>> welcome to "daybreak asia,"

we are counting down to the asian market opens. >> u.s. shares dipped. climbing treasury with concerns about growth. masayoshi son says there are no sacred cows. they reported the biggest ever quarterly loss. and, canberra's transition toward clean energy. >> after we ended the session in new york, the s&p 500 giving up gains of 1%. the russell 2000 under performed given the gloomy outlook from nvidia. the 10 year dropping 2.8%. oil site -- slightly higher, given iranian supplies and nuclear talks continuing. after hours we watch sofi

technologies. softbank could be unloading their 9% stake in the country. that is one we will watch closely at the asian open. >> softbank will be coming online, along with the japan and tokyo. there is not much else in terms of movers today. corporate earnings is the major headline, and nvidia. we are watching chipmakers. a lot of concern around the overall growth outlook. a soft start in asia. not much on the data docket to work with. the dollar we are keeping an eye on. the aussie dollar and the yen in a tight range against the dollar. the bond space, yields moving back across the region. the biggest moves, longer durations.

expectations that fed tightening will lead to slower economic growth. interesting lines from the rba. essentially, all these central banks perhaps developing a digital currency to rival major cryptocurrencies like those of china. the rba exploring the case for an australian central bank digital currency. that exploration will take about a year. >> let's get to the latest on inflation expectations. consumer expectations for price pressures have declined sharply. this could ease concerns of rising prices getting entrenched into household behavior. let's get more from kathleen hays. some of the data was comforting. however, there is the expectation it will continue to

eat into household spending. kathleen: could take a while to erase that expectation. no doubt the fed is keeping an eagle eye on this one. let's look at the numbers. this is one of the fed's number one concerns. we cannot let expectations get out of control. what inflation can we expect over 12 months? six point 8% down to 6.2%. the three year outlook went up to 3.2%. gas prices fell at the pump and are expected to rise 1.5% in the next year, down eight percentage points from what people said in march. revenue increases at less than 10% over the next year. that is the first time we have seen it since march. fewer homebuyers and a lot more sellers.

one year expected spending, 6.9%, down from 9% in may. if you think things cost more, you're not going to buy as much. these themes will be reflected in the inflation report wednesday. the headline cpi is expected to fall 8.7%. core cpi, 6.1% year-over-year from 5.9%. we will wait to see consumer sentiment out on friday. i have to mention, the san francisco fed research out today saying a threat increases one year inflation expectations to wage expectations, they see a direct correlation on short-term expectation rises. not much relief to the fed.

there is still high expectation relative to what it was. it potentially still conserves the fed. >> when it comes to the market, we had cpi numbers out. what matters to investors? garfield: what matters to investors is whether the cpi figures in the coming days provide an endorsement of the strong expectations we have for inflation, that it will come down rapidly and sustainably. two year rate even rate dropped noticeably overnight, well under 3%, to a fresh year low. considering where the fed wants to see inflation, that is the sort of sign.

bonds are hoping the fed will wean its battle against -- will win its battle against inflation. if you do get an upside surprise for cpi, the balance kathleen was talking about, where we could have the headline come down and core comes back up, you need to get a seriously soft cpi rate to justify the positions we have seen in the bond market and stock market. otherwise, the fed will stay aggressive and that will fuel a lot of assets. we have already started positioning for the fed to slow down, even though inflation is still extremely elevated. the most elevated it has been in

40 years. that is a very hard thing for the fed to say to the general public, yes, inflation is incredibly high, but one is down, so we can relax now. that is not the way they are talking, even though that is the way the market ask like they expect them to talk. [laughter] >> we are also seeing interesting repositioning by j.p. morgan's kolanovic. he has been telling his clients all year to buy the dip. now he is saying, maybe buy commodities that have been lagging. does the risk profile remain the same, but shifting towards commodities now? garfield: the difficulty is that when you have strong expectations, you have strong indicators the economy is slowing down.

even if you do not buy the technical recession idea, there are concerns about the ip, outside the amazing job numbers, the economy is under strain. earnings reports overnight highlighted declines. nvidia was poor and other earnings reports when even when the bottom line holds up, that is because while volumes are down, prices are up, because of inflation. you can see those strains on the consumer. equities have had a good run into a situation that is pivotal and potentially dangerous. is this or is this not a bear market trap? you need to be nimble and seek out the areas that look attractive because they have been lagging. something like equities with their recent bouts.

and bonds with their recent gains, they were set up for volatility because people can take profits and get out of those. investors have been coming back in on those expectations they think they have hit the bottom. that could be a dangerous time. >> garfield reynolds and kathleen hays with our top stories. an alert on the bloomberg. we are hearing from former president donald trump his mar-a-lago home is being raided by the fbi. the former president is being investigated by the house january 6 committee, for his involvement in the capital attack. he said it is an attack by the radical left democrats who do not want him to run for president in 2024. the former president has teased plans to run in 2024, and has been a choice for the

conservative political action conference, actually beating out ron desantis. now he has a statement saying his mar-a-lago home is being raided by the fbi. vonnie quinn with the first word headlines. >> u.s. president joe biden says he is confident china will not further escalate tensions with taiwan after military exercises in the region. maintaining pressure days after nancy pelosi's visited the island. air and sea drills have been the most provocative in decades. softbank's ceo must a euro she son with a record $24 billion loss. they lost the majority of that money in a fund which marked down holdings. son said everything will be reduced to cost and they have talks to sell to fortress investment management.

>> we have to control ourselves, even though we sometimes feel the urge to invest in a market that is tanked. we have to make sure we do not lose big. >> hong kong moved to reduce quarantine for inbound travelers. it comes as there is a projection to shrink the economy. cathay pacific urging the government to restrict -- remove restrictions. the hong kong advisory level has been lowered from three -- 23 from four. the u.s. giving billions in aid to ukraine. according to the pentagon the package includes long-range artillery ammunition and medical vehicles. it would bring the total u.s. assistance to ukraine to almost $10 billion. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than

2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still ahead, australia's efforts to fight climate change. the moving away from reliance on mining. coming up, alliancebernstein's brad gibson will talk about his investment strategy and the latest news in the bond market area -- market. this is bloomberg. ♪

>> if our outlook for deflation is correct, cyclical and secular. secular deflation so did -- associated with technique logical -- technological inflation, that is good inflation. if those two are correct, that would be the best environment. >> cathie wood there. our next guest expects inflation to be stickier than the bond market expects. brad gibson joins us from melbourne. good to have you with us. we have seen extreme volatility with the 10 year yield below that 280 level as we head toward u.s. cpi numbers. the chart on the bloomberg

showing easing in headline numbers. what are the markets thinking where inflation is going? what do you think will be the outcome and where the fed goes? brad: good morning. a difficult question to answer. the long end of the yield curve expects inflation to come down rapidly. whereas the short end of the yield curve [indiscernible] that is because the u-curve to invert to levels we have not seen in 40 years or so. the market is expecting inflation to come down rapidly in 2023. we think that is overdone. >> i talked about volatility in the treasury space.

we see it across the board. inflation bond futures are the most volatile in a decade or so. what about investment portfolios of people who want safety in retirement? for people who want regular income? does this really change the investment outlook? what are the risks? brad: high volatility means the amount of return or risk you get from a type of investment goes up. whether you are a retail investor or hedge fund bond manager, you do not have to reduce your position to cope with high volatility. high volatility --

>> where are you finding opportunities outside? do you have any geographical preferences? brad: there is the australian bond market and korean bond market. both have begun aggressively to contain inflation pressures. we have experienced the euro zone and the u.s. we see the bank of thailand tomorrow. the expectation is a 25 point increase there. being underway, there is an opportunity. >> liquidity pressures have not come to the fore in terms of

being a massive risk. are you starting to see that change? brad: if you look at the demands of turnover and volume in the u.s. bond market, there are lows they have not experienced or some time. if we see risk off or volatility, the reaction in bond markets and equity markets will be more intense than previously. even now, i am looking at the daily ratings in u.s. treasuries relative to what is expected. they are higher than what you would expect due to a lower level of liquidity across the board. >> alliancebernstein's brad gibson, thank you for your time. get a roundup of stories you need to know in today's daybreak. terminal subscribers can get it at dayb . o'er the bloomberg anywhere app.

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>> counting down to the start of trade in seoul. in korea, the justice ministry will evaluate candidates for residential pardons and the samsung chairman jay y. lee and shin are likely to be on the list. we are watching softbank backed socar. they failed to attract institutional investors last week. it could be cut by 40% from the top of this market in range. haidi: thanks.

masayoshi son said they could cut costs after putting up a record $23.4 billion loss in the last quarter. let's get more from our reporter in tokyo. the idea is that nothing is sacred. we were expecting it to be bad. reporter: the amount of the huge cost-cutting effort was a surprise, as well as the record loss. the bottom line figure was bigger than what we expected because softbank aggressively marked down both its publicly and privately held assets. along with the highlights yesterday, the cost-cutting efforts, which must seo she son -- which masayoshi son said would include other costs cut. haidi: was it more somber this

time around? masayoshi son tends to highlight the positive when it comes to explaining the results of his company, but it seems he was detailing a lot of problems. what are investors saying? reporter: it was a somber results briefing. the initial response is not positive. analysts say they were full of negative surprises. based on what masayoshi son said yesterday, there is little sign of a turnaround or drop in valuation for softbank are likely to continue longer, which are not a good sign. softbank said it will be more careful in new investment while the company is in the process of trying to selloff some of its assets and clean off its balance sheet. currently the view is that these efforts will probably not be good enough. we will have to see, going

forward. haidi: the expectations will not be good enough. what is the broader outlook for softbank? reporter: the thing is, it has become much clearer the stock market is crucial for a recovery in softbank earnings, and we will really have to see if there are any details of the cost-cutting effort that softbank unannounced, this will be very closely watched, because there were not many details yesterday. we have to see the asset sales, which will include fortress, and all these cost-cutting efforts, work its magic in helping the company's earnings recover. we will see. >> here is a quick check of the latest business flash headlines. galaxy digital second-quarter loss more than doubled to around

half $1 billion. the poor performance was mainly due to unrealized optimism. however, they did report a position of $1.5 billion. they see bitcoin trading in that range for a while. >> we will get through 30,000 on this move up. we will see. i am doubtful. i think we will be in this range now. 20,000 or 30,000 range for a while. >> heightens government scrutiny. the company spent just $33 million in acquisitions in 2021 and $169 million in the first nine months this year, compared to $1.5 billion in 2020.

tim cook's said apple had acquired many companies. nvidia missed projections by more than $1 billion, reinforcing claims that demand for electronic components is drying up. fiscal revenue was $6.7 billion down from the projection of $8.1 billion. nvidia had its worst a in months. coming up, china sends military exercises near taiwan, keeping up pressure on the island following speaker

vonnie: these are your first word headlines. donald trump said this evening

his mar-a-lago home was currently under siege, rated by a number of fbi agent. the former president he cooperated with relevant agencies and that the rate was not appropriate. the u.s. and iran have weeks to decide whether they want to revive their nuclear deal. negotiators wrapped up 15 months of talks in vienna with a draft. it would see reduced stockpiles of uranium in return for economic concessions. south korea's education minister has offered to resign after backlash over a plan to reduce the school entry age to five years old. she is one of five member -- female members of the cabinet. the resignation is likely to be accepted.

india is bending firms from exporting carbon credits until it meets climate goals. the government is seeking to create a domestic carbon market in advance of energy transition goals. they say new roles will great -- will transform the country into a net energy exporter. singer-songwriter and actress olivia newton john has died after a 33 -- after a 30 year data with breast cancer. she is best remembered for her role as sandy in the movie "grease." global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: china is signaling it will keep up pressure on taiwan

following u.s. house speaker nancy pelosi's visit last week. beijing is extending military drills that were due to conclude on sunday. for the latest, let's bring in our chief north asia correspondent stephen engle. stephen: it's been almost a week since nancy pelosi is controversial to -- trip to taiwan and reverberation still being felt. these six exclusion zones that encircle taiwan, where they are conducting these military drills, supposedly for four days, they were supposed to be wrapped up on sunday, but the people's liberation army have announced more drills in and around taiwan. taiwan is saying they flew at least 66 sorties sunday that crossed the median line of the taiwan strait. 120 pla aircraft crossed the line from wednesday to sunday.

the question is how long will these what some would say provocative displays of force, how long will they continue to send the message that beijing is displays -- is displeased with the pelosi visit? the ultimate aim could be for xi jinping to set a new normal for operations around taiwan by china shrinking the so-called buffer zone around taiwan. it puts a greater pressure, let's be honest, on the united states, to craft some sort of response, perhaps to push back china from crossing the taiwan strait median line and shrinking the buffer zone, much like the united states did in 1995 in the so-called taiwan strait crisis when at least two strike versus

dutch forces were sent -- strike forces were sent to the area. joe biden expressed confidence that china would not escalate beyond the current drills. he also refused to fall to nancy pelosi for sparking this new round of tensions, saying the trip was her own decision. this is the story we will continue to watch, shipping lanes have been affected, air corridors have been affected, but shipping in the taiwan straits showing signs of returning to normal monday. ship tracking data by bloomberg shows four of the pla six exclusion zones have seen merchant vessel traffic cross through those so-called danger zones. it seems like at least the economic activity has started to return to normal a week after the visit. haidi: what about the economic retaliation? stephen: obviously beijing will

likely use whatever lever they think will work to their advantage and economic is one of those that was announced when pelosi was there, including the banning of taiwan exports of some fruit and fish as well as chinese exports to taiwan of natural sand used in construction and manufacturing. however, we are getting comments from taiwan's ministry chief statistician saying the industries of taiwan and china are so intertwined, particularly on electronics, china is the biggest source -- taiwan, my notes are wrong -- taiwan is china's biggest source of integrated circuits and they expect little chance of china imposing stricter sanctions because of the economic independence. but again, nothing is ruled out as a china tries to assert its influence over taiwan.

haidi: stephen engle there in hong kong. speaking of china, lots of domestic issues, not least of which is adherence to covid zero. we are hearing from the holiday area, 379 covid cases of four august 8. beijing locking down the beach resort city after a number of covid-19 cases worsening over the weekend, spiking to more than 400 saturday. they are calling it management for the whole city. that is referring to lockdown. we are partway through earnings season in asia, looking at specific things and perhaps the big stories we will be watching. >> picking up what you were saying about the lockdown, but broadly, the covid zero policy, it has been a major headwind. supply chain challenges. that's why the recording season

has been so closely watched for any clues or insights into consumer spending. the demand outlook and supply chain challenges. we are about 40% of the way through, about 500 names out of the way and another 777. just over half of them have beat the bottom line. about a third have missed. a signal of a healthier corporate balance sheet as compared to the financial crisis. the standout sector is materials, unsurprising considering commodity prices. citigroup is seeing the material boom extending. let's look at another company we are watching closely, softbank. we did have that record loss in the latest earnings, 23.4 billion dollars of declines in the previous quarter, a lot of that lost in the vision fund.

the founder really pledging to make big changes to the way softbank operates. we will see how investors react in just under 20 minutes from now. shery: we have seen u.s. earnings season almost come to an end here. three quarters of the companies that have reported earnings have beat profit expectations. what is interesting is a lot of analysts are saying that is backwards looking. the ark investment capital ceo thinks the fed will have to cut rates next year to stimulate growth. we will have more on that debate with matt miller. >> we are getting all kind of signals the economy is very weak. i know a lot of people are focusing on last week's big employment gain. but if you look at household employment, a much broader based survey of employment, that has

been flat to down for the last four months. you look at claims, we've never seen a faster increase off the bottom than we have just seen. roughly 50% from the lows. many people i don't think have taken a close look at that. we are hearing about one layoff after another and we know challenger, the challenger survey says that layoff are 55% to 60% year-over-year. we've had massive inventory glut. i think the last few hires, companies were happy to get them because labor was in short supply for so long. but i think it may be unwinding. >> he reminds me, the last time i saw you on bloomberg, we were talking about ed ludlow out of

arkansas, and you said to him, we have an inventory problem, walmart and target had just been out with numbers that were concerning in terms of the buildup of product and you said deflation is more of a concern than inflation. do you still think that after the big print we have seen and we are still expecting a .7% headline the pi on wednesday -- 8.7% headline cpi wednesday. cathie: i still think that because evidence is piling up. the cpi and to some measure, ppi, both are lagging indicators. the fed is driving policy off of lagging indicators. if i look at the commodity with the phd, it had been trading for year in the four dollars to five dollars per pound range, and it is down to $3.50. if you look at how that's going to feed into the indexes, it will feed in for sure, but month

after month, copper is down and year after year down 20%. if you look at the real inflation gauge, it is gold. gold prices peaked in august 2020, 2 years ago. we have been at a trading range, the low end of the trading range now. if the fed continues to tighten and he believes the dollar will turn back up and commodities will continue to fall. haidi: cathie wood there. next, australia has passed a landmark climate bill to cut emissions by half. our next guest joins us shortly. this is bloomberg. ♪

shery: legislation is one of the drivers. global new investments worth $226 billion, the highest ever for the first half of the year. let's bring in the head of aipac research paired which -- research. how much of this is just inflation?

>> when you look at it by country, the leading market, china, it wasn't about inflation. just under half of what you just mentioned was in china and it was remarkable growth. after china, the picture is a bit mixed. focused on aipac countries. australia is seeing a reduction of 6% year on year. the rest of the market did not do so well in the first half. haidi: we have the u.s. senate passage of the democrat landmark bill, tax, drugs and climate in there. what impact do you see in the energy investment front and

perhaps globally? ali: first of all, it does extent tax credits for renewables, solar and wind and energy stores. if you look at the package, about 86% is focused on climate change and energy. with in theire, there's a lot so applying -- in there, there is a lot focusing on supply chains. this may very well boost competition globally. most of these measures will take time to take effective so probably we will see the impact in the second half. haidi: always great to have you with us.

australia has long been viewed as a laggard when it comes to climate change but they have passed a bill that moves to the senate. the bill needs the support of one independent senator and all 12 of green party. adam, great to have you with us. this piece of legislation has been hailed as the most progress australia has made on climate legislatively in the past decade and yet not going far enough. is it a good start to inject momentum, and does it bring an end to the climate wars that have paralyzed progress? adam: it is a small step on the road to the claimant emergency. the target is not consistent with the paris agreement requirement to hold climate increases. australia would need to do between 50 and 75%. it is below that.

is a deal that doesn't contain a lot of tape, but it is a small step on the road toward taxing the claimant emergency, and we were able to secure amendments for the bill so that it could be ratcheted up over time, and start to put some climate obligations on government funders. making it more difficult, for example, for government agencies to start funding: gas projects. it is a small step but it will make a difference over time. the big concern we've got is targets could be blown out of the water in the next 12 months or so if the government approves some very big coal and gas projects that are on the books in australia at the moment. megaprojects that would not only contribute globally to carbon pollution but would make it hard

for australia to meet its domestic targets. haidi: it is undeniable the windfall the country gets from those gas and coal projects is significant, even in the past week alone. how do you balance being able to stop those products, get emissions, not let down australia's trading partners, all of this at a time and we are dealing with global security issues when it comes to energy? adam: australia's trading partners account for 75% of our coal exports, they've all set net zero goals by 2050 or 2060. if you work backwards from that, that means they have to d carbon i their electricity systems first to reach those net zero goals. which means australia's thermal coal exports already have a deadline set by trading partners. as far as gas is concerned, australia doesn't actually get much from the gas projects.

27 big gas corporations in australia, $77 billion australia in one year and paid no tax on it. our tax laws are broken analyst really gets next to no returns from it. what we are arguing is together with the international energy agency and knotted nations, the world -- united nations and road sciences, we are opening new projects that will lead the country and the international agency has been crystal clear that to meet net zero by 2050, from this year there can be no new projects. shery: do you think that message, the efforts being made domestically in australia being told internationally, a little bit of australia being a climate --, is being restored?

adam: i hope so. the government is keen to host a global climate summit here. that is something we would support. i think moves like that will go some way toward restoring australia's reputation. just recently, a pacific island with which we are we engaging my have made it crystal clear they hope australia stops expanding: gas. i think it will be very difficult for the new government to host a climate summit to restore its reputation internationally if at the same time we are opening these massive projects. one in australia and off the coast of west australia, talking about 1.3, 1.4 billion tons of climate pollution. in the northern territory, that alone would be 13% added just to australia's pollution.

increasingly, i think not only for climate reasons but also diplomatic reasons, it will be increasingly untenable for the government to maintain its desire to keep opening new: gas projects. shery: in the u.s., politicians are moving toward inflation reduction act, which would secure $374 billion in climate and energy spending. does australia need something similar domestically to get something big for climate going on? is there a need? adam: there is a need and there is the will. we've just had an election where we had a change of government but the incoming government, their vote went backwards. the outgoing government, their vote went backwards. what we saw was the green vote no up and a number of community independents, their vote went up. we have a parliament in australia that has more third voices than ever before.

that's on the back of a number of things, including a strong push for climate action. there is a real desire and will for it. this is where the rubber is going to hit the road for the new government. very soon we have to start explaining how they will meet this new legislative target. that requires the senate endorsement in the next six to 12 months and that will have to not only reduce existing pollution but also start to put limits and obligations on new projects as well. we will have a debate about including climate in our environment laws more, so new projects have to take into account impact on climate. and spending as well, to get australia off: gas and onto renewables. all of these things, and these things in parliament more than

ever before with advance. shery: is there a path toward renewables? adam: we are blessed with sun and wind. i've spoken to a number of people, people in germany are saying we look at you and -- you in straley and we scratch her head and wonder why you are not world leaders. if our trade partners get out of: gas, we can say we will sell you our wind instead. whether it is in the form of hydrogen. those are opportunities on the table. haidi: intellectual capacity and hopefully political capital as well. lots more to come on daybreak: zero-commission trades for online u.s. stocks and etfs. and a commitment to get you the best price on every trade, which saved investors over $1.5 billion last year.

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shery: we are watching semiconductor shares in korea and japan. we are also watching some earnings today, consumer staples reporting. the market opens in tokyo, seoul and sydney are next. ♪

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shery: this is daybreak: asia

and we are counting down to asia's major market opens and we are watching the semiconductors. we have nvidia with a gloomy outlook. at a time we are also seeing a little bit of gloom given the covid cases across china but also some optimism with the hong kong quarantine rules being reduced. haidi: great if you are traveling in or out of hong kong or better. also optimism when it comes to the fed new york survey suggesting it may not be baked into consumers and households just yet. that's take a look at markets. shery: we are watching for the 10 year treasury. it fell below the 280 level again. this as we have the u.s. jobs market report. and then we had a rally in treasury yields. we are back down and at the moment at the 274 level. take a look at japanese stockmarkets. under pressure. we had a mixed session on wall

street with the s&p 500 reversing the 1% gain again. it was the semiconductor outlook we are watching in the japanese session as well. the japanese yen holding steady. not a lot of movement. 134 level. one stock we are watching is softbank given the mass of losses. look at korea. we had four sessions of gains for korean stocks. this is how we are looking pure unchanged at the open as the korean wan holds steady. we had a lot of risk off sentiment after the jobs report. it seems perhaps a little more stability has returned to the markets. haidi: stability and calm ahead of the inflation print in the u.s. on wednesday. take a look at the set up in australia. first couple of minutes of the

staggered session. we do have a little movement downside to the asx. watching some of the digital currencies. bitcoin potentially come up platform-related names in today's session. the aussie dollar holding above the 77 -- 70 u.s. sent level -- cent level. treasuries rising and stocks raising intraday gains. the july low is the range we are looking for for the rest of august. let's take a look at one of the big movers we are watching. shery: softbank falling and not surprising given massive loss reported in the previous quarter. we are talking about a record loss of $23.4 billion. softbank falling 2.5% at the

open in tokyo. this comes at a time when masoyoshi son is under pressure especially because of his investments. this is what he had to say on the disappointing numbers. >> the market and the world are in a bit of confusion and today we have a big loss for softbank group. the biggest in our corporate history and we take it very seriously. haidi: for more, let's bring in our technology reporter. you heard the side coming from him as we heard him speak. a gloomy mood for the call. what were the key takeaways? >> it was very gloomy indeed. the bottom line figure was much bigger than what the market had been expecting. another record loss quarter following what was a record loss in the previous quarter. this is because of the huge stock market declines which forced softbank to aggressively

mark down both its publicly held and privately held assets. and among the highlights of yesterday's announcement was softbank's commitment to huge cost-cutting efforts which will also include a reduction in headcount. the details of these cost-cutting efforts will be very closely watched going forward. haidi: what is the kind of investment reaction and outlook from here? >> as you can see, the share prices are falling about 3% this morning. the response is not very positive. most of the analysts are saying results were disappointing. and based on what masoyoshi son told us yesterday, there is a little sign of a turnaround while the valuations are likely to continue falling for a little bit longer which is not a good sign for investors.

softbank did say it will be very careful in investing new money while the company is trying to sell off some of its assets for a cleaner balance sheet. we will have to see if these efforts pay off. and if there is a sign of a stock market rebound, that would be crucial going forward. haidi: our technology reporter in tokyo. tech remains in focus after the sector drove the losses. u.s. inflation expectations also dropping. that's get more from kathleen hays. let's get to you, simon with the fallout over nvidia. what do we hear from some of the big investment houses on the outlook? >> generally speaking, people are pretty negative.

there is also a significant shift away from chips and other types of goods. and the real hope lies in services. for the markets overall, they need to see either the fed lunching on its fight against inflation or they need to see the economic cycle droppin -- troughing and neither of those seem imminent. shery: and tech being pressured by rates trajectories as well. inflation expectations dropping perhaps in the u.s. issei overly for the fed? >> i would say a little sigh of relief but there is a lot further to go and the big inflation report on wednesday is probably going to give them more relief. if it gets a little weaker or not as strong -- let's look at

the numbers. this is the new york fed inflation outlook survey. the outlook for the year went down to 6.2% from 6.8%. your outlook always is stronger than when you -- the year outlook is always stronger. what is driving it? a big difference is gas prices. asked prices plunged a lot in the u.s. -- gas prices plunged a lot in the u.s. rent increases, people felt they would be up less than 10%, for the first time since march. expected spending, the cost of inflation -- they only expected 6.9% more, down from 9% in may. the headline cpi on wednesday,

the consensus dropping to 8.7% but the core which may be still has service as prices that continue to rise and things like that is expected to rise to six wine -- 6.1 percent. the chicago survey goes back further. the san francisco fed put out a piece of research today talking about the year-long inflation expectations are important in affecting wage inflation. that is where they show up first. they are concerned about the impact on inflation. for the fed, the idea they will stop hiking rates, no. some are talking about pushing back to 25 basis points if they get better news. maybe that is the best we should be hoping for now. shery: simon, what does this mean for the markets?

jp morgan recommending investors to switch to commodities. >> yes. markets will be very pessimistic if as kathleen points out you get affirming core inflation and if those numbers look sticky and relatively broad, the powell pivot we saw about 10 days ago will be completely overwhelmed. and it is not clear at this point that commodities would do particularly well. they will benefit from high inflation, they tend to be somewhat of a hedge against inflation but if the fed is resolved to keep hiking and real interest rates continue to rise, it is not clear that commodities would do particularly well have the softness in the overall economy. shery: simon flint and kathleen

hays. speaking of the inflationary outlook and central-bank action, we are hearing from the thai finance minister giving his view on inflation and monetary tightening. he sees cpi peaking and easing into the fourth quarter. while still trying to retain the fastest inflation in a decade. core inflation jumping. the finance and astir saying you need to make sure they -- the finance minister saying they need to make sure that the economy recovers. we are expecting the bank of thailand to raise borrowing costs wednesday this week. bloomberg economics expecting a back to back move given that inflation is sitting at a 14 year high.

also talking about favoring stability which has outperformed many of its asian peers. seeing quite a bit of resilience given the pressure on ems coming from the tightening fed. let's get some of the movers in particular softbank which we are watching after an awful set of results and news of cost-cutting. annabelle: we just had that conversation but in terms of investor reaction, what we are hearing is analysts saying what they liked is the buyback offer, but in terms of what they are watching, the private book is looking more inflated than public listed assets. the outflow of senior executives is another concern and the sustained weakness in the alibaba share price. softbank is in defense mode. you see the investor reaction.

let's look at the asian chipmakers. we did have invidious quarterly -- nvidia's quarterly missing. it piles under the evidence we have that is growing that the -- that the demand for electronic components is driving up after a -- drying up after a two-year boom. we see that in japan and in korea some declines there. a beginning to an end to the covid era computer boom. haidi: let's get to vonnie quinn for the first word headlines. vonnie: donald trump said monday evening his mar-a-lago home was under siege and occupied by a large group of fbi agent's. he issued a statement saying he had cooperated with elephant government agencies and the unannounced rate was not

necessary or appropriate. the justice department declined to comment. hong kong's move to reduce quarantine for inbound travelers has not done much. economists are projecting their economy to shrink this year for the third time in four years. and cathay pacific is urging the government to remove the restrictions entirely. the u.s. state department is written is -- is lowering the level 24. joe biden says he is confident china will not further escalate tensions with taiwan after a series of military drills in the region. china maintain pressure days after nancy pelosi's visit to the island. the drills since wednesday have been the most provocative in decades but taiwan said no planes or warships have entered their territory. olivia newton john has died after a 30 year battle with breast cancer. she was 73.

she had some of the biggest hits of the 1970's and 1980's and is best remembered for her role as sandy in greece. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: still ahead, hong kong-based -- recorded a net loss in the first half. we will be discussing those results as well as the global energy outlook but the ceo. at first, the american chamber of commerce in hong kong chairman will give us his views. this is bloomberg. ♪

>> we want to reduce the impact of the quarantine on our economic activities as well as our connection with the world. haidi: hong kong chief executive reducing hotel quarantine for inbound travelers. let's bring in joseph armas. good to have you with us. first of all, give us your reaction and the reaction of your members to the easing of these quarantine rules. joseph: thank you and good morning. this is a long and anxiously awaited announcement. these new measures are a welcome action. a welcome plan to open up hong kong. but frankly, our members were hoping for zero -- a zero quarantine scenario or a home quarantine scenario especially

for residents coming in but we recognize the government's efforts to take this action. any time a reduction in quarantine is a welcome one. shery: and then the likes of virgin atlantic say they are not returning flights to hong kong so what else needs to be done given this may not have the meaningful return to traffic want to see in the city? joseph: exactly. this is why we were really pushing for and advocating for a zero quarantine. because even though there is a reduction, the three days quarantine still limits the amount of travel into hong kong. a lot of times businesses come it is costly to have employees come to hong kong, leave and come back because of these quarantine measures and often times they have to carry those costs out of pocket and it is not sustainable for businesses to keep on subsidizing quarantine costs to conduct

business in the region. in terms of opening up, the zero quarantine will also an -- will also enhance tourism travel. haidi: when you take a look at your membership, have some of them made permanent changes to deal with this? or is it possible for hong kong to fully rebound to a state of competitiveness that has not been partially lost to hubs around the region like singapore? joseph: this is a big concern for us. the quarantine measures have caused a lot of our members and member companies to look at their operations and figure out how to take actions to deal with how long this quarantine will last. not having this roadmap of when we can open up and having the uncertainty in the environment weighs heavily. we have seen a lot of the company, whether it is senior executives or senior managers,

take action in how they do business in the region. they leave hong kong for a short amount of time in order to travel around. this has had a big impact. and the attrition issue is also something to think about. ordering this time we have seen massive attrition out of hong kong of employees leaving not only that, it is the attraction of senior executives and senior talent to come into hong kong. this has been a struggle as well. haidi: you have talked about hopes that the announcement was going to drop quarantine altogether. how practical is that in terms of your expectations? is that something they will be moving towards end the coming months? what other changes can they make to the corn -- to the covid regime to make the appeal of hong kong higher?

joseph: certainly the direction of a zero quarantine, we realize there are a lot of challenges there and that is why we recognize the government's efforts in taking this step forward but really, we would like to see -- we cannot roll back. we want to see how the government is going to move forward to have a quarantine free program. whether that is increasing the testing requirements, utilizing the medical surveillance and health code -- we think that is a step and the right direction in terms of satisfying peoples needs and concerns of can -- of controlling spread in the community. but frankly, having that zero quarantine and managing that through a testing regime as what we talked about in terms of how we can move forward. and regarding the isolation centers, those certainly have a negative implication on people's

thoughts on coming into hong kong. the thought of not having to quarantine or to be isolated in those types of facilities would be a positive direction and we want to see the government move forward with that and come up with actions to do that. shery: you do have a new government in hong kong. what changes are you seeing in its relationship with business? joseph: we have seen some engagement with the new government in terms of outreach. we certainly are -- we want to believe the recent communications we have had have had an impact and an influence in the new measures released. we look forward to continuing to engage in that and we don't see any reason why the new government should not engage with the business chambers, not just us but with the others, to further influence decisions going forward. haidi: joseph armas, the chairman from the american

chamber of commerce in hong kong. you can catch up on our interviews and you can dive into any securities on the bloomberg functions that we talk about and become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only. it is all at tv . this is bloomberg. ♪

haidi: let's take a look at how the european future a session is shaping up on a big week as we get into u.s. inflation expectations. that is coming through in the middle of the week and a lot of repositioning before then. we are seeing not a lot of change on the u.s. stoxx 50. msci europe.

we had a stagnant session in the u.s. with tech stocks driving the session lower. previously we saw european stocks rising with investors focusing on the theme of relative resilience. friday was the worst decline in three weeks for european shares and we did see something of a rebound potentially continuing into the tuesday session. shery: look at some of the big movers across japan. we are watching softbank now down more than 4% after the record 23.4 billion dollar loss in the last quarter. plunging portfolio valuations. we are also following inpex. they announced a share buyback. they are and oil and gas production company in japan and they are benefiting from high commodity prices. falling at the moment about 4%. they -- nab falling at the

moment about 4%. bloomberg intelligence a little more optimistic. tokyo electric also falling on a mess. haidi: -- has dramatically reduced share -- the company just spent $33 million for acquisitions in 2021. just last february tim cook said apple had acquired 100 companies over the last six years. nvidia missed its projections by more than $1 billion surprising investors reinforcing claims that demand for electronic components is drying up. down from its earlier projection of 8.1 billion. shares fell over 6% to their worst decline in nearly two months.

alex the digital second-quarter loss doubled to around a half $1 billion. the poor performance was mainly due to unrealized losses on digital assets. galaxy did report a strong liquidity position of around $1.5 billion. coming out next, the ceo of hong kong's largest electricity supplier points us after suffering a net loss in the first half. clp's richard lancaster will be with us to discuss the road to recuperation as well as his outlook on the global energy supply and price dynamic. this is bloomberg. ♪

haidi: we are getting the consumer confidence numbers

falling 3% month on month and the august number falling to a level of 81.2. nine months of falling consumer confidence according to this gauge and it is quite clear we are starting to see that inflation expectation and perhaps a sign of the recession expectation being baked into some of these consumer indicators. interesting given that we continue to hear from economists including at the rba that the australian households are resilient and there are good buffers compared to a households -- household vulnerability that we see in the likes of the u.s. but property prices coming to quite significantly as well which is a high correlation to the household allen's she and resilience. let's get you a look at what markets are doing at the moment. annabelle: we are looking fairly subdued this morning. the economic indicator from australia one of the few we can

watch today. it is also being driven by these earnings we are getting from the u.s. nvidia, for instance has been a drag on chip stocks in this part of the world. volume trading well below the 20 day moving average. a sign that perhaps there is not much to entice investors into the market today. softbank is a stock we are keeping an ion. it is declining sharply and tokyo falling the biggest quarterly loss on record. let's wring up the terminal chart to see what else could be weighing on global sentiment. china's property sector struggling continuing west struggles. junk bonds dropping back down again. ongoing covid lockdowns and policy tweaks and authorities facing a tough battle to meaningfully turnaround the real estate industry. we see that reflected in a variety of indicators including sales of residential mortgage

bank notes which is set for a record drop from what was once a pretty safe investment tool. haidi: let's take a look at the state of energy markets. hong kong's largest energy supplier recorded its biggest loss since it listed 20 years ago. the soaring prices of oil and gas are inevitably being passed along to customers. let's discuss more and bring in ceo, richard lancaster. great to chat with you. the numbers are challenging. tell us about the level of negative exposure that the company had with global energy prices. richard: we are in the business of buying global energy from markets, converting it to electricity and selling it to our retail customers. so when energy prices rise outputs precious -- pressure on

our business. we see that wherever we operate. wherever we have to purchase fuel, prices have been at record high levels. the price of gas and coal in global markets have risen as much as four times. this is putting pressure on our business. haidi: how have you seen the demand side being impacted in hong kong? we have seen the quarantine measures being announced but still a level of downside when it comes to economic activity as well as in china where we know covid zero continues to dampen demand as well. richard: energy demand is linked to general economic activity. in hong kong we have relatively little manufacturing. electricity demand is actually more driven by the weather. a couple of colder months earlier in the year had a bigger impact on demand. we are seeing china's economy --

it is struggling to get on its feet after covid and with all the restrictions that have been applied there. but electricity demand is up around 4%. however, that demand has to be met by much more expensive fuels so that again is putting pressure on electricity generators in china. shery: your australia business suffered a large loss partly because of energy hedging contracts. is this a one-off? richard: australia is a nation that is blessed with a lot of energy resources but it is a big exporter of energy. as demand for energy globally has to be met, more of that energy is exported from australia in the form of gas and coal. that has put tremendous pressure on domestic prices. the market does require energy

companies to be selling their electricity forward. when you get a sudden spike in prices, that has to be reflected in the value of our contracts. this is an unrealized loss. as the contracts unwind, that will be recovered over the coming years but it is difficult for a business such as ours to deal with sudden shocks such as this. shery: we have seen some changes within your business structure. a 10% stake cell in your indian unit. can you give us an update on that front and what you want to do with that capital as well? richard: energy is going through a transition to deal with climate change and that is requiring investment of a scale that we have never really seen since our industry started. the capital requirements are requiring us to look for partners and to work in partnership with strong

financial partners. we have a partnership in india which we have readjusted to make it a 50-50 partnership which we think is a good platform for us to support the energy transition in india. we see tremendous opportunities wherever we luck -- wherever we look to invest but we have to invest carefully and wisely. and we have to work with strong partners. our relationship in india we think is a good one but we have made some readjustments to that partnership and we think that is a tremendous platform. shery: we have been talking about climate change pressures and fuel price pressures. is this giving a different reputation to nuclear energy? do you see a change in how consumers look at this source of energy? richard: i think the energy challenges that the world is

facing means we cannot nor any -- we cannot ignore any technology and nuclear power has a role. it is carbon free, insulated from fossil fuel prices so it has a much more stable price so where nuclear power can be developed and developed at skills such as in mainland china, it should be a part of energy policy. we have invested in nuclear technology for hong kong and that has played a valuable role in helping insulate hong kong from the energy prices we have seen in fossil fuel markets so it does play a very important role in energy policy globally. haidi: what are the plans for offshore wind in hong kong? richard: we believe that offshore wind is now economically viable. the cost of the technology has come down considerably over the

last 10 years and even in a place like hong kong urges very crowded, the wind resource is not that good, but we now believe that offshore wind can be a viable technology. we are taking forward a project that we will put to the hong kong government for approval in our next element plan and we believe hong kong can have a viable offshore wind technology to support its energy mix. haidi: we spoke a little about how positive the development is when it comes to the cutting of quarantine days going into quarantine. would you like to have seen more? what has been the impact on your ability to do business? richard: it has affected business generally in hong kong. tourism is a very important part of hong kong's economy and with it being difficult for tourists to be brought in, it has had an

impact. i welcome the first steps we have made. i think they are heading in the right direction. there is a long way to go for us to get back to some degree of normality when it comes to international travel but this is a good first step. shery: richard lancaster, thank you. let's get to vonnie quinn. vonnie: softbank's ceo, masayoshi son is promising widespread cost-cutting after a record loss. the tokyo-based company lost the vast majority of that from the vision fund. following the results, son said everything will be reviewed for cuts and he revealed that he started talks to sell fortress investment management. >> we have to control ourselves even though we sometimes feel the urge to rest -- to invest in a market that has tanked. we have heightened discipline to make sure we do not lose big. vonnie: the u.s. is readying

additional military aid to ukraine. according to the pentagon, the package includes long-range artillery ammunition, antitank weapons and melt -- and medical supplies. that would bring the total assistance to almost $10 million. u.s. and iran have weeks to decide on resolving the nuclear deal. the negotiators wrapped up 15 months of talks in beyond a with a draft for both countries to sign. it would see iran reduce stockpiles of enriched uranium in return for economic concessions. singapore is prepared to increase support measures to help deal with rising living costs. the prime minister said inflation and interest rates could remain high and more support packages will be rolled out in the coming months. dbs reports consumers in singapore are spending 5% more relative to income than they

were a year ago. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. shery: we take you to live pictures of mar-a-lago, the residents in florida of former president donald trump. he released a statement saying fbi agent's have raided his mar-a-lago home in palm beach a move that comes as prosecutors escalate the investigation over the former president's conduct. what do we know so far, bruce? >> there is a statement from former president trump that the fbi has conducted a raid of his home in mar-a-lago. he said that they even broke into my safe. and he added that democrats who desperately do not want me to run for president in 2024 are mistreating him. the white house referred to the

justice department questions about this and the justice department has declined to comment on the statement. they know that donald trump is currently in new york city at trump tower so he is not in florida at the moment. beyond that, we don't have any additional information. haidi: does this add to speculation or perhaps a buildup of evidence that the justice department's investigation into what happened on january 6 is turning increasingly to the former president himself? >> yes. we do know that the justice department has a grand jury that is a hearing testimony related to january 6. last month the gent -- the grand jury heard from top aides to former vice president mike pence including his chief of staff. so, there also are possible

crimes that the january 6 committee has said or laid out that these are things that potentially could be things that the former president could be prosecuted for. those would include the potential charges could include obstruction of an official proceeding, defrauding the united states. these are things a california judge said earlier this year that it is more likely than not that trump committed. it is possible that this rate by the -- that this raid by the fbi is related to investigations of those potential charges. haidi: bruce einhorn what the latest. coming up next, trying to -- china extends military exercises near taiwan keeping pressure up

following nancy pelosi's visit. we get the latest on that. this is bloomberg. ♪

haidi: beijing is signaling it will keep up the pressure on taiwan to following nancy pelosi's visit last week by

extending military drills that were due to conclude on sunday. let's ring in stephen engle from hong kong. what is the latest? >> it has been about a week since nancy pelosi first arrived on taiwan. she has long since gone but reverberations are still being felt. we had four days of military exercises previously announced by the pla inducted in the six danger zones around the island. they were supposed to be concluded as of sunday. however, the pla has announced it is continuing with further exercises and that is what we saw yesterday. the pla flying some 66 sorties of aircraft on sunday including 22 that crossed the median line. between wednesday and sunday we had 21 aircraft crossing the median line during the four days of initial or exercises. the question now is, what is the next step for china?

will they continue with further literary and economic moves against taiwan to potentially isolate the island? will xi jinping squeeze the buffers around the island even further? that leads to the next question, what action will united states take like they did in 1995 during the so-called third taiwan strait crisis and that was to send two carrier groups into the western pacific with one even sailing through the taiwan strait. we will have to see shared uss ronald reagan is deployed in the western pacific and is on station for any crisis. so far, the wargames have been perhaps the most provocative moves so far iv peoples liberation army -- people's liberation army and the next question is what is next? shery: could we see more of the economic squeeze? >> we could.

beijing will use whatever levers that will work to their advantage to isolate taiwan further. i was looking at the numbers of the sanctions that have been imposed on fruit and fish as well as the chinese ban of natural sand to taiwan. all in aggregate, a small part of the trade across the street. -- strait. there is an interdependence with circuits. you would not cut that off because it would do equal harm to china as well. total exports to china from taiwan was 16 billion in july alone. to the united states, taiwan exports, 7 billion. you can see the importance of china. agricultural exports, 0.6 percent of total and china sand exports just over one million last year.

in aggregate, the current sanctions are minimal. if they want to do further economic damage, there are levers for that but it might hurt china as well. shery: stephen engle joining us from hong kong. a quick check of the latest headlines. so if i shares fell in trait after softbank said it would self some or all of its shares in the online finance company. softbank holds 9% stake said the timing and size of the sale would depend on many factors. the announcement comes after softbank recorded record losses and the ceo pledged sweeping cost cuts. boeing is said to be resuming deliveries of its 787 dreamliner jet this week. the deliveries come after two years after handovers were halted as a result of manufacturing flaws. bloomberg sources say the first jets are set to go to american airlines after u.s. regulators gave a green light to resume orders.

twitter has subpoenaed oracle's founder larry ellison in its legal bid to make elon musk complete his proposed buyout. last week the company subpoenaed an official of a trust ellison controls that committed $1 million to mosques proposed deal. twitter has notified the court that they have subpoenaed ellison himself. haidi: the once profitable debt marker is now imploding as government clampdown's take its toll. -- government clampdown's take their toll. their toll. this is bloomberg.

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shery: a chinese property company has been one of the most profitable of the past decade but now it is all about debt. we have today's big take story. fixed income investors could get really juicy returns from being in this market but given the chaos, who could blame them for not getting near this space. >> we have been following the story day in and day out for nearly two years when we first started seeing the first signs that beijing might be turning and shifting its view of the property sector. from there we have seen the

incredibly dramatic and unprecedented decline. it was once not only the most profitable bond trader in hong kong and asia but in the world. to step back for a moment it is important to remember it was once one of the most liquid and traded bonds in the world that went for something like 105 cents on the dollar and now it is between seven cents and eight cents. it showed an incredible turnaround for the sector that was once a symbol of hong kong's ability as this window for global investors into china. and as a per phase of -- and a purveyor of some of china's riskiest assets. haidi: the latest installments and the drama is the social risk . there were protests by mortgage holders.

this additional element to the story. >> this is the thing we know authorities have been really keen to avoid so far. and in fact many of the offshore investors that were bullish on the trade came in even at distressed levels knowing they would be last in line after the homeowners and the homebuyers. the priorities for authorities was always making sure homeowners did have their homes ultimately delivered. we have seen widespread boycott payments of mortgages on unbuilt properties that have yet to be delivered. over 300 projects in 100 cities across china. potentially they could be granted mortgages but clearly we have seen beijing pushing out this request for local governments to sort out this problem quickly. the focus is going to be on central provinces in china where we have seen the concentrated

outbreaks of these types of protests. shery: rebecca in hong kong. let's take a look at some of the stocks we are watching when markets open. cathay in focus with the loosened quarantine requirements. we are watching the leisure hotel names. that begins on friday. and watching the chip stocks. hon hai and smic and aac could move. that is it for daybreak: asia. this is bloomberg. ♪

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>> good morning from hong kong it