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haidi: a very good morning "daybreak: australia." and welcome to "daybreak: australia." i am haidi stroud-watts in hong kong. we are counting down to asia's major market opens. shery: good evening from bloomberg's world headquarters in new york, i am shery ahn. first republic bank soar into did you options after deposits plummet. haidi: u.s. stocks adrift as investors digest earnings and economic data. it moves forward with a new deadline looming in the u.s. debt ceiling standoff. shery: china's leaders are expected to shift their policy focus from stimulus to economic reform. u.s. futures are muted at the opening after a session that lacked conviction in new york. the s&p 500 drifting at the start of the week, packed with corporate earnings and economic data. of quest we have the dallas fed manufacturing survey for april coming in weaker than expected.

today we are awaiting gdp numbers and core pce data later in the week. nasdaq 100 futures under pressure in the new york session. treasury yields also fallen, the 10-year yield below the 3.50 level. we have the debt ceiling drama. now, hedge funds are betting on higher treasury yields according to data. ,crude prices rising slightly in the new york session. low-volume trading after the biggest weekly drop since march. we are seeing pressure in the asian session. but what we are watching right now in after-hours trading, first republic. this plunge, after the debilitating deposit outflow numbers that they reported. we are talking deposits down more than 40% from the end of 2022. you are seeing the stock plunging in after hour. although in the regular session we had a gain of 12 percent. from first republic to

first-quarter earnings, let's bring in hermann chiang bloomberg intelligence. investors are not liking what they see especially after they withdrew all of the guidance. guest: a lot of unanswered questions still. there was no q&a with analysts. and we still are waiting to see what exactly they want to do with tweaking their balance sheets, selling assets, reducing borrowing from the fed, all of these remain unanswered questions. haidi: what did we learn about deposits and whether there any prospects of recovery, and how does it fit in with the broader picture in terms of the other banks we are seeing reporting? hermann: first republic is definitely the outlier of the banks who have reported earnings, 41 percent deposit decline. if you exclude the $30 billion of deposits from the largest u.s. banks that tried to shore up confidence in first republic, deposits are down 57%. really dramatic declines that

the bank is looking to shore up confidence in. they mentioned that through april, last friday, that deposits were only down 2%. so deposits have moderated, but we are not seeing the uptick that we have seen from other banks in the spotlight like western alliance. so there is still a lot of unanswered questions about the bank needs to tackle and unfortunately, the earnings and the lack of clarity from the earnings call have not really sure that the confidence. shery: but we heard a bit about headcount reductions, more on strategic options. what do we know? herman: they mentioned they would reduce headcount by 25%. strategic options, they left that intentionally vague. they mentioned that in the earnings call and in the press release, but no further clarity was mentioned.

shery: bloomberg intelligence senior analyst herman chan. we will get more on big bank earnings, coming up, we will be hearing from the ubs ceo sergio ermotti coming up at 2:00 p.m. hong kong time. there is an ultra dire outlook for corporate america that is so far failing to materialize. let's bring in bloombergs cross asset editor reporter emily graffeo. emily, you have to wonder whether this pricing on the low end of expectations is factoring into how much we are seeing -- 20% of the s&p report, and how much they have really beat. emily: it is still early in the earnings season, but so far it has been pretty good when you look at the bank of america note they put out. the market has actually been rewarding companies better-than-average companies

that have beat on their estimates and outperformed the s&p 500 by 2% over the past two weeks, that is higher than the historical average of 1.5%. we still have a lot of earnings to get through, though, and we typically do see estimates brought down before the earnings season kicks into gear. so i am not surprised to see these earnings beats. and again, we still have the fed meeting coming up so there will be a lot of volatility ahead before we can take a big step back on this earnings season. shery: when it comes to earnings, we have the big tech numbers, meta and google this week, what are we seeing in terms of valuation for this giants? emily: amazon and alphabet reporting tomorrow, the other tech giants reporting later in the week. they make up a large part of the s&p 500 and they have covered a lot of the market's rally so far

this year. there could be a space of vulnerability to billy when you look at earnings expectations for the s&p 500 technology sector, analysts expecting a 15% year-over-year decline for the technology sector when you look at earnings for the first quarter. the biggest drop since 2009, according to bloomberg intelligence data. is a market lowering the bar are currently enough? are we prepared for that 15% decline and perhaps could there be upside if tech companies beat that? or are these earnings estimates accurately reflecting that dire outlook and it will bring the market down if there is this continued negative sentiment on these technology stocks. haidi: there is something interesting going on in the market, even as we deal with uncertainty over the rate hike outlook, how much of a recession if there will be a recession -- hedge funds are placing worthington we will end up? emily: yes, really

interesting story on the bloomberg terminal, hedge funds for the third week in aruba are increasing their net short on futures, a record level of short activity. this goes against a lot of the narrative we have been seeing in the last few weeks. that the disinflationary process is starting and that we could get a cut, at least that is what the swaps market is pricing in. but now we have hedge funds pricing for rates to go higher and for inflation to be stickier, because if they are shorting treasuries, that means they expect the price fall and the yields to rise. so it is interesting to see the hedge funds position one way, yet we still have strategists and a lot of asset allocators positioning for inflation to come down and yields two have already beat. shery: as emily was telling us, we have big earnings coming up this week including microsoft and alphabet on tuesday. these are the other tech giants

that will be reporting later in the week. let's now turn to annabelle for how we are setting up in the markets in asia. annabelle: you can see here that we are a picture of caution, given that we still don't have earnings yet. a bit of uncertainty, or in the markets. we have some key markets closed, australia and new zealand, public holidays there. nikkei futures are flat. a focus coming back into the fx space, we saw the u.s. dollar strengthening for the first time in three days and a lot of that down to that weaker yen that we are seeing ahead of the boj meeting later this week. socgen saying that one of the currency pairs you should be piling into is the euro-yen. that could strengthen given the lack of policy changes coming through from the boj and the ecb, set to hike in the months ahead.

a key focus in this session today will be what we see in china, you can see the golden dragon index was a standout underperformer in the u.s. session. we are at the point now where the golden dragon index has dropped below its 200-day moving average. a bearish signal. comes down to it not so much the reopening trade, we are still seeing signs of economic momentum -- it is down to the focus on geopolitics in the country, tensions between the u.s. and beijing. some of the markets saying it is better to put money into proxies like the stoxx 600 index, that actually has been rising off the back of that. shery: let's actually delve into china. a meeting of top leaders this week will be closely scrutinized for any shift in focus it away from stimulus as the economy picks up steam following the end of covid zero. for more, let's bring in over chief north asia correspondent

stephen engle in hong kong. what can we expect from the politburo meeting in april? stephen: we will be reading the tea leaves and the readout following the meeting which will be held this week -- they don't give a date for these meetings, a meeting of the top 24 officials in the chinese communist party. at the top of the standing committee is xi jinping and then li qiang and then downwards. those 24 individuals will be at the meeting laying out priorities. and we will read the readout once it is made public for any shift in tone or language from its previous meeting in december. things were different in december, we were just coming out of the party congress were xi jinping solidified his third consecutive term. covid zero was starting to be dismantled. but then we have had 4 months of adjustment. also adjustment by major banks, seeing the strides the chinese economy has made over the last

four months through the end. of covid zero some banks raising their growth target to 6% and above. that gives room for policymakers in china to dial back the stimulus. even the pboc has already signaled that they will start pulling back or that they may start pulling back on the loans they have been given to small businesses to weather this transitional period. so we don't know the exact date of the meetings, but this is the last week of april. i am not going out on a limb to say that it will happen this week. but we will find the readout and we will have to read between the lines to see if they will shift away from stimulus to more reform, and also whether they will continue to boost the rhetoric we have heard about boosting the private sector and boosting investment in advanced technology, in light of course of the pressure from the united states and the cutting off of those advanced chips from the united states. and also, any more support from the -- for the property sector.

or do they dial back? haidi: seems like beijing was quick to distance themselves from the comments made by its ambassador to france? stephen: debts rise, the ambassador essentially stepped in it when he said to a french television network friday that in his estimation -- that is how beijing is spinning it now, -- his personal views that the baltic states, including ukraine, essentially alluding to former soviet nations like estonia, lithuania and latvia are not recognized as sovereign nations. that created a firestorm of concern, anger from those states and others in europe that beijing was essentially declaring or changing its policy from 1991 when it did recognize the sovereignty of these former sovereign states following the dissolution of the soviet union.

by the ministry of foreign affairs, quickly monday afternoon in his regularly scheduled press conference, backed away from those statements, the spokeswoman saying "loose comments -- lu's comments in france were not a political declaration but offered an expression of personal points of view. china respects their status as sovereign countries after the soviet union social dissolution." again, this could undermine beijing's brokering of peace in ukraine as well as emmanuel macron's efforts to enlist beijing's help in bringing both sides to the table. haidi: our chief north asia correspondent stephen engle there with the latest coming out of hong kong. back to new york with su keenan and the first word headlines. su: u.s. secretary of state anthony blinken says students two warring factions have agreed

to a three-day cease fire. they will stop fighting temporarily after intense negotiation over the last two days. residents have fled and fern governments have accelerated efforts to repatriate their staff amid a full-blown battle for control of the north african nation. president biden and house speaker kevin mccarthy are set to enter the next stage of the debt ceiling standoff. the u.s. treasury department will release an updated estimate of their fall deadline by the end of next week, based on fresh tax revenue data. by diniz demanding more concrete proposals, and has rejected that spending cuts mccarthy is seeking as a condition of lifting the borrowing cap. shares in fox closed down more than 3%, after the media company said it is parting ways with tucker carlson, its most popular primetime television host. his departure comes after the network's $787 million

settlement with dominion voting systems. meanwhile cnn anchor don lemon says he was fired from the network, he was previously taken of the air for making comments about presidential candidate nikki haley. thailand's opposition party is on course to secure nearly 50% of the vote in next month's elections according to several opinion polls. one of the candidates tells bloomberg that they expected to win enough seats to lead the next government, but they remain open to a tie with like-minded groups if they failed to secure a majority. >> if we get the majority, say 260, 280 out of 500, i think we will be the main party to lead the new government. end of prime minister position will be from the pheu thai party. i am confident of that.

however, he added the upper house at 250, we may join with a few other parties. su: global news, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan, and this is bloomberg. shery: still ahead, why japan's kazuo ueda is looking to avoid fireworks at his first policy meeting as boj governor. but first, working out the fed's next move as inflation remains sticky, when bernie ark capital management joins us to talk strategy, next. this is bloomberg. ♪ did you know you can get someone to shop for you? stitch fix really gets me and what i need. even better? they save me a trip to the mall. it's easy:

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shery: u.s. futures occurred early in the session after trading sideways throughout the new york session. of course we are digesting data and not to mention what the fed might do going forward. one thing we are watching is the launch of the chicago board options exchange 1-day volatility index. based on options of maturities of about 24 hours. you can see the first day of trading there. it was a frenetic session. analysts were trying to find out what to make of those numbers. this of course happened in reaction to the big migration to short dated options contracts.

but there are no immediate plans to launch futures or options products linked to this 1-date vix. haidi: whether we are bracing for more volatility in the equity markets, it is one of the biggest areas of debate right now for investors. let's get the views from banrion capital management manager and ceo. shana sissel. someone whose views we follow closely said they not feeling comfortable in this volatility know, do you think we are setting up for more turbulent times in the second half of this year, and how do you benefit from that? shana: i do think we have more turbulent times coming our way. when you think about the current earnings we have seen thus far, and 94 of the 500 out of the s&p 500 companies have reported, you are seeing strength and stability in the earnings.

overall, the outlook is not looking so bad. now, we haven't had the big tech names, but they have made some cuts and laid off folks and i n will be pretty good as a result. now, that said, having that kind of economic stability only emboldens the federal reserve to continue in their restrictive policy. we have had seven months of declining inflation, but we are still well above 5%, well above the target of 2%. the fed will continue to feel like they can be restrictive as long as the economy continues to be this robust. the leading economic indicators are suggesting some negativity, we saw the lei drop 1.2% in march. we saw slight increase in unemployment, but we are still at three point 5%. overall, i think it is setting

up for the fed to continue to be restrictive, which is not good for economic growth. haidi: where are you finding opportunities with that positioning? shana: energy and materials as a market cap. those two sectors combined is the same market cap as apple. we have this environment where we have restrictions on growth which will make me go to some of the cyclical names, so energy and materials are one of the two places. one of them is copper. we are looking at a trend in increased use of evs, they use four times more copper than traditional combustion engine vehicles. there is increased demand for copper and that is beneficial to southern copper company. with a pe around 19, they have had improving earnings. strong balance sheets, strong cash flows. the other name is in the energy

sector, noe. five consecutive quarters of improving earnings, growth momentum, strong balance sheet, and materials sectors tend to do well coming out of market bottoms. shery: given the dispersion of returns we have seen, -- shana: it is positive for alternatives. i continue to focus on using liquid alternatives, alternatives available to anybody. a name like btal would do well if we saw increased volatility because it is short high increases. volatility increase will be beneficial for the fund. managed futures again on that commodity lay, taking advantage of some of the spread and the disagreement in bond yields, it was pointed out earlier that a lot of hedge funds are positioning because they think rates will increase. i am in that same camp.

taking advantage of some of the yield spreads and credit spreads out there is another good way to take advantage of the market and what we are seeing, what i think about slowing economic growth and continued increase of interest rates. shery: banrion capital management president and ceo shana sissel, always good to have you with us. we have more to come on "daybreak: australia." this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. evergrande auto will sell shares of two companies engaging in health and living projects for around $.30. it will deploy resources towards finding existing and future projects. evergrande auto halted the manufacturing of one ev because of insufficient funding, and is

a to resume production in may. disney began letting go of thousands of employees on monday, in a push to cut 7000 jobs this year. this is the second of what is expected to be three rounds of cuts, and it would bring the total positions eliminated to 4,000. disney is looking to save $5.5 billion annually by raising its commitment to general entertainment. much more to come on "daybreak: australia." this is bloomberg. ♪ as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network, with no line activation fees or term contracts...

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shery: shares of first republic plunging after the lender

shrunk more than expected after last month's banking turmoil. let's bring in annabelle droulers. ing is looking at modifications of monetary policy, what are they saying? annabelle: what this means for the likes of the fed, the ecb, ing says there is a growing signs that the stress in the banking sector will be leaving a mark on the global economy even as we have been discussing the most acute phase of the banking stress seems to be over. that is because cracks are starting to appear in the rate-sensitive sectors like tech. like other economists, ing does see rate cuts on the horizon. whether that will be the focus of the next central bank meetings, ing says that is unlikely because of the focus of reigning bama in inflation. as we look ahead to another round of policy makers

gathering, they are broadly expecting hikes of 25 basis points for the likes of the fed, the ecb, the bod, switzerland's bank standing out there with a50-basis point hike -- with a 50-basis point hike. the rbi is likely to stay unchanged because policymakers are awaiting more information -- rba. and riksbank the focus is unchanged. haidi: sticking with the boj, are they on course for policy tweaks by june? annabelle: yes, this from japan's biggest life insurer, they have been heavily scrutinizing their bond plans. what nippon life insurance is saying is that they are expecting their cap on the 10-year yield to be expanded 1%. this is a look at that longer

dated bond yields, they have come off their highs. but nippon life insurance says they are at levels that are not attractive. that if the yield is allowed to rise to 2%, that will be attractive. the cab on the 30-year yield is around 1.3%. let's go into more detail of why these decisions have been so closely scrutinized. essentially because any sort of buying or selling decisions of bond holdings of life insurers have huge ramifications and are very closely tracked, not only on the local market, but as far away as brazil, given that they are very big investors in that country. shery: no wonder, because what weather is expected to avoid setting of policy fireworks this week as he leads his first meeting as governor of the bank of japan. bloomberg's global economics and policy editor kathleen hays joins us from tokyo. no shock and awe expected from ueda.

kathleen: no, this is not governor kuroda taking over when the economy was still deflating, prices were going down in japan. prime minister abe had said, "we need somebody to get going and hit this hard." it's a different situation because now inflation is about 2% on ground and is expected to fall back below the target of 2% and slow down the boj from doing anything drastic right out of the gate. nevertheless that sets the stage here, a very different situation for governor ueda. he has to go about dealing with it in different ways. let's start by saying, no one has completely ruled out a surprise on the yield curve control this week, it's not their baseline, but let's keep that in our back pocket. our guest yesterday, former chief economist at the bank of japan, not ruling it out, thinking this will start later. and of course, mr. ueda spit into parliament on monday, said

it is too early -- speaking to the parliament on monday, said it is too early to normalize the ycc framework. normalization is usually talking about raising the rate, making a positive. that is often defined as normalization of policy. ycc and normalizing that framework is different. i want to quickly say also the possibility that fumio kishida party did well in the elections this weekend, maybe they held onto more seats. so there may be more early general elections. would the bank of japan want to make a move before that? that is another reason they could hold steady. 62% surveyed think the first shift from him would be a change in forward guidance, most likely we get a move in june or july. but this week we will get communication and current guidance. maybe not forward.

haidi: our global economics and policy editor kathleen hays in tokyo, there the bank of japan meeting. mizuho securities will join us later with their economic outlook ahead of governor ueda 's first policy meeting at 10:40 a.m. sydney time. let's get you the first word news with su keenan. su: we start with china's politburo meeting which is likely to take place this week, economists and investors awaiting signals around monetary and fiscal support. top leaders are expected to focus on boosting business confidence, increasing jobs, and strengthening the property market without more stimulus. the meeting will be closely watched for changes in tone or language. meanwhile, u.n. secretary general antonio guterres has confronted the russian foreign minister, sergey lavrov, over the invasion of ukraine. during a security council meeting, guterres called moscow's military operation, in violation of international law.

russia's top diplomat is in new york this week to lead sessions of the security council, as part of russia's-month long rotating presidency. to china now where, they are looking to distance themselves from remarks by its ambassador to france, who questioned the independence of former soviet states the. chinese military office says the comments were a personal point of view and not a political declaration. global news, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. haidi: a review of australia's military is recommending more spending on long-range missiles and countering risks posed by china's rapid military buildup. the view is quite explicit in planting out the threat from china. usually they dance around these things. have we heard much of a reaction? paul: this was raised yesterday, at the foreign ministry spokesperson conference in china.

he said china does not pose a threat to any country, it is committed to promoting peace and stability around the region, and hoped countries would not hype up the so-called china threat narrative. but as you said, pretty explicit this report, pointing out that china's military buildup is unprecedented, at a scale not seen since world war ii. last year they spend $292 billion on defense and it grows every year. in terms of what should be done, the report looks at innovation as a remote possibility, but what would be more likely would be australian supply lines might be threatened. emphasis on long-range missiles of up to 500 kilometers, less emphasis on things like troop carriers and the type of thing. one local columnist did point out that in the past year, australia has come up with two plans, this one, and then the aukus agreement, and in that time, china has built two submarines.

shery: paul allen joining us from sydney. coming up next,, goldman sachs' guest joins us to discuss the global outlook. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates, exemption certificates or filing returns. avalarahhh ahhh ahhh

ahhh haidi: we continue to see resilience across emerging market assets that are getting a boost, as inflation eases and central banks near the end of

their tightening cycles. dollar notes from nations the likes of argentina, egypt, lebanon and kenya are handing investors steep losses, though. let's find out what is behind this performance. we know that all em's are not created equal and they are national performance equally. why are we seeing this selective performance year? zijia: yes, there have been clear laggards in emerging markets even with the positive sentiments. the reason for this varies a lot but we are seeing across the board, a weaker credit market and also currency weakness and overreliance on the imf or other multilateral lenders contributing to this. in terms of debt consisted ability, we are seeing a spiral for a lot of these credit. shery: some of those worst performers, could there be any positive catalyst going forward?

zijia: yes. any indications of financing deals with multilateral lenders can be positive catalysts. we have seen the importance of catalysts in bolivia. for example, bolivia was one of the worst performers in early april. but it has had a sharp rebound in the last week, especially after we reported that it is reaching a deal with multilateral lenders. shery: yes, my country has seen some challenges in recent months. zijia song, our reporter with the emi head story. our next guest says the backdrop for em performers, we have yet to see potential materializing. joining us is the goldman sachs managing director and head of em cross assess research, caesar maasry. always good to have you back. how much of this disappointing performance has to do with the fact that perhaps china's growth

has not spilled over to the rest of the em's? caesar: i think that is a major point. thank you again for having me. as i said, if you look back for almost four months, global equities are up, dollar is down, rates software. we are close to the end perhaps of the fed hiking the cycle. china grew 9% plus essentially in the first quarter. so you would think this would not just be a good environment for em, it would be a great environment. yet em has underperformed. i think one of the main reasons is indeed, the reopening of china has be domestic -- -- service-orientated. you look at growth changes consensus estimates example of gdp this year, they have grown up for china, the u.s., europe. but they are flat to down for most of the ems. shery: that chart earlier shows the china outperformance is not

translating into em outperformance. please explain that to us, and when we can expect that to kick in? caesar: unfortunately, it may not, because we have already had a big resurgence in growth in china. to explain why it has not spilled over i think is a consequence of, we have reversed lockdowns punished -heavily on china growth last year. it is less about credit growth, less about infrastructure spend that usually spills into commodities. haidi: when you see the strength when it comes to consumer spending services, particularly high-end consumers, the worry is that the reopening trade fades. is that setting up the concern that the long-term fundamentals of china's growth will not be as they used to be, witches when we

last saw the lifting of all boats across the em complex? it's a caesar: different dynamic. it's not worse or better. everybody has been talking about the rebalancing of the chinese economy for a decade now. can better through the lens of the different nature of growth. to some degree, i think that does have a less positive effect for the rest of em. may be the better way to say it is that other ems need to reform and kicking in their growth drivers that are not just reliant on the commodity anymore. haidi: when you look at the fx element as well, how are you perceiving the trajectory forward when it comes to the u.s. dollar? does that mean the yuan is slightly less of an anchor, having that anchor impact across ems as it used to? caesar: not sure i would draw that conclusion. i would say that we do think the dollar is expensive, but the dollar is more expensive than em is chief. we do see the dollar -- more

expensive than the em is cheap. at the end of the day, that is slightly beneficial for em. there are some opportunities and winners -- again, dispersion is wired across the em spectrum, that as you suggested, it will not be a broad tide that moves all em stronger. shery: is em valuation -- when will em valuation get cheap enough, and how do you gauge that? what is? the metric that you follow at goldman sachs? caesar: we become more bullish when valuation comes in line. if i were to predict it, the way that i like to calibrate these things is on growth differentials. that is why we pay a lot of attention to these revisions. unfortunately, growth differentials have moved against em. basically saying that, the u.s.

outlook consensus has moved from thinking about a recession to a soft-ish landing, or a positive level of growth. the chart in front of you -- -- normally people would say that em looks cheap relative to higher growth levels and so on, but it has really come from underwhelming growth coming down to em valuations. are estimate forecasts some improvement into 2024 and 2025, but i am quite skeptical on the near-term performance title for em. very importantly, we should recognize that the global economy is still fairly fragile. we think the u.s. will have a soft landing, but we are talking 0.6% growth the next couple of quarters. we think the s&p 500 will trade lower over the balance of the year. in general you are not talking about a great risk environment. to answer your question directly, the best opportunities will be in relative value. we have highlighted latin

america, specifically brazil and mexico. it's quite tactical. last time we spoke it is probably the flip of that. shery: i think you work long brazil consumer discretionary stocks. caesar: exactly, coming into may, perhaps the debt ceiling issue with the u.s., we don't want to make it longer risk. we are not hedged. we want to be long brazil and short mexico, with mexico being more plugged into the u.s.. shery: caesar maasry, great to have you back with your top calls, goldman sachs cross asset research. you can get more analysis on top em . morehead. stay with us. ♪ the first time your sales reached 100k with godaddy was also the first time your profits left you speechless.

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haidi: thailand's top opposition party is studying ambitious goals as it closes in on a potential election when. opinion polls suggest that phea thai is on course to get 50% of the vote in the may 14 general election. but one of its prime ministerial candidates tells bloomberg that the parties also open to a tie up with like-minded groups. >> if we get the majority, say 260, 280, 280 out of 500, i think we will be the main party

to lead the new government and the prime minister position will be from the pheu thai party. i am confident of that. however, you add upper house and make 250, we may need to join with a few other parties. stephen: what will be your top priority in the first 100 days if you are chosen to lead the party and if you are chosen to lead the country? >> there are many issues facing thailand. the cost of living has gone up, energy prices have gone up, income level has been stagnant for a while so we have many academic policies to get the country going again. the social welfare, whether it is the health issue plus, policies to make life better for people, the right issues, whether you want to enroll in

the military or not, also lgbtq rights, marriage licenses for all of those people that have not been granted, the right that they should be granted, the drafting of the new constitution which will select members, the new constitution that we believe will be for the people. stephen: what is necessary to get thailand's economy out of its funk, get tourism back, get the property market back going? and why should voters pick your fitness acumen as their blueprint? >> they are not actually picking me as such. i think the strength of the pheu thai party is that in the last 20 years, parties under different names have consistently won the election every time.

so i think it is the strength of the party's the policies that we give to the people, the policies that hit people right where they want, i think that is the strength of the party. stephen: how badly, in your estimation, has the thai economy been hurt in the last nine years, since that may 2014 coup d'etat? >> it is evident after the coup d'etat, that the country as a whole has gone backward, in every aspect. when you compare to the previous nation -- to the peers nations in the asean. gdp growth has lagged behind those of vietnam, malaysia and philippines. it is clearly evidence that we are not doing as well.

especially in terms of fta negotiations that have not progressed at all. stephen: i want to get your take on some social moves that have been made in thailand. obviously we know that cannabis was legalized, there are moves afoot to potentially legalize same-sex marriages. there has also been a call, it has been talked about in the past, for a change to the laws regarding gambling and casinos. do you support the possibility of having casinos -- now that japan has approved it for the first casino -- is thailand next to open a casino in one of 22 possible designated areas like phuket? >> there are two questions. the first one i would like to address is cannabis. pheu thai do not support free use of cannabis, it should be only for

medical purposes. as for legalized gambling, i think it is known that legal gambling has been widespread in thailand. pheu thai party believes that by bringing the illegal activities, making it legalized, is the way to go, so that we can control tax collection. shery: pheu thai candidate speaking to bloombergs stephen engle. lvmh's market value has surpassed $500 billion, becoming the first european company to reach that milestone. the achievement is a result of blooming uxury goods in china and the strength in the euro. it joined the ranks of the world's 10 biggest companies less than two weeks ago. tesla increased its forecast for

capital expenditures again and is budgeting at least $7 billion for this year. the ev maker increased its forecast by $1 billion at both the low-end and the high-end, compared to january this year. that is it for "daybreak: australia." "daybreak: asia" is next. this is bloomberg. ♪

♪ shery: