Daybreak Asia: January 30th, 2023

for those dept ceiling talks. And mining giant Rio Tinto loses a highly radioactive capsule. I'm Today's Pelegrady with Global News. Novak Djokovic bakes history with yet another Australian Open title. I'm Dan Schwartzmen. I'll have that storyboard coming up in

Bloomberg swoards. That's all straight Ahead on Bloomberg Daybreak Asia on Bloomberg eleven three on New York, Bloomberg on Washington, d C, bloom Burg one six one, Boston, Bloomberg nine six, San Francisco, Sirius XM one nine Team, and around the world on Bloomberg Radio Dot com and via the Bloomberg business Side. Good morning, I'm the Prisoner and I'm Brian Curtis. Here are the stories we're following today. Well, let's take a look at these top stories, and Bloomberg's Michael McKee

has a preview on what to expect this week. It's a big week for markets, although the news that may have the biggest impact on markets won't come until Friday. Wednesday's FED meeting will dominate the headlines early that although a quarter percentage point increase in the nation's benchmark borrowing rate is pretty much baked in, it would take a surprise to really move markets. Friday is job's Day, however, and that data will do a lot to inform how

investors think about the feds next move. So far, the Central Bank has raised rates by four and a half percent this year, but unemployment is unchanged. Does hiring slow and job loss accelerate, and most important, to average hourly wage gains slow? Those will be key data points for Fed officials considering any additional policy change. Michael McKie Bloomberg Daybreak Asia. Well, the Adonni group is trying to calm jittery markets, and maybe a worried investors alike ahead of

that two and a half billion dollars share sale. In the week ahead, we have more from Bloomberg's Sasanna Palmer go to Madonni, India's richest man, published a four d thirteen page rebuttle of allegations of fraud by short seller Hindenburg Research. A Donnie calls the accusations by Hindenburg nothing short of a calculated securities fraud under applicable law. Adanni Group says it will exercise its rights to pursue remedies

to safeguard stakeholders. Hindenburgh had published a one hundred page report on the eve of A Donnie's share sale opening, alleging that it's two year investigation found quote brazen stock manipulation and accounting fraud. It also called out A Donnie's substantial debt. Susannah Palmer, Bloomberg Daybreak Asia. So a big week this week, but a big a today. Chinese equities coming back and likely to enter a bullmarket today when

the exchange is reopened after a week long break. Let's get the story from Bloomberg's David and Glass here in Hong Kong, the Seas I three hundred is tipped to extend its nine rise from October. Travel in box office data are sending a sign that the consumer is back. Hotels, restaurants, and travel companies are all expected to shine China State councils set on Saturday. The nation needs to accelerate consumption. Policymakers want consumers to be the new driving force of

the economy now. In the past, previous rallies were always stopped short by COVID lockdowns, but that's out of the picture, at least for now, and as a result, investors like Morgan Stanley think there's a lot more room to run in Hong Kong. David and Gless Bloomberg Day Break Asia. China Central Bank will extend monetary policy tools for green technologies and the logistics sector that story from Bloomberg's Annabel Jewelers.

The funding tools were for adopted in November twenty twenty one and will remain in place until the end of twenty four. Those banks lending to companies working to reduce carbon emissions will have access to cheap funding. The p BOC also said it will allow some local and foreign financial institutions to join the project. The aim is to deepen global cooperation and green finance. Meanwhile, the re lnding project for the logistics sector will remain until the end

of June. Smaller logistics and storage companies will also be added in Hong Kong. I'm Annabel Rulers Bloomberg Daybreak Asia Well. Coming up at a few moments, we'll be chatting with David Kotok, CEO and chairman of Cumberland Advisors, and Doug one of the questions I'll put to him and this is sort of interesting because we saw after Microsoft's earnings

that investors treated the company pretty lightly. It fared reasonably well, and it seems that Bloomberg came out and codified how this has been a reaction overall, that the market is rewarding companies that beat expectations, but it's also limiting the punishment doled out to those that fall short. And it seems to be a message, which we mentioned at the time, that a lot of the bad news is already baked in. Perhaps, but consider the chip makers. There was a story on

the Bloomberg terminal about declining memory chip prices. Now I know that a m D doesn't really play heavily in that space that belongs more to let's say, to Micron Technology or even South Korea's sk Heinex. Nonetheless, we're going to hear from a m D this week along with Qualcom and where the chip companies are concerned, Brian, I think guidance is going to be critical. And isn't it interesting that a m D S market cap now I

think has passed until which is really astonishing. I wanted to make a very short comment on the Hindenburg A Donni story that we talked about moments ago. Um, what we wonder, you know, as our Shoeley Wren and others pointed out, Hindenberg is pretty well respected on the street. It was a firm that worked with Harry Markopolis, the analyst that uncovered the Bernie made Off Ponzi scheme. And you wonder whether or not this whole story is setting

back investing overall into all of em. Well, look at what Bill Ackman had to say. I mean, he's doubling down on his criticism right. He said, there's simply too much liability or potential liability that the banks have right now that are involved in this share sale, which may happen this week. We don't know. Over the weekend. I think it was on Saturday that Reuters was reporting that some of the bankers involved in this sale we're considering

either delays or maybe even price cuts. Yeah, now tit for tat with with that story about Hindenburg and uh Donnie's group. Well, the time now eight minutes past the hour, it's time for global news. The U S General said that the US and China could soon be at war, and here come those dead ceiling talks. Let's get to Denise Pellegrini in the Bloomberg newsroom. Denise, Yeah, Brian, we could see some tit for tat on those dead ceiling talks, but right now we are seeing some possible movement on

the debt limit. How Speaker Kevin McCarthy saying he's looking forward to talking with President Biden about it on Wednesday. I want to sit down together work out an agreement that we can move forward to put us on a path to balance at the same time, not put any any of our debt in jeopardy at the same time. And McCarthy also telling CBS Face the Nation he is not asking for cuts to social Security or Medicare. He does say though, Republicans do want to strengthen those programs,

so we'll see what happens there. Democrats and Republicans could argue about the debt ceiling for months. Iran is warning of escalating tension in the Persian Gulf. Says a drone attack caused a heavy explosion at a Defense Ministry ammunition depot in central Iran. No official word on who is behind this attack. Correts though is blaming Israel. Former Defense Secretary and former head of the CIA, Robert Gates says support for Ukraine is holding up, but he does say

Vladimir Putin will not back down. If you had said a year ago that Europe will go from more than dependency on rush of oil and gas and they're now less than a year later, zero to fifteen percent dependant, that's extraordinary. Now he's speaking there an NBC's Meet the Press, a US general says China and the US could be at war within two years. General Mike Minihan the one

making this comment. He told his officers to prepare, according to NBC for that, and he says he has a gut feeling that the presidential elections in the US and Taiwan in four will create what he calls an opportunity for China to move in. He says by five, he has a feeling they could be at war. China giving visas to Japanese nationals wanting to visit again, that says, it lifts more COVID restrictions. We'll see if China does

the same though with South Korea soon. One senator not ruling out a federal investigation of the Memphis Police Department after five of the department's officers were charged with murder and connection to the beating death of Tyree Nichols. Illinois Democrat Dick Durban. And Durban on ABC S this week acknowledged the issue of police brutality wasn't isolated, but occurs

all over the country. U s attorney for the Western District of Tennessee, does say that a civil rights investigation into nichols death will occur, but not of the entire department. And Rio Tinto says it has lost a highly radioactive capsule in the Western Australian desert. This is the mining Giant, It says. The package that this thing was in was found broken apart at the radiation storage facility and empty. Without this radioactive device exposure could cause radiation, sickness or burns.

Real Tinto is apologizing to the public for alarm this is causing in the area. Global News twenty four hours a day on errand on Bloomberg quick Take, powered by more than journalists and analysts and more than a hundred and twenty countries in the news. Remind Denise Pelygriny, this is Bloomberg. This is Bloomberg, Gay Break Asia. I'm Brian Curtis along with Shots Salama here in the studio with me, and we are joined by David kotoxy io and chairman

of Cumberland Advisors. It makes some sense of what we see in the markets. David, is this the week it's such a big week? Is this the week that sort of upsets the Apple card with the recent equity rallies. We're gonna find that out. This is as you just described and reported with Doug and Mike McKeith. This is a huge week. Um expectations about the FED are pretty clear. It looks like it's a quarter point. That's not where

the questions are. I'm I'm a little a little cautious because of that attacked by drones in Iran, and to me that is a new version. We have to see if the oil price reacts. Um. I was looking at it just now. It looks like there's a few pennies firming up, no immediate reaction, but I don't see that as a one off of vent and the markets have no pricing of geo political risk or a Middle East shock in them, So that could be a new item in the list. Well, that could be something which up

to the stakes, absolutely, David. But you know, we got on the other side one thing which could really uppend. It would be a face saving piece if you like, or a ceasefire in Ukraine. But I want to get to the other part of the question that I wanted to to to really ask you here, which is that with basis points as a hike coming up if we get but how much will the language have to change in order to a support it and be to reassure people and be ultimately you've got to also ask yourself.

Then they've got to be very careful what they say. Oh, I agree, Rich, They have to be very careful. If they indicate that the rate increases and the pressure on inflation is over, the market will say they've accepted something higher than two percent and do a that will be a game changer. So my suspicion is, or expectation is the language will remain firm. Now the rate of increases is still an increasing trajectory of central bank policy, and that's not just in the United States, that's going to

be everywhere. We mentioned that the stock market has been kind of uh, you know, avoiding punishing companies that miss, and we cited Microsoft as as one example. Bloomberg did a study of this and said that companies that fell short underperformed the broader market by just one point seven percent, and that was the least negative reaction in the last

eight quarters of earnings. Does it tell you something? Does it tell you that the market thinks that either times are getting better, or companies are making the right adjustments, or maybe that the bad news is already in Well, Brian,

I saw that, I saw the study. It was a great study by Bloomberg, and I think you characterize it in the in the positive sentiment, Well, the markets are stock markets are saying no hard recession, inflation peaking, central banking tightening policies are coming to a pause, and it's a Goldilock scenario, maybe we'll get it. But in our shop, in my portfolios and the portfolios that we manage, we still have a cash reserve and we are still wary

of geopolitical risk. So we are very much overweighted the defense sector and aerospace sector. We don't think you have just at the nine everything works out wonderfully outcome after this shock. Now we'll be right or wrong. We'll know that probably six months or a year from now, like most things actually ultimately David. But so there is a

almost a sense of people being sanguine about geopolitics. And that's something which is crept in probably the last couple of decades because anything before uses really have a market impact when it came to geo political changes, etcetera, etcetera. Why do you think that happened? Well, low interest rates for a persistent period of time created asset inflations, asset price increases. Everyone thought how smart they were because whatever

they touched improved. Meanwhile, the world didn't become less dangerous, it became more dangerous. And um, we have we go through cycles reach and this is one of them. I'm you know, if you're if you study history, and I've done that for a while and continue to do so when you get to sanguine and things are too easy in the scenario is two goldilocks, then you got to hold back. Yeah, you said you did, and you said you've got a lot of cash on the on the

balance sheet. Would you deploy that to China? Now, I'm I'm trying to quickly get to this because it's such a big story for us today in Asia. The China reopened. Uh does it look like this rally has more room to run? It sure looks like it. Yes, deploying into China is something we are doing and have done and continue to be optimistic about China reopening. And I think there's a bunch of others. I don't see the trade as too crowded yet. Because China suffered, Asian markets suffered,

So it's not just China. How about Korea? Have about Vietnam? In a frontier market or an emerging market, a resurgence in Asian market could have real legs for an extended run. Now, this is Bloomberg Daybreak Asia, your morning brief on the stories making news from Hong Kong to Singapore and Wall Street. Look for us on your podcast feed every day. On Apple, Spotify,

and anywhere else you get your podcast. You can also listen live each day on Bloomberg eleven three oh in New York, Bloomberg in Washington, Bloomberg one oh six one in Boston, and Bloomberg nine sixty in San Francisco. Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa play Bloomberg eleven Plus listen coast to coast on the Bloomberg Business app, Sirius XM Channel one nineteen, the I Heart Radio app, and on

Bloomberg dot Com. I'm Brian Curtis and I'm Doug Prisoner. Join us again tomorrow for all the news you need to start your day a right here on Bloomberg Daybreak Asia m HM