haidi: your watching "daybreak: asia" coming to you live from city and hong kong. shery: the top stories this hour, risk assets are for hiv start on worries about inflation and the upcoming earnings season. covid fears sent to chinese stocks to the worst start since may. twitter's legal battle with elon musk heats up. plus, as sri lanka battles the economic crises, we speak to a member of the presidential advisory group. annabelle: tuesday morning in asia and we are a picture of caution across the board. chicago nikkei futures are pointing lower. as well as the kospi. australia is the standout, treating higher for teachers. lots for traders to consider.

u.s. earnings are around the corner. plus china's growing covid outbreak. all those are headwinds. and the strength in the dollar as well, the dollar index at a 20 year high. let's check what is driving the dollar strength. yes it is about recession fears, traders turning to the currency as a haven. but also the weakness in the euro and the yen, the yen still at the 24 year low against the greenback. the ldp this weekend really consolidating its majority. meanwhile the euro is inching closer to parity, now below the lows we saw last week, and a far cry from where we were in february at the 115 level. meanwhile we are continuing to monitor the weakness in the aussie dollar, below the $.68 level, and also watching the aussie-yen, really is simple or a sign of risk aversion.

shery: yeah, the risk-on sentiment is being felt across markets. u.s. futures are now giving up the earlier gains we saw in the session. the s&p 500 was under pressure today, big tech leading the declines. twitter and apple following today. twitter down 11% as elon musk walked away from the deal to buy the company. and, recession fears the 10-year yield dropping below 3%. that move is being transmitted to oil prices in the asian session, the wti now following towards the $100 a barrel level. it didn't help that the dollar was pretty expensive, we are talking 2020 highs. haidi: let's get more on that from our chief rates correspondent for asia and mliv contributor, garfield reynolds. we are bracing ourselves for more of this dollar rally, particularly if the u.s. inflation print this week comes in strong. garfield: yes, the dollar is in

a vicious cycle for the other major currencies, particularly both the yen and the euro have their own secular reasons why dear going lower. in japan's case, it is because of the uber-dara: policies of the boj. in the euro, they are getting hit harder by recession fears that are stocking and global economies. and there is the war in ukraine, also the fact that the ecb is institutionally probably a little bit more dovish than the fed and less flexible. they haven't even started raising rates yet. you add in another spicy inflation reading, and you will see the dollar claim even further -- the dollar climb even further. even cooler than expected inflation reading may not do too much in the medium-term to help the euro and the yen. if the euro gets a surge back up

in the wake of a cool inflation reading, i don't think the parity bets would be off the table. we could still get it later on. shery: and it doesn't help we continue to get uncertainty in china, whether it is the rise of covid cases, or more regulatory crackdowns. chinese stocks saw the worst day in over one month. garfield: yes, it is this back-and-forth of hope and despair, when it comes to china stocks and investors' relations to that. one of the problems is that the two key -- well, the three key concerns over china is still there, one is covid. covid is accelerating around the globe, not just in china. the difference is that china is combating it in a way that, it

is judged as the best way from the point of view, but from an economic point of view, the way china deals with covid is hard on stocks. then there is the difficult relations with the u.s., which have been on display the last couple of weeks. . there was some hope that biden would move to ease tariffs in order to ease the u.s.'s inflation problem. but it is reemphasizing the tech side of sanctions, the tech concerns, chipmaking concerns, which help to keep the two sides at odds with each other. and finally, the complex issue of common prosperity, and how that interacts. you always have this strong governmental hand likely to come in and do things which are going to sour sentiment rapidly.

shery: especially when you are expecting them to have backed off from that lessee. garfield reynolds, good to have you back. bloomberg chief rates correspondent for asia and mliv contributor. let's talk about twitter shares. they fell after elon musk walked away from his $44 billion deal to purchase the company, setting the scene for a disruptive legal battle. let's get more with bloomberg's ed ludlow. so going into this battle, who has the upper hand right now? ed: this argument is for both sides. what musk has to prove is that whatever action twitter took in recent weeks caused material adverse effect. in other words, musk complained that twitter withheld information about bots on the platform or how they communicated about it. he will have to prove that in an m&a context, that was a big punch to the deal and altered the value of the deal. but it would be a pretty tough task for musk.

at the same time, twitter is under pressure. they cannot afford necessarily the long, protracted legal battle. lawyers to fancy their chances, but ultimately, they say they are sticking to their guns, they want to hold musk to the share offer. of course they would. anyone would bite their hand up for that offer anytime in the last 18 months. so whatever happens, we are not expect me to be straightforward. . this is elon musk we are talking about. [laughter] haidi: what are the expectations when it comes to the court battle? to know what to expect? ed: there are mechanics to it. for example, on friday, the chairman of twitter's board tweeted that they would take musk to delaware court on the deal. but we have not had a court filing yet. we are waiting for twitter's legal team to do that. they wrote a letter to musk's team on sunday which was

disclosed earlier today in a regulatory filing, where they basically say that musk was wrong to try to terminate the deal, such as he did through a regulatory filing on friday. one possible direction that this goes is an out-of-court settlement. the deal has a $1 billion reverse termination fee. $1 billion is a lot of money, maybe not so much to musk, but there is this idea that they will try to work towards a more favorable outcome, whether that is a lower price offer from musk, or another bidder coming in. i think one point is that we are interested to see what comes out of the court case. that's why court cases are fun. people have to give evidence, and evidence can sometimes be interesting. [laughter] shery: yes, the process makes it interesting. elon musk is now arguing that the number of spambots on the platform was higher than twitter initially disclosed.

is that legal grounds for termination? could he be right? ed: it comes back to the material adverse effect argument , you know, in the original merger agreement, because remember the twitter deal is a merger between twitter and private entities owned by musk -- that material adverse effect, it is very codified in the agreement. you go back and read the original, they will have to prove that the action that twitter took, in other words, when musk went to a twitter in recent weeks, which he outlined in his letter on friday, he went on different days and asked for different pieces of information which he says twitter was not forthcoming with. he will have to demonstrate that what was revealed fundamentally changes the outlook for twitter's business, and therefore, the value of the deal. . if he can do that, the judge might rule in his favor. but it is very high-stakes. there have been very few of these cases in an mergers & acquisitions context. . one of the deals that i know about did not go that way. there is not a lot of past

precedent. musk will be saying about on twitter in the meantime. i don't know if you saw his meme from sunday. twitter will have to talk about more of this bots issue during the course of the trial. haidi: bloomberg's ed ludlow. let's get you to su keenan with the first word headlines? su: we start with sri lanka, the opposition parties there trying to form an all-party government after the president and prime minister agreed to resign. gotabaya rajapaksa will step down on wednesday. and parliament will vote on the 20th of july to elect a new president. rajapaksa's whereabouts are unknown, after he escaped when protesters entered his home. china has entered the u.s. a blueprint for their coexistence in the asia-pacific. chinese foreign minister wang yi says he made the proposal during a meeting with his u.s. counterpart, anthony blinken,

over the weekend. it includes rules around upholding current regional cooperation frameworks, and respecting each other's existing interests. the u.s. embassy in beijing has not yet commented on the idea. u.s. commerce secretary gina raimondo says president biden will announce a decision on easing some chinese tariffs very soon. biden said on sunday that his administration is still in discussions over the issue. my mother also says u.s. lawmakers are playing politics with national security by delaying legislation boosting funding for domestic chipmakers. >> if we are going to do this, what can they do on their side of the equation? so while i cannot say for sure, certainly that is possible. if he does not happen immediately, it is something we will continue to pursue, just in the interest of, as you say, fairness. if we are lifting tariffs, what are they going to do? su: taiwan's vice president

visitor took you to pay respects for the former japanese prime minister shinzo abe's death. the vice minister is the most senior taiwanese official to visit japan since 1972. the trip is likely to elicit an angry response from china, which claims taiwan as part of its territory. abe was a largely popular figure in taiwan for his support of the island. 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:. shery: and we will have more on japan. still ahead, what prime minister fumio kishida's election win means for economic policy. whether he will stick with abenomics or forge a new path. haidi: but first a look at market risks and they are plenty.

captrust ceo michael vogelzang joins us. he says he sees a recession coming. we will discuss that in a moment. this is bloomberg. ♪

>> we have an inflation rate in this country, real growth at 2%. nominal gdp growing at 10%. 10-year yield at 3%. it doesn't make sense. it makes everything in the stock market look attractive.

>> what part looks attractive to you? are you in the triple leveraged, all-cash fund? >> i am of the view that equities are the best house in the financial asset neighborhood, but i don't like the neighborhood, for a lot of reasons. i think that ultimately, the price of oil for the fed or maybe the strong dollar, will lead us into a recession. shery: ceo and founder leon cooperman, speaking with bloomberg's tom keene. let's bring in our next guest who expects a recession as soon as this year, but probably a shallow one. with us is michael vogelzang, chief investment officer at captrust. good to have you back. how much does this matter, when we saw very strong job numbers? michael: yeah that is the unusualness of this cycle's discussion around a recession. we have never seen a recession with these kind of job numbers.

as a result, it makes me wonder if it even is something to bother discussing. we are in an economic weak period, we're seeing the industrial side of the economy weakened. yet employment is strong. will the national bureau of economic research, who calls recessions, look at this and say, i don't know, maybe it is, maybe it isn't? we know there is some economic weakness. the market is discounting a lot of economic weakness. we feel that is a pretty interesting place to be. shery: our previous guest from bokeh capital partners was telling us that this is the weirdest economy she has ever experienced. i wonder if we get this weirdness continuing, and you have more haven flows into the strong dollar, if you will see the massive headwinds that morgan stanley is talking about from those big names? michael: yeah, no doubt.

the dollar is indicative of higher oil and a strong u.s. federal reserve. that is what it says to us. it would also begin to limit u.s. growth, which remember, is what the fed wants. the fed needs to slow down aggregate demand in the u.s. and this is the way to do it, by having higher interest rates. the fed's credibility is very high, which is a wonderful thing. a very positive thing for markets. the question is, what is coming next? what is the surprise? the recession has been so anticipated that it is hard to believe that the market has discounted most of it. it is a negative and difficult and deep recession -- we don't think so. the thing could be that we don't hit recession, that we could be a stone skipping over the pond, moving back up again.

that is the question, and i think we will know a lot more about that as we go into earnings season later this week and the next couple of weeks. what management says about future guidance will really be important. haidi: that takes me to my big question, how big the risk of a misstep is when it comes to for guidance. michael: it is what everyone will be listening for and watching. i think the second-quarter numbers will be a bit weaker. the interesting dynamic here is that we really have not seen the bottom-up, that is individual analyst estimates of companies, beginning to fall. it is falling a little bit and stop up a touch, just not as much as you would expect given all of the recession talk. so this push and pull between top-down and bottom-up estimate is really interesting. i don't think anybody really has an answer.

analysts are beginning to panic and slow their numbers down because they don't want to be caught flat footed and have numbers that are too high. but i will tell you, it is not clear to us where this will go. inflation benefits some corporate profits, and we could see reasonable strength here in the second-quarter. haidi: there was a lot of hedging that china would be deceiving grace, given how traditionally uncorrelated their markets are with the rest of the global markets that may be seeing one form of recession or another. do you think there is a pretty big hole in that argument, given that covid zero is all the risks now -- is amplifying all the risks now? michael: we talked about how unusual the circumstance is, it is unusual because we haven't had a global pandemic and resulting responses, both from the federal reserve and from fiscal policy, we have not been here before. china is a good example of that.

china would normally be a nice diversification benefit to the rest of the globe economically. but with the zero covid policy, it creates such uncertainty as to whether or not the logistics will work, whether manufacturing can get it done, what the demand for oil and materials is going to be, that it is really difficult to say. that is part of the uncertainty that investors are feeling. again, there is plenty of risk. 20 of risks. everyone knows what the current risks are. markets have appropriately discounted this risk, and as a result, we are actually optimistic on the market. there is so much pessimism, so much negativity both as a consumer and as an investor, that we feel it is actually a pretty good place to dip your toe back in the water. we are not raging bulls, that we are constructive on the market. we have been moving money back into the equity markets and also extending some of our duration,

sort of a dual hedge against the fed being right. if the federal reserve gets their soft landing pullback, you want some of the economic staff. if we end up in a recession, than you want to own some longer duration treasuries. that is how we are positioning. haidi: great to chat with you as always, michael vogelzang, captrust chief investment officer. you can get a roundup of the stories to get your day going on today's edition of "daybreak." terminal subscribers can get it on dayb , and also on the bloomberg anywhere app. you can tweak the settings so you can tweak the settings so you get the if you wake up thinking about the market and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades.

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shery: this is "daybreak: asia." we are counting down to the start of trade in tokyo. here are the stories were

watching. . i will extend production of its land line to investigate the cause of a recall, but it says it will not affect july production targets. the u.s. is said to engage in japan over a new effort aimed at capping prices for russia oil. plus, houses and businesses may be asked to cut back on the use of natural gas so as not to distract stable supply. haidi: let's get a look at the latest business flash headlines. rivian is said to be planning hundreds of layoffs to trim its workforce in areas where the eb carmaker has grown too quickly. cuts will focus on nonmanufacturing jobs, including teams with duplicate functions, and overall reduction of around 5%. morgan stanley has picked two bankers to lead its dealmaking group in the leadership shakeup. they will be the cohorts of global investment banking.

the shuffle comes at a critical time for the investment banking business, which has seen its fortunes fluctuate amid market volatility and fears of an economic slowdown. broadcom is losing one of its most senior is the software -- one of its most senior executives. he was one of the chief negotiators for broadcom's record-setting $61 billion deal to purchase cloud computing company vm ware. gap shares fell in late trading after the retailer fired its ceo, sonia syngal, over a series of operational challenges. the chairman will take over as interim ceo. gap sees its second-quarter adjusted operating margin percentage at zero to slightly negative. next, japanese prime minister fumio kishida is setting his sights on a capitalism that is fair and greener. will get more on his agenda just ahead. this is bloomberg. ♪

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>> abe's sudden death enhanced

to abenomics. >> everything we are working through with -- is within the framework that he put out on the table. >> his contribution to japan's role in the world is more limited than what commentators cite. >> it is a tragedy for the japanese and american relationship which is a linchpin to our whole approach to asia. >>'s legacy of reform -- we would expect no change. >> this is a perfect time to can -- to conduct structural reform. haidi: some tv guests on the legacy of shinzo abe. a private funeral is expected on tuesday as the nation continues to mourn his death. our tokyo politics reporter joins us now. what are we expecting in terms

of funeral services and any kind of public memorial? >> yes, as you said, the funeral service today we expect to be private. we have not been given any details by the ruling liberal democratic party. we know the current prime minister, kishida will be present. otherwise, friends and family and not so much a public event. what they did have is a wake last night in tokyo i did a buddhist temple and there were hundreds -- in tokyo at a buddhist temple and there were hundreds there. many lining up to pay respects last night. shery: we know one of the greatest legacies left by the former prime minister is abenomics. now that we have a second election victory by the prime minister, kishida, what can we

expect? >> kishida gave his first full press conference following his election victory yesterday afternoon. he spoke a lot about the economy . he is in an unusual position of having a clear period of three years where he does not have to hold a national election which gives him a free hand to pursue capitalism that he has been promising for months since taking office and not tober to supposed to make the economy -- taking office in october to make the economy more fair and greener. he also spoke of the more urgent issues including inflation affecting so many countries across the world. it is less of an issue in japan then perhaps in europe and the u.s., it is still something hurting people with low incomes and japan and he is having a

meeting of his panel on pay and prices to look at what new policies need to be instituted. what was interesting as we don't know how much money he will pour into this issue at the moment and he did emphasize that you first wanted to look at using the reserves he has on hand. ¥5.5 trillion from previous budgets. look at using those before passing an additional budget. shery: thank you, isabel reynolds. we are less than a half an hour away from the opens of major markets including japan. >> we are picking up on the factors that are driving yen weakness. the boj is being given a mandate following the house election. it is also a story of the new differential that we see between the u.s. and japan. the gap between the two year u.s. bond and its japanese equivalent widening to more than

100 basis points since the start of march. the yen has traded in tandem with that so we could see at expanding further following the u.s. inflation print we are expecting this week. it is also the recession fears here also driving investors back to the dollar. speaking of recession fears, let's check in on the changes j.p. morgan is making to its investment strategy. it is now advising investors to cut holdings in corporate debt and reducing their underway position in bonds. they are still upbeat about the second half read in economy -- in commodities and stocks but the revision reflects the view that jp morgan has that corporate debt is yet to price in recession risks that we see already in equities. let's get the first word news with su keenan. su: we start with the atlanta fed president who has repeated his support for another 75 basis point hike at the next meeting.

he says the central bank can raise interest rates to about 3% without sparking a recession. policymakers have pivoted to aggressively lifting interest rates this year as they work to tame the highest inflation in four decades. the australian prime minister meanwhile promising a new era of climate action and innovation. here it -- he will repeat has promised for new legislation including a targeted 43 percent emission cuts by 2030 and that zero by 2050. activists and green party lawmakers say the targets do not go far enough calling for a 60% cut by 2030. the liquidators of bankrupt crypto hedge fund three arrows capital says the founders have not been operating and their whereabouts are unknown. representatives even traveled to the three are rose office in singapore to locate them but found it dormant with mail piling up at the door.

lawyers for them previously said the pair intended to cooperate. new images from the james webb tele coast -- telescope have revealed the highest resolution photos of the distant universe. it is designed to look deep into space and time. the images show a dusting galaxy cluster in vivid detail as it appeared more than 4 billion years ago. uses infrared light to see further than any other tele coast -- telescope. 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: sri lanka's opposition parties are trying to form an all party government after the president and prime minister agreed to resign. she was set to he is set to step

down on wednesday and the parliament will vote on 20 july for a new president. let's return to annabelle for some of the market reactions. >> just taking a look at the moves we saw yesterday. we did see the dollar or the sri lankan ruby climbing as much as 1.5%. we also saw a boost for the equity markets. a strategists saying the resignations are a net positive so jp securities sang we could see hi remitted says -- saying we could see high remittances. the question is how much these resignations will impact the ongoing negotiations with imf. citibank is looking at a one-month delay to the talks but our bloomberg economics team is taking a more bearish look citing the timeline for installing a new government is unclear and so negotiations will

not restart until we have a new finance minister and as well any of the concessions or agreements that have already been made by the previous administration could also be undone. bloomberg economics also says the uncertainty we see from this is also likely to drive the sri lankan bond yield higher which could make it more difficult for them to manage their debt burden and also the high yields could also force a shift in the central bank policy. the focus right now is on inflation but we could return to debt management. taking a look at the risks we have going into the economy. these are unlikely to dissipate. we are seeing food and fuel likely to remain scarce for the rest of the year. inflation hitting around 50% and that could rise to 75% by the end of the garret. the misery index highlighting the spike. as the inflation rate with the unemployment rate a signal at

the social unrest is set to continue even as the parliament pledges to elect a new leader by july 20. haidi: with that backdrop, let's bring an a professor from georgetown university, shantayanan devarajan who also serves as a member of their sri lankan presidential advisory group. some uncertainty. more uncertainty when it comes to the chaos and unclear timeline as to when we get new leadership. we also just went through the laundry list of pressures, inflationary pressures, yields rising further creating more difficulty for funding, delayed imf aid and potentially not a great deal of assistance from the likes of india and china. what are the next steps urgently? dr. devarajan: the optimistic view that was just presented from bloomberg and others.

there is no question that sri lanka's debt problem an economic problem are still there despite the fact that the president and the prime minister are likely to resign. there is also no question that the reason sri lanka has this critical economic crisis is because of decisions taken by the president and his administration over the last two years which is why there is all of this anger aimed at the president. now that the president has gone, we have to continue to work towards a debt restructuring and a program with the imf both of which has been -- have been proceeding relatively well in the last three months since they took the decision to embark on debt restructuring. i would say that despite the call unrest going on in the uncertainty around who will be the new leader and so on, the

negotiations at the technical level will proceed the way they were before. we have a mandate to continue to negotiate and to be honest, the two sides have come very close and there is a lot of agreement on the economic policies to be undertaken as part of the imf program. haidi: but at this point there is no leadership to steer the country through these negotiations with the imf nor to continue the debt restructuring negotiations. that is why you see the default to bonds -- dr. devarajan: let me question that. the leadership in the negotiations is coming from technical appointees. they are negotiating with their counterparts at the imf who are also at the technical level. that is why we are trying to reach a staff level agreement of

the imf program. that is the necessary first step. that can proceed despite the fact that there is no leadership at the top. let me add one more thing which is the point we need to keep in mind. we have been informing and discussing with the entire opposition leadership in sri lanka about the imf program, about the economic reform program and about debt restructuring since january. they are fully informed. from my discussions with them, i have a good sense that they are on board. they approve of what we are trying to do. no matter who is in charge at the end of the day, it is likely they will support the imf program. shery: even at the technical and staff level, we have the likes of barklay saying in order to restructure debt and i have -- and to come to an agreement,

history proves you need at least 1-3 years and in the meantime what happens to their sri lankan people that are running out of cash, food, and fuel? dr. devarajan: i don't think it will take 1-3 years. the historic record shows up to six months. if we can reach a staff level agreement with the fund staff in three weeks, it could take another 3-4 months to get the program approved by the imf board. the critical thing -- that takes us to october of this year. at which point sri lanka will get additional money if it is approved by the imf board including about 800 million from the imf, $1 billion from the world bank. shery: what about bilateral financing will you get from india and china? dr. devarajan: the conversations

with those countries will be at the level of the debt restructuring because there are huge debts that sri lanka owes. and part of this program is to see by how much those debts can be reduced. at the same time, there are discussions and some have been fruitful with india about ridge finance to buy the essential imports sri lanka needs right now like food and fuel and pharmaceuticals. india has already provided about $4 billion in bridge financing and their are discussions for a further $1 billion up to $1.5 billion. there are also discussions with japan about the possibility of bridge financing and possibly with china as well. haidi: professor, you have been quite optimistic and thus conversation. given that you characterized sri lanka as being in danger of becoming a fragile state and some would argue the precipice

has already been reached, it does it have to get worse before it gets better? and how much worse will it get? dr. devarajan: it may not get better for a long time. right now, people are facing huge shortages of fuel, food, pharmaceuticals. long lines and power cutoffs. unless there is new money and fresh money, that is going to continue because you have to buy these things from abroad as imports. these hardships will probably continue. i don't think they will get worse but they could continue at this level or maybe improve a little bit over the next 3-4 months. when the imf program is approved and the debt restructuring is underway, and that would alleviate some of the pressures on foreign exchange as well and then we could see some shorter lines for fuel, fewer hours of

power cuts, fewer shortages of medicines. we are not necessarily going to see them eliminated for a good 6-9 months. shery: professor, always good to have you. coming up next, we look at the metals that make up the batteries powering electric vehicles. this is bloomberg. ♪

haidi: you are looking at live pictures from the sydney energy forum. the director is speaking saying the world is in the first global energy crisis and it -- and it has not seen the worst of the energy crisis yet. this as the forum is cohosted with the australian government and the iaea. we heard from the prime minister promising a new era of climate action and energy innovation. haidi: ev makers in china dropped over concerns regarding valuation. 10 million vehicles on the streets, over a fifth of new registrations running on batteries. our colleagues at bloomberg seeing rapid growth putting

pressure on metals using batteries. let's cut over to our analyst. lithium and nickel the drivers. pardon the pun when it comes to growth in the lithium iron battery. what are the constraints and how long-lasting are they? >> we have been seeing constraints for a while now. we look at two primary segments of supply side in the market for battery metals. while we look at the chemicals refining segment especially for -- being relatively well supplied in terms of the risk-adjusted capacity, based on our latest outlook we are seeing the full impact of underinvestment and utilization in terms of additional supply coming from the upstream resource side that will feed this in order to produce the battery chemicals that we need. we are also seeing that in

nickel sulfate, the primary form of nickel being used in these batteries. there is underutilized capacity that is able to come online relatively easily but on the upstream resource side where your rome materials are basically facing a lot of constraints in the past few years, we are seeing it will take time for these capacities to come online and the crucial balance between when these capacities will come online to when demand will be at its highest or surging, levels will be key for the industry to balance. shery: tell us a little about the demand outlook. >> what we found out in our latest battery metals outlook for the first half of 2022 there has been more of activity in terms of adding capacity especially on lithium and nickel but again, these will take time. but we are seeing a sort of

different response. on the supply side especially for nickel, there has been alternative sources where we see sources that are not considered for battery segments now being able to be converted although that would, an additional cost. the supply-side constraints are making. even more acceptable for producers to do so. while on the other hand, demand-side response will tell you that other automakers would like to limit their risks in terms of supply. what we are seeing here is in cobol, a traditional key metal looked at in terms of being on the supply-side constraints as well, a lot of automakers and battery manufacturers have limited their supply-side risk in terms of kobach and as a result -- cobalt, and as a result of updating their battery chemistries, a lot of the new chemistries have less cobalt in them resulting and a 15% decline compared to previous forecast for cobalt at the end of the

decade for electric vehicles and their batteries. shery: our analyst. let's get you the japan june producer price index numbers just crossing the bloomberg now. for june, it is 9.2%, a faster clip than expected of 8.9% and picking up the pace slightly from may. month on month, that is a gain of 0.7 percent. we did expect to see pressure from reopening from the lockdown in shanghai particularly when it comes to the upside for commodity prices as well. much more to come here on daybreak: asia. this is bloomberg. ♪

haidi: we do have the latest cases for shanghai, reporting 59 local covid cases for july and there is increasing concern for shanghai. the fears of going into an additional lockdown. we have also seen cases in other parts of the country as well. the financial hub is facing more rounds of mass testing if not lockdown. these more infectious subvariants being discovered in china. and becoming a challenge to the sub -- to the zero policy.

aussie oil producers may be on the move. the rise in covid cases in china reigniting fears of possible lockdown dampening crisis. asian crypto stocks may jump after concerns about a worsening bitcoin crash, flash crash, a warning light for tech stocks. also coming up in the next hour of daybreak: asia, we get the outlook on china's automakers. homin lee of lombard oda gives us -- lombard odier gives us his views. this is bloomberg. ♪

shery: this is daybreak: asia and we are counting down to asia's major market opens as we brace for more impact when it comes to surging covid cases and perhaps more regulatory action in china. this was the one weekend of hope for emerging markets. haidi: such a beacon of hope when it comes to crude and energy markets. we see that downside as we get to the side of trading across tokyo and sydney. let's get to hong kong for the latest. >> we are certainly seeing a pivot away from the risk on tone in markets. we are seeing it reflected in treasuries. that starts in a few seconds. we saw a rebound in the previous session. watching the reaction to the data we had from the japan ppi reading. specifically we are keeping an

eye on where the yen trades because we are still around the 24 year low. in other markets, across the region, we are reflecting on korea. we had seen the kospi a little higher in the previous sessions but yesterday a closed a bit lower. we will be watching to see how it starts trading because that is another factor. ed snapped a three day streak. -- it snapped a three day streak. shery: we are saying downside pressure on the nikkei. and the japanese yen week against the u.s. dollar. at the 137 level. we are watching the 10-year gilts and the treasury yields are down in the new york session. the 10-year gilts below the 3% level. look at the open with the kospi down 0.4%. a second session of losses. the korean wan is at the 1310

level. we will be watching for the be ok rate -- bok rate decision as well. we are watching the chinese markets especially given the credit flow jumped more than expected in june to the highest on record. joining us now to discuss is homin lee from lombard odier. i believe you have a top strategy. are you worried we are seeing regulatory action against tech firms not to mention the surge in covid cases as well? homin: well, the regulatory picture remains somewhat uncertain. especially for the tech sector. since last year, this is something that we as investors need to cope with on an ongoing

basis. the reason why we favor asia's space is this is the universe that is a bit freer from debt pressure. it has more sectors that are though strategic focus of the chinese authorities. and it is a universe that stands to benefit directly from the ongoing dovish shift in the macroeconomic policy there. while we deal with the ebb and flow in the public health situation, wiki -- we think in the medium-term that the country as heading gradually towards a reopening process and in addition to the policy -- and in addition the policy support should be favorable to the asian segments. shery: are there any repercussions from the strength of the u.s. dollar to china overall? we have seen a resilience in the

yuan. we know in the rest of asia and emerging markets, a strong dollar is not really great. homin: it is true that a chunk of inflows that have gone into the market since the start of the pandemic period is unmatched and we have already seen some outflows especially in the fixed income segment in the last few months. but what we notice is the active strategy is pointing to the market. you have the passive outflows and active inflows. for the market, what is really important is that it is a surplus economy. in the central bank has enough to defend its currency at an appropriate level and investors

are encouraged by the ongoing shift in macroeconomic policy and rising visibility of the medium term and the reopening process for the country. so we think it will be somewhat better protected compared to the other emerging markets that are far more exposed to the volatile capital flows. haidi: how big is the risk of the strength of the u.s. dollar? homin: in the near term, we have to acknowledge it will remain a key risk factor for the entire market. especially for the risky assets. one thing that we notice now is that the correlation between dollar and equities is becoming quite stark. and the same for the correlation between dollar and bond yields. this is an indication that the trends in currency will

translate. in that sense, not all assets will suffer. if there is further strength. as far as equity markets are concerned especially for the u.s. market which is in the process of being pressured, it is still a key risk factor to watch out for. haidi: our bonds -- are bonds becoming more relevant? which ones do you like? homin: we think fit -- fixed income markets overall had a very difficult start to the year. one of the worst in the past few decades. but now the markets are coping with the recession risk and for the investors it helps to keep things simple. if there is a recession which is our base case scenario now for

the u.s. and europe, bonds benefit. and they serve a good role as an equity hedge in any diversified portfolio. we do think yields have approached more interesting levels. the likely scenario going forward is the -- is that further policy tightening will lead to an inversion of the curve and more stability. there has been some volatility but going forward this asset class will serve as a pretty effective hedge against equities . we are keen to have some allocation to this asset class going forward. shery: you mentioned europe. let me ask you the mliv policy question. what is the risk of a debt crisis in the continent? homin: it is very high for sure. i think it is difficult to predict what will happen to the russian gas supplies to europe

at the end of this maintenance period for nord stream one. we suspect it is possible you simply get back to their previous level just before yesterday which is not the full capacity for europe. it definitely puts the entire continent in the crosshairs of another pretty significant energy shock. and this is the reason why first we see fairly elevated risk of a recession happening in continent towards the end of this year and also that growth will suffer and the currencies will continue to face headwinds, at least in the very near term. haidi: homin lee, asian market strategist at lombard odier. let's look at some of the early movers. you're watching food stocks in asia. >> taking a look at graincorp and new makers in japan. we saw wheat slumping in chicago

in the previous session. concerns about the overall demand outlook for wheat as well as rumors of a new grain corridor that we could get on the black sea as well. let's take a look at how wheat has come online. we are seeing it holding pretty steady. we are also keeping and i on what we see in the metal space. copper around the key psychological 7500 level. concerns around the outlook demand. and we are watching brent crude with the iaea director saying we are in the midst of the first world energy crisis. day two reaction to the report that we had about the fine to alibaba. not properly reporting past transactions. a slump in the tech stocks.

alibaba down around 10% but softbank as well reacting to that report. perhaps a signal of how chinese markets mayfair for the rest of the day. shery: watching the open. take a look at u.s. commerce secretary gina raimondo saying that president biden will announce a decision on easing some china tariffs soon. biden said on sunday his administration is still in discussions on the issue. ramon does said u.s. lawmakers are delaying legislation boosting funding for domestic chipmakers to compete with china. >> if we are going to do this, what can they do on their side of the equation? while i cannot say for sure, certainly that is possible and by the way, if it does not happen immediately, it is something we will continue to pursue in the interest of fairness. if we are lifting tariffs, what

are they going to do? shery: sri lankan opposition parties are trying to form an all party government after the president and prime minister to resign. a parliamentary speaker says the president will step down on wednesday and parliament will vote on july 20, next week to elect a new president. whereabouts of the president are unknown after he is gaped before protesters entered his official home. taiwan's vice president has visited tokyo to pay respects to former japanese prime minister abe. the vice president is the most senior taiwanese official to visit japan since 1972. the trip is likely to elicit an angry response from china which claims taiwan as part of its territory. abe was a largely popular territory in taiwan for his support of the island. the australian prime minister will promise a new era of climate action and energy innovation. in a speech on tuesday to the

sydney energy forum he will repeat as prop cash has promised for new legislation including a target of 43% emission cuts by 2030 and zero by 2050. activists and green party lawmakers say they do not go far enough calling for a 60% cut by 2030. new images from the james webb space telescope cover revealed the highest resolution view of the distant universe ever captured. the $10 billion observatory launched last year and is designed to look deep into space and time. the images show a distant galaxy cluster in vivid detail as it appeared more than 4 billion years ago. it uses infrared light to see further than any previous telescope. and those are your first word headlines. still ahead, china reports growth of 22% in june and auto sales from a year earlier. more on the potential speed

bumps for the sector. u.s. secretary of commerce anticipating the decision on chinese terrace soon and we will have more on that exclusive conversation next. this is bloomberg. ♪

haidi: we are following the currency space with the euro tumbling to parity with the dollar, a level last seen 20 years ago. david joins us now. i feel like we have been speaking about this for a while, the dollar parity. but we finally get there and

what will that mean for the ecb? >> i think we will get there sometime this week. plenty going on. we have u.s. cpi out tomorrow with inflation expectations for the u.s. later this week. that will add to hawkish federal reserve sentiment pushing yields higher. and the big other worry is the nord stream one gas pipeline and what is happening. there is maintenance going on right now. the big concern is when the maintenance is done, is the gas turned on -- turned back on? the german economy relies heavily on edge. and even if it is turned back on, to what degree? it was running at about 47% capacity.

many headwinds and the expectations are that it will hit 30 or fall below parity. when exactly that happens it is hard to say but more than likely sometime this week particularly if the u.s. ppi data comes in stronger than expected tomorrow. haidi: the chances are more likely we will see the virtuous cycle for the greenback continue. >> at the moment, yes. it is tough to find a reason not to buy the greenback you have a hawkish fed. earnings season coming out. if it disappoints, that would be strong for the fed. dollar supportive is certainly in the near-term. haidi: our strategist, david. let's check in on how futures in europe are opening up. this is what we are seeing. we continue to be on parity watch. we did have in the previous

sessions stocks falling on earnings concerns. the selloff in china did not help sentiment. mild positivity flat when it came to the futures session. german docs futures looking pretty muted as well. traders are bracing for a crucial earnings season. there are a number of building concerns including covid curbs in china. weighing on demand as we see cases they're rising again. we have had three consecutive days of gains prior to the last session. and we saw some of the big gainers including automakers, travel and leisure and miners. kansas city fed president esther george is worried that rushing to raise rates could backfire. george dissented last month.

what is that key messaging and plea for caution from george? >> i think it was an interesting reminder about the gravity of what the fed is doing at the moment. we are talking about last month rate hike the biggest since 1994 and it looks like we are on track for another 75 basis point hike this month. these are huge interest rate moves. ms. george said at some point this will hit the consumer. there is already a lot of talk about recession risk in the u.s. she made the point that we should be careful about the pace and it is the signaling that is just as important. she did dissent against the 75 last month. her urging of caution -- there

are those that say the u.s. is headed toward a steep slow down given the pace of hikes the fed is pushing through. shery: and rafael bostic had a different take as to how much the economy can take in terms of rate hikes. >> this is the other end of the spectrum. mr. bostic says he is comfortable with 75 basis point hike. he said the economy can handle it and is pointing towards the strong labor market. the jobs data out on friday was quite strong. unemployment is still at a 50 year low. we are looking at 8.8% this week according to expectations which is skyhigh even if there are indications it has. most fed officials have signaled 75 basis points would be their preference and most have priced in for a 75 basis point hike.

all indications are that the fed seems to be on track for the 75 basis points. mr. bostic says he does not see the case for going more than 75. shery: especially as we continue to see the red-hot inflation numbers. and a current, our chief mobile correspondent -- enda curran. retail investors are sour on twitter after the musk takeover deal falls flat. we look at the next moves from each side. this is bloomberg. ♪

haidi: asian stocks down 0.3%. the declines being led by -- stocks. we are seeing energy though

holding on to some gain. despite the fact that we do have oil prices continuing their declines. wti and brent heading towards $100 a barrel. tech is also a loser in today's session which is surprising given the regulatory action when it comes to the fines coming from china. and in the u.s. trading, we have had tech heavyweights using ground including tesla and twitter. twitter shares falling about 11% in new york after elon musk walked away from his $44 billion deal to buy the company setting the scene for a disruptive legal battle. let's get more from su keenan. what are we expecting? su: the battle could put more pressure on the stock. it lost about 3.2 billion dollars and market value and that plunge alone. to recap some of the details. it was after the close of trading on friday, july 8 that

elon musk after hinting for weeks that he would walk away from the deal actually while the paperwork doing so -- actually filed the paperwork doing so. the chairman of twitter aid clear they want to force him to go through with the deal. now it looks everyone is going to court. twitter hiring a big law firm expected to file suit against elon musk in delaware in the next few days. elon musk claiming that twitter misrepresented the number of spambots on the platform, it is higher than the company disclosed. they say that is not the case. the bots are under 5%. it has been a dramatic turn of events. this is one of the most closely watched merger events in recent history and shares are expected to go well below the $32 close that we saw in the latest

plunge. the offer price 5420 paid by musk many once ago. it is well below that. and predictions are, i could go below that. legal watchers say the $1 billion breakup fee if that is what elon musk is able to get away what would be a huge victory for him but that would be unlikely. haidi: we are seeing the huge loss of confidence especially among retail investors dumping the stock. what are we expecting in terms of the focus on what he says is a misstatement of spam accounts? we have any precedent? su: elon musk is arguing -- it looks like things are in the favor of twitter. they are expected to file a case so we will see what that argues but it is likely they will ask to fast-track the case.

legal watchers say the most likely occurrence will there will be a settlement and there will be a high billion dollar up to a billion dollar breakup fee negotiated and millions paid to lawyers. haidi: bloomberg's su keenan. bill ackman has told investors that it is returning therefore billion dollars after failing to consummate a merger deal. by the unexpected recovery of capital markets during the pandemic. he says that made conventional ipo's a stronger competitor. cap shares fell after it fired its ceo over a series of operational challenges. the chairman will take over immediately as interim ceo. cap -- morgan stanley has picked two

leaders. gross and simon smith have been promoted as co-heads of global investment banking. the shuffle comes as the units fortunes have fluctuated. haidi: coming up next, sri lanka's parliament is set to elect a new president next week. the latest on the terms of the opposition party to cobble together a unity government. this is bloomberg. ♪

haidi: we do have some breaking

data crossing bloomberg when it comes to australia. the consumer confidence index coming in slightly higher than expected. 86.4. that is better than the 83.8 which was what was expected. we continue to watch expectations out of the rba which has gotten the bond markets wondering if the market forecasts are going to be correct given that we are seeing a premium being held for australia's sovereign debt after being caught on the wrong side of the rba's seemingly inability or unwillingness to provide more reliable guidance on inflation and interest rates. we are seeing weakness coming through when it comes to some of the consumer gauges given the concerns over inflation and

concerns over the new surge in covid cases and the pressures on businesses in australia at the moment. let's look at market reaction. >> isolated -- factors not isolated to australia alone. fears. we are seeing a mixed picture for stocks in asia. japan leading the losses. could be some profit taking well because of the big gains on monday in the session. the asx 200 in new zealand trading high. what is lagging in all of these markets are declines in energy and tech stocks. reflecting the moves we saw on the nasdaq overnight. dropping 2.2%. volume wise there looking subdued today. volumes in the u.s. at the lowest this year. changing to what we are seeing

in the bond space. we are seeing yields dropping reflecting news we saw in treasuries overnight. futures holding with the 10 year closing below the psychologically important 3% level. what is happening is investors are souring on risk assets and flocking back to havens like the u.s. dollar. get what we are seeing and currencies. the dollar index at its highest level since 2002. we are a picture of dollar strength across the board. keeping anaya on the commodity linked currencies. the aussie on the kiwi reflecting fears we see with further lockdowns in china and the yen holding at the 24 year low against the greenback. and the euro within a whisker of parity against the dollar. shery: the haven flows continuing. there was hope that china held

the key in terms of em and asian stocks rebounding. asset managers including blackrock and jp morgan facing mounting profitability pressures even as they gain a bigger fall -- bigger footing and china. for more, let's bring in our analyst. how are foreign asset managers doing in china right now? >> there are a lot of hurdles they have to cross in order to be successful in china. number one, a distribution fee they have to pay banks to distribute their products versus others. number two is competition. the gigantic local managers have established a big following and a good track record. number three as the competition for talent. in china, people working in the financial industry do not stick around for a long time so you need to keep paying out.

they are all painting a bit of a mixed picture for the profit prospects of those fund managers. lack rock for example is one of the first -- blackrock for example is one of the first to launch a fully local fund. they are facing a mixture of those challenges. neuberger berman and fidelity are gearing up to join. there will be a lot of hurdles for them to cross before they can have a sustainable business in china. haidi: what about the performance side? and the pollen see --and what about the policy side? >> the performance for some of the foreign funds in china has not been stunning. we are looking at blackrock's new china horizon fund. they lost about 30% in late april since inception and that did lead to a shrink in aum

in march though their losses were trimmed later on. and for the regulators, they do want to quicken the development of the industry. in late april, a slew of incentives was issued for the industry to speed up development including loosening licenses for the insurance companies and banks to hold the fund units themselves and that in turn introduce has more competition for the foreign managers. the challenge really is to establish a local brand and have unique position to compete with other local giants. haidi: that was our analyst. we are watching china hand the u.s. a blueprint for coexistence

in the asia-pacific. though chinese foreign minister it said he made his proposal with his u.s. counterpart over the weekend including roles about upholding current frameworks and respecting each other's existing interests. u.s. embassy in beijing has not commented on the idea. the atlanta fed president has repeated his support for another 75 basis point hike at the next meeting. he says the central bank can raise interest rates to about 3% without sparking a recession. policymakers have pivoted to aggressively lifting interest rates this year as they attempt to hold the hottest inflation rate in decades. the action could bring some of the network to a new standstill for the second time in two months. union says drivers at eight real companies agreed to walk out and members of another union also voted to support strikes and travel was halted in june by a three day rail strike.

those are your first word headlines. shery: the opposition parties and sri lanka are trying to couple together and all party government and pick candidates that can take over after the president and prime minister agreed to step down. i were asia government reporter joins us with more on this. we spoke to a member of the sri lanka presidential advisory group and he said this will not hurt the negotiations ongoing with the imf or a bailout. what our analyst saying -- what are analysts saying? >> it is a situation that has been open and uncertain. the reasons are the following -- while it is true that the stepping down of the president and the prime minister may not in the long run hurt sri lanka

or the discussions with the international monetary fund, the political instability and the violence are not good when negotiating a bailout. fuel is shortage. food is short and medicines are short. political stability would have helped sri lanka in a big way. from that perspective, with the prime minister agreeing to step down and the president literally being thrown out by a popular uprising does not work in the favor of sri lanka at the moment. haidi: does the resignation bring any kind of relief? >> the resignation in a sense brings a kind of closure to the people out in the streets for

months. they have been agitating and wanting the president to step down. people want him to take the blame for the financial mess that is there. but it really does not help sri lankans or help the position that sri lanka is in because there are no easy answers to what sri lanka is going through. one is linked to another. political stability is a must for tourism dollars to come back. tourists will not go back immediately with that kind of violence. but it is also necessary for the president who made it a point of honor to himself to not step down despite repeated pleas from the people. the agitation has been going on for about four months. shery: we have seen the international reaction so far whether it is from the secretary of state, antony blinken or

china's foreign ministry wanting to see stability revitalizing the economy and improving people's livelihoods in sri lanka. however, what about actual economic help? will we see some of those bilateral funding agreements coming out soon? >> there are discussions going on and from what we know, the prime minister, a respected and stable hand and sri lanka known across the world -- what he was looking at was striking a deal with the imf and then using that as a template to go to to other countries especially to places like japan. and use that for lines of credit. shery: our asian government reporting with the latest from sri lanka. coming up, new covid-19 outbreak

in china hurting the automotive sector. the outlook for the industry next with jing yang from fitch ratings. this is bloomberg. ♪

haidi: let's take a look at the state of play when it comes to markets trading for about 40

minutes into the morning session. we see quite a bit of downside when it comes to asian stocks. pressure from the relentlessly high dollar and trepidation going into the earnings season and the looming u.s. cpi print midweek as well as china struggles with covid zero and rising cases. all contributing to the recession fears. take a look at the nikkei two to five. watching the weakness we get across energy given we have concerns over demand and the fears of a renewed locked down in shanghai. as cases continue to rise their particularly from the omicron subvariants. a bit of a bright spot is what we are seeing in sydney where they asx 200 -- where the asx 200 is saying some positive movement. a positive consumer reading in the last hour in financials

leading the way. but the dollar seeing the impact across asia. the biggest jump in about a month towards levels we have not seen since the heart of the market panic during the pandemic. if that tells you anything when it comes to the risk aversion in this market at the moment. let's get back to china and the demand story. the china auto industry group has cut the growth forecast for 2022 down to 3% from the predicted 5.4 percent. that was the number in december. due to a decline in demand for commercial vehicles. with us now is jing yang from fitch ratings. how much of this revised downside is over concerns over demand as we see the country continue to grapple with covid zero? jing yang: the downward revision

was due to a weaker than expected demand for commercial vehicles. it was missing on growth. this implies a sharp recovery and the second half of about 10% growth on the back of support policies. shery: is there a risk of -- a further risk to the downside given there is still uncertainty over how beijing manages these rising covid cases? jing yang: we are monitoring the situation. we think as long as china sticks to its zero covid policy, we need to take into consideration the risk of a frequent disruption to the whole auto market. auto production could be more resilient compared to april and may, during the lockdown as

regulators have prioritized recovery in key sectors and automakers are more experienced with dealing with supply chain disruptions. further lockdowns in major cities could further pressure on an already weak consumer sentiment including their willingness to buy big ticket items like cars. shery: it was surprising to see tesla's china shipments soaring to a record in june. how are foreign manufacturers doing in the country? jing yang: tesla strong data was strong because of the backlog was delivered. in terms of the global automakers' performance in china, i think in the ev market still lacked in terms of the process of electrification. so they need to catch up on

that. this is what the chinese regulators want to because they want to continue to pressure the brands to increase their offerings. as evidence for that there were proposed updates to china's credit requirements. shery: how much concern is there about surging cost pressures especially when you have an ev push that might take more r&d efforts? jing yang: we think the challenge for this year coming from the supply chain issues remain especially from the battery cost perspective. especially from the costs

passed to the consumer. we expect the traditional automakers could absorb more costs to boost this year. shery: coming up next how wechat became china's most beloved mobile app and feared surveillance will as well. we take an in-depth look at the rising super app and its parent tencent. this is bloomberg. ♪

haidi: here's a quick check of the latest headlines. rivian is planning hundreds of layoffs to trim its workforce in areas where the electric vehicle maker has grown too quickly. sources tell bloomberg that cuts will focus on nonmanufacturing jobs including teams with duplicate functions. the company is targeting an overall reduction of 5%. sands china secured a $1 billion loan from its parent also get stands to ease its cash crunch as macau shuts down because to curb its worst covid outbreak.

operators have already sought extra funding to stay afloat. jp morgan says sands china could have only six months to survive in a worst-case scenario. chinese haidlao says a spinoff of international holding would position the unit and its parent for growth. it has not yet applied for the listing but a source says it may come in the next few weeks. haidi: china social media giant wechat has become an integral part of the population's day-to-day life but it is also become a feared surveillance tool. lulu chen is the author of a new book. it is hard to overstate the influence of this one app in china and it is also hard to

overstate just how much censorship and surveillance is going on. what was your biggest discovery when you were writing this book? >> the book is based on the research -- years of research and interviews with hundreds of people who benefited from me having a front seat to china's internet industry in the last decade which has already been dubbed a golden age of china's tech industry. for this book it is not only a look at tencent itself but also the maze of entrepreneurs and also vc players that have dominated this industry. it looks at entrepreneurs including people like didi. one of the most interesting stories and questions i had to answer while writing the book was when i started out the interest was really more of a

celebration of entrepreneurship in china. as i progressed on the journey the narrative changed in one of the more interesting questions became what made china go after its national champions? and also, what it takes to be an entrepreneur in china today. shery: tell us about that main point. why was beijing so worried about wechat? >> there are many things that led up to this but as you said, wechat dominates every aspect of life in china and one of the interesting takeaways or things that were revealed during the reporting was that one of china's top officials, a former public -- a former deputy minister of public security was actually ordering people at wechat to surveil some of his

most powerful countrymen. that was later discovered to have been attributed to a stop at tencent. tencent said the company itself had nothing to do with that and the query that was received had nothing to do with wechat itself. another interesting episode in this whole incident was that we also discovered that tencent had a program using big data to protect the standing polyp girl members -- politboro members. it struck a nerve in beijing. tencent said this was also attributed to the former staff that is now no longer at tencent and had nothing to do with ma. and the project was never completed. shery: those are some of the stocks we will be watching at

the opening. we saw chinese stocks falling sharply in new york as authorities hit tech giants with regulatory fines and covid outbreaks renewing concerns over lockdown sparking investor jitters. haidi: lithium is expanding -- ganfeng lithium is expanding in argentina. and haidilao international. shares underperforming amid a broader property sector slide. also watching longfor reporting contracted sales for june. ♪

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