>> i am haidi stroud-watts in sydney, counting down to asia's major market opens. shery: asian stocks set for gains after tech leads wall street to its biggest rally in nine months. haid: omicron optimism is lifting sentiment.

pfizer's shot provides some protection. a default looks inevitable. shery: let's get you to the market outlook in sydney. a strong rebound overnight for wall street shares, tech leading those gains. nasdaq stocks about 3%. we are watching the tech heavy markets coming online in the next hour. sydney, up .3%. we continue to wait for more data, omicron sounding more encouraging. we are also waiting for reaction to the australian government confirming it won't be sending government officials to the beijing winter olympics, but stopping short of calling it a diplomatic boycott. new zealand, pretty strong gains in trading. chicago nikkei futures, 2.6%

higher. dollar-in stabilizing back above 113, indicating sentiment is starting to play out. shery: u.s. futures extending gains, up .2%. u.s. stocks wiping out losses from the past week. one of the best spaces for risk assets after the plunge last week. 10 year yields surging. treasury futures holding steady at the moment. bitcoin under pressure after three sessions of gains after being at the $50,000 level already. watchers saying perhaps $55,000 is within race. crude prices under a little bit of pressure, still above the $71 a barrel level. we have seen more optimism over the demand outlook. haidi: let's get back to the virus because researchers at the african health research

institute say the pfizer vaccine is less effective against the omicron variant than other variants. some protection, better than none, but where would that leave the need for boosters and an entirely new vaccine targeting the new variant? >> the word out of the study out of south africa was that the vaccine is robust but not complete. some protection against -- quite a bit of protection against the delta variant, but it does still prevent severe disease. officials say the boosters may help, so there is encouragement to get the boosters to stop omicron. haidi: what do we know so far about the severity of omicron? kara: out of south africa, hospitalizations have not been tied so much to omicron. it is still early.

there are still infections in the younger cohort who are less apt to get severe disease. there is encouraging news it is less severe. anthony found she said over the next week we should know more. shery: let's turn to congress because republicans and democrats have agreed on a plan to raise the debt ceiling, pulling the u.s. away from default. the deal enables a procedural maneuver to increase borrowing authority with only democratic votes. kathleen hays is here with the details. congress getting creative again that this might work. kathleen: creative, innovative. you have to hand it to chuck schumer and mitch mcconnell because this procedure they have come up with does look like it could work. republicans have been saying we

got in on a bipartisan vote. maybe it was a narrow margin. still, we helped get the big spending plan boost last year and you did not allow us to get on board on the one going through congress right now, the $2 trillion deal, build back better, from biden. so we are not going to vote for this. you have to raise the debt ceiling on your own. now we have mitch mcconnell and chuck schumer talking, mitch mcconnell saying the plan to raise the debt ceiling is in the best interest of their country. schumer saying we don't have to wrangle too much and we will carry the burden of doing this. they are creating procedure to boost the debt limit on a 50-50 vote, but only once. then they are going to link it to a plan to not allow medicare to be automatically cut under some previous legislation that

was agreed. it will go back to the senate and will have this provision to have a 50-50 vote. it will still need 10 gop votes. the republican party in the senate says they think they have the votes, but on the bottom line, democrats will pass it on their own. this is important politically because both sides can say they won. democrats can say they got the bill back better plan past. the republicans sort of agreed to raise the debt ceiling but can say they never voted for it. both sides can go into the midterms feeling like they have a political card to play. mitch mcconnell and leading republicans are trying to convince their party they have the wind at their back, the odds of regaining the house and getting a majority in the senate again are better than they thought so they better not blow

it by not allowing the debt ceiling to be raised and being blamed for shutting down the government. that doesn't prove to be a good political step, as history has shown. shery: let's get you to vonnie quinn with the first word headlines. vonnie: president biden has warned vladimir putin that the u.s. and its allies will take economic measures to respond to any attack on ukraine. biden also told putin the united states will send defensive materials to ukraine if it is attacked. they issued a statement blaming nato for rising tensions. china says the u.s. will pay a price for its diplomatic boycott of the winter olympics, warning that ties between the two largest economies may suffer. china's foreign ministry says the olympics are not a place for political manipulation. the white house cited china's

alleged human rights abuses for the boycott. some china evergrande bondholders say they have not received overdue coupon payments after a month-long grace period. s&p global ratings says a default from the most indebted developer looks inevitable. evergrande notes would face cuts as the company restructures its balance sheet without a government bailout. the united arab emirates is changing its weekend to saturday and sunday for state employees starting january 1. the working week will be four and a half days with friday, a holy day in islam, being a half-day. the uae says the move outlines them more closely to global markets. global news 24 hours a day on air and on bloombergquint take, powered by over 2700 journalists and analysts in over 120 countries. shery: a big day for japan. economic data.

. and mark we will be watching for those numbers. next, we discussed fed policy with david hunt. this is bloomberg. ♪

haidi: the volatility in u.s. treasuries. the fed causing some palpitations across the market. we are seeing crosscurrents of high inflation, the pandemic causing large daily swings in yield, indicating concerns over liquidity. talk through how we see the markets going forward. david, always great to have you with us. it's interesting because there are parts of the market as we see being quite syncretic to the

u.s. economy and the way things are functioning there. is it possible to predict whether we will continue to see these waves of volatility as we get closer to normalization when it comes to monetary policy? david: let me make a couple of points about the big fed pivot we saw because it has rippled across the world. a lot of people make mistakes trying to interpret this. there has been a belief that somehow this means with a quicker taper and more rate increases expected next year that interest rates will go up. actually that's a misnomer. on the short end, we have seen rates begin to rise. on the long end, we have seen yields fall. we have seen the 10 year begin to come down a bit as well. we have seen that in the past as we have had some mini taper

tantrum's along the way. the market is saying as we go through this, the market expects slower growth and we will have lower rates in the future. our belief -- and we have been consistent on this over the last seven or eight years -- is we will go back to a period where the 10-year is between 1% and 2%, and we have seen the highs as we go through the cycle now. there is nothing in the last week that has changed that for us. haidi: when you talk about the search for the yield that has dominated and driven sentiment, does that mean you think there is a better home for that surge in asia, more opportunistic on the idiosyncratic growth areas here? david: there is no question that having the punitive rates on

cash that we have right now, that we will see an absolute focus on yield over the next 24 months. what that means is there is an enormous amount of money looking for home in private credit, real estate, infrastructure. some of the important markets in asia, which have higher interest rates and higher inherent long-term growth rates in the economy. we are seeing real interest in investing behind those teams. the movement toward private and toward yield has been strong and we expect it to continue for the foreseeable future. shery: what are your expectations out of china? it is an interesting but challenging time. we are looking at debt restructuring for evergrande, using monetary policies and slowing economic growth. what are you targeting in greater china?

david: it is interesting because if you read the newspaper, all you see is rising political tensions, security issues, a lot of worry that the world is continuing to divide. as i talked to cios of large pension funds and sovereign wealth funds, i hear that there biggest concern is they are underweight china. they believe the economy there over the next decade will grow faster than much of the rest of the world and they want to make sure they are well-positioned to capture the excess return. we are working with a lot of clients in helping them create differentiated ways to access the public markets, whether through public or private markets, so they are well-positioned for the next decade. our prediction is it will be volatile and there will be political tension, but in a

strange way that just means there will be more emphasis on the integration of the capital markets that we will see and that we need to play a role and intermediate. shery: -- the centrally controlled political risks because at any moment they could change their policies. we have seen this crackdown on many sectors, property, tech, education. how do you hedge that? david: i'm not sure there is any good hedge for that. unfortunately investors in china need to take the long-term view. things do change quickly there. they are inherently unpredictable. if you look at the growth rates over that country in the last 30 years, it has been a remarkably steep climb. our view is that is likely to continue. we see a lot of very strong

fundamentals there, which we think will continue to power economic growth. many of our clients want to make sure they are pushing to access it and are willing to accept they need to write out some of the short-term volatility. shery: do you need to factor in the policy resurgence we are expected to see, given the tapering and the pboc taking this stance? especially since we have this maniacal surge for yield. david: you are right. the strange thing is as the economies diverge -- let's take technology as an example -- where more and more we are seeing you used to be able to play china by simply owning apple, or another major technology company that had major sales in china. that's less true going forward. you need to be in china investing in chinese technology companies.

as the global firms become less integrated, it is more important as a portfolio manager that you have exposure that can be driven on the ground. that's what we are seeing from our clients. haidi: would you say valuations look better given that we have seen the political risks being factored in and the selloff we have seen the past year? david: if you are willing to take the 10 year view and you believe the argument i laid out about the fundamental intrinsic's of the economy, i do think in china and many emerging markets that there is better value there than there is in some developed markets, in particular the united states. haidi: you are also constructive when it comes to opportunities in australia and new zealand. australia is sitting on one of the biggest pension titles in the world.

the search for investable, good quality assets remains a problem. what are the opportunities for growth that you see? david: for australia in particular -- and i must say i am a great admirer of the system you have as one of the truly only pension systems around the world that is in a surplus. that is an important thing to acknowledge upfront. there is a great amount of money coming in that needs to be put to work. in the past, much of that money has been put to work in australia and you are beneficiaries of a very good infrastructure as part of that. now i think the time is to diversify much more of that outside the australian economy. i think many asset managers, a wide range, are going to have an increasingly important role to

play in helping the superannuation funds put that money to work in the rest of the world. haidi: we have to get your views on crypto. what role does it play in a balanced portfolio and how close is it to being able to minimize the levels of volatility that we continue to see? david: i would be disappointed if you didn't ask about crypto, given where we are. we are long-term investors and fiduciaries on behalf of our clients. for us to put an asset class into a portfolio, three things need to be true. first, we need to be comfortable there is an effective regulatory framework that surrounds that asset class. second, we need to believe there is an effective store of value and a way of monetizing that in the future.

last, we need to understand what the correlation is between that and other asset classes so we know how it would fit into an investor's portfolio. at the moment crypto meets zero out of three of those criteria, so we do not use that in our fiduciary accounts for clients. that's not to say it is a bad idea, but it is much more of a speculation than investment. there's many speculations in the world and there is nothing wrong with that, but let's not confuse that with how we effectively put people's retirement savings to work. maybe in the future if we get a regulatory framework and as stability comes to the market, may a bit like gold, it will have a role. right now it doesn't qualify in our view. shery: when it comes to bitcoin and retail meme stocks, we

have seen downside pressure in the past few months. when it comes to 2022, what do you think the outlook will be when it comes to risk appetite for speculative trades? david: my hope is that -- in many ways cryptocurrency has gotten the attention, but it is the least interesting part of the innovation. behind crypto stands a really interesting technology, which is the -- actually holding large sources of stored value in a disaggregated way. that is really interesting and important. much of the financial plumbing we have, what we do for clearing and settlement, actually can use blockchain technologies over the next decade. my hope for 2022 is that in some

ways some of the focus on currency will come back to the important innovation, which is the disaggregated ways of managing large, complex systems of information without a single counterpart. that is quite exciting. shery: always a pleasure speaking with you. join us again soon. don't miss another big conversation in the next hour. dell technology seeing record revenues this year. we will discuss business momentum in asia with the president. this is bloomberg. ♪

shery: we are counting down to the start of trade in tokyo and seoul. in korea, they will report more

than 7000 new coronavirus cases according to local media. china's minister will meet with economists and research institute heads after his weekly meeting on housing markets. we know the government has struggled to keep prices down in that sector. keep an eye on sk bioscience, the top ipo in the world this year, up more than 260% since the start of trading in the first quarter. in japan, we are watching slow economic data leading to third-quarter gdp. a former bank of japan top official saying the boj is going to scale down the scope of its covid eight to focus on those that need it most. we have learned that city is picking top bidders for its asia retail assets. the bank of value dat -- bank of ayuda is a topic.

i will also be speaking to a minister from the summit. we will bring you parts of that conversation later on bloomberg tv. haidi: softbank is said to be looking to upload $550 million in debt by selling bonds. sources say it is priced at $.85 on the dollar with a yield just under 10%. we work received $2.2 billion from softbank after its ipo failed. volkswagen shares jumped on reports the family that controls the company may sell part of its stake. according to a german newspaper, the family may want to raise funds to invest in a possible separate listing of the porsche brand. apple shares rallied after morgan stanley boosted its price target to $200. the stock closed at an all-time high with gains putting it close

to an historic $3 trillion value. we have lots more to come on "daybreak: asia." this is hey, angie! you forgot your phone! hey lou! angie forget her phone again? yep. lou! mom said she could save up to $400 on her wireless bill by switching to xfinity internet and mobile. with nationwide 5g at no extra cost. and lou! on the most reliable network, lou! smart kid, bill. oh oh so true. and now, the moon christmas special. gotta go! take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes switching fast and easy this holiday season.

>> we could see some strength against the commodity currencies, but our general view is the global economy is recovering. shery: china evergrande appears headed for default with bondholders telling bloomberg they have yet to receive overdue payments after a 30 day grace period. the builder begins what could be a long and painful debt restructuring. let's bring in our chief north asian correspondent, stephen engle. can we start using the d word yet? stephen: which one debt and default.

not officially. the rating agencies have not officially declared this a default, but s&p put out a statement saying default is inevitable because the 30 day grace period expired on monday on two bond coupons that were due after the 30 day grace period that were issued by a unit of evergrande, seen as the litmus test of the ability of evergrande to continue to pay their obligations. they have been staving off default for the last few months with the founder selling off some of his personal fortune, but not enough to stem the tide given the sheer bulk of the liabilities, 300 billion plus in liabilities. evergrande, we have kind of circled this scenario as inevitability and that is a

grand debt restructuring, possibly the largest ever in china. and the missed payments. here we are. where do we go from here? the question is, how will the government keep the contagion from happening, not only in other developers, but other parts of an already slowing economy? haidi: developers in debt dancing on the brink of default. china are u.n. is another one. stephen: let me read you a statement coming late last week from them. we did not get into this because of the kaiser troubles, the evergrande issues, but this is another developer having liquidity issues. in terms of the contract, it is number 47 on the list of chinese

developers by size, not big, but emblematic of the potential contagion. they said late last week there is no guarantee we will be able to meet certain guarantees due to liquidity issues. it is almost word for word exactly what evergrande said as they were announcing their big debt restructuring. it seems to be the mou -- not the mou, but the modus operandi for these companies to try to stave off default but then said, it's beyond our control, we have liquidity issues. we will see where the d word erupts, default. sunshine 100 has had multiple defaults already. kaisa defaulted. i can add them to the list. haidi: let's turn to vonnie quinn with first word headlines. vonnie: the first reported

experiments on the effectiveness of pfizer's vaccine against the omicron variant found it provided some protection. south african researchers said crohn's bama ability to evade immunity is robust but not complete. the booster shots could provide additional protection. republicans and democrats agreed on a plan to raise the debt ceiling, pulling the u.s. from default. the deal enables a procedural maneuver to increase borrowing authority with only democratic votes. the news quickly reverberated in the treasury market. new zealand's finance minister says the ardennes government will not resort to austerity terrain in debt. he says increased borrowing would not be responsible during the pandemic and he expects a strong rebound in 2022.

police have arrested a saudi national for suspected involvement in the murder of jamal khashoggi. the man was reportedly detained in paris, about to board a plane for riyadh. khashoggi was a prominent critic of prince mohammed bin salman and was murdered inside the saudi consulate in his dental. 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 quinn. this is bloomberg. shery: let's look at the commodity space, gold steady, easing concerns over the severity of the omicron variant against an uptick in geopolitical tension, and all before the release of key u.s. inflation data later this week. suki, great to have you with us. many factors weighing on the yellow metal right now.

what is the main driver. suki: gold is tracking the dollar closely. we are seeing a shift in key drivers in terms of where the buying is happening. last year the bulk of the interest was driven by strong investor demand. this year that has switched to etf disinvestment. we have seen an uptick in buying from central banks. this means on the investor side, we are seeing gold talk -- caught between a number of factors. concerns around the impact on economic recovery has given gold a safe haven bid, increasing prices relatively well given the pressures on the downside of the metal. shery: tell us about the

physical market because you mentioned remaining resilient. we have seen india's demand strong. how will that play out towards? the holiday season? suki: the response from india has been impressive. if you look at the trade data from late august through november, it has been strong, import levels we have not seen in over a year. we also had a good monsoon season. all these factors combined alongside the festival buying provided gold a strong floor on the downside. good demand from other regions as well. the physical markets enabled gold prices to remain relatively stable.

having said that, we are entering a slow period for consumption and the floor is starting to look more fragile. haidi: with the questions over the strengths of the chinese economy, do you expect demand in china to continue to hold up? suki: we are looking at how strong the demand will be in the lunar new year and if we are entering a strong period, we can see that materializing ahead of the festival. normally that would materialize in late december. demand has started to slow down a little bit although the local market is trading at a premium. it is not very strong just yet. haidi: we have seen silver looking quite oversold. do you expect to see a recovery? suki: silver has been caught

between some long-term drivers and the weakness on the supply and demand side. long-term there are a number of positive trends relating to renewables or green energy, using electric vehicles, using vehicles generally means there is strong investor demand, but on the investor side, interest has been more choppy. we have seen etf inflows, but short-term has been less positive. the longer-term drivers of silver are quite compelling, but the zipline chain challenges -- the supply chain challenges this year have damaged the underlying demand. we have seen a strong rebound in demand for silver this year and also a strong rebound when it comes to supply-side. we estimate demand for silver is

up 8% this year. the market still sees good trends. we think the investor side will start to improve when the longer-term demand starts to materialize, but it is rising on the coattails of gold. we are seeing silver caught by some of the headwinds that have challenged gold this year so we have not seen the same investor interest. silver does well when it has a strong industrial base and investor interest. shery: precious metals analyst suki cooper. -- looking to raise it and returns with a plan that could result in four payments next year. they are committed to returning 40% of the cash flow to investors. >> we introduced a third channel

, which is a variable return, and announced we would be giving $1 billion additional on top of what we do already. total returning to shareholders, $7 billion, a 16% increase and a recognition of the commodity price market. >> let me ask the flipside, what kind of sustained lower oil price do you see that will shut that off? >> around our planning, midcycle price in the 50's, our system balances between the ordinary dividend, about $2.4 billion, yields up to .5%, combined with 2.5 billion shares we buy through the cycles. we are buying 3.5 billion. it is a channel for these elevated high prices and a channel that if we go down, we

are still delivering 30% of cash back to shareholders. the makeup of that, the channels might change if commodity prices come back down, but we are pretty constructive over the next couple of years, which is why we introduced a third channel. >> thanks for the time today. give me a sense of how you think price is going to develop. investors, was this something they asked for? what kind of feedback have you had? i am curious how the relationship has developed. >> it is good to see you. it has been constructive. the industry has been moving this direction with rising demand coming out of the pandemic and supply not existing in the market, so it has been a constructive supply-demand scenario. investors are looking at the cash flows and seeing extra cash

flow coming and they are asking, how do i get my fair share of that capital coming back? there has been a movement toward contingent variable dividends or a variable form of cash return that does not lock you in. we know this business is going to be volatile. the last 15 weeks, 15% drop in one day and then some recovery. it is a way to deal with rising commodity prices in a very volatile world. >> that was a happy thanksgiving treat. something that has stood out for conoco's you guys do stuff first and the industry follows. you sold off certain assets, you focused on shareholder return, and now variable dividend. what do you do next and how do you retain the competitive edge? >> it's all about efficiencies in this business, not following

growth. our sector has been miserable over the last five years, zero return of capital, and we are committed to change that. our 12 month return on capital now is 14%. what we are doing is all about efficiency. can we get as much as we can, create the efficiencies we need, use the technologies we know is developing in this business to increase the return on capital and increase the return on capital back to shareholders? that is the next phase of this business. we return 30% of our cash flow, so we usually expect returns to rise as well. shery: ryan lance speaking to alix steel that guy johnson. australia joins the u.s. in a

diplomatic boycott of the winter olympics. we will have the details. this is bloomberg. ♪

haidi: the australian prime minister has confirmed government officials will not attend the winter olympics in beijing although athletes will still go.

paul allen joins us more -- joins us for more. australia is stopping short of a full boycott. paul: we did not hear from the prime minister the word boycott, but what he did say is this is in response to china's activities in shin jang province. there are concerns over the treatment of the weaker population -- the uighur population. beijing's trade strengths against australia, which amount to billions of dollars, and china's refusal to return phone calls from australian ministers to discuss the issue. scott morrison said we want to see these issues resolved, but they are not, so it is not surprising officials will not be going to china. athletes will still compete. this follows pretty lockstep

with what the united states has done. haidi: any reaction from china yet? paul: so far no, but you have to expect one would be forthcoming. china had already warned after the u.s. planned this action to take resolute countermeasures against the u.s. diplomatic boycott. the chinese foreign ministry spokesman called the boycott a strain on the spirit of the olympic charter. china already has trade strikes against australia so this invites further reprisals. it is interesting those reprisals have not caused australia to buckle. the relationship between those countries certainly not improving. shery: citigroup is said to have chosen preferred bidders for its consumer assets in several asian markets. the lender has picked leading

buyers in thailand, indonesia, malaysia, and china while sales of its india and taiwan businesses may take longer. citigroup has been considering a sale of certain retail assets in asia as it focuses on more profitable units like investment banking. we are watching a debut on the hong kong stock exchange wednesday morning. shares of these social media company fell after it raised $380 million in its ipo. the second listing in hong kong comes as chinese regulators continue tightening oversight on local firms traded overseas. algae under seizure loosen -- lg energy solution is planning to raise money in south korea's biggest ipo. it could give the battery maker a valuation of just under $60 billion, becoming the third biggest stock on the kospi index.

subscriptions open in mid-january with trading expected to begin january 27. shery: let's take a yoke -- a look at the yen as we head towards the data dump. we are seeing improving risk sentiment, the yen holding steady above 113 as we saw the return to risk a cross-border equity markets. a little change when it comes to dollar-yen. let's take a look at gdp numbers out now. the number coming in slightly higher, .9% contraction, slightly worse and the .8% contraction we saw earlier. the annualized number also slightly worse, 3.6% contraction.

nominal seasonally adjusted figure for the third quarter coming in at a contraction of 1%, also worse than expected. these continued to reflect some of the weaknesses in the japanese economy as large parts of the country, really coming out of the state of emergency. we see that continued weakness when it comes to wage growth and inflation, despite what we see elsewhere. shery: we are also getting current-account ripples widening for the previous month, for october coming in at ¥1.18 trillion. this really widening from the previous month when we had these september current-account surplus narrowing to around ¥1 trillion, now ¥1.18 trillion. we continue to see external demand appearing to hold up and

higher prices, given these supply demand imbalances continuing around the world. get a roundup of these stories you need in today's edition of daybreak. bloomberg subscribers, go to dayb on your terminals. also available on mobile and the bloomberg anywhere app. this is bloomberg. ♪

>> we are pivoting quickly but watching this closely. if the workforce gets ill, that impacts the supply chain. we have seen cases like that over the past year. we have to make sure folks are vaccinated, physically distance, and we do contact tracing so we don't spread the new variant. haidi: we have more on the fallout of the global supply chain crunch. another major north american port is coming back online. vancouver is making repairs after historic rainfall. work on rail lines is underway. canada's biggest port is expected to take weeks to work through its backlog. services say avalon -- amazon web services is wreaking havoc on delivery operations, prohibiting drivers from getting packages and shutting down communication. it comes during the holiday shopping season. the biden administration is

warning of strong measures against russia if it decides to invade ukraine. it has already imposed finance and trade restrictions against hundreds of russian individuals and companies since 2014. shery: u.s. firms are forbidden from doing business with some corporate giants. the biden administration has also barred financial institutions from participating in the primary market for new debt issued by the russian central bank. g bloomberg has reportedg that u.s. and alliesbv may go after russian banks should the situation escalate, while germany warns an escalation of the ukraine crisis could impact the fate of the nord stream 2 pipeline. bloomberg terminal users can read more about that in our newsletter supply line. overcoming supply chain issues will be the focus of my conversation on the panel in a

few hours from the annual g0 summit. we will also bring you parts of that conversation on bloomberg tv. haidi: in the next hour, we will hear how dell is traveling with supply chain disruptions. there a pac president joins us. this is bloomberg. ♪

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>> we have been preparing for a moment like that for months from now. so we need to understand more about the virus. and second, protect against infections. the third is to treat. some things are unclear. is the new variant creating more severe disease or not? easily transmitted, or not? going to older or younger people?

it is something we will know in a few weeks. shery: welcome to daybreak asia from headquarters in new york. haidi: asian stocks are set for gains after the biggest rally in nine months. treasuries are extending. a new study shows the pfizer shot provides some protection against omicron.

shery: japan and south korea are coming online. nikkei up more than 1%. we are talking about the second session of gains with energy and financial copying those financials. real estate is weighing on the markets. third quarter gdp numbers are missing the advance estimate and contracting 3.6%. japanese yen holding steady at the 113 level. jgb, yelled declined to 82 month low. kospi, six sessions of gains already. we have not seen such a long winning streak since april. october surplus widening. korean won studying a bit

against the u.s. dollar with investors weighing in the chinese economy, perhaps more monetary easing and said policy normalization. haidi: omicron is front and center as companies mow the impact of a -- mull the impact of perhaps a more viral in strain. looking at trading in sydney, modest upside. travel stocks, bloomberg intelligence saying asian airline valuations are likely to be higher going into 2022 but still expecting volatility. tracking more positivity after a robust recovery session on wall street. we are watching bitcoin after a recovery and hearing regulators in australia have been talking

on through the regulation of the controlled space and the government wanted to turn australia into a leading hub for technology. let's get more on the markets with mark cudmore. we see the pullback when it comes to risk aversion at the moment. is this temporary, given the same concerns over inflation and central tightening and uncertainty are still there? mark: that is the obvious question to ask and there is a market divide. i am in the camp that is skeptical that the rally can continue at this pace. given how extreme volatility was last week, we expected some rebound. but the power of yesterday was impressive. european stocks had the best day in more than a year since last

november when pfizer announced they had a vaccine that could counter covid. so those are some extreme moves we are saying -- seeing. but underlying concerns around inflation, central banks will have to start tightening policy. never mind what we find out about omicron. there are risks to the market, the omicron variant and the fact that we see a change in the background liquidity situation we have had in the market for the past two years. shery: if we get an official announcement that evergrande is a default, how will this ripple through the market? mark: i'm not sure the consequences will be big. the chinese government has done an incredible job of managing the situation. managing through a default or

offshore restructuring, even though the onshore situation is not causing much disruption. this is an issue for the chinese economy, but essentially the chinese government is deflating some domestic bubbles without causing a major collapse or panic economically. so it will be negative short term until we get confirmation but i think we are moving away from that and the chinese government has a real estate property sector problem. that will continue to way -- way on the economy -- weigh on the economy. shery: we are seeing a broader sellout in chinese tax, is this offering an opportunity for tax -- tech shares? mark: it will dry -- it will draw the association to new tech. but there are different stories. trends in asia are exceptional.

you have to have negative outlook on the world or the chinese government to feel there is still a lot of downside. u.s. tech remains exceptionally expensive and overvalued, especially when many are selling their shares. for u.s. tech, the risk reward is unappealing. a lot of these names are solid. good cash generators but i do not think they can outperform like they have in years. i think asian tech could be an exciting story in 2022. haidi: four bitcoin -- for bitcoin is saying they expect 50,000 as the level to be reached, have the fundamentals changed? what have you observed about the correlation between how crypto

and bitcoin trade in relation to volatility in the market? mark: i do not think the fundamentals have changed at all. but i think a lot of these are arbitrary. talking about the moving average, excluding the fact that it crossed 18 times and it did mean anything. so some of it is irrelevant. but this space has a massive bullish underlying sentiment that tends to be exposed to high leverage. so when you get voluntarily, -- volatility, it is built for boom and bust cycles and extreme moves and that will not change. if you think it will be stable,

it is going to stay volatile. it is more the ultimate risk-taking tool. so when assets are doing well, cryptocurrency has said you can assume cryptocurrency will suffer badly. shery: you can follow more on this story and the day's trading on the bloomberg. you can get a market run down in one click and get expert analysis on what is affecting your portfolio right now. >> president biden says he will not send u.s. officials to the beijing olympics. they also announced a diplomatic

boycott of the games, citing human rights abuses. news island says it will not send officials because of covid -- new zealand says it will not send officials because of covid-19. china's foreign ministry says the olympics are not the place for political stance or manipulations. the white house cited alleged human rights abuses for the boycotts. republicans and democrats have pulls the u.s. away from the brink of default. the increase of borrowing authority with only democratic votes. the bill matures in december. police have arrested a saudi national involved in the 2018 murder of jamal khashoggi. the man was detained in paris.

jamal khashoggi was a prominent critic of the saudi arabian royal family. global news 24 hours a day on tiktok and quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. i am vonnie quinn. haidi: still ahead, we will hear from the asia-pacific japan president about the outlook amid the global supply chain crunch. and news that the pfizer booster provides some level of protection. this is bloomberg. ♪

shery: the pfizer covid shot

could be less effective against omicron than other variants. a study in south africa does indicate that boosters might help. , -- emma ryan joins us. what do we know? >> the pfizer vaccine provides less immunity, a 40 fold reduction then the shot provides the original strain, but it is not as bad as we thought. i caution this is just preliminary data and we are talking to a lot of scientists to help us interpret it. haidi: based on the limited data we have about the new variants, what does that potentially mean for the efficacy of boosters or the necessity of new versions of

the vaccine that address this variant specifically? >> the head of the laboratory in south africa that produced this research says that the vaccines do work against omicron, but just not producing the same level of antibodies as they do against the original strain and other variants. he went on to say that there will be possibilities of breakthrough when it comes to immunity, but a good booster probably would decrease your chance of infection, especially severe infection leading to more severe disease. that is very important because it matches with the early data and anecdotes we are hearing

from south africa, where this is spreading fast. it appears to be highly transmissible but it is not overwhelming the hospitals. haidi: we know omicron is stealing the limelight but at the same time we see rising cases in many parts of the world, and it is just delta. so it should still be a major concern? >> yes. it is still globally the most dominant variant. it is highly transmissible and appears to be more stringent when it comes to the effect it has. we have been tweaking the vaccines to deal with that a little bit more effectively, but research and real-world studies show that even if you get delta and you are vaccinated, the

experience is less severe than if you get it unvaccinated. haidi: a stronger level of vaccination could be why we are seeing this play out in japan. they have an aging demographic, a huge concern for the elderly and how they could be impacted by covid. one covid death a day in the country. the confirmed death, six in the past week, the lowest it has been since july 2020. it is unclear why, but we know when it comes to seniors, over 90% are fully vaccinated. shery: perhaps it is something japan has been doing since the pandemic. we have talked about japan being one country out of the g7, no other g7 nation has had as few

deaths as a japan. this comes at a time where we have had more inoculations. 77% of the population is fully inoculated. but culturally, japanese use masks everywhere they go. if you have a little bit of a cold, you where your mass. it is common -- your mask. it is common. so perhaps something that japan can teach the rest of the world in terms of avoiding the worst of the pandemic. haidi: absolutely. you see a cultural element and it is not at all controversial particularly after sars. we are watching the evergrande story in china. they appeared to be headed toward default. they could be headed for one of

the largest ever debt restructuring. we have been circling around what now feels like the inevitable. >> it definitely feels like we are in a different phase of the evergrande crisis, particularly with those statements on friday from authorities and evergrande, acknowledging they will struggle to meet the debt payment. with bondholders yet to receive payment, it seems like this could be the first default on a public bond. it is significant for the offshore bonds because it could trigger across default. for bondholders, although we saw a significant price drop in evergrande yesterday and the day before, but most of the bondholders, this could be good news because an official default

would give them more leverage when it comes to negotiating any kind of possible restructure. so in itself it is not necessarily negative. we are moving along with the restructure. evergrande plans to take a holistic approach to the restructure. they will include their offshore bombs -- offshore bonds, and private bond. this could be a comfort to those who were previously very uncertain. shery: as we see somewhat of a painful resolution, there are a growing list of developers that were and they might be next. the latest was in china. >> it looks like china has successfully kept evergrande

from making the market worse, but we are far from a healthy credit market, particularly offshore. many developers could borrow and they cannot access this key channel in the funding, it triggers a wave of defaults, we have seen $.10 june. -- we have seen 10 since june. shery: we will be back with updates for all of the developers who are suffering. coming up, i softbank is selling -- why i softbank is selling millions of dollars in debt. this is bloomberg. ♪

haidi: softbank is selling a

quarter of we work holdings. they officially -- they originally shared -- they originally provided financing. why are they selling the debt now? how well received will this be? how will they sell it? >> it is another chapter in the tumultuous relationship between softbank and we work. they helped to bail out we work after the first attempt to go public, which went horribly wrong. they are looking to sell $550 million in debt. the yield will be 10%. so quite risky at this point. as analysts have told us, it does not really look like a vote of confidence that softbank is selling this debt in $.86 on the

dollar for that. shery: is that reasonable, given that the company is still not profitable when omicron is hitting the business? >> softbank says they see this as a vote of confidence and they feel they need to diversify the investor base beyond the money they have put in, which has been very substantial. they point to several metrics that show improvement here they say occupancy has grown -- has gone up to 61%. they have been selling new rentals. but there is skepticism. it is a very risky signal to the market. and other we work bonds have fallen -- have followed this substantially. there are questions about how they will work with omicron

hurting the business. softbank has a lot of money at stake in we work. it is important to point out softbank has a broad range of investments. more than 300 portfolio companies they have invested in in one form or the other. we work is perhaps one of the most high-profile for them. they are trying to navigate that and other portfolio companies to either go public or improve operations at business. so it is one very large piece of portfolio. shery: here's a quick check of the headlines. apple shares rallied tuesday after morgan stanley boosted their prime target to $200. all-time high and gains close to

$3 trillion market value. an expert sees their company benefiting from autonomous vehicle products. hong kong stock exchange, shares of a social media company fell after raising 380 $5 million in ibo. the second listing in hong kong comes as regulators continue tightening on trading overseas. lg energy solution plans to raise as much as $10.8 billion and what would be south korea's biggest ipo. it could give them a valuation of just under $60 billion, becoming the third biggest stock on the kospi.

trading is expected to begin january 27. haidi: up next, a supply chain outlook from the region. we have an exclusive interview next. and a robust rebound in this part of the world after seeing strong trading, particularly when it comes to tech in the u.s.. we see it playing out in the japanese market. the dollar yen holding steady. risk aversion holding. in australia, upside, 7/10 of 1%. we are watching travel related names as we monitor the impact of omicron and efficacy of the booster vaccine on the variant and potentially on travel. asian-pacific shares up for tenths of 1% as markets extend

the about but worry about the hawkish tilt of the fed tightening as the virus

>> the first experiments on the effects of pfizer's vaccine against omicron variance say it provides some protection. induced immunity is robust but not complete. the booster could provide additional protection. new zealand's finance minister told debt levels have risen but

remained low compared to the rest of the world. he says increased borrowing is responsible during the pandemic but he expects a strong economic rebound in 2022. biden has warned putin the u.s. and allies will take strong measures in response to any attack on ukraine. they say they will supply defensive materials to ukraine if attacked. russia blames nato. u.s. national relations board has rejected starbucks bid at three restaurants. it paves the way for a vote count that could see the first labor foothold among the coffee chain stores.

employees were told that the company respects the process, regardless of the outcome. 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. this is bloomberg. shery: dell technology posted third quarter revenue that beat estimates on pcs. the next guest discusses the strategy in the region. we bring in the dell technologies president in japan. dell seems to have dealt with the shortfall well. what is your outlook for components going forward? >> there are headwinds in the global supply chain well beyond i.t. hardware. just because there is a strong demand for all electronics,

goods, and components. we are experiencing shortages but i suggest we have a competitive advantage because of our direct model and a multilayered relationship with suppliers. so while it cannot ship 16 million pcs, we can navigate and things remain strong. haidi: let's talk about demand. omicron is perhaps threatening reopening of different economies in asia. what do you see in terms of i.t. infrastructure spending now? >> in asia we just renounced our results, up 50% year on year. this is not just a one quarter

strong 50%, it is a multiyear journey. to give -- the server was up 56%. the client business was up 76%. so there is strong demand across the board. strong profitability. so let me give you the bigger picture. that is things are becoming more digitized. a digital transformation is happening. ceos tell me they need to change the customer experience and rewrite their business models. technology is at the heart of that. about omicron, this is an evolving situation and we do not yet have a point of view on it but i think early reports

suggest that vaccines are working and i thoroughly suggest all viewers to continue highlighting the value of vaccines and masking. haidi: i ask you to hang on one woman as we watch the property sector when it comes to china. an update from kaiser groups. suspending trading in hong kong this morning. we are waiting for more. 11.6 billion dollars in outstanding debt and they moved the -- they missed the tuesday repayment do that day. lots of questions about how these companies, including kaiser, will pay their suppliers. they are struggling to refinance with yields and junk dollar bonds so high. we have watched the slow demise of evergrande in now what seems likely to be a debt restructuring.

kaiser is another pressure point in this, as well. thank you for standing by. let's get back to the conversation. where do you see specific opportunities? what are you most excited about going into next year? >> thank you for that. we see a strong demand across all segment and product categories. it is unprecedented. we see that customers are talking about how to do digital transformation but in the near future looking at 5g and creating new architecture where customers can take advantage of technology opportunities. but if i can step back and say this is the time for asia to leapfrog, prioritize and be ready and be at the center of

the data-driven business models and build the technology echo system to create a multi-decorated -- multi-decade opportunity. here in singapore, universities are going to build a technology tower. -- build technology talent. it is becoming a critical enabler for all things business. haidi: do you see acquisitions and dealmaking be part of the growth in the industry? >> we are focused on our priority of continuing to win in the consolidation market, building flexible infrastructure, and creating new outcomes around edge and 5g. so we have a robust innovation

roadmap. we continue looking at the global acquisitions around ai so we will share with you when and where that is ready. we are a technology company that brings standards of tech to our customers. so we are excited about what is ahead and what we can do for our customers in digital transformation. haidi: are there regulatory headwinds you are concerned about? do they pose a risk to the level of growth you can see? >> across the region, they are leaning into building talent and enabling the next generation. so we find a lot of elements in suggesting how to help you accelerate. where things become more dicey

is if someone is holding the data of consumers, and that is what we do not do. we work for our customers to give them the capability, software, the entire support, so that they can use their companies infrastructure -- their company's infrastructure. shery: you have been positioning yourself as a seller subscription based services. how is that playing out and where do you see growth potential? >> we are excited about it. as we have launched cloud across the board, customers gave us feedback that it needed to be simplified. so we created a more subscription-based so customers

can consume at the click of a button. so we are going to launch services in australia, then riyadh and singapore. that is in addition to the options today. so subscription means simplification of technology consumption, faster movement to broaden infrastructure, and ease of use for the customers. we are really excited about it. shery: it was great having you on. join us again soon. we will have more exclusive interviews ahead, including discussing business strategies. and we will hear from one of the largest real estate developers in india. amazon web services outage is wreaking havoc on the delivery -- the delivery operation,

shutting down communication from amazon and drivers. su keenan has the latest. as we approach the holiday season, such an important time. >> chaos right before the holiday season. amazon says they solved most of the problem that had to do with amazon web services. the outage happened earlier in the day. looking at the three day stop, it is hard to tell there was anything amiss. a slight drop at peak trading. amazon locked in a 2.5% gain on the day. other companies impacted, robinhood, disney, the cloud computing provider, amazon web services, it did not impact their stock. although services were temporarily impacted.

according to amazon, what happened is they identified the root cause was internal and systemic and they have now mitigated the problem and are working on resolving the increased error rates they have in their computing system. but at the peak of the issue, what you had at 10:00 a.m. eastern was packages piling up and drivers without roots and -- routes and sidelines because communication was down. millions might have been impacted. people trying to buy airline tickets and stream movies from disney or netflix, netflix had a 26% drop in traffic during the problem. amazon said they have mitigated the problems. it was not a hacking issue, just

a systemic error that can happen when you have large servers. amazon is the leading cloud computing provider and they sell power and software on demand for companies as an alternative. so it is interesting to see the ripple effect and interconnectedness of this, particularly during a key holiday season and everything goes down in a domino effect. but most of the problem is resolved and amazon has identified the root cause and is working to fix it. it seems like they have dodged a bullet. haidi: this is bloomberg. ♪

haidi: we work dropped in trading. -- weibo dropped in trading. what do we know about the deal today? >> the company and shareholder raised 385 million dollars with the resting -- listing in hong

kong. they each sold 5.5 million shares in the company. stock in hong kong dropped as much as 7.6% in gray market yesterday. an indication we should see a drop when stocks start trading in a few hours. haidi: what are the broader expectations in terms of growth prospects for the company? >> it is a very interesting point to watch how investors will play the hong kong listing and the prospects for the company and growth near term. for example there was a drop in gray market in hong kong but also it was a positive session for tech stocks in asia and the u.s.. adrs in new york were up close

to 5%, ending a losing streak. this could indicate there is some potential good sentiment that should boost the appetite for weibo in hong kong as soon as it starts trading. remember, the price of the shares in hong kong are still higher than the equivalent of the adrs in new york right now. so investors have to take that into account when looking at the stock. haidi: the threat of being forced to delist in the u.s. by chinese authorities remains several years away. how one ev company will compete with tesla. >> they will be in a position in

the premier category, in the china market, the best product catered to chinese consumer demand and users as far as charging capabilities. so i think it will be a strong competing park to the consumer market. we plan to build the product in europe after china but i think this design will be a powerful package to compete with tesla. >> we have been following the delisting from the u.s. and we have seen slumps and other chinese tech stocks in the u.s. how is this impacting expanding -- xpeng. >> this is ongoing.

it will be several years before a final decision is made so there is still time for the chinese government hopefully work out something. in the meantime, we already completed a dual primary listing in hong kong, which means they can trade independently in hong kong without a u.s. listing. if that happens, we have the preparation already done to prepare for any eventualities. but i think this is something we are following closely and there is no definitive decision for another few years. emily: given the additional scrutiny coming from the chinese government, how confident are you that you will continue moving forward with your plans to expand in europe next? >> we have always seen

international strategy as the core strategic decision on the direction for us. expanding in europe is natural because it is one of the most mature and attractive ev markets. looking at smartphones and others, this product would be welcome in the european market. so we are confident with our appeal and design and that we will be able to attract consumers there. the chinese government is supporting chinese companies to go global so we are confident we would get the support from china as well as consumers in international markets. emily: would that expand to the united states, given the additional scrutiny from the chinese government? do you have plans to do that? >> the united states market will be large but more difficult to

tackle. we have to be fully prepared before making that decision. looking at auto companies that have made an effort to go into the u.s., it took decades to make it happen. but it is an important market that we would keep insight. haidi: we are getting updates from amazon saying the aws device issues have been resolved. this was causing consternation. amazon web services wreaked havoc on delivery operations, preventing drivers from getting on the roads and shutting down communications between amazon and they are of drivers. three service delivery partners saying the amazon app was down. but we are hearing that those

issues with aws have been resolved, according to amazon. we have more ahead on daybreak asia. this is bloomberg. ♪

haidi: softbank is looking to be

offloading millions of dollars in debt. $.85 on the dollar. yield under 10%. the ipo fell in 2019 for we work and softbank says this is a vote of confidence in the company that is still unprofitable. volkswagen says the family that controls the company managed part of their estate. the families might want to raise funds for a separate listing in the porsche brand. citigroup has chosen bidders for their consumer assets in several asian markets. leading buyers and indonesia,

malaysia, and asia. citigroup has been considering a sale of certain resell -- retail assets in asia as it focuses more on investment banking. the start of trading, the property sector remains front and center when it comes to the start of trading in hong kong. evergrande is in focus, headed towards one of china's largest ever debt restructuring. as it manages to do it, there is so much uncertainty about what the rest of the property sector will have to deal with. we are watching kaiser group that just extended trading in hong kong after a missed payment earlier this week. we are watching some other players given that refinancing at this point seems impossible with the state of the bond

market at the moment. coming up, how china's property sales are falling further in the last weeks of the year. outlook on the latest property sector. and we will speak with a representative from morgan stanley with strategies for the year ahead. this is bloomberg. ♪

difference in the

competition. we compete strongly in the marketplace after such a long time where it has only been one directional traffic from the u.s. to the u.k.. we made an effort to focus our efforts.

>> it is 9:00 a.m. in beijing and shanghai and here in hong kong. welcome to bloomberg markets. >> our top stories this morning, stocks and commodities rise on the eve of the omicron variant. contagion risks and focus. they have yet to pay bondholders for coupons that were due