tv Bloomberg Markets Asia Bloomberg January 23, 2017 8:00pm-10:01pm EST
>> 9:00 a.m. in singapore, midday sydney, 8:00 monday evening in new york. i'm rishaad salamat from bloomberg's asia headquarters in hong kong. this is bloomberg markets. president trump dropping obama's landmark trade deal and promising tax cuts and terrorists -- and tariffs. back tos earnings pre-market meltdown levels and buying back $8 billion worth of shares.
mcdonald's all-day breakfast fueling a year-long sales surge, but customers are losing their appetites. an hour fromhalf the open here in hong kong. any tailwind,ting more like a few headwinds coming out of wall street. let's have a look at the markets about to come online, singapore, taiwan, kuala lumpur. flat,a stocks fairly giving a mixed picture in asia. what is happening with australian stocks given the jump in metal prices helping miners on the index. helping halted today drop. trump's remarks overnight, the dollar on the defense which is putting pressure on japanese shares in the nikkei 225 down .25% for a second straight day. to stop in focus is to conduct,
-- is takata falling for the second day, dropping 17% last i checked. let's take a look at what else is going on. on the cost be, they have swings so far, automakers dragging the most with hyundai leading the drop. reversing the days earlier advanced to a two-year high, falling over 1.5 cent. -- 1.5%. this morning, it did deliver a fourth-quarter earnings take -- peak. we will have more on samsung in a little while. a greek word on what is going on in the bond space -- a quick word on what is going on in the bond space given the rally we saw in treasuries based on trump's comments. to 10 year leo -- the 10 year yield pushed lower as investors shun risk.
we do have one person saying to watch treasuries because it is yields that are beating the dollar. if we could pull up the chart on the terminal, it is going to show you the correlation between treasury yields and the movements in the dollar. we have seen the rate on the benchmark 10 year notes moving in the same direction as the greenback. keep an eye out when it comes to what could guide the dollar going forward. rishaad: thank you. let's get you over to singapore and get over to house haslinda amin, who has got the first world news headlines. haslinda: rex tillerson is almost certain to become secretary of state as the foreign relations committee gave its approval and sent his nomination to the full senate. marco rubio says he will offer his backing despite questioning tillerson's links to russia when he was exxon mobil ceo. this -- the senate is now voting
on mike pompeo as a a director -- as cia director. we are told he has secured enough votes. the brexit plan will become clear on tuesday, when the supreme court will rule on whether the plan can go forward without parliamentary approval. if so, theresa may will launch article 15 by her self-imposed deadline. most members of the houses of parliament a post-brexit. yahoo! says the sale of its web business to verizon has been delayed until next quarter while it recovers from disclosure of two hacks. the deal had been expected to close in the current period. share gains after hours as fourth quarter results beat estimates. bristol-myers is user security is top priority. lg fourth-quarter sales and profits beat estimates.
operatingsuppliers on profit of $775 million well sales rose to $6.8 billion. meanwhile, they have secured a deal with samsung electronics possibly as soon as this year. and checking on shares, they are up .4%. global news 24 hours a day powered by over 2600 analysts in more than 120 countries. i'm has haslinda amin. bought backsung nearly $8 billion worth of shares after doubling orderly profits. ros has been on top of this story, more downs than ups. this seems to be an up. beoverall, samsung seems to good with it share prices, has not done too badly despite the last year.
it did say today it is going to buy back about $8 billion of shares in three to four phases and will cancel the shares it repurchase three in the first phase, expecting to buy back the chilean shares. it is part of a shareholder program unveiled at the end of november last year in response to pressure from activist shareholder elliott. let's take a look at the numbers released for the fourth quarter and the full year. net incomes for the fourth order , justhan doubled to 6.9 under 6 billion u.s. dollars, driven largely by the rising price of semiconductors. a recovery in its mobile business. you have to compare that against bloomberg analyst estimates which was 7 trillion, so slightly lower than expected. operating profit, --
if you look down at the divisional breakdown, which is what is interesting and we got today, you will see the chip billion very well, $4.2 as compared to 2.8 trillion euro layer. essentially, demand around the world is up, among one of the biggest chipmakers in the world. that is driving up the price further, which is great news. rishaad: what are they saying about that? what are they saying about the rest of the different silos or product lines they have for this year? rosalind: they are saying in the first quarter, they do expect earnings overall to decline quarter on quarter. earnings and some businesses are set to increase because, for example, increased marketing and in the mobile business also what they call weak seasonal demand.
sold 16 million televisions in the fourth quarter but have seen sales falling 40% in the first quarter. in the mobile business, they sold 90 million handsets and 80 million tablets in the first quarter, so they expect tablet sales to show a small decline. semiconductors and leds are doing well, expected to perform well in the first quarter of this year. if you look at things like the fact that chipmakers are doing well, oled prices are doing well, that will impact his other divisions like mobiles. because the parts are made to use those and are more expensive. that is partly one of the reasons. rishaad: thank you very much. let's have a look at what donald trump has been up to as president. he is carried out one of his biggest campaign promises, pulling the u.s. side of the transpacific partnership. this up ends decades of u.s.
policy and moves toward greater free-trade. ramy, reaction has been pretty swift. again, no surprise really. ramy: president trump had campaigned on this over the past few months in the run for the election, and now he is turning this around and is saying that he is going to fill -- fulfill one of his major campaign promises. american jobs, american lives. what you can to see on the twitter post from the potus account is the #americafirst. that is the running sentiment for today, mr. trump believing that the death of tpp helps put america first. let's take a listen. pres. trump: we just officially terminated tpp. [applause]
ramy: you can hear the clapping from his advisers next to him. mr. trump also talked about negotiating one-on-one agreements with members of the tpp -- with 11 members, spanning not just asia but also south america. he said if somebody -- a country in this case -- misbehaves, we will send a letter to straighten them out or they are gone. reaction has been mixed, both from democrats and republicans. on the democratic side, a lot of democrats were actually against the tpp, notably that guy on your screen, senator chuck schumer, the senate minority leader. he said tpp was dead long before president trump took office. we await real action on trade. on the republican side, mr. ,ccain, senator john mccain throwing some fire at donald trump, saying that abandoning the tpp is the wrong decision.
he says america has to stay in the asia-pacific, but this act opens the door to -- guess who -- china. a lot of people have been comparing this with the race between the u.s. and china in terms of influence in asia. right now, it looks like according to one commentor that the u.s. has put its own horse in the horse race out to pasture. rishaad: we also got trump meeting with u.s. business leaders to talk about import taxes and regulations. what do we know? ramy: in terms of import taxes, trump wants to use that as a togel or a stick in order get u.s. companies do not send their businesses overseas. take a listen. company thata wants to fire all of its people in the united states and build some factory someplace else and thinks that product is going to just flow across the border into
the united states, that is not going to happen. they are going to have a substantial border tax. ramy: more rhetoric as donald trump, now we are used to hearing from them. you see around the table, ceo you on mosque from tesla, also the dow chemical ceo, johnson and johnson ceo, lockheed martin. a lot of who's who in terms of business companies from the u.s. donald trump saying, stay in the united states. he also promised he would cut regulation to make it easier for them to operate in the u.s. for bigger profits, on the order of about 75%. not so much more on detail, but these are just the top headlines. potentially, we will hear more on details throughout the next 100 days. rishaad: thanks very much for that. that is ramy inocencio. still ahead, when stronger is not better.
rishaad: it is looking pretty doll at the moment. about 15 minutes to the trading day in singapore. let's have a look at what is going on there. gains in the index -- the straits times index. nikkei flat in tokyo. we already saw the straits times index, moving up by about .2%. we will get you back to the goldman sachs global macro conference taking place. is where stephen engle is with our next guest, getting out for
the commodities markets and has quite a positive take. that's right, we got a look at the global commodities outlook and who better to go to then jeff currey, the global commodities head at goldman sachs. it is the global macro conference. pricese wholesale backing inflation in china, opec supply cuts, a number of different things of various commodities. what is your general outlook? >> our positive outlook is not driven by the supply cuts coming out of opec. we would argue that opec is taking advantage of where we are in the business cycle and that is the first order driver of higher commodity prices. we have seen a stronger cyclical backdrop against a lack of investment and capacity over the previous three years for energy, five plus for metal.
that is grading tightness in the market and upward pressure. what opec did was take advantage of a rebalanced market likely to occur with or without a production cut at the end of this year and brought it forward. stephen: what is overall going to be the trump affect? >> a lot of what i am talking about his economic driven inflationary pressures due to stronger cyclical demand forces. if you think about trump and what is likely to happen, almost all of it is policy driven inflation. costeates friction, raises , and reinforces inflationary pressure we are beginning to see a rise from where we are in the cyclical business cycle. it reinforces a policy driven inflationary pressure on top of economic driven pressures. stephen: let's talk about oil and opec cuts as iraq is coming online with their pledges to cut. where do you see prices going?
is six months long enough to remove the glut? >> let's first talk about compliance. when we look at compliance and our expectation going into this cut, was significant implants out of the gulf states -- saudi, uae, kuwait, qatar. we are seeing 100% compliance. region such as libya, iraq, we expected to see increases, and we are seeing that. for 85%n target compliance, which is what our expectations were. in thinking about prices -- and thinking about prices, the question is, how does the u.s. respond? we saw an increase at 29, 1 of the largest we have seen recently. this is likely to lead to more supply in the second half of 2017. we have a price target on wti of 5750 during q2, when we expect inventories to decline.
further out, we see prices moderating to 55. prices can't get too far above 60 because the potential for supply response start to become significant in creating risk in 2018. our base is 55 in the second half of this year and 55 in the 2018. stephen: so six months is enough? >> you listen to what opec's rhetoric has been, it is not about price trading ranges but normalization of inventory. one reason is we create backwardation in the forward curve. going into the production cut, we had the opposite. stock prices were up 44, back end was 55. usc mp's used the back end up 55 for u.s. capitol. if opec can do that to the curb by lowered inventories, they benefit tremendously.
it reinforces their market share strategy. another reason is lower volatility in oil prices. they are issuing $70 billion of debt this year and the potential for an ipo of ramco. stephen: how do you see the shale rebound in the united states continue to supply uptick? >> our base case is that quarter over quarter increase this year is likely to be 500,000 barrels per day. there is room for that due to stronger demand growth and supply declines in some of the higher cost production. to get numbers too much higher -- it starts to become a problem. 55-60, thein the system can accommodate the supply increase out of the u.s. stephen: where does china play in? we saw wholesale prices ticking up. we saw the likes of cnooc increase capital expenditures
for the first time in several years. but their production targets are fairly low, lower than last year. where does china's supply and demand balance bit? >> -- f balanceit? >> broadly -- i'm going to take all out of that -- we are seeing supply curtailment's in steel, aluminum, oil. that is part of the business cycle. a lot of that is policy driven. policy orre if it is economic driven, it still gets us to a safe place. supplying curtailments is an issue coming out of china. the second issue is the manufacturing pmi was very strong for december, the highest in four and a half years. that indicates we have manufacturing momentum supporting the demand growth. the third issue is that when we , the about chinese credit stimulus we saw during december was substantial. that has a followthrough. it takes time.
if you look at the impulse response to a credit stimulus for infrastructure spending, it can take up to a year. we had a lot of credit stimulus last year, likely to be a feature of the market in terms of infrastructure demand growth the first half of this year. the second is property. it takes a while for that to filter through. we expect demand growth in china to follow through the credit stimulus and to be quite robust the first half of this year. what creates a? during the second half of the year and 2018, but at least it reinforces the outlook for commodity prices. stephen: are you looking closely at iron ore? a checkup in 2016, but some are calling for a drop off in prices as higher grades from brazil and argentina come into the system. last week, record high inventories of ore at the chinese ports. ,> i think the key, like in oil is the supply response to the capacity curtailments that we
rishaad: yahoo! is saying the sale of its core web business has been delayed for next quarter while it discovers from the closure of two massive packs. shares are gaining after-hours, user activity showing minimal declines. caroline hyde has this from san francisco. withine: yahoo! came out earnings that beat the street,
almost $1 billion in terms of revenue and earnings per share almost doubling. what was more interesting to investors was the fact that the deal with verizon had been delayed until the next quarter. sale of the main web operations to verizon as it continues to recover from the disclosure of massive packs. -- massive hacks. they emphasize they are working expeditiously to finish the deal and reported that user activity showed minimal declines after the announcement last month that as many as one billion accounts may have been compromised. ammunition to help preserve the price tag of $4.8 billion that verizon agreed to pay back in july. verizon declined to comment on the new timeframe, saying they were awaiting the completion of yahoos breach investigation before making a decision. yahoo!'s shares traded higher, so hopes remain the deal can get done as regulators continue to
rishaad: we are back with bloomberg markets: asia. i am rishaad salamat. at the moment, the yuan about 15 minutes ago was the strongest we have had for the currency since november 14. getting a reaction when it comes to the open, nearly upon us in shanghai and hong kong. talking of markets and equity markets, what we have is unconvincing as far as wall street. it is getting a few tailwinds. nikkei is up marginally and the hang seng, .3% higher. on the currency markets, remarks by the treasury secretary , about the. mnuchin
dollar being perhaps excessively strong and damaging the u.s. economy in the short term -- that is playing out in the markets. greenback against the majors, particularly looking at stirling, the yuan, and the yen on 113.1. let's get to the open. here is sophie. we are seeing the dollar pairs methods declines after the hit delivered by trump and mnuchin, gold giving up gains as well all u.s. 10 year yields are steady at 2.4% after falling seven basis points on monday. we have had seen strength on japanese shares, but they are now in the green here. overnight, we did see the end touch its lowest since november, but it has since retreated since the session high. in australia, the days best performer given the goods we are seeing in metal helping support
miners on the index. chinese stocks opening weaker, down about .1%, halting a two day climb. today, we did get a pbo see at 6.8 331 amid the dollar weakness. this is the strongest yuan fixing since november 14. hong kong extending monday's advance, up .33%, one of the big gainers we are seeing has been sinopec, rising even as its output falls the second year as aging oil fields shot. elsewhere, we are seeing hints of green on the taiex as well as malaysia and the singapore strait times, up about .4%, the sti up for a fourth day. something that is interesting when you compare the top performers in the region and the development.
we are going to see a rivalry heating up between the hang seng. you chart is going to show how singapore, hong kong, and new zealand stocks have been performing three the sti has returned about 5% year to date and housing has returned about 4% year to date. we have been seeing some moves between the white and blue line as they duke it out for the top spot. shares have been a major driver for the singapore index while the likes of ai aia -- rishaad: thank you very much. let's get to the first world news headlines in singapore with has haslinda amin. haslinda: samsung has announced it will buy back nearly $8 billion in shares after strong courtly results. fourth-quarter profit doubled to almost $6 billion, largely delayed by rising prices from memory chips and tv screens.
the results show the samsung empire was not badly burned by the overheating note 7 smartphone fiasco. president trump says he won't renegotiate a trade deal involving the u.s., canada, and mexico -- says he will renegotiate a trade deal involving the u.s. canada and mexico after scrapping the transpacific partnership. he says scrapping what he calls ridiculous trade deals will put people back to work. he spoke after meeting labor leaders. the afl-cio leader called quitting the tpp a good first step. australia does not expect trump policies to result in a u.s.-china trade war. the trade minister told bloomberg television australia needs global growth to continue and is working towards better into keycess and export markets like china, south korea, and japan. he says trade war would be the worst outcome for everyone. >> in a trade war, everyone
suffers. it is not a binary thing. if there is a trade were -- i don't think that is going to happen -- but everyone does worse as a consequence. russia has surpassed saudi arabia as the main supplier of oil to china. figures from 2016 show china imported 52.5 million pounds of crude from russia, up more 10 million from the year-earlier. saudi arabia shipped 51 million tons, the same as 2015, to fall the second-place. the third-largest oil supplier shipped almost 44 million tons last year. global news 24 hours a day, powered by more than 2600 reporters and analysts in more than 120 countries. i am has haslinda amin. this is bloomberg. continue toestors sell the u.s. dollar down as president trump begins tearing
up trade agreements. they have -- there have also been some comments from his treasury secretary, his nominee. david is looking at that. let's start off with steven mnuchin. david: let's put this into context. the treasury secretary nominee was answering questions, written answers to questions from senators. there was one question as it related to the u.s. dollar. basically the question was -- this is a copy of the transcript . one of the questions talked about how forecasters see the u.s. dollar appreciating about 25% to help offset the cost of impossible border tax. his answer was this -- the strength of the dollar has historically been tied to the strength of the economy, but from time to time, and excessively strong currency may have a negative short-term implication on the economy. these were written answers.
no other details were given on what it means to have an excessively strong currency, but rish, 25% move up in the dollar against any major trading partners currency -- you are going to see an immediate impact in manufacturing and a drying up of investment into the u.s., if it does happen. 25% is excessive, obviously. is, the old thing adage that a strong dollar is tied to a strong economy, he maintains that. david: we have seen it happen. he was posed another question, the other part i want to get to. essentially it was, president-elect at that time donald trump commented the dollar was too strong. secretary, will you use public statements to
influence the value of the u.s. dollar? directly, answer it but he said, i will maintain the position that a long-term strong and dependable currency is in the best interest of the u.s. economy. have look at historical data. essentially what it shows you is that whenever growth was at the best phase for the u.s. economy, this going back to 1970, it came at a time when the dollar was strong. he made the argument that the economy in the 1970's and early 1980's was different than today. that said, it happens. historical data to support the view that you can have a strong u.s. economy and a strong currency at the same time. rishaad: many seem to think that the dollar may weaken further short-term. what about down the road? there are people thinking this is essentially a reality check because interest-rate hikes
perhaps are leaving currency traders with no choice. david: absolutely. we don't really talk about the fed right now. what is longer-term forecasts are essentially saying is yield differentials will support the dollar rally. have a look at this chart. to bloomberg dollar index and the spread between 10 year treasuries and 10 year wants -- bonds. it is obvious the relationship is quite close. have a look at the forecast from credit suisse. what they are saying is that when you look short-term, you're going to see pressure on the mexican peso. the peso, 25 to the dollar. they are looking at say the chinese remember the, 6.3 is what they're calling for. short-term, we could see some pain. longer-term, the pieces seem to suggest it would be supportive of a strong dollar down the
road. rishaad: thank you very much for that. david ingles in singapore for us. brings brexit plan will become clearer today when the supreme court in london rules whether theresa may can launch the process without parliamentary improver -- approval. what is the court looking at and what does it mean for the process of getting out of the eu? they have to get on the eu one way or another because there was a referendum. not only theresa may but the parliament are on board with moving ahead, it is a question of how you do it. private citizen challenge the way theresa may was moving ahead. prerogatives cannot be invoked. it is technical, but a court decided against theresa may, so now the supreme court is ruling, pretty big deal. if she wins, she won't need approval from parliament, no special motion or bill. if she loses, something will be
needed, some kind of legislation to help her move ahead. that shet could demand maintain the greatest possible access to the eu's single market. they have been concerned about the hard brexit. the ruling comes at 9:30 a.m. london time, eight hours from now. rishaad: 5:30 hong kong. kathleen: she says she plans if the court rules against her to rush a short bill to try to move quickly. rishaad: the point being, this is going to be a long process. we should put it into context. there's going to be followed before it even happens. kathleen: there is already fallout, some pretty dark brexit clouds over the u.k. economy. fascinating, over the next 24 hours, u.k. real estate a surveys -- there was -- they are only 40% positive on the industry, 80% year ago.
a company is pulling out of a big project they had planned in london. are news team points out that the economic momentum is expected to sag. rishaad: they were expecting that straightaway and got that wrong. kathleen: it plays out well. number one, maybe because he moved so quickly, we have not seen the worst impact. number two, impacts play out over time. that is why people have not gotten fully on board with a stronger board -- pound. the can see on the screen. another reason probably why theresa may is defying those in the eu saying you cannot negotiate deals with the u.s. or australia until you actually trigger brexit. she says, actually -- that's take a look at another chart. 1457, just to remind us how important this deal with the eu is. about 50% of all u.k. exports are going there.
next biggest is the u.s. clearly, she has got to scramble to find something to make up for that if they lose it, if they get more terrorists -- if they tariffs. that is why parliament want to pursue a meaningful role if she loses. rishaad: thank you, kathleen hays. coming up, trump trashing tpp so what is next for international trade relations? we have got an economist running us next. ♪
let's get to david. put this into context. he did what he promised he would do. david: it was not unexpected, but what is unexpected is that you have people like the australian prime minister reaching out to shinzo abe in japan last night and the prime minister's of new zealand and singapore, saying, let's take the tpp with its 11 members and see if we can drive that ford without the united states. is going to be interesting to watch out for. they might possibly still base the levels of regulation, which are inherent in the tpp, on the u.s. standard, which was always the way. it will be interesting to see what they do. they could do it without the u.s., but having the u.s. would have given us so much more of an impetus. rishaad: it is down to. to.t is bound
where does it leave this part of the world when it comes to trade? there is another deal still being negotiated? david: it is a grouping led by a 10 member as the on. it has got free trade agreements with six other countries -- australia, japan, china, india. they want to harmonize all those free trade arrangements. people look at this and say, this is a chinese lead trade initiative. ledit is not it is an asian trade initiative of which china is a member. what it means is that china can stand up and say, we are taking the lead on globalization, taking the lead on free trade, and filling a void which has been left by the united states and donald trump with the exit from tpp. rishaad: thank you. i want to bring you a quote from the cato institute.
has the president been the one to initiate protectionism and protectionist policies and been so vocal about turning inward. u.s. trade policy has been geared toward liberalization and internationalism." this is the asia economist at hsbc. thanks for joining us. what you make of this? this is a really good quote. this is the first time this has happened, then initiated by president. >> from our perspective, trying to announce what this means for asian economies, we know that tpp is not going forward. we can focus in other places and see what the impact would be, not only on trade, but also the economy. tpp was a good center for a form for vietnam and malaysia, where they would have been incentivized to reform. it was not just trade, it had
broader implications. rishaad: can it actually exist without having the united states? >> based on who we have spoken to, it is probably very difficult. a lot of the investment for tpp was for the end market of the u.s. i'm sure i can exist in theory, but is the incentive there to go through the rest of the negotiation and change what needs to be changed? what we are seeing is that it will lose momentum. rishaad: is there any truth to what donald trump was saying about this being a bad deal for american workers and -- let's actually keep it to tpp. any truth in that? >> depends on what angle you take. if you look at u.s. corporations, it was very good because it allowed them more flexibility with their supply chains. if you focus on u.s. manufacturing employment has been going down, you can say maybe it has to do with free-trade but mostly it is
innovation and higher productivity. i would not put the blame entirely on this free trade agreement, which would have incentivized economic gains. rishaad: tell me about the other deal. broader in terms of the countries, but it is not as ambitious in terms of the subject matter. it does not focus on sle is, it is -- focus on soe's. it would bring china and india into a free-trade agreement for the first time. rishaad: india has been dragging its heels. >> they have wanted various tariff schedules. have changed negotiating tactic. it is probably not going to be as ambitious when you look at the actual tariffs production levels and levels of integration, hours probably won't be as good as tpp but it does offer a broader deal geographically. rishaad: the point is to boost trade volumes across this part
of the world. goal.s our step -- rcep's do you think it will? >> yes, bringing japan and india and china together can incentivize a lot of trade volumes. the u.s. is still very important, but a lot of our analysis shows that from the are 2000 to the financial crisis and since, it is china increasing the domestic market that has been a bigger drive of trade. rishaad: you must do a lot of economic modeling. have one scenario of, this is what is going to look like in terms of growth forecast tppthe members of rcep and years ahead, factoring in what the two agreements include? does the removal of tpp change that analysis? >> denounces looks quite similar for tpp and rcep. different member nations, but a muchrrors that to
lower magnitude, particularly for vietnam. they werehowed that getting a 15% boost to gdp, very impressive. them,ll exists rcep for because they're an up-and-coming story. they are going to still see the benefit, just not the same degree. there is not the same push for domestic reform. rishaad: so you are downgrading your forecast for vietnam looking ahead? or not going to tell me anyway. what it does do is suggest a degree of isolationism and protectionism that people are worried about. >> yes, exactly, the key concern. it is not just for tpp but policies in the coming weeks, particularly because trade is the main focus for now, whether with china, with tariffs, the border adjustment tax. all this matters for export
comedies -- economies in asia. you have to think of the second-round impact, which affects china's trading partners. it is much broader than it seems. rishaad: an interconnected world. thank you very much. coming up, why fast food lovers could be losing their appetite for mcdonald's all-day breakfast. ♪
rishaad: a quick check of the business headlines -- citigroup will pay almost a $9 million to settle allegations of misleading u.s. mortgage borrowers. the consumer financial protection bureau saying they failed to perform -- inform consumers of options to avoid foreclosure and misled them about the impact of postponing payment deadlines. stake has acquired a 33% in a music streaming service owned by jay-z.
the music business worldwide reporting the wireless carrier paid some $200 million here. sprint is hoping to attract customers with exclusive content. jc -- jay-z will still run the business. he bought it in 2015. another big name to deliver disappointing news was mcdonald's, with u.s. sales dipping as its all-day breakfast failed to win new customers. we have this from new york. >> the biggest fast food chain on the planet apparently saw the initial bump from all-day breakfast wane, and it reported a fourth-quarter drop in u.s. sales, breaking a winning streak. global sales were on the rise. in 2015 when mcdonald's started its turnaround plan, the idea of all day a commitment and's seemed to thrill a lot of the customers, but that has lost its novelty. fell bye-store sales
1.3%, while that is in line, the u.s. has long been a source of u.s. growth. globally, sales came in a 2.7%, exceeding estimates. the unit that involves china shop -- saw sales up 7%. china recently struck a deal with investors to take on operations in china and may have a similar deal in japan, part of its long-term goal to see up to 95% of its stores run as franchises. meanwhile, mcdonald's indicates it is trying to upgrade its technological efforts, although analysts are not sure how that will make a difference. the u.k. and germany units appear to be advanced. dunkin doughnuts and starbucks are two rivals that are way ahead in terms of mobile pay and ordering. in new york, su keenan, bloomberg news. rishaad: up next, we are going to be looking at what is going
rishaad: it is almost 10:00 in the morning in singapore, 1:00 p.m. in sydney, 9:00 in the evening on the eastern seaboard of the u.s. i'm rishaad salamat from bloomberg's asia headquarters in hong kong. this is bloomberg markets: asia. ♪ president dropping obama's landmark deal in -- and taxes and tariffs. further flight delays.
japan's struggling passenger jet will not be reaching customers until at least 2020. trading day getting underway over at jakarta. let's get the pulse of what is happening market wise. we are moving to the upside, a couple of exceptions but overall, fighting the headwinds coming from wall street. >> the marginal upside we are seeing in asia. asia stocks rising as gains offset the losses we are seeing in other sectors. auto stocks, they are getting hit in particular with korea and carmakers leading losses, the kia motors.ndai and toyota and honda also in the red. they cut the outlook to negative from stable.
carmakers perhaps getting caught up in the more negative view from what trump had to say and the impact for exporters in the region. taking a closer look at what is happening in equity markets, we are seeing that softening of the jobless drop. and strength abating somewhat. fluctuations when it comes to japanese shares. take a look at the movers on the nikkei 225. falling over 5%. goldman cut the stock to sell from neutral. stalker has been in focus in japan has been takata. f--ning on its first day of trading on its first day of four. sx 200 is getting a lift from the optimistic first
adjustment. we have the medical equipment maker in second place, climbing after it orderly revenue topped estimates. over on the shanghai composite, it is reversing the gains we saw earlier, amid dollar weakness we yuanhe pboc set the daily at its strongest since november 14 said keep an eye on that. a quick word on singaporean stocks rising for a fourth day. morgan stanley raised singapore to equal weight from underweight on improving earnings. same for thailand. morgan stanley upgrading that area. thank you very much indeed for that. let's get to the first word news headlines. rex tillerson is him must certain to become secretary of state as the foreign relations committee gave its approval and send his nomination to the full senate.
marco rubio said he will offer his backing to fight questioning tuitions links to russia when he was exxon mobil ceo. the senate has been voting on the cia director. he has now been officially confirmed. agent says he will work with president trump to examine trade relations with china and "assess the damage from china's practice of intervening in currency markets." warned that an excessively strong dollar could have a negative effect on the u.s. economy. the u.k.'s brexit plan will become clear on tuesday with the supreme court ruling on whether the process can start without parliament will. if the decision goes against the may plans toheresa launch article -- the article
herself. most members of parliament of post-brexit in a last year's referendum. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. amin.aslinda this is bloomberg. nearly 8 is divided by billion shares. let's get an idea of the details. about $8 billion of a buyback. this is part of a program it announced at the end of november last year. the shareholder return program. we have more details. the first phase will last for three months starting tomorrow, january 25 and it will buy back to .3 chilean shares in the first phase. comeyear in 2016 it did late a share buyback worth 11.3
trillion yuan. generally samsung did not do too badly last year compared to what could have happened considering everything thrown at it. rishaad: people tend to look ahead and look at what the company is saying about what happens next. no matter how they see the different goods performing. >> for the first quarter something says that overall earnings are expected to decline. to decreasere set because of high marketing costs for divisions like its mobile business and because of falling tv sales. it is saying it sold 60 million lcd televisions and sales falling 40% in the first quarter. did perform pretty strongly.
net income more than doubling to under 6 billion u.s. dollars. are -- a recovery in its mobile business. in [inaudible] versus 2.4 billion a year earlier. there's a lot of rising demand. something that is doing very well. prices are going up. like tvs are not doing too well. [inaudible] they are under a little bit of pressure. generally saying that the see [inaudible] a prosecutorntion pro. one of those things that the
company has had to do with of late. a special prosecutor looking the probe and this could limit growth seeking efforts. for samsung the company seems to be moving forward. a little uncertain for this year but there could be other things coming out of the woodwork. rishaad: no doubt you will be there. president trump, it does seem strange calling him that. he has carried out one of his biggest campaign promises pulling the u.s. out of the transpacific partnership upending decades of policy that tilted toward greater free trade. reaction has been swift. on thissurprise occasion. >> no surprise here and better get used to saying president
trump. it will be around for the next four years or so. back to what has been happening today. the withdrawal from the tpp, what we're looking at here is the push by mr. trump to protect the american worker, you can see his latest tweet on twitter. first.n see the #america he thinks the death of the tpp would help the american worker. mr. trump: we officially terminated tpp. >> support from his advisers thereafter terminating the tpp. the long-running foreign policy signature attempt by president barack obama. but now, mr. trump wants to negotiate bilateral agreements agreementsone-on-one
with members of the tpp but reaction to all of this has been mixed from democrats as well as republicans in washington. for example, take a look at the democrats' side. charles schumer, chuck schumer, the senate minority leader, is with mr. trump saying the tpp was dead long before president trump took office. turns out that twice as many democrats voted against the tpp than for it. because of labor issues as well as other things. side,ms of the republican president trump getting some fire from a big critic on this. mccain see senator john saying that abandoning the tpp is a run decision and that america needs to stay in the --a-pacific stem sibley extensively to push back against china's growing sphere of influence. it is opening the door according to many critics that china will be able to push back against the u.s. influence in the region.
rishaad: he has been meeting with u.s. business leaders talking about import taxes and regulations here as well. what is the message coming out of those talks? >> the message from mr. trump is one of stick versus the carrot. basically threatening although it was an optimistic tone but threatening a bunch of u.s. business leaders who had come to the table at a monday breakfast meeting with mr. trump. saying staymmer -- in the u.s. or else. take a listen. wantsump: a company that to fire its people in the united states and build some factory someplace else and then thinks the product will just flow across the border into the united states, that is not going to happen. they will have order taxes, substantial border taxes. dow, johnson & johnson and tesla were in attendance. you can see elon musk. he promised to roll back
regulations on the order of 75% full day one is over. we will see what kind of detail comes out in the days and the first 100 days in office. you so much for that. we will look at why there is no place like home. it is no longer the case for many chinese tourists this lunar new year. and comparing relations with a game of chess. ♪
week to discuss restructuring. considering forming a holding company that would oversee its business interests. a newspaper reporting it may sell its stakes in several group companies. china's acquisitive billionaire is shopping again. his aim is to buy nordic cinema group. pushing the leading theater chain further into the european market. it is based in stockholm and has 68 cinemas and stakes and other operations. amc would control 1000 theaters and 11,000 screens and 15 companies. as countries. sales coming out beating estimates. asfit did the same thing well. sales rose to 6.8 billion. we have sources telling us that lg display has secured a deal to supply samsung electronics possibly as soon as this year to
replace a sharp foxconn venture. down 2.5%.on the way did follow through on his pledge to pull the u.s. out of the transpacific .artnership or tpp adds to concerns that protectionism and its impact. tell us about this. was already dead. i think what is really important going forward is what he will do with nafta. significantly restructuring nafta depending on how he does it could have an impact on global growth. global growth in real terms has been stagnating for 18 or two for months now. and so the question is -- rishaad: it is not due to the economic cycle. guest: it is weird.
we have not seen this in about 40 years. stagnant already in a global trade picture and the idea of a trump breaking down major agreements like nafta could send that into negative territory in terms of growth. interesting, this he want to renegotiate nafta, he wants to renegotiate various other trade agreements as well. you had an interesting observation. there is nonsense out there that if this it countries always win great negotiations and you are saying it is nonsense. america is a deficit trading nation. isst: i think that argument not really working. let's get away from the theory and look at three major asian countries that have had protracted trade negotiations with the u.s., japan, south korea, and taiwan. this has happened in the 1980's
and 1990's. just look at those countries and ask yourself, did they lose after they negotiated with the u.s.? i do not think they did. they benefit quite a bit from their economic relationship. in trump's case, he is looking at a very narrow sector of the u.s. economy. i do not want to be unsympathetic. the bottom line here is that there is an entire major swath of the u.s. population that has been ignored by the elite and i am sympathetic to that. the question for them is our trump's policies going to do what he is advertising they are going to do? if he does not manage to achieve his aims he will disappoint his base. that is the real question to look at. countries havese been from your view benefited
itm the 1980's and 1990's, means the u.s. has not? guests: it has not. a situationd of where there is a positive sum game. everyone can win but that also means in this day and age, everyone can lose. if you withdraw from trade, everybody can lose. you see nafta as being the bigger game changer then tpp. guest: nafta is part of the natural progression of the supply chain. if donald trump wants to throw the supply chain into reverse, while the car is heading down the road, the transition -- transmission may drop out of the bottom. i do not know if you have done that with a car but it can happen. rishaad: ok. he wants to reset relations with china. and not be bullied by china as
he has been hinting here. what can china really offer the u.s. in that regard? you can argue the u.s. has been the same. guest: we took a look at this and the answer was, not much. some of the u.s.-china diplomacy , the important ones, particularly the strategic and economic dialogue, they are so vague, there is nothing there. i suspect trump is going to tear that up. even though supposedly very serious commitments by one nation to another, there is no meat on the bones there. that one ofertime the things that will happen is that trump has to decide how much chinese investment he is going to allow in the u.s. that was a pattern with japan. once we had trade disputes, it became advantageous with the japanese to invest in the u.s. and produce and hire people there.
china has been facing a lot of obstacles because of concerns over security. your item just now mentioned about the movie chains. one of the things that the u.s. and china could do that would be win-win would be if the u.s. can decide what types of chinese investment can come into the u.s. and actually create jobs. there,: how did you get you likened it to a game of chess. what is your opening move? guest: i think there are lots of areas that do not have a security application. the u.s. and china can talk about this. , part ofchinese want what the chinese want from the u.s. is technology the u.s. is not willing to give up for military reasons. i do not think that problem will be solved anytime soon but there are many other areas of business that is based on the u.s. consumer spending. i think china will be interested
in that. and the u.s. probably would not mind having some more investment in this area. what we do not want to see is any kind of preferential arrangement that is not based on good business. he is to be a businessman. cut a u.s. is willing to deal with the u.k., for example, but not china, that looks a little weird in this day and age. week,d: the meeting this trump and may. gain is with the eu, everything depends on that. on what trump and may can do. may is going to china afterwards. that's is anything about the gain. is all we have time for but thank you for coming in. ma.ing at jack good for america could
rishaad: alibaba were releasing quarterly earnings. investors should be prepared for a wild ride. us now from tokyo. what are we looking for later? >> expectations are still pretty high for alibaba despite the slowing china economy. analysts are looking for revenue to increase 45% just over $7 billion. profit should increase by a slightly smaller amount as the company invests in a range of new businesses that they are trying to get into, including cloud computing and other areas. we think of alibaba as an e-commerce company and it has been focused on china. they are trying to expand into other areas. one growth area has been advertising where on the
e-commerce site form they allow businesses to advertise in more targeted ways to draw consumers they want. in addition, they have been putting a lot of money into cloud computing similar to amazon in that respect. that business has been growing very quickly. investors will look at those, they like a bit more detail on some of these investments they have made. they have been vested in rick and mortar stores including this department store chain in china. they want to see how those wheels are supposed to work out in the future. doingd: how is alibaba compared to rival tencent? >> they're interesting companies. alibaba went public over two years ago. shares have had a 30 volatile right since then. they have gone up and down dramatically. a lot of it has to do with the chinese economy because they still get the vast majority of their revenue from china and is china slows, they're consumed -- there are concerns about
consumer spending. alibaba shares are on the rise. they are leaders in the internet space in china and their market caps are close. alibaba trades in the u.s. and they closed at $246 billion in market value and tencent is behind them. differences than 2% between the companies. they have been sending the pace in the china internet space. we will see more about that in the earnings later on today. ma'sad: what about jack ability to create a million jobs in the u.s.? >> that led to a lot of skepticism when it came out. themeporter interviewed and they said they will fan out with sales people in trade get more small businesses to sign up to create these jobs and then do business with china. despite this talk of a trade war. rishaad: great talking to you.
>> i have the first word headlines. samsung received strong quarterly results. the profitable to almost $6 billion due to rising prices for memory chips. the samsung empire was not too badly burned by the overheating note 7 smartphone fiaco. president trump says he will renegotiate the trade deal involving the u.s., canada, and mexico after scrapping american involvement in the transpacific partnership. he is stopping what he calls
ridiculous trade deals and he says this will put a lot of people back to work. australia does not expect the policies from the trump administration to result in a u.s.-china trade war. australia needs global growth to continue and is working towards further market access in the key export markets, like china, south korea, and japan. everyone trade war, suffers. if there is a trade war, and i don't think that will happen, everyone does worse as a consequence. reporter: citigroup will pay almost $29 million to settle misleadingtions of the markets. the financial protection bureau
says they failed to inform and they were misled about the impact of postponing payment deadlines. global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. this is bloomberg. this is "bloomberg markets: asia." let's get straight to the markets. fluctuationeing when it comes to the asian trading day. the impact of trump's protectionist tone. but asian stocks are higher for a second day. one of the big themes today, the dollar. it is easing some of the declines we saw earlier. the yen is reversing earlier gains overnight.
that is putting some pressure on japanese shares going into the midday break. by .1%.ei 225 lower look at how the currency's are playing out today. the korean yuan leading gains in the asian currency. the dollar also getting support from the overall drop in treasury yields. and the ringgit climbing to a six-week high. speculators have been targeting this currency in particular. for the offshore rates, just above 6.80. we do see implied volatility for yuan below thee january high. traders might not be anticipating movement before the chinese holiday.
treasuries are steady at 2.4%. aussi bonds are also rallying. gold is sliding, but also near that two month high. and crude is holding at $53 a barrel. rishaad: thanks. right, looking at the dollar. we have got donald trump tearing up trade agreements, we have been hearing about this all morning. we had comments from his fingerti treasury secretary. let's look at what steve nugent has been saying. >> but we have started to see from president trump and the treasury secretary nominee our comments aimed at the strength of the dollar. when policymakers start describing the currency in a certain way, the market
readjusts the other way. first, have a look at this historical data. the underlying message is shown that this new government in the believes a strong dollar is good for the economy. look at historical data, 1970, we have seen this happen. at times when the economy does very well, that is when the dollar is strongest. one of the questions steven mnuchin was asked, in light of some of these public comments from the president, as treasury secretary, are you going to use public statements to influence the value of the u.s. dollar? to which he said, i will maintain the position that long-term, a strong and dependable dollar is in the best interest of the united states.
recognizing of course, that at certain times longer-term, that might not be the case. rishaad: didn't he also say it becomes counterproductive if the currency becomes too strong? >> yes, he did. let's put that into context because the question he was posed was, forecasting a 25% r,crease in the dolla offsetting a potential border tax. he came out and said the strength of the dollar, and we have talked about historically, it has moved in line with the u.s. economy. that said, an excessively strong dollar at times could have negative short-term implications on the economy. we don't have to spell out what will happen to manufacturing if the dollar goes up 25%, regardless of which currency pair we are talking about. rishaad: the fed will be absolutely central in all this. >> absolutely.
i think that has taken a backseat for obvious reasons, but what a lot of these forecasters longer-term are telling us is if the fed raises rates twice or thrice this year, look at yield differentials. look at my bloomberg chart here. this is a fairly simple one. you have the spread and the correlation with the strength of the u.s. dollar, going back to 2005. we are looking at the left side of your screen, where as you can see, the correlation is the strongest it has been in the last 10 years. looking at forecasts right now, the u.s. 10 year is thaat 2.4, and yields are forecasted to increase to 2.7. when we are looking at forecast on the tenure jgb we are looking at a forecast of zero.
longer-term, if you look at the beamics in place, don't surprised if the dollar strengthens further from here. rishaad: thank you very much. let's have a look at what is happening with the brexit. we have got a decision by the supreme court in london. it does rule whether theresa may can launch the parliamentary approval. thating down utnil 5:30, is when we get the decision. what does this decision actually mean, and what does it mean for britain's plans to leave the eu? the brexit vote was in june. the court decided against theresa may and the u.k. government. so, the case goes to the supreme court. the question is, can she just do
what she was doing and more or less trigger brexit unilaterally without a major vote, or bill, legislation from the parliament? court says hee can do that without approval. but if she loses, some new motion will be needed and it gets more complicated. the parliament cannot stop the brexit from occurring because there was a referendum. rishaad: but there is the point that she is actually trying to get around going through well, the lawmaking body of the united kingdom. >> it took a private citizen to challenge them on this. now, if it goes back to them, they could create amendments. there has been a lot of talk how that might play out. above all, maybe they don't want a hard brexit, maybe they do not want to pay higher tar iffs. have said already
that if she loses, she has a short bill ready for parliament. she is preparing for all outcomes. lords cannot stop it either, but they can delay it about two years. tell me about the fallout here, as well. there is a lot at stake. you are talking about britain's trade relationship with the eu earlier. >> so far, the eu economy has held up quite well after the bank of england took huge steps last year to make sure that it would, i think. but there are some dark clouds. retail% of u.k. real executives have a positive forecast for 2017. lets look at the chart and some numbers. compare the far left, 0.6% gdp
in the middle of last year, 2016 . a loss of momentum. that is the consensus there. it is probably no wonder then that the majority of the stories are about theresa may getting ready to defy the eu nations. they said you cannot negotiate new trade deals until you actually brexit from the eu. here's why. let's take a look at this chart now. it shows the dependence of u.k. trade on the eu. nearly half of their exports go to the eu. the next biggest one would be the u.s. at 10%. u.k. labor leaders in parliament say they will pursue the opportunity to have a meaningful ow if therexit nw court rules against theresa may. they don't just want the rubberstamp. it is exciting. brexit is not just about the u.k. and eu.
music streaming service own ed by jay-z. sprint is hoping to attract customers with exclusive content. the chief executive will join the board, but jay-z will run the business. he bought itle for $26 million in 2015. beating third-quarter estimates, india's biggest consumer goods company rises to $153 million. however, sales fell for a second quarter and revenue decreased. now you factors around the world are -- manufacturers around the world are awaiting for the impact of the u.s.'s withdrawal
from the transpacific partnership. more trade barriers are expected to go up. >> it is not a big surprise, first of all. this was widely expected. it does underscore though, that we can expect a focus on trade, u.s. manufacturing, and we do th ink that trade barriers will probably go up. we do not expect the sort of numbers on the across-the-board basis that trump was using in the campaign, 35% on china. but we do think this will be a major focus and what we have seen so far confirms that. >> is there an alternative that could step into its place? john mccain says this opens the door for china to take a lead. now, trump seems to be backing away. >> and certainly opens more room for other countries to take the lead on global trade. in terms of alternatives, they
are also -- there is also the question of what the u.s. might do on a more systematic basis to try to help u.s. manufacturing and exports. as you know, there are a number of tax proposals on the trable. the border adjusted tax, different versions of that. there has been a lot of debate about that. all of these things i think will be on the table and we will learn a lot more about what the preferred path will be over the next couple months. >> if we take out politics and just look at the economics of it, how does this, or does it, affect your outlook for 2017, for the u.s. economy and global economy? >> it does to some degree. the economy generally is in pretty decent shape in the u.s. are looking at the employment from last year, especially in the early part of the year, it was weaker on the
growth side. since the middle of the year, we have seen renewed acceleration on the back of some of the friendlier financial conditions. we think that will still yield benefits in 2017. now, the main change in our outlook is that we are not building -- we are now building in easier fiscal policy, prolonging this period of growth into 2018. moreink that we will have hikes. let's look at the currency markets. of course, we had those remarks from steven mnuchin about the dollar and the excesse ive strength harming the u.s. economy in the short term.
we will count all the way up to 112.84 yen against the dollar there. moving again to the upside, affecting t those exporters. the aussi dollar, same theme flyinplaying out. we will have a look at what is going on in the fx session. strength.ar in spending.ge we will have a look at the mutual benefit for the country as millions travel for the lunar new year. this is bloomberg. ♪
rishaad: welcome back with "bloomberg markets." indian digital payments provider is making a push into banking. they will launch operations by march and they are targeting 200 million customers within one year. it seems pretty ambitious. the alibaba that company is winning the thumbs up from rbi. deposits, but not lend money out. the chinese phone maker is losing the international chief, who is returning to silicon valley after four years.
leader iny became the the market before getting these dethroned. he will leave after the lunar new year, but has not said what he will be doing next. yahoo says the sale to verizon is being delayed until the next quarter as it recovers forrom two massive hacks. third-quarter revenue shares gained after hours. enhancingive says user security is a top priority. the u.s. sales dipped, and that -apart from doing well initially, they are having trouble getting new customers. >> the biggest fast food chain on the planet apparently saw the initial bump from holiday
breakfasts wane and reported a fourth-quarter drop in u.s. sales. global sales however, were on the rise. in 2015, when mcdonald started the turnaround plan, the idea of cmuffinsegg m seemed to thrill the customers, but that has lost its novelty. u.s. has long been a source of u.s. growth. globally phil came in at -- globally, sales came in at 2.7%. in china, sales were up 7%. mcdonald's recently struck up a deal with investors to take up operations in china. they are looking at this for a similar deal with the japan unit. part of the long-term goal, to see up to 95% of its stores run as franchises. meanwhile, mcdonald's indicates
it is trying to upgrade. its technological efforts. although, analysts are not sure how that will make a difference. the u.k. and a units seem to be -- the u.k. and germany units seem to be ahead here. rishaad: hundreds of millions of chinese holidaymakers are on the move this lunar new year with ever-increasing numbers heading abroad. the chinese online booking site says there is a jump this year. >> we had seen a very clear growth trend with chinese travel, especially to the popular destinations, like southwest asia, europe, japan, korea, and america. chinese aree, the upgrading how much they are spending on traveling. we are seeing more tailor-made
trips. rishaad: we look at which countries benefit from the world's biggest mass movement of people. an ever greater number of chinese are looking to fly the coup. about 6 million are expected to take off from airports like the one behind me this year. that is equivalent almost to the population of denmark. they will be flying to 170 different countries and regions around the world. japan, and south korea, big shopping destinations for chinese tourists. this is good news for the chinese airlines. they have been upping their prices and making sure they have enough capacity. it is also good news for the host nations because chinese tourists now outspend their american counterparts. $255e expecting about
billion a year on that travel by 2025. that compares to the $137 billion they spent in 2017. travel and tourism, a key sector for the chinese government. they hope, despite a weaker yuan, the areas look continue to fly high in 2017. was signedp officially to the wastepaper basket of history. the dollar is weakening. let's look at how we will be covering those stories and many others, with the rest of bloomberg markets asia. what have we got. >> huge news out of the u.s. they opted out of the transpacific trade deal. years in the making. we will be discussing the winners and losers out of the u.s.. will trump replace the tpp with
er trade deals. also, the u.k. supreme court rules on whether triggering brexit needs parliamentary approval. 11 judges ares 11 giving out their verdict on that. and what that means for theresa may as she moves forward with her plans for brexit. what is the likelihood of the amendment if it does have to go through parliament? also, we will discuss european stocks because according to goldman sachs, they performed well over u.s. stocks. we will be discussing that. all of that, coming up on n "bloomberg markets: asia." ♪
>> from our studios in new york city, this is "charlie rose." donald john trump was sworn in as the 45th president of the united states to date. an estimated 800,000 people gathered at the white house as he took the oath, led by john roberts. president trump: i do solemnly swear that i will faithfully execute the office of president of the united states. >>