hold for now. The S&P 500 retreated after earlier topping 6,300. A gauge of US financial giants sank as Wells Fargo & Co. cut its guidance for net interest income. JPMorgan Chase & Co. dropped even as investment bankers eked out a surprise gain. Citigroup Inc. hit the highest since 2008 on a stock-buyback plan. While short-dated Treasuries led losses, longer maturities also slid - with 30-year yields topping 5%. We get reaction to the day's market action from Chuck Cumello, President and Chief Executive Officer at Essex Financial Services.
Plus - Nvidia said late Monday that it received assurances that the US government would allow it to export some chips to China. Advanced Micro Devices, Nvidia's chief rival, quickly followed with a similar announcement. These export license approvals could generate billions of dollars in total revenue for the companies this year — and they mark a dramatic reversal after the Trump administration said the issue wasn't even up for debate. We take a closer look at what it means for the chip sector with Ray Wang, Research Director for Semiconductors, Supply Chain, & Emerging Tech at The Futurum Group. He speaks with Bloomberg's Haidi Stroud-Watts and Paul Allen on The Asia Trade.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:10):
Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Prisoner.
Markets in the Asia Pacific will be playing off a
mixed day for US equities. Of the eleven industry groups
within the S and P five hundred, only one was
positive information tech and that was due to news on
Nvidia and Advanced micro Devices resuming some chip sales to China.
(00:30):
We'll take a closer look at that story when we
catch up with Ray Wang at the Futureum Group, but
we begin with market action in the States. Joining me
now is Chuck Camillo. He is president and CEO at
Essex Financial Services. He's on the line from Essex, Connecticut. Chuck,
thank you so much for taking time to chat with me.
I'm curious as to what you're hearing from clients these
(00:51):
days in the current environment.
Speaker 3 (00:53):
Sure teb Well, thank you so much for having me.
Speaker 4 (00:55):
Yeah, I mean, we've just gone through a heck of
three months in change, all away from Liberation Day and
a twenty percent sell off in the market to where
we are now. Where Monday mark the sixty fifth trading
day from the below in April and the S and
P five hundreds of twenty six percent, So you know,
clients were a little bit whipsawed, but I would say
(01:16):
buy and large. They you know, stayed the course and
we did a lot of work, you know, a lot
of handholding and trying to explain things, and you know,
we made sure people tried to focus on the long term.
But people are generally, you know, in a good place
right now, certainly with positive moves in the market since
April obviously, but you know, this has been the most
(01:40):
you know, I'm trying to get right word that the
most extreme views based on someone's politics in terms of
the market. You know, people's politics always tend to drive
what they think, but it's never been more extreme than
we're seeing it right now, which I which I guess
is a reflection of the.
Speaker 3 (01:55):
Country writ large.
Speaker 4 (01:56):
But generally though people are doing well, stayed the course
and you know, are where seeing people updug just to
expect more volatility. You know, it's going to be a
bumpy ride, but there's a lot of challenges ahead and
there's all some good things add so we will see.
Speaker 2 (02:11):
So we had this reading on consumer inflation this morning
for the month of June, relatively tame reading. But I
think the street is still worried about the potential inflationary
impacts of the tariffs. Is that something that you share
right now when you look at the tariff story.
Speaker 4 (02:26):
Yeah, I think everybody's concerned about that because anecdotally, right,
I mean, a tariff is attacks, it obviously is inflationary.
Speaker 3 (02:35):
However, you know, the more.
Speaker 4 (02:36):
Time that goes by since April when these very high
tariffs were initially rolled out and then rolled back, you know,
companies have proven to be very nimble and sort of
getting their heads around how best to handle this. But
you know, inflation is one of the worst things that
can happen in an economy. It also drives so many
things regarding interest rates and the bigger picture that higher
(02:59):
rates versus lower rates have, and then throw in rates
with President Trump and Drome Powell and all the noise
that comes with that, and it just continues to cause
a cause uncertainty. Personally, I don't think we see inflation
skyrocketing by any stretch. I think even this past monthly number,
(03:19):
you had some things that were more terrorf sensitive, such
as a parel rise, but you had that offset by
reductions and car prices in airlines. So I think we're
just sort of going to bounce around here in this range.
But the bottom line, it was up. I don't think
anybody was surprised by that. It was in line with expectations.
But listen, higher inflation is a headwind in just about
every area. But you know, companies, the economy have been
(03:42):
extremely healthy, extremely resilient, and we're optimistic that at the
end of the day, you know, teriffstonetally help anybody. I
think we'll get hopefully to a more normalized place and
then we can continue to try to grow this market
and grow this economy.
Speaker 2 (03:55):
So markets seem to be pricing in somewhat lower odds
of more than one rate cut this year. How do
you see the Fed proceeding between now in year's end.
Speaker 4 (04:05):
Yeah, and they especially with this most recent inflation report.
I mean, they have certainly every reason to wait. There's
no clear direction in terms of what you know, Well, listen,
we're going to get PEPI tomorrow, which will be interesting,
but there's certainly no hard evidence for proof that we're
through this and that you know, the FED can say, okay, great,
(04:25):
all clear, We'll start cutting rates. They don't want to
make the same mistake, right, they made the big transitory
mistake coming out of COVID.
Speaker 3 (04:33):
They absolutely don't.
Speaker 4 (04:35):
Want to have to They don't want to make the
mistake of cutting rates and then all of a sudden
inflation just jumps and they got to vent raise rates.
Speaker 3 (04:41):
That's the absolute nightmare scenario.
Speaker 4 (04:43):
But at the same time, they can't just cut rates
for the sake of cutting rates. I mean, you got
to be careful what you asked for. Last year, the
Fed cut rates one hundred basis points right September November December,
and the ten year treasury went from three point six
percent to four point eight percent. So if the market does,
if the market doesn't agree that the move is the
right move, it's going to reject it. And I think
(05:04):
that's the big risks out there in terms of the
bond market, which again I think was one of the
big reasons why President Trump rolled back the tariffs that
he rolled out in the beginning of April.
Speaker 2 (05:13):
So we had some bank earnings this morning, kind of
a mixed bag. JP Morgan Chase with a surprise gain
and investment banking income and if you look what what
City Group had to say, revenue from fixed income trading
was pretty robust wells Fargo, on the other hand, cut
its guidance for net interest income. How are you feeling
about the financials broadly?
Speaker 4 (05:34):
I think broadly we feel really good about him. You know,
this type of environment generally abodes well for them. I
think I think your phrase mixed bag sums it up
perfectly right. JP Morgan's report is actually pretty good. They
dropped a little bit today. City has been such a
challenging mess for so many years. You know that the
stock buyback they announced as well was a big thing.
And I think the news with JP Morgan in terms
(05:56):
of about the better results coming out of investment banking
hopefull bodes well for the overall market in terms of
more deals and things being done, especially maybe with the
hope of some deregulation coming down the pike. So overall,
you know, we're we're bullish on financials, but as in
any sector, you're going to have some that outperform, and
you're gonna have some that you know, trip.
Speaker 3 (06:14):
All over themselves.
Speaker 4 (06:15):
But overall, financials should have done well this year, and
hopefully we'll continue to do so.
Speaker 2 (06:20):
We had a lot of positivity when it came to
tech today, the big news was in Nvidia and AMD
saying that they're going to be able to resume some
chip sales to China. This is obviously all a part
of the AI theme. And at the same time today
we had President Trump in Pennsylvania talking about a big
project for AI and also energy development that would be
(06:42):
used to power those data centers. This is obviously a
trade that's still getting a lot of attention. I'm curious, Chuck,
as to how you're playing it.
Speaker 3 (06:50):
Yeah, boy, it sure is getting some attention, right.
Speaker 4 (06:53):
You think about where Nvidia was, you know, beginning of
April there, you know, traded you know, well below one
hundred dollar and it's a one seventy and one seventy.
I think you closed that today. You know I've mentioned
to you before. I think you you don't own tech
at your own peril. I mean, I think it is
an unbelievable time in you know, the country and in
(07:14):
the world's history in terms of whatever is about to
come with AI.
Speaker 3 (07:19):
Uh, the level.
Speaker 4 (07:20):
And the impact that will probably have on everybody's lives
over the next ten to fifteen years. You know, we
were having a discussion about you know, you never thought
about all the things that would change in your life
and to make things easier and better, and certainly the
rest of challenges. You know, when the iPhone came out
and the internet launched, right, I mean thinking about Google
Maps or you know, door Dash or pick any app
(07:41):
you choose, of how that's impacted every single person's life.
We're we seem to be on the cusp of that,
and so I think you're going to have volatility. I
think that volatility is an opportunity to buy. But these
these cutting edge leading, you know, American companies, you know,
I think it's something you certainly want to own.
Speaker 2 (07:59):
Do you think think we're closer to some type of
resolution when it comes to these various trade deals? And
we had an announcement today from President Trump on a
trade deal with Indonesia. Obviously China when you look at Asia,
is the big wild card here. But I'm wondering whether
we're beginning to get a little bit of relief in markets.
Speaker 4 (08:17):
Yeah, you know, boy, I wish I knew the answer
for that one, for sure. I think the safest thing
to say is we're closer to some sort of conclusion
than we were before, you know, and who knows in
terms of this agreement with Nvidia being allowed to sell
these chips to China, if that's part of a bigger picture,
bide into getting these rare earths out of China. I mean,
so the way that we view it is it's gotten
(08:39):
better now. You and I both know I could change
on a dime with a tweet or whatever it might be.
But I think the reason that the market has run
so much, and the reason there is this more optimistic
feeling is that we saw the worst. I don't think
back at being in April. I don't think we ever
go back to that. And I think it's also in
no one's best interest to have these tariffs that are
to bilititting to everybody. So hopefully, you know, there's negotiations
(09:04):
that occur to get us to a better place and
wrap this up. But it certainly seems like and I
think the news flow and some of the things that
have come out of this that do prove that out
that we're getting closer to it and then we can
get to a better place so that at least this
part of the volatility in the market tamps down and
you don't have to be on the edge of your
seat every day waiting for some sort of press release
or tweet or something on truth social.
Speaker 2 (09:25):
Are you still primarily focused on looking for opportunity in
the US or are you more curious about things offshore
these days.
Speaker 4 (09:32):
No, we've always you know, we've always had us leave
of client assets that we look to invest outside the US.
I mean, I think the average US investor has always
historically been underweight non US investments, and quite candidly performance
wise for good reason.
Speaker 3 (09:47):
But look, if you look at.
Speaker 4 (09:48):
The MSCI e FA Index over the past three years,
it's outperformed the Dow, It's outperformed the Russell two thousand,
and you know, it's still trailing obviously NASDAK and the
S and P. But it's combat very wrong. But no,
we're we constantly do look there, whether it's through mutual
funds with great managers or ETFs to play the non
US side of things, and that also includes emerging markets,
(10:09):
but to a to a smaller percentage for the average client.
Speaker 2 (10:12):
What about the US bond market or US treasuries.
Speaker 4 (10:15):
Yeah, listen, treasury bills are a great place to hide out.
I mean we've we've we've done a ton of them.
I mean that that's the million dollar question what happens
with rates, and I think there certainly is some concern
there that depending upon what happens with you know, you know,
hopefully there's not you know, we don't all of a
sudden wake up in President Trump's fire chair, Powell, but
(10:36):
no treasuries, you know, were born change on treasury bills
or a great place for clients to hide out. We
had a great municipal manager in the office today talking
to us about the municipal market. We think there's a
lot of opportunities there and the intermediate range of maturities,
so no, we think it is the right opportunity. But
you know, I think equities obviously a longer term give
you more volatility but a greater return. But for somebody
(10:57):
that's a little bit more conservative or looking for a hedge,
I think fixed income now with these rates and with
these coupons in this raid environment, do give you a
much more give you much more cushion than you got
years ago.
Speaker 2 (11:08):
Chuck will leave it there. It's always a pleasure, Thank
you so very much. Chuck Camello there. He is president
also the CEO at Essex Financial Services. On the line
from Essex, Connecticut here on the Daybreak Asia Podcast. Welcome
back to the Daybreak Asia Podcast. I'm dek Krisner. Nvidia
(11:30):
and Advanced micro Devices are planning to resume sales of
some AI chips in China. These companies say they've been
given assurances from the Trump administration that such shipments will
be approved. The key issue here is the necessary licenses,
and in the case of Nvidia, it's the H twenty
artificial intelligence accelerator. This move, by the way, could add
(11:52):
billions of dollars to Nvidia's revenue this year. For a
closer look, we heard from Ray Wong. He is research
director at the few Terum Group. Ray spoke earlier with
Bloomberg's HEII Stroud Watts and Paul Allen.
Speaker 5 (12:05):
Right, thanks so much for joining us. I just wonder
if you can explain fir US what you see as
being the impact on the video's bottom line considering this reversal.
I mean, previously it was selling about fifteen billion dollars
worth of chips to China. Can those sorts of numbers
be recaptured?
Speaker 3 (12:22):
Hi boy, hey Gred morning.
Speaker 6 (12:23):
Yeah, definitely, this is a huge news, not just for
MDIA and also for AMVA, potentially auto chip makers. Right
in April, there's a new informulator from BAS that restricted
H twenty five media and autoships that have similar capabilities
in terms of memory, bandwidth and networking speed.
Speaker 3 (12:40):
This is huge for a.
Speaker 6 (12:41):
Media because now they can re enter Chinese market with
their H twenty ships and also the upcoming P thirty
or RTX six thousand D ships they're going to China,
and this is significant offsites.
Speaker 3 (12:56):
Here in Forturing we.
Speaker 6 (12:57):
Model together between B thirty and also H twenty that
could bring potessional, potentially additional seven to eight billion revenue
a quarter for NBDIA and this is huge.
Speaker 5 (13:10):
Well, if history shown us anything it's that the Trump
White House can be somewhat mercurial in terms of its
decision making. How much confidence can Nvidia have van imd
that this reversal is going to be permanent, that it
won't be reversed again.
Speaker 6 (13:24):
Yeah, I see this policy shift is relatively permanent in
a way that this is number one, this is part
of the negotiation with US and China. And I see
there's a policy aliement between n media and also the
current strong administration because remember back into April, there's a
contentious intension between administration and media because they couldn't really
figure out the controversy around h twenty. But right now
(13:49):
after the policy ship, I see more policy aliment between media,
the Trump Minstration and also other airtion makers.
Speaker 1 (13:57):
Right, you're seeing on our screens at the moment top
three percent of making up three percent of total global market.
Speaker 3 (14:03):
Cup.
Speaker 1 (14:04):
How much bigger can this company get given the presumed
presumption of business in this key market.
Speaker 6 (14:10):
Yeah, I think there's a still significant upside right right now,
we'll talk about in a let's say, in Q three
and Q four, right, we'll talk about additional seven to
eight billion revenue coming off from China, and you know,
throughout the rest of the twenty twenty five we'll talk
about fifteen to twenty billion in the second half this
year and moving forward in twenty twenty six. I believe
(14:31):
there's your strong AI demand in terms of a training
AI inference coming on from China because we are seeing
significant and rapidly developments in Chinese AI landscape.
Speaker 1 (14:42):
Another way I'm looking at it is just how big
video is when it comes to some very very big countries.
This start showing that video is larger than Canada. If
it adds another trillion in market cup it would be
contending with the size of India as well.
Speaker 3 (14:56):
Pole sort of.
Speaker 1 (14:58):
Talked about some of the you know, policy uncertainties from
the Trump administration. We know that, you know that is
a tendency for this administration, but how much of this
is really a watershed moment for Chinese policy makers. Does
the sort of argument that the White House is making
in terms of the advantages to the US make sense
to you?
Speaker 6 (15:19):
I think it actually makes sense because this really complicates
two things. Number One, when you have more Amedia chips
right now, going back to China, it's actually marginalized. A
lot of Chinese domestic chip makers, including Huawei, can become
higen inframe. All those domestic air chimmakers, right they really marginalized,
marginalize their potential market in China. Right from a Beating's perspective,
(15:44):
this will make the self sufficiency self sufficiency pushed in
air chips even harder because right now there will be
still significant reliance on a media MD solutions in terms
of air hardware.
Speaker 5 (15:58):
How long is that situation going to endure? Though, Because
while those curves were in place, we saw China becoming
very creative and not just finding ways to circumvent them,
but also nurturing its own homegrown version of this. Are
there any equivalents saw better than the Age twenty chip,
either in production and development in China?
Speaker 6 (16:17):
Well, I think in terms of Age twenty given the
memory bandwidth importance for AI inference, I think for now
there's not much solutions right in China that is comparable
to n media. But this reflect to an media's sort
of media and long term concern, right, because essentially they
can only sell chips that under the new Asper control
thrashold right, So in the long term, I do think
(16:40):
there's a concern that there will be other competitors against ANBDIA.
But I think for now in China and media is
still well, you know, maintaining its technological and market leadership.
Speaker 1 (16:50):
Is this a game changer for some of the homegrown
AI then the likes of deep.
Speaker 6 (16:54):
Sick, Yeah, I think it's definitely. The ones for number
one did give them more computes, right, But this is
the the chips that is one at least one generation
behind blickwell, right, and you know, if you look at
a computational performance and mary bangweb is really not compare
comparable to the current ships that most of the US
companies are using. And I think another thing is this
(17:17):
really complicates a lot of domestic Chinese ship makers because
essentially they want to fulfill the market's share their lab media.
But right now Amedia coming back to the market, I
think that makes things a lot more difficult.
Speaker 1 (17:31):
Right, Really great to have you with us, very well,
Research director for Semiconductor, Supply Chain and Emerging Tech at
the Food From Group.
Speaker 2 (17:39):
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 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 Kong to
(18:00):
Singapore and Australia. I'm Doug Prisoner and this is Bloomberg
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:10):
Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Prisoner.
Markets in the Asia Pacific will be playing off a
mixed day for US equities. Of the eleven industry groups
within the S and P five hundred, only one was
positive information tech and that was due to news on
Nvidia and Advanced micro Devices resuming some chip sales to China.
(00:30):
We'll take a closer look at that story when we
catch up with Ray Wang at the Futureum Group, but
we begin with market action in the States. Joining me
now is Chuck Camillo. He is president and CEO at
Essex Financial Services. He's on the line from Essex, Connecticut. Chuck,
thank you so much for taking time to chat with me.
I'm curious as to what you're hearing from clients these
(00:51):
days in the current environment.
Speaker 3 (00:53):
Sure teb Well, thank you so much for having me.
Speaker 4 (00:55):
Yeah, I mean, we've just gone through a heck of
three months in change, all away from Liberation Day and
a twenty percent sell off in the market to where
we are now. Where Monday mark the sixty fifth trading
day from the below in April and the S and
P five hundreds of twenty six percent, So you know,
clients were a little bit whipsawed, but I would say
(01:16):
buy and large. They you know, stayed the course and
we did a lot of work, you know, a lot
of handholding and trying to explain things, and you know,
we made sure people tried to focus on the long term.
But people are generally, you know, in a good place
right now, certainly with positive moves in the market since
April obviously, but you know, this has been the most
(01:40):
you know, I'm trying to get right word that the
most extreme views based on someone's politics in terms of
the market. You know, people's politics always tend to drive
what they think, but it's never been more extreme than
we're seeing it right now, which I which I guess
is a reflection of the.
Speaker 3 (01:55):
Country writ large.
Speaker 4 (01:56):
But generally though people are doing well, stayed the course
and you know, are where seeing people updug just to
expect more volatility. You know, it's going to be a
bumpy ride, but there's a lot of challenges ahead and
there's all some good things add so we will see.
Speaker 2 (02:11):
So we had this reading on consumer inflation this morning
for the month of June, relatively tame reading. But I
think the street is still worried about the potential inflationary
impacts of the tariffs. Is that something that you share
right now when you look at the tariff story.
Speaker 4 (02:26):
Yeah, I think everybody's concerned about that because anecdotally, right,
I mean, a tariff is attacks, it obviously is inflationary.
Speaker 3 (02:35):
However, you know, the more.
Speaker 4 (02:36):
Time that goes by since April when these very high
tariffs were initially rolled out and then rolled back, you know,
companies have proven to be very nimble and sort of
getting their heads around how best to handle this. But
you know, inflation is one of the worst things that
can happen in an economy. It also drives so many
things regarding interest rates and the bigger picture that higher
(02:59):
rates versus lower rates have, and then throw in rates
with President Trump and Drome Powell and all the noise
that comes with that, and it just continues to cause
a cause uncertainty. Personally, I don't think we see inflation
skyrocketing by any stretch. I think even this past monthly number,
(03:19):
you had some things that were more terrorf sensitive, such
as a parel rise, but you had that offset by
reductions and car prices in airlines. So I think we're
just sort of going to bounce around here in this range.
But the bottom line, it was up. I don't think
anybody was surprised by that. It was in line with expectations.
But listen, higher inflation is a headwind in just about
every area. But you know, companies, the economy have been
(03:42):
extremely healthy, extremely resilient, and we're optimistic that at the
end of the day, you know, teriffstonetally help anybody. I
think we'll get hopefully to a more normalized place and
then we can continue to try to grow this market
and grow this economy.
Speaker 2 (03:55):
So markets seem to be pricing in somewhat lower odds
of more than one rate cut this year. How do
you see the Fed proceeding between now in year's end.
Speaker 4 (04:05):
Yeah, and they especially with this most recent inflation report.
I mean, they have certainly every reason to wait. There's
no clear direction in terms of what you know, Well, listen,
we're going to get PEPI tomorrow, which will be interesting,
but there's certainly no hard evidence for proof that we're
through this and that you know, the FED can say, okay, great,
(04:25):
all clear, We'll start cutting rates. They don't want to
make the same mistake, right, they made the big transitory
mistake coming out of COVID.
Speaker 3 (04:33):
They absolutely don't.
Speaker 4 (04:35):
Want to have to They don't want to make the
mistake of cutting rates and then all of a sudden
inflation just jumps and they got to vent raise rates.
Speaker 3 (04:41):
That's the absolute nightmare scenario.
Speaker 4 (04:43):
But at the same time, they can't just cut rates
for the sake of cutting rates. I mean, you got
to be careful what you asked for. Last year, the
Fed cut rates one hundred basis points right September November December,
and the ten year treasury went from three point six
percent to four point eight percent. So if the market does,
if the market doesn't agree that the move is the
right move, it's going to reject it. And I think
(05:04):
that's the big risks out there in terms of the
bond market, which again I think was one of the
big reasons why President Trump rolled back the tariffs that
he rolled out in the beginning of April.
Speaker 2 (05:13):
So we had some bank earnings this morning, kind of
a mixed bag. JP Morgan Chase with a surprise gain
and investment banking income and if you look what what
City Group had to say, revenue from fixed income trading
was pretty robust wells Fargo, on the other hand, cut
its guidance for net interest income. How are you feeling
about the financials broadly?
Speaker 4 (05:34):
I think broadly we feel really good about him. You know,
this type of environment generally abodes well for them. I
think I think your phrase mixed bag sums it up
perfectly right. JP Morgan's report is actually pretty good. They
dropped a little bit today. City has been such a
challenging mess for so many years. You know that the
stock buyback they announced as well was a big thing.
And I think the news with JP Morgan in terms
(05:56):
of about the better results coming out of investment banking
hopefull bodes well for the overall market in terms of
more deals and things being done, especially maybe with the
hope of some deregulation coming down the pike. So overall,
you know, we're we're bullish on financials, but as in
any sector, you're going to have some that outperform, and
you're gonna have some that you know, trip.
Speaker 3 (06:14):
All over themselves.
Speaker 4 (06:15):
But overall, financials should have done well this year, and
hopefully we'll continue to do so.
Speaker 2 (06:20):
We had a lot of positivity when it came to
tech today, the big news was in Nvidia and AMD
saying that they're going to be able to resume some
chip sales to China. This is obviously all a part
of the AI theme. And at the same time today
we had President Trump in Pennsylvania talking about a big
project for AI and also energy development that would be
(06:42):
used to power those data centers. This is obviously a
trade that's still getting a lot of attention. I'm curious, Chuck,
as to how you're playing it.
Speaker 3 (06:50):
Yeah, boy, it sure is getting some attention, right.
Speaker 4 (06:53):
You think about where Nvidia was, you know, beginning of
April there, you know, traded you know, well below one
hundred dollar and it's a one seventy and one seventy.
I think you closed that today. You know I've mentioned
to you before. I think you you don't own tech
at your own peril. I mean, I think it is
an unbelievable time in you know, the country and in
(07:14):
the world's history in terms of whatever is about to
come with AI.
Speaker 3 (07:19):
Uh, the level.
Speaker 4 (07:20):
And the impact that will probably have on everybody's lives
over the next ten to fifteen years. You know, we
were having a discussion about you know, you never thought
about all the things that would change in your life
and to make things easier and better, and certainly the
rest of challenges. You know, when the iPhone came out
and the internet launched, right, I mean thinking about Google
Maps or you know, door Dash or pick any app
(07:41):
you choose, of how that's impacted every single person's life.
We're we seem to be on the cusp of that,
and so I think you're going to have volatility. I
think that volatility is an opportunity to buy. But these
these cutting edge leading, you know, American companies, you know,
I think it's something you certainly want to own.
Speaker 2 (07:59):
Do you think think we're closer to some type of
resolution when it comes to these various trade deals? And
we had an announcement today from President Trump on a
trade deal with Indonesia. Obviously China when you look at Asia,
is the big wild card here. But I'm wondering whether
we're beginning to get a little bit of relief in markets.
Speaker 4 (08:17):
Yeah, you know, boy, I wish I knew the answer
for that one, for sure. I think the safest thing
to say is we're closer to some sort of conclusion
than we were before, you know, and who knows in
terms of this agreement with Nvidia being allowed to sell
these chips to China, if that's part of a bigger picture,
bide into getting these rare earths out of China. I mean,
so the way that we view it is it's gotten
(08:39):
better now. You and I both know I could change
on a dime with a tweet or whatever it might be.
But I think the reason that the market has run
so much, and the reason there is this more optimistic
feeling is that we saw the worst. I don't think
back at being in April. I don't think we ever
go back to that. And I think it's also in
no one's best interest to have these tariffs that are
to bilititting to everybody. So hopefully, you know, there's negotiations
(09:04):
that occur to get us to a better place and
wrap this up. But it certainly seems like and I
think the news flow and some of the things that
have come out of this that do prove that out
that we're getting closer to it and then we can
get to a better place so that at least this
part of the volatility in the market tamps down and
you don't have to be on the edge of your
seat every day waiting for some sort of press release
or tweet or something on truth social.
Speaker 2 (09:25):
Are you still primarily focused on looking for opportunity in
the US or are you more curious about things offshore
these days.
Speaker 4 (09:32):
No, we've always you know, we've always had us leave
of client assets that we look to invest outside the US.
I mean, I think the average US investor has always
historically been underweight non US investments, and quite candidly performance
wise for good reason.
Speaker 3 (09:47):
But look, if you look at.
Speaker 4 (09:48):
The MSCI e FA Index over the past three years,
it's outperformed the Dow, It's outperformed the Russell two thousand,
and you know, it's still trailing obviously NASDAK and the
S and P. But it's combat very wrong. But no,
we're we constantly do look there, whether it's through mutual
funds with great managers or ETFs to play the non
US side of things, and that also includes emerging markets,
(10:09):
but to a to a smaller percentage for the average client.
Speaker 2 (10:12):
What about the US bond market or US treasuries.
Speaker 4 (10:15):
Yeah, listen, treasury bills are a great place to hide out.
I mean we've we've we've done a ton of them.
I mean that that's the million dollar question what happens
with rates, and I think there certainly is some concern
there that depending upon what happens with you know, you know,
hopefully there's not you know, we don't all of a
sudden wake up in President Trump's fire chair, Powell, but
(10:36):
no treasuries, you know, were born change on treasury bills
or a great place for clients to hide out. We
had a great municipal manager in the office today talking
to us about the municipal market. We think there's a
lot of opportunities there and the intermediate range of maturities,
so no, we think it is the right opportunity. But
you know, I think equities obviously a longer term give
you more volatility but a greater return. But for somebody
(10:57):
that's a little bit more conservative or looking for a hedge,
I think fixed income now with these rates and with
these coupons in this raid environment, do give you a
much more give you much more cushion than you got
years ago.
Speaker 2 (11:08):
Chuck will leave it there. It's always a pleasure, Thank
you so very much. Chuck Camello there. He is president
also the CEO at Essex Financial Services. On the line
from Essex, Connecticut here on the Daybreak Asia Podcast. Welcome
back to the Daybreak Asia Podcast. I'm dek Krisner. Nvidia
(11:30):
and Advanced micro Devices are planning to resume sales of
some AI chips in China. These companies say they've been
given assurances from the Trump administration that such shipments will
be approved. The key issue here is the necessary licenses,
and in the case of Nvidia, it's the H twenty
artificial intelligence accelerator. This move, by the way, could add
(11:52):
billions of dollars to Nvidia's revenue this year. For a
closer look, we heard from Ray Wong. He is research
director at the few Terum Group. Ray spoke earlier with
Bloomberg's HEII Stroud Watts and Paul Allen.
Speaker 5 (12:05):
Right, thanks so much for joining us. I just wonder
if you can explain fir US what you see as
being the impact on the video's bottom line considering this reversal.
I mean, previously it was selling about fifteen billion dollars
worth of chips to China. Can those sorts of numbers
be recaptured?
Speaker 3 (12:22):
Hi boy, hey Gred morning.
Speaker 6 (12:23):
Yeah, definitely, this is a huge news, not just for
MDIA and also for AMVA, potentially auto chip makers. Right
in April, there's a new informulator from BAS that restricted
H twenty five media and autoships that have similar capabilities
in terms of memory, bandwidth and networking speed.
Speaker 3 (12:40):
This is huge for a.
Speaker 6 (12:41):
Media because now they can re enter Chinese market with
their H twenty ships and also the upcoming P thirty
or RTX six thousand D ships they're going to China,
and this is significant offsites.
Speaker 3 (12:56):
Here in Forturing we.
Speaker 6 (12:57):
Model together between B thirty and also H twenty that
could bring potessional, potentially additional seven to eight billion revenue
a quarter for NBDIA and this is huge.
Speaker 5 (13:10):
Well, if history shown us anything it's that the Trump
White House can be somewhat mercurial in terms of its
decision making. How much confidence can Nvidia have van imd
that this reversal is going to be permanent, that it
won't be reversed again.
Speaker 6 (13:24):
Yeah, I see this policy shift is relatively permanent in
a way that this is number one, this is part
of the negotiation with US and China. And I see
there's a policy aliement between n media and also the
current strong administration because remember back into April, there's a
contentious intension between administration and media because they couldn't really
figure out the controversy around h twenty. But right now
(13:49):
after the policy ship, I see more policy aliment between media,
the Trump Minstration and also other airtion makers.
Speaker 1 (13:57):
Right, you're seeing on our screens at the moment top
three percent of making up three percent of total global market.
Speaker 3 (14:03):
Cup.
Speaker 1 (14:04):
How much bigger can this company get given the presumed
presumption of business in this key market.
Speaker 6 (14:10):
Yeah, I think there's a still significant upside right right now,
we'll talk about in a let's say, in Q three
and Q four, right, we'll talk about additional seven to
eight billion revenue coming off from China, and you know,
throughout the rest of the twenty twenty five we'll talk
about fifteen to twenty billion in the second half this
year and moving forward in twenty twenty six. I believe
(14:31):
there's your strong AI demand in terms of a training
AI inference coming on from China because we are seeing
significant and rapidly developments in Chinese AI landscape.
Speaker 1 (14:42):
Another way I'm looking at it is just how big
video is when it comes to some very very big countries.
This start showing that video is larger than Canada. If
it adds another trillion in market cup it would be
contending with the size of India as well.
Speaker 3 (14:56):
Pole sort of.
Speaker 1 (14:58):
Talked about some of the you know, policy uncertainties from
the Trump administration. We know that, you know that is
a tendency for this administration, but how much of this
is really a watershed moment for Chinese policy makers. Does
the sort of argument that the White House is making
in terms of the advantages to the US make sense
to you?
Speaker 6 (15:19):
I think it actually makes sense because this really complicates
two things. Number One, when you have more Amedia chips
right now, going back to China, it's actually marginalized. A
lot of Chinese domestic chip makers, including Huawei, can become
higen inframe. All those domestic air chimmakers, right they really marginalized,
marginalize their potential market in China. Right from a Beating's perspective,
(15:44):
this will make the self sufficiency self sufficiency pushed in
air chips even harder because right now there will be
still significant reliance on a media MD solutions in terms
of air hardware.
Speaker 5 (15:58):
How long is that situation going to endure? Though, Because
while those curves were in place, we saw China becoming
very creative and not just finding ways to circumvent them,
but also nurturing its own homegrown version of this. Are
there any equivalents saw better than the Age twenty chip,
either in production and development in China?
Speaker 6 (16:17):
Well, I think in terms of Age twenty given the
memory bandwidth importance for AI inference, I think for now
there's not much solutions right in China that is comparable
to n media. But this reflect to an media's sort
of media and long term concern, right, because essentially they
can only sell chips that under the new Asper control
thrashold right, So in the long term, I do think
(16:40):
there's a concern that there will be other competitors against ANBDIA.
But I think for now in China and media is
still well, you know, maintaining its technological and market leadership.
Speaker 1 (16:50):
Is this a game changer for some of the homegrown
AI then the likes of deep.
Speaker 6 (16:54):
Sick, Yeah, I think it's definitely. The ones for number
one did give them more computes, right, But this is
the the chips that is one at least one generation
behind blickwell, right, and you know, if you look at
a computational performance and mary bangweb is really not compare
comparable to the current ships that most of the US
companies are using. And I think another thing is this
(17:17):
really complicates a lot of domestic Chinese ship makers because
essentially they want to fulfill the market's share their lab media.
But right now Amedia coming back to the market, I
think that makes things a lot more difficult.
Speaker 1 (17:31):
Right, Really great to have you with us, very well,
Research director for Semiconductor, Supply Chain and Emerging Tech at
the Food From Group.
Speaker 2 (17:39):
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 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 Kong to
(18:00):
Singapore and Australia. I'm Doug Prisoner and this is Bloomberg
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