>> good morning looking to debate debit australia. i am paul allen at the investment conference in sydney. >> we are counting down to asia's major market opens. >> good evening from new york, i am stare on. the top story this error. u.s. stocks and treasuries rise as the latest five comments fuel speculation the central bank is headed toward another pause in rate hikes. president biden boastful support and military aid for israel. the combined death toll now approaching 2000. and china is said to be ready to unleash a new round of stimulus. take a look at how u.s. features are coming online. 20 early in the session.

we have stocks and bonds gaining ground on that commentary coming from a fed official. we have the s&p 500 gaining ground for third session. a little bit of a technical rebound. we have the 10 year yield fallen toward that 4.6% level. a little bit of catching up for treasuries with a global bond round. we are looking ahead to plenty of data including thursday cpi numbers. not to mention consumer sentiment survey is coming out on friday. we are seeing continued weakness in the dollar. the longest losing streak since july. you can see crude prices at the moment holding steady. they edged lower but only after the biggest rally since april. we continue to see these rising tensions.

>> that is right. we are still in sydney. we are here in new zealand. we have more than a thousand delegates here. this conference to discuss influential ideas, we have a number of high-profile focus is coming up. you can hear christina's interview in new zealand's election which takes place this saturday. a change in government appears to be in store for new zealand. mark woodruff will be joining us along with city global strategist. joe will be allowed to share his views as well. he will deliver the keynote

address at this conference. plenty to discuss in terms of actual advice. the imf sees inflation is pretty stubborn. at the same time, revising down and shaving off a 10th of 1% here on 2.5 percent. since the global economy is just limping along. >> we are seeing another grim milestone. the geopolitics, that higher for

longer narrative coming from the fed and other strength. this is down more than 1%. close your markets are also continuing to digest a slew of fed speak. >> we feel that we are on track for a soft landing. maybe we can avoid a deep recession. that is what i will call soft landing. >> i think our policy rate is sufficient to get inflation down to 2%. i don't think we need to increase rates anymore.

>> our next guest says inflation is falling even more quickly than the number suggests. joining us is this senior portfolio manager. great to have you with us. the narrative seems to have changed the last few days. it was about another fed rate hike. are we not expecting the fed to pause? especially given the cpi numbers? >> it does seem increasingly likely they will be pausing at the next meeting. a lot of the fed speeches over the last week have suggested the fact that we have had this urge in the tenure bond yields, that really kind of helps with respect to tightening credit. between the fact that inflation is coming down, it is a choppy process.

it is coming down more rapidly. one thing that may actually give a little bit of a positive catalyst in the coming weeks could be the markets gradually price out that likelihood. the markets focus more on anything, when it will do next year. it is one of the things that has been hampering the stock markets and lead into the search in the treasury yield over the last month. the markets gradually coming to terms. that is not to say we don't expect three or four cuts in 2024. maybe one or two is what should be expected.

that is the best that could have wanted that a little bit. cross what does that mean for growth stocks? >> we have seen their milk pressured with the spike in the old. >> there is a possibility that we are at peak level there. investors might end up being surprised if the bongos don't pull back as much as i historically have. one of the things we have seen is it has messed up the pen a function of fed talk. it is the bond market way of saying hold on. there are some other factors at play here. those other factors being increasing deficits, this game of chicken with respect to government shutdown and debt ceilings as well as government dysfunction.

not as much as investors think. it may give a boost to growth stocks. but if made to give remain somewhat higher longer, that means the cost of capital is higher. that is generally a negative for all stock market valuation. it really makes the case for investing in things that are shorter duration. you are getting a lot more of your cash flows today. >> you mentioned the deficits. i like inflation. most of your problems don't really seem to be going away anytime soon. how long do you see those pressures enduring? >> those may be here for a long time.

we don't see that getting better. if anything it is getting worse. they certainly feel elevated right now. a long-term average for the tenure is really around 4.5%. we don't necessarily expect to see it hit some of the floors it has had in recent years. that is one of the reasons why we are telling our clients to focus on companies. one of the best ways to look at that is look at their pricing power that allows them to not only pay dividend yield the dividend growth. one of the key factors is we look at equity market valuations today and the overall u.s. stock market is not necessarily cheap. you might expect mid-single digit returns in the coming years. you can pay much get that from fixed income and the risk-free rate that that is fixed income.

you can find rates that are growing dividends. that is probably one of the ways to keep up and defend the capital in an uncertain market like right now. close before we let you go, i want to ask you about the higher for longer narrative that we get. what does this mean for you? how long do you see rates remaining elevated? clocks in the near term, they probably should not pull back. you look at the historical data and the shows when the fed pauses and they actually stop hiking rates and we do expect that to happen fairly soon in the near term rates, that should pull back a little bit. as well as the fact that it seems inflation figures are continuing to come down. that'll pull back. there were probably not go back to where they have been over the last decade. ever since the global financial crisis. we should probably expect a little bit of the new regime

with respect to that. >> those were his views on the market. great to have you with us. the combined death toll from the israel hamas war during 2000. as has the u.s. is russian military assistance to israel. calling the assault an act of sheer people. >> when congress returns, we will ask them to take urgent action to fund the national security requirements of our clinical partners. the united states has also advanced our military. we stand ready to move on additional assets as needed. across from her, we are joined by the political news director jody schneider in washington. we know that americans have also been part of hostages taken during the attack. what does full support mean in

terms of where president biden is willing to provide to israel at this point? >> president binds main message was the u.s. stands by israel, is horrified by the attacks over the weekend. particularly of civilians near children, elderly and making the case that this should not widen. that others that seek to take advantage of the situation -- he basically said don't do it. he was trying for a very unified message supportive of israel. a very sober and resolute kind of speech from the white house today. he did say that munitions and other intelligence support will be forthcoming from the u.s.. particularly things to help replenish the iron dam, that antimissile structure in this realm. but in terms of long-term

funding, he is going to need congress support for that and he said he will make sure he gets that from congress. that will be trickier. especially given the house of representatives does not have a leader or speaker. therefore it is not operating. chris secretary of state blinken will be traveling to israel this week. what is the purpose of that visit? what is the objective here? >> to show support. it is a very quick return visit. he will probably be there within the week as the attacks occur. it is basically to show support and solidarity with the state of israel and its people. they have been questions as to whether the whole state of intelligence -- there were intelligence failures on israel's part and whether the emotion to been able to support israel more in terms of

intelligence but i think part of this is just saying that by going there, this is the priority right now. this is the party before anything else that occurs in the region with saudi arabia and some of the other things the u.s. has been trying to do in the region. first and foremost, that is here for israel. even as israel declares war and a ground war begins. it is very clear that the biden administration is underscoring that message, whether they can get the funding they need will become another day. but right now they're sending that message of support and doing what they can in terms of making the support available. whatever they can do at this point. larger dollar funding will have to come later and maybe combined with the ukraine request to congress. the ukraine congress has been

somewhat contentious lately. we will see how that plays out. but for now there is that show of support. i'm sure we'll hear about that in the coming days as antony blinken makes that trip to israel. >> all right. that was jody in washington. we are about 45 minutes away from the open markets here in australia. bell is here to take a look at what is going on. >> you just talk there. it seems like they will largely be shrugging off this. the focus will still be on those more dovish commentaries coming from fed officials. pushing back that expectation. pushing back on the expectation that we might see another fed hike. lower oil prices, all things that are supported factors for asian equities. we are seeing most futures pointing to gains.

they are already down to the lower side. we are watching very closely is china. you can see china and the golden dragon index. this is the best number we have seen from the golden dragon in months. we can see stingless measures coming up. we'll home are not in just a few minutes. earnings is the baywatch. we are getting into the reporting fees and samsung is one of the ones coming up. in a split -- preliminary numbers. still, the focus will be that expectation we see our fourth straight quarterly sales drop. this chart here, you can see the share price at the top here but that line in yellow is earnings analyst estimates on a 12 month real. essentially it is saying that projections are picking up slightly and telling us that analysts are starting to revise higher their projections for samsung earnings in about a years time.

because we will look at what that means for the product semiconductor industry. still had, where life in new zealand. we will discuss the outlook for the new zealand economy as the nation has to to the polls on saturday. first, china is said to be considering a fresh round of stimulus measures to help the economy meet its growth target. we will have more details next. this is bloomberg. ♪

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>> san francisco president is speaking at a town hall event in chicago. she is saying that she could absolutely imagine a new neutral rate of 2.5% to 3%. that would be the rate which neither is restrictive or

similar for growth. this and may it does not need to do as much if the market has tightened. she was also talking about rates being steady in the labor market and inflation continued to cool while financial conditions remained tight. it seems to be a reference to that narrative right now, maybe the fed does not necessarily need to do as much if the market tightened. and we will also be watching how asian markets open in a couple of errors after the chinese stocks rose in the wall street session. china is preparing to unleash first stimulus to boost growth and is also considering raising its budget deficit for 2023. for more, let's bring in stephen engel in hong kong. that about 5% growth target has been a bit more challenging given the economic slump in china.

what are we expecting policymakers to do? >> obviously, as we go through october, that about 5% growth target is in severe jeopardy given the property sector was, the fairly week consumer spending and overall, that is all contributing to a deflationary environment in china. hitting that goal will be tough without going back to that old cocktail that china oftentimes uses in downturns. that is selling bonds essentially to funnel into infrastructure projects. sources are saying that is what the leadership is considering right now. it may not be the big bazooka stimulus. we are talking about one trillion yuan of new bonds, sovereign debt for spending on infrastructure. 137 billion u.s. dollars considered by most economists to be fairly modest. i think it would be more important as we saw on the

golden dragon indexed over night in new york, it would be a positive message coming out of beijing as we go into the fourth quarter with so much uncertainty on that growth target. that would raise this year's budget deficit to well above the 3% cap set by the national people's congress in march. it would also essentially mark a significant shift in the narrative coming out of beijing which is so far avoided -- avoided broader stimulus. they kind of did a piecemeal approach with the property sector. they have this rising deflationary environment. the property downturn. at the same time we are hearing the imf in its latest world economic outlook says china needs forceful action date -- beijing should help struggling developers to make sure there isn't any increase in financial instability and that it does not spread to other parts of the economy.

>> we have another developing story as well. global hedge funds are pushing back at new draft rules. what we know about this? >> these were draft rules coming from the asset management association of china back in april. requiring global hedge funds -- he have more restrictions if you will on their onshore data. all part of the broader push by beijing to limit national security concerns and basically new draft rules would require quantitative hedge funds to set up risk controls and other internal systems in china separate from their offshore operations. and essentially we are hearing from sources that there is some pushback from some of these global hedge funds to these draft rules. they say it will increase costs

in the competitiveness in this 822 billion u.s. dollar market we did contact the a mac which is the association -- asset management association of china. they told bloomberg news they would fully absorb the industry responses and optimize those regulations. there are some 38 global firms that have set up wholly-owned units in china when those rules were eased in 2016. they managed by 67 billion yuan. quick stephen engel there with the latest on china. we have more to come on daybreak australia. this is bloomberg. ♪

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>> look at how u.s. futures are trading at the moment. not a lot of movement after

stocks and bonds rose in the new york session. we are still digesting more comments from fed officials that were taken a little bit this. they gained ground for three sessions already. we saw a little bit of a technical rebound from oversold levels as well. we are not hearing that confirmation about birkenstock ipo pricing at $46 per share. another big test of the u.s. ipo market. we have had for already. coming at a time when we are starting the earnings season. we had seen treasury yields also following this week. we have

>> the san francisco fed

presidents speaking in chicago right now saying that tight conditions can be the equivalent of another rate hike. she said many -- maybe the fed does not need to do as much if the market technorati. we are in similar narrative coming from the dallas fed president early this week. higher yields may mean less need for rate hikes. we continue to hear this narrative that perhaps things have changed given the recent spike in treasury yields. investors are now reshaping their expectations for what policymakers do next. let's bring in annabelle in hong kong. the changing dynamics also showing up in the u.s. bond option. >> that july, we had treasury sales coming through on tuesday in the u.s.. just taking a look at some of those numbers in detail. they are three-month bills that were being sold. also, six-month bills. you can see in the amount now.

essentially economics saying this is the largest ever option size for both of these. they saw more of that coming into the room -- three-month bills in particular. thus talk about why that was. you have less hawkish commentary coming through from fed officials. it is something we have been discussing throughout the course of this week. these changing expectations and even in fed fund futures, you see that lower chance of a rate hike in november of this year. they are also citing geopolitical risks. investors are really crowded into that data in particular. >> portia jones has also been speaking about geopolitics. request that is right.

this is actually in an interview he did with cmc -- cnbc. he is saying geopolitical environment is the most right knee he has seen to date in the wake of that hamas attack on israel at the weekend. what he is saying where if you get really bad is that essentially if iran and israel get into direct conflict, that is something that could really escalate. the big question is if iran was a proxy -- that would change the dynamics of the war today. his views also coming through in that interview on where the recession outlook is for the u.s. and he says we will see the u.s. in contraction. he actually says the country is at its weakest is a good world war ii. where exactly you should be putting your money, he says that still going to u.s. markets.

they typically hit over session around 12% and they say this is the moment to be buying it but certainly not a great outlook there for the u.s. economy. they have ramifications for other countries as well. questions, and property stocks will be in focus in new zealand as the nation heads to the polls on saturday. investors will be watching for any changes in policy sectors like agriculture and construction as well. let's bring in the asian stocks and credit reporter. why are investors watching these sectors in particular? >> good morning, paul. yes, does sectors have a bit of a different policy coming from both parties. we have this party proposing some tax cuts to put more money in the pockets of consumers. perhaps helping retailers and then we have the ruling labour party saying they have two exempt fruit and veggie from gst.

that could be a company like my food back to create meal kits and then we also have an part of that text blueprint from the national party and interest deductibility sort of scheme which would be great for building materials, companies such as the major banks and also for property investors. and also, we have the national party with a sort of more farmer friendly policy in the agricultural space and we have some analysts saying this could be a slight positive. it won't be any dramatic positive change in this perhaps struggling sort of sector. we have weaker demand from china in hurting dairy farmers and so this positive policy for farmers could help that struggling sector. chris what is the overall trajectory at a time when we are

watching what they will do next. you mention some of those economic challenges but also, the broader economy has been pretty resilient. especially when it comes to -- avoiding recession. >> there is certainly problems in the academy. we have a cost-of-living crisis, the property sector has been struggling and the share market has also been underperforming relative to peers in asia. is one of the worst performing for the half. as for the rv and z rate hike trajectory, as it slows down, the peak may have been reached sometime in the future. things could get a little bit better. irrespective of who wins the election on saturday, they are inheriting some problems in the economy and underperforming stockmarkets. they left to do something to kickstart the economy. also, get investors back

outside. request that was georgina mckay there. more on the outlook for new zealand now. joining us here from australia. she is the principal economist. christina, thank you so much. we just had a little bit from georgina there about the source of economic and fiscal challenges of new zealand and what they are facing at the moment. it appears we will have a new government on saturday. what sort of challenges with a face? >> when it comes to high living costs, that is front of line for many. this shows how they seek to survey this. that softens the retail spending. when we look at the mortgage drop in new zealand, around half of mortgages in new zealand are due for repricing over the

coming year. that means many households will be moving from historically low fixture mortgage rates to something around -- something even higher. and we do expect democrat other areas of spending. >> if it is some sort of a coalition that suggests a tightening of spending, would he think of fiscal policy implications are for the rv and z? >> it is very tricky now. it will be facing the incoming government. the fact that it is high moving costs. at the same time, they don't want to stop inflation pressures. they could risk inflation which means interest rates may stay higher for longer. a tough balancing act here.

with all these things going on, there is the need for power, any support payments. it is interesting to see the other areas. >> if we do get a new government, we have potential reforms as a change to the rv and z mandate. do you think that is a worthwhile reform? >> i think there is some merit in looking at that. generally i do think given sometimes two of them can seduce contradictory responses. having met one means there is more accountability in terms of a clear response. >> inflation is something that most economies are gelling with at the moment. new zealand is a fairly low-wage

economy. you can see how they are well enough the fixed floating rates. fuel prices are very high. can you give us a sense of what the inflation picture is like? is it easing? request given that there was something that took effect from july. there was one of easing and inflation pressures. we can see these businesses are reporting and that comes from that sharp easing and labor shortages. we had quite a strong migration influence. that is done -- but that has done is help bring workers from overseas. the report uses easier to find

labor. particularly when it comes to unskilled labor. they are domestic pressures. we do expect that with that soft or demand, it is making it harder for businesses to pass on these hard costs by raising prices. overall, we do see that coming through and reducing inflation in the coming year. cross that is the fate of this. to what degree does any rebounding growth mean? christus lemon in chinese growth is consumed. we can see that is most apparent in dairy prices. they get returned here and what that means here.

more broadly, if we look at that strong growth and migration inflows, a lot of the impact is seen on the supply side of things with the easing shortages. we will start to see that come through in terms of posting demand across a wide range of sectors in the coming years. particularly with the recovery and construction demand. you have an increased support housing demand. request thank you so much for joining us. this is in sydney. the conference taking place in sydney. we will have plenty more guests coming up. we will be joined by citibank and australia. we will have more later on bloomberg tv. keep an eye out for those. 20 more to come on daybreak

australia. this is bloomberg. ♪

>> samsung's as a report operating profit and sales in the next hour. south korea's largest companies expected to post its fourth consecutive client in quarterly revenue reflecting and electronics market and reach up

an smartphone demand. let's get more from mark gorman. when can we expect this tournament especially in the bottoming out of the semiconductor down cycle? >> i think a lot of people are respecting this to begin turning around by mid-2024. samsung is not alone here. apple and some of the other component makers like qualcomm and intel, they have been facing quarter after quarter of shrinking profit. this is something that we believe will continue for sam selman they announce their quarterly earnings later on today. this will be the fourth quarterly earnings to client on an annual basis in a row. revenue is expected to fall north of 10%. some of the factors here have to do with chips and being able to share -- cell storage chips.

tablet makers, computer makers, and consumer electronics sales low, the component makers suffer so they are suffering there. but also in their own consumer hands, the forward phones are seeing a little bit of slow momentum on that area as well. >> are we expecting any commentary around this decision to allow samsung to expand making operations in china? >> there will be preliminary results with these today. it is unclear how much time that was spent talking about other facets of the business. i expect that would be a positive tailwind for the company so perhaps they'll have some commentary on a call later today regarding that and just to give some context there, this is an agreement. the u.s. is allowing samsung and sk heinrichs to acquire the appropriate equipment they need to continue operations in china

for production of very necessary components that those company sales have. that has been in a place of flux. definitely that is one of the positives we are seeing here today. kirk douglas head of the samsung quarterly result. there are some other earning stores we are watching. this after sales in the third quarter grew slower than expected. they were short of wall street's expectations. there was much worse than estimates. asian sales excluding japan 11%.

that was well short of estimates. shares in pepsico have rallied as they raise concerns, better quarterly results. consumers have supper absorbed higher prices on snacks and beverages. the company has been immune to the effects of appetite suppressing drugs like your subject. >> i think the adoption will be pretty slow on this. as consumers migrate their eating habits, we will migrate with them. i don't think snacking is going away. to the degree that i think they want to evolve their forms of snacking, i think we will be right there with them. >> for more, let's bring in the ust was reported.

>> there was some concern that birkenstock was rich on the valuation. being such a well-known consumer brand.

instacart has not performed well as a public company, birkenstock has one thing that instacart and other consumer facing companies that have gone public in the last few years haven't. it has a consistent record of profitability. >> there is a lot of them. our bloomberg stories -- and it appears that considering all of the volatile situations in terms of government shutdown, it would affect ipos because it would limit the ability of the sec to process ipo filings. 2024 seems to be the next watershed moment for ipos in the u.s..

it is an array of companies. game change so there is another one we've reported on recently. looking for the right moment to move. >> now that birkenstock is public, how are we expecting them to build on their brand? >> the thing with birkenstock is if you ask anybody out there what birkenstock brings to mind, they have an image of it. it is a strong brand. people like them. if you look at the website, that is not what they are putting at the top of it. there is a lot of women's fashion especially. they have some deals.

it has become a higher fashion retailer. there is about 30% of their sales. request that was bloomberg's u.s. deals reported. is bloomberg. ♪

>> let's get the latest from the fraud trial. alleging that he directed her to commit crimes that led up to the collapse of ftx. we are tracking developers from the new york court house she filed this report. >> it is a critical moment in the criminal trial of sam

beckman freed. the ftx co-founder being accused of defrauding investors. his former girlfriend -- she had taken the stand today. she pled guilty to criminal charges. ellison said that beckman freed had directed her to commit such crimes and she is further outlining the extent to which ftx alameda had cooperated with each other and use customer funds. this is only the second week of a six week trial. other testimonies could include investor anthony scaramucci including sam bittner phrase more -- brother. >> we saw the dollar edging

lower. five sessions of losses on the other side of the break, not really a lot of movement right now. we continue to watch the japanese yen. that is still holding below that on 39 level. we are watching the offshore you on as well. 728 is the level. we continue to watch more stimulus coming from policymakers. coming up in the next hour, a deep dive into the candy's annual banking report plus more from the city investment conference in sydney. this is bloomberg. he's ignorant ...before you even step inside? ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines.

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