all >> do bloomberg daybreak: asia we are getting down to the

market opens in australia. >> the top stories is apple sales rebounded, and $19 million stock buyback shares gaining after hours. it bloomberg's to. fees to refill the deposit insurance fund after the collapse of svb and signature bank. plus alibaba is exploring the u.s. ipo for its international online shopping and as it seeks avenues to spur growth. >> to u.s. futures we see a bit of a refound -- rebound after four sessions of decline in the regular session. we still have lingering concerns over regional banks hitting sentiment. we have the two-year yields plunging and the five-year yield touching this year's lows and at the lowest level since august. we are seeing those rate hike expectations starting to shift. we also had oil prices holding at $68 a barrel, level after the three-day crash and concerns about a detriment session and

global economic outlooks. take a look at global -- regional banks, those concerns have gone nowhere. pack west following -- falling more than 60 -- 50%. we also have western alliance falling, first horizon also pressure, more than 30% in today's session given that their merger with toronto dominion just fell through. the kbw bank index, 21 shares of heavyweights in the financial sector, all were down. take a look at after hours trading for apple because we are seeing upsides in trading, up more than 2%. those results were pretty solid, but the question is whether the bar was already set low, right. >> exactly. we want to dig deeper into these earnings without tech reporter mark gurman, who has been parsing through the numbers.

-- with our tech reporter. who has been parsing through the numbers. >> apple set low expectations for the quarter, the cfo said in his outlook that this quarter would go more smoothly than last quarter, a 5% decline. it was a 3% decline, that's how you beat that. in any other climate or context a 3% decline in revenue -- a year of revenue declines would not be pretty. this time they did well. if you look at the sales on iphones that was up, and they had a favorable compare for the iphone because last quarter they did pretty well on iphone sales despite supply chain challenges and they could not produce any apple pros. in terms of wall street forecasts they be on wearables, services and iphones but missed significantly on their personal computers which is an area of

concern. the 3 -- four big ones are doing well. >> we can't escape the cop -- topic of a high. and tim cook had words. >> he said that there are many issues in the modern age that ai needs to work through. -- with a out that we need to work through. to use a -- ai thoughtfully and weave it into their devices. i'm not going to let him off the hook. they were the first to permit ai into their products, and -- siri was the first ai personal assistant integrated into the iphone 4s. siri has not moved the needle and you don't see people using it very much, it has not had that sort of explosion that you would have expected. it does not work as well as other apple products and services. i think they have a long way to go to really implement ai. and i think there is a way they could thread the needle between

privacy and security and thoughtfulness moving away from those concerns about chat gpt and other ai while making something that is a solid offering to the consumer. >> a time with a lot of concerns over where the china recovery story goes, we see a lot more and -- of interest and excitement about india. >> india i believe according to my colleague, was mentioned 20 times between apple and people asking about india. it's a very hot area. people want to know if that is the next china. you see great -- greater china billing -- bring in nearly 20 billion dollars for apple. if they can even get 25% in india, that would be immensely important. >> let's get to a bloomberg school now, the u.s. exempting

smaller lenders from kicking in money to ensure the bedrock or punishment fund and settling -- saddling most larger banks with more of the bill. next week they will be refilling the fund, and it was depleted by the failures of silicon valley bank it signature bank. we were told that smaller lenders with less than $10 billion in assets will not have to pay. >> our next guest is addicting and long. of uncertainty and volatility. she is the global market strategist at her firm. given what we got from cher powell -- chair powell was sort of a conditional pause and know what the bank express, how should markets feel about this? >> they should be feeling uncertainty going forward because it is not about whether or not the fed really will

pause, it's not about how the government will handle the regional bank situation, but also that debt ceiling problem. it is also looming. the next few months i think will be a. significant uncertainty and that almost always leads to volatility. >> more pressure on banks? >> more pressure on banks and stocks and bonds. keep in mind we have seen volatility in the bond market exceed volatility in the stock market recently. i think that will continue. >> when can we expect this to sort of come to fruition? when could we expect, to return to the markets -- calm to return to the markets? >> we will need to see the resolution of some of those areas of uncertainty. the fed is telling us that it is data dependent, and there is a different standard going forward. but it is all about the data so we will see a focus on that. i think what we will see is a

disinflationary environment, lumpy but disinflationary, and we will be satisfied that the fed is not going to hike. that's going to take a couple of months before markets are convinced. then we have the debt ceiling. not -- god only knows. i don't think anyone predicted it would take 15 rounds for the speaker of the house to be elected. who knows how long it will take for this to be resolved. we hope for the best but should anticipate that maybe something more akin to the worst could happen and we can see a lot of volatility in the near term, going back to the 2011 playbook and seeing what performance was like four different asset classes for that short. when things went haywire -- short time when things went haywire. with the banks, they could resolve it quickly by saying we are going to guarantee all deposits. i just don't think that they are ready to do that yet and they seem more focused on replenishing the fdic fund then

really thinking about how they can stop what really is a tax on regional bank stocks which are vulnerable. >> christina, how defensive with the dashboard position be on a portfolio -- what a position be on a portfolio? >> it's hard to be doing this in the short-term, but you can be tactical and if you want to be tactical that is defensive. under waiting equities but also be more defensive in equities. focusing on what i call the secular growth sectors. technology would be an example, health another. within fixed income, i think we want to have more exposure to investment in corporate and treasury right now. within the allstate while working so under waiting goal

and overweighting oil in's -- for example. that is for a short-term volatility that we anticipate in the next several months. think at a certain point, markets are actually going to start to discount an economic recovery in 2024 and that would mean a shift in position? a -- more of a -- two more of a westbound environment. >> in it comes to this credit tightening are you looking at -- are you looking for additional exposure -- international exposure? >> the fed is nearing the end if it not -- is not at the end, it is at the end of its rate hike cycle. we are likely to see the dollar weaken, that will be a tailwind for international equities, and fixed income.

i think that a sweet spot right now is asian emerging markets. both into the bond market and -- in the bond market and the stock market. there are a lot more likes to the china reopening story. they have been bullish on china for a while now since it was announced that the economy would be reopening and i have been pleasantly surprised with what has happened thus far and i think that where we are going to see the economic activity continue to be really strong is services, a very very's symptom -- very similar story to what we saw in other economies. that can last a long time. >> is that enough to counter the fact that we have this recovery where factories and manufacturing are disappointing? >> think it is. i think it is to be expected that we will see some disappointment in the manufacturing space because the economy is slowing down. i think this services activity will be strong and it will

continue to rebound for a long time. >> greater happy with us here christina hooper, chief global market strategist at invesco. let's go to vonnie quinn. >> the european central bank has downshifted its rate hike as it battles inflation and says it won't be the last move. the president says that it's key that they don't pause and future decisions will be data-dependent. this was the highest rakes -- rate hike since 2008. >> inflation is still being pushed up by energy cost increases and supply bottlenecks. in-service is especially. it is being pushed higher also by pent-up demand from the reopening of the economy and by rising wages. >> applications for unemployment benefits rose by the most in six weeks indicating softening in the labor market. jobless claims rose by 13,000 last week about the forecast.

continuing claims fell by 1.8 million, the biggest drop since july. western alliance has denied a report that it is exploring a sale of all or part of its business calling it absently fall. the financial times had this -- reported to the contrary. they say they have not seen deposit flows that are unusual in the wake of the sale of first republic bank. goldman sachs has undershot on its fundraising attempts. the firm is looking for to shore up the shortfall. goldman is cooperating with government requests for information but declined to comment. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries.

i am vonnie quinn and this is bloomberg. >> still ahead, hollywood breaking -- racing for a prolonged disruption as another writer's strike comes there. jonathan handout joins us later this hour. -- handout joins us later this hour. plus more on ipo options. this is bloomberg. ♪

♪ (upbeat music) ♪

( ♪♪ ) ( ♪♪ ) ( ♪♪ ) -awww. -awww. -awww. -nope. ( ♪♪ ) constant contact delivers the marketing tools your small business needs to keep up, excel, and grow. constant contact. helping the small stand tall.

>> this is the set up when it comes to the friday session. it is a holiday session across asia japan and korea, and we do have futures looking week starting off on the back foot. largely muted when it comes to hong kong futures as well. qb stops downpipe .4%. we -- kiwi stocks down by .04%. we see a ship tech getting a pump with expectations of apple

numbers, not much of a reaction when it comes to supplies. we are watching taiwan as well as hong kong and midland china markets when they open. still watching some of that impact when it comes to the regional and u.s. banking stress on markets as well. some of those close markets today, japan and south korea and thailand as well as sri lanka. >> we have a scoop on alibaba for its online shopping unit. we've been told exclusively that it is considering a u.s. to the commission, and we have more details on this year. this is early isn't it? >> a lot of details need to be hashed out. what we understand is that alibaba may lists its online shopping unit, the actual size is yet to be determined, but what we were told by sources was that the first report was that

alibaba was in talks for banks prepared for an ipo as soon as next year. this is really trying to unlock value for the broader company and it is part of the reason why alibaba first enough these plans to spit -- split its division into units back in march it was overall well-received. but in terms of investor reactions we did see alibaba closing higher on wall street by just 1%, but a pop of 5% when the breaking news headlines crossed. >> from analysts, but we've got from it -- moberg intelligence is that if alibaba will proceed with this ipo that is something that could spur growth for the business. by their estimates, alibaba could surpass adjusted estimates by more than 3% for the fiscal year for 2024, that would be the result, they say, if alibaba were to proceed with further

cost-cutting in order to make this unit profitable in time for an ipo, and part of the metric or valuation of this company -- comes from a rival, and it posted profits for the first time in the fourth quarter, which really helped support its valuation of nearly $20 million. >> -- billion dollars. >> what ballpark are we expecting? >> it is difficult to judge. we have seen varied estimates, and that speaks to the nature of the online shopping business because it does have different companies in his portfolio which came into different markets, there is a big one in southeast asia, aliexpress is big in russia, and different valuations have come through from the likes of morgan stanley, pressing the international units at around $29 billion, then at the same time are in the same month we

got another report from cicc saying it was worth up to $39 billion. it was interesting when you talk about valuations because in the past week had thought about alibaba splitting off, and part of the reason that it did not proceed was that talks bogged down over a lack of clarity over the company was footing from. -- splitting from. >> you can get a roundup of all the stories that you need to go to get the name -- dagon, on our terminal. go to dayb and you can customize your settings so that you can get only the news and assets that you care about. this is bloomberg. ♪

>> trading kicks off in

australia in the next hour after margin presser -- pressure set of difficulties in the market. the ceo spoke to us earlier about those results. >> we have been getting into client -- ready for this kind of environment. but there is a sweet spot for financials and in a. of rising interest rates that tends to happen. but in the long term, margins have been following -- falling consistently as competition becomes more and more intense and consumers get a better and better deal, and we prepare ourselves to be able to respond and compete in that environment. >> what has been the impact of rolling out fixed-rate loans over the next 12 months, what are the margin pressures you are preparing for?

>> we see it as an opportunity, the -- week are to the worst of that the -- for a whole bunch of reasons. our fixed rate happened a lot quicker. we found customers have actually been behaving better than ever in terms of credit quality, and they have not moved on. when a look at our competitors, that doesn't concern us. if we are out in the market and pressing the right deal at the right time, those customers may move to another bank and we want to be a reception for that business. >> some of that offset that we have seen in those numbers is clawing back some of the mortgage market. how is that playing out and how does that unfold how you seek competition in that space but also the broadening housing -- broader housing market? >> it's an interesting question.

for those of us who may not follow us who may not follow estrella too closely, we had a crisis through covid where some of the major cities had prices up 50%, and interest rates have risen to battle inflation and froth is coming out of those prices. prices are down 10%. at the same time, employment has stayed really high and wage increases, people's incomes are higher. from where i sit i would much rather be dealing with moderate prices and higher incomes than we were over the previous two years. if we have a really good setting, we still have to be cautious. returns are not like they used to be five and 10 years ago, it's a tougher business. you have to be much more targeted. one of our core propositions is around people who run their own

business. business owners and sole traders and that sort of thing. that generates 30% of our flow and new businesses in that sector and that is something we did well, better than others, and is something that generates a slightly higher return because those customers are more loyal. >> shane elliott speaking exclusively to us after the first half of results from a fairly. i latest check of the headlines. a blockbuster result from my cory's -- mac cory's, a 10% jump in annual profit. net income rose to almost 5.2 million australian dollars, topping the $5 billion forecast from analysts that we've survey. they will pay four dollars and $.50 a share. shares in adani jumped after profit more than doubled year on

year. adani enterprises say that they rose more than 30% and mining revenue tripled at its airport armed group 5%. adani shares lost more than $100 billion in value after became -- it became the target of hindenburg research a short seller. the fed holding off on cutting rates as soon as next month, more on the data that might affect that next. this is bloomberg. ♪ hi, i'm lauren, i lost 67 pounds in 12 months on golo. golo and the release has been phenomenal in my life. it's all natural. it's not something that gives you the jitters. it makes you go through your days with energy, and you're not tired anymore, and your anxiety, everything is gone.

it's definitely worth trying. it is an amazing product.

>> you're watching daybreak asia, and we have a check on markets. we are 30 minutes out from the

open in sydney and we do have soul and tokyo shut for public holidays. broadly we see a couple different factors really influencing traits. we had some apple numbers out as the storm figures come through and also pointing to for the market share being gained in china. that is one supportive factor for the equities backdrop and still on the session it was about that banking stress and the sign -- signs that it's not over yet. we already have kiwi stocks on the downside, australia pointed to a weaker opening, but when you take a look at what is happening on wall street we see those will be higher and maybe that reflects those earnings coming through from apple. but that that is still building that the fed will be forced to cut rates at the end of this year. jay powell push on that on his press but bond traders thanks otherwise. -- bond traders think otherwise.

overnight, they hiked between five basis point, and more is to come from the ecb. we are new the end of a taking cycle, according to analysts. >> the president of the european central bank valid to keep hiking rates as we saw that 35 basis point hike was -- which was a downshift from 50 points. kathleen hays is here with the latest on this. >> they are insisting that will continue. and i believe them. they have not -- they started hiking later and have not hiked as much, but they have more to go, the president of these to be it clear, they did 25 and not 50 for a number of reasons. more ground to cover. here is she said. >> -- what she said. >> everybody agreed that increasing the rate was

necessary. that we are causing, that is very clear. -- not pausing that is very clear. we have more ground to cover on the basis on the baseline that we had, which is still gunning us until we have our next projection exercise. >> as an objective observation you have to listen to her voice and watch her body language. she seemed very clear and there was no hesitancy. this is what they plan to do. the vote was not unanimous and there were some who would have preferred the higher hike. that is considered a reason why the ecb unexpectedly announced that it is going to halt, completely, the reinvestments in their asset purchase program. so that is another of tightening. they are going to do that in july. ecb also stresses in remarks in the written policy statement

from the ecb that they would remain data-dependent. yes, inflation, the court your over year rate did come down 1/10 on the latest reading, it came down to 5.6% year-over-year. still far above target, first time in 10 months they have had some improvement. maybe a little too soon for the ecb to say you're getting such improvement and we can stop hiking rates. basically the markets seem like they will have 25 basis rate hikes that will probably be the end of it. there is a lot of talk written about that it is unheard of that they can stop hiking rates if the put -- fed has pause. we don't know that the fed has pause. and they started hiking after the fed. maybe that is why they have more to go. an interesting observation, we will see if it makes any difference to the ecb at this point unless there is some huge move in the euro or so they like that, it doesn't look like it. it looks like they know what they are going to do.

>> slow employment growth is expected when it comes to friday's job supports. this is change -- job report. this is change anything for the fed -- does this change anything for the fed? >> they said that the labor market was too tight and they need to see something demand. these payroll numbers would be a downshift from 236,000, look how many times the estimates have been wrong. they have been too low. the latest adp jobs report saw a gain of 185,000. these two do not go lockstep, but that is a decent number for the adp. so we have to take this one perhaps with a grain of salt. unemployment is supposed rise 1/10, average hourly earnings stay steady. is this the kind of job growth that would change the fed view, that yes they might pause but they have to see support for that in the numbers. what that be considered support

-- wouldn't that be considered support? >> it might not, but the payroll gain would have to get down to $35,000 a month to -- 35,000 a month for the weakness that would bring down the labor market tightness which would boost inflation. so something interesting. bloomberg television spoke to the ceo of chipotle, and they said they are starting to see which normalization, expected wages people are asking for, they are expecting increases, more like in mid single digits kind of number. so maybe there is some improvement along those lines. we will have to see more numbers to be convinced on this. >> always dated to attendant. -- data-dependent. kathleen hays that. amid the regional bancshares route, david really sees that

pricing, this is not so much doubting jay powell but telling him that he is wrong about the direction of the economy. >> certainly the market is very persistent on this one. he has been fighting the fed all year, and is even more convinced now that it appears that there is a small probability, around 14% that the rate will be cut. but the attorney five boys -- basis point rate cut ended at 60%, so that's a high populated. if you look at the end of the year, there pricing in rate cuts, and they're saying guess we are in not going anywhere as you say, but the markets disagree with you, and that's because of the banking crisis. we will be looking at the lending survey and the tightness that has gotten word the economy will go into contraction. the question from the fed though will say that there could be a potential recession, but the fed

says we are more concerned about inflation and recession does that mean inflation will come down, we might see stagflation. but the market is saying that we don't care, you will cut if there is a perception, so both the fed and the market are at loggerheads. they are at loggerheads over what the terminal rate would be, 5.1 or not, and the fed has won that battle, whether it wins the next -- next battle is another thing. >> what data points should bond markets be watching? the key thing is obviously the overall numbers are always key, but the wage growth. if that remains high then if it comes out 4.2%, it's very tough to think that the wicked -- official come down. the headline number will always be a factor as well. but as kathy has indicated, if it comes in line with estimates, we will just have 180, still

very solid. at the moment, the data does not forecasts, the fed can say we still have a tight labor market overall, and that does not warrant rate cut in. the market going with the biggest stress but necessitated anyway. they are looking at the data to change quickly for the first -- fed to spur rate cuts. >> our rates strategist there. let's get to vonnie quinn with the first word headlines. >> a report that is exported the possible sale of all or part of western alliance label absolutely full. they say they are exploring to -- strategic options and are in the early ages of discussions. lender says it has not seen initial deposit close following the sale of first republic bank. china has ordered state-owned enterprises and domestic companies to ramp up security chests on accounting firms.

should include specific security clauses for appointing auditors. it underlies their fears of data security as tensions with the u.s. lender. the taiwanese intelligence ministers -- has said that xi jinping has surrounded himself with people who make a wrong decision like that. they have supposedly been exchanging information with the five eyes spy network. china is also finalizing deal with their weapons. taiwan is finalizing deal with the weapons. natalie fans celebrate the first win in more than three decades. it's only previous title was in 1987 and 1990, and tripping -- number three came with a draw away, and more than 50,000 fans watching the game on experience. -- make experience -- big

screens. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries. >> next, the author of hollywood on strike says that the current writers blockade may last for month. this is bloomberg. -- months. this is bloomberg. ♪ 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.

>> the alliance of motion

picture and television producers which residents live with studios has said it has offered $97 billion in gross raises to striking writers. jonathan handout-- handel was the author on a book about a book about previous writers strike. and as you read this book, a lot of the strikes are characterized as inevitable. why is that, why are they carried through previous they were unrest and what will happen from here -- labor unrest and what will happen from here? >> they have been because of the eligible change, and it was inevitable three years ago, except that they started when covid was a merchant -- emerging, and you cannot walk off the office if it's already close. there is a lot of unfinished business the guild thinks it needs to take care of. they have issued small mini

rooms, rooms of writers, in conventional series. a series is 22 episodes but the new normal instrument and cable at this point is 10 or even shorter as people will not say if they pinch on netflix or hbo max -- binge on lesser hbo max. that has an impact on the labor market. writers are drawn and by new series, and each series months its own writers. but there is less work for them to do when they arrive. because it is 10 episodes or eight rather than 22. it is a fundamental disconnect in the labor market which is causing enormous difficulty. they want minimum staffing levels and minimum duration of staffing as well as increases in the dollar minimums for scripts per week. the studios are willing to give some of that but not minimum staffing in particular because they say creatively some people and show runners want to write all the script -- scripts.

some people want a small team. we can't agree to that. the guilt response was that it is making the profession unsustainable and a gig economy. the studios say they are in cost-cutting mode, the are spending billions of dollars building these platforms, and the retort is that you are spending billions of dollars building -- building profit engines based on our content and we need a sustainable share of that and a living. >> you have talked about all of this from -- the fundamental crops is that streaming has become the norm. if you're talking about structural, major structural changes to the industry, do pay rises fix that? >> not necessarily, because these are short-term, not year-round employment somewhere. 22 episodes translates into weeks of employment and you take your vacation and work on your own script, pilot script that hopefully you become a

showrunner, you are going to play or a feature film. with 10 episodes or eight, that translates into something like 20 weeks of employment, and the guilt says that is not enough for competition. the trade press has raised an important issue which is that the writers guild has cherry picked the figures, and that they don't release figures on what the typical writer makes in a year, they released weekly figures and this and that and how those have declined or changed or not kept up with inflation, but the first casualty of any kind of war is a degree of truth and we don't know all the facts. however, anecdotally, there are very strong complaints from guild members. they are very much in solidarity. we have seen doing proposals released to the public in the last two days of what the last negotiated sessions were and the parties are far apart. >> what does a long-term

standoff mean for programming? >> to take the premise of the question, this is going to be a long-term standoff, there is incentive on the companies to keep this going eight weeks so that they can terminate deals made when money flowed like water, those can be terminated at the drop of a hat because of contractual provisions that relate to anything that disrupts or shuts down the industry for more than eight weeks. what it means for programming is this. it depends on the program. late-night programs are already dark, you see reruns because they are written day by day. topical. weekly programs like saturday night live, also dark because they written topically. soap operas if you do still watch soap operas, will go dark. network programming, the fall

season will be affected if this lasts as long as we get well. streaming banks content for a while, you may not see a difference in beauty. eventually you will sleep more on all platforms, more news and sports and reality television, and foreign productions, as in the case of netflix which pioneered that. reality actually came to the fore in the 1988 writers strike and was turbocharged by the last 150 years ago. >> you have been following the industry for a long time and seen these structural changes happen. with this very fundamental issue of how the media industry operates now. what is the compromise? >> on the staffing levels issue, it is very very tough, to be honest. you could say why not's the difference, but the studios really are insisting that any mandatory minimum may result in hiring writers who want have any

work to do. if an art tour showrunner, a person who creates and runs the show is someone who wants to write all six scripts themselves, you know, what is that, lies on additional staffing -- what is the compromise on additional staffing? >> if the writer wants -- the showrunner wants to work with a close team, the guilt still wants eight writers for that. you could say what about for, wealth and what about the showrunner who only wants to writers, higher tomorrow and they have nothing to do? it's difficult to make numerical splits like that. >> i was just going to finally observe that he would usually see more leverage on one side with a situation like this. can the industry afford another. of prolonged shut down, and are they going to be -- are there going to be portions that will

be suffering and not strikig? > >> absolutely. the last strike had 82 -- an estimated $100 million a day impact, a $2 billion impact, that's not just writers, its actors and directors and crewmembers out of work. its suppliers and their employees out of work, it's restaurants and flower shops and limousine drivers and retail stores where there is less spending and people get laid off and the list goes on. a dollar not turned ripples through the economy. -- earned ripples through the economy. we will have a huge impact on a lot -- it will have a lot of impact on a lot of people. particularly through los angeles and atlanta and new york. >> good to have you with us.

thank you. we have more to come on daybreak asia. this is bloomberg. ♪

>> here is a quick check of the latest business flash headlines. alibaba is live online shopping unit is considering a u.s. listing. sources tell bloomberg the plan is early and the ipo size has

yet to be determined. the unit includes aliexpress at other companies and has been evaluated at $40 billion, as one of the six groups that alibaba is putting into as part of a historic rebound. margin pressure offset a move to pull back a larger chunk of the mortgage market in australia. cash profit came in at $2.56 billion, which was in line with estimates. the ceo's warning of a more difficult second half for agency bank, and told us that the bank sees opportunities in retail mortgages. >> are fixed rate rollovers happened much earlier than the rest of the market, so we are to the worst of it. those customers are behaving better in terms of their credit quality, and they have moved on. with our competitors having to do -- deal with it, that is an

opportunity for us. >> hong kong retailer is attempted to revive its brand in north america. it's the ceo spoke to romaine bostick about this strategy. -- it's ceo spoke to romaine bostick about this strategy. >> i'm going to move the headquarters -- i moved the headquarters to new york city, and it is now a new york brand designed and created for the world but in the u.s.. >> where is the focus right now, is it asia or europe or now north america? >> it is going to be north america. there is a billion-dollar business in europe as it is but in north america it is a brand-new market. it is going to be much more limited. we are coming back elevated. >> how strong is your brand name and recognition going to be, in north america it seems like every day you have sort of a new designer coming out with their own line of clothes, you have all of the legacy designers out there as well, how does this fit into that? >> the brand recognition is it.

wherever you go, everybody remembers the brand from before. that is already there. we opened a pop up in soho in december and some of the customers submitted their stories and pictures and memories about the brand. it is there already. it used to be one of the top 10 brands a long time ago and i think we can quickly do that if we do the execution correctly. >> what is the pricing like in that execution, where do you position yourselves on that price scale for consumers? >> it would depend on what kind of materials we use, but the pricing would be anywhere upwards of 1200 for a very nice collection but the bulk of it will be somewhere between $100-$400. >> is accessible or more in late -- is that accessible or more elite? >> exportable at a good price. -- good at a good price. >> what about shipping them where they need to go? >> when it came on board there

were 250 factories geared towards fast fashion. we had selected each one and met with the owners and we really did a lot of due diligence making the -- making sure they comply with our sustainability standards. >> aspirate ceo speaking there. the market conference in ceo is next -- the market open in australia is next. then we have japan and korea on holiday. this is bloomberg. ♪

as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network, with no line activation fees or term contracts... saving you up to 75% a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities™.

- this is "the more you know" like you've never seen it before. - these are real talks... - real experiences... - used to spark real action. - join me and others... - as we get personal about making an impact.

haidi: this is "daybreak asia." we're counting down to the market open in australia.

japan and korea away on holiday on a day when it was again risk offer the s&p 500. with apple doing a little bit better. >> after those probably lower expectations. a look at the australia banks as well asking to quite well. although there's just increasing consensus that we peaked when it comes to margins. what are we watching this friday?

first horizon and you had that probe at j.p. morgan oy also weighs on sentiment in the session. the s&p 500 down for a fourth straight day. what else? investors really focusing in on today is what this all means for the fed. because there is that expectation at leetch in babbitts that we are going to -- bond markets that we are seeing a cut in rates and traders moving into the safe havens like the yen. apple a big focus. and in after hours and lifted. the s&p mini contract a little -- a quarter of a percent and when you speak about earnings you say haidi the focus on those aussie lenders. and looking a little bit weaker at the start of trading. but still first half profit meeting analyst expectations as you said it really is that margin pressure. really helping to offset a move

with a larger chunk or -- a larger chunk of the mortgage market. in terms of what else we're watching the focus is on brant crude. that is sort of stabilizing somewhat. it has really been hit by a vortex of negative news sentiment. we do see it on track for its worst run this year. it is really down to those recession fears that are building in markets and you mentioned we do have a few markets that are shut in the session. taking a look at those in particular, japan and south korea would typically be online now in sri lanka and thailand also closed this friday, haidi. haidi: let's take a look at how investors are feeling about china. despite the two-speed recovery fueling doubts about the broader growth outlook our next guest is constructive for 2023 earnings for chinese equities. looking out for signs of a broader macro recovery. jonathan garner, chief strategist at morgan stanley and great to have you with us and been too long since we've had you on "daybreak." china, the data is becoming more

and more supportive of a bifurcated recovery. and perhaps one that in some respects won't be as sustainably strong going forward. is that the -- what you're looking at this economy in and how are you finding the opportunities? jonathan: well, certainly the recovery is very consumer focused. that's true. we were not really expecting property construction, for example, to contribute to recovery this year. but the consumer is extremely strong. we're just going through the golden week process. and domestic travel is up in terms of trips taken about 20% on 2019 levels. and there's some variety in the way in a consumer companies are reporting. it's very clear that the chinese consumer is backing out in force and we still have a lot of confidence that by the fourth quarter this year that we will be looking at something like 6% year on year growth. and that's in stark contrast to what's going on in the u.s. of

course. haidi: in terms of how you find those -- beyond the low hanging fruit, what are you looking for when it comes to equities growth when it comes to the chinese markets and which are the sectors that are perhaps to benefit from the next legs of that recovery? jonathan: well, we think the market as a whole in china is -- has cheapened up again. it rallied very hard over three months to the end of january. at one point outperformed the s&p by 50% off the bottom. that's narrowed subsequently. but you're down now across the market really in china to low valuation, sub 10 times forward p.e. broadly we like consumer, consumer services, e-commerce, internet, tech hardware-related names. we are quite light across the regional in fact, not just in china, on energy, upstream energy and also on diversified miners. we've been quite cautious on the iron ore price, for example.

so we are really trying to play this mostly through the consumer. shery: with the chinese equities earnings actually missing when it came to the last quarter of last year, do you expect this to actually improve? jonathan: yes. so the way that this typically works is stock prices anticipate earnings cycles sort of six to 12 months out. so given that stock prices in china and the rest of the region last october it's crucial that we do see earnings recovery in the -- recover in the second half of this year and we have a high degree of confidence in that with what where seeing on the ground. outside of china we have this broad situation in semiconductors and technology hardware where the firms are adjusting production, inviners to are starting to fall back. and we think fundamental demand will build up through the next cycle through 2025. so it isn't just china. there's also for this region a very important turn in the cycle in semiconductors. more broadly. shery: we are talking about korea and the likes of taiwan as

well. jonathan: there are other two major overweights. and we are funding those through a more cautious stance on markets -- middle east and latin america. all of which typically late cycle performers and did quite well through the course of last year. so we made this wholesale change last october. and so far, so good. shery: jonathan garner, you're staying with us from morgan stanley. we will be talking more and developing economies across asia but for now let's turn to annabelle for some. movers as australian bank stocks are now in focus. annabelle: yeah. that's right. not just from what happened on the wall street session, recapping that, we did have another unsettling round of trading halts coming through for the likes of pacwest, also western alliance, first horizon. so that certainly did tell us perhaps that these concerns the worst of the financial sector issues are not behind us just yet. so that did lead to big moves on the u.s. session. and so in terms of what we're watching in australia, that is

one of the reasons we're focusing in on part of it as well comes down to what came through in earnings. and we did actually have results out from azed, first half profits meeting expectations and cash profit at $3.8 billion aussie dollars. in the six months ending march 31. you guys spoke with the c.e.o. shane elliott earlier and he said it's broadly true really that bank margins have peaked. and earnings over the next 12 months are going to be a little bit harder to come by. we asked the azed bank under pressure at the start of training. ma quarry also in focus and thks the investment bank in australia and saw the net income rising to $5.18 billion aussie dollars in the year ending march 31. that was stronger than what economists or analysts had been expecting and that's largely down to its commodities division which posted bumper profits helping to offset a downturn in deal making and broadly, you can see, it is a weaker start to the day for the bank stocks in australia. haidi: let's get you to vonnie

quinn with the first word headlines. vonnie. vonnie: thank you. the european central bank has downshifted to a 25 basis point rate hike as it continues to battle inflation. but it also says the move won't be the last. e.c.b. president christine lagarde clear the central bank is -- future decisions will remain data dependent. deposit rate of 3.25% is the highest since 2008. >> inflation is still being pushed up by the gradual pass-through of past energy cost increases and supply bottlenecks. in services especially, it is still being pushed higher, also by pent up demand from the reopening of the economy and by rising wages. vonnie: western alliance has denied a report that is exploring the possible sale of all or part of its business. calling the report absolutely false. the financial times had reported that the company is exploring strategic options with advisors and is in the early stages of discussions. the lender also says that it hasn't seen unusual deposit flows following the sale of first republic bank.

u.s. government agencies are reviewing the role played by goldman sachs in silicon valley bank's march fundraising attempt. s.v.b. had sold a $24 billion portfolio to goldman at a loss. looking for firm's health in raising more than $2 billion to cover the shortfall. goldman couldn't pull off the deal before bank run led to s.v.b.'s collapse. goldman is cooperating with government requests for information. but declined to comment to bloomberg. thousands of people have been celebrating in the streets of naples after their team won its first top flight italian soccer championship in more than three decades. the argentine superstar diego maradona led napoli to its only previous titles in 1987 and 1990. and a 1-0 draw, more than 50,000 fans packed the home stadium in naples to watch the game on big screens. global news powered by more than 2,700 journalists and analysts in more than 120 countries. i'm vonnie quinn and this is bloomberg. haidi. haidi: coming up, alibaba's

global online shopping unit set to be weighing an i.p.o. in the united states. we'll get details of our exclusive on that potential listing just ahead. plus china's holiday spending spree failed to boost stocks as mainland markets came back online. goldman sachs weighing in on that recovery story later this hour. hour. this is bloomberg.

guests check in, then check out their phones - for financial insights from merrill. this gentleman? he's learning how carbon-neutral investments

could energize his portfolio. and with advice from their merrill advisor, they've decided that the future is women-led startups. she's got a million followers, but she's following trends in next-gen tech. personalized advice so impressive, your money never stops working for you, with merrill. a bank of america company. ♪ (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: take a look at how where trading when it comes to the first 10 minutes or so of markets coming online here in sydney. and watching the banks today as we have a.n.z. online. a robust quarter but more specifically when we spoke to shane elliott the c.e.o. talking about margin pressures and reiterating what we heard from ross macewen yesterday which is margins may have peaked when it comes to this era for the big

australian lenders. also watching the likes of maquary and broader markets up .3% and msci australia up .4% there. the aussie dollar still holding on a little bit of momentum under that 67 cent u.s. mark. the e.c.b. decision didn't hurt too much when it comes to pricing movements on the greenback. but we do see the yen gaining for a third straight day as we continue to see those haven trades playing in with the ongoing u.s. banking turmoil. and keeping an eye on treasuries, the bond market as treasury traders continue to push bark on what the fed and chair powell is saying about the trajectory for the economy going into the rest of the year. these are the banks that we're watching. anz a loss of .25% and not quite as bad as of the reaction and extending those losses today and national australia bank falling yesterday. the most since 2020 on those comments about a peak in margins. we did hear similar sentiments

from a.n.z. and maquary bank lower despite beating when they reported earlier today as well. shery: and jonathan garner, chief asia and strategist on morgan stanley. thank you so much for sticking around. that reaction in australian banks makes sense to you? jonathan: we're cautious on banks across the region and in australia and korea. some of the more developed market bank sectors. we are -- we're particularly bearish, i think when we look at australia, the further hike from the r.b.a. wars not expected by the market. and we have an inherently leveraged economy on the consumer side. and so that does raise issues going forward about the credit quality for the banks. and the sector globally is derating at the moment. as we said in the earlier segment we would rather be playing things like the china consumer recovery and where we do like financials it's in the

much lower income parts of the asia space. so in india and indianapolis niecia where the -- indonesia where they can catch stronger fundamental deposit growth. shery: it's interesting because when i think of banks in india i don't necessarily think they are on solid footing but we also had the banc of america call today that they expected a 40% earnings downgrade in broader indian stocks. how do you feel about the country? jonathan: yes. so obviously can't -- competitor research. but rather like china, it's going to be a stand-out globally for g.d.p. growth this year. it's not recovering off such a low base like china but going to quite easily deliver 6% g.d.p. growth and looking in local currency terms in mid teens earnings growth for this year. and the valuations, though, are relatively rich. and that's why we're not actually overweight india. we -- we're seeing a market where, for example, in price to book about 3.5 times price to

book. that is actually quite rich compared to the rest of the asia region. haidi: jonathan, what else do you like across emerging asia? aren't we still seeing the major drivers when it comes to jitters over the fed and the u.s. economy as well as some of these uncertainties over china being the major anchors for where e.m.'s go from here? jonathan: so our overweight china, korea and taiwan and then outside of this region we have u.a.e. and mexico. i think what's important going forward with the whole fed debate and what we're seeing, for example, around the debt ceiling issue which we wrote about yesterday is how the u.s. dollar reacts. and at the moment, the dollar is broadly still weakening which iy quite favorable for allocation toward asia. asia and e.m. and yet today we have had hover $50 billion come back into this region. and allocators look at the better growth opportunities in asia relative to what you're seeing in the u.s.

shery: what about your assumptions when it comes to currency fluctuations, when it comes to emerging markets? jonathan: well, last year was very interesting because even though the fed was hiking rates so aggressively, we have really minimal movements in emerging f.x., emerging currencies typically when the fed is hiking have come under pressure historically. but i think central banks require proactive including actually in india and indonesia in raising rates. but we never had the inflation breakout that you saw in u.s., europe or u.k. and fundamentally through the covid era, the supply side was less interrupted, particularly the labor markets, here in asia. so we don't have the underlying inflation problem. so this mix of strong growth and relatively low inflation is a key reason why this -- we expect this region to outperform from a global perspective. not just in equities but in

other asset classes, too. shery: you mentioned mexico a bit earlier and we have seen the super peso recently and a lot of bullish calls on the country and at the same time they're very reliant on the u.s. economy. and we are headed toward an economic slowdown. not to mention that we really don't know where we're headed with the debt ceiling standoff. that could potentially cause more volatility. how do you factor that in? jonathan: yeah. if we go back to 2011, the last time that this issue really did affect markets, it was a very pronounced standoff in global equities over a four to six-week period. and on that occasion emerging markets performed broadly in line with the u.s. and we expect it not to be as severe this time. we would probably decline. but not to the same extent. given some of those factors thai just mentioned. and in our judgment, those five markets that were overweight are going to be on the hole more

defensive. there's a slight catch yacht in relation to korea and taiwan which have higher beater characteristics. if we just look at trading this week, the last sort of four trading sessions as you were mentioning. the s&p is coming under pressure but british markets have held up very well. now that we're right in the middle of this issue with regional banks in the u.s. and clearly the debt ceiling issue. secretary yellen sort of put it on the table really at the start of this week. haidi: we heard from the e.c.b. about the reminder that geo politics is another risk that could worsen inflation or could worsen the broader macro outlook. is that far from your thoughts when you're looking at some of these key markets? a number of those preferred markets will be very impacted by geo political tensions between the u.s. and china and those allies? jonathan: yes, we are in a period of sustained elevated geo political risk and have been for some time. that is having an impact,

particularly on certain indices in the region. praiks the hang seng index -- for example, the hang seng index is more volatile than recently and we can be buffeted by that in the near term. we tried to factor that into our valuation and in china the multiple is below 10 times forward p.e. and our target multiple is 11 1/2. through the cycle average multiple is closer to 13. so we have set our multiple targets relatively conservatively to take account of geo political risk. haidi: jonathan, always great to have you with us and appreciate your time. jonathan garner, chief asia and e.m. strategist at morgan stanley. you can get a round-up of the stories you need to know to get your -- get your day going. "daybreak asia." and available on the mobile in the bloomberg anywhere app. you can customize those settings as well so you jest get the news on the industries and assets that you care about. this is bloomberg.

>> we were pleased with how -- with how we did and with the acceleration that we saw with the reopening. so we feel good about it. it also -- china has a lot of very good metrics. haidi: tim cook on the outlook for china but not just about china. india also stole the show. india, about 20 times on the earnings call. and just returned from visiting the country where he sees massive opportunities. and of course we saw those gains in the after hours session for apple. and they had a relatively positive quarter. iphone sales outperforming. let's see how asian suppliers for this company are doing.

annabelle: thanks, sheriffy. sheriff forthe supplies, the ap. we are looking ahead to the open in china in the next hour. and so that is going to be a particularly interesting market for us to be watching those suppliers given as you noted and we heard just there from tim cook in the sound bite is that apple sales in china which have been relatively weak spot for other companies, came in better than expected and really was a period for the iphone 14 to rebound. given that china had been hit by those severe or strict covid zero policies in the prior reporting period. so these are some of the names to be watching at the open of chinese markets and hong kong in just about an hour from now. and taiwan is also coming online at the top of the next hour. we'll have futures starting to trade in about 20 minutes from now. and there are quite a few names to be watching here as well. particularly tsmc and we actually just had some headlines as well crossing from c.n.a. and they're saying that the u.s. is

hinting that taiwan chip-related companies could get chip act support. this would follow a report from c.n.a. back in march and that said that tsmc found certain restrictions, regulations in the act was simply unacceptable and they could dissuade potential partners from applying for the grant. so certainly something else to be watching on top of it, the apple earnings plus geo politics in focus with the open there. haidi. haidi: annabell in hong kong. a blockbuster result from maquary offset a downturn in deal making and a 10% jump in annual profit. net income rose to $5.2 billion topping the forecast from analysts that we surveyed. maquary a final dividend of $4.50 a share. and a.n.z. predominant met analyst expectations as margin pressure, a move to call back a larger share of the mortgage

market. cash profit in line with estimates. and in an exclusive interview earlier, c.e.o. shane elliott warned of more difficult days ahead but not without opportunities. >> and our rollovers happened much earlier than the rest of the market. so we are through the worst of it. and what we found is those customers have been behaving better than ever in terms of their credit quality and so they're now moved on. and as we look at our competitors having to deal with it, that's an opportunity for us. haidi: alibaba's global online shopping unit is considering a u.s. listing. sources tell bloomberg the plan is still in its early stages and the i.p.o. size is yet to be determined. that unit includes lazada and elliott express and been valued at nearly $40 billion. and one of the six groups that alibaba is splitting into as part of its historic revamp. well, "golden girls" will be telling us whether china's consumption rebound can improve poor market sentiment for the

country. we get more on that story next. this is bloomberg. these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the internet increase. that's why we just boosted speeds for over 20 million xfinity customers, on us. so you get more of the speed you need for day and night streaming. more speed you need when you're work from homeing. and more speed you need as your family keeps growing.

check in on your current speed through the xfinity app or upgrade to the speed that's right for you today.

haidi: a scoop on alibaba's plan for the global online shopping unit and considering a u.s. i.p.o. for the division.

let's get more on this from our bloomberg asia tech reporter in hong kong. so in your story, how bleak are you talking about in terms of the online shopping unit, the platforms that fall under it? >> yeah. i think compared with alibaba's domestic e-commerce platform as well as -- and it only counts about 7% of alibaba's annual revenue in the last fiscal year. and asia wise, it really varies. like -- morgue morgue priced the unit in a march report at about $29 billion. but while -- the report priced the unit in the same month during a report at about $39 billion. so now i think the situation is really fluid about the valuation side. but in terms of a platform, it includes like lazada, southeast

asia, turkey, andally express which is popular -- aliexpress which is popular in russia and parts of europe and the business market place, alibaba.com. haidi: what are the implications then for the broader business? >> yeah. i think because alibaba announced that it's the plan to split its entire empire into six units in march, and in the statement, that said each individual unit can independently -- fundraising and i.p.o.'s, i think this really is a good signal that some of the units are really making some preparations. but i have to say that the i.p.o. preparation and discussions are in early stage so the situation is really fluid. shery: what are other potential i.p.o.'s?

>> other -- yeah, there are other units that also exploring i.p.o. potential. but they are not in the u.s. market. in the hong con i.p.o. market, i know that -- exploring an i.p.o. and also the -- and also talking with banks for an i.p.o. here in hong kong. shery: joining us from hong kong. let's discuss the outlook for chinese consumers. we just had the golden week holidays with michelle cheng, co-head of the asia consumer research at gold gold. goldman sachs. given what's happened in china what are you expecting to outperform during this holiday season? michelle: yeah. definitely if we look at the data across the board, quite encouraging. looking at the numbers is going by 70% year on year, and it's back to 120% higher than

pre-covid level. and also something more encouraging is for the revenue, for the very first time past the pandemickic impact and back to the 2019 level. on the flip side, we also see the overall retail sales are decent. having a 19% year on year growth and we believe this is on track of the recovery. shery: when we talk about chinese consumers their love of luxury goods. are we seeing that pop higher after the pandemic? michelle: yeah. so i think overall, we did see the trends in chinese consumption market, so top end consumers, the spending power is relatively resilient. so the spending has been pretty solid. and the debate right now is whether spending at home or they are spending abroad. but and we are seeing both the domestic and also the overall

chinese spending on -- we are seeing a decent recovery trend this year. so our team is looking for domestic market luxury increase by 15%. and globally we are still seeing a solid 25% growth this year. haidi: it's that external the outbound spending component that's been a little bit softer. and you saw that reaction in stocks like estee lauder, for example. when do you expect to see a fuller recovery when it comes to outbound spending? or do you think the spending patterns will remain a little bit different post re-opening? michelle: yeah. so if we look at outbound travel, so far, during the holidays, around who 40% of pre-covid level in terms of the international flights. but looking at the visitation to hong kong to macau, it's back to 60% to 70% of the pre-covid level. so i think the path is still there for increasing flight and also more visas being granted.

the trend will be gradually picking up. as a result, by end of the year our team is actually looking for outbound travel visitation number could go back to almost 100% like 90%, 100% of the pre-covid level. and on the other side, spending power is true. i think there's always about -- a lot of debate on the spending power improvement. but at least we are seeing that the over traffic activity is improving. and with better traffic activity improving, we think the spending power gradually will catch up. haidi: the problem with this sort of post-opening rebound it can be temporary, right? the revenge spending and reunion addressing consumer trends tend to fade. do you see this as being a self-sustaining cycle when it comes to the consumer, particularly at a time when we see the property sector, such a big source of household health still not really recovering very strongly? michelle: yeah. indeed. i think the past three years, we see during the holidays and when

there were promotion activities like june 18 like -- consumers advertised for spending is pretty strong. and usually the holiday performance is much better than the off peak season performance. but having said that, if you look at first quarter results, even chinese new year improvement is pretty encouraging and of -- actual chinese new year slowdown but the overall gain in the first quarter we think is on track with our earlier anticipation. so on one side, we do see like pent-up demand and significant during the holiday and all in all from the sequential trend perspective, we see -- still believe on the quarter over quarter perspective, we are seeing gradual improvement throughout the whole year and if employment continues to improve and wage inflation is more stabilized. haidi: how precarious is the positioning of foreign brands in china when we see nationalism,

patriotism is never quite far from the surface? we saw that play out at the auto show yeanlt with b.m.w. and mini cooper. is that something that could potentially change which brands are preferred within china? michelle: this is definitely one of the big days, the crashes we got from investors year to date. and back in 2021, we do see a very significant shift of preference to the local brands. and the national -- also because a lot of local brands now are doing much, much better in terms of their product, in terms of their consumer engagement. but the other reason we think, especially in 2022, the shape to the domestic brands are -- is still sustainable because the spending -- and usually in many categories, local brands are positioned in more value. and when consumers don't have them -- money to spend, they -- they prefer to spend something

with value. so looking ahead, we see these -- will be nor balanced. so consumers that go back to individual brands products and also branding, so these -- so far we actually see in selective sectors, like sportswear, we do see some leading global brands. er in recovering nicely. and niche brands are doing pretty well. but the strong local brands are selectively -- they still have a update decent number even on the high base -- decent number on the high base. haidi: we appreciate your time. and those insights. michelle cheng. co-head of the asia consumer research unit at gold gold. -- at goldman sachs. and how we're favoring and has been such -- faring and has been such a busy week but a quiet end to asia trading. >> a number of key markets are shut including japan and korea and helping that holiday thin trading. but in terms of what we're watching, we are just under an hour now away from the open in china. and this has been also a shorter trading week so we did have

mainland markets coming back online. the c.s.i.300 was flat to end the day. we did see better gains coming through for hong kong and the hsci index which is the china facing one and we had seen that selling off down nearly 2%. as you discussed with the guest, still really trying to read through this golden holiday week data that came stronger numbers but still that contraction that we're seeing in the manufacturing sector and activity there. and so really a lot for investors to pass through. and you add on top of that, this layer of geo political tensions between the u.s. and china and investors are quite nervous approaching this market. if you change now, as i said a number of key stock bourses are shut today but australia is online trading fairly flat in the session. kiwi stocks continuing with their drop. what is interesting, though, is we are seeing sentiment improving in u.s. futures and haidi, that is as we got those fairly strong numbers coming out from apple, particularly for their iphone 14.

haidi: let's get to von von with the first word headlines. vonnie. vonnie: haidi, thank you. applications for u.s. unemployment benefits rose by the most in six weeks. indicating some softening in the labor market. and initial jobless claims rose by 1313,242 last week slightly above the forecast. and continuing gains fell by 38,000 to 1.8 million. that was the biggest drop since july. the monthly jobs report comes out friday. china has ordered state owned enterprises and domestically listed companies to ramp up security checks when hiring accounting firms. the minister of finance says firms should include specific clauses on information security protection in their contracts appointing auditors. the rules underlying being's -- beijing's concerns as tensions linger with the united states. taiwan's intelligence chief has warned that chinese president desoxyn ping to surround himself with lake minded officials increases the risk of making a wrong wrong decision. and recently told lawmakers the island is increasingly exchanging information with the

so-called five -- taiwan has also extended mill tar service and finalized deals for new weapons. and at least 120 claims have been filed against the swiss banking watchdog decision to wipe out about $18 billion worth of credit bonds. it represents 1,300 individual bondholders. they argue that the writedown was an unfair and disproportion international move. -- disproportionate move. and the -- hollywood studios in contract talks with striking writers say they are offered wage increases of almost $97 million. the alliance of motion picture and television producers says that's more man double the amount the writers claim they're being offered. a group representing 11,500 screen writers went on strike on tuesday after negotiations broke down. global news powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. i'm von von.

haidi. haidi: a preview of the annual general meeting taking place today. and the lender is preparing to stare down the biggest shareholder over the persistent calls to break up the business. this is bloomberg.

haidi: how we're faring 45 minutes into the start of cash trading in sydney. muted session across the board as we see korea and japan markets, sri lanka, closed today for holidays. this is a picture and we're off the session lows actually clawing back to those earlier losses. sydney stocks are trading flat at the moment. watching new zealand down by .7%. we're seeing u.s. futures looking a little bit more optimistic. and normally we would be watching a -- one of those apple suppliers given those better-than-expected numbers and they will be one to watch when we get some of these other markets opening in the next hour or so. but of course here in australia, the big focus is really on financials this week. we had a record first half from that. but still that stock fell the most by -- since 2020. yesterday. and we're seeing national australian bank continuing to extend those gains today. to the tune of another .9%. but worth pointing out it is off

those session lows. and in fact we're seeing a.n.z. sparking some gains after trading much lower earlier on. as well as macquarie, and we had really pretty impressive results out there. it has been edging lower. and analysts have really been looking at margin sustainability across these big lenders. and shane elliott telling us that he agrees with ross macewen that the best may be over when it comes to australian bank profitability. shery: haidi, let's turn to hsbc. because ping an's fight for an overhaul at the bank comes to a head later friday. hsbc shareholders gathering to potentially decide whether to spin off the bank's more profitable asian operations. for more let's bring in our chief north asia correspondent in hong kong. what's likely to happen? >> yeah. it's tough to predict other than what people have been telling bloomberg news that it's unlikely that these special

resolutions that have been put forth by individual investors will likely be passed. but you never know. it depends on what kind of fireworks perhaps will erupt in birmingham, england, where the a.g.m. linebacker held later friday. but what we're hearing is that these two special resolutions that have been brought forward by investor ken loy that has the backing of the largest single investor in hsbc, that being ping an at 8%. ping an of course for more than a year now has been quite vocal in supporting a push for a bit of a breakup of hsbc. that is spinning off the asian operations which are -- which provide by far the biggest bulk of revenue as well as earnings. and one could argue as well that perhaps spinning off the asian operations in this time of intense geo political conflict between china and the united states, that that could help ring fence the asian operations from perhaps u.s. sanctions.

but again, the bigger issue is again, about unlocking shareholder value. that's what ping an argues that this would unlock shareholder value. hsbc counters and saying no, no, it won't do that at all. it will be costly and destroy shareholder value. so again, this is one of two of these special resolutions that are being brought forward by the investor ken loy. that's resolution 17. that would create a quarterly review of structural reforms and at the asian operations that would include potential spinoff and restructuring. resolution 18 which he's also put forward is about re-establishing a steady dividend schedule going forward back to pre-pandemic levels. and again, already, in the most recent first quarter results, hsbc is resuming its payout ratio of above 50% for this year and next year. so perhaps the results that why better than expected in the first quarter as well as the

dividend news could help push away or rebuff those efforts to break up. we'll have to see at the a.g.m. today. what is interesting and bloomberg intelligence take on this, whether these resolutions pass or not, this whole episode could unlock kind of an -- a pandora's box of retail activism by individual investors in hong kong. because if you look at a number of companies listed here, they have not, many of them have not returned to pre-pandemic levels of payouts and many people here in hong kong do rely on their stock holdings for income. so it could be an interesting time for retail investors trying to push for better dividend payout. haidi: is there support for these proposals from other major eligible voters? stephen: well, ping an, no. but other key institutional investors from what we understand are not backing it. they are backing hsbc at this time.

i can just look at a couple of key ones. norway sovereign wealth fund, they have pledged to back hsbc today. as well as the california public employees retirement system. and the state board of administration of florida. they've given their -- their support to hsbc. other key investors, and we can look at a pie chart of the shareholder makeup of hsbc, with ping an the biggest one at 8%. you also have blackrock. you have state street and others. blackrock and state street have declined to comment when asked by bloomberg news. institutional shareholder services as well as glass lewis and company, they advise investors on how to vote in these kinds of matters. they -- they have urged hsbc investors to vote against those two particular proposals. we'll see later today in birmingham. haidi: we shall see. stephen engel chief north asia correspondent with a look ahead at the hsbc-a.g.m. could be a contentious one. coming up next how formula wanigan lock its potential in

the chinese market with its first full-time local race. we have the details just ahead. this is bloomberg.

guests check in, then check out their phones - for financial insights from merrill. this gentleman? he's learning how carbon-neutral investments could energize his portfolio. and with advice from their merrill advisor, they've decided that the future is women-led startups. she's got a million followers, but she's following trends in next-gen tech. personalized advice so impressive, your money never stops working for you, with merrill. a bank of america company. haidi: formula one biggest market globally in terms of unique tv viewers is china but

lags in wider popularity far behind basketball or soccer. and bloomberg's looking at how that can change thanks to china's first full-time f1 racer. >> formula one is my life, my work. i like to battle against the world's fastest, 19 other drivers. and it makes me -- nothing makes me happier than driving. reporter: when formula one, in the stands cheering on his idol fernando alonso. now he's competing against after he became china's first full-time f1 racer last year. >> i really started to fall in love with racing my first-ever attempt when i was a kid around 7 years old. we went to the indoor go-cart track and i was very very scared and in the two-seated go-cart my dad was driving. the first time i -- i fell in love with the sport and really wanted to do it every weekend.

after school. as a kid, i grew up having that dream. reporter: china is f1's biggest market globally in terms of unique tv viewers. which reached over 70 million as of 2021. but that hasn't translated into comparable dollars for the franchise. the cancellation of the chinese grand prix for a fourth straight year in 2023 has been another step back. but zhou's eherremans maybe the -- emergence might be the key to turning things around. second season zhou has already attracted sponsorship deals from global brands. >> in -- international sports coming to dhina, for it -- to china, for it to become popular it has to have relevance and nothing builds relevance like having your own superstar and champion to support. and we've seen that in other sports, basketball, with the emergence of yao ming and tennis in li na and how superstars on the global stage have boosted the sport. and now we have we have zhou

granu on formula one and will stimulate commercial interests. hopefully when formula one comes back to china next year, it will start to really reap the rewards and grow the popularity. haidi: bloomberg's charlotte yang there reporting. some of the stocks where watching ahead of markets opening in hong kong in china this friday. session in alibaba will be a key focus. after bloomberg revealed in its scoop that the international online shopping unit is exploring a potential u.s. i.p.o. and saying holders representing approximately 85% of its existing debt have agreed to a restructuring agreement. and of course as we mentioned earlier, we're watching very keenly the outcome of the a.g.m. for hsbc, peng an insurance will be in focus. shareholders are gathering later. for that meeting amid a fierce debate on the spinning off of the bank's more profitable asian operations. we will be watching to see how some of those other eligible shareholders decide to vote. this is a picture across broader

markets. still some head winds at u.s. local bank rout continuing to cause concern as well as our confidence taking a dent from uncertainty over central rate policy and where the fed goes next as well. we are starting to see a little bit of a shift into positive territory. certainly a little bit of positivity when it comes to australian markets as well as some of those australian lenders as well. kiwi stocks, low by .6%. and we are seeing a bit of upside when it comes to u.s. futures. that is it for "daybreak asia." markets on trading in hong kong, shanghai and shenzhen. this is bloomberg.

go. go lights. go big city lights. go spotlights. go stadium lights. emerson software helps clean energy become reliable electricity. go “good night." go boldly. emerson.

bridgett is here. she has no clue that i'm here. she has no clue who's in the helmet. are you ready? -i'm ready! alright. xfinity rewards creates experiences big and small, and once-in-a-lifetime.

>> in beijing and hong kong welcome to