Welcome to DAYBREAK Australia.I'm Paul Allen in Sydney, where markets have just come online.I'm at a boat rollers in Hong Kong where counting down to Asia's major tradingopens. And the top stories this hour.A sea of red after big tech earnings test, the strength of the AI fueledboom. Revenue from Alphabet's core searchbusiness disappoints, as does Microsoft's cloud growth and AMD'sforecast. Samsung's results are up next, withanalysts expecting another profit plunge but awaiting any hints of a turnaroundin the memory and smartphone markets.
And President Biden says he's decided ona response to a deadly attack on U.S. troops, repeating that he doesn't want awider Middle East war. All right.Let's start with some breaking news out of South Korea.Tourism, industrial production numbers for the month of December.And it's a pretty handy beat as well, growing 6/10 of 1% on month.The market expectation was for a pretty tepid 1/10 of 1%.A bit of a slowdown from what we saw in November.3.3% on month was still a handy beat on year.The figure, 6.2% growth also better than.
The 5.3% expected.So a big beat for South Korea industrial production in the month of December.All right. Let's take a look at how we're trackingin Australia here. We've just opened a few moments ago.Currently we're off by a few points. We do, of course, have the staggeredopen here, but is today the day yesterday we got within two points ofsetting a record on the ASX surpassing well, we would have surpassed 7006 32records set in August 2021, But in the early going, looks like that may remainout of reach for one more day. We've seen yields on Aussie bondsgrinding a little bit lower 411 at the.
Moment on the ten year the Aussie dollarjust hanging on above $0.66 US. We will get fourth quarter CPI numbersfor Australia later on today. We're expecting to see a pretty sharpcontraction there to 4.3% and of course it's the first RBA meeting of the yearand next week we're expecting to see the bank stay on hold though.Let's take a look at have futures placed for the start of trade in Japan.At the top of the next hour. The Nikkei put on some modest gainsyesterday. We're expecting to see a bit of apullback today to the tune of about two thirds of 1%, that's futures traded outof Chicago, at least.
It was a rather mixed finish for USstocks. The yen just hovering around that 147mark. Chinese futures very narrowly inpositive territory. But we have seen, Annabel, those marketsin China just continuing to grind lower this week.Yeah, that's right. And really a big focus on that PMI datawe get out later today. But the focus I think of what's going tobe leading to the weakness in Asia today really comes down to these numbers thatyou can see here because there's been a lot of after hours reporting today, butthe focus very much on Microsoft and.
Alphabet, actually, there was a lot tolike in these numbers that came out. But investors are focusing on thenegatives here. So Alphabet, it's about search revenue.What came out of that Microsoft as well, that focus on cloud growth and thesenumbers perhaps didn't live up to some of the expectations on Wall Street amdanother one to track because it gave a weak revenue forecast for the currentperiod. So really similar to what we had toIntel earlier this week. But that's the reaction we're seeinghere in after hours. You can see as well, KUKU, that's theETF that tracks the Nasdaq and that is.
Dropping here.But let's change on because we just had futures coming online.And again, the picture here is a bit of weakness.Ahead of the open at trade is, of course, sifting through those earnings.But you've also got the Fed decision that's coming up.This Treasury issuance is jobs numbers as well.So there's really a lot in the days ahead.But again, Paul, that focus on the tech numbers.Let's get a little bit more detail on those earnings from our technologyreporter, Jacki Devalos, who joins us.
Now.So, Jackie, let's start with Microsoft, a beat there on revenue and profit.What were the key drivers of that performance?Well, digging into some of the figures here, the main number we have to look atand investors care about is that Azure Cloud Services unit growth that came inat about 30% compared to the last quarter that beat expectations.And the company said that about six percentage points of this actually camefrom A.I. related services.This is good news given investors were looking for some evidence of those AIbets paying off.
Some other bright points in the reportincluded Xbox revenue being up 61%. That Activision contribution after thatdeal closed in October. Really trickling into the performance onthe whole and the revenue and the productivity in the business processunit which houses Microsoft Office, also came in higher than expectations.The company, however, did not disclose what those co-pilot's subscriptionfigures look like, which, as you remember, that has been the big newshere. That product holds the keys to how A.I.is really panning out for the company. Still too soon to say whether or notit's really paying off, but we're going.
To get some commentary from executiveson the call right now. Yeah, I mean, we know that Microsoftwants to be an AI powerhouse. That's really their stated goal.But how do we see it showing up then in the results?Well, again, you look at that Azure growth with those six percentage pointscoming from AI related services, you know, that shows that it's showing it'sgetting some of that impact flowing through.It's still too soon to say what that co-pilot contribution is going to looklike. But the company the company said a SatyaNadella in a statement accompanying.
Results that, quote, We've moved fromtalking about A.I. to applying A.I.at scale. So the company is really taking hold ofit. Show me the money moment here.But again, it's not really enough for investors so far with shares comingunder a little bit of pressure. It's going to boil down to that outlook.Is this API contribution going to grow or stay stagnant in the quarters tocome? Well, we saw Microsoft shares dippingafter hours immediately after this report.Currently just slightly in positive.
Territory.Why is the market responding this way? Well, one of the reasons here is thatAzure growth has seen some sluggish quarters in previous periods.It looks like it's starting to recover in part due to that AI related growth.But investors are looking for a little bit more of a boost when you think aboutjust how much excitement has been baked into AI.They're looking for a little bit more. We were seeing 50 to 60% growth in theheyday during that post-pandemic period, and cloud computing was really on atear. And that's come down quite a bit becauseAzure is such a major profit generator.
For the company.Having this see a more substantial growth is a big expectation for thecompany. Now, there's still a lot yet to be seenin that qualitative commentary that's going to come from the conference callthat's going on at this moment. So there might be better news forinvestors there yet to come. Where investors are also disappointedtoday really comes down to those alphabet numbers because that stock hasbeen dropping in after hours. So it does seem that it really comesdown to the search business. A little bit of a different story therefor Google.
It's that core search business that isits main financial engine. Now, the company also beat on itsoverall revenue number. It brought in about 72 billion andinvestors were looking for 71 billion. It was also more profitable, bringing in1.64 per share. But that revenue, that search unit was48 billion, just narrowly missing. Now, the reason that's so important,even though it was a small miss, is because it's the biggest profitgenerator for the company. Some bright spots there, though, forGoogle. That cloud unit was double more.Its operating profit was 864 million,.
Double what analysts were expecting.Despite that, seeing any kind of weakness in that search unit bodes moreconcerns for investors who are looking to see stability there.So what's the outlook for the alphabet going forward?Well, it has a few things percolating. It's been a little bit slower to thegame than a player like Microsoft, which is partnered up with Openai.The company just released its largest or its most powerful large language model,Gemini, in December, and it said that it's going to start incorporating it insome of its more popular productivity tools as well as its search engine.Now, it's taken a little bit more of a.
Gradual approach because it is a searchgiant. Here is a little bit more to lose.It doesn't want to off put consumers from its core products, but it's goingto have to show that it has a stake here.And it's a little bit harder to see in the figures because they don't break outa specific AI contribution. But what the company is saying is that,look, we've been in the AI company for a while now.AI is only going to bolster our business.One of the ways that we can see this really trickle through is that cloudrevenue is generating more business from.
AI startups that are kind of coming intothe game as well. Or is it still kind of playing secondfiddle to the cloud giants like Microsoft and and Amazon Web Services?All right. That was AI Bloomberg Technologyreporter Jackie Davalos. Thanks for running through the numbersthere. Let's get more on them now with KatrinaDudley, senior vice president, portfolio manager and investment strategist atFranklin Templeton. Now, Katrina, it's pretty clear thatthese numbers are sort of casting a shadow over the Magnificent Seven, whichwas the key driver of U.S.
Stocks really over the course of lastyear. So how much does that concern you aboutthe outlook then moving forward? I think when we look at the MagnificentSeven, we think that they're very well priced.And I think the reaction you're seeing in some of the stock prices is areflection of that, that they will will price going into these earnings, eventhough they've given beats, according to analyst estimates.The guidance just wasn't perfect. And so the stocks are reacting as such.As we look at the market, we look at the breadth.So if you look at the S&P 500, for.
Example, there were 493 other stocks.And that's where we see the opportunity in those names outside of thatmagnificent Seven. Yeah.Just to get more views on that Magnificent Seven, though, because theJp morgan, for instance, has been warning of a dot.com style concentrationin US stocks. Is that something you would agree with?Yes, we have seen a concentration in terms of a I think that we see a lot ofopportunities in artificial intelligence.But let's just remember here that we've had a lot of examples.I've been an investor for over 20 years.
Of, you know, companies, you know, beingthe innovation leader and then stumbling.I don't think many people remember WANG But one was a leader in computing andstumbled. So I think that companies arecontinually having to prove themselves and continually having to prove thevalue proposition that comes from A.I.. You've got Microsoft, which is in thelead at the moment, but Google's taking a more deliberate approach to doingthis, or alphabet in terms of the way that they're introducing.And I think that at the moment the jury's still out as to which purchasedbetter.
Katrina, I want to move on, if we can,to the big macro event coming up. It is, of course, the Fed decision onWednesday US time. We've had some pretty strong data.But then again, Bloomberg News also reporting a lot of job losses today fromUPS, PayPal, Nomura as well. What sorts of things do you expect theFed to balance here? What's the rhetoric you expect to hearabout rate cuts going forward? I think as we look at the Fed, one ofthe things we need to continue to remember, it's not just the Fed anymore.It's the ECB as well. They're data dependent and they'rereally paying attention to the data.
And you've mentioned a couple of thesedata points which will be important to them.They're looking at the unemployment rate.They are looking at the rate of new hires.They're looking as well the rate of job loss.And they're also looking at inflation and they're looking at all of thesefactors as it relates to the strength of the economy and the strength of theeconomy on a forward looking basis based on these historical data points.So from our perspective, I think that the Fed gets a check mark in terms ofcontrolling inflation.
I hear the job losses, I feel for thepeople, but I think that the economy from a jobs perspective is still verypositive. So I think that the while the market'spricing in around a 5050 chance of a rate cut in March, I think that that maybe somewhat optimistic that they're more likely to see a rate cut towards the endof the year. Yeah, certainly.Consensus seems to be coalescing around May as a possibility for the start ofeasing, but I just want to know how confident you would feel in declaringvictory over inflation and recession averted.I think in terms of victory over.
Inflation, we really had to adjust ouridea of what inflation is for. So much of the last decade, we've beenlooking at zero ones as an inflation target.Now we're talking about something as a 2 to 2 and a half as being declaringvictory. I think that the Fed wants that numberbetween the two and the two and a half before it starts patting itself on theback. You've got some of the housing datawhich is showing the rental income numbers are starting to show a littlebit of tempering. That's going to help.And so I do think that you can get the.
Number down into the two and a half to2% range at that point. However, I'm not sure it means that theFed needs to cut. I think what it means is the Fed at aminimum, can hold where they are they are at, and then they can continue towatch that job number. And if they start to see job losses tickup, then they can stimulate the economy with a rate cut.But I do think that may as I said, March is 5050.I think that may still a little early now in terms of opportunities in Asia.I know that you're bullish on Japanese equities.You're certainly not alone in that view.
But do you see that strategy changing inthe coming months as the Fed inevitably starts to ease and the Bank of Japaninevitably starts to move away from zero rates?I think that the drivers of Japan and our bullishness on Japan as a stockmarket are really supported by the rate outlook and obviously the normalizationof policy that is really supported by some of the moves that have been takenby the regulator to encourage the companies to become much more capitalefficient, to be to become much more capital friendly and much moreshareholder friendly. And that's a really big change in theregime.
And if we take a look at some of theJapanese equities, while on the headline basis, you really think you're payingexpensive multiples. Many of these companies have new returnson equity that are significantly below their counterparts in the rest of theworld. So we think that there's an opportunityin terms of arbitrage between different markets and being a global investorgives us the opportunity to do that and to buy those franchises in Japan thathave earnings potential that is also supported by the market.All right. Katrina Dudley is senior vice president,portfolio manager and investment.
Strategist of Franklin Templeton.Thanks so much for joining us. Still to come, Samsung expected to postits fourth consecutive quarterly net income decline while laying out itssemiconductor and AI outlook for the year ahead.We're going to dive into the earnings that due later on this hour.But first, President Biden says he's decided how to retaliate for the deadlyattack on US forces in Jordan. As the White House hints at multipleactions over time. Details next.This is Bloomberg. To hold them responsible in the sense ofsupplying the weapons to the people who.
Did it.I don't think we need a wider war in the Middle East.That's not what I'm looking at. President Biden speaking with reportersafter an attack on US troops in Jordan earlier this week killed three soldiers.The president also says he's made a decision on how to respond to thatattack. Let's get more now from our nationalsecurity reporter and editor. So, Anna, what factors is PresidentBiden weighing in, deciding how the US is going to respond?Well, it's a very tricky balance between deterrence and escalation.The primary goal, of course, is to deter.
These militant groups and their Iranianbackers from launching this kind of attacks on U.S.interests in the region, while also avoiding a wider conflict in the MiddleEast. So to that to that effect, the Vitamin Asituation has said from our reporting that they need a stronger response tothis kind of attack because of the loss of American life.However, it's not clear that they're ready to agree with congressionalRepublicans who have said that it's time for strikes directly on targets withinIranian territory, which, of course, would risk broader escalation.This is taking place during an election.
Year in which gas prices at the pump forAmerican consumers also matters, as well as American weariness with militaryinvolvement in the Middle East. Where does this sort of response from,from Biden or potential response leave Iran then?Yeah, it's interesting to hear the response from Iran.So far, we've heard from officials who have made it clear that they had nothingto do with this attack. We had a foreign ministry spokespersonfrom Iran saying that they don't have any control over these Islamicresistance groups in Iraq that has said that they launched attacks in Jordan,although they didn't claim.
Responsibility for the loss of U.S.lives. We're also looking at the Houthi rebelsin Yemen who are backed by Iran launching these attacks in the Red Sea.But Iran has similarly said that they don't actually control these groups,while they may support them militarily. They're not actually ordering theseattacks. And of course, all of this appears totie back to the war in Israel and Gaza. Right.Yeah. And that's one thing that's makes thisresponse so complicated for the Biden administration, because on the one hand,they're still standing with Israel,.
Saying that Israel has a right to defenditself while, you know, criticizing the loss of civilian life in Gaza.So, you know, working on that, working on getting the hostages home, trying tofind a resolution there while also responding to these attacks where wehave the Houthi rebels in Yemen, for example, saying directly that one reasonthey're carrying out these attacks, snarling the, you know, commercial tradethrough this important trade route is to push for a cease fire in Gaza.So while the militant groups see things, these things as directly related, theU.S. is trying to respond to them each.And it's kind.
Yeah, certainly something we're trackingvery closely. That was Bloomberg's national securityreporter, Anna Edgerton there. And you can get a roundup of the storiesyou need to know in today's edition of DAYBREAK.Terminal subscribers go to day be go. It's also available on mobile in theBloomberg Anywhere app. You can customize your settings so youonly get news on the industries and the assets that you care about.This is Bloomberg. You're watching DAYBREAK, Australia.Here are some of the corporate stories we're tracking.PayPal is cutting about two and a half.
Thousand jobs from 9% of its workforceas rising competition puts pressure on profits.In a letter, CEO Alex Kris says the decision will rightsize 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 $1 billion.CEO Carol Thomas says the cuts are possible due to new technologies likearm ups.
Expect sales for 2024 to come in between92 and 94 and a half billion dollars trailing estimates.Jack Dorsey's fintech firm, BLOCK, will begin cutting jobs as part of a goal tocap its workforce at 12,000. BLOCK declined to give specific detailson how many jobs are affected. The company announced the cap when itreported third quarter earnings in November.BLOCK has been trying to rein in costs to boost profits, and Bloomberg haslearned that UBS has cut a group of senior bankers as it continues to reduceheadcount after its takeover of Credit Suisse.Sources say several cuts were made last.
Week.UBS says workforce jumped to about 120,000 when the deal closed in June.The bank says it aims to save about $6 billion in staff costs in the comingyears. BELLWell, Paul, just taking a look at how U.S.futures are faring so far in the in in today's trading.So they just come online at the top of the hour and you can see that weaknessthere, particularly in the Nasdaq futures contract.Now, this is really the reaction we're getting to to big tech earnings afterthe bell.
Microsoft and Google Parent Alphabet.That particular watch here, we also had AMD.And investors have really been looking at sort of the more negative signalsthat came out of this. So for Alphabet, for instance, it wasthat focus on the cloud. And then we also had or rather thesearch engine and Microsoft that focus on cloud growth as well.They sort of wait, even though Microsoft has since turned positive AMD as well, aweak revenue forecast. So not something that is being receivedvery well by investors. But what's interesting, actually,speaking of AMD, given it is in the chip.
Space we just actually had in the lastcouple of minutes South Korea posting its numbers around chip shipments.And over the course of December, we actually saw those rising more than113%. If you change on Samsung, this reallyplays into their earnings. We're expecting them the full readingfor the fourth quarter just in the next 10 minutes or so.But those chip shipments rising more than 113%.That's the most since 1997. Chip production as well, up more than50%, and that's the most since 2016. So something that is quite positive forfor the outlook for for chip makers in.
General and Samsung, a really key onehere. We'll also get the breakdown on how itssmartphone devices are faring as well. Plenty more to come on DAYBREAK Asia.This is Bloomberg. Right.All right. Let's take a look at how some of thesebig tech names are trading after hours at the moment.Most of them pretty weak. Let's start at the top of the boardthere. Microsoft, it's been whipsawing aroundafter hours, currently off by 1%. So revenue was a narrow beat at $62billion.
There was an hour beat on cloud as well.But investors do have a few concerns aboutthe outlook, their alphabet as well. Ad revenue miss 65 billion.That was a narrow miss. And so investors really are punishingthe company there for that advertising shortfall.And Advanced Micro Devices now of six and a quarter per cent after hours aweek, revenue forecast there as well. First quarter revenue expected to beabout 5.4 billion. That was well short of the 5.77 billionthat analysts were expecting there. So some of those big tech names tradingsofter after hours.
Let's get some more on this with AngeloZino, vice president and senior equity analyst at CFR Research.Angela, thanks for joining us. And I want to start with Microsoft, ifwe can. Second quarter revenue beat, cloudrevenue also a beat, but we're off after hours there.What were the key takeaways for you? Yeah, I mean, we're definitely off from,you know, after hours. But listen, I mean, the stock had run sohot into the number and you can say that about kind of most of big tech.You know, that's why we think it's selling off.But as far as the numbers are concerned,.
I think what most people cared aboutwith kind of commentary on both kind of a cloud and AI side of things as far ascloud is concerned. I mean, Azure growth of 30% was, Ithink, modestly above expectations, looking for about 27 to 28% growth.I think also when you kind of look at what the company guided to for the Marchquarter stock actually turned around, was down about 2%, actually wentpositive at one point. And a big reason was the cloud numberthat they provided. It expected growth again to be about 30%for the March quarter. So that's telling us that there is kindof increased enthusiasm workloads kind.
Of coming onto the cloud.And, you know, you saw that with kind of the fact that they highlighted sixpercentage points of growth coming from services on the cloud side of things andthen so much on the co-pilot side of things.But they did highlight that it is going to improve kind of the trajectory onkind of their office business over the next couple of quarters as you see animproving mix towards co-pilot here. Yeah, there is still overwhelming buyratings on Microsoft from analysts. And I know for you you considerMicrosoft to be perhaps the most magnificent of the Magnificent Seven.Why is that?.
Yeah, I mean, listen, I would throw inMicrosoft and in video right up there in terms of kind of our favorite placeamong the seven names. And for Microsoft, it's more along thelines of their business model. I mean, they've got the most resilientbusiness model among the group. When we kind of think about the growthopportunities tied to them on the cloud side of things as well as on the gamingside of things with the recent acquisition of Activision.And that was definitely kind of a positive, you know, definitely up on thepositive side of things here in the December quarter, we think there isnotable upside here, not only over the.
Next 12 to 18 months, but over the nextdecade from each of those trends. And as a result, this is one of thosenames where any type of weakness that investors are to see, we would recommendthat they continue to pile into the name.I'm interested to get more thoughts from you on on just how hard it is toquantify the sorts of gains that we can expect to see from Microsoft aroundA.I.. Because one line that standing out, forinstance, is around the expectations for the third quarter for more personalcomputing, and that could be from 1.47 billion to 15.1 billion.I mean, it's quite a big discrepancy.
There.Yeah. I mean, I think they highlighted morepersonal computing growth of about 11% to 14% year over year here for the Marchquarter. As far as kind of, you know, justpotential here over time. It's a little frustrating because I knowinvestors want them to quantify the potential here over the next couple ofyears. And, you know, I'd say the one commentthat I can refer to a couple of quarters ago, Amy had kind of kind of made areference that this would be a kind of the quickest $10 billion revenue in thecompany's history.
And again, they haven't kind of providedany type of update in terms of what the monetization potential of air is.But our view is, again, on the cloud side of things, you can continue to seethe incremental growth of that contribution from AI on that side ofthings. And as you kind of exit calendar 2024,the number we think is going to be significantly above where theexpectations are right now as you continue to get more of those GPUs intokind of the cloud side of things. And the co-pilot, I think it's just await and see kind of thing. I mean, those early days, the companyhas highlighted the fact that it's going.
To be more of a second half calendar24 opportunity in 2025 opportunity. But it's not, you know, for investorsthat are kind of looking for kind of a Nvidia type inflection in terms of AIcontribution on the Microsoft side of things, that's not the way this is goingto work. It's going to kind of be a slower slog.There may be some out there anticipated and maybe why you're getting somedisappointment in terms of the share price not only for Microsoft but alsofor AT&T and Alphabet after was there. Yeah, I wanted to get your viewsactually on AMD because again, yeah, they were pretty optimistic on theoutlook for AI chips, but still it's.
It's that weak forecast that peoplereally seem to be clinging to. Yeah, it is.It is a weak forecast. I mean, you kind of look at AMD.I mean, essentially it would imply about a 12 to 13% sequential decline in termsof, you know, on the revenue side of things, it was better than what Intelkind of guided to in terms of it about a 17 or 18% sequential decline.And a big reason for that is because the data center business is holding up, youknow, greater GPU revenue potential here in calendar 2024.On their side of things, they are just now ramping up the 300.So we remain very excited about that.
Story for the company as well as therecovery for, you know, their overall business.But I'd say as far as kind of the weakness that is greater than expected,seasonality declines because you start off calendar 2023 on a low note in termsof their PC business, probably over shipped a little bit in the second halfof calendar 2023 and you're kind of seeing some of that normalization playout as well as some of their other businesses like their embedded business.So areas like industrials and automotive also weak.So, you know, a big reason for that. But nonetheless, the secular storyremain intact, that we continue to.
Remain very bullish and kind of AMDbeing that second big player on kind of the GPU side of things, far behind invideo, but still a beneficiary. Yeah, it is that really big questionmark of who's going to win that race around AI and there is that dominance ofNVIDIA, but you've got the likes of Intel that's coming into the space aswell, AMD both of those results out early this week.And then you've also got those external competitors, all those companies thatare choosing to go in-house. So how does that sort of way into theoutlook as well? Yeah, I think you've got to account forall of that.
But, you know, and our view is this isgoing to be a massive market. I mean, you've talked about and we'veheard about, you know, in various sizing up the addressable market of 300 pointTAM in terms of the data center side of things at 300 billion, you've heard itin various AMD releases do recently at an event in December.Talk about the accelerator market potentially being a $400 billion marketby 2027. So it's tough to really say how thetrajectory is going to go here or how big the addressable market really is forthis market, for the space. But when you think about the acceleratorspace overall, it is big enough for all.
Three of those names that you justalluded to in video. AMD and Intel to kind of take a slice ofthe pie, the question is how much of the pie each one of these companies willget, we think in video, will continue to be able to dominate and get 80, 80, 80to 85% of the share there. And then as far as kind of some of theseother companies internally developing their chip, we don't think it's going tobe a huge detriment to these other companies.It will kind of act as somewhat of a headwind.These companies have to kind of somewhat manage the cost trajectory of theirbusinesses and investing in AI.
So you are going to get some of thoseworkloads kind of go into some of those internally developed chips.But at the end of the day, you need if you're.You're in the cloud, you need to continue to invest heavily in the mostadvanced chips out there because there is a war in the in the in the cloud outthere. So we're not that worried at all as faras the prospects for, you know, those companies that you just referenced.Well, Angela Zaino, thank you very much for your time this morning.That was the vice president and senior equity analyst at CFR Research.And just as Angela was speaking there,.
We actually had the Samsung earningsthat came out. This is the final reading for the fourthquarter here. And at a headline level, we saw a netbeat on estimate of rather net income beating estimates here.So the income coming in at 6.02 trillion won.That's a very handy beat on what the estimate was for around 3.16 trillionwon operating profit as well. Coming in at 2.82 trillion won salesjust under 68 trillion won. So Samsung, as we know, this is thefinal results. We do get the prelim numbers early inthe month.
It gives us sort of a signal, but ittells us these numbers that that chip weakness is persisting because we'rejust starting to get that divisional breakdown here.And we can see that for the CHIPS numbers, that operating loss was at 2.18trillion won. The estimate had been for a loss of 1.7trillion won. So not really the numbers perhaps thatthey want to see given as well those chip sales just coming out and a littlebit of a beat here on estimates of perhaps that pricing is playing into it.But 21.7 trillion won a little bit better than the estimate for 20.2trillion won.
But Paul, really these numbers as wellplaying into what we just got from South Korea in terms of their reporting on thechip exports, chip production over the course of December.Yeah, we did hear that South Korea does plan to lift its manufacturing capacityin 2024. Perhaps good news for chip prices,perhaps not such good news for those companies that make them in terms ofachieving revenues. But South Korea accounts for two thirdsof the global production of chips, so that lifting in capacity should bringdown prices. There also are going to be interestingto hear from Samsung in terms of its.
Activity around the.So we'll be watching for headlines around that.Of course, it's launching its latest Galaxy device smartphone series, callingthem the first ace smartphones. Yeah, well, it's been around for alittle while in smartphones. So how much of a marketing gimmick isthat? We'll be keeping an eye on that as well.But it's also competing with sky high next to sell high bandwidth memory, too,and video as well. So plenty of other things that we'regoing to be looking out for in this set of numbers.But certainly on the headline, there are.
Those fourth quarter net numbers, 6.0 to1, a very it's trillion one, very, very handy beat bill.Yeah, we're we're certainly tracking those numbers.But the focus the company as well saying that it's going to be on profits in thefirst quarter and that's going to come via high value added products.So this focus really coming down to that chip operating loss of 2.18 trillion wona lot bigger than what estimates had been.We're still just getting that divisional breakdown that's coming through here.But the net income, as you said, almost double the average of analyst estimates.So the question, of course, is how.
Samsung starts to trade.We are getting its short term priorities as well.As I said, the first quarter of 2024 focusing on improving profitability.And you can also turn to your Bloomberg for more on Samsung.Go to t live go to get commentary and analysis from bloomberg ex bloomberg'sexport editors rather. Samsung's first fourth quarter earnings.The analysts call. We're waiting for that ahead.This is bloomberg. The IMF has raised its forecasts forglobal growth this year on better than expected expansion in the US and fiscalstimulus in China.
Chief economist Pierre Olivier GordonCharles told us that persistent risks from wars and inflation could change thelatest outlook. So we have 3.1% growth for 2024, andthat's a 0.2 percentage point increase compared to our October forecast.And there are a combination of factors. We see a lot of resilience in a numberof economies in the US, in China and in many large emerging market economiesBrazil, India, Southeast Asian economies, Russia.So all of this together, that's what is lifting the growth number for this year.Behind this, what we see is we see strong demand in some countries, privateconsumption, public consumption, but we.
Also see supply side forces.We see the unwinding of remaining supply chains restrictions, we see energyprices coming down and we see a lot of strength in labour markets.Is China, though, a different story now? I mean, given what we've been seeingover the past few weeks, especially when it comes to the property sector, isthere a concern? Well, there is a concern with theproperty sector. It's a concern that we already had backin October. And the property sector has not beendoing well for some time now. And what we're seeing is that's one ofthe reasons why we have slightly lower.
Growth for China next year compared tothis year. So we're projecting 4.6% in 2024 and5.2% last year. But that has been revised upwardsbecause we have also the Chinese government has been implementing afiscal package that is trying to support consumption, trying to supporthouseholds and investment, and that is having some impact on growth.Is it enough? So many people are saying that it's notit may not be enough. I mean, we are concerned that this isstill going to weigh down on on output growth in China in years to come.We're also concerned about the more.
Medium term growth prospects for China.They seem to be coming down from sort of the turbocharged growth we've had inpast decades. And that's something that has to dowith, you know, declining productivity growth, declining demographics.So there are a number of headwinds for the Chinese economy.IMF chief economist Olivier Grinch speaking there with Bloomberg's JenniferZubizarreta. Let's take a look at how we're trackingour markets at the moment. The A6 now steadily and rapidlyreversing away from that intraday record that we got within two points of hittingyesterday as the ASX weaker by a third.
Of 1% doesn't look like we're going torecapture that high watermark today, seeing a bit of softness in New Zealandas well. Nikkei futures also setting us up for asofter open off by about two thirds of 1% right now and S&P Mini is a littlebit weaker as well. And it was kind of a mixed day for USequities. Also, we saw the S&P flat and the Nasdaqgiving up some gains there as well, waiting on some important data out ofAustralia today. The fourth quarter CPI numbers that dueout in the next hour. Bloomberg Economics says headlineinflation probably eased by quite a wide.
Margin.Let's get more details now from our economics reporter, Swati Pandya, herein Sydney. So Swati, tell us a bit more about whatwe might expect today. Yes, So today is the fourth quarter CPI,which the RBA and financial markets are eagerly waiting for.So we are expecting headline inflation to fall to 4.3% from 5.4% in Q3.And Trimmed Mean is also going to be 4.3%.So trimmed mean is the gauge that excludes volatility and the RBA actuallyreally focuses on that one. So both headline entry mean are sittingat 4.3%.
So it is falling by a wide margin fromfrom Q3. But we've got the RBA meeting next week,the first one of 2024, the first one under the new settings as well.It's going to be a two day get together. We are expecting them to remain on hold.But what about that easing tightening bias?Is that going to stay in place? Yes.So the tightening bias is expected. The new governor, Michelle Bullock, hassounded hawkish and we are even though inflation is coming offat 4.3% or thereabouts, it is still way above their target.So 2.3% is their target mandate and they.
Do want to see it come down.So it is moving in the right direction. But we have seen in some placesinflation remaining sticky and that is the RBA's concern as well.So they do want to sound hawkish. So we're still getting a sense of how wefinished off last year. But the early indicators so far, arethey telling us that the Australian economy is holding up?Yeah. So the data so far has been a little bitmixed. So Australian consumers are actuallybearing the brunt of this the most. We had retail sales data this week whichpointed to a much bigger slowdown in.
December than economists hadanticipated. Consumer sentiment is pretty weak aswell, but how's the housing market is going strong, The labour market ispretty solid as well. And consumer, while consumer confidenceis weak, business sentiment remains pretty okay.So so we are seeing kind of mixed trends and that is another reason why the RBAis not 100% sure that inflation will hit the target very quickly and that isanother reason they are likely to remain hawkish.All right, Economics reporter Swati Pandya in Sydney, thanks so much forjoining us.
So that RBA meeting, it's going to be atwo day meeting. We'rewaiting on some breaking news that was a little bit premature, that flesh.We are waiting on breaking news out of Japan.It's going to be retail sales and industrial production for the month ofDecember. But just while we're waiting for that,I'll just remind you that the RBA running off a slightly different set upin 2024, cutting down to eight meetings per year.Those meetings are going to be two days long.At the end of it, something new also.
Will be getting a press conference fromthe governor. Michelle Bullock also.Right. Those numbers I promised you now hittingthe Bloomberg industrial production out of Japan as a partial reading for themonth of December. A bit of a miss coming in the 1.8%, themarket was looking for two and a half per cent an odd year.That's a contraction of 7/10 of 1%. So some disappointing numbers there forindustrial production. Retail sales just hitting the tape nowas well. That is also a miss expanding 2.1% onyear in December, but the market was.
Looking for much more than that 5.1%month on month. That equates to a 2.9% contraction.We take a look at the year and not a great deal of movement there, 147 to 47against the greenback at the moment. But just to recap for you, a miss therefor both retail sales and industrial production in Japan.Okay, You can watch this live. You can also see our past interviews onour interactive TV function. TV go there.You can also dive into any of the securities or Bloomberg functions thatwe talk about. And you can become part of theconversation as.
Well by sending us instant messagesduring our shows. This is for Bloomberg subscribers only.You can check it out of TV. Go.This is Bloomberg. You're watching DAYBREAK.Australia is recapping some of the breaking lines that came out in the last10 minutes or so. These are numbers for Samsung.The fourth quarter final results just dropping.Now at a headline level, it was net profit.That was a handy beat on estimates here. So coming in at 6.02 trillion won, theestimate had been for 3.16 trillion won.
CapEx as well over the course of 2023totaling 53 trillion won. Chip operating loss, that was at 2.18trillion won. But certainly we are getting some senseof perhaps there could be a sort of recovery over the course of this yearinstead, because we are seeing better than estimated chip revenue fromSamsung. Also adding to that were the numbers weactually got out from South Korea's industrial activity data for Decemberand that told us that semiconductor shipments were rising and also chipproduction increased in turn. So Samsung certainly one of the oneswe're going to be tracking at the top of.
The next hour.We also are watching for the market reaction to its smartphone lines aswell. It is expecting a rebound over thecourse of 2024 with chip prices as well starting to climb.But the company saying that its ability to offer promotions and otherenticements, that's going to be a little bit limited still, though, certainlysomething to be watching because we are seeing a bit of uptick in overall globaldemand. And that does bode well for the SouthKorean company over the course of this year, Paul.Yes.
So with that in mind, consider some ofthe stocks we're going to be watching when trade opens in Korea and Japanshortly. Asia's big tech sector obviously infocus, Alphabet and Microsoft falling in post US trading following somedisappointing results. And we're going to be watching suppliersof AMD and air related shares as well after the second biggest maker ofcomputer processors gave a weak revenue forecast.And that echoes Intel's downbeat view of the PC and data center chip markets.BELL Yeah, well, Paul, just adding to all ofthe breaking lines, we actually had the.
BOJ just releasing the summary ofopinions from the January meeting. A couple of the headlines to be trackingfrom this is that they are saying that they will mull the end of negative ratesif that 2% inflation goal comes into sight.We have been tracking perhaps a bit of mixed readings coming through, but tokyoinflation, the latest one missing. What economists had been expecting,though, and now the DOJ memo did say that conditions are increasing for theend of negative rates and that there is a need to start discussing when to exitthat policy setting. A lot of the economists we're speakingto saying April is the most likely time.
We'll see an exit away from that policy.More ahead next with the opens in Tokyo and Seoul.This is Bloomberg.
