Bloomberg Daybreak: Australia 04/03/2024

00:00Welcome to DAYBREAK, Australia. I\'m Harry Stride. What\'s in Sydney where markets have just come online? And I\'m Paul Allen. The top stories this hour. Asian stocks set for a lower open with solid US data and a commodity surge. Reviving that good news is bad news. Trade markets now are expecting fewer rate cuts this year than the Fed itself. Tesla share rout deepening as first quarter sales missed estimates by the most on record, raising concerns about wider EV demand. Plus, President Biden and she\'s speaking for the first time since november. The white house saying the tick tock sale push was on the agenda. I would just open for trade here in australia. Let\'s take a look at how we\'re doing in the early going. Of course, we do have a staggered opening here, so difficult to get a comprehensive read on things, but we are higher by a 10th of 1%, one trend that we are seeing continue from what happened in the US rising yields. You see there the ten year just climbing a little now 4.1 to 1. We saw this happen in the US yields rising bond selling off repricing of Fed rate cuts really going on. We\'ll talk about that in a moment. That US starter just keeps on surprising to the upside here in Australia we will have a bond sale today $300 million worth of 2041 bonds at 2.75% the oil prices. Another thing we\'re watching that just keeps on creeping up as well. We saw US crude futures topping $85 today, first time that\'s happened since October. Of course, the rising Middle East tensions simmering away in the background there. We\'ll have an OPEC+ meeting as well later on today. And we\'re expecting the cartel to reaffirm its current production policy. Elsewhere, futures for the Nikkei looking kind of flat as we continue to watch the yen, Heidi, for possible intervention. Yeah, and as you alluded to, this kind of idea of good news is bad news. We had better than expected data again out of the US, but also compounding the better than expected data that we\'ve had out of China

as well. So these two mega economies really contributing to this idea that maybe rates will stay a longer higher than expected. So we\'re seeing a bit of that sort of coin toss scenario when it comes to whether the Fed moves in June. At the moment, according to market pricing futures, when it comes to the S & P, pretty flat at the moment. We\'re hearing from Morgan Stanley, his wealth management arm, saying that the investor expectation is getting stretched and that is a reason to seek opportunities outside of the S & P 500. I think steer clear of that overbought territory that we see for that ma

rket. NASDAQ 100 futures also looking pretty meek at this point. And Tesla, as we mentioned at the top, are those sales that missed by the most ever. It is not just a blow for Tesla, but really a pretty brutal blow across broader EVs as well. Analysts slashing their projections in recent days, but apparently not by enough. We\'ve seen shares for Tesla down still almost 5% at this point. But extending that 2024 sell off that we\'ve seen, one of the biggest drops that we\'ve seen in the S & P. But first quarter coming as another one after another that we\'ve seen from analyst reducing the estimate for vehicle deliveries out of Tesla, still managed to surprise to the downside. And of course, on the other side, we\'re also watching what Fed speakers have to say. Right. In particular, we heard from the Cleveland chief, Loretta Messer, saying that they need to see more evidence of inflation. Now, that\'s really been that data dependent that we\'ve heard from many Fed speakers. Take a listen. I think that is a very reasonable baseline. But I would like to say here that this is a projection. Right. Three rate cuts is a projection and a projection is not a promise. I continue to think the most likely scenario is that inflation will continue on a downward trajectory to 2% over time. But I need to see more data to raise my confidence. Some further monthly readings will give us a better sense of whether the disinflation process is stalling out or whether this start of the year readings reflect a temporary detour on the downward path back to price stability. All right, let\'s get some more on this. Bring in Carrie Cray, global market strategist at JPMorgan Asset Management. Carrie, you just heard there from Loretta mester and Mary Daly as well. No real sense of urgency there when it comes to rate cuts. We\'ve now got July as the first month that\'s fully priced in for a Fed rate cut. But if this data keeps on surprising to the upside of inflation, stays outside the target window, do you think those expectations could get pushed out a little bit more? Good morning. Well, I think that\'s obviously the knock off narrative that\'s gripping the markets today is the idea that we have had those speakers from the Federal Reserve who have said we need more time, we need more data to assess, and they\'re going to get that. They\'re going to get two, if not three, CPI prints before the next mee