paul: good morning, i'm paul allen in sydney. sherry: welcome to "daybreak: asia." asian stocks look for gains, treasury yields continue to climb at a slower place. will get samsung earnings this hour. >> the st. louis president reimposed -- reinforces the hawkish approach, predicting

rate lift off as soon as march. paul: let's look at how we are trading here in australia in the first few seconds of trade. something of a turnaround which we will take after the big sell down we saw on thursday with the asx lower by 2.75%. we're keeping an eye on james hardy, the ceo has been fired after employees raise concerns about his work related interactions. james hardy says he materially breached the code of conduct at the building products manufacturer. so that is a stop to watch when we get going. keeping an eye on uranium stocks as well which performed well despite some of the selling we are seeing in australia this week. new zealand has been trading for

a couple of hours now, better by .10%. a strong -- a strong greenback. shery: we had some pressure in the new york session. u.s. futures higher by .15%. gaining .3%. we've seen tech stocks leading the declines in the new york session. higher treasury yields also pressuring those higher evaluated stocks, but oil stocks surged and rebounded from pre-pandemic live in -- levels. in the asian instead it -- session heading to the $80 a barrel level. we continue to see supply constraint from opec-plus in north america. right now the focus has been almost treasury yields with the 10 year topping the 172 level come the highest since april. not surprising given that we are

seeing tightening moves from global central banks including the fed. right were getting the peru rate decision coming out with an increase of their rate to 3%, which is a fifth straight line of rate hikes for the country. they are facing a big inflationary pressure, a 13 year high of around 6% in december which is more than triple the banks target. we saw on -- we've seen a few hours ago argentina raising their benchmark rate in -- for the first time in over your. price pressures continue around the world and the fomc minutes pointing to earlier and faster rate hikes, which has done a number on global bond yields as well. paul: goldman sachs talking about what it calls a new conundrum when it comes to treasury yields, with yields staying low even as the fed starts to raise rates. goleman raised its forecast for the 10 year but not for longer

dated notes. the 30 year at about two point when he 5% by year end. that conundrum idea is a callback back to 2005 when the former fed chair alan greenspan talked about longer dated treasury staying low. shery: with those higher yields, we've really seen investors getting spooked those valuations among tech stocks. the nasdaq composite wiping out about $1 trillion in value just this week. nasdaq stocks down 50% or more, almost at a record, something reminiscent of the.com crash in the 1990's. paul: asian chipmakers seem to be holding their ground against the trend. tech shares off but chips still remain in short supply. that hasn't changed. we will have a earnings from

samsung later. earnings for those companies rising and some forward earnings rising by 50%. shery: let's delve into the monetary policy outlook. the st. louis fed president has brought forth a message that rate hikes will come sooner and faster than previously expected. in order to rein in surging inflation. kathleen hays is here with more on this. how likely is it that we will actually get a march rate hike in jim bullard's view? kathleen: jim bullard, in answering reporters questions today, made it pretty clear, he said there is a definite possibility that we will see the first rate in march. listen to what he said. >> the fomc could begin raising the policy rate as early as the march meeting in order to be in

a better position to control inflation. kathleen: he is penciling in three rate hikes for 2022. only half of officials in september thought only one rate hike in 2022, so this is quite a move by him and the whole group. the balance sheet reduction starting sooner is what hit the markets hard yesterday, more so than the faster pace of rate hikes that have been signal. bullard saying that this could start shortly after that first rate hike, even though the fomc hasn't made decisions on that yet. he stressed that balance sheet reduction means the fed would have to be aggressive in its own rate hikes because letting it run often get smaller should push bond yields higher. an interesting line of thinking from the fed. the president of the san

francisco fed agrees the run-up could start during the policy normalization process. she is ok with a couple of rate hikes, that would leave a lot of accommodation but she warns if the fedex to aggressively on rates, it would slow the economy. jim bullard also said if inflation starts moderating, we could slow the pace of rate hikes in the second half of the year. looking for inflation to still be at 3% year-over-year at the end of the year. so more rate hikes are definitely on the table. paul: kathleen hays there. let's turn to china, a creditor says one of the units defaulted on a local loan. john, exactly what is going on here? john: we got news yesterday that

china credit trust has alleged are accused shimao of missing a 100 million dollar payment on a lawn that extended to the property developer. they have been under the spotlight because up until late last year we had this crunch at the property market, the industry has been financially healthy. the three red lines for benchmarking how well developers are doing in terms of debt, shimao passed all three of those red lines. it was investment grade until the end of last year and now it is causing concerns about contagion and raising concerns that the circle of risk is expanding. shery: johnliu with the latest on shimao and the property sector in china. analysts expect a big jump in profit in the peak year and

quarter from strong global chip demand. let's bring in stephen engle in hong kong. it seems inevitable that they have a pretty strong quarter given the global chip shortage. stephen: this comes amid the global tech selloff. samsung has done well since october. shares are down about 7% of the last year, however since october they are up. they are writing out the chip shortage and on the conference, they're looking for some sort of guidance for 2022 in what is a misnomer, but the post-pandemic and tech world demand for chips. we're in a bit of a down cycle for memory chip prices. the down cycle could be short-lived. this is essentially what we are expecting, a big jump in year in

fourth-quarter profit at the flagship semiconductor unit, more than doubling likely year-over-year. an consumer electronics, the galaxy foldable phones are selling well as well as other consumer-electronics have been strong. this is what one analyst is telling bloomberg. he says what is important is the outlook for this year, whether growth can be sustained in the post-pandemic world. investment in data centers and other spending by alphabet, microsoft, amazon and others will be closely watched this earnings season. this is what bloomberg intelligence expects we get these numbers at the bottom of the hour. operating profit in the fourth quarter likely strong, achieving consensus estimates. and we might see memory chip profitability and revenue down a

bit but year-over-year, probably a good number. paul: stephen engle there in hong kong as we await those samsung numbers. let's get to vonnie quinn with the first part headlines. >> president biden has warned that the insurrection january is part of an assault on democracy that donald trump and his supporters continue to wage a year after the deadly ride -- deadly riots. saying the former president turn to violence to try to overturn the election he lost. pres. biden: for the first time in our history, president had not just lost an election, he tried to prevent the peaceful transfer of power as a violent mob reached the capitol, but they failed. >> he said he tried to further divide americans. hong kong's chief executive

carrie lam has announced an investigation of several high-ranking officials after they look -- after they joined a large arctic gathering. 10 officials attended the event with several sent to quarantine centers. on kong imposed strict new curbs on friday against the rise in cases. and as much as five inches expected overnight. the forecast of up to eight inches in public schools will close on friday. as part of a larger system that may dump snow from missouri through to the east coast. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. paul: we're watching james hardy at the moment, falling up to 7% after the ceo was fired. this is after employees

complained about his work-related interactions. an inquiry found that while his conduct was not discriminatory, it did breach the james hardy code of conduct, so the ceo is gone. it must be noted that james hardie has upgraded its earnings forecast for the upcoming fiscal year. declining 7.5% in early trade here in australia. still to come, will hear from a researcher whose look at how diversity affects public perceptions of the central bank. why one market my -- market watcher sees opportunities for rebound as covid concerns fade. this is bloomberg. ♪

>> 2021, you saw strong earnings across the board. >> the stock market is saying we're going to have height normal growth, that should be good for earnings and profitability in 2022. >> it shouldn't take much for a little bit more multiple stability and continued strong demand on the top line for companies to deliver a year that is pretty strong. >> an incredible fundamental story of growth and earnings. shery: let's bring in our next guest who is expecting a return to rationality this year. it's great to have you in the new year. let's talk about your comments on rationality. will this be a forced return,

given the tightening monetary conditions around the world, and how will earnings growth help? >> i think it will be strong, to the extent that we see the treasury moving more rapidly and everyone expect a crack in tech valuations. i think we will see a move in the tenure plus before we start seeing tech valuations really break. part of it is the fact that hedge funds in particular are getting out of tech very aggressively. coming out of covid, that hope it's relatively quickly. shery: what are the opportunities in this reset? >> one of the ones i mentioned that i like is disney. the stock has been punished a

little bit recently around park attendants, but with the reopening, we think that disney has a tailwind there when it comes to entertainment. we think in the second half of this year the numbers will be up. [indiscernible] paul: i want to talk about some of the ipo's we saw in 2021. how do you see them faring this year and have -- how does the broader ipo picture look this year? >> some of the ipo's that took place in 2021, there was a real surge in direct to consumer, glamorous stocks that were very favorable in terms of the amount of retail investor interest. mainly because, things like

robin hood, and what we've seen in the last couple of days has been a fall the stock prices to dipping below where they ipo. i think that will continue and a lot of those names were ipo's at astronomical valuation said they will continue to see corrections. i think there are some social media names that a been waiting to come to market but think we will see a more discerning ipo market this year. paul: what is your outlook when you consider things against the backdrop of omicron, which appears to be mild, hospitalizations are not what we saw during the delta wave, but it does have an impact on supply

chains. where do you see these pressures going? >> a couple of things need to happen when it comes to supply chain impact. the importance of the booster in making sure [indiscernible] ongoing boosters, ongoing tracking of these variants and having ways to handle them quickly and looking at a four shot to counter any future variants we might see. the other thing in respect to supply chains, we've got these huge reinvestments at least in the united states of how much off shoring is now done, looking at whether it's retail, manufacturing, there is a huge focus on how to address future

supply chain disruption risk. shery: those disruptions have propped up the chip sector. we expecting samsung electronics to come out with the results any and we are expecting strong numbers. what is it say about the chip sector, semiconductors and their potential growth, given that they are tech and there are some high valuations but there seems to be more fundamental demand for these hardware stocks. >> i think that's right, and the idea that semiconductor stocks are hit too much in the trough of covid, nvidia is one that has also done extremely well. i think at this point the valuation is already reflecting the upside opportunity going into 2022. paul: always great to get your insights, thanks for joining us.

you can round up the stories you need to know in today's edition of daybreak. it's also available on mobile in the bloomberg anywhere app and you can customize your settings to what you care about. this is bloomberg. ♪

paul: we are tracking the fallout of the global supply chain crunch. these are the top stories today. the world's largest container line, based on data compiled, while each retains a 17% market share, the fleet can carry 1888 more standard container units and maersk. teenage truck drivers will soon

be allowed to drive across state lines under a pilot program. people as young as 18 could drive trucks into states. and m.i.t. professor's warning that climate change and extreme weather will challenge the global supply chain the coming years, even as pandemic related problems ease. shery: looking at lumber, the commodity is hot once again as the lingering effect of flooding in western canada constricts supplies. futures prize -- prices hit the highest since december 2. damaging highways and rail lines and rail lines in forcing sawmills to temporarily close operations. persistent supply logjams and strong demand are fueling the rally. terminal users can read more about those stories in our newsletter. here's a quick check of the

latest business flash headlines. apple supplier tdk is aiming to double its revenue from its lithium ion battery is and is in five years by expanding usage beyond smartphones and pcs. it's a crucial supplier to many of the worlds top brands which saw a surge during the pandemic. there scaling up to electric scooters, residential systems and others. and optimism about the travel industry's recovery despite a recent surge in covid-19 infections. acknowledging challenges posed by the omicron variant, but she said the rebound remains on track. >> the business came back very quickly when we got past the delta variant. we anticipate the same thing with omicron, that we will see some bumps in the recovery.

we have 30 brands and 140 countries, so we will see some bumps, but we don't think it will stop the recovery. shery: bmp group has taken another step in downsizing at smallest copper mine in chile. it's cutting jobs and grappling to regain access to underground water supplies. bhp has tried and failed to find a buyer for the mind which is facing a court order to halt extraction of water and with an environmental license expiring at the end of the year. singapore's about to get its first set of spac ipo's. listings are filed for under the new framework. we have plenty more to calm on "daybreak: asia." including samsung's latest results. we are expecting a strong fourth quarter for the chipmaker. we have seen those semiconductor

shortages globally helping the company. this is bloomberg. ♪ 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.

paul: some breaking news for you out of japan. cash earnings for the month of november, come -- disappointing, coming in flat. getting tokyo cpi numbers as well, cpi for tokyo on the year a little stronger than expected, .8%. those numbers coming in and the

market open in japan at the top of the hour. futures indicating a modestly positive start. those tokyo cpi numbers at .8% on the year but cash earnings flat at 0.0%. let's get to vonnie quinn for a check of the first word headlines. >> the fed president buller says they could raise a target interest rate as soon as march. his comments reinforce the message from the latest fed minutes at rate hikes will come sooner and faster than previously expected. >> the fomc could begin raising the policy rate as early as the march meeting in order to be in a better position to control inflation. >> the fed vice chair sold at

least $1 million of shares in the u.s. stock fund in february 2020 before buying a similar amount of the same fund a few days later on the people of a major central-bank announcement, according to an amended financial disclosure. the details may raise or questions about the central bank's actions. his term as fed governor expires at the end of this month. the cambodian prime minister is due to arrive in myanmar on friday. cambodia chairs asean this year and said they will discuss bilateral and multilateral cooperation. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: president biden has directly blamed donald trump for

the deadly writing at the u.s. capitol a year ago, saying the former president turned to violence to try to overturn the election that he lost. he spoke in speech as part of a day of commemoration speech. donald trump canceled his own press conference. pres. biden: for the first time in our history, a president that not just lost an election, he tried to prevent the peaceful transfer of power. he refused to accept the results of an election, created and spread a web of live -- of lies because his bruised ego matters more to him than our democracy or constitution. he cannot accept he lost. he's not just a former president, he is a defeated former president. shery: bill, he didn't necessarily name donald trump, but it was sort of a point by point rebuttal of all the false claims that donald trump has

spread. >> you saw former president trump responding almost in real time with statements he sent out via email because he continues to be blocked from social media accounts. he accused president biden of trying to politicize to january 6 event and continued his contention that the real crisis in democracy to lace on election day when he continues to push this unsubstantiated case that the election was rigged or somehow stolen against him. paul: bill, let's talk about goings-on in russia as well. due to the unrest in kazakhstan, what is happening? >> what we saw was kazakhstan forces taking back some of the government buildings at protesters had taken over and in some cases burned.

the kazakhstan military doing that after russia led a force of about 2500 soldiers who came in at the government's invitation. you now have some foreign forces operating in kazakhstan, backing up the president there who has called it basically a terrorist operation sparked by outside forces. he's not really saying who those outside forces are, but we have reports of a couple thousand protesters arrested, several dozen believed to be killed. the government says that 18 service members or police officers have also been killed as part of the violence we have seen in the last couple of days. shery: what is washington's stance, are they talking to the kremlin? >> secretary of state tony blinken reached out to his

counterpart, the foreign minister. the basic warning from the u.s. has been that there watching closely to see if there are any human rights violations taking place and whether there is any attempt to seize power unjustifiably through this crisis. it obviously comes as the u.s. and russia have heightened tensions over what's happened on the ukrainian border with talks between moscow and washington set to begin sunday night and monday in geneva. paul: still to come, the fed under fire for lack of diversity in its ranks, especially at the highest levels. the biden administration set to announce its latest pix. will discuss the implications and look at whether boosting diversity would make policy committees more effective. and some images of soul as we await samsung numbers for the

fourth quarter. can sales -- sales of consumer products looking promising as well. this is bloomberg. ♪

shery: the fed's leadership may be about to get a little more

diverse. the white house is likely to nominate a woman for a seat on the board while there's a leading contender to be president biden's pick for the top regulatory post. jefferson's election comes as the fed faces criticism for lack of diversity in its ranks, especially at the highest levels. the current board are all white and include two women. since its founding in 1913, just three of the central bank governors have been african-american, all of them male. only 10 members have been women, all of them white. paul: and our colleagues have researched whether boosting -- whether consumers would be more receptive to policy messages and forecasts if they see themselves mirrored on these committees.

francisco, as shery outlined, the fed not exactly a trailblazer when it comes to diversity over its long history. you have run some research on how the hypothetically diverse fed board would run. what did you find? >> we actually found the fact of adding more diverse representation, in particular, for minority consumers, for groups such as women, the extent to which they are willing to form expectations in line with what the fed proposes. shery: we will interrupt you for a second because we are getting breaking news at the moment. were getting samsung's fourth-quarter operating profit coming in at 13.8 trillion one,

below the estimate of about 15 point 21 trillion four its fourth-quarter operating profit. sales did top estimates, we have seen a lot of positive momentum for samsung given that its semiconductor business has been doing very well. we continue to see robust demand for smartphones and consumer electronic demand. fourth-quarter earnings do reflect one-time costs on a special bonus according to samsung and that might of hurt the operating profit which came in below expectations 13.8 trillion won. we will watch the korean open to see what the stock does. at the moment samsung has gained about 12% from the october trough. only one sell for the company, operating profit just missing

expectations a little bit as the company said it reflected a one-time cost of a special bonus. more on samsung in a few minutes, but let's talk about the diversity of the federal reserve. continue your thoughts on what diversity would mean in terms of how the public perceives all these messages from the fed. >> what we found in our research is that the public and the underrepresented groups track this substantially more once i realize diverse representation exists at the fed. so we are creating a hypothetical fed, but at the time we ran our experiment, at least one african-american and one woman were represented on the board. so it forecast more when they

think about the expectations going forward. that is crucial to think about the current situation, the inflation surges. the fed like other central banks are trying hard to convince the broader public that the causes of inflation are quite temporary. unfortunately they won't be able to do that unless consumers trust the communication from the fed. diversity is crucial in reaching that goal. paul: it is good in theory, but in the horsetrading that goes on around these sorts of appointments, can you see these findings actually being implemented, and is there any guarantee that when people do get around the table, that the real-life numbers will reflect what you found in your research? >> i am pretty optimistic in that respect.

when you think of the proposals that were made, were talking about individuals and economists that have already been part of the fed, and in large financial sectors, the way in which the different components of the fed economists would talk to each other, and this is also why based on our research the strongest effect that diversity can provide is in terms of when consumers and the general public would see and interpret messages from the fed. shery: what about the other side of the coin?

could some of these consumers react negatively if they see diversity that does not reflect who they are? >> that's a great point. we found no impact on the diversity. what we find is that when white men are made aware of the fact that more diverse board members exist on the fed, they don't reduce their trust in the fed at all. crucially we keep choosing fed forecasts so there is a group of the population that has increased substantially when diversity increases. but the most represented one doesn't change their behavior. shery: we will have to leave it

there, but that is some fascinating research and we will tell our viewers to check it out. thank you very much for that. we have those breaking numbers from samsung with fourth-quarter profit missing expectations slightly. let's bring in stephen engle and our asian stock reporter. can you break down the numbers for us? stephen: fourth-quarter offering profit missed expectations but sales were ahead of expectations. the operating this is not too much of a surprise. i was reading a report, the analyst saying fourth-quarter operating profit might slightly miss consensus due to year-end bonus payments, and that's what we are learning from samsung that they paid out year in and that helped drag down operating profit. but sales did beat estimates. the consensus was for 75.1

trillion won and it came in at 76 trillion. memory chips have sequentially dipped as weakness in the cycle, but many analysts are saying the down cycle may be short-lived. that's what we are waiting for, any guidance from samsung. a lot of analysts are saying the post-pandemic recovery stage of 2022, how long will this chip shortage last? many analysts say into the second half of 2022, it will not be alleviated. that will help with prices and we have to look at what is happening because samsung has two large factories doing flash memory and dram. we are hearing that samsung and micron both have factories there which are in lockdown in central china. samsung and micron have 67% of the global dram market.

it accounts for 42.5 percent of samsung's total flash memory production capacity and a little more than 15% of the overall global output capacity, so we do need to see what, for impact going forward this lockdown, if it extends beyond what we've seen already, what impact that will have. we do have a headline this morning from the chinese newspaper saying that samsung and micron may face factory disruptions. so lots to look out for. paul: steve outline and operating profit missed for the quarter just gone and some potential storm clouds on the horizon as well. what is the market impact of this likely to be? analyst recommendations for samsung still overwhelmingly positive. >> yes, that is right.

we only have one sell recommendation. the target shows nearly 30% return for the next 12 months. it was a slight ms. but that was no real surprise because we expected a condolence payment would be given. there are three positive views that may -- the ceo told reporters the company is moving faster than people think on the mna front. it was one of the reasons analyst had been criticized for being too slow to change, because of the lack of aggressive mna's. now the samsung ceo is saying the company is announcing mna in the near future. that is positive news for samsung stock. and u.s. rival micron finished

higher overnight because of solid demand coming from data center companies. nst mentioned earlier, -- as steve mentioned, the factories are operating from shortages and samsung has eight non-manned memory chip factory that accounts for nearly half of the company's production and that may affect the price of the memory chip prices going forward. the news is generally positive for samsung stock this morning. shery: i know we don't get divisional performance until later this month, but the expectation is that demand for electronics and smartphones has been pretty strong.

stephen: that's right, have a foldable new phone that has been very popular. consumer electronics could see a pop up but you are right, these are preliminary numbers in samsung does not break out individual division performances. they will hold their fourth-quarter earnings conference call not until january 27. perhaps that is an indication we will not get much guidance on all these issues until later this month. which will lead to a lot of speculation, obviously. we do have a number of comments coming from the likes of citigroup and other investment houses. they say samsung will enjoy tailwinds from memory chip cycles this year and create investment securities, saying the shut down due to the covid-19 will limit supply of chips, as we just heard from our

reporter in korea. lots to digest here and i will have more at the top of the hour once we get more headlines coming out of samsung. paul: and we have the kospi opening, samsung and index heavyweight. >> there will be a lot of interesting things to watch in the south korean market today. definitely samsung but hynek's which is one of the largest memory chipmakers that does not have operations there. previously we saw stocks rising on news of covid-19 because investors were expecting it to benefit from the disruption. we will watch some of the

small-cap companies that have been reacting to the news that samsung is moving to m&a. there are a lot of robotics companies in south korea that have been surging on speculation that samsung may be looking into the robotics area. that will be another thing to watch. we are also closely monitoring the level of the korean won which reached a new level yesterday and it may start to weaken. that is closely linked with the foreign investors money move in south korea. that will be another thing to watch in south korea when the kospi opens in about 10 minutes. paul: thanks for joining us on the samsung earnings. we will see how samsung does at the top of the hour when trading begins. for now, a quick check of the latest business flash headlines.

sources say the tencent banks startup is working on an offering that could raise as much as 400 moving dollars this year. it's one of the major players in the aftermarket sector. he joins a slew of chinese firms choosing to list in hong kong instead of the u.s.. and renewed angst for china's property industry. one unit failed to pay more than 101 million dollars which was due on december 25. shery: cryptocurrencies under pressure with bitcoin trading sideways after falling to allow in the new york session. bitcoin taken a beating from the fed's more hawkish tone this week. su: the fed clearly benefited bitcoin.

up 500% since 2019, but check out how it has behaved in the last month. a lot of the coins taking a beating. you have to realize the crypto investors have not really experienced such a bold run during a time of rising interest rates. like nova grads said he sees a lot of red on the screen, before finding support in the 38,000-40,000 level. that's a bearish revision of his previous view. a few weeks ago he said bitcoin would hold to 42,000. so he is waiting a bit longer before he buys. meanwhile there is a view that commodities in general are on a super cycle. paul: su keenan they're keeping

an eye on the crypto space. stay with us, the markets open in seoul in turkey -- solon tokyo next. this is bloomberg. ♪

♪ >> welcome to asia from bloomberg's headquarters. >> our top story this is hour. apec equities as wall street steadies. samsung's info cuss at the seoul open as the fourth quarter operating profit does miss but

fails to beat estimates. and china's embattled property sector forfeits. >> we see the nikkei up 1.47%. we have seen the core consumer prizes rising in line. although household spending did fall more than a percent year on year. we are also watching the 10-year yield because we have seen advise to that nine-month high hui. it was a little bit more muted today. the japanese yen had risen in the previous session but still holding that five-year low at that 115 level, still close to 116. take a look at kospi. we have seen two session of losses for the kospi.

we are seeing rebound from that one-month low. the korean wong continues to be pressured against the u.s. dollar after falling to the weakest level in more than 17 months as we continue to see broad dollar strength. we're looking forward to the b.o.k. decision next week. in south korea, samsung is gaining .9 of 1%. this despite the fact that they missed expectations slightly coming in at $18 trillion. the company said this is because of a one-time cost and a special bonus. we know they're in a firm position given the global chip shortage. we continue to watch sony because it's done spread pretty badly with the global tech selloff, paul. paul: we're seeing positivity in this side of the world, sherry. here in australia seeing a

positive day reversing a lot of the losses. the axs up 1.32%. i want to draw your attention to a couple of stocks. james hardy one of the worst performing. jack truitt was fired for breaches. and this is after they withdrawal their proposal. offered 1.75 on december the 2nd. a.p.i. trading a 1.2 for share. the aussie dollars losing a little bit of ground against a strong greenback. the normal zation of of policy shouldn't affect corporate growth. k, elvin we did see some --

kelvin we did see some selling in it's. do you feel that markets lost sense of the bigger picture. the feds withdrawing support because the economy is strong. how does earnings growth look to you? >> well, i think the question that right now is basically not when the federal reserve is going to hike. the federal reserve is going hike the biggest question is whether what is the magnitude of the hikes that we're going to get year and whether the tightening with regard to the federal reserve shrinking the numbers how that's going figure as well. these are the two reasons why the markets have sored pretty heavily will in the past with weeks. and therefore, if the fed were to normalize the sheet right now, will it do it at a faster

pace than before. the markets try to understand that. and it resulted in it moving up sharply this week and has hurt the tech sector. paul: let's talk about some of the corporate fundamentals. how does the earnings picture look for you going forward? equities correctly valued in that at the moment? >> yeah, i think in the first quarter for the u.s. corporate as a whole, earnings might be affected a little bit because of the rise in the omicron cases. and we've seen how some of the numbers coming out is reflecting some of that for example, we had some of the data reflecting softer than expected. we do continue to pick up in the second quarter. once the omicron start to go down in march then consumption could pick up the slack that we've seen so far in january if that's the case, we could perhaps be set for a softer

first quarter than expected. but in the second quarter, we do expect the spending to continue. before it takes a breather in the fourth quarter. because the excess savings that have been spent probably likely to achieve -- the consumer will probably have to go back to the normal disposable income in the first two quarters of this year. >> bond yields continue to surge. some resiliency, though, in those chip makers across asia with the chip shortage as well. this gtv chart on bloomberg showing how the value outperformed growth that means s

are likely to be more choosey, selecteddive as to where they want toe they want to put their money and that means cutting the exposure into a lot of the riskier assets. it's time to actually have that down and do that down and -- i willdo actually advise to adding to that. we do think that the rotationotn into value will probably make a lot more sense at this point in

time. >> does chinese tech classify as risky assets given the regulatory crackdown? or could we see value given how much they've sold off? >> it's in a quite different cycle all together wegether think that the worst over that thehewe policy-tightening s are done. you might get a bit of fine tuning of it to come but the kind of overhaul that we saw last year, we think most ofmostt is already done so if you're worried about the regulatorylatory risks, i thinku can be a little bit more comfortable this year but the problem is that you're not going to getar bu at the problem is tha capitat coming in eagle in second quarter becausesecoming in eagld the credit easing will probably come only towards the february and march towards period in a bigger way.the febra andry and march we think that ts crucial for the chineseery market

the chinese tech sector is very, very cheap. on a top-down basis china underperformed. so on a relative basis china looks really, really attractive based on the valuation. >> so once the stimulus economics for china, where would you go? >> i think some of the tech stocks in china is verythe tech attractive. if yououstoc look at theks in cl consumer discretionaryhe us naml consumer discretio in the tech sector, those are where we think are a lot of potential. on top of that, we do like the smart mobile, the 5g space in china because that's a lot of the growth -- the growth is not in dispute. it's just that sentiment is very poor. appear sentimentpear s comingenm the sector is affecting the entire market..entire market we must remember that. the chinese tech sector are the

biggest stocks. and therefore every time the investors get out of china, they are the biggest components in the chinese market. >> kelvin, thankhank you so mucr joining us with his take of the markets in 2022. of2022. of course, we're talking about china. we're watching that in samsung. we know they're facing some disruptions reporting that samsung factory disruptions as the lockdowns continue. in the meantime, samsung has seen its best day in two weeks. their operating profit missed expectations slightly butt the company is saying that it reflect as one-time cost on a special bonus and so wewe contie to watch those su pliers for samsunggsamsung not to mention s well because it does have a deal with tsmc worth about $10 billion to bailed factory over in japan.

and sony has been hit hard thiss week with a global tech selloff. let's get more on samsung's miss with our guest. we did see operating profit miss but sales did pretty well. >> so that there are really no surprises here. that's the catalyst for the stock going up today. operating profit in the fourth quarter did miss the consensus estimates, but there are a number of number of analysts that have been reading the different reports especially in seoul. they expected this one-time payment of year end bonuses to drag down operating profit. why they didn't factor that in, we don'twe don't know. but they did come in at 13.21wan. but the estimates came in at 15.2 billion wan the business is going great guns

as semi conduct ors are in short supply. we're not going to get any guidance from executives today. we have headline saying they're going to get their fourth quarter conference call coming in on january 27. we will get finalget final numb. these are preliminary numbers. they do not break out the individual unitindividual unit . we're not going to get the foundry breakout. we're not going to get the handd sets and mobile and consumer electronics, etc. and display unit as well. so we'll have to kindnd electronics, etc. and of trade tea lives that they're doing well in semi conductors. well in semi cond yes,uctors. memory chips are ine down cycle in the later part of 2021. and that also kind of weighed on operating profit a little bit. but again, the situation in central china is worth watching obviously of if this lockdown in the city is going to continually expect to have you know production impact.

>> tell us more about that lockdown in xian? can we gauge how long that's going to be for? and what the effect is going to be? >> it's like predicting the length of a piece of string. it depends on the virus situation there, right? but what we do knowwhat we do me, samsung and micrnono the two biggest chip memory maker in the world, they have large factories and output and capacity built into xian. there will be an impact. in fact, i have this statement from hong wan. the closure of xian will lift price. also korea investment and security saying the shutdown due to covid-19 will limitit supplyf the chips with both samsung

seeing disruption. samsung has 42% of total memory production capacity in capacity. also it accounts for 15.3% of global output capsty so we'll be we'll be watching te very closely. at the end of the day, if their shortages coming out of there, it's going lift the prices quicker. >> steven engel joining us from hong hong kong. let's get an update from connie. connie: while the omicron variant may appear less serious it should not be consideredo mild. the w.h.o. says record cases agree to 71%.%. while death rose 10%. numbers are expected to be much higher due to underreporting. hong kong chief executive

carroll lamb announced 10 officials, attended the event with several sent to quarantine serbs. hong kong imposes strict new virus curves on friday amid a rise in covid case. president biden hasresident bidt insurrection last january was part of anpart of an assault thd trump and his supporters are continuing to wage a year wage r the event. he say thehe he say the former president tries to overturn the election he lost. >> for the lost. >> for first time in our the history, the president had not just lost an election,an electid to prevent the peaceful transfer of power as a violent mob breached the capitol. but they failed. >> government forces in

kazakhstans seniornior moved to crush protest after russian al the allies shore up troops. dozens of anti-government protest ors were killed by security force andecurity forces wounded this after the president announceed what he called "anti-terrorist operation." they urged to seek a peaceful resolution. bloomberg powered by 127 journalists and analysts in 120 countries. paul: still to come, more on samsung's fourth quarter preliminary numbersrs with the senior analyst s.k. quinn. but first, a spokesperson talks about more fears around the property sector. this is bloomberg.

>> property developer has suffered the biggest ever loss. john, we thought this was supposed to be one of the healthier developers. what happened? >> yesterday, we got news from china credit trust which said that shimao had not paid $100 million u.s. that was due on a loan. as you mentioned, shimao was seen as a financially healthy developer. the three read lines in terms of bench marking which developers are doing well and not well, shimoa passed all three of those. they thought here is a developer that would be able to handle this recent strain in credit markets.

paul: there's more to this story. tell us about the liquidity worries there. john: they have a bopped coming due next week anymore december, they tried to get bond holders to agree to a six-month extension on that bond. as part of that offer, they promised to buy back some of these bonds. unfortunately, think late wednesday guanzhou had not raised enough money. if they can't buy back the bonds then maybe they can't get the extension. so what happens when that comes due next week? so that's what we're looking for. paul: the downward trend could continue for china's rates. let's bring in the offer of that report, strategist steven xiu.

tell us about china's macro 2022 outlook. >> we have a lockdown in xian. there will be more lockdowns if the omicron gets out of control. on top of that, we will continue to see more rhetoric and and the developers we saw them yet. it's going to be more for the year ahead. and also a part from that, next month we're going to have the winter olympics and the two meetings in march. so basically that's somewhat restraining the usual output in the beginning of the year. that's why it's very likely we're going to see more macro and slowdown to start off this 2022. now, last year, we saw china's economy slowing down we saw some concerns as profit was softer than expected. and the investment remains

elevated because it's high-tech and there's hope for the sector but property investment is slowing down the only upside from xbox has been really strong since the pandemic two years ago. but this year there may be some head winds for xbox because the demand has slowed. sherry: you're saying it doesn't look good for next year, right? which is why economists are expecting beijing to loosing monetarily and fiscal policy. i wonder how long that will take to filler through the rest of the economy? >> yes, i think -- i think they're going to go first because last year, if fiscal spending, the fiscal stimulus you was weaker than expected. china didn't need that much financing. if you look at the fiscal data it's higher than usual meaning there are a lot of unusual cash in the bank account waiting to be unleashed.

and china want it is government to really spend that money to support the economy late last year. and on local governments, they also have $1.46 trillion a special bond quarter that they're going to glows the first quarter so they will get even more spending power. so we expect them to do the heavy lifting. monetarily, it's a constraint. so that's why the rate cut is probably out of the question right now but then they're trying to get another triple cut. sherry: plenty more to come. this is bloomberg.

♪ paul: let's get a quick check of

the latest business flash headline. the "new york times" buy it is athletic in a $550 million deal. the athletic has about 1.2 million subscribers. and it was finalized. they publish big-name sports writers from around the country gamestop is planning to launch n.f.t. as part of the turnaround plan the company is in talks with crypto and block chain companies about what tokens can be used in the n.f.t. marketplace. it's discussing to invest in n.f.t. content for gamers and creating firms. car services platform is set to be moving its proposed i.p.o. from the u.s. to hong kong. sources say the startup is working with cicc and goldman on an offering that could raise as

much as $400 million this year. it was founded in shanghai in 2011 and it's one of the major players in china's automotive aftermarket sector. they choose to list in hong kong instead of the u.s. sing mother will get the first speck i.p.o.'s for peg sus asia filed for listings for black check firms. the deals are expected to boost volume in singapore which -- with $1 billion in title. samsung fell short amid expectations after bonuses given to employees. we were going to join into that some more with c.k. tim. details in a moment. this is bloomberg. bloomberg.

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♪ sherry: we're seeing big games across the market in asia for the kospi in about a month. we did see them loose ground for the last two sessions but we are seeing the stocks leading the gains including heavyweight samsung the nikkei is gaining more than a percent after the worst day since june. and we continue to watch the bond markets as well because february yields continue to rise in the 10-year j.g.p. was at

nine-month high when it comes to those yields. the axs is gaining 1.4% since the worst day in september. take a look at them. samsung is rallying and seeing its best day in two weeks. the operating profit missed expectation but the sales beat -- we are seeing other chip makers like sk hynix up 2.4%. we continue to watch sony as well because they have a deal to build factory in japan. let's bring in our next guest who has a buy rating of $115wan. joining us is s.k. kim at dauiwa capitals first of all, give us your

reaction to the fourth quarter numbers because as i said it was a beat on operating on sales. but a miss in operating profit. >> yeah, i think the first quarter the opec missed the market estimate. this is from the one-time, one-cost for the special bonus they paid the special bonus for the employees in korea. so we assume that it cost over $1 -- wna. the xia, in china, hong kong started to reduce from december, the, you know, the view. so that noticeably impact on the

memory and the growth structure in the first quarter. sherry: but you do think that there are other drivers out there, right? because you are lifting your price target to $115,000 korea wan. so what will drive those gains the stock price? >> yeah, i think that our target price is based on the valuation. but we are very positive on the the memory cycle. it's a very short term -- short-term adjustment. we see very strong trades the at thedata center.

and that will drive the price more favorably from the middle of this year this year. and also the -- the supply side, there's more concern about the destruction in the supply side. so the -- they may limit the supply growth and ship where the rebound in price earlier. and also we see the company the opportunity on the family side. they were introduced to g.a.a. technology and also the additional new customer base of a & b. we think that will drive up the investor sentiment on the company. paul: they announced the co-c.e.o. announced the m.n.a.

>> m.n.a. remain it is opportunity. the company is holding net cash. and they clearly guided for the new m.n.a. the new c.e.o. said they would consider the new semi conduct or, the component side. but also they're considering some of the opportunity intercepted by the region. i think they're more bullish on the a.i., even the 60 -- ultimately remains an opportunity. so we see the opportunity in the auto semi conduct or side but there could be additional m.n.a., very aggressive stint from the company but timing-wise we will see.

paul: one of the things we've been talk about today and you touched on it as well are the lockdowns that will have an impact. what are the risks of the outlook from this point of view? >> yeah, i think that the main concern especially in china the -- the china -- the lunar new year and the beijing olympics in february. so i think the current rates will continue this month. and hopefully from february or the second quarter. but as you mentioned it's not only about samsung electronics. micrno is also operating the

facility in xian. that's something positive on the company. but could be better on the supply demand balance and the pricing environment. sherry: do the positive drivers for samsung apply to micrno or sk h -- hynki and others? >> the global supply issue, i think it's the most -- yeah, it's a risk and an opportunity. the reason fire case in that is something we have to see. but could be some delay in the cumulative delivery in the second half this year. so we will have to see. paul: s.k. kim, executive director and capital market.

let's get to the headlines. >> new york city is said to gets its first significant snowstorm with as much as five inches. boston will get eight inches. and public schools will close on friday the storm is part of a larger system that may dump snow from missouri through to the east coast. st. louis said president tim bullard central bank policymakers, he said could start to raise their targeted interest rate as soon as march. he see this is as the next step because of surging inflation. he said rate hikes will come sooner and faster than previously expected. >> it could also begin raising the policy rate as early adds the march meeting in order be in a better position to control inflation. >> meanwhile, an amend financials disclosure may raise new questions about the company.

it reveals he sold and buying a similar bond. his term expires at the end of the month. bank of america is encouraging employees to work from home. an internal memo encourages staff to get fully vaccinate and obtain booster shots. j.p. morgan and other wall street firms also will not return to the office. you are watching bloomberg with 127 analysts in 220 countries. >> a look at the latest covid restrictions in hong kong as many banks return to work from home. this is bloomberg.

♪ >> hotel operate or marion international said it's optimistic about the travel industry's recovery despite a recent surge in covid-19 investment. we speak to their c.e.o. >> we deseened a state-of-the

art center. have built out lab space where we're going to work with different partners to come up with new innovations in our hotels and that can be shared more broadly across the industry. it could be innovations in the guest room, in the public space. and at the heart of many of these innovations will be technology so we thought c.e.s. is a great place to lurch launch the marriott design lab in addition to l.g. and carrier whom you mentioned, we are also working with some very cool startups. one dimension is hori. and they're helping us design the hotel of the future in a smaller place. think of the murphy bed of the future and how that room could really be something quite innovative in future hotels. >> we have heard these kind of

things about marriott about technological innovations. when do they become real? when they do they show up on your top line? >> first of all, we've been innovating in the top space for many years. but i will say that the pandemic is supercharged. some innovations and in particular some things around technology, mobile check-in and mobile check-out would be a great example. we had launched that before the pandemic but i think it was safe to say that the hotel industry was behind the aerial industry. but people wanted to check in more remotely. we supercharged the rollout. we saw an increase in adoption of check-in, check-out. ordering amenities, towels. there was an element of the pandemic that did supercharge elements of our innotion know vacation. but we've been focused on this many, many years. >> you have. and i've seen this in some of

your hotels as well as some of the hotel chain of your rivals. i am curious, a big part of the hotel is the service, the human experience that human touch. i'm wondering how much of that can be replaced by technology without damaging that relationship that so many consumers look for out of the hotels that they choose? >> yeah, i could not agree with you more. as the heart of our business is the human connection. it is all about the service that our associates deliver that is fundamentally the most important part of our business. technology can enhance what our associates can deliver to our customers. i like to think about the future of our company and industry being human certains, data driven, and tech-enabled. we use a lot of data that our consumer share with us, particularly our member who is give us data on their preferences and permission to

use it. we execute them often via technological tools. but it's in the hand of associates to deliver a warm welcome and a great experience. i couldn't agree with you more. people will also be the heart of our business. >> you are out at c.e.s. an event that used to be in person. it's sort of in person and now virtual because of the omicron variant and the latest surge in cases here. how has the latest surge in the covid crisis affected any of your bookings over the last few weeks? >> so, i think the best way to think about what omicron has done to our businesses has been similar to della. what we saw with delta is that it did in the third quarter of last year for example, give some bumps to the recovery but it did not stop the recovery. paul: that's stephanie linnartz speaking with ed ludlow.

one of 10 officials who had been at the event of more than 100 people. it's an embarrassing setback for kerry lamb just as strict restrictions were held. rachel, what are the details of this party? and how has kerry lamb reacted to it? >> hi. i think before we get it into, it's important to understand the context and why people are galvanized and angry. hong kong this week went back into pretty much, semi lockdown conditions. omicron is knocking on the door. they've cut restaurant operating hours. they ban flights from eight country country. they're shutting gyms, bars.

hong kong didn't make any progress in the way they handled covid. so people are tired, frazzled by the situation. in that context, there was a big part for a chinese -- mainland chinese official based in hong kong attend by many senior government officials this happened that just a couple of days when omicron started to circumstance late in the city and people were dod stay home. the fact that it was something that really angered people as well and now, you've got the whole of that is going go to a mandatory lockdown. the government officials are being in this situation but it reflects that hong kong could not find a way forward with its covid strategy. >> rachel, even banks have had to back off in their plans what's the latest? >> yeah, the situation with

omicron is circulating in the community. it's not like in this u.s. where it is everywhere, people kind of expect it. they're going back to home --arrangements. and people can't get back into work properly. it's a chaotic start for 2022 for hong kong. paul: rachel, with it's a tough policy when it comes to accepting migrants and immigration into the country what sort of effect is this having on the healthcare system? >> right. i mean what,'s happening is that we've got a lot of people coming back from the christmas holiday into hong kong, right? there are a lot of westerners there so a lot of it means they're going straight into the hospital the criteria is very strength. they have to test negative twice

before they can come out. and then even after that, having spent another period in isolation. >> these facilities are reaching it. and a lot of puppet hospitals are full. what they're doing is they are only a couple of days a way from having these public hospitals full and not able to give anymore care which is why the lockdown rules were in effect. it reflect it is situation where hong kong is really on the edge, is on the tipping point right now. it's called the strategy falling in half. sherry: rachel with the latest in hong kong. coming up next, we're counting down to the opening china after tech snaps for the year. we'll have a preview. this is bloomberg. bloomberg.

♪ >> and here's a quick check of the latest business flash headlines. b.h.p. group has taken another step in downsizing the copper mine in chile. it's cutting 35 jobs as it has expiring permits. b.h.s. tried to find a buyer for the mine which is facing a court order to halt extraction of water and with an environmental

license expiring at tend to the year. they will expand usage beyond smartphones mpc's. it's the supplier of i phones. it's scaling up as part of lineup to learn packs used in electric scooters and cellular base stations. paul: shares of china's tech stocks in hong kong have been taken a pounding for months as key constituency has walked away from the mark. for more, we're joined by sofia hota acosta. what can we expect from the tech stocks? a few pill lars have been removed rights? >> yes, exactly so mainland traders are net selling the link with hong kong.

they had been heavy buyers in december actually, really buying it when valuations got extremely low. the fact that even this part of the -- of the investor's phase suggests that there is not an investor to pick up these stocks. wall street is, you, no overwhelmingly bullish, almost reluctantly bullish on the sector and turns so starting from october last year because valuations were so low. and the thinking was that things could get any worse. we got reminded of starting this year, there's really no letter of china's crackdown on the tech sector. and that will continue. so 10 cents. it's assets and the potential

alibaba doing the same. and it could be a value trap. >> and really not over when it comes to the property sector developers are in big trouble right now. >> yeah, so this year really started off with a bang. we had evergrande's trade suspension on monday. then guenzhou and i.m.f. and less than two months later, they default on shore. the property that bond holders and shareholders these companies don't know, you know, these are hidden bills. we don't know -- this is off--balance sheets. and these debts are -- they will be repaid. they have priority over off-shore debt. you know, you saw the shock and the impacts of this.

also companies like country garden, investment grade solid state backed also saw their bonds drop. >> and you were saying, we will continue to watch this property stocks across china when they open over -- xia's default. we have seen them losing ground for the last two sexes after taking a beating last year. this year we'll continue to watch the coronavirus outbreak. 144% more cases. we do have the city of xi'an locked down for weeks as the government tries to control that week. we continue to watch across china. that's it. our markets coverage continues. as we mentioned. a lot of talk at the start of

trading. stand by for bloomberg market, china open. this is bloomberg

>> it's 9:00 a.m. eastern in hong kong, up in beijing and shanghai. welcome to bloomberg markets china open. we're counting down the open of trade on the china mainland and here in hong kong. >> stocks push higher as investors turn their focus from the hawkish fed. and the offshore watch after the currency posted the biggest loss in four weeks. and a default