>> good morning, i am paul allen in sydney. >> i am shery ahn in new york. welcome to daybreak asia. the fed sent to pressure asian traders. this nears the start of trading.

and samsung earnings dude this hour. investors waiting for cruise -- clues on whether a similar industry will emerge from this downturn. this is to the tune of a 10th of 1%. this is pushing just below 2.7% on a very hot inflation print. this is the fastest since 1990. bonds are pushing higher as well. nikkei futures are looking modestly higher. this pushes through the $90 a barrel.

>> u.s. futures broadly positive at the open right now. there is the reversal during the new york trading session. equities were firmly higher during much of the session. then you had fed chair powell's press conference and maybe him taking a more hawkish tone. not ruling out rate hikes on every meeting. u.s. stocks lower for the day. you can see that future trading at the moment is pointing higher. the fed decision all but confirming a march rate hike is in the cards. kathleen hays in here with more. is it fair to say they were a little bit more hawkish than expected? >> maybe for the markets. there was all of this chatter.

>> they would be so surprising. >> the bond part -- the bond purchase taper. i thought there was very measured. i do get excited. >> we will make a decision about whether to raise the federal funds rate. i would say the committee is of a mind to raise the federal funds rate at the march meeting assuming that conditions are appropriate for doing so. >> that was pre-much expected. he did not say we would just do the march rate hike but he said we are watching the economy. in terms of this, they are not ruling out rate hikes at every meeting. it was an answer to a question. he talked a lot about the uncertainty. he did not rule it out. he did not say that could not happen but that is something a fed chair would probably not to

mean the because he doesn't know what will happen yet. if you are looking for rate hikes, you probably still are. jay powell did say this might have been a little bit more hawkish. the fed is watching the risk that inflation could become persistent. high inflation. the fed is ready to act as appropriate. i think it is true that the fed is putting this on notice. they are not thinking about going back. they're not thinking of doing anything. they are on the way to raise rates. when it comes to the balance sheet, the fed even put out a list of principles of how they are going to do this. paolo said we really have not planted out deftly. we don't have a set path. maybe we will find out when we get that and it's from this meeting. the fed is actually trying very hard to hammer this out.

but again, it is only january. the balance sheet runoff is inspected to start in june. it is maybe a bit too far until we get a little bit closer to that date. a lot of questions, some answers. very interesting to me how the rockets reacted so far. >> let's get some more on the market reaction. garfield reynolds joins us. he saw a little bit of selling going on as chairman powell was speaking. what can we expect today? >> kathleen alluded to some of the nuances here. there are plenty out there. for bonds, nuance is not much of an issue. it is just a pretty brutal

outlook. especially in new zealand and australia. you have kiwi inflation and the aussie ones from a couple of days ago. the central banks in new zealand and us really are going to be tightening and the markets are going to be pricing for them to go even more aggressively than they will end up doing. however, when it comes to the rest of the markets, the idea that central banks will respond to inflation is mostly a welcome one. perhaps investors are partly taking on where the idea that the reason they are doing it is that they think the climate is fairly robust.

investors are looking around and going now we have some certainty. now we are looking to deploy money where we are seeking to make gains. equities are still the place to be. you don't want to go into bonds because they will crash. >> we are seeing futures pointing lower. they have fallen nine out of the past 10 sessions. this seems to be the position between what the fed is doing and what the pboc is now signaling they will ease. what is more important for asian markets this year? >> that is a question we will find the answer out to in the coming months.

in a lot of ways, the pboc might be more important because the fed -- it is very clear what the fed will be doing. they will be tightening. whether that is somewhere between three hikes or 4, 5, 6 hikes, -- provided they stick to a fairly reasonable tightening path, the question becomes what does the pboc do and how effective is it question mark from ages point of view, especially if the fed ends up slowing in the u.s., asia will need a healthy chinese economy. at the moment, that is very much a question in progress. can china's economy turn around -- turn it around? if it does, that would make asia look potentially more attractive

. that is my best guesses on a very fluid situation. >> thank you for helping us sift through those trick questions. you can find his best guesses on the blog. you can also get a market rundown in one click and there is commentary and analysis from bloomberg's expert editors. that's get to vonnie quinn with the first word headlines. >> the u.s. has delivered russia a written response. moscow wants nato to close the door to ukraine rejoining the organization. antony blinken says the u.s. is still open to talks and he expects to speak with sergey lavrov in the coming days. >> we are open to dialogue.

it remains up to russia to decide how to respond. we are ready either way. >> boris johnson is refusing to resign as he awaits the findings of a police probe into alleged lockdown parties. he said he could not comment on the matter while still under investigation. the prime minister has faced repeated calls to quit. he is reported to have attended celebrations. >> we have taken the tough decisions. we have the big cause right. i am getting on with the job. >> more than 10 billion covid vaccines have been administered across the globe. the distribution has been lopsided as higher income people are inoculated 10 times faster than those were poor.

the national abyss committee said the president will -- this is the latest ever to ease concerns about the chinese territory well this -- she disappeared from public view following her accusations of sexual assault. chinese authorities are supporting the efforts to put off the meeting. -- set up the meeting. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. >> we have breaking news the moment. they are finding the joint chiefs of staff saying that north korea fired and identified -- and -- an unidentified projectile. this is the sixth such lawn's -- lunch.

the minister also commenting in the meeting saying that north korea fired this unidentified projectile toward the east see. >> let's have a quick look at the markets we are tracking and australia. a good day. better by 9/10 of 1%. financial materials are leading the way. we have seen the oil price surging. new zealand getting a bit of momentum. better by 2/10 of 1%. the nikkei pointing to a better open as well. we are keeping our eye on those yields. the new zealand 10 year yield at 2.7%. this is the fastest since 1990. the aussie 10 year's back about

2%. as we look ahead to the first meeting of the year on february first, next tuesday. still to come, we look at a long-term investment. this is bloomberg. ♪

>> starting to understand this will be faster than people had anticipated. >> they made it clear they are not going to shrink the balance sheet until they start raising rates. >> the market can anticipate the fed. >> the problem is they still have to deal with inflation. >> if we see inflation starting

to fall, we know that we have moved into restrictive territory. >> that was some of our earlier guests reacting to jay powell's press conference. i want to start with how hawkish or dovish was jay powell in his pressure? there is a lot be made of the fact that she was asked if the fed could do rate hikes at every meeting. he talked a lot about the uncertainty of inflation. he did not say it could or -- nor did he say it could not. people are interpreting that they did not say they would not do that so it is still on the table. what do you think as a former central banker yourself? >> you never want to them at your flex ability. i think he did the right thing

which was not really comment on that issue. that does not mean he will do it but he wants to retain the ability to raise interest rates at every meeting or even do a 50 basis point raise at some meeting. his tone in general was more hawkish than the statement itself. that is because he was filling in some of the blanks that the statement had. we will raise rates -- it will be appropriate to raise the target range. that is with the statement said. he basically said march. i think he filled in the blanks that were seen as much more hawkish but i think he did a reasonable thing there. >> given where inflation is now and where the economy is now, he was fairly positive on the labor market. how many rate hikes will the fed need to do? >> i think that when you look at bond yields, the 10 year at one

point is seven. the expectations of inflation below to -- 2 there is a sense that the fed will have it under control without raising rates too much. that is where there is a little bit of a disconnect. that implies that certain elements of inflation are transitory. the fed won't have to do too much to bring it back under control. if inflation is expected to be 2.5 or three over the perceivable future, the fed has to raise rates a significant amount above that to bring it down. so something like 3.5 or four. that is not being priced in right now. my sense is maybe that is where the market will have to go to realize what the fed has to do. >> recently we spoke on a panel

and you talked a lot about emerging markets. what is the message for emerging markets? is this priced in for them? that is is a central bank that means to do whatever it takes? to make sure that inflation stopped rising and starts coming back toward that 2% target? >> at think that was the message that chairman powell was trying to convey, that we will do whatever it takes. he did however say this is a world with a lot of uncertainty. when you look at the uncertainty around the world, there is the china issue. how strong chinese growth will be. how much the property sector will matter. there was the russia and ukraine issue. will russia make a move? will prices go through the roof? these are very big uncertainties.

the virus can't be written off. we will take that into account but on current trends, we have a strong labor market, reasonable growth. it is time for us to raise rates. don't believe that we will not work our hardest and essentially set the ground for strong growth. >> has the federal reserve: behind? especially compared to other banks? >> even brazil having the most aggressive tightening policy. even the inflation numbers are not being retained and falling below those double-digit gains. i think that even if the fed starts acting now compared to everybody else, when will they potentially be able to rein in prices? >> i think the sense of recent inflation numbers --

my guess is that it is possible the fed has fallen a little behind. it had to wait until it was more certain that inflation was fairly strong. they have multiple effects across the world. it is not just about the u.s., it is about the rest of the world. the fed is somewhat cautious about changing tact. it has changed tax from being in wait-and-see mode to being aggressive today. >> one of the things that set markets falling and yields spiking is when jay powell said he was confident the fed could raise rates threatening the

labor market. was he correct on that? >> the markets are not building in the normal fed reaction to this kind of inflation. that could mean a number of things. maybe growth falls off a cliff. i doubt that but that is one possibility. the other is financial markets fall. and then the fed has to back off because the loss of confidence, all of that essentially causes activity to slow. at this point i don't think the fed believes either of these are a huge risk at once to act appropriately but i think this is one of the reasons. we are in a new world. the fed is giving itself some room to react. >> wellness question on china versus the fed. the pboc, china has a property

market falling apart. what does that mean for china? >> for china itself, i think pboc is more important but it is also important to have strong export demand from the rest of the world for chinese goods. i think at this point the extent of fed action predicted right now will not take that off the table. there will still be stronger than for china. the biggest thing for china is if you can meet that demand with some of the ways it is dealing with covid, these lockdowns, with the potential effects on the supply chain and so on. it is the big question at this point. >> thank you so much for joining us. you can get around up of the stories you need to know to get your days going.

this is bloomberg. ♪

>> bogged down by supply chain constraint. let's get over to ed ludlow. to a degree is this causing problems for tesla? >> significant. this is according to the tesla executive. for that reason, the big takeaway is that new products like some -- like semi trucks and cyber drugs are being put on the back burner. >> one else caught your eye on

the outside of things? >> they are doing quick products in boston and berlin. the new jen cells will start coming this month. elon musk said it is going to happen. >> it will be pretty exciting to see that. we will be watching other after-hours. we can see all of these companies struggle. we are watching the south korea lg solution. this will ramp up the expansion plan. we will have more on that next. this is bloomberg.

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>> this is daybreak asia. we have the first word headlines. jay powell says the central bank is ready to waive interest rates in march and has not ruled out a meeting to tackle the highest inflation. powell said it would be appropriate to raise rates soon with balance sheet reduction to start after that. inflation is put well above the 2% target and the strong job market decision. >> i think there is quit a bit of room to raise interest rates without threatening the labor

market. this is a historically tight labor market by so many measures. >> the u.s., secretary says she hopes the house can vote on legislation to aid the domestic ship industry next week. gina raimondo says she is urging republicans to back it despite objections to federal divisions. jay powell said issues will probably extend beyond 2023. >> i don't know that it will get worse before it gets better but there is no reason to believe it will get meaningfully better anytime soon. what has to happen is we need to make more chips. there are no easy solutions. the solution is increased a mystic manufacturing of chips. that is what we need to do. >> china is set to start a nationwide crackdown on money laundering after stepping up regulatory efforts. the pboc says 11 agencies will

carry out the campaign until the end of 2024. china has recently increased efforts to investigate financial wrongdoings. police arrested more than 1000 people in a crack down on the use of cryptocurrencies for money laundering. prince andrew has formally denied claims of sex abuse in a manhattan federal court and is asking the case be decided by a jury. he raised unclean hands as defenses. global news -- global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. ♪ >> we are seeing a little bit of upside after those losses we saw in the new york session. treasury yields surged here in

new york and in the regular session. it was quit the reversal with equities higher for much of the day but then we had chair powell speaking. ready to raise interest rates in march. a bearish reversal in the afternoon. >> i am here in australia as well as we resume trading. the asx is better by 1% now. beach energy is performing on the asx right now. we saw the oil price surge. futures for the nikkei pointing to honestly -- modestly higher. you see across the bottom of the screen, we are watching yields for the aussie and kiwi bonds very closely. new zealand had blown out cpi numbers.

5.9% year-over-year. this is the fastest rate of inflation since 1990 in new zealand. bond yields rising here in australia when we had a similarly high inflation. >> when it comes to china's industrial profit numbers, out in the coming hours, let's go to the chief economic correspondent for his take on what to expect. this ends with the fed signaling that we are about to move very soon. a lot of expectations for investors have really been on china. where china goes. the policymakers seem to be turning to more easing. what can we expect from the eco-numbers? >> we are looking at the industrial profit side of things. we are looking for stability there. they are forecasting a 10% year-over-year game. 9% in november.

some upset, ppi will take pressure off growth. ppi inflation has been slowing in recent months. there is a bit of a price drag. the industrial sector of china is still the stand out. there are? over how long that can continue. -- there are question marks over how long that can continue. they are still pointing to ongoing momentum on the factory side of things. >> we did have the fed confirming that march looks like the meeting for rate left off in the u.s.. what sort of pressure does this put on asian central banks? >> the fed was turning pockets.

indonesia has signaled a hawkish term. and of course they are getting this on the way. there is a going to have to accelerate the policy normalization process. maybe they would not have to hike. that is because when you have broadening interest rates, it will automatically bring capital away from this world. that is not an environment that economies want to be in. the trick is never getting all of this because we are still in this pandemic.

if we do see a wave of the virus hitting asia over the next couple of months, then you have a scenario where central banks are going to have to tighten policy. i think the central bankers will feel a little bit more comfortable this morning. they don't want to do so too much because there is a risk of choking their own recovery. >> of virus infection still the top story in japan and south korea as well. we are counting down to the beginning of trade there. the commercial and education communities for testing the strict covid 40 curves as virus cases hit records. also, this coming at a time when japan is set to miss its targets to deliver 15 million booster

shots this month after omicron put out the rollout plans. they are paring up with the university of tokyo and recycling. also, and south korea, the big news of the day, lg and energysolutions. the battery maker will begin to trade in just under 30 minutes. we will have more on that in just a few monitors. we will also get some of the final earnings. we will break those numbers when they come. also, the final market reaction to the fed meeting with officials saying they see limited impact so far. >> let's get a little bit more on that trading day. let's bring in the head of a pick research.

give us a sense of the scale of this ipo. it has sucked a lot of energy out of the kospi recently. as and it question mark -- has it not? >> yes. if you compare the implied market cap, it is selling at 19.2%. it is essentially raising $10.7 billion. that gives the market capital $59 billion. if you compare that to the biggest rival, see atl's market cap is around just under 200 him team billion dollars.

in terms of battery capacity, this is just that this price is fairly competitive right now. >> what will this mean for the broader space? will the extra capital actually help it to compete better? >> indeed. it is a very capital intensive business. the prices were not rising as much as the demand that the ipo has indicated. a couple of days ago, we saw the biggest partnership that lg has with gm announcing different

investments. for them to make competitive, it needs more funding. this is the best way to get access to more funding. and for the broader market we are expecting this to increase beyond 10 million for the first time. last year we -- we are around 6.6 million. this means more funding will be needed. >> in terms of battery production, they are signaling they need to build smart factories. >> they have to get their production cost under control. part of that is going back to the atl. the profit margins have been a bit higher than the energy solution. to be able to maintain competitiveness, it will have to

reduce its manufacturing costs. the other part of it is around ensuring higher-quality. one other challenge that lg encountered over the last couple of years was a case of battery fires and recall. and by expanding more automation, you can probably improve quality control. we are getting those final results from samsung earnings. a quarterly profit. we have now seen this climbing more than 50% in the pull of an era numbers. we are getting the consolidated net for the fourth quarter coming in slightly below estimates at 10.6 4 trillion one.

it is not that surprising. we have seen that special -- special bonus from samsung. we also had fourth-quarter sales coming in at 76.57. that is slightly higher than expected. the operant profit of 13.871 which is much higher than the estimate. let's break down the numbers. this is our asian stock reported. you saw a little bit of a left off last time when we had the pulmonary numbers. what are we expecting now? they are still down pretty percent from their peak last year. good morning. yes. we already know that this is given to employees but this all

reported pretty strong growth. revenue was up about 20%. the operating profit jumped more than 50%. it was the fourth successive quarter of red course failed. the committee finished the year of 2021 with a record annual sale thanks to the memory trips -- chips and the sale of smartphones. we are getting more details from this earnings release right now. the company shares have been following in line with the kospi, the broader benchmark cost. there are several factors that played today that will move samsung shares. also, the investor movement after the fed meeting, hinting at the march rate hike. there is this market of the

elegy energy solution. >> what are we expecting to hear in terms of outlook considering the ongoing ship shortage? >> later this money, samsung's new leadership will be speaking to the investors. it will be their chance to set out the vision for the copies future and discuss the new and revised business. samsung is combining its business similar to apple. they will be talking about the capital expenditure plan. they are setting out to spend

capital -- record capital expenditure for 2022. how much samsung will be keeping pace with them will be focused on during the call. >> they are sandy 2021 total capex was 1.2 trillion one -- won. that is down 92% year-over-year. the semiconductors 8.8 4 trillion won. all of those numbers are disappointing. anything that stands out to you? >> we are still any more details. but definitely investors want to hear about what is behind this disappointment. it may be some of the supply chain disruption. it could also be -- it could also -- it could be a higher

cost. samsung has mentioned they are trying to protect profit ability. given their focus on the profitability we will see how they are trying to protect their margins going forward. >> you can also turn to bloomberg for more on samsung's earnings. go to tliv to get commentary and analysis from bloomberg's expert editors. next, long-term investors make need to take a different approach as they push forward with their phone agenda. how they are navigating changing national and social interests. this is bloomberg. ♪

>> we are joined by the founding partner here. founded by the private equity market cc. it is great to have you with us. the top news of the day is how the federal reserve is doing in terms of signaling tightening. what do you watch out for? >> thank you for having me on

the show. the fed rate hikes, everyone was talking about this recently and for us, inevitably, how the capital market reacts to the fed rate hikes will eventually affect the private market. however, given the long-term perspective, even though it was an adjustment of expectations for deal values, we will be having some time to adjust to that impact. >> given the tiny moves from the central banks and other countries, people are really focusing on what the pboc and china will do because they are signaling what the opposite. do you see any opportunities there question mark >> yes. absolutely. and even though the u.s. fed is definitely going on with the

hawkish approach, the pboc is sending a clear signal. it will be eased on the credit side. given the recent situation with the real estate markets and the volatility in the capital market, i think that is a positive signal and as a private equity investor, we see opportunity not only related to liquidity but also we see more fundamental changes and drivers happening on the ground like technology driven changes as well as geopolitical impacts. that will have a long-term and profound influence on the supply chain. >> the digital economy is one of your key investment themes in china. how confident are you that the

regulatory risk is starting to receipt? >> for the restrictions, it is coming from two places. one is from the geopolitical influence. the chip supply for example. and the domestic production. that becomes a very clear trend. we were listening to the semiconductor sector. china currently relies on 80% of imports. that is a huge market as a reflection to that very strong gross and the demand that you see in one year in 2020. in one year, you see 16,000 starting off in that sector. as a venture capital, we see

there is clearly a lot of investment opportunities in all parts of the supply chain. more important they, for the longer-term perspective we will look at different impacts across different sectors. physically to the vertical sector. one is health care, digital sector. those all represent very promising growth. also, the reason value collection as well in the last six months. >> we are out of time but thank you for joining us. do stay with us for thieves was of interview with sophia chan.

we will be talking about the lender's efforts to stamp out covid and what the exit strategy might be. that is coming up at 11:00 a.m.. this is bloomberg. ♪

>> this is set for its training debut. it is meant to be the third-biggest company on the benchmark.

also, samsung because the fourth quarter profits missed analyst estimates after the company's strip did a special bonus. we have the market opens in se iyk abd tijti bext,' tgu -- seoul and tokyo next. this is bloomberg. ♪

>> welcome to "daybreak: asia." i'm shery ahn. >> i'm paul allen it cindy. -- in sydney. asian stocks for a choppy trading session after banks march lift off lead further hikes. treasuries slide while the dollar jumps. south korea's largest ever ipo

starts trading. lg energy solution ranks as the third biggest company on the kospi. samsung posting fourth-quarter earnings missed. business uncertainties looking safety persist. shery: japan and south korea coming online. we are waiting for the kospi to start trading. -- up three tenths of 1%. -- point in percent. we are really mindful of the kospi heading towards bear territory. finally higher, but muted at the open. we are still waiting for the traded of lg energy solution. it would rank the third biggest company on the benchmark kospi after soft and electronics. we are watching samsung electronics to start trading. they just missed analyst estimates on their fourth-quarter profit because they had a special bonus. not to mention increased spending. turning to japan. we see the nikkei gaining .3%.

led higher by financials and energy. the topics is also up .5 percent after falling into contractionary territory. this as we watch the japanese yen weakened against the u.s. dollar. this is as the fed signals more tightening and the policy divergence coming into play. lg energy solution trading debut. opening 597,000 long. . the ipo price was 300,000. so we see a jump of 90% or so. really a huge upside for this company that is now valued at $59 billion. it would be the third biggest company on the benchmark kospi. some analysts think it is much lower than its competitor in china, and perhaps much more to go. it was a huge ipo in south

korea. it took market demand away from the rest of the kospi. now heading to the bear market. trading here really the reverse dynamic. but we see lg energy solution surge at the open. electronics also gaining .7%. paul: a huge open for lg energy. on earth, aussie stocks behaving a little bit more normally. high by about .5%. energy really leading the way. i will tell you more about that later. turning negative after a flat start to the day. keep an eye on yields. 2.7%. hasn't been there since 2018. this is after a very hot inflation print. 5.9% cpi on year. the highest inflation we have seen in new zealand since 1990.

the aussie 10 year climbing as well after some of the remarks by fed chair jay powell. the rba first meeting of 2022. keeping a close eye on that for the future tightening in australia. i mentioned oil. we looked at what is going on. brent pushing toward $90 a barrel briefly. wti hovering at just below that level, 87.31. a bullish feeling around the oil sector. the u.s. to year. a lot of focus on that earlier today. when jay powell was speaking, it moved to the tune of three standard deviations. huge move on the two-year. the 10 year also rising up to 185. positive territory after we saw selling to close out the day in the u.s.. futures currently higher by 5%.

the fed was behind all of those. jerome powell all but concerning. the rate hike coming. he's keeping the door open to move at every meeting. >> the open market committee kept its policy interest rate near zero. it is an expectation the increase would soon be appropriate. the economy has shown great strength and resilience in the face of the ongoing pandemic. we continue expecting inflation to decline over the course of the year. in light of the remarkable progress we have seen in the labor market, inflation above 2%, the economy no longer needs sustain high levels of monetary policy support. we will need to be nimble to respond to the full range of possible outcomes. the committee is of a mind to raise the fellow funds rate at the march meeting, assuming conditions are appropriate for doing so. paul: for more market analysis, let's bring in an asia equity

strategist for jp morgan. doing ok until jay powell started talking. really began to happen. sank where we talked about keeping actions open. the big spike in the two-year. after the press conference is out of the way, the monetary policy. >> this has been -- this meeting in particular was tricky. coming into this meeting, we had an inflation trend that was running hot. look at the headline your numbers, they probably say hot until the april month. if you look at growth indications, it has been slowing down. but you can kind of assess it as being temporary. it is entirely up to the fed, which really chose to go. chair powell decided to go more hawkish. it is becoming a running trick. every meeting has been surprising.

at this point, jp morgan forecasting four rate hikes, which jay powell confirmed. like him, we are keeping an open mind, in terms of how the policy might change in light of incoming information. paul: asian central banks with the exception of china industry, looking to move down the tightening path a little more. where do you go? >> by reaching globally, it is the place to be. you look at the three things that are favorable this year, the value is doing well. this is something we continue to do well. the second thing is it is turning around. the third thing is the dollar is probably not going to strengthen a lot as we saw last year. those three things together, the asian region looks attractive

from a global perspective. if you follow the quality, china is the place to be. the market preference framework, china was upgraded earlier this month, which i think was a timely call. on the other hand, we downgraded to the markets that were consistent until last year, korea, taiwan, and india. >> what do you think of the semiconductor space, especially the likes of south korea, taiwan, samsung missing estimates because of those one-off expenses. >> the semiconductor, you have to differentiate between korea and taiwan. they follow different cycles. the korean space is linked to the memory cycle. it is a little bit better. the memory within that. the semiconductors space in

taiwan, which is about to peak this year. timing is difficult. but it definitely looks a lot less attractive. the framework is underway of both markets. better from a tech cycle perspective. shery: can we see more upside, given lg energy solution has finally made its trading debut? >> lg energysolutions could be the second largest just by the end of today, definitely by tomorrow. but if you look at the korean market, there is a large chunk in the memory linked space. and we have the larger markets in the world. the largest exposure to ev's and supply chain at this point. that also looks quite

interesting. shery: when it comes to what we see in the central banks and how they are moving, whether it is the boj or pboc, how do you see it across assets? what will you be watching? >> the one simple rule is to follow the policy. you go where the policy is being eased. at least for this year, it will be china. china or the rest of the other markets. from a global perspective, it looks to be the case china is one of the larger places where policy is being significantly eased. china policy has always been somewhat disconnected to global cycles. for instance, they were tightening last year when the rest of the world was not. china underperformed spectacularly. that would be one mark and we would be very focused on it. shery: jp morgan asia equity

strategist mixo das. earlier, he said we could see lg energy solution becoming the second-biggest stock on the kospi, given the surge we see of more than 60%. jumped 99% in the debut after its record $11 billion ipo. but of course, we continue to watch the stock heading towards the flows. the third biggest company on the kospi after samsung electronics and sk hynix, but in a few days, it could turn out to be the second largest. now trading at 486,500 at the moment. take a look at samsung and sk hynix. intel, as well. samsung missed analyst expectations for the fourth quarter profit. this after the company

distributed a special bonus and increased spending on advanced production technology for chips and displays. we will be watching sk hynix, gaining because we have a fourth quarter earnings number later this week. in the physical fourth quarter and in december, sales may have grown strongly from a year earlier, and it could be consensus of 12 trillion. we are watching intel. disappointed a little bit when it came to the forecast of where revenue was headed. weak earnings outlook reminding investors spending plans are a bit of a drag on margins. that's get to vonnie quin with the first word headlines. >> the u.s. has delivered russia a written response rejecting most of its demands over ukraine. moscow wants nato to redraw borders.

possibly barring them from ever joining the organization. secretary of state antony blinken says it is still open to talks and they expect to speak with the foreign minister in the coming days. >> we are open to dialogue. we prefer diplomacy. it remains up to russia to see how to respond. we are ready either way. >> boris johnson reviewing to -- refusing to resign as he looks into a police probe of alleged lockdown parties. he could not comment on the matter while under investigation. he's reportedly not attended celebrations were most were banned from such events. >> we have taken the tough decisions, gotten the big call rights. i'm getting on with the job. >> sources say justin ceva briars is retiring.

it gives president biden a chance for his first vacancy on the court. biden stated nominating the first black woman to the post. the oldest justice at 83. he was appointed by bill clinton in 1994. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. paul: still ahead, deeper analysis on lg energy's business and growth prospects. plus, tesla and intel focus on production amid the supply chain crunch. we get the latest from the earnings results. this is bloomberg.

paul: let's check a couple of

after hours movers. we heard from tesla and intel. tesla beat on just about every metric or profit. beat on revenue, earnings-per-share. beat on gross margins, as well. went for a wild ride after hours. nudging tesla higher. and often using 46 80 batteries. slumping after the forecast profit, excluding some items. $.80 a share in the first quarter. there was an expectations per share on average. expected to be about 18.3 billion. let's take a look at the really big mover. that is lg energy in south korea. debuting on the kospi. not as impressive as we were a short time ago. lg energy was above 90% at one

point. now 63% from lg energy. designs on becoming the largest ev battery maker in the world. lg energy surging. shery: let's discuss the company and bring in our global business reporter. what can you tell us about the company and its first trading day so far? >> south korea is now -- almost 100%. trading at almost double the ipo price. the benchmark kospi, it depends on electronics. traders are betting on korea's business, the ev battery makers. the lg solution will be the kospi 200 index, very important

for the investors. paul: tell us about lg energy's outlook. a bubble after the stellar day move. >> definitely. lg is the world's largest maker, following china catl. it is in partnership with a lot of other automakers. even tesla. of course, investors are worried about a bubble in lg chem because the market cap is $100 billion. it is just 1% of the current market cap. of course, some traders are worried about the high valuation. some investors even told me they are worried about their

investment in the business. naturally, the battery business is a risky one, because the market -- margin is clean, and it is volatile. it is highly dependent on the commodities market. they said all of those active and aggressive investments reminds them of the oversupply in other industries, such as chit building. -- chit building. paul: and of course, the biggest player in the ev space, tesla managed robust results. it is being bogged down by supply chain constraints. >> while better than last year, it is still an issue. there are multiple supply chain counters. paul: crossing to west coast reporter ed ludlow.

when he goes to them now, he's only got something big to say. what is going on at tesla? >> this is what was fascinating. we thought he would be on the call to outline a product roadmap. a key takeaway was knowing new products in 2022. it links to those supply chain issues. we wanted to know about cyber trucks, the futuristic looking pickup truck. loads of people asked if we were going to hear about them. semitrucks back to 2023. elon musk said they were struggling for parts and had supply chain crunches. so launching new products doesn't make sense until that situation is resolved. shery: the chinese market very important, in terms of demand and output. did we hear anything? >> surprisingly little. i was surprised there was less

commentary on china, even though margins are boosted coming out of shanghai this year. it links back to supply chain. shanghai factory in fremont california factory have had production volumes depressed, or suppressed, by supply chain issues. often plant is coming online, berlin plant coming online. but they will be lower margin. out of shanghai being depressed, that presents some cloudy outlook for profit this year. at the same time, they talked about rising commodity costs, inflation headwinds. you have to put that in the broader context. lower margins out of shanghai is tough when they are trying to bring new factories online. shery: ed ludlow with everything. coming up next, evergrande can come up with an initial debt plan in six months as it looks

to hold off demand from bondholders. details ahead. this is bloomberg. ♪

paul: china evergrande set to aim to present a debt restructuring plan in six months. rebecca wilkins has the details. what do we know? >> china evergrande had its very brief call with investors late last night hong kong time. they confirmed they should have a plan in six months. an initial plan. also reiterating onshore and offshore qualities will be

treated the same. whether it will sway tensions we have seen building between offshore creditors and the borrower remains to be seen. offshore creditors last week had threatened to pursue enforcement action, saying the process had been very opaque. they did not have the ability into the situation. now also hearing the reporting that oaktree is seizing land in hong kong in lieu of a missed loan. we may see more creditors losing patience and trying to advocate for their rights. shery: with sovereign dollar bonds recovering from january lows, will it further give confidence to the company? >> i think probably this alone isn't going to see that bump we saw. we saw the stocks $.10 on the

dollar. about $.16 on the dollar. progress in the restructuring. even quite a few months of silence. i don't think that is going to happen this time. it will be very brief. particularly offshore, much more clarity. a lot of this has already been reported in the media. so there wasn't much actual context. i do think there is greater intervention. in hearing this impatience should help. shery: rebecca wilkins, our china editor with the latest on evergrande and issues surrounding the property sector in china. this heading towards the industrial profit numbers. coming up next, samsung profit misses on increased spending. a special bonus. the details ahead. this is bloomberg. ♪

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>> starting to understand they have to do something. probably have to go a bit faster and farther than what people have anticipated. >> the fed was really late in the game. >> they made it clear they would not shrink the balance sheet until after they raised rates. >> it is important the market understand what the fed is doing and why. the market consists is the -- consistently say it. >> the problem is they still have to deal with inflation. >> if we see inflation starting to fall, we know we have moved into restrictive territory.

shery: discussing the central bank meeting and jay powell's remarks in more detail. kathleen hays is here with more. how hawkish has chair powell's message been? after the statement, we saw stocks rising to session highs, and completely reversing course during his speech. kathleen: it has a lot to do with what markets, what investors, the comments expected going into the meeting. they made the hawkish turn. what kind of message would jay powell bring to the table? he did not signal a 50 basis point rate hike, immediately stopping the bond taper. he made it clear the fed is going to do whatever it has to do to cool the hottest inflation rate in 30 years. he certainly all but confirmed the rate list off was coming. it is on the fed's minds. they have to see what the omicron variant impact is. how many race they will do is

inflation. some percent year-over-year. the market is priced in rate hikes. because of the things powell said, he did not say anything suggesting we would be more hawkish, making more rate hikes. he did say they are going to have to be nimble. he said inflation could persist, could move even higher, and the fed will have to be ready to address it. this is why people say they are going to raise rates, three times, five times. the door is open to keep moving. in which case, we would see much higher lines when we get to the far side of that screen. when it comes to the balance sheet, the fed has set up a lift st of principles. they are not ready to talk about it yet. it is widely expected they will start in june.

assuming they do the lift off in march and the taper is finished. that may be subject to getting more aggressive, selling treasuries. no questions about that today. if you thought he was going to be dovish, this was a surprise. if you thought he would fight inflation, may be he reassured you the fed would not let it get out of control. paul: jay powell determined to fight inflation. what does it mean for fed pboc policies of virgins? kathleen: given how things stand, we can only assume divergence is going to get bigger. the fed has signaled they are ready to height rakes definitely. the only question is how many times. people think china has signaled because they have a property market meltdown, consumer spending has not sped up. they are ready to take more steps in 2022 after the steps toward the end of last year. to start easing more to start moving down some of the key rates. they will target small business lending, etc. it is also very important the

question of fed tightening, what it means rolling the global economy down, as well as the former head of the reserve bank of india. the school of business in chicago, he said there isn't so much that the fed will have to do so much. it is just with their own steps right now. meeting the export demand he thinks will exist. >> the extent of fed actions that are predicted and the pace of fed actions will not be taken off of the table. there will be strong demand for china. the bigger issue is if it can meet that demand with some of the ways it is dealing with covid. there will be lockdowns with potential effects on supply chains. shery: in some ways -- kathleen: in some ways it is

similar. each central bank happy to deal with an issue that is very big right now. inflation so high for the u.s., it is a political issue, a political hot potato, i think the people's bank of china, with property markets, that is a very important part of their economy. they have to deal with it, too. the bank of china's new mantra is "we set our own agenda." so they are ready for this. i'm sure the fed is going to do what they have to do. shery: kathleen hays with the latest. all central banks, we continue watching what happens with the coronavirus pandemic. south korea with a record number of cases. 14 518. daily new covid cases. the second consecutive day of record numbers for south korea. we had it at around 13,000.

today is at 14,000. after we heard from the prime minister that we are going to see the governor focusing more on these and we are using the number of critical cases and deaths to buy them. 32 deaths in the past 34 hours. look at what markets are doing now. we are seeing the downside on the kospi. down .8%. consecutive session of losses as the kospi is near bear market territory. the lowest since december of 2020. despite the fact the trading debut of its biggest ipok lg solutions -- ipo, lg solutions, seems to be successful. japan losing ground. reversing the gains we saw earlier today. the japanese yen also weakening against the u.s. dollar. paul: we spoke earlier to a

former fed official about the rate hike path. he says the central bank feels the imminent need to be more. >> moving in a hawkish direction. if you look at the policy settings, the interest rate is zero. they are still buying bonds. it is about to end. it hasn't ended yet. it is hard to say they are hawkish right now. but they certainly are feeling the need, the imminent need, the immediate need, the move in that direction. shery: let's listen -- kathleen: let's listen to an answer what he said to a couple of questions. >> there is quite a bit of room to raise interest rates. by so many measures, this is a historically tight labor market. kathleen: sounds like he's quite comfortable, if not, satisfied

with where the labor market is. he wants people going back to work, production picking up. as long as things stay where they are, is it another reason to expect fed is on the right height path -- rate hike path, and they don't have 3, 4, 5, or whatever. >> that is right. a set plan now. but as i said before, stopping before four rate hikes, which is one percentage point, seems very unlikely to me. unless the economy starts cratering, never mind slowing down. that doesn't seem lucky either. some people they think they have to go to 3% or 4% eventually on the funds rate. i doubt that. but they know that it is a possibility. and it is going to be dated to

dependent. paul: one of the things the market was looking for was the idea of the almost $8.9 trillion balance sheet and how it will get runoff. no real timing. how much of it will be a source of uncertainty for markets? it will become a bit these are very large markets. they will do whatever they decide to do. whatever rolloff schedule it decides is appropriate. preannounced, very open, everything would be public. deep in the market would be to tell you down to what is going on, what will happen in the next few months. the fed will not use it as an instrument to surprise markets. shery: still really moving decisively toward the tightening stance.

how difficult of a balancing act would be for all of us to have this inclusive recovery. but you also hurt the most vulnerable first. >> first of all, they have largely achieved the inclusive recovery. you can sort of see that is the body language. why would he say "i don't want one single more american to get a job, especially if they are a majority"? he will not come anywhere near saying that. but it is clear the fed is satisfied with the labor market. shery: alan blinder speaking with bloomberg earlier. let's now get to vonnie quin with the first word headlines. >> ioc says the president will meet with functional i during the beijing games. it is to ease concerns about the

chinese tennis stars well-being after she disappeared from public view. in a statement, they confirmed it has been in regular contact with her and chinese authorities are supporting efforts to set up the meeting. china is set to start a nationwide crackdown on money laundering after stepping off -- stepping up regulatory issues. they will carry out the campaign until the end of 20 tony for. china recently increased potential wrongdoing. in june, arrested more than 1000 people on the crackdown of cryptocurrency from money laundering. bloomberg data showing more than 10 billion covid vaccines administered across the globe. that equates to 127 doses for every 100 people. the distribution has been lopsided as countries and regions with the highest income have inoculated more than 20 times faster than the lowest. it will take another five months until 75% of the world's

population has received at least one shot. the u.s. commerce secretary says she hopes the house can vote on legislation to help with the domestic chip industry. she says the bipartisan support for the bill has poor goals. she is urging republicans to back it. jay powell addressed the press conference, saying the issues will extend beyond 2023. >> i don't know if it will get worse before it gets better. there's no reason to believe it is going to get meaningfully better anytime soon. we need to make more chips. unfortunately, there is no solution. the solution is increased domestic manufacturing of chips, which we need to do. >> vulnerable -- >> global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quin, this is bloomberg. paul: samsung's fourth-quarter profit the estimates after they distributed a special bonus and

increased spending on technology for chips and displays. susie kim joins us from seoul. walk us through samsung's final results. >> they missed first quarter net income estimates. the companies heavily invested in a new chip and new technology. although the first quarter fell short of projections, it was not a disappointment. a new record in terms of sales, thanks to strong chip demand. memory demand was solid in the third quarter. despite memory prices, we refrain from selling chips aggressively. it didn't cause oversupply in the market. it is also a record high for sales. seeing flooding of orders from manufacturers willing to pay more in the wake of the global chip shortage. shery: did we get signals of the

outlook of the memory markets for 2022. i know they were trying to weather this downturn so far. >> they are basically optimistic about the memory market. recovery in the global it demand, correction in memory prices in the last year. . it led a falloff compared to share prices. prices started to increase. then prices stabilized. the more meaningful factor is some type of collective efforts to maintain stable market dynamics. that is part of the reason why the market is getting covenants the memory market may not have first round, volatile boom and bust cycles. many market players see the markets recovering already. on the cycle later this year, it will remain tightened. intel said today it would roll

out a long-awaited processor developed by intel from the first quarter that would further drive up demand and prices. samsung said it would see strong demand from boats from the server -- >> the latest on samsung, which remains under pressure. turn to your bloomberg. for more on this, get your commentary and analysis from bloomberg's experts. this is bloomberg. ♪

>> dragging the fallout of the crunch. boeing planning to ramp up production rate to 31 jets each month. facing a labor shortage. currently relies on a consolation of smaller manufacturers, facing worker shortfalls of 10% to 20%. just after a report that nvida is abandoning its deal, another

agreement falling apart. germany will let a looming deadline for approval for $5 billion takeover of labs. it comes amid increasing oversight from governments and the industry becomes a critical opponent -- component of the global economy. u.s. retailers bracing for more returns than usual, adding stress to an industry grappling with labor costs and supply chain issues. they are expected to bring back more than $761 billion in march if ice cash merchandise. half of total retail sales in 2021. paul: taking a look at tv makers. several names initially fell in late trading. immediately after tesla flagged its supply chain troubles. ramping up production targets as the market grows. the best being hampered by the supply of components. we heard one name in particular, rivian increasing its output

after a hold on its production line in 2021. terminal users can read more about those stories in our newsletter supply lines. shery: got the markets attention with his super bubble call on stocks. he's now sending a more alarming message that the world needs to prepare for a future with high inflation and slower growth. he spoke exclusively to erik schatzker on "front row." ♪ >> i haven't written about inflation for 20 years. when i did letters, i never featured inflation. i didn't think it was on the radar screen. it is now on the radar screen once again. it is not that inflation will go roaring back to 1972 or 1982, it

will be part of the discussion. instead of forgetting about it, it will be spiking, irritating, and falling back. it will be part of the scenery and the way it used to be in the second half of the 20th century. there is a lot about this economy that will be dragged into the late 20th century. we've had a very abnormal honeymoon, goldilocks period, which i think is ending. we are in the early stages of running out of raw materials. of course, we live on a finite planet, there is a certain amount of cheap oil, nickel, and copper. and we are beginning to hit some of those boundaries. and we will have bottlenecks everywhere. the food price index is about as high as it gets. growing food is not getting easier, climate change is coming

with heavy floods, serious trials, and higher temperatures. none of this makes farming easier. living in a world of bottlenecks, shortages, and price hikes, and we have to get used to it and manage our way. >> the federal reserve is confident it can contain inflation with a series of incremental rate hikes. what do you think it will take? >> i think the fed absolutely does not get the pain involved in the bubble breaking. you can see that in the history of the last 50 years. encouraging the tech bubble and dragged about the productivity gains from the internet that would last forever. productivity has declined slowly but surely.

when it broke, it caused a lot of pain. courage for housing bubble, he denies the existence, it had never occurred in american history before. what have we learned? we learned straight back into the game, overstimulating, pushing the rates down, down they have gone for 50 years. they started at 16% on the long bond. now the real return is minus two. >> longtime critic of alan greenspan, a critic of ben bernanke. by extension, janet yellen, too. do you have confidence in jay powell? >> no. he hadn't expressed any reservations about greenspan, bernanke, yellen, policy of pushing rates down. >> cofounder jeremy grantham

speaking exclusively with bloomberg's editor-at-large. let's check in on commodities. oil the big one. really seeing brent breakthrough $90 a barrel. now hovering just below. oil trading near a 70 year high expectations of global demand picking up and stockpiles dropping. the u.s. stockpiles falling again this week. the lowest at this time of year for almost a decade. pretty much everything rallying. nickel certaiis higher than -- a little more than 2%. a part of the rally, the commodity spot index tracking 23. including energy, metals, and crop futures. fresh record as concerns over inflation continues. shery: take a look at how lg's energy is doing.

paring back from earlier gains. pretty impressive, given the kospi down more than 1% at the moment. plenty more ahead. this is bloomberg.

>> the kospi up, samsung after missing the fourth quarter expectations on profits.

lg energy solution doing pretty well on its trading debut. rising more than 60%. markets coverage continues heading to the start of trade in hong kong, shanghai, and shenzhen. this is bloomberg. . ♪

>> here we go. 9:00 a.m. in beijing, shanghai, and hong kong. welcome to the china open. i'm david ingles with yvonne man. >> our top stories. >> there's quite a bit of room to raise interest rates without threatening the labor market. this is why so many mirrors -- measures type labor market. >>