also deal between burkart 's kathleen: you are watching

daybreak asia live from new york, sydney, and hong kong. annabelle: we are counting down to asia's major market opens. >> president biden and house speaker kevin mccarthy voiced confidence in their tentative debt ceiling deal will pass congress averting a historic u.s. default. global markets primed for a relief rally after the debt crisis battered risk sentiment in recent weeks. bloomberg sources say south korea will avoid pushing firms to capitalize on china's ban on u.s. chipmaker micron. annabelle: investors are positioning for a relief rally in markets to start the week. this is the state of play. u.s. futures, the s&p 500 and nasdaq both to the upside. bond futures steadying somewhat. riskier assets had been gaining. more haney -- havens becoming

more subdued when we had headlines around the tentative debt deal. oil to the upside to start the week. let's look at how this will play out across asia today. futures pointing to the upside. we are one hour from opens in tokyo and sydney. seal shut today for a public holiday. the dollar steadying somewhat but broadly it has been lower against more risk sensitive currencies like the aussie one they're gaining .1%. as well, bitcoin and other asset last we have been tracking. more speculative, gaining as much as 2%. really, the question is how long it can last. the u.s. treasury will be looking to replenish its coffers. that means it will be in competition with banks. we could see a funding cost squeeze short-term that could do some of the fed's work for it. amongst all that we still have the inflation gauge from the fed

coming in hotter friday. that makes the next decision by j powell and his colleagues in focus alive one. kathleen: another thing that is very live today, let's hear what president biden had to say in the last hour. president biden: this agreement prevents the worst possible crisis, a default for the first time in our nations history. an ebb economic -- an economic recession, millions of jobs lost. i strongly urged both chambers to pass the agreement. let's move forward on meeting our obligation and building the strongest economy in the history of the world. kathleen: kailey leinz joins us from washington. it doesn't feel like they got to the finish line? kailey: i would not say we are all the way at the finish line because this is still just a tentative deal, a principal agreement.

it's not even yet fully legislative text congress can vote on but it's being turned into that as we speak so the house of representatives and lawmakers can get the legislation and set with it for 42 hours before a vote at -- as early as wednesday. importantly, the deal is step one. it would raise the debt ceiling for two years through 2025, getting us through the next presidential election cycle, raising the borrowing ability of the u.s. treasury to avoid default. also comes restrictions on spending. it caps discretionary spending in 2024, $60 billion lower than current levels. it would also see a 3% decrease in defense spending at a 12% cut in some domestic programs. it includes tightening in work requirements for entitlement programs. not those that are health-related related like medicated bud, snapped, the food assistance program will see some

restrictions including that age range listed -- lifted to 54 for some work requirements. what is not was sweeping work reform. this is just step one, again. it also needs to get through congress by june 5 when treasury secretary janet yellen said the treasury could run out of cash to pay bills. paul: a deadline is looming. it has to be done by june 5. as you said, it still has to clear congress and the senate. what are the challenges in both those houses? because of the nature of the bill being a compromise, kevin mccarthy passed a bill in the house in which republicans were able to get through more significant spending cuts that are actually in this deal. for that reason he immediately lost some lawmakers on the far right at the party including the

house freedom caucus that has seven. -- several dozen members. on the left you do see a stricter work requirements for entitlements included in the deal. that was something several progressive lawmakers made a lot of noise about even prior to the deals release as being a dealbreaker for them, something they would vote no for. you are likely to lose someone either side. that emphasizes how this will have to be passed in the middle. you will likely need some democrats to get on board with republicans to get 218 votes in the house first and then 251 votes in the senate. both speaker mccarthy and president biden today expressed confidence this will ultimately get past. taking time out from a holiday weekend or join us on this important issue. congressman chuck fleshman is a republican representative from tennessee. we are happy to have you here. that's put you on the spot. are you ready to vote yes on the deal assuming that the finalized

legislation looks like pretty much what we have been hearing about all day? representative fleischman: i am. i want to commend speaker mccarthy and his team for a job very well done understanding the dynamics of this. my part in the republican party is a slim majority of the house. the democrats control the white house and senate. under all those circumstances this is a tremendous deal for the american economy, the american people, and hence, the global economy. i have not seen the final text yet, but everything i am seeing come out of this negotiation is something that gives me a source of optimism and thankfulness that we will get past this. we could not have a default in the american economy. we will not have a default in the american economy. it was going to depend on what the final package looks like. under all circumstances, this is a good deal.

kathleen: your colleagues in the freedom caucus had some great influence on the initial proposals put forward by republicans. they wanted much deeper spending cuts. they were also hoping for more oil permitting and things like that. do you expect your colleagues in that group to vote yes? do you think the rest of republican representatives will have enough votes to get this through even if freedom caucus members do not like it? wfg one of the great things about the republican caucus as we have a small group of moderates and friends in the freedom caucus that are further right. i think many members of the freedom caucus will ultimately vote yes. some of them have already signaled that. again, in light of the dynamics. i would like to see greater reforms and greater cuts. but given the reality is the democrats occupy the white house, they have a slim majority

in the senate, this was a herculean task well accomplished by house republicans and speaker mccarthy to get all the concessions and deals he got in this agreement. it's truly incredible. it's a small step putting us on a path to more fiscal responsibility and at the same time, keeping the great american economy robust, strong, and moving forward for not only americans, but the rest of the world. paul: how would you rate speaker mccarthy's handling of the negotiations and the republican caucus in terms of getting there? he had a very rough start to the speakership. is he safe in that job now? rep. fleischmann: yes, i think so. our congress led by speaker mccarthy has been negotiating and working towards this moment for months. unfortunately, president biden and the administration decided to be absent until very late. when one chooses to negotiate

the way president biden did, that put them in a very disadvantageous position and i can get really harmed the pace of negotiations. this chief executive said at first he refused to negotiate. he wanted a clean that ceiling. he wanted to raise taxes. he wanted to do all the things that were not only a port to republicans and independents, but would have been detrimental to the american economy. he realized the dynamics did not favor him. i give president biden thanks for coming to the table and cutting a deal that is ultimately good for all americans, but led by house republicans and speaker mccarthy. paul: here is a suggestion about what might be good for all americans and both parties. president biden was asked this in the press conference. is it time to get rid of the debt ceiling? is that a move would support? rep. fleischmann: getting rid of the debt ceiling, no.

i think the national debt in america that now approaches $32 trillion, it was $14 trillion when i came to congress a little over one decade ago. we have got to have some jet in the system ultimately to deal with that. i would hope that now my colleagues in both parties and in the white house will look at this as an opportunity to get our long-term fiscal house in order. ultimately we will have to look at mandatory spending. all of the work that has been done on the bill has been on the discretionary side of the american budget, roughly 25%-30%. long-term we will have to sit and work through this. but, ultimately i think we need a check on this because the system does work, we are responsible. we will not allow the american economy to get into default. but, we do need fiscal reforms

to get our house in order. it cannot continue this way. kathleen: as for democrats, when you speak to colleagues across the aisle what have you heard from them? even in the last week or so what they would or would not vote for. progressives, some have said no way with work requirements where you would require somebody to find a job, look for a job or get educational training so you can get a job. many have said, no way, nothing that hurts people of lower income. rep. fleischmann: our house has 435 voting members. some districts have elected people on the other side of the aisle, unfortunately, in my view, that are radical left. they want a system that is totally out of bounds. i don't think we will get their support on this. they want to spend, spend, spend, tax, tax, tax, and take our country in a direction that

i think would ultimately hurt if not destroy it. i do not think we will get many far left members supporting this. where i do have a glimmer of hope is there are a group of moderates in the house on the other side of the aisle in the democratic caucus that are up for election every two years, as is the entire house, that i think will look at this and say, we have avoided default. i think there president will be telling them tuesday when he visits with them to vote for the bill and he will be able to garner some support from centrist democrats. but at the far left, probably not. i don't think anyone would be that anything would be good enough for them. but, the bill is so good i think for the american economy because it does not raise taxes. it has reforms and regulations. it has spending caps.

it begins the long, necessary track that the american economy and american government needs towards some kind of fiscal responsibility. $32 trillion in gross is not sustainable. we have to ultimately rein it in. this is a step in the right direction. i think you will see centrist, independent conservatives, far right and a center-right come together and support this bill. paul: congressman chuck fleischmann thanks for joining us. president -- turkish president erdogan secured another five years in power after sunday's runoff vote winning 52% of votes over the opposition candidate with almost all ballots counted. erdogan defied opinion polls in the first round of the election while his reliance on parties captured apartment array majority. congress says a monetary policy adjustment is inevitable.

profits for china's industrial firms fell the first four months of the year underlying cooling demand and deepening factory gate deflation. industrial profits fell 26.8% from january has been a pro from the same time frame in 2022. profits for april were up 23.7% from a year earlier compared with the march decline of about 19%. the u.s. commerce secretary says the u.s. will not tolerate china's ban on microchips. gina romano calls beijing's decision economic coercion using sharp language to describe washington's reaction. china warns companies against buying products from micron this month saying they failed a cybersecurity review. bloomberg learned south korea will not encourage memory chip firms to gain extra market share after china's ban on micron. the government sees beijing's move as an attempt to drive a

wedge between washington and seoul and a south korea sees the u.s. is a key long-term partner for its chips industry. china is the biggest market for south korean company samsung and sk hynix. coming up, we discuss how one avenues company is working to provide safe and affordable labor in space with sho nakan ose. first, we chart the path of the u.s. economy as the white house and republican negotiators break the date ceiling and pass. moody's analytics senior economist katrina ell joins us next. this is bloomberg. ♪

pres. biden: the agreement prevents the worst possible crisis, default for the first time in our nations history. an economic recession. retirement accounts devastated, jobs lost. i strongly urge both chambers to pass a deer agreement. let's move forward meeting obligations and building the strongest economy in the world. i am exploring the idea that we would come at a later date, a year or two from now, decide

whether or not the 14th amendment, how that would actually impact whether or not you need to do the debt limit every year. but that is another day. paul: president joe biden they're speaking about 45 minutes ago on the u.s. debt limit deal. joining us now is katrina ell a senior economist at moody's analytics. the big story of the day is the in principal agreement reached. does removing the threat of self-inflicted default by the u.s. really change the picture in terms of all the other global headwinds we are facing like inflation and weakening growth? katrina: i will take an optimistic stance and say i think it does. i think financial markets and economic watchers more broadly will brisas i have relieved by the fact they have this on a principal agreement likely to come through. i think that the significant global financial market jitters about concern they would not reach an agreement were significant that i think that

now that it looks like the agreement is coming, it looks like a positive development and it eases headwinds about global recession. paul: the deal contains flattened spending. how does it change inflation outlook? katrina: it doesn't change our outlook. we expect we will see u.s. headline and eventually core inflation cooled over the course of this year. it will be gradual. again, that is good news. it means the pressure is not really on the fed it to move more aggressively with tightening. kathleen: speaking of tightening, katrina, how about the rba's inflation numbers coming along looking for a considerably better number. how important will that be in their debate over the next move, if there is one? katrina: good question. our expectation is with headline

inflation in australia as well as core inflation, it will continue to cool through the june quarter. that means the reserve bank of australia does not need to move more, if it all when it comes to hiking rates further. they already delivered a significant amount of tightening. now, our expectation is they will sit back and watch how that significant amount of rate hikes filters through the economy. kathleen: what do you expect on the pmi coming out this week for china? katrina: our expectation is it will return to just above the neutral threshold. so we will see chinese manufacturing pmi at 50.1. that's good news. it shows how the manufacturing picture in china is not roaring back as much as was expected when their zero covid policy was abandoned. we are seeing sort of a glacial

bumpy recovery as a result of weaker demand offshore and bumps domestically as well. paul: chinese cumulative industrial products fell by more than 20% in april. when you look at the data so far this year china seems to keep on coming up short. what of it -- are the chances of a mess on bmis this week? katrina: when china abandoned zero covid there was a reopening euphoria that all of china's problems would dissipate. we are seeing that with the industrial profits data and manufacturing pmi. there are bright spots worth mentioning. manufacturing pmi is traveling in a completely different lane that is much more optimistic. it shows consumers are spending again and is spending much more, particularly on services. paul: kathleen ell thanks for

joining us. get around above the stories in today's edition of daybreak also available on a mobile in the bloomberg anywhere out. customize your settings so you only get news on the industries and assets you care about. this is bloomberg. what do you see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today,

when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today.

♪ paul: let's look at currency markets after the in principal agreements on ideal to avoid u.s. default. the dollar spot index putting on modest gains. the u.s. dollar higher against the japanese yen, back above the 140 level, 14076 now. the australian dollar the best-performing of the g 10 current seats at the moment,

6527 against the greenback. the yuan showing signs of weakness counting down to pmi numbers later in the week with manufacturing pmi expected to remain in construction that's contraction territory. kathleen: a quick look at the latest business-class headlines. china's first locally manufactured passenger jet successfully completed its first commercial flight. china eastern airlines says the flight mu 9191=-flew from shanghai to beijing sunday morning with 128 passengers marking a long journey for a domestic playmaker that started developing the plane in 2008. it's aiming to disrupt the industry dominated boeing and airbus. boeing is working to land a second major deal in saudi arabia this year. u.s. playmaker is in talks to sell at least 150 of 87 37 max

jetliners to start up riyadh air. shopping for about 300 and 400 single i/o jets. talks are complicated. airbus could also claim a portion of the order. next, more on the u.s. debt limit agreement with longtime democratic strategist matt bennett. we find out what he thinks about the deals prospects, looking at a very interesting tech firm from japan making robots to provide labor on things like moon shots. keep it here. 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™.

>> a deal to avoid defaulting on

u.s. debt to raise the debt ceiling is on the table now and we are getting some breaking news, the legislative text of the death of a deal has been released. the debt limit suspended to january 1 of 2025 in this deal pretty much we had heard previous to the release. it doesn't impact binds climate agenda. there is some concern on the climate activist side that some permitting changes could be an issue. the desolate amounts to compromise on the budget the white house has. president biden spoke just about one hour ago. he made that pretty clear that there was no alternative. a compromise had to be done. >> the u.s. debt deal, we do have more from mark cranfield.

the u.s. decided not to give itself a set -- give itself a self-inflicted wound. how long will the relief rally last? >> it was a very strong finish on friday for u.s. futures. especially tech related. mostly driven by the ai companies. there probably isn't too much more to do today especially given it is a holiday on the u.s. and london. a lot of people will be away, the risk-taking appetite will be as great as it is. if there is a slight surprise, it is the dollar-yen. still pretty perky today. some people would be expecting a dollar selloff. we were actually seeing there is not only leverage traders but asset managers, it is pretty rare for them to be on the same side. clearly there is plenty of momentum there. they will be looking on the issuance of treasury bills.

there will be a deluge. there is a huge amount they need to do to make up for the delay so support for the dollar probably maintained for a little bit longer. as of today, we probably won't see a huge activity given the holidays. >> a lot of this was priced in, this debt deal could either revert recession or some say make it worse because we will hit spending. does this kind of suggest that at least for now, the attention is on the fed and the coming u.s. ego numbers to determine what the bond market does? >> absolutely. some people are pricing for june to be back on the table for a rate hike. they can now look more closely at what happened, we have some very strong vc data. that could spring the feds moving in june rather than holding. some people talk about skipping.

they don't do june but they do july. the end of rate hike probably has not happened. there is probably still more to come. then you have to be looking at the rating as well. we have one morning with the long-term outlook for the united states. it does not resolve the long-term issues related to the debt ceiling and they may have more to say about that and what it means for the outlook on the united states. there is plenty in the works. most likely in the short-term, it is what we hear from fed speakers, whether or not the next move will be june or july. ? cranfield there. let's bring in our next guest. the cofounder and executive vice president of public affairs at democratic intake, glad you could join us. this is something that obviously could not wait until tuesday after the memorial day holiday. what is your response from the

democratic side? we heard from chuck, a republican, kevin mccarthy has talks about the deal, he is called a transformational. the president said we did not have any choice, what would you have done differently? are democrats winning in some way? >> without question. this is a very good deal for joe biden. keep in mind, the people currently in charge of the house republican caucus were willing to take -- not because the democrats arvest multiple leaders, we were not willing to do that. i deal had to be cut, nobody knew how bad it was going to be. the bill the house republicans passed on their own was horrific. this deal is not. this deal looked pretty good. not great, not perfect but no deal ever is.

>> what about those who think the work requirements for the snap program where people can get food stamps, that that is going to have the requirements -- the requirements will be unduly harsh on low income people? or people? is that something that could make it harder to get this deal passed, voted on right away? especially going through the house by wednesday? >> i don't think it will slow down the deal. i think the president had to give some things up, among them it seems, some work requirements that really should not be there. the republicans are imposing these things in ways that are not only cruel but dumb. they are counterproductive, they hurt our economy and they hurt very vulnerable people. these are not things any democrat wants to see happen but they are not as horrific as the ones the republicans were talking about that they passed in their own bill.

i think democrats will be able to swallow this. >> we have already talked to one of our other guests about what kevin mccarthy might have in his freedom caucus. not everyone will be happy. how much of a challenge for this be for hakeem jeffries? >> i think there will be some significant challenge to getting the progressive caucus on board. one thing to keep in mind is your viewers are business people and they understand how compromises work. a lot of people in the progressive caucus came to congress in 2018 and have never before been in the minority. until now, nothing the house has voted on in the session of congress has mattered. it is just all show. this really matters. this is the first time any of these members had to swallow a compromise deal and that is going to go down hard for a lot

of them, there are some medicals that are going to say no way. i think mr. jeffries will be able get the ball going. >> is there a bigger challenge coming down the line? is spinning out of control in the u.s.? does a really serious conversation need to be had about how budgets are put together on both sides? >> absolutely. that is a conversation we have been needing to have for a long time. they have been efforts of doing that most markedly in 2011. there was a real effort on the part of the white house to try and come to terms with some of the really difficult long-term problems we face. most important leak around tightening limits. we should not be doing that with the clock ticking toward armageddon as we are facing next week. i think there does need to be that conversation. i hope it will happen but it should not happen in the context of a debt ceiling --

>> you maybe feel a little more optimistic because you're talking about the medical progressives on the one side and the friend caucus on the other type. the extreme voices here. if this bill goes through against the wishes of these two groups, does that mean maybe there is potential for everyone else in congress to get some legislations passed this year or is it going to be too close to the 2024 election and not much is going to happen? >> hopes for is internal but we are not that close the 2024 election. congress works into your cycles and we are only six months into this one. if this is too close, i guess everything is. it is going to be really difficult to do much more than this. as faith building exercise, this might end up being a good one. if moderates on both sides come together around this, they are

going to be back extremes. there could be a bit more to be done. i don't think anyone is wildly optimistic about that. because matt bennett, co-founder, thank you so much for joining us. as the curtain comes down on the debt ceiling drama, let us go for a check of markets. what also we watching besides reaction to this deal? >> that is right, we have been tracking those moves we are seeing in those riskier assets in the rescue part of the market . in terms of what else we are watching, there is still the focus coming through on china. we could see futures indicating for a move to the upside. a pop up nearly 3% but still in terms of the economic data, shows us that deterioration is continuing in the industrial profit numbers came out on saturday and they showed still getting squeezed in china.

we are showing where we are on a cumulative basis, a drop of more than 20%. in terms of what this means, it is just a signal that there is that cooling demand. there is deepening factory get inflation going on. when if what was the any policy support coming through for the pboc? they indicating it is likely to be targeted measures as well. let's change on. that economic backdrop in china has been really weighing on the stocks picture. we are also being hit here in hong kong. budgie of tensions as well caught between the tensions between beijing and washington and investors preferred to put their markets elsewhere. even into others in southeast asia. this showing that the hang seng has now given back 50% of its games from the reopening. >> let's get to the first word headlines now.

starting with the italian prime minister, giorgia meloni says she has yet to make a final decision on the country possible in the china's road and the program. she told a local newspaper that the government is still evaluating the matter. bloomberg earlier reported that she was considering pulling out of the investment pack. european gas prices have plunged so the lowest in two years. up and reverse a surge in inflation. benchmark does futures have fallen for eight straight weeks, the lowest since may of 2021. the gas stockpiles are also above average and might even be felt during the summer ahead of schedule. the indian prime minister has inaugurated a sweeping revamp of the colonial area center of new delhi. about a third of the country's lawmakers including those from the main opposition congress party boycotted the ceremony.

they are calling a vanity project. the barley sector may be the next beneficiary following relationship with beijing. they spent time to remove any percent of the tariffs on their barley exports in the next few weeks. the comments are the latest hikes between australia and its top 20 -- training partner on the mend. those were your first word headlines. >> we will speak to the ceo of this space start up next. we will ask him about his companies were to provide safe labor is based at a fraction of the cost. this is bloomberg. ♪

the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com

fell by five percentage points, the first drop in five months. that is according to a poll by nikkei. we will be watching chip stocks after an agreement to work more closely to develop next generation semiconductors and travel and hospitality shares may move amid a report. the government is considering

issuing digital nomad visas. japanese markets will open at the top of that is after we learned there is a debt ceiling deal on the tail -- table, the hopes are it will be voted on by wednesday. stock futures are up a bit more than what we are seeing. look at that, the nikkei futures are up 2.1%, almost 2.2. that is going to move. there is so much optimism and over the weekend we had the likes of j.p. morgan and goldman talking about how optimistic they are on the japanese stocks. that might even be a bigger mover than the debt ceiling deal at this point. we see the end just a little bit weaker against the u.s. dollar. >> our next guest founded how -- what elon musk and jeff bezos are working on the challenges of getting to space, they have focused on labor costs and aims to reduce them by 100 times. the company just closed at $30 million funding round to accelerate development of remotely controlled robots that

can work in space. joining us now is the founder and ceo. thank you for joining us. tell us a little bit about what your tech is. was sort of things are you designing? what are they intended to do? >> nice to meet you. this is our robotics and start up. he provides affordable labor in space. it reduces operation costs by 100 times. we have conducted this on a space station. we will outsell the iss within this year and we have just business and we plan to expand

our business in the u.s.. >> in terms of that, you have stopped hiring independent and you have started hiring in the united states. can you tell us why that is? >> were. we have two reasons. because of market size, we have been expanding in the japanese space and robotics market. the japanese space market is limited. we have to expand our business to overseas and the u.s. is the biggest base country in the world. we decided to expand our business. we have just entered the u.s. market and now we have a u.s. branch. we have started to hire employees. >> can you tell us what these robots are going to do and build? i don't think most of us realize

that the development of space by so many big companies has to do with a lot more than just going and landing someplace. >> sure. the space industry has been changing rapidly. we decided to bring a balance to robotic technology. that is why we decided to enter the u.s. market. >> your end goal for building testing facilities for robots includes a mockler environment and a vacuum chamber.

your goal is to boost the technological readiness levels of any given technology. is this the core of your business? how important is this to institutions like nasa and others around the world? >> yes. we have conducted a lot here. we have increased our readiness. we are going to reach this within this year. we needed to prove our capability. this would affect nasa's

missions by using this, we have raised -- we will raise us up to seven. >> so fascinating, you have a wonderful website. the founder and ceo, thank you so much. 20 more to come on daybreak asia. this is bloomberg. ♪

>> companies and individuals make use of artificial intelligence or risk losing out. speaking at the national taiwan university in taipei, those who take advantage of ai can boost their production and those who don't will perish. shares reached an all-time high last week after they give a sales forecast that smashed through wall street estimates. >> cathie wood defending her firm's decision to bail on nvidia before stocks surged to a valuation of close to a trillion dollars. the risks are is boom bust cycle and rising competition. she spoke to caroline hyde. quest nvidia surprisingly gets very hard by them because the inventory does up and i would say we are in one of those right

now, they are so spectacular. if we have a combination of recognition by the marketplace, perhaps some of these models don't have to be as large and don't need as much computing power as more companies use more specialized models. you get a reality check. nvidia is just a very powerful company. they are so exquisitely positioned in the space but you are paying for it now. >> having bought it at four dollars, how did it make you feel in your stomach when you saw 180 billion added in one day? request the frustrating yesterday was another one of our ai plays reported a quarter and revealed some ai products and really opened the kimono a little bit more in terms of what it is doing on ai front and it

is going to be one of the most interesting place out there. it was down 10% after getting numbers because it talked about the economy being somewhat variable is the word i think they are using. it was focused on the macros and that is what analysts focused on. now it is having a good day, up about 10%. quest you do not feel any frustration about nvidia? >> of course. we publish our trades at the end of every day you will see we brought you i path in all of our portfolios. a a w, a r kf, ar k q. we use those opportunities when we feel like the market is not seeing something we are. request that was the chief

investment officer and founder, cathie wood. coming up in the next hour, the head of asia research is showing the market rallied too much on ai. we'll have more on mark matthews coming up. and we'll look at how the debt deal will impact the u.s. dollar with the head of excess research. the market opens in sydney and tokyo are next. we just look at the nikkei futures, up more than 2%. maybe we can expect some nikkei fireworks was that market opens. keep it right here, this is bloomberg. ♪

when i was his age, we had to be inside to watch live sports. but with xfinity, we get the fastest mobile service and can stream down the street or around the block! hey, can you be less sister, more car? all right, let's get this over with. switch to xfinity mobile and get the best price for 2 lines of unlimited. just $30 a line per month. i should get paid more for this. you get paid when you win. from xfinity. home of the 10g network.

>> this is daybreak asia.

counting down to asia's major -- major market opens. u.s. stock futures are up. nikkei futures are moving faster, not only the debt ceiling optimism, ideal is in place, some kind words or positive words from goldman on some japanese stocks. >> we are anticipating a pretty kind day overall for it. for these markets here in australia. the markets are already pretty odd despite what is going on. course the question is how long is the relief rally going to be lasting? we will have to focus on two halves of liquidities agrees. the open for japan and australia today, no trading for cash treasuries given the u.s. and the ok has shut today for public holiday.

the focus is it really comes down to negotiating -- negotiators giving a tentative deal. there could be optimism a little bit tempered by janet yellen's warning that cats will run out by june of 2005. it really is that relief rally. they are already trading 1.6% to the upside. we have been seeing u.s. futures. you can see they are pushing higher, getting as much as .7% and the focus as well on the direction of the dollar. it has been declining somewhat against more currencies but against the japanese yen we can still see that strengthening coming and pushing about 140 level, unsurprising that we did have that inflation gauge coming through friday and showing that was hotter. the boj is looking to stick with its easy policy settings.

we have seen speculators ramping up their bearer stance to the highest level in or around the year, in terms of what we are watching in japan, it will be the chip names in particular given the top u.s. and japan, said officials have agreed to work together to develop next-generation chip deterioration. let's switch up now and take a look at the open and australia. korea is shacked today for a public holiday but it is those biblical tensions. what is different and australia is they are looking like they are improving somewhat. we have australia expecting china to remove its 80% tariff on australian bally exports in the next few weeks. another signal for progress is being made. more a reflection on that optimism beyond the debt deal. likewise, we have brent crude to

the upside. >> let's get a bit more on the tangent of a debt ceiling deal. derek, it is a tentative deal. it is a principal deal, it still has to clear both congress and the senate. is there any risk of any potential last-minute spending before the x? request we do have a legislative text now. joe biden has come out and said we are on a full deal, kevin mccarthy has come out and said the same. mitch mcconnell has endorsed it. you're starting to see those lines come forward. there is still that question, i think the big question is the passage that is currently set on the house side for wednesday. i think the house is probably more the issue than the senate.

if he gets through the house, you're probably all clear. there is probably somewhere to do there but i think there is a lot of optimism that this is going to get done. the alternative to this on the republican side is that you would have to jam through something that is a quick and clean increase and i think a lot of them don't want to do that. you do see a large number of people voicing grievances but only grievances become -- be confused with somebody wanting to take this down. one of the things we find with deals of this scale in washington is one of the biggest groups in d.c. is a group i like to call vote no, hope yes. which is people who don't estimate to be recorded as voting for it but do want the thing to go through. you will see a lot of those and it will be on kevin mccarthy who months and months ago said he wanted to extract concessions out of the white house in exchange for the debt limit. it will be on him to make sure he now has the boats.

>> it looks like he has them a pretty good so far. that was derek wallbank. with us now is mark matthews. mark, we have to go on the debt deal. it seems the big voices, the big players are signaling go ahead. we have the president, we have mcconnell. we have mccarthy of course and others. it seems this is a deal that is going to get through, more work to do but the first vote by wednesday in the house. >> i am. i never thought it wouldn't go through. there are these people like gates and green that are all saying default is better than doing a deal with biden. may donald trump will have to make a phone call to those people that if he does, i think even they will agree. i never thought it wasn't going to go through. >> let's put that behind us. let's say you are right, others

are right and it is done, what is the focus for markets now? is it the federal reserve and what happens to bond yields? >> asia is a very bifurcated market. you have basically japan and then everybody else. japan is our version of ai, it is the klondike up there right now and i have to admit, the story makes sense. there are about five different parts that are very compelling in times of everything from warren buffett to cheap prices to corporate reform tissue currency, anti-china play. japan has momentum. i think it has gone up a bit too much. i think it will keep going up. the rest of it has just been left in the dust. i just don't think it has the

kind of stories and play right now. when i said a kind of stories in play, of course i'm talking about ai. if you take away china, what is the ai in china and asia outside of japan? request to your point on ai, i will raise this question on an earlier one this will -- an earlier test as well. at the same time, you see it might have shades of a dot com bubble about it. >> i do. i was just reflecting that the amazing thing is that we already had a sort of dot com bubble over the last couple of years. with the meme stocks and the stay-at-home stocks. what has been really amazing to me is you don't usually see a v-shaped recovery when it crashes. those tech stocks are crashed so

hard this year. they are racing back up. i don't think i've seen anything like that. it is quit amazing, being powered by -- you rightly point out a story which is a good one but we are getting ahead of ourselves and when nvidia is trading at 50 times price to sales, you can look back in history and stocks don't really trade at 50 times for very long, you can also say that is because they have order book which is limitless. everybody is going to want to buy these chips. but i still feel these things have run up too fast and the dot com bubble, perhaps it is premature to say. we have seen this thing can't -- the kind of thing time and time before. a biotech bubble in the 1990,

1991 and the united states. that was a real story. we were starting to use make drugs out of molecules taken from the body as opposed to deals made -- drugs made from plants. the stock has been priced way too high. >> just circling back to japan as well, we have the nikkei now better than 2%, just the first eight minutes or so of trade. that is an 18% so far this year. he did say a moment ago that it felt a little bit overvalued. if there is to be a pullback, where do you see that coming? would you treat that as a buying opportunity? request the only part of the question i can answer is the last one. i would treat it a buying opportunity but what will make it go down? i can't say. the technicals are looking very strong for the japanese market. we actually find from a

technical analysis point of view, it is the strongest market in asia. i think it should come down -- now you just set us up at 2%, i said -- i would guess that you should be down about five. it should be down about seven. i have a feeling it will continue to grind higher between now and the end of the year. >> i have asked because there was a story we just ran in the last couple of days that both goldman and amara ducey further to go. i think that jp morgan is saying there would be more inflows. i want to bring those to the bank of japan. is there any way in which this rally -- not the near term but maybe a longer term rally based on all the things you said could be appended if the bank of japan does decide that inflation is strong enough to go ahead and even started tweak yield curve control? >> really great question.

first of all, i think they picked the most dumbest person they could find. don't expect anything, and his pivot from him. but if it happened, theoretically, that could upset this apple card a little bit but on the other hand as a foreign investor you be getting some very big currency gains. so i don't know. i think it is -- the bank of japan has the potential to disrupt this rally but i also really doubt they're going to do anything like a 100 80 degrees change. quest what about china? we know the people's bank of china is expected by some to do a rrr recut, they have not set up the specific government move yet. we know the reopening isn't as strong as people thought it would be. in terms of investment opportunities, what do you see there?

>> the one that seems to be most popular is buying a state owned enterprises because the government wants to go up. it is actually working. it doesn't seem like a very sound reason to own them. in china, i have to say these big tech stocks, you know the names, tencent and jd and companies like that. they are very inexpensive and they are not going to grow in 20 to 25% year-over-year or more but they still have a lot of good business to do in china and i think in other parts of the world as well. they have lots of cash to deploy. rather than -- if i was going to him china, i think i would just on those internet platforms in china. and just kind of put them away,

i would call it a refrigerator trade. if you're getting this re-rating and technology globally, i think eventually the chinese ones have to participate in that, you come away -- come back in a year and open the fridge, hopefully they will have turned out nice investments. >> thank you so much for joining us. let's take a look at what is moving on markets now. get it over to annabelle in hong kong. quest we are just about 50 minutes into the session after japan and australia. korea shut for a public holiday but we are watching the ship names in particular because these are leading the advance. watching the hardware names that are moving at the most but essentially there are couple of factors at play. firstly, it is the continuation of the ai themes rally that kicked off last week with blockbuster numbers coming through from nvidia. we had mobile technology as well.

the stocks index rising really for percent on friday. the best to do streak since november. we are seeing some of these moves will be higher. the other party is coming down to u.s. and japan, steve's. we understand they have agreed to develop next generation chips and this is part of efforts to maintain this economic regional order given we have been watching this deteriorating relations between washington, beijing and the headache around micron and who is going to be left willing or wanting to fill that supply gap in china. quest let's get to the first word headlines. >> the u.s. will not tolerate the ban on micron chips. they are: the decision economic coercion, using the sharpest language he had describe washington's reaction. china one committed against buying products from micron this month, saying they failed a cybersecurity review, bloomberg

has learned that south korea will not encourage his memory chip firms to gain extra marketshare after china's ban on micron. a source has the government sees the move as an attempt to drive a wedge between washington and seoul. south korea sees the u.s. as a key long-term partner for its chips industry. china is the biggest market for these companies. european gas prices plunged into the lowest in two years, helping reverse a search and inflation and relief to households. benchmark dutch futures have fallen for eight straight weeks and are below 25 euros per megawatt hour, the lowest since may of 2021, the region's stockpiles are above average and may even be filled ahead of schedule. the turkish president has secured another five years in power after sunday's runoff vote. almost all ballots counted.

erdogan had defied opinion polls in the first amount of the election is alliance captured a parliamentary majority. monetary policy now is inevitable. >> still to come, we will have more on what the victory means for turkeys economic outlooks. we discuss the debt ceiling agreement and impact on the dollar with a and z. this is bloomberg. ♪

>> present erdogan is said to withstand his two decade rule and more incentive for investors. the leader has hit new low since the first round on may 14 so let's bring in bloomberg's fx and rates strategist, david finnerty. how would you interpret what investors are saying through their positions on the lira? >> investors will be saying that is not positive if he continues those policies. given he has won the election, will you continue these? the government has a few problems at the moment, one is high inflation.

even more ruggedly is the deficit. that may limit how much you can do. there were not viewed as market positive. that would not be good for the lira. would his hand before stupid? would he need to change these policies? the market will be looking for who is in this cabinet he does have they can in terms of policy himself. the sentiment will be like what are his policies moving forward? will he change them? if he decides not to, that will be generally viewed as not good for the lira. >> as you were talking, i was trying to work out in the turkish lira starts to trade today. maybe you can help us with that. it does, what sort of movement are we anticipating? >> in asia, we will start to see

it, having said that, the liquidity could normally be very thin indeed. it is really only when turkey itself starts trading, the knee-jerk reaction may well be seeing the turkish lira down because until we know there will be a change of policy, you must assume the status quo. so risks would be that. they may try to push it lower. moving forward, the focus will be on if there are policy changes in the upcoming days. the markets have not been viewed as very positive, very market friendly. even if they agree with his unorthodox poverty -- policies, we are still looking at inflation where the core headline is around 45%. very high indeed, very elevated. we'll see what the markets want to do. >> bloomberg's fx and rates strategist, china cap following

-- kept falling. our greater china senior executive editor joins us now for more. this is just the latest in a bit of a stream of disappointing numbers we have had out of china. what is weighing on factory gate? >> i think the big issue is demand. there has not been the amount of demand economists. there would be at this point in china after the reopening. the first four months of this year, we continued to see industrial profits continuing to drop year on year by 20%. is actually slight better than the first quarter, would have fell by 21% and in the month of april, saw an increase under 4% versus in march where we had a decline of more than 90% but that is way worse than people expected. at this time last year, we were in the middle of a bunch of lockdowns in china and now we would have expected a big jump

and as a result year on year, that is what has been disappointing the market. >> there was an expectation that the pmi for china -- purchasing measures index for the manufacturing side might do a little bit better, it might pop a little bit above 50. that separates growth from contraction. what is that going to mean for the pboc? the people's bank of china? the people are waiting for some kind of step toward more stimulus. they seem to hit at it, open the door but not white walk-through. >> i think there are a bunch of issues. pmi has been weak the last couple of months. it might strengthen over the 50 into expansion for the month of may. we will find out very soon. that will help the pboc. that is also having to consider the currency with china's growth being weaker than expected and

the united states getting past the debt ceiling issue. the pboc has to think about the listening impact it will have. request that was bloomberg's john doe. you can get around that but here are the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers go to bloomberg mobile and the bloomberg anywhere at. this is bloomberg.

>> a quick check of the latest business flash headlines.

china's first locally manufactured passenger jet. flights flew from shanghai on sunday morning with 128 passengers. this marks a long journey for the domestic plane maker. it is, to disrupt the industry dominated by boeing and airbus. boeing is said to be working on a second major go. sources say the united states plane maker is in talks to sell at least 150 of its 737 max jetliners. they are shopping for about 300 to 400 single aisle jets. talks are complicated. they could claim a portion of the order here. cap has defended her firm's decision to bail on nvidia before the chipmaker shares surged 160%. the flaps -- flagship missed out

on most of the rally. the risk of shortages in the chip cycle and growing competition in the ai space. request nvidia has become a check the box stock. that is why the valuation is where it is. but we are looking for those plays that have not only the vision from the management team point of view and broad distribution but also proprietary data and ai expertise. request point want to come on daybreak asia, stay with us, this is bloomberg.

>> the bear market is continuing. this is what bear markets do.

they are designed to for you, confuse you, make you do things you don't want to do, change things at them on time, we think the fundamental case supports where stocks are trading today, whether it is at the index level or the single stock level and the second half is going to be a bit choppy or and probably downward in the index. >> that was morgan stanley's chief equity strategist, michael was in. playing into that increasing debate we are seeing between bulls and the bears on wall street the direction of u.s. stocks but today it is very much a risk on rally given that we do have at least a tentative debt deal in place. that is sent to be agreed or debated on in the coming week. in terms of how we are watching the market reaction to that, it really the focus in japan today, not only are we seeing some sort of optimism coming out of that but there was also that rally extending from the ai bounce that kickstarter with nvidia

blockbuster numbers as well. this is another name to put out solid results. we are seeing chipmakers. particularly the hardware sector leading the advance in today's trading. but broadly it is looking risk on. we see the topics getting around 1% at this point in the session. it has been rising nearly 5% so far. let's change it up. something is playing into it is the moves we are seeing in the japanese yen. the currency really has been weakening. at the same time, we are seeing leverage funds building their short positions on the japanese yen. we are now north of 50,000 contracts. the bet is the fed is going to be hiking rates as soon as the next meeting, 25 basis points. the boj will be sticking with its easy policy. we have seen the dollar-yen rising and the japanese yen weakening.

this is on the we can help with some of the bigger exporters. >> lots of things on the table to discuss with our next guest. saying if the u.s. debt deal is reached before the x date, there is still scope or short-term dollar appreciation. what is your reaction to this? it looks like it could come to a vote in the house by wednesday. but will that mean for the dollar? >> i think we have already been seeing rally in the dollar. i get optimism around this debt ceiling. it has driven the dollar higher. we saw the dollar buys around 8% in 2011. we saw a debt ceiling reset.

it was difficult to draw parallels. this time it is different. we have interest rates going higher. tighter liquidity environments from restocking the cj on the back of a reset of some sort. that would push the dollar a little higher. >> give us a little bit more detail on the tga and what is going on. we know liquidity has been a big issue and raise have been through the ceiling practically. and there is never a shortage of liquidity and there will be more issue is necessary. what is the most important thing here? how will it affect the dollar and the race market? >> i think for punishing the tga may result in higher liquidity, this would drain liquidity

princi builds and level of bank results. the tga rebuilt will take some time. looking at history, the tga level around 600 million on average. that is the resetting amount. that would take some time to rebuild. a decent portion of this will be absolved by many market funds that have invested in this. as they swap out funds, you would assume not white a drain there. the debt ceiling resolution may shade your risk assets as well. the positivist sentiment surely has defaulted for the dollar. we expect that to continue. in the short-term, we expect a

little bit of flattening as well. request we do have another macro for the u.s. dollar on the horizon. that is the next fed meeting and a couple weeks time. there seems to be a lot of rhetoric around the chances of a pause or skip, both of those things suggest the fed might be willing to hit play again sometime in the future. with that in mind, where are we headed for the greenback? >> a few things. i think one thing is the federal reserve will5 is points engine. we have had the data that came out of spending as well, talking to us around the fact of consumption in the u.s. still remains strong. that drives the way for fed rates, having said that, now, if we look at the debt ceiling a little out of the way, the fed focusing on easy ways will be a little bit easier for them. they won't be this volatility in

between. for the dollar, having said that, in the short-term we see a little bit of dollar upside. on the longer-term basis, the funding could be around the u.s., that does not change. we think the u.s. dollar will weaken for streaky reasons. one being the fact it has been overvalued. we also think that the u.s. started raising rates well ahead of the boe and ecb they would be the first a pause we would expect them to raise at least two more times going forward and information -- inflation broadly is moderating. when you look at other countries, while it is part of that endeavor, it looks like the u.k. and europe have a little bit more distance to cover in terms of moderating inflation. >> obviously a lot of policy

differences between the fed and the boj as well. as the u.s. dollar eases, where do you see the end stemming? >> we think for the end of the year, we should see the end strengthening, clearly in the short-term, the biggest volatility we have seen is in the race market. this has widened the rate differential between the u.s. and japan, reluctant to this 140 level we are seeing right now. once the market stabilizes, we have the debt ceiling behind us, we do think this differential may narrow. we also expect the y cc to be adjusted. sometime toward the end of the year. that should drive us toward a slightly stronger yen that we see today. last year we had over 100 -- 150 on the dollar. at that time, japan was facing

negative trade stock. much of that has been reduced. effectively, it doesn't look like this 140 should be here for a long time. >> the stock rally in the japanese market, up 18% year-over-year, just heard from a guest who thinks it has runs around. in terms of the boj, do you think this has an impact on their policy thinking g things are looking up, maybe we can start normalizing and tweaking y cc? and that's the kind of thing that could push the yen up even higher? >> they have already taken the first step in adjusting. that is why we think there is room for more change there. that is something we can question. the governor -- the past and

current governor have come up to say that there watching the wage inflation now. wage inflation is not white picking up as they would like in japan and until that picks up to a level more concerning for them is only when i think they will be pushed to a whole lot of negative rate policy. request that was the head of fx research at anz. let's get it check of the latest headlines now. china's industrial firms kept falling in the first four months of the year, undermining cooling demand in factory gate deflation. industrial profits fell 20.6% on the january to april time from the same time in 2022. however, profits for april were up 3.7% from a year earlier compared with march's decline of about 19%. jon ferro says the sector may be the next beneficiary of the foreign relationship with beijing. they expect china to remove 80%

of his tariffs over the next few weeks. according to the latest science, ties between australia and its top training partner are on the mend. beijing lifted its ban on australian tender. the indian prime minister has inaugurated -- about a third of the country's federal lawmakers including those from the opposition congress party what kind of the ceremony. criticisms linger that the building is a vanity project. giorgia meloni says she has yet to make a decision on the role in china's program here. the government still evaluating the matter. it is still too early to tell. bloomberg reported that she was considering pulling out of the investment back. those were your first word headlines. >> next, we are in an artificial

intelligence boom and how it is fueling record inflows into chipmaker etf's. this is bloomberg. ♪

>> the nvidia see you is

expected to give a special key-- keynote speech. the company is poised to become the biggest chip maker to join the $1 trillion club after shares surged 24% following a forecast. for details, we are joined by peter elstrom. what was his message to students? >> he really is the man of the moment, the ceo of nvidia. they give this blowout forecast last week which led to a rally not just an desk in nvidia shares but the whole area related sector so everyone is looking to hear what he has to say. as you mentioned, he went to national taiwan university and addressed students for the commencement address. told him it's critical to look at the future and familiarize

themselves with artificial intelligence where they could risk losing out on what is ahead of that. he said it is important even if you are not going to specialize in ai and technology to understand what the capabilities are because it is going to affect pre-much every business out there at this time. openai, chatgpt, this kind of frenzy and ai. some compared to steve jobs it was commencement address two years back. he talked about the lessons he has learned in building this for the past 30 years including three near-death experience is for the company. he also sent a message that it is important to be determined to be able to work through some of the problems that you will inevitably face. >> that is pretty inspiring. what is he doing in taiwan before giving this very important speech?

>> he is the prodigal son? he came back to give the commencement speech but he is also appearing at the computex tradeshow. he will give a keynote a little bit later on. inevitably he will talk about ai. we don't have all the details exactly of what he is going to talk about. three hours from now, he will carried out. >> our executive editor for asia technology joining us from tokyo. chipmaker's emerging as the big winners and the optimism around artificial intelligence. bloomberg intelligence as many is expected to continue flowing into a i made funds for years to come. for more, let's go to rebecca. rebecca, is the ai hype and praise real? can we trust it? >> goldman sachs expected the official intelligence will bring in roughly 7 trillion of market

growth in the next decade. so since she -- chatgpt, we've seen a surge in this news. this is a six tenfold. if we look at the growth in terms of how many users entered chatgpt, in less than two months, they have reached 100 million users and so to put that into perspective, over took six years, spotify took four years and instagram took two years so there is a huge interest and ai. i think what is interesting about this is normally knows what ai is going to become in the next five or 10 years. it will affect everything from health care to financial sector to even the retail space so there is tremendous potential for ai and everyone is interested in talking about her right now. >> a lot of potential for etf's and ai as well. what is happening in that space? >> in the etf space, there are

currently $13 billion worth of assets in the ai robotics and automation space, only 60 etf's. we expect that by 2030, this number will increase three times that we expect roughly 35 billion by 23 and we expect that to have more than 150 etf's. it will be a huge growth. so what type of ai etf's are there? when you put all this information in, it sounds like a very enticing possibility to invest in. >> there are really two types of ai etf's, the first one art etf's that struck ai companies. the classic example would be arc. they track ai etf's. most recently we have had tech etf launch in may earlier this month. that is the first group of etf, the second group really etf's that utilize artificial intelligence so for instance, in korea, we have ai powered etf's, ones that have some sort of

quantitative strategies or artificial intelligence. utilize -- in the u.s., there is ai eq which is powered by the ibm supercomputer so they are analyzing data all day long, 20 47 and they claim they can do the same work as a thousand research analysts. we have found is between these two groups, the etf's that track ai companies tend to perform better. if they have a return of 20% versus the etf's that use ai only returned 3% this year. between these two groups, the etf's that track and companies are also a lot cheaper. on average, they are 54 basis points versus 75. there are two types of etf's. the performances on the fees are drastically different. price a lot of enthusiasm around the space. is this something investor should be cautious about as well? >> what they need to be cautious about is foam up.

since the earnings last week, we have seen a huge interest in boom into the space. semiconductors on thursday had the most inflows they had ever seen. the ishares semiconductor got 800 million worth of inflows. this is the most we have ever seen since 2001. if we look at the overall tech sectors, we have seen billions of dollars worth of inflows. between the leverage and all of them, there is even tech nvidia. they had huge amount of info. every investor is looking at the space. there are so many etf's that track tech and automation and ai. you really need to be careful which you are buying into. as we mentioned before, not all etf's perform the same and have the same return. if you look at once that track nvidia and microsoft and amazon, those tend to do better than the etf's that utilize ai.

when you look at this, you really need to do your due diligence and really look into the right etf. and not change the way. everyone is just pouring millions of dollars into etf's. you will need to be cautious about what you are investing into. >> let's take a quick look at some of the asian benchmarks. you can look at the nikkei up 1.5% just before the opening. the futures are pointing to 2.1 percent increase but still, putting onto some gains. the story even as we look at the s&p, us really will look at the new zealand stocks. it is the debt ceiling agreement. it is on the table, it is moving to about potentially this week, that is creating market opportunities in the start of the u.s. but the nikkei has another story entirely. it has goldman saying there is room to run. there is one to go. a lot of positivity has not been

stopped yet, at least in japanese stocks. be sure to tune into bloomberg radio to hear more from the big newsmakers of the night and get in-depth analysis from the daybreak team. broadcasting live from our studio in hong kong, you can listen via the app, radio plus or bloombergradio.com. plenty more ahead. stay with us. ♪ you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart!

>> china's decision to bar mike ross energy chips has escalated tensions with the u.s. and it is fueling worries over what other technology firms aging may target next. the china markets reporter joins us for more. do investors expect china to bend more companies after micron? >> we talked to a lot of investors. the consensus we are getting is china although it very much may want to, it is unlikely for china to been more u.s. firms throughout the supply chain in the chip industry. that is because this semiconductor industry is so global that no country is able to decouple in that sense. especially to decouple u.s. firms which has a dominant

market share brought supply chain. especially in the most advanced once, it is unlikely for china to do so. >> what about subsectors? and the likelihood of what that tells us when it comes to china banning u.s. firms? >> we come to subsectors, i guess the most likely ones are the logic chips. that includes cpu manufacturers like intel, amd. those chips are widely used in the most advanced equipments. that is unlikely for china to find replacements. those were apart from the u.s.. also for gpu makers for example. gpu is used in those ai computations very widely. qualcomm and the u.s. is one of the biggest producers in this area and also the most advanced

manufacturer. so to replace qualcomm, china may need to find supply in a timely's comedy called mediatech but picking a taiwanese company as a replacement is not a very practical choice for the chinese government. in the sense it is quit unlikely for china to do so. >> thank you so much for the very cumber has a discussion. let's look at u.s. futures as we go to break ahead of the china open. you can see here that we've had the s&p futures at about a third of a percent year. a big rally occurred in u.s. stocks went optimism over the deal that is on the table now, the debt ceiling deal really started to rise. that is it from daybreak asia. this is bloomberg. ♪ ♪ e your afternoon cup with 5-hour energy. it's perfect for when you're feeling coffeed-out.

coffee in the morning... 5-hour energy after. your stomach will thank you. discover 5-hour energy. ♪♪

♪