a month for cable when it's half the cost for fubo tv. get all the channels you want on the only live tv streaming service rated number one in customer satisfaction by j.d. power. try free at fubo. tv.com. all eyes on me cause i'm making look easy. yeah, i'm making the easy. yeah. with the top down yeah make a little breeze let it get busy is just too easy. don't make it look easy. come on. yeah. woo. hey. good morning and welcome to

daybreak australia. i'm paul allen in sydney. i'm annabel ruelas in hong kong. we're counting down to asia's major market opens. good evening from bloomberg's world headquarters in new york. i'm ryan. the top stories this hour, us stocks slide into the close on bets an improving economy will keep rates higher for longer. dollar strength sinking apac currencies to this year's lows. china said to mull cutting stamp duty on stock trades as defensive reaction to a surprise rate cut shows president xi facing more tough choices. plus, decision day for the reserve bank of new zealand with cooler inflation and higher unemployment supporting another hold. us futures coming online in the asian session, we're seeing a little bit of a muted picture after stocks fell in new york. we have the drop deepening in the final hour of trading. investors really trying to digest those stronger than expected retail sales and also more hawkish fed speak. we had financials being weighed

down. a warning from fitch that they might be downgrading larger lenders, also weighing on sentiment, earning from home depot beat expectations, but we're still waiting to see more on the consumer side of things with results from target and walmart. and we had a mixed picture when it came to treasuries, a sell off stalling as investors jumped on high yields. take a look at the ten year yield we're seeing at the highest since the highest level since november, the highest year to date. the two year yield, in fact, was down, finishing a touch below 5%. oil in the asian session slightly higher on rebounding after hitting that two week low. of course, we continue to have those worries about the chinese economy, but here in the us, a top fed official says is not yet convinced enough has been done to curb inflation as robust us retail sales show rate hikes have not slowed down the consumer. our global economics and policy editor kathleen hays is here with the latest. and kathleen, what do neel kashkari had to say? neel kashkari said that he

doesn't think they've done enough to end inflation yet. and of course, he has been in the more hawkish camp for the last year, the last year and a half or so. so maybe this isn't surprising. it's just that so many people are saying the fed is its new debate is how long to keep the rates high, not whether or not it needs to hike more. well, not if you're talking to neel kashkari. he said the fed has made good progress on inflation. the rate is still too high, so rate cuts, well, not yet. and add, don't even think about it. listen to what he said. are we done raising rates? i'm not ready to say that we're done in terms of cutting rates. i think we're a long way away from cutting rates because core inflation is still around 4%. it's still around twice of what our target is. kashkari wants to see convincing evidence that inflation is heading towards 2%. so what kind of number did we get today? as neel kashkari said, this retail sales in the us coming in much stronger than expected. they were up 0.7% in july versus

a forecast of 0.2 that beat everybody's forecast. it was a broad based increase led by sporting goods, clothing going out to eat restaurants. so the idea here is, well, gosh, that isn't the whole way the fed is going to determine what inflation is going to do. but they always talk about curbing final demand in order to have prices come down. and instead, it looks like this is a very resilient consumer. so far, it may bolster the case for a soft landing, but some are saying it may also necessitate more rate hikes ahead. paul. oh, kathleen, we do, of course, have a central bank decision today. the reserve bank of new zealand expected to keep policy on hold. that'll be too months in a row. a hawkish twist, though, still on guard against inflation, right? that's what is expected. and of course they did. this will be the second time in a row that they have paused. they paused. in july, in may, the rbnz thought at 5.5%. and mind you, that's still above where the federal reserve is,

that this would probably be enough. and of course, there's two sides of the coin since then. you can see that that chart showing where the rba nz now and again the idea they're going to hold and we there have been signs of weakness in the economy. you know, manufacturing down for the fifth month in a row and more. this is the kind of thing that bolsters this case. house prices are down et cetera. on the other hand, inflation, if you look at that, is only down to about 6% on a yearly rate. so the target is 1 to 3%. so that is looking kind of sticky in the latest survey from the rbnz, cpi is supposed to get down to 5.3 by the end of this year and even down to 2.83 by the end of 2024. but it's inflation expectations at 2.70%. maybe that is a good sign. and that's what they're watching very closely because we have seen an uptick recently in inflation expectations themselves, not just the survey, which suggests that that is still a risk share and something that that adrian orr speaking

after they make their decision on the official cash rate holding it at 5.5% that he may then keep that door open and certainly the reporters questions at that presser are going to get forced him to answer it several times, think in many different ways for central banks to sees kathleen hayes, our global economics and policy editor here in new york. let's get back to bell. how are we setting up for the asia open? we're going to be watching the kiwi dollar, of course, very closely following that rba decision. but broadly, the story in asia today is a dollar strength that's coming through. of course, those moves in treasury yields could be something to weigh on the equity picture generally. but here at taking a look at those other pairs against the greenback, the aussie dollar, for instance, again weighed down, keeping an eye on the japanese yen. barely changed, even though we did hear from japan's finance minister, suzuki, saying he is watching these moves quite closely. he is prepared to take action. so a little bit of jawboning and we can watch for any signs of verbal intervention throughout the session today. offshore yuan, of course, in focus. we're above that 7.3 level.

now. again, that is a reflection of the deterioration in china's economy. now, the macro picture we're going to cover in just a moment. but let's change on and take a look at the market reaction instead, because on the wall street day, it was really about those moves in the golden dragon index because we've now erased all of the gains that were in place since the politburo meeting that took place on july 24th. and it was a moment in which we got some pro growth policies coming through. so initially something that did lead to that bounce that we saw for chinese stocks, it's now being given up. what exactly are officials doing about it? we did have a bloomberg scoop out saying that beijing may cut stamp duty on stock trades. that would be for the first time since 2008, something, paul, that could really help lift market sentiment, but certainly a major concern for for officials in china. yeah, for more on china, let's bring in bloomberg's senior geoeconomics analyst, gerard de pipo. so gerard anabel running us through there. some of the rather disappointing numbers we saw out of china

yesterday and some of the policy responses as well. but right on cue, here come the downgrades. what are some of those big investment banks saying? well, some of the banks, including jp morgan, barclays and others, are now forecasting that china's gdp growth might fall below the target of 5% for this year. a few months ago, there had been a consensus that china would probably comfortably hit that 5% target. but now with the data coming out in july, that was almost uniformly bad, it seems less clear that that's a that's a guaranteed target. gerard we knew that the economic data would not be pretty for china, but how concerned should we be that they altogether are halting the public version of the youth unemployment rate at this point? so the national bureau of statistics suspended publishing their monthly data on youth unemployment. so that's ages 16 to 24. it had been about 23% last month or 22 and expected to go up. they said the reason why they

are suspending it is to revise the methodology, including to decide whether to include students who are in college currently looking for a job, whether they should be counted. maybe the methodological argument is sound, but i think the market reaction is just one of suspicion because it's clearly the number that people have been fixated on is showing that there's a problem with the labor market. the numbers for unemployment for youth are much, much higher than the overall, which is about 5.3%. and so it just doesn't look good that at this time they'd be pulling back that data. yeah, just stopping reporting those numbers doesn't mean the problem goes away. annabel talked about some of the policy responses that we've seen. what more might we be expected from policy makers in china? well, the recent announcement was that the pboc cut the seven day repo rate and their one year lending rate for banks. it's a small cut. i think what people are waiting to see is some any indication really that they're going to increase fiscal support. so far, the monetary policy support has been incremental and

frankly isn't doing very much. it's very clear that loan demand for mortgages, for example, is quite weak as the real estate sector is weak. i just don't think that that more monetary policy solutions are going to get them out of the hole. but for whatever reason, beijing is not actually unveiling any serious fiscal policy measures. and a lot of localities are too squeezed, including because of land finance issues, to actually do more projects. and so we're just waiting to see. and so far, it's just incremental. all right. senior geoeconomics analyst gerard dipippo there. thanks so much for joining us. well, china is calling taiwan's vice president lai ching, a troublemaker who seeks the island's independence. and this follows lai's comments in an exclusive interview with bloomberg, in which he says he wants a peaceful status quo. the taiwan affairs office says lai's comments are a lie, raising the risk of what it calls a fierce war. now, beijing had also criticized the us for allowing lai to transit through new york this week on a trip to paraguay. still to come, main street

research says the recent market weakness is overdue and that signs are emerging of a real bull run. we talk investment strategy. up next, this is bloomberg. butcherbox. you never have to worry about what's for dinner. we deliver grass fed beef, organic free range chicken, humanely raised pork, wild caught seafood and so much more. get high quality meat sourced from trusted partners with free shipping. all of this join and get free bacon for a year. butcher box. oh, that's where i left my hint. plus, let me show you the hint. plus was delicious and packed with vitamins. hint plus has more vitamin c than a real clementine. new hint, plus true fruit flavor.

plus a boost of vitamins. did he just call vitamins? vitamins for a limited time? new customers get over 45% off at drink mint.com. that's 36 bottles of immunity, boosting hint plus for just 36 bucks, only $1 per bottle. hint plus true fruit flavor, plus a boost of vitamins. when you're a small business owner, there's no such thing as 9 to 5. days are longer and business hours, well, they're anything but predictable, especially when you have clients like ours. when considered payroll providers. for my business, i looked for a solution that fit into my busy schedule. sure, payroll makes running payroll easy and its us based customer service is there for me when i have questions after hours and even saturdays. visit your. payroll.com/switch and get up to six months free and find out what makes us different because

small business is our business. you automate sales tax with avalara. you don't have to worry about things like changing tax rates or filing returns with avalara. i. i. i. right now inflation is coming down. we've made some progress, some good progress. feel good about that? it's still too high. the good news is the labor market has remained very strong. but it's a little bit of a double edged sword because the question in my mind is have we done enough to actually get inflation all the way back down to our 2% mark, or do we have to do more? minneapolis fed president neel kashkari there. and of course, that hot inflation in the us, not to mention hotter than expected economic data, all leading to market pressure.

our next guest says the recent weakness in us stocks is actually overdue. let's bring in james dammert, cio at main street research. james, great to have you with us. how much is this an opportunity to actually re invest the pullback in us stocks? and are you putting more money into the markets now? hi, sherry. you know, this is an overdue pullback, without question. we think it turns into at least a normal correction. you know, the 8 to 12% kind we saw in march or december of last year. and we think it's going to be a fantasy tastic opportunity, not only, you know, will valuations come down to a little bit more reasonable level, particularly in technology, but also you saw a little bit in that last rally up before this decline, a little bit more participation, a broadening in the market, which is which is very healthy. but we were very technically overbought. we had a lot of complacency, as you probably know, in july. and that usually leads to some

sort of natural pullback and think that, you know, as investors start to recognize is that inflation is definitely coming down a lot and the fed is getting closer to being finished this is going to be maybe one of the best opportunities to really push in here, not just in those great technology companies that are coming back pretty, pretty nicely down, but also the rest of the market. you're not concerned about the fed doing too much and that potentially we could see a pullback in the us economy. we are getting home depot beating expectations when it comes to their earnings. we are going to get target, we're going to get walmart, but i wonder for how long we're going to see a strong consumer here in the us. you know, i think that's a great point. sherry and kikai's comments which we just saw, you know, about the fed maybe having to just be a little bit more adamant and maybe go a little longer than people expected. i think investors should be careful about, you know, that being sort of impediment to buying stock in great companies, great businesses that have great

brands that trade a good valuation. we're also running towards a seasonally weak, volatile period. and what i'm concerned about the average investor doing here is sort of saying, oh, i'm not going to invest. maybe the fed's going to go too far. and i think that's a mistake. the fed is pretty aware that what they've already done is going to still, you know, baked in and it's going to still push inflation down their concern now is this economy is just so darn resilient and so robust. i think they've got the the latitude here to go a little further than they might have expected. and we must remember, and i remember because i've been doing this for three decades, you can have very nice big bull markets with inflation at 3 or 3.5% or even four, and economic growth being perfectly fine and equities do well. so here's where i think investors want to be careful about letting seasonality or volatility stop them from, you know, owning great businesses.

you mentioned the resiliency of markets, but inflation also resilient. when do you see that returning to the fed's target band? well, paul, i think that's the concern that we have as a team, that the fed is really kind of wanting to get to two. and our concern and our view is that they may just not get there. they may just have to say, gosh, we got to three. if we go further, you know, all it's going to take is some unemployment numbers coming up. and that'll i think, will likely stop them. they think at this point they're they're they're concerned about the inflation. obviously, getting back down to that level of a lower level, it's certainly more manageable now. i'm not so sure they're going to get to two, and i wouldn't be surprised to see them compromise at maybe three or a little bit less than that. and again, you know, you can have a very robust economy. and again, this is a very resilient one coming along with with that kind of inflation

figure. yeah, the us dollar also robust and resilient. we've got a chart here that illustrates that just how robust now testing the 200 day moving average, how long do you see this environment of dollar strength persisting? yeah, dollar strength is very correlated to rates, right? you get higher rates as we did throughout the last 18 months. and it was very dollar correlated with a very strong dollar. we would suggest that the recent strength in the dollar is absolutely correlated to the rise in the ten year right above four. again, close to the old high that we saw in march, which is not surprising to see equities sort of give back some some steam here. right. but don't know if the fed is going to eventually put the gun down about raising rates. i think if you're a dollar bull, you're going to have to be careful here, because if the fed is going to be able to slow those rate hikes down or maybe stop the dollar, would probably become more of a nonevent. right. not a not a bullish case to buy it or go short. i think it's just sort of just becomes a nonevent.

we continue to see economic data missing. estimates in china. in fact, we're seeing really that slump continue and expectations that perhaps policymakers will do more. we have seen that on the monetary policy side of things, is it worth being exposed to china, whether through us companies that do business there or just directly into chinese assets with the expectation that they will actually come to the forefront with more? yes, sherry, we're global investors, so we look all over the world and we've been avoiding china. but boy, when you when you start to think when any economy gets so sort of weak that it becomes obvious and you know, the central bank starts lowering rates as they're doing in china through all this policy at it, at some point, you have to say to yourself, gosh, there's value there. we don't see it yet. we don't we just don't see it in valuation. we certainly don't see it in in sentiment. it just doesn't act well.

now, there are pockets. there are companies because we buy individual companies, there are companies here in there like like alibaba that had great numbers. i think if you're really selective, you probably could have some presence there. but i think the average investor should sort of look other places in the globe that are just not going through such difficulty. all right, james, we'll have to leave it there. but thanks so much for joining us. james demint, chief investment officer at main street research there. and you can get a roundup of the stories that you need to know to get your day going. in today's edition of daybreak. terminal subscribers can go to debby. go. you can also customize your settings so you're only getting news on the industries and the assets that you care about. this is bloomberg. rise up this morning, a smile with the rising sun freely.

the first by my doorstep singing sweet song of little disappearance to saying sandals rhythm and blues caribbean sail now on visit sandals.com the omaha steaks anniversary sale is here for over a century we've guaranteed the highest quality in everything we offer. to celebrate, we're offering you 50% off site wide. that means you'll save 50% and get our 100% guarantee that you'll love every bite. never tried omaha steaks. save an extra $30 with promo code. first time visit omaha. steaks.com/tv today. he snores like an angry rhino you've never heard of angry rhino baby here. one of every night. okay, i'll work on that. say 50% of the sleep number

limited edition, smart bed plus free home delivery. when you add a base shop now only at sleep number, the client wants who was a respiratory care nurse during the covid 19 pandemic. betterhelp quite literally provided her what she needed at the most pivotal time in her life. are you rich? no, that's a good question. is it about what you have in the bank or your 401. should you buy a place where you live or hold off? and if you build, could sand shortages in singapore impact prices in connecticut? at bloomberg, we see wealth as more than just money. our coverage looks at wealth from every angle so you can make smarter decisions. bloomberg wealth. all you need to know about wealth. who has it, who's makin and how you should think about yours. donald trump is turning his mounting legal woes into a

centerpiece of his presidential campaign, betting that the polling boost from his recent indictments will translate into votes next year. let's bring in bloomberg's white house and politics reporter gregory cody. gregory what interested political scene going into 2024? right. tell us a little bit about this latest indictment and the implications for the elections. yeah. so this is the fourth time this year that former president trump has been indicted, you know, former us president ever in our history has been charged with anything more than a speeding ticket until now. and now president trump has been indicted four times for conduct before during and after his presidency. this latest indictment is in atlanta, georgia. it is a charges brought under state law for allegedly trying to subvert the outcome of the presidential election in georgia. and state law is significant here because the county prosecutor in atlanta, georgia,

is not accountable to the federal government or the attorney general. and presumably, if trump were convicted, he would not be able to simply pardon himself to get away from the consequences. and so this most recent case is seen as a little different than than the previous cases we've seen. but we have seen the pattern here where every time president trump gets indicted, he gets a little bit of a boost. right. he gets a boost in the polls. he also gets a boost in fundraising from his supporters who send him money to fight these legal challenges and to to help his campaign win the nomination in the republican nomination for presidency yet again. so you mentioned that this is a charge brought under state law. isn't the solution fairly obvious here? don't go to georgia. well, that's that would be one solution, except for the fact that there are still federal marshals who will be able to to arrest you and to extradite you into georgia, to face state law

in the united states. that's not the solution. we do expect president trump to turn himself in. he also, you know, look, it's an unusual situation because as former president, he's still entitled to secret service protection. so every time he goes into court, he has his bodyguards with him that bring him in, usually through the back door, usually there are some courtesies given to allow the former president to not have the full indignity of being booked and mugged and and jailed prior to his indictment. but the difference here in atlanta is going to be that under georgia law, court proceedings are televised. that's something we have not yet seen before in any of his previous three indictments. and so when president trump does show up in the next week or two to face these charges, we will see him in the courtroom, presumably pleading not guilty and we'll have the former president sort of humbled standing at the defendant's table and that's a visual that we have never had before in our country's history. gregory we know that president

biden is himself on a pr blitz trying to publicize his inflation reduction act. how is 2024 race shaping up? well, look, if it is president trump that gets the republican nomination and he certainly is the clear frontrunner now, and as the incumbent president, president biden is almost certainly going to be the democratic nominee. it's a rematch of 2020. right. and so the only difference is how has the economy changed? what other issues have changed? how have demographics changed? how is the voting, the electorate changed? but also, there are some other issues out there in terms of abortion, some social issues that could also come into play. but by and large, presidential reelection efforts are referenda on the economy. and president biden is knows that. obviously, he's out there trying to make the case that the economy is looking up. all right. bloomberg's gregory curti there. well, president biden says that

he plans to travel to hawaii to see firsthand the devastation from the maui wildfires. biden says he's spoken to governor josh green so the trip does not interfere with rescue work. the wildfires killed almost 100 people, making them the deadliest in the us for more than a century. one risk modeling firm says the disaster will cost insurers more than $3 billion. my wife, jill and i are going to travel to hawaii as soon as we can. that's what i've been talking to the governor about. i don't want to get in the way. i've been to too many disaster areas, but i want to go make sure we got everything they need. want to be sure we don't disrupt the ongoing recovery efforts? take a look at how currencies are trading at the moment. of course, we have the dollar today. really fluctuating between gains and losses as treasuries ended mixed. but the japanese yen holding steady after six days of declines against the greenback. of course, we had verbal warnings from finance minister shinichi suzuki saying that he's watching the foreign exchange market very closely, given, of

course, that weakness that we haven't seen this year past at 145 level, the aussie dollar also losing ground for a sixth consecutive session. this is the longest losing streak since november. as we continue to see more dollar strength. but we're following the kiwi dollar very closely as we get the rbnz official cash rate. the central bank likely to stand pat, but perhaps a hawkish signal. we have more to come on daybreak, australia. this is bloomberg. wow, you get to watch all your favorite stuff. it's to die for. and it's all right here. streaming was never this easy, you know. this is the way. you really went all out didn't you? um, it's called commitment.

could you turn down the volume? here, you can try. get way more into what your into when you stream on the xfinity 10g network. so, you've got the power of xfinity at home. now take it outside with xfinity mobile. like speed? it's the fastest mobile service around. with the best price for two lines of unlimited. only $30 bucks a line per month. that's hundreds in savings a year when you wave bye to the other guys. no wonder xfinity mobile is one of the fastest growing mobile services. you really shouldn't walk out the front door without it. switch today at xfinitymobile.com

online apply today at coursera.org. some things are better left to a professional in hindsight. probably shouldn't have tried to remove my own appendix like when it comes to finding financial advisors. what was i thinking? so leave it to smartasset to find them for you. take the free quiz at smartasset dot com. then you'll be matched with up to three vetted fiduciary financial advisors to get started. take the advisor match quiz now at smartasset dot com. it was this close. this close. all right, you're seeing live pictures of the new zealand capital wellington on the day that the bnz about to hand down

its cash rate decision. if we take a look at the kiwi dollar, it's under $0.60 us now. it's slid about 5% over the past month and bloomberg economics does expect the reserve bank of new zealand to keep those rates unchanged later on wednesday. let's discuss more with mary jo vergara, senior economist at kiwibank. mary jo, thanks so much for joining us. so no change expected, but we have something else that's not really changing in new zealand as well, and that's inflation. if we take a look at this chart on the bloomberg, we can see that it remains very sticky. so how confident can we be that even if the rbnz stays on hold today, that this really is the end of the tightening cycle? that's our expectation that the reserve bank is done here at 550. we're now past the peak in inflation. we're seeing that disinflation that we've seen offshore starting to happen in our own numbers. that sharp deceleration in imported inflation should start to carry that headline rate

lower. so and there's also favorable base effects in play with those last year's spike in in energy and food prices beginning to fall out of annual calculations. so we do see momentum there. we could see the the the inflation rate here with a 4% handle by the end of the year. it's just getting to that 2% rate, that sort of final mile. that's the tricky part. but we do think domestic price pressures will call sort of at the end of this year with the forecast recession to come. and a loosening in the labor market. yeah. so in terms of that recession and the rising unemployment rates, can we anticipate rate cuts sometime in 2024? have you made any change to your cash rate track? no, we've still we're still of the firm belief that they'll cut rates early next year, february is when we've penciled it in and when we're looking at previous tightening cycles, it usually takes around 8 to 10 months between the last hike and the

first cut and cutting in february next year would fit that precedent. it's not a hard and fast rule, but it would fit that precedent. i think they'll be in a position early next year where they can begin the easing cycle. the economy will be in a much weaker state. unemployment will be rising and inflation hopefully is much closer to that 1 to 3% target band and hopefully actually within it. so i think they'll be in a position to actually begin cutting rates. i think they'll be on hold for the rest of this year. keep the cash rate at 550 wait as those previous rate hikes wash through the economy, but then early next year be in a position to actually begin cutting rates. mary jo, are we expecting any other tweaks when it comes to the new zealand outlook? not much i think from considering the data since their may statement. the economy's tracking broadly in line with their projections and if anything, the projections have been slightly on the weaker side. so the economic starting point is a little weaker for the labor market, is a little looser with the rapid rebound in net

migration and the inflation rate came in a little bit below their forecast. so i think we'll just see some tweaks here and there. their central their central scenario really is broadly unchanged. i think it's just a risk around it that have become more pronounced when it comes to the chinese economy. we know that many asian countries are exposed to the slump that's happening right there. but at the same time, we're hearing from more analysts that perhaps china's actually exporting disinflation overall when it comes to the new zealand economy. is this a net positive or negative? yeah, it's hard to say because on the inflation side with them, deflation, it does. you know, it helps us lose, you know, import some deflation as well. but we are export oriented economy and that does mean that our export growth will come under pressure. we're already seeing that with the dairy prices, with the bad a poor auction overnight. so i think we're starting to see that in the currency.

it's coming under pressure. we are very exposed to to the chinese economy. it's it's our largest trading partner. so when they're in weak growth, it's not a very good outlook for us as well. yeah, mary jo, i want to circle back to where we actually began with the new zealand dollar under $0.60 us now. and of course we've had some rather hawkish remarks from the fed's neel kashkari over the past few hours as well. so what's the path of least resistance for the kiwi here? yeah, there's not much going in favor for the kiwi dollar. we've got you know, globally risk appetites quite weak dairy prices, commodity prices are coming under pressure with with weak global demand and also just the chinese economy. we're very linked to that as well. and they're not, you know, they're not performing post their covid recovery. so i think there's not much going in favor for the kiwi dollar. we are expecting it to continue to falling. we expect a year end kiwi dollar of around $0.55. it won't be a straight line

descent, but you know, that's sort of the year end forecast. we have of course seen property prices easing in new zealand as rates rise. but as rates rise, have you seen much evidence of mortgage stress? not yet. i think that just tells you how strong our labor market continues to be. we did see a bit of loosening over the the june quarter, but it's still incredibly tight. we still have unemployment at very low levels and participation in the labor market is still very high. so people are still in their in their jobs. they're still getting paid and we haven't seen any. you know, mortgage sales as yet. we're still very tight with with the labor market and that's transpiring to a you know, not not a big sell off in houses. mary jo vergara, senior economist at kiwibank, great to have you with us. it's time now for morning calls. and investors are now the least pessimistic on stocks since february of last year. that's according to bank of america's latest global survey

of fund managers. annabel joins us now with more results in hong kong. bell so it seems recession concerns are pretty much fading. yeah, that's right. sherry and off the back of that, perhaps, we're also seeing optimism rising as a result. but just recapping some of the key findings from that bank of america fund manager survey, the first is that investor allocation to equities is now the least underweight since april of last year. and second is that more and more investors are expecting inflation to slow over the coming 12 months. so when you take those two things together, it is quite a rosy outlook and that's being really reflected in this base case for recession now, and that's for a so-called soft landing to come over the coming 12 months. so that really is something as well that's been reflected in the moves in global stocks. have you changed on now? and take a look at the oil all country world index and you can see those moves higher over the past couple of months with those changing expectations now more than 12% over the course of this year. but off that that that guide that interest rates there near a

peak and also global growth. paul is going to be holding up better than expected. yeah a different story though for china right. we've been unpacking some pretty miserable data over the past few hours. definitely. that really was reflected, as you were saying, and discussing over the course of this hour that that weaker activity data that came through yesterday. we had those two rate cuts as well to the seven day reverse repo rate. and then also the one year mlf rate as well. and that really didn't do much to boost sentiment. and then when you zoom out a little bit further, you can see bank loans are at a 14 year low. we're seeing deflation setting in exports as well. they're contracting. so it's not a great picture and it really is putting further pressure on president xi jinping, possibly to do things that he's so far sought to avoid and that would be helping the property sector, for instance, and then also giving consumers money to spend, even though he has cautioned against welfarism and has been quite reluctant to do so thus far. but he could have a reason.

and this is coming from drew thompson. he's a former pentagon official. but essentially he's saying that the risk of unrest is starting to rise in china. and so it is something that beijing needs to pay attention to quite closely. if you change on now and take a look again where this is being a little bit reflected perhaps in market moves so far, it is in the offshore yuan forward implied yield now that has seen a bit of a tick higher, 1%. but still the biggest move we've seen since april of last year. and sherry, it is a signal to us perhaps of capital flight taking effect in china. all right. well, let's actually stay in china, because at the end of the country's regulatory crackdown is also expected to lift earnings for tech giants, including tencent and jd.com. but continued economic headwinds may slow their revenue growth momentum. our chief north asia correspondent, stephen engle joins us now from hong kong with a preview. so, steve, let's start with tencent. what are we expecting from their results? well, you're absolutely right. obviously, that giant wet blanket was lifted on the

regulatory front on these tech companies, as we saw with the alibaba numbers, their revenue growth was better than expected. tencent likely to see its fastest pace of revenue growth in the june quarter of about the consensus estimate is for 13.4%. it was around 11% in the calendar. first quarter. so there's an improvement obviously with that lifting of the regulatory crackdown that lasted many years. and also generally people spending a little bit more. but again, most analysts are saying that because of those economic headwinds that annabel just ran through going into that second half of the year, we're going to see we are starting to see kind of a slowing down of that momentum, essentially rising cost pressures on games and also artificial intelligence is capping the scope for further margin improvements and also ad spending likely to be kind of dampened because of that weakness, top line recovery. according to bloomberg intelligence, set to continue,

but with less momentum, goldman sachs, for one, trimming its target price by 3.3% this week, mainly because of that economic softness. guess if you want to look at one thing, we'll be looking particularly for in the analyst call with management at any kind of update on their, you know, indigenously developed hun hunyuan ai program. again, tencent seen as a bit of a laggard in the ai space. but again, any kind of update on that would be key. but even though most analysts are not expecting any, you know, any significant revenue contributions from ai, at least for the next 12 months. but again, that softness in the economy is going to kind of weigh down any, you know, exuberance that we might have seen in the first half as revenue recovered. barclays, jp morgan are the latest big banks to ratchet down their growth expectations this year and even next for the chinese economy. steve, we're also going to hear

about jd.com. what are we expecting there? yeah, interesting. jd jd.com are obviously going to be impacted by the the slowing momentum in the chinese economy. no doubt. but they're likely to see some pockets of strength similar to what we saw with alibaba. some big ticket items being pushed out. the virtual doors, if you will, for jp or for jd.com demand for physical goods. according to bloomberg intelligence, recovering last quarter and should support high single digit growth for gross merchandise sales overall, sales are estimated to have increased eight not a lot, but 4.3% in the second quarter year over year. up from just 1.4% in the first quarter. so yeah, we do need to look at jd.com as a bit of a bellwether for the consumer. all right, chief north asia correspondent stephen engle there. and you can also turn to your bloomberg for more on china tech earnings. go to t live. go. that's go and get commentary and

analysis from bloomberg's expert editors. and plenty more to come on daybreak. australia. this is bloomberg. you automate sales tax with avalara you don't have to worry about things like changing tax rates or filing returns. avalara. i. i. i. 76% of 23 andme health customers surveyed reported taking healthier actions because they know health isn't just a future state. health happens now start your powered health journey today with personalized insights from 23 and me. fabulous surroundings. but everyone's looking at their phones for financial insights from merrill. is he hailing a ride to the concert hall? no. he's making sure his portfolio and retirement plans work in harmony. they want to adopt a child and build a new home. so they're talking numbers with their merrill advisor.

she's not researching her next role. she's learning how to handle market ups and downs without the drama personalized advice so impressive, your money never stops working for you. with merrill, a bank of america company, what would you like the power to do? butcher box. you never have to worry about what's for dinner. we deliver our grass fed beef, organic free range chicken humanely raised pork, wild caught seafood and so much more. get high quality meat sourced from trusted partners with free shipping. all of this so you can always be prepared and enjoyed the important things. sign up for butcherbox today. now to a big deal in both the oil and carbon capture industries. occidental petroleum has agreed to buy canadian start up carbon

engineering for $1.1 billion in an all cash deal. bloomberg's keenan joins us now with more on this. and sue, this is an oil company that warren buffett has a stake in. yeah, warren buffett has been a big fan of oxy and particularly its leadership by ceo vicki hollub. and he's been buying shares throughout 2023. so that adds extra attention to this story. but oxy buying canadian carbon capture startup carbon engineering is also a big story because they want to expand their leadership position in removing carbon dioxide directly from the atmosphere. as mentioned, this is a 1.1 billion all cash deal expected to close by the end of the year. now, the two companies have been working together in partnership for the past four years on oxy west texas stratus project that's set to be the world's largest direct air capture plant by 2025. dac is the buzz word and it is the way it's described.

and what it really means is pulling carbon dioxide directly out of the atmosphere. and my colleague kevin crowley in houston says it's kind of like oxy is now jumping ahead to carbon capture 2.0, where many of the rivals are doing carbon capture 1.0, pulling carbon dioxide out of concentrated emission streams from smokestacks or refineries. so this is really an advanced move in terms of clean energy. see, it's important to point out that real momentum is now building behind carbon capture and what's called sequestration. it's one of big oil's favored climate solutions. and last year, after the companies posted record profits, they got a lot of generous tax incentives for this. we should also point out the buyout is the second big oil deal in recent weeks. exxonmobil recently agreed to buy co2 pipeline operator denbury last month for 4.99 billion. so very interesting development. yeah. so so tell us a bit more about this increasing interest that

we've seen in occidental over the past few months. yeah, this is a year you should recall where oil and natural gas prices earlier in the year were slipping. and yet we saw warren buffett, who many people follow for his very prescient investment advice. he was buying oxy. what's very also important to note is he's a big fan of vicki hollub. she is the only female ceo of a major oil company. and back in 2019, when it looked like she was going to lose the bid for anadarko, she got a call to put in a call to warren buffett. she didn't even think he knew who she was as she tells the story, she made the call. he took her call right away and he gave the cash to oxy to make the winning bid for anadarko. apparently, he's been a major fan of occidental ever since with a more than 25% share in the company. it's just over 25% as of the latest 13 f filing that we reported yesterday. and so a very interesting deal

indeed. so keenan here with the latest on that big energy agreement and ukraine's energy minister says his country is preparing for another hard winter as the war with russia grinds on. in an exclusive interview, german glushenko told us kiev is expecting more inflows of gas from its european partners. today. we could say that already something around 600 millions of gas stored in ukraine, which is gas of european companies. and that is also important for the security of supply in europe due to the level of storages in european in europe now, because it's very high. so i think that that is a good solution for for the business and that is a good solution for european security. do you expect more coming, minister, from europe? yeah, we expect more coming. so, so i can tell you that we expect average something around

from. 5500 to 600 per month. so and we could offer, we could offer. so our, our storage is. we need 15 bcm for ukraine for the next season. and so 15 bcm is open for storing in ukraine. can we talk about what you expect to happen this this winter minister both in terms of the situation in ukraine and what you think the energy situation is likely to look like in europe? i think that that's very important. i mean, when we are talking about the gas that is very important instruments which already started in european union, that is the joint purchasing platform, which would allow it not to speculate the prices and manipulate the prices. and i think that that is very important decision concerning the ukrainian energy system. of course, we we are preparing for the another hard winter. so and just recall you that the previous winter we were living

under everyday massive attacks on the energy infrastructure from russia. so it started from the 10th of october and the last massive attacks. one was on the 9th of march. so and it was every every day by all kinds of weapons. so now we are preparing for the next winter and we are not expecting that they wouldn't shell our energy system. that was ukraine's energy minister, german galchenko speaking exclusively to bloomberg's alix steel and guy johnson. and be sure to tune in to bloomberg radio to hear more from the day's big newsmaker 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 bloomberg radio.com. plenty more ahead. stay with us. at granger weir. for the ones who pay attention to every little detail, the ones who fuss, tinker and sweat the small stuff because you know, the tiniest thing can make the biggest difference when it comes

to keeping business moving. we get it. we're the same way offering access to product experts to help you quickly and easily find what you need. so whatever your industry, you know, you're always getting professional grade products. call click granger.com or just drop by granger for the ones who get it done. one way to avoid expensive car repair bills is to be a race car driver. the other is endurance. you could never pay for covered car repairs again. in my first year with endurance, they covered a $14,000 engine replacement as a certified mechanic, i always recommend that my customers have an auto protection plan. you never know when a breakdown can strike and you need coverage that you can count on without endurance breakdowns can cost thousands with endurance, you're covered. even better. you pick the mechanic you trust. endurance covers nearly every car on the road up to 20 years old. they cover a ton on the car.

so who's gonna pay for your next car repair for you or endurance acts now for $300 off any plan plus a full year of elite benefits. a $2,000 value free and a 30 day money back guarantee. call 1-855-908-7323. now for a free quote. well, the biggest soccer match in australia's history kicks off later on wednesday night. the host nation is going to be playing england, the old enemy for a place in the fifa world cup final, the matildas or the tilly's as the aussie team is known, have captivated the nation on their run to the semifinal, been smashing attendance and viewing records. and nabila ahmed heads bloomberg's global equality coverage and joins us now. nabila, it's not just the women's football team that's been winning here. it's the sponsors as well, right? that's exactly right, paul. we've seen women's sport being

described as the growth stocks of the economy right now. and that's exactly what's what the sponsors are benefiting from. so this tournament, as you say, we've seen, we're expecting numbers of about 2 billion viewers worldwide. we've got record attendance at the grounds and in australia last saturday's quarterfinal was actually the biggest television event of the year. when you put that together with the fact that women's sponsorship deals are still a lot cheaper than the men's, and yet the game is growing much, much faster. that all adds up to a really good equation for sponsors like cba, which actually also sponsors the australian women's cricket team. they've really got a strategy to go after women's sports. yeah. how did those sponsorship deals between the men's and the women's teams compare? so unfortunately overall there is still a huge lag between the numbers of what you see at the women's and the men's. so the women's tournament this year, even though they've got more sponsorship deals than ever before, the sponsorship revenue totals only about.

300 million usd. that's just a fraction of the $1.7 billion that we saw generated from the men's event last year. yeah, so a huge gap there. how does that get closed? and i suspect a lot of it has to do with tv viewing figures, right? that's exactly right. and it's you know, i was talking to monique mcleod at cba about this, and she says it's about the women's game really showing its worth, which this tournament has definitely done in spades. and it's about the sponsors sort of cottoning on to that and seeing that big potential. well, and you can see from this tournament and the numbers that it's generated certainly next time around, advertising spots might be a bit more expensive. all right. so that's the money side of things. let's talk about the event itself. what are the expectations for who's going to win this match? well, it's going to be a very, very tight and close match. the team, the teams really know each other very, very well. a lot of these players, including sam kerr, will be coming up against her chelsea teammates like millie bright in

this match. so the teams are very well matched. it will be a fun and close game knowing that it's england. it's probably going to go to penalties and be a nail biting, heart stopping kind of finish. yeah, well, given england's record on penalties, i kind of hope it does go to penalties. that would be sort of interesting. and just as an aside, bloomberg's nabila ahmed, thanks so much. also, we've got ai predicting a32 victory for australia. i suspect in this case, though, i might stand for australian intelligence rather than artificial intelligence. let's take a look at some aussie assets though. stick to our knitting here right now. we've got futures ahead of the open in negative territory quite substantially. so we did see a major risk off sentiment in the us market. so we're off by about 1% in terms of futures at the moment. the nz trading lower by two thirds of 1%. it is of course rbnz decision day, no change expected to the cash rate. the rbnz's seen staying on hold

at 5.5%. take a look at the yen, though. well, that's still pretty weak. one 4559 these are levels we have not seen since, i believe, november last year. so we are remaining on intervention watch when it comes to the japanese yen. all right. that will do it for daybreak, australia. stand by daybreak, asia. up next, this is bloomberg. i am the sun. we rise together. we rest together. i am the win. we were here long before you.

i am the earth. powerful and ever changing. i am water vast and relentless. and i am master a source of hope. pioneering clean energy. i utilize the powers of all of the elements and turn them into a source of hope, of ambition, of trust. what a power and of action from the heart of the for all of humanity. masdar pioneering energy.

how can you sleep on such a firm setting? yeah, mine is almost the same as yours. almost is just another word for not as good as mine. say 50% of the sleep number limited edition smart bed plus free home delivery. when you add a base shop now only at sleep number. hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, i said, "yeah, whatever. there's no way this works like this." and threw it to the side. a couple weeks later, i seen it again after getting not so pleasant news from my physician. i was 424 pounds, and my doctor was recommending weight loss surgery. to avoid the surgery, i had to make a change. so i decided to go with golo and it's changed my life. when i first started golo and taking release, my cravings, they went away. and i was so surprised.

you feel that your body is working and functioning the way it should be and you feel energized. golo has improved my life in so many ways. i'm able to stand and actually make dinner. i'm able to clean my house. i'm able to do just simple tasks that a lot of people call simple, but when you're extremely heavy they're not so simple. golo is real and when you take release and follow the plan, it works. sign up for butcherbox today.

rise up this morning. smile with the rising sun. three little birds pitch by my doorstep singing sweet song of melodies, pure and true saying sandal's rhythm and blues caribbean seal now on visit sandals.com pay over 100 bucks a month for cable when it's half the cost for fubo tv. get all the channels you want on the only live tv streaming service rated number one in customer satisfaction by jd power. free at fubo tv.com.