tv First Up With Angie Lau Bloomberg September 1, 2015 7:00pm-8:01pm EDT
angie: stocks extend, the s&p 500 seeing it third-biggest lost -- loss this year. evil, japan's economy minister says things are different from earlier crisis, any base is not too shaky. we will hear from him. victory in the luxury race in what was a good month for automakers in the u.s.. welcome to "first up."
mobile.treaming on your breaking news out of south korea, a current account is balanced for july, coming in at a surplus of 10.1 billion u.s. dollars. it is shanking. -- shrinking. we'll be watching market reaction in one hour. u.s. stocks saw one of the worst days in the year. there were concerns about china and the u.s.. how did the day look today? sue: it was a rough ride, u.s. stocks falling in a selloff that accelerated as the day wore on. clearly, concerns about china and the impact of global slowdown. thategists pointed out u.s. investors are also focused on some actors about
fundamentals in the u.s. economy. the dowers were brutal, was down almost 550 points at the low end of the day. a closed off of that, not too far. the s&p 500 was a 3% drop. fresh economic data shows that manufacturing in the u.s. expanded in august of the slowest pace since may 2013. we had data on construction suggesting a rebound in housing recovery. interpreted as negative. selloff was sharp. apple was down 4.5%. google and amazon were down 3%. the focus is on what is the fed going to do now? we have traders pricing -- saying there is a 30% chance they will act to raise rates.
tony krzyzewski, take a listen. be fed will probably wait until december. the markets are going through an adjustment process. the rate may normalize, and eventually rise. adjustment process is an understatement in the oil markets. after what had been the biggest three-day rally in 25 years, we saw oil fall as much as 9%, that is the most in two months. the biggest independent trader out there says new york crude oil would stay at the $40 range through 2016. in terms of oil futures, it hit a four-year high on monday. it was up again on the selloff today. the s&p 500 futures we are
seeing for wednesday trading, the direction is low. that it is what we are probably looking at today in asia. let's see how that plays into asian markets. -- economy minister says he is not worried. sally is taking a look at this for us. these comments come on it -- typical day. >> a very difficult day for investors. september started in the red. the topics were down 7.4% any month of august. that was the biggest loss since may 2012. we are seeing the inflation gauge near zero for the third time this year. economy minister says there is nothing to worry about,
it is not the same as what we saw during the asian financial crisis, and it is not what we saw during the collapse of lehman brothers. notjapanese government is taking any budgetary support. over the last 10 months the stock market has shot up while property prices rose only so much. the fact that there is a bubble only and stocks means that the fundamentals are not too shaky. a systematic risk is very unlikely. it is not like what we saw in the asian financial crisis or lehman brothers. angie: a lot of investors fleeing to japan for that safety haven play. on the other hand, australia's dollar is under pressure. juliet: absolutely. it had its biggest gain in a week yesterday.
other safe haven currencies like the euro and the swiss franc are moving higher. as you mentioned, the aussie dollar is under pressure. i am not going to think about my savings. is that a six-year low. leaving rates on hold at a record low 2%. we are expecting a .4% rise for the second quarter, that will take the euro a year of economic growth. australia, really trying to adjust to the fact that non-mining industries are now taking the velti of the economy moving forward. matt aussie dollar floating with cents.. since -- angie: the hong kong monetary authority is having to again more dough. juliet: it is trying to keep the hong kong dollar from breaking out of that strong and of the
u.s. dollar. yesterday the monetary authority in hong kong but $2 billion of the currency. at one point, that came late in the afternoon. it is definitely on the upper end. it is the first intervention and four months. at the moment -- we might see a pickup in japanese stocks today because of the fact we had that big selloff yesterday. looking at a stronger, i think the only support we will see is in gold stocks today. in hong kong, looking like we will see more selling again. september is not off to a good start. angie: indeed. thank you so much. checking other headlines -- shutting their eyelashes -- fluttering eyelashes at new zealand. say kiwi companies could
save money in a dual listing as they will not be required to submit a perspective until next week. they are looking to expand australia's trillion dollar equity market and they say new zealand would be the biggest opportunity. the asx hopes to see a 25% jump in offerings this year. macau with gaining revenue, plunging almost 36%. 16th fell for a consecutive month as new resorts fails to attract players. revenue was down less than expected, but the down turn has drags to a four-year low. shares took a hit. need to deal with fewer airbags and originally thought. they will now have to replaced with a 3 million, instead of 34 million -- 23 million instead of
34 million. they were thought to have shrapnel released in the car. authorities are still investigating whether they violated u.s. law with an excessive delay in reporting defects. speaking of cars, at least car sales in the u.s. proved resilient last month. despite the turmoil in the markets, we have ford, chrysler both reporting strong numbers. tous one the luxury race continue what has been a strong year for high-end makers. hall --ing in dan a dana hall. big headline is despite the turmoil in markets, americans are still buying cars, particularly light pickups and suvs. it is all about trucks and suvs this year. angie: buyers seem to favor
pickups and suvs, what does this mean for japanese makers with their car heavy lineups? automakersapanese also all declines, except when it came to their suvs. lexus had great sales with their crossover. hyundai with their tucson. you are seeing a shift where the big sales margins are coming with larger vehicles. doing -- saw lexis making big gains in the luxury sector. dan: they had 4400 sales in their new crossover, it is great. they are now almost and neck neck with- meck and bmw. angie: thank you. you can get more on all of the -- all oftop stories
in one's top stories address, bloomberg.com. imagegoogle gets an overhaul with a new logo, making it easier to identify. has spent three years developing its new winter wardrobe which includes a $185 today -- putting. check it out. >> volatile times, our next guest says get used to big swings in the market, more on that when "first up," returns. ♪
the sketch of a man seen leaving a backpack on august 17. the prime and says there is evidence linking the man to the case. >> police have a lot of checkpoints. when they find someone suspicious, they have to make an arrest. as it turns out, this man looks similar to the man police were looking for. ,hey have to do a lot of tests fingerprints, dna, if he is the guy, he is the guy. angie: first the stadium, now the logo. japan's olympic dream has lost another component, the design has to be scrapped after allegations the creator plagiarized the emblem from a theater in belgium. it is the second setback after costs. the designer insist the logo is original. the organizing committee is seeking new ideas. china has opened its latest
high-speed rail, connecting two major cities. kilometers. a cuts the journey time by two thirds to just one hour and 11 minutes. it reduces trips to beijing to just over six hours compared to the previous, 14. they expect a 15% rise in tourism. i wish we could say that for the markets, but no luck. concerns about a slowdown in china have stoked a global selloff. s&p 500 slipped 3%, seeing its third worst drop this year. check out commodities, oil fell by the most in two months overnight, sending those declines,. metals have also pushed stocks lower. surprisingly, check it out,
the demand for safe havens -- the yen surged by the most in a week. it has weakened slightly. let's get more with steve, the senior vice president at td ameritrade. steve, good to see you. what do you make of what happened on wall street? we have had, for the first six months of the year in the u.s., we have had a tight range, and low volatility, not a lot of movement. starting last week we saw volatility really come into the market quickly. theent up on the next from teens 253. 2 -- to 53. today is settled around 30.
a lot of our clients understand that volatility will be here to stay for at least an extended. of time this time -- extended amount of time, this year. angie: a lot of people still have a lot of their portfolio in equities, how do you play it? is it a time to buy in? your it time to just keep powder dry and wait for the bottom, whenever that is? at the aggregate of our clients, we have 6.5 million client accounts. they are usually buyers. they were buyers up until last friday, and when the markets -- i'm sorry they were sellers into that selloff, and they bought aggressively when they got opportunities, and i am sure we will see that they probably ghtught aggressive -- bou aggressively today.
they look at this as opportunities to get these stocks at a discount. these are stocks they have been after for a while. i think what you will see is people taking advantage of opportunities. the people that have been in it a wild will sit tight and drive this -- ride this. angie: the friday jobs report is coming out. that is integral to what the fed will do, how does that play into your strategy? steve: i think what our clients are doing is looking at this and saying, they have a view of it is two worlds. what is happening abroad is a concern to them, but also have to look at what is happening here, because a lot of the investing they are doing is in the u.s. stocks and equities. anything that comes out from an economic standpoint will give them a good read on win the fed might take action.
as you guys have pointed out, right now it looks like for september there is about a 30% chance that they will act. by december there is a 60% chance that they will act. i think what we will look at, i believe they are looking for 220,000 jobs to be added. any surprise to the upside of that, could be and cattle last -- be a catalyst to act earlier. windowyou have a unique into the minds of asian investors with td ameritrade for a lot oftform asian clients looking to buy into u.s., are they going into the u.s. for safety? if so, what are they picking up? steve: they are. their preferences are similar to what u.s. clients a purchase. they are big fans of technology. they do like the energy sector.
i would say the places where they straight a little bit is they are big fans of alibaba. where i think they have more insight is since they are in asia come in southeast asia, they have a better understanding of what all of the changes and all of the movement that is happening in the economy there, what that means for equities across the globe. i think they try to use that insight, and use different equities slightly tweaking them. again, their preferences are similar in many ways to u.s. preferences. apple would be the number one held and traded stock. that is virtually the case in the u.s. as well. you aboutave to ask the commodity route, in asia we see that impact certain nations here that are exporters, but to offset that, to hedge that, how
will that affect consumer behavior in the u.s.? what do you think? ,teve: we talk about it a lot because the individual names that some people might hold, they would appreciate it as well , remember that is a tangible benefit to most people here. everyone is a consumer of something energy-related. as we get to the holiday season later in the year, i think you may see some benefits of cheaper energy across not only the industries, but across retail sectors with consumers as well. i think it will be positive. angie: we will leave it there. thank you so much, td ameritrade live from chicago. say hi to everyone there. coming up next, it heading east, netflix sets its eyes on the japanese market, but will they make a successful pitch to a
reporter joining us from l.a.. netflix trying to do the same in asia, why does netflix pick japan to be the first? >> it is the second largest broadband market in asia, after china. many differentso convocations, they have not even committed to offering the service yet in china. some japan bears similarity to markets where it has already had success in western europe. markets where free tv is popular. streaming is just eating up -- picking up. angie: what are the most evident challenges they will face in asia? are a couple, one is that over time -- isthere are a couple, one that western media has been popular in japan. last decade, japanese consumers watch more local
content, and less hollywood fare. the other is the popularity of free tv, netflix has to get people to pay for a service they previously were not doing. netflixso the fact that thinks that the japanese consumer takes a little time to warm to the brand. they think it will take time to convince people to trust it. angie: everyone is watching how successful it will be. they are warning that maybe it will take a little time, still, how important is it for netflix to succeed in japan? >> it is important in that if it does not succeed in japan, that might raise some red flags as to how it will deal somewhere else. if it cannot succeed there, why would it work in china or singapore? the good thing that netflix has is over the next 16 months it differentin 150
countries, if it is successful and some of them, it will mask what will happen japan, especially if it is slow. i would say it is important, but it is not essential. there,we will leave it waiting for us in japan. netflix going to want -- launch its first market in asia. you can get more on that story and all of the top stories, plus you can watch us live wherever you are on the bloomberg app. downloaded to your mobile device. plug, up, pulling the tokyo scraps its olympic logo over plagiarism claims. we will take a look what it means for sponsors
angie: a lot more people start gazing towards japan for that safety haven play called the yen, in light of the global route. we are 30 minutes away from the opening of trading there, as well as australia and south korea. you are watching "first up." ♪ angie: the top stories this hour, u.s. stocks extended the global selloff.
k manufacturings data is stoked about the economy. its third worst drop this year it is now 10% below the all-time high in may. -- ministeromy mr. says the global selloff does not pose a systematic risk. he says the slowdown in china is different from previous financial crises because the economic base in the country is not shaky. he also said japan is not seeking budgetary support for the time being. u.s. car sales last month suggests drivers are shrugging off the bad news from the market. lexus and tesla saw increases. makers, declines for
nissan and toyota or narrower than expected. lexus saw victory in the luxury race. it was not only stock markets that plunged, oil was not aired crude was sold off heavily. david: wild swings, not only overnight, but what we have seen the past four days. you look at the oil market, compared to chinese stocks, looking like a kid with no personality. is monday,art, that you have the three day -- that is tuesday by the way, you have that three-day rally. a loss of 8%. look at the trading range. it has been a wild ride.
let's took -- let's take a look at brent. that is an 8.5% drop. it confused traders from what we saw on monday, the message from opec that they will not be shouldering the sole burden of oil prices. let me get to comments from the iranian oil minister in an interview overnight. ,et's keep this chart here essentially reinforcing further what has driven oil prices down. outputll be boosting regardless of where prices are. they are looking at one million barrels more by march. we are at 2.8 million. they are looking at 3.8 million by march, up -- of 2016. target -- the forecast
a 13 year chart, inare looking at a forecast that empty part of the right side your screen. three things, in yellow is what you have the oil minister of iran said should be the fair price for opec. $70 million per barrel -- $70 per barrel. opec may defend 15 u.s. dollars. keepsay that saudi cannot selling at $40. of course the world biggest independent oil trader here saying that oil prices will be between $40 and $60 heading into 2016. if these forecast due stay the way they are, that would potentially mean the longest downturn even longer than what
we saw in 2007. rig.s a picture of an oil back to you. angie: the selloff continues in the markets this morning here in asia, showing no signs of stopping. to new zealand, check it out, more than 1.3% down. we had the prime minister come in yesterday saying that the headwinds include dairy prices and china. at zealand dollar spot is $.63. let's head to japan, the k to 25 2.5he k 20 -- 17 850 that's the futures pointing to a lower open, dollar yen right now is off their highs, slightly weakening
gains,ning those the selloff in china has erased trillions of dollars in market value that still has not made stocks cheap mainland shares are more than twice as expensive as their counterparts in hong kong hereve craig explain this to us, we saw beehives, we saw the route in , it -- shanghai composite is still more expensive than holding shares here. greg: there are a lot of ways to cut this. when you look at mainland at stocks themselves, you can look at the shenzhen, the shanghai, large-cap and small cap, there are divergences all over the place. the key difference between mainland and hong kong is the multiple -- it is still quite
wide if you take the forward pe on the shanghai composite, we are talking somewhere around 13 times. in hong kong you can look at the index, you're talking around 10 or below. there is still a split. h.: a share versus this is an issue where you have dual listed stocks trading north and south. it is still one of the biggest split that you could possibly find in global markets. angie: where does that spread stand? tim: there are a couple ways to look at this, one popular index, the a h premium index, right now that is trading at about the level of 140. that indicates a 40% premium,
but if you look at the average premium of the 80 stocks that are dual listed, it is right now at 115%. if you think about this from a valuation perspective, you're forward pe a share on a medium basis four times. , four times. take your pick. this goes back to the confusion between state support. when it is working, you have the state buying large-cap stocks, a lot of these all into that case. you have global investors that are impacting hong kong like every other global market. , the spread may last. angie: we have to think about it this way in terms of what is --
it is a barometer of. you think about the government and what they are doing on china you could argue h shares his global. -- is global. delta is pitching a new policy to business customers that focuses on reliability. passengers will be awarded travel credits if their flights fall behind in american rates. the move is not normal for an industry that uses awards to attract corporate client. alibaba is linking up with constellation brands to offer brands from the robert mondavi collection. plan tort of alibaba's offer wine from around the world. google has changed its logo.
it is its biggest revamp in 16 years. the banner features the same colors, but features a simpler font. the original location was designed for a single desktop browser, but the new look will work across a variety of platforms. the redesign follows a figure shift in google's corporate structure with a new parent company taking the name. other people having issues with their logo. we are talking specifically about japan's political organizers. they have decided to scrap the official logo of the 2020 games over accusations of plagiarism. we have the latest. >> it is another setback. another sort of embarrassment for japan's organizers of the 202011 recs. we are seeing these logos, one the logo that was scrapped.
another one by the belgian designer. people have compared them saying they are similar. they defended the design saying that the fonts is a common one that you can find over the internet. he says they are not a same in any way. he says they thought put into the designs were different. organizersek ago, said they were two different things. the belgian playhouse logo was not a global trademark, so they could use it, but they have seem have backed -- down. angie: this is the rising sun. the debate is ongoing still. -- they are scrapping it.
this comes with all of the issues of the stadium. >> that was another setback. architect, by the that was criticized for being too expensive. if you look at back, people were saying more than $2 billion to build stadium that resembles a bicycle helmet, a turtle, and even a toilet seat. organizers decided to scrap that design. the cost atping $1.3 billion. all of this has led to a delay of the construction. they will not be ready in order to host matches for between 2019 rugby world cup, which they wanted to do. they are now hoping to finish it , that is one year later than scheduled, also passed the international of the committee's deadline of january 2020.
also the promise by organizers is that all olympic venues will be within a distance -- that will not be cut either. they had to apologize for wasting taxpayer money on that sees rustic design. we were thinking that japan was a safe bet when it came to the olympics, this incident with the logo and stadium has cast embarrassment for the organizers. angie: be careful what you wish for. coming up next, the day brings another check on the health of the australian economy. they have released second-quarter gdp numbers. we will look at that when we return. ♪
and killed five people during violent protests over a draft constitution. dozens more were wounded when officers opened fire on people they say were defying a curfew, and entering restricted areas. the protesters want to stay to their own under a new federal system. nepal has not had a constitution since a 2006 peace pact. human rights groups have withmed a court decision an australian man and his colleague ran a news website. they were charged after republishing one paragraph of a routers report alleging people of people trafficking. they say the act should never have been played. -- laid. russia is working with china to produce a widebodied passenger aircraft in a challenge to boeing and airbus. the russian officials say a deal
could be signed by the end of the year. one analyst is coming up with a aircraft could require investment in the region of $20 billion. russia once to strengthen ties with china. -- wants to strengthen ties with china. joining us now from sydney is andexecutive director bloomberg's number one forecaster on rba decisions. you are right. the consensus was that rba would leave things unchanged, also interesting, there was not anything directly different from this august statement. a lot of people were looking direction as how they received china's most recent route.
andrew: yes, exactly right, there was a universal consensus the cash rate would be left unchanged. the rba repeated large tracts of its previous statement. adjusting, concluding it would be appropriate to consider economic and financial information over the. -- time ahead to determine a future path. , no signs ofted concern from the rba. they did notice signs of slower growth in china and east asia they also noticed market volatility. studying those things is an observation, rather than a significant expression of concern. angie: it really done. -- did. it read like a factual, nonbiased, the tone was left out.
everything was very factual. still we are seeing a slowdown in china. we are seeing a commodities route, that is hurting the australian economy, do the -- do we expect this today? andrew: yes, we are looking for quite a weak quarter. below the bloomberg consensus of .4. it is quite ironic that eight weeks after the june quarter, we are debating whether the economy grew moderately, with flat, or went backwards. angie: that is the thing, to point you back to the statement is that they are pointing to a labor market that looks -- is still, they're looking at
direction there, what do you think needs to happen from the rba? do you think at some point they will need to cut? andrew: we have a cut penciled in for november. we have had that call through may this year. looking back at the last few months, the biggest developments have been the significant fall in the austrian dollar on one side, against that we have increased financial market volatility, weaker equities, whiter credit spreads, harder finance conditions, and slide -- signs of slower growth in china and east asia. i suspect there are bankers performing a difficult allen thing act of judging those influences -- balancing act of judging those influences. will bring australia posco economy out of what looks to be a very gloomy outlook -- australia's economy out of what
looks to be a very gloomy outlook? suggesthe indicators modest growth. the low australian dollar should help many parts of the economy, and lead to a pickup in growth of the time. that would be the hope or expectation. -- clearly,crudely itt that does not happen, could subdue business investment. that acrosse seeing the board. thank you so much for that. we really appreciate you joining us this morning. next, rising gold prices could give a boost to producer shares when asia cost trading day begins -- asia's trading day begins. ♪
angie: welcome to the stock exchange, we are looking at the openings in australia, japan, and south korea. we have our gang of reporters here. >> we should be looking at gold stocks, because -- angie: let her explain. >> because everything is down. gold futures safe haven, the yen, rising. company for a number of minors that explore and mine for gold have operations in brazil, argentina, and the u.s., today they have done quite well. i think gold will be a safe haven. the rio tinto numbers were
slammed. investors in australia looking for somewhere to put their cash. give them my bank account if they are looking for somewhere to put their cash. i will conduct a seven day reverse repo. i am watching a company in japan, it is a small cap stock. it conducts semi conductor testing. 600 employees and japan, it cut its net income 97% for the full year. operating profit may think we'll pick up a little bit, 7.2%. watch this, of course watch adventists. -- adventist. -- i waswatching this watching this.
between hisiding stock, this one is down 8% this month, but their first-quarter operating profit almost doubled to $36 million. sales were up 8% to $1 billion. they produce a japanese tea, canned beverages, i like it. not an overbought territory, they were oversold last week because they went up, they lost 6% yesterday which could give them some momentum for the upside, who knows? they gained 12% last month. i am curious what they will do today. angie: it sound like it is shaping up to be macro versus micro. >> i think i will shine. angie: i think you will shine brightly.