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Speaker 1: This is Bloomberg Daybreak Asia, but is Tuesday February seven

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Speaker 1: in Hong Kong, Monday February six in New York and

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Speaker 1: coming up today. Markets are anxious over fed policy ahead

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Speaker 1: of Chair J. Powell's interview on Tuesday. The USA is

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Speaker 1: said to be planning a two tariff on Russian aluminum

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Speaker 1: as soon as this week, and the founders of a

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Speaker 1: Donni group are pre paying about one point one billion

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Speaker 1: dollars worth of loans to calm jittery markets. Recovery efforts

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Speaker 1: underway for the China balloon platforms could turn out to

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Speaker 1: be an embarrassing blunder for China. The US has three

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Speaker 1: prior US incursions. Edding back to Trump, Biden looks for

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Speaker 1: billionaire tacks in State of the Union. I'm at Baxter

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Speaker 1: with Global News. Manchester City in trouble after being charged

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Speaker 1: by the Premier League for breaking rules. Dan schwartzmen, I'll

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Speaker 1: have that story more coming up in Bloomberg Sports. That's

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Speaker 1: all straight ahead on Bloomberg Daybreak Asia on Bloomberg eleven

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Speaker 1: and three O, New York, Bloomberg, Washington, d C, bloom

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Speaker 1: one six one Boston, Bloomberg nine six, San Francisco, Sirius

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Speaker 1: x M one nineteen and around the world on Bloomberg

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Speaker 1: Radio dot com and via the Bloomberg Business App. Good morning,

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Speaker 1: I'm Chrisoner and I'm Brian Curtis. Here are the stories

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Speaker 1: we're following today. We have a slate of FED speakers

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Speaker 1: this week, and that includes an eagerly awaited interview tomorrow

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Speaker 1: with FED Chair j Powell. Bloomberg's Michael McKee has a

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Speaker 1: preview going into Friday's jobs report. The narrative was the

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Speaker 1: FED chair hadn't pushed back hard enough on markets pricing

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Speaker 1: rate cuts Later this year, the payroll report may have

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Speaker 1: done that for him. If job growth is strong and

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Speaker 1: hours worked our rising, that's a lot more money in

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Speaker 1: consumers pockets available to spend, and at least according to

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Speaker 1: the FEDS Phillips curve model, that means inflation will be stickier.

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Speaker 1: Paul gets another chance to make that point when he

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Speaker 1: sits down with David Rubinstein, host of Bloomberg TV's Peer

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Speaker 1: to Peer and David Rubinstein shows at the Washington Economic Club,

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Speaker 1: expecting to say the Fed will stay the course, raising

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Speaker 1: rates one or two more times and holding them throughout

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Speaker 1: the year. Michael McKee, Bloomberg, Gaybreak Asia. We are told

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Speaker 1: the US is preparing to slap a two cent taraf

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Speaker 1: on Russian made aluminum as soon as this week. Now.

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Speaker 1: The aim here is to apply more pressure on Moscow

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Speaker 1: as the one year anniversary approaches for the war in Ukraine.

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Speaker 1: Here is Bloomberg's and Marie Hordern. Traditionally with the US,

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Speaker 1: imports from Russia is about ten percent of total imports,

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Speaker 1: so this would effectively mean that it is banned. No

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Speaker 1: one is going to be wanting to pay that price.

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Speaker 1: This on the administration has been deliberating for months. If

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Speaker 1: you remember, this was likely a hard decision for this

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Speaker 1: administration because in when the Trump administration had sanctioned Olegara Pasca,

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Speaker 1: he is the leader of main majority shareholder of any Plus,

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Speaker 1: which is a huge steak in Roussal, the market went

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Speaker 1: bananas and they probably wanted to avoid that. Maybe now

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Speaker 1: they see is a time they can potentially get past

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Speaker 1: that chaos. Bloomberg's and Marine Hordern. There By the way,

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Speaker 1: President Biden has yet to give the official go ahead

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Speaker 1: on this proposed tariff. We are told there have been

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Speaker 1: some concerns within the administration about collateral damage on American industries,

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Speaker 1: think aerospace and automobiles. Bryan Renault and Nissan are finally

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Speaker 1: done reshaping their complex relationship. Following almost a year of discussions,

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Speaker 1: the partners presented a deal in London. Renault will cut

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Speaker 1: its stake in Nissan from forty three to fifteen percent.

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Speaker 1: That's the same level as Nissan share in Renault. Is

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Speaker 1: correct what has been a source of friction between the

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Speaker 1: two automakers. Reno CEO Luke at Mayo said that the

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Speaker 1: partners will also collaborate on several big projects. He said

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Speaker 1: they could generate hundreds of millions of euros in value

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Speaker 1: for the companies over time. Here's Tomayo speaking earlier on Bloomberg.

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Speaker 1: What we have announced today in terms of business project

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Speaker 1: and opportunity, it's much bigger than what we've ever done,

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Speaker 1: at least in the last ten years from a few

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Speaker 1: business value pication funding and that's the most important thing.

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Speaker 1: As part of the pact, Nissan also intends to invest

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Speaker 1: in Renault's electric vehicle business umpair. The state could be

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Speaker 1: as much as fifteen percent. There's still scope, though likely limited,

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Speaker 1: for more flare ups between the automakers until the end

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Speaker 1: of the year. That's when the deal is scheduled to close.

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Speaker 1: In India, the Addanni family has pre paid about one

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Speaker 1: point one billion dollars in debt backed by shares. We

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Speaker 1: have that from Bloomberg's Annabel Drulers. The Adorni group is

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Speaker 1: trying to restore confidence in the conglomerate's financial health. The

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Speaker 1: early payment of the loans will help release millions of shares.

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Speaker 1: Even so, six of the group's ten stocks ended lower

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Speaker 1: in Mumbai, a Danney transmission and a Downey Total Gas

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Speaker 1: lad The losses about one hundred and seventeen billion dollars

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Speaker 1: has already been wiped out after the Hindenburg Research made

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Speaker 1: fraud allegations against the group. India's main opposition party stage

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Speaker 1: protests Monday to highlight the risk to millions of small investors.

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Speaker 1: In Hong Kong. I'm Annabel Rulers at Bloombol Daybreak Asia.

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Speaker 1: Annabel thank que back. In the US, Dell Technologies is

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Speaker 1: eliminating sixty fifty roles. The reduction amounts to about five

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Speaker 1: percent of Dell's global workforce. The company said is experiencing

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Speaker 1: market conditions that continue to erode with an uncertain future

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Speaker 1: we heard earlier from Bloomberg's at Ludlow head count Dell

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Speaker 1: PETE to the beginning of twenty twenty, it's kind of

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Speaker 1: been trickling lower anyway. There's two reads on this right

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Speaker 1: The one is the timing. We're still early in the

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Speaker 1: year February, and so some reaction from the Cell side

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Speaker 1: is that this is indicative that the recovery in the

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Speaker 1: PCM market may come later than we expected, as has

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Speaker 1: been the case throughout this period. Many investors and Cell

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Speaker 1: siders are cheering basically the cost discipline and saying this

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Speaker 1: is going to be good for opex going forward. After

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Speaker 1: the reduction, the head count for Dell will be its

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Speaker 1: lowest in about six years. And Dell said that along

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Speaker 1: with these reorganizations and job reductions that it's all being

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Speaker 1: viewed as an opportunity to drive efficiency going forward. The

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Speaker 1: stock actually traded down today, Doug about three. Well, I

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Speaker 1: wanted to ask you a little bit more about Raphael

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Speaker 1: bostick Uh. To me, it seems like he's suggesting that

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Speaker 1: with growth you get inflation full stop. It doesn't have

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Speaker 1: to be that way. You're right about that. Nonetheless, what

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Speaker 1: the market is pricing right now in terms of FED

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Speaker 1: fund futures twenty five basis points in March probability that

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Speaker 1: will get another twenty five in May. And now the

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Speaker 1: market is looking at June and the possibility of a

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Speaker 1: right hike at that meeting. The probability is now up

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Speaker 1: from just eight percent last Monday all the way up

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Speaker 1: to twenty eight percent. So the market is a little

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Speaker 1: concerned here that with signs of strength even without employment data,

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Speaker 1: we should put that aside for a moment. The I

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Speaker 1: s M Services Index last Friday was also way above forecasts.

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Speaker 1: So there are signs of strength in the American economy

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Speaker 1: and I think the FED has to be on high

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Speaker 1: alert for that. But you'll remember the previous services report

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Speaker 1: was actually quite weak, and so we don't know. I

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Speaker 1: don't know whether or not we're going to look at

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Speaker 1: at this this one set of reports and say, oh boy,

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Speaker 1: central banks are now nowhere near the end of their

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Speaker 1: tightening cycles. Anyway, as mentioned, we can get into that

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Speaker 1: in a little bit greater detail with our guest, it's

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Speaker 1: time for global news. The recovery efforts to find the

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Speaker 1: wreckage from the China balloon are fully underway, and back

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Speaker 1: to with the story and the rest of the global

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Speaker 1: news and the Mine sixty news from ed Yeah, exactly right, Brian,

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Speaker 1: This is off Myrtle Beach, South Carolina. General Glen of

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Speaker 1: herk It says the commander of Nora's as the conditions

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Speaker 1: are are very challenging a effort that's in the open ocean,

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Speaker 1: ongoing and approximately fifty feet of water, and so we

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Speaker 1: have to be very cognizant of the c states, currents, etcetera.

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Speaker 1: So we continue to move forward. But he says they

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Speaker 1: expect the information of a very valuable how this flight

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Speaker 1: may turn out to be very embarrassed sing for China

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Speaker 1: and the twenty one century, more sophisticated countries use satellites

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Speaker 1: and other methods to spy. Gary Locke, former US Ambassador

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Speaker 1: to China, says it is still a mystery at this

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Speaker 1: time and space why it chose to fly any kind

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Speaker 1: of balloon over the US, why it veered so far

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Speaker 1: into the heartland of the United States. Perhaps the Chinese

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Speaker 1: did not intend it, Presidents, she did not know about

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Speaker 1: it until it was too late, and then who knows

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Speaker 1: what the decision making process was within the political structure

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Speaker 1: of China at that point. Now Lock on Bloomberg's Balance

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Speaker 1: of Power, says China flies balloons all over the globe

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Speaker 1: looking for information. He says they did during the Trump

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Speaker 1: administration along the coast and sometimes of preaching land. He says,

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Speaker 1: at this point, it is a shame. We have so

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Speaker 1: many areas in which China and the United States must

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Speaker 1: work together, such as stopping North Korea from developing a

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Speaker 1: nuclear weapon. So I think this was a huge blunder

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Speaker 1: by the Chinese and there may be some repercussions that

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Speaker 1: will that will follow. Yeah, and Locke says, as a

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Speaker 1: former US governor, the US did not want to shoot

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Speaker 1: down the payload, which was bigger than two large buses

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Speaker 1: over land, for fear of injury to people on the ground.

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Speaker 1: And the White House is now saying three prior missions

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Speaker 1: dating back to the Trump administration where they traveled near

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Speaker 1: sensitive US military facilities and training areas, including over Texas, Florida, Hawaii, Virginia,

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Speaker 1: and California, uh some overprized aircraft carriers. So as a

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Speaker 1: Biden administration prepares for the State of the Union tomorrow,

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Speaker 1: it is more than likely rewriting parts regarding foreign policy

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Speaker 1: towards China. Republicans are continuing to claim that the Biden

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Speaker 1: administration is soft on China, Bloomberg Jenie Schanzano on Balance

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Speaker 1: of Power says that's just not true. For people who

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Speaker 1: have watched for a long time, there is very little

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Speaker 1: sunlight between the Trump administ administration's approach to China and

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Speaker 1: the Biden administration's approach. If anything, he can be accused

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Speaker 1: of the opposite. This is a man who four times

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Speaker 1: as president said the United States military would defend Taiwa

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Speaker 1: On if there was a military invasion. That's something that

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Speaker 1: previous presidents have not said. Republicans continue to contend the

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Speaker 1: balloons should have been shot down before it flew over

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Speaker 1: the continental United States. Also during the State of the Union,

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Speaker 1: President Biden is expected now to reinforce his position on

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Speaker 1: dismantling the economic trickle down theory or theory I should

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Speaker 1: say Bloomberg's Romain bostic. So it would be a quadrupling

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Speaker 1: of the current surcharge on corporate stock buy backs. Also

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Speaker 1: on this fact sheet is what Biden is calling for

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Speaker 1: a billionaire minimum tax. Now we don't know I have

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Speaker 1: a lot of details here about exactly how this would

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Speaker 1: be structured. So again these are proposals in the State

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Speaker 1: of the Union. Billionaire tacks pops up every few years,

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Speaker 1: it disappears, and should mention that we will have full

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Speaker 1: coverage of the State of the Union tomorrow all our

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Speaker 1: platforms beginning at eight thirty Wall Street Time Global News,

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Speaker 1: powered by more than undred journalists and analysts and over

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Speaker 1: one twenty countries. In San Francisco, I'mad Baxter, and this

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Speaker 1: is Bloomberg. This is Lmberg Daybreak g Asia. I'm Brian

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Speaker 1: Curtis in on cong along with Rashad Salama, and our

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Speaker 1: guest is Nicole Webb, Senior vice president Financial advisor at

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Speaker 1: Wealth Enhancement Group. Nicole we should mention Raphael Bostick made

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Speaker 1: those comments today. He's not a voter this year, but

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Speaker 1: he seems to be equating growth with inflation. Is it

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Speaker 1: Polly anna ish in your view to suggest that we

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Speaker 1: could have growth and jobs and still have inflation ticking

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Speaker 1: lower as it is doing at the moment. Mm hmm.

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Speaker 1: It's such as such a trying you're trying to say yes, yes,

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Speaker 1: it's probably really I really am. I just you know,

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Speaker 1: you've got to stumble on your words sometimes when there's

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Speaker 1: so much data to sort through But you know, after

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Speaker 1: Friday's jobs report, you know, the one thing that I

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Speaker 1: would say we've called into question more than anything else

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Speaker 1: today is the story around um wage disinflation and how

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Speaker 1: un likely it seems if you're getting jobs gains like

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Speaker 1: the ones that you saw on Friday. And so I

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Speaker 1: think that's where the narrative swings back to will are

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Speaker 1: we in a moment of growth? And is this the

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Speaker 1: beginning of a sticky bull market where the consumer is

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Speaker 1: the consumer and industry really are sticky enough that that

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Speaker 1: we dodged what we believed was an imminent global recession

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Speaker 1: and the one that got priced into the markets in

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Speaker 1: um And I think there's a lot of rolling over

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Speaker 1: of data and a lot of FED movement to come

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Speaker 1: to illustrate to us what the real outcome of this is. Okay,

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Speaker 1: I mean, we go back to inflation. That seems to

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Speaker 1: be the only concern right now. But you would have

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Speaker 1: thought that with the amount of extra tightening that's gone

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Speaker 1: on in a monetary policy sense, we would have seen

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Speaker 1: lending going down. If you look at total loans and

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Speaker 1: leases of US commercial banks, historically strong pace twelve percent

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Speaker 1: up on the year, and if you look at commercially

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Speaker 1: industrial learning it was even stronger up on the end

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Speaker 1: of these dumbers don't indicate a slow down m no.

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Speaker 1: And I think this is where where we go back

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Speaker 1: to the impact of stimulus, the impact of easy policy,

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Speaker 1: the impact of doubling the money supply during COVID, and

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Speaker 1: and seeing that there is a systemic impact where that

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Speaker 1: money has to make its way through the economic system.

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Speaker 1: And there's certain elements to this that the type policy

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Speaker 1: restrictive policy simply can't fix or regulate on its own,

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Speaker 1: and that's the stickiness we're seeing. Well, yes, but we

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Speaker 1: do see inflation easing, and even with all that risk

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Speaker 1: said about own growth, it could be that the drop

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Speaker 1: in M two and the QT behind the scenes, along

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Speaker 1: with the higher interest rates are working at inflation, but

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Speaker 1: they're not killing growth absolutely. And you know, the our

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Speaker 1: outlook headed into three and so QUE four last year

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Speaker 1: was was an expectation that for that that we would

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Speaker 1: see disinflation surprise, meaning we would see an early regulation

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Speaker 1: of UM, some price stability work through the market, UM

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Speaker 1: predominantly in the good sector. As we're seeing where we believe,

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Speaker 1: you know, the FED has a choice to make and

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Speaker 1: a pivotal choice that comes back to what you're saying,

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Speaker 1: um is do they force the hand, do they raise

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Speaker 1: rates higher? Do they take this terminal rate north of

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Speaker 1: you know, five and a core or and how long

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Speaker 1: do they hold there? If they hold on to this,

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Speaker 1: this demand destruction necessary to bring you know, services inflation

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Speaker 1: down for fear of you know, inflation rearing its head again.

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Speaker 1: This is Bloomberg Daybreak Asia, your morning brief on the

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