>> you are watching daybreak

asia coming to you live from new york and sydney. >> australia has just come online. a cautious opening i had for asia. top fed and ecb officials warning the inflation battle has not yet been won. netflix has smashed subscriber estimates. the lunar new year holiday in china could become a super-spreader event. >> we are seeing a little bit of a rebound after three sessions of losses in new york. we had more hawkish fed speak, showing no hence we are going to get to a pivot anytime soon. we are in restrictive territory

already so perhaps merck is taking a little bit of a breather there. we are seeing the upside continue. take a look at bond yields. we have seen the 10 year yield rising slightly. we are also watching for some mixed they tell we are getting here in the united states including that new u.s. home construction fell for the fourth consecutive month. job listings falling to the lowest since september. investors scratching their head as to where fed policy goes from here. oil continues to gain ground. inventories rising in the united states, but a lot of optimism about chinese demand. >> let's look at trading in australia. modestly positive territory at the moment. building on gains we saw on thursday.

nikkei futures in positive territory. the aussie dollar taking a bit of a beating. some modest gains there but overall a bit of weakness grants the greenback. futures for china in positive territory. it will be the last trading day there before the lunar new year holiday. >> top officials at the federal reserve and the ecb said the battle against inflation is far from won and rate hikes months continue. kathleen hays is here with the latest. should we start with the fed? >> let's do and let's start with lael brainard. we do not share from her quite as much as we do other officials. she spoke today at the university of chicago event and she made it very clear that the fed policy stance is already in restrictive territory, inflation

remains too high and the fed has more work to do. >> inflation has declined in recent months, but it is very high and it will take time and resolve to get it back. the federal reserve and central banks around the world have tightened policy considerably. >> interesting that she points out financial conditions. the minutes of the last meeting showed they were warning investors do not use financial conditions too much. she does still see tighter financial conditions. susan collins, another top fed official from boston, also spoke. she is in the camp up favoring 25 or 50.

-- 25 over 50. she favors measured rate hikes at 25 basis points, but she still sees the funds rate meaning -- needing to go over 5%. many fed officials are echoing the baptist. -- that. a large number of ecb members act 75 basis point rate hike. they did not do that. apparently the chief economist philip lane urged everybody to go for the 50 basis point move. a compromise that came about was

ok, as long as christine lagarde pledges more 50 point basis rate hikes that, we can live with this. apparently the idea was once you make this pledge, even if you do not do the 75, it is the equivalent of the 75. economists say this downplays the idea that they could downshift from 25 -- from 50 to 25. they will probably stick with 50. >> kathleen hays there. but netflix cofounder reed hastings a step aside as ceo. details from ed ludlow. the earnings call just getting underway for netflix. what does this mean going forward? >> probably not very much in the day-to-day handling of the company.

reed hastings is talking about how at netflix they have been discussing succession for 10 years and that basically his successors are ready to lead the company. basically, he is the guy behind the scenes that has been leading the efforts of the x supported netflix. she is involved in this company already and the development in how it conducts its business platform. ted sarandos is the man about holiday -- hollywood, he is doing all the deals. four point 5 million subscribers was the estimate, they came in at 7.7 million. >> some of the new initiatives

like a new ad supported plan they say describe an incremental membership growth. tell us how these could be a catalyst for growth in the future. >> there is a lot happening. go back to the 7.7 million subscribers added. the street was estimating 4.5 million. what we are seeing is evidence that after rocky start, third party data showed consumers were not into the ad supported tear. on the other is like, they are talking about what might happen if they clamp down on password sharing. netflix will start charging you for that.

they look strong. in this industry, content is king. >> in terms of succession, we're hearing that netflix has been talking about this for 10 years. going forward for netflix, every company is dealing with inflation right now. is the next headline going to be subscription price increases? >> it is interesting. it is one russia now behind adding in ad supported tear. netflix is a global company as well that had raised prices over the course of a number of years in some markets.

latin america, for example, some asia-pacific markets, where they are facing tough competition from disney and amazon. maybe there is something they could do around person there. ultimately, we saw subscriber growth. if they do start to charge for password sharing, they are transparent that there could be some cancellation. they are not going to guide us on that subscriber number. thanks look good for netflix right now. >> i am not sure i would share my password with paul. bloomberg's ed ludlow there, telling us about password sharing. the world's biggest human migration happening on sunday.

millions taking to public transport is a raisin -- is raising alarm bells. let's bring in stephen engle who was in singapore. some mixed messages from beijing . pricing for this huge holiday. >> this is inevitable that when you dismantle such a large and overwhelming health policy from covid zero so suddenly in the middle of winter and right ahead of the biggest human migration. two point one billion trips are expected to be taken by the chinese as urbanites and migrant workers and students all had back to the countryside to there and central homes during the 40 day period. that is called the spring festival.

it is essentially starting this weekend. you will see absolutely packed airplanes, trains, buses, you name it. if you have never experienced the migration firsthand in china, i do not recommend it necessarily because it is a crush of people. there was obviously concerned this is going to be a massive super-spreader event. some estimates put this covid wave spreading through urban centers of china at about 900 million infections already. in the countryside, where the elderly are in greater numbers, one in four or 60 or over and that is a big concern. the national averages 19%. so it is considerably higher in the countryside.

even at xi jinping on wednesday voiced concern about the serious threat of this super-spreader event going into the countryside, which could cause more death. the codes are vice premier sun chunlan long, she was the face of the hardline covid zero approach. she is somewhat stern and online, many people call her the old lady of lockdowns. she is not very well liked. she invoiced -- she enforce the hardline covid zero policies. she is now taken a softer tone. she says the transition to living with the virus has been stable and orderly. we will have to see after this holiday. >> newman and gobert in

singapore. let's get to the first word headlines. u.s. treasury has begun using special measures to avoid a payments to fall after the federal debt limit was reached on thursday. janet yellen is urging congress to act promptly while joe mentioned is calling for a bipartisan approach to avoid default. >> let's act like adults. how do we fix it together and move forward. >> the netherlands and japan are close to joining an effort to restrict exports of chip technology to china. sources tell bloomberg the controls may be agreed to and finalized by the end of january. both countries are home to key

suppliers of semiconductor equipment. lula da silva's government says it back the autonomy of the current central bank had. -- head. increase spending could undermine public balance sheets. >> still ahead, we will be joined by south korea's first female astronaut to talk about the opportunities for women in the aerospace industry. up next, we will speak with pimco asia. this is bloomberg. ♪

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paul: soft when things are the triumph of hope over experience, but sometimes hope does triumph. >> you have seen the over optimism about soft landings and economy doing well. you have seen a severe case downside also. >> if we look at our indicators, they are all very good. >> i think the big uncertainty this year is what will happen with global inflation when china kicks in. >> it is the trajectory of the

pandemic,. paul: business leaders and policymakers there given an update outlook. you can catch these big interviews in the coming hours. our next guest thinks equities investors are person -- pricing bond sales. >> we try to compare different asset classes and see where different probability lies. there has been more pricing of the soft landing scenario. we have seen very mixed signals coming through from hard and

soft data, in particular. treasury yields coming down to reflect the recession risk the head, driven by the large increases. equity seems to be -- in the u.s. market. paul: we are seeing a lot of volatility in markets at the moment. how are you making decisions around duration? >> we see it as less directional this year. last year, we saw a big adjustment from different central banks and the pricing of yield curve has been extremely volatile. looking forward, central banks are expected to potentially hike a couple of more times perhaps

and pause from there. the extent of the forecaster closer to different players. we thank the volatility of the bond market are going to come down from there and we think the way we would play it. shery: we have seen this rally be a lead by soft landing polls. perhaps we need to see a bad earnings season to reset expectations. what do you think? >> i think for now, the fed has talked quite helplessly.

they would be looking at the financial index and there are different variations of that. if that were to ease too quickly, i think the fed will stay hawkish longer and extend some of the worry, given the bond market is where a lot of the discount rates get derived from. if it comes down, but it would be positive for some of the risk market. shery: if we do see things go the way they are going right now and perhaps a pivot, does that mean weakness for the u.s. dollar? >> we like asian currencies with

china reopening faster. i think there will be some upside to growth forecast for china, which is a good indication. from our standpoint, some of the currencies we like include the intonation rupiah -- indonesian rupiah. that will help drive more of the difference between perhaps a slowing u.s. and some of the development economies versus the asia part which could benefit from this tailwind. there is some pent up demand that could also be captured from some of the weakness last year and [indiscernible] paul: on the subject of

indonesia, we have seen foreign investors piling in of late. what is making indonesia appealing right now? are you participating? >> we like the country's fundamentals. they have done excellent structural reforms. we look at the currencies. there has been a little bit of ketchup so far. this is an area where you might start to see some inflows into local currency funds. indonesia is a significant place of these funds like to allocate into.

shery: thank you so much for joining us. you can get a roundup of the stories you need to know to get your day going. you can customize your settings so you only get the news that you care about. this is bloomberg. ♪

shery: take a look at how media giants are treating at the moment. this is after we had netflix beating expectations. more than 7 million subscribers in the fourth quarter, topping estimates. netflix jumping 7% at the

moment. revenue also in with estimates. reed hastings is stepping aside as ceo, leaving the position for his two associates. this is leading support for the stock. a new ad supported plan some of the catalyst for growth for netflix. plenty more to come on daybreak. this is bloomberg. ♪

shery: take a look at inflation numbers out of japan, core cpi coming in line with estimates

during the month of december. it is an acceleration from the previous month. it is also the fastest pace since 1981, lifted by higher costs. the headline cpi number in line. an acceleration from the previous month. we are seeing now the japanese yen holding steady at the 128 level. we have seen it really gain ground. core cpi growth of 4% coming in at the fastest pace since 1981.

paul: entice the bank of japan. the milestone comes amid speculation he might be revised to support a change of direction of the central bank under a new governor. two thirds of economists surveyed see a change coming. we spoke exclusively with the former boj assistant governor and the tokyo governor about the fate of the mandate. >> it is an issue about the interpretation of the code. boj should pay attention to side effects. it is up to the judgment of the existing policy board members. it is up to the new governor. >> there is no need to say that

there us so much importance to increase economic growth as well as maintain sustainable prices. i believe the government and the boj need to cooperate and work together to fulfill their respective duties. shery: in japan and the netherlands, they are close to finalizing export controls of semiconductor manufacturing equipment. they would join u.s. led efforts to restrict china's access to the technology. let's bring in isabel reynolds in tokyo. how far do we expect them to go? >> at this point, there is a lot we do not know. to recap, last october the united states introduce very stringent and wide-ranging constraints on exports to china which involve limits on their

chipmaking equipment that can be exported and also on u.s. persons who can be allowed to work for chinese chipmaking companies. that gave a huge advantage to rival companies in the netherlands and japan. there has been a huge amount of pressure from u.s. officials on japan and the netherlands to join in with these restrictions and enter to limit what can go to china. we do not expect either of these countries to go as far as the united states. but there will have to be some form of support provided. we do not know what form that will take. my colleagues are hearing that this could happen by the end of the month. the japanese ambassador to the u.s. said a few days ago she expected progress to be announced sometime in the next few weeks. this is probably quite imminent. we do not know how it will be announced.

in the past, japan has opted to do it very discreetly. so we do not know how this will come into the public arena. paul: what sort of effect will this have on china and was sort of response might we anticipate? >> looking at it in a micro sense, we are only talking about two companies share. if you look at it in those terms, it does not seem like a huge deal. but i think what is important is perhaps the broader effect on the industry. tokyo electronic saying these restrictions have not been

imposed yet but it is already seem effects on its business. another effect is how will china react to this? will it take measures of revenge against japan and the netherlands? japan previously lost access to rare earths from china over a political dispute. so it could have broader economic implications. shery: let's get to the first word headlines. a top chinese official says the countries covid infections have falling to a low level. so chairman made the remarks against the lunar year holiday. she was once a spearhead of xi jinping's hard-line approach. her comments were echo by the national health commission. >> the number of hospitalized covid patients with severe symptoms peaked on january 5. after which it continued to decline.

i 17th, the number dropped. we can see that all the peaks the past. shery: the biden administration is working with think european union to avoid subsidy rates on european vehicles. speaking at the world economic former -- 40, i also address u.s. ties with china. >> the expectations for everyone should be that president biden is committed to bring in a thoughtful, deliberate strategic and effective approach to the challenges that we have as well as the opportunities we have. shery: french unions are calling for further strikes on january

31 unless president macron backs down from a plan to raise the retirement age to 64. robles, schools and hospitals were disrupted on thursday. most high-speed trains were canceled. alec baldwin will be charged with involuntary manslaughter over the colony 20 -- over the 2021 shooting of a cinematographer on the set of a movie. he was pointing a pistol when the gun went off, killing her. baldwin's lawyer says the actor had no reason to believe the gun held the loop around -- how a live round. paul: getting an alert. we are hearing from the new york

fed president, john williams, making some remarks. he expects inflation to fall to 2% in the next few years, but saying it is critical the fed stays the course. he calls inflation the priority heading into 2023. inflation is moderating he says but remains too high. the fed will be handing down a decision on february 1. the u.s. treasury has begun using accounting measures to avoid default after the country bumped up against its debt limits. jack, how much time is left before congress needs to strike a deal on the deadline? >> it is not entirely clear how

much time they have left. janet yellen has told lawmakers that she cannot promise anything other than early june. it will not be before early june. that is an indication that they should get negotiating soon. there were other people who say it is a -- probably around the middle of the year. congress takes a long recess in august so they will have to do something before that. so they are looking at negotiations in the early summer , by early june the potentially. paul: what will best actually do -- what will this do? >> there is a proposal that has been brought up by senator joe

manchin. it would create bipartisan committees to look at the solvency of social security, medicare, anything that is set to run out of money. that is something republicans have pushed for. they would create a committee, but it would not guarantee the enactment of their ideas. it would still need to get through the senate. that is part of the negotiations . it is possible they would fail and the debt limit negotiations when not actually lead to any changes. that makes it a moderate measure compared to be aggressive measures more conservative republicans are talking about. paul: is there appetite for a

bipartisan approach? what are the chances of it actually succeeding? >> the republicans who now control the house have insisted there will be negotiations of some sort on the debt limit. a number of them have said something on social security or medicare, or the trajectory of u.s. debt and deficit would be necessary. the republicans do not have a clear offered just yet. -- offer just get. the white house is saying there should not be any attachments. it should be a clear increase of the debt limit. it does appear the republicans are very determined.

at this point, they have the leverage to demand those types of negotiations. shery: jeff fitzpatrick joining us from washington. we take you live now to lima, peru where protests are happening across the streets. they are confronting the current president. they are supported of the ousted president. they had been protesting in relatively rural areas. they have arrived in the capital city through trucks and buses. you can see police in riot gears. they have already fired tear gas outside congress as protesters flocked to downtown lima to try to topple the government of the

president. they are enraged at the number of deaths we have seen so far. more than 50 maps related to the unrest as of thursday. this is bloomberg. ♪

shery: the space race is

accelerating with the top five countries spending $80 billion in 2021. despite the growing investment, the number of women in the aerospace sector has been stuck at around 20% for decades. only 11% are female. our next guest is the first south korean of any gender to fly into space. soyeon yi is from the international space university. start us off with a view of perhaps some of the challenges and also the opportunities you have seen as a female astronaut. >> hello and thank you for inviting me. i do not the space sector has a special difficulty for women because most of the industry already face the same challenges

because we did not have many women in sectors, so it is pretty much like the majority of people who are accustomed to working with male guys. it is a cultural difference. in gender, we also face of the cultural difference. getting much better as you said, but we still have a lot of problems to go over. i am so happy that we will be in space and those commercial activities are encouraging kids to think of space. shery: i lived in south korea so i know the patriarchy is strong. what are you seeing in terms of bringing those girls in the

sciences. as the first female and south korean to a bunch of space, what are the lessons you would like them to take? >> i am so honored to be in that place. even growing up, i never saw female engineers were role models in space or even the science and engineering sector as a female. when the little girls in asian countries saw me and met me, they said women it can be an astronaut, because nobody educated them.

they can break out of their bias and think of their future. that is a great influence. paul: you did of course spend a few days at the international space station. his sexism a faang -- a thing on the iss? >> can you rephrase that? it was breaking up. paul: you spent 11 days on the international space station. did you experience any discrimination during that time? >> thank you for asking that

question. i cannot say about the whole space station experience, but during my stay, i did not experience any discrimination working in space. most of the crew, we work together for a long time so we forgot about our gender and race. we face life and death together. if you never experience with a daughter or a wife, you cannot think of some kind of aspect of the different gender, but i cannot blame them, but as time

goes by, more astronauts go to the space station and more genders can experience a different aspect. and there will be better efforts to improve that, not only the russian space agency, but also nasa and the different nations space agencies. i think we are moving forward. paul: soyeon yi, faculty member at the international space university. thank you so much for joining us. you can watch our past interviews that tv . you can become part of the conversation by sending us instant messages during our shows. you can check it out at tv . this is bloomberg. ♪

>> we see in technology, change is happening. more focused on automation and cost efficiency. >> we believe that by december of this year, most of the urban

areas, big cities, even smaller cities will be covered in 5g. >> we are halfway through doubling capacity. over the next 12 months, we will complete it. paul: corporate executives speaking to bloomberg at the world economic forum in davos. you can catch of these interviews in the coming hours. shery: here is a quick check of the latest headlines. bank of america is telling executives to pause hiring except for vital positions. the ceo says the bank got ahead of where it wanted to be on staffing. he was speaking to bloomberg in davos. >> we overachieved on the hiring side. now we have to slow down the hiring.

we are going to have enough people doing a great job for our customers. let's be careful. shery: jp morgan has set aside $10 billion to go into direct lending. they also plan to make more capital available should the opportunity arise. the move would put them in direct competition with more established players like blackstone. the european union has slept whatsapp with the $6 million fine. they said they violated data protection rules by forcing users to opt in to data processing without sufficient clarity in what the information would be used for. paul: these are some of the stocks we will be watching when

trading opens in korea and japan. we will be keeping an eye on ships shares. -- chips shares. south korean cosmetics stops may also -- stocks may also trade actively. we have those market opens in seoul and tokyo coming up next. this is bloomberg. ♪

i screwed up. mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. that and the paycheck.

♪

shery: counting down to asia's major market opens as we continue to get more hawkish fed speak on the need to continue to cooling elation in the u.s. we are already seeing japan's inflation accelerating at the fastest pace since 1981. we are talking about growth of 4% year on year. >> we are seeing things rather flashy in australia. it is important to remember, it is going to be the last day of trading for a number of orchids including china and hong kong with the lunar new year holiday due to begin next week. annmarie: we are on the count down to the open in japan and korea and starting to watch for cash treasuries. we see the 10 year yield retreating to 3.4%. 100 its lower than the top end of the fed funds target rate. investors are starting to bid on

a run of rate cuts, particularly when you have week is coming into the economy. officials continuing to push back on that narrative. we heard from the new york fed president john williams and he says policy still has a lot more work to do to lower inflation. speaking of inflation, we did get that reading out for japan in the last half-hour. poor consumer prices rising to 4% in december, its strongest rating since 1981. unlikely to move the needle much for the boj. markets coming online study. we can expect a little bit of trading, given we have the lunar new year approaching. in terms of korea, particularly tech stocks, which are in red, first -- unsurprising we did see the philadelphia stocks index

closing down by 2%, were around that level. broad declines around interest rates. investors reacting to geopolitical fears given we have the netherlands and possibly japan joining the u.s. to restrict chip tech exports to china. we will be keeping an eye on media companies as well, given we did see netflix reporting better than expected subscriber numbers. you can see the after numbers moved. australia flat. whitehaven around 5%. strong exports for coal this year. oil traders focusing on demand from china and we are seeing it rising around 6/10 of a percent. -- .6%. paul: breaking news about nintendo. nintendo intends to boost production of its switch consul.

the device is now six years old and shipped 20 million consuls in the year. nintendo told partners it wants to turn out more switches in the fiscal year starting april, but has not yet set a target. we do not have official confirmation at the moment, but bloomberg reporting there -- they will be boosting output. nintendo pushing higher by .5% right now. shery: we will turn to the consumption picture across asia. of next guest expects china demand recovery to be the key driver of a jeanette these. joining us now is the head of apac. it is not just chinese consumption, it is asian consumption reopening. are you focusing more on those retail names, consumer

discretionary's? >> the combination of them, i would say. consumer discretionary, and that includes e-commerce, internet and gaming, would possibly be the biggest beneficiary of china reopening. we have had two to three years of depressed consumption. sentiment is improving. on the ground numbers, looking at mobility data, or the tourist movement within china, beginning to happen outside china as well. it clearly bodes well for the consumptions. we would think consumer discretionary's come restaurant chains, e-commerce, internet would all be beneficiaries of that change in sentiment. shery: which is why you have upgraded china, but you have also downgraded a couple of markets.

tell us about those. >> we upgraded china to overweight. that was kind of obvious after the china pivot came through in november. we funded that position by downgrading india and indonesia. india was at the time one of the most expensive, and still remains so, in the asian investment universe. relative valuations were more than two standard deviations higher than the long-term average. at the same time, we expect earnings downgrades in india going forward, particularly in consumer staples. to some extent interest -- consumer discretionary's and possibly commodities. indonesia was looking tough after a severe outperformance over 2022. we expected energy prices to peek out, which could dampen sentiment.

paul: in terms of markets you do like, we have the u.s. dollar giving a bit of a tailwind at the moment. with that in mind, which markets look appealing to you right now? >> we are overweight china, hong kong and thailand. one of the strongest themes is asia reopening. china and hong kong are the biggest beneficiaries, but the effects are spilling over into tourism. we are neutral india, korea, indonesia. we are underweight taiwan, malaysia and other smaller markets. apart from the teams i mentioned, asian reopening and consumption recovery, we are also positive financials. even though the yields seem to have peaked for now. but there are different tailwinds to financials in

different pockets. in china, consumption recovery. in india, private banks getting market share and having the cleanest balance sheets. in north asia, particularly korea, some degree of net interest margin improvement as yields continue to's -- continue to -- paul: we have heard rhetoric out of china about supporting the property market. a number of measures being taken come i understand you are still cautious. why? >> we think the balance sheets of the property companies on the whole remain stretched. and, we are not seeing that momentum in terms of property sales or property price recovery. we think for a sustainable recovery in the property market, one would have to give it significant amount of time for the -- to get absorbed.

and some degree of significant balance sheets repair is still necessary. paul: head of apac equity research at bnp paribas. thank you for joining us. let's get the vonnie quinn for headlines. vonnie: the u.s. treasury has begun using special measures to avoid payments default after the debt limit was reached thursday. it is altering investments in two government funds for retirees to allow scope for payments while it is unable to boost debt. janet yellen urging congress to act promptly. joe manchin is calling for bipartisan approach to avoid default. the netherlands and japan are close to joining a biden led effort to restrict exports of chip technology to china and to destabilize its push into the industry. sources tell bloomberg dutch and japanese export controls may be finalized by the end of january. both countries are home to key suppliers of semiconductor

manufacturing equipment. the biden administration says it is working with the european union to avoid a subsidy race on electric vehicles. katherine tai says the two sides have a history of work through disputes in a way that benefits them both. speaking at the world economic forum, -- also addressed u.s. ties with another major trading partner china. >> the expectations for everyone , workers, families, businesses in china and around the world, should be that president biden is committed to bringing a thoughtful, deliberate, strategic and effective approach to the challenges we have as well as the opportunities we have in this consequential trade relationship. vonnie: taiwan's has resigned, facing a cabinet reshuffle. -- was taiwan's longest serving pm since its first democratic elections in 1996. in a statement, -- office says

the government will assemble a new cabinet during next week's lunar new year holiday. 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. paul: flicks cofounder reed hastings is stepping aside as ceo, leaving his position to his two longtime associates. get details from technology anchor ed ludlow. we have been hearing remarks from the earnings call. the incoming co-ceo ted sarandos saying the strategy going forward is global. >> not too much doubt. reed hastings becomes executive chairman. ted sarandos was already co-ceo since 2020. greg peters steps up to be the other co-ceo. to be honest, greg peters has been running a big part of netflix's business. he was the driving force behind

the ad supported tier of subscription purity has been the driving force behind this initiative to pay for password sharing. reed hastings opened what was his 83rd netflix earnings calls with the idea that netflix has been thinking about succession for a 10 year period. this wasn't really a surprise to many on the street, given they have the co-ceo structure since 2020. for a long time, this is how netflix has been doing business, with this team. and based on some other promotions, they have -- talent. shery: tell us about the global strategy. they seem to be doing better in a couple of regions. >> there's multiple facets. there's the idea that local language, depending on the market is a success. you think about mexico, spanish-language programming broadly across latin america. markets like korea have had

success there in growing their subscriber base. you are asking about pricing earlier as well, they were asked about pricing on the call, whether they would raise prices. they didn't answer the question directly but said in some segments it is an option. but content is king. there's bullishness around this stock even though 2022 was hard. up more than 90% from a may low. a big part of that was content they brought out for the end of last year and what is in the pipeline for month to come. shery: ed ludlow with the latest. let's see was moving across asia, given this huge beat. annmarie: taking a look at some of the korean media companies that have partnerships with netflix in some capacity. moving mostly to the upside. bucket studio bucking the trend, trying to find exactly why. it would get more details.

sockets -- netflix investing in foreign content outside hollywood. something like more than 30 new shows coming to the platform later this year from korea alone. another sector we are focusing on today is nintendo. we did get that breaking headline, netflix was initially higher, it has now turned negative even though it is planning to boost output of its switch consul. they did ship 21 million devices over the course of this year. finally, looking at chip stocks, this is contrasting fortunes with just under 12 minutes. we are seeing the movie -- korea lower. the headline is we did see stocks declining. semiconductor stocks lower in the u.s. on fears around rising rates.

slower economic growth. in japan, there are local factors given that we do understand that japan and the netherlands are close to joining a u.s. ban on chip tech exports to china. paul: still to come, we hear from u.s. trade representative katherine tai at the world economic forum. she tells us about efforts to improve relations with partners in doing the eu and china. up next, fears a covid wave could overwhelm rural china. when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns.

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>> inflation, by all accounts, is too high. our determination is to bring it back to 2% in a timely manner, taking all of the measures we have to take in order to do that. >> inflation has declined in recent months, but is still high. it is going to take time and resolve to get affected 2%. financial conditions have tightened considerably over the past year as the federal reserve and central banks around the world have tightened policy considerably. paul: federal reserve vice chair lael brainard and christine lagarde. top officials of the federal

reserve into the european central bank said the battle against inflation is far from won and rate hikes must continue. kathleen hays is here with the latest. let's start with the fed. a slower pace of rate hikes, but note easing on the level they are going to reach. >> that is sure how it looks. breaking news from the new york fed bank president john williams, scheduled to give remarks today. he is saying how high the fed raises rates is going to hinge on the data. we have heard a lot of comments already from both lael brainard and susan collins, president of the boston fed, saying there is a balancing act. they have seen slowdown in the economy and they need to balance. john williams also saying policy has "more work to do to lower inflation." what fed official hasn't said that? it made sense to slow the pace of hikes, which they did from 75

to 50, as the peak got closer. he does not say the peak is here, but he definitely says it is moving in that direction lael brainard, same thing. she stresses that progress has been made prices are coming down. she is worried about core services, but inflation still too high. it is restrictive now, but there is more to do. susan collins favors a measured approach to rate hikes. she is in the camp that has already stated publicly, which lael brainard did not, that she is favoring a 25 basis point hike. at the same time, in terms of more to do, she's looking at the fact that the terminal rate, that even the markets are getting -- some people are over 5%. that is where she wants to see it and that is what you see from this chart. people are pricing in something a little higher, now a bit

lower, but more in the 5% range even though people are saying 4.75. shery: we also got interesting narrative coming out from december minutes of the ecb. >> sure did. for 70 point hike. inflation in europe has been double-digit. what happened? we got a surprise because they did 50. it turns out the chief economist for the ecb argued hard for the 50 basis point move and apparently there was a big debate but the tipping point was that christine lagarde would agree to signal more 50 basis point rate hikes ahead. keep going in that direction. that is how they came to agree

on 50 basis points. in this discussion, the idea that the strengthening of these ecb policy intentions is doubling down on -- would be like a 75 basis point rate hike. so let people know there are more 50 point right -- about downshifting to 25, would date -- would they do that? these minutes suggest that probably will not happen. shery: kathleen hays. the world's biggest human migration begins sunday as millions of chinese take to public transport and head back to their ancestral homes for the chinese new year holidays. it could also become the largest ever covid super-spreader event and overwhelm health facilities. let's bring in our chief north asia correspondence stephen engle.

we're getting mixed messaging from beijing. >> obviously. when you dismantle covid zero so abruptly, there could be room for mixed messages. the covid czar was saying things that seemed to be under control. while of course the government is quite concerned about the beginning of the main part of the spring festival, which is the lunar new year holiday coming early this year in the middle of winter. at a time when there is a covid wave. some estimates put the number of infections in urban areas at about 900 million out of 1.4 billion. keep in mind, the vast countryside where many of these people from the cities go back to during the migration, two point one billion trips are estimated over the 40 day period of the holiday that begins in earnest this weekend. that is double what we saw last year.

because there was covid zero the last for years, it has been dismantled. people are eager to get back to the countryside to see their loved ones. essentially, the super-spreader event could go to the part of the country that has not built up immunity to covid zero. many on the countryside do not know much about covid. they do not have natural protections or health care facilities like the cities do. the elderly population, maybe one in four are 60 and above. there is concern. xi jinping put in commentary wednesday, saying there's the fierce and serious outbreak threat during this lunar new year holiday. paul: this seems to contradict what the covid czar is saying, that the worst is over. stephen: in the cities, maybe. maybe they are starting to see

an inflection point where the numbers are coming down. the covid czar was the stern faced person who had to carry out xi jinping's orders and lockdown cities. she is not very well-liked on social media. i do not condone this description, but essentially they have started call her the old lady of lockdown. she had to do the dirty work but she has changed her tune too. xi jinping dismantled covid zero policies. -- was in davos's. economists have upgraded their following to a new level in the transition phase is stable and

orderly. and that the number of hospitalizations with severe symptoms is declining. yes come in there's mixed messages, but obvious concern about the lunar new year holiday that is starting. paul: stephen engle in singapore. we have live pictures for you of the beijing railway station. stephen engle told us earlier that he does not recommend getting involved. this is bloomberg. ♪

♪ shery: here is a quick check of headlines. j.p. morgan said to have set aside $10 billion to go into the world of direct lending. sources say the lender plans to make more capital available should the opportunity arise.

the move would put jp morgan in direct competition with blackstone, apollo and aries. the eu has slapped whatsapp with a $6 million fine and a six-month ultimatum to bring its data processing in line with eu law. the eu privacy watchdog says they violated protection rules by forcing users to opt into data processing without sufficient clarity on what the information would be used for. meta's facebook and instagram were fined early this month. this is bloomberg. ♪ these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the internet increase. that's why we just boosted speeds for over 20 million xfinity customers, on us. so you get more of the speed you need for day and night streaming. more speed you need when you're work from homeing.

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♪ >> clear evidence. right?

how quickly will the fed get us to 2% remains the debate, but clearly the slope of the line is to everybody's favorite. the second is not just the opening of china, but china has embraced the rest of the world more aggressively in the last few weeks, witnessed by the vice premier meeting with treasury secretary yellen. shery: james gorman on the sidelines from the world economic forum in davos. what he just said about this china reopening is probably what is driving market sentiment in asia today because we didn't have a great lead-in from the wall street session. given we still saw the s&p 500 closing .8%. concerns around rising rates and the outlook for u.s. recession. today in asia so far, half an hour in for japan and korea, most sectors moving to the upside. one of the few laggards so far, but frack currently --

fractionally qamar i.t. stocks down .1%. otherwise, green across the screen. to break it down into more detail, it does seem the focus on china's reopening is front and center. part of the commodities complex, given we are still seeing iron ore gaining. other factors we are keeping an eye on our equities pitch. japan south korea trading flat. trading volumes is playing into this, given we are approaching the lunar new year holiday. much of asia will be off-line. trading volumes as well looking for as we headed into the trading session. >> the u.s. says it is willing to work with the eu and other allies to avoid a subsidy war over the production of electric cars. in an interview, trade representative -- says she is

planning to meet with counterparts in beijing to amend ties with china. >> -- is the vice premier in charge of the economic profile. janet's counterpart, and also minebea are our schedules did not intersect. but after last fall, the g20 meeting between the presidents, both presidents turned to their teams and instructed us to engage. that is what you see janet doing. i will do the same with respect to trade. i think that expectations for everyone, workers, families, businesses in america, china and around the world, should be that president biden is committed to bringing a thoughtful, deliberate, strategic and effective approach to the challenges we have as well as the opportunities we have in this profoundly consequential trade relationship. >> deliberate is an important

word. part of the backdrop is section 301 sanctions, they are now under review. president biden indicated at one point he would address that. he didn't. do have a sense of when you may be ruling on 301? >> it is a statutory requirement that will have statutory parameters. we are committed to carry out president biden's vision. the spirit of his approach to economic leadership, including in this area, we are going to bring a disciplined approach to the feedback that our public has provided us. there is no more important aspect of our work, especially in the management of this relationship. >> we are here in switzerland, very near the eu. there are lots of situations being talked about at davos with regards to the inflationary reduction act. electric vehicle tax credits. we have a member of the british

cabinet today saying he thinks they are dangerous because they smack of protectionism. your response? >> i have had a lot of conversations with friends and allies around these provisions. i understand they have concerns. our conversations, which are being built with our engagements here at davos are constructive. they are honest. i want to drive it wants attention to the fact that in public and private, all of them have been clear that they absolutely share the goal of addressing the climate crisis and that they see this legislation is a significant accomplishment on the part of president biden. i have every confidence, given the track record we have had, in working with partners and allies. and every confidence that given the shared values we have, that we will be able to find a way to work together to address the

challenge that we are all also being affected by. >> we talked today with the director general of the wdl. she says she is hopeful it will be resolved through negotiations and discussions, rather than a dispute resolution. is there room under the statute to do that? >> is there room under the statute to do that? look, there is always room to have that political conversation. there is always room to understand each other better. and to map out a path to where we can be working together cooperatively on something that is so important to all of us. paul:. trade representative katherine tai speaking to debit -- david westin p let's get the vonnie quinn. vonnie: a top chinese official says the country covid infections have fallen to a low level.

outgoing vice premier made the remarks ahead of the lunar new year holidays once a spearhead of beijing's hard-line pandemic approach. >> the number of hospitalized covid-19 patients with severe symptoms across the country peaked on january 5. after which, it continued to decline. january 17, the number dropped by 44.3% compared to the peak. so, we can see that all three peaks have passed. vonnie: peruvian police have fired tear gas as protesters try to topple the fragile government. authorities have also reported clashes between crowds and security forces outside the capital and more than 1 hundred hwy blockades. the nation has entered the seventh week of a political crisis that some are calling the takeover of lima. french unions calling for strikes on january 31 unless the president backs down from a plan to raise the minimum retirement

age. railways, schools and hospitals were disrupted as more than one million people joint rallies called by the nation's eight largest unions. high-speed trains were canceled. alec baldwin will be charged with involuntary manslaughter over the 2021 shooting of a cinematographer on the set of the movie rest. baldwin was pointing a pistol at -- when it went off, killing her. baldwin's lawyer says the actor had no reason to believe the gun held a live round and the charges a terrible miscarriage of justice. 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. paul: supply chain disruptions have ease, but effort is wired to keep them from impacting productions. -- told bloomberg the company

plans to double capacity in the next 12 months. >> we are well on track. we have had international investment come in and invest. we are launching the first ev this month. five more electric suvs over the next couple of years. >> there are talks about you listing some of those unlisted units of yours. any plans to do that soon? in the next 12 months? >> not in the next 12-24 months. more important is the value creation. i am less worried about the exact timing of listing. we've got a good set of businesses on a good track and my sense is that in the next 24 to 48 months is when we will see some of those listings. >> you talked about the launch at the end of the month, what kind of demand are you anticipating? >> we have had three outstanding launches in the last year.

all three have even taken us by surprise at the level of demand consumers are showing us. the first one showed 50,000 units in three days. the next was 50000 and three hours. the most recent was 100000 and 30 minutes. that was $2.3 million. >> that might be a world record. [laughter] >> we are gearing up to produce as much as we can. we are halfway through doubling capacity. over the next 12 months, we will complete that task. >> what kind of demand do you see perhaps in the next 12 to 24 months? how are you meeting that demand? are you having to ramp up hiring? >> we have to ramp up hiring, supply capacities. demand is not slowing for us. after the initial wikis, the monthly -- even though wait times are much longer.

>> supply chain disruptions continue. will that impact your plans? >> supply chain disruptions are continuing and that is always a challenge but they are better than what they were a year ago. a year ago, they were disrupting production. at this point, there are various scenarios, backup plans, so teams can manage through that. we do not see production being disrupted, we see more effort that are teams can put into managed -- >> in terms of chip shortages, how much are you impacted? >> we are impacted by what we signed up for. we had to take a little longer in doubling our capacity to be able to get new chips. but, those plans are in place now and we do not see disruption there. >> lithium-ion. india imports about 70% from china and hong kong. are there plans to bring that production home coming given the macon -- make india initiative?

>> we have a good partnership with volkswagen. we were sourcing batteries from them. we will look at options to indigent eyes that production. shery: our coverage there continues through the forum's fifth and final day. catch these big conversations in the coming hours. this is bloomberg. ♪

paul: days after reopening, the high-speed train that takes travelers to hong kong is seeing overwhelming demand. the ceo told bloomberg that double capacity after many trips sold out. >> we are excited for the reopening, especially traveling across the boundary. we're only talking about a week after the reopening and we are already seeing a large amount of movement. we reopened our high-speed rail service last weekend. in the pre-sale of tickets, many scheduled trips. tickets sold out within two hours. >> what kind of growth are you anticipating in the next six months? how quickly do you think that

will help hong kong make an exit from recession? >> we are coordinating, supporting the authorities in an orderly reopening. just to give you an example, three days ago we opened the high-speed rail service. in order to support the orderly reopening, we were selling 10,000 tickets a day for the cross boundary movement. within a few days after opening because of popular demand, we are increasing sales to 20,000 tickets a day. if that pace continues, we will be recovering very quickly. >> what are you looking for in terms of other cities in china itself? >> we operate in three cities. all of them are seeing a recovery and more importantly, recovery of economic activities.

>> -- is sometimes referred to as a property company with exposure in transportation because he rely a lot on your earnings from property. how is that looking? >> we are a railway company. [laughter] we work in the property sectors. the idea is based on the real property model. the concept is the railway investment -- return on itself but it has tremendous external economic value. land use, enabling more efficient economic activities and so on. the rail prosperity model is to capture some of these external economic values back into the railway. >> how much pent-up demand has there been? what has been the impact on prices? >> we have seen fluctuations in property prices. we believe a large amount of the market is actually supported by

visitors. business and leisure. in terms of property prices couple we have buyers from the mainland and international people who want to move to hong kong to do business. we have both the international border and the boundary with mainland opening. we will see a stabilization and probably improvement. >> give us a sense of growth you are anticipating in terms of demand. once pent-up demand is met, what is sustainable growth? >> it would not be right for me to give you specific numbers. what we can see is that local domestic patronage has gone back to something like 90% of pre-covid levels. but, property activities including shopping malls, developments of flats and so on, they are not yet back to pre-covid levels. the first step is to resume to

that level, and then we will see growth. shery: jacob camp. the world economic forum in davos. bank of america has started telling executives to pause hiring, except for vital positions, as it tries to keep a lid on costs. brian moynihan says the bank got ahead of where it wanted to be on staffing as the attrition rate started to cool. he was speaking to bloomberg. >> what happened during 2022 fell, we overachieved on hiring and went this -- went past our target. now we can slow down. i'm telling people, people do a great job for our customers but let's be careful to bring back down that level because we were above that level. shery: reed hastings stepping down. brett peters, previous chief

operating officer, will join ted sarandos as co-ceos of the streaming giant. shares jumped after hours as netflix reported 7.7 million subscribers in its latest quarter, well ahead of expectations. netflix is also forecasting its profit margin and free cash flow will improve in the coming year. be sure to tune into bloomberg radio to hear more on the days big newsmakers part. get in-depth analysis live from our studio. listen through the app. 20 morehead. this is bloomberg. ♪

paul: hundreds of millions of chinese set to travel for the lunar new year holiday for the first time since 2019 after the government dismantled strict virus restrictions. it is said to give the travel industry a boost, but risks supercharging the world's biggest covid outbreak. >> it is lunar new year, china's most important holiday. for the first time since the pandemic, people can travel freely. travel is expected to be no holds barred this year. people do not need to take a test to get on a flight or a bus. for the first time, they won't need to quarantine once they

arrive. we are expecting 2.1 billion trips to happen during the holiday. that is more than double we saw last year, but slightly below the 3 billion we saw previous years. one of the great unknowns at this point is how exactly this mass migration is going to impact the covid outbreak across china. there has already been a significant outbreak, in the biggest cities. the question is whether or not the rural areas have fully exposed to the virus and whether people going from cities like beijing to shanghai to rule villages and towns are going to be bringing the virus with them. the number of people who travel abroad is still pretty low at this point. given that many have not been home to see their friends and family and the demand for international trips has remained low.

economists and analysts are expecting that this return to travel is going to be buoyant. it is going to be helpful, getting people back out and spending once again. if the number of infections increase, it could have a dampening effect on the economy for weeks. this is the year of the rabbit and china watchers expect the economy to take off after a lunar new year holiday. shery: merce -- boosting hopes of a say the region's airline stocks stand to gain. we have seen asian airline stocks lag behind global peers. what is going on? >> good be will during. if you see the bloomberg airlines index this year, which was more than 10%, some of the

worst performers have been asian airlines. especially ones in china. given that china's pivot away from covid zero policy has been surprising, i spoke to the analysts and they said there may have been some reality check and profit taking since the asian airline names have been rising in the past two months, outpacing -- pacific index and global peers. now we may be having a moment of reality check as there has been hiccups in the international, such as restrictions on travelers and some of the infections rising in china. covid infections rising in china. investor may be doing some reality check. however, this latest respite in asian airline stocks may be a good entry point, according to

some investors because we are expecting a full-fledged recovery in travel this year for the first time since covid. paul: as travel recovers, how are airline stocks favored to fair? >> asian airline stocks are likely to fare pretty well this year. this is going to be the first time we see some level of pretty good recovery in travel. especially coming from china. a lot of analysts expect that some of the restrictions on chinese travel we have seen in the first couple of on's after their move away from covid 02 be lifted. some saying possibly in march. this upcoming lunar new year holiday may provide good insight into what is going to future travel look like for asia for the rest of the year. paul: stocks reporter --

some stocks we are watching ahead of markets open in hong kong and china, keeping an eye on chip shares as japan and the netherlands are said to be those to finalizing export controls of semiconductor -- to restrict china's access to technology. shery: the london school of economics tells us where to look for pent-up demand. kingston security shares, where they think the handset might be headed along with their china reopen picks. the market opens in china next. this is bloomberg. ♪

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