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tv   Bloomberg Daybreak Asia  Bloomberg  August 21, 2019 7:00pm-9:00pm EDT

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paul: i'm paul allen in sydney and we are an hour away from the market open in sydney. >> i'm shery ahn. sophie: and i'm sophie kamaruddin hong kong. welcome to daybreak: asia. paul: jackson hole awaits jay powell speech. observers came to learn about the fed's rate policy and where the economy is heading. toughent trump talks
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saying america is winning the trade with china but the u.s. deficit is set to balloon to $1 trillion. hong kong protesters mark one month since gang attacks on the subway. wantswants -- beijing companies to toe the line. shery: let's get a quick check of the market close in the u.s. stocks are higher but after paring back some of those earlier gains, every sector in the s&p 500 was in the green. we had consumer discretionary and tech leading the way. not to mention we had numbers out of retailers like lowe's. we also had them from target. that helped with investor confidence. we had home depot showing signs that the second half would be strong. we had seen that rally. this is adding to the sentiment. at the same time, we have the fomc minutes. after that, the two-year treasury yield rallying. and we have eight the yield
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curve -- and we have the yield curve inverting. s&p active futures up .2%. let's see how we set up in asia. sophie: asian stocks brushing off the midweek fumble. qantas and calls this morning reporting lower profit. in the bond space, u.s. treasury futures are extending declines that were sparked by the fed minutes and also by trade lines. let's check in on the risk assets. a little change among gold, looking fatigued. and check out iron ore futures in singapore, recovering just a touch after a three-day tumble $80.brought them below iron ore miners in sydney this morning. paul: thanks, sophie. let's check in on first word news.
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budget deficit is growing faster than expected and to congressional budget office as president trump trade war is a key drag on the academy -- on the economy. this is the year ending september 30. in january, the budget office forecast 980 billion dollars next year and did not see a topping $1 trillion until 2022. china is one in global business to toe the line on hong kong as protesters marked one month were violently attacked by gangs in the subway station. demonstrators set off fireworks to measures and staged a sit in in were violently attacked by protest of police fo arrive at the scene at the time of the attack or to prosecute anyone for the violence since. there was also a protest to --and britain step up
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beijing has confirmed a consulate employee had been given 15 days detention in the neighboring shenzhen for violating local regulations. stoking fears in hong kong that beijing is extending the judicial reach across the border. china is threatening retaliation against u.s. companies following washington's approval of sales to taiwan. the $8 billion deal for the f-16 marks a shift in u.s. policy that beijing warned against before it was given the go-ahead. china says they will take all necessary measures in response including sanctions on american companies involved in the deal. president trump says he canceled a trip to copenhagen because the danish prime minister made a nasty remark. he said the apparent wish to buy greenland was absurd and hopes it was a joke. trump said the comments were nasty and sarcastic and that no one should talk to the united states in that way under his administration.
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global news 24 hours a day on-air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: thank you. more on the market reaction to the fed minutes. stocks are treated from highs on the day and yields on the two-year bond surged. ,u keenan joins us with more and the yield briefly inverting again. : it can be a signal for recession. however, the fact that we saw retailers really beat expectations giving a shot in the arm and the volatility index falling to a three-week low was a sigh of relief for the market. consumer discretionary's strong in this area. let's go to the bloomberg qqq, the etf that mirrors the nasdaq. you can find a library of charts here. notes that we start to see outflows from tech since march.
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and take a look at the big movers. retail coming on strong as a momentum play? look at target. the upside 20%. a record high after beating walmarts results with its own strong quarter. and this has to do with the resilient discounter. also came in strong, the gross margin beating estimates. nordstrom a previously troubled department store also shrugging off expectations. boeing is also coming in strong, setting up for a strong thursday in the market. in the meantime, we saw oil futures falling on a big jump. gold retreating as well after the fed minutes. what are traders saying about this? was a big surprise in the inventory data. check of the five-day chart and you see prices fall a bit.
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there was an expectation that we would see bullish statistics. there was a surprise told up. that put the spotlight on demand. look at the year-to-date, that has been bringing oil prices down some 16% since the april high. gold slipped after the fed minutes after hours. if you look at the etf of gold, it continues to fly higher with investors piling in. it increases holdings which in and of itself is bullish. said unity appears to be fraying. minutes for the july meeting show policymakers view the 25 basis point cut as an insurance move. but they argued if there were lower rates. as president trump
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continues to slam the fed. trump: the fed miss the call. they raise it too fast and too high. they did quantitative tightening and they shouldn't have raised that. we should have had some raises, but nothing like they did. paul: mike mckee is in wyoming. do we expect any signal from powell when he speaks on friday? mike: we are expecting a bit of a signal. the problem for powell is the markets are expecting a signal and if he doesn't give them any kind of green light to continue their belief in a september rate cut, you may see a backup that the administration and the fed doesn't want. we don't expect jay powell to say something along the lines of midcourse correction or insurance policy, although he may want to keep his options open. the data are still fairly strong. course, this
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year's conference theme is called challenges for monetary policy. this is a pretty appropriate topic, isn't it? mike: sometimes you are lucky and sometimes you are good. the kansas city fed may have gotten a bit of both. the challenges really reflect the idea that the senate and other central banks at this point in time need to learn how to do policy when we go into recession and interest rates are extremely low. cut 500 to be able to basis points but nobody has that kind of room anymore. how do you use communication? how do you use quantitative easing? are there other strategies that would work? that is the main theme even if a rate cut is what everybody walks in here thinking about. shery: and we have the fomc minutes from the july meeting this afternoon that really sent some ripple through the bond markets. would you take away from it? appears to ratify what
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they did and suggest if they want to do it again in september, the conditions they were talking about, the uncertainty over trade issues, that remains cautious about spending. we don't know how they will react. we see the consumer side of the ledger come strong. jobs and retail spending has been strong. if that continues and if inflation picks up a bit, do they want to deposit in september -- to pause in september and wait to see if something more is needed? that is the possibility. possibility. we will know more when jay powell speaks on friday. shery: thank you, mike mckee, joining us from jackson hole. theconomy buckling under pressure of street protests, stocks are on track to post the worst quarter since 2015. paul: up next, longer-term treasuries and little change.
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the focus remains on the bond market. next.l hear from jpmorgan this is bloomberg. ♪
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paul: this is daybreak asia. shery: let's head to hong kong for what to watch and markets. sophie: there are signs the global bond rally might be stalling. struggling to find buyers for the debt offering a 0% coupon. the average yield came in and this could be an ominous sign for cash bond. the jury is still out about if the signal is the turning point in a rally for long end rates,
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given expectations for growth as well as for inflation. ,ollowing the failed option technically, it was that. investors can buy the future and not participate. joining us, let's get more on the bond and fx markets as work with executive director of macro sales. thank you for joining us. you heard sophie talking about what could be described as a failed option. i want to bring this chart on the bloomberg terminal. the picture is worth a thousand words. the u.k., and the u.s. grinding ever lower. we are approaching a turning point. it is coming to an end? there are factors in the past week that could suggest just that.
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the jpmorgan strategist has done a lot of work around that and there are causes whether it was a real lack of market liquidity. what we are seeing now is this role of fiscal stimulus. the u.s. also considering longer-term issuance. bond curves are having to start to think of that again in terms of supply and in terms of the governments coming to the party. the central banks have done so much up until now. paul: the key thing in the immediate future is jackson hole and when jay powell says. is there anything in the rhetoric that might change things? laura: for us, it's difficult. the fed minutes felt stale 24 hours after the fed meeting given the new tariff round announced the next day. it was difficult to try to glean too much out of the minutes released.
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to jackson hole, we expect there will be a bit more of a dovish tinge coming through. with complete be understandable when you consider what has happened. we are still -- which is completely understandable when you consider what has happened. markets are still undecided about if this is just insurance cuts or if more night -- more might need to be delivered. the markets therefore have to be as well. what is interesting, looking at the lineup of jackson hole, mario draghi won't be appearing. that is one dovish character missing from the agenda. shery: we expect the easing's to be factored into the market. and we continue to see the expectations. the problem is we're going to see cuts in each of the next two meetings because potentially,
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the fed may want to keep bond markets calm. how important will this be? there is difficulty in the fed trying to keep bond markets coming. there is a lot baked in to the price at the moment and i think there is always the risk for disappointment. and chairman powell, most of this is on the board. at the stage, it is more likely to look at data. surprising them, it is better than the u.s. standing out from that perspective globally. ask, think it is a lot to delivering so much more easing at this juncture. i think they do have a little bit more time on that side given the domestic it up.
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shery: we are seeing a considerable slowdown and we see retailers looking pretty healthy. how would you trade this in fx? laura: it has been difficult because the dollar has strengthened substantially this year. it still seems to be a case of u.s. exceptionalism is warranted. bulls are athe this stage where do they add to their positions? the short euro around the u.s. dollar is clearly one where more can play out from the see side and we wait to what the ecb can deliver on the rate cut front. i think that is where a lot of the focus is shifting. extent, thean economists are expecting an easy there. it is a more difficult central bank to predict at this point. or have they started to make the
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right noises? i think they are probably the cleanest place. the dollar will continue to perform well against most of the currencies. and we can see them and emerging-market currencies. the dollar will continue to perform wellpaul: one exceptione dollar has been the yen. is there for the room to strengthen because we are hearing rumors there for a while? it has pulled back of it. there was talk around that at the moment and i noticed the fx strategist noticed that we had been a short aussie. take a look at the short aussie against the u.s. dollar. they feel that probably the most extreme risk aversion to market has probably past now. we may get something more dovish from the bank said jackson hole this weekend.
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this has been no exception this august. can it go any lower? laura: i think it can go lower. people are watching very closely what boris johnson can do from here. when we look at how far it has andn may in many years still a conclusion, this is where the pressure will mount. jpmorgan economists think it is a better chance than 50-50. it is a downside for the pound if it becomes close to reality. shery: we continue to see unrest kong pressuring the economy there. what is your outlook as we see
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libor rates rising as well gekko -- as well? area: kong it is something we all watching in this region. capital outflows have not really come to the fore. at this stage, it is something investors are watching. we are aware that people are positioned for some extreme outcomes in this regard. most people are watching and making sure it all plays into the broader narrative around the trade war, particularly if the u.s. becomes more vocal. we have seen some comments. at this stage, most investors are hoping that it doesn't deteriorate. to see some developments in the right direction. at least it doesn't become another pond in the trade war which could escalate things further? shery: thank you, laura fitzsimmons. and we will hear from esther george later on thursday. don't miss her comments ahead of jackson hole. get a roundup of the stories you need to know to get your day going in today's edition of daybreak.
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boom berg subscribers go to tv on your terminals. also available on mobile in the bloomberg app. customize the settings so you only get the news that you care about. this is bloomberg. ♪
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paul: this is daybreak asia. i'm paul allen in sydney. shery: i'm shery ahn in new york area do president trump is talking tough on trade after recent signs of progress with china. he repeatedly claims the u.s. is winning the trade war with a wide range of remarks. chosennt trump: i am the one. somebody had to do it. i'm taking on china. i'm taking on china on trade. and you know what, we are winning? shery: sarah mcgregor is in los angeles. with president trump now saying that he is the chosen one to wage this trade war against
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china, what are the hopes of a fast solution to the trade war? sarah: i guess the point the president was trying to make before was that previous administrations had failed to deal of china properly. a bipartisant cross-section of lawmakers, you might see some agreement there. they were really behind trump getting tough on china and addressing issues like accused ip theft and state reforms. industries the u.s. wants to compete with our subsidized in china. context those comments, his you would be that he is doing what previous administrations have failed to do. the question, what prospects are there of a deal? we are no closer. the two sides are speaking. whenime between now and they are scheduled to meet in early september, there might be a bit more of a path forward.
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the chosen one said the always easy to win. bringing the u.s. economy into deficit expecting to widen to $1 trillion by 2020, deficits don't matter. sarah: it is supposed to have a 30,000 foot view of what is happening. today, they released a report that spoke about the tariffs and how it is weighing on economic growth. lower bywould be 0.3% gdp because of the trade war. it will cost average real income for americans about $580 out of their pocket. again, this puts into perspective some of the costs of the trade war. donald trump and his administration have emphasized china is paying the cost of the tariffs. time and again, that weighs on
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the u.s. economy. paul: sarah mcgregor, thank you net income was 4% above average. that is about $170 million u.s. for a newes searching ceo after christopher alexa and announced he will depart at the end of september. the financial officer will step in until a replacement is found. shery: jpmorgan is closing the chase pay app. customers have been told they won't be able to use the app to pay through smartphones early next year. chased pay will still be available on their website for retailers that except it. the app was launched four years ago to compete in the growing instant payment sector. paul: still to come, clouds are darkening the outlook for hong
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kong. months of unrest are not helping. we have more on that story coming up in a moment. stay with us. this is bloomberg. ♪
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>> this is "daybreak asia." here are the headlines. u.k. and germany say that i favor a negotiate brexit but cannot say how that will happen. though adopted optimist, talks, both repeating their wish for amy amicable split. they have talks with ma cron in paris. minutes from the last fed meeting, policy makesers vaud their rate cut as insurance against weak inflains. and a slump in business
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investment triggered by the trade war. they wanted to counter the effects of uncertainty and slowing global growth. it was the first fed rate cut since 2018, but president trump says it is not enough and is calling for a bigger cut. >> the federal reserve has let us down. they missed the call. they raised them too forecast, raised it too high, and they did quantitative tightening. they shouldn't have done the tightening or raised them to extent. we could have had some raises, but nothing like they did. >> the unrest in hong kong is set to inflict more damage on the economy. the royal institute extent. we of surveyors say rents on hong kong island will fall 2% next year, a complete reversal from the 3% gain seen in a previous report just as the protests began in june. office vacancy rates in central hit a three-year high last month. president trump is lashing out at automakers who are pushing
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back at his plan to weaken fuel efficiency prices. he added there would be it is impact on environment and dismisseded his critics as foolish and politically incorrect. he wants to pull back on efficiency regulations introduced under president obama. the singapore prime minister has one online support over his salary from his wife. he earned $1.6 million u.s. according to the government's website, and he has faced local criticism amid the widening income gap. his wife took to facebook pointing out that other leaders enjoy many more perkins thanly, including butlers, hairdressers and flights on airlines. adlines on books, powered by
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analyst from more than to country. >> we are a half hour away from the open in tokyo and sydney. here is more for what to watch. >> i want to highlight this trend we are observing ayoob the i.p.o. function on the termial. we can see how japanese share shares have slowed. eight-year lee as japanese public offerings this year have raised just $1.6 billion, down 56% on a yearly basis. so japanese firms continue to sit on a growing cash pile as he economy is slowing. a record $4.5 trillion in tissue . that is a 40% increase from three years ago. shery: thank you for that. more dire prediction fog the hong kong economy amid a new stand off between protestors and police. our chief north asia correspondent is in hong kong. hong kong stocks are about to
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see their worst quarter since 2015. what are the expectations for the economy in hong kong now? >> we have been reporting this for several weeks now, how there are dire predictions for the economy, not just because of the protests, but balls of the trade war and the weakening yuan to the dollar. we are going to the g.d.p. i want to give you an update. they want to know have the protests resumed. the short answer is yes, but to a lesser degree. there was a stand-off between police and protesters late last night at a rural area of hong kong where we had that try lent stand-off between blackshired protesters and white-shirted dare i say what protestors call thugs who were allegedly hired and who allegedly had ties to gang members.
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they had that violent clash on july 21. today protestors came to commemorate that clash and protest the lack of criminal charges being filed against any of those whit-shirted trouble makers is what the protesters have called them. iot police last night did do a dispersal operation, hindered that the protestors had taken fire extinguishers and splade foam on the floor and make some of the footing for police dangerous and slippery. it ended fairly piece full. a tense calm these days in hong kong this morning. let's talk about the economy. that is obviously affecting many people here where we are in the central part of hong kong. analysts are patricking now an average for a 19% slump in operating profits for this full year in 2019 for hang seng
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listed companies. that would be the biggest contraction since the global fiscal terrorize in 2018. there is the trade war, the aker yawn, all hindering profits. jackson wong says potential down side surprises have not been fully reflected in share prices. the latest company to issue a warning, stock code three hong kong. one of the few single digit stocks here in hong kong. it is a utility. stocks fall as much as 5.% wednesday, most since 2019. they said the local business environment is full of challenges. another log company that has been facing many head wind is cafe pacific. they were out with that of samir passenger numbers. they will expect significance imimpact from revenue from august on ward. the previous months oftentimes
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are affected by previous bookings. but now forward bookings are already dipping by dow jones industrials. so from august on wards they are seeing significance pressure. also, business and leisure travel into hong kong has weakened substantially. they filled 86.1% of seats in july, but forward bookings have fallen by dow jones industrials. that is where the concern is. these picks went around the world of protesters at the hong kong airport. traffic from hong kong starting to soften. paul: cathay was an interesting case study. china warning you toe the party line on hong kong. is that the biggest thing? paul: it seems as though that is the new reality. if you want to do significance business in china, this is how you have to play by the rules. we are getting word, not necessarily confirmed by a
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number of companies, but from employee letters that have been sent to their workers from the likes of kpmg, price-waterhouse, cooperstown and others. this is in the latest story this morning. you can see it on the terminal. as issued directive to employees, don't speak to the public. p.w.c. sent a similar message, to avoid disclosing anything about the company on social media. new marching order. cathay pacific is a prime example of how this came back to bite them. the chairman was quoted as saying before all this happened that he wouldn't imagine thinking telling his employees how to think, restrictions on freedom of speech. clearly now that the c.e.o. has been let go, merlin, the chairman of swire pacific was
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summoned to bengal for what i am sure was knuckle rapping, kathay leena -- and pacific put out the directive that they support the hong kong government and they are going to hand over the information of the flight plan fests, the crew manifests to china because china basically says they don't want any employees on cathay pacific flights, pilots or flight crew who supported the protests in any way, flying through chinese air space so perhaps a new reality for hong kong based companies and global companies as well that want to do business in china. shery: what is the risk of this back firing on bengal as they continue to apply pressure on these multi-national companies? >> that is the big question. it is the risk/reward situation that every company has to decide. cathay pacific gets half their
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revenue from hong kong and china flights. many of the flights if not all the flights to europe fly through china air space. did they have a choice? some would say they didn't have a choice. it is a cautionary tale for just about any company that walms to do business in china which is it not separate affairs of the state with affairs of business. i am sure it is being discussed in just about every board room in this city, it not cities around the world. paul: all right, stephen. we had a inlou out of qantas saying demand for hong kong flights has fallen up to 10%. stephen in hong kong, our chief north asia correspondent. thank you for joining us. coming up next, we have more central bank action. we are going to look ahead to indonesia's decisions and a potential easing at the fed. this is bloomberg.
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shery: this is "daybreak asia." i am shery ahn in new york. aul: and i am paul finebaum -- paul allen. our asia stocks editor joins us from hong kong. asian markets are set for gains later, but trading volume has been muted ahead of powell's friday speech. >> the futures are pointing at a higher open with futures in japan and australia advancing, but trading volume indeed will remain low eddie of powell's speech at jackson hole. if you look at the fed minutes, it showed a very divergent set of views from policy makers, incheweding a couple of policy makers asking or voting for a
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50 pays point rate cuts. that would make the separate decision very interesting for the fed and investors as well. we are looking at lower volume because a lot of investors that we spoke to have very low conviction for a rally in asia marks because of all the uncertain still lingering globally i would say with no resolution in sight. a few big events we are watching out for today is bank of indonesia's raid decision and flash p.m.i. for eurozone, which would provide some clue for a glolet slow down. >> what is the expectations for bank of indonesia and what should investors should be watching out for? >> the con sense is is to hold rates steady today. but there is a substantial minority that is expecting for a 25 basis point cut.
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if that happens, that would be a surprise dovish move following a bunch of dovish moves from central pangs in the last can youle of weeks, including thailand, new zealand and india. the problem for indonesia though is the previous rate which happened last monday didn't really work according to analysts. that is because factories there and consumers are not really spending the money because they are risk averse right now. they want to hoard cash. one thing market participants are watching out for again from the speep today is the potential adjustments to banks required reserve ratio. bank of indonesia adjusted that ratio lower in june to boost the economy. ut again it seems the actual liquidity released to the economy actually flowed back to the government. they used it to buy government
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bonds. people there and institutions there are very risk averse. so yes, bank indonesia has a lot of room to cut rates because right now it is at peop and 5.75%. but whether the rate cuts will have any impact on the economy is something that vfrls are worried about. >> thank you if that. shery: or asia stocks editor there. we bring in the head of independent aian and southeast asia economics. great to have you with us. let's talk about bank indonesia first. even if the bank wanted to cut to support growth, could they actually do it, looking pretty vulnerable to the ongoing trade tensions? >> i think that is a very valid the on and that is why community at this time is kind of split on whether to take a rate cut or not.
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we have seen other banks front load their rate cut. if anything, the trade situation could only worsen from here, exerting more weakening pressure on asian currencies, including indonesia than at rupee. they may as well front load whatever easing it is planning to go ahead with. that is why we are looking for one rate cut today. shery: let's talk about indonesia economy. we are now seeing some month data that show signs of moderating domestic demand. how is it looking out there right now? >> yes, that is a bit of concern. so far domestic demand has been the pillar of strength for the indonesian economy. although they are quite exposed to china in terms of the final demand from canine for their exports, it has been one of the rare stable suppose in the asian regional space.
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so we are looking and monitoring the situation pretty chosely. they have space. transmission is an issue, but they are looking to tackle that hand-on. and they also have a fiscal space. i think a party push on both friend to ensure that domestic demand continues to play its role in supporting the economy. paul: that is a common complaint from central banks around the world. come on, let's have a bit of fiscal stimulus as well. the president delivered his budget. how much pressure has he taken off the bank of indonesia? or actually the budget that came -- >> actually the budget that came through, it did not deviate. think that is a bit ambitious . they did have an up side
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surprise from tax revenues from last year, but to bank on that aying out and the fiscal layering is a bit of a ask for me. we look for slight fiscal slippage, the deficit staying around the 2% mark. this would still be well with the 3% ceiling that indonesia works with. in the current environment this should use the space. paul: well, the indonesian economy is expected to grow 5.3% next year. we talk about the low bond yields. it is at almost 7.5%. it is the most attractive e.m. right now? >> i think that is a double edged sword. watched.o the most it depends on what is the broader sendment out there in terms of risk on and risk off.
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in general he would say that at this point in time given how trade war issues are panning out, most investors would probably play a cautious view towards most e.m. economies in asia. they would come in when the done arises, but they would be equally willing to flee. shery: we have been talking about how strong southeast asians economies could benefit from supply chains veering away from china. what are we expecting growth to look like for the rest of the year? >> that has been quite an often asked questions, winners and losers. let me say that in my mind, in the short term there are no winners. yes, we have seen those who have bucked the trend and exports going up. but they are increasingly facing more scrutiny from the u.s. there is potential for further
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tariffs being slapped there and other asian economies. supply chain relocation is a long-term positive that economies out there like thailand, even end niece ya to some degree who could benefit from manufacturing gravitating away from china. but for the short term, we are looking for a growth slow-down for southeast asia as a whole, growth slipping both the 5% mark this year. shery: and what would be the impact of another set of trait tensions going on right now between japan and south korea. we saw the export numbers of south korea's first 20 days of august, and we saw those chip exports declining about 30% year or year already. are there any implications on the electronics cycle for southeast race ya? > yes, definitely. with all this talk of the
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u.s.-china trade war, this trade war is not getting enough attention. if you look at the in of the domestic economies, for example the philippines, a large part of its exports is didn't end on the electronic cycle. you could see an impact play out there in terms of region on. one needs to monitor the situation closer. it is as important as the bigger war going on out there, for asia at least. paul: in terms of singapore, it is quite a grim picture at the moment. 23 of 30 stocks on the s.t.i. cutting earnings. the growth forecast is at zero. recession?esee a >> they are already in a technical recession, and that is "tv guide"ly accepted. can the pain get worse? yes, the pain can get worse given its over reliance on
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trade once the additional tariffs come in on christmas and with no clarity on whether all imports from january gets taxed or not, maybe more likely than not, it is pretty likely that singapore, hong kong, the region's most open economies will bear the brunt the most. that said, i don't think it is only singapore. if you look at thailand, malaysia, et cetera, they are much more exposed. so as the trade war drags out, maybe worsens, we have to be open to the possibility that despite domestic demand being resonant, more asian economies will see downgrades. paul: that was the oxford head of industry. thank you for joining us. more ahead on "daybreak asia." this is bloorling. bloomberg.s
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paul: this is "daybreak asia." i am paul allen in sydney. shery: and i am shery ahn in new york. let's get a check of the headlines. goldman sachs trading division is planning its biggest hire spree in years with the entire effort focused on coders. the bank wants more than 100 engineers for tech recommended votes on the tech floor. and they plan to raise rivals in london. wall street is seeing a dramatic focus on deck force work flows as automation is alter the way it done. aul: wall street reports a 17% drop in full year pretax pros. the airline says it will recover next year, lifted by expansion. qantas he had said it is planning a buy back of almost 18 million shorts.
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shery: markets open at the top of the mark. here is sofi. >> futures are pointing to gains. that is looking stead around the mid point of the row sent range. this is the count down to the jackson hole conference with the jury fill out on whether powell will hint at more rate cuts. more signs of waning and tights, such as germany's lackluster sale of the first 30-year bond that pays nothing. it is earnings bonanza in australia today. as paul noted, qantas reported lower profit and demand for flights has fall enup to 10%. the flight center is monitoring the impact, and america is seeing it as a key growth driver. south third delivered a miss on estimates and has booked an impairment charge linked to sale of thermal coal assets.
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paul: thank you. 12il8 to bottom come on next hour, we will look to the mark office from -- this is bloomberg. ♪. ♪.
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at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond. paul: good morning.
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i'm pollack allen in sydney. asia's major markets are about to open from -- for trade. shery: i'm syria. >> welcome to daybreak asia. ♪ paul: our top stories this thursday. jackson hole awaits j towels -- jay powell on where the economy is heading. profit dipped below estimates. corporate demand is essentially
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flat. companiesjing warns to toe the line on hong kong if they want access to the mainland economy. let's get straight to the market action with sophie. taking a look at tokyo, green shoots for the nikkei and the topix. the yen is holding steady. trading between 106 and 107 as we count down to jackson hold on friday. the mood in korea. the cost be his opening with a change this morning. the korean yuan give up some of the gains we saw on wednesday. taking a look at the mood in the antipodes. asx 200 this morning looking flat as well. flat.n see it trading yields gaining ground. the aussie dollar is nudging higher this morning.
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67 has turned its target to from 72 on a stronger greenback. you want depreciation also seeing a factor in that formula. iron ore recovering a touch in singapore after a three-day tumble which pushed it below $80. paul: let's check in on the first word news now. >> thanks. china is warning global business to toe the line on hong kong. protesters mark one month since commuters were attacked by gangs at a subway station. demonstrators set off fire extinguishers and staged a sit failingotest of police to arrive at the scene at the time of the attack. or to prosecute anyone for the violence since. there was a protest at the u.k. consulate to demand britain steps up efforts to free a staffer detained by china. beijing confirmed the employee
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had been given 15 day detention for violatingring local regulations. it is stoking fears in hong kong that beijing is extending its judicial reach across the border. china is threatening retaliation against u.s. companies following washington's approval of arms sales to taiwan. the deal for the f-16 marks a shift in u.s. policy. beijing had warned against this. china says it will take all necessary measures in response including the imposition of sanctions on american companies involved in the deal. can't -- trump says he canceled a trip to copenhagen because the prime minister made a nasty remark. he said that president trump's wish to buy greenland was absurd. trump said her comments were nasty and sarcastic and no one should talk to the united states in that land of his administration.
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global news 24 hours a day on air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. said unity is fraying ahead of the annual gathering. meeting,rom the july policymakers view the cut as an insurance move. they argued other -- over whether to lower rates. the pressure is now on the fed to make the right move. >> we no longer have anything anchoring the markets. we no longer have the fed's ability to repression financial volatility. more progrowth policies to lift structural impediments. unfortunately, that's unlikely to materialize. that's the big concern looking forward. >> they are going to cut rates. they know it. why not get as much bang for the buck? very fast.g
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let's rip the band-aid off and move on. that would send a clear signal to the market that the fed is not going to allow a recession to occur. >> the fed has to do this. they are being pushed by the markets. the effectiveness is diminishing as rates have gone down. that is our concern. they will look to kiwi and eventually fiscal policy. it's losing its muster. shery: matt boesler covers the federal reserve and joins us. how important will it be for chair powell to affect communications here? >> that is what investors are going to be paying to close -- close attention to winds -- when he speaks. the fed just cut rates. we got minutes of that meeting today. we knew that it was a bit of a split decision going into these minutes. the minutes gave more color about how contentious the decision really was.
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there were certainly several officials who did not feel the need to me -- move. what does jay powell say? that the fedaying will act as appropriate to sustain the expansion. investors have taken that to mean a few rate cuts this year, not just one. they are starting to price in a more aggressive easing cycle. does jay powell stick to that script tamara p the same words he said in the past? does he decide to push back on those expectations a little bit? may be play up the strength in the u.s. economy that other officials are talking about. shery: this year's conference theme is called challenges for monetary policy. there will be plenty to talk about. >> that's right. obviously, this is a global conference. there will be central bankers from all over the world. the issues that monetary policymakers are facing right now are very global in nature. states, the fed is
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looking at a fairly stern u.s. economy. the risk they see is emanating from abroad. we have gotten bad data out of china and germany over the last few days. that's the question. what is the role of the fed in a global economy that is so interconnected? those are the things that central bankers will be discussing this week. paul: ahead of this meeting, we had the minutes from the last fed meeting. it laid bare the fractures among not -- policymakers. will that give us any clues? >> that's the big question. does he lean into this idea that the fed still has more easing to do this year? does he take a more balanced approach? that is the debate at the moment. you are balancing those two things. the strong domestic economy versus the global risk they see that has not worked their way.
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the focus of the conference is going to be more on those risks and the global picture. certainly, some of the fed speak we hear from these conferences in terms of sideline interviews might get into some of the more domestic focused stuff as well. we should get the full gamut here. paul: matt boesler, thank you so much for joining us. we will have big interviews with top fed officials from jackson hole. watch out for our coverage from wyoming. the front end of the u.s. rate curve is seeing movement as traders start doubting that the fed is going to cut in october. our asia mi editor is here with us for more. garfield, what are you seeing? >> there's a pullback on expectation for an october rate cut. don't forget, that means everybody is certain they will cut in september. drivingpart of what is
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a warm response from stocks. yes, there will be one in september. the fed's insurance cut comments are taken as a reiteration of what powell put. the fed is going to cut again because things are dicey. and then it will sit back and be ready to cut once more if things get worse. from a stock market point of view, that is very encouraging. bond are looking a little bit more nervous. more invested in the idea that the economy, the global economy, is going poorly enough to justify 100 basis points of cuts from the fed over the next four years. if that starts to leech off of the table, you have to think that things like 30 year treasury yields down in the area of 2% is too low. that creates a lot of dangers for bonds around the globe.
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a recoverye seeing in the shanghai composite over the last few days. what can we expect to see ahead of the china open today? >> there will be a renewed focus fix.e yuan whether that is going to continue being stable. the yen's weakness and the signal that some of the fears that let people into havens are lessening will be key. china's market is becoming a black box at the moment. it is not that clear what is moving it around. the pboc and the chinese authorities are trying various different measures to boost sentiment, to transmit monetary policy, to transmit easing. the chinese stock market is looking fragile. it bounced over the last few days off a low. now it looks like it might be topping out again.
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i think it's at a turning point. that will be a major factor in something of a data vacuum for china. as to how that drives sentiment across asian equities. shery: no data vacuum when it comes to japan or europe or the u.s.. we will get some pmi numbers. >> yes. the japanese pmi numbers in particular loom as a potential down or. -- downer. it has been a bad year. i was shocked. months inf seven contraction, the last three straight. the 12 month average is down to close to where it got to amid the mid-2016 meltdown. japan's manufacturing is definitely lagging. yen, ittively strong has been the best performer in the g10 this year. that hasn't helped.
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the global trade tensions, the china trade tensions. they haven't helped. japan spat is adding to those difficulties. japan is an enormously important economy for asia and global stocks. if it's going to go on struggling, that will raise a lot of concerns. europe also has been front and toter of when people point the damage that the trade war has done. germany's economy has been in a lot of trouble. for europe is something that the stock lookings will be forward to. the last couple days have signaled something of a turnaround in sentiment, at least potentially building. shery: thank you so much for that. asia mliv editor. you can follow more on this story and all today's trading on our market live blog. that's at mliv .
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there's also commentary and analysis from bloomberg's expert editors. find out what is affecting your investments right now. a dragup, quantum feels of weak demand and how your fuel costs. we will have more. -- higher fuel costs. we will have more. this is bloomberg. ♪
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shery: this is daybreak asia. paul: i'm paul allen in sydney. australia flag carrier qantas sees a week travel market as for your underlying profit missed estimates. our asian business reporter joins us now. let's talk about the outlook for qantas. how is that looking? >> it's a mixed picture. reported four-year profit down 70%. when you look at the various sectors around australia, the
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it ismportant market, bright and shaded. if you look at the price in the leisure market, there is weakness there. passengers flying on the budget airline jet are looking for cheap flights around australia. cheap holidays for their family. that dented demand. in the premiumt segment. also the international market demand is holding up. that is a small influence on the bottom line. it is the domestic market that is the most important factor for qantas. trying to get into the disruption business. was there any update on that? >> they have talked about this for a long time. direct the world's first marshall services between new york and sydney and london and sydney. they plan to start those by
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2022. they announced they will do some dry runs of those flights, just to see how the human body holds up. no airlines have ever done these fights before. they don't know if the airline can do it. they don't know with a passenger can hold up. will it be a pleasurable experience? it's a big unknown. they will do three dry runs in a different plane. the don't have a plan for this survey yet -- service yet. they will load a skeleton crew onto a dreamliner and simulate those roots. biometricdo lots of tests, health tests on the crew. that's an important factor. they want to know the passengers are going to have a comfortable experience. it will be close to 20 hours on the plane. it's important to know how the body is going to hold up. shery: we continue to see the unrest in hong kong. how has qantas business held up there? >> they fly to hong kong from
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all over australia. demand to hong kong has fallen by about 10%. bookings in the immediate future. that's quite a significant impact. this follows similar comments from qantas. we are seeing all the airlines around asia call out that decline in demand. people don't want to travel to hong kong without unrest. it's very unpredictable. sometimes it's peaceful, sometimes it's violent. joyce did say that typically after these events pass, whether it's an irruption of it ok no ordeal clinical -- a volcano or geopolitical trouble, it bounces back quickly. they are loading smaller aircraft on routes into hong kong to make sure they are aren't flying half-empty planes. once that demand bounces back, they switch the planes back.
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it's interesting to see that corporate fallout extend as far as australia from hong kong. shery: thank you so much for that. our asian business reporter. stick around. qantas ceo alan joyce be joining bloomberg markets china open in the next hour to discuss the results. plenty more to come. this is bloomberg. ♪
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paul: this is daybreak asia. i'm paul allen in sydney. shery: let's return to the market reaction to the fed minutes. let's look ahead to jackson hole this weekend. joining us now is ltd capital partner's asian executive director. great to see you. let's get started with jackson hole. what will you be watching out for? >> we have to be looking for
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confirmation that the fed is, as we believe, actually prepared to do more. comments last time, which were interpreted as unwilling to cut, were taken a bit too much on the hawkish side. shery: as we continue to see these uncertainties, are you positioning more defensively? if so, what do you like? >> we have positioned ourselves in a more strategic sense defensively for this entire cycle. we are in a later stage of the bull market. it has been 10 years since 2019 which is when the bull market began. that is not so much related to the trade war and all the other uncertainties ongoing now. we are keeping that defensive bias. within that context, right now,
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i would be rather positive. overweight in equities in the major markets. we are overweight in the u.s., actually. that is clearly the preferred market due to growth different cells. -- differentials. we think that market is undervalued. are within a defensive context rather positive at this moment. we do think that uncertainties will probably melt away again in due time. the policy is shifting towards a more dovish stance. that is supportive of markets. paul: in terms of that japan condition, are you one concerned about the strength of the yen? weakening yen? >> if you put a gun to my head, i would say the bank of japan would ease in due time. pressure to ease is growing on it every day.
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especially if the fed confirms its easing bias. that is the last shoe to fall before they can sit down, continue to do on their hands. they do need to ease quite significantly going forward if they want to ever meet the 2% target. that said, over the past 1.5 years, japan has been one of the very few major markets other than the u.s. that has managed to grow markets and earnings. earnings have grown even though the market is down 15-20%. this a magnitude of decline as you see in the msci emerging markets and the asia-pacific indices. they have falling but earnings have fallen. japan has been punished during this trade war episode too much by markets. that would be corrected over
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time. terms of trade, what are your expectations for these talks in september? i am assuming they are fairly low. >> [laughter] yes. they are quite low in terms of the u.s. and china reaching a deal. maybe they will be an extension of the kind of semi-truce. the bigger picture in trade, increasingly becoming a broadly is thatithin the firm, this trade war is a permanent situation. it is part of a rivalry between china that will be managed at times in a more benign way, a more cooperative way. other times, it will be more convulsion. what confirms me that the market are seeing it in a similar way is that, if you look at each convulsion of the trade war,
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since the beginning of 2018, some indices have soared. every time we had a new convulsion or escalation, the peak in that volatility has been lower than the previous one in general. i think that's a sign that the market is getting used to this kind of backdrop of a geopolitical nature and will learn to live with it as long as the economy can continue to grow. that is largely a macroeconomic policy issue rather than a -- depending on however good the relationship between china or beijing and washington is at any given time. noise will stay. unpleasant headlines will stay. the markets depend on economics. a duty capital partners asian executive director and global strategist. thank you for joining us.
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let's get a quick check of the latest business flash headlines. profit coming in at 270 million, kiwi dollars. 10 million above projections. the airline is looking for more -- new ceo. in untils due to stand a replacement is found. shery: jpmorgan is closing the chase pay act in its third reversal on digital offerings. customers have been told they won't be able to use the app to .ay via smartphones chase pay will still be available on the website and app. -- of retailers that accepted. it was launched four years ago. bit assbc is weighing a it seeks to diversify its business. the idea is in its early stations.
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boost itselp it insurance presence across southeast asia. they have plunged 27% in the past year. it is examining options in asia. more to come. this is bloomberg. ♪ from the couldn't be prouders
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first word headlines. the u.s. budget deficit is growing faster than expected and the congressional budget office says president trump's trade war is a drag on the economy. the shortfall is set to widen two $1 trillion by 2020, up from a 960 billion in the year ending september 30. forecasted afice deficit of $980 billion next year and didn't see a topping $1 trillion until 2022. minutes from the last fed meeting, policymakers viewed their rate cut as insurance
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against a recession. the fomc says they wanted to include their policy stance to counter the effects of uncertainty and slowing global growth. it was the first fed rate cut since 2008 but president trump says it's not enough and is calling for a bigger cut. the km germany both say they favor a negotiated brexit but neither side can say how that will happen. and angela merkel adopted an optimistic tone after talks in berlin with both repeating their west for an amicable split. johnson heads to talk to a manual the cron -- emmanuel macron and paris. the unrest in hong kong is set inflict more- damage on the economy. rent on hong kong island will fall 2% next year, a complete reversal from the 3% gain seen in a previous report as the
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protests began in june. centralacancy rates in hit a three-year high last month. the singapore prime minister has one online support over his salary. from none other than his wife. u.s.rns 1.6 million dollars according to the government website. he has faced local criticism amid the widening income gap. , pointing outo that other leaders enjoy more perks. global news 24 hours day on air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. paul: thanks. let's get a check on what's happening in the markets now with sophie in hong kong. shery: we are seeing subdued gains for stocks.
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the kospi is halting a three-day advance. the korean yuan is retreating from a three-week high. in sydney, mixed results. cold gaining on its earnings. a special dividend. qantas edging slower after a three-game -- three-day game. -- gain. let's quickly check on bonds. a 10 year treasury trading flat early in the asia session. yields are climbing in australia and new zealand. features remaining under pressure. germany saw a lackluster demand for its 30 year auction, missing its 2 billion euro target by more than half as that 0% coupon failed to attract buyers. , that is debt agency difficult in the current environment. indicative of the average yield coming in at negative 11's basis
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points, a record low. don't expect a similar reaction to 2015 sales. that sparked volatility than. shery: the latest trade data from south korea and taiwan point way global picture that remains bad. there's little relief on the horizon. nine of the 10 gauges tracked by bloomberg to assess the health of global trade are below their average midpoint. bloomberg economics reporter joins us now from singapore. we had just yesterday the first 20 days of august numbers for south korea. again, a plunge of more than 13%. not really surprising. what is the tracker telling us? have, toacker we trackers are the first 20 days from south korea and tehran. we saw both contract this week.
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the south korea gauge, not looking good. wade by the electronics ago that is trying to find that bottom. other trade issues, south korea dealing with its own issues with japan. the broader u.s. china trade war and other trade uncertainties as well as global demand waning. these two gauges specifically will face really heady base effects in the months to come. record-breaking september and october numbers. that will be tough to keep up the year on year comparisons looking near decent. the trade tracker, sentiment and shipping gauges also looking back. holding up in some parts. sentiment is radley in the tank. gauge, two exports gauges we are looking out for to come. they could turn red on the trade tracker scale.
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even below normal, below average midpoint but below normal in terms of long-run averages. not looking good around the trade tracker dashboard. stories isf the big going to be bank of indonesia. we are watching that one very closely. let me bring up this chart on the bloomberg terminal. it illustrates the measures they have been taking to defend the rupiah. notwithstanding the chances are not of a rate cut from bank of indonesia. can we expect them to continue to prop up the rupiah? >> i think so. it was the big focus last year during the tightening cycle. get itnted to stabilize, back up to a normal level or something they were comfortable with. the pressures are going in reverse this year. the rupiah will so come into play. bank indonesia is dealing with all the external pressures that other central banks are dealing with right now. really in a new phase.
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everyone is looking out for hints out of jackson hole in the fed -- and the fed to see where the cycle goes. they got the initial easing out of the way. central banks might be surprising on the dovish side after that initial fed rate cut. now it's a question of where do we go from here. how much do we use market intervention to stabilize currencies versus other tools they might have? as well as the big question around interest rate cuts. today we will be looking at, most likely, a whole than policy. a slim majority in the bloomberg survey see a hold versus others that are seeing dovish factors that merit a further cut in the future. of course, low inflation pressures on growth. looking at rupiah stability to make sure that things are in order on that front. shery: if they actually hold, does that mean that the bank indonesia or government will try to divide -- devise other
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measures to support growth? >> yeah. they've talked about different ways they can get into support the economy. the budget announcement did a little bit of that earlier this month. they are constantly looking at both the fiscal side and the central bank side. we have seen more movement. there has been globally some criticism of the fiscal side not doing enough to aid central banks in moving together in the policy court nation. what we have seen from indonesia of late is that they are willing to push these policies. a lot to consider. just a question of what the mix of policy tools is and what the timing is. paul: bloomberg economics reporter, thanks for joining us. telcoso come, china's may get a reception on the markets today when they report earnings as competition increases. we will get the low-down from the head of telecom research. that is next.
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this is bloomberg. ♪
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shery: this is daybreak asia. paul: i'm paul allen in sydney. china telecom said -- set to release its results today. -- next guest cut his price price target on concerns of prospects of growth. he expects china telecom to face challenges in the next 12 months and may see a 30% profit decline on year in the second quarter. joining us from hong kong now is jeffries head of telecom research. thank you for joining us. you are getting lower price targets on china mobile and telecom. what are the key challenges in your mind that they are facing? oni think that competition price definitely is a challenge. the next one is the 5g
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investment that they need to make over the next few years. for china telecom, the markets focus will be what management will say about china unicom's proposal to build a 5g network. unicom last week said that they believe they were pretty close to striking a deal with china telecom or mobile in some cooperation on 5g rollout. broadly, what sort of impact of huawei's troubles will have on supplying equipment to that buildout? >> right now, the market is pretty concerned about the able toof huawei to be continue providing 5g access and network equipment in 2020. if the u.s. export ban continues. also hopes that they are having plans to try to in source and replace the u.s. components they have been buying in the past. i think the question right now
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is about the performance of the equipment that huawei will make last year without using the u.s. components. shery: given all of these pressures, what are we expecting when it comes to 5g rollout in china? there was a clear goal to make this happen soon. >> it's true. china wants to build 5g for a couple of reasons including developing a supply chain that will be globally competitive, producing new services and applications to help the economy and industries to improve productivity on, i think the huawei situation is a new source of uncertainty first china -- for china. i think the war creates more uncertainty as well. the plan continues to be normal. i think it depends on the outcome of the trade war and the tariff war between the u.s. and china. shery: if we put that aside and focus on what's happening in the domestic markets, when it comes to the challenges for these
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telecom companies in china, what does price competition look like? especially at a time when we see beijing sometimes trying to pressure this company -- these companies on pricing. >> it has been imposing this initiative for four years in a row already. i think that pricing of mobile data service is already getting to a very affordable level to the mass market. i think the government pressure on pricing will be easing off as they expect the telcos to rollout five key. -- 5g. paul: i want to get your thoughts on recent events in hong kong. you say stocks are unlikely to fall further even if these protests drag on. there are so many moving parts right here, so many variables. what if the response escalates and hong kong's special status begins to get eroded? what is your outlook? >> it's important to separate the stock markets from the mainstream.
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if you look at the stock index, msci hong kong, the percentage of earnings coming from hong kong continues to fall. there are companies that generate 60% of their earnings outside of hong kong. with a focus on china, for example. as long as china continues to grow in a healthy shape financially and economically, these china earnings on hong kong earnings will actually try to protect downside on the stock indices in hong kong. this chartt to raise on the bloomberg terminal. we see shortselling turnover is a cut -- accounting for an ever-growing chunk of hong kong trading. you agree? will they get burned? >> the exposure to hong kong is retail. also property. maybe some transportation such as airlines. the fact that there's lower
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tourist arrivals. these local earnings will be negatively affected. it will get worse before it will get better. earnings outside of hong kong will not be affected to the same extent. shery: a lot of the discontent in hong kong has been centered on property prices. people not being able to afford housing. we'll could we see in the property sector when it comes to businesses and of -- and developers there? hashe hong kong government already put property as their top priority in the past. i do not think there has been enough action to make a difference to the market. i think that post protests, the hong kong government will focus on boosting land supply and subsidized housing in order to make housing more affordable to the average people. kong generally feel frustrated because they don't see any prospect of being able to afford their own housing. there's a lot of competition for
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resources from people from around the world. that's why i think the hong kong government needs to take substantial action on that front. in terms of opportunities around the region, you look at casino stocks being oversold. >> it's very lucky that mainland tourists will choose macau over hong kong as the destination. hong kong is not considered to be safe for tourists for the time being. i think that macau will continue to have gaming and entertainment. earningshy macau's will not be affected by the hong kong offense. shery: thank you so much for joining us. kong andt on hong other chinese telecom companies as well. clouds continue together over hong kong.
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weeks of unrest drag on and affect the economy. some companies are looking at the worst earnings performance since the financial crisis. hong kong's richest figures are slowly breaking their silence. resign warner writes about this and the latest issue of bloomberg businessweek and joins us now. the protesters have political demands. why are you focusing so much on the tycoons? >> that's a good question. as her previous guest just behind the political dissatisfaction, there's a lot of economic dissatisfaction in hong kong. many people believe that the government needs to do something going forward to address inequality, in particular, the problem of housing prices. and the inability of people to buy homes. that is something that might be more doable for the government,
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addressing issues like universal suffrage. that is not something the government is going to do. dealing with the housing price problem is something that might be more plausible for them to address going forward. shery: how big of a risk is this for these tycoons? you are seeing the former chairman of developer wheelock. his net worth took a hit. these are huge tycoons. they have so much business all around hong kong. the richest men in hong kong. how big of a risk is this for them? >> prasm some of them, it's a big risk. a lot of their fortunes really are pegged to the property market. exposed to hong kong. they get more than 50% of their
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earnings and revenue now coming from outside of hong kong in particular. they are less exposed. in general, the property tycoons are at risk because there does seem to be a consensus across the political divide here that the government needs to do something to tackle this issue. that could mean really taking on the tycoons are directly. -- more directly. paul: how likely is it that they would take a hit financially? i assume they are reasonably well protected. >> yes. that they in the past have managed to withstand challenges to their dominance in the local economy. it is possible that they may take some hit. also, these are big, powerful
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companies that have well-established ties with the government. they have resources at their disposal. thanks very much for joining us. you can get around up of the stories you need to know to get your day going in today's edition of daybreak. subscribers, going your terminals. also available on mobile. can customize your settings so you only get news on the industries and assets that you care about. this is bloomberg. ♪
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shery: this is daybreak asia. paul: i'm paul allen in sydney. let's get a quick check of the latest business flash headlines. qantas is feeling the drag of we demand and tiger fuel costs, reporting a 70% job -- drop. it will recover next year, lifted by expansion in its international operations. is is planning a buyback of 80 million shares. shery: goldman sachs is planning its biggest hiring spree in years. the entire effort focused on coders. they want more than 100 engineers on tech related woes. it plans to raise rivals to be based in new york and london. shiftre seeing a dramatic
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to tech focused workflows as automation is altering the way business is done. paul: the chinese car market is suffering a bubble burst. the uid is feeling the bruise after first-half profit missed analyst estimates. sales are expected to slow further as demand wanes and subsidies are cut for electric vehicles. geely profit fell 40%. it warns that government efforts have had little effect so far. shery: simpson might is warning of a rocky road ahead for the rest of the year. byst-half net profit fell one third, the luggage maker says it's being hit from all sides by trade tensions, protests in hong kong, and the looming threat of a no deal brexit. shares are down more than 50% in the past year. toy are cutting spending offset the pressure of profitability. let's get back to sophie in hong kong to preview what to watch
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and markets later this morning. sophie: we will find out if more companies see a rocky road ahead. we will get results from country garden among names reporting in hong kong today. this as the honk saying faces the biggest earnings contraction for the index seen since the global financial crisis. seen a 19% slump in 2019 operating income. this comes as hong kong stocks are set for the worst quarter since 2015. credit suisse and morgan stanley are among those names turning more bearish. that outlook is overshadowing any lower evaluations that hong kong might have. buyers, market hunters are liking china construction bank. this after the stock fell 202016 the last week. over the last 19 days, shares
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for the stock have attracted about 70% of total spending from mainland buyers over that time. you will see further upside for ccb on earnings prospects. we will get an update on that front when china construction bank reports results on august 28 next week. shery: before we hand over to bloomberg markets asia, let's cut -- get a quick look at how markets are trading right now. the nikkei is up, reversing some of the losses from the previous session. a different story for the cost be. this coming after three sessions of gains. we have seen the korean won rallying to its highest level in three weeks. we are now seeing the korean won holding steady, gaining a little bit of ground. the asx 200 is up 6/10 of 1%. we are seeing the energy sector and consumer sector leading those gains. let's get a quick check of futures trading as well.
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you futures up 1/10 of 1%. we saw every sector on the s&p 500 in the green. more optimism over better than expected earnings, especially of those retailers. we are looking at chinese futures, up four times of 1% since they closed for hours ago. the chinese yuan holding. paul: thanks. big interviews coming up later. qantas ceo will be joining bloomberg markets china open in a few minutes. south32 ceo will be on at 11:50 a.m.. we will hear from the kansas city fed president later on. don't miss these interviews. this is bloomberg. ♪
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so you started your own company at what age? >> i was 24. my mom gave me everything she had that was liquid. my dad gave what he thought he could afford to lose. david: one of the boards you are on is mcdonald's and it is said to eat mcdonald's every day. is that true? >> just about every day. david: in chicago did you ever play basketball with barack obama? john: several times. david: is he a good player? john: pretty good. >> would you fix your tie, please? david:

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