>> good morning and welcome to daybreak australia. >> we are counting down to the major market opens in asia. >> this top stories the sour. u.s. stocks climbed the most since june as bond default with the new economic data fueling that major banks will pause rate hikes. >> etf tracking the nasdaq 100. >> wagner chief yevgeny prigozhin confirmed on a jet killing everybody on board. >> look at the gains after we saw u.s. stocks rising in the new york session. bonds also gaining ground.

the s&p 500 is seeing its best day since june. tech lead in the market higher ahead of them videos earnings. -- nvidia's earnings. you can seeing the continual pressure in the asian session. we are talking july lows at this point. we are watching for any potential rebound in global supply. the bloomberg dollar index actually felt today. treasury yields stone. -- down. to give your u.s. yield sink below 5% -- two year u.s. yields sank below 5%. the deeper contraction of private sector activity in the euro area did not help. it is all about the after hours session because you can see the

gains on nasdaq 100 futures. in video surging more than 7%. another strong quarterly revenue forecast fueled for surging demand for its ai processors and optimism about the broader ai sector. let's get more from ed ludlow. the expectations were pretty high, which is why a lot of people were concerned that nvidia would not be able to match them. >> the results are so stunning. the story was demand for ai relevant chips. data sales that more than $10.3 billion. the estimate was just below $8 billion. sales of up to $16 billion, way

above the average analyst estimate which was $12.5 billion. the ai story will continue to have momentum. the cfo called the tremendous and broad-based ai demand. there were so many questions. can you quantified your confidence? how do you know the hike will keep spending? there is a trillion dollars in data center capacity globally, but only a fraction have committed to cap exit the stage to invest in it. >> one of the reasons investors love nvidia so much is because it outsources the actual

production. does that mean there is supply flexibility concerns? >> the supply picture is a very interesting one. the narrative is that supply will improve every quarter and suppliers have really stepped up. the equation for data centers specifically at the ai context is there is intense demand right now. what they have seen from manufacturers is respond to that directly. in the fiscal third quarter, if you go to other segments like gaming, what they had done was delay shipments. fast-forward to the current quarter, there was a slight change in language, which the inventories have normalized. is it that they have normalized because nvidia is shipping out to meet demand only, or is the supply slightly decreasing?

that is always a question with the chip industry. >> ed ludlow with the latest on nvidia. we have more earnings coming through. aia results passing through. 2.03 billion dollars for the first half. this is an investor darling when it comes to the stock. we had been expecting that jump with the exit of hong kong and china from that pandemic restrictions. looking at the new business

value as well as looking at the impact of quarantine free travel resuming come of the suitors starting to come through. the sale of insurance products ramping up. net income at 2.5 billion, operating profit at 3.2 7 billion. in the united states we saw business activity expanding in early august at the weakest pace in six months. fed chair jerome powell is expected to map out the final steps of the central banks campaign to tame inflation on friday at jackson hole. michael mckee is there. if you take a look at look at

the data, manufacturing continuing to shrink. what does it tell us about the state of the economy, where it is headed and how the fed will be interpreting that? >> it is an interesting situation because we have had the fed raising rates for almost two years. they have been expecting the economy to slow down. long local variable lags they talk about affecting the economy. the fact that things are slowing is what they are looking for. the question is do they go further? that is the critical question and the fed does not know. that gets back to the question of do they raise rates again in september or november? at this point, the weight of the data will suggest they should hold off. however we still have another jobs report and two more inflation reports before the next fed meeting in september.

jay powell said they are on track, but they are not done yet and they will keep watching the data. >> how important is it for the fed to keep an eye on other factors? >> neither one of them is a major factor for the fed? they watch the markets to make sure that trades clear. there's not much more that they can do about it they're not going to worry too much about treasury volatility because the market is going to do what the market is going to do. it is hard to say why yields are moving the way they are right now. as far as the slow in china there is not that much trade between the united states and china that it makes a huge amount of difference to the overall economy. it is important to watch the feedback effects. there are impacts on individual companies but it will not deter the fed one way or another.

unless the rest of the world falls into recession for some reason because of china. haidi: we are watching broader markets right now. what are you seeing? annabelle: a lot of central bankers will be watching jackson hole closely. we have the bank of korea do with the decision later today. the line in blue is the bank of korea benchmark rate. say not hold here versus what you see with the fed. the yield gap is now the biggest on record. are there any changes expected today? all of the economists in our survey say we will see rates saying as they are for korea.

what could change is the effect that the yield gap is having on the korean won. we have seen it under pressure this month. the korean won sensitive to what is going on in china. it is the worst performing currency in asia so far this month. and might force the bank of korea to for some time within the next six months. a decision we will be watching very closely. haidi: annabelle with a look ahead at one of the key events we are watching i had. still in the think of earnings. we are getting more details when it comes to the outlook of aia. we will speak exclusively with

us cfo, garth jones. this is bloomberg. ♪

>> the way to make money in the next couple of decades is going to be in equities, but i

personally am overweighted in private equity because i think private equity owners are more aggressive about addressing strategic or human shortcomings in businesses. shery: he thinks the fed about aggressive tightening means of the golden age of investing is over. our next guest set the major catalyst this week is fed chair jay powell's upcoming speech at jackson hole. let's welcome r. burns mckinney from nfj investment group. we are headed to jackson hole and we have seen this incredible volatility in the treasury market. at the same time, weaker than expected economic data. what will you be watching out for out of jackson hole to give you an idea of where the fed is

tilting? >> one thing that is unique about this speech is typically the two main factors that powell has been focused on has been what inflation figures and jobs numbers have been. this one is different because we think he will be keeping an eye on what the 10-year treasury yield's have been doing. we have had a really rapid rise in the bond yields and what powell is thinking is the last time you saw bond yields jump up to this degree, something broke. in that case it was the regional banks. we would not be surprised that

he may actually try to talk more devilishly -- divishly. we do not execoeep the door open that the ultimate goal is not having the stond go policy of the 1970's. shery: we also have nvidia results and this excitement about artificial intelligence. when it comes to the broader trajectory of the markets, what is more important? what central banks are doing or the ai rally? >> if you would have asked me a

couple of weeks ago, i would have said jackson hole. but i think the case can be made this week that nvidia figures are more impactful with respect to investor sentiment. they have become a bellwether for pretty much any type of equity that is leaning toward ai as a fundamental driver. that is probably just as far as what we expect the u.s. equities to do tomorrow, just being driven by the improved investor sentiment. considering jay powell will probably not try to reveal his

hand too much, that the nvidia numbers are a bigger driver. haidi: if you take a look forward earnings, does it tell us a lot of the good news may already be price then? -- priced in? >> we do not expect surprises, but there is probably more room or surprises to the downside as far as expectations go. over the next 12 months of the s&p, in the next 12 months you can get the inflation figure down to around 2%, that would suggest 19 times trailing earnings. which would put a fair value of

the s&p even 12 months from now to around --. the catch is we are there right now so you look at that, there is not a lot of room for upside in regard to multiple expansion. if they're going to be surprises a might be, you still see margin pressure on a lot of companies. those could pressure corporate earnings and cause a surprise to the downside. we are not recommend investors sell stocks, but a lot of the good news is priced in. the bond markets might be more pessimistic about the overall economic situation. haidi: a couple of your top picks, you mentioned energy, and commodities, two of your top

picks are oil and gas and energy related. >> one that jumps out to us is considering the fact that oil inventory is tighter than it typically would be this time of year, it is pioneer resources that is trading at about 11 times earnings. . it is attractive on valuation. they have a nice dividend yield. if you look over last year, they have been by back a bunch of shares, and you have a total shareholder yield of 20%. last year, they returned 20% of their market cap to shareholders in the form of cash. they have been very shareholder friendly.

they operated a couple of key basins. they have been drilling a lot of wells and can do it more cheaply than others. management has been focused on returns. as a result, they have been getting more efficient. they have still managed to grow production. that certainly jumps out at us as a way of playing the possible energy tightness. haidi: great to have you with us. r. burns mckinney from nfj investment group. south32 coming through with numbers that by a large have missed estimates. we are seeing some numbers coming through. 900 60 million underlying

profit, slightly short of expectations. the net loss at 173 million. we know there have been some recent upgrades, perhaps this is a stock that is oversold. a lot of these concerns have been because of the cuts to production targets across multiple operations. copper volumes as well have been underwhelming. more to come here on daybreak australia. this is bloomberg. ♪ you don't have to worry about things like changing tax rates or filing returns. avalarahhh

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haidi: russian aviation

authorities have confirmed that wagner to yevgeny prigozhin was aboard a private jet that crashed. it killed everybody on board. the video is quite graphic. this unverified video is being shown. it raise suspicions that prigozhin had been deliberately killed. in a few hours, republican presidential contender as well face off in the first debate of the primary season, minus the front row number donald trump -- front runner donald trump. what is expected around this debate, especially without trump on stage? >> it will be interesting. we will have the elephant in the

room if you will. donald trump will be airing a video he recorded with former fox news host five minutes before the debate kicks off in milwaukee. he will not be on the stage but will be making some comments. eight people will be on the stage, including his former vice president and the so-called front runner, florida governor ron desantis. people will be watching the ron desantis and he is expected to get a lot of the criticism from others on the stage given that he is the second front runner. haidi: it looks like they are likely to get a foreign policy question right off. who do you think will be best prepared? >> that is expected.

the yevgeny prigozhin news just broke this afternoon. we think nikki haley who was the former u.n. ambassador will be -- she certainly has the foreign policy chops. we have others like senator tim scott who is a u.s. senator and used to dealing with foreign policy matters in the senate. they certainly will be asked. haidi: we had more ahead. this is bloomberg. ♪

shery: nvidia continuing to

rally, up more than 6%. another strong quarterly revenue forecast fueled by searching demand for its ai processors. 20% above wall street productions. our next guest is keeping his buy recommendation on nvidia. joining us now is angelo zino from cfra research. great to have you with us. you had your 12 month target at around $500 before going into this earnings result. will you have to upgrade that? >> all indications here is that demand is stronger than anticipated. you alluded to the data center number out there, more than doubling sequentially.

you look at it relative to expectations, the guidance for the october quarter implies significant growth within the data center business. i think some of the fear in terms of supply constraints probably overblown and we expect it to continue to improve through 2024. that should bode well for improving demand for nvidia cpu 's. shery: the data center business seems to continue going strong. what is your outlook on the sector? >> as far as the data center business, 76% of their revenue, and now gaming is less than 20% of its revenue. this used to be a predominantly

gaming driven company. when we start thinking about that, you are de-risking a lot of the consumer exposure out there. you look at the accelerator business out there, we think it will grow north of 40% over the next three or five years and nvidia will continue to take an increasing share of the market over the next couple of years. as far as the data centers, we think it looks promising, even following the monster results we had tonight. shery: this was such a decisive

beat, really seem as one of the few growth plays at the moment. what are the downside risks for the company? >> one was alluded to by the company and that is the china exposure out there. the regulatory uncertainty in that segment of the market. in the near term, there is significant demand out there which would probably be able to offset regulatory uncertainty. but it is potentially a long-term risk if they are prevented from selling into the market. eventually you will see supply and demand -- you have to wonder

does a post downside risk over time? i think investors have to acknowledge the fact that nvidia is a high-growth company in a very cyclical market in terms of semiconductors. they're going to be down cycles at times. we tell investors they should be looking through those actual downdrafts given the revenue trajectory we see. haidi: the nest that 500 is on track for its worst month this year. -- the nasdaq is on track for its worth month this year. >> i think invalidates the ai narrative. -- it validates the ai narrative.

there were key winners on the side of things. some of the companies are clearly the biggest names within the semiconductor market. when you start thinking of broader tech specifically, a number of these cloud companies will want a return on their investment, and we see significant upside in terms of the ai revenue opportunity. a number of these software companies will be trailing in terms of the ai revenue potential, but we do think the investments being made today where nvidia is reaping the benefits well eventually trickle

down across other aspects of the tech industry, specifically microsoft. shery: as we continue to see nvidia gleason products, what software revenue potential is there? >> we would love to get an exact number in terms of the revenue potential for software for nvidia. nvidia would not break out the actual revenue. but one thing it continues to stress is that they have had a massive ecosystem out there and what they are doing on software is driving additional demand, both on the software side as well as on the hardware side.

it is impossible to really know what the actual revenue potential is on the software side of things, but we think it is a major contributor to this company. haidi: great to have you with us, angelo zino from cfra research. we have results coming through from qantas. more or less meeting expectations when it comes to the profit. when it comes to revenue and other income, 19.8 2 billion aussie dollars. a little bit stronger expectation. a lot of the focus when it comes to these earnings will be on passage -- passenger volume. let's get more with paul allen. what were the key takeaways? >> the key takeaways are so

passing through right now. you covered some of the key ones. maybe could have hoped for better after the blowout first half when we got a huge return. the momentum continue for qantas, but no dividends. qantas planning a buyback of 500 million as well. qantas did purchase already 161 million worth of shares. the bipap expected to continue. revenue 19.8 billion. pretty much in line with estimates. if you take a look at shares over the past year, up 35% year to date. this will be the last set of numbers for the ceo who steps

down in november. the cfo will take over. shery: contest profits seem to be gaining the attention of politicians. why? >> alan joyce will be busy next week. he heads to the senate where he will appear in front of the cost-of-living inquirer -- inquiry. he will be quizzed on things like high fares. and why they are so high. a few years ago, they were getting bailouts from the government. now they are doing extremely well and there are questions over that. doing a little bit too well it seems. there was also the question overflight credit schemes. that is the question of a class action lawsuit.

competitors are also accusing qantas of anticompetitive tactics, which qantas denies this well. potentially a tough day on monday at the center. haidi: paul allen there with the latest on the contest numbers. we have much more to come here on daybreak australia. this is bloomberg. ♪ reported taking healthier actions. because they know health isn't just a future state. health happens now. start your dna-powered health journey today with personalized insights from 23andme.

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haidi: we are watching boeing as one of the movers, downside of 3% for the aircraft maker. he gave an announcement when it comes to a manufacturing issue, identifying the quality issue arising from structural assembly work on the aircraft about pressure bulkhead. saying it is not an immediate threat, but the technical analysis has been completed and they know what the required fix is. they say they are continuing to deliver 737s that are not affected and inspections will be underway to see how many airplanes are affected.

it will not affect near-term deliveries and it is not an immediate safety issue. separately, we are seeing that want to stare -- contest has placed an order as well. we are seeing the narrative for boeing in this part of the session down by 3.3%. aia group came through with their numbers earlier, posting a jump for new business. new business value rising 32% in the first half, beating analyst estimates. joining us now is garth brian jones from aia group. congratulations on those numbers.

what stood out to you and what do you see as being the outlook? how much more improvement do we see? >> it is great to see you both. very happy to announce these excellent results for the first half of 2023. we are clearly very pleased with the growth across our businesses across china, hong kong and our indian business. multiple engines of growth. after the omicron wave subsided in china, we had 29% in the china business from february -june. we had a surge in the china visitor business that has continued to grow into the second quarter. we have seen stronger results in that business. hong kong business more than doubled in the first half.

asian business grew by 12%. good growth there. our ndf business grew by 40%. highlights right across the portfolio. shery: what are you targeting when it comes to reasonable growth targets, also what you see as future value of new business? can you give us some context around that? >> we focus on selling protection and long-term savings for our customers and those needs transcend economic cycles. we focus on professionalism and our distribution. we focus on selling high-quality products through our quality agency force and with that we see tremendous growth potential. we are in the right place, the

asian markets we are in our the growth drivers of the insurance industry globally. we have the growing middle class. we are very optimistic about the future. shery: let's talk a little bit about the product mix of aia. you have shifted toward more long-term savings products. when you are looking at the macro picture and the rate differentials between the china and u.s. grown, how is it affecting your business? >> we focus i am protection and long-term savings products. we saw 29 percent growth in china for february-june. of growth of 7% in the protection business. in hong kong, the majority of products we sell are protection products, we saw growth in other products also.

the growth in the long-term savings products has been very strong. as people look at their health and retirement needs, we see people see aia as a place to come for their health solutions and long-term savings solutions. we see growth in both areas. shery: when it comes to opportunities, we see thailand is your largest asian business. we have seen the return of tourism there. how do you see the outlook for a business in thailand, especially now that we have a new government and prime minister? >> we are very optimistic about thailand. we have been there a long time. we have seen ups and downs. we are the number one company in thailand. we have the number one market share.

we have seen growth of 20% in new business in the first half. we spent a lot of time professionalizing the agency force. we have seen strong growth from our partnership with the bank, so we have multiple engines by distribution channels. we are very optimistic. haidi: we are seeing the reopening bump when it comes to china and hong kong. do you expect that to be challenged by the broader macro economic outlook for china? obviously, the economy is not doing well. in hong kong, lots of indicators to the downside. do you see those factors playing in even as you say you defy broader macroeconomic trends? >> we stopped our hong kong

domestic business grow double digits in the first half. as well as the mainland china visitor business. we have seen those continued to grow into july and august. our business is focused on the middle class and affluence segment. that segment continues to want to have private insurance for health care needs and critical illness needs. it is a segment that wants to save for the future. we see our business as filling a need that transcends the economic cycles. the key drivers are still intact. the long-term is very bright for our business. shery: you mentioned india when talking about the bright spots. you just returned from a trip there. why yes and yes exciting to you and how does that compare to

what you see in china? >> india is a very exciting business for us. it grew by 48% in the first half and we have a tremendous business there. the professional agency business grew by 80%. it is a nationwide business. we have a fantastic partner. he has a strong broker distribution. we have an excellent management team. we saw the gdp growth is very strong. i was there two weeks ago. everybody is trying to grow the industry there and the prospects are good. it is a huge economy. they have now joined the exclusive club of people who have landed on the moon. a very exciting time for india. haidi: with climate change and

wild weather and global instability, does it change the calculus for insurance and reinsurance when you are thinking about products and how to deal with that in the future? >> our purpose is to help people live healthier and longer lives. not only through our products and services, but also in how we operate as a business, both in how we deal with the community, we provide a valuable service. but also in terms of our investment portfolio. we have billions of dollars under assets. we invest in the best way possible. we are an esg leader. we devastated from coal -- we divested from coal early. i myself am part of the advisory

council advising on standards across the globe. we are very active in the esg space. we see ourselves as an esg leader. shery: garth jones from aia group, bright to have you back. they saw a jump in new business. plenty more ahead. this is bloomberg. ♪

shery: take a look at how currencies are trading. a little bit of pressure, reversing gains as we saw treasury yields losing ground. the japanese yen has seen strength on the back of the weakness. we are seeing strength for the last couple of sessions after weakening to the 146 level earlier in the week. investors awaiting what chair powell will say at jackson hole later this week. japan exchange group says that again has become too weak and its benefits for equities are diminishing. he has told bloomberg not to worry as he sees other factors boost in stocks. >> geopolitical or macro reasons

the japanese economy is recovering. reallocating of their investment from china to other places. also, japanese inflationary pressure is coming. haidi: you can get more from our exclusive on daybreak asia's japan ahead monday, august 28. daybreak asia as next as we continue to pass through a number of these earnings. nvidia will have a huge impact on tech trading today. ♪

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