paul: good morning. shery: welcome to "daybreak: asia." the global stock rally set for a pause. how quickly central banks will tighten. mr. earnings from big tech hitting sentiment. spotify slumping in late trade.

also data show many member states already failing to deliver. paul: just open for trade here in australia. it has been a mostly positive week. we have the staggered open here. one thing we will keep an eye on is westpac. it's not going to kick off trading for a few minutes yet. in new zealand, another positive day on the nzx. dk futures pointing to a slightly weaker open. the aussie dollar also weakening a little. surprisingly strong since the dovish statement we had earlier in the week. shery: take a look at futures

trading. in the u.s., we see the downside pressure when it comes to the s&p futures down 7/10 of 1%. not a surprise given the disappointing numbers we got from meta- and spotify. when it comes to oil, it's also under pressure after the seven-year high. let's delve into the results from meta-. it was almost on every metric where they disappointed forecast. let's bring in ed ludlow for details. what stood out? >> the 2.9 one billion active users stood out. the last hour, you asked me the same question and i was flabbergasted, i didn't know what to say. this is the first quarter that i and my colleagues can run but that we have seen zero growth

from meta or facebook's platform. sheryl sandberg saying how in the younger user base, growth is being hit by the youth but -- i the likes of tiktok and youtube. they are competing with platforms for the screen time attention of people all over the world. then on the top line, the outlook was weak. the street was looking for almost $30.5 billion. the answer there apparently is advertisers frontloading their spending. it's not clear on the macro picture. then, you have the apple ios checking privacy changes. it's a lot. paul: let's talk about the future of meta. it has been about $10 million --

it has spent $10 billion on that. are investors convinced it's the right path? >> that's the whole point. this is the first time the metaverse has broken out in the financials. according to bloomberg intelligence, that relates to a drag of 10 percentage points on margin. that is significant. investors are clearly asking with this after-hours move, is this bet paying off and when? that's a lot of cash to part with. we are down 22% after hours. if that holds off to regular hours on thursday, that will be the biggest post earnings loss on the share since 2012. a point that out because this is a serious reaction.

wall street investors are clearly picking at something. maybe it's the meta investment -- the metaverse investment that they paid. paul: a huge move, and it's going to be a closely watched stock at the open. opec and its allies did what was widely expected. they decided to ramp up oil output by 400,000 barrels per day for the month of march. the group is struggling to deliver on that supply pledge. it's where investors are starting to focus right now. they decide on another moderate monthly increase come up there is still growing fear of potential shortfall. >> that's the story. i came, they ratified the moderate monthly increase than they left and no discussion of what is becoming the key issue. they have been doing this for several months and they have been unable to meet the 400,000 barrel per day hikes for each nth. not even close. meeting again extremely brief.

it was online as all of the recent meetings have been. they agreed to the expected or rubberstamped the increased. there was no discussion whatsoever on a lot of big issues like russia ukraine and perhaps hiking at a faster pace. goldman sachs was expect in that to happen. there's a lot tougher decisions ahead for these countries. saudi arabia and the uae in particular are more than able to boost capacity. they have a lot of spare capacity. the question is, what did they know about these other countries? from russia to nigeria to libya has had seous decline in their output. in january, they were only able to deliver a hike of 50,000 barrels per day because of the huge decline in libya. what the saudi arabia want to do about price? look at the red-hot rally. prices have been on a tear.

wti and brent crude both nearing $90. we saw wti come within striking distance right after the opec decision. we saw brent crude soar above it . then they both pulled back just a little bit and we are seeing pullback in asia trading this hour. possibly on the disappointment that opec did not address these key issues. meanwhile, we have prices on fire. the biden administration is very focused on how going forward we are going to put a damper on a key source of inflation. shery: what happens next? either for opec-plus or forecasts of $100 oil prices? >> that is now becoming the consensus. opec-plus meets again in march. it is expected to be an online meeting. the issue is, will they start to address these other issues such

as ukraine russia? such as how to compensate for the fact that they are simply not meeting the targets they are setting? separately, we have a lot of analysts on wall street almost all of them saying we are going to 100. ubs was the latest. we have already gotten within striking distance of that just in the early part of 2022. we are less than $10 away. j.p. morgan chase sees oil at $120 per barrel if geo little tensions rise. it is expected to gain unless there is a change in the current situation of revival of demand. lower stockpiles, and sporadic interruptions particularly with geopolitical tensions as a backdrop. shery: let's delve into the geopolitical tensions between

russia and ukraine. u.s. is planning to move more trips to europe and dispatch soldiers already stationed on the continent further east. what are you hearing? >> there's going to be some troop movement. president biden ordering u.s.-based troops to poland and germany. is going to move another thousand from germany to romania. this is about bolstering nato countries on the eastern flank given the fact that we have still seen russia increasingly continue their troop buildup on the ukrainian border and they have yet to ratchet back the troops sent into belarus. the kremlin came out with a strong statement blasting this saying it is unjustified. these are the things that vladimir putin was trying to work against. does not want to see a strong nato and certainly not a heavy hand of american forces in

europe. paul: we are seeing natural gas prices rising again up 16% overnight. what are the implications for europe's energy supply? >> the concerns especially if there will be harsh sanctions on russia is what does that mean for europe, which is so reliant on the fossil fuel industry in russia. more than 40% of the natural gas that europe consumes comes from russia. the biden administration delved into how they are scouring the world for the supplies. we had talked earlier about qatar. now we are learning that their reaching out to even more countries like libya, egypt, nigeria. they are also going to the consuming countries. a lot of these gas contracts are long-term.

they will have to rely on their storage and take their incoming shipments and divert them to your. these are consumers like japan, south korea, india. i think it's interesting that there are some moderate and limited discussions with beijing. we note president vladimir putin is headed to china for the opening ceremonies of the lepic's on friday. -- of the olympics on friday. vonnie: inflation has unexpectedly accelerated to a record. fueled by the spike in energy costs. economists had protected a reading of 4.4%. money markets expect the ecp -- the ecb to raise rates. the taliban is reopening afghanistan's universities after six months. female students may return have

to be veiled from head to to. classes will be segregated by gender. the moves come as the taliban continues to fend for recognition as a government. janet yellen says it's too early to contemplate adjusting capital requirements for banks. she says it's important for regulators to evaluate the hazards. some companies want an aggressive approach to speed the transition toward clean energy. donald trump is wrapping up his play to go activity ahead of midterm elections in november. he has announced plans to speak at the conservative political action conference this year. he is increasingly signaling his attempt to make another bid for the white house in 2024. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over

120 countries. i'm vonnie quinn. this is bloomberg. shery: still ahead, we will break down the latest results from meta and amazon. up next, j.p. morgan's global research chair will tell us why she is expecting five hikes from the fed starting in march. this is bloomberg.

shery: brazil is extending the world's most aggressive tightening cycle. our next guest says markets have a lot to learn about the fed balance sheet normalization. always good to see you. give us some of your insights of what markets and investors should be watching as we continue to see these global central banks moving toward normalization and tightening. >> the point i would make is that this time it's different. it's the higher inflation and the type labor markets. we still have inflation risk because of higher wages, housing prices. we have revised our outlook for

the fed of five rate hikes this year and two more in the first quarter of 2023. i think normalization process for balance sheets starts in july. this is the end of qualitative easing. there is still a lot we have to learn about balance sheet normalization. there are a lot of precedents for this. we are forecasting that the fed is going to shed $1.2 trillion in longer duration assets by the end of 2023. we can move up the 10-year treasury yield forecast to 2.35%. we think the bank of england be hiking rates. i don't see the ecb moving until the first quarter of 2023. even in the emerging markets, we

still have 14 out of 23 emerging-market central banks hiking rates as well. shery: yet you continue to think that e.m. equities while perform market equities. is that because of their preemptive tightening? >> it's part of it is the preemptive tightening. the other part is the massive underperformance last year. equity markets sold off across the board. part of it is also china. china is de-synchronized from the rest of the global economy. it is only one that is easing right now. we don't see them removing the fiscal support. the story in china has been all about stability this year. i see more credit easing than interest-rate policy, but we still have one more cut their. part of this is the china story, part of it is emerging markets started much earlier and you have a buffer as well for the countries that did start early on last summer raising rates.

paul: what part of the story does the u.s. dollar play in this? e.m. does look attractive in terms of valuation compared to u.s. equities but we have the strengthening u.s. dollar. how do you balance that? >> a lot of em weakness has occurred in the course of the pandemic. we see the weakest quarter for growth in december january. think there will be more of a rebound in the second quarter of the year. we are looking at more of a range bound dollar here. i don't see it making a huge move, but for asx, we have seen a lot of this appreciation. valuations that are quite different than another points from the fed has been hiking rates. paul: we have china, hong kong,

other asian markets closed for the lunar new year this week. what catch-up trade do you anticipate on monday when the rest of asia opens up again? >> i think the focus will be on china. it will be on the policy measures that they may be coming out with as well. easing measures. what they are doing at the -- level as well. you could still continue to see that will have to live with some of this market volatility as the new normal. i think we are at a time where we are seeing shorter cycles and greater volatility in that's going to stay with us as we have central banks hiking rates. i think china will stand out for having more ability to put in easing measures. look their common prosperity agenda and the sectors they have been emphasizing. local brand.

they have been very clear on some of the large internet platforms, the community group chats, things that don't have that clear of economic value but i think those things will be deemphasized. paul: thank you so much for joining us. bridgewater associates founder ray dalio has shared his top advice for the average investor. he spoke with david rubenstein on the latest edition of peer-to-peer. >> i didn't have any money, and i remember the cycle. i would start think how much money do i have -- how many weeks, months, years can i take care of myself and my family? i would calculate that. i would be at ok 52 years if no income was going to come in. then i would start to think and if i'm holding a portfolio in

something, maybe could lose half so i should cut that number in half. then i would start to think what armor uses of the money? what do i need to do? how do white immunized that? -- how do i immunized that? you do that and you know how to save. saving things like don't put it into cash deposits they get eroded by inflation and taxes. you start to develop it. the thing you can do, the most important thing you can do is not be in cash. particularly now when there is such negative real rates. to have a well diversified portfolio. that well diversified portfolio, it's a whole subject of what does that mean? it's a well diversified portfolio, not just asset classes, but of countries, different currencies. >> the average person who isn't

a billionaire, should they expect to get a rate of return of 5% per year? is that a good target? what do you think is a reasonable target for someone who doesn't want to take undue risks? >> nowadays, the structure of the market where every thing is priced and dumb the normal way will give you probably a return in the vicinity with a lot of risk around it of maybe 4%. 3%. something that might not equal inflation, probably very close then you have to pay taxes on it because there are so many financial assets. they will send you more money. shery: you can watch more of that conversation on the david rubenstein show at the following

times. we have plenty more ahead. this is bloomberg. ♪

shery: we have lots of earning results. including those from the nations three biggest banks. panasonic says it will start prototype production of a next generation lithium-ion battery. the latest data will give us a read of sentiment in the service sector. markets to reopen after the

lunar new year. the be ok will be announcing. the central bank is also said to be holding a meeting this thursday to review the market situation. we have had more hawkish fed and other central banks starting to tighten as well. pmi numbers for january are due. paul: let's take a look at one of the big movers on the asx. it was up 80% on the second half. we are seeing the shares push higher by two and a quarter percent. changes around management and structure, they will be changes around the chief risk officer. also 1100 jobs have been reduced in the past quarter.

still to come, we are going to dig deeper into metas disappointing earnings. this is bloomberg. ♪

>> i know people say there is no end in sight. i would say that a lot of progress is being made. we are thankful for all the partnership across the supply chain. we will continue to drive more more supply as we go through every quarter in 2022. paul: the amd ceo on improvements in the semiconductor space. these are the top stories today. qualcomm be sales estimates driven by its mobile segment.

the ceo says supply woes still dampened its ability to take advantage for the booming demand of phones. the number of absences continue to drop and that is a welcoming sign for more than 100 ships waiting to unload at the u.s. is to largest ports of los angeles and long beach. sony is expected to sell fewer playstation 5's because of ongoing chip shortage. it also reduced its sales forecast. >> the long tail of the chip prices on the automakers, a forecaster thinks that companies like gm and volkswagen are likely to get production lines bashar unlikely to get production lines back to prepend them at levels this year. lost output because of a lack of

components will be about 5 million compared with last year's 9.6 million shortfall. bloomberg terminal users can read more about the stories in our newsletter. paul: let's take a look at these tech stocks trading after hours. sales and profit look good. we are struggling with the chip shortage and we see qualcomm off target spotify is off 10% seeing monthly active users trailing the average analyst estimates. spotify moving to address some of the controversy around its podcast joe rogan. take a look at meta off nearly 23% after hours. pretty much every metric failed

to meet estimates. there was concern about the amount of spending going on in the metaverse as well. meta saying user additions stopped in the fourth quarter. for more on this, let's bring in wedbush securities managing director for equity research. meta following heavily after hours. we haven't seen a move like that post earnings since 2018. daily active users missed. revenue missed. what's the outlook for the rest of the year for meta? >> it was a really challenging quarter. it is an even more challenging outlook for meta and facebook. one of the largest changes is around metas privacy changes.

that has had real impact on their business. facebook was the best at being able to track and target users for advertisers. it has taken a big hit. something else we saw more than we have ever seen before is how many times management called out tiktok as a competitive threat driving away impressions. that's what you are seeing with the users in the quarter. paul: you mentioned tiktok. let's listen to what mark zuckerberg had to say about that. >> people have a lot of choices for how they want to spend their time. apps like tiktok are growing quickly. this is why our focus on reels is so important.

paul: ed ludlow said he can't remember a time when facebook failed to add users. how is meta went to turn this around? >> it's going to be a little difficult in the near term. there's a couple of critical headwinds right now. on the user front, tiktok, it's something the entire industry is grappling with. we have never seen a platform grow the way tiktok has. now, tiktok is starting to get more critical mass even though it's add platform is new. advertisers feel like they can't ignore the growth and the time that people are spending on tiktok. there is only so much time people can spend on social media today. if they're spending that much time on tiktok, it's going to come at the expense of other places. it looks like they are coming

from facebook, they could potentially becoming from snapchat as well. facebook does have its own tiktok type product which is reels. it is engaging and they are seeing a lot of growth. the challenge is they are not monetizing that part of the platform. the monetization isn't there yet. that is lagging. >> what's the understanding of when this investment into the metaverse into reality labs will start paying off? >> good question. it's going to be a long-term payoff. it's a significant investment. this is been a major focus. challenges in the ad business, but we are not expecting to see any real revenue from the metaverse for at least two to five years. right now, their genuine some

revenue from oculus and headsets. it's a drop in the bucket from facebook. the same time, they are investing tens of millions of dollars into the metaverse. i don't think that's a revenue contributor for the foreseeable future. shery: we are also expecting results from amazon. where do you think that could go? >> what we have seen broadly around e-commerce, amazon has given should share back. we have seen such tremendous growth since the beginning of covid, it looks like we are starting to see a shift back to off-line. e-commerce in general has slowed. now the question is what does that look like? can e-commerce take a share of total retail question mark that

be given back as people can go back into stores? amazon is at the heart of that. shery: good to have you with us. you can turn to your bloomberg for more on the big tech earnings. coming up next, spider-man's stellar box office performance offsets poor performance for sony's other segments. this is bloomberg. ♪

vonnie: opec-plus has agreed to increase output as planned. the cartel will raise production by 400,000 barrels per day in march despite data showing most members failed to meet output targets. unrest has taken a toll on investors. middle eastern producers are filling supply gaps. president biden says his decision to send more troops to europe is consistent with what he discussed with vladimir putin despite objections from the kremlin. the u.s. is posting to thousand extra soldiers to poland and

germany and what is been called a temporary move. russia called it unjustified and destructive. mitch mcconnell says it's time for the u.s. to accept covid-19 is here to stay. he called for the nation's state of emergency to wind down after nearly two years. he said he wants unallocated pandemic relay funds to be accounted for and questioned the need for additional iris relief spending. melinda gates will reportedly not give the bulk of her wealth to the bill and melinda gates foundation. she made the change official late last year after her force from bill gates. the report says she plans to spread her fortune among various philanthropic endeavors. global news 24 hours a day on air and on bloomberg quicktake.

powered by more than 2700 journalists and analysts in over 120 countries. shery: we will be watching sony when trading kicks off. it cut sales expectations for the playstation 5. this may be tricky start for the market open. how are investors going to take it? what is the bigger news here? >> it depends on how much emphasis you put on the playstation division. a lot of investors see it as the important business line. in that case, it is bad news. it did worse this holiday

quarter than last year. the sony cfo said supply logistics crunch is going to continue through fy22 which is impacting sony in a significant weight. -- in a significant way. shery: the crunch seems to be particularly hard for sony. >> it comes down to the per-unit situation with the playstation 5. sony cut its forecast for sales, but it increased its operating profit for the gaming division because it costs so much to ship the console. that's an issue that nintendo doesn't face with a physically smaller consul. sony is coming up against basic physical limitations. shery: it seems iphones and spider-man rescued the quarter.

what is the outlook for the current year? >> the spider-man movie has been phenomenal. it did $1.3 billion at the box office in the previous quarter. i funds set new records for apple earnings. the supplier for the camera and imaging chips and iphones is sony. for this quarter, sony did say that chinese smartphone manufacturers are ordering high and chips -- hi and chips at a lot higher pace than anticipated. that is going to affect sony's performance. paul: what is the company planning to do to counter soft -- counteract microsoft's acquisition of activision. >> it announced the acquisition of bungee.

the difference in scale shows a comparative resources that might and sony have at hand. microsoft can throw money at making its gain past success. sony being more verse if i'd -- diversified, it can't afford to spend as much money. sony is betting on first party games into services which it has as a strength. also, bungee is a company that is well known as one of the better performers in terms of games as a service. the sony ceo -- said it wants to reach more customers on non-playstation hardware going forward. paul: let's stick with japan earnings.

we saw some different numbers for numeral. >> for the three banks we heard from yesterday, the key takeaway is that mitsubishi was the standout in terms of profit. it was a big number and a lot of it was down to the financial crisis of 2008 when they took the stake in morgan stanley. a lot of that is starting to increase in this quarter. that accounted for 30% of the income that was generated. it was a big driver of the earning profit yesterday. also, the big themes we have been hearing about were pretty clear as well. they were essentially less of the pandemic buffer. less provisions the banks needed to hold in case something goes

wrong. that is less of an emphasis now. also, the stock related gains. it was a different -- decent beat on the earnings number. it has been a pretty strong nine months if you take that time and include this quarter. a good standing going into the meeting full-year target for the year. they surpassed what they expected to make for the year in the first nine months. the caveat being they don't want to increase the forecast yet, because they want to keep enough in the pandemic offer, those provisions against something going wrong further in the year as the pandemic continues to unfold. there is still caution around what they do with pandemic

provisions. shery: how are we expecting their stocks to react? >> there may still be some room, but the point being expectations have run pretty high. one stock is up 45% in the last 12 months. if you think how much can they keep beating the lofty expectations? as you said, people are looking still for undervaluation's and high actuals across the world. banks in particular as we go into the higher interest rate environment throughout the course of 2022 will be looking for the laggards, the underperformers that haven't

done so well in the past 12 months. that may be where you can find some value. shery: that was a bloomberg finance editor with the latest on japanese bank results. you can find more on today's addition of daybreak. on the app you can customize your settings so you only get news on the industries and assets you care about. this is bloomberg. ♪

paul: general motors is optimistic about the supply of chips. it was among the hardest hit by shortages in the fourth quarter. the ceo shared her outlook for shipments with uber. -- bloomberg. >> we have been working closely with the semi conductor manufacturers. last year, we were hit hard with the covid impact in malaysia. that's where we continue to see greater than 25% increase with the aspect of production.

assuming we won't have any dramatic changes from a covid or supply perspective, we feel confident and also what is upsetting is we know there is -- what's exciting is we know there is demand for electric vehicles. >> balance between the chip access and pushing it toward the more high-priced vehicles. now, it's all most the opposite. you get the better access and a volume, but the average price comes down. how do you balance that? >> we had record performance this year and hats off to the gm team with the work they did with the challenges they overcame. next year, not only are going to be selling across -- across more segments, last year we focused on most in demand and capacity constrained vehicles. as we moved to allocation to

chips for other products, it's from a profitability perspective . we are also investing in growth. we are investing for the future. we know there's a huge opportunity from an ev perspective but also across the board from software perspective. we see an opportunity to g the n this industry are huge. ford yesterday another 20 billion at the transition. you said we are going to be increasing spending. is the answer always going to be more when you are asked how much you are going to throw at the story? >> we announced last week in michigan $7 billion to convert a

plant. we will be making another announcement the first half of this year as well as an additional ev truck plant. we are seeing demand for our products. we have the capability and you will see our number grow as we continue to invest in ev capability. >> yesterday, you talk about the dividend. where is it? what do you need to achieve to bring it back into play? parks we have had a capital allocation framework in place for the last several years. with all the opportunities we see in front of us to accelerate on ev's, navies, and the software defined vehicle, we need to make sure we have maximum flexibility and that's

why we are not reinstating the dividend as we currently assess the situation. there are other mechanisms to return value to shareholders. we want to have the flexibility to support our growth. shery: that was the gm ceo. here's a quick check of the latest business flash headlines. an indian billionaire -- sources tell us he has had talks with perspective advisors. india's largest mortgage lender saw profits rise in the last quarter. the net income was up 11% from a year ago beating analyst estimates. the company benefited from robust demand.

we have the market open in tokyo and seoul, korea next. this is bloomberg. ♪

shery: welcome to daybreak asia, i am shery ahn. paul: asia's major markets have just open for trades. shery: we are seeing broad downside for the nikkei and topics which are both losing ground, but this is after the longest winning streak since mid-november. we have seen four sessions of gains for the nikkei which is

lower by tech and industrials. energy is the only sector gaining ground. we are seeing the japanese yen holding steady, the 114 level, after significant strength throughout the week. the boj had another debt purchase operation. take a look at the kospi. they are coming back from that long lunar new year holiday break, so there is a lot of catching up to do. we have the biggest 40 rally in the u.s. since 2020, the rally in japanese stocks, while the kospi is catching up and gaining ground, more than one and a half percent. this is after six straight weeks of losses for korean stocks which have been battered, given this risk off sentiment around the market, before they left for holiday. the korean won holding steady at the 1200 level after it had

fallen to the 18 month low against the u.s. dollar before they left. given we are hearing from the fed and global central banks saying they will be closely monitoring markets and taking steps if needed. paul: we are tracking lower in australia after the first hour of trade, the asx off by just under one half of 1%. materials are preforming well. the financial sectors are weighing on the market. one of the so-called big four, best-performing stocks on the asx after announcing first quarter cash profits of 80% on what we saw in the second half. we take a look at new zealand, new zealand is still in positive territory, better by 1/10 of 1%. we are seeing tourism holdings among the best performers, this after the prime minister announced a phase 3 opening of

new zealand's borders. as we have seen in the past, the virus can bend the best intentioned plan. having a look at the aussie dollar, it has been easing off a little. we are hearing more from the central bank in australia on friday when we get the quarterly statement of monetary policy. that should contain some updated outlooks around growth. let's talk investment strategy with our guest who says she likes equities in europe and japan over the united states. she is the global cio of state street global advisors, joins us from boston. you see growth and inflation both higher this year, but of course rising inflation is stoking rising costs for a lot of companies as well. in terms of a high-growth and high inflation environment, what is the path of least resistance for equities? guest: you have to focus on valuation.

against that backdrop, we are likely to have rising interest rates, we had the fed single they are likely to move in march. that is going to take the sting out of higher growth equities. we have been looking at places like europe and japan where we think valuations are more attractive, sentiment and the complexion and makeup within those sectors is much more geared towards the growth story. paul: you like the valuations of japanese equities. how does the earnings picture look to you in japan, as i say, input costs are rising? lori: they are. one of the things that is interesting is that companies that have been able to manage that cost structure, either by passing along costs to consumers because they have dominant brands, or through managing their bottom line through

technology and other things that enhances productivity, those are companies that are able to drive to the bottom line. we find high-quality companies that are attractively valued, and as i mentioned, there is a bit of a sentiment move there. shery: are you looking at specifically japanese stocks, or are there other regions in asia where you see value as well? lori: we like the region at large, though there are some weak spots. they are favoring japan for australia right now. we like the long-term china story. there are lots of things to be worried about in terms of the short-term. the zero-tolerance around covid and but it means for economic activity. the pullback in china is an attractive entry point.

shery: we have seen this upside when it comes to taiwanese and south korean stocks. lori : we think that will continue, there will be continued demand. that is an area where we are cautiously optimistic. at some point that will play out. paul: you see the fed as the biggest risk in 2022, rather than the covid pandemic. how is the fed managing its communication so far, and i'm curious about defaults on the enormous balance sheet. lori: one of the things that is interesting about the fed's we think that the fed has been quite consistent in saying it is

time to lift off, it's time to shrink the balance sheet. the market continues to be surprised. you had some prognosticators say there might be seven interest rate hikes. we are in the camp that powell will be data driven, maintain flexibility. it's unlikely they are going to have to be as aggressive in tightening as something, in part because we will see weakness in the u.s.. we think the fed is going to raise rates, they're going to do so in a couple of measured increases over the next several months, start to do asset runoffs in the second half of the year. it's unlikely they will be moving nearly as aggressively as

some markets are pricing in. shery: always good talking to you. state street global advisors global chief investment officer. take a look at market movers. sony leading the declines, down 7%. they did post better-than-expected third-quarter profit and raise their forecast for the fiscal year, but they are having issues delivering playstation's so they cut their sales expectations. we had similar movements in the u.s., the adr jump before closing lower. take a look at those banking stocks in japan. it was a little bit of a mixed picture, but muzuho profit dropped. bloomberg intelligence remains optimistic about japanese megabanks.

vonnie: consumer prices rose 5.1% on the year in january fueled by the spike in energy costs. economist predicted a reading of 4.4%. money markets now expect the ecb to lift rates 10 basis points by july rather than by september. the taliban is reopening afghanistan state universities after nearly six months. female students are permitted to return but will have to be veiled from head to to while castle rooms -- classrooms will be segregated by gender. the move comes as the taliban continues to press for international recognition. janet yellen says it is too early to contemplate adjusting capital requirements for banks based on how much risk they face from climate change. she told bloomberg it's important for regulators to evaluate.

some democrats want an aggressive approach to see the transition towards clean energy, many republicans argue that would damage the economy. donald trump is wrapping up his political activity ahead of the midterm elections in november. he announced plans to spark at the conservative the collection conference. trump is increasingly signaling his intent to make another bid for the white house in 2024. it's global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. paul: we discussed the latest data from asia with a chief economist. up next, details on the opec-plus decision to boost output, what that means for oil prices. this is bloomberg. ♪

>> it is all about -- >> russia and opec are playing cautiously. >> to increase 400,000 barrels a day does not mean that oil will go on the market. >> the is coming.

>> that could throw the market into a lot of chaos. >> i think we are set for some time. shery: opec and its allies did what was widely expected, decided to ramp up oil output. the group is struggling to deliver supply pledges and that is where investors are starting to focus. su keenan has more. there is fear of a supply shortfall. su: they have been unable to deliver on the several months of promising a 400,000 barrel a day increase as they did for the month of march. not discussing the fact that there is concern in the market about a shortfall. let's take a look at the key takeaways. it was a brief meeting.

it was virtual and online. it was one that lacked any discussion. they came and route allies -- ratified the decision and left. they had agreed previously that every month they would increase output by 400,000 barrels a day and that is a plan, path iran to restore pre-pandemic levels of output. there was no discussion on behalf quickening the pace of these output hikes. we are seeing an inability to deliver on the output. in january they did not even come close. there was posted deliver 400,000 barrels a day for the month, and it was the equivalent of 50,000 barrels per day. the fact that production woes in libya drew down the exported amount. what we are looking at here is oil on a chair. after this opec decision, you so new york crude briefly pop up

within striking distance of $90, then pulling back. goldman sachs predicted prints would reach above $91, then pullback. the guests said the prices are strong and on a path for higher prices. this is a major concern for the biden administration which is doing all it can to tamp down on higher inflation, higher jet prices, higher gas prices are not helping. paul: what happens next, not just for opec cross -- opec-plus? su: the consensus among all analysts, no surprise, we are almost already there. only about nine dollars away.

you are seeing a lot of analysts catch up with the rapid rise in oil prices. opec meets again in march, and analysts are hoping this time there will be more discussion about ramping up the output hikes about how they are going to compensate for these producers, everyone from nigeria to russia is really struggling. only saudi arabia and the uae have the spare capacity to compensate. will they discuss that is a key question. if we look at the roaring 2022, prices are up in double digits in january, as we head into february strategist are saying $120 as possible, particularly if the geopolitical conflict in russia and ukraine escalates. we have seen fruits or higher again.

and has ramped up demand. back to you. paul: su keenan keep an eye and the oil market. you can get a round up of the story in today's edition of daybreak. bloomberg subscribers go to the terminal. it's also available on mobile. you can customize your settings so you only get news on the industries and assets you care about. this is bloomberg. ♪

paul: let's get a quick check of the latest business flash headlines. sony raised its forecast on the back of its most recent results,

the latest spider-man movie helped boost earnings to $4 billion and beat agnostic expectations. however, the chip shortage is forcing sony to lower its outlook for playstation sales. mitsubishi's latest earnings topped estimates to leave japan's biggest lender's. mufg stake in morgan stanley contributed to about 30% to japanese labor total profit in the last nine months. japan's second biggest lender posted net income of $1.5 billion in the third quarter, profit rose 47%. they maintained a full-year forecast for net income in dividend. shery: take a look at after our movers. we have results, meta-missing on

every metric. the stock plunging 20%. qualcomm did well in terms of sales and profits. spotify bossed double-digit, projecting a slower start to the year. for more on these earnings results, let's bring in ed ludlow. let's start with meta. ed: at spring out this chart. i have been staring at this for the last two hours. u.s. to question. this is facebook. yellow bar at the top, then it is the growth. do you see that on your screen? 0.00. asking the question, is this

peak user growth for facebook? is this it? they are losing springtime in young people to tiktok and youtube. remember, they have their own video products, that may be getting traction, but not enough. paul: the big that is on the metaverse. is that going to pay off? ed: the after hours reaction seems to focus in on this. they disclosed the full loss. there were a lot of questions on the call about the metaverse, monetizing the future. the takeaway seems to be the metaverse is far away and it's very expensive. if you look at reaction notes, they are saying the operating loss can translate to 10 percentage points in margin

pressure for 2022. what kind of threshold do investors have for that? shery: let's turn to qualcomm. a different story. they beat analyst estimates. what what wrong? ed: really bullish second-quarter outlook. remember, the story here is transitioning away from making smartphone ships to other areas. diversifying, automotive. the bar was so high. they came in softer than that. that seems to be the takeaway. we know they are on track. paul: ed ludlow there. amd, an underdog had record revenue that beat estimates. bloomberg spoke with the ceo and started by asking about the

supply chain. >> in the last 12 to 15 months we have seen strengthening and the semiconductor supply chain. we work closely with all of our supply chain partners, whether you are talking about the waiver or front and side, where the back and side, all of the testing equipments. what we have planned for is long-term growth. we had a very ambitious growth outlook for the last few years. we continue to have that. we are working with our partners, investing with our partners, building out that capacity. i think we have been very aggressive. we do see, i know people say there is no end in sight, i would not exactly say that. i would say a lot of progress is being made, and we are thankful for all of the partnership across the supply chain, and we will draw in more and more

supply as we go through every order in 2022. >> the biden administration has been taking an active role in trying to alleviate the crisis. the president had this to say about his view on what is going on. >> everything from cars to dishwashers are delayed getting to show and customers, just as demand is up because the economy is growing. because supply is low, we find ourselves in a position that we are really behind the curve. prices are going up. >> is there anything government is not doing that they should be doing or doing more of you think would help? >> i think the overall government has been very supportive of the semiconductor industry, and if you think about the most important thing, declaring the industry essential.

we are supportive of the legislation. we view it as a public-private partnership. we all have a part to play. ensuring there is a strong ecosystem in the united states. we are happy to play a part in that. we want the u.s. to continue our leadership in design and the new innovations that are necessary. we all worked on the case, we continue to be focused. not just the supply chain in the short-term, but the longer term, that i think there is a good plan in place.

shery: speaking with emily chang. stocks playing catch-up after the lunar new year holiday. more markets are next. this is bloomberg. ♪ as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable nationwide network. with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities.™

paul: a whole heap of breaking news out of australia. building approvals, huge jump, 8.2% increase. a big reversal, big jump on december. 8.2% increase. the trade balance out as well. slight mess, $8.3 billion. imports coming in at 5% as anticipated. big jump in business confidence

for the fourth quarter, that rose by 18 points. just a note on the building approvals number. 8.2% rise in december. aussie dollar holding firm, 71 versus the greenback. shery: it's been about the omicron outbreak out of asia. we are getting the numbers from south korea and japan when it comes to pmi. and south korea, the manufacturing pmi stayed above the contractionary and expansionary territory, 52.8 for january, a slight improvement from the previous month. we are talking about a 16 consecutive month for south

korea manufacturing and pmi to come in positive territory. when it comes to the japanese number, the pmi services number, 47.6. the final january number coming in, 49.9. very close to that 50 number. as we mentioned in december, japan saw its first case of the omicron variant, that is affecting the numbers for the month of january. let's bring in a chief economist to break down the economic impact of omicron. it's great to have you with us. what do you make of these pmi

it's early days. looking other parts of the world, there at the midst or talent -- tail end of losing omicron. asia has yet to see the big blowout. beginning to see new cases coming through, seeing cases rise. perhaps leading to some -- the story for asia is not moving to openness as the rest of the economies have done, but a gradual reopening we have seen from -- it's been a slow and steady push towards reopening. shery: is that while we are not seeing inflation shoot up as much as we saw in the u.s. and

western hemisphere? guest: if the labor market isn't playing ball with, delivering services, leads to bottlenecks. paul: we are seeing energy prices rising sharply. is asia going to be immune to that? guest: asia is a large net

importer of energy. they will not be immune, but at the same time, some bigger economies are also putting curbs in place. china has done a good job. trying to offset the absence of gas for cleaner energy in the meantime. they were certainly not immune. paul: you also mentioned earlier that asian nations have been more cautious when it comes to managing omicron.

is this -- is there more supply chain disruption to come in asia in the next few months? guest: good question, all eyes are on china at the moment. against omicron and even some of the new variants of omicron, i think there are question marks about whether that will be an effective policy and whether china will continue pursuing it to the detriment of its economy. at the moment it appears to be the playbook. it does certainly raise the prospect of further supply bottlenecks. he i don't the we have seen the full story here. shery: traders watching very closely, this policy divergence story. the question of the day is as an

economist, when you are seeing these policies going in opposite direction, the pboc leading to tighten, or the fed versus the pboc, where you see the implication? guest: the fx markets are where we see this coming through. the markets are rewarded -- rewarding countries that moved early. uterine -- you do not want to be behind the curve. you expect the euro some mileage on the downside, the raise of one away coming through, the thing to bear in mind is the

markets are getting quite savvy about not taking central guidance at face value, we have listened to enough central banks to realize that if they do not have a good idea about where their economies are going, what is going to happen with inflation? they are not going to change policy, they will likely claim to be very much part of team transitory. will they be able to keep rates on hold? markets are in doubt and we are as well. paul: the ing chief economist. thank you so much for joining us. the imf agreed to resume a $6 billion loan to bacchus and on wednesday, as the country seeks to end its reliance on debt. bloomberg spoke inclusively to the finance minister about the economic outlook. >> when i took over last year,

we had done a lot of consolidation, then we thought there would be substantial growth. we did whatever we would have to , also, money in agriculture. housing. all of that, we want growth of 5% or so. then move to 6% growth. that is what our objective is.

>> do you think the target is still intact or do you need to revise it lower? >> we would probably be at 5%, at the beginning i thought it was overshooting. divergences have increased. tax collection went out. utilization of electricity went up by 13%. corporate profits are at historic cause. i thought we would be doing more than 5%. last year's growth rate is coming out, around 5.5%.

we could just be a bit lower. i am hoping it will be five, but it could be between 4.5% to 5%. >> 6% is your target for next year? >> definitely. shery: speaking exclusively to bloomberg. coming up, we break down the earnings from japan's mega bank, including a big beat and a prophet miss. -- profit miss. this is bloomberg. ♪

vonnie: opec-plus has agreed to increase output next month as planned, the cartel will raise production by 400,000 barrels in march despite data showing most members showing -- struggling to meet targets. unrest it's taking its toll. middle eastern producers are filling supply gets, pushing prices to a seven-year high. president biden says his decision to send troops to europe is consistent with what he discussed with vladimir putin, despite objections. the u.s. posting 2000 soldiers to poland and germany. russia has called the deployment

unjustified and destructive. connell says it's time for the u.s. to accept covid-19 is here to stay, speaking on the senate floor, mitch mcconnell called for the state of emergency to wind down. he said he wants unallocated pandemic really funds to be accounted for, and questioned the need for additional spending. melinda french gates reportedly will not give the bulk of her wealth to her foundation, according to dow jones who said the 57-year-old billionaire made the change official last year after her divorce. the report says she now plans to spread some of her $11 billion fortune among various endeavors. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: taking a look at markets,

korean stocks with the best day since february of last year. the nikkei is down lower by material stocks, only a few sectors are off, energy is leading those gains given that we saw gains in oil prices. opec-plus agreeing to the modest increase. asx and kiwi stocks under pressure at the moment. we have seen some data out of australia as well as new zealand, and we are awaiting latest commentaries when it comes to monetary policy out of

those countries. paul: let's pivot to japan's megabanks. mufg leading the way, profit topping expectations boosted by's partnership with morgan stanley. for more, let's bring in a finance reporter. strong set of numbers for those big banks. we are seeing shares decline to the market see something there it did not lie? -- like? reporter: these banks of run-up in the lead to the result. i tickets more about figuring out where valuation is heading next. as interest rates rise around the world, that should provide a boost. the global economy is pushing on from the worst of the pandemic. could numbers for most of these banks. led by mitsubishi financial group, and looking at success in

this quarter, we are going back to 2008 when mufg invested $9 billion in morgan stanley during the global financial crisis. that stake has really paid off massive dividends, and the holding contributed to about 30% of the total net profit this quarter. shery: what are we expecting in terms of stock performance given this rotation into value? reporter: as i said, but we are seeing is these banks have run up heart ahead of earnings. it is becoming harder to find financial stocks with a long way to run. a lot of these banks have been unwinding pandemic era provisions, they have already done big by box, we saw one from ubs.

globally, it is becoming harder for investors to find value in banks. shery: coming up next, the winter olympic games are set to begin in china, but with a u.s. led diplomatic boycott, the chinese president guest list will likely be leaders from non-democracies. we have that story. this is bloomberg. ♪

paul: let's get a quick check of the business headlines. meta plunged on a disappointing earnings report. the company said inflation meant supply chain issues are impacting advertising budgets. mark zuckerberg -- >> people have a lot of choices for how they want to spend their time. apps like tiktok are growing very quickly. this is why our focus is so important over the long term. paul: paypal shares plummeted after reporting a slower than expected finish to the year. total payments volume climbed to 23% in the last quarter, the smallest increase in two years. it was attributed to inflation,

global supply chain disruptions and ebay's practice of moving payment away from paypal. india's largest mortgage lender so profits rose on strong dividend income. there was up 11% from a year ago, beating analysts estimates. the company benefited from robust home one demands. an indian billionaire may merge a holding company with a cash-rich unit. sources tell us he has held preliminary talks with advisors about a potential deal. shery: china's president will host 21 world leaders at the winter olympics, which officially open on friday.

let's take a closer look at the guest list. how does this list compared to that of major events? reporter: the summer games are always better attended. if you want to compare two 2008. however, there are several democracies that are absent. denmark, norway, and that is enough to raise some questions about china diplomacy. paul: a number of democratic leaders missing. a large chunk of the guests from authoritarian countries. what can we figure out from that? reporter: it reinforces the idea

that china is doubling down its efforts to regions that are more in line and will benefit more from china's economic gravity. it shows different diplomatic approaches. there has been speculation --

paul: we have a couple of sectors in bright territory. the mineral sector and materials , the nikkei is off by about 1%, despite a pretty healthy set of numbers from japan's big banks. the kospi cash shery: better-than-expected

still continue to be supply issues. adrs jumping up, but closing lower. we are also following japanese banks. net income coming in at ¥288 billion, as opposed to expectations of 206. we are seeing the upside. profits dropping 30%. stocks holding losses, not to mention bad loan costs. coming up, we see morningstar. plus, credit suisse cohead of aipac equity strategy tells us

about his reason for raising china from underway. that is it for day j -- daybreak: asia. standby. this is bloomberg. ♪

as a business owner, your bottom line

is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable nationwide network. with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities.™

david: good morning, it's not :00 -- 9:00 in hong kong. welcome. let's get to the top stories today. the stock rallies faltering after disappointing tech earnings. oil prices ease from seven year highs, after opec-plus