haidi: you are watching daybreak asia coming to live from new york, sydney, and hong kong. annabelle: we are counting down to asia's major market opens. shery: australia has just come online. president biden wraps up his trip to tel aviv signaling full backing for israel and supporting its claimed that palestinian militants were to blame for the gaza hospital blast, but fails to come concerns of a wider conflict with asian stocks falling the slide on wall street and investors digesting big earnings with netflix surging after posting the best quarterly subscriber growth in years, while tesla dipping after missing estimates. annabelle: this set of earnings, geopolitics are the two main things we will be tracking through the session today but we have the open of the asx 200 and you can see the direction in the early moments is clear with the

drop in futures pointing to losses of 1.2% so we will wait a few more minutes for it to come fully online in the session but really what we are monitoring and the session is as i said geopolitics, the israeli-hamas war and implications for traders , or things like that firmer dollar, higher treasury yields, and more about that flight into safe haven assets, so that that ozzie bond yields moving higher in the aussie dollar under pressure as well with the jobs numbers due out later this morning so that good move the dial but were sitting around a 2023 low for the currency. let's change on because across other equity futures we are again pointing to declines here. new zealand party to the downside come at the reaction to the geopolitical story. the other factor as well is what is going on with earnings and we will go through the numbers but it will be the question for

investors today, do they put get more of the green shoots that came through particularly for netflix versus what we see in the middle east? and that is really the risk that this conflict or war continues to widen. shery: let's get into those earnings because were seeing a different picture when it comes to tesla and netflix after hours. netflix best subscriber growth in years and is raising prices for customers in the u.s. , u.k. and france and you can see the stock price gaining now more than 12%. tesla profit and revenue missing estimates but sticking with their full year production forecast and promising the new cyber truck by november 30, so we are seeing those losses at around 4%, but take a look at the broader market, u.s. futures looking like this after a very tough day for the s&p 500, where we saw the worst day in over two weeks.

of course we continue to see geopolitical tensions in the middle east, but also reacting to treasuries slumping continue with the two-year yield at the has level since 2006 and the 10-year at the highest level since 2007. we were watching fed speak in the beige book today which of the outlook for the u.s. economy remaining stable, and of course we are watching oil prices at the moment not doing much after rising in the new york session. iran has cold for an employed -- as called for an oil embargo. in the after hours session in the u.s., news that the u.s. suspended sanctions on venezuelan oil, gold and gas production. we have the venezuelan government and the opposition, so not a lot of reaction yep given that we had seen this news trickle in the last few days but

really it's about the ongoing israel-hamas war and trying to contain that risk to middle east. haidi: yeah, and we did see president biden signaling is full backing for israel as a promises to crush hamas. during that trip to tel aviv he tried to allay concerns about the crisis in gaza while pledging $100 million aid for residents of gaza and the west bank. >> we will make sure you have what you need to protect your people and defend urination. for decades, we have ensured israel's qualitative military edge and later this week i will ask the united states congress for unprecedented support package for israel's defense. haidi: let's bring in our national security reported. so did president biden accomplish what he set out to do in israel? >> we will see.

he wanted to convince israel to allow humanitarian aid into gaza and israel said it will allow 20 trucks from egypt to pass into gaza with food, water, and medicine, so that was something important the president accomplish. we will see him address the u.s. tomorrow from the oval office where he will lay out the strong support for israel and a warning against further humanitarian crises in gaza and the widening of the conflict that could cause. shery: so what is the next role for the u.s. in this conflict? >> first, we need a house speaker. the president said the white house has as the u.s. congress for $100 billion for both israel, ukraine, the southern border with mexico and allies in the pacific region like taiwan, so that package needs a

functioning house of representatives in order to pass. we either need republicans to find consensus among themselves or join with democrats to give more power to the temporary speaker patrick mchenry to pass the supplemental appropriations to support allies around the world. haidi: what are the next steps for israel now? anna: that is a great question. we will see the u.k. prime minister rishi sunak travel to the region in the coming days and other visits from other european leaders. one thing we were waiting for and prepared for over the weekend was a ground invasion by israel into gaza and to see whether or not that will still happen or where the military side of this conflict goes from here but then of course were watching the wider geopolitical followed and whether other regional players end up getting involved as well. shery: the latest on the israel-hamas conflict.

now let's turn to china because xi jinping has reiterated his support for russia's efforts to safeguard its national sovereignty and met with his russian counterpart vladimir putin on wednesday in beijing. our senior editor joins us now from shanghai. what came out of this summit? >> it is more rhetorical support for russia. china has been touting it as an alternative, but china is able to provide loans, especially the time when the war is going on, and scoring a lot of points for the global south. that said, a lot of the financial assistance is down to the fact the chinese economy has slowed down a lot and is less willing to help.

there are african countries seeking loan relief in china is less willing given that it has its own national problems as well. china says well there are 150 countries that signed on to it, but most countries in africa and the global south, in europe, it only has been contemplating pulling out that it. countries like hungary and serbia are still in it, so it's not like you're getting a lot of that with western countries signing on to this. i mean, for russia, it has been a boon in a way especially for vladimir putin because it has been able to get them out of diplomatic isolation. that said, he has been able to get china to sign onto to a gas pipeline agreement. it seems there is support two

for the countries, and more than anything they are thumbing their nose at the u.s.. haidi: i was looking at the family photo taken at the bottom of the steps compared to previous years. it is so much more of a smaller group? , right the ranks have really shrunk. is belt and road losing relevance, i guess, along with the broader economic and political challenges we have seen for china? allen: well, for one thing, china has a lot less money, but then again, it keeps talking about may be lower -- as well as assistance on green energy projects in asia and africa. you know, the kind of investment that will cost china a lot. it depends on how you look at it . as far as china is concerned

it's winning the minds and hearts of the global south. it is doing that. whether or not it is getting the rest of the world to sign on is another story. we are seeing a dichotomy between the west and china, so it really depends on how you look at it, but for china, there is definitely a lot less money and a lot fewer countries, but nevertheless still plowing on. haidi: just sort of debriefing from that belt and road forum. still ahead, we are counting down to the bank of korea rate decision. most are expecting them the hold steady and we get a preview of what is up late later in the hour. -- what is at play later in the hour. ♪

haidi: netflix shares soar 15% at one point after the company announced it is raising prices for some customers after posting its best quarter for subscriber growth in years. su keenan joins us now. one analyst saying there is nothing not to love with the latest report. you have netflix blowing away expectations on the subscriber front. su: that is why shares are jumping double digits actually bringing along some of its rivals with an extended training

, adding close to 9 million customers in the quarter, and boosting overall subscriber base to 247.2 million. as a result, they plan on raising prices for some customers in the u.s., u.k., and france. drop into the bloomberg and look at the increase in subscribers and it is surprising because investors had worried that netflix might lose customers if it forced people who were sharing accounts to buy their own subscriptions, but the crackdown which was the big story late last year going into this year has led to a surge in new customers without a major jump and cancellation rates and are on track to add 20 million customers this year, a huge jump from fewer than 9 million in 2022. on the analyst call, a very optimistic sounding netflix leadership team say they are just beginning to roll out the password crackdown, so there is more to come on that front and

they see very strong margins in 2024 and no ceiling on margins, meaning they seek greater profit ahead and perhaps adjusting for the fact that many analysts think they were conservative in their outlook and they also say they have one of the strongest content slates in their history coming up for the quarter ahead. it is important to note that they are again, raising the cost of their plans in the u.s. by three dollars for the most expensive plan, basic plan by two dollars to $12, and they would take similar steps in the u.k., france, and the middle east and africa account for the largest share of netflix growth for the quarter, and in terms of outlook, 8.69 billion dollars on earnings of $2.15 a share projected slightly below wall street projections and again viewed as conservative because on the conference call they are seeing much greater profit margins ahead and continued strong subscriber ship on par

with what they saw this quarter. haidi: pretty different story for tulsa with third-quarter profit falling. su: we've seen the disappointment in the up and down nature of the shares after hours, but it is important to point out the cyber truck news and discussions by elon musk in the conference call have caused the shares to rise and fall. what they are saying again, about the earnings miss on sales and on profit, there is concern that the long-awaited cyber truck which initially with the news they were going to make a delivery at the end of november helped to offset concerns about profit, it certainly is an area of great challenge is what we are hearing on the conference call. the cyber truck is about two years behind schedule. shares rose substantially when tesla said it would hand over the first truck to a customer in

november but said tessa could ship 50,000 a year, but not until 2025, so sentiment was changing from investors positive to negative and and flat again. elon musk warned it would take 18 months for the vehicle to be a significant positive cash flow contributor. here is a quote from elon musk on the call, "we dug our own grave with the cyber truck. special products on the come around once in a while and are difficult to bring to the market to reach volume and be prosperous." that sums up the highlight of the call ended somewhat disappointing results from tesla. given all the hoopla. back to you. haidi: su keenan. well, on top of earnings in the escalating geopolitical risks, markets are sifting through the latest comments from the fed for clues on where rates are headed.

one person says it's still too early to say that more hikes are needed. >> we are looking carefully at the dated to see whether the real side of the economy begins to cool off or whether prices on the nominal side of the economy heat up. as of today, it is too soon to tell. consequently, we can wait, watch, and see how the economy evolves before making definitive moves on the path of the policy rate. haidi: our next guest says a u.s. recession looks far away and there is no need for the fed to aggressively raise rates. the senior portfolio manager for multi-asset solutions at all spring global investments is with us. great to have you with us, as always. it feels like you could not get a more uncertain set of circumstances facing global markets at the moment. when you look at the inflation picture, how much of a risk are energy prices to you? >> i think energy is not going

to be a big risk to inflation over all. with all the tumble overseas, the market has pretty much fully accepted that, so i don't think that will be significant. haidi: what are you opportunistic on at the moment? we saw that return briefly when it comes to tesla but a strong return from netflix. does that give you more appetite for dipping more into tech? margie: well, it is interesting. the market had a very bad today. however, when you look at earnings reported so far, it is just starting. they have been quite good and surprising on the upside. netflix is a great example. tesla is not a great example of consumer issues related to that one company. the banks reported and were all

good, so today technology has not really started because people are nervous about declining demand or supply, relations with china and so forth, but, i think the market wasn't present the upside, as it has all year. shery: tech was hit today but to be fair has been doing well considering the environment right? this chart showing how treasury yields have continued to rise, but tech has been pretty resilient, even against the broader s&p 500, so do you think this narrative and trend can continue, especially given all the hype around artificial intelligence as well? margie: i think artificial intelligence, i think we have to wait for the payoff at that, but i think we will continue to see good earnings growth from the companies, good control of expenses with maintenance of profit margins and i think in a world that is looking at slower

moderate growth, i think it will still be a sector with above average growth, so we still like the technology sector and we think those large-cap names will continue to surprise on the upside, which should benefit many people who are hoping for a big correction because the fed has raised rates and we do not see it and i do not think it we will see it either 5% is enough to really docile the market. shery: you mentioned financials and bank earnings looked nicks. with that be enough to offset the issues they pointed to, whether global growth taking a hit not to mention loan provisions as american consumers take a hit given the inflationary pressures as well? margie: yeah. it is a mixed picture for the banks. they have some positive things that they will benefit from an increase in deposit growth which

they seem to have had them and i do not think we will see a tremendous increase in bright office. i think the banks have started to tighten credit standards under likely to have very modest growth. the investment banking business has turned out to be pretty good for those bank so i think we will see them basically have modest profits and any additional regulation will not be a negative on the stock prices, so i would say it has some positives and negatives, and they show a willingness to cut employment to cut costs, so what they don't have on the revenue side, they can improve on the cost side. shery: going back to oil prices and more broadly commodities, given the weakness we have seen recently in the chinese economy, we had data recently that surprise to the upside. what do you expect from that economy and the implications for asset classes if we struggled to get to that above 5% growth

target that beijing has been talking about this year? margie: it is clear china is decelerating, still positive, 4.9% this past quarter, good for such a large economy, but difficult to see an acceleration. the economy, real estate, we know the problems there, but comparison, u.s. real estate is 6% of the u.s. economy, so i would expect modest growth, the base, and what that says for less demand for commodities across the board, but also the commodity base in emerging markets will not be a positive, and also in the u.s. we have seen companies affected by a slowdown in demand, whether health and beauty, health care sector or the technology sector. we have seen companies that have been affected by declining china

demand, so that will roll over into the u.s. economy despite modest positive growth in china. we certainly don't expect accelerating growth. shery: people are talking about structural weakness instead of it just being cyclical. good to have you with us. you can get a roundup of all the stories you need to know to get your day going in today's addition of daybreak. terminal scribes go to db go in -- dayb and you can customize your settings so you only get the news on the assets that you care about. this is bloomberg. ♪

♪ explore endless design possibilities. find your personal ♪ style. endless hardie® siding colors. textures and styles. it's possible. with james hardie™. 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.

haidi: you are watching daybreak asia. shery: openai looking to sell shares. bloomberg has learned that the start up behind chatgpt is negotiating with potential investors and if successful would leapfrog stripe and a chinese online retailer to become one of the world's most valuable closely held companies. japanese banks will compensate customers for costs they incurred after record two-day outage last week hit the transfer system in the system operate says banks will reimburse the extra fees and penalties occurred. it was the worst outage in the 50-year history. this is bloombe 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.

>> take a look at how tesla is

trading in the after-hours session. losses of almost 5% for the stock. they are sticking with the four-year production forecast. let's bring in david, ceo of new contract. david, what do you make of the results? >> miss, miss, miss, and distraction with the continued decline in fundamentals of the tesla business just as i think i and many others have predicted, competition is taking its toll and i think that the valuation has a long way to go to get back to something reasonable. . i don't investors need in terms of evidence to see the business model is going to fail. next you think elon musk did enough to talk up the cyber truck and what are you expecting from that? david: i'm expecting more than a

razzle-dazzle. let's talk about the cyber truck. we will deliver one in november. he said it would take at least 18 months to get up to scale and for them to make a dollar on the cyber truck. complained about how difficult it was to put it together. all the things a lot of other people are saying is true. cyber truck is a gimmick. that's it. i don't think you'll ever make money for anybody. i don't tickets a great product, so, it's a distraction from the underlying fundamentals, the same way spacex ships to mars used to be a distraction from his inability to meet production goals. musk is the master of persuasion, of distraction, and that's why i think the stock is so overvalued and why there is so much risk at holding it anywhere close to these current prices. >> you talk about competition, tesla was supposed to have their first mover advantage, even with multiple price cuts this year, they seem to be struggling.

what's the problem here? >> the problem is the same as it's ever been. there are a lot of other car companies that can make electric vehicles. tesla had a disproportionately large share of the market because it did have first mover edge. first mover advantage does not last forever. it does not afford a permanent competitive advantage. you have to keep running to stay ahead because people are coming after you. what we are seeing is the competition is catching up in tesla is forced to lower prices and deal with lower margins like other car companies. ultimately, it's just nowhere close to having anywhere close to the kind of production required to justify a price that 240 bucks a share. we think 26 bucks a share is probably a fair price and even that could be a risk. haidi: he also blamed the micro economic geopolitical environment saying when the world is as is, people are not thinking about buying cars, does

that make sense to you? david: it makes her hard for everybody. spending will go down. tesla rode the wave of one of the biggest liquidity movements in increases of all time, in the history of the world. super low interest rates and all of the physical stimulus, all of these things were wind in the sales of a lot of bad companies that are overpriced, tesla is one of many, but tesla is the poster child of benefiting from a lot of subsidies. these subsidies will go away, these credits are going to go away, we will see margins come down to be much lower. mostly because tesla still is nowhere close to the scale of the legacy automakers, so they don't have the underlying infrastructure to achieve the margins and returns on investor capital long-term that the oems do. haidi: concerns over delays in

terms of the mexico plant as well? david: yeah, when has there not been a delay, has anything actually ever been delivered on time? as musk actually ever delivered anything on time? the first estimate. that's what i mean by distraction. we mr. revenue, we missed our earnings, we missed on margins. talk about the cyber truck because that will save the business. in the same breath he mentions the cyber truck will generate a single dollar profit for another 18 months. so, people need to pay attention to the fine print in the details. roll up your sleeves, understand the fundamental booms -- fundamentals and understand risk reward. we are no longer in an environment where the fed will keep billing people out. water is coming out of the pool. we will see who's wearing trunks. musk and tesla are not wearing any swimming trunks and people will want to sell the more they understand that. shery: david always great to get

your insight. new construct with his views on tesla and elon musk. let's turn to another earning result. morgan stanley's seeing its worst one-day drop since june 2020 after releasing the third quarter earnings. for more, bloomberg's vonnie quinn joins us with the latest. winded -- where did morgan stanley see the most damage? vonnie: investment banking down 27%. wealth management saw the lowest since the death of the pandemic, which was a little bit of a surprise since gorman had been suggesting it might be a little bit better than that. for example, we have fixed income trading slumping. equity was also a disappointment. let's look at wealth management first because after the acquisition of e*trade, morgan stanley set an ambitious project for that unit. it had a goal of $12 billion in revenue annually. that suffered a significant setback because this quarter net

asset inflows were 35 point $7 billion. for contacts in the first half, that level was 200 billion. you could tell the next half is up to a head start and setting it back significantly. net interest in that unit was $2 billion. clients were looking for that are returns for their deposits. so that was not a great number there. as for deals and capital raising, we have a couple of warrants to australia because dealmakers had a difficult time period it was a very difficult quarter across the street. for morgan stanley, it was the worse of all of the dealmaking units across the seat -- across the street. it did get a roll-on since -- exxon's acquisition of pioneer he didn't have a role in the arm deal that we sell recently. so that would've depressed things there. fixed income trading, equity underwriting revenue remains depressed. in spite of all that, james

gorman continuing to strike an upbeat tone on the future for deals. the teva listen to what he had to say. james: we are seeing increasing evidence of m&a. and while we expect momentum to continue this year, at the fourth quarter has some seasonal considerations. we expect most of the activity to materialize in 2024. the minute you see the fed indicate they have stopped raising rates, the m&a and underwriting calendar will explode. vonnie: we hit the trough of capital market last quarter. david solomon also said that in this earning cycle he tried to strike an upbeat tone about the pipeline. so it looks like in early 2024, the banks will see a better pipeline come to fruition. it should be known that even with the declines in the depressing number in some of the

units, it beat on revenue slightly and also on earnings-per-share. haidi: did we get any updates when it comes to succession? vonnie: we know you will be gone by may. he said even sooner. he added to that and said we are close to picking a successor, and i have said that before. the successor will be announced by three candidates in the running to replace him. the chief investment management chief dan. no changes there, but he did say thank is well into is the succession process. hopefully his successor will have an easier time going forward. haidi: let's get you back to hong kong with annabel on the markets. annabelle: just taking a look at what to expect for the asian session because we are under 20 minutes away for the open for soul and trading for tokyo. the outlook is not too great for

the session today and one of the factors we are at your beating their that, you just said earnings so more negative sentiment coming across from morgan stanley and tesla. there is that moving into safe haven assets. things like go and then also oil and focus. this puts it into more perspective because it takes us back to two weeks ago. in that time since the israel-hamas war, we seen a big rise in the price of gold in particular. that's a gain of around 4%. oil is another focus. we are monitoring to see where that wall would widen to engulf more middle eastern plays in be something that could put a lot of pressure on oil markets. these are some of the assets we've been tracking when we do see gains in them it could be negative for risk assets. take a look what we are seeing with australia because we are 40 minutes into the session for the asx 200 and generally we are

around 1.4% at this stage. you can see looking up the function, every single sector is in the red. it is those sectors that are more sensitive to macroeconomic headwinds tomorrow sensitive to risk events and its consumer discretionary materials among the big grabbers in the session today. haidi: much more to come here on "daybreak asia". this is bloomberg. ♪

shery: the bank of korea is expected to hold rates steady today. the move would mark the central banks fifth consecutive hold. bloomberg economics says it could start shifting away from its tight stance in the second quarter of next year. for more, bloomberg economist joins us now from seoul. we've heard the president talk about the interest rate burden on the korean economy. why not pivot now? >> because inflation resurged, headline inflation went close to 2% target in july, but close to 3.7 percent in september, much higher than the target and they

remain stubbornly high among 3%. also concerns about the risk factor of financial stability in the korean won is under dine -- is under downward pressure. so that bank of korea, there's a little chance the bank of korea has all these today. haidi: what are you watching when it comes to the output gap? >> up gap is slightly below -- how can i say, the level is slightly below the potential gdp, so the output gap is there, but i expect that the korean economy will grow 2.2% next year and it's surprise that the up gap will close next year. so that the bank of korea will

probably focus on the inflation more than growth. haidi: bloomberg korea economist in seoul on be ok day. we are also watching the yen. it traders bracing for big swings in the currency with growing concerns to support any weakness. it comes as a former boj board member. central bank may scrap negative rates by the end of this year. let's bring in our effects and rates reporter mark wilson here with me in sydney. just looking at the divergence compared to way analysts are looking at, it's the most divided view since at least 2016, what's your take? >> i think he postured that few yesterday and is getting more subscribers to the idea. currently, the boj end of the

market -- the bond market yesterday, but the 10 year jgb yielded at a .15%. that's the highest to has every -- that's the highest it has ever been. pressing on toward that 1% barrier. it might force the boj's hand at the short end of the curve. they couldn't get rid of that negative rate policy and that would be a strong signal to the market. that was always the debate, what goes first or negative rates. i think that they are coming around to the idea that if they get rid of the negative rate first, that would be like a precursor to why cc being scrapped early next year. i do think that this boj meeting on the 30th of october is live. as far as that could announce.

i think you generate a bit of volatility in dollar-yen, but it would change the overall trajectory and i think it would probably have to enter the market. if i see that the market is taking on dollars still after a decision like that, that would really change intervention. shery: are we expecting to see any changes when it comes to the price -- price forecast for the boj? >> i think they might in they use that as a way to signal to the market. they are giving the market more insight as to their own expectations. if they do that -- the actual move won't come as a surprise, and might crawl volatility but it won't enhance it either. when they make a decision, it

could be nuts to -- much to do about nothing. it's been waiting for it for so long, but talking to someone in tokyo this morning, any pullback in dollar-yen itself, the trajectory spread between 10 year jgb's and treasuries is still very, very steep and the last 48 hours has been extremely steep. and that sort of galvanizes the dollar -- to take on the boj. they might have to, once they see the trade sufficiently crowded. they might have a market, even though it might not be the best time to do it, but just to try to bring the market back to heal a little bit. at which point it might jump up. tokyo said, they are at the 145 level. its fair value to reestablish it longer. shery: michael wilson, effects and rates reporter for bloomberg with the latest on the japanese yen and perhaps a trajectory of

the doj as we continue to watch it holding at 14986 level. very close to that 150 level as we await the latest september trade numbers as well. the expectations for the trade deficit to have likely widened in the month of september. you will see offshore yuan holding at that 732 level. we had seen a little bit of support were china's economic growth topping estimates. we had strong consumer spending. all of that really setting the aussie dollar and the kiwi dollar higher. be sure to tune into bloomberg radio to hear more from the days newsmakers and get in-depth analysis from the daybreak team broadcasting live from our studio in hong kong. listen through the app, radio plus or bloombergradio.com. plenty more ahead. stay with us. ♪

shery: breaking news out of japan. we are getting export numbers rising, surpassing expectations of a 3% growth. this leaves the trade surplus at six to 2.4 billion yen. the estimate was for deficit of more than ¥450 billion. imports contracted 16.3% year on year. the estimate was for a smaller

contraction. meaning the exports number of again of 4% for the month of september. we see that trade surplus coming in at more than ¥60 billion. perhaps that bottoming out of the global electronics some could have provided that boost. we did see rising crude oil patting it. at this point in time we saw a imports contracting faster than expected. haidi: bloomberg has learned that openai is in talks to selling existing employee shares added $86 billion valuation. what do we know? >> we know that the talks are ongoing, that they are currently in an 86 billion dollars valuation for the company. they are also still figuring out the allocations, which in -- which employees will get shares to sell.

haidi: when are we going to know a little bit more in one of the broader implications that we are looking at here? >> these talks have been ongoing, but the broader implication here is that ai is still very hot, that openai is not only the tech industry bit of artificial intelligence. this is a company with sam altman as a ceo, it has been paving the way with its chatgpt chatbot. it's one of the hottest things in tech, in ai, and this really just supports that there is a lot of buzz around this company and what it's doing. haidi: that's the thing. there has been so much market exuberance, is that still being maintained across the board or for openai? has there been a return to earth in terms of looking out which of

these companies can actually monetize and we actually see those benefits materializing sooner rather than later? >> i talk to people within the ai industry who things that the buzzes out in all-time high. in that we have to look at realistic expectations. even though this technology has a ton of ominous. it will be years before we see it play out in impact our lives and jobs in meaningful ways. ethic it's been interesting seeing these companies command major valuations at a time when tech venture valuation has slowed. but it will be interesting to see whether there will be a bit of a die down in terms of valuations as people get more realistic expectations. shery: we do have breaking news at the moment, we're are hearing from the venezuelan president speaking on state tv saying that

all of the sanctions against venezuela must be lifted. this coming at a time when the u.s. has suspended some sanctions on venezuelan oil, gas and go production. those impose on a certain freedom of the countries bonds have been suspended. this after the signing of a roadmap agreement between the venezuelan government of president maduro and the opposition. the treasury department said on wednesday that it issued a six-month license authorizing transactions. we are hearing from the president of venezuela, nicolas maduro, saying the return of 100 27 migrants as part of an accord with the united states. haidi: let's get you a quick look at markets trading across the markets in tokyo and seoul. when it comes to australia we are seeing a firm downside in this session. 1.5% lower. really following that softer u.s. session, the continued

selloff and treasuries and increasing tensions in the middle east and scrutiny over fed speakers are really in play. we are also seeing not just that slump when it comes to equities but also moves when it comes to us trillion bonds as well. just about every single sector trading in australia is in the red at the moment. the biggest losses seen across materials and real estate are 2%. consumer discretionary financials are not far behind that either. we do have the market open in seoul and tokyo. watching the potential for intervention when it comes to the japanese yen, as well as, it is bank of korea decision day. it's a fine balance when it comes to policy makers in the next direction. this is bloomberg. ♪ (adventurous music) ♪ ♪

♪ be ready for any market with a liquid etf. get in and out with dia. you're probably not easily persuaded to switch be mobile providersket 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 netw. wireless that works for you. it's not just possible.

shery: this is "daybreak asia", we are counting down to asia's major market open with the treasury slump continuing in the new york session and we are following earnings results in stock pricing after hours. haidi: not to mention fed speak and watching further developments when it comes to israel-hamas conflict as well as a major central-bank decision or two this week, including the brink of korea. annabelle: there are just really so many things for investors to wrap their head around, but we've got japan, korea and the start of trading. as you say, it really has been out that move we see off of the safe haven assets in the markets. things like high treasury yields, a firmer dollar really coming through in this session. in terms of what we see as we get the cash treasuries underway, we are just watching that 10 year yield fairly steady, but the move really has

been higher. that's also been playing out this morning because we have seen bond yields moving in the asian space. but the focus today, also on what we see with japan. because we do have an interview coming out with an export -- x board member saying they will scrap their negative interest rate settings by the end of this year, given the economic strength that we've been seeing coming through. that's one of the key interviews tracked on the terminal. so the reaction, we did see a bit of strength coming back into the yen. is continuing to hold close at the 150 mark. equities as well, just taking their cues from the wall street session. those macroeconomic dr. app -- backdrops which he political headwinds. nikkei 225 is down 1.5%. let's look at how we see korean asset setting up today. we do have that central-bank meeting that's due. the decision could come out

within this hour, otherwise over into the next. essentially, what we are expecting is they will keep the key interest rate steady at 3.5%. that's the decision seen by all 18 economists in our survey. but it would be the six straight hold because the bank of korea last time came back in january. something we are watching closely. what else they are tracking, this is a very corporate specific story but we did have the report out from local media saying south korea has arrested the cio of cookout for alleged -- cookout for stock price manipulation and that was over what was a high-profile take of that offer. we have more details in a moment, but you can see both of those stocks are slipping as we get online. let's change on and take a look at what we are seeing for australia because here we do have stocks under pressure. you can see the asx 200 down 1.4% and we are seeing a lot of

losses coming through and there's more rate sensitive sectors. things like real estate materials. what we do have as well as eco-data in the jobs numbers are very much a watch and what that means for the direction for the rba at its next meeting. also continuing to track the moves will be see in brent crude. we see wti stating it this morning but we did cross the headline this morning in terms of the u.s. ending sensation on venezuelan oil. and of course the main real story for us is that israel-hamas war in the market reaction to that in the applications as well. shery: the geopolitical tensions and risk off sentiment emanating from that is some of the better than expected growth data that we got out of china. our next guest says, we continue to see the chinese economic slump, and the biggest beneficiaries continue to be japan, india and southeast asia. joining us is the managing director and head of research

investments at k2 asset management. always great to have you with us. interesting to read your notes. talk about this winner from the loss happening in china. yet, you have a very big overweight on china. why? >> a combination of things. we like exporters to china as opposed to exporters within china, which is been in a pit bit over the last few years. and we like the commodity cycle still at this stage. this part of the restrictive policy in the developed market. with a very aggressive stimulatory environment within china. china pushing the unforgiving collapse in construction cycle and the debt overhang that they have. at the same time, the very strong stimulus and china is cushioning the downside. we have 5.520 30 calendar gdp six month ago and went up to

4.8, 4.9. so, supply is to china, energy, metals, commodities the same way they prefer it. when china reacts at all -- re-accelerates and getting out of their debt cycle and getting domestic demand, which is quite low as a percentage. it's just not really accelerating. it has really gone backwards. you have germany and that side of things. that's probably our view of china. structurally will remain underweight for the foreseeable future. shery: perhaps one of the reasons we have seen that skepticism from investors, really sentiment hasn't sustainably picked up when it comes to chinese assets. a lot of people have veered towards other markets that you say are some of the beneficiaries, like japan. the how long when there's uncertainty about what the boj might do? >> notwithstanding its largest

overweight within the outlook is the usa. in the dollar strength of is really hurting. japan has been a good performer year to date. we all know that they are going to get toward the end of their negative real rate cycle. there might be some indication. in is quite cautionary with jgb. there wasn't any increasing demand and that the yen weakness on the u.s. dollar strength we've had. nevertheless, japan is in a nice place for adding on cloud in general. and as a developed market. so we will maintain a neutral towards japan and overweight this year. that's the backdrop in southeast asia is a broad beneficiary of increase trade. that's involved with the ecosystem that includes china with the free trades working.

and then the trading platforms expanding brick economy in the southeast asian economy is partly in the brick economy and partly out of it. beneficiaries with this gdp globally is not collapsing, it's holding up. it's just the unevenness. it's very difficult to be predicting more volatile economic conditions and more volatile future earnings perspectives. haidi: has we are speaking we are seeing them elation ringgit weakening against the greenback. we see that for a lot of asian currencies with this resurgence of the u.s. dollar. where do see that playing out in a beneficial way? in terms of trade and the benefit for exporters in australia, that's actually one area you are pretty constructive on. >> terms of trade is very positive in southeast asia. and as a net commodity export.

whatever i change the forecast as we do, to month ago we were looking at the weakness and then we accelerated on a stronger -- there's the tower of headwinds of adversity where this is an sis the u.s. dollar. you have real rates holding higher. the soft landing implies the policy is more restrictive for much longer through the cycle and they lopez to start increasing. generally, that combination is not good. but sometime in the next three to four months we will be looking at consolidation of u.s. dollar strength and we obviously have to expect that to be by early 2024 or mid 2024. but that has been the big risk of play for the last fed meeting when they indicated to the dot plots that they would push out the scenario output and lower inflation. were by admitting the high real

rate environment as a headwind for earnings going forward and still predictably good in the u.s. to justify the soft landing. and that's a combination of things. this increases the volatility of economic conditions and increases the volatility of future credit conditions and future earning conditions. but still quality large-cap u.s. supplier in southeast asia are going back to that part of the geographical world. haidi: does the israel-hamas war change your outlook and expectations when it comes to inflation and how this end part of the great cycle ends, and also the outlook for energy? >> its unforgiving events for obvious reasons. we delay the markets and the answer is between five dollars and seven dollars and brent and

that is obviously not good for discretionary spending in the western world. increasingly in the emerging world and headline input -- headline inflation gives it the wrong start. that's why you have to bring it back to where policy prescription is in the western world and stick to rates for longer getting through there and that's an unfortunate consequence on that plan. remember, energy parts of been higher, which is been from year to date. the market has moved to the right, it's not as big as we thought. demand and supply restrictions coming from opec would be required in a timely basis and the transition in the developed world away from fossil fuels. the investment cycles is all underpinning that price and we do believe that 90 to 95 oh probably be there. haidi: always good to chat with you. let's get you back to hong kong

now and annabelle is taking a look at -- love is lee we saw that big down move when it comes to tesla, is it having impacts across this part of the world? annabelle: it is, when you look at the big suppliers in asia. we did see a bit of mixed moves for tesla in the after hours trading, but the third quarter results consensus estimates for profit for sales and also for margins. so analysts or investors expectations have been pretty low for this quarter coming into those numbers. so missing here are estimates. you can see that impact really coming through in tesla itself is off around 5% at this point -- this point in after our trade. the focus on geopolitics. first and foremost in this session, but it is still the earnings theme and we don't want to lose sight of either. taking a look at some of the chip equipment maker. this is the market very much dominated by tokyo in this part of the world, but we are seeing

this one slipping mostly. this is after we've had another major maker in the netherlands. oil is plunging in the third quarter and it really does show is that that chips up -- chip sector slump really does have a way to play out. let's take a look at a very stock specific story we are tracking. we are seeing shares of kick cow -- we did have local media reporting that. authorities have arrested the cio for alleged stock market or stock price manipulation. this was during the high-profile or response to the high-profile takeover of the k pop agency sm entertainment that has played out coming into that. but they are both -- the ownership of sm as a way to reach a broader audience and also to drive korean entertainment acts into the mainstream. this is local media reporting

that south korea has arrested the company cio over alleged stock price manipulation and that came through on thursday, reported this morning. we are seeing that market reaction. just another story we are tracking this morning. haidi: annabelle there in hong kong. we will bring you the latest when it comes to the israel-hamas war after president biden rep -- wrapped up his brief trip to tel aviv. 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. when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh

president biden: vast majority of palestinians are not hamas. hamas does not represent the palestinian people. hamas uses innocent families in gaza as human shields per their command centers, weapons, communication cow -- towers in residential areas. haidi: president biden speaking during his seven and a half hour trip to israel. he signaled his full backing to israel. let's bring in our correspondent for more analysis. do you think he achieved what he set out to achieve? >> i think he could do the best he did in the circumstances. once the blast happened at the

hospital, the neighboring states meant that it was too risky for egypt and jordan to be involved. but in terms of showing solidarity with israel, making it very clear to hezbollah, to iran that the u.s. is here, it's got israel's back, and just considering his age to walk into that war zone is the president of the u.s., i think he did the best he could. haidi: getting their regionals on board will be key to any diplomatic solution going forward. is that looking less likely? >> they did say that they would meet later and by inset on air force one he had spoken with egypt's president and agreed that they would open the border and aid convoys through. there was no impediment to that. but it does get difficult because the closer the u.s. is to israel, the harder it is to find that middle ground with the

surrounding countries. their populations are -- they see this hospital explosion and there is debate over who was responsible but they all blame the israeli defense forces. again, it just makes it really, really difficult to navigate for the u.s. and to find this nonmilitary solution. haidi: especially when president biden has taken a position on who he thinks was responsible for that. was there any progress made on the humanitarian front? >> apparently the border will be open tomorrow. the encroachment of aid borders because they said we have to get this through -- there is supposed to be 20 trucks that will go through with humanitarian aid. these areas haven't had much through the water coming through. we obviously have a lot of displaced people because people move from the north of the gaza strip to the south. the humanitarian situation would be very dire. the sooner their border opens, the better and we expect that to

happen. haidi: let's take a look at china, which has been an interesting role to play in all of this. president xi jinping reiterated his support for russia's effort to safeguard its national sovereignty. he met with his russian counterpart vladimir putin. bloomberg senior editor joins us now from shanghai. we have talked about how we hear that this is the friendship without limits. but, the dynamic between these two countries and these two leaders has changed recently. >> sure. i think china hasn't really done a whole lot. and having a little diplomatic isolation since the invasion of ukraine. china has benefited from

russia's problems. the fact is, china is getting a lot cheaper oil. such as huawei phones. basically band elsewhere in the world and selling a lot that goes to russia. and also they been able to increase the presence of global trade, something that they have been seeking for a long time. china has been benefiting a lot. right now, yuan is on the pipeline with china delaying any kind of -- making any kind of agreement on it. things have changed, but definitely to china's benefit. although you could say that president xi's closeness with it. but i think it is showing that

it is offering to throat away for a lot of these countries in developing asia, even developing your weight countries like hungary and serbia, a way to get access to cheaper financial development on the systems. shery: bloomberg senior editor in shanghai. russian president vladimir putin in chinese president xi jinping by have a no limits friendship but the alliance is not one of equals. since eu invasion of ukraine, moscow has become increasingly dependent on beijing. here's a special report on how ties between the two have changed. >> this massive ship highlights fallouts from the year -- warren ukraine because it's not a mazda dealership anymore. now sales vehicles made by the chinese carmaker.

in fact, russia is now the biggest buyer of chinese cars. imports have jumped fivefold as foreign automakers exit the russian market and cars are just part of the picture. there's oil, gas, electronics, clothing and plenty more besides. >> china is russia's largest trading partner made up about 20% of total imports back last year. >> russia's invasion of ukraine started tilting the balance of power in china's favor. >> the results of the war is that china has become, by far, russia's most important partner diplomatically, economically. the trading relationship has exploded. we reached 190 billion dollars last year. it grew another 40% towards the beginning of this year. >> china is benefiting from the relationship, securing access to russia's plentiful natural resources. >> for the u.s., for the west in

general, having china and russia allied makes for a pretty powerful opponent in the race to redraw the international order. shery: we have more to come on "daybreak asia". 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.

shery: the u.s. has suspended some sanctions of venezuelan oil, gas and coal production after the signing of an electro roadmap between the government at the opposition. bloomberg's latin american executive joins us now from mexico city. we are hearing from president maduro himself speaking on state television saying that venezuela is returning with string to the oil and gas markets. what exactly is being lifted in terms of sanctions, and how big of a difference will this make? >> it's a whole host of things.

it's a suspension or it's a six-month license for customers to do business with the state gold producer to do business with the oil company and to trade some of the ponds in the secondary market. it's a little bit technical, but it's not a full sanctions are lifted and everything is over moved. and that's because the u.s. wants to hold the streams and reverse its decision if it doesn't like what it sees in the coming months as venezuela hopes it will be a democratically fair and free presidential election. haidi: what do we see as the impacts on the broader markets? >> in the grand scheme of things, venezuelan oil production has been falling out for decades. it and so you are not really going to see just a massive

amount of oil gushing onto the market all of a sudden. the oil market has a likeness and certainly has cap some of the pressure off the price increases that we've been seeing. but in the grand scheme of things, this is kind of a drop in the bucket or a drop in the barrel. it's more symbolic right now then in the coming years we could see production ramp-up if indeed these sanctions continue to be eased in companies could invest more production in the company. shery: order the chances of the free and fair democratic elections happening. could you see the lifting of sanctions and inside it does not happen. >> you absolutely hit on the number one question. you will see the answer pretty soon. there's an opposition primary goal happening this sunday in venezuela. and the woman who is expected to win is maria.

who is sven have very tough contender and critical of the administration throughout the pre-campaign that we've been watching. she's currently band from holding office in venezuela through the next decade and so with the u.s. is set as we expect all candidates to be able to run and that includes her. so if she does when on sunday, the administration will have to show pretty quickly that it's going to be able to reinstate her and if not the u.s. has a real dilemma in its hands in the have to revoke and put these sanctions back in place. the next two weeks will be really interesting. >>

haidi: an employment change at 6700 new jobs were added to the economy. that is much fewer than expectations of 20,000 that was abroad and economist survey. bloomberg economics had been a little bit more positive expecting 25,000 jobs to be added to the labor market. 6700 is what we actually got. when it comes to the unemployment rate that's a little bit lower at 3.6 percent from 3.7%. further tightness there when it comes to engaging from the employment rate change. full-time employment we see almost 40,000 jobs, part-time employment in addition of 46,500 positions. that participation rate also taking just a little bit lower to 66.7 -- 66 .7%. there are expectations when it

comes to some economists that the unemployment rate will start to creep up, but we haven't seen that. that has ticked down to 3.6%. we have seen the surprising brazilians. not just in australia, but in the u.s. as well. we are also at the same time getting them now business confidence reading for the third quarter. it is seeing a full of one point. business conditions the next few months being held at 16. we did see the previous few months of readings with quite a bit of improvement in confidence as the rba has been sticking to its hold stance. but the recent comments from the rba's central bank governors suggesting potentially there is that risk of more to come in terms of rate hikes from the rba if the inflation warrants it. it would've taken a really strong be foreign any kind of

upwards momentum for the aussie dollar. annabelle: that's right. really the reaction is still that story of dollar strength coming through and that's playing out across a lot of different asset classes because when you take a look at what we see in the bond space, it's a story of yields moving high-end what has really been that flight to safety. as you said in the currencies base. the focus on the malaysian ringgit this morning. that currency is at a multiyear low and it's all about these rate differentials that are in focus. particularly for a lot of asian economies. the korean won. that one slipping in with a wrist sensitive currency. it just tells you that the aussie dollar is down three tense of a percent. a lot of commodities likewise are moving low. tracking the moves and oil throughout the session as well. equities wise, half an hour to the session for tokyo and seoul at 90 minutes into trading for australia. and you can see here, the losses

are really coming through across equities here for the most part. take a look at the sectors in particular focus today, because we do see those ones that are more sensitive to macro headwinds that are building into that. but it's things like materials, industrial stocks. so really not offsetting any of the brighter spots that came out some of their earnings. in netflix is really to watch. quite shares stored as much is 15% in extended trading after the company announced its raising prices for some customers, it posted its best quarter for subscriber growth in years. bloomberg su keenan joins us now with more on this. one analyst saying that there was nothing not to love from this result. su: as bloomberg intelligence analyst say, they effectively silenced the skeptics who thought subscriber ships should be lower now that netflix is starting to crack down on passwords. they actually blew away the

estimates, adding close to 9 million customers in the quarter, and that's what pushed shares, not only netflix, some of its rivals higher after hours. you see netflix one point by 15% vanish in close with 12.5% of that in tact, which should have a very bullish and pack on the u.s. open for thursday. let's talk about what the subscriber base means. it adds to the overall subscriber base, 247.2 million as a result, they were planning to raise prices for some customers in the u.s., u.k. in france. investors had some concerns. those were pretty much a raised, not only by the results, but by the conference call. highlights from the conference call. executives were very optimistic. they talked about how to crack down on password protection has also led to a surge in new customers. they are now on track to add more than 20 million customers.

that's a huge dump in 2022. just beginning to roll out the password. they see strong margins in 2024 and say there is no ceiling of margin saying they see greater profit ahead. they also point out that they have some of the strongest content lineups in this coming quarter than they pad in their history. so, highly optimistic, even though their outlook was a bit conservative. haidi: not so when it comes to tesla. su: elon musk was downright dour on the analyst call. we had seen tesla shares even a bit higher despite missing on profit and sales. but the analyst called and he talked about how high the interest rates are really impacting sales. you also know that there has been a lot of discounts in the pricing of the tesla models. those two things combined cause tesla to miss both on profit and sales.

there was talk about the cyber truck that actually pushed shares higher during the early part of the analyst call. at one point it was at 3% after hours. the cyber truck was the first one to be delivered next month and in november. when must started talking about the challenges, shares retreated. he said they could shift 20 to 50,000 per year but not until 2025. he warned it would take 18 months for the vehicle to be a significant positive cash flow contributor. here's a clue, we dug our own grave with the cyber truck. special products that come along only once in a while are incredibly difficult for the markets to be prosperous. again, a very disappointing quarter for tesla and even the cyber truck had left shares ultimately. haidi: investors are turning more cautious when it comes

ahead of the third quarter results duet on thursday. our next guest has tsmc and his top 10 holdings. the portfolio manager for -- joins us now. great to have you with us. there has been some optimism that we might be turning the corner when it comes to the global chip cycle that has been outweighed when it comes to the sentiment over more restrictions out of the u.s. on china. which part of that argument do you think is stronger for investors right now? >> first off, thanks for having me. when i look at the system, it's really a tale of two cities. on one hand, we have smart phones and pcs that are relatively weak. but we come out of that cycle and on the other hand we have artificial intelligence, which is just driving really strong growth for the space. if you look at ai, the overall ai chip is going from roughly $30 billion in 2023 to $150

million by 2027. that's nearly 50%. i think we have pieces moving back and forth. smartphones is a little weak coming from the bottom of an inventory session in ai that could drive strong growth for the space. haidi: talk to me about the ai side. what are you looking for that could give us a bit more indication of whether ai is actually starting to pay off, or whether it's not enough to offset some of the other negative elements. >> you hit the most important part. artificial intelligence is extraordinarily high. but you need a few key things to be great at ai. you need great data, you need great distribution and you need great capital for resources and imputing resources. who has all those things, hyper scalars in the u.s. the company to launch there is microsoft. right now we have their copilot product launching in november, but most importantly, they said

capex should increase every quarter from here. so the number you really need to see is does that turn into revenue growth, and we will see that growth this earnings season. shery: what about tsmc? >> with tsmc, they kind of follow the chip market. they are the leader in the stallworth for the market. we will see weakness in smartphones and pcs followed by strength in the ai business as we see am i300 and the back half of the year. nvidia has really strong revenue growth, and as a result, there's takes on the near term numbers. but we look out 18 to 24 months, which is what our investment time is, we feel great about tsm. shery: what do we see in terms of cloud consumption, have we seen the bottom? >> is a couple different moving parts. like i said, pcs have probably bottoms, smartphones are probably bottom.

that makes anywhere from 40% to 45% of the total chip market. for overall i.t. spending, cloud consumption is a lot of it. i point people to look at aws numbers and also different consumption numbers like data down. we will see if those companies have bottoming fundamentals. cloud consumption has probably bottom this quarter. shery: good to have you with us. you can go to tliv to get commentary and analysis from bloomberg's expert editors. as we get those earnings numbers. we also have results from the technology set to report the third quarter -- third quarter earnings on thursday. the firm is poised to sustain strong sales growth through the second half. bloomberg's asia transport reporter joins us now. what are we expecting? >> the world's biggest maker of

electric vehicles batteries is set to deliver its earnings after the market close here in asia. we are looking out for 110 billion on in revenue, 13,000,000,001 in net income. if these estimates hold true, that would be a 30% increase in net income. 13% increase in revenue. but on the revenue side it's a growth that holds true. that will be the biggest slowdown in years. we are watching out very very closely for that. we've been given kind of an indication of the performance because typically these fast growing companies, byd's, see, perform so well quarter on quarter, that they deliver earnings upside. they deliver preliminary estimates on profitability, which are better than what markets had expected. they haven't done that this time. haidi: what a day to be in the ev space.

we've seen stocks across the board and suppliers really sliding on the tesla downside we got overnight, but what about the domestic competition? >> they dominate the market domestically. globally they have a market share size of 37%. no one else comes close, the second competitor is byd and they make predominantly data riyal's for their own cars. we will watch closely for margins, how that performs, and particularly that read across into growth of revenue and profitability. this really is the backdrop of slowing growth in eb sales in china, and the question is really, how has that impacted see atl, if ever. but that's if they have the winning this in the stomach to defend their market share. also, what happened overnight with tesla with its earnings and sales miss. tesla is there biggest customer.

so is there a read across into the impact on that, we will be watching closely. haidi: we do have more to come here on "daybreak asia". this is bloomberg. ♪ that first time you take a step back.

i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy. shery: you're watching "daybreak

asia". morgan saw its worst one-day drop since june 2020 after releasing its third-quarter earnings. vonnie quinn joins us now with the latest. where did morgan stanley see the most damage? vonnie: almost 7% drop. we should mention that it actually beat the average analyst estimate, but many, many units suffer declines. for example, wealth management, that was down the fewest inflows since the pandemic in that particular unit and that's the unit james gorman really highlighted as the unit and post about and bragged about. investment revenue was down 20%. equity underwriting slumped. we had deals that they did not even get involved in. the arm deal was the deal that everybody in wall street wandered on and morgan didn't have a piece of that. let's take a look at wealth management first. it had set some ambitious targets after the acquisition of e*trade, now is the biggest wealth management unit on wall street.

but in q3, new net assets. for context, in the first half, assets were 200 billion dollars. so in the third quarter it doesn't put them on pace for a good second half. interestingly, the plan was to grow that profit in that business to $12 billion annually eventually. obviously now that is suffering. net interest income is just too billion dollars because wealthy clients are looking for a better return than what they are getting for their deposits at morgan. as for deals and capitalizing, you just saw the figures, a little bit of a reputational setback for morgan stanley. didn't have any part of the arm deal. it did get a role on exxon's pioneer acquisition, so that will help a little bit when it comes to capital markets raising when it comes to equity underwriting. let's us in a james gorman has to say because he is talking about a tone as they both did last quarter about the

dealmaking pipeline in the dealmaking coming back. >> we are seeing increasing evidence of m&a and underwriting calendars that are building. while we expect momentum to continue this year, given the fourth quarter has some seasonal considerations, we expect most of the activity to materialize in 2024. the minute you see the fed indicate they've stopped raising rates, the m&a and underwriting calendar will explode. vonnie: i guess it's just like everything else, it's fed dependent, the pipeline is there, and it will be an even stronger pipeline as soon as markets and companies and corporate's know exactly when the fed is going to stop moving or start lowering rates. haidi: will we get an update when it comes to succession? vonnie: nothing material. we know that there are three people that may or may not take over from james gorman. it's been very transparent, the

bank about that. we know that ted and stan -- and dan are in the running. it can make a dark horse as well. but what we definitely know is that james gorman is planning to be gone by may, if not sooner. he just underscored that. he said the bank is well into the succession process. and i'm quoting, we are close to picking a successor. as he would say, he is leaving the bank in good order for his successor, but this quarter won't be the standout one for this year, at least. haidi: plenty more to come here on "daybreak asia". this is bloomberg. ♪

(sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ 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. shery: breaking news out of south korea, we are seeing the bank of korea keeping the interest rate steady at 3.5%. this is six consecutive quarter from policymakers. they had last hiked back in january. of course there are concerns about inflation, price growth did pull out the part of the summer to get to that target at 2% level. before we saw the resurgence in august and september. as expected, 18 economist by the bloomberg, the bank of korea has kept the rate steady at 3.5% for a fifth consecutive hold. for more on this decision, the spring and bloomberg's effects and great strategist. david, i guess not necessarily surprising here, but what is in

the mind of policymakers in south korea? david: i think at the moment it's two things. one is that inflation did rise unexpected last month. you keep a hawkish stance going forward with a hike rate at the table. the other is that household debt is at a record. so the markets are really debatable. you say you are hawkish, but how much more will you push rates up given that it will have an application on consumer spending and just everything in general. i think at the moment we are looking for -- more than likely said one is left on the table and will leave that option there. the market is really going and less at the center of the voting , prominence is that the be ok has peaked and will stay this way for an amount of time. i don't think it will be cutting any time soon. that's certainly one think they would like to enforce at the press conference. haidi: in terms of the trade

dynamics that we see, how difficult is it for policymakers right now, particularly when you have the weakness in the yen? even the weakness you see with the malaysian ringgit weakening since 1998. we seen even after the jobs numbers, the aussie dollar failing to get much upward momentum? david: unfortunately, everything is weakening when you compare it to the dollar. you compared to the advantage you get that's minimal. big question going forward is really, what is global demand for the exports. if that's not picking up, you will see it's a problem. the u.s. economy is quite resilient. if you look at the eurozone, as well as the u.k. will go into recession and china grows. certainly the data was better than expected. there still questions about how good it would be going forward. if there is an improvement, would it be a slow one or would

it accelerate. so what is the other global growth that will pick up in a moment, and that could limit export -- exports. not produce for export countries. you are not seeing against the backdrop of high-yield shields. that's adding to dollar strength. you see that asian currency even if they are export related, under pressure. shery: how much does south korea actually need a rate cut? we have seen the potential growth rate in south korea continue to decline in the past few decades. at the same time, household debt is so big in the country. david: it's a very balancing act and depends on what you want to focus on. inflation did come in higher than expected, but a rate cut will be very questionable where the you want to stoke those inflationary fears. in terms of growth, growth data is out next week. we will see how strong that is. it could be a slow sign. but the catch is that the

government and the bank of korea is at the battle. if you do cut rates, do you spur it with some spending. given how some debt is at record levels, do you want to add to that worry. at the moment they are trying to juggle all these factors. at the moment they will keep rates where they are and keep them elevated for the near term. and at some point, yes, we will cut. but they don't want to settle that yet because the market will be proactive and say the option on the table, we will run with it and it will mean more one weakness, which is not positive for the bank of korea start. because that could feed more inflation. i think at the moment it is whether they may like to cut rates to support growth, that's not really a viable option at the moment. haidi: bloomberg's effects in great strategist. balancing the goals of keeping a lid on inflation and its rising

household debt against the need for further stressing on an economy that's already struggling with sluggish demand. take a look at the picture across markets trading across the region. that first hour or so of trading. we are seeing downside when it comes to korea, as well as stocks trading in tokyo. watching the chipmakers as we get those tsmc numbers later on today. we are seeing really pretty substantial downside when it comes to trading in australia as well. aussie bonds, could see a little bit more relief. we have that softer than expected jobs report when it comes to the number of jobs being added. unemployment rate is still holding pretty tight. it was a big loss in full-time unemployment. markets coverage is next. continuing with the start of trading in hong kong and shanghai. ♪

when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh

get help reaching your goals with j.p. morgan wealth plan, a digital money coach in the chase mobile® app. use it to set and track your goals, big and small... and see how changes you make today... could help put them within reach. from your first big move to retiring poolside - and the other goals along the way. wealth plan can help get you there. ♪ j.p. morgan wealth management. 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.

david: this is my kitchen table