>> good morning and welcome to

direct australia. i am paul allen incident. >> we are cutting down to asia's major market opens. the top stories this hour. this ahead of friday's keenly watched jobs report. he doubled down on his call to skip a rate hike in this month's meeting. >> goldman sachs flags at 25% drop as they brace for a tougher environment. the bank confirming plans for a new round of job cuts. take a look at how u.s. futures are coming online. we are seeing a little bit of upside early in the asian session. the s&p 500 back about that 4200 level. retail traders also writing the

ai wave. tech giants bongos continuing to fall. yields fallen ahead of that friday's job report. the dollar also fell after data showed sluggishness. activity numbers shrinking. we have wti on all of that risk assessment. let's bring in our cross asset reporter. let's start with market moves. was it all about tech nai again? >> another day of that nasdaq 100 outperformance. it is not just today. in the last three months we had the nasdaq 100 outperforming the russell 2000 small caps by 20

percentage points. that was the biggest outperformance since 2000. it is unclear what is going to stop this. that could stop the rally. it is really uncleared. we are heading into this report with the vix at its lowest since november of 2021. stocks are pretty calm heading into tomorrow. >> we heard from patrick today. repeating his call for a fed pause on rate hikes. >> this is the second day in a row the philadelphia reserve bank has said this.

yesterday he was echoed by philip jefferson. chris we should not be reacting. we hope to stop one meeting and see how it goes. >> bill dudley who is the former fed president, he was third in line. he says jobs and wages are going

to be very important. we are expecting payrolls to be at down from 253,000. if they beat the estimate, it is another sign economists are expecting a slowdown in the jobs we are seeing. unemployment is expected to be a 3.5 versus 3.4. on the month, up 0.3. showing us what the average hourly earnings have been doing. wages have stayed up around 4% around here. you would see this is still more than double what they were averaging back into thousand 10, back in 2015 before the pandemic at that time.

bloomberg economics is saying very interestingly that jay powell is going to see this jobs report but he is focused on the downside risk right now. tighten credit conditions. one of the hawks at the fed said the fed is closer to restrictive territory. continued vigilance is still required. >> it seems goldman sachs is considering the potential downside. >> they are clearly hunkering down. the trading business is tracking 25% lower. relative to every other major one up.

they were expecting going to hold onto the gains they saw. the fact that they are saying the business is going to see a slowdown is concerning for them. they also pointed out that the investment banking business is sluggish. capital markets activity has not picked up the pace that they would like. their clients are exhibiting a risk off tour. the company ceos are feeling pretty cautious. if there is a little bit of a pause in conservative behavior, that is going to affect how goldman sachs performs. cressy mentioned goldman down but the other banking stocks doing ok. these problems are not unique to goldman are they?

>> absolutely. bank of america is a little bit different. it did not have the outsized gain here. generally, it is clear when you listen to the executives that trading activity is not going gung ho this quarter. investment banking has not picked up. andy saperstein said investment banking has been in a sustained stop. >> ponte of training when it comes to ai related stocks. what are we seeing in terms of retail traders now getting in? >> the retail traders are now getting into the ai frenzy. retail traders have poured over $285 billion into nvidia in just

the past five days. now they are just getting into c3 ai, marvel which is a semiconductor company and it is interesting, the strategists said with nvidia, some private taken from the retail will really make a difference in invidious stock. but the market cap is a fraction of nvidia. if the retail trade starts to take some profits and pull off, we could see the stock start to fall a little bit. >> let's get it back to annabelle for a look at markets. what are you watching? >> i think we just need to start with one of the biggest moves in the u.s. session. that was the pullback in the dollar.

it really has been down to the changing expectation around the fed. without we could see hike as soon as june but we will be hearing from fed speakers saying we could be set pause. we are talking about that renewed dovish tilt. firstly, it is a positive for commodities. that also has a consequence for commodity linked assets like the aussie dollar. you can see we are pushing back to that 66% level dollar weakness. the flipside is yen strength. we are seeing that move away. we were just at 140 a few days ago. we do see sydney futures pointing higher. that ai theme still has a ways to go. this chart here really shows the outperformance of some markets. mainly the ones in north asia.

they do have a high exposure. korea, taiwan, japan, all of those trading at highs. the index has been resilient. you can see the line in blue. the question really is the performance of chinese assets at least in the pmi data we had in the session prior. cressy was really easy let's not get over to vonnie quinn with the first word headlines. >> enters as grandly to agree on a plan that would see the u.s. debt limit deal passed before june 5. lawmakers from both parties have been meeting to discuss which amendments would be discussed.

that could push a vote past the deadline. shane has communist party chief has asked elon musk to expand his business in the city were tesla already runs a large factory. this is his first as the pandemic began. along with a midnight appearance at tesla's shanghai factory, musk met with business officials including the foreign minister. the republican senator calling on the department of justice to investigate whether the to cut -- tiktok ceo made false statements to congress about its data privacy practices. tiktok says the company is confident and the accuracy of his testimony. the white house says president by was not injured when he fell on stage after delivering remarks at the u.s. air force academy commencement. officials say the 80 road tripped on a sandbag after

handing it over. already the nation's oldest president, he has faced questions about his health as he embarks on a second run for office. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. class apples had to be working on plans to expand its retail chain and open 50 new stores across the asia-pacific. details coming up later this hour. but first, joining us ahead of the u.s. jobs report. this is bloomberg. ♪

>> the labor market is the key. the labor market and wages are going to be key drivers. >> william dudley there. traders in the u.s. are gearing up for the monthly jobs report on friday. let's discuss this more with

alisa. thank you for joining us. i just want to look at some of the employment data we have so far. jobless claims pretty much flatlining as the fed began. the jobs report showing the labor market still tied. how does the case for a positive to you? >> great to be here. thank you for having me. as you know, we are bottom of investors and the macro is very difficult to know what will happen in the future. the fed will raise rates or cut rates or hold weights -- hold rates. none of this really impactful or we are strategically positioned. we are long-term investors, owners and businesses.

because you don't know the future, you believed to have a big margin of safety and those big discounts. right now, we are finding a couple of areas including emerging markets. i know what you like is commodity producing companies. i am wondering how you square that strategy with the economic growth we are seeing out of china at the moment. >> we are 100% bottom up. normally you have the macro forces as a headwind. today, we have macro forces. very large debt. very large deficits. from this, we can agree that

both parties don't want to touch government spending. it is very good for inflation. it is also very good for bill hasn't companies. and partly these companies are so unloved that you don't even need to have inflation. gold-mining is a great example of this. the gold price is flat from 2011. they are trading below liquidation value. should there be inflation or people who want to have -- invest more in golden and have this as a safe haven? these companies will definitely benefit from that. we also own uranium and natural gas and every as well. gold is really where we see the highest here. quick some of those calls are what you call some of those obscure markets, emerging and

frontier markets. tell us a little bit about what you like there. >> absolutely. one half is in real assets. telecom companies, banks, utilities and emerging-market so you are buying these u.s. counterparts for have to a third of the price he would find in the u.s.. they are growing very quickly. we are buying the verizon of south korea for six times earnings. these are the sorts of value opportunities you can find should you be willing to look different from the index. outside of one sector, the markets are really concentrated.

they are much more compelling the way you can find. quickly kospi has been flirting with bull market territory. course we know the large korean conglomerates do have some issues with corporate governance , with very difficult structures. do you buy into those names? >> absolutely. this is where investing can really have an advantage. the market has a lot of companies. we can identify which risks we are being overpaid to take. conglomerates are very difficult to analyze.

-- you're getting all of this. people tend to say it is complex, stay away. you can get a day going in this edition of daybreak. terminal subscribers go to dayb . this is bloomberg. ♪ ♪

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>> here is a quick check of the latest business flash headlines. bloomberg has learned that apple is learning to push deeper into china and india as part of its retail expansion. sources say it is -- apple is seeking to revitalize his 22-year-old retail operation which recently faced customer service problems. dell reported revenue that beat analyst estimates as they did not fall as sharply as anticipated. recovery may take a bit longer than expected. demand for gear that powers ai is helping fuel sales but not enough to offset the broader post-pandemic slowdown.

the chip revenue could grow to $1 billion. broadcom sees third-quarter revenue. they are raise about 380 million dollars to fund acquisitions in the u.s.. they have been seeking to diversify the business and turn them into a global music powerhouse. you can watch episode one, it focuses on tech and ambitions. the international institute for strategic studies with our very

own haslinda amin. >> it is about diversifying. quick the semiconductor has been such an important part of our life. >> you have to look at the whole ecosystem and the supply chain. >>, think there is anything here. as school has prevailed in all of this. >> you can tune in.

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>> you are watching daybreak australia. i am vonnie quinn with the first word headlines.

the u.s. central bank should skip raising rates. the fed should not be reacting. intimidated will determine whether additional tightening is needed. along this path a project we will see modest growth this year. real gdp coming in a bit below 1%. >> they asked them to provide guidance on how this might work. the block convened earlier discuss how it could challenge the united states. the use of alternative currencies is among prominent talking points. the pentagon will retain

starling services in ukraine. it is buying satellite terminals. all of this after russia's invasion. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. as we wait for the u.s. debt limit deal to advance in the senate, the treasury castro has bounced back from a 2017 low. economists say most the deal passes, the treasury will likely quickly refill with bond issuance. let's discuss the broader implications of a debt deal with and i. it is great to have you with us. we are just looking at trying to avoid default on june 5 but there are implications to what happens next with a lot of debt

issuance coming from the treasury. tell us a little bit about the historical implications we have seen with the debt ceiling having been raised to of times in the past. >> thank you so much for having me on the program. indeed, this is not a unique occurrence. the debt ceiling has been raised over 90 times since the time it was situated. this is not the first time there was such heated negotiations around raising the debt ceiling. there have even been studies done in academic papers about the impasse over the debt ceiling and treasury yields. academic studies have shown that treasury yields go up around the time the debt ceiling is being negotiated. >> how big of an economic impact do you expect from all the machinations around a debt deal?

economists in bloomberg have said the deal increases the headwinds to the near term u.s. outlook but does not necessarily do much when it comes to the fiscal challenges long-term. >> i agree with that assessment. the debt deal that recently passed the house has five major components and altogether, the estimated savings from the debt deal are estimated to be 1.5 trillion. right now, the shortfall of the deficit is estimated to be about 2 trillion. it is not really a huge effect. if you look at the components of this deal, i don't think they do much to increase the government receipts or to boost the gdp growth. i agree it just does not have a big effect.

that kind of begs the question, doesn't it. those concessions that were won by republicans, was it worth all the pain and drama of bringing the world's biggest economy to the brink of default? >> i agree. it happens almost every time. almost every time we reach the debt ceiling, the markets panic. a lot of speculation in the u.s. government it has never really happened in the past. we just did not now, it other speculations, nobody could say anything definitive. it creates a great deal of uncertainty. it is damaging for the markets. during this time, the yields go up. that increases the cost of the

taxpayers. >> we were speaking earlier to jim clyburn. he is a democratic congressman. let's have a listen to what he had to say. >> we do not need to have this tension, we should get rid of it. we should start working on eliminating this debt ceiling. we are seeing what we can do. all kinds of gimmicks we will be using to get around these caps. this debt limit makes no sense at all. >> there is only one other country in the world that has a debt ceiling. getting rid of it would benefit

both parties. >> i agree with that. the debt ceiling corrected after all the spending decisions have already been made. it should not be part of the debt ceiling. there is this impasse. it creates uncertainty in the market. it is really not good for the markets. >> what about the long-term implications of growing public debt? >> they should be addressed separately. the u.s. has really benefited from u.s. treasury bonds being viewed as a safe instrument by the entire world.

that is the instrument held by the public. one third is held by foreigners. every time, there was the perception that this is a safe instrument perhaps erodes. we might have a situation that the credit rating will drop. that will have huge implications that interest rates will rise. >> could have you with us. the senior fellow with implications of this debt deal trying to get past the senate. traders actually looking at past products already. avenue valley let's bring in annabelle talking about looking

past the issues right now. the tech rally has restarted. they are helping at least one well-known on hedge fund. >> that is right. this is considered one of the most successful tech centric hedge funds on wall street. you can see the likes of meta and nvidia. we have been tracking these offerings around ai. this also shows the gains or losses. that has been helping. we now understand over the course of may, it posted gains of 6%. that takes its year-to-date gains to over 6%. we have been hearing quit a bit from the founder. this is felipe a.

he has really reflected on holdings -- what they mean. he says that hands down, ai is one of the most exciting investment trends he has seen over the course of his career. >> and bit it is a huge beneficiary. traders are looking for the next big thing. what is it? >> essentially, there looking beyond the likes of nvidia and turning to other stocks instead. he says the situation now is that phono is starting to kick in. they are trying to look for the smaller names. institutional events have been tracking that the market breath. it is those big names that have been the beginners. palantir has been one of the top

gainers from this ai frenzy. we spoke exquisitely with the ceo. >> usually we wait to go out and find people i know we have customers, especially in the u.s. calling is every day. >> he the demand is huge. >> we have had a number of these calls. your offering things so powerful that i'm not even sure we should sell this to some of our clients. kueng still to come, apple planning to take a bigger bite out of india and china. this is bloomberg. ♪

>> the partner here says his firm was about $13 billion in stocks and plans to buy more in comes is when the early. he says he expects the india stock market to outperform china over the next five years.

this is msci india. i don't see why five years out, india's market will outperform the chinese markets. this is a regulation miss. the regulation miss and a lot of these privately owned companies. we have very little chinese privately owned company exposure right now. " we have significant exposure in china until a few years ago.

when the chinese authorities intervened, i have some sympathy. these are monopolistic companies. i don't like it is a shareholder but i do understand why they are doing this. >> does the china playbook have to be overhauled? especially if you're thinking that growth will disappoint as it has since the reopening from covid zero? >> i never understood why they did this. reopening is last a few months. i think the playbook and china has shifted. you are going to be slower growth. that is perfectly normal for that -- an economy of that size and scale. there is a heavy incentive position. there has been an alignment. we like the as always in china.

we don't necessarily like the privately owned companies. i think playbook is very different. bloomberg has learned that apple is working on plans to expand and revitalize is retail chain. sources the company aims to push deeper into china and india well overall in established locations in the u.s. and europe. mark broke the story and joins us now for more details. tell us a bit more about this plan. >> thank you for having me. this is an extensive plan that apple has through the second half of 2023, deep into 2027. to very much expand its retail operations globally. a particular focus on asia. what you will see in particular are several new stores in china. there is a new store, the flagship plus stores, here at

the temple. multiple stores in shanghai. several in the and remodels in japan. quit a significant upgrade in the asia-pacific. >> is this a reflection of growth and consumption?

i think apple is usually successful. this is in the mainland parts. clearly they are well-positioned right now. we think we will see much more growth there. what is apples what is the expected revenue as a result? >> it is unclear what they are spending. it typically costs upwards of 10-50,000,000 dollars depending on what kind of store they are putting together. if it is a gigantic new store, it can go up 45 million in terms

of construction and development. the smallest was generate on average around 40 million. they are lower tier outdoor stores. once you start getting into these ranges, you're talking about 75 million to 100 million per year. clearly there is a big roi on these developments. >> how competitive are these? i have lived in korea, japan and hong kong. i know the local population is very used to their own search engines. the way you type is very different. there is a lot more. japan is an area where i was quit a bit behind.

they have very low market share. this means they both anticipate getting into the ecosystem. clearly this follows the retail approach. these openings, the amount of openings are in line. still, this is a nice expansion. they don't know if they would open stores. ? , always bringing us those exclusive stories on apple, joining us from los angeles. be sure to tune into bloomberg radio to hear more from the day newsmakers, in-depth analysis from the debris team now

broadcasting live from our studio in hong kong. listen through the app. plenty more had, stay with us. ♪ ou are retired right? am i? ya! save 50% on the sleep number limited edition smart bed. plus, free home delivery when you add an adjustable base. only at sleep number.

>> here is a quick check of the latest business flash headlines. goldman sachs is warning of the sharp slowdown in his investment

bank. compared to the gains a year ago. the trading business is trending down for than 20% this quarter. goldman is working on the third round of job cuts. it works to restart deliveries of the 737 max aircraft after a four-year halt. dave, says the market is large enough to support the company. china is boeing's largest source of revenue. airbus currently leads the market. >> alan joyce as he is in no rush to take on a new job as he prepares to retire after 15 years in charge. taking a look back at the highs

and lows of the tenure. i'm going to resist the partners here. it has been an interesting journey. would have been the highs and lows for them? >> event in alan joyce's career, for this injury -- industry, it is punctuated by extra ordinary events. that is probably one of the events that people remember. to tackle a labor dispute.

that is a really close call. it rips through the critical systems and puncture the left-wing. they limped back to singapore. if you look at the highs, it has delivered extraordinary returns.

the conditions now are a stringer demand. that is an extremely strong legacy he lives. -- leaves. >> we are watching with australia when other major market start trading in about one hour's time. that is a four daybreak australia. daybreak: asia is next. this is bloomberg. ♪ thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

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