♪ shery: you're watching daybreak asia coming to you live. >> counting down to asia's major market opens and australia has just, online. >> it is day two of the new economy forum. the top stories this hour. asian stocks have a positive start ahead of jay powell's speech. fonts are rising in a busy week for debt sales. disney subscribers top estimates while holdings give a disappointing forecast.

higher business lending rates. tokyo inflation ai and more with pwc chairman bob who joins us at the bloomberg new economy forum. >> we've got the open of the a sx 200, not much action but that is a testament or signal to the wall street session. it was high but feeling muted as well. asian equities are likely to be influenced by regional factors and china's inflation print's chief among them because we have cpi and ppi due out this morning and the data is expected to signal beijing needs to push their policy support so you can see the a sx 200 is steady, not seeing moves coming through in currencies and bonds. not just chinese inflation data,

there are earnings to watch. in japan today we've got 10% of the topics reporting, 220 companies. it's worth pointing out because japanese exporters have seen a boost to their bottom line from dollar strength. that is giving up steam in the dollar rally, something that could hurt exporters because this chart taking a look at equity relative correlations to the dollar index since 2010, japan is really standing out as the key market with high exposure to the direction of the dollar. shery: we're are watching the greenback, a little change after two sessions of games but look at how futures are coming online. downside pressure after the s&p rose marginally in the new york session for an eighth day. we had tech and real estate

leading the games. the vicks seeing its longest fall since 2015 and treasuries climbing, the 10 year yield dropping after a $40 billion auction. we are watching oil and seeing it rebounded slightly in the asian session, 4/10 of 1% after falling in new york on the concerns and signs of weakening economies. for more bloomberg's equities reporter alexander joins us now and really the stock market is all to do with what rates are doing. >> the stock rally is losing momentum. s&p was up for an eighth day but the gain was modest and you're starting to see buying fatigue after conditions got oversold and buyers stepped in abruptly. right now it is all about interest rates. bond market is in control and

yields are determining the direction of equities. we saw a big climb in treasury yields, 100 basis points since the summer and officials have said the bond market is doing the work for them, they won't have to deliver another hike as conditions tighten. we've seen yields come down and there's a question of how much has been undone and it's likely that fed officials can push back. jay powell's speech will be really important and it is likely investors will tune in to see if he makes remarks on the move in long-term rates. haidi: alexandra, i don't remember the last time we paid attention to treasury options when it comes to stock investors. alexandra: investors are used to paying attention to fed decision days, cpi days but treasury

options are a key event for stock investors. you been hearing that more lately because of the sway over equity prices. data from citigroup showed over two years on days of 30 year bond sales the s&p index has posted a move of 1% in either direction, more than the average move over the private or -- prior decade. there is increasing influence as everyone tries to see the reaction of yields. we had a bond auction and a sign that demand did not match the auction but not a big move in yields or equities. there is a 30 year sale tomorrow keeping investors on high alert. shery: we have powell speaking, what else are we watching? >> earnings. the market reaction has been lackluster because companies are

signaling waning demand. going into q4 there was a perception we would have a year end rally but that has not been the case. we will be paying attention to earnings in the coming weeks. walmart and target are bellwethers for the consumer to see how the economy holds up. shery: bloomberg's equities reporter alexandra. it is day number two of the bloomberg new economy forum in singapore and we will speak to industry leaders including global chairman of bob moretz and teal capital managing director jack. singapore's prime minister tells us a two state solution is the only way to find peace between israelis and palestinians, our exclusive interview is next. this is bloomberg. ♪

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♪ haidi: you're watching daybreak asia. just under 10 minutes into the session for australian stocks taking a look at lenders because chief among them is the national australian bank that reported this morning a cash profit for their year mists the analyst estimate and we saw big moves in business lending, something helped by rising rates. but the concern is given that we could be near the end of peak rates they could be about to lose a key driver of profitability. other stocks in focus, westpac

coming online down 3% but fairly mixed so far through the session. one key sector ahead of the open of tokyo at the top of the next hour. haidi: israel says 50,000 palestinians have fled to southern gaza as troops push deeper. there have been pauses in the offensive to allow civilians to flee and aid to arrive. foreign ministers of call for humanitarian pauses in the conflict. the war topped the agenda when the block meets in tokyo on wednesday. singapore's prime minister says a two state solution is the only way to promote peace between israelis and palestinians speaking with bloomberg at the new economy forum. he said any other approach risks endless conflict. >> what happened on the seventh of october was not just against

international law but a horrendous terrorist attack on an enormous scale so we understand how israel feels about it and why they have reacted the way they have done but what has happened since then in gaza as a consequence is in norma's human tragedy. the numbers keep taking up every day by as many as what happened on the seventh of october. women, children and innocent civilians on an enormous scale. everyone around the world looks at this in despair and says this has to stop. whatever the rights and wrongs, we must pay attention to humanitarian considerations and we have tried to express that in

past statements. i think it is important that we recognize both the evil things which are done in the first attack on the seventh of october and also the very tragic things which are happening in gaza now. we have to exhort the israelis to abide by international norms and have consideration for innocent civilians. >> do you think there is a long-term solution, is the two state solution possible? >> there is no alternative. it is very difficult but the alternative is a one state solution and that means one side or the other has to be squeezed out. and that is unimaginable so if we cannot work toward a two state solution we will be in this cycle of mutual destruction

for generations. >> do you worry about security in the region? you have next-door malaysia, they've come out vocally in support of palestinians. i see you have taken precautions about more tempers in this region. >> diplomatic positions is one thing and some support palestine, some support israel, singapore has diplomatic relationships with israel and friendly relations with palestinian authorities. so diplomatic support is not the difficulty. terrorism is a danger and you've seen lone wolf isolate attacks in europe, france, belgium somewhere. there was an attack. an innocent palestinian boy got killed in america. it can happen in this part of

the world. we've had individuals in singapore we picked up including teenagers who wanted to do terrible things and have bought bulletproof vests and knives and practice. some of them wanted to fight in the middle east on behalf of isis. some wanted to emulate the christchurch terrorist and attack muslims in singapore. at two mosques. so they are still terrorist groups within the region who have not disappeared. some who are affiliated with al qaeda who we picked up in singapore before they were about to do seven truck bomb attacks in singapore. it still exists in they are watching and some followers will

be riled up and may be do something so we have to take it very seriously. haidi: that was singapore's prime minister speaking exclusively at the new economy forum which is underway as we get into day number two. he discussed expectations when it comes to u.s. china relations ahead of a meeting between shooting ping and joe biden next week. >> a lot to tee it up so that the meeting can take place and be productive but i think that this is a very deep contradiction between the two countries and you need a meeting to head in the right direction but do not expect a meeting to make everything sweetness and light again, it is not possible. haidi: joining us is chief analyst jennifer welch.

speaking earlier he says he is optimistic that the meeting means that both leaders are reassessing the zero-sum game when it comes to the industrial rivalry. is that a way to approach this or should we manage expectations? >> i would manage expectations. the sign that there meeting is positive, the fact that amidst defenses, steps like u.s. restrictions on china's access to chips, the fact that their talking is positive but i don't think we are in the era of major shifts. the competition has become structural and enduring. haidi: of course it is interesting to hear from singapore's leaders because for so long this has been seen as an optimum way of how a smaller nation can have influence and balance alliances of china and the u.s. read >> singapore is

skilled at balancing relationships and has the unique position and insight into these great power dynamics. it is often a good source of information and insight when it comes to the u.s. china relationship. haidi: one of the conversations which is interesting is how we navigate decisions in u.s. hegemony's. you've got a dozen countries vying for resources regardless of the client. -- climate. what is your view of how we approach the new normal? >> it's a question for countries navigating supply chain shifts. this is a moment of opportunity for these countries to take advantage of tensions between u.s. and china and the effect that is having on companies and willingness to stay versus move out.

there are opportunities to be seized and challenges. haidi: great to chat with you and enjoy day number two of the forum. chief geo analyst jennifer welch. shery: the fragmentation issues you just talked about lead to concerns about inflation as supply chain's break and we see redundancies. with those tensions we have seen a spike in oil prices. our next guest is bullish on issues because he sees china's economy being more resilient in the u.s. economy slowing down. but executing a soft landing. jay hatfield is the ceo of capital advisors and joins us now in our studio. what are you thinking in terms of oil prices toward the end of the year? >> thanks for having me back. we are bullish about oil prices

and think though weakness right now is seasonal. so we had a warm beginning to the winter, gasoline demand is depressed from high prices last month but we think that next year we will have higher demand, we are bullish about the economy in china, the imf upgraded estimates for gdp. the other thing people don't appreciate in the u.s. is demand for oil in china is sticky, so it slowly grows and does not matter what the gdp is up. we are forecasting $95 oil for next year. shery: we had adam earlier talking about how china is suffering from long covid. where do you see resiliency? >> coming from two areas. the chinese central bank is really the only central bank easing policies so money supply

is growing, rates are coming down, that is not true in europe. european money supply is dropping dramatically, u.s. is flat and americans don't give china credit for china saving 45% of gdp and savings equal investments. so you will have higher secular growth. china would grow five or 6% so it's not difficult to maintain when you have savings unlike the u.s. when we have consumer savings. shery: endemic savings also being depleted and you mentioned europe is facing a slowdown. is that a reason why you are bullish on bonds going into next year? >> absolutely, there are two dynamics. we talked about oil which will show up in cpi. energy prices bleed into core and we have a role down in cpi

because of the calendar effect. we are bullish on inflation so that is good for bonds but if you look at the european economy and recent data it is horrific and a big driver is 45% of mortgages are floating in europe. whereas there are less than 10 here so when the ecb raises rates it is terrible for consumer spending but does not affect our consumers much. that is why you're seeing negative growth but it is getting worse. the ecb raised rates two times last quarter so that is a big impact. we think they will cut in the first quarter and that will be bullish for bonds. shery: what yields are we talking about next year. >> three and a half to 4%, 70 five basis points lower than we have right now which would be huge in the market. rates have been driving the

market for the last couple of months so it is probably the biggest rally next year, a normal santa claus rally this year but we have a 5000 target on the s&p for next year. shery: year end target for this year is 4500 with a santa claus rally. when it comes to as you mentioned rates driving stock markets we saw treasury sales and auctions being such a big deal. will that pressure in the bond space even more? >> investors are focused on that but it is more u.s. growth last quarter 5%, not sustainable. we think that will decelerate and we are focused on the global money supply, so that dropped by $1 trillion over the last two quarters.

if you look at a chart, when the ecb took 500 billion out of the money supply in the euro zone, that is when global bonds started selling off. u.s. investors focus on u.s. data but forget it is not the stock market but the bond market is global because bonds are interchangeable. apple is not interchangeable with any other countries in the world or not much at least, certainly not in europe. bonds are. bonds are global and can be myopic as investors focus on stocks but not bonds. ecb will be the critical inflection allowing bonds to rally. shery: what about the be oj? >> that is a risk to the extent that they stopped their bond buying and targeting rates but if you look they have not increased their money supply to keep rates low so there is a

trade-off. you have to raise the money supply to lower rates. there rates are lower than the u.s. so even though they seem low as 1% without the be oj they would be one and a half so it is not like it will be a catastrophe. shery: it will not be consequential. >> japan is separate but we don't think it will disrupt global markets. shery: he is ceo of infrastructure at capital advisors and bloomberg's new economy forum continues in singapore. this year's theme and embracing instability. we will hear from policymakers and executives discussing challenges ranging from inflation, geopolitical tensions, artificial intelligence and the climate. a few major forces on your screen including hillary clinton and john kerry. this is bloomberg. ♪

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>> you are watching daybreak asia. the top stories were tracking, wall street journal saying morgan stanley's wealth management is being scrutinized by the federal reserve. sources say the fed is looking into whether the bank has controls in place to prevent customers from low trade money. it stemmed from a routine review which escalated after they found due diligence lacking. eli lilly shares rose for the 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.

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haidi: this is daybreak asia.

annabelle: we are half an hour out for the opens of japan and korea. a bit of green but look at percentage moves because they are range bound and that tells us investors are cautious today because jay powell speaking thursday, will he push back on the dovish tilt, u.s. futures as well in here turning negative even though we've had eight straight days of gains but it appears investors are paying attention to it given the asx 200 is up half a percent at this point in the session. chinese inflation numbers are due in a few hours. cpi and ppi expected to underscore the chinese government needs to issue further stimulus because cpi

staying around zero. it is key to watch. it had been sliding for six months. an important component of the cpi basket. haidi: let's go back to singapore at the forum and my next guest is speaking this year and has been to a number of these events in the last six years that we have held of the forum. every year seems to be about embracing instability and i feel like i always ask you how is sentiment, what are you telling people to do? >> it is a bit muted around the world. no surprise when you look at the gdp and compression on margins and everyone driving for market share capture because you are not able to ride the curve of growth.

but you see two or three parts of the world that are are -- opportunistic. when you look at the upside potential and rise of consumer in southeast asia and supply chain management versus china, there is upside and so corporate's are trying to think through how and where to invest. it becomes important to measure risk versus returns right now. haidi: these newer markets, does it count away the risks of the downsides we see in china? what about auditing regulations we have seen. haidi: in the broader market you have to bring the balance from china into the mix. everyone in china is trying to rethink how to give myself

options and agility for whatever might come and we do not have the certainty. but the upside in the region is still relatively positive. in europe, a different situation so each ceo is focused on how to go after revenue, deal with the margin depression and the talent game. there is restructuring and other aspects and where to make capital investments. we still see upside potential when you look at the audit side but there is not enough trust in the system and so the result is can the profession serve a role when it comes to financial information and non-information needed by the stakeholder community and that is where you see rules and regulations come into place.

india has -- worldwide you will see some standards come in and that is where we have opportunities to try to develop value. shery: what about geopolitical tensions? we have the war in ukraine, u.s.-china tensions, and the war in the middle east. how do you tell ceo's to manage tensions? >> great to see you. geopolitics is icing on the cake right now because you have macro and micro economic issues. uncertainty from geopolitics adds to uncertainties. how do you think about scenario planning and bring more agility into your organization.

you want to be in the best position to move fast and minimize risk. it could be changes in supply change, changes in pricing, compliance with rules and regulations. so each team tries to think about it carefully and be faster in decision-making and those are the ones who survive and thrive in the next few years. shery: how much progress have you seen on near shoring or whatever you might call this? >> when you look at the supply chain issues that exist you see ceo's going back to basics. where to get the right economics, stability and certainty, more green, and how can i work with whoever will supply me with goods and to give

me the data to make those quick decisions. we are not seeing on shoring, bringing everything back to the home office. multiple options are being brought to the table. ceo's broadway -- probably are looking at optionality and agility. haidi: what options does your business have in china? >> with respect to china there are a number of ongoing things. u.s. china relationships brought it to a head where there was access to inspect accordingly so that will allow inspections to happen so that tension has decreased. what is more interesting is the reality of what the auditing profession is about going forward and you see regulators focusing more on inspections and

compliance to make sure good quality audits are done and what does the audit need to be in the nonfinancial space. capital markets are interested in that. haidi: i want to talk to you about australia's goal and [indiscernible] do you see more challenges ahead? >> the challenge in australia, we put in a number of different steps to move forward with transparency in order to regain trust. we bottomed out and now we are moving forward with remediation publicly. we will increase headcount on a raw basis. there will be ins and outs.

slowing in the deals market so you might see some reductions but you will see increases in other parts of the business so we are in the recruiting mode. haidi: in australia while the regulatory government get tougher? >> you will see continued investigations and a look again at what has to happen around the profession and the ecosystem. what do regulators and auditors do differently and that will be ongoing for the next two years and australia will look at what other countries did. haidi: is the potential split of audit and advisory something you

contemplate? >> we do not believe a split of the businesses makes any sense. it does not enhance quality or benefit stakeholders. we will continue to look at our portfolio but holistically we believe in the large scale [indiscernible] haidi: really great to talk to you, setting up the scene for a fantastic second day at the forum here in singapore and coming up we will speak with a number of industry leaders. this is bloomberg. ♪

shery: this is daybreak asia. arms shares falling after a chip designers first reports a disappointing sales forecast.

they see revenue in the current quarter of $800 million in the midpoint falling short of the average analyst estimate. arm is continuing to deal with licensing deal uncertainty. instacart has better than expected results in the third quarter. far ahead of the 120 $1 million consensus view, easing some investor concerns about the health of the underlying business. it also announced a $500 million share buyback. and disney topping profit estimates. theme parks and streaming continuing to the gains and cost-cutting measures were increased. they are seeking an extra $2 billion in reduction. su keenan joins us. this report comes as they are

getting pressure from an activist. >> he controls two point $5 billion in disney shares in the been pushing for a greater presence on the board as a result of concern over cost-cutting perhaps not being where it should be and they want to see a better succession plan so the profit increase and more aggressive cost-cutting will help bob iger push back against the plan. earnings came in better than expected. revenue grew 5.4%. it beat streaming losses and gains beat expectations, $150 million for -- 100 50 million subscribers for disney plus and an announcement of seeking additional cost-cutting. so 7.5 billion in annual expense

cutting and they have already eliminated 7000 jobs. nelson peltz dropped the initial push for more board seats after bob iger came back on board and shares were up after hours and have been up to present a 3% and the flagship theme parks delivered the biggest profit boost with earnings rising 31%. revenue in the division grew 12% . gains were led by 55% growth internationally, including some properties in asia. disney says most of fy 2024 growth in the parks will be in the second half and that they recommend a dividend by the end of the calendar year, something investors have been waiting to hear. haidi: we had a lot of

announcements including netflix and espn. >> bob iger was on that call and says he is optimistic about the future and there were a number of announcements and say there is serious interest on espn partnerships and they are talking with netflix to license content, including -- excluding the core brand but a deal nonetheless and expect to see roughly $8 million in free cash flow in fy 24. disney shares have been under significant pressure recently and the magic in the mouse house evaporating of late and shares have been down 8% in the years since bob iger famously came back from retirement under pressure to do more and succession plan is an issue and on the call he said he took a call from nelson peltz and did

not get into the details and disney is viewed as delivering a strong finish to the fiscal year despite industry headwinds and concern from those who are bearish on disney that it is mainly a consumer brands, has had lower streaming losses and made a commitment to reach profit in the fourth quarter and the shares tell the story but the after hours rally could provide a boost in the u.s. thursday open. back to you. haidi: su keenan with the latest on disney. we will stay with tech and softbank set to report the latest numbers thursday. let's bring in our technology reporter. what should we expect? >> they are expecting modest profits on -- at the group level

because we expect of boost from the arm ipo and reevaluation of softbank's arm stake is expected to help them improve the bottom line. but it does not mean they are completely out of the woods yet, because softbank now does not have any more big ipo plans in the pipeline that could lead to a valuation boost so there earnings will depend largely on the direction of the global equity market. so investors will have to hope that markets will be strong. shery: we saw the after our pressure given the disappointing sales forecast for arm. how big of a risk is this long-term? >> that's a very important point because softbank continues to hold a majority of its stake in

arm so if the stock price for arm continues to fall, it is definitely not a good sign for softbank and it will have an impact on softbank's earnings as they continue to be valued as one of the key assets but softbank does have a number of other assets that are subject to valuations, so if the overall equity markets are able to recover and head toward a higher valuation, it could get a boost from other assets but arm does continue to be a very important asset, so we will see what happens. shery: wework is filing -- filing for bankruptcy will we see [indiscernible]

trying to increase dealmaking? >> the timing of that bankruptcy announcement is unfortunate because it came right before earnings but what softbank has been signaling is they are ready to come back into investing after several quarters of a temporary break in investing. they have signaled they will invest but the pace of the investing will probably stay slower than before and probably we will not see any aggressive investing with all the lessons we work learned but definitely when talking about a few hundred million dollars investing in startups and more aggressive ones is something we can

anticipate slowly going forward, so we will continue following. shery: our technology reporter with the preview of softbank earnings as we get economic data out of japan, the current account surplus in japan widening to 2.72 ¥4 trillion, slightly missing expectations but it is still wider than in the previous month, the adjusted earnings also coming in above ¥2 trillion and this on the back of a trade a surplus widening to over ¥300 billion and really beating economist expectations not to mention that we are going from a deficit to a surplus when it comes to the trade numbers and really perhaps reflecting what we are seeing, the blowout -- the broader region because

south korea current accounts are also widening being led higher by a trade surplus as we see signs potentially of the chip slump bottoming out so the current account surplus in the trade surplus in japan widening for september. coming up, we continue live coverage of the bloomberg new economy forum in singapore and will speak with some industry leaders. this is bloomberg. ♪

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shery: it is day two of the bloomberg new economy forum in the singapore and the broader theme is embracing instability, whether it is in rates or geopolitics but also the theme seems to be seizing the moment and we are talking about a new economic era around the world and the struggle for energy security. haidi: and another thing that is interesting is the lack of continuity, the polarity of the

opportunities and major actors we are dealing with here. it's not just about u.s. and china, it's all the countries and all the positions they occupy in this juggling over energy, military, we have two big wars in ukraine and middle east and that has been dominating conversations with these ongoing conflicts and also this idea of how do we see these other countries outside the u.s. and china align themselves? we are here in singapore. middle nations can thrive with alliances and key trading partners and diplomatic partners in china as well and that is something a lot of countries will focus on as we head towards

a hopeful thawing of u.s. and china relations. a lot of it existential decisions to make with the boj and we are getting a summary with one member saying the need to adjust the level of easing will happen gradually and we have been watching that play out dramatically and one saying the chance of hitting the inflation goal is rising but there is still some distance from the 2% goal. we have the market opens in tokyo.

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shery: this is daybreak asia and we are counting down to the major market open as we see pressure on u.s. futures on some disappointing earnings results but the s&p 500 gained for an eighth sick -- eighth consecutive session and we are watching powell's comments thursday at an imf event. haidi: and looking at the summary of opinions from the boj watching the global outlier when it comes to monetary policy and how close they might be too normalization despite the sluggishness in real wage growth. annabelle: boj meeting minutes telling us members are split on the inflation outlook because some say there is a distance to the goal and others say it is in sight. the open for japan and south korea and the start of trade for clash treasuries and the 10-year

yield is muted at the start of trading given the focus on more fed speak ahead and we heard from jay powell wednesday but perhaps we will get more clarity thursday when he speaks at that event because traders want to know if he will push back on the dovish tilt that has been in markets the last few sessions. otherwise the big focus is earnings and japan has a large number of companies reporting the most softbank is one of them in focused and it is a 90% holder of the chip design company arm and you can see that stock down 9/10 of 1% as we get trading underway but broadly nikkei taking the cues from the wall street session up a 6/10 of 1% and earnings is a focus in korea with cook how stock fairly

steady as we get underway but we saw third quarter consolidated operating profit meeting estimates early this morning and the kospi and the cause stack are gaining in a session in the korean won fractionally firmer against the greenback but we are watching to see if it can move back down to the 1300 level that dipped under earlier this week so signal of risk-taking in the market at that point. in australia we are watching i.t. stocks, they've been lagging and energy movers given the pullback tracking what we have seen and brent crude pricing, below the $80 per barrel mark down 2.5 percent in the early parts of trade and broadly in the session for australia we will be sensitive to chinese inflation numbers coming out later so the cpi, ppi figures the focus given they could signal the need for china

to issue further inflation will for stimulus in the market shery ahn haidi. shery: for more let's bring in paul dobson. annabelle mentioned some earnings results and how we are watching them across asia and the u.s. but i wonder how much is the macro picture especially in terms of where rates go from here where we saw the 10 year yield really move after the option. paul: i do not think you can escape the rates conundrum right now. two different factors. the path the fed looks like and what the market appetite for the longer term debt is, particularly with inflationary impulses varying and fluctuating a lot. the supply and demand is

interesting, research from citigroup we talked about yesterday showed u.s. equities are more sensitive and move more on u.s. auction days and that shows the invert from the long-term interest rates is becoming more telling. we are at a one month level in the u.s. 30th year yields and there is optimism and there is a rundown in crude oil prices taking away inflationary impulses. is a good news or bad news, if you listen to lacey hunt who favors and invests strongly in

the 30 year bonds in the u.s. he is saying it is the start of something better and the yield rundown from here is good so there is plenty to watch out for in that respect. haidi: how is the positioning in asia? >> it is interesting. in the u.s. to asia's markets there has been a little precious signs coming through on the backend of the japanese yield curve after the run higher in recent months so we see the first signs of moderations here and the net impact of that across the stock market is that japanese banks had a very bad day yesterday so when their

earnings come up it will be interesting to see what they say next week on what their outlet is for explaining higher interest rates. the rest of asia is mixed. from u.s. treasury demand to asia bonded is not clear-cut that it is an overall positive. there have been some fluctuations as well. shery: what are we getting from earnings so far? >> a little mixed, as always. i was reading a report yesterday and it talked about how the earnings recession is over and earnings growth is back in starting to look more positive. it seems depending on what sector you look at their is some variety as well. right at the start it did not look that positive for big tech but that seems to have bounced back strongly with microsoft at

a record high this week for example so not all doom and gloom. as everything else continues coming through, there is some grounds for optimism. it is not seen as the economy keeling over but we knew the third quarter was strong in the u.s.. some early ones we saw the likes of caterpillar did not sound optimistic. haidi: paul dobson joining us. let's get you back for a look at the movers early in the session. annabelle: arm gave a tepid forecast in their first reporting since listing. softbank are is a holder of 90% in that stock. broadly in the session so far

chipmakers are mixed but mostly tilted to the downside. we are watching the consumer space. adidas reported results for the third quarter earlier in the european session wednesday and it slid as much as 2.6 percent and the results were in line with what treatment release figures were in october but some analysts concerned about the outlook for sales and spending in north america in particulars so you see retailers dropping so far in the session. shery: still ahead we head back to that forum in singapore and will speak with jennifer scott. but first, we will discuss venture investing in a high rate environment with jack selby.

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haidi: you are watching daybreak asia. israel says 50,000 palestinians have fled to southern gaza as troops push deeper into the north. the military says it has enacted some pauses to allow civilians to leave and aid to arrive. g7 is calling for more pauses in the conflict. the prime minister of singapore's says a two state solution is the only way to promote peace between israel and palestine. speaking exclusively with

bloomberg, he said any other approach risks endless conflict. >> what happen october 7 was not just against international law, but a horrendous terrorist attack on an enormous scale so we fully understand how the israelis feel about it and why they have reacted the way they have. but what has happened since then in gaza as a consequence of is really operations is -- of israeli operations is a tragedy. the death toll is going up every day. women, children, innocent civilians. the destruction is on an enormous scale and everyone around the world looks in despair and says, surely this has to stop.

there are rights and wrongs but we must pay attention to the humanitarian considerations. and we have tried to express that in our statements. i think it is important that we recognize both the evil things which were done in the first attack on october 7 and also the very tragic things that are happening in gaza now and we have to urge israel and everyone else to abide by international law and to have consideration for innocent civilians. >> is the two state solution still possible? >> there is no alternative. it is very difficult and it is far over the horizon but the alternative to a two state solution is a one state solution, which means one side or the other has to be pushed out and that is unimaginable.

so if you cannot work towards a two state solution, we will be in this cycle of mutual destruction for generations to come. >> do you worry about security in this region? next store in malaysia you have a man who has come out quite vocally in support of that palestinians. i see you have taken the some more precautions about more terrorism in the region because of the war. >> some country support palestine, others support israel, have diplomatic relations with israel and we have diplomatic relations with palestine. but terrorism is dangerous and you have seen lone wolf isolated attacks in europe, in france and

belgium. there was an attack where it in instant palestinian boy got attacked in america. it can happen in this part of the world. there are radicalized people, including teenagers who want to do terrible things who have bought will approve vests -- bullet proof vests and knives and practiced and some of them want to fight in the middle east on behalf of isis and others want to emulate the christchurch terrorist attack and attack muslims in singapore. we have two mosques and there are still terrorist groups in the region who have not disappeared. a group who is affiliated with al qaeda who we picked up before they were about to carry out

their attacks in singapore, the group still exists and they are watching on some of their followers will surely be riled up and maybe plan something. so we have to take it very seriously. shery: the prime minister of singapore speaking exclusively with bloomberg at the new economy forum. the latest geopolitical news, china's highest ranking generals says his country will work with russia to safeguard their interests as well as global and regional prosperity. he met with president putin in moscow. putin said cooperation between both militaries is developing and has achieved results. the ukrainian military says a commercial ship on the black sea was hit by russians wednesday and it was attacked at a key grain shipment hub and at least one was killed and four others

injured. kyiv recently opened up a unilateral cord or -- corridor. moscow had backed out of the you when grain deal in july. the prime minister of australia is poised to face them pointed questions. regional leaders have raised concerns over nuclear issues and australian is a signatory to was south pacific free zone treaty it plans a fleet of nuclear submarines as part of the alliance with washington and london. wti prices rebounding slightly, up 4/10 of 1% above the $75 per barrel level. it fell in the new york session under signs of ample supply

weighing on prices and we are waiting for more clues coming from the fed. the new economy forum continues in singapore and the theme is embracing instability and we will be hearing exclusively from world leaders, policymakers, and executives discussing challenges including inflation, geopolitics, the rise of ai, and climate emergencies. those are some of the major voices coming up on your screen. this is bloomberg. ♪

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shery: not a lot of movement in the treasury space but we see the 30 year yield slightly higher after reaching the lowest level in a month. treasuries reacting to an option

and we still have -- auction and we have another sale thursday and we will continue to watch for more u.s. government borrowing and how it affects the broader markets and rate movement and calculations by the fed. haidi: our next guest was one of paypal's first employees and then started a hedge fund. let's talk about venture capital . jack selby, managing director at [inaudible] great to have you with us. >> two papers have come out recently in the last months. one talks about nuclear energy and ubi and ai and the main

buzzwords going on in silicon valley right now. and then the memo about how we are living in a higher interest rate environment and for people in tech they need to wrap their heads around how to invest when the inflation is 5% versus 1%. haidi: how do you pick the winners? >> the companies that position themselves, if you give an entrepreneur capital up front and they take it and build the next spacex for 20 years and promise you a balloon payment, at the end of the year -- 20% --

20 years that is very difficult proposition. they will have a hard time getting funded. haidi: given the way the business is run in the vc space is it a helpful approach? >> in silken value to few vcs think about macro. -- in silicon valley, too few vcs think about macro. you also need awareness about what is going on with macro. you do not have to perfectly call it. the ones who ride the wave up and down will have a very difficult time raising funding.

haidi: is it the new dawn of ai? >> they will be ai superpowers. google, microsoft will be the superpowers will be cap it is intensive and for the rest of tech ai will be pervasive and it will be a component in most startups. haidi: the regulatory environment can be difficult for innovators in china. are there opportunities? >> i used to go to china almost once a month before geopolitics changed and i have not been back since. it is very difficult as an american. as long as geopolitics remain

difficult, it is hard as an american to comment but china is a long grow story but i will not be able to participate as much as i like. i think in the days after the great financial crisis there was a challenge in the sense that so many people wanted to be an entrepreneur. it attracted a lot of people to tech hubs who wanted to get on a gravy train, which is great because it drives the economy but it was difficult to identify who are the real ones versus fake ones so now after the economic downturn that has colder the herd. when i look at people that went into a startup today, it is

hard. haidi: your investments are more idiosyncratic. looking at the china money going into india and southeast asia, do you see more prospects for innovation? >> southeast asia is a market where this is very exciting. i believe people that are on the ground that no the markets will be the ones who capture the best investments so me coming in from california that will be difficult so you have to let the experts on the lead. haidi: well you are here and so the best of luck. shery: here are some of the

other top stories. the wall street journal says morgan stanley wealth management arm is being scrutinized by the federal reserve. the paper sources say the fed is looking at whether the bank has sufficient controls in place to prevent rich foreign customers from laundering money and the investigation is set to have stemmed from a review years ago that eventually escalated after it found their due diligence was lacking. eli lilly shares rose as a got u.s. approval for a diabetes drug that also treats obesity. it is sparking a battle for dominance in the growing weight loss market. the drug will be available by the end of the year and is cheaper than the rival. those who take the highest dose lost about 18% of their body weight. instacart delivered better-than-expected third-quarter results.

the adjusted earnings of $163 million were ahead of the consensus view, easing some investor concerns about the health of the underlying business. they announced a share buyback. plenty more to come on daybreak asia and we are live at the bloomberg new economy forum next. this is bloomberg. ♪ you want to be able to provide your child with the tools or resources they need. with reliable internet at home, through the internet essentials program, the world opened up. fellas, fellas. that's how my son was able to find the hidden genius project. we wanted to give y'all the necessary skills

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annabelle: this is daybreak asia

. we are half an hour into the session for japan. you can see the green on the screen behind me but look at some of the moves and you can see we are range bound and that tells us that investors are taking their cues from the wall street session we saw stocks entire for an eighth straight session but there is still wait and see given that inflation data from china is due in the next hour and said to speak in focus with jay powell set to speak again thursday so the question is if he is more hawkish than last week. that is the state of play as we get into the session. we are watching boj meeting minutes because it is impacting market sentiment. broadly the consensus that came through was the need for policy continuity and no further changes expected in the current fiscal year to rates and the

yield curve control programs so you can see the japanese yen getting close to the 151 mark. that is playing out in bank stocks because we have seen investors start to temper expectations of some sort of policy pivot from policymakers and you see the japanese bank index is dropping off somewhat so stocks down 5% on that index yesterday in the session and still extending today so lots of focus on and we did not really get to earnings as well. shery: arm really reflected the disappointing earnings we got in their first report since they are ipo and the stocks falling in the after hours session and the sales forecast did it. the company is contending with the smartphone's lunch -- smartphone slump. peter elstrom joins us. how concerning were the numbers

put out by arm? >> i think you described it exactly right. the results for the last quarter were actually pretty good. revenue was up 20% and beat estimates and profits were up but the forecast for the next quarter is kind of disappointing. they came in with a revenue projection that was a bit below what analysts expected and it is because of the smartphone slump. the industry is struggling with slow demand for smartphones and arm provides for a number of companies including apple. arm is trying to expand into servers and ai and other applications but at this point it is dependent on the smart phone market.

it has weighed on their financial results. haidi: what do we expect for softbank? >> it is interesting that we have these results coming so close together, a lot of drama around softbank, not just arm, and we work bankruptcy filing so when there is the close in tokyo, analysts expect the company will turn a profit and start up the markets has stabilized a bit from the big troubles in the past and that should help the company overall but it is a little bit of a black box at this point because they mark the valuations for their start ups and push it through the income statement so you see whether it shows up as profits or losses but a lot will depend on which ones they sold and which ones they invested in in the past quarter. haidi: peter elstrom joining us.

today is day two of the bloomberg new economy forum getting underway in singapore and it is getting busy behind me. one of the hot topics is the investment and rise of ai. let's bring in jennifer scott. great to have you with us. i was talking with jack selby a little earlier and he is more sanguine about the application of a why -- of ai that it is unproven despite the fervor. what is your view? >> i think it is well on the way to become generative technology in every aspect of our lives so this is a fragile moment for the history not just because how we can govern the safety of ai versus the speed of development,

there is a mix, but the geopolitics of detect like ai has made investment very complicated in the past few years. haidi: and then you overlay that with geopolitical tensions and tech rivalries, do you expect that to be alleviated soon? >> that is the hope. in the past few years when the tech war started in 2018, the life of investors and entrepreneurs became more complicated. looking at the world ecosystem in terms of detect like ai there are still two markets, u.s. and china, and the most important was relative -- relevant. but because of the geopolitics, and the perceived risk, people start to sell center and that

has impacted a lot of capital flow and exchange of new ideas so let's see. it seems in this forum we see some signs of the relationships getting a little bit better so let's see if we can have some positive change in the coming year. haidi: you have to think that tech will be a tough ask to find that collaboration. if we proceed with the idea of continued decoupling when it comes to tech, how hard is it for investors to choose? >> we have been choosing in the past few years. it is not impossible, but it just makes the process more complicated. it is very important to address the u.s. and china ecosystems are very different. they are going to different things. the u.s. is very good, companies

like deep mine and openai with u.s. patient capital going to deep tech, those companies can still innovate so 021 the u.s. will come first. the reason china is not as good at that is if you cannot commercialize, it will not be invested so if we can combine both ecosystems, it could be used to benefit the entire global market. i know that practically it will not happen. haidi: let me talk with you

about the domestic situation in china. some say there is a loss -- the risk of a loss decade. do you share that view? >> the innovation energy is always there in terms of the strong stem education and sheer number of engineers that graduate from china universities every year but in the past few years what has been dampened is confidence. when that is damaged, people will hesitate. so i am hoping the next few years as the economy recovers there will be examples that people can be successful and enjoy success and it would encourage younger generations to innovate.

we all need to continue to push forward. haidi: funding is getting harder to come by and the environment is deteriorating. what makes you want to invest in something? >> in terms of ai it reminds me a little of the crypto market. so many companies are coming out. but i think very soon we will see a bloodbath in that market for companies that do not have proprietary models or expertise or ip's in that specific field of that application, perhaps they just used to someone else's model, these type of applications will probably not withstand the test of time and thousands of companies will be gone so what we are looking at is companies that have very

specialized applications with a high entry barrier in order to get into the space and be able to effectively use ai to elevate. health care, etc.. those are the areas that are harder to get into and coming back to the point of humanity, there are several issues like health care that everyone needs so i am hoping that kind of company will be able to go beyond investor markets. haidi: jennifer, another great conversation we are having here at the new economy forum sherry. the chase ink business premier card is made for people like sam, who make- everyday products, designed smarter. like a smart coffee grinder, that orders fresh beans for you.

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shery: equities across asia trading have a mixed picture given we see some sectors like health care gaining ground but energy and financial sectors down in asia and we have energy at the moment rebounding with wti above $75 a barrel but in

the new york session it fell. there are concerns over demand as we continue seeing signs of weakening economies and apple supplies and a lot to do with what is going to happen with the federal reserve and the path for interest rates. we are seeing u.s. futures under pressure and the big concerns now over where the fed goes from here. we will see another rate hike in the tightening cycle but at the same time some earnings results disappointing so we saw pressure in the after word session so we are down 2/10 of 1% and at the same time given that we are continuing to see higher rates for longer in the u.s. while the japanese policymakers continue its ultra loose policy we are now seeing rate differentials weighing on the japanese yen that is nearing the 151 level at continue to watch any sort of

intervention side coming from japanese authorities but today the economic data more positive with a surplus widening in japan, a similar picture in korea which is what led to the korean won strengthening in the previous session although right now we are holding at the 1311 level and seeing a little pressure against the u.s. dollar which has little change in the new york session after gaining ground for two sessions but really it is all of these concerns about the macro environment coming elation, geopolitics playing into the markets. some of the topics really discussed at the new economy forum in singapore and one question was what is happening with global -- globalization. >> we have to do our best to diversify anti-risk but we are still hopeful with trade,

investment, technology. >> you are never going to unwind that there will be tipping points and feedback loops across the world. >> in the most difficult times in history, human beings cooperate in different ways. there has never been the case where there is no connection and cooperation, collaboration. >> i do not think the world can afford even higher inflation or re-papering every supply chain and the social unrest that would come from higher interest rates and lower economic growth. haidi: we've been talking about china and how the slowdown will play out and the october inflation report is due in the next hour. economic risks are among some of the topics being tackled at this

forum and i want to bring our chief economist and yvonne man into this conversation and we are joking it is a lack of inflation but specifically looking at how correlated the property market slow down is across the broader economy. >> there are a couple of takeaways from this cpi vi data release. the first is china's economy remains in a tough spot. zero inflation in consumer prices and producer prices falling, that shows a lack of demand in the economy. the second take away is low inflation itself adds an additional problem for china. think about japan in the last decade. one problem was prices rose and that means real borrowing costs were higher, creating a disincentive for investment and the animal spirit needed to get the economy going.

so inflation data today i'm a probably close to zero on cpi and another negative print on ppi. not positive for the chinese economy. yvonne: i think it lends itself to why we see geopolitics temperature being brought down a bit. there is more urban see pro simply from president xi to meet with the u.s. counterparts and that is why we have janet yellen on the phone later, but we heard a lot of talk about geopolitics and i think the foreign minister of singapore had a sort of dark look when it came to the overall sphere, warning to dangers, flashpoints, it is the same cast of characters he says that are almost like what we saw of world war i.

others were more measured about geopolitics and offered a more positive tone. but geopolitics we have seen here in singapore has been a dominant theme the last few days. haidi: it grows to the bandwidth of what the global economy structure can handle. is there a chance we see not just beijing but also washington look at the zero-sum industrial competition and think maybe it is not working out? >> i think there is something to the idea that you cannot fight wars on many fronts at the same time. to come back to yvonne's point, china is fighting to restore growth at home, battling real estate, debt. is it the right moment to have a really challenging relationship

with the united states, or do they maybe want a little stability in this important relationship. i think what we heard from the vice president yesterday and what i expect we will see in janet yellen's meeting and president she's meeting with joe biden is that they want to restore stability. on the u.s. fronts, the u.s. is engaged in supporting ukraine. it is engaged in supporting israel and trying to broker an extremely challenging situation in the middle east. is this a moment when they want the escalating row with china? probably not. so i think the incentives of beijing and washington are aligned in bringing stability back. yvonne: during your panel yesterday you asked how this will impact the market. investors are looking for positive signals. i am looking forward -- forward

to a panel, king -- ken griffin from citadel, a lot of wall street banks were retreating from the mainland in the last three years and it will be interesting to get his take because we cannot ignore china right now and we have plenty of guests coming up about where opportunities are now and how they manage volatility. haidi: you look at the valuation and the story, the demographics of china are changing but it is an economy that cannot be ignored and i find it interesting when we have this event in singapore, because singapore is always called a middle economy but it can balance the relationship on both sides. this idea about what it looks like to navigate the polarity in

the world and all these different doctors to compete for -- actors to compete for resources, should there be more collaboration? >> as we heard from prime minister lee and singapore's foreign secretary yesterday, singapore is a country that has thrived because globalization has worked. it is eight global financial center, logistics shipping center, it works because globalization works. if globalization stops working, it will be a problem for singapore. there are other economies that could potentially benefit. it will be negative for the world but if you think about places like mexico, vietnam, morocco, they are already getting a bigger share of the global trade party as goods start flowing in a way that tries to avoid the geopolitical faultlines. haidi: tom and yvonne, great to

have you with us. they will be with you the next hour teasing some of the crucial conversations we will be happening here on a date two of the bloomberg new economy form and sherry, you have some breaking news. shery: it seems after nearly a four month strike come up we are finally seeing hollywood studios actors tentatively agreeing on a new deal according to the los angeles times. sag-aftra, the union that represents the hollywood actors, the negotiating committee has approved a tentative deal with major studios that would end production being shattered. this must still be ratified by union board members but the los angeles times reporting it would boost the minimum pay for members, increased residuals for shows streamed online, and bolster contributions to the

union health and pension plans, establish new rules for the use of ai, which was a major source of concern for actors as we continue seeing the strike on going more than 100 days pushing back film and television schedules, it looks like we may now have a tentative deal. this is bloomberg. ♪

shery: futures under pressure after marginal gains in the new york session and we are gearing up towards comments from chair powell at an imf event, not to mention a 24 billion dollars sale of 30 year options that could sway the stock markets. we are watching the offshore yuan at the 728 level for almost the whole week as we wait for cpi and ppi numbers and coming up, we continued talking about china at the bloomberg new economy form in singapore and we will hear from sing thai capital founder and ceo. the china open is next. this is bloomberg. ♪

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