>> question morning, welcome to

daybreak australia. i am haidi stroud-watts in sydney. >> we are counting down to asia's major market opens. >> i am shery. the top stories this hour. apple sales slid for a fourth straight quarter as they shaking their smart -- the smartphone market in china is sluggish. u.s. stocks have their best session since april. plus, high hopes for positive news as australia's prime minister for his first official visit to china. it was really a risk on session in wall street today. we were looking at the vix following.

we were watching the treasury space as well. it was a little bit of a mixed picture with long-term yields extending his declines. the 10-year yield below that for a level. we have the two year yield continuing to rise slightly and really nearing 5%. we have the dollar also getting ground for the first time in three or four sessions. we have a little bit of pressure on oil prices today from the dollar and you can see right now extending we saw those gains in wti in the new york session, extending those gains from the risk on session and really investors trying to digest a date that we are headed toward that jobs report on friday. we are also watching weekly jobless cap claims rising. another factor that might help the fed is u.s. labor productivity numbers really getting the most in three years. that means you are producing more with less input. you are seeing better economic performance.

we are seeing the downside pressure after sales again disappointed. we are talking about the sluggish sales in china. we have seen some workplaces in china ban on iphones. that is one factor. we are also sing more competition from huawei. we have continued to see this mixed earnings season when it comes to the tech sector. we saw alphabet and meta-disappointing. apple also disappointing today. >> yes. let's get more on those results. ed ludlow joins us now. we were focused very closely on the deceleration and china. it seems like it was worse than anticipated. request the headline is the overall rate of china revenue missed estimates and fell 2% year on year. apple is saying on a constant currency basis, they actually grew in china. that is a big part of the course

so far. citing constant currency as one explanation. as you dig down further into individual segments, the iphone had a record quarter in china in the september quarter. the weakness or the drag on sales is largely attributable to mac and ipad because they are lapping supply chain constraints. also, the timing of the refresh cycle. they are super positive about china. the market reaction does not reflect that. part of that is the guidance which we could get two and a second. overall, this was the fiscal fourth-quarter that just ended. in the last year, apple says it sees itself as holding the top four smartphones in the smartphone market there. all signs say that in a market that is contracting, apple says it is getting market share.

>> tells about the product refresh you just mentioned and how much of that was actually counted toward earnings season. >> sales overall will be the same as a year ago. a part of that is taking into account that there was one week less in this quarter than there was a year ago. overall revenue won't be great. they expect the iphone to celebrate and the mac to accelerate. the weakness in airpods and ipads. a big emphasis with the chinese consumers. the of imac. that might be an accelerant

toward the end of the year. there's been a lot of explaining on apple's part. basically, overall, sales will be the same as they were a year ago. >> a mixed picture across the rest of the business run. services still be? >> apple reiterated something they saw for a few quarters now. this was a record quarter for services in basically every category. every quarter is a record at the moment. that is why would take it with a grain of salt. they have just raised prices across the services lineup. it helps investors to sleep at night knowing that the number of

apple devices all over the world b-day mac, iphone or ipad is growing. there is less emphasis. another big driver for them. >> our next guest is short and the nasdaq 100. >> how much of that is being given? >> it is a mixture. we think we had a short-term target, 5%.

we had five, we have come off and seen this very explosive sort of rally. we believe in the structural bear market in the treasury market. we are playing this game here in financial conditions where everyone wants to believe there back to the bull markets. the reality is the fed needs to keep things relatively in check. that keeps things in range. layering on top of that, i think we are in a structural bear market in the u.s. treasury market. we have problems with the fiscal deficit. the central bank is actually has

two move toward stabilizing government debt. basically deporting their boss. >> we talk a lot about the supply of u.s. debt. the consumption of u.s. debt and how the lives of japan -- they are not so interested in u.s. treasuries anymore. >> this is something we have been very focused on. we know there was an awful lot of issuance. who is going to buy this issuance? if you look at the availability pool of savings, on a net basis, you are really looking at a flat level since 2011. what has been filled with is central bank ua.

you have a flat pool of rising demand. we have japan, that is continuing to roll over demand for treasuries. china has been the big growth in terms of savings over the last few decades. they are not really interested in buying more u.s. treasuries. we are trying to shove all this debt down the throats of a pool of savers that are not really interested. you have to reprice it. chrysler also the -- there are also the geopolitical tensions. not to mention the middle east and europe. how do you hedge? request we think the fed will be

forced to step in and make some unpleasant decisions. where they have to start to support u.s. debt. at that point, the dollar starts to weaken. then some of the more traditional place, gold, emerging markets, china looks very attractive for the equity market. the problem is all the money is sitting here in these nasdaq stocks. this is why we have been trying to play with this. it is so very hard. it is much easier to sell bonds. the point is this does look to us when we are studying all the classic bubbles through history. the nasdaq right here right now looks like it did in 2000. we had a liquidity field this time with covid. it was y2k money.

expectations seem to have been managed. some say cleaner positioning as well. >> i am not an equity analyst. i am not going to try to stick this in. i think it is possible. i don't think we get above 1600. if we get above that, my thesis was wrong.

class i was good to see you. let's now go to this. >> we are looking fairly risk on. we'll keep an eye on the japanese yen. it will be quiet thinly traded. overnight, we saw friday payrolls.

what else we had less u.s. labor productivity. that advanced by the most in three years. that is helping to alleviate the recent wage growth. if it comes in week, rates could move lower. >> every piece of data being scrutinized. also critical is how we gauge implications from apple's struggle to turn around the longest revenue slowdown in 22 years. we will be getting a bit more analysis from the third bridge. first, the death toll climbing in gaza. we will get the latest on the middle east, next. this is bloomberg. ♪

>> gaza's death toll is rising as israel intensifies its battle against hamas. let's bring at jodi schneider with us in washington with the latest. antony blinken is arriving on friday. what is likely to be achieved in

these discussions with israeli officials? >> we have antony blinken and the reason clocks in the region over time since the october 7 attack. at first his message was very clear. the u.s. -- israel does need to protect. he will be making that same statement and has not wavered from that message but he will be making another one as well that there needs to be more done to protect civilians in gaza and he might be calling for a pause in the fighting to allow refugees out out of gaza. particularly americans. people with dual citizenship and more aid in. that is something president biden has said yesterday on a trip to minnesota campaign and presidential trip. he basically said he wanted to

see that pause when asked about whether he thought enough was being done to help stem this growing humanitarian crisis in the gaza strip. >> we have the house of representatives just passing is $14 billion is real emergency funding but at the same time we've heard that this bill looks like it is dead in the water. >> yes. as they are saying in the senate, it is dead on arrival. we just heard from chris van hollen, the democrat from maryland. he said there was no way we are passing this year. it has to be tied to other funding. it has to be tied to funding for ukraine as well. that is upping the white house has said. they don't like how the new house speaker has wanted to pay for this by cutting irs funding. they are saying that would cause

enforcement issues and actually lead to a higher deficit but the white house essay even without the irs paying for it, they need to see this ukraine funding as well. they don't want to do this go it alone israel approach. negotiating will start and we will see where they end up. the concern amongst senators is that this funding will take longer and that it is needed on an emergency basis in both places. something has members that did not agree to this approach, they were making that case on the house floor just in the past hour. >> jodi schneider there in washington. china is urging a humanitarian truce in gaza. beijing says the foreign minister spoke on the phone with his jordanian counterpart and condemned the israeli strike on a refugee camp in gaza earlier

this week. israel has accused hamas of using the camp as a training center. this a glass of israeli and posting people are equally important and that china supports the arabian nations appeal for a cease-fire. the foreman u.s. national security and gaza says iran is using proxy forces to destabilize our neighbors. speaking is to bloomberg, he taught us the conflict could escalate. >> a critical battleground is the battleground of perception. i think that is why it is important to keep talking about october 7 and talking about the nature of hamas. if your program palestinian, you have to be anti-hamas. i wish the government individually do a better job communicating to their own people about the nature of the problem that israel faces. i believe in the long-term interests are aligned with the

gulf states. they are aligned with israel's arab neighbors because the hand behind this is iran. iran is using these proxy forces to execute what it calls its ring of fire strategy to destroy israel. i think it is really important to look at the statements by hamas but also the statements by iranian leaders. it is clear to me that iran is using these proxy forces to create a cycle of violence in the region. here, between hamas and israel. but elsewhere in the region between various militias and sunni arab groups. they have perpetuated the cycle of violence in episodes of mass homicide in the syrian war. they perpetuated the yemeni civil war in yemen and are supporting the hoodies -- who

these. now they have everything they kind of want. with the protest in arab capitals. they want to keep the arab world perpetually week and invested in conflict so it can place proxy armies on the border of israel. they are executing this strategy it is already a regional war. i think what president biden has done to go to israel, to position additional u.s. forces there come to deter escalation but i think this is sadly a conflict that is likely not to escalate within the region. request that was h.r. mcmaster there. you can get around about the stories you need to get your day going. terminal describes go to dayb . you can customize your settings so you only get the news on the industries and the assets you care about. this is bloomberg. ♪

>> >> they missed the average analyst estimate. weakness in commodities and global markets business. it is also on the share buyback on as much as 1.3 billion u.s. dollars. they were primed for a soft result on the sydney based firm twice in recent months. modernity shares tumbled after the company said it expects revenue to fall sharply next year. to well below what analysts were expecting. they see revenue fall into about $4 billion next year with sales

resuming in 2025. as new vaccines hit the market. >> higher rates are adding pressure to the biotech industry. >> as long as the long-term rate stay higher, i think it is quit risky. request starbucks shares surged the most since may of last year after revenue jumped on resilient demand. same sales rose. demand from the u.s. and china dement -- . still ahead, already facing a slowdown in china.

apple is now warning of tepid holiday quarter sales. we are seeing apple shares after hours under pressure. this is bloomberg. ♪ you want to be able to provide your child with the tools or resources they need. with reliable internet at home, through the internet essentials program, the world opened up. fellas, fellas. that's how my son was able to find the hidden genius project. we wanted to give y'all the necessary skills to compete with the future.

kevin's now part of this next generation of young people who feel they can thrive. ♪ ♪

>> take a look at how we are seeing after hours trading when

it comes to apple at the moment. a little concerned over the extent of that deceleration in china. slug's holiday quarter is expected according to the guidance. we are seeing the downside of 2.7% at the moment. apple already facing the slowdown in china. warning we could see more weakness to come. let's get you a little bit more detail and analysis when it comes to those results out of apple. scott, you know this really was the key focus point. and perhaps that deceleration is a little bit worse than expected. do you think this is because of the broader macroenvironment? those factors are going to impact how strong rebound could potentially be. >> i think it is an important question. when we have been focusing on. the answer to what you just posed is probably all three.

you definitely have some macro headwinds that the company is dealing with in addition, it is no secret that consumer and government sentiment has not been all that positive around apple for the past couple of months. in and around the greater china region. we have heard rumblings that competition is greater now than it was over the course of the prior year. if you put all that together and look at the numbers where apple's revenue from the greater china region where essentially flat, notably i would say below expectations, i think those results kind of play into some of those concerns. >> it is interesting. when it comes to the brand appeal and loyalty you see with the apple brandon, even in a market with domestic competitors

like china, it does not tend to be this cyclical. is there a sense that the marketing, the kind of product rollout in china needs a little bit of rejuvenation for apple? why is there not excitement to the levels we are used to seeing? >> i don't know the answer that. i think apple is probably trying to figure that out. it will take some time. it is unclear whether or not this is solely external or if it is more apple specific, if there are other factors that they are needing to deal with. i do think there is one reality. i think it is that apple has come to grips with the fact that it needs to have a more diversified kind of asian strategy. that is why we have seen them emphasizing india so significantly. not only in terms of newsletter out of that today but in terms

of opening retail stores. it will be becoming more and more prominent for the company. i would argue as almost kind of an offset or even a hedge to what is in place and what will happen in and around china. >> those details had a record in india. a number of consumer companies focused on china's transition from winning demographics of china to new emerging markets like india, how long will it take? this normalization when it comes to the numbers that we get from apple -- >> i don't know if that company specified but it is a multiyear undertaking. don't get me wrong. i think the greater region has significant priority for the company but i think they are

trying to figure out what the right approach is there. when you look at what has been going on from a revenue perspective, i think there are questions. one of the hallmarks of apple over a long time is just the simplicity. if you look at the products, i think steve jobs famously showed all the products on one table. or maybe that was tim cook but the leadership of the company, to display all the products on the kitchen table. the fact that the p&l is very straightforward or the balance sheet -- balance sheet is easy to understand. it seems to be more and more complexity is coming in. i would argue this quarter is a problem. people are trying to figure out what is driving this company and its results. i think it is hard to figure out. >> part of that complexity will

be the role of ai. is there a concern that apple either isn't focusing on this enough for his not being transparent enough to shareholders about what they are actually doing? >> apple is a company has preannounced plans so to speak. they will typically put out something -- it is something i would say they have been largely silent about. the topic of ai would suggest dennis quaid have anything to talk about at this point. for some, that fact is concerning. if you look at their peers in the marketplace as you alluded to, there has been i would argue massive spending and investment and initiatives and progress being made.

when you think about companies like microsoft or meta or amazon. that kind of cohort of the biggest megacap technology companies in the world, they are all identified and talked about, investing in making progress around ai. apple has been different in that regard. i do think there are those -- there are those that believe that puts them at a disadvantage when you're talking about the progress that these and other companies are making and poised to make in the future. >> great to chat with you. we will be watching as always. the suppliers that trade here in

asia. traders are also waiting. also, the jobs report as well. let's look at those expectations for the payroll. we are talking a little bit earlier that every single data point. could this be a turning point? >> that is what we are hearing from bloomberg economics at least. they are saying they are expecting the pace of games in october for the non-nfp numbers to those who about half of september space. they are hiring at about 157,000 for october. what will be driving that and reflecting that downdraft in hiring demand for sectors like leisure and hospitality, there is also the direct and indirect impacts as well from the strike. the unemployment rate, that is what bloomberg economics is looking at even more closely. it doesn't count strikes as

unemployed. they say it is a little bit more reflective of the overall health of the market in the u.s. but also the yuan recession forecast. they are expecting that arise to 3.9%. that would be up from 3.8%. they are taking even longer to find work. >> it is a mostly hawkish decision to hold. just enough dovishness to keep pushing markets higher. this is going to be so important for fed officials. >> that is what jay powell said. they would have their dated opinions. the data will be critical and that is something j.p. morgan asset management was talking about. financial conditions might not listen because there will be the greater expectation of recession. then on the flipside you get

that strong market and then the market will watch very closely to see how the fed is going to be reacting. we have a survey out on the expectations for this. they are showing that 52 -- just over half of respondents expect the data to be risk on. only 14% expected to be risk off. >> all right with a preview of those payrolls. this is really crucial for the markets. staying with monetary policy an important date as well. pricing and sharp rate cuts from the bank of england next year. policymakers keep rates on hold again but governor andrew bailey seems to have some other ideas. saying it is still too early to think about easing with inflation risks still to the upside.

>> we made a lot of progress this year. we've still got a long way to go. we think the policy is having a restrictive effect at the moment. >> what is the extended time? is that a year? is that six months? >> what we described in the report is we took two approaches. one was to take the market curve as we did a week or so ago. the other is inflation coming back to target. we also took a constant rate path just maintaining. brings it back a little bit quicker. the key point here is we will have to maintain the stance to

be absolutely sure that inflation is coming back to 2%. >> the point is the market forecast does have points cut into it. it does have a cut price in and that gets you to a situation where you have inflation targets within two years. it significantly produces the risk of a recession. isn't that there for the most probable outcome when it comes to the interest rate path? question either of those two paths had a recession and then. there is very subdued growth. they are slightly reduced. there is not much between these paths and that supports the story we are saying which means we will have to maintain the stance for an extended time.

request the language is a little bit hawkish. >> for two reasons. we see inflation as being on the upside -- inflation risk as being on the upside. it is important that that message is not lost. in a way, i think i have to sort of lien against that. >> let's come back to that. everyone is talking about the market cuts. you are saying you do need to lead in on that. >> i am not leaning against the curve that we have on this forecast because there wasn't a lot of difference between those two. >> would you want to lead in on that? >> if the market -- we published

of you today that we are learning -- leaning toward going against that. but i think we will lien against that. >> you can watch us live and catch up on past interviews on our interactive tv function tv . you can dive into any of the securities. become part of the conversation. this is for terminal subscribers only. do check it out. it is at tv . this is bloomberg. ♪

the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com

question friendship. >> from visiting australia's biggest ally, the united states becoming the first australian prime minister in seven years to visit china. meaning xi jinping wal-mart a sudden change in the climate. china australia relations turncoat in 2020 when scott morrison called for an international investigation into the origins of covid-19. china began imposing a series of trade strikes including barley, wine and coal. a chinese diplomat presented in australian reporter with 14 grievances. to making statements from the south china sea.

they presented the opportunity for reset. china gradually while back the trades -- trade strikes. australia decided not to cancel chinese company land bridges on the part of darwin. albanese signaled he sought to build a relationship with china based on honest and open dialogue. >> we can disagree where we must but engage international interest. australia's interest as well as china but i believe in global interest for us to have a relationship where there is dialogue. >> there is a powerful financial interest as well. even during the diplomatic deep-freeze. australia's trade with china surged more than $20 billion driven by commodity prices. china also wants to join the trade pact which requires agreement of all members which includes australia.

friendship brings mutual benefits. paul allen, bloomberg. >> let's get more on anthony albanese. ben wescott joins us here. what do we know about what will be covered in this visit so far? request good morning. the trip so far, is going to beijing and shanghai. he will be at the china international import expo. that is a major initiative of xi jinping. and that he will be meeting with the chinese president at some point during the trip. in terms of what might come out of this visit, that is far more up in the air. this might be the first time that albanese has met with xi jinping. they met before the g20 last year. but this is the first time they

have been to beijing and the first time in australian prime minister has been to the chinese capital since 2016. >> incredibly significant visit but i wonder how much scope there is for cooperation between the two sides and increasingly in the polarized whether we are in. >> i think the next year of relations between the two countries is going to determine this. i was talking to an expert so i was sent a lot of the easy stuff has been done. it was obvious the still challenging. they were clear indicators of what australia wanted. this will be about increasing foreign investment. other things like australia

wanting china to release -- lift sanctions on things like wine and rock lobsters. i think we are getting down into what exactly in australian china relationship will look like in the years ahead encz that is something i think is a difficult question. >> it is about balancing this key trade and diplomatic relationship between relationships with australia's allies. the u.s. has warned about the taiwan trap and some of these other key issues that are not negotiable. >> absolutely. someone was pointing it out to me yesterday, at this very moment, the legislation is trying to pass the u.s. congress. that is likely to pass. by no means is a guaranteed. this is legislation that would improve all of this that would

allow that sort of technology to be passed to feel that fleet of nuclear summaries. with that legislation hanging in the balance, they are going to be able to see what the messaging is and whether australia can be relied upon request that was bloomberg's ben wescott with the visit from the australian prime minister to china. u.s. treasury secretary janet yellen says the claims of the u.s. turning away from the end of pacific region are unfounded. in a prepared speech she said washington was deepening economic ties across the region. her comments come just over a week before the u.s. is set to hold the apec summit in san francisco where president biden and she are expected to meet. be sure to tune into bloomberg radio to hear more from the days

big newsmakers and get in-depth analysis from the daybreak team. now broadcasting live from our studio in hong kong. listen through the app video plus or bloombergradio.com. plenty more ahead. stay with us. is it not

>> qantas executives and board

members are bracing for what is likely to be a fiery general meeting. they are getting the opportunity to vent over this series of scandals. this anger has continued to build with momentum. does that mean we might see some board members with this? november of 2024. he is there for a while yet. but there are three other directors that have announced their retirement. who is next? one thing that keeps coming up is todd sampson. he is coming back for new ownership matters. the australian council of super investors has said the same thing. they are at risk of being voted down. more broadly, this is a real

opportunity for shareholders to eyeball the banishment. i guess they can't be too upset. can they? >> in the meantime, you talked about those managerial things. request there are a lot of things around us. trust takes a long time to build. in terms of responding to crises , there is a lot of literature devoted to this. soon qantas over the scandal that sold 8000 tickets. they are pushing against this. this ignores the realities of

running an airline. it looks like they will be set up for court case here. it begs the question if qantas did nothing wrong, why did the ceo quit? they are publicly veering from an apology. it will be a long road back in terms of rebuilding reputation. >> we will be watching that edgy and for a -- qantas. daybreak asia is next. the key focus will be those jobs numbers but also watching the broader tech stocks here in asia. that deceleration in china hitting apple sales. this is bloomberg. ♪ as a top-ten real estate manager, we harness the power of a 360° perspective, delivering local insights and global expertise across public and private equity and debt.

our experienced team and vast network uncover compelling opportunities giving our clients an exclusive advantage. principal asset management. actively invested.

so, you've got the power of xfinity at home. now take it outside with xfinity mobile. like speed? it's the fastest mobile service around. with the best price for two lines of unlimited. only $30 bucks a line per month. that's hundreds in savings a year when you wave bye to the other guys. all on the most reliable 5g network nationwide. you really shouldn't walk out the front door without it. switch today at xfinitymobile.com.

the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network.