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Speaker 1: This is Bloomberg Daybreak Asia, but it's Thursday January in

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Speaker 1: Hong Kong, Wednesday January in New York and coming up

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Speaker 1: this hour, Tesla is seeking to boost output quickly after

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Speaker 1: the ev maker reported better than expected profits last quarter.

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Speaker 1: FED Vice chair Leal Brainerd appears to be a top

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Speaker 1: contender to head President Biden's Economic Council, and a SML

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Speaker 1: says limiting China's access to certain technologies will have unintended consequences.

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Speaker 1: US and Germany announced the sending of heavy tanks to Ukraine.

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Speaker 1: Russia says the West is escalating the war. China says

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Speaker 1: it sees a major decline in severe COVID cases. I'm

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Speaker 1: at Baxter with Global News. Novak Djokovic moves on to

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Speaker 1: the semis of the Australian Open in dominating fashion. I'm

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Speaker 1: Dan schwartz Been. I'll have that story more coming up

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Speaker 1: in Bloomberg Sports. That's all straight ahead on Bloomberg Daybreak

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Speaker 1: Asia on Bloomberg eleven three on York, Bloomberg on Washington,

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Speaker 1: d C, Bloomberg one six one, Boston, Bloomberg nine sixties,

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Speaker 1: San Francisco, Sirius XM one nineteen and around the world

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Speaker 1: on Bloomberg Radio dot com and via the Bloomberg Business app.

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Speaker 1: Good morning, I'm Dead Prisoner and I'm Brian Curtis. Here

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Speaker 1: are the stories we're following today. We do have earnings

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Speaker 1: to get right to hear. Tesla reporting better than expected

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Speaker 1: profits in the latest quarter. It signaled strength to a

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Speaker 1: degree as the company faces growing questions about car buyer

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Speaker 1: demand for it's all electric vehicle lineup. Let's get details

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Speaker 1: from Bloomberg's Charlie Pellett. The Austin, Texas based company reported

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Speaker 1: adjusted earnings per share of a dollar nineteen, beating the

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Speaker 1: dollar twelve share average of analysts estimates compiled by Bloomberg.

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Speaker 1: The ev market leader says it will increase output quote

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Speaker 1: as quickly as possible, in line with previous guidance for

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Speaker 1: average annual growth of fifty sent over multiple years. It

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Speaker 1: also says it is on track to deliver about one

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Speaker 1: point eight million vehicles this year in New York. Charlie

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Speaker 1: Pellott Bloomberg Daybreak Asia. Well, thank you, Charlie. Now, A

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Speaker 1: key question going forward is whether there's some downside risk

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Speaker 1: for corporate earnings. In three the c IO of New Vein,

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Speaker 1: Sarah Malic says, the answer is yes, and for that

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Speaker 1: reason she's making the case for fixed income. Just looking

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Speaker 1: at rate heights going forward about fifty more basis points

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Speaker 1: expected from the FAT, So that's starting to move behind it.

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Speaker 1: You can start to increase some of your duration and

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Speaker 1: fixed income and get strong total returns in it without

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Speaker 1: a lot of these heavy macro risks that are going

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Speaker 1: to hit equity. So earns risk in some of these

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Speaker 1: other areas that ensumer slow down and that impact on

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Speaker 1: revenue growth and all of that with equities considering their

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Speaker 1: valuations is less attractive. That is Sarah Malic there from

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Speaker 1: New ven By the way, Bloomberg Intelligence has fourth quarter

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Speaker 1: earnings for the tech firms within the S and P

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Speaker 1: five hundred are projected to have fallen nine from last year.

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Speaker 1: Here's the thing. Just three months ago those profits were

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Speaker 1: expected to be flat. Well, shares in Adani Group companies fell.

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Speaker 1: That's after the US investor Hindenburg Research said it was

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Speaker 1: shorting the conglomerate stocks. It accused firms owned by Asia's

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Speaker 1: richest man Gatamadanni of brazen market manipulation and accounting fraud.

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Speaker 1: Adani Group CFO Jushinder Singh later rejected the claims. What

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Speaker 1: they report is suggesting that Adana Group companies have created

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Speaker 1: shell companies and Yui Caribbean Islands and Maulitias which is

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Speaker 1: leading to a tax theft, corruption and money laundering. However,

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Speaker 1: that Adani Group CFO has countered, then he has he

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Speaker 1: has denied all this allegation and he had said also

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Speaker 1: criticized the timing of this landing of this report because

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Speaker 1: Janu Day, the flagship company of Adani Group, Dania Enterprises,

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Speaker 1: is launching is fullow on offer which is going to

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Speaker 1: be the largest fullow on offer in India. Adani Group

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Speaker 1: financial officer jusiend Singh. Bloomberg data, by the way, shows

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Speaker 1: the market value of ten Donnie owned stocks was eroded

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Speaker 1: by about twelve billion dollars in Wednesday's trading. Well. The

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Speaker 1: Dutch chip making equipment company A s m L says

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Speaker 1: limiting China's access to certain technologies will have unintended consequences.

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Speaker 1: We have more from Bloomberg's Annabel Jewelers. The Biden administration

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Speaker 1: is leading an effort to curb exports of chip manufacturing

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Speaker 1: equipment to China. The Netherlands and Japan are expected to

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Speaker 1: join in, but a s mL CEO Peter Venick says

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Speaker 1: the measures could eventually push Beijing to create its own technology.

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Speaker 1: Simply put, he says, if China cannot get access to

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Speaker 1: those machines, the country will create their own. Even so,

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Speaker 1: Vennick admits the complex supply chain, combined with the knowhow

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Speaker 1: required to recreate advanced chipmaking technology will be a massive challenge.

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Speaker 1: Vennick is also critical of export control for other reasons.

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Speaker 1: He says chip availability could be reduced and limiting access

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Speaker 1: means a less efficient infrastructure and cost will very likely

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Speaker 1: go up. In Hong Kong, I'm Annabel Ruler's bloom blow

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Speaker 1: daybreak Asia. Meantime, in Europe, Germany's business outlook brightened further.

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Speaker 1: A gauge of expectations by the EFO Institute rose to

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Speaker 1: eighty six point four in January from the three point

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Speaker 1: to the previous month. We heard from EFO President Clemen's

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Speaker 1: Foist companies are telling us they are optimistic regarding the

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Speaker 1: next six months and that suggests overall we will avoid

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Speaker 1: a technical recession with most important risk for the German

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Speaker 1: economy was a gas rationing scenario, so that risk is

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Speaker 1: off the table. Now due to the mild weather, I

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Speaker 1: guess a storage is full. Foist also said that he

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Speaker 1: expects a shrinking economy in the first quarter, but that

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Speaker 1: will be followed by an improvement towards the summer. Well

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Speaker 1: back here in the States, we are hearing that FED

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Speaker 1: Vice Chair Leo Brainerd is now a top contender to

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Speaker 1: become the head of the National Economic Council. The role

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Speaker 1: within the White House will be vacated by Brian Deese

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Speaker 1: at an undetermined time. Here's Bloomberg's and Marie Hordern. We

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Speaker 1: should no decisions have been made, and there are another

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Speaker 1: names that have been thrown around, like Gene Sperling, like

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Speaker 1: Wally Adamo. But right now what you potentially could see

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Speaker 1: in the coming weeks is that the FEDS number two

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Speaker 1: becomes the number one economic voice in the West Wing.

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Speaker 1: This is on top of a little bit of a

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Speaker 1: shake up at the White House, which is pretty much

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Speaker 1: natural when you have after a metrom election and two

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Speaker 1: years of an administration that is Bloomberg's and Marie hoor Dern.

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Speaker 1: By the way, if Brainerd is appointed, that would open

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Speaker 1: a slot on the FED seven member board. Now President

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Speaker 1: Biden would then need to find a successor who could

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Speaker 1: win the full backing of the U S. Senate Brian.

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Speaker 1: We are a week away from the next FED decision.

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Speaker 1: But if you're talking central banks, I think it was

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Speaker 1: the BOC moving markets today. Yeah, that was very interesting

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Speaker 1: because all along it has been out in front and

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Speaker 1: this would be the first pause by the G seven

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Speaker 1: central banks, and it has led the FEDS, so it

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Speaker 1: may send a strong message. All right, let's update Global

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Speaker 1: News next here on day break. Asia Ukraine will soon

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Speaker 1: be some of the heavy artillery and tanks it's been

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Speaker 1: seeking for months. Ad Baxter with more from the Bloomberg

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Speaker 1: News room at San Francisco, Eddie, Yeah, exactly right, Douglas.

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Speaker 1: This comes as a U S and Germany broker a

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Speaker 1: deal to include tanks from a number of NATO countries.

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Speaker 1: German Chancellor all Off Schultz. Our goal is to quickly

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Speaker 1: provide two tank battalions together with our allies. There are

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Speaker 1: many countries that would like to supply, and we will

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Speaker 1: coordinate that and involve them to make that happen steps

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Speaker 1: by step. Yeah. So with that, U S. President Joe Biden,

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Speaker 1: today I'm announcing that the United States will be sending

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Speaker 1: Abram tanks to Ukraine. Yeah, and along with ukraining Ukrainian

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Speaker 1: forces and the use of them, he says. Biden says

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Speaker 1: it also sends a strong message at the US and

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Speaker 1: NATO are united in their full support of Ukraine's ability

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Speaker 1: to defend itself and conduct counter offensives. The expectation of

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Speaker 1: the part of Russia's we're going to break up, We're

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Speaker 1: not going to stay united. But we are fully, thorough

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Speaker 1: totally united, yeah, he says, as is the globe now

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Speaker 1: against Russia. Biden did stress that these weapons are not

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Speaker 1: to be used in launching first strike, but in defense

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Speaker 1: and counter attack. So what does this change, Well, Rose

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Speaker 1: gotten Muller, who is a former NATO Deputy Secretary General

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Speaker 1: now a professor at Stanford, I think it will make

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Speaker 1: a difference because these are the most capable battle tanks

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Speaker 1: in the world today. The Leopards are well known for

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Speaker 1: being reliable, for being capable, and I think the fact

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Speaker 1: that they are deployed across the European NATO allies and

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Speaker 1: also NATO partners such as Finland who have offered up tanks.

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Speaker 1: She says. Expectations are that Russia will launch major offenses

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Speaker 1: in the coming months and Godly says she feels it

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Speaker 1: will make NATO stronger. This agreement, delivery of tanks will

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Speaker 1: take those months the training begins. Now Russia, well, Russia's

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Speaker 1: decrying the decision, saying this is proof that in fact,

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Speaker 1: the West is escalating the war, and Russian activist hackers

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Speaker 1: have not German website offline in response to the decision.

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Speaker 1: Germany's b s I cyber agency says the digital blitz

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Speaker 1: has had a little tangible effect. China says a number

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Speaker 1: of COVID related deaths and severe cases and hospitals have

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Speaker 1: declined by more than seventy percent from peak levels in January.

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Speaker 1: It says daily fatalities in hospitals a slid to eight

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Speaker 1: hundred nineties six as of Monday Monday, down from over

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Speaker 1: hundred January four um. Now, China's numbers have been questioned

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Speaker 1: by the World Health Organization, which would like to see

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Speaker 1: more data. And the meta platforms are going to end

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Speaker 1: Donald Trump's suspension. Facebook says it will have it back

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Speaker 1: up in the coming weeks. In San Francisco, I'm Ad Baxter,

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Speaker 1: this is Bloomberg. This is Bloomberg, Gaybreak Asia. I'm Brian

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Speaker 1: Curtis along with Rishad Salama. Let's get to our guest,

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Speaker 1: Sylvia Jablonsky, co founder, CEO and c i O at

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Speaker 1: defiance E t F S. Well, Sylvia, we seem to

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Speaker 1: be in a kind of muted reaction phase. So we

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Speaker 1: thought maybe Microsoft's guidance yesterday, the week of guidance, would

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Speaker 1: lead to a sell off today, but didn't happen. Really,

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Speaker 1: Microsoft was down about six tenths of one per cent.

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Speaker 1: Is this because to a certain degree, with the huge

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Speaker 1: losses we saw last year, Microsoft down some so Tesla

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Speaker 1: down two thirds that a lot of this is in

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Speaker 1: the price. Yeah, good evening. I think you make a

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Speaker 1: great point there. You know, we we had a nice

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Speaker 1: start to the year, particularly with the NAS dock up

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Speaker 1: and looking to recover on some of those tech stocks

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Speaker 1: that were just hammered last year to the tune of

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Speaker 1: twenty or more. UM. And I think, you know, the

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Speaker 1: Microsoft news addition, initially you saw stocks really selling off.

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Speaker 1: You saw, you know, futures pointed sort of grossly low,

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Speaker 1: and the morning was a little bit rough with us.

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Speaker 1: And so I think that ignited concerns that the market

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Speaker 1: generals were struggling. UM. As you know, rates have been

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Speaker 1: rising and refreshing. Rest and fears are growing. But I

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Speaker 1: do think that investors who are interested in tech for

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Speaker 1: the long term perhaps came off the sidelines a little

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Speaker 1: bit and thought, you know, while the outlook is sort

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Speaker 1: of bleak for the next year or two, this this

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Speaker 1: sector has been beat up so much, so much of

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Speaker 1: it is in the price already, and here's an opportunity

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Speaker 1: to you know, kind of get it on another pull

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Speaker 1: back if if you have a holding period beyond say so,

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Speaker 1: I really think that earnings are going to set the

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Speaker 1: tone for the market in the next couple of weeks.

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Speaker 1: And uh, you know, we'll see some of this choppiness

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Speaker 1: day by day depending on what the generals do. They

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Speaker 1: always sort of seeing to drive the market mentality or

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Speaker 1: psychology for the week. Well, you know, Silver, you you

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Speaker 1: make a good point that I mean, when you talk

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Speaker 1: about psychology, it's almost as if it's how could you

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Speaker 1: say hurry up? And wait? I mean, we are looking

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Speaker 1: at these stocks, you know, for for a tech particularly,

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Speaker 1: we're looking at five G quantum computing, we're looking at AI.

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Speaker 1: These are all things which are going to take time

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Speaker 1: before they come on stream, and uh, you know that

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Speaker 1: those things are in the price to some extent, and

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Speaker 1: you know, at the end of the day, it's hang

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Speaker 1: on a second, you know what, I can get some

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Speaker 1: value somewhere else right now too. Yeah, well, I think

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Speaker 1: that's a great point as well. You need to diversify

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Speaker 1: your portfolio rights. So I think that if you look

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Speaker 1: at the broader macro um you know, kind of economy

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Speaker 1: out there and some of the uncertainty in the near

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Speaker 1: near term, if you're looking at the short term, then

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Speaker 1: I would expect traders to look in more sort of

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Speaker 1: defensive sectors or at least make sure that they're allocating

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Speaker 1: to things like you know, bonds trateguries that pay four

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Speaker 1: percent whatever it might be, um their private trading accounts

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Speaker 1: where the cash cash degree three and a half percent.

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Speaker 1: You know, defensive stocks like healthcare and things like that.

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Speaker 1: But they're the time to pick, to pick up on

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Speaker 1: a thematic ETFs and ideas for the future, and ideas

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Speaker 1: that will play out in the next few years. It

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Speaker 1: is now. It is when when you know the prices

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Speaker 1: are kind of knocked off of their highs multiples or

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Speaker 1: or you know, cut in half or a third, and

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Speaker 1: when you think about these ideas, you know, five G

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Speaker 1: is the name of a theme, right and quantum computing

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Speaker 1: in AI of the names of themes. But these companies

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Speaker 1: it's important to number one invest in those teams, right.

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Speaker 1: So so if you think about open AI for example,

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Speaker 1: right that the big big investment by Microsoft, that is

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Speaker 1: going to be something that can be monetized. It's something

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Speaker 1: that you know, can replace workers that companies can't find.

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Speaker 1: For example, UM it's it's you know, there's real value

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Speaker 1: to that and it affects the bottom line. But then

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Speaker 1: these themes like five G again quantum computing, they require

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Speaker 1: stocks like semiconductor stocks, and so those funds UM that

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Speaker 1: hold those names, those those companies are doing other things,

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Speaker 1: so A and D and and Nvidia. They're part of

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Speaker 1: you know, metaverse, they're part of UM running our coffee machine,

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Speaker 1: electric vehicles drivers, as far as AI machine learning. So

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Speaker 1: there's a lot there. So so so one, do you

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Speaker 1: like those companies? Are you starting to buy SMH and

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Speaker 1: some of the some of the semiconductor individual names. And secondly,

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Speaker 1: because I think this can be wrapped into Tesla blamed

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Speaker 1: China for many of its issues, saying that the challenges

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Speaker 1: were largely concentrated in China. That's all changing now there's

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Speaker 1: no more lockdowns and they're getting back to business. Does

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Speaker 1: that add to any optimism, Yeah, it does. So on

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Speaker 1: the first question, I do like semi conductors. I think that,

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Speaker 1: you know, if you look at the outlook for the

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Speaker 1: semi conductor space, and I like you know, and D

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Speaker 1: and the video sort of most because they're well capitalizing

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Speaker 1: part of every one of these revolutions, that revenue is

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Speaker 1: supposed to get to about two hundred and fifty billion

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Speaker 1: by that's not so far off, right. So I do

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Speaker 1: like semi conductors. They've been beat up. I think that

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Speaker 1: they're going to sort of start seeing their their resurrection.

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Speaker 1: There's a natural tail one for that space coming um

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Speaker 1: where it's just been straight head winds for the last

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Speaker 1: two years. To the test the question, you know, what

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Speaker 1: are demand looks like it's outpacing two x what what

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Speaker 1: the industry expected. And while you know Elon Musk came

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Speaker 1: out and said he expects it to contract this year,

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Speaker 1: you know they do have trying to reopening. How much

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Speaker 1: will that play out? I don't know. But with with Tesla,

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Speaker 1: I think that, you know, you still have this situation

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Speaker 1: where the company is just by far the leader in

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Speaker 1: this space. Yes, they're going to have you know, sort

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Speaker 1: of more competition, but there will also be you know,

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Speaker 1: a higher market share for the EB space and that

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Speaker 1: also has talents of UM Inflation Reduction Act and you

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Speaker 1: know some of the tax credits and things like that

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Speaker 1: that that have been passed, and we'll go towards the

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Speaker 1: you know, the knuckle of going carbon neutral. So I

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Speaker 1: do think that they have they continue to benefit in

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Speaker 1: coming years. So I want to get back to your

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Speaker 1: point about semi conductors here. Sure, the government's giving some

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Speaker 1: compensation for the uh lots of China as a market,

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Speaker 1: but you're still talking about thirty percent of their market

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Speaker 1: disappearing here. That's got to hurt of their market is disappearing,

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Speaker 1: but uh, you know, large sums of their market are

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Speaker 1: are reappearing right so automatically. So automative industry is just

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Speaker 1: highly reliant on semiconductors, and then you're expecting to see

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Speaker 1: you know, massive revenue growth there. The focus of tech

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Speaker 1: companies again, we talked about Microsoft AI chart GBT. You

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Speaker 1: know this this week's favorite word. All of this requires um,

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Speaker 1: you know, sort of managing big data, little wait and

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Speaker 1: see that is that all comes through semi conductors. You

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Speaker 1: need semi conductors for natural language processing. You know the

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Speaker 1: feature of five G depends on it. So I just

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Speaker 1: think that whatever is sort of lost will be replaced.

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

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