tv Bloomberg Daybreak Australia Bloomberg May 17, 2021 6:00pm-7:00pm EDT
haidi: good morning and welcome to "daybreak: australia." i am haidi stroud-watts in sitting. we are counting down to asia's major market opens. shery: good evening from bloomberg world headquarters, and shery ahn. the top stories. the biden administration agrees to covert shots for the first time. the president says the u.s. will be the world's vaccine arsenal sharing at least 20 million doses by the end of june. haidi: the west cancels it
singapore meeting as the virus cases spike and elsewhere around the world. the travel bubble with hong kong also back on hold. shery: a bloomberg skate. china is pushing to join the trade deal that was designed to exclude it. officials from australia and other countries have been talking with chinese counterparts. haidi: it's ceo. shery: this is a picture, u.s. futures muted at the open after the s&p 500 fell for the first time in three sessions. nasdaq 100 underperformed. chipmakers continue to be under pressure. this is the philadelphia semiconductor index dropping 10% from a peak in early april, entering technical recession. the dollar also was under pressure today, after we saw the weak chinese retail data
overnight. we saw it advanced. it is now under pressure. take a look at what wti is doing. it is extending some of those gains we saw in the regular session after climbing to the highest in two years. optimism about an economic recovery. bitcoin continuing to tumble after elon musk's series of tweets over the weekend. we saw it go down as much as 42,000 at one point. gold also under pressure, after climbing to the highest in more than three months. haidi: we are getting breaking news. this could be a huge deal. we are hearing amazon is in discussions to acquire mgm, that is according to the publication "the information." mgm shares have gained for pert -- 4% on the report of a potential amazon deal. we are hearing these results -- these reports. we are trying to get more details. that is according to a report from "the information."
we are looking to get more details on this. we are seeing mgm stocks jumping as well as amazon. over the past five days, up by. . 1.5%. we are seeing mgm shares up 4% on reports of this potential amazon acquisition. we will get more details on that as they get to us. in the meantime, let's get a set up of how markets are looking to start the tuesday session in asia. sophie: asian futures are looking mixed. this ahead of sessions that is headlined by japan's flash gdp report for the first quarter. we also have the rba meeting minutes. on watch from india. flipping the board, it has been a rough may for asian tech stocks. highest extending declines, even as foreign buying hit a six-year high on monday. there is more volatility ahead for taiwanese equities. japan's start up index has fallen into bear market
territory, as inflation chatter has appetite for tech names in the region. sabre cyclicals and singapore is heavily exposed to the cyclical theme, reflecting the global rotation. we have seen the sei head speed bumps amid virus was. it managed to close higher on monday with singapore airlines among the gainers for the session. pulling up the chart on the terminal, inflation, indexes, they continue to take higher. a global gauge of inflation surprises nearing a 13 year high. with that, several strategists are saying that markets are underpricing the risk for inflation. city saying the fed is pricing too definite -- dovish. shery: president joe biden planning to send millions of fda authorized doses of vaccines abroad for the first time, as supply starts to outstrip demand. pres. biden: june, one we will have taken delivery of enough such vaccines to protect everyone in the united states.
the united states will share at least 20 million of those doses at extra supply with other countries. shery: the announcement comes as the u.s. recorded its lowest number of infection since the early days of the pandemic. let's get more from riley griffin. cases falling to 41 blows. it is a big moment for america. riley: it certainly is a big moment. it is a watershed moment we have been waiting for. it signals the u.s. is turning a corner with the vaccine supplies sufficiently outpacing demand, as you mentioned. biden himself said he would work with international agencies to decide which countries would receive the u.s. doses. and he would not use the shots for diplomatic leverage, accusing china and russia of doing so. remember, these 20 million doses are of u.s. authorized covid-19 vaccine. in the u.s., we have cleared pfizer, moderna and johnson & johnson. that this news comes on top of 60 million astrazeneca doses he
has already planned to give to other countries. astrazeneca notably, still lacks that fda authorization for u.s. use. haidi: when it comes to how quickly we could see the mobilization of these doses being sent abroad, week -- do we have any more details? riley: the details, we are waiting for the end of june. this coincides with the rollout of vaccines to teenagers. just last week, we saw a clearance of the vaccines, the pfizer beyond tech shots for those aged 12 and up. that means there is a campaign to reach another 70 million teenagers in the u.s. unfolding now. the supply is going to be focused on that cohort over the, all of the willing and eligible americans who want the shot will have gotten it. and that access supply can go elsewhere in the world.
shery: do we know at this point how many people are left that want the shots and how rapid vaccine hesitancy is? riley: vaccine hesitancy is certainly fairly large in the u.s. we have seen a majority of u.s. adults get at least one dose. you can find all of the latest data on the bloomberg vaccine tracker. this is coming at a time when folks are anxious about non-mass squares who have not gotten vaccinated. just last week, the cdc lifted mask guidance, and has ultimately suggested we rely on an honor system, as to whether or not people wearing or not wearing their masks have been vaccinated. it certainly is going to spur more anxiety as non-mass squares suggest they will not get vaccinated. this push to get teenagers, it will include a push to get parents of those teens. as teens go in school clinics,
and other places, community centers, places of worship, to get their shots, the u.s. is hoping they will get parents who have remained hesitant along with them. haidi: of course, children is the last public -- puzzle piece in getting everyone wrap -- everyone protected. let's get you a check of amazon. we are hearing reports from the information that amazon is in talks to acquire mgm. these are the film studios, according to a person familiar with the situation. this would be amazon's biggest move to expand and entertainment. we know the battle over content is a major one for the streaming parts of these businesses. we have heard from jeff bezos in the last couple of weeks saying they have had video streaming to the tune of 135 million amazon prime users over the past year. we know there -- they struck deals with the wnba in terms of streaming deals, sports content. we are hearing that they are
reportedly in discussions to acquire mgm, which is a major film library. james bond franchise as well as other super bond on titles. rocky, pink panther among them. it also owns the cable channel. it makes its own tv shows as well. we are getting these reports, according to the information, that amazon is in talks to acquire mgm. we are seeing a little bit of a move in that stock at this point. let's send it over to vonnie quinn with the rest of the first word headlines. vonnie: thanks and good morning. the world economic forum has canceled the annual meeting it was planning for singapore in august. the spike of infections there and an uncertain global travel outlook. earlier, singapore and hong kong once again delayed a travel bubble that was set to begin may 26. a spike in more transmissible cases has halted hong kong who added singapore to its list. more virus restrictions have
been lifted and the u.k., as it takes the next step out of lockdown. prime minister boris johnson is concerned the highly transmissible virus strain could lead to a surge in infections. the government is accelerating the vaccine rollout, down to ages 35 and older this week. . johnson facing pressure from the party. bloomberg has learned italy plans to stage out a national curfew in a push to open its rate -- its economy. the prime minister agreed to remove the curfew june 21, if infections keep declining. we are told his cabinet approved speeding of the timeline for reopening businesses, including james and resume the indoor dining. the eu says it will not hike tariffs on a range of u.s. goods over a disputed metal tariff. the eu commissioners as the bloc will refrain from products
including bourbon whiskey and harley davidson's, which were set to double next month. the eu says both sides will settle the issue. the tift began in 2018 when president trump slapped levees on european steel and aluminum. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. shery: coming up, we have an interview with the ceo of electric carmaker, after it announced a capital spending point. this is bloomberg. ♪
project with foxconn. ed ludlow is in san francisco with us with a special guest. ed? ed: i'm delighted to be joined by the ceo, henrik fisker, fresh off the earnings call. the biggest take away from that call was you gave a specific date to the start of production are november 17, 2022. how can you possibly know when your start of production date is coming down to the day, 18 months in advance? henrik: because that is how you plan with the -- when you work like a company like this where all the processes have been developed over tens of years. it produces bmw's, other cars like toyota. they have clear processes. we have it down to the day when start of production happens. that is probably different from other ev startups quite frankly. i think that is why we are undervalued now. but that's ok. we are here to deliver. and so far we have. ed: you are essentially a pre-revenue company. this is a progress report for
investors. you seem to have been making a lot of progress with suppliers and the components on battery sales. who is supplying your battery sales and how happy are you with that in terms of that deal? henrik: i'm extremely happy. it might be one of the best reveals in the world right now. the reason for that is you are able to make this a deal this year. most battery deals were done last year or the year before, the year before, when batteries were very expensive. we waited until the last moment. that is a result of our unique development process, when we can lock in technology very late. we have had a long-standing relationship at this battery maker. it is one of the largest in the world. we just happened to get their latest new sale, which we might be one of the first ones having access to, which is also why when you get our vehicle next year, it will probably have the most advanced battery technology available in the world. ed: narrow it down for us, which
countries did it supply from? who are they? henrik: we don't want to say quite yet because we don't want all of the competitors to storm over there and get the best deals. we are finalizing a couple interesting things. one of them is what we can do jointly. may be setting up local battery pack productions both in the u.s. and europe to cut down pricing further. we already have incredible pricing. i think that is some of the biggest oems in the world. we are probably going to announce that in a few months. but not quite ready yet. ed: there is a lot focus on the deal with foxconn to jointly develop an electric vehicle in asia and in the united states. how much progress have you made on that deal with foxconn? how will revenue be shared? is there any update on the u.s. factory? henrik: the deal made a lot of progress. foxconn has been amazing to work with. they are fast, we are fast.
this is my second is undoing. -- second design undoing. we have a small team who puts it together. what is happening is we didn't really have to spend a ton more money in this program, because we have the people who are phasing off the. program the concept phase. now we are going into the final production phase. those people are now available to work on the program. we have fully signed off the exterior concept. we have filed patents on several amazing innovative features. we are already working on the platform, foxconn's lightweight platform here we have a lot of work to do in certain areas. it is not just about making another ev. it is surely a revolutionary vehicle. there is still a lot of work to be done when it comes to the factories. as you know, foxconn has a factory and land in wisconsin.
but fisker has also received offers from a couple of other states. together with foxconn, we will do the diligence on these offers and we will choose what is the best business decision for both parties. but think we will announce that in the coming months. ed: there was a discussion on the earnings call around monetizing the credit. there is talk on tesla of how they sell emissions credit. have you held talks with automakers on that topic? henrik: in fact, our cfo has been in talks with representatives from a couple of other oems. there is some oems that are wanting to pre-buy our credits. the earlier you sell them, the bigger discount you are going to give. let's see when we want to sell those. but it is definitely something where we see an upside. it is not something we are putting in our business plan. it will be a pure upside when we get to that point. ed: made progress on sales applied but who will assemble
the battery packs? that seems to be the biggest missing piece with fisker. henrik: it is not missing. that is fully on the development, together with our in-house team which understands battery management. i've been doing that together with the sale provider. also working together on creating that pack is emily. echo simply, as i mentioned, will be done most likely locally, both in europe and the u.s. that is something that we will be very involved on. it might look something similar to what tesla is doing with panasonic, in terms of the relationship. ed: there was also some discussion on the earnings call around semiconductors. you were a long way from the start of production but you are trying to get your suppliers in place. what kind of visibility do you have on the chip site? is the situation improving? is foxconn helping you? henrik: in fact, the chairman of foxconn told me chips are made
in the next weapon in the automotive industry. he told me we will not be missing any chips working with foxconn. they have fabs in japan and china. we feel really good about the. you have heard rc pio, he is a master of that. -- our cpo, he is a master of that. that is something we are not worried about. who knows, it could be that we still receive some chip shortage for a while, because of -- it is not just a general shores issue, it is because a lot of chipmakers have turned to deliver to more profitable areas of industries. i think we are really well situated with foxconn. ed: all right. exciting stop -- exciting talks. henrik fisker, thank you very much for those projections. haidi: great conversation.
haidi: jp morgan has reopened its offices to employees across the u.s., a move closely watched by others in the financial industry as pandemic restrictions east. dedicate group to outside the offices early -- earlier paired what was it like? what was the mood? >> it was actually quite lively. i saw a lot of workers coming in and out of the offices. they were all masked.
a lot of coffee stands going by. that was at new york headquarters. that had been opened through the pandemic. now jp morgan's offices across the u.s. will be opened. that is significant. we know this is the start. in july, they will be asking all of their workers to go back on a rotational basis. this is the first major u.s. bank to have a mandate to bring all of the workers back. it will be watched by the other banks as well. particularly as we have more than 200 million doses of the vaccine administered in the u.s. shery: we are both of us in the office here in new york. bloomberg has its own restrictions paired we have temperature checks and other things that we have to do. are there restrictions for jp morgan as well? ritika: they will be allowing the buildings back with 50% capacity. when they do go back, it will be in july, on a rotational basis. i know they will be giving them home testing kits as well. we did know, the ceo, jamie
dimon, saying earlier he will not be saying that workers have to get the vaccine. but there will be a carrot and stick approach. they will be enticed to get it in that way. haidi: jp morgan tried this earlier and it did not go so well. how much of this will be a litmus test for the rest of wall street, for the rest of the financial industry across the u.s. in what the next steps might be? ritika: last september, in 2020, the ceo did try and get research analysts back, bankers and the like. one of the equity traders got covid. they were sent home along with that desk. this is a different scenario because we have over 37% of the u.s. population vaccinated. i also thought this was interesting. the other thing they have done besides opening the office, i read between 30% -- 30 to 40 investment bankers are traveling daily within the u.s.. i thought this was interesting.
if clients are actually asking to have in person meetings, then it just, due to the competitive nature of the banking industry, other banks are probably going to have to do the same. shery: zach lee. are we seeing any word other banks are following suit? ritika: jp morgan is ahead of the curve. we know the likes of citigroup, bank of america, wells fargo, they will be asking their employees to come back partially after labor day. the exception is goldman sachs, who is asking them to come by mid june. jp morgan really getting ahead of this. shery: take a group down there with this latest on the return to the offices. of jp morgan. here's a quick check of the latest business flash headlines. at&t confirms a blockbuster deal to spin off its media operation and merges with discovery, creating a formidable rival to netflix and disney. the agreement first reported by new york -- by bloomberg news. ranging from to hd tv and the
food network. at&t will get $43 billion. discovery ceo will lead the new entity at about $130 billion, including debt. softbank vision fund is said to be considering listing a blank check company on the ends -- on the amsterdam stock. sources tell us it is seeking $304 million from the deal, and a wood target investments in europe's tech industry. softbank has embraced it with, raising $3.3 billion for nine u.s. fax in the latest financial year. they have made its first investment in the middle east, leading an initial funding round for egypt -- egyptian banking app. it raised $5 million in a round that was joined by d.c. firm global capital. it was launched last month. the latest investment in
vonnie: you are watching "daybreak: australia." i'm vonnie quinn with the first word headlines. president joe biden has pledged to send millions of doses of u.s. coronavirus vaccine abroad by the end of june. for the first time, the shots will include those cleared for domestic use. the president says his administration will export 20 million doses of vaccine through pfizer, moderna and johnson & johnson, that is in addition to 60 million astrazeneca shots he has pledged. pres. biden: we want to leave the world with our values.
with this demonstration of our innovation, ingenuity, and the fundamental decency of the american people, just as in world war ii, america was the arsenal of democracy in the battle against covid-19 pandemic, our nation will be the arsenal of vaccines for the rest of the world. vonnie: new york state will lift its mask mandate on wednesday. in accordance with cdc guidance, governor andrew cuomo called the mask easing policy radical. it aligned it with new york state's own guidance. new york's vaccination rate is approaching 50% as cases continue to fall. severe cyclone slammed into india's western state late monday with wind speeds as high as 190 kilometers an hour. heavy rain threatened some coastal areas. neighboring mumbai escaped the worst of the storm but had to close vaccination centers. the response force has deployed
dozens of teams across several states. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. shery: it is time for more new calls ahead of the 80's -- asia training day. -- trading day. i want to talk about taiwanese stocks. it has been pummeled by this rotation out of tech, but at the same time, the rising virus cases. what are analysts saying? sophie: volatility ahead, according to thai research. he has been saying stick to that with low heat and high dividend yields. their topics, those include things like hunt hi. bloomberg intelligence, inflation having ramifications for tech names and growth sectors. anticipating taiwan markets along with north asia, broadly speaking, will remain volatile in the near but -- near-term. the losses have outpaced asia over the last week.
particularly hit hard by the inflation led tech selloff. as bloomberg intelligence notes, with share prices and -- prices moving in opposite positions, less demanding with the taiwan index trading at around 50.4 times for earnings. well below its two-year average. the recent round has pushed as high as a 14 day rsi into that territory. haidi: we are going to get more on market data with sophie. let's look at what happened overnight. u.s. stocks falling for the first time in three sessions. the dollar weakening as investors get the risk from a spiking covid-19 cases. and to that lingering inflation fear. the next guest believes that pressure will remain within the fed's 2% target. senior portfolio manager margie patel joins us. great to have you. let me drop this chart -- this chart.
you look at something like this when it comes to the global inflation supply industries around the world. and you are seeing these huge spikes. the u.s. is the highest on record. emerging markets are the highest in 13 years. europe is the highest in four years. overall, we are nearing the highest in 13 years. do you look at this and think it, this is the kind of transient reflationary effect we would expect from the amount of monetary policy linked to fiscal stimulus but we have had? margie: i think everything is different this cycle because the decline in economic activity and the rebound is all related to covid, rather than a traditional fed tightening tight easing recession thing. i look at it and it is reflecting the amount of liquidity, pretty much around the world. that is why i think we are seeing a lot of it, stocks are at high levels. of the same time, we have the 10 year treasury locked in the trading range. it is interesting, the market
knows and inflation is at 4% in the u.s. with the treasury at 165, that says to me that the treasury market is looking as if it is a transitory impact. i think looking forward decline in inflation, and slowing down economic growth over the next quarter. haidi: where do you see the opportunities now? we continue to talk about technology. you like semiconductors within that space. margie: yes, i think there is still great opportunities in the tech sector. as you can see with the earnings reports, even companies that have spectacular earnings often have very mute -- very mediocre or negative reactions by the market. i think the market is looking for what is over the horizon, and what they were seeing over the horizon is slowing down in many parts of the tech sector. i think you need to be selective of companies that have a continued short growth path over the next year or so.
that means being more selective in technology. we are thinking of put -- that markets will provide a positive return over the next 12 months. we are thinking mid single digits, maybe low double digits. in other words, good enough and better than what the fixed income market offers investors. shery: when it comes to the chip stocks, do you buy the dip now? we have entered technical corrections already. margie: i think you can root -- can be a little patient here. as i said, we have seen very good results. people are looking over the next quarter too. i think they are looking for slowdowns in growth. that is what is really weighing on the sector. plus you have a lot of short-term trading money. they have not finished getting out at lower levels as we saw. i think if you are interested in adding sectors, we think it is time to be patient and wait. we like them long-term. short-term, we think there will be more pressure because of the uncertainty about demand say,
six months from now. shery: seems all of that outflow is going toward cyclicals. today, look at the s&p 500. the ones that are gaining ground, energy, materials, really have seen a bullish sentiment all over the past couple of weeks. do you buy into the craze now or do you waited out? how expensive are we at this point? margie: i think there is a lot of good value in the industrial space. because many companies in the industrial space are really looking at secular growth. they have incorporated a lot of technology. u.s. companies are world-class leaders as far as product innovation. effective cost of ownership. we think these companies can have growth. perhaps we expect from the technology sector. we also like materials because we think it is restructured and we think u.s. companies are very well positioned even with global
growth which is what we are thinking about. also, it is important when you look at the sectors, some of the sectors are so small. material sector, less than 3%. the industrial sector is about 8% of the total market. it does not take much money going into the sectors from a large sector like technology, where you have half a dozen names prescribed. to have huge moves in the stocks. even there, we like those sectors but we think you have to be selective. because a little bit of money has pushed up the stocks to high levels. so some selectivity in the sectors. shery: thank you very much for your insights. margie patel, asset management senior portfolio manager. coming up, china is pushing ahead with behind the scenes talks to get in on a major trade deal that was aimed at excluding it. we will discuss the details ahead. this is bloomberg. ♪ s is bloomberg. ♪
on migrants. the financial times is reporting u.k. ministers are split over the terms in which a trade deal with australia, as a risk of backlash from the u.k. from the industry also looms. shery: china pushing ahead with behind the scenes talks to join a trade deal that originally aimed to exclude beijing. and cement u.s. economic power in asia. for more, let's bring in tom mackenzie in beijing. this went from the tpp to the ct ptt. this is an agreement that the u.s. withdrew from parent how much progress is china making now? tom: we heard in february from chinese officials that they were keen on focusing on informal talks. in february, they started in formal talks to join the comprehensive and progressive transpacific partnership. i'm not point to say that again. as you say, the acronym is a bit of a head twister.
but they have started informal talks in february. we are hearing from officials in australia, new zealand and malaysia, that they have started technical talks. that is an important move forward. they have started technical talks. there is a view from trade experts that beijing is very serious about joining this trade pact. we don't know the timing yet. but they point to comments from xi jinping, the president himself as well around his intent to get china on board with the cptpp. this was originally designed to ensure there was a counterweight in this region in terms of trade versus china's growing cloud in the region. it was designed by the u.s. in 2016. then president obama said it would be the u.s., and it should be the u.s., that is writing the rules of trade in asia. not china. in 2017, president trump pulled out of the than tpp.
it has been redesigned as the lead of japan into the cptpp. now china again signaling strongly its intent to join this. haidi: very impressed by the fact that you managed to say it as well as the abbreviation. you talked about the shadow of the u.s. looming large, even though they are no longer part of the stocks. what are the other potential sticking points we are talking about? tom: absolutely. well, if china joins, they would have to take on board the full menu. they cannot pick and choose parts of this trade deal. that has been made very clear. by members of this agreement. a lot of those issues on the menu include agreements around things, for example, like employment. and labor conditions. but also subsidies. state owned enterprises. all issues on when -- on which many would say that china would find difficult to align its domestic policies with those of this trade deal. a couple of other areas, potential headwinds, japan wants
to see whether or not china will live up to the agreements it made in the recently agreed rcep. that was signed at the end of last year. japan wants to see whether or not china will commit and implement the agreements in that trade deal. japan also is pretty keen to get a trilateral -- trilateral agreement between china, south korea and japan, before bringing china on board. and china would need the backing of those key u.s. allies, australia, canada, and japan, to join this trade deal. china has pretty strong and significant frictions with australia and canada when it comes to trade. the other sticking point, taiwan has said that it has already had talks with every single member of its trade agreement. and china would be dead opposed to taiwan being part of this trade agreement for very obvious reasons. the other elephant in the room, as you have nodded to come is
the united states and whether or not members of the trade deal would want to wait to see whether the u.s. administration would want to rejoin before allowing china on board. there is a very long way to go, and a lot of stumbling blocks. trade experts say all the signals suggest beijing is taking this very seriously. haidi: tom mackenzie, our coanchor in beijing. coming up next, the -- mike nova grass says they claim is likely to stay under pressure as scrutiny increases on the crypto industry's environment impacts. this is bloomberg. ♪
shery: take a look at the currency markets. we saw a little bit of pressure during the new york session. this because we saw weakness in the chilean peso. that as a ruling coalition in the country suffered a crushing defeat on their elections for the constitutional assembly. what that means is it will be less stupid and those new rules in the new charter. that could be market unfriendly. we have seen the lira gaining ground. they have returned from holidays. after falling to record lows a lot -- lows last week. not even the fact that we saw pressure on the dollar during the regular session. take a look at some after our movers. we had some first-quarter
earnings after the music. unchanged at the moment. this after revenue came in higher than expectations and rose more than 20% on year. we are seeing pressure on the easy start up xl. not only xl, but this as well. we are seeing those first-quarter results coming in. downside pressure for the stocks. coinbase also the first time they actually closed below $250. which was the price when they went public. we do have the broader bitcoin pressure after those elon musk tweets over the weekend. haidi: yeah, and those tweets, it seems, or something else continues to play out. let's get more on this story on the broader crypto universe. our reporter joins us. musk, pointing to the higher energy consumption, as a reason to stop accepting it as a form
of payment for tesla cars. this is not a new concern that has been raised by critics of crypto, but in particular, of the amount of energy that is consumed by bitcoin mining. are there steps being taken to fix the problem? >> absolutely. it is an old problem. for years now, and a lot of minors have been using renewable energy. but i think now that musk has highlighted this problem, and a lot of the companies in the crypto space are starting to take it more seriously and trying to talk more about what else they can do. shery: what will drive the next leg up or down for cryptocurrencies, especially bitcoin? >> today, i talked with mike, the crypto investor, and he feels that the next driver will be bitcoin etf.
if it is approved. he think it might happen later this year or early next year. but this could be something that fuels the next leg of growth. haidi: we heard from mike talking about where he and the volatility that we continue to see. take a listen. >> i think bitcoin will be somewhere between 40000 and 55,000 for the next chapter before it builds up enough new momentum to take out the 55,000 and and the year much higher. haidi: with the volatility we see across the crypto generally, it seems a risk that he would make any production as to where bitcoin is going to go. what are you hearing and seeing? olga: it seems like for the last year, bitcoin has been rallying like crazy. we have been in a major bull run. if you look at the history, it
is a very volatile coin. it does go up and down a lot. like in 2017, we had a huge run-up. in 2018, it went down 80%. i think a lot of investors are making this argument that since more large institutional investors have entered the space, it will be less volatile. i'm not so sure. because still, about 2% of accounts own something like 95% of all bitcoin out there. if a lot of them are corporate entities like tesla and so forth, they make a very pragmatic decisions about what they are going to do with their holdings. they are not true crypto believers, if you will. i think it could move up and down a lot.
shery: let's turn to at&t, confirmed that blockbuster deal to spin off orner media and merge it with discovery. the agreement reported by bloomberg news, ranging from cnn to the food network. the entity will be valued at about $130 billion. discovery ceo, who will lead the tie up, and at&t ceo,. spoke to bloomberg. . >> john and i are really aligned in strategically trying to get to scale. above the globe. to be a meaningful scaled competitor. in order to do that coming you need great content that people love. one of the things that we looked at, we launched discovery plus, very strong, great product. great reviews and app ratings. people are using the product for three hours a day. but we looked at what john has. king county, godzilla, the incredible brand of hbo, sex and
the city, gaiman -- game of thrones, superman, batman. we started to think about it as a combustible combination. you've got some incredible ip that people will pay for before they will pay for dinner. and we have a bigger library than netflix with content that people love, whether it is oprah or chip and joe or food network or the bbc content, planet earth. i think this is just a way that assures that warner, probably the top of the pyramid in quality ip and quality talent, that is loved all around the world, together with the content that we have, where we are already the largest global media company, we have more global ip than anybody else. when we come together, we think it makes us a real formidable, global ip business to compete with the best in the business.
>> david says you are at least in the same business. but you have something about a change of heart here. there was a major strategic decision made to move into the media business as a telephone company. now you are really reversing that. you will go back to your roots. let me understand, looking back at it now, was the strategy wrong? or did something change in between? lee -- leaving money on the table, there is value being destroyed. >> i would probably dispute whether there is value being destroyed. i would say we have managed to increase the value of the assets we bought by about 30%, if you look at the business. the assets we sold ineffective value, this transaction, and some reasonable assumptions, to how it is going to trade at a multiple. >> i want to understand that. i think you bought it at $85 billion. . are you saying you got that difference out in cash?
john: we are getting $43 billion in cash. 71% of the equity of the new business. there is two parts to that. the point of new that i have on this is the team has done a remarkable job of pivoting the asset to be effective in the direct to consumer world. that is the value that i think david and the rest of the industry see right now. what changed since we went into this was originally a point of view that this would help our connectivity business. indeed, it has. it is lower turn, it has helped us on customer acquisition on things like selling more broadband connections, and it has raised customer satisfaction on those products. in 2016, i don't think we had a clear picture of what the global opportunity was going to be in direct to consumer and whether or not that would be essential to play in that space. . it has become clear as david described, it is going to be
global. the market opportunity for that, the value creation opportunity is significant. haidi: the discovery ceo and at&t ceo speaking with bloomberg's david westin pair let's get you a check of the latest business watch headlines. sources tell us mobile pay form -- payment platform square is in discussions for a 4% yield on its to billy dollar debut junk-bond sale. it is being talked about in a 3% range while the 10 year charge for the same amount is in the 4% range. prices will be used for purchases which could include acquisitions and capital expenditures. jp morgan reopened its offices to employees across the u.s. on monday as part of its plan to call back is high u.s. workforce. at least en route putin -- on rotation by early july. it comes as a number of authorities ease restrictions and set dates for reopening businesses in the weeks ahead.
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haidi: a very good morning. we are counting down to asia's major market shery: welcome to daybreak asia. our top stories this hour. the world economic forum canceled its singapore meeting as virus cases spike. the travel bubble with hong kong is grounded once more. asian stocks poised for a muted open.