tv First Up With Angie Lau Bloomberg September 22, 2015 7:00pm-8:01pm EDT
♪ angie: land of opportunity -- china's president arrives in the u.s. talking about market reforms and foreign investment. to face asure -- ceo ford showdown over the volkswagen showdown. we get hands-on with the new iphone model and give a verdict on whether it is worth upgrading. welcome to first up. i'm angie lau coming to you live from bloomberg's asian
headquarters in hong kong. let's check in on markets in asia right now. to new zealand following wall street selloff. new zealand is a quarter of 1% off. the new zealand dollar spot at $.62. counting down the openings of australia, korea and one closed market to tell you about. it is a public market in japan -- public holiday in japan to know trading today. china's president has begun the first leg of his much-anticipated visit to the united states. he is currently in seattle where in one hour he will deliver what is being billed a major policy speech in front of u.s. business and government officials. we have got bloombergs raimi there for us live from seattle. what is happening right now? raimi: good morning. and good evening from seattle. right now, i'm standing outside
the westin. right here in about one hour, we are expecting the chinese president to give his first policy address of his seven-day stay. he will be talking to u.s. government and business leaders and possible topics on the agenda -- it could include bilateral trade, technology which could include cyber espionage and greater market access. we will be here for the next few hours, seeing what comes out of the policy address. after that, we will bring you the latest. heking ahead to tomorrow, has a very full day of business meetings up north. campus visit microsoft's as well as boeing's factory facility and a visit to tacoma. angie: he did fly into seattle on a boeing 747 to be exact. why did he choose seattle?
ramy: that is a good question. you would think the president of china my first go to d.c. or new york or california. instead, he came to washington state and that is because of massive exports that come from washington state and go to china. $29 billion each and every single year. what does that include? that includes boeing planes, $21 billion worth goes every single year and that is rising. that accounts for about 72% of export. on top of that, agricultural soybeans-- wheat, and apples are huge favorites of people in china. because of business, ag, technology and the president wants to show face and drum up more business. angie: from washington state to washington, d.c., what is on the agenda when he meets obama?
ramy: looking ahead to when he ons to d.c., that happens thursday, september 24. he meets president obama and meets in in the oval office. there will be a state dinner. they will be talking about major issues that you guys in asia know. one cyber espionage between the u.s. and china which has been a huge deal. two, south china sea territorial issues. china has claimed about 4/5 of the sea which has angered vietnam and the philippines and north asian neighbors of japan and south korea and the u.s. military has been watching. in addition to that, climate change may be an issue. the u.s. and beijing -- and china are the number one and number two biggest co2 emitters. we will be watching and waiting. back to you. angie: thank you for that. live from seattle following the
chinese president. lloyd willines -- undergo chemotherapy for a highly curable form of lymphoma. he will lead the firm as normal. he has not given details on which form of lymphoma he has, but he says the biopsy on monday confirmed the cancer. has survived an attempt to remove him as chairman. he remains chairman and ceo after winning about 63% of the vote during a special meeting. advisers argued more independent oversight was needed as bank of america stocks lag. deserves the votes after resolving legal cases. winterkornceo martin will get his chance to make his case on the panel that will vote
on his future. pressure is building over the scandal that saw diesel cars designed to cheat u.s. air pollution tests which are down 30% since the story broke. shery ahn has the details. they designed this software that intentionally cheated. shery: 11 million cars affected. a critical point in this discussion will be to find out what winterkorn knew about this scheme. as ceo, he is in charge of product strategies so he is in the center of the storm. vw is getting a lot of pressure from inside the u.s.. the justice department is going ahead with a probe. the german government and environment canada are opening their own investigations. the supervisory board made of 20 people already met winterkorn yesterday. they are planning to meet again today and will probably continue talking through the rest of the week.
this scandal has already hit vw in a big way. their stock down more than 30% which is about $27 billion of market value, just erased since the scandal. we are not only talking about we are also talking about everyone involved. auto parts suppliers. they are falling the most in eight months. angie: that is huge. saw it put pressure on u.s. equities with auto shares going down. if winterkorn does not saw surv, who will replace him? -- this isy point is not the first time he has faced challenges to his leadership. in april, we saw his former speaking -- it failed because key figures in his company backed winterkorn.
that is not happening this time around. since the scandal broke, we are not seeing key figures backing the ceo. a source is telling us that if he were to go, he could be replaced by matias mueller who is the head of the porsche brand. angie: thank you for that. it was a volatile ses sion in wall street thanks in part to vw as the commodities resumed. we have su keenan with all the details. su: macro uncertainty, as one strategist said, and little fundamentals created a situation where there is a rise in volatility, it leads to investor on synergy. any bad news can shake things up. and commodities from
energies to precious metals joining the global selloff. we have renewed concerns about china's strength which brought renewables tumbling. and commodities from energies to preciousgoing to a t the dollar. you have some serious concern. as one analyst said, there is a growing realization that the impact of a slowdown in growth hits commodities and the commodity driven economies very hard. take a listen. economicowdown in growth in china might affect russian economy, not only because of the link, but because of the international exports. generally, i think the key issue for russia is dependence on oil prices and other commodity prices. -- the commodity spotlight oil continues to slide although it is above $45 a barrel. is never coming back, according to one company. we have economic data which did not help the bearish sentiment.
richmond manufacturing survey for september -- the mid-atlantic portion of the country falling to -5. the new orders index fell to -12. needless to say, currencies were front and center. the dollar reaching its strongest level in almost two weeks against the euro and that is against expectations in the u.s. and in europe. also, a lot of focus on the vix which jumped 11% which is the most in a month. angie, that continues to signal an uptick in the volatility. back to you. angie: you can say that again, su keenan. thank you for watching all of that for us out of new york. coming up, it is all in the timing. our next guest says it is not china dependent when it comes to rate hikes. we will discuss that and more with wells fargo funds after
angie: checking the stories making headlines -- the eu interior ministers agreed to shelter 125,000 refugees. west european nations backed the plan for coders which were hungary, checklist of off year and romania -- czechoslovakia and romania. it is not clear if they will be compelled for taking and migrants or if they will be punished for not doing hungary,f off so. it is just a fraction of the estimated one million people who may enter europe over the next year. japanvernor of okinawa in is taking his fight against the relocation of u.s. military base all the way to the united nations. human rights.n. council that okinawa's wishes are being ignored. the japanese and u.s.
governments have agreed to move the base to a less populated part of okinawa after decades of tension with locals. australia noted to take sides in territorial disputes after the new prime minister accused beijing of posting the -- pushing the envelope with its land reclamation activities in the south china sea. he says australia should respect negotiations over the dispute. china has been reclaiming land and building infrastructure on islands in waters also claimed by several southeast asian countries. another day of volatility on wall street and what will asia bring today? let's get more with brian jacobson, chief portfolio manager at wells fargo who joins us from wisconsin. it is not usually vw or something like that which would when markets but
are this volatile, i guess it does, brian. brian: it is always something that will move the markets which makes it very exciting for us. vw affectedtory of the rest of the automobile industry overall. it was also a commodities story -- as material stocks declined. later on, we will get the new pmi numbers out of china. also, what will president chi lineup in one hour. it is lots of worry and concerns by investors, but for myself, i'm not worried about the longer-term economic outlook either for china or the united states. i think both are unfairly solid -- on fairly solid foundations. i remain optimistic about commodity markets overall globally. angie: your confidence is very
rare for a market man, because what we are seeing in terms of volatility -- climbed 11% on the vix in chicago. what will help clear up the indecision we are seeing? i'm glad you said that. indecision in the marketplace -- investor psychology shifted from being very resilient over the last few years to being very brittle just recently. stock market correction will do that to you. it shifts the psychology a little bit. the thing i think we need to see is confirming evidence that china is not slowing faster than what people were originally fearing. i think we also need to have words of reassurance from policymakers, whether that is janet yellen when she is speaking later this week or mario draghi when he is speaking in front of the european parliament, to talk about what the economic outlook actually is. one of the things i think the market reacted negatively to on
thursday was they misinterpreted what janet yellen was saying. they were in misinterpreting and saying we are worried about china, when in fact they were saying we are not in a hurry to hike, so we might as well wait. it was a prudent risk management strategy by the fed and not reflecting worries or concerns about economic growth. angie: we are about to start market day in asia. do you think there is a possibility that gigi and pings policy speech will move markets? brian: it might. it is not unheard of for policy speeches or tweets from political candidates to move markets. i think the president, what he said, as far as he lays out some reform measures or proposing a sneak peak about what might be talked about when they meet in october, that could be a market moving event. i would really like to hear from
the president that they are planning on further market deepening, further relying on markets that allocate production and distribution of goods and services, as opposed to brag -- backtracking on the reforms. what got me nervous about china was the government intervention to try to prop up the securities market because all of a sudden they reverted to their old ways of command and control. i would like to hear words of reassurance is followed by actual action that they will rely on market forces more than just government dictates. angie: you think yellen will be listening closely as well? brian: i think she does. i think she is always aware of what is going on internationally whether it is china, russia, europe, what have you. one of the things i found interesting about some of the commentary coming out after the federal reserve's announcement was people talking about how it is a new thing how the fed is suddenly waiting because of international development.
it is not a new thing. all you have to do is look at the minutes of the meetings that the fed has had going back to the 1980's and 1970's and you will see they always talk about international development. international markets, economy's market -- matter to the u.s.. today they matter more than back in 2004 when the fed was raising rates the last time or 1997. exports as a percentage of u.s. gdp, the financial market linkages are more important now and i think it is showing the fed has learned from past mistakes where they have ignored international developments to their detriment. they did not want to make that same mistake this time. angie: brian jacobson, thank you. live from wisconsin. up next, is now the outside but what is on the inside that matters. our review of the latest iphone
angie: back to action in the rugby world cup with japan hoping to make it to an a row when they take on scotland. the team known as the brave blossoms grab the world's attention with their shocking defeat of south africa. it is being called one of the greatest sporting upsets of all time. the official world cup store in london closed early after the
matchup with japanese fans seeking a souvenir. scotland has not yet played and it will be feeling fresh for the round one match. tonight, australia makes their tournament debut against cg. the wallabies are ranked number two in the world behind new zealand but seven of the teams will be making the world cup debuts. who lost face fiji their opening match against england. let's take a look at all of today's pictures. ♪ the countdown is on for apple fans. with the latest iphone set to
make its way into early adopters on friday morning in asia. nothing looks that different from the outside, but as sam grobart explains, it is what is inside the phone that counts. sam: this is the new iphone 6s and plus. should you buy one? yeah, probably. eight years since it debuted, it still think the iphone is the best smartphone you can buy. android phones have made tremendous improvements and apple has deftly made some missteps, but the way apple is able to develop the hardware and software together still makes for the best user experience. these new s models are typical of the two-year product cycle. nothing is terribly different on the outside, but a lot has changed inside. let's start with the display. apple added another dimension to multitouch and called it 3-d touch.
basically, if you press harder than normal, you can pull up shortcuts for different apps. it is like right-click on your mouse. first, 3-d touch does take a little getting used to. push the wrong way, and you wind up getting teh apps to do the jiggling thing. there is the matter of what you can do with 3-d uch. right now, things are limited. it is better that i can preview a mail message in my inbox or jump to a new note, but other uses are more questionable. who exactly needs a shortcut to call up a private browsing page? fortunately, apple is allowing third-party developers to use the technology so we may see clever applications in the future. the other big change have to do with the cameras. the rear facing ones have been upgraded to 12 negative so and can shoot altra high-resolution 4k video. it can also take a new type of picture called live photo which captures the moment before and
after the shutter has been released. one thought about all the live photos and video, it takes a more room on your phone so if you are in the apple store, walked past the 16 gigabyte model and get an iphone with more storage. the front facing camera can take better selfies thanks to a display that acts like a flash. it will even match the ambient color of the room so you don't look like a zombie. what makes these the best smartphones you can buy are the fundamentals. fast as iscessor is the touch id sensor which works instantly. there is also improvements thanks to the new operating system ios9. you can activate a battery saving low-power mode, get directions on maps and buy things faster thanks to improved search in siri. new features are what usually get the headlines, but it is the behind the scenes upgrades what really matter. thanks to fast hardware and
well-designed software, these iphones begin to fade away and let you focus on what you are doing. the best things about the new iphone 6s and plus are not the new things that grab your attention, it is all the stuff in the background that you never noticed. vw's dieselg up, scandal widens and the ceo may face a showdown at the board meeting. we will have more on that when we come back. you are watching "first up." back in two. ♪ 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,
angie: it is 7:30 a.m. here in hong kong and what a beautiful view. day. a beautiful blue harbor, blue skies, sunny day. but, could be red in the markets today. we are 30 minutes away from the opening in south korea and australia. you are watching "first up." ♪ the top stories this hour -- china's president has arrived in
the u.s. on his first state visit. cyber security is one of the issues expected to dominate talks with barack obama later this week. they will try to reach an agreement on limiting certain types of -- state media says he leads to speed up -- promises to speed up reforms. volkswagen ceo martin winterkorn will get his chance to make his case later today before the automakers executive committee. the key question is how much did he know about the scheme designed to dupe u.s. regulators and drivers over pollutions from vw's diesel engines. 11 meeting -- 11 million vehicles may be involved and the share prices dived more than 30%. the global commodities round continues to hurt mining scots. it tumbles more than 10% in london. it is the worst performer on the market. this year
. minerals fell overnight. mining companies are suffering over the lowest commodity prices in over a decade and view signs of a turnaround. let's check on the markets in asia as we are seeing the headwinds of wall street. new zealand equities down one third of 1% now and we have thek kiwi at $.62. we are counting down to the opening in australia and japan and it looks like all arrows are pointing down as well. japan remains closed for a national holiday. well, the global community will be paying attention to this man -- the chinese president giving the red carpet creek -- treatment as he arrived in seattle earlier this morning to start his first visit to the united states. it is being described as a major policy speech in a little more than one hour. stephen engle joins us more.
big names in that ballroom. what is everybody eager to hear? stephen: they are eager to hear his assessment of the chinese economy. reassure those in the room that it is ok to double down. that has been a lot of noise from international investors about the handling of the slowdown in china. policymakers, how they handled the stock market crash. what is the direction of reform. i think a lot of people in that room, which includes tim cook, bob iger, pillars of u.s. and chinese industry, will be listening to him for what he has to say coming up in a little bit of an hour from now. the ceo of ford motor's is also the head of the u.s. china business council will be giving a keynote, as well as henry kissinger who was nixon's national security advisor. also, secretary of state.
he went to beijing in 1972 and met mao zedfong. that started the path towards normalization of relationships. howard schultz will also be giving a speech, the ceo of starbucks. a lot will be happening in that room. big names in the audience. toie: no doubt paying homage one of the world's biggest economic powers also vying to be a huge political power as well. we got this tension between china and the u.s. ahead of the state visit. what are the expectations surrounding all of this? stephen: there are a lot of big issues that were probably taken up on thursday and friday in washington. the widening trade deficit with china that the united states has which has been building up by about $1 million every day. security hacking
will be a big concern. climate change -- that could be a pillar of the major policy speech from xi which will include some technology issues and market access which a lot of people in this room tonight will be wanting to hear. are they taking steps back on market access, because from the u.s. china business council, there has been concern that maybe there have been back stepping on market access. of course, the human rights will probably be brought up, but it is a little bit down the agenda. the asian society president, former australian prime minister, a mandarin speaker, a china expert had to say about the expectations. >> xi has a huge interest in making sure the strategic relationship between america and china stays on track and is not fundamentally torpedoed by some of the problems which have
emerged in the last 12 months. for them, they want peace and stability in the region because they have a huge economic growth task ahead of them. stephen: in the lead up to this trip, he gave written responses to the u.s. media questions. it was actually rupert murdoch who gave him questions which he responded to in the wall street journal. he was saying china has the capacity and is in position to maintain a medium-high growth in the years to come. they are in the process of developing a consumption led economy. which is aimed at boosting global confidence. that is what the speech will probably be about. angie: thank you for that, stephen engle. time for a look at the top corporate stories. here is juliet. julliette: hsbc has received a green light to sell bonds in china's interbank markets. for a foreign bank. hsbc will sell more than $150
million worth of bonds after getting approval. the central bank will also allow the bank of china's hong kong unit to sell $1.5 billion worth of bonds. china is auctioning off its markets for the u.n. faileddon stock exchange brussel investments to china's civic securities which is set to be on the verge of collapse. the chinese stock market plunge and investigations into citic's executives have derailed discussions. the brokerage firm was in talks of buying investments of $1.8 billion. it is set to be in discussion with other bidders. groupon plans to cut more than 1000 jobs and exit seven countries over increased competition from local competitors. the cuts make up about 10% of its workforce. a gets about a third of its sales outside of north america. sales get more than 2% in new
york. those were the top corporate headlines this hour. angie: let's get more on one of our top stories -- the volkswagen emissions scandal. could this push more drivers to turn to electric vehicles? joining us from new york is salim. how is this playing out for vw and its rivals? salim: this is a big deal for bmw. about a half million cars of volkswagen. we are talking about a four-cycle of sales of the cars involved. they have taken a charge in their earnings figures this year which is rising into the tens of billions of dollars depending on the fines and class-action lawsuits that come. angie: how is this going to affect diesel demands? salim: diesel demands, not much
in the short-term. diesel demand in the u.s. is driven by heavy duty vehicles. the volkswagen group has a small market share in the diesel pool. short and medium-term, it will not affect diesel commands. angie: what is the outlook for diesel vehicle sales in the united states? salim: so far, they have climbed. groups like fault wagon have taken -- full flag and -- hold volkswagen.k- we know that this is not the case from the epa. in the medium-term, this can reache and cannot consumers that have hoped to get the benefits from the vehicles they are buying. angie: thank you so much for that. on the latest on vw.
if you are thinking of living abroad, you might be thinking about singapore. it has been voted as the best place to live and work. let's go to the magical city itself. linda is standing by. of course. so magical, that is why you are there. you are contributive to the magic. what makes singapore the top spot for ex-pats in this latest survey? linda: magical city and that is a first but we will take it. the city has everything you want as an ex-pat. good pay, quality of life, career development. this survey was conducted by hsbc. -- table one of the biggest the longest running surveys. this is a look at what they found from the survey. about one third of ex-pats of singapore and 200,000 u.s.
dollars a year which is more than double compared globally. 60% of ex-pats say it is a place of career development. almost 80% are confident about the economy. 70% voted on a better quality of life in their home country. ex-pats say the well-being of their kids have improved since moving. so singapore is number one. new zealand, sweden, and germany make up the rest of the top. remember, foreign workers account for a third of the population in singapore. it has been growing concern about the competition for jobs with the locals and the government has limited work passes for foreigners. it is a difficult situation. angie: ok, but, no risk, no reward. financial reward is huge, but it is fair to say ex-pats today are looking beyond just money, isn't
it? haslinda: that is exactly right. the survey shows at ex-pats needs change. in the end, it depends on why you are moving to another city to work. it is in financial hubsal -- dubai, london -- they agree these are good places to start a business. new zealand on the other hand gets top spot for for filling -- fulfilling experience. they say it is easy to settle in. the great outdoors is a huge draw. more than 60% say it is easy to make friends. many expect -- the world is your oyster. you choose. angie: all right. and finding a nice little perl in signal her -- pearl in singapore. ahead, there is sensitive subjects on the agenda in seattle.
angie: checking some other stories making headlines around the world now -- authorities in the southern philippines believe the abduction of two canadians and a norwegian on monday was carried out by an armed group that claimed the regions throughout al qaeda but turned to kidnapping for ransom. a note claiming to be from a communist group was left by the scene but police believe it is a fake. nobody has claimed responsibility or demanded a ransom. pope francis has arrived in the united states as his first isit. president obama and his family met the pope on the red carpet at joint base andrews near
washington after his charter flight touched down from cuba. during his visit, he will meet formally with obama, address congress and speak at the united nations in new york. thentists have announced discovery of a previously unknown species of dinosaur. the duckbilled dinosaur is the fourth species unique to northern alaska. it supports the theory of the population of the ancient reptile adapted to temperatures far cooler than the tropical conditions normally associated with dinosaurs. back to one of our top stories today -- chinese president xi jinping is about to give the first speech of his visit to the united states. what dwill be his main message? joining us is robert kuhn, a longtime advisor to chinese senior leaders.
this is a very important visit at a time that it is very important in chinese history as it tries to claim its top spot in the world. how will xi jinping communique that? robert: certainly, this trip is the most important in munis -- u.s. chinese relations in u.s. -- in recent memory. there has been concerns about cyber security, south china sea, currency, business market, human rights, etc. to china, the u.s. relationship is important. it is now impossible for china to do well in the united states or the united states to do well in china. we have $6 trillion in trade a year. the peace and prosperity in the world is dependent on this relationship. president xi comes here with a big agenda. his speech in washington to a business community, among chinese strong supporters,
recently has been concerned about the difficult times in china. xi has to address this and he addresses it by two kinds of concepts. one is what he calls a new kind of major power relationship between china and the u.s. which is nonconfrontational, mutual respect and win-win cooperation. the second part of what he does is people to people exchanges or public diplomacy. using content unc -- constituency -- he recently went to iowa. in 1985, he was there is a young official and reached out to americans. china has a lot of issues they have to deal with internally. sometimes that gets misinterpreted in the u.s. because of very specific chinese issues, but he wants to reach out to the people. he wants to reach out to the business community and he wants
to have a frank and open conversation with president obama and senior officials in washington. visit inons of his many cases has been low but i look for a great success. angie: we often forget back in 1985 that xi was actually visiting here. it certainly was not the president of china back then. how much of this influences his understanding of american relationships and foreign policy, but also influences his communications file and what the issues are ahead? robert: that is a really great question. i was just in iowa. we dedicated e-house he state and -- we dedicated e-house he state and -- dedicated a house he stayed in. recently, he went back there as
vice president three years ago. much more recently, he invited the family he stayed with to a private family dinner with his wife and daughter. no media. it was a very warm and really touching kind of feeling. a very genuine with president xi. he obviously have to deal with a lot of issues in the economy, china's emergence in the world and a series of issues. when he talks about people to people diplomacy, he means it because he has lived it. angie: robert, last question. wehhen xi and obama met years ago, there were two very different economic environments. it is considered to be a very weak presidency in the united states. xi jinping is facing blame for market volatility. how much of that is going to
change the tone of the communication from years ago? andrt: president obama president xi jinping have their own nature. i don't think the actual relationship between them will be a lot different than it was before. circumstances are certainly different. from the u.s. side, cyber security has been a major issue. on china's side, the stabilization of the economy. china wants the world to know the real economy in china is stable. maybe it will not be growing at 9% the way it used to. 6%will grow at a real at a base that is approaching $11 billion which is awfully good. i think president xi comes here confident in his own position in china which has been significantly enhanced in the greatwo years through
respect of the people, anticorruption, etc.. i expect them to have a continued where they left off dealing with the realities as they are today. angie: all right, the realities are stark. robert, we will leave it there. thank you for joining us out of new york on xi jinping's visit to benighted states. a ratings cut could make a market mover out of an auto part maker. a look at the market movers when we return. stay with us. ♪
systems like compressors and radiators. it is being cut to underweight by morgan stanley. it was at 4.6% yesterday but not a great year at all, down 28% over the last 12 months. nine buys, 13 holds, two sells. it could come under pressure as it had a very good day yesterday. angie: maybe it was overheating and now it is cooling down. all right, david. thank you. stock as you took chart -- the five-year almost all of its value. it explores for silver. we get the precious metals wrap up, a little less precious over the last few days. a big drop overnight. this is what i'm watching -- it tends to move quite a bit. we were talking about high data
stocks earlier. angie: right. minus the precious and you are also looking at metals. it solde are hearing 1.3 million shares. they have had not a great year. they were down 30% in the past simonths. posco's abr is actually closing down more than 5%. still, they are seeing the share price remains supportive because of their did in yields which is more than 4% as well as steelmaking margin stabilizing. let's see what it does today. angie: that is the verdict from the stock exchange. our reporters highlighting it are based on recent events. we will be back in one hour to see how it has done. chinese president xi jinping set to address business leaders as he kicks off his u.s. trip.
♪ with all due respect to donald trump, this is a beautiful wall. >> good evening. sports fans, i mean that literally tonight. there's only one thing that is part of the country loves more than politics. that is baseball. tonight, we are talking to the president of the red sox about both. first, it is a historic day in america, but the president of china and the pope of vatican city are visiting