>> you are watching asia coming live from new york, sydney and hong kong. counting down to the opening. >> australia has come online. and worst tumble. bank of america said the january route is now. >> and basing expectations to keep china's from taking top spots in global sales. and the search for answers after a firey airport that killed five coast guard crew heading to the country's earthquake zone. >> and we are seeing a little bit of weakness creeping through. and just to note for the level, 7, 632 and that would take us back to levels we haven't seen

august of 2021. and dropping 1% and unlikely to reach that mark. and look at an interesting call coming out from cti that we should continue in the first half and leading those gains in the benchmark. and fairly steady trading. and a lot of trading and that holiday season and trading volumes very thin to start 2024. and not seeing much movement in the currency space in bonds. and look at the rest of the region. we are setting up for weakness to come through. kiwi stocks back online. and looking little bit weak. andrew: going back to 2019. and consensus building around

the health of the chinese economy. japanese yen and little change and natural disasters to note in japan and japanese markets have shot until tomorrow. >> and stocks in the first trading session in 2024. and more and less futures coming online. and vix jumped the most and signaling about the pivot towards easing this year but seems like traders are trading those bets for this year 150 basis points, which is less. and treasuries falling. and 390 level and watching

corporate levels and apple. bark lays because of features and tough backdrop for the iphone. and jp morgan and banks and finished at the highest level on record. but we have the dollar index gaining by the most since march. that pressures the oil space and w.t. e! coming in higher of .2 of 1% and the escalating tensions in the red sea. >> and our next guest is easing tensions. joining us is the senior economist and market strategist. great to have you with us and great to be here with you. it sounds like a modeling for

this year. >> happy new year to you, too. our view is through a consensus and growth moderating and inflation moderating as we proceed through the year. but we are on the cautious side so we we have technical recessions. we think europe is already in recession and coming back to target in the u.s. that is a good news story and get there via a mild recession. >> when you talk about mild recession and even with the economic resilience across a lot of economies that hasn't been felt in optimism from households or consumers or homeowners. does that mean a technical recession will be felt by the consumers?

>> what the consumers are feeling right now is high inflation and bucket creep. higher wages push people into higher tax brackets and we are experiencing it pretty pawferfully. and consumers are a bit cautious and sectors are going to feel some pain and margins coming under pressure. and including the u.s. and obviously cost of living is front and center. and s.s., a couple of points away from an all-time high. do you think that is warranted for a market that is being driven by optimism over china? >> there is a lot of good news

looking across all asset classes. and saw powerful in rally markets and is dollar higher. and credit spreads tighter. a lot of optimism. and feels like we are coming into the new year and what we are seeing a the start of a reset perhaps. we have key u.s. data. and markets have moved a long way and pausing for breath and looking to the data and key indicators. manufacturing and service sector. another jobless and we have payrolls. i think and the other thing i would quickly throw in with the new year we are seeing corporate supply and supernational,

sovereign and we have the u.s. treasury coming back to the market as well and that is the reason. >> when you look at fundamentals the japanese market last year, are they still intact and bright spots that you are liking across asia? >> we are cautiously positive on japan. the data that i saw in december, high pay machinery orders were better than expected. our colleagues in tokyo are optimistic that a price wage spiral is starting to build in. and shinto will be a little bit stronger and paves the way to pull back on its extraordinary policy accommodation through january and april. a.i. g. were up, too. certainly more so for europe.

tech cycle looks pretty good and asian is pretty good. one area of caution across the broad asia region is really china. so we think china is going to remain subject par and dip. latest data is not encouraging. the first half of the year will be critical for china. >> this year, it's messy for elections, starting off with taiwan and ending november with the u.s. presidential election and a lot more in between. is that a risk that could turn things upside down? >> absolutely. there are a number of elections this year. taiwan is the perpetual low-risk focus we need to keep our eye on. the u.s. election is going to be

the focus over the coming months and the time we move towards the middle of the year. the possibility that mr. trump could be re-elected. the geo political isolationist policies that could fall from that, ratcheting of negative with respect to china leave material risks we need to keep our eyes on. >> happy new year and very interesting year. market strategist. still ahead, japan is reeling from a second disaster, a firey collision between a passenger jet and earthquake relief plan. this is bloomberg. ♪

>> crash investigators are searching for answers after the country's disaster and killed five people.

>> you mentioned. and we are seeing travelers still stranded and awaiting other flights to resume and domestic flights about 10% have been canceled and people are scrambling. but again, the biggest problem, the biggest question we are facing what caused this. the latest is that j.l.516, japan big airlines was cleared to land. the coast guard aircraft, a smaller aircraft was cleared to move to the runway and no

clarity where they are allowed to move towards and education that there may need to be a deeper dive into the communications of traffic air control. >> they are onsite. say they are flying into be part of the search for the answers here. clearly all 379 people on board of the airbus, japan airlines flights were able to evacuate but five people did die on the coast guard aircraft. the only surviving was the captain and pilot and has regained consciousness but has

sustained severe injuries and hopefully the answers will trickle down to us. this is still under investigation and nothing has been confirmed and government officials have said nothing is confirmed yet but they are looking into the communications of air traffic. >> those people who were killed in that crash were headed towards the quake area for disaster relief efforts. how is that ongoing right now? >> the local authorities in the peninsula which is the hardest hit by this massive quake calling everything from water to food to blankets and basic supplies and the fact that this plane has been lost tragically with the loss of five lives. and massive earthquake who are

desperately need of those supplies. >> what are some of the difficulties when it comes to the rescue effort? >> on the good side was that it hit in a relatively unpopulated area. but it sticks out into the japan sea and hard to access. a lot of the roads have been blocked and buckling and the effect of the earthquake. hard for rescue crews to get through and hard to bring supplies in even though the local airport was closed due to a massive crack in the runway. and what is going on, a massive series of aftershocks. >> a terrible situation with families spending the centers. how are these survivors coping?

>> it has been hard for them. japan is set up for these centers being very earthquake-prone area as we know. those centers can be very cold and prone to people to catching diseases from other people, viruses can spread and people can suffer from stuck sitting in a small cramped area. the sooner people can get into temporary housing, the better for them, i'm sure. >> 50 million of funds into policy funds suggesting that the center bank may be ramping up for housing and infrastructure projects.

and senior editor joins us from beijing. and working its way through that televised address vowing to support and strengthen the chinese economy identifying the weaknesses and shortfalls. what does this tell us about the direction the policy makers might take this year? >> i think they are using every tool that is available to them to get liquid witness and lending into the system. there is a big dropoff. people are not buying homes. and seen that in the drop in the number of loans that are going out for home purchases. individuals and businesses are not borrowing. beijing is trying to get local governments to borrowing. it allows it to use its balance

shot to policy banks to build these public housing projects and to rebuild some of the things that exist in china. >> we have seen a series of measures coming from both their fiscal and monetary policy authorities not doing much to shore up confidence. what should we be watching out in 2024 that perhaps they have a more aggressive push in order to support recovery? >> people, i know have been waiting for the bazooka and that isn't coming out. there is a real hesitancy because of the implications and the threat of inflation. we have seen piece by piece and from the central bank and

bloomberg reported on late last year and trying to get property projects up and going again. we will see more of the same. little bit here, little bit there. but no bazooka. >> what is the taking hold when it comes to confidence or lack of confidence across households? >> the threat is very real and the c.p. e! data. property crisis unfolding in a different way and vast majority of wealth are stored in people's homes and value of those homes has fallen significantly and those households are feeling poorer by the day and trying to

save more and resulting in less consumption and coming through the economy on pressure on the inflationary side. >> some of the other stories we are following when it comes to china and country's military is cracking down on corruption after a series of personnel changes in 2023. they mentioned corruption three times in the january 1 editorial, the most since president xi began his campaign against graft. china is 2024, move expected to help refiners map out. and the issue is issuing quotas for 179 million tons of crude. and that is below what was awarded last year.

they are not subject to imports. the thai prime minister that thailand and china have scrapped visa requirements. chinese visitors will be exempt requiring visas. china will grant thai tourists the same privilege. get that in today's edition of "daybreak." and customize the settings. this is bloomberg. ♪

he was aware of the meeting but more focused on the country's economic development. donald trump has filed a lawsuit to restore his name to maine's primary ballot. and they declared he is ineligible which bars. colorado republicans have asked the supreme court to reverse a decision to remove trump from that state's primary ballot. as we look and sales trading here in australia and that treat from risk assets of what was in tandem, the worst drop for

stocks and bonds. less than two points of that record set in august of 2021. we are seeing a fall of 1% in the early part of the and dollar actually did manage to crawl back some of those games opening the year with the biggest advance since october with higher global bond yields and geo politicals in the middle east. >> we saw treasuries falling across the board. 390 level and got that jump and

take a look how the japanese yen is trading. 142 being the level very early in the 2024 session, but we have seen thin trading for the japanese yen given the market is close today. and monitoring the conditions on monday and given that december was the best month for the japanese yen for 2023 and see speculation that monetary policy will difficult verge between japan and u.s. 715 is you

>> retreating from that high. trading about half or 50% lower than where they would be on a 20 moving day. andrew: kiwi stocks back online after an extending. equities in the region and to note that japan does remain h shot for another session and wall street session, quite a negative or start to 2024 trading. and changing perception around the extent of rate cuts that we get from central banks as the money markets is 150 pace is points of cuts over the coming

12 months. and at the end of last week. perhaps a lot of investors aren't quite sure we are going to see the magnitude of the reduction being priced and saw treasury yields rising overnight quite significantly. and similar move coming through in the european session translating. and so far but putting a bit of pressure. and -- >> those are one of the stories and volumes when it comes to tesla. tesla delivering more vehicles than expected in the fourth quarter but wasn't enough for ahead to stay ahead of china. china transport reporter. we saw significant price cuts to chase volume over the margin,

has it played out well for tesla? >> good morning. what is important is that tesla beat estimates, the estimates in deliveries, 84, 500 units in the final quarter. and that was expected as consensus. in the early part of the year, tesla led the year with price cuts and but what we have seen is final quarter of the your, b.y. d. has beat tesla. more of a symbolic change but tesla not enough doing enough to stay ahead of b.y. d. >> how sustainable is that tesla has a global play as b.y. d. that depends heavily on china.

>> they've got the low cost base in order to flex as much as it wants to go down in order to compete in price. tesla is very catch rich. it has a generous revenues and also sustain. but in the back end, tesla continued to unwind some of those price cuts and delivered on its expectation to 1.8 million units and fell short. and maybe two million units. very much kind of a low end of the expectations that has met investors and see the shares down 1.6%. >> and our next guest thinks that tesla and b.y. d. are

traded very differently. and gentlemen, good to have you with us, what do you make of the news that b.y. d. overtook tesla over quarterly sales? >> i'm not sure that is meaningful. b.y. d. is china phased and tesla is a global company. they are eager to own a bees but they own tesla because of exposure because of the magnificent 7. and b.y. d. are recovery of chinese. andrew: b.y. d. is the leader of the so those are very different companies and run on different business models and so what is

common though is that although tesla is a global company, 60% of tesla cars are made in china and has significant exposure and shipment are delivered onshore in china. so it is correlated with the macro economy in china as well. >> how sustainable is twth b.y. d. has seen given those macroeconomic issues. we have competition and not to mention that the chinese economy is slowing down and adoption rate of e! v.'s in the country is already high. >> the rate is very high, 30% for the year 2023 and exiting the year, it has reached the 40% and put everything in perspective. in california and was very mild.

climate. e! v. adoption is about 30, 35%. and what we say in china 35% in some cities, north of 50%. is that going to be # 0%? i don't think any time soon. our base case assumption is that this year it will continue to go up. but probably going to be like the low 40's. >> and e! v. sales are going to grow.

>> the competition what we see is the pricing war accelerated towards the end of last year. b.y. d. and bonuses to buyers. >> factoring in the element of geo political tensions between jarks and beijing escalating. >> tesla has a different strategy. they launched the model three. it has no new product ever since

then. and just two models versus average chinese. the product cycle is very short. they launched the e! v. product. the product development cycle. that's very short. so yes. tesla still grew. in part, it's in line with the overall ev growth. and completely different strategy. and and pushing new models. >> what are the products of being successful overseas?

>> well, i think for ev main markets, china, u.s., japan and india. byd is scheuted. and although there is no direct ban, but possible that more restrictive measures against the chinese will come out in the future. so it comes down to maybe russia and the middle eastern countries that could be more open to chinese auto makers and chinese technology. byd is different. byd makes car, that's it. tesla, it labels it evil as an a.i. car company.

it is very dynamic and the company business strategies. >> good to have you back. >> couple of stories we are tracking this hour. later this month. fidelity estimates that social fidelity estimates that social media platform x,

♪ (upbeat music) ♪ ( ♪♪ ) >> this is bloomberg. ♪

>> now killed one of the senior leaders, raising fresh concerns of regional escalation in the war in gaza. have we heard from israel on this? this is the first attack we are seeing in beirut since 2006? >> nothing has been said officially and haven't claimed responsibility for it. and israeli officials are confirming it was an israeli attack. no doubt about that. lebanon is very unstable and hezbollah is on israel's northern border and low-level

skirmishes and so there is real potential here that this could escalate if hezbollah takes it upon itself to seek revenge. hamas is not going to want to engage with israel because of this assassination. that said, israel warned it would track down anyone who are seeing members of hamas and people involved in the attack and israel has a record of doing this and you saw after world war ii, former senior nazis would have these unexpected accidents in france following the attacks at the olympics and israel went out of its way to assassinate

everyone involved in that. it has a history of doing this. it could significantly escalate tensions. >> have we had a reaction from iran? >> not that i have seen. i suspect that -- iran would speak about something as individual as this. but actions might speak louder than words here. >> we were talking yesterday about a strategic de-escalation but this approach of a targeted strategy and now seeing reports that the entire population has been removed from their homes and at this time remains a state of complete chaos there. are there any pros pets of that de-escalation taking place? >> it is difficult to see how it works because peoples' homes are

uninhabitable. it is famine and can't get enough food and reports and you had people, finance minister and they should emgreat from that and said it was quite critical of his remarks and not policy. but what will happen with those people is a real issue and go down to more targeted attacks, it is still a war zone and the chance of they moving freely, it's hard to see how that would work. >> with the latest. >> we turn to the latest on ongoing scandal on harvard, claude even gay is stepping down after allegations over

antisemitism. we have the latest. and bonnie had the support from school first up until last month. >> it would seem that these fresh allegations that were the tipping point. this has been brewing for a couple of months since those attacks on october 7 on the israeli population. congressional hearings were the first stone hurled by many nonfree speechers to suggest that presidents of these major universities should step down if they weren't going to condemn any kind of language against jews, which they didn't at these congressional hearings, they side stepped and left people bewildered about their answers. and said it wasn't their place to step in on these debates.

but first harvard black president and been in role since july and the board was happy and as recently as december 12, the harvard corporation said that it examined her work as a political scientist and found instances of inadequate citations but standards. harvard held two more examples of what it called duplicative language without attribution. this wouldn't be ok for a harvard student. she stays on and very respected political scientist and the likes of larry summers has come out and said kudos that the focus should be on the institution and not on the individual. she said it has been distressing and to upholding scholarly rigor

and the focus on the institution. several multibillion air donors are pulling back. donates $200 million to the medical school and wexner and jeffrey epstein having his money managed and shipping mag nature have been pulling their support. and wealthy alumni and criticisms like mitt romney and hedge fund i.r.s. and don't know if they pulled their funding or not. harvard endowment is more than $50 billion and hopes to gain a lot of steam before this would

put a dent. >> we have more to come back. this is bloomberg. ♪

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provider says the explosive growth in a.i. is not a threat to the rest of the technology space. how generative a.i. is changing her business. >> we thing we talk about when we talk about technology we have an idea of what it is but technology is changing in so many different ways. and if you think about what was technology like 20 years ago before the i-phone and where it is today and the ability to have answers in your pocket, a.i. will have access to more information faster. i am bullish on technology because technology is an underpinning and not its own industry but a part of every industry and create productivity and make our lives better. >> you think technology is centered around the silicon valley area or is it going to

change? >> i think what is amazing you can start an app and live and have a.w.s. and don't have a system administrator or server that you have to build. it has made it easier with these tools to look at a problem you have and solve it anywhere. that distributes the ability for us to bring technology together any place. >> artificial intelligence, a.i. that is changing the world dramatically. what is a.i. going to do for you or not do for you? >> one of the most incredible is gen a.i. i is changing the way we are doing things. what we are doing is involving a.i. last year 1950 krens success -- sense us and records were handwritten and people were going door to doo and did the

1940. people typing things and 1950's, it took us nine days and built a.i. around handwriting recognition and accelerated the record and 40 billion records to 15 billion in one year because of the technology. gen a.i. is coming to help discover things in a different way. it is a very. gen a.i. helps with story telling. my parents emgrated to the 60's. a lot of that has to do with a history around the chinese exclusion act. and in line, we can answer that question. answer questions of the experience your grnd parents had with the spanish flu in chicago. and we think that will engage

people to learn more about how their parents came to america and grandparents lived through various world events and going to be very powerful for people. >> and you can catch more of that conversation on the "david rubenstein show" take a look at how markets are trading. doesn't look like today that potential that record being. and decidely a risk of asian stocks and see that dip in other major markets. we have. ♪ we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com

shery: this is daybreak asia. we are counting down to asia's major market opens. after a not so happy start to the new year for wall street we have the s&p 500 falling. the nasdaq 100 seeing its worst date since october. we saw the 10 year yield shoot up above 390, given we are trimming some of those bets for rate cuts this year. haidi: yeah, really in tandem stocks and bonds setting they are off to the worst start we have seen in decades for this market. surely things can only get better, famous last words. does not look like today will be the day we see that record high being matched for the asx. annabelle: we had an expectation coming into the session, futures came online, that drop of 1%. today is not the day we do see for benchmarks. reaching multi-month highs across the board, if not all-time highs. in korea we have the kospi

trading around a 19 month high. broadly the expectation for the session today is going to be weakness coming through across the board. yes, it was the stocks and bonds on wall street seeing their worst start to the year in decades. you had that firmer dollar as well. it was one of the best days we have seen for the greenback's march of last year. and that re-think coming through around the expectations for have aggressive said rate cuts are going to be over this year. that really played into the dynamic as well. traders are perhaps thinking that central banks won't really have that need to cut quite as quickly as had been previously priced in, so you have that reaction coming in so far. the kospi down 1%. that korean won, a little bit of catch-up move given it does not trade at such a large range as other currencies. you are seeing that weakness

building against the greenback so far this morning, earlier down 1.5%. certainly one of the currencies to watch through the session. let's change on, take a look at aussie stocks one our into the session. it was that story, perhaps we would see the asx 200 reaching an all-time high in the session. we are retreating away from that mark so far. it is that same trading dynamic, slightly higher yields. you have got the moves coming through in the currency here, fairly steady. it was that dollar strength story. oil as well to note, given we have seen brent crude and wti reacting to the troubles in the red sea. iron ore minors under pressure so far. something that bodes well for the outlook is citibank saying they are bullish on aussie iron ore miners. it is about that demand story from china, even though something else that is negative for the outlook today, that

start we had for chinese stocks on tuesday for this year's trading. it is that economic story that is weighing there. shery: our next guest says the narrative of a selloff landing in the u.s. will be the key driver for marcus this year. he remains overweight on japanese equities. daniel, good to have you with us. happy new year to you. talk about being overweight in japanese equities but neutral when it comes to asia ex-japan. belle was just talking about how bad it has been for chinese equities. is china a problem here? daniel: we need to wait for catalyst for the chinese equities to perform, but having said that, if you have seen the big moves in december in hong kong china equities, big time moves. they have been met with very decent buying and recovery after that.

so there seems to be a change of hands in the ownership of the ongoing china equities, coming from may be the foreign institutional money, which there is still outflow in kong china equities. having said that, you do need a catalyst to perform. that catalyst may come from added fiscal boost from the government, but we have yet to see that still. shery: everything that has been said so far, whether it is trickle-down measures which are fiscal measures, more voluntary -- a bit of monetary policy here and there, that is not enough to bring back the confidence. what will it take for that confidence to be sustainable for chinese assets in 2024? daniel: well, they need to show a more consistent and more frequent type of stimulus in the chinese economy. such that data can turn for at

least a few months for people to getting betting -- to be getting back. right now it is sporadic may be the stimulus level is not strong enough yet. that needs to turn in 2024 in order for that to perform. they are cheap, of course. therefore the downside is limited. for the upside, we do need those to happen. shery: does the valuation picture still make sense for japanese equities? we have seen a bit of pressure towards the end of 2023, but we had a substantive rally earlier in the year. daniel: yes, so the valuation has gotten more expensive relative to the beginning of 2023 in japan equities. so right now the gains is becoming more incremental. the risk factor is the

dollar-yen, where the yen may get stronger on the back of tighter monetary policy from the boj. so you have to be a bit more selective when you go for japan equities. in the sectors where they may benefit from the higher yields that you may see in japan, so for example the financials would be a sector we would be looking at. shery: you say that the u.s. soft landing will be the key driver for the narrative in 2024. how does that affect u.s. assets in comparison to japanese assets? what is interesting this year is we will continue to talk about policy diversions, but -- divergence, but both central bank's are going in the opposite direction than they did the last few years. daniel: again, a sector call. if the u.s. were to have a soft landing, and that is our base

case scenario for this year, than the fed may start to cut rates this year. i know that is the u.s. 10 year yield has gone up in the first trading day of the year, but that is in reaction to a big drop we have seen. it has gone from nearly 5% to the 3.8% level. now it is 3.9%. but the trend of the u.s. 10 year yield remains that it is seeing lower highs and lower lows as opposed to most of 2022 and 2023, where it is heading higher -- hitting higher highs. the narrative is because of the soft landing and potential rate cut from the fed. we see that the u.s. 10 year yield faces some resistance in 2024. maybe there is further rebound, but that would be opportunities for the growth sectors in the u.s.. in the u.s., you want to go for the growth sectors. in japan, you want to go for those that can bed and -- can

benefit from tighter monetary policy and how yields, so financials -- and high yields, so financials for example. shery: what are the -- what about the rest of the asian markets, south korea, southeast asia? in 2024, what will be the key drivers, and perhaps your best calls when it comes to some favorable opportunities? daniel: well, in south korea it would really be focused on the earnings recovery, and especially on the semi conductor stocks, right? so south korea, we see strong earnings growth this year, and likely that the semi conductor stocks can do pretty well as well because of the inventory cycle in the semi conductor space. that is for korea. in india, we continue to see the domestic story playing out there. especially the fact that the

long-term favorable demographics in india is likely to be the key driver. remember that roughly 70% of the indian population is in the working bracket. that is very powerful compared to many other regions or other countries. so that will be the market one can be watching out for as well. shery: daniel, good to have you with us. his calls for 2024. let's turn to some of the big movers. you are watching those tech stocks in south korea. annabelle: just picking up on it of those things. we are seeing text stocks in korea leading the drop for the kospi overall. these are the big movers on the session so far on the board. it is that story from what happened on wallows -- what happened on wall street overnight. the nasdaq saw its biggest drop in two months. it was the focus on the magnificent seven that led so

much of the gains over 2023. we saw apple for instance falling on that barclays downgrade, warning that iphone demand is cooling. you saw nvidia, meta platforms, all of those sinking. at the same time we had that move in treasury yields as well because we had that move higher in yields led by the front end of the curve with traders rethinking their expectations around fed rate cuts and a firmer dollar. that is the session so far. let's take a quick look at the aussie i.t. stocks because they are leading the drop for australian trading today. that broader benchmark for the i.t. index down 1.7%. it is the same theme as we were discussing so far. changing expectations around the fed, big trading theme continuing from last year into this year. haidi: still ahead, japan is reeling from its second disaster in two days.

a fiery airport collision involving a passenger jet, and an earthquake. we have the latest from tokyo, next. this is bloomberg. ♪ hey you, with the small business... ...whoa... you've got all kinds of bright ideas, that your customers need to know about. constant contact makes it easy. with everything from managing your social posts, and events, to email and sms marketing. constant contact delivers all the tools you need to help your business grow. get started today at constantcontact.com constant contact. helping the small stand tall.

haidi: the pboc says it injected nearly $50 billion worth of low-cost funds into policy oriented banks last month. that suggest the central bank may be ramping up financing for housing and infra structure projects to accept the economy. is this any kind of further evidence in terms of the length that policy makers go to this year to, as president xi suggested, support and strengthen the economy? >> i think this underscores how much effort is going into reviving the economy. this lending facility has not been used very often. it was used when there was an economic downturn in the last decade. it is a bit of a controversial tool because some people do describe it as a chinese form of helicopter money or quantitative easing. it is the central bank using its balance sheet to pump liquidity into policy banks, and policy

banks lend that money to local governments, who use it to build public housing, to renovate shantytowns across china. it is getting lending going again. if individuals and companies are not borrowing, it is getting local governments to borrow. shery: how is the chinese economy doing right now? the latest factory data, housing data did not seem that great. john: i think someone said a minute ago it is a new year but lots of old problems. the real estate sector is no better. that is rippling through the economy. it is causing a confidence issue. people are not spending. people are looking for ways to save money. household wealth, everyone feels poor because their homes are worth 40% less than they used to be, and the economy is not going because of that. the government is having a real tough time trying to change that perception in terms of confidence. haidi: on the theme of new year,

same old problems, it seems like the problems of the last decade are still front of mind. are we seeing lines of perhaps renewed commitment in the fight against graft and corruption? john: as the chinese government likes to describe it, the corruption fight is never-ending. that is what we have seen. we had probably upwards of one million officials arrested over the last 10 years because of corruption charges. we have seen it through the financial system. a former senior official at the central bank was recently jailed for i believe 16 years for corruption. we are now seeing it rip both through the people's liberation army. we had a number of generals, officials, officers and other executives in the military complex, companies that make weapons for the pla, all being taken down. it seems like there is no end in sight it comes to fighting

corruption in china. haidi: bloomberg's greater china senior exec at of editor in beijing. we are hearing reporting from reuters that beijing remove the top official that oversaw china's gaming industry, adding to suggestions that the government is trying to tamp down on this backlash against new regulations. we saw that $80 billion rout across major tech stocks, and other high-profile personal changes across 2023. some of the other stories when it comes to china, the country is frontloading its oil import quotas for 2024, a move expected to help refiners better map out there production for the year. data is showing that beijing issued quotas for 179 million tons of crude. the total for 2024 is slightly below what was ordered last year. china's state owned refiners are not subject to limits. the thai prime ministers as thailand and china agreed on a deal to scrap visa requirements

for travelers, a boost for the post-pandemic recovery and tourism. chinese visitors will be exempt from requiring visas after the current temporary scheme ends in march. china will grant thai tourists the same permanent privilege. shery: we turn to japan. crash investigators are searching for answers after the country's second tragedy into days. a runway collision between two planes in tokyo killed five people who were set out on a relief mission to the country's earthquake zone. let me start with you because you are at the airport where the crash happened. what went wrong? kurumi: in japan, a tragedy over another tragedy. what happened yesterday here was around 6:00 p.m. local time. a japan airlines flight, jl 516, was cleared to land according to

officials. the same time, a coast guard plane that was set to go to evacuation efforts and help with the disaster struck. -- the disaster struck area collided with the japan airlines flight. it may be tough to see behind me, but there is a bit of a black. that is what remains of the japan airlines flight. we are right now on the fifth floor of this sky deck. it's just stunning to see in person, absolutely devastating. we still see a fire truck hanging around. there is really little to see in terms of what is left of the plane. there are about 100 firetrucks deployed. it took at least five hours of cruise to try and extinguish the flames. shery: we have heard aviation analyst suggest human error from the coast guard, the airlines, the controllers, we don't know.

i wonder what the steps are from here to determine what happened. kurumi: the investigations are still ongoing and the officials, government officials have repeatedly said that to us. still, we have learned that the japan airlines flight was cleared the land on to this runway behind me, and the coast guard airplane was set to depart and was cleared to go up to a certain point on the runway. there is no clarity exactly where it was cleared to proceed, but there was some communication potentially, human error, that officials are looking into right now. it may have to do with air traffic control. shery: we know that coast guard plane was actually headed for relief work at the earthquake-hit region.

how is the rescue effort going on right now? erica: so death toll rose to 57 according to a local broadcaster, nhk. unfortunately the number will not be the final one, as the rescue work is still underway two days after the disaster happened. the weather there today is har sh, below 10 degrees celsius, and expecting heavy rains. still about 34,000 households are without power, and many people have no access to water as well. over 30,000 people are at evacuation centers. quite a few people are elderly. while shocks are continuously hitting the region, making people in the center feeling insecure. people are asking for supplies and highlighting the need, how serious this situation is.

haidi: you have talked about the sad reality that that death toll is likely to rise. what are we seeing in terms of the recovery efforts and a successful recovery and risky? erica: the situation has been difficult but i can sleep -- i an see slow and gradual recovery, especially in transportation. the train business resumed fully yesterday. while it will probably take some time for many local lines, which is the key for local residents to fully recover their services. the main point is still we don't know exact damages that the earthquakes caused, especially for companies. the areas hit by earthquakes are not actually industrial centers, but some companies have a production site there, including toshiba factories. spokespeople told us that they

are still assessing the situation closely. there are lots of small and middle sized enterprises there which support the local economy, which will be a key for the recovery to the region. shery: we know that the government has sent a task force up in order to help with the rescue operations. tell us more about what the administration of prime minister kishida is doing right now. erica: prime minister kishida and other ministers are trying to respond to the situation as quick as possible, updating the information every few hours. but this seems to be a really challenging task. one of the most challenging things they have faced so far. kishida holds a series of greetings and speeches as the new year starts, but they already canceled most of them to focus the rescue work. now japan added their emergent

task. government officials are even busier to address the situation. they have not appeared on tv today, so we will know more as the day goes on. haidi: and you can get the latest on that story and the roundup of all the other stories you need to know in today's edition of daybreak. bloomberg's of scrubbers can get that at dayb at your terminals and available at the bloomberg anywhere app. you can customize settings so you get news on the industries and assets that you care about. this is bloomberg. ♪

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shery: you are watching daybreak asia. here are some of the top stories we are following.

hamas says israel killed a senior militant leader in the lebanese capital. he was killed as the mastermind behind its armed wing in the west bank. lebanese media said israeli drones struck an our permit building in beirut, killing six -- an apartment building in beirut, killing six. tel aviv raised fresh concerns over regional escalation of the gaza war. the malaysian prime minister has dismissed apparent attempts to topple his government. the so-called move was meeting among opposition leaders in the united arab emirates last month aimed at undermining the prime minister. the prime minister says he was aware of the meeting but is more focused on the country's economic development. donald trump has filed a lawsuit seeking to restore his name to maine's presidential primary ballot. the state last week declared trump ineligible for another term under the u.s. constitution's 14th amendment,

which bars candidates who have engaged in insurrection. colorado republicans have already asked the supreme court to reverse a decision to remove trump from that state's primary ballot. take a look at how european futures are coming online in the asian session. we are seeing some downside and pressure after european equities fell on the first trading day of 2024. we saw bonds retreating, value stocks outperforming. although really it was the consumer products and technology stocks that lagged in the regular session. we are seeing a similar picture in asia as asian stocks are under pressure at the moment. we have more to come on daybreak: asia. this is bloomberg. ♪

annabelle: this is daybreak

asia. we are half an hour into the trading session for the cosby. -- the kospi. it is leading asian stocks lower. japan is closed, but we are seeing it down 1.25%. the dynamics feeding into this follows across from the wall street session, because quite negative news for bonds and stocks overnight, the worst start to the year in decades for both those asset classes in tandem. but driving that is these changing expectations around how aggressively we can expect the fed and other g10 central banks to cut over this year. has not led to higher treasury yields, you can see the aussie three year yield advancing somewhat in the session, and likewise a firmer dollar off the back of that. the best day we have seen for the greenback since march of last year. you are seeing that weakness feeding through into the korean won, trading near the 1300 mark. hong kong futures are pointing to a weaker open, down 1% at this stage.

it is that perception around central banks and what they will do over the course of this year that is playing out in energy markets. if you bring up this terminal chart, you can see those red sea disruptions and the impact that had in terms of pricing has started to peotter out. you are seeing oil retreating from those highs that were set after the israel hamas war broke out in october last year. so brent crude, wti, both retreating in the session. holding on to some of those losses yesterday, from yesterday. haidi: let's look at energy markets. a senior oil analyst is with us. we go into 2024 with a lot of uncertainty in terms of the further work that opec has to do in terms of any potential recovery and whether a soft landing scenario plays out. give us your top view as to how

supply and demand is going to look like. >> 2024 is going to be different to last year in that we will see slower demand growth and slower supply growth. demand, we saw exceptional demand growth in 2023. that was largely driven by increasing demand from china as we saw the covid recovery play out. this year it will be different. i think weaker economic growth will lead to a significant reduction in chinese oil demand growth. globally we are looking at one million darrell's a day -- barrels a day, almost half of what we saw in 2023. when we look at supply growth, we are also going to see weaker supply coming through after what was stronger expected growth in 2023. when you look at the balance between supply and demand, markets look fairly balanced coming into the year, so it leaves opec with quite a lot of

work to do to support prices at the current levels. haidi: there is also a lot of geopolitical risk as well, ongoing developments in the red sea is the latest. is that going to be the extra layer of risk for this year? neil: i think it will be a layer of risk, but i don't think the events in the red sea will be that significant. we are still see in million barrels a day of flow from the gulf, suez. while there is added shipping time, it is really just adding time and cost. there is not really any disruption to the physical supply in the market. geopolitics always a risk. if events in the middle east continue to escalate, then of course there could be risks down the line to supply disruption, but there is nothing materially disrupting supply at the moment. i don't think events in the red

sea are going to play out in a significant way for oil. haidi: how much of a surprise to the upside will supply be for non-opec sources this year do you think? neil: i think last year the big surprises on supply where how well russia held up. i think there were a lot of expectations we would see russian supply coming off half a million barrels a day. that largely did not play out. supply was relatively flat from russia. we saw stronger-than-expected supply coming out of the u.s. and other non-opec producers. i think as we go into this year, you can see non-opec supply better-than-expected given the costs that have played out through the industry. we are looking at non-opec supply growing 1.3 million barrels a day, higher than what we are seeing in terms, at the

end of last year really need to remain in place for probably longer than just first quarter of this year. haidi: it was a boom and spending when it comes to private -- in spending when it comes to private shell drillers. what is the broader picture when it comes to u.s. shale? neil: if you see prices come down, that will put some restraint in terms of capex for u.s. drillers. the surprised with the u.s., we saw when million barrels of supply growth coming out of the u.s. last year. this year we are expecting u.s. supply to be 0.5, 0.6 million barrels a day. i think the key lesson over the last 12, 18 months is how resilient shale has been. with the capex cuts we have seen in the industry, with capex off 30%, 40% from peak levels, i

think a lot of people expected supply growth to be significantly weaker than it has been. i think the lesson we are seeing in the market is that shale has proved to be surprisingly resilient despite lower levels of spending. that does suggest there is further productivity gains made within the industry. haidi: we saw some outperformance when it comes to asian oil equities. who do you see as potential for upside to be caught this year, and where do you see a muted scenario for evaluations? -- for valuations? neil: last year we were sheltered in some ways from the storm, particularly in asia. as we saw that downturn in sentiment towards equities in china in particular, investors were looking at companies that had very strong free cash flow yields, strong dividend yields.

chinese oils in particular, you are getting 15%, 20% pre-cash flow yields. for a lot of investors, that was a shelter from the broader storm in equity markets. this year i think some of that will continue. i think it will remain pretty tough on equity markets. i think it will be a bias toward value stocks. although i think crude prices are likely to remain at or around $80 a barrel, which means limited earnings growth, these stocks will still offer pretty good yields. stocks like petrochina will be offering 10%, 12% dividend yields. i think there is upside there. if you look at where we could see more downside, certainly it is some of the refiners with all this weaker demand outlook. there could be more pressure there. shery: you like petrochina as well as some australian names.

you are more selective when it comes to sinopec and petrochina. neil: yeah, for china -- exactly. sinopec i think we'll see slower demand growth in china. that significant downshift in demand in china coupled with a weak petrochemicals market in china. i think in japan, the issue there is this is a stock that has been generating strong free cash flow. the next wave of developments is starting to come in indonesia. over the next few years we think that will be a significant call on capex, reducing significant cash flow yield of the company. shery: is that on expectation that the merger could go through? neil: i think the merger is more likely to go through them not. i think there will be some regulatory issues, particularly given the dominant position of woodside and santos when it

comes to west coast gas in australia. on balance i think it is more likely than not to go through. it will create one of the largest lng companies in the world. i think it will be a national champion for australia. the scale of the lng portfolio will give the combined additional opportunities around trading, which it currently does not have. i think the merger falls on this broad consolidation we are seeing in the oil industry. i expect it to go through. generally it would be positive for both shareholders. shery: always great to have you with us. a very happy new year. great to have those insights. plenty more to come on daybreak asia. this is bloomberg. ♪

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shery: we are seeing broad risk off across markets in asia. japan is away on holiday, so we are looking at the msci asia ex-japan. it is down about 0.5%, led lower bite materials and industrials. transportation sector also under pressure at the moment.

let's talk about one car company, tesla, delivering more vehicles than expected in the fourth quarter. still not enough to stay ahead of china and global ev sales. let's bring in bloomberg's asia transfer reporter -- transport reporter. what can you tell us about tesla's delivery numbers? >> tesla beat on consensus. it beat on the fourth quarter consensus and also on the full year. it delivered slightly better than the 484,200 expected by the street. across as a whole it delivered 1.8 million units this year to customers. that is a real plus point for investors. musk actually said earlier in 2023 that he believed tesla could deliver up to 2 million ev's. it has only reached around 1.8 million, so it is still on the

low end of beating expectations. throughout the year, tesla tried to stoke demand with price cuts, but unfortunately that has not delivered the gains we have expected to see, especially in the fourth quarter. what we have seen symbolically is byd overtaking tesla in pure ev sales for the first time ever. that sums up a change we have been seeing coming over time with china's best selling ev maker, automaker, coming to the number one spot. haidi: it is quite interesting because we have covered byd and the china markets. we know they have been around for a long time. it is not just the chinese market it dominates other emerging markets. in terms of what next for byd, are there other markets that may be endangered for tesla of being

overtaken? >> that is such a great question. over the past two years, byd expanded to 60. leading in brazil, thailand and israel. they are garnering about 10% of their overall sales from export markets. exports will be a huge focus this year in particular, especially as sales of ev's has been its core market in china coming under increased pressure from more competition domestically. for someone like byd, it would be chasing aggressively, particularly with its more forward ev's and putting a challenge on tesla in the future even more. haidi: bloomberg's asia transport reporter with the latest. let's look at other corporate stories. airbus managed to beat its annual delivery target in 2023 as it ramped up output in december. according to aviation flights, which tracks aircraft handovers,

the firm likely delivered 733 jets to customers last year. one source also said airbus did exceed the goal of 720 deliveries. the company is due to revealed the official tally later this month. fidelity estimates the social media platform x, formerly known as twitter, is now worth less than a third of the $44 billion elon musk paid for it. it's the latest in a series of markdowns by fidelity as x struggles to hold on to hold onto advertisers and is weighed down by $13 billion in debt. users say news headlines every appeared alongside links shared on x. it is a quiet reversal from the change that musk himself implemented last year. the ceo of geology -- of genealogy research provider ancestry says ai is not a risk to the tech space. they told david rubenstein how generative ai is changing her business. >> we think the one thing we

talk about when we talk about technology is we have this monolithic idea of what it is, but technology is changing different industries in so many different ways. if you think about what technology was like 20 years ago before the iphone and where it is today, the ability to have answers in your pocket, genai will make it easier to access more information faster. how do we think about those things and where is that going to go beyond this? i am very bullish on technology because technology is an underpinning, it is not its own industry, it is part of every industry. it will make our lives better. david: i see. so you think technology will still be centered in the west largely around silicon valley, or will it change? >> what is amazing about technology over the last 20 years is now you can start an app anywhere in the world. you can live anywhere. you can have aws and not have to have a systems administrator or

server that you have to build. now it has made it so much easier with these tools to look at a problem that you have and solve it anywhere. i think that distributes the ability for us to bring technology together anyplace. david: artificial intelligence has changed the world dramatically, people believe what is ai going to be able to do for you? >> genai is coming and it is changing the way we are doing things, but so much of what we do every day actually is already involving ai. last year, the 1950 census came. you had millions of pages of these records that are handwritten. people going door to door and writing it down. we had done the 1940's census 10 years before that. it took us nine months to digitize it, people indexing it manually. this time for 1950 it took us nine days to do the same thing. we had ai built around

handwriting recognition. that is why we can go from 40 billion records to another 15 billion in one year, because of the technology we have built. genai is a type of ai that is coming that is helping people discover things in a different way. ai si a vast field. genai is really helping to understand storytelling. my parents immigrated in the 1960's. what was it like and why were asian americans coming at such large rates in the 1960's? that is a history around the chinese exclusion act. with genai, we can answer that question. we can answer the question about the experience your grandparents might've had with the spanish flu in chicago. that will engage people to learn more about how their parents came to america, how their grandparents lived through various world events. it will be powerful for people. shery: you can see more of that

conversation on the david rubenstein show: pure to pure conversations, coming up at 7:00 p.m. thursday night and hong kong. we have more to come on daybreak asia. this is bloomberg. ♪

haidi: take a look at currencies and what is generally a risk off day. we did see a pretty significant gain when it comes to the dollar, just reversing the losses we saw going into the end of 2023. the dollar opening the year with the biggest gain since october. we are watching that risk off sentiment play out here. dollar yen holding just shy of the 142 level. that was the biggest intraday gain for the dollar since october. we saw higher bond yields, some geopolitical stories playing there as well. the aussie dollar onto upside momentum. this good news story being driven by more optimism over china, despite the sluggish indicators we continue to get. we are seeing a lot of these proxy assets like the aussie and other commodities currencies and iron ore trading quite well at the start of this year. we will be watching chinese stocks following their worst

start to the year since 2019. economic headwinds continue to persist. so, we were just talking about this earlier, new year, same old entrenched problems for the chinese economy. we are seeing more polity support -- more policy support. is that going to be enough to change confidence? lianting: at this point i think we need something a bit bigger. china did come out with data about $15 billion worth of low-cost loans to policy oriented banks to support infrastructure as well as affordable housing, but market reaction if you look at the golden dragon index overnight was down more than 3%. so investors are not really buying. on the positive side, there was reporting about online gaming overnight. reuters reported that a top

official overseeing the gaming sector was removed after the shock regulation that came just ahead of christmas. that could be a positive sign for investors, showing that the regulators of beijing at least cares about investor reaction. that shock regulation did erase about $80 billion of gaming share valuation. shery: we see only so far global fund managers dumping asian stocks last month. is that a preview of what we can expect this year? lianting: it is really a continuation that we have seen in months, if not years. morgan stanley's research shows that not only investors saw about $4 billion worth of hong kong and chinese shares in december, and that marks the third biggest exodus of all-time. only after the onset of the pandemic and the yuan evaluation

month. that is a huge selloff. what is new here is european investors, which had been more slowly than you a -- than u.s. investors in cutting shares, is now catching up with the selloff. north bond flow yesterday was a big outflow as well. we are not seeing any slowdown in foreign exodus at this moment. haidi: bloomberg's managing editor for asian stocks with the latest. this is the picture as we look across this futures trading. some markets will come online in the next half-hour. these prospects when it comes to chinese equities staging a turnaround. does not seem to be taking much of a cue when it comes to the $50 billion injection from the government into policy banks. it does not seem like that will be a big enough kitchen sink measure to turn the sentiment around. we are seeing a bit of weakness

when it comes to s&p futures. the broader markets in the u.s., stocks and bonds dropping, worst start to the year in decades. that year end rally did not pick up where it left off and in fact went in the opposite direction. one of the worst drops across both asset classes to start any year. we are seeing a bit of pessimism when it comes to thai futures, down by almost 1%. we are watching dollar china trading. the chinese currency has been holding pretty steady, but potentially we see the impact more of the gains we have seen in the greenback with the dollar opening the year with the biggest advance since october. that is it for daybreak: asia. markets coverage continues. this is bloomberg. ♪

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