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Speaker 1: This is Bloomberg Gave Break Asia for this Friday, February

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Speaker 1: tenth in Hong Kong, Thursday February nine in New York,

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Speaker 1: and coming up today. US equities retreat in bond yields

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Speaker 1: jump as the Fed speaks with a hawkish voice, shares

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Speaker 1: in lift Sinc. After a weeker than expected outlook on revenue,

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Speaker 1: and shares in a Donni Group fall after a review

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Speaker 1: from m s C I triggers concern. China accuses US

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Speaker 1: of intelligence warfare. US officially confirms balloons communications spying capabilities.

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Speaker 1: White House looks at sanctions Turkey Syria death toll rises

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Speaker 1: above twenty thousand. I met Baxter with Global News Lionel

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Speaker 1: Messi's injury may keep the PSG star out of a

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Speaker 1: Champions League Round the sixth team match on Dance Sportsman.

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Speaker 1: I'll have that story more coming up in Bloomberg's boards.

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Speaker 1: That's all straight Ahead on Bloomberg Daybreak Asia on Bloomberg

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Speaker 1: eleven three on New York, Bloomberg Washington, d C, Bomberg one, Boston,

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Speaker 1: Bloomberg nine six, San Francisco, Sirius XM one nineteen and

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Speaker 1: around the world on Bloomberg Radio Dot com and via

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Speaker 1: the Bloomberg Business app. Good morning, I'm de Prisoner and

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Speaker 1: I'm Brian Curtiz. Here are the stories we're following today.

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Speaker 1: Richmond Fed President Thomas Barkin says it's important for the

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Speaker 1: FED to continue to hike interest rates in order to

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Speaker 1: reach its two percent inflation target. Barkin spoken an online

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Speaker 1: interview posted on the Richmond Fed website. You know, with

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Speaker 1: demand slowing but still resilient, labor markets healthy and they added,

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Speaker 1: and unfortunately enduring shock of the war in Ukraine, it

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Speaker 1: shouldn't be a surprise that inflation, while likely past its peak,

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Speaker 1: is still elevated. That, of course, is what makes the

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Speaker 1: case for us to stay the course. Barkin noted that

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Speaker 1: the past three monthly inflation reports have been positive, but

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Speaker 1: he said that the FED cannot take that for granted,

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Speaker 1: and cannot take it for granted that it will continue.

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Speaker 1: Investors have lifted where they see rates peaking this year

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Speaker 1: and are now largely in line with FED projections. Exxon

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Speaker 1: Mobile is creating a global trading division. We have that

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Speaker 1: story from Bloomberg's and Kates. The new unit will bring

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Speaker 1: together Exon's crude, natural gas, power and petroleum product desks

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Speaker 1: Global Trading will be formed later this year and is

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Speaker 1: designed to help Exon compete more aggressively with rivals VP

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Speaker 1: and Shell and the high risk, high reward arena of

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Speaker 1: energy derivatives. It is part of a wider corporate reorganization

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Speaker 1: of Exxon that will also establish a global business hub

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Speaker 1: to manage finance and procurement, and a new supply chain

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Speaker 1: unit in Washington and Kate's Bloomberg Daybreak Asia, A Donni

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Speaker 1: Group stocks fell after the index provider m s c

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Speaker 1: I said it was reviewing the number of A Donny

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Speaker 1: shares in public markets. Let's get the story from Bloomberg's

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Speaker 1: Anabel Jewelers. Nine of the group's ten stocks ended lower

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Speaker 1: on Thursday, ending at two day rally. If ms CI

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Speaker 1: dessigned to Kanta Donni Schaz, it's likely to trigger more selling. Separately,

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Speaker 1: a joint to Hotel Energies A Donni hydrogen development plan

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Speaker 1: has been put on hold, and Norway's Massive Wealth Fund

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Speaker 1: said it's sold its remaining stake in the group after

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Speaker 1: the recent slump in value. In the past few days,

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Speaker 1: the Adanne Group has trying to reassure investors and banks

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Speaker 1: by repaying loans and pledging to reduce its debt, but

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Speaker 1: the moves have only had a marginal effect. In Hong Kong,

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Speaker 1: I'm Annabel Rulers Bloomberg Daybreak Asia. After the bell. In

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Speaker 1: the US, we heard from PayPal the company reported a

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Speaker 1: slow down in volume growth during the fourth quarter at

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Speaker 1: a rate faster than expected. More from Bloomberg's Charlie Pellett,

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Speaker 1: it is yet another sign that consumer spending continued to stumble,

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Speaker 1: even during the normally busy holiday season. The firm also

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Speaker 1: says CEO Dan Shulman plans to retire at the end

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Speaker 1: of the year. PayPal has spent much of the last

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Speaker 1: year contending with a slowdown in growth in spending on

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Speaker 1: its platforms, as supply chain shocks CRYMP e commerce and

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Speaker 1: consumers dealt with historic levels of inflation in New York

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Speaker 1: Charlie Pellet, Bloomberg, Daybreak Asia. The right hailing company Lift

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Speaker 1: shocked investors with weak earnings guidance after the closing bell.

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Speaker 1: Bloombergs Tom Busby has that story. Shares of Lift took

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Speaker 1: a tumble and after hours trading after giving an earnings

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Speaker 1: outlook far short of Wall Street expectations. Instead of passing

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Speaker 1: along higher insurance cost to its customers. LIFT will instead

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Speaker 1: eat those costs in order to keep pricing low and

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Speaker 1: attract more writers. Now, because of that, it's predicting earnings

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Speaker 1: of between five and fifteen million dollars in the current quarter.

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Speaker 1: That's compared to Wall Street's average estimate of more than

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Speaker 1: eighty million dollars. Tom Busby, Bloomberg Daybreak Asia, Well, the

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Speaker 1: latest survey from the American Association of Individual Investors gave

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Speaker 1: us a kind of contrarian signal, Doug. I know you've

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Speaker 1: been looking at that. Your thoughts, Yeah, it may lead

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Speaker 1: to a little bit more consolidation in terms of the

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Speaker 1: equity market. I mean, even before this data was released, Brian,

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Speaker 1: I think the recent gains that we have seen in

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Speaker 1: stocks over the past month have put us in overbought levels.

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Speaker 1: So when the American Association of Individual Investors says the

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Speaker 1: bold bear spread rose to a reading of twelve five

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Speaker 1: from a negative four point seven just a week ago,

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Speaker 1: that signals maybe there is a little too much enthusiasm

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Speaker 1: for risk and as you say, a very good contrary indicator.

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Speaker 1: The SNP five though, is up six percent year to date. Uh,

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Speaker 1: it's a little hard to see that I think as exuberant,

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Speaker 1: particularly given the big fall we saw in December, and

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Speaker 1: right now the index is at forty eight. It was

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Speaker 1: at forty eight back in December, it was at forty

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Speaker 1: eight back in September, and it was also in that

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Speaker 1: range in June and July. And I think since then

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Speaker 1: you've seen inflation moderate. We just heard from Tom bark

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Speaker 1: And talking about that that Feds down to twenty five

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Speaker 1: basis point hikes and China has reopened, So there are

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Speaker 1: some reasons to be bullish. Yeah, But tomorrow we'll here

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Speaker 1: from the University of Michigan, and the concern here is

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Speaker 1: that the forecast for the one year inflation expectations will

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Speaker 1: show an increase and that would only ulster this idea

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Speaker 1: that we are looking at more rate hikes in twenty

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Speaker 1: three and the possibility of rate cuts before the end

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Speaker 1: of the year. That maybe comes off the table out

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Speaker 1: the door. Yeah. Yeah, you just wonder whether or not

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Speaker 1: inflation is kind of restoked to the upside, and that's

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Speaker 1: something we'll be watching closely. All Right, it's time for

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Speaker 1: global news. China is accusing the United States of warfare

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Speaker 1: in its response to shooting down the intelligence gathering balloon,

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Speaker 1: as it is put by China head Baxer has Global

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Speaker 1: News in the nine six news room, head, Yeah, that's

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Speaker 1: exactly right. Brian As Foreign Ministry says it is not

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Speaker 1: aware of any fleet of balloons, and Beijang is lashed

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Speaker 1: out at US President Joe Biden for saying that President

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Speaker 1: Sheidrin paying faces enormous problems. Says the remarks are highly

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Speaker 1: irresponsible and violate basic diplomatic protocols. But Bloomberg's and Marie

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Speaker 1: Hordern says, the US says, no, what the Chinese Liberation

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Speaker 1: Army was doing was collecting day to across forty countries,

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Speaker 1: and what this had capabilities of on this spy balloon

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Speaker 1: was actually being able to collect communication signals. How several

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Speaker 1: of the decision makers in the shootdown operation have been

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Speaker 1: in front of Congress today. The message is that no

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Speaker 1: US sensitive information was lost as the balloon flew and

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Speaker 1: as its signals to Chinese satellites were interrupted. Melissa Dalton,

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Speaker 1: Defense Assistant Secretary for Homeland Security says, the whole mission

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Speaker 1: was closely scrutinized in flight. The duration of this particular

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Speaker 1: balloon was was much longer, and the information that we

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Speaker 1: have since gleaned about the balloons that have transited globally.

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Speaker 1: Um was only recently discovered, and she says letting it

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Speaker 1: traverse the country and taking it down where it was

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Speaker 1: has allowed the US to gather very important information about

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Speaker 1: Chinese spying. How Senator Susan Collins says, a message is

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Speaker 1: clear and the effort to gather sense it information. In fact,

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Speaker 1: a sophisticated spy balloon such as this one provides certain

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Speaker 1: advantages over high tech satellites, and the White House today

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Speaker 1: says it's looking at the potential sanctions against entities connected

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Speaker 1: to the balloon project. Spokeswoman Karine Jean Pierre the US

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Speaker 1: will also explore taking action against PRC entities linked to

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Speaker 1: the p l A that supported the balloons incursion into

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Speaker 1: US airspace. And it should be noted this is not

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Speaker 1: new Taiwan, as long reported. Balloons over the island. Death

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Speaker 1: toll in the Turkey Syria quakes is now over twenty thousand.

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Speaker 1: Doctors without Borders trying to get as best it can

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Speaker 1: bring relief and medical care to the survivors. Avril Benoir,

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Speaker 1: the executive director of Borders, says help is critically needed

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Speaker 1: in Northwest Syria, where access is very limited by local authorities.

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Speaker 1: One u N sanctioned or permitted road to be able

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Speaker 1: to bring supplies from Turkey into northwest Syria. We are

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Speaker 1: advocating for it to be open and remain open because

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Speaker 1: that will be key. And she says the UN needs

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Speaker 1: to make sure that international help can get into the area.

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Speaker 1: Of the World Bank, by the way, has pledged one

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Speaker 1: one point seven eight billion dollars in assistance. Bert Back, Iraq,

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Speaker 1: legendary songwriter, producer, pianist, has passed away. What's He's responsible

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Speaker 1: for a most all of Dion Warwick's hits, among many

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Speaker 1: other artists years old? What's it if you find out

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Speaker 1: what it's all about? On the other side, Bert, please

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Speaker 1: let us know some way. Global news powered by more

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Speaker 1: than journalists and analysts and over countries. In San Francisco,

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Speaker 1: I'm at Baxter in. This is Bloomberg. Hi, everybody, this

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Speaker 1: is Bloomberg Daybreak Asia. I'm Brian Curtis here in Hong

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Speaker 1: Kong along with Rashad Sama. Our guest is John Vale,

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Speaker 1: chief Global Strategist at NICO Asset Management. John. We talked

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Speaker 1: a little bit about how the rally in the US

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Speaker 1: kind of appears to be running out of gas. Higher

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Speaker 1: bond yields. They're part of the story. And and the

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Speaker 1: hawk is fed speak. It's a little more positive at

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Speaker 1: the moment out here, And I'll mention a few headlines

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Speaker 1: and you can comment where you see fit. Tapestry stock

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Speaker 1: was up three and a half percent. It talked about

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Speaker 1: boosting guidance because of China. UH, the convenience store operator

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Speaker 1: in Japan, Lawson is looking to expand in China. Franklin

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Speaker 1: Templeton likes China and Taiwan going forward this year. And

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Speaker 1: this line. The hank Sing index usually never quits its

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Speaker 1: bull run after a fifty pop from the bottom. And

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Speaker 1: that's where we are right now. What do you like

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Speaker 1: in this sphere at the moment? John Well, To be honest,

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Speaker 1: we like UH all of the Asia, but and Japan

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Speaker 1: we like for the full year. For the first half

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Speaker 1: of the year, we don't expect as much upward um

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Speaker 1: surprises or upward movement. But for the second half of

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Speaker 1: the year and the US dollar terms, we expect the

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Speaker 1: Japanese market to do very well. Right, Okay, But Japanese

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Speaker 1: marks has been doing well partly because of the weakness

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Speaker 1: of the yen, and tell me how much is the

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Speaker 1: dollar figuring in your investment thesis. It is UH featuring

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Speaker 1: quite a bit. Um. We expect the end to appreciate

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Speaker 1: quite a bit by the end of the year, and

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Speaker 1: yet the stock market to go up UH moderately. And

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Speaker 1: so yes, currencies will drive a big portion of the

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Speaker 1: US dollar denominant gain for Japanese that is going forward.

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Speaker 1: And I should point out that evaluations in Japan are

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Speaker 1: just well by historical standards. In Japan, it's not that low.

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Speaker 1: It's sort of in the middle of its recent p

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Speaker 1: band on a forward twelve months earning spaces, but it's

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Speaker 1: far below the US. It's about twelve point eight times

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Speaker 1: of order earnings versus by eighteen point five or something

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Speaker 1: for the US. And yeah, it's a very very tractive market.

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Speaker 1: And earnings expectations are still rising in Japan, whereas they're

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Speaker 1: falling in the US. So a lot of good things

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Speaker 1: to say about the Japanese market. On the China reopening,

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Speaker 1: do you see that as overblown in terms of its

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Speaker 1: impact or still a very positive story. It's still very positive.

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Speaker 1: We don't know how positive it's going to be, but

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Speaker 1: it doesn't seem to be any sort of sign that

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Speaker 1: China wants to UH pull back. It's a stimulus of

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Speaker 1: the economy. It's fighting some headwinds obviously, but it looks

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Speaker 1: like it's going to be you know, very positive for

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Speaker 1: for this year at least. All right, well, let's just

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Speaker 1: have a look at the vext question of what's hanging

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Speaker 1: on in the general and overall markets as as a

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Speaker 1: global strategist looking at perhaps at the moment the disconnect

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Speaker 1: that there is between what the bond and equity markets

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Speaker 1: in between them. Of course that differences are telling us

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Speaker 1: compared to what the funder reserve is. Yes, it's a

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Speaker 1: bit of a conundrum obviously. UM bond market participants still

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Speaker 1: are pretty bullish. They sort of still expecting a recession

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Speaker 1: of some sort in the States and U for UH

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Speaker 1: inflation to drop rapidly. And that's gonna come up against

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Speaker 1: some really hard questions in the next week or so

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Speaker 1: with the CPI data coming out. I mean, consensus has

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Speaker 1: been reported now for the last few days. It's sort

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Speaker 1: of come out at about zero point five for a

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Speaker 1: headline and zero point four for core. And those are

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Speaker 1: high numbers and not only imply that both the three

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Speaker 1: months and the six month annualized rate for core we'll

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Speaker 1: start to accelerate again. Um. And so that could yes,

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Speaker 1: you know, and obviously if the numbers fall under, that

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Speaker 1: bond market might not be so upset. But then there's

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Speaker 1: another number coming to January retail sales number and that

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Speaker 1: data just came mouthful in the Bloomberg in Sensus at

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Speaker 1: two point zero month on month, which is a huge game,

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Speaker 1: and that's driven by both autos and gasoline and it's um,

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Speaker 1: you know, there could be some upward revisions to the

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Speaker 1: bad December number that I think was related to weather actually, um.

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Speaker 1: But for overall that, you know, these are strong numbers

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Speaker 1: that the bomb market is gonna have to face along

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Speaker 1: with you know, fairly hawkish uh fed rhetoric. You know,

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Speaker 1: they're talking about for being restrictive for years if possibly.

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Speaker 1: So that's you know, I'm surprised that didn't make for

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Speaker 1: an in prison, you know, especially coming from Williams and

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Speaker 1: from Waller, who are senior people. Now John, you're in

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Speaker 1: in in Tokyo. Um. So I want to talk a

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Speaker 1: little bit about Japan China. I mentioned that convenience to

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Speaker 1: operator laws and looking at opportunities in China. Are Japanese

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Speaker 1: companies looking to try to take advantage of the reopening

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Speaker 1: in China, And if so, in what sort of areas? Um? Well, yes,

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Speaker 1: I mean I'm not an expert at this, but certainly

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Speaker 1: Japan has not given up on the Chinese market. There's

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Speaker 1: some areas obviously where they're being more careful and bringing

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Speaker 1: some production home, especially in some of the high tech area.

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Speaker 1: But no, I think everyone in in Japan still believes

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Speaker 1: in the China growth story over the intermediate term, and

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Speaker 1: the consumer could be the biggest area. I mean, they've

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Speaker 1: obviously saved a lot of money over the pandemic period,

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Speaker 1: at least from the statistics that I've seen, and uh yeah,

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Speaker 1: there could be a lot of revenge spending. Lawson is

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Speaker 1: very good at what they do, and imagine they'd be

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Speaker 1: very successful in China. This is Bloomberg Daybreak Asia, your

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Speaker 1: morning brief on the story is making news from Hong

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