haidi: good morning. we are counting down to asia's major market open. shery: welcome to daybreak asia. asian stocks -- in the u.s., text daca -- tech shares led the way down. the chinese president is hours away from addressing the form, addressing challenges for the

post-pandemic world and offer solutions from china. big finances lining up on both sides of soccer, said to be weighing out a new deal while jp morgan is backing the top club as it looks to break away. haidi: let's take a look at how markets are heading up today. sophie: asia and futures mostly lower. makes one having a capital rate to edge out rivals. rio tinto out with fourth quarter production updates and in australia, astro pay -- we have a rate decision from indonesia and meeting minutes with the aussie dollar trading at a one month high. nikkei futures are little changed as markets consider the

potential to declare a state of emergency. fresh records in india and new delhi, the country has lowered the vaccination age. spe munis edging higher and the dollar holding losses after a six week low. lti adding about a third of a percent, slipping into negative territory with crude futures. offshore edging closer to the 650 level. they have revised the forecast to 650 by the end of june. shery: the chinese president

will be delivering a virtual keynote speech later on tuesday. he is expected to touch on the challenges the world is facing and what solutions his country is offering. this comes after leaders addressed everything from monetary inflows to a digital you on. let's bring in susan ingle. what are we expecting the president to say? >> last year, it was canceled. the first time in 17 years i had not gone to the forum. this year, it is a mix between virtual and off-line, meeting in person. that's less than normal. but still, this is the first off-line big event in china and china wants to chart the post-pandemic recovery and outline some of the risks and the global economy.

that's what we are likely to hear. and any time he speaks at the conference, usually every other year, he gives the plenary opening session keynote and that adds so much more attention and you get the enterprise chairman's there and you get international delegates coming. the blackrock chairman and founder will be giving a panel later today along with the former pboc governor who is part of that management there. in addition to the speech coming up later this morning, we will get the central bank governor, he will be on a panel at 4 p.m. it's an interesting day and more interestingly perhaps is the optics involved. we are hearing very few people

are wearing masks and they are showing china is leading the way out of the recovery with very few infections and the economy blistering growth. that's coming off a very low base from last year but china wants to give the impression that the chinese economy is humming quite well despite the risks xi jinping will outline in his speech. haidi: there was quite a heated conversation about the criticism -- >> the interesting thing is that it's it -- it's different from davos. every year, they alternate the cities, which is more internationally focused, but this forum digs into the issues

led often times by chinese delegates and dignitaries. the longest-serving central bank governor in china's history has been an active participant and he had a panel yesterday where he got quite this of for us in his defense of china's role in the belt and road initiative. some have called it debt diplomacy, but he countered that saying these are market decisions made from the bottom up. china has excess capacity and he criticized the politicization of the debt diplomacy and said it is a good policy that will continue forward. so there will be a number of

these issues. the panel from larry fink will be on pension reform. it sounds a bit wonky but they will go into great detail. haidi: stephen engle in hong kong. you can turn to your bloomberg for more on the address. let's get you to vonnie quinn in the meantime with the headlines. vonnie: secretary of state antony blinken has warned that the u.s. has fallen behind china to shape a green future. he said the u.s. needs to seize opportunities created by climate change to export american values. he pointed out china's dominance and green energy production. >> china is the largest producer and exporter of solar panels, batteries, and electric vehicles.

it holds nearly a third of the world renewable energy packets. if we don't catch up, we will miss the chance to shape the climate future in a way that reflects our interests and values and we will lose out on countless jobs for the american people. vonnie: the philippine president says challenging china in this china -- in the south china sea would lead to violence and would only do so of beijing drills for oil there. it was the first on the issue since chinese vessels responded to a contested region the water. businesses have called on china to withdrawal, calling it undisputed territory belonging to the philippines. and the philippines have authorize the use of the johnson & johnson vaccine just days after the u.s. has suspended it. according to the world bank,

they have administered just 0.2 doses per 100 people compared to four .2 doses and 1.1 in malaysia. india imposed a weeklong lockdown in new delhi. authorities say they have been pushed to the brink in covid-19 cases. the country says it is expanding the vaccination program to all adults starting on may 1. india has administered 120 million doses to its population of 1.4 billion people. 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 vonnie quinn. this is bloomberg. shery: coming up, we look ahead to president biden's landmark climate summit and discuss where the world's superpower stands. and later this hour, a $7 billion rescue package to stop

soccer clubs from breaking way. we will talk about competing visions for the world's most popular sports and how much they are financed -- and how they are financed. this is bloomberg. ♪

haidi: weakness in the tech sector have pulled stocks to an all-time high. joining us is the chief u.s. market strategist at morningstar. great to have you with us. we have seen earnings fight perfection in recent rounds but the s&p 500 is already above year end estimates come up so where do we go from here? david: we are pretty much in the same boat but we think the market is overextended. u.s. equities are probably about

5% overvalued. having said that, we see value in a couple of different areas. the value category being one of those areas investors should look to overweight. looking at some of the large-cap stocks, they underperformed in the first quarter and that's another area we had been underweight and i recommend investors to take a look at. shery: it has been one year since we sought to bti futures going into negative territory. since then, energy stocks have rallied almost 40% across the world. is there still room for more gains? david: according to our calculations, it's the most undervalued of the sectors we cover. we are looking at where we think oil prices are going to be by the midcycle. it's actually a little higher than where we forecast over the

long term but based on our models, we think it's about 15% to 20% undervalued. haidi: are you looking at transition energy as well? are there other investable outcomes you are looking for? dave: we are looking at the biden infrastructure framework right now, looking for those subsectors in energy that we think are going to do well. a lot of those will be in their green and sustainable areas. haidi: we have been talking about the great strides the u.s. is making toward vaccinations and we are very concerned about these three new variants and the complacency that could lead to more spread. are you concerned about that? dave: if the variants are not

mitigated by the current vaccine and that leads to further shutdowns, that would shut down economic mobilization and there would certainly be some problems . but we are not seeing that at this point in time. shery: what does it mean for treasury yields? we seem to weeks in declines. 10 year net longs are the highest since 2018. where do you see rates going from here? dave: we expect rates to drift upward and a lot of that just goes towards this economic normalization we expect to see. we do expect inflation to moderate and go up. we are looking at 2.1% and then 2.3% in 2023. we expect the 10 year to rise but i don't expect its a real

risk to the marketplace. i don't think the rise in interest rates will affect the stock market that much. haidi: great to have you with us. you can get more on the markets in today's edition of daybreak. if you are a bloomberg subscriber, go to your terminal. you can customize the settings and just get the news and assets that matter to you. coming up next, emergent tumbles after the fda tells him to stop making the johnson & johnson covid vaccine. this is bloomberg. ♪

shery: nikkei futures under pressure.

we've seen the japanese yen at a six-week high against the u.s. dollar. some source we are watching in japan -- toyota expecting to have sufficient semiconductor despite an industrywide shortage of chips. it toyota executive bob carter spoke with bloomberg earlier. meanwhile, japanese ruling party lawmaker says the coronavirus vaccinations may not be complete in some areas of japan until spring next year. in some regions, japan has administered less than 2 million doses to a population of 126 million people. asahi reporting tokyo may ask for another state of emergency. haidi: staying with the vaccine,

emergent virus solutions has been told to stop making a covid vaccine for johnson & johnson. the key ingredient had to be thrown away. is there a concern that even if production gets restarted that the -- that there will be serious setbacks when it comes to the availability of this vaccine which was pretty important? guest: the johnson & johnson vaccine is seen as a key piece to vaccinating the world. the setback, the temporary pause on manufacturing is going to decrease the number of vaccines available but most countries are not using it currently, so there is a swelling of shots that are not being used.

they have fda end of regulators clear again, i think they will be able to come across this hurdle easily. the lingering concern that things can be more problematic is questions around people who are afraid to get the vaccine even though the risk is very low rather than a supply issue. shery: doesn't help that we are heading into summer and summer holidays? guest: the u.s. state department says they are going to update the number of companies, they are warning the u.s. not to visit -- countries they are warning the u.s. not to visit. 80% of countries, the state partners saying they are considering these high level advisories. they don't ban you from going. unlike certain areas like hong kong or australia, you don't

have to go into quarantine. but having the state department warn people and say it is not safe to go to four out of five countries in the world is a terrifying thought. shery: the latest there on the virus and vaccinations. let's get a check of the latest business flash headlines -- makes one selling $10 billion in stocks and convertible bonds as it looks to compete with rivals like alibaba. the chinese delivery giant is marking 187 million shares while raising $400 million on tencent. it is the largest ever sales by a hong kong company. morgan stanley selling unsecure bonds that may total $6 billion,

joining its peers and issuing bonds after earnings and adding to a record borrowing spree for wall street biggest banks. sales have proceeds marked for general corporate purposes. rio tinto reporting iron ore shipments rose to 77.8 million tons, meeting analysts expectations. they still see iron ore shipments at about 340 million tons and maintains its ranges in a robust economic growth in the near term. bmw reporting first quarter profit jumps in regions, especially china. earnings rose to $2.7 billion, exceeding estimates. they were boosted by demands for hybrid and electric vehicles.

haidi: when electric car maker says electric cars make up 10% of china car sales. the global chip shortage would make second-quarter tough for the company and temporarily suspended production last month. they spoke exclusively to tom mackenzie at the shanghai auto show. >> march was a milestone for the tv market as it was the first time they accounted for more than 10% of new car sales. more and more individual users are buying ev's and this is a very good start. i am very optimistic about the market, including the second half. tom: some were saying you are going to be able to deliver 185 thousand units -- is that an achievable target? >> in the first quarter, we delivered 20,000 cars and

reached a milestone earlier this month. we are very confident about the delivery outlook but do not comment on specific numbers. tom: every time we talk to you, we talk about competition. we talk about ever grand, the real estate developer -- is this a healthy development and does it concern you? >> i welcome competition and innovation. we are seeing many new companies entering the market, but this is very long-term. i don't think it is a short distance race, but long distance running. we are very confident in long-term competition. tom: this year, bmw, audi, mercedes, they are all coming out with electric vehicle

brands. those legacy carmakers, will they make an impact on the electric space? >> we see legacy brands lunching competitive products, still they are latecomers. they still have much work to do. we are also watching big technology companies like huawei and baidu entering the market. we need to see the market holistically. tom: a number of automakers feeling the impact of the global chip shortage. is that the end? do you see more pain and pressure ahead when it comes to the supply of chips? >> the chip shortage significantly impacted the entire automobile market. as our quantity is relatively small, we are confident we can whether the situation despite the challenge. we hope the supply improves and

the second half of the year, but the second quarter will be very challenging. tom: what are the steps specifically you are putting in place to address that chip shortage? >> we built a team which oversees the entire supply chain to monitor which supply will affect our capacity. i think the mechanism is good. we started this last year and it ran well in the first quarter. shery: we will get analysis on the future of china's ev markets and the wider auto industry in the next hour. this is bloomberg. ♪

vonnie: this is daybreak: asia. the united kingdom has added india to its travel ban list after the emergent of a new variant that could be resistant to vaccines. under the new rules, anyone who doesn't have u.k. residency rights will be refused entry to britain if they've been to india in the last 10 days. this comes hours after boris johnson canceled plans to visit new delhi. russia says the sputnik five covid vaccine is 97.6% effective according to the nearly 4

million russians who received both doses. russia says the latest results will be published in a peer-reviewed journal in may. alexey navalny is pressing on with his nearly three week long hunger strike even after being moved to a prison hospital. his lawyers say he refused food offered by staff. his aides warned that he was days from death. security being ramped up in minneapolis after the jury retired to consider the verdict against derek chauvin accused of killing george floyd. the defense contends floyd died of his underlying heart disease and illegal use of drugs. prosecutors argue -- the case

sparks a black lives matter protests. 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. shery: let's see how markets in asia are setting up for the open. let's turn to sophie for that. sophie: this tuesday, nikkei futures in singapore lower by 1%, reporting tokyo may declare an emergency as early as april 26. futures pushing higher -- missing estimates. check out wti, edging higher as we mark one year since crude futures fell into negative territory.

oil prices and energy stocks have rallied, jumping considerably in that time. we have opec reducing production by more than 11%. they agreed to restore production and they may at the next ministerial meeting. shery: still ahead, developing eight digital health passport. we have more interviews later -- will the largest hotel franchise company and -- plenty more to come on daybreak: asia. this is bloomberg. ♪

>> china is the largest producer and exporter of solar panels, wind turbines, and electric vehicles. it holds nearly a third of the world energy packets. if we don't catch up, america will miss the chance to shape the world's climate future in a way that reflects our interests

and values and we will lose out on countless jobs for the american people. shery: antony blinken warning that the u.s. is falling behind china to shape the world screen future. it's big week and the world is awaiting what may be an ambitious emissions target from president joe biden when he convenes his virtual summit, a goal that would dictate climate change efforts at home and across the world. this as power and transport continue to make up the majority of omissions in the united states. the nation is still the second-highest highest emitter of greenhouse gases behind only china. while we did not get a specific target, the two did agree to cooperate on climate and green initiatives in their joint statement. japan has had a zero emissions target for 2050, but it has been criticized for not moving

quickly enough. sources suggest the u.s. is weighing an ambitious plan by cutting emissions by 50% or more by the end of the decade rather than setting a longer-term net zero goal. haidi: let's bring in the head of aipac research at bloomberg energy finance services. we are talking about the policies agreed upon -- where they's substantive? >> thank you for that question. it was quite substantive. if you want to look for president, you would have to go back to 2009. the agreement was a lot less ambitious. this time around, the commitment is very long but there are a couple of keywords, the -- that japan and the u.s. have pledged

to make their best effort to abide by a one point five degrees celsius pathway as well as achievement to emissions by 2050. shery: what was china's climate agreement ahead of the summit? >> when we look at the agreements made throughout the u.s. made under the paris agreement, their short-term targets were more ambitious than china. but of course, china is the world's largest manufacturer as well as the largest market for green technology and china was the first major asia-pacific economy to announce a carbon neutral target and stole the thunder ahead of japan and the u.s. still, we have to see how far

they are translated into action. but for the time, china seems to be out of the game. haidi: we have heard the u.s. is planning to donate or provide a significant amount of aid to developing nations to embrace clean energy. what else are we expecting to be substantial outcomes from the summit? >> a couple of things. under the paris agreement, several economies made a commitment to provide annually up to $100 billion to developing economies. the target was 2020 and so far, looking at the estimates, it does not seem like a missed opportunity. the u.s. reduced its commitments to facilities such as the climate fund. any increase there would be very

welcome. the second thing is the u.s. and japan, existing targets -- we are expecting both countries will announce new targets in their upcoming climate summit and the new targets will very likely be aligned to that pathway. shery: what are the implications for other aipac economies? >> if the u.s. and japan increase their ambition, that can create momentum in common with the european union to put pressure on countries and this could be challenging for developing economies. but the good news is if japan and the u.s. are willing to fulfill their commitment, that means they are willing to provide more financial aid to these countries. places like indonesia and

vietnam, they can expect more support and this allows them to play the competition to get more favorable terms for college transfers as well as investment. haidi: let's take a look at the big business story -- the governing body set to be in talks over a package to overhaul its internment for a new breakaway super league. our next guest says it is a seismic moment for the beautiful game in europe and around the world. great to have you with us. does anyone else want this breakaway league other than the owners involved? >> that's a good question. personally, i don't think so. there may be some spectators and fans around the world who think it's time to move into the

future and have a super league. most fans who have grown up with the traditional systems of domestic competitions will turn their nose up at this. i'm one of them. i don't think this is a good thing for football because i think it will re-fence all that money and there is a lot of it, for a handful of clubs that are going to essentially dictate to the rest of the world game and i think that's a hostile takeover. as powerful as those clubs may be and as popular as they may be around the world, nobody is giving them that democratic right to basically take over and that is sooner than what they have done. shery: what could be the backlash? my husband told me at the liverpool game this morning there were signs where fans were

essentially condemning this move. is enough to turn away from the game and their teams? could this change how you engage with sport? simon: it could well do. it's incumbent not only on supporters but we are seeing the way for the premier league to take a very strong stand and threaten the clubs and the players who play for those clubs with sanctions. ultimately, it's the fans who are foes have the power because money is the only language rich businessmen understand. if the fans don't buy tickets to watch the games -- i know they can't because of covid, but you know what i mean, if they don't buy the tv subscription to watch these teams play, then it will die a very quick death. it's a good question. the problem is i was born in the

city, my father is a man city fan, my great granddad played for them in 1892. how do you give that up? it's like giving up food. i think we are at a point and at this juncture the game has to come first, otherwise it's going to be ruined for future generations. shery: for someone who doesn't really follow soccer, that is something i can understand. here in the u.s., this move, in the u.s., that's already happening in the top sports leagues. what would be wrong with that? simon: there's no accident that the people who have pushed this most of all our the american owners of manchester united,

liverpool, and arsenal. they come from that culture. there are reasons with how they develop american sports and they grew out of a very different geography to the smaller countries of europe, so promotion relegation was not geographically or fiscally feasible. yet it is anathema to promotional relegation's. this is the global game of football -- with respect, america's just one country. we have a similar system in australia -- close league systems due to geography and the financial problems of having a pure and open sporting meritocracy. close leagues have their benefits, but it is mainly protectionism for those clubs who are involved in the system and that's what these owners prefer because that is what they

are used to. the difference with global football as we have had 100, 120, 130 years of history of an open meritocracy and that's how most fans prefer it would stay. shery: you mentioned the backlash this move could get from fans. what about the government? u.k. is saying they will do whatever it takes to stop this creation. what form could that take? simon: that's just the british government. it would need to be a coalition of governments across europe because it's not just an english or british thing, but it is a start. many people feel they should have done something about football club ownership in the past. if you look at how this initial super league has been set up, there are no clubs there from germany and one of the reasons is that germans have a system called the 50 plus one rule where they can only have 49%

maximum one individual or multinational company. 51%, 50 plus one has to be owned by the club themselves, as in the members, the fans, and i think that's the sort of model, specifically england, needs to go down. obviously, i'm english by birth -- we sold off the family silver along time ago and allowed people to come in and buy it lock, stock, and barrel. this is part of the end result. if you give something away, the owner says i can do this and they can. haidi: we call it the beautiful game, but from what i know of football, there were the allegations from 2015 and this is another money grab for what is would've -- what is the most

rich sports league in the world. will there be reputational fallout? simon: undoubtedly. a lot of people have been turned away by this arms race, as it stands at the moment without a super league. the champions league is dominated by a handful of clubs and they messed around, bended and twisted the rules to make sure those same clubs take part every year and there is a reason for that. every time they take part, they get millions and millions of dollars, not just in money. there is very much a vested interest in the status quote. that is the next rung along, them saying we are getting lots of money but we want more of it. that's where i think a line has been crossed.

people are just about prepared to accept the champions league, maybe even the next recommendations for a 10 game group stage in the champions league, but the super league is a step too far. not just from fans but a lot of ex players. they don't want this either. this is an exercise in greed and a hostile takeover of the game and it must be stopped. shery: super helpful for someone who doesn't follow soccer. simon hill joining us from sydney. be sure to turn in to bloomberg radio broadcasting live from our studio in hong kong. listen via the app, bloomberg plus or bloombergradio.com. 20 more ahead. stay with us. ♪

haidi: 30 to has unveiled its new sports suv pulled on a new ev platform. bob carter told bloomberg's matt miller that it's just the start of a bigger range of models. they also talked about the chip crunch faced by the auto industry. bob: the bz forex is a concept but we will be showing it in a production forum and it will be

one of two vehicles we have in the market in 2022. matt: what is the differentiator? what a setting toyota electric vehicles apart from the slew of ev's coming on the market this year and next? bob: we have had 20 years of electrified sales. everyone knows about the prius. we started selling that in 1997 and build up to a number of hybrid vehicles, plug-in hybrid vehicles, so overall, we have sold more electrified vehicles as a brand than all other makes combined. now, with the step of the these e forex and be a -- and bz sub brand, our first entry into the market will be a beautiful suv,

a little larger than the rav4 that is our number one seller. matt: what do you have that can challenge tesla? you make a slew of cool cars, but nothing in the electric space that has that wow factor tesla at least had at the start of its big sales push. how can you challenge the california company? bob: we are developing for different technologies. today, our hybrid technology, which has been on the market 20 years, represent about 25% of her sales. we have plug-in hybrids which for many consumers is a better utilization for them then a full electric. we have fuel cells in california and the full electric will be out in 2022. our approach is this -- one technology is not necessarily the best technology for all

consumers. a consumer in california versus one in the midwest versus one on the east coast has different needs depending on the charging infrastructure. our strategy is to offer a portfolio of technology and let the consumer decide which one of those technologies is best for them. matt: the chip shortage has affected all automakers. is it eating into your capacity this year and how do you deal with that? bob: short-term, toyota and lexus is ok. we just finished a record force quarter -- record first quarter and april is very much the same. demand is very robust and at near record, but supply chains across the industry are very fragile and the number one

supply chain issue is microchips. we have looked good today to and april and may are fine. it gets a little cloudier when we moved to july and the summer months, but our research and development, purchasing folks are in development and we think we are going to be ok. i am confident that toyota and lexus brands will get through the supply chain phenomenon a little better than other brands. haidi: that was bob carter, vice president of sales at toyota at the shanghai auto show. sophie: this company halting u.s. factory operations on the chip shortage. keeping toshiba on the radar, oasis calling on the company to

maintain high corporate standards. they have asked banks not to lend to cbc capital. a big revenue exposure to ibm. you are watching -- it's exploring options. rio tinto, it's production update, its forecast saying iron ore shipments fell 12% in the first three months and it's copper cargo were affected by output in mongolia. shery: coming up, we also discussed the outlook for the car industry. and -- the market opens in sydney and tokyo are next. this is bloomberg. ♪

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? welcome to daybreak asia. i'm shery ahn. sinise major markets have just open for trade. our top story this hour. weakness in the tech sector drags u.s. benchmarks down from lechner -- record highs. we are 90 minutes away from china's place in a post-pandemic world. he will be seeking in hi nan

where the countries business and political leaders are gathering. and it is all about electric vehicles at the shanghai auto show. automakers around the world lining up to show their next generation cars to china. south korea and japan coming online right now. let's turn to sophie with a check on the market. >> we are seeing the nikkei losing more than 1% there while the yen is trading near a six-week high. the boj governor appeared in parliament today. we're watching for any indication of inflation with the nikkei news reporting they are considering testing -- cutting rates. the open on south korea this morning, a fresh record on monday. the kospi little change, but the downside this morning.

more headwinds coming together for the index. goldman says it will lead to a loss of revenue that we've seen in the past. we are paying attention to possible outlooks from emerging markets between ems and dm's. switching out the board now the head of a meeting, falling with the yield curb their. trading around a one month high. little change with the start of the staggered open. in sydney here. the offshore yuan is trading around a 651 level ahead of china's prime rate decisions on tuesday. no changes expected there. commodities edging higher.

we are seeing some caution in markets. pulling up a chart on the terminal, global cases have hit a weekly record. surging infections in india are a key concern in asia. the governor -- the government there is lowering the vaccination age and they are seeking to double vaccine manufacturing capacity there. haidi: let's get more markets. stan, great to have you with us. given that we are having a little bit of a pushback ended decline led by tech overnight. is there a sense that earnings could potentially disappoint given the levels of euphoria and positivity we are still seeing in markets? >> look, of course they could.

but i think this is actually the ideal situation for many areas in the equity market. it is very rare you see in some -- you only see this in some markets, but you're seeing analysts bring earnings up into the earnings season. that is telling you how off the mark they are in some cases and how quick the recovery has been in corporate earnings. i think that is quite a positive sign. you can call it euphoria. it is not a broadly based phenomenon across all equities. but it shows you in certain -- in certain markets and sectors and countries, we have the ideal situation. policy rates that remain supportive. it is about interest rates a lot of the time and what our expectations are for inflation and interest rates and how it

will impact corporate earnings. haidi: there are two things that could disrupt the goldilocks situation. one is our question of the day -- how do investors react if we see a steadily worsening scenario when it comes to the virus? new variance, it declining rollout. how do you balance those risks in your portfolio? >> i know it sounds funny to say this, but i think what you want to do on a portfolio like this is keep an exposure to both cyclical stocks, to the industrials and the materials the benefit from the reflation trade and hedge that with a technology. i know that says funny to hedge a portfolio with technology stocks, but it is becoming less cyclical. it is becoming more a part of almost every sector in the business model of every sector

going forward, from health care to discretionary to the industrial automation. that idea that we have tech in terms of chips and semis and software and services that are less cyclical already, the interest rate side of your question is important. because technology has a longer duration equity play, as far as making a more sensitive to rise in interest rates, what we saw is, when interest rates rose, tech got hit the most because most of its growth is coming from future earnings. with an interest rate regime more on pause now, tech should continue to do quite well. we should probably not overlook the high valuations, but we should think valuations are not as important if we are going to think about this. policy keeps industrials going. tech is your hedge.

shery: how do you hedge technology for regulatory concerns? whether it's china raining in big tech or just around the world with privacy concerns and so forth. >> these will be real risks. china especially really wants to -- they are giving investors what they wanted in the end. more transparency. or a call for more transparency. and more regulation around some of these industries which were growing very fast. that will create volatility in the near term. if we want to -- it will be important to understand specific stories and do your company research. i think this is something that we have maybe gotten away from a little bit, given it has been a beta market for so long, especially in technology. it will be less beta. technology will have the factor of the background of stronger

growth and stronger support, but the inverted -- individual stories will matter more. let's move from sectors to specific countries, especially in asia. the recovery we have seen has been a little different whether it is export led or more to mastic consumption led. where you find the opportunity? >> this is something we can talk about for a while. i think there is still this overall impression that emerges -- emerging markets is value. it some terms it is. if we look back a decade ago, most of the emerging markets were value sectors and the msci was also value. that has changed now. the weight is more on growth now. when we think about emerging markets, we want to understand which markets are more geared

towards domestic consumption, the innovation portfolio, the rising middle class. these are the ones that will ironically suffer a bit in the near term. given how pushback the reopening is in the rise of new cases. the em markets able to benefit on exporting things customers want, commodities, this is what the imf told these markets to get away from. but these are the ones who will benefit in the near term. when i say that, i mean, get away from a narrow export focused market more towards a consumer driven middle-class market. in the long-term, this will even out. we need to really understand where we are going to see near-term hits and i consumption -- in that consumption financials driven lending market where central banks in em's hamstrung by potential rises in

inflation. shery: great to have you on again. senior at state street global market. investors are watching global tensions, as well. >> the u.s. secretary of state antony blinken has warned the u.s. is falling behind china in the race to shape the world screen future. speaking ahead of president joe biden's climate summit, he says the world needs to see opportunities we create through climate change, in order to great jobs and export american values. he pointed to china's dominance in green energy production. >> china's largest producer and exporter of solar panels, wind turbines, that are ease, electric vehicles. it holds nearly a third of the world's renewable energy patents. if we do not catch up, america will miss the chance to shape the world's climate future that

reflects our values. we will lose out on countless jobs. shery: rodrigo duterte says that challenging china in the south china sea would lead to violence and they will only do so if beijing drills for oil there. hundreds of chinese vessels responded at a contested reef in waters last month. russian opposition leader alexey navalny is pressing on with his nearly three week long hunger strike. he was moved to a prison hospital. his lawyer says he has agreed to vitamin therapy. authorities stated he is in satisfactory condition. over the weekend there were mornings he was days away from death, dropping the u.s. to warn of unspecified consequences should he die. the jury retired to consider its

verdict in the case against x police officer derek chauvin who is accused against killing george floyd. the defense cited illegal use of drugs. prosecutors said -- these are live for pictures of protests before the verdict. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi? haidi: xi jinping is expected to give a keynote address in the next hour. we will tell you exactly what he is likely to say about the challenges the world is facing. plus, the shanghai auto show well underway. we will get perspective on the mainland car industry. stay with us. this is bloomberg. ♪

shery: chinese president xi jinping will be delivering a virtual keynote speech later today. he's expected to touch on the risks the world is facing and what solutions his country is offering to overcome them. that comes as top officials and business leaders have addressed everything from monetary inflow to 5g to a digital you on so far. let's bring our chief asian correspondent in david ingalls. what are you inspecting? >> two decades. that's how old i am. i have been going to boao for 17 consecutive years. obviously last was canceled. this year it is more limited. we have about 2000 participants on-site at the bfa hotel there.

this has been a forum for about 20 years. some say it is not quite as prestigious as the world economic forum. what i have found, though, was that the boao form offer great access to group -- two state enterprise and leaders. xi jinping speaks there every once to our three years. and when he does, granted it is virtually this year at 9:30 local time, so in the next hour. a lot of big names come when he speaks because what he has to say gives great weight and china is coming out of the pandemic a lot quicker than other parts of the -- then other developed nations in the world. we will hang on to his every world in the plenary opening session, even though the conference really open on sunday. tomorrow we get the big speeches.

we will also get the pboc governor on a panel later this afternoon. a former pboc governor, as well, as well as larry fink, the blackrock founder, will be on a pension reform panel later today. but at 9:30 this morning we will hear xi jinping talk about level risk and how china can help solve or participate in those as kind of painting the picture of china in the post-pandemic recovery leading the way. granted there was that big double digit gain in first-quarter gdp for china, but that is coming from a low base. where will he go from here? i am betting my bottom dollar he will talk about climate change, perhaps cooperation china can do with the u.s. as china seeks areas of cooperation with the u.s. and what has been a very contentious relationship, obviously, over the last couple of years. john kerry of the u.s., the

climate change had -- head of the vitamin's ration, was in shanghai last week. biden was having a climate summit. i am guessing xi jinping will try to put in his two bets about china's contribution to climate change. we are hearing there could be comments on new climate change pledges from china. we are not sure. will have to find out at 9:30. again, containing risks. we heard from the vice chairman of the csrc, the securities watchdog, he was talking about how they are watching closely some of the market moving inflows by brokerages backed by hedge funds here in hong kong to china. he did say that we are welcoming investors, foreign investors such as pension funds and insurance funds. very welcome. they welcome foreign investment. they just do not want shocks to the chinese stocks through the

stock connect. there be a big international presence in there. tim cook from apple will be at boao this year. steve schwarzman a blackstone obviously has been there many years in a row. elon musk, i saw him there a couple of years ago. he will be there. and ray dalio of bridgewater, among another of the notable international dignitaries waiting to hear what xi jinping has to say to the international and chinese audience. haidi: we always pay attention to what the former pboc governor has to say. >> people do not normally get heated at boao. it is a bit orchestrated. he was on my panel two years ago that i moderated, and we talked about risks. he had just stepped down from the pboc governorship.

his successor is giving his panel speech later today at 4 p.m. but he took some exception to international criticisms about belts and road initiatives. it was a bit of a full throated debunk of the criticism. he dismissed conspiracy theories. those were his words about geopolitical motives for infrastructure part -- inverse pressure projects china is involved in. he dismissed racism that it is that diplomacy -- dismissed criticism is that diplomacy. this is a bottom up, not top down program. banks in china make their own decisions. it is not necessarily being directed politically. it is interesting. the belt and road has taken a lot of hits, not only from international criticism, but from the pandemic, as well. developing nations in particular are finding their debt

situations are exacerbated by the pandemic. haidi: stephen engle in hong kong. coming next, the beginning of credit events, but downplaying the risks of a full-blown crisis. this is bloomberg. ♪

haidi: it's the latest investment bank to downplay the risk of china huoarong going to full-blown crisis. still, it's likely to begin a series of credit events. what is the balance view from macquarie? >> i think their emphasis is investors do not have to worry

too much about systemic risk. that kind of market collapse after credit loans are exhausted. but they do point out the stress is going to be the beginning of a series of credit events and there will be ripples to the rest of the market. they are joining a range of different houses across the market for saying perhaps concern about huarong is over s gone too far. they are recommending and overweight position on the huo arong bonds, saint debt service is expected to continue. jeffries also kind of saying investors are perhaps too worried. a shift in town there. it does reflect what we have seen in the bonds, which are now back in the 80 sent, $.85 range.

i'm not following the -- the comments regulators had on fridays saying operations were normal at huoarong. >> is this an implicit understanding that it is too big to fail? >> yeah. i think that is probably the expectation now. whatever we see happen, it is important to remember we still do not have any actual clarity around the overall plan there. but the expectation with -- which mcquarrie also outlined his there will be kind of a quarterly debt restructure. however, an essential soa -- soe is distinct. it has no essential role in the

economy. -- it has an essential role in the comedy -- in the economy. the focus is looking at some of the other amc's and state owned enterprises under pressure. shery: our bloomberg china credit report there with the latest on huoarong. jp morgan is underwriting a $4 billion bet on super league. the investment banks financing is said to have an interest rate of between 2% and 3% over 23 years and the clubs are bound to super league for a set number of years. discussions over a $7 billion financing package to overall the stock return and sell plans for

the breakaway super league. talks reportedly started several months ago with negotiations ongoing. no guarantee if there will be a deal struck between the two. toyota says it expects to have sufficient chip supplies for production, despite an industrywide shortage. but a top executive tells us the outlook gets cloudier. still, consumer demand remains strong and production of toyotas and lexuses will be less affected than rival brands. will get you the latest on the $10 billion fund raising efforts and what is the largest effort -- sale of new shares by hong kong listed company. this is bloomberg. ♪

vonnie: this is daybreak: asia. in the imposed week long luck down in new delhi to prevent the collapse of its health system, which authorities say has been pushed to the brink due to the surge of covid-19 cases. the country says it is expanding its vaccination program to all adults starting may 1. india has so far administered 120 million doses to its population of nearly 1.4 billion people. the philippines has authorized the emergency use of johnson & johnson's single shot vaccine days after u.s. suspended it

over a rare side effect. the vaccine czar says the country may buy up to 10 million doses of j&j as they try to increase the pace of inoculations. the philippines has administered just 0.2 doses per 100 people compared to 2.4 doses in indonesia and 1.1 in malaysia. russia says its sputnik five covid vaccine is 97.6% effective according to analysis of nearly four million russians. that is higher than the 91.6 efficacy rate outlined in a preliminary trial published earlier this summer -- this year. they say the latest results will be published in may. nasa has conducted its first flight on another planet. a four pound helicopter name ingenuity ascended to about 10 feet above the surface of mars before descending to the ground. the chopper arrived on mars

along with the perseverance rover on february 18. researchers at nasa's jet propulsion lab in california are planning four more flights which will help study mars from the sky. 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 vonnie quinn. this is bloomberg. haidi: let's check in on markets again was sophie kamaruddin in hong kong. sophie: seeing asian stocks snapped a five-day gain in sydney. chairs being led lower by challenger on a soft profit guidance. shares marginally higher. korean stocks are fluctuating as the government cautions against market volatility. we have headwinds forming for the kospi, which is treading water ahead of the shortselling resumption on may 2. following that, goldman says they are maintaining their overweight call on korean shares. in japan you have stocks leading

losses in the region with benchmarks down 1.7%. checking in on the yen, the currency breaking through its 50 day line for the first time in about three months. the yen earlier breaching the 108 handle. switching out the board for stock movers of note, we are seeing carmakers lose ground in tokyo. losing about 2.5% this morning as it announced it is halting temporarily operations at a u.s. car factory amid the global chip shortage. toyota saying the outlook for chips is looking cloudy. shares edging lower by .9%. in sydney, fluctuations on the back of the company announcing it's exploring options for u.s. listing. seven group shares losing ground by about 4% after completing a capital rate to pay down that debt.

we'll be watching meituan shares later, which may help lift shares in hong kong. shery: let's talk a little bit about the meituan. it's raised about $10 billion from new stock as it doubles down on efforts to fight the likes of alibaba and areas like on running groceries -- like online groceries. julia, as we speak right now meituan just confirming the reporting you had earlier on the terms of the deal. so what will meituan use this money for? julia: it has said it will use the money to invest in new technologies. it named drone delivery and autonomous livery vehicles. it is clearly -- autonomous delivery vehicles. it is dubbing down -- doubling down. that is one of its main priorities through meituan select.

but there are a lot of competitions. it is a very capital-intensive effort right now. so it needs a lot of cash for that. that is where they are going to plow the money into. it definitely needs cash, because despite record revenues they are going to remain in the red for several quarters. they lowered the outlook for meituan citing the heavy spending on this community by. so it's -- community buying. so that is where they are going to funnel the money. haidi: it is a good time for meituan to go to market right now? julia: it is priced near the top of the range. it shows investors did i into this. that-- did buy into this. that said, the stock lost about 36% from its peak in february,

largely around fears of china tech, and fears it would spread beyond jack ma and engulf others like tencent and meituan itself. however, given that it's plowing so much money into these new businesses and new areas, the revenues are still good. analysts do seem to think it is positive, although it may have negative effects on the stock in the short-term. haidi: julia with the latest on meituan. next, the fate of the car market in china. shifting to electric vehicles. this is bloomberg. ♪ is is bloomberg. ♪

>> in the first quarter we delivered 20,000 cars and reached a milestone of 100,000 minutes earlier this month. we are confident about the delivery outlook. you do not comment on the specific numbers. >> we know that transfer capacities are quite restrictive and we know that our production

is doing the utmost in order to supply us with the cars we need. but i would definitely think that we would be able to have another record year beyond the 90,000, maybe into 100,000. haidi: auto executives speaking to bloomberg at the shanghai auto show. the chinese ev maker says it is confident about building on record sales momentum from the first quarter. the founder and chairman believes the company's new p5 family sedan model will drive exclusive growth later this year. he spoke exclusively with tom mackenzie at the auto show. >> i think the eeev market this year, especially the smart ev's, will see huge growth. i believe the smart ev sector post double-digit growth and i expect see the high-end smart ev's to grow significantly.

that is what we are working towards. tom: you had record first quarter sales. do you see that momentum continuing through the rest of the year? >> we broke our sales record in the first quarter. which led to quite a season. i believe we will keep the momentum for the rest of the year, especially as we start taking orders for our p5 model in the second quarter. we plan to release the model in the third quarter and start delivering in the fourth quarter. we believe the p5 will help significantly raise our sales volume. tom: you have not released the pricing for the p5. what does that tell us about the complexity of pricing the models now, in what some would say is a saturated market here? >> i expect explosive sales growth for the p5. today in china, many new

automakers are setting a high-end price for the first product. but i hope there are more good products in a mid-level price range to meet a bigger demand. tom: is 2021 the year when the old car companies really start to make their mark when it comes to electric vehicles? >> recently, bmw had introduced new ev. this is a very good start. but i think it will take at least four to five years before we can see the winners in this new smart ev market. tom: what do you make of companies like evergrande and huawei getting into this space now? is that a sign for you of a bubble? >> xpeng is xpeng. it's not huawei, not any other company. what we want to do is pursue huge innovation.

we hope to be the future of transportation. i hope we can provide strong enhancements such as smart autonomous driving, and we will explore the possibilities of flying cars and other disparate -- different transportation tools. i want us to be different from all others. tom: is the chip shorting -- is production having to be slimmed down because of the chip shortage? >> our supply chain colleagues are working hard to keep our production from being impacted in a big way. so things can change very significantly. we will keep working on stabilizing the situation. shery: for more on china's auto sector, let's bring in dan zhuang, where she's celebrating a target price. dan, good to have you on. just explain to us why do you have a sell recommendation? dan: my concern is the product.

the similarity is the model 3 and y. sales have been weak. and you see the sales of p7 always around 3000-something, or 4000. we don't see a steady ramp up up fot -- up of the sales. my concern is the weakness of this brand. i think autonomous driving, the company has a first mover advantage. autonomous driving could be a plus. but it may not be the sales booster to bring up sales at this stage. people may like autonomous driving but if that is just for

parking or navigating, it is not enough. shery: do you have concerns whether it is about xpeng or other companies? we heard from an executive at toyota who saw admitted -- we saw a bit of a cloudier outlook. take a listen. >> supply chains across the industry are very fragile. and the number one supply chain issue is microchips. in our case, we've looked good to date. in may and april, it's fine. it gets cloudier when we move into june and the summer months. >> how much will a chip shortage affect automakers? dan? dan: oh, yeah. i think probably 5% in 2021 in the chinese market.

the third quarter and the fourth quarter. i see there is a shortage of chips. their volume is relatively so i think the impact is relatively smaller on these new ev makers. haidi: what about other cost pressures? would that be the other headwind would be concerned about for recovery for china? dan: of course. because you see the economy recover, so the raw materials and the commodities price increases. also the chief price increase would bring pressure on their costs. haidi: we have the really interesting example of some concerns tesla might have in the

chinese market with protesters complaining about the tesla braking device at the shanghai auto show. we have also heard from state media saying that tesla needs to take care of customer's rights. we've seen this story lay before with foreign brands. is that a worry for tesla in terms of the amount of domestic competition building as well? dan: not yet. you see the tech issues come to these ev automakers that are very common. so i think for these ev automakers, they have to improve their quality. and also how they do their service to their customers. after these accidents happened. so i do not think that is an issue for tesla at this stage,

because i do not think -- i think the government will still support the progress of other ev automakers, and also the development of these automakers. so if they can bring in new technologies, these kind of accidents should be controlled, but probably not avoidable. shery: talking about new technologies, we saw chinese automakers and car parts makers rally in the previous session after we saw these comments, a partnership with huawei will build high-end it self driving and electric car brands, and that will boost growth. what are your thoughts? dan: that huawei car, that's a very impressive car with autonomous driving. but the price is very high, if i

remember. in my view, autonomous driving will attract new customers because people will get excited on the features of autonomous driving. but at this stage i do not think autonomous driving will be a major sales boost for these automakers. i do like the huawei car, and i think the video we saw of autonomous driving is very impressive. but probably it's more like news. but i don't think there will be as major of a change at this stage, especially this year, 2021, because you see a lot of competitors offering their autonomous driving cars to the

shanghai auto show. so i think people will still compare with other brands than other technology providers. haidi: dan, great to have you with us. don't miss a big interview had. -- ahead. mother some group's vice chairman joins us exclusively later on bloomberg markets. next, a plen to stop a new breakaway super league from happening. the latest on the possible shakeup. this is bloomberg. ♪ is bloomberg. ♪

haidi: a quick check of the latest headlines. morgan stanley -- which may total about $6 billion. issuing bonds after earnings and adding to a record borrowing spree. the sales are said to be structured with process -- the bank has not targeted. iron ore shipments rose 7% in the first quarter year on year. that met analyst expectations. on a quarterly basis shipments

fell 12% after cyclone activity. they still see full-year shipments up to 340 million tons. the world's largest oak milk company has filed for an ipo. in july they were valued at around $2 billion. the company reported a net loss of $60 million on $421 million revenue in 2020. shery: european stocker -- soccer's governing body are in discussions over a financing package to stop plans for a new breakaway super league. let's cross to derek wallbank for more on this. they are not giving up without a fight. derek: no, they are really not.

and you should not expect them to come either. -- them to, either. we should expect this to be a very, very long and involved process with heavy legal ramifications and a lot of fights as much in courtrooms in the court of public opinion as anything else. what we are talking about in the latest development is there in discussions over a 6 billion euro financing package to overhaul its flagship champions league. now, how this would work in practice we are not quite sure. we do not have details on that specifically. bear in mind, you way for -- they were talking about getting more concessions to prevent a breakaway league like this in the first place. it did not work and this is why we are in this situation. but yeah, again, big news,

trying to figure out a way to patch all of this in together and keep some of their most money spinning clubs from forming a breakaway league. haidi: obviously fans are hating it. a lot of players and coaches are up in arms saying they were in the dark about this. but as always there are market opportunities. derek: there absolutely are. look, one of the things we previewed yesterday multiple times, if you watch bloomberg tv you saw this, and you may have done something with it. but there are clubs on either side of this that are both publicly traded. juventus is publicly traded. manchester united, publicly traded. on the other side, the netherlands who is leading opposition to this is also publicly traded. we saw on the premarket, juventis and manchester united

went way up. it sort of tells you if you say well, these clubs may only be doing this for money, never mind what the fans say. the money is there. the markets weighed in and there was a very big vote of confidence from investors in some of these plans. so even as there is a lot of fan unrest, and you see supporters groups coming out and saying they oppose it, you do have to look at the markets and sit there, and you can see where these folks are looking at in terms of the dollars. shery: derek wallbank there. we have an alert on the bloomberg right now. the former vice president walter mondale has died, according to the ap. he was 93 years old. he served under president jimmy carter. his family saying he died monday

in minneapolis. this coming from that she was a liberal icon -- he was a liberal icon. let's now turn to sophie in hong kong. sophie: watching meituan. maintaining its buy call. 40% upside from the last close. watching chinese liquor stocks. trip.com shares on watch after goldman initiated a buy, citing recovery in domestic travel. continue piling in on chinese stocks. lifting the csi 300 in its best session in five weeks. haidi: that is it for daybreak asia. markets coverage continues.

looking ahead to the start of trading in hong kong, and shanghai. stay with us. this is bloomberg. ♪ ♪

rishaad: this is bloomberg markets china open. counting down to the open of trade on the chinese mainland as well as right here in hong kong. president xi jinping said to speak at the forum in under 30 minutes. expected to showcase china's recovery from the pandemic and his plans to open up the economy further to foreign investors.