haidi: welcome to daybreak australia. annabelle: we are counting down to the major market opens. shery: the top stories this hour. oss -- investors await more

clarity at jackson hole. treasury yields are rising. a property downturn on a scale unseen since the 1991 recession. rising borrowing costs. real estate leading the declines in the u.s. session. futures under pressure. pico data -- eco-data is playing into markets. mixed picture in the treasury space. the two year yield took a hit after we saw the business activity contracting. demand is slowing for manufacturers, also for service providers. oil is gaining ground in the new york section, unchanged at the moment.

$94 a barrel. take a look at this chart on the bloomberg. we are seeing new home sales decelerating at the lowest level since 2016, six months of declines for this number, rising borrowing costs. properties available for sale at the highest since 2008. annabelle: in terms of what you have said about housing data, they will be interesting to see where the weakness gives jay powell a reason to temper hawkish mess, ahead of this, we are expecting commuter trading volume, new zealand is looking a

little bit weaker. the aussie dollar coming back close. we have some bigger modes going on in the commodities space. we are watching asian lng prices , japan, trying to secure supplies, in the u.s. it touched $10, pulling back because we are seeing more supplies into the market. lithium in china, we're seeing that at a five month high, near a record. this is about the weakness we are seeing in the global economy. haidi: it is the weakness

dominating the narrative. all this is feeding into recession concerns. the weakest level since may, 2020. we saw activity gauges slumping. there is the exasperation of record energy prices, inflation, the war in ukraine, feeding into a concerning outlook. shery: expectations are we will hear hawkish fed speak. goldman sachs does not believe chair powell will be going over.

we are talking about the markets racing for the 1980's with inflation increasing, powell not transforming to say it will not be a moment and he expects 3.5% to break inflation. haidi: really interesting given the expectations. the take a look at how the markets are reacting. power cross asset reporter joins us. what does it feel like? is it back to obesity -- potentially a bear market rally? reporter: markets are taking a

pause. they are waiting for jackson hole. the fed chair -- for now, the s&p 500 lower for a third straight session. trade volume was lower. the nasdaq was flat. the last time we sawed happen was earlier this year. it is a mix of things. the dollar halting a four-day rally. people are skeptical, but it remains to be seen. markets are trading range bound. shery: people are concerned because of the market bullishness leading up to jackson hole, except for this week. are we expecting chair powell to come out with any remarks to

micromanage financial conditions? what can we expect? reporter: traders are expecting he will have a more hawkish tone, especially after officials came out saying they will tighten even with a slowing economy. two out of 12 fed directors are favoring 100 point basis hike, but the consensus is 50 to 75. it remains to be seen, because things have not changed. inflation is sticky. recession concerns are there. data came out today. people are concerned. people say inflation might not have hit the peak, though people have said we have. rockefeller said he expected markets to be trading range bound, but as of now it's too early for a recession call, and inflation call, it is wait and

see for now. shery: isabel lee with the latest on the markets. directors that two of the fed regional branches favor a 100 point increase. our bureau chief joins us now. this is sort of a different policy told on the benchmark, so slang to us with going on? reporter: that is an important distinction to make. the announcement was not about the fund rate which is the most-watched of monetary policy tools. rather, the discount rate. this is just another tool that the federal reserve has and is voted on by just the board of governors. we saw two of those reserve banks come out and say they want

a larger hike, a full 100 basis points. that is perhaps an indication that those banks are generally leaning more hawkish which is not surprising. both of those leaders have been vocal. maybe this is a signal of what is to come. haidi: is that because we are seeing a patchy economic picture across each of these constituents for the central banks? reporter: it has been decently consistent. we have seen a housing slowdown across the country. we have seen inflation pretty broadly.

the issues are fairly broad-based, so i do not think that hawkish and us is because of the data. i think it is more because those leaders and banks tend to be more hawkish. haidi: of course we will be live at jackson hole for the crucial speech. we have interviews as the governor of the bank of korea. >> the malaysian president will serve a prison sentence. the court presents a contesting

of a general election. is the first malaysian prime minister to be convicted. a pakistan court has asked the former prime minister to appear next week. the court will review rather remarks -- whether remarks -- the political drama threatens to undermine the quest. the u.s. plans to announce $3 billion in arms to ukraine as the nation marks independence day. largest single installment since the invasion six months ago. germany is said to be finalizing additional weapons and ammunition. tributes are being paid to a billion are founder of tiger management who has died. he became one of the generations

most successful hedge fund managers and a mentor. by the late 1990's, the fund had $22 billion in assets. 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. >> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology." with emily chang. 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: still ahead, we talk about china earnings seasons and the challenges the nation is facing. up next, we discussed investment strategy with the mainstreet cio, the 10 year yield is the leading indicator of u.s. market sentiment. this is bloomberg. ♪

shery: traders are bracing for hawkish talk by the fed this week. >> i think the u.s. does not have quite the same degree as china. in europe, you have the gas issue. there is nothing quite to the

same degree we have in the u.s.. it's going to be a slow growth environment, below track. that is why financial conditions are where they are. you have the fiscal drag. plenty of headwinds, but i do not think it's quite as bad as in china or europe. >> how do you expect chairman powell to navigate that? >> is bouncing between two things. he will lay out the case for slowing the pace of increases, 275 -- two 75 basis point moves. i do not think he will be specific about the number, but he will be saying there is a risk of over tightening.

it makes sense to go more slowly. at the same time, make clear that the job is not yet done. they are committed to bringing inflation down. >> could be john taylor saying sustained a higher yield environment. i'll be getting the x-axis wrong? do we need to look two years, three years, or five years of elevated inflation? >> one year from now, two years from now will be lower. commodity prices are clear, good sector in general.

the risk is on the services side or we have seen less of an indication that things are slowing, rents are going very quickly. i do think there will be an improvement, but not everywhere. shery: let's bring in our next guest who looks at the 10 year yield as a leading indicator of sentiment. the cio of mainstreet asset management. always great to have you with us. we have seen bullishness. the u.s. stock market, bond market. we are seeing a divergence. what is the 10 year yield telling you? erin: it's important when you look at some of the key areas of the 10 year when it came down

from its peak, that was three days before we start of the most recent bull market run. it has been slowly increasing, a crossed above three. that was above two weeks ago. -- about two weeks ago. it has been a good indicator. today, closing above three is a signal we are seeing a little more fear, definitely some risk off. that has been mimicked in the stock market. as long as the 10 year yield is heading straight up, one day after another, it's going up. you should expect stocks to be saving headwinds. you should be more cautious. you can use these days as potential buying opportunities. whether we are talking about slowing rates this year, rate

decreases by next year, the market for many aspects are fairly valued. shery: we do not know what chair powell will say. you have recession on the other hand. you are still confident on the u.s. consumer. how does that play into what the macroeconomic situation is right now? erin: the stock market is so forward-looking. it's nothing like the 2008 financial crisis. the stock market will be able to

recover much more quickly versus anything we have seen more recently. it could be slow. 5% earnings growth. it might be below inflation. that is pretty dismal. haidi: it's interesting. your strategy of staying away from peril, but looking at vacations, that sees the convergence of wall street and main street. do you see the leisure theme that people choosing to put money towards experiences? erin: yes. there is a lot of demand. while people are switching on walmart, vacations, the

experiences. as long as unemployment stays below 5%, those are the companies that can grow. that's one area. more so on the smaller and mid-caps side, they were hit a little harder the past week. in general, valuations are much lower than the mega caps and large caps.

we are talking about valuation perspective, yes, it's going to be a challenging period to grow as rates rise, but the valuations have been so beaten out. they are trading at a 30% discount. one of those things is basically a technology company, mid-cap. shery: when you look at your clients who want to retire on savings and the money they make, there was an interesting story last week about the retirement crisis. because of market turmoil, 401k, are there people who have those open? we are hearing from president biden about student loans later

this week. given the volatility, how do you manage that for the future, for young people? erin: i think this particular downturn is helpful in reminding young investors that markets are volatile, they go up and down and we can have extended periods. it was feeling like in the prior year a little bubble-ish. a little like 2000. i've been in this for a long time. there is a certain amount of overconfidence. it's sad if people want to remain on the sidelines, but just remembering to have an outlook of 10 plus years, but you have to have an understanding that things can go

down. if you need that cash, don't put it in something as volatile as stocks. let investments grow. shery: good to have you with us. we have plenty more to come on "daybreak australia." this is bloomberg. ♪

haidi: see tale 82% profit jump in the first half, the chinese factory maker posted net income of $1.2 billion, beating estimates. shares have gained almost 50% since hitting the low in may. jd.com has reported

stronger-than-expected revenue growth after consumers continue to flock to the retailer. it beat the average forecast. more to come here on daybreak australia. this is bl >> directors at fed rl

banks favored a 100 basis point increase. minutes show the st. louis and minneapolis this it can be said about the enforced as a sign of

hawkish and us. the indonesian central bank delivered a basis point hike as it tries to manage inflation. it was only predicted by seven of 31 analysts. the governor took on a more hawkish tone. u.s. trade representative says a gathering will be used to discuss trade and clean energy. a tropical storm is bringing heavy rain and winds across the philippines. the storm could cause flash flooding. it is forecast to strengthen.

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: we have numbers out of australia, net income beating expectations. a dividend per share being issued of 30 aussie cents. this was expected, we have surging price pressures, food and beverage cpi. we see some potential for expanded margins. we see the stock outperforming.

we found out last week what happened, that is set to be swipe -- quite skating. reporter: the solicitor general conducted an initial inquiry. scott morrison took on treasury finance, health, resources without telling anybody. the solicitor general found out he was able to do that. that was valid. the second inquiry will be far-reaching, why, how, who knew. the prime minister says what scott morrison did undermined democracy. shery: what could be the

possible consequence? reporter: a little more than a slap on the wrist. the green party is calling for a commission which will be more wide-ranging and serious. scott morrison's own party is saying he needs to quit parliament. they are likely to be others involved in this as well. must have been officials that knew this was going on. who were they, why did they know nothing? one person likely to avoid consequences is the governor general. he swore scott morrison into these positions, he says he was just following the instructions

of the government. the key attention is to close this loophole. haidi: there is a speech set to be delivered at the g20 parliament conference in place, earnings season continues. net income beating estimates at one billion aussie dollars on account of the surge in food prices. we are watching the stock. more details about capex. comfortable sales in line with expectations just shy of 4%. more to come for the broader economy, the property sector in particular. interest rate increases are

threatening a downturn on the eve of 1991. for more, let's bring in our reporter. keep hearing about the strike. reporter: we have seen ac fall in prices. expectations are -- prices went up a lot as well. it's true households have high savings rates and banks are well-capitalized as well. given the fact households are

indebted, the debt to gdp ratio is among the highest in the developed world. that is what makes it worrying. shery: does that mean the rba may not be lifting rates as high as the markets are pricing in? reporter: a lot of economists believe the reserve bank will move cautiously. already, the treasury and policymakers have downgraded forecast for economic growth. they are not pricing in a recession yet. depending on how far and how fast they go and prices fall, the economic situation could turn quickly. haidi: we are talking about the

risk of a recession? reporter: the probability is not really high right now. economists do not expect the reserve rates to take interest rates as far as markets are pricing, if the reserve rate is 3.5%, it could lead to a more sharper decline and that could cause a recession. haidi: our economics reporter in sydney. shery: the next guest tells us how chinese earnings have bottomed out and where investment opportunities are. this is bloomberg. ♪

shery: the rally in global stocks is faltering as investors weigh economic uncertainties. the morning calls today, there is a bearish consensus. annabelle: we are seeing that pivot, investors are starting to come to grips with perhaps the fed is not nearing the end of the rate hiking cycle. citigroup is saying the global

stock rally, the bounce since the june lows has basically gone too far. the reason for that is inflation is high, we are still going to have more rate hikes even if they are bullish on the outlook or equities, markets do not move in a linear direction. let's take a look at the industries citigroup is recommending. they are preference thing the index, so stocks in the u.k., you can see the outperformance there. the reason is it's not a bet on was happening and the u.k., it's a global index, a lot of multinationals are listed there so you get a broader market exposure. haidi: what about the bottom when it comes to asian stocks? annabelle: same thing. we are not there yet. they're looking at the correlation receipt between u.s. stocks and asia. there are macro risks on the

horizon. since the asian financial crisis, every single global crises, the financial crisis, covid, the tech bubble, all of these means china is the biggest component of that. let's take a look at the csi 300 versus stocks in the u.s.. we can see a much deeper correction for what we are seeing in chinese stocks. daiwa are looking at capital outflows. haidi: let's get more on chinese earnings. they are well ahead of other regions and challenges, covid

zero restrictions. let's bring in -- let's take a look at earnings revisions. we are seeing downgrades for every sector except energy and industrials. at the same time, seeing energy see positive growth. does that mean the earnings confusion is coming to an end given we are seeing more policy support? guest: thanks for having me. earnings season is underway. we are seeing consumer discretionary and consumer staples that have reported strong earnings and sales

growth, we are also seeing that be done pretty badly. small-cap companies have done worse than the large cap names. the large cap couples have held up better. overall, we can see earnings revision, more upticks in the past few months. haidi: covid zero, property prices, the regulatory overhang. even if that's not -- guest: we really like the new energy, we are seeing demand

from europe. the ev equipment sector. we think this is structural growth going forward. given the current support and increasing market share globally. shery: are you factoring in impact on ev and china, giving was happening on some of the supplies not being able to make it there? guest: it is a concern, because of the power outages. bear in mind this is a weather-related event, not a policy induced production pulp

like last year. this is going to be a temporary manufacturing halt and hopefully it's coming soon. shery: we were just showing our viewers, chinese developers trading below value, my next question is, any hope for property developers at this point? guest: it is a question that has been really popular when we talk to clients. a big portion of the household assets in china when any downturn in the market will create a negative wealth effect for households.

haidi: i don't know whether it's managed expectations, but we have seen a positive response, does that tell you there is a model going forward for china tech? guest: i think the regulatory crackdown has been relatively subdued in the past few months, and i think going forward will be put on the back burner. it shows the resilience of the business model for jd.com. hopefully s consumer sentiment except, the company will do better. haidi: great to have you with us. a busy and contentious chinese earnings season. tune into bloomberg radio, get

that in-depth analysis, we are broadcasting live from our studio in hong kong. more ahead. this is bloomberg. ♪

shery: new york and florida

holding elections. ron desantis faces an early test of his presidential ambitions while new york voters will send home at least one time -- one longtime member of congress. let's bring in bloomberg's congress reporter. will this lead to a congressman having to go home? reporter: two veteran democrats are going up against each other. members of congress have been there for 50 years. this is going to be a big loss for democrats either way because

one of them will be leaving. haidi: what about the situation in florida? talk us through some contenders. reporter: ron desantis is running to hold his spot, there are democrats running to secure the nomination. with democrats are looking to do is blunt the ron desantis run for president. we also have the senate race where representative val demings is hoping to secure the nomination tonight to run against marco rubio. that's six expected to be -- that is expected to be a competitive race. democrats are trying to hold onto the slim majority in florida, so this can help them. shery: the investor asking where

politics is going to go, for them, what are some of the issues going to make a difference in the market? reporter: 2022 is going to be a big precursor. the gop have been pushing voting restriction laws, the gop has been aggressive. haidi: let's get you a quick check of the latest business headlines. income climbed to $8.8 billion, that beat estimates.

elon musk has been ordered to hand over information about investors in a buyout of twitter, it has been [indiscernible] judge overruled the billionaires objections as his lawyers complained twitter is casting too wide a net. a ceo is disputing claims they ignored security vulnerability. in an email, they were riddled with inconsistencies adding he was fired in january for poor performance. a bloomberg for says i

manufacturer thank belong to venture -- under the brand name genius bank. faced with weak growth prospect, the top bank [indiscernible] a chairman says the carrier is open for investment. the company is seeking to raise $250 million and declined to comment on who they are talking with, but a sale could be one option. the indian character has suffered three straight years of losses. shery: take a look at how futures are trading. we are seeing a lot of uncertainty. struggling for direction. we have seen the s&p 500 have low trading volume, real estate,

will we see more hawkish fed speak? take a look at how fx is trading at the moment. we have seen more weakness in the dollar, gearing up for remarks, the ossian q. week. suffice it to say, markets are standing on the sidelines. even oil prices are holding after it rallied, this of course as we have low trading but we are gearing up for >> happening, quantitative tightening, we could see more pressure. caution is the name of the game

as the fed continues the fight against inflation. we will speak to goldman sachs on the gas outlook and growing incentive. the australian finance services minister joins us to discuss investment opportunities. daybreak asia is next. this is bloomberg. ♪

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shery: welcome to daybreak asia. annabelle: counting down to the major market opens. haidi: investors ponder questions for how aggressive the fed can be.