haidi: good morning, welcome to "daybreak: australia." sophie: we are counting down to asia's midmarket open. shery: the top stories this hour, u.s. stocks dip after weaker than expected u.s. inflation gives the fed more flexibility. haidi: apple slips after it's

revealed new product line. shery: this is the picture across wall street. the s&p 500 fell in the new york session. we had financials leading to decline, a narrowing il gap when it comes to short and longer terms in the u.s.. we solve it smallest information -- inflation gain, debbie ti ended the session unchanged. it's rebounding above the $70 a barrel level after it fell after china announced the sale of more crude from its stockpile. it paired losses after the inflation data. we also had pressure when it comes to the casino stocks being traded here in the u.s.. a follow more than a percent

after the macau government said it's looking to create government supervision. and a look at the treasury rally , we had three consecutive weeks of yield gains, but now we're seeing that rally and the 10 year yield sinking the lowest moving average, coming in at the 126 level. but it is all to do with that cpi number, and we continue to see cpi still remain elevated despite the fact that it came in below expectations, edging down to 5.3%, but still above 5% for the third consecutive month. haidi: the core inflation is what we've dubbed it, when you strip out all the elements that you typically called transitory as a result of the pandemic effect. the bad news is that this is still above the taper down.

is down from where we were two months ago but it adds to the debate as to whether we will see a secular uplift or whether core inflation will continue to move down as well. sophie: the concern is that housing costs could remain but the key question remains what happens next week when we have the fomc meeting for two days. will the transitory camp went again, or could we have a hawkish surprise? haidi: the more hawkish central banks around the world, in sydney, pushing back on the idea of early rate hikes, saying don't need to see a lot more

when it comes to robustness and wage growth before they change the outlook at all. and we talk a lot about tax restructuring and tax reforms. a new report saying they recommend australia should lower the income taxes like so many other populations around the world struggling with an aging population. sophie: and perhaps that spending package in the u.s. could boost growth. it's interesting because despite the fact that we may have reached peak growth and peak earnings, and that seems to be the case when it comes to find managers and the bank of america survey, they're not giving up on stocks. investigator -- investor allocation is only falling slightly to a net 50% overweight. haidi: will get more on that from sophie who is in hong kong this morning. what else has stood out to you from that survey? sophie: investors boosted their

allocation so we did see a pickup to japanese equities, the lowest underweight since may. underpinning the case that we could see a fresh record for the nikkei to 25 after closed at a 31 your high on tuesday. switching out the chart, 82% of those polled expect china to ease in the second half. we see more signals of slower growth from the mainland. the data do this wednesday are likely to show an uneven recovery. targeted measures are -- to support the economy seem to be more likely. and they aussie, after we saw the governor shoot down the earlier reset hikes, we have it holding as you can see on the chart.

also saying the rba expects to stop before reaching inflation goals. shery: a slower pace in consumer price increases, reassuring investors. many economists are concerned that inflation still remains too high. kathleen hays is here with a recap. it seems to be a win for the transitory camp, but a small one. kathleen: a small one indeed. were happy to see it continuing to move higher in a steady move, the consumer price index has started to pull back just a bit, especially when you look at the monthly numbers. those are the gold bars along the bottom. a lot lower than the 0.9%

increase in june. in fact it's the smallest advance in seven-month. but the turquoise line move down year-over-year but it is about 5% for three months now, that's pretty high. in terms of the reopening, prices eased for things like used cars, prices shot up when people bought houses in the suburbs and suddenly need to buy a car. airfare and car rentals all look better. there's a lot of talk about taper and how things look but less pressure, a lot of people are speculating and president biden has not decided if he will reappoint jay powell. haidi: so were looking at that call rating, still pretty high.

kathleen: it is interesting, but you can look at things that are even more basic than that and see why they are saying inflation is still too high. for example, you still have prices steadily rising for furniture, new cars, rental costs of all kind. stephen englander at standard charter saying prices linked to reopening, prices are still rising 3%-4% at an annualized rate. that is still high. another analyst saying it looks like the cooling-off is due to delta. that could turn around if delta dies down. she says prices are still extremely elevated. saying the change in food and gas prices actually swamped the big move up that workers got in wages in the last year and a half or so during the pandemic and more. another report out today that did not get as much attention, if you look at real average weekly wage gains, the actually

fell in august nearly a full percent. that's a problem with inflation, it hits people hard, especially wages at the bottom. the fed and the white house have to be watching that as well. haidi: kathleen hays in new york , and perhaps playing into the holiday inflation story, we saw a fall in apple shares. it unveiled a new product, no major design changes but the new models have some features. let's cross over to our apple reporter for more. there was disappointment that was palpable. >> definitely off cycle. this is the same design as last year. not unexpected, like you said. when apple introduces a big redesign, the follow-up one or

two versions have the same design for the most part. the changes made today will continue to push iphone sales. people will keep buying them in droves. they are not moving the needle because i don't really have to. they are not being forced to do anything here until they get to the foldable stage. that will be the next big shift for apple, a couple of years down the road. shery: what can we expect for the holiday season with these 5g updates? mark: certainly people who did not update to the iphone 12 will upgrade to the iphone 13. i think they will entice a lot of people to upgrade. i think the new sierra blue color is awful, quite frankly. i like the graphite better this time around. i preferred the pacific blue.

i think they could've gone a little bit bolder and stronger on colors. i think the apple watch situation is interesting. they did not give a release date, they just said later this fall. we all know what that means. they were probably see supply shortages through the holidays. shery: it's always fun to get those new colors and exciting to find out what they are. mark, thank you. let's get over to vonnie quinn with the first word news. >> the chief cabinet secretary told bloomberg that moves to restart the economy will start from low risk areas and could depend on improving vaccination rates. more than half the population is fully vaccinated and the government says anyone eligible will be offered a shot by november. >> infections can happen even if

you are vaccinated. so we will be asking people to take precautions as we moved to show a roadmap toward loosening restrictions. if behavioral restrictions ease, it will help the wider public understand the benefit of vaccination. we should promote that movement going forward. >> russian president vladimir putin has gone into isolation after being exposed to people infected with covid-19. he said he spent an entire day with one of the people whose among his staffers. a spokesman for the kremlin said the president is healthy and tested negative for the virus, but will avoid in person meetings for some time. wall street executives in chinese officials are planning a virtual meeting thursday. bloomberg has been told it includes several top chinese

regulators. the roundtable was first convened in 2018. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still ahead, the head of australia's largest crypto exchange ways in, joining us later this hour. and, the big inflation debate. this is bloomberg. ♪

>> the narrative is still very

much that inflation will be transitory. another report for the second month in a row that gives credence to that transitory debate. >> temporary is the order of the day. >> we still see quite a bit of pressure coming through the pipeline. >> supply chains remain disrupted. >> look what's happening with labor and wages. >> i don't think this changes much for the fed. >> it gives them a little bit of breathing room. >> i think they are sitting in a good position, regardless of which way they want to go. in reality, whether they start tapering in september, november, december, i don't think it makes a big change in our outlook. shery: the august cpi offers a small win for the transitory camp. our next guest says it is hard to argue that inflation will remain entirely transient. dana, great to have you with us.

what are the market implications if in fact we do see more bottlenecks, supply chain issues, and more sticky inflation like housing costs? dana: thanks for housing -- are having me. i thit is entirely transitory. there are sectors of the market that will get hit more than others. particularly when you couple this with now getting more information about how corporate rate increases can happen, the likely winners and losers, couple that with the fact that there is still supply shocks we are working through. higher prices, difficulty bringing in labor where it is needed. i think we will continue to feel the pain of that. shery: given that the fed could

have pressure to act faster, or investors getting ahead of themselves, given the recent rallies we have seen? fund manager seem to be incredibly positive when it comes to u.s. stocks when considering that growth in earnings may have peaked. dana: it's a great point. we are looking at potentially breaking a record in terms of -- we're moving into the fall, so we will see how that goes. but certainly chatter around direction is more and more noticed with those we talked to. depending on how the debt ceiling debate goes, depending on infrastructure spending, there's a lot that markets will have to digest in the last few months of the year. and of course, tapering, probably by the end of the year. haidi: what happens if american

workers continue to see inflation-adjusted pay cuts? the impact on lower wage growth. what does that do to the consumer piece of an investing strategy? dana: great question. differences in wage exchange is happening differently. is it even across the board? no, and on top of that you have increases in other costs. i think it is something the fed will pay attention to. notwithstanding that parts of price increases will not go away anytime soon, three-year surveys looking at potentially 4%

inflation, that might be a little high, but that being said , i think the fed is going to try to stick to its mandate to learn more about jobs and wages than right now it is worried about inflation. haidi: talk me through your investment strategy given the uncertainty on how that plays through for monetary policy and liquidity. dana: we oversee a variety of portfolios. high diversification, we are out there in terms of just making available to our clients different types of facets. we're working with retail advisors and their clients. we are making available more options in the alternative space for them so they can look at areas like private equity, hedge

funds, where more folks can get access to some of these products that might have a little more return over time. to combat inflation that impacts corporate profit. haidi: coming up, the goldman sachs cfo has been leading the bank for nearly three decades. we will tell you who is in line to replace him, next. this is bloomberg. ♪

shery: a big changes in the works for one of wall street's most prominent firms. goldman sachs cfo is retiring and will be replaced. su keenan the details. another round of executive

reshuffling in the top ranks. su: for many years the cfo position has long been a key power position at goldman, so a lot of our eyes are on the bank in terms of what happens in this next chapter. the chief financial officer will depart the bank later in january, on january 1, dennis coleman will take over, although to smooth the transition, goldman says he will immediately start serving in the role of deputy cfo. the 57-year-old goldman veteran rose through the leadership change that ushered in david solomon. before that he was part of a key push by goldman when it made its recent effort into mainstream banking. victims of the reshuffling do not only include coleman, but

observers are saying that the treasurer has been position internally for a bigger role. so this big change at the top might open a wedge of greater responsibility for her. a post said he does not intend to retire anytime soon and is announcing his next chapter apparently shortly thereafter. haidi: what are we expecting with the meeting next week? su: september 16, and people close to the matter st. mark's the resumption of the u.s. financial roundtable. that's a big meeting that was put on hold or the back burner due to the pandemic. we are told it is now back on. u.s.-china relations one of the likely topics, people close to the matter saying a key topic

will be beijing's recent crackdown on the private sector. the meeting comes after investors have really been unnerved by the regulatory push by beijing in targeting some of the biggest tech firms in other industries and the pledge by president -- by president xi to create common prosperity. a lot of big players there -- will be there including goldman. shery: su keenan there with the latest. two of wall street's biggest banks have flagged results ahead of third quarter. jp morgan expects revenues to be better than forecast while citigroup says earnings from trading were probably decline by one percentage in the low to mid teens. wells fargo delaying his plans for two weeks while reevaluating

the impact of president biden's vaccine plan announced last week, which will require large private employers to mandate shots or testing. it's the third time wells fargo has pushback is return to the office date. haidi: here in australia, westpac will be hosting consumer confidence, as the lockdown continues for much of the country. united group slid after the executive director director was charged with insider trading related to disposal of shares back in 2019. saying he emphatically denies the allegations. lots more ahead on the trading day to come. this is bloomberg. ♪

shery: for only the second time in the state's history, californians will decide whether to out there governor in a recall election. it is a test for democrats before next year's congressional midterms. even the 2024 presidential campaign. president biden urged voters to send a message. >> in the eyes -- the eyes of the nation are california. the decision you are about to make will have a huge impact on california and reverberate around the nation. quite frankly, not a joke,

around the world. shery: joining us is mike adorning. democrats seem to be framing this as a power grab by trump supporters. is it working? >> the polls show it is working well for them. you would not be surprised by that. california is heavily democratic. the new some people and democratic party want to make it a debate about a trump american california versus a democratic vision. the people trying to get gavin newsom out were trying to ride discontent over the pandemic and other things. haidi: what are the broader implications as the biden administration tries to push its agenda? >> mostly, people in washington, because of the strong leap for gavin newsom, expect he will

prevail. if it happens, it is not likely to have a big impact on the tax debate. that is factored in. if there is something where it is better than expected, it might give president biden more leverage in the negotiations. conversely, if the unexpected happened, and he were to fail, it would be a blow and unsettling to democrats. i don't think it would have that big of an impact on the overall budget negotiation from tax talks, because most democrats realize it is important for them to have something going into the election to show they rallied supporters and prove the independence they are delivering. no matter what, it is crucial to democrats'election prospects. shery: mike dorning, thank you

for the wrapup and the tax implications. we continue watching the tax debate unfold in the u.s.. one prominent voice has been across io cortez. she says the big message at a very fashionable event, it has the message tax the rich. she is being vocal about this. the dress was designed by aurora james, which donate about 15% of shares. 15% to products made by black-owned businesses. she wants to pay for more social services, the wealth gap by using taxes from the rich. haidi: given the theme we saw, the revival of the american reawakening, the american dream,

it is one of the first major red carpet events in the u.s. since the pandemic took hold. it was interesting this was the platform she used. we heard commentary that it is on brand for her, clever, striking, and a way to make an impact on the red carpet, where you compete with other dresses, looks, and celebrities. she really did stand out. let's get you the first word news with vonnie quin. >> treasuries rallied after an increase in inflation. more flexibility when it comes to pulling back on stimulus. consumer prices rose 3% from july. the smallest advance in seven months. edging down to 5.3%. cpi climbs to 10 basis points, refracting the climbs in the prices. china will make the first sale of oil from its strategic

reserves on september 24. the national food and strategic reserves administration said it will be for about 7.4 million barrels of crude. china announced the move last week. an unprecedented to lower prices. casino stocks dropped in the u.s. after macau revealed plans to step up scrutiny and increase local ownership. beijing wants to clampdown on money laundering and outflows in the world's biggest gambling hub. the president aims to have operators and suggested raising the minimum local shareholding under the minimum required 10%. tropical storm nicholas is lashing the u.s. gulf coast with torrential rain that can last for days. the storm dealing a new blow to the energy industry two weeks after hurricane ida. nicholas made landfall in texas, up to 110 kilometers per hour. life-threatening flash floods

are expected across the deep south over the next few days. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quin. this is bloomberg. shery: investors are awaiting china's august activity data due this morning. bloomberg economics says the numbers will likely get worse than better. let's get more from enda curran. what are we hearing with retail sales? >> i think there will be something of a two speed recovery. we do see it on the consumer side. over the months of august due to the covid outbreak. a domestic travel fell through the floor. domestic tourism came to a standstill because of trying to contain covid. we know there will be a spillover effect in the broader terms.

at the same time, auto sales have been stopped. housing sales in the key to one cities have come off the ball. consumer numbers expect to point to ongoing something. the numbers continue getting worse before they get better. shery:shery: industrial part -- haidi:haidi: industrial production, what about the manufacturing side? >> holding up better than expected. it is about high commodity prices, supply chain. getting stuff made and getting it to key americans. the external stories continues to go gangbusters. export numbers really put to bed any notions the manufacturing sector was throwing down. it is expected to show the activity going ok. softening in pmi. softening in a new order books for exports. the overall industry production side is holding up. that is key to what is going on on the consumer side of the china economy.

haidi: enda curran, ahead of the domestic data later today. we will get more analysis from the chief china economist from ubs and barclays in the coming hours. in the china adjacent story, iron or dropped to the lowest point this year. investors awaiting the key numbers. it may be ongoing production curves. let's bring in james thornhill for more. when it comes to the pullback in iron ore prices, is it down to the steel mill curves? >> yes. that is the main factor right now. unwanted milestones as iron ore producers are concerned. pullback extended $100 from the record high we saw back in may. levels around 120. according to analysts at bloomberg intelligence, they could be down around 10% over

the august to december period compared to the previous year. it gives you sense for how much it is being paired back. anecdotally, steel mills are holding back on purchases of iron ore. expecting the price to drop further. the rest of the year, we are looking at a fall for iron ore prices. not a straight line, but the trajectory looks well set. the question for the market is what happens in the new year when the curves will be east as we start the new year, which happens in china. the demand might come back in. that is the hope iron ore produces. shery: what about copper? labor tensions in chile seem to have eased. what is the outlook? >> copper is interesting. chile is the top producer of copper. they pared back their price forecast for the next. it has been on a strong run.

one over 10,000 a ton. we have seen weakness. action that has blighted producers in recent time. it seems to be easing off. those issues seem to be resolved. at a time when demand might taper a little bit. the chinese demand is being done to peak. with the fed getting off to taper. the outlook perhaps in the short-term is not strong as it was. it has been reflected. long-term copper fundamentals look good. still has the narrative of being a key driver of the key -- clean energy transition and important in wiring and things that go into that. shery: the narrative really sending metals higher. james thornhill. coming up next, the ceo with the

largest digital exchange acid joining us. common misconceptions about crypto trading. we also take a look at regulatory headwinds. this is bloomberg. ♪

shery: breaking news out of microsoft.

authorizing up to $60 billion in share buybacks. it would include a quarterly dividend of $.62. shares and at 66% regular cash. november 17, payable december 9 to shareholders. they increased regular quarterly cash dividend to $.62 from $.56 per share. dividend declaration date is september 14. authorizing up to $60 billion in share buybacks. earlier today, morgan stanley raising microsoft's price target to $331 because of a potential for an increase of 10% or more in their quarterly dividend. we see the dividend being raised to $.62. microsoft trading .4% higher after hours. $301 level.

haidi: taking a look at the crypto space. industry growth leading to increased interest from regulators. this is something she welcomes. the largest digital asset exchange in australia. the ceo joins us now. continuing to watch the efforts of the fcc in terms of the regulatory oversight. regulators, are they getting it right, or is it a reaction of fear, rather than a regulatory environment that is protected about conducive to crypto innovation and trading. >> thank you for having me. that is a great question. there is a concern regulation can become a bearing and squeeze the innovation we will push forward within the crypto industry. if we look at what they put

forward, they have stated within the document they are looking to regulate innovation rather than innovation out. that has become the rhetoric for the industry to cling on to, suggesting they are open to the possibilities of what it has become with digital assets and digital finance. compared to yesterday, the rhetoric is different quite strongly. in australia, we take heart from a recent select committee and what they are doing. our hope would be that progressive framework would be good locally. haidi: are you hopeful that is the approach that could be taken in australia? what is the risk of countries being left behind with the most progressive being taken in places like singapore and dubai? >> there will be an absolute

shame for australia if we don't take this bull by the horns and come forward with something tailored to the aspects of cryptocurrency and decentralized finance. when we look over neighbors in singapore and see how they have embraced the community to work with them and put forward and come up with forward-looking ideas. we are heartened, because we know the committee members in that panel have been very much engaged with the community and taking all of these into consideration. it is optimism that we look at what to come in october with the upcoming report. do you have -- shery: do you have a sense of optimism looking at investor behavior in australia? what is sticking out? >> on the theme about regulation, 28% say one of the biggest regulations they face is

lack of regulation locally. that is having a knock on effect in terms of the profits, etf's and so forth still not possible in cryptocurrency, but also financial vices. -- financial advisors. they cannot advise for cryptocurrency. no regulation is in place to recognize it for financial products or products they can advise on. so there are other effects. while the majority of respondents in the survey we conducted understood and recognized volatility is a feature of cryptocurrency, you still need to be able to properly manage and mitigate the risk, something a financial advisor can help with. haidi: caroline bowler, great to have you with us. we are getting news when it comes to the southbound bond connect in china. the pboc can unveil the southbound bond connect as early

as wednesday. that is according to reporting from hong kong media. we have been looking at this highly anticipated start of the bond link, saying it could financially ease fund inflow and yuan appreciation pressures for the broader economy. the pboc could be unveiling the southbound link as soon as wednesday. coming up next, we hear from the investment from -- this is bloomberg.

sophie: you're watching "daybreak: australia." morgan stanley global central bank monitor rates lower bound for some time. ems turning to hiking. our b.i. tightening the first quarter of next year. china seeing easing. the pboc will cut to rrr by about 50 basis points. switching out the board, on the monetary and fiscal policy accommodated outside of the u.s. momentum starting to shift toward non-us equities, drag on u.s. stocks from risks. goldman recommends staying overweight on europe and japan in the next three month, with more bullish positioning for

japan in particular. haidi: softbank putting a big bet on latin america's tech industry. adding billions for investments as a gains population among foreign venture capitalists. softbank international's ceo marcelo cluare spoke with caroline hyde. >> what has surprised us the most is it is as good as any part of the world. the business models deployed in china, india, and the u.s. are booming in latin america. it gives us a competitive edge that we have seen the art of the possible markets, and now we see the high quality entrepreneurs launching these great companies. so far, we have deployed -- as of last quarter, $3.5 billion in capital. returns have been exceptional. 105% iri on a growth basis.

so it makes us one of the best-performing funds in softbank, and a lot of the venture funds. based on that, we have seen the need for venture capitals, as we like to call it, vision capital, is needed in latin america. that is why we have decided to double down in the region, just to fulfill the investment needs for this year. this year, we plan to deploy $5 billion in latin america. >> build it and they will come. you have done it, and others are putting money into the area. do you think valuations are as appetizing? >> valuations are always a hard topic. the type of growth we are seeing in our latin american portfolio companies is great. we believe valuations are right where they should be. you see a lot of growth, latin american companies ipoing in the u.s.. one of our portfolio companies a couple of weeks back. are they are worth $5 billion today. my prediction is next year will

be the most important year in latin american history of ipo's. we expect ipo committee from latin american technology companies in u.s. markets next year. >> how long are you committed to the companies? it will allow you to be private and public. another couple of years, do you have any sort of guidance on it? >> the way we like to think is the latin american fund is different. we are a single lp. we are softbank. we have no rules in terms of how long to hold an investment, how small an investment should be, pride and public. so close to 50 companies we have invested, public companies, private companies, investment, early stage, growth, digital transformation. we made a large investment into televisa, univision merger. to compete with netflix in the spanish-speaking language. that is the beauty for latin american fund.

we are able to invest in anything related to technology. when we have a public company, we look at it like any other private investment and the potential growth of that company, in terms of growth of the business and potential valuation. and we look and hold it. softbank is known for being patient capital. so we are good, in terms of holding investment for as long as we believe they will break or meet with 30%-30 5% iri. haidi: marcelo claure speaking with caroline hyde in that exclusive conversation. valuation has almost tripled to $14 billion in five months, making it the world's fifth most valuable start up after bytedance, stride, spacex, and current a bank. let's get more. this is a huge jump in valuations for this australian design platform. what is behind the momentum? >> it is a massive jump.

not only tripling the last valuation, but if you go back, with 2019, the company valued at $3.2 billion. extraordinary, in terms of the valuation. it says a lot about the business , it is revenue positive. you look at the list of investors, some pretty blue-chip names. not only in terms of venture capital, experience venture capital, but late stage investors and other blue-chip investment funds that can start playing that late stage venture capital kind of way. especially being an australian company, getting u.s. investors, but local appetites. there has been secondaries where they look at pension funds that want to do more in the tech space. shery: what is driving growth

for the business? >> it is kind of selling the show wills, where they eat -- shovels, where it is becoming more of a digital economy and more startups, and entrepreneurs builds those and does enterprise stuff. people not just starting their own websites and helping design of that. it is launching startups, but nonprofits, remote learning collaboration and digital teams. even really big enterprises are using this. 60 million active users. it is a pretty diverse area and becoming kind of the main thing in this space. shery: harry brumpton. coming up, australia's economic recovery with richard wagoner. and we will get more insight on markets from erin robertson. that is it for "daybreak: australia."

daybreak: asia is next. this is bloomberg. ♪

(announcer) back pain hurts. you can spend thousands and still not get relief. now there's aerotrainer by golo. you can stretch and strengthen your core, relieve back pain, and tone your entire body. (man) and you're stretching your lower back on there. there is no better feeling. (announcer) do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me. it works, 100%. (announcer) find out more at aerotrainer.com. that's aerotrainer.com.

haidi: welcome to daybreak asia." i'm haidi stroud-watts in sydney. sophie: i'm sophie cameroon in hong kong. we are counting down to the major open. shery: good evening from new york, i am shery ahn. asian stocks set to follow wall street lower as growth concerns linger. treasuries jumping on weaker than expected u.s. inflation. apple's iphone launch