haidi: good morning and welcome to "daybreak: australia." i am haidi stroud-watts in sydney. we are counting down to the major market open. >> good evening from bloomberg world headquarters, i'm kathleen hays. haidi: these are your top stories. apple smashes estimates on surging demand for its devices. the iphone maker raises dividends and boosts buybacks by 90 million. samsung releases its results in the next hour. the third hold steady as the

economic recovery is strengthening. asian futures and bonds rise, howell reassures investors that the central bank is in no hurry to tap the break on pandemic support. president biden prepares to pitch his spending plan to congress. he will declare that the u.s. has turned a corner on the crisis, while saying the middle class, not wall street, built america. kathleen: let's get a check on wall street. an active day. you can see the stock. futures, the s&p 500 pointing a bit higher. kind of a mixed day. the tech earnings after the bell are going to give us a strong look in the futures are opening, which they should be doing shortly. on the nasdaq side, despite apples blow away after hours earnings report, microsoft had very good results. but not good enough on the sales side. that was one of the things holding the s&p 500 back. the tenure did better.

you can see the yield came that -- came down after jay powell said look, we are not going to taper, the economy, is doing better, but it is not time yet. the job is not yet done. that has helped give bonds a boost today. interesting that crude is doing a bit worse, even after opec-plus expressed some confidence in demand, continues to talk about its plan to boost supply. and maybe it is something on that supply-side that makes them wonder if there will be more oil and maybe not quite enough to offset -- more than offset that increase in demand. and going on as you know. let's check in on the asian trading day. how it is setting up, particularly after these big stories in the u.s. we are waiting for president biden to talk more about his fiscal plan tonight. sophie kamaruddin is in hong kong. sophie: after the wall street -- the heads of wall street, looking mixed with japan and malaysia.

markets consider the goldilocks fed scenario as well as heavy line above earnings in the region this thursday. big chinese banks along with the korean internet player on deck. from india, we are watching a hindu stock for a check on how the indian consumer is faring. piercing measures to curb the virus, being ramped up in india. we had a three-day gain -- gain. futures settled in the green. the aussie dollar struggling to reach the handle as we wait on the fiscal policy speech from the australian treasurer. we get third quarter sales from woolworth and production updates, as well as resolute mining. this with commodities very much in the spotlight. ling up on the terminal, we do have the bloomberg index tracking raw materials, capping an eight-day gain. the longest winning streak since 2018. putting the gauge on course for the best month since april 2016.

goldman seeing an upside for commodities. predicting that the commodities complex will rise by 10%, mainly led by energy and materials. on the energy front, we have petro china earnings do this thursday. haidi: let's get back to our top earnings story. apple leading revenue estimates in the dust. second quarter sales came in at almost $90 billion. the company boosting buybacks and dividends. that sent shares surging and post market trade. let's get the details from our tech reporter, mark gurman. this was a period where apple crushed it, despite some of the downside when it comes to supply change, retail stores being affected. this was the pandemic play that continues to deliver for the company. mark: yeah, the apple did incredible across the board. all-time record, nearly $17 billion in revenue for their growing services segment. very nice quarter for the iphone in march. the ipad did particularly well.

the mac top $9 billion for an all-time record. in terms of downside, they did say that next quarter is due to take a three -- a $3 billion to $4 billion revenue hit. given continued demand from schools and work from home users. in addition to some constraints you are seeing on the semiconductor side, which i know is the buzz word of the last month or so for these tech companies. basically every sector right now in terms of chips. kathleen: when we look at what comes out of tim cook's conversation with investors and analysts, it seems there are so many positive things that are going on. you have a buyback program. he talks about apple tv doing well. early innings for the apple watch. is he exaggerating or are they totally firing on all cylinders now? mark: in terms of the numbers,

i'm not sure they can legally exaggerate. some of their superlatives, maybe he does believe the apple watch is still in its early innings. i would say that they are probably in the second inning, or nothing second, probably in the fourth or fifth inning. the product has been around for 6, 7 years. it is getting pretty advanced at this point. there are some bells and whistles and new health features they can add, but i would not classify that product as particularly early. numbers don't necessarily lie. these are extraordinarily strong numbers. i have not seen a year-over-year increase like this, or a beat like this for apple in a while. we can't forget, there is a year-over-year comp to the beginning of the pandemic in north america. the pandemic began in q2, 2020, in terms of its beginning impact outside of china. so you are seeing strong growth as the u.s. economy begins opening, vaccinations are spreading, and people are going

back to work. there is generally an increase because of that too. haidi: and in fact, cook pointing out the low base when it comes to the china performance needed to be taken into account. is the company going to have to work harder from here on forwards to retain that interest in demand, as the vaccination rollout continues, as people get back to work, back to school? mark: cook was talking about the idea of there being a hybrid workforce moving forward after the pandemic hopefully hits its final stages. you were going to see people working from home. they will continue to need to buy masks for the office and home. they will keep updating the iphone, the watch and other products on an annual basis. the services are doing quite well. the real risk factor here is the $20 billion to $25 billion they are getting from annual commissions from app sales. that is something to watch moving forward. haidi: mark gurman there, are tech reporter with the latest on apple numbers.

you can turn to bloomberg for more on the blowout earnings from apple. that is at tli's ego to get commentary and analysis in our live blog covering those apple earnings. let's look at the other late moves on this big take -- big tech earnings. investors pass what has been a positive set of earning so far from the big tech giants. facebook sale surging almost 50%. that was a beat on estimate, seeing an upside of over 6%. qualcomm there also higher by 5.5%. bullish forecasting given for the current quarter. the online marketplace, ebay, the outlook missed estimates. we are seeing the downside being pushed into the stocks at the moment. amazon unchanged at the moment. we are getting details of the plan to bump hourly wages. let's get you now to vonnie quinn in new york for the first word headlines. vonnie: morning. federal reserve chair jay powell and his colleagues have upgraded their assessment of the u.s. economy, but say they are not

ready to consider scaling back the pandemic. keeping policy and asset purchases unchanged, the fed strengthened its outlook and signals that risks have diminished. powell says inflation is reflecting what he calls "transitory factors." as india expanded its vaccination program to all adults, the government run website hosting the vaccination registration process crashed. the systems came back up, there were no available slots. social media lit up all over the columns. more than 850 million people are eligible for the shop. andy is so far administered about 148 million jobs, as it surpasses 200,000 covid deaths. u.k. government has secured an extra 60 million doses of the pfizer beyond tech -- biontech vaccine. scientists at the joint commission on vaccination are deciding which groups of people should get the booster shot later this year, after they have

been given their first two gives us. athletes completing at the tokyo olympics will be required to take daily covid-19 tests under updated rules. all participants will have to take two tests before flying to japan. this is according to the newly released playbook of antivirus measures. an official says vaccination remains non-obligatory. scrutiny over the event has increased after tokyo entered a third state of emergency this month. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. on vonnie quinn. this is bloomberg. kathleen: thank you. still ahead, president joe biden will declare the u.s. has turned the corner on the pandemic and his first speech to congress in a few hours. henrietta treyz joins us to discuss this. coming up next, more analysis on that federal open market committee decision. we speak with former fed vice chair alan blinder in a few moments. this is bloomberg. ♪

>> for many years, we have been focused on inflation deviating below 2%. we used our tools to keep it back up at 2%. if we see inflation moving materially above 2% in a persistent way that risks inflation expectations drifting up, then we will use our tools to guide inflation and expectations back down to 2%. no one should doubt we will do that. this is not what we expect. kathleen: jerome powell speaking at night -- and a press conference after the meeting today. . the fed upgraded to the economy while nevertheless keeping rates at near zero levels. risk city outlook remains and he says they are not considering scaling back pandemic support yet. let's get analysis on the fed decision with someone who has been there, done that. princeton university professed

-- princeton university professor alan blinder. as i said, you sat at the table, you helped make these decisions. for many years. would you be having any second thoughts about this steadfast decision the fed has made, inflation has to be high and accelerating, that is one of the two key that has to happen before the start reducing stimulus. do you see any risks there? alan: there is. i'm not sure about your and accelerated that you had. added it has to be above 2%. they have some catch up to do from the below 2% years. the fed is extremely cagey about how much catch up there is. i think that is entirely appropriate. my opinion is that until it gets into the upper -- upper two's, if that ever happens, the fed is not going to get into fingers.

if it starts -- just to say a hypothetical, if it goes into the upper two's and it looks like it is rising, then i think the fed will get itchy fingers and we will see changes to the policy. kathleen: do you have any sympathy with larry summers, former treasury secretary harvard university economist, someone you know well, his view that there is a fairly substantial risk that this waiting, waiting to see this actually happening, risks the fed having to play catch up and raise rates faster than they would have otherwise, risking the recovery they have fought so hard to help create? alan: when you use the word any, i have to to answer yes. so not much. i will elaborate in a second. on the catch-up, the way the fed has refashioned its strategy, which is not to look preemptively at where they think inflation is going according to

some forecasts, but actually to wait until they see the whites of inflation's eyes, that implies that the federal reserve will have to play catch-up. so they fully expect inflation will go past 2%, eventually. they will play catch-up. they believe they can play that catch-up. the other thing i wanted to add is my friend larry summers has sometimes raised the specter of using frames like highest inflation rate and -- in a generation. that would be like 6%. i'm not the slightest bit worried about that. if you say, someone will be petrified that inflation should pop up 3% for a month, that could happen. it is not my personal central forecast, but i certainly would not rule it out. kathleen: you have been at the fed, you are an economist, you are a student of the fed's history.

do you have any concern that as the federal reserve gets to the point where they have to start tapering bond per -- bond prepared -- bond purchases, that they will get political pushback? he said you have to have full employment, inflation above 2%, because the government is selling a lot of treasuries now. i would not be surprised if there are people in congress who think it is the fed's duty to keep buying bonds indefinitely, and keep those yields low. is that a risk for the fed? alan: yes. but i would rank that behind the bond market vigilantes. i think the first pushback you are going to get is from the bond market. they tend to overreact to everything. and they will overreact to the slightest hint that either inflation is going too high, where the fed is starting to taper earlier than had previously said. there could be some pushback from congress. i think the fed is in a fortunate position that joe biden is sitting in the white house and not donald trump.

if it was still donald trump, there would be a lot of pushback. it would be tweeting, screaming, everything i would be shocked if joe biden does anything remotely like that. he respects the independence of the central bank. haidi: do you think the fed chair is worried about the amount of froth? he acknowledged that part of it has to do with the supportive monetary policy settings, but he also said it has to do with the pandemic, because of fiscal settings as well. is that something the fed continues to keep into account, given we have had episode after episode across different asset classes at this level of froth and exuberance? alan: there is no doubt that he feels on the spot. he will feel more on the spot in a few months from now, as the frothy tapering starts to move from the back of his mind where he shelved it, to the front of his mind.

not just him but the entire fomc. it is hard to know how they are looking at these various evidences of froth here and there. if they are isolated in small, a little crazy stuff like gamestop from a month or so ago, and what is it, doggy coin or something? they will not worry about that. [laughter] alan: if they see something major in the stock market, in the bond market that suggests a loss of confidence, for example, people are thinking the fed is losing control and is not going to be able to make good on its pledges, that will be a concern. they will all pay wrapped attention to that. haidi: what do you hope to see in the american families plan? what do you hope to hear from president biden today? if the plan manages to get consumption, back to pre-pandemic levels, would that

signify an economic policy success for this administration? alan: i think what has already been tasked is going to get consumption back to pre-pandemic levels. if you look at the disaggregated numbers, the portions of consumption, which is a lot, that are not subject to the pandemic fears, so not personally delivered services, not barbershops and restaurants and bars and things like that, but stuff that comes in a box, that is back to pre-pandemic levels. and fiscal policy allows to do with the car sales. car sales are way up. home sales are way up here that has a lot to do with the fed's very low interest rates. it is the rest of the stuff, the stuff that makes people afraid like getting on airplanes and going to baseball games and things like that, that is going

to take a little while yet. but it is coming. so to answer your question, i think we are getting there without the new plan that is going to be announced tonight. you want to think of the new plan as being announced, the family plan i guess, as a longer run issue that may not have much at all to do with the pandemic, or maybe a little bit. my personal favorite is family and medical leave. outliers and the rich world and not providing things like that. . the pandemic made that gap more obvious than it was before. but it was pretty obvious before. if we can make strides against that policy, it is not just about getting back to pre-pandemic levels, it is about changing the structure of the workforce, especially for women in the u.s. haidi: always great to have you

with us. former fed vice chairman alan blinder there. we are getting quarter production data when it comes to gold output. we are seeing a beat on the average analysts estimate for production in the third. 491 -- 491,000 when it comes to the production number out of new crest. third-quarter copper production coming in robust at over 35,000 tons. we are seeing the guidance when it comes to full-year gold production being maintained between 1.95 million to 2.1 5 million. cost -- copper production being maintained. we are seeing those numbers on track to deliver the four year 2021 guidance with strengthening seen in the balance sheet as well for new crest. lots more to come on "daybreak: australia." this is bloomberg. ♪ ♪

haidi: samsung's do with our final first-quarter results in the next hour. the faster than anticipated global recovery from the pandemic is likely to have led to a strong jump in profit. stephen engle joins us for more. given what you saw in the problem -- the per limiter numbers, what are you expecting? stephen: these numbers will be coming out of seoul in the next hour or so, and they will be anticlimactic because they come out with those preliminary numbers three weeks ago on april 6. got a good idea of how they are conglomerate in their four main businesses were performing in the first quarter. earlier than that, samsung predicted there would be drop off, profit might be weaker in the first quarter. however, the global economy pickup was faster than anticipated. ps 21 galaxy series of smartphones was stronger than

expected. the s 21 sold two 21, outsold its predecessor two to one in the first six weeks since its launch. prices picked up in the quarter. first-quarter numbers were pretty good. led by the as 21 that you see here. large lcd panels contributed, dram prices picked up in the first quarter, the foundry business did well on the global chip shortage. profits picked up 44% year-over-year in the polemic -- the preliminary numbers. operating income was higher than expected. sales in the first quarter were up 17%, to 65,000,000,000,001. going forward, as we look at the second half of 2021, they will be coming out with the next generation of dram. a double data rate. that could help sustain some minimum to -- momentum going into the later half of the year. not a bad set of results given

the uncertainty that is clouding since on, which we will get to right now. kathleen: i guess we will need teased what you are going to say next. there is this astronomically large inheritance. uncertainty over the -- what does it mean? stephen: yes. a cloud has hung over samsung because under south korean law, they can pay over five years. this is a huge bill. south korea has the largest inheritance taxes in the world. 11 billion u.s. dollars. the patriarch of the samsung empire, he passed away late last year, he left a 21 plus billion dollar fortune. the heirs who by the way is in jail right now on that conviction for financial malfeasance, and political misgivings, if you will, they have to pay this. 11 billion u.s. dollars. they are going to donate one trillion yuan to medical

facilities and 23,000 works of arts will be donated. kathleen: stephen, thank you very much. archie north asia correspondent. plenty more to come on "daybreak: australia." we will take a look at those apple earnings later in the show. this is bloomberg. ♪ ♪ ♪ look, if your wireless carrier was a guy you'd leave him tomorrow. not very flexible. not great at saving. you deserve better... xfinity mobile. now they have unlimited for just $30 a month... $30. and they're number one in customer satisfaction. his number... delete it. i'm deleting it. so, break free from the big three. xfinity internet customers, switch to xfinity mobile and get unlimited with 5g included for $30 on the nations fastest, most reliable network.

♪ kathleen: you're watching daybreak australia -- vonnie: the united kingdom is working on a digital coronavirus passport. the initiative is based on an existing national health service app. it will be adapted to help travelers prove they've had the shot or tested negative for the virus. they started testing a tracing app. the u.k. prime minister is facing electoral commission investigation into whether he or the ruling conservative party broke the law. the probe is tied to his

renovation of his official residence. johnson says -- >> i have covered the cost. most people will find it bizarre. this is an electoral commission. i conformed in full with the code of conduct, with the ministerial orders. officials have been kept -- have been advising me. most people will think it's apps that we bizarre that he's focusing on this issue. vonnie: in thailand, and opposition coalition is calling for the immediate resignation of the government over what it calls a failed vaccine rollout. the leader of the largest groups says the block may pursue legal action against the prime minister's administration. the decision came as he met with driver sect it -- private sector are presented if stu accelerate the vaccine effort. pico collins, one of the three

astronauts on the apollo 11 moon mission, has died at age 90. nasa calls him a true pioneer and lifelong advocate for exploration. he became known as the forgotten astronaut because his discrete role in the mission. he was the command module pilot circling the moon as fellow astronauts became the first people to walk on the moon. global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. i'm vonnie quinn. kathleen: president joe biden will address congress and give details of his american family plan, defining $1 trillion in spending with $800 billion in tax cuts and credits. it's funded in part by the largest tax increase in decades on wealthy americans. biden will say that wall street did not build america, the middle class did.

let's bring in the director of economic policy at veda partners. always great to have you as always. how attached should we be to the details that are in this plan, given that there was an overestimation of how strong the progressive agenda would be in congress? henrietta: i stole a line from ted lasso. watchers and investors be goldfish. the president is going to rollout optimistic spending levels, $4 trillion between the infrastructure plan and the family plan. he will rollout free -- $4 trillion worth of tax cut -- tax hikes. our expectation is that gets cut at least in half if not more than that by the end of this process which will take until september to play out. you can listen.

it will be lots of speeches. it will be great to see the president for the first time. i would be a goldfish. haidi: given the teasers that we've heard so far from the white house, there's a focus on the middle class, unions, veering away from the riches of wall street and the market. in your view, what could you get from the measures that are being proposed? also from the measures and supports that have been put in place that would boost the inequality that we've seen deep and as a result of the pandemic. henrietta: that's the most important part here. when we think about the spending, it's considered a radical notion that in spite of -- instead of spending on tax cuts, democrats will be spending on initiatives that help the

bottom 75% of income earners in america. these are blue-collar jobs, union jobs, infrastructure jobs. highways, roads, bridges, broadband. there's also r&d components. we have not seen what pieces will be looped in. the mass majority of the spending is prioritized for the lower income brackets. individuals below $400,000 are explicitly exempted from any tax hikes associated with this bill. it's a huge focus on income inequality just in the way they are spending and prioritizing which initiatives they will talk about. on the family plan, you will hear things like childcare, things like the child tax credit , family paid lee's -- leave. those are initiatives that the united states lags behind in as a wealthier nation. also, that disproportionally

allow mothers to go back to work . they will have a tax credit that they will get monthly. they are talking about making that an extended tax credit. the focus on in him -- income inequality is the overarching view that shape all the policies. haidi: -- kathleen: i'm curious about the politics of this. the democrats have not tried to hide the fact that they are focused on the midterm elections. they had a close call last time, particularly in the house. a lot of republican women picked up seats. what is their calculus here? surely there will be lots of voters who say, give me more money. take care of my kids. a lot of people support childcare. at the same time, the chest keeps getting bigger and bigger. it could be 10 trillion. at some point, you have to wonder if some people don't start saying, could you be

spending a little bit more than we need to spend? henrietta: it's incredible. the $6 trillion number, if you told us that last year, you would have blown your mind. incredible sum of money.an we will end up with a $1.5 trillion bill. the conceit will be that now you think it is small. that is part of the political advantage of going in this fashion, especially following on the five covid bills we had. we ignore this massive spending rollout. at the end of the day, when i talk with moderate democrats in the senate who will be the deciding factor, there spending appetite is around 2 trillion or below. you won't get spending that exceeds that.

there's nothing with a three handle that can really earnestly pass. on the deficit spending side, there's a robust appetite. the midterm elections, one of the reasons that democrats is that the economy and getting vaccines and getting out of covid are the most important things. if you deficit spend, so be it. if you raise corporate taxes, that's fine. it's not the end of the world. they want spending to go up fast. infrastructure spending has a notorious lag time. they want to get that out as fast as possible, ideally before september. have it impact the economy before the november of 2022. kathleen: what do you expect to hear from tim scott? he is a republican from south carolina. he's this and only black republican. -- the senates only black republican.

there is symbolism in that. the republicans want to show that they are differs, they understand. what do you want to hear from him? henrietta: tim scott is very gregarious. he's well spoken, a fun person to hear talk. he's only one of three african-american senators in the senate. there's a whole bunch that could come out that either side could boast about. there are a couple of issues that the republicans want to hammer joe biden on. in particular, immigration. senator scott is working on a police reform bill. i think they want to contrast the benefits of the tax cuts and remind voters of the fact that republicans past tax cuts in 2017. he was part of that. he will bring those up. trying to set the table for not dismantling the 2017 tax bill,

the paramount issue for republicans. kathleen: it will be an interesting evening. thank you so much for helping us get ready for it. henrietta treyz. don't miss bloomberg's special coverage of president biden's address in a joint session of congress beginning at 8:30 a.m. in hong kong, 8:30 p.m. in new york. u.s. commerce secretary jira -- gina ramon said the biden administration will remain aggressive with china on trade. in an interview, she also addressed the chip shortage, saying the u.s. has become too reliant on other countries. >> we have to shore up our supply chain. we have become overly dependent on a few suppliers in a few countries. we need to make investments. what we are doing is working with congress to pass a $50 billion semiconductor supply chain fund so we can incentivize

companies to build chips in america. >> when you were looking at the campaign, president joe biden did not support a lot of things that president trump did. some people are surprised that he has kept the tariffs in place . you oversee the tariffs. the steel tariffs are still there. the tariffs on aluminum are still there. the tariffs related to a lot of products related to china are still there. is there any insight you can give us about why they are still there? >> although we don't agree with the way the trump administration handled many things, one of the things is they brought to light the fact that our competition with china is precarious. it's a strategic competition that will define our time. president biden agrees with that. we are going to continue to play

tough with china. we are going to continue to use all the tools at our disposal to protect american workers and businesses from unfair practices by the chinese government. the reason that we have not made those changes is really that. we need to continue to be aggressive with china. >> european countries aren't happy with the tariffs on steel and aluminum. the president is going to the g7 summit soon. you expect to see any news related to that when that summit occurs? ? >> i expect robust discussion between now and then. the europeans are not happy. i've had many discussions with my counterparts in the eu. they are our allies. europe is not a threat to american national security. china's oversupply and flooding their market and our market with cheap steel, that's a national

threat. we need to work with europe to prevent china from doing that. haidi: that was the u.s. commerce secretary speaking with david rubenstein. lots more to come on daybreak australia. this is bloomberg. ♪

haidi: we have breaking numbers when it comes to metals.

we are seeing third-quarter iron ore shipments. they met expectations when it comes to analyst extra meds. iron ore coming in at 42.3 million tons. expectations were shy of 41.9 million. first quarter costs when it comes to that, also a little bit higher than what we thought. 53.6 million tons. this coming as we continue to see upside when it comes to iron ore prices. robust demand and better margins out of china as well. we are still seeing full year iron ore shipments coming at 182 million tons. like much of the other iron ore players, maintaining their guidance. 3.5 billion to $3.7 billion there. we are continuing to watch that situation when it comes to australia and china. the rhetoric needs to be worn

down for the trade relationship to improve as well. we are also seeing that australian iron ore shipments are near capacity as of that march time with that port operating close to full opacity. let's get morning calls ahead of the asia trading day with sophie kamaruddin and. wti holding at 63 bucks. rising signs of stronger u.s. demands. i'm still looking at the pictures coming out of india. what does that do for market confidence? sophie: that made him the optimism. how much can markets look through the virus situation in india if that is destabilizing as the government ramps up measures to curb those infections? an energy research firm based in norway are cautious on the outlook given how the health

system is being overwhelmed in india. they are warning that the oil demand could lose ground and make further reductions possible. they have cut demand estimates for may as well which could subsequently tip global oil markets to a sizable glut. surplus swelling to 1.4 million barrels per day globally. kathleen: commonwealth bank has raised its price forecast. why? sophie: it comes down to demand. the cba increasing their price forecast for aluminum by 6% this year. they calculate that global appetite for aluminum will rise about 3% from this year through 2026 when they see prices peaking.

we will be closely watching. kathleen: thank you so much. let's get a look at how the market is reacting to the fed decision to keep policy unchanged. joining us in new york is -- what am powell's commentary moved the markets? >> you had a choppy end to the session but it was all about that tapering. it did have a lot to say. it's just not time yet to start discussing that tapering conversation immediately. you saw that risk positive move. you saw stocks drop. the dollar coming down with it. gold higher, copper higher. all hitting session highs. it was interesting to see how sensitive the market was to any tapering talk. haidi: in terms of what investors are concerned about right now, what do we see? >> is pretty interesting.

you are seeing a tug-of-war. you have to bet on the one side saying, those inflation concerns are transitory. we won't see them stick around. those massive rises and commodities is really not a function of that fed easing, that monetary policy. instead it's a functioning of that reopening narrative, that vaccine narrative. chair powell did say that markets are sloppy. what counts as transitory? we crunch the numbers with the health of john authers. in the past, going back to 2009, those massive johnson commodities in particular lasted for about two years. is two years transitory? kathleen: does the jump in commodity prices really translate into inflation? higher commodity prices could miss demand. we are talking about the fed. if you follow everything so closely, what will these tech earnings mean for the rally that we've seen in stocks and stalled out for a couple days?

is this a big plus? >> it's interesting. you are seeing massive drums. the bloomberg intelligence missive was something like 33% yesterday. that has only risen with massive drums intact. you are seeing cyclical exposure here. that's what these earnings are showing. with that reopening economy, you are not seeing the end of growth stocks. a lot of it has to do with digital ad revenue, business investment, and a lot of that spending coming out of the american consumer savings rate. those will all go in favor of those tech companies. it's not just value. some of those benefits will be reaped by those growth companies. haidi: r bloomberg markets reporter there. besides the fed, asian markets will be divesting a host of earnings. china construction bank reporting a 3% gain and offers. the chinese economy powering out of the pandemic at a record pace . tom mackenzie joins us now from

beijing with the details. how did this recovery story play out in the earnings? tom: [inaudible] haidi: we will endeavor to try to get tom back next time with audio. [laughter] in the meantime, we will take a break now. this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. opec returns profit in a first quarter. china's vehicle traffic rose to pre-pandemic levels. a profit of $3 billion, recovering from a 2.7 billion but -- loss in the same year. margins have improved along with china's border. economic rebound. [inaudible] fixed income traders outperformed most of their peers on wall street. income from trading rose 34% as they avoided losses from the collapse. it's considering one of the banking most flexible were terms. allowing them to work from home from up to three days for week. they want to cut cost by

reducing office space. gender chartered is considering ways to downside it singapore office space. bloomberg learned that one option is to cut a minimum of four floors or 80 thousands where feet and move that could become the biggest cut by a bank in singapore in recent years. haidi: breaking -- kathleen: breaking news on olan. the acquisition of old thompson -- it surprised me. they proposed a buy at an enterprise value of $950 million. this is something every -- everyone has been waiting to hear. we will have more details as they unfold. china construction bank reporting a nearly 3% gain in profits as the nation's economy powered out of the pandemic at a record pace. our china markets coanchor tom mackenzie joins us from beijing with the details. everyone is watching the china

so closely. what is the take away here? tom: absolutely. benefiting from that economic rebound of 18.3% that we saw in the first order, china construction bank was the first out of the bait -- gay. profit increase of 2.8% for the first quarter. net income was increasing by 13 billion u.s. dollars, building on a strong fourth quarter as well for ccb. in terms of net interest margins, those narrowed. nonperforming loans increased. it's a very different pictures from the earnings that we saw in 2020 when they were really squeezed. the worse earnings picture that we saw from china's banks in about a decade. bloomberg intelligence says there are still some challenges for china's banking sector, particularly the pboc. the central bank doesn't want to see low growth above 2020 levels. nonperforming loans are still an issue as well. other banks that will be reporting later today.

bank of china to round the picture. kathleen: thank you so much. that is tom mackenzie. that's it for daybreak australia. daybreak: asia is coming up next. this is bloomberg. ♪

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♪ haidi: very good morning. we are counting down to asia's major market open. kathleen: i'm kathleen hays in new york. the fed holds near zero while saying that the economic recovery is strengthening. futures rise as jerome powell ensures investors the central bank is in no hurry to pull pandemic support. president bide