Speaker 1: This is Bloomberg Daybreak Asia, but it's Thursday January in
Speaker 1: Hong Kong, Wednesday January in New York and coming up
Speaker 1: this hour, Tesla is seeking to boost output quickly after
Speaker 1: the ev maker reported better than expected profits last quarter.
Speaker 1: FED Vice chair Leal Brainerd appears to be a top
Speaker 1: contender to head President Biden's Economic Council, and a SML
Speaker 1: says limiting China's access to certain technologies will have unintended consequences.
Speaker 1: US and Germany announced the sending of heavy tanks to Ukraine.
Speaker 1: Russia says the West is escalating the war. China says
Speaker 1: it sees a major decline in severe COVID cases. I'm
Speaker 1: at Baxter with Global News. Novak Djokovic moves on to
Speaker 1: the semis of the Australian Open in dominating fashion. I'm
Speaker 1: Dan schwartz Been. I'll have that story more coming up
Speaker 1: in Bloomberg Sports. That's all straight ahead on Bloomberg Daybreak
Speaker 1: Asia on Bloomberg eleven three on York, Bloomberg on Washington,
Speaker 1: d C, Bloomberg one six one, Boston, Bloomberg nine sixties,
Speaker 1: San Francisco, Sirius XM one nineteen and around the world
Speaker 1: on Bloomberg Radio dot com and via the Bloomberg Business app.
Speaker 1: Good morning, I'm Dead Prisoner and I'm Brian Curtis. Here
Speaker 1: are the stories we're following today. We do have earnings
Speaker 1: to get right to hear. Tesla reporting better than expected
Speaker 1: profits in the latest quarter. It signaled strength to a
Speaker 1: degree as the company faces growing questions about car buyer
Speaker 1: demand for it's all electric vehicle lineup. Let's get details
Speaker 1: from Bloomberg's Charlie Pellett. The Austin, Texas based company reported
Speaker 1: adjusted earnings per share of a dollar nineteen, beating the
Speaker 1: dollar twelve share average of analysts estimates compiled by Bloomberg.
Speaker 1: The ev market leader says it will increase output quote
Speaker 1: as quickly as possible, in line with previous guidance for
Speaker 1: average annual growth of fifty sent over multiple years. It
Speaker 1: also says it is on track to deliver about one
Speaker 1: point eight million vehicles this year in New York. Charlie
Speaker 1: Pellott Bloomberg Daybreak Asia. Well, thank you, Charlie. Now, A
Speaker 1: key question going forward is whether there's some downside risk
Speaker 1: for corporate earnings. In three the c IO of New Vein,
Speaker 1: Sarah Malic says, the answer is yes, and for that
Speaker 1: reason she's making the case for fixed income. Just looking
Speaker 1: at rate heights going forward about fifty more basis points
Speaker 1: expected from the FAT, So that's starting to move behind it.
Speaker 1: You can start to increase some of your duration and
Speaker 1: fixed income and get strong total returns in it without
Speaker 1: a lot of these heavy macro risks that are going
Speaker 1: to hit equity. So earns risk in some of these
Speaker 1: other areas that ensumer slow down and that impact on
Speaker 1: revenue growth and all of that with equities considering their
Speaker 1: valuations is less attractive. That is Sarah Malic there from
Speaker 1: New ven By the way, Bloomberg Intelligence has fourth quarter
Speaker 1: earnings for the tech firms within the S and P
Speaker 1: five hundred are projected to have fallen nine from last year.
Speaker 1: Here's the thing. Just three months ago those profits were
Speaker 1: expected to be flat. Well, shares in Adani Group companies fell.
Speaker 1: That's after the US investor Hindenburg Research said it was
Speaker 1: shorting the conglomerate stocks. It accused firms owned by Asia's
Speaker 1: richest man Gatamadanni of brazen market manipulation and accounting fraud.
Speaker 1: Adani Group CFO Jushinder Singh later rejected the claims. What
Speaker 1: they report is suggesting that Adana Group companies have created
Speaker 1: shell companies and Yui Caribbean Islands and Maulitias which is
Speaker 1: leading to a tax theft, corruption and money laundering. However,
Speaker 1: that Adani Group CFO has countered, then he has he
Speaker 1: has denied all this allegation and he had said also
Speaker 1: criticized the timing of this landing of this report because
Speaker 1: Janu Day, the flagship company of Adani Group, Dania Enterprises,
Speaker 1: is launching is fullow on offer which is going to
Speaker 1: be the largest fullow on offer in India. Adani Group
Speaker 1: financial officer jusiend Singh. Bloomberg data, by the way, shows
Speaker 1: the market value of ten Donnie owned stocks was eroded
Speaker 1: by about twelve billion dollars in Wednesday's trading. Well. The
Speaker 1: Dutch chip making equipment company A s m L says
Speaker 1: limiting China's access to certain technologies will have unintended consequences.
Speaker 1: We have more from Bloomberg's Annabel Jewelers. The Biden administration
Speaker 1: is leading an effort to curb exports of chip manufacturing
Speaker 1: equipment to China. The Netherlands and Japan are expected to
Speaker 1: join in, but a s mL CEO Peter Venick says
Speaker 1: the measures could eventually push Beijing to create its own technology.
Speaker 1: Simply put, he says, if China cannot get access to
Speaker 1: those machines, the country will create their own. Even so,
Speaker 1: Vennick admits the complex supply chain, combined with the knowhow
Speaker 1: required to recreate advanced chipmaking technology will be a massive challenge.
Speaker 1: Vennick is also critical of export control for other reasons.
Speaker 1: He says chip availability could be reduced and limiting access
Speaker 1: means a less efficient infrastructure and cost will very likely
Speaker 1: go up. In Hong Kong, I'm Annabel Ruler's bloom blow
Speaker 1: daybreak Asia. Meantime, in Europe, Germany's business outlook brightened further.
Speaker 1: A gauge of expectations by the EFO Institute rose to
Speaker 1: eighty six point four in January from the three point
Speaker 1: to the previous month. We heard from EFO President Clemen's
Speaker 1: Foist companies are telling us they are optimistic regarding the
Speaker 1: next six months and that suggests overall we will avoid
Speaker 1: a technical recession with most important risk for the German
Speaker 1: economy was a gas rationing scenario, so that risk is
Speaker 1: off the table. Now due to the mild weather, I
Speaker 1: guess a storage is full. Foist also said that he
Speaker 1: expects a shrinking economy in the first quarter, but that
Speaker 1: will be followed by an improvement towards the summer. Well
Speaker 1: back here in the States, we are hearing that FED
Speaker 1: Vice Chair Leo Brainerd is now a top contender to
Speaker 1: become the head of the National Economic Council. The role
Speaker 1: within the White House will be vacated by Brian Deese
Speaker 1: at an undetermined time. Here's Bloomberg's and Marie Hordern. We
Speaker 1: should no decisions have been made, and there are another
Speaker 1: names that have been thrown around, like Gene Sperling, like
Speaker 1: Wally Adamo. But right now what you potentially could see
Speaker 1: in the coming weeks is that the FEDS number two
Speaker 1: becomes the number one economic voice in the West Wing.
Speaker 1: This is on top of a little bit of a
Speaker 1: shake up at the White House, which is pretty much
Speaker 1: natural when you have after a metrom election and two
Speaker 1: years of an administration that is Bloomberg's and Marie hoor Dern.
Speaker 1: By the way, if Brainerd is appointed, that would open
Speaker 1: a slot on the FED seven member board. Now President
Speaker 1: Biden would then need to find a successor who could
Speaker 1: win the full backing of the U S. Senate Brian.
Speaker 1: We are a week away from the next FED decision.
Speaker 1: But if you're talking central banks, I think it was
Speaker 1: the BOC moving markets today. Yeah, that was very interesting
Speaker 1: because all along it has been out in front and
Speaker 1: this would be the first pause by the G seven
Speaker 1: central banks, and it has led the FEDS, so it
Speaker 1: may send a strong message. All right, let's update Global
Speaker 1: News next here on day break. Asia Ukraine will soon
Speaker 1: be some of the heavy artillery and tanks it's been
Speaker 1: seeking for months. Ad Baxter with more from the Bloomberg
Speaker 1: News room at San Francisco, Eddie, Yeah, exactly right, Douglas.
Speaker 1: This comes as a U S and Germany broker a
Speaker 1: deal to include tanks from a number of NATO countries.
Speaker 1: German Chancellor all Off Schultz. Our goal is to quickly
Speaker 1: provide two tank battalions together with our allies. There are
Speaker 1: many countries that would like to supply, and we will
Speaker 1: coordinate that and involve them to make that happen steps
Speaker 1: by step. Yeah. So with that, U S. President Joe Biden,
Speaker 1: today I'm announcing that the United States will be sending
Speaker 1: Abram tanks to Ukraine. Yeah, and along with ukraining Ukrainian
Speaker 1: forces and the use of them, he says. Biden says
Speaker 1: it also sends a strong message at the US and
Speaker 1: NATO are united in their full support of Ukraine's ability
Speaker 1: to defend itself and conduct counter offensives. The expectation of
Speaker 1: the part of Russia's we're going to break up, We're
Speaker 1: not going to stay united. But we are fully, thorough
Speaker 1: totally united, yeah, he says, as is the globe now
Speaker 1: against Russia. Biden did stress that these weapons are not
Speaker 1: to be used in launching first strike, but in defense
Speaker 1: and counter attack. So what does this change, Well, Rose
Speaker 1: gotten Muller, who is a former NATO Deputy Secretary General
Speaker 1: now a professor at Stanford, I think it will make
Speaker 1: a difference because these are the most capable battle tanks
Speaker 1: in the world today. The Leopards are well known for
Speaker 1: being reliable, for being capable, and I think the fact
Speaker 1: that they are deployed across the European NATO allies and
Speaker 1: also NATO partners such as Finland who have offered up tanks.
Speaker 1: She says. Expectations are that Russia will launch major offenses
Speaker 1: in the coming months and Godly says she feels it
Speaker 1: will make NATO stronger. This agreement, delivery of tanks will
Speaker 1: take those months the training begins. Now Russia, well, Russia's
Speaker 1: decrying the decision, saying this is proof that in fact,
Speaker 1: the West is escalating the war, and Russian activist hackers
Speaker 1: have not German website offline in response to the decision.
Speaker 1: Germany's b s I cyber agency says the digital blitz
Speaker 1: has had a little tangible effect. China says a number
Speaker 1: of COVID related deaths and severe cases and hospitals have
Speaker 1: declined by more than seventy percent from peak levels in January.
Speaker 1: It says daily fatalities in hospitals a slid to eight
Speaker 1: hundred nineties six as of Monday Monday, down from over
Speaker 1: hundred January four um. Now, China's numbers have been questioned
Speaker 1: by the World Health Organization, which would like to see
Speaker 1: more data. And the meta platforms are going to end
Speaker 1: Donald Trump's suspension. Facebook says it will have it back
Speaker 1: up in the coming weeks. In San Francisco, I'm Ad Baxter,
Speaker 1: this is Bloomberg. This is Bloomberg, Gaybreak Asia. I'm Brian
Speaker 1: Curtis along with Rishad Salama. Let's get to our guest,
Speaker 1: Sylvia Jablonsky, co founder, CEO and c i O at
Speaker 1: defiance E t F S. Well, Sylvia, we seem to
Speaker 1: be in a kind of muted reaction phase. So we
Speaker 1: thought maybe Microsoft's guidance yesterday, the week of guidance, would
Speaker 1: lead to a sell off today, but didn't happen. Really,
Speaker 1: Microsoft was down about six tenths of one per cent.
Speaker 1: Is this because to a certain degree, with the huge
Speaker 1: losses we saw last year, Microsoft down some so Tesla
Speaker 1: down two thirds that a lot of this is in
Speaker 1: the price. Yeah, good evening. I think you make a
Speaker 1: great point there. You know, we we had a nice
Speaker 1: start to the year, particularly with the NAS dock up
Speaker 1: and looking to recover on some of those tech stocks
Speaker 1: that were just hammered last year to the tune of
Speaker 1: twenty or more. UM. And I think, you know, the
Speaker 1: Microsoft news addition, initially you saw stocks really selling off.
Speaker 1: You saw, you know, futures pointed sort of grossly low,
Speaker 1: and the morning was a little bit rough with us.
Speaker 1: And so I think that ignited concerns that the market
Speaker 1: generals were struggling. UM. As you know, rates have been
Speaker 1: rising and refreshing. Rest and fears are growing. But I
Speaker 1: do think that investors who are interested in tech for
Speaker 1: the long term perhaps came off the sidelines a little
Speaker 1: bit and thought, you know, while the outlook is sort
Speaker 1: of bleak for the next year or two, this this
Speaker 1: sector has been beat up so much, so much of
Speaker 1: it is in the price already, and here's an opportunity
Speaker 1: to you know, kind of get it on another pull
Speaker 1: back if if you have a holding period beyond say so,
Speaker 1: I really think that earnings are going to set the
Speaker 1: tone for the market in the next couple of weeks.
Speaker 1: And uh, you know, we'll see some of this choppiness
Speaker 1: day by day depending on what the generals do. They
Speaker 1: always sort of seeing to drive the market mentality or
Speaker 1: psychology for the week. Well, you know, Silver, you you
Speaker 1: make a good point that I mean, when you talk
Speaker 1: about psychology, it's almost as if it's how could you
Speaker 1: say hurry up? And wait? I mean, we are looking
Speaker 1: at these stocks, you know, for for a tech particularly,
Speaker 1: we're looking at five G quantum computing, we're looking at AI.
Speaker 1: These are all things which are going to take time
Speaker 1: before they come on stream, and uh, you know that
Speaker 1: those things are in the price to some extent, and
Speaker 1: you know, at the end of the day, it's hang
Speaker 1: on a second, you know what, I can get some
Speaker 1: value somewhere else right now too. Yeah, well, I think
Speaker 1: that's a great point as well. You need to diversify
Speaker 1: your portfolio rights. So I think that if you look
Speaker 1: at the broader macro um you know, kind of economy
Speaker 1: out there and some of the uncertainty in the near
Speaker 1: near term, if you're looking at the short term, then
Speaker 1: I would expect traders to look in more sort of
Speaker 1: defensive sectors or at least make sure that they're allocating
Speaker 1: to things like you know, bonds trateguries that pay four
Speaker 1: percent whatever it might be, um their private trading accounts
Speaker 1: where the cash cash degree three and a half percent.
Speaker 1: You know, defensive stocks like healthcare and things like that.
Speaker 1: But they're the time to pick, to pick up on
Speaker 1: a thematic ETFs and ideas for the future, and ideas
Speaker 1: that will play out in the next few years. It
Speaker 1: is now. It is when when you know the prices
Speaker 1: are kind of knocked off of their highs multiples or
Speaker 1: or you know, cut in half or a third, and
Speaker 1: when you think about these ideas, you know, five G
Speaker 1: is the name of a theme, right and quantum computing
Speaker 1: in AI of the names of themes. But these companies
Speaker 1: it's important to number one invest in those teams, right.
Speaker 1: So so if you think about open AI for example,
Speaker 1: right that the big big investment by Microsoft, that is
Speaker 1: going to be something that can be monetized. It's something
Speaker 1: that you know, can replace workers that companies can't find.
Speaker 1: For example, UM it's it's you know, there's real value
Speaker 1: to that and it affects the bottom line. But then
Speaker 1: these themes like five G again quantum computing, they require
Speaker 1: stocks like semiconductor stocks, and so those funds UM that
Speaker 1: hold those names, those those companies are doing other things,
Speaker 1: so A and D and and Nvidia. They're part of
Speaker 1: you know, metaverse, they're part of UM running our coffee machine,
Speaker 1: electric vehicles drivers, as far as AI machine learning. So
Speaker 1: there's a lot there. So so so one, do you
Speaker 1: like those companies? Are you starting to buy SMH and
Speaker 1: some of the some of the semiconductor individual names. And secondly,
Speaker 1: because I think this can be wrapped into Tesla blamed
Speaker 1: China for many of its issues, saying that the challenges
Speaker 1: were largely concentrated in China. That's all changing now there's
Speaker 1: no more lockdowns and they're getting back to business. Does
Speaker 1: that add to any optimism, Yeah, it does. So on
Speaker 1: the first question, I do like semi conductors. I think that,
Speaker 1: you know, if you look at the outlook for the
Speaker 1: semi conductor space, and I like you know, and D
Speaker 1: and the video sort of most because they're well capitalizing
Speaker 1: part of every one of these revolutions, that revenue is
Speaker 1: supposed to get to about two hundred and fifty billion
Speaker 1: by that's not so far off, right. So I do
Speaker 1: like semi conductors. They've been beat up. I think that
Speaker 1: they're going to sort of start seeing their their resurrection.
Speaker 1: There's a natural tail one for that space coming um
Speaker 1: where it's just been straight head winds for the last
Speaker 1: two years. To the test the question, you know, what
Speaker 1: are demand looks like it's outpacing two x what what
Speaker 1: the industry expected. And while you know Elon Musk came
Speaker 1: out and said he expects it to contract this year,
Speaker 1: you know they do have trying to reopening. How much
Speaker 1: will that play out? I don't know. But with with Tesla,
Speaker 1: I think that, you know, you still have this situation
Speaker 1: where the company is just by far the leader in
Speaker 1: this space. Yes, they're going to have you know, sort
Speaker 1: of more competition, but there will also be you know,
Speaker 1: a higher market share for the EB space and that
Speaker 1: also has talents of UM Inflation Reduction Act and you
Speaker 1: know some of the tax credits and things like that
Speaker 1: that that have been passed, and we'll go towards the
Speaker 1: you know, the knuckle of going carbon neutral. So I
Speaker 1: do think that they have they continue to benefit in
Speaker 1: coming years. So I want to get back to your
Speaker 1: point about semi conductors here. Sure, the government's giving some
Speaker 1: compensation for the uh lots of China as a market,
Speaker 1: but you're still talking about thirty percent of their market
Speaker 1: disappearing here. That's got to hurt of their market is disappearing,
Speaker 1: but uh, you know, large sums of their market are
Speaker 1: are reappearing right so automatically. So automative industry is just
Speaker 1: highly reliant on semiconductors, and then you're expecting to see
Speaker 1: you know, massive revenue growth there. The focus of tech
Speaker 1: companies again, we talked about Microsoft AI chart GBT. You
Speaker 1: know this this week's favorite word. All of this requires um,
Speaker 1: you know, sort of managing big data, little wait and
Speaker 1: see that is that all comes through semi conductors. You
Speaker 1: need semi conductors for natural language processing. You know the
Speaker 1: feature of five G depends on it. So I just
Speaker 1: think that whatever is sort of lost will be replaced.
Speaker 1: This is Bloomberg Daybreak Asia, your morning brief on the
Speaker 1: stories making news from Hong Kong to Singapore and Wall Street.
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Speaker 1: day Break Asia.