>> good morning, we are counting down to asia's major market open. shery: welcome to daybreak asia. >> investors weigh omicron concerns as so markets can set to kick off trading in 2022, oil traders hoping that opec will boost output. the variant sees goldman sachs to become the newest back name

-- bank name to return to the office. a year in which many joints of an exclusive $1 million club. shery: futures opening higher, reversing a little bit of the gains. reversing the trend we heard last week on low volumes. we have seen it two sessions of losses. nasdaq surging about 27%. opening higher around 75 u.s. dollars per barrel. this is as we are heading towards the opec-plus meeting on tuesday. we will get more meeting on what we will see in terms of supply for 2022. futures are under a little bit of pressure. we are seeing the cause coming back after nudging a gain for

2021. we see so markets are closed, it will be a allow for and then trading day. -- it will be a low trading day. australian equity markets and kiwi equity markets are closed. it will be about how the markets react to the latest variant headlines. in the u.s., we see the new record highs, we have new york state hitting a record high this weekend. dr. fauci is telling us we will see these unprecedented new cases in hospitalizations, especially in many unvaccinated americans. >> that has caused a bit of a re-think for goldman sachs as well. they have been a champion of the return to office idea. they have stopped asking -- they have started asking employees of they can work from home until

january 13. this is following citibank in taking a more careful stance as the omicron virus continues to rage. shery: we continue to watch these covid headlines, if the markets can defy them again this year. we saw the outperformance of the s&p 500, it was the 30 or so that we saw high double-digit growth for the s&p 500. this index is now doubled since new year's of 2018. it has been two decades since we saw those three-year year returns of topping 100%. last time we saw that was during the dot-com bubble. we will see this in march higher in 2022 as well. >> it is a theme that traders are expecting will continue into asia as well. strength for stocks in china in particular as policymakers they

are pledged to support growth. china seems to be keeping its borders closed until after the winter olympics. strong growth, that could away on assets in the retail mania in south korea and india, showing signs of fatigue. these are some of the things will be -- we will be keeping an eye on. shery: the omicron is spreading in the u.s., adding new testing requirements to last week's move to shorten the isolation period for those who test positive. let us bring in fisher with the latest on what is happening here in the u.s. what we make of the surge in cases? the infections do seem milder?

>> that is the one million-dollar question. what to make of numbers we could not imagine. even a month ago. one in three people in new york city are testing positive as school is set to start on monday. florida, texas, california, a bunch of other states. hitting numbers. higher hospitalizations. again, people feel it will only get worse if this goes on. another question is, how bad will it be against hospitals? that will be the measure of the omicron variant. it appears other people get sick less, it is a magnitude of five-10 times more people get sick. a fraction of a very large number is still a large number,

hospitalizations are going up. we do not know if this is going to stop. >> we are two years into this pandemic, are we seeing a preview of what living with the virus looks like? is it becoming endemic? >> i think so. we are getting to the point where everyone who is going to get it, or everyone. what kind of protection do you have? are you vaccinated? are you boosted? i do you follow social distancing rules. all of those things have to do with living with it. some people believe that living with it is different. you go on with your life as normal. the hospital statistics and death statistics show that people who take care tend to fare much better than those who do not. living with it, you can approach it in a lot different ways.

the outcome depends on what you do. >> all right. the situation is made even more challenging in terms of sticking to return to office plans. goldman sachs now delaying its return as well. we bring in a finance reporter. how much of a pivot for this is goldman? >> it was just last week that goldman sachs was doubling down on its efforts to bring people back to the office. it said that employees must get a vaccine, booster, and they want to people back in the office as soon as possible. what a difference a few days and makes in this omicron variant. as we have seen, goldman sachs on sunday not coming out and telling its employees about the bank is happy for them to be continue to work from home. -- to continue to work from home

until the 18th of january. it is still behind some of their peers when it comes to that deadline. they have done a bit of a backflip here. shery: what does that mean for their business? >> as we saw, goldman sachs has recorded record results. all of these banks over the past year or two really have not been heard at all by having their staff working from home. you see dealmaking, we had a record year, more than $5 trillion of volume globally. i think that most of the staff would say what difference does it make? we are delivering the results. at goldman sachs, that will lead to something like bonuses, bonus jumps of about 50% this year which is massive. so far, people would say that the evidence is that the business, that there is no reason it should be affected by

working from home. at least in the short run. shery: despite the challenges surrounding covid-19, tesla has smashed its previous level -- record for deliveries. it has joined the $1 trillion valuation club. can they sustain this momentum in 2022, given the spread of omicron? it will lead to more restrictions surrounding their factories and outputs? >> it is a great question and time will tell. they are coming into this year with a lot of momentum. they have really strong demand and they have clearly done a good job of navigating their way through covid and the semiconductor shortage that is affecting automakers around the world. whether they can keep that up depends on the obstacles that

end up confronting them. it is a big looming question for tesla as well as for other automakers. >> what is the hardest market going to be for tesla in 2022? >> there is a lot of speculation based on today's report that china is a particularly strong market for tesla right now. tesla does not break out the geography of its sales. in the next few weeks, we will learn more on the earnings call and other venues about exactly what is driving their sales. china and u.s. are the biggest ones. those markets are doing well for tesla. >> let us get to bonnie for the first word headlines. >> china's property developers must find or deny $7 billion to

cover maturing bonds, and deferred wages to millions of migrant workers. that is a bigger bill than the last two months combined. they have asked for payrolls to avoid. social unrest. -- to avoid social unrest. oil analysts expects opec to supply more supplies when they meet on tuesday, underscoring optimism. the alliance is likely to proceed with a modest monthly hike next month of 100,000 barrels a day -- 400,000 barrels a day. kim jong-un is focusing on restraining food shooters -- shortages and covid. his comments appeared to take the face of it traditional new year's day address.

the leaders of economic projects are under difficult positions. a rare admission of the strains the government is facing. south korea says a person has across the border into the north. the person was captured in a thermal imaging device on the eastern front on saturday. they failed to locate the person and asked pyongyang to ensure the person's safety. 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. shery: coming up, and look at the year ahead for japan. economic advisor expert says a new and stronger country is emerging and tells us what he thinks this time is different. next, the market outlook from our analyst as the trading d

ay gets underway.

>> it has been difficult to really predict on a weekly basis how cases are going to go. there is data and south africa showing that the surge has fallen off as quickly as it has increased. hopefully that will happen in other places as well. >> i hate to say that we accept that everybody gets it. we do not know what the long-term impacts will be. i think we have to double down on the masking. we have to emphasize and encourage vaccination. >> antibodies are the body's natural defense molecule. your body spreads lots of antibodies all over the body to protect yourself against getting reinfected. with modern technology, we can

sample the blood and pullout infection fighting cells, we can make a single antibody that can do the job for a particular virus. the antibody is called a monoclonal antibody. >> if we continue having so many places and populations not vaccinated, we will continue with this pandemic. we will need to job ourselves more often. -- jab ourselves more often. >> let us discuss and bring in a market analyst. thank you for joining us. omicron appears mild in terms of health. what are they not guns from absenteeism from work, consumption confidence, what do you see the effects being of this? >> there are multiple, obviously.

again, that gets pushed back a little bit. it slows down what we are looking at in terms of the close potential of the -- growth potential of the economy. driving cost pressures. a little bit of inflation across the world which keeps a policy makers monetary policymakers behind as they try to continue to foster from economic conditions without running the risk of runaway inflation. i think this pandemic, there is a line in the sand, and will be with us for quite some time. some of the issues we saw in 2021, the effects of slower growth and higher inflation, it will continue to push into the new year. the city $4000 -- 64,000 dollar

question now is the infectiousness of the virus. to see it rise in fidelity's. -- fatalities. that leads to lockdowns in parts of the world. we are in the midst of the storm. it will continue into 2022. it will be more difficult to deal with. >> against these growth and inflation concerns as a backdrop, we have conversations around central bank tightening. stagnation is a word that plays on your mind? >> i think that is something to keep account of. we have been talking about stagnant inflation. we have been seeing the hot inflation numbers added to the united states. we are still seeing employment picking up across the globe.

especially in the united states. growth is still positive. it is still moving higher with inflation. it is the textbook definition of stagnant inflation. i think there is a little bit of a bind. because we have disruptive labor markets, we have quite tight labor markets, we are starting to see the risk of runaway inflation. we have this wage price spiral our fourth bankers to tighten policy much quicker. tighten it into a weaker growth environment. that is the biggest risk for markets to start the new year. i think that is going to be where the conversation resides. we see a pickup in wage growth, we see our wages are quite negative. that is when we start to see real volatility emerge in the markets. shery: how many wage hikes do you expect in the in 2022?

that would have consequences in developing economies and asia. >> i cannot forecast, i try to remain wary of what the curve is doing. of course, we have a 30% chance of a rate hike in march. the fed itself has forecasted in the foreseeable future, price hikes or so. i believe it depends on what the fed tries to do in terms of raising interest rates and trying to bolster a progrowth environment that would be good for financial assets. in real terms, monetary policy is very accommodating and remaining behind the curve. going forward, for me, it is about whether we start to see

signs of runaway inflation, that the brakes have to be slammed on the economy. if that has to occur, you will see risk assets we can of higher real yields. you see the bearish scenario playing out in the markets. it is all about the question of tightening rates without pursing the bubble. shery: we have not seen them get ahead of a market expectations in terms of that tightening move, right? that helps proposal -- propel these big tech valuations. will this continue to play out? >> everything has become a bit of a momentum trade. everything is driven by the fact that real yields are quite negative. not only that, effectively, we

are starting to see the situation as deeply negative. that is bolstering asset prices. we are looking at asset growth that is petering out. it is not going to be negative, there are concerns that it will get inflation underway. we will send central bankers into panic stations. the upside momentum can run out and turned down and south -- turn down and south very quickly. that has to be supported for equities. it will be momentum liquidity story. at any point, the inflation data starts to come in quite hot and when the momentum turns negative quickly. >> are there assets out there that looks like a bubble?

>> i think everything looks quite overvalued if you draw the line at historical evaluations. if you look at the relative yield play into stocks. if we were in a situation, if you are a long-term investor, you do not want to put your money in the market right now because it is so in attractive. if you are on a shorter-term timeframe and expected to make money in the terms and quarters, if you have no choice than to play into that momentum, despite the fact that value is difficult to find, especially in the stock market. i think the long-term strength is going to be in that kind of percentage growth and equality plate. the problem with that is the big tech names. that appeal, every retail investor and smart money as well once exposure to that too.

it is a very precarious environment. shery: many uncertainties going into 2022. thank you, and happy new year. a roundup of the stories you need to know to get your days going. you can customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪

shery: here is a quick check of the headlines. airbus ended 21 with a lead over boeing. boeing had amassed 428 plana lead, -- plane lead.

later orders helped airbus surpassed boeing by 58 planes. 5g mobile service, airlines say might interfere with aircraft electronics. the ceos of the companies say they are willing to possibly mid near certain airports. at&t and verizon say that the power level will be low enough to avoid interference. the latest spider-man movie has hopped to the top for the third week in a row. i have to really go wash that movie, hoping the omicron passes quickly so i can watch it. a look at the ahead for japan with economic advisory expert, a new and stronger country is

emerging, or this time is different. this is bloomberg. ♪ and there you have it. woah. wireless on the most reliable network nationwide. wow. big deal. we get unlimited for just 30 bucks. sweet, but mine has 5g included. relax people. my wireless is crushing it. that's because you all have xfinity mobile with your internet. it's wireless so good, it keeps one-upping itself. take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes it easy to switch and save hundreds. >> the first word headlines.

australia's prime minister is searching for covid symptoms. a potentially infectious person attended a press conference on wednesday, under the state's covid guidelines he does not need to self-isolate. singapore has recorded more covid-19 infections in passengers from abroad then local cases in nearly six months.

singapore has frozen ticket sales until late january. u.s. travel delays continue as winter storms sweep eastward and carriers deal with the rapid spread of the omicron variant. more than 2000 flights within the u.s. were canceled as of midday sunday. more than three houses 600 --3600 delays are already posted. this comes as thousands of travelers attempt to return home after the holidays. goldman sachs is asking u.s. employees work from home until they can until january 18. this comes after the bank's major peers adopted a more cautious plan as omicron spreads across the nation. global news 24 hours a day, on-air and on bloomberg

quicktake, powered by more than 2700 journalists and analysts in over 120 countries. >> gains in japan's equity market. commodities related groups also made the best performers of the topics. 2020 pandemic winners like health care drop down to the bottom. video game makers tumbled a fast retailing also rained a notable decline -- ranked a notable decline. bullish on sectors like autos and real estate. there is a strong chance that japanese stocks outperformed in 2022. shery: our next guest believes a new and stronger japan is emerging. he credits that to three forces changing from negative to positive in the country. let us bring in executive

director and professional japan optimist, great to have you with us, happy new year. >> happy new year! shery: you have admitted that any time you are this positive about japan you get the reaction from what hard-core elvis fans essay, that the king lives on. -- say "that the king lives on ." >> you see it. employment growth has been accelerating, not just in terms of the quantity of jobs but the quality of jobs. japan is creating full-time jobs rather than part-time jobs. that is good purchasing power for the japanese people. the most important investors is the fact that there is a new generation of corporate leaders. they are focused on actually

having growth strategy. they are not free to divest the non-core businesses, they take action, they have forwarded looking executives, across the small corporations and from that perspective it is the fact that leadership in japan, wants to actually generate returns. that is why people are good on japan. shery: the new prime minister did not actually talk about reform when addressing parliament? >> it is interesting. as an investor i wanted politicians to be steadfast, not to be stop, go. the one thing that the prime minister is predicable. he does give us a record supplementary budget. the only country with a physical accelerator that continues to be pushed. the bank of japan continues to

be accommodating to the federal reserve. talking about heightening and stepping on the break, this is not going to be the case. that prime minister, ignore him, he does the right thing for business. he does the right thing for investors. >> isn't reform needed in japan? or is that a dirty word? >> reform is actually going on but it is not the sort of radical, something really big changed overnight. it is step-by-step, gradual improvements. the key point is we are now at a point from a corporate perspective where japanese corporations have actually reformed, cut costs, there breakeven point or incredibly low. look forward to a wave of upward ways of upward profits that will drive the market higher. >> have you seen a time where

interest rates are in positive territory and we see an end to qe in japan? >> we have an incredible place where the buying power of japanese people continue to rise. costs are falling. communication costs are falling. outside of japanese prices -- out of fuel prices, all is falling. it means that yes, the central bank, the bank of japan has absolutely no smoking gun, no reason to actually increase interest rates. you will see interest rates in japan at zero until germany becomes the soccer world champion. shery: we see a spring wage negotiation, how are those going to go? because they help with the inflationary pressures there -- could they help with the

inflationary pressures there? >> one in five japanese companies has agreed to increase wages more than 2.5%. that is up from 10% of companies last year. what you have is a demographic sweep coming through. the fact that the number of high school and university graduates is actually declining as a result that the labor market is a buyers market, the younger japanese are getting higher pay. a new middle class is being born here in japan. shery: helping the new capitalism drive, what is your take on that? will we see a new japan emerging from this new capitalism drive? how different is it from what previous administrations have tried? >> when you look at the prime minister's actions, he is what exactly what prime minister abe

has been doing. fiscal policy, pedal to the metal. in my opinion, should focus on individual accompanies -- companies, toyota, m3, these are companies where corporate reform , corporate leadership, the next generation of ceos is actually taking action. they want to grow and they do want to return profits for all of the stakeholders including the shareholders. shery: always great having your insights, especially at the start of a new year. japan is away on holiday, we do have the japanese yen trading up 150, to the dollar. south korea, the first major asian market to open in 2022.

these are the source we are watching, the president making his new year's speech. his five-year term ends in may. this is as the country extended its social distancing rules which have been set to expire today --january 2. stock and fx markets will open later, they will close as usual. commodities surging over a decade in 2021, this as piquant also saw a banner year. we dive into the 2022 outlook next. ♪

shery: let us take a look at some commodities and crypto assets. we have seen a huge rally for wti above 60% gains in 2021. we will see that rise, opec is meeting on tuesday. the expectation is that they will add a modest amount of barrels. we are seeing the earlier losses we saw in the previous session, they had a rocket finish to

2021. they had the worst month since may or so, for the cryptocurrency. we continue to see more investors getting into the action with crypto. >> let us take a look at what is in store for commodities. we have a bloomberg energy reported with us, stephen, what is opec's next move in terms of overturning oil to the market -- in returning oil to the market? >> there is an expectation that opec has been signaling that there will keep with their production increase. according to a bloomberg survey, of analysts, most agree that is what is likely going to happen. opec has taken the view that omicron and the recent outbreak

in europe and the united states will be a speed bump for demand. they do not see it having an enormous impact. they think that the market will tighten quite a bit going into 2022. we are going into a new year. going forward, they will have to try to strike a balance to make sure that the market has enough supply. that weight when demand rises, there is not any shortage of oil and price spikes that could cause inflation concerns. they are walking a tight rope but there is an expectation that they will add to the supply when they meet on tuesday. shery: tell us about the bullish factors of the keeps opec thinking they can return supply to the market? >> there are some positive signs out of china. china had a down because if there were to be a covert outbreak in china, you could say that they will have a large

pass. from friday, officials showed that china's manufacturing sector actually caved in december. the purchasing manager be estimates -- beat estimates. are powerful remains pretty robust despite the omicron outbreak sweeping across europe and the united states. when you look at inventory levels, human tories of oil is still quite low. opec can add extra barrels and try to boost inventory globally to normal levels. >> let us talk about natural gas, it saw a pretty steep rise and then declined towards the end of 2021. what we expect to see as the new year dawns? >> i wish i had a crystal ball because prices are so volatile. they wrote to record highs --

went to record highs and then crashed the next week. supplies are tight, at the same time, a lot people are trying to get boosted output to help energy starved areas. going into 2022, we will see there will be periods where pressures could be spiking if there is a cold blast. there is not enough supply if inventories are low. if we have a mild winter, we could keep prices really falling in the next few weeks. we into the winter and 12 months, this is going to be a normal sort of thing ongoing where when it is cold, we will have really extreme reactions. that is going to be basically what to expect in this year. the name of the game will be volatility. shery: that is stephen's take on

what we will see in the commodity space in 2022. the major market open in just over an hour. let us take a look at the major themes for the region in 2022 with asian stocks reporter, we saw asian stocks underperforming globally in 2021. what are we watching out for in 2022? >> i am happy to be here, happy new year. it will be the china stock market. it has weighed on the broader asian markets significantly. when there will be a rebound in the chinese stock market, there will be a big focus for a lot of investors. another thing will be the retail investors, they have been

playing a huge role in driving rallies and countries like south korea or vietnam during the first year of the pandemic. we have seen the participation from retail investors increased as a cash out and move their money to cryptocurrencies. the role that investors apply in india, vietnam, whether they make a come back to the stock market or whether they come to show declining interest will be a huge focus this year. >> one of the other themes across is what you are watching is the soccer dollar, how will that way on the theme of emerging markets in china? >> the dollar's direction is important in asia and emerging markets. the federal reserve tapering out

a possible rate hikes will have a huge implication in countries like korea. chinese stock market, because they determined there is the fourth investors, 80 south korea, we have seen the dollar strengthened against the korean yuan, the local -- won, the local currency. that has been weighing on the local stock markets. the flipside is it is good for the exporters in places like taiwan or in south korea which take a big portion of the stock markets. we should take both sides of that into consideration. >> asian stocks reporter there. tune into the bloomberg radio to get in-depth analogies from the daybreak team. broadcasting live from our studio in hong kong.

plenty more ahead, stay with us. ♪

>> these are the top stories today. the vietnamese officials are urging china's wanghsi region to

open supply chains. thousands of trucks carrying vietnamese fruits and other agricultural products was backed up earlier this month because of the strict antivirus measures by china. gazprom missed its own conservative targets. gazprom's delivery to turkey fell short of their forecast by as much as 183 cubic meters. that contributed to the worst energy supply crunch in a decade. he supply chain nightmare, tesla has raced ahead of wall street estimates for deliveries and smashed its previous records. the carmaker delivered more than 300,000 vehicles worldwide. shery: we will be watching tesla's asian suppliers and arrivals when hong kong opens --

-- rivals when hong kong opens. you can read more about those stories in our magazine "supply lines." at&t and verizon has declined a delay in 5g mobile service that airlines say might interfere with electronics. they will posit appointment near certain airports -- they will pause deployment near certain airports. >> this issue has come to a boil lately. the aviation industry says that the wireless signals might mess around with or interfere with

some of the aircraft electronics that help airliners land. that is when you are in the most danger. the wireless industry says no, that they are far enough away in terms of frequencies that it is safe. the lighting up at this network, u.s. transportation officials said please, will you delay. at&t and verizon said no, we will not. this is quite a conflict blurring -- brewing here. >> how will this get resolved? >> we have to see. the wireless carriers said we might hold off on lighting up the networks near airports. that is a tactic used in trams. they say that we will do that if the aviation aside de-escalate a little bit and does not threaten

us illegally. -- legally. [indiscernible] shery: right. the latest on that 5g service across the u.s.. here is a check on the latest business flash headlines. microsoft fixed a bug that caused some messages to get stuck. blaming a new year related date checking failure, it offered two updates to fix both clients and individual servers. microsoft did not say how widespread the issue was. david beckham is selling 55% stake in his company to another brand for about $270 million. it will take a majority stake in db ventures which handles his

endorsement deals. airbus ended 2021 with a lead over boeing with a flurry of orders. boeing had a lead by october, however, later orders including those from kwanzaa and others helped airbus edge past going. the spider-man film has held onto its top box office a spot for the third week in a row. that is according to sony forecasts. we will get more on the outlook for markets in china and around asia, we will talk to --

this is bloomberg. ♪

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shery: welcome to "daybreak asia." >> we count down to the first asian market open of 2022. our top stories this hour, weighing omicron concerns as a many markets get sent to kickoff trading in 2022. betting that opec will boost up when they meet this year.

mounting bills as funding options shrink. delivery records and which automaker joined the $1 trillion club. shery: korea opening an hour later. we are seeing the s&p 500 futures gaining for -- .4%. this is after two sessions of losses. we had low volume and low movement. overall, a banner year for equities. s&p 500 surgeing in 2021 -- surging in 2021. this is as we head towards the opec-plus meeting on tuesday. the expectation is that we will see another modest monthly increase of around 400,000 barrels a day. we had at that huge surge last

year in food prices -- we had that huge surge last year in food prices. australia continues to be shut. mainland china as well. korea is opening a little bit later. >> we have some breaking news for you on the bloomberg gdp numbers from singapore for the fourth quarter. bigger than expected, gdp growing at 2.6% for the quarter, beating estimates. that was also beat on the estimate of 5.1%. economy recovering strongly there. manufacturing was also rising at 4.2%. construction did contract a little. services growing at 2.5%. that is annualized.

good beats for singapore for the final corner of the year. -- quarter of the year. shery: we are getting those pmi numbers for south korea, indonesia, taiwan, and the philippines in about half an hour. we see china's manufacturing a pmi continues expanding in the month of december. it will be interesting to see how markets react to that and how risk is supported by those better economic figures. we have already seen a south korean export numbers helping push of the value shipments over the weekend -- a push up the weekend. we are headed towards a cautious market moves in asia, given the stronger dollar as well.

>> one of the things we are watching for chinese stocks to recover after a rough year in 2021. traders seeing a bounce there. beijing keeping their border shot and following the same covid policy until after the winter olympics. there could potentially be a weight in the retail mania we are saying in south korea and india, showing signs of fatigue. shery: let us bring in our next guest who remains positive on risk assets. with us now is the executive director on occ bank. happy new year to you. tell us a bit about what you are watching for 2022. what are the risks and opportunities that you see? >> let me start by saying, we

are a modestly positive on the markets, they have done exceptionally well. valuations have not been detracted, we see that there is easy money to be made. as far as we are concerned, two elements of risk, what is the covid-19 figures, omicron remains a risk. we have seen a surge in infection numbers. that comes with a degree of caution. inflation numbers will be announced, in the coming week. several countries around the world are announcing inflation. there is a risk in inflation and covid-19. with greater vaccination, covid

will ease, inflation numbers will come off, there will be. that could be a positive for risk assets including equities. we are, positive for the market. shery: you upgraded your rating on india to neutral. you have maintained your stance on china as neutral as well. given the covid risks that you have talked about, what will this do to build two economies, especially when china is holding that covid zero strategy? >> this market has done exceptionally well. evaluations are not as attractive, i think overall india has done a good job in terms of covid-19. in the case of china, covid

stockmarkets have been hammered. one of the worst-performing stockmarkets in 2021. we are keeping a close eye on china. we see more signs in economic -- it is not for everyone. it is the second half of the year and after that too. >> you are neutral on india and china, but you said that there is still money to be made. where do you go to make that money? >> we are not positive on equities compared to bonds. the bonds segment, we see higher bonds. we think the virtual yield will continue. in the equities space, i know

that your equities have done very well. there is still more to the equities market. in other regions, asia, japan, and others are neutral. we are keeping a close watch on southeast asian regions to see if they need to be upgraded in new costs. the bond space is a bit more selective given rising industry. >> it was a pretty rough year for the hang seng, what is your outlook for china? >> pretty rough year. evaluations are starting to look a bit more attractive for chinese equities. moving forward, the key thing is really the headwinds. there are some signs of easing, indicating the rrr resource.

on the property side, you have a lot of maturing bonds. china has a lot of companies, that is a headwinds for the chinese markets. we want to see more action from china. i think the regulatory crackdown will continue. the second half of the year, that is looking a bit better. that is where we see better prospects for china. shery: will that weaken the currency? we have seen authorities run out of patience when it comes to the strength and resilience we have seen with the chinese yuan? >> possibly. that could ease some of the upward pressure in the currency. the currency, what markets are looking for is signs that the regulators are easing. we have regulators, the internet

sector, and the internet stocks. in terms of more easing and more quality -- fiscal policy, china may provide gains going forward. things are working out. >> thank you for joining us. let us get to vonnie for the first word headlines. >> covering maturing bonds, coupons, and deferred away to millions of migrant workers. that is a bigger bill than the last two months combined. china has told the builders to show payrolls in order to prevent worker unrest.

opec is expected to release more supplies when they meet on tuesday, underscoring the optimism for global demands. 23 nation alliance is likely will proceed with a hike next month as it resource production halted during the pandemic. kim jong-un has urged north korea to focus on easing food shortages and containing covid. it suggests the nuclear talks with the u.s. seems to be a low priority. the thing north korean leader said that -- a south korean has cross into the north. the person was captured on a thermal imaging device on the

eastern side on saturday. they have asked pyongyang to assure the person's safety. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. shery: we have the outlook for chinese markets this year with an economist. we will speak to her at the bottom of the hour. the latest on the covid surges in asia. this is bloomberg. ♪

>> it has been difficult to really predict on a weekly basis how cases are going to go. there is data out of south africa showing that the surges

have fallen off as weekly as they have increased. hopefully that will happen in other places as well, too. >> i hate that we accept that everybody gets it. that is not what we want to do. i think we have got to double down on the masking, we have to really emphasize and encourage vaccination. >> antibodies are the body's natural defense molecules. after you have been vaccinated or infected, your body spreads a lot of antibodies all over the body to protect yourself against getting reinfected. with modern technologies, we can go in and sample the blood and pull out infection fighting cells. we can make a single antibody that can do the job for a particular virus. that is called a monoclonal antibody. >> if we continue with having so many places and populations of nonvaccinated, we will continue with this pandemic. may be we will need to job

ourselves more often? >> some health experts on the surge of omicron cases around the world. let us get the latest on the fire situation with michelle. -- on the virus situation with michelle. more than 20,000 new cases. hospital admissions and not rising as sharply. this is the bridge of the pandemic becoming endemic, is that what is going on here? >> that is the hope. that we will be seeing more of these cases with less severity. and generating antibodies, t cells that can fight off any severe infection without an increase in hospitalizations and deaths. people who have experienced this variant have been vaccinated,

they have some level of immunity to it in the beginning. the concern is as it spreads into an vaccinated populations, even without a severe hit among those people, the sheer numbers alone will land some people in the hospital and have the ability to overwhelm our health care systems. shery: we continue to see u.s. sages -- cases surging. dr. fauci had this to say after the shortened isolation period. >> the cdc decided that they would cut that down to five days if the person remains a symptomatically -- asymptomatic. there has been some concerns

about why we do not ask people at that five day period to get tested. that is under consideration. the cdc is well aware that there has been some pushback about that. shery: does this make sense, given that they have the period were people should stay away from other people after testing positive? >> the issue is that we know that masks are not fully protective by themselves against omicron. it can penetrate throughout the ventilation systems, it is airborne. even a single mask alone is not enough. it is within the realm of voter -- realm of reality that people are infected within five days. they want people to get back to work so we can keep our supply chain working. we can only make it worse if

people start spreading the infection after five days. adding a test into that to make sure the people are not so positive, -- still positive, that would be a good idea. they did not really think that through. i imagine we will see some revision of that. shery: always great to have your insight. the latest on covid-19, around the world. the situation is making it even more challenging for wall street firms to stick to the return to office plans. goldman sachs are delaying its return after jp morgan and citigroup and others have turned more cautious about returning employees to the office. tell us about goldman had to backtrack? >> it wanted its employees to return to office. it mandated vaccine booster

shots, but, as we have seen in this variant, this is taking the world by storm. it is spreading very rapidly. goldman had had to backtrack. it is saying that staff can work from home until january 18 if they are able to do so. it is because of the trajectory of the spike in cases. >> what is this going to maine for goldman sachs -- mean for goldman sachs' operations? >> if the past two years is anything of a guide, the bank has ranked in record numbers. dealmaking has been very strong post-its record results. of their bankers -- post its record results.

employees would say another 18 days working from home could not really affect the business. >> you can get a round the--a roundup of the stories that you need, bloomberg subscribers go to your terminal and you can customize your settings if they only get news on the industries and assets that you care about. this is bloomberg. ♪

shery: tesla smashed its previous record for the global -- for global delivery, joining the $1 trillion evaluation club. quite an achievement, given that all automakers around the world suffered supply chain disruptions. >> really impressive for tesla.

it is shows that they are doing a good job of navigating the semiconductor shortage and other shortages that have been affecting other manufacturers. people really want to buy their cars. >> how did these figures compare with the expectations? >> quite a lot better. tesla delivered about 308,000 cars. 40,000 more than wall street had been expecting. a really strong beat. we do not know a lot about the regions, why the total was so much better than expected. that is something that investors will want to try to piece together in the next few days and weeks. shery: especially when it comes to the chinese market. it is a market with huge

potential. at the same time, tesla has said -- suffered setbacks in the market. where is tesla looking for further growth? >> that is right. the u.s. and china are the biggest markets for tesla. the is speculations after the report today that one reason for the strange job is the demand in china but that is not their only market. tesla does not break out sales by geography. that is something where we will be looking for any kind of clues or insight or statements that the company might be able to offer in the rest of this month. >> let us get a quick check of the latest business flash headlines. airbus ended 2021 with a lead over boeing. boeing had amassed a 428 lena

lead. -- plane lead. airbus was able to edge past boeing with 58 aircraft. a delay in the launch of 5g service that might impact their points. the wireless industry maintains that the service power is low enough to not cause interference. -- [indiscernible] authentic will take a majority stake in the venture which will handle the former soccer star's endorsement deals. the company owns forever 21.

shery: take a look at market trading, we are seeing u.s. features higher by 4.4%. this is after two sessions of losses. we have a low-volume trading ahead of the new year holidays. it was a great year for equity markets in the u.s. nasdaq 100 surging more than 400%, for the s&p 500, this was a double-digit gain. a support for the markets given that we have seen this huge rallying in crude prices over 2021. we continue to see those gains in the first trading session of 2022. wti above that, we have the opec-plus meeting on tuesday.

the japanese yen is still pretty weak against the u.s. dollar. a one-month low versus the greenback. we have korea coming online at the top of

vonnie: a stroll you's prime minister is monitoring for covid symptoms after a positive case was detected in his sydney residence. a potentially -- under the recently revised covid guidelines, he does not need to self-isolate. singapore has recorded more covid-19 infections among travelers from abroad than local cases for the first time in nearly six months. 260 imported cases were reported

compared to 187 community infections. singapore has frozen ticket sales until late january. u.s. travel delays continue as a winter storm sweeps eastward and carriers deal with staff shortages. more than 2000 flights into, out of, and within the u.s. were canceled as of midday sunday, on top of the more than 3600 delays already posted. this is all according to flight aware.com. disruptions come as thousands of travelers attempt to return home after the holidays. goldman sachs is asking u.s. employees to work from home if they can until january 18. it comes after most of the bank's major peers adopted a more cautious stance as the omicron variant spreads rapidly across the nation. goldman is one of wall street's fiercest champions of getting staff back into officers.

global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: we have pmi numbers across asia right now. we are seeing improvement for a few economies including taiwan and south korea. south korea now seeing a gain of about 50. 1.9 in instead of the previous 50.9. we are still in expansionary territory and south korea. over the weekend we had export numbers for december pushing those value of shipments. we are also seeing taiwan's pmi numbers improving. they have been in expansion territory since 2020. indonesia, the philippines, malaysia, all pmi numbers above that 50 level. paul: for more on the pmi numbers across asia, let's bring in our bloomberg economic and

policy editor kathleen hays. let's start with korea. demand for exports is driving the manufacturing pmi higher. kathleen: i would say to stepped back, these numbers look good. some have improved a lot. some have improved a little. at a time when the world is worried about the omicron variant, it may be throwing a monkey wrench in the works. so far, so good. with korea what we saw over the weekend was exports numbers. yes, they slowed down in december. they were up 18.3%. but the further out we get to the end of 2021 into 2022, the year-over-year comparisons are going to slow down. chip exports are very strong for them. 38%. and when you try and think about what is driving the region come exports to china from korea up

20.8%. asean countries. bottom line, korea is doing well, it is a major exporter. it creates hope for other asian nations which also relies on much on demand from overseas to fuel their economies. looks like these pmi's are showing things will hold up and/or get better. shery: we got the chinese official pmi numbers last week. we are getting more this week as well. what do we know in terms of the economic momentum going into 2022? kathleen: i would say china is in the camp, certainly on the manufacturing pmi, it was up like, 50.1%. it's holding in just that breakeven between expansion and contraction. anything below 50 you are contracting and anything above your good. that is a positive sign. services went up to 52.7. i want to point out when we

think about how much china is going to drive other asian nations. we have not gotten japan's final pmi preliminary. but new orders for china below 50 since august. export orders easing to 48.1. production was around 52. the pmi for small firms in that december manufacturing pmi at 46.5. on the services side, bloomberg economics warns that covid flareups could hit those kind of jobs. those kind of outputs. that is something to keep in mind. china at least is holding steady. and everybody including bloomberg economics expects more stimulus from the pboc, more target after the first year to make sure growth continues. i would say look, omicron is still a big question. but it looks like as 2021 came to a close and we start 2022, there is some momentum. manufacturing is looking good.

we will see what happens to china but they are expected to take steps to make sure things keep going and that is good for the rest of asia. shery: the market is really looking forward to that support coming from authorities. kathleen hays there with her take on the latest pmi numbers across asia. coming up we also get the outlook for china this year with one of the top ranked forecasters for the country. this is bloomberg. ♪ bloomberg. ♪

shery: an alert right now, defense secretary lloyd austin has tested positive for covid-19, and he is home quarantining for five days. he last met president biden on december 21. he is now saying the covid symptoms are mild. this of course as we continue to see covid-19 cases surging across the u.s. let's turn to china. repayment challenges are paying up for property developers, a heavily indebted industry. they need to find nearly $200 billion to cover mounting bills this month, from bond maturities to back wages. stephen engle joins us now from hong kong. quite a way to begin the new year. stephen: yes, it is a huge number.

$197 billion is the total. that is nearly the entire annual gdp of a country like new zealand. so it's a big bill. most of that is deferred wages many of these troubled developers have not been able to pay, as they went through so many financial troubles in the fourth quarter, with a number of them defaulting, with the big poster children being evergrande and kaisa. of that $197 billion that is owed in january alone, $173 billion is going to be in worker wages. and we already know the central government in china is prioritizing and urging these developers to pay back wages by the end of this month? why?. that is the beginning of the lunar new year holiday when migrant workers fan out across china, in normal years. but they do not want unrest. they do not want migrant workers

spending the time off protesting. it also coincides with the beginning of the winter olympics in china. so there is a lot of pressure to meet these bills. you can see as well their dollar bond bill is also due. maturing bonds as well as coupon payments. and local bonds as well. in fact, the bond bills that are due in january alone are more than the previous two months combined. it is a huge bill and not enough time or screen space to give them to meet in january alone. it is a tough year for developers after a very different cult -- difficult 2021. paul: we're hearing about an arm of the shenzhen government buying a stake in a trouble developer. is that another way of saying bailout? stephen: it is essentially a bailout, and it is a sign. of course there has been easing in the last part of 2021, a

policy easing, as well as the central government urging more financially healthy developers to perhaps buy up projects of troubled developers, and that is what we have been seeing. this is a rare case we got news of late friday that an arm of the shenzhen special economic zone, the government arm, is going to be paying, or at least as a deal is unfolding, for a 29% stake in china south city developer. it is a hong kong listed developer with about $900 million in coupon and dollar bond maturities coming later this month. so, essentially, it is a bailout. it will make the chinese government arm of this unit the largest shareholder in this developer. i am just going to say, it's essentially a bailout, but not a full, outright bailout.

paul: semantics mean everything. stephen engle there. let's discuss growth prospects for china's economy and bring in china economist at napa? it's. -- we saw some encouraging pmi's from china on the last day of the year, but to what extent do those headline numbers mask a bit of weakness? >> thank you for your invitation. happy new year. china's official pmi -- on the one hand we see -- [indiscernible] on the other hand on the demand side, we see signs of weakness. they are both in contraction. [indiscernible]

that will leave more room for policymakers to step up with easing measures to stabilize growth momentum into 2022. paul: still pursuing covid zero while risking with sporadic outbreaks. how do you see this weighing on the growth picture for china? >> i think chinese pmi data, we're seeing a temporary stabilization in between two phases of covid outbreaks. we're now seeing more outbreaks in a province which has shown around 1500 cases since the first outbreak in december. i think that will slow down that pressure and some disruption to

production on the manufacturing sector, as well as another sector ahead of the chinese new year. i'm not optimistic yet about the service sector outlook in china in the short-term, especially when china is continuing with its zero covid strategy in the near term. shery: what easing measures can we expect? are we talking about the main rate being cut or another tool like the rrr? >> we're actually seeing more dovish -- [indiscernible] we've changed our view on easing. we're seeing a hint of that in december. a marginal cut in lpr shows

there will be more room for broad-based easing. therefore we are focused for 2022 that the pboc will continue this monetary easing with a cut in rrr and perhaps a 30 basis point cut in nine-year lpr. shery: how much will that support the property sector? >> [indiscernible] it's our view the policymakers will stick to a medium-term policy of deleveraging. the policy priority for the sectors is whether to stabilize the bottom line, which is not causing systemic financial risk to the broader economy. paul: we saw some yuan strength

towards the end of the year. does this invite some sort of policy response or do you see the yuan weakening naturally into 2022 >> -- into 2022? >> in the medium-term it will be stable. [indiscernible] policies around that might be affecting policy flow. another sector will be china's domestic easing policy. [indiscernible] as china reopens, we will

probably see some real organization of -- [indiscernible] shery: we talked about easing monetary and fiscal policy. what about easing on regulations? regulatory pressure we have seen on tech and other parts of the chinese economy. >> i think regulations we are expecting for 2022 is more clarification in terms of regulation. we do not need a major reverse of what happened in 2021 because that revolved around medium-term policies. and to have more regulatory changes for the entire sector. in 2022, we think with more

clear communication the sectors under regulatory change is likely to see more stabilization. shery: it was great having you on. happy new year. coming up next, i will discuss a little more about china and those regulations. and the tech giants who ended the tumultuous year with a bit of a rebound. we will get a preview of the hong kong open. this is bloomberg. ♪ this is bloomberg. ♪

it is one of the largest automated centers in the u.k. so far, it looks like things are

going well. e things are going well. paul: let's get a quick check of the latest business flash headlines. tesla delivered 308,000 vehicles worldwide in the fourth quarter, smashing his previous record. it pushed total sales for the year to more than -- elon musk tweeted to thank the tesla team worldwide. growth expectations pushed tesla into the $1 trillion market valuation club last year. microsoft has fixed a bug that caused some messages to get stuck on its exchange platforms. they said the company was not

security-related, instead blaming a new year-related date checking failure. microsoft did not say how widespread the issue was. the latest spider-man film has held onto its top box office spot and north america for the third week in a row. it generated nearly 53 million dollars over the weekend in the u.s. and canada, according to sony projections. box office sales of north american cinemas jumped to about $4.5 billion last year, about double 2020's sales. at&t and verizon have rejected a u.s. request to delay this week's launch of a new variation of 5g mobile service that airlines say might interfere with aircraft electronics. the ceo's say they would be willing to pause deployment near certain airports. the wireless industry maintains the service to power levels are low enough to avoid interference. shery: chinese tech stocks were

the biggest drag for asian equities in 2021. this despite a strong rally on the last trading day of the year. let's get the outlook for 2022 as we count down to the first trading session in hong kong with sofia horta e costa. some were saying perhaps we have seen already such a big selloff in chinese equities a given the regulatory crack down, that a lot of the bad news was already priced in. is there a case for some investors liking china because they are becoming a little cheaper now? sofia: yes, exactly. i think that is exactly the story for this year. the kind of mean reversion story. chinese stocks in hong kong have been cheap for months, so this is not exactly new. what is new is a shift of flow, and that has been really important for stocks in hong kong. where in the third quarter money supply was especially tight.

the hkma was trying to get ahead of the fed tightening cycle, so liquidity to keep the local dollar stable has punished stocks, especially tech stocks that rely on that liquidity. also southbound flows have been weak. some of that is returning, especially as beijing shifts towards easing monetary policy. so when you see the kind of underperformance that hong kong had last year, the mst i china which tracks onshore and offshore had the worst year since 1998. and stocks in the rest of the world so extremely expensive. you had wall street really counting on that shift. when will chinese stocks really start to take off. because valuations are incredibly low and flows are coming back. valuations are obviously not enough. there is some optimism building into this year that we will finally get the rebound that wall street has been counting on and hoping for, at least since

september. you mentioned the final day of the year. big rally in chinese adr's and in the hang seng tech index. a lot of that was flow driven and short covering. let's see if that continues today. paul: hong kong stocks are cheap, but are there any other reasons to be optimistic about what 2022 might hold? sofia: i think the key thing is, especially in january, is what the pboc will do with liquidity. hong kong is a very liquidity-driven market. it is caught between the fed and the pboc policy diversions, which is one of the most interesting and key stories to the market in 2022. how will that play out in hong kong? that is the key question. january is obviously when we start to see that. i mean, this week already, 700 billion yuan in short-term funding comes due and the pboc

is expected to see the lenders through liquidity prices, especially as we see more developers default in the third quarter. sorry, in the first quarter. so how will the pboc fed diversions play out, and hong kong is a key market for that? paul: all right. sofia horta e costa there. we will be watching tesla's asian supplies when markets open in seoul, taiwan and hong kong later. tesla supplies hang come -- stocks to keep an eye on. shery: trading of course getting underway in korea at the top of the hour which is starting one hour later. we are seeing the korean won gaining ground against the u.s. dollar. we had a little more positivity with pmi numbers improving from the previous month. above that 50 number, the pmi number.

our markets coverage continues. we also have hong kong opening as well. stand buy for bloomberg markets china open. this is bloomberg. ♪ this is bloomberg. ♪

david: welcome to bloomberg markets china open. happy new year. we are counting down your first session of the year here in hong kong. let's get you your top stories. why traders are looking for a 2022 turnaround in asian equities. we will be watching chinese stimulus measures and dollar direction. chinese manufacturing ex