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tv   First Up With Angie Lau  Bloomberg  September 16, 2015 7:00pm-9:01pm EDT

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♪ angie: healing the markets. 6% defendingmost u.s. stocks to the highest in a month. shanghai's afternoon delight. chinese shares last hour urge. nomics is not enough. to "first up." i'm angie lau, coming to you live from hong kong and streaming on your mobile at
7:01 pm let's take a -- checking on the markets in asia. as with any currency, waiting for the fo nt decision. it is at the 63 u.s. cents level. we are counting down to the opens in australia, japan and korea. let's go to japan. the was the view from nikkei 225" about the 18 -- 18,000 mark. dollar yen unchanged. one closed market value about. no trading in india today. anticipating -- anticipated fed decision in years is less than 24 hours away. there is still no consensus on what policymakers will do, with little else to go on. u.s. stocks took their cues from the commodity markets. oliver has been following all
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the action for us. reporter: you are right. it is hard to figure out what the market exactly is preparing for tomorrow. let's start with commodities. a pretty big move in oil today. let's definitely something moving the markets when you have energy leading the pack, which of course is not terribly familiar thing to see. energy is often on the other side of the spectrum. that is because there has been a lot of concern about oversupply, and glut in the oil market. maybert that says production will be a little lower, or supply a little lower, or refiners are upping production on there and to reduce oversupply, easy to move into equities. that was part of the rally today. we also had some health -- help from m&a. companies, brewing pretty big deal there. lift.etting a pretty big
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again in about 15%. that transactional impact on the market with companies buying each other, still trying to put cash to work, maybe will -- we will be see more of that into the new interest rate environment. that begs us back to the question, what is going to happen tomorrow? looking at stocks related to bonds, yields were up this week. you have to wonder if bonds are preparing for that. if that is hawkish, why don't we see stocks a little more reticent? perhaps people in equities are feeling more confident that the fed is going to move, or maybe they won't. it's anybody's guess at this point. angie: a lot of people just staying on the sidelines. and keep so much for that. of course, bloomberg will bring you all the details of the
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policy statement as it breaks in , 2:00 a.m. hong kong time. and then half an hour later we will bring you janet yellen's conference from washington dc. it is live on bloomberg television and final test on bloomberg radio. late spike for chinese stocks as they surged in the last hour of trading, giving rise to speculation of state support. but there also be some turnaround among investors? shery ahn joining us. it happened again. have seen this time and time again. shery ahn: we did. forafternoon in china investors is now a waiting game. will they not intervene in the markets? yesterday, or the speculation is, they did intervene. you cannot not speculate. take a look at the shanghai composite. in the last hour of training, a surge of 5%. goldman sachs saying,
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$246rities have spent billion purchasing shares, trying to prop up markets. china's also rising, 7.2%. h shares rallying more than 2%. angie: four a shares, we can say china might have intervene. but shares also surged in new york. shery ahn: yes, on that speculation china's intervening in the market to stabilize stocks. online retailer surging more than 8%. the internet stocks are now leading the game in the u.s. investors are thinking that these sort of oversold chinese
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e-commerce stocks could have more possibility on the upside. they also think that the fed meeting coming up this week, they don't think that will have a big impact on these stocks. of course, traders seeing a 30% chance of inveterate--- fed rate hike this time around. angie: are we assuming it is state support or investor sentiment turning around? shery ahn: we are thinking it is speculation of intervention is helping markets. at the same time, analysts are telling us that the government is succeeding in reducing the risk associated with margin lending, giving rise to speculation that there might be less risk in the market. authorities have cleared more --n 60% of non-progress non-brokerage margin funding accounts. we have seen a huge correction in tech stocks over the last
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couple of days. analysts are telling us that investors are thinking that they in this more rebound sector of the market. angie: thank you for that. checking other headlines for you right now. china's crackdown on market manipulation has ensnared another top official. this time it is at the securities regulator. assistant chairman at the ces rc is being investigated for what are called severe disciplinary violations. he is not the only official taking scrutiny. the head of investor protection is also under investigation. the government has vowed to clamp down on shortselling, after the $5 trillion stock. thailand's central bank decided it is up to the government to support economic recovery as
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rates are unchanged for the third straight time. the unanimous decision to keep benchmark rates at one and a half percent. kened morekend -- wea than 8%. ccp is ending its four-year partnership with both leading -- suzuki is ending its four-year partnership with volkswagen. they will buy 122 million shares volkswagen.ea snp has cut japan's long-term credit rating, saying it sees omics willnce aben turn around the economic outlook. this is a damning blow job a -- to abe. is, it showsreally
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that his economic strategy plan is going to fail to turnaround anything in the economy at least for the next two or three years. that was the stating -- statement from the credit ratings agency. there are saying economic support for japan's sovereign credit worthiness continues to get weaker. it from aaa negative two now a plus. now lowernd, that is than the economic rivals, china and south korea. they upgraded south korea's rating on tuesday. this move comes one day after the boj decided to keep policy on hold, betting on this growth and inflation. we are still seeing deflationary pressures consisting in the economy. the reform plan they released in june, some economists say it lacks detail. a fiscal reform plan put on the table, possibly to be considered by the prime minister and the
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shinzo abe government. angie: that has always been the criticism, the heavy lifting has ota kur we have more report cards coming out of japan today. trade data coming out this morning. what to expect here it --. yvonne: that is 40 minutes away. an estimate of four and a half billion dollars of deficit and ¥540 billion in the negative. in july, -2.2 billion in the trade talents. we are expecting a drop in exports. is down from 7.6% last month. we are seeing a flow in chinese economy, appreciation of that yen against the dollar. that will possibly hit exports and imports as well, shrinking expected to fall to a half
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percent. angie: that is coming up this after -- hour. coming up next, unsteady ground. guest things that china slowdown will pull the rug out from under the u.s. economy. stay with us, you are watching "first up." ♪
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angie: welcome back. you are watching "first up." i'm angie lau. it is the most closely watched fed meeting in years. traders and economists are divided on whether the central bank will raise rates. we have bloomberg's tom keene speaking to the head of the world's biggest hedge fund firm. tom, you had a busy hour talking radeldgewater is chair, euro. what was his forecast? guest: it was so fortunate to
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schedule this with ray dalio, not knowing this would be an historic if not the most historic fed meeting in ages. he was touching on what the fed will do and also of asia. let me begin with the fed. he makes very clear, he was not going to comment on the specific meeting tomorrow, but he did suggest all sorts of international events will consume the central bank of the world. keeping janet yellen and stanley fischer have immense challenges, tangential to what they see in a better american economy. ray is any a lot of time on china. you will see it across asia, near the 2:00 a.m. hour. kathleen hays, mike mckee will join me with an esteemed set of guests, all different and all divided on the debate on what
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the fed will do at 2:00 p.m. washington time tomorrow. and then, the idea of where do we go from there, and it has a lot to do with china. angie: absolutely, because the volatility we have been seeing in the markets has really dampened the bets that the fed is actually going to do something in september. everybody is waiting to hear on this side of the world, whether or not fomc decision is going to really create more volatility in emerging markets. guest: that is absolutely true. ray and many others suggesting the new globalization of financial markets and the shot of the continue distortion will reverberate across europe. tomorrow, draghi in frankfurt, and in japan that wonderful rapport on the credit rating markdown in tokyo. over to china, i want to make clear that mr. dalio is adamant
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that china is not a basket case. he spoke highly of their continued economic growth, and centered more on the structural shift the chinese economy has to have. he thinks they will get through challenges, thinking challenges, and political challenges. but the big challenge with china is the idea of moving from the investment led economy over to saidso many of your guests has to occur. he was very optimistic all in all in china. angie: how does he feel though, about the state intervention, and the fact that hedge fund is a bad word in china right now? guest: that's a very important point. we did have to ask the controversy of risk. he associated with bridgewater -- risk parity associated with bridgewater. he is adamant that risk how ready cash. he is not a lot of the challenge
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of volatility. there are many hedge funds that are naive about the structural that we are in -- you bet we are in, and also naive about the buildup of leverage. he is taking a very cautious approach. there has been some criticism to the mass of bridgewater and other risk parity hedge funds. angie: tom keene, we are going to leave it there. thank you for joining us. world's biggest hedge fund. we are going to tune into that that special -- fed special here in asia, it airs 2:00 a.m. hong kong and singapore time. 2:30 is the news conference. we will either stay up late, or get up early for that. let's get more on the fed decision with patrick javon it -- he joins us live from new york. just got off the line with tom
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keene. , china isis is basically causing a lot of ruffled feathers around the thinks butray dalio there is still a lot of upside. do you think the world has been unfairly critical of china? in thei'm kind of unusual position of saying that will be moreurn severe and last longer than most people imagine, but at the same time the global effect will be better than most people imagine. what is really taking place in china his the end of china's overinvestment boom. while that may be bad for some sectors, it actually doesn't affect other sectors in the u.s. economy, and is actually good for some sectors of the u.s. economy. -- i don'tnk that believe in the global doom and gloom scenario that a lot of people are painting, but i also think we should not underestimate just how serious
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this economic adjustment that china is going through will be. angie: i don't think that anybody doubts the fomc is taking it very seriously. do you think they will take it seriously enough to defer any rate hikes this month? guest: this is the interesting thing. some people look at commodity prices and say, aha, china slowdown must be deflationary and therefore the fed should back off because it is one more diminishment of global demand. i don't necessarily agree with that. i think that's one side of the equation. isfact, china's rebalancing about creating a new source of global demand from the chinese consumer. i don't think they should look at china and see that as a reason to hesitate to raise rates. angie: so you are calling for rate hike this month? will they do it? guest: i would prefer to see it,
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because, let me be clear. i'm not saying what i would like to see is a continued set of rate increases. a modest increase right now to get above the zero limit would be appropriate, given the strength of the domestic u.s. economy, and then hold and wait. that arehey will do not, i don't even think the goings of the fomc knew into the meeting necessarily what the outcome would be. i think there is a range of views, and room for persuasion within the fomc. what is interesting is this is the first actual decision coming from the yellen said. -- fed. plan andpreset flight they followed it. this is the moment they don't have a preset flight plan and they have to make a choice, that is separate from decisions made under bernanke. angie: as a strategist, no doubt
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you have a man eight, -- plan a, b, and c. plan a is ahead of the decision. what happens if they do raise rate hikes, and what do you do as an investor, and what if they don't? guest: i don't think actually the rate hike of 25 basis points, especially if it is not a prelude to further rate hikes actually matters as much as people imagine. it is a big psychological hurdle for the markets, and one that i would like to see the markets get over. at, if ways, if you look the u.s. it raises rates, that relieves pressure on europe and japan to engage in competitive devaluation to grab a piece of u.s. demand. u.s. doesn't raise rates, you get the same impact, it is just netted down. europe and japan faced greater pressure to ease.
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the gap between the u.s. and the rest of the world is not that much longer. it is just to move. i think it matters as much as people imagine it matters. right now,ently where are you overweight, underweight globally? guest: with emerging markets, we are looking at disparate impact of the china rebalancing story. there are some emerging markets that will be really hard hit by the commodity impact, and some by the commodity importers that will benefit a lot. the same within sectors in the united states. receptors in the united states that have been big losers. energy, materials, and to some degree industrials, especially to the degree they fed into resource development. i think they will continue to be hard-hit by china's rebalancing. ofthe other hand, six out the 10 sectors in the s&p 500
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earnings.r on year on a lot of people are ignoring that when they look at the overall index. angie: that is important. thank you for all of it as we await the fomc decision. coming up next, new zealand aiming to make rugby world history. we will get more on that ahead of the tournament's opening one "first up," returns. stay with us. ♪
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rugby world cup about to get underway in england. teams from around the globe have arrived to chase their dreams of glory. defending champions new zealand has been meeting fans. they are aiming to make read the history by becoming the first worldo win consecutive cup. their first game is sunday at wembley against argentina. the finalist of the previous training, france, are also set to go. the french media has been more critical when the players campaign -- complained about being kept up late by a noisy wedding party. we have faced a big setback with two of their key players rolled out with injuries. wales has been drawn in the so-called pool of death, alongside host england, and
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two-time champions australia. >> it will be a very very tough pool to qualify. we have to be at our best to win it. we have to be at our best for australia and uruguay. there's no doubt. angie: this is the eighth competition in the tournament's history. the first was in new zealand in 1987. 20 teams will compete in six weeks. the tournament has set a new ticket sales record, and is expected to set new viewing records. we are going to be bringing you updates threat the tournament right here on bl
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angie: it is 7:30 here in hong kong. day,gin another trading awaiting the fomc decision later today. away from thetes open of japan, australia and south korea. you are watching "first up." the top stories this hour. u.s. stocks a second day of gains overnight, rising to a four-week high. energy shares led the way after oil's biggest rally in two
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weeks, helping push main benchmarks to their highest levels since the middle of august. traders have a 30% chance the fed will raise rates in the meeting later today. signs of government intervention in the markets in china. 5%res in shanghai surging, in the last hour of trading wednesday. the shanghai composite had a today tech stock leading gains. the government has estimated to have spent nearly a quarter of a trillion dollars to prop up markets over the past three months. another setback for prime minister shinzo abe. the s&p cutting japan's long-term credit rating by one level of a plus. japan is now lower than china and south korea. it comes one day after they are faced with adding stimulus. ics will not be
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able to hold onto the economy in the next few years. breaking news. the u.s. geological survey revising, breaking news about eight she lay -- chile earthquake. it was just moments ago. 8.3 magnitude earthquake, that is a very large earthquake. reports, 236 kilometers northwest of the capital of santiago. there is a sin on the warning leght now in place from chi to hawaii. synonymy waves are also in place for ecuador to peru. the tsunami that generated by this earthquake could be very destructive on coastal areas when it hits, even though it is very far from the epicenter, that warning going out to hawaii right now. we will keep you updated on this
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8.3 magnitude earthquake that hit northwest of santiago, the capital of chile. we will keep you posted as soon as we get it. soon on the warning in place warningw as -- tsunami as far away as hawaii. let's chicken on the markets in asia. new zealand is climbing, extending gains fractionally. dollar, waiting and watching like every other currency. 63 u.s. cents is the level there. what will janet yellen and her crew do? let's get over to japan. futures pointing to a higher open. check out dollar yen remaining clady much -- pretty much unchanged.
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it is the most anticipated, if not the most important fed meeting in decades. everyone wants to know, will the central bank finally raise rates? michael mckee has a preview from new york. no one things a quarter-point move will affect the u.s. economy, but neither do they know the psychological impact of a change in direction, after almost seven years with effectivelyre at zero. with unemployment at 5.1%, stronger home sales, consumer spending and business investment, the case seems set. but china's equity bubble collapse, volatility in u.s. markets and a big drop in oil prices convinced investors it would be better to hold off. that would give the fed the opportunity to assess those developments on prospects for growth ahead. activate moves from the trading floor to defend conference room -- the fed conference room. no matter what they decide, the announcement will be complicated.
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they will release new economic forecasts, and a new. plot. if they hold off, what did they say? if they go, why and how investors will want the exit strategy and a good explanation. everybody wants the answer to the next question -- what did they do next? michael mckee, bloomberg, new york. the head of the world's biggest hedge fund firm think about the rate decision? in a conversation with bloomberg tom keene and michael mckee, lio says thes ray da u.s. is well-equipped to handle a crisis. reporter: ray, when we look at this, with allf the work you have done, all the experience you have, are
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these derivative strategies around bonds and equities able shock of thethe next stop fund? >> there are all sorts of embedded risks in different ways. all the time. i would say we are better able to withstand them then we have been before, there is less liquidity in the markets. there's a fair amount of essentially dynamic hedging. dynamic hedging is a way of insurance companies when they take their protection in terms of interest rate risk, that is an issue. by and large, i would say we are better able to withstand them, in terms of not the short-term volatility, but in terms like the bitter -- bigger moves we are better able to withstand them, provided we don't have a big event, like a tightening of monetary policy. what worries me is what the next
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downturn in the economy looks like, with asset prices where the lesser ability of central banks to ease monetary policy. reporter: some central bankers would say, if we raise rates now, we have ammunition. do you disagree? >> again, it is a restrictive policy. i don't care whether they raise 25 basis points. i don't care whether it moves along the curve. i don't see the reason for it. 2007, i was watching this incredible bubble have been. finance on a lot of debt. the fed just gave his attention to the gdp gap, and missed the whole bubble and we had an economic collapse. now there's a situation in the mid part of the cycle, trying to identify where inflation is. we have a lot of liquidity around. when i look at this, there is little limerick here and there
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-- glimmer is here and there, basically i think there are worried too much about the short-term debt cycle and not about the long-term. i don't get it, given asymmetrical risks. look at the world. we are in a world economy. tell me how many connie -- countries outside that should be tightening monetary policy. angie: you can watch the entire conversation with ray dalio at 12:00 p.m. hong kong singapore time. time now for a look at some of the top corporate stories. zeb eckert standing by. zeb: a major deal may be brewing for two of the world's biggest beer makers. plans to buylined a smaller rival. they have not made an offer yet, but they are open to talks. it would be the biggest in industries history, and the
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company would supply one out of every three beers sold globally. miller surge 20%. oracle is struggling to shift its business is online. revenue last quarter they'll sort of expectations because of a slowdown in software license sales. the shift is hurting its traditional business of software license sales. shares are following -- falling. apple has delayed the first major software update for apple watch after finding a bug in the operating system. it was scheduled to be rolled out today, including new functionality for the device. the problems have not affected , whichease of ios9 powers the iphone and ipad. the update will be available soon. those were the top corporate headlines this hour. i'm zeb eckert. angie: four-year dispute between
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suzuki and volkswagen is finally over. is buyingse carmaker back its stock. juliet has the details. is this the end of the chapter for a very ugly story? juliet: i think so. we know the relationship soured four years ago when suzuki said it will buy diesel engines from fiat. it is spending almost $4 billion to buy back shares. it is buying 122.8 million shares. shares were bought of yesterday's closing price. month, they forced vw to in suzuki.% stake angie: how are investors going to react to this? juliet: looking at the market, a lot of this is in the stock.
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yesterday it was up by 1.6%. we are looking at an open for 3876 yen. there was a big spike on august 31 one vw was ordered to sell its stake. was looking good, up at 7%. compare that to volkswagen shares in germany, they are down 20% over the last two months and five and half percent year today in germany. expecting a pick up in suzuki shares when they open in 20 minutes. angie: we are watching that. where 24 is icky -- there to for them? juliet: they say they will be very careful when they go into joint ventures. they will focus on india operations. india, by 2025, is expected to become the third largest car market in the world. suzuki says it will launch 20
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new cars in total over the next five years, 15 will be launched in india. it is facing a few hurdles in japan due to higher taxes, and it wants to explore new markets in africa and the middle east. going alone in focusing on that area in india. angie: interesting. thank you for that. we have breaking news. the chile earthquake -- it has been revised up to 8.3 magnitude. originally it was thought to have been 7.9. it is a much stronger earthquake then it had originally in measured -- been measured. it happened 246 kilometers northwest of the capital of santiago. it caused buildings to shake in santiago. there have been no reports of any injuries, but this is an
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ongoing story. tsunami warning in place from chile to hawaii. it would hit hawaii had 2:00 a.m. their local time. they have been warned that the could be verynami disruptive in coastal areas. warning center says waves over three meters -- meters is possible on the coast. we will update you as we get more details. you are watching "first up." a lot more after the break. ♪
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angie: checking other stories making headlines around the world. fired tear gasry and water cannons at refugees
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trying to break through a barrier on the southern border with serbia. hundreds of people have been trapped after hungary closed it on tuesday. a main entry point for those trying to get into the european union. the eu is dealing with the worst refugee crisis since the second world war. thousands are fleeing war in syria and iraq. warnednd the u.s. have pyongyang not to carry out any further nuclear tests. norths in response to korea saying it had upgraded atomic fuel plants, meaning it could possibly make more nuclear weapons. south korea said any test would elicit a sternberg -- response. launches a korea missile or test nuclear weapons, it is a brave -- grade provocation and military threat. it is squarely violating a u.n. security council resolution. angie: a philippine senator and
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daughter of one of the most famous film couples, hopes to replace the president when he leaves office next june. grace poe has announced she will run in the election, bringing the field to three people. she was picked as the best choice to steer the philippine economy. they may be the defending champions in rugby world cup favorites, but new zealand's all blacks will be forced to get changed on the bus before each game, due to sponsorship rules. let's go over to our sydney-based new zealander, paul allen. are theye world suffering and inconvenience like having to change on the bus? much like other major sporting events, there are incredibly tight rules on what can and can't be seen abound --
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around the stadiums. that is including logos. we will have a situation where they will be wearing sponsored gear at the training ground while they get on the bus, but when they got off the bus, they will not be wearing anymore. ther key sponsor is aig, american insurer. they were paid $80 million over six years. they obviously came to milk the exposure. the appeal is pretty clear, they have an amazing win percentage. since theys won started playing in 1903. if you go back to the last world cup in 2011, they lost only three games within four years. they are very successful. because of that, the value of their brand spikes. that is something the new zealand rugby football union does not comment on. the brand finance estimated about $197 million.
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all those superlatives aside, the all blacks save up their worst performances for the world cup, so for people like me, we are probably seeing the business of getting changed on the bus as some kind of horrible omen. angie: you know what, they get compensated pretty well. good luck to them. paul allen from sydney. let's go over to japan. breaking news from there. trade balance and import and export figures are crossing the terminal. let's go to yvonne man for the details. yvonne: we're still waiting for those figures, but just a preview, we are expecting the trade balance is going to the deficit, is going to widen. the widest trade deficit since january, the most in seven ¥540 billion is the forecast. billion for the month of
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august. prior to that, we saw a much narrower one, 2.1 -- $2.2 billion. in terms of exports, expected to fall from july. here comes right now. trade balance coming in, $569.7 billion negative -- yen, sorry. balance.r the trade wider than expected. ¥570 billion. we are seeing exports for your on your, rising 3.1%. that was amiss, expecting 4.3% of growth. imports, still a negative territory, more in the red. 3.1% down into point -- in
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imports. the china slowdown is a key factor. japan really relies on china in consuming its exports. they ship 21% of products to the mainland. with the weakening chinese economy, it is going to further worsen the trade balance or japan -- to mention the exports, that was a primary contributor of contraction we saw for second-quarter gdp. depreciation of the yen against the u.s. dollar and yuan, hitting exports ready hard. 120. 56 for the young right now. angie: more breaking news. an update for you. we have heard from the chile interior minister, saying the coastal border area must all the evacuated.
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there are large aftershocks tsunami, a suno me -- warning has issued from chile all the way to hawaii. based on all available data, it is expected to be a very with waves tsunami as much as three meters above the tide. chileans across the country in coastal areas are warned to evacuate the area. earthquakeitude hitting this hour. a lot more coming up on "first up," including details of the earthquake, and looking ahead to the fomc decision. stay with us. you are watching "first up." ♪ ♪
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angie: welcome to the stock exchange. we are taking a look ahead to the opened in australia, japan
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and south korea. we had our intrepid reporters to tell us what stocks to keep an eye on. a clothing company in japan, also in taiwan, hong kong, and type -- korea, and it has a pretty impressive profit. ¥7.9 billion, sales also beating target. stock is up 131%. there, maybe for investors. what are you shopping for? zeb: i'm shopping for mobile phones at docomo. rates are going down. i wonder if this is in response to high interest rates. rate plan will be offered, and if you bought it you would be up 21% in stocks.
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shery ahn: first-quarter operating profit up, stocks declining. maybe a possibility for the outside. we will see what happens. angie: thank you. that is the verdict from the stock exchange. these are based on news events. we will be back in an hour to see how the stocks have done. we want to bring you back to chile and the 8.3 magnitude earthquake. these are pictures right now of people just worried about all of the aftershocks, which are predicted to be very very strong. kilometersed 246 northwest of the capital of santiago, where there were buildings swaying. now,ic in santiago right very concerned, swinging chandeliers there. afters in new york rising
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the earthquake. it was revised up to 8.3 magnitude from 7.9. nami morning.
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angie: down in the dumps. the day after s&p's downgrade, japan's latest figures fall short of forecasts. less than 24 hours to go until the key rate decision. .ngie: welcome to "first up" i am angie lau.
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japan's trade deficit wider than expected. disappointing news all around. it is not looking good. it validates the downgrade for credit. some would say the credit rating agencies are playing catch-up. deficit -- negative territory for quite some time now. the deficit coming in at $4.7 billion in the red. was -$4.5 billion. we did see $2.2 billion trade deficit the month before. we see the china slowdown continuing to wait on the japanese economy. japan depends on china for as boards -- exports, 21%.
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it will further weaken the trade balance as well. imports coming in below estimates as well. exports as well. net exports, a big contributor to why we saw gdp for japan contract. we are continuing to see this be a big factor here. the numbers are not looking good. the s&p going the right way. angie: it underlines the criticism, what happened to the fiscal policy? policy the monetary entire time. it does not appear to be working. of the yeneciation against the dollar hit exports hard. the currency against the u.s. dollar appreciated it 2% in august. that's why we are seeing export numbers weaker. -- the currency against the u.s. dollar appreciated by 2% in
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august. it will take longer than expected. it will not turn around things in 2-3 years. lackluster recovery in the second half so far. a day or two after the boj cap policy on hold because they were betting on the resumption of growth, as well as reflation. when it comes to deflationary pressures, we are still seeing that. to do ae pressure credible fiscal plan. angie: got you. thank you for that. markets in japan opening. let's see how they are reacting to data. steady at is holding the mid 120 level -- mid-120 level. it is now back. yen prettyng the stable in the 120 range for this year. we have seen a rise of 14% this
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although economists do expected to fall 5% in 2016. we are seeing equity markets, investors cautious here. the nikkei rising more than 1%, but investors are more cautious with japanese stocks. globalportion of investors are overweight, and japanese stocks have declined 18% this month. gaining afterd gdp data out of the country showing growth accelerated less than forecast. missing estimates. the markets boosted by gains in oil prices, boosting energy shares. same thing happen with a u.s. markets now closing higher overnight.
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it was helped by those energy stocks. everything in the u.s. this week has been about the fed. traders pricing and a possible rate hike. that is affecting the $13 trillion u.s. treasury market. we are seeing two-year u.s. -- the highest since the second quarter of 2011. back to you. angie: thank you so much for that. by an eight .3 magnitude earthquake. magnitude earthquake. these are the images we are seeing on the screen now. we are seeing these from television stations across the country. cong, bute there is very much concern as people flooded into the streets, the be in as the
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aftershocks of this 8.3 magnitude earthquake roll-on. -- roll on. it is the southern coast of chile. it is now 9:05 p.m. local time in chile. it occurred to hundred 40 kilometers from santiago. -- 240 kilometers from santiago. the pacific tsunami warning center said there could be wide-spread synonymy waves possible along the coast of chile and peru. we have the interior ministry of an evacuation order for all coastal residents, must be evacuated. in thefutures climbing
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last hour. world's largest copper producer, one third of production. people are getting into the streets. they are essentially waking things out. are causing a little congestion in the city of santiago. emergency workers there -- we are still waiting to see whether there are reports of injuries or deaths. again, watching this closely, 8.3 magnitude earthquake hitting chile right now. new zealand among nations issuing synonymy warning. , itd on all available data could be very destructive on coastal areas, even far from the epicenter. predictions, three-meter waves above tide,
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three-meter waves above tide predicted. issuing a synonymy warning there. inis 9:07 p.m. local time chile. residents from coastal areas making their way away from the coast because it is expected to be very damaging in dean. a lot of modern-day technology means that we have warning now, pacific tsunami warning center issuing that, very constructive indeed. copper futures climbing now. e by 8.3 earthquake. whether the largest copper producer will be affected, mines have been affected. live pictures streaming through from television stations across chile.
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chile has been hit by a multitude of earthquakes. this is something that chileans are used to. one did cost very excessive damage and a lot of foot ptolemies. ofle they -- a lot fatalities. precaution is almost immediately, you see. traffic is congested as people make their way away from the coastal area. we are joined live from our bloomberg santiago bureau chief on the scene right now for us. when did you feel the earthquake and what is happening right now? >> the earthquake came in the early evening. -- well over one minute, probably two minutes, the longest i have felt for some time. so intense and santiago because we are a few hundred kilometers away from the epicenter.
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through santiago afterwards, and it was no immediate damage. , we've further north been hearing there has been damage, quite a few walls and houses down, but we have not heard of any deaths yet. angie: how about injuries, philip? >> we have not heard of anything to, but it is quite possible have people hurt further north and we have not heard about it yet. sorry? angie: what is the government's response now? is getimmediate response people away from the coast. there is us and not me warning along the entire length of chile. they're calling on everyone to get away from the coast. mistake -- was a
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mistake, and they were wrong. quite a few people died as a result, a few hundred people. this time they are being cautious, getting everyone away from the coast immediately, asking people to walk and not drive. they don't want to stop people from getting away. that is the government's principal priority. angie: we are seeing a lot of people flood into the sheets -- streets, a lot of actor -- aftershocks being felt. >> we have felt one. whether there have been smaller ones up north, i don't know. this earthquake must be a good 500 kilometers north of santiago , in between here and the copper mines in the far north. angie: ok.
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wondering about those copper mines. we saw a spike in copper futures right now. investors probably wondering what effect it had on the copper mines. >> we are trying to get through them now. we know one is fine. most of the really big ones are further north. the really mammoth copper mines are further north, even further from the epicenter than santiago. most of these copper mines are open pits, big ones. second,ld hope for a but i doubt if the damages to o bad. angie: that is great insight though in a breaking story,
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where we are getting very little information. mines likely will not have sustained a lot of damage. ity checked with one, and seems to be ok, but of course copper futures, investors unsure. stay tuned to bloomberg television because we are on top of this story from the human angle as well as the business one. what we know, 9:13 local time, 8.3 magnitude hit 246 kilometers from santiago, shaking buildings, swaying buildings, and everyone along the coastal area has been told to evacuate the area. more as we have it. back to china, casting its net wider in its market manipulation pro. the chairman of the securities regulator.
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-- in its market manipulation program. is this a way of purifying the market? i was talking with the president of citic securities, snared as well for insider trading allegations. now we know the assistant chairman of the regulator, china's regulatory commission, for severe disciplinary forations, a euphemism crimes, corruption, insider trading. we don't know the precise charges. this is a big fish. he is the assistant chairman. there are three assistant chairman. he is in the top echelons of the leadership at the securities regulators. it's not just the corporate being called in. it is also the government regulators. he is the former general manager of the shanghai stock exchange. this is a big fish. capital in hong kong
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says the government is sending a strong signal, not allowing any profit-taking activities while they clean up the market. "purify"the term markets yesterday. angie: up 5%? >> you can see the intervention. this is a great photograph here. are waiting. they are expecting government support to come in if it crosses the support level of 3000 on the shanghai composite index. this is what it did yesterday. highly suspected that government intervention happen yesterday. 7.2%, biggest on record yesterday. maybe people just wait and wait. angie: thank you so much for
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that. next, we've got a what it is china and going to do. this is "first up". back in two. stay with us. ♪
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breaking news, update on 8.3 magnitude earthquake that hit chile, reporting one death. a fatality occurred there. just one so far. you can see from the images on television's across the country that it caused a lot of panic. people are now walking and driving away from the coastal areas as an evacuation order has been put forth by the interior
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minister saying that there could veryry dangerous and destructive on coastal areas far from the epicenter, the pacific warning synonymy -- tsunami center. chile.thquake hitting there has been one death so far. we are monitoring this very closely. this is not over. aftershocks continue to plague chile right now, including a synonymy warning. -- including tsunami warning. kicking off today.
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cross over live to the event. that second asian summit kicking off today. who do you have? >> a very special guest. good morning from the summit. lots of issues being discussed, inluding turmoil, volatility the market. one issue contribute in to the volatility is whether the fed will raise rates are not. is a preoccupation with the great decision. there shouldn't be. why? >> it's not really a change in rates. it is a question of how high rates will go. it is an excuse today. whether they raise them or not, what difference does it make today? >> if it doesn't make a difference, raise it, and we can
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all move on. is there some truth in that? >> there is. if they raise them, they say they will go slow. if not, they will tell you in the next few months. we should be more focused on the fundamental issues occurring. i think that is what we try to do at the conferences. puts on 150nstitute events a year, and luckily i don't go to all of them. >> you talk about fundamentals, are the fundamentals in the u.s. economy in place? is it as strong as people make it out to be? >> i think the fundamentals are there because of safety, rule of , universalty rights suffering, many issues which come under social capital. in more advanced financial technology system, where the system is financed by the public
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and private markets, not the banking system. 50 years ago, when i started focusing on this area, that exist, and other countries where the banking system is a much more important determinate. in the 1980's in the united states, the economy grew tremendously even though the banking system trunk. i think that is one of the elements. -- even though the banking system shrunk. class and their , and we, tutoring, etc. are here in our country that was built under the concept of human capital, and if you educate your citizens and attract the best and most educated and most talented from around the world, you can build a great country. >> just to come back to the u.s. economy, growth and unemployment, the two things that fed are looking at.
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your views on that. is unemployment on where it should be? does it reflect the true picture? the trues not reflect picture because so many people have dropped out of the workforce. there are two elements we need to look at that are potentially --citing and thi one is technology and what it does to job creation, and the ,ther is agriculture changes, and what it does. if you deploy modern agricultural techniques, substantial less water, far greater productivity. that might cost 500 million jobs. what are the people in sub-saharan asia, south asia comes sub-saharan africa, excuse --, sub-saharan africa,
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excuse me. 1900, lessed states, than 40% in a culture. young the keys from people, is can i have a meaningful life. in the united states, 19 hundred, less than 40% in agriculture. -- 1900, less than 40% in agriculture. we will leave it there for a moment. we will be coming back for more from the milken institute. we will leave and therefore a moment. we will be coming back for more from the milking institute. we will have more. stay with us. you are watching "first up". ♪
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the only way to get better is to challenge yourself, and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20.
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it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. angie: it is a 30 p.m. in singapore -- 8:30 a.m. in singapore, and the haze continues to grow. we are counting it down to the open of trading there in half an hour. breaking news, first data set its power.panded 8.4% in august from a year ago. were expecting a lower export figure. we will have more when markets open there. ♪
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angie: the top story, japan tradeed its fifth monthly deficit at $4.7 billion in august. imports and exports missed estimates. imports rose 3.1% on year. by the same amount. we will clarify that later. the data comes one day after japan's credit rating was cut one level by standard & poor's. china's crackdown has ensnared another official, the securities regulator. fors being investigated severe disciplinary violations. he is not the only official facing scrutiny. investor protection
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is also under investigation. to government has about down clamp down and p are five markets. purify stock markets. traders are pricing in a 30% chance that the fed will raise rates when the meeting ends later today. goldman sachs that markets are vulnerable because no one can agree. lloyd blank find says u.s. blankfeinata -- lloyd says u.s. economic data does not support arrays. we continue the conversation with mike milken. >> we want to talk about volatility. that is one of the focuses. is china responsible for the volatility? >> i think the world was
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shocked. the idea that china's currency would go down versus the dollar, when it had gone up for so long. that was a shock. the volatility causes this change. theseore, china, many of have been the best places to invest. we have to remember that the shanghai exchange in 2014 was 2000. today, it is 3200. it has been a fantastic investment. the spiking and drop that caused the volatility. there are two things we need to and not get so focused on the events of the day. and medicalhealth research is accountable for all growth. in lifeease
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expectancy. second, education. citizens educated your , there will be a great future for your country. one of the thing that china has done is make an enormous investment in education. what does the united states have? law,l capital, rule of property rights. why up until the 1980's were 80% of all oil wells drilled in the united states, because you own the rights, natural resources, so the united states and western europe benefit from social capital. asia benefits from human capital. >> i want to german quickly. the concern -- i want to jump in quickly.
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the concern is that it's growing at a slower haze. -- slower rate. >> wouldn't the united states love to grow at 4%. 4% of a $10 trillion economy is $400 billion. that incremental growth exceeds what it was 10-15 years ago. chinad with the fact that is asian. the number of the people in the workforce is going down in china. the number of people between 15-30 might drop as much as 20% and in the next 10-15 years. those are the issues. the investment in the education by the citizens -- the exciting education issia is a consumer product.
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the families are focused on tutoring and educating their children, allocating 15% of their income to that. in the united states, they only allocate 2% in the middle class, a governments product. this is one of the challenges we have in the united states. china will grow slower. things inlken putting perspective for us. 4% growth, the united states would love that. back to you. angie: we certainly would. thanks for that. breaking news, 8.3 magnitude earthquake hitting chile this past hour. pacificus live is the synonymy warning center. we are seeing images by television stations across the country as to the destruction interior wise. there has been one reported
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fatality. what is next. ? >> we did have that large earthquake off the coast of chile. they are evacuating the coastline as quickly as possible. what looks like a wave emanating off the coast and could become a pacific wide tsunami. we have some preliminary wave reports of anywhere from 1-10 islitude in waves, so there potential for pacific-wide tsunami. what is the damage that can because by waves of up to 10 feet tall? >> it would be catastrophic. angie: catastrophic to buildings, lives, anybody in the coastal area? >> right, anyone along the coastal plain with a large of
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sunol not meet needs to evacuate immediately. tsunami needs to evacuate immediately. -feet-highs tsunamis, put it into context for us. >> i can't speak to historical tsunamis. we do have more along the lines of one-five feet for the rest of our observations and so far. we don't want to go overboard and predict a catastrophic tsunami, but we do have waves coming off of the earthquake, so we will monitor it and put out watches and warnings as necessary. tsunamiynonymy -- warnings have been issued from
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chile to hawaii. >> we have a watch in place for hawaii. that will be updated as the wave --ches our synonymy synonymy buoys off the coast. we will get a better handle on where the wave is going and how tall. angie: ecuador, peru, and new zealand have also issued soon on me -- issued warnings. watch out for the pacific, which is different than a warning, meaning it is still being evaluated. all governments should take notice and start preparing for if a warning is issued for those areas. angie: if a warning is issued, evacuations? governments all the
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have their preparations and are ready for things. angie: thank you so much. the pacific tsunami warning center. feet above tide level after earthquake hit chile northwest of santiago. more as it comes. coming up next, as the fed meets to discuss a rate hike, our guest says it will not happen this week. we will discuss why when "first up" returns after the short break. ♪
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>> it's thursday, september 17, these are your headlines.
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china seeking antidote for capital outflows. authorities making it easier for companies to borrow abroad and bring money back. the national development and reform commission says it will remove the quota system for companies that issue certain international bonds and loans. it will only require registration, rather than application for borrowing. the dollar continues to fall betnst major peers as most that the federal reserve will hold off. fund futures show the likelihood receding. they will increase the benchmark the likelihood is receiving that they will increase the benchmark rates. the nation's economy grew more slowly and the second quarter than analysts had predicted. the prospect of a rate hike in new zealand, while australia stays on hold, is encouraging
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banks to bet. say they will cut the benchmark to 2.5% next month, week in -- weakening its currency. saying that inso the next three months that they expect it arising. -- expected to rise. dollar plunging in the last two sessions. in the last session, more than 5%. .e are seeing it down again of a chance of a likelihood that the fed will hike rates this week. those are the stories of driving the market this morning. angie: will they or won't they? that is the question, isn't it?
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my next guest it does not expected the head to raise rates. are feeling it. will they or won't they? >> we think the conditions are materializing to justify before the end of the year, so december. this week's decision, there are factors that the fed has to consider. verticaln't been a minimum massive wage inflation in the u.s. that tips the dual mandate, growth and inflation. decidedly towards inflation. global financial market turmoil. although the fed does not take other global economies into consideration, there is a worry that it can wash up in the form of higher credit spreads,
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consumer confidence or business confidence problems. angie: is that why we are seeing pressure on the u.s. dollar. ? >> if the fed is not going to rush into a rate hike this week, the dollar will get some relief from premature tightening concerns. the dollar is backing off a bit. that also creates somewhat easier conditions around the rest of the world. the market currencies are not capitulating the way they were. space or a bit more maneuvering room for central banks. thee: how do you factor in people's bank of china coming in, intervening, intervening in the equity markets as well. >> we are eager to see china get out of the business of propping up equities.
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the reason for volatility in the asian market has been because the chinese authorities have decided to clear as much leverage out of the system as they can, put more of those suspended stocks back into trading status, allowing would-be sellers to sell their stocks. that's allowing the market to get to what we can consider true clearing levels and find a real bottom, after which we can start looking for a rally. angie: you don't know when or if it will continue to see prop ups. >> true. a great deal of the margin- financed leverage positions have been blown out at this point. angie: does this mean you're willing to get back in? market issaying this bumping along the bottom. china stocks could find support we do not expect the
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chinese macroeconomic data to deteriorate. versus markets that we think are poised for a hard landing. you won't get the bad news that the market is expecting. anondly, we do have expectation of a more pro-reform message. angie: presumably that could mean more dollars for infrastructure projects or the like. which sectors do you like? which sectors are in play in your opinion? >> we want to focus on the durability of domestic consumption. august data did come down. expenditure by the retail sales numbers is holding up great, so we like the mass-market consumer themes, not so much luxury. angie: affordable luxury these days.
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good to talk to you. equities.d of come back anytime. thank you for that. checking other stories making headlines. police and hungry fired tear gas and water cannons at refugees. hundreds of people have been trapped at the crossing after hungry closed it on tuesday. it had been a main entry port for those trying to get into the european union. it is dealing with the worst refugee crisis since world war ii. south korea and the united states have warned north korea not to carry out further nuclear test in response to claims it had upgraded and restarted all atomic plans, meaning it could make more nuclear weapons. wouldkorea said any test elicit a response. if north korea launches a
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missile or test nuclear weapons, it is a grave provocation and a military threat. it is an act of violating a un security council resolution. malaysia haveand broken up a pro-government rally after attack by protesters. thousands gabbert in the capital to show support for the government and uphold it. the prime minister is under pressure to resign over a $700 million financial schedule. the rally was held to counter a protest by opposition supporters. aming up next, shares of japanese retailer are getting a boost after it doubled its profit forecast. we will look at at market numbers when we come back. ♪
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angie: checking top headlines
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this morning, the biggest u.s. holder of debt cutting back. china reduces holdings of u.s. treasuries $30.4 billion. the most in two years. $1.24 trillion of treasury. efforts -- upof efforts to defend its currency. glencore shares surged, a $10 billion debt reduction program, announced plans to sell assets. for their brewing makers. the company that makes budweiser plans to buy a b miller.
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miller. they have not made an offer yet. it would be the biggest and industry history, and together the company would supply one out of every three beers sold globally. sab surged. inbev also gained. ♪ angie: welcome to the stock exchange. let's check with our reporters in asia. >> it came through with it profit.olid that is five out of five. down 7.2%. angie: they are not shopping at
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that company. the one they are buying is nt t. introducing a flat-rate plan, pleasing mobile coasters and took a low. >> i'm out of the country. down 3%. operating profit jumped 21%. sales are up 12%. the recommendations from analysts are good. angie: let's look at the silver lining. it is on sale now. that's the verdict from the exchange. congratulations to you.
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♪ angie: trending business is coming up next. >> willow bay, long day, that is the question they are asking. we will find out in 24 hours. they, thaty or won't is the question. if evacuation process and coastal areas. we will keep an eye on that. -- an evacuation process in coastal areas. stepmother of bill gates, philanthropist, historian, architect. chinese scholar as well.
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a foundation. interviewing her. angie: good stuff. ♪
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>> this is charlie rose. >> stephen breyer is here. served on bench for more than two decades. the new book, court and the world. explores politically contentious question. role of foreign law in american judicial decisions. argues that global interdependence leaves courts no choice but to consider laws beyond the national border. supreme court concluded historical term


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