tv First Up With Angie Lau Bloomberg September 29, 2015 7:00pm-8:01pm EDT
live from bloomberg's asia headquarters. markettart the news with moves on wall street. su keenan has been watching all of the action. how did the day go? : the stocks halted a five-day slide. many investors will be happy to have this quarter behind us so, put a dent in the decline. we had health-care stocks fueling the rebound. health-care stocks have dropped some 11%. we had oil bouncing back but while the dow and s&p climbed a slide in apple shares caused the nasdaq to miss out. we did get some fresh economic data. home prices rose 5%.
drum -- jump in consumer confidence where a lot of economists expected a decline perhaps because of the turmoil. we have earnings season coming our way and he sees a positive impact on bounceback in the consumer. >> coming out of the recession, normally you would see a fast growth but this has been slow and steady. to increased consumer confidence, lower gas prices and more discretionary income and your starting to see small businesses bounce back and invest more. small businesses bouncing back but we do have a lot of weaker banks cut in the crosshair. bank of america is said to be cutting dozens of jobs across the firm. this after brian moynihan admitted to trimming expenses.
we had tesla shares in the spotlight that were originally awesome. ending the day with a loss and that was a heavy electric carmaker handing over big excitement tonight. angie: people have been waiting a long time for that one. what about this big bounce back we saw for glen care -- glencore? su: it rallied the most ever. the stock was hammered some 25% yesterday. the commodity route having it jumped levels they had to put meetings together on that. thatreassured investors the company has positive cash
flow and that certainly helped shore up the share price. helped that ceo regain a little bit of its welfare. what will all of this mean for asian markets today? let's get over to juliet who has been monitoring the market action for us and investors still on edge? >> they certainly do. it hasn't been a great day at all. we saw investors in this is the picket we saw on the asia-pacific region. you can see there was nowhere for investors to hide. down by about 4% but things are looking brighter for investors this morning. you can see that the adr in particular, we saw the adr index up my about .1 of 1%.
we are hoping we won't see the same redness we saw in the asian region yesterday. kong and these hong big metal players coming under a lot of pressure in the wake of what we saw in glencore. in the we saw that market rise following that big forecast coming through. since the 2009 financial crisis. let's have a listen to what he said. >> the reserve bank intends to be accommodative to the extent possible. reforms and corporate actions leading to higher productivity would be the hub primary impetus for sustainable growth. so hopefully some upside for investors today. we did see that coming through
in glencore shares to that record low down by 29% but they did have that good rally coming through in london so hopefully we will see more bright spots coming through in the region today. thank you so much for that. let's check in on other headlines. japan has ordered an industrywide investigation after vw cheated on a missions test for they have demanded reports from toyota, mazda and others although must a says all engines comply with regulations. they admitted that hundreds of thousands of cars with seat units are also involved in the scandal. it is building strongly in china despite the government banned.
the chief operating officer says that business is thriving and that they have helped numerous local companies connect with consumers abroad. china's censorship laws prevent local users from accessing facebook and they say it is not clear when they will enter the market officially. >> we have been really clear that our mission is to connect the world and a lot of people in the world live in china. but any kind of timeline we do not know. is stepping lauren down as ceo of his eponymous fashion label but will remain as executive chairman and chief creative officer. thene larson is to replace 75-year-old in november. shares of ralph loewen -- ralph lauren rosen after-hours trade. bloomberg's new york headquarters, prime minister of a desperate minister
abe said he would bring in line with corporate governance. >> we must make a total difference. that we areou now going to build a new system, whereby ceo's and other board members should be transparently selected. joining us now from new york is bloomberg's managing editor for japan and korea. brian, you were there, what was the big take away? anything surprising that you heard? >> i thought it was quite interesting that he focused on corporate governance. clearly he was speaking to an audience of 250 investors. but corporate governance is also an area where of a nymex has bent
-- abenomics has been unequivocally successful. thing is interesting that we get a story yesterday in which we had somebody from ubs billion in cross shareholdings will be unwound in the next couple years. so his message today was totally in line with that. angie: how would sick -- how successful would you say that abenomics has been? >> i think it is kind of a mixed result. the markets have been successful for sure. there is a good reason why the nikkei is still up about 70% since they took office. i think the question about whether his policies are feeding into the macro economy are still unanswered.
them raise seen wages and a meaningful way and i think that is what they're waiting to see before they really bite the apple, so to speak. angie: he is losing political support at home domestically 2.0. launching abenomics it is a little confusing but will it be any more successful echo -- successful? >> it is hard to say. these three new era seem less like arrows and more like targets. he wants to do more for child welfare spending to help with education payments. he hasn't really said how he will do this and today we heard from the chairman of the ukiah, a very influential business lobby and he said that the 600 trillion yen target was unreachable. he said it will not happen that it is only politics so there is a degree of skepticism about
whether this new plan is achievable. those three new arrows you describe for us but what has the response been in tokyo? are asking a lot of questions and as i said he hasn't really said how he will pay for that welfare spending. he hasn't said how he will boost the economy by 20%. trillion's toy percent higher than where the economy is right now so i think japanese people are waiting to see what steps he will take to really do this and one thing we can expect is another supplemental budget. talking the numbers between ¥3 trillion and y3.5 trillion. that is a start but what we really need to see is deregulation. that structural reform, we are still waiting to see that. that is bloomberg's managing
editor for japan. you can get more on that story and all the day's top stories at our digital destination. also on bloomberg.com, find out more about the russian billionaire buying up his country's banks. plus elon musk prepares to hand suv.the first model x the deeper than expected rate cut for india and what it means for the global market, coming up next.
indonesiarom iran, and pakistan say more than a thousand people died at mecca, far more than the official number of 769. the iranian president attacked saudi arabia for what he calls incompetent and mismanagement of the harsh. the accusation saying he is playing politics. at least three people are now known to have died when the typhoon swept across taiwan. many others were injured by flying debris or involved in traffic accidents as wins gusting above uprooted trees, smashed windows and triggered landslides. more than 12,000 people were evacuated and 175,000 homes were left without power. forstock market was closed the day but is expected to be open this morning. 's most influential figures has been banned for
life. the biggest crisis in the sport's history. trinidad's jack warner was described as a key player in streams involving the offer and receipt of illegal payments. the former fifa vice president denies any wrongdoing and is fighting extradition to answer corruption charges. chinese stocks trading in new york rose from their two-year low as investors weighed the potential to prop up the financial market. msci emerging markets index dropped 7/10 of 1% extending to 20%. sincethe steepest decline 2011. technology stocks were the biggest decliners on wall street. and s&p 500%
overall closed slightly higher after a volatile day of trading halted its five-day using street. it is that roller coaster ride again. let's bring in laura fitzsimmons, the vice president of futures and options at j.p. morgan. thank you for joining us. i want to ask you about india. this happened at midday for them and really surprised the market. no only the cut but also what with the foreign ownership of locally denominated bonds. tell me the opportunities that opens for everyone. i think it is important to acknowledge the larger than expected cut and i think the main driver behind that is that the risks are growing very much
for the emerging markets and i think it is interesting to see central banks more aware of that than others. his really shown his strength here to deliver something the market didn't expect when potentially a lot of central banks are still very preoccupied with inflation. think thatason i even though they are trying to bring about some disinflation in india, he was willing to take a more bold step at this juncture particularly when there are other risks to food prices. resonate strongly and we certainly do feel that it probably does give some pressure on to other central banks in the region, probably australia could be brought into that as well because so far our central bank has been very quiet to the risks on our doorstep. so the larger than expected cut wasn't expected by the market and for now, the rupee even
reacted positively and what we are expecting to see with that more external focus is that foreign demand for indian bonds can be seen in that will help the economy on the transition through what will be a very difficult period. angie: difficult but still confident that india can sustain this volatility. confidence that they can welcome these foreign investors who wants to buy locally denominated bonds and we saw that as yields dropped yesterday as well. >> absolutely. you had a situation where you had equities rallying and local currencies rallying. very much a positive reaction so far. we will wait to see how some of the longer-term flows filter through but it is certainly a
step in the right direction. it has been one of those markets that has been very difficult to be involved in. i think that any sort of opening up will help in that regard. it comes at a time when there could be demand slinking out from other sites and india remains one of the fewer bright spots among the yen, given the impact of oil prices being more positive for them than other economies in the region. especially when you look at china and we are expecting you my figures to come out tomorrow. that really triggered the latest round of sellouts we have seen this week. where do you see pboc and china headed for investors when they take a look at these markets, one looks brighter than the other. where does china come into this?
>> we're still quite cautious here. they do expect to be some kind of pick up in the fourth quarter but at the same time we are very concerned that what we could be waiting to see here is a sharper slowdown in the market has been expecting. people had started to price out that risk because every year china started week reporting and managed to recover as the week went on. downsidern is that the risk we do have to the forecasts and theout reverberations within the global market are bigger as well. they've clearly shown some willingness to deliver rate cuts and rrr cuts and in some ways you are a number of stimulus measures but we still don't know whether really china is moving to its new normal weather is something that the world will have to deal with that china
isn't going to be able to move away from being such a strong export company -- country to have that internalized the mystic demand. angie: laura fitzsimmons. we will leave it there. really good talking to you looking forward to the next time. next, growing pressure ways on england as criticism mounts ahead of their must win match ahead of australia. the rugby world cup report is next.
angie: we are halfway through the rugby world cup group stage and counting down to this weekend's crucial match between england and australia. the hosts are under a world of pressure after losing to the former captain attacking their character. they have also lost their number eight to a knee injury. they must be australia on saturday and they have lost two key players. and last night game they went second and full seed by beating nvidia -- namibia. against to battle hard namibia who ran in three tries,
their most ever at a world cup. congo remained outsiders to reach the knockout stages but they still have to play argentina in new zealand. today is a rest game in the tournament. they play canada on thursday. and other news, sony is spinning off another of its iconic brands. thursday, walkman will be part of a new sound and video unit along with the blu-ray players. experience phones and tvs have also been sidelined as they scale back on consumer electronics to focus on profitable and -- image centers, playstation games and movies. and japan is confirmed as buying some reynolds assets for $5
billion. they are picking up national rights to the american spirit division. the president described the deal as an excellent opportunity to strengthen sales growth. it will be japan tobacco's biggest acquisition since 2007 and google has released its latest challenge to the iphone. both handsets come with a fingerprint sensor, a quicker usb charging system and a new software that helps battery life. it starts at $495. they're
the top stories this hour -- the japanese promising to make companies more accountable to investors. at a bloomberg headquarters, he said he will bring companies more aligned. boost the wants to economy by 20% and reverse the decline in population. shares surged in london and new york among rallying the most after the company said it can withstand current market conditions. the rebound recoup some of the major losses from the previous day. glencore management will meet debt investors later today after selloffs. india may resort to more easing dip in inflation allows morgan to cut interest rate. the only economist who predicted the r.b.i. woodcut rates -- would cut rates, says the banks
will lower rates by another 50 basis points by march. the governor has cut rates four times this year. the latest was the biggest in about six years. let's check in on markets in asia on this last trading day of the month. the last trading day of the quarter. it is a very sad quarter to speak of. new zealand extending those losses, about a quarter of 1% down. we are also counted down to the opens in australia, japan, and korea. big losses yesterday. that follows the market drawled on wall street, making it down below the 70,000 mark. nearly wiped away all the gains of 2015 now in negative territory. but chicago saying they were covered a little today. the dollar yen right now is
weakening. let's step back and assess the damage. so far, it's been one of the most eventful times in years. david has been going through all of the numbers for us. manager outund there would agree that the events we saw in the third quarter were unlike previous quarters. rightn mind, we started in the middle of the greek crisis. it was the banks holiday and we were going to elections and the bailout. in china, you have the governments stepping in to stabilize the markets and then you have event in august. you had the ecb expanding, this massive selloff globally in august. just about every single major currency against the u.s. dollar. at some ofa look
these numbers we've put together a bloomberg. this is the story here. your to date, best and worst performing stock in the season. jin still up.n we talked about vietnam yesterday. before investors really took their frustration out on the .hina slowdown you have south asia here for varying reasons julie. a lot of these markets are very china focused. whether they are chinese stocks or companies dependent on china. as far as within equity space, we are the best and worst place to be. very cyclical sectors were sold off. you have energy oil prices, materials.
we have been talking about the commodity story long enough. what may the third quarter unique is that it really shows up and earnings. you had layoffs, write-offs, discounts, a lot of these scaling back operations. and you have the bigger one saying they will keep producing more so that took the brunt of the selloff. we talked about commodities. can we get that up? eachn't go to detail of one. some of these are related. 27%, the worst performing commodity. the amount of short positions is astounding. angie: that's relatively speaking falling less than everybody else. you couldn't really say it's unscathed. what about currencies? the strong u.s. dollar has really done a number on emerging market currencies. asia, this is a look at
the worst performer we will get to a litter on -- later on. it's been in a freefall. you have the default risk of malaysia at a six-year high. the only two currencies left unscathed or the hong kong dollar for obvious reasons and the japanese yen. globally, have a look at this. it's interesting. frankly, i don't know why some of these currencies have been doing quite well. that being said, when you have a major currency like the real, it makes it look like a safe haven currency. angie: that's a great way to put that into context. thank you very much.
it's been a pretty crazy quarter indeed. let's take a look at asia's weakest currency this quarter and let's go live to our southeast asia correspondent. has -- currency continues to slump. >> that's right and it's hard to see the safe haven this point in regard to other currencies struggling to find a bottom down . now set for its biggest quarterly loss since 1997. -- it droppingth the most in the region, falling 18%. , the central bank has been intervening. reserves make it more
susceptible to the selloff in emerging markets. theth noting, moody says reserves are enough about their adequacy is weaker in southeast asia, hence what we see right now. there are other reasons for the weakness like low oil prices, malaysia. the oil slump hurting earnings. economicchina's slowdown, the impending u.s. rate hike, and the scandal involving the prime minister adding up. angie: what has the response in from government -- been from government and has a central bank come out and made remarks about malaysia's economy? >> to central bank governors says she wants to see the norency stabilize but has
specific target level for a. she reiterated the weakness does not affect malaysia's economic fundamentals. rising household spending. if you take a look at low unemployment, it shows the economy is intact even of growth has been slow. was interesting is the banks singled out the scandal. she says we don't need anymore scandals or political uncertainty. when they resolve all the issues , she says then we will see a recovery in our currency. suffice to say at this point, the sentiment is it's a big risk to malaysia. angie:coming up globalsed to the
angie: tracking stories making headlines around the world. nearlaunched an airstrike an afghan city as local forces fight to recapture it from the taliban. the city fell monday and what was the taliban's biggest military victory since 2001. the president has promised forces will retake and accuse the taliban of using civilians as human shields. 46 children were treated at local hospitals. china has been accused of copper messing academic freedom -- accused of --
the governing council voted down chairman,tment as saying it was in the universities long-term interest. the professor was a supporter of lost years pro-democracy protest in hong kong. edward snowden has joined twitter. says "i used to work for the government, now i work for the public." the only fiji's following is the nsa -- the only tweet he is following is the nsa. some of the other stories we're following in asia this morning -- hong kong's richest man saying he still has full confidence in china and to its commitment and reform. he was responding to comments from the people's daily that is drifting away from the mainland.
he issued a three pager bottle, saying he's polling investment out of that saying claims he is polling investment out of china are untrue. there are more warning signs the property market is heading for a correction. home prices are at their highest relative to shares of publicly traded developers in two decades. tuesday, we see the bloomberg markets most influential summit in hong kong, which brings together the movers and the shakers from the business and finance communities. among them, martin coven. he joins us in the studio this morning for a preview of what we are going to sit down and talk about at this most influential summit next week.
very happy to welcome you on the show. we just talked about the slump in rental prices in hong kong. pre-her from all of these luxury --ailers trying to talk down we heard from all of these luxury retailers trying to talk down rent. how has that affected the group? >> there's no question the high-end retail market is affected by the slowdown in business from china. the hits are evident in lower sales. you see a decline in retail sales. in the middle section of the marketplace, we have seen strong growth. it tells you the middle classes in hong kong is quite strong. is the high-end fashion badly affected. angie: what do forecast for luxury retailers and that luxury space in hong kong? is that a dwindling market? is that something that will not return quickly?
>> there will be a point of stabilization. it's hard to say when that is. there is a structural decline over the last six months that will affect portions of the market for another year or 18 months. you will find people will still want to come in to hong kong and by fashion jewelry but it's from a basis of what we have enjoyed the last two years which was accentuate the buyer by trading. angie: we love talking to you and we love talking about this because it is a barometer with great exposure and asia. you have exposure elsewhere as well. talk about how this global environment has impacted your ability to offset some of the slowdown where it's more quicker growing areas of broad. -- a broad. those areas of business are
most important to us. in hong kong, we see good growth. that is coming from china, interestingly. there is still growth. whether it is 5% or 7%, there's still growth. all of this is very strong. in retail and china among the middle classes, we have seen strong retail sales between 11% and 19% of the first half. that shows the middle classes are benefiting from higher wage growth in the last year and they have confidence in the economy. angie: i know you're looking to grow in the u.s. you do have less exposure there but you are starting to invest a little bit more.
is the mindset county capture that u.s. growth? >> to some degree. no question what we see in is good. that is why you would expect interest rates to go up at the end of the year. that is evident in sales we see in apartments in miami and pretty good, strong growth. they exposure, obviously. as is one of your biggest holdings. . lot of chinese competition was in a lot -- we assume a lot of restructuring moves. are we going to see some sort of
restructuring or are you happy with the way things are structured? >> we have undergone our own restructuring. we are happy with thewe are hap. angie: it's all about reform when it comes to china. consolidate.o do you believe that this is the right direction and like yourself and everybody else waiting for these moves to happen. >> they are restructuring away from being driven by acid formation and exports to more consumption driven and this makes a lot of sense. it's is our business profile. along the way, there will be some damage and markets that will be spooked by it. broadly, this is a positive step for china.
how did you react to the devaluation? >> we were a little surprised. over the mind of the last eight years, we've been beneficiaries. in the short term, you say translation loss from the balance sheet and a relatively small amount of hong kong dollars but is really at the margin. we still very good for investment in china long-term. angie: it triggered a lot of volatility in the market. hold on for a second. we have breaking news out of japan. they just released their latest factory output. inindustrial production month to monthn contract in .5%, missing estimates. economists expected it to rise 1%. a surprise contraction.
this following that surprise plunge in july. the contraction has slowed down but it's still a contraction. factoryts expected outputs to rise in august. .20%.n year, it rose we are expecting a gain of 1.8%. gains from july remained flat. we have a retail trade day out now. year on year, rising .8%. economists expected a gain of 1%. it's also slower than the rise we saw in july of 1.6%. a month to month retail sale is flat, missing estimates again. also lower than the previous months. analysts have warned production in japan will remain sluggish
because of private consumption and exports remaining sluggish. china is japan's biggest trading partner with a slowdown there waiting on japan's exports. japan's economy has seen some tough times recently. last order, shrinking an annualized .3%. not much movement in the japanese yen. slightly weakening. back to you. angie: that is disappointing data. coven, japan, america, china, india account for 45% of global growth here. when do you see this -- when you see this data, when you take a look at the slowing of global growth, are you excited about the opportunities or is this keeping you up at night? >> as we said earlier, the , you're going to see volatility in markets.
for companies like ours, if not a great concern because our long-term interest is generated by what happening in china. say anyone bit of data coming out sheets me awake and i. -- awake at night. angie: what does keep you up at night? >> the level of progress china is making in this transformational progress to move to a consumption driven economy. wheth that successful or not is important to everybody's interests in this part of the world. thus far, it looks on track. angie: just have to keep your and your eye on the prize as the often do. they do so much. the bloomberg markets most influential summit for 2015 happens next tuesday with event in new york to london, and hong kong. in conjunction with bloomberg markets, the 50 most influential list brings together leading
angie: welcome to the stock exchange. david and juliet are watching stocks for us. david: and what a company that makes iron pipes in japan -- i am watching a company that makes iron pipes in japan. in this case, they moved the goal post very close. they cut their profit forecast 47%. juliet: i'm looking at a company that manufactures and distributes working tools. when you get something done on your house and all the tools come with the handyman. it has increased its operating profit by 25% above estimates.