>> good morning.

welcome to bloomberg daybreak australia. >> we are cutting down to asia's major market opens. >> apple beat its estimates, a buyback hoping shares game after hours. >> the u.s. will refill the deposit insurance fund after the collapse of regional banks. >> cap west and western alliance leading the route as wall street's fear gauge strikes. >> take a look at how u.s. futures are coming online after a really tough session in the regular hours. we had that been can route putting the lid when it came to the broader market.

apple beat on all estimates and you can see the stock after hours trading two percent. they had already outperformed but the bar was set low this time around, but investors seem pretty positive about the stock. we are still seeing shooters around what is happening with the regional lenders. a mixed picture when it came's -- when it came to the treasury space. even some content in the rate hikes as june. you can see the tumble, pat was bank saw a more than 6% tumble. western alliance also under pressure. for horizon falling more than 30% after the actual merger.

this is a sector that will we continue to watch. fed chair powell. >> the question is is the reassurance enough? we will have more details ahead. kiwi stocks coming online and they are looking a little bit flat. we saw apple having stronger sales figures coming through in china. they are continuing to increase their market share their, another positive signal for the overall health of china's economy. we are still watching the move into the bond yields.

investor still coming back into safe haven assets. the signal of uncertainty coming through in the vix age. compared to where we had been for much of april where he was really subdued. >> bloomberg has learned the ftse plans to exempt smaller lenders from paying extra to replenish the government's deposit insurance fund. instead, i will ask big banks to cover most of the fund. the big banks have really benefited with this turmoil in regional lenders. what does this plan look like? >> the fdic is really focused on

trying to replenish this fund without charging the nations smallest banks. they hope to charge a larger fee to the nation's biggest banks. there had been a lot of lobbying effort by the community banks at the time they announced the plan a month ago. it seems that efforts have proven successful. >> what lies i had when it comes to broader regulatory changes? so much of the focus a sign of a failure of supervision if not regulation. >> we did here from both the ftse and the feds who envisioned some responsibility for the lack of oversight, but we have not

seen how they plan to tighten up more. so far from the fdic we have only seen a proposal. they has yet to be seen whether it will have any traction. haidi: turning to australian banks. anc has met expectations. cash profit coming in at 3.8 billion aussie dollars. that is broadly in line up what

we were expecting. shayne elliott from anz group holdings joins us. russ mcewen thinks merchants may have peaked. do you agree with that? >> broadly, that is absolutely true. this was a weaker result for anz on many measures. there is no doubt there was a little bit of a sweet spot over the last 12 months over financials during the. -- period of interest rates rising, that tends to happen. we need to prepare ourselves on how to respond and compete in

the environment. >> what do you see as being the impact of loans over the next months? >> we see it as an opportunity actually. we are through the worst of it for a lot of reasons. what we found is that most customers have better-than-average credit quality. as we look at our competitors dealing with that, that is an opportunity for us. many customers may decide to move banks and we want to be a great recipient of that business. haidi: some of that offset we have seen in the numbers is to

pull back a bigger chunk of the mortgage market. how has that played out in how do you view the broader housing market? >> some really interesting questions. we had [indiscernible] some of the house prices were up 40 or 50%. some of the froth has come out of those prices. prices are down 10% from their peak. at the same time, employment is saying really high and wage increases are up. i would much rather be bloomberg.com. we think we have a good setting

for today. obviously, we have to be cautious. it is a tougher business. haidi: how much stress are you seeing in mortgage customers because the environment in australia is so different from here in the united states where most people have fixed rates. >> you quite rightly pointed out that most australians have [indiscernible] the average is about $300,000,

so not as high as people might think. when people borrow, we put buffers into our calculation. we assist people. we are ready built in the idea that rates will go up. most people do not borrow to their maximum capability. they borrow less then they might otherwise be entitled to. what people did was keep their payments the same. most people are still way ahead on their home loan. there is only a small amount who are experiencing any stress. haidi: what are you seeing in

terms of the u.s. banking stress? have you been able to take advantage of the turmoil that u.s. banks are feeling right now? >> what we have seen, we have an institutional business in the united states, but mostly our businesses stayed the same in the multinationals but also the financial sector. we are seeing a bit of a flat quality. given our strength in payments processing, we have picked up a number of mandates with multinationals. they have moved their business away from some of the banks that have struggled. haidi: we talked about the

difference with the bank and turmoil we saw in the united states, that it is more reminiscent of what was on the 1980's. does that mean australian banks and households are equally as vulnerable even if our lenders have more robust fundamentals? >> that is a great question. i guess i have the benefit of having work through a lot of that period of time. the structure of our industries different than the united states. many of the things have not happened here. that does not mean we should be complacent. what happens in the united

states takes its toll and the impact on australia will be for the ability of the banks to [indiscernible] we are dependent on those markets for funding. at this point, that has not been an issue. that is what we are watching very closely. the worst thing that can happen is if the turmoil was to escalate and have an impact on the liquidity markets more globally. i think in general the banks here are extraordinarily liquid. our business is very different from our peer group. we have four big businesses and we are very diversified. haidi: you sound cautiously

confident. can you tell us about your hiring plans this year? >> i am very confident about where we are strategically. we achieved a lot in this half strategically. we have a lot of things that we have been doing. we have a new retail platform, a fully digital offering. we are making a lot of long-term investments that i am very optimistic about. in the short and medium-term, [indiscernible] central banks are trying to slow down the economy. that causes stress for many customers.

we are well-positioned to help customers through it. i do not mean to sound complacent. we stand in a good position and i am confident about our ability to help customers weather the storm. and for anz to come out much stronger. haidi: what sort of new technology argue looking at? you see a role for chatgpt? >> absolutely. we are hiring a lot of people. it is something to be really proud of. we absolutely need to hire more people. the types of people we hire are different. we have more software engineers than we do branch staff.

the nature of banking is moving quickly toward technology and digitization. that means we need people with different skills. and we are also applying new technology, things we have not done before. but we are a victim we have to be cautious because we are dealing with people's money. we have to be prudent. we use artificial intelligence now. we have for some time. it is pretty exciting to see things like the checks gpt -- chat gpt. we are not using it today. banks have always shown themselves to be fast adapters of technology. when the iphone came, anz was first out of the box with mobile

banking. today, it is ubiquitous. i think anz and banks in general show we are really good at adapting technology. i do not know how artificial intelligence will be used but i am confident that banks will find a way. haidi: shayne elliott from anz group holdings. coming up, we will be digesting apples results as well. this is bloomberg. ♪

>> european central bank has downshifted for 25 point basis hike. he says it will not be the last. it is clear the central bank is not pausing and future decisions will remain data dependent. >> inflation may still being pushed up by the gradual pass-through of past energy cost increases. in services especially, it is

still being pushed higher, also by pent-up demand from the reopening of the economy. >> china has ordered state owned enterprises to run security checks when hiring coming firms. they should include specific clauses on information protection security. tensions linger with the united states. taiwan's intelligence chief has warned that president xi's to surround himself with like-minded officials increases the risk of making a wrong decision. taiwanese change in information with the so-called five eyes spy network. u.s. government agencies are reviewing the role played by goldman sachs in silicon valley bank's fund raising attempts.

goldman sachs could not pull off the deal before bank run led to the banks collapse. global news, 24 hours a day, on air and online, powered by more than 2700 journalists and analysts in more than 120 countries. >> we are following apple shares after hours, some modest gains of 2%. let's bring in mark gurman. how positive were the results or was the bar just set low? >> the bar was set low. in any other time these would not be positive results. apple declined 3% annually, the second quarter in a row. we are not in normal times. with the current macroeconomic

environment and everything else going on. with that context, they did pretty good. they did better than the street anticipated. the street was anticipating a 5% annual decline. this was 3%. the iphone did a few billion dollars better than expected. this quarter services did quite well, one of their best services quarters ever. it did not do as well as wall street anticipated, but is still group. -- grew. the mac computer did worse than the street had anticipated. the ipad did as poorly as expected.

the combination of iphone services and wearables, they all did well. that is pretty good news. haidi: what did we hear about generative ai and how tim cook is approaching it? >> tim cook said apple would continue the status quo, pliant ai to specific -- applying ai to specific issues. i would not anticipate apple to go down the road of competition in the near future. but there are core products that ai is a big part of. the ai watch leverages -- the apple watch leverages ai. haidi: mark gurman with the

latest on apple. this is bloomberg. ♪ sports fans built a streaming service... hey, so... you know how we carry a ton of local sports networks? sure. boston, philly,

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as football fans are celebrating. they won their first title in the. napoli ceiling its championship just a few hours ago. more than 50,000 fans packed the

>> applications for u.s. unemployment benefits roast by the most in six weeks.

jobless claims rose last week, slightly above the forecast. continue payments -- the monthly jobs report comes out friday. western alliance has denied a report it is exploring the possible sale of its business, calling that false. the financial times had reported the company is exploring strategic options with advisors. the lender said it has not seen unusual deposit flows following the sale of first republic bank. at least 120 claims have been filed against the swiss watchdog decision over the credit suisse bond wipeout. the regulator says it was part of a plan that was the least bad option to rescue credit suisse.

hollywood studios are -- with striking writers said they offered wage increases. they say that is more than double the amount the writers claim their being offered. screenwriters went on strike tuesday after negotiations broke down. global news, 24 hours a day, on air and online, powered by more than 2700 journalists and analysts in more than 120 countries. shery: apple shares rising after beat estimates thanks to a rebound in phone sales. dan morgan joins us from atlanta. good to have you with us. headed into the results, you were pretty optimistic about apple. did it live up to your expectations? >> the iphone beat was a pleasant surprise.

iphone common 1.5% -- coming up one point 5% does not seem like a big number. on the conference call, they talked a lot about the emerging markets, africa, india, some of these areas of tremendous opportunity going forward for them. even though we are have been muted growth rates these more developed markets like the united states and south america, if we don't -- to look at these emerging markets they tend to be a great area going forward for apple. that is what stood out to me. shery: it is interesting that china revenue beat estimates,

but is still trailed last year. does it give you a picture of the broader environment right now where it is pretty tough? >> it was still negative year-over-year. i think that goes back to the pace in terms of lockdowns in china coming off of that and people started to get back into normal buying patterns. a lot of people who follow apple stock want to know what is going on in regards to the china market and what is the pace of that recovery and how quickly consumers are adopting apple products. the overall growth year-over-year was negative so we still of a little bit of work to do in china going forward. shery: still some work to do when it comes to services, right? >> they hate over 2 billion -- they hate to billion users. you continue to add more people

to the hardware, to the iphone, that increases the number of monetization that you can execute on in terms of services. services were a little bit down on the quarter in terms of expectations. but again, adding so many more users gives us a window to the future that this could be a tremendous growth area for them. haidi: we have long looked at apple as a trailblazer when it comes to new technologies. what did you make of tim cook's commentary about generative ai? >> it is interesting because other conference calls last week mentioned ai 40-50 times. tim cook's response was that ai

is something that will be weaved into our current products as opposed to chat gpt or bard. it seems they are very content to weave it into their wearables and their phone. it does not seem that they have a huge catalyst to go and brace a whole new product or something that is based on ai. haidi: the mac computer had a pretty tough quarter as well. what does the future hold? >> that was off about 30%, that was a huge drop and it was anticipated. we know we had a big splurge in buying in terms of mac computers

with the work at home the covid. that growth has been deteriorating. on this quarter, that was kind of a big setback. overall revenue was down 30-31% from a year ago. going through a little bit of a cycle bear in the pc space, which is just falling in line with what is happening in the area. shery: you said it before, that apple is about services, providing this ecosystem for so many people in the world right now. what do you see in terms of financial products? tim cook seemed to have some positive things to say about some of their new offerings in the financial side of things. >> they talked about gaming, their new credit card. there are areas within services

that they continue to expand upon. when you think about apple services, you think of music in tb, you think of the apps. they also sell a tremendous amount of applecare, that is about a third of services, which is just warranties that occurring iphone and apple products. they are trying to beef up those offerings and services, getting more people connected that are already using it in other areas. they talked a lot about that and they are proud of their new credit card. shery: dan morgan, always good to have you with us. still ahead, alibaba will explore an ipo in the u.s.. this is bloomberg. ♪ ♪ (upbeat music) ♪ ( ♪♪ )

woah. ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) constant contact delivers the marketing tools your small business needs to keep up, excel, and grow. constant contact. helping the small stand tall. haidi: alibaba has plans budgets

global online shopping unit. it is considering a u.s. ipo for the division. this is about finding new ways to boost growth. >> that is right. that is the reason that when

they announce these recent plans to split the empire in differing units, it is about unlocking value. bloomberg was the first to report on it, that alibaba may list its online commerce unit on wall street. the talks are in preliminary stages. the actual size of the ipo is still to be determined. alibaba is still -- is already in talks with banks to prepare for an ipo. the news did cause jump for alibaba us listed in the united states. shery: the unit has some big rivals. >> amazon is one of its biggest competitors. it has different companies

catering to different markets. valuations for these different business units very. morgan stanley price of the international retail units at roughly $29 billion. that itself is quite difficult. it is a reason battop's of them -- a reason battop's of them actually spent in up was anna. in recent quarters part of that has been compounded by the global concessionary fears. haidi: also an interesting time for a chinese company to be listed in the u.s.. >> absolutely. if you do see strong growth in numbers, the focus from

international investors is still on increasing tensions between beijing and washington. this is something else that can impact. if it did proceed with this listing it would join other high-profile chinese firms that have taken this same route. even with geopolitical tensions. certainly something we are watching when they do choose to put up the listing. haidi: and about us with the latest on the alibaba news. hsbc shareholders gather for -- to decide whether to spin off the banks more profitable unit.

what is likely to happen here, stephen engle? >> what is likely to happen is that there will be votes on 18 resolutions later today friday. coming to a head is this your long dispute really kicked off by some disgruntled investors and backed by the largest investor in can hsbc with the an 8% stake. they would like to see us been up of the more profitable asian unit. they want that spun off to unlock better shareholder value. hsbc says it is not a good idea

and would be highly costly and would not be in line with their strategy of being the global bank. there is some more restructuring that needs to be done, but again, these resolutions that will be put forward to investors later friday, includes these two led by a shareholder who is proposing two resolutions. one is the creation of a quarterly review of structural reforms aimed at those asian operations, including a spinoff and massive restructuring. the other resolution would be a more steady dividend policy going back to pre-pandemic levels. hsbc already address that in the

first quarter results being better than expected and they also pledged a better dividend payout ratio for this year and next. the analysts are saying maybe these first-quarter results which were better than expected could stave off the spinoff push my investors. you have to look if there is any institutional support for such a spinoff. there has been little indication that the big investors support these resolutions. we know chairman mark tucker has been meeting with these stakeholders and there has been no indication that they are supporting that. the california public employees retirement system has pledged to

back hsbc today. no word from blackrock or state street. keep a watch on this later today. haidi: archie north asia correspondent -- our chief north asia correspondent, stephen engle. this is bloomberg. ♪

♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪ haidi: australian bank merges

have hit the peak and earnings be much harder to make. he spoke exclusively to bloomberg. >> interest margins have hit the peak. a has shown that earnings will be harder to get over the next 6-12 months, but the economy still running well, the bank itself is running well. every part of the business has increased profits. >> we will get to the different pieces of the business in the moment but i want to get to you raising capital.

how do you see the bank getting through this environment amid the crisis unfolding up sure -- off shore? >> we are in the market of looking for liquidity. it seems to be going very well. no problem from our perspective. we have arrange of 11-11 .5%. we have been doing buybacks. we will pause to see what is happening in the economy. x x -- excess capital is being given back to the shareholders, so good there. the australian banking market is

still in very good shape, very strong regulation here. the regulators have not loosened in the last five years. we have been in good condition and we need to be. we have seen in the united states where banks have been found short. it is certainly not the case here in the australian marketplace. >> is there no blowback from svb or first republic? we are waiting to hear the latest on pacwest. what is the reverberation? is it to tighten up and make sure you are more judicious in the mortgage market? >> we made those calls 12 months ago on the stability and safety of the bank as part of our strategic refresh.

we wanted a stable, solid bank, high leverage of capital, and that is what we have. our treasury team has made sure we are strong on the funding. our funding ratio has gone from 70% to 80%. the bank has taken a very safe and secure position. we are a bank, we are highly leveraged and we need to be safe and secure. haidi: here is a quick check of the latest business headlines. a blockbuster result from a cory has helped offset a trend in dealmaking. net income rose to almost 5.2 billion australian dollars. top and the forecast from analysts. they will pay a dividend of $4.50 per share.

first martian parfitt met expectations -- anz bank first quarter profits met expectations. the ceo warned of more difficult days ahead, but not without opportunities. >> we are through the worst of it. most customers are behaving better than average in terms of credit quality. as we look at our competitors, that is an opportunity for us. haidi: can view climbs in its -- kenvue has climbed in its debut.

>> it is a great day indeed. it is a great day for all 20,000 team members around the world. today millions of consumers wake up with our products in their home. >> microsoft and amd are working together to bolster amd's microchips. codename athena, they are teaming up to develop a homegrown microsoft processor. shares in the adani group flagship jumped almost 130%. net income rose 138% in the three months to march.

adani group shares lost more than 100 billion dollars in value after it became the target of short seller hindenburg research. shery: this is the picture when it comes to australian futures. a little bit of downside there. we are getting a little bit of momentum when it comes to the aussie dollar, gaining for a third day. concerns mount over u.s. regional bank failures. when it comes to broader equities, asian stocks facing headwinds from the u.s. banking story. we are looking like a weak start. just watching the currency markets given the closed equity markets.

u.s. futures a little bit higher. futures for hong kong, little change there. watching china markets as we had that alibaba ipo news to see how a lot of these consumer and manufacturing names will be digesting the news. actually some storm clouds over the strength of the chinese economy. that is it for daybreak australia. this is bloomberg. ♪

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