>> good morning and welcome to daybreak australia. we counting down to asia's major market open. shery: the top stories this hour. u.s. stocks rally's solid corporate earnings boost investor sentiment, the s&p 500 opposing the first advance in two weeks. paul: netflix surging on strong results after 2.4 billion new subscribers in the last quarter. shery: the bank of england is starting the light bond sales after a record selloff that sparked intervention. u.s. futures extending gains as as the s&p 500 is rebounding. this is finishing off a session high, we tell you why because we have a little bit of pressure from the technology side. treasuries are unchanged today,

10-year yield managed to stay above the 4% level, a two year yield pressured towards the 440 level. we are following wti because we have heard reports we could see some more releases from the u.s. reserves. oil was under pressure today but it is gaining ground in the asian session. we had dated today. when it came to firebrick production we did see gains 23rd consecutive month. apple at one point turning negative today, given reports that it was cutting back production of the iphone 14 plus. we are watching goldman jump in the new york session, the upside in the after hours as well. this is after we saw goldman come up with a positive learning. we are following netflix, watch the surge of 14%, going in subscriber growth, topping

estimates. we will be following in the after our session. annabelle: we are watching in asia whether we do replicate the back-to-back rally. futures may not be the case, that is the last closed on the contract, new zealand already is online, it is flat, beyond earnings there are other factors that are helping to improve risk sentiment. you have chain evaluations and you are seeing in the u.k. as well because we are continuing to see in the options of market at least the longer term outlook for the pound is improving with a physical policy pivot we will have more on the boe's actions. have we seen the bottom for the u.s. stocks? actually, during the previous selloff periods, this chart looking at the amount of stocks in the s&p 500 that are trading

in bear market territory. we are around the 70% level. in previous selloff super in the 50% mark and this is the covid era. the.com era at the start out of the great financial crisis, that is around the 80% mark. do we need to see more pain for equities if we are to see the true bottom? paul: we may have an answer for that question from the monthly global fund managers survey which screens capitulation. investor capitulation, macro capitulation in that survey. some policy put capitulation as well -- the some policy capitulation as well. that would be when the respondents to the survey said the fed was pivoting away from tightening, 83% c global profits worsening over the next 12 months.

record number to see it economy and 79% c inflation falling -- record number in the economy and 79% see inflation falling. shery: that may be the next hurdle for the market, we are getting reports this week out of tesla, american airlines, whirlpool and we have seen so far that they have been battered this year and this has steadily cut down their estimates for third quarter profits. our forecast is we will see earnings through 4% year on year, the compares to the 45% jump that was expected in the beginning of this year. these are the stocks we are watching and we have been trying to get some more clarity when it comes to consumption here in the u.s.. you have more of the picture coming from bank earnings already, let us give him more on the big earnings today with your

finals reporter and bloomberg tv's ed ludlow. we had goldman sachs again coming out with some positive results and it was a trading side of things that helped. >> traders coming to the rescue, these numbers in technical investment banking, from m&a, the has pulled back significantly. what goldman showed today is that when there is volatility and uncertainty, that is good for trading. specifically, with debt traders, that across most of the banks was something that outperformed analyst expectations. it boosted results and we are seeing that today with goldman. although they are turning away from their consumer business and they are showing signs of weakness in other parts, they are leaning into what they do best. trading, investment banking, and investors are cheering them on

for the results. paul: broadly, what have those three q results show us? >> that was the other interesting headline. it dependent on which bank and which ceo you are hearing from yesterday. one came on and talk about the strength of the consumer and this was actually something that most banks were showing. if you look at the result they were all pointing to the fact that you are not seeing signs of stress. even if you look really deep, you have a significant balances are up, the delinquencies are down and if you are looking to see how spending, although it is slowing a bit, consumers are still out there, they are spending on discretionary items. they are traveling and still out there and until you see a pullback which was not shown in three q, the ceos are saying it is something we are not concerned about that this moment

-- at this moment. if we see pullbacks and job cuts , that could impact consumer spending and sentiment as we look at the end of the year. shery: we could be watching television and it seems when it comes to screaming and -- streaming and netflix, people were spending on it. >> a nice october surprise. they hit a wall on growth. that has not proved to be the case, the top line, the ongoing concern when it comes to technology, particularly those with a global footprint about the strength of the dollar. it has not had much impact now but it does look like they will be going into the fourth quarter. held up well. they seem to have done well. it seems to be successful. what the street is asking is

what is the future bearing in mind we are moving towards and supported models. paul: the earnings call is getting underway. the question was about the ad supported model. what are you expecting to hear? >> it will add members, that is the first take away from the call. going into this earnings, it was largely bullish on this development because six dollars or seven dollars is competitively priced but it is priced in such a way that even if you lose some people who are not into an ad supported model, i hate watching ads. police were adding enough members of that overall volumes grow. i think you want regularity to come from this call in terms of the volume of people that they feel they can add under the adhere supported number -- ad tier supported number. markets in asia, where netflix

has made progress with local language content or the effect on the stronger dollar of the currency in the base countries. shery: was gray man worth it? >> yes! shery: i wanted to see rings of power but that is amazon. >> i love the tv adoption of resident evil on netflix. shery: we are here with the latest on what to watch on netflix and earnings as well. the bank of england will start a bond sale from november 1 but it is initially excluding the long dated debt of the recent market turmoil -- an elongated debt the recent market turmoil. we are now going in a matter of days from huge tax cuts to

austerity. >> there is a possibility on a fiscal side you are actually going to see as a government result when full taxes both on the energy sector and on the bank sector. that is something that is ruled out when liz truss was in leadership. it appears to not be finished yet. what i see from the bank of england telling us is the bank is still thinking and has a cause to regain where roughly where it was hoping to be before the gilt market and voted. it sends a positive signal to the market that they believe they can do it. it may conceivably lead the bank

of -- leave the bank of england with a real, credible currency in monetary policy if they can pull this off. this is not a u-turn. in british economics, it is a sensible swerve, a sensible adaptation to circumstances and i think people will treat it that way. paul: what is the future for liz truss? even the party membership who put her in the job are having buyer's remorse. it will require quite a bit of clinical gymnastics. >> the conservative party is good political gymnastics. that is not necessarily mean that it cannot happen. i am dubious with the status quo that is jeremy hunt, the new chancellor behaves basically like the ceo of the british government and liz truss is an

ever less used figurehead or siphon. that may get them through the crisis, the real crisis period of people not believing british fiscal policy. it is pretty hard to see the party limping all of the way until the next election. it will not be held for another two years yet in that format. i would think the most likely scenario is the mp's find a way to not put this to the other parties in the country. shery: let me veer towards the fed, we have the minneapolis fed saying that the gas after the cycle is we are back to low inflation trends, he can see the fed raining until 2023. a one thing that stood out to me that the fed does not set policy

for the world, the domestic. i was having an interesting conversation this morning with my professor. his whole thesis was that we should actually be looking at the fed to have some responsibility given how global the impact of his actions are. given what the fed has decided, what are your thoughts so far? >> the fed has to act in the best interest of americans. it is less clear that involves in making sure that there are not financial disasters of one kind or another elsewhere in the world. it is everyone. you have seen offices swap lines to various countries during the worst of the crisis in 2008 which was of critical importance in the warning the -- thwarting

the market crisis back there. one of the arguments in british politics is this is the fed's fault. there were errors made by the british government but it was a necessary condition that the fed was doing what it was doing and reducing everyone else's room for maneuver. kashkari has been the most hawkish member of the fed to date. that strikes me as a startling hint at the pivot is not that far off. that is my initial reaction is that that is quite a startling dovish sign. the most clearly dovish signal to date. paul: let us get over to vonnie quinn with the first word headlines. >> an new emergency package to

use the eu joint purchasing power as leverage in negotiations with local gas suppliers enabling joint purchases in cases of shortages. there are concerns over security of supply. >> as we make every effort to keep prices predictable and gas flowing to europe, we cannot exclude a supply crisis and the shortage of gas. i demand -- a demand reduction is key. >> xi jinping was seen on a beijing bridge and -- a pro-democracy group called the voice of this has created calls for the president's removal. north korea has hired artillery

-- part artillery shells into the boundaries. officials say the north fired around 250 rounds late tuesday. on monday as lou correa began 12 days of annual military exercises which included an specified number of u.s. troops. north korea has increased weapons tests in recent weeks in response to what he calls the dangerous military drills. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. paul: netflix is going again, posting better-than-expected third-quarter earnings. the analysis of those numbers later on with a guest. eva ados expects u.s. markets to fare better than most peers and is concerned about recession. this is bloomberg. ♪

>> the global economy faces significant headwinds. inflation remains high. a central banks are raising interest rates at a pace not seen in decades. equity markets are will off the recent highs. geopolitical instability and energy sharks are ongoing concerns. gdp growth expectations are declining.

shery: speaking about the global economy. our next guest expects u.s. markets to fare better than most. she is concerned about a recession. let us bring in eva ados chief investment strategist at her company. we are expecting a little bit of choppiness but when do you see a market bottom when it comes to risk assets? eva: if you are above that, i am bullish on the u.s. markets. it is hard to find the bottom. i expect to see the market end higher. we may see a christmas rally. i believe by then we will see the fed getting inflation under control. we have seen a huge delay on that. it will eventually happen. we expect inflation to drop next

year. as the markets drop by expect inflation to rise, we expect to see that in reverse and we expect to see necessary technology and health care to benefit the most as they were the ones hit the hardest until now. shery: you go into energy and commodities given the open class actions recently? eva: it is not a bad place to be but it is close to peking. -- peaking. before that we would not add to that exposure. we have started increasing our wage for the short-term. we are not expecting to stay there for a long time. we are about seeing them as entry points and that will depend on the future fomc meetings. we saw the markets rise, that

was because we thought that inflation was getting under control. paul: who are looking to deploy cash when opportunities arise. where do you suspect you will see those opportunities cropping up? eva: we are seeing netflix after hours, above 10%. we are seeing surgical and other necessary health care companies are up 11%. we see more of these. the market has realized that in volatile times it is better to act to stable securities and when they are necessary to people, that is even better. netflix will do very well all in a slowdown because people will not get outside of that -- outside much. we saw in covid-19 pandemic. again, it is hard to find the

bottom are investors should be cautious about rallies. -- and investors should be cautious about rallies. paul: the market did not seem to mind, you have a sense that all of the worst-case scenarios are priced in now? eva: a lot of it is priced in. we are down 30% on the nasdaq. that is pricing in a recession and if we did not end up having a recession, that is bullish for the markets. i think a lot of it is part of it. it is important to note that the previous quarter and the one before, there were modest expectations. they were being more conservative in volatile periods. it is easier to beat market expectations than not. we expect to maintain the 70% rate. we expect to see more and more companies be more concerned

about their future expectations. paul: that is eva ados. thank you so much for joining us today. you can get a write up -- a round up of the stories of the day. go to dayb and customize your settings so that you getting the news that you care about. this is bloomberg. ♪

shery: here is a quick check of the headlines. credit suisse is working with the world bank of canada and morgan stanley on the potential capital increase in case the bank needs to shore up its balance sheet and raise funds for restructuring. it could come after the bank's former restructuring announcement.

johnson & johnson posted higher sales and earnings for the third quarter even as the stronger u.s. dollar and rising labor costs dented the outlook. shares slipped as they cut for your sales and adjusted guidance. johnson & johnson is planning to split off its consumer business while trying to sustain growth in the larger drugs and medical device businesses. renault is looking to reduce its stake in nissan. a source says both sides are sent a nonbinding agreement, they would reduce ownership of nissan to 15%. as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts.

saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. paul: let us take a look at how comcast business. powering possibilities. ™

netflix is trading after the results we saw earlier. shares are up nearly 14% in 14%. it is spring in bob, a strong set of numbers from netflix. -- let us bring in bob, a strong set of numbers from netflix a. how much uptake do you expect and how much revenue could it bring in? bob: i think we are going to see a lot of interest than actual involvement. it is one of the things that will take a couple of orders to ramp up. there is no question that the timing is looking percent -- prescient. here is the lower cost option. a number of people say maybe i need to cut back on my netflix and they can go for the lower cost option.

that will give them a reason to continue going. i think it is a great revenue opportunity, early signs of stories i have seen is that there is a great deal of interest in reaching the audience. as far as advertisers are concerned. it is very interesting that netflix has immediately decided to move away from the paid subscriber numbers. clearly the market is happy with where they are. when it shows is that they can continue the momentum they have had in the past, everything is not all negative. it is a headspace business. you had a stranger things four, a couple of things that hit this quarter. it is hard to always maintain that. you have to have the newest hits. netflix seems to have figured that out. they are also making good and important clever moves in terms of how they are going to do with the issue of people sharing accounts that i think will be

relevant. i think it is going to become a pretty respectable revenue source. realistically it is probably at least a year before we see significant bumps in that. i think a lot of people are going to try it initially and see how it is. people are used to advertising on their tv programs. the question of how it actually is will actually influence how much acceptance there is. paul: i want to turn to the point about content. you mentioned subscriber numbers. netflix will no longer give forecasts for subscriber growth. how you think the market will take that? bob: they know that they are near a peak. they have so many subscribers it will be harder and harder to continue to put out big numbers in terms of subscriber number growth. they have so many people. there are plenty of places to grow in the asian pacific,

growing markets, one of the fastest growing regions. on a global basis i think they recognize they have some challenges in maintaining that. is it a to play the game of this is where the subscriber number is, they will switch to a pure revenue number. it is not a bad argument to be made. they want to drive the subscriber numbers as long as they could. they want to get it back up they have done that. they feel like we can move on to a revenue story. with this new opportunity, there have been moments of them doing a cloud-based gaming service as well. that becomes an revenue opportunity. . -- a revenue opportunity. . it is surprising that it this quickly. shery: we were going through the numbers with ed ludlow earlier and he was telling us how excited he was with raymond on netflix. i do not get into it, i like

rings of power on amazon. i have been addicted to house of dragons. that takes me to the whole streaming wars idea. how well netflix doing right now? bob: they are doing very well. the competition has gotten stronger because other people are spending tons of money to create very impressive content. netflix does have his finger on the pulse of a number of people's desires and interests in terms of content. again, it is going to be a peaks and valleys to some degree based on how good the latest hits they have are. they have a couple of big series that continue to draw in people, stranger things, cobra kai happens to be a show that my family and i like. shery: i could not get through it! [laughter] bob: everybody has different tastes and netflix is leveraging

the ability is being able to recognize a people are watching out what things we can recommend to them based on that and keep them connected and watching the station and programs. that is what they are doing, leveraging a lot of ai intelligence behind the scenes to drive these algorithms. it will keep doing that and the other streaming services are figuring those things out as well. i think it is something that does take some time to evolve and mature. shery: international programming has been so important for netflix. going on a tangent as well, what about the currency fluctuation concerns given the strength of the u.s. dollar and how much more appealing it can be overseas when things get more expensive? bob: it is a great point. we have seen if you look at the numbers of the revenue, average revenue per subscriber in some regions, it did go down a bit. that is because of the pricing concerns and what is happening there.

again, netflix has been very good at developing a lot of region specific content. again, tapping into the interests of people have in various parts of the world. as i said in the beginning, it is like the good old days of rock 'n' roll. you need to have a hit and a new hit all of the time. a lot of companies have learned that is hard to do. you can have one or two but they are the one hit wonder what flints of the music world. it is hard to maintain that. there will be a lot of dollars spent to make sure you have the right mix of content and how that deliver to the right people. paul: netflix angle their call saying that the best way to prevent turn is to keep people entertained. there is an issue of password sharing and account sharing. how does netflix crackdown on this one without alienating customers? bob: this new -- i am spacing on

the name. they have a clever name for a new service that they will offer that is a profile sharing thing. the idea is people, a lot of people share accounts or many parents share accounts. i have a daughter who moved away, her account will not have the things she has watched. they can take what you have watched and your interests and rang over to a new account. that way you can maintain the benefits of the algorithms that are ringing on the content you may like as you bring it to a new account. they have tested this in latin america and it is actually a benefit to the end user and to netflix. it gives them a way i don't an incentive to drive people to get their own accounts and not lose some of the things they have had in the previous year account -- it gives them a way to drive

people to their own accounts and not lose some of the things they had in the previous account. as of user can appreciate it -- the end user cannot appreciate it. paul: take a look at the share price, it is up 64% from its 2021 high. could netflix call back to where it was during the peak of the pandemic? how long will it take to get there? bob: it will be tough. the pandemic was something that many of us will not have to experience any of us will experience -- will not have to experience ever again. netflix has been a lifesaver. people became so utterly dependent upon it. it gave them something to do and it cap their minds off of other

things. that is why we saw all of these other streaming services rise very strongly during the pandemic. i think that will be hard to replicate i think it will be a more modest growth and the question is how can netflix continue to differentiate itself versus its competitors? disney is a tough one. so is paramount and other services around the world as well. i do not know if they ever get back quite to that level but i think we will see them grow incrementally over time. it will be a little bit less dynamic than what we have seen in the past. shery: it is always good catching up with you around the earnings season. that is the technalysis research president on how to read netflix earnings. more signs on how u.s. consumers are holding up in the days ahead. let us bring in annabelle. so far, when it came to earnings, even netflix has a scriber growth, the u.s. consumer is holding up.

what are we expecting in the next few weeks? annabelle: we have quite a few more companies reporting in the days ahead, the likes of tess lee, airlines, coming through and it is not looking that great in the lead up even though we have seen the u.s. consumer looking pretty robust. when you look at where analysts are looking, we have seen cuts across the consumer discretionary sector. a jump in profits and that is where we are now. we are looking way percent move to the upside. why retail demand is so important, we know this because it does give us a pulse check on how much consumers actually are withstanding inflation, interest rate hikes, as well as whether or not they can withstand the longer-term or all of the concerns around recession have legitimate concern.

there is a big correlation between the consumer discretionary sector and the broader performance of the s&p 500 index. we have had the rise of only three sectors in 2022, bigger losses in the consumer discretionary in communication services, i.t., and real estate. paul: the performance of bond funds? annabelle: th is a big criticism coming throug overturd strategy back in the 1980's and revolutionized the bond market and he is coming in with a big criticism here of the performance of the total return strategy. he says the funds bearing this name are not living up to their magic which is to provide a consistent mask mandate of providing consistent and attractive returns across all market cycles. this is also the fund of the

same strategy, comparing that to where we see the benchmark which is the bloomberg target index. -- aggregate index. funds are basically failing to live up to the mandate. they are chasing index plus performance. because of that it really is a case of them losing their way or vision. we have funds for the pension plans physically being misled. that is his view although we should say that we did reach out to companies and they declined to comment. shery: those are morning call today. plenty more to come on daybreak australia. this is bloomberg. ♪

>> the bank of england will begin its delayed bonus sales early next month but it will exclude the long dated debt. the boe had been on the defensive for weeks after fallout from massive unfunded tax cuts, that force them to start by again to avoid a sale of pension funds. the biden administration is

releasing another 10 billion barrels of oil from the stockpile. this is to prevent gas prices from climbing further. 30 tells to replenish group reserves. the president is due to speak on gasoline prices in the next hour . the attack on a chinese man who was protesting xi jinping. he was inside of a gated area and was assaulted. the consul general was involved in the incident. ukraine says russia carried out 190 strikes with rockets and several drones over the past 10 days, killing more than 70 people. nearly one third of the country's power stations were destroyed in the strikes. the main grid operator has managed to keep electricity supply too much of the country by shifting our loads on the

transmission system. -- shifting the energy loads on the transmission systems. this is bloomberg. shery: take a look at how asian markets are trading at the moment. futures are trading a little bit mixed, when it comes to kiwi stocks we are seeing gains for a second session and this of course is following the latest new zealand inflation report coming out earlier this week. futures are down a little bit, we saw the all the rising in the previous session. we are trying to digest the rba minutes. we are watching the aussie holding steady. when it comes to the nikkei futures, down .3% after we saw the nikkei was rising in the last session. we have seen the tailwind from wall street.

it is relatively high given the early training session across asia right now. also given the weakness of the japanese yen. narrow trading around 1990 levels against the u.s. dollar. rolls-royce has completed the first step towards fulfilling his promise to sell only electric vehicles by 2030. the ceo spoke to bloomberg about the transformation. >> it is a prophecy fulfilled. our finding father said in 1900 he foresees a great future for electric cars once charging is fixed and is available. now we are here, filling his prophecy and we are very excited and our clients are. it is the very first time that you can acquire in the super luxury segment an electric cart. it is the first and for that

reason we are also immensely proud we are the first. it is a true rolls-royce. electric rolls-royce. that is very important for our clients. >> what is next for rolls-royce in terms of electrification? >> we talk about all of the next steps. one problem is the clear -- our goal is to be fully electrified. we will be bringing every new rolls-royce is fully electrified . we are building combustion engine cars and in the beginning of 2030. >> let us talk about the profitability that is going to be with you when you make this full move to electrification. you make a lot of money off of building traditional engine cars, your margins have been phenomenal.

are you going to be able to match those margins when you go all electric? >> yes because that was always on my mind when we had the plan to go electric. that was not a plan that was born a year ago. we basically came into it with the experiment over 10 years ago with the prototype of an electric phantom. because client feedback was always fabulous. it fits the brand great. we also knew that one day we would go completely electric and for that reason contribution margins per car are untouched. they are as strong as they used to be. no worries, rolls-royce will stay a profitable company. paul: that was the rolls-royce ceo. we are taking a look at the day ahead for new and australia. -- new zealand and australia.

gic is looking to invest more in australia. we get the september it was back leaning index -- wespac index. get in-depth analysis from the daybreak team, you can listen in through bloombergradio.com. plenty more head. stay with us. ♪

paul: let us get a quick check on the business flash headlines. lafarge will pay funds after admitting it paid the of islamic state to keep a cement factory running. -- a cement company will pay funds after admitting it paid islamic state to keep a cement factory running. problems related to the engine continue in hyundai, 44% of estimated operating profits for the quarter. hyundai's earnings report is due

on the 24th. this income has driven goldman sachs. fixed income leading gains, equity and debt revenue collapsed along with the merger. shery: we are getting an interesting report when it comes to mckenzie not releasing its annual report when it comes to the data from 4 million employees of more than 300 companies. the women in leadership roles or quitting at a faster rate than ever. we are talking about companies in the u.s. and canada having a crack -- tracking the state of female workers great women are leaving companies at high rates. female employees remain less likely to get promoted for every woman at the director level who

gets promoted, two female directors are choosing to leave the company. her saying that even turning -- we are seeing that even during sales results. paul: concerning statistics. the data made for interesting reading. look at some of the quotes and antidotes from the women interviewed, they are saying that life is short, why be somewhere that is not working out? one firm cannot give you need for the rest of your career. on the upside we are firmly up the hierarchy of needs. let us look at the stocks as trades open in australia. northern star and whitehaven and beach energy, those companies release their first quarter production in their reports. we get going at the top of the

hour in australia. futures are pointing to a flat open at the moment. shery: we are looking for the open in the australian and japanese and south korean markets as we see u.s. stocks gaining .7%. we have the continued rebound in the new york session. we finished off of session highs with this as we continue to watch the equity space. a little bit of the pessimism fading when it comes to the earnings season bringing that risk on sentiment back on. this is bloomberg.

millions have made the switch from the big three to the best kept secret in wireless: xfinity mobile. that means millions are saving hundreds a year with the fastest mobile service. and now, introducing, the best price for two lines of unlimited. just $30 per line. there are millions of happy campers out there. and this is the perfect time to join them... add a line to your existing plan, or see for yourself how easy it is to save by talking to our helpful switch squad at your local xfinity store today.