>> good morning and welcome to daybreak australia. i'm haidi stroud-watts in sydney. >> from bloomberg's economy gateway latin america in panama city i am shery ahn. >> u.s. stocks pricing their biggest daily drop in almost two years. higher pricings hitting corporate earnings. the dollar and treasury gains a minute pickup in haven beds. consumer and retail hit the hardest as recession fears rise. target is suffering the biggest selloff since 1987. tech is under pressure. this stock is plummeting after hours. >> we are live at bloomberg's new economy gateway latin

america in panama city. day one ended. what conversations we had about the macroeconomic prospect for the region, we are here in panama but we are not seeing vessels queued along the panama canal. we have seen record amounts of cargo showing supply chain disruptions and of the evocations of all of that including inflation concerns continuing to rise and perhaps the central bank tightening really starting to effect the economy. we will discuss all of this was another packs a of major voices ahead including alexander coming me from the bank of international settlements. the howard group and argentina's a secretary of mining. all of these macroeconomic concerns have hit the markets. that was a volatile session in new york. look than wall street toes. we are seeing u.s. futures extending that at times in new york. the s&p 500 down more than 4% for the fourth day in markets since june of 2020.

the plunge in consumer fears also is around 6%. target tumbling after trimming its profit forecast. the nasdaq 100 falling the most, down more than 5%. in the asian trading session we see wti losing .5% below the $110 per barrel level. you can really not have too many hedges in the market. we are talking about the most bearish sentiment in the economy since 1994 safe havens in stocks and cash evocations continue to rise. look at the haven trade. the 10 year yield has fallen below 2.9%. gold is really being bid up. we have the dollar gaining ground for the first time in four days. surprisingly, major g10 peers except the japanese yen.

the japanese yen has tended to fall recently but has actually risen. it is all about the dollar surge up more than 6% already this year, leading some people to say that it looks like the environment from the 1980's. a drop in soaring inflation -- a backdrop of soaring inflation, and aggressive fed and a surging greenback. >> you hit the nail on the head when you said you cannot have too many hedges are too much conviction against any given trade. it's just so uncertain. let's look at the asian markets when it comes to the pass-through from the big drop in sentiment overnight from the u.s.. look at australia's futures. we are just a couple days out from the big vote, the federal election saturday. at this is where we are setting when it comes to futures, markedly lower, 1.8% lower. we are looking at an indicated downside as we get to the start

of trading looking like it potentially. we see about a 2% drop at the start of trading. the aussie dollar all things considered is holding up pretty well given that it tends to be battered in risk off sessions. kiwi stocks are down by 1.4%. we have the delivery of the budget eminently as well. be watching out for that. nico futures flat at the moment. we did have outperformance when it comes to the yen that sherry just mentioned. >> really what we are seeing today, is it too early to call this a retail apocalypse? we saw the major swings when it comes to retailers, right? people are really trying to find somewhere to hide. we are talking of course about the plummet in target, the worst since last monday. back in the 1980's and it just a day after walmart suffered a

similar fate. there is a lot of concern now that inflationary pressures are starting to hit consumers. this will really have bigger repercussions when it comes to the path that chair powell needs to take with monetary policy as well. >> when you look at the retail, we spoke about target at the top. we are seeing pressure we have not seen since the late 80's. is this just a question of growing cost? it is a question of the strength of the u.s. consumer? we look at the big drop in discretionary, consumer, the 52 week highs and how much we have come down. discretionary is really needing there. tech is not faring very well either. 25% of all tech is down by 40%. health care, given the ramp up during the pandemic trade we are seeing that come down a bit. look at that, i think you see the breadth of the set off

across different segments. us get to analysis with big moves across u.s. markets joined by our america stock coverage with su keenan and chief north asian correspondent david ingalls. david we will start with you when it comes to broad market action. this is fairly well spread against -- across different sectors as the charts we saw just showed us. >> that's right. it started with target and walmart result yesterday but this definitely seeped through the entire market today. the main thing is taking a step back to look at it you see that the macroeconomic backdrop that is sort of displayed everywhere in the earnings results coming through is really, really putting a lot to fear in investors at this point. you know, rising prices are hurting targets profit outlook. fuel costs are hurting walmart. all of this is an issue we have

been talking about for months now and we are seeing it in the core of the market, the core of the consumer for the market as well. so it's been really brutal. i talked to a couple traders earlier who said they do not see the bottom yet. they say this is in the middle of a massive selloff at this point. >> how bad was it for other retailers from target to walmart to macy's today? >> a darker day. there is big concern coming out of target. the ceo is saying that the surge in costa shows little signs of ending and this shows us that runaway inflation is really starting to take its toll. a sea of red in the market. a dramatic plunge in target spread to other retailers, even those such as home depot and lowe's that recently beat

earnings and had a decent outlook. target is blaming inflation for its lower operating margins. i should say, it's blaming runaway inflation. as mentioned, it's becoming the second major retailer in two days to trim its profit outlook. the other retailer was walmart. it had its biggest plunge since 1987. when we talk about target you have to recall that is a retailer that in the words of one analyst has done nothing but blowout expectations for the past two years. in one quarter that is all wiped away. in one day you see that sharp drop, now trading at the lowest level since 2020. giving back almost all of its pandemic air against. target fuel cost soared. there were changes in consumer spending that caused a big slowdown in apparel and home good sales and forced the company to markdown access inventory. there is now i a lot of fear that many other retailers will

suffer a similar fate. even though analysts point out a lot of retailers are reporting strong earnings. back to you. >> steve, of course tencent earnings are not really healthy. this hope that we might see a sustained turnaround for chinese tech. >> tencent results are emblematic of multiple shocks happening in china. it longer-term was the regulatory overhang even the tencent did not have direct get a tory action against of them they are invested in so many other countries -- companies, fintech, online gaming, areas that have seen obvious regulatory pressure. that will take some time despite really positive comments lately from senior government officials from the pboc, from the vice premier just earlier this week. despite, of course, the upgrade from jp morgan on the sector.

the results now are bad in the first quarter. this might not even be better in the current second quarter because of the shanghai lockdown. that really hammered commercial payments and martin lau, the president, warned about online advertising in the current quarter that could be way down. obviously, because people are locked down. essentially, this overhang, this regulatory overhang will take some time to work its way into their direct policy. that has been some of the criticism of comments coming from leo hua. they talk in broad brush strokes but what about specifics? what policy action will take place. martin lau says that those for -- that from the most senior level we conceive support but this will take time. obviously, there will be a time lag. essentially this was the lowest revenue growth since they listed in 2004, 0.4% growth in revenue,

net income down 51% that's a pretty bad quarter. that was reflected on adrs overnight as a broad selloff, obviously. >>divya we saw a good run for asian markets, about four sessions of advances. i guess we won't see those gains sustained at this point with all the negative news so far. >> that's right. i think essentially this entire selloff that we saw happen for us today will likely seep into the asian markets. mainly, it had to do with the macroeconomic backdrop that we are seeing. rising inflation is not going away anytime soon. companies are flashing their -- slashing their forecast for the rest of the year and that is really what investors are focused on. will we see the same thing that comes through in asia when more companies report results? you still have alibaba that has to come through as well. so a lot of this will come back

down to the bottom nine of companies and how they are going to fair going forward with this persistent inflation that we are facing at this point. so for today for asian markets unless there is something massive in terms of good news overnight i cannot see it going into the green today. let's -- >>divya balji, sue keenan -- su keenan and david ingalls there. let's look at how asian markets are setting up. david, you will be talking about the chinese markets as you have seen. as a divya was telling us, if we don't have immensely positive views from here on out we might see more selloffs in asian markets. >> the smile is as good of the news is you will get today. i will not be the bearer of good news. i don't have any. price actions suggest we will get a lot of pressure across these markets. i'm just look at new zealand

still bidding out, open pretty much at 23 month lows. the stock index market's down. you are getting pressure. judgment lower in japanese futures, for example. i am looking at that. maybe 1.5%, may be a 2% drop there at the open in tokyo. let's flip the boards. i broad look at how treasuries are trading. you had a massive bull flattening of the curve overnight. it is steady now. let's give it a few minutes to get up and running. the new zealand 10 year yield you can see downton basis points. vix futures, we just closed 31 overnight. we are back above that now in the asia-pacific, 31 65, a four-point move in the last few minutes or so. we have the bloomberg chart. s&p futures. basically closed 18% down from the peak. we are getting more pressure now. a level to watch. i don't think we will get there today unless of course something extremely bad happens.

but we are flirting right now. we are about one or two bad days away from entering a bear market in the u.s. markets. back to you guys. >> let's get to vonnie quinn with the first word headlines. >> the u.s. is conducting the biggest ever investigation into messaging apps for work. the fcc is forcing wall street banks to search through personal mobile phones carried by top traders and dealmakers. they want to see how popular it is for investors to use unauthorized apps like whatsapp to text each other. it is unlikely washington would allow moscow to continue making bond payments on foreign currency debt. janet yellen says investors had enough time to adjust to russia's exclusion from the global financial system. speaking in germany she said the

sanctions onrush are effective. >> the sections -- sanctions imposed against the russian federation have already had enormous impact. russia is experiencing recession, high inflation, acute challenges in their financial system and inability to procure the materials and products they need to support their war or their economy. >> u.s. national security advisor jake sullivan says north korea may be protecting -- preparing another missile test around president biden's visit to the region this weekend including a test while the president is in south korea or japan. i and is expected to discuss security threats, supply chains, and efforts to reduce reliance on china. >> are evidence does reflected the genuine possibility that there will be either a further missile test door -- test including long-range missile tests, or a nuclear test are

frankly both in the days leading into on, or after the president's trip to the region. >> global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and alice in over 120 -- and analysts in over 120 countries. >> president biden just in vote the defense production act to produce baby formula. he also robs governments to bring in overseas aid to alleviate circumstances exacerbated by the supply chain disruptions and pandemic. we had abbott laboratories closing a plant in michigan that has complicated the matter the most. we are continuing to see shortages of maybe formula. -- baby formula. the white house said they would allow to mastic manufacturers to obtain needed ingredients and foreign supplies by invoking the defense production act.

>> coming up, big guests are joining us in panama this hour. we will be speaking to alexander khomeini from the bank of international settlements as well as martin funk our as we dive into latin american investment and more.

you >> we are playing it more

conservatively than aggressively, boast on the fixed

income as well as on the equities. to your point, dialing down areas that are tightened up or areas like that. >> does a different phase that takes different approaches. your best approach is to de-risk portfolios at least back to neutral some degree. >> i think it is more validation that the consumer is not as strong as we thought it was. we are starting to see inflationary pressures really affect the earnings of companies. >> the consumer is getting weaker from the bottom level up, from the lowest income up. it remains to be seen where that stops. >> they are talking about this brutal stock set off. look at how we are potentially setting up for the sessions to come. we are just really seeing asia setting up, of course, for the headwind we had overnight. look at u.s. futures at the moment of trading a little lower when it comes to the s&p there. the nasdaq 100 futures are down by another .2%. the dow is also in the red too.

of course, the west day since june 2020. bonds jumping. worries over earnings, worries over inflation as well as a rate hike trajectory. in particular we saw a really hammered, retail. consumer facing shares as well. we have the nasdaq down about 5% there. watching the dollar and where it goes from here, higher after a three-day drop. all the concerns about growth and potentially recession are driving the haven demand again within the june 10th time period. classic haven plays are coming back to the board. there has been some discussion when it comes to the relentless dollar strength we continue to see, about the possibility of almost 1980 style basel courts. we are looking at the possibility of perhaps doing something about this before we get that strength really playing out in a painful way.

in particular in emerging and asian economies. >> it is perfect you mentioned that because we have the perfect guests to talk about all those issues especially in developing economies with tightening financial conditions, right? with a global economy confronting the prospect of a slowdown and inflation soaring at the same time. we discussed the broader implications with our next guest, alexander khomeini. good to have you on bluebay -- bloomberg tv. let's talk about dollar strength. what does that really mean for the global economy? as haidi mentioned earlier we are talking about something the likes of the 1980 plaza accord because every country is suffering. >> emerging markets to finance themselves in international capital markets. but this time we have seen a very remarkable, relatively

calm, emerging-market environment. in this part of latin america it is very resilient in one sense and captive flow is kind of stable. we have not seen the kind of reaction we have seen previously. there are many factors for that but this is what we see today. >> what are those factors? does it include a central bank in latin america faster to act this time around? lex the only reaction in -- of central banks in latin america the first quarter of 2021 has helped a lot because they are advanced tightening the cycle. also, the communication from the federal reserve is very clear. this is different from previous shocks, even the global financial crisis in 2008. these are very helpful. we have not seen the kind of inflows before now in the last

three years we have seen prior to gfci prior to less money to go out of emerging markets. >> you know this very well because you worked for the central bank of brazil as well. one of those economies that has been tightening very aggressively the cycle but at the same time inflation does not seem to be getting under control. so, are we going to continue to see these double-digit inflation numbers? >> inflation is accumulation of supply shocks. we thought something was coming down. then, you had the invasion of ukraine. so that went out, raw materials. what i think central bank's are doing in this part of the world is to keep long-term and middle term inflation expectations in check. so, that is why they cannot do it right now. this persistent inflation, they have to bring inflation down. it will be a gradual process going forward.

>> this is really eroding trust among the public it seems. in some parts of latin america already. we have seen this in sri lanka as well. they are seeing imminent default at this point. is what is happening in sri lanka carters -- sort of the harbinger of what might happen in emergency -- emerging economies if we don't contain inflation? >> yes, but central bank signed this part of the world are implementing policies not only interest-rate but also exchange-rate interventions to keep the exchange from overshooting. you have macro policies terrain and -- to rein in the growth of domestic credit. so we dip -- we have a degree of interest we did not have any previous crises. there was not much capital so the last three years. so i think relative calm and exchange rates and capital flow

in the region has to do with the strength of the frames and also what they have done so far, as he said. >> at the same time, the trick is really not hampering growth dynamics, right? we have seen brazil start to suffer. they have political issues with the election coming up as well. how do you balance the two? could we see again in latin america another lost decade? >> is the delicate balance terrain and inflation on the one hand. and it's just recovery after what we had with covid. but that's the reality for every central bank. that america in particular has many opportunities. commodity prices are high. you have reassuring of global value chains, near shoring, for ensuring, whatever. so economies in the region are well-positioned. then you have a digitalization. the region is moving forward in this domain. then you have refinancing. i mean, this country are

well-positioned to mobilize large amounts of resources for the transition economy. >> you mentioned earlier how the federal reserve has been better at communicative policy. give us your assessment of how helpful that has been for developing economies. let's ice -- >> it is imported you don't have surprise you go. the fed is doing what it has to do. but you know, financial conditions move ahead of what central banks do, you know? you had, so far, 75 basis point as far as the fed is concerned. but financial policies have tight end. you see 30 year mortgage increased by 200 days. -- basis points. so, is not only rights. its rates, communications, and balance sheet operations, right? >> alexandre tombini, great talking to you and catching up. it was great seeing you at the panel at the new economy format panama city. alexandre tombini chief

representative for the americas for the bank of international settlements. >> let's look ahead of the day for austria new zealand. it's budget day for new zealand. outlooks are into threading has to be the biggest winner. also do is australia's on employment data for april in about three hours. at of course, the lead up to the mate when he first federal election. australian labor leader has vowed to make climate a focus, cutting emissions while also supporting the call sector. gay part sun told investors he plans to wind down melvin capital management. bloomberg reported the once highflying hedge fund pulled clients about his plans to liquidate the funds and return cash to investors. moments after the end of april. tencent says it will take time for beijing to act on promises to prop up the chinese tech sector suggesting the industry

may struggle to grow in the short term. the comments, as of the internet giant reported revenue growth had all but evaporated in the first quarter amid sweeping government restrictions and covid lockdowns. revenue missed estimates at $20 billion. zebra lost its spot on the est version of the s&p 500. the ev makers score on environmental, social, and government standards has been fairly stable but slipped down the ranks due to working conditions. alongside tesla's handling of deaths and injuries. let's get you to for the first word news with vonnie quinn. >> galaxy digital founder broke his silence on the terror usc meltdown calling it a big idea that failed. the backer blamed challenging global macro backdrop and a said -- novaatz warned that cove

a -- that a tough environment for crypto will continue. martin shkreli has been freed from prison performance out of schedule and returned to halfway health -- house. shkreli was sentenced in 2018 after being convicted of security fraud after lying to investors about a biotech company he founded. goldman sachs ceo david solomon says clients are prepared for slowing growth and a drop in asset prices. solomon sees a 30% chance of our session in the next one to two years and says getting rid of inflation should be a top priority just months after his top deputy said the fed is not acting quickly enough to slow inflation. global news 24 hours a day on air and on bloombergquint take powered by more than 2700 journalists and analysts in more than 120 countries. on vonnie quinn.

this is bloomberg. >> our next guest has buildable folly all companies cross latin american sectors including real estate, retail, telecom, and media technologies and is also a leading investor in the major airline of panama. we will discuss the rebound in travel demand with the multinational director. you are in panama city. thank you so much for having us. let's talk a little bit about what you are seeing in the economic recovery post-pandemic. what are you seeing across your business is now? >> we things summing that coming back, some slower, some faster than we ever expected. in general i think people forget we have only had a vaccine about 17 months. recovery needs to take place over time. so, i am quite optimistic that we will continue. we are not out of it yet but we will continue to grow and see

activity. in the airline business we have brought all the employees back. everybody that we had to lay off during the heart of the pandemic is back at work at the end of the year. that was always the hardest part. it's always nice to see people back at work. >> is this also because travel demand has recovered already to be fundamental levels? where are you now? wax slightly below -- >> slightly below prepended make -- pretend event levels. it has certainly been faster than any of us ever expected. if you talked to anyone in the airline business a year ago they would have never said that by the beginning of the first quarter we would be back to the percentages of 2019 that we are at. so, demand has been strong. obviously, fuel now is a competition but if you had high fuel and known to man he would be worse off. so, at least with demand we can survive the next bump.

see how long it lasts. >> with fuel prices at this level how are airlines managing now? are you offset by demand? >> we are not recovering the fuel. but you know right now we have seen such worse times. when you have 100 planes on the ground and nothing is happening. this does not look so bad. [laughter] >> you are in so many different businesses. what about costs rising including labor cost? >> labor costs in some places are going up suddenly. you are seeing low unemployment. in the u.s. you are seeing labor costs going up quicker. in our part of the world it is going up and not as fast. you are still bringing people back in some businesses. obviously, not the whole tourist industry is back yet. hotels have not employed everybody they used to have employed. that is certainly one of the concerns i think we have to have

in the economy that we also learn to operate with less people. so, we have to now think about how we will treat -- retrain some people for other jobs or even accommodate them into other jobs. so, it's not just a simple one little we are back. it is back with some complications. >> right. it's complex now including the market gyrations. just before we came on the air, you were talking about how the markets plummeted today. give us a sense of where we are at now in financial markets. >> look, i am not any expert on financial markets. i think that they have certainly had more variation or more gyros than we are used to. but we are coming out of a pandemic. nobody is quite sure how different businesses will be six months from now, or four months from now. so, i think part of this is the uncertainty. i have a friend that always used

to say to me, i can live with good news and i can live with bad news, but i cannot live with uncertainty. uncertainty is what is doing this to the markets. >> the worst thing for investors. a lot comes from the search in prices we have talked about a lot, inflation, and battles from supply chain disruption. tell us a little more about how you as a businessman who has these airlines but you are not complete the end of vehicle either, right? >> we are a minority partner in a porch so we know something about the shipping industry and something about what is going on in ports. >> what are you seeing on the ground? >> traffic. they are coming. we don't know if the shutdown in china would effective 60 days from now. up until now, there is still cargo out there. and cargo trying to get to their final destinations with what happened in california over getting through the canal. the wait time has gone down. so, we -- that does not

necessarily mean things are getting better yet. you don't really know the details. >> panama, with the panama canal and of course, your huge -- you are a huge businessman in this country. tell us how the country can integrate better into the regional and global economy. >> i think panama has a geographic position that is very important. every time i travel and people ask me about the panama canal i always say the good news about now is that we are not in the news. it runs smoothly 24 hours a day, 365 days a year. the incredible thing i think about is that the canal operated all the way through the pandemic. closed. the ports never closed. the canal never closed. cargo could get to their destination. if you would have thought, what happened to see was with the

boat just blocking it for a week or so, to imagine something on the panama canal, if that didn't operate. blacks quickly, i know you are very involved in social -- >> quickly. i know you are very involved in social responsibility. will the market plummeting delay some of those measures? >> i don't think so because i think that companies understand it is in their best interest to stick to the game. also, it will not solve the problem. you know, if you have a problem nine -- in a company and you have to cut back on your training program, you have any problem. i think most companies will stick to it. in fact, i am encouraging our companies and other companies to increase the training program. i think that we need to invest more in people. because, things are changing and you need people to be up to speed.

i do not think it will stop. the environmental section either. i think we are still at the beginning of that game. so come at the beginning of the game, there is not a lot you can do. you begin to implement it. that's what you do. >> stanley motta thank you for your time today. >> the surge in retail prices is hitting consumers. it could be a rate of hope for the fight against inflation. kathleen hays is here with more. how does a lower profit forecast at consumer stores like walmart, target, potentially help the fed? >> what is driving a first of all is what is so important. what we are hearing from them is consumers are cutting their spending. does walmart -- both walmart and target said they are cutting

spending on digital merchandise -- general merchandise cutting into profits. that is why they slow down their profit outlook for the year. target, the ceo is assaying sales are shifting from big-ticket items like tv's to restaurant gift cards, h. what does that mean? in the pandemic we bought stuff. it's post-pandemic. we have tons of goods at home and now we want to do stuff. goods price inflation has soared over 12% year-over-year. it is back to 9.7 percent year-over-year. still very high. service is nearly 5% year-over-year. that's higher than the 3.5% trend. it is definitely something that if goods prices keep coming back down, this is one of the main reasons we have seen this 40 year level with the big growth in inflation because of this surge in prices.

if people do not want to buy as much stuff, what are the supply chain constraints on about? they are about getting stuff on the ship set out of ports, that kind of thing. that will give more time for it to ease up and we see more pressures coming down. walmart, analysts are saying the earnings are seen as a sign of a good deflation occurring at a shifting of consumer preferences. importantly remember jay powell when he spoke yesterday saying that, i am waiting for clear, convincing signs. i'm looking for evidence that inflation is coming down. this is not a sign that is happening at but it is a signal. it may be in the works. that is why it is a real hope. >> i think what we see this quarter is consumers pushing back saying you cannot raise prices. a classic margin squeeze. it could be a situation where the consumer is saying no more inflation. i'm not paying higher prices. >> good news forearm -- from the

fed, bad news for investors. >> what about growth and that risk? there are a lot of economist and analysts doubtful they can achieve a soft landing. hey recession, as david solomon just said, goes with that too. another thing powell said yesterday is they have to rein in demand. there are imbalances that will be a plus. so he welcomes signs the consumer is spending less. of course they want to see financial conditions tighten. we know that is tougher investors see the value of their portfolios going down, their 401(k)s, the more stocks fall, the more even the expectation of fed tightening along with some of the actual changes are starting to help those financial conditions go where the fed wants them to go. so, it is early days. the fed, again, still hoping

they can avoid the actual recession but, of course, many people say you will not get the inflation rate down until you have a real slowdown in the economy and that's why so many people are voting -- betting on that and that is why we see stock seven off. >> kathleen hays. part of the risk off sentiment we saw. bond yields are falling as well across the sovereign space. we saw treasuries rallying. we are seeing australian sovereign bond yields falling following that as well, the 10 year yield dropping to 3.5 percent. we are seeing a similar move when it comes to the shorter end of the three year. that is very similar to new zealand as well. new zealand is also seeing budget day treasury pushing higher as we see talks -- stocks pushing increasingly south and yields.

we also had for australia tepid wage growth numbers in the mix. let's get morning calls ahead of the age of the asia trading day. goldman sachs ceo david solomon is the latest to sound the alarm on the u.s. recession saying rising costs are a key drag and extremely punitive inflation is a tax on the economy that is especially damaging for the poor. forecasting at least a 30% chance of recession in the next 12 to 24 months. judges are keying in on rising stagflation inflation in the u.s. including energy, health care providers, and retailing. leisure, airlines, and banks are the top underweight candidates. >> next, another guest is joining us from the new economy gateway in panama. where the market

opportunities are among recession concerns and geopolitical risk. this is bloomberg.

what -- >> i was quite uncertain about the bubble a year ago, as i had been about the tech bubble of 2000 or as i had been in japan, or as i had been in the housing bubble of 2007. i used to think then in terms of near certainties. this time i felt it was highly likely but not nearly certain. today, i feel it is just about nearly certain. >> jeremy grantham calling the market selloff back in a conversation with bloomberg in january. our next guest says the very sentiment is overdone, chief strategist at asset management form for howard group. mark, good to have you with us. we have seen the latest survey saying that the fund managers are the most various since 1994. is it too much? >> it depends. it is a recession imminent? that's the big call. i think it's difficult to see given where the u.s. consumer is now. the u.s. consumer powers 70% of

the u.s. economy, the largest in the world. the biggest risks are exhaustion is. china slowdowns. china is entering a technical recession that will give the fed some point -- at some point a reason to back off from peak hawkish nets. >> i want to get there. but when you talk about consumers we saw a retail numbers today with target plummeting, walmart. how big of a risk is that? that these prices are now starting to hit people? let's it's interesting because we have all been waiting for the pivot from goods to services. that was one of the reasons last year to be very bullish. now because of the bearish sentiment it's seen as a negative but i think it's just us wish to services and services are 70% of the u.s. economy. that's a good thing. it's just quality eggs of bearish sentiment. >> when will we get to the fed policy? >> that will require a few things this time around.

it's not just of the level of the market selloff. when i see what is happening in chinese numbers you have to see that there is a disinflationary wave coming our way because of chinese imports collapsing. that will give us cpi numbers that will come off the highs over the next couple months given the fed that's giving the fed the possibility to put in a put. >> how much do chinese numbers matter when you have beijing policymakers saying they will support the economy? lex they have been saying that for a while and it has not happened. in our view china is at a similar point from a private sector then we were in the u.s. in 2007. they are pushing on a string and it is hard to incentivize the private sector in china to borrow given their levels of debt. i think china -- chinese policymakers will have to do a lot more and that's not coming anytime soon. >> you are still technically

bearish on commodities at a time where we are seeing some a different shortages. >> ukraine has a small impact on commodities. russia has still not cut off natural gas to the bulk of europe. they are flirting with it but have not done it yet. they have been very cautious in doing anything on the oil export front. that is the first issue. the war does not impact much commodity prices other than wheat. the other issue is china still imports a ton of commodities. with their imports earning basically negative the chart of commodities in chinese imports is like alligator draws ready to shut. i think that is something we have to think about and that is probably the bottom in bearish sentiment. once oil goes, once commodities fall, once and that is the last brick on the wall i think you will see equity markets also settle. >> latin america is a huge commodity center.

you said latin america should be as promiscuous as it can to play every side. we continue to talk about the region as a battle for influence between the u.s. and china. what do you see? >> absolutely. it is a region for influence and i am so excited for latin america because it is finally back being fought over. and my comment that latin america should be as promiscuous as possible simply means it should see which a suitor is better. latin american economies have something they have not had since the early days of the cold war, geopolitical relevance. >> marko, papic chief strategist at clocktower group. >> we are two days out from australia's federal election. climate change policies are shifting into focus and we discussed that in detail next. this is been good.

>> we are just two days out from australia's election. australia's lack of action on the climate front and heavy reliance on coal has become a central topic in the lead up to saturday. our energy reporter joins us now.

the coalition government here has faced international criticism for a lack of action on global warming. put a new leader make a difference? >> yesterday anthony albanese put lovely saying australia is in the naughty corner when it comes to international climate policy and everything -- everyone i have spoken to look at the issue saying -- says it will go slowly. change will not happen overnight. australia needs to prove it will enforce tangible change rather than just committing to a missions -- and emissions target. the labor plan involves a plan to build it to hope cop 29. the labor government is saying they will include a pacific nation in a bid to boost ties in the region following the recent security pact between the solomon islands and china. so, overnight, maybe not australia -- austria's

reputation may not be salvaged but labor could be good news that it long-term for australia's international climate standing. >> you mentioned cop 29. what is the likelihood australia will actually get to host it? >> that's a good question. it is slightly unlikely but a step in the right direction showing australians do want to host and be engaged in the conversation on our own shores rather than just sidelining climate policy and, in a way, one person i spoke to put it, australia being the coal lobby to the united nations. it is a step in the right direction but we will see how they go with the plan. >> georgina mckay there. we are just two days out from australians heading to the polls,. around 6 million people have already voted in pre-polling. we can look at our australian

design podcast hosted by our own paul allen as well as georgina. the latest is available now wherever you get your favorite podcasts. >> of course we have more coming up in the attic's tower from bloomberg's economy gateway latin america. here in panama city we speak to one of the businesses involved in panama's latest effort to boost a lower carbon aviation fuel supply by building a major bio refinery. plus, an interview with argentina's secretary of minding fernanda --mining fernanda avila as of the global economy transitions to green. that's it for daybreak australia. daybreak: asia is next.

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