Michael Regan, Michael Yeah Paul, Teradyne discussed on Bloomberg Surveillance


Look at my rank there on BRK tape boy All right yields pullback modestly Ten year treasury 2.45% of the commodities front crude oil It's a little bit lower here It's called one O 8 a barrel gold is lower as well $1945 per ounce Bitcoin it finds a bit Now trades just over $47,000 per token Let's get some more color on the equity markets this morning Bloomberg markets editor Michael Regan in the house What do you have Michael Yeah Paul some movers today based on analyst notes and other reports that really kind of get to the heart of what everyone's worried about inflation and higher interest rates I'll start with Apple They're down about one and a half percent in the pre market This is after nikkei reported that the company plans to cut the output of iPhone SEs That's our entry level model by about 20% They're citing some talks with suppliers And Apple basically citing the war in Ukraine rising inflation and everything we're talking about as sort of the concern there Similar story with some of the big tech chip maker stocks microchip technology cuervo Teradyne all down about three to 4% after Goldman estimates across its coverage of chip companies Similar story rising inflation and higher interest rates are worried about hitting consumer spending and industrial production We need chips Even in my car it's got like a hundred chips I know You can't buy an appliance anymore without a chip I think my electric toothbrush probably has a chip in it at this point And it's surprising Paul you know because of all the chip shortages we've heard about but I guess you throw in higher interest rates and headwind to spending and it's getting out on the worried about it And one more I'll give you bank stocks downgraded Citigroup M&T Bank Fifth Third Bancorp downgraded at Morgan Stanley Betsy grassick citing saying we think a short and sharp rate hike cycle is tougher for banks than a slow and steady rate cycle When rate heights rate hikes accelerated faster paced and earnings and wage growth that can lead to higher credit risk potentially bringing on a recession So you know it seems like the inflation the higher rates all the macro factors we've been talking about are starting to trickle their way down into the analyst coverage of the individual names Thank you so much Greatly appreciate it I really eventful Monday Bloomberg surveillance bunched by Conrad's naked adviser assurance tax Get ESG insight for fund managers perspectives on reporting and insights on how ESG drives value and competitive advantage download their ESG report Con resnicks ESG report visit Cohen Resnick dot com One person today I wanted to talk to I said I don't know Paul one 2 a.m. Sure Get Nord Vic Yep get him on Yeah Nord Vic's with us Wake him up Legendary with a phenomenal book on Europe hugely prescient a decade ago and he joins us today on Japan Jens thank you so much with exciting data for joining us this morning What are the ramifications for the people of Japan and their government if yen weakens out further one 20 one 25 dare I say to one 30 and new trade weighted weakness Yeah Well the yen has already weakened about 10% really over the last month So it's a pretty significant move already And clearly if you're importing oil or importing anything those goods will go up dramatically in price right So those are the effects that people will see That said Japan is a different country from almost any other country in the world in that they have not had any broad based inflation pressure yet Japan is a country that's been stuck in mostly deflationary environments Just as a time in Paul Sweeney wants to jump in here I agree with that that they've been stuck in a disinflationary deflationary trend but on a nominal GDP basis they define zombie How zombie is the zombie this morning Well so what we're seeing in the yen is just very very dramatic We've not seen gen moves like this I frankly can't remember a weakening rule like this in my entire career So this is something we have not seen before And what I would say is so interesting now is that the bank of Japan has been trying in different ways to maximize essentially the amount of easy monetary policy they deliver right And the last formula they came up with was the yield curve control Fixing the ten year yield And what is so kind of ironic about that policy is that when global yields on the upward pressure as we are seeing everywhere in the world right now they actually get forced because of the yield curve control to buy more and the bank of Japan had to announce overnight that they were buying an unlimited amount of Japanese bonds at an auction So you have this ironic situation when the need to ease is going away kind of They actually have to do more It's a pro cyclical policy And that's why the yen is getting really interesting now and having the explosive move So when I grew up the yen was a safe haven Is that still the case in Any regard So I think over the last month or so we've seen just a dramatic reassessment of what the yen is and entails right So a lot of people have a type of yin hedge in that book If something goes terribly wrong we're going to make a bit of money on having yen calls in our portfolio Those young calls essentially didn't work at all when you had the Russian invasion of Ukraine They again was just stuck right So those calls were worthless So I think part of the reason why I begin has then turned to become so weak is that there's a structure we assessment of whether it's worth owning that insurance policy to people are getting out of that insurance and that's in the process of adjustment entails actually selling the yen Okay we're going to sell the yen I get the dynamics but I want to talk about the lessons we can learn in the west from the zombification and now this huge first derivative move of yen weakness.

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