Bloomberg Shatter of day: Asia 01/31/2024

This is DAYBREAK, Asia.We're counting down to Asia's major market opens.And Paul, there's really a lot for investors to be digesting this morning.We've had major big tech earnings down Alphabet, also Microsoft in Focus, AMD.But then here in Asia, we've also got that watch on the Samsung numbers andwhat that signalling to us about chip demand.Yeah, that's right. We're keeping an eye on that on the chipdemand story. But the net profit, the bottom line forSamsung was a pretty healthy beat. So we'll continue to listen to whatunfolds on the earnings call there.

But yeah, it's all about tech in theAsia-Pacific today here in Australia. Also, we're waiting on the veryimportant CPI numbers. So data heavy day Billdance right Really important for the RBA ahead of its decision.But let's take a look here at about how Korea and Japan are coming on line.But at the start of the day, as I said, that focused on how Samsung starts totrade unchanged at this point in time. But it does take a few moments to showlive pricing, as you said, at the numbers.So we saw the fourth straight quarter of profit decline.It was in the all important holiday.

Quarter as well.So net income falling 74% in the last three months of the year to 6.02trillion won. That was a very handy beat on whatanalysts had been expecting for around 3.2 trillion won.So roughly double that. But it is thanks in part to a taxcredit. The chip division really the one towatch and that had an operating loss of 2.18 trillion won more than analysts hadbeen projecting. So not a great signal for the health ofthe chip sector, though. They were in line with the preliminaryfigures that we had at the start of this.

Month.So you are seeing Samsung here just coming online to the downside of 810.8%. Perhaps Also playing into that, though,is the theme around earnings because AMD as well, giving a very weak forecast forthe current reporting period that tracked Intel earlier this week.So not great signals coming out even though we actually had fellow memorymaker SK Hynix posting a surprise profit earlier this month.Let's change on and take a look at what's happening in the session in Japanas we start to come online here. Here the focus is on the data because wehad retail sales rising just 2.1% year.

On year.So that was far short of what economists had been expecting.It's an important one to be tracking, especially when you put it against thesummary of opinions we just have from the BOJ for the January meeting.And this told us that officials are starting to become even more datadependent because they are watching for when will be the appropriate point toexit away from negative rates. They are saying that they're gettingcloser to that point, but still they do need to be checking, as I said, thespecific data and that is just one of the ones they could be tracking retailsales.

So, Paul, really the focus on data, asyou said, we've got those Aussie numbers coming up for inflation, but also thatwatch on what we're seeing in after hours.Yeah. I also trying to PM we neglected tomention it coming up later as well. But in terms of those US tech namesafter ours, we're continuing to see them grind a little bit lower.Microsoft the better performing of the three that you see on the screen there,Microsoft did have a narrow beat on revenue.Cloud was a beat as well. But expectations around what's happeningwith Microsoft in the cloud were.

Somewhat higher than what Microsoftended up reporting. Alphabet, meanwhile, hit a narrow misson revenue. So it's really being punished for that.Search the search business in particular falling short of what investors werelooking for. Advanced Micro Devices, meanwhile, AMDsaying first quarter revenue going to be about 5.4 billion.Well, that fell short of what analysts were expecting as well.And it kind of echo is also what we've been hearing from Intel in terms of itsa downbeat view of PC and data center chip markets as well.So those big names all moving lower.

After hours.BELL Yeah, and that focus as well on theMagnificent Seven, these are just some of the numbers we're getting from thosecompanies over the course of this week. Let's discuss with Raymond Wong.He's Axos chief China strategist and joins us here in the Hong Kong studio.So, Redman, I know you don't cover big tech specifically, but I'm interested inwhat that signals to you because we have seen big tech really leading the gainsfor the S&P 500 shares do seem a little bit priced to perfection, though, right?Yeah, I think you put it very right. I mean, really the price really priceyin video for perfection.

I think.I think they're doing okay. I mean, their earnings are not bad atall. I bet we just think that you know is theexpectation really high so but overall for the first quarter and I mean is thisquarter I mean, looking back there in the fourth quarter, earnings, I thinkprobably will still be in I and I think the market probably will be okay.But and going into the next quarter, when we look back forthe first quarter, I think people probably would be more wary and therewould be some more volatility in the in the big tech sectors.And what do you think's going to be the.

Big driver of that?Is that going to be perhaps the Fed's staying high for longer as well?We don't think the Fed will stay high for longer.In fact, we've seen that, you know, that they are going to cut in March.In fact, they probably will be taper in the quantitative tightening.Really shouldn't be so important, of course, to watch what we say, whatmessage she's sending out, but probably will not be very hawkish.And I think so that is we continue to support the stock market in themeantime. But I think more worries in the secondquarter is probably when we look back on.

The first quarter data, both on theearnings and also on the economic data, is that we probably will start weakeningand especially economic data, we will be seeing some weakening.And so we have, I think the trend inflation coming down where the forcemay be faster than the market expected. So do we support the Fed's easing case?But the economy and the earnings will not be the problem.But I mean, at the moment it's not the market's focus.I mean, the market at the moment we support by the fact expectation.Yeah. In terms of market expectations aroundwhat the Fed does, we're really seeing.

Those expectations whipsawing aroundparticularly when it comes to March. Consensus seems to be now that we're notgoing to get anything in March, but the focus now on May instead.Look how much of this is priced in when easing actually starts to happen.But what sort of moves do you anticipate?I think I think we are still expecting it's still more likely for the Fed tomake a move in March. So because the expectation now actuallymove it more towards me. And so if they really deliver in March,probably will continue to support the market.So it's a when we are moving towards.

March meeting, I think that probably wedisappoint the bond market as well as the stock market and also after thatalso will be supportive, but after but further down the road.And as to some of the weaker data to start hittingthe market, that would be a problem. I mean, the key thing is inflation.We think that's going to undershoot. So I think that's why we say that isstill very likely for March and also the quantitativetightening issue. I think that is also we'll be supportingthe market. I want to turn to China now, if we can,because I know this is a key risk for.

You heading into 2024.We've seen the CSI of about two and a half per cent this week.The Hang Seng down about one and a half percent.What's your grade for policy makers when it comes to trying to put a floor underthese markets? I think that's not a lot of policymakercan do. I mean, theseChinese, they have set the tone. And this year, grand strategy fordeleveraging are not going to reverse course for that.And the property market is going to be a problem for a few years before you haveto make the adjustment.

It's not going to come back.And I think that is not going to be a huge financial meltdown, is not going tohappen. I think it is manageable, but it's notgoing to come back to support the economy.So the trend growth in China is coming down.I mean, coming down to the four ish and then maybe even to free a few yearslater, I think because the decline in productivity, the kind of return tocapital. I think what we need to see a really area resumption of higher growth. They have to be more marketization goingback to the reform agenda.

And we are eagerly you get it.Do you look for any sign of AI from the leadership for that?But we have not seen anything yet. And the panel may be a this, but we arenot putting a lot of hope for them on that.So then in that sort of environment, how do you boost productivity, really?I think it's really is you have to bring back the confidence of the privatesector with the fact that that is actually the one driving innovation.And also marketization will actually release productivity and industrialpolicy. I think that's the strategy the Chineseleadership now doing will benefit.

Certain sectors so that industry, soinvestors can still benefit, you know, finding some alpha in some of theindustry, some of the start to benefit from that industrial policy.But the overall economy, overall market, if you will, a more sustainable bullmarket, we need to see that going back to the people of the 2014 60 points guythat that decision actually calling for more marketization, but they are notdoing that at the moment. Well, I was going to say, how realisticis it that they actually open that playbook because it doesn't seem to bethe current policy priority? I think I think so, too, is the keyproblem.

I think so that we are expecting lowertrend growth. So that will be some rebound.I mean, the market has the conditions set up for a decent rebound because ofthe low valuation, because of the pessimism.But those are not going to sustainable and those that are is not going to bringback a bull market, you know. All right.Raymond Wong Sachs as chief China strategist.Let's turn back now to Samsung. If we can take a look at how shares aretracking at the moment. We're off about two thirds of 1% in theearly going.

And this is after the company posted itsfourth straight quarter of profit decline in the holiday quarter.Let's bring in managing editor for Asia Technology, Edwin Chan, for more onthese fourth quarter results. The net numbers look pretty good, Edwin,a pretty handy beat there. What are your key takeaways so far?Yes, I think it looks like a handy beat, but a lot of that came from a taxcredit, potentially a one time tax credit.Once you strip that out, I think it's more or less in line and maybe looks alittle weak. I think if youdrill down deeper into the numbers,.

You'll see that the chip division, theone everybody is watching, actually had a higher than expected loss.And I think that's weighing on the shares a little bit on the rest of thenumbers, kind of look in line with what we expected.I think the real action will start in a little while when executives briefanalysts on the post numbers conference call, and that's when they're going totalk about the outlook for the market and their own plans to catch up in A.I.and so on. Yeah, What will we want to sort of seein terms of, do you think, to try and boost investors here?I think to be very honest, they've lost.

A little momentum on that front to theirarch rival Hynix, which is kind of getting all the attention now for whatthey call high bandwidth memory, a type of a chip that's kind of specialized forA.I. services, especially for generativeA.I.. So I think investors want to hearSamsung's plans to catch up to Hynix to invest more in best fear and sort ofretake, if it can do momentum and kind of stake its place in the AI sphere.I think that's one main concern of investors right now.The other, of course, is the state of the chip market, but in kind of a12 yeardepression right now and people are.

Interested in knowing when we will climbout of this trough and finally see a significant recovery in chips andelectronics and smartphones and so on. Yeah, what do we get sort of in thesmartphone division? Because it seems like they maybe sentsome mixed messages on the mobile market a little bit.In terms of smartphones, I think actually there is a little buzz aroundthe latest Galaxy s 24, which they are hyping up as an iPhone and AI enabledphone. I think early numbers have beenpromising and it's sort of a frontrunner of itskind, you know, in terms of trying to.

Integrate e-services into yoursmartphone. And if this catches on with consumers,it's conceivable that we'll see some life in the smartphone market this year.At the same time, you know, the replacement cycle just isn't what it is.And, you know, if consumers decide that there is no real innovation with thenewest lineup of smartphones, then we may be in for a bit of a choppy recoveryin that market. That was Bloomberg's managing editor forAsia Technology, Edwin Chen. And you can also turn to your Bloombergfor more on Samsung. You can go to t live, go to getcommentary and analysis from bloomberg's.

Expert editors.As we said, awaiting more details on those latest numbers.But let's take a look at how markets are reacting.As we're seeing. Samsung is a little bit on the pressurehere today. But there's also another reason oranother factor that's playing into this, because we had AMD, a fellow chip makerlisted in the US, giving a weak revenue outlook tracking as well.That sort of guidance that came out from Intel earlier this week.But those factors together tell us that the demand in the CHIP segment is stillremaining sluggish and we're yet to see.

Fully those signals that we're startingto recover here. As everyone was just saying, that you dosee these stocks that are dropping, particularly SK Hynix here down morethan 2% at this point in time. It is that after hours focus as well aslet's take a look at how big tech companies or tech companies are faringin Asia after we had those numbers out from Alphabet and Microsoft earlier,Again, investors really clinging to some of the more negatives in these numbers.So, for instance, in the alphabet, one, it was that focus on search revenue thatdisappointed Microsoft, the focus on cloud growth, and that also didn't liveup to everyone's expectations on Wall.

Street.And so we did see those shares dropping in after hours.Alphabet, you can see down more than 5.5%.But that certainly is playing into the tech story broadly in Asia, Paul.All right. We have plenty more coming up.The IMF sees brighter prospects for global growth this year, even as risksfrom wars and inflation persist. So far, more from our interview withtheir chief economist just ahead. First, though, President Biden says he'sdecided how to retaliate for the deadly attack on US forces in Jordan.As the White House hints at multiple.

Actions over time.Details coming up. This is Bloomberg. The battle against inflation is beingwon. And that's a very positive development.It could continue. So we could have even more goodsurprises on the inflation front, and that would allow central banks to easemonetary policy sooner. And so that would help lift growth.On the downside, we are concerned, of course, about geopolitical risks.We see what what's happening in the Middle East, in the Red Sea.We are concerned that, you know, there.

Could be a tightening of financialconditions that would increase interest rates even further than where they areright now. That was the IMF chief economist PierreOlivier Goran Chasse on the outlook for the global economy and reallyreferencing those geopolitical risks. But as he said, the tensions in theMiddle East and President Biden saying he's already made a decision on how torespond to a deadly attack on U.S. troops in Jordan.But he says he also doesn't want to spark a wider war in the Middle East.Bloomberg's Bruce Einhorn joins us now. And yeah, I mean, this is any sort ofresponse here is going to be.

Significant, not just for the region,the U.S., but also the global economy. Yes.And as the president said, the U.S.feels that it needs to respond because this while there have been dozens ofthese attacks since October when the war between Israel and Hamas started, thisis the first time that there have been American fatalities.The president said that I don't think we need a wider war in the Middle East.That's not what I'm looking for. His national security adviser, ourspokesman, a spokesman for the National Security Council, was briefingreporters, said that it's likely that.

There will be a multipronged response,that we won't be seeing one big attack, which is something that a lot ofBiden critics in the U.S. say from the Republican Party havecalled for. Instead, we're likely to see what thespokesman called a tiered approach, not just a single action, but potentiallymultiple actions over a period of time. So the risk there is that if we havemultiple responses, then there could be responses to those responses over time.So the situation could just deteriorate.Yeah. Ripe for escalation, indeed.But let's take a look at the situation.

In Gaza as well.The main UN relief agency there, UNRWA, on the brink of collapse.Bruce, what's the future for it? So a spokesperson for the agency warnedthat they the agency would not be able tocontinue beyond February currently because of the cut off infunds, at least 16 countries, including the US, have cut off funds to the agencyfollowing reports that Israel provided to the UN that 13 members of the agencywere involved in the Hamas attacks, the massacre on October 7th.Israel also says that about 10% of the agency's workers are members of Hamas orIslamic Jihad.

Mitch McConnell, the leader of theRepublicans in the Senate on Tuesday, vowed to prevent any further US fundingto the agency, the UN, the US ambassador to the United Nations, LindaThomas-Greenfield. She said that while the agency doesprovide important work, she also said that we need to see fundamental changesbefore we can resume providing funding directly to the agency.The UN Secretary General, Antonio Guterres, is trying to do some damagecontrol here, met with about three dozen members, officials from about threedozen countries yesterday trying to address the situation.But for the moment, it does seem like.

There's a bit of a crisis when it comesto monitoring aid in Gaza. Yeah, Australia is also one of thosecountries cutting off funds to the UNRWA.Bloomberg's reporter Bruce Einhorn there.Let's take a look at our oil is tracking against this backdrop.We're seeing prices for West Texas rising at the moment, 7796 a barrel aswe await the retaliation from the US for that strike in Jordan that killed threeUS soldiers, injured 25. President Biden saying he's decided onwhat action he's going to take, but we have no action taking place as yet.Crude prices rising.

Plenty more to come on DAYBREAK.Asia. This is Bloomberg. A Delaware judge has struck down ElonMusk's $55 billion pay package at Tesla. That's after a shareholder challenged itas excessive. The ruling could take a giant bite outof Musk's wealth if it survives a likely appeal.Bloomberg Technology anchor Ed Ludlow has more.The judge, Kathleen St J. McCormick, is essentially siding withthe investor that brought the original suit more than five years ago, and thatwas based on the idea that when Tesla's.

Board awarded Musk this $55 billioncompensation package, two issues. One, they weren't clear in explainingperformance benchmarking how Musk would take steps to realize that compensation,but also invest the concerns about conflicts of interest or lack ofimpartiality in the board awarding the package and their relationship to ElonMusk. Remember when Elon Musk defended himselfon the stand? He basically said, I have nothing to dowith this compensation deal. I don't set it.But the judge in this case has made that $55 billion package void.It was the biggest compensation package.

In history.And what happens next is that Tesla's current board has to come up with a newcompensation plan for Musk. And just based on the immediate reactionin Tesla shares in after hours, the market is taking this really seriously.The outpouring of instant reaction on social media was in high volume andsevere, and our understanding is that Musk and Tesla will appeal this initialdecision. Ed Ludlow for Bloomberg News in SanFrancisco. Well, here are some of the corporatestories that we're tracking. General Motors says it plans tore-introduce hybrid powered cars in.

North America.The move comes as it faces slowing growth and a troubled production ramp upfor full EVs. But CEO Mary Barra told us GM remainscommitted to an all electric lineup by 2035.There definitely is a slow down of the adoption, although I know this atransformation of this magnitude was never going to be completely linear.I think one of the important things is continuing to build out the charginginfrastructure. But it's also about having purposefilled ground up EVs that have all the performance requirements.Volkswagen is said to be pushing back.

Plans to list its battery unit, Tiago,as slowing demand for these clouds. The outlook for the business.Sources also say VW is pausing talks with investors for stake sales.We're told the IPO plans could be revived if the market improves.On Monday, Renault also cancelled plans to list its EV Ampere, the world's topEV battery maker. China's catl says profits rose as muchas 48% last year, thanks to strong sales.The company's preliminary data show net income as high as $6.3 billion and thatbeat analyst estimates. Latest data from SNE research showsSeattle's share of the global EV battery.

Market there about 37%, and that's morethan double its nearest rival the widely felt.Thanks for. Yeah, just taking a look at some of thebig movers we're tracking today in terms of big tech, we had Microsoft Alphabetreporting in numbers after hours and really disappointing investors on acouple of different metrics. So for Alphabet here.We saw it search revenue missing. And then also the headline fromMicrosoft was that focus on cloud growth that fell short of what some on WallStreet were expecting. So we are seeing big tech under pressuretoday.

The other story that we're tracking, ofcourse, is the Samsung earnings that came out.We did see it generating a profit beat for the fourth quarter in the finalrating, but still rather a profit falling again.But still, it was a one time tax gain that did help it along a little bit.So we are seeing chip stocks under pressure so far.More ahead. This is Bloomberg. All right.Got some breaking news out of Australia. Fourth quarter CPI coming in weaker thanexpected on year 4.1%.

So CPI is slowing.The expectation was for 4.3%. That's a big slowdown from what we sawin the third quarter where we had 5.4%. Notice the trimmed mean of which is thenumber that the Reserve Bank of Australia particularly like strips outsome of those volatile items. That is slower than anticipated as well.The trimmed mean on year 4.2%. The survey was for 4.3% and again a bigslowdown from the 5.2% that we saw back on third quarter.Let's take a look at how the market is reaction.We've seen the Aussie dollar dip below 66 US cents on that news.The ASX turning sharply positive.

We were in the in the green by just acouple of points a minute ago and now we're better by 4/10 of 1%, so stocksmoving higher. That record, though, still a little waysoff. We we may top it today.What's the record that we're looking for?Beg your pardon. Seven, six, three, two.We are just one point shy of hitting that intraday record now on the ASX.All right. Let's get a little bit more on those CPInumbers. M Live contributor Garfield Reynoldsjoins us now.

So that was interesting.What are the implications for the RBA? Well, this definitely puts the seal onrate hikes from the RBA. They're off the table now.You know, we had some talk towards the end of last year from Governor Bullockand and others that they still wanted to be vigilant, that the last mile forinflation might be hotter. You know, this is going to scotched thatsort of outlook. There's going to be some encouragementto the idea that the RBA could cut rates a little bit more in line with some ofthe expectations here globally. And it's it's also coming in at a timewhen there had been hints in recent.

Releases in New Zealand, Singapore andalso the UK that inflation in those places was being a little bit stickier.The idea that Australia is having a significant slowdown like this couldwell help. You know, we'll see what the Fed sayslater on today, of course, as well. But it could definitely help to globalbonds to regain some of their mojo after the recent difficulties they've had.Yeah. Just talk us more through that areaction because there has been really a scope for pretty strong reaction here.Yeah, well, I mean, I'm looking at the air strip and seeing, you know, three,four or five basis points lower in the.

Pricing for where the RBA is going to begoing forward now. And that's the sort of thing that'slikely to develop more during the day. We've also got China PMI coming up lateron. But you know, before this data we had,we didn't have a rate cut for the RBA priced in and fully priced in untilSeptember. Now it's likely that by the end of theday you might well get August fully priced in and then even some your betson the potential fall for a June or July cut.But what are the upside risks to inflation?Because of course these are backward.

Looking numbers encouraging as they are,but we still have a war ongoing in the Middle East, which could continue forsome time. Pressure on potential input prices aswell. I guess in terms of rhetoric, we couldexpect still to hear some caution from the RBA.Yeah, we could, especially because, you know, one of the big concerns has beenrents like housing costs. There's not a lot of signs of pressurecoming off on that front. The flipside is there's plenty of goodnews that's kind of filtering through when it comes to power prices.That's been another major impact and.

That's that's more to do with your localissues than necessarily what's been going on with global petrol prices.So a reduction in those is the sort of thing that is going to help.You know, at the very least the RBA be confident that they're donewhen it comes to rate cuts. They're probably also going to need tosee some significantly worse economic data.Now we did have some worse economic data yesterday.Retail sales, which is very much even the ABS admits a flawed indicator thesedays. But yeah, we'll be looking forward tothe next jobs data coming up, Some of.

The other indicators as to whether ornot the RBA is going to really feel like it wants to move towards cutting rates.And remember, next week when the RBA meets, we will get a post RBA pressconference. So that's going to be very much a focusbecause the expectation is the RBA is going to hold.That was always the expectation. Probably even an upside surprise wouldhave left them on hold. How does Governor Bullock and how didthe Household Board regard the outlook for this year?How strongly are they going to push back against the idea that they're going tocut rates by the end of 2024?.

That alone by the middle of 2024, whichis probably what the market's going to be pricing for by the time they meet.Yeah, that'll be an interesting press conference.All right. Something new from the RBA as well.We haven't had those post decision presses before.MLive contributed Garfield Reynolds there.Let's take a look at how we're doing on markets after that result.Just to recap for you, CPI in Australia accelerating slower than expected in thefourth quarter, 4.1%, we've seen a pretty profound reaction on the ASX didtouch that record of 7632 points briefly.

Has reversed away from that now, but wasstill in positive territory after being kind of tepid all day.Other markets they were seeing a little bit of softness.The Nikkei off by 8/10 of 1%, the cost be pretty much flat and it's really theindex heavyweight Samsung that's dragging the cost down at the moment.Samsung off by two thirds of 1%, big things on the top line figure of netprofit for Samsung. But a lot of that was to do with a oneoff tax credit. So the market really waiting to hearmore from Samsung about the outlook, particularly around AI and chipproduction.

New Zealand meanwhile off half of 1%Annabel. Yeah.Pull in. Something else that's going to play intothe market reaction today or action rather, is what we get in terms of thePMI numbers because China's official January report is set to be released injust under an hour's time from now at the headline manufacturing gauge level,we're expecting it to be in contraction through the last three months of 2023.Bloomberg Economics as well, says today's data will show activity revvingup before the lunar New Year holiday, but it might not be enough to provideany sort of convincing evidence that.

China's economy has finally turned acorner. Let's discuss now with our guest.Raymond Wong is ANZ chief economist for Greater China and joins us in Hong Kongthis morning. So yeah, Raymond, I mean, even if we dosee some broader numbers coming out of this, it probably won't move the dialtoo much. Yeah, absolutely.I think it's below 50, it's contractionary.We have to bear in mind that this is a distortion with the Lunar New Year aswell. We have a February Lunar New Year thisyear and the Year of the Dragon, by the.

Way.Then whatever seasonally adjusted effect effect impact, that's not going tochange the fact that the economy is slowing down and the numbers should beweak. And so how much does that tell you?Perhaps we could be setting out for a period of longer term deflation.Usually people look at the headline number, but then starting from lastyear, I started to look at the subindex the price of the index, for example, theselling price of the index off the manufacturing PMIs has been below 50 fora long while. And I also look at the nominal GDPnumber that we are forecasting 3.8% this.

Year versus the real growth of ourforecast 4.2%, which means that the nominal GDP growth is lower than thereal growth. And China is absolutely, you know,already in the deflationary era, I would say, because I don't seeany reason the driver to boost price plus the fact that, you know,domestically the market has been very, very competitive and firms andenterprises, they are cutting price. So I think the deflationary trend willcontinue. I don't see any pickup of the apology asa price index or CPI in the first half of the year.We have to wait until the second half of.

The year.Then we may be able to see one or two months of positive PVI.So by the policy efforts we've seen from from from policy makers in China don'tseem to be working too much. Is there any sort of transmission effectthat's playing into that, do you think? So far this year we've seen a travel cutto market, so we're expecting an interest rate cut.This didn't happen in January and this may happen, you know, by April.Give them a breathing space, you know, to think about what to do.We also expect some fiscal policy before the National People's Congress in March.Then they may start to talk about more.

Bond issue to support the infrastructurepolicy. But overall, all this sort of, you know,piecemeal fiscal stimulus measures are not able to change too much expectationthat the slowdown will stop because this is rather structural rather than acyclical. Yeah, well, to your point, markets justkeep on declining. We've seen the CSI of another, Ibelieve, 2.6% just this week. Can you foresee a scenario where marketsreally do start to twist policymakers arms into delivering that big stimulusthat they seem to be asking for? There's a lot of talk about a rescuepackage last week on how the the.

Authorities are able to stabilise themarket sentiment. But, look, you know, this is just asentiment poll is is not really anything that can change the economicfundamentals. So as long as deflation remains andthere's got to be some pressure on industrial earnings, some pressure on,you know, companies valuation, and that's more about how the government isgoing to change the market expectation, especially in private sector and alsohow so expectation about poverty paths. We're not expecting any meaningfulrecovery in Chinese property market in 2024.So I think that the overall the growth.

Momentum and also the market is ratheralready pricing, you know, the outlook of yield, the dragon.Just to circle back to what you were saying earlier about deflation.Now, Bloomberg's also reporting today that white collar wages are falling inChina as well. And when you put that alongside all ofthe other difficulties that people are facing, the problem in the Trumpproperty sector, the declines we're seeing on the share market.At what point does political risk start to build up in terms of the socialcontract between the Chinese government and the people?We've seen a strong unemployment.

Pressure happening, you know, in theprivate sector. China has close to 300 million ruralworkers. You know, in the urban area.They are looking for jobs. More many of them are actually workingin the construction industry. So I think that the government knows howimportant a property market and the public sector is to employment, to wagegrowth without a meaningful raise growth and private sector, real wage ordisposable income growth at the rate below the overall GDP.So that's also a main drag to household consumption toI think that the government no.

Government knows that this number, likeunemployment or youth unemployment, is more important than GDP number.So I believe that this is the top policy agenda this year for the State Counciland and trying to boost employment and stabilize unemployment pressure in theurban area. At the same time, they also need to lookat how to stabilize the financial or the sentiment of the financial markets.So there are two major objectives that the Chinese governments need to focus onunemployment in the urban area and also financial stability.Financial stability, though, given that thestock market really just represents.

Quite a small percentage of ofindividual household wealth and property really makes up a lot more of that.Why? What do you think that that tells youthen about the actual priorities for financial stability?I think on, you know, the the Chinese government's care about both, you know,financial stability and the economic fundamentals, not officially thefinancial stability, but is much more complicated than the you know, thinkabout any countercyclical policy to boost the economy, which is ratherstraightforward, you know, either through the fiscal policy or monetarypolicy, but in terms of financial.

Stability, they need to care about, youknow, the debt and leverage of their both the private sector, the propertydevelopers and also, you know, some financial institutions, too.So this year, they are already trying to strengthen the party control indifferent financial institutions of senior management and also, you know,how to reform the financial policy within the financialregulators and also the PBOC. I think these are these will be a majortask that the party central is trying to address.Mm hmm. All right, Raymond, thanks for yourtime.

That was Raymond Wong, chief GreaterChina economist at ANZ. And as we said, those PMI numbers due inabout 45 minutes from now. But you can watch this live and see ourpast interviews on our interactive TV function, TV go.You can also dive into any of the securities or Bloomberg functions wetalk about, plus become part of the conversation by sending us instantmessages during our shows. This is for Bloomberg subscribers only.Check it out at TV. Go. You're watching DAYBREAK Asia.Here are some of the corporate stories.

That we're tracking.PayPal cutting about two and a half thousand jobs.That's 9% of its workforce as rising competition puts pressure on profits.In a letter, CEO Alex Kris says the decision will right size the company.Those affected will be notified this week.PayPal was an early disruptor in the payments industry, but rivals have sincecrowded into the space. UPS saw its biggest share drop sinceApril after announcing plans to cut 12,000 management jobs.It says the move will save more than billion.CEO Carol Tome says the cuts are.

Possible due to new technologies likeA.I.. U.P.S.expects sales for 2024 to come in between 92 and 94 and a half billiondollars Trailing estimates. Jack Dorsey's fintech firm, BLOCK, willbegin cutting jobs as part of a goal to cap its workforce of 12,000.BLOCK declined to give specific details on how many jobs are affected.The company announced the cap when it reported third quarter earnings inNovember. BLOCK has been trying to rein in coststo boost profits, and Bloomberg's learned that UBS has cut a group ofsenior bankers as it continues to reduce.

Headcount after its takeover of CreditSuisse. Sources say several cuts were made lastweek. UBS workforce jumped to about 120,000when the deal closed in June. The bank says it aims to save about $6billion in staff costs in the coming years.BELL Thanks for we can stick with that themeof job cuts at banks because we've actually had the Japanese lender Nomuraannouncing that it's cutting 60 staff, and most of that is in investmentbanking. That is ahead of its earnings resultlater today.

Mizuho as well is due to report, but itis actually planning to expand its US equity research desk instead.Let's cross to Tokyo and our Asia investing reporter Russell Ward again.So, Russell, it does seem like those job cuts under UBS, we just mentionedNomura, another one. What exactly does that signal to us?I vow. Yes.I mean, the job cuts are flowing worldwide in the banking sector.Latest. The big news coming from Nomuraovernight ahead of its earnings later today.As you mentioned, 60 jobs being cut, 30.

In the US and mostly in investmentbanking. And this, of course, reflects the theslump in global dealmaking that all banks have been afflicted by, includingon Wall Street. We've had, you know, the big banks therecutting staff and on the banking side. But specifically for Nomura, the reallyhave faced enormous pressure to cut costs on the wholesale banking businessin recent quarters. Only a couple of quarters ago, revenuecosts actually exceeded revenue from that division.So it was losing money. It's managed to get the ratio down toabout 96%, but it's really trying to cut.

That down lower.The CEO last year announced that he was seeking more cost cuts from thisdivision and this these job cuts reflect that.And really I think it's also just reflecting a tough decision for Nomura.It really is have been trying to expand in investment banking in the US, thelargest fee pool. And so it really these these cuts wereprobably a tough decision for Okuda. But we're going to hear from Nomura abit later on with earnings today. What can we expect there?We're actually expecting quite solid results.Profits going to fall about 26%, but.

That's mainly because of the absence ofa one time gain that they booked last year when they sold out of a stake in aresearch affiliate. But really this is going to be drivenmore on the domestic side. The retail business is doing very well.It's recovering very well on the back of the Japan stock market rally.But, you know, there's going to be questions, a closely watched, you know,figures on the wholesale side whether those cost cuts are going to showprogress. As I mentioned earlier, also, the fixedincome business that's traditionally Nomura's strength has had a softercouple of quarters.

So we'll have to see what happens onthat front as well. But, you know, looking long term,looking ahead, this year started off very well for the Japanese brokeragesdue to the Japanese stocks being at the 34 year highnumbers. Shares itself have risen about 19% thisyear on the back of a 30% increase last year.So, you know, I think there are a few tailwinds.Also phenomena and its rival Daiwa, which is also reporting today.Yeah, well, unlike Nomura, which is cutting jobs, Mizuho is planning to addjobs and equity research in the US.

So what's the thinking here?Yeah, I mean, the contrast is very stark, you know,as a whole has been expanding in the US, like its megabank rivals Mitsubishi UFJand Sumitomo Mitsui. It's been doing quite well in the equityunderwriting. It landed the deal, the IPO from lastyear, which is a big coup for for Mizuho.And so we spoke to the head of the Americas division.He said, look, we've we've got enough ECM bankers, but now we want to actuallycomplement that by adding to our research.And so it's adding to research in.

Energy, health care and industries.Recent hires included Bill Featherstone from Credit Suisse as a manager,managing director and head of Americas Research.And so it seems to be on the front foot, as I mentioned.Now, Sumitomo Mitsui is also expanding its deepen ties with Jefferies.And of course, the big one image is this long standing ties with Morgan Stanley.So the big mega-banks looking to diversify away from Japan and makeinroads into investment banking, while Nomura, on the other hand, is strugglinga little bit. That was our Asia investing editorRussell Ward, and apologies at Mizuho.

His numbers, they are due Friday thisweek instead. Not today, as I said earlier.But let's take a look at the earnings focus we have today on Samsung becausethat company continues to be under pressure.It's one of the biggest drags on the Crosby so far today in the session, wedid have its numbers coming out, the final rating for the fourth quarter justin the last hour or so. And what we saw was a fourth straightquarter of profit decline, and that was for the key holiday period as well.So net income dropping 74% in the last three months of the year to 6.02trillion won.

That's after its mainstay CHIPoperations posted a loss of 2.18 trillion won.So that was more than what economists or analysts rather, had been projecting atax credit, though, that did help lift the bottom line to nearly double whatanalysts had been expecting. So you can get more on that.We do have a ti live blog still underway as well, so you can check that out.A t live goes. This is bloomberg. This is Bloomberg News now.News when you want it at the touch of a button.Another volatile day on Wall Street.

We're seeing big moves.All eyes on Capitol hill as Democrats and republicans with today's job numberscasting doubt on the Fed's next move. Inflation remains front and center, andthat's news when you watch it with Bloomberg News.Now get a 24 seven on the Bloomberg Businessweek bloomberg.com and anywhereyou get your podcasts. Bloomberg News.Now context changes everything. So.All right. Let's take a look at how we're trackingon markets here in the Asia Pacific. Here in Australia, we turn sharplypositive.

A little while ago on those CPI numbers,the ASX better by about a fifth of 1%. We're still a few points shy of thatrecord intraday high. However, elsewhere we have got theNikkei in negative territory, up by two thirds of 1%, the costs being prettymuch flat. So the index heavyweight fell.Samsung currently off by about two thirds of 1%.That net profit look like a beat. However, a lot of it due to a one offtax credit bill. Yeah it is that big focus on earningsalso playing into what we see in U.S. futures so far.But in the next hour, really counting.

Down to those China PMI numbers that youand I could show. That factory started to front load aheadof the Lunar New Year break, but still not really going to have a long standingimpact on equities And given the underlying pressures around the propertysector. And we'll have more on that ahead withhanging properties. Vice Chair Adrian Chen joining us live. They're brimming with sensors.There's several cameras that look out at your world because you're mapping yourphysical world so we can put the content in there.There's several cameras looking at your.

Eyes so we know where you're looking inyour physical world. And that's a lot of data.That's a lot of very personal data. There's there's a number of othersensors on the device that are needed to make it work in the way it does.So we feel strongly that, first of all, people should know what these devicescan do. And since we're at the beginning of thecurve, let's work on the right guidelines and put those guardrails inplace now versus letting it out of the bag and trying to rein it in.You know, for several years from now. So who should.What rules would you put in place and.

Who should make up and enforce therules? I think, you know, it's definitely apublic private discussion, but it's a it's a very complex technology.So I actually spend quite a bit of time in D.C.talking to folks and, you know, just educating them on what it could do.But I think, first and foremost, that the data that it collects, there needsto be an understanding that the user needs to understand the level of datathat it's collecting and then be the one who says where that data goes.I think I was around so many powerful people in my entire life from the time Igot married to Robert Kardashian and had.

A whole ecosystem of businessmen andentrepreneurs and people running studios and, you know, any given day it would bethe head of a studio and, you know, just often paid attention without reallyrealizing I was paying attention. And I had a very amazing education.I was a housewife. I was raising four kids at home.I had the most blessed situation. But at the same time, surrounded bythese business situations that I didn't even realize were happening right infront of me. But I must have been absorbing itbecause there's so many times I've like, like brought up in my mind one of thoseconversations that I had learned from.

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