♪ haidi: good morning. we are counting down to asia's major market open. shery: welcome to daybreak asia. our top stories this hour. asian stocks set for gains after wall street's best rally in weeks. frenzied speculation will not derail the market. the reddit-fueled traders pushed silver to an eight year

high. investors injecting almost $2.5 billion on monday alone. japan is set to expand the virus state of emergency for more than half the economy. local media says curbs will stay even as reported infections fall from january highs. let's kick things off with breaking news from south korea. cpi numbers for the month of january. inflation accelerating and beating estimates. consumer prices rising .8% month on month. the estimate was a gain of .3%. year on year, acceleration of .6%, beating expectations of acceleration of the previous month. we have seen a little bit of support coming from crude oil prices continuing to gain ground. we have a lot of new to demand given the third wave of infections in south korea, but an amazing year when it comes to

eco-data. exports posting its best january on record. manufacturing activity reaching the strongest than a decade. now inflation accelerating and beating estimates. let's turn to sophie in hong kong for a check of the markets. sophie: inflation rising in south korea where we get the first policy decision ahead of the rba. the aussie dollar rising somewhat steady with stock iron ore prices weighing. a potential trek towards .80 has the boj that it is worth's than the bond buying program. stocks in sydney opening to the upside by one third of 1%. higher by 7/10 of 1%. nikkei futures in chicago, let's see how they are opening up. some downside moves on the

potential attention of the state of emergency in japan. this as asian stocks could be looking to extend gains with alibaba earnings on the radar. little changed after u.s. stocks have the best day in 10 weeks. silver very much in focus. silver futures off more than 1% this morning after the pme raised margins by 18% to make it more expensive to traders to hold positions. that may calm the retail frenzy we have seen for silver. haidi: yes, we are seeing some of that calm being restored. silver futures down after the retail frenzy and the announcement they would be raising margins on silver futures contracts by 18%. this is just the latest asset we have seen the reddit traders, day traders putting their

attention and resources into. su, we have been talking about how fundamentally different this market is compared to an equity like gamestop. su: it is majorly different because it is 200 times larger than the market. you cannot push around prices quite as easily as a heavily shorted stock. silver prices, looking at the five-day chart, jumping to an eight year high right out of the gate on monday. easing since then but it jumped immediately 13% intraday. that is an increase over five days as 20%. the highest level since we have seen in 2013. the cme was quick to come out, raise limits to 18% to put a little break on buying or make it more difficult to rush in. it also issued a statement, making it clear it is carefully monitoring the recent activity in silver, well aware this reddit army has chosen silver as

the new target. communicating with fellow regulators, stakeholders, to address any potential threats to the integrity of the derivatives market for silver and remains vigilant for fraud and manipulation. many would say it means a match made in heaven that reddit's rambunctious army of retail investors, millennials, day traders are equal to take on the financial elite. you will note silver is very different from the stock market game of gme that we saw. they are major long positions in silver and had a pretty good run of 50%. it was viewed as recovery trade in 2020. silver bulls believe it could go much higher and have claimed that prices are suppressed. the focus on silver may make everyone who is long that metal happy for the moment. it may look like the reddit army

is perhaps not getting quite the traction they did with gamestop. as we look at the bloomberg, wed stocks is not as shorted. at least 50% of the shorts have come off and that is why we are seeing the stock drop a bit. ery:t, all the commotion has cut the eyes of regulators. how financial services admitted -- house financial service committee will be holding a hearing on february 18. when short-sellers, social media and retail investors collide. let's talk about robinhood as well, because we have heard reports of a cash crunch there. su: yeah, and the robinhood ceo likely to be front and center in any hearing on the speculation. robinhood's biggest backers and investors -- it is the backers who have poured billions into the online broker in recent days at an unprecedented pace.

the team of others, including sequoia capital, they have invested. this group combined $3.4 billion in the past few days. that includes the $2.4 billion announced monday. reuters is reporting that robinhood also speaking to banks to get an additional $1 billion in debt it would use to back these heavily shorted stocks which it needs to post collateral with the big depository overseas. all of the short positions set out a lot of tripwires that puts intense focus on robinhood which has been favored by millennials and really let off the whole round of no fee involved trading that has allowed a lot of day traders and amateur traders to get into the market. this huge run-up in the gme

stock did drive a lot of shorts out. the initial round by the army of reddit traders very successful in forcing huge amounts of losses on the hedge funds and short-sellers. short-sellers in gma take a combined total of $20 billion in losses for much larger losses with a whole host of stocks that were targeted. we are seeing those short positions ease and many hedge funds eliminating their shorts so they are not a target of this army. back to you. shery: su keenan with the latest on the frenzy, leading to unprecedented moves in stocks. legendary short squeezes and a gut punch to hedge funds. our next guest says the main take away from this mayhem is the u.s. retail investor is back in a benue p ben kirby is here from thornburg investment management. $46 billion under management.

always great having you with us. if this actually becomes a feature of financial markets in the future, what are the implications for professional traders? ben: thank you for having me on the show. yeah, the retail investor in the u.s. is back in a big way and we are seeing animal spirit, we are seeing investors with very different valuation frameworks than many institutional investors have. the gamestop example is relatively small. it probably has a lot bigger impacts on the market going forward i would expect it to continue, i would expect it to be -- unless we get significant relative or a -- regulatory tamp down, significant change in behavior. you mentioned margin debt i think it will continue to be a feature of the domestic market. shery: you are bullish on emerging markets according to your notes. do you foresee something similar

happening in parts of asia? we have seen a few stocks really go with the flow of these searches happening in the u.s. as well. ben: that is a great question. the chinese air share market has a lot of retail involvement. it makes it a hard market to invest in because there's a lot of surprising price moves. in general, emerging markets have a lot less retail involvement than even the u.s. does today. going into the emerging market is one way to escape the reddit army and be able to focus more on fundamental value. we think is a lot of fundamental value in the emerging markets today. many stars are aligning. a lot of great companies, a lot of positive momentum the emerging-market. haidi: we have already seen a huge rally, whether it is china or north east asia, south korea, taiwan and japan as well. ben: i think they were fairly early in what could be a

multiyear expansion for emerging markets. the u.s. dollar is relatively strong and can weaken further. commodities are continuing to rise in price. there's a lot of tech disruption in the emerging-market. we think there is value in many sectors and countries. in particular, we like to go outside the top 10. the emerging-market index is pretty concentrated in the top 10 investments. if you go outside the top 10, there are a lot of great companies growing fast and have very bright futures ahead of them. haidi: do you make the assumption going forward there will be more dollar weakness? ben: that think that is a reasonable bet. just given the amount of fiscal and monetary stimulus that the u.s. is continuing to pump out. emerging markets are stimulating but not nearly as much. interest rate differential is going to be a benefit for emerging market currencies.

haidi: tell me about your call on taiwan semi. is this a broader call on big tech versus big tech in the u.s.? ben: taiwan semiconductors is one of the biggest holdings at thornburg. it is one of the biggest holdings in our billion plus fund. taiwan semiconductor is a market leader and what we think is one of the most dynamic and interesting sectors in the world. digital is disrupting everything. the company that is building those chips to support artificial intelligence and big data and cryptocurrency mining and penetration of 5g come all of these big trends that are driving everything, taiwan semiconductor is at the center of all of that. it is a company with tremendous competitive advantages. a lot of around the business and

secular growth that we think will be 10% plus for quite a few years. haidi: ben kirby from thornburg investment management. let's get you to karina mitchell for the first word headlines. karina: in the u.s., new york and much of the northeast is facing the heaviest snowstorm of the winter so far. a slow-moving system snarls road, rail and airways across the region. central park is forecast to have more than half a meter of snow. winter storm advisories are in place from tennessee to maine and across chicago. in other news, state television in myanmar has released pictures of the new president installed by the army after monday's military coup. senior officers after the leaders of the civilian government were detained. president biden is threatening new sanctions. the army disputes november's

election which was won in a landslide. the world health organization has visited wuhan's center for disease control as it discovers the origins of the coronavirus pandemic. it has an archive of information about past coronaviruses. the visit is unlikely to quickly confirm the origins of covid-19 with typical investigations lasting years. parts of western australia are entering a second day of lockdown after the state's first local coronavirus case in 10 months. 2 million people are in isolation until friday night after a guard at a quarantine tested positive for the u.k. variant. western australia remained covid free months after enforcing the nation's toughest border restrictions. 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. i'm karina mitchell. this is bloomberg. shery: we will have more on the virus ahead. we will discuss the latest on the pandemic in japan. the prime minister is extending the state of emergency. with china putting pressure on jack ma's empire, joseph berger takes us what to expect when alibaba posts results later. this is bloomberg. ♪ when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $300 a year with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience. you can shop the latest phones, bring your own device, or trade in for extra savings. stop in or book an appointment to shop safely with peace of mind at your local xfinity store.

haidi: local media and japan reporting the prime minister will announce month long extension of the state of emergency amid the coronavirus. isabel reynolds is in tokyo. this was going to create further damage for the economy so what has been the challenge in getting the virus under control

in the first four weeks? isabel: right. one factor is the state of emergency in japan has been a very mild one, even by japanese standards. the government this time in 11 areas including tokyo and osaka to avoid going up after 8 p.m. they've instructed bars and restaurants to close at 8:00. mostly has gone on as usual with schools and so on. the thinking was a lot of infections resulted from people eating and drinking in large groups. however, the local government who preleased these measures didn't have any penalties to their disposal. we saw quite a few bars carrying on serving customers. we have even seen yesterday, we saw a lawmaker have to resign after being seen going to a bar lit at night during the emergency. the lack of penalties has been the difficulty. having said that, the infection

numbers have fallen quite a bit. not quite as far as was hoped. shery: what's really fallen has been the prime minister's public support. we have an election coming up before the end of the year. what is happening on that front? isabel: one factor that will be key for him is the vaccine rollout which is finally set to start by the end of february. the pfizer vaccine will be approved on february 12 which is slightly earlier than earlier reported. this has been slowing in some countries because they require domestic testing of the vaccines. hopefully prime minister suga is hoping this will prove that light is at the end of the tunnel. shery: isabel reynolds there in tokyo. now after a bumpy start, the u.s. vaccine rollout is slowly gaining momentum. more than 26 million americans

have received at least one shot. johns hopkins university senior scholar tells us what challenges remain. >> we are definitely getting better at it but we are not quite fast enough. this has to be an effort that has no speed limit. in december, it was very slow going with appointments, filling out paperwork. that has gotten better. we are hitting that million dose per day marked people have been talking about, but we have to go much faster if we are going to stay ahead of these va riants. i think it has to be ann all hands on deck approach. using federal government assets like fema to set up mass vaccination clinics. they cannot be something that goes at a pace where you have to do this with great management. it has to be assembly-line. what we are seeing in uae, israel is the pace we should be aiming for. >> what will make the difference on how quickly we can get there? we are looking at some of the facts.

world population, 7.8 billion. if you get herd immunity at 70%, that is a hell of a lot of vaccinations very quickly. amesh: the biggest difference in the u.s. will be able to find people to vaccinate and to actually give the shots, as well as find mass gathering locations where you can do this. a mass vaccination site at a stadium or a convention center and having people move through it in assembly-line and not have all the delays. a lot of it has to do with predict ability because many places don't know when they are going to get more vaccine so they are very cautious. they are not going through this as this is, they can expect a get more later. they are doing what they can do so they schedule more appointments. that cannot happen. we need to see a lot more predict ability and visibility into the supply chain. that i think will probably give a lot of states a lot more confidence when they set up these appointments. francine: are there enough vaccines to go around in the

u.s. right now? amesh: right now, we are worried about the supply chain more in the medium to longer term because we've got companies like moderna and pfizer that have contracted with operation warp speed. the biggest problem now is many states cannot even take the vaccine they have in their freezers and put them into peoples' arms. you look at states like west virginia, north dakota, a lot of states have the majority of the vaccines still sitting in freezers. i think that cannot be the issue. we cannot have vaccines in the freezer. they may be worried about second doses, then don't have enough people to do this. all of that needs to evaporate as quickly as possible. there should be no vaccine left in the freezer. that has to do with logistics and states having support from the federal government for the resources the trend these vaccines into vaccinations. francine: once that happens, how quickly do you think that happens with a new government in charge, with a new administration in charge? what is the percentage of the

population being vaccinated? amesh: i do think this is picking up and it was picking up at the end of the trump administration and continues to pick up at the beginning of the biden administration. there will be some time before we hit the herd immunity threshold sometime in the summer. we will get benefits from the vaccine before that. the priority groups, and the rollout has been designed not necessarily to stop spread but to stop death and hospitalizations. that is why nursing home residents, elderly individuals, those are the people that are first. that make up the bulk, including the majority of people who are getting hospitalized and die. once you get that group vaccinated, we are already starting to see benefits of that in places like israel, you will see hospital levels go down. you will see deaths go down. cases are still going to spread. this is not going to go away. covid is still going to be a disease, but it won't be a public health emergency and this bread will be much more controlled because we won't be worrying about a vulnerable

person which then puts them in the hospital and they die. i think we will see benefits into the spring in terms of hospitalizations and deaths. haidi: senior scholar amesh adaija. the bloomberg school of public health is supported by michael bloomberg, the founder of bloomberg lp. we do have much more to come. this is bloomberg. ♪

shery: a quick check of the latest business flash headlines. ksbc stepping up -- hsbc stepping up its push into china. the move comes after hong kong leader carrie lam endorsed the bank's strong presence in hong kong last week despite criticism for freezing the account of activists and supporting the sweeping security law. china is seen as key to hsbc's

turnaround plan and pivot towards asia. china's number two video app is selling heavily in hong kong ahead of its debut on friday. technology shares are set to be changing hands for 250 hong kong dollars, more than double the listing price of 115 dollars and a bigger premium than the 15% before the ipo was scrapped in november. it is backed by tencent and the biggest internet ipo in two years. apple is selling $14 billion of bonds, tapping the market for a third time to return cash to shareholders. the offer is set to come in six parts with the longest portion yielding 95 basis points. apple has been reducing its net cash position, although bloomberg intelligence says it may need to boost returns to more than $100 billion over the next few years. coming up, pacific epoque's

joseph berger is our guest. he will look ahead to alibaba's results and the crises faced by jack ma's e-commerce empire. this is bloomberg. ♪

♪ >> china's financial sector is a young industry that does not have and not fully moving. today, we are a country that bears the risk of lacking a healthy financial system. >> regular leaders have summoned jack ma and other executives for a rare meeting at of the world's biggest ipo. >> the mega ipo shocking investors. >> not surprising as it has become big and very prevalent

across the chinese consumer market that regulation is catching up. >> you have this very charismatic, very powerful chinese entrepreneur in a state authoritarian system that has no interest in that. also because ant financial is the most important fintech company in the world. >> china has unveiled new anti-monopolistic regulations. >> i don't think this is a surprise. as you know, the chinese market is in the process of constantly regulating. >> it also depends on how the company reacts to the changing labyrinth. >> the way that jack ma has been apparently treated, there's a distinction between the private sector and state owned enterprises. >> the has appeared in a video after months of speculation about where the billionaire tech giant may be. this is a video to educators in china. >> it has been a considerable

shock, a traumatic event. >> the problem solved and will go back to the track to continue consideration, according to law. ♪ haidi: no doubt about it, it has been a roller coaster for the world's largest e-commerce company. let's get a preview of the latest earnings report from alibaba, pacific epoch ceo joseph berger joins us. we are expecting another robust quarter of numbers from alibaba, especially as the pandemic cases accelerate in china. do you have to look through the short-term numbers and what the extent of the regulatory enforcement, regulatory aftermath is going to be after these investigations and reforms in china take place?

joseph: i think as you look at alibaba specifically and look at their performance, certainly based on the numbers we are looking at and the tracking we are doing as a company, they are expected to have a solid performance for this quarter. we also think for 2021, obviously as the shift continues to accelerate between off-line and online consumption, we think that trend will continue. i think the pandemic is helping that. nothing consumers are more willing to accept buying things like staples, like fast-moving consumer goods or groceries online whereas maybe 10 years ago that was something they were not doing. we think this is going to be a continued trend. the pandemic will continue to support alibaba's growth into 2021 and even into 2022 as consumers behavior shifts and pricing becomes an motivator in

terms of their purchase decision. haidi: there is the antimonopoly investigation. we know that beijing has made antitrust, anti-monopolistic behavior one of the top policy priorities. what does that mean for alibaba? are they too big to fail or is this something investors have to take into account because there is the potential penalty of 10% on revenue? we don't know what that looks like. joseph: of course, we will be wanting that very closely. i think right now, alibaba is the largest and will continue to be the largest e-commerce platform in china. we don't see that changing. obviously, there are competitors that are continuing to grow very strongly and you have jd.com. you have others that are coming up as well on the periphery. i think that is good for alibaba. it helps to distribute the market share.

it helps to demonstrate they are not as big of an op of -- a monopoly as others may say they are. and that dynamic in the marketplace will continue to move around in terms of market share as consumption changes between these platforms based on the consumer's preferences. it is a wait and see with respect to regulatory enforcement. not something we are going to predict. what we will watch is how the performance of alibaba may shift. right now, it is looking very strong and it looks like they are in a great position for this year. shery: compared to other tech giants and jd.com, this chart showing alibaba stock is still key compared to other stock valuations. given these regulations seem to be targeted or broadly to the brought you can -- internet ecosystem, doesn't make sense to assume that given alibaba's

strength that if you have these regulations more broadly, they will be able to deal with them better? joseph: from the way we see things with alibaba, obviously looking at the fundamentals of the business, clearly you can see stock valuation and revenue growth that this is a company that is very healthy. they are growing very well. they will continue to grow in the coming years and so, to us this is a very attractive business and one that has helped investors. you are looking for solid businesses, it would be a good place to be looking at. that is something that we feel very strongly that alibaba is in a great position going forward. i think there's other companies in the e-commerce space. this is a growing pie consumption is moving online and there's a lot of opportunities for the e-commerce players to take advantage. shery: we are headed for the ipo

this week. how closely are you watching this and how interesting does it sound? we are seeing lots of demand already. joseph: this is a very interesting company. this is another example of this peripheral e-commerce player now moving into the e-commerce space between short video, livestreaming and e-commerce promotion and e-commerce spending. this is a great little company. not so little. a great company and one that we are tracking and will be advising our clients on prior to the ipo. i think it is another example of the innovation coming out of china and how to monetize consumer behaviors and i think there is more of these types of unique opportunities in china going forward. shery: joseph berger, thank you for your time.

let's not get to karina mitchell with the first word headlines. karina: the european union is calling on the new u.s. administration to suspend tit-for-tat tariffs on trade in aircraft and metals. brussels wants joe biden to remove duties on european steel, aluminum and aircraft, singling it will end its actions in return. the levees on boeing and airbus have been authorized by the wto as a result of a legal subsidy by both sides. president trump will file his initial defense against impeachment leader in washington with a new legal team appointed at the last minute. the lineup changed after the original lawyers quit over trump's insistence that his case should focus on claims the election had been stolen. the new team wants to concentrate on the constitutionality of impeaching someone who has already left office. and goldman sachs is tightening the golden handcuffs for some of its most in demand traders. the staff of its more junior ranks are said to be told to

sign six-month noncompete clauses before picking up the bonuses. the clauses are usually reserved for more senior staff as goldman looks to make it harder for them to defect. 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. shery: take a look at live pictures across the eastern u.s. this is philadelphia, really blanketed in snow. we have seen winter storm warnings and advisory stretched from tennessee to maine. new york city facing its heaviest snow of this season. this is also causing complications for the vaccine rollout. vaccination centers being closed for two days in new york, at least. you can see the snow still falling in philadelphia and here in new york. this is bloomberg. ♪

haidi: let's take a look at how markets are faring. let's go to sophie kamaruddin in hong kong. sophie: in sydney, stocks are adding nearly 1%. nikki futures in singapore gaining ground. regional shares set to extend monday's rebound. several prizes trade lower in asia after the cme raised margins on contracts by 18%. taking effect on february 2. ahead of the rba decision,

aussie benchmarks rising for a third straight session. the aussie dollar is gaining ground. cba says despite the pressure in the aussie, they are seeing fair value at 76 for the currency. pricing very much key to it of advance. they stock on the move in sydney. credit corp. rallying after raising its profit guidance for the second time in two months. healus jumping after getting a double upgrade at ubs on its diagnostic services demand. spending seen from the government as well as lower capital spending. shery? shery: we will also be watching for the open in india after the modi government unveiled a budget that blows out the government's deficit in an attempt to send the economy out of its pandemic driven downturn. the problem is it may not do enough to help the nation's poor. kathleen hays is here with more.

we are still talking about a giant spending plan. take us through the numbers. kathleen: giant indeed, but again, obviously prime minister modi is -- i won't say desperate but everyone wants to get out of this endemic -- pandemic hold in the economy. i will go to the chart. sometimes the pictures make a point even better than words and you can see those nice green bars in india's gdp growth rate. in the second quarter of last year, pandemic and lockdowns, 24% drop in gdp growth. this quarter is not quite so bad, 7.5% decline. unemployment over 9% in december. 85 million people have newly fallen into poverty and the budget targeted at 6.8% of gdp.

bloomberg was expecting 5.5%. the budget is going to be less of a burden. some of the key elements -- they are going to raise $24 billion by selling stake in state run companies. people have been urging this for years. proposing to raise import duties for hot things. maybe it is something the economy can withstand. they are going to buy investment grade bonds. and something that other nations have done in the past, they are setting up a bad bank, bad debt in banks as companies are facing a surge in distressed assets. all of this is going into the pot. we will see what it means for the market. the stock market liked the emphasis on growth but it remains to be seen what ends up

in the final budget. haidi: the biggest outcry doesn't seem to be concerns over the jump in the budget deficit, what about this package not doing enough for the poorest in india. kathleen: it is pretty amazing because we know how very poor some of those poorest are. this is a spending plan of $500 billion that will jumpstart growth, but the bottom line is that what they are doing is taking steps to raise the money to make up for some of this by cutting back actually on rural development programs. no major proposals to address job losses, hunger, rising pressures on the farming and rural sector. they will cut back the money allocated for rural development, including a jobs guaranteed program, spending for roads, pension for widows. one thing they will do, 137% in

health care spending to help deal with all of those problems caused in the country that had the second largest covid outbreak in the world. haidi: global economics and policy editor kathleen hays. earlier, kathleen spoke with the dallas fed president about his productions for the u.s. economy. robert kaplan shared his views on stimulus efforts today. mr. kaplan: the good news about what we did is we acted quickly and boldly in size. and what was critical is we did have, many of us -- we did have active conversations with elected officials and were encouraging of them to take action on fiscal policy, which they did in a very bold way. i think we were well served by

doing things that were unusual, bold, significant and decisive to stabilize the financial markets and ensure that we had good access to capital, not perfect, by big and small companies and the fiscal relief insured that those that were most directly affected had relief to be able to keep it making ends meet. i think that made a huge difference. kathleen: what a difference 11 months make. a lot of politicians were hoping we didn't get that deep recession. we did have that month where the u.s. economy dropped by 30% but it was big. now, you have a pretty decent forecast. 5% growth, may be better this year. looking back on 2020, it was down 2.5%. does today's manufacturing report, purchasing managers, new s number staying at a high level. does it increase your confidence

in this fairly positive outlook for gdp you have? mr. kaplan: so, i'd say it is consistent with my outlook, but there are a couple of significant downsides and there are meaningful upsides. on the downside, we are going to go through a difficult period in january and february with the resurgence of this virus. the bigger downside i am concerned about is do the new variants of the virus proved to be more resistant, less receptive to the vaccine? most scientists think the vaccines will be effective against those but the jury is out. and how quickly can we get the population vaccinated? for that forecast of 5% growth for this year to come to the fore, we need those downsides not to materialize.

we need positive developments regarding the vaccine, the rollout of the vaccine and effectiveness against the variants. on the positive side, we have substantial fiscal stimulus. my forecast does not take into account additional stimulus. we do know mobility engagement will improve as we go through the year if we are able to combat the virus and these vaccines get rolled out. the ism manufacturing is a piece of the puzzle that i think is consistent with the potential u.s. economy. kathleen: since you touched on fiscal stimulus, and added this forecast does not depend on additional stimulus. a calculation i saw recently, if you add up all the stimulus from march to march, it will be about $5 trillion. is it your view that the recovery will happen regardless

and implicit in this -- stimulus, if you are worried about gdp, it is not necessary now on top of the $5 trillion? mr. kaplan: it is not going to happen regardless. there are a couple of areas that are forecast is sensitive to. number one, continued relief for those who are unemployed. or who cannot get enough hours and make ends meet. that needs to continue. the second part is part of the fiscal package is vaccinations and money for making sure we've got a robust vaccination program and getting schools reopened. shery: robert kaplan speaking to our global economics and policy editor kathleen hays. coming up, from nintendo switch and games like animal crossing drove the company to its best quarterly earnings since 2008

and driving the positive projections for the year ahead. this is bloomberg. ♪

haidi: we are watching nintendo when tokyo picks up trading. the company's adl's rose 7%. high demand for the switch console had nintendo

post-its best quarterly results in a decade. expectations were already skyhigh. nintendo still managed to beat them. is it still the pandemic affect? >> it is. nintendo is one of the beneficiaries of people spending more time at home, not going out to socialize and staying at home , especially with their game animal crossing. the financial results -- the expectations were pretty high but they were able to beat them and they raised their forecast for the year for operating profit and further projected number of switch consoles sold. it shows some continue to strengthen the business that was positive. there was a little bit of skepticism about the forecast for the last fiscal quarter, the quarter we are in right now we have not seen those results yet but we will see how that plays out. shery: a question is how sustainable is this performance? peter: it is.

you have two big competitors, microsoft and sony, introducing new consoles themselves and that is putting pressure on nintendo and the switch to see whether they are able to sustained demand for the switch con sole with the games they have going forward. the company has been pretty poised about its financial projections. it undershot from the beginning of the year and kept expectations low and continues to raise and raise. investors think they may be doing that again now where they still have pretty conservative outlook for the rest of this fiscal year and they may be able to beat those numbers but it is not clear what will happen in the next fiscal year. haidi: a couple of other things outside consoles and games. in-app purchases is where we see nintendo taking a lead. what about come outside of software and hardware and

monetization, it clearly has come to a standstill because of covid. peter: you mentioned in-app purchases. that was one of the positive surprises for the company. they have to strike this right balance between their prospects for digital sales, which more than doubled in the period with the other fiscal activities that have not been as strong. shery: peter elstrom joining us from tokyo. we are just minutes away from the open of trading in japan and south korea. it's turned to sophie for what to watch. sophie: plenty of earnings to wade through in japan. japan airlines widen its forecast for a full year. reporting 19% rise in third-quarter profit. we will keep her eye on suzuki motors after suspending its

operating operation in myanmar. keeping an eye after a jumped monday on announcing it is developing a covid test that can identify several variants. the korean company saying it will make those globally available. this after tesla's price target was raised to $1200 and elon musk calling for more battery sales during his appearance. it will remain open to the public, but months for those waiting for an invitation. haidi: jp morgan joins us. his team is out with a big call that the reddit hoard is unlikely just are a big market drop. as sophie was previewing, week at the start of trading in tokyo and seoul coming up next.

this is bloomberg. ♪

shery: "daybreak asia welcome to "daybreak asia." i am -- welcome to "daybreak asia." i am shery ahn. haidi: asia's markets have just open for trade. asian stocks have gains after the best rally in weeks. strategists say frenzy speculation will not derail the market. robinhood bankers are applying more money into the brokerage at

a record pace. investors put up almost $2.5 billion on monday alone. investors away earnings from alibaba after a roller coaster quarter forced scrutiny from china and increasing pressure on jack ma. myanmar faces new u.s. sanctions as the army installs a new president. shery: japan and south korea coming online. let's turn to sophie for what to watch. sophie: alibaba on tap. we will get panasonic to report. mizuho among those reporting. that stock gaining ground. keeping an eye on nintendo on the back of their earnings. we are seeing the nikkei 225 voting 28,000 points with that softer yen providing a boost, crossing that 105 level for the first time since november overnight today, we are seeing the dollar under pressure and as we wait on the potential

extension of a state of emergency in japan, gdp generators wanting to see what this may mean. checking on what is going on in south korea, we will see if there's any lines regarding a fourth line of cash handout. the won under pressure this morning we have the latest inflation data to assess as well. dpi rose slightly. the price target was boosted to $1200 and keeping an eye on what any developments they had around shortselling. they warned of market volatility amid calls to permanently ban the practice in south korea. let's look at what's going on in sydney. aussie shares are rising while bonds are under pressure for a third session ahead of the rba decision. u.s. futures, we are seeing them gain some ground while cash treasuries are opening to the

downside but fairly steady after we saw the curb steepen overnight. -- has a way to insulate against near-term downside macro risks when it comes to the fiscal and public health front. silver very much in focus. we are seeing that accelerate in the asia session. silver futures off more than 2% this morning after the -- increased margins for trading. there will be more volatility ahead. haidi. haidi: strategists say frenzy speculation will not derail the market even as reddit fueled traders to soberly -- silver. the impact should not be overlooked, our guest says this episode, like prior ones, is not likely to be persistent. gary craig joins us from -- he joins us from melbourne. it has been an eventful month of

trading from january. if you are trying to avoid this volatility, we are hearing that they are basically trolling wall street, these firms. take a look at the names being targeted. very much sidestepping these assets. >> yes, i think the cat is out of the bag in terms of what is happening in some of the large institutional players will adapt and look at how they can use this information in their own portfolios. the key message is you have had quite a technical response and you really need to contrast that against the improving fundamental outlook for the economy and for earnings and we will see investors focus on those fundamentals. if anything, it's a buying opportunity in the market. it should be a good year for equities. haidi: talking about the fundamentals, what are you wanting to see out of earnings season? we have seen valuations so high

that you would want to meet expectations, even better expectations for these levels of pricing that we are seeing to be maintained. kerry: absolutely. one of the risks is that you're starting with high valuations, so we could not really consider an uplift or re-rating in equity evaluations to deliver as they did last year so it was all about the delivery of earnings. you are seeing that in the u.s. by and large, 50% of the market cap reported there. 80% of companies are beating on revenues and estimates and the numbers are not that great compared to a year ago and we have seen earnings provisions rise in australia. all on the basis that you are coming out of that recessionary period into a year of recovery. initially good for the outlook. shery: how will the performance of the dollar affect performance across asia?

it seems that shorting the dollar has become uncomfortable as well. our mliv strategist having this question of the day. what is needed to keep the dollar going? kerry: yes, it does seem like the sort of dollar narrative has narrowed in terms of the depreciation. some of this is coming back to the rollout of vaccines across europe and the confusion around where the vaccines would be available and some of the risk off back into that safe haven buying of the u.s. dollar. by and large, we see the economy getting better in the second quarter of the u.s., but it's likely we will see a faster pickup in growth from regions outside the u.s., and that should sustain the pressure downwards. it might not be as large as expected just a few months ago, but we are thinking about the growth. the only thing that would upset that would be a much larger stimulus package out of the u.s., but even then, there's a question mark around how large

they could be. shery: we are now seeing senator susan collins speaking right now. this after having met with president biden. we know the 10 republican senators have proposed a counteroffer to biden's $1.9 trillion package and that would be around 600 $18 billion and senator collins now speaking to reporters at the moment. we don't have details of how that meeting went so far, but give us the implications of what size of a stimulus package in the u.s., what impact would that have across asia depending on how big a size we get? expectations have been pretty high already, right? kerry: they have been looking at this number that's close to $2 trillion. you have the advantage of that. the reporter went through the congress in the u.s., so there are many ways to pass it through

the reconciliation process as well so you would have to think there's pretty high expectations that we will get a large stimulus package out of the u.s. that is going to add to sentiment. i think it's going to come down to what that actually looks like . households in terms of cash payments, and the trade cycle around the world, that's great for asia. i think it's going to lift expectations of growth in developed markets in the u.s. and thinking about how that feeds into the rest of the world. the rub is that a lot of it will be focused on infrastructure. there is support for both parties around that and it's thinking about how that will benefit the u.s. and u.s. companies more is one of the reasons we continue to think about that quite favorably in terms of the valuations and performance relative to the large caps we saw last year. shery: senator collins s they had a productive and cordial meeting. she hopeful that they can pass a bipartisan relief package. kerry craig with his take on the

u.s. stimulus package as we continue to hear from senator collins after that to our meeting with president joe biden. for now, karina mitchell with the first word headlines. karina: here in new york, we are facing the biggest -- so far this weekend. a slow moving system is snarling transit across the region. it would be the fourth snowiest single day in records dating back to 1869. winter storm advisories are in place from tennessee to maine and across to chicago. the who has visited wuhan's cdc as it investigates the potential origins of the coronavirus pandemic. it is one of china's leading research labs with an archive of information about coronavirus is after sars in 2003. the visit is unlikely to quickly confirm the origins of covid-19.

typical investigations last several years. japan is set to extend the virus state of emergency for another month through at least march 7. local media say prime ministers suga will announce a move tuesday even as reported infections fall. it covers 11 areas, accounting for 60% of the total economy. kyoto says the prefecture north of tokyo will be removed from the list. state television in myanmar has released pictures of the new president installed by the army after monday's military coup. a senior officer -- president biden is threatening new sanctions if he and others are not released. the army disputes november's election, which the party won in a landslide. 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.

i am karina mitchell. this is bloomberg. haidi, back to you. haidi: karina, still ahead, it's been a roller coaster quarter for alibaba as regulatory concerns loom. what to expect from jack ma's internet empire when it reports later today. coming up next, robinhood backers are bringing in money at a record pace. reddit darlings are falling in extended trade. this is bloomberg. ♪

shery: the online broker at the center of the reddit fueled trading frenzy has succeeded in raising more cash to see out these warm. robinhood's biggest backers poured billions of dollars into the firm in recent days. su keenan is following developments. there is a report of plans to raise even more. su: the money has been pouring

into robinhood at an unprecedented pace. if you look at the latest round of funding, it was led by -- it included a team of others including -- they managed to raise 3.4 billion dollars, including the 2.3 billion just announced monday that they invested back into the firm. venture capital investors are -- after the latest round back in september lifted the valuation to 11.7 billion dollars. aside from that, reuters has been reporting that robinhood is in talks with banks to take on about $1 billion in debt so it continue its orders for heavily shorted stocks. that has been the big story here. separately, robinhood lifting its initial restrictions on stocks that can be traded. stocks touted by the reddit sub platform wall street bets that has fueled incredible rallies, mainly in gamestop, where they have targeted the bears or

short-sellers, those taking positions the stock will drop, and forced those big funds with parish positions to get out of their positions, so that was an initial victory, but robinhood saying they mainly need this extra money because they need to find a lot of these heavily shorted positions which will cause additional collateral to be placed with the main clearinghouse. haidi: we are seeing interest in gamestop, the stock that started this all plunging again, so what is going on there? su: we can see a lot of the shorts have moved out of the position. initially, they exceeded the flow. that is no longer the case. when you don't have a heavily shorted stock anymore, you cannot have a short squeeze so we saw gamestop plunge even more after hours, but i have had access to some of the trading room chatter among these reddit

traders and they are very sophisticated, at least, seem to be, in knowing what the expiration prices are on the short contract, and they are sending out messages, hold the line. they think they can continue to stay in and press a rise in the stock. meanwhile, silver ran up to seven year highs, eight year highs at the open. it has eased off as the cme has put restrictions or raised margins, which has limited some of the buying and the silver market, a bit different in that it is 200 times larger. harder to push around. back to you. haidi: rejecting the idea that money waters capital is establishment wall street, our guest says the shortselling landscape shifted. he told us why he believes financial markets are broken. >> we realized things were radically different last year. we were short this near-total

fraud. we still are, but we were shorted in much bigger size and got squeezed way up by what was really a consortium of hedge funds who i think engineered this, so it's been different since covid and we adapted last year and i think we adapt going forward. >>'s activist shortselling -- and i will make a distinction between activist shortselling, which is what you are due, you are very public, versus what other hedge funds do -- is that a viable strategy given what has transpired over the past couple weeks? carson: i have long said that what my business needs is a supply of people in management positions who are doing things they should not be doing, whether they are committing fraud from a legal perspective or they are just manipulating financials and being

promotional, the supply of people doing that is not decreasing, so we have that. now, does this matter? does research like this matter? i think it does, but let's say from a social utility perspective, yes, but there is less social utility to it when s.e.c. isn't enforcing as heavily as it used to so i would like to think that under the new administration, there's more social utility, more enforcement, kind of a counterweight to extreme dishonesty that has really surged through the markets in the past several years. as far as whether this is economically viable, i think so, but the adaptations we made last year, we realized, hey, we have to trade a lot more. >> using more video, putting yourself out on tv, it is not

necessarily going to change this impression people may have that you are part of some financial establishment, is it? carson: when we get tagged as establishment, i mean, you cannot be more inaccurate than that. it's almost funny if it weren't for the fact that i now have all these people trying to troll me through direct message because i'm establishment. >> there is a sense of frustration, anger, and a feeling, that say, that the market is rigged, that the cards are stacked against the retail investor, and they see hedge fund managers who short stock as their energy. -- their enemy. where should that energy be channeled? carson: i'm questioning that narrative. is it really anger that there is a hedge fund out there named melvin o that short stock or is

it just -- it's a feeling of anger in general and anything can set it off in any given direction. again, i don't know the wall street bets psychology, but i feel like we are, as humans, when we get together in a mob, right now, with all this anger, it can be directed anywhere. >> do you share the view that financial markets are broken or rigged? and maybe in some respects, share the anger that those people may be having trouble channeling or are channeling into things that might to use seem misguided? carson: yes, financial markets are broken and what has been going on is we are in this cycle of blowing bubbles. when the bubbles burst, wealth is not destroyed. it is just transferred. once again, it gets transferred

from the many to the few. shery: that was carson block, muddy waters ceo. this after the company boosted its operating income forecast for the full year. nintendo gaining ground after raising their full year outlook a second time. they just saw their best quarterly earnings since 2008. this is bloomberg. ♪

haidi: let's get you a quick look at the latest business flash headlines. elon musk is planning an orbital spaceflight as early as this year. the ceo will lead the way with three other people on board. that would be jared isaac men, the founder of a payment processor. he will donate one seat to a children's charity, one to a member of the public, and one to

a business partner. virgin galactic took off after test flight program came back on track. shares surged after it announced a new flight window through its spacecraft to take into orbit. virgin says the window will open on february 13. preparations well underway in new mexico. jetblue is upgrading premium cavities ahead of its transatlantic debut, changing seats into suites with sliding doors and more privacy. it's planes will offer 24 premium flights from the east coast to london. services from new york and los angeles will have 14 of those. let's turn to myanmar. western nations, and the military to release other civilian leaders with president biden threatening to reinstate u.s. sanctions. let's get the latest from our southeast asia government reporter, philip. this has become a very difficult situation for u.s. president

biden as well. one of the key strategies was spreading democracy around asia and we know about the close ties between myanmar and china. what is the latest that we are hearing on this front? >> president joe biden said the u.s. could be insane sanctions on myanmar if the military does not immediately relinquish the title they have seized in the coup, which includes detaining the former president along with other top party brass. the u.s. has had a history of sanctions on myanmar. the country had seen limited u.s. investment just by the nascent opening to democracy over the past decade partly because of the persecution of muslims so it's a bit unclear how much impact it might have at this time. haidi: what are we seeing is the

potential impact on corporations, investors, you know, businesses that have vested interest in the country even beyond borders? philip: well, we have seen that there's been some movement yesterday. a strategic holding, one of the biggest firms to come out of myanmar, had to stop trading yesterday. we have also seen that the banks had closed and there was some confusion whether they were closing were not and that sent mixed signals regarding the operational capacity of the country right now. shery: china, myanmar's largest trading partner, political backer as well, have we heard anything from them? philip: yes, we have. it was a muted response, predictable in a sense, because we have seen china and myanmar building quite a relationship, especially xi jinping came out to visit last year, which was

his first international trip. the two sides signed more than 30 pacts in a way to develop the myanmar-china economic corridor, which is a huge part of the belt and road initiative for china, so those projects are on the line. they have been slow to move typically. there might be a bargaining chip for china if it were to come out in favor of the military, but at the same time, you have to realize china has built the relationship with the civilian government over the last five years, including with him. it's a tricky situation. their response has basically been that they remain friends and its myanmar's affairs. haidi: philip heijmans with the latest on myanmar. we will be getting more reaction on the political tensions that we see and we will be joined by a nonresident fellow at 1:30 p.m. sydney time.

if you are watching from hong kong, that's 10:30 a.m. coming up next, investors await alibaba. ongoing scrutiny from the government. pressure on jack ma continuing. this is bloomberg. ♪

>> china's financial sector is a young industry that does not have a mature ecosystem and is not fully moving. >> today, we bear the risk of lacking a financial healthy system. >> jack ma and other ant group executives for a rare meeting ahead of the ipo. >> the suspension of ant group shocking investors. >> is not surprising as we

become prevalent across the chinese consumer market that regulation is catching up a little bit. >> a very charismatic and powerful chinese entrepreneur in a state capitalist authoritarian system that has no interest in that. but also because ant financial is the most important simtech company in the world. >> china has unveiled new anti-monopolistic regulations. >> i don't think this is a surprise. as you know, the chinese market is in the process of constantly regulating. >> it also depends on how the company reacts to changing -- the way that jack ma has recently been apparently treated , the chinese don't make a distinction between the private sector and state owned enterprises. >> a video after months of speculation about where the tech giant may be. this is a video to educators in

china. >> a considerable shock. a dramatic event. >> the problem solved, it will go back to the track to continue consideration. haidi: let's take a look at what has been a roller coaster for the largest e-commerce company. alibaba reporting robust results later today so it may be overshadowed by these ongoing regulatory issues. i'm going to get over to stephen engle in hong kong. we are just getting this news of the state media report where a number of tech entrepreneurs are being praised for their entrepreneurial ship. jack ma and alibaba, very much omitted from that. there is a sense that the

elephant in the room, what happens next from the regulatory enforcement and oversight and potential punishment side? stephen: those two minutes, we just heard the synopsis of the last couple of months of the roller coaster saga that alibaba and ant have faced raises more questions than it has answered and that the biggest drag on alibaba. that video jack ma a couple of weeks ago really relieved a lot of concerns that perhaps alibaba/ant is not facing the worst case scenario, perhaps some sort of breakup or jailing, etc., but there's still so many questions to be answered on the regulatory front on how far regulators are going to push alibaba on the antimonopoly front, the antitrust front, and whether there will be an ipo

eventually and how much of a scaled-down offering that might be and what will happen to the lending unit, so many questions. i only scratched the surface of it. meanwhile, as we heard as well from a number of those people in that video, they are doing pretty well. this is a pretty important e-commerce company, not only in china, but potentially for the world, and the third quarter will likely show that they emerged from the pandemic lockdowns that we saw in the first quarters, calendar 2020, to a fairly continuous, robust e-commerce juggernaut. revenue, likely, the consensus is for it to be up 33% and in the second quarter, when they emerged from the pandemic, sales were up 30%. people moving more online given the pandemic and lockdown. we had the single day as well in november and the third quarter. we saw growth merchandise value of 26% in the first 11 days of

november and annual active subscribers or consumers reaching 750 7 million in the second quarter and counting, but again, there are numerous regulatory issues they are facing, not only the antitrust investigation, but also the potential banning of alipay in the united states on that trump executive order and as we mentioned, the ant group ipo suspension, whether that will actually come to fruition at some point. shery: given the risks that you mention, what will drive alibaba's growth and performance in the future? what are the particular bright spots for the company? stephen: obviously, the core e-commerce and going forward into the single day this year's november, that is the core competency, but if you factor in those contributions, keep in mind, payments is no longer the biggest revenue generator from

amt. it is the lending unit and that's under specific focus of the regulators about the risks that micro lending, you know, with the banks taking on the bigger risk while alibaba is the facilitator, that is a -- the biggest generating -- the revenue generator for ant group, and it potentially could be knocked down in size, but for alibaba itself, it's a pivotal year. they have thrown billions at it. finally, they are likely to see, at least, they are forecasting to see in the second half of fiscal 2021, a turn to profitability for the cloud division. shery: stephen engle. let's turn to another chinese company. a video startup is the latest hit with hong kong investors matching the frenzy seen for the the ant ipo.

they have been snapping up shares ahead of its friday debut. let's cross to julia in hong kong. so what does this mean? are we expecting a blockbuster listing on friday? julia: this generally would suggest is going to pop by quite a lot if this gray market trading is anything to go by and that is 117%, the rise would be one of the biggest rises for hong kong ipo, one billion dollars, a sizable offering. it shows investors are still keen for new issuance despite some of the market volatility that we have seen and also, these are institutional investors which are trading it. they are not the retail ones, which mikey more guided by sentiment, so it does suggest that there is very strong fundamental demand for this stock and that, yes, hong kong ipo will continue to be hot.

we have seen quite a few first day pops this year and that seems to be continuing. haidi: there is a lot of money still hanging around, looking for a place to go after ant was scrapped. why are we seeing it so popular with investors? julia: generally, china tech continues to be a very popular scene. technology generally because of the stay-at-home trend from the pandemic. also, it's benefiting a bit from being the first to go public so there is a bit of a scarcity value. it's the first full pure short video company. the larger rival, on by right dance, is still private so this is a test for the appetite, for its larger rival, and clearly, it's very popular. it has been growing extremely

fast and making efforts to monetize it users, so clearly, investors are buying into that and the idea that it can continue doing so and increase its revenue to eventually become profitable so it shows that there is a lot of interest in this new sector. it was one of the pioneers in terms of fat. -- of that. haidi: julia in hong kong ahead of the ipo. so much interest in the gray market. let's take a look at the markets proper. sophie kamaruddin, what are you watching? sophie: asian stocks are mixed but broadly higher after the rebound we saw on monday. the kospi leading the regional advance. she seo -- the company clocking the best session since march. alibaba on tap today. the strategy team saying strong

earnings and supportive central-bank policy will mean that a correction for asian markets is unlikely. even over concerns there may be a retail driven bubble in the works. concerns around soft data we have gotten of late. we are seeing oil studying as saudi aramco says it sees demand returning to pre-covid levels this year, but silver taking a tumble from an eight year high after cme raised margins. futures falling 2.6 percent in asia trade and ahead of the rba decision, we are seeing the aussie dollar gained some ground. cva saying that fair value for the currency, 76 to 88, depending on where iron ore prices are headed. shery. shery: coming up next, we take a look at india's spending plan with a senior economist.

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karina: this is "daybreak asia." i am karina mitchell. robinhood backers are plowing money into the brokerage at an unprecedented pace. investors led by rivet capital have poured more than $3 billion into the firm in recent days, including 2.5 billion dollars on monday.

funding comes as robinhood fights angry day traders, increasing scrutiny in washington, and questions about its plans for a potential ipo. silver has come off a near eight-year high as the market takes a breath following monday's reddit fueled investor frenzy. active futures have risen as much as 13%, the most since february 2013 following a weekend that saw dealers in bullion and coins admitting they are overwhelmed by demand. cme group says it's raising margins for contracts. goldman sachs is tightening the golden handcuffs for some of its most in demand traders. staff from the more junior ranks of its portfolio trading group are said to have been told six months noncompete clauses before picking up their bonuses. those are usually reserved for more senior staff as goldman looks to make it harder for them to defect. president trump will file his initial defense against impeachment later in washington with a new legal team appointed

at the last moment. the lineup changed after the original lawyers quit over trump's insistence that his case should focus on claims the election was stolen. the new team is said to want to concentrate on the constitutionality of impeaching someone who has already left office. 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. i am karina mitchell. this is bloomberg. shery, back to you. shery: let's turn to india, where prime minister narendra modi announced a mammoth spending plan of almost 500 billion dollars. the budget is expected to help jumpstart growth in an economy battered by the coronavirus pandemic. while some welcome it, others say it does not address job losses, hunger, and rising pressure on the farming and rural sectors. joining us now is our guest. great to have you with as. we have seen the criticism on

the budget, especially on the farming sector that perhaps there is not a substantially big enough announcement when it comes to the anger of farmers we have seen on the streets. the protests. unless your take of the winners and losers for this budget. -- give us your take of the winners and losers for this budget. >> there are a couple of takeaways from this budget. the budget deficits looked a lot higher than what the market consensus was. there are a few reasons behind it. firstly, one of the line items is spending that was happening off budget and was brought above the line. secondly, they are much more realistic than they used to be in the past, particularly when it comes to revenue and growth, and spending has been increased. i would think the winners,

certainly, it was a strong supply-side insofar as increasing spending towards health care. vaccination rollout, a big amount of money was put aside for that. at the same time, you have got a lot of plans for infrastructure to do with roads and railways and the creation of a development finance institution. you need to garner long-term debt finance as well as an asset management company for banks. i think overall, it's an extremely strong push from the supply side. it has better multiplier effects , better for job creation and income prospects, rather than a very short demand side stimulus over the next 12 to 18 months. they have taken up a medium-term

view on boosting growth more durably. shery: how does this set up the economy for monetary policy decisions? we have the rba expected to cut this week. radhika: so the central bank, certainly, we don't expect -- even prior to the budget, we did not expect any move from the central bank in the fiscal deficit numbers that have come out also are unlikely to go in any way convincing them to lower rates any further. i would think they would continue when they meet. we expect the race to be on board. the commentary might make a mention of the fact that fiscal policy is taking a bigger role this year, which it should, because last year, monetary policy was taking all the burden , managing stability as well. this year, i think the priority for the central bank is going to

be keeping rates on hold and ensuring that bond markets -- this borrowing program that was outlined yesterday is much higher than what markets were anticipating and that means there's going to be an increase in issuance and you will need domestic players to step up. i think we could expect some kind of roadmap in terms of how much operations performed because they have to keep the mid to lower end of the curve contained because the kind of excess accommodative stance that happened last year, some of that has to be taken out but at the same time, you cannot allow it to increase by much. haidi: do you see this budget as being particularly inflationary? is it more inflation mutual? --

neutral? radhika: i would think it's more inflationary neutral because partly, you know, from last year , about nine months of the year, inflation was not only above the midpoint, it was above the target range, extremely elevated levels because of the pandemic. this year, we have started seeing inflation come down. so i think there are some inherent inflationary price pressures in the economy because manufacturers are adjusting prices after a year or so. you have oil that has gone up. there are some inherent pressures that will keep inflation above 4% this year, but i don't think the budget per se, apart from perhaps an increase in the import taxes and some adjustments on indirect, that might add. overall, i think -- more demand

focused are seeing a much more inflationary impact but i don't necessarily think the budget will add strongly to the existing pressures. haidi: what happens if the fed starts tapering this year? is the window of opportunity for india to study the ship closing in that situation? radhika: i think a-shares and ems in general are watching with the fed is saying and doing in so far has bond purchases are concerned. if u.s. bond yields do pick up, there is a high possibility that it does narrow for many of the asian central banks as well so i think the impact on rates, per se, i don't think there will be too much of a takeaway. if u.s. rates start to go up as in the indian rates might follow suit so that might mean that the central banks will have to take

a much bigger role. anyway, last year, they already did a lot of open market operations. liquidity neutral. i think that will continue this year, but certainly, it will get a lot harder if the global bond yields, particularly the u.s. ones, start going up. i think it will be more preferable for this part of the region. haidi: radhika rao, always great to have you with us. stay with us for the spending and health care and such. our guest will be joining us a little bit later on that. this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. boeing may lose more than one third of autos due to more delays in the rollout. a likely arrival in 2023 gives customers the right to walk away from sales contracts. boeing has lowered that to 191 planes. 38% fewer than firm orders listed on this website. the coronavirus crushed demand for long-haul aircraft.

tesla has won new supporters. analysts welcome its leadership. alex potter has more than doubled his price target to $1200 from $515 in the latest move by wall street. it is now the highest among analysts who cover the stock according to bloomberg data. he says it may be years before tesla runs out of new opportunities. shares are enjoying a bump in tokyo after the company boosted its operating income forecast, which beat estimates. the cosmetics giant sees operating income for 2020 at 143 million dollars, against forecast of a $95 million loss. it says strong demand at home and in china drove sales in the fourth quarter. however, it warns the global outlook remains uncertain. indented chinese developer evergrande is extending discounts to boost sales and help pay off borrowing. apartment buyers will receive a discount through february if they purchase a property on

evergrande app. other sweeteners include a cashback offer and an additional 7% discount if you pay upfront. let's take a look at some of the stocks we are watching. sophie kamaruddin is in hong kong. sophie. sophie: ahead of the debut on friday, keeping a close eye on the hong kong exchanges, which has been trading 500 hong kong dollars and keeping an eye on stocks in the city which may be short squeeze candidates. you have them saying they don't expect a gamestop episode to happen here, noting there is not a stock in hong kong where short interest exceeds the company's free flow, but over at telomere, you have tencent, which is about 700 hong kong dollars. volatility is at a 2011 five. reporting out to three factors which could allow for that short squeeze to happen for tencent along with may 2 on -- along

with others. keeping an eye on lenovo after citigroup raised its target for the company through 2023 ahead of its results on wednesday. they are expecting robust demand and an improvement in the bottom line when it comes to its data center and mobile business segment. that's take a look at what is going on with markets as we wait on the open. elsewhere in the region, hong kong and china, taiwan, malaysia included after malaysia was on break on monday. taking a look on what is going on with trading. keeping an eye on mediatech in taiwan after it launched a 5g chip which is targeting the u.s. markets. you have futures pointing higher, extending the gains we have seen so far in the early part of the session and china futures also pointing to gains for the h-share market. holding steady at -- this

morning. shery. shery: we will have plenty more to come. our guest weighs in on the retail trading media. why he thinks the saga is merely a sideshow. is bloomberg. thisis bloomberg. -- this is bloomberg. ♪

♪ chris is 9:00 a.m. in beijing and shanghai. welcome to bloomberg markets china open. i am tom mackenzie. >> good morning to you all. we are counting out -- counting down the deals in trade on the chinese mainland. equities are on the up after wall street spends and rally and strategists say the frenzied

speculation will not derai