shery: kaven tsang, vp and senior analyst at moody's investor service. we have an alert on the bloomberg. we are hearing from foxconn's terry guo, that he is considering running for president in taiwan. that heheard from him will be stepping down as his role of head as foxconn, after founding the company 45 years ago. we are hearing from terry guo that he is considering running for president in taiwan. mentioned he will reduce his commitments in foxconn. foxconn moving some of their manufacturing and production to india in order to take advantage of the growing smartphone market there. now we're hearing guo considering running for the taiwan president -- presidency. plenty more ahead on "daybreak: asia." this is bloomberg. ♪ show ishe shanghai auto getting into gear with electric vehicles high on the agenda. china is a leader when it comes to cars come up with a huge number of companies in the market. while traditional auto sales in china are falling, demand for electric cars is robust. it will come down pretty significantly. we expected that. announce

paul: hsbc's outlook rating has .een cut to negative by moody's moody's says profit will be subdued in the next few years but notes if the restructuring plan is carried out properly, the bank will benefit in the future. broadcom rose on reports it is looking to offload one of its chip units. dow jones says it is working with credit suisse to attract bids for its radiofrequency arm, something that would accelerate this move away from being simply a maker of semiconductors. it has revenue of more than $2 billion in the 2019 fiscal year. coming up next, we will have the latest on the house's impeachment push as lawmakers gear up for historic boats. you are watching live pictures of capitol hill as president trump could become the third u.s. president in history to be impeached. this is bloomberg. ♪ >> it takes time sometimes for the fundamentals to assert themselves. >> some of our guests with their outlook for the full year. global stocks are trading near all-time highs, but there may be a few near-term catalysts given that we are seeing signs of overheating, as you can see in the char

joining us is chief apac economist at moody's analytics. does the federal reserve, is this the force behind how a lot of people will react? does the fed hold steady, and central banks breathe a sigh have relief -- a sigh of relief? if he gets more hawkish will somehow find their path more difficult like the central bank of indonesia and even the central bank of india as inflation numbers push higher? >> welcome i think you are right everyone is watching the fed. this is the key role the fed plays right now. my expectation is that, at least by july, there will be some talk about talk about inflation part make, about -- pardon me, about rising interest rates. the fed is going. . to be very cautious. they are going to be sure date send the signal out very early, -- the fed is going to be cautious, they're going to be sure they send out a signal early and in a measured way so as not to set off any alarm bells. i think central banks are holding tight now waiting for that message from the fed. given july, it could be at the august jackson hole me

not so positive is the latest downgrade by moody's on hong kong. is that likely to cause any kind of reaction in the equity session? gradualthink this is a of and for hong kong. people on the ground are not surprised. they could see it coming less year, really since the protests got worse and the third and fourth quarter last year. you could already see it reflecting in hong kong underperforming against other places. the data is reflecting that unemployment has risen in hong kong. passenger arrivals have gone down at the airport. generally, the outlook for business is a bit worse than it has been for several years. that probably means you will see equities be an underperformer relative to the rest of asia for some time. it's already started to happen. we are seeing weakness yesterday as well. although the global economy, global equities are probably going to have a decent year, just means that hong kong will be one of the laggards. there will be some companies that can beat that, because their businesses outside of the territory. those businesses m

moody's analytics chief economist. next, china takes only small steps towards reaching its climate goals. how serious is beijing about its carbon neutral pledge? we have that next. this is bloomberg. ♪ e that next. this is bloomberg. ♪ the usual gifts are just not going to cut it. we have to find something else. good luck! what does that mean? we are doomed. [laughter] that's it. i figured it out! we're going to give togetherness. that sounds dumb. we're going to take all those family moments and package them. hmm. [laughing] that works. wannit's timeight and for aerotrainer. a more effective total body fitness solution. (announcer) aerotrainer's ergodynamic design and four patented air chambers create maximum muscle activation for better results in less time. it allows for over 20 exercises. do the aerotrainer super crunch, push ups, aero squat. it inflates in 30 seconds. aerotrainer is tested to support over 500 pounds. lose weight, look great, and be healthy. go to aerotrainer.com. that's a-e-r-o trainer.com. pr

here to discuss the outlook is moody's associate franco leung joining us from hong kong. great to have you. outlook for 2020 is pretty stable by and large. sales pretty much flat. pricing for the much flat. are there more risks to the downside than up? franco: moody's has a stable outlook on the property sector because we think the sales flourish, and also because the inventory levels are generally healthy, which would support property prices to a certain extent. however, we do see the credit because ofin, mainly the environment, public developers, as well as the weakening demand in the lower tier cities, particularly in the weaker economic regions in china. haidi: at the same time, borrowing costs are at their lowest in about two years. so you are seeing a surge of issuance of dollar bonds. is this really something you are seeing for the biller -- bigger developers or is it smaller developers you are seeing the potential risk when it comes to financing? franco: sure. we saw the beginning of this over the past two weeks or so. we have seen a pretty robust issuance activit

according to moody's to maneuver. you see the pboc being relatively cautious in its support and it's easing for the economy. they have not pursued aggressive rate cuts we have seen from the fed and other central banks. they have not come down the path of asset purchases. they are being cautious. there is now an acknowledgment among officials that corporate debt levels will have to go up as they try to support the economy and, crucially, keep the numbers of unemployed and jobless numbers as low as possible. in february, 8 million people unemployed, that is having an impact on consumer debt level. merchants bank noting eight tickets up in nonperforming loans of consumer debt. that calls into question the ability for the retail sector to bounceback if consumers here are struggling with debt. mackenzie joining us from beijing. next, indonesia is looking at locking down its capital to curb the spread of the coronavirus. this is bloomberg. ♪ >> we are getting the latest numbers out of china when it comes to coronavirus in

katrina ell at moody's analytics, and we are seeing the bank of korea leaving that rate unchanged as expected, 20 one out of 22 economists having forecasted no change -- 21 out of 22 economists that bloomberg surveyed having forecasted no change. we will also have more on the outlook for the global economy with guests tomorrow, when we are joined by bank guests, including the philippine central bank governor. this is bloomberg. ♪ >> it is a sea of red across asia. let's turn to sophie. sophie: an industry expects regulation, and we are keeping an eye on travel and tourism related plays after the government eased rules for vaccinated travelers from 10 low risk countries, and the daily case rate is lower, the lowest level since mid july. the country is pushing ahead with a covid strategy to attract holiday travelers going into year-end. haidi? haidi: speaking of year-end, amazon facing a showdown in india, more important than ever this year as the two look at the in the hour retail focus. joining us is our editor. why is this particularly significant for diwali? >> i think there are

moody's reaffirmed its rating. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am ready cook up to. -- i am ready cook up to. -- i am rich because good to -- ritika. this is bloomberg. shery: it can restore output. riyadh claims weapons from iran were used against two aramco plans. the u.s. has blamed tehran with president trump saying there is strong evidence of its involvement. it is looking that way. we are having strong studies done but it is certainly looking that way at this moment, and we will let you know. as soon as we find out definitively, we will let you know, but it does look that way. shery: that's bring in our reporters. let me start with you. we continue to see these conflicting comments coming out of president trump saying he does not think the u.s. diplomacy with iran is exhausted so what can we expect in terms of the iran-u.s. relationship going forward? >> it kind of depends on what conclusions they come

moody's says the global wave of populism and social unrest is putting credit at risk. the rating agency says its 2020 outlook for sovereign credit is negative given unpredictable domestic and international threats, and the populist policies that we can institutions and hamper growth. moody's says it expects governments to struggle to address credit challenges in the coming year. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. shery: hong kong is bracing from a protester disruption after monday saw one man shot by police and another set on fire. the center of downtown paralyzed by demonstrators. let's bring in sophie kamaruddin. it is now that time of day where people are commuting to work. we are now hearing reports of some bus routes could be suspended. get us up to speed. sophie: that is the case. after a monday of may him that saw the central district brought to a standstill by police, te argas to disperse protesters. we are seeing morni

you are right, moody's coming out, the second big rating agency took what -- agency to cut huarong, citing concerns about funding availability in the market. the fact that they will find it additional to raise additional funds. fitch cut their ratings after china's largest bad debt asset manager failed to meet that deadline in terms of posting its earnings. the concern for investors and rating agencies is you are not getting much clarity from the powers that be here in beijing or their plans about this debt and asset management going forward. they have $23 million of offshore bonds that will come due in the next four years and there is still no clear plan on how they will reap -- meet those debt regulations. so far, we have heard from a world where there is adequate the quiddity. -- liquidity. haidi: tom mackenzie there in beijing with the latest on huarong. this chinese property develope'' s bonds hit record lows over concerns about liquidity. they rattled investors by repaying investors with proceeds from an estate sale. some outstanding bonds are due next month and says they may conside

we are joined by the assistant director for moody's analytics. it to have you with us as always. we are talking about china, vietnam, taiwan, we are seeing price pressures globally, and of course in the u.s. do you see this being transient given how much of it is energy prices and how much we could see a disruption from the new ways of the -- new wave of the virus to the recovery? >> we are expecting third inflation we are seeing throughout asia. it will be temporary. we will not see the same issues of inflation in the third or fourth quarters that we are seeing right now. we are expecting commodity prices will come down further and we have seen some easing of late. the bottom line, underwriting inflation remain -- there are specular prices and a lot of time these economic recoveries create relative impotency or economies might be further ahead of the recovery. underlying inflation pressures are remaining quite subdued. haidi: when it comes to real inflationary risks, how do central banks balance risks, either being behind the curve or ahead of it? are we likely to see a more con

in india and thailand, let us get to analysis from the chief economist at the moody analytics. what is a balance of risk here? in australia that wage price spiral is not quite the same that we see across other major economies. what is the dynamic you are watching? >> the wage price spiral may not be as great as it is in other developed countries. it is beginning to go up a little bit in australia. we are looking at core inflation and food inflation. keeping a close eye on that. thank you for a moment -- think for much of the region it is strong inflation, stronger than topline inflation. this will keep central banks on high alert going further. haidi: in terms of the data dump, what is keeping you watching china? is there a better prospect of a meaningful recovery in the transmission of monetary and fiscal stimulus that we are seeing the lifting of the covid zero restrictions? >> i think that there is a chance. the policy stimulus should become effective pretty quickly. the impact on the faulty stimulus is the opening of the shanghai economy. data starts coming out over the jun

joining us is moody's analytics senior economist. we were expecting a contraction, but they are still in positive territory. with that in mind, how do those pmi's look to you? >> the key take away from the pmi data we got from january was that the economy stumbled early in the year, and that explains why the pboc has been on the front foot from this year and late last year to try and stabilize the economy. china's economy is facing a number of headwinds. on one hand there is zero covid policy, meaning recovery is potentially bumpy and on the other hand we have the slowing property market, so that keeps sure on the pboc to keep maintaining an environment that is conducive to helping struggling businesses as well as household. paul: in terms of maintaining that environment, exactly what do policy settings look like? we have become used to seeing these big spending plans, big splurges on infrastructure. >> what we are seeing is the pboc is taking a targeted approach. five your reductions in the loan primate, rrr -- prime rate, rrr reduc

that is the foreign debt rating getting the downgrade by moody's. the long-term debt rating downgraded to baa1 as we continue to see weakness. in terms of limbered economics, bloomberg intelligence estimate peru pointing to potential recovery in the wake of the pandemic, which has at the economy hard, potentially seeing growth of 3.1%, trending down, but much lower from the potential average growth we are seeing, around 4.5% in the two day gates -- decades before. let's get you over to vonnie quinn. vonnie: opec at its allies have agreed to stick to their existing plan as gradual monthly oil production increases. the minister ratified the supply hike scheduled for october after a brief video conference. opec+ is in the process of rolling back unprecedented output cuts implement it during the pandemic. 45% as so far been revived. the taliban and other african leaders have agreed on the formation of a new government and cabinet. attila beneficial says an announcement will come in a few days. we are told the teller been as been waiting for the full wit

paul: the moody's analytics economist, thank you so much for joining us. let's take a quick look at the markets right now. have been trading in australia almost 10 minutes, and most sectors were off by .2%. ands communications consumer staples in positive territory. new zealand weaker by 1%. we did have trade numbers for the month of october out of new zealand a little while ago. $600 million deficit. nikkei futures unchanged and s&p e-minis pointing ever so slightly higher although things do seem to be getting drowned lower at the moment. the reality is really sinking in that the economic studios package in the u.s. has turned into a political football. let's get to karina mitchell with first word headlines. the stimulus optimism is fading further in washington with differences remaining on both sides despite plans to keep talks going. nancy pelosi and steve mnuchin say they are closer to agreement but each accuses the other of introducing new conditions. infection rates surge across the u.s. with stocks falling as investors doubt a deal will happen befor

moody has upgraded apple to aaa. apple is on track for its most lucrative quarter to date with revenue expected to be around $118 billion. it joins microsoft and j&j as the only u.s. companies on the s&p with the highest possible credit score. up next, and epidemiologist joins us to talk about australia's virus response. this is deja vu moment. >> our guest there on omicron concerns heading into the new year. there is said to be a meeting at the national cabinet today to talk about the omicron variant. a professor of epidemiology joins us now. it stood out to me the prime minister singh on national television that comparing the mask mandate as saying you don't need to tell -- you don't need to mandate people to wear sunscreen and hat in the summer. is that a fair comparison? >> we are still transitioning and what's important is that we have clear messaging about when people need to step up local precautions. in the long term, we don't need to do that with formal mandates and rules, but it is something that the people

moody's is more cautious on what the implications mean for the firm. they are taking a more positive view that any form of state led bailout is some kind of form of extraordinary support. >> what do we know about this bailout so far? >> well, we don't have many details about the a lot itself. investors are looking for more clarity. there are reports from earlier that the injection could be $7.7 billion. that will certainly help offset some of the $16 billion and projected losses that huarong forecasted for 2020. >> what do you see as the assessment, as to whether the potentially -- this potentially means a broad-based appetite for bailing out these similar companies? >> i think in the case of the ratings front, they recognize bailouts and china are very rare. i think investors are looking at huarong. the key thing whether or not it falls into junk territory. investors will of course have prices in. they will be scrutinizing the firms, they have been for months now. the rating is the thing that matters. 50% of investors will have to sell their bonds if

moody's downgrades the ever brand yet again as more issues bloom. this is bloomberg. ♪ shery: fresh developments underway for two of china's biggest ahead dates. landing on selling their stakes in the consumer finance unit, while evergrande issues are deepening after another ratings cut for moody's. let's bring in our chinese edit creditor. rebecca, this is really a slow, ongoing implosion for these two companies. every single day it seems we have a new headline. which one do you want to start with? >> i think here we are seeing the first real signals about potential restructuring or reorganization will look like and it said to be transferring its stake in and. also, potentially planning this debt to equity stock for units. so we are starting to see this move of them returning to their core business and a potential alternative as to how it stays to rustle up funds and shore up investments. shery: let's turn to evergrande, another cut? rebecca: yes, another ratings cut for evergrande. i think this one is slightly within expectations. ever can is cl

outstanding have loans around $14 billion and moody's has cut them to junk. this is one stock that was rounding today. let's dive deeper with mark cudmore in singapore. with all the optimism of a sendingl vaccine, carnival up more than 15% at some point, could we see this upside, that risk on sentiment, replicated in asia as well? mark: i think absolutely. that is the short-term theme, a positive tone. the wholeenerally, background narrative is changing. people are moving on from the shift that economies will see a sustained slow down to, look, policymakers have done extraordinary things with packages they provided and they have promised more. powell said they are not running out of ammunition. there is a massive package in europe, one of the stumbling blocks. investors are going, policymakers will continue having their back, pumping more back in, even if there is a second downturn. we solved the credit market problem. overall the story is very positive. i suppose the question is, we have momentum right, but how. -- how long does it last? a tenuouse based on

moody's analytics's steve cochran. scott minerd is saying the fed's so-called main street program is a disaster and the u.s. has done permanent damage to the jobs market. he spoke to bloomberg about that and the prospect for more fiscal stimulus. of whathe definition saving the economy is. they could put up the package that is proposed, one on a trillion dollars, that is probably -- 1.8 trillion dollars, that will probably buy 3-6nother three-x months -- six months and it will not come in time to make a difference for november. but the impact could start to be felt by christmas. in terms of the long run, the cares act for instance, and the existing program, have done very little to lift structural growth for the long-term. saved they policy has credit markets in a lot of ways. a lot of these bigger businesses that have been able to seek financing. how would you compare that to the access for credit -- took credit for smaller businesses? many of them have shut down already. scott: policymakers are leaving themselves ope

the economists and moody's analytics as the -- at moody's analytics estimate that if they continue, that could shave as growth in% off u.s. the fourth quarter of 2020. the big question is how long that goes on. andhe u.s. goes ahead imposes additional tariffs, that could be a major drag on the economy, just as president trump is gearing up for his reelection. it would also have some impact on china's economy as well, so besides have the guns to their heads to get some sort of deal and avoid extending this trade war beyond much longer. explore one of the scenarios a little more. imagine tariffs due come into effect as threaten -- do come into threa effective threatened. effect as threatened. tom: they look for the thousand listed firms, exporters, major exporters. of the 1000, just 300 have profit margins of more than 10%, so a 10% level of tariffs, and with a weaker renminbi, down 7.5% over the last 12 months, they can just about whether that ther that. out of the 1000 firms, just 60 have profit margins of 25% or above. so it makes it very difficult for chinese exporters. andquestion of

moody's investors service has raised the outlook on india's credit rating to stable from negative. the credit score was kept at be aa three, still at the lowest investment grade. that is on par with russia and romania. the agency says downside risks are receding. australia's banking relator has raised the minimum interest rate buffer lenders need to account for when assessing home loan applications. the australian potential authority sites growing risks to financial stability. it has told vendors to assess at an interest rate at least three percentage points above the loan product rate. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: let's get straight to the markets. sophie: stocks are easing earlier gains with banks weighing in. often early 2% after this week -- off nearly 2% after this week. mckay futures bouncing more than 1%. the head of the rbnz decision. the kiwi dollar under pressure here. this as we are seeing interest rates rise ahead of

haidi: we saw the bailouts, the state led bailout's getting very different reactions from moody's. in fact, they came up with completely divergent views. what does that tell you about how even ratings agencies are struggling to be able to view what regulators are doing? >> historically, there is a different methodology. in historically, this is a top-down mythology, the government entity, moody's applied for bottom-up, so you can look at the readings of the final ratings from both agencies are not really that different. regardless of the difference of the actions. the recent developments have confirmed our earlier view that it's important to financial institutions. in the restructurings that resulted in this is highly unlikely. so of course, there remains uncertainty on recapitalization, and the shareholding structural -- going forward. it does not really dilute the ability for the chinese government to support borrowing in times of need. in the recapitalization plan by the chinese soe is that it is a clear and strong signal that they would like to help them firmly and timely. haid

. ♪ haidi: we are getting breaking news when it comes to the mining investmented to grade by moody's with the outlook cap stable. we have had of course some safety issues but positive developments, saying safety certificates have been issued for a number of these minds. we are -- mines. raising them to investment grade with the outlook at stable. the brazilian iron ore giant does continue to see that recovery after shutdowns and disruptions and output due to the coronavirus this year. shery: moody's has downgraded the credit ratings for new york city and the state, warning the pandemic impact is among the most severe in the u.s. cities under pressure as schools reopen and infections rates rise -- infection rates rise in hotspots. michelle cortez, the winter has not even started and we are already seeing the infections worsening. over 1300there are new infections in new york state reported yesterday. that is the highest level since may. new york city is really going to be taking the brunt of this again after getting through it in april after we open schools again. my 5 million kids ar

moody's is wanting exxon mobile -- warning exxon mobil that is credit rating may be lowered. highest rating to the $7 billion offering of senior notes, but stable outlook is under pressure because exxon is outstandin outspending cash . protests ingoing hong kong have prompted china's biggest bank to slash its view of cathay pacific. the wideningrom unrest damages the airlines brand. the bank has a stock price target of six hong kong dollars hay.cat it's totalu says number of daily active users has topped 200 million this month. that figure includes unique mobile devices that have accessed the app at least once a day at the start of july. baidu said it total has reached 188 million. the company reports earnings next week. cost cuts and lower investment may turn profit even as sales growth falls. paul: coming up on the next hour of "daybreak asia," u.s. stocks surge after donald trump takes a step back in his trade war with beijing. ♪ paul: asia's major markets are .bout to open for trade the u.s. goes on china to respect hong kong's autonomy. the city is bracing for more unr

with a look at this for week, we are joined by katrina ell, economist for moody's analytics. let's do this in order. i want to start with the imf world bank spring meetings. a big thing bloomberg has looked at is this diversions the imf talked about -- divergence the imf talked about. looking at yields rising and may be central bank tightening indicated in advanced economies, people are concerned about what it means for emerging economies and markets. >> i think we have to take a step back and recognize we are in a much better position and the global economy -- it's in a better place than at the height of the pandemic this time last year. while there is some divergence of performance, we are still seeing on the whole, the global economy getting back on track and that includes economies across the globe. we will see stronger demand and investment spending up again and that will be good news for all economies. we are particularly seeing this in the asia-pacific where the vaccine rollout is troublesome and inflation is high. other economies like australia are getting back much q

christina it's the senior economist at moody's analytics. we are expecting trade numbers for china to really show cracks in the economy from the lockdowns in shanghai. the port disruptions and all of the other ripple effects we continue to see with these covid restrictions. what is your read on how impacted we could see the numbers going forward and what more policymakers can do? >> that right we are expecting to see a very decent a celebration in china's export growth as a result of these extended and aggressive lockdowns. we are looking at export growth 4% year-over-year. it shows the intense damage the zero covid policy is having on china's economy. it is disrupting ports. it is disrupting manufacturing. it is hurting china's economic recovery because and zoomers and businesses are basically forced back into hibernation in stark contrast to the rest of the world that has really embraced pandemic living, highlighting the economic pain of these policies. what policymakers can do if they stick with the zero covid policy is provide ongoing fi

we will have more analysis ahead with moody's senior vice president on bloomberg markets china open at 9:30 a.m. hong kong time. bloomberg has learned the securities and exchange commission has been taking measures to clamp down on the spac market. what sort of changes can receive -- what sort of changes could we see? >> they put out a statement saying that transaction should be seen -- should be treated as a liability instead of equity in the cap accounting treatments. that impacts all of the deals, because most are issued in a unit, which means a share. the long-term impact is ongoing, it is an ongoing story. the short term is that we are likely going to see some companies sponsor teams having to refile documents and it will slow down the spac market more now that the resources that are refiling. shery: -- haidi: there is a daily of -- deluge of spacs trying to go public, right? >> the pipeline is robust. but the pace has slowed significantly in the past few weeks. that has to do with the sev [speaking foreign language] c -- that has to do with the sec taking an unusually long time t

moody's got ford's credit rating. we will hear more on that is that progresses. now i want to get right to sophie to find out how things are shaping up for asian markets. sophie: early in the session and looks like rick sentiment may be stabilizing. stocks could be heading for a mixed start. bonds under pressure tracking the overnight moves we saw in treasury. kiwi 10 year. we are seeing that move lower with yields moving for basis points. declining steadily even as north korea has more weapons. caution ahead of the fed position next weekend. we have the ecb meeting this thursday as well to consider. checking in on sterling, just holding onto gains near a july high. most of the losses we have seen since boris johnson came to power, and of course brexit headlines very much in focus as johnson is trying to secure an early election. bear in mind today indian markets are closed this tuesday. paul: let's check in with the first word news with jessica summers. sales in china fell for the 14th time in 15 months with deliveries down almost 10% to $1.6 million. manufactur

india's credit rating has been cut to the lowest investment grade by moody's amid a slowing economy and a deteriorating fiscal position. the agency lowered the currency rate with a negative outlook. that comes as investors lose faith in the modi government. india has erased more sinceolder -- any country the start of the second term. popular chinese video app tictoc has apologized after complaints that posts with the #black lives matter and #george floyd were marked with zero views. they say they are being censored. tictoc claims it affected a wide array of posts. videos linked to black lives matter have generated more than 2 billion views. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. share a. to watch continue ongoing unrest across the united states. president trump in the past hour promising a forceful response to violent protests across the country. pres. trump: if a city or state refuses to take the actions that are necessary to defend life an

now from hong us kong is the senior credit investornd moody's service. great to have you with us. we had better than expected results out of i do. -- baidu. is this a credit positive for the company? actually, we do think this set of results is a marginal stabilization from the first quarter results. it was a loss in a long time. although we still do think that 2019 would be a kind of investment year for the company. think thatd, we do the investment that the company is carrying out, whether it is on content or artificial intelligence, ai initiatives, are strategically important, and on the long term, it will hold the company gain more organic user traffic and enhances market position. shery: it is not only about baidu, right? alibaba trying to boost its intelligence in the were tier cities as well. will this eventually pressure the margins of the chinese tech companies? very good question. i think baidu is not alone in seeing this kind of investment need. although large chinese internet companies try to reach and better service the consumers in lower tier cities. what we are seei

analyst atane is an moody's in singapore. if we get another positive reading out of singapore later today, it is going to paint a consistent picture of the slow and steady recovery in this part of the world? --ve: it does look like iced like a slow and steady economic recovery in this part of the world. you see it particularly in export numbers coming out of most of the asia-pacific region, where exports may be down over the year, by much, much smaller numbers than they were even six months ago. instead of down in the mid teens on a year-to-year basis, exports , a down by, 5% year-to-year big improvement. recent data from korea shows exports to china were positive in december. so things are looking better. domestically there is hope we would be easing trade tensions, improvement on sentiment that the worst may be over for that economy, as would be the case as you can imagine. tensions,is that something the f korea will be weighing today, will they stand pat to see how this transmission of public sentiment carries through? ste

our next guest is moody's analytics. is the consensus you are seeing being a little bit to sanguine given that there is a lot we don't know? we don't know whether the lockdown mechanism has been effective. everyday day we are getting more news as the various aspects of affected.y >> that is a concern. we are looking at the impact of the virus so far on china and broader asia. from 6.1% now to a baseline being the expectation china will grow 5.4% this year. a significant downward revision based on the fact consumption services right now are feeling the particular brunt of the containment efforts in particular from the virus. we are also going to see the knock on effects of the flow from disruption to supply chains, manufacturing, exports as well. ripple effect through the economy. the pboc there in the kitchen sink when it comes to flooding liquidity? we know they will keep doing that by lowering various rate mechanisms. of the containment period, you probably see fiscal spending increase, bond issuance, does that create

markets very closely amid fears of contagion giving the bond fallout we have seen for china, which led moody's to place the company on downgrade watch. shery: from our market analysis let's bring in the chief investment strategist at lgt bank asia, joining us live from hong kong. always great having you with us. sophie just mentioned those credit risks spreading across asia, given the volatility we have seen in china, how big of a risk is this? >> largely contained, although the story is still in the early days of development. long-term and short i think systemic risks on the credit side remain very welcoming. haidi: what about credit risks in china, we continue to see the shift coming from beijing, perhaps they are trying to wean off the bond markets from their implicit guarantees. >> that is a very important issue. it is still an individual issue, so investors will be discovering which ones have more strong guarantees, and which have less strong guarantees. in terms of the macro picture, in terms of china, the growth outlook, echoed again by strong e-sports. the micro picture remains very ro

we also saw further downgrade, it lost the final investment grade status, moody's cutting it into junk. things are not looking particularly strong for shimao. whether or not it can raise asset sales like this, they look small in size, and shimao has quite a chunk of onshore dollar debt coming through to the next year. much like the stories of the developers, it's all about the dollar debt. developers had not had access to the primary market to roll over and finances offshore debt, therefore it has been global investors that have felt a lot of the pain when it comes to rising defaults and stress among property firms. david: there we go, resuming trade today. rebecca with one of the things we are tracking today, and of course the loan prime rate is one of them. have a look at this chart. it gives us the set up, where we need to be. china has managed to keep funding rate stable, that is your benchmark and money market rate. the question is, do we see the banking system -- largely remain stable in terms of the five-year, do we get that lower? we will find out in about 25 minutes. coming up

we have about 90 companies reporting and asia today including toyota, which comes after mitsubishi moody's -- mitsubishi motors became the latest japanese carmaker to be hit by falling to man. olympus is in focus after adr's jump to a record high after delivering a profit beat and announcing a new business plan. forecasts were unchanged. output, it is seen driving revenue and growth for the next fears. softbank shares may come under pressure. after the company posted its first profit loss. current pricing suggests a 5% drop in the last time we saw such a decline was back in early june. haidi: we will have lots more on softbank ahead. the senior research analyst joins us in the next hour of "daybreak asia" to break down those numbers. eums, the cofounder of ether joins us to talk about the outlook for crypto. he has great views. the market open is next. this is bloomberg. ♪ here, it all starts with a simple... hello! -hi! how can i help? a data plan for everyone. everyone? everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh. sure, why not? how'd he get out?! a camer

moody sees disruptions stretching into 2022, affects only diminishing in the second half of the year. there's a risk inflation may remain higher for longer in the united states and some emerging-market countries. with the fed meeting in vocus today, we look at u.s. data, analysis from our economics team shows there is an abrupt shift from supply excess precrisis, they are at a 20 year high. the world's largest contract logistics provider says the worst may be over. they are seeing more goods arriving at facilities which means supply chain snags are beginning to subside at least on the logistics front. we want to note this interesting take on the supply chain issue. robin brooks argues that delays are centered in the united states more than elsewhere. he says u.s. supply disruptions are about demand, not supply. he points to this chart of delivery times in different locations and how far they divide than usual. the u.s. delays are at a scale of japan after fukushima in 2011 but little elsewhere. bloomberg terminal users can read more about the stories in our newsletter, supply line. sh

let's bring in the moody's analytics economist joining us from sydney. not just the gdp, which we are expecting a contraction of 6% year on year but also trade them a home prices, domestic activity indicators. i am wondering how much of the bad news has been priced in, because we know the last quarter is going to be terrible? china's economy was knocked off course by the coronavirus. we are expecting gdp will come in with the contraction of 4.6% in march and that follows the 6% expansion in december. it has been a swift deterioration for china's economy. what is important to note is with the march activity data we are expecting later this week, we should see some improvement. we are expecting that february was the brunt of the economic impact for coronavirus on china's economy. we saw a really significant double-digit deterioration across the suite of activity data like industrial production, retail trade. while we are expecting to see contractions again in the month of march, activity data prince, it should be a much smaller contraction across those sui

moody's cut their credit score to junk last month. airlines flying across pacific are on alert after the erosion of a volcano in a russian peninsula. authorities have declared their highest alert as the blast sent smoke and ash more than 10,000 meters into the sky. force themng could to take alternate routes. the same volcano also up did last year. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. coming up, we take a look at diversity in silicon valley and ask why this is one metric where tech has lagged behind the rest of the business world. ellen powell will be with us in just a moment. this is bloomberg. ♪ haidi: intel shares slumped in late trade after a big fall in revenue and a tepid forecast. .1% to $17 billion and the third quarter after the pandemic hurt sales. intel has been the largest -- the largest chipmaker for most of the last 30 years but as others outsource, they kept components in-h

which moody says his credit negative. we are seeing shares fluctuate at the start after a three-day decline. take a look at the mood in sydney. up 0.1%. , buying you 17ar u.s. cents. a 30 day of gains. .> thank you very much let's check in on the first word news spirit >> president trump has lost a legal attempt to free up extra funding for his border call. rulingtained an earlier barring the administration from construction. they had asked for permission to dip into $1 billion from the defense department. the president expected to ask the supreme court to intervene. president trump insisting he has not given up his campaign to add a citizenship in the census form. he tweeted any news of the commerce department abandoning the question is fake and insisted the administration is assessing all options. it may seek new guidance from the supreme court. ran morning europe it must do more to protect the 2015 nuclear deal. tonium enrichment will move the next level on sunday. comments raise pressure on european nations who backed

moody's last week cut its credit rating and put it on watch for potential further downgrade, but fitch revised the ratings watch to positive from negative, citing the extraordinary support from state backed companies. kathleen: how long will the state backed companies be patient and/or have the chinese authority behind the scene saying we can't put out support publicly but you can, so please keep doing it? is there a place where the rubber meets the road? stephen: there wasn't a lot of details on the rescue package and plan forward, other than huarong saying it will be disposing in the near future of non-core subsidiaries. did not give a lot of details on the ins and outs of the rescue package and what will happen when the other company takes control. but because of the bailout and disposal of asset sales, they can have an insurance that operations can continue for at least 12 months. that's the only guidance they are giving, they will be a going concern for at least 12 months. however, the chairman in a statement did say we have learned a very harsh lesson. haidi: stephen engle in hon

over moody's, they have changed their outlook for the metals and mining industry from positive, saying the pace will fade out beyond 2020 two. privacy iron ore falling to the $70 to $80 range. pulling up a chart, the consensus is the bok will continue the hawkish tilt. the meeting minutes we got this week. the recovery has been holding up. there basically is a rate hike for 1% in november, with an earlier move due to upside pressure on inflation. one bok member noting cpi may stay above target longer than expected in south korea. shery: let's talk about the inflation concerns in the u.s.. a slowdown in consumer price names. we are assuring investors the fed has waited to announce that they preplan that left many concerned. many think it remains too high. kathleen hays is here with a recap. let's get started with what was in the report that supported the transitory count. kathleen: look at the latest numbers we got. the concern is transitory, if it persists, a little relief. especially if you look at the monthly changes. you can see the latest monthly increase for august of 0.3%. lower

moody's has cut its sovereign credit rating to negative outlook citing weaker ability to fight policy because of uncertainty over brexit. this comes at the start of an election campaign and agency notes increasing inertia and paralysis in parliament. the leading political parties are fighting for votes, promising higher government spending. a state of emergency in the australian state of new south wales where brushfire risk has reached catastrophic levels. three people were killed and 150 homes destroyed over the weekend as fires burned through areas rendered exceptionally dry after drought.r cooler weather eased intermediate pressure but this is expected to worsen as the weather turned strike. -- drier. now the powerful cyclone that hit bangladesh and northeastern india. it has killed 14 people. hundreds of thousands have been moved to safety. the same wind dashed sustained winds up to 120 kilometers per hour and will drive a sea surge up to incredible levels. decideysia a court will later monday if the prosecution has made its case against former in the one mdb scandal. he denies wr

as opposed predicted that moody's already will retain power in this crucial state. all of this after the latest round of voting ended on monday. the victory margin is expected to be tighter than five years ago. severe flooding has returned to australia for the second time in a week. evacuation orders are in place for 13 suburbs in sydney. they are expected to top $1.3 million. global news, 24 hours a day on air and bloomberg quicktake. i am vonnie quinn, this is bloomberg. >> we are seeing u.s. futures down .3%. this is after the s&p 500 lost about 3% in the new york session. we have the dow losing almost 800 points. this has turned negative for the first time since september of 2020. this is a potential game changer. morgan stanley saying we are firmly in the grasp of a bear market. still ahead, the demand for ev's has shown a surge in prices for rare earth minerals. more on the impact of russia's work in ukraine and have that might affect supply. many russians and ukrainians are moving their assets into cryptocurrencies. we find out more from the market ceeo just

haidi: moody's analytics senior economist joining us from sydney. next, ubs and deutsche bank have a new leader to look at what lies ahead. this is bloomberg. >> the latest business headlines. aramco will look for investment opportunities in india days after reliance scrap plans for deals with the energy giant. aramco says it will keep looking for potential investments in india with reliant. planning to roll out test rides of its electric two wheeler to more than 1000 electric that indian cities and towns. the softbank company receive 1000 orders a few months ago. deliveries have been delayed. test runs will only open to those who have reserved suitors. the latest ghost busters reboot topped the north american box office. taking in $44 million in opening weekend higher than sony's own production of 41 weekend. shery: two of europe's banking giants have picked new chairman's. why is there this shuffle at the top now? >> axel weber at ubs and at deutsche bank are said to step down. the chief executive are -- officers at both banks are expected to prov

moody's investors service shifting their outlook to negative. how big of a blow is this for mexico's fiscal position? i think this recent announcement on potential tariff s certainly was a surprise, and comes at a bad time for mexico, in that growth has been downgraded from 2% earlier in the year to now 1.3%. i think it gives mexico less space on the physical side. they will have to continue to cut, which is a challenge. on monetary policy, with inflation expected to emerge in the target zone toward the end of the year, and the fed on hold and possibly cutting, it does give the central banks some room to possibly ease, to smooth out these challenges. the broader issue -- denise: i think the good news -- shery: go on. denise: i was going to say, i think the reaction from the mexican president has been very conciliatory. he understands the immigration issues, and as we have seen, he wants to negotiate. it is not clear that these tariffs as been discussed on the program will go into effect. clearly if they do, it is a serious issue for both mexico

moody's pointing to borrower stress, going to push higher. olivia: i have been quite surprised. when the pandemic hit, i was pricing myself. majorityuite a large of that is e-commerce businesses which is online focused, our portfolio has been remarkably resilient and we have been super lucky. it has been really nice to see. very proud of my clients who have been able to adapt and change to the needs and demands of the pandemic. sector of thene huge economy and e-commerce online sector. loan repayments is a real struggle. hospitality, for example. it differs depending on which data you are talking about. we primarily work with e-commerce businesses, so we have been seeing amazing results in that sector. how are the businesses you are engaging with dealing with shifts in consumer behavior? nowger consumers have a buy pay later attitude. what's the sentiment towards banks in the wake of the world commission? they are to attend a perimeter hearing. olivia: yes -- parliamentary hearing. olivia: back when bromleigh first started, that is when the royal commission first kick started br

moody's has put the company's a three rating to negative, given delays in making its profit union -- auto unions profitable. the nikkei news reports the department store's operator is in to cut by ¥10 million fiscal 2020. a share buyback reportedly being considered. a-shares,eck on a end slipping after the two notches to underperform with the industry seen entering a two-year earnings down cycle. paul: it is not an easy time to be stockpicking in china's market. at its lowest in three months. the hang seng on track for its worst month in three years. let's get some insight from our next guest, who started this china focused hedge fund last year. joining us from hong kong is chris wong. thanks for joining us. this might seem rather counterintuitive, but you like chinese tech. can you explain that? chris: it is a very interesting and exciting time in the chinese market. over the last two years, it seems to be the norm, whether it is a financial crisis, you have the chinese economy with the anticorruption, you name it. this is the time that is very exciting. what is happening globally

we are tracking australian bank trading, tracking higher after moody's downgraded the outlook of the sector to negative. citigroup expects westpac likely to cut the first half payout by 10% to 18% after a dividend clampdown. we are also hearing reports these banks are really cutting back when it comes to fees charged to consumers and loan holders. coming up, more on the coronavirus including the long-term effects of a pandemic. we are talking decades, not just years and months, according to the san francisco fed chair who is with us next. taylor: plus, why a nobel economys is a v-shaped recoveries unlikely. this is bloomberg. ♪ ♪ investors are watching indicators to see how deep the covid-19 pandemic has affected the global economy, at least in the short term. over the longer term, the effects of the pandemic can last as much as 40 years, according to a new research paper from economists at the san francisco fed and university of california davis. joining us is the lead author on the paper, oscar jorda, senior policy advisor at the san francisco fed. professor, great to have you