Welcome to daybreak asia. We are coming down to ages major market opens. Haidi the top stories this hour. The market searching for motivation as a tame u. S. Inflation report the case for a fed rate skip. A weak 30 year option. Alibaba returns to Revenue Growth across all major divisions define chinas define chinas economic woes. Bloomberg learns chinas market regulators will meet developers and financiers on friday seeking solutions to a worsening property crisis. Kathleen we are waiting for the Rate Decision from the banco ce ntral peru central bank. Expected to hold again even though inflation is falling. They did holder key rate at seven and recorders percent exactly as expected. We are going to be looking for messaging because Goldman Sachs had predicted they might cut their key rate today because inflation has had a nice downward trend lately. If not today they will do it at their next meeting. That is the latest from latin america. We will be waiting for any Additional Information on this. Lets take a quick look at the u. S. Markets. The stock market speaking of Central Banks. The cpi report came out and people said that looks like it confirms the fed will pause. A big rally on s p futures. Daily sf fed president said more work to do. The treasury auction, 30 year bonds sold at the highest yield lowest price since 2011. You can see after closing unchanged s p futures pretty much flat the nasdaq was lower today. It has bounced back as well. Perhaps everybody has realized it did not change much. A couple big reports to figure out what the fed might do next. The downdraft in futures is showing up in the 10 year note. They were down sharply. The 30 year was the big loser today. Crude oil putting much flat. Caught between the sense that slower demand as china slows down be a downdraft. Inventories are expected to continue to fall. There is supposed to be a deficit in the third quarter. Haidi it bit of a downdraft when it comes to that passing through to the we are seeing a bit of downside in kiwi stocks here we did get a deflationary picture when it comes to food prices from new zealand as well as and even weaker manufacturing pmi. The deepening recession as we get into the next rbnz decision. Then futures down by 3 10 of a percent. Watching for the rba governor, his successor, they will be speaking before a Parliamentary Panel for the semiannual testimony. Watch for signaling on how they see the inflation fight going. Kita trays trading at kita today treating action will be what happens with assets. Potentially some Key Developments in the property sector woes we have been tracking. China securities watchdog is said to be meeting with Property Developers on friday as the crisis drag on the entries recovery. Alibaba is in the makes. It is defying the economic turbulence in taking a step toward a longawaited comeback. For more on these top stories Stephen Engle is with us and annabelle droulers. Let me start off with you. Fascinating what we can see out of this meeting. Sources are saying the Securities Regulator will be calling a regular cash a meeting with select regulators. Also meeting with Financial Institutions to find a way to get out of this trouble. This is a cash dependent sector. You need those presales to Fund Projects and to fund coupon payments which has run afoul of Many Developers like China Evergrande which was the previous poster child the woes of the property sector. Now Country Garden could be the next poster child because it is one of the few Major Developers who have not yet defaulted but it has earlier this week and missed a couple of Interest Payments to they have a 30 day grace period so they have not defaulted yet. It looks after they put a statement to the Stock Exchange late last night the financial situation is in dire straits. Saying they are going to have a multibilliondollar loss in the first half of upwards of 7. 6 billion u. S. Dollars. The first seven months of this year attributable sales fell . 35 good that goes back to they need cash upfront for developments and paying off their dollar bonds and other domestic bonds. They are in financial trouble. It is being reflected in the stock prices down 61 yeartodate. Down within 30 in the past month. The dollar bonds we can change the page and look at the on creditors are concerned. The bonds have sold all 59 in the last month. This is a problem for regulators. They are trying to i would not say talk up the property sector but they are trying to restore confidence in a sector that has been battered down. Until now it had not hit the top tier. Up until last year it was just Property Developer in china by sales. It is now ranked number six. If it is cracking it shows further cracks under the property sector. Kathleen it is hard to understand with the regulators think they can do if they dont to some kind of restructuring. I guess the creditors figure the billionaire chair of Country Garden has deep pockets even with all the losses and they can get something from her. Stephen go straight to the bosses pockets and hand over personal money. That is what happened at China Evergrande when that link the saga went on and on. Creditors started saying dip into your pockets and he ended up doing so. Today the billionaire founder of Country Garden, she is one of the richest people in china. Of the richest women in china with a net worth of five dollars. She gets a 28 million Dividend Payment from her personal stake in Country Garden later friday. If you are not adding your Interest Rate not paying your interest due earlier this week and creditors are lining up for the payments into your own pocket. We will see. Haidi on a happier note, despite the water macro woes for china and the chinese consumer, alibaba is a shining light in these earnings. Annabelle that is right. When you take a look at what alibaba was facing in this quarter and so much of it in the june period was the weakness we were continuing to see in the China Economy and Consumer Sentiment still not managing to improve. Yet he tends competition from rivals. The results that came through overnight showed the first signs of a comeback for the company. The Revenue Growth this is for the china Sales Division which is the bread and butter of the company. Accelerating to 14 in the june quarter. A big turnaround for the company. Four straight quarters of contraction. Really notable when you consider what is happening in the mac economic environment. Other divisions in focus. There is the cloud arm as well. The other one we have heard spinoff plans for as well. It returned to growth although a little bit of a lower speed. What analysts had been projecting from the sell side can see in this chart that is the biggest positive cells we have seen for alibaba in the last years. The Market Reaction is very positive. Up around 5 in the session. Something else that helped lift rivals. Also gained in the wall street session. Kathleen alibabas six way split. Whenever i have read it i think that is a lot to do to this company. What is going to happen there . Annabelle so far when you take a look back over the last few months in the six way split, the three ones relate to the logistics, the food delivery and the cloud arms. When it came to the earnings quarter we did not get an update on any of these. The complete blackout that came through is interesting of course but some analysts in the market are saying it is understandable because perhaps it means the Management Team need more time to wrap their head around what that means. And also to consider in more detail, to quantify the impact it is going to be having. Not something to be concerned about too much. The silence that came through. Certainly something that was notable. You had seven analysts who raised questions and not a single one relating to the spinoff plan. Haidi what are we expecting when it comes to markets we spoke about the potential wrigley tory meeting with the Property Developers as one to watch. Annabelle i think this is going to be one of the interesting parts when you look ahead to the open today for china markets in asia markets. It will be the question mark over with the breeze to we saw in alibaba in the overnight session, the Golden Dragon index jump, how much of an impact that has versus setting off concerns in the property sector that have been so prevalent as couple of weeks in the Asian Session. Other factors like the u. S. Cpi. We do see hong kong futures pointing higher. China ones are broadly flat. Look at what we are seeing for the broader asia session. It does look to be fairly subdued. Pretty range bound which tells us it is going to be a little more of investors as these headlines. A lot more weighing up the stage. Broader going to be the u. S. Inflation print. The expectation for the fed where they go for the september meeting and onward and what that means for other Central Banks that will be the key focus we will see in the session. Haidi that was annabelle with the details. Also our chief north asia correspondent Stephen Engle with us on our china property story of the day. Well be getting more when it comes to the outlook for chinas tech sector and alibaba. Analysis of those numbers. First Defiance Etfs will be joining us. Market struggling for direction even as u. S. Inflation continues to cool. Talking investment players next. This is bloomberg. Oh booking. Com, im going to somewhere, anywhere. A beach house, a treehouse, honestly i dont care find the perfect Vacation Rental for you booking. Com, booking. Yeah. 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Start your dnapowered Health Journey today with personalized insights from 23andme. The numbers this morning were close to what we thought. Progress on inflation for now. That cannot be ignored. This inflation is still going to be with us but like so many of the trends we are seeing nothing moons nothing moves in straight lines. I think the economy is growing above trend. I dont think the fed has done enough. Short duration tips to make sense to me. January 2025 yields 3 . Recession seems to be off of everybodys mind. I think that is probably a mistake at this point. Kathleen bloomberg tv guess r where acti to the date bloomberg tv guess reacting to data. Lets get more on the Market Reaction and more to the latest cpi print. Joining us as the cofounder, ceo and cio of Defiance Etfs. A big rally in the s p 500. Up over 1 . Mary daly from this sample does go says more work to do. The 30 year bond auction the highest yield since 2011. At the end of the day what has cpi done for your view if anything, for the markets view . It was a it of a roller coaster day. All guns were blazing this morning in terms of indices coming out so strong after that print. , the. 2 number, the lowest number in two years is exactly what we want to see. It lines us up for a fed that does not have to raise rates in september. The question and the dilemma will be what will the hawkishness be . What will the speech be like from fed chair powell about keeping rates higher for longer and we might have to raise rates because jobs are strong . There was a temp recession last year. Wages are increasing but at a slower pace. Inflation is coming down. It bodes well for the market. I think potentially we are at the end of rate hikes for at least the near term. Kathleen a lot of people are wondering now the year is more than half over and a big rally in stocks broadly. We know the thing stocks are not what they we know the fang stocks are not what they used to be. Where is the market going to go . You sound fairly bullish. Sylvia i think we are going to end up with a strong market going into year end. August has been the late summer doldrums type of month. Less volume in the market in general. It tends to be quiet. If you look at the first half we have had the last 10 times we have seen this strong of a first half, 100 of the time the market and broadbased indices have ended up up and in double digit percentages for the end of the year. I do think we hold onto the gains of the year. We have hired to go on some of the old x we have lost this week or so into august. I think it is a good picture. Corporate earnings are holding up. We are getting to the end of a fed hike. Barring any major event out of left field like a lower u. S. Credit rating or Something Like this i think have a good chance of ending the year with a rally. Haidi haidi the reopening trade the pentup travel trade continues to pay off, right . Sylvia yeah. The pentup travel trade continues to be pentup. If you listen to a lot of the ceos from the Different Airline companies, the Cruise Companies and the Hotel Companies talking about ongoing demand increasing, getting back to the 2019 levels and Business Travel picking up again, the reopening of east to west. It has only been a quarter or so the world has been open for travel. We saw covid the first couple of months in asia. The broadbased reopening, the higher wages, the spending going from goods to services has played out in that sector. If you look at single stock performances, carnival, royal caribbean, norwegian, youre talking about a triple digit performance in some of these. That is a stellar rebound. Haidi are you still looking at the ev trade as well . Sylvia yeah so ev is a strong conviction i have. I think this is one of those trades where innovation is actually monetizing. For years and years we have been taught about evs and autonomous vehicles. Tesla seemed like a great idea but not necessarily a rate investment. Low and behold every quarter these ev companies have proven us wrong. You have the same situation in china with expanding and nio. These companies are coming out with stellar numbers. If you look at 2022, 10 Million Units sold. 14 of units sold. 14 of sales. Talking about a space that is poised to grow by 2040 into the 1. 3 trillion number. Expecting a gross compound rate of 25 or so. They are more commercial. They are more efficient. You can charge them. The drive for longer. You have of and or policy and dedication to going climate neutral for the whole world i think it is a great trend to get in on an even though it has run up hi i dont we are halfway there in terms of where ev stocks go. Kathleen not too late to get in. That sounds good. In terms of this view there may still be a recession because the fed they prove to be more hawkish like volker than dovish like someone else. That could cause the recession. You like ai. You like ev. Are these recession proof . What is if they are not . Sylvia i think what is interesting about the ai trade the way we look at it on our side and that is a big question because a lot of these areas are growth targets. One of the areas we are going to have to continue to spend and grow will be in ai, machine learning. We need to replace workers we have not been able to find. We need to digitize factories, fixed supply chains so we dont have the issues we sold during covid. There Practical Applications of ai. It is not just the hype of it all and the chatgpt and things like this. It is a major part of it but there is so much more. It will revolutionize biotech come of the medical field, defense and so on. If you look at those companies, they Quality Companies. Youre talking about microsoft, nvidia, amd. You get the exposure to some of the smallcap names and you pick up those baskets. I think it is recession proof in that the leaders in ai are Quality Companies with strong Balance Sheets and with names of companies we all recognize and we know well. Haidi always great to chat with you. Ceo and cio of Defiance Etfs. You can get a roundup of the stories to get your day going on todays edition of debris. Terminal subscribers can get that on dayb. Also available on the mobile on the bloomberg anywhere app. You can custom