♪ > good morning. i am haidi stroud mark in sydney. -- hi strut ma -- haidi in sydney. >> there are fears that surging virus numbers will derail the fragile u.s. economic recovery. investors are also nervous about the senate runoff in georgia. england has been ordered back into lockdown as the government orders the health service --

warns that the health service is on his knees. possible state of emergency in tokyo as it sees further weakening of the economy. haidi: let's get you to the start of trading here in sydney. a tuesday, we are seeing change for the asx 200. we are seeing them gaining ground, rising more than 1%. nikkei futures in chicago, we are seeing some marginal losses this morning. this is according to -- movementre seeing some

to the downside this morning as well this after we saw the benchmark fall and volatility jump ahead of the runoff elections in georgia. we are keeping a close eye on commodities. we are extending losses after following the most in two weeks. opec extending talks without coming to a decision. faltered with bets on a global economy continuing to dominate even amid rising virus cases. with that backdrop, we are seeing more optimism for asian stocks. another strong year with cyclicals playing catch-up. what that means is double-digit growth is largely expected across the board with consensus anticipating a 54% recovery this year. indices of the aipac are denoted by the yellow bars on the graph here. they are expected to fully

return to the 2019 levels. that is quite a bit of optimism in one bar chart. messer -- loretta me sser talking about the $900 billion of relief being passed. that will provide a bridge onto the economy improves later in the year. fiscal monetary moves are still needed to aid the economy. the nikkei outlook is likely to be weak. covid numbers in the u.s. climate to a fresh record high. we may have underestimated the economy resilience. speech from loretta mester, we will get you more.

let's bring in our guest. talking about the amount of fiscal and monetary stimulus and liquidity driven, particularly if you look at u.s. markets, sophie was talking about the optimism over a market rebound. do you think that profit rebound will come and will it be enough the lofty expectations of what the post pandemic recovery trajectory will be like? brian: i thicket will be selective on a regional basis. -- i think it will be selective on original basis. it will be out across the banking sector. there is not a significant rise in npl's. at the when you look performance in the market in 2020, a lot of the stock market has been pretty bifurcated.

a lot of perform just come from a handful of stocks. valuations, -- valuations of the stocks -- >> i want to get your opinion of alibaba, specifically. you expect alibaba to emerge from that relatively unscathed. is there an upside to this? it will be a pretty painful three months to come but they could come out of it more streamlined and ultimately still very profitable. about we just talked alibaba and separately, the outcome. processone through this a few years ago where we andinally talked about ipo

the business model they were not very comfortable with. i am surprised the ipo got as far as it did. is -- it ise logical in terms of the way they are looking at it. this is about the concern about what the impact will be on the overall stability of the economy and the banking -- financial sector. it will still be very attractive at the end of the day. the market is not going to be as potentially high as it would have been under previous expectations. on the alibaba side, alibaba has been targeted around monopolistic concerns. as i look at the business model, there are a few things you could make the argument -- the comedy

could this market position in terms of anticompetitive behavior. maybe having a pricing power. but i think those are things that are fairly minor in terms of the overall business. one thing you can point to, when you look at global companies, amazon being the biggest one, amazon has very little competition right now. even in china, alibaba can point to jd.com. in china is very dynamic and competitive. it is hard to say that alibaba is this dominant position in e-commerce. i think you will also recognize the fact that a lot of the good things that alibaba does really drives the economy forward. isif good virus control

going to drive and has determined which equity markets do better in asia, what about less than good virus control? a big story is the prime minister in japan saying that we may have to take some more strict steps. you think will happen there? brian: everywhere across the a matter of just where the vaccine is ruled out. there may be some bumps along the way but i think it is what isly minor versus going on in the u.s.. good atan looks pretty this point. >> besides china, you got some very definite positions there. what other equity markets are you invested in? what do you think was good this year?

i do expect that toward the latter half of 2021, as the getseat gets -- vaccine rolled out, we will see a recovery of the travel industry. towardll start to work model is asian. tion.ially with -- modeliza especially with people locked up in their homes, i think there will be a degree of pent up. travelly, things with will do well. >> thank you very much. that was brian. its allies will go into a second meeting on tuesday as they oppose russia's call for a supply hike. it also highlights growing

differences between moscow and riyadh. consensuslly meet a before concluding discussions. between has tensions iran. pentagon decided not to withdraw the carrier as tehran said it 2015 enrich uranium in the nuclear deal. forcess comes as iranian say there were repeated value -- violations of maritime law. the japanese economy will shrink even further, despite the recent 700 billion dollars to millis package. bloomberg economics sees a cutting 7/10. by 5% in thetract first quarter and by 10% if the bs ar -- curbs are

made nationwide. this is bloomberg. haidi: thank you very much. where,g news on georgia of course, the explosive tapes released by bloomberg news yesterday have created a big urged as president trump georgia officials to find votes and possibly flip the state to him. the trump appointed u.s. attorney, chris carr is resigning. that is with the ap is reporting. he was very vocal about not supporting trump toss texas -- trump 's texas lawsuit. him notion, trump told to rally other republicans against him. this is the latest that we have.

we will be getting more news shortly. we will have more on the pandemic next as england goes back into lockdown with themavirus cases pushing to breaking point. we will talk to the largest cryptocurrency exchange, next. this is bloomberg. save hundreds on your wireless bill without even leaving your house. just keep your phone and switch to xfinity mobile. you can get it by ordering a free sim card online. once you activate, you'll only have to pay for the data you need starting at just $15 a month. there are no term contracts, no activation fees, and no credit check on the first two lines. get a $50 prepaid card when you switch. nationwide 5g is now included. switch and save hundreds. xfinity mobile.

prime minister boris johnson is imposing a third national lockdown across england. it is expected to last until mid-february. he says he has been forced to act amid one is that the national health service is being pushed to breaking point as coronavirus cases continue to surge. you make shop for essentials, work if you absently cannot work may shop for

essentials, work if you absolutely cannot work from home or if you need to escape the missing abuse. schoolsschools and across wind must move to promote provisions as of tomorrow. will the lockdown work? michelle: we have seen that lockdowns can really get the virus under control. it is possible to stop the transmission and relieve the pressure on hospitals and by the time for public officials to make progress with these immunizations. that is going to be a tough haul coming this late in the pandemic. >> will the shutdowns be headed toward the u.s.?

is there a chance that social distancing better behavior could prevent things from getting worse? michelle: there is no doubt that we will see overwhelmed hospitals and increasingly higher and higher rates of death in the u.s. if we don't see lockdowns. we might see more of it then we saw earlier in the outbreak. it will be very difficult as we have seen over the last year for nationwide lockdown to actually get into place. that being said, without that kind of an impact, we will see this virus surging throughout the united states and really causing devastation. no doubt about it. was michelle cortez, thank you so much for this. theant to get you back to

announcement we had a couple of minutes ago. moment, theof the has resigned. it was bj pack. he was appointed by trump. he was appointed by trump. it did not say why he was leaving. this has been reported by the associated press. we will have more as we can get more details for you. next, we will have more on the runoff live from atlanta, georgia, that is next, this is bloomberg. ♪

>> georgia holds the most consequential senate runoff election in history on tuesday.

joe held a drive in rally in atlanta just a couple of hours ago. biden: this is to change georgia, to change america again. this is not an exaggeration. georgia, the whole nation is looking to you to lead us forward. you know it. emily wilkins is there, on the ground in atlanta. what is the latest? >> the mood enjoyed a has been that there is an all-out push for this runoff. hundreds of billions of dollars have poured into the state. advertisements have been nonstop. all of the heavy hitters were here today. trump will speak later this evening. pence has been here, harris has been here. they are trying to make sure that everyone in the state who can vote turns out to vote. this is not just a race who will

who are the senators in georgia, it will turn out who runs the senate for the next few years. >> do we know which side may have a bigger advantage? there are some key players that are still in quarantine because of the virus situation. are pros and cons on either side, usually for runoff like this, the publicans usually have the advantage. they are good at turning out their base, that is the name of the game. .emocrats have really mobilized one of the republican senators has been -- has not been on the campaign trail because he was exposed to someone who tested positive for covid-19.

>> that was emily wilkins in atlanta. bloomberg's congressional reporter ahead of those runoffs in georgia. secretary of state, mike pompeo he feels guilty that the u.s. has not made bigger steps in the issues with china. here is part of the conversation . >> you have been fairly tough on china and human rights watch issues and other things they have been involved in with respect to hong kong and security law there. do you have any hope that china will ease up on its constraints in hong kong? about this am wrong

but every that we have seen over the past year has indicated that hong kong is going to become nothing more than a communist run city. the people of hong kong are living under threat for this national security law. had people who were using their rights to protest put in jail. there were a group of people who chose to freak -- fully hong kong -- flee hong kong. they are now in jail. we know what happens when countries begin to jail people who are trying to leave the country.

when people close their borders not from keeping people out by keeping their own people in, i think that is very telling about the fragility of particular regimes and to the threat they feel. david: you have been tough on the islands that china has been building in the south china sea. theyu have any doubt that are for military purposes only? >> those are islands that have ofn built with the intent putting shipping lanes not only throughout the south china sea but the east china sea and on around through the indian ocean as well. aey are attempted to create chinese empire in the sea. the united states should never permit that to happen. the trump administration has worked very hard in the region to help slow them down.

david: they had a tough trade negotiation. wehindsight, do you think have got more chinese purchases from american products? think they are ultimately going to deliver on the commitment they made in the phase one trade deal. we have seen indications that they intend to comply. the regret is that the big issues, the heart issues and the trade relationship between the united states and the china -- and china have not been resolved. about the fundamental investment goes for broad range of industries. this is american on the property. those things are central to making sure that we have a fair and balanced trade relationship with china.

that work remains to be done. pompeo speaking exclusively with david rubenstein. you can watch more from that interview in an upcoming episode of the david rubenstein show. that is only on bloomberg television. now, a quick check of the latest business flash headlines. the company says it is turning to a backup plan, including a possible partial ipo after four years of delay surrounding the $2.7 billion deal. and berkshire hathaway tech andng to unite finance around this. this marks the end of three years and the struggle to demonstrate in full results. these three companies say they will continue to collaborate

informally. are forminglphabet -- the alphabet workers agreementmeeting in after years of disagreement. union organizers say google has ignored staff concerns about workplace conditions. at a newjapan hints state of emergency in tokyo and we discussed the possible impact on the wider economic recovery. we have seen tokyo stocks shifted by this news. it will take another look at that and also add bitcoin with a young woman who is now the only female ceo in a major world of cryptocurrency exchange. keep it right here, this is bloomberg. ♪

>> this is daybreak asia. has orderedn england back into lockdown, shutting schools and keeping people at home amid warnings the national health service is at risk of being overwhelmed. the closure starts immediately and will last until february 15, as the vaccination program is rolled out it will reach retail and hospitality and threatened to push the u.k. economy into a double-dip recession. forou may only leave home limited reasons, such as to shop for essentials, to work if you

absolutely cannot work from home, to exercise and seek medical assistance, such as getting a covid test, or to escape domestic abuse. primary schools, secondary schools, and colleges across england must move to remote provision tomorrow. the president is calling for a steady approach to the u.s. economy, with continued monetary and fiscal support. she expects a bleak winter before a vaccine driven midyear rebound. she says policy should remain in place and unchanged as the economy picks up, all the way until the fed employment and inflation goals are met. we will talk about the economic recovery and how women have been disproportionately affected by the virus on friday. wikileaks founder julian assange an asylum offer from mexico after his extradition from the u.k. to america was

blocked. the president says assange deserves an opportunity and mexico will protect him. he could be released from the prison on bail as soon as wednesday. the u.s. says they will appeal the uk's decision to not extradite assange because of his health. alibaba's spokesperson has after onlineespond speculation. the company cofounder has not been seen in public after stolee government say he money in november, then launched an investigation into alleged monopolistic practices at alibaba. alibaba adr fell 2% after a similar fall in hong kong listed shares monday. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.

haidi: sophie kamaruddin in hong kong. are seeing little conviction for in asian market. a little changeover in sydney off a third of 1%. lower by financials. we are seeing them gain ground alongside gold producers in sydney. 1940 this morning, holding onto a five-day rally in the face of falling u.s. real yield in the greenback. bloomberg dollar index is holding steady after slipping to a low. looking to test a key retracement of the levels. this as we see weakness. strategists calling for more legs lower for the dollar. jpmorgan underweight. on ans he sees more gains improving global outlook for em. pulling up a chart on the terminal, given the fx space, we have seen gains for the u.n.,

even as we saw fx lose ground on monday. offshore yuan dropping the most in two months. it was the biggest rise in three months. that could have more gains for the emfx complex, especially given strong correlation we have seen in that space. kathleen: thank you. moving on to the japanese prime hand he willeavy declare an emergency around tokyo and deepening fears that the national economy will start shrinking again. our bloomberg politics reporter joins us now. how wide will the measures be this time? >> we have very few details as of now. say, and the prime minister yesterday hinted heavily that this time the emergency will be focused on tokyo and the surrounding free pre-effective. the domestic media says it will start on january 7th and last for a month. they said this time the

emergency would be limited and focused. schools are not expected to close. canceled,ents will be and the most severe limitations will come on bars and restaurants. they are being told to close at and p.m., for the moment, that will be a further blow to those already suffering, and a has been seen as one of the major sources of the recent infections in japan. haidi: not to overstate it, but tokyo is the ninth biggest economy in the world and the surrounding area. how do we see the impact of this national emergency, even if it's not as stringent as the one we sign april? -- we sign april? -- we saw in april? last year the state of emergency started small in a limited region, then a couple of weeks later it expanded to cover the country. we cannot guarantee that that

would not happen this time, but the vaccination rollout in japan is still not due for another six weeks or so. this unlimited declaration, according to our bloomberg for everyexpert, month in effect it would cut the economy by .7%. intould not go back recession, but it is a risk on the horizon. haidi: political divisions in the u.s. is the top global risk for 2021. that's according to the president in the eurasia group. he said why it is a bigger threat to the coronavirus pandemic. >> you have the world's most also,ul country that is by far, the most politically divided and economically unequal of all advanced economies.

at a time when we desperately need u.s. leadership, because we are in the middle of the worst crisis of our lives. and the ability of the incoming biden administration to do that is maximally undermined by how biden's own democratic party is, by house divided that country is an how much trump is doing to delegitimize the presidency, put biden.rix on not to mention joe biden is coming in is the oldest president ever, and would have challenges in his job no matter what. he will be the weakest president since carter, at a time when we desperately need more. this is a serious problem for the u.s. and the rest of the world. >> are you expecting president trump to still play a significant role in the republican party in years to come? ian: i certainly am. he is by far the biggest megaphone in the republican party. the fact that he is a lame duck

president has not prevented senator ted cruz, and a dozen other sitting senators, who have their own presidential aspirations, to see trump trumpsm and gaining support is very valuable to their own political careers. that is playing out around and across the country right now. it's creating a much greater political divide. it's incredibly toxic for the country. it's deeply corrosive to the institutions of american not they, to whether or average american believes in american democracy, never mind the idea that it would apply to other nations globally. this is a serious and lasting problem. it does not end on january 20. underestimating help quickly our economy can bounce back once we have a vaccine for covid? ian: i don't think we are

underestimating that in the developed world. i think the united states rebound will be fast and very robust. it's just that it's not going to affect as many americans as i think we would like. in the united states and europe, there will be much more division of, are you in the knowledge economy, are you not? are you able to socially distance, are you not? are your jobs coming back, have you been evicted from your home, how can you handle the closure of schools for a year? these things will have major knock on consequences for inequality, social and political instability across the u.s. and europe. for the developing world for emerging markets, they are not getting vaccines as quickly as the u.s. and europe is. they are not bouncing back as quickly, and their budget are under a lot more strained. you have divisions inside the wealthy economy, then you have the growing gap between rich and

poor countries in the world, both of which play out for covid in 2021. kathleen: that was ian bremmer. to the ceo ofeak the world's largest cryptocurrency exchange. kathryn joins us next to talk about the outlook for digital currency and why she thinks bitcoin is surging all the way to 100,000 by next year. this is bloomberg. ♪

kathleen: bitcoin has stabilized after a very volatile's few days -- volatile few days. it fell 6% monday, and is now modestly positive, but still way higher than it was a few months ago. it's no wonder the bullish forecast is still abound. joining us from san francisco is coley, it's great to have you with us. not so much on bitcoin or yesterday, but you were a foreign-exchange trader working on wall street, what drew you to this cryptocurrency world, which has been around since 2008, but it has gotten hotter than ever. what drew you in?

what was it about it to see the potential where a lot of other people thought it was just a speculate of thing that would come and go? catherine: i have always been fascinated by how things work and a lot of that is driven by money. my understanding was learning about the currency and how they moved around the world. when i realized there was a universal currency that everyone could be a part of, that captured my attention. that is how i got into bitcoin, knowing everyone could participate in bitcoin. kathleen: here you are at tell us more about what role it plays in this market, and how you came from being a currency trader to the ceo of this u.s. division. think about how a market is built. there are infrastructure players and that's where i see myself in our team sitting in.

access ors giving getting access into these new markets. it's critical for these currencies to begin to trade. that is all's connecting liquidity and market interested buyers and the different segments of the markets that need to have access to these cryptocurrencies. be it institutional traders, now even treasuries want access to these digital assets. that is really where binance.us is a u.s. regulated safe marketplace allowing for buyers and sellers to interact and trade up to 50 currencies, whether on your phone, api or a website. at theyou take a look recent rally, i found it interesting that the ownership concentration when it comes to these is increased along with the rally spirit what does that tell you about the retail broadening and what it means for the mainstream development of the asset class? catherine: one of the

fascinating components of digital assets is 24/7 ability to trade. ,his is a shocking trade for us for those who have not been able to trade at different events that ought hours around the world. bringing digital assets into an area where most of the u.s. has been sitting, this is a chance for them to interact with the future ahead of them. where we are seeing people participate on the weekends or evenings around digital asset trading, this brings people under an understanding of where their future is heading. and people are voting and seeing it from their trading activity. we saw a three-time increase of our easiest way to buy bitcoin over the last seven days. that's an insane amount of new users coming into our platforms, mobile devices or mobile app to be able to trade bitcoin to finance u.s. -- to binance.us. it is in proving it, validating these cases, as well as seeing

the retail support and be a part of this digital future. haidi: we are looking at data that suggested over 70% of bitcoin accounts hold less than 0.01 of bitcoin. is it true to say that the big market moves, the big-money price setters are still the early adopters and big players here? catherine: you can see the early adopters experiencing the most euphoria. we are processing technical lines they have only dreamed of. the last ones coming in are the first ones that are learning about bitcoin later in the day than those that were early on and the doctors that were the ods of bitcoin. the best part is that there is not a discriminatory access. you can have an understanding of how bitcoin works, with the ability to come to any marketplace and become available in the market. -- as to emphasize that

long as someone holds onto bitcoin, it's exciting to experience years of this development, but anyone can participate in these markets, and there is an active growth in terms of jobs and what people can take on with digital assets and understanding digital assets yourself. it's never too late to start. kathleen: what about safety? what about cryptocurrencies that have been hacked? where a lot of money was lost. 12 b cryptocurrencies hacked -- 12 big cryptocurrencies hacked, what can you tell us about that? it is still a vulnerable system is hacks can still occur. bad, but0 was not maybe the hackers are waiting to figure out another way to go through it in 2021. catherine: if you break it down

to playing on the internet -- playing in your backyard has some risk asset, playing on the internet has more. every time your interacted you will have problems. you need to take precautions and understanding how the internet works. yourinvolves understanding privacy and taking care of how you store your information and being alert at all times. that is one of the most important things about being involved in digital assets. you need to take the measures to do it safely. kathleen: are you confident that the various exchanges and the various companies that are creating all these different cryptocurrency products have this under control? security of our personal users information is critical. that is our top priority to make sure the information is there for us to understand who our users are. those are all safe.

those are something we continue to improve upon and keep a main focus of the platform, in addition to understanding how liquidity could be improved, as product.he you have to have the priority and emphasis toward security for your user's sake and for your platforms success, first, before anything else. haidi: your call for 100,000 by the end of 2021 that makes a 50% spike. tell us about why you are convinced that is the level it will get at, and is that a fair value? i grew up a foreign-exchange trader at morgan stanley, i know a cristobal is a -- i know a crystal ball is a crystal ball. is not operating in all states. that's a goal of ours.

we have to encourage the education so that people understand the risks of digital assets, but also the benefits and let them get access into this. we have our work cut out for us. anyone involved in bitcoin knows we are not done in terms of the work, effort and innovation. we are seeing great efforts on the regulatory front. a recent piece coming out from the occ is providing a guidance around stable points as being allowed to be used by the u.s. bank for settlements or it same as we use for swift possibly opening the door to more access to digital dollars. with these components in place, we have a lot of momentum heading in the right direction. i can only cheer for bitcoin to go higher from here. haidi: does that mean you are working back from that 75,000 to 100,000? catherine: not a chance. i am bullish. let's go big. but it's a crystal ball.

from: catherine coley binance.us. be sure to tune in for the in-depth analysis from the date -- daybreak teen. you can listen on bloombergradio.com. we have plenty more ahead. this is bloomberg. ♪

haidi: a quick check of the

business flash headlines. you chrysler has merged with the french auto group. becomepproves, they will the fourth biggest carmaker in the world. it ends with a tie up ahead of schedule. fiat managing to catch up relations after an attempt to join first is that forces with arrival. they will take the carmaker into the future. >> we believe that the coming decade will have mobility as we have noted. atand our merger partners psa are intent in building this new future. this ambition that has brought us together. apple supplier foxconn has signed a deal with a startup, marking a big bet on sector. they will produce cars from the start of next year.

they plan to invest $200 million in the venture. they have been struggling to deliver their first electric car after announcing the empire several years ago. bridgerton is on pace to be one of the most-watched shows. rymes has made this show the fifth-largest show on netflix. even though it has not passed money highest, or the documentary tiger king. the most-watched program in 2020. kathleen: let's get over to sophie kamaruddin with the latest stocks to watch. inhie: ahead of the open seoul and tokyo. keeping an eye on shen j motors on news that happened by the governor to export hydrogen technology to china as they factory on the mainland.

samsung also in focus after ericsson launched a new patent complaint against the korean chipmaker claiming it's using ericsson technology for smartphone tablets and television. and on the m&a front, keep an the world'sgestone, biggest maker of construction materials will acquire the japanese company firestone building unit. let's check in on what's going on with trading across asia. new zealand coming back online after a long weekend, playing catch-up. gaining more than 1%, but a little move in the currency space. in australia we see a downside for the asx 200. asx is after we saw the just less than two weeks, but we have pulled stocks gaining ground in sydney. this as we see it stay above $1900 an ounce. given the decline that we saw in

the u.s. dollar overnight, alongside the drop in u.s. real yield. on daybreak to come asia, tesla has had an eye on the electric vehicle market. guest toined by our look at which local drivers of -- rivals are coming up. managementn asset will discuss markets. this is bloomberg. ♪

>> welcome to do break. from bloomberg's world headquarters in new york, i'm kathleen hays. major markets have just opened for trade. our top stories, asian stocks set to extend u.s. decline as they derail the financial group recovery. investors are nervous about senate runoffs in georgia. talks between opec and allies go

for a second day. there are growing divisions between moscow and react -- ria d. the government will no longer be there to save them. let's get straight to the market action with sophie kamaruddin. sophie: checking in on the open in tokyo, that start -- soft start continues with the nikkei 225 and topics up by more than 2/10 of a percent. to theers are sticking run of election in georgia in tuesday. space traders may be sidelined ahead of wednesday's tenure auction, but bonds are rising as we see inflation that the government may announce a second state of emergency for tokyo. checking in on the open in south korea. there watching for lines on

chip industry but the government update pending on the 2021 outlook. the start of cash trade for the kospi and the tech heavy -- korean won on the back end. korean motors under pressure and keeping an eye on shinseki as -- keeping an eye on the stock as we are looking at motors as ev is in the looks. they will build in china. motor shells fall by half a percent. bonds gainng grounds. the asx 200 under pressure, but off session lows have a pickup in iron ore and gold players. offsetting what we see in financial names. we are seeing a change early in the asia session. a lot going on in the commodities patch. crude extending with opec plus not making a decision regarding output. gold stumbling after a five-day

gain that we saw continued overnight in the space of continuing dollar weakness. haidi: let's get market analysis from jpmorgan asset management strategist. great to have you with us. it feels right that we are starting off the new year how we work for most of last year, which is vaccine optimism against the virus. has anything changed for you? >> not too much from what we saw happening at the end of last year. nothing else changes in the market. thinkingtill a case of about that weakness in the economy that will linger from the covid cases rising and the restrictions put in place to control that. but also having the foresight to realize vaccines are being rolled out and we will reach a level of herd immunity in the first, second and third quarters. we will see economic recovery come through. potential corrections

given the valuations of cross quite it -- cross credit and cost equities. ande is earnings growth higher values on risk asset over the course of this year. look at thetaking a earnings recovery estimates that we are getting for the asia-pacific, we are looking at a double-digit asia recovery for 2021. i want to see if we can bring up that chart. 54% recovery seen by the end of 2021 for the asia-pacific. is there a risk of a downside surprise to that extent? it is a largely liquidity driven rally we have seen. you want to see a phenomenal prophet rebound. kerry: if you look at what drove markets over the last 12 months, it has been about valuations and valuations rerate in. that will not happen again this

year. earnings have to come through to support those multiples. that comes between the link of the virus, the spread of the virus and containment measures, and that was broken by the vaccine. that allows the companies to haveback with spending and demands come through and leads the economy to be driven by earnings. it is coming back to those expectations around earnings growth improving. evaluations are loftier and restrict some of the returns we could see. if you look at the data coming out, we are seeing improvement in the global goods cycle. that means we will rebuild and that will benefit the asian markets. kathleen: you are not a virus expert or a vaccine expert, nor in my, however, when people realize that the vaccines, for moderna pfizer's and is, they protect you from getting sick if you get the virus, what they don't protect you from being a carrier.

that is true of other vaccines released around the world, which means social distancing will still be necessary, wearing masks will still be necessary. if that is how it works out and people have to follow the same behaviors, will that be a market disappointment? butay not prevent recovery, it is a part of the worrying second-half comeback that people are looking for. kerry: i think what will drive that recovery is there will be a pent-up demand. liquidity will not be driven by central banks. they have been on the sidelines most of the year. it will be driven by corporate activity in what has and has not been happening. there are obviously those unknowns around how the social aspect of the virus will make change and help with the social distancing restrictions remaining.

there are people who don't want to catch a virus, and we have to look at the acceptance of the virus -- the vaccines that come through and how many people get vaccinated. that will be a telling sign for when we do see that recovery come through. it is about reaching herd immunity around the world. it will have the most negative impacts on markets across the course of this year. expectn: inflation, you it to rise. a lot of people are betting on it. nothing will have changed that much. it's not going to be the problem people are looking for. bond yields could rise. is that something that could put an obstacle in front of the impressive stock rally people are looking for in 2021? there is fear around too much inflation or inflation of the wrong time. rebuilding those and perhaps the central banks that respond to aggressively and hikes rates faster than normal. that are all the fears

feeling. it could upset things. for us, inflation might come up because the basis will be so low. inflation's will spike and it will be temporary and we think the central bank will look through that and the markets will. we are really looking for inflation by domestic demand and that is wage pressure. we will see that come through. it is worth remembering that even before coronavirus, central banks are having a tough time generating that inflation. the inflation will not be a worry. if it comes back, it won't be consistent given the longer-term structures that have been holding back, like technology change in productivity. it is one to watch, but it is not something we have to think about for inflation. kathleen: it seems rollout continues and more people take that shot. that was jpmorgan's asset

management global market craig.ist kerry karina: boris johnson has ordered england back into long -- lockdown. the national health service is at risk of being overwhelmed. the closure of the country starts immediately and will last until at least february 15 as the vaccination program is rolled out. it would further hit retail and hospitality to push the economy into a double-dip recession. you may only leave home to shop for essentials, to work if you absolutely cannot work from home, to exercise, to seek medical assistance, such as toting a covid test, or state domestic abuse. primary schools, secondary schools and colleges across england must move to remote permit revision tomorrow. karina: a possible state of

emergency and around tokyo is deepening fears that the japanese economy will shrink further, despite the $700 billion stimulus package. bloomberg economics sees them cutting 7/10 of a percent off the economy for each month it remains in place. gdp could contract by 5% in the first quarter, and by 10% if the curves are made nationwide. talks between opec and its dayes will go into a second as most nations oppose russia's call for a supply hike. the unexpected extension casts doubt on it hike of 500,000 barrels of oil a day. the market has forecasts and highlights growing differences between moscow and riyad, before concluding consensus. will stay in the gulf as tensions between iran and the west fight. the pentagon decided not to withdraw the carrier as tehran said they would enrich uranium. threats made by

iran against president trump. iranian forces seized a korean tanker in the strait of hormuz with repeated violations of maritime law. global news, 24 hours a day, on air and online and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi: as tesla comes to the end of the first year of selling its shanghai may cars, we will look at its future in china. the mobility ceo and founder will be here. coming up next, pressure on china and the u.s.. we take a look at which companies could be next. this is bloomberg. ♪ - [announcer] imagine having fuller, thicker,

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felleen: chinese stocks

again on the prospect of further delisting from american exchanges. our chief north asian correspondent stephen engle joins us from hong kong. telco sectord the are these delisting concerns spreading? they are spreading, to the tech sector, beyond and in the oil sector. we saw those concerns on wall street overnight. the adrs of the telco companies are obviously falling again. .hey are all falling also in the tech space, we have seen pressure on alibaba for quite some time following the collapse of the ant financial ipo. but this stock is down 20% since its peak on october 27. alibaba, jd.com, all were weaker overnight. possible further executive orders coming from the white house in the remaining

days of the trump administration are fueling these concerns. i will get to the oil companies in a second, but i want to concentrate on the chinese telcos. the nyse announced that they delisting these companies between january 7 and 11th grade it really signals the end of an era. we saw china mobile was the first in the red wave that we saw back in 1997 to list in the united states. it did not fare well, but it did usher in more than two decades .f chinese listings u.s. listings, mostly the bulk of the shares are out here in hong kong, but they still have 1.9 trillion dollars of listed shares in the united states. they have raised upwards of 144 billion u.s. dollars, offering u.s. investors access to the

booming chinese economy. a lot of that is starting to unwind, but big question marks surrounding what the biden administration's pack will be following the inauguration. haidi: we know that the chinese thegiant has been one of aegis players to have this military link. does this mean that chinese oil will be the next sector targeted? they areo -- stephen: on the pentagon's list of companies that have ties with the military. there was petrochina and sinopec. sinopec did start lower but it did close up a little bit higher. regularly seen as the potential next target and it is being reflected in the shares right now. they fell 4.2% overnight with

1.3 million shares. that is the most since 2008 for .his offshore oil the hong kong traded shares, that is the bulk of the shares, they have traded lower for four consecutive days. we are also getting a report from the chinese state media from the global times. they are reporting late yesterday that china may inaliate for these delisting the united states by requiring u.s. companies that are doing business in china to also reveal their ties to the u.s. military. playing a bigtics part in the u.s.-china relationship on the markets, on both sides of the pacific. haidi: our chief north asia correspondent stephen engle there. we will stay with china. pressure on chinese companies back home. authorities are telling them how they will prepared to fail.

beijing wants to read out firms that will be less willing to say failing businesses. our reporter has more. we have heard this sentiment for a long time in terms of market the firms becoming more marketable by failing. why the timing of the intention that they will get cut now? >> i think that is a really important point to make. in some ways, this attempt to financial discipline and the financial markets, he gives a return to the dynamic that we have seen china for quite a long time. in some ways, is -- the tick up in default is the return to what we saw in 2019. in terms of why now is a couple of things going on. obviously with the coronavirus hitting china very hard in the

first half of 2020, we saw a lot of measures that were introduced to avoid things getting out of hand. essentially destabilizing. now there are signs that the economy is improving, china is able to get back to business of what it was doing at the end of 2019. and the other dynamic, which is ongoing is the intention between china and the u.s. of course there is tension and concern that china has been heavily relying on u.s. markets for quite some time. kathleen: what kind of things is china doing to clamp down, and what does it mean for companies this year? measuresare several particularly aimed at the debt markets improving discipline in the capital markets. and particularly aimed at

replenishing firms that aren't necessarily up to scratch. so china is chiseling the national prison sentence for security fraud to 15 years. it is a significant change and it is shortening the delisting process to unprofitable stock. we have seen a big push to improve oversight of china's local credit rating industry. which the regulators have been coming at quite hard to try to improve. what we are expecting is that smaller, weaker firms are going to be hit harder from the provinces. and the property sector. we might start to see some polarization between the smaller and larger firms, and potentially even some consolidation this year. kathleen: our china credit reporter, thank you. mike pompeo regrets the u.s. has not made more progress in what he calls the hard issues with

china. speaking on bloomberg television, pompeo says he believes china will deliver on a stage one trade commitment. you have been tough on china and human rights issues that they have been involved with with respect to hong kong and a new security laws there. do you have any hope that china will ease up on its constraints on hong kong, or do you think that is a --? i hope i am wrong about that, but everything we have seen for the past year has indicated that hong kong will become nothing more than another communist run city with special status. they broke the promise about halfway through. now the people of hong kong are living under threat with the national security law, which was referenced that the actions they take those to limit what they

are ready had. some people were doing what we would consider our first amendment rights to protest and put in jail. it is very telling to the group of people who chose to flee hong kong and they have now been imprisoned and tried inside of the mainland in china. that is a bad sign. we know it happens when countries begin to jail people who want to leave the country. it is very telling. we saw this history in europe. when people close their borders, not from keeping people out but keeping their own people in, that is very telling about the particular regime, and the threat that they feel, and the fact that their people may decide their country is not the best place to live. david: you have been tough on the islands china has been building in the south china sea. you have any doubt that they are for military purposes only? sec. pompeo: those islands have been built with the intent of the china communist

party to influence shipping lanes all throughout, not only the south china sea, that the east china sea all around through the indian ocean. --y are attempting to create i talked about the region being an effort to create a chinese empire. the united states should never permit that to happen. the trump administration is working diligently with our friends and partners in the region to slow them down. david: china and the united states had tough trade negotiations. the first phase has been impleaded. do you think we have gotten out of the first phase? what you thought we would get with chinese purchases and more access to the markets, or has it not happen yet? i think they will deliver on the commitments they made in the phase when trade deal. it was slowed by the fact that the global economy slowed down, but they said they would, and we have seen indications that they intend to comply.

the regret is that the big thees on the hard issues of trade relationship between the united states and china have not been resolved about intellectual property, intellectual fairness and reciprocity and the fundamental investment rules for a broad range of industries. the protection of assets and properties that is american owned property & of china. those things of essential to make sure we have a fair and balanced trade relation with china, the communist party walked away and that work remains to be done. secretary of state mike pompeo speaking exclusively with david rubenstein. and you can watch more from that interview in an upcoming episode of the david rubenstein show. this is bloomberg. ♪ (announcer) do you want to reduce stress? shed pounds? do you want to flatten your stomach? do all that and more in just 10 minutes a day with aerotrainer,

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haidi: a check of the business flash headlines. fiat chrysler has merged with

psa after shareholders approved the plan that the company will become the fourth biggest carmaker in the world. years of talks ended with a tie up ahead of schedule. they are managing to catch up relations after joining forces with psa's rival. they said it takes the carmaker into the future. decade willg redefine mobility as we have known and. at psaour merger partner are intent on playing a leading role in building this new future. with this -- and that has brought us together. haidi: apple supplier foxconn has signed a deal with the electric start up, marking a big sector.the ev they will produce cars next year, with foxconn planning to invest $200 million in the venture.

they have been struggling to deliver its first electric car after announcing --'s several years ago. coming up next, assessing what it takes to get an agreement with russia as negotiations go into effect. this is bloomberg. ♪

this is "bloomberg daybreak: asia." the atlanta fed president said central bank policy makers may taper bond purchases if covid vaccines boost the economic outlook. rafael told reuters he is hopeful that they will start to recalibrate in short order. he added if the situation can strengthen significantly, and the fed can discuss the appropriate response. a monetary policy voter this year. cleveland fed president is calling for a steady approach to the u.s. economy with continued monetary and fiscal support.

she expects a bleak winter before a vaccine driven midyear rebound. she says current policy should remain unchanged, even as the economy picks up all the way until the feds in point man and inflation goals are met. we will talk to cleveland's lauretta about the economic recovery and how women have been disproportionately affected by the virus on friday. saudi arabia is reopening the borders near qatar easing a diplomatic risk ahead of a meeting with regional leaders. saudi, the uae and egypt have relations and talked about their proceed ties with iran. the opening comes with joe biden bowing to resume talks. the council holds its economic summit in saudi arabia tuesday. and alibaba spokesperson declined to comment on jack ma's whereabouts. the company's cofounder has not been seen in public since chinese regulators found the billion-dollar ipo, then

launched an investigation into alleged monopolistic practices at alibaba. adr fell 2% in new york after a similar fall in hong kong. hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. kathleen: let's get right to the market action with sophie joining us in hong kong. we are seeing trading for the regional index under pressure after hitting a fresh high on monday. on the calendar we got inflation sales on the no heavy hitters. kiwi stocks by the outliers, playing catch-up after the long week. we are seeing the kospi gain some ground, but we have remarks from the finance minister. there is growing concern around

the market and the economy. this as we see strategists project double-digit earnings growth for the kospi, alongside other indices in the asia-pacific region. the nikkei two to five under pressure by easing earlier declines as we see electronics gain some ground. let's check in on what's going on in the currency corner. we are seeing muted moves. the korean won is leading in the session. the yen has little change, back above 103. for the a two-week high japanese currency. the dollar has just a little change after we saw it fall to a february 2018 low after inflation. gold is falling somewhat after a five-day gain, holding about 1940. let's take a look at oil,

it has been a rocky start to the new year for oil futures. opec talks tracking on with no decisions about future supply hikes. su keenan is following the actions. the opec-plus conference going into a second day, encouraging be an eye of front with everyone other than russia. causing prices to dip. the opec-plus meeting reconvenes tuesday afternoon because most members, including saudi arabia oppose russia's proposal for a february supply hike. most members want to hold output levels because we are looking at a fragile market. if you look at the price of west texas -- west texas intermediate trading in the u.s., it was down on his 2% after swinging between gains and losses. it's down on extended trading that we are seeing in asia even

further. if you look at the big picture, it was on the road back to $50 after falling below zero shortly after the pandemic began here in the u.s.. concern about the direction as we get into 2021. brent crude has been under pressure. only partially recovering from the big dip related to the andemic, hitting in march april, so now you are seeing it is not yet back at the levels we saw this time last year. in the monday video conference, we know that the initial negotiating -- negotiating position of saudi arabia was to reverse the 500,000 a barrel per day production increase. the group already mated this month. members all most favor that, but as mentioned, russia is really pushing for the maximum supply hike allowed by the group, and that right now is

creating an impasse. back to 2020,ing when the virus was hitting him a lot downs were starting, that disagreement between russia and saudi arabia is what helped cause oil prices to just collapse. so what is expected in this latest head-to-head between the two opec powerhouses? u: when the two leaders are in disagreement, and they are the de facto leaders, it makes the talks tricky. there is concern that because of the discord, opec could emerge from these talks without a clear contentious or even worse, russia would be put in a position that weakens the alliance. there is this expectation that there is a shared concern by all of the producers that this new strain of the virus does create

yet another threat to the oil market stability and to oil price, and they need to work come to some agreement. russia pushing for the 500,000 per day increase is likely not to prevail in this meeting tuesday because it is the reasoning for the meeting -- reason for the meeting on tuesday. oil producers are worried about of oil recovery, the price recovery collapsing. onsia is currently focused market share with the rest of the members really focused on the value and prices that they can get. opec-plus, as you may know, producers are idling 7% of the world -- world oil and deciding how they were going to taper that they haduts volunteered in the coming year,

and that's why they have now agreed to meet on a monthly basis on the january monthly meetings already showing some applications. su keenan the latest on opec. hittingp next, after delivery targets for 2020, we will look at what role china will play this year. this is bloomberg. ♪

so close tosla came meeting its goal of half a million deliveries for 2020, now the stage is set for a new year with new factories in china amid competitors.local let's discuss the challenges for russowithout -- with bill who joins us from shanghai. explain to us why and how the chinese market is so important to tesla's recent sales and success and its future success? represents, already for tesla, almost 25% of the total sales volume. that is roughly about 40% in 2021. it is the largest by far in electric vehicle markets.

that, you have to have access to resources to build the vehicle. so the supply change and the ability to scale the production is critical. in fact they have had terrific sales and have had terrific support from the chinese government in terms of coming up and setting their protection -- production facilities up. tell us now about some of the .ompetitors whose numbers tesla still leads electric vehicle sales in china, the you look at these three together, and the three of them are posing a challenge to tesla. tell us more about who they are and how they are getting the success. the market in china is already over one million units. has a little more than 10% of the total market.

so even though they are large, there are other names out there. more than 80% we think of the market will be local. companies, as well as multinationals who have yet to really enter the scale into the market. nota is a big player, but the only player. some of these new or companies, like the ones you mentioned now have sold over 7000 units last month, the best month ever. over 6000. they are all on similar trajectories of significant rise in sales and i think imposing a competitive threat not just in unit sales, because this market is not just about how many units you sell, but how you monetize the vehicle after the sale. one of the reasons tesla is one of the most valued company in the sector in the world is because they don't just measure it on their ability to sell cars, it's their ability to brought -- to provide a new way

of thinking about energy and how to monetize the electric vehicle beyond its sale. that's what these chinese companies are doing. they are bringing not only the electric vehicle as an energy device, but also as a digital device. they are invested by the internet economy in china, which is a huge disruptive force to this sector. is there a policy risk as well, particularly if we don't see it in u.s.-china trade relations? we see that chinese potentially looking into new companies that have these ties after president trump had his executive order looking into these chinese companies and they had ties to the military and china. is this tit for tat? is there a chance for this becoming caught in the crosshairs as a foreign brand, particularly with the encouragement of watching homegrown brands to succeed?

bill: geopolitical risks are present, we can't ignore them, but the reality is, the tesla votes for china makes tesla sticky in china. tesla has been this tip of the sword for opening up his retail consumer interest in electric vehicles. much like the apple iphone did for the smartphone. what tesla has done is they lit the candle and shown the market the way towards electrified vehicles and raised consumer interest in the category, which is good for china and the market for building electric vehicles, it's good for china as a market for retail consumer interest. the china has a national policy for electric client transportation, and tesla ask as a catalyst for that transformation. haidi: do you think that they would need to cut prices for the model 3? interestingly they have

already made significant price moves because of the competitive pressures of what they have. they need china to scale their global business. as i said it has been 40% of the total volume. so i think they will be very competitive on price, the good news for tesla is they have scale advantage for the time being, being the largest global player and the electric vehicle competitive set. that is something the chinese rivals cannot match. they have the home court advantage but not the global skillet tesla has. kathleen: you are mentioning tesla's global scale. elon musk must be finding this industry is much as steve jobs did with the apple iphone years ago. in terms ofey done pleasing the chinese government? i mentioned how they really musk toe way for elon come in. is there a lesson about how he handled his pr, his relations

with the government? \ i think it legitimizes the multinational brand that was respected amongst the global community and also in china. they legitimized the sector. what did they do differently? i would not say they did a whole lot, they have 100% factory. i think that was china's effort to show that they are willing to make the market accessible to companies like tesla. but there is only one tesla. there is only one global eb brand at the moment. i don't know that they will get the same deal from china as they did tesla. tesla brings consumer interest and significant supply chain and aggradation both of that supply chain to a market that really wants to lead. scale,let's talk about

it took them eight years to get to about 5000 mark. we are hearing that it could potentially get to one million by next year. do you think that is achievable? bill: one million is a stretch, but i think 500,000 is clearly in sight. the modelintake for y, which will be the high-volume model is quite strong. there will continue to be a rise in the sale of the other products in the portfolio. introduce local production, you can achieve economies to scale and price benefits -- cost benefits, i should say, that allows them to grow. and the market is growing exponentially. ofna's target is to be 20% the total sales of vehicles by 2025 to be electric. and the segment leader will go with that. to have yous great with us.

bill russo there with the outlook for tesla this year in china in particular. we do have some breaking news when it comes to the most valuable startups. app advanced discussions about merging with the local e-commerce of the pioneer. we are just getting some details about these discussions, potentially hearing that people with knowledge of the matter saying that these advanced discussions would create a merged entity that would mean you get the indonesian internet powerhouse with a combined valuation of more than 18 billion u.s. dollars. these are the most valuable startup together. they are worth about 25 billion u.s. dollars. they have, according to outsource is, signed a detailed term sheet. it's about the due diligence of their businesses. they see potential to close the deal in the coming months. we would be looking at a business that ranges from ride-hailing and payments to online shopping and delivery.

if you want a comparison, it's a local mash-up of uber, paypal, amazon and doordash. they have plans to go public in the u.s. and indonesia. global banks are cutting positions in most parts of the world. china, we will discuss what is driving demand in the chinese market. this is bloomberg. ♪

theleen: a quick check of

business flash headlines. erickson has launched a new patent lame against samsung potentially pitting the u.s. and china against each other. -- of samsung devices samsung mobile products. the two companies have been fighting for at least six years over crosslicensing agreement. google and its parent alphabet are forming a union, with years of tension against management. alphabets as it will be open to all contractors and will have an elective board of directors. union organizers say google has made more concerns about workplace conditions. areon, berkshire hathaway shucking their health care venture after failing to unite finance around staff welfare. close marks the end of three years of struggle to demonstrate meaningful results.

banks are cutting analysts in most parts of the world. china has risen to a record for a fifth straight year. our china financing or editor joins us from hong kong for more on that story. why are we seeing this demand for analysts on the mainland? ofsimply put, the profits china is the golden chalice for investment banks. the chinese economy recovered quickly from the pandemic. banks relax full control in the country. we have seen jpmorgan's boost hiring. goldman sachs plans to double its workforce the past two years. there is 100te billions in profits to chase down.

the big banks want to grab a share of that. it has been tough over the past years. kathleen: how do you think banks are calculating the situation? >> so far, so good. at least on the surface as they perceive the orbit. i am touched by the political tension in china, the u.s. and to some extent, europe. last year we saw with goldman sachs and a slew of others. situation it is the of which the abrupt change of regulations happen. china is handling the opening and officials have given no output on if they will go back on the commitments. economy, andp the it also bolsters financial

stability and it creates more discipline in each capital markets. even as we continue to see these tensions rise or at least failing to be deescalate it between washington and beijing, are we still seeing a healthy amount of interest in wall street wanting to push further into china and follow these joint ventures that have been set up? >> without a doubt. jpmorgan has recently moved up .o over 70% sachs was given a not just a month ago or two to take full control or to apply for full control of its joint ventures. it is a broad-based interest in china. on the brokerage side, on the insurance side, but especially on the wealth management side

where china is transforming its wealth markets to moving to more of a mutual fund private wealth where theseness take the stakes in the economy. china's economy is doing well and it is creating a growing wealth. it is really a prime market for all of these global banks to target. our chinathanks to finance editor. it has been a mixed day in the asian stock markets, but there is some green on the scene. it's find out what socks -- stocks we should be watching. ahead of the open, more adr listings take effect. was removingch on the company from their global companies respective thursday. and more china secondary listings from here in hong kong. unwatched.

especially after city raised its .rice target i 90% there was a jump with the exchange having a boom. tencent focused on the u.k.. they form an e-commerce with the company to help japanese firm sell products in the chinese markets. the supplier will report december revenue. it had forecast the fourth quarter back in november. it's get a quick look at how markets are trading so far in the session. decline ease up across the board. nikkei 225 trading with the kospi on the upside. it is lower in sydney. keep a close eye on what's going on with the dollar, which is trading at a 2018 low. we have a reflation coming back into the focus. and the bond paper could likely drive markets estimates. coming up on bloomberg

markets, we take a look at the centex climbing on vaccine optimism and a focus on india's bright spots in 2021. ♪ this is bloomberg. -- this is bloomberg. ♪

>> it is 9:00 a.m. in beijing and shanghai. i'm tom mackenzie. >> i'm david ingles. counting down to the open in china, stocks across the region drifting after declines on wall street overnight. fears of surging virus numbers will