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tv   Bloomberg Daybreak Australia  Bloomberg  April 26, 2022 6:00pm-7:00pm EDT

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♪ haidi: good morning and welcome toaster there." i am haidi stroud-watts in sydney. sheri: good evening from new york, i am shery ahn. the top stories. tech stocks tumble on lackluster results. alphabet posting a rare earnings miss while announcing a share buyback. haidi: u.s. doxxing
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across-the-board. shery: and russia escalates its standoff with europe, cutting off gas supplies to countries that refuse vladimir putin's mandate to pay in rubles. this is the picture across wall street, we are seeing pressure on u.s. futures, down almost 0.5%, this after the s&p 500 lost almost 3%. the nasdaq composite seeing its worst day since december 2020. the nasdaq 100 on its lowest level in a year. the thing is we have about 80% of companies reporting earnings, beating expectations, but disappointing forecasts, with inflation being felt in cost pressures. that is affecting markets. you have the flight to safety with the treasury rally and the dollar gaining ground. wti seeing a bounceback, continuing to extend gains. of course, support is coming from policymakers pledging to support their economy.
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stocks we are focusing on after hours are those that reported after the cash flows. these are the microsoft stock is rebounding from the earlier losses after the first quarter earnings beat expectations. not to mention visa, we saw a rebound in their travel spending, so that helped. but not great news when it comes to of hundred missed earnings expectations. texas instruments is also down almost 4%. concerns that we are seeing the peak in semiconductor usage. haidi: and not a great lead that you guys have given us here in asia. let's look at have it is shaping up for the asia equity session. equity futures are broadly in the red, starting with new zealand, a downside of zero -- 0.5%. extending the four-day decline in futures to more than 5%.
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this is u.s. stocks have fallen to their lowest in six weeks. a lot of concerns about future profitability versus central bank trading. chicago naked futures are looking flat. we mentioned -- chicago nikkei futures are looking flat. except for the yen, it is holding steady. the boj is expected to keep their policy settings and changed, even as we have seen the rapid weakening in the yen for the two decade low. there is a possible adjustment to policy or messaging. but negative interest rate and asset purchase program is expected to be maintained. when it comes to fx, we are watching the risk currencies, the aussie and the kiwi seeing a downside. the bond yield for three years in austria is seeing a hold. it is really this concern about whether there will be a policy, staff and what that means for
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the economic outlook. shery: we have to see the markets, to really feel the pessimism that is felt across. we have deutsche bank now seeing the fed funds target rate at 5% to 6%. really calling for a deep recession to come by next year. and we already saw u.s. treasuries rallying, the 2-year yield plunging 50 basis point, despite the fact that we have strong demand from the action of the note. we are now seeing this pessimism with potentially more aggressive monetary tightening, the west since the 1980's or so, deutsche bank saying that price psychology will not help. that we are seeing an extremely tight labor market. this is an even more bearish prediction that we had from goldman sachs recently. haidi: and that can only worsen with this escalation when it comes to energy prices. russia making good on its threat to hit some of these countries who refused to make payments in
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rubles, now saying that it would hold gas supplies to poland and bulgaria, what is seen as a major escalation in the standoff between moscow and european countries over energy supplies and the war in ukraine. basically, they are halting gas fluids to countries who refuse to two's demand to pay for the oil in rubles. the euro bloomberg has rejected that, but the payment deadlines are due now and we are starting to see the reaction across government in europe. we will be watching what some of these other countries do as they have to make these decisions. we saw the big jump in european natural gas up 17%. shery: given the pessimism in market, we were expecting tech earnings to provide a glimmer of hope, but that doesn't seem to be happening in the after our session. alphabet reporting first-quarter sales that fell short of estimates, a rare maze of the tech giant. for more, let's cross our west coast reporter, ed ludlow.
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what stood out to you? ed: alphabet is a company that doesn't miss on the top line. revenue of $56 billion, only moderately below southside estimates of 56.1 billion. two problems. weakness in its ad placement business in europe, headwinds from the conflict in ukraine, the macro picture. and just macro uncertainty. we have seen over this earnings season, advertisers pulling back slightly because of what is going on around the world. the second part interestingly, youtube. revenue at youtube became in below expectations. two factors that executives talk about, the first, changes that apple has done to third-party tracking on ios. also, this competition with youtube. tiktok is increasingly being discussed when it comes to social media and the impact that is having, in terms of stealing eyes away from platforms like
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youtube. haidi: for microsoft, it was a narrow beat, but the cloud division remains very strong. ed: yes, microsoft is a cloud story. the sell-side reaction, shares are higher in after-hours. the cloud fared better than expected. it is still a driver of growth, solidly in the number two spot in the market behind amazon's aws. they had some other spots as well. it talked about the growing market share in videogames. xbox is doing well. but it is the subscription in digital services for gaming driving that. we have a headline crossing the bloomberg -- microsoft expects fourth-quarter revenues to be softer by about 110 million dollars, directly relating to the conflict or war in ukraine. that is interesting, the impact these tech giants are feeling from what we're are seeing playing out in europe. haidi: really fascinating as you make that connection there. our bloomberg west coast reporter, ed ludlow there.
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earnings are becoming a drag on markets, investors weighing whether companies can withstand tightening fed policy. for more analysis on that, our correspondent for asia and mliv contributor, garfield reynolds. garfield, investors are feeling sanguine that central banks are going to get it right. garfield: yes, still not sure how the landing strip is getting narrower and narrower. they are way over the landing strip, as far as bringing it in soundly. what is going on in the markets overnight is, jay powell and the other fed speakers are very clear on, we are going to raise rates rapidly because we have to, but we are confident that we can do that without setting off a recession. now, aided by these disappointing tech earnings, especially the outlook. it is all about the outlook when thinking about how the economy is going to fare. investors are going, we are not
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sure you can do that. if you look at what the 2-year yield in particular has done, the way it has dropped like a stone, into a fed meeting where you are expecting 50 basis points to be delivered, that says that the bond market is backing that up strongly in the, saying, is the economy is going to slow quite rapidly. maybe it will not be a recession, but it will definitely be a dramatic slowdown. that in and of itself is going to cast doubt on some of these very aggressive forecasts from not so much the fed, but the bulk of banks out there who are talking about very high turnover rates. even james bullard, the st. louis fed president who is very keen on raising rates rapidly, he wants to raise them fast, but not necessarily as high. raise them quickly and see how we go -- with his initial response. that is a lot of what we can expect from the fed. they will still raise rates, and
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then they will see whether these fears in the bond market and the stock market are going to bear fruit. shery: the two-year back at the 2.47 level. garfield reynolds. it really doesn't help when we have more geopolitical tensions. russia wildcater of that poland and bulgaria -- russia will cut off gas to poland and bulgaria. our guest joins us now. what are the implications not only for these two countries, for order europe? >> we are getting closer to a severing in energy relations between russia and europe, and it is a big deal. i mean, we are talking about two whether to be small consumers, poland and bulgaria. but the real question is, does this signal what will happen in larger gas consumers like italy and especially germany? germany has taken a lot of
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criticism for its continued dependence on russian gas, 40% of its gas needs are from moscow . it says that without the grass, the government has estimated that the german economy will take a 200 billion euros. from the 6% of gdp, and they cannot afford it. european countries have made clear that they will not meet poutine close demand to pay in rubles. this -- they will not meet putin's demand to pay in rubles. so we'll see gas supplies to europe cut off from russia. that will have huge implications. it will force europe to make very tough decisions about who will get gas, and potentially even the russian gas, because they cannot replace all the russian gas right now. it's impossible. the one blessing is that it is summer. the pool do need the gas to heat
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homes, demand is low. but the winter is coming and without russian gas, will not be able to replenish stockpiles, and it will be a tough road ahead. haidi: so if this is a turning point, emergency measures need to be taken now. there is a buffer with the weather at the moment, but what can they do to ensure the security of energy supply? will: two things. they can encourage people to use less gas. small things people can do like turn down their thermostat or the level at which their boiler works. if everyone does that, they generally can make a difference to demand. but ultimately, they will have to perhaps purchase russian gas, and that means some industrial consumers not getting the gas they want. well that will protect homes and make sure homes still have power and heating, it will have an impact on europe's industrial economy. haidi: will kennedy, our executive director of energy equities, reporting from chicago. over to vonnie quinn with the
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first word headlines. vonnie: thank you and good morning. the u.n. secretary general enter new guterres met with russian president vladimir putin in moscow inability to revive diplomatic efforts to end the war, as officials from both russia and ukraine say that talks are at a dead-end. during the u.n. meeting, putin said he's not refusing to negotiate with kyiv. guterres will meet with president zelenskyy on wednesday. >> i am concerned about repeated reports of violations of international humanitarian and human rights law, and possible war crimes. and i require independent investigation for effective accountability. vonnie: lael brainard has been confirmed as the federal reserve vice chair in a 52-43 senate vote. she is the first of four central-bank nominees set for consideration by the chamber. president biden has a fifth nominee, awaiting the hearing by the banking committee.
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china is set to step up infrastructure investment, following a meeting chaired by president xi jinping. state media is reporting that financial authorities decided to advance construction projects in transportation, energy, and water conservancy. china's lockdowns have tripled construction and port activity to levels below the first covid outbreak in 2020. the world bank granted sri lanka $600 million in financial aid the country's presidential office says the aid will be delivered in two phases with, a first installment of $400 million targeting health, food and gas needs. the world bank representatives who met with sherlock as president of our mr. moore support if the crisis continues -- with sri lanka's president, have promised more support if the crisis continues. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is. shery: bloomberg more markets
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coming up next on. shery: "daybreak: australia." this is bloomberg. ♪ oomberg. ♪
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>> it is probably about 50%. usually about 60%, but about 50%. but an important point to me is how deep a recession. i think the odds of a really deep recession, you know some
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people are raising those shades of paul volcker and the deep recession we had than. i think that is very, very unlikely. extremely unlikely. shery: that former fed vice chair on the possibility of a u.s. recession. our next guest says equities can do fine if the fed hikes are slow-and-steady. with us is ellen hayes and, chief market strategist at putnam investment management. good to have you with us. you have the likes of deutsche bank saying that we could see the most aggressive tightening since the 1980's. how are you positioning in terms of a recessionary outlook in your market allocations? ellen: so, looking at 2022, we don't think a recession is likely this year. but no question, the stakes have become higher even in the last few weeks as we have seen at the federal reserve become more hawkish in their speeches.
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of course, they have only raised interest rates 25 basis points, yet look at how the market has reacted. clearly the rhetoric is doing a lot of the job for them. what will be key to watch is first-quarter earnings, and we are beginning to see his coming. we have seen a quarter of the companies report so far. what we are watching for is how much can companies bear revenue, but how much are there operating margins going to contract. if earnings misses happen, then i think the federal reserve may want to put on the brakes on their raises a little bit more quickly. so we have been reducing risk of the last nine months. it makes sense to continue to reduce risk because the risks of the federal versioning have increased. shery: does that mean that the buy-and-hold strategy that we have seen for quite some time now will not work this year?
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ellen: we don't think that is going to work at all. that is a good point. if you look historically, 10% to 20% drawdowns are fairly common on average every 18 months or so. and after we saw the u.s. equity markets increase by 100% over a three-year period between 2019 and 2020 and 2021, you will not see this kind of double-digit returns, you are going to see modest returns this year. we think we can end the year up in u.s. equities. but it is not going to be a smooth ride. increased volatility. you need to be really careful. and right now we are on the side of not owning some of the really high-risk tech stocks, with earnings are often the future, but instead, only much more conventional, you might say boring companies, like target, for example. haidi: what do you recommend in the commodities and energy
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space? ellen: that is a tricky space. because you have seen a lot of the steel companies and even energy companies roll over in the last few weeks. the market is telling us that they will not be able to keep that pricing. on the other hand, dow chemical is a name that we own, and sherwin-williams. they have really strong quarters as they have reported earnings. so you have to differentiate between companies in the materials space that are pure community plays and commodity pass-throughs, and those that have a little bit more value-add because of their technology, or in the case of sherwin-williams, because of the brand power that they have. haidi: how much of the powder are you keeping dry? are you fully invested at the moment, or is it ok to keep a little bit as a buffer? ellen: it is absolutely a good idea to have a bit of dry powder. right now across our strategies, we have about 5% cash. most of the time, of our clients don't want us to go above or below 10% cash, so below 90%
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invested. so we are not going to go all the way to zero in terms of investing. but we do think it makes sense to keep some dry powder because of this volatility. you have a very strong u.s. consumer, everyone has stopped for months about how all the excess savings are there. . but the household balance sheets are strong. the average checking account is up almost 50% from before covid, according to bank of america. wages are rising, unemployment is low. the consumer has a big tailwind. yet you do have these clouds on the horizon in terms of inflation possibly staying high, and in terms of the economy slowing. when you get these strong crosscurrents, that leads to increased volatility, and that is what we are going to continue to see over the rest of this year. haidi: ellen, great to have been with us, chief market strategist at fl putnam investment management. you can get a roundup of all the
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stories you need to know on today's addition of daybreak if you are a terminal subscriber at dayb . you can customize your settings so you get the stories on the industries and assets that matter to you. this is bloomberg. ♪
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shery: a quick check of the latest business flash headlines. texas instrument gave a disappointing earnings forecast for the current period, adding to concerns that demand for semiconductors has peaked. the company sales sales will be between $4.2 billion and $4.8 million in the second quarter, which is below what analysts predicted. nomura has eked out a small fourth-quarter profit thanks to one-time gains. japan's largest brokerage earned about $242 million after selling its think tank. the results cap one of
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nomura's most challenging years. one analyst called the results "lackluster." tesla plummeted on tuesday, wiping of $126 billion in valuation. shares fell 12% on concerns that you learn must sell tesla stock to complete his 44 billion dollar takeover of twitter. the e.v. maker's market cap is down more than $275 million since april 4, when most book disclosed he increased his stake in the social media company. haidi: some big moves in the euro this morning, declining to one dollar -- 1.0635. we have seen this in combination with the gains in the greenback gaining against everything except for the yen. also increasing weaponization of russia of energy experts is
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pushing the euro to the five-year low. already weakened by the war in ukraine. we are seeing further breaks looming. analysts looking at the euro potentially closing out april below the 20 year trendline, and putting parity with. the greenback on the horizon. . . we saw this with gas prices soaring about 17%. russia says it will hold deliveries to poland and bulgaria and other e.u. nations, now looking to make decisions as the deadline overpayment in rubles looms. a look at the day ahead forcefully and new zealand now. the first quarter cpi data is set to be released. information about 4%, well above the 2% or 3% of that rba's target. property sales in new zealand were lowest in a decade in the third quarter and are about to fall for the treasury will offer $525 million in nominal bonds in
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may. next, more on the price pressures facing australia. we have the country's latest inflation reading. will it reflect an economy continued to recover? this is xfinity rewards. our way of saying thanks, with rewards for the whole family! from epic trips... to the original jurassic park... on us. join over 3 million members and start enjoying rewards like these, and so much more in the xfinity app! and check out jurassic world: dominion, in theaters june 10th.
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shery: oil prices extending the gains we saw in the u.s. session, near that $102 a barrel level. same reason why we saw base metals really gaining ground, recouping the losses being led higher by copper. gold at the moment is holding steady, above the $1900 level. we continue to see gains as bond yields fall and china's pledges to aid the economy, also helping
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those prices. . but what we are watching right now, europe gas futures surged as much as 17% on the course of that halt in russian flows to europe. russia's weaponization of energy is leading to the euro right now at its lowest since april of 2017, headed towards parity with greenback. let's get to vonnie quinn who has more of the european gas news. vonnie: russia will cut off gas to poland and bulgaria on wednesday, making good on its threats to hold supplies to countries that refuse vladimir putin's demand to be in rubles. it is seen as an escalation of that standoff between europe and russia over energy supplies and the were in ukraine. bloomberg has learned the kremlin is considering a plan to suspend its regional elections for september amid concerns about growing central tensions on the war. the talks are an indication of
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moscow's worry about raising political and economic costs, as fighting continues, and living standards decline. securities and exchange commission chair gary gensler has floated an idea aimed at increasing transparency. he wants to slash the amount of time traders have to report transactions from 15 minutes to one minute. he says disclosures have failed to keep up with technology. vice president, harris tested positive for covid-19, making her the highest ranking biden administration official to report being infected. a spokesperson says she tested positive on both rapid and pcr tests she is not showing any symptoms, but she'll isolate what she, works from home. she was not considered a "close contact" of president biden. prime minister kishida has urged japan to keep working on its 2% inflation goal, after announcing an aid package to ease the pain of soaring prices. the new measures are expected to
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help the boj stick to the rock-bottom interest rates that have contributed to the fall in the currency. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: high inflation, along with the prospect of slower growth, is pushing central banks in most parts of the world to raise rates. australia reported its numbers today. . cpr is expected to breach the rba's target for the first time since 2010. for more analysis, we bring in tuuli mccully, head of asia-pacific economics at scotia bank. let's look at the inflation picture. i want to show a reviewers on the chart. we have seen in a lot of economies that cpi as well as ppi in particular, consumer inflation coming in hotter than
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expected. if we get about 4%, well above the expectations, does that make the calls for a supersized headache from the rba louder? tuuli: well, we are certainly seeing inflationary pressures gradually becoming more broadly based in australia. that is something that the reserve bank of australia will be closely monitoring. seems that food, housing, energy and related costs are still the main drivers, but will see how much the producer price and higher input costs are going to be filtered through to the economy. but i would say that the australian economy is resilient and continues to recover quite nicely. this reflects the fact that there is pent-up demand, loose fiscal and monetary policies, and robust export sector performance. now, in terms of the rba, i think in addition to today's cpi print, the key is what will happen to the labor market and wages.
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this is data that we will get on may 18, and that is something that the rba. hike in the very near future -- i don't think we will get a big hike in the very near future, i think the first hike will come in july. . but of course, it depends on the data. haidi: the big uncertainty is also the slowdown in china. traditionally it is such a source of dependence for the australian economy. does that give the rba pause about how confident they can be about the recovery? tuuli: certainly. the austrian economy is highly dependent on developments in china, given china is a key export market. that is something that will impact the country's outlook. at the same time when you look at domestic demand in australia, it is quite solid. consumer spending prospects are supported by a solid labor
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market, and high house prices and high household wealth levels. that should give some confidence to the rba that he doesn't need to be formally cautious, but still, i don't see runaway inflation in australia. that means that any interest rate hikes will be gradual. shery: will the federal election, play to the rba's thinking? tuuli: i think the rba will want to see the election out of the way before it starts adjusting policy. therefore, i don't see a rate hike next week. even in early june, it is a question mark. it depends on the cpi and wage data. privacy the most likely outcome, or timing for the rate hike being in july. shery: you mentioned wages. . this chart on the bloomberg is
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showing that we continue to see hiring in australia, but necessarily wages catching up. when will that happen? tuuli: wage inflation in australia has been quite a contained and muted factor recently. i think we will see a pickup in which inflation simply because australia has reached full employment and we are seeing labor shortages. i think wage gains will accelerate 3% by mid-year, and at -- and that will help keep inflation sustainably within the rba's inflation target. haidi: where to, when it comes to the aussie dollar then? we have seen a pullback. is there a level the ec of being fair value, where the rba -- is there a level where you see of being fair value? tuuli: the news coming out of china, the fact that monetary policy is a lot looser in australia than let's say in the
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united states, so there is some weakness in the near term. but i think once the u.s. dollar strength starts fading later in the year and the rba starts playing catch up, then we will likely see further support for the australian dollar. but in the near term, i think the chinese news is probably going to create some volatility for the australian dollar. shery: always great to have you with us. tuuli mccully, from scotia bank. coming china touts infrastructure spending as a best way to bolster its economy hurt by covid lockdowns. we will discuss that, next. this is bloomberg. ♪
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haidi: let's see the picture when it comes to what we are seeing with the bond space. of course, we have cpi for australia looming. that has the potential to move bond investors further. we are expecting the cpi rate to come in heart, well above estimates, at about 4% and potentially above that 2% to 3%
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band for the rba. increasingly, we have more investors, calling for a supersize hike from the rba. some are calling for as much is 40 basis points to bring it to 0.5% for the cash rate or even higher as we get more signs of the resilient recovery, and heating price pressures in this economy. this is what we're seeing, the 10 sitting above 3% there, and the three year at 2.58. in new zealand, a similar picture as we see more resilience when it comes to the aussie dollar, after being one of the big losers in the overnight session in the g10 space. we had really robust dollar strength. the kiwi and the odds he out overnight, but the aussie dollar is regaining a bit in the morning session, just above 71 u.s. cents a share. shery: we are watching treasury
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snap back with signs of extreme bearishness. the move is led by the short end of the curve. citigroup expect the rally to continue on a tactical basis, as a one-sided short positioning begins to ease. strategists say that shorts will be underwater if the benchmark 10-year yield falls further. the extreme volatility in bonds seems to have been driven by the covid outbreak in china. bloomberg economics is saying that a potential lockdown in beijing alone may not be as damaging to china's economy, as shanghai's has been, but could lead to a bigger spillover event. one economist saying that other regions will double down on their own corbyn zero measures, if mass testing in the city -- covid zero measures, if mass testing in the city is dialed down.
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haidi: let's get more on the latest lockdowns in china, i want to bring in our senior market editor and bloomberg opinion columnist, john authers. shanghai is still trying to extricate itself from levels of isolation and quarantine. what is the endgame here? what are the implications for the markets if we continue to see this lockdown and slowdown in china? john: i think the main implication is the effect it will have on risk assets globally whenever you have a slowdown for a fluid ounce care if china. the devaluation have already seen in the yuan is driven in fairly large part by the concerns over growth. growth concerns driven by the
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covid lockdowns. that leads to not-owned concerns about growth in the rest of the world, because china continues to be the buyer of last resort for most places in the global economy. i think what is interesting is that china's problems been viewed until now as a supply problem that could push inflation. implicitly, we are now for some reason switching around to thinking that the latest version of lockdowns will have more of an effect on demand, and therefore, push inflation down. so you could make a macro case if you try hard enough. the bottom line is that this is bond to have an effect on the rest of the world and change some assumptions. shery: when it comes to the market reaction so far to what is happening in china, with the
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yuan falling to levels we haven't seen since the shock devaluation in 2015, are we back to that sort of situation where people should panic? john: and don't think anybody should ever panic. if things are very bad, you should still try to keep your wits around you if you can. you do see the kinds of -- you have seen in chinese share prices, it suggests that we have most of the gains that were made since the last devaluation of the chinese currency, since 2015. if you look to which, when you think about the growth china has had in the last 10 years, the stock market hasn't gained anything from it.
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that plainly shows you that there has been some reasonable -- take into the risks out there. i think the biggest risk continues to be what it has been for a while, which is whether there will be knock-on effects for the chinese real estate partners. the problems of evergrande haven't gone away, the problems of high-yield property debt in general haven't gone away. if the covid slowdown or lockdowns create even more pressure on that market, then that could yet have more profound ramifications for the rest of the world. haidi: and we are likely to see more pressure on the yuan as well. we have just seen the euro take out that five year low. how does a weakening yuan play into that dynamic and the prospects of recovery, or to
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continue dollar strength? john: that is an interesting point. one veteran exchange strategist at socgen made the point that when the yuan is weakening against the dollar, generally speaking, the euro has to do so at. the yuan is extremely -- the chinese import traders are extremely important to the eurozone. so it is unlikely that you would see the downward pressure on the euro diminished until the yuan has found a new level. that obviously makes life extremely difficult for the european central bank, who have been taking off inflation in a way nobody quite expected. but you do have much higher rates of unemployment in europe
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than you have in the u.s. or in china. so they are in a very difficult position. problems chemchina and the devaluation of the yuan feed into that even more. haidi: is likely saying elephant falls over, it can do a lot of damage, with reference to the yuan there. john authers, thank you. one hsbc economist says he remains heavy on china. he spoke to bloomberg after reporting earnings that were a beat estimate. >> we are growing our franchise there. we have seen no reason to slow down despite short-term dislocation because of the omicron variant. overall, we remain big china bowls. when we talk about the china soda, we expect rates of around 5% growth this year and next
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year, still very healthy compared to the expectations in the west. >> have booked 1.3 billion dollars worth of russia exposures in the first quarter. are you making any additional provisions that this point or at least appearing to make any further provisions, and is a conversation on within hsbc about maybe pulling back out of russia, given other banks have done that for reasons of protecting reputation? overall, we have a relatively small business in china, it is to be there to support multinational preference. we are -- corporate at the moment about what you want to do, and we are working with them largely to manage franchises. for the time being we are pleased for new business, but we are working with our existing customer base to manage through what is a very difficult situation for them in their
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russian businesses. we did take some additional provisions in the quarter against the balance sheet that we had there which is around $250 million of additional provisions for russia exposures as think that is a fairly complete version for everything we see at the moment. >> however is that likely to give your bottom line a boost , especiallye since hsbc is even more re-sensitiveq that some of your other banksuit? y>> we thinks it will be a massive benefit to our distribution capacity over the next four operating months. our net interest margin this quarter was up seven basis point, the first time it was up since 2020. oh interest rate margin has not been at this level since the first half of 2020, and that is just the very start of what we see of raises,
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through. we have said that we want to get back to double digit numbers next year. we are very confident in getting back there. that will be judged by rate rises. we are very optimistic about the outlook. shery: the hsbc chief financial officer ewen stevenson speaking to bloomberg. next, tesla tanks, dropping $126 billion, on concerns that elon musk could sell shares to find his twitter take over. more on that next. this is bloomberg. ♪
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shery: microsoft is rebounding and gaining back the losses we saw early in the session, given that they actually beat earnings estimates for the first quarter. there cloud services did really well. alphabet continues to move down, but still peering back the earlier losses, down 2%. they missed on expectations, in the market reaction was not kind. we saw ge being one of the biggest losers on the s&p 500 today because they are still struggling with those supply chain disruptions. gm, though, did really well and we are seeing gains after hours.
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tesla, there are some concerns that you unmask might be selling some of his shares to find his twitter buyout and that is pretty putting pressure on the stock. haidi: as we said, investors were not kind. certainly a tough day for tesla investors, shares falling. tesla is sinking as part of a broader selloff. but it is the twitter effect. su keenan joins us with more. the stock for tesla is down 23% since musk unveiled his twitter stake in his strategy. what are we seeing that connection? su: a lot of weight on the stoxx, three strikes against it, to paraphrase one strategist. you have got concern that musk may sell more of his tesla stake to find the big twitter deal, and there is concern that he could be spreading or his team is spreading themselves too
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thin. shares were down in the selloff that we saw in the broader market. but look at tesla shares, market cap down by more than $275 billion since april 4, when musk first disclosed his twitter stake. in the dollar value of musk's 17% stake has shrunk by almost double the equity portion he pledged in the twitter transaction. and analysts say the biggest concern is that he had posted his tesla shares to secure about a 12.5 billion dollar margin loan. he has more than enough in his tesla stake to cover that. but investors are fleeing high beta stocks, and there is concern that this light can continue, adding on a bit of risk factor. shery: bloomberg's su keenan there there with the latest on elon musk. in the next hour, china has pledged to boost monetary policy support and lands are an
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infrastructure spend have renewed concerns about the global economy. citi austria will tell us what that means for stocks -- citi austria will tell us what that means for stocks. that is this is bloomberg. ♪ this is bloomberg. ♪ ahead. -- citi australia will tell us what that means for stocks. that is ahead. this is bloomberg.
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♪ haidi: a very good morning. haidi stroud-watts in sydney and we are counting down the ages market opened. shery: i am shery ahn in new york, welcome to "daybreak: asia ." internet stocks deliver earnings disappointments, alphabet reporting images for the first time since 2018. the results will pressure asian markets on concerns that growth will


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