>> they took me into afghanistan in 2003. basically we had to move everything. we have our own journey. we can fulfill that journey at the same time that we are helping our loved one. >> good morning and welcome to daybreak australia.

i am paul allen in sydney >> we are cut down to asia's major market opens. >> metta shares surged after hours. the results of signaling the start of a digital ad recovery. express republics was deep in there as the bancshares plunged. >> xi jinping looks to bolster his image as a global peacemaker. speaking to ukraine's president for the first time since russia's invasion. u.s. futures getting a boost in the asian session. this after we had a mixed session in the regular trading hours. of course, concerns about regional lenders. we have the bank index. first republic, down 30% after being down 49% in the previous session. we continue to watch those

concerns there. we have big tech earnings giving a boost to the nasdaq 100. we have the 10 year yield trading. we have oil prices seeing the question. that was the death of the banking crisis here in the u.s.. all of that after the surprise production cut by opec. we are seeing a rebound in the asian session but it is all about metta. we saw that ad recovery. and mark zuckerberg's year of efficiency seems to be paying off.

>> ed, this looks like facebook 1.0. >> it really does. they are leaning heavily on the operational efficiency. that is often the case. even if they are above expectations, there is one key point here.

the outlook is bullish. now we are talking about ai. thank goodness. >> where did the metaphors go? >> mark zuckerberg said on the call there is a lot of narrative out there that metta has stopped thinking about the meta-verse. they continue to work on the meta-verse. they continue to work in ai. the message overall we have been working on ai for a really long time. zuckerberg gives him the concrete examples. in terms of customer support or a business chabad and how many companies are relying on humans to perform those kinds of functions. he talked about how they said

that work is. they really leaned into an open source approach. >> a lot of cost savings over the quarter as well. >> one key point is headcount. the cfo made the point that when these layoffs are finalized in april and may, they will start hiring again in generative ai. you can see a growing headcount. they are going through this process.

facebook reality labs. look at the top line and how distant they were. metta also warning that the units will grow. even though they did these cost-cutting measures across the country, they will continue to lose money. they will need to invest in the infrastructure from a data center. >>, regular session, it was all about the banks.

>> to downgraded, -- downgrade it, should it be downgraded as they were earlier this year? did you find themselves needing to make a decision but managers are looking at a number of options. they want them to consider a private buyer. the bank is really concerned about his reputation. and the current standings for its existing shares. >> friday will be a big day. we will are more about the handling of signature bank. >> we do expect in a similar but unrelated report coming out on friday how the ftse handles signature, oversight and supervision.

we understand that while it needed to be closed over the course of the weekend, the management to do the right thing and as the ftse sees it, we understand that means finding a buyer. >> all right. if we could just get you an alert on the bloomberg terminal. members coming out of aia group. 1.0 5 billion. that is a 23% increase year on year. new premiums up by 28%, the margins are 52.3% versus 54% on

your as well. an improvement for margins also from aia. we will keep an eye on those headlines as they continue to appear. for now, let's get over to hong kong for a look at how asia is shaping up for trade. >> it is quiet interesting. two different stores there. check earnings verse what we have had from first republic. it is the financial sector still looking to dominate the session in asia this thursday. we have futures looking weaker. he restocks already online. it is not just about the banking sector, it is what it means for the fed in this expectation that could need to start to cut rates. that rate differential between the fed and the doj very much in focus. it has been given a bit of strength back into the japanese yen even though they are not

expecting any policy meeting -- policy adjustment. this whole thing was driven by the sentiment in the financial sector struggling to get back to that 30,000 level. in the session today there is a big earnings announcement on the way. this is the final first-quarter numbers coming through. this is when we get the divisional breakouts. it will be very much in focus here. we are expecting a rare orderly loss for the chipmaking. that would be a signal of the broader downturn. what we know about samsung is they have issued chip production cuts. >> the chinese president, xi jinping making his first call to ukraine's zelensky. let's get the details from jody

schneider. this is pretty symbolic. why now? >> there was a lot of pressure on him to do this. he went to moscow last month and met with the russian president, put in. this has been something he has avoided doing. it is either damaged control or pr. pr in trying to bolster his image, something he wants to do as a global peacemaker. a mediator if you will. his message to his ukrainian counterpart in that call was to say we need to negotiate. that is the way out of this and from the ukrainian standpoint, it was an hour-long call they felt was productive.

they cannot start negotiations until then. >> safe to say that expectations have been fairly managed? on whether this will have any effect on ending the war in ukraine? >> that is a fair assessment. now they can, thanks this one phone call will do that. is this a sign that he has a lot of nephew on the world it is due. if you are suppose that mediation image as he has is on part of the world and find showcase that vis-a-vis what the

u.s. is doing, they really -- they will really need to make some moves. it was interesting first step in that. an interesting response from ukraine that it was productive. that is something we would not necessarily have inspected to happen. >> jody schneider there. let's get over to vonnie quinn with first read headlines. >> u.s. houses pass a debt limit bill. this puts pressure on president biden. this contains sweeping spending cuts. failure to reach a compromise with the was heading toward federal payments.

>> this is not negotiable whether the debt limit gets extended. it would be an absolute crime. rick has learned the turkish president has canceled a day of campaign appearances after falling ill during a live tv interview. our sources say he will join via videoconference. six opposition parties joining. disney is suing ron desantis, claim he is retaliating against the company for speaking against desantis's policies. this accuses the government of orchestrating a targeted campaign of government retaliation. it comes amid an escalating

dispute over a five-member board that desantis appointed to oversee -- the former new zealand prime minister is headed to harvard university. the issue has been a priority after a wiper -- was a premises government killed people. they left the office earlier this year and says the dual fellowships given opportunity to share the experience and learn it. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> the u.s. and south korea announced a force to counter north korea's nuclear buildup. first, the u.s. recession has only been delayed and not averted. this is bloomberg. ♪

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>> historically from the last fed rate hike, it has averaged 13 months. midway to recession, the fed starts cutting rates. that is how we get to something

like september. our next guest as we are not out of the woods yet. i would joins us from miami. good to have you with us. when can we really say we are out of the woods? >> i think it is completely possible that we will see a couple more failures in the divisional banking space. it will be tougher for us navigate themselves out of the situation by themselves. there is a difference between

trouble in the regional banks and perhaps even a few more failing. we don't see the conditions out there for that. if the fed were to happen to continue its re-hiking cycle, that is a different story. >> when we are seeing these, many out there think we are doing better than expected. is it a bit early to call this over session? that's a lot of that is a product of if you look at most of the major firms, they were calling for a v-shaped type of year. we expected to be the complete opposite.

the earnings season so far is proving to be not as bad as feared. that is going into some support here. the recession has only been delayed. we do see signs that the economy will probably start contracting. >> i want to get back to this. are you a buyer of equities? notwithstanding the recently good earnings report card. class when we pled that note, that was earlier in the month, the index was in a little bit of

a different spot. right now, it is pretty balanced i would say. this is the sort of positioning and sentiment. it is fairly balanced. the market is positioning itself right now for a break in either direction. as i just want to get back to that recession call that you made. where do you stand on a fed rate cut? >> we have heard some commentators. there is no scope of the fed to cut rates. we disagree with that. with a long-term inflation expectations are quiet well anchored. they are done around 2.25%.

during a recession, inflation will come down. this is true even during 1970's. you saw inflation came down during the session. we have no doubt the fed will not only have the scope but the desire to cut rates once it becomes more evident over session has begun. ask how close they are you watching the u.s. debt ceiling talks right now? we heard that speaker mccarthy is going back to the drawing board and making some changes to the bill. we know how hard it was for him to even get the speakership. will this be a problem in the next few months? >> we think this is a risk that is being mispriced by markets right now. even within the parties, i think you are ready to point out that

just a few months ago, it took mccarthy 50 rounds to get elected speaker, something we had not seen for hundreds of years. we think there was a faction within the republic. the probability somewhere around 10%. definitely large enough to add some hedges to your portfolio. there are some we will add as hedges. one that comes to mind is bold. those are three assets that could hedge against u.s. default

risks. >> thank you so much for joining. we will speak with the deputy governor in her first interview since his term ended in march. this is bloomberg. is it not -- this is bloomberg. ♪

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>> here is a quick check of the latest business/headlines. that income can't to $5.6 billion in the three months in march from a year earlier. you give regulators have blocked microsoft's 69 bullied other

purchase of activision blizzard, uk's competition and market authority argued the deal would bolster microsoft's edge over its rival. the companies plan to appeal the decision. activision shares tumbled in the u.s. as that merger overshadowed it strong earnings. topping estimates. coming up, metta shares search. david kirkpatrick shares his outlook for the tech sector next. this is bloomberg. this (announcer)g. enough with the calorie counting, carb cutting, diet fatigue, and stress. just taking one golo release capsule with three balanced meals a day

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>> let's take a look at how metta is doing after hours. pretty well. we did see advertising revenue rising to $28.1 billion.

up 4.1% year-over-year. that did beat estimates. revenue also bidding estimates. the markets rewarding metta for a strong set of numbers there. let's get in with david. the future looks pretty encouraging. what were your key takeaways from this announcement? >> facebook is back to the facebook we used to know which group incessantly and reliably for a long time. the last three quarters have been really surprising turn for them when revenue and profits were going the way they used to. we have seen revenue growth today. pop is not so much because the costs are going up. i think the key take away is advertising is stronger than expected not only for them but possibly. this could be a macroeconomics

signal. this is such a fundamental growth -- global company that if their ads are doing better, that is encouraging. it is still fundamentally an ad company. more than the other internet giants. that is all it is. course i want to talk a little bit about how the meta-verse was barely mentioned. why are they really talking about? >> they are not talking about it because it is not doing well as a business and they are losing tons of money on it. they lost 4 billion on that business in this quarter. the revenue for that business were halved. this is not a good pattern for them. they change their company name to celebrate something that is apparently not really the kind of opportunity they let us to

believe it was. as somebody joked earlier, maybe they should have changed the name of the company to ai. that is what everybody wants every company to be. >> what is metta doing with ai? can they make that transition smoothly enough? courts are doing a lot with ai. they have had a very robust and highly respected ai research and development group for a number of years. they are using in parts of their business. they are doing things like testing and adapting to have any ads and is user is willing to tolerate and fine-tuning it by the individual possibly. they can do a lot of great things in the guts of their system that we would know about. ai would be helping them.

i am sure that is happening. they don't really have any business like the cloud where they can apply ai and just grow revenue because it is there. they will use it more subtly but it will transform their business and i have a lot of confidence they will use it well. >> when it comes to the fundamentals of the business, how well are they doing? courts it would suggest that they are getting a little bit more efficient. they said had did not have the cost associated with their layoffs, they would've had even better results today. i think the signs are that they're able to respond more quickly to changes in the marketplace now. this is not a company that was bloated. they hired way too many people. they were people who had

virtually nothing to do who were making 200,000 a year. they can absorb a lot of layoffs. they are halfway through. that is going well. chris what is next for metta? what is a new growth business they are going to focus on? >> i think they are going to continue focusing on the meta-verse long-term. zuckerberg is personally obsessed with that. 37 million more daily users and facebook just this quarter. over 3 billion people in the world is one of their products everyday. that is more than a quarter of the planet is using one of their products everyday. that is an astonishing success

but they don't have -- the meta-verse is not going to be their salvation. they will fine-tune what they are doing with ai and they are very inhibited from buying new businesses. they can try to build the business as they have but they seem to be doing that. do you find people arbitrated away from these films more i do think the consumers and developing markets will replace them? >> i think in developed markets, people have been affected by the revelations of the whistleblower francis hogan and became -- the name came right at the height which i thought was very suspicious and questionable but it succeeded in changing the narrative.

people are not that concerned about the user base about problems we in the developed world became super worried about , political interference, disinformation, harm to teens, etc.. for the time being, they are doing really well with perception as well as user growth. those things are connected in the developing world. they are flat or declining in many developed world markets. >> david, always good to have you with us with your insights on metta. thank you. >> optimism from big tech earnings make help lift trading sentiment. let's bring in annabelle for more on this. in the new york trading session, we saw concerns about the banking sector overshadowed that sentiment from big tech.

>> absolutely. it was still that big focus on the likes of first republic. and what that means for the fed, there have been 70 questions around a credit crisis and how much of those issues in doing the fed work for it. when you take a look at what is happening in the economy, look at income cycles. that is what is driving inflation. it is the strength of the labor market that led to strong wage growth. when he talks about whether assets are quickly pricing for these growth dynamics.the cuts g pressed into the bond market. he says maybe that's a little too extreme. as for what he said about equities, take a listen. course the stock market is still pretty elevated. that may be a place where growth

dynamics are overpriced. you have the situation where you have to fill the extreme sentiment. >> we have heard from the former treasury chief about the outlook. what is he saying? >> that is right. he was at an investment conference in chicago. it really comes back down so that inflation target he says when you have it at 2%, it will be extremely difficult to reach unless you have some sort of meaningful contraction and a substantial slowing in the economy. if you change it now, larry summers put that down to fiscal stimulus, low rates that were in place during the pandemic. as for what the fed should be doing next week, he says a 25 basis point hike is in order. the fed has lost credibility

because they said there was the in the hiking in the first instance. >> the new bank of japan governor may be signaling an adjustment to a key policy talk but bank of america says friday's decision is to a close call. kathleen hayes is in tokyo with the latest. why is bank of america arguing about a shift in the doj might still be on the cards? >> it is interesting. a lot of people say we are not necessarily going to take it off the table. it could happen. it just doesn't seem like the most likely scenario. no change. that is basically what the market is saying. 11% see some sort of yield curve control week.

this week, three more. he signaled he is not ready to move on interest rates and certainly not on your curve control. he says he is not ready to normalize the icc framework. bma says look at inflation. it continued to rise on the chlorate. it rose from 3.0-3.1. only about 2%. he also mentioned in one of his answers to the question that there is a danger of the doj falling behind the curve on inflation. he is obviously not putting a

big one on that list. this puts less pressure on the bond market, the jgb market to have big yields given the bond market seems,. it seems to be more in a range. b of a is basically saying we are not forecasting a move this week but we are saying they are going to have to start moving in a direction, they think by july the doj is going to give long-term yield curve control. this is going to be about communication. there will not be anything happening. that was far and away the bet. but this is the maiden voyage, the first official press conference, talking to the public, talking to the world. very important to hear what he says and what he is willing to say, particularly about the

balance between the negative rate keeping the short and steady. maybe opening to something in the longer end of the curve. write down the middle we are not going to get much of anything tomorrow but people are still helping. class kathleen hayes joining us from tokyo. we will be hearing from somebody later in the next hour. a former doj deputy governor joins us after being in charge of the doj. -- boj. still ahead on daybreak, the u.s. sent a nuclear submarine to south korea to deal with kim jong-un. this bloomberg. ♪

>> you are watching daybreak australia. u.s. regulators are said to be wearing the prospect of downgrading their private assessments. sources tell us the ftse is considering a move at the bank struggles to reach a private deal to shore up its finances. if that happens, it will likely limit the first republic access to the discount window and an emergency from last month. german authorities have been

rated in frame as a probe to the text evident scandal. they are investigating 37 current or former employees. police also raided the homes of the suspect. this trading strategy siphoned off billions, taking advantage of tax laws. xi jinping has spoken with ukraine possibly under zelensky for the first time since the russian invasion began. this is just there were no major breakthroughs. zelensky is our first the airlock conversation was productive. negotiations are the only way out of the crisis. course president biden has stressed the north korean nuclear attack would be the end of kim jong-un's regime. there were no efforts to counter young and past nuclear buildup. in turn, securing apart from

south korea not to pursue its own atomic arsenal. >> a nuclear attack by victory against the united states is unacceptable and will result in the end of whatever regime takes action. we will have visits of submarines and things like that. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. question s guest says south korea's president will need economic deliverables from his visit to the u.s. and expects to be cautious of public statements around china. the policy institute vice president joins us now from washington. i was good to see you. we know president biden has rolled out the red carpet for president yoon. what sort of economic achievements do they need to

take back home in order to really raise the standing? >> that is a great question. president yoon is coming to the states with low popularity unions -- ratings in korea. and they're not getting enough from japan from the bilateral agreements that were reached. the pressure is on you to be able to demonstrate that he got something out of this visit. i don't want to underestimate because the state visit is a big deal. this is only the second state visit president biden has hosted. he will need deliverables on the economic and security side and based on the joint statement that was just issued about one hour ago, it seems he has achieved success. close how difficult of a position is it for south korea and south korean businesses when you have the u.s. china tensions

ongoing? according to reports, you are being asked not to somewhat to china in terms of chips if mike ryan gets bad or gets restricted in the country were even because of potential more subsidies in the u.s. domestic makers. >> korea is clearly in a difficult position. sandwiched in between the united states and china. only 5% of south korea's trait is with china. the economies are extremely integrated. but now it seems that the president is siding with united states on many of these economic security issues. i think in private discussions he probably saw some flex ability from some of the conditions in the chips act or conditions in the inflation reduction act to make them more attractive for korean companies. >> in terms of korean companies, there were 120 businesses on

this trip. are they going home with anything concrete or useful? >> absolutely. this was a big business to business event yesterday at the chamber of commerce. korean companies which have already announced tens of billions of dollars of investment in the united states, batteries, cars and semiconductors. they have announced even more investment here. they are hoping to get some of the subsidies that will be provided through recent legislation passed in the united sta for the president going back to korea is a number of u.s. companies have announced fbi and plans to expand with during companies including netflix which announced a 2.5 billion deal with korea yesterday.

crestwood has been achieved in terms of the diversification of supply chains? this was key going into this meeting. >> i've only had the chance to read through the joint statement quickly. it seems they announced new mechanisms on advanced technology. they've agreed to work on space and cyber security issues as well as to continue to work on resilient and secure supply chains and batteries, cars and semiconductors. three areas where south korea is extremely competitive and working together with united states, i think that leads to a lot of possibilities and synergies. >> we know south korea is no stranger to economic backlash from beijing. it is at stake here?

>> there was a lot at stake. china responded with harsh economic sanctions in such areas as tourism, retail, cars and more. korea is very concerned that china will respond with coercive measures. i think as a result, the united states has been very forthcoming and has really escalated and elevated the issue of chinese coercion to convince our partners and allies we will have their back if indeed china responds unfavorably. >> are that was wendy there. we have plenty more ahead on daybreak. this is bloomberg.

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quick quick check of the latest business/headlines. metta shares surged after the company reported the first quarter revenue. first-quarter sales rose to almost $29 billion after i

return to growth after three straight quarters of declines. amazon has started laying off employees in the cloud services operation. they were notified early wednesday about the termination. aws generates most of the company's profits but is experiencing slowing growth as corporate customs look at expenses. amazon is axing 27,000 jobs after hiring spree during the pandemic. bloomberg reported the revival of talks on potential asset sale deals. sources say the two sides restarted discussions for a 2.5 stake in the u.k. company in september. they rejected a 12 would have billion dollar iliad led

consortium last year. >> that is it for daybreak australia. we are taking it live to washington dc where we are expecting the president of south korea to arrive with his wife for a steak dinner with president biden and first lady jill biden. we will bring you those pictures live when we get them. daybreak age is next. this is bloomberg. ♪

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