♪ shery: hello and welcome to daybreak asia coming down to asia's major market opens. haidi: australia open for trade. israel and hamas trade lame after a deadly explosion at a gaza hospital. president biden's summit is canceled. asian stocks are set for mild gains and traders are awaiting third-quarter gdp and monthly activity read nvidia warns of tighter u.s. restrictions on ship sales to china. let's get you to the start of trading in australia as sydney trade comes online. again of 4/10 of 1%,

particularly watching some of these minerals names. the haven deal to buy coal from mines operated by bhp, two names to watch as they come online. modest upside in the first few minutes of trading. watching the aussie dollar which saw a bump up when it comes to hawkish buyers. the low tolerance, inflation returning to targets. michelle bullock speaking at a panel saying the housing market has surprised her amid the inflation expectations that the global economic paradigm that has not changed since the pandemic and the rba is trying to improve communications. we will watch for what the new rba governor says. we saw the picture being reflected when it comes to new zealand bonds.

kiwi stocks down 1/10 of 1%, watching a gap in expectations for the yen. close to the 150 hurdle but a real disparity as we got forecast on the yen. analysts are the most divided on the currency since 2016, nikkei futures looking soft. news flow, the data docket by china, futures looking flat has we expect modest appreciation or traction when it comes to domestic activity indicators. shery: watching data in the u.s. because they keep surprising to the upside. a large jump in retail sales, treasury yields were soaring today so were talking about a two year yield are the highest level in 17 years and of course stocks struggled for direction, s&p 500 finishing unchanged. we were digesting earnings from

banks. a mixed picture with goldman sachs saying a huge drop in profit but it was all about treasury yields. the slump continuing and what that means for the fed as markets are pricing in a potentially another rate hike read we continue to watch geopolitical tensions in the middle east as well. oil was really unchanged in today's new york session and in the asian regular session we are seeing again above $80 a barrel as we are seeing potentially israel's ground incursion anytime now as we had heard reports of the hospital explosion in gaza as well. haidi: yes and let's get more on that. gaza officials say hundreds of palestinians were killed in a hospital explosion that they blamed on israeli airstrikes. an accusation israel has denied.

president biden's proposed meeting with arab leaders has been canceled. let's get more from our national security reporter anna edgerton. what kind of ripple effects are receiving the explosion? we know that president biden was briefed that there has been blame being treated by both sides. >> still trying to figure out what was behind the explosion. hundreds of people are victims of this attack regardless of which side was to blame and we will see the ripple effects as you said. already seeing some of the summit being canceled. it will be hard for biden. the first had an attack by hamas and israel. very strong, israel gave strong support and now as the response continues into this military campaign within gaza, joe biden will be tied to what israel

does, so he has a lot of responsibility for israel's actions and we're going to see him bring arguments to israeli leadership in his trip to israel. shery: what do we know about what's happening on the ground because we hearing about a court or for civilians to get out. what is the latest and how bad is the humanitarian crisis? >> it is a dire situation and hamas has always been integrated into the civilian population in this area so it is hard when israel says they want to go in and crush hamas without civilian casualties. as the responses calibrated we will see how it plays out in the consequent is for civilians which we are already seeing are very dire. what israel is going to have to weigh is if their ultimate goal is safety for israelis. if they kill every hamas leader

every civilian casualty is going to encourage the next generation of people to take a stronger stance in resisting israel. it's a tricky situation in how to protect civilian lives well pursuing a military campaign. haidi: how are we seeing this playing out when it comes to geopolitics? >> great question. we've seen vladimir putin and xi jinping reach out to arab leaders and try to offer support in trying to resolve this crisis. putin reached out to leaders in israel but were going to see how the conflict plays into current laws that we are seeing that have become defined after russia's invasion of ukraine. as the conflict plays out, now the conflict and tensions between western democracies in china and allies, this will play

into the heightened geopolitical tension that we see around the world. shery: national security reporter anna edgerton there. we are following other developments around the world as well with president biden considering a request of $100 million. sources say it would cover defense assistance for israel and ukraine and security aid to nations in the indo pacific including taiwan. aid for israel enjoys bipartisan support but ukraine has struggled to earn the favor of republicans. qatar is working with the u.s. to secure the release of 200 hostages taken by hamas. sources told bloomberg they have been negotiating with a militant group and working to prevent the war from spilling over with iran and hezbollah. a journalist says china jailed her for sharing an official

briefing document before the government released it. she was freed after almost three years of detention. the interview with sky news, she said she passed information to others before she went on the air for a shows she was hosting and it is unknown what document she shared with whom. chinese president xi jinping says the road initiative has a golden decade ahead. beijing is looking to reinvigorate xi jinping's flagship project 10 years after it was launched. stephen engle joins us now from beijing. what is the latest? stephen: today is the big day where we will get the opening address from xi jinping and we hear as well the guest of honor, vladimir putin has been invited to give a speech. glad to see what those gentlemen have to say. at the grand hall here up at the

olympic green where we are now and where the ceo conference was held yesterday, we had all the buses had off to the great hall and people adjacent to tiananmen square where the main celebrations and speeches will be had. xi jinping and vladimir putin have met up and they will both be having bilateral meetings today. we are hearing vladimir putin will be at meetings with the leaders of thailand, mongolia, vietnam and perhaps some others as he is the center guest of this initiative, given the status that he has as a wanted war criminal by the international criminal court's. we will have to see if these two gentlemen -- and on that partnership that they struck in february of 2022 just weeks before vladimir putin launched his war in ukraine.

on the belt and road initiative yes, they are touting it as another golden decade ahead but the average deals through the pandemic have dwindled. one estimate put the average deal in investment as 48% of what it was in the peak of 2018. at the ceo conference there were a number of delegates, 300 delegates. a number of deals in ai, agriculture, transportation, clean energy, biofarma, financial services but guess what? no dollar figure was given to the number of deals in the kind of deals that were signed. both yesterday and there will be more signs today. again, we don't really have the data to say that it is entering into another golden era but it is his signature project so he will make it succeed however he can.

may be smaller and greener but it will be going forward. haidi: chief north asian correspondent stephen engle on the ground in beijing. still ahead, the latest of the third in beijing. sharing the outlook for the chinese economy later this hour plus nvidia and product development and washington's move to ramp up its chinese chip locks. this is bloomberg. ♪ thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change?

ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

♪ haidi: nvidia warned that tighter u.s. rules on ship exports could hinder product development amidst other difficulties. jennifer is a chief economics analyst. what are hearing from nvidia and a bigger picture of how impactful these tweaks to policy could be, how does that play out? >> thank you for having me. yes, earlier today the biden administration released updated restrictions on who has access to conductors including steps to address chips that fell below the threshold last fall. in particular the chip nvidia developed after the restrictions were released.

it is now looking like the new restrictions are going to affect the ability to move the tips -- chips which had been popular in the chinese market. a very large and important one for many countries in the supply chain. shery: how much of a difference will it make for china and high-tech given that we have seen 5g capabilities for phones already? >> looks like the initial restrictions were developed before they rolled out the new smartphone and my expectation is that additional controls as the u.s. department of commerce continues the investigation into how they have been able to develop the chip. these rules will be aimed at other potential workarounds or loopholes china has embraced including leveraging more

powerful chips in combination to achieve the same sort of power as these chips. in using other components to try to force them into manufacturing more cutting edge chips. haidi: you would imagine this is one of the nonnegotiable's when it comes to the relationship. do we expect it to potentially threaten the president biden meeting i should say? anna: we will be hearing as soon as beijing makes up in a few hours what their reaction will be but i would anticipate based on the reaction to the interim rules which was rather restrained and the fact that xi jinping met with president biden one month later in the indonesia that any potential meeting on the sidelines of a pet could move forward though u.s. officials will hear frustration from china which views the restrictions as going beyond the

narrow national security agreement and trying to contain china's economic growth. shery: jennifer welsh there and you can get more on this story ound up of the headlines you need to get your day going in today's addition of daybreak read terminal subscribers go to dayb also available mobley in the bloomberg anywhere app. customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪ ♪ is it possible to fall in love with your home... ...before you even step inside?

♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines.

♪ >> i have never felt more optimistic about the firm and our strategy has never been more clear. regularly action and you politics remain fine and i feel, about our opportunities. shery: david solomon speaking on

the third quarter earnings call. we have bank of america's results. su keenan joins us with the results and of course david solomon was speaking or is fully to defend the numbers. a huge slump in profit, what happened? su: it's the eighth straight quarterly decline and david solomon has been under pressure for the performance of the stock and the declines in profit. he is trying to revamp his strategy, before ray into consumer banking, selling off different units and asking her patients says he tries to turn things around. the big hits resulted from real estate, a continued dealmaking slump hitting a lot of banks. property investments drove a loss in the equity book and an additional 358 million in impairments contribute into a 33% drop in profit.

third quarter net income coming in at 2.6 billion. one bright spot was trading revenue, flat, beating expectations of a 13% drop, that softened the blow. ceo david saying the firm continues to be optimistic as you just heard about the goal of returning meaningfully higher returns to shareholders. one of the things the bank is doing is trying to take the focus off the ceo who has had certainly a lot of disgruntled feelings from different people within the bank because of its performance. the return of 7.1% is below the target in a key source of revenue. goldman-s share price is down more than 25% since the record high in 2021 but it is on track for a second straight annual decline. again, solomon also received a nod of support from the board's

lead director last month and one of the things they are doing is earmarking 690 million for pay and benefits to quell discontent. haidi: bank of america trading was a bright spot. su: it was the best performance they've had in a decade. results from both equity and fixed income trading as well as the nii, the key source of income not just for bank of america but for all of the banks. stock trading revenue was up 10% to a record 1.7 billion and a quarter that saw dramatic market swings. the net income surge again was 10% to 7.8 billion or $.90 a share beating estimates. the ceo said if they add clients and account all lines of business talking about a relatively strong consumer.

he said we do this in a healthy but slowing economy that saw spending ahead of last year but continuing to slow. the slowing of consumer spending and credit quality is a theme from all the different banks as of last week going into this week. the firm's loan balance rose to just over one trillion at the end of the third quarter up 1.6% from one year earlier and again, there is a lot a focus on investment banking at bank of america beating expectations which is a lot to do with a bigger trend we are seeing, not so much strong fees but year-over-year less than expected declines. in terms of the earnings calendar, morgan stanley will report tomorrow and we will have the latest on that. haidi: su keenan there. and bank of america ceo ron warner has said they have slowed

consumer spending. he says the question is what comes next. >> what are consumers doing with money in their accounts? we will have $4 trillion spent by consumers on debit and credit card payments. money out of atm's and all forms of spending. the 4 trillion went up 9% year to date for the first four or five months of the year. still strong at 8%, it's down to 45% in the year to date in the month of september and october consistent with that. the consumer has been slowing down spending because interest rates take a toll. as interest rates went up, floating credit cards or new car purchases, rates are higher. there are mortgages getting done, those rates are higher. that slows down the student

loans and ability to spend so you have to ship spending around. and frankly they are looking ahead and saying i hear things are going to be bouncing around, i will spend less. the third thing is they bought the goods they bought during covid. they bought the new couch and stuff they needed to buy. they don't need another one now and they're back in the core activity. it is slow by half and the spending rate year-over-year growth is consistent with 2% inflation and below 2% gdp growth. is that rate of 4% that we had in 17, 18, 19 as the economy came into equilibrium. the fed is betting on the american consumer and slowing down on the question is what happens next, you cannot predict but this is a four trillion dollar base. it's hard to move around so once it slows the level will not kick back up. >> how much of a vantage point

do you have into the consumer because there is a lot of talk about excess savings and checks being written to individuals. give us a sense of how much has been drawn down and the second question is to what extent is a real wage increase replacing some of that? >> inflation is tough on medium income households. a higher part of goods are what they buy. gas price is a big number and that is the pressure you are seeing. that is one issue. if you look at it in an aggregate sense you see the consumer is healthy. if you look at the accounts, the medium income 75000 and under, before the pandemic there are still multiples but they are trickling down. shery: bank of america ceo brian speaking to david westin. taking a look at how currencies are trading, we have seen the

dollar supported by rising yields, swaps pricing more than 60% on the odds that the fed will raise rates in january and on the other cited the trade we've seen pressure for the japanese yen holding close to the 150 level. we have seen pressure for the kiwi dollar holding steady after we saw inflation numbers slowing to a two-year low. and a lot of volatility on the kiwi dollar because we saw it jump after the weekend selections. the aussie is not doing much after gaining for a second session. we saw a hawkish bias you're probably not easily persuaded to switch mobile providers for your business. but what if we told you it's possible that comcast business mobile can save you up to 75% a year on your wireless bill versus the big three carriers? have we piqued your interest? you can get two unlimited lines for just $30 each a month. there are no term contracts or line activation fees. and you can bring your own device. oh, and all on the most reliable

5g mobile network nationwide. wireless that works for you. it's not just possible.

haidi: we have the west bank numbers leading for september we are getting an increase, 0.07%

higher is the reading we are getting, reversing the contraction on the headline number we had in. the leading gauges and indicator of growth for the next six to nine months, with some components like industrial production commodities, prices inflation expectations, some of those components there. we have been watching, when it comes to the rba, speaking in sydney, reiterating the lack of tolerance. a low tolerance for a further flare up in inflation, seeing strength in the aussie dollar and building some of these expectations. the rba still has further to go despite that rate setting of 4.1%. shery: take a look at how the markets are trading in the asx 200 gaining ground. we are talking about health and industrials leading the gains. energy sector also up right now. given that we are seeing oil

rebounding in the asian session, close to the $88 a barrel level. kiwi stocks under pressure, giving up most of monday's gains as we are seeing nikkei futures pointing higher. perhaps extending the gains, from what was in the previous session. we are week japanese yen. haidi: we are awaiting the domestic gdp numbers out of china, coming out a time when we have seen the economic slowdown play into diminishing leverage when it comes to the diplomatic coalition in beijing. the strategy has already evolved and peaked in terms of large-scale projects, happening prior to the pandemic. the partner joins us from our hong kong studio. it's actually compelling to kind of connect the two, the correlation between the economic slowdown, the structure,

chickens coming home to roost for the economy china, and what it means for some of these large-scale global initiatives. you say that the transition was already happening before covid. >> it was. the dri is evolving fast. there was a finite number of large-scale projects. our model, several years ago, predicted the slowdown in part because there are a limited of appetites for railway projects or dam projects in ethiopia. the strategy was shifting to more projects, but higher quality projects. what does that mean? it's water projects, power transmission projects, industrial park project. all of these are still valuable, what they mean is you will not get the big ticket types of spending that used to grab media headlines. haidi: so, ben, what is a better

way to categorize this? we no large-scale infrastructure investment is still the biggest way to get headline growth numbers up. we're expecting more of that within china. from a diplomatic aspect, are the relationships becoming more nuanced? >> they are becoming more nuanced. the bri is different today than what it was 10 years ago. it will be different 10 years from now. what you are seeing is much greater private-sector activity across a broad range of. sectorsi -- of sectors. i was at the arab-china meet up in june. most participants were from the private sector across automotive's, artificial intelligence, gaming, aviation. they are all looking to do what our viable -- our viable, profitable deals. that reshapes the way the

initiative is engaging with countries and will have an impact at a more policy level. we see that is a welcome development. it implies over the next 10 years, the initiative should shift to a more sustainable and profitable track. shery: what about the issue of debt and the criticism china has been receiving about loosing this debt trap because of these projects. how can we expect that narrative to shift? >> so there are debt concerns, particularly post-pandemic. many governments, especially low income governments spend heavily to protect their populations during the pandemic. at same time, export growth has disappointed, many of these projects are not generating the returns we expected. again, we are looking at projects that were conceived nd even built -- and even built over the last 10 years. they look different over the next 10 years. we have to be careful about how we think about those projects.

shery: china's private company seems to be becoming more active lay some of those projects. do you expect them to overtake and offset some of those initiatives that have traditionally been led by policy banks and state owned enterprises? >> yes, i expect the private sector to account for a much larger shift of activity whether they overtake is less clear. the private sector will not be building railway projects or dam projects. with the private sector that is active that was in southeast asia, a transition happening pre-pandemic. china's belt and road initiative was pivoting towards markets where china has much stronger supply-chain linkages, such as indonesia, malaysia, vietnam. china's exports are component parts to these markets. it has grown 400% over the last

five years and for good reason. we're seeing a rebalancing in global supply chains. china's private manufacturers are investing into these markets. state owned companies are realizing the opportunities to build ports or industrial parks to support this type of activity makes a lot more sense, and perhaps some of the previous projects did in the past decades. haidi: global and regional trade relationships, alliances, supply chain post-pandemic, these maps are being rapidly redrawn, right? i get the feeling we are not at the end of that yet. how is china positioning in this new world? are we seeing new alliances? new connections that are being made and across which sectors? >> yes. so china definitely is repositioning. allowed -- large -- a large number of chinese manufacturers are investing. in southeast asia, even looking at the middle east, speaking with a chinese battery

manufacturer, he had blessed open a plant in saudi arabia, with expectations that he would export into europe. the supply chain maps are evolving again rapidly. and china's economic relations with these countries are beginning to tighten. it's the largest partner for over half of asia middle east economies. that matters. it has implications for the usage of the rmb, retrade settlements. we don't think the dollar will be displaced anytime. the data suggested that the number of trades being settled in the rmb have been rising, albeit from a low base. shery: ben, thank you so much for joining us, this partner at oliver weinman. let's stay with trying -- china. we have numbers out of the country. th expectation is an economic growth last quartere under shot beijing's annual target, as the

property sector subdued demand and weighed on activity. let's get to charlie. what sort of numbers are we expecting to see, what will that mean for the around 5% target we got for this year? >> right. the national bureau of stats is releasing the data this morning at 10:00. it should not be doom and gloom for the economy. the numbers will not look pretty. the market consensus, as mentioned, is for the economy to grow. that's way below the 5% target set for the full year. that is the main reason for that. the weakening property sector are and also is subdued the consumer demand, that is why the imf recently cut its growth forecast with china for this year to 5% from 5.2. for next year from 4.2% to 5.5%.

just remember the consumer prices for cpi it was zero. there was no inflation in china the moment. the property sector there remains the single biggest problem to the economy. the sector accounts for anywhere between 20 to 25%. currently developers are reading from a worsening credit crisis which is on the brink of becoming -- to signal public defaults in the market. exports are not doing well either. last week, to ask ago the drop in china's exports moderate a little bit target exports to

major markets from the u.s. to europe continue to fall. haidi: there has been hundreds of support measures. do expect more stimulus going into the end of the year? >> people are expecting more stimulus. in the fourth quarter. there is market talk of a plan to increase budget deficit by issuing more debt to fund infrastructure spending. we heard people from people familiar last week that they are considering issuing about one trillion yuan of additional government state bonds to fund those projects. besides that, authorities are considering to show up. by launching a stabilization fund.

and also, there is still expectation for further cuts in interest rates. having said that, confidence is key. china has done a lot to help prop the economy from monetary to fiscal policy. the confidence from corporate and household is on strong as reflected from the corporate borrowing. haidi: we count down to those, the latest data out of china. coming up the former world bank president says the current price of oil is not sustainable. that conversation with him is next. this is bloomberg. ♪

at cdw, we get the importance of clear communication. and when your teams are spread out, that's not always easy. our experts can help by implementing poly audio and video solutions to keep you connected. from headsets to collaboration tools, poly solutions offer simple setup and eliminate distracting background noise, so the people you're talking to only hear you. to collaborate with quality, trust poly

and it orchestration by cdw. people who get it. when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh shery: former world bank president says the global economy needs cheaper energy prices at a time of higher interest rates. in an interview with bloomberg he stressed the current prices of oil were not sustainable. >> we have to get to a spot where they can be lower interest rates. i think that requires a lot more downward pressure on prices from production. the whole question of the

variable is how much energy production is going to be done in order to make up for these deficits? you can't run the world economy on $85 a barrel oil, with a hostage crisis going on. that is not going to be sustainable. >> this is fascinating. there is the david mill past world bank president. we've got, sitting here, the bear stern david. the changes as you come out of the world bank into the private sector. again there have been david malpass fears for years. i don't see the politicians are bring with you. the rest of the capitals around the world, it is spend, spend, spend. how do we get here? >> the capitals are really resistant to making any changes in the growth of government. in each of the cities you named, though cities are booming, while the other countries are not doing nearly enough -- as well. it goes into the federal reserve

policy which i have complained about. look what we have done. we've gone from zero percentage interest rates, now at 5.5, now people are saying we may keep it at five. it is a policy for elites. think of how much money is made when you go to zero, you know, wall street and the financial markets get really rich on 0% rates. now as you adjust, they have locked in their low rates and everyone else's playing -- paying floating rates. it does not make any more sense to talk about high for long. high interest rates were long than it was for low for long. why did we go year after year with economists saying low for long? is great for the worldit wasn't. >>. this is critical you were discussing, you have been for a generation, the idea that this is a policy for elites, when we clear that, clear it was stability and control?

four do see jumped conditions -- or do you see jumped conditions? >> that has yet to be seen. it depends on where it settles out. if oil prices stay at 85, i think that ends up forcing the fed to keep the rates long, the wealthy are able to adjust to that, they preserve their capital. if you could get oil prices down, it would be an effective response to russia, to iran, to the power that is growing outside the u.s. that becomes a critical issue, just like it was. i hate to think back in history. in the reagan administration, in 81, 82, the critical turning point was oil was plunging as markets resolved. then you've got a favorable recovery. >> we seem to be further away from the reality you're putting forth as a likelihood of easy resolution to what we're dealing with. it seems like oil prices are on

the brink of breakout higher, as a result of the conflict in the middle east. hwo vulnerable is the -- how vulnerable is the global economy if it goes to $110 a barrel? >> it is a dangerous world. one problem is the u.s. will not be the one that feels the brunt of it. you see the resilience, the fiscal deficit can keep going on. they are planning to do it for another 10 years. the u.s. keeps going, training capital from the rest of the world. then you see these wars breaking out in one country after another. china and russia both know exactly how to what a wedge into that process. >> jp morgan was lights out at the panel on the barn worries. how fragile is em debt and em currencies stability right now? >> really fragile. you see currencies in nigeria, in egypt, and other countries under pressure.

argentina having its currency dive. then it becomes really important, to central banks realize their currencies stability has two be the guidepost for recovery? that was a learning experience i think from the asia crisis in 1998. the currencies were crashing, countries are doing terribly. one by one country stabilized after that. haidi: that was the former world bank president there. coming up next, australian house prices set for a rebound, despite the most aggressive tightening in decades. we took a look at what is behind it, next. this is bloomberg. ♪

what do you see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets

in pursuit of long-term returns... pgim. our investments shape tomorrow today. haidi: australian house prices are expecting to rebound this year, despite tighter monetary policy. our reporter joins us now with more on prices expected to climb 7.7% this year, 4.5% in 2024. we are in the midst of this extraordinary tightening cycle. does this add up? >> it is surprising. in fact, an hour ago, the rba governor was asked what is something that has surprise you? she mentioned the housing market. it has been unusual. we looked at the data from the 1990's and the past -- we have

had five times were highs for -- house prices have declined. the last four times the only reason they have gone back up is when the rba started the easing cycle. this is the first time prices are going back up. the rba is still saying that they will probably tighten further. also surprising that prices are back to record highs. so, this is happening when interest rates were at 11 year highs. shery: we are seeing the most aggressive tightening cycle in 30 years or so in australia. if the whole point of the central bank was to cool down the economy, what do the surging house prices mean for policymakers? >> this is definitely a worry for rba policymakers. and they mentioned it in the minutes of the november meeting, which was released yesterday. so, one of the concerns is that

there is going to be the wealth effect, where consumers are likely to feel wealthier and go out and spend. that will again dampen the rba's desire to bring inflation down. and the other thing is the rba is kind of thinking whether they -- their policies restrictive enough. if the housing market is any indication of their policy, and may be is not as restrictive to curb demand. these are the two things that the rv highlighted in the minutes yesterday -- rba highlighted in the minutes yesterday. it looks like if they have to do something, it will be on the macro front, because it is too early supply in the australian housing market that is driving up prices not really interest rates. haidi: this is another story that you have written. we have seen organized labor movements from auto workers to health care workers, to lng workers.

not even central-bank staff are immune. >> so the wage negotiation has been going on for a while. it was in august when the staff first rejected 10.5% over three years. then the rba raise from 10.5% to 11% which is being rejected. now the staff is threatening to strike, which will be unusual. i was looking at whether there was a president of the central-bank staff going on strike. there has been tensions that the ecb about wages and the central bank staff was in brazil. but we have not seen a country situation like that. it is something to keep an eye out for. shery: our economics reporter on

some of that labor action that heidi mentioned in other sectors. at least when it comes to the energy sector, unions holding plans to strike at chevron's lng facilities in australia, ending a follow but had more global markets for the field. workers accepted the proposed settlement on pay an working conditionsd. chevron's accounted for 7% of global lng supply last year. haidi: take a look at how we are seeing bonds trading across the region. this as we continue to listen to the rba, talking about shocks to inflation. we see treasury yields climbing is the harder than expected data repricing fedex -- fred expectations -- fed expectations. that is being reflected when it comes australia and new zealand. that broader equities index seeing a bit of a mild gain as

we see u.s. equity struggling in the previous section -- session alongside the bond side slump. 63 is where we are sitting. not much of a move after the .4% gain on the back of the rba. fx traders seeing some of the most hawkish bias, about the low tolerance to higher inflation. coming up. we hear from center chartered about what high prices will meet for emerging markets. we count down to china's third-quarter gdp and activity morgan's. jp morgan china economist joins us next. this is bloomberg. ♪ you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative

sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

>> this is daybreak asia we are counting down to asia's major market opens after a difficult

session for u.s. stocks. we saw the rise in treasury yields again as we had a large jump in retail sales not to mention solid industrial production at a time when we are in the thick of earnings season and on top of that we are watching geopolitical tensions in the middle east and perhaps more tensions around chip tech exports between the u.s. and china. haidi: there are high hopes for bidens visit to the region starting to unravel now with the cancellation of the arab leaders meeting with him. let's look at the start of trading here in japan the yen is front and center. we have not seen this big a chasm in yen expectation since about 2016. one side of the party expecting the weakest levels in 30 years. i on the other, expectations by the first quarter of next year we could get back to around 140 or that 130 level. the nikkei 225 coming online, we are seeing a little weakness. we are expecting muted milder

gains in the asian session after the u.s. equity sector struggled. following the data reinforcing that the fed might stay higher for longer. oil has been seeing an upside there as the israel hamas conflict continues to play out. we have seen dollar-yen just shy of that 150 level at the moment and watching the 10 year yields in the u.s. as well as japan, australia and new zealand following the same trajectory. shery: take a look at how the kospi's trading because it's coming online downside of about a quarter percent and we are talking about reversing some of those gains we saw in the previous session. more weakness on the korean won after we saw the best day in a week, we had more risk on sentiment because of these diplomatic efforts around the middle east. but at the same time today we are watching the news that the u.s. is stepping up efforts to block beijing's access to advanced chip technology with

new restrictions. we saw the downside on the philadelphia semiconductor index and also nvidia stock. we are seeing right now and south korea samsung down half a percent. sk hynix down more than 1.5%. haidi: take a look at australia now where trading has been underway for about an hour. we are seeing the broader asx up by about 8/10 of 1%. we are watching in particular some of the trading across whitehaven and ghb, we have seen that deal to buy two coal mines upgraded by ghp. also watching some of these lng and energy related names after labor unions hold to those plans to strike at chevron facilities in the country. putting a little more certainty when it comes to this dispute that has rolled the global lng market. about a 7% market share their being accounted for. looking at the aussie dollars 6363 is where we are trading. we are still listening to comments that came out of

michelle bullard she has been speaking this morning at a panel in sydney and talking about the difficulties that still exist when it comes to the battle to cool inflation. she has been talking about sticky services pricing a tight labor market and the surprises she has had from how resilient the property market has been here. we are looking at the first annual rebound for property prices that we have seen in a tightening cycle since the early 1990's. michelle bullock giving a few more tidbits to the dollar bulls or aussie dollar bulls out there who are pricing in more chance that the rba will have to down the track to more. and oil prices forming a big part of that inflation picture globally. we are seeing crude prices climbing after that airstrike that hit a hospital in gaza. our next guest says potential energy driven inflation could hit emerging market countries hardest here in asia. daniel lam's head of equity strategy at standard chartered

wealth management. you have been looking at this on a recent podcast in terms of how the implications and volatility and further upside in oil prices could play out for this region. in terms of what we have seen in equity gains, in sentiment there has been brighter spots than others. daniel: yes. basically if you look at the situation in the middle east we believe right now as it is the oil prices going to be around 80 to 90 four crude. if there were to be further escalation, i.e. if they were to be more parties involved, there could be sanctions on countries should iran get more involved. sanctions on iran would disrupt the oil supply and of course asia is very dependent upon the oil imports. so if there were to be disruption in supply oil prices

because higher to 90 or 95 and i can start to hurt the asian economies. the central banks in asia would be stuck in a tough spot because if they want to drop the interest rate to stimulate the economy that could risk capital outflow and weakness in their currencies but if they let the rates stay high than that could hurt the economy. so in particular asia would be hit by higher oil prices. haidi: the other side of this that we continue to watch particularly as it is data dump day from china including gdp and some of those more closely watched domestic activity numbers, do you think we have seen a bottom when it comes to chinese growth and could we see a regional element that could maybe a surprise to the upside. daniel: this is the

counteracting factor so on the global side you have the issue of oil prices but at the same time if you look at some of the data in china such as retail sales in august for example that has been looking somewhat stabilized or slightly brighter. today's date it be very important. the gdp figure as well as the other data comes out in china today. also the fact that the beijing government is considering further fiscal stimulus according to headlines last week. that could be an upsetting factor against what we see globally in terms of oil so it is very important to see that because many of the emerging markets especially in asia are highly connected to china growth. shery: so will we see that rebound and what you like in the meantime until we get more stimulus measures to support the chinese economy?

daniel: i believe we are likely to see further stimulus in china. that would be probably good enough for a rebound. like we said in the podcast if we were to see more sustained rally in e.m. or chinese equities then we would need to see a more broad base stimulus. but some kind of fiscal stimulus would help so basically if you look at the price actions say in the hang seng index over the last few sessions you would see that around the 17,000 level for hang seng and 17,500 seems to be some sort of very good soup for around those levels. it seems that the markets there have somewhat stabilized. but in order to see more sustained upside we need to see a bigger scale stimulus. shery: what about support in the

japanese equity markets given the weakness of the japanese yen how sustainable is that? daniel: japan is a relative bright spot because preferences mostly on dm over em. select we alluded to in the early part of this interview. so basically in situations like these say in e.m. the composition of food and energy prices is a bigger challenge with cpi so dm is the other way. they have to -- they have a tail wind from the corporate governance improvement and also the interest from foreign investors so that's looking pretty good at the moment. it is one of our preferred markets as well as the u.s.. shery: let's talk a little about the u.s. because we are entering the thick of earnings seasons bank results seen mixed. is there anything in particular you like in terms of sectors? daniel: our preferences on the

higher growth sectors like technology and communication services which is consistent of many of the internet and tech heavyweights. so basically are thinking is the ai technology, driven revenue generation is a sustained phenomenon. that is going to help those sectors perform well plus the fact that in times like these, times of uncertainty markets like japan and the u.s. are seen as safe haven markets. if you have issues in e.m. chances are that funds are likely to stay in the u.s. and also in japan unless something happens. like in china a big scale stimulus then you can see the other way around. but in terms of defensive qualities japan and u.s. will do pretty well in these environments. haidi: daniel lam head of equity

strategist standard chartered wealth management, good to have you with us. still ahead we are counting down to china's big economic data release. jp morgan seeing the company achieving its growth target this year, but first we get the latest from the israel hamas war as tensions escalate over a deadly blast in a gaza hospital. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh it's easy to get lost in investment research. introducing j.p. morgan personal advisors. hey david. connect with an advisor to create your personalized plan. let's find the right investments for your goals

okay, great. j.p. morgan wealth management. did you know you can get someone to shop for you? with stitch fix, it couldn't be easier. i share my style, size and budget. and they shop just for me. my shopper sends me stuff i feel good in. i keep what works, and send back the rest. stitch fix.

haidi: a deadly explosion at a hospital in gaza city is ratcheting up tensions in the middle east even more, even before president biden's arrival in the region. the u.s. has called for an investigation and the president's plan meeting with arab leaders has been canceled. let's get the latest. as the different sides trade -- whether this was a planned or failed missile strike, it certainly leaves the situation are we managing expectations of what president biden can achieve? >> it is very difficult. the optics of this are terrible this is what everyone worries about with a war in heavily built up areas with lots of civilians. whether it was in mistaken is really air strike or palestinian jihad missile blowing up effect -- the fact is when you conduct

hostilities in heavily built-up areas things like this happen. and of course for biden who is coming today it is almost like his trip is unraveling before he got there. he lost the meeting with the egyptians and jordanians and palestinian leaders. it is really just to stand in solidarity with israel but we are going to see more of these tragedies when you are in a very open area fighting a war. haidi: what are we expecting to see from this visit given the humanitarian crisis that is unfolding right now inside gaza, is catching the public eye across the world? michael: i think president biden is likely to stress what his officials have been saying to israel in general. that they have to be mindful of the civilians and trying to root out hamas. that is easier said than done. there were also reports there had been an air strike in southern gaza where israel had

been encouraging civilians to move to get out of the fighting and suddenly there is a rocket that ends up there as well. i hate to repeat myself constantly but this is the reality of dealing with armed conflict in very built-up areas. this will happen. the other thing biden might try to do is unblock the humanitarian aid through the egypt gaza strip border which was supposed to happen yesterday and is still waiting. there are supplies that go to people. israel does not want any of the supplies going to hamas and that is where the hold applies. but biden wants to show solidarity to israel. he wants to show it with the jewish people that he stands with them after this attack but the optics of a hospital being blown up and more than 500 people dying is horrific. haidi: in the optics of which are playing across all aspects of social media. i do wonder, you have 2000 u.s. troops on high alert. the ground incursion is still being expected.

our boots on the ground be at u.s. or allied boots something we could see it? is there political appetite for that given the images that are on our phones and tv's right now? michael: i find it really difficult to imagine. when the u.s. did this it was surprising in general but it was a mark of commitment to israel that we have your back if this happens. it is the same with the second aircraft carrier group but it is also a message to iran that if you get involved we are prepared to come in as well. if the u.s. gets involved what is to stop other countries from getting involved as well? you just don't want to go down that path because it escalates and spirals and that is what everyone is trying to avoid right now with visits like bidens and a lot of the diplomacy. haidi: michael heath there with the latest on the israel hamas war. we are also watching president xi jinping singh the belt and road initiative has a golden decade ahead. beijing is looking to

reinvigorate president xi's flagship infrastructure project 10 years after it was launched. our chief north asia correspondent stephen engle joining us now from beijing. what is on the agenda today. stephen: it is a big day this is the official opening of the third belt and road forum and it will be held across town at the great hall of the people where xi jinping will give a speech at 10:00 local time. followed by a speech by vladimir putin. we don't know exactly what they're going to say yet but i am sure that you gentlemen at some point when they retreat behind closed doors at about 11:30 after opening ceremonies will probably reaffirm their so called no limits partnership that they struck back in february of last year -- weeks before vladimir putin launched the war in ukraine. is it still a no limits partnership, that is the question. i'm not sure will get the answer to that other than he is here in beijing as the guest of honor

and their friendship is cemented. they have met in person about 40 times and it is probably going to overshadow -- the speeches are going to overshadow the trumpeting of the successes going forward of the belt and road initiative which is facing an uncertain future. over the first decade of the signature project from xi jinping china has invested nearly a trillion u.s. dollars in various infrastructure projects across developing africa, asia and elsewhere. but we are hearing that many of these deals coming through the pandemic and given the debt crises we have seen in places like zambia, ethiopia, sri lanka and elsewhere, that many of the projects going forward are going to be what state media says is smaller and beautiful projects. what does that mean? well the economic czar, the vice premier of china spoke at the ceo conference yesterday here at the national convention center on the olympic green and he talked about going forward in the next decade of the belt and

road they need to focus on sustainable debt because there has been concerns that china -- they are having their own debt issues. they are having a slowing economy, they perhaps don't have another trillion dollars over the next decade to dish out in loans. also there are rumors the repayment terms have been quite tough on some of these developing nations which are faced with significant debt loads if not default. they might talk empty words about the next golden era of the belt and road initiative, they might talk about it being green and healthier and smaller and beautiful. it is really empty talk until we see it and we see the deals coming from these dignitaries that are here. many african nations and developing asian nations. we will have to see whether the deals back up the rhetoric coming from president xi and pollutant later today. haidi: our chief north asia correspondent there in beijing.

you can get around up of the stories you need to know to get your day going in today's edition of daybreak, subscribers can find that a dayb on their terminals. it is also on the mobile and bloomberg anywhere app, you can customize the settings so you just get the news on the industries and assets that you care about. this is bloomberg. ♪

shery: the bank earnings parade in the u.s. continues. goldman sachs and bank of america where the latest to report with bank of america beating expectations and goldman disappointing. su keenan joins us now at the latest. should we start with goldman in that huge drop in profit? sue: yes a 33% drop in the eighth straight quarterly drop. this is an earnings period where the ceo david solomon played for

patients as he tries to turn the bank around and continues to retreat from his initial ill-fated foray into consumer banking. the big hits real estate -- real estate breakdowns and continued dealmaking slump. a investments drove a 200 12 million loss in the equity book and an additional 358 million impairment, all of that contribute into a 33% drop in profits. we are talking third quarter net income coming in at 2.0 6 billion. a bytes -- bright spot you see trading revenue was flat and beat expectations of a 13% decline in that has soften the blow somewhat. the ceo david solomon says the firm continues to be very optimistic about their goal of returning meaningfully higher returns to shareholders. that is the name of the game, the firm's return on equity of 7.1% is still well below the mid teens target in income and if

you look at the share price it is down more than 25% since its record high in late 2021 and it is on track for a second straight annual decline. that has been a source of irritation for goldman sachs investors and employees alike, the bank looking to move past the intense scrutiny of the ceo who has been getting a lot of dissatisfaction from the rank and file as well as executives. many of it leaking into the press earlier this year. solomon did receive support from the board's lead director last month, it also earmarked an extra 690 million for pay and benefits to help quell some of the discontent by paying employees a bit more. haidi: for bank of america trading was a bright spot. su: it was both equity and fixed income trading performed the best they have in more than a decade. we also saw the key source of revenue for bank of america and

all of the banks for that matter, net interest income or and ri beating expectations and notably stock trading revenue was up 10% to a record 1.7 billion in the quarter and you have to remember this was a quarter with dramatic market swings. the net income for the bank surged 10%, 7.8 billion or $.90 a share beating estimates. investment bank unit also beating expectations across the board. the ceo talking about how the consumer side of the bank also holding up strong. " we added clients and accounts across all lines of business. he says they did this in a healthy but slowing economy that is how u.s. consumer spending is still ahead of last year but continuing to slow. that is a theme we are hearing from all of the banks including those that reported last friday. consumer spending starting to slow, credit quality also declining and the right off of bad loans has been a key theme throughout.

morgan stanley up next, we will have their earnings tomorrow. back to you. haidi: su keenan there let's get you to some of the top corporate stories we're tracking. america is cutting 20 staffers following a review of the firms markets and investment banking businesses. bloomberg has learned that they have a foreign-exchange strategist known as mr. brexit and is among those leaving. the cuts are part of an effort to trim costs, wall street's largest banks have been grappling with a slowdown in trading activity compared to a year ago. hsbc is blocking staff from texting on their work phones, sources told bloomberg that the band will be applied across the bank and says staff had already been blocked from using whatsapp on work devices. only a select few in regulated roles will be exempt. the move comes as regulators investigate the industry's use of unauthorized communication methods. top chinese ai developer -- has punished over 100 employees for taking a longer lunch break than

allowed. the firm accused them of abandoning their workstations to queue up for free chicken lunches at the campus cafeteria, those affected will be disciplined. they are a key player in the chinese ai industry. unions have halted plans to strike at chevron's lng facilities in australia ending a fallout that would erode global markets for fuel. workers have accepted the firm settlement on pay and working conditions, chevron's facilities in australia account for about 7% of global lng supply last year. haidi: taking a look at how futures in europe are opening up. as we see that previous session was one of steadiness euro stocks 50 futures are seeing a little bit of downside pressure dax futures off by about a 10th or 2/10 of a percent there as well. european stocks paring earlier declines in the previous session, it was. -- pre-much flat as we got to

the end of the tuesday session but of course that downside when it comes to wall street and some muted trading action here in asia could be playing out at the start of cash trading as well. we did see some losses when it comes to telecom construction but strength across consumer and retail sectors, kind of balancing that out as we saw the follow on effective u.s. retail sales being a little stronger than forecast in the most recent reading. european investors increasingly believing that monetary policy is too restrictive and that deposit -- possibility of the ecb over tightening is a concern. that is according nice footwork. man, you're lucky, watching live sports never used to be this easy. now you can stream all your games like it's nothing. yes! [ cheers ] yeah! woho! running up and down that field looks tough. it's a pitch.

get way more into what you're into when you stream on the xfinity 10g network. the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network.

>> taking a look at a pretty muted picture as we continue to watch for expectations of potentially more fed tightening

to come. we heard from the rba governor today, warning against the low tolerance for higher inflation flaring up. the nikkei 25 is up .2%. weakness when it comes to korean stocks, and new zealand stocks, limited upside in sydney. we are watching the rally in oil after the deadly explosion at a gaza hospital boosting already elevated tensions in the middle east before president biden arrives to the region. the jump is above $88 a barrel after the flat session on tuesday. the crude market has been the most affected asset class out of this ongoing regional crisis. the other big news headline today will be the data dump out of china, the latest gdp numbers in over an hour, domestic

activity indicators. analysts say the economy is expected to expand over the year before. the target is 5%. our next guest thanks beijing is on track to achieve that. the senior china economist at j.p. morgan. rate to chat with you. -- great to chat with you. where do you see perhaps the stimulus measures gaining more traction and where do you still see more weakness to go? grace: that is an interesting point, while we do expect gdp to grow at 4.5%, it is the consensus, we do see divergent paths between different parts of the economy. if you look at the overall economic trajectory, we had a strong first quarter post-pandemic rebound. and things began to slow from april through july.

from august onward, we have seen some moderate recovery. if you look at where that recovery comes from, industrial production, the manufacturing sector, has been doing a decent recovery. and that is on the back of policy support for some of the strategic industries where you are gaining a lot of used from the government. also on the external side, if you look at all of this data in the september trade data last week, we have seen china's exports, especially in volume terms, getting to show moderate recovery after the weakness in the second quarter. we are seeing signs of industrial profits coming back. the industry part is doing pretty well. consumption is a little bit more mixed. you do see disappointing consumption data through the second quarter, august data was somewhat better than expected and we are expecting steady september numbers to come out today. and the weakness continues to

come from the housing sector. what has been dragged through the second quarter and even with the announcement of policy support from august onward, it does seem that the housing market act best stabilized -- at best stabilized but it is still fragile and soft. haidi: when does the fragility start feeding through to retail sentiment? the numbers have been holding up fairly well. grace: that is a very interesting point. the consumption picture is affected by a number of factors. in the first place, labor market conditions are important there has been a lot of attention on the labor market. including unemployment data. with the overall economies row jewel work -- economy's gradual

economy, you are starting to see modest improvement. if you look at the october national holiday period, it seems there is some signs of improvement on tourism spending and so on. that part is one point, and sentiment, which is somewhat related to the housing sector is also another important factor. in that regard you would probably need more time for the general economy to recover, for the labor market to stabilize further and for the sentiment to stabilize and recover from here. in that regard, the demand side measures to support housing that we have seen in recent weeks would hopefully help to stabilize households and sentiment. shery: how important is the sentiment part when it comes to loans being given out to the

broader public, because it does not matter how much you cut rates, if no one is willing to borrow? grace: indeed, in that regard, the somewhat encouraging data is the latest september tsf number, which data show some decent pace of growth in medium to long-term loans. which probably goes to support infrastructure investment and manufacturing investment. and on the household loan side, we saw some decent pickup in medium to long-term loans for the household sector which is related to mortgages. in terms of policy, we do see somewhat limited room on monetary policy, in terms of rate cuts, considering the global environment of the higher for longer policy stance.

in that regard, going forward we do think that from china's perspective, if there is the need to further support growth going forward, the focus would have to come in from the fiscal policy side. shery: we have seen some of those fiscal measures and the restrictions when it comes to the property sector being eased for the broader public. but when it comes to the property developers, we are on high alert for a first default by country darden. how consequential with that before the broader economy? grace: we are watching the developers'financing conditions closely. while we have seen a series of demand side support measures for the housing sector, what we remain concerned about is the supply side, especially with regard to liquidity conditions of the private developers. in that regard, we think that

going forward, when we talk about policy support, an important area is to focus on the supply side. the funding conditions for the private sector developers, in order to stabilize the real estate investment and general market sentiment going forward. shery: talking about market sentiment, we saw china was tightening restrictions when it came to shortselling activities. are we going to see more investor confidence, what will it take to get not only sentiment among the broader public and in the financial markets to be boosted? grace: a couple of points, one is that the government would need to continue with what they have done, which is to get out the signals they want to support the market, including the private sector economy. so as to give consistent signals to support and stabilize the economy and the financial

market. at the same time investors focusing a lot on the structural issues on the economy, including, how do you address the housing markets funding problem other developers and the downward treasure on the housing sector? how do you address the lgfvs financing problem and how do you help support policy support? in order to boost investor confidence would also be crucial going forward. shery: thank you so much for joining us. we will have more on the geopolitical challenges that china faces, nvidia warning of product snags as u.s. steps up efforts of keeping advanced chips out of china. that story next, this is bloomberg. ♪

♪ ♪ ♪ be ready for any market with a liquid etf. get in and out with dia. sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh explore endless design possibilities. to find your personal style. endless hardie® siding colors. textures and styles. it's possible. with james hardie™.

shery: in the new york session we saw nvidia suffering the biggest intraday drop this year. it has ruled that tighter chip exports to china could hinder product development and cause difficulties. take a look at some of the suppliers in asia, samsung has managed to turn positive, but

the sk stock is losing ground, paring back earlier losses that surpassed 1%. down .3%. we saw the philadelphia semiconductor index lost $70 billion in market value. let's bring in asia technology executive editor peter elstrom. what did we learn from the converse -- from the commerce department's announcement? guest: the idea that they would put out new rules about its export controls on china was known but we got the details overnight. we got specific details that are important. first, they are targeting ai chips that nvidia has been selling into china. originally they had been selling advanced chips to train ai models to chinese companies and other companies. after the export rules, china

put them just below the hurdle of the commerce department. the new rules, those chips will be banned, so they will not be able to continue to sell them to china. to prevent them from slowing down more under the next hurdle, they said there is going to be a gray zone where you have to seek a license to keep selling into china. in addition, the commerce department said 40 countries could be used as intermediaries for selling chips into china, so you need a license to be able to sell those. and the commerce department blacklisted a new batch of companies, including a couple in china that are trying to develop competing chips to nvidia. these are the big areas where the commerce department is trying to close the loopholes from the rules they instituted a year ago. haidi: is it too simplistic to draw the link between these latest moves and the progress that was made with a huawei phone and the chips? does it change china's ability

going forward? peter: that is a good point. as you are referring to huawei in late august unveiling their new phone which had a chip made inside of china that was more advanced than american officials had been trying to block them to be able to get. part of that is because much of the chip equipment that is used to make the more advanced chips has been able to be sold into china over the past year. a lot of it comes from asml, the dutch company which had not fallen under the rules before. the commerce department will look more closely at the chipmaking equipment and may add additional controls. they were quite upfront, technology moves quickly and they may have to revise these rules at least once a year going forward. shery: we saw the reaction when it came to nvidia suppliers, are we expecting broader

implications for other asian tech companies? peter: it certainly does limit some of the ability of these companies to sell into china. nvidia has been outspoken, asml has been very outspoken that it does not think the strategy of banning sales into china makes sense. in the meantime, you have seen china double down on their investments in their domestic chip capabilities. a are spending more than $150 billion trying to build up capabilities in many areas. the company that supplied to the huawei processor has been pushing and making the most advanced chipmaking gear. there are other companies that are investing in every area of the chip industry. china has decided it will push ahead, at least up until now it has been able to buy a lot of the equipment and materials it needs to make advanced chips, we will see whether these new rules will have more of an effect as

the u.s. warns that if china is able to get its hands on the most advanced semiconductors, it could pose a risk for national security. haidi: south korea's and mark kospi index slipping 8% from the august peak. seeing downside today. despite signs the global semiconductor industry might be on the mend. all of this chip chatter about the cycle potentially turning a corner, why are we not seeing that translate to better optimism when it comes to korean stocks? guest: traditionally, the turnaround in the chip sector has given a boost to the stop market. they account for a quarter of the benchmark kospi market wake.

when we see the recovery in these large chips, there has been gains in the kospi, but even though there has been talk about a global chip cycle, we have seen a weakness in the market. one of the biggest reasons seems to be because foreign investors have been selling korean stocks for months. they have been selling the korean stocks, the longest selling streak since 2021. that seems to be probably due to expectations that interest rates would be staying higher for longer. a lot of south korean stocks are were sensitive to higher interest rates because there are growth driven stocks. that seems to be a key reason behind the korean stockmarkets weakness. another reason is that chips has been more related to the ai

rally. with the ai rally fizzling out, it seems that the chip stocks are not getting enough boosts, which we were expecting. that seems to be another reason behind the weakness in the kospi we have been seeing lately. shery: the korean market and the economy is dominated by the giant exporters. are they are bright spot for south korean -- the trajectory of the market and economy given the weakness of the korean yuan as well? youkyung: that is a good question. there is at least one bright spot, which is that after this selloff, kospi has been falling a lot. it means the valuation has become cheaper. the earnings ratio has become a lot lower than the past

five-year average. there is a cheap valuation that makes the stocks more attractive to investors. analysts at goldman sachs say there is an upside for the south korean stock market going forward given some of the signs of earnings growth. we have seen selective korean companies possibly posting better earnings going forward thanks to expectation that demand will recover. earlier this year -- was expected to be one of the key asian countries that would post earnings growth in 22 24. that expectation may serve investors. shery: we will be watching what they say about that currency impact. be sure to tune into bloomberg radio to hear more from the days big newsmakers, get in-depth

analysis from the daybreak team, broadcasting live from our studio in hong kong. listen through the app or bloombergradio.com. plenty more ahead, stay with us. ♪

haidi: china is making the right

steps to improve its economy, zeman says, who spoke to stephen engle beijing. >> the chinese economy seems to be bottoming out now and the fourth quarter. i do believe the gdp will be about 5% or 5.5%. china is taking all of the right steps now to make sure things come back. i believe i the second quarter of next year it looks like things will be almost back to normal. in general, i really respect what xi jinping did 10 years ago, you had 132 countries attending this 10th anniversary. originally 150 companies signed up for the belt and road, they are calling it the digital silk road, some have criticized that they are in debt because of the

infrastructure. but now for digital, everybody needs technology. and china can have 150 countries in a digital sphere. >> do you think it was too ambitious to start, and did not foresee the pandemic and global inflation, and the debt crisis that is emerging, do you see belt and road taking on smaller projects? >> absolutely, many countries are already -- they already have ports, the roads and the networks. they are taking on leaner things, and the new world, the green world, which is important to technology. which many of them want china to be able to produce. and china is so strong in technology. there is something they can export. it is a lot cheaper. >> from your experience, given the slowing of the economy, the

repayment terms on these development loans, are they tough coming from the chinese, and they want to recoup some of those investments. they don't have the trillion dollars they outplayed over the last decade anymore. >> i agree. listen, they know -- it was a free-for-all before you had the system for the real estate market. the u.s. went through it in the 1980's, every country goes through something like that. but they are now taking the steps i believe, to be able to work with us. going forward, the good thing about the chinese is they are savers. during covid, there was a lot of money in the banks, it is consumer confidence that has slowed down the market. but many are now starting to come out more and more. you can start to see it is a different world. >> you are putting your money where your mouth is on support

of the chinese economy, you are investing more, how many other cities are you investing in? >> we are now looking at cities and high-end -- and by 2025 you will be talking about duty-free and tax-free, we are looking at a nice project on the water at the marina. we have one under construction the moment with a partner. and one more in shenzhen that we are considering. i have my hands full at the moment but i do believe in the greater bay area and i do believe in china. shery: take a look at how markets across asia are trading right now. we are seeing more this cough tone settling in -- risk off tone with the nikkei reversing

monday's gains. the nikkei is down .5%. -- being weighed down by tech and utilities and reversing two sessions of gains. the kospi is unchanged at the moment but we are watching the semiconductor names and tech hardware. given the rising tensions over the chip tech exports to china. that is it from daybreak asia, our markets coverage continues with trade in china, gearing up towards a data dump. this is bloomberg. ♪

it's easy to get lost in investment research. introducing j.p. morgan personal advisors. hey david. connect with an advisor to create your personalized plan.

let's find the right investments for your goals okay, great. j.p. morgan wealth management. and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com

>> 9 a.m. in beijing and hong kong this