>> good morning and welcome to

"daybreak: australia." annabelle: we are counting down to asia's major market open. kathleen: that evening. i'm kathleen hays. now the top stories this hour -- >> we still have some ways to go. and incoming data since our last meeting suggests the ultimate level of interest rates will be higher than previously expected. kathleen: that is fed chair jay powell opening a new phase in the fight against inflation, with smaller hikes along the way. haidi: the s&p 500, suffering its worst fed days since january of last year. kathleen: the u.s. listed chinese stocks rally on reopening hopes, even as beijing wreps up lockdowns, including around the plant that makes most of apple's latest iphones. i want to underscore what heidi just said. the worst day for the s&p

500 since january of 2021. make no mistake the fed remains on a hawkish track. stocks rallied as he started to read the policy statement today after the decision to raise the key rate by three quarters of a percent. he said hikes could come as soon as -- sorry, 50 basis point hikes could come as soon as september, a little bit of a slowdown. stocks selling off when he said the rates might have to go higher than expected. down 2.5% for the s&p, the nasdaq down 3.5%. make a cap tech -- mega cap techs, bearing the brunt. you can see now as for the s&p 500, a little bit of a bounce here, steady after that 2.5% drop. the nasdaq after falling so much, unchanged. the two-year yield, up 4.6% the last couple of days, it had been about 4.4%. the 10 year is up to 1.40%.

oil, very interesting today. tight supplies, that is in use -- that is the news. oil moving up about two dollars a barrel. you can see the cash quote under that level. a strong move despite the fact that jay powell made it very clear that he is going to tighten. it could hurt the economy. and that could hurt demand for commodities. annabelle: that's right. given what you said, it really is not surprising that we are looking like we are heading into a risk of session. new zealand, online, trading like this. we did just get pmi data out. the final ratings for october. we are still in contractionary territory. the composite at 49.8%. of course, this is all about the

reaction to the fed today. he did mention that move we had in the front end of the treasuries curve. we are seeing that in the short duration bond space and asia as well. let's take a look at what's happening in fx. how the dollar is trading against the g10 peers. we did sort of see that knee-jerk reaction, the drop lower for the dollar. a subsequent move higher as they flagged the peak for rates that is nowhere in sight, looking across the g10 space this morning. kathleen: let's get a little bit more deep into that. i think markets were expecting what they were going to do. 75 basis point hike, they are going to signal 50. they did signal a move down to 50 basis points as soon as the next meeting on december or maybe even after the first of the year. so that was as expected. but then he said it will take into account the cumulative tightening of monetary policy.

this is what caught market -- got markets rallying, too. there is the sign, lael brainard talking about having to be careful about what you are doing, that is what they are going to do, but then he went on to say that we have to keep hiking rates until we get sufficiently restrictive. let's listen to what else he said that make it clear -- that made it clear that thinking about a positive's not going to happen anytime soon. >> it is very premature to be thinking about pausing. when people hear lags, it is very premature in my view to think about or be talking about pausing our rate hike. we have a ways to go. our policy, we need ongoing rate hikes to get to that level. kathleen: could he have been any clearer? premature to talk about a pause. a ways to go. he said you've got a hot, overheated labor market, high inflation, more rate hikes are needed. there's probably going to be a higher terminal rate and they don't even know for sure where

they are going to stop. that's what it sounds like. haidi: speaking of premature, it was astounding that we continue to see this wave of optimism across chinese assets even though we have heard officials really refuting the idea that there is any kind of plan to exit covid zero. we saw another session of gains. this seems to be the pens of money sitting on the sidelines waiting for any indication that there is light at the end of the tunnel. this even as we saw china ordering the seven lockdown of the key area around foxconn technology. this is going to severely impact shipments in and out of the large iphone factory before a seasonally key period, ahead of the holidays. this covid outbreak is the latest disruption that we see for china's economy and the corporate world. at the same time, we did see those chinese assets and stocks extending the rally after another wave of unverified social media posts continuing to

support the hopes that the economy will reopen. kathleen: well, there's a lot you can see in the pictures, let's get more on the market reaction to the fed's rate hike with emily graffeo. we were talking before we came on set, you were noting what i just said. traders thought, we know was going to happen, no big deal. boy, were they surprised. >> it was a really volatile day. it seems like after the decision came out, we saw the rally, there was some optimism. traders hanging onto the word lags. the acknowledgment monetary policy works with a lag. after powell started speaking, that's when we saw stocks web sign. it really was not until he said that it was premature to think about pausing the rate hiking cycle did we see the movement in the bond market. stocks were going up and down. when he said that, i noticed the two year yield moved into positive territory. it was not doing much. it was falling, then we ended the day up about seven basis

points. that's really one stocks took the leg lower finishing the day down over 2% on the s&p. haidi: we had a strong year and seasonality element as well, but bfa, really throwing out some caution seeing u.s. stocks still have downside risk? emily: in talking with strategists today, we were saying that it was largely expected, that we could see a signal for a 50 basis point rate hike. now the narrative is, if we get smaller hikes but we get more of them, that's not exactly good for the equity market and we know that a lot of the rally that we saw in october, the 8% gain in the s&p 500 was powered by not only thinking about earnings, but powered by this optimism that we could get a fed pivot. we are really seeing that squashed today. it's up to the seasonals now to bring is higher. certainly the optimism about the fed slowing down is not here

quite yet. haidi: bloomberg's emily graffeo. let's get more on china now. they have declared the zone around the foxconn complex off-limits to combat a local covid outbreak. mark gurman joins us now. we know this has gone on for seven days to get this outbreak under control coming at a critical time for apple, for deliveries. >> they are banking on selling tons of the iphone 14, the iphone 14 pro. they really don't keep that many weeks of channel inventory. the iphone 14 line has not been plentiful if you go to an apple store. the shipment timelines are slightly delayed as well. they are not instant. it is not long-term the delays -- not long-term delays.

this comes at an opportune time for apple. they do have some foxconn locations another finalist emily partners for the iphone -- locations and partners for the iphone. i don't think this will be a major challenge for apple. i certainly think they may have expected something like this to happen. but we really won't know what this is going to shape out to be like until we see the shipment timelines if they get delayed or not as we approached closer to the real hard -- the real holiday season. kathleen: was going to be the challenge or opportunity for apple moving ahead? it was not exactly a booming green light for profits. what is the next big thing for apple? >> if you look at the apple earnings report, this was their fourth quarter report, in context, if you compare it to their peers, really it was pretty good. comparing apple against apple,

it was not the greatest. if you look at the current economy, they did pretty well. in terms of the next big thing for apple, it is a continued juicing of their install base over 1.8 million devices to generate more services revenue on top of their initial hardware revenue. there and -- the next big product would be the reality headset coming out next year. this is not going to be a big mover for the stock initially or a big revenue driver. they will be planting their flag into the mixed reality world, the vr world. coming out with vr focused products over the next decade, a significant source of revenue and the very long term -- in the very long term. kathleen: now let's get over to vonnie quinn with the first word headlines. vonnie: futures have tumbled -- moscow says it

received written guarantees from ukraine that the safe passage corridor will be used only for grain exports. the united nations welcomed russia's return and the help of turkish president erdogan. the u.s. on the netherlands are expected to hope a new round of talks this month on restricting china's access to advanced chip technologies. sources tell bloomberg washington has been pressuring the dutch government to hold sales of a wider range of to production machines to china. asml produces one-of-a-kind machines the u.s. needs to exert much more pressure on china. a team of pressure let us the gators have rated seoul police headquarters following the we can crowd crash that killed at least 156 people. other sites rated include the district police station near where the disaster happened. authorities also released records of frantic emergency calls showing police had almost four hours of warnings about the growing crowd crash. -- crush. if the appeals government and

leaders of the tigre region have agreed to renew a cease-fire raising hopes that an end to the two civil war may be in sight. representatives of the ethiopian government and the tigre people's liberation front signed the accord in the south african capital. a previous court agreed in march last at five months before fighting resumed. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪ haidi. haidi: still ahead, market reaction to the fed's latest hike. we will be discussing with icapital's anastasia amoroso later. this is bloomberg. ♪

>> today the fomc raise our policy interest rate by 75 basis points. my colleagues and i are strongly committed to bringing inflation back down to our 2% goal. if we don't get inflation under control, because we don't tighten enough, now we are in a situation where inflation will become entrenched. we have both the tools we need and resolve it will take to restore price stability on behalf of american families. it is very premature to be thinking about pausing.

when people hear lags, they think about pausing. we still have some ways to go. incoming data since our last meeting suggests the ultimate level of interest rates will be higher than previously expected. we have some ground left a cover here, and cover it, we will. kathleen: that's jerome powell opening a new phase, gaining control of inflation. a hard-fought battle. for analysis, let's bring in columbia university's patricia mosser. she spent over two decades at the federal bank of new york. it is interesting that you said part of the show the 50 basis point slow down was a surprise and you echoed something jay powell said, where they will stop, how long they will have to stay tight. and the thing jay powell and the press conference but at the front of that is how fast it will have to get there. how fast and how high and how long. what's the answer to that now? >> i think the how fast question

is a lot less relevant. i agree with the chair about that. they had to go fast. there were so far behind the curve for the last six months that going quickly was pretty much required. they are in a better spot now, although bluntly since the economy is only slowing down some, in the labor market is just shockingly tight, the question becomes, how high are they going to have to go? and by far the most important question is, how long? because if you want to think about economic pain, how long they have to keep financial conditions tight to slow the economy down, is a very key question. one of the reasons i think that is because inflation tends to come down much more slowly than it goes up. kathleen: that's a very good point.

the international monetary fund in a recent blog report said it could take three to four years for inflation to come down. was it important he went out of his way to tell the markets that pause, forget about it? there is not going to be one for a long time? >> they have the luxury of taking some more time to let the economy unfold, to see what the inflation trends are and not have to go so quickly just to play catch up. they do have positive long-term real interest rates now in the treasury market. which frankly they didn't have in july for example. so they have tightened financial conditions. the question is, have they tighten them enough? -- tightened them enough? haidi: we continue to see these projections, the chicago fed financial conditions index for example recently showing conditions are actually looser than you would assume for the

current settings. does that give you an indication they are not tight enough? >> yes, in my personal opinion, absolutely they are not tight enough. real long-term yields, five-year, 10 year, 1.5 to 2%, that is actually kind of normal. that is not tight. tight. 3% plus. -- tight is 3% plus. other measures are the price of risk. risky spreads have actually not widened since july. they have gone up but they have not moved a lot. simple things like duration, the u.s. 10 year treasury is zero still. so, so, the housing market -- sso, no, the housing market, the interest rates that you look at, long-term interest rates, the ones that really matter for consumption, investment, economic growth, they've got a ways to go.

haidi: this is largely supported by the fed's on modeling, seeming to suggest we will see a recession in the u.s. based on indicators. when you talk about is housing permits. housing market conditions. how does that sit with the state of the labor market at the moment? >> on one level, it is a timing issue. it is very traditional given the types of mortgages we have in the u.s. long-term fixed-rate mortgages. when interest rates go up, the housing market is always the first to go down. residential, real estate always goes first. it is also the first to recover on the others. the labor market is very much -- it is an affordability, i don't want to pay that high interest rate to buy a new house. the labor market tends to be in the middle or lagging. which is one of the problems, by the way.

the huge supply demand imbalance in the u.s. economy right now is in labor market. it tends to react with a little bit more of a lag than other parts. as a result, i believe that is a reason that the chair is being very cautious about the timing on how long they are going to have to stay tight. kathleen: what would you say to people who are saying based on what you just said that you are going to cause a recession at a time when your tools are not the best for, for example, shifting supply and demand and balance -- imbalances? i'm guessing you would argue back against that. we are hearing from capitol hill and prominent democrats that the fed are asking powell already to account for how many jobs he's going to destroy with this fed rate hiking program. >> what's interesting about this is the labor market is

shockingly strong. when he says there a very narrow window, it is basically will the economy may slow down in terms of economic growth, what you get is a readjustment in the labor market so that the number of actual jobs lost are smaller. that's the narrow window. it is a narrow one. i happen to believe there's going to be a recession. i'm going to hope that it's mild. let me be blunt. you cannot have maximum sustainable employment unless you have stable inflation. and we do not have stable inflation. unfortunately, this is a very ugly thing, one not a good trade off, and it would be great if the fed had tools to be some -- to do something abut the supply side, but they do not. there are tools to expand the supply side. fiscal policy tools,

not monetary policy tools. haidi: always wonderful to have you with us, columbia university's patricia mosser. you can get around above the stories you need to know in today's edition of "daybreak," you can find it at dayb. you can customize your settings so you only get news on the insights and assets that matter to you. this is bloomberg. ♪

haidi: bank of america, kicking off nearly $2 billion high-yield sale to finance nielsen holdings. they are now using a rear window of opportunity to sell the debt

to investors. welcome fell in late trade after giving a weaker forecast than expected due to the economic slowdown and covid lockdowns and china. qualcomm expects revenue will be 9.2 to 10 billion dollars in the fiscal first quarter. the average estimate was $12 billion. eroding even faster than expected. jumped after the ceo said the plane maker could generate $10 billion in cash annually by 2026. the price of the largest gain in the dow jones industrial average is executives laid out plans to return annual sales to about $100 billion. boeing sales last reached that level back in 2018. coming up next -- we will be talking about how investors should play in the latest fed rate outlook with icapital's anastasia amoroso.

u.s. stocks, really reacting not so positively to the higher peak path to slow messaging from fed chair powell. we are seeing sydney futures looking pretty dire. pretty natural that we will see asia stocks following u.s. stocks, much lower. even though the two regions have largely been out of sync in terms of their 30 day correlation, this does not seem to be the case today. the aussie dollar, holding steady. we are seeing new zealand trading modestly lower at this point. the chicago nikkei futures, suggesting a little bit of downside as well. more to come. this is bloomberg. ♪

>> we have to be open to the

idea that the fed may end up significantly higher than what i will call an expectation of something in the five-5.5 -- 5%, 5.5% next year. >> the fed does not want to see a replay of what we saw in july, it does not want to see premature financial condition easing on the signs of any fed pivot. >> they are going to keep the peak for quite some time until they see a move -- until this improvement -- until they see improvement. haidi: let's discuss this in a little bit more detail with annabel, what are you seeing from investors? annabelle: scott basically says that we really should not be

interpreting jay powell's presser is any indication we are going to be seeing a pivot from the central bank in the near future. because of that he says we can expect to see more damage in the markets. there has been a lot of anticipation over the last couple of weeks also building up in different markets, in equities, options markets. that there would be a global easing of central-bank policies in the months ahead, given that so much damage is already being caused by the rate hiking cycle. certainly that was played out in the u.s. session overnight. you were mentioning there at the top of the hour the context of this. we have not seen this market carnage post fed rate decision since 2020, brother 2021 -- -- rather, 2021. kathleen: it's like baseball

stats, fed stats and markets. [laughter] they seem to be signaling lower hikes and a slightly lower terminal rate. annabelle: that's right. this is what we are seeing in terms of the cumulative hike so far. already 400 basis points in 2022 . we are seeing more markets getting ready for more in the coming months ahead. traders are now pricing for further hikes, slightly lower than 125 basis point hikes. they are saying we are going to have 50 basis point hikes in december and also following the move in january, so that is a little bit higher than what the consensus had been. some investors were expecting 25 basis points instead entering the new year. kathleen: let's talk market reaction to what annabelle just told us and more with i

capital's chief investment strategist, anastasia amoroso. typically on a day like this. traders and investors want into it -- went into it, the damping down, they made 250 in december or january but jay powell made it so clear they are going to have to move rates higher probably and they don't know how high. >> that's right. this was a big disappointment for the markets and a big reality check for the markets. the beginning of the fed meeting was misleading. initially the markets got what they wanted. which is it seems like we are going to slow the path of rating -- path of rate increases. markets reacted to that. but then pie will -- but then powell says we have was to go, which unsettled the markets. we are trying to triangulate what the terminal rate is going

to be. is it really 5%? it was 4.5 before -- it was 4.5% before. he said the september dots may need to be revised higher in december. the market was left guessing where the terminal rate is, at what point the fed is going to stop. the hope going into it is that we can maybe start to see the beginning of the end of the tightening cycle, we cannot draw that conclusion right now. it is a very uncomfortable place. kathleen: he said in overheated labor market, not just strong, and the inflation that has stayed really high, therefore pushing higher as much as you need to could mean recession. that is something you are focused on your call for equities this year. >> you will notice he did not deny there is a real possibility of a recession. nobody was paying attention to the data -- nobody who was paying attention to the data can deny that.

you look at the regular yield curve, that's been inverted for quite some time. you look at the strength in wages, that is a contrarian recession indicator. you put all that together, then based on economic indicators, the probability of recession is around 50%. that is a real probability. historically it is about 18%. the markets are discounting some percent of that but not 100%. we really have to either have the fed pivot or we have to have enough of discounting of a recession and at the moment we don't have either. what we do have is potentially 5% interest rates, which is a huge hurdle rate for any investment overcome. you have to tell me that this investment can beat a 5% return on cash in order to be interesting. what investment can say that? haidi: i like that you said we

are in a very uncomfortable space right now. uncomfortable can still be lucrative, just more challenging. what are some of the interesting strategies for you? >> there's a few things investors can do. i think we need to respect we are a best case scenario. you don't buy equities when you are trading towards the top of the range, around 4000, 4100. you might want to keep it there and take some gains but you don't buy equities there. what do you sell is just as important as what you buy or stick with. what you use the rally's to sell is things that are not likely to work in the next leg of the business cycle. i'm talking about some of the leaders that i think are broken or have been broken at the moment. that is small, unprofitable growth names. also some of the big tech names. they've benefited so much during the pandemic. but the cyclical tailwinds and the secular tailwinds have turned the other way. i would be thinking about what broken leaders you want to sell. as we pulled back, as we are

doing now, i do think that is a level of support that is appropriate for a recessionary economic environment. the question becomes, what do you want to buy? things that potentially can beat a rate of 4%, those are some of the dividend paying names and the energy trade for example is right there as well. you want to be buying the names but doing that toward 3600. volatility is giving opportunities at this moment as well. perhaps you have some tech names that are not the unprofitable kind. maybe you do want to keep those. but why not monetize some of the elevated volatility we have today and sell some calls on them? or by some put options for a buffer or do that in a structured solution? these are the types of investment opportunities i think investors have to look at and be a little bit more creative. it is structuring different types of payoffs. haidi: the debate over the

broader recession is looming, but clearly we are starting to see that in the first back to back earnings declines for the s&p 500 excluding energy as you pointed out since back in 2020. do you see a bottom for this? if you take a look at energy, it's is going to be a sector that continues to withstand the pressures from the slowdown? i kathleen: think we still have to discount earnings further broadly for the slow down that is ongoing. the reality is a lot of the companies are facing margin pressure right now. in order to deal with the pressure, they will have to slow down hiring and resort to layoffs. that is going to have knock on effects on the supply chain. the fact that big tech names will be spending less, that is going to adversely impact the supply chain. i do think the slow down as further going to continue to work its way through the earnings downgrades. we have not seen the bottom of that, i would say.

i think that is still to shake out. kathleen: what about fixed income? what about any kind of bonds you think would be a goodbye right now -- good buy right now? >> against short duration, cash equivalents offer attractive yield. but that's not going to overcome the -- the over 8% headline inflation. things that you can look towards are now high-yield and private credit bonds. if you look at leverage loans and high-yield and private credit, all of those have converged around 10 or 11%. that actually can outpace inflation and that does be cash. -- beat cash. the caution i would have is leverage loans. these companies are going to shoulder the burden of higher rates. so i think their debt ratios have been elevated. costs are going to be elevated. i would avoid leverage loans.

i would take whatever profit were little losses you have been those and look to high-yield, private credit. and private credit, you get the same floating rate structure but not subject to the same market dislocations you might be in leverage loans. kathleen: there's always someplace to take your money. thank you so much, icapital's anastasia amoroso. haidi: we have some breaking news crossing the bloomberg -- we are expecting the numbers to look pretty grim on loan growth and wealthy to be the factors to look out for, dbs coming in at 2.24 billion dollars. seeing that total income coming in at 4.54 billion dollars. taking a look at the number for the third quarter, 1.9%, higher than the 1.73% coming from estimates. beating estimates.

the ratio staying at about 1.2%. singapore dollars as well, that margin boost alone is really feeling that profit growth that we saw. we had the bloomberg economics intelligence expecting profit growth raising 10% year on year on an adjusted basis. we are also watching for any update when it comes to the acquisition of the citi retail banking business awaiting regulatory approval. we are seeing stocks of about 5.5% -- up about 5.5%. it's been in outperformer. -- an outperformer. watching in particular when it gets divided out. given the amount of volatility we have seen. dbs, also commenting on where they see the fed going, they are net interest margin

expectations, peaking at four and 3/10 of one percent. the plat form for loans is healthy. the tail risk scenario high inflation and high rates they are seeing is playing out at the moment. coming up -- we have the biggest maker of smartphone processors giving a weaker outlook than expected. we get an update on qualcomm, next. this is bloomberg. ♪

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vonnie: fed chair jerome powell has opened a new phase in the campaign to regain control of inflation, saying u.s. interest rates will go higher than earlier projected. but the path may involve smaller hikes. powell said there is still some ways to go before policy is restrictive enough. >> the last two press conferences, i said it would become appropriate to slow the pace of increases. that time is coming and it may, soon as the next meeting or the one after that. no decision has been made. vonnie: china's national health commission has called for a vigilance to prevent an out-of-control pandemic and

adhere to the general policy of covid zero. among the first official remarks since claims they had formed a committee to phase out the policy. the u.s. says it will work with allies to remove iran from the yuan commission of the status of women -- seeking to further punish the regime over its crackdown on protests following the death of a woman arrested for allegedly flouting strict islamic dress codes. china and pakistan have agreed to launch a high-speed rail project that could cost almost $10 billion. this comes as beijing moves to slow learner -- slow lending due to concerns. the track will carry high-speed trains. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪

kathleen: thank you. qualcomm shares plunging a neck strain -- plunging and extended trading after a weaker forecast unexpected. they blamed the covid lockdowns and china, su keenan joins us with more. that is a pretty big difference in what they were expecting. $2 billion less in revenue in the current quarter. >> also slashing the forecast for smartphone production. it is because smartphone processors contain qualcomm literally around the globe that this is important commentary on this smartphone market feeding faster than expect that as well. you see shares down almost 7% after hours, they were down as much as 8.5% at one point. the company, planning for a continued decline in the smartphone market and they say fiscal first quarter revenue will be 9.2 billion and $10 billion. at least $2 billion more.

$12 billion. qualcomm said it is coping with the slow down partly through a hiring freeze, the cfo says hiring is frozen as of now and they will take more cost cutting if needed, all those chips may take two quarters to clear. broad-based weakening across all tiers and regions, three months ago qualcomm slashed projections for smartphone shipments. now it looks like the picture is even more bleak. the phone market will contract and the low double-digit percentage range. excess inventory will continue to be a driver through the fiscal first quarter but they believe that will be the bottom of the inventory glide. haidi: are there any bright spots? su: a few, the company had expected apple to start using its own homegrown modems in the

iphones next year. in other words replacing the qualcomm 5g modems with their own parts. that is no longer going to happen next year. that is a big piece of positive news. qualcomm's fiscal fourth-quarter venue came in at 11.4 billion, in line with estimates. profit also matched. so they were in line. they said the products are not being impacted by china restrictions. importantly, they see china business expanding, despite new rules. they expect 2023 op-ex to be more than 2022 -- lower than 2022. the ceo said if you take the apple updates, "every premium tier device has premium qualcomm content on it," so they have that good relationship with apple in terms of the actual product being used. at least for the foreseeable future. they say x out the current environment, they see the

opportunities longer-term remaining intact. it is the near term where the headwinds are particularly strong. haidi: su keenan with the latest on qualcomm. regarding north korea, we have seen this morning another unidentified ballistic missile being fired towards the sea, confirmed by the korean joint chief of staff, saying this is happened, following the biggest barrage of missiles ever under kim jong-un, yesterday on wednesday, 23 of these missiles -- at least 23 missiles were fired including diverse ballistic missile to fly over's north korea -- over south korea. triggering an air raid alert east of the coast. we heard conversations are being held with the u.s., with antony blinken and south korea and the u.s. sides, holding discussions. this comes about a day or two days after pyongyang threatened

to take powerful measures of the u.s. does not hold the military drills underway with partners including south korea. let's get back to the markets now. the topic of twitter and what it looks like going forward. cathie wood says elon musk? subscription add model for twitter is a very smart move. she told us she thinks a social network could make a play in the digital wallets base. >> elon musk is our renaissance man, our thomas edison, perhaps. if you go back and look at how many projects these innovators were working on, you would be astonished, how did they do that? there are such people out there. elon surrounds himself with great business people. and engineers who want to work for him. he is solving the most challenging problems of the day, and they want to be a part of that. under his leadership. remember, he started in the payments industry. so we could actually see twitter

-- we just started a public/private crossover fund -- twitter is in that fund, because we do believe that twitter, elon certainly believes in vertical integration, he has a payments experience, and jack dorsey seemed to get along very well and were talking quite a bit as we learned from the documents i came out over the court cases. so i think even twitter could make a run at digital wallet. not just for financial services, but for commerce. so that is one. you will remember -- do you remember vine? my son, i thought he was going to make movies. that was a precursor to tiktok. there is dna within twitter still i believe that could introduce something like that. you never know.

one of my first experiences as an equity analyst was a news papers -- was in newspapers. believe it or not, they were the rising stars of that day. this subscription advertising model is a very smart move, if he goes in that direction. the verification, that little check is very important to people and could help clean up the platform considerably. kathleen: there's plenty more ahead on "daybreak." this is bloomberg. ♪

kathleen: maersk has cut its forecast for the market while flogging recessions in europe and the u.s.. the ceo told us russia's war in ukraine and the resulting energy crisis are hitting consumer confidence and demand. maersk controls 1/6 of the global container trade and is coming off surging profits. >> our volumes are down 7% for the first time in the year compared to last year. due to the slowing economy, the war in europe, and what that has done to consumer confidence, all in all, global trade is moving

backwards this year. kathleen: several crypto etf's in australia are said to be delisted, becoming the latest casualties of this year's digital asset route. cosmos asset management applied to cboe australia to revoke the quotations on its funds from the exchange. in april sydney based cosmos became the first firm to introduce crypto etf's and australia -- in australia. that is wrapping it up for "daybreak: australia." "daybreak: asia" is next. this is bloomberg. ♪