October 13, 2025 • 18 mins
US President Donald Trump and Chinese leader Xi Jinping's latest tit-for-tat showdown has both countries claiming the ball is now in the other's court, with the clock ticking toward another escalation in import tariffs. Meantime, Treasury Secretary Scott Bessent said Monday that he believes the Trump-Xi meeting "will still be on," noting there had been "substantial communication over the weekend." In the meantime, he expected US-China staff-level meetings this week, along with moves by the Trump administration to mobilize US allies to put pressure on Beijing, while also threatening "straight brute force countermeasures" if Beijing doesn't act. For more on how this impacted the markets, we heard from James Aitken, Aitken Advisors Founder & Managing Partner. He spoke to Bloomberg's Paul Allen at the Citi ANZ Investment Conference.
Plus - Wall Street traders lifted stocks as the US and China signaled willingness to keep trade negotiations alive, Middle East tensions cooled while the artificial-intelligence rally powered ahead. Following its worst rout in six months, the S&P 500 jumped 1.6% to extend a bull market that's already added $28 trillion to its value. The benchmark saw its best session since May. A key gauge of chipmakers surged nearly 5%. Broadcom Inc. soared about 10% as OpenAI agreed to buy its custom chips and networking equipment in a multiyear agreement. For more, we spoke to Matthew Tuttle, CEO and CIO of Tuttle Capital Management.
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:11):
Welcome to the Daybreak Asia podcast. I'm Doug Krisner. Tensions
over trade between the US and China seemed to soften
a bit during the last session. Both sides signaled over
the weekend a willingness to keep negotiations alive after each
made a series of threats. Now, President Trump talked about
an increase in tariffs on Chinese imports to one hundred percent.
(00:31):
He seemed to be reacting to new Chinese restrictions on
the export of rare earth minerals. The timing was very interesting,
since the trade data from China for the month of
September blue past estimates. On Monday, Beijing reported outbound shipments
rose eight point three percent. That's the fastest pace in
six months, a total value of three hundred and twenty
(00:52):
eight point six billion US dollars. Later in the day,
we heard from Treasury Secretary Scott Bessant. Now he was
saying all options are open for the US to retaliate
against China's moved to titan exports on rare earths. Here's
best in speaking to Fox Business.
Speaker 3 (01:08):
Here in the US, we have an all hands on
deck policy This is something that we didn't get here
in a day. This has been the failure of previous
administrations over decades not to see this strategic hole.
Speaker 2 (01:24):
That was US Treasury Secretary Scott Besson speaking to Fox Business.
For more on the latest between the US and China
in terms of trade, we heard from James Aitken of
Aitken Advisors. He spoke with Bloomberg's Paul Allen at the
ANZ Investment Conference in Sydney.
Speaker 4 (01:41):
The last few days I have really been fascinating, and
it's perfect timing to have you walk us through it,
because it's just given us another example of how markets
can be so suddenly uphanded by rhetoric and changes in
trade policy. And we've also seen a re emphasis of
the so called taco tradeump Trump always chickens out, but
you want to give us another acronym to be careful
of them. That's the FAFO trade. Do people need to
(02:03):
be careful? Can you always rely on that taco trade?
Speaker 5 (02:05):
Yeah?
Speaker 6 (02:05):
I think that's a great place to start.
Speaker 7 (02:07):
I mean, look, we've had a bit of FAFO, We've
had a lot of taco and certainly, let's be clear,
the market is betting once again that this is another
Taco episode.
Speaker 6 (02:17):
I'm not so sure. But before we.
Speaker 7 (02:18):
Think about the path ahead, let's think about the conditions
that prevailed as recently as the middle of last week.
So unsurprisingly, people were all in, Systematic investors were all in.
Everyone was all in and levered long equities, which makes
a lot of sense. It's the right thing to do.
But Wednesday last week, per the Bloomberg terminal, ten day
(02:41):
realized correlation on the S and P five hundred fell
to zero, which is about as low as it can go.
Ten day implied correlation on the S and P five
hundred felt about five or.
Speaker 6 (02:51):
Six, which is as low as it has been.
Speaker 7 (02:53):
And the point I'd make is that the conditions, the
initial conditions ahead of Thursday Friday last week, were already
very stretched. It didn't particularly matter what might come up
to disrupt that. But we were primed for some kind
of disruption, and of course it got knocked over by
resumption of the Rarest contest, which is what it is.
And look, I know it sounds a little bit dramatic
(03:14):
that we have been in the Rarest cold war now
for a long long time. It's just that it's only
burst to the surface and what we're seeing of late
is a taste of what's to come.
Speaker 4 (03:25):
How do you see this situation evolving? Because we heard
from JP Morgan today it's going to funnel another one
and a half trillion into that rare earth sector, and
Jamie diamond saying, look, this isn't charity, this is just
a sense of a move. So is this an opportunity
here or is it more as you've sort of referred
to with the FAFO chance to damage limitation.
Speaker 7 (03:46):
Let's differentiate markets. Want to bet that there's a dip,
you buy, the party resumes. Okay, that's a path. But
what we're actually seeing and whisper it is that everything
has been subjugated to national security, which I'd argue was.
Speaker 6 (04:00):
Long over due.
Speaker 7 (04:02):
So all this debate which you've talked about about inflation
targets independence, Look, if.
Speaker 6 (04:07):
It's all about national.
Speaker 7 (04:08):
Security, which I think it should be, then everything is
subjugated by that. So inflation targets are important, But we've
got a whole bunch of investments we need to make
to make ourselves more resilience across the West, more.
Speaker 6 (04:21):
Resilient even and that's barely started.
Speaker 7 (04:23):
So yes, it's an opportunity for all sorts of investors
to participate.
Speaker 6 (04:28):
And let's call it a national security rebuild. It's long overdue.
Speaker 7 (04:32):
It starts first and foremost with critical minerals and rare
earth in Australia has plenty.
Speaker 6 (04:36):
Of those, but it's more broader than that. It expands
the supply chains.
Speaker 7 (04:40):
And I think what Jamie Diamond announced yesterday is commendable
and extreme, and I think it's a taste of what's
to come now.
Speaker 4 (04:46):
You mentioned a moment ago a number of S and
P metrics that suggested what happens now is predictable. However,
the only metric that it really matters to investors as well.
We saw it again this morning, the S ANDP hitting
a level that we haven't seen since May. So that
he just keeps on rolling on. But are you seeing
any warning signs longer term that that could come undone?
Because typically don't any of us stop it as a recession.
(05:08):
But is there anything else you're watching it now?
Speaker 7 (05:10):
You're right at a headline level, a happy clappy, let's
muddle through, let's continue to play the game, absolutely right,
and that's.
Speaker 6 (05:18):
The implied bet of the market.
Speaker 7 (05:20):
But you dig beneath the surface or under the hood,
and you see absolute turmoil. We've just had one of
the biggest factor smash ups in a long long time.
Shades of the game stopped Debarcle in twenty twenty one.
So on the surface it looks serene and calm and
the game rumbles on. But under the surface it's been
massively disruptive and unsurprisingly, anytime correlations rise and realize volatility rises,
(05:45):
that's very difficult for the leverage market participant. And regrettably,
there was an awful lot of damage across an awful
lot of risk taking silos on Friday. And again, as
much as the sentiment is let's put the party back on,
up we go again, I think risk appetite is going
to be fairly.
Speaker 6 (06:00):
Subdued for a little while to come.
Speaker 4 (06:02):
It feels like a good moment to ask you what
the Rallian gold prices means to you and can it continue?
Speaker 7 (06:07):
Look, I'd love to give you a really clever answer. Frankly,
I don't know. All I can see is walking down
Martin Place is people queuing up.
Speaker 6 (06:16):
Outside the gold bullion shop.
Speaker 7 (06:18):
Now I don't know if they're buyers or sellers, but
there's clearly something going on. Look, I'm watching it with interest.
I'm watching it in the context of a broader rally
in commodities. Historically, if gold did something like this, Paul,
you would have said, I'll watch out the dollars going
to go down as well. But so far as we
can see the dollars holding in, so I view gold
as a special situation. It's interesting in the recent past
(06:41):
that implied volatility on gold has started to shoot up
as well, which hasn't happened for a while, maybe suggesting
this gold rally is a little bit long in the tooth,
But look to state the obvious, it's very.
Speaker 6 (06:52):
Difficult to sell well.
Speaker 4 (06:53):
Of course gold price in US dollars as well, and
we've seen the US dollar gaining in the Bloomberg dollar
spot in decks about one and a half percent take
on month. But considering the trade tension, the rolling government shutdown,
FED easing, ballooning US debth Ai bubble risk, what's driving
dollar strength right now and going to last inertia?
Speaker 6 (07:11):
What's driving it is inertia.
Speaker 7 (07:13):
But there's two big decisions that global save as global
investors have had to make in twenty twenty five and
probably twenty six and beyond. It's like A what do
I do with my underlying US dollar asset exposure, private
credit equities and so forth?
Speaker 6 (07:27):
B what do I do about the dollar? And these
large pools of capital.
Speaker 7 (07:31):
Can move money around, but no market offers the capacity
that the United States does.
Speaker 6 (07:37):
Across a range of instruments.
Speaker 7 (07:39):
And you remember, ten years ago the world made a
very smart bet. Collectively, the world went overweight unheedged US
assets and equities in particular. It worked really, really well,
which means the bar to changing that allocation is very high.
There was a big test of that in February, March
and April, as we all recall. But again, those cumultive
(07:59):
gains are so large that there's this inertia that drives
strategic asset allocation around the world.
Speaker 6 (08:05):
So are people nervous, apprehensive?
Speaker 7 (08:07):
Absolutely, are there some conversations around town about how should
we think about dollar hedging and everything else? Absolutely, the
buy and large so good has been the performance of
the underlying asset exposure that people have decided that they
take the option of waiting and seeing, and that I
think explains a large part of the dollar resilience. So
the fast money ducks and wheeds through fire exchange markers.
(08:29):
The really big money is just sitting back and watching
and enjoying their enormous cumulative rolled up games.
Speaker 2 (08:34):
That's James Aken of Aitken Advisor speaking with Bloomberg's Paul Allen.
In the States, the equity market advanced thanks to a
rally among chip stocks. Coming up, we'll look at the
market with Matthew Tuttle of Tuttle Capital Management here on
the Daybreak Asia podcast. Welcome back to the Daybreak Asia Podcast.
(09:01):
I'm Doug Chrisner. Semiconductor stocks grabbed the spotlight in the
US session. That was after open Ai agreed to buy
custom chips and networking equipment from Broadcom in a multi
year agreement. Shares in Broadcom rallied nearly ten percent. Joining
me now for a closer look is Matthew Tuttle. He
is the CEO also CIO at Tuttle Capital Management. Matthew
(09:23):
is on the line from Greenwich, Connecticut. Thanks for making
time to chat with me. I'd like to begin by
asking you, in relation to this open Ai Broadcom deal,
whether it feels a little like late cycle to you?
Speaker 1 (09:36):
It does?
Speaker 5 (09:37):
I mean, I definitely think that you want to be
in these AI stocks. I do think we're late in
the cycle, but that doesn't mean that there still aren't
a lot more gains to come. I think you've just
got to be You've got to be careful with it.
You've got to be cognizant of the fact that we
are probably in a bubble. At some point bubble it's
(10:00):
going to burst, but you know that could be a
year from now, two years from now, three years from now.
So until then, we tell people trade based on what
you see and what you see as these AI stocks
go up and you want to be buying the dips
like Friday.
Speaker 2 (10:15):
So in terms of what we're going to be hearing
from these companies, the hyperscalers, everybody in that space that
begins reporting third quarter numbers, is it really the cap
X figure that's most important to you?
Speaker 1 (10:28):
That is going to be huge.
Speaker 5 (10:31):
As long as that spending spigot is continues to be
wide open, then we think you've got to be buying
this market.
Speaker 1 (10:41):
You know, the second that people have kind.
Speaker 5 (10:45):
Of that where's the beef moment where they're wondering, weave,
you know, how are we going to make money off
of all of this spending? That's when this starts to unravel,
and you know, you've just got to be hyper villaging,
hypervillaging on all these earnings and what the CEOs are saying,
and watch for signs of that.
Speaker 2 (11:05):
Let's turn our attention to the other earnings that we're
going to be getting tomorrow. Will hear from some of
the big banks, including JP Morgan The stock was up
today by more than two percent. A lot of focus
here on trading revenue, on fees from investment banking. Broadly speaking,
will the big banks deliver pretty strong quarterly results?
Speaker 1 (11:25):
You know, I think they'll deliver decent results.
Speaker 5 (11:28):
I'm not a big fan of the banks, you know,
I think this market has become completely thematic, and I
really think you want to stick with a lot of
these top themes. You know, we did see you know, Friday, Yeah,
big sell off, but coming into Friday, you saw a
lot of sectors that had really kind of turned and
(11:52):
we're looking wobbily even before that. So I would personally
just focus on on these bigger themes. But I mean,
I think the banks are going to be okay. It's
just it's not an area that's of interest us in.
Speaker 2 (12:06):
Terms of themes that would impact the banks. I would
imagine FED rate cuts are a part of that story.
Anna Paulson today, the head of the Philly FED, was
essentially indicating two more quarter point rate cuts are called
for this year. She's very much focused on the risk
to the labor market. Is the FED at risk of
maybe ignoring the inflationary pressures that still are above target
(12:29):
and they seem to be persistent.
Speaker 5 (12:32):
Yeah, I mean, you know, the FED, I in my opinion,
has gotten a lot wrong over the past couple of years,
and you know, and they do run the risk of
you know, kind of miss missing inflation like they did
the last time. You know.
Speaker 1 (12:48):
Right now, all the market cares about is they're running
it hot.
Speaker 5 (12:52):
And you know, so AI cap X to me is
number one. FED continuing to cut rates and run it
hot short term is number two.
Speaker 6 (13:03):
You know.
Speaker 5 (13:03):
Again, another risk to this market is if we end
up in some sort of stagflation environment, that's.
Speaker 1 (13:10):
Not going to be good.
Speaker 2 (13:12):
So late in the day Monday, New York time, we
had the price of silver jumping to an all time
high fifty two fifty announce. When you look at the
price section and not only silver but gold, what do
you come away with? What's your take on this.
Speaker 1 (13:28):
It's it's the debasement trade.
Speaker 5 (13:30):
You know, it's people moving out of fiat currency, and
it's you know, it's related to crypto. You know, Crypto's
got its own little unique things to it. And you
saw kind of that selloff Friday and a little bit
over the weekend. But it's really at the end of
the day, it's the same trade. It's people, you know,
(13:52):
losing faith in the central banks all of the debt
and getting out of fiat currency into you know, the
alternative currencies.
Speaker 2 (14:00):
One of the things that we need to talk about
the trade relationship between the US and China. Over the
last couple of trading days, things were on the hot
side rhetorically. Mike Wilson from Morgan Stanley is the chief
US equity strategist, was saying that there could be a
larger than expected correction in US equities if Presidents Trump
(14:20):
and Chief failed to resolve their escalating trade tensions.
Speaker 6 (14:25):
Do you agree with that?
Speaker 2 (14:26):
Is the trade story being largely ignored by the market
right now.
Speaker 5 (14:30):
So to me, the trade story is kind of a sideline.
You know, could there be a correction, There could, but
to me that that becomes a buying opportunity as long
as AI cap X spending is chumming along, and as
long as the FED is accommodative. You know, I think
Trump has shown you this playbook. And you know we
(14:53):
believe in taco. You know, Trump always chickens out until
proven otherwise.
Speaker 2 (14:58):
Were you finding value in USA equities right now?
Speaker 5 (15:02):
Value is a tough one, not a lot of places,
you know, you really when you're buying these themes. And
I'm really I'm a fan of all the AI infrastructure.
I'm a fan of space. I'm a fan of drones.
I'm a fan of anything kind of rare earth. And
(15:22):
then you know, I love gold and I love crypto,
But value, I mean, you've really got to hold your
nose and say look for right now and eventually valuations matter.
But for right now, you know, in this market, you know,
valuations don't matter a lot.
Speaker 2 (15:40):
I'm thinking about the power that's required to drive this
data center compute. Maybe away from the utility companies and
the power producers, think about the companies that actually produce
the turbans that create the electricity. Is that is that
an attractive trade to you?
Speaker 5 (15:56):
That's an attractive trade to us? You know, the ge Vernova.
You know, it's really all of you know, the cooling,
you know, natural gas. There's just so much to this
AI trade. And then you can even take it to
the third order. Who's going to build the data centers,
who's going to provide those materials?
Speaker 1 (16:18):
You know, there's just so much in there.
Speaker 5 (16:20):
Again, which is why something like banks, when I've got
such a target rich environment, I'm just not interested in
the banks.
Speaker 2 (16:28):
Okay, fair enough. But if you had to look at
a tech industry away from artificial intelligence, something away from
let's call it a pure play on semiconductors, something we
don't often discuss, such as robotics, I'm wondering whether robotics
is an area that interests you at all.
Speaker 1 (16:46):
Robotics is huge.
Speaker 5 (16:47):
My number one that people don't talk about is space,
and you know, and that's that's a ways out, but
there is so you know, for example, there are things
that you manufacture on Earth that gravity messes up that
can be done in space. I think eventually we're going
(17:08):
to have a whole infrastructure which is going to require
defending it, transporting things back and forth, building these satellites.
Speaker 1 (17:18):
Or whatever we have up there. That's really interesting to me.
Speaker 5 (17:22):
That would be my number one kind of out there
that you're not talking about.
Speaker 1 (17:26):
Robotics would be number two.
Speaker 2 (17:28):
We'll leave it there, Thank you so much. Matthew Tuttle
is the CEO also the CIO at Tuttle Capital Management.
On the line from Greenwich, Connecticut 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 Asia Pacific.
(17:52):
You can find us on Apple, Spotify, the Bloomberg Podcast
YouTube channel, or anywhere else you listen. Join us again
tomorrow for inside on the market moves from Hong Kong
to Singapore and Australia. I'm Doug Prisoner and this is
Bloomberg
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:11):
Welcome to the Daybreak Asia podcast. I'm Doug Krisner. Tensions
over trade between the US and China seemed to soften
a bit during the last session. Both sides signaled over
the weekend a willingness to keep negotiations alive after each
made a series of threats. Now, President Trump talked about
an increase in tariffs on Chinese imports to one hundred percent.
(00:31):
He seemed to be reacting to new Chinese restrictions on
the export of rare earth minerals. The timing was very interesting,
since the trade data from China for the month of
September blue past estimates. On Monday, Beijing reported outbound shipments
rose eight point three percent. That's the fastest pace in
six months, a total value of three hundred and twenty
(00:52):
eight point six billion US dollars. Later in the day,
we heard from Treasury Secretary Scott Bessant. Now he was
saying all options are open for the US to retaliate
against China's moved to titan exports on rare earths. Here's
best in speaking to Fox Business.
Speaker 3 (01:08):
Here in the US, we have an all hands on
deck policy This is something that we didn't get here
in a day. This has been the failure of previous
administrations over decades not to see this strategic hole.
Speaker 2 (01:24):
That was US Treasury Secretary Scott Besson speaking to Fox Business.
For more on the latest between the US and China
in terms of trade, we heard from James Aitken of
Aitken Advisors. He spoke with Bloomberg's Paul Allen at the
ANZ Investment Conference in Sydney.
Speaker 4 (01:41):
The last few days I have really been fascinating, and
it's perfect timing to have you walk us through it,
because it's just given us another example of how markets
can be so suddenly uphanded by rhetoric and changes in
trade policy. And we've also seen a re emphasis of
the so called taco tradeump Trump always chickens out, but
you want to give us another acronym to be careful
of them. That's the FAFO trade. Do people need to
(02:03):
be careful? Can you always rely on that taco trade?
Speaker 5 (02:05):
Yeah?
Speaker 6 (02:05):
I think that's a great place to start.
Speaker 7 (02:07):
I mean, look, we've had a bit of FAFO, We've
had a lot of taco and certainly, let's be clear,
the market is betting once again that this is another
Taco episode.
Speaker 6 (02:17):
I'm not so sure. But before we.
Speaker 7 (02:18):
Think about the path ahead, let's think about the conditions
that prevailed as recently as the middle of last week.
So unsurprisingly, people were all in, Systematic investors were all in.
Everyone was all in and levered long equities, which makes
a lot of sense. It's the right thing to do.
But Wednesday last week, per the Bloomberg terminal, ten day
(02:41):
realized correlation on the S and P five hundred fell
to zero, which is about as low as it can go.
Ten day implied correlation on the S and P five
hundred felt about five or.
Speaker 6 (02:51):
Six, which is as low as it has been.
Speaker 7 (02:53):
And the point I'd make is that the conditions, the
initial conditions ahead of Thursday Friday last week, were already
very stretched. It didn't particularly matter what might come up
to disrupt that. But we were primed for some kind
of disruption, and of course it got knocked over by
resumption of the Rarest contest, which is what it is.
And look, I know it sounds a little bit dramatic
(03:14):
that we have been in the Rarest cold war now
for a long long time. It's just that it's only
burst to the surface and what we're seeing of late
is a taste of what's to come.
Speaker 4 (03:25):
How do you see this situation evolving? Because we heard
from JP Morgan today it's going to funnel another one
and a half trillion into that rare earth sector, and
Jamie diamond saying, look, this isn't charity, this is just
a sense of a move. So is this an opportunity
here or is it more as you've sort of referred
to with the FAFO chance to damage limitation.
Speaker 7 (03:46):
Let's differentiate markets. Want to bet that there's a dip,
you buy, the party resumes. Okay, that's a path. But
what we're actually seeing and whisper it is that everything
has been subjugated to national security, which I'd argue was.
Speaker 6 (04:00):
Long over due.
Speaker 7 (04:02):
So all this debate which you've talked about about inflation
targets independence, Look, if.
Speaker 6 (04:07):
It's all about national.
Speaker 7 (04:08):
Security, which I think it should be, then everything is
subjugated by that. So inflation targets are important, But we've
got a whole bunch of investments we need to make
to make ourselves more resilience across the West, more.
Speaker 6 (04:21):
Resilient even and that's barely started.
Speaker 7 (04:23):
So yes, it's an opportunity for all sorts of investors
to participate.
Speaker 6 (04:28):
And let's call it a national security rebuild. It's long overdue.
Speaker 7 (04:32):
It starts first and foremost with critical minerals and rare
earth in Australia has plenty.
Speaker 6 (04:36):
Of those, but it's more broader than that. It expands
the supply chains.
Speaker 7 (04:40):
And I think what Jamie Diamond announced yesterday is commendable
and extreme, and I think it's a taste of what's
to come now.
Speaker 4 (04:46):
You mentioned a moment ago a number of S and
P metrics that suggested what happens now is predictable. However,
the only metric that it really matters to investors as well.
We saw it again this morning, the S ANDP hitting
a level that we haven't seen since May. So that
he just keeps on rolling on. But are you seeing
any warning signs longer term that that could come undone?
Because typically don't any of us stop it as a recession.
(05:08):
But is there anything else you're watching it now?
Speaker 7 (05:10):
You're right at a headline level, a happy clappy, let's
muddle through, let's continue to play the game, absolutely right,
and that's.
Speaker 6 (05:18):
The implied bet of the market.
Speaker 7 (05:20):
But you dig beneath the surface or under the hood,
and you see absolute turmoil. We've just had one of
the biggest factor smash ups in a long long time.
Shades of the game stopped Debarcle in twenty twenty one.
So on the surface it looks serene and calm and
the game rumbles on. But under the surface it's been
massively disruptive and unsurprisingly, anytime correlations rise and realize volatility rises,
(05:45):
that's very difficult for the leverage market participant. And regrettably,
there was an awful lot of damage across an awful
lot of risk taking silos on Friday. And again, as
much as the sentiment is let's put the party back on,
up we go again, I think risk appetite is going
to be fairly.
Speaker 6 (06:00):
Subdued for a little while to come.
Speaker 4 (06:02):
It feels like a good moment to ask you what
the Rallian gold prices means to you and can it continue?
Speaker 7 (06:07):
Look, I'd love to give you a really clever answer. Frankly,
I don't know. All I can see is walking down
Martin Place is people queuing up.
Speaker 6 (06:16):
Outside the gold bullion shop.
Speaker 7 (06:18):
Now I don't know if they're buyers or sellers, but
there's clearly something going on. Look, I'm watching it with interest.
I'm watching it in the context of a broader rally
in commodities. Historically, if gold did something like this, Paul,
you would have said, I'll watch out the dollars going
to go down as well. But so far as we
can see the dollars holding in, so I view gold
as a special situation. It's interesting in the recent past
(06:41):
that implied volatility on gold has started to shoot up
as well, which hasn't happened for a while, maybe suggesting
this gold rally is a little bit long in the tooth,
But look to state the obvious, it's very.
Speaker 6 (06:52):
Difficult to sell well.
Speaker 4 (06:53):
Of course gold price in US dollars as well, and
we've seen the US dollar gaining in the Bloomberg dollar
spot in decks about one and a half percent take
on month. But considering the trade tension, the rolling government shutdown,
FED easing, ballooning US debth Ai bubble risk, what's driving
dollar strength right now and going to last inertia?
Speaker 6 (07:11):
What's driving it is inertia.
Speaker 7 (07:13):
But there's two big decisions that global save as global
investors have had to make in twenty twenty five and
probably twenty six and beyond. It's like A what do
I do with my underlying US dollar asset exposure, private
credit equities and so forth?
Speaker 6 (07:27):
B what do I do about the dollar? And these
large pools of capital.
Speaker 7 (07:31):
Can move money around, but no market offers the capacity
that the United States does.
Speaker 6 (07:37):
Across a range of instruments.
Speaker 7 (07:39):
And you remember, ten years ago the world made a
very smart bet. Collectively, the world went overweight unheedged US
assets and equities in particular. It worked really, really well,
which means the bar to changing that allocation is very high.
There was a big test of that in February, March
and April, as we all recall. But again, those cumultive
(07:59):
gains are so large that there's this inertia that drives
strategic asset allocation around the world.
Speaker 6 (08:05):
So are people nervous, apprehensive?
Speaker 7 (08:07):
Absolutely, are there some conversations around town about how should
we think about dollar hedging and everything else? Absolutely, the
buy and large so good has been the performance of
the underlying asset exposure that people have decided that they
take the option of waiting and seeing, and that I
think explains a large part of the dollar resilience. So
the fast money ducks and wheeds through fire exchange markers.
(08:29):
The really big money is just sitting back and watching
and enjoying their enormous cumulative rolled up games.
Speaker 2 (08:34):
That's James Aken of Aitken Advisor speaking with Bloomberg's Paul Allen.
In the States, the equity market advanced thanks to a
rally among chip stocks. Coming up, we'll look at the
market with Matthew Tuttle of Tuttle Capital Management here on
the Daybreak Asia podcast. Welcome back to the Daybreak Asia Podcast.
(09:01):
I'm Doug Chrisner. Semiconductor stocks grabbed the spotlight in the
US session. That was after open Ai agreed to buy
custom chips and networking equipment from Broadcom in a multi
year agreement. Shares in Broadcom rallied nearly ten percent. Joining
me now for a closer look is Matthew Tuttle. He
is the CEO also CIO at Tuttle Capital Management. Matthew
(09:23):
is on the line from Greenwich, Connecticut. Thanks for making
time to chat with me. I'd like to begin by
asking you, in relation to this open Ai Broadcom deal,
whether it feels a little like late cycle to you?
Speaker 1 (09:36):
It does?
Speaker 5 (09:37):
I mean, I definitely think that you want to be
in these AI stocks. I do think we're late in
the cycle, but that doesn't mean that there still aren't
a lot more gains to come. I think you've just
got to be You've got to be careful with it.
You've got to be cognizant of the fact that we
are probably in a bubble. At some point bubble it's
(10:00):
going to burst, but you know that could be a
year from now, two years from now, three years from now.
So until then, we tell people trade based on what
you see and what you see as these AI stocks
go up and you want to be buying the dips
like Friday.
Speaker 2 (10:15):
So in terms of what we're going to be hearing
from these companies, the hyperscalers, everybody in that space that
begins reporting third quarter numbers, is it really the cap
X figure that's most important to you?
Speaker 1 (10:28):
That is going to be huge.
Speaker 5 (10:31):
As long as that spending spigot is continues to be
wide open, then we think you've got to be buying
this market.
Speaker 1 (10:41):
You know, the second that people have kind.
Speaker 5 (10:45):
Of that where's the beef moment where they're wondering, weave,
you know, how are we going to make money off
of all of this spending? That's when this starts to unravel,
and you know, you've just got to be hyper villaging,
hypervillaging on all these earnings and what the CEOs are saying,
and watch for signs of that.
Speaker 2 (11:05):
Let's turn our attention to the other earnings that we're
going to be getting tomorrow. Will hear from some of
the big banks, including JP Morgan The stock was up
today by more than two percent. A lot of focus
here on trading revenue, on fees from investment banking. Broadly speaking,
will the big banks deliver pretty strong quarterly results?
Speaker 1 (11:25):
You know, I think they'll deliver decent results.
Speaker 5 (11:28):
I'm not a big fan of the banks, you know,
I think this market has become completely thematic, and I
really think you want to stick with a lot of
these top themes. You know, we did see you know, Friday, Yeah,
big sell off, but coming into Friday, you saw a
lot of sectors that had really kind of turned and
(11:52):
we're looking wobbily even before that. So I would personally
just focus on on these bigger themes. But I mean,
I think the banks are going to be okay. It's
just it's not an area that's of interest us in.
Speaker 2 (12:06):
Terms of themes that would impact the banks. I would
imagine FED rate cuts are a part of that story.
Anna Paulson today, the head of the Philly FED, was
essentially indicating two more quarter point rate cuts are called
for this year. She's very much focused on the risk
to the labor market. Is the FED at risk of
maybe ignoring the inflationary pressures that still are above target
(12:29):
and they seem to be persistent.
Speaker 5 (12:32):
Yeah, I mean, you know, the FED, I in my opinion,
has gotten a lot wrong over the past couple of years,
and you know, and they do run the risk of
you know, kind of miss missing inflation like they did
the last time. You know.
Speaker 1 (12:48):
Right now, all the market cares about is they're running
it hot.
Speaker 5 (12:52):
And you know, so AI cap X to me is
number one. FED continuing to cut rates and run it
hot short term is number two.
Speaker 6 (13:03):
You know.
Speaker 5 (13:03):
Again, another risk to this market is if we end
up in some sort of stagflation environment, that's.
Speaker 1 (13:10):
Not going to be good.
Speaker 2 (13:12):
So late in the day Monday, New York time, we
had the price of silver jumping to an all time
high fifty two fifty announce. When you look at the
price section and not only silver but gold, what do
you come away with? What's your take on this.
Speaker 1 (13:28):
It's it's the debasement trade.
Speaker 5 (13:30):
You know, it's people moving out of fiat currency, and
it's you know, it's related to crypto. You know, Crypto's
got its own little unique things to it. And you
saw kind of that selloff Friday and a little bit
over the weekend. But it's really at the end of
the day, it's the same trade. It's people, you know,
(13:52):
losing faith in the central banks all of the debt
and getting out of fiat currency into you know, the
alternative currencies.
Speaker 2 (14:00):
One of the things that we need to talk about
the trade relationship between the US and China. Over the
last couple of trading days, things were on the hot
side rhetorically. Mike Wilson from Morgan Stanley is the chief
US equity strategist, was saying that there could be a
larger than expected correction in US equities if Presidents Trump
(14:20):
and Chief failed to resolve their escalating trade tensions.
Speaker 6 (14:25):
Do you agree with that?
Speaker 2 (14:26):
Is the trade story being largely ignored by the market
right now.
Speaker 5 (14:30):
So to me, the trade story is kind of a sideline.
You know, could there be a correction, There could, but
to me that that becomes a buying opportunity as long
as AI cap X spending is chumming along, and as
long as the FED is accommodative. You know, I think
Trump has shown you this playbook. And you know we
(14:53):
believe in taco. You know, Trump always chickens out until
proven otherwise.
Speaker 2 (14:58):
Were you finding value in USA equities right now?
Speaker 5 (15:02):
Value is a tough one, not a lot of places,
you know, you really when you're buying these themes. And
I'm really I'm a fan of all the AI infrastructure.
I'm a fan of space. I'm a fan of drones.
I'm a fan of anything kind of rare earth. And
(15:22):
then you know, I love gold and I love crypto,
But value, I mean, you've really got to hold your
nose and say look for right now and eventually valuations matter.
But for right now, you know, in this market, you know,
valuations don't matter a lot.
Speaker 2 (15:40):
I'm thinking about the power that's required to drive this
data center compute. Maybe away from the utility companies and
the power producers, think about the companies that actually produce
the turbans that create the electricity. Is that is that
an attractive trade to you?
Speaker 5 (15:56):
That's an attractive trade to us? You know, the ge Vernova.
You know, it's really all of you know, the cooling,
you know, natural gas. There's just so much to this
AI trade. And then you can even take it to
the third order. Who's going to build the data centers,
who's going to provide those materials?
Speaker 1 (16:18):
You know, there's just so much in there.
Speaker 5 (16:20):
Again, which is why something like banks, when I've got
such a target rich environment, I'm just not interested in
the banks.
Speaker 2 (16:28):
Okay, fair enough. But if you had to look at
a tech industry away from artificial intelligence, something away from
let's call it a pure play on semiconductors, something we
don't often discuss, such as robotics, I'm wondering whether robotics
is an area that interests you at all.
Speaker 1 (16:46):
Robotics is huge.
Speaker 5 (16:47):
My number one that people don't talk about is space,
and you know, and that's that's a ways out, but
there is so you know, for example, there are things
that you manufacture on Earth that gravity messes up that
can be done in space. I think eventually we're going
(17:08):
to have a whole infrastructure which is going to require
defending it, transporting things back and forth, building these satellites.
Speaker 1 (17:18):
Or whatever we have up there. That's really interesting to me.
Speaker 5 (17:22):
That would be my number one kind of out there
that you're not talking about.
Speaker 1 (17:26):
Robotics would be number two.
Speaker 2 (17:28):
We'll leave it there, Thank you so much. Matthew Tuttle
is the CEO also the CIO at Tuttle Capital Management.
On the line from Greenwich, Connecticut 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 Asia Pacific.
(17:52):
You can find us on Apple, Spotify, the Bloomberg Podcast
YouTube channel, or anywhere else you listen. Join us again
tomorrow for inside on the market moves from Hong Kong
to Singapore and Australia. I'm Doug Prisoner and this is
Bloomberg
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