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tv   Bloomberg Daybreak Australia  Bloomberg  May 10, 2022 6:00pm-7:00pm EDT

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♪ >> a very good morning. welcome to "daybreak: australia." we are counting down to asia's major market open. >> the top stories this hour -- u.s. stocks bounced back after another while session as investors count down to key u.s. inflation data, which may show price pressures moderating. >> the cleveland fed president, backing half-point rate hikes but said the central
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bank is not ruling out larger moves later in the year. >> and jp morgan's call on chinese internet companies being on investable. under pressure at the open right now after volatility in gains and losses. the nasdaq 100 outperformed major benchmarks and rebounded from the three-day wipeout. the biggest in 20 years or so. we also have the 10 year yield falling below the 3% level. the dollar index also retreating a little bit as we see u.s. stocks gaining ground. crude prices, falling about 10% in the last two sessions. we continue to see the downside pressure in the asian session as we see the european union soft its stance a little bit on russian oil imports. not to mention we do have the eia oil report coming up on wednesday. we are watching tech stocks.
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when it comes to the nasdaq 100, we did bounce back a little bit today. the number of companies still trading above their short-term moving average is very few. this of course as we continue to see this perfect storm for stocks. trying to catch up to all the stock selloffs in different sectors. we are talking about downgrades, the fastest in two years or so, haidi. >> take a look at the australian futures. we are on track for a straight session of losses here. futures down about a 10th of one percent. looking like an early decline at the start of cash trading. .4%, after we saw the s&p 500 finishing well if the session highs. a slew of fed officials speaking ahead of the numbers, causing destruction for the month. take a look at the aussie dollar.
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sitting under 70 u.s. cents. it does seem like the rally will be limited to about that 70-30 level. a may 2 low, despite the strengthen the dollar. the dollar-yen, steady at 130. in terms of the data, we are looking ahead to consumer confidence numbers. >> especially on a day like today when we had peloton falling to a record low. that is interesting because we are not only talking about peloton, we are talking about a consumer discretionary stock under pressure broadening, given the rising inflationary pressures. i was mentioning the perfect storm, rising prices, the war in ukraine, covid zero and china. it looks really bad -- in china. it looks really bad pair with the likes of goldman sachs,
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coming out and saying perhaps equities look attractive over a 6-12 month horizon. so let's wait it out. this is on top of jp morgan's call on monday, doubling down on the dip buying call. >> another way to look at the impact when it comes to tightening financial conditions and the pullback in growth, the stress that is making a comeback -- you look at the risk of companies and how they are reacting, it's risen to a level not seen in about a year. this is the amount of distress in the americas, last month, the highest in a year. we are looking at the impact of inflation, supply chain disruptions, putting a growing number of companies under stress. judging by the pricing we have seen the u.s. corporate bond market. really right across different
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segments of the market, you are starting to see a big distress supply surge starting to happen. >> let's take a look at the fed speak we got today. we are talking about the market gyrations in today's session. there was plenty of fence -- of fed speak, not ruling outa 75 basis point increase. let's bring in our policy editor, kathleen hays, and are cross assets -- our cross assets asia editor. it's really not an easy data be an investor in this market. have so much volatility. on top of that you get these fed speakers coming out with their ideas of where the tightening path should go from here. what did they say? >> they said more rate hikes are coming. actually, kind of reverse now, something she said as recently as april 22nd in a previous interview, she pushed back again
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75 basis point rate hikes when she was asked about it. she then favored very intentional rate hikes. not the shock of 75 basis points. here's what she said today about 50 basis points versus 75 when she spoke to btv. >> we don't want 75 forever. what i'm going to do is i think 50, the pace we are going out now seems about right to me in the second half of the year, if we don't have inflation moving down, we may have to speed up, but if we see it moving down and demand moving down, more than we might be predicting, we can adjust at that point. >> very important for investors. most are expecting 50 basis points right now. it makes perfect sense, as she told bloomberg television. so may be you do 75 if you need it but you wait until the second half of the year and see how inflation is doing. at least until then.
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not all fed officials are on board with the 50 basis point hikes. here's another big theme, a lot of people are worried about recession. the fed cannot stop inflation without slowing the economy enough to cause it to actually contract. the fed governor said this is a red-hot labor market. it needs to cool off. john williams, the president of the new york fed, said the same kind of thing. he think it is going to help cool down the labor markets. profile bostick today saying we just need to get to neutral. it is a wait and see. >> with this cpi gauge, are we seeing a peek inside? >> a peak is not going to be enough. peaking at 8.5% year-over-year,
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a 40 year high, the fed wants to get it a lot lower than that. look at this chart. the numbers are going to show the headline cpi probably went from 8.5%, they are looking for 8% even on the core, looking at something like 6%, 5%. there's a big pulley in the monthly inflation numbers. gasoline prices fell, if you look at seasonal adjustments. if you look at the core cpi, you're going to see a somewhat higher monthly number, due to home prices rising, etc. services picking up,. they have got to see the start falling and keep falling. that's where the expect more rate hikes this year. >> how much of all of this is priced into the markets right now? >> the bounce that we saw last
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night in the u.s. was not surprising. given how much markets have sold off. was it a convincing bounce? was it a mini bounce? liquidity remains low. the market is valuable to any sharp move. while that number is expected to moderate, the cpi number, inflation remains elevated. what you saw last night was investors positioning for some sort of a short squeeze higher, if that number comes in soft. as you mentioned, we are starting to see analysts trying to catch up with this five-month route in equity markets. touting -- touting their share price targets. showing how they are turning sour on the market. >> the inflationary pressure
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could continue given the energy flows that we are seeing get disrupted. there is no russian flow sign of a ukrainian entry point. some russian flows will be rerouted. russian gas transit orders traveling by ukraine a step to fall by 18% on wednesday. this as were so ukraine and russia clashing over natural gas pipelines to europe. this could continue to disrupt supplies in that area for the first time since the war began. we are talking about the gas transmission system from ukraine, one of two key entry points once it. we are seeing those orders are set a fall by about 18% on wednesday. ukraine saying they would not except russian gas from 7:00 a.m.. saying they can't reroute flows to another entry point either. let's get you over to vonnie
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quinn with the first word headlines. >> thank you and good morning. house democrats plan to vote soon on a $40 billion emergency ukraine spending bill. most of the packet will be for defense spending including new weapons. and includes $8 million in economic support and $4 billion for humanitarian aid. it is significantly larger than the one president biden requested last month and appears to have bipartisan suit. -- bipartisan support. security forces have been given shoot on-site orders to quell antigovernment protests. the unrest continued on tuesday despite a curfew with some protesters torching buildings and vehicles. the president's brother resigned as prime minister. the month-long protests have been fueled by the government's mismanagement and inflation. know what -- the who, urging china to rethink its zero covid strategy, saying it is
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unsustainable. they say it makes no sense any longer given the behavior of the virus. it is a rare instance of the who chief challenging member states -- challenging a member state. >> when we talk about the zero covid strategy, we don't think that it is a sustainable, considering the behavior of the virus now and what we anticipate in the future. another strategy would be very important. >> jp morgan's on investable call -- uninvestable call on china outburst about $200 one million from u.s. and asian markets. global news, 24 hours a day, on
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air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪ >> coming up -- with key u.s. cpi data due out wednesday, we will get the outlook of what it could mean for the bond markets. our next guest says correction does not mean a recession is on the horizon. that is just ahead. this is bloomberg. ♪
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♪ >> we have seen quite a big correction. >> it's been really traumatic. >> de-risking across the complexes. >> the sentiment is incredibly bearish right now. >> we have seen a huge absorption of a lot of worrying for investors. >> we are starting to see some forms of capitulation. >> we have not seen a capitulation move, the question is where do we go from here? >> today could be one of those dead markets. >> there's still a great deal of uncertainty about the near term trajectory. >> we are sort of waiting to see here. >> a tradable rally, is it likely the next few months? >> sure does. >> we are starting to get closer to the bottom. >> may be what we should be
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doing is looking at our shopping list, and buying some things. >> equities are starting to look attractive for medium to longer term buys. >> there may be opportunities coming in on the horizon. >> some of our guests earlier. our next guest says the market correction doesn't mean that a recession is on the horizon. let's bring in dan genter. got to have you with us. we are not expecting a contraction in the economy. can the contraction evaluation given the selloff at least provide some opportunity? >> i think that it can. you are in a situation now where we were dramatically over extended with regard to pe's. it was not sustainable in an environment with slower economic growth and's -- and slower earnings.
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you are at a much more sanguine level. we are probably within a range right now that, even with earnings slow, more than we expect, you are at a point of reaching some type of equilibrium. if the tremendous hurricane force headwinds we had the first quarter of this year are starting to subside a little bit, and i was a time to look bottom-up and look for some value and opportunities. >> especially at a time when we have inflation numbers coming up this week. we are expecting those wednesday numbers. markets seem to be a little bit on edge. especially at a time when despite the fact that the fed is saying we make it -- we may get back to that 2% inflation target, we are seeing the compounding effects of inflation. 9% inflation right now could really exacerbate the price structure later on -- price picture later on.
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are you expecting any consumer patterns to change? is that having any sort of impact on how you are allocating? >> certainly when you look at the word transient, that's not become a dirty word. i don't think anyone's willing to step forward with regards to timing. it is too hard to predict. there are too many things that literally you cannot foresee what is happening in the world. but we do think that some of what we are seeing in the supply chain is starting to subside. we think we will have a bad number by all measurements tomorrow, but if it's somewhere close to the 8% number, especially the month over month number gets down to more of a .3 number, we think that will be in line with estimates. that will show it's not significantly subsiding but it's not expanding. the market might take that as a positive. that the fed is not going to push on the break to hard. that's really the biggest concern right now. we are not releasing anything indicating a significant -- really seeing
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anything indicating a significant recession. it is unlikely to go significantly converted. earnings are so positive. we are going to see highs in single digits for earnings. the labor employment picture is very strong. there's nothing that would indicate recessionary activity. you're only big risk as the fed. as long as it looks like it is subsiding or stabilizing, we have a better chance that they don't overreact in the market. >> you still see energy as one of the market leaders going into the rest of this year. how much further outside as they're given the murky outlook when it comes to oil? >> we think there is actually certainly a fair amount of additional outlook. it is hard to see oil staying below $100 a barrel for any foreseeable time. certainly in the near future. it's just too hard to bring production back online. right now it looks like we will bring about 800 -- about it
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hundred thousand barrels of new production online this year. about the same forecast for next year. they are having too much trouble getting piping. unlike what many people think, you don't just turn the spigot on and off. it's going to come back and improve but it is going to be slow. it is unlikely to keep up with increasing demand at this point in time. we think that is a great place to hide out right now. especially a lot of those individual names have tremendous dividend flow. a flat to gently rising market picking up 5%, 6% in dividends is a nice evening -- a nice safety net. >> is it a preference when you take a look at the basis of sheer evaluations? >> well, there's a lot of opportunities. those look attractive. a lot of areas are going to continue to look attractive to us. any of those areas that are going to have strong cash flow,
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that are not going to be in a position where there is high capital-intensive to new lending. where we have strong dividend flow, are all going to be areas we find attractive. we think we will have a flat to gently rising environment. >> dan genter, great to have you with us. you can get around above the stories in today's edition of "daybreak." you can customize your settings to get news on the assets that matter to you. ♪ this is bloomberg. ♪
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♪ >> taking a look at the day ahead for australia and new zealand -- australia's leaders' debate will
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happen tonight ahead of the federal election. consumer confidence -- the consumer confidence report is set to release in the next hour. the government will bring forward its full border reopening from october to july 31. >> here's a quick check of the latest business/headlines. apollo global management is set to be in talks for elon musk's proposed buyout for twitter. it will include other partners and firms. twitter shares closed lower on tuesday on doubts that musk complete the purchase. sony says it will buy back as much as $1.5 billion worth of its own shares after reporting earnings that missed analyst estimates. they reported an operating process of $1 billion in the fourth quarter. they are facing fresh
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challenges, as supply chain disruptions risk hampering production of the playstation5. nintendo, struggling to re-modernize the switch consul amid a global ship shortage. below analyst estimates after reporting a .6% rise in profits for the march quarter. it is expected to sell 21 million switch devices this year, shy of the 21.7 million anticipated. the chinese carmaker, disappointed with its forecast after posting a net loss of $1.6 million. . they expect sales of about $920 million in the current quarter. well below average analysts estimates. li auto blame surging material costs for squeezing margins.
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>> let's take a look at u.s. futures. they are shaping up at the moment after relatively a composition overnight. the s&p 500. , and doing well off the session highs. futures for the s&p, modestly lower. by up 10th of one percent -- by a 10th of one percent. the nasdaq 100, down about .1%. the down about the same effect. -- the dow, about the same effect. investors, trying to make sense of a lot of comments. the key cpi data is due on wednesday. we didn't have u.s. stocks bouncing back after a selloff that he raised just about $9 trillion from the u.s. equity market this year. asian stocks are looking for a calmer start to the session as well. >> still ahead -- attention turning to data due later on wednesday. we will discuss the outlook,
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next. this is bloomberg. ♪ xfinity mobile runs on america's most reliable 5g network, but for up to half the price of verizon so you have more money for more stuff. this phone? fewer groceries. this phone? more groceries! this phone? fewer concert tickets. this phone? more concert tickets. and not just for my shows. switch to xfinity mobile for half the price of verizon. new and existing customers get amazing value with our everyday pricing. switch today.
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♪ >> some of the roots of the inflation are outside of our control, to state the obvious. but there are things we can do and address. that we need to do. that starts with the federal reserve. which plays a primary role in fighting inflation in our country. i put forward a highly qualified nominee to lead that institution. i strongly urge the senate to confirm them without delay. >> president biden, speaking ahead of an expected senate vote on the fed nomination, as well as the key u.s. epa print on
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wednesday. the cleveland fed president has opened a debate against for bigger rate hikes at the fed. she supports have percentish point hikes for now but would also back a 75 point hike later if inflation doesn't ease by the first half of this year. >> we don't want 75 forever. what i'm going to do is i think 50, the pace we are going now, seems about right to me. we are going to have to assess whether inflation is actually moving down. then we will be able to get more information after we do a couple of those. both supply and demand are going to be moving over time. the aim is, we need to use our tools to do what we can to get demand in better alignment with that constraints apply -- constrained supply. i don't want to rule anything out, when we get to that point, in the second half of the year, we might have to speed up, but if we see demand and
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inflation moving down more than we might be predicting, then we can adjust at that point. i do think that we need to be very committed to being resolute, in doing what we can with our tools to get inflation down, that is both the balance sheet, starting in june, and also with the policy rate. >> your colleague said today he expects unemployment to rise because that is what you do when you raise interest rates. are you on board with that? would you warn people, unemployment is going to rise, the economy is going to slow because we need to do that? >> look, we have excess demand in both product markets and labor markets. we can raise interest rates -- more policy rate and slows the demand. there are going to be bumps. the unemployment rate may have to rise. we may get another quarter or two of negative growth. but that has to happen in order to get inflation down. so we are tightening financial conditions. we've got to continue doing
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that, until we see inflation moving back down to our 2% goal. >> you get two quarters of negative growth. that is the r word officials don't like to use. >> i guess that is a rule of thumb. but it really is going to be, how much is demand slowing? if you look at what happened in the first quarter, there was a negative read on gdp. if you look at the consumer spending side of that report and the business side of that report, those were quite strong. there's a lot of demand momentum in that report. government spending went down. trade was a big negative for growth in the first quarter. also the inventory, which surged in the fourth quarter, there's still a high level of inventory, just not as high as in the fourth quarter. it is good to look under the hood of those reports. we may see some of that happening over time. again, our goal is to bring inflation under control and have it start moving down towards 2%. and sustain a healthy labor
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market. i don't see this as a trade-off right now. in order to make sure that labor markets are sustainably healthy, and that we can sustain getting to maximum employment, we need to get inflation under control. >> if you get inflation down, down to where is acceptable? then what happens? have we changed inflation dynamics in the inflation regime? >> we are aiming for the goal of 2%. if the question is, will it take some time to get down to that level? yes. we know inflation can be persistent. and we have to apply constraints, even though everyone hoped they would be easing, are not easing. there's upward risk to inflation. it will take some time. i don't expect we will get inflation down to 2% this year or even by the end of next year. what we need to see those monthly numbers moving down, in a convincing way. i would have to say compelling
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evidence that is happening before i move to say that we can ease up on what we are doing with policy. >> the cleveland fed president, speaking exclusively with bloomberg's mike mckee. our next guest says the u.s. is nearing a peak that will eventually subside slowly. with us is teresa kong. portfolio manager at matthews asia. always great to have you with us. particularly after such a lot of fed speak and inflation data -- and ahead of inflation data. this chart looks at how monumental the spike is compared to the previous decade. historically, we see these trends when it comes to inflation. in the u.s., nearly 9% above the last year -- above the last decade's trend. if we expect we are nearing some kind of peak, what would the fed need to see from that to be able to change the trajectory? given that you say they have already been reactive rather
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than preemptive in policymaking? >> that is the 10,000 dollar question. when i see this chart now, with inflation running so high, above the decade-long trend, i think the fed really needs to be on top of inflation, by raising rates much more aggressively. 50, 50, 50 over the next three meetings, i would not be surprised if they step up to 75 basis points at one of these meetings. if we don't see a material fall and inflation over the next few months. we do expect it to come down from 8.5. but is it going to come down materially enough to stem the current fed path? ? i don't think so. >> what is key is communication from the central banks. it is not an enviable task. given how difficult the indicators and outlook really
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is. we do have a question in the blog poll survey we are asking, as inflation crises bite across the globe, which central banks do you think in your opinion have been best communicating their outlook policy guidance? or has it all been pretty poor? >> i think most central banks have done too much in terms of providing for guidance. there's not a thing that i know that anywhere in the world that has tipping asset prices as part of their mandate. over and over again, we see the central banks potentially not doing as much as they want to or need to. because i don't want to see the asset prices come down substantially. we don't want a repeat of the paper tantrum. in central banks across the world, there are usually two mandates, the dual mandate of maintaining price stability, as
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well as low unemployment, and inflation targeting. with all of that said, i do think some of the central banks have done better than others. i would not give the fed at this point a very high-grade. >> how is the pboc doing? >> well, i think the pboc has a very different problem. china is probably the only major economy that will be seeing interest rates go down because they need to continue to step on the gas pedal to make sure they can hit the 5% goal they set for this year. i think overall, they are really between a rock and a hard place right now. i think xi jinping has cornered himself somewhat. te a -- he's taken quite a dogmatic approach to the zero covid strategy, hampering the ability of the central bank on the micro side.
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you can listen all you want. if people can't by the cars in the homes, there is not much you can do -- buy the cars and the homes, there's not much you can do. >> when it comes to the property sector, which continues to struggle, how would that guide your call in the entirety of asian credit at this point? >> yeah, so, just stepping back, looking at where asian credit is, it is a really tough time, both due to [indiscernible] and sentiment. we are seeing growth spreads in the u.s. buying as well. china and asia certainly is not the only current market that is struggling. having said that, we are expecting this sentiment to last for a while. that is why we are adding to
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our portfolio short term investment grade. as market sentiment returns. >> we are starting to see a sign of the pressure of high inflation, the overall economic pullback we see across some indicators. that certainly the u.s. distress that is starting to make a comeback. we see the yield start to blow up. is this just the beginning? are we seeing the russia supply returning to this corner of the market? >> there's going to be much more supply coming on. if you look at the european high-yield market, it's been shipped down the last few weeks. until i think the market route subsides, it will continue to struggle. with that said, the long end has behaved relatively well. the tenure has not substantially risen above 3%. so that is i think the risk. i do actually see more potential
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for u.s. rates as well as u.s. credit spreads to widen from here. >> teresa kong. portfolio manager at matthews asia. always good to see you. thank you. it is now time for morning calls. hsbc on alert for more market turmoil. multiple indicators point to a growth scare in the next 3-6 months. the past few weeks -- adding performance in the past few weeks has been brutal. goldman sachs, more optimistic. our chief global equity strategist, telling bloomberg the stocks are starting to look attractive. >> equities are starting to look attractive for medium to longer term buys.
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we have seen a huge absorption of a lot of worrying for investors now. the question is, where do we go from here? >> coming up next -- one of the biggest calls on china was never meant to happen. we get the details, ahead. this is bloomberg. ♪
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♪ >> this is "bloomberg daybreak: australia." treasury secretary janet yellen says the u.s. economy will suffer if the supreme court cuts access to abortion. she says eliminating the right to access abortion services would set women back by decades. >> i believe that eliminating the right of women to make decisions about women, whether to have children, what have very damaging effects on the economy and would set women back decades. >> elon musk says he would reverse former president donald trump's permanent banned from twitter once he takes control of the company. he told the conference twitter was extreme for kicking trump off the site and the ban
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undermine trust -- undermines trust in the social network. he said he has lining up funding to complete the $44 billion takeover. >> he has stated he will not be coming back to twitter. and that he will only be on another platform. the point that i'm trying to make, which is perhaps not getting across, is that banning him from twitter doesn't end his voice, it will amplify it among the rate. and that is why it is morally wrong and flat out stupid. >> u.s. lawmakers are pressing jp morgan and goldman sachs for information on trading russian debt. representatives sent letters to the ceos demanding lists of clients betting on russian government and corporate debt since the war broke out in february. they want to know if the bank's dealings could benefit vladimir putin. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries.
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i'm vonnie quinn. this is bloomberg. ♪ >> remember, jp morgan's description of chinese internet companies as uninvestable made ripples through the market. bloomberg has learned that this was actually published by mistake. for more, let's bring in our bloomberg u.s. finance leader, tell us a little bit of what happened here. this was a big call from j.p. morgan. we watched this closely. >> this is a case of the power of the written word here. this all began on march 14, 20 j.p. morgan analyst from his team labeled the chinese internet sector as uninvestable. they downgraded the number of companies -- a number of companies like alibaba and others. this triggered huge consequences, about 200 billion dollars were erased from the markets. jp morgan lost its lead on the position because of this.
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really what it signals is how complicated it can be, to navigate this sort of path, when banks want to make down because in their investment banking clients. as it turns out, the word uninvestable was never supposed to be in those reports. editors have gone through the 20 reports. they eliminated the word from their system. they replaced the word with unattractive. but the rest is history. >> it is really interesting that jp morgan in that segment said, you know, essentially that the half of the research, they stand by a few terms, but it interchangeably doesn't change that. >> that's right. jp morgan for a has huge ambitions to grow there. toward the end of last year, it had about $20 billion in exposure. it's just won approval last year as well to fully own security
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center there. the country presents an opportunity for many in the industry, blackrock, too, started to own its venture in the company, goldman sachs did similarly. it is complicated for banks that are trying to expand, navigating this very sensitive geopolitical climate. jp morgan knows this very well. that is more than others. the ceo made a quip about jp morgan outlasting the communist party, which he was forced to say he regretted. it is a very complex situation in the country. banks have to navigate this tricky path very carefully. >> we remember the strap ubs found themselves in as well back in 2019. sally bakewell there, with the latest on the story. same with china, the head of the who, with a rebuke of china's
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covid zero strategy, saying the efforts will not work, to completely eradicate the virus. stephen engle is in hong kong with the latest. what is the chief saying? we heard a similar warning from anthony fauci himself. >> i think these comments will carry more weight in china than dr. anthony fauci has to say -- than what dr. anthony fauci has to say. but what the who director general is essentially saying, first of all, it is a rare rebuke from him, because he has been widely criticized, at least early on in the pandemic, for being quite deferential to china. now he is saying essentially these lockdowns as a result of the zero covid policy are futile. let's hear from him. >> when you talk about the zero
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covid strategy, we don't think that it is a sustainable, considering the behavior of the virus now and what we anticipate in the future. transferring to another strategy would be very important. >> obviously much has been made on the economic toll of these lockdowns. we are seeing the latest high frequency showing more examples of the lockdowns, at least according to bloomberg economic estimates, now affecting about 44% of the provinces. 11 provinces, down from 14 provinces, affecting about 44% of gdp. home sales in 50 major cities in china, down more than 50% against year ago levels. . the sixth week in a row we have seen that. subway travel, declining 22% from the prior week. there is economic damage. but as well, michael ryan, the who health emergency program
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director, in addition to the chief's comments, michael said that those measures to combat covid should take individual and human rights into consideration. we have all seen the human rights issues that have been exemplified by the lockdowns in china. back to you. >> stephen engle there with the latest. coming up -- the australian prime minister and the opposition leader, headed to their third and final leaders debate, ahead of the may 23rd vote. we will get the latest on the debate. this is bloomberg. ♪
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♪ >> the australian prime minister and the opposition leader will face off in a third and final leaders' debate, 10 days out from the election. the australian government reporter joins us, he's been traveling with the campaign. he's about to hop over to the campaign. what's the current state of the elections? >> at the moment, clearly things are favoring the labor side of the equation. basically polls are widening to give labor a bigger lead than they had at the start of the election campaign. with scott morrison gaining trail further. that's come after the interest rate rises that were announced last week.
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the first in a decade. which come on top of already rising costs of living, which is the main issue in this election. >> there is new polling that shows the treasury could lose its seat, what do we know -- treasurer could lose his seat, what we know? >> they are facing concerted efforts against them from pro-climate action independents. there's a lot of polling that shows he could be very much in trouble in his seat. if he loses it, it would be a huge shock. he is the leader of the liberal party after the election if scott morrison loses. the potential future prime minister. >> the pm back to comment very recently about a prominent anti-transgender candidate this week, what did he say? >> he said he thought many australians were worried about
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german confirmation surgery for adolescents. it was pointed out to him that the surgery is only legal for people over the age of 18 in australia. a candidate heard the comments and said those comments about compromise and are not relevant to australia. for the liberal parties, this is a sort of call out to suburban voters who might usually go with labor but might feel uncomfortable about transgender action. anyway, we will see on election day, what we? >> you will keep us updated. ben wescott, australian reporter there. hear why wells fargo is leaning toward the defensive side of fixed income. plus -- we will discuss further potential downsides for the yuan, depending on how covid
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zero plays out in china. that is it for "daybreak: australia." "daybreak: asia" is next. this is bloomberg. ♪
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haidi: a very good morning. we are counting down to asia's major market open. shery: welcome to daybreak asia. our top stories, asia could see a calmer start of trading after a rebound for u.s. equities. investors awaiting the latest chinese and u.s. inflation numbers. cleveland fed president loretta mester tells us she backs half-point rate hikes but larger moves cou


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