paul: good morning. banks just opened for trade in sydney. shery: our top stories this hour. asian stocks set to rise after robust corporate earnings helped wall street to its best date since march. big u.s. banks report surging revenue. morgan stanley's boss calls for

the fed to hike, saying money is to available right now. -- too available right now. more fed officials say inflation is broad-based and may not be transitory. paul: we have just open for trade in sydney. the asx higher by 0.25%. let's see how things evolve over the next few minutes. new zealand has been trading for a couple hours. still in positive territory, higher by 1/5 of 1%. we saw a very good day for u.s. equities. the s&p having its best day since march 5. the dow snapping a four-day losing streak. the s&p futures suggesting that rally will roll on for one more day. higher than 1/10 of 1%. looking to a brighter open for japan as well when we get going at the top of the next hour. shery, we did have a very good day for bank earnings as well. windfall results.

we have seen this trend continuing. morgan stanley, j.p. morgan, bank of america all saying the pipeline for dealmaking is remaining very healthy across all sectors and all regions. citibank saying it is appointing more staff and we could see a commensurate pop in compensation. shery: really setting the tone for this earnings season. we continue to hear more concerns about inflation that it may not be as transitory as people expected. morgan stanley's ceo coming out and saying the fed should hike rates. take a listen. >> honestly, and the next several months -- in the next several months, i think the market digested the fed will have to move not just on tapering, but rate increases. with 10 rate increases away from what could considered -- what would be considered normal, bringing it up over the next year is not a crisis and not unexpected.

shery: he is pointing to supply chain bottlenecks, not to mention surging commodities prices, saying that would really lead to price pressures perhaps not being transitory. let's delve into the parade of bank earnings and bring an bloomberg's su keenan. we see this windfall when it comes to dealmaking and stock trading. su: u.s. banks raking in the cash due to these deals taking place. on that level, we saw morgan stanley and bank of america lead the pack. you can see that reflected in the big hikes in their intraday stocks. wells fargo an exception. morgan stanley crushed the estimates. the division took in $2.9 billion, a 67% jump. citi's trading beat estimates for a fifth straight quarter. that helped citi beat in a big way. we are calling this chart

trading pressure. while some banks beat year-over-year, j.p. morgan was actually under what it did last year at the peak of the pandemic. it was just on fire. we saw weaker bond trading. that factored in. the citi ceo said recovering from the pandemic continues to drive cooperated consumer confidence. what these ceos think about the economy was one of the key topics on the conference calls. she believes this is creating active client engagement, which she says explains the strong investment in equities. there was a push back on citi's bonus program, but the ceo held firm. she said bonuses are important for retaining top talent. you might recall a story earlier in the week that there were these $5 million bonuses for her key lieutenants without specificity on what the targets

were. she is in a very active plan to remake the bank and was very strong on the call, analysts say. paul: those headlines from the bank earnings dominating the agenda, but what were other highlights? su: bank of america's ceo echoing the views of morgan stanley's ceo, that inflation not going away. they were a leader in terms of blowing out numbers on investment banking. they also interestingly noted a huge jump in customers moving on to their mobile and digital platforms. they saw 70% of households use these digital platforms. one is called zelle, another is a digital assistant. they are leading the way and getting customers to get onto these platforms. wells fargo also a big beat. it is making headway in resolving various regulatory

concerns. that was an issue for this bank. he -- the cfo said it will probably take several years to resolve the issues before it, but they see progress. paul: bloomberg's su keenan watching those bank earnings. we are hearing more divergence from fed officials about whether inflation is transitory or persistent. kathleen hays is here with their latest remarks. kathleen: this diversions among fed officials about persistent versus transitory continues. let's talk about commodity prices. how do you know it is transitory? commodity prices are at record highs. those will go into the prices of outputs, which will go into the prices of retail goods. when will that peak and go down? he said he thinks there is a risk that inflation will stay stubbornly high. >> while i do think there --

while i do think there is some possibility this will naturally dissipate over the next six months, i would not say that is such a strong case that we can count on that happening. i would put 50% probability on the dissipation story and 50% probability on the persistent story. kathleen: he also said he thinks the risk that the fed will overshoot on inflation -- it wants inflation above 2%. does it want to stay at 4%? he thinks the fed should end its taper in the first order of next year so that it is ready to hike rates sooner than it thinks if inflation does stay high. the other end of the spectrum is the san francisco fed president. premature to discuss rate hikes, she thinks. this will not solve those awful neck problems that we can't control. she said, tapering is not

tightening, it's just dialing back support. she was doing an interview with cnn when she said that. tom barker saying inflation does look more broad-based. there are more categories seeing those price hikes. he adds normalization and tapering will curb inflation expectations moving higher. the president of the philly fed speaking this evening in the u.s. he said that he doesn't expect rate hikes until late 2022, or even until early 2023, unless something unusual happens on inflation. i would say he is sort of middle ground as well. clearly it is the data that will determine what the fed ends up doing. let's all remember that. they don't just set something and not change their mind. inflation numbers will determine the timing for all of these things. shery: kathleen hays with the latest from the federal reserve.

inflationary pressure being fueled by those rising commodities prices. we continue to see the global energy prices, china bowing to ensure power supplies for factories. that is even with energy needs set to increase as winter approaches. let's get more with our greater china executive editor in beijing. we continue to hear this chorus of policymakers in beijing trying to soothe everyone that everything will be ok this winter. >> i think there is concern that peoples' homes will be heated over the winter. that is why you saw premier li keqiang visit a notable manufacturer and promising the manufacturing would get the electricity they need to continue producing their products. that is after we saw manufacturing pmi contract for the first time since the start of the pandemic in september.

we will get gdp for the third quarter on monday. economists generally expect we will see a notable slowdown from the second quarter. there is concern that the commodity prices, the energy crunch -- that will lead to slower growth. paul: the president looking to set up a global innovation center for sustainable trends. can you give us the details on this? john: it will be an international center. it will focus on green, sustainable, climate friendly development of transportation. we don't have many details beyond that. we do see this developing trend of china taking steps to set itself up as a global leader in terms of fighting climate change. we have this transportation idea. we had xi jinping earlier announced that china would be building this huge 100 megawatt -- gigawatt alternative energy facility in the western desert.

as much as the capacity as all of india right now. earlier, china saying it would no longer fund coal projects outside of china. taking steps to be a leader in this space. paul: let's get to vonnie quinn with the check of the first word headlines. vonnie: the french finance minister says the u.s. and european union are not on the same page when it comes to dealing with china. one official says the best way to engage with china is a big question for the coming decades. he spoke to bloomberg television on the sideline meetings in washington. >> the united states wants to oppose china. europe wants to engage china, so there is a difference of view we need to discuss. vonnie: president biden says health officials will soon decide whether to offer pfizer and biontech shots to kids.

moderna and j&j boosters may be approved within weeks. an fda advisory panel approved additional doses of moderna for older and at risk people. it will review j&j's application for booster shots friday. thailand will allow more visitors to skip quarantine. it is a bid to revive the country's struggling tourism sector ahead of the year end holiday season. a night curfew has also been cut by two hours, now covering 11:00 p.m. to 3:00 a.m. global news 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: still ahead, store closures and supply chain disruptions hit retailing's

bottom line. up next, we will ask the pepper international ceo why she is cautious on oil. this is bloomberg. ♪

>> the supply chain interruptions, natural gas and other things have clearly been real. some of that is temporary., but not allof it i think we are in a period where inflation will force the fed to move aggressively than they are predicting. >> right now that inflation is not temporary. as people worry about it permanent, it will conflate that up. >> inflation is rising at a higher pace than we thought it would be a few months ago and certainly will be there for a bit longer. we are seeing a bit of pressure

in wages, but not across the board, really oli and certain pockets -- only in certain pockets of the company. paul: there are some of the big u.s. bank leaders speaking. let's bring in carol pepper, founder and ceo of pepper international. transitory becoming a dirty word when we talk about inflation. where do you see prices over the coming months? carol: i think this little bit of inflation we have is a good thing. we want to see people buying, we want to see the economy moving. yes, there was a bit of inflation, but i don't think it will be enough to cause any massive spike in interest rates. i'm sure within six months you will see a lot of the supply chain problems ironed out. six months from now, next spring, things should be fairly benign, where the fed wants to be around 3%. i think this is a tepper race bike around 6%. -- is a temporary spike around

6%. it means we are alive and things are happening. paul: it is inevitable that rates will approach something looking more like normal. we are seeing blowout results from the big banks in terms of earnings. what will rising rates mean to future loan growth? carol: future loan growth? i think, again, many large corporations absolutely piled on cash and are still working it off of their balance sheet. they are still using cash to do stock buybacks rather than capital investment. i don't think it will be bad. you think rates are going up, you would rather get your loan today rather than in the future. i have families with offices. we see the economy, the global economy is coming out of this entire pandemic phase pretty well with a healthy amount of inflation, not a runaway amount of inflation. it is very positive for where we sit.

shery: as we see a more moderate trend, the fact that u.s. consumer inflation expectations have risen to record highs according to the latest new york fed survey, is that concerning and the fact that consumers might be willing to -- be unwilling to spend as much? carol: consumers still are not traveling that much, so there is a lot of discretionary income that will still go into home-improvement. there are a lot of people who work to find that dream home and move. there is still a lot of holiday spending that can be done this year. i don't see that as being a problem. it would affect consumers. their credit card rates went way up, but the consumer has done a great job in paying down their debt. consumers are in a good position right now to have fun spending. once they get there booster shots and hopefully covid rates

continue to go down, we should see consumers coming out of their shells and doing even more. i think consumers will be fine. shery: as we see more demand and more people traveling, would that not mean more positive for oil? yet in your notes you say you are more cautious on oil. why? carol: i am cautious on oil because i think it is a short-term play. let's say another year of these high prices, i think it is caused by the supply chain problems. i think the entire planet is getting extremely serious about switching to renewable energy. so when i am cautious, certainly in the next few months you will continue to see high oil prices, but if you are a five-year investor, look at renewables. that is where you will make your money over the next five to 10 years. shery: how does the strength of the u.s. dollar play into your commodities calculation? carol: i think the u.s. dollar will probably continue to get stronger because the economy is recovering nicely.

in terms of commodity prices, it depends on if you are a buyer or seller. i basically think in the long run we will have a very benign period. we will be positive for growth stocks, which i am always placing my bets in, frankly. two third growth, one third value split in the u.s. equities position. i think the growth areas of the economy will continue to flourish. we will keep having this hybrid economy where you are partly at home and partly at work. technology will play a greater role in every aspect of our lives. genetic medicine, biotech etc. is coming down the pipe with wonderful new innovations to help us. growth is where the game is at. --innovations to help us. paul: i know you are a big bull on the fangs as well, but they are very expensive.

will these prices look cheap inn two -- in two years? carol: they will absolutely look cheap. the big companies that are doing well will continue to get bigger. i don't think they will break up amazon or any of these companies. even if they broke them into a number of companies, all of those will get large as well. it does not mean we are not going to have dips in the markets. you can miss. there are people 10 years ago who were saying the internet stocks on amazon was too expensive. look, they missed over the last 10 years. -- look how much they missed over the last 10 years. don't let that stop you from a fundamentally good buy, especially if you have a five to 10 year timeline for investing. get into those good names and hold onto them. you will be glad you did. paul: carol pepper, pepper

international ceo. want to get you an alert on the bloomberg terminal. news we have been waiting for in australia. new south wales to end hotel quarantine for vaccinated travelers on the first of november. this has been viewed as a critical step in terms of reopening the state to the rest of the world. that would mean australians stuck overseas would be able to come home much more easily, and vaccinated australians would be able to travel and return to sydney at least. the vaccination rate in new south wales closing at 80%, but lacking across the rest of the country. hotel quarantine ending for vaccinated travelers in new south wales on november 1. quarantine at home will become the new norm. more to come in a moment. this is bloomberg. ♪

paul: keeping an eye on some of the movers in australia in the early going. we have been trading 24 minutes. one of the worst performers at the moment off for percent. this-- off 4%. we have seen shares declined the lowest since september 2. one of the worst performers on the asx today. pendal group falling after fourth-quarter net outflows were a little disappointing. platinum asset also declining. treasury wine also falling after a first quarter trading update. treasury wine also featuring today in australia's diversity report for the undignified distention of losing a female member of the board. -- distinction of losing a female member of the board. shery: other companies we are

following, tsmc saying it expects 2021 revenues to increase by about 24% in dollar terms. that is faster than earlier projections as the global chip shortage persists. the new guidance came alongside earnings and profit margins that exceeded analyst estimates. net income for the third quarter rising to $5.6 billion. fast retailing issued a full-year profit outlook that falls short of expectations. the owner cited potential disruption from store closures and supply chain issues. that is despite easing pandemic research and's in japan and other key markets. profit is on track to hit $2.4 billion for the year ending august 22. it still misses analyst forecasts. microsoft is shutting linkedin china, citing a significantly more challenging operating and

compliance requirement. the service has about 52 million users. it makes linkedin the last major u.s. social network to pull out of the mainland. the site says its new china strategy will be focused on job hunters. citigroup's earnings topped estimates and included a 40% jump in equities trading revenue. the push of units of about $1 billion for the third straight period. overall profit jumped 48%. an m&a boost surged sickly 5% to -- 65%. third quarter profit soared, helped by the release of reserves set aside for pandemic loan defaults. morgan stanley's ceo says it is time to prick the bubble as he calls for the fed to hike rates. our interview with james gorman is next. this is bloomberg.

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shery: take a look at the markets trading right now. we are seeing the asx 200 gaining 7/10 of 1%. materials and tech stocks leading the gains. kiwi stocks gaining for a third session. the kiwi dollar becoming the best performer among the g10 currencies. commodities currencies gaining ground. the aussie is around that five-week high. nikkei futures up. the japanese yen a different story.

around a three year low versus the u.s. dollar, the worst performer among the g10 in the past month. that is negative -- that negative yen trend getting more intense. the powerful commodities rally does not help the japanese yen. u.s. futures adding to the best day since march that we saw in the new york session. better than expected earnings. banks really doing pretty well. morgan stanley's investment bankers scoring their best quarter ever. ceo james gorman spoke to bloomberg about the earnings report and shared his list of worries as we close out the year. james: we continue to see share gain and extremely good performance across the whole investment banking sales and trading platform. i don't expect the investment banking pipeline to slow down. it were going -- it remains robust. you will see more volatility in the fixed income space, which we

will participate in. there is a lot of stuff going on right now. shery: let's speak to those challenges for a second. you said during the earnings call earlier to watch out for volatility. many of your peers have been worried about interest rates. what are you worried about as we start to close up this year still? james: i just said you have to be mindful. we are seeing sharper movements in the market by the day. some of the earlier bubbles around spacs have gone off the boiler a bit. there is talk of taiwan, etc. our job is to be mindful and have one hand on the accelerator and the other looking for where the big potholes are. that is why i am being cautious. in the next several months, i think the market digested that the fed will have to move not just on tapering, but rate increases. with -- we are 10 rate

increases away from what would be considered normal. bringing it up next year is not unexpected. sonali: you said not a crisis, so do you think a lot of people worried about the next correction in the market -- are those fears misplaced? james: no, people are always worried. markets go up and down. when you've got basically free money, record fiscal stimulus, global synchronized growth, of course the market will do well. whenever are they not going to do well? if this environment does not make it happen, none will. that does not mean it will go in a straight line forever. you have corrections. you have reassessments. the investor psyche changes. i am not expecting some major crisis. nothing like the shocks through the last 30 years that were really material. sonali: do you see this wage pressure on the industry lasting for a while? what is that going to do in terms of the ability to control expenses?

james: i really don't think it will be that important to what we do. this industry understands when markets are good, they are getting paid better. if you don't perform, it goes down. there are some natural hedges within these kinds of businesses, but the traditional companies don't have them. my focus is on making sure we pay our people well for great jobs done. that is our focus. it is not an anxiety around wage inflation for this kind of company. very different industries affected dramatically, but what i see is real wage inflation around the globe. >> you seem confident about the trajectory we are on. you see bumps in the road. you don't see inflation getting out of control. you think this is something we can manage our way through? james: that is my assumption, that the fed will manage. they will have to bring rates up. my prediction for a long time, i

have been much more hawkish. i would have brought rates up certainly by the first quarter of next year. they have a lot of capacity to move. i think you have to pricked this bubble -- prick this bubble a bit. i am not a buyer of this story that the inflation story is all transitory. wage inflation is real. the supply chain interruptions, natural gas and other things, have clearly been real. some of that is temporary, but not all. i think we are in a period where inflation will take up. i think it will force the fed to move more aggressively -- move more aggressively. you saw the dots in the last fomc meeting. that move to nine dots at the next meeting. we are seeing it through the fed's own numbers. paul: morgan stanley's ceo james gorman speaking to our colleagues guy johnson and

sonali basak. let's get to vonnie quinn for the first word headlines. vonnie: more fed voices are sounding warnings on inflation. the richmond fed president said prices today are more broad-based and it is time to have a conversation about tapering. st. louis fed says inflation is rising at the fastest pace in 30 years and central banks can't count on it being transitory. >> while i do think there is some probability this will naturally dissipate over the next six months, i would not say that is such a strong case that we can count on that happening. i would put 50% probability on the dissipation story and 50% probability of a persistent story. vonnie: chinese president xi jinping says his company will set up a global innovation center for sustainable transport. xi pointed to his country's

successes and transport infrastructure, from high-speed railways to large aircraft. it is the third speech in less than a month to a u.n. audience on green issues. tourists for bali are reopening its doors. no international flights are scheduled just yet. bali is waiving fees through the year end. government officials say it may take three weeks to a month to see arrivals return from abroad. a partially destroyed banksy painting sold for a record $25.4 million. the piece was partly shredded as an artist prank after it came to auction in 2018. renamed "love isin the -- is in the bin," it became a cultural phenomenon. it is the most expensive work by banksy effort to sell at

auction. global news 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: we will be watching fast retailing at the opening. the owner issued a full-year profit outlook that fell short of expectations. bloomberg intelligence's senior advisor joins us now. what led to this fall? what does it mean for the revenue goal then? >> there have been disruptions on the covid front across japan, as well as markets outside of japan, particularly within asia. you are going to see some of the impact of these disruptions coming through when the company announced their first quarter results from september to

november. notwithstanding, we are also seeing slowdowns in mainland china, consumer sentiment, which has affected uniqlo sales. through the entire year, uniqlo sticked to its policy of refraining from excess discount. the consumer sentiment in mainland china means the entire propensity to buy food price items under uniqlo, perhaps it is not there. paul: let's talk more about that weaker sentiment on mainland china. how will that affect fast retailing's profitability? catherine: the company will continue to spend on marketing as well as improving its logistics support for its e-commerce businesses, which the company is still looking to grow

in the new fiscal 2022. while we have seen a slowdown in sales, the company will probably maintain the increase in expenditure within the country. we will see that impacting the profitability of mainland china in the first half of this year. bear in mind that mainland china is also going into the moment of the beijing winter olympics. barring tighter restrictions in anticipation of the games coming up in february, i think that may affect some of the flow app stores, particularly in the state capital city. that is all going to weigh on the mainland china margins in the first half of fast retailing's fiscal year. paul: bloomberg intelligence senior apac consumer reporter.

qantas up better than 3.5%. this on the news that the state of new south wales will be scrapping hotel quarantine for fully vaccinated travelers from the first of november. so this is an important development for stranded australians wanting to get home or australians who wish to take a holiday. we will now be in a weird situation where you can fly from sydney to london with no issues, but you won't be able to fly from sydney to brisbane. qantas up 3.4%. shery: we are seeing those strange patches of different regulations around the world, so not surprising. next, big social issues drive major shifts. shutterstock's global head of diversity and inclusion joins us next to discuss. this is bloomberg. ♪

shery: a new report on diversity in content and marketing shows global events, including black lives matter, are driving big shifts in the sector. let's discuss with the shutterstock global head of dei. it's great to have you with us. what are you seeing in terms of how brands are changing their communication strategies given these global cultural movements? >> i'm sorry about that.

thank you for having me. we are seeing that with the markets we surveyed, more than half of them thought it was important to show diversity and inclusion in the content they produce. more than 63% of them thought the black lives matter movement and the stop asian hate movement sort of impacted how they chose content for their brands overall. we also saw there was a trend in terms of representation of women, including more women. that was the second-highest growing number in terms of representation in the content they produce. we also found that in spite of this progress, which is really good progress, that 40% of the marketers we surveyed thought it was hard to show their brand and represent hteir brand -- their brand using diversity and ethnicity in an authentic way. shery: why is that?

meeckel: i think it takes a bit of time to be able to research the audience is, understand the audience -- the audiences, understand the audiences and represent them in an authentic way. it will take time to think about how the does that mesh with their brand itself. we also saw, and the u.k. for example, leaving the eu was one of the things that impacted sourcing diverse content. we saw that in australia, for example, that the covid-19 lockdown impacted the ability to sort diverse content. -- source diverse content. in order to represent people, you have to understand the audience. you don't want to represent them in a way that is not authentic to their identity. paul: your research covered a

number of developed economies. you mentioned the u.k. and australia. here in australia, diversity and inclusion at all isn't very good. what is it like in terms of brand marketing? meeckel: in terms of brand marketing, what we have been seeing is more brands are thinking it is very important. the fact that two thirds of brands are seeing these global movements are impacting the decisions they made. with more than half of them thinking this is important, it is a step in the right direction. over the last couple years, people might have seen dei as an aside. what we have seen in the last year and a half is it is essential. that is what research is showing, that more people are thinking about it. i think that is a really good step in the right direction. paul: your research indicated the pandemic has had some effect on progress. can you explain that a little more? meeckel: because of the

pandemic, people in brands and marketers had to pivot quickly. the big-budget stuff they will usually spend on getting folks to move around and fly around and shoot really awesome content, they were not able to do that because of the pandemic. they had to be creative to source local content. they had to think about how they can use platforms like shutterstock. for us, we have a global contributor network of 1.8 million contributors. the interesting thing about that is that they are thinking about content through their own experiences. they are bringing their lived experiences to our website. that provided options for content creators to pull from without having to travel because of the covid-19 lockdown. content creators were also using archival content. shutterstock for example has

massive archival content that can be used. we are seeing marketers were being a bit more creative because of the covid-19 pandemic and lockdowns that existed. shery: the past year, we have also seen a marked fragmentation of the political and geopolitical landscape. how have local -- have global brands dealt with that? meeckel: earlier i said brands are thinking about social movements in the sense that they are forcing brands to evolve about how they think about their brands. brands in the moment are thinking about how do we evolve as a brand, keeping authentic to what our brand identity is, but considering what the global movement and expectation is, how do we mesh both of those? i think the research is showing that brands are thinking more about doing that and evolving their brand rather than focusing

on political situations. more social movements and incorporating that into their brand identity as an evolution of their brand. paul: the global head of diversity and inclusion at shutterstock. you can watch us live and see past interviews on our interactive tv function, tv . you can dive into any of the securities or bloomberg functions we talk about. you can become part of the conversation by sending us messages. this is for bloomberg subscribers only. you can check it out at tv . this is bloomberg. ♪

>> we are not exposed to a lot of retailers. retailers feel very bad, mostly driven by mainland chinese shoppers. s&p now i think really has come back, at least the top end of the s&p, the people that normally would fly around to tokyo, bangkok, paris, whatever, they can do that now. they are happy to find ways to spend locally. paul: that was the lan kwai fong group ceo. generation next looks at how prominent investors around the

world are adapting for the future. that airs on monday on "bloomberg daybreak: asia" at 7:40 a.m. hong kong time, 7:40 p.m. sunday in new york. shery: take a look at some crypto assets. a mixed picture. a little bit of pressure for bitcoin, down, but still above the $57,000 level for the first time since may. we continue to see the rally in cryptocurrencies, perhaps an easing of regulatory concerns. the sec may be approving for the first time the crypto assets etf. we are seeing the galaxy crypto index down, but this after adding 200% in crypto assets. an industry rallied since the beginning of this year. that would be around $2.3 trillion or so. given this gain and advanced in cryptocurrencies -- advance in cryptocurrencies and crypto assets, we are seeing alarm bells rung from all places.

we are now hearing from msci that perhaps the risks from crypto may be creeping into your portfolio because we already have so many companies exposed to this area. 52 companies or so with a market cap of around $7 trillion, whether it is coinbase or tesla. paul: these risks not lost on the crypto industry itself. regulators call, coinbase calls for regulation of its own industry. it has put together a policy proposal calling for the was openi -- for the u.s. to regulate this to trillion dollar market. coinbase saying it is trying to breathe regulators on their proposal, but does not expect these suggestions to be implement it quickly. regulation somewhat lagging at the moment. let's get a quick check of the latest business headlines. morgan stanley has become the first big wall street bank to

move on a eal after -- deal after reporting third quarter earnings. morgan stanley's profit rose 36% on the year with the investment banking division hauling and $2.85 billion, a 67% jump. microsoft shutting linkedin china, citing a more challenging operating environment. the service makes linkedin the last major network to pull out of the mainland. its new strategy will be focused on job hunters. boeing is said to have found faulty components in a 787 airliner. titanium parts will need replacing on some jets made in the past three years. boeing says the issue does not present any immediate concerns. the playmaker has more than --

planemaker works to gain approval from u.s. regulators. shery: take a look at some other markets trading right now. we are seeing the asx 200 gaining ground. we continue to see the leaders being tech and materials, at a two week high. gaining for a second consecutive session. we see the aussie dollar around a five-week high against the u.s. dollar. commodity currencies doing well. the kiwi dollar was one of top performers among the g10 currencies. kiwi stocks rallying for a third consecutive session. when it comes to nikkei futures, we are seeing some upside. we could see an extension of those gains we saw in the last session. the japanese yen one of the worst performers among the g10, at the 113 level against the u.s. dollar we see this negative japanese yen trend getting more intense,

given not only the divergence between the fed and boj, but a powerful commodities rally. kospi futures up more than 1% at the moment. we have seen two sessions of gains this week already. we might see some more gains at the open. this as we saw the korean won finally bouncing back against the u.s. dollar for the last two sessions. we had seen a lot of weakness against the u.s. dollar, falling below that 1200 level. we will be watching those markets as they get going in just a few minutes. paul: i want to check in on qantas again, rising 2.87% on the asx. pulling back from the earlier pop that we saw. this rise due to the news that new south wales's grabbing hotel quarantine from the first of november -- wales scrapping

hotel quarantine from the first of november. travelers that are vaccinated will be able to quarantine at home instead of hotels. this will be the norm going forward. that will provide a boost to the aviation sector. qantas rising. market opens in seoul and tokyo next. we have the details for you. this is bloomberg. ♪

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>> welcome to "bloomberg daybreak asia" from bloomberg's world headquarters in new york. i'm shery ahn. >> i'm paul allen in sydney. our top stories, apex stocks set for gains after robust corporate earnings temporary a lead -- delayed worries.

we hear exclusively from brian moynihan. chinese regulators to scrutinize a complex derivative that has become a top seller for brokers despite burning big european firms. shery: japan and south korea coming online. take a look at how they are trading. the nikkei gaining 8/10 of 1%. materials, real estate leading the gains, every sector in the green right now. this as the japanese yen holds at around the 113 level. we are talking about lows we have not seen in three years against the u.s. dollar. the worst performer among the g10 currencies in the past month. we continue to see these negative trends given we continue to see the divergence between the fed and the boj. commodities rally not so great for the yen. take a look at what korea is doing. the kospi up 8/10 of 1%.

we've seen two sessions of gains already so we are at the highest level in more than a week. we are seeing the korean won weak against the u.s. dollar but is no rebounding after falling below the 1200 level. this as we continue to see weakness in the dollar in the past few days. we continue to watch the moves in south korea and japan. of course, we have the be ok rate decision this week in korea as well and we are also waiting on coronavirus cases to get a feeling of what the pandemic, how it is spreading across the region. paul: let's take a look at how they are doing on the asx. a bit of strength, higher by 6/10 of 1%. it has pulled off a little since then. one of the weakest performers on the asx today is an investment company slumping 11%.

reporting outflows for the first quarter of $2.3 billion. a lot of volatility giving rise to rebalancing of portfolios. overall, stronger, better in new zealand as well to the tune of 1/5 of 1%. coming off the boil after a bright opening. the dollar, one of the best-performing g10 currencies. $.70 against the greenback right now. not much to change for the aussie. shery: we are seeing a risk on day across asia right now with asian stocks also at a two-week high. let's bring in the asia-pacific senior market analyst. we are seeing bullishness. we had small corporate earnings here in the u.s.. including banks can we expect this to continue?

>> it's been a good night because we had jobless data better than expected. we had a perfect storm, so to speak, along with strong bank earnings. i expect the momentum would run on asia today. going forward into q4, we have to get used to two-way volatility in various asset classes -- including equities as a reality of tapering. shery: it has been really interesting to see now the diversions across asia. at the start of the pandemic of course we had north east asia doing really well. it seems all of a sudden, southeast asian companies are catching up, especially when it comes to market gains, thailand and indonesia doing very well. >> i believe the reason for this is the number of us young countries involved in the commodities space such as malaysia and indonesia doing

well. also we've seen this week a slew of announcements about reopening of tourism across the region. vietnam, thailand in particular, indonesia with bali as well. i think that is all combined to boost asean. asean has almost been a defensive player as of late. i have noticed there appears to be a rotation into asean rather than moving strictly into cash. i expect that good news will continue. shery: just hold on a second, we are getting breaking news. president biden has signed a short-term debt cap increase to avert the u.s. default. we are talking about the debt ceiling bearden raised -- being raised by $480 billion. president biden has signed it into law. the only issue.

is that this is not really a resolution, we are talking about the treasury being over to december 3. the stopgap funding will be running out, not to mention the lawmakers will probably want to work on the infrastructure bill. let's go back to jeff. let me ask, what does this mean in december? things look good right now, but in a couple of months, this will again become an issue. how much market volatility can we expect? >> yes, this has been parked at the sidelines of late, a little bit like ever grande in china. i believe there will be some volatility toward the end of the year. it only kicks the can down the road for another couple of months. the democrats will have to use reconciliation to move this bill for the spending gap for the debt ceiling, and at the same time, they have to move this infrastructure bill through the

senate using reconciliation. there will be a lot of fixture congestion legislatively. i think there's a lot of risks surrounding both of those packages and a huge potential for disappointment, particularly with the infrastructure bill. so i believe this will increase volatility and uncertainty in the markets, because it would impact the outlook for the u.s. next year if that $3.5 trillion package gets hung up in the senate and does not make it to mr. biden's desk to be signed off by the end of the year. paul: jeff, during inflation seems to be a lot of -- top of mind for u.s. bank chiefs. in asia, we are seeing the monetary authority of singapore act preemptively. i was inflation causing you to rebalance your investments? >> i think this transitory argument has become how you define transitory. if you define it by two or three

years, that's an economic cycle, so it does not sound transitory to me. we see pressures coming through even before we saw this energy crunch hitting the northern hemisphere winter we have seen at the moment. i think this inflation will be around for a lot longer. you can look at the number of ships parked off the coasts at major chinese ports and in the u.s. there is anecdotal evidence everywhere. here in indonesia, they arrived five months late. this is not going to go away in the next few months. i think the energy crunch is particularly significant and has a huge knock on effect for the entire economic chain. i'm very keen to face energies, commodities, and stuff like food, things that consumers have to play whatever the price is, so they have high price elasticity, stuff that

people need every day regardless of the economy. i think it is a defensive posture that we are going into a period of quite high uncertainty into q4. paul: jeff halley, oanda asia-pacific senior analyst, thank you. let's go to vonnie quinn. vonnie: the french finance minister says the u.s. and european union are not on the same page when it comes to dealing with china and must discuss their strategic approach. the best way to engage with china is to declare for the coming decade of diplomacy. >> the united states wants to report china. europe wants to engage china. there is a difference of view. we need to discuss that because it is clearly a strategy question. vonnie: president biden press health officials will soon decide whether to offer pfizer shots to kids. if approved, it will be for

children aged five to 11. moderna and johnson & johnson will be authorized in weeks. an fda advisory panel has backed additional doses of moderna for older and at risk people. thailand will allow more travelers to skip quarantine. starting november 1, arrivals from the u.s., u.k., china, germany, and singapore will no longer need to isolate. it is a move to revise the struggling tourism sector ahead of the year end holiday season. the airways are addressed -- are adjusting flight schedules in response covering 11:00 p.m. to 3:00 a.m. ceo howard left nick has strongly denied using threats and intimidation to push through the $875 million sale of a counter owned mortgage lender to another company he controls. the billionaire -- they claim he

engineered the 2017 acquisition by bgc partners of berkeley point financial to misappropriate value from shareholders and line his own pockets. 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'm vonnie quinn. this is bloomberg. shery: still ahead, taiwanese chip markers among those hit hardest by the supply chain disruptions. credit suisse tells us why they are passing a peak in the crisis. up next, supply chain issues going into the inflation story. brian moynihan warns price pleasures -- pressures might be more than transitory. this is bloomberg. ♪

paul: the first round of earnings reports from the

biggest u.s. banks for dealmaking in treating revenue continue to soar higher. morgan stanley and bank of america reported big gains while citibank saw a surprising jump in equities trading. let's bring in the bill meant -- our asia reporter. what has been driving the strong growth we have seen? reporter: we are living through a golden era of dealmaking. these wall street banks are certainly capitalizing on that. has you say, a number of the banks posted record results in m &a and investment banking. among them, j.p. morgan, morgan stanley, bank of america. morgan stanley had their best quarter ever in investment banking with revenues jumping 67%, to $2.85 billion. bank of america saw a 65 percent jump. j.p. morgan almost tripled their advisory fees from a year

earlier. that was obviously a huge positive. on the other hand surprisingly, we also saw a massive jump in equities trading revenue. that was driven by the serious volatility we saw in september. citigroup for example posted a 40% jump in that area for the quarter. shery: loan growth has been a key issue for banks and they remain challenged. any surprises this time around? investors reporter: were certainly very concerned about that. we did see a couple of those stocks selloff pair that is because while they are doing really well in dealmaking, loan growth still has not come back. most people are still using those stimulus checks to pay down debt. while they are starting to spend a little bit, they are not yet borrowing money.

we saw consumer growth down and that was 2% as well as 5% at wells fargo, dropping a 15% and 7%. that is still a big concern. shery: our asia finance reporter. brian moynihan has joined other finance executives in warning that inflation is clearly not temporary. he spoke exclusively to bloomberg just after the lender reported third-quarter earnings that beat estimates, boosted by a record-breaking period for mergers and acquisitions. >> the activity levels and what goes on day today is bigger than before they pandemic. factual company -- the actual company has people working every day and we are going as we go. we are doing a great job for our customers, clients, communities, and shareholders. we are still part way to getting

people back at work and normalizing that. we had a town hall today with hundreds of teammates. it is feeling more normal but we have to push ahead. >> your business is fully back to the levels pre-pandemic? >> yes, production and credit cards for example, we did one million new credit card customers. that's as much as we did in 2019. if you think about the company, we are on an organic growth drive in 2016 and 2017, and we hit the pandemic in early 2020. just like the economy, it was on an upward trajectory. it dipped and then now it is back on the upward trajectory. year over year, loans are basically flat. on deposits, it has been 15% growth year-over-year. 12% growth. those types of numbers. on investment banking fees, those are hitting record levels. that will all bode well for us. >> you mentioned critical herds. that brings to my mind consumer

spending. you have an advantage. you do a lot of consumer spending in the country. what does that tell us about the economy? >> to talk about that, you have to apply context around it. this year at bank of america, we've done $2.78 trillion of money move from consumer accounts into the economy, by using a debit card, taking cash out of the atm, credit cards, moving money from p2p payments. all of the ways we move money. that has grown over the last year 20% plus. last year we were still in the pandemic, but last year this quarter, we were growing at 20% plus over 2019.if you look at it, we are growing 20% plus over the highest levels before the pandemic and growing. the month of october is up 13% to 14% so far. september was the biggest number during the year. across that, almost $3 trillion

of spending so far this year, and a record amount in the third quarter in our history. we are seeing it grow at double-digit rates. that's consistent with 5% projection this year with the economy, and the growth we've seen in the first half, and consistent with what we see next year for the growth in economy. >> how much of a vantage point do you have into the holiday season? terribly important for retailers.there is some expressed concern about supply chains. do you have any sense about consumer spending into the holidays? >> it will be interesting, because it is a big spending season, and it will be a year comparison of 2019 into 2020, skipping what happened in 2020. if you look into deposit customers, consumer businesses who look into their accounts, people with $2000 to $5,000 average balance, probably making $75,000 a year average, they grew from the month of august to

september by 2%, not annualized, just growth and they are up 50% year-over-year. they have more money to spend. now the question is, can they got the goods to buy? my guess is christmas, we will have more, we will get you this bike or this toy as soon as we can find it, but here's a picture of it, like we used to do when we were younger, or people will spend it on experiences. the overall activity levels are high and they may be impacted by the supply chain. it's not necessarily purchasing denied as purchasing that might be pushed out a little bit as goods and services get into the country. we have to get the supply chain straightened out. these ports have been an issue for many months. it's good to see the attention on it. that will ensure the first half and second half next year better, if the situation persisted. paul: the bank of america chairman and ceo brian moynihan speaking to bloomberg's david westin. something that has snared

european banks is drawing the attention of regulators in china. let's get the details from our asia finance editor russell ward. what are these products and why are they so popular? reporter: yes, so the derivative projects -- products promised a coupon linked to an equity index. . they are becoming popular because they promise double-digit returns as long as markets don't crash. brokers are offering them to wealthy chinese individuals and institutions. they are called snowballs in china because investor returns grow as long as they hold onto these contracts. investor support about $68 billion. they are not without risks. the past european banks have shown similar products. most recently, one lost over most $300 million selling similar products in south korea. shery: what are chinese regulators trying to find out? reporter: they want to know more

about the products and the risks involved. regulators recently have reached out to brokerages to gauge the risks associated with these products according to people familiar with china securities and regulatory commissions. the risks are becoming more pronounced now that china's economy and markets are becoming royal by things like -- roiled by crackdowns and a slowdown on the property market spurned by the evergrande crisis. small-cap index has dropped 8% since reaching a six-year height last month. one analyst told us reaching the trigger point for losses and the future is something that inevitably will happen at some point. shery: asia finance editor russell ward. you can get around above the stories you need to know to get

your day going in today's edition of "daybreak." it's also available on mobile and the bloomberg cap. customize your settings so you only get the industries and news on assets you care about. this is bloomberg. ♪

paul: a quick check of the latest business flash headlines. microsoft is shutting down linked in china following a significantly more challenging operating environment and greater compliance requirements. they only have about 52 million users, making it the last major u.s. social network to pull out of the mainland. the strategy will be focused on job hunters. fast retailing has issued a full-year profit outlook of falling short of expectations. the uniqlo owner cited potential

supply chain issues and that is despite easing pandemic restrictions in japan, china, and other key markets. on track to hit $2.4 billion for the year ending august 2022, the highest income since 2019, but it would still missed forecasts. tsmc says it expects 2021 revenue to increase by about 21% in dollar terms, faster than earlier projections as the global chip shortage persists. the new guidance came alongside earnings and profit margins that exceeded analyst estimates. net income for the third quarter rising 14% to $5.6 billion. shery: we will have more analysis on tsmc's results and the outlook for the trip sector with credit suisse's randy abrams next. we continue to see significant weakness for the japanese yen in trading, three year low against the u.s. dollar, the worst

performer among g10 currencies in the last month. we have some easing u.s. long yields, but we continue to see powerful commodities rally, also really weighing on the japanese yen. if history is any guide with this divergence between the fed and the boj, we could see even more weakness for the japanese yen. . in the past, we have seen 10% losses for the yen against the u.s. dollar. the korean won right now, a little bit of strength, at the highest in more than a week, but still low the 1200 level. the aussie and the kiwi losing strength after rallying in the previous section. the aussie jumped to that two-week high given the australian employment numbers tumbled for a second consecutive month. take a look at the broader markets because there is broad upside for equity markets with the nikkei gaining 7/10 of 1%. every sector is in the green. the aussie, the asx 200 also led higher by materials and tech

stocks. a little bit of pressure for kiwi stocks but still holding. the kospi gaining 7/10 of 1%. plenty more to come on "bloomberg daybreak asia." this is bloomberg. ♪

vonnie: more fed voices are sounding warnings on inflation. pressures today look more broad-based and it is time to have a conversation about tapering, according to a fed president. central banks cannot count on it being transitory. >> while i do think there is

some probability that this will naturally dissipate over the next six months, i would not say that is such a strong case that we can count on that happening. i would put 50% probability on the dissipation story and 50% probability on the persistence story. vonnie: chinese president xi jinping says his country will set up global innovations center for sustainable transport. he made the announcement to a united nations conference without providing details. he pointed to his country's successes in a transport infrastructure, from high-speed railways to large aircraft. it is his third speech in less than a month to a u.n. audience on green issues. tourist hotspot bali is reopening the first time since march 2020, however no international flights are scheduled for the island yet. bali's airport is waving

landing fees to airlines to encourage them to resume services. officials say it may take the three weeks to a month to see airlines return. a painting from banksy has sold for $24.5 million. previously known as "girl with balloon," the piece was partly shredded as an artist prank after it came to auction. renamed "love is in the bin," it became a cultural phenomenon. it traded for 18 times the last sales price. it is the most expensive work by banksy ever since that auction. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. paul: tsmc forecast fourth-quarter sales imagines they exceeded the estimates as chip sales remain robust. but production will likely

remain stretched through 2022. let's talk about the wider sector and bring in our guest, the head of time equity research at credit suisse. we saw some very strong earnings for tsmc, very strong demand as well. the supply chain constraints are seen as temporary, but how do you to find temporary? guest: thanks for having me on. to define temporary, i would say we are in probably the worst of the constraints now, and actually it should be coming off in the next few quarters. we are in peak season for consumer tech demand. that will ease. the other piece is vaccination rates in southeast asia has helped production come up. you see signs of improvement. not out of the woods. we are still facing issues with china power supply and we still have an issue with capacity.

it is difficult to get the materials to get all the chips, so there is still limitation. but i expect in terms of temporary that we should be seeing the worst and it should start to improve over the next two quarters. paul: one to two quarters is potentially optimistic because this is a sector that has had years of underinvestment. it takes a very long time to get a new chip plant up and running. how enduring will this shortage be? guest: i think there is reason for some optimism. one piece in the results, if you look at automotive, third quarter grew 5% sequential. they have actually ramped up production about 50% this year through the first half. that is really implying they have caught up. i say across-the-board companies have not caught up. one of the issues is in final assembly and test. quite a lot of packaging

facilities went down over the last couple months and it does take some time to recover that output. but i would say from the prioritization of other components like auto, that is helping. you are right, in terms of the peak of shortages, i think we go through that. but our expectation when coming off of the peak season, resolving some of these bottlenecks in the packaging and test, those things will help. that is why we look at one to two quarters later we will start to see some of the production lines coming back up. and i will point out, some areas in the past month we have seen results pick up, like pc's, into september, capping off fulfillment. shery: when you look at the global orders and all this data from global chipmakers, how much of it is a real demand and how much of it is industry stockpiling? because that could have very different implications once the

bottlenecks start to ease, right? guest: yeah, and that is what it is, you have two on both sides. a shortage now, but do we eventually have a glut in oversupply? in a way, those things are happening. there is a mismatch. products are not shipping and that is leading to some buildup of inventory. in a way, you're seeing pockets of the supply chain, like memory. they have indicated flowing of orders. the key indicator for chips, and why they are coming off the peak but still margaret outlook into next year, they are -- still moderate outlook into next year. even if smartphone units are not that strong, just shifting 4g to 5g is more capacity, more supply taken up. it still does not look to go from shortage to downturn with some of these content drivers for the chip sector. shery: we have seen the biden administration become more active when it comes to helping

the industry achieve more transparency, in achieving the supply chain constraints. the easing of these constraints. how helpful has this been? and do governments need to do more? guest: for governments, i think the action early in the year, some governments even worked with taiwan's boundaries to prioritize automotive chips. in a way, i think for government to get involved very selectively. the one thing i would say for the big push to try to address the entire supply issue by asking for data, it is difficult to follow that complex problem. by the time they get the data one to two quarters later, the supply chain could look different. from that, i think they should take a proactive approach to resolve the worst of the bottleneck. from bringing back capacity, that is where some of the government support, just to get their foot on the ground, and you are seeing that sign in

japan, in europe, in china. the government support does help geographically balance it out. that is why i say, it helps level the playing field to make it more economical to start out and build up a system for markets in short capacity. paul: when you think about the supply chain issues, also the increasing tension between china and taiwan, you see on shoring and near shoring becoming much more of a trend as we go forward? guest: i think the trend is there. it is a matter of how much they can do. at the same time, it is moving fast but they are adding a lot of capacity on the advanced node in taiwan. that is a risk. a lot of advance capacity will mitigate some risk, and the

trend will not reverse. we will see that continue inside the region. the customers are starting to request the supply chain assurance. shery: great to have your insights. coming up, morgan stanley's ceo says it is time to pricked the bubble as he calls for the fed to hike rates. our interview with james foreman is next. this is bloomberg. ♪

paul: morgan stanley's investment bankers saw their best quarter ever. ceo james gorman spoke to bloomberg about the earnings report and shared his list of worries as we close out the year. >> we are continuing to see extremely good performance across the whole investment banking, sales, and trading platform. i don't expect the pipeline to slow down this point. it remains very robust. eventually, as the fed starts tapering, moving to rate increases, we will see more volatility in the fixed-income space. so there is a lot of stuff going on right now. reporter: let's speak to those

challenges for a second. you said during the earnings call to watch out for volatility. many of your peers have been worried about interest rates. what are you most worried about as we start to close up this year still? >> i just said you've got to be mindful. we have seen sharper movements in the market by the day. some of the earlier bubbles around spac's have clearly gone up a little bit. there is more geopolitical tension between the u.s. and china, talk of taiwan, etc. our job is to be mindful and on the one hand have your foot on the accelerator, but the other to be looking for where the big potholes are. that is basically what i mean by being cautious. in the next several months, i think the market has digested that the fed will have to move not just on tapering, but rate increases. we are 10 increases away from what would be considered normal. we could do 10 rate increases. so bringing it up a little bit over the next year is not a

crisis and not unexpected. reporter: you said not a crisis, so do you think a lot of people who are worried about the next correction in the market, are those fears misplaced? >> people are always worried. markets go up and down. when you've got basically free money, record fiscal stimulus, of course the markets will do well. if this environment does not make it happen, none will. but that does not mean it is going to go on a straight line forever. you have corrections, moments of access, reassessment, the investor psyche changes. we will go through one of those periods but i am not expecting a major crisis, and nothing like the shocks we have been through the last 30 years that were really material. reporter: do you see this wage pressure on the industry lasting for a while? and what is that going to do in terms of the ability to control expenses at the end of the day? >> i really don't think it will be that important to what we do.

this industry understands that when markets are doing good, they get paid better. when they are not, you are not. there are natural hedges within these kinds of businesses that traditional companies do not have. my focus is on making sure we pay people well for great jobs done and they get paid great for doing that. it is not an anxiety around wage inflation for this kind of company. different industries affected dramatically, but what i see is real wage inflation around the world. reporter: you seem confident about the trajectory we are on. you clearly see bumps in the road, but you don't see inflation getting out of control? you see this as being something we can manage our way through? >> that is my assumption, that the fed will manage it. they will have to bring rates up. my production guy, i have been much more hawkish. i would bring rates up, certainly by the first quarter

of next year. you have to pricked this bubble a little bit. money is too free and available right now. i am not a buyer of this story that it is transitory. wage inflation is real and the supply chain stories have clearly been real. some of that is temporary. i think we are in a period where inflation will take up. i think it will force the fed's hand, and you see this in the points coming out of the last meeting. if i was right, there were five rate increases. that moved to nine dots in the last meeting. shery: morgan stanley ceo james gorman speaking to guy johnson and sonali basak. we are seeing the dollar holding steady at the moment after falling for two consecutive sessions.

we have more risk on sentiment and that leaving pressure on the dollar. the japanese yen continues to be weak. the three year low still being felt across markets. you are seeing the offshore yuan study -- steady. we had a weaker than expected fixing. perhaps a little bit of discomfort with the recent gains we have seen on the yuan. take a look at the turkish lira. again, at a record low and continues to lose ground, past that nine per dollar level. not surprising given that we are seeing this incredible weakness after that surprise rates cut we saw back in august. paul, that weak lira is going to filter through the inflation concerns that are already at four times of the central bank's five-time target. we may see more changes in the board members at the turkish

central bank. sources telling bloomberg that erdogan has fired central bank policy makers who were wary of cutting rates. he does have very unorthodox ideas about the relationship between inflation and the key rate. paul: indeed he does. you mentioned that these rate cuts fueling inflation concerns. not if you are president erdogan. he does subscribe to the unusual theory that lower interest rates lead to lower inflation. that has also led to some speculation that the current central bank governor might have some issues with job security. but to put those questions to rest, they have appeared in a photograph taken after a meeting that the president described as positive, so he remains in his job for now. the correction of monetary policy and the lira remains one worth watching. you can watch us live and see

our past interviews on our interactive tv function, tv . you can also dive into any securities or the bloomberg functions we talk about. you can become part of the conversation by sending us instant messages during our shows. that function is for bloomberg subscribers only. you can check it out at tv . this is bloomberg. ♪

vonnie: here is a quick check of the business flash headlines. morgan stanley has become the fourth big wall street bank to bring a new bond deal after reporting third quarter earnings, setting the stage for other banks to follow. a source says it bellowed $5 million in a two-part bond deal friday. profits rose to 35% with the investment banking division pulling in $2.85 billion, a 67% jump. citigroup's earnings top estimates included a 40% jump in revenue that pushed the unit to about $1 billion for the third period. m&a boosted bank of america, a surge of 65%.

third quarter profit soared. boeing is set to have found faulty components used by one of its biggest suppliers for the 797 dreamliner. a source says titanium parts made by italy's company needs replacing on some jets made in the past three years. boeing says they should not present any immediate safety concerns, but the plane maker has more than 100 dreamliner's in a storage as they work to gain approval from u.s. regulators. paul: the faa is flashing warning signs. this comes as countries ease travel restrictions and planes returned to the skies. angus whitley joins us for more. some rather chilling stories about pilots making errors. what sorts of mistakes are we talking about here? angus: i think it is worth

remembering that the pandemic has been the biggest ever crisis for aviation. it dismantled flying schedules from the very get-go back in march of last year. by some estimates, elected 100,000 pilots working skeleton hours or on longer-term leave. for this story, we interviewed pilots across the world, asia, europe, and dug deep into this database of anonymous accounts of safety incidents that have been declared in the u.s. since the pandemic. it is clear that mistakes by practiced pilots have been a constant pretty much since march 2020. they are minor, like flying out the wrong altitude, coming into fast, too high, perhaps lining heavily. misconstruing instructions over the radio from air traffic control. having said that, there are serious incidents among these.

one pilot forgot to pull down his landing gear coming in to land. another pilot forgot to start his second engine on the runway. and another crew turned the wrong way coming out of a busy u.s. airport when they should have gone the other way. they were turned the other way by air-traffic control. the common factor is all of them partly blamed a lack of flying due to the pandemic. shery: those are pretty scary stories. our authorities doing anything about all of this -- are authorities doing anything about all of this? angus: the risksangus: are known by authorities from the start, and knowing we will have problems keeping pilots to the level of proficiency they were used to before the pandemic. they have been developing training programs for airlines and individual regulators to transition these pilots back into the caulk hit safely -- into the cockpit safely. that includes more simulator

sessions in the ground before they get in the skies, and risking mitigation measures like extra staff, extra experience, senior captains into the cockpit when these pilots get back to work. it is not yet clear whether it is a good enough solution, as these incidents show. paul: in terms of it not being a good enough solution, are these measures going to be enough? is more going to need to be done? angus: i think this is the key question. although the training laid out by the united nations agency in montreal attempts to get pilots safely back in the air, it does not fully account for the mental, the psychological, and sometimes the financial stress the pandemic has imposed on pilots. also, it is impossible to re-create the commercial pressures of a real-life cockpit.

a lot of these measures that they are suggesting as risk mitigation are not affordable to many airlines. yes, airlines like qantas have dedicated teams to safely get their pilots back in the air, but in a lot of cases airlines are already stretched since the pandemic and are not in a position to roster an extra staff. it is clear there are concerns growing and perhaps oversight is required in some areas. shery: bloomberg's angus whitley in sydney. those issues and concerns might be worsening as we continue to see the reopening around the world, especially with singapore. we have seen trouble reopening with the u.s. and europe as well. but there seems to be a little bit of frustration on this shift when it comes to the government's tone on covid elimination strategies now to endemic covid, having to learn about living with covid, and how

countries like australia will have to live with the virus. now we are hearing this frustration from singapore, hospitals with people inundating hospitals even with mild symptoms because they are scared of living with this disease. we continue to see these frustrations mounting in a countries, especially across asia that have been so successful in reining in the pandemic, but now they have to live with the disease and open up. paul: the messaging around this definitely starting to change now. what has changed phenomenally in new south wales over the past couple months, and today a very big development, the announcement that there will no longer be the quarantine for travelers entering the state of new south wales. this is where sydney is. that means know hotel or home -- this means no hotel or home quarantine. that means travelers will not need to quarantine when entering

new south wales. unvaccinated travelers will need to quarantine, but that will be capped. some powerful standards for people who do not get the vaccination. shery: that is it for "daybreak: asia." this is bloomberg. ♪

>> good morning. it is 9:00 a.m. in beijing. welcome to "bloomberg markets: china open." i am david ingles. we are counting down to the last session of the week on the reopening in hong kong. let's get your top stories. stocks across the region are up.