haidi: you're watching "daybreak: asia," coming to you

live from sydney and hong kong. we are counting down to the open in sow. annabelle: australia has just come online and the top stories this hour. investors cautiously assessing interest rates' outlook after a pickup in the jobs growth and wage gains. focus is shifting to the official report in the u.s., japan, and china. the grounding of boeing's 7379 maxs goes global. and a bloomberg's group, u.s. intelligence revealing widespread corruption is behind president xi's sweeping purge of china's military. haidi: such a good story and will get you more details in the moment. but look at the open as belle alluded to, a bit choppy, a bit thin on the ground in terms of liquidity. japan is closed to the coming-of-age holiday today so we will not have japanese markets trading.

this is a picture as we get into the start of trading here in australia. a staggered open. not much change at the moment. we are watching for potentially some plays when it comes to the next leg of trading for the aussie dollar. we have seen the inflation test being imposed as you get one of many readings -- u.s. inflation, but also inflation gauges out of australia. . the latest 2023 rally when it comes to the aussie dollar could be seen as a significant hurdle this week. the aussie dollar is exited to strengthen the case for the rba to full through earlier rate cuts, it jumped 10% against the greenback since last october. the focus is shifting this week, i mentioned uscp i already, but we are expecting inflation reads out of japan, ppi and cpi reads out of china as well, not excited to be good news. and friday's session with the mr. jobs activity -- with the mixed jobs and activity

data. china futures are holding steady at this point. we do have a big week when it comes to the eco counterpoints to china that suggest further weakness in the potentially more needs to be done by policymakers there. annabelle: certainly a lot of different traders are garnering for more supportive measures from the pboc. the direction for stocks in the u.s., we're just getting some futures coming online, again, fairly steady. yes a bit of greenback movement. but you have to put it in perspective here because we had the worst week for u.s. stocks since late october, really down to the changing expectations around where the fed goes next. . you mentioned the u.s. inflation print. it will be pivotal in the next few days. jobs were stronger at the headline level, but cracks certainly beneath the surface. watching treasury bond futures. study so far, but we saw the slump resuming in the friday

session notching a weekly slide. . we have the yield curve trading above 4%. oil markets to note, wti and brent crude both coming online, a bit of weakness coming through. we have seen saudi arabia cutting crude prices for buyers in all regions, including in asia. persistent weakness is the trend developing here even though there is a seasonality factor to it. global oil supply has been strong, telling us that perhaps opec+ will need to extend the output cuts. let's shift to the developing top story over the weekend -- -- airlines worldwide have began grounding boeing's 737 max nine after a section of fuselage and a brand-new alaska airlines jet blue out during a flight on friday. it's the most. in a string of recent quality lapses putting the playmaker's 2024 comeback plan in action.

joining us is our asia transit reporter danny lee. we know the investigations in the early hours, a lot of different intel is coming out on this, but how are airlines and regulars reacting to what happened on friday? >> a difficult weekend for boeing and alaska airlines and the crew and passengers on board the flight. for alaska airlines, they are the second biggest operator of that lane and they have grounded all 65 of their jets, followed by united airlines, the biggest operator. that followed another round of airlines who followed suit such as aeromexico, go by airlines and turkish airlines. a limited number of airlines over all operate this jet. they will be waiting for u.s. administration to see what steps they may need to take to make checks to the plane that are satisfactory to the faa and potentially what remedies the many to put in place before the

plane returns to service. it takes us to the regulators who -- that the faa put out a statement saying they would keep the 737 max nine grounded until they are satisfied it is dave to fly. so it may feel like a long and drawnout grounding potentially in the near term. for the faa, they took action. 171 out of 250 max nine jets were grounded. that was followed by the u.k. and the e.u. who said they would follow the faa's directive. but they didn't have any aircraft in the region. india followed suit. they also did not have any aircraft affected. china also, we heard they were holding an emergency meeting on saturday but nothing has come of it so far than taking action. they were considering. we will be watching closely on monday if anything does happen.

haidi: the question is, how many more of these bad headlines can boeing take? they are just five days into this new year, new comeback plan. when our customers going to start wavering on their confidence in these aircraft? >> no doubt this is a reputational hit for boeing, not least for after the 2019 global grounding of the 737 max fleet worldwide and that came after two fatal crashes. but in recent months, we have seen serious manufacturing and quality lapses not just on parked boeing, but principally responsible spirit everest systems, the main supplier to boeing on this max jet. we haven't heard from spirit since the incident took place, we are watching to see if spirit has anything to say on monday. but for boeing, it's hard to know what kind of natural impact there will be in the near term, but for the airlines, no doubt they will be seeking financial remedies because of the

grounding that has taken place in the huge impact to the schedules and to passengers that the airlines will need to recoup from. looking at the current investigation, it has only been going out for the last several hours, they only started in the u.s. on sunday. the ntsb, the national transportation safety board chair said on saturday night that it is more fortunate that this was that this was not a more serious tragedy. they will be looking though there for the manufacturing quality that goes into said aircraft. it will also be looking at all kinds of things such as the pressurization set up for these aircraft and how the components around the door look after this blowout took place on saturday night. and we will be watching closely to see what happens in the days to come. haidi: haidi: our asia transport reporter danny lee there.

bloomberg has been told that chinese president xi jinping's sweeping military purge has, the response to widespread corruption that is undermining his efforts to modernize the armed forces. such a delight to have you here in sydney and on this incredible bloomberg scoop, rebecca choong wilkins. when this was played out last year, we were wondering, what is going on, where are we seeing these individuals being purged? now, we have a good idea. rebecca: it is a notoriously opaque part of the chinese establishment, so really extraordinary reporting here from my colleagues in d.c., essentially pointing to the flaws in china's military preparedness specifically when it comes to missiles. u.s. intelligence sources telling us that is what is behind this sweeping purdue have seen in terms of the known figures, at least 15 people from the defense establishment purged in recent months. some of the extraordinary insights we got in this story include things like missiles

being filled with water instead of fuel, as well as hundreds of these missiles that are situated in western china actually not having the links that allow them to be fired at all. it does go, we think, in some way, to explain where we are seeing this radical revamp, which includes the unprecedented removal, at least in the modern era, of these two members of the politburo late last year, on the defense side, and the foreign minister teeing ground. annabelle: given the extent of the corruption he just stated, how does this support xi contemplating military action in the coming years. is it a step back in that timeline? rebecca: in the view of the u.s., it certainly seems to be a setback. that is how they rationalize and why it is that xi jinping has come down so swiftly and so hard

on these very, very senior figures that presumably one would have thought would have been very closely vetted before being raised into the ascendancy's. what is notable about this purge is that some of these figures have now been removed, they were actually elevated by very senior figures within the chinese establishment themselves. . china for its part, continues to affirm that it is inevitable that it will reunify, in its own language, with taiwan, a democratically run island which is about to see its own elections. but that issue of the flashpoint of taiwan and china's military preparedness for its potential conflict with taiwan is really front of mind here in this story. haidi: does it change the picture going into saturday's vote a little bit in terms of the pressure on these cross-strait relations? we do have five u.s. defense

members being sanctioned for arms sales to taipei. rebecca: secondly, china has long felt vocal about pushing back against u.s. support or other proceeds, u.s. report for taiwan. the sanctioning of these five firms appears symbolic in nature, because they don't really operate in china. so largely symbolic, but certainly important part of the narrative, and for many taiwanese, of course, the threat of china and the reality of having long-lived in the shadow of mainland china, it is informing their decisions as they go into the elections. haidi: of course, taking place on saturday. asian government and economy correspondent rebecca choong wilkins here with our top story. the vote is set to go underway next weekend, the vote for the new president of taiwan. stay tuned to bloomberg tv all week, will have live updates ahead of that high-stakes

election. for full coverage of those results. u.s. secretary of state anthony blinken warned that the israel-hamas war could easily spill over to a full-blown regional conflict it comes, as he travels across the middle east in an attempt to calm tensions and urge israel to do more to protect civilians in gaza. for more let's bring in bloomberg's vonnie quinn. this is i think his fourth major trip since october 7 when the attack happened. what is he hoping to achieve? it's a pretty protracted difficult situation. vonnie: vonnie: bottom line, preventing outright war, that is initiative taken here, haidi. broader initiatives would include coleman tensions in the region and trying to find out what may be a solution post the war for gaza. we know nobody's on the same page on that at the moment. but this is a very widespread tour, he landed in doha on

saturday. before that he had spoken to the jordanian king. also he had been to turkey and greece. after doha, he was headed to the u.a.e., followed by stops in saudi arabia, israel, the west bank and egypt, trying to talk to parties around the region. we know qatar has been helpful with the hostage situation, helped broker the release of more than 100 israeli hostages. qatar, though, given in this conference, there prime minister colin firth a broader cease-fire that would end the violence. that is not going to happen. israel and the united states do not agree, they argue that would allow hamas and other actors to launch attacks the motor to the one on october 7, for example. but at the same news conference, the u.s. secretary of state said this call back "this is a moment of profound tension in the

region, a conflict that could easily metastasize causing more insecurity and even more suffering. this, as we are seeing a lot more insecurity, particularly at the south of the border between lebanon and israel." we are seeing constant rockets and retaliation for what hamas says was an attack in the killing of one of hamas's senior officials by israel. again, those rocket attacks continue over the border to israel. in the last hour, the ap reporting that the israel army has said that hezbollah has struck error control towers. it did not hurt anybody. that was the latest attack. israel wants its residents to be able to return to the north of the country that orders lebanon -- borders lebanon. annabelle: the attacks on the red sea, what sort of conversations is anthony blinken likely to be having with counterparts in the region about them the decisions on what to do

with these strikes from houthi militants? vonnie: exactly, another very, very difficult situation which could turn into a conflagration at any time. something needs to be done now because the u.s. and its allies on this topic have warned that something would happen if the houthi rebels do not stop. the houthi rebels have said they will not stop, and they are, of course, backed by iran. the u.s. may try to rely on diplomacy, we know president biden's special envoy for yemen will travel to join anthony blinken, the secretary of state, next week. that will be the best and easiest option. if that does not work, there is the option of targeted strikes degrading the houthis'ability to fire at ships. also designating the houthis as terrorists or targeting their financing. and there is an interesting one -- appeasement. you could offer financial incentives for a permanent

cease-fire. that would have to be overseen by the united nations. indecision will have to come very soon. annabelle: that is vonnie quinn, in new york. still ahead, japanese prime minister fumio kishida hit by yet another blow after a ruling party lawmaker is arrested over a widening slush fund scandal. and this company tells us why they are taking a cautious approach as we head into 2024. that is next. this is bloomberg. ♪

annabelle: here watching "daybreak: asia." let's take a look at the week ahead. u.s. inflation numbers for december, on thursday. dpi including -- excluding third -- cpi excluding food and fuel

is expected to have risen as the year came to a close. also expecting inflation numbers from tokyo, australia, india and china. watch for the back of australia's rate decision, bloomberg expects it to keep his hawkish pattern amid concerns about private-sector sector debt perusing a risk to financial stability. trade figures from australia and china. industrial production numbers from india. we will also be on watch for earnings from major companies in asia such as, samsung which is set to benefit from ai to demand this year -- ai chip demand this year. that is your week ahead. haidi: it is a bit weak indeed. let's bring in jun bei liu portfolio manager at tribeca investment partners. we started the year with the same seamless as we ended last year. primarily it's about what the fed will do and how that

eventually impacts market expectations. is that a steady as she goes year, do you think,? where do you see opportunities? jun-bei: absolutely. we think there will be volatility this year but we have become very bullish across the equity market -- clearly we had a very strong december -- but fundamentals for this calendar year look really strong. we have quite enough time for the corporates to price in, work with higher costs and price in prices and the like and deal with weakening demand. analyst expectations are reasonable, in valuation for some sectors is reasonable. above all, we think the interest rate cycle is in a good place compared to where 12 months ago. all of that together is pretty positive for the equity market. clearly see a reporting season, we will see weakening earnings, but a lot of that should be well-expected by analysts. haidi: where do you see, if not

cheap, reasonable valuations? jun-bei: i think across the market, clearly some of the growth names have rallied aggressively. the tech sector is looking expensive and the opportunity lies where a company's earnings have been infected by slowing demand and higher cost. the next 12 months will be a better place. this would be the cyclical companies. within retail, earnings clearly are going to be tough for the upcoming february reporting season. . but the consumer is reducing spending slowly. not a collapse, as we had previously expected. i think they will be able to cope with a better environment to head. but earnings will reduce. but i think expectations are reasonable enough, valuations are cheap enough, and if we are talking about yesterday market some, of the retailers have some tailwinds to come in the next 12 months. the first of the year, but the

second part of the year. look across other sectors, we like commodities. we think china is finally turning the corner, slowly, but they will drive much-needed growth for that space. we see some of the commodity prices already rallying quite aggressively. haidi: perhaps unreasonably so, when you look at iron ore, right? jun-bei: quite right. we think the price will hold reasonably given the supply demand dynamics and the inventory level over there. perhaps it will be weakening towards the end of the year, but that commodity outperformed everything else. there is a lot of opportunity if you go further down the track where they have yet to respond to a growing china. , growing china? for lower growth for longer china scenario? jun-bei: it is a growing china. growth will slow down but this year will not be the year. they are recovering from what

was a very prolonged period of slow down and recovery. we think this year will be the year of people gather pace but perhaps over the long-term, we do have to see some of those structural indicators come through. it is too early to call. haidi: what do you like in china? jun-bei: in china, we prefer more consumer-facing as well as the likes of travel and restaurants and the like. i think this upcoming chinese new year is going to bring quite a lot of consumption. in the previous travel, period -- the thief travel period a few months ago, the consumer was robust. even though the consumer is cautious with what they pending on, in the coming periods, it will look better. , we know that the president with the growth drivers to come from things like evs, batteries and renewables. is that space interesting? jun-bei: absolutely. they always when you invest in

china you need to follow the policy drives. a lot of that is, you need to look at the supply. whether they have the commodity. where they need to outsource. also, some of the ev makers within china, you need to look into the rest of them. next five years, we think there is a lot of a fraternity coming off in that whole evs base. haidi: jun bei liu is portfolio manager at tribeca investment partners, always good to have you with us. anymore to on "daybreak: asia." this is bloomberg. ♪ -- plenty more to come here on "daybreak: asia."

annabelle: a quick check on how trading is going this morning. ozzie and qe notes trending to the upside -- aussie and

kiwi notes trending to the upside. i whipsaw coming through for treasuries, a reaction to the jobs report. there were signals of crack that emerged. you have all the treasuries curve trading above the 4% mark. this was popular on the terminal. they expect treasuries rallied to resume. they are looking for 10-year note weakness in the early weeks of the year to find support at the 4.25% to 4.3%. in the next hour we will have c'mon, we're right there. c'mon baby. it's the only we need. go, go, go, go! ah! touchdown baby! -touchdown! are your neighbors watching the same game? yeah, my 5g home internet delays the game a bit. but you get used to it. try these. they're noise cancelling earmuffs. i stole them from an airport. it's always something with you, man. great! solid! -greek salad? exactly!

don't delay the game with t-mobile 5g home internet. catch it on the xfinity 10g network. hi, i'm katie, i've lost 110 pounds on golo in just over a year. golo is different than other programs i had been on because i was specifically looking for something that helped with insulin resistance. i had had conversations with my physician indicating that that was probably an issue that i was facing and making it more difficult for me to sustain weight loss. golo has been more sustainable. i can fit it into family life,

i can make meals that the whole family will enjoy. it just works in everyday life as a mom. >> the jobs report was absolutely harder across the board. >> it's a solid report. >> labor market is still quite strong. >> we are concerned about what

does this mean for the fed. >> reinforces the notion that the fed will not be in a rush to cut rates. >> suddenly taking back rate cuts is a relatively easy call. >> their initial interpretation is that likely means the fed doesn't actually cut rates. but that is a premature conclusion. >> i am still expecting 50-basis point cut in march. >> is it going to happen in march? i don't think so? >> it's clear the fed is going to be waiting a while before it starts cutting rates. >> i think they will start cutting in may, june. >> you are looking at the back end of the year for that. annabelle: that was bloomberg tv's guests waiting in on the latest u.s. jobs data and implications for fed policy. there interesting action on friday following the jobs report. very much whipsaw trading. focus coming down to the headline level. it was a pretty robust reading for the u.s. jobs print. but the sentiment shifted in the session as investors started to think about and look at those more micro science as well,

things like people looking for jobs taking longer to find employment. more people also taking work for economic reasons as well. so a lot of traders ending the day perhaps thinking the fed is that we to keep with dovish tilt in its upcoming meetings. the key to that will be the u.s. inflation print later this week, it could show further signs of price pressures easing, something the fed really wants to see. but the stoxx' reaction so far, u.s. stocks cap and their worst week since october last year. we are seeing trading for the antibody and so far in the session. we continue to watch that japanese yen closer to the 145 mark. it has been that rate differential between the fed and the boj in focus. japan equity markets are closed for a public holiday today, something that can also be playing into the theme of treating so far, pretty subdued

to note. haidi: the top geopolitical story today u.s. congressional leaders have announced a deal on the top line funding level for the coming fiscal year that lessens the chances of a partial government shutdown on january 20. the senate majority leader and the house speaker negotiated the bipartisan deal, includes a way for committees to push through spending bills now that they have a limit on the amount they can. spend indonesia's presidential contenders sparred on policy issues from foreign debt risks to disputes on the south china sea ahead of the election. the former jakarta governor accused the defense minister for no of not doing enough on cyber defense. parnell, who needs some of the polls labeled his competitor as too political. and polls suggest that most thais expect the political turmoil in the country to

persist, but they also see the prime minister staying in office. the poll, conducted in december, found that almost 40% addict the political discourse will get worse after last may's election ending 10 years of military rule. the bangladesh prime minister has extended her rule after her party won sunday's elections. as a result she will retain her title as the world's longest-serving head of government. the election commission says turnout was around 40%, a sharp drop from 80% participation in 2018 as voters heated an opposition campaign to boycott the election. annabelle: turning to the outlook for energy. saudi arabia is cutting its february oil prices for buyers in all regions, including in maine markets in asia. that price cut comes amid persistent weakness in the market. let's get more with su keenan from new york.

it's another sign that opec+ output cuts have not really boosted prices so far,. su: they have not. and those cuts were designed to prevent a buildup in oil supplies in storage which has a bearish effect on price and they have essentially failed to do that. we are seeing by all indications, oil on track to have an oil surplus is not a glut globally and we saw prices fall. saudi aramco, the saudi state owned company is now reducing its arab light price to asia by two dollars a barrel. it's bigger than what survey ors had indicated. the saudi's are cutting oil prices for february delivery to northwest europe, the mediterranean and north america. this has a lot, again, to do with the thesis of oversupply of oil, a little bit

coming from the u.s. and ex-cartel producers producing a lot of oil. for the most part, the market appears to have so far, shrugged off concern over the israel-hamas war and the deepening mideast turmoil. check out the charts for both wti crude and brent crude. you will see that decline for the year. we have not seen a pullback in pricing a couple of years even though greater turmoil does remain a risk. we have seen that risk play out in the past week. haidi: meanwhile, production at libya's largest oil field was suspended on sunday. su: over the weekend. libya's national oil corporation declaring force majeure, an act of god clause that companies will invoke when they are unable to contractually meet their obligations or unable to deliver oil as promised.

that is a result of libya's largest oil field being shut down after protesters entered the facility several days ago. the oil firm says negotiations are still ongoing. libya is a member of opec+ -- they produced 1.2 million barrels a day most of last year. so the focus is how quickly they can get back online, because that will be in and supply. so, libya outages, various turmoil in the mid east and the red sea, gave a boost to oil prices in the past week offsetting data showing supply gains. wti posted a 3% weekly game and we are seeing that game extended slightly in asia trading as it gets underway. you will see that west texas intermediate is now trading up closer to $74 a barrel. burnt and of the week's close to $79 a barrel. those gains come despite the fact that analysts on wall street are starting to cut their forecasts for this year, the surge in supply outside of opec is not the main reason. meanwhile, the red sea

disruptions, to the path of a lot of oil shippers and other container ships is something that everyone is still watching in the oil market. maersk, the danish shipping giant, has said it will continue to avoid the red sea. and the u.s. is now deciding on how to react from the latest attacks from the houthi rebels who have been very aggressive in actually boarding ships and trying to cause turmoil there. annabelle: that with su keenan in new york. of course really playing into the direction of energy prices over the course of this year has been the demand outlook coming through from china. it's pretty interesting to note today, it is one year since the china-hong kong border reopened, that taking place on january 8 last year. china, as we know with its covid-zero strategy, kept it for a significantly long period of time and only gradually started to reopen border checkpoints with hong kong and macau just 12

months ago. it hasn't really been a grateful months since. there was so much optimism around the reopening, but you can see the sanctions is down 20% over this period. the sanctions, we should note, is not just china-facing, it is sensitive to the needs of economic health of china's companies. the other thing that plays into that is the fed keeping with higher-for-longer. the hong kong dollar, the hong kong monetary system following what the fed does. it have been caught between that weakness in china and the higher rates. again, not a great outlook one year since that border reopening took place. haidi: and, of course, we have not seen the visitor arrivals either from mainland china bounceback to pre-covid level you have instead seen that exodus of travelers going the other direction, trying to get cheaper deals and cheaper holidays going into the mainland. so as a result, you are seeing

that chart showing the number of tourists has been recovering. hong kong visitor arrivals from mainland china, still far from seeing the full recovery. on the other hand, you can see the flow of visitors from hong kong making 8 million trips into china. that effort by hong kong to try to provide the retail sector and the hospitality sector, still facing significant headwinds. these top nightlife spots being left deserted as hong kong residents are flocking across the border, we know shenzhen is very popular as a destination for shopping, visiting restaurants and for cheaper options for entertainment and retail. 7.7 million departures in december from hong kong fire, land and sea ports typically used to the likes of shenzen travel and macau.

the statistics started being reported in 1984. so we are just seeing an uphill battle when it comes to the recovery in hong kong, not to mention china as well. we will get price data, really expected to suggest deflation is still an ongoing theme in the beginning of 2024. lots to talk about when it comes to the economic market outlook for china. we have a packed lineup of guests from the ubs greater china conference in shanghai this week, the first in in-person event since the pandemic. the conversations are listed on your screen. we will be speaking to eugene qian, ebs china country head, about his prospects for that key market and also talk about expectations for chinese equities as well as some of the bigger picture issues that belle just spoke of. and we continue to watch expectations out of the fed, geopolitical concern facing the global economy this year. japan is the big outlier when it

comes to where the boj goes and how that potentially impact the yen, and big changes for the japanese markets. our interview with the centauri ceo will be centered on how these changes in the economy are changing the business approaches of japanese corporate leaders. we know that expectations for structural change for corporate governance have been one of the pillars driving this big rally that began last year for japanese markets. that is coming up. this is bloomberg. ♪

annabelle: quick check of how the japanese yen is trading in the early moments. of course the japanese agree markets are closed on monday.

the japanese yen is holding close to 145 to the greenback, coming off its worst week against the u.s. dollar and 60 months. it is really the economic fallout we continue to see from the powerful earthquake on january 1 and the country's northwest. which comes down to the expectation around the boj policy. the ceo of japanese airlines it and a, expects the yen to stay in the range of 140-150 per dollar even after the end of the boj's monetary easing policy. koji shibata spoke to us on the silence of the gathering of japan's biggest groups. >> i don't expect a huge impact from the boj policy shift on is this directly, but if the yen is to appreciate as a result of policy change, there would be both positive and negative effects. i would expect more positive impact from outbound tourists to increase and reduction in

foreign currency to nominate expenses. expects the yen to stay between 140-150 yen to the dollar. annabelle: before the boj makes any policy changes, they are really looking to see what are the outcomes of the wage negotiations that will take place in the fourth quarter of this year. the centauri ceo -- says centauri ceo says salary increases could help boost innovation in the country. he also sees changes in the japanese economy are pushing corporate leaders to be more open for m&a's. >> i am sure there are so many reasons for us to believe that the industry will be more active to use cash. there are some reasons. one, we know interest rates will go up and we have cash. so, either one who wants to borrow cash or those who have a

lot of cash, we need to take action. the reason behind this is inflation. inflation is gone. our economy has changed so much for the better, i would say. mostly inflation was a huge disease. but we business leaders think that inflation is gone, plus we have to take action. the reason behind it is we noticed we are lagging behind the world. but there is a huge chance here in japan. there is. everybody knows that we have to digitalize. we have to reform the society. a lot of changes are needed. change is pushing as business leaders to do something new. so i think 2024 is a big push for business leaders in this country to do something new, something different than the last 30 years. >> the market expects the boj to

scrap negative rates sometime this year. what does that mean for japan inc., where the interest rates will rise? >> two impacts. the immediate impact is the currency. the japanese yen will be more appreciated, perhaps to the 130 's hopefully. second thing is more important, the consolidation of industry or the metabolism of industry. some companies can't survive by facing interest rate increases. but that is a good thing for our and only because it will bring dynamism to our economy. that is what we need, and we need such dynamism. >> we are seeing significant changes in wages. a 16% hike for some of the youngest employees at this

company. centauri last year had a 16% increase for 2023. looks like you are looking at 7% for 2024? can you tell us, via strategies for increasing wages? do you think that will continue? >> i strongly believe that, first of all, we raise wages first for our people working together, then that will galvanize people. then ask them to increase productivity. it used to be the opposite. increase productivity, then we increase wages. so our idea is, first of all, people first. raise productivity after all or improve the increases of wages. not one single year, 2, 3, 4

years. our people think that wealth, our company will increase wages not only one year, 2, 3, four continuously. so that will create great motivation towards innovation. >> what is the most pressing issue than for japan, what do you think the most pressing issue japan faces going forward? >> energy. we have to increase every measure so we can secure energy. we are shifting to digitalization more and more and catching up with the world. ai is used everywhere. i use ai2 to fish. so energy -- i use ai too. energy is the source of economic

growth so we need more renewable energy. we need more reactors of nuclear energy. we need more wind power. we need more technology that generates electricity. we need every source of energy. annabelle: that was the suntory ceo's takahashi niinami speaking with bloomberg's kurumi mori in tokyo. japanese prime minister fumio kishida suffered a fresh political blow with the arrest of the ruling party lawmaker in relation to a slush fund scandal. for more we are joined by our asia economy and government executive editor. this is a deepening of the scandal, but as well as think it puts perhaps a timeline, a very small amount of time as to how long kishida can continue to

battle these question marks over whether he should be resigning. >> he's approval ratings are in the tank. people are wondering how long he'll stay. he was to stay on before he passes the budget in a couple of months time. the other theme is that he is waiting for a state visit to the united states to meet with biden . this is something that has been long-planned and something that is very important for japanese prime minister's, particularly given the alliance they have with the united states. there is a feeling that that go-ahead before anything happens to him. and then the question is, you know, who would replace him. they don't need to actually call an election right away. but there is an ldp leader

should contest later in the year. annabelle: the key question is whether there would be any further politicians likely to be embroiled in this candle. >> exactly. that is the question now, because this scandal is hitting one of the biggest fractions in the lep. usually factions rotate the job of prime minister. kishida himself benefited from that system. the kind of role through the different factions. one prime minister goes down, which is a frequent occurrence in japan apart from several exceptions including shinzo abe, who managed to stay in power, but since then, you have had suga, you have had kishida. typically there is a cycle where they last sort of a couple of years and then their approval

rating goes down. and we're seeing that cycle play out with kishida. some scandal emerges like the one we are seeing. given this one involves a hefty chunk of the ldp, it's very unclear who will emerge unscathed from that. often times it is the one who can command the support of the party. annabelle: that was our asia economy and government editor dan ten kate with that. plenty more to come on "daybreak: asia." this is bloomberg. ♪ 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.

haidi: they trade opens in korea shortly, japan brokers are being investigated as there are notes related to chinese stocks, this includes screen investment securities and asset securities, and age investment. this is bloomberg. ♪

haidi:haidi: this is daybreak asia, we are counting down to

asia's major market open. a quite start to the week, japan is all for the coming holiday, volumes will be softer, it is a big week when it comes to inflation ratings from the u.s., the cold call reading is going to be the key one but also across major markets like australia, tokyo cpi, the first rate decision of asia for 2024 with the bank of korea. annabelle: expected to stay in the hold rate pattern, inflation print will be taking center stage this week and more policymakers want to see signals we are seeing, price pressures easing, the opening for south korea as you said and japan shut today for a public holiday. we are monitoring the outlook for the early moments here. the direction for equities around the region today, looking a bit weaker because of that follow-through from the u.s.

session on friday, capping out the worst week for stocks since late october. we saw weakness in the wall street session, that is expedient across this morning, under pressure, the korean won continuing its slide against the greenback, fairly steady in the early moments but still well past the markets, the bank of korea at decisions, the want to watch. markets flipping into more positive territory, a little bit ranked as well. haidi: take a look at the trading in this part of the world, inflation numbers, some key gauges out of australia respected this week as well. that potentially sees a bit of a halt to the rally we have seen in the aussie dollar. 10% from late october until now, that is being challenged by the data this week that could push the rba to start its loosening cycle sooner rather than lady.

67.16 in the aussie dollar, that is this currency and other commodities currencies as well. it is healthy dollar is open mixed in the g10 space as well. the dollar-yen is holding pretty steady as well. this is when it comes to equities, range bound, we are saying australia stocks up by a 10th of 1%. we are watching when it comes to the broader commodities story, the oil story as well, a little bit on the back foot. still, as of friday, holding the weekly gain, the tensions in the red sea and the disruptions of the have had more of that over the weekend as well. playing into that narrative. let us get more in the market, mark, let me start off with the cpi, that is what the fed watches this week, headliners expected to accelerate. under the call gauge, the fed cares about, likely to show the

reassurance of the broader trend that they are hoping for. >> it is all about paul cpi -- core cpi and more importantly is the core pce inflation indicator that comes in over two weeks time. really it is a continuation of the story that goes back to jerome powell, being so dovish in december, they saw that core pce come out with a 1.9%. expect that to influence this week's inflation data and traders are expecting a march rate cut from the federal reserve and looking for another very soft pce number later in the month. some encouragement from last friday's jobs numbers and the ism reports. although the payroll number was higher than expected, the underlying part of the jobs report was actually pretty weak. particularly because household employment numbers fell the most for almost four years.

a lot of temporary workers involved in there as well. a fragile picture emerging in the employment. if you look at what followed with the ism numbers, very weak, across the board including the services sector. that is the reason why you have a big rise in bond yields even though typically traders react pretty spiritually to foreign payrolls. they did not respond strongly because they can see that things are moving in the fed's direction and march is a possibility for a rate cut. annabelle: in asia we have the chinese inflation and focus as well and inflation is the name of the game here and we do see inflationary territory, does that set us up for a leg lower for chinese equities? do you think the worst has already been baked in at this point? >> every time we think the worst has been priced in, i think people are not holding their breath on that one.

we had so many disappointing situations in terms of turn equities whether it is the mainland or hong kong as well. the frustration for a lot of investors is that china's central bank is relatively slow to do more easing. there has been talk for weeks and weeks of another reserve ratio cut coming and there will be more forms of lowering whether it is the long-term rates or even the one year rates. nothing is coming through. traders are wondering whether the central bank is seeing the urgency that they see in the week data. as long as i continues, as long as we get the situation whether the authorities are holding back and are taking the slow approach to things, and not showing they can invest, investors will look to other places. it is quite possible that equities are under pressure for a while yet. annabelle: that was mark there and let a shift to what has been another major thing for us this morning, airlines beginning

grounding boeing 737 max nine's after a section of fuselage on a brand-new alaska airlines jetblue out. the most serious and a string of quality lapses to putting the. boeing comeback plan in question joining us as our asian transport reporter danny lee, we know we will be getting some sort of weird or presser from the national transportation safety board later this morning. how exactly have we seen airlines and regulators reacting so far? >> alaska airlines is the second biggest operator of this jet and they granted all of their paraquat -- grounded all of their aircrafts. we also then had the rest of the operators would is only a handful from aeromexico to other airlines. we do not have any airlines in this past group and as you are affected by this grounding.

still a fairly new aircraft and a limited amount of operators. we have seen regulators and the faa come with statements. they will not see the plane back into the skies until they deem it to be safe. 171 of 215 aircraft are affected. we have seen the likes of india, china, the european union and u.k. coming out with technology, the faa directed as such, neither of these big, major aviation jurisdictions have jets and a service. -- in service. haidi: how do customers feel about this? it has been a difficult few years. there in the middle of a transition year internally as well, in terms of the leadership. how does this potentially

jeopardize all of that? >> it is a good question we have not heard anything publicly from that calhoun, the leader of boeing, what we can see is this is another reputational hit for the u.s. playmaker, particularly after the global grounding in 2019 of the max aircraft globally. we have seen in recent times and recent months we have had a spade of manufacturing and quality control concerns the have increased with its main supplier spirit terrorist who has built the fuselage. there are issues in case there could be something more on this. for the airlines to take a financial hit from the grounding which we do not know it and how how long this will last, clearly, especially the faa will be deliberating with the airlines what kind of fixes they need and any other checks that they need. haidi: our asian transport

reporter with the latest on boeing as we continue to watch the fallout of boeing and alaska airlines which seems to be the most impacted. this is a picture of trading and airline stocks across the region, korean air is down, another company being severely impacted. qantas trading in the other direction. boeing max grounding now going global. this is bloomberg. ♪

haidi: economic data out this week offering the first major glimpses into the health of china's economy going into the end of 2023 and the outlook for 2024 may not be that encouraging. price data showing a third month of outright deflation and a soft trade, credit figures also underline how week demand is. they china conference begins in shanghai today, the first fully in-person events in the pandemic , top business leaders and investors discuss key opportunities and challenges facing the region. joining us from the event is the

chinese country had a ubs and the head of ubs securities. good to see events like this taking place in shanghai as we get into the next phase of the recovery for the chinese economy post-covid. with so much uncertainty and concern over the structural nature of the slow down, i am curious, what are you hearing from clients and what is the messaging from ubs when it comes to the china market? >> good morning. overall, we are hearing quite a mild delay of cautiously optimistic tone. china market did not recover as quickly as we anticipated post-pandemic. ever since then, starting from the late part of last year 2023 you see the higher holiday season consumption numbers going up. you see the chinese economy broadly speaking recovering ok

in terms of the export and other things. for the new year, there are a lot of things uncertain ahead of us. we see the bright spots all over the economy and the consumption from or from some pockets of chinese strains such as the ev and exports. i think overall the government still has a lot of tools in their toolbox. a lot of new measures have potential established packages -- and some potential stimulus packages have been considered. the chinese market will recover and be solid in the new year. annabelle: when you talk to clients at this point what are they most concerned about when it comes to the outlook for china? is it how we are saying the stock market performing? as a policy uncertainty? is it the property sector? >> right now it is probably the

market is saying there are some bright spots in the economy. however the government can and could potentially do more. a lot of cards on the table for the government to consider. new policies are being ruled out as we speak every week or every month. the market is waiting for that level of confidence to come back. i think as i said, the right ingredients and the right price spots in the certain sectors in the economy such as china's ev exports have set a record high. the domestic consumption of the ev is leaving -- leading the whole world and that will continue for the next several years or even decades to come. all eyes are on are policies from could it be more encouraging of a stimulus package and the overall things are waiting for the new economy and the confidence on the verge of coming back, i think the recovery is already happening. annabelle: it is interesting because we are seeing or heard

resident xi jinping emphasizing multiple times this so-called high-quality development. the so-called confusion for investors is we are not totally clear on what that means. what exactly are you thinking that means and how are you investing or guiding clients to invest off of the back of that? >> we are in the business of identifying those real opportunities or attractive opportunities for our clients. you raise a good question, the so-called high-quality is meaning we are not pursuing the highest single digits or the double-digit type of gdp growth. hopefully, a 5% by 5.2% seems to be the consensus for the last year. this year we believe it could soften further to about the amid 4%, 4.54 4.4%. a much bigger base and when you look through the numbers, the quality of it is is it a new sector?

no longer the kind of old property manufacturing traditional sense of manufacturing. also more of the ev sector and the new economy and new energy sector and the consumption of leading the new type of growth. all of this means quality rather than quantity and also the higher quality in terms of coming in with a more international capital being attractive and then the chinese capital and chinese companies going outside to further seek the global growth opportunities, that is what seems to be suggested as a part of the higher-quality growth or high quality development for china. haidi: do you think the growth is clear enough though? do we need to see more spelled out to really tempt investors back in? there are concerns about geopolitics and the property sector. >> it is a good question but we

are at the beginning of the new year. a lot of things are get to happen as time goes on. we have already seen the economic conference in beijing in december and also early on, the whole five year, the once every five years, financial conference. all of these pointing to the new direction as you pointed to earlier. the high growth and high quality of growth, we are seeing a lot more new policy being considered and more will be rode up as the time goes by, we see potentially investors come back and domestic investors are gearing up. confidence at this moment is the key that seems to be coming back. let us give it a little bit more time. haidi: in terms of gaining confidence in the china markets, what are your plans when it comes to hiring account? where are you seeing the pressures? >> i think for ubs, we still see

china as a key globally speaking strategic market for us. we are expanding, we are always leading international banks in terms of leading local presence. investment and asset management, we want to expand to onshore wealth and asset management platforms. in china that you take years to develop where we are and it took us over three decades. our clients and our peers are doing the same thing although it might be more considerate, it may be more careful, overall, direction wise, china remains the second largest economy and even with gdp growth at 5%, it is still contributing a third of the global gdp growth every year . this can be true for the next decade or longer, all of these pointing to a more positive picture when people or companies consider expansion or not into

the market. haidi: we have done a lot of reporting into the significant and unprecedented type of ring fencing we have seen from american and european banks operating in china to try to get ahead of or at least give themselves production from the growing geopolitical and regulatory risks of operating in the country. is that something ubs is dealing with? what is the strategy they are in greater china given we have seen things like internally housing data, ring fencing and providing internal controls separate from the rest of the business? >> it is a good question. we always apply the topmost strict and astringent global standard when it comes to risk to any market, china is no exception to that from the ubs group level. we are consolidating the credit suisse operation in china for

the rest of greater china and we are making good progress with that. with the cs larger than completed, in this market, by the end of this year or later and 2025, we will be well positioned to capture the future opportunities. when it comes to the ring order, it is not happening in ubs per se we are managing the local business closely and we are definitely as i said earlier expanding as to the market to where our clients want us to be and we are providing unrivaled service into china and also for chinese capital, chinese copper and investors to go abroad. that context we have amended the understanding of a strategic collaboration with china's largest bank, with that kind of a strategic partnership we believe we will bring partnership into play to serve our global clients and also

chinese clients better in the years to come. annabelle: bullish on china -- [laughter] sorry. we also need to get to is ubs, they are yet to merge credit suisse' entities inside of china because we know that credit suisse is trying to find a buyer for its securities business in the country because it has already got that ubs has already one, it cannot hold two licenses for the same business. can you give an update on the asset sale? >> all right. in china you are not supposed to control two licensed security firms, it requires it as such. we are reviewing the options for credit suisse securities. it will take some time for us to resolve that. in the meantime we are engaged in an active dialogue with

chinese regulators and we are making good progress on that. broadly speaking, credit suisse has brought to ubs platforms some number of good quality bankers. we are strengthening our team locally and bringing a lot of capabilities and geographically speaking there are a lot of complementary natures across asia. in china i think we see more of added on benefits so that the ubs in the new form can still serve our clients better than we were mesh and we are leading all international banks -- and we are leading all national banks. annabelle: stay tuned for conversations with the bank's head of markets and larry summers, at the times indicated on your screen. plenty more ahead. this is bloomberg. ♪

annabelle: south korea's regulator is launching a wider investigation into local banks and brokers which sold exotic notes linked to chinese stocks. it may settle investors at -- saddle investors with heavy losses. let's get more from our guest. how soon this will these losses be from this complex notes that were sold to a lot of people who were if not already in retirement age, entering retirement? guest: it's a pretty serious case for south korea. we are looking at $15 trillion -- 12 billion u.s. dollars of this product maturing.

it may be lost to retail investors who bought these high-risk, complicated structured notes. typically these products are sold in three year maturities. so when they were sold in 2021, the enterprises index was trading about 12,000. now the index has crashed almost 50% from that 2021 peak, so the retail investor who bought this product at the time is looking at about a 50% loss on their principal. all of these combined, authorities are concerned that these retail investors may be saddled with heavy losses so they are launching an investigation into 12 financial institutions in south korea that sold these products. the governor says that it looks like they may not have done adequate explanations to retail investors when they sold these products.

haidi: haidi: are there indications of mis-selling products? youkyoung: if that will be the topic of the investigation. looks like during the investigation that has been done, there may have been some kind of incentive structures that encouraged banks and brokerages to aggressively sell these products to retail investors, so that may be the case. haidi: our asia stocks reporter youkyoung lee. like a nightmare.

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>> the jobs report was absolutely harder across-the-board. >> it's a solid report. >> the liver market is still quite strong.

>> certainly taking vaxxed rate cut is a relatively easy call -- taking back rate cut is a relatively easy call. >> i think that is a premature conclusion. >> i am actually still expecting a50-basis point cut in march. >>. >> is going to happen in march? i don't think? >> it's clear that the fed will be waiting a while before it i think they will start. >> cutting in may, june. maybe at the backend of the year for that. haidi: bloomberg tv guestshaidi: there waiting in on the latest u.s. jobs data. this as we heard the key information from from the u.s.. that stripping out volatile food and fuel prices, which the fed movie focusing on -- which the

fed will be looking at whether it fit into the narrative that efficiently needs to come down. this is the picture as we look at what is treading water start to the week of when it comes to the cost, by 0.1%. we are talk barely changed --'s talk barely changed. contracts in hong kong also pointing to a flat start. there is the absence of that japanese market, seen on equity trading as a result of that with the fan close to the holiday. the dollar holding pretty steady. this could change when it comes to the geopolitical risk you're facing this year, particularly when it comes to just an intense number of elections being held across 2024. and we could get off with taiwan where voters will be headed to the polls to choose a president is coming weekend. an election that could shape u.s.-china relations for years to come. three candidates are vying for the top post.

investors will be watching for any trigger in instability. is of chief north asia correspondent stephen engle. of course, high-stakes than the issue towards china's policy towards beijing, that will be front and center. stephen: every story that crosses the bloomberg terminal that has to do with china and taiwan will be amplified because we are in the final homestretch before that election on sunday, some saintly be the most critical election taiwan has been in more than a decade. we're looking at the three main parties. keep in mind, there are three main candidates for president for the dpp, the kmt and the t.p.p. it will be interesting to see how the votes shake out. i don't know if you could see the crowds in the front page of the livery times essentially saying yesterday was super

sunday, with the main parties all having a larger rallies. there will be individual rallies the rest of this week throughout taiwan. and we will be at some of them in the opening days of this week ahead of what will culminate on saturday, that is, of course, the election and big rallies here in type a on friday night. -- here in taipei on friday night. a lot of stories will get amplified because of what is at stake on saturday. there have been numerous reports of balloons being floated across , mainland chinese balloons being floated across the taiwan strait, at least 12 of them crossing. several of them, according to taiwan won defense officials crossing over the island from beijing. we are hearing from beijing that they are weather balloons, but afterward we saw a year ago in the united states when the u.s. shut down a surveillance balloon, there is speculation that these were indeed surveillance balloon, as beijing

perhaps -- perhaps -- reportedly ramped up its influence on the outcome of this election. it also comes at a time we are hearing that beijing has sanctioned at least five u.s. defense companies after in mid-december we heard the pentagon and the state department approving millions of dollars in foreign military aid potentially to taiwan. so again, the war over tunisian has begun there -- the war of retaliation has begun there. annabelle: we also heard from u.s. intelligence saying perhaps given the high levels of corruption in the chinese military, its own campaign or possible plans of invasion into places like taiwan could be facing a significant set back. stephen: this is a very interesting story, from sources again, not confirmed by beijing and at least outwardly by u.s. officials, but some of these

investigations indicating that purge that xi jinping launched in the peoples of the russian army toppled the top man, the defense minister, as well as the top general li shangfu, last year. at the time we were talking about perhaps some improprieties about requisitioning, and some equipment purchases in the chinese military, now we're hearing from sources that have not necessarily been confirmed, a bloomberg's group necessarily saying that corruption had reached across all levels of the pla rocket group as well as the defense industrial base. to the point where even some rockets were reportedly filled with water instead of fuel. some of the missile lids out on the western side of china didn't operate properly. again, it's based on sources, but it does indicate that any potential military action,

whether it is in taiwan or elsewhere by the pla, has been hindered by corruption, reportedly again, from sources telling bloomberg news. haidi: just some extraordinary details in that reporting. these, does it sort of, i guess add to the idea that, with all the domestic challenges and with the economy, clearly the corruption drive still ongoing, that she you. doesn't need these external challenges? or i guess you could slip and say that at a time like this, there is an activation for a more hawkish beijing. stephen: that is what will be likely at the center of voters' minds on saturday. in these presidential elections, they often times tied to the sentiment of cross relations. of the incumbent party of the current president especially

with its platform that provokes china because they have a de facto independent stance. whereas the two opposition parties, the kmt and the tpp, would like to see more engagement. that is why this election is key in shaping taiwan-china relations. if the dpp is reelected for a third consecutive term after tsai ing-wen, lai ching-te is the candidate, pundits say that the likelihood of more beijing overt, you could say, intimidation, is more likely going forward for the next four years. annabelle: that was bloomberg's chief north asia correspondent stephen engle in taipei. stay tuned for more coverage from bloomberg of taiwan's elections. we will have live updates from steve and our team every day ahead of saturday's vote and

full coverage as the results are announced on monday, january 15. . let's keep an eye on other political stories we are tracking. u.s. congressional leaders have announced deals on the topline spending level for the current fiscal year that less of the chance of a partial government shutdown on january 20. senate majority leader chuck schumer and house speaker mike johnson negotiated a bipartisan deal. it clears the way for communities -- committees to push through detailed spending bills now that they have a limit on what they can spend. indonesia's presidential contenders sparred on policy issues from foreign debt risk, to dispute from the south china sea in that latest debate ahead of friday's election. the former jakarta governor accused the defense minister of not doing enough on cyber defense. ganjar pranowo will who leads some polls nibble his competitors as too theoretical. new opinion polls suggest most thais expect the country's

political turmoil to persist, yet the majority also see the prime minister staying in office. the government poll was conducted in mid-december and found almost 30% produced for the political -- -- 30% predicting the political discourse will get worse. the bangladeshi prime minister is extending her rule after her party won sunday's elections. she will retain the title as the world's longest-serving head of government. the election commission says turnout was around 40%, a sharp drop from 80% in 2018 as voters heeded it opposition campaign to boycott the election. haidi: another story we are following, saudi arabia is cutting its prices of crude from buyers all over the region. aramco will be selling its flagship arab light to asia at $1.5 above the benchmark, down from the previous two dollar

markup. it is also cutting prices to northwest europe, the mediterranean, and north america. still ahead, we are looking a head limit to this week's consumer electronics show in las vegas. gary shapiro will be with us next. this is bloomberg. ♪ wealth-changing question -- are you keeping as much of your investment gains as possible? high taxes can erode returns quickly, so you need a tax-optimized portfolio. at creative planning, our money managers and specialists work together to make sure your portfolio and wealth are managed in a tax-efficient manner. it's what you keep that really matters. why not give your wealth a second look? book your free meeting today at creativeplanning.com. creative planning -- a richer way to wealth.

annabelle: just taking a quick look at how markets are faring so far, and deacons the pretty muted moves so far. if you were to take a key theme away from the session so far, it is range-bound. not too much movement in either direction. standing out is how investors will be parsing the key numbers from friday. cracks certainly forming underneath the surface of the jobs report. that takes us to the u.s. inflation print that is due thursday this week. you look at the reading stripping out food and energy prices, again, it could show that price pressures are moderating. the low rate environment is pretty positive for tech stocks in general and you are seeing the tech index fractionally higher. but a huge event, of course, for the global tech industry is taking place this week. the annual consumer electronics show begins tuesday in las vegas

, one of the biggest animal showcases of new products in technologies. the consumer technology association hosts the event, and its president and ceo gary shapiro joins us now. thank you for taking time to speak with us. huge number of exhibitors and attendees. what are you most excited about? gary: thank you for having me. the ces begins each year with excitement and optimism, but this year is really special. we have more innovative products and i have ever seen. up 30% for innovations awards, over 4000 exhibitors and over 2.5 million, that is m, million, net square feet of exhibit space, by further such event in the world, biggest innovation event. it attracts more people from

outside the united states into the united states than any sporting event. it's is the very big event and it is focused heavily on artificial intelligence. especially generative ai, that is the buzz we are seeing. we are seeing so many creative approaches to marketing, entertainment, technology, content creation, mobility and to health care technology as well as smart hubs. annabelle: i am interested in ai because i think it was the story of 2023. we saw something investors bouyed by that optimism around technology but there is the pressure from companies to demonstrate that he can actually boost bottom lines. are we likely to see anything on the front of the event? gary: absolutely, what has changed from last year is generative ai through chatgpt had just been introduced, and now companies have had a year to figure it out and play with it

and figure out how they can incorporate that. certainly many companies are using it in their processes to create content whether it is marketing or internal correspondence or even headlines in journalism. but there is also now a shift the consumer marketplace. a shift to business product offerings. 40% of our event is business-to-business, we see a lot of major investment companies with huge presence at ces. but it is also technologies that we have been using for years to get us around, and active collision avoidance in cars and certainly in smart loudspeakers. now with this ability of machine learning, the ability to learn and generate new ideas is anything and i think it is almost as fundamental as the internet itself. it will allow us as human beings to live in a world that is better in terms of safety, in terms of that her health, with very specific diagnoses and treatments based on historic

fact. and also, to be better creative. get rid of some jobs which are very mundane and repetitive, and go into new areas and new jobs and anything that will benefit of mankind. annabelle: i am interested as well in this ai product, this ai washing. are you concerned about any businesses that can make perhaps unfounded claims around ai as well? gary: i think the marketplace for any reputable company, especially a brand, is a great way of figuring out what is true and what isn't. it's a competitive environment out there, but consumers have a new gift they have had for 10 or 20 years now, and that is the ability to write comments on websites about companies. any company with a brand name is so interested in protecting it, they will be very cautious about promising things they cannot deliver. we are going to see that more

and more. but of course, the unscrupulous and trying to make a quick buck -- we see that with robo calls and other uses of deception. i think governments around the world are working to rein that in. i think that artificial intelligence will be one of the tools in fighting fraud and fighting people who make false claims. so i am not that concerned about it. i think the government has a role in creating guardrails will businesses know what is legal and what is not. but typically sometimes pushing the envelope in claims is something companies do but they do it at risks to their brand. gary: another key trend of this year's show and something that ai plays into his car technology. what are you expecting in this space? gary: it's one of the fastest growing areas of ces, over 300 exhibitors just focused on mobility, and another 200 that have products relevant to that,

so a mix of the largest car show, if you will, in. it's not just cars. there are plenty of electric companies, charging companies, focus on self-driving because that will certainly empower people with disabilities and older people and cut down on millions of deaths and injuries each year but we all have. other forms of mobility whether it is agricultural, a number of companies that provide solutions for saving fertilizer and water and seed, as well as going 24 hours a day using the internet. plus individual mobility solutions including flying drones, flying cars, as well as electric scooters and bicycles. you name it. if you can get around with it, it is at ces. annabelle: just quickly, i am interested given there are number of government officials that will be attending these events. what kind of conversations are you willing to have with them, and what sort of message will you send given the u.s. is yet to put anything informal registration -- in formal

legislation. gary: we have over 1000 people speaking in conference sessions several of those focused on policy sessions. the united states is definitely behind in terms of a national strategy on self-driving and on artificial intelligence. we have won national privacy law that has put us at a disadvantage compared to much of europe and asia which have national strategies. in the u.s., of course, is a very innovative country. we present both sides of an issue. . we allow our opponents to speak as well. but the thing is we can't be a united states that is focused on innovation and success, where government has not made new innovation products legal. in china, they will have enormous data sets, very little focus on privacy, millions of engineers. that's a strong competitive advantage.

europe, though, is focused on privacy in our which is overly restrictive to innovation. we want to be like the deluxe and the three bears and get it just right. [laughter] annabelle: gary, thanks so much. good luck for the event this week as well. that was gary shapiro, president and ceo of the consumer technology association. coming off we will look at samsung which is set to benefit from ai demand. that is next. this is bloomberg. ♪

annabelle: evidently week for earnings in asia. we have the reporting season kicking off. we can see some of the major names year. chief among them will be some sun. indian names as well, infosys and others. let's get more on the outlook. we have our bloomberg reporter, rachel joining us. we just saw samsung. some preliminary numbers are due tomorrow. it is that focus on ai for the company. rachel: samsung is reporting fourth-quarter earnings and we expect study revenue on that front. the reasons are that we are probably seeing higher average selling prices for d-rem. in terms of --, we may see increased sales as well although

the average selling prices for that still remain the car. some analysts also say that there may be some slight margin pressure on smartphones due to reasons like raising marketing costs. so in ai art, we can see that samsung is leaning into ai a lot. it is key for them this year. in the past three years, samsung and other mobile phone makers have traditionally relied on improvements in camera technology and flexible displays to try to stand out. but it seems like 2024 promises for them to take ai into center stage this year. haidi: we have seen india continue to be kind of the market darling, not least of which are their i.t. companies. we would get a bit of a reality check given the valuations that we are right now? rachel: not too sure about

indian earnings, but in terms of samsung, if they will -- if ai will drive to the forefront for this year, so, samsung has reportedly targeted an 11.5 trillion won achievement in 2024 thanks for the demand in ai and increasing dram prices as well. haidi: our breaking news reporter rachel yeo. let's look at the stocks we are watching. developers will be in focus. china's central bank and financial regulators evolve into booth support for the construction of rental homes, as we see this property slowdown continued to play out. and keep an eye on these defense-related stocks, taiwan has boosted military maneuvers in the south china sea. and that's before we get to that

bloomberg scooped questioning the capabilities of china's modernization efforts of its military in light of the u.s. intelligence report. annabelle: that's right, some really incredible insight coming out of that bloomberg story. sources as well say that he could set back any sort of learns for a major military actions from china. in the market today, looking range-bound so far, not too much movement in either direction. the story is looking ahead to those key u.s. inflation prints this week. also coming up, plenty more from the ubs greater china conference. stay tuned for more of those conversations ahead. this is bloomberg. ♪

>> morning, happy monday.