♪ tom: good morning and -- paul: good morning and welcome to "daybreak australia." shery: good evening from bloomberg world headquarters in new york. paul: u.s. stocks slide after bloomberg reports president biden may be planning to lift capital gains tax for the rich. the proposal could reverse some long-standing provisions of the

tax code. president biden brings the u.s. back into the global fight against climate change as china and india make no move -- no new major pledges at the summit. shery: this is the picture across wall street -- we are seeing futures unchanged at the moment after news the u.s. is planning to increase capital gains taxes. we had that offsetting earlier gains that we saw on alternative energy stocks, given that we do have that climate change summit ongoing right now. we saw the s&p 500 being led lower by material, energy, and tech shares. we saw gains in the regular session open, plus it is set to

be holding a full ministerial meeting next week. the dollar also aiming around. economic data a little bit mixed in the session. paul: we do have just the one market trading now. that is new zealand. equities looking rather flat at the moment. sidney futures also pointing to a lower open by about .2%. we will be keeping an eye on amp as we open. the wealth manager announcing it will pursue a merger due to be completed in the first half of 2022. amp stuck to watch when we got going. futures for the nikkei last traded flat. coffee futures traded a little higher, .4 percent, but we are keeping an ion those as the morning evolves. shery: let's get over to vonnie

quinn with first word headlines. vonnie: india has marked the world's biggest ever single day jump in coronavirus cases with more than 314,000 new infections reported. that brings the global caseload to almost 16 million. the latest wave pushing sanatorium's to the break. several countries have announced travel restrictions on visitors from india including singapore, australia, and the u.k. the u.s. senate has passed legislation designed to combat hate crimes after a series of attacks against asian americans. the bill will boost resources for addressing hate crimes, and supporters say it also sends a clear message of assurance to asian americans that violence against them will not be tolerated. speaker nancy pelosi says the house will pass the bill, which is passed -- if it is passed by president biden, next month.

opposition leaders urging alexei navalny to end his more than three-we-long hunger strike. doctors cited improved medical care and concerns for his life. russian police detained more than 1900 people this week amid nationwide protests demanding proper medical care for navalny. the biden administration is trying to dial back optimism about the revival of the iran 2015 nuclear record. one state official says the two sides still disagree on many issues, and they are closer to the beginning of negotiations than the end. a third round of talks is scheduled for vienna next week. they are not meeting directly but are negotiating through european and russian parties. global news on the air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. paul: that's get to our top

story -- president biden seeking more aggressive in missions targets as he convened -- emissions targets as he convened world leaders in a virtual summit. >> no nation can solve this crisis on our own. >> the fight against climate change will be the engine for our global recovery. >> we can do better from this pandemic by building back greener. >> follow the principle of equity and justice, and focus on effective actions. >> focus on a high speed, a large scale, and with a global score. >> i'm delighted to see the united states is back to work with us in climate policies, because there can be no doubt about the world needing your contribution if we really want to fulfill our ambitious goals. >> those of us who represent the

world's largest economy have to step up. paul: world leaders speaking at the virtual climate summit. the summit was moved to signal america is back and seeking to regain its leadership in a policy setting. let's look at how economics will play a part in achieving them. joining us is the asia society policy president. i think the key word in that sentence was commitment. we always get a really -- in the sorts of summits, we always get a lot of really fine words, but are they ever matched by action? >> yes, they are, but not universally so. the reason why commitment is critical in the global climate change debate is this -- we are ultimately driven hereby mathematics and size -- we are ultimately driven here by mathematics and size.

if we are to keep world increases down to 1.5 degrees centigrade, mathematics and science flows from that. we have to reach carbon neutrality for the planet by 2050, and to get to 2050, by 2030, we have to have radically improved our current nationally determined contributions for each country around the world in order to make those longer-term targets credible, which are essential. there will be some skepticism around some of these commitment, but the bottom line is once they are entered into international legal agreements, which will occur at the conference of the united nations parties in glasgow later this year, than the monitoring mechanisms take effect and we then measure the extent to which states are honoring their commitments or not. if they are not, enormous

international and to some extent financial pressure is then brought to bear on those countries, which are not lifting their part of the game properly. paul: is one of the key problems domestic politics? we saw in the united states under president trump, now the u.s. coming back on the global stage -- you described yourself client -- climate change as a great domestic challenge amid years of bickering in australia. >> there is a lot of, to use your, political bickering, but many parties of the centerleft and some on the center-right have got the science and mathematics and have mobilized their capabilities accordingly. in australia, despite ferocious opposition, the conservative

opposition backed up i the hard right and to climate change agenda murdoch media, we still were able to register real achievement, some of which in australia's case was legislating a renewable energy target way back in 2009 for 20% of australia electricity to be renewables by 2020. we have now exceeded that target in reality, so these things can produce real results, but i do not underestimate the degree of political opposition. what is important in this summit is america is back. had joe biden not elected last november on a platform of america achieving carbon neutrality by 2050, this summit, which had just been convened in washington, would not have occurred. we would not have had the firing of fresh -- firing afresh of the starter gun, and the national, corporate, and, shall i say, technology capacities of

countries would not be mobilized to the extent they need to. shery: the u.s. has called out australia when it comes to climate emissions. how much of this can really help momentum, when we have seen skepticism about the american government itself that every two years with midterm elections, legislation changes, not to mention that already, we saw trump withdrawing and biting coming back to the paris agreement -- biden coming back to the paris agreement. >> we have to take a look at this in terms of when the debate effectively reached its first crescendo, the copenhagen conference of 2009. those of us then demanding urgent climate change action very much sounded like voices in the wilderness. you referred before to my statement earlier in australian politics, that this is the greatest environmental, economic, and moral challenge of

our generation. these were unusual statements at the time, but guess what? over the last decade, we have seen the consensus move in the direction so the conservatives in the united states, conservatives in australia are now increasingly seen as political dinosaurs within their own countries. there will begin. there will be take. we will fight for the rest of it. the overwhelming impulse of the signs, the overall impulse of what the national insurance industry is telling us across the world about the real cost of climate change, on real economies, on real businesses, together with voices like greta thunberg and others, is pushing policy in a positive direction, but in the absence of president biden's leadership, himself confirming a new and quite remarkable commitment by the united states with 50% cuts in carbon emissions by 2030, this is the stuff which actually

drives the real, substantive agenda forward, and the planet ultimately does not live. we either do it or do not. shery: how much do you expect the summit to sort of re-set the tone between all of these nations? we know there are growing tensions between the u.s. and china, and between china and australia as well. >> i'm resident of the asia society based in new york, and one of the things we have done is think tank over the last 12 months, even prior to the biden administration election, was to convene high-level dialogue between senior level chinese and senior-level americans on what to do on climate change, for example if there was to be a change in administration in the united states. one of the things, despite the appalling state of geopolitical and foreign policy and economic policy relationship and in technology in washington and

beijing right now, so far, the climate collaboration lane is open. secretary kerry, president biden's special envoy on climate, visited shanghai last week. he had a series of meetings with his chinese counterpart. secondly, xi jinping could have elected not to attend president biden's summit. he did so. there is a recognition both in beijing and washington that the national interest of each country demands they collaborate on this. if the two largest emitters in the world do not act together on this, whatever they think of each other politically, it damages their deep, underlying national interest. paul: i want to talk about some other promising-looking lanes, particularly for australia. no surprise the federal government canceled the state of

government roads emissions with china, but how does the china-australia relationship get fixed from this point? >> the prime minister, mr. morrison, seems to look every other day for an opportunity to pick a fight with beijing. if i was prime minister today, i would find the australia-china relationship also difficult to handle for a range of structural reasons. china is more powerful. australia believes in universal human rights, and we are a proud and long-standing ally of the united states. that generates sufficient challenges, shall we say, unto the day. they seem to find a enormous domestic political advantage by picking fights, in my judgment unnecessarily, on other, as it were, relatively non-essential parties. if the trading government were serious about its cancellation of an australian state

government memoranda of understanding with china, because of a deep economic vulnerability interest at stake, why did the same government approved and 99-year lease of the port of darwin to a chinese corporation only several years ago, a deal approved by the current prime minister when he was treasurer of australia? it simply is utterly hypocritical on these questions, and it is far better we prosecute real disagreements with china on real things that matter in the south china sea, over taiwan, the east china sea, global trade, as well as the technology agenda and human rights rather than, as it were, add to the lead in the saddlebag by picking fights with what i would describe as nonessential areas. shery: always great having you on. thank you very much for your time. we do have some lines crossing

the bloomberg right now. we have seen a recommendation of another state of emergency for tokyo and other areas. the japan economic minister saying eateries serving alcohol will be asked to shut down, but they strongly urge residents to stay at home and they want events to be held without spectators. we will get more information on what could be the third state of emergency for tokyo and surrounding areas. still ahead, president biden is pledged to raise taxes on america's wealthiest -- president biden has pledged to raise taxes on america's wealthiest. we discuss that. this is bloomberg. ♪

paul: president biden make be looking to almost double the current capital gains tax on wealthy americans. sources tell bloomberg the rate may be hiked to nearly 40%. our tax reporter was the first to report on this, and she joins us now. we saw a fairly profound response on the markets after this was announced, but surely, it was no huge surprise that this was coming. >> yeah, this is something biden has been talking about since the campaign, and it is getting to the point where it is becoming more real. he will present it to congress next week, and then it is up to congress to figure out, do they keep it at that rate or negotiate something lower? that is what is unknown, and there will be a lot of haggling over that in the weeks and months to come. shery: we have seen tax receipts really take a hit during the

pandemic. does it make sense to try to make these changes now, although this could hit the economic growth that we are seeing so far ? laura: republicans argue that this is absolutely the wrong time, that it would get in the way of growth coming out of the pandemic. democrats say these tax increases only hit the top, you know, less than 1% of taxpayers. these people can afford to pay more. they have been hardly hit by the pandemic, in not nearly the same way your average household has been hit. shery: bloomberg reporter laura davison with the latest on president biden's tax news. with all major groups in the s&p 500, ending the day in the red. judith lu joins us to discuss it.

stocks took a nosedive as soon as we heard reports this could be happening. is this justified? are investors right about how much of a hit markets could take if you start putting these capital gains taxes, raising them by as much as president biden wants to right now? judith: thank you. it is great to join you again. yes, up until a few hours ago, while the biggest risk looming on the horizon was inflation, now the biggest question in investors' minds is what will president biden's proposal to nearly double the tax rate on capital gains due to the market? the news caused investors to slam on the brakes. i think it might be too soon to panic. many would argue that rolling out a tax hike this aggressive would be economically counterproductive at a very crucial time when we are still trying to emerge from a global

pandemic. while the economic recovery needs to be strengthening, the data points to an unevenness in economic activity and there are still 17 million people collecting on employment in the united states. what does this mean for investors? i think you can expect to see investors trying to decide if they want to get in front of these potential tax hikes by taking gains early and potentially sitting on the sidelines. i think you can count on selling this year and possibly discouraging investing in years to come as in general, people are less likely to invest if they know it will be taxed this heavily, but ultimately, we have to wait to determine how serious a threat people will determine this to be. shery: is there a way to determine which markets -- which parts of the market will take the biggest hit, given that it

will be mostly wealthy individuals? judith: i know that the focus is that this will be taxed on the wealthier part of the population, but in looking at the market, a big portion of the investment capital flows that are in the market are coming from wealthy individuals, so this would indeed take the wind out of the sales of continued expansion from the equities markets perspective, so i think saying that this is going to be an isolated event on part of the population is rather unrealistic. you have a lot of people from lower income families whose retirement accounts are also in the stock market that would be adversely impacted from a rate hike this magnitude. paul: when we look at the broad sweep of history -- and we have a chart here on the bloomberg that illustrates the impact of previous capital gains tax rises, and threw it all,

eventually, stock prices continue to just keep on rising -- through it all. judith: it could be something rather short-lived, but the truth is that right now, the biggest question on investors' minds is how much of this recovery is already priced into valuations today, and the question about what is the durability of growth and visibility into the future is really what is driving investors to decide on putting money into the markets. if you are just waiting, wealthier investors, from investing in the market because of a tremendous touchstone moving over your head, all i can say is i think that will be disadvantageous in general for all sectors across the board. paul: founder and ceo of blue zone wealth advisors, judith lu.

thank you for joining us. plenty more to come on "daybreak australia." this is bloomberg. ♪

shery: here's a quick check of the latest business flash headlines. mitsubishi considering ways to reduce office space in the americas as more employees work remotely. the tokyo bank expects roughly 25% of workers in the region to be fully remote after the pandemic with the rest either coming to the office every day for working from home some of the time. intel reported 20% falling data -- fall in data sales. they reported better first quarter revenue from a year earlier on strong demand from laptops. snap reported daily active users that beat expectations lifted by digital advertising campaigns and more consumers using its

snap chat app. sales jumped to $770 million for the quarter ending in march. snapchat reported 280 million daily active users for the period, a 20 2% jump

bonnie: you are watching "daybreak australia." -- vonnie: you are watching "daybreak australia." president biden vows to cut emissions by up to 52% by the end of the decade. he will also aim to zero out emissions in the next 30 years in the most ambitious climate goals yet by an american leader. he returned to the paris climate agreement after 4 years' of withdrawal under president

trump's of ministration. >> all of us, particularly those who represent the world's largest economies -- we have to step up. vonnie: sources tell bloomberg president biden is looking at almost doubling the current capital gains tax as a means to pay for a raft of social spending plans. for those earning one million -- $1 billion or more, coupled with an existing surtax on investment income, that could mean federal tax liabilities for the rich could be as high as 43 point 4%. it could reverse the position that tax returns on investment are lower than on labor. singapore and hong kong are set to have announced plans to pull off a quarantine-free air traffic bubble. no reason was immediately given, and sources say a new date has not been set yet, adding the cancellation was initiated by singapore. the countries have been trying to revised bubble plans due to a

flareup in the virus in hong kong. in a year that saw global airline travel grind to a halt, gronk shall -- guangzhou claimed the title of the busiest airport. global news 24 hours a day and on bloombergquinttake powered by more than 2700 journalists and analysts in more than 120 countries -- global news 24 hours a day on air and on bloomberg quicktake. paul: sales rose to 874 million dollars from just below $600 million a year ago at mattel, and dolls led growth, mostly

thanks to growth in barbie and american girl. let's get some context now with the chairman and ceo. thanks so much for joining us today. this must be an and norma's least satisfying set of results for you. really just one thing missing, and that is perhaps the dividend. when might investors expect to see a dividend? >> hi, paul. thank you for inviting me. any way you look at it, this is a record quarter for the country. we are in the strongest position now than we have been in a long time. we have seen outstanding growth in profitability and free cash flow. net sales were up 27%. the highest qurly growth rate on record going back more than 25 years, driven by very strong consumer demand for our product. for the third consecutive quarter, we had double-digit sales increase and gained market

share globally. what you are seeing is the success of our multiyear transformation strategy, which puts us in an excellent position to continue to improve profitability and accelerate growth. we could not be more excited, more confident about our trajectory and the future outlook of the company. paul: ok, but timing on the dividend? are you prepared to offer one? >> the answer is this is too early to discuss that. we are still in the phase of reducing our debt, including our leverage ratio, making our way toward investment grade rating, and with our performance now where we continue to see so much improvement in profitability, we just had the 11 consecutive quarter of improvement of gross margins with free cash flow on a thrilling 12-month basis coming four times better than we were this time a year ago. we maintain progress on our balance sheet, but too early to

talk about dividends. paul: society and consumers continue to change as we seek vaccine rollout. people slowly emerging from covid hibernation. schools perhaps returning soon. what are your plans going forward? >> we see strong demand continuing in the second quarter , and we are planning for another good holiday season. we are well-positioned to gain momentum for the full year and expect to growth your market share. the coal industry -- to grow our market share. the toy industry as a whole is growing. parents continue to prioritize spending on their children for obvious reasons, and we believe the toy industry as a whole is well-positioned to grow long-term. shery: despite all the optimism, you still sound a little cautious, given that you are not giving an outlook for dividends

as of yet. you have had remarkable success on those cost-cutting measures as well. at what sort of operating levels will you feel comfortable long-term? >> we are very excited, as you can hear and see, from our results and our performance. we have given our performance and momentum at the business, we have raised guidance for the year, but for -- both for sales and for dividends. the guidance we provided was to grow sales by 6% to 8%, and we increased our even top -- our ebitda target by 11% to 15% for the year. too early to talk about dividends. shery: let's talk about challenges you see ahead. do you expect inflationary prices to affect you at all? we have seen freight costs going up. >> yes, we are seeing some inflationary pressure in ocean

freight and cost of material, but this is factored into our long-term planning, and even with inflation, we are still projecting growth for the year. this would be continued without momentum, and our goal is to continue to accelerate growth and improve profitability. the first quarter 2001 was the good consecutive quarter of seeing double-digit growth in our top line, so there is a consistent, continuing momentum in our business, and we believe that to be able to maintain our momentum this year even with inflation. shery: i think lots of people are asking about some content, if it is a barbie movie or some mattel movie coming up. can you give us an update on that marriage between production content and toys?

>> we recently announced another project from the house of mattel films. an action movie, a very exciting project. this is number 12 with a list of great content, great talent. we are seeing that our brands are becoming a magnet for talent to join and participate with these projects, and we have seen a lot of momentum for this film. we are right now in the development phase, so we have not impacted by the delay in production or release schedule this year. this project is part of our mid to long-term strategy, but we maintain progress and expect to share more with you as time goes on. paul: we understand the tell is looking at monetizing some of its brands through non-fungible

tokens. what is the latest there? >> yes, given the fact that we own our brands, we own our franchises, we have the opportunity to commercialize them in different ways. and find consumers wherever they are. in the same way we are approaching film or television or video games, online games, this is another area where we see opportunity for our brands, especially considering the heritage value, the built-in fan base of these incredible, iconic brands that we have so many of. we are in a very good position to find ways to monetize also in the and if we -- nft space. shery: thank you for joining us. time now for "morning calls." let's start with a call made back in october in anticipation of the capital gains hike. history shows stock prices fall,

equity allocations decline, and momentum underperforms ahead of increases in the capital gains tax rate. however, any potential equity selling will be short-lived and reversed in subsequent quarters, paul. paul: ntd security sees more downside in dollar-in and says watch for support level of 107, 108 -- more downside in the dollar-yen. still to come, the rise of tiktok is perhaps not as organic as believed. we take a look at the controlled world of tiktok fame next. this is bloomberg. ♪

shery: the chinese government targets big tech giants in a sweeping antitrust crackdown. our chief north asia correspondent looks at how a national pooling of data could have significant ramifications on user privacy and affect tech profitability. >> from a government standpoint, it is not in the interest of big

tech companies to become smaller and weaker. >> what leverage do they have? >> the leverage lies in they are cash-rich and have strong talent pools. >> they have the data, which the government probably wants as well. >> i would not disagree with that. >> a year and a year-and-a-half ago, china released a document codifying data as one of the core socialist factors of production under the idea that you must have a well regulated data market in order to maintain economic growth. this is a fundamental core operating principle that china will be using to regulate big tech over the next 10 years, and it is something that has not yet entered into the western lexicon. >> the chinese government is said to be mulling a joint venture with large platforms to oversee how their combined data is managed and shared.

>> there should be the agency in china which serves as an engine for the internet sector. in other words, not try to crackdown on the problems, try to develop the sector. >> but pooling data raises a host of privacy issues. tencent in a march analyst call conceded that data is extremely complicated. there's a fine line between ensuring users' privacy and opening up data to sharing. others like baidu claim to be open to opening their data vault. >> it is very much in line with our belief. we run a lot of open platforms. for ai in general, we have baidu bring, which is also open. we like openness. we want to share data with other partners. >> giving up data could certainly upend existing market positions, but noncompliance is perhaps the bigger risk.

for alibaba, getting off with a fine does not mean it is in the clear, and that alone surely will not pave the way for a resurrection. >> it depends how the government restructures our framework in terms of technology and also depends on how the company reacts to the changing environment. >> which begs the question -- how far will the government go in taking on alibaba and tencent and all the others? >> of course, they need the innovation, the growth, and they know that if they try to dissolve a state company, it's not going to work. paul: with us now is our chief asian correspondent, stephen engle, host of the new show "red line." there are still many unknowns with china's regulatory

crackdown on big tech. for example, how far will authorities go in reining in national champions of technology? stephen: alibaba is perhaps the first to be targeted, but others are already in the crosshairs, including, of course, tencent, and alibaba's phone financial unit, amt group -- ant group. we still do not have clarity on when that will be resurrected if at all and what the valuation would be. it seems like a pipe dream now given the fact that it could be folded into a holding company with oversight by the pboc and other companies, so there are many questions deal to be answered. i mentioned in that report that alibaba is not in the clear. it has to rectify what the government claims to be its

anticompetitive behavior, so that will affect short and medium-term strategy, and then there's other questions as well -- does the chinese government feel that alibaba has grown to influential with its media holdings? it has a sizable stake in waymo and other news outlets online, so those are questions still to be answered. with ant group, what will happen with financial services and lending? lending is the number one revenue generator for ant group, and it is in the crosshairs because of the risk it poses to the bank and financial system in china at a time when china is trying to rain and risk. and what happens to payments? alipay and wechat pay have 90% of the market.

that is at a time when the chinese government wants to roll out its own currency. that has to be answered. 34 other big tech companies, unicorns, if you will, that alibaba and tencent helped incubate -- they have also been put in the regulatory crosshairs. a long list of companies that still have uncertainty throughout, so we explore all these issues in redlined china and big tech coming up at 12:00 noon hong kong time is the debut of the show we have been working on for quite a few months. shery: good stuff. congratulations on putting all that together. chief asia correspondent stephen engle. we turn to tiktok, which has emerged as the defining app of a generation and become a launchpad for a new breed of celebrities, but becoming a

tiktok sensation is a far more curated process than it appears. we have the inside story. behind the rise of tiktok itself, how to make it into the world number 180 -- how did bytedance make it into the world's number one app? >> we traced it to its origin story, all the way back to when it was a music app called music.ly. the founders up a bunch of american teenagers listening to music and watching video, and he thought, you know what? let me see if i can combine those. from the start, he had an amazing and uncanny ability to track american teens and figure out and decode them. paul: what about tiktok's algorithm?

>> what happened was bytedance, the chinese tech giant, but the app and basically fuse it with this advanced ai technology. they collect hundreds of data points about you, what you want, what you are clicking on, how long your eyes are resting on something, what makes you laugh, all these pieces of data, and really start to create a profile on you. it is not based on what your friends are looking at but based on your profile and all the different data points they are collecting about you. shery: so i guess it is quite different the way they use data compared to facebook or twitter? >> exactly. facebook and twitter is based on who you become friends with and who you choose to follow, showing you that kind of thing. bytedance takes a totally different tactic. they say they don't care who your friends are, they are going to figure out what makes you tick, what you like, and try to

create a personality profile of you, and that is what makes it so much more addicting than other apps. paul: what does tiktok's rise tell us about the future of social media? >> the interesting thing about last year was former president donald trump was so focused on tiktok, and it became this matter of geopolitical importance, and then all of a sudden, it just kind of went away. now tiktok continues to grow, and behind it, bytedance, the chinese tech owner that is looking over to an ipo. while that geopolitical turmoil has been put on hold, bytedance continues to grow figure -- grow bigger. paul: you can get more on the tiktok story on the podcast "boundary." the author of "house of unicorns" spent 10 years working at china sovereign

wealth funds and joins us later. to get in-depth analysis from the daybreak team, that is broadcasting live in our studio in hong kong. plenty more to come. stay with us. ♪

shery: here's a quick check of

the latest business flash headlines. alibaba is launching direct cargo flights between singapore and hainan island as it looks to boost supply of foreign luxury goods to shoppers trapped on the mainland. on sunday, the first direct flight will launch carrying merchandise. it will run seven return flights per week and has plans to open more routs to japan and korea. >> we firmly believe the cargo business opportunity in hainan will grow even faster than what we imagine. we are continuously exploring other routes to more destinations in the world and increasing frequency in corresponding groups. overall, we think demand is super rampant. shery: blackstone is betting billions on businesses that will benefit from the post-covid reopening. in the first three months of the year, the firm invested almost

$18 billion targeting hotels, private jets, and travel companies. it says consumers are returning to the struggling entertainment and travel sectors. blackstone also reported its assets under management have hit a record of nearly $249 billion. citigroup could fetch up to $6 billion to build spanking asset sale as the lender fine tunes it's -- citigroup could fetch up to $6 billion for its banking assets sale as the lender fine tunes its portfolio. paul: we got more details on citi's plans to sell retail assets in australia. pmi readings for april also do at the top of the hour, and australia is pledging more money

as growing international criticism over the morrison's administration's policies to global -- to battle global climate change. futures for australia a little weaker, off about .2%. you see the 10-year yield for australia reasonably steady. nikkei futures last traded a little bit higher by about .1%. we did see u.s. markets declining on the back of news that president biden may be considering a proposal to significantly raise capital gains tax. still to come, we look at the market outlook. teresa, joins us -- teresa kong joins us at the top of the next hour. stay with us. this is bloomberg. ♪

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paul: good morning. we are counting down to asia's major market opens. shery: welcome to daybreak: asia. our top stories this hour. asian stocks look set to follow wall street's book lower. the s&p 500 saw the lowest in five weeks after bloomberg reported president biden may double capital