haidi: good morning. i am haidi stroud-watts in sydney counting down to asia a pleasure is major market opens. shery: i am shery ahn. asian substitute track wall street lower after key u.s. inflation readings accelerated at the faster rate since 2009. bitcoin tips along with tesla she after elon musk dispense using it to pay for vehicles,

citing environmental concerns. the latest on the vaccine rollout and global challenges ahead with a member of president biden's covid-19 advisory board. dr. also home joins us -- dr. osterholm joins us in 30 minutes. haidi: let's take a look at early trade as we count down to major markets opening and they are expected to open lower tracking the continued selloff we saw on wall street. this after u.s. inflation readings dropped the most since february bond yields, jumping also on concern. it could stifle the economic recovery and lots of concerns about whether this is a transitory level of reflation. futures pointing lower across most of the region, including sydney futures a pipe .4 of 1%. nikkei futures trading in chicago turned positive. it doesn't like we will get a

stabilization -- does look like we will get stabilization. .1 of 1%, but it is back to that core inflation debate for investors. shery: a red-hot cpi report showing consumer prices accelerated the most since 2009 boosting bets on federal reserve rate hikes next year. kathleen hays is here with more. the numbers dwarf forecast. >> they certainly do. let's go to a chart so we can show our audience what we are talking about as i give them specific numbers. the april consumer price headline was up 0.8%. the headline is the blue and core cpi is the white. the headline dwarfed the survey in our bloomberg consensus of 0.2%, and it was twice as much

as the very highest forecast we got in that survey. let's look at core cpi, 0.9% versus a forecast of 0.3%. you have to go back to the 1980's to find a number like that and it was broad-based, all major categories, and the reopening companies really drove this as well. car and truck rentals, 16%, airline fares, 10%, lodging away from home, hotels, nearly 10% as well. powerful impact on the economy, powerful impact on prices. look at the year-over-year numbers. there is a lot of talk about base effects. we knew those numbers would be strong. if we have that chart we can pull it up but at the least let me give you the numbers. the overall headline cpi up 4.2% , quite again, the most since

2008 and it had something to do with one year ago when the were so depressed. euro-dollar futures are pricing at more than 80% odds of a 25 basis point rate hike next year long before the fed's consensus. these inflationary concerns are hitting investors. haidi: fed officials keep playing to the risk of prolonged inflation. the question is given that we know the fed is waiting the next six months or so to see others plays out do we still believe these are transitory elements? >> the vice chair of the fed said he was surprised by april numbers when he saw them but he said this, let's listen. >> readings on inflation on a year-over-year basis have recently increased and are likely to rise somewhat further before moderating later this year. i expect reflation to return to

but perhaps run somewhat above our 2% long-term goal in 2022 and 2023. >> i really important point. there is a lot of talk about base effects. that is why fed officials say that this is temporary. we will see a surge for a while. i showed you those year-over-year numbers, but the annualized cpi rates are accelerating very sharply, three-month annualized cpi up 5.61% versus the previous period. six months, not as dramatic but three point 3%, double 1.5%. can the fed to that? if so, how long? inflation, the five-year breakeven up to .2% today, the highest since 2005. the former treasury secretary one time candidate for fed chair says he is concerned that the

fed continues to say this is temporary. he is concerned this could lead to the kind of inflation surge we saw in the 1960's and 1970's that led to the 1980's when inflation was double digits. there is a lot of concern about the fed moving and certainly now that rate hikes will come sooner and bond tapering will come sooner. for now the fed saying we need to see more data. haidi: we have a historic comparison with our guest. kathleen hays with a backdrop of what the markets are grappling with. joining us live is the wealth why ceo, loreen gilbert. you were saying this is comparable to what we saw after the second world war. if this is part of the steady climb toward higher persistent inflation how do you make sure as an investor you do not end up on the wrong side of the hedge? >> i would say complacency is

now gone when it comes to inflation, and the hibernating bear has woken up. we expect continued inflation numbers above 2%, or like 2.5% over the next decade. it translates into making investment decisions around inflation being part of the game and we have to consider what we can do to have portfolios come back with inflation. i think we will see [indiscernible] in certain areas with the expectation it will have to go up. technology and drug companies and people taking profits because of international tax reform as well as capital gains increases, all of those mean there could be shifts in the

market. we are still positive. we are still in an early stage of recovery in this bull market run. haidi: we saw dollar as well as yields rise but you are working on the basis you do expect to see dollar weakness as the trend goes forward? >> we do. in fact, last year we saw a decline of the u.s. dollar. those are long-term trends. last year we saw that 9% decrease and you see another similar year at this year so we are planning that out with emerging market exposure. where we see china doing well with gdp, india, even with the troubles of the pandemic, 8% gdp, we expect emerging market countries to do well. shery: we have seen dollar bears

talk about deficits and long-term structural weakness or the greenback, but at the same time you do have the expectation for rate hikes built-in and you have yields rising. the dollar carry, could not not returned with a vengeance? we have seen this chart on bloomberg and says a weaker dollar is positive foreign stock whether the s&p 500 and the u.s. or emerging markets? . >> we absolutely believe there are opportunities in the stock market even with inflation of the increase and interest rates going up, so the areas to look at in this inflationary environment will be small caps over large gaps, so increasing exposure to small cap companies do well in this environment. shery: does that also mean you

would get out of stretch valuations in the tech sector? there are still areas where you could see secular growth. >> innovation is the key when it comes to large-cap growth names, where are they going to do innovation, and that is the play there and rotating and working to value, as we do believe value will continue to outperformed growth for the longer term, so it cyclical trade still has legs on it. we see opportunities going toward small-cap, and increased exposure to equities from 60-40 if you are a balanced investor increasing equity exposure as we expect there to be more issues on the fixed income side as we eventually arrived at a rising interest rate environment. haidi: 60-40 being dated but the

correct ratio is. at what point do you see the continue pullback into the high-growth, high valuation tech stocks do you think there will actually be a better value to be found in the same style? >> during these opportunities right now, what we are seeing and what i would say is the next few months we continue with the volatility in the market, it is taking opportunities of volatility. for a lot of people there is cash on the sideline. the savings rate has gone up. there have been checks in the mail going to be able, so with all of the cash on the sidelines we see these opportunities over the next few months to adding those names that are being treated as well as to add into your portfolio all of these other areas that expect to do better going for over the next decade versus the previous

decade. that diversification to value and small caps. shery: loreen gilbert, great for having you on. still ahead, we discussed the vaccine rollout with a member of president biden's covid-19 advisory board. dr. osterholm joins us today. his divorce over for alibaba? we get a preview of earnings in the record of -- in the midst of a record of fines. this is bloomberg. ♪

vonnie: this is "daybreak: asia their the world health organization say more infectious coronavirus trains are feeling and a break in india have not been detected in 44 countries.

it is calling for more studies to understand the severity. the strain is forced to be designated an area of concern by the yuan agency and epidemiologist. it may cause even more mutations. the largest gasoline pipeline in america is back in service after a mess ransomware attack. colonial pipeline was forced to take its business off-line choking supplies off the eastern part of the nine states. it will take two weeks for full service to be restored. the average price of gasoline tops three dollars a gallon for the first time in more than six years. a diplomatic push is intensifying to end the most serious clashes since 2000 14 involving israel and the palestinians. the u.s. deployed and envoy to the region and palestinian media reports others are involved in mediation efforts. rocket brushes are reported to

have killed at least 56 palestinians in gaza and six people in israel. the philippines said china as deployed more ships to a disputed area of the south china sea. the foreign affairs secretary says the nation is considering another round of protest after beijing increased vessels in the area to 300 from just more than 200 and march. -- pledge to take up the matter with its chinese counterparts. >> once we have the coordinates and more data on this from the national test course -- task force, [indiscernible] this is essential. vonnie: global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. shery: look at big win falling after a tweet from elon musk

saying tesla as suspended vehicle purchases using bitcoin. our american markets editor joins us with more on this. steve, what prompted this tweet on the environmental impact by bitcoin -- of bitcoin by elon musk. $1.5 billion in bitcoin earlier this year. >> that is the big mystery. everyone who knows musk and tesla knows they are an alternative energy company basically and he certainly had to be aware of the energy usage for a very long time if not forever so it is puzzling even among industry insiders who have been very vocal about justifying the energy needs of tesla. haidi: you can to be on either

side of that debate, but the facts have been out there for a while. the energy associated with mining don't would extend to other crypto currencies as well, so i am wondering how much of this takes away from the institutional appeal or gloss that bitcoin and other crypto have attracted over the past few months, given that a 4% pull in bitcoin is not that much. >> with the volatility you see 10% swings are not unusual. when they said they were adding it to his balance sheet and jumped 16% and a lot of people credit musk for being the catalyst for the rally that basically saw it double in prices. the institutions, it is hard to

say. the gains you have seen in the past couple of years and the amount of money that everybody has made as been really hard to pass up on. shery: could we see other companies also following tesla? >> there really is not that many companies that actually really do accept bitcoin. i've seen investments of several value -- thousands among the millions of companies out there, and a lot of those companies are crypto companies. their interest in it to promote acceptance on that, but the fact really is that few people use it for transactions, and really, why with you with the appreciation you have.

you are paying for something that has doubled and tripled and went up fourfold this year. haidi: our markets editor there. coming up, softbank delivering the government largest quarterly profits for the company. we delve deeper into what is driving it success and why [indiscernible] is struggling to gain the respect he deserves. -- >> a training machine to rise our sensibility. i hope we can open up.

♪ shery: a count on to the start of trade in tokyo and seoul, some stories we are watching in korea. the president hosting a meeting in order to address south korea's ship industry given shortages -- ship industry given shortages. the bank of korea holding a monetary policy board not related to rate decision. we get bok data on money supply

later today as well. on the earnings front, sk innovation, martial life, and lg reporting. we have companies releasing result including tsuzuki. nikkei reporting toshiba is considering forming an advisory panel to boost its corporate value, and on the data front we are watching out of japan, looking at the current account balance. later this hour we might see the circle us -- surplus widening. haidi: let's get back to softbank earnings, what a blowout that was. yoshi saying it has developed the largest quarterly profit for a japanese company, double the $9 billion previous record from sheba. so he says he is not getting the success he deserves. what about these record numbers?

is this something sustainable going forward? >> certainly the investment business was the real story behind the earnings. softbank's investment arm boosted a ¥3.3 trillion profit in the second quarter. the company booked $24.5 billion gains on the investment thanks to the ipo just a couple months ago. it was by far the biggest contribution. the next biggest one was a german company that went public above 1.8 billion. some companies like uber and doordash have less value. whether it is sustainable, i guess we are going to find out in the coming quarters. haidi: you talk about vision

fund posting record profits. is he getting the credit that he wants for being this genius investor. >> vision fund profits are a function of overall equity markets. we know others have been over the past year. with the current slump in equities, actually the point in case, do not spend too much time over the record profit because if you look at the performance this quarter, the start of the fourth quarter lost 21% since the start of the current one. the one that delivered record profits in the second quarter is down. can someone keep listing these companies at the same place and keep accident on two things must be begins to real profit? with their second division fund,

the company is showing much more cogent and must where does investing smaller amounts, and softbank group is actually the only investor in that fund. their commitment to the fund is at $30 billion. they continue to be bullish. shery: did they up their commitment to repurchases as well? >> that is something that definitely disappointed investors. they completely finished their $22 billion buyback program. the buyback is what is propping up the share price, which more than triples the pandemic level -- lows, but you cannot deny that was effective. without that tailwind and giving the pressure with tech selloff in the united states, softbank may see some of their corporate discount starting to creep back in.

he did not live without so watch this space. shery: asian tech reporter with the latest on something. here is a check of that lens. a beijing-based medical data company is set to be planning an ideal that could raise about $500 million. sources say the offering could come as soon as this year with the firm considering potential venues, including hong kong. they provide cancer focused health care services and is reportedly backed by alibaba health. volvo says it is considering an ideal just months after calling off a merger. bloomberg reported in march that an offering by the owner who devalued the business at around $20 billion. he would remain a major shareholder in the automaker.

-- we discussed the vaccine rollout with a member of president biden's covid advisory board. this is bloomberg. ♪ want your workout to be easier, more effective, and more convenient? then you should try aerotrainer by golo. the new full body workout that you can do at home or anywhere. it's great for planks, squats, core, and glutes. you'll strengthen and tone muscles, relieve back pain, and reduce stress. it's also great for yoga and pilates. get noticeable results in just ten minutes a day. (woman) aerotrainer makes me want to workout. look at me. it works 100%. (host) all of this is a $300 value, but through this special offer, you can get the entire aerotrainer system for just four easy payments of $19.95. and if you order today, we'll also include free shipping. still not sure? then we're eliminating the risk. try the aerotrainer in your home for 60 days.

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pres. biden: we are now on track to get 60% of adults with at least one shot by next week. we still have a lot of work to do to get the adult vaccination rate to 70%, but i believe we will get there. shery: president joe biden speaking about progress and to give us vaccination roller. let's get more with dr. michael osterholm, director at the university of minnesota and emitter -- member of president biden's covid-19 advisory board.

thank you so much for joining us today in your busy schedule. let's get started with that ambitious rollout, we have seen success but the pool of people who actually want to be vaccinated seems to be running out. how do you get there when there is still some vaccine hesitancy out there? >> you have identified what i call the last inch issue. we have spent the past two months with the last mile, getting the vaccine to committees where places -- to places where they could administer it. it is an issue to get people to understand why these vaccinations are so important, allie protect you and your loved ones and members of your community, etc., and it is going to be difficult and there is no one answer. it is going to vary by who the people are who are reluctant to get a vaccinated. if it is a pregnant woman concerned about the safety of her unborn child, someone in the

inner-city, black youth convinced this is another government plot to do some kind of research on individuals, i can go down the list of all of reasons people i think these vaccines are not necessary or safe and our job is to go one by one by one to convince them otherwise with the data. shery: we could also be reaching herd immunity sooner than expected. >> i do not believe we will reach herd immunity. that is a kind of dream that people of come up with because i do not know what it means. herd immunity -- where you do not see ongoing increases in transmission, meaning the number just keeps coming down and down to the point where there are fewer infections with each generation of transmission or new set of cases, and i think for this virus as we see how infectious

it can be particularly with the variant we are talking about levels into the 80%, 90% level of people needing to be protected at we are lower than that relative to people needing to take the vaccine. even though it is incredibly good vaccine, on a routine basis we will be fortunate if we see it and the high 80's, low 90's, and when you start adding that up i do not think we will ever get to herd immunity where we see the virus disappear. what we will do is dramatically increased transmission. he will make it different than it has been but the idea of herd immunity is something that will only be in the textbooks. haidi: is learning to live with that and getting this to a level [indiscernible] we have had approval for teenagers being able to receive these vaccines and you said the b117, teens

have been affected or specifically. >> i think it will be a key part of reduction of transmission in our communities, and that is why we have to not only target children relative to getting them vaccinated but their parents so their parents understand why it is so important. today, you do not want your infected 12-year-old to transmit the virus to grandma or grandpa who may be vaccinated but these vaccines are not want to percent effective, they are very good but not 100%. getting kids vaccinated will do a lot to help transmission of the virus be reduced in our communities. haidi: what about complacency. make stated with vaccine hesitancy, arbitration, or straight up vexing denial people do not want to socially distance

anymore, they want to resume their normal lives. did we do that when we have this merry-go-round of new variants and a lot of boosters being required to keep people protected in the coming months? >> let me about that. there were a lot of assumptions and information in that thoughtful question. at this point we are concerned about the variants and the fact that may be transmitted at a higher rate than previous viral strains. they may cause more severe illness or they may evade the immune protection from the vaccines or from natural infection. it is the latter category that you just address. even though we have to be concerned about some of the variants we have seen to date there is still fairly good evidence the vaccines do produce the seriousness of hospitalizations, deaths even if it is reducing the overall protection against any clinical disease.

if that changes obviously and we do see a complete invasion of the reduction that is a different ballgame but we are not seeing that now. the second thing is getting people a vaccinated across the board is important in this country but we need to get people vaccinated worldwide. the variants are largely coming from low and middle income countries where we are seeing widespread transmission because we do not have vaccines there, so we have an urgent need not only from a humanitarian perspective to get vaccines to these countries at high levels but it is a way to protect our vaccines. if we do not have new infections we do not have more variant development and that will be important going ahead to protect our vaccines from future compromised by a new variant. shery: that takes me to my next point exactly, you have very unique knowledge of what president biden is thinking by

being part of his advisory board. at what point will he think americans have had the vaccine. there is an supply out there we need to send more vaccines abroad. >> the united states is in a unique position because of our production capacity. we have more than enough vaccines and we have the ability to produce it now. one of the challenges of getting vaccines to other countries, they do not have manufacturing capacity, the expertise of trains individuals who can make the vaccines and you cannot change that overnight. you cannot snap your fingers and have a new manufacturing plant built or the expertise to run it. i think you will see the united states will be one of the country is playing a key role in actually taking vaccine we manufacture here and sending it around the world and largely important with the collaboration of the other countries. this is a high priority for the

administration. i know for a fact from a humanitarian standpoint they are looking at this. and they have started shipping vexing other countries around the world, and the question is how much more can we ship. we need to do that for humanitarian reasons and to protect our vaccines. shery: you are saying other countries like the capabilities of manufacturing it themselves. why is the white house backing the proposal to waive intellectual rights of vexing managers because that would be one point that drugmakers make that what is the point of doing this? it will only hinder innovation in the future. >> this is a complicated topic and i do not pretend to be an expert in intellectual property, but i agree with you the fact of the matter is i do not see how waving -- waiving property rights will increase the vaccine to low and middle-income countries.

it is not a handoff of technology in an envelope that i cannot -- now start producing in my country. particularly the mrna vaccines, the technology is complicated. there are over 50,000 steps required to make these vaccines. there are specific limitations on the equipment available to make these vaccines, including certain kinds of filters and so forth. the companies have already stated they would be willing to share what they can and what is needed around the world if in fact we saw the capability there. we are challenged right now with india, which has been counted on as a major partner given their production capability, but now since we have seen this very serious challenge in india, vaccines have been rented from leaving the country, so again, india has a real need. they need to get vaccines but

the world needs to get vaccines. there is a great deal of discussion going on right now, how best to approach this as quickly as possible ways to scale up vexing availability around the world, and it is high priority. haidi: it has been the essence of this since the very beginning. we saw an independent panel review of the global audit response saying w.h.o. failed on these gaps, the speed of the reaction and a myriad of failures of it being able to prevent this from turning into a global pandemic. if this was to happen again do you think the global health infrastructure system is well-suited to be able to react to this kind of fast-moving pathogen? >> let's be very clear about it. it is going to happen again. influenza pandemics have happened routinely throughout modern history dating back to thousands of years ago.

we know that they will occur again, so from that perspective we have to prepare. we have another coronavirus pandemic? i do not know. it is possible. look at what this one is done and out quickly and took over around the world, so the question you are asking is are we ready, and the answer is no. must we be ready? the answer is yes and i hope if there is one silver lining the comes out of this dark cloud is we will take the information to how we did things successfully, we missed opportunities to actually make it safer for the world and take that information and use it to plan for the future. as i have had said to me by several leading economists around the world, if it takes billions and billions of dollars to get us better prepared for the next pandemic whether working on a vaccines or any number of things, and spend it,

because where billions of dollars we spend we will save trillions of dollars in avoiding the next pandemic, so it is important. shery: what are the lessons you are personally taking away from this? >> the first thing is we have to understand when these viruses first emerge it is already a challenge to try to contain them. we will always be a day late at a dollar short, so what we need to do now is plan for the fact that there will be new influenza viruses causing pandemics or new coronavirus is. -- coronaviruses. we need a new set of vaccines that can be administered now and provide protection against seasonal influenza and seasonal coronavirus infections but also will left cross protection against any new strains of the virus that might emerge as a pandemic virus. think if most of the world was protected when one of these viruses emerged, how different it would be.

for those situations where we cannot have vaccines redeployed in people's arms, out quickly can we scale up? imagine if we had the mrna vaccines right now for the world last spring, and different this picture would look? that is one of the areas we have to focus heavily on is understanding what vaccine technology we can develop that will provide us with these broad-spectrum vaccines in a timely way. haidi: that leads me to my final question, given the massive vexing effort is it just funding that stands in the way of achieving vaccines for other infectious diseases like hiv or better treatments for cancer? >> from a vexing standpoint it is a combination of funding but in some cases like hiv there is a sign of the challenge. there has been incredible work

trying to develop hiv vaccines and it has been a difficult as we say not to correct in terms of trying to find a way to protect people against the way hiv is transmitted and in some cases we will see this in vaccines for influenza and coronaviruses. what technology can we use to allow the body to develop an immunity against these rapidly changing viruses? it is a combination, and we surely at this point cannot give up by the fact that the science may not be there yet. we have to keep supporting it and when they juliet these vaccines available -- and when they truly have these vaccines available we will save droids of dollars. haidi: dr. ahlstrom, -- ulster home --

of course a member of president joe biden's covid-19 advisory board. we have breaking news when it comes to a stake sale deal. danone has raised $50 billion hong kong. we are getting details and when it comes to that strategic sale of the 9.6% sale in mngnui dairy. we have lots more to come on "daybreak: asia." this is bloomberg. ♪

vonnie: this is "daybreak: asia." u.s. trade representative difficult for updated tariffs to avoid applying decades old laws to the current issues. catherine tight was responding to a question about the trade expansion act, which former president donald trump used to put -- on steel and aluminum imports. u.s. efforts to effectively compete which are not hinge on cooperation in congress and globally. china is reported to be considering replacing a vice premier as a top economic envoy to the united states.

in the wall street journal says beijing may be mulling on the other vice premier for the new position. a close friend of president xi jinping led contagious trade negotiations that led to the phase one trade deal. in a setback to the impending tokyo olympics we are told the u.s. national track and field team as potential plans to train in japan over by received concerns. i japanese official says other teams have canceled training camps were similar reasons. the japanese government and ioc are pushing ahead with the games despite emergency lockdowns and calls on the japanese public to cancel. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. shery: china's regulatory cracked out will likely overset at is expected to be a fairly robust set of quarterly earnings for alibaba.

the company reports after the market close in hong kong on thursday. stephen engle joins us with a preview. you have been all over the story since the ant idea was canceled. what questions do investors still need answered? >> the big question for alibaba is has the storm actually passed, and for a group -- ant group who has no plants in the future and evaluation is to get huge it is a gets restructured, the question is what will the damage be from that storm, because they still have ongoing and continual headwind they are facing. for alibaba, they will reflect that $2.8 billion fine and down from the state administration in early april. that will be reflected in quarterly results, so that could hit net income.

we will get into numbers a bit, but the bottom line, as the storm passed? the ceo says they are ready to move on. our investors convince the executive board at alibaba can move this company because there are a lot of rectification's alibaba is complete and there are questions about media holdings, data security, data proprietary ownership, whether that will be pulled by authorities, so still many questions and that is likely what they will be focused on. here is what the cofounder said when asked about is the company ready to move on? >> with this penalty decision, then we have received good guidance on specific issues under the ant type monopoly law -- anti-monopoly law and i would

say we are pleased with the spiders. >> would this overhang -- the shares have been languishing, and at the same time we have had a tech route -- stock route and technology. this is a company that lost $280 billion in market value since late october. it got a pop up yesterday in hong kong i had of earnings -- ahead of earnings but the stock is languishing, down 20% in hong kong and down 30% in the united states since october 27. haidi: the likes of jp morgan issuing coverage with a new overweight, right, and other analysts are positive as well. what are we expecting out fourth-quarter results? >> all of those numbers, alibaba was a $310 stock.

now it is $220. perhaps there is potential to get before the pre-ipo fiasco. granted, there is a low base coming from last fourth-quarter at the beginning of the pandemic, but again, revenue is likely to be boosted considerably. net income will take a hit. growth at 42%, which trails 50% growth in sales growth. but we will be looking for is 40 guidance. after they moved on, where will they move on, what are the expansion plans to benefit from the post-pandemic recovery story and the stay at home story. it benefited the company like softbank edits report yesterday, and also where does the cloud to go with questions about data? in the third quarter they posted their first positive quarter,

where do they take that growing business there when they saw 53% revenue growth. haidi: stephen engle ahead of alibaba earnings. you can learn more about china's big tech crackdown on the terminal. you can watch youtube to get the background on the. shery: breaking out of japan, the current account numbers, the surplus coming at ¥2.65 trillion . this is narrower than estimates had called for, also narrowing from the previous month, so a bit surprising given we had expected a surplus expanding in march. so strong exports especially when it comes to cars and capital goods not to mention a weaker yen, but a surplus narrowing in the month of march. this is bloomberg. ♪

shery: the biggest gasoline pipeline in america is returning to service after last week's cyberattack. su keenan as the latest -- has the latest. about time. >> gas is flowing once again,

the pipeline resuming shipments around 5:00 p.m. wednesday just as three out of four gas stations in the south were completely out of fuel after panic buying at ensued. colonial is warning the lines may be down again from the time that it takes to initiate the process of restarting, so it could be off at all for a couple of days. futures retreated after searching earlier in the day, retreating on that startup news. the retail prices, which surged above three dollars for the first time in six years could take time to compare. it is a critical source for the entire east coast. it has been down for six days before the start up, and the biden administration signed an executive order late on wednesday, an order that would boost the efforts to fight cybersecurity impacts and

protect the energy system. back to you. haidi: coming up, the market opens in sydney, seoul, and tokyo. this is bloomberg. ♪ so you're a small business,

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shery: welcome to daybreak asia, i am shery ahn. haidi: and i strong -- haidi. the 2021 games after the u.s. -- accelerated at the fastest rate since 2009.

a record in japan, posting its highest quarterly profits. plus alibaba set to report earnings after a record antitrust -- tech crackdowns. shery: japan, south korea, online. we are seeing consumer stocks and health care stocks leading the decline on the nikkei. the top is down half a percent, the third session of declines. we have seen the current accounts surplus narrowing more than expected, the japanese holding steady, below the u.s. dollar. it is moving around for a third consecutive session, after reaching a record high earlier in the week. we saw the largest one since february, tech stocks, the

korean won also losing ground against the u.s. dollar. this is the third session of decline against the greenback. haidi: we are seeing a lot of that when it comes to trading here in australia as well, the third day of decline. some loss from that big spending budget has worn off. just about everything in the red so far, that aussie dollar is taking it to cover -- recovery, the u.s. building inflation fears. we are also seeing aussie bonds as equity trading low, new zealand down by half a percent, the kiwi dollar taking a recovery overnight -- after overnight decline. shery: goldman sachs is staying constructive on regional equity and maintaining allocations, tim

moe is with us. this is a time when we are seeing asian stocks close to reaching 2021 gains in the asia-pacific, where using opportunities? tim: across the board. the key message from us is the typical concern in may, there is an adage that we are all familiar with, some of that weakness may have been frontloaded. may is typically a weak month but if you look on a longer-term frame of three and six months, a is the third best month to invest in the region. the decline we had from they made forced quarter -- first quarter peak -- china down about 18%, we have a balance now and we are given some of that back given the challenging take the

u.s.. the broader fundamental picture is more of earnings recovery, up 31% this year, 16 next on our numbers, valuation has come down to the mid-15 level from mid-february. we think risk versus reward looks attractive. shery: what economies and targets are using those opportunities? taiwan already went through a down, stocks sinking the most in 14 months. this is after all of the optimism coming from the semiconductor business and the tech heavy index. perhaps it is so what we saw in korea. tim: a great question. to look at taiwan first, the market was down 9% the other day but they closed at about 4%, the markets overall down close to

10% from its recent high. it is a reversal of fortune because taiwan was the best performing market in the region at 78 -- at 17% before its previous peak. there are interesting points investors may not be aware of. number one is that the headline index is distorted by a very high concentration of tmc -- if you strip that out, the rest of the market is trading between 12 and 13 times earnings which we think is attractive. number two, we have seen the outperformance of taiwan so far has been driven fundamentally. look at the relative earnings provisions in taiwan versus those for the rest of the region, earning his up -- it is earnings driven performance rather than a prospective one.

the latter point, retail industries accepted country control -- cost control -- it has cooled off. taiwan is the only place where it has been concentrated, we think yesterday was market driven retail -- which provides opportunity for longer-term investments. haidi: we are hearing from the taiwan financial supervisory committee who said they would seek to stabilize the environment if there's an irrational decline, not so with the definition of that is. but if you look at 16% in the asia-pacific, it is a good argument for investors needing to diversify their portfolios at this time. tim: again, we have to break things down.

when you talk about semiconductors overall, and we think that they are still very strong, continuing fundamental dynamics so we are all for that area for the region as a whole which is good for taiwan and korea as well given the concentration there. we are aware the tech space more broadly is more interest-rate rate sensitive versus common term values and longer duration, stocks given their, their tax flows -- cash flows and all your wishes are more sensitive to interest rates. but that is more telling in the dream stock as opposed to what we might call profitable tech. one thing we have been making, which is true for our recommendations and china as well, is profitable tech as opposed to the concept stocks which are more vulnerable to changes. haidi: i have to ask, what is

your inflation thesis at the moment? is the next said's -- six months transitory or a step toward more permanent higher inflation and how do you adjust for that or hedge for that and your investing strategy? tim: it is a super topical question and we are a little of both of what you just asked. u.s. data or u.s. economics team is saying there are clearly visible elements of a transitory nature to the high print that we saw, used car prices are up a lot, that is a dip manned -- demand and supply issue. we are expecting a low base effect, a good deal of this is expected. we think it is the transitory effects of the reopening of the economy. all of that being said, there is no doubt inflation is getting billed and the longer you have

the fed delivering behind the curve as its intention is, the more that inflation pressures are allowed to build. they area we are focusing on that will drive it but also is a great hedge is the commodity space, commodities are our top trade regulations in asia. -- we know that that is attractive in its own right but it has lagged behind the price movement so we think there has been a catch up in the commodity equities. that is a way we would like to express that view, by building upstream price pressures and it is a great entry point not just for a hedge but also a directional view. shery: tim moe, always great having your thoughts, chief equity strategist at goldman sachs. we are seeing pressure down more

than 5%, profits nothing -- the largest ever quarterly profits were japanese company but they spent all of their money that they had allocated for repurchases, buybacks. they have not committed to further buybacks and now we are seeing the stock at the lowest since february after reporting net income of $17.7 billion. most of that is coming from their successful investing. we will discuss more of softbank in a couple of minutes of stick around but for now let's get to vonnie quinn with sport headlines. vonnie: elon musk says tesla is suspending vehicle purchases of bitcoin over concerns about the rapidly increasing use of fossil fuel for bitcoin mining and transactions. in february tesla said they were going to -- purchased bitcoin and plan to except as payment.

bitcoin mining consumes 16 times more look to see that it didn't weigh 15. tesla will not be selling any of the bitcoin already on its balance sheets. the u.s. has called for updated -- applying decade old lowest to current issues. the 1962 trade expansion act, trump used to put deals on -- u.s. efforts to compete with china hinge on cooperation in congress and globally. >> i think we should work in multilateral ways and multilateral forms. to compete with china and to compete with china effectively. what we are looking for our trade policies, multilateral ones, looking at china competition that are going to have the kind of broad, bipartisan support we need. vonnie: the philippines says

china has deployed more ships to a disputed area of the south china sea, the nation is considering a round of protests after beijing increased chinese vessels in the congested area of to 300 for more than 200 and march. they're going to take up the matter with chinese counterparts. >> one part of the ordinance from the national task force, -- it is essential because you never let any incident past. vonnie: global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. haidi: an antitrust cracked --

crackdown, someone from alibaba will be coming live and sharing his views on the company's results in the next few hours. coming up next, we will have more details on blockbuster results on the bank. this is bloomberg. ♪

haidi: breaking news, asia-pacific index has announced a raise in year-to-date gains. they have been tracking for sale on wall street, the snb is selling off the most -- s&p some of the most. this is coming as u.s. consumer inflation is jumping the most

since 2009. we are seeing this across the board. losses to the tune of close to 2%, taking it back to its lowest point since early january. in australia, the third day of decline. trading occurs in taiwan as well, that index reporting three days of losses, the most in 14 months. let's take a look at one of the losers in japan, we are seeing a stock as a loser in the tokyo session. they are delivering the largest ever quarterly profits for japanese country, income at nearly $18 billion in the latest quarter, double the $9 billion previous record set by toshiba. we're going to speak to the lang -- a senior -- were going to

talk about this. earnings from softbank, they are taking profits off the table. >> no doubt that softbank profits could have meant -- hit the ceiling in the immediate term because if you thing about the june quarter, they do not have that -- they do have a couple of ipos in the pipeline. in the june quarter on its own, given the market selloff in the tech sector, softbank would unavoidably take a hit because looking at their portfolio, not only at the parent company of all, they hold as much as much is 20 billion shares but also asset management duties. having that exposure. it is -- this underperformance

is not surprising when the global tech selloff is ongoing. shery: given that they have not announced another commitment for repurchases, what will be driving the stock from now on? >> i think the second would be the thing to watch, never the company is pouring more capital, they are not just with capital commitment within three months but recently they allocated 10 billion into the fund which brings them to $30 billion. -- the second vision fund does not have any outside investors. that will potentially attract outside investors and hopefully they the liver for the second fund. shery: that was a bloomberg intelligence the senior agent in hong kong.

two men to bloomberg radio to hear more from today's big newsmakers. forecasting live, lessing -- listen on bloomberg or at bloombergradio.com. stay with us. ♪

haidi: biotech cornovax is the second -- coronavax is the second what most widely distributed vaccine. real-life outcomes are better indicators of the drug efficacy in fighting covid. there's an indication of falling

vaccination rates. >> why is it hard to reach 100% vaccination rates even when you have the vaccines? the next key consideration is safety. vaccine safety has a great impact on vaccination rates for a massive population. if a vaccine has severe side effects, even if it is rare, it will hurt peoples oneness for vaccine overall. we have seen some countries, who have already received a huge amount of vaccines and have reached high vaccination coverage, and they also have well-established systems which is not accessible for many countries in the world. what we are facing is a global pandemic, not just an outbreak for one country. efficacy varies in vaccines but i want to emphasize that our goal is not to compare efficacy as high over low but to bring

cases down in this country, region, or the city. that is our ultimate goal. >> i understand that, though i do think the different efficacy rates for different -- has potentially lead to some hesitation in some countries around coronavax, because as he said earlier, there is a higher level of scrutiny on these vaccines, higher than any texting ever been made, with the public knowing much more about them than they would about the flu vaccine or other vaccines they are taking. what is your response to that? >> the efficacy shown in phase three trials truly represents the protection from vaccination. we have seen effectiveness is higher than the efficacy and

stage three trials so the end of the day, everybody will look for reduction in cases in your country as the most important protection rate. >> in hindsight, would there be anything you would have done differently, particularly on the communication side? >> it would not be that different. in an emergency situation, doing the most important thing will always be our top priority. when covid breaks out, the priority has to be meeting huge vaccine demand from different countries, even if we are in a similar situation in the future, we will still make this trade-off. whether we get the paper outburst or we should get the vaccine registered first. >> what do you think this global vaccine rollout says about the pharmaceutical industry and its future question mark think of

the main differences you have seen from the way chinese companies have approached vaccine developing and rollout. clerks so far we have provided 318 million-- >> so far we have provided 318 million doses globally. sinovac -- our monthly production can reach over 200 million doses or even 300 million doses, it speaks to the level of the industry. shery: sinovac's chairman and ceo. joining us now to discuss more vaccine use, which shows that mixing astrazeneca and pfizer doses increases side effects. this is interesting especially given that developing nations do not have visibility about what shots they will get, we learn about the side effects but also

efficacy of mixing them. >> there's a lot of focus on this right now particularly with these apply toward it -- shortages we are seeing globally but especially in developing nations, how can we effectively lower vaccines? switching them awry -- around his of the scientists are looking into. in this study they looked at a 90% efficacy rate, the pfizer vaccine with astrazeneca which is a viral vector so they are not using that mrna technology that pfizer does. mixing those two together, they did find that there were side effects, not huge rule -- hugely unusual, headaches, fatigue. they looked into one of the best ways -- what are the best ways

mixing the shots around. haidi: we spoke with dr. who is on biden's covid-19 advisory committee and he spoke about how key it is to get young people vaccinated, to combat these more infectious variants. what does it mean that pfizer is approved for young people? >>'s it is a huge move. -- it is a huge move. we have taken the ball and run with it, the big economy that is going to be doing this, you are not same as in china where many people are very keen to be vaccinated. this could be a huge step to reopening the u.s.. i also think the generation will be effective with school closures and the like.

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>> alibaba banking regulators in china, a record antitrust find in hong kong, to react first. >> have experienced scrutiny and we are happy to get this matter behind us. we are not aware of any other investigations leading to the anti-monopoly law. >> for alibaba, the overhang is removed -- so they can go back

to their normal business. i think alibaba right now is a rare combination of value and growth. >> we respect the situation very much and we are conducting some analysis seriously following the pace of the entire alibaba group. >> antitrust is also good for innovation. just cannot imagine -- any more than 90% on organ shares in the u.s.. ♪ haidi: taking a look at alibaba amid the ongoing -- there due to report earnings. their target prices 359 hong kong dollars, you are not alone in terms of the optimism over where the stock price could go next. is there a sense for you that

the overhang is moved -- mostly -- given the crackdown? han joo to check that you can hear me. n, wnat -- han joon? it doesn't look like we have him, we will talk to him about why he is optimistic. the countdown for those results. lots more to come. this is bloomberg. ♪

haidi: alibaba earnings a bit later, our next guest -- han joon kim. i hope you can hear me this time, why a are you optimistic? is there a sense that a breakthrough is getting close to bottoming out? han joon: yes, i think regulatory concerns are and -- in place, hind us.

-- behind us. at the end of the day we are looking for the fact that a lot of us are priced in in the market is not giving them a lot of credit to continue to exceed growth. it is relative positioning with a lot of risk factors. haidi: what about actual sales question mark what you expecting as china moves beyond -- what about actual sales? han joon: last march quarter, we had some impact so looking at the headline numbers, we will estimate cash some distortions are coming through. on an adjusted basis, we think this quarter, this march quarter they are going to be at gop growth at about 19%. will call the 20%.

if it continues to grow, we will do fine. i think in general the market is concerned that we decelerate into 10 or 15% type of growth, giving a lot of marketers to competitors but the underlying growth trends are more along the 20% level and we proved we can do that and the stuff will come back. shery: how is alibaba doing and monetizing some of the newer businesses? han joon: i think comprehensively i would say the past periods have been more testing the water, the type of environment, i think the next year or two is going to be mostly trying to wrap up services. he recalled the deal, the threat to consumer type of product, it

is one of the fastest-growing apps in the second half of last year. have a monetize that? no. they are at about 100 million active users, they have a way to go to reach more and try to monetize but they can focus on the fact that they can grow those users substantially and we will have the -- they will have the visibility thereafter. despite the size, we still have many years to continue to grow. shery: should we also expect more costs when it comes to them trying to compete with businesses? han joon: absolutely. at the end of the day, -- 20% of market growth, they are right

now at a civil digit or zero so the gap is a large impression but that is coming from the investment. that is the reason why we do think there has been a mismatch in earnings expectations and some have been penalized for that. but there is a point here that the company -- they are at the early steps of transforming things like agriculture in china and we will see that come through. haidi: they were penalized for a 2017 with retail, it is confirmed that other deals might come under scrutiny as well. would there be a meaning for impact on where you think that stock price should be and if they were forced ultimately to unwind a lot of these investments they have made?

han joon: that's quite specific. say the issues surrounding those kind of acquisitions have to do with have a properly disclosed to do in the past and i think those act as less punitive measures for the company. the bigger one is the anti-competitive heavier, that will be recognized this quarter and it will go beyond that. i think more importantly, the big thing is being underappreciated here is if you think about regulation in general, our economies are becoming bigger across the world. in the western world we look at how fake news -- and how to deal with it. they're talking about monopolistic behavior and in search we are talking about how do we tax these companies across droid's -- jurisdictions. every government with china

included, what we have here is the chinese government has stepped forward and tried to put measures in place, those primitive ones, the real opportunities for the chinese companies to really set the standard of ok, how do we deal with gig economy employees? do we treat them with good social welfare, to how -- how do we deal with integrity and fake news. they set this standard, this is something that will matter down the road. these issues being brought up on chinese relations now, the companies can deal with it and perhaps move forward in adapting to the world and sustainability efforts. haidi: it is not just regulatory

overhang becomes chinese companies, but the broader political roof. we saw when this week with a loss of 26 billion on their share price because of the thing posted by the ceo. is that something, a risk you have to associate with these companies if you are investing in china? han joon: as i said earlier, these are because businesses are becoming bigger and as you grow you do have to deal with more societal or social elements. as i alluded to earlier, how do we treat them, taxi drivers, are they self contractors or employees? what kind of author to be give to them? these issues are popping up because they are becoming bigger and they will need to address them. the equitable treatment of the entire supply chain and value chain is of the get taken to

consideration -- to take into consideration. it is different from what we thought it would be this year but the greater opportunity here is that we deal with it properly and everybody is better off for it. and that leads to sustainable growth for everybody, and i think as long as we have that than we are in a good position. haidi: i wonder if it is by intent or consequences, seeing less high-profile ceos. han joon kim there, great to have you. alibaba regulatory risks, the hong kong director of the center of chinese law, angela john will join you -- join us at 9:38 -- 9:30 if you're joining us in hong kong. you can see more on "bloomberg technology", you can watch

redline, china, and big tech. shery: the markets around asia, the nikkei losing -- pressure on tech stocks, mirroring what has been happening on wall street as well as we see concerns over inflation and stretch valuation taking tech stocks down. the kospi is also losing, foreign investors were drawing from korean stockmarkets, we saw the are just one day outflow since february and the bingo stoxx as well -- tech stocks as well. we are seeing these dollars reported, kiwi stock single longest moving streak since february, movers and japan and, softbank dropping more than 5% at the moment. we saw record profits and that did not fail to impress markets

because at the same time they announced another repurchased commitment so now we are seeing softbank taking a hit. also down on most 13%, they purchased about 100 million dollars in bitcoin earlier. following what tesla has done but today elon musk said they will stop accepting bitcoin on purchases for their cars. holdings rising at the moment, capital says its investment in the company. haidi: stick a look at taiwan shares, have been talking about -- let's take a look at taiwan shares, we been talking with the selloff as a focus. stocks in taiwan seeing the biggest one-day wrap since march of last year. take a look at how that tracks on this chart. -- one of asia's top performers of the year, we had trading that expanded from seven to 10%, you

can look at the historical context of the plunge we saw yesterday. we heard from the financial supervisor that they would potentially intervene if there was a -- irrational shilling. were talking to cindy, part of this, both the rise and the fall is the huge tech and semiconductor components in taiwan's market. >> yeah and it was a good thing for taiwan stocks wednesday, they started pretty quiet but after 10:00 or 11:00 a.m. they began plummeting. at one point the index slumped almost 9% in its worst one-day performance in its 54 year history. we have investors in crisis mode and panic selling, lots of news during the trading hours and

they don't know whether those news are true or not so investors panic and that sent the stock market tumbling lowest in 14 months at close. at close we are seeing that almost about 900 stocks were retreating, over 90% of the shares. including some 100 stocks dropping by a 10% daily limit. we will monitor very closely when the market opens in 15 minutes into some up it is a perfect storm yesterday, we are seeing strong entrance and outperformance in the market and signs of -- no signs of covid and in the wake of global skittishness, stocks plummeting. shery: and it was in favor of taiwan during the pandemic, it seems to be acting against it. >> that's right. during the pandemic, as the pandemic began we have seen that

looking from home trend -- semiconductors and chips, that put taiwan's semiconductor makers from the center at a global stage and we've also seen that the chips are boosting taiwan's economy and exports. taiwan's gdp grew about 8.6% in the first quarter. that is the fastest growth in more than a decade. a strong demand for semiconductors, boosting their economy and stocks. right now, investors are worried that tech stocks are expensive and some use covid as an excuse to exit the stock market. global tech shares fell and will also have an impact. haidi: we are counting down to

the open of trading in taipei after the massive selloff. breaking news, boeing issues a repair plan in one of the first steps to returning -- providing instructions to repair an electrical issue that had it grounded all of the new jets for more than a month. this is according to people familiar with the matter. the second is coming soon and this is after outlined electrical flows in april. we are seeing this as repair orders are resolving that manufacturing defect. in thwarted boeing's ongoing plan to try to smoothly we introduce the 373 match after

crashes have them grounded worldwide. coming up, discussing stock issues and glut -- a gas in china. that is ahead. this is bloomberg. ♪

haidi: foreign secretary says negotiations on china expirations are moving along but he spoke exclusively about where those talks are at. >> and might starts and thing in the stock market, being a lawyer i know you can be charged for stockman ablation. i don't want to say too much except for this, when we first met it was in manila and there was a question about the development of a gas. we got a draft, we like it, -- in that it said that no one gives up anything by doing this. it is a purely economic,

practical endeavor. and then he said to do the memorandum of agreement, he said here it is. he said ok and he signed -- >> a little more on the exploration deal, you mentioned you can't go into too much detail because i would imagine there is progress. that is what i get but it is not finalized. what would be the next steps to look forward to generally speaking as you look ahead? >> the thing is that one, the two commercial enterprises are talking to each other. when they come from that, it

goes back to me and then i will do the executive agreement for that. among the issues, does anyone give up anything, no. that issue is shoved to the side and we just see it from the basis of develop it of oil and gas, almost of it -- most of it will go to the philippines. david: i would imagine based on what you said, the sticking points, they are commercial and not political? teodoro: commercial. and at one point -- it is not just what is in writing, that any action made by either party, either side. this is not a good example but

let us say the technology has to be of one country rather than the other and most of the participation is from that country. that fact can never be cited by either side of to support its claim or proposal. in short, no prejudice. and deeply detail. david: i'm not that you're guaranteeing -- and not that you are guaranteeing anything on the timeline, but would be possible to expect this deal to be done by the end of the president's term or is that you close? teodoro: i could go to jail for that. [laughter] haidi: foreign secretary t eodora. reducin -- teodoro.

-- a time when china's birthrates have fallen to the lowest in six decades, what is your proposition here? >> the country is starting to think about what they can do to lift low birthrates. population drinking is not necessarily a problem, it becomes a problem when it happens fast which is what is going on in china, you have 4.3 births -- 1.3 births per woman. we are at a lower rate. when i look at the measures the country takes, so often there are cash benefits, and might be health care even. that is all great but when you consider personal decisions, they very often come on trade-offs. what are women giving up in order to do this? and countries in east asia, the trade-off is not great for women. haidi: in china in particular there is an issue of a lack of

trust, being able to trust someone to take care of your child is a big trade-off. a lot of chinese women anecdotally are choosing not to make that. >> there is a very obvious problem which is cost. in china like everywhere else in the world, but especially in china where there is so much emphasis put on what the one child could achieve, the tuition you need to put into this one child and the compounding cost means it can be extremely expensive and that puts people off. but then there are all of these softer things, less tangible things, do you have some but you can trust to leave your child with? or a lot of chinese women it is also what happens once you have a child, what happens inside the home and in the workplace, the world -- which cap is already wide between genders and it becomes wider after children. shery: a great bloomberg opinion piece, check it out. market commerce continues and we

look ahead to the start of trends in hong kong, shanghai, shenzhen. merck markets china open is next. this is bloomberg -- bloomberg markets china open is next. this is bloomberg. ♪

♪ david: this is my kitchen table and also my filing system. over match of the past three decades, i have been an investor. the highest calling of mankind i have often thought was equity. then i started interviewing. i watched your interview. i learned how leaders make it to the top. >> i asked him how much he wanted, i did not negotiate with them. david: i have something i would like to sell. >>