shery: welcome to daybreak: asia. we are counting down to asia's major market opens. haidi: traders are holding back from big bets ahead of the u.s. cpi numbers. central bank decisions set to test hope's rate cuts are on the horizon. japan insiders tell bloomberg official see no need to rush to ending the -- president xi and china's top leaders begin their annual economic conference to set the 2024 growth target. shery: take a look at how u.s. futures are coming online. downside as u.s. stocks marginally rose in the new york session turned cautious trading ahead of a busy week of central bank decisions. s&p 500 index holding above the 4600 level. nasdaq 100 outperformed. we saw a rally in chipmakers. investors digesting more data from the new york fed survey showing consumers near term

inflation expectations dropped to the lowest since 2021. coming ahead of cpi data on tuesday and the fomc decision on wednesday. treasuries a little mixed tiered mostly fell led by longer end. 10 year yield slightly higher to the 423 level. would continue to watch oil prices. wti seeing a little bit of upside in extending the gains. steadying after seven weeks of losses. we are headed toward more reports coming from opec and mbia as well. take a look at this pressure on oracle which has reported disappointing sales. seeing slowing cloud momentum. we are also looking at hasbro. the announced the elimination of 900 positions. they had an additional strategic review. in january they had already said they would be limiting 1000 positions globally.

following. 40 gaining ground. they are cutting in half the production of the electric 150 pickup. this coming at a time of the industrywide pullback in ev investments. haidi: take a look at how we are setting up as we get into the start of cash trading in sydney. we have been listening to governor bullock speaking in sydney. talking in the q&a about the balance between inflation and keeping the job market steady. acknowledging it has been a hard year dealing with inflation and interest rate rises. she hopes things will get better in 2024. i know a lot of people particularly those struggling with the cost-of-living crisis will be hoping the same. michelle bullock saying she does think we can cool inflation while keeping the job gains and is nothing the rba is behind when it comes to the global cpi flight. little bit of commentary around

assets. some of the reviews the rba is looking to take around the payments and buy now pay later. flat start to trading in sydney. not seeing much of a move in the staggered start to trading. no moves when it comes to australian bonds. a lot of side letting going on ahead of the fed. investors not shying away from the three-month auction for treasuries. the yield had been climbing. not seeing much of a move in new zealand or australia. the aussie dollar holding steady. we will be watching keenly what we see out of the central economic work conference in beijing. what chinese leaders will be setting up for micro priorities. the signaling find the gdp target for 2024. whether that is going to suggest more of a fiscal pushes is going to happen. the other thing we are watching

is the boj. these oscillating expectations in terms of what they may or may not do starting from the meeting next week. official seeing little need to rush into scrapping the world's largest negative rate. they see potentially enough evidence of wage growth that would support sustainable inflation. let's get the views from our senior markets editor and bloomberg opinion columnist john offers. you have been writing and opining about this in terms of are they ready. they have been preparing the markets and investors. could they wait a little longer? >> it sounds as though from the latest briefing reporters have had it sounds like they want to wait somewhat longer. in the long term, the direction of travel is clear. it would only be in the result of a very serious disappointment

for the japanese economy in the next few months if we don't see rates turning positive at some point next year. as you were saying, the critical point is the wage negotiation, which in japan is generally frontloaded to the beginning of the year. if you have -- the last isil, the real wages in japan were following -- were following. the rebound in inflation has not sparked any rebound in workers enthusiasm for bidding up there wages. if you do see some further rise in wages. that would be the final signal the boj needs. if you don't, that would suggest japan efficacious -- japanification is profound.

i suspect the waves negotiations are going to be particularly critical. shery: as we wait for more clarity, what does this mean for the japanese yen? last week we heard from people who were saying it is too tricky to trade the yen. the incredible weakness this week. what are the implications for the currency? >> the implications for the longer term are that it is going to get stronger. that broadly speaking is what japan could do with. the level dropping beyond 150 and not getting it intervention to bring it back was quite surprising. it does show the be and is at an extremely weak over competitive level. the odds -- i've been reading

notes where people have been talking 120 or 110. that is a big shift from where we are now. it would appear to be justified if you think rates are coming down in the u.s. and europe, they will go up a little bit in japan. that does tilt the equation toward bringing money back if you are in japan. i think the fact the yen is so overextended, there is so much money in carry trade's 70 japanese traders have effectively bet on a continually weak yen. that is a big factor in the boj trying not to let this happen too quickly. it wants people to have the chance to addressed and repatriate rather than seeing a sharp vertical line on a currency chart.

shery: our next guest says the boj decision is live on a potential tweak to the yield curve control policy. joining us is a global strategist at wells fargo investment institute. great to have you with us. we have been surprised by the boj so many times in the past. what should we be watching out for in this policy decision? >> as mentioned a moment ago, the wage outlook is certainly important. live meeting has become a little less so in the last couple of days following comments from the bank of japan's governor about the wage outlook being comfortable with it. the fact real wages are declining. the japanese have a little room to maneuver given the slowing or

the growing prospects of rate cuts or expectations of rate cuts in the u.s. whether or not that transpires remains to be seen. that priced into the market i think gives the bank of japan more leeway to wait before making significant changes to the yield curve management policy that has been in effect. shery: how much of the yen's trajectory will depend on what the fed and chair powell say this week? >> it will be a mover if the u.s., the federal reserve keeps its power dry, it's monetary policy unchanged. that acts as a restraint on any yen rally going forward. we did see the yen improve and expectations the federal reserve might be cutting rates multiple times sooner than later. if that begins to change, the

japanese yen's recovery could be delayed as the market looks ahead to the wage negotiations and what effect that might have on the bank of japan policy. shery: when it comes to the fed, what are you expecting in terms of this week meeting and the dovish pivot that has been priced into the markets for this year? >> we don't expect to see the federal reserve moving to cut rates at this meeting. we think policy will remain unchanged. it is the commentary accompanying that decision that will be the focus of the market. if the fed hence at the -- the fed hints at a rate cut the early part of next year, that would be tantamount to an easing. risk assets would respond well. the fact is the u.s. economy is losing momentum. complicating things is the fact a recession still is something of a question market.

we could be going through a soft landing. if that is the case, the federal reserve is on hold for some time. shery: even the optimism under the markets, how much would you say a potential earnings challenge ahead is priced in and what are the risks stemming from the fact the monetary policy drag could be bigger going into next year? >> i think policy drag could be there if the fed is on hold as expectations adjust to that. the bigger hurdle we continue to believe for the market is the possibility of a slowdown in the economy during the early part of the year producing more sober earnings expectations by the market. you really have not seen that in a big way. the market we feel is optimistic on the earnings outlook for 2024 given what we believe to be a slowdown during the early part of the year. that could be the biggest hurdle

for the stock market over the next several months. shery: how are you positioning your portfolio in terms of risks especially when you're looking at large caps versus small caps? developed markets over emerging markets. >> we are staying with our strategy we have had in place for some time. we continue to favor the u.s. market over markets overseas. that could change as we pull through a slowdown and begin to emerge. we in the global economy. for now the focus is on the u.s. the focus is on quality, healthy balance sheets, resilience of earnings. typically larger stocks by sector we are focused on health. care which is defensive. . we also are favorably viewed toward raw materials. materials sector and industrials. these are economically sensitive sectors of the economy but we think the fundamentals are strong enough to whether the

moderate slowdown we are expecting. and continue to hold up well during that period based on the fundamental. shery: always good to have you with us. global strategist at wells fargo investment institute. coming up, a deal at cop 28 coming under fire from some countries. we will discuss the implications later this hour. first, china's annual economic board conference is reportedly underway with 2024 is growth target getting focus. we will get the details. this is bloomberg. ♪

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haidi: chinese president xi jinping and other leaders have begun their annual economic work conference and will set the nation's policy agenda for 2024 and expectations are running high for an ambitious growth goal for shore up investor confidence. our greater china senior executive joins us from beijing. this is a pretty mysterious but closely watched process. depending on what we get, it could signal the willingness for fiscal and monetary policy support in 2024. >> the thing the leaders will do during this meeting is set a

growth target for 2024. that will be important in terms of setting a tone for the overall economy. if they come out of that meeting with a 5% target similar to what we have two this year, that would be a more ambitious target because the base of comparison would be greater in 2023 then it was in 2022. that would signify an ambition. it would signal to the rest of the government beijing wants everyone to do as much of they can to get the economy growing again. it would prevent the vicious cycle where bad economic data leads to lower economic targets, leads to even worse economic data. haidi: technological decoupling obviously is one of the many headwinds facing the chinese economy. we heard from the congress -- the calmer secretary the u.s. is looking into the specific of not just huawei's chip breakthrough but the three new artificial

intelligence accelerated developed by nvidia for china. > that is what we understand from the commerce secretary gina raimondo looking into the chips nvidia is designing to sell to china. they announced that in november after in earlier chip they had made substantial sales to china already was banned under new u.s. sanctions imposed to limit chinese access to the most cutting edge technologies in the semiconductor space. companies are running into this issue. various american companies. taiwanese as well. trying to find ways around it but working with governments to do that. haidi: nvidia seeing vietnam as a potential second-home. no president xi is -- we know president xi is due to land in hanoi. we are seeing the latest in a string of charm offenses. what is he hoping to achieve

with communist vietnam? >> i think it is notable to point out that president biden visited vietnam a couple months earlier. so you have a country in southeast asia trying to strike this balance between the united states and china. china is vietnam's largest trading partner. at the same time vietnam and china have a rocky relationship. they have competing claims in the south china sea. vietnam has tried to use the united states as a counterbalance to china's military and economic weight. xi jinping coming to vietnam trying to make sure vietnam is not moving too close to washington as china is trying to keep its trade relationships open, economic relationships open and maintain the security situation in asia. haidi: our greater china senior executive editor. taking with china, the country has launched an investigation into the potential security

risks later to geographical information going overseas. an article published on a state social media accounts as software used in important industries has been sending and collecting data overseas. some of the information includes state secrets related to pipeline networks and military facilities. you can get a round up of the stories you need to know in today's edition of daybreak. terminal subscribers can find that on dayb . you can customize settings so you just get the news on the industries and assets you care about. this is bloomberg. ♪

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shery: top stories we are tracking this hour. microsoft is teaming up with

labor unions to create an open dialogue on how ai will impact workers. under the partnership, the tech giant will provide training on how artificial intelligence works and gather feedback from certain sectors this marks the first formal collaboration on ai between the tech industry and unions amid concerns it could displace workers. bloomberg has learned macy's received a nearly $6 million buyout offer from our kelce management and brigade capital management. sources say investors offered $21 a share for the retailers. the offer comes as macy's readies for a changing of the guard with ceo jeff jeanette retiring in february. retailers have lacked the overall rally this year in part due to higher interest rates. bloomberg has learned bank of america has promoted 334 of its employees to managing director. 8% fewer than last years total. one source says for the fourth year in a row, more than half of

those elevated to the senior role are women or people of color. wall street banks have pledged to improve diversity as competition for top talent heats up across the industry. steve cohen's point is bulking up its macro trading teams. the company says the unit will soon have 51 such teams with two new hires joining next year. that is five times the size from three years ago and comes as point72 diversifies its $31 billion hedge fund business. morgan stanley and chief u.s. equity strategist mike wilson saying u.s. company earnings are likely to weaken in the fourth quarter before rebounding next year. he spoke with lisa abramowicz on his stock addictions for 2024. -- stock predictions for tonight 24. >> it is really about the stock predicting.

it is kind of a strange year in that regard. their earnings forecast for the average stock turned out to be dead right. we have had these 10 or 20 or 30 stocks which have done extremely well. they have done an incredible job of cost-cutting. which has driven the major average. we think the dynamic will predict -- will persist next year for at least the first two quarters. meaning smaller businesses will continue to struggle tiered next year when we see inflation bottom, that is when the earnings will come back. that has been the trick. inflation has been coming down which usually has been good for bond yields. it is not good for inflationary assets which are small-cap stocks and average stocks. average stocks do better when inflation is accelerating.

that has been the trick this year. there were many people recommending small-cap stocks. financials and cyclical stocks. those don't work when inflation is coming down. >> what you outlined raises a question about the 4500 target at the end of next year. is that assuming the big tech cannot keep weeding. that there might be a recovery of some of the other stocks but that there will be at least in stasis for the tech names that account for the lion share of a lot of indexes. >> this year has been about expansion. this is a year also when rates have gone up for most of the year until recently. that is a combination that is unusual. i recall at the beginning of this year was rates had normalized quite frankly. they were going to continue to normalize.

and therefore multiple should normalize. the difference between our price target this year and what has transpired has been all multiple. without the market would close the year at 17 times earnings. instead, multiples are 19, 19 .5 times. all we are seeing it is -- all we are saying is multiples will adjust this year. the multiples have been training in place. there will be some. they continued to deliver in butter earnings. the cost-cutting story is not going to be as easy given the tough are i don't want you to move. i'm gonna miss you so much. you realize we'll have internet waiting for us at the new place, right? oh, we know. we just like making a scene. transferring your services has never been easier. get connected on the day of your move with the xfinity app. can i sleep over at your new place?

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haidi: westpac consumer

confidence for australia crossing the bloomberg. seeing the seasonally adjusted month on month number for december coming in at 2.7%. reversing the earlier contraction i the previous month of 2.6%. the december reading headline number is 82.1. climbing from 79.1 we saw in the previous reading. expectations saw an improvement of almost 4% month over month. when it comes to family finances or household finances, also seeing an improvement of 6% month on month. even a little bit of a gain versus the year ahead. expectation is for the economy one year ahead seeing a fall of 2.2%. five years ahead, seeing a gain of 9.7% p the purchase of major household items falling 3.8%. this as we see consumer confidence edging up in december after the rba resumed their rate because.

still holding deep in pessimistic territory. shery: take a look at the broader markets because you can see the aussie dollar under pressure. we have seen that pressure given the weaker chinese data we have seen should the weaker -- data we have seen should the weaker yuan data as well. it is six 200 up a 10th of 1%. not doing much at the moment. kiwi stocks also declining for a third consecutive session. setting up for the japanese session with nikkei futures up a 10th of 1%. not a lot of movement in u.s. futures either. haidi: investors looking ahead to key central bank decisions. after the most aggressive rate hikes in decades. that change cannot come soon enough. businesses, house's and certain

economies would be looking for this to happen sooner rather than later. >> there has always been this tension even as economies are spending, we are remaining resilient like the savings pull from the covid era. there is also the worry that part of what helped bring up the savings paul was during the covid area interest rates were at record lows. people and businesses did a lot of borrowing to lock in the costs. every month we head forward with interest rates elevated where they are is a monthsinesses

>> how precarious is the situation for corporate america if you take a look at the amount of debt? >> that is the big concern because there is a lot of debt that is maturing. not so much in the first half more toward the back end. part of what happened was they were trying to reverse was a lot of companies shortened the duration of their exposures because that was where the cheapest money was available. every the uncertainty when you were in the midst of the pandemic. looks like things are going well now. we are not sure how much longer that will go on for. we are not sure how much longer the government and central-bank will be there for us.

it made sense to borrow a lot. it made sense to borrow on a shorter timeframe than might otherwise have been wise. that adds to the dangers as you are going shery: forward. shery:our chief rates correspondent for asia and mliv contributor garfield reynolds as we keep and i on the health of the global economy. we are hearing a u.n. agency has seen global trade declining in 2023 about 5% from last year. according to the conference on trade and development cometh , that is due to higher borrowing costs. it estimates the goods trade will hit 37 trillion this year compared to 32 trillion in 2022. it noted geopolitical allies tended to trade more with each other. let's turn to the outlook on

business deals. citi's institutional client chairman says environment for mna should start to get better after 2024 after a muted year. more on the state of the investor appetite for deals. >> investor appetite is there absolutely. they want to see the strategic rationale. they want to understand the timeframe to close from a regulatory standpoint. obviously if it takes two years, they have to factor that in from a present value standpoint. . they want to see what the value enhancement is. the investor reaction i think will continue to be something everyone focuses on. so far, strategic transactions have done fine. the issue has been long-term regulatory impact and how long will it take and what will be the legal issues to get from here to there? >> what about industry because other big elephant in the room

we have not talked about as occidental. $10.8 billion deal. you're starting to watch mega deals back in the market. two the top three deals this year so far have been mega deals in the energy industry. is that what is going to drive m&a in 2024? >> i think the environment for m&a should start to get better. you have had a muted year. it has been muted because of the uncertainty on the economy. uncertainty on interest rates. uncertainty from a regulatory standpoint. those hurdles are starting to go away. you still have a 10 year that has not yet gone down. it has not broken 4%. financing remains somewhat expensive if people have to do it. the equity markets from my standpoint are at highs. the use of equity becomes very attractive. you will see more transactions that are large. there is no doubt those discussions are taking place right now. the board rooms and chief executives are feeling more confident about an economic outlook and a pricing they can act on. i think next year should be

reasonable. the other side of it will be an ipo market whose opening i think continues to get delayed. haidi: cities institutional clients group chairman with sonali basak. coming up, we have the latest when it comes to cup 28 in dubai. delegates wrangling over a deal to cut fossil fuel consumption. a climate diplomacy expert joins us next. this is. ♪ first time i connected with kim, she told me that her husband had passed. and that he took care of all of the internet connected devices in the home. i told her, “i'm here to take care of you.”

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shery: you're watching daybreak: asia. a draft deal calls on countries to cut their consumption and production of fossil fuels. the agreement would be the first to call for the reduced use of all fossil fuels include oil and gas. many countries believe the deal does not go far enough offering loopholes in opt outs.

let's bring in the head of research. what is your assessment of the draft communique? >> the language being used is weaker than earlier drafts that have included the -- at the same time, this is the first time you have language calling for a reduction in production and consumption of fossil fuels. the progress is not as much as what some stakeholders such as the european union in developing nations such as marshall islands were calling for. one step forward. one would argue -- some would argue two steps backwards. haidi: how much do we need to reduce consumption on fossil fuels realistically to meet paris agreement goals? >> the good news is for coal, we expect we are already at peak consumption.

in our scenario, by 2050 we have to make sure consumption is reduced by 68% relative to 2022 levels. for oil, we would have to reduce consumption by 75% relative to 20 levels. enter make sure peak oil can some -- and to make sure peak oil option happens by 2024. for gas we have to make sure consumption does not go back up to pre-pandemic levels. we have to make sure the peak happened by 2019 and reduce consumption by 2050 by about 50% relative to 2022 levels. we have the technology needed to manage the trajectory. we just have to make sure we accelerate these technologies. shery: overall, how successful would you say this year's cop has been? >> pre-pop, -- pre-cop, we did a deep dive into analyzing the key

areas up for negotiation. our pre-cop assessment, we gave it a score of 3.6 out of 10. then we saw a little more momentum for progress particularly in it came to loss of damage in the initial language of fossil fuel. we increased the score. we have to see what happens today to give the final score. i own personal opinion would be that -- my own personal opinion would be we had a relatively successful cop. recognizing we had some of the first initiatives this time around. this is the first time we had health minister's involved to discuss the negative impact of climate change on human health. we also saw a bout of new ground broken at dubai around the negative impacts on food systems. really good progress in these areas. we have to recognize there are imperfections in a process requiring unanimous consent from

198 countries which have very different sociopolitical circumstances. i would still consider it a success. haidi: the bloomberg nef head of aipac research. let's get more perspective on the climate conference impasse. our next guest who attended is the cochair of the integrity initiative. i will start off where we left off the conversation. do you consider cop 28 to be a success? how would you rate this year's summit? >> the summit in two halves. we have to remember the text he was discussing and that is before the delegates is not agreed yet. in these kinds of multilateral negotiations, nothing is agreed until everything is agreed. there are still hours of

wrangling over the details and the precise use of words. at the front end of cop, there were 72 hours of announcements. it is true the uae has broken through the two lt of public money from the club will north -- through the duality of public money from the north. the uae putting your capital on the table, financial innovation on the table i think the conversation around finance shifted a little. at the end of the day, what delegates were talking about was a report they author that said we are not on track. the text before delegates right now does not put us back on track. i think that therein is the problem. we have made progress but until we are closer to being on track to really wrestle with global

heating, i don't think we can call it a success. haidi: we heard from the australian energy and climate minister speaking on behalf of the umbrella nations including the u.s. and u.k., norway and canada saying they could not as the draft communique and wording stands sign this on behalf of the smaller nations. that are pleading for more action. this has been called by some as basically a surrender note. is it possible to find middle ground to progress this at all? >> yes. they will find middle ground. it must sound very satiric to the layperson -- very esoteric to the layperson of the argument is over verbs. are we noting a report that things are bad or are we urging each other to act more? that is where the discussion is. there will be discussions around the exact framing of the language of production and consumption of fossil fuels.

but there were also be a lot of things that get pushed to the next round of negotiations including issues aroun the details for how carbon market and work. some of the detail about what the global goal for adaptation is. they stand a chance to agree there should be a goal in adaptation and not just mitigation. the exact details still need to be worked out. there is an awful lot of detail that is being pushed to technocrats in the year to come. haidi: when it comes to directly calling out the burning of fossil fuels, do you think that effort given there were 80 countries at one point that already supported using the wording, do you think that has been made cop located by the hosting of comp 28 in dubai at the proximity to these oil nations? >> not necessarily. i and others commented the first half of this year that because the uae's extraordinary progress

over the last few decades was in large part due to its wealth from fossil fuels, it understood the industry. it also understands renewable energy industry and it was poised as potentially a power that could bring people to the table. it has been quite clear including a letter signed by the opec secretary-general that within the oil-producing countries, there has been a significant push back against the likelihood of agreeing clear language on production consumption or the phaseout of fossil fuels. there has been lots of negotiation around whether the should be abated or unabated. there we are going to finance it continued production but we are going to capture and store all of those emissions. are we talking about fossil fuels themselves or are we talking about the omissions that come from them? all of the diplomatic shenanigans flying in the face of what the science is saying. especially the most vulnerable nations which is this phaseout has to happen quickly.

need to reduce emissions to 45% by 2030. haidi: are you optimistic we are going to get there? you have written about and spoken about the fact we are running out of budget quickly. that emissions need to come down fast. the energy transition needs to come sooner. we need to be operating at a much bigger scale. can all of that come together ? >> i think the investment in renewable energy and the doubling in energy efficiency which the vast majority of companies have agreed to is a good thing. the money is there. helping the money flow specially into emerging markets is essential. as bloomberg nef and others who analyze what is going on in the energy sector your note, we can always outperform the best estimates of how quickly the green economy can grow. well that grows, we have to phaseout emissions.

i am hopeful. i don't think i am an optimist. haidi: great to have you with us. cochair of the voluntary carbon markets integrity initiative. shery: we are getting breaking news out of japan. producer price index numbers coming in. year on year growth of .3% for the month of november. which is beating economist expectations of growth of .1%. this is a slow down the previous month of .8% growth which was already at the weakest level in over two years for the month of october. producer prices have continued to decelerate. what that means is it gives more support to the back of japan's view inflation is cooling down and input put prices getting below the boj's 2% target is not really boding well for expectations that we can see inflation pushed up sustainably. when it comes to the month on month number, and expectations

of .2% growth for the month of november. we have more to come. this is bloomberg. ♪

shery: bloomberg intelligence sees the dominance of etf's growing with new entrants set to erode the market share of the big three. for more on the outlook for etf's in 2024, let's bring in our bloomberg intelligence analyst. what other regions could be of interest in 2024 when it comes to the dominance of etf's? >> i think in asia pacific there are five regions we are looking at. one is japan. we expect bank of japan will purchase less etf's in 2024. if we look at 29 23, it is a record year for them. they only purchased an etf three times. with governor ueda, we expect the trend will continue in 2024. we've and see no etf purchase. in japan we are going to expect more organic growth coming from the market. japanese dollar is cheap

relative to the u.s. dollar. we are seeing a lot of foreign investors invest into japan to japan as one of the leading regions with returns that have done very well. the nikkei has outperformed. japan launched for the first time ever active etf's in september. we expect to the active etf's will be one of the big trends that will help push the japanese market. the other market we expect to do well is china. china has seen a lot of the medics etf's this year. -- let a few medics etf this year. we expect themes to continue to do well. the csrc has been supportive of the landscape. they reduced approval time from six months to three. in china, they have tried to speed up the etf approval process. that is why they have so many etf's. we have seen china launch the most etf this year. in other region we expect to see

a lot of growth is india. india has a population -- more than half of the population is under the age of 30. they have been very progressive toward etf's. this fund market is very small. the only have 30 billion in assets. we can see them becoming a top five player and asia-pacific. the region we expect to see a lot of growth is taiwan. taiwan has surpassed australia in assets under management should they ranked third with more than 100 billion in assets. we expect that trend to continue very well next year. haidi: r bloomberg intelligence etf analyst. the start of trading in seoul and tokyo next. this is bloomberg. ♪

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shery: this is daybreak asia counting down to a shows market open as investors race for big decisions not to mention eco-data. muted markets on wall street, awaiting the cpi number and fomc decision. haidi: not expecting big bets. key data, key decisions, looking for signaling from global central banks as to when we might see rate cuts and out of bank of japan going into next week. shery: so much speculation about where the boj is going that the volatility in the yen has been incredible. we had strength last week and we saw weakness as well. look at how we are coming online, the yen holding against

the u.s. dollar as we saw it extend losses against u.s. dollar in new york session. last week's rally went too far and sources telling bloomberg's that officials see no need to scrap negative rates. headed toward a boj decision next week. the nikkei is up 1% and 10 year jgb is holding at .77%. november growth year-over-year the estimate was .1% but we are seeing prices decelerate. this is supporting the boj view that inflation is cooling. the kospi us up 4/10 of 1%. little change in the previous session of course we've seen more positive data out of south

korea when it comes to trade numbers. the korean yuan holding ada 1350 level so are seeing more strength after we saw it fall given caution around fed policy decisions later in the week. haidi: take a look at trading in australia. we heard from michelle bullock earlier saying it's been a tough juggle between keeping market gains in pushing back on the idea that the rba is behind the world and optimistic going into 2024. a flat session when it comes to trading. if you look at the breakdown there is not much conviction if you look at gainers versus weaker segments.

energy is where were seeing weakness and health care as well. not much of a move when it comes to yields in australia or new zealand after investors shied away from the three-month bill auction. lackluster demand overnight as well. demand for the 10 year looks resilient when it comes to treasuries but a lot of action away from the main ray as we wait for the fed. the 60 hour window of power is what were setting up for. our next guest sees equities rising and strong earnings growth. they are the regional cio at ubs. great to have u.s. we look into

the last few weeks, importantly for investors you are positive on the rates into the new year. >> absolutely because valuations in asian equities are cheaper and we can expect the dollar to weaken next year. strengthen the dollar has been one reason why asian assets have underperformed. we expect euro-dollar to trend two 112. that should be a strong catalyst for asian assets in 2024. haidi: how much upside do you see for china? the central economic conference is taking place. do you think stronger monetary policy support, we will finally see a turnaround for chinese equities? >> we don't think the chinese

economy has bottomed out but a strong recovery will happen in the short term because fiscal stimulus is on the light side. we don't see heavy stimulus in the chinese economy will not stage strong recovery. for chinese equities to perform, the property market needs to recover. and signs of recovery have been week. soa developers are doing well but private developers are not doing well. sentiment is more positive where equities are concerned haidi: i'm looking at themes and it's an interesting combination. still looking at blue chips so what are key themes and given markets like japan and india

have been the darlings of this year. >> yeah, we like to focus on quality. blue-chip companies with strong balance sheets, good cash flows are the ones to look out for. we expect rates to come off but not as aggressive as the market. we expect rates in the u.s. to come off by twice which should be positive but where the boj is concerned we do not expect them to hike soon or reverse the negative policy because growth is unique and japan. the latest numbers are not strong and we don't think the boj will risk the watts in 20 years chance of inflation coming up. i'll think the risk that, they like to be more cautious.

we think where japanese equities are concerned banks are the ones you should look out for because 10 year yields rise and 30 year yields go up, there could be more buying of these bonds from pension and retirement funds. haidi: how do you play ei -- aaii should say given the run-up and over exuberance in the u.s.? >> we play via the internet sector. we forgot some conductors. stocks are looking pricey so we think that for the tech sector, we think that it should play out

better in internet and software. basically companies that are not in the hardware space. better operating margins as well. haidi: as you've talked about the new paradigm involves risks that have not faced asia before. what do you see as key risks to talk about next year? >> yeah, i think the risk is if inflation does not come off as quickly. the market is aggressive in pricing rate cuts and the market might be disappointed the first couple of quarters where that is concerned. then you see a strong rally on the u.s. dollar because the u.s. dollar has weekend. it was almost at 110 against the euro. any pullback is likely to be

negative for asian markets but if it happens in the first or second quarter that should be a very good time for asian assets. where the second half of the year is concerned the federal reserve will have to cut rates twice and that will be positive given the correlation between dollar and asian assets space. haidi: what do you see in terms of growth across private markets in asia? goldman is doubling the size of their unit to take advantage of a bullish outlook. does that change when we have a change in monetary policy? >> no, that is the start of a longer term trend and there are family offices in asia that are more sophisticated. the private alternative space is a space that a lot of them are

keen upon england private investment can reduce the risk of volatility. that is key and increasing name they are adopting this endowment approach where you have not just bonds and equities but strong allocation toward private equity and debt to reduce volatility. it's not a flash in the pan but start of a longer term trend. haidi: have a great rest of the year. regional ceo at ubs in singapore. still ahead the british chamber of commerce has a report on business sentiment. whether we've seen an improvement in sentiment. plus the details of goldman

sachs reshuffle of executives. seeking to double the size of the $110 million business. bloomberg. ♪

♪ shery: you're watching daybreak asia. xi jinping and other leaders have begun their economic conference that will set the policy agenda in 2024. expectations are high to shore up investor confidence. john leo joins us from beijing. how important is the central economic conference in setting plans for china and what are we expecting? john: this could be key for china's ability to turn around the economy is not just a target that communicates priorities. we get a high target, 5% as we have for 2023, the relative

basic comparison of 2023 will be higher than 2022 so officials if they're going to meet the target will have to work harder, be ambitious, trying to do more and try to get to 5%. it's a powerful way for the government to communicate that this is the goal for 2024. haidi: we are hearing from u.s. commerce secretary about the strongest action when it comes to chip breakthroughs. this could be a setback when it comes to the broader economy. john: semi conductors has been the most important choking point the u.s. has had with china. before sanctions dependent on taiwan, korea, netherlands, united states for the technology and now that that has been cut

off we see companies taking a substantial hit. they used to sell more phones than apple and now the business has been decimated. when it comes to limiting chinese access to technology that will be a focus for washington and the thing that china wants to overcome the most. shery: with ongoing tensions were seeing the chinese president making his first visit to vietnam. how significant is this? john: it's important to note joe biden visited vietnam a few months ago so this is a country trying to strike a balance between the u.s. and china. china is its trading partner but it is a rocky relationship with competing claims on the south china sea. they fought a war in the 70's so there are security concerns. vietnam try to use the united

states as a counterbalance. china is trying to make sure vietnam does not get too close to washington. shery: greater china senior executive editor john with the latest on china as we look ahead to the start of trade there. stocks staged a recovery on monday with the csi 300 reversing 1.6% loss to close 6% higher. a jump in trading activity for etf tracking shares. chinese shares missed out on the global equities rally last month but a recent meeting disappointed traders. china smallest and most volatile stocks have become impacted for investors. the segment has become the loan gainer in chinese equities. let's get more from our stocks reporter. we seem confident slump when it

comes to chinese assets so what is going on? jeannie: it is kind of like very bizarre to a lot of investors to be honest read this market actually headed into bull market this year when everything else in china is has been plunging. one of the key themes is the policymaker that have medium caps in china and all the components are all those things. when xi jinping voiced support they got retail money inflows into those names. there is a policy driven equity

rally of more than 20%. haidi: we also waiting for the outcome when it comes to the central economic work conference that is the gdp target and what that tells us about confidence and policies of work. could it support the a turnaround for the broader market in china? jeannie: for the key take away from the conference will end on tuesday but his government to

set growth targets at 5% which is not surprising because this is what investors has been expecting. the key thing is how they are framing policies, this is one of the key thing. the other thing is how strong physical support can be for next year because we seem shares plunging yesterday and on friday because part of the reason is investors don't see the assurance that beijing will launch big stimulus support for the market and economy. this is one of the key overhead for the market at this moment so we are hopefully we can get some key takeaways from the central economic work conference and that is going to you know help investors to remove gray areas

in the market. then have you know a better idea of how the index can go, either up downward at this point. shery: asia stocks are poorly -- reporter jeannie as we look ahead to trading across asia. we will watch chip stocks after the philadelphia semi rose to the highest level since january of 2022 and we had chipmakers like intel outperforming. take a look at makers we will be watching across asia given that oracle is slowing for a second straight quarter so that will be felt across asia.

bitcoin is stabilizing finishing the day with the largest rally. with the latest drops we saw liquidation and bullish bets so that sent the crypto market into turmoil. haidi: we are getting an update when it comes to the alphabet legal battle with epic games. alphabet lost the antitrust fight and they will be facing off in a san francisco court is the trial was nearing an end. alphabet lost the trial. a federal jury had to be

convinced to reject antitrust by epic games in a case seen as a threat to transactional fees imposed on app developers. lawyers for alphabet, google and epic games made those statements after more than one month of this trial and epic games said that google spent billions to block alternatives to be lucrative play store. much more to come. this is bloomberg. ♪

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shery: you're watching daybreak asia. city banks group chairman says the environment for m&a should

get better after a muted year. they told us more about investor appetite for deals. >> investor appetite is there, they want to see strategic rationale and understand the timeframe because if it takes two years they have to factor that in and they want to see the value enhancement. investor reaction will be something everyone focuses on but strategic transactions have done fine and the issue has been long-term regulatory impact, how long it will take and what will be the legal issues. >> what about interest rate because we have not talked about the 10 point $8 billion deal. mega deals have been two of the

top three deals in energy. without drive m&a? >> the environment should get better. it's been a muted year because of uncertainty on the economy, interest rates and from a regulatory standpoint. those hurdles are going away but you have a 10 year that has not gone down so financing remains expensive. on the other hand the equity markets are high so use of equity becomes attractive. you will see transactions that are large. no doubt those discussions are taking place now and boardrooms and executives are feeling more comfortable about economic outlook and pricing that they can act on. next year should be reasonable and the other side will be an

ipo market whose opening gets delayed. haidi: institutional clients group chairman leon with bloomberg. european futures opening up, it's a big week for central banks more broadly. a 60 hour window power for those decisions and this is the start of trading in the future session. futures are seeing upside and we could see a year and rally and german dax futures up by attempt of 1%. european stocks are holding their highest since february 2022. a week loaded with central bank risks and key e-gov data.

♪ shery: seeing stocks and

japanese currency's boarded with the yen holding against the greenback. we've seen a lot of volatility in japanese currency and speculation about what the boj will do. bank of japan officials see little need to rush into scrapping negative interest rates. let's bring in government editor paul jackson. is that setting us up for no change next week? paul: it is setting us up for no change. but let's be clear, the end of negative interest rates is coming. we think it's going to be next year rather than this month from what we're hearing. boj official see no need to rush the decision. they've spent more than one decade with extraordinary

stimulus programs, it would seem odd to rush in the last minute. if you look at the logic of what they are saying, we've had bad inflation in japan or good inflation supported by wages. they want more evidence that wage growth is there. we have negotiations between unions and companies with results in mid-march. so the logic suggests that the best time for this change would be april, a month when it releases forecasts. it also does in january and july so those are other possibilities. april should be the main case with a risk scenario of an early move in january.

haidi: how much volatility could we see across global markets depending on timing? >> well, there will always be volatility heading up to the meetings. markets will be on edge. taking advantage of markets momentary expectations that nothing is going to happen is something boj has used. that has been on tweaking the why cc complicated stimulus program. something more hard-core like short-term interest-rate, negative interest rates, major global banks globally, they are

going to be more cautious about signaling this. do not forget the governor is the godfather of forward guidance, the one who brought it on board originally. shery: what is the economic data out of japan telling us because we got producer price numbers surprising to the upside but were still talking about easing to the lowest since 2021. is this giving more support to the assumption inflation is cooling? >> let's face it we just had data showing the biggest contraction since the pandemic over the summer so really would a central bank want to raise interest rates after so long when the most recent data shows

the economy in reverse, going backwards. haidi: bloomberg japan economy editor paul jackson. this is what we're watching when it comes to broader markets. not a lot of risk-taking. we have an extremely busy week ahead of us, not just central banks but key data. u.s. inflation is one of them. muted gains, japanese stocks up 7/10 of a percent. the kospi up in australia. tech names are leading the gains in this rally. we have a strong opening for hong kong when trading gets underway. a benign start to the trading week.

for australia we are digesting data showing that confidence is getting hit by households as well as broader consumers and businesses. business confidence number plunging to an 11 year low. consumer sentiment is holding in pessimistic territory. shery: really chinese assets have taken a beating recently. we are looking forward to the open of trading in mainland markets. british businesses responded positively to greater engagement from chinese government according to a survey conducted by british chamber of commerce in china and set to be released in a few hours. let's get insights from julianne chamber in china. thank you for joining us. how much of that sentiment is translating into decisions for business? julian: we assume a mixed

landscape, less speculation and more pragmatism. top reasons we saw for investment where aligning government strategy and demand for products and services which is an improvement on previous years. shery: latest survey say businesses are increasing spending on r&d. which industries are they interested in? >> we are seeing investment in health care and energy. that covers a lot of the report. the government is putting investment into health care and wants to work on energy security. those are too bright spots. shery: when talking about

business in when talking about business in china what companies are we talking about? larger caps or smaller and medium? usually smaller companies take the brunt of any slowdown. >> that is true. we run the survey every year and this is the biggest response we've ever had. british businesses of all sizes including the ftse 100. smes are struggling. over 50% have not hit the revenue level of pre-pandemic. -- are doing better than pre-pandemic so it is a split between core business and multinational. haidi: what is the biggest topic of worry? geopolitical concerns, internal policy changes? or the fact that the market is slowing? >> there's been a dramatic shift

from last year. last year we saw a record highs in pessimism from british businesses around covid. now we are seeing three major concerns. one is chinese economy, the second is geopolitics, increasing nationalism in purchasing. and the global economy. one thing that surprised us with the survey was 60% of british businesses that it was more difficult doing business now than last year. that reflects that for businesses last year there was uncertainty around operations and other is real and the around revenue. haidi: what would you encourage from the perspective of policy? and overtures from the chinese government to be able to win back confidence? >> generally one thing that was

a bright spot from the chinese government perspective was real positivity toward government action. looking to encourage direct foreign investment. from a british standpoint when we released our paper in may we said conditional optimism and that still stands. they covered issues we've been advocating for, now it's about implementation. shery: what about regulatory concerns because we've seen stricter laws around data flows causing anxiety. is that we are feeling from members as well? >> for the first time this year security data flow the number one concern in terms of challenges. number two was the transparency of the business landscape and number three was enforcement of

regulation. we have two new entrants into the top five. when his moving finances and the other is licensing. these are practical concerns around licenses. if business cannot get licenses to operate they will not do business. these are simple areas to address. shery: form and while during the covid pandemic and lockdowns in china we had been asking business chambers about their members trying to move into other regions and build redundancies. is that still part of the rhetoric among your members? >> certainly one thing we saw during covid was previous to the pandemic china was number one or number two. now it is three or four.

[inaudible] shery: julian if you had to pinpoint one concern next year what would be the biggest challenge for these businesses in the country? >> i think in china everything comes to the government and they'll be looking at the response to the economic slowdown but also engagement with the u.k. government. i think there is concern that china may become a political football. so hopefully there will be frequent visits to show normalized relations between the countries. when we want certainty doubt is

around responses to the downside of the economy and geopolitical relations. haidi: chair of the british chamber of commerce in china, great to have you with us. more to come, this is bloomberg. ♪

♪ shery: you are watching daybreak

asia. goldman sachs is reshuffling executives in its credit union as it seeks to double the size of the business. su keenan joins us and we know goldman has a large private credit arm. su: it is unique to have such a large size hundred 10 billion and now they are seeking to double that. it dwarfs their closest rivals so what goldman wants to do is take advantage. as the biggest opportunity across the alternative space, private equity. goldman has let other big banks such as jp morgan and barclays leave them in this market. there private credit arm dates back before the financial crisis so the strategy has been to

house the franchise within its asset management division. greg olufsen is being promoted. james reynolds becomes the head of direct lending and have sterling becomes global head for investment grade private credit. there's been a lot departures at the senior level at goldman with restructuring going on. these are significant changes in an area of the bank that generates major revenue. the changes, as it seeks to take advantage of the fact that they had the lead and it comes at a time when rivals are struggling to response in what is a rise of a new asset class that completely competes with their leverage financing business. a situation of get in or be

competed with and goldman is in the lead. they are all in. haidi: one sign of the rise of this asset class is the trend across a pack. su: there is a statistic where 62% of investors in a pack plan to increase allocations in private equity. that comes from a survey. almost half of private investors plan to increase their target allocation to the on $.6 trillion market and investors have been flocking with banks and asset managers, pouring capital and resources into this industry, private equity. it has a lot to do with higher interest rates which boost yields on floating-rate products. asian investor interest rate has

been treated to portfolios, regulations and capital controls. in the survey found 45% of investors thought the current interest-rate environment is favorable. 36% say the effects of higher interest rates are yet to materialize. private credit winning out, back to you. haidi: bloomberg's su keenan. morgan stanley cio mike wilson says u.s. company earnings will weekend before rebounding next year. he spoke with bloomberg's lisa on his stock predictions for 2024. >> it's about stockpicking. the average stock has not done well. it's a strange year. earnings forecasts turned out to be dead right and same for the

average stock. we have 30 stocks that have done well, they've done an incredible job of cost-cutting which has driven the average earnings up and away we did not project. that has been the difference and that dynamic will persist for the first two quarters meeting smaller businesses will struggle. maybe by the second half of next year we see inflation bottom out, earnings will come back. that's the trick. inflation has been coming down which is usually good for bond yields and disinflationary assets. it's not good for inflationary assets which are small-cap stocks and generally average stocks. i think that has been the trick this year. most have gotten it wrong because there are many people

recommending small-cap stocks and financials and cyclicals and those do not work when inflation is coming down. >> what you outlined raises a question about the target at the s&p for next year. is that assuming big tech cannot keep leading? there might be a recovery of smaller caps but there will be stasis for big names that account for the lions's share of indexes. >> basically this year has been about expansion and a year when rates have gone up for most of the year until recently. that is a combination that is unusual. our call at the beginning of this year was rates will normalize. they will continue to normalize. so the real difference between our price target this year and what has transpired has been multiple. we thought the market would

close at 17 times earnings. multiples are 19 and a half times so multiples will adjust this year. earnings will be fine but the multiple has them turning in place. there will be some that deliver better earnings growth but it will not be all of them. the cost-cutting story will not be as easy given comparisons on that front in 2024. shery: chief u.s. equity strategist mike wilson speaking with lisa. in the company seeing another good year for emerging markets but not without surprises. among them sovereign credit returns may hit zero as treasury yields rebound by the end of 2024. expect hard currency bonds to

return 14% while local currency debt returns 8%. haidi: top corporate stories, a jury ruled that googles app store maintained a monopoly in the payments market. it could jeopardize billions of revenue generated by the store. it deals a blow to the tech giant in its antitrust battle with epic games. microsoft is teaming up with labor unions to have open dialogue on how ai will impact workers. the tech giant will provide training on how ai works and gather feedback from certain sectors. this is the first formal collaboration between the tech industry and unions amid concerns they could displace workers. this is bloomberg. ♪

shery: you're watching daybreak asia. kiana's president says they are moving ahead despite a move by

venezuela. they will not be intimidated by minnesota less threats. nicolas maduro told exxon to leave in three months raising the possibility of armed confrontation. >> all the members of the consortium are moving ahead aggressively with production plants. all exploration will continue, all investments in the public and private belt will continue. there is no slowing down, absolutely no holding back in the investments in the regions. shery: occidental petroleum is acquiring a shale driller at a

deal valued over $10 million. it will close in 2024 subject to regulatory approvals. the agreement comes as executives face pressure from investors to keep dividends flowing as the north american shale factor matures. look at west texas intermediate gaining ground after rising in the new york session. studying in the energy markets after seven weeks of losses. the longest losing streak in five years. you had to opec reports. that is it from daybreak asia. bloomberg markets china open is next. ♪ about things like changing tax rates or filing returns. avalarahhh ahhh

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