tv Bloomberg Daybreak Asia Bloomberg January 25, 2017 7:00pm-8:01pm EST
yvonne: asia pacific markets are seeing extending the global rally, and the dow topped 20,000 for the first time. president trump pushes forward for his plans with the mexican wall. net income fell 80%. >> and theresa may heads to washington, telling reporters america and britain can be the world again. yvonne: this is "daybreak asia."
anchor: i am julie hyman. we have this update for the markets. without getting above 20,000 for the first time. s&p and nasdaq at records as well. you kind of have to ask what triggered the rally. is thing people tell us clarity. the first week after donald trump office, he is signing quite a few executive orders. let's have the market open. trump following through with his promise about the wall, we are seeing stocks rise.
in asia.tch of green taking a look at the markets that are open. new zealand up one third of a percent. inflation data from wellington, coming in faster than expected. higher, aboutning 125%. .e got economic data let's take a look at what is moving on that index. toshiba up 3%. checking in on the movers of the day. we do expect earnings out of -- later this day. the next is what is going on with china's industrial profits for december. we are going to see producer prices higher which could give
chinese stocks a lift. mentioned we are waiting for some earnings. there are already earnings out. are there highlights? have a report of fourth-quarter numbers. estimates onng surging chip prices, up almost 2%. sales decline 21%. it is optimistic of its future, hynik saying it is developing production of a fourth-generation chip. display, fal ling about 0.3%.
julie: thanks. back here in the u.s., president trump is moving ahead with his pledge to build a wall on the mexican border. tosigned an executive order provide funds for the project and also curtail immigration from what he called terror prone countries. on the wall, what happens now? reporter: we are going to see in terms of the timeline, mr. trump he could spend over the next few months. we don't have many more details. he is going to talk about how that is going to be paid. we have been talking about mexico being forced to pay, but the mexican president says he will not pay for that wall. for the details of the executive order, you can see mr. trump signing and. he is going to begin building that wall. it involves more border agents,
10,000 more. and which is immigrations customs officers. he was visiting the department of homeland security today, which has primary control over those orders. let's take a listen. president trump: a nation borders is not a nation. beginning today, the u.s. gets back control of its borders. it gets back exporters. >> you hear him saying that about the borders. party wasf his own at a bloomberg event earlier today. he basically said, i don't think mexico is going to appropriate dollars to pay for this. it is interesting. he is a representative on the state of texas, which would border on that wall. he did say, he could see some go towards mexicans
potentially subsidizing the cost ofthe wall with a cost 10-20,000,000,000 dollars. there needs to be a lot of building materials cold in here to read in terms of share somes, you can see that in of these prices. eagle, which is a cement maker, as well as martin, also a cement maker, record highs. a sandmaterials company and gravel supplier, seeing the highest since november. the mexican peso strengthened by about 2% or so today. 2.1%. the gainers and losers in terms of what has been happening. in terms of the depth, i suppose would beh of this, it longer. the wall would be longer than building a wall from hong kong
to singapore. twice could fly to taipei round trip to get a wall and it would still be longer. wow.e: and the price remains a big question as well. another thing that happened is the president signed in executive order linked to stopping refugees from entering the u.s. to read which countries does that expect? it comes toen terrorism, this is the focus for this order. middle to focus on the east and north african countries. the list includes several countries. libya, yemen, somalia, iraq, and iran. syria, of course. a couple of the details, this would actually involve what donald trump has quoted as extreme betting on the campaign trail. he is going to go ahead with that. he is going to have a 30 day
stop to travel entry from those nations as well as a six-month freeze for refugee admissions. freeze, the0 day program would be restarted. once it gets restarted, the number of admissions would be cut by half from about 100 and ,000 to 50,000. anchor: let's get to the first word news. courtney: the president of the new york stock exchange says the trunk and ministries and could be good for his miss. he is also optimistic for the ipo market. he characterized wednesday as a as the dow jones past 20,000 for the first time. >> my hope is it is emblematic of a healthy, growing economy. let us hope.
let's see if the administration executes on the things they have said they are going to do which will be good for business. courtney: theresa may says she will publish her plan for brexit, giving in to demands from lawmakers seeking greater scrutiny. her government will publish a white paper to allow parliamentary debate on the strategy sheet outlines next week. shares in a smartphone messaging at are rising after quarterly offits and sales fell short estimates. while ad revenues rose, it was not enough to make up for declines. it was well below the $47 million average of analysts surveyed by bloomberg.
and toshiba's recovery plan may include dramatic changes at its nuclear operation. reactorithdraw from design and construction. global news, 24 hours a day, powered by more than 2600 journalists and analysts. i'm courtney collins. yvonne: thank you. profits news today of warnings from two of china's largest enterprises. largest insurer says profits may have been cut in half every let's talk about the oil sector. we got this morning from back in october, but how ugly could it youquestion mark stephen:
have seen oil giants cut back on production and capex. raised capex for the first time this year. i will get to the outlook for this year later, but let's first concentrate on 2016. we did get this warning overnight from petrochina. the largest oil and gas company in china. perhaps we do have a bar chart. we can see how this compares to years past. wyatt is a significant drop. the slump that you did to what they call lower prices and natural gas prices. $54 in 2015. going forward, it is looking better. strong recovery in
earnings this year. we were at the goldman sachs conference and their chief commodities economist talked about $60 a barrel as where we are going to top out. that would spell better prospects. julie: we also got earnings from the mainland's biggest life insurer. >> as petrochina stock profits track oil's price, the same could be said for the insurers invest heavily in the stock market. you can track the stock price and profits to the shanghai composite index. we do have that comparison. they almost your each other as the composite index in the first nine months, down about 15%. in the fourth quarter, up. similar picture as we have seen at china life.
60%.t income fell in the third quarter, we saw a 33% rise. we are warning profit may have fallen as much as 50%. between 40-50%. it depends on how the stock market is going to go in 2017. ill their prospects w fair going forward. julie: trump the gas man. his policies are like fuel to the fire. yvonne: corporate earnings drive the dow to new heights. ♪
latest headlines. the stock exchange in india has filed a draft ipo for an offering expected to top $1.5 billion. that would be india's biggest listing in six years. largestouth korea's steel maker has reported a significant jump in profits. industry haseel been rebounding after stimulus measures in china helped boost exports. posco's shares have -- yvonne: the biggest casino maker missed estimates. of vegas sands had a profit $.62 a share in the fourth
quarter. -- luckyess because gamblers kept winning, causing $20 million in lost profit. the dow rose to a record after the latest round of corporate earnings. i was looking at the numbers. the company that helped it today was around number three. boeing is what i am talking about. u: boeing was in the cross hairs, but came away with a all-time high. what is interesting about this chart, you see how long it took to get there. you crossed 10,000 in 1999. the take away from -- for investors is the dow has broken
out of its range. we go into the charts and take a look at boeing itself. a five-day chart shows a five-day chart shows the size of the jump we saw today. comingto do with boeing away with a blow away outlook. jet finallyer delivering. is aeo saying it rainmaker. they see an increase in jet delivery. listen to how strong the ceo sees the future. >> within the updated plan, delivery slots are nearly sold out for the triple seven. phasing in production, we are approximately 90% sold out for both years. where, as a reminder, we will be pervering at a rate of 3.5 month. su: the 777 turned out to be a
winner for the company. let's talk about after-hours reports, particularly qualcomm and att. su: let's talk about qualcomm. it erased that gain. welcomes said sales and profits for the current quarter could miss. wall street not liking that forecast. then there is the apple lawsuit. which the ceo had some harsh words for, saying apple has taken a regrettable path. a tough road ahead. let's take a look at at&t. as investors digested the news,
it met the profit productions -- projections. it is predicting in line growth. talk about the merger with time warner. breaking news. i guess we should do a quick check of line shares. 13.5% this morning. this is after the quarterly profit and sales fell short of estimates. rose during the time, but it was not enough to make up for losses. the $47 million average of analysts surveyed. a big miss there. falling 13%. up next, the dow climbs to new heights.
yvonne: this is "daybreak asia." onie: the global rally rules -- rolls on. is cautious.t joining us is steve brice. thank you for joining us. we had all three major averages hit records today. it seems as though the president is now starting to fulfill a lot of his campaign promises. what are you looking for in terms of additional clarity from him?
>> what we have seen since the election is a sharp rally, over 7%. this movement we are seeing. theou think about it, over last five or six years, we have been in a muddled environment. we are transitioning to a more positive outcome where we are less worried about deflationary pressures. we have to a significant extent already. thequestion is, will we see policies coming through that will validate that? stock market, the it does increase momentum. are positive fundamentals. it is not going to be a smooth path. riskrade talks are also a
to sentiment generally. still constructive on equities. we have come a long way in a short time. there is a norm us complacency by some measures when it comes to u.s. equity. the fix.look at that is in blue, versus the index. and fx volatility. what does that disconnect say to you? i guess it is saying stock investors should be more worried than they seem to be.
>> it does suggest some sort of complacency. that is not matched up by all the indicators out there. where we have to try and balance that off is saying, there are some concerns. we do have people sitting on the sidelines. certainly when we talked to our clients, the number one question , should weup is really by the u.s. market? it is at record highs. the responses, yes but markets records.ake new as long as we get the earnings growth coming through, and onion season looks good so far, over the longer term insurance the market as well. yvonne: should we keep buying the dollar? we have not seen the
momentum as of late. people say, you continue to buy the dollar because of these yield differentials. the spread of the u.s. bond -- strengthening. reached the top? >> i don't think we have seen the top. major dollar bulls. seen a strongy dollar rally over the last two years. to 1970, the third largest rally. that doesn't mean we can't go higher but we have done a lot of it already. if you play the reflationary story out, for now, everyone is .ocused on continued qe ultimately, as we get to the end
8:30 and zynga more. half an hour away from the opening of trading. also having to watch the property stocks. with the property come back in the lion city, that is the best way to play the rebound. let's get to the first word news with courtney collins. courtney: president trump has signed orders on two of his most controversial promises. building a border wall with mexico and tightening restrictions on immigration. he said construction could begin within months. the second order targets
sanctuary cities that refused to allow police to enforce federal immigration law. boeing climbed to a record as from87 dreamliner emerged a decade -- that offset predictions of declining sales 777s.ing produces fewer investors liked the news. and we will be discussing the state of aviation later with a qantas ceo. that is coming up at 9:30 hong kong time. -- wednesdayy evening in new york. officials held peace talks with communist rebels, despite fears of a legend human rights violations.
rebel negotiators agreed to the talks, but claimed of the army was still carrying out attacks. fighting has killed about 40,000 people over five decades. ad thailand is preparing digital payment scheme, with smaller fees charged by banks. yet lenders expect to benefit. the bankers association expects savings of more than $2 billion over the next decade. that would far exceed the revenue loss. 30 million transactions are expected this year. global news, 24 hours a day, journalists and analysts. time to look at how the asian markets are shaping up.
reporter: we are focusing on new oul.and, tokyo, and se new zealand stocks up. financial and i.t. stocks leading gains. almost 5%.ron, up rising to the highest level in at least a year. this company makes industrial electronic products. on the japanese front, we are keeping an eye on what is going on with the caught a -- takata. this as the korean currency is riding\/\/ -- rising. we are seeing the tumbled following since it listing in
july, 2016. the fourth quarter profit missed estimates and they did not announce a dividend as expected. provide targets. been -- japan display rising for the second day. they announcedhey will be producing flexible lcd panels. and samsung, gains of over 2%. keepe: brexit wheels spinning for the u.k. prime minister as she heads to washington. she is the first foreign leader to meet with the president, donald trump. what can she achieve? hoping toshe is secure a secure trade deal with
the u.s. she is facing brexit, tougher tariffs in a new deal with the europe in union. -- european union. something that will encourage companies to look for other markets. this is definitely a place where they want to be. like donald trump, theresa may says she wants to put the u.k. first. here is what she told parliament. improved trade between our two countries that will bring prosperity. it will ensure we can bring jobs to this country as well. i can ensure the right honorable gentleman we will put u.k. values first. let's get to the bloomberg chart to look at how important these parts of the world are two u.k. trade. the u.k. relies on
the european union for 50% of its trade. germany comes in at around 12%. u.s. at 11%. you can see how this is an important market for theresa may, to help secure, as she faces this brexit. interestingly to see as she gets ready for this visit, she will speak to lawmakers in in philadelphia. saying, reagane and thatcher. may and trump. isknow the trunk team interested to get this in place quickly. certainly some complications here. recent may not wasting any time, neither is donald trump. yvonne: he already said he was willing to have an early trade deal with the u.k., which is different to what obama is saying.
it is not going to stop the brexit, for sure, but it may slow it down. she has agreed to publish a white paper laying out exactly what she is going to do. now her team is saying they are going to put out their new brexit bill, the one parliament has to approve so the government can move ahead. they will get that short bill out. to chief negotiator saying, we are not going to let the u.k. exit and be better off. they'reutomakers, association, also saying they have concerns about a hard brexit. if they are going to lose a big market, not lose it but have terrorist put on people, that could hurt their sales and that is important any german economy. julie: deutsche bank says the
drop we have seen in the pound, that could be a more permanent situation for the currency? kathleen: interesting because we have seen so much volatility. the pound goes down. hard brexit iss going ahead and the pound rallies. 5%e pound is down about 1 from the brexit vote. it had such a big drop. it has definitely come back but is lower than it was. the point deutsche bank seems to be making, are you going to be as confident in the pound and now? government reserves down. this is a question longer-term. as ag your status reserve currency could have an impact on willingness to invest. it is something investors are watching closely. hays, thanks so
much. in the meantime, we are in the thick of earnings season. david hays looking at names in south korea. with alet's get started major supplier of apple. that is primarily why this maker, 1.5 trillion yuan. sales up 20% giving you have a lot of demand for chips. saying everything has been good for this company. business conditions, currency movements, so on. essentially, you have a perfect storm in a good way for this company. the stocks shot through the roof. you look at the performance of nix.i time next -- sky hy
within the top 40. 10% more pop in the share price according to analysts. we are talking about suppliers of apple, og display. -- lg display. there is a report it is now excluded. supplier fore a the iphone. according to reports, the company failed to make timely investments in small to medium-sized displays for smartphones. display.for lg good news for hynix. yvonne: numbers from the big carmakers, hyundai one of them, talking about trade
protectionism. are reallynumbers bad. there is no other way to put it. hyundai, 30% drop in profits. you look at the guidance from the company. forecast.eeping their that being said, they are watching any sort of changes in policy from president trump. a lot of the earnings we have seen out of south korea were helped along by the weak currency. is concerned,dai the u.s. is the second biggest market. it is the kind of market where you have to spend a lot of money for sales. when you have a stronger dollar, they have really inflated their have aich is why they big drop in profits. china, the biggest market, sales were ok. they are coming up with a warning and saying demand might actually all in their biggest
books.varro's a little tillerson, too. are all doing is they are saying china has gotten the 8-10r of us and maybe last years. i tend to agree. what is important about that, developing the lens of the white house is going to be looking at china through is important as an investor. that is my view. somewhere between free trade and 45% tariffs is where we are going to end up. with that comes profound consequences. and of those our economics some of those are geopolitical. >> what about the counter arguments, which you have heard over and over again?
deflation is less of a threat. corporate profits are improving in china and deposits keep growing. >> they have a different funding base than other countries, largely domestically. we believe in the omnipotence of the chinese coming as party. -- communist party. this deposit growth is an interesting one. credit in china has grown $6.5 trillion. it has grown about $6.5 trillion. deposits have grown three. credit is growing at financially. they are basically having to fund in or miss moves in credit growth. we call it running to stand still. that is where the banking system is today. think about the emergency injections they have had in the last two weeks. to be a global
reserve currency and there are many people that already count it as one. how many global reserve ies have you seen raising rates 120% to stop outflows? there is a business and everyone's believes -- believes that china is the power they think they are. look, i believe. i'm not going to talk about specific positioning but i will answer another way. the ultimate arbiter of my argument versus anyone else's is the currency. if i am right about the banking system, they are going to have to recap the banking system. if they do come of the currency will be worth less. isorter: the reason i ask also to understand whether there are collateral trades to be made. like the hong kong dollar, p
egged to the u.s. dollar. >> i don't know how many countries are recognized by the yuan today. i think it is 190 plus. let's say it is 200 countries. have their top trading partner as china. you look at their relationships, pegged relationships or floating relationships, those constituencies are worth investigating. when you look at china's leaders partners are and what affects will be imposed on their partners, then you high-grade those. the answer is yes. there is primary damages. there are secondary and tertiary. those are things we have spent many years taking about. the asia-pacific region is going
to have a proverbial race to the bottom because it is the only way it is going to happen. that has locations for equity markets. reporter: is it safe to say you are shorting those currencies? that is safe to say asia theater is where we have been focused and we have done a lot of analysis. yvonne: that was kyle bass. vietnam has depended on u.s. consumers for years. now, they look closer to home for export donations. with president trump withdrawing from the tpp, other economies seeking alternative arrangements. their butnot just aussie further afield. vietnam was supposed to be the biggest beneficiary of the tpp. but it isnow gone,
not indulging in self-pity. it is moving ahead. thanam more active other countries diversifying. i want to show you this chart. it shows how the u.s. has been vietnam's largest export market. exports doubled in the past five years to 39 billion u.s. dollars. potentialso shows areas to grow in asian markets. particularly asean. that can be boosted. it will help compensate for the u.s.. yvonne: -- vietnam is one of only a few countries in asia where exports are still growing but is that sustainable? haslinda: there is optimism vietnam's exports will continue
to grow. let's look at this chart quickly. the pie chart shows mobile fores, shoes, accounting the bulk of exports. vietnam has 16 agreements, nine in effect. in short, yes. in, thank you.a am how china is leading the way in mobile payments how mainland firms are poised to take a little cash global. -- digital cash global. ♪
this is "daybreak asia." yeare: the lunar new tradition of handing out red envelopes of cash has moved to the 21st century. it has migrated to the smartphone. it highlights the sophistication mobile payment firms. here is tom mackenzie. tom: the chinese new year is a boon for the mobile payment company. thanks in large part to the digitization of this tradition. than one billion
transactions expected as people fire off virtual red envelope cash gifts. valued at $32 million in 2012, the market was worth $1.8 trillion last year. their apps allow you to do everything from buying a latte to taking out a personal loan. it is about getting an edge. we have seenyears, many players emerging in the mobile payments markets including commercial banks. the competition here is so fierce, it is almost brutal. cole and with more chinese embracing mobile payments, alley wepay have
dominated. once people tonk register their deposits at state owned banks. they are also developing a currency that can be used in online transactions. let's we follow all the regulatory guidelines. readjust ours, models to reflect what the regulations require. banks are feeling the pain. disruption is not stopping at china's borders. one company is trying to -- they invested in an indian
company. >> we look very closely at the u.s., europe. have a global perspective and global ambitions. we will roll that out as we determine the right partners. 's mobile payment partners are on a roll. tom mackenzie. yvonne: very cool. let's look at what is coming up in the next two hours. , i look forward to my digital read packet from you. rishaad: it is a shame. i have the real thing. the dow, 20,000. putting on some still are gains. powering it above the psychologically important 19,000
level. in 35 minutes, we are talking to the chief executive of qantas. then we are looking at las vegas. -- las vegas sands. a lot of gamblers have been winning. one particular woman has been walking into macau resorts and letting it fly. she kept on winning and took out a significant chunk. lucky woman. i guess the house doesn't always win in this particular case. plenty more still to come. bloomberg markets asia is next. we are counting down until the market opens in asia. china industrial production, coming up next. this is bloomberg. ♪
rishaad: 9 a.m. in singapore and midday in sydney. 8:00 in the evening on wednesday new york city. i'm rishaad lummis in hong kong. this is "bloomberg markets asia ." salamis.shaad markets in the asia-pacific extending the global rally. the dow totalling 20,000 for the first time ever. 0%trochina, net income fell 8 last