>> good morning. we are counting down to asia's major market open. >> welcome to daybreak asia. asian stocks -- on speculation omicron will not derail the global recovery. studies show the latest strain may be less harmful than the delta variant. president biden says they have

averted holiday season crisis. haidi: as get closer to the holidays, we are seeing volumes across the board. it looks like we are marginally positive at this point. when it comes to the virus front, no good news. new south wales recording a record high of over 5700 new cases over the past 25 -- 24 hours. this as we are getting into the start of the holiday travel rush. we are seeing new zealand posting moderate gains. chicago nikkei futures have turned negative as we see asian stocks setting up for a steady open. get the dip in the dollar.

economic recovery despite disruptions from the virus outbreaks. good news when it comes to approval of the fda pfizer pelt. vonnie: let's look at u.s. futures. we are set up for a positive day tomorrow. today was in the green despite low-volume. as you said, it's counting down to the holidays and vacation. we are seeing s&p futures up a few points. the euro stocks 50 pointing to a higher open. christine lagarde speaking looking like debbie harry saying the ecb is ready to react one way or the other. the market trying to digest the difference between inflation becoming problematic and growth coming problematic in 2022 here and in europe.

we get u.s. data -- economic data in the u.s. and a few hours. futures for crude rising above $73 per barrel. new studies show omicron may be less likely to send patients to hospital than delta. let's bring in jeannie bauman. >> there are two studies. one that came from scotland and one from south africa. one in scotland suggested that the omicron variant lead to a two thirds reduction in hospitalization and earlier findings from south africa found that people there who contracted the omicron variant or 80% less likely to be hospitalized compared to earlier variants. it is still per limitary data.

haidi: we do have the pfizer covered hill -- pelt being approved by the fda. how soon will we be able to use it as a tool against an outbreak? ask the u.s. has purchased millions of treatment courses. it is a complicated drug to make so they are working with pfizer to wrap up the plot they set about 265,000 doses will be available by the end of january. they're hoping to get 10 million doses by late summer. >> staying on the virus, this takes a look at the best and worst places to be. our senior medical reporter joins us now more. we are seeing big changes in this index is the nature of the pandemic changes and metrics

change as well. where is the best place to be right now? >> the best place to be is in the southern hemisphere. it's not just because it's outside with whether. also, certain places in south america were not hit as hard delta is other places in the northern hemisphere. we are also seeing a couple of changes at the bottom of the rankings. some places in southeast asia. we are also looking at singapore which is the only place that is trying to transition in the middle of an outbreak. they were being hit by delta. still trying to open up the economy. implementing travel lanes, opening up a bit and hope is that they can dodge omicron. the lessons they learned with

grappling with the delta outbreak should serve them well with this next stage. it is still wait-and-see this point. vonnie: one thing we do know is that omicron is much more highly transmissible. this bodes ill for people returning from the holidays. >> your absolute right. people across the world are worried that they won't be able to get to where they want to go. certainly in places like hong kong, singapore, other places are cracking down on flights in and out. the idea that you could bring this virus to and the vaccines that they have received might not protect them over the holiday season is rattling a lot of families and especially companies and businesses. people who don't want to continue to deal with this going on and on.

there is some good news that it looks like omicron might not be as severe as delta. still, if you are unvaccinated and you get this or you have other health conditions, maybe things you don't know about, the idea that this variant is going to cause a spike in cases inevitably hospitalizations and death will follow. vonnie: thank you for joining. let's get to first word headlines. >> we're going to start with president biden who says he succeeded in stopping a supply chain crisis. his administration has launched several measures to improve the flow of goods through u.s. ports which will also receive billions of funding through the

infrastructure law signed last month. >> we brought together business and labor leaders to solve problems. the much predicted crisis did not occur. packages are moving. gifts are being delivered. shells are not empty. >> moving on to the bank of thailand, it held its benchmark rate unchanged. it is at a record low 0.5%. it also lowered its gdp forecast for next year after assessing that the omicron outbreak would affect the economy early 2022. it canceled reentry for tourists earlier this week. xi jinping has told a hong kong leader that the city is developing in a good direction. it was the first face-to-face meeting in two years coming days

after an election installed a legislature of communist party loyalists in hong kong. local media reported he praised changes made to the electoral system although there was no word on reopening the border which is one of her top priorities. u.s. aviation regulators have proposed modification to some boeing jets that use pratt & whitney engines. earlier this year, the engine on a united airlines jet broke apart and sprayed the plane with shrapnel. only united flies boeing jets with those engines in the united states. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. haidi: still ahead with the holiday season upon us, a

charity fund tells us if people are feeling more generalist -- generous this year. and we talked and investment manager about their strategy going into 2022. this is bloomberg. ♪

>> year end liquidity is pretty terrible. >> we think the s&p still has more volatility. >> virus fears are perking up. >> the omicron variant. >> here we are again still dealing with the virus named after 2019. >> it's going to be a challenging market. >> there is so much uncertainty. >> the bigger question is what regime are we going to next year?

>> is going to be a roller coaster ride. >> challenging 2022. haidi: some of our earlier guests on the wild ride through the end of next year. one says he is prepared for better things year. brian jacobson joins us. he calls this a sweet spot going into. is that pollyanna given the risks of a policy mistake, what a more severe variant can do when it comes to the return to normality? >> it may sound pollyanna-ish. i think it's about a rational assessment of the various risks out there. not just the possible outcomes, but the probabilities around those outcomes. to us, a good case case is still

that we have better growth in 2022. the slowdown in the third quarter of 2021. possibly extending globally through the fourth quarter. we think that we could see three excel or an of growth locally. than a lot of the supply chain issues beginning to resolve themselves by the natural functioning of the markets. there has also been some concerted policy intervention to get goods off of. for the most part, we think we could see decent growth, lower inflation pressure. that just means central banks don't have to be in a hurry to take away the accommodation. that's one of the reasons why we think it's a favorable environment for staying overweight equities. haidi: in terms of the fed policy question, you're saying it's not transitory.

there's a chance that they will be proven wrong. where does that leave monetary policy and assessment of when we will see tightening? >> it comes down to a look at policymakers, i think about it in terms of investors as well. sometimes you look at the moments of capitulation. when the last bull has turned irish or the last bear has thrown in the towel. with the word transitory, chair powell got fed up. he said his gone on longer than we thought. he wanted to retire that word. now that they have embraced the idea that we have to do something about inflation, is going to get to the point with declining inflationary pressures where there's not a lot they need to do.

this can hopefully resolve itself naturally. vonnie: when did interest rates anchor inflation? what do you tell your investors? >> i am working on a draft for the holidays for clients about inflation. i think it boils down to trying to put it into the context about we have these extraordinary policies and if the extraordinary policies become ordinary policies, then we would worry more about the long-term inflation outlook. right now, it seems like what we have is a supply chain stock that has affected prices. you have a lot of demand, this purchasing power potential confronting effectively a brick wall of the supply chain not being able to provide the goods and services that people want to purchase. that's not a permanent state of affairs. that is more a temporary shock.

it is likely to last from march to september 2022 where we can see this ramping down of the inflationary pressures. the concern about the large budget deficits, expanded balance sheets of central banks. we think the budget picture is going to slowly improve. we are already seeing signs of that in terms of being stuck in limbo with the build back better plan than balance sheets are likely to plateau then slowly shrink. these extraordinary measures are going to become the ordinary course of affairs. >> so much uncertainty. how do you write down anything certainly? we don't even know about omicron regardless of future waves. >> that is very true. we write these things down, it

always has to be with humility. what we think will happen, what if we are wrong? what are the different scenarios? a portfolio is a prediction about the future. i hear a lot of people talking about markets like uncertainty. the fact is, uncertainty is the bread-and-butter of markets. it's the difference of opinions, difference of outlooks means that investors get compensated for the risks they take. we have seen equity markets selloff those yields can come down. bonds can diversify. they don't do that much more for you. in some parts of the equity

markets like energy, europe and emerging markets, we do think that investors are compensated for those risks. >> we will get your results in a few weeks. be sure to tune in to bloomberg radio to hear more from the big newsmakers and get in-depth analysis from the daybreak team broadcasting live from our studio in hong kong. plenty more ahead. stay with us.

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haidi: we are tracking the fallout of the global supply chain crunch. joe biden says his administration together with labor union companies succeeded

in averting a supply chain crisis. he met with top officials and business leaders. india expects a dozen semi conductor manufacturers to start setting up shop in the coming year. they will start taking applications for the incentive scheme from january 1. the world's biggest container line is acquiring a hong kong-based company in a deal worth $3.6 billion. land-based logistics have just become more profitable than sea-based containers. taking a closer look at port congestion. one source says issues are worsening with no indication of an improvement.

analysts say congestion make it worse over the next six weeks. terminal users can read more about those stories in our newsletter supply lines. haidi: citigroup's global chief economist says he is remaining hopeful that we will see some improvements in the first quarter of the year. >> i think the role of the coronavirus in the pandemic in these disruptions is absolute critical. probably not emphasized sufficiently. specifically, i see the arrival of the delta variant during the late summer and early fall as being an important contributor to the staff and the ports we saw later. specifically, what happened is

it makes people less comfortable to spend on services and throws expenditures back onto goods. it also created a significant production disruption in asia. i think if we see further lockdowns in asia, u.s. consumers continue to be in a place where they are spending heavily on goods and more reluctant to spend on services, it means these supply chain disruptions which fundamentally are about the demand for goods are likely to be more prolonged. i see the pandemic, omicron, and whatever other variants we may run into being a key causal factor in shaping what these challenges look like during the coming year. >> that takes us to the question of inflation.

the white house and the federal reserve has pointed the finger at supply chain disruptions as causing the inflation concerns right now. in your estimates, inflation will start to come down next year, but there is upside risk. >> with inflation, we are caught right now between a rock and a hard place. on the one hand, if the pandemics more severe, that means the goods inflation is going to continue to run higher than expected. on the other hand, if the pandemic eases and we get the progress that is in our baseline on supply chains and substitution toward services, then we are in a world where the huge question is is there going to be enough labor to support a more wholesome rebound in the services sector? i think that is a big question. will the labor market, date --

accommodate further expansion of production and hotels, restaurants, theaters and so forth? if not, what does that mean for wages in the sectors and pricing power in those sectors? my feeling is we will have some inflation next year and our baseline is likely to be less than six or 7%. whether it is above or below a baseline of 2.5% or the feds forecast 2.7%, that very much remains to be seen with lots of uncertainty and risk skewed to the upside. >> that was the citigroup global chief economist speaking to david westin. the ftc is pushing forward with antitrust scrutiny over amazon's cloud computing. it recently contacted companies to gather information about competition issues. the cloud business was put under

investigation during the trumpet administration. china telecom says it continues to continue plans to continue despite an order to stop. the u.s. government has cited espionage concerns, but says the u.s. lacks the authority to enforce the order. china telecom has been targeted for u.s. sanctions over national security concerns along with huawei and others. intel is facing criticism in china after it asked suppliers not to use labor or products from -- a new site infused -- accused intel. there have been more than 50 million views on social media. the u.s. has accused beijing of imposing forced labor. blackstone is said to be considering a sale of motel 6. the deal could value the motel 6 holding company at more than $1

billion. blackstone's retail arm is said to be working with advisors and is in the early stages of gauging interest. up next, a former vaccine minister. this is bloomberg. ♪

vonnie: we are counting down to the start of trade. in south korea, i guess company is facing legal action over green advertising. government officials are considering plans meant to stabilize and enhance debt markets. we are watching for the bank of korea's latest report. that is coming in about two hours.

in japan, the prime minister is planning record budget ahead of next year's election. the budget is expected to jump parted the latest business cycle indicator reading is expected in the next coming hours. and a drug has failed to win backing from japan health officials. this comes after the eu also rejected the drug. >> the former japanese vaccine czar criticizes the pace set by the health ministry. let's bring in our japan politics reporter. we have been talking about the unusually low death rate and the relative calm when it comes to the spread of the virus in recent weeks in japan. does omicron change that? >> yes, i think it very much does.

we have seen weeks and weeks of extremely low death rates and infection rates. the testing rates are also quite low in japan. we are now seeing a definite upturn in the number of cases nationwide on december the 21st, we saw more than 200 which compares with the previous weekly average of 122. your creeping up. as omicron comes in, we are seeing everywhere around the world it has been extremely infectious. this could be the calm before the storm and within a few weeks, we could be seeing another serious wave like we saw in august in japan. there were a huge number of cases every day and it put a huge strain on the medical system. >> why is the government so as appointed? >> the key to that is in those

words eight months. most countries forced their populations, most countries are saying six months. some are giving it a much shorter time. south korea has cut it down to three months. japan has some doses at the moment. 56 million on hand in the country. they have distributed those now to local governments, we could be going much faster. at the moment, we are seeing 0.2% of the population has had a booster shot. that compares with places at 24%. >> what other issues are they planning? >> we have not heard much about that. the number of cases is still pretty low in japan. they have been focusing on

border measures. there measures are the strictest among the group of seven countries. the prime minister is extremely aware that his past to predecessors ended up having to step down with low popularity and part of the reason they lost their public approval was poor handling of the virus. i think he knows this has to be the top priority and if needed, he will have to clampdown again. >> isabel reynolds reporting with the latest. leading trade groups have agreed to share data in an effort to resolve a standoff over a 5g service that is threatening to disrupt flights. we spoke with you just 24 hours ago on this. what are the latest development? >> as you say, several trade groups representing the aviation industry and the tele-communications industry came together to say that they

would begin sharing data. we have been hearing for weeks of frustration on the part of the aviation side that they could not get specifics about where towers were to be located and precise levels of power and where the antennas are and and that sort of thing. this will allow them to do a much more precise measure of what devices on aircraft will face actual interference. hopefully, that provides a path forward to prove -- avoid major disruptions of flights. >> how do we establish back? even if we have more data, how are we going to be able to say for sure what impact it has on ultimate or's and whatever else? who decides that? which agency at this stage, the

faa which regulates airlines, they are analyzing these signals. they're going to work with the manufacturers of these radar altimeters and they're going to do a case-by-case study that is airport by airport to determine if there is a risk. the aviation industry is notoriously cautious. that's part of the reason we have had such an improvement in safety. if they believe there is a risk, they will restrict certain types of procedures that would be at risk from this interference. >> fantastic reporting. the telecoms and airlines are trying to resolve a 5g dispute by sharing data. that will be the first step. let's get to the first word headlines. >> new concerns for anyone

flying this holiday season. the top medical advisor to the world airlines says aircraft passengers are two times or three times or likely to catch covid-19 during the flight since the emergence of the omicron variant. the international air transport association spokesperson says is this class may be safer than economy cabins. the omicron variant may result in far fewer hospitalizations than other covid strains according to studies out of scotland and south africa. researchers found the risk of hospitalization down by two thirds although it is much more contagious. preliminary findings and south africa show people are 80% less likely to be hospitalized if they catch it compared to other variants. pfizer's covid pill has been cleared for emergency use in the

united states. the drug is the first at home medication authorized for covid-19 in a large clinical trial, it was shown to reduce hospitalizations by 89% when given to high-risk unvaccinated patients within three days of the start of symptoms. and myanmar, fighting between government forces and ethnic guerrillas has forced people to seek safety in neighboring thailand. the thailand defense ministry says the fight -- most still being sheltered on the highs -- on the thai side of the border. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg.

haidi: coming up next, it's one of the big seized times of the year when it comes to donations. u.s. charities receive more than 40% of their individual gifts. next, we will talk to the international philanthropic to -- trust about whether people are feeling more or less philanthropic. this is bloomberg. ♪

vonnie: historically, the holiday season has been great for philanthropic donations. our guest is the head of one of the largest making institutions in the u.s.. 10% of charitable giving comes in the very last week of the year typically. that means we are about to be in for a big week except for omicron and the concerns out there. what has been happening for charitable donations this year? have people been giving more or less? >> people have actually been giving more. donors are stepping up because they are seeing an enormous amount of need. people have accumulated some money because they are spending as much. we are seeing charitable giving

accelerate. between last year and this year, it was up 5%. we think it's going to be up another 5% at least $471 billion is given last year and shared will gifts which is about 2% of gdp. as the gdp grows, giftgiving grows. we are looking at increases and americans being very philanthropic. december 31 if you don't get your gift and, you don't get to deduct it. >> he did say at the beginning of the year that some nonprofits would have to close thanks to the virus because there wasn't enough reserve to keep them going through the shutdowns. what happened throughout the year? do we see new ones, because of the problems? >> we have seen a couple of things. some mergers have happened or they have similar missions so to charities would join forces.

instead of closing, others have protected -- we saw them cut staff, to do more with less. there is burnout and a big burn on the staff, but we didn't see the 20% to 30% closing. we know that bigger charities are at less risk than the smaller charities. >> i thought it was interesting that you saw a big rise when it comes to funds going into education. i wonder if that had to do with how education has suffered and has been one of the biggest deficits we have seen throughout the course of the pandemic and at-home learning. >> i think education has always been a favorite place for americans to put money because the idea of if you get a good education, you can move yourself up in the economic world. that did not go away. schools and universities in the

u.s. raise money aggressively. people see education as a ticket to making other people move up the economic ladder and it is really great tradition that gives people who couldn't order -- otherwise afforded to help people along. >> you also say you are seeing donors giving more complex assets. stocks even real estate. what about things like alternative investments? are people giving crypto holdings? >> we are seeing crypto holdings. also portions of privately owned business partnerships. all sorts of assets can be donated. the trick is, the charity needs to know how to take it. it's probably too late in the year to start now, but if you're interested in giving a nonliquid asset, you need to start in october to see if it would past the threshold of most charities.

people with these assets often think of it on their own. it is almost always there advisors who suggest you can take this asset and turn it into one that can be made for charitable giving. we like doing it, but you have to be careful when you do it. >> give us some advice. there is a lot of scrutiny throughout the year because we saw billionaires of away a lot of money. if you want to give to charities or to philanthropic organizations, how do you best go about researching them? >> like you research anything else. talk to people you know and respect who are seasoned charitable givers. google and read the newspaper, read the annual reports, the nine 90's. then make fewer large gifts. if you're giving $100, don't give five dollars each to 20 charities. pick fewer charities and do $50

each. spread yourself thin. stay with those charities for a while. have confidence that they have good leadership that they know how to solve the problems they are set up to solve. stay with them for three to five years. it is super expensive for charities to raise money and if they can rely on predictable donations and make them least restrictive as possible, don't your market for small programs or minute causes. absolutely, give them some freedom to decide. fewer larger gifts. invest in them for more than one year at a time, don't be fickle. >> you can watch us live and see our past interviews on our interactive tv function. can also dive into any of the securities or bloomberg functions we talk about.

you can also join in on the conversation and send us instant messages during the shows. this is bloomberg. ♪

>> the first -- of the coveted

jeff bezos -- has been awarded. we asked him why he chose to be a part of jeff bezos space efforts rather than those of elon musk. >> going to space is something i have dreamed of since i was a child. i want to catch up these trends. as long as i get the chance, definitely i think this is a very good initiative. the $28 million went to blue origin foundation club for the future which in turn validates charities to inspire the future generation to go into space as well. as well as i believe entering the space may become a dream

that everyone can achieve in our generation. >> tell us some names. who are you taking with you? >> right now, i haven't decided. they will be nominated very soon. >> i bet you are getting a lot of interesting phone calls from friends. you will also be taking the flag of the caribbean nation grenada as the new wto representative. how did that come about? box first of all, i will be representing grenada to work for wto. to represent grenada peoples interest in wti. most importantly, i think is about to promote digital economy and blockchain economy in wti

and grenada. i also want to include a more space to work together. i also believe blockchain and the economy is the last big chance for caribbean islands. >> why did you choose jeff bezos over elon musk given that he is your fellow tripped out -- crypto bro? >> definitely i want to partner with elon musk space exploration as well. i am also extremely happy to collaborate with jeff bezos and his company the origin. we note jeff compared to elon musk, jeff bezos is not like very active in the crypto industry. it might be a good opportunity because we have way more

collaboration chance with jeff bezos than with elon musk. >> our conversation with a blockchain platform founder. you can absolutely understand how wall street or's who might be getting more than ever in their lives this year might still be tough -- to see someone that young be able to go to space and bring five friends with them. >> it's interesting because he sort of got into hot water when it comes to how he spends his money and promotes. back in 2019, someone one and auction to have lunch with warren buffett. in that lunch, we told him to buy tesla stock. he had to apologize to chinese social media for the excessive promotion of the event with one

of america's richest people. he certainly does make headlines wherever he goes. it also ties in with the displeasure we are seeing with billionaires like jeff bezos, elon musk sending people to space. spending all this money on what people see as a joyride when there are lots of philanthropic issues that could use that funding right here on earth. >> at the same time, you have to wonder if it's not really a great argument, not one versus the other. it is plenty of money out there. 20 of money being printed and all the problems of the world could go away easily with tweaks to certain policies. he's trying to be a diplomat. he is the wto organization representative from grenada paired.

>> tesla is searching after elon musk told a satirical website that he sold enough shares at the target of -- 10%. he tweeted he is almost done at trimming his stake in the eb maker. he started offloading holdings in november after tweeting asking if he should sell some of his stocks. on airline reports net loss. the company says omicron and european travel restrictions have weakened bookings. oil prices have rallied hard this month with the prices of wti up over 10%. taking a look at the options market, some say this is just the beginning.

what are you looking at and what is it telling you? >> we are looking at open interest. when you look at call options to early next year. february and march 2022. where you see the most interest is on the strikes with or call options between $80 all the way up to 90. we are at 73 right now. that might indicate there are expectations that we might see 10% to 20% more in terms of the oil price. west texas between now and march 2022 and that is where you are getting a lot of the bullish -- doesn't mean we have to get to those levels, we just have to move toward those prices for these bets to make money. the bullish bets are out there. >> looking forward to the charts

you have lined up for us. the market opens in seoul, korea and tokyo next. this is bloomberg. ♪

>> welcome to "daybreak: asia." i'm vonnie quin. haidi: i'm haidi stroud-watts in sydney. asia's markets have just open for trade. asian stocks set for a third day of gains after u.s. markets rose on hopes omicron won't derail the global recovery. early studies show the latest covid strain might be less harmful than the delta variant, but much more contagious.

intel comes under fire for suppliers not to use labor or products from for young. let's take a look at some of the indices just opening for trade. we will start with japan. nikkei is up about .5%. the u.s. session, likely to see lower volume. certainly in the u.s. also a few drags on the nikkei and topix, up .5%. one of them being as i. the drug with biogen did not get backing. we will keep an eye on that. yen, as well. unchanged, but well above one 14 point 12. talking about sony financials, 11420 being aligned line in the sand. moving to south korea. the south korean kospi also showing gains. up .5%.

once again, we will have to keep an eye on volume. stronger korean won versus the u.s. dollar, by about .3%. flows to the end of the year likely to be a bit volatile. haidi: we are seeing three days of gains in sydney. really a lot of traders would have gone off for the holidays, but the volume we see at the moment, we see strong gains. particularly with health care and financials. up .3%. we also continue seeing resilience when it comes to these risk commodities. aussie and kiwi dollars holding. fueled by bouts in stocks and commodities, and broader risk on sentiment. the aussie had enclosed -- having closed that. we are seeing modest gains off of the session highs for kiwi stocks in new zealand. vonnie: new studies show omicron

may be less likely to send patients to hospital than delta. it comes as a new pfizer -- to the stockpile of covid treatments. our next guest, let's bring in stephen glass. why buy moderna now? surely the gains are priced in. what is in the pipeline we should know about? >> moderna has a deep pipeline that they used in the windfall from covid to invest in the pipeline. the first is a flu vaccine. it will be a combination respiratory vaccine including the flu, covid, and rsv. that will have a lot of benefits for the medical community. instead of getting three injections, you only need one. it comes at a lower cost. the biggest cost of these vaccinations, administering them. you are changing the times --

number of times you have to go get them. in the initial phase one trial results, it showed about the same efficacy as a leading flu vaccine. but it has more severe side effects. we are waiting to see phase two results next year. that will have a big implication for the stock and the story. vonnie: that is part of the problem with these stocks. the asymmetric risk. if you win, you win big. if you don't, you don't. how do you balance moderna holding with your portfolio? >> that is a very valid point. in our view, you need to make those kinds of decisions, because they do carry more risk. you need to have things on the flipside that will actually reduce the risk in other ways. some of the ways we do that is a highly diversified portfolio. areas we are investing in our things from increased inflation,

that will benefit from interest rate volatility, and investing in more solid businesses, more solid regions such as in scandinavia, with a very strong balance sheet, issuance rate. so the short answer to a very valid question is moderna and stocks like modernity should be a smaller weight and be balanced with less risky stocks that don't have these less binary outcomes. haidi: i hate to return to macro and inflation, but we have to going into 2022. take a look at the hotspots as to where the price gains have been. energy, food, metals, gas at the moment, europe just going absolutely nuts. take a look at the fact the fed with its strategy is about optionality. how do you give yourself optionality on the inflation going forward as an investor? >> first of all, i want to add to your very valid point that inflation is worse than it seems

. that is because the largest component of the report is poor cpi, owners equivalent red. an estimate of how much homeowners would have to pay. at the moment, that is 3% in the official number. i corroborate what i see, home prices up 15%. we would adjust that. cpi would be a lot higher. no one really understands what drives cpi. i know it might seem like a shocking statement, but it is the truth. it is not a scientific measure. we saw it most recently through the economy leading up to covid, where they would have shouted from the hilltops that there would be an increase in inflation, but there wasn't. it points to the difficulty of pointing to inflation. there are five main theories, the monetary talks about the

supply. the point is, all theories are pointing towards inflation. that might not come to fruition. we have stocks that benefit specifically from inflation. derivative exchanges with interest-rate volatility, and market makers, which will benefit interest volatility coming from inflation. examples are cme and flow traders. inflation might not come through, in which case you want to have tech and green energy stocks. haidi: this is not a demographic or geographic market that we will naturally cover, but given it has a holiday theme. scandinavian markets, finland is one of your picks. why? >> scandinavian markets have a very high issue rate, which we

know is incredibly important. we are an esg focused fund, and we think it can have better results. across the board, they do. they have strong balance sheets. the debt to gdp in places like norway, 43 percent. compare it to the u.s.. in the u.k., 100%. strong balance sheets, demonstrating the resilience. also very innovative companies. look at global innovative indices, scandinavian countries are at the top. we think it is a region worth looking at. some of the regions we own, the leader in diabetes. medication, one of the industrial businesses, every rock benefiting from copper mining for electric vehicles. a leader in green energy. a leader in paper, plantation.

sustainable paper plantation. we encourage people to look at scandinavian countries for their safety, but also innovation and esg credentials. haidi: great to have you with us. stephen glass. let's get you this alert crossing the bloomberg. tencent paying a special dividend in jd.com shares. tencent resolving to declare a dividend in the form of distributing 400 57 million class a ordinary shares of jd.com. that is according to the hong kong stock exchange. the distribution is on the basis of one class a ordinary share of jd.com. for every 21 shares held by qualifying shareholders. tencent to pay the special dividend in jd.com shares to keep the mutual beneficial business relationship. tencent already owns indirectly

17% of outstanding shares. the filing says the last price of jd.com shares we are talking about is 170 point billion -- 27 billion hong kong dollars. let's get to su keenan with the first word headlines. su: president biden news. he has succeeded in averting a holiday supply chain crisis. he made the remarks out of a video conference with a supply chain task force and several business leaders, including the ceos of fedex and gap. they launched several measures to improve goods, also billions of funding for the infrastructure law signed last month. >> we brought together business and labor news to solve problems. and the much predicted crisis did not occur. packages are moving, gifts are being delivered, shelves are not empty. su: chinese president xi jinping

told hong kong leader carrie lam the city is developing in a good direction. it was their first face-to-face meeting in two years, coming days after an election and saw the legislature of communist party loyalists in hong kong. local media reported xi praised hong kong's electoral system. there was no word on reopening the border, which is one of their top priorities. in myanmar, fighting between government forces and gorillas has 4000 villagers seeking safety in neighboring thailand. thailand's defense ministry says villagers on territories held by the majority while still being sheltered on the thai side of the border. the thai army has warned retaliation if strayer turley shells land on thai soil. u.s. aviation regulators have proposed modifications to some boeing jets.

it is to prevent debris from flying loose during a failure and endangering passengers. earlier this year, the front of an engine on a united jet blows apart, filling the plane with shrapnel. only united operates those with the engines in the u.s. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan, this is bloomberg. haidi: one of australia's biggest investment managers tells us where $66 billion in assets under management. we will speak to the director of fixed income later this hour. up next, the best and worst places to be as the most transposable covid variant becomes the dominant strain. the latest covid resiliency report. this is bloomberg. ♪

vonnie: welcome back to "daybreak: asia." anti-trading in japan, dropped 7.9%. this after japan's approval of the drug it was developing with biogen further patients suffering from alzheimer's disease. the approval did not come. eisai said it would not impact its forecast much, but the market thinks otherwise. down 9.1%. the topix is higher. the nikkei, as well. haidi: let's take a look at singapore. dropped 19 spots in the latest bloomberg covid resilience

rankings. towards a transition of living the virus. let's get more details. leading the coverage of consumer health and media. such a difficult year when it comes to these multiple lockdowns and restrictions. finally the realization of switching to living with the virus. what progress is being made and what is it now? >> in singapore, it has been an interesting trajectory. they started off as a country trying to get cases down to zero, strict curves, contagion measures. we saw that in hong kong, places like that. when delta came in, we thought there was no keeping up with the virus. the world has to live with it. it is not going away. you have to normalize it. so people -- let delta in.

and at one point, the up cycle of infections and fatalities. they seem to have gotten through the worst of that. in singapore can be in that sweet spot. vonnie: let'svonnie: -- vonnie: let's hope so. there are other countries not as fortunate. if vietnam has taken the philippines' spot as the worst place to be during covid. talk about southeast nations in asia, which we should avoid. >> they really have -- vonnie: rachel chang. we are having difficulties reaching rachel. vietnam taking the philippines' spot as worst place to be during covid. the second-best place is ireland. the first best place is chile. i'm not sure if you were taking

a trip, but if you were, chile might have to be on top of the list. haidi: what is really interesting with the nature of the covid resilience ranking is how much has changed. previously we saw the likes of new zealand, australia really high on that. they really successfully practiced that elimination. covid zero being able to avoid all serious outbreaks. that has rbc changed. australia is moving towards living with the virus. new outbreaks, as well. those numbers are still relatively low compared to other parts of the world. into the holiday's asian, the expectation of the transmissibility of covid, particularly getting on planes, small spaces with people. bracing to see what the ranking looks like into january and february on the other side of this holiday season. >> there is the thought of traveling annie days.

but that is where the danger is. we will keep people updated in january. the baking winter liv-ex. china on high alert as the country -- winter olympics. china on high alert. now under a strict lockdown. the president discussing the challenges facing china. >> one of the biggest stories of omicron is the fact the chinese are trying to power through with their zero covid policy. they have the surveillance and lockdown capacity to do it. but the one thing we know about omicron, it is so much more transmissible. the chinese vaccines don't work very well. delta not at all in stopping transmissions against omicron. china is going to have the single biggest challenge in maintaining their existing

policies. i was talking to president rob post's team in south africa. part of the reason they are already almost through omicron is because most of the population has already gotten covid. and they are getting milder, young population, not as many hospitalizations. they don't even need to test it broadly. between china and south africa, therein lies the u.s. and europe. we are having a hard time figuring out how to change and adapt our policies to a disease that looks different than it did 10 months ago. >> one thing you have written about is it is not just policies and what they are about, but if they are coordinated or not. there has been a competition incoordination. >> it is so unfortunate we have learned no global lessons on the pandemic. it is very clear that we were

going to have additional variants that would pose big problems for the world if we weren't able to vaccinate the world. and we did it. we focused -- and we didn't. we focused on our internal challenges in every country. in some cases, every state, every city. the consequence of that, it took a long time before americans started doing vaccine diplomacy. there was not coordination between the world's largest powers. there wasn't trust. that put us in a more difficult decision responding to covid. >> i'm struck by the fact that in your note, you put the number one risk as internal in the u.s., which affects our national security interests. especially in the wake of the january sixth event. take us forward as we are about to have the anniversary and a midterm election. >> there is no question the united states, a lot of things we lead well around the world,

we are leading in vaccine exports more than other countries. we can lead on things like nato. we cannot lead on democracy. that was evident by the summit. but more broadly, no one around the world looks at the u.s. as a model of government they want to follow. and i worry. we are in new york for 9/11, we know what it was like. how devastating it was. but every year since, the country came together and 9/11 is a commemoration of standing strong and resilience. january sixth will not be that holiday. it will be a commemoration of a divided country. every year, it will show those divisions in very raw and visceral ways. i'm deeply concerned president trump is planning on making it a big rally and celebration speech , continuing the focus on his view of how the election was stolen and how patriots came into the capitol, which is a

false narrative, one that he was behind. i think it is a true danger as we look ahead to the midterms and 2024. the delegitimization of the democracy is something we have to be focused on. haidi: ian bremmer. plenty more analysis ahead. the vaccine institute director general joins us in the next few hours. this is bloomberg.

haidi: another volatile week for chinese property shares.

sir tuesday after the government issued a statement offering support for the beleaguered sector. it was abruptly delayed. let's bring in david ingles in hong kong. how do we read into this to gauge future policy? how do you have or spite when it comes to the holiday break, and chinese stocks continuing to trade? >> so much sentiment in the property sector, it is tied to policy. when the government puts out a statement on its own website and social media, saying "there should be an all-out out effort to promote the real estate industry," and screengrabs were sent to trading desks all around china, hong kong, stocks soared, and abruptly it was pulled and could not be found again. it leaves investors wondering what is the future of policy?

will there be tighter rules, further relaxation that we started to see? was the message from the government inaccurate, or was it simply premature? it left more questions than providing answers. that is why we saw the whipsaw impact on stocks, the a share market, and here. and the end of the year, coming up with the holidays this weekend. volatility is the key in what should be a fairly lower volume game right now. haidi: we have to learn a new name. tell us what developers say it will default. >> it is 41 of the contracted sales -- chinese developers. not a big player, but emblematic of the liquidity problems. the faulted in september and october. now it doesn't have the financial resources to meet its

bond payments january 24. a maturity of the $250 million u.s. bonds. another default from the chinese developer. haidi: steve engle in hong kong. i feel we will talk about this throughout 2022. every day in business brings something new. so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the most reliable network with nationwide 5g included. and you can get unlimited data for just $30 per line per month when you get four lines or mix and match data options. available now for comcast business internet customers with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities.

su: this is "daybreak: asia," i'm su keenan with the first word headlines. the latest on the omicron variant. it may result in hospitalizations than other covid strains. that is according to studies in scotland and south africa. researchers found the risk of hospitalization by omicron down by two thirds, although it is much more contagious. preliminary findings in south africa showed 80% less likely to be hospitalized if they catch

it. that is compared to other variants. pfizer has a covid pill that has gained clearance for emergency use in the u.s. delivering a more convenient treatment option for patients. it is the first at-home medication offered for covid-19. in a large clinical trial, it was shown to reduce hospitalizations by 89 percent when given a high risk of vaccinated patient within three days of the onset of symptoms. there are new concerns for anyone applying this holiday season. the top medical advisor to the world's headlines said passengers are twice or even three times more likely to catch covid-19 during a flight. that is because of the emergence of the omicron variant. the international air transport association says it might be safer than more densely packed economy cabins. the bank of thailand held its benchmark rate unchanged by 13

straight meetings, voting to hold it at a record low .5%. the central bank lowered its gdp for the next year after assessing the omicron outbreak would affect the economy in early 2022. thailand canceled quarantine reentry for tourists amid a spike of covid infections. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan, this is bloomberg . haidi: thank you. as we wrap up another calendar year, let's recap some of the major themes that swept through financial markets and bring in david inglis. among the big questions investors are grappling with, what of these themes will persist into next year? >> that is also the reason we've seen volatility moving into the last week of this year. people grappling with what

continues, and how inflation will continue. wrapping things up, the extremes we have seen. stocks, very simple. look at the s&p 500. almost as if we were looking at two different years. asia, msci on the way down. a really extreme dispersion within valuations. let's have a look at that. looking at hong kong, essentially half of the multiples on the s&p 500. let's put that on a chart for you. the biggest premium in 15 years -- or at least in 15 years -- between u.s. stocks over em stocks. does it continue? there is no reason to think it cannot. it is the underlying conditions. let's have a look at credit.

also when you look at em's, the discount put in place and risk premium comes within property high yields. higher rates had asian credit do ok. the lower rate in part, -- it takes us into the inflation picture and looking cross assets 2021. we have seen a year for commodity markets. it wasn't even close. and it really has -- i mentioned the inflation story going into next year. we are not done yet. the momentum in commodity markets going into next year. food prices, whether it is the u.n. measure, or our measure of commodity prices. 10 year highs. it also has a social component to it. haidi: david inglis there.

sticking with inflation with one of australia's largest institutional investors. they are calling 2022 the year of volatility. they say the apostle seat -- the policy exit phase will not go. beverly morris joins us now. you have 93 billion aussie dollars under management. when it comes to deploying that, does inflation have rates top of mind, but do you think they are better or worse pricing the risk of even higher than expected inflation? >> it has been a fascinating couple of years. i think the year of 2021 will be remembered as one where inflation -- the same as everyone is talking about. i think we recognized about 18 months ago inflation was a topic

that would be coming through. not necessarily the magnitude we have seen. but i think we recognize the huge amounts for investors and which globally we are going to trigger rising inflation investors are not expecting. at the same time, inflation assets in the fixed income market are extremely cheap. and we use it as a potential opportunity. and we have that for about 18 months. inflation -- inflation markets in australia have risen extraordinarily over the last 18 months. it may seem strange now. just when inflation is really taking off as an investor risk, we decided to call time on that

view. and we started to move to a neutral view on inflation markets. haidi: you talk about the expectation of euro volatility, because you don't necessarily see an easy landing out of the policy exit from the pandemic. what optionality do you keep within your arsenal, in terms of reacting quickly to some nasty surprises? >> i think being a fixed income manager gives up a range of opportunities, a range of instruments we can call at different times. we have kept 2022 as a year of volatility. it is largely because we are now moving into a different phase of the stockholder market. qe, policies, the beginning of rate hikes. some central banks have already started on that path.

even if you look at the last decade, that has proven very challenging for central banks to be able to exit from these policies. we think it is going to bring more volatility in financial markets as they start to react to those tightening conditions. we are not particularly worried about the globe -- growth picture. we think the private sector looks more sound than it has for 10 or 20 years. so it will be a fundamental. it is just one that -- exiting from policy stimulus has proven extremely difficult in the past decade. we don't expect the next year to be any different. haidi: i would love to ask how you handled the fed pivot. we look at the fed fund futures. fully priced in. three rate hikes next year. possibly even more.

talk about what you are telling clients when they say things like -- hang on, the breakeven hasn't really moved, the breakeven is still below 2.5%. less than 1.5% fun spread, wise. what do you tell them? >> it is looking at those breaks. even though -- we don't necessarily have of you inflation and stocks will suddenly fold. previous commentators mentioned, there is still price pressure coming through the system. certainly not a view of inflation itself. more a view -- markets are pricing rate hikes over the next couple of years. what we believe is even if inflation were to surprise us to the upside further, the reaction in markets would most likely be one where they would accelerate the timing.

there would be a natural cap on the breakeven rates. haidi: what are you anticipating? how far can we make forecasts with omicron and more variants down the line? >> great question. one of the really interesting features we have noticed, one of the main pieces behind the increasing expected volatility is what we are starting to observe in forecasts. a broadening dispersion. that hasn't happened since the gsc. the range of potential outcomes is getting wider. growth, inflation, particularly. historically, the wider range, or the more uncertain macro picture, has gone through to financial market volatility. it is a very interesting development. when the range of potential

outcomes, they will find it more challenging. as an active manager, it is why being very nimble will be important. vonnie: difficult, but interesting times. beverly morris, thank you for joining us. let's check commodities. also an interesting time. soybean commodities up 1.7 percent. following along our palm oil futures. double whammy for these. we saw those floods in malaysia really increasing concerns over transport disruptions and tightening supply. if one is a substitute for the other, they both go up. let's look at aluminum. we see it rising up more than 2.5% in london. alumina prices up more than 40%. demand is absolutely booming. one of the most energy intensive

industrial metals to make. so it is curbing production and sending them higher for aluminum. this really surprised me. prices of lumber back above. 3% higher. remember mid-november, futures started to rally? they rallied almost 75% since mid-november, $1014.80 per boar d. just like last year. normally the holiday season is quiet, but people are renovating and building homes, and supply is still tight. intel drawing criticism in china over not using labor from's in zhang. more on the human rights dispute in the region, coming up. this is bloomberg. ♪

haidi: intel getting drawn into a dispute over civil rights issue in china tied to the use of labor from the xinjiang region. for more, we will bring in debby wu. why are they under fire in china? >> intel said in a letter earlier this month that it has

been running short, it doesn't use any labor or -- from the far western chinese region of xinjiang. that is because the western government has imposed restrictions on that region due to human rights concerns. intel sending out that letter, china hasf criticized intelor siding with the western -- intel for siding with the western government. it has generated more than 250 million on china. vonnie: is it a new policy from intel? >> actually, it is not. it is just a repeat of intel's existing stands in its corporate

response report it released earlier this year. in that report, it said that the diligence check showed it does not use any labor or procure any goods or services from xinjiang. vonnie: thank you for that report, that is debby wu. plenty more to come. this is bloomberg. ♪

♪ vonnie: quick check of the business flash headlines. one of -- heading for a restructuring. the carmaker says they are unable to meet financial obligations. it said the fleet -- it follows the entry into the restructuring last year after a series of defaults. ryanair has cut since omicron surges across the u.s. at the airline now anticipates a net loss of up to 450 million euros. the omicron and european travel restrictions have weekend holiday -- weakened holiday -- tesla surged after elon musk told a satirical website he sold

enough shares to hit the target of reducing a stake by 10%. but he clarified on twitter that he is almost done and still has a few chances left to sell. he started offloading his holdings in november after he tweeted a poll asking if he should sell some tesla stock. haidi: he was responding to the results of the pole, or if he was intending to sell the 10%? i thought he was being more careful on what he said and put out there. you can't keep elon musk down. we will stay on tech. a dividend in the jd.com shares. tencent currently the biggest shareholder of jd.com. the dividend will reduce the ownership to just over 2%. let's get more from ed when chun , who leads our asia.

this is quite an unusual arrangement. >> it is indeed. chinese tech companies have relied on exceptional growth and mende to power capital gains for the shareholders. we calculate it to be in the amount of roughly $16 billion. it is unusual. it comes from the backdrop of what we have all known has been a really intense year. regulatory pressure, tech giants hoarding the wealth. vonnie: how will this impact both companies? >> those companies, by which i think you mean tencent investees, it is an open question. jd is one of many major chinese tech companies tencent has a major stake in. it is an open question as to what it intends with the other

companies. it includes stellar names such as didi, billy billy, the list goes on and on. tencent did say it's strategy was to invest in the growth stage and gradually pulled back as those companies achieve scale and the ability to grow on their own. so i guess the market will read into that, but it will. haidi: as you said at the top, it has been a year of challenge and pain for a lot of tech giants. what does 2020 to hold? >> we see the regulatory pressure ease up, but also expand into adjacent areas. one of the open questions is china's intent to dismantle the walled gardens, the closed ecosystems companies like

tencent and alibaba perch actuate -- perpetuate. it was seen as one of the key players in that ecosystem in the sense that alibaba has been complaining for years that they get special access. for instance, links on tencent apps alibaba does not also enjoy . it may feed into that. but we will see how it plays out. haidi: thank you. great information from edwin chan joining us. vonnie: chinese ar firm likely -- offering at the bottom of its marketed range. this amid concerns of u.s. sanctions. it is ahead of its expected debut set for a week from now. let's bring in paley in hong kong. this is the company washington alleges is using its facial recognition ai to help china in

alleged oppression. the bottom of the price range, give us an idea of how much they are being raised at what the company might do. >> the company said they will use the money for future technology, and likely raise 740 million u.s. dollars at the current price. it came suddenly for the company. it was just about a price earlier this month. then it was added to the section list. a day before the pricing. so they had to rewrite the ipo and do it over again. haidi: they said earlier, the dynamic and evolving nature of the relevant u.s. legislation prompted them for u.s. investors -- to spur u.s. investors from this. is this a trend we will see

coming forward? it is a risk for chinese company, particularly tech, sensitive sectors, to be looking to list abroad at this point. >> definitely. a lot of people are watching this very closely. samsung has been really caught in the crosshairs of china-u.s. political tensions. it is going to be the last major high-profile ipo this year. and everybody will see how things go as the u.s.-china tension drags on. haidi: our ipo reporter, pei li. let's look at some of the stocks we are watching. the start of trading on the chinese mainland and in hong kong. a deal to distribute buy in tech and pfizer's vaccine in greater china after pfizer spill cleared the fda emergency use authorization in the u.s. china telecom is one to watch.

vowing to keep operating in the u.s., defying an order from regulators to cease operations due to espionage concerns. coming up in the next hours, we speak to the mentioning -- managing partner to tell us about the risks in chinese markets that we really hit. we will also hear from an investment manager on why china a-shares are underrepresented in portfolios and major indices. vonnie: let's take a look at u.s. futures before we head out. we are looking at a higher open. that data out later on. the market will be looking towards that. low volume expected. the taiex looks to open higher. and the ftse futures up .4%. the fixing in china in about 20 minutes. david inglis will break it down. continuing its trajectory. the offshore yuan.

that is it from "daybreak: asia." our markets coverage continues. looking at the start of trade in hong kong, shanghai, and shenzhen. this is bloomberg. ♪

dave: 9:00 a.m. in beijing, shanghai, and hong kong. i'm david english with yvonne man. we are counting down to the open of trade in the chinese mainland. yvonne: asian stocks steady after rallies on hopes of the economic recovery weathering through fresh virus outbreaks. studies showing the omicron variant less severe than other strains. china taking no chances as it tightens restrictions