shery: other top stories this hour -- president biden canceled his australia visit is silly negotiations continue. the white house and congressional leaders are optimistic on getting a deal done within days. the u.s. market gets hit in the final minutes of trading with concerns bankers are still struggling to find common ground and tencent due to report earnings wednesday. it is expected to report its biggest rise in quarterly revenue since 2021. annabelle: i'll be watching this results from tencent closely. baidu and alibaba also do in the coming days. chinese equities have been under pressure with further signs of deterioration coming through for the local economy, and economists deciding to cut expectations for this year. broadly in the session, you can see we are setting up for failure.

mixed trading, most o risk tilted to the downside. still waiting for more clarity on those u.s. debt ceiling talks and we will have details in a moment, but japan really standing out. we are seeing nikkei futures in chicago trading fairly flat. not the most liquid contract, but broadly, as we know, it is that optimism around japanese shares, yesterday closing at 33 year high, at a lot of economists saying this further room to run. some saying we could seed upside -- we could see upside a further 10%. we are treading on a price-to-book ratio of 1.2%. compare that to the s&p 500 at 1.4 percent. 1.8% for the euro stocks, and that tells you can still find pockets of opportunity, even if we are, as i said, at a 33-year high, so certainly a lot more attractive than in the u.s. shery: here in the u.s., we saw

a resilient data in the form of retail sales in this housing market figure. that, plus a combination of more hawkish comments coming from fed officials, not to mention anxiety over the debt ceiling, that pressured markets in the u.s. -- in the new york session, the we see markets a little bit on the upside early in the asia session. interesting, though, the disappointing data we got overnight from china. pressure on oil markets, and we continue to see the price pressuring the asia session, heading toward $70 a barrel, despite the fact the iaea came out and upgraded the global demand forecast, but it was all about the treasury space. we had solid economic data sending yields higher across the curve. the 30-year yield touching the highest level since the banking crisis about early march, so it was not just about what the fed will do but also because we have

that huge pfizer deal. the fourth largest in u.s. history. haidi: president biden and congressional leaders optimistic that a bipartisan deal to raise the debt dealing will be possible within days. speaker kevin mccarthy warning the two sides are still far apart after their second meeting. let's get the details from our global economics correspondent. all of this resulted in president biden having to cancel his trip to australia and papua new guinea, but his progress actually being made? >> it does team there is a new sense of urgency in these talks. the speaker coming out and saying they could reach a deal in the coming days. messaging from congressional leaders saying there seems to be consensus on making sure the u.s. avoids default, suggesting they are certainly going to come towards a deal and officials in the white house and congress will continue talks over the coming days, so it does feel

optimistic, but we're still short on details in terms of where the two sides would come together. we know republicans are looking for deep spending cuts. that is what the caucus there once. they want changes to social welfare spending, in particular. that will be problematic from the democrats' side, so we don't know if there will be copper mice, but a big takeaway, as you say, seems to be the two sides are still talking. at the very least, prospect for an agreement are heightened over the coming days. haidi: how disappointing is it that president biden will not be headed to poplar new guinea orest really a given the administration's push to strengthening those ties? >> i think it has to be a blow to the u.s. policy of trying to win allies in the pacific region. we know the china story is such a central focus of this admission -- of this administration. the u.s. president going to port

moresby would have been unprecedented. would have been an unprecedented gathering of pacific leaders, so undoubtedly, i think it will be seen as a blow to u.s. leadership. the quad talks, at least some of those discussions will go ahead in tokyo anyway. president biden has invited the prime minister of a straley or to visit d.c. at some point in the future, but you have to say it is a direct hit from these debt ceiling talks on going it is another knock to u.s. prestige and influence over the global economy, which is what critics warned would have happened the longer these talks carried on. haidi: fault lines seem to be emerging between fed officials with talks wanting to keep the light on for more hikes. we had both wings on bloomberg

tv today. tell us what exactly they said. kathleen: let's set the table with a hawk, someone who has been consistently hawkish, the president of the cleveland fed was speaking at an event. i start with her because she is unequivocally hawkish. what she said was the data show that fed policy is not yet "sufficiently restrictive." she needs to see more evidence that inflation is still moving lower. now let's bring in the president of the richmond fed, speaking to bloomberg television's michael mckee earlier today. listen to the kind of things he said. to me, he is more of a centrist, the kind of guy often in the middle watching the data to see what happens, but when you listen to what he says, i think he may have become more of a hawk. he says demand is cooling but not yet cool. the job market is still quite hot. he wants to put inflation to bed, as he put it, finally and firmly. let's listen to what he said. >> i do want to learn more about what is happening with all these lagged effects, but i also want

to reduce inflation, and if more increases are what it will take to do that, i'm comfortable doing that. kathleen: he will be watching lagged effects, definitely, but his wording, his since he is ready to hike rates if that is what needs to be done, and he is unequivocal about this, attend to put him more in the hawkish can't. he is, however, waiting to see economic data ahead of the june meeting and of course, what happens with the debt ceiling. if we move onto the president of the federal reserve bank of dallas, she, too, spoke at an event and she things right now that conditions are uncertain and maybe you should travel more slowly and wait to see the impact of banking stress and also rate hikes on the economy. here is what she said at an event, again, looking in particular at what has been going on with banks and what that means for economic inflation. let's move on to austan goolsbee here. >> the data has been that when

you have financial stresses like the bank stresses we are going through now, and when you have big rate increases that take a while to have their full impact, you at least want to take those into account when you are looking at landing the plane. kathleen: of course, that is a singles we, the relatively new president of the chicago fed. i put him in the camp of those who tend to be a bit more dovish. you have to be careful when you are landing to -- landing the plane to think of everything that is on the landscape. finally, the president of the reserve bank of new york, third in line at the fed in terms of impact on policy. he's looking at all the things that are on the table right now, but in the end, he is saying inflation is still too high but moving in the right direction and by the end of the year, it should be a little over 3%. if inflation gets down to a

little over 3% and you have your funds rate at five percent, maybe higher, there's probably no one alive that is not a risk -- no one alive who would argue that is not a restrictive policy. they all agree on waiting to see what happens, but the inclination for john williams seems to be maybe we should pause now. haidi: of course, we are also getting comments out from the fed's singles be talking about a potential soft landing for the economy. we heard a couple of days ago bostick saying he does not see rate cuts until well into 2024, really pushing back at the bets we have seen in markets. a singles be also saying there is just a long ways to go when it comes to the economic outlook

allowing for potential hikes to be on the table. we will continue to watch for that. in the meantime, let's get you to vonnie quinn in new york with first word headlines. vonnie: vudu and fintech -- the two leading international -- cross broker -- cross-border brokerages have been allowing traders to avoid fees. key u.s. lawmakers blame former managers of silicon valley bank and signature bank for the banks' collapse. some lawmakers questioned u.s. watchdogs for not doing more to prevent the turmoil. >> we know your banks were fatally mismanaged.

the next obvious question is -- why? why did you let things get this bad? why did you ignore admonitions from regulators? to that question, too, there's a simple answer, the same answer we find most questions about bank failures. because the executives were getting rich. vonnie: the international energy agency expects global oil demand to climb more than expected thanks to china's post-pandemic rebound. it says world fuel consumption will rise to a record 102 million barrels a day this year with chinese demand hitting an all-time high. the agency also sees oil markets on track to tighten supplies sharply in the second half. global news powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn this is bloomberg. shery: still ahead, we will be joined by goldman sachs' chief japan equity strategist to discuss if the rally could

extend from here. u.s. lawmakers grill svb and signature bank executives in washington, saying the banks were fatally mismanaged. more from the senate hearings coming up. this is bloomberg. ♪ (♪♪) this electric feels different... because it's powered by the most potent source of energy there is ... you.

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>> mr. speaker, you said earlier this week that you are still very far apart. >> we. >> it is possible to get a deal by the end of the week. it is not that difficult to get to an agreement. when you think about the bill we passed, we raised the debt ceiling. we capped future spending. >> i'm postponing the australia portion of the trip and my trip to pop of new guinea in order to

be back for final negotiations with congressional leaders. i spoke today with the prime minister of us trillion a short time ago and let him know what was going on. haidi: house speaker kevin mccarthy and president joe biden talking about the latest when it comes to debt ceiling negotiations, of course, casting a long shadow over market sentiment at this point. our next guest says gold could be a potential hedge in the unlikely event congress fails to increase or suspend the debt ceiling in time. joining us, the investment advisor at edison partners. we're looking at contingency plans at this point because we are seeing that return to havens. >> i think the u.s. situation actually reaching a default is still the less likely scenario. if we take a step back, we have seen treasury secretary janet yellen saying that looking toward that first of june as a potential default rate, so she

is flagging it is a real and present danger, but there is a lot on the line and the situation would suggest they will reach an agreement in time. what it means for investors, we could look at hedges like gold. pimco put out some numbers looking at the last dozen years. equity markets have pulled back on average 6.5% in the month leading up to d-day for a default, so we may see increased volatility. it is clear that whilst it is unlikely, it is not unthinkable, and we are starting to see a bit of volatility around, noting the fixed -- the vix is still close to a 12-month low. volatility is benign. there is a potential for it to increase. the other source for volatility is that obviously, these negotiations are complex. it is likely that both sides will have to make compromise. democrats will likely have to

cut spending in order to get this across, and what is the real impact on that for the economy? it tends to suggest we really will not see a decision until the 11th hour, which tends to make markets a little jittery. the economic outlook tends to be brighter outside the u.s. at the moment. there's still hope we see some pretty strong growth coming out of fraud or asia, perhaps even a stronger recovery eventually for china. how does that impact australian assets? >> just on that point about china, we are still optimistic. i think if anything, yesterday just shows us that -- the word being thrown around is patchy economic recovery, but it shows two parts of an economic recovery where as investors might have been hoping for a debt-field stimulus coming from the government, but we are seeing it is more likely to be a self sustained consumer-led recovery. there are still positive

numbers. obviously, the industrial production number was almost half, which shows we are seeing risk on that infrastructure manufacturing reopening and more on consumer sales. we are so positive on the reopening story, short session certainly on a shorter-term view. i think china is more challenged if you look to the medium and longer-term outlook with things like demographics and productivity come into play, but certainly, that reopening trend and the 12-month view we are still positive on. haidi: with uncertainty and global risks, i have seen traders hedging with everything from gold, even the swiss franc, but also even the brazilian real. how you position in this environment? >> this environment is a tricky one because there's lots of potential outcomes from a macroeconomic view depending on things like where we get to with these debt ceiling negotiations. we have even seen another hedge.

another impact we have seen on short-term treasury yields where the yield has jumped by percentage points just come the first of june. markets are reacting, but as i mentioned, volatility is still fairly benign in this environment. given that the wide variation of outcomes that we are looking at, one of the best things -- you can look at currencies, like you mentioned, but one of the best things we are looking at for investors is really making sure that you are well diversified for whatever may transpire as well as at the margins, taking opportunities to have some cash, hold cash, and ready to deploy that when we see potentially heightened volatility, which may come as we lead up to these debt negotiations. haidi: we in that the governing season as well with tencent and alibaba reporting earnings. as good as performance haseen

we're still down about 70% from the peak when it comes to these tech stocks. is there anything there you like? >> again, if we go back to where we are seeing the main drivers for this recovery, it certainly is coming from that consumption-led side of the economy where we know in china that it is so broad and there is a vast amount of accumulated savings from the lockdown, so essentially a lot of firepower consumers are ready to spend. something like trip.com that has, despite the travails of the last 12 months, the stock has outperformed. it is up 55%. they will be a clear beneficiary. we are seeing domestic hotel bookings and online travel has already surpassed pre-covid levels, so 2019 levels, and we are seeing international travel also picking up despite there being some restrictions on

flight capacity at the moment. trip.com certainly one we think will be a beneficiary. you mentioned alibaba as well, which we think is certainly one to look at. the breakdown of divisions and how that transpires and potentially ipo's will be something we are watching out for. haidi: always great to have you with us. to get a roundup of the stories you need to know, get your day going on today's edition of daybreak. you can always customize this settings as well so you just get the news on the industries and asset classes that matter to you. this is bloomberg. ♪

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where we are within the regional banking sector, and we need to bring stability to that sector as rapidly as possible. >> i'm becoming more concerned. however, one of the problems is concerned becomes contagious, and contagious in some really detrimental ways. >> i actually think we are probably past this immediate storm. if you look at your community banks and most of your regional banks, they are in good shape. haidi: senators grill executives of collapsed banks. su keenan joins us with more on the hearing. of course, we are focused on the former of svb who made, let, $10 million, but of course, the bank has failed. su: yeah, it is not a good place to be for a failed ceo or chairman of the bank before a senate hearing like this. you had senator warren -- of course, elizabeth warren, who is

known to be difficult in her line of questioning -- really zeroing in on svb's former ceo greg becker accountability. you also had scott shea, who served as signature bank. those were among the key testimonies, and they were literally on the hot seat. warren at one point demanding the accountability, that becker give money back and then saying, "you're not going to give a nickelback, are you -- a nickel back, are you?" and then she answered herself, no. lawmakers asked, why did you let things get this bad. let's listen to what becker had to say. >> i believe that svb's failure was brought about by a series of unprecedented events. su: x svb ceo becker got worse

perhaps of the criticism. a big question lawmakers had is how he sold $3.6 million of company stock with less than two weeks before the bank actually collapsed. he also, as mentioned, was pressured to give his $10 million a year in compensation back. he would not commit to doing that, though he said he will work with regulators to examine some of the money he received and perhaps look at giving some of it back would be the idea. haidi: the fed and ftse were also in the hot seat. su: regulators were right there. lawmakers really coming down on regulators on the lack of oversight. again, what were they doing that they did not see these banks starting to struggle and ultimately they'll. the fbi see chair, the national credit union administrator there

testifying, and interestingly, the reports from the fed and fdic that had come out late last month said mismanagement was the root cause of the bank failures, but government officials acknowledged regulators bear a big part of the responsibility. haidi: su keenan with the latest. up next, we will be previewing tencent earnings. our next guest says a rebound in china's gaming sector is willing chinese growth. this is bloomberg. ♪

>> the fed president is it to be convinced that inflation has

been defeated and is willing to raise rates if needed. he spoke to us at the annual financial markets conference. >> demand is cooling but it's not yet cold. that's what you saw today. we had this spike on all of the demand metrics in january but february, march, april are coming in flat net of inflation, for example, in retail sales than they are. i think that's just a sign that the combination of all these things, rate hikes eroding consumer savings, leaning fiscal stimulus are all affecting demand and the way that you would think. >> we've come down from 9% inflation to around 5%. the low hanging fruit has been picked, as they say. do you think you still need more restraint to get down or at least get us moving back down towards sheer 2% target? >> there is a plausible story that combines the things we were talking about and add credit

tightening to say they will bring demand down and in time bring inflation down. i think that's a plausible story. for me i'm still looking to be convinced. i see core inflation or trimming inflation in the month-to-month .4% range that implies operating at an annual rate of around five. and i'm still looking to be convinced that demand would come down and that would bring inflation down. at a place that won't erode expectations. >> what then becomes the tactic you would use? do you think you would need to go into the june meeting leaning towards a rate increase or do you want to pause, see what happens and start again even though some people have said you don't want that stop/start? >> i like the optionality implied in the memorandum statement we did in the last meeting. in this time, even this month, we will have a full month worth of data coming. you have questions about the debt ceiling, what impact that might have. you have questions about credit

tightening and how significant that might be. i think you gives you a time and optionality to say, there still more we need to do, so let's do more, or a let's wait a bit. i think you have optionality either way. >> so we put you down as undecided? >> put me down as tracking information, tracking credit tightening and we will make a call the closer we get. >> when you put it together, how would you describe the economy question mark is the soft landing a good economy? you said most people were forecasting a downturn, but what do you see? >> there's a plausible story that we get inflation down due to actions taken in the past both by hours and by others. like i said, i'm still looking to be convinced on that story and it may take more. >> when you are looking to be convinced, do you think it's a good idea to stop for a while and start again because that

sends mixed signals according to german powell, or is it better to be cautious because you have done so much and you don't know the full effect of tightening on the economy? >> i think the message said in the last statement was one of optionality. it wasn't one of a pause or a peak. it wasn't one of a predetermined peak that we would increase when we didn't have to. uncertainty is high, environmental certainty and the impact that it had today, the lagged effects of rate increases. in the context of that uncertainty, and a path that is conscious but not stuck would be a good way to put it. so, i do want to learn more about what's happening with all these lagged effects but i also want to reduce inflation, and this more increases are what's necessary to do that, i'm comfortable to do it. shery: wichman -- richmond fed president. let's bring back annabelle with

a check of the markets. given the conditions, there seems to be more divergence between what fed officials are thinking. >> -- annabelle: yes, that interview was on the sideline of the atlanta fed's annual financial markets conference and we hear more officials speaking in a moderated discussion this hour, including the president, rafael bostic. in some of the key headlines coming out of that so far will essentially echo that there is still a ways to go to try to conquer inflation, but what sort of damage and affects this is having on the economy. how further to tightening needs to go. is it a debate amongst partners on the committee? but there is a potential in the economy for a soft landing, but bostic saying, we are not at the hard part just yet, there is still the lagged effect of tightening that will take place. we are seeing u.s. futures turning positive and we also are seeing that dollar still holding onto its gains, which is

something that could weigh on asian stocks, even though we see nikkei futures pointing to further gains. we have been tracking the moves in the topics sitting at a 33 year high. bond yields are also ticking high and very much in line what we had with treasuries and the price session. let's change now because when you speak about the moves we have seen higher for treasury yields, it's interesting to know what's happening in the tech sector, given that the nasdaq has been outperforming in the face of rising yields. this chart takes a look at the nasdaq on an equal weight versus the market cap weight basis so you can actually see it really tells a story that is just a handful of stocks that have been driving the performance of the nasdaq overall. when you look at this basis, we are at the lowest point for that since may 2020 two, so some investors in the market say that really, when it's built on a handful of names, it can easily dissipate. tech in focus not just in the u.s., but in china as well.

shery: especially the result coming out of tencent expected to post its biggest rising quarterly revenue since 2021. the next guest maintains the outperformed recommendation on the company. joining us in our singapore studio's our senior credit analyst at credit sites. thank you for joining us, we have seen the rican -- recent cell of dollar bond, how attractive an entry point is this for tencent? >> thank you for having me, we are constructive on the outlook of the company. we think revenue will accelerate not only in the first quarter but also in the last three quarters of the year because of revenue is recovering and adds revenue is picking up. from a credit angle we think that company's balance sheet is very strong. we are expecting cash flow generation to also strengthen and the rest of the year. but of course, if you are

looking at the valuation, it is not cheap. if you compare it with last year. i think the investors have to think about whether you want to get exposure into the sector at this moment. shery: especially when china's gaming market seems to still remain pretty weak, is that something of a challenge for tencent going forward? >> i think the company is quite positive in the business because the domestic gaming license approval as normal license last year. the company is expecting a lot of new games getting launched in the rest of the year, but of course this is going to be gradual and the company has said they will gradually launch the games into 2024. so we are not going to see an explosive growth in this business, but more like a gradual recovery. haidi: how much benefit do you see talking about this increase collaboration with the government and regulators? is this something that will be

key for companies like tencent? >> i think the positive regulatory backdrop is very important for the sector, what we see starts from the force -- first quarter last year, the regulatory stance has turned very friendly. we are seeing the conclusion of the probe into dd global in the reorganization of alibaba. we think the domestic tax bracket is going to stay very firmly over the next six to 12 months, which is also positive for the chinese dollar bonds. of course we are also seeing the tech knowledge he companies are getting more collaborative. this is creating a quite positive feedback loop for the implementation of the tax -- tax regulations. haidi: we also see a positive feedback loop when it comes to how investors are viewing the alibaba companies. for example, the announced investments in the ipo's are all

being analyzed at the moment. potentially in the short to medium-term. are you very encouraged by the structural changes made? >> i think the reorganization really shows the companies willingness to collaborate with the regulator. it is also actively addressing some of the regulatory concerns in terms of antitrust. it is also a signal that the company has decentralize the decision-making process, which is a direction that the company wants the regulator to go to. from a credit investment point, we are not seeing immediate financial impact, but we think the listing of the subsidiaries in the future could reduce a chance of cash burning for the company, which is also credit positive. shery: is the pie big enough for all of these companies to compete in different sectors? how strong is competition right now in the market? >> yes, you are right, we are

also expecting competition is going to marginally intensify in the sector in 2023 after post-covid reopening, but we are not overly concerned if we look at the financials and guidance from the management of jd, mates juan and alibaba. they will ramp up the expenses for channel distribution, but they are sharp focus on profitability. a lot of companies say they are going to cut down in narrow losses at some of the new business segments. so we are going to see some margin pressure, but we don't think this is going to be catastrophic. haidi: always great to have you with us, senior credit analyst at credit sites. let's get to vonnie quinn. vonnie: president biden is shortening his trip to asia as u.s. debt ceiling talks drag on. biden will no longer visit

australia nor papa new guinea after the g7 summit in japan. you will instead meet with leaders in tokyo after the hiroshima summit. republicans have criticized the president for his upcoming travel plans while debt negotiations continue. president biden: we are in the australian portion of the trip and my stop and papa new guinea. in order to be back for the final negotiations with congressional leaders. i spoke today with the prime minister of australia, and a short time ago we let him know what was going on. vonnie: the creator of chat gpt are calling on u.s. senators tomorrow heavily regulate artificial intelligence technologies. open a eyes sam told a subcommittee the u.s. should license advanced ai models. christina montgomery says regulation must focus on the risks. senators noted their congressional process often lags behind the pace of technology advancements. hong kong more than tripled the number of professions whose

members can apply for its talent programs. the number of occupation categories that spanned nine industries go from 40 to 51. digital marketing and ai specialists are among the job titles. the city saw its working population declined two point 4% last year. the biggest drop since 1985. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. shery: coming up next, goldman sachs explains why they think the bull run on japanese equities could continue. we have more from their chief japan equity strategist bruce kirk in just a moment. this is bloomberg. ♪

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haidi: japan is fast becoming the most favored develop market. conviction is growing that the rally taking the topix index to its highest since august 1990 will only accelerate. strategist say the case for bull run a solid and they are set to boost valuation, looser monetary policies. let's bring in bruce kirk, chief japan equity strategist at goldman sachs. is a lot of momentum behind this rally, but if you take a look at valuations at the moment, there are fundamental arguments for their being further to go?

bruce: definitely. good morning, thank you for having me back. it's a fascinating time to be looking at the japanese equity market at the moment. i think what we are seeing is almost like a perfect alignment in -- between the interests of the government, the regulator, the exchange, and also the investors, both foreign and domestic. one of the focuses is around corporate governance reform and that in turn is driving corporate's to do things that were may be thought impossible to achieve, even 5, 6 years ago. so i think this really does have the potential to develop into one of these policy driven sustainable for markets that we get in japan once a decade. abenomics being the last example of that.

but i think, in the initial stages at least, with foreign buying, it's really going to be focused on quite a limited number of companies, and that's what going to make it an interesting stock pickers market. i think the focus areas will be around value, quality and liquidity. haidi: what's also been interesting is looking out the flow of coming in from overseas buyers and i do wonder how much of this is the warren buffett effect given that we have seen that positioning from the u.s. buyers over the last few weeks and months. but over the longer-term term do you expect an impact to be played by these foreign investors? bruce: yes, if you look historically, if you look at the bull markets we've had in japan since the end of the bubble in the late 1980's, it has always been that there has been a pattern where there has been a structural change, a policy

change, which has brought in foreign investors, and that has pushed the market higher. i think this time around, there's a valuation argument there given that half of the market is trading below book value, which is an area that the tokyo stock exchange is definitely focused on at the moment. and it just the fact that you are actually getting, finally, corporate governance change in japan. this is been smoldering there since at least 2015, 2016, but we are now finally starting to see the results of that. the potential catalyst or the reason why we are getting the focus now, i think part of it is geopolitical and part is economic given that we are in an environment where we are suddenly coming out of deflation after 30 years of it. shery: to that point, if we do see a boj policy tweet soon, what will that mean for the

japanese yen and subsequently for the markets? i understand japan is not the expert oriented economy that it used to be, but how meaningful would that be? bruce: bruce: -- roos: i think if you go back to last year, the start of this year, if you go back to when investors were speaking about why cc, the normalization of monetary policy, that was seen within a narrow timeframe, given that we now have a new governor at the boj who seems to be more patient or more data driven in terms of looking at the numbers that come out of the economy. i think that's probably a more longer-term story than it was earlier this year. and as a result, with the dollar yen at 136 at the moment, that is very weak by historical standards, but some gradual

strengthening over the next year or so i think would be -- it's not going to impact the competitiveness of japan. and if you are a u.s. investor investing in dollars in the japanese market and it gives you a little bit of an additional tailwind as well. shery: we know the japanese corporate's tend to be very conservative. we saw the likes of megabanks being profitable, but not necessarily adding any new buybacks. is this going to be an issue going forward? bruce: if you look at the number of buybacks we've had so far this month, in terms of the total value of buybacks, it's pretty much on par with what we had this time last year. so, if you look at the number of companies that have actually announced buybacks, this time around it's 150 and last year was about 250.

you are going to get more concentration in terms of investor focus. they will be looking for companies that have a decent discount book value, which is about half of the market, but they will also be focused on liquidity. at the moment there's over 200 stocks in japan that trade over $20 million a day, which is sort of the cut off point for a large of large funds and platforms. so it's looking at the intersection between value and liquidity. quality angle that will get them through an investment meeting. haidi: we are getting the gtp -- gdp numbers, the preliminary. they adjusted quarter on quarter

with a gain of 1.6 percent. that is much stronger than expectations of 8/10 of a percent. the nominal seasonally adjusted numbers are coming in at 1.7%. always watching that gtv -- gdp deflator. that's a 2% when it comes to private consumption and business spending we see a bead on both of those elements as net experts. the contribution percentage rise to gdp was a contraction of 3/10 of a percent. as well as weakening. a bit of a mixed pictures. do you see this as playing through to policy normalization that we see from the bank of japan is another way that we can

get gains from japanese equities? bruce: definitely. i think wage growth is something that people have obviously been focused on over the last six months or so. i think when we started at the start of this to negotiations, up to november of last year, there was very little expectation built into the chances for the government and the unions to push substantial wage growth in japan. we have actually seen that. we've seen the highest wage growth since the early 1990's. we have inflation coming back into the market. so with tourism coming back as well, i think the expectations for a virtuous cycle of price hikes and wage growth driving strong domestic demand, when you add that into the idiosyncratic

reform push from the tsc in terms of boosting corporate value, i think all of that together gives you multiple ways to win on japan at the moment. haidi: really great to have a with us, we appreciate your time. chief japan equity strategist at goldman sachs. we have much more to come on daybreak asia. this is bloomberg. ♪

>> take a look our setting up for the asian market open, we have wall street falling today, a bit of a mixed signal coming in fed officials. we heard from rafael bostic saying that he's still a ways to go from defeating inflation, saying the impact of the fed's rate hikes are still to come. we will be watching. in the japan open, whether topix index can actually maintain that 1990 hi and we've been watching snp futures gaining a 10th of 1%. market opens in sydney, seoul and tokyo are next. this is bloomberg. ♪

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shery: this is daybreak asia, we

are counting down the ages major market open after we saw losses on wall street. we had concerns about the debt ceiling negotiations. a little bit of mixed messaging coming from fed officials and strong eco-data sending treasury yields higher. haidi: we have a mixed picture when it comes to japan gdp, whether we see this continuing to add fuel to the rally that we've seen, we just spoke to goldman sachs, really talking about how they see, and a lot of people starting to see that this is the side of potentially a longer -- of equities. annabelle: we could see further upside of 10% from here, but yes, that gdp coming in on 1.6% on annualized basis. a gain of 8%, but the open now of japan, south korea and australia. we can also focus on what's coming through in the u.s., given that focus on the fed and also the debt ceiling talks in

president biden, congressional leaders are voicing cautious optimism of a bipartisan deal to raise the debt ceiling saying it could be possible within a few days, warning the two sides remain far part at this point. a fed speakers and focus, given we have the likes of bostic saying we haven't yet seen the full effects inflation will fall fast. some say it could start to receive quite quickly in the second half of 2023. as the topic still sitting at a 33 year high in some of the market projecting we could see gains of another 10% to go. it really does come down at a few different factors deciding coming through in the japanese economy looking better than what we see in the u.s. and europe is what we just saw that gdp data. other factors including from the corporate's issuing share buybacks for instance, strong

cap explants coming through with fairly solid -- cap explants coming through with fairly solid earnings. korea is one, we are seeing a give up a bit of gains. that is sort of an line what we saw on the u.s. session. if you see the s&p 500 and futures turning positive, but we will see that focus coming back onto the korean won as a risk asset barometer. we are seeing perhaps it could continue to be a way down by the noise around the u.s. debt ceiling talks and inflation concerns. export saying week. that is a currency that is sensitive to what's happening in the chinese economy, given that the weaker data coming through on the activity readings on tuesday is not a great outlet. let's change on, because in australia the debt ceiling is very much in focus, but from a

different perspective end as a result of negotiations, biden has canceled his trips that were planned to australia and papa new guinea, looking to reschedule that at a later point, but keeping an eye on what happens with brent crude, a little bit under pressure at the start. different factors around debt ceiling talks weighing get stronger u.s. data, but a lot of the focus is still coming down to china, but still that focus on japan and as i said, the topix and a 33 year high. haidi: they are saying valuations in japan still remain attractive. the investment advisor of bmp wealth management. and grace, there's projection of 10% upside when it comes to japanese equities. when it comes to valuations at the moment, there does still seem to be room to run. are you convinced by the broader almost virtuous cycle. they could drive a big part of the early bull market.

>> we remain positive on the japanese equities, yes, topix hitting 33 years hi, but when we look at valuations, for example, japan markets, trading 13 times, 14 times versus, for example, msci, 16 times of the u.s. market, 18 times. in terms of valuations, the japan market is still very attractive. so we still see a lot of upside. i think most important is for the catalyst. the important catalyst is the governance reform. and obviously, a lot of investors looking to see a lot of value of a lot of the companies, especially we know that the companies are below one

time that make the disclosure of how they are going to improve their profitability. and also the shareholder returns, we've been seeing improvement like more announcement of buybacks and also the improving payout rate. >> there is also strong correlation. but the correlation when it comes to the u.s. economy and u.s. stocks as well, are the developments when it comes to volatility in the u.s. something to watch out for in the second half are japanese equities? particularly as the corporate reform structural changes will take time to play out? >> i think that's still the right direction. i think they are gathering momentum, in terms of the

economy when we see the u.s. economy slowing down in japan's economy. and also the momentum of economic recovery is actually pretty good. so i think for japan it's also a very diversification an investors portfolios. furthermore, we think a lot of investors want to play the china reopening story. but they hesitated in chinese stocks because of the geopolitical tensions. but for japanese stocks, there could be benefits from the china reopening stories. for now, evaluations are very attractive. a lot of investors may want to play china reopening stories through european luxury, but a cause for some of the luxury

stocks are already hitting record high. but for japanese stocks, a lot of those light industrial stocks actually played to the china story. shery: we have been talking about the china reopening trade but it the same time investors are not necessarily wanting to touch china directly, other than japan, are there any other markets that are seeing a little bit of upside from this? >> yes, the industrials, we were talking a lot about the companies they are they want to upgrade automation. the automotive system companies and auto parts components companies. it is an interesting place to play the japanese paying china. shery: do you like emerging markets? that's another way we are thinking they will see upsides from china doing well. >> emerging markets are positive

. given valuations also very reasonable and for emerging markets they could benefit from the china reopening's. we see the dollar weakening trend in that tends to be a positive factor to the emerging markets. shery: we are just a few minutes into the session and career, japan and i'll show you. what are you watching? annabelle: a few different sectors and focus at the side of trade. we are watching and giving the moves that we saw in oil and the price session and it has come online today looking weaker. the question for investors is what to focus on. at the same time it's really the signals of weakness that are coming through into the chinese

economy that is leaving traders a little bit hesitant to continue. so we are seeing some losses here particularly in those japanese names of the start of trade. it's really a name we have been following across the we given that there has been a lot of debate in the market, we knew we would see some sort of sale, through from the company. that has now been confirmed. the plans to issue new shares about a third of its market cap. it is a huge sale coming through. we have seen pressure on the stock. at some analysts out there saying this is really an opportunity to buy because they are doing a large equity offering. in terms of financing and expenses for its mobile business, but that slide is now being extended because we are off more than 15% in the last few days.

haidi: let's get to vonnie quinn's with the first word headlines. vonnie: key u.s. lawmakers have blamed former senior managers that silicone bank for the lender collapse. seb salek ceo drew criticism for selling $3.6 million worth of company stock, less than two weeks before they disposed extensive losses. some losses also questioned u.s. watchdogs to prevent the turmoil. >> what if you ignore admissions from regulators. the simple answer in the same answer we find to most questions about big bank failures because see executives are getting rich. vonnie: the international agency expects global oil to climb things to the post-pandemic rebound.

the iea says world fuel consumption will rise by 2.2 million barrels a day to a record 102 million barrels a year with chinese demand hitting an all-time high. the agency also sees oil markets to tighten supply sharply in the second half. india's crucial monsoon season may arrive later than usual this year. this delays from scorching heaps and potentially affects the planting of some major crops. india's meteorological department expects a monsoon to reach southern -- on june 4 instead of june 1. it provides 75% of india's annual rainfall and eric gates over half of its farmland. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. shery: coming up, tencent is expected to report its highest revenue growth in over a year. previous earnings later this year this hour. the latest on the debt ceiling standoff in washington as leaders voice cautious optimism

after talks. this is bloomberg. ♪

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business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh >> you said earlier this week that you are still very far apart. >> it's possible to get a deal by the end of the week. it's not that difficult to get to an agreement. when you think about limits save row, the bill we passed, we raise the debt ceiling, we capped future spendings. president biden: i'm postponing the australia portion of the trip and my stop in papa new guinea in order to get back for final negotiations with congressional leaders. i spoke today with prime minister albany's of australia a short time ago and let him know what was going on.

haidi: house speaker kevin mccarthy and president joe biden speaking about the latest talks on the debt ceiling. let's get more when it comes to the u.s. debt deadlock. breaking news with the managing editor. have we moved much closer? how much further is this? i realize i'm asking this as though you have a crystal ball in your hands. >> empty hands, i'm really sorry. i'll bring it next time, but i will say, they are closer now than they were before. i think the most tangible thing that came out of this is the appointing of very serious negotiators. i think their previous staff level negotiators negotiations were quite getting very far. so on the white house, you're talking about steve ricchetti. this is somebody who republicans have an esteem and is someone who is considered very, very serious.

on the republican side, the representative is somebody close to mccarthy is somebody in mccarthy's office. so that's the construct of what the final negotiating table is. it's basically a biden/mccarthy negotiation at this point. it does seem like it's possible to get to a deal. we've talked before. there's a framework of things that are available. there are off ramps available. you have to take it. the second thing is how do you get this soul. that's a critical part of why joe biden may be skipping the backpack up -- back half of his asia trip to our shelley amp up and new guinea. once you get something done, let's say it does get done and biden was saying that he might be around for the end of the negotiations at the end of next week, once that gets done, you have to sell it and there's not much time left before june 1. and so, whatever you get done,

congress has to vote. shery: this asia trip was supposed to be very meaningful for president biden, right? it was a way to strengthen ties with asia to really counter china's influence. how big of an influence will this cancellation have? derek: i think there will be u.s. diplomats, particularly in the u.s. working hard to try to contain the damage that this will do. certainly, look, a lot of this trip was about, even if it's not openly said, but it's a lot about countering a rise in china. the u.s. had built the trip to papa new guinea to talk with specific leaders as historic, the whole thing was built with the idea that as the u.s. showing how important the pacific is to it diplomatically. the thing that they will really hope is that this doesn't show how big the pacific is to the united states diplomatically, that people will take the

intention rather than the actual action. there is going to be, i would imagine, delight within beijing, we will see how they respond later on, but the u.s. has been trying to project that it is a pacific -- pacific power. it's historically a pacific power, it will continue to be a pacific power. the idea that joe biden is only showing up to part of this pacific itinerary is going to have some ramifications in the u.s. will have to live with that. shery: bloomberg's breaking news managing editor. the fault lines seem to be emerging between fed officials with the hawkish camp tilting toward at least one more rate hike to put a lid on inflation and doves were reluctant to run the risk of over tightening and bloomberg global economics and policy editor kathleen hays is here with the latest, what do we hear. kathleen: we heard a lot of fed speak, that's for sure, and the question now is, as i think you are pointing out, where are they, is there a divide, how big

is it? i don't think the divide is huge. everyone realizes they're closer to any rate hikes, but let's start with loretta. she's been consistently hawkish, i would say she is still hawkish even though she seems to be open to one more hike for now it's too high. inflation is too high to pause. she needs to see more evidence and inflation is still moving down. president has been a sensuous kind of guy, being open to whatever needs to be done, but i think his language, particularly today when he spoke to bloomberg television, he thinks the job market is quite hot, demanded schooling, he needs to see that to stop packing rates, but it's not yet cold and he wants to put inflation to bed finally and firmly but he's open to watching it all. >> gradual policy adjustments can be helpful, financial conditions can sometimes deteriorate nonlinear early to

the broader economy, but the risk of a nonlinear reaction camming mitigated by raising interest rates and smaller and less frequent steps while using other dimensions of monetary policy to maintain restrictive financial conditions. >> lori logan, we let you hear what she has to say because she is seeming more dovish. she's looking at the fact that there is stress expressed in the banking system. that can lead to tighter credit conditions. of course, austin go speak, president of chicago fed. gloria's head of the dallas fed, he put it out very clearly when he spoke today that he is concerned about the fact there has been 500 basis point worth of rate hikes, they don't really know how the tighter credit conditions are going to play out, so i think we can say he's more in the dovish camp but still open to whatever needs to be done. lori logan steen is clearly a dove, clearly a hawk. if jim bullard labisierre from the saint louis fat, we would

put him in the hawkish camp. in four weeks we will have another fed meeting, this will be debated, this is out we will see them all sitting down to the table. as they practically all point out, to more inflation reports, another jobs report could make a lot of difference. haidi: kathleen hays with the chicago fed president says it's too premature to talk about cutting interest rates at the june meeting. in this exclusive conversation with bloomberg he cited a need for more data besides jobs and wages. >> i don't know if we put enough restraint. that's what we've got to watch. inflation is down and continues to make progress. it's not as fast as we wanted it to or expected it to be. and therein lies that that's the note of the issue of can you get it down more without starting a recession because we have a dual landing. we have to look at employment

and inflation by law, both, not just one. i think you've seen goods prices already come down as we shift back to spending our money on services, housing inflation hasn't come down yet, but we expected to because of the components that kind of moves with a lag. and then this question of services has been more persistent than we thought it would be. but you see prices coming down in that space as well. so, i think those things plus the fact that inflation expectations have remained pretty well anchored, tells you there is at least -- there are at least some forces that are going to keep moving in that direction. >> your background suggests that you care a lot about employment. obviously it is one of the mandates, as you have mentioned, do you think that the data we see now, and you could include retail sales today, industrial

production, suggests that the soft landing scenario is any stronger than it had been? >> any more likely? i've been definitely hopeful and that there is one group that looks at the labor market and that its prized measure of tightness is the vacancies to unemployment ratio, and that ratio hit record highs, and it has come down a lot. the level is still higher that it was before, but it has come down in a way that hasn't tanked the labor market, the danger is, if you get a recession and he tried to land the plane nose-down, tends to be that the labor markets when they deteriorate, they deteriorate rapidly, unemployment rate goes way up, you see layoffs and

everybody is trying to avoid that. shery: chicago fed president austin goolsby. if you missed our top stories go to today's edition of get -- of daybreak, bloomberg subscribers go to dayb on terminals and also available on mobile in the bloomberg anywhere app, you can customize your settings so you only get the news on the industries and assets that you care about. this is bloomberg. ♪

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constant contact delivers the marketing tools your small business needs to keep up, excel, and grow. constant contact. helping the small stand tall. shery: is a quick check of the latest business flash headlines. pfizer said to be selling $31 billion of debt to fund its purchase of siege and. the pharmaceutical giant raked in over $85 billion in orders for the eight part investment grade deal. the bonsall marks the largest debt financing for merger acquisition this year and is

also the fourth largest in u.s. history. sees u.s. limited list of shares dropped close to 18% after posting earnings that missed estimates. the singapore-based internet firm reported a second consecutive quarterly profit, but revenue only grew 5% in its gaming sales slumped 43%. they have been drastically cutting costs, a stark shift from its previous stance in spending for global expansion. haidi: take a look at futures in europe opening at the moment. of course we continue to watch the impact of these resurfaced recession fees on germany. investors confidence when it comes to the german market has been waiting for a third month and they are reigniting concerns that we could see potentially a mild recession. they gauge of expectations from the answer to falling just over 10% in may from a positive reading in april. european stocks in the previous

session falling, looking to extend those declines as well, snapping those two days of the clients with the lack of progress we saw on the u.s. debt ceiling progress with downward data suggested that further softening. performing a little bit better than what we see when it comes euro stocks, 50 futures off by a quarter of 1%. we are watching the safe haven flows into currencies. more to come here on daybreak asia, this is bloomberg. ♪ when i was his age, we had to be inside to watch live sports. but with xfinity, we get the fastest mobile service and can stream down the street or around the block! hey, can you be less sister, more car? all right, let's get this over with. switch to xfinity mobile and get the best price for 2 lines of unlimited. just $30 a line per month.

i should get paid more for this. you get paid when you win. from xfinity. home of the 10g network. hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, i said, "yeah, whatever. there's no way this works like this." and threw it to the side. a couple weeks later, i seen it again after getting not so pleasant news from my physician. i was 424 pounds, and my doctor was recommending weight loss surgery. to avoid the surgery, i had to make a change. so i decided to go with golo and it's changed my life. when i first started golo and taking release, my cravings, they went away. and i was so surprised. you feel that your body is working and functioning the way it should be and you feel energized. golo has improved my life in so many ways. i'm able to stand and actually make dinner. i'm able to clean my house. i'm able to do just simple tasks that a lot of people call simple, but when you're extremely heavy they're not so simple.

golo is real and when you take release and follow the plan, it works. shery: we have breaking news out of singapore, we are seeing the nonoil domestic export numbers

coming in for the month of april. month on month growth of two point 7%. the expectation was for a contraction. still, this is pretty weak considering we are were growing at 80% in the previous month. when it comes to the year on year numbers, it's also a contraction of 9.8% with largely contraction than what was expected. and also accelerating contraction from the previous month. electronic exports as a contraction of more than 23% -23.3% in the month of april, we are talking about a consecutive months of contraction for those electronic exports, and we have seen singapore reeling from external demand, weakening, and again, we are seeing some muted numbers and contraction territory year on year for shipments. although the month on month is now turning positive. let's turn to annabelle for a broader check of the markets. annabelle: it's interesting when you compare what's happening in

singapore and other economies versus japan because here the outlook is looking a little bit brighter. we just had those gdp numbers out at the end of the last hour and on an annualized basis we saw the economy expanding 1.6% in the first quarter. when you put that into perspective that is more than twice what economists had been predicting in their forecast. so, certainly one set of data that the boj will be watching closely. perhaps gives the impetus to really think whether it needs to shift its policy settings sooner rather than changing. if it's something that will put downward pressure on japanese bonds, and also we do see the yen looking fairly flat here, but still something according to fluctuations in the currency. this expectation of whether the boj will be forced to pivoted settings. in terms of what it means for stocks but when you do see weakness in the japanese currency, it is something that can build into the gains for the topics, we are seeing it move hi

extending the outperformance at levels we haven't seen since 1990, certainly more strength to come based on what we are hearing so far corporate guidance. a lot of gains coming through, share buybacks and focus. the topix is outpacing the msci asia-pacific index, which is sitting fairly flat. haidi: tencent is one to watch, especially the biggest rise in quarterly revenue since 2021 thanks to the gradual recovery in spending on advertising. let's bring in our markets reporters joining us out of hong kong. what are investors looking for in these earnings? >> i think investors are expecting around 8% revenue growth for tencent this quarter, which is much faster then jd.com, which reported record low revenue gross last week and also alibaba, which expected to report around 3% this thursday. i think people are still more

bullish on sent recovery versus its peers because they have gradual improvements, for example in their fintech this is , online advertising, and the online gaming picnic for seasonality and seasonal recovery. shery: what does it mean for the stock price? >> tencent peers of been through a lot. recovery of january. i think markets are really looking forward to things and one is a recovery in the risk appetite, which can be driven by, for example, easing geopolitical tensions and also the meaningful improvement in the chinese economic recovery. i think the second thing is, for tencent itself, more company specific drivers, for example,

the internalization of tencent business, for example, there is some blockbuster gains in their pipelines, which can be the next catalyst. haidi: bloomberg's china markets reporter joining us from hong kong. china's online brokerages say they will be removing their trading platforms from stores in mainland china, our finance editor joins us now for more, what do we know here? adam: what we know is that brokers are being forced to remove their apps from the stores, so existing clients can still trade, that's been the case and continues to be the case but this is about new clients not being able to come on board and use the app. so of course the timing of this is not coincidental, we've seen this gradual push to rein in

some of these outflows of capital that china is looking like they are increasingly worried about. we've seen demonstrable evidence of that capital outflow problem increasingly getting to be a problem for authorities. so it shows that there's clearly a lot of concern around that and i think that's one key factor to hone in on. you remember from an investment point of view, if you are an owner of destocked's, they did sell off high on the news. they did recoup a lot of that during the session and i think that shows you this was a really huge surprise, a lot of investors in the space understand that framework that china has now for china wanting to restrict activity in this area. at the end of the day, not a huge surprise so we did see a rally from some of those stocks in the lows. clearly it's an issue authorities are taking very seriously. shery: this is a reflection of

-- haidi: we seem to have lost her for a minute. but is this a reflection of some of the more volatility that we might come to expect from regulatory changes. there has been about -- a lot of pressure on the ability of foreign investors to have access data or due diligence. >> all the news in the last couple of weeks around the expert networks that we have seen. it's a bigger story, isn't it? it's about how regulators there and authorities are trying to put a few holes in the. they are trying to rein in this activity and they are being very specific about targeting specific areas so it's all part of the bigger picture. and of course, if you are an existing user, in this case, you are still able to go about your business as usual, trading is

fine, it's about not bringing on new customers and not opening new avenues of revenue. that's what we see with brokers, they look outside the domestic market more. they are looking to other areas outside of china where they can see some growth. of course that's a prudent thing to be doing given the crackdown at home. shery: let's now gets a vonnie quinn with the first word headlines, vonnie: president biden is schoening's trip to asia as u.s. debt ceiling helps drag on. biden will no longer bizarre schiller or papa new guinea after the g7 summit. he plans to meet with quad leaders in tokyo after the hiroshima summit. republicans criticize the president for his travel plans while debt negotiations continue. president biden: i'm postponing the australia portion of the trip and i stop and papa new guinea, in order to be back for the final negotiations with congressional leaders. i spoke today with the prime minister of australia and

him know what was going on. jp morgan is unlikely to purchase more lenders struggling to the turmoil. at the bank's annual meeting he said the banking industry was hopefully coming back to stability. jp morgan bought first republic bank after became the second-largest bank failure in u.s. history. japan's economy expanded at a faster pace than expected as further easing up endemic rules boosted consumption. gdp expanded at an annualized rate of 1.6% in the first three months of the year. the strongest growth and three quarters. the numbers could live the prime minister more leeway to consider an early hold. the creator of chat gpt and the privacy are calling on u.s. senators tomorrow heavily regulate artificial intelligence technologies. open ai's sam altman told a senate judiciary subcommittee the u.s. should bisons advance ai models while ibm's christina montgomery says regulation must

focus on the risks. senators notice the process lags far behind the pace of technology advancements. hong kong more than triple the number of profession sues numbers can apply for the challenge programs. the number of occupational categories increased from 13 to 51. digital marketing and ai specialists are among the newly eligible job titles. the working population declined 2.4% last year, the biggest drop since 1985. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. shery: coming up, chinese variety retailer is opening a new flash up store. we are trying to discuss their business plans. this is bloomberg. ♪

haidi: take a look at tracking the wednesday session. uncertainty when it comes to where we go next with the debt ceiling negotiations. some signs that these talks may get a little closer. in the meantime we have well a lot of investors have when it comes to further gains in equities.

the nikkei 225 also seeing some gains of about half a percent. we do see analysts but the second half to come by for japanese equities. a lot of arguments pointing towards government reforms as well as low-price valuations for japanese equities. the cost is 3/10 of 1% and also mentioning that japanese gdp numbers came in stronger-than-expected giving us a bit of a boost. watching australia we see downside of 910's of 1%, this of a reaction when it comes to those pretty patchy china domestic activity indicators that came out yesterday, and of course on the geopolitical front, hearing that president biden on account of these ongoing debt negotiation talks will not be following through with papa new guinea and australia leg of his dutch leg of his trip expected. kiwi stocks are also softer. shery: moving markets today,

stronger -- stronger eco-data in the u.s. we are talking retail numbers rebounding in the month of april. spending at restaurants and bars coming in higher with headline sales, rising .4% in april versus a drop in the previous month. this really showcasing perhaps strengthen consumer spending despite inflation, despite high borrowing costs, but if you factor in inflation, the lining blue just shows you how high your prices are abiding. when it comes to taking advantage of this american consumer spending and american spending strength, we have one company that has come to the u.s., chinese variety retailer to open its new flagship store this week in new york's times square, the company had entered the u.s. market back in 2017 just four years after the open of its first-ever store in china. and now has over 5000 stores worldwide. joining us is the cfo. thank you so much for joining us

today. telus about the significance of this store in times square and how big the u.s. market is for you. greg things for having me, yes, we will celebrate the grand opening of our flag strip dutch flag's -- flagship store growing. as far as i know this will be the first time for a chinese consuming brand to open its flagship store in times square and we are all excited about that. and this will be typical for 400 square meters. and i believe the significance for this represents the determination to place this market as well as our key focus or is this market in the future, and it has become one of our biggest markets and is getting

more important. i believe it's a super, super large market, and it is comparable to that of china. if we execute well, we can open stores here, hundreds or even more, but before that we need a plan and we are working on that. shery: it's interesting you are coming into the u.s. now with so much talk about a potential recession coming, we also see the geopolitical tensions between china and the u.s., are those not concerns for you? >> no. we want to focus on business, so especially on current high inflationary involvement in the u.s., i believe it's one of the highest, and consumers are looking for more more value, and as the company has a lot of global operations, we have

challenges as uncertainties. but i'm pleased to say that our operations are more and more integrated into local communities in terms of providing local consumers in the environment, and in terms of our higher contribution to local community with our employment or tax revenue. plus, we are not in high tech or other sensitive sector, so we will, of course be less effective, and one last thing is that, most are owned and operated by third parties. the business is relative. so we are trying our best to keep this feature as much as we can, and that will balance a lot of flexibility in facing these kinds of challenges. haidi: with the international focus does that mean you will be looking at relocating or

diversifying supply chains and production? >> currently we have more than suppliers in more than 90% of them are in china, which is a highly integrated term and has leading efficiency. in the future i see we will look for global sourcing opportunities based on cost advantages and customer demands. but the majority of them will still be in china. haidi: talk to me about the domestic recovery. the chinese consumer has been reopening spending. >> from this perspective i think

we are among the best for retail in china. the consumer goods increased by about 16% at any of increased more than 80%. so we are position as a unique value proposition among our short retailer payer -- short retailer peers. shery: what are your next key markets? >> absolutely, absolutely in the u.s. market. we believe this is a huge market. we now have scores in the u.s. market, but we have seen the store performance outreach in the u.s. market is among the best of its peers in the world, and it's also increasing very

fast, so we believe this market will be very promising in terms of business. shery: really great to have you with us, cfo joining us. you can watch us live and catch up on past interviews on our interactive tv function. you can also dive into any of the securities of the bloomberg functions we talk about, you can join in on the function by sending us instant messages during our show. this is for bloomberg subscribers only. do check it out. it's that tv . this is bloomberg. ♪

haidi: his sister of an activist who disappeared in 2018 is suing twitter in saudi arabia in a newly filed lawsuit in the san francisco federal court. it accuses the social media network of allowing the kingdom to target dissidents, including her brother by giving access to the company's controversial data. it stems from a criminal case in which a former twitter employee was convicted of spying for saudi arabia last year. tesla is said to be nearing the final stages before starting production of the revamped model 3 sedan in shanghai. the model is sportier and has sleeker interiors. a group has plenty to visit india this week to meet with government officials in a bid to diversify its supply chain beyond china.

shery: the investment leaders conference is getting underway in person for the first time since 2019, the event provides a form for professional investors to present a market viewer investment ideas. yvonne man is there and joins us now, so where were the focus be this year? yvonne: you mention about the first in person event here in hong kong. since 20 a lot has happened. really, if you look back to pre-covid times, 2019 china was a main staple when it came to this event, take a look at what happened last year, there was no mention of china in all of these guest pitches that we see, in fact, it was in the thick of a regulatory crackdown when it comes the freewheeling tech companies, mounting geopolitics and global rising interest rates, so, a lot has changed, a lot of key questions we will ask is now that things are reopening in the mainland, is china

emerging or reemerging as an investment theme. last year was diversification away from the mainland that was a big theme, especially when it came to vietnam. seen as a beneficiary when it comes to manufacturing. you may remember seth fisher from oasis management, he recommended being bullish on exchangeable fonts when it came stephen -- bonds when it came to vin group. it ended up generating decent returns just given the fact that they did recently cut rates. that is something we will be focusing on with the hard data remains to be quite weak. what we saw yesterday in april, and you are starting to see a lot of them scrambling to cut their forecast with jp morgan and barclays. perhaps the most bearish year, 1% growth she things for the second quarter and 5.3% in the year. haidi: who are we expecting to hear from today and where they expected to tell us?

yvonne: a lot of guess, particularly on the profits of shifting geopolitics and supply chains the likes, kicking off the 9:00 hour period will be mark tinker, a frequent guest that we get all the time. tesco fund cio. he's talking about this new normal when it comes to rising interest rates. you think supposes well -- it bodes well. gordon we'll is focus more on the eem side of things and talking about his recent trips to china, india, what he seen post-covid there, and wants to talk about impact investing, jeremy von will go here as well, he's coming here from when it comes to tara capital, they are looking long commodities, his natural resource fund has done quite well. this year he focuses on more -- small mining energy companies in australia and south america in the likes. what you seeing in terms of opportunities in the commodity space as well. shery: bloomberg's yvonne man at

the first time in person since 2019, u.s. futures right now, a little bit of upside after stocks fell in the new york session, of course we had a little bit more hawkish tone coming from fed officials, the offshore yuan very close to that key seven level against the u.s. lot -- u.s. dollar, we have been following the pboc's quarterly monetary policy, but don't forget, we have the investment leaders conference coming up, and the china market opens with yvonne man coming up live in hong kong. this is bloomberg. ♪ it couldn't be easier. i share my style, size and budget. and they shop just for me. my shopper sends me stuff i feel good in. i keep what works, and send back the rest. stitch fix.

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