>> this is bloomberg daybreak: asia is. our top stories this morning. jay powell repeats the mantra that the fed is nowhere near as the economy continues to struggle. central banks rushes aside concerns about stoking inflation and a stock market bubble. speaking of which, gamestop is now grabbing attention on wall street and washington as well. they are monitoring volatility

as retail investors squeeze shortselling hedge funds. coronavirus cases hit another record high in the uae. a 36 year on your slump, we speak with the group ceo. i am used -- yusef in dubai. disappointing tech earnings overnight. the biggest drop for the s&p 500 since october. we are looking likely to expand -- extend those dips. this is amid the winning confidence that u.s. legislators are going to be able to hammer out something around fiscal policy, the bloomberg dollar

index. this is the biggest move we saw overnight with brent crude coming under pressure. crude inventory fell to the lowest level since march. they were not really able to push through some of the negative sentiment. let's go to our charts here. gamestop is on the minds of investors and our global audience. the frenzy has reached mr. biden and mr. powell. it is shaking everybody up because there is a lot of leverage in the system, no doubt. this gives you a sense of the disruption extending to other parts of the market. these are the most shorted stocks and they are becoming very costly. too short. this is the most shorted list. you can see some of those time with spikes. analysts are going to be looking toward other stocks that could be next in line. potential targets include biotech and sun power.

these interest levels are about 30%. let's get to some other metrics in asia, specifically. >> certainly a day of selling after what we saw on wall street. we have stocks following the most since october. we have regional stocks under pressure. you mentioned disappointing tech earnings in the u.s. where we also had samsung disappointing the market too. samsung also warning of a tough first quarter ahead amid the covid-19 uncertainty. you have the south korean market down by about 1.7%. we have been watching what has been happening between the bond yield and the key money markets in china. we were expecting some money going into that system via the repose ahead of chinese new year.

we heard earlier in the week that they were trying to curb sentiment. we have a bit of a knee-jerk reaction with hong kong and china markets falling before they went on the lunch break. they will be back out of that in about one hour's time. yusef: we will be back with you later on. let's also get to the first word headlines from around the world with some on fox. -- with simone. simone: coronavirus infections seem to be easing in the u.s. with andrew cuomo listing restrictions in most hotspots -- lifting restrictions in most hotspots. elsewhere, the european union is in dispute with astrazeneca over vaccine supplies, putting the drugmaker on collision course with brussels. france is delaying a decision on a third national lockdown as cases arise. the u.k. government is warning the national lockdown will continue for another six weeks.

schools remaining shut and new border quarantine rules enforced. orest johnson says the measures are being reviewed but they won't be eased until march at the earliest. people arriving in the u.k. from virus hotspots are now subject to 10 day quarantine isolation. travel inside china is flowing -- slowing as people are urged to avoid journeys ahead of the lunar new year. rush-hour traffic, congestion in beijing and shanghai is below typical 2019 levels for a second week in nejra according to data. the cutback may affect china's oil demand. the international olympic committee is increasingly confident that the tokyo games will go ahead in july with a so-called -- safety inflation. measures around the world will indicate that the games -- have

indicated that the games will be possible. japan has spent about $26 billion preparing for the tokyo games. bubble news, 24 hours a day, powered by more than 2700 journalists and analysts in more than hundred 20 countries. -- 120 countries. yusef: jerome powell has pledged to keep monetary policy caps wide open to aided the pandemic economy. rushing aside concerns that the banks super easy stance will make for more inflation. reporters kept asking him about the gamestop frenzy. >> the economy is far away from the implement and inflation goes. it is likely to take some time before substantial progress can be achieved. in terms of tapering, it is just premature. we just created the guidance, it

is too early to be talking about dates. it will be quite a while to get to the numbers that the experts say are required to get to herd immunity. we think it is going to be a struggle. the pandemic still provides considerable downside risk to the economy. i would add that we are a long way from full recovery. something like 9 million people remain unemployed as a consequence of the pandemic. that is as many people who lost their jobs at the peak of the 2008 global financial crisis. >> let's bring in our guest. this whole talk about an exit is just too early according to the fed chair. the tapering is not anywhere on the horizon. in your kind of analysis, what were you able to conclude?

>> we naturally agree. i think the fed has made it very clear that they are not only from meeting and discussing a date around tapering but they are willing to look well past 2% inflation if it means getting the employment figures back around a more normalized level. this is the story for this year. we are going to see an increasingly loose bed. we will see her coronation between janet yellen's treasury department and the fed. i think those will be extremely loose fiscal and monetary conditions that we will see this year to support the recovery. yusef: the fed chair dodged questions around that, prices and gamestop. here are some of the highlights about this from our guests that

we have asked. >> this was a risky short to begin with. i would characterize -- >> i would characterize the market as a boolean bubble. >> if you go skating on the thin ice of investing, don't be surprised when you fall in. >> we have some tools that track the changes in chatter on social media. we think there is something unusual or even more nefarious going on -- if we think there is something unusual or even nefarious going on, we can halt the stock. >> i expect regulators will respond to this after-the-fact. it will happen well after the crowd has dispersed. yusef: let's get back out to karen -- kieren. that subreddit has 2.8 million

members. do you think it is time for the regulators to take a more clear stance around this given the potential risks around the leveraging both on the long and the short? -- deleveraging both on the long and the short? >> certainly, it is. but it will probably be too late, nothing to see. obviously, this is a reflection of increased retail worker participation in the market. i think it is a few extraordinary situations and we probably won't be talking about it in february or march. yusef: you see this as more of a fad. is this an opportunity as far as you're concerned when it comes to u.s. stocks?

despite some of the disappointing earnings? >> absolutely. >> eric review is that -- our view is that this year will be about global recovery. there has been some key is tribute and problems at the beginning but nobody prefers to work and live at home all the time so i think it will be pretty quick. there was earlier talk about some of the consumer facing technology names coming out now. we will have some of the payments over the next couple of days. those consumers will be a little volatile over the first quarter. if you look into the industrial and sickle -- cyclical parts of the economy, we are getting strong signals from the likes of tms see. last night, we had some very strong numbers suggesting a big

reinvestment cycle. a lot of this coming out of asia, china and particularly, autos in the u.s.. they are signaling that we are at the beginning of that recovery but if you focused only on the consumer side, those numbers are going to be a bit volatile in this first quarter and probably the next one as well. yusef: are you still subscribed to the reflation trade as the thematic focus of the next three months? the treasury yields will get back to where they started the year at and the delta will resume its weakening path? is that the thinking? >> that is our expectation. we started off very strong in early january. whatever the short-term catalyst is is not much of a surprise. this is not our base case

scenario for the year. maybe not three months. one of the key drivers is a vaccine. it has been a little bit slow and spotty. but certainly looking into the second half we think it is going to become very clear that we are in the middle of a cyclical recovery. yusef: hold that thought, we still want to get to some of your other views. more to come on daybreak middle east, this is bloomberg. so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.

yusef: china central bank is withdrawing short-term liquidity at the fastest pace in three months as it tries to draw in the rapid buildup of leverage. this is the largest amount that has been taken out since october. our guest is still with us. the commentary from the pboc

appears to be that we are not really going to mess around with this until much later. the facts of the matter speaks to a different story. >> agree. we certainly had a warning around the asset bubble earlier in the week. while the open market actions were a surprise, i guess we have to consider where we come from. we have had a very strong beginning in january, especially in china and china onshore markets. we think that china and domestic china will be a leader in terms

of recovery. sort of a first in, first out of the pandemic. we will have gdp growth from china over the course of this year. yusef: the markets are saying that the money rates typically tend to rise in the lunar new year break. that begins in mid february of this year. this could actually translate according to seasonality. how does the pboc move from here? what do you think they will do? >> we expect the pboc to remain very loose over the long-term. they have a lot more tools at their disposal than some of the other central banks. that is what we expect. this short-term around important eights -- dates around the calendar, we think it is short

of short-term. over the course of the long-term, we would expect the pboc -- yusef: i am looking at some of the asian stocks. the rally and south korean stocks that appears to be running out of steam as volumes begin to shrink, where would you tell investors to perhaps buy into weakness specifically given the strong rally that a lot of these indexes and individual companies had in a very short amount of time? >> the current weakness is an opportunity to buy into markets and sectors that will benefit from cyclical recovery.

this will include some of the north asia markets like korea, taiwan and don't forget that japan is a great play on global cyclicality. those are areas that we would like to add. we would do that in anticipation of sharply improving in the second half. yusef: thanks for that. that was kieran. plenty more still

yusef: let's get you a quick check of the latest business flash headlines. samsung profits amidst -- chip prices remain weak. the december quarter was 5.8 billion dollars. that is below the average forecast in the bloomberg

survey. samsung has struggled since releasing his first 5g phones. apple has reported -- releasing their first 5g iphone. sales jumped to 21% for apple. beating analyst forecasts. iphone sales hit $5 billion. tesla slumped in trade in a sixth consecutive quarter. $.80 per share. that is well below the blowout 2.14 dollars a year ago. tesla has had sustained income growth. revenue hit him at $11 billion in the december period. dubai is putting more curbs on

travel and hospitals. simone is watching the headlines. she joins us. what are the new measures being taken here? simone: these are measures around travel. making the time between which you have to get a pcr tests and can enter the country, pulling that down from 96 hours to 72 hours, making those mandatory for everyone. finally, requiring a hospital visit. they all have an appointment. this is the second time in a single week that dubai has up to ante on these restrictions. we have not seen this spill into the overall broader market. the dubai index -- we are starting to see an impact on

this. people are going out and spending money. 6.6% in the past couple of days alone from january 19. we are going to have to watch other bits of the economy as we see these cases rise. yusef: with wall street ties on saudi arabia, the country was the future goldman -- initiative. can you run us through some of the details? >> this is coming from a friend of the show. they are saying that saudi arabia won't be able to get the budget deficit down, even in 2024 with them projecting a budget deficit of 4.1% by the time. he cast aspersions on saudi arabia's plan to cut back spending.

the kingdom is looking to cut back spending by 7%. that is frankly not going to happen. it will be roughly flat. the only positive way the kingdom could take in more money is that the oil price may be higher than initially predicted. we are seeing lots of investors watching the future investment conference this week. publicly, they are making an appeal for foreign investors to come in and it support from $40 million projected annually over the next few years. it may need that foreign investment if it wants to stave off some of the pressures it will see on the spending side. >> we also have news from iran. antony blinken's first public briefing and the role, was sort of strategy did he outline? >> every word here being parsed

very carefully. blinken saying that iran will have to act first to return to compliance with the 2015 nuclear deal. the jcpoa. that is going to be a baseline for the u.s. to do anything else. he did not map out plans for the u.s. scale back some of the sanctions on iran, not setting a timetable. this is all likely to be in opposition to what leadership in iran wants right now. the foreign investor in iran has said the united states needs to act first so we are watching this back and forth of these two countries. both pushing each other to act first. these economists are pretty bearish in terms of this six-month timeframe we have until iran goes to the polls in a new election in june. yusef: stick with us.

coming up, we will be talking about -- joined by the ceo of the commercial bank likely to be in focus in the market after reporting earnings yesterday. let's get back to the markets. we are looking at a bit of a somber session. a bit of downside. the s&p 500 is lower by .3%. the lack of clarity on the fiscal side in the united states, that weighed on sentiment. goldman sachs and jp morgan -- the bloomberg dollar index gets a lift by .5%. -- .6%. i want to get to bitcoin now. it tells back below $30,000. the record momentum began to fade. the head of the vis said that bitcoin may break down altogether. investors made -- must be

cognizant that the point is at risk here and central banks should be the only issuers of currency. this is bloomberg. ♪

yusef:yusef: this -- yusef: this is daybreak middle east. paypal repeats the mantra that the fed is newer near stimulus. central banks are talking inflation after the stock market bubble. gamestop is now grabbing the attention of the key voices on wall street and washington. the fcc and the white house are monitoring the volatility of retail investors shortselling hedge funds. coronavirus cases hit another

record high in the united arab emirates. in qatar, a 35% year on year increase. we speak to the ceo in a moment. juliette: asian stocks falling for a third session and dropping the most since november after we saw those jitters on wall street. a lot of concern about tech earnings. we have that here in asia as well. samsung warning of weaker results for the current quarter. we have markets down across the region. have a look at vietnam, down 6.5%. hong kong and china on the lunch break but they have also been under pressure after we saw the pboc withdraw some more short-term liquidity at the fastest pace in three months. let's look at the bigger picture because you have been talking about some of these wall street

heavyweights saying we should buy the dip globally. they are actually on track for a very solid january. their best january on record. you can see that reflected their by those green bars showing the positive momentum you have been seeing across the previous months in the asian equity market. yusef: a redhead line crossing the bloomberg. this is the world's largest automaker again. toyota overtaking volkswagen. we are down a little bit on the stock but this is probably a negative market. the gamestop mania has prompted a surge in australia most shorted stock. -- australia's most shorted stock. juliette: it is quite extraordinary. particularly how much we are talking about gamestop.

gamestop is quite extraordinary. what we are seeing is a lot of these short stocks in australia moving. look at gme. this company could not be anymore different. it is an explorer for gold, nickel and copper. it has jumped the most since january of 2017. this is -- a lot of the other short stocks in australia like these ones here have all been rising quite substantially. in gums -- inghams is a poultry firm. yusef: thank you for that. let's stay with the earnings. the commercial bank of qatar has reported an increase in net income. for more, we are joined by the group ceo.

joseph, let's start with a bit of a characterization of how the last quarter really came through and whether the worst is over at this stage. joseph: i would say the pandemic is a predominant factor. that has resulted in the buildup of provisions that we mentioned. mainly cautionary buffers. i think the big provisions along -- emerging in the second half of 2021, one in forbearance and support measures lifted. i would say that is the primary impact of covid. we saw some impact on revenue. interestingly, domestic spending succeeded pre-covered levels. overall, operating income only dropped about two point 5% because some areas rebounded quite strongly. the other factor was a payment

that we took on iue associates. we are cautiously positive that the second half of 2021 should see a stronger growth outlook. juliette: i want to -- simone: i want to ask you about the resolution of the gulf rift habited -- that happened earlier this year. where are you looking to expand regionally? is that something that is worth your while despite your experiences? joseph: i think the blockade is positive for sentiment. red cross risk perceptions for the whole region, really. affected sectors by covid like hospitality, tourism, retail, that will see positive sentiment

but the removal of uncertainty is the best outcome for everyone in the region. i would say that in terms of our strategy, we have investment in tokyo and the uae. we are not looking to go further afield. we would like to concentrate on these investments to make sure they start generating a return that is closer to what we can generate in our domestic markets. as of right now, i would say that is our core focus. >> let's break that down in a bit more detail. would you be willing to sell at the right place -- price in turkey? are you in for the long haul there? >> i would say we are in for the long haul. turkey is an important market, it has a strategic relationship with qatar.

as an example, this has reduced from 4.5% to 4.6%. we think that turkey is an important market for us. our focus is on improving and returning -- seeing a return on equity. simone: we have seen changes in the central bank and the finance ministry. we are also looking at a higher npl ratio. are you changing your strategy? have you shifted it given what has happened in the market over the last two months? joseph: absolutely. i would say that turkey had some policy volatility last year. it will be positive for the banking sector.

we have been adopting a conservative approach about two years ago. we actually improved last year and it is better than the market. once we look to optimize the net interest margin in our cost base. yusef: i am wondering what options might be on the table for domestic or local consolidation. there are profit pressures not just for your banquet many of the lenders in qatar. we saw this a couple of months ago. those tangible ways of finding synergy and basically fusing. is that something that you will more vigorously pursue in 2021? joseph: i think consolidation is good for the overall banking sector. the number of conventional banks

have come down from six to four. our focus is primarily on organic growth in qatar. we have the positions in retail and corporate. we don't see any huge value add from doing any sort of merger in this market. never say never but our focus is on improving their financials so that if an opportunity arises or if something were to happen, we would be the consolidator, not the consolidate he, that is our prime focus -- consolidatee, that is our prime focus. simone: you shifted more of your interest. it looks like qatar will trim its overall spending. not only as we near the world cup but also to keep budget in line for the coronavirus response. what are you foreseeing? how does this change your

strategy if at all? >> our strategy for veins, we have increased the public sector exposure from low to single digits. we were at 6% three years ago and now we are at 17%. we are still below where the markets have ridges. there is still call for us to grow. the government is adopting the fiscal stance. they have rebounded above their budgeted level. we think there is still fiscal flex ability. there is a lot of investment in the northfield expansion. there are still a lot of opportunity for us in this space. we are committed to increasing it further into the 20's. that is our goal. that would be more in line with the market for exposure to the government and the public sector.

yusef: it has been a real joy catching up. think you for your time. that was joseph abraham. saudi arabia meantime, their flagship investment conference has begun with top global asset managers, dicken at 2021 would bring a return to growth. within it, arise and inflation. -- a rise in inflation. >> the markets, especially the u.s. market and some of the global markets went to an all-time high. that created to my mind some kind of inequality. also, the real working class. >> how do you see the markets in

2020 one? do you think there will be as buoyant as they were in 2020? >> i don't think they will be as much so in the next year. as we go into this new time, i think you will see a pickup in growth and inflation. with that, you are also going to see a pickup in deficits. that pickup in deficits means that the government is doing that and the united states will have to sell a lot more months to the rest of the road. the supply of bonds will come to the best of the road. i don't believe there is enough demand for those bonds when we look at the supply and demand picture. it is reasonably likely that by later in the year, you will have to see the federal reserve come in and buy more of that -- those bonds to make up the gap.

it is going to be a very interesting and challenging year. >> larry, you have your pulse on the finger -- finger on the pulse. our interest rates likely to go up at all in 2021? >> the real thing will be underestimating wage growth as we rebuild our economy post pandemic, the need for job creation as we created a large-scale infrastructure, projects to rebuild our economy. you have $2 trillion of deferred maintenance in our infrastructure in the united states. i would clearly say by 2022 and 2023, we are building a new regime. when ray and i started in the business, we grew up in an era of inflation. >> thomas, can you tell us in

europe, will brexit be a good thing or a bad thing for the economy? are you worried about the level of debt that the european central bank has incurred to help keep the european economy strong? thomas: in the short-term, i think brexit is not a good thing for europe, the eu and the u.k. but coming from a country that is in the heart of europe and not part of the eu and is doing very well, i am convinced that also, the u.k. will do just fine over time. they will find their bilateral agreements, their trade agreements, they have a very strong financial center, they have a flexible labor market. in the short-term, it is a challenge but at the same time, it also provokes some more intensive collaboration amongst those countries. they came together for the

recovery fund. then europe has going for a challenging time and is probably much harder hit. at the same time, to some extent, it is undervalued. i think there is a good chance that europe will actually do better than people think right now. >> how important are the factors to you when you make investment decisions for pif question mark >> very -- for pif? >> very important. i have a problem with the interpretation of the s and the g. it is very much objective, how you can rectify these things.

the problem is what is the interpretation, what is the standardization of the government's -- governance? a chairman and ceo is excepted in the u.s. and parts of europe but it is not accepted as part of these principles. which agency will pick this as a good point or a bad point? the problem i am facing with the east is the different trading agencies who are all working on different standards of how they are evaluating the ratings. yusef: a fascinating conversation there. plenty more ahead, this is bloomberg. ♪

yusef: let's turn to the middle east markets now with our reporter. these two rose more than 2% each. even though it was quite a fallback in profits, what were the highlights? >> good morning, that is right. we had a fallback in profit but

analyzing the investors around here, they knew the year would be hard. whatever indication they could see that the fourth quarter was the main topic for those. as you mentioned, we had a very good performance for both of them yesterday. up 2.6%. 2.5%, it was the biggest increase in about 10 days. we just selected a few quotes from a few of the analysts. this was well below expectations. emirates and pb should provisions that were sharply lower. emirates mbd showed weaker noninterest income that was upset by the lower provisioning during the period.

our colleagues with bloomberg intelligence said that the first saudi bank beat estimates but the cost of the risks were slower. just to close with comments from an investor, they say that emirates mbd continues to be a strong player on the cyclical economy for 2021. yusef: u.s. wealth management said emerging stocks will be the hottest ones for equity investments this year. what is driving that rationale? >> that is correct. i had a very interesting conversation with chief investment officer for investment in emerging markets. he was very clear in the message that the reviving global economy

on the back of the vaccine rollouts reduced uncertainty around foreign policy, the weaker dollar, stronger commodities and also, the continuation of all of these that we have been seeing. these are factors that are going to play very well for emerging markets. for example, they see the index climbing -- they see the amex index climbing higher. the index is already of close to 10% just in 2021. if they have to have a specific geography, they really like russia because of the commodity stories, stronger oil and also, the stocks there and also, latin america on the back of the stronger commodity stories.

yusef:yusef: that was middle east markets and equities reported. of next is the bloomberg size and scope. up next is -- up next is bloomberg size and scope. this is bloomberg. ♪

yusef: time for size and scope. number is 58%.

simone: 68% of people over 60 years old believe that climate change is urgent. this comes from a large pool on population views about what they believe about climate change. the older part relation generally seen as most resistant to climate change policy, believing it is less of an issue for them. that is true. people under 18 years old believe at a much higher rate, 69% believe that that we have a climate emergency but we have them saying that this indicates more widespread belief that climate change is a problem, that governments need to do something about it.

folks that believe that the government need to ask -- act most urgency are europe, italy and the u.k.. they believe that strong action is needed right away. yusef: it is interesting to see that the ships are quite gradual from age group to age group in terms of the commitment to environmental policy. surely that varies across geographies. what did the variations from the survey tell us? >> in the same way that the age group agreement is so high, geographic agreement is pretty large. the country where the number of respondents is the lowest and the fewest believe that climate change is an emergency is moldova. there, half actually believe that climate change is indeed an emergency. when you look across this group, must believe that the measures that are needed need to be

incremented urgently. there are very few that are presented with options about what policy is to be implemented. very few people actually were able to choose up to three. even the likes of pakistan, only 5% of those chosen zero. china is not part of the survey. that is the country with the largest greenhouse gas initiatives but overall, suggesting that more people then maybe thought would be willing to adapt some policy, maybe even small ones to address environmental issues, yusef. yusef: if you are long on any of these risk assets, it is getting a little rowdy. disappointment on the earnings front, some of the big tech names, a lack of clarity on the

physical front. the bloomberg dollar index listed the results by .1%. much of today's conversation will revolve around gamestop, some of the wider implications for financial stability. this is bloomberg. ♪

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