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shery: you are watching daybreak asia live from new york, sydney in hong kong. annabelle: we are counting down to asia's market opens. paul: alphabet and microsoft shares rise as the tech giants the estimates. both are seeing strong demand in cloud services. sk may post their worst decline on record. president biden hosts south korea's president as washington seeks closer alignment on china and russia. first republics disappointing earnings and asset sales rekindle worries that banking turmoil may not be over yet. annabelle: the concerns around first republic are weighing in on the session. what we are seeing in the open

in japan, korea and australia, focusing on what we are seeing. back into safe haven assets, traders are pricing in a peak in the fund rate and that is playing out in new zealand in australia. both markets are shut for public holidays. the drop in yields. we are seeing the yen as well rising against the greenback over the past you sessions. we are on a watch for the boj meeting to conclude. it coin has been given as well as a safe haven asset. factors playing into this, we saw u.s. consumer confidence weakening in the prior session and a reaction from first republic. the other thing in play today in the earnings we have had after the bell -- we will get into the details later the question is whether those better-than-expected numbers from microsoft will be enough to

offset the weakness that came through in the session. we are seeing a drop for the open in australia and new zealand, trading to the downside. watching china. we've seen the golden dragon index slumping on its longest losing streak in more than a year. the golden dragon index is off 10% over the course of april alone. shery: take a look at u.s. futures trading. we are seeing upside from the positive kickoff to the tech earnings season but in the new york session, we saw the s&p 500 dropping the most in two months. treasury yields are retreating. you mentioned the first republics disappointing earnings and the asset sale the bloomberg learned about not to mention data showing the u.s. consumer confidence numbers dropped to the lowest level since july. also regional manufacturing reports were underwhelming, so all of that taken into consideration, we have oil

prices under pressure in the asian session. a little upside but below $80 a barrel you can see that with first republic. it take a look at those after hours trading numbers. we are seeing sales recovering. microsoft jumping more than 8%, profit and sales topping estimates. texas instruments gaining 2% despite the lackluster forecast for the current time. let's bring in bloomberg's su keenan latest. let me start with you, go into the details of what was happening at alphabet, because it seems investors are taking it positively. what did they like? >> it was better than they feared and everyone was thinking about the negative impact from chat gpt. so that did happen. look, in the case of alphabet, cloud was not positive.

compared to microsoft, the fact that they grew at 7% and alphabets topline was 3%, softer is holding off much better. but i do think alphabet is the most resilient when it comes to digital ad spend and that is what we saw in the results. paul: alphabet also announcing a buyback. what is the reasoning? >> i think a lot of focus was on their cost structure and they announced a layoff earlier in the year. they are trying to focus on capital allocation, given this company will generate 70 to $80 billion in cash flow. what they are trying to do is keep buybacks in line with their free cash flow, which is what you are seeing. $70 billion in buyback authorization. shery of course we are following microsoft as well. we saw interest in orbit demand

resilient for their cloud services. su: that was news that investors wanted to hear it and we saw the shares market higher in extended trading as the conference call indicated that the outlook microsoft was giving was going to exceed expectations. this was not anticipated. higher personal computing sales, growth in the cloud and most importantly the big number, fiscal fourth-quarter revenue of 54.852 55 85. they're committed to leading the ai platform wave, boosting fourth-quarter cap ex material and most significantly, full year 2024 capital spending to support ai. this has been a focus for the company. microsoft invested billions of dollars in open ai, the company behind chat gpt.

they rolled out or announced plans to deploy the technology across their products. microsoft 365 and when we talk about third quarter, that was a big beat. analysts point out a beat on lowered expectations. they have been warning that cloud use was probably going to be muted because of the downturn. their story in meeting expectations was resilience of the corporate customers. microsoft signaling that they would come in in line but it is the outlook that is boosting the stop. third quarter profit beat the revenue. it climbed. currency is in line, selling from commercial cloud products from office. software rose. deal renewals is a big part of that. again, we had one analyst, i

should say portfolio manager, dan morgan, say that this was reduced expectations. really we are looking for a strong forecast and they got that. that is why shares are reacting late in the extended trading session. we will see if this translates in the u.s. wednesday markets. paul: bloomberg's mandeep and su keenan. let's get to the first word headlines, president biden has announced that he will seek reelection, readying a campaign against the re oldest president at age 80 but he is imploring voters to quote finish the job. his quest for a second term begins with consumers battling sticky inflation and potential recession looming. u.s. house speaker kevin mccarthy is refusing to say whether he secured support from reluctant republicans to pass

the debt will. he spoke hours before a key house committee was scheduled to line up for wednesday's vote. if the bill falls flat it could delay the start of talks over the debt ceiling. new fighting in sudan is testing the fourth attempt at a nationwide cease-fire since the conflict flared earlier this month. smoke rose from the presidential palace with violence reported in nearby cities. the clashes came hours after the leaders of sudan's army and the rapid support forces military group agreed to a truce. tokyo-based i space says they've lost contact with a spacecraft aiming to land on the moon. ceo says that they are assuming the landing field. they lost contact with the lander at some point during its descent. i space launched the craft in december aboard a space x falcon

nine rocket. it was the first commercial attempt to place a lander on the moon. those were your first word headlines. shery: let's turn to an exclusive story by bloomberg on first republic bank, looking at divesting up to $100 billion of assets as it tries to recover from the turmoil. bloomberg's saly leads the finance team and joins us now. how much is this expected to help? >> first republic is seeking a rescue deal but most likely will have to involve capital injection from an external investor. now this of assets which include mortgages and securities is sitting on the balance sheet damocles sword. no investor or potential deal really wants to have these assets in have to absorb these assets. it has to sell them but it is complicated by the fact that it made loans when rates were low

and the aggressive patent of -- pace of rate hikes, they are worth a lot less, so that's making it complicated and hampering a deal. paul: first republic, often some attractive deals to some of its loan owners. considering that, who is lining up to buy assets? sally: they could be interesting to private equity firms potentially. the issue with these loans is a lot of them are interest only, so they are appealing and attractive for wealthy clients. they struck agreements with jumbo mortgages whereby they probably would not have to start repaying for something like 10 years. that makes those loans which now are effectively throwing off cash very on appealing to a lot of banks who might find that less of an interesting play for them to get involved. other firms, potentially

investors might be willing to accept assets that do not necessarily generate cash. it's going to be very challenging and any kind of deal will require government intervention. the government is in a complicated place because it has extended and offered liquidity backstops to first republic and other banks facing the same turmoil. first republic if you remember got this enormous 30 billion injection from other banks to help it survive. if it does not survive it will show the public into the private options, private measures to try to sustain it have not in fact worked. so really now, things are coming down to the wire. and the banks are on the hook for 30 billion, so they do want a deal but it is compromised by

this giant pool of assets whose value has been eroded. it will be a real sticking point for a deal. paul: bloomberg's sally there. still, south korean president yoon head to washington. details on the visit, just ahead. but first we discuss investment strategies and why it is get into emerging market stocks. this is bloomberg. ♪

paul: all right, let's take a look at this chart. it is a four-day look at volatility and it speaks for itself. yes, it is going up and it was an interesting session for u.s. equities. volatility, volume and the fed selling. our next guest says volatility will remain high. let's see where the opportunities are in this environment. with pooja malik. how are you trading around volatility? pooja: the way we are trading around it is we are looking for

stocks that are protected, stocks that domestically are exposed to the domestic local stories in emerging markets as it relates to globally related stocks. we are looking for domestic exposure at this time. paul: so you also have some thoughts on chinese stocks as well. we have noticed that we have seen reasonable gains for the shanghai composite but also outperforming the s&p at the moment, is this the place to go to wait out volatility? do you think the reopening trade for china is played out? pooja: i think the trade is going to continue because we will see earnings grow this year and next year. both years we are expecting growth from equities and the earnings will be better affected and captured in the small and mid-cap segment. the point you alluded to, the csi has been outperforming china

almost 8%. it is not because of fundamentals, but the large-cap stock which is semiconductors, they have been impacted by u.s. negative sentiment. small caps are a place where earnings translate into returns which is why we favor stocks in that space. paul: do you think emerging asia has a boost from china's recovery and reopening that we were expecting or has it been a domestic china story? pooja: it has been a domestic story because international travel just opened up. i expect the next quarter, quarter to in quarter three, we are likely to see that play out. in anticipation of that we have stocks in thailand exposed to china that we expect will benefit from the recovery and open trade. shery: you noted it is time to be in true emerging stocks.

explain that to us? pooja: when i say global stocks that are listed in the e.m., there is the mega cap chinese stocks. alibaba and tencent. they are vulnerable to u.s. sentiment. they are vulnerable to foreign investors and flow from the u.s.. and of course the semi conductor chain in korea or taiwan and u.s. policy, u.s. regulation, as well as investor flow will impact these stocks. on the other hand, stocks we are looking at our for example green appliances, consumer appliances in china. a very domestic local story. we're looking at hospitals in thailand exposed to the chinese recovery story. you're looking for consumer staples, packaged goods, telecom is a sector that we see. we are looking for high dividend yield domestic stories less exposed to the u.s..

from a geopolitical standpoint and interest rate standpoint as well. shery: where does that leave semiconductors? you mentioned korea and taiwan. we have president yoon in the u.s. but geopolitical tensions are at the forefront. pooja: i agree with you. we are staying away from those stocks not because we do not expect the earnings will be there, but the pressure throughout the supply chain and uncertainty over the regulatory front is too high. the way we are looking at markets right now is there is so much volatility in the market. the market is giving us a lot already and we do not want to be in the volatile sectors. we want to stay in predictable sectors for the rest of the year. shery: volatility means investors getting to haven assets. pushing the dollar higher. what would that do to emerging-market trades? pooja: the dollar has been strong last year.

i expect that to slow down. this yearthis year the dollar ha pause and if the fed does pause interest rate hikes i expect the dollar can stay where it is, which would be helpful. last year equities had been fighting the dollar headwind. in fact last year equities lost 5% because of policy moves. this year that positive number is positive. the slowing u.s. dollar is likely to benefit e.m. equities. paul: paul: pooja malik, partner at nipun capital. i want to give you breaking news out of i space which was open to become the first company to make a commercial landing on the moon. it appears that that has not gone well. they say it appears that the lander made a hard landing on the moon, which is another way of saying it crashed.

it's difficult to complete a moon landing and it does not think it can restore the lander connection. not the outcome they were hoping for. shery: breaking from sk as well. much awaited data when it comes to this giant tech company in south korea. first quarter consulting loss at 3.4 trillion yuan, a little bit smaller than the estimated loss of 3.46 trillion. remember, they have faced many challenges so the expectation was for the worst revenue decline on record. when it comes to sales, 5.0 9 trillion. the estimate was 4.9 trillion yuan. let's bring in stephen engle who has been following what's happening with global tech, especially sk. what do you make of the numbers? stephen: there in line with the

consensus estimates, a little better. given the backdrop, a little bit better is not good enough really. the chip industry is in a slump and we seen that for the second consecutive quarter of deep loss. revenue was down 60%, so this is the worst decline on record for sk. essentially consumers around the world, this is what tech companies are facing. consumers are not buying and customers are trying to work off inventories that they stocked up on through the pandemic. we were talking the first quarter, chipmakers were having about three to four months of inventory piled up, so they need to work those up and prices have fallen correspondingly. bloomberg intelligence has a take prior to these earnings because there is no shock in these numbers. they essentially say sales might have fallen as they have. we are seeing sales at 5.0 9

trillion yuan. the estimate was four point 9 trillion, so better than expected. data out of south korea has shown that falling demand, the average selling price might likely largely decline according to bloomberg intelligence. we do not have those average selling price numbers yet. we are just starting to see inventory levels as customers decline in the first quarter. gradually materializing material across the industry to improve from the second quarter, so they are giving guidance now. that is the latest headline. inventory across the memory industry is to improve from the second quarter as they work off those excess inventories. that's the latest news. improvement in marking conditions on the second half of

this year. paul: this is a famously cyclical industry. sk as you mentioned, they are going to rebound in the second quarter. inventories are declining. how interesting -- realistic is this outlook? they are anticipating improvement in the near future? stephen: we've had a couple straight quarters of pain and now the deadline, they say memory market seems to be quote unquote bottoming out. so they claim that we are seeing the bottom right now, perhaps as we go through the first half of the year they start to improve. again with the prime minister -- the president in washington now, the geopolitics is also a potential overhang. they also could potentially boost sk hynix. keep in mind, they make about half in china.

they have a one-year moratorium from the export control, the science in chips act that was enacted in october in the united states. they have one year essentially to comply. they could have chipmaking in china. they of a large factory. are they going to move capacity out of china, the friend showing concept or are they going to be able to put a moratorium on that? questions into the second half of the year as the moratorium expires. sk hynix see is improving conditions coming in the second half. shery: how has the stock been performing and what can we expect at the open today, steve? stephen: well, the stock is not too bad. the stock is 00660 ks. excuse me, 000 ks.

i got to put another zero in there. i think it's up -- it's up about 14% so far year to date. let me just -- i cannot seem to pull it up. there is, if you can pull it up. there it is. it's up about 14% but again, it has had that pressure on all of the chipmakers from micron to samsung as well as sk hynix. we will get the opening numbers in about a half an hour now. paul: all right, chief north asian correspondent stephen engle there with the numbers out of sk hynix, as you mentioned the worst revenue decline on record. seeing revenue improving in the second quarter. we will bring you more details on the results as we get them. let's get a quick check of the business flash headlines. texas instruments has given a lackluster forecast indicating a slump in chip demand spreading

to unscathed areas. second quarter revenue will be around 4.2 to 4.53 million dollars, the worst drop in what analysts were expecting. first quarter revenue fell 11% and the company says every center except automotive is suffering. apple is working on an ai powered health coaching service and tracking emotions. they're planning to use data to create programs tailored to specific users and they plan to use iphone algorithms to determine a users mood, find their speech and the words that they type. they are looking to lock in health and wellness features. more on sk hynix. 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

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shery: we take you live to washington dc where you can see presidents biden and yoon at the korean war memorial. this commemorates thousands of american soldiers who gave up their lives during the korean war and of course this is a significant week for the south korean and u.s. alliance. 70 year in a verse three of this partnership after the korean war. high-stakes talks with president biden and the south korean president. they are expected to hold intensive conversations on wednesday but you can see them participating at the ceremony of the korean war memorial in washington dc that commemorates more than 30,000 americans who sacrificed their lives during the korean war. we heard president yoon speaking

today at the u.s. chamber of commerce, saying the u.s. and south korea are optimal partners for establishing stable supply chains because they can trust each other more. he -- this is a u.s. effort to reduce reliance on china. he called it more important than ever. you're taking a look at live pictures of the memorial in washington dc where president biden and the first lady of the united states are anticipating. let's bring in bloomberg's sam for more insight on how this visit by president biden is going, sam, we heard president yoon speaking. we know he arrived with more than 120 executives. how important is this state visit for south korea? sam: it is true that he brought a lot of business executives with him to washington.

actually, i was at the u.s. chamber of commerce event where he was speaking with u.s. secretary of commerce gina raimondo and it was impressive to see this army of business executives including chairman from sk hynix and samsung. what he is trying to do is he is trying to get these business executives and companies to invest in the u.s. while he is able to secure deals from u.s. companies that are expanding their footprint to south korea. the focus for this summit with president biden is get the two countries to align their economic interests more when the u.s. sees china as a threat going forward in terms of economic power and political insecurity power. so they basically created the tip of the spear for the u.s. as it competes with china. paul: at the moment though,

china is south korea's largest trading partner. could that change however? with more friend shoring with the u.s.,'s could the u.s. supplant china? sam: china remains an important trading partner for korea but at the same time as we've seen in recent months, exports and china have been dwindling. also south korea, the trade deficit with china has been growing in recent months. whereas the u.s. has a share of exports and has been growing very fast. in fact, the u.s. might replace china. the u.s. influence in the korean economy is getting bigger and bigger. shery: editor sam joining us from washington and following the state visit from the south korean president to the united states.

the semi conductor industry as tensions continue. to discuss name broader chip industry as well as results. senior tech hardware analyst. great to have you with us. let's get started with the results, because we knew that it was going to be a bad set of numbers, given what we are seeing in the economic slump and really the chipmaking slump that has continued for months. what do you make of the latest results? >> first, thank you for having me on the program. the results came in in line with expectation. they are making a statement that they should see better fundamentals in the second half, so so far pretty much in line. what i would like to hear from

the conference in 50 minutes is the extent to which they are taking active action. the industry collectively has gone on the offense by taking capacity off-line as a way to better manage funds and price decline. coming off-line is going to help prices into quarter three. they have the confidence to expect midyear or quarter three timeframe. shery: how much midyear impact to do u.s. and china tensions have so far when it comes to sk hynix trying to share to china -- sell to china and take more market share? >> they have the existing capacity in china, they have secured an extension for

shipping what they make in china to outside of china. there is no guarantee that the u.s. would renew its licenses. for sk hynix, there is a dilemma here of what to do with capacity that would need to be upgraded. if the u.s. does not give them a license renewal, then they cannot talk in china and therefore they will be at a disadvantage when it comes down to cost. managing costs is very critical for memory in particular. if they do not get an extension, it gives an advantage to the competitors. paul: sk hynix seemingly a little bit more optimistic about the immediate future, saying that customers arctic lining, they see revenue rebounding. how credible is that narrative to you? >> well, after perhaps 15 months

of trying to work out inventories, the manufacturer and also time to be hopeful that the inventory will come down to normal levels, this is one of the worst downturns in the memory industry. it started in the spring of 22 and perhaps it will take 18 months to go through this correction. given the fact that the memory industry rolled over in 2022, yes, we are optimistic and hopeful that there will be a better fundamental outlook going into the second half. paul: it's barely higher than it was even five years ago. would it be recommended for investors to buy this? >> i think when i look at sk hynix, samsung and their competitors in the u.s., micron,

i would think that micron and samsung are better situated to benefit a recovery in the memory industry later this year and into 2024. as i said earlier, sk hynix may have to spend more in korea for the capacity that cannot be upgraded in china. to that extent samsung and micron are better situated compared to sk hynix. paul: all right, senior tech hardware analyst at susquehanna international group, thank you for joining us with your thoughts on sk hynix. let's get over to in a bow for a look at the markets. annabelle: thank you, paul. a big earnings today in the session. what is interesting is we are starting to see that build into a positive session, sentiment rather for futures. nasdaq up more than 2% but it was overall a better than

expected start to the big tech numbers. alphabet, the cloud unit making money for the first time. overall sales as well indicating that the company is withstanding the increased competition in the space and microsoft is seeing resilient demand for its mainstay cloud business and its services unit. that is giving us supportive signals into the session but broadly when you change on intraday data, there were a couple of factors that weighed on u.s. stocks and you can see that for japan and australia opening of the top of the hour. consumer confidence in the u.s. weekend and you see first republic numbers, reaction to those, share price or earnings after the bell in the prior session. it dropped but they are planning an asset sale. these are week numbers that sparked a return to the bond market and we are seeing as well the retreat at the front end of the curve.

traders are betting that the peak in the fed funds rate may be lower than previously forecast. shery: do not forget, the manufacturing reports were underwhelming, so we have a lot of dim economic numbers from the u.s. to digest. let's go to the first word headlines. german chancellor has invited china years -- chinese premier for talks in berlin in june. it is olaf scholz latest bid to ease tensions between europe and beijing. olaf scholz will aim to enlist china as a key partner on challenges including promoting global peace and tackling climate change but we are told he will set out so-called red lines on taiwan. the federal reserve is closing a loophole that funds used to take it vantage of the reverse repo facility, raising the criteria for access to the rp to exclude funds organized for the purpose of accessing rrp operations. since last june, 2 trillion dollars have been parked in the facility which offers a steady

rate that is often better than alternatives treasury bills. binance. u.s. has called off a deal to buy crypto broker voyager over a hostile and uncertain u.s. regulatory climate. it comes less than a week after regulators dropped the deal in court. the deal for voyager has been trying to repay customers since finding -- filing for chapter 11 protection. those are your first word headlines. paul: ubs group is likely to report a gain of as much as 50 $7 billion in second quarter profit related to the acquisition of their rival, credit suisse. the ceo told us $28 billion of net inflows in the first quarter were a sign of investor confidence in the merger. >> at times of distress in the markets generally the first quarter is very challenging. we still have clients looking at

ubs as a safe haven and the inflows were coming from all regions. and from different sources. and in that sense, we are very pleased. it is particularly after the announcement of the transaction good of the credit suisse, we saw inflows coming into our bank. a sign of confidence of our clients. >> the chairman guided us a number of times that the integration takes four years. is that a global regional guidance? >> this is a complex transaction. it is a transaction that we love for a huge opportunity. it is extremely, mentally in many areas. and also to our employees.

to execute a transaction of complexity takes time and we have to do things in the right way. we should not hurry into doing things that just for the sake of closing a transaction in a couple of years earlier. >> what kind of milestone do you have? you thought about this deal for many years. what is the thing in your mind that says i'm succeeding? >> well, for me, it is more emotional than a miracle. i would say that in three to four years time, i would like to see a combined organization. very proud to be associated with it. >> social and political banks, lots of people say they're going to have to give up a piece of the swiss universal fund to appease the people.

again, your response to the application. >> we have a lot of experts on how to run banks in switzerland, so i think that the only thing i can say is that we will take our time to make the decision based on facts and not emotions. and i'm sure it is going to be a good transaction. >> ubs ceo sergio speaking to bloomberg's manus cranny. it's a big earnings day for hong kong. investors as well. some financial giants will be reporting first quarter results. they will show the impact of rate hikes on margins. investors will hear about the possibility of fresh buybacks. we are watching the insurance industry, under pressure from chinese regulators to scale back returns. sk x shares will be in focus, a year on year improvement thanks to higher investment of income offsetting a slowdown in ipos.

plenty more in a moment on daybreak asia. this is bloomberg. ♪ les tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

did you know you can get someone to shop for you? with stitch fix, it couldn't be easier. i share my style, size and budget. and they shop just for me. my shopper sends me stuff i feel good in. i keep what works, and send back the rest. stitch fix. shery: on thursday ueda will lead his first meeting as governor of the bank of japan. we learn more about his life and the factors that have shaped him

as an economist and a leader. >> ueda was born west of tokyo, the capital city where his family eventually moved and he grew up. his uncle says he came back to visit, riding the train all by himself at the age of 10 years old. >> he was an independent kid. he would listen to english broadcast on a portable radio. we did not understand what he was listening to. his cleverness stood out in the family. su: ueda's career as an academic and central bank governor got off to an auspicious start as he earned his phd in economics at m.i.t.. well-known alumni include ben bernanke, mario and philip lowe who all went on to become heads of major central banks. a former colleague says he will use his skill at communicating complicated aspects of unconventional monetary policy clearly to investors in a way that will maintain market stability.

>> using the framework of economics would be that he is personal sense. tools to enhance communications to the market. both domestic and global. su: former fed chair is a top academic became a central banker. any policy changes made at the boj under ueda's leadership will be gradual. >> you do not dismantle the whole thing right away, you move out slowly and with a lot of thought about what do move out of first, second, third, fourth. i'm sure he's thinking about that a lot already. >> he has helped guide boj policy in the past. he made his mark in 2002 when as a member of the boj policy board he voted against a majority decision to raise rates. saying he needed more data. now he is facing the real possibility that in the near

future, japanese inflation will reach 2% in a sustainable and stable manner that policy normalization requires an bracing for the large adjustments the economy and markets will have to make in the turbulence that could result. >> we have to make an appropriate judgment in advance so that such a thing does not happen. >> investors in japan and around the world are waiting to see if ueda can thread the policy normalization needle. starting this because he presides over his first policy meeting as boj governor. kathleen hays, bloomberg, tokyo. paul: as we count down to the boj meeting, we will be speaking exclusively to former deputy governor in his first interview since his term ended in march. that is coming up at 9:30 a.m. sydney time on thursday, seven: 30 wednesday evening new york. this is bloomberg. coming up next, japan's myspace

admits failure in its first commercial moon landing. we know what went wrong in just a moment. this is bloomberg. ♪

>> we could not complete the

landing on the lunar surface. our engineers have continued to investigate the situation and we will update you with further information. when we finished the investigation. paul: that is i space ceo talking about the companies will your to land what would have been the first commercial vehicle on the surface of the moon. company is also saying it does not to get can restore connection with its lander. for more let's go to bloomberg bruce in hong kong. i space is calling it a hard landing. what do we know about the failure? bruce: they issued a statement an hour ago saying there is a high probability that there was what they called a hard landing. in other words, a crash. the attempt took place around 2 a.m. japan time. the company said it lost contact with the spacecraft at some

point and then as far as what went wrong, we do not know. the company has not said. they're going to need to investigate. i space is a company that an ipo in japan a few weeks ago. the stock price has done well in the weeks since. we will see soon how investors respond to the news. shery: what does this mean for efforts to have companies active on the moon? bruce: i space was one of several companies that have intentions on landing on the moon. in addition to them, there are two u.s. companies that are planning missions to theso they, there is a possibility now that one of the two american companies would be successful in being the first company to land on the moon up until now. the only landings on the moon have been by national space agencies. paul: bloomberg reporter bruce in hong kong with an update. china says its first mars rover

has not woken up from a months long hibernation, ending a mission that had exceeded expectations. its chief designer says the vehicle stayed idle because of an accumulation of dust on solar panels. it landed on the red planet in may of 2021 and had been exploring terrain for about a year. the original plan was for it to run for three months. and we have got space capital sharing their investment strategy and outlook for the space economy shortly. founder and managing partner chad anderson will join us at 8:40 a.m. hong kong time. shery: these are stocks we will be watching when trade opens in korea and japan. we will be watching semi conductors as sk hynix posts its second straight quarterly loss. it's japanese partner is set to announce earnings wednesday. south korean president yoon is in the u.s., looking to seal deals from an array of companies including some chipmakers. of course his meeting with

president biden in the u.s.. he has just gone with president biden to visit the korean war memorial in washington dc. he will have more intensive talks with the u.s. president on wednesday. the market opens in sydney, soul, and tokyo are next. this is bloomberg.

shery: we are counting down to asia's major market open. microsoft and alphabet, surprising to the upside. we have plenty of results coming from asia as well. paul: australia returning to trade after a market holiday mist today and cpi numbers out of australia later on as well. annabelle: we will be watching the rba closely looking on whether it's holding -- looking at whether withholding rates. we have the start of trading here for cash treasuries. you did mention the big focus on earnings because we've had alphabet and microsoft both beating optimistic outlooks.

a better start than expected to the big tech earnings season. that's been lifting the nasdaq futures in after hours. the session looked very different on wall street intraday. we saw u.s. stocks dropping the most in a month, concerns around first republic bank, disappointing consumer confidence data that came out as well. the 10 year yield, in focus at the start of trade. we saw it dropping around 10 basis points or thereabouts. . now just rising fractionally. the dollar as well advancing there. holding fairly steady. the japanese yen, in focus. a lot of focus on building and said that boj tuesday meeting that starts thursday. we are seeing the nikkei 225 come online a little bit weaker in the session. one company in particular we will be watching closely is ispace. we have yet to see stocks of the company start trading. not matching quite yet.

ed had been aiming to become the first commercial space company to reach the moon's surface. it's lost contact with the lender that was supposed to touched on earlier. we have the open of australia as well. we are back from a public holiday here. we are seeing the asx 200 coming online a little bit weaker. and had been indicating a drop of more than half a percent at the open. likewise we are watching that retreat in the 10 year yield tracking what we had in treasuries in the prior session. oil, in focus. a little bit stronger at the open here. so we have seen it falling over the last session given those concerns showing up in the u.s. data. the signals we are seeing of economic deterioration. we have career markets coming online. we are looking for any sort of outcome -- korea markets coming online. we are looking for any sort of outcome from the meeting later today. we have the high next coming online after a quarterly loss.

shery: will have a little bit of upside. 2.6%. posting a second straight quarterly loss after sales plummeted. let's get more from stephen engle, joining us from hong kong, following the latest results. this is really underscoring the depth of the downturn facing the global semiconductor industry. and yet the stock itself right now seems to not be taking such big hit -- such a big hit. >> these results are not a surprise at all. we were expecting this second straight quarter a quarterly loss. as well as revenue was down as well 60% year-over-year. in the calendar's first quarter following the big downturn we saw in the calendar fourth quarter. this was not surprising. the numbers were a little bit better than expected. we can bring up the graphics to show the exact numbers. some of the guidance perhaps is

lifting the stock. they are seeing this current downturn perhaps is bottoming out and they are seeing demand perhaps pick up into the second half of the year. this is a boom bust cycle industry. so obviously they are seeing a bottoming out perhaps right now turning into the second half as customers work off those excess inventories. in the first quarter, we were hearing from memory chipmakers around the world essentially saying that they were having three to four months of inventory that they needed to work off. essentially it was tough going to work off that inventory the customers built up during the pandemic when there was so much demand and chip shortage. the chipmakers were building up capacity. now they are slashing capacity obviously to work off those inventories. exacerbating that has been the slump in demand for electronics globally. in particular in china, of

course, the largest smartphone market and pc market in the world. it is tough going right now. but i got perhaps why you are seeing some gains. the sk hynix, 1.87%. they see a bottom to this trough. paul: let's bring in our macro strategist at state street global markets. we had some remarks from -- remarks about consumer demand bottoming out. do you see this as a positive sign for economies more broadly heading into the next quarter? >> so, in our view, we are still not too positive when it comes to this current season. a lot of expectations are still a bit too positive. given that in order for the u.s. to really bring inflation down, the economy needs to slow

quite substantially and we are not quite there yet. we continue to expect guidance to become a little bit more negative and some downgrades as well. paul: where do you sense we are in the inflation fight at the moment? most traders are expecting another 25 basis points from the fed. do you feel the scene is increasingly getting set for a pause? >> in our view, we do agree the fed is likely to hike 25 basis point this upcoming meeting -- 25 basis points this upcoming meeting. really sort of evaluating the fallout from the banking crisis we have just seen. to see the impact on inflation and growth. in our view, the expectation of cuts is being priced in. it is a little bit too positive.

i think the fed is likely to be more data dependent to see how the economy is reacting to what's been happening in terms of tightening and the banking crisis. we will get more details on terms of the fed seen and where things are heading into the fall time. shery: which is why the dimmer economic outlook in the u.s. and globally is pressuring a lot of the corporate results and the outlook, especially when it comes to the semiconductor side of things and you see the results from sk hynix as well. they expect a rebound. when it comes to their broader demand -- the broader demand out there from corporations, i.t. spending, when it comes to their broader tech sector, how cautious are you? >> so, we are still a little bit negative on that side. we do agree there a lot of struggles when it comes to semiconductor -- to the semiconductor sector. it's been on a down cycle for a little bit. given the upcoming demand globally, it is likely to deteriorate further.

we are sort of preferring to stay more defensive when it comes to equities to really stand those large cap consumer staples like health care to write out -- ride the current headwinds. shery: do you like anything and japan given that we are watching what the boj does? >> in terms of equities, we are a bit negative on japan. the earnings have not been doing too good. sentiment in terms of investor flows we are seeing is really more into the selling territory at this point. investors have been sitting on quite a bit of an overweight. there is a risk of unwind. the terms of the boj's upcoming meeting, we don't think they are likely to do anything in terms of euro control. what that means is that there's going to be headwinds in yen equity side of things for sure. -- for both the yen and the equity side of things for sure. paul: do you feel some emerging

markets in asia have gotten the boost that you were hoping for from the china reopening trade? >> we do like em asia given that the overall positioning of flows from investors have been quite resilient, despite facing a bit of a more challenging risk environment. we specifically prefer more the southeast asian region compared to north asia which to the earlier point, is more geopolitical pressure. to the south side, we have less geopolitical impact. china is also more on the manufacturing good side. were also positive on the aussie side of things. shery: thank you. let's get back to belle ny the movers in the asian session -- and the movers in the asian session. tower semiconductor's doing? --

how are semiconductors doing? annabelle: the sk hynix is up about 2% at the open here. these results were very much expected. but still it is posting at second straight quarterly loss. revenue plummeting about 60%. an operating loss of 3.4 trillion won for the three months ending in march. they average analyst estimate was for 3.4 6 trillion won. largely in line with estimates but underscoring the depth of the slow down facing its history. we are seeing other chipmakers in the session looking a little bit weaker in the session. we are 10 minutes underway for japan and korea. it's very much results driven. he also had texas instruments out after the bell earlier. shares have been swinging in late trading here. 1.5%. i also gave a forecast that pointed to sluggish demand in the months ahead. speaking of after-hours

earnings, the focus also on microsoft and alphabet in the after our session today given both of those companies reported better than expected numbers. we saw alphabet beating expectations on the back of a recovery. ad sales. as well as microsoft beating expectations. stronger growth for its azure cloud services as well. in terms of how that's playing out, we are seeing a mixed picture for the big tech names here in asia. we are not seeing any major moves except for sony down 1.3%. another company is ispace, the commercial space craft company that had been aiming to reach the moon, landing has lost contact with its career. that is on thing we are watching at the start of trading. the spread, not quite yet matching. paul: let's get a check of the first word headlines. president biden's formally

announce he will seek reelection in 2024. biden's already the oldest u.s. president at the age of 80. he is imploring voters to let him "finish this job." his quest for a second term begins with consumers battling sticky inflation and a potential recession looming. renewed fighting in sudan this testing the fourth attempt of the nationwide cease-fire since the conflict flared earlier this month. smoke was seen rising from the presidential palace in khartoum. violence, also reported in nearby cities. the clashes came hours after the leaders of sudan's army and the rival rapid support forces military group agreed to a 72-hour humanitarian truce. tokyo-based ispace says it has lost contact with the aircraft aiming to land on the moon. the ceo says, assuming the landing failed, the company says there is a high probability of

a hard landing on the moon. it was the first commercial attempt to place a lander on the moon intact. china says its first mars rover has not woken up from a month's long hibernation, potentially ending the mission that had exceeded expectations. the chief designer says the vehicle has stayed idle probably because of an accumulation of dust on its solar panels. the rover landed on the red planet in may of 2021 and had been exploring the terrain for about a year. the original plan was for it to run just three months. those were your first word headlines. shery: coming up -- over taking volkswagen to become the best-selling car brandon china. details, just ahead. president biden launches his reelection bid, setting the stage for a possible rematch with donald trump. we will look at why that could be both a blessing and a curse for his campaign. this is bloomberg.

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>> the fundamental drivers here are people are looking for information in commercial categories. they find adds to be highly relevant. all those aspects remain and

as i said we will be testing it as we go and i feel comfortable we will be able to drive innovation here like we've always done. shery: the alphabet ceo, on the search in the ad business. microsoft and alphabet exceeded expectations. a big part of the outlook. su keenan joins us now. let's start with alphabet. we saw the recovery in ad sales. su: alphabet really is looking to its cloud for the big strength. it was green on the screen across the board for tech after hours, with google's parent helping to lead the charge.

shares came down when the ceo talked about a challenging had went. significantly -- challenging headwinds. significantly slower the pace of hiring. that offset some of the good news about a quarter. you saw sales definitely recover. the cloud unit reached profitability. and ai is where they are putting a lot of their focus, boosting fourth-quarter capex and full year 2024, they say they are committed to leading the platform. in terms of the headwinds, again they do see a challenging market going forward. they said the outlook is uncertain. that's why we saw shares come down after hours from their peak . they do expect the currency headwinds to decrease in the current period. they are giving us an idea of what they are seeing. paul: resilient cloud demand was

a big thing for microsoft as well. but the stronger than expected outlook that send the shares even higher. what's the story there? su: in the conference call, they give a forecast better-than-expected and boosted the sales for pc's and cloud growth and it was well received. we saw shares up some 8% after hours. fourth-quarter revenue was expected to be $54.85 billion to $55.8 billion. they are talking about scaling up. there's also the view that the closely watched azure cloud computing service, for months they had been telling us they were going to expect things to be somewhat subdued. there outlook going forward in the current quarter and beyond, much stronger. fueled by resilient demand. revenue for the unit climbed 30% x currency and deal renewals were a part of that

driver. shery: a very positive start to this season. president biden is beginning his quest for reelection as the u.s. economy teeters on the brink of recession, and voters feel the pinch of inflation. let's bring in matt winkler, joining us now from hong kong. you argue in your latest column that president biden's economy serves more appreciation. how big is the divergence from perception and reality on how important will this be for voters? >> it's day and night actually, the difference. you could say that we have witnessed the greatest and fastest recovery in modern times under president biden. and that is reflected in the fact that in a biden economy created six times more jobs than the last three republican presidents combined. and that is on gdp growth exceeding 3% -- three times the

average under donald trump. that is just a taste of what we have witnessed under his presidency. a lot of it has to do with policy actually. it's the fact that you had the chips act passed and the inflation reduction act passed within days of each other last august. biden is going to prove to be the king of manufacturing jobs created. paul: it would be refreshing to have an election campaign in the u.s., but is such a highly polarized medical environment, can a message like that get cut through? >> that is up to us, isn't it? we are supposed to be reporting what is. not necessarily what is perceived. and there's a big difference as you know between perception and reality. to quote george orwell,

his time of assertion, the right thing to find was right under your nose, and the thing right under your nose is the bite an economy which is unlike any we have witnessed in this century and that is because if you look at the unemployment rate, we have not witnessed a period where you had consecutive months of average 3.5% unemployment since 1969. and that was when lyndon johnson was in the white house. shery: yet of course the biden administration still faces many criticisms, including what's happening in foreign policy it was afghanistan or the southern border as well. how much will that weigh into the vote? >> nobody's perfect. although the afghanistan situation is something that's complicated to the extent that he inherited a problematic, if you would like, foreign policy with afghanistan. having said that, you could

argue that what biden has accomplished with nato after putin's russia invaded ukraine, bringing in for example finland into nato, which would've been unthinkable a couple of years ago, and possibly sweden soon, and so, he has managed to unite nato in ways we have not seen really and decades. -- in decades. paul: we can't let you go without discussing what's certain to be a major factor in the election, president biden's age. he is 80. it is hard to imagine this not being a major issue. >> if age is the issue, i would like to be as old as he is. because his record speaks for itself. [laughter] you know, the health reports that he has shared with everyone suggest that he is as fit as anyone could be, even at his

age, and maybe even better. so his ability to get things done seems to be a virtue, not the opposite. and that is what age is about, we should have more of it -- if that is what age is about, we should have more of it. paul: met winkler, thanks so much for joining us. you can read his opinion piece on the terminal and online as well. this is bloomberg. ♪

paul: let's get a quick check of the latest business flash headlines. sk hynix has posted its second straight quarterly loss after revenue plummeted 58% underscoring the depth of the downturn facing the global tech industry.

the memory chip supplier to apple reported an operating loss of $2.5 billion for the three months until march. second quarter sales rebound -- they see second-quarter sales rebound. texas instruments shows sluggish of demand is seeping into other areas. first quarter revenue fell 11% to $4.4 billion. the company says every sector except automotive is suffering. apple is reportedly working on an ai powered health coaching service and technology for tracking emotions. sources say is planning to use apple watch data to create fitness programs tailored to specific users. and also plans to use iphone algorithms to determine a user's mood via the speech and words that they type.

apple is looking to lock in users with health and wellness features. shery: take a look at how u.s. futures are trading at the moment. we are seeing upside given of course the better than coming from the likes of alphabet and microsoft. this is of course after it down session in new york. the s&p 500 fell by the most in two months. treasury yields retreating given that we had data showing the economic slowdown might get entrenched. u.s. consumer confidence to the lowest since july. fed manufacturing reports, underwhelming. we will be watching the reports from the asian session as well. coming up, what it will take for the boj to tweak its yield curve control mechanism. the exclusive interv

shery: this is "bloomberg daybreak: asia." we are 30 minutes into the session for japan, korea and australia. at the start of the day we are looking at what's happening in the debt space in particular given was on the retreat and u.s. yields overnight. now setting. a lot of focus coming into the session on first republic shares. what it means for the broader health of the economy. we are seeing traders start to peel back bets for where the fed funds rate will top out around 4.5%. that has also led to a bit of a stronger dollar. a retreat in asian em currencies across the board. in the equities picture, it is a little bit more nuanced. we were waiting to see whether the after-hours earnings from the likes of microsoft and alphabet would be enough to lift sentiment. but in the session today we are seeing weakness here across the board being led at this stage by new zealand.

broadly it is a weaker session. korea, one market to watch, looking more flat. we had earnings out from sk hynix. huge revenue drop of around 60%. but still largely expected. the stock rising 3.2%. the story comes down to china which has been weighing on the picture. particularly what we are seeing in the commodity space at the start of trade. you can see iron ore down 2.2%. the singapore contract, this is about china's recovery, the economic momentum, so for the signals around building, saying it's not coming back quite as strong as had been expected. geopolitics is likewise and focus. tensions between the u.s. and china are rising. that is also leading investors to turn away from the mainland stock markets. hong kong futures pointing to a drop the next hour of nearly 1%.

we are testing the 2023 low for the tech index as well. paul: thanks, annabelle. let's take a look at a bit of breaking news coming out of new zealand. the inland revenue department which collects tax in new zealand has released the results of its review, speaking to that review, the revenue minister says what the new zealanders are paying a lot less tax than others. it stresses the government is not announcing new tax policy or attacks switch -- a tax switch. this is going to enable future discussions on tax. the discussion might be happening pretty urgently. it is an election year in new zealand. this review is showing new zealanders, wealthy new zealanders are paying a lot less tax than others. the bank of japan governor is testifying in parliament for a third straight day. he signaled he is not on the verge of moving away from

stimulative monetary policy at this week's meeting. kathleen hays is in tokyo and joins us now with more. what is the main concern here for ueda? >> if they move too quickly, the bank of japan moves stimulus a little bit, this could cause inflation to actually fall more than they already expect it to fall. if you didn't get the message on monday, on tuesday he seemed to say it with a more definite tone. he said this could have negative consequences. when we spoke to tatsuo yamasaki, he said he thinks what is going on is that yes, they have to move very carefully. negotiations have gone well so far. but they are not completely over and he doesn't want to stop the momentum. let's listen to the various things he said. >> he mentions that condition

-- that the condition is a strong forecast. inflation closer to 2% with high probability ahead. that to me seems that he becomes more cautious about tweaking. it is not a regular negotiation. it is still underway. this is mainly b companies. not all companies were medium size companies. that is quite important.

for sustainable inflation. so i guess maybe wants to keep the current momentum. >> if we get this not hawkish, watching inflation closely, does that mean no change in this comfortable spot we see the dollar yen exchange rate right now? >> because of the monetary policy of japan, rather i think the financial market stress. maybe it was tightening of monetary policy outside of japan. maybe possible recession of the economy. >> when we look at ycc, yield curve control, sooner or

later, maybe it will take a year and a half or longer, it is going to be changed presumably. that has been the signal, when the time is right. right now you have this yen sort of and arrange that is not too week or two strong, bond yields, jgb's not pushing too hard against the upper range of ycc. are these the kind of conditions that would be very good -- be a very good time to start making any kind of changes that are going to need to be made in ycc? >> so far the tweaking of the yc c, the market rate, is upper bound the ycc. there is no longer pressure. inflation is already to some extent corrected. in that sense, that is good timing.

another important factor is to change ycc. not send the wrong message to the market. this is defective tightening. -- de facto tightening. bringing inflation to 2% as a condition. >> what do you think is the biggest risk for the bank of japan policy and impact on the markets? what is the thing that you are most waiting to see besides again what the boj does? anything that could have an impact on the economy, on inflation, and therefore an impact on boj policy in the future and the dollar-yen exchange rate? >> [indiscernible] forecast the price of development. that is why i think japan's

inflation could be much stronger than the projection. the timing of lifting ycc, or the timing of the negative interest rate could come higher than the market or the boj expected. precisely, data development and keeping good communication with the market is very important. >> for now, for the meeting this week, people are expecting again that there is probably no change to any kind of the tools. ycc in fact this week, governor

ueda said he is not related to normalized the ycc framework. without normalization of policy meant getting that off the short range. we will learn more on friday at the press conference. maybe ueda can take off the trauma out of boj watching. that could be something that is reassuring to investors. shery: very exciting. we are counting down to this week's boj meeting. we will be speaking exclusively to the former deputy governor and his first interview since his term ended in march. that is coming up, 9:30 a.m. sydney on thursday, 7:30 a.m. wednesday evening an -- p.m. wednesday evening a new york. olaf scholz has invited the chinese premier for talks in berlin in june. the german chancellor's latest bid to ease tensions between

europe and the government in beijing. sources say he will aim to enlist china as a key partner on challenges including promoting global peace and tackling climate change. but we are told he will also set out so-called redlines on taiwan. the u.s. house bigger, kevin mccarthy, is refusing to say whether he has secured enough support from reluctant republicans to pass his debt bill. he spoke hours before a key house committee was scheduled to meet to line the legislation for wednesday's vote. if the bill false flats, it could delay the start of any talks over raising the debt ceiling. e federal reserve's closing a loophole use to take advantage of the rrp, raising the criteria for access to excludes funds organized for the purpose of accessing rrp operations. since last june, $2 trillion have been in the facility

that sets a rate that is often better than alternatives like treasury bills. calling off in buyback voyager over what it calls a hostile and uncertain u.s. regulatory climate. this comes less than a week after regulators altered the deal in court. it is a second failed deal for voyager which has been trying to repay its customers since filing last year for chapter 11 protection. those are your first word headlines. paul: up next -- japan's ispace fails. we will discuss what it means for future moon missions and the business of space with space capital. this is bloomberg. ♪

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shery: tokyo-based idpace says it has lost contact with an -- with a lander, ending the moon mission, in a bid to complete the first commercial moon landing. let's bring in chad anderson.

chad is the author of the book "the space economy." great to have you with this. given what's happened here, what are the implications for more private businesses on the moon and the broader lunar commercial market? >> this was a really great in ispace but have been following them for many years and think very highly of them. while they likely crash landed into the surface, they did accomplish quite a bit. the spacex rocket basically puts them in a trance -- translunar injection, they basically entered lunar orbit and got close to the surface. it looks like they got data up until right before they hit. so they have a lot of really great data that's going to support their future missions. i have a couple of that are already in the works -- they have a couple that are already in the works. not to mention the other companies doing something similar that are launching later this year. shery: when you look at the

economic challenges that we might be facing and the tech sector of court has felt that as well, what are you seeing in terms of funding and opportunities for these companies? >> was happening in the broader tech sector is definitely affecting the space economy as well. venture capital investors make up the majority of capital that's gone into the space companies. they make up two thirds of the investable capital. three quarters of all the rounds. what's happening more broadly is affecting companies in the space economy. q1 was a pretty rough quarter for tech overall and for space companies as well. paul: you are investor in spacex. spacex does tend to suck up a lot of the oxygen in the space, if you will forgive the metaphor there. the launch of the starship was a partial success. but how important is the success of starship for the broader economy -- the broader ecology of the space economy? >> similarly, it was a

successful failure, in that this is a new launched vehicle. the largest, most powerful vehicle that humans have ever made, with twice the thrust of the apollo rocket. shery: chad, we will have to interrupt you for a second because i think we lost your mic. that was chad anderson. managing partner at space capital. we are looking at byd, china's best-selling car brand after it outpaced rival volkswagen in the first quarter. we had those details coming up next as well. this is bloomberg. ♪

paul: let's get back to chad anderson. founder and managing partner at space capital. which has invested in several lunar morganlander startups, including spacex -- lunar moon lander startups, including spacex. it attracts a lot of the venture capital in this arena. how much does the success of the giants are set -- how much does the success of the giant starship project matter? >> before they entered the

market, it was really limited with a handful of defense contractors on one side and the government as a sole customer on the other. spacex opened the market up by bringing the cost of access to orbit down. and bringing transparency to the market. so we have seen now $270 billion of investment capital going into 1700 space companies over the last 10 to 14 years. due to spacex. starship will have a similar impact, reducing the cost of getting to orbit by another order of magnitude. this is the largest, most powerful, fully reusable, rapidly reef liable rocket -- re flyable rocket. this is going to be a paradigm shift from where we are today. paul: we are seeing images of the failed test. it's important to remember also that the ispace lunar lander was

injected into lunar orbit by a falcon nine rocket which also had its share of failures in the early days. but when you're speaking to investors, how hard is it for the to get past these sort of dramatic and expensive explosions to look at the bigger and longer term picture? >> i've been doing this for 10 years now and i can tell you it is a whole lot easier having these conversations today than it was back then. there is a lot of companies like i mentioned, 1700 unique space companies that have raised over a quarter of a trillion dollars. there's a lot going on here than there has in the past. -- a lot more going on here than there has in the past. this is the next generation vehicle. they have the falcon 9 or course that dominates global market share in terms of launch and the falcon heavy which takes on these interesting missions like the ispace lunar lander mission and other commercial companies launching to the moon later this year. so when starship has a

successful failure like this, in the test of the most powerful rocket ever created, they accomplished quite a bit, they cleared the pad, they did not blow up the pad, they launched, they reached max q, the greatest aerodynamic pressure put on the vehicle, and they got four minutes of data. this is a very complex system and now they have a treasure trove of data that they can go back and mine through to try again in a couple of months. shery: we have also seen more activity in the government side of things. is this a new space race especially with the geopolitical fragmentation that we are seeing around the world right now? >> geopolitics has been a key driver of the space economy throughout history and will continue to be going forward no doubt. the conflict in ukraine has showcased the growing capabilities of commercial space companies, from satellite communications, keeping the ukrainians connected, and earth imaging companies giving us ground truth of what is actually happening on the ground.

but in addition to that, you've also got earth imaging companies enabling us to understand and address our changing climate. and we are bringing on -- we are using satellites out of combat forest fires and you can only do this from global scale rapid response. so it is geopolitics and a lot of other factors as well. but when it comes to the moon, certainly the u.s. and china are racing back to the high ground there. shery: chad anderson, great to have you with us, joining us here in the new york studio, managing partner at space capital. thank you. let's turn to byd co. it's overtaken volkswagen as china's best-selling car brown, knocking the german giant from the top spot it held for at least 15 years. we are joined now with more on this. why is this best-selling brand so significant? >> especially in china, when we think about top car brands, we

think about german cars. but right now it proves that the chinese brand is at the top -- can be at the top of the best-selling chart. you can see this chart goes back to 2008. there was a very wide margin by which volkswagen was winning over other car brands. but byd recently made such a big improvement in their car sales through selling ev's throughout the country as well as globally, so this is a really significant achievement for a chinese company in the car market. paul: how did byd managed to gain market share and how is it going to grow globally in the future? >> china's electrification in the car market has improved a lot over the last few years and byd's sales overwhelmingly are ev's. volkswagen, only 6% of their sales in the first quarter were electric vehicles. so this is really showing what the future is like for the chinese car market.

shery: did we hear from volkswagen? what does it say about this moment? >> yeah, actually, volkswagen's executive during shanghai's auto show replied to our inquiry, so they said byd is very strong indeed, but they are focusing on not necessarily just volume but trying to be the best international group in china. paul: all right. our asian consumer and health care reporter there. let's take a look at chinese ev maker stocks. byd, neo, down about 3% in tuesday's trading session in hong kong. battery makers and suppliers also fell across the board following a slew of disappointing earnings results. among those biggest losers, a drop of 10%. the tech heavy china index

fell for a sixth consecutive day. that is it from "daybreak: asia." margaret's coverage continues into the start of trade -- market coverage continues into the start of trade. we are looking at chipmakers in particular after the results. and pretty strong numbers out of microsoft and alphabet as well. standby for bloomberg markets china open. -- "bloomberg markets china open." this is bloomberg. ♪

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