♪ haidi: a very good morning and welcome to "daybreak: australia." i am haidi stroud-watts in

sydney. annabelle: i am annabelle droulers in hong kong. we are counting down to asia's major market opens. shery: good evening from bloomberg's world headquarters in new york, i am shery ahn. the top stories this hour. u.s. stocks rebound as strong earnings roll in. treasuries filing with fed officials signaling rates could remain higher for longer. haidi: volunteer shares turn positive on a higher profit forecast and billion-dollar buyback. the company claiming unprecedented demand for its ai. shery: ubs of revamping its investment banking leadership team, while waving a plan to cut 200 former credit suisse staff in asia. u.s. futures muted in the opening of the asian session after we saw stocks gaining ground in the u.s. session. the s&p 500 being led higher by communications services stocks and financials. after hours, we are also watching palantir, which at one point dropped 12%. of course we had the buyback announcement really pushing the

stock higher. but investors were initially really spooked by the fact that its annual revenue forecast came in in the lower end of their forecasted range. take a look at treasuries. it was really about digesting the more-hawkish fed comments that we got in today's session. the 10-year yield extending the gains that last week took it to november highs. also have $100 billion worth of options that need to be digested by the market this week. in the asian session, a bit of upside oil prices, up 0.6%. a bit of downside pressure in the new york session despite traders being concerned about disruptions in the black sea. we didn't feel that in the new york session. we are seeing a little bit of those in the asian session. annabelle: you mentioned palantir. when it comes to the asian session, it is the big earnings announcement coming up. this chart is looking at the

vision fund income. you can see clearly here, five straight quarters of losses. it will be possibly that optimism that we have seen around ai, something that has really helped boost the valuations of its portfolio companies in the vision fund, that could left the company to a small profit when softbank reports results later tuesday. one of the results we are watching in this part of the world. let's look at broader equities. because we are looking ahead to a mixed start. chinese futures in the red. trade data is due on tuesday, that is ahead of inflation data on wednesday which catullus the chinese economy is experiencing further deflation but for consumer prices. because futures pointing higher. kiwi stocks were in the red. he rebound yields ticking

higher in light of the news we had from treasuries. haidi: goldman sachs and morgan stanley are telling clients to buy 30-year information-linked funds. jp morgan is a list on 5-year treasury's. our next guest says they present a great opportunity. joining us is loreen gilbert, ceo of wealthwise financial . our investors going to be compelled to buy? how high do yields have to go? isaac: i think there is this opportunity -- guest: i think there is this opportunity as the federal reserve gets at least close to their terminal rate. and we think possibly they are already there, so with that, going long duration fixed income has an opportunity, because eventually the rates will come down. it's the same kind of thing we saw happen in 2011. at that time we saw a 27% return in the fixed income space.

with that, we can anticipate having potentially even double-digit returns on that kind of high quality government bond long-term trade. annabelle: how do these actions play out? given the timing is still a bit awkward just days after the fitch downgraded. does that make a meaningful difference to sentiment as well? loreen: i think that will be a non sequitur issue. i don't think that is going to be impactful. in fact, don't forget, we have seen this happen before. we have seen a slight adjustment right now temporarily. long-term, i don't think that is going to be an issue. shery: we are headed towards the u.s. cpi numbers, how much russia can we expect in margins for those companies that worst -- that we are still expecting to report earnings?

loreen: we are 84% through the earnings season so far. it is interesting to look at what we have been hearing. we no longer hear as much about inflation. not even hear as much on those earnings calls about recession. we still hear a lot about ai. that is what we are still hearing quite a bit about. but when it comes to the inflation numbers and what we are looking at as far as those inflation numbers, we do think we may see a temporary boost in inflation on the core numbers, and then coming down. we think we are heading in the right direction, and we think the federal reserve is going to take note of that when it comes to potentially another rate hike. shery: exactly. there is concern right now that we may not have seen the impact and the peak of monetary tightening by the fed, and what that actually means when you have also millions of americans

having to repay their student loans, with the resumption of payments around october. is the year end going to be a bit of a challenge when it comes to u.s. stocks that have rallied so much this year already? loreen: you bring up an interesting point about the student loan repayment. that has to do with consumer strength. when it comes to the consumer, the consumer has been very strong, surprisingly strong and has continued to be strong. they still have excess savings and that is the reason for that. as excess savings number comes down and student loans have to start being repaid, we think we will see continued weakening of the consumer. when it comes to corporate earnings, as far as that is concerned, we have the third quarter we have seen of negative

year-over-year earnings growth numbers. i think we have seen the worst of it so far, so i think we will start to see improvement there as far as corporate earnings are concerned. haidi: we have seen wheat climbing again. ukraine crippling that russian naval vessel. politics is entering the freight where we know in the medium to long-term, volatility is also to the upside for commodities with weather concerns as well. is this an area that you are watching, and how you want exposure, or do you try to minimize exposure to that volatility? loreen: when we think about the risks in the market geopolitical risks are at the top of the list . given the geopolitical issues that we have seen, china and russia coming together in an unprecedented move off the waters of alaska, when we see what is happening in ukraine, having to send arms there and that continued escalation, we do

think geopolitical risk should be top of mind when it comes to investing. those things can quickly become an issue in the markets. we are tending to be more domestic-focused when it comes to investing. we are investing internationally. there are some attractive places to be looking at international investing, but one of the things we have learned this year is how strong u.s. companies are. how they have been able to work through the incredible issues we have faced as far as inflation beginning. last quarter, profit margins have been maintained at an incredible pace. we would have thought they would have been hit more so. all of that speaks to the efficiency of u.s. companies and we continue to focus more so on

the u.s. and internationally -- than internationally. shery: loreen gilbert, thanks. great to have your back. still ahead, we discussed stocks in a post-monetary tightening world with deltec asset management. but up next, ubs with more job cuts looming in asia amid the integration of former rival credit suisse. detail just ahead. but first, live pictures of capitol hill, we are expecting that severe weather to impact the city. severe thunderstorms forced the faa to reroute planes across the eastern u.s. today. they are warning that departing flights might be delayed. flights out of washington, atlanta, charlotte and other cities are seeing their departures delayed. and we had already heard from the national weather service issuing tornado and severe thunderstorm watches this afternoon. this is bloomberg.

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shery: goldman sachs commodities research chief is leaving the bank. he announced his departure on monday. he has no plans to take on another job immediately. this position will remain vacant for now. with three of his deputies stepping into core lead the team. he rose to fame after correctly predicting that china driven boom. ubs is revamping the leadership of its investment banking division as it moves ahead with the integration of its former rival credit suisse. bloomberg's vonnie quinn turns us with more. so, who is staying and who is going? vonnie: it is interesting. ubs has 120,000 employees as it

currently stands after the merger, and wants to get rid of about 30%, 36,000, and there will be a few thousand layoffs. already announced in november on monday, it is revamping its leadership of its investment banking division. . it named almost 40 appointments to leadership roles, some promoted from within, some from places like barclays and other wall street banks. some did hold onto their jobs. six of these 40 appointments are bankers from credit suisse, including, as you can see, the new head of coverage, and the chief of staff. separately, ubs is trying to capitalize on bank of america's -- trying to capitalize on credit suisse's presence in the u.s.. it is holding onto the head of the global industries group, the head of health care, and so on. it had said it planned to downsize credit suisse's

investment bank and put them through a culture filter, so some of that is what is going on here. we will get more details on the integration plan on august 31 when we get earnings. haidi: do we know how apac is being affected by thee-org? vonnie: we know that about 200 jobs will go away. this is from someone familiar with the pattern. ubs is not commenting. reuters is reporting that 80 of 100 jobs in hong kong, which is the biggest hub of ubs in the region, are going to start going away and that will start as soon as this week. 20 will stay on. more good news, it does want one hundred credit suisse bankers in the region more broadly to stay on, some focused on areas outside of hong kong. we also know that china will not be affected in this maneuver

because it is in the process of selling that to a new buyer. ubs is up 18% year-to-date, so all of this news is he received, at least by investors. haidi: bloomberg's bonnie created there with the latest. zachary kirkhorn, cfo of tesla, stepped down after 30 years in the company. the move brings uncertainty about the leadership of tesla as he had been the top contender to succeed muska ceo. he will remain there through the end of the year where the chief operating officer will. take on chief financial officer duties. . ceo of ark, kathy woods, says she will miss kirkhorn. >> i guess 30 years was a good run for zach. can't say enough about him and what he did for tesla p trained

his successor well. shery: shery: in late trading, pelletier is slightly higher after falling as much as 12% at one point -- pelletier. after raising its profit forecast. they also game an animal revenue -- they also gave an annual revenue forecast that was lower. bloomberg's su keenan has details on the earnings report. the even announced a huge buyback. su: but you have to realize, this is an ai stock that has more than doubled in just the last quarter, up 130 2%. so you could say it was more than priced for perfection. investors a bit nervous. the company recently launched an artificial intelligence platform to help companies analyze data and make decisions. a lot of excitement on the stock. ahead of the earnings, the ceo described demand for his software as unprecedented. unlike everything we have ever seen. so, yes, good news is the

forecast, which as sherry said, came lower than expected, definitely is higher. they are buying back stock and seeing unprecedented demand. they beat second quarter profit and revenue. but in terms of the stock being priced to perfection, the company's commercial revenue grew faster in u.s. and other markets, but came in slightly under analyst estimates. you look at the gyrations of the stock after hours, you are seeing a little hesitancy on missing any of the estimates. it grew 10% to 100 32 million, less than analysts expected. . so little bit of concern there. the stock did reach equilibrium after hours, hearing the losses and coming out flat. looking at the year to date chart, though, tells the story. bloomberg was told that palantir

aims to be included in the s&p 500, which requires companies to reach certain benchmarks, one of them, to be profitable for a full straight year. at this point, it has been profitable for three straight quarters. haidi: even with that exuberance of unprecedented demand, morgan stanley's warning that the ai stock bubble may be in its final innings. su: yeah, i think that is part of the hesitancy you saw. the focus was on the good news. drop into the bloomberg and look at what morgan stanley is focused on here. nvidia and palantir have been riding this ai excitement wave. morgan stanley saying we could be in the final innings of the bible. and morgan stanley strategists have studied a lot of bubbles and they say that using nvidia as a proxy of a lot of large-cap tech stocks, they think it is at its peak. nvidia, notice, up more than

102% year-to-date. the bottom number is more the index of stocks. it has had a more muted rides. they say technically the rally is in its final innings. they typically look at bubble runs in stocks as being about three year returns of roughly 150%. they could argue that this bubble may be had surpassed others. even so, they are saying that there are indications, based on historical averages or bubbles that show that we could be in the final stages of the ai excitement. haidi: bloomberg's su keenan there. and you can get a roundup of the stories you need to know to get your day going on today's addition of "daybreak." bloomberg subscribers can go to dayb . you can also customize the settings as well for the news on the industries and assets that

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haidi: japanese online lender at record time says it is well-positioned to enjoy a profit boost when the bank of japan eventually ends its negative interest rate policy. the ceo told us exclusively that they are also set to benefit from japan's transition away from cash. >> i think the biggest opportunity is that japan is steadily becoming a cashless society. while the adoption rate is so low compared to other countries, it means significant future growth is possible. i believe refining our service will lead to even greater revenues. the challenge, on the other hand, is concern for security.

during the pandemic, many people got comfortable with shopping on e-commerce sites, but when it comes to digital banking, we are hearing questions of security and safety from many of our customers. our job is to explain the safety and reliability of our services. it's not an easy task, and it is a great challenge that promises a great opportunity. >> speaking of opportunities, what do you think of the boj's policies in the future, especially the end of negative interest rate policies? do you think that is going to help your business, push up your profits? guest: the majority of our assets have floating interest rates. probably the highest proportion among japanese banks. what does this mean for us? most of our interest rate income will increase in tandem with the

rise in short-term interest. the decision is up to the bank of japan, but we believe that end of negative interest rates is a huge chance for us and would result in a significant increase in profits. >> what about tweaks to ycc? does that impact your business or profits? guest: we believe the tweaks to the yield curve control will have a positive impact on our revenues and profits. first we can switch to a higher rate when a fixed rate asset reaches its maturity. secondly, a fairly rapid rates of increase in our deposits means an incremental boost to our assets under management. that incremental part allows us to enjoy the positive impacts of rising long-term interest rates. it may be even more so than other banks. shery: directly tim danks ceo

hiroyuki nagai speaking exquisitely to bloomberg. -- rocco towne bank -- ra kutan bank's ceo hiroyuki nagai, speaking exclusively to bloomberg. vijay sharma's steak will rise to more than 14% and ant's will drop to 13.5%. kkr has signed a deal to purchase simon & schuster, the book publishing firm, for 1.6 2 billion dollars. the ceo will stay on in his role after the close of the acquisition. paramount plans to use the proceeds from the transaction to reduce debt as it pivots its business from its traditional tv networks, to online streaming. shares of apollo global management fell in late trading after it announced it is selling

as much as $1.15 billion worth of convertible stock. the move is aimed at helping its unit seize on market turbulence. rising interest rates caused deal volumes to plummet and caused regional banks to sell assets at a loss. take a look at how u.s. futures are trading at the moment. a bit of a mixed picture in a pretty muted session. this, of course, after u.s. stocks gained and rebounded in the new york session, the dow seeing its best day in seven weeks. on the s&p 500, communications, services and financial stocks led gains but it was balanced out by the fact that investors were listing in to fed speak. governor michelle bowman signaling rates could remain higher for longer. he also had the new york fed president citing the necessity to keep policy restrictive for

some time. really the dichotomy with the treasury space being felt across markets today. do a futures not doing much. we also had the bloomberg dollar index really not changing in the new york session, paring earlier gains. we are awaiting the cpi numbers out of the u.s. coming up, we discuss the deflation danger for china as consumers at home and around the world cut back on spending. details, next. this is bloomberg. ♪

>> i supported raising the federal funds rate at our july meeting and i expect additional increases will likely be needed to lower inflation. i will be looking for evidence

that inflation is on a consistent and meaningful downward path as i consider whether further increases in the federal funds rate will be needed, and how long the federal funds rate need to remain at a sufficiently restrictive level. shery: federal reserve governor michelle bowman there. those comments sparked moves across treasuries, gold and copper among others. annabelle, what are the implications than for equities? annabelle: it could be a signal to us that the optimism is a bit overdone. we just had a new call from j.p. morgan. essentially he is reiterating his view that investors should stay underweight on u.s. equities, given that the expectations in the market for a soft landing, he says those are a bit overdone. he is actually citing the bank's views on the global economy, which he says will dip into recession by the end of next year. investors essentially should stay defensive with their

economic outlook. of course, this analyst was another biggest optimists on wall street. he reversed his calls last year. when you look at the u.s. economy, actually, jp morgan reversed its call and essentially they are now saying that the u.s. economy will expand this year. they also see modest subpar growth year -- modest to subpar growth. essentially for the third quarter, seeing expanding by 2.5%. shery: morgan stanley is more cautious on the outlook? annabelle: yes, that's right. they are looking at more of the fiscal policy risk, that risk we have seen through high government spending, that, they say is essentially unsustainable and something that will underpin some weakness coming through for u.s. equities. they also say that the fitch rating downgrade for the u.s. economy, that is something

that investors should be paying very close attention to. michael wilson from morgan stanley also spoke about his views on where the fed should go from here. take a listen. >> why would they cut rates when we have full employment? there is no reason to do that, unemployment is 3.5%, inflation still north of 3%. just hold. i am not making the case to raise rates. i don't think they need to do that, but i think they will want to see, to make sure things are done. i don't work at the fed, i don't know what they will do. my prudence would say that that is what they should do, pause and see what happens. annabelle: at we are seeing deflation pressures mount into the chinese economy and what is shaping up to be a key week for eco-data. haidi: this bring in our chief north asia correspondent stephen engle. anecdotal evidence pointing to further weakness.

stephen: we will get that data that will basically confirm what the anecdotal evidence is telling us. there are price wars going up right now. many retailers and other businesses, the inventory that they built up at a time earlier this year when there was so much expectation that there would be this avalanche of demand, that simply has not happened. many businesses and consumers are simply scarred from their drop in profits. their cash flow was decimated during three long years of covid zero. it's a big dilemma for the chinese government. cpi and to a lesser degree, ppi, is a sensitive issue. it just tells me, talking of anecdotal evidence, economists are being told by regulators not to talk about deflation. that tells me that the government is extremely worried. it's very different this time around, haidi, in late 2021

whenthan falling pork prices were a big reason for temporary deflationary pressures. this time it seems like it is much more fundamental, export demand weakening, internal demand week and, again, working off inventories, slashing prices to move inventory and absolutely crushing margins. the data, as you just saw, we will get the july cpi likely slipped into deflation, with consumer prices falling 0.4% year-over-year. producer prices, likely a 10th consecutive month, down likely 4% in july. shery: you said it, softer external demand is really not helping beijing policymakers. what are we expecting from trade data today? stephen: it's going to be weak

again. it's a big problem for the chinese government. the main pillars are all kind of weak right now that were supposedly going to be propping up the economy. domestic demand, the property sector has been weak. exports fell 13.2 percent likely, according to the consensus of estimates surveyed by bloomberg, that being in july a dollar terms, i might add. bloomberg economics, even more pessimistic, expecting a 15.8% fall. yes, effects from last year, but also weakening exports demand from a broad likely an issue. imports likely fell for a 50-year in nejra as well. data this week is going to confirm, likely, that anecdotal evidence, that the chinese economy is weak, and the government doesn't want us talking about that weakness. shery: bloomberg's chief north asia correspondent stephen engle . thank you. coming deltec asset management, tells us why they expect em growth rates to be higher than

those in developed regions in a post-monetary tightening world. they join us with their insights on opportunities in em's. this is bloomberg. ♪

shery: we are seeing early signs of investors in emerging markets shifting to stocks, from bonds. the msci asia index rallying 6%

last month, best performance since january. compare that to india since of dollar and local currency em debt -- compare that to the indices of dollar and local currency em debt falling. let's get more from our guest. what is behind the shift? guest: local bonds particularly have been a very popular trade earlier this year at the beginning of the year, as u.s. rates stabilized and inflation peaked. but investors are saying there is way more money to be made buying stocks. emerging economies are supposed to grow 3% faster than developed peers. that economic growth should translate to profits for companies that operate in those countries. shery: where are we talking about in terms of regions where investors see opportunities in em stocks? maria: one of them is america. monetary easing cycles have

started in they select brazil and chile. latin america, investors are saying that they like china. someone said half of their portfolio is in china. predicted profits of the stock index as a percentage of stock prices is 8.6 percent compared to bonds, which yield two percent. why would you be inbounds if you can get 8.6 percent in equities? shery: bloomberg emerging markets reporter maria elena vizcaino there. our next guest expects em stocks to catch up and outperform global equities in the second half in several cyclical and structural advantages. joining us now is deltec asset management and em portfolio manager gregory lesko. greg, good to have you with us. maria elena just talk to us about growth rates being higher.

what do you think will drive this move in em stocks? greg: she talked about the cyclical part, already chile and brazil have cut rates significantly, more so than expected in both countries, as has hungary. you are getting the beginning of an emerging markets rate cycle where we have significant scope to reduce rates. brazilian short-term rates are 13 .25%. we see inflation hovering around 4%. it is a giant real rate that we can see coming down a bit. almost all the money locally with such high short-term rates had gone out of the equity market and into short-term deposits, so there is a tremendous power in reversal of that money coming into equity markets. we are very keen on that market. it has pulled back a bit since they cut rates, but the opportunity there is pretty immediate. shery: there was a lot of optimism when it came to the chinese economic recovery to

boost em assets and yet that has disappointed. what can we expect for the second half? greg: the problems china has, china is 100% behind in trying to stimulate growth. they have two problems, the external environment is tough, people aren't buying as many tv's and cell phones, which are made in china, so that is a headwind. if jp morgan is correct and we will have a soft landing, maybe that gets better, it should get better as we go through the trough in global growth. the government is doing a lot to stimulate growth. companies were shattered during covid, but we expect it will take time, but it will come back. haidi: i just want to talk a bit more about china. typically we have seen china assets as being an anchor of. broader em take a look at this chart, though, we are also

seeing weakness from south korea, from taiwan and the philippines. those current account numbers from south korea are due today. major regional exporters turned negative in 2023 on asia. do you expect that weakness to persist? is this an area you would be trying to limit exposure when it comes to asia? greg: it's interesting, when you look at the data, certainly people like samsung are one of the largest exporters, and they had a terrible second quarter. operating profit down 90 something percent. i think investors are starting to get the view that we are getting past the bottom and we should start thinking about what is going to happen in the future . china does not have that advantage. investors are so rattled and shaken by some of the moves of the moves the chinese government has made, that it is more of a show me market. people will wait and see their growth before they are willing

to reward it. in the other markets, people are expecting better times. haidi: valuations are compelling, though, that is undeniable when it comes to china. what sort of catalysts do you need to see to find them compelling enough to change the weighting that you have on china? greg: china is not as interesting a story as other markets long-term. it has a demographically shrinking workforce. a country that has grown quite a bit in the last few years. the next 10 years in china will be more of a developed-type growth experience. cyclically we think there's probably a lot of money to be made in china. stocks are cheap. government is pressing for growth and inflation is nonexistent. shery: what are the structurally interesting em's to you? greg: places like mexico, where supply chains have realigned and

mexico, the inflows into mexico have been pretty substantial. they just posted 3.2 percent gdp growth in the last quarter which is better than just about anywhere. they focused a lot on the auto industry importing into the u.s. -- exporting into the u.s.. indonesia is another place getting a lot of attention because it is a different sourcing area than china, cheap labor as well as a population. they benefit from a lot of different trends. . they are big players now in the ev business with nickel. that is another area we are excited to look at. shery: we talk a lot about the super paso, the incredible rally in the mexican currency -- the super peso. what happens when we start seeing cats from the central bank there, and how does that projection for the dollar factor in? greg: mexico has been incredibly fiscally responsible. . they didn't put up any big

spending programs. even though it is a left government, they are not big spenders and they have always kept. a pretty tight ship. the peso has been rewarded from prudent management. the feature downgrade was a wake-up call for dollar investors. the peso has been very strong, but we see no reason why it should weaken against the u.s. dollar. haidi: deltec asset management director import for the manager gregory lesko great to have you with us, ahead of a very busy week. top of mind for us, of course, those inflation numbers, or deflation numbers exported from china, as well as trade numbers, expected to show the weakening. take a look at how markets are trading across the region. a picture of divergence when it comes to australia bonds and kiwi bonds. we are also looking ahead to some rba speak. the head of domestic markets

will be speaking at a conference in sydney. also expecting the consumer and business confidence numbers do you out of australia as well, as we are setting up for potentially some interesting times when it comes to bond markets. goldman and j.p. morgan saying buy treasuries after last week's rout. it will be very interesting to see the test for investor appetite for debt going forward. asian shares looking mixed after u.s. equities rebound as we get into the start of this trading day. aussie bonds have reopened higher at this point, after the trading holiday. be sure to tune into bloomberg radio, too, you can hear more from the day's newsmakers and get in-depth analysis from the team there. you can listen in via the app, bloomberg radio plus, or bloombergradio.com. much more ahead. this is bloomberg. ♪ me out of the bed?

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shery: it's a busy week for earnings in asia. a number of companies including softbank, foxconn and k-pop entertainment company hybe. korean entertainment stocks have soared this year on the popularity of k-pop groups.

haidi: sticking with the theme, bloomberg intelligence expects entertainment stocks to drive the growth of south korea's etf market. our next guest is here. how are investors getting in on this bandwagon, from blackpink, to bts, even though they aren't actually performing together at the moment? guest: there's actually an entertainment etf that tracks all 30 of these companies in south korea. it is called k-popus. there has been a hype into this area whether it is bts or blackpink. a lot of people especially in south korea are really into the dramatic themes. south korea ranks fifth by assets under management in south asia. it is japan, china, taiwan, australia and south korea. in south korea we have a lot of interest in the sector and hybe

has 320 one etfs that track the sector. haidi: what are some of the trends? rebecca: some of the trends are a battle between two companies, one of them being samsung. they are neck and neck assets under management, samsung leads by 32 billion, the other by 30 billion. we expect the year and, the second company might surpass something, the reason is because they just surpassed 100 billion in assets. they have done really well in terms of growing the landscape. they have australia, hong kong and india. they have done a lot of mergers and acquisitions and we believe that with this, they will be able to become top-ten globally. shery: when it comes to entertainment and the industry as a whole, social media influencers make such a big difference. how is that affecting flows in the region?

rebecca: we are seeing a large presence in social media influence. in south korea there is a youtuber who goes by the name of "healing traveler." some of his videos get 1,000,000-2,000,000 hits, really huge impact. what is interesting about him is he was previously a taxi driver. as you may recall, taxi drivers are always listening to the radio when driving. he has managed to amass large followers not only of the older generation, but the younger generation. we are seeing this across not just south korea, but in china, taiwan, hong kong, australia. one of the reasons for this is that it is a lot easier to access etfs now. for instance in mainland china you can buy them during the wechat channel, by a few clicks. a lot of people are looking for ways to diversify investments, looking for an unbiased opinion and that is why they are turning to social media. we are seeing that really

impacting the retail population in the asia-pacific. haidi: what about hybe in terms of the impact on fines? rebecca: they have roughly $500 million in etfs. what is interesting about them is that they are not only in dramatic etfs such as k-pop, but also in broad-based industries, such as in ishares, the vanguard, developed market. hybe is reporting today so we do expect it to do well. what is interesting about hybe specifically is that they are quite volatile, like these k-pop bands. for instance, when bts announced last year that they were no longer going to perform together and focus on their individual projects, we saw the stock dropped 37%. a huge amount. similarly with a lot of these other k-pop bands, when blackpink announced they were going to potentially not renew, the stock also dropped 40%.

with hybe they have a new grower group -- new girl group. when they released their first album, the stock rallied 41%. so hybe is a very volatile stock, very tired to the korean k-pop industry and overall to the fund's impact. most of these funds have a couple hundred names on them, but to k-pop directly, it did have a very large impact. the fund launch in september and in october, bts announced they were going to focus on their individual projects, so this etf dropped 20%, 30%. haidi: fascinating, bloomberg intelligence analyst rebecca sin with us here in hong kong. certainly some of the stocks i will be watching in the kospi trading session. this is the picture across asia, a mixed start. we saw the rebound in the u.s. equity session. japan and australia pointed to modest gains sydney futures are up. 0.4%.

kiwi stocks on the back foot, 0.25%. hong kong futures contract a bit lower. when it comes to currencies, and unchanged picture when it comes to trading in the aussie dollar, as well as we are also watching the yen. one other currency to watch is the won, sitting on the cusp of breaking a key support level as we have seen worsening sentiment, particularly when it comes to the broader macro picture across the region, the demand weakness out of china, and demand weakness regionally when it comes to trade policy. the dollar has been pretty flat after paring some of those gains seen earlier in the session. shery: and look at how u.s. futures are trading. not a lot of movement early in the session after the dow saw the best day in seven weeks. the s&p 500 also rebounded, with communication services and financials leading the gains in the wall street session. investors were trying to digest

more fed speak, signaling rates could remain higher for longer. and remember, this week is a packed week -- we have cpi numbers, treasury auctions totaling around $100 as part of the treasury's quarterly refunding. key events. and of course, the dollar has remained unchanged, trying to digest all of that. volunteer climbing after raising forecasts -- palantir's climbing after raising forecasts and authorizing share buyback. that is it for "daybreak: australia." "daybreak: asia" is next. this is bloomberg. ♪

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shery: you are watching "daybreak asia. haidi: