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tv   Bloomberg Daybreak Australia  Bloomberg  June 28, 2022 6:00pm-7:00pm EDT

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yvonne: good morning and welcome to "daybreak: australia." i am yvonne man in hong kong. annabelle: i am annabelle droulers. we are counting down to asia's market opens. shery: good evening. from bloomberg's world headquarters in new york, i am shery ahn. the top stories this hour -- the report shows that americans are more pessimistic about the economy. yvonne: beijing makes the biggest shift yet in its covid zero policy. shery: and the bloomberg's group, goldman sachs expects glasses at its consumer unit to jump to more than $1.2 billion, missing the bank's on breakeven targets. we are seeing u.s. futures muted after the s&p 500 lost ground for a second session. quite a rare sight to see the s&p 500 seeing a 3% reversal.
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the 11th time since 1990, gaining 1% and then ending down 2%. of course we had optimism about china cutting its quarantine period. banks boosting dividends. the bank index is outperforming. but that was not enough. tech weighed heavily on the index. yields were down after some weak data. we had oil gaining ground, though, a different story because supplies are very tight. you are seeing supply outages in libya, ecuador, not to mention the g7 capping the price for russian oil. it was the weaker than expected data. look at the chart on bloomberg showing how consumer confidence change to a 16-month low, despite home growth decelerating for the first time since 2021. the surge in inflation pressures is having a huge impact on how people think in households.
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even cathie wood acknowledging that she got inflation duration long. annabelle: and there is still a lot of data to come. we have gdp, personal and construction spending and manufacturing sentiment coming. the region is in a wait and see mode. the ozzie and japanese yen are unchanged. equity futures went into the downside here as well. australia, a couple of factors that could change the tone, we have the approach at the end of the financial year, a period when financial managers rebalance their portfolios. and new zealand is coming on to the downside. china is one of the big unknowns. it could continue to give a boost to commodity prices and that could be supported for energy sectors around the region. but there is in addition to that , the bets of further easing in the second half in china and that also gives us the risk of a rebound could bring further
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inflationary pressures into the economy as well. please so you have more signs of boosting in policy and we have the lion yesterday that they are cutting down quarantine times by half, to seven days, pretty much in line with how hong kong is feeling right now. maybe a baby step away from covid zero, but it is a huge boost to the confidence. we saw the boost yesterday when the markets were closed. we saw the renminbi strength. obviously it did not last very long during the u.s. session, the you. shery:. shery: know the first thing when i thought when i got there china news, i was thinking, perhaps they can see you in hong kong. good news for those who want to get back to the city. but you said it, with the easing of quarantine measures, does that mean that perhaps the inflation pressures globally could subside a bit? already we have seen the wall street inflation bets coming down from record highs. perhaps to do with inflation fears creeping back in.
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bond investors are cutting inflation hedges at the fastest pace since 2013. really not surprising. the commodity supercycle is easing a bit. the bloomberg commodity spot index trembling to the lowest since march. and really what is happening with big tech is weighing heavily on u.s. stocks. we also heard from two top fed officials continue to play down the risks that rate hikes will eventually push the u.s. into recession. let's get more now with bloomberg's cross asset editor a gene editor andrea: book and global economics and policy editor kathleen hays. were surprising. we have not seen such a reversal in quite a while for the essence 500. andreea: that's right. there are a lot of things going on. we have seen the inflation hedge is, the inflation bets come down
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in the bond market. to some extent, probably not surprising. you have had commodity prices come off quite a bit. but on the flipside, you have u.s. consumers really concerned about the outlook for the economy. they have trimmed back spending on big-ticket items during the pandemic. and they are really concerned about what is coming up, which is why you saw that her on wall street last night. and perhaps we are going to see a softer open here in asia. we also have to bear in mind, we are going into an earnings season where a lot depends on what companies will say in terms of how they are tackling costs. inflation pressures, but also a very timid consumer. there is a lot for investors to digest. and of course the question about whether inflation has peaked -- the market has not got it right before, so who knows, but it is
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something that markets are looking at. what is certain is that you will see a lot of volatility because of all of these competing factors. yvonne: and when you have consumer confidence at decade lows, it is interesting that your hearing the fed trying to turn around the narrative that may be the fed can avoid a recession. kathleen: they have said that all along. but today we had two top fed officials, starting with mary daly, president of the reserve bank of san francisco who was asked this question, can you fight inflation and raise rates without causing inflation? i heard her metaphor -- ics, napping on the brakes were then slamming the brakes going over the handlebars and having a -- i see us tapping on the brakes rather than slamming the brakes. take a listen.
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>> it will not pivot into negative territory. kathleen: moving onto john williams, president of the new york fed interviewed on cnbc, who sees another 50 to 75 basis point rate hike at the next meeting. he said unemployment will rise as the fed hikes rates. but look at what he said -- but this is not a recession. he says, this is a slowdown that we need to see in the economy to reduce inflationary pressures that we have and bring inflation down. the soft landing. we can pull it off, that is his view. moving onto christine lagarde, ecb president. she made a very explicit commented that they are cutting the old bond purchase program on friday. this is targeted specifically at preventing turmoil in the various bond markets in europe as the ecb starts getting to its first rate hikes and worries about that happening.
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so a lot of optimism here. can they pull it off? markets are waiting to see. yvonne: yes, a lot of talk. we will hear more from the ecb and the fed alike. andrea papuc on the markets. stay with electro--- stay with bloomberg for more coverage. you can catch more coverage live on wednesday at 9:00 p.m. hong kong time, 9:00 a.m. if your journey from new york. let's get to vonnie quinn with you first word news. vonnie: china has reduced quarantine times by have in the biggest change yet to its covid policy. travelers will now only need to spend seven days in quarantine last three days of self-monitoring at home, down from 14 days in many parts of
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the country and as many as 21 in the past. officials say the move does not signal a loosening of odyssey. hong kong's incoming government is considering using the city's current evils. five days in a hotel followed by two days at home isolation. we are told a final decision is yet to be made. hong kong's incoming chief executive will be sworn in on friday. a former white house aide has offered a vivid portrait of donald trump's behavior during the january 6 capitol riots. cassidy hatch says trump knew some of his supporters were armed when he told them too much of the building. she also said she was told trump trade to take the wheel of the presidential limousine and, lunged at a secret service agent when he was not allowed to travel to the capitol during the attack. british socialite ghislaine maxwell has been sentenced to 20 years imprisonment for sex trafficking and other charges related to helping jeffrey epstein sexually abuse under
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aged girls and sometimes participating. prosecutors depicted maxell as indispensable to epstein's crimes. a jury found her guilty in december of five counts including sex trafficking. eckstein killed himself while awaiting trial -- epstein killed himself while awaiting trial. but when sarah -- -- goldman sachs say losses may grow. the figure is greater than the roughly $1 million goldman had estimated for 2020, which it said would be the low point for the market. 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. shery. shery: coming up next, wells fargo securities sees a mild recession for the u.s. in may 23 is the base case. hear how that is reshaping their investment strategy, next.
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this is bloomberg. ♪
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>> i think shallow. i think the duration is still very much in question. i say shallow because, you don't have a de-leveraging cycle on top of a recession. that is very different from how
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we entered the financial crisis. yvonne: morgan stanley's chief u.s. economist there. that's in anna han, equity strategist at wells fargo securities, to talk about the massive selloff in the u.s. session. . seems like recession talks are getting louder. the likes of value stocks, reversing when it comes to industrial commodities, the supercycle fainting. are we nearing the end of this information trade? anna: i would not say goodbye forever, but i think we are starting to rank out the cyclicality in our portfolios. we really pushed to the reopening trade. but when we expect to have our base case as a recession, next year, that changes how we approach our portfolio positioning, and cyclicality is not our favorite anymore. yvonne: estimates are too bullish at the moment. we have net margin estimates at
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a record high. are they still to optimistic or do we need further adjustment? anna: the half met inflation expectations as to continue to increase, i think they are high. i was surprised to see quarter over quarter, margin growth for large-cap companies last quarter. we expect that to come under further pressure given the scenario with supply chains continuing, also wage inflation and other aspects domestically and internationally. margin growth needs to come down. shery: despite the fact that we are worried about recession which would hit financials, we have seen them coming out with dividends, clearly passing the stress tests. even morgan stanley announcing a buyback. can you find some leeway there? anna: you are right, this cyclical factor especially with banks, but this is not the great financial crisis.
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banks and balance sheets are still strong and the consumer still has a line of credit still available to them to continue and help to support their spending, which could actually be a continued inflationary pressure. we are not particularly negative on banks or financials. but in general, i think the cyclicality exposure from portfolios should start peaking and replace it with his that will have good growth. at least corporate earnings growth for the next year or two at. shery: a reasonable price. shery: that's the think. you are still saying to remove bonds. we have not seen the bargain-hunting we saw for the past year or so? anna: right. when we think about bottom fishing, we are thinking about companies that have had very poor price performance or price returns in the last 12 months or so. if you recall after the pandemic when we were getting the recovery, people were dumpster diving. we were looking for the worst
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names. but in this scenario, going into what could be a mild recession, it is too soon to be looking at that bottom fishing. we think stories could remain broken, particularly when you see credit spreads widening and monetary policy tightening. that is what we want to avoid. we went to stay higher-quality but again, we are looking for strong and reliable earnings growth. yvonne: you mentioned stepping off from some of these reopening cyclical trades. i am wondering how the china factor changes that view. i am seeing a headline that they are cutting parenting times, moving gradually away from covidi zero. does that put a boost to the reopening trade as well? is it a game changer? anna: i would not label it a game changer. what i do like to hear from that site is perhaps it will help supply chains. but remember, china is in a different state that we are. in the u.s. we are aggressively
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tightening domestically, and china is in a more neutral to dovish approach right now given their economy is slowing down faster. they are reopening help supply chains. but the reopening trade here is more tired what people are going to be spending on. we still think consumers will spend on services and travel. it is other aspects of the reopening trade that we are thinking, maybe we have seen the best of it. not necessarily that it will contract completely, we still see -- we still see strong consumer beta, but that is probably the best we have had. shery: good to see you again, anna han. you can get a roundup of all the stories you need to know to get your day going in today's edition of "daybreak." dayb is your function. this is bloomberg. ♪
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shery: there are plans to build a $5 million semiconductor facility in texas, the biggest of its kind on american soil as the tech industry battles a global shortage of chips. joining us now is the u.s. deputy secretary of commerce, tom graves. thank you very much for your time today. i know that you had a very busy day. get us started. is this just a start? what is the pipeline now that we have? guest: thank you so much for having me. this is absolutely the first step in what we see as a comeback for the u.s. semiconductor industry. we have seen commitments w by globalafers of the $5 billion plant in texas. but we are hearing of other companies that are looking at
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the u.s. as their partner of choice for rebuilding the semiconductor industry. shery: will this help the competitiveness against china? don: it is certainly going to help our competitiveness writ large. and other data and administration, we have seen huge increases in manufacturing. semiconductors is the absolute most crucial investment we could be making. so many of our products need semiconductors, our phones, appliances, our cars and the equipment that we use in our businesses. so this is the first step. we expect the entire ecosystem is looking at the u.s. as a place to build and make sure that we don't end up in a place down the road where we are in a shortage of semiconductors. shery: even if the chips act is not passed, what needs to be done by congress? don: we will get the act passed.
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the bipartisan innovation act, the conferees are working on it. the secretary and i have been speaking with the members and they are making a lot of progress. the expectation is that it will get past. and congress understands fully how important it is to get this passed as soon as possible. we heard earlier this week that intel has put a pause on its investment in ohio. that is a $20 billion commitment to rebuild american manufacturing, rebuild our semiconductor leadership. we need to get this passed so we can get more investments like the one we already heard from globalwafers and many others. shery: what will it take to get it passed? secretary raimondo said the globalwafers deal was contingent on whether the ship deal would go through. why make the announcement if it was not firm?
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don: well, there is an understanding that the u.s. is going to do what it says it is going to do. we know that congress is making the commitment to get this passed. i know that the conferees have been working out their differences, negotiating hard to get this passed,. and we expect this will get done in the next few weeks. we know that they have the recess coming up. congress fully appreciates why this needs to get done. we have to get it passed because so many more of these deals could happen and companies will only make commitments if they cs as a reliable partner. and a country that is willing to invest in double down on the semiconductor industry. yvonne: obviously these deals could apply some more pressure in terms of speed of the competition with china. wonder when it comes to the
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issue of tariffs, will you actually drop these tariffs, cut them down? what is the thinking right now? don: the president is taking a whole-of-system perspective as it relates to the tariffs. we know that the people are feeling the impact on inflation and it is why the president has asked us to look specifically at the tariffs that are having an impact on the american consumer. at the same time we have to recognize there is a reason these tariffs were put in place in the first place. the aluminum and steel dumping was occurring across the globe. so many products that our competitors were trying to undercut our businesses through unfair economic practices. so we're going to take a balanced approach. this is something that the president is spending a lot of time thinking about, and i expect in the coming weeks we
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will have a very clear response on how to deal with this. shery: do you have a deadline on when the decision needs to come? don: the president recognizes the pain in the american people are feeling everyday so we will work as quickly as possible. but again, we have to recognize the global economy. there are many aspects involved here. we are working with our partners closely across the globe to make sure that we are not just doing this unilaterally, that we are working with partners in europe and asia so that we can present the type of coercive economic purposes we have seen from some countries. yvonne: i want to switch gears and talk more about russia, where you have been the driving force in the section's efforts. the screws are still very tight. what more can the u.s. do in terms of the exports controlled front? don: good thing for us as we have taken a long-term perspective on expert controls.
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we know that unlike the sanctions, the great sanctions work that the treasury department has done, the export controls work takes a little bit of time to have an impact. salute will continue to work in the multilateral fashion with our partners around the globe. 30 six different nations have joined us in opposing these export controls and that is having a meaningful impact on russia right now. we know they are not having access on the equipment they need to re-store their military salute just keep the pressure on . yvonne: don graves, thank you so much. u.s. deputy, secretary. plenty more to come on "daybreak: australia." this is bloomberg. ♪ this is xfinity rewards. our way of showing our appreciation. with rewards of all shapes and sizes.
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shery: bloomberg has learned that goldman sachs is seeing losses at its consumer unit et cetera it this year to more than 1.2 billion dollars. for more, wall street reporter is here. i remember a couple of years ago there was so much hype about goldman's novelty mainstream business. what happened? reporter: there was a reason for the hype. goldman sachs is known to be dealing with high finance, the big corporations. the big institutions. it was willing to market to the masses and it was chasing a new revenue stream. it was always going to be a challenge, but goldman thought it could be a disruptor in the space. however, in a new business line like this that has to do with consumer banking, it can be a tough exercise and the first few years will be challenging. goldman did say that by 2022 it was hoping to break even in the business. it is unfortunately not panning
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out that way, and it looks like the bottom of their losses right now is still in that phase and the inflection point and turn towards probability is eluding them. they are hoping they will get to it, but it has been pushed out for now. yvonne: why do you think goldman is so sad thats growth is critical? sri: it goes back to why they got there in the first place. this is the number one trading house and banking house, it is seen as the best in class in the investment banking world. however they also realized that investments and analysts like a company that can diversify its revenue stream, that can have predictable earnings, and they have seen morgan stanley win over investors with acquisitions of e*trade and others that have balanced out their investment bank with already existing wealth management operations. so they want to go down that path. they hope that if they have a
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successful customer business, a growing wealth business, an incredible asset managing business, it will give them the multiple that they so desire right now and that they are not getting in the stock market. shery: so is this just growing pains, or is goldman not doing something properly, especially when competing against arch rivals like morgan stanley? sridhar: if you were to ask them, they would not look at these figures as glasses, they would see them as an investment that you have to make it a business. but when you pour into so much money into a business, it is not a guaranteed success. you have to make sure you are focused on financial discipline and you do all the right things, because as the dean of wall street analysts point out, this is the kind of business where you could get a new revenue stream, or get your head handed to you. yvonne: our wall street reporter, sridhar natarajan. the blackrock's vice chairman
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says we have reached peak inflation, but the cost of bringing it down will still be high. he told us exclusively that price pressures are mainly supply-site driven and they put policymakers in a tough space. guest: central banker's say it is a very difficult position. they crushed interest rates very much in order to bring the inflation rate near 2%, or they can accept the cost is too high. the good news is i believe we have reached peak inflation. inflation will start to come down as financial conditions tightening and as central banks normalize rates, but we will not get to 2% without significant damage to the real economy. >> that reminds me of what one analyst at deutsche bank said recently, that central banks usually stop cutting with
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the trend is lower. if we have reached the peak in inflation, does that mean a cutting cycle might be sooner in the cards than perhaps markets are expecting? guest: i think we are away from that. the question would you rather at some point they papered to tolerating higher inflation for some time. for many decades we have lived in what ben bernanke coined "the broader moderation," where if you brought inflation down, everything else would normalize as well. the cause of bringing inflation down to 2% is very high. that will become more apparent, at which point we'll start to see central banks facing the difficult choice. >> is it 5% like larry summers says? guest: i think it will be a deep recession territory if you want to get inflation back down to the price stability definition have seen in the last decades, around 2%.
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the cost of that will prove to be extremely, extremely high. that is the new world that we live in. this is a very new era where you cannot just get everything right if you stabilize inflation. there was a term in economics called "divine coincidence," where if you stabilize inflation, everything would work out just fine. we don't live in that world anymore. this inflation riggio is driven largely by the supply-side, by the production side of the economy. yvonne: the blackrock vice chairman philipp hildebrand, speaking exclusively with dani burger. we are watching whether this peak in inflation trade has reached the end. it comes down to china. you heard in the nike earnings yesterday when they mentioned the china market is still being quite cautious despite a decent report, and the market seemed to have reacted in a negative way.
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once again, china is the big focus on whether the reopening story has a bit more legs. shery: especially now with the reduction of the travel quarantine by half, 10 days instead of three weeks. we might see a rebound. we have seen the basket of reopening trades rarely in the previous session, but as you said, for how long? especially given that that seemed to fade in the u.s. ours. that did not last. perhaps also an issue being the fact that so far, despite the very optimistic signs that there would be an easing of covidi zero, it has been a start-stop reopening for china, and for the city of hong kong. yvonne: wright, the biggest drag is still the services side. if we can see any recovery, it is still a big? . let's bring in annabel to talk about what the market reaction has been and what analysts are saying. still more upside when it comes to chinese stocks?
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annabelle: we have it here visualized. there we saw in the previous session, tracking 13 stocks that are sensitive to any changes in travel rules. we saw that bounce. they will be a bigger boost for the equity markets then we see in stocks and bonds. morgan stanley saying that the changes will help boost investor sentiment moving forward, because growth will be seen as a priority here. jp morgan another one speaking about this, saying that markets are not appreciating the fact that we could see further easing in the second half because there is that perception out there that china is static in the way that it manages its covidi zero policy. we also have to move in turnovers, you can see that we are above the $1 trillion range for most of this month, and other supportive factor for equity stocks moving forward. fx is another factor, is this a game changer? we have seen the yuan trading in
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the 65, 680 range. hsbc saying perhaps we will not see the yuan breaking out of that. that even with these changes, we may not see more tourists coming into the country. they still have the quarantine period in the hotel and that at home. compare that to the rest of the world, where it is much more relaxed. the other factor is that chinese companies are approaching the dividend. -payment season. that could also boost demand for the u.s. dollar. shery: and the other question is what happens with china's growth forecast. they have the 5.5% target for this year. we have seen the forecasts being revised. how much will this help when, as you said, it is still pretty onerous when it comes to those restrictions? annabelle: yes, we are studying to see it pivot back in other directions. what we have from morgan stanley is that it is a small step for
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the covid exit, but a giant leap for confidence in the country as well. so the more positive turn here. add to that the fiscal stimulus we are expecting. so they are saying it 5% range of gdp, up from 3%. it is similar to the stimulus we saw in 2020. those two factors combined should help to secure a rebound in the second half. so morgan stanley did see growth of 5% in the year. they revised that up to 2% on the year in the third quarter and by the final months of 4.7%. yvonne: we will see. yvonne: if we have another second day of the reopening trade. casino stocks all surged on the back of that news. coming up next, a recent poll shows only 12% of australians trust the chinese government. more on that survey and what it means for relations with
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beijing. just ahead. this is bloomberg. ♪ so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create
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vonnie: you are watching "daybreak: australia." i am vonnie quinn. finland and sweden are closer to joining nato after turkey dropped its opposition to their bids. membership for the two
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previously neutral countries will still take many months, but it marks a big shift in europe's security landscape. nato sai said it sent a clear message to russia's vladimir putin. new york fed president john williams and san francisco's mary daly both insisted that a soft landing is still possible, despite efforts to fight the hardest inflation in more than 40 years. the fed raised rates earlier this month by 75 basis points, and could consider a similar hike next month. south korean consumers turned pessimistic for the first time in more than a year as inflation and higher rates take a toll. the consumer sentiment index dropped below 100, indicating domestic abuse outnumbering optimistic ones. south korea is the most vulnerable to inflation pressures as it relies heavily on imports for energy and other commodities. a texas judge temporarily sided with abortion rights activist
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who challenged a law from the 1920's betting the procedure. the rule allows abortions up to six weeks of pregnancy to resume and to the hearing on july 12, the third such court order preventing states from immediately implementing laws that criminalize or sharply restrict abortion access. this, of course, after the supreme court overturned roe v. wade. 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. yvonne. yvonne: australian prime minister warned the chinese government to learn the lessons of what he calls "russia's strategic failure in ukraine." in an interview with the australian financial review, he said the invasion in ukraine has brought democratic nations together whether they were members of nato or nonmembers, such as australia. interestingly, just one in 10 australians have faith in the
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chinese government to act responsibly on international affairs, according to a new survey. that is sharply down from the previous survey. with us now is the director of the public opinion and foreign policy program at this institute. always great to have you. we see these surveys all the time, we talk about how confidence among australians seems to be quite low when it comes to china. what struck you as something that was new that came out of this survey? guest: thanks so much for having me. great to see you both. what is really fascinating this year is that with the low-level's of trust and low-level confidence, as you say, this has been under negative trajectory for the past four years. what is different this year is the military element. australians are clearly responding to china's increased military ambitions. 70% say that china will pose a military threat to australia in the next 20 years.
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when you think about it australians place in the world and geographical position, and the fact china has ambitions much closer to home, that is a remarkable finding. yvonne: the lines from the new prime minister, talking about how there are lessons learned here from the work in ukraine, what do you think china has learned from what is one in ukraine right now? natasha: there are good lessons to learn and possibly some bad ones as well. clearly, the invasion in ukraine is demonstrating the limits of an untested army and the idea that you might be able to finish a conflict quickly. if china is looking at russia and wondering what to apply at taiwan, you hope they would be rethinking their assumptions, rethinking how quickly and how successful an invasion could to be. they also have to look at international reaction, the nato summit, the discussion of democracies being united. if you look at our poll
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findings, you can see that the russia invasion of ukraine has made the possibility of war in this region much more real for australians. the majority of australians are worried about a war over taiwan, concerned about china's foreign policy, and for the first time, the majority of australians would support the australian defense force going to taiwan. shery: how is this geopolitical environment affecting the views of australians when it comes to the u.s., took foreign policy by the biden administration as well? natasha: it is a really interesting dynamic. australians are feeling very scared and very worried about what is happening in the region. only half the country currently feels safe. in this time of insecurity, they are looking to the united states. we have seen record levels of
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support for australians alliance with the u.s. three quarters of australians believe the united states would defend australia if we were under attack. but it is not without caveat, australians have less confidence in president biden than they did a year ago. 70% of them worried that the alliance would drag us into a war in asia that is against our interests. so you can see australians trying to navigate this fear of china and fear of russia, but at the same time, wanting to deserve the peace and security we have and not wanting to be dragged into another forever war. shery: what does it mean when looking at different alliances like the au or the cord? natasha: we are having a mixedkus, you can see that when it comes to australia's position, majority of australians want to increased defense spending. seven in 10 12 acquire the
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nuclear submarines that are slated to arrive under the aukus program. but regional partnerships, it is mixed. 50% of australians say that aukus will make the region safer. similarly, half of the country think the cord will make us safer. it is not that people think it will do harm. but they are unsure exactly what impacts these relationships are going to have. having said that, australians feel very warmly and trusting towards other partners like the u.k., like japan. those relationships i think will only strengthen as australia tries to find its way. yvonne: there was a lot of hope that when the new prime minister stepped in, that this would be a reset when it comes to relations between australia and china. his foreign minister spent a lot of time in the pacific islands the moment she stepped into her role. what do you think it will take for diplomatic tensions to t
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haw at this point? natasha: it is hard to imagine a reset. it is characterized by military concerns, economic concerns, all these issues laying on the minds in canberra and also the broader australian public. add to that the concern in the australian public about china's ambitions in the pacific. 88% said they would be concerned if there was a chinese military base in the vicinity. so it is unlikely that there will be a reset in the relationship, but we do seem to be seeing some stability, or finding a settling point where australia and china at least have an official dialogue. neither of their positions have actually shifted, but they are communicating. that is progress compared to the last three years. shery: sort of resetting to the
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new normal of relations not being that great, but settling down. natasha kassam, really good to have your thoughts today. be sure to tune into bloomberg radio to hear more on the day's newsmakers and analysis from the databricks team, now broadcasting live from -- and analysis from the daybreak team, now broadcasting live from our studio in hong kong. stay with us.
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>> the electric vehicle maker is closing a california facility. bloomberg correspondent ed ludlow shows -- joins us now. we had some hints that this would happen, but what do we know so far? ed: this is interesting. it is a facility in san mateo. 200 workers who were looking at autopilot and autopilot data laboring were laid off today. both hourly and salaried workers. elon musk told us last week that the carts globally would largely focus on salaried workers. i am told by sources that many of these were hourly workers, which contradicts what is on musk said. they have also check the facilities down completely in
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san mateo, without the workers who had been there, they have been moved to other facilities such as the palo alto office. yvonne: tell us why this team specifically, why scale back ai question mark ed: the team takes video footage generated from customer-owned vehicles who were using the autopilot functionality. they are data labeling, in other words, adding properties to the video to help basically train neural net's to detect the world around them using a camera-based technology. the technology has improved, but it is also in area of the workforce that drew incredibly quickly in 2021. musk and kessler talk about their focus in that area, about the importance of hiring the best talent. my understanding is this is part of a longer-term reshuffle where they grew too quickly and too fast, and now they are scaling
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back the product. yvonne: what does this mean in terms of a headcount for tesla? ed: two hundred workers in the autopilot team specifically, it is a lot. it ranges from 150 to one quarter of the team. it is definitely knows -- 1/5 to one quarter of the team. musk had said that the goal was to increase hourly workers. he said last week that the net outcome is that the headcount will be reduced by 3.5 percent, because you have salaried coming down but hourly going up. but as i said, sources told me that the layoffs today included a number of hourly workers, which contradicts the message that you learn must give us at bloomberg. yvonne: ed ludlow with the bloomberg's scoop on tesla. we will see how that affects
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markets here in asia as well. pinterest ceo ben silbermann is stepping down and handing the role to someone else. during his decade long run in the job, he saw pinterest grow past 400 30 million users with an annual revenue of more than $2.5 billion. he will move to a newly created role as executive chairman, and keep his board seat. an inflammation analyst says broadcom will remain a key supplier for apple's iphone, it pushed the chipmaker to its biggest gain on the nasdaq. he said that apple's development of its own modern ship has failed. stay with us on bloomberg tv for live coverage from the forum in mexico. we will be moderating a panel. this is bloomberg.
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