anchor: against the grain, the united states takes aim at china over so-called excessive farm subsidies. ilcome to bloomberg markets, am anna edwards. it has just gone 5:00 here. past noon injust hong kong. welcome to bloomberg markets. what we are watching is the of volatility. we are seeing an extension of the losses this hour. there is no asset class that seems safe. equities, they are all falling to read wonder what it is looking like in europe. anna: my favorite line from company., misery loves it wasn't just stocks or bonds. people getting out of all kinds of asset classes.
makes you wonder how much investors are going into cash . misery does love company. hong kong and the austrian share markets up 0.1%. we have seen good to buying come through in banking stocks. the glut could last well into 2017. we did also take that lead from wall street careers though regional index heading towards its fifth consecutive loss. that we couldort see the bank of japan move further into negative rates territory. that has weighed on the share market.
off 0.6.market giving much of a boost to equity markets. most of southeast asia also being sold off. thailand looking flat to read we are awaiting the rate decision. south korea closed for a harvest moon holiday. apple was a strong performer. technology in china, up by 7%. pegatron in taiwan doing quite well as well. this is a picture of the japanese bank sector, being sold off.
we have also seen some weakness coming through in some of the regional banks. stiffening even further. what is the boj going to provide next week? anna: let's use that as a nextng off points to the question. japanese banks on the wildest ride as they decide whether the moves will help or hurt. more broadly, assets of all kinds, investors asking whether they are going to see central banks globally as supportive as they have been. that is capturing the banking sector and leading to some wild swings, particularly in the japanese case. right,: yes, that is
japanese banking stocks have been volatile. we compared the spread on that to the broader topix index. volatility has been at the highest level since 2009 in the wake of the financial crisis. it is quite clear that is the case. we started off the year with a global stock route. the shock announcement of negative interest rates, again falling. it has been backwards and forward with boj meeting after boj meeting. we have heard expectation of them to have stimulus and then do nothing. it has been very mixed. been any negative direction. there has been a 30% rally over the summer. an expectation, the bank of take some measures to
bring up the long end of the yield curve which has fueled their rally. bank volatility has been going wild. when guy i spoke to the other day -- angie: the nikkei newspaper reporting, as you said, the roller coaster continuing. the central bank will have further negative interest rates when it comes to stimulus. garrett: it is evidence we are seeing of what this report is doing. the bank of japan might go deeper into negative rates. the stocks have been hit pretty hard. flipside, there was a split between economists on what is
going to happen. example,her side, for bnp paribas, he believes there will be no additional stimulus. the bank is more likely to , perhaps a range of 70-90,000,000,000,000 yen. say, whatevern happens will have a major impact on stocks and we will have to watch that closely. angie: thank you for that. headlines fromon around the world. paul: thanks, angie. the -- johnrs say claude junkers set to deliver his state of the european union
address friday. they say there has been bitter infighting. the international energy agency has changed its supply on oils global oversupply. they say the surplus will last longer than expected as demand slows and output remains resilient. this may influence talks when the cartel meets later. arm is tappingce into biometric technology. they are paying $70 million for the kansas city-based company. checks identities and creates a digital key. -- eye verify checks identities
and creates a digital key. they are going to double the break fee. the board was going to essentially approve the bid on tuesday. the talks may yet collapse. global news, four hours a day, powered by 2600 journalists and analysts. i am paul allen. angie: samsung is apologizing for the faulty batteries that have prompted the recall of 2.5 million smartphones around the world. also taking steps to manage the crisis, we have heidi following the story. ads, where were these ads? aidi: it seems to be
technical fix only for the south korean market. it is not great if you like to have your battery at full capacity. .t is a software off grade it prevents the overheating of the battery which has led to these -- the recall. it limits the amount of charge to 60% at any given time. there was an ad taken out in a south korean newspaper. samsung, apologizing for the inconvenience. there is little bit of lack of clarity when it comes to south korea or whether it gets rolled out across other markets. whether it is mandatory. your phoneinto regardless of whether you give consent or not. that is what we know so far. they are going to be starting
delivery of the note seven models that do not have the faulty battery issue. only tech not the company facing technical challenges. apple also facing embarrassing difficulties. heidi: you have to wonder if it is something in the air. the challenges apple has faced in terms of their technology are not as dramatic as widespread. essentially, we are talking about the ios software upgrade. we had a number of social media users complaining, after the upgrade, they were taking to a blank screen which propped of plug their phones into a computer or itunes. it rendered the device useless. apologizing,ed, saying it affected a small number of users and only happened in that first hour when
the update became available and has since become rectified. all in, a pretty good day for apple. the share price rally, one of the few tech stocks that did well in the session. t-mobile and sprint, saying they have seen record demand. we have been scrutinizing these numbers and they do look positive, given apple says they are not releasing those weekend sales numbers. an important sense of the reception. anna: pushing apple stock up 2.4%. still to come on the show, how and china are drawing the battle lines over trade. details later this hour. take one international what is in store for the asian markets.
angie: you are watching bloomberg. quick check of the latest headlines. wells fargo has lost its position as the world's most eligible -- valuable bank. fined $185 was million last week over the alleged misconduct. jpmorgan now occupies the top spot. engine -- hanjin's shipping terminal used to be one of the hasest but now the port been paralyzed with unchecked
containers piling up on the dock. september is peak season for shipping. manufacturers deliver their product ahead of its giving and christmas. the atlanta fed president will step down in february after 10 janet yellen.ng a committee of non-fed directors will look for lockhart's replacement. angie: let's check back in on the markets. the investment director at fidelity international. as we have seen the last couple of days, no asset class is safe. gold down, yields are up. where does anyone go in this current environment as we await the possible decrease of stimulus. >> it is an interesting time to
be in the market. investor, an equity there are some positives that are starting to play out. three themes emerging. one, the search for value. financials or banks is a good way to play on that. asia has arm growth, few good spots to offer. definitely, the search for total return. when you talk to company management, china or thailand, we have seen some attractive yields. angie: i want to dig it deeper into china financials. there are two headwinds. we don't really expect any sort action in which we are going to see interest rate movements.
ideally for the banks, they are kind of not in an ideal situation. is one of the questions that keeps coming to us. the worst is not over but clearly we don't think there is going to be a systemic crisis. if you look at a few things in china, china has reserves. balance look at banks' sheets, they are diverging some of their loans to the private sector. not everything is looking bad. if you look at valuations, they are looking very attractive. the government is proactively managing what we think is policy and the economy. 6.5% growth, that is a possibility. anna: one of the weaknesses we
have seen is volatility to turn back the markets in september. there has been an increased appetite for the u.s. dollar. does that worry you, from an emerging markets perspective? medha: when you look at what is happening with the dollar, they have been going back-and-forth. it is actually good for certain pockets in asia. even in december, we saw the extreme panic reaction, we saw investors coming back to asia because of the internal positives. some of sectors are still looking very attractive. we like the infrastructure. a like india which is structural reform long-term story. anna: what do you make of the emerging market currencies
world? we have seen a return of weakness with emerging-market currencies. and others do not see weakness lasting. basic a return to stronger emerging-market currencies. medha: we tend to agree with that view. currencies have become competitive. -- terms of trade for china asia have been improving. you look at deficit countries like india, there is an improvement because of the oil and most countries in asia are running current account surpluses. attractionther added that asia has to offer. we are seeing valuations in asia. there is still room for asia to move up to fair value. allies -- roi's are at
an inflection point. we are anticipating the cyclical upswing in earnings. angie: that is only a investors are confident enough to take on risk. place likeafe haven the u.s. any dollar. that is definitely -- medha: that is definitely a risk of emerging maggots face. we think the extreme panic is unlikely to play out in asia. we have different stories. if you look at indonesia and the have beens, there good leadership changes relative to what you are seeing. the tax and, amnesty is definitely supporting the property sector. see countries with different
levels of growth drives. stock market should play catch-up in the second half. anna: tell us more about your strategy for india. a catalyst to send that market higher? india is trading at 18 times, the same level as 2014. what has changed is the macro picture in india looks more positive. this is underpinned by the government's reforms. near-term catalysts, we think should recovermy and that should help consumption. that is a good part of the gdp. fertile stock market. when you look at on the ground
companies, we see a lot of potential or value in some of the private sector inks. some of the infrastructure players. ,he pharmaceutical names definitely looking quite attractive. anna: the investment director at fidelity international. basic staples at the center of the news that between the u.s. and china. this is bloomberg. ♪
curious that the u.s. is going down this route now. say, in their complaint, they have piloted the wto commitments. the u.s. trade representative office actually said chinese price support for these come ohs of a weed corn, and rice are basically subsidizing to the tune of $100 billion more than it has said it would do. that is why it is taking me complaint. complaint.he u.s. farmers, they have been suffering in this commodities downturn. wheat prices at a 10 year low, corn prices at a nine-year low. china and others have been selling corn stockpiles as well. too much of these commodities on
the global market. they have been whittling down there inventories, at a 16 year high in china. 13%a resumed the value-added tax rebate on corn exports. anna: what retaliation can we expect from china? we can expect retaliation because china, according to a number of experts, we have gotten comments from, don't necessarily expect any change in practice by the cheney's. chinese. they are considering anti-dumping tariffs on various products. quote, -- this is not necessarily a one-sided story. the timing of the action is perilous, according to peter. irritated want of
the commission president says it is a fight for survival with u.k. newspapers talking a split between eastern and western member nations. cker will address policy issues from defense to investment. samsung has publicly apologized for its problems by taking out ads on the front pages of newspapers. they said they will remotely limit the amount of charge the battery can take on to avoid a possibility of overheating or fire and explosions. samsung says it appears the es ofive and positive pol the battery can come into contact. wells fargo has lost its crowd
ranking as the most viable bank to jpmorgan. shares have slumped in new york, reducing the market value 237 billion dollars. wells fargo was fined last week over the alleged misconduct by staff. it is 12:30 in hong kong, i and angie lau. it is 5:30 in london, i am anna edwards. counting you down to the start of the europe in trading day. the european commission president is to make his state of the european union speech later today. reports say he will deliver a warning. some sources saying, he is going to talk about the eu's battle for survival. take us through the details.
are reporting he is going to say the eu is facing asn existential crisis. his address comes a day after mario draghi said internal divisions post a real danger in europe. they include the failure to complete the economic and monetary union. said joint action from leaders is essential if they want to regain support from citizens of the european union. some western nations calling for deeper integration whereas some governments, for example, poland and hungary, are pushing for less oversight from brussels. migration causing divisions among members of the block.
there is an informal gathering on friday that is supposed to be a meeting in which they are going to map out a way forward, a roadmap of sorts for what happens after the u.k. leaves the european union. the question is whether they will be up to find common ground in these increasingly acrimonious environments. part of the issue is the u.k. itself has not formulated a plan. >> what we have to remember is there is a lot of politics behind this. it is coming ahead of the time when europe is going to have to negotiate with britain over the terms of the exit. both juncker and mario draghi are part of the camp that says the solution post exit is more integration. rosiland: we will have to
see whether the remaining leaders will come to any agreement. chin with the latest. we will have analysis of that speech from john claude juncker. angie: breaking news, we have numbersfinal industrial for july. factory output fell 0.4%. on the year, it fell for trying to percent. -- 4.2%. disappointing data set, industrial production dropping more than expected, 4.2%. this follows better than expected machine orders earlier this week. let's see how japanese markets are reacting. here is juliette. juliette: definitely a worse
than anticipated figure coming through. just trying to see if there is any reaction from the yen, which was tracking weaker against the dollar. you can see a spike coming through. twhat i mr gainst be saidinister a earlier. we have also been looking at the bond market. the is on the back of nikkei report. more stimulusp any form of moving interest rates. an unpopular move by the boj. we have seen the yield curve sharpen. yield on the 20, 30, and 40 have risen to mid-march levels.
showing a lot of movement coming through in the bond market. having a look at the japanese market as a whole, off by 0.4% in the latest session, under 90 minutes of trading. banking stocks have been coming under a lot of pressure on the back of this report, that we could see further negative rates. some of the big players being sold off, mitsubishi usa. the currency.in as you said before, misery loves company. selling off today. angie: thank you very much. reaction to the latest market data out of japan. short sellers have been shaken up the stock market in japan. there is one particular analyst who stands out and who could be tokyo's most influential bear. tom reddened has the story -- story. has the
put this in context for us. hi, yeah, i wouldn't say he is quite at the level of jim or carson. an interesting carrier. he is a young guy, he is a lawyer. a lawg partner of practice and runs a small hedge fund. last year, he decided he was going to start publishing short reports. he surprised the japanese market in december with his first research. he followed up with two more targets this year. one is cyber dime which makes robots -- a company that makes robots. he says he is an amateur. the ones he has targeted, the companies he has targeted, they have seen big drops in the share price. we calculated, it is an average
of 35% fall since he published the reports. anna: you might say he is an amateur but something is pushing down on the stocks. how much shortselling is there? how does this layout culturally? om: until recently, there was basically none. it has changed. with his report and also in the summer, we had a two egg american short sellers target japan for the first time. one is citroen. i think what has changed, the reformse governance under prime minister abe have made the short sellers believe the time is right to target the japanese market. there is some negative reaction in japan but we are going to see more of these guys in tokyo.
anna: thank you very much for bringing that story to our attention. tom redmond joining from tokyo. he was paul allen. paul allen.e is paul: planes flew from quam guam aftergyang -- pyongyang carried out a nuclear test. china, meanwhile, has questioned the effectiveness of such measures. president hass offered more signals he is turning away from the u.s. fromys he might buy arms china and russia. he demanded u.s. forces leave the southern island of mindanao.
discipline fiscal while recovering from a recession is proving to be the toughest challenge for the argentinian president. he says he wants to cut taxes and open up new trade ties to bring growth back to argentina. >> we are working hard to continue building strategic alliances with different countries around the world. we have one with china. we are working on one with japan, with korea. we are working with the european union. we have exchanged our first proposals. to have a free-trade agreement. global news, 24 hours a day. i am paul allen.
angie: welcome back, you are watching bloomberg. anna: a quick check of the latest headlines for you. spacex says it plans to resume rocket launches in november following the explosion of a rocket earlier. it also incinerated in israeli satellite. determinetrying to the cause of the fire. elon musk said it was the most complex trailer -- failure in history.
ikea will open its first store in india. byy aim to boost sales 50% opening for-five stores in china each year. 25 stor the goal of es in india by 2025. this time next week, we should have the bank of japan's latest statement, and the nikkei news service says policy makers will raise the prospects of taking rates ieper into negative territory. the decision to go below zero is yet to prove effective, but the governor is running out of options. the asset buying program is reaching its limit. with aiscuss that professor who joins us. great to have you on the
program. give us your latest assessment do.hat the boj is likely to we have this report suggesting things could go further negative. we have analysts and economists invited or confused. i think confusion is definitely the right answer. yes, they will probably continue with the status quo, which is to go deeper into negative territory. how far can they go? they pretend as if they have unlimited resources but that is not true. we know they are running out of options. announcedster abe boat we aredual -- not really feeling that in the economy yet. the ball is not necessarily on the court of the bank of japan. the realy problem --
problem is a structure change rather than short-term economic or monetary policy. short-terme is that policy move, everybody is waiting for, professor. how much of it is negative rate territory? or redefining what those asset purchases are going to look like? i think they are going to basically progress with the negative rates further. also, increase the amount of investment. there is no doubt about that. they still need to, as you just pointed out, sooth the market. of their discrepancy valuation, which i think is a mismatch. toie: government continues be a big issue, as well? >> a lot of people are giving
thumbs up for the governance. a continuation of western governments does not necessarily mean positive for all japan. that is not to say we should not make that transitional change. but it means erosion of the japanese competitiveness. that is a big danger. what we are seeing is everybody going in the same direction. it is about time mr. abe and his regime think about what is positive in the governance change we are making right now. anna: back to the more short-term. we will wait to see what the bank of japan will do. they also have this comprehensive review of policy under way. what are your expectations about that? you could interpret it in either direction, whether it meant they were increasingly or less enthusiastic about the path of monetary policy they have been
following. >> i think they are really running out of land. they have conducted this negative, short-term interest rate policy. we have not witnessed the actual effect of that actually working. the more profound problem of japan is the structural, transitional side which the government is very slow at tackling right now. this is one of the reasons why things are not blooming at all and this is one of the frustrations that not only the economy but the community as a whole is feeling right now. latesthat is the thinking on perpetual bonds? they got a lot of talk as being the next step on this continuum of ever easier monetary policy, or helicopter money? it isis a possibility but proving it hasn't really worked. just a one-off.
think they should buy the pain and go for structural, painful transitions rather than the short-term solution that would only have a marginal effect. angie: out of everyone's control is the strength of the yen. i think the ball is in the court of the united states now. eyes are there to see the effect of how the yen is actually going to go. that would have a profound effect on the japanese markets. he iss where i think looking carefully at how the market response to what is going on in the united states, and that will be influenced by the monthly talks he will be making next week. angie: thank you very much.
.nna: welcome back i am anna edwards. angie: after an 11 year delay, hank greenberg finally reached court in tuesday. he is defending himself against claims he and his former cfo --h did the true condition worked of the books to hide the insurer's true condition. >> i did nothing improper. i just can't except that. reporter: it is your goal
medication? >> call it what you want. reporter: let's talk more broadly about where the line is for senior management between innocent stakes that get eight in every corporation and wrongdoing. we have a big issue for the country right now. where is that line? >> it is very difficult. it depends who is drawing the line. in some states, they understand that and they recognize that. in some states, they do not. i don't think it is any secret, a lot of this was political. that is not the way you should be drawing the lines. reporter: when you talk about political, it was originally brought by eliot spitzer. he is long gone. we have had two attorney general's since then. why has the office cap that up? what have they told you?
there has been a tendency to go after businesses, the attorney general's office keep describing him as a rich and powerful businessman. i never thought it was illegal to be rich or even to be powerful. invitation to go after people simply because rich , it is very dangerous. businessmen should not be immune from the law. but in a financial crisis, a lot of the people responsible were singled out. aig,eople that took over when he was forced to re
they engaged in very risky actions that brought down the aig stocks. they -- there is a lot of anger out there. to distinguish between executives who have knowledge and participate in the wrongdoing and those who are at the scene of the action. can't know what everybody in the company is doing. >> it is very disheartening when your own government destroys the greatest insurance company in
history. for what purpose? do we benefit from that? we used to employ 100,000 people. we are down to about 60. 40,000 jobs. in new york but nonetheless, around the country and elsewhere. is that the right role of government? ng: that was former aig chairman and ceo hank greenberg talking to david westin. 2008 when we saw the last global financial crisis. you can see the volatility is back as we remain in that kind of headspace. a lot of people thinking, anna, the central banks what have they done? nowhere to hide. all asset classes are dropping. anna: september raising questions about what central
♪ anna: volatility is back with a vengeance. asian stocks continue, while u.s. and u.k. futures point to a higher open. yunkern commissioner gives a speech. said to be proposing a higher offer of $56.5 billion for agricultural firm monsanto, and doubling the fee. and unilever's ceo tells bloomberg best central-bank stimulus is limiting economic growth. nothe reality is is it is giving us the growth that we