haidi: good morning. welcome to "daybreak: australia." i'm haidi stroud-watts in sydney. we are counting down to asia's major market open. shery: good evening. i'm shery ahn. haidi: these are our top stories. alibaba says thank you to regulators after getting slammed with a $2.8 billion fine. we take a look at what the penalty means for the future of big tech in china.

jerome powell says u.s. is posed to struggle as the covid-19 remains a threat. australia abandons its vaccine targets. the prime minister concedes not everyone will get their first jab by the end of the year. shery: u.s. futures at the moment under pressure after markets ended. another day at record highs. the s&p 500 surpassing the 4100 level. we have a few things to keep an eye on this week, with earnings season kicking off. jp morgan, morgan -- jp morgan, oldman. in the spotlight. blackrock, pnc, some others that you have to watch this week. let's turn to sophie kamaruddin in hong kong for a check of the markets. sophie: this monday, asian futures are signaling to gains. chip related stocks in focus after ev battery makers in south korea managed to reach a last-minute settlement in the

u.s. presser. the way have and on the chip shortage later on monday. -- the white house on the chip shortage later on monday. osaka and okinawa from monday. the yen, 68. holding on to a weekly gain. the aussie dollar training flat out of the first week. seeing hedge funds turning bullish on the currency with long positions close to a five-month high. seeing the currency at 80 by the end of this quarter. the ceo is warning of a stop start economy in australia and elsewhere while the government has distanced itself from a vaccination target. the surgical glove maker and ppe manufacturer cautioning of new covid hot zones popping up in places like india and brazil. going up the chart on the terminal. india has banned experts from the remdesivir drug which is

used to treat covid. hospitals in india, and the economy is likely to see through expectations for higher inflation. which may weigh on the yields which recently had been positive. seeing a turn there. later from india, inflation data will be closely watched. haidi: let's get back to our top story. alibaba has taken the and usual step of thanking chinese regulators after a record two point $1 billion fine for abusing its market dominance. the amount was based on 4% of alibaba's 2019 domestic revenue. less than the 10% allowed under chinese law. it is a historic move as beijing continues to clamp on its internet giants. let's cross over to stephen engle. i'm trying to imagine a world where mark zuckerberg thanks u.s. regulators for imposing any kind of mind. this really just illustrates how

unique the dynamics are between the internet janet -- internet giants and regulators. stephen: it is not too surprising given the years i've covered china, and alibaba. it is very different of course between alibaba challenging the regulatory framework in china over these years. jack ma i'm talking about in particular, in that shanghai bond scathing comment he came -- he gave in october and november that led to the fall of the ipo. and the subsequent four month long investigation into alibaba and by the way, investigations are still going on. however, tencent on the other hand has come right out, when they were in the regulatory crosshairs, and came out with a similar statement that alibaba did over this weekend, saying we will comply. let's bring up this statement from alibaba. because you are absolutely rightl. -- right. in the west, the tech companies

perhaps fighting the regulators tooth and nail. here we are seeing alibaba saying this statement, alibaba would not have achieved our growth without found government regulation and service. and the critical oversight, tolerance, and support from all of our constituencies have been crucial to our development. for this, we are full of gr respect. ok. it could have been worse. let's put this right out there. $2.8 billion fine. 4% of domestic revenue from 2019. chinese law would have allowed up to 10% fines of revenue. they got off relatively lightly. let's face it, $2.8 billion, alibaba can afford that. this comes back to the chinese government's overarching aim. and that is to send a strong message that now, monopolistic

behavior will not be allowed. but they don't want to hamstring alibaba at a time when tight -- when chinese tech pioneers and giants are also being attacked perhaps from the united states, threatened with delisting. it is a message. a strong one. $2.8 billion is not a small amount of money. however, it is not as bad as it could have been. shery: alibaba can afford it. not to mention it does list that uncertainty around alibaba, around jack ma. what next? stephen: there will be some rectification's, that is the terminology the regulators put out there. that is something alibaba is already likely embarked on. in that is particularly, this one practice of forcing merchants in china to choose alibaba or others. so, that is going to have to be rectified. and also, the question is, they own 33% of their fintech arm and group.

we don't know the rectification's there. there has been lots of speculation. bloomberg news has reported perhaps the data as well as parts of and need to be put under oversight of the pboc, or other regulatory bodies in china. there is a longer process with the fintech arms because that is talking about risks to the financial system, and challenges to the state owned banks, and lending practices that probably need much more investigation than a four-month antitrust or monopolistic behavior that we saw with alibaba. however, daniel zhang, the ceo, put out a statement, this is alibaba's ceo, put out a statement saying alibaba is ready to move on from its ordeal. i think -- i've been covering this extensively, the antitrust investigation. this is probably just the opening salvo of a regulatory shift in china, because the regulatory bodies in china, let's face it, they allowed

these large platforms to grow to where they were with very little oversight. that oversight is now coming in spades. shery: we will be watching those changes that could come ahead. stephen engle, are chief north asia correspondent. let's get over to vonnie quinn with the first word headlines. vonnie: thank you. brazils hospitals are struggling to cope with the crush of covid-19 patients as the nation gets hit by a more contagion's variant. the country reported more than 93,000 cases in a 24 hour period over the weekend. it's more than 3600 deaths. that has taken the total death toll in brazil above 350,000 people. health officials have warned the outbreak is at a critical stage but the president reiterated his opposition to lockdowns in a video released saturday. highlands local covid-19 cases hit a new record, threatening to derail the nation's plan to

welcome back tourists. health officials say daily infection surged to 789. that brings tylan's total cases -- tylan's total cases to 31,000. philippines president relaxed a lockdown in the manila area. people are are required to stay at home but more businesses will be allowed to operate. china's cdc has admitted that the country's vaccine do not offer a high protection rate and may require improvements to boost effectiveness. the country's top disease control officials as the government is considering different methods to boost efficacy including mixing different vaccines, and adjusting their dosage. china's vaccine makers have not released trial data, but brazilian trials have shown an efficacy rate of 50%. the united kingdom will allow the reopening of nonessential gyms, shops, and salons from monday with restaurants allowed to offer outdoor dining. nationwide restrictions have been in place since early

january, with similar rules and other parts of britain. since then, hospitalizations and deaths have fallen, and the mass vaccination effort has seen more than 60% of british adults getting at least one dose. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still ahead, prime minister scott morrison abandons any attempt to set a vaccine target for straley's rollout and he concedes not every australian will get their first shot by the end of the. we have the details ahead. coming up next, jerome powell says u.s. economy is poised for stronger growth ahead. our guest will tell us how he is playing this rebound. this is bloomberg. ♪ ♪

>> actual progress. we are not looking at forecasts

for this purpose, we are looking at actual progress towards our goal. >> it not projected progress. >> we have to see it. we don't have to expected. we had to see it. >> there is no textbook for this. you don't want to be too preemptive. i also don't want to be so reactive that we are late. >> we are data dependent. that is what we are looking for, to see it in the data. >> hard numbers on the labor market and on prices. >> we got a taste of what progress will look like from the march report, close to one million jobs, particularly if you add in the revisions for january and february. want to see a string of months like that so we can show progress towards our goals. haidi: fed officials reiterating policy will remain supportive amid signs of a pickup in growth and inflation in the u.s. meanwhile, in an interview with cbs's 60 minutes, jay powell says he expects to see stronger growth ahead. >> what we are seeing now is an economy that seems to be at an inflection point. that is because of widespread

vaccination and strong fiscal support, strong monetary policy support. we feel like we are at a place where the economy is about to start growing more quickly and job creation coming in more ugly. principal risk towards our economy is that the disease would spread again. haidi: joining us to discuss is al lord. great to have you with us. an inflection point for the stronger growth ahead but still the market seems to believe this is a goldilocks scenario. or we will have stronger rebound but the fed is not taking away the punch bowl. where are the opportunities at this point? al: i feel like chairman powell read my talking points. this market is poised to take off. the fed is 100% behind it. and we are ready to go. we have added over one million jobs, including the revisions. vaccines are getting rolled out. you are just reporting that the

u.k. is up to 60%. the u.s. is over one third, approaching 50% vaccine rollouts. the economy is poised to go in the fed has the punch bowl out, and everyone is drinking from it and it is a great market to be in. haidi: i want to ask you later about what happens when things will way. i want to talk about the lack of volatility. in asia, you have volatility falling to 14 month low. in the u.s., look at this chart, it is flattening. if you look at the futures market, it suggests we could see a more bumpy ride come june, july, october, even as soon as may. what does that tell you about the opportunities, and are we going to see a pickup of volatility and volume, given the drive? al: i would think so. the vix is back to pre-pandemic levels. that does not make any sense. the fed is telegraphed. they are on hold until the end of 2023. this is free money.

this is just get in the market and make money. the fed is not going to do anything with rates for over two years here. it is like free money. that is why you see these assets going above where prediction say it will be. if you look at the bloomberg index, wall street forecast, you have the s&p right now at an all-time high. but it is above where the average research analysts have it ending in the year. so we are already ahead of ourselves. it is all driven by the fed. it is a recovery. everyone wants to get back to normal. it is going to move here quickly. that is what you are seeing play out. back to your original question, it does not make sense to me that the vix is that low. it just doesn't make sense. i can see yes, on the board curve, there is more volatility to come. there is still a lot more risk.

we have a runway here are things are goldilocks and it is going to be good, it is going to be great for a while. but at some point, we will have to pay the piper. we have borrowed too much money too quickly. shery: before getting there on all of that optimism, is that why we are seeing this overheating housing market in the.s.? this chart on the bloomberg showing despite the fact the rates have been rising, and you had mortgage rates that seemed to see a streak of weekly gain for almost two months, the stabilized a little bit. those building stocks have been on record highs. al: yes. we will get to inflation. the cost of building a house has risen by $24,000 in the past several months as the manufacturer, the homebuilder manufacturing index has come out. inflation is here, prices are

rising, supply is low. there are now more registered real estate agents than there are houses for sale. it is going to continue to be strong. and that is what our underlying dynamics are here. shery: which takes us to the risk question. one was the last time we saw this overheating of the market? and what could be the downside of all of this optimism? al: great question. at some point, there is a downside. we will have to pay for this. this debt fueled, fed fueled boom will come to an end. the cycle will have a counter. at that point, it will be painful. i don't know when that is. it is certainly not right away. but if you just take a look, we have u.s. treasury yields around 166. if you own long treasuries, you are in the negative yield --

negative price point for the new year. if you held u.s. corporate bonds, you have lost money this year. at some point, we have to pay for it. at this point, the market is still set to run. shery: in the meantime, are you worried about inflation? we saw producer prices in the u.s. accelerating. they are the base affects as well. at the same time, when will this become an issue? al: i'm worried about it, but not for a while. i think we will see cpi go from 1.3% to 1.6% with this month's reading. it will go probably to 2.5% in may or june, given the year-over-year increases of obviously, can a covid induced shutdown, versus what we are seeing is a reopening. but yeah, the fed is telling you that we are going to have inflation. but it will be transitory, and powell's word -- in powell's

word. the market is not worried about it right away. you have seen yields backup tremendously on 10 year and 30 year treasuries. but it will get worse as we go forward. it will take time for this to play out. the market -- the stock market is anticipating this, and has had a great run. despite what earnings have done. we will probably see first quarter earnings in the s&p be up 25%, 26%. the markets are already ahead of itself. at some point, you have to worry. you don't have to worry right now. shery: al lord, it was great having your insights. capital management founder and ceo. you can get more on powell's comments and around roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg suppressed -- subscribers, go to dayb .

also available on mobile in the bloomberg anywhere app. a bitter dispute between two south korean ev battery makers ends with a settlement, thanks to political pressure in the u.s. we will have the latest. this is bloomberg. ♪

shery: the global chip shortage is on the agenda this week. biden's top advisers planned to meet monday with semiconductor and auto companies to discuss the global shortage. among them, gm and global foundries. the company that sits at the center of the global ship -- chip crisis going to deliver earnings. tsmc has been on the frontline of bottlenecks that have had companies from apple, to voltswagen. those trips are the -- are on the table. the taiwan company has committed to spending $100 billion over the next three years to extend

capacity. haidi: yeah, let's talk about the auto industry. south korean electric vehicle battery makers have agreed to settle a dispute with wide reaching implications. sk innovation will pay 1.8 billion dollars to lg chem to end this lengthy legal battle. su keenan has the latest. the agreement also is a sitting port bound on innovation and a tough situation for president biden. su: yeah. it significant because aside from holding up production for auto manufacturers, it is disputed to become a political conundrum for president biden. as many as 6000 jobs in politically sensitive georgia are at stake. that is where innovation has the u.s. plant. and biden was almost going to be forced to make a key decision between's climate agenda and intellectual rights. the dispute between the firms

was over battery trade secrets. both companies have released statements saying they will now work together to develop batteries "in particular, they will work to strengthen the battery network and environmentally friendly policies that the biden administration is pursuing." the 1.8 billion sk innovation agreed to pay lg energysolutions is divided equally between cash and loyalties -- royalties and the settlement of a 10 year import ban on sk innovation batteries into the u.s. as part of the agreement, both companies agreed to withdraw all legal issues, not just in the u.s., but in south korea and abroad. shery: explain to us a little more the broader impact on the auto industry, not to mention the political ramifications. su: you have president biden issuing a statement saying the agreement is "a win for american workers and the american auto industry." you also have a definite precise

win for ford and voltswagen as they have scheduled rollouts of new vehicles that would have been impacted, and both companies issued statements of applauding the a settlement -- of the settlement. a major headache for both south korea and u.s. government officials. they spent weeks, both of the governments, pressing the companies to reach an agreement. as you may recall, biden was facing an april 11 deadline. that is today, to decide whether to overturn the import ban that president trump had imposed, or to do nothing. so this is a nice way to sidestep all major issues. back to you. shery: su keenan there in new york. here is a quick check of the latest business flash headlines. chinese ride-hailer is set to file confidentially for u.s. ipo which could value the company up to as much as $100 billion.

goldman sachs and morgan stanley are tapped as underwriters with a dual listing in hong kong also in the cards for a later time. it is backed by softbank and raised $1.5 billion loan to shore up capital the head the listing. bloomberg has learned microsoft is in advance to talks to buy artificial intelligence and speaks -- and speech technology companies. we're told a deal could value nuance at $56 a share, giving it an equity value of $16 billion. that price would be a 23% premium to friday's close. haidi: let's take a look at the day ahead at the start of this brand-new week, in australia and new zealand on the corporate calendar, the australian reporting the emergence of general insurance unit. also reporting high-profile shareholders voting against the

company's report of the annual shareholder meeting on friday. but the big story, pm morrison has abandoned the goal of vaccinating all residents by the end of the year or by october. that was a previous goal. we get more on that, in the latest on the vaccine rollout here. this is bloomberg. ♪ bloomberg. ♪

vonnie: you are watching "daybreak: australia." i'm vonnie quinn with the first word headlines. iran is calling a blackout at its biggest uranium enrichment facility an active nuclear terrorism, claiming it on opponents of talks to revive its nuclear accord. the country's top officials did not elaborate. but in the past, iran has blamed israel for attacks on its nuclear infrastructure. israel opposes the 2015 nuclear deal and does not want the u.s. to lift sanctions on tehran. jordan's king and his half-brother made their first joint public appearance since the palace's field last week.

he was seen marking a public holiday with other members of the royal family. it was his first public a pit -- public appearance since he was put on house amid accusations he was involved in a plot to destabilize the kingdom. builders in ecuador are said to elect a new president. the election is between a conservative businessman and a protege of former president. this -- who is predicted to win here the current president is not seeking reelection. he failed to kickstart the economy after imposing severe authority measures as part of a 6.5 billion dollars financing agreement. the eastern caribbean islands of st. vincent suffering power and water outages as the volcano continues to erupt. it has seen plumes of ash and has caused rumbling that could be heard more than 30 kilometers south of the capital of kingston. it also forced about 60,000 residents to flee their homes.

scientists warned the explosions could last for days or even weeks. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: australian prime minister has abandoned setting targets for the country's vaccine rollout, conceding most australians will not receive a dose by the end of the year. we had been told october. then the end of the year. now, he is scrapping any kind of target. how did it all go so wrong? >> there have been multiple problems here, not the least of which has been supply. it has been difficult to secure doses of the pfizer vaccine. 20 billion extra doses have been secured of pfizer, but they will not arrive until the last three months of 2021. the issue has been compounded by the safety of the astrazeneca vaccine. the government saying that is no longer the preferred jab for people under 50 due to the blood

clots linked to the vaccine. still recommended for the over 50's because the balance of risks suggests it is better to have the astrazeneca jab than not. australia, 3 million doses behind schedule. there have been issues around how this will be rolled out between -- with gps complaining not getting enough supply or supply arriving without warning. as you say, scott abandoning the target, saying on his facebook page that the government is not set nor has any plans to set any new targets for completing first doses now. shery: what does that uncertainty over the astrazeneca vaccine mean for tso which is manufacturing the vaccine in melbourne? paul: tsl says it will keep on making it. in planes to fill their government order of 50 million doses regardless, sang the astor vaccine remains critical for the protection of our most vulnerable populations. the first batch of 830,000 doses has already been released, csl says it will be producing one

million doses per week. all of this takes some ramping up to get production going. each batch takes about 12 weeks to produce. and csl says it is committed to fulfilling the contracted arrangement for 50 million doses. we also have some doctors refusing to administer the astrazeneca vaccine to under 50's, concerned about legal about -- legal liability. the prime minister saying if anything goes wrong, the astrazeneca jabs should be given to over 50 is regardless. shery: paul allen with the latest on the vaccination driving australia. let's turn to the u.s.\ michigan's governor is urging the government to increase vaccine doses to combat the spike in virus cases. the white house has declined to do so. in england, restrictions ease on monday with non-essential shops and hairdressers among those able to open for the first time since early january.

let's get the latest from bloomberg editor ian fisher. how bad is the situation english and what is the federal government say? -- saying? ian: the situation in michigan is quite bad. it is the worst in the nation by far. it has not reached the levels of the holiday surge, but michigan has one of the highest rates and in particular, the u.k. variant. they suddenly had this huge spike. it is not just michigan, although it is the worst. mission -- minnesota, illinois, other states are experiencing something similar. some of them are saying to the government, give us more vaccines if you have the capacity to get more. the biden administration so far has said look, we have been allocating this by population. we don't see any reason to change that. by the way, you have a lot of doses that we have given you that you have not administered.

i thought what was interesting about today was governor whitmer, who is a democrat and an ally of president biden, is continuing to press even though she has been rebuffed by the white house. and today in a public way on national television. she really feels that is going to help the very bad situation in michigan. haidi: in england, they are lifting restrictions on monday at a time when we are seeing one model suggesting that we may be close to herd immunity there. we are also seeing spikes of the virus elsewhere in europe. ian: yeah. i mean, the u.k. has at the moment made an incredible turnaround. they, as he said, believe that they are going to hit herd immunity, or at least england i should say, fairly shortly. i must say, many scientists believe that is a very difficult judgment to make.

but vaccines have covered about 30% of their population, compared to roughly 10% for countries like france, germany, which are seeing big spikes now. boris johnson, the prime minister, has been under enormous pressure to lift these restrictions. barring pubs and restaurants with outdoor dining, hairdressers, non-essential shops, they will all open and the pressure will be taken off both the prime minister and the people of the u.k. shery: let's turn to china. of course, there has been lots of unanswered questions about the chinese vaccines. finally, we are hearing that china cdc, the head of the agency, is now saying perhaps the efficacy is not as high. ian: yes. this is quite interesting and

has potentially huge ramifications. the head of china's cdc made some comments at a conference in chengdu, picked up by a newspaper and they quoted him by saying, the efficacy for the chinese vaccines were not high. obviously, the ramifications are huge because they sent hundreds of millions of doses around the world, including to countries like brazil, turkey, egypt, everywhere. it has been a bit of a tool of diplomacy villa. now they are saying, well, maybe it is not so great. the chinese government has pushed back through one of their state owned newspapers saying, this has been hiked. he was talking more generally. but still, this raises the question on the minds of lots of

people. china has at least the efficacy of its vaccines and it uses the technology that is considered to be inferior to the other vaccines, pfizer and moderna. haidi: bloomberg editor ian fisher there. the fed has signaled the u.s. recovery is at a turning point with stronger growth expected. but it does still say the threat of covid-19 remains. policymakers are looking for hard numbers on whether they are reaching their goals before adjusting interest rates. he spoke exclusively to bloomberg. >> the federal reserve in august adopted a new framework, it is an evolution but a robust evolution. in primarily, it is outcome-based. our goals are maximum employment and price stability. we want our policy to be robust if our models break down. we can still do monetary policy, but we will be more outcome-based and less outlook

placed. i think that has served us well in the pandemic and i think will serve us well in the years ahead. >> can you characterize that as a commitment to being late instead of being early? richard: what we said in september of last year following our framework announcement in august is that we do not expect to lift off until preconditions are met. first, that inflation gets to 2%. we want the inflation for at least a year or two and we want that to be sustained. not one and done. we want to be looking at labor market indicators that are consistent with a fully employed economy. third, we want that to be sustained. we think that is appropriate since we have had the effect of lower bound, inflation has been below our target for most of the last 10 years. under those circumstances, that is a good policy. you are correct. in the past, the fed was more preemptive and my research suggested if you've got good models, you want to be

preemptive. if the models are not serving you well, you are more robust if you are looking at data. that is the way i characterize it. jonathan: conversation as you know is over what substantial progress actually is? you are familiar with the debate, we talk about it every day on programs like this. do you think it is necessary to decide what substantial progress is? richard: first of all, it is actual progress. i think that is an important point. it is hard numbers on the labor market and on prices. that is the first point. secondly, we are early on in this year. we have already penciled in 6% or 7% growth. under outcome-based policy, we really want to see that. as chair powell has indicated and i have indicated, as we go through the year, as the data comes in, as we release our projections based on the incoming data, we will have a sense on where we are relative to that progress, and chair powell has indicated as we think

we are making that progress, we will communicate that to people who listen to our communication. so i think this is really where we want to be. it is actual progress, it is not projected progress. as we go through the year, we will be informing the public about our views on that progress. >> are you afraid of inflation? should we fear inflation? jonathan: the reality -- richard: a reality is we have a dual mandate and half of that is price stability. the federal reserve, every federal reserve since paul volcker's leadership has been dedicated to that. but tom, 2% as a ceiling, which is in effect the way many thought of our private -- prior policy, does not serve the economy well. it has serious implications for the labor market. essentially, what we have said is we want inflation outcomes that keep inflation expectations anchored at 2%. that means sometimes we will be

above 2% and sometimes we will be below. we focused on inflation expectations intensely. we have a new index of common inflation expectations. i would say and we have indicated, that because of the nature of the pandemic shock a year ago, as we move through 2021 on a year-over-year basis, headline inflation is going to likely move above 2%. because we will be comparing this year's prices with last year's collecting prices. we expect in our baseline, most of that to be transitory and for inflation to return later this year to around 2%. that is our baseline. let me also say that around a baseline, there are risks on both sides. and in the risk case in which inflation were to begin to move above a level consistent with price stability, we would have the tools to address that and i'm confident we would under that risk scenario. shery: fed vice chairman richard clarida speaking exclusively to

bloomberg's tom keene and jonathan ferro. coming up next, microsoft is about to make a big bet on speech technology and ai with a potential purchase of the company that laid the groundwork for apple's serious software. we have the details. this is bloomberg. ♪

haidi: let's get back to our top stories. china has levied a record sign

of 2.8 billion dollars on alibaba after an investigation that lasted for months. the amount may be more than manageable for a company of this scale. david ingles is with us. put this number into context for us. david: i think -- good morning about -- good morning, by the way. steve mentioned 4% of domestic sales goes down a little when you look at 2.8 billion as a percentage of total sales. i think the point being that alibaba is a very -- it's liquidity situation, we will flash a couple of graphics to put that into context. as far as free cash flow is concerned, on a single year, just under 4%, as you can see here. 4% of free cash flow. cash on hand as of december, 12 months -- as of december, $70 billion. that is just cash in hand that goes up when you include other

assets. if they did use cash to pay for this $2.8 billion, the cash ratio, rough calculation, it goes down to 1.2. it is a big number but not a very big number for a very big company like alibaba. shery: exactly. given that it sort of lists the cloud of -- lives the cloud of uncertainty hanging over alibaba, jack ma, what can we expect the reaction of the market to be? david: this is one of those things i could go either way. gut feel and based on how things tend to react, and to your point, and we had a note out of bloomberg intelligence, it is a small price to pay to alleviate the uncertainty. when you look at the terminal chart, it shows you that since uncertainty began with the pulling of the ipo, alibaba shares have severely underperformed. what is going to be interesting to see is whether or not -- how fierce it will react. i think it is a 12,000 page

document, and it is posted on the chinese government website. now that the rules are more clearly defined of what a market is, what a dominant player is and how that is defined within that space, is it going to get rid of this practice? pick one of two, this monopolistic practice so to speak. we will see what happens but futures are pointing out that it will be an update. we will see when china and hong kong open up. shery: david ingles. let's continue this conversation. time for morning calls ahead of the asia training date with sophie kamaruddin in hong kong. alibaba, one of the stocks we will be watching. tech stocks in general. china's bull run has been tested. we will seek -- what is the outlook? sophie: we have turned core since february. down 13% since hitting the peak that month. employees having moderate did -- moderated over tightening liquidity as well as policymakers have turned their attention to financial risk,

antimonopoly investigations key among that. for sean darby, the question is if the market is fully appreciating the subtle changes authorities are making to a dual circulation economy. but they are highlighting the chemical sector tells a better outlook for china's economy. the head of aipac, saying china is no exception to the asian stocks and the ubs key investment office, the expectation is for volatility to stay elevated as the rise in u.s. yields are having pressure for china's growth stocks. haidi: on that, what is the involvement when it comes to the implication of high yields on equities? sophie: you have goldman strategists saying the stocks should be able to digest yields, as long as that comes with the expectation for growth and higher real yields. they see room for more rotation from growth to value. they do have a preference for

non-us equities over the united states. goldman also noting that it is too early to call the end of the bond bear market, with global growth seeing after the second quarter. shery: let's turn to our bloomberg scoop. microsoft is set to be in talks by to at -- to buy ai companies, which could potentially value the firm at about $16 billion and possibly its second-biggest acquisition. let's lead it to our -- let's take it to our reporter. they have been collaborating for a couple of years. what is in the technology that they want? >> microsoft has worked with nuance for a while, and nuance is a pioneer in speech recognition software and artificial intelligence. they laid the groundwork for technology that apple later adopted into siri. since then, nuance has evolved

its business and it is more focused on the health industry and health care. that is what is a tracking microsoft to it. nuance has great contracts with a lot of big medical providers and it is seen as a way for microsoft to get an edge in big health care tech. haidi: what does this tell us about the m&a strategy? >> they have been aggressive. bloomberg has reported over the past few months that microsoft has looked at different targets before, like in the internet space. it has looked at pinterest. and recently bloomberg reported it held talks with discord, the audio videogame chat app. but when it actually transacts on details -- on deals like this potential one, it seems to be more focused on the enterprise space. medela has brought it further into benny's with corporate's.

this would be the second largest deal they have ever done after linkedin, $26 billion a few years back. it shows that microsoft is still really aggressively trying to buy companies that serve the enterprise. when they are not serving the enterprise, they dubai videogame companies. this would be the biggest deal since its last deal that closed earlier this year for a videogame play. haidi: what does this mean for the talks on going with discord? liana: it is unclear at this point. microsoft has a huge corporate development team, so they are more than capable of negotiating different deals all at once. bloomberg has reported that if talks are successful with discord, there could be a deal by the end of the month. what we know for sure is that the talks with nuance are definitely more advanced and it should look like we should see a deal as we have reported this week. haidi: liana baker, two and into

bloomberg radio to hear more from the day's big newsmakers. to get an in-depth analysis from the daybreak team with our broadcasting from our studio in hong kong. you can listen via the app, radio plus, or bloombergradio.com. we have a lot more ahead. this is bloomberg. ♪

haidi: a check of the latest

business flash headlines. lg energy have settled their trade sick -- trades that to abort -- innovation has agreed to pay a settlement and withdraw all lawsuits related to the matter. the agreement will save as many as 6000 jobs in georgia as well as the rollout of ford and voltswagen's new electric vehicles. travel logo are going public in the public -- in the coming months, kickstarting a coming out party with southeast asia tech sector. grabbed is set to unveil a listing valued at more than $34 billion. indonesians company will follow suit. it is backed by billionaires richard lee and peter thiel. ginkgo biloba works is said to be bay -- weighing backed by the former hollywood executive harry sloan. the potential merger with equal

acquisition will reportedly be worth about $20 billion. that would put it among its biggest mergers to date. ginkgo is backed by bill gate's private investment firm and hedge fund back in global. a deal could come this month. melvin capital, the highflying hedge fund that lost billions of dollars through the stock frenzy sold his first quarter decline it's -- decline extend. there was a 7% last month reversing a gain of 22%. that is founded by -- posted a 53% loss in january. coming up in the next hour of "daybreak: australia." a busy week ahead on the asia eco-front as well as what china gdp data on deck, along with others. we have our guest who will tells what she's expecting. the pandemic followed on emerging markets as the head of congo will give us his top winners and losers. that is it for "daybreak:

australia." "daybreak: asia" is next with plenty more to come. this is bloomberg. ♪ s is bloomberg. ♪

haidi: very good morning, we're counting down to asia's major market opens. shery: welcome to daybreak asia. our top stories this hour, a start to the week after jay powell/prospects of stronger growth and hirings in hong kong and japan are pointing higher.