October 30, 2025 • 21 mins
US President Donald Trump emerged from his meeting with Chinese leader Xi Jinping beaming, labeling the conversation "truly great. "But the one-year truce struck on Thursday in South Korea is likely to only stabilize relations between the world's two largest economies rather than resolve fundamental differences, with both sides buying time to further reduce dependence on each other in strategic areas. And it made clear just how much stronger China has become since Trump's first term in office. Trump's move to cut the fentanyl tariff and extend the existing truce on reciprocal tariffs will leave many products facing a levy around 47%, low enough for China's massive manufacturing base to remain competitive with regional rivals. Just as significantly, the US agreed to suspend a rule expanding restrictions on blacklisted Chinese firms, showing that Xi's sweeping rare earth curbs could potentially put a cap on new US export controls — something China has sought for years. We heard from Max Baucus, former US Ambassador to China. He spoke to Bloomberg's Shery Ahn and Avril Hong.
Plus - in the US, after the bell, Amazon reported third quarter results that beat analyst estimates driven by its cloud business growth. Apple meantime, reported revenue in Greater China fell well short of analysts' estimates in the latest quarter. We speak to Ross Mayfield, Investment Strategist for Baird Private Wealth Management.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:11):
Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Krisner.
First and update on some key earnings after the bell
in the US. Apple's revenue in China fell well short
of street expectations for the latest quarter. But even with
that disappointment, Apple's overall revenue growth was eight percent. We
got reaction from Gil Luria, he is head of Tech
(00:32):
research at DA Davidson.
Speaker 3 (00:34):
If we can count on anything China to contribute to Apple,
it's volatility the quarter to quarter results. They're very so
widely and often the checks that we hear ahead of
a quarter are directionally wrong or completely wrong, as is
the case this time. Some of that has to do
with some selling upfront last quarter. They had better activity
(00:57):
last quarter. They probably sold into the channel more than
than the market required, which is why we're seeing it
down this quarter.
Speaker 2 (01:04):
That was Gilia of DA Davidson.
Speaker 4 (01:07):
Now.
Speaker 2 (01:07):
Apple also gave an upbeat forecast for the holiday season,
saying revenue in the current quarter will rise by between
ten and twelve percent. We also heard from Amazon the
company's cloud unit posted its strongest growth rate in nearly
three years. Revenue for the latest quarter thirty three billion dollars.
That's an increase of twenty percent from last year. Here
(01:28):
is Bloomberg analyst Punham Goyel.
Speaker 5 (01:30):
They hit it out of the park. Sales were rarey
get across the board across all business segments AWUS, online advertising,
and physical stores. So from a top line perspective, very
very encouraging results. In fact, AWS was probably the bright
spot here. Twenty percent gains, we haven't seen that in
a while.
Speaker 2 (01:48):
That is Bloomberg's Punham Goiel. In a moment, we'll take
a closer look at these earnings with Ross Mayfield. He
is investment strategist at bair To Private Wealth Management. We
turn next to US China trade Presidents Trump and She
striking a one year truce. Now the US has cut
the fentanyl tariff and extended the existing truth on reciprocal tariffs,
(02:10):
while China will resume buying soybeans and allow rare earth
minerals to flow. The agreement is likely to just stabilize
relations rather than resolve some fundamental differences. We caught up
with Max bauchus, former US Ambassador to China. He spoke
earlier with Bloomberg TV host Sherry On and Avril Hong.
Speaker 1 (02:30):
Give us your reaction force to this agreement, because it's
not like we haven't heard this before a positive tone,
but when it comes to actually follow through not much later,
that's right.
Speaker 6 (02:41):
Actually, there are some good news, and the good news
is there's one year truce. Things could be worse. At
least there's a one year and truth essentially right to
with whole judgment because you know, we've had words before,
agreements before.
Speaker 4 (02:57):
They just haven't held up.
Speaker 6 (02:59):
I'm a little market about this one too, because President
Trump is a little more whimsical than prior American presidents,
so it's unclear.
Speaker 4 (03:07):
What he's going to do.
Speaker 6 (03:08):
Add to that, you know, he's dismantled the National Security
Council in the United States, so there's much less coordination
above US departments, and there's really not much of a
long term strategic plan towards China as there really should be,
so we have reason to be concerned. Another real message
for me out of all this is this looks like
(03:30):
two world peers trying to figure things out together, and
we are peers, the United States and China. China show
that it's not going to back down. The United States,
China can stand tote to total of the United States,
and I think President Trump appreciated that.
Speaker 4 (03:45):
I think it.
Speaker 6 (03:47):
He gained their respective of President Trump. That is a
President She being strong because look at what Trump's done
in the past. He's bullied a lot of different countries
to back down.
Speaker 4 (03:59):
He's bullied some institutions.
Speaker 6 (04:01):
The United States to back down, like universities, media, and
even some companies.
Speaker 4 (04:06):
But President She has not back down.
Speaker 6 (04:08):
President She stood tall, and I think that President Trump
respects that a lot. That's going to help frankly, President
She down the road and maybe even establish a better
relationship between the two presidents.
Speaker 1 (04:22):
That is interesting, right because we have been watching President
and She gene ping really play the long game. President
Trump is negotiating style. He won those short term gains.
Was it surprising to you then that he didn't really
concede anything When it comes to the most advanced and
Vidia Blackwell chips.
Speaker 4 (04:38):
I think that.
Speaker 6 (04:40):
Trump has to be concerned about the Hawks back home.
There's quite a drum beat at home that these chips,
the Blackwell chips, if Trump agrees they can be a
center over to China, would cause too much consternation among
the Hawks. The United States, and I do so that
does not surprise me. It's interesting to me to see
whether Jensen Wonk can negotiate some kind of agreement with
(05:02):
them with China, because as we know, at the summit,
President Trump said, well, that's up to Nvidio and Jensen
Wong and dealing with the Chinese.
Speaker 7 (05:12):
So let's see, Ambassador. Do you perhaps think that then
the US President, following on from his trip in Asia,
runs the risk of not coming off hawkish enough on
the Chinese, which is something that both sides of the
all seem to be able to agree on.
Speaker 6 (05:33):
I think there's a slight risk that he does not
come across hawkeyish enough. Whenever there are discussions in the
White House and the Oval Office about China, President Trump
is usually the most doubt dubbish in the room compare
with the other Hawks.
Speaker 4 (05:48):
In the room.
Speaker 6 (05:50):
But on the other hand, and I think some of
the Hawks of China see that Trump did not was
not as strong as he otherwise could it be. But
the other hand, both China the United States know they
need each other and there's a reason for this one
year suspension of difficulties between the two countries, and that's
because both countries want to buy time, and both countries
(06:11):
know they need each other as they grow and as
they decouple, probably even a little more, and as each
country becomes a very strong economic power. We have two
peers in the world today, and I think that there's
a good news there that is that each side now
respects each other more.
Speaker 7 (06:28):
Do you think that whatever's been achieved out of his
Asia tour can be counted as a success, because the backdrop,
of course, is that he's embarked on this at a
time where we're coming up to a month of a
US government shut down. Does he have enough to show
for all this? The US president?
Speaker 4 (06:50):
I think the two are unrelated.
Speaker 6 (06:51):
He did get some achievements, some success, you know, trying
to integrate right some so it means I don't know
how much, but they're going to buy some so it
means vision China said it suspend its export controls and
rare earth. You have to see how much that will be.
So President Trump did get some success, and also the
agreement on ports that helped a little bit, and also
(07:14):
the agreement by China to try to address a fentanyl
But those, you know, I don't think, as has been
point up by many observers is there's no structural change
in the relationship. It's still going to be very complex,
very very difficult, and this was basically a time for
the two countries. It's going to pause, you know, take
a deep breath and see where we are, build up
our own economies, and then come back, hopefully in April
(07:36):
at the next summit, and maybe build on what we have.
Speaker 1 (07:39):
At least after all of these tensions with China, has
President Trump finally realized that he needs a help of
global allies. I mean, he came into this meeting with
all of these agreements with Asian and Japan and South
Korea as well.
Speaker 6 (07:57):
He knows that intellectually. That's why he would, you know,
visited Malaysia, create in Japan. But the question is follow
up when he goes back home to Washington. He's back
home already, you know, he faces a different reality, and
it's just it's difficult to follow through, especially with President
Donald Trump. It's very difficult to follow through. But that's separate,
(08:19):
I think from the problems he's facing the shutdown. I
very much hope that he sits down down with the
leaders and both parties in Washington to solve this shutdown
because a lot of people in America are getting hurt.
Speaker 1 (08:33):
So what's next for this relationship. We've had this Trump
Chee summit and we understand that the leaders will meet
again if there are no structural changes at the moment.
Speaker 4 (08:41):
What's next, Well, obviously we don't know.
Speaker 6 (08:45):
First of the see look at the details. You know,
a lot of nice words, but let's see what implementation
is on xpart controls. I mean, it's very it's almost stunning.
Then President Trump backed off on a new export controls
that's a national security issue. It's the first time that the
national security issue export controls has been on the trade
(09:06):
on the table as an economic issue.
Speaker 4 (09:09):
That's that's stunning.
Speaker 6 (09:10):
As a big give by President Trump and the gain
for President she No. I think, well, both sides will
take advantage of this truth, the suspension of the difficulties
to try to build up their own economies kind of
figure out what they're going to do next.
Speaker 4 (09:30):
But I do think that.
Speaker 6 (09:33):
Because both countries realize neither could push the other country around,
that they're going to each has a healthier respect for
healthier respect for the other, and I think that should help.
Speaker 4 (09:43):
I've every much hope that it is.
Speaker 6 (09:44):
The big unknown here is is Trump's personality, because he
changes his mind so quickly.
Speaker 4 (09:48):
And that's that's that's that's.
Speaker 7 (09:50):
A concern, and that's you said earlier noting that in
this I guess changing relationship between the US and China
that is seen as China standing toll in your experience
and engaging with China, what is your sense of the
(10:11):
extent in which this trade war two point oh, and
the changing relationship differs from the first iteration.
Speaker 6 (10:20):
Well, the first iteration is a so called Section free
one investigation and enactive tariffs against China if there are
significant tariffs against China, and also exactly a promise from
China to biolow American products and that never materialized. But
(10:42):
that the key point here is a big difference between
Trump's first presidency and now the second presidency. And the
difference is during that period of time six seven, eight years,
China has begun to take Trump's measure. China has begun
to understand Trump. China knows how to deal with Trump.
That may not always work, but that China has a
lot more confidence now than it did when it first
(11:04):
dealt with Trump.
Speaker 4 (11:05):
In Trump's first term.
Speaker 1 (11:07):
I was going to ask how much does that matter?
The majoring understands President Trump. I mean, I wonder how
long lasting the changes will be when it comes to
everything that he's setting up on the trade front, when
he's leaving in three years, or does the next government
also follow through?
Speaker 6 (11:23):
Well we no, No, It's a lot depends on the
internal politics United States. And so far President Trump's got
free reigned. He virtually controls all three branches of government,
even to some degree the Supreme Court. Now, there could
be election changes in twenty twenty six November midterm elections.
In if either House, the Senate or the House for
(11:47):
Representatives turns Democrat, that's going to very dramatically change Trump's
control over not only the United States but also the world.
That's a big potential watershed development.
Speaker 2 (11:58):
That's Max Baucus. He is former US Ambassador to China,
speaking earlier with Bloomberg TV host Cherry On and April Hong.
Bringing it to you here on the Daybreak Asia podcast.
Welcome back to the Daybreak Asia Podcast. I'm Doug Chrisner,
(12:20):
and as promised earlier, we'll take a closer look now
at the earnings from Apple and Amazon that were reported
after the bell. I'm joined now by Ross Mayfield. He
is investment strategist at Baird Private Wealth Management. Ross is
on the line from Louisville, Kentucky. Thank you so much
for making time to chat with me. I'd like to
begin with the earnings that we had after the bell,
(12:41):
Apple and Amazon. Breakdown what you think you heard from Apple,
because this China revenue figure I think obviously was disappointing
and that seemed to have rattled the stock of it
in late trading.
Speaker 8 (12:52):
It did obviously a big market.
Speaker 9 (12:55):
It's still a lot of interlinkages between Apple and China,
but I think resilient domestic demand is the big story.
And you know, Apple gets lumped in as an AI
stock as a mag seven, but this is really a
retail business and they are still proving that they have
(13:16):
the goods when it comes to pushing product and beating
estimates on that front. So I think the China news,
as you mentioned, disappointing, but I think there's going to
be a lot of disappointing quarters for companies operating in
China over the next couple of years. So it's good
to see that the domestic revenues and domestic sales can
backfill a little bit.
Speaker 2 (13:34):
Yeah, and Apple also with an upbeat forecast for the
current quarter, the holiday season quarter. Apple is expecting revenue
to rise between ten and twelve percent for the current quarter.
That seems to be pretty strong given everything that you're
describing that this is essentially a high end consumer products company.
Speaker 8 (13:54):
Yeah, exactly. I mean, I think for a lot of
this quarter, if not.
Speaker 9 (13:58):
You know, most of this year, we've been consistently waiting
for the consumer to slow, to stop spending, and there's
been a little bit, there's been hiccups. It hasn't been perfect,
but by and large, the consumer socks have been strong
and the consumer has continued to chug along, particularly as
you mentioned, the high end consumer, you know, bolstered by
(14:18):
the wealth effect, strong stock market, strong housing prices, a
lot of home equity, but ultimately underpinned by a job
market that you know, isn't hiring as many people, but
isn't really firing either, and wage growth is still strong.
So it's not the perfect consumer environment, but it is
it is good enough and for a company like Apple
obviously able to capitalize on a decent consumer backdrop heading
(14:40):
into the holidays.
Speaker 2 (14:41):
So we also heard from Amazon the company's cloud unit
with its strongest growth rate in nearly three years, Amazon
Web Services with revenue of thirty three billion, and that
represents a twenty percent increase from the prior year. What
does this say to you about the way that Amazon
is dealing with this AI trade right now?
Speaker 8 (15:00):
I think it's exactly what the market needs.
Speaker 9 (15:03):
Obviously, we got the update from Nvidia at GtC the
other day, but all of these updates around AI prove
that this theme continues a pace, that there's real money,
real demand, real spending, real earnings, that it is, in
my opinion, not close to a bubble, that it is
underlied by very real fundamentals.
Speaker 8 (15:23):
And when you see companies.
Speaker 9 (15:26):
At the size of Amazon and Nvidia still beating estimates
like this and having blowout quarter after blowout quarter in
the AI linked areas of their business, I think it
proves that we're still early in this AI cycle. I
think the calls for a bubble, while understandable, are a
little bit.
Speaker 2 (15:43):
Misled, maybe premature. Do you think will eventually burst the bubble?
Speaker 8 (15:48):
Sure, yeah, I think probably.
Speaker 9 (15:50):
I mean, anytime you have a new technology, you get
an enthusiasm, you get a lot of spending without one
hundred percent certainty on what the end product or you know,
the software stat on top of it entirely looks like
so we might get there one day.
Speaker 8 (16:04):
But certainly I think the fundamentals have matched.
Speaker 9 (16:06):
Most of the price increases right now, at least in
the big AI link stocks. And then I don't, you know,
it's a little bit more anecdotal, but I don't sense
the kind.
Speaker 8 (16:14):
Of broad enthusiasm or euphoria.
Speaker 9 (16:17):
It still seems to me like there's a lot of
trepidation around this theme. And to me that means we're
not in a bubble yet. I mean, it's very much
a psychological thing, and I just don't see it yet.
Speaker 2 (16:28):
Okay, fair enough. There has been some concern express though
about the ROI, the return on investment, and whether or
not users ultimately are willing to pay for the services
that are offered in these kind of AI systems. Is
that a reasonable kind of concern to have?
Speaker 8 (16:45):
Yeah, absolutely, I don't think.
Speaker 9 (16:47):
Just because I do think that we're not in a
bubble yet and that this theme could continue, I do
think it's fair to question what is the use case
for businesses across different sectors. I mean, we've seen so far,
you know, upticks and productivity.
Speaker 8 (17:02):
We're seeing a.
Speaker 9 (17:03):
Rapid advancement in agentic AI and other use cases for
this technology, and particularly, I mean, the important thing is,
all right, we're seeing the tech companies that are deeply
involved with this technology see growth, see revenue growth, ce
stock price appreciation. What does it mean for a consumer
staples company? What does it mean for an industrials company?
(17:23):
What does it mean for a small business in Louisville, Kentucky. Right, So,
it will be important to build the software layer on
top to see what the use cases are that unlock
the next layer of productivity. But I think it's too
early to determine that that's not you know, that that
won't happen or that's not being seen yet.
Speaker 8 (17:42):
There are plenty of examples.
Speaker 9 (17:44):
If you, you know, listen to some of these earnings
calls of companies finding really useful ways to for all
out AI products.
Speaker 2 (17:50):
Ross We're getting some breaking news by way of Reuter's
The company is reporting that Netflix is actively exploring a
bid for Warner Brothers to discovery both the studio and
the streaming business. How are you feeling about the media
landscape right now? Are there opportunities where you would put
money to work here. I know that some of these
(18:11):
businesses are referred to as legacy media, and maybe you
don't believe it represents an opportunity, But I'm wondering how
you're thinking more broadly about media stocks in general.
Speaker 9 (18:22):
Yeah, I think the media landscape is changing kind of
drastically underneath our feet. I mean the post COVID shift
in how people view going to the movies in the
cost of doing so. So anytime there's massive change, I
think there's opportunity. Now I'm hesitant to get involved with
the stocks doing big mergers, big acquisitions, you know, especially
(18:45):
if they involve taking on.
Speaker 8 (18:46):
A lot of debt.
Speaker 9 (18:46):
It's often a really hard hurdle to overcome. This would
be a big bite at the apple for a company
like Netflix. But I think there's plenty of opportunity here.
I mean even looking you know, not to say that
something Google is some unheard of company or undiscovered company,
but if you look at their results and see you
know what.
Speaker 8 (19:06):
YouTube is doing.
Speaker 9 (19:07):
I mean this is this is in theory or at
least adjacently a media company, and it's it's seeing rapid growth.
So I think the landscape is changing, the demographics are changing,
but there's plenty of opportunity out there.
Speaker 8 (19:22):
I'm a little.
Speaker 9 (19:23):
Hesitant about big acquisition. So that's just kind of a
rule of thumb across all industry.
Speaker 2 (19:28):
So we had the FED rate decision on Wednesday and
a message from FED Shaer J. Powell where he kind
of pushed back on this idea that we may see
or it's a foregone conclusion that we will see a
December rate cut. Does do you think that represents a
significant headwind for the equity market, the idea that a
rate cut in December maybe off the table.
Speaker 8 (19:49):
I don't think so.
Speaker 9 (19:50):
I think broadly, directionality is more important than the pace
or the timing. So the fact that we know the
FED is like likely to continue cutting rates is the
more important thing than whether we get one in December
or not. I also think, you know, I understand chair pals,
you know, impulse to kind of tamp down some of
(20:10):
the rakehead speculation and maybe try to let a little
air out of the equity market or some of the speculation.
I understand that impetus fully, but I think it's still
likely we get a rake cut in December. I think
the labor market data that the FED is seeing kind
of demands it. The lack of upside pressure from inflation
(20:32):
demands it. And quite frankly, they're just even if we
were at a neutral place, the FED, the FED funds
rate is still in restrictive territory, so I think it
makes sense for them to at least get back to
a neutral stance and then evaluate the landscape from there.
So as long as we don't get to December, and
even if the FED doesn't cut, as long as we're
not hearing hawkish language about pause or potential hikes down
(20:54):
the road, I think the equity market's going to be
just fine with the FED stance.
Speaker 2 (20:58):
Okay, Ross, we'll leave it there. Thanks so much. Ross
Mayfield is the investment strategist at Baird Private Wealth Management.
Joining today from Louisville, Kentucky 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. You
(21:21):
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
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:11):
Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Krisner.
First and update on some key earnings after the bell
in the US. Apple's revenue in China fell well short
of street expectations for the latest quarter. But even with
that disappointment, Apple's overall revenue growth was eight percent. We
got reaction from Gil Luria, he is head of Tech
(00:32):
research at DA Davidson.
Speaker 3 (00:34):
If we can count on anything China to contribute to Apple,
it's volatility the quarter to quarter results. They're very so
widely and often the checks that we hear ahead of
a quarter are directionally wrong or completely wrong, as is
the case this time. Some of that has to do
with some selling upfront last quarter. They had better activity
(00:57):
last quarter. They probably sold into the channel more than
than the market required, which is why we're seeing it
down this quarter.
Speaker 2 (01:04):
That was Gilia of DA Davidson.
Speaker 4 (01:07):
Now.
Speaker 2 (01:07):
Apple also gave an upbeat forecast for the holiday season,
saying revenue in the current quarter will rise by between
ten and twelve percent. We also heard from Amazon the
company's cloud unit posted its strongest growth rate in nearly
three years. Revenue for the latest quarter thirty three billion dollars.
That's an increase of twenty percent from last year. Here
(01:28):
is Bloomberg analyst Punham Goyel.
Speaker 5 (01:30):
They hit it out of the park. Sales were rarey
get across the board across all business segments AWUS, online advertising,
and physical stores. So from a top line perspective, very
very encouraging results. In fact, AWS was probably the bright
spot here. Twenty percent gains, we haven't seen that in
a while.
Speaker 2 (01:48):
That is Bloomberg's Punham Goiel. In a moment, we'll take
a closer look at these earnings with Ross Mayfield. He
is investment strategist at bair To Private Wealth Management. We
turn next to US China trade Presidents Trump and She
striking a one year truce. Now the US has cut
the fentanyl tariff and extended the existing truth on reciprocal tariffs,
(02:10):
while China will resume buying soybeans and allow rare earth
minerals to flow. The agreement is likely to just stabilize
relations rather than resolve some fundamental differences. We caught up
with Max bauchus, former US Ambassador to China. He spoke
earlier with Bloomberg TV host Sherry On and Avril Hong.
Speaker 1 (02:30):
Give us your reaction force to this agreement, because it's
not like we haven't heard this before a positive tone,
but when it comes to actually follow through not much later,
that's right.
Speaker 6 (02:41):
Actually, there are some good news, and the good news
is there's one year truce. Things could be worse. At
least there's a one year and truth essentially right to
with whole judgment because you know, we've had words before,
agreements before.
Speaker 4 (02:57):
They just haven't held up.
Speaker 6 (02:59):
I'm a little market about this one too, because President
Trump is a little more whimsical than prior American presidents,
so it's unclear.
Speaker 4 (03:07):
What he's going to do.
Speaker 6 (03:08):
Add to that, you know, he's dismantled the National Security
Council in the United States, so there's much less coordination
above US departments, and there's really not much of a
long term strategic plan towards China as there really should be,
so we have reason to be concerned. Another real message
for me out of all this is this looks like
(03:30):
two world peers trying to figure things out together, and
we are peers, the United States and China. China show
that it's not going to back down. The United States,
China can stand tote to total of the United States,
and I think President Trump appreciated that.
Speaker 4 (03:45):
I think it.
Speaker 6 (03:47):
He gained their respective of President Trump. That is a
President She being strong because look at what Trump's done
in the past. He's bullied a lot of different countries
to back down.
Speaker 4 (03:59):
He's bullied some institutions.
Speaker 6 (04:01):
The United States to back down, like universities, media, and
even some companies.
Speaker 4 (04:06):
But President She has not back down.
Speaker 6 (04:08):
President She stood tall, and I think that President Trump
respects that a lot. That's going to help frankly, President
She down the road and maybe even establish a better
relationship between the two presidents.
Speaker 1 (04:22):
That is interesting, right because we have been watching President
and She gene ping really play the long game. President
Trump is negotiating style. He won those short term gains.
Was it surprising to you then that he didn't really
concede anything When it comes to the most advanced and
Vidia Blackwell chips.
Speaker 4 (04:38):
I think that.
Speaker 6 (04:40):
Trump has to be concerned about the Hawks back home.
There's quite a drum beat at home that these chips,
the Blackwell chips, if Trump agrees they can be a
center over to China, would cause too much consternation among
the Hawks. The United States, and I do so that
does not surprise me. It's interesting to me to see
whether Jensen Wonk can negotiate some kind of agreement with
(05:02):
them with China, because as we know, at the summit,
President Trump said, well, that's up to Nvidio and Jensen
Wong and dealing with the Chinese.
Speaker 7 (05:12):
So let's see, Ambassador. Do you perhaps think that then
the US President, following on from his trip in Asia,
runs the risk of not coming off hawkish enough on
the Chinese, which is something that both sides of the
all seem to be able to agree on.
Speaker 6 (05:33):
I think there's a slight risk that he does not
come across hawkeyish enough. Whenever there are discussions in the
White House and the Oval Office about China, President Trump
is usually the most doubt dubbish in the room compare
with the other Hawks.
Speaker 4 (05:48):
In the room.
Speaker 6 (05:50):
But on the other hand, and I think some of
the Hawks of China see that Trump did not was
not as strong as he otherwise could it be. But
the other hand, both China the United States know they
need each other and there's a reason for this one
year suspension of difficulties between the two countries, and that's
because both countries want to buy time, and both countries
(06:11):
know they need each other as they grow and as
they decouple, probably even a little more, and as each
country becomes a very strong economic power. We have two
peers in the world today, and I think that there's
a good news there that is that each side now
respects each other more.
Speaker 7 (06:28):
Do you think that whatever's been achieved out of his
Asia tour can be counted as a success, because the backdrop,
of course, is that he's embarked on this at a
time where we're coming up to a month of a
US government shut down. Does he have enough to show
for all this? The US president?
Speaker 4 (06:50):
I think the two are unrelated.
Speaker 6 (06:51):
He did get some achievements, some success, you know, trying
to integrate right some so it means I don't know
how much, but they're going to buy some so it
means vision China said it suspend its export controls and
rare earth. You have to see how much that will be.
So President Trump did get some success, and also the
agreement on ports that helped a little bit, and also
(07:14):
the agreement by China to try to address a fentanyl
But those, you know, I don't think, as has been
point up by many observers is there's no structural change
in the relationship. It's still going to be very complex,
very very difficult, and this was basically a time for
the two countries. It's going to pause, you know, take
a deep breath and see where we are, build up
our own economies, and then come back, hopefully in April
(07:36):
at the next summit, and maybe build on what we have.
Speaker 1 (07:39):
At least after all of these tensions with China, has
President Trump finally realized that he needs a help of
global allies. I mean, he came into this meeting with
all of these agreements with Asian and Japan and South
Korea as well.
Speaker 6 (07:57):
He knows that intellectually. That's why he would, you know,
visited Malaysia, create in Japan. But the question is follow
up when he goes back home to Washington. He's back
home already, you know, he faces a different reality, and
it's just it's difficult to follow through, especially with President
Donald Trump. It's very difficult to follow through. But that's separate,
(08:19):
I think from the problems he's facing the shutdown. I
very much hope that he sits down down with the
leaders and both parties in Washington to solve this shutdown
because a lot of people in America are getting hurt.
Speaker 1 (08:33):
So what's next for this relationship. We've had this Trump
Chee summit and we understand that the leaders will meet
again if there are no structural changes at the moment.
Speaker 4 (08:41):
What's next, Well, obviously we don't know.
Speaker 6 (08:45):
First of the see look at the details. You know,
a lot of nice words, but let's see what implementation
is on xpart controls. I mean, it's very it's almost stunning.
Then President Trump backed off on a new export controls
that's a national security issue. It's the first time that the
national security issue export controls has been on the trade
(09:06):
on the table as an economic issue.
Speaker 4 (09:09):
That's that's stunning.
Speaker 6 (09:10):
As a big give by President Trump and the gain
for President she No. I think, well, both sides will
take advantage of this truth, the suspension of the difficulties
to try to build up their own economies kind of
figure out what they're going to do next.
Speaker 4 (09:30):
But I do think that.
Speaker 6 (09:33):
Because both countries realize neither could push the other country around,
that they're going to each has a healthier respect for
healthier respect for the other, and I think that should help.
Speaker 4 (09:43):
I've every much hope that it is.
Speaker 6 (09:44):
The big unknown here is is Trump's personality, because he
changes his mind so quickly.
Speaker 4 (09:48):
And that's that's that's that's.
Speaker 7 (09:50):
A concern, and that's you said earlier noting that in
this I guess changing relationship between the US and China
that is seen as China standing toll in your experience
and engaging with China, what is your sense of the
(10:11):
extent in which this trade war two point oh, and
the changing relationship differs from the first iteration.
Speaker 6 (10:20):
Well, the first iteration is a so called Section free
one investigation and enactive tariffs against China if there are
significant tariffs against China, and also exactly a promise from
China to biolow American products and that never materialized. But
(10:42):
that the key point here is a big difference between
Trump's first presidency and now the second presidency. And the
difference is during that period of time six seven, eight years,
China has begun to take Trump's measure. China has begun
to understand Trump. China knows how to deal with Trump.
That may not always work, but that China has a
lot more confidence now than it did when it first
(11:04):
dealt with Trump.
Speaker 4 (11:05):
In Trump's first term.
Speaker 1 (11:07):
I was going to ask how much does that matter?
The majoring understands President Trump. I mean, I wonder how
long lasting the changes will be when it comes to
everything that he's setting up on the trade front, when
he's leaving in three years, or does the next government
also follow through?
Speaker 6 (11:23):
Well we no, No, It's a lot depends on the
internal politics United States. And so far President Trump's got
free reigned. He virtually controls all three branches of government,
even to some degree the Supreme Court. Now, there could
be election changes in twenty twenty six November midterm elections.
In if either House, the Senate or the House for
(11:47):
Representatives turns Democrat, that's going to very dramatically change Trump's
control over not only the United States but also the world.
That's a big potential watershed development.
Speaker 2 (11:58):
That's Max Baucus. He is former US Ambassador to China,
speaking earlier with Bloomberg TV host Cherry On and April Hong.
Bringing it to you here on the Daybreak Asia podcast.
Welcome back to the Daybreak Asia Podcast. I'm Doug Chrisner,
(12:20):
and as promised earlier, we'll take a closer look now
at the earnings from Apple and Amazon that were reported
after the bell. I'm joined now by Ross Mayfield. He
is investment strategist at Baird Private Wealth Management. Ross is
on the line from Louisville, Kentucky. Thank you so much
for making time to chat with me. I'd like to
begin with the earnings that we had after the bell,
(12:41):
Apple and Amazon. Breakdown what you think you heard from Apple,
because this China revenue figure I think obviously was disappointing
and that seemed to have rattled the stock of it
in late trading.
Speaker 8 (12:52):
It did obviously a big market.
Speaker 9 (12:55):
It's still a lot of interlinkages between Apple and China,
but I think resilient domestic demand is the big story.
And you know, Apple gets lumped in as an AI
stock as a mag seven, but this is really a
retail business and they are still proving that they have
(13:16):
the goods when it comes to pushing product and beating
estimates on that front. So I think the China news,
as you mentioned, disappointing, but I think there's going to
be a lot of disappointing quarters for companies operating in
China over the next couple of years. So it's good
to see that the domestic revenues and domestic sales can
backfill a little bit.
Speaker 2 (13:34):
Yeah, and Apple also with an upbeat forecast for the
current quarter, the holiday season quarter. Apple is expecting revenue
to rise between ten and twelve percent for the current quarter.
That seems to be pretty strong given everything that you're
describing that this is essentially a high end consumer products company.
Speaker 8 (13:54):
Yeah, exactly. I mean, I think for a lot of
this quarter, if not.
Speaker 9 (13:58):
You know, most of this year, we've been consistently waiting
for the consumer to slow, to stop spending, and there's
been a little bit, there's been hiccups. It hasn't been perfect,
but by and large, the consumer socks have been strong
and the consumer has continued to chug along, particularly as
you mentioned, the high end consumer, you know, bolstered by
(14:18):
the wealth effect, strong stock market, strong housing prices, a
lot of home equity, but ultimately underpinned by a job
market that you know, isn't hiring as many people, but
isn't really firing either, and wage growth is still strong.
So it's not the perfect consumer environment, but it is
it is good enough and for a company like Apple
obviously able to capitalize on a decent consumer backdrop heading
(14:40):
into the holidays.
Speaker 2 (14:41):
So we also heard from Amazon the company's cloud unit
with its strongest growth rate in nearly three years, Amazon
Web Services with revenue of thirty three billion, and that
represents a twenty percent increase from the prior year. What
does this say to you about the way that Amazon
is dealing with this AI trade right now?
Speaker 8 (15:00):
I think it's exactly what the market needs.
Speaker 9 (15:03):
Obviously, we got the update from Nvidia at GtC the
other day, but all of these updates around AI prove
that this theme continues a pace, that there's real money,
real demand, real spending, real earnings, that it is, in
my opinion, not close to a bubble, that it is
underlied by very real fundamentals.
Speaker 8 (15:23):
And when you see companies.
Speaker 9 (15:26):
At the size of Amazon and Nvidia still beating estimates
like this and having blowout quarter after blowout quarter in
the AI linked areas of their business, I think it
proves that we're still early in this AI cycle. I
think the calls for a bubble, while understandable, are a
little bit.
Speaker 2 (15:43):
Misled, maybe premature. Do you think will eventually burst the bubble?
Speaker 8 (15:48):
Sure, yeah, I think probably.
Speaker 9 (15:50):
I mean, anytime you have a new technology, you get
an enthusiasm, you get a lot of spending without one
hundred percent certainty on what the end product or you know,
the software stat on top of it entirely looks like
so we might get there one day.
Speaker 8 (16:04):
But certainly I think the fundamentals have matched.
Speaker 9 (16:06):
Most of the price increases right now, at least in
the big AI link stocks. And then I don't, you know,
it's a little bit more anecdotal, but I don't sense
the kind.
Speaker 8 (16:14):
Of broad enthusiasm or euphoria.
Speaker 9 (16:17):
It still seems to me like there's a lot of
trepidation around this theme. And to me that means we're
not in a bubble yet. I mean, it's very much
a psychological thing, and I just don't see it yet.
Speaker 2 (16:28):
Okay, fair enough. There has been some concern express though
about the ROI, the return on investment, and whether or
not users ultimately are willing to pay for the services
that are offered in these kind of AI systems. Is
that a reasonable kind of concern to have?
Speaker 8 (16:45):
Yeah, absolutely, I don't think.
Speaker 9 (16:47):
Just because I do think that we're not in a
bubble yet and that this theme could continue, I do
think it's fair to question what is the use case
for businesses across different sectors. I mean, we've seen so far,
you know, upticks and productivity.
Speaker 8 (17:02):
We're seeing a.
Speaker 9 (17:03):
Rapid advancement in agentic AI and other use cases for
this technology, and particularly, I mean, the important thing is,
all right, we're seeing the tech companies that are deeply
involved with this technology see growth, see revenue growth, ce
stock price appreciation. What does it mean for a consumer
staples company? What does it mean for an industrials company?
(17:23):
What does it mean for a small business in Louisville, Kentucky. Right, So,
it will be important to build the software layer on
top to see what the use cases are that unlock
the next layer of productivity. But I think it's too
early to determine that that's not you know, that that
won't happen or that's not being seen yet.
Speaker 8 (17:42):
There are plenty of examples.
Speaker 9 (17:44):
If you, you know, listen to some of these earnings
calls of companies finding really useful ways to for all
out AI products.
Speaker 2 (17:50):
Ross We're getting some breaking news by way of Reuter's
The company is reporting that Netflix is actively exploring a
bid for Warner Brothers to discovery both the studio and
the streaming business. How are you feeling about the media
landscape right now? Are there opportunities where you would put
money to work here. I know that some of these
(18:11):
businesses are referred to as legacy media, and maybe you
don't believe it represents an opportunity, But I'm wondering how
you're thinking more broadly about media stocks in general.
Speaker 9 (18:22):
Yeah, I think the media landscape is changing kind of
drastically underneath our feet. I mean the post COVID shift
in how people view going to the movies in the
cost of doing so. So anytime there's massive change, I
think there's opportunity. Now I'm hesitant to get involved with
the stocks doing big mergers, big acquisitions, you know, especially
(18:45):
if they involve taking on.
Speaker 8 (18:46):
A lot of debt.
Speaker 9 (18:46):
It's often a really hard hurdle to overcome. This would
be a big bite at the apple for a company
like Netflix. But I think there's plenty of opportunity here.
I mean even looking you know, not to say that
something Google is some unheard of company or undiscovered company,
but if you look at their results and see you
know what.
Speaker 8 (19:06):
YouTube is doing.
Speaker 9 (19:07):
I mean this is this is in theory or at
least adjacently a media company, and it's it's seeing rapid growth.
So I think the landscape is changing, the demographics are changing,
but there's plenty of opportunity out there.
Speaker 8 (19:22):
I'm a little.
Speaker 9 (19:23):
Hesitant about big acquisition. So that's just kind of a
rule of thumb across all industry.
Speaker 2 (19:28):
So we had the FED rate decision on Wednesday and
a message from FED Shaer J. Powell where he kind
of pushed back on this idea that we may see
or it's a foregone conclusion that we will see a
December rate cut. Does do you think that represents a
significant headwind for the equity market, the idea that a
rate cut in December maybe off the table.
Speaker 8 (19:49):
I don't think so.
Speaker 9 (19:50):
I think broadly, directionality is more important than the pace
or the timing. So the fact that we know the
FED is like likely to continue cutting rates is the
more important thing than whether we get one in December
or not. I also think, you know, I understand chair pals,
you know, impulse to kind of tamp down some of
(20:10):
the rakehead speculation and maybe try to let a little
air out of the equity market or some of the speculation.
I understand that impetus fully, but I think it's still
likely we get a rake cut in December. I think
the labor market data that the FED is seeing kind
of demands it. The lack of upside pressure from inflation
(20:32):
demands it. And quite frankly, they're just even if we
were at a neutral place, the FED, the FED funds
rate is still in restrictive territory, so I think it
makes sense for them to at least get back to
a neutral stance and then evaluate the landscape from there.
So as long as we don't get to December, and
even if the FED doesn't cut, as long as we're
not hearing hawkish language about pause or potential hikes down
(20:54):
the road, I think the equity market's going to be
just fine with the FED stance.
Speaker 2 (20:58):
Okay, Ross, we'll leave it there. Thanks so much. Ross
Mayfield is the investment strategist at Baird Private Wealth Management.
Joining today from Louisville, Kentucky 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. You
(21:21):
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
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