Major market opens. Paul australia has just come online. China ramps up aid for the economy, a higher budget deficit ratio and asian risk assets, in addition to easing treasury yields, trade is also mixed. Plus, japans biggest listing since 2018. Annabelle what i want to point out is that the Australian Market is sensitive what happens in china. New support measures coming through, Stephen Engle is here and well go through all the details in just a moment. This is an economy very reliant on what happens with china. The Golden Dragon index, that is the last close for that because it tracks u. S. Stocks around the chinese stocks listed in the u. S. But that was the best data we saw since the end of july. Just gives you an indication around how much investors are liking the latest support measures. Were also watching in the aussie session, the inflation focus in particular because we have cpi numbers in the next hour and the handle expected to take down, about 90 minutes from now. China is the big focus, though support measures coming through. The tech space in particular, we will get more details on that but just to say that the nasdaq is trending lower, thats not a great signal for us. Many of the markets are pointing lower but that is a big jump we are expecting their for china stocks when they come online. Shery take a look at how u. S. Futures are trading, a little bit of downside after stocks rebounded today, with the s p 500 gaining ground for the first time in six sessions. We had those reactions from corporate earnings, symbolist forecast coming from 3m and ges well. When it came to the treasury space, it was a little bit of a mixed picture with the 10year yield edging slightly lower but the dollar did manage to gain ground for the first time in four sessions. That was as it was boosted by data showing u. S. Business activity did managed to pick up this month. Oil Prices Holding Steady after falling to a oneweek low. Were seeing potentially more signs of russian supplies, and theres a little more the after our moves, were talking about 15 trillion worth of Companies Reporting earnings this week. Take a look at alphabet plunging, microsoft gaining ground. Microsoft seeing the strongest sales growth increase in about six quarters. That was led by that recovery in the Cloud Computing sector. All different story for alphabet where the cloud unit actually missed estimates. Earnings coming out of meta and amazon as well on wednesday and thursday. Paul china stepping up support for struggling economy, issuing additional sovereign debt, raising the budget deficit ratio on a day when president xi jinping made rare visit to the central bank. Stephen is here in hong kong. Is this the big event we were all waiting for . Stephen theyve been keeping that big bazooka locked away because i dont want to exacerbate the debt loads, especially at the local government level. This is interesting because a couple of weeks ago Bloomberg News did have a scoop that this was the likely outcome that we would see beijing, you had a flurry of these announcements coming out on policy and the economy, essentially raising the deficit ratio to gdp to around 3. 8 . China likes to keep it around 3 , and thats what the target was at the National Peoples congress back in march. But the economy is sputtering, to say the least. The stock market is sputtering, obviously the property sector is a big drag, Consumer Confidence is a drag, Foreign Investment confidence is a drag. So again, it doesnt necessarily address those two big drags, im talking about property. There might be other stimulus, i dont know, down the pike for that. But also Consumer Spending has not been given the jolt and this wont necessarily do that, but it will help put a floor and give some stimulus to some of the Infrastructure Projects with this kind of borrowing and sovereign debt as well as raising that capital the budget deficit will allow. Its interesting that they will be basically issuing sovereign debt. It shows the Central Government will take on a bigger burden, with these marching orders for growth, in years past the owners goes on to the local government, but we know after three years of very punishing covid prevention and the testing and simply the property sector and land sales have dried up and the local government coffers are strained. The onus will go back onto the Central Government to issue trillion yuan in sovereign debt. Shery it was all part of announcements from the National Peoples congress. We finally got some confirmation of some highprofile staff changes. Stephen we knew the foreign minister position was ousted this summer. Now we got confirmation that he has been stripped of his spinal Party Membership as state councilor. Now we also have clarity on the top general, the defense minister. Essentially he has been removed and also stripped of his title as state councilor. We also had a shuffling of finance minister, we have a new finance minister, probably to spearhead a plan to diffuse the local Government Debt issues. But this is the more highprofile one. Now the shortest raining defense minister ever in china. We dont know the exact reasons why he was ousted, could be disciplinary reasons, violating party discipline, could be some sort of criminal probe. They did not give the reason, but last week i did ask ambassador burns, the u. S. Ambassador to china, on the significance of his potential ouster which we now know what happen, and whether this will allow u. S. China relations, military to military, to get back on track. This is what he had to say. China shut down are three principal military to military channels, following speaker pelosis visit to china which was 14 months ago. We believe those channels should be reopened at every level. Certainly at the ministerial level. That has been our consistent position all along, because the last thing we should warn in this relationship is the absence of communication, that would just add to the difficulties weve had, and having the straightforward conversation. Stephen the palace intrigue continues ahead of what is likely to be a summit between biden and xi next month in San Francisco. You have xi jinping crossing the pacific with essentially what will be three new cabinet level ministers, ousting the defense minister, foreign minister, and also of course the defense minister and the finance minister. Shery Stephen Engle there with the latest on china. Lets get back to what is moving in the markets. Annabelle i think we just want to get some Quick Reaction to what stephen was discussing, supported measures to try to boost the chinese economy. You are already seeing those gains coming through for the likes of bhp and fortescue. Their other names but not trading just quite yet. Also keeping an eye on the tech sector in general, given the mixed moves that came through on wall street in after hours trade but no clear theme developing out of that just yet. Shery big names in the tech sector after earnings, especially with microsoft, which is now climbing after posting it strongest sales gain in six quarters, bolstered by recovery. Cloud computing growth, this is we continue to see demand for new ai products. A whole different picture for alphabet, its cloud unit missed analyst estimates, even as overall thirdquarter revenue beat forecast. Were joined by su keenan. Start with microsoft. Su both companies trail amazon. Com in cloud infrastructure. Its been a race to build up these products and microsoft appears to be getting the lead here. They had recovering cloud growth amid demand for these new ai products. It has prompted clients to shift back into spinning mode. The strongest sales growth in six quarters, it has paired those gains as a Conference Call has gotten underway and the forecasts have been given. Revenue in the First Quarter rose 13 , the Azure Cloud Service sales dropped 20 jump between 9 . We saw shares really starting to fly come on the Conference Call we heard that second half wealth in Cloud Services would be roughly stable. A lot of focus on ai, 13 billion in the start of openai which has catapulted it to the head of the ai race. The ceo revamping the entire product suite, all to add services and a new bid to boost Advertising Sales take share from alphabet, google, and microsoft, adding chatgtp technology to its being Search Engine bing Search Engine. Analyst called the better than expected performance a particular highlight. The numbers highlight exactly how well microsoft is positioned in the cloud. Paul lets talk about alphabet, the cloud there perhaps a little bit darker. Su you could say theres a cloud over its revenues right now. Disappointing results there, overshadowed across the board beats on most of their different units. Investors looking to the Cloud Business to drive Company Growth. Alphabet missed on both revenue and profit for its Cloud Business. It raises concerns about the companys position in a market that has now become critical to its future growth. Analyst say it puts it at risk of falling further behind its competitors. Thirdquarter sales and payouts 64 billion, a bill and dollars more than estimates. But investors didnt really seem to care, beating the estimate. There were really focused on what is going on with the cloud. On the call they talked about cost optimization, saying that explains the weaker cloud story. She did note the resilience and youtube, youtube revenues had formally been a drag on alphabets performance but are now benefiting from a broader recovery and potential ad spending. Paul su keenan there. More analysis on big tech coming up in a moment. Why there are concerns concerning alphabet. This is bloomberg. J. P. Morgan Wealth Management knows its easy to get lost in investment research. Get help with j. P morgan personal advisors. Hey, david ready to get started . Work with advisors who create a plan with you, and help you find the right investments. So great getting to know you, lets take a look at your new investment plan. Ok, great this should have you moving in the right direction. Thanks jen. Get ongoing advice; and manage your investments in the chase mobile app. Be ready for any market with a liquid etf. Get in and out with dia. Paul lets take a look at how some of those big tech names are trading after hours. Microsoft up by more than 4 . A very different story for alphabet, concerns over the cloud, which we will discuss in a moment. We will hear from metatomorrow, amazon in a couple of days. Joining us to discuss these big tech earnings is the Vice President and senior Equity Analyst at cfra research. Thanks for joining us. I want to start off with microsoft, Revenue Growth 30 , beating expectations. The cloud front and center in this result as well. What are the Key Takeaways here . It be on both the top and bottom line. The biggest take away and you alluded to it, its all about the cloud, accelerating 29 on azure. The last quarter about 26 . Above are expectation of 27 . That was the big takeaway. It looks even more impressive when you look at it versus alphabet, the acceleration prebetween you look at the rest of the business, they are performing extremely well. On the more personal computing side of things, the return to positive growth on that side of things. You also have the activation contribution. All said and done, cloud is the major story here, but at the end of the day its really the numbers on the quarter. Paul saying the entire product suite can be revamped to better weave in ai, the experience. How well do you think microsoft is monetizing ai at the moment . Do you see it improving its market share in search . I think they are making some good progress. Clearly it is on the cloud side of things. Theys all only saw about one percentage point of contribution on clout ai. Theyve got their tentacles across a number of different different ways they can generate ai revenue on the cloud side of things, in partnership with openai. Its going to support the interim incremental growth they will see from that launch on the office side of things. Thats another way they going to make money on the ai side of this. That will continue to support growth on office 365. As far as the search side of things, we are not expecting much there. That continues to be the wheelhouse for alphabet. Maybe bing picks up a point or two here or there, but at the end of the day, something that unless something changes significantly i would expect alphabet to continue to hold the line share in search. Paul search very much a key part of alphabets revenue stream. Alphabet very disappointing on the cloud. We did hear from the cfo, talking about looking for savings. Do you buy the story that it is alphabets control . When you look at what these are both companies that work through a different macro landscape in terms of looking how to optimize spending. Its something weve seen essentially all year. The fact of the matter is, alphabetic seeing sharp deceleration in the Cloud Business, versus the expectation of 26 . I think its definitely a disappointment. Im not necessarily buying what alphabet is trying to say here, but that said, we remain optimistic about the broader Cloud Business for alphabet and we think they will see improvement on the cloud side of things. We think the ai opportunities are there for alphabet in the cloud workspace. We are positive on the cloud story for alphabet but no doubt this is a disappointing quarter for them. Paul thanks so much for joining us. You can get more on those tech earnings in todays edition of daybreak. Is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. Paul the israeli ambassador to the United Nations is demanding the resignation of secretarygeneral Antonio Guterres over his remarks on the israelhamas war. The secretarygeneral saying this attack from hamas didnt happen in a vacuum. Its a classic yuan situation, its very brought. For israel, theyve experienced an atrocity and they want the u. N. And its members to reflect on that. The secretarygeneral office has to represent the entire world and is no secret that theyve been under a degree of occupation for some time. After youve had 1400 people massacred, a lot of them women and children, emotions run very high. I think its more case of that than anything more. But it is very difficult to reconcile, the western world with the global south, and how they view the situations. Israel has a right to defend itself, but when you see the civilian fallout coming from these airstrikes and the inability to get a two people who are suffering very badly, water and energy cut off, its very difficult for people in that situation. People are suffering badly and israel needs to try harder. Shery we continue to see conflict around the region as well as u. S. Forces have been attacked and there has been increased activity whether in iraq and also in the likes of syria. The secretary of state sending his sternest warning yet. Thats right, the u. S. Would respond decisively if its forces are attacked. The u. S. Obviously shot down some missiles that came from huthi rebels and this has been bubbling in the background. There is one common factor here in all of this related to iran. Youve got hamas, then you got hezbollah in southern lebanon across the border. You got syria and iran, and rn backing the rebels. Theres a lot of options around israel and the u. S. Is exposed. As it builds up its forces, it becomes more exposed to any moves that iran arts proxies make. Its a very tense situation. The secretary of state was trying to draw lines to tell iran to back off. Shery the latest on the ongoing israelhamas conflict. Coming up, economists flecked expect policy to remain unchanged at the next fed meeting. More details from a new Bloomberg Survey next, as we continue to see the japanese yen holding, just a touch below 150 against the dollar. This is bloomberg. We are going to see higher Interest Rates for longer. A conflict type of environment. We are sitting here with the backdrop of the aftermath of the terrorist attack in israel and the events that have been unfolding sense, and it is desperately sad. Longterm im certainly optimistic, but im uncertain right now. You would be foolish not to look at some of the things taking place today in ukraine. There is the potential for persistent high Interest Rates and high inflation. The monetary policies were going to see have greater effects on the world. You look at the gap so you can be optimistic on that. Shery top wall street bankers sounding quite pessimistic about the Global Economic outlook, and really were but could see some sort of optimism coming through in the session today will be from china. Weve been discussing the slew of support measures that a been announced overnight. Something that played into the dynamics of the wall street session, the focus on earnings. The Golden Dragon index is the biggest jump weve seen intraday since the end of july. The outlook for chinese futures as well because opening in a couple of hours and pointing to a solid start there. Also the aussie session, half an hour into tod