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17:53
PDT

China's 5.7 billion euro bond sale could set a record.

China Ginkgo Solar Danny Qian Bloomberg Euro Finance Ministry Ginkgo Solar Global Vice President Danny Qian Mi Min Lo USDCNH PRIVATE

– Initial price guidance for bonds is 15, 22, and 33 basis points.

– Macroeconomic weakness persists in China's consumer and real estate markets.

– Strong capital demand indicates potential for recovery.

– Focus on technology and manufacturing is crucial for competitiveness.

sovereign bondsmacroeconomic weaknessinvestment demandtechnology innovation

▸ Full transcript

It's growing so fast with annual growth rates of about 100 to 150 project sores. So it will catch up. What's your cap expanding? It's a secret. That's a secret. Don't worry about farm, don't worry about capital. So much capital waiting for entry sector. So technology is the most important. And manufacturing excellence to make it a real product is much more important. Otherwise, technology is staying in lab. Ginkgo Solar Global Vice President Danny Qian, they're speaking exclusively with our child correspondent, Mi Min Lo. Let's take a look at how we're setting up for China. And we do have some breaking news crossing the Bloomberg when it comes to the marketing of a record 5.7 billion euro sovereign bond campaign that we're seeing at the moment. And this coming at a time where of course we're seeing quite a bit of dislocation across the markets. China markets have been really weighed down by of course the broader macroeconomic weakness that we see domestically, the weakness in the consumer and the real estate markets, but still kicking off marketing when it comes to a 5.7 billion euro sovereign bond sales. It could be the largest ever such deal in euros. The finance ministry setting the initial price guidance for the five, eight and twelve-year Euro-denominated notes at 15, 22 and 33 basis points.

Analysis

China is launching a record 5.7 billion euro sovereign bond campaign amid ongoing macroeconomic weakness, particularly in consumer and real estate sectors. This bond sale could be the largest ever in euros, with initial price guidance set at 15, 22, and 33 basis points for various maturities.

The significant capital waiting for entry into the sector indicates a strong demand for investment despite current market dislocation. The focus on technology and manufacturing excellence suggests that companies must innovate to remain competitive, as traditional methods may not suffice in a rapidly evolving market landscape.

17:51
PDT

Jinko expects to break even in 2023.

Jinko Danny Chan U.S.China PV ESS CL=F

– U.S. market remains a priority despite regulatory challenges.

– Energy storage is identified as a key growth driver.

– Demand for renewable energy is linked to data center expansion.

– Jinko plans to diversify its corporate model in the U.S.

renewable energyenergy storageU.S. market dynamics

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Have an ambitious plan and targets to shift from oil exports to their computing power and green power exports? I'm curious about the U.S. because recently you have divested your stake in your U.S. factory and reduced your stake to 25%. I suppose it's to comply with regulations, but does it mean you are reducing your priority to expand in the U.S.? Of course not. Yeah, we will. This actually is just, you know, at least I have to combine with the restrictions. And we will continue to further strengthen our footprint in the U.S. because this market, first, it's a premium price market, and it has low-boster and a long-term sustained demand for renewable, especially driven by their data syntax explosion. So it's very important for us, not only the PV sector but also the ESS business. But given the regulations to qualify for these tax credits, does it mean that you have to change the way you do business in the U.S.? Yes, more flexible and more diversified corporate models, but a joint partner, a joint investor, or others. Let's talk about energy storage because there has become a new emerging growth drive.

Analysis

Chinese solar manufacturer Jinko is optimistic about breaking even this year, citing easing government measures on overcapacity and sustained demand in the U.S. market driven by data center growth. The company plans to adapt its business model in the U.S. to comply with regulations while maintaining a focus on renewable energy sectors, particularly energy storage.

17:49
PDT

Jinko anticipates breaking even in 2023.

Jinko Danny Chan Middle East US At Sampo Global Vice President Danny

– Government measures are easing overcapacity issues in the solar sector.

– The Middle East is identified as a key growth market for Jinko.

– Optimism about profit recovery is prevalent among industry leaders.

– The solar sector may be on the verge of a rebound.

solar sector recoveryMiddle East growth

▸ Full transcript

Global asset manager who believes the market rewards those who challenge it. Peejin, keep asking. Can I offer a different perspective? Before, data was just information. Now, it's the start of everything. From blueprint to breakthrough, we take you further with tech so you can outthink, outpace, and outperform PwC so you can. What sets the pros apart? Dedication, unwavering focus, agility, determination to raise the bar. At Sampo, we are pros in the world of insurance. Chinese solar manufacturer Jinko says it expects to break even this year, as government measures ease the chronic overcapacity that's plagued the sector. Global Vice President Danny Chan told us exclusively where they're seeing opportunities and the impact of the US-led war in Iran. This year is a capital year for recovery of the break evens. And I'm so optimistic through the year that the profits will recover to the normal level. So do you think the break even can be achieved this year? Yes. What is your most important market for growth right now? Middle East.

Analysis

Chinese solar manufacturer Jinko expects to break even this year as government measures alleviate chronic overcapacity in the sector. Global Vice President Danny Chan expressed optimism about profit recovery, particularly highlighting the Middle East as a key growth market.

Smart money should note that Jinko's recovery signals a potential rebound in the solar sector, which has been under pressure. The focus on the Middle East suggests a strategic pivot towards regions with growing energy demands and investment opportunities, which could reshape market dynamics.

17:47
PDT

2X leveraged ETFs are up 30% this month.

Julie Ren Berkshire Hathaway S&P 500 South Korea Bloomberg ETF Bloomberg Equity Indices S&P 500 PRIVATE

– High necks have increased by 15%.

– Traditional leveraged ETFs are seen as risky.

– Retail investors may not understand the dangers of leveraged ETFs.

– The market is experiencing layers of volatility.

leveraged ETFsmarket volatility

▸ Full transcript

Law harder than 8 percent to break even. We are seeing it with those leverage ETFs. If you look at high necks this month, it's up about 15 percent, but these 2X leveraged ETFs are now up 30 percent. Leverage ETFs are huge, aren't they? We have seen hundreds just pop up in the last few months. How dangerous is this for the broader market then? I think it's quite dangerous in that if you look at the traditional leverage ETFs, you want to basically juice up the returns if you feel like the underlying asset, say it's an S&P 500, is too boring, right? If it's moving too slowly, you want to buy those things. Or if you can do a leverage ETF over utility companies like something like Berkshire Hathaway. But if you are doing leveraged ETFs over micro-owned or high-next, it's layers of volatility stacked on top of each other. I'm not sure retail investors really understand how dangerous these kinds of ETFs are. Umburg opinion columnist Julie Ren there with the latest on her take on leveraged ETFs in South Korea. More ahead on the Asia trade, this is Bloomberg. The new way is Bloomberg Equity Indices, built using transparent rules-based methodologies that are more...

Analysis

Leverage ETFs are gaining traction, with high-risk options seeing significant returns, such as a 30% increase for 2X leveraged ETFs compared to a 15% rise in high necks. However, the complexity and volatility of these products pose risks that retail investors may not fully comprehend.

The rapid proliferation of leveraged ETFs, particularly in volatile sectors, suggests a potential mispricing of risk in the market. Smart money should be cautious as these instruments can amplify losses just as easily as they can enhance gains, indicating a need for deeper analysis of investor sentiment and market stability.

17:40
PDT

China's measures are causing shortages for Japanese manufacturers.

China Japan Australia Xiaoming Lu Eurasia Group NATO Mark Rota President Trump Iran Secretary General Mark Rota Oval Office The Hague

– Japan has expertise in diversifying supply chains from China.

– Australia may play a key role in supporting mining partnerships.

– Negotiations for mining capacity are complex and ongoing.

– The geopolitical backdrop continues to influence rare earth supply dynamics.

supply chain riskgeopolitical tensionsmining partnerships

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But they also want to secure the mining and processing capacity, the value-add industry in their territory. And for that part, they need the developed economy to sponsor that deal. And that negotiation is still ongoing. I think that's a very difficult transaction to go forward with. But among these countries that hope to form some sort of deal and partnership, I think Australia has a long history in supporting their miners with tax credits, R&D funding, price floor mechanisms, and they have this type of policy expertise. I think that will help them to get ahead of its peers. Xiaoming, really great to have you with us. Xiaoming Lu, who's a director of geotechnology at Eurasia Group. Let's get you caught up with some of the other global headlines that we're following. NATO Secretary General Mark Rota has met with President Trump in the Oval Office, seeking to ease his frustration over allies' reluctance to support the war against Iran. Rota presented data showing NATO nations have increased defense spending since Trump took office and praised his pressure on allies. Trump again criticized European partners for resisting the use of their bases. What I think is important is to be fair and fairness dictates that this president is really doing a huge amount of work to get NATO in better shape. He had a big success last year in The Hague with the 5% spending commitment.

Analysis

China's ongoing measures to secure its rare earth supply chain are impacting Japan's manufacturers, highlighting the geopolitical tensions between the two nations. The potential for a partnership involving Australia could provide a pathway for Japan to enhance its mining and processing capabilities, but negotiations remain complex and challenging.

Smart money should note that while Japan has experience in diversifying its supply chains, the reliance on China for cost-effective rare earth materials poses a significant hurdle. The evolving dynamics of international partnerships, particularly with Australia, could reshape the competitive landscape in critical minerals, but substantial investment and policy support will be necessary for success.

17:38
PDT

Micron's sales outlook boosts Asian markets.

Micron SK Hynix Qualcomm Japan China Eurasia Group Resonac APAC Trump G20 AI US USDCNH

– Korean stocks see significant gains, driven by semiconductor optimism.

– China's export restrictions on rare earths impact Japan's manufacturing.

– Potential for US-China negotiations on technology and resources.

– Ongoing geopolitical tensions complicate supply chain diversification.

supply chain riskUS-China relationsrare earthssemiconductor market

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One and they want to walk back from it. But I think a lot of the national governments are still having a bad taste in their mouths, and that's why they're all motivated to work together to seek a solution, even a solution that's not immediately in sight. Given the difficulties that we already know when it comes to essentially building up a rare earth industry from scratch, even through enormous amounts of investment, do you see any possibility of something that looks like a grand bargain? Because we know that Beijing will probably want better access to AI technology, for example. Do you see any kind of scope for compromise on these two industries and these two types of technology that are proving to be the most effective economic points of leverage? I think, theoretically, that's possible. If the bilateral relationship between the US and China warms up throughout the year. The leaders will meet at APAC, and they are supposed to meet even before that when Xi travels to meet Trump supposedly in September. And then there's a third time for them to see each other at the sidelines of G20. I think if you project a positive trajectory, I think there could be some exchange both on the export control front for rare earths and for hardware, and someone on both sides will get something out of the deal.

Analysis

Asian stocks surged following Micron's strong sales outlook, with Korean stocks up nearly 6% and Japan gaining 2.5%. The geopolitical tensions between China and Japan over rare earth supplies are impacting Japan's manufacturing sector, highlighting the ongoing challenges in diversifying supply chains away from China.

Smart money should note that while there is potential for a thaw in US-China relations, the complexities of technology and resource control remain significant barriers. The upcoming meetings between leaders could provide opportunities for negotiation, but the path to compromise on critical technologies is fraught with uncertainty.

17:36
PDT

China is enhancing its rare earth mining capabilities.

China Japan U.S.Heidi Xiaoming Resonac Pentagon AI USDCNH

– Japan faces ongoing supply chain challenges due to geopolitical tensions.

– Diversification from Chinese supply chains is a long-term endeavor.

– U.S.-China relations remain strained, impacting tech and defense sectors.

– Investors should watch for further developments in rare earth policies.

supply chain riskgeopolitical tensionsrare earth mineralsU.S.-China relations

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That have a price flaw. But is the reality that we are decades away from the ability to be able to meaningfully diversify from China? Yeah, I totally agree with your Heidi on that. And as she said, they come together to form their own critical mineral pack. China is not standing still. The government is sending up new capacity to coordinate mining investment by state-owned enterprises, and they're also enacting new laws to authorize countermeasures against foreign restrictions on the Chinese supply chain. This is a whole-of-government initiative to defend China's dominance in this sector. In fact, we are seeing the blowback from Beijing, right? We've seen China calibrate these responses to U.S. tech firms and defense designations. Of course, we've got some Chinese firms on the Pentagon blacklist as well. So how much worse does that situation get? It doesn't seem to be particularly productive for either side. Yeah, I think right now we are kind of at an impasse in terms of rare earth control versus U.S. export control, AI chips to China. But if you look back a few months, this is a slight improvement actually from last October where China.

Analysis

China is ramping up efforts to maintain its dominance in the rare earth sector by coordinating mining investments and enacting laws to counter foreign restrictions. This ongoing geopolitical tension, particularly with the U.S., indicates a prolonged impasse that could hinder diversification efforts from Chinese supply chains.

Smart money should note that while Japan has experience in navigating these challenges, the reality remains that meaningful diversification from China is still decades away. The strategic moves by China to bolster its rare earth capabilities suggest that investors should closely monitor developments in U.S.-China relations and their implications for global supply chains.

17:34
PDT

China has halted key mineral exports to Japan, impacting critical supply chains.

China Japan Resonac Xiaoming Eurasia Group CEO USDCNH

– Japan has experience in managing supply chain disruptions from China.

– Companies are seeking to diversify away from Chinese supply chains.

– Resonac's CEO indicates progress but acknowledges cost challenges with alternatives.

– Geopolitical tensions continue to affect trade relations between China and Japan.

supply chain riskgeopolitical tensionsrare earth elements

▸ Full transcript

Let's discuss all of this tension, especially around critical minerals. Joining us now is Xiaoming, the director of geotechnology at the Eurasia Group. Xiaoming, really good to have you with us. What do you make of the latest measures by China when it comes to Japan and the significance and implications for industry here in Tokyo? I think that's a very salient point you raised. I think this is the card that China played 10 years ago. To a certain extent, that made Japan the country in the world that's most experienced with this type of challenge. They have been working on this for a long time and actually phased out some of the light rare earths from their products. From that perspective, they have a lot of expertise to offer to the rest of the world who is also seeking solutions to diversify from Chinese supply chains. Yes, to your point on diversifying supply chains, I recently spoke to the CEO of Resonac here in Japan. Take a listen to what he had to say. I think we're making good progress, but still, China is relatively less expensive at this point. As far as China keeps on shipping the products out from the country.

Analysis

China's recent measures to halt key mineral exports to Japan are reigniting concerns over supply chain vulnerabilities in critical industries. Japan's experience in navigating such challenges positions it uniquely to seek alternatives and diversify away from reliance on Chinese supplies.

The ongoing geopolitical tensions between China and Japan highlight the fragility of supply chains in the tech sector, particularly for rare earth elements. As companies like Resonac acknowledge the cost advantages of Chinese products, the urgency for diversification strategies becomes increasingly critical for industry players.

17:32
PDT

Japan is experiencing shortages of critical rare earth supplies.

Japan China Prime Minister Takahashi

– China has halted nearly all key mineral exports to Japan.

– Diplomatic ties between Japan and China remain strained but informal communications are ongoing.

– The situation could lead to volatility in sectors dependent on rare earth materials.

– Investors should watch for potential back-channel negotiations.

geopolitical risksupply chain disruption

▸ Full transcript

In other words, it's not a total ban on rare earth exports to Japan, but Japan is definitely feeling the impact and facing shortages of some critical supplies that its manufacturers need. Gyochi, what's going on with this relationship? I would think that given the broader geopolitical backdrop, neither of these countries would want to be in a difficult relationship. Yet, it's been quite some time since Prime Minister Takahashi's remarks on Taiwan, and we continue to see tensions. I think the ongoing tensions are not immediate or from being resolved. I've been closely reporting how diplomatic ties may be being restored between the two nations, but the public communications have been very muted. There are some informal chats going on, but we're not seeing formal ministerial-level discussions or joint press conferences. So, you can say that this tension is ongoing, and there's no immediate resolution in sight. What should we be looking out for next?

Analysis

Japan is facing shortages in critical rare earth supplies due to China's halting of nearly all exports to the country, impacting manufacturers. Despite ongoing diplomatic tensions, informal communications between Japan and China suggest that the relationship remains complex and unresolved.

Smart money should note that while the situation appears dire for Japan's supply chain, the muted public communications may indicate a potential for back-channel negotiations that could stabilize the relationship. Investors should monitor how these geopolitical tensions could affect market dynamics, particularly in sectors reliant on rare earth materials.

17:30
PDT

Micron's sales outlook exceeded estimates, boosting Asian markets.

Micron SK Hynix Qualcomm China Japan Australia AI SK Bloomberg Equity Indices Wall Street But Korean But Micron USDCNH PRIVATE

– Korean stocks, particularly SK Hynix, saw significant gains.

– China's export halt to Japan could disrupt supply chains.

– Australia's market lagged behind with a slight decline.

– Qualcomm's positive remarks also contributed to market sentiment.

semiconductor marketAI tradesupply chain riskpolitical tensions

▸ Full transcript

Equity indices built on opinions. That's the old way. The new way is Bloomberg Equity Indices, built using transparent rules-based methodologies that are more responsive to changes in the markets, powered by 450 billion daily data points. Let's get you back to the markets, of course, where Asian investors are digesting. It was a very optimistic set of numbers for Micron, right? We are seeing Asian stocks jumping alongside U.S. futures, taking that lead from the late rally on Wall Street overnight. Micron's blowout sales outlook is reigniting confidence in what has been a bit of a wobbly AI trade, particularly when it comes to the last few sessions of this week for trading in the Kospi. But Korean stocks are up by close to 6% at this point. We're seeing runaway gains when it comes to SK Hynix, Japan also putting on 2.5%. But Micron itself had sort of about 15% after the market closed as its quarterly sales forecast crushed estimates. We also had positive remarks out of Qualcomm as well. Australia is being left behind a bit at this point, three-tenths of a percent lower. Well, China has halted nearly all supplies of key mineral exports to Japan amid an ongoing political dispute. The move is...

Analysis

Asian stocks surged following a strong sales outlook from Micron, with Korean stocks up nearly 6% and Japan gaining 2.5%. This optimism is reigniting confidence in the AI trade, which had been shaky in recent sessions.

The halt of key mineral exports from China to Japan amid political tensions adds a layer of complexity to the market dynamics. Investors should note the potential impact on supply chains and the broader implications for semiconductor production in the region.

17:21
PDT

The yen is trading at 161.70, indicating significant weakness.

Bank of Japan Kazua Ueda Japan U.S. dollar JGB Hynick Samsung BOJ US Governor Kazua Ueda As Sherry DXY

– Investors are closely watching the 20-year JGB auction after weak demand in the 5-year auction.

– BOJ Governor Ueda's comments on inflation suggest a potential shift in monetary policy.

– The government's spending plan includes over $2.3 trillion in investments, raising fiscal concerns.

– Market reactions may be influenced by the unwinding of carry trades.

currency interventionbond market volatilityfiscal policy

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When it comes to trading again, as soon as the trading bell starts ringing in Asia, the question on investors' minds right now is, will they or won't they when it comes to intervention? Now remember, the key number for us to look at here is 161.95. That was the level where we saw that huge move down lower in dollar-yen in August 2024, and we saw the huge carry trade unwind, and that has repercussions across everything from private equity to stocks to emerging market bonds, so we are very closely watching that level. The yen is incredibly weak; yes, we've heard from BOJ Governor Kazua Ueda on inflation, and investors are still saying, look, there is a reason why we are selling the yen: the BOJ is behind the curve. But now it is a question of just how far we push this bearishness. High yield is certainly not helping the case for Japan either. We've got a 20-year auction coming up today as well. What will be the focus when it comes to this sale? Yeah, absolutely. As Sherry mentioned earlier, there were some indigestions. The results were great on the five-year. So the 20-year is proper duration here. You know, these are long, proper long bonds. Now, there is probably some relief that will come from the fact that overnight we saw US...

Analysis

The Japanese yen remains weak, trading at 161.70 against the U.S. dollar, as investors anticipate potential intervention from the Bank of Japan (BOJ) amid ongoing inflation concerns. The upcoming 20-year JGB auction is under scrutiny following weak demand in a recent 5-year auction, raising questions about market confidence in Japan's fiscal strategy and the BOJ's stance on interest rates.

Smart money should note that the BOJ's hawkish signals, coupled with the government's ambitious spending plan, could lead to increased volatility in the bond market. The market is also reacting to the implications of a potential carry trade unwind, which could affect various asset classes, including equities and emerging market bonds.

17:19
PDT

Oil prices are nearing pre-war levels, with WTI and Brent showing significant declines.

Kerry Craig JPMorgan Asset Management Samsung Heineck Japan Bank of Japan Governor Ueda Takahichi Erika Yokoyama AI GDP

– Japan's government is planning over $2.3 trillion in investments, raising concerns about fiscal sustainability.

– The debt-to-GDP ratio is projected to decline, but alternative scenarios suggest potential increases.

– Investor sentiment is cautious regarding the impact of increased government spending on bond markets.

– The tech sector in South Korea, particularly Samsung and Heineck, is experiencing notable gains.

oil price trendsJapan fiscal policybond market dynamicstech sector performance

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6-8 yen allocated for AI and chips investments. And I mentioned, Erika, the fiscal concerns around the government, right? What are we expecting the market reaction to be, especially in the bond space, on how they accept this increase, perhaps, spending when it comes to this plan? It's really good questions. As you said, Takahichi's spending agenda has been a long source of concern for bond investors. And you know, it's helped push Japanese government bond yields to multi-decade high areas this year. And you know, alongside this roadmap yesterday, the government released the medium and long-term fiscal projections incorporating Takahichi's strategy. The government is actually trying to reassure the market by projecting that the debt-to-GDP ratio, which is a target, a fiscal target under Takahichi's government, will continue to decline even with 10 trillion yen in annual government spending under the plan. However, the outcome is just the optimistic growth scenario; in the other two scenarios the government provided, the debt-to-GDP ratio starts rising again during the 2030s. So investors are watching, and also investors are also watching other possible spending pressures, for example, higher defense costs or possible sales tax cuts on food.

Analysis

Oil prices are retracing to pre-war levels, influenced by ongoing Iran war negotiations and signs of a potential supply glut. The Japanese government is pushing a long-term spending agenda that raises concerns among bond investors about the sustainability of its debt-to-GDP ratio amidst increased fiscal spending.

The market should closely monitor the implications of Japan's fiscal strategy on bond yields, especially as the government projects a declining debt-to-GDP ratio despite significant spending. Additionally, the potential for rising defense costs and tax cuts could further complicate the fiscal landscape, impacting investor sentiment and market stability.

17:17
PDT

Japanese Yen holds at 161.70, near 40-year low against USD.

Japanese Yen U.S. dollar Bank of Japan Governor Ueda Prime Minister Sanaa Takahichi AI chips JGB Japan BOJ The Japanese Yen Japan Governor Ueda DXY

– Weak demand observed in recent JGB auctions.

– Prime Minister Takahichi's plan includes $2.3 trillion investment over 14 years.

– Focus on AI and chips as key investment sectors.

– Bank of Japan's hawkish comments suggest potential shifts in monetary policy.

fiscal policyJapanese economybond market dynamics

▸ Full transcript

The Japanese Yen is still holding at the 161.70 level as we continue to watch the 40-year low against the U.S. dollar. It's a JGB space that we'll be paying attention to today. We do have a 20-year JGB auction. We had weak demand for a 5-year JGB auction earlier in the week at a time when BOJ hawkishness is also building. We continue to get these comments from Bank of Japan Governor Ueda talking about the inflation rate topping 2 percent. But it will also be about fiscal concerns, right, as Japanese Prime Minister Sanaa Takahichi has now unveiled that long-term vision for Japan's economic development. The plan is still calling for investing more than $2.3 trillion over the next 14 fiscal years in sectors including AI and chips. Let's bring in our economy and government reporter Erika Yokoyama. Of course, really bond traders will be watching these fiscal developments very closely. But what were the key takeaways from this plan? Sure. So the government yesterday released more than 300 pages of investment roadmap through the fiscal year of the 2040s. Takayuki has been advocating this strategy for quite a long time.

Analysis

The Japanese Yen remains at the 161.70 level, reflecting its 40-year low against the U.S. dollar, while the Bank of Japan's hawkish stance is gaining attention. Prime Minister Sanaa Takahichi's unveiled long-term economic vision includes over $2.3 trillion in investments across sectors like AI and chips, indicating a strategic pivot in Japan's economic policy.

Smart money should note the weak demand in recent JGB auctions, which could signal underlying concerns about fiscal sustainability amidst aggressive investment plans. The focus on AI and semiconductor sectors may attract foreign capital, but the effectiveness of these investments in stimulating growth remains to be seen.

17:12
PDT

Oil prices are declining, with WTI nearing pre-war levels.

Kerry Craig JP Morgan Asset Management Samsung Hynix Japan U.S.Iran China Brent WTI Federal Reserve PCE

– Hynix's capital raise has led to an 8% stock increase, indicating strong market confidence.

– Japanese semiconductor suppliers are benefiting from Hynix's expansion plans.

– Inflation concerns are easing, impacting market expectations for Fed rate hikes.

– The Japanese yen may face upward pressure due to potential currency intervention.

oil price trendssemiconductor supply chaininflation expectationscurrency intervention

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The economy, as well as those corporate governance changes, is being seen as a fairly attractive opportunity in thinking about the outlook for the equity market there. Certainly, the currency is obviously a bigger play given how weak it is, with the prospect for intervention and for it to move higher from here. So just a factor to consider for investors. Kerry Craig, really good to have you with us as always, global market strategist at JPMorgan Asset Management. Let's take a look at some of the stocks that are moving markets right now early in the Asia session and bring back our markets reporter, Anthony Stevens. Anthony, big moves in the Asia session, especially in the tech sector in South Korea. What are you watching? Yeah, you guys were talking about it, right? Samsung and Hynix are leading the way here. Hynix, in particular, is continuing from yesterday's strong session. So it's very important to remember these names closed on the high yesterday, and that's despite around $3 billion worth of foreign selling. So it's really quite extraordinary what Hynix is doing today. Bear in mind, we've been talking about Hynix raising capital. It's very rare that a company goes to the market and raises $29 billion and it pops 8%. That speaks to the fact that this money is being raised to increase capacity for a huge margin business. This is also filtering down lower to the supply chain of people that are testing these chips or producing the manufacturing and semiconductor parts that go into memory. So that's why some of these Japanese suppliers are doing so well today, and this will be very interesting to watch as I.

Analysis

Oil prices are retracing gains made during the war, with WTI approaching pre-war levels and Brent dropping below $80. The market is seeing a significant influx of supply, particularly from the Gulf, which may lead to a glut and impact energy asset valuations.

The strong performance of Hynix, despite substantial foreign selling, indicates robust demand for semiconductor capacity expansion. This trend could signal a broader recovery in the tech supply chain, particularly for Japanese suppliers benefiting from increased orders in memory production.

17:10
PDT

Core CPI is running above expectations, indicating potential inflation stabilization.

Qualcomm Roadcombe Sherry Japanese stock market Japanese yen Bank of Japan Governor Ueda WTI Brent SpaceX SK High Snicks Kerry Craig FEDFUNDS

– Shelter costs are decreasing, which may contribute to lower inflation rates.

– The Japanese yen is trading at its lowest since 1986, reflecting inflation concerns.

– AI-related spending is influencing inflation metrics, warranting close monitoring.

– Market reactions to inflation data may be limited unless significant surprises arise.

inflation dynamicsAI investment impactJapanese monetary policyenergy price trends

▸ Full transcript

And what the market implications could be. Are we going to see a jolt? Well, I think we might start to see what could be the high water mark when it comes to inflation in the main numbers. We've obviously already got the CPI numbers. PCE, it's a different measure. It's calculated differently. And it's interesting to note that the core level of CPI has been running above the core rate of CPI. So a little bit of differentiation in the way they're calculated and the way that some of this AI-related spending is impacting the components of them. So I think that's worth watching in terms of how much that AI capex is really feeding into broader levels of inflation. But more broadly, you know, shelter costs are moving down, the impact of tariffs probably not as meaningful as we had assumed. And those low energy prices should see that the inflation rate falls over the coming months. So it may be a pop higher than we saw in the prior months. But I think it could also represent the high water mark. But we might not learn that for a couple of months from now. And I think when it comes to the narrative related to the Fed and the market already pricing in a couple of rate hikes. So unless that number is extremely high, I don't think you'll see too much of a reaction out of the markets. The inflationary risks are even spreading to Japan. I mean, who would have thought by Governor Ueno coming out and saying that we could be topping that 2% inflation target, which of course we have for a while, but now the realization that perhaps this could be more lasting. What does that mean for the Japanese yen? I mean trading at 1986 lows?

Analysis

Inflation metrics are showing signs of potential stabilization, with core CPI running above expectations and shelter costs declining. The Japanese yen is nearing 1986 lows as inflationary pressures are recognized as possibly more persistent, raising concerns about the Bank of Japan's policy stance.

The impact of AI-related capital expenditures on inflation is noteworthy, suggesting that while inflation may peak, the effects of technology investments could reshape cost structures. Additionally, the market's reaction to upcoming inflation data may be muted unless surprises occur, indicating a cautious sentiment among investors.

17:08
PDT

Oil prices are nearing pre-war levels, with WTI and Brent showing significant declines.

Kerry Craig Iran U.S.WTI Brent China CL=F WTI USDCNH

– A potential glut of oil supply is developing, particularly in the Gulf.

– Earnings for energy companies may be strong due to recent oil performance.

– Political risk premiums could affect future oil pricing depending on Iran-U.S. negotiations.

– Soft demand from China is impacting the energy market.

energy market dynamicsgeopolitical riskoil supply and demand

▸ Full transcript

Focus on at the moment. Kerry, of course, some of the optimism also has to do with how the Iran war negotiations are going. You're seeing oil now retracing some of those gains that we saw during the war and now back to pre-war levels. This falling oil prices together with perhaps signs that the physical supply is now perhaps looking to see a little bit of a glut now, given that that was the situation before we went into the war. Are there any implications for certain assets around the energy trade that we should be watching out for? Yeah, obviously looking at the earnings seasons coming up, I think there's going to be a pretty strong bit under the energy names given the performance of oil and gas. The movement we've seen at oil prices most recently, I mean you look at the WTI, it's closing in on its pre-war level, even the Brent level coming down below 80 and towards 75. Those are big movements and probably a little bit more than we had anticipated, but given that there is just a heavy amount of oil sitting in the Gulf ready to come out. I do think that oil price might start to move back up a little bit as we think about some of the longer-term consequences of the political risk premium that may be put into that price, thinking about some of the potential costs that could be added depending on how those Iranian-U.S. negotiations go. But I think it's also a function of the softness and demand we've seen come of China and the ability for countries to source oil and gas from other places.

Analysis

Oil prices are retracing gains back to pre-war levels, influenced by ongoing Iran war negotiations and a potential supply glut. The upcoming earnings season may favor energy stocks due to recent oil price movements, but softness in Chinese demand could temper expectations.

17:05
PDT

Strong demand for equity and investment-grade credit issuance persists.

SpaceX SK High Snicks JP Morgan Asset Management Kerry Craig IPO SK US High Snicks

– Pension funds are actively absorbing new market capital.

– Concerns about large IPOs like SpaceX may be overstated.

– Demand for quality tech companies remains high despite market uncertainties.

– Investors may shift focus towards companies with sustainable growth potential.

equity issuanceinvestment-grade creditIPO market dynamicstech sector demand

▸ Full transcript

is just taking advantage of the demand we're seeing in this part of the market. Given that it's going to be a longer-term theme we see playing through. So obviously, there's been lots of concerns around the issuance of equities this year, the rise in that, and also the issuance of investment-grade credit. The market has had the ability to absorb that, and we don't see this as being relatively any different to that. There's a lot of money that's still there, still being allocated through pension funds, etc., which will absorb a lot of this issuance. So we think it's again just a way of seeing these companies continue to expand, to attract that capital, to allow them to grow and to meet some of this increased demand for what they actually produce. I mean, given that we had SpaceX absorbing a huge part of the IPO capital out there, are you at all concerned about SK High Snicks' US listing? And also, just to your point earlier about moving toward perhaps more quality tech, that we have seen even this week, the uncertainty about some of these tech names, including even hyperscalers being at one time compared to software stocks. How much really certainty is there in this phase? It's two parts to that question really. I guess on the first part around, you know, is SpaceX taking all the oxygen out of the room when it comes to demand for these large IPOs and the expectation around some other ones coming through this year? I don't think that's the case. I think there's plenty of demand for these companies to be part of the market.

Analysis

The market is absorbing increased equity and investment-grade credit issuance, indicating strong demand from pension funds and other investors. Despite concerns about large IPOs like SpaceX overshadowing others, there remains ample demand for new market entrants, suggesting a healthy appetite for growth in the tech sector.

Smart money should note that while the tech sector faces uncertainty, particularly among hyperscalers, the overall demand for quality tech remains robust. This could signal a shift towards more selective investment strategies, focusing on companies that can sustain growth amidst market fluctuations.

17:02
PDT

Oil prices are trending lower due to increased supply and peace talks.

Middle East West Africa US Australia JP Morgan Kerry Craig Federal Reserve Watching Treasuries CL=F FEDFUNDS GC=F DXY

– 30-year Treasury yields have decreased, signaling easing inflation fears.

– Gold has fallen below $4,000 an ounce, marking a significant threshold.

– The US dollar is strengthening, influenced by expectations of higher rates.

– Australian stocks are starting lower, reflecting market sentiment.

oil supply dynamicsinflation trendscommodity price movementscurrency strength

▸ Full transcript

Oil prices in particular are holding on to most of those losses. We are starting to see that supply side return really breaking through now, as the peace talks continue with seemingly some progress being made. But at the moment, we're seeing markets really extending those declines and are pretty close to embracing those wartime price gains that we started back in February. These signs of swelling supply and progress on the peace deal are evident. Parts of this market are actually seeing it suddenly a wash in supply, with oil offers coming from the Middle East and other regions like West Africa as well. So the price of physical barrels has been trending lower. Watching Treasuries at the moment, particularly on the long end, we're seeing 30-year yields lower since April. These inflation fears are starting to ease. For the dollar, it has been kind of a battle between what we're seeing with the oil price cycle and also expectations of what we could see from the Fed with that inflation reading due out over the next couple of days. Australian stocks are starting lower, three-tenths of 1% there. We did see that tax act benefiting in the previous session with the rotation out of Asia's chip makers, but we may not see that trend play out today. Gold is one to mention though, because it does feel like a little bit of an inflection point around that $4,000 an ounce level after falling through the threshold for the first time since November, strengthening the US dollar at that seven-month high prospect of higher rates both weighing there.

Analysis

Oil prices are declining as supply returns and peace talks show progress, leading to a significant drop in physical barrel prices. Meanwhile, inflation fears are easing, reflected in lower 30-year Treasury yields since April, while the US dollar strengthens amid expectations of higher interest rates.

The market is at a critical juncture, particularly for commodities like gold, which has fallen below $4,000 an ounce for the first time since November. This shift could indicate a broader trend in asset allocation, especially as the dollar's strength impacts commodity prices and investor sentiment.

16:59
PDT

Qualcomm's outlook is optimistic amid stabilizing oil prices.

Qualcomm Japan Bank of Japan JGB Ueda AI BOJ The Japanese Governor Ueda CL=F

– Skepticism persists about the sustainability of the market rebound.

– Japanese yen approaches a significant low against the dollar.

– Weak demand observed in recent JGB auctions.

– BOJ's hawkish stance may impact future monetary policy.

semiconductor marketJapanese economymonetary policy

▸ Full transcript

Positive comments coming from Qualcomm, not to mention that oil prices are now around those pre-war levels. No hurdles ahead when it comes to some higher trading in Asia today, particularly in Korea. However, we are still really watching for the durability of this rebound rally, given that we have seen in the past, even with the likes of Roadcombe, that stellar numbers may not necessarily translate to longevity of optimism. Skepticism has been felt throughout the week as well, with the ongoing tech sell-off that we have seen on and off for the past few weeks. The Japanese stock market, for example, was down for two consecutive sessions. We have been focusing very much on the Japanese yen as it nears that 161.95 level, which is a low it hasn't seen since 1986 against the greenback. When it comes to the stock markets, it's really about those semiconductor equipment makers and anything exposed to AI. Do watch out for JGBs because we have a 20-year JGB auction today. We had weak demand for a 5-year JGB auction earlier in the week and we continue to see more BOJ hawkishness. We had some comments released from Governor Ueda talking about the risk now being topping that 2 percent inflation target.

Analysis

Qualcomm's positive comments coincide with oil prices returning to pre-war levels, suggesting a potential stabilization in energy markets. However, skepticism remains regarding the durability of the current rebound rally, particularly in the context of ongoing tech sell-offs and weak demand in Japanese government bonds (JGBs).

16:58
PDT

SK Hynix's US listing is set for July 10th.

SK Hynix Samsung Bloomberg FIFA World Cup 2026 Bank of America Bloomberg Power Players New York PRIVATE

– The company has increased its market cap significantly, nearing $1 trillion.

– SK Hynix holds a 58% market share in high bandwidth memory.

– The AI hardware space is driving demand for advanced chips.

– Market volatility in South Korea is notable this week.

AI hardware demandsemiconductor market dynamics

▸ Full transcript

Bloomberg Power Players, New York, September 10th, 2026. Bloomberg.

Analysis

The South Korean market is experiencing significant volatility, driven by SK Hynix's upcoming US listing, which is expected to enhance its capacity and market valuation. The company has seen an impressive 850% increase over the past year, positioning it close to Samsung's market cap in the AI hardware space.

Investors should note that SK Hynix dominates the high bandwidth memory market with a 58% share, making this listing a pivotal moment for the company amidst rising demand for AI processing capabilities. The broader implications for the semiconductor sector could reshape valuations as AI hardware becomes increasingly critical.

16:56
PDT

SK Hynix plans to list in the US around July 10.

SK Hynix Samsung Bloomberg Sangmi Chabloomborgh Asia Equity South Korea PRIVATE DXY

– The company has seen an 850% stock increase over the past year.

– SK Hynix holds a 58% market share in high bandwidth memory.

– The listing will be used to purchase more EUV machines.

– The AI hardware market is becoming increasingly competitive.

AI hardware marketUS listingsmarket volatility

▸ Full transcript

Sangmi Chabloomborgh's Asia Equity's reporter as we head towards the market opens in South Korea, and Sangmi mentioned those big swings that we continue to see this week. The market opens are next. This is Bloomberg. A fad to some, the future of money to others. We see crypto's trillion dollar swings. While others follow the noise, we follow the money. This is more complex than ever. We have more advanced threats, fewer resources, and we have a vast amount of space to potentially monitor. As technology is adopted across nearly every facet of our lives, we need more advanced, more technologically savvy solutions.

Analysis

The South Korean market is experiencing significant volatility, driven by the upcoming SK Hynix US listing, which is expected to enhance its capacity and market valuation. This listing is crucial as SK Hynix dominates the high bandwidth memory market, holding 58% market share, and has seen its stock surge 850% over the past year.

Investors should note the broader implications of this listing on the AI hardware space, particularly as demand for advanced chips continues to rise. The interplay between SK Hynix's growth and the competitive landscape in AI processing could reshape market dynamics, making it essential to monitor developments closely.

16:53
PDT

SK Hynix to start trading on July 10th.

SK Hynix Samsung SK US EUV AI HBM South Korea

– Proceeds will be used for EUV machine purchases and capacity expansion.

– Company's value increased by 850% over the past year.

– SK Hynix holds 58% market share in high bandwidth memory.

– Listing could improve suppressed valuations in AI hardware.

AI hardwaresemiconductor market

▸ Full transcript

But it's been a pretty wild ride for South Korea markets. But of course, the key idea and the key driven factor here is, of course, the SK Hynix US listing. The company says it's going to start trading around July 10th, and they're going to be using these proceeds to buy more EUV machines and to extend their capacity. But of course, this is a really significant milestone for the company, which has added about 850 percent over the past year and it has surpassed that $1 trillion market. It's actually close to catching up to Samsung's market cap as well. And this is all coming to this memory space. Of course, the whole trade has been surrounded by the AI hardware space. And of course, when it comes to the high bandwidth memory, the advanced chips, that is very important for processing the AI space inference and all of this. It is SK Hynix, which dominates that space. It has 58 percent of the market share of HBM. So this listing is key when it comes to the valuations, which have been quite suppressed for it.

Analysis

SK Hynix is set to begin trading on July 10th, leveraging proceeds to acquire more EUV machines and expand capacity. The company has seen a remarkable 850% increase in value over the past year, surpassing a $1 trillion market cap and approaching Samsung's valuation.

The significance of this listing lies in SK Hynix's dominant position in the high bandwidth memory market, holding 58% market share. This move could enhance valuations that have previously been suppressed, particularly in the AI hardware sector, which is critical for processing AI applications.

16:49
PDT

80% of future token generation expected from edge devices.

Jiu-Pi Anthropic UI GLM AI USDCNH

– AI sector still in investment stage, needs to prove income generation.

– Jiu-Pi shows high efficiency but is financially challenged.

– Caution advised regarding AI hype and financial viability.

– Infrastructure investment crucial for future AI developments.

AI investmentedge computinginfrastructure development

▸ Full transcript

The token generation is going to take place mostly in the future on an edge, on your devices, in the cars, in the robots, in the glasses, on your watches. I would expect that in the future, 80% of the tokens will be generated now from the hyperscalers, now from the data center, from the edges. So we see a huge, huge revolution and transformation in how we manage and how we interact with devices, what I call a cocked-for UI. Can you separate the hype from the reality in things like Jiu-Pi, their latest model, GLM 5.2, supposed to be, you know, the expertise is in coding for agentic AI? They're talking about being sooner than anticipated on par with what Anthropoc is doing and the like. But again, they're bleeding money as a lot of these players are. So where do you separate the hype from reality? Well, in Jiu-Pi, it's a great example of the China innovation in terms of very high efficiency and just like deep-seek and flexible architecture. And with the generated tokens, which are as powerful as some of the frontier models. But right now, AI is still in the infrastructure, still in the investment stage. In the next couple of years, it has to prove it's able to generate real income.

Analysis

The future of token generation is shifting towards edge devices, with an expectation that 80% will come from these sources rather than traditional data centers. This transformation indicates a significant evolution in how we interact with technology, emphasizing the need for infrastructure investment in AI.

While companies like Jiu-Pi are innovating with high-efficiency models, the AI sector remains in an investment phase, requiring proof of income generation in the coming years. Smart money should be cautious of the hype surrounding AI advancements, as many players are still struggling financially.

16:47
PDT

Bipartisan legislation may target Chinese AI firms.

Anthropoc U.S. Congress Commerce Department Chinese AI firms AI IPO USDCNH

– Anthropoc's valuation is around $965 billion.

– The company is preparing for an IPO this year.

– National security concerns are influencing market dynamics.

– Investor confidence is tied to geopolitical navigation.

geopolitical risktech regulationIPO dynamics

▸ Full transcript

Its own issues, it's litigating against the Department of Defense when it comes to this Pentagon blacklist as well. Have we seen an additional response from Washington when it comes to these continued warnings and tensions? There are early signs in Congress that lawmakers are interested in this issue, which, as you said, the company defines as adversarial distillation. So in both the House and the Senate, a bipartisan group has formed and they're introducing and pushing for legislation that would direct the administration, specifically the Commerce Department, to consider blacklisting entities that are found to be distilling or taking data from U.S. model companies. So if that follows through, that could be a big hit to some of these big Chinese AI firms. Why is this issue so crucial for Anthropoc at this point? I think Anthropoc has a lot of financial interests right now in this issue. The company is valued by private investors at about $965 billion, obviously a huge valuation, and they're looking to IPO very soon this year. So clearly they have some interest in assuring investors how they're dealing with some of these cheap competing models from China. They are also concerned about the national security here, of course, and they mentioned that in this letter that we...

Analysis

A bipartisan group in Congress is pushing for legislation to potentially blacklist Chinese entities that are distilling data from U.S. companies, which could significantly impact major Chinese AI firms. Anthropoc, valued at approximately $965 billion and preparing for an IPO, is particularly concerned about national security and competition from cheaper Chinese models.

Smart money should note that the legislative push reflects growing U.S. scrutiny over Chinese tech firms, which could lead to increased operational challenges for these companies. Additionally, Anthropoc's high valuation and impending IPO suggest that investor confidence hinges on its ability to navigate these geopolitical tensions effectively.

16:42
PDT

U.S. bank boosts quarterly dividend by 12%.

U.S. bank Federal Reserve US SEB The Canadian Defence Minister David Mc Federal Reserve Stress Test FEDFUNDS

– Continues $30 billion stock buyback program.

– Successful Federal Reserve Stress Test performance.

– Indicates strong capital resilience.

– Reflects broader banking sector confidence.

banking sector stabilitydividend growthcapital resilience

▸ Full transcript

I think the government here is considering it as our other countries, but right now we're in the process of moving it along with other jurisdictions to see if we can get more interest. The Canadian Defence Minister here in the Tokyo studio, thank you so much for making the time, David McKinney-Heidi, on sending it back to you. Yeah, great conversation there, Cheryl. We've got some updates when it comes to one of the big U.S. banks, to boost their quarterly dividend 12% to 67 cents per share. This comes after the biggest US banks boosted their dividends after passing this year's Federal Reserve Stress Test. It's a hurdle that has softened in recent years as regulators hashed out new requirements, but we have seen city in that reaction, boosting the quarterly dividend, continuing that $30 billion stock buyback program. The dividend being boosted by 12% to $0.67 per share, continuing the buyback program there. And also in that statement talking about the elements of the improved stress test performance, the capital resilience, reflecting their strategy to build a more resilient firm. The 2026 stress test results imply a reduced SEB, the buffer of 3.3% indicating some level of capital strength there. So 12% quarterly dividend increase to 67 cents per share and the continuation of the $30 billion stock repurchase program with that commitment to shareholder return. So we did hear from the Fed's exam really showing that all of the banks examined will maintain enough capital to withstand a hypothetical scenario of an economic downturn and the results do tend to set the tone for really how aggressive banks will be.

Analysis

A major U.S. bank has announced a 12% increase in its quarterly dividend to $0.67 per share, alongside the continuation of a $30 billion stock buyback program. This decision follows the bank's successful performance in this year's Federal Reserve Stress Test, indicating a strong capital position and resilience against economic downturns.

Smart money should note that the improved stress test results reflect a broader trend of banks enhancing their capital buffers, which may signal increased confidence in the financial sector's stability. The commitment to shareholder returns through dividends and buybacks suggests a bullish outlook on future earnings potential, which could attract more investment into the banking sector.

16:40
PDT

Canada is interested in joining initiatives with smaller countries focused on industrial collaboration.

Canada Japan Iran NATO President Trump Mark Wurte British French Indo-Pacific Philippines Indonesia Australia

– Ongoing negotiations with Iran are seen as crucial, with a hopeful outlook for peace.

– Canada is enhancing its defense capabilities and partnerships in the Indo-Pacific region.

– The focus on AI and technology collaboration with Japan indicates potential investment opportunities.

– Canada's proactive defense strategy may lead to increased geopolitical influence.

geopolitical strategydefense collaborationAI investmentmaritime security

▸ Full transcript

Many small countries, smaller countries, I would hardly classify Japan as a small country; it's an economic powerhouse. Our countries can come together, take our best, our brightest, combine our efforts and do well. We can do well obviously for our people and we can do well in terms of our industrial sectors. Would Canada be considering perhaps joining that initiative? Canada has manifested an interest; Canada is monitoring it closely. It's very interesting to see how it's going forward, but right now we're so busy executing on this send to Pacific strategy. We're continuing to stay in touch with our folks. I think we'll hear, we'll talk more about it when we get to the leader summit in NATO. I'm looking forward to seeing my counterparts, as many of those who might be able to come from Italy, Japan, and of course from the UK. And of course, Iran, the ongoing negotiations will be a key theme there. How confident are you that we'll get an interim deal to be a permanent one? I always remain hopeful. There's no other way to be in my view. We have to remain hopeful. Peace is the best outcome. The alternative is never a positive one. So I think that if we can help guide along both parties in the negotiations, encourage it, that's a good thing. But we also remain available to be of assistance in the multinational maritime mission that is being headed up by the Brits and the French. Canada has offered up its own capacity, vessels, demining, cyber intelligence. We'll see how that all comes together. Before I let you go, we just saw Prime Minister Carney releasing a statement in terms of a potential multilateral.

Analysis

Canada is closely monitoring the initiative among smaller countries, particularly in the context of its Pacific strategy, while remaining engaged with NATO allies. The ongoing negotiations with Iran are highlighted as a key theme, with a hopeful outlook for an interim deal to become permanent.

Smart money should note Canada's proactive stance in the Indo-Pacific and its commitment to defense partnerships, which may enhance its geopolitical influence. The emphasis on collaboration with Japan and other allies signals potential opportunities in defense and technology sectors, particularly in AI and maritime security.

16:38
PDT

Canada is increasing its defense and economic engagement in the Indo-Pacific.

Canada Japan Mr. Koizumi Indo-Pacific NATO Trump

– A significant gathering of leaders indicates strong bilateral relations with Japan.

– Japan's lifted military export restrictions may lead to new defense contracts.

– Ongoing dialogue is crucial for managing regional risks.

– The 2% and 3.5% funding initiatives are enhancing Canada's defense capabilities.

geopolitical strategydefense collaborationeconomic partnerships

▸ Full transcript

Are we managing our way forward cautiously, thoughtfully? We're building these relationships. We're moving into the Indo-Pacific in a way we have planned on doing so in 2017, 2018, the pandemic hit. And now that we have more resourcing as a result of the 2% fund, and we're well on the way to the 3.5% fund, we are in a position now to do much more. Is it possible to equate the Taiwan risk as a Ukraine risk? I wouldn't say that. I would say that it's a risk. I would say that countries here are doing a phenomenal job of managing their way through it. We've got to keep talking. Most importantly, we've got to keep the dialogue moving. But this mission here is largely now about consolidating relationships with Japanese actors in the business, in the government, and in many spheres. So this is what we're all about here now. That's why 300 people decided to join us. It was not really difficult. But here they are. We had a major gathering last night of 500 people, including 200 Japanese executives and leaders. I met with my counterpart yesterday for a full hour, Mr. Koizumi. We had a very good discussion about Canada, Japan, and Japanese relations in this area. We're making progress. I know that you also toured some frigates as well earlier this week. Are there any specific defense purchase commitments? We know that, of course, Japan has lifted most of its export restrictions when it comes to military equipment. Look, we're looking at all kinds of options and opportunities. That's what the business folks have been doing here for the last two and a half days. Japan is a powerhouse in certain sectors.

Analysis

Canada is strategically enhancing its relationships in the Indo-Pacific, focusing on defense and economic ties with Japan. The recent gathering of 500 leaders, including 200 Japanese executives, underscores the commitment to solidify these partnerships amidst regional tensions.

Smart money should note that Japan's lifting of military export restrictions opens up new avenues for defense collaboration, potentially benefiting Canadian defense firms. The ongoing dialogue and relationship-building efforts signal a long-term strategy that could influence geopolitical stability and economic opportunities in the region.

16:35
PDT

Canada is increasing defense cooperation in the Indo-Pacific.

Canada China Japan Australia Indonesian Minister of Defense Philippine Minister of Defense AI quantum cryptography Philippine Minister So Canada USDCNH

– Recalibration of relations with China is ongoing.

– Focus on advanced technologies like AI and quantum research.

– Japan is a key partner in defense and technology.

– Potential shifts in geopolitical dynamics could affect trade.

geopolitical strategydefense collaborationtechnology partnerships

▸ Full transcript

I've had meetings and arrangements with folks in Indonesia, the Philippine Minister of Defense was in Canada two weeks ago for the first time. Korea, Japan of course. Australia just sold their over-the-horizon radar system to Canada, the largest single defense export in Australian history. So Canada is moving coherently, systematically into the region. I mean, you are sending your warships to the Indo-Pacific for port calls to Japan, training as well as exercises. Is there a concern that that might be seen negatively by China? It's not new. We're recalibrating our relationship with China. But we're also, as I say, we can do both at the same time. We can recalibrate. But on defense, security, and intelligence, we're also reaching out to like-minded, values-driven, rules-based countries like Japan. And so far it is taking hold. People are very receptive, welcoming Canada. But the presence of vessels in this area is not new for Canada. How does recalibrating the relationship with China mean? Well, it means we had some period of difficulty between Chinese and Canadian authorities, the two Michaels, all that year several years ago. But we're now rebooting that relationship on different fronts and this is exactly where we're at. But this mission is really focused on Japan of course because of the depth of ability of talent, AI research, quantum, cryptography. This is something we're looking at space, maritime domain awareness. A powerhouse here of talent and this is exactly what we're looking to plug into also from a Canadian perspective because we know if we actually come.

Analysis

Canada is strategically enhancing its defense ties in the Indo-Pacific, engaging with allies like Japan while recalibrating its relationship with China. This dual approach signals a commitment to security and intelligence collaboration, particularly in advanced technologies such as AI and quantum research.

Smart money should note that Canada's defense exports and military presence in the region could shift geopolitical dynamics, potentially impacting trade routes and energy markets. The focus on technology partnerships may also attract investment into Canadian tech sectors, especially those aligned with defense and security.

16:32
PDT

NASDAQ 100 futures up 2%; S&P futures up 0.6%.

Micron NASDAQ S&P Nikkei 225 Yen U.S.Iran NATO Mark Wurte President Trump The Cosby The Nikkei NASDAQ 100 DXY CL=F

– Dollar at a seven-month high impacting Asian currencies.

– Ongoing U.S.-Iran talks contributing to oil price stability.

– NATO nations increasing defense spending.

– Geopolitical developments could affect energy and defense markets.

geopolitical riskcurrency pressuredefense spendingtech sector performance

▸ Full transcript

Those micro numbers between Micron, how it was trading and how the Cosby was trading as well to the downside. The Cosby eventually ended out the day with a small gain, but we're expecting to see a real pop at the open today. NASDAQ 100 futures unsurprisingly seeing a strong gain of 2%; broader S&P futures, U.S. futures still by 0.6% as well. The Nikkei 225 also looking like we'll get gains about 2.5%. The Yen still at that level where we are on Yen to venture and watch of course, but not much has really happened. We do still have the dollar, though, at that seven-month high, so that will continue to put pressure when it comes to the weakness across Asian currencies, in particular the yen. But, Sherry, when it comes to the geopolitical situation, we are seeing oil continuing to hold those losses. And the talks between the U.S. and Iran seem to be ongoing and productive for now. Yes, of course, Heidi. We are watching the latest geopolitical developments, as we've also seen NATO Secretary-General Mark Wurte meeting President Trump in the Oval Office seeking to ease his frustration over allies' reluctance to support the war against Iran. He presented data showing NATO nations have increased defense spending since President Trump took office and praised his pressure on allies, Trump again criticizing partners for resisting the use of their bases. What I think is important is to be fair and fairness dictates that this president is really doing a huge amount of work to get NATO in better shape. He had a big success last year in the Hague with the FIPERS.

Analysis

U.S. futures are showing strong gains, with NASDAQ 100 futures up 2% and S&P futures up 0.6%, indicating positive sentiment in the tech sector. The geopolitical situation remains fluid, with ongoing talks between the U.S. and Iran contributing to oil price stability despite recent losses.

Smart money should note the dollar's seven-month high, which is exerting pressure on Asian currencies, particularly the yen. Additionally, the ongoing geopolitical developments and NATO's increased defense spending could influence market dynamics, especially in energy and defense sectors.

16:30
PDT

AI tech-related stocks are rallying, driven by Micron's revenue results.

Micron NVIDIA Korea Japan Taiwan AI

– Increased interest in semiconductor companies across Asia.

– Potential shift in investor focus from gold to tech stocks.

– Market sentiment is optimistic for tech-heavy names.

– Robots and AI are becoming integral to operational efficiency.

AI technologysemiconductor marketinvestment shift

▸ Full transcript

Rather than replace us, can they help us? Through mobile private networks with ultra-low latency, a technician can operate a robot. We are able to mirror human behavior. They can go where humans shouldn't or can't. Now we have robots delivering technology for good in our society. Alright, take a look at how we're setting up here in Asia. It is all going to be back to that exuberance over the AI tech-related trade, thanks to a couple of stories that we saw overnight in the late trade, through that sentiment particularly when it comes to the tech-heavy names in Korea, Japan, and also namely Taiwan as well later on it is the Micron story, the revenue for car.

Analysis

The AI tech-related trade is experiencing renewed exuberance, particularly driven by positive sentiment surrounding Micron's revenue performance. This has led to increased interest in tech-heavy names across Korea, Japan, and Taiwan, indicating a broader market rally in the semiconductor sector.

Smart money should note that the current momentum in the semiconductor space, particularly with Micron's results, may signal a shift in investor focus away from traditional safe-haven assets like gold, as tech stocks gain traction amid improving economic indicators.

16:28
PDT

Dollar strength is contributing to falling oil prices.

Micron China David McGuinty NVIDIA gold oil dollar US Lin Begmacher Anthony Stevens Canadian Defense Minister David DXY CL=F GC=F USDCNH META

– Gold's appeal is declining as semiconductor stocks gain attention.

– China is actively diversifying its monetary assets by purchasing gold.

– Micron's strong performance is influencing market sentiment.

– Sovereign buying of gold remains significant despite retail interest waning.

dollar strengthsemiconductor sectorgold demandgeopolitical dynamics

▸ Full transcript

In the sense that if the dollar rallies, oil could fall even further. So that's quite a big change, as you alluded to, from the dynamic that was in play earlier in the year. And before I let you go, has gold reached an inflection point too? It's really interesting. Gold as a retail trading asset has definitely lost some of its sheen. The fact that the semiconductor trade in the US is doing so well and will continue to do well for a couple of more days, given this Micron result, has really taken off the attention from this precious metal valley that was driven by fears of a dollar debasement that global retail really pushed into. Now that dynamic has alleviated somewhat. We continue to see pretty decent buying of gold from sovereigns, though China in particular is hovering up gold as they look to diversify their monetary assets. Lin Begmacher's reporter Anthony Stevens is taking up a pretty interesting trading day here in Asia, but we continue to talk geopolitics. Next, Canadian Defense Minister David McGuinty joins us to talk about everything that's going on in the Indo-Pacific. Some see heroes, others only egos; we see the era of billionaire athletes, a fad to some, the future of money to others; we see cryptos' trillion-dollar swings, the end of jobs or the end of human struggle. We see the.

Analysis

The dollar's rally is putting downward pressure on oil prices, indicating a significant shift from earlier market dynamics. Meanwhile, gold's appeal as a retail trading asset is waning, overshadowed by the strong performance of the semiconductor sector, particularly following Micron's results.

Smart money should note that while sovereign buying of gold remains robust, particularly from China, the alleviation of dollar debasement fears could further diminish gold's attractiveness. This shift in focus towards semiconductors may signal a broader trend in investment priorities, potentially impacting asset allocations in the near term.

16:25
PDT

Spot oil prices have returned to pre-crisis levels.

President Trump US refiners US oil companies Gulf Federal Reserve US CL=F DXY FEDFUNDS

– US fuel prices are trending lower, impacting inflation.

– Forward oil markets are in contango, indicating a surplus.

– Oil volatility remains firm, signaling market trepidation.

– The dollar is at a seven-month high, affecting oil prices.

oil market normalizationinflation dynamicsdollar strength

▸ Full transcript

Everything in the oil market is pricing in a return to normalcy and quite aggressively. We saw the spot oil price trading right back where it was before the oil crisis happened. US fuel is also starting to trend lower. The impact of the US fuel market on the global economy is obviously through inflation, and that will be the next order impact of this crisis that everyone is watching. President Trump is already putting pressure on US refiners and US oil companies to pass on these oil losses. It's also important to mention that forward-looking oil markets are already in contango, meaning that the surplus of oil that is coming out of the Gulf is being aggressively priced into having a much more expanded influence on the downward trend in oil. All things considered, it does look like the oil crisis is kind of fading. Oil volatility is holding relatively firm at these levels, so that is the only risk indicator that shows some level of trepidation around this war. But as the oil price continues to break down lower, that might be coming back into normalcy as well. Which is interesting because we're also seeing the dollar at a seven-month high. Is this a tug of war between what the oil market is doing and what expectations of the Fed will do? Yes, some of the most recent moves in oil could also be attributed a little bit to the dollar.

Analysis

The oil market is pricing in a return to normalcy, with spot oil prices reverting to pre-crisis levels and US fuel trends declining. Forward-looking oil markets are in contango, indicating a surplus from the Gulf, which is influencing the downward trend in oil prices despite ongoing volatility.

Smart money should note the interplay between the oil market and the strengthening dollar, as recent oil price movements may reflect expectations surrounding Federal Reserve actions. The potential fading of the oil crisis could have broader implications for inflation and economic stability, warranting close monitoring.

16:20
PDT

Memory chip companies are seeing significant market cap increases.

Micron Samsung NVIDIA SK Hynix Anthony Mehdi AI NVDA

– NVIDIA's share price remains flat compared to Micron and others.

– AI integration is becoming critical in memory and networking sectors.

– Competition in memory technology is intensifying.

– Market dynamics are shifting towards memory's role in AI.

AI integrationmemory technologymarket dynamics

▸ Full transcript

I also recognize with the customers. I think it's all good constructive. But I think both companies are going to have to go through a better understanding in the U.S. market, enhancing their disclosure. And I think those are sort of things that come with the territory. But it definitely helps with the valuation and multiples. Mehdi, to Anthony's earlier point, when does this become a broader macro trade? We're starting to see the first signs of the pass-through to broader economic indicators, macro indicators. Do we see that equity rally then also broadening to potentially some of the second tertiary effect beneficiaries? I think we're already going through this. The market cap contribution by the memory names is much higher. If I just were to compare it to NVIDIA, NVIDIA's share price is kind of flat to slightly up year-to-date, but Micron, Sanders, Kynan, and Samsung have all doubled, tripled, or quadrupled in some cases. So you're already beginning to see that impact. We're going through this. I don't think you're going to see a, I don't think we're going to wake up one day and see a big banner of AI and memories contributing to the global economy. I think it's happening, as we speak. It's just that there are parts of the AI like memory and networking that are going to be more critical and perhaps there's more competition on the actual compute side.

Analysis

The memory chip sector is experiencing significant growth, with companies like Micron and Samsung seeing substantial increases in market cap, while NVIDIA's share price remains relatively flat. This indicates a shift in market dynamics, where memory and networking components are becoming increasingly critical to the AI landscape.

Smart money should note that the current equity rally is not just a temporary phenomenon; it reflects a deeper integration of AI into various sectors, particularly in memory and networking, which are essential for AI performance. The competition in these areas is intensifying, suggesting that investors should closely monitor developments in memory technology and its implications for broader economic indicators.

16:18
PDT

SK Hynix has a higher margin profile than TSMC and micro customers.

SK Hynix TSMC Nvidia SK US HBM NVDA

– Concerns about potential margin air pockets may linger until the cycle is observed.

– The US listing of SK Hynix is highly anticipated.

– SK Hynix dominates the HBM market, reshaping competition.

– Long-term contracts are crucial for stability in the memory chip sector.

memory chip marketAI demandlong-term contracts

▸ Full transcript

These unprecedented margin profiles are much higher than what TSMC is able to deliver and much higher than what the micro customers are able to deliver. But what if we have an air pocket, not next quarter, not next year, maybe by early 2028? We would have an air pocket, then we will examine how the margins will look like throughout the cycle and what the downside risk is. If they're able to minimize the downside, especially on an operating margin, I think we're going to be more convinced that it's structurally different. Unfortunately, I think questioning the structural margin profile is going to be a question that is going to be with us for quite some time. We have to go through the cycle to fully endorse it. Many, of course, are very much expecting the SK Hynix US listing as well, highly anticipated. Now that you have Micron also selling to Nvidia when it comes to HBM for chips for their very Rubins, how does that reshape the competition right now? I think some of the recent confusion or noise is around the HBM market share. This year we highlighted the fact that SK Hynix's market share when we migrate to HBM for May down has dominated HBM.

Analysis

SK Hynix's margin profile is significantly higher than that of TSMC and its micro customers, indicating a potential structural advantage. However, concerns about future air pockets in margins persist, suggesting that the market will need to observe the cycle to fully endorse this structural difference.

The anticipated US listing of SK Hynix and its dominance in the HBM market could reshape competition dynamics, particularly with its strategic sales to Nvidia. This highlights the importance of long-term contracts in mitigating short-term volatility, especially in the memory chip sector, which is critical for AI applications.

16:16
PDT

Micron guided to $31 EPS, surpassing buyside expectations of $30.

Micron NVIDIA AMD EPS AI NVDA

– The company plans to be more aggressive with buybacks later this year.

– Long-term contracts are being secured, but anxiety over AI demand forecasting persists.

– Memory is identified as a more critical bottleneck for AI than GPUs.

– The market is still grappling with the implications of AI on memory demand.

AI demand forecastingsemiconductor supply chainbuyback strategy

▸ Full transcript

A more aggressive buyback was one of the key surprises or takeaways. The other takeaway is consensus for the August quarter was around $25 EPS. Buyside expectation was for $30, and they guided to $31. So they continued to beat and raise, generating a lot of free cash flow, and later this year, when the handcuffs are off, they're going to be more aggressive with buybacks. These multi-year contracts, how much does this really serve to alleviate concerns over short-term boom-bust in this cycle? Not much. We have been expecting these longer-term contracts. Unlike other parts of the supply chain, you're not going to see Micron's customers like NVIDIA, AMD, and others make a big announcement, but they are securing capacity. They are putting down cash to secure the capacity. We have known this, and I don't think there was anything specific about this longer-term contract from the conference call that would make any difference. I think that an anxiety which has been going on for more than a year has to do with AI and not knowing how to forecast incremental demand from AI, especially for memory. Memory is a key bottleneck for AI, more of a bottleneck than GPUs, and I think it's going to take us some time to endorse that. In the meantime, we also have to be comfortable.

Analysis

Micron's aggressive buyback strategy and guidance of $31 EPS for the August quarter exceeded expectations, signaling strong free cash flow generation. However, concerns remain about the AI-driven demand for memory, which is a key bottleneck in the supply chain, particularly as companies secure long-term contracts without major announcements.

16:14
PDT

Micron's sales forecast exceeded expectations, indicating strong AI-driven demand.

Micron Qualcomm Korea Japan Taiwan AI Wall Street

– Qualcomm's stock rose significantly following its positive report.

– Micron's long-term customer agreements may stabilize the memory chip market.

– Qualcomm's expansion into data center chips could generate billions in revenue.

– Asian tech markets, particularly Korea and Taiwan, are expected to react positively.

AI-driven growthsemiconductor market stability

▸ Full transcript

The end of jobs or the end of human struggle. We see the endless funds fueling the AI hype. While others follow the noise, we follow the money. Take a look at obviously the only story that's really driving the Asian trading session, particularly when it comes to these tech-heavy markets like Korea. Also, in Japan and Taiwan, looking like we'll see a pop at the open as well. This is a story of macro and technology, still up by 15%, surging in that late part of the session after quarterly sales forecast exceeding Wall Street estimates. It really kind of gives that signal that AI-fueled growth, that run that we've seen in equity markets remains pretty strong. They've secured strategic customer agreements with an average of three years in length, and that's been really key as a suggestion that it can mitigate that boom-bust cycle in the memory chip industry that remains such a risk. We also saw Qualcomm as well coming through with a pretty strong report there, rising more than 10%, and in fact at this point 12% higher after the Micron report. But at the investor day, we also heard a number of positive comments from Qualcomm about its growth prospects from AI as well, particularly when it comes to the expansion into chips for data centers to produce quote billions in revenue in the fiscal year kicking off in October. Some of those are the names that we're watching seem to...

Analysis

Asian tech markets are poised for a strong opening, driven by Micron's quarterly sales forecast that exceeded Wall Street estimates, signaling robust AI-driven growth. Qualcomm also reported strong results, with a notable rise in its stock, highlighting its expansion into data center chips and potential for significant revenue growth in the upcoming fiscal year.

The strategic customer agreements secured by Micron, averaging three years in length, suggest a mitigation of the cyclical risks in the memory chip industry. Additionally, Qualcomm's focus on AI and data centers indicates a shift in market dynamics that could redefine competitive landscapes in tech, particularly in semiconductor manufacturing.

16:10
PDT

Micron's revenue forecast of $50 billion exceeds Wall Street's $43 billion estimate.

Micron Qualcomm SK Hynix Anthropic Alibaba Canada U.S.Iran Korea Taiwan New York West Africa CL=F FEDFUNDS

– Qualcomm predicts significant growth in AI chip sales, entering the data center market.

– Korean semiconductor stocks are showing strong performance, with a 5% rise in futures.

– Oil prices are declining, indicating increased supply and easing inflation fears.

– Foreign investors sold $9 billion in Korean and Taiwanese markets, indicating volatility.

AI tradeinflation concernssemiconductor growthoil supply dynamics

▸ Full transcript

The market is extremely liquid, it's extremely well developed and it can handle this flow without causing any kind of disruption. This meets the demand for capital these Asian semiconductor makers are facing to continue to grow out this capacity. So that's a good compromise. Now, in terms of the one-week options, that's a very aggressive product. The U.S. and India have had it for a long time, very short-dated options, but that requires quite a complex amount of market microstructure building. I think the Korean regulators have taken the view that let's not sprint before we can walk as far as this valley is concerned. I mean, when it comes to disruption, how disruptive do you expect the PCE numbers out of the U.S. when it comes to the macro moves that we're seeing right now, especially with oil now trending back below the pre-war prices? Could we see a little bit of a more muted reaction than perhaps what would have been if the Iran War continued and inflation fears continued from here? Yes, so this speaks to the central debate around inflation and the war is going to be right on top of it, right? Whether we are talking about the core numbers of inflation that are going to be driven by U.S. economic growth or this transitory impact of commodity price inflection points, right? So how quickly or how slowly those second-order inflation impacts from the Iran War have fed into the U.S. PCE will be super interesting. In terms of asset impact, any non-AI trade will be challenged.

Analysis

Asian stocks are poised for gains, driven by Micron's strong outlook, which has reignited confidence in the AI trade. Additionally, oil prices are retreating, alleviating inflation concerns ahead of key U.S. economic data.

16:07
PDT

Micron reported earnings that exceeded high expectations, with an 85% margin.

Micron Qualcomm SK Hynix Anthropic Alibaba Heidi Stradewalds Yehia Trayden Jake Silverman Anthony Stevens Korea Taiwan U.S.

– Korean markets are showing strong leads, with a 5% increase in futures.

– Recent foreign investor panic resulted in significant sell-offs in Korea and Taiwan.

– Volatility in Korean markets indicates potential for a 5.5% upside move.

– Qualcomm's entry into the data center market adds to the positive sentiment.

AI demand growthmemory chip supply constraintsforeign investment volatilityKorean manufacturing optimism

▸ Full transcript

There was going to be on the memory trade going forward. The fact that Micron would come in with very strong results was not in doubt, but they shattered those very high expectations anyway. The focus for Asia will be on the margins. An 85% margin is just an insanely high number, and that speaks to the shortages that Jake was talking about. The Korean read-through is very strong; it's almost to the extent of this result becoming a macro trade. We're starting to see something like that fold into the Korean macro numbers as manufacturing and optimism continue to pick up. Very strong leads for Korea into today; it's showing up 5% on the cost. The cost per futures got a late look at those results and ran with it. Taiwan futures also looking very strong. As you alluded to, in terms of the volatility and the flow yesterday, we did see a little bit of panic. We saw foreign investors sell about $9 billion between Korea and Taiwan yesterday, almost 9% of the entire year's total. So there was a little bit of panic there. Korean volatility was at a 90 handle, indicating a 5.5% daily move from here. So that's quite ironic that we're going to see a 5.5% move on the upside now. But the volatility and the foreign outflow will have to abate for people to be a little bit more relaxed about Asian tech. But between Micron and Qualcomm, the picture is just very rosy to start the day.

Analysis

Micron's strong earnings report has significantly boosted Asian stock markets, particularly in tech, with expectations of continued growth in the AI sector. The impressive 85% margin indicates ongoing supply shortages, which could lead to a macroeconomic impact on Korean manufacturing and optimism.

Despite recent foreign investor panic leading to a $9 billion sell-off in Korea and Taiwan, the outlook for Asian tech is now more favorable, driven by Micron and Qualcomm's positive forecasts. The volatility observed may present a buying opportunity if foreign outflows stabilize, as the fundamentals for the memory trade remain robust.

16:05
PDT

Micron faces a significant supply-demand imbalance, unable to meet current market needs.

Micron Qualcomm Idaho Tongluo NAND AI CEO DRAM

– AI is the primary driver of demand for semiconductors, impacting both DRAM and NAND markets.

– Qualcomm is entering the data center market, indicating a strategic shift towards AI applications.

– Capacity expansions at Micron's facilities will not alleviate shortages until 2028.

– Investors should focus on companies with strong positions in AI-related semiconductor markets.

supply chain riskAI demand growth

▸ Full transcript

It's interesting the CEO saying that there's no line of sight when it comes to when supply will catch up with demand. What do you take away from that in terms of the forward guidance and the optimism there? Yeah, I mean that just underlines the supply and demand imbalance right now. So the entire industry is capacity constrained. Micron highlighted that they're trying to increase the capacity of their Tongluo facility as well as their new Idaho facilities that are supposed to start kicking in in 2027 and 2028. But there's just not nearly enough supply that's going to come online between now and we think at least through the end of 2028, they can offset this demand that we're seeing, which is really primarily driven by, the vast majority of it is driven by AI. And you also have additional demand for high bandwidth memory that reduces capacity for standard DRAM. You're also seeing that effect on NAND as well with AI inferencing really inflecting. So, you know, I think what the CEO is really saying is, you know, despite their best efforts, they're just not going to be able to meet the amount of supply needed by the market. We also did see that optimism being contributed to do from Qualcomm's numbers as well. Yeah, no, I mean, like for Qualcomm, they're entering a brand new market for them, which is the data center. It really the key is that it.

Analysis

Micron's CEO indicated a persistent supply-demand imbalance in the semiconductor industry, emphasizing that their efforts to increase capacity will not meet the surging demand driven primarily by AI. Qualcomm's entry into the data center market further underscores the industry's shift towards AI-related applications, highlighting a significant growth opportunity despite current constraints.

Smart money should note that the ongoing capacity constraints in the semiconductor sector, particularly for AI-driven applications, could lead to sustained pricing power for key players like Micron and Qualcomm. The inability to meet demand until at least 2028 suggests that investments in these companies may yield long-term benefits as AI adoption accelerates.

16:02
PDT

Micron's revenue forecast significantly exceeds expectations, boosting investor confidence.

Micron Qualcomm SK Hynix Anthropic Alibaba US West Africa Middle East Jake Silverman Anthony Stevens OPEC AI CL=F

– AI sector growth remains strong, indicating a long-term trend rather than a short-term spike.

– Oil supply is increasing, which may affect crude prices and inflation outlook.

– Geopolitical factors continue to influence energy markets, particularly in relation to the Middle East.

– The interplay between AI advancements and energy supply dynamics is critical for market analysis.

AI growthenergy supply dynamics

▸ Full transcript

US futures are looking at a pop of 5.6%. US futures are also surging at the moment. The dollar again is not doing very much, still in that high 161 level; of course, we've been on sort of intervention watch for quite some time. Switching out the board to take a look at the geopolitical implications as we continue to watch that oil price holding lower. New York traded crude is about 7.10 of 1%, really extending the drop across the energy space to close. Raising now the wartime price gains on the sides that supply is starting to lift again. Progress is being made on the US and OPEC still, even as we continue to get conflicting takes on it from each side, I should say. We're actually starting to see some markets of the oil, some parts of the oil market, I should say, suddenly pretty flush with supply as we see that oil returning from the Middle East and other regions such as West Africa as well. So that rising availability story is what's driving crude markets. But let's get back to our top market story. Of course, looking at Macron, shares are soaring in the late trade. It forecast revenue of around $50 billion this quarter, shattering the average Wall Street estimate of about $43 billion. The signal that investors had been waiting for that the AI field growth story remains strong. Let's get more from Abelunberg Intelligence US semiconductor analyst, Jake Silverman, also our markets reporter, Anthony Stevens. So Jake, let me kick it off with you. In terms of these numbers, what was so impressive to investors? And I guess we're really looking at the longevity of the story rather than a short-term drive higher for sentiment after what has been a pretty challenging time.

Analysis

US futures are surging, driven by strong performance from Micron, which forecasted revenue of around $50 billion, exceeding Wall Street estimates. This signals robust growth in the AI sector, with investors optimistic about the longevity of this trend despite recent market challenges.

The rising availability of oil supply from the Middle East and West Africa is influencing crude markets, suggesting a shift in energy dynamics that could impact inflation and economic recovery. Smart money should note the interplay between AI growth and energy supply, as both sectors are crucial for future market stability.

16:00
PDT

Micron's forecast reignites AI investment confidence.

Micron Qualcomm SK Hynix Anthropic Alibaba Heidi Stradewalds Yehia Trayden Sherry Anne Canada China AI SK CL=F USDCNH

– Qualcomm predicts significant growth in AI chip sales.

– Oil prices are declining, easing inflation fears.

– SK Hynix plans a major U.S. listing.

– Anthropic accuses Alibaba of accessing its AI model illicitly.

AI investmentTech sector growthInflation concernsRegulatory scrutiny

▸ Full transcript

Winning journalists. Front row conversations with the voices shaping the future of sports and business where game changers connect from the boardroom to the locker room, a place for bold-eyed... This is Yehia Trayden, Sherry Anne in Tokyo. The top story is this hour. Asian stocks set for gains as chipmaker Micron soars on a strong outlook, reigniting confidence in the AI trade, while oil erases its Iran war gains, easing inflation fears ahead of key U.S. data. On top of Micron's blowout forecast, Qualcomm is also predicting billions more in AI chip sales, while SK Hynix seeks $29 billion in a U.S. listing. Also ahead, Anthropic is accusing China's Alibaba of illicitly accessing its cloud AI model using thousands of fraudulent accounts. We speak to Canada's Defense Minister about plans to deepen military ties in Asia while managing relations with China. I'm Heidi Stradewalds in Sydney. Take a look at the setup for trading across Asia. We do expect to see that boost when it comes to AI and tech-related names, given the jump that we saw as a result of Macron's strong forecast. We had USF, which is gaining after Macron, really re-

Analysis

Asian stocks are set for gains as chipmaker Micron's strong outlook boosts confidence in the AI trade, while oil prices are retreating, alleviating inflation concerns ahead of key U.S. data. Qualcomm's optimistic AI chip sales forecast and SK Hynix's plans for a $29 billion U.S. listing further underscore the growing momentum in the tech sector.

15:54
PDT

Human-centered jobs will remain important despite AI advancements.

Anthropic Boris Cherny AI medicine

– AI will excel in technical tasks but lacks interpersonal skills.

– Healthcare may shift focus towards human interaction.

– Investment opportunities may arise in sectors enhancing human-AI collaboration.

– The need for human values in AI direction will persist.

human-AI collaborationhealthcare transformation

▸ Full transcript

Yeah, no, this is the outcome we want to prevent. This is absolutely the outcome we want to prevent. I think there's a few places. None of them are guaranteed, we're not sure, but there's the physical world. We need a lot more people to make, build, and manufacture things in the physical world. Anything that's human-centered, I think that's gonna be a big deal, right? People, or at least some people, want to talk to humans. So these kinds of human relationship-driven jobs, like I think those are gonna be important. And I think there'll be some effort by the humans to kind of direct the AIs, right? At some level, it has to be in line with someone's values and someone's intentions. And so I think there's gonna be some role there, although I don't know how thin versus how thick it will be. I think I feel a little bit more hopeful that humans will continue to find ways to leverage AI, to be productive, to do the parts of the work that are meaningful to us that only humans can do. I think the human-to-human interaction will never fully go away. The example I often reach for is what will happen in medicine. Today we hire doctors who are expert diagnosticians. I think AI is going to soon be pretty good at telling you what the suite of options of things that are wrong with you and what tests to run, and you won't need a doctor to do that. But an AI can't physically examine you and say, hey, does it hurt when I press here? They can't have a bedside manner with you that says, like, tell me how you're feeling about this. How are you coping with going through this process? And I think we're going to pivot something like medicine to be much more focused on the interpersonal.

Analysis

The discussion emphasizes the importance of human-centered jobs in the face of advancing AI technology, suggesting that roles requiring interpersonal skills will remain vital. While AI may excel in diagnostics, the human touch in fields like medicine will continue to be irreplaceable, highlighting a shift towards more meaningful human interactions in professional settings.

Smart money should note that as AI takes over more technical tasks, sectors that prioritize human relationships and emotional intelligence, such as healthcare and customer service, may see increased demand. This pivot could create investment opportunities in companies that enhance human-AI collaboration and focus on the human aspects of work.

15:52
PDT

AI's impact on jobs is being misrepresented as doom marketing.

Anthropic Dario Amade Silicon Valley AI

– Proactive measures are necessary to adapt to AI's influence on the job market.

– Management, finance, and legal sectors are likely to see significant changes due to AI.

– The narrative around job loss may overlook opportunities for new job creation.

– Addressing AI risks through policy could reshape labor dynamics.

AI job impactpolicy adaptation

▸ Full transcript

Everybody who is saying that AI is wiping out jobs is scaring people. Other folks have said this, you know, it's sort of doom marketing. That benefits Anthropic. So I want to be really clear and push back hard against this. In every interview, I talk about the possible ways to address these risks, from tax and macroeconomic policy to what the new jobs are. In the adolescence of technology, I have like five pages where I lay out the difference between tasks and jobs, why this time is different than other times. But social media, which I detest, which I detest as a category, people have these three-second clips from a year ago. I've written much more carefully about these things where I talk about the risks. So the idea that this is cheap marketing is itself cheap marketing. I think it's part of the disease of Silicon Valley. It's been caught up in this social media world of three seconds. And so my message is just definitely not doom is coming. My message is like, this is something that we should see coming, that we're worried about, and that we need to actually respond to positively. Beyond the software industry, the potential impact of AI on jobs seems harder to predict. Anthropic has published a paper estimating which fields could make the most use of AI in the near future. If its predictions are right, management, finance, and legal jobs could soon look very different.

Analysis

The discourse around AI's impact on jobs is being framed as fearmongering, with a pushback against the notion that AI will lead to widespread job loss. Instead, the focus should be on proactive measures to adapt to the changing job landscape, particularly in management, finance, and legal sectors, which could be significantly transformed by AI technologies.

Smart money should recognize that while AI may disrupt traditional job roles, it also presents an opportunity for innovation in job creation and task management. The emphasis on addressing risks through policy and adaptation suggests a potential shift in labor dynamics that could favor sectors willing to embrace AI integration.

15:50
PDT

70% of Americans believe AI will kill jobs.

Dario Amade AI GDP

– Dario Amade predicts AI could eliminate half of entry-level white-collar jobs.

– AI is currently increasing productivity but may lead to job displacement.

– Concerns about high inequality and low-wage jobs are rising.

– Investors should monitor sectors vulnerable to AI-driven job losses.

job displacementAI productivityincome inequality

▸ Full transcript

But elsewhere, the mood is less upbeat. Seventy percent of Americans think AI will kill jobs, and nearly a third worry theirs will be one of them. Dario Amade has been outspoken about this issue, and some of his predictions don't exactly sound reassuring. I think we could have this very unusual combination of very fast GDP growth and high unemployment or at least underemployment, or, you know, low-wage jobs, a lot of low-wage jobs, high inequality. You've been really direct about job loss. AI could eliminate half of all entry-level white-collar jobs in the next one to five years. That was a year ago. AI has moved incredibly fast. Is it still 50% or is it higher? I don't know exactly, but I'm still pretty concerned. I'm still the same order of concerns. We are seeing right now that AI is making people more productive, but that's the usual hump. You automate 90% of the job. Great, people are 10 times more productive in the other 10% because they're 10 times more leveraged. But eventually, it gets close to 100%. Now the sequel to that is, well, then you have to find something else for them to do. Right now, AI makes the software engineers more productive even though AI writes all the code or almost all the code. But we're already starting to see the beginning of like, you know, there may be some people that it's not making more productive, that it's better for the AI to just do the thing. How does that sit with you? It's very uncomfortable.

Analysis

The mood surrounding AI's impact on jobs is increasingly pessimistic, with 70% of Americans fearing job losses due to AI advancements. Dario Amade warns that AI could eliminate half of all entry-level white-collar jobs in the next one to five years, raising concerns about productivity and employment dynamics.

Smart money should note that while AI enhances productivity, it may lead to a significant shift in the labor market, creating a scenario of high GDP growth coupled with high unemployment and low-wage jobs. This duality could exacerbate income inequality, making it crucial for investors to assess sectors that may be vulnerable to these changes.

15:43
PDT

The software industry is projected to expand despite potential losses for unprepared companies.

Anthropic Boris Cherny Claude Code Claude Cowork AI When Anthropic Claude Co

– Boris Cherny's work on Claude Code and Claude Cowork signifies a leap in AI capabilities for coding.

– Current AI coding tools are evolving from basic functions to more complex, autonomous solutions.

– The shift towards enterprise-focused AI aligns with broader trends in automation and efficiency.

– Companies must identify and leverage their competitive advantages to thrive in a changing landscape.

AI automationsoftware developmententerprise solutions

▸ Full transcript

I would guess that the software industry gets larger, not smaller, although there will be some big losers. Those who don't kind of see what's coming, who don't identify the moats they have, they're going to have a really hard time. Anthropic's recent gross bird might not have happened without this man, Boris Cherny, the engineer behind Claude Code and Claude Cowork. When Anthropic hired him in 2024, Cherny was living a very different life in rural Japan. There was a lot of farmers markets, like, very slow. We were making miso, that was sort of the big hobby. And I remember using the first AI chatbot that I'd ever used, and it just took my breath away. And I was just like, oh my god, I have to just be a part of this. And I'm also just such a big Sapphire reader. And so I just know how bad this thing can go. Like, this technology is incredibly powerful. And so, we'll move back. You created Claude Code. You led the development of Claude Co-Work. What problem were you trying to solve? If you look at the coding products, they were all pretty simple. It was like, it was sort of like, you know, like complete the word, complete the sentence. That was the extent of AI in coding. And we just wanted to make a way bigger bet. And our bet was we think actually a coding agent can do all of it. A year and a half ago, you wrote the code by hand. And sometimes you press Tab and it would autocomplete a line. Now I talk to my cloud and it writes the code. And then while it does that, I talk to the next bot and it writes some code. And at any point, I have either a few quads running and up to a few thousand quads.

Analysis

The software industry is expected to grow, but companies that fail to adapt may face significant challenges. Boris Cherny's contributions to Claude Code and Claude Cowork at Anthropic highlight a shift towards more sophisticated AI coding solutions, moving beyond simple autocomplete functions.

Smart money should note that the evolution of AI in coding represents a broader trend towards automation in enterprise solutions, which could disrupt traditional software development practices. The emphasis on creating comprehensive coding agents indicates a strategic pivot that aligns with the increasing demand for efficiency and innovation in technology sectors.

15:41
PDT

Anthropic focuses on enterprise solutions over consumer apps.

Anthropic Claude Code Claude Cowork Biotech Pharma AI

– Claude Code and Claude Cowork automate software engineering tasks.

– The company aims to align its business model with its core values.

– Enterprise applications target sectors like biotech and energy.

– Ethical considerations may drive competitive advantages in AI.

ethical AIenterprise applications

▸ Full transcript

Largely thanks to the company's focus on more lucrative business tools, Claude Code, a major leap that automated large chunks of software engineering, and Claude Cowork, which gave that power to everyone else. Now early on, others focused on fun, splashy consumer apps. You made a bet on coding and enterprise. Why did you make that bet? Was it a values decision or a business decision? Look, if you pick a business model that fundamentally conflicts with your values, you're going to have a hard time, right? Either you betray your own values or you become irrelevant. And so when we thought about it, we said, look, you know, we've seen the world of social media, the consumer world, it really seems to encourage engagement, even addiction, you know, the slop we've seen with AI video models. It's like, what's going on? Is it going to maximize the number of minutes that you're paying attention to because that's the advertising revenue-driven incentive? Whereas if we look at enterprise, look, I mean, you know, we want to make these models useful to people. We want to use AI to, you know, cure diseases that we couldn't cure before, right? Well, that's working with Biotech. It's working with Pharma. It's working with academic research groups. All of those are enterprises, right? We want to use AI to like, you know, to make energy cheaper and more efficient. That's all enterprise. And so I think it's served us well to have this business model that largely aligns with our values. Soon after Claude Cowork was released.

Analysis

Anthropic's strategic focus on enterprise solutions, particularly with Claude Code and Claude Cowork, positions the company to align its business model with its core values, avoiding the pitfalls of consumer-driven engagement. This approach not only enhances the utility of AI in critical sectors like biotech and energy but also reflects a conscious decision to prioritize meaningful applications over addictive consumer products.

The emphasis on enterprise applications suggests a potential shift in the AI landscape, where companies that prioritize ethical considerations and societal benefits may gain a competitive edge. Investors should note that this alignment of values and business strategy could lead to sustainable growth and innovation in sectors that address pressing global challenges.

15:37
PDT

Anthropic maintains all co-founders, a rarity in tech.

Anthropic Dario Amade Danielle Claude AI Loving Grace The Adolescence

– Claude, their AI chatbot, follows a unique ethical framework.

– The company emphasizes professional warmth in user interactions.

– Focus on minimizing AI 'hallucinations' enhances reliability.

– Ethical AI could attract partnerships and investments.

ethical AIAI reliabilityfounder stability

▸ Full transcript

When we started this company, there were seven co-founders, of which Danielle and I are two, and now, you know, we're basically the only company in the space that has all of its co-founders still here. You don't get to be a company of the size and scale that we are with that happening. Like, that almost never happens. From the start, Anthropic pitched itself as the ultimate safety-conscious AI company. Dario has published long essays named like Machines of Loving Grace and The Adolescence of Technology, musing on the miraculous potential of AI as well as the worst-case scenarios. Anthropic's chatbot, Claude, has been trained to follow a set of principles called a Constitution, intended to keep it on the straight and narrow. Claude has a very distinct style and feel. A human name. What are you trying to convey? I think when people interact with Claude versus, you know, other systems, there is more of a feeling of, I like to describe it as professional warmth. So the goal is not for it to be your best friend, but it's not for it to be sort of cold, rote, calculating. It should feel approachable, but distant, right? Professional. Anthropic has talked about teaching Claude to be good. What is a good model? What is a bad model? You don't want a model that lies accidentally or intentionally, right? Lying, we call hallucinations. It makes something up. The models are just trained to predict the next word. So sometimes they don't know and they just invent something. Models sometimes, as we've shown in our research.

Analysis

Anthropic positions itself as a leading safety-conscious AI company, with all co-founders still actively involved, a rarity in the tech industry. Their chatbot, Claude, is designed with a unique 'Constitution' to ensure ethical interactions, emphasizing a balance of professionalism and warmth in user engagement.

Smart money should note that the focus on ethical AI and safety could differentiate Anthropic in a crowded market, potentially attracting partnerships and investments from firms prioritizing responsible technology. The emphasis on minimizing 'hallucinations' in AI responses indicates a commitment to reliability, which could enhance user trust and adoption rates.

15:34
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Dario Amade transitioned from neuroscience to AI, emphasizing the importance of responsible technology deployment.

Dario Amade Daniela OpenAI Baidu Google Stripe Holden Karnofsky UC AI San Francisco At Open GOOGL

– Daniela's background in arts complements Dario's technical expertise, showcasing diverse skill sets in tech innovation.

– The scaling laws concept could redefine AI model development, making it a critical focus for future advancements.

– Governance and safety in AI are becoming paramount as the technology evolves rapidly.

– The collaboration between former OpenAI employees may lead to significant breakthroughs in AI.

AI governancescaling lawsresponsible technology

▸ Full transcript

Understanding the universe, I was interested in science fiction. I think I just felt a lot of curiosity about the world. What was it like growing up with Dario? He was so smart. He was taking calculus when he was in, I think, middle school. He took math classes at UC Berkeley when he was in high school. I was actually more into reading and arts. So we were almost like complete complements in that way. Dario studied neuroscience before turning to AI at Baidu and later Google, while Daniela started out as an early employee at Stripe. They lived together in San Francisco, along with Daniela's husband, Holden Karnofsky. Then in 2016, Dario joined the newly formed OpenAI, followed by Daniela in 2018. The company began as a nonprofit that promised a safe, more open path to superintelligence. I think we need to think right now about how we want this deployed, how everyone gets the benefits from it, how we're going to govern it, how we're going to make it safe and sort of good for humanity. At OpenAI, Dario developed the concept of scaling laws, predicting that large language models would improve simply by adding more data and computing power, even if the underlying algorithm stayed the same. At that point in time, I know it sounds crazy now looking back. Not a lot of people believed scaling up is the way that these models are going to get smarter and better. That was sort of an unusual counter-cultural scientific perspective that I think was.

Analysis

Dario Amade and Daniela's journey from academia to AI innovation highlights the rapid evolution of technology and its implications for society. Their focus on responsible AI development underscores the need for governance and safety in deploying powerful technologies.

The concept of scaling laws in AI, which predicts improvements through increased data and computing power, suggests that the industry may be on the brink of significant advancements. This counter-cultural perspective could lead to a competitive edge for companies that embrace these principles early on.

15:32
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Anthropic aims to build responsible AI aligned with human values.

Anthropic Dario Amade AI But Anthropics

– The company is experiencing exponential growth in the AI sector.

– Ethical considerations may attract partnerships and funding.

– Regulatory scrutiny could impact the broader tech industry.

– Anthropic's approach may differentiate it from competitors.

ethical AIAI market growth

▸ Full transcript

Since we were little, but I think we always really wanted to do something big together. Okay, but when you argue, who wins? Um... No one. No one. As the AI arms race escalates, the Amadeus are eager to establish themselves as the good guys. But Anthropics technology could have profound implications for how humanity works, learns, thinks, even fights wars. Enormous responsibilities for a young, fast-growing startup. All of this technical safety research that we do, it's to make the products more aligned with human values, to make sure that we're not building something that could cause societal issues that previous technology companies have accidentally caused. The name Anthropic actually comes from the Greek word for human, which speaks to their mission to build responsible AI for the long-term benefit of humanity. Can you actually do that when you're building the most powerful technology in the world? You are at the center of the AI universe right now. What does that feel like? The experience I've had for my whole career, and certainly the whole time at Anthropic, is that there's this kind of smooth exponential. And the experience the smooth exponential is, nothing's happening, nothing's happening, nothing's happening, little things happen, and then Zoom, it goes crazy. So, you know, I was watching this graph for a while, and I said, oh yeah, we'll probably become the, you know, the AI company with, you know, the most revenue and the most valuations.

Analysis

Anthropic is positioning itself as a responsible AI developer amid the escalating AI arms race, emphasizing the importance of aligning technology with human values. The company's exponential growth trajectory suggests it could soon lead in revenue and valuation within the AI sector, highlighting the potential for significant market disruption.

Smart investors should note that Anthropics' focus on ethical AI development may attract partnerships and funding, especially as regulatory scrutiny increases in the tech industry. The company's commitment to societal safety could differentiate it from competitors and enhance its long-term viability in a rapidly evolving market.

15:30
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Billionaire athletes symbolize a shift in financial power dynamics.

Dario Amade Claude Anthropic AI DXY

– Cryptocurrency volatility reflects broader economic uncertainties.

– Dario Amade's company exemplifies the fast-paced growth in AI.

– AI product development is being accelerated through advanced tools like Claude.

– The intersection of AI and finance is creating new investment opportunities.

AI investmentcryptocurrency volatilitybillionaire influence

▸ Full transcript

Some see heroes. Others only egos. We see the era of billionaire athletes. A fad to some. The future of money to others. We see cryptos' trillion-dollar swings. The end of jobs. Or the end of human struggle. We see the endless funds fueling the AI hype. While others follow the noise, we follow the money. This is it. I love this library. It is an absolutely beautiful library. Are you a big reader? Um, you know, I mean, I read a lot in general. I don't know that I've had that much time over the last year or so. Dario Amade is an unlikely AI celebrity. He's known for warning the world about the risks of artificial intelligence. Now, his company is an AI front-runner, valued at nearly a trillion dollars. You're shipping so much so fast; how are you doing that? We use Claude, you know, across the product development cycle, and it allows us to release very fast. Founded by a team of OpenAI defectors in 2021, Anthropics started out as an underdog lab. Today it's the breakout star...

Analysis

The rise of billionaire athletes and the volatility of cryptocurrencies highlight a transformative moment in finance, with significant implications for the future of money. Dario Amade, an AI celebrity known for cautioning against AI risks, leads a company valued at nearly a trillion dollars, showcasing the rapid evolution of the AI sector and its impact on product development.

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