haidi: a very good morning. we are counting down to asia's major market opens. shery: welcome to "daybreak asia." jamie dimon warns investors to brace for economic turmoil with unprecedented challenges from fed tightening to rusher's invasion of ukraine. >> it is a hurricane. that hurricane is right out there down the road coming our way. shery: the fed beige book also sounds a warning on global growth as doves and hawks stay the course.

haidi: has jamie dimon's comments telling investors to prepare for a hurricane, one of the factors is asian trading. we are watching rising treasury yields, those differentials we are seeing between the treasury and the jgb. we are now back at that 130 level, which is the weakest we have seen for the japanese currency in more than three and a half weeks. that could be a supportive factor for japanese stocks at the open, pointing to -- pointing modestly higher. we did see mining and metals companies fall sharply yesterday after we had the goldman sachs report saying that lithium prices will correct sharply, and we also saw argentina crackdown on export pricing there as well. haidi: we will be seeing asian

markets really trying to avoid the downside from jp morgan's hurricane warning, a sentiment that will be weighing on investors' minds. take a look at what we are seeing when it comes to u.s. futures, extending those losses. we saw the s&p falling for a second day after those comments from the j.p. morgan chase ceo telling investors to prepare for that economic hurricane. that selloff really adding a few dating -- a few data points. of course, the concerns over the beige book. meanwhile, we see energy prices continue to surge. gas prices weighing when it comes to russian crude assets, but there's also concerns the partial sanctions are hitting a bit of a roadblock as well with hungary. shery: another thing to mention,

the federal reserve's balance sheet run-up starts this month. but let's dive right into jamie dimon's comments, warning investors of the potential economic hurricane we could face in the u.s. >> right now, it is kind of sunny. things are doing fine. everyone thinks the fed can handle this. that hurricane is right out there down the road coming our way. we just don't know if it is a minor one or superstorm sandy or andrew or something like that. you've got to brace yourself. shery: let's bring sally who brings bloomberg our beige book coverage. i did not live through superstorm sandy, but i hear it was bad. >> i think it really speaks to

the complexity based on this unusual outcome of circumstances. we have had huge growth after months of stimulus. we have inflation hitting new highs, meaning the fed has to act and try to put out that their with rising rates and some tightening. then of course, we have the war in ukraine. as jamie dimon said today, all war is bad. despite pointing to what you call some bright spots, there is this hurricane down the road, and analysts are unable to predict what the size of that ob. -- what the size of that will be. haidi: what is he doing to try to prepare for those

meteorological disasters? >> he said the bank is bracing itself. he said that we should brace ourselves. he said the best way to prepare for this in the next go around, he talked of the link a fortress on balance sheets. he also did point out that banks are in very good shape. bancshares drop and the shares in broader financial indexes fell. chinese investors are already on edge. shery: out of curiosity, super quickly, we have also heard that the u.s. market could recover later in the year. why are we hearing these two different things from j.p. morgan? >> i think j.p. morgan and other

banks like bank of america, they also do see the u.s. consumer in pretty good health. jamie dimon said today they still have six to nine months of spending power and thanks to stimulus that patted their pockets, they could have 2 trillion of sort of excess money to put to work. bank of america's american retail banking president said something similar. perhaps there is a way to go in terms of consumer health. haidi: china is doubling down on xi jinping's call for more infrastructure spending to counter its economic slowdown, urging policy banks to lend more to projects to boost consumption. for more, let's bring in our chief north asia correspondent, stephen engle, in hong kong.

it feels like we have been here before. stephen: we have. this is the type of economic cycle we see in china, pullback that, fuel debt, pullback debt, fuel debt. their off balance sheet liabilities grow when they are told to produce growth, and then they go through a crackdown and there has been a long crackdown on hidden debt and local government financing vehicles. you have to deliver growth but you also have to control debt and control the virus. visits some say an impossible dilemma, but i think end of the day, their major metric is deliver growth when the government is calling for growth , and that is a challenge right now. we have 29 days left in the month, and the may slowdown continues from the april slowdown biometrics, so you have to create this growth that the

premier is calling to create at all costs in the next 29 days. by all accounts, if you look back at wuhan, they had a more than two-month lockdown in 2020, and that hammered that economy in the central part of china, at the crossroads of key rail lines. it took more than a year for that city to recover. shanghai is going to be in a similar situation. port activity, the world's busiest ports, levels are about a quarter of pre-pandemic levels. there are supply snarls, and there are many businesses in shanghai. they are partying on the bet that the lockdown is essentially over, but businesses -- small businesses are still shut. the consumer is not back in force. go back to the old playbook -- spend, incur debt, build infrastructure. haidi: we will see how that

plays out, especially when you have covid zero happening at the same time. stephen engle joining us from hong kong. now we go to su keenan in new york. su: hong kong bringing back one of its toughest covid zero measures, which these people with even mild infections and their closest contacts being sent to government facilities. since february, most mildly ill patients have been allowed to isolate at home. meanwhile, bloomberg has been told that eu efforts to approve a partial ban on oil imports has hit an obstacle with hungary already rejecting it. our sources say eu ambassadors may meet again on thursday in luxembourg to try to approve a new sanctions package against moscow. meanwhile, the eu's top trade

official says china will exploit russia's need to diversify its energy exports. he says russia is currently selling oil to china at a 35% discount. >> russia is increasing supplies to china, but what we are seeing, especially in this situation of russia's weaknesses , china is going to take good advantage of this, and it will not be a very advantageous deal for russia. su: and the south korean president's conservative party is set for a decisive election and is expected to take at least 10 of the 17 major posts help for governors and mayors. final official results are

expected in the coming hours. global news 24 hours a day on air and on bloomberg quicktake powered by more than 27 hundred journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. shery: still ahead, the fed remains on course to deliver more hikes in its ongoing fight against inflation. up next, investors are divided over asian equities as they way up inflation risks and china is gradually easing covert restrictions. this is bloomberg -- china is gradually easing covid restrictions. this is bloomberg. ♪

>> attitudes are more balanced today. when there's euphoria, when there's optimism, when there's greed, when there's risk tolerance and so with, that's a very difficult climate for the value investor to find bargains, and now the prospective returns on many asset classes are higher than they were just a little while ago and again, a much bigger climate for the bargain hunter. shery: howard marks speaking exclusively on "bloomberg surveillance." we are seeing

negative downside pressure when it comes to markets. the s&p 500 lost ground in today's session. the nasdaq 500 also underperforming. we have concerns about the fed tightening, very strong manufacturing activity numbers, not to mention exceptionally high job openings. does that mean the federal reserve will continue to hike rates at a time when we are also seeing that unwind of the eight point $9 trillion balance sheet? not to mention, meta-also felt. not to mention morgan stanley also. we will see how, really, asian markets react. so far, it seems -- this after we saw a little bit of a rebound when it comes to australian

stocks. nikkei futures not doing much, but we do have the japanese yen trading at around that two-week low given the rise in treasury yields. we continue to see the rise today as well. let's get more analysis and bring in the chairman of doubt and investment who will give us her assessment of what is happening. we saw a little bit of weakness. what sort of investments or changes in your portfolio allocation have you made during this time. >> as you know, it has been difficult to invest in many markets because of very high valuations more recently, and for us, this is a market where we are able to find good companies that are well-run and where management has the same interest as shareholders.

shery: are you a stock picker in japan as well? i mentioned the weakness in the yen. how is that helping stock markets right now? >> the weakness in the yen makes what was a cheap market in some cases ridiculously cheap. we have seen assets become more involved in being able to produce results. you see an increased number of proposals, so clearly, the activists are being somewhat effective. this has even touched what we might call the most unloved part of the japanese market, the regional bank.

authority's have allowed a hostile takeover, and that shows even banks are not safe from this pressure to revalue. haidi: speaking of unloved markets, is it time to reconsider china? >> we are finding china more attractive than it has been, but we have the same reservations we have always had. you are now seeing more and more of the economy being nationalized, which is the problem. it is unclear how well they will do going forward when you have disincentives against people being truly successful. at the same time, you have all

these headwinds in china's space right now, such as the ongoing overhang of the bad debt in the realty sector and you also have issues with inflation that are affecting china. haidi: where are the pockets of opportunity that you think are not getting enough attention? >> we are quite excited about the korean market. we think it is an interesting place to look for stocks right now. bloomberg rates korea number one on its innovation index, but it has something like a nine times piece/e on a forward basis -- nine times piece/e -- nine times p/e. we are finding companies that are extremely well-run that are

very reasonably priced. for us, korea is an attractive hunting ground right now. haidi: always great to have you with us. coming up next, sheryl sandberg stepping down as chief operating officer of meta after 14 years. we assess her legacy as well as the timing -- as well as the challenges facing facebook and meta right now. this is bloomberg. ♪

>> it is a decision i did not come too lightly, but it has been 14 years. it has been 14 years, and i want to make more room to do more philanthropically, to do more with my foundation. i have not been able to do nearly as much as i have wanted

to recently. it is a really important moment for women. you and i have spent a lot of time talking about that over the years. it is an important moment where i think more focus there would be important to me personally. haidi: sheryl sandberg they're speaking exclusively to bloomberg earlier. meta's move after sheryl sandberg's announcement similar to what we have seen at other companies. jack dorsey's resignation from twitter. we do get some mixed reactions certainly are let's get some details on this exit, though. we bring out tech reporter kurt wagner. what will her legacy be? for the last 14 years, she has

kind of been this personality foil to the public to mark bloomberg -- to mark zuckerberg. kurt: she built facebook from this scrappy little start up to one of the most successful businesses in the entire world, and she gets a lot of credit for that and should, but at the same time, you look at where facebook's reputation is right now, all the issues they have had around data collection, data privacy, that falls into the ads business as well, so she is certainly leaving having accomplished an incredible amount for the business, but from facebook's reputation standpoint, there's a lot of things she worked on personally that people still take quite a bit of issue with, so i think we will have to look back in time to see which of those two things stand the test. shery: she has been a

personality, but also she has made fewer public appearances over the last few years. we know some of her role was also passed on. i know she said she also wanted to focus more on philanthropy, but what are you getting, sort of a sense of her exit right now? kurt: as you point out, not only does mark zuckerberg become more visible on things that are not just product-related, but they also brought in nick play on policy. he is comfortable being in front of people talking about policy issues. that is a big part of what we used to hear from sheryl sandberg. she has kind of receded a little bit from the spotlight in recent years. when i spoke to her today, she said she cares a lot about philanthropy and it is something she has not gotten to spend much time on. she is getting married this summer and will be blending her family with her fiance's family,

so there are some things in her personal life coming up that are very big, and i have to imagine after 14 years of being on a treadmill at facebook, she is probably looking forward to having a little bit of time to do those things and not necessarily putting out fires all the time for the company. shery: bloomberg's kurt wagner there with the latest on sheryl sandberg's departure. elon musk has given an ultimatum to tesla employees, saying everyone at the company has to return to the office. the tesla ceo sent and email to executive staff with the subject line, remote work is no longer acceptable. he wrote that anyone who wishes to do remote work must be in the office for aim and a mom of 40 hours a week or leave tesla. -- for a minimum of 40 hours a week or leave tesla.

hp has been trying to reduce its reliance on hardware sales by encouraging customers to pay for additional services with subscriptions. the premium securities exchange has appointed helen loughhouse as ceo. she will be the first female to lead the $16 billion equities operator. she joined the company is the leader of the executive leadership team in 2016. she will start her new role on august 1. haidi: coming up next, the fed remains on course to deliver at least one 75-basis-point hike at the next two meetings. we just got that. next on bloomberg. ♪

>> it is a hurricane. things are doing fine, everyone thinks the fed can handle this. that hurricane is down the road. we just don't know if it's minor or superstorm sandy. you better brace yourself. >> the economy has to slow. the fed has been very clear about their intentions. a scenario of a soft landing is very difficult to achieve in the environment we are in today. >> the labor market is the tightest it's ever been. the fed needs to loosen that up or wage pressure will accumulate and that will keep inflation above 2%.

haidi: business leaders on the outlook for the economy. >> i'm listening to some mixed commentary. it's difficult to parse through, on the one hand you have jamie dimon telling investors to brace for the economic hurricane, compared to what he said in may which was there were storm clouds. he sees a worsening outlook. then you have another from j.p. morgan saying he is more bullish on the outlook for stocks. taking a look at yields and how we are seeing treasuries set up. we are seeing them points higher but yields did rise in the previous session, australia and new zealand. quick check on prude. wti is flipping ahead of the opec meeting later today, we had

signs of the u.s. economy losing momentum. shery: despite all of that data, concerns about momentum being weakened. the federal reserve is ready to keep their feet on the rate hike petal. our global economics and policy editor kathleen hays is here for the latest. kathleen: if we take today as a sample of all 17 members on the fomc, it's across the board. 50 basis point rate hikes. he is saying the fed's credibility on inflation is rest on the precipice of letting expectations get out of control. his argument is simple. if we are aggressive now, maybe

we can start cutting rates by the end of next year. let's listen. >> as we get tangible evidence that inflation is retreating, then we can look at reducing the policy rate in future years, late 2023 or 2024. kathleen: moving on to mary daly, she is known as one of those uber doves. yet again she says we need to do what it takes, tom barkan says, more of the centrist. he doesn't see any signs of recessions in the data. he said it makes perfect sense,

averaging $80 billion a month writing of treasury holdings and security holdings. that is something else they are doing to curb inflation. jim bullard saying that fed is trying to use qt to put upward pressure on rates. mary daly saying the balance sheet trimming down delivers 25 or 50 basis points of tightening. rate hikes are number one, balance sheet tightening is there. they want inflation down and know they have to tighten the screws. haidi: is there a bit of a disconnect? kathleen: signals are mixed. even so, it's a question of district banks to an anecdotal survey of economists who put

together -- one of the main reasons for district out of 12 explicitly talked about a slowdown, moderate or lower, is because of the number one labor shortages. that's not a sign of weakening demand. furthermore, we have economic reports. the manufacturing survey, purchasing managers that goes back to the 1940's, we see the gauge saying it -- staying at 57 in may. u.s. job openings, the jobs report, down from a record but shows there are two job openings for every unemployed person in the country. the fed has to start loosening it up, cool it off and bring down inflation.

we have to keep hiking rates. haidi: kathleen hays. our next guest says he is the recent -- feels like a turning point. what is your strategy given we have so many conflicting messages? guest: it's always a challenging time for investors. for us, the clear sign of what the fed -- [indiscernible] the immediate danger is across

markets. the fed is engaged in raising rates, tightening policy, that's continue to put pressure on the yield curve. generally speaking, yields are heading higher. haidi: regionally, where are you seeing opportunities? rate deal of uncertainty in terms of how the body of emerging markets reacts as we get the fed tightening the balance sheet, shrinkage, maybe 75 basis points on the table. guest: this cycle is more complex because inflation is so high because normally when you get a fed tightening cycle, the

relief valve is emerging markets . that is a more dangerous policy because that has inflation consequences. you're going to have to react to the fed tightening more than they would have previously. they can't rely on the relief valve is much as they have in the past. central banks will be looking to raise rates. some are well ahead of the curve. the bank of korea is well ahead. shery: china seems to be going in the opposite direction. yields are lower compared to their historical range. guest: the tightness of the u.s.

labor market, china has unemployment for the younger age group in the teens. the pboc is very aware and announced a range of measures to stabilize the economy. whether we get more interest rates codes, i don't think so. for us, when you do get chinese government bonds on par with u.s. government bonds, we have shed some bonds at these levels. shery: european markets seem to be going in line with >> happening with the fed tightening. ecb seems pressure to act. is there a way you can take some

advantage of that volatility? guest: there is. that knee-jerk reaction, who would have thought, for us, we do not think growth in europe would be strong enough. we can catch up some of that overpricing of market expectations by adding to our european bond markets in that region of the world. shery: good to have you with us, thank you. taking you to tulsa, oklahoma where we are seeing confirmation of three people killed in a shooting, the shooter has died

is according to the also police. the shooting happened in a medical building on a hospital campus. four casualties have been confirmed including the shooter. it's unclear how the shooter died. america is watching this very closely given the master we had in texas and buffalo. let's get to the first word news. se: the pentagon says new, longer-range missiles the u.s. is providing to ukraine will require three weeks of training to operate. moscow has accused washington of oregon fuel on the fire by supplying weapons that could be used for attacks inside russian territory. washington says ukraine has agreed to not hit targets inside russia. china has ordered banks to set up a $120 billion credit line

for infrastructure projects. the announcement was made at a state council meeting. the government is leaning on construction to help boost its economy. bloomberg estimates china's infrastructure spending last year hit around $3 trillion. the bank of canada has raised its policy interest rates by 50 basis points for a second straight time. it brings the benchmark to 1.5%. a hawkish statement from the governor indicates policymakers are considering a faster pace of tightening. yields jumped on the decision with 2-year note's trading at the highest since 2008. a virginia jury awarded johnny depp more than $10 million in his libel lawsuit against amber heard. jurors agreed heard fabricated claims of abuse during their relationship, but they also

found she was defamed by an attorney, awarding her $2 million. depp says he is humbled by the verdict while heard says she is disappointed for herself and other women. 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 su keenan. this is bloomberg. haidi: coming up next, oaktree capital sees bargain-hunting opportunities in asia. hear more from our exclusive conversation, next. this is bloomberg. ♪

shery: biden administration officials have signaled they will take a tough stance on most companies provide clear evidence . china has ordered banks to set up a $120 billion credit line for infrastructure projects as it leans on construction to stimulate an economy that has been battered by coronavirus. toyota is warning surging battery prices and shortages of metals and materials could

weigh on electric vehicles. manufacturers are running low on some lies -- supplies with trade friction exasperating issues. shery: supply shortages and rising battery costs pushing automakers to high prices, potentially should slowing -- slowing the adoption of electric vehicles. terminal users can read more about those stories. oaktree capital sows market attitudes are more balanced now. to discuss exclusively with lisa abramowicz on bloomberg surveillance. >> attitudes are more balanced,

when there is euphoria, optimism , risk tolerance. that's a difficult climate for the value investor one of the six tenants of our philosophy by believe in thoroughly that we are not market timers. that means two things. we never sell to raise cash to prepare for a decline, we never say it will be cheaper in six months so we will wait.

if it's cheaper we will buy more. that works much better. >> investors are shooting for 8%. we talked about that extensively. this idea that that seems completely unachievable in an era of quantitative easing. high-yield bonds have an average of more than 7%. is this the best you have seen for pensions? >> that's right. many have hit bogeys. it didn't look that rare. so many have surprised on the upside. as you point out, one of our big activities is high-yield bonds. a year ago, they were yielding

in the threes of percent. one deal was done in the twos. as you say, the yield is in the seventh. a pension fund is needed to make use of high-yield bonds. when everybody gets concerned when prices decline. when you flipped out over, the flipside of price deterioration is increases in returns. the prospective returns are higher than they were a little while ago, and it's a much better climate for the bargain hunter. >> people would counter by saying elation takes value out of returns, on a real basis you are not getting much. how do you counter that? at this point it's worth it to get higher returns even if on a real basis it is not necessarily that much more.

>> you're right, we are not talking about an increase in real returns, nominal returns. most pension funds, that is a challenge. nobody knows what inflation is going to do. i think i heard your previous guest say some of the inflation factors will probably subside in the next few months, which means an increase in real returns. haidi: the cochairmen and cofounder of oaktree capital. you can catch up live and catch up at tv . you can dive into any securities on all of the bloomberg functions we talk about, become part of the conversation by sending us instant messages.

this is bloomberg. ♪

haidi: sheryl sandberg is stepping down from met up. she joined the 2008 became one of the most recognizable

figures. she will remain on the board. credit suisse has knocked off with $3 billion loan. the offering is expected to come with a steep discount amid high inflation and rising rates. we hope credit squeeze -- kkr has begun seeking investors. the group is said to have sent out terms. the consortium is trying to buy out randy deal-finance operations. haidi: the bank of korea kicking off a two day international

conference focused on a range of issues including the role of central banks and digital invasion of the economy governor. the conservative party effect to take 10 of the 17 posts in the local election. before results are due in the coming hour we will be watching that because that means the president has more leeway to pursue his policy agenda. the u.s. envoy for north korea is meeting with japanese and south korean counterparts in the wake of several missile launchers. these are some of the stories and stocks we are watching in south korea. japan coming online, watching airlines after the u.s. u.s. falls on tuesday, we are keeping an eye on airlines and south

korea. just going to talk exchange -- the australian stock exchange named the first woman appointed to the role. we will be watching the stock. haidi: coming, the german chamber of commerce in china will be joining us to get a perspective on china's reopening following lockdowns economic impact. we have the market opens next. asian stocks trying to stay afloat given the comments we have heard overnight including jamie dimon talking about the hurricane facing the economy. we will see if that causes downside. the market opens our next. this is bloomberg. ♪

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shery: this is daybreak asia. as we continue to watch the state of the global economy, jp dimon is warning investors to prepare for an economic hurricane, what happens is repercussions. haidi: forces are driving sentiment lower. let's get you straight to the market open. >> mixed signals we are seeing, japan, korea and australia are about to come online. we're looking at the direction for treasuries because where they had today the yield

differential is putting the yen in focus at the 130 level, japan as well as the nikkei, trading to the downside. perhaps a little bit of profit taking, flipping the board that korea. the market was shot for a holiday. we are watching any things out of the be ok governor. the korean won is in focus, that has been strengthening significantly over the greenback, we are still seeing dollar strength play out because we have seen the bloomberg dollar index gaining. looking at australia, a staggered start so it comes to minutes to come into focus, down

the field. we're ceiling -- seeing yields move in the same direction as treasuries. shery: our next guest sees refreshed growth target. let's bring in the aipac equity strategist at goldman sachs. it's good to have you with us at a time where we see estimates continue to rise. at the same time we have more cuts in global estimates. guest: in terms of earnings as you said, earnings are up from around 6% to around nine percentage points. that's because of the energy sector and australia that is feeding into estimates. that is a trend we are seeing across the region.

fundamentally it like things are improving, if you look at the current reporting season, beets have outstripping the misses. fundamental news have been quite supported. shery: if you are making the call because of commodities, we are commodity dependent on imports like south korea and japan. what happens? guest: as you said, we have taken our view on taiwan to underweight. the general preference we have

-- haidi: even as we have the governor announcing the big infrastructure push, this is the old playbook when it comes to -- this chart showing the index that started to lag, the 300 consumer discretionary index after a strong month in the 12 months prior. do we see the opportunities must mark guest: that's right. we published a report on refreshing china, in terms of adrs we like, they are benefiting from the policy stimulus. that would include things like

consumer services on covid, transportation sectors are the ones we favor, but at the same time given the continued focus benefit. these are the four sectors i would say would benefit because of the stimulus. haidi: we talked to analysts and it's clear the binary risk has to do with government regulation. when it comes to tech, is there enough clarity to be able to look at some of these internet names as being good buyers? guest: we need more clarity on that. i would say people are still hesitant to get into the long durations sectors, in the near

term, we will be more attuned to more of the fiscal stimulus beneficiaries until we get more clarity on internet names. that will put pressure on internet names. haidi: i want to get your view on the market. where you see the biggest pain point as we see tightening? guest: as i said, this combination of tightening, rising rates with the growth we are seeing and a stronger dollar is what is causing pain in the market. markets have rallied. you look at may, markets are flat across asia and the region. near term likely to be bumpy,

especially the negative feedback as markets rally put pressure on markets. we continue to be more cautious on long-duration effects, notably on profit, but given the higher commodities, we can downstream sectors and volatile margins are the ones that will be hurt the most. we are pretty underweight in terms of consumer durables and the staples, so we can see more margin earnings. haidi: great to have you with us. the aipac equity strategist at

goldman sachs. su: bloomberg has been told an effort to approve a partial ban of russian oil imports have hit a snag, that has further delayed a push. u.s. ambassador's neck try to greenlight the package against moscow. the pentagon says new longer-range missiles is providing -- >> it is not to imply the ukrainians are not providing

weapons. we have been actively providing security assistance every day since the war started. su: hong kong is bringing back covid restrictions. the rule applies to infections with new omicron subvariants. most mildly ill patients have been allowed to isolate at home. the south korean president's conservative party is set for a decisive election win in the people's power party, they are expected to take 17 posts. that includes the top job in the two biggest cities according to an exit poll. official results are expected in

the coming hours. 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 su keenan. this is bloomberg. haidi: let's take a look at stocks that are moving in the tokyo session. >> one of the sectors where watching, broad-based declines, travel stocks in focus with a caps on visitor arrivals into japan could be raised, we could get a decision in the next few days. our bloomberg intelligence team saying japan is well-positioned to bringing in new visitors. shery: still ahead. the german chamber of commerce in china giving us perspective on the untangling of supply chains amid china's reopening. up next, china is doubling down.

that is just ahead. this is bloomberg. ♪

>> hurricane. that hurricane is right up there. we better brace yourself. shery: the rest are exasperated and now we have quantitative tightening tools. this continues to be job number one. kathleen hays is here with the latest. kathleen: it's interesting.

jamie dimon talking about a hurricane while some are hoping for a softest landing. jim bullard is known as one of the most hawkish people on the federal reserve. he wants interest rates up to 3.5%, others say 2% might be enough. he's raising the possibility of cutting next year. his most worried about the fed's credibility on inflation. this is going to be harmful. let's listen to what he says. >> we could look at reducing the policy rate in future years in

2023 or 2024. kathleen: looking at that board, she is comfortable raising rates until he gets down to 2%. that could take a while. you think there is no recession in the data, not worried about the economy. makes perfect sense to tighten policy. the balance sheet runoff has just started, if you look at this chart.

haidi: the slowdown signals. how worrying other -- are they? kathleen: four of 12, three weeks, they said economies are slowing down but everyone said the biggest challenge is a shortage of workers and supply chain constraints. that's what worrying. in terms of overall, the picture on the economy is the manufacturing gauge stayed strong last month. 57 down from 57 five. that is signaling expansion. job openings came down from a record.

the fed needs to loosen up this tight labor market. that's what they are trying to do. bill dudley, the former president of the new york fed today urging the fed to go ahead and keep raising rates. another writer said do not wish for the fed to stop or slow down. haidi: kathleen hays. looking at china where beijing is doubling down for more infrastructure spending. they are urgent policy banks to lend more to boost consumption. stephen engle is in hong kong. this is tried-and-true. so are the risks. we know what is likely to happen. stephen: there will be debt at the local level. this comes part and parcel with the crackdown.

that is something they can quickly launch when the consumers are probably not coming back in full force. it's the old playbook. go back to infrastructure, ports, railways, roads. fiscal spending to get employment up and get the economy going in these provinces. what the state council is doing is urging or ordering policy

banks like the china development bank to earmark 800 billion yuan , 120 billion u.s. dollars line of credit for infrastructure projects, authorities losing patients at the minutes of a level. they want faster implementation of these policy moods and vocalizations because the economy is slowing and there are only 29 days left in the second quarter. shery: how much is this expected to help consumption? stephen: consumption will take quite some time to come back. there is cautious sentiment among the consumers, especially in places like shanghai and beijing that are just coming out of lockdown. keep in mind, the world's largest port is in shanghai and remains backed up, truck traffic is about one quarter of pre-pandemic levels. if you look at wuhan as an example, two years ago, they

went into more than two months of lockdowns took more than a year for that economy to recover. shanghai might be popping the champagne when the lockdown was lifted and people could be free to move out and about, there are still restrictions, still some shops are closed because covid zero outlook is quite murky. shery: still ahead, after 14 years, sheryl sandberg is stepping down as chief operating officer at meta. we will assess her legacy for working women. this is bloomberg. ♪

>> russia is making emphasis on

increasing supplies to china. what we are seeing, china is going to take advantage. ? haidi: that was the european commission and commissioner for trade on the fallout from russian oil sanctions. let's take a look at europe. we had a downside session previously as we see record high eurozone inflation, that's going to mean the ecb has to act more aggressively. we heard with strengthens the ecb. we are seeing.

shery: we are seeing downside in the asian session, oil is gaining in new york after the biden administration said they hope to engage with saudi arabia. we are getting reports saudi arabia is prepared to increase oil production if russia cuts supplies. wti and brent crude losing ground. meta lost ground, one of the most recognized figures stepping down, sheryl sandberg who has been 14 years in facebook. let's get more in san francisco. it is still early on, but any idea what the legacy for sheryl sandberg to be? guest: it's going to be mixed.

you think about what she accomplished which was built facebook from zero to $120 billion in revenue, that's pretty incredible. what the same time, advertising has been at the center and privacy, data collection. people have seen while she was and has been a star in the tech world, some of the has worn off as facebook's reputation has taken a hit. we need to wait a little bit longer. haidi: what lies in the future for her and the company she leaves? it's a time of unprecedented

challenges for meta and facebook. reporter: at this point, so much of what she was doing has been attributed to other people. she has a lot of deputies who have worked for years and years, so i do not foresee an immediate impact on the business, maybe longer term having her in the room can have an impact. in terms of what she wants to do, she said she wants to focus on philanthropy, women's issues. she is looking forward to building that part of her legacy as well. haidi: that top story. let's get a quick check on the business flash headlines. credit suisse has kicked off a leverage loan selloff to finance a buyout of a software company.

the offering is expected to come at a steep discount. we are told credit suisse will hold a call on thursday. the australian securities exchange has appointed the first female lead at the $16 billion equities market operator. she joined the asx in 2015 as a member of the executive leadership team. we have lots more to come on daybreak asia. this is bloomberg. ♪ xfinity mobile runs on america's most reliable 5g network, but for up to half the price of verizon so you have more money for more stuff. this phone? fewer groceries.

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shery: we are getting pmi numbers from south korea. still in expansionary territory, but a slight easing for indonesia. very close to the dividing line between expansion and contraction. down from 52. it's a nine consecutive months of indonesia remaining in expansionary territory. factories have started to stumble. we had the latest from taiwan falling below the extension line. same for malaysia, philippines. now we have south korea easing although perhaps a bright spot, korean exports have remained strong. let's check on the markets. >> just over 30 minutes into

training, we seeing weakness across the board. in japan, sony is leading declines, down nearly 2.8%. in australia, the governor is speaking at an international conference and is saying next time accommodative policies may not work or emerging markets because it would have different implications. speaking of inflation expectations, checking on treasuries. we are seeing yields move lower, brent crude trading to the downside as is wti. the report out from the financial times saying saudi arabia is ready to pump more oil if russian output declines.

haidi: k2 su keenan. su: we will start with jp morgan. jamie dimon is warning investors to prepare for an economic hurricane. this is the economy struggles against that unprecedented combination of challenges including monetary challenges and the war of ukraine. rising wages and jobs has made clouds in the outlook, but he says the bank is bracing for turbulence. the bank of canada has raised policy interest rates by 50 basis points for a second straight time, the decision brings the benchmark to 1.5%, a hawkish statement from the governor indicates policymakers are considering a faster pace of tightening. yields on bonds jumps on the decision with 2-year note's trading near the highest since

2008. china has ordered state owned banks to set up a $120 billion credit line for infrastructure projects, the announcement was made at a state council meeting chaired by the premier. the government is leaning on construction to help boost its economy which has been battered by covid lockdowns. bloomberg estimates infrastructure spending hit around $3 trillion. 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 su keenan. this is bloomberg. shery: hong kong is reviving one of its toughest covid zero policies forcing people with mild infections into centralized quarantine along with close contacts. for more, let's bring in our managing editor. there was a lot of optimism we

were seeing virus restrictions being lifted in the mainland, but what is happening in hong kong? >> it appears as if we are seeing a reversion to the covid zero cautiousness we saw in hong kong. they still remain committed rhetorically to covid zero, but we definitely think social distancing measures ease, a little bit of tinkering with quarantine and things at the border given the opposition to the border regime there. this appears to be a stake in the other direction. what they are doing is automatically putting into government isolation. anyone who has contracted or is a close contact with somebody, the newer omicron subvariants.

they are saying they're doing this as a precautionary measure. the subvariant which not a lot is known about appears to be more transmissible and provincially provide more immune escape, so the vaccines provide less protection against them is what the initial research is showing. that is underpinning a very cautious reaction from hong kong area. haidi: it feels like beijing has pulled it off, tamed the latest. what is the outlook? reporter: that is the main commonest party mouthpiece saying basically declaring victory against covid with cases under 20 in shanghai and well

under 100 for the country nationwide. it's a huge achievement when you think about how transmissible these new variants are, but the question is, how long they can last. how long can they go without a new outbreak. haidi: we are joined by maximally. can you give us a vacation of what life is like in shanghai? how that return to normal. >> [indiscernible]

it feels like nothing ever happens. there are testing on streets. having regular tests. everything looks normal again. haidi: when it comes to sentiment on confidence, what are you hearing and how much has this shaken confidence in the ability to do business and live life normally? reporter: i believe it will not change much in terms of strategy. [indiscernible]

it's impossible to reinvest [indiscernible] supply chains can be disrupted, going from normal operations to zero. companies will remain in china and we will continue to invest, but when it comes to the diversification of supply chains, we will see investments in other countries. haidi: manufacturers ramping up productions. what will logistical look like? guest: those companies operating for the last week will restart saturday. it will take some weeks to get the supply chain back on track.

all companies will want to send their products to the ports, there will not be enough vessels or capacity. then we will -- [indiscernible] shery: if we see more infections in the next few days, we could see renewed restrictions. guest: different compounds are being locked down. those are very few, but also the will not be any change in zero covid policy. that means we can expect lockdowns all of the time.

piling up more stock, be prepared. we cannot believe as far as policy is in place that we are -- [indiscernible] shery: good to have you without with the pictures of the realities and shanghai. the executive director director of the german chamber of commerce in shanghai. coming up next, oaktree capital sees bargain-hunting opportunities in asia. hear our exclusive conversation, next. this is bloomberg. ♪

shery: take a look at the oil markets, wti continuing its way down. the biden administration saying it hopes to engage with saudi arabia. we're hearing from the financial times that saudi arabia is prepared to increase production if russia cuts supplies. let's bring in our oil markets reporter.

his saudi arabia the determining variable? reporter: it looks like the news did move oil markets. oil prices have slumped as much as 3% following the news. the financial times reported saudi arabia has indicated to western allies it is ready to increase oil production. the european union has agreed to move on with a partial view that the oil market is tight and there are not genuine shortages we see at the moment. the eu agreement to ban oil experts.

looks like it's having an impact just before the opec-plus producer meeting later today. haidi: you talk about the difficulties and logistics of redirecting, is russian crude likely to find homes in india and china? reporter: yes, right now we are seeing record flows of russian oil going into india and china. analysts think close may continue, but this issue is kind of difficult to boost flows even further. i think the eu agreement is definitely going to impact russian oil production in the months to come.

definitely, they are going to be producing less with the lack of finances and european countries shutting russian crude. there is a lot of development. haidi: oaktree capital says markets are more balanced, he sees investor opportunity for bargain hunters. he talked about this exclusively on bloomberg surveillance. >> attitudes are more balanced today. when there is euphoria, optimism, greed, risk tolerance and so forth, that the difficult climate for the value investor to find bargains. we are happier today than we were six months ago. i don't know if we'll be happy

six months from now, but at least the bloom is off the rose. >> at a time of uncertainty, how do you position seeing value but preparing for more value? >> one of the six tenants of our philosophy, i believe thoroughly that we are not market timers. that means mostly two things. we never sell to raise cash to prepare for a decline. we never say it's cheap today but it will be cheaper in six months. if it is cheap today, we will buy it. i think that works much better than an assertion we know where the market will be in six months. >> this is when investors are shooting for that 7.5% to 8%.

this idea that that seems completely unachievable in an era of onto tate of easing. high-yield bonds have an average yield of more than 7%. is this the best period you have seen for pensions and more than a decade? >> i think that is right. many have hit bogies, it just did not look in advance like they would. the stock market has surprised on the upside for the last 10 years. now, one of our big activities is high-yield bonds. a year ago, they were yielding industries, one deal was done in the twos. today, the yield is in the sevens. a pension fund that needs seven or seven and a half can make use of high-yield bonds.

when everybody gets concerned when prices decline, but if you flip that over, the flipside of price deterioration is increases in prospective returns. now the returns are higher than they were just a little while ago, and again, a much better climate for the bargain hunter. >> people would counter this by saying you are not getting very much. how do you counter that by saying it's worth it to get higher returns even if it's not necessarily that much more? >> we are not talking about an increase in real returns, we are talking about an increase in nominal returns. that is a challenge.

nobody knows what inflation is going to do. i think i heard one year your previous guests said some of the inflation factors will probably subside. shery: oaktree capital cofounder and chairman. next, chasing opportunities amid a new era of slow growth in china. more details next. this is bloomberg. ♪

shery: here is a quick check of the headlines. sheryl sandberg is stepping down as chief operating officer of meta. she joined in 2008 and became one of the most recognized figures in global business by helping the startup transform to a social media giant that generated $120 billion in revenue last year. she will remain on the board. elon musk has given an ultimatum to test employee saying everybody at the company has to return to the office. the ceo sent any mail to executive staff with the subject line remote work is no longer acceptable.

he wrote anyone who wishes to do remote work must be in the office for a minimum of 40 hours per week or leave tesla. haidi: half an hour away from the start of trading in china and hong kong. investors hoping for a return to tried and true strategies are facing a stark reality, that a new era of slow growth has begun. let's bring in sophia. the background of slowing growth more generally, there is also political policy risk to contend with as well. how are we starting investors navigating this? reporter: exactly. it's looking at how valuations will be going forward. if you are looking at an economy where sub 5% growth annually is going to become the norm, some say 3%, china will be lucky to achieve that, it's changing the economy and refocusing on areas

where xi jinping sees sustainable growth. aligning with the communist party is key. this is an important theme for the past two years. the era of high-growth double-digit declines we saw for big tech is also over. there is a sense that if you want to be in china, their opportunities, but it's no longer buy anything china and piggyback on the world's second-largest economy. it's not that easy anymore. shery: are we talking about those but specifically are we seeing? reporter: people are still looking at infrastructure as a key part of economic growth going forward. one key thing is consumption,

china had -- that has been a huge problem for policymakers because consumer demand is so we. the consumer story is still a very popular one is people start spending on premium is asian, expensive goods, looking to grow the middle class. the infrastructure side, that is still key. property, not so much. shery: that sector is still struggling. those are some of the stocks we are watching at the open in about a half an hour. of course, the infrastructure stocks in focus.

a $120 billion line of credit for infrastructure projects. we're also watching coal stocks, this is after the finance minister said china will fully utilize its fiscal tools to achieve its goals for carbon emissions peaking and then becoming neutral. haidi: loves to watch when it comes to the end of the structure push from beijing. coming up next, why china's growing stimulus policies are not enough to make an impact on the economy according to helen, the cio and managing director at man from trinity. looking at a new risk on delisting of china tech stocks. that is it for daybreak: asia. market coverage continues. this is bloomberg. ♪

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