tv Bloomberg Daybreak Australia Bloomberg August 2, 2021 6:00pm-7:00pm EDT
haidi: good morning. welcome to "daybreak: australia." on haidi stroud-watts in sydney. >> i'm sophie kamaruddin in hong kong. we are counting down to asia's major markets world open. shery: evening. i'm shery ahn. the top stories this hour. u.s. stocks decline along with treasury yields on soft u.s. manufacturing growth and lingering apply constraints. haidi: the spreading delta variant hangs over sentiments for the u.s., as a delay in
vaccine milestones. 70% of adults having at least one dose. shery: investors and analysts backs shares $29 million takeover of aussie payment platform after pay. this is a picture where we are seeing you was futures gaining ground. this after the s&p 500 fell in the regular session. we saw a s&p 500 and the dow paring back earlier gains after the weaker than expected manufacturing number. we also have the 10 year yield falling to as low as 1.1%. 1.1 5%. finishing the session at the 117 level. that pressured the dollar. wti crude gaining .4%. after tumbling by the most in two weeks. we are off to a shaky start when it comes to the august month. given that we have seen a run-up in crude prices already above that $70 a barrel level. take a look at square and how they ended. it was really about this company
after we saw it rally over 13% at one point. ending the day at about 11% higher. this after the news that we would see them by australia's after pay. we saw the best day since march foursquare. as i met earlier, it is a weaker august. historically, we start off weak, perhaps we can get better. we have seen in the past, historically, when the s&p 500 has a good run-up, perhaps some consolidation. but if it's history is any guide, we could see more returns in the next 12 months. haidi: it is really interesting taking a look at the past 50 years. the s&p 500 climbing for six months 35 times, aside from the latest stretch we've seen. in those cases, three and six months later, the average returns were over five and a half percent -- 5.5%. we could see gains.
hearing from the likes of goldman sachs, it is not the extent or really the communication of the fed, but remaining the growth outlook, earnings outlook but is going to really determine how stocks perform from here. shery: we have those softer than expected u.s. numbers, but also weaker chinese numbers. we saw that manufacturing growth number really pressuring the u.s. markets today. our next guest saying the market needs to be more reactive to economic data then it was the first half of the year. let's bring in sheena sissel, cio. great having you with us. as haidi mentioned, there is the earning side of the equation. this chart on the bloomberg showing us that earnings has been at historical levels when it comes to wall street estimates. can this provide a floor to the market? sheena: i think so. the fundamentals of been strong. part of that is because wall street estimates have been far too conservative.
they are starting to take upwards. but probably staying on the conservative side. we have about 60% of companies in the s&p 500 have reported earnings. 88% have beaten on their eps numbers. 88% have beaten on their revenue numbers. on average, they are beating 17 plus percent which is well above the five-year average of 7.8%. this has been a trend for at least a year now. this is not a new thing. but it is largely reflective of analysts estimates being far too low. while they are coming up, i don't think they are coming up enough to stop the trend from continuing going forward. shery: marketing brett seems to have been strained. what are you seeing in terms of technicals? shana: i'm not a technical analyst, but the market breadth something i have paid more attention to. it is something that has come up with the research i've read. what we are seeing is odd technicals in terms of the advanced decline index, in terms
of where stocks are sitting at the percentage of the s&p 500 are above their 200 day moving average versus their 50 day moving average. a lot are above the 200. but many more that are below the 50 day. that is unusual. it is concerning. it means that not all stocks in the market are participating in the upward move. and you also see that if you compare the equal weight of s&p 500 versus the market cap waited s&p 500. when those diverge from each other, it is a sign that there is not broad participation. that is not necessarily good for the market. haidi: has delta been priced into the extent that obviously we are expecting some consumer stocks that may be affected by the mask mandate. it feels like the market is not expecting another round of lockdowns. shana: i don't think the market is concerned about delta, as much as they are concerned about
what delta will do in terms of how it impacts inflation. i know that seems odd. but the more we have delta spread globally, the longer this supply chain disruption will continue. because a lot of the supply chain disruptions we have seen have been covid related. and that is not going to get better as delta is continuing to be pervasive across the board. not sure people are concerned domestically in the u.s. about the impact of delta. i truly believe the majority of americans do not think lockdowns will happen again. and they are not going to cooperate, necessarily, if the government does try to implement broad lockdown measures again. even though masks are not a mandate, it is a recommendation. it is not quite as strict as it was before. i think the markets don't believe it will be. haidi: i want to get your call when it comes to semiconductor stocks. we saw those companies shares
arising comfortably on monday, on pretty good sales numbers out for the month of june. how long do you expect these rate conditions for demand to last for? shana: part of what is pushing the semiconductors upwards is the flattening. there is a massive shortage in the semi space. that gives pricing power to the semi producers because there is no inventory. that can continue for a while. delta global impact will continue to impact the shortage and the semiconductor space. i think in certain types of semis, the long-term trends are positive, especially those associated with any sort of ai type of model or anything that is related to the cloud and not necessarily the things like cars, semis, the older and more
well-known and well-established semiconductor space. it probably does not have those long-term tailwinds like nvidia or marv al have. >> great to have you with us. shana sissel, cio. what are you watching for us? sophie: when it comes to stocks in australia, we could see downside moves after the a a sex to hundred was boosted to a rally. some analysts say is just too low. on that eco-agenda, it is already a decision day. more support likely anticipated for the economy. we will be watching for any clues about potential rollover of yc c. we have seen the yield curve flattening for australia, led by the 30 year yield. the highest we saw back in february. we have seen implied bulk for the aussie pickup ahead of the decision from the rba. switching of the board, the roman be has continued to stabilize as pboc easing bets
around up. jp morgan says the yuan downside could be contained by dollars selling, as well as in flemings into bonds which have pushed china's 10 year yield to its lowest level since june 2020. pulling up the chart on the terminal, on the radar today, alibaba earnings. analysts are the least bullish on the stock in four years, with shares lagging since the ipo was pulled here. haidi: let's get over to vonnie quinn who has the first word headlines. vonnie: thank you and good morning. the u.s. has reached president biden goal of having 70% of the adult population partially vaccinated against the coronavirus. the target was hit nearly a month later than the administration wanted. but the milestone monday. since the dramatic drop off in april, the pace of vaccinations has accelerated due to a delta fueled resurgence in the virus. senate majority leader chuck schumer plans on an
infrastructure bill this week. it has hit a roadblock. lindsey graham announced he has tested positive for covid and will quarantine for 10 days. this means he would miss voting on the legislation. graham was one of the republicans who helped negotiate the bill. he says he was vaccinated. china is said to be opening an investigation into deadly flooding in a province after the numbers known death surged from 99 to 302. state media says the government will look into the disaster response to improve prevention and relief efforts. most deaths were in the capital, where torrential rain collapsed buildings and submerged subways. china is battling covid-19 outbreaks, the strongest one since the coronavirus emerged. they delta variant has been detected in nearly half of the country's 32 provinces, including the original epicenter of wuhan. health officials are urging residents in beijing to curb
their travel in the near future. the afghan president has blamed the speedy withdrawal of u.s. troops for worsening violence, as fighting with the taliban intensifies. during a house session in kabul, he urged lawmakers to back a mobilization against the taliban. hours after it, taliban fighters seized control of a radio and tv airwaves. 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. haidi: still ahead, it is rba day with a potential u-turn on it comes to the tapering timeline in play. what she expects. coming up next, alibaba reports beijing's crackdown spirit how will jack ma's empire whether all of the regulatory tension? this is bloomberg.
haidi: analysts are bracing for the alibaba results. investors will wait to hear what it says about china's crackdown in the profit outlook which may help lift some of the clouds over these chinese stocks. let's go over to vincent send a rally for a preview. so much of the hate has been on these consumer facing tech stocks. what are we expecting from alibaba, given jack ma was the one who kind of started all of this? vincent: i think you just hit it on the head. it was jack ma who started this some time ago. and was put in the penalty box by the government for probably stepping outside of bounds, if you will, for what the government allows. it is not just alibaba.
it is 12 technology companies in the ministry of industry and information technology, sort of gathering up and suggesting under national security, that this is a cybersecurity issue. they don't want personal data leading the country. at the same time, you have to think that perhaps they don't want the far-reaching european and u.s. governments reaching into china. china, north korea, russia, have often been criticized as bad and with cybersecurity hacks in the u.s., and just recently. at the administration has come down hard on china and is trying to gather their european allies to basically battle what they see as an overreach by china. i mean, it is a smart move to batten down the hatches and protect internal data. at the same time, under the guise of not wanting one
individual company perhaps to be something like amazon in the united states which dominate so much. shery: what would this -- baba hong kong seeing a monthly drop in records, 14% in july. could we see more upside after results? vincent: i think so. what you may say going forward is partnerships between the companies that are perhaps engineered by beijing. which give them the opportunity to share platforms and share users. on the face, it does look negative, and it would be the knee-jerk reaction. you would expect the same thing in the u.s. if the government cracked down on companies that people like senator warren are trying to do, and restrict businesses and things like amazon. and facebook, if you will. in the end, if there is a
cooperation between the major technology firms, and they are sharing customers and allowing customers to crossover, and actually could be an upside to that at the end of the day. not necessarily all negative. shery: vincent cignarella, with the latest on alibaba. we are waiting for those earnings which will be the next catalyst for broader chinese stocks. a broader outlook on profits and beijing's tech sector crackdown could boost sentiment. our markets reporters joins us now. we saw a huge rally in chinese assets already. was that inevitable, given how big a discount it had against global equities is this gtv chart shows? >> yeah. clearly because of the policy uncertainties, investors have, a lot of people are asking whether china is investable at the moment. i think this policy is going to
continue to be there. one of the questions investors are facing is how do you value these china growth stocks? on paper, stocks like a tencent or alibaba looks quite cheap. if you value at those bases. at the same time, you also have to consider whether the policy of the chinese government has changed. in the past, the interest is in mind. the company's interest, which is to maximize the ability. now, beijing is pursuing a different thing. from that perspective, these companies are not do similar to some of the essay wheeze, state enterprises. you probably need to benchmark these growth starts -- growth stocks. not one to one, but at least you should can -- should see some
conversions between these growth stocks. haidi: the technical style as we could be setting up for a longer-term list reversal ride. our foreign investors that are flagged when it comes to the regulatory risks if they were not already aware? >> i think we are still in the phase of trying to find the equilibrium from both policymakers and china, and investors side. we had a selloff last week. the investment banks went into a meeting to tell them and reassure them that these are very targeted moves and we are not anti-capitalists. they also tried to set up some boundaries when it comes to the crackdown. at the same time, international investors need to have a better feeling of where all these
directions that they want to go in. we are still in this phase of trying to decide equilibrium. haidi: always good to have you with us. our reporter on the outlook when it comes to chinese equities. we have breaking news. the international monetary given its final approval to $650 billion injection of assets. we are talking about the so-called special drawing. . the imf has approved the biggest in history. these funds will be going towards nations to help them deal with the impact of the covid-19 pandemic. which we know has been devastating for many developing nations. win talking about the $650 billion of new reserves, we have heard from the managing director who has called it a shot in the arm for the world that the allocation will boost liquidity. all of the imf member come days -- countries will foster resilience and stability.
that has been approved now. shery: we are also watching breaking news on amazon. a u.s. labor official saying the union voted and should be rerun. saying the amazon misconduct prevented fair elections. workers at an alabama warehouse voted not to join a retail union, which was a setback for labor organizers and a significant victory for amazon. a source telling bloomberg that amazon's union vote should be rerun. this coming days after we have their outlook, and also their earnings missing expectations and their market cap really taking a hit. coming up, squared jumping on the near $30 billion deal for by now, pay later platform after pay. what analysts are saying about the all stock offer next. this is bloomberg. ♪
haidi: this is what happened after the announcement of the deal between digital payments platform square and the buy-now-pay-later company afterpay. though stock sort -- soaring after what would be australia's biggest m&a deal in history. this as square gained more than 13% in the regular session. then settled at that 272 handle. zooming now to the bigger picture, the global dealmakers on course for their busiest ever summer on the back of that deal, almost $550 billion in transactions have already been announced since the start of july. the square deal among many of -- many others that have announced a new record being hit in july and august. haidi: we saw that big jump when
it comes to both of their stock prices. paul allen joins us with a little bit more nuance. when it comes to after pay, not all investors are happy with this decision. paul: no, and the same could be said of square. broadly, this was welcomed by both the market and investors. we saw square up 10%. after pay, of 18% on the news broke on monday. there are some skeptics in the crowd. pepper sander was not enthusiastic about afterpay's valuation when you look at the guidance on revenues. other skeptics were surprised that squared and not just develop its own platform, considering its history of innovation, rather than splashing $29 million on afterpay. this was welcomed. we had rbc capital markets saying after pay's buy-now-pay-later platform will be a killer app for square. jack dorsey was certainly talking of the synergies between the two companies when he put
out a statement yesterday. barclays is also saying this will help strengthen the seller and cash ecosystems. shery: does this mean this could be the start of some consolidation in the space? paul: but will definitely be something to watch. it is interesting when you step back and think about it. square bought afterpay. didn't buy any of the rivals like zip or any of the other smaller competitors. afterpay has square's enormously deep pockets behind it as it looks to aggressively expand. their other big players in the market. we have paypal, apple, here in australia, the commonwealth bank, launching its own buy-now-pay-later platform as well. the space getting very crowded and also not particularly well regulated. you could perhaps expect to see more upheaval in the months ahead. haidi: and in sydney definitely, we will continue to watch that space. buy-now-pay-later, so hot right
now. let's look at what else we are watching for australia and new zealand. it is rba decision date. making a u-turn on the plans amid the virus and the surgeons in australia. we will get more on that with joe masters. key assistant measures to support domestic aviation through to the end of the year as borders are remaining closed. bhp continuing its government mandated mediated -- mediated talks in july. those negotiations will continue throughout the week as they try to stave off any strikes. shery: we do have big interviews coming up in the next few hours. stick around. we will be speaking to richard lancaster after his company's profit came in lower than expected. and nissan ceo gives us his outlook amid the chip shortage. this is bloomberg. ♪
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haidi: australia's central bank with the policy rate expected to remain unchanged. the rba government faces the prospect of having to walk back an announcement made a month ago. the u-turn would, as the virus restrictions in australia continue to evolve. the situation in sydney derailing the broader recovery across the nation. let's get more from joe masters, the chief economist at ey. of course, after the extension, we had some downward revisions
when it comes to gdp. how much resilience is there in the economy? jo: well, i guess we don't really know. at this point, there is a lot of uncertainty about how long lockdowns will last, where else in the economy they may appear. but it is important to remember the economy was very strong and very resilient going into this. we had unemployment down at 4.9%. pretty much every state was firing on most cylinders. we survived the end of. that very well. . the momentum was there. the other thing that is important to remember is time and time again, we have seen economic activity rebound as lockdowns have eased. and we have ramped up the amount of fiscal support coming into the economy. it is about the same as it was, so it is significant. haidi: want to look at this chart which looks at market
expectations. looking more restrained. the yield on the november 2024, australia bond falling on expectations. the more confident taper plan that had been expected. when it comes to some other weakness we are seeing, the housing market is starting to pull back a little bit. is this the start of something that is more worrisome, given we know how much that is tied to consumer confidence? jo: i'm not worried about the housing market in a negative sense. we are still seeing quite significant monthly house price rises well above the five-year average. it has slowed from that pace we saw back in march and april. but we are still seeing across the nation rise. there is support for households. i suspect that the authorities would not be unhappy to see some moderation in that monthly increase. it does not look like we will
see house price falls. we have low interest rates. and we are seeing investors come back into the market. shery: given you are saying that we had strong momentum going into these were nude lockdowns, does that mean it will not take that much to get the economy back on track? what are the implications of that for the rba? jo: i think that is one of the things that the rba will have to grapple with. they will need to have the near term forecast for the economy. they will likely assume that there is still quite a rapid snapback connectivity. that is what we have seen before. it has fallen about the same amount as we saw in the victorian extent the lockdowns. but from a much higher level. households have saved an enormous amount of money. $45 billion in the last year. you are likely to see households
in lockdown receiving government support and able to keep spending at a reasonable weight -- rate. we can be confident that activities will rebound. this is undeniably a bump in the road and it will be challenging for many businesses and some households. shery: where does that put the inflation outlook? jo: obviously, we had that big headline inflation number for the june quarter, still impacted by covid policy, core inflation's running at 1.6% and anytime you have anything that has economic activity, it will have an impact on inflation. if we don't get a rapid snapback in the economy in the december quarter, it is likely that the return of inflation to the rba will be a little slower and they have been anticipating. we have been running ahead of schedule anyway. they've got room to move in the forecast. haidi: where to for the aussie dollar if it is not going to be
as stark when you look at the rba compared to the rest of the world? jo: we have seen quite a significant turnaround in the underlying factors for the australian dollar. we are now in a situation where economic growth in other countries has accelerated. we have seen earlier than expected moves by the bank of canada and the reserve bank of new zealand. currencies are a relative gain. the contraction we are expecting for the australian economy, perhaps pushing back on any tapering of the bond buying program which we are expecting to hear this afternoon. that is likely to weigh on the currency. that is not a bad thing. a weaker currency provide support for the export sector. that will help us rebound from these lockdowns. shery: chief economist joe masters, great having you with us, previewing that rba decision today. let's get to the first word news with vonnie quinn. vonnie: thank you. new zealand central bank is further restricting access to
mortgages as house prices continue to soar. the rpms says it plans to reduce the value of lending banks can make starting october 1. it will consider using income limits or interest rate floors. new zealand is one of the world's highest property markets. surging 30% in the year through june. the u.s. has raised its covid-19 advisory for south korea by a notch to level two, citing a moderate level of risk. president moon jae-in saying vaccination campaign is on track. and that the number of people partially or fully vaccinated so top 20 million. in turkey, wild fires are raging for a six the day near several popular holiday destinations, destroying forests along the southern coast. at least eight people have been killed while some vacationers were rescued by boat. calls for the help turkey campaign are trending overseas,
but have drawn the ire of increasingly unpopular president erdogan. u.s. gymnast simone biles will return to the olympics. she will compete on the balance beam on tuesday. she pulled out of earlier competition citing mental health reasons. olympic medalist will also compete in the event. 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. haidi: it is time for calls ahead of the trading day. sophie kamaruddin is in hong kong. what are you watching this morning? sophie: i want to flag a note after morgan's stanley expecting ongoing pressure from china is pressuring for a reset. internet companies in china would likely prompt a gradual rebalancing for the msci index
to see a reduce waiting for internet stocks. pulling up the chart on the terminal,, sticking to chinese equities want to flag what our colleagues have put out this morning. after an ugly july for chinese stocks, some indicators are flashing that a reversal may be on the horizon. we could see a short-term bottom forming for the index, which has bound since a bullish indicator appeared july 28. shery: coming up next, covid cases are surging in the u.s., and some states are reinstating mask mandates. we will get you the latest. this is bloomberg. ♪ is bloomberg. ♪
>> as of saturday, cdc reported the seven day moving average of daily new covid-19 cases to be about 72,000 cases per day. this represents an increase of 44% from the prior seven-day average. and higher than our peak of last summer. >> we want to strongly recommend that people wear a mask in indoor settings, even if you are vaccinated. this is particularly true if you might be around anyone unvaccinated.
if you don't know the people you are around, if you are not sure if they are vaccinated or not, or if you know some are unvaccinated, absolutely crucial to wear a mask even if you are vaccinated. the difference is if you are around fully vaccinated people. that is a better situation. shery: officials warning about the spread of the delta variant and recommending the use of masks indoors, regardless of vaccination status. joining us for some more insight on the virus resurgence in the u.s. is. . henry goldman. we are seeing mask mandates being reinstated across the country, most noticeably -- most notably in san francisco. what is the latest? henry: you mentioned san francisco and its surrounding counties, reinstating mask requirements in indoor public spaces for all individuals. whether you are vaccinated or not. in new york city, there is a strong recommendation that you wear masks indoors.
but no mandate. there are increasing numbers of cases, thankfully, the hospitalizations are still at a pretty low level. certainly a level that hospitals can accept and deal with at this point. haidi: the u.s. has belatedly, about a month later than it had hoped, hit the 70% vaccination goal. does that mean some of the hesitancy is starting to shift a little? henry: i think it is really that there are so many band-aids coming online to get vaccinated. if you are a new york city employee, you have to get vaccinated or you have to be tested once a week. a lot of companies are requiring their employees to be vaccinated. some restaurants, theaters in new york city, broadway is
insisting, if you want to be in the audience, you have to show proof of vaccination. if you want to attend the broadway show, you have that as your incentive. in addition to that, you have new york city, they are giving you a $100 cash card to be vaccinated now. president biden has suggested this is a good idea for the rest of the country. shery: it seems we are seeing more breakthrough cases. senator lindsey graham testing positive for covid-19 despite the fact that he had been vaccinated. we know he attended some events with other senators over the weekend. is this going to have any impact on the congressional agenda? he was a key negotiator of the infrastructure deal. henry: i don't think it will have an impact on the processes of legislation in congress. i think it will have an impact on people who see lindsey graham as a credible messenger.
a senator from south carolina emma south carolina has been lagging in vaccinations compared to other states. he basically said that his health has been saved by the fact that he was vaccinated. and he's got a mild case. and he is not really worried about his health because he had a course of vaccinations. haidi: henry goldman there, our reporter with the latest on the virus. in the meantime, the resurgence when it comes to the virus and the delta variant in southeast asia is one area of concern when it comes to the giant heineken. the ceo gave bloomberg his outlook for the rest of the year. >> as we have been since the outset of the pandemic, we are cautious on the outlook. it remains very volatile. you can even see quarter by quarter or the first quarter in europe, we were down almost 10%.
second quarter, we were up 13%. and we continue to see these swings up and down happening. at the moment, a concern is southeast asia. impacts of the pandemic last year was relatively benign. the impact is much higher. case in point, very important company for heineken. having a serial lockdown across the country, particularly in strong markets which are important to us like ho chi minh city. with vaccination rates still being very low in southeast asia, we do expect this to remain in the second half of the year. and therefore, some caution. >> so that is the story around the second half. some of that coming through from asia. that is the revenue story. from a -- which of the
commodities are you being hit by or look most uncertain? and how able are you to pass that on to your consumers? >> yes. i think the commodity price increases are widely commented on we are not unique in that. it is not one or the other category. it is across the board, barley, aluminum, across-the-board we see that more inflation then we have seen than any time over the last decade. we are able through our policy to look at lower pricing than what you see. but still, the impacts will be significant. and it will mostly hit as next year. but we will see the first impacts on the second half of this year. shery: the heineken ceo there. coming up next, standard chartered's will report its second-quarter earnings tuesday
they are sending down to an have thousand crew on a temporary basis. this is in response to border closures. it is for an estimated two months. they are temporary with no job losses expected. they are going to be giving staff two weeks notice and pay will be given through to the middle of august. saying today's decision will impact domestic pilots, cabin crew, as well as airport workers mostly in new south wales where the lockdown continues. but also other states given the difficulty of maintaining state borders with new south wales and brisbane, and the lockdown as well. we also did hear from the federal government extending those assistant measures to support domestic aviation through to the end of the year. let's get you a check of the other business flash headlines with the parent company of the fintech startup. they have agreed to go public in the u.s.. two and half billion dollar staff measure.
singapore-based will merge with that in a deal that includes investment in public -- public equity of 100 when he million dollars. the merger is expected to close by the first quarter of 2022. singapore's grab holdings said it's strength as the pandemic used delivery helping offset declining ride-hailing revenue. they reported a first coordinate loss of 662 million in its first earning report ahead of the value of $40 billion. it delayed merger plans to provide a financial audit of its past three years to the fcc. japanese rival gca for 500 to $600 million. bloomberg understands the deal could be announced within weeks with the talks. the biggest u.s. boutique
advisory firm by market valuation. a data manager is exiting one unit and restructuring another, which will transfer 70% of the equity to external parties. the company plans to renegotiate outstanding debt. they are looking to sell nearly all of its operations outside the stress debt to improve those finances. shery: after they said they would pay out its dividend, it is confident in its capital plan. >> we are very confident that we can hit the -- i think what we've seen so far this year is the capital to get into a better place than where we thought we would be. our business in hong kong continues to flow. continues to be very active to.
shery: when it comes to standard charters, they are expecting them to announce a buyback. let's get more from our wall street correspondent. give us a preview. >> it is really interesting because standard charter has such a big business in asia. as we know, there is a lot of questions surrounding its wealth business in particular, when it comes to how it expects to expand. and how it expects to keep up its margins and its revenue after the first quarter. it had a broad and so much money. a really record first quarter. growth moderating is the big question when it comes to standard charter, and how it is maneuvering some of the broader issues when it comes to asia. haidi: what are the bright spots, given we are seeing a broader economic outlook also brightening? sonali: they idea is capital return.
any sort of buyback they announce or small dividends, it may continue the idea that these banks are able to have great returns to shareholders while they try to invest in different markets and structure their positioning in different markets. and also react, whether it is regulatory hurdles or other market issues when it comes to moderating. the fact that the wealth business is still a very good business to be in and a very competitive business to be in. investment and technology and expansion, while delivering shareholders, will be key. now they have the benefit of going after a lot of other banks which have already shown a sense of what moderation means. shery: is that part of the updates that investors will be watching, given that we are expecting to hear more from management when it comes to those changes? sonali: yes.
it is essentially what the new normal is, for trading and wealth in particular. the idea of hitting hurdles in the wealth management business is not alone to standard charters. other types of issues when it comes to credit suisse as well. but are they able to gain shares as others begin to spin off clients or detach from clients? and separately, how are they going to maneuver in hong kong, the branches in hong kong, and moving more businesses to singapore as well. where else can they put up businesses where some markets start to hit some trouble? haidi: given the regional focus, how do earnings potentially lineup compared to asia's hbc's which was a confident outlook? sonali: it is a great question. we know that more than 40% come from greater china or north
asia. just in the last year alone. the regional difference is a very big one, as we know. the question is, how do they gain shares and what is not a strict -- not as straightforward as we saw three months ago. shery: sonali basak there with the latest on what we should -- should be expecting out of those results. we will be hearing from the ceo later. plus the cfo also joining us later. and really staying with those banks, it has all been about the burnout for junior bankers in the past year working remotely during the pandemic. it seems two banks are joining the ranks of rivals that have upgraded those bonus payments for their staff to goldman sachs -- goldman sachs and credit suisse bumping pay to $110,000, up from $85,000 according to sources. which is a little bit higher than the $100,000 average we
have seen among other banks. haidi: yeah. i wonder what will be the differentiator, given the outsized impact of the pandemic and the shift we see to working practices that will not be translating much through to wall street. we are seeing everyone, morgan stanley, deutsche bank, jp morgan, trying to beef up the salaries and bonuses to make it more appealing. remember, this all started with that now infamous slideshow pack, presentation. really detailing these 100 hour weeks and just the sheer strength. shery: unprecedented. haidi: google continue to watch the story and whether it will be enough to retain the key talent. coming up in the next hour, ubs asset management head of asia-pacific fixed income is with us to share his market view. we have an exclusive interview with the clp ceo, richard
courts welcome to daybreak: asia from bloomberg world headquarters in new york, i am shery ahn. >> i am southern, rude in hong kong. we are cutting down to the major market open. >> i am haidi stroud-watts in sydney. our top stories is our. following wall street lower. the treasury yields also concerning. as the delta variant
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