♪ >> welcome to daybreak australia your. i'm paul allen and we are counting down to the market open. >> i'm annabelle droulers.

tech heavyweights lift wall street as a major test of sentiment is put upon equities. paul: tesla fast tracking cheaper models. annabelle: apples china sales plunged 19%, putting it third in a key market. paul: what's take a look at trades, risk on day. gold prices eased. gold etf could suffer, new zealand in positive territory. interesting day. numbers out of australia are critically, those numbers are

using down from 4.1, big improvement outside the target band. bank of indonesia decision, consensus is a hold. we gave futures saw positive territory. bank of japan will focus on weakening the yen. were at 144 .77 and keeping our eyes on tesla suppliers. stocks surging following the call. annabelle: that's right. the company has slumped, but u.s. futures looking toward future gains but the story is focused on earnings.

what else we were tracking was optimism and a bullish forecast. some of those are coming from goldman sachs. company that closed at a record high, first record highs since 2021, first quarter earnings came through including a process -- profit beat. apple posting gains which was surprising. china iphone sales dropping 20% according to research. china losing advantage in the market. paul: big focus on texas instruments, but the big move

for tesla, an earnings report traders wanted. paul: let's get more and bring in peter. we were building up to a horrible quarter but shares are searching. analysts like what they heard. peter: what analysts were looking for was forward-looking comments around strategy and he said what they wanted to hear, accelerating new models including a newly affordable car . he did not give a timeline, but he said early 2025. and that reassures analysts in investors because there had been speculation that they more

affordable car would be shelved. it's a really important area for tesla, 30% of car sales are for cars below $35,000, where the model y comes in now. that's a big chunk of the market to miss out on and they really need something to drive the next stage of growth. annabelle: perhaps the next stage, we know elon musk was bullish about that. peter: you musk laid out a picture of tesla as anna drawn a mess -- a thomas driver company. you should not be an investor in the company, he urged everyone

to drive a tesla with the latest version of self-driving, saying it's impossible to understand the company without doing that. he laid out a vision of autonomous cars where you are able to summon a car, it takes you to your destination and you don't even think how the car got there, it just did. and he said he sees a vision or a future where tesla is a combination of airbnb and uber where they own some cars, but also you can put your car into the fleet to be used and then take it out when you want to. he said i'd rather have a car sitting in the driveway when most cars being used. he was questioned about this in his answer was tell us about the

horse-drawn carriage and his answer is it does not need a horse, that is the whole point. annabelle: quite colorful and the stock search with analysts liking what they heard even though earnings are a miss, that was peter, now let's shift focus to tensions between beijing and the west. china launched a harsh attack on u.s. complaints ahead of the arrival of antony blinken. washington will be suppressing industrial development with claims that amount to bullying and coercion. he arrives for a three-day visit, let's get more and bring

in the president of erasure group. we've really heard china holding briefings before, top u.s. official visiting and rhetoric from the u.s. is dialed up. a possible ban on tiktok. is this setting up a further setback? en: the trend has been more engagement, more communications, but not more trust. you still have plenty of areas that the countries are unhappy, but when there is conflict, conflict does not escalate. escalations are targeted and calibrated so we can see the relationship is getting worse, but it is getting worse slowly

and there is more stability than there was when we saw the balloon over the u.s. or nancy pelosi make a trip to taiwan. it is really whether you see glass half-full or empty, but there was more intentionality than there has been. annabelle: there has been more engagement and visits, but when you say more communication, is the silent treatment worse when we had lack of engagement? guest: it is worse. when you do not have military to military conversations, they are not talking to each other and they can misinterpret, it is worse. one of the reasons the u.s.

china relationship is more stable than the philippines in the south china sea, is because for 50 years the u.s. and china no what the challenges are, communicate constantly. easy to make nuanced calibrations up and down, it is why after the election that did not go the way china wanted, the chinese response was not strong. nor will it be next month when former vice president becomes president of taiwan. always better to have more engagement, especially when you do not trust each other.

biden has tried to make sure that if there are problems, china is not surprised. they find out directly, they show respect. the chinese government has appreciated that. we have more stability than we did before the summit in november when xi jinping and bided met face-to-face. paul: in terms of silence being worse, we will get the opposite as we head into election season. one could expect rhetoric to get hot. when this happens is there risk of lasting damage? or does china view politics as politics? guest: there is not as much pressure on americans to do that.

frankly, the fact that the relationship has stabilized, biden has not pulled back on tariffs put in under donald trump, has not pulled back on export controls, semi conductors. you got a new investigation open. you mentioned tiktok, $2 million military support as part of the package working its way through the senate. biden is not taking inbound criticism on being too soft on china, it is one of the few areas, not russia or ukraine, not the middle east, not the border, he's getting criticized from republicans on almost everything, but not china and that gives him flexibility, room to run in the election on that

relationship. paul: we heard from donald trump blaming biden for it tiktok ban, but trump tried to force the sale when he was in power, so can you say what a trump presidency would mean for tiktok? guest: as long as trump gets money he is going to stay in that camp. that is a 180 flip, but he usually is going to say what is required to go to the highest bidder, especially when he has to spend money on legal fees while contesting the campaign. that is perhaps the only relative -- relevant point.

paul: he will be staying with us. still ahead, taking a close look at tension in the middle east and tesla's plan to speed up the launch of more affordable models. musk will share his outlook later in the hour. ♪

♪ paul: checking in on oil prices, interesting few days. wti prices creeping up. questions covert tension in the middle east, big spike on friday. oil higher despite things calming down. still with us we have the founder and president of the eurasia group. i want your view on tension. how confident are you that the risk has receded? back to a simmer proxy war? guest: last week's crisis is

over, not about to see another tit-for-tat strike. that was a concern but this has not contained the war. americans expect despite the ultimatum against this that there will be a ground incursion in the in the coming weeks with over one million palestinians against the backdrop of proxy war with iran leading axis of resistance organizations that do not respect the right of israel to exist engaging in strikes in the red sea for against american , british and other targets. this is a dangerous environment and there is no broad ability to

bring the war to an end. paul: on the subject of the incursion, how close is israel to its goal of eliminating hamas and is it realistic? guest: you remember that in the early days after october 7, biden said israel needed to learn the lesson of 9/11, that the u.s. did not take out bin laden, they attempted broader wars against terror. it has the united states exceeded 20 years later in winning a war? no one would say that. the taliban are back. i think we will have a similar conversation about hamas. hamas may be destroyed as an organization, but they will be

replaced by other organizations the same political ambitions. not to mention palestinians are more radicalized in gaza and the west bank on the back of the violence we've seen against them over the last six months. so as much as i have great sympathy for the israeli people in wanting to ensure that they can defend themselves and their children and you do not have a government run by terrorists, the way they have gone about that war has made them less secure and will ultimately make their enemy stronger, both in gaza and broadleaf. annabelle: what are the odds of a cease fire developing and would there be any sort of

timeline given you have a hard line approach on both sides? guest: there was an effort to get a cease fire if you had gotten hostages held by hamas, let free. in that has not have been and it does not look close. absent that i do not see a cease fire from israel occurring. i also do not see a cease fire with the war cabinet as long as you have thousands and thousands of fighters on the ground in gaza. that may work at counter purposes, but this is not just a matter of the prime minister, the war cabinet believes they

have more to do militarily before they can declare mission accomplished. there is also hezbollah, israelis have evacuated 100,000 jewish people from the north of israel because they believe they are not defended and secure from rocket attacks. if israelis do not engage against hezbollah to ensure safety and, how are they supposed to announce that these people are going to come back? they are in a bind. it's hard to see how they declare victory. in the foreseeable future, it is hard to see.

annabelle: it is clearly a conflict, there are many factors involved. do you think the u.s. underestimated the collaboration between iran, china, russia, north korea and what is happening in ukraine? you have separate axes operating. guest: i don't think there is a significant amount of help for support going to iran in the war. russia and north korea are simpatico and there's a lot of trade. technology is being transferred, but i would not say they have had great success on those relations.

i take exception to including china. some have done that, but i see three states that are considered robes, pariahs for the u.s. and allies. no meaningful relations with those countries and all three are led by people who believe chaos in the international order is to their advantage. china does not believe that, china recognizes they need stability in the global order including in the u.s., to be more powerful over time. and now china is a friend of russia, china gets energy from iran, they trade with these countries but they are not rooting for these wars to get worse.

in fact, china would rather see a cease fire in ukraine, much rather see the cease-fire between israel and hamas where the russians don't want that. they want to see it all turn and that is a much more dangerous position for a country that is systemically important in their energy and resource exports, as well as all offensive cyber capabilities, espionage capabilities and nuclear capabilities. annabelle: thank you so much for your insights. plenty more on daybreak, this is bloomberg. ♪

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annabelle: let's take a quick look at the currencies space. dollar spot backing off. a couple of currencies in asia, you've got the boj pledging to weaken the currency. china saying fx regulators will you're probably not easily persuaded to switch mobile providers for your business. but what if we told you it's possible that comcast business mobile can save you up to 75% a year on your wireless bill versus the big three carriers? you can get two unlimited lines for just $30 each a month. all on the most reliable 5g mobile network—nationwide. wireless that works for you. for a limited time, ask how to save up to $830 off an eligible 5g phone when you switch to comcast business mobile. don't wait! call, click or visit an xfinity store today. it's an amazing thing

when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything. paul: let's take a look at tesla shares. 12% will make for an interesting open, what the earnings call.

we were expecting a ratcheted quarter but it was all about the outlook. let's get more analysis with the cofounder and managing partner at deep water. i want to start off by talking about new models, that was the headline the media came away with. we could see new models, but very vague details. executives danced around the questions and mosque shut it all down, so what are you expecting? jean: the timing is important, they have talked about growth curves in this winter, they

talked about the importance of the next generation. talk of them moving the timeframe up is reaffirming to investors that were going to re-accelerate growth three quarters early. there is an unanswered component , what are these cars going to look like? they shut it down but there was information, when the question came up on the call is this related to the robotaxi, he said i've said what i'm going to say. based on that they're going to talk about robotaxi on august 8. hard to believe they think they

can get it approved, but they make big predictions. paul: it took four years for the cyber truck to go to delivery, but tesla will not need a new factory. does that give you any clues? jean: they can get this car to market in the next year, that is different than 2019 when he talked about one million robotaxis on the road, limited production. the dynamic is different. the piece that does not sit well is there is building technology and there is getting approval. a few states have mentioned that, but that is the biggest

bottleneck. them manufacturing does increase probability. they will not get a taxi out in one year, but two years. if they do that, shares go higher. annabelle: how much demand would there be for an autonomous self-driving car? jean: a lot. not only will there be demand, i suspect that for safety, carmakers will be required to have autonomy. quick numbers, 40 2000 people lost their lives in 2023, up

from 37,000, it has increased and people are distracted. so the opportunity is one big piece, the second is what is the market for people moving around for cheaper. imagine using lift or uber at a 50% reduction. talked about seven to 10 million vehicles being autonomous. if they solve for autonomy, this will be a breakthrough in terms of how people move. annabelle: what you think about the pricing? it seems like more expensive vehicle, but we've seen a slack ev market and tesla trying to

regain market share. jean: when it comes to pricing, one is the current pricing environment and esb despite headline price cuts, average selling price in the march quarter was lack, up 1% from december in the cyber truck played into that. esp's have been stable given the environment. when it comes to the price of fsd, they've lowered that. so they're making this available if you buy it upfront for one third less. so there are some moving parts around autonomy and how people are buying it. when you think about a taxi with

autonomy, the average price will be less, 20 or 30% less than a new car which is $45,000. profitability can increase given the potential around charging more for fsd. paul: one of the other things was the idea or of pond box manufacturing and how that would revolutionize car production. what is that mean to you? paul: when you think about cars, it is manufacturing line and unboxed means building cars and modules in the facility, so people add different parts to the car. it's like flipping the manufacturing process. henry ford is not feeling good

about this, but it has the potential to reduce the cost of building and elon musk has talked about the competitive advantage is building the machine that makes the machine. that is relevant to the unboxed approach, a new paradigm that can lowered the cost. paul: we have a chart that shows interest, now at its highest in 2.5 years and the stock went up. do you feel like the scene is set for a big battle?

jean: it will be an exciting two years if you're watching the company because this company is going to flourish or it is going to be yet another automaker and it's similar to 2016 or 2017 when they were trying to break through so this is not vetting the company, but i would describe this as all in, so the most basic level is this comes down to do you believe that the future is autonomous? tesla is in the best position, if you think that is 20 years off, the stock is not going to do anything and it will be difficult to get investors to think straight about what the other side is, so this is a polarizing stock. annabelle: tesla surging but

that was gene munster. independent research firm counterpoint research says iphone sales in china or fell. that is the worst performance in the country since 2020. mark gurman joins us and there is a weak consumer but a shift in consumer preferences and the latter part seems more difficult to change. guest: it does come down to consumer preferences because smartphones are not down. substantial growth for brands like on her. no declines for other brands so this is about consumers picking products instead of the iphone

in numbers that they have not since the beginning of the pandemic. apple needs to remarket the device, reposition the device, make upgrades. they do not tailor products to china. no enhancements for the country, basically a translated version of the iphone. china needs special hardware and software. perhaps they do in the future better integration with apps in china that sell devices. optimization. the other thing is a low cost iphone. i doubt that will happen. anna: how is apple's progress on

ai? mark: that is the talk about apple, they are announcing new features at their developers conference. the big question is not how good they are but where users going to use them? is this about appeasing the stock price? if apple is willing to add ai features, why are they meeting wall street with what they want. it will be exciting to see, not sure if consumers will care. annabelle: that was mark gurman and we will have more ahead, this is bloomberg. ♪

♪ >> the consumer is in good shape. i worried it looks more like the 70's. deficits were half what they are today. debt was 35 percent so fiscal

spending is part of the reason we've had this growth. annabelle: amid discussions around earnings, mike wilson is avoiding big market calls and focused on finding opportunities. mike: we keep a flexible mind. we've gotten a lot right. annabelle: japan's currency official says we are on the brink of intervention. vice finance minister said the yen's rapid depreciation despite

no change in interest rates, he says intervention will, if the trend continues. paul: the weekend might've helped shares climbed. traders say it is gone too far. senior asian stock reporter joins us now. why have they change their mind? guest: that is an interesting point and the short answer is the pain of weaker yen is more culpable in the economy. stock market has liked cheaper yen because that will benefit exporters and companies like toyota are big players. so weaker yen was thought to be

beneficial, but truth is where the light is brightest, shadows are darkest. you can find shadow in the consumer sectors. if you look at consumption index provided by bank of japan, actually it hit the lowest level in years excluding boost from inbound tourism. so consumption has been really sluggish in japan, investors shrugged this off because we had such a huge wage hike, things should be improving, but the weaker yen is calling that into question. so if the yen continues to weaken, there will be a positive

cycle and we may not have wage growth, so that is why investors are concerned about yen weakness. annabelle: that's been the big question. as you said following positive outcome we saw a big lift for consumption related shares but what is been happening since? guest: if you look at the stock market, domestic sectors have been sluggish. best example is the transport index which is basically railway companies or transport companies, they have benefited

hugely from record high tourism, but shares have been basically foot since the start of this year since they gained in the broader market. that is very good example. another one is retailers, they are not domestic play because many started to expand overseas so their bottom line will be affected by factors outside japan, but they are underperforming in the overall market so investors are worried about the state of domestic economy. annabelle: that was our senior asian stock reporter.

tune into bloomberg radio to hear more from big newsmakers and get analysis from the team broadcasting live from hong kong. you can listen via the app, radio plus or bloombergradio.com. stay with us. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh

>> quick data coming out.

producer prices rising. estimate was for 2.1 so that is more and and uptick from the reading. paul, it continues to be the story of inflationary signals. question of the week yen, something to track. no change expected. paul: keeping her eyes on shares of europe's biggest software company, after it forecast revenue expansion. dominic told us it is down to

the boom been artificial intelligence. >> ai propelled the cloud. resulting in and uptick by 25%. forward-looking ccb subscription revenues is even growing at a record growth driven by a core offering in the cloud. that generated 30% growth for nine quarters in a row. host: what is the demand for artificial intelligence that you see most commonly invested in? guest: it is broad on finance, the supply chain, so there is no

exclusion, we've brought 30 use cases to the market, planning another hundred, we have 27 thousand customers using ai use cases. the users are benefiting to fight rising inflation. >> how much are you winning market share? >> on the cloud we got 30% plus growth. tremendous outperformance. >> from who? >> it is homemade solutions or against key competitors. sap has been more focused on software deployed so we can

convert that into the cloud. >> that was cfo dominic speaking with lisa. these are the stocks to be watching. tesla's asian supplies are a focus. they are trying to move investors attention to plans for a fleet of robotaxis. you can watch asian chipmakers and texas instruments giving strong revenue forecast. keep your eye on apple supplies after sales fell almost 20% during march. >> on the subject of china,

producers are bulking at high prices for copper. the world's biggest copper producer is trimming estimates so we might see pressure on the copper price. iron ore is taking up. 140. the market opens in sydney and tokyo next, this is bloomberg. ♪ ♪ o coming in.. big orders!s starting a business is never easy, but starting it eight months pregnant.. that's a different story. i couldn't slow down. we were starting a business from the ground up. people were showing up left and right. and so did our business needs. the chase ink card made it easy.

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♪ >> we are coming down to asia's market opens. it will positivity, earnings

season is getting into the year and investors are not liking the reading, but liking the earnings pool. >> tesla had a horrible quarter but it will be interesting watching tesla supplies. a busy day. annabelle: texas instruments could impact chipmakers. but at the start of the day, the nikkei coming online. you mentioned eco-data more than what economists had