♪ shery: you are watching "daybreak: asia," coming to you live from new york, sydney and hong kong. annabelle: we are counting down to asia's major market opens. haidi: australia just came online. the top stories this hour. u.s. job openings come in lower. 60% chance of a fed rate cut in march. also ahead, china rejecting moody's downgrade of its overinvolved outlook, saying the property downturn is under control. and this tv maker says investors are planning further cost-cutting measures after a quarterly loss and disappointing outlook -- this ev maker, nio. annabelle: at the start of the day, the focus is still on the debt, because we had that advance in global bonds extending. the aussie three-year yield and the 10-year yield, both are retreating. really in line with what happened on wall street. extending back into the european

session as well. what we are watching is the dollar bid. aussie dollar is fairly flat, but there is concern that perhaps the global growth slowed down, those dynamics are starting to come into play. we do have the aussie gross domestic product data to. the acceptation is slowness coming through. it's the impact of higher rates, the drug from net exports, of those will play into the numbers. for the aussie stocks, the asx 200 is fairly flat as we get underway. let's look at futures. we have kiwi stocks already trading this morning. we are looking fairly mixed so far, but if you cast your eye across futures broadly, you can see mostly gains to the upside, china futures, for instance, even though you have to put the context of where we are with chinese stocks, we are trading around multi-month, even multi-year lows.

it's the dollar story playing into it. it comes back to what we are seeing in the bond race on the expectations around the fed, perhaps they have gone too far in the pricing. vonnie: yes, treasuries resuming their rally. 10-year yield fall into the lewis level since august especially as we got the latest job numbers. but take a look at how u.s. futures are coming online, because we lacked clear direction in the new york session. s&p 500 little unchanged. we have been around those overbought numbers for around two weeks or so. tech sector gaining ground, nasdaq 100 marginally higher. oil under pressure in the asian session, down 0.3% after falling to the lowest level since july in the wall street session. signs of a glut continuing in the market. but it is a treasury space watching. because the 10-year yield broke below the 4.2% level following

that jobs data which means that job openings that to the lowest level since march of 2021. those figures are supporting expectations for the fed to leave rates unchanged at next week's policy meeting. for more, let's bring in david wilcox, director of research at bloomberg economics. walk us through the numbers today. we have more jobs numbers this week as well. david: yes, -- for good to be with you by the way, today we learned that the number of job openings, that is jobs looking for workers, fell to a much lower number. that is a positive development because it suggests the labor market is continuing to cool, continuing to regain some equilibrium. the excess demand for workers is going away.

so far,, with remarkably little cost in terms of job loss or other dislocation. there are sectors and cracks emerging, but so far, it's a smooth process. we will find out more on monday when we get the employment report for november, but thus far, it's a textbook execution of a soft landing. vonnie: what does this mean when it comes to where the fed goes from here? david: well, for its meeting later this month, there is really very little doubt that they will leave rates where they are currently. my own guess, and that of bloomberg economics, is the fed is done hiking rates. of course, if we get discouraging information about acceleration, the fed is clearly leaving open

the option of resuming its hiking campaign. but right now, doesn't look necessary. the debate really has shifted to how much they will cut and starting when. haidi: david, how much attention is being paid to the global uncertainty, particularly when it comes to the slowdown in china? does it have much on the impact of playing into the feds thinking? david: there is no end of uncertainty from around the globe. you look at ukraine, the situation in the persian gulf, taiwan, our stance relative to

russia, the situation in china which is quite worrisome, there is plenty of potential sources of economic turbulence that could wash up on u.s. shores. and i am absolutely certain that the fed has got a keen eye on all of that. haidi: david wilcox's director of u.s. economic research at bloomberg economics. sticking with global risks, moody's cut its outlook for chinese sovereign bonds to negative, underscoring deeper global concerns about debt in the world's second-largest economy. for more, let's bring in enda curran. there are these increasing concerns because the fix being proposed for the property sector seems to be that it gets taken on by the banking sector more broadly, right, is this at the core of these concerns or was it surprising at all? enda: from this vantage point, looking back, it seemed the central issue was china

can't push past its real estate fund, moody's made the point of that is socially the government will have to spend more money on local governments. that has to do with the fact that relisted estate continues to be bogged down the way it is. of course the chinese authorities rejected that view and said the real estate slowdown is under control. but i think it does for the focus back on china's debt metrics, that the deficit is at 3.8% of gdp, well above the 3-odd percent area that it normally is. i think china's data story is that it slipped from china's -- debt story slipped from headlines in a few years, but this move from moody's will put eyes back on that. the market reaction is somewhat subdued, but it put more of a focus. what is happening with china's debt story, the longer it

remains in this real estate funk, the more money the government will have to spend. shery: china has its own issues with debt that have been going on for years but what about global debt? ? that is also surging. enda: it should be said that this moody's action on china once again puts a spotlight on what is happening globally. of course here in washington, governments around the world borrowed significantly during the pandemic at lower rates. now, those bills are coming due and coming at much higher interest rates. i think there is a view that over the next couple of years, governments will have to make fairly difficult spending decisions on where they can put money into the economy versus where they have to service those debts. we are seeing that in germany, and in several advanced and emerging economies around the world too. so that moody's decision on

china puts a focus on the china data story, but it also reminds everyone that governments have a lot of debt, through at much higher interest rates and that will put pressure on public finances in the years ahead. shery: of a global economics correspondent enda curran there. does go back to belle for a check of the early movers in the asian session. annabelle: there is one we are watching in particular, rio tinto. it has just come online. a bit weaker at the start of the aussie session. we do have the company putting its statement into the asx 200. we also have the capital markets investment data later as well. we understand rio is gearing up its production facilities into the figure, looking at a $6.2 billion investment to build a huge mine in guinea. shipment forecasts also intact for the course of 2024.

very interesting what we are hearing in terms of the demand from china, the rio ceo saying that the steel mills are running pretty much flat out and demand is fairly decent as well. . it could perhaps play into the story of the chinese recovery, given we are hearing so much bearishness, through. rio actually saying they have pretty decent demand. perhaps a bit more optimistic. haidi: and the juggle for policymakers, right, they don't want the market for "bloomberg studio 1.0 and iron ore to be too heated. the ceo of rio tinto will be joining us later, he will be with us to discuss his company outlook. his outlook when it comes to china perhaps a bit more optimistic than the broader macro outlook would suggest. coming up, russian president vladimir putin is set to visit the uae, as oil markets remained weak despite: opec+,.

but first, we will talk with charles schwab and why they don't expect policy rates to fall sharply next year. this is bloomberg. ♪

>> the reality is there is going to be a slowdown.

but the way customers are spending their money has leveled out. some things are going faster, but it has leveled out, meaning it is all good news that the economy has normalized. >> if there were any kind of challenging economic backdrop, the fed does have a loaded gun they can use as needed and as appropriate. i am not assuming it is going to happen. what were all expecting we are students of history, we expect it to happen again. i don't think you will see it happen right now. haidi: apollo asset management co-president jim's delta and bank of america ceo brian moynihan on the economy. our next guest says rates may be at peak but we don't expect them to fall sharply next year. jeffery kleintop is chief global investment strategist at charles schwab, and he joins us now.

the idea that the narrative for 2023 going into 2024 looks very binary, rate cuts versus a period of rate hikes. with more nuanced on that? jeffrey: i think it is. first of all, some major central banks will not be cutting rates, the bank of japan will actually be hiking. that is a major spoiler because japan has a huge positive net investment position. if the yen begins to appreciate and investment returns begin to rise in japan, you could see a lot of money go back to japan that means the selling of assets in the west. japanese investors on the $1 trillion in treasuries, that could be a spoiler. even bigger than that is the idea that markets believe the fed may cut aggressively next year. but even if the market is right, five rate cuts being placed in, that only takes the policy rate back to 4%. if inflation hits the fed's target of 2%, that is still a positive rate of +2 in terms of

rates. so i think a lot of what is being priced in right now it might be disappointing next year with the lack of liquidity fled from the world central banks. haidi: the lack of liquidity, it's interesting because the idea of what opportunities are there if you lift under the hood. we have been talking about the magnificent 7. the lack of breadth in the equity rarely. marc rowan said interestingly, you might as well take the risk when it comes to shrinking liquidity out of public markets where you are going to find more alpha. is that an intriguing element to what an investing thesis might look like going into this next part of the cycle? jeffery: i am looking to different parts of the public markets where i think there is more transparency. i am excited by what i am seeing, for example, in german stocks. that dax index hit a new all-time high yesterday.

it has been neck-and-neck with the s&p 500 this year in dollar terms. not on some magnificent 7, ai- driven around, but broadly across industries including siemens and airbus, stocks trading at below margin price. that is the good story next year. the hidden story this year, the average international stock is outperforming the average u.s. stock. we have not seen that in about 15 years but we have this year, and it will become even broader and a more important seeing the next year. haidi: international, there have been a few specific markets that have done very well. japan, obviously. do you think have further to run beyond perhaps what we are seeing with the low-hanging fruit, depending on what the boj comes up with next year? jeffery: i do. this year the nikkei is up 26% or so but only 11% in dollar terms.

if the yen can see some strength, that could really turn things around. japanese equities are still trading below their 10 year average for the price of earnings multiple, still at 20% gap to get back to average and we know in a price-to-book ratio, they remain attractive as well. so despite the fact they have had strong performance of this year than last, they aren't anywhere close to being at fair value so. there is still momentum there especially on manufacturing recovery. this year was a weak one for manufacturing and a strong one for services. that could reverse next year for economies like germany. haidi: the question about china looking at the valuations, looking at the beaten-down market that continues to do so are there opportunities emerging? if you believe that things can only get better from here? jeffery: i guess that is one way to look at it. it's very difficult to have a lot of visibility

into china's consumer and economic outlook. a lot of things are coming together to stabilize the backdrop. the recent initiative to stabilize the property market. but consumer confidence remains very weak. trying to turn that around, improving youth unemployment, so many other factors, they are really in question. i am more excited about the global developed markets rather than emerging. although within emerging, india is still a fairly bright spot. we saw the strong gdp report. a lot of things going right there. it may continue to be a positive momentum move. it is very expensive whereas china stocks are inexpensive, but probably for justified reasons. haidi: i was going to get to how expensive india is. what do you look for to make that compelling despite the valuations that we see? jeffery: i think it's a bit of a new world.

we are starting to see a very effective growth in manufacturing within india, something they hadn't been able to do very effectively for a long time. a lot of infrastructure investment. a lot of global partnerships -- apple moving operations that. so there is upside momentum to a part of the economy we hadn't seen growth from for a while. it's an interesting story as we look ahead. a lot of things coming together. the recent elections show that modi has enough support to continue these moves towards broadening international participation. i am excited by what i see, justifying those valuations. haidi: always great to chat with you, jeffery kleintop chief global investment strategist and managing director at charles schwab. and you can get a roundup of all the stories you need to know to get your day going on this edition of "daybreak." terminal subscribers, go to dayb . it is also on the mobile in the bloomberg anywhere app. you can also customize the settings as well for the news on the industries and assets that matter to you. this is bloomberg. ♪

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haidi: israel has rebuffed mounting pressure to halt the military campaign in southern gaza as the death toll ammounts. the united nations warned there is no safe place in the territory. let's get more from bloomberg's michael heath. it's being called a new bloodiest phase of this conflict, intensifying bombardment. michael: the palestinian health authority in gaza which is run by hamas says there has been 1000 deaths already which takes the death toll to 16,000 people. extraordinary numbers. we are in the 60th day since the initial attacks on israel so these are huge civilian tools. as the u.s. and said, there is no safe place to hide. we are talking about 1.8 million

people being crammed into a very small area in israel than trying to target among them,'s cooperatives. in fairness to israel, they are damned either way because they are trying to educate hamas, but hamas is within the population. in order to protect civilians they have to let him go off. . so it is either they take the international opprobrium, or they give up the campaign to eradicate hamas. it's a very difficult situation for them/meantime, what happens to the hostages? michael: it's a really good question. the pressure is building up on them. the stories coming out from the hostages that have been released are fairly horrifying and i think that pressure is only going to build. there is about 20 more women and a couple of children among the, i think a little bit under 140 hostages still left.

not sure if some have died in the meantime. those numbers are not confirmed. the remainder then our soldiers, men and women among them, and while this campaign is going on, it doesn't look like much is going to happen. israel has said it is open to another pause in order to release hostages, so that is possible. it depends i guess on how hamas assesses its status in this new bloodier phase of the conflict. if they are under pressure, they might seek another pause and he might see hostages released, but it doesn't seem that an immediate priority. haidi: the u.s., meanwhile is still trying to manage its engagement in all this. president biden urging everyone to condemn the violence of the torture we spoke about yesterday. michael: yeah.

the attention from that is coming to the fore. part of the reason it was mixed was, when initially the israeli forces came in to pick people up after the massacre, it was a military operation, so there wasn't this sort of assessment done of sexual crimes and other things. after 48 hours, it becomes much more difficult to verify. but more and more evidence is emerging that rape was used as a weapon of war by hamas in these attacks. the united nations' women's organizations, the long period it took them to condemn this, i think it doesn't do them a lot of credit there because there is no difference between israelis and palestinians. women are women. i think this is going to gain more attention. shery: bloomberg's michael heath there with the latest on the israel-hamas war. we have seen the dollar rising to a near to week-high. we have some safe haven demand fears of a slowdown in global

growth triggering that bond rally. across the world permit and we are seeing the japanese yen holding steady at the one level, only after strengthening to the 146 level. we had job openings data showing a cooling labor market here in the u.s. that really send the yen higher against the u.s. dollar. we are watching the offshore yuan holding steady at that 7.17 level. still awaiting trade numbers in china. the aussie holding study as well. this conversation is coming off on china's auto sector next. this is bloomberg. ♪

annabelle: you're watching

"daybreak: asia." i am annabelle droulers with a check of markets. half an the opens. the focus is coming into bonds. we are seeing the continued retreat coming through in yields from the global bond advance that kicked off in europe and extended into wall street and is now being felt in the asian session so far. we had u.s. jobs due to overnight pointing to the market softness, so the expectation from traders is that the fed will have to cut rates next year to avert recession. recessionary fears starting perhaps to put into it even though there is concern that perhaps we have gone too far in the market pricing. that is what we're seeing in the bond space. it took a look at equities, because in the session, traders are looking to gains for most of the region. nikkei futures coming online in singapore, 0.6% to the upside. one of the key markets will be what happens in china today,

given yesterday in the session, there was that selloff extending. we had a moody's downgrade on china government debt. seeing concerns from traders around the health of china's economy, even though we continue to watch the price of iron ore as a barometer of the health of the economy. we are holding below the 130 mark. still elevated prices over a historical average. rio's ceo speaking this morning and saying that the demand outlook from china is pretty strong. that ceo-esque list of interview, heidi co, you have that in a couple of hours -- that ceo's exclusive interview, you have that in a couple of hours' time. haidi: elon musk company is looking to raise $1 billion in funding from equity investors. . it has already raised nearly $135 million. musk created xai this year to compete against openai, where he was a cofounder.

and mckinsey studies say that banks using generative ai tools could boost their earnings by as much as 140 billion dollars annually through increased productivity. the report says this would amount to a 9% to 15% increase in operating profits, with corporate and retail banks having the most to gain. wall street has dived into ai as a way to overhaul its practices and potentially cut costs. softbank's mobile unit is buying an irish firm providing internet connectivity for cars, a key component in driverless vehicle trilogy. . it will pay $113 million for a majority stake in the telecom company. driverless cars are a focus of ceo, so e.u.'s on, with the group making focus of ceo muscle e.u. son -- ceo masayoshi son.

sales outlook for the fourth quarter for nio came in below estimates. shery: our next guest says the extreme price wars in china have put most ev makers under pressure. with us now is you can see bert, managing director at -- jochen siebert, automated managing director at jsc. jochen: to be honest, i actually thought that the margin would decrease, but it actually increased. you look at the liveries, they were better than i would expect. but the forward guidance for q4 is lower. i don't know what happened to the deliveries. but overall, yes, it makes sense because we have this extreme price war, and there is also the

problem for nio as more competitors come into those segments that nio is playing in. we have players from china but also international players like bmw and so on. i understand they are still in negative territory in terms of profit. i vonnie: want to get to the competition. investors seem to like the cost-cutting strategies from nio, whether it is just cutting jobs or trying to spin off non-core business parts. what do you make of those, and how much will that help? jochen: it is marginal. because when you look at the business that they have in battery swapping, they only have a share of that anyway, it is giving away to another company. it is kind of complicated. i don't think it will make much of a difference. and then cutting 10% of the workforce short-term helps.

longer-term, that can be the strategy for a startup, and they will have to cut corners, cut costs. . it will slow down their r&d. and i don't think it actually helps for a startup to do that. shery: let's talk a bit about the competition, and perhaps a w ay for nio and other ev makers internet to gain an edge over the overseas market. how feasible is that? jochen: it's very difficult. nio has actually tried to get into the european market, and so far, they have only sold a few hundred vehicles. they are priced too high for afford market, where nobody really -- they have a problem with brand recognition. say a majority of the europeans have never heard of their brand. it takes a while, normally, you

should only do that when you're already quite strong in your home market. but it is difficult, they are actually losing money. so far, that is only market they have gone into. the other market where there would be a segment big enough for what they offer, premium evs would, be the u.s., but the u.s. market, is closed. shery: his southeast asia more likely to take these chinese evs? jochen: smaller ones, yes. there are other companies which have evs that are smaller and the price in u.s. dollars is around $50,000. so, yes, that is a business base for that. but there is not that much space for premium cars in asean. let's not forget most of the countries, except for singapore, are middle income.

so you only have a very small market potential for the likes of nio in the market where most of their cars are $30,000 and more. there is not that much of a market. shery: how many in fact is this de-risking of supply chains coming from the west affecting these companies? and could it get worse from here? we are seeing more regulations towards content and materials of some of these cars. jochen: for now, not much of a problem. as you may have heard, we can see semiconductor companies managed to make a chip that seems to work for huawei for their new mobile phone from the it is still two generations behind. with every year passing, they will get more

behind. even with the restrictions we have now, this is the case there might be even more restrictions from the west which will make it more difficult for the chinese oem's to offer the same experience in terms of communication with the car. communication between cars. automated driving and so on. but this is not a topic for now. it will be a topic in three to five years. so nothing chinese carmakers should worry. they have other problems right now, which is overcapacity/. shery: iesco and those problems just made me think that more consolidation in the sector will be inevitable. who do you expect to be the winners and losers here? jochen: i think in the end, i don't think the startups really have a chance, except maybe for li auto, which is these carmaker that makes evs with range

extenders. they are quite different. they have found their niche. maybe they will survive. all the others, i think, will be very difficult, including nio. the stronger ones, byd, but byd's margin is also low than i think the large state-owned enterprises. most of them will survive, not all, but out of the, say, 150 chinese brands playing in the ev sector, probably only turn will survive the next five years. shery: jochen see bert, good to have you with us, managing director of jsc automotive consulting, with his views on china's electric vehicle market. we have more to come on "daybreak: asia." this is bloomberg. ♪

haidi: the u.s. climate change envoy john kerry, says companies with big carbon footprints are facing heightened routinely. he spoke with us at the bloomberg green festival in dubai, and we asked him whether oil companies are doing enough to fight climate change. 'not all of them, no. regrettably.

but let me be fair. exxon mobil is working with us on baseline they have to do an in-kind effort with on the ground training and working with people and being able to be helpful on methane. they clearly are moving differently than chevron. and we are hoping to close that out in the next hours, if not couple of days. we will work with the world bank . >> what more can chevron do? secretary kerry: everything. [laughter] [applause] secretary kerry: they have got to do more. [laughs] well, i am very respectfully -- a very respectfully would say that you can't outside of this initiative. we have no real evidence that they, and a lot of others,

are doing what every company needs to do. scope one, scope two, methane -- -- this is what many companies signed up for by the race of in the initiative. is announced that there is this global decarbonization alliance. these companies have come together. and it's not insignificant, you know, a lot of criticisms have been leveled at the uae, but the fact is that this is the first time ever that those companies have come to the table at the cop. what they have agreed to do is not enough, in my judgment, but i would rather have them doing it than not doing it. that is a pledge to net-zero 2050, a pledge to scope one and two by 2030, a pledge to all methane by 2030 which is really important for us, and to raise

their cap acts on renewables. -- there capex on renewables. bottom line is we need -- look, we have got to be honest here with each other everybody, and that requires the oil and gas companies to the equally as honest with us. shery: u.s. climate change envoy john kerry, with bloomberg's john fraher. chevron saying in a statement that it is "an active participant in cop," pointing to his ongoing work to eliminate emissions and reduce the carbon intensity of oil, gas and refining operations. let's take a look at oil prices right now. we are seeing more downside in asian trading. this, of course, after it already fell to its lowest level in five months in new york.

in another sign of market weakness, saudi arabia cut crude prices to asia customers. bloomberg's su keenan joins us now. signs of the oil glut continuing. su: with saudi arabia cutting $.50 a barrel to asia, check out the charts, five month lows for westar since intermediate -- wti crude and brent crude. rent crude was at striking distance of $100 a barrel at a month or two ago. it's a big downward turn and it has to do with outside opec supply that has exceeded all estimates. chief among the exporters is a u.s. which is even a surprise to many in the u.s. exports of u.s. crude art nearing a record of 6 million barrels. this is flooding the market with oil and weighing on prices. we have two analysts giving estimates of 5.7 million to 5.9 million barrels a day from last

week alone. . this is to be confirmed when we get the wednesday data from the u.s. government, but the flood of exports, as domestic production in the u.s. is surging to a record, above 13 million barrels a day. while opec and its allies have agreed to deepen output cuts to balance the market, the non-opec suppliers are driving the prices lower. you have a major bearish factor that continues to weigh on the market at this point. haidi: meanwhile, russia says opec+, can go further. looks like putin himself is getting involved. su: deputy prime minister alexander novak of russia saying opec+ can go further with cats is needed. he will be joining vladimir putin this week on a visit to the united arab emirates. that is putin there just over a year and half ago visiting the president of the uae, and also saudi arabia at this overseas trip, which is rare for the

russian leader especially since the invasion of ukraine. he is expected to bolster partnerships among the key members of the opec cartel. back to youm bloomberg's su keenan there. rio tinto will spend about $6 million on the ve lament of a project in guinea, and expect its first production from 2025. for more, or bloomberg commodities reporter joins us now from melbourne. why are they pursuing this project, and what are the challenges? sybilla: big announcement out today from rio, a huge investment they are willing to put into guinea. it does mark a bit of a difference from previous years with rio's capex growth remaining fairly limited. but we are seeing sort of this new era. the project is asserted to be rio's largest investment in the next five years.

it's one of the largest untapped deposit the iron ore and it is being pursued in large part because this iron ore is of higher grade than that from the dominant region in the world. it's important because as steel mills look to decarbonize, they need higher quality iron ore that is expected to come from simendo. there are challenges. for years the area has been stymied by infrastructure challenges. but rio this morning said they seem pretty confident that production would start from 2025. shery: always when it comes to iron ore prices, it is a lot to do with chinese demand, right, how does rio see the outlook from here? are they targeting outside of china? sybilla: to be honest, rio is not as downbeat as one might expect about china this morning. jacob stolz home was telling

investors that he was over in china and the steel mills are producing flat out right now so demand is ok. he pointed to infrastructure spend picking up as well which should support iron ore. good for them given it is a key commodity for their business. but you are right, they are looking at other places around the road. for example, india is a big target for them as the country starts to normalize as well. haidi: bloomberg commodities reporter sybilla gross so in melbourne from who hear more from rio tinto in a few hours, the ceo will join us exclusively at 1:30 p.m. sydney time to talk about his outlook, particularly on china. this is bloomberg. ♪

haidi: you're watching "daybreak: asia." some of the other corporate stores were following, starbucks shares slipping after its ceo said the china recovery was slower than expected and that the path ahead will be choppy. last month starbucks reported quarterly results but topped expectations, about the stock has since suffered a record run of losses. starbucks has invested heavily in china, but previous pandemic

restrictions and slowing consumer activity have hit its bottom line. goldman sachs says it will probably see its payroll costs climb and percentage in debt load to single digits in the and after a year of slumping profit. the cfo said the bank will continue to pay based on the performance of its businesses. it said last year's pay slump contributed to public sniping. shery: japanese investors spending the most in two decades to buy up properties overseas undeterred by the global real estate slump and the yen's declined to a 50 year low. joining us is alisa. where are they getting the money when you have the japanese at historic lows? lisa: yes, like you said, japanese investors have been quite active, buying up global real estate, offices, warehouse

and data centers across geographies like the u.s., canada, australia and the u.k.. aggregate, they have spent $7.4 billion this year on global real estate. to put that into perspective, that is more than three times the annual average in the last 15 years. in terms of where they are getting the funding for this, i do think some of the people valuing, most of them are corporate investors who are very flush with cash in japan and have access to very easy funding. haidi: are there any larger implications for the market? lisa: i think doing this kind of buying during a downturn comes with risks. you have the risk of buying something at the wrong valuation and having it turn bad later. on the flipside for the more positive side, you do have some brokers who have mentioned that

japanese investors continue to be active in buying during such a time when other investors have stepped away. they will help people understand where valuations are and where the market is at this point in time, so there is a good and bad side to this. haidi: bloomberg's asia real estate and investing reporter lisa du in tokyo. let's look at trading across commodities. much of this coming down to the latest out of china. not a great deal when it comes to the meaningful outlook being changed. that moody's news is one further element to the downside that we see for china what it comes to copper -- when it comes to copper, we have seen that reaction. pretty flat at the moment. we saw iron ore in the early part of this week following along with most other base metals on that weaker sentiment out of china. we will speak to the rio tinto

ceo. he maintained the 2024 oil shipment forecast. on the balance of things, pretty positive when it comes to what they see out of china and demand from that key market there. they are still expecting more or less the same when it comes to investment in some about output numbers as well, shery. shery: markets are watching closely the recovery in china. let's look at how we are setting up for the asian session. the asx 200 is up 0.7%. kiwi stocks are holding steady. nikkei futures pointing to the upside. the market opens in seoul and tokyo are next. this is bloomberg. ♪

a few years ago, i came to saona, they told me there's no electricity on the island. we always thought that whatever we did here would be an emblem of what small communities can achieve. trying to give a better life to people that don't have the means to do it. si mi papá estuviera vivo, sé que él tuviera orgulloso también de vivir de esta viviendo una vida como la que estamos viviendo ahora. es electricidad aquí es salud. (car engine revs) (engine accelerating) (texting clicks) (tires squeal) (glass shattering) (loose gravel clanking)

♪

>> this is "daybreak asia." we are counting down to asia's major market opens. we saw again the rally in the treasury space resuming following the rally we saw in the global bonds markets as well. we have got u.s. eco-data showing more of that cooling in the u.s. labor market and haidi, of course, expectations of more easing coming from the fed's year. haidi: just adding to that prevailing narrative, the pivot we have seen in market pricing. it seems like even with this idea that maybe we should temper expectations, markets are still pricing in these fed rate cuts. annabelle: that is certainly the dynamic in play. we have the open coming online and it really was that move around the jobs data we had in the u.s. overnight, further reinforcing the labor market softness. the that can afford --

they will need to cut rates. the market reaction yesterday overnight was about that continued pullback in treasury yields so the 10 year yield is fairly steady if we come online. it is below that 4.2 percent mark. compare it to recently around 5% instead. a big drawback and it really is coming as the fed rate cuts are being priced in. the yen fairly steady this morning. the yen strength we had been seeing as a result of recent dollar weakness has been weighing on japanese exporters. the nikkei up half a percent as we come online. we are seeing that around much of the region, what we are expecting for trade today. the market optimism is too high. they are looking at

overstretched technical funds. the broad belief that the fed won't ease quite as quickly as they are expecting. goldman sachs saying overnight that there are no longer any bears left. the market outlook for today, we are seeing the korean won holding fairly steady but we are seeing the stocks just a slight advance so far for the kospi here. the korean won to notice what we are seeing in em currencies, generally under pressure. one of the big lie guards yesterday. there is the focus on eco-data locally. down 0.2% for that three-month period. that is with consumer spending. it is getting week in australia. it is the impact -- weak in

australia. you have a drag on net exports that could show up in the numbers it otherwise, we are keeping an eye on rio tinto which came to the downside and flipped while -- modestly into positive territory. iron ore holding steady again but still at elevated levels and we have the rio tinto investor seminar underweight -- underway in sydney. the ceo can talk about demand from china. mostly to the upside so far. >> let's bring in our next guest who expects the negative correlation between bonds and equities to become more reliable next year. with us now is the senior macro strategist. great to have you with us on this call. you are expect more certainty when it comes to the inflation picture and where the fed goes from here. homin: well, the the portfolios had a pretty dreadful two year

stretch mostly due to inflation shock. honestly, -- and now, we think the environment has completely shifted. the macro and policy environment. that allows us to think that maybe the context for these folios going forward will be a bit different. inflation is lower and the rates have php or at least that's our expectation. if that does not pan out, at least the environment could support a more negative correlation between bond and equities. we think the likelihood that is happening is higher going forward.

the portfolios will likely generate steadier performance and i think for investors, that is not a bad place to start the new year given that we are facing a year full of geopolitical risks and election events that could be quite impactful. >> investors have priced in a fed dovish pivot several times already. what does that mean when it comes to market expectations and the said having to follow through. homin: first of all, it's great that we are not talking about the rate cuts. that is a meaningful shift. the feasibility of rate cuts is pretty high. when it comes to the magnitude of rate cuts, we think the markets move ahead a little too far.

there will be two cuts in the second half of the year. there is a growing school for the third cut in light of the opening number which will be echoed in this week's employment number for november for the u.s. and the reason is that there are some uncertainties regarding the financial health of the household sector in the u.s. if there is an underlying residual strength in the household sector, falling inflation could actually increase the real incomes and translate to stronger demand. it is important to bring the inflation down closer to the 2% and keep it that way and the right strategy, you know, to achieve that outcome is to be tough for a few more months and keep the rate at the restrictive territory as chair powell has highlighted and maybe start cutting when the data is more clear. we think the timing for that is

the second half of next year, not the first quarter as the markets are repricing. >> depending on where the fed goes from here, we will see the repercussions in emerging markets. you have reduced your emerging-market local currency debt. tell us about your rationale behind the portfolio moves. homin: we still think the overall context will still be relatively supported for emerging-market local currency debt next year. however, we are seeing a fairly substantial rally in the past few weeks due to this changing environment for the fixed income markets. tactically, we think the upside potential has become a little more limited. the appeal has been reduced quite substantially. we focus more on higher-yielding

markets. especially in places like latin america where the fundamentals have been somewhat more supportive. it's more of a focus within the segment and the broader exporter may be -- tactically, it makes sense to take profit because the asset classes -- and wait for a better opportunity to reenter. >> when will we see more confidence about the chinese market? we have movies downgrading their credit rating outlook to negative. we have seen some uncertainty when it comes to beijing policymaking when not having a date for the third plan him as well which people have pointed out to the opacity. what will it take for a turnaround in 2024. homin: the progrowth bias of beijing is pretty clear about markets are waiting for a credible plan to shore up the

economy of china. on the real side, we still think the domestic economy is growing but you know, if you look at the inflation numbers and the deflating component of national accounts, they are still very weak, and that is suggestive of revenue for chinese corporate's and we have seen fierce price competition between the domestic manufacturers as buyers. that is not a good condition to have when you are dealing with a multi-year restructuring of the real estate sector so it's important for them to come up with a measure to really boost the inflation outlook for the country in a more credible fashion. so far, markets do not seem to be convinced by the measures that have been announced. we are paying attention to this discussion around the renovation program and potential financing of this through supplementary lending by pboc.

if you think about the 2014 and 2017 cycle, this program proved quite effective in boosting the real estate prices. for sure, we don't have the details for this program -- these programs yet. if they can announce this may be in the upcoming conference, then that could prove -- improve market sentiments but the long-term pessimism still prevails. >> always good to talk to you. thank you. of course, we are watching crypto related shares because continue to see bitcoin on a tear. what are you seeing? annabelle: that's right. it just seems like a bit of fomo perhaps is returning to crypto markets because we have seen big gains for bitcoin. you think we only crossed the 40,000 threshold over the weekend. it is a big advance. these are some of the crypto linked names in asia. we have seen big trading routes for these across the course of this week that it is following

the gains we had for crypto linked stocks on wall street, for instance. coinbase. marathon digital, all up for a third day. each are up more than 300% over the course of this year. that is really the sense of fomo coming into crypto markets. bitcoin at its highest since april of last year. let's change on because another group of stocks we are focusing in on this morning and these are the shipping names in asia. mostly moving to the downside as we come online. jeffries said that dry bulk rates have reached a near-term peak. they do remain strong but still, when you compare the rates where they were two weeks ago, they are much lower at this point in time. we saw u.s. shippers selling off overnight. european shipping stocks declined because barclays says it sees a bad year ahead for the industry globally. so again, really playing into some of these japanese and korean shippers as we get online this morning at 11 minutes so

far into the trading session. haidi: annabelle in hong kong. still ahead, and rba statement putting a spotlight on the dollar -- an rba statement putting a spotlight on the dollar. china on the defensive after moody's cut its outlook for chinese sovereign bonds to negative. we get an analysis of that downgrade, next. this is bloomberg. ♪

>> china has pushed back against movies downgrading, saying the impact of its property downturn is well under control. for more, let's bring in our senior executive editor who joins us in beijing. beijing has taken issue with the big sovereign ratings firms in the west. they have their own domestic option, as we know. what are they saying that moody's got wrong about this? >> they are saying that they are disappointed with the decision to change the outlook for china's sovereign rating. they are saying china has more than enough capacity to take on additional debt, to take care of the local issues with local governments in terms of how much they have got on their books in the form of that and in terms of

the property market here. obviously, with officials in beijing trying to instill confidence in the market, the economy will be getting back on track. that wall -- that will not help as well. >> we actually saw markets reacting to that. john: so before the official announcement, there were screen grabs circulating on wechat that appeared to show a change in the outlook was coming. as you mentioned, there was -- in the later session of trading yesterday -- markets did decline on that news come on that speculation and also, as early as friday, there were supposedly speculation that moody's was going to take this step. there were a number of people involved in coming up with this decision. so the possibility of that is

always there. we have not heard back from moody's on what could have happened or what they are doing about it. >> john liu with the latest on china, the news that moody's downgraded the outlook for the credit rating of the country. it really was felt in the quality space. we stop copper lose ground in the previous session. given the concerns about chinese demand. it continues to give rise to worries about where the commodities space goes from here. copper had gained more than 7% from its november low up until next week but the concerns about the chinese economic recovery are weighted not only on copper but also iron prices as well. we are seeing oil prices also under pressure for another session in asian trading after

it hit a july low on wall street. signs of a glut emerging including saudi arabia cutting crude prices to asia. -- asian customers. su: saudi arabia leading the opec-plus cartel ticket prices higher by deeper cuts. now cutting prices to asian customers by $.50 a barrel. if you look at what the market is telling opec-plus, it is telling it we need to see some action, not just here about it. we are at a five-month low for nymex traded oil. we are at a five-month low for brent crude as well. they won't do that in the way they have been able to do that. the unprecedented supplies outside of opec-plus, namely the u.s., are really what is weighing on the market now.

crude market exports are at a near record of 6 million barrels. they are both saying we are seeing these u.s. oil exports flood the market from europe to asia impacting price there and we are looking for confirmation in the u.s. on wednesday when the government comes out with its latest statistics. opec and allies have agreed to deepen cuts next year to balance the market but the supply is the key issue. there is not only a major bearish factor but there's also a technical gauge that many traders and investors watch. it is flashing oversupply until may next year. that's the time spreads in europe. ample availability of u.s. oil along with regional suppliers are depressed visible crude prices and triggering more concerns. >> russia says opec-plus cuts can go further.

putin himself is getting involved. su: president putin, in a rare visit outside of the country since russia invaded ukraine will be traveling to both the uae to meet with the president -- there he was over a year ago visiting with the president. he will also be visiting the saudi crown prince on wednesday. this to discuss a range of issues we are told will include trade and investment in israel's military campaign. they are also reporting that again, they won't be visiting the cop 28 summit even though he will be in abu dhabi. again, he will be traveling with the deputy minister, alexander novak, who says that opec-plus is ready and willing to extend their cuts deeper if needed. that likely will be something putin will talk about. there is a lot of view that this visit will indeed bolster the partnerships with the key members of the opec cartel.

opec cuts are taking further measures if last week's production cuts are not enough. if the action is not enough, the countries have said they will take additional steps. that is what the market is watching for. >> oil is also in the spotlight today in our big take to look at sanctions -- how sanctions have failed. oil exports now greater than before. it invaded ukraine. subscribers can read the full story on the terminal and also at bloomberg.com. let's take a look at how we are setting up when it comes to futures in europe just opening up for the minute. as we have seen muted gains when it comes to asian stocks in this session. germany's dax is going to be in focus for this session. the record high is in sight. the november rally is continuing to expand. such a marked difference compared to what we have seen across u.k. traded stocks.

your stocks futures looking positive. german dax futures looking like that rally will go on -- euro stoxx 50 are looking positive. german dax futures looking like that rally will go on. want to come on "daybreak asia." -- more to come on "daybreak asia." this is bloomberg. ♪

hey, doc, if you had to choose, would you give yourself a root canal or run payroll? oh, run payroll. paying my team with gusto takes just a few clicks. they automatically file my taxes for me too. can i run payroll too? choose payroll without the pain. >> -- global management says it is harder for investors to beat indexes in public markets. the ceo told bloomberg exclusively that better returns can now be found in private assets. >> we have had a sea change. we have had it 15 years. so much of our public markets are indexed and correlated. 80% of volume, s&p 500. 100% of our returns this year are from 10 stocks which

constitute 35% of the s&p. it traded the average pe of 50. how many of us are looking to buy 50 stocks? not many. what i am suggesting to you is that public markets are so correlated and indexed interest rates into money flows that if you want alpha outperformance, you need to step away from public markets. i think that is happening and i think we are revisiting the notion of public in safe and private being risky. this is the framework we used to be in. private meant venture capital, hedge funds, private equity, and now, it means less liquid. >> is that not inherently a risk in your mind, liquidity? >> liquidity is a risk to everyone but in different degrees. if you are a retirement plan or system, you know your liquidity requirements for the next 10 years. why not get paid for illiquidity? if you are a healthy individual, how many of them need their

money on tuesday? we are seeing that in the performance data. active management has failed to beat the index. i think it is going to get harder, not easier, to be to the index as more and more of the market is indexed. very little money is left to ashley make up what needs to be done in active management. >> what is the single operational distinction between drexel and apollo? what is the micro idea you can give us of then versus now? >> i will give you drexel, lehman brothers, first republic. the financial institutions tend to die of one of two classes, heart attack or cancer. heart attack is funding risk. they borrow short and they lend long. cancer is the slow addition of poor quality assets which undermined the system over time. you look at all of those firms.

all of those had an element of heart attack and cancer. funding risk as well as asset risk. you look at what we are doing and we are borrowed long and lent long. everything is matched, everything is in a find, and there is no quarterly liquid money at apollo. we are ideally situated to take advantage of less liquid assets. and then you look at the totality of what we do. equity is a risky business. equities go up and down every day. you can lose money in public equity and private equity. in the private business, the vast majority of what we do is private investment grade. >> when i look at the risks out there and all the work he did, what are the tail risks you see right now for private equity? i mean, are you hedged perfectly? is there next to no delta where you feel so comfortable? is there actual tail risk at apollo? marc: i don't think there are tail risks in private equity.

private equity is a risk taking activity but each of the companies, each of the situations is idiosyncratic onto itself -- unto itself, and private equity has proven to be a very good asset class, recognizing that in certain markets, you will lose money. >> marc rowan speaking to tom keene and jonathan ferro. we talked currencies with deutsche bank after the u.s. dollar posts's biggest advance in over two months -- posts its biggest advance in over two months. this is bloomberg. ♪ (car engine revs) (engine accelerating) (texting clicks) (tires squeal) (glass shattering) (loose gravel clanking)

>> third-quarter gdp for

australia just crossing the bloomberg. when it comes to the seasonally adjusted quarter on quarter number for the third quarter, we are seeing more muted than expected, point 2%. expectations were for .5% and slowing from the .4% that we saw in the second quarter. that year on your headline number, two point 1% for australia's third-quarter gdp. -- 2.1 percent for australia's third-quarter gdp and holding at the same levels we saw in the second quarter after we had the rba really striking a pretty neutral tone, not as hawkish, not hawkish hold markets were expecting so we are going to take a look at the aussie dollar in terms of what we are focusing on and holding most of the moves we saw in the postmeeting statement as well. tim baker who is the g10 fx strategist at deutsche bank, joins us now in sydney. do you think the rba is done? tim: i think so. it is hard to say with confidence paid we heard yesterday that we had to learn a lot in the last month.

we got this indicator. that is all it is is an indicator. we are missing information on how it is evolving. could february bring another hike? perhaps. we are close to done partly because of the global hike. australia might be an island but no country is really an island when it comes to policy. >> this was a year of rate hikes in 2024 and it -- this was a year of rate hikes and 2024 will be a year of rate cuts. does there need to be more subtlety around the narrative? tim: i think so. the market want to price the next thing, pausing for a while. it makes the markets nervous. let's look forward. it kind of depends on the country. the market is getting excited about the fed. i think the growth slowdown could come. i am not sure they will be cutting quite as quickly as the markets pricing. look over at europe and the euro area are now in recession on the likelihood. inflation is coming down. they could be cutting in q1 or q2 so it depends on the country.

new zealand probably pretty early on. australia might be later. it will be a story next year of rent cuts i do -- rate cuts, i do think, but different stages. there will be divergence. >> where it is fair value for the aussie dollar given things on the china front, certainly speaking to the rio tinto ceo later? he is bullish in terms of the volumes we are still exporting to china. tim: i am a little bit bearish on the aussie dollar. things like canadian dollar as well. the china story, there is a lot of promise there. every few weeks, some kind of policy announcement. the follow-through, i am always struggling to find it. if i look at share prices of chinese property developers, they are at new lows. iron ore -- i have got this wrong. it is held up anyway. until china really makes a move and really supports the property sector, i mean, it is fine but i don't think it is enough to drag aussie dollar higher. when i think about the domestic

situation, what matters for the aussie is not so much what they will do in february, march, april, but what it is priced into a couple of years out and that is where the market thinks the rba will stay higher and i think the market will be proven wrong there. the yield support probably does not get any better than this. >> given the opacity may be that we have seen from policy for next year, does that mean there is no clear one-way direction for the dollar? tim: the u.s. dollar? haidi: for the greenback. tim: there will be clear directions in the second half of next year's story and that is because i do not really by the immaculate -- buy the immaculate soft landing story. when i look at the g10, i see a host of countries close to recession, at the very least, per capita recession like australia. can the u.s. buck the trend question right i'm skeptical. if that rolls early, forget a recession there. at the moment, it is all dovish fed repricing. we don't need to belong dollars

but that could quickly get arrested if the u.s. growth story catches down. on the other side of this, if there is a u.s. recession early next year and equities are softer on the other side of it all, you get the policy rate cut and that is when the u.s. dollar starts the downtrend but it seems too early for me. haidi: dollar weakness has given a bit of breathing space for policymakers in japan at least. tim: it has. dollar-yen down at 1.47 now. i mean, we have been bullish and we are still inclined to be that way medium-term. the tokyo inflation data was a little bit softer for the first time in a while. it has been 12 months anyway you cut it. the inflation data has been worse than expected and the bank of japan have been too optimistic about how quickly they can get disinflation. yesterday's data was the first bit in a while putting less pressure on the boj. i have not been able to say that for 12 months probably so even those guys maybe don't have as much pressure either. the yen is in a funny place.

really cheap but still at the moment -- it carries value. haidi: dollar china has not done very much but do you think they will tolerate a bit more weakness? tim: i think they have to. i'm not sure what else their policy options are in the medium-term. all this talk about property policy support and where is it has already -- haidi: i don't want to support it too much. isn't that the problem, they want to deleverage? tim: this is a country with a lot of debt. could they stimulate the households to borrow more? maybe a little bit but it seems like there's not a great deal of policy tools so allowing some weakness over the next year or two, maybe that kind of makes sense so at the moment, there's a lot of kind of official support to stem some of that serious weakening we saw earlier in the year. but from here, the trend is a little bit lower. haidi: tim, great to have you with us. fx strategist at deutsche bank.

from fx to black bank is what you are watching. annabelle: it is a hard shift but we are going to make it. this is really big news. any blackpink fans, there has been some media reporting saying that perhaps the members would not be signing on with yg entertainment. but they have just confirmed that all of the four members of blackpink are re-signing with the company. they are going to be planning a new album. there is a world tour in the works as well so the market reaction is fair and square. investors are liking the news of this. that stock earlier trading up near the daily limit, 30% set for the korea stock exchange. let's change on because a little bit less interesting or exciting perhaps than yg entertainment but broadly in the markets today, we are looking fairly optimistic across the board. stocks uniformly in the green. we are seeing mixed moves coming through in the dollar space so far and not too much action but the bond space is where it is most noticeable so overnight, we

saw treasuries moving back down to the 4.2% marked thing, getting investors, even if there is that concern they are getting ahead of themselves, there is that perception in markets that the fed is going to be able to cut rates over the course of next year. seeing some weakness coming through in the metals space so far and continuing to track the price of iron ore, that contract just a little bit under pressure so far in singapore but put it in context, prices around 130 dollars mark, that is at historically high levels. big interview ahead. we have the rio tinto ceo. haidi will be speaking with him in a few hours time but certainly going to be asking really about the health of china's economy. shery: that is what everybody wants to know at this point and investors in china, really given that negative news flow, can't seem to catch a break. stocks in mainland china and hong kong had another terrible day of losses on tuesday. to get us set up for wednesday's session from our markets editor and coanchor, david ingles, joins us in hong kong.

and a stocks managing editor is with us in singapore. david, give us a sense of where this market said and whether we could be potentially setting up for any kind of rebound. david: i like how carefully you phrased that, shery. i mean, you hedged it all the way. shery: potentially any kind of rebound? david: short-term rebound. shery: make a call. david: it is really a crisis of confidence, isn't it? to answer your question, we could get one today. and how long it lasts, if the last year and a half is any guidance, it probably will not last very long. that being said, 90% of stocks -- you have 5000 stocks give or take on the shanghai -- on the shenzhen composite and 90% of that group actually failed substantially yesterday. in fact, we have gotten to a point where prices are oversold in many parts of the market. 30% onshore, 20% on msci china. we are at a point where you do

get bargain hunters coming in and picking up the pieces. but then again, you ask anybody and certainly almost everyone we have talked to so far, and a lot of our guests, have pointed out that we will get -- it does make sense. they don't see any catalyst so far, whether that is in the economic data, in the earnings, which i know you will talk about just a moment there, that seem to suggest that this market is able -- will be turning a corner anytime soon sustainably at least. shery: so how has third-quarter earnings in china played out to get us to this point in the markets? lianting: not a pretty picture. if you look at a few key takeaways, among the msci china index members, 30% missed estimates in terms of their earnings versus just 18% in the previous quarter, and also in aggregate, earnings-per-share in the third quarter dropped 6%,

and that marks a fourth-quarter of declines, plus people were going into the earnings season hoping the tech sector would really deliver, but if you look at the data, the earnings per share for the tech sector increased just 15% in the third quarter. that is less than half of the increase that we saw in the second quarter, so i think just the take away is that investors had a bit of too high of a hope going into earnings season, hoping that this could provide a catalyst to propel the market a little bit further up. but in reality, it was basically a huge disappointment for investors. shery: -- >> david, we keep screaming, but they are so cheap. so extreme. david: absolutely. in fact, let me build on the point. cheap is not a catalyst. i mean particularly as you get more extreme because that tells

you something else perhaps as he reached extreme levels. you know, while china, you know, a good example of this. china is trading at less than half what you would pay to get exposure to india but india is delivering earnings growth and that is a market that cannot stop rallying, for example. what is interesting here is that tactically, and again, i have to caveat this the way shery does, tactically, there have been analysts out there. jeffries, ubs, and in about one hour or so, socgen will be joining us on the china show. they are calling for a tactical case to go along on china against india because of just how extreme this valuation gap is between these two markets. that doesn't really tell you anything, how long that rally actually lasts, but tactically, there is a case to be made because things are cheap. haidi. haidi: valuations are not a catalyst. what would be then that people

might be looking out for? lianting: not a whole lot. as we discussed, the third might have been postponed to next year so we are looking at the central economic work conference that may be coming up in the next few weeks. we don't know the exact date yet but what is expected to be discussed is the economic agenda , potential gdp target, and the potential monetary and fiscal support that will be coming out of the central government. but again, as david was talking about, you know, without the kind of recovery that -- in the property sector, that has been reflected in actual economic data and that is really not going to change the sentiment among investors which right now, as we see, are very very pessimistic right now. -- very, very pessimistic right now. haidi: the latest on what to expect from china. we do have an alert on argentina

right now. we are getting the latest nominees when it comes to argentina's cabinet from javier millie. we are learning he has appointed santiago as the central bank chief, the financial secretary, and we have heard that one of his pledge is on his platform was closing down the central bank so this is a big development. that silly -- he has been named central chief. we have more to come on "daybreak asia." this is bloomberg ♪

a few years ago, i came to saona, they told me there's no electricity on the island. we always thought that whatever we did here would be an emblem of what small communities can achieve. trying to give a better life to people that don't have the means to do it. si mi papá estuviera vivo, sé que él tuviera orgulloso también de vivir de esta viviendo una vida como la que estamos viviendo ahora. es electricidad aquí es salud.

>> you are watching "daybreak asia." bridgewater associates founder says the world is unlikely to limit the rise of global temperatures to 1.5 degrees celsius. he spoke with francine lacqua at the bloomberg green festival at caught 28 in dubai and highlighted what needed to be done to achieve current climate goals. >> let's be realistic. we are unlikely to achieve the 1.5 target so there are three things. what you can do to achieve the 1.5 target. the second is adaptation. ok, if you don't achieve the 1.5

target, what needs to be done to make that acceptable? of course, the consequences of not doing that are big. big migration, all sorts of problems, but how do you adapt? and then the third cost is the cost of the damage. i believe that we are going to be moving in an economic way to adaptation. and that there is a lot of -- that will have a great power. the reason is it affects everybody so as there is an element here of let's be good and get the money, but if you go to banks, they say banks have a lot of money. things have assets and liabilities and if they don't receive or give their depositors or those who are putting money with them an adequate amount of return, they will not have any money so you still have to have the return component of that.

what happens is self interest is a great motivator, when you have that, and i think adaptation will be some area for probably great investment and great productivity. >> is in, change the biggest risk relate to any company? when does it actually -- when do we see regulation that forces every company to look at it as the longest, biggest risk out there? ray: i think the secretary did such a wonderful job of describing the realities of that. i think that is the balance. as a very practical person, one can't to say it's going to be all or none. one has to look at what is it, what is happening? i think as you are dealing with the regulation, that is right. that is good. there is also a meme developing that you are not a good citizen, ok. that political aspect also plays -- i mean, social aspect, meme, plays a role. are you doing it well is a

social pressure that has a role and so does regulation, social pressure. those are all good things that are helping. the real question is, is that enough? it's not like you have them or you don't have them. >> ray dalio speaking with francine lacqua at the bloomberg green festival. also speaking to us at the bloomberg green summit in dubai was the u.s. climate envoy, john kerry, and he was highly critical of some u.s. oil producers for not doing enough to combat global warming. oil and gas companies ought to be leading the charge, singling out chevron. >> you cannot be outside of this initiative and we have no real evidence that they and a lot of others are doing what every company needs to do. the evidence is overwhelming. there is no doubt about the science. and that is why i say it is

inexcusable. there is no reason to the permitting unabated efforts at this point. this is urgency, folks. >> chevron says in an emailed statement that it is "an active participant in cop," pointing to reducing the carbon intensity of oil, gas, and refining operations. shery: coming out, talking about the easy sector. -- ev sector. the ceo is confident in the company's competitiveness as he works on efforts to boost sales. more on their latest results, next. this is bloomberg. ♪

>> chinese ev maker nio has reported a quarterly loss. the company said it is working on further cost-cutting and sales boosting measures. danny lee joins us now. what has been the investor reaction to those results from nio, you know, which there were some brighter spots and some less encouraging elements to? danny: let's take a look at the results here. a loss of an edge -- an adjusted

loss per share of two yuan -- you look to the future, this current quarter, revenues and delivery numbers are lower than what the street expects. that adds up to a kind of grim year these set of quarters nio has been putting investors through which is worse than expected. and missing on the expectations. this is a chinese ev startup which has yet to make money and has been going through what feels like a lot of challenges of late as some of its mirror competitors find their feet and gather momentum. >> adrs still rising a little bit. i guess they liked the idea of the cost-cutting strategy, but i wonder how much will they help? we had a guest earlier that was talking about how overcrowded the sector already is in china and the prospects of even going overseas are not really that great. danny: there is a lot of competition out there and even

some of the bigger players like byd, they are the biggest market player, still, from october to november, their sales were ultimately flat and they had to do a lot of cost-cutting. you think about the trickle-down effect some of the smaller players like nio, who are trying to fight in a very crowded market for a much smaller share of the pie, yes. adrs were ultimately up. the signal from william lee saying that they will do more cost-cutting and they have already done a fair amount of cost-cutting with job cuts. 10% of job cuts already put through. whether they will do more, we will have to wait and see. they also got their own independent manufacturing license and this is key for them to take control of production. they will not have to pay rather large fees to the likes of a motor company to reduce ev's in the future so there's hope in the future that by taking control of its manufacturing,

getting a better grip on cost, and bigger partnerships with its business, that it can look towards a brighter future. >> bloomberg's asia transport supporter, danny lee. nio and its peers will be in focus on markets open in hong kong and mainland china. investors assessing promises of further cost-cutting measures. we saw the gains in the new york session and we will see if those gains are sustained. a share buyback program worth as much as 700 68 billion u.s. dollars. a biologics company repurchasing shares in the open market, spending as much as $600 million. keep an eye on copper miners as well. prices slipped following moody's downgrade of china's credit outlook, haidi. haidi: take a look at how trading is underway so far in the markets that are already open. we are seeing the nikkei up by 1.4% there. broad rise across asian equities that further the story,

reinforcing that narrative that the federal reserve will be able to cut rates next year to prevent a recession so that fed cuts using narrative continues. the kospi is seeing slightly more marginal gains, .25 percent. australia seeing equities holding on pretty steady despite of course we did see third-quarter gdp numbers showing the economy actually surprising -- consumers come a bit of a weakness, hunkering down in the face of rising borrowing costs and some weakness from exports as well. that potentially adding to that hawkish statement we have from the rba yesterday, perhaps that the central bank here is done, too. this is bloomberg. ♪

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