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tv   Bloomberg Markets Asia  Bloomberg  January 31, 2018 10:00pm-11:00pm EST

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of a hike in march and beyond. a lot to talk about this hour. >> obviously, coming in line about two hours from now. just to give you a quick snapshot, nothing happening by the dip. nothing much as far as yields. in probability the fed moves march. >> we are focusing very much on india and futures as well. futures suggesting a little bit of a spike today.
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we are watching fujifilm closely. we are seeing the growth slowing. check it in on the facebook. boeing is being given more than $6.5 billion to continue managing the u.s. missile system and tending to shoot enemy rockets out of the sky. the system has destroyed less than half the targets in the time it has been tested and -- u.s. prime is -- almostas modeled $13 billion and will build a finance tech city and innovation incubator. 60% sinceports are up
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2010. china is expected to be one of the vegas foreign investors by the end of the decade. relationss of future between the u.k. and china, we joint tradea investment review which i think is a good step towards looking towards our two -- future trade relations outside of the european union. on china to embrace the data and artificial intelligence to propel long-term growth. he says the company needs to make better use. told -- it should be embedded in the real economy. bitcoin is improving -- is -- a january side
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knocked more than $44 billion off the market value it generated. this reaching almost $20,000 in early december. a series of negative news has buffeted bitcoin and rivals. global news 20 hours a day --ered more better -- more journalists in00 120 countries. this is bloomberg. >> quite a good one. definitely a bit of a balancing act there curated thanks so much
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for joining us. on? is he likely to focus it is a balancing act. the budget is likely to focus on key areas. been goingndia has through a deep crisis. the second one is going through jobless periods. it is going to be tough to manage. more which is
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rising prices. all if you are recalling -- it does it completely off gear. -- intimate overall numbers pretty good. that question is not good -- not there anymore. islam in corporate india, is there anything i can hope for? there's nothing new about it. reason.a justifiable say that he will bring down corporate taxes.
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it is natural for them to expect that and cut corporate tasks is -- taxes. if he goes ahead and does that, it will be huge. investment are down for the last 24 months. >> so many buttons to push and so many things. thank you for a preview of the budget. but get more and bring in our --st and head of local global economics. the budget is where one of those things where the significance of the event depends on where you ask.
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careus, why should we about this budget? >> as i mentioned, this is the last budget and in the government is going to announce before the elections and there have been a few results would have not -- which have not been in a manner which they would like it to be. progressed, it has not reached more people. the pressures there on the government to do something to make them feel like maersk progress shared with them. at the same time, the other backdrop is the investments have been weak. you won't get jobs unless you get that private investment. for that, you need to do
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something that is appeasing the corporate sector and small investors. you keep the physical balance in check, and reduce corporate taxes. at the same time, you need some .ransfers right now >> that is something that really puzzles me. when you look at the economy. the past half decade, has seen a growth of about 7%. how is it possible you're not getting a followthrough and private investment when you have an economy that is growing? >> i have gone back 22 years and is notlike it
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representing the underlying growth trend. with an economy which has got basic level of population growth and basic level stuff, you're probably going to get that growth rate, but 6% is very close to recession in terms of job market. even the official data is pretty weak. it does tie up with the fact that our investment -- >> to that point, we see gross rate declining. that could impact growth even further. i wanted to talk about some of the bottlenecks. showing you are seeing a little bit moving back into india.
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the think you'll hear about opening up for hearing more question marks >> that has been quite on track. if you look at it, it has been going to high levels. i don't think additionally, anything else is likely in the budget. they almost have everything you need right now. what they could do is improve the business which is the reason back.nufacturing is held what they are doing to labor law announced that in the budget will be interesting to watch. that is one that has been completely untouched. hopefully, they bring that out and give a map on what they're going to do because that is the one missing leg.
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>> he also mentioned tire oil prices. how much is going to affect the overall budget and a tailspinning? >> right now, to the extent -- on thes no big impact fiscal subsidies, but going intord, imagine oil goes 9000. they will be having to think about subsidizing and not let it off to the consumer -- consumer. inflationrent level, is relatively low. india is going to be able to resolve the increases without causing much of a inflation is problem. >> lots more to talk about.
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don't change the channel and stay with us. more coming up.
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♪ expectation for 2018 as they will miss the fiscal deficit target. if you take a forward-looking , they will pick up and do a lot of assets. reductionct a bit of and disposable income, but at the same time, we do not expect a dose of populism for a political budget. >> that was some of the comments from our guests and we are continuing our conversation
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ahead of global economics at morgan stanley. talk about this global recovery. up a charto bring showing we have seen a lot of movement coming through trading ports record highs, but also volatility rising in tandem. speaking are not broadly about markets, but as we see this coming through, is that going to drive more momentum into this? cycle, wes of growth think there will be big improvement going forward. what was happening is india had done the economics, but you had the monetization which was holding back domestic demand. now we are seeing an improvement
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in consumption and exports. for they are improving thee, that is when expectation on returns -- in the earlier segment, we were discounting. to some extent, this was part of the cycle that the government had to accept, but now we are at it ine where we expect the middle of this year. india, we are already seeing signs of that and as that improves, you will see a proactive growth cycle. >> how are policymakers going to get to this? i think the best way is to reduce or per taxes. that would change expectations for the corporate sector. earliere are denounced
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that they have been delaying it and considering the backdrop, we would not be surprised if they do anything to corporate taxes. since it is the last budget before the elections, more than likely he will have to hold off and do some extra allocations. this situation -- at upe point, i think we are 100 basis points. do we need to start worrying about allocating more debt services into the world smart >> not at this point in time. -- understand that indian governments have a long duration of borrowing programs. the average tenure of death is
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pretty high. level that it is is resulting in the civilization so they don't have the problem psyche see. fine on that front. chart, youack to the will see it came off dramatically because of the monetization. and deposits hit increased. now you're seeing the normalization and so therefore your subsidizing the bond yield and at the same and time, you ae seeing a global recovery in global bond. the facts are playing and i don't think this is something that can disrupt the recovery. the big stories
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was injecting fresh blood into the public bank. are they done with that or is this like what we saw with china when they were cleaning up the banks? >> i think they are done with that. in the meantime, you are seeing thevery in the economy so new creation so to speak has already stalled. taken care of the public sector being issue. >> a couple of hours to find out. stay with us. lots more coming up. this is bloomberg. ♪
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>> you're watching bloomberg markets. let's continue the conversation
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with morgan stanley. you have the one holding at the highest level since 2015. if you think about where we were last year, people are expecting a different level than where we are now serious how is this different? about risinghink currencies, it will have some impact in the country's immediate competitiveness. if you go back and see when asian companies were competing against the dollar, it was the strongest growth in history. what isters is happening as a global end and that is booming right now. we just got the numbers today which showed very strong foreign growth. >> when do we see corporate get
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and increasing rages -- wages? a stopave seen a bit of start, but now we are seeing an recoverynt and it is going on. interestingly, it is also to the extent where post recovery has been there since last quarter of 2016. countries in asia are also beginning to gain confidence. construction is not that strong. of globalte confident growth, particularly because it is backed up globally.
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>> it is definitely moving. what are the major risks if you look at the overall economy because people are saying perhaps not this year, but mid-2019. for the be geopolitical risks? and were more defense don't necessarily see now the end of the cycle with big price u.s.,ures, but within the we are watching the corporate -- ife because that has you look at the corporate sector, that has gone up in the last year. when rates is that rise, that begins to hurt the corporate sector. that is when you will see some pressure on the downside of the
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u.s. economy and we think the risk would be worth watching because that is when the rates rival of neutral and that could pose problems on the corporate she. sheet.orate balance or -- we still lowballing for the policymakers might be forced to run those rate increases? >> i think that would be the second risk. germany,s well as in cpi numbers have not been surprising and we have not been in line. that is one we have to watch. we do think there is a
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theibility it will see off upside. what did you make of janet yellen's final meeting? >> there was not much there. the fact they are not seeing inflation going forward, i think it was just what the bond market had been asking for. rates are going up, so i think from that perspective, it was .ust a confirmation the bond market was looking and that is what they got. rate hikes from the fed? >> we are expecting three. >> thank you for coming on the shelf.
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-- on the show. >> we are seeing the china market with quite a bit of weakness today.
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>> it is almost 12:30 in the city of tokyo. .ollar-yen on the high side we are getting a little bit of movement to the upside in nikkei theres from the last time cash market traded, which tells me we are going to get a nice pop. we are in theg, last 30 minutes of trading. we are seeing weakness and through antenna markets. -shares up by 20 5%. weakness coming through in some of those casino players today. you are watching "bloomberg markets: asia." i am juliette saly. david: and i am david ingles. green is indeed the color of the day.
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he or she is with your first word news. yvonne. yvonne: the new central bank governor. he was deputy governor of the monetary authority and starts a five-year term through february 23. he precedes one of the world's longest-serving governor's in the job for two decades. the president has said the next governor must maintain economic stability. last timet for the under janet yellen, keeping rates unchanged, but set the stage for arise under jay powell. conditions will you vault that weren't gradual increases, adding the word "further" to previous statements. the risks to the economic outlook appear to be roughly balanced. havetopher wray is said to told the white house he's thenst the release of
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republican memo alleging bias. we are told he thinks it contains inaccurate information and paints a false narrative. it deals with alleged russian meddling in the 2016 election and is currently being reviewed by national security lawyers. ready toreat firesale go. hna group is said to have told creditors they will sell assets in the first half to pay down debt and avoid a cash crunch. sources tell us for this of those tales would come in in the second quarter -- 4/5 of those sales would come in in the second quarter. than 2700 journalists and analysts in more than 120 countries, i am yvonne man. this is bloomberg. david: thank you so much for that, yvonne. in 18 hours from now roughly speaking, apple comes that with earnings. the reason that is important is there has been a lot of concern recently that sales of the
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iphone x have not quite been up to par. we are hearing from some of the suppliers that, yes, compared to previous, i guess, releases of iphone, has not been there. have a look at the bloomberg function on the supply chain analysis. apple is in the middle. telcos.see the absolutely. price was pushed out to november. may have seen a lot of sales. apple even admitted is slowing down the use of some of its phones as well. we have had a stream of earnings from the world's tech giants. qualcomm.microsoft, ramy inocencio has all the details from new york. facebook, the
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company sell nearly 5%, but then he raised those gains to push -- erased those gains to push higher. the time people spend on facebook fell by 50 million hours. mark zuckerberg wanted to balance the fund, so they cut him on a viral videos. in the earnings call, facebook and reassured investors the downward trend should not last, and after all the revenue and earnings numbers did smash expectations. and the makermm, of wireless calms equipment missed revenue as well as earnings. those numbers more proof that demand for smartphones continues to fall. qualcomm says it is seeing an inventory buildup in china as well as lower orders. after our shares fell. to microsoft, revenue and earnings beat there, and it is all about the cloud. ure reported 97%
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growth, even better than the quarter to four the cloud is not going to blow away anytime soon if at all, and it is very early days for the sector. there was one shadow on the day, the $13.8 billion tax charge it took because of the white house had to overhaul. microsoft ended the quarter with a net loss. in after hours trade, the share price fell through present but pare batch of a flat line. ramy inocencio, bloomberg news, new york. david: preview of some of the big tech earnings. asia-pacific said the company has plans to expand big markets, japan and singapore. quashed speculation it might be pulling out of the region after softbank's investment. juliette: let's get more on this with a reporter from singapore. you live in singapore. i live in singapore.
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a little bit late in canceling drivers. uber trying to up its presence. tell us more. yes. yes, so we recently sat down with the head of asian business in singapore. he shared a very interesting planningn what uber is to do. there has been a lot of speculation the softbank having completed its investment in uber . that has led to a lot of speculation that maybe, you know, uber would withdraw from some of the markets in asia because, obviously, softbank is the biggest shareholder, and they don't want to invest in companies to compete with each other. said that's not
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the case. they are not really pulling out. on the contrary, they are going to aggressively invest and expand in asia. david: tell me this, though, because there was earlier speculation, and if you could help clarify the details on this thing as well, that there were as far as the singapore operations were concerned, would acquire the business there. yes, there has been speculation. the sources have told us that there are some preliminary talks andeen uber and grab between uber and the company in india. it is backed by softbank. the sources are telling us there are some preliminary talks, but uber on the other hand said to s they are actually expanding and asia, especially
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japan, where they really have not been able to crack the market. so their strategy is to really work with companies in japan, so that will be there major focus this year in 2018. to ceo of uber who came really spearhead the changes and uber is going to visit asia for the first time later this year. ande will visit japan india. and i think there will be a lot of talks to force some collaboration there. juliette: all right. it seems to be a bit of a duopoly. a bloomberg subscriber, you can catch up with all of our interviews by using our interactive function, tv . he can join the conversation by sending instant messages to our team and guess during our live show. you can send us a message. this is bloomberg. ♪
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david: right. the markets.eat of record after record. you look across major asset classes. let's say, relatively extreme levels. juliette: joining us on set is thomas schroeder, founder.
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you have done your homework as well. we like this. you have provided us with charts we have converted into btv charts so people at home following the terminal can follow along. g #btv 1582. we have seen this weak dollar move. we have a state of the union address yesterday with president trump failing to mention the strong dollar policies that had more weakness. a lot of confusion over trump's agenda on what they actually want with the dollar as well. where do you think the resistance is for the dollar? thomas: it's important to realize the dollar has declined as yields have risen. -- there is a longer-term trend line, price support. that is a fairly big level. that equates to 126. there is a big risk correlation
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theeen oil equities, dollar, the dollar down, oil up, equity up. if that reverses, there is going to be a problematic risk scenario looking forward. dxy's,we are looking at and the basket is skewed to the euro. we have a euro chart you sent over to us. 1.#btv 159 as the dollar mainly a portion of the euro? here is your chart for you. at 124 toem we are 125 through where does this go and when do we get there? thomas: there is another push up in the euro near-term. 126, that would imply that the dollar still has continued weakness, emerging markets with more euphoria yet to go. if we back off of that, we need a backfill test before you see
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some sort of significant -- david: what does it mean? thomas: it comes off the resistance level and retries it again. it will do it a few more times. through the break resistance level, you will have a bigger decline. about 113 ofalking the euro. that's a pretty big reversal. juliette: if you go back to what termse the dollar -- in of what that means for yields, we have another chart here. g #btv 981. we saw that 2.75% this week. alan greenspan coming overnight and saying there is a bond market bubble as well, but 3.75% could be an inflection point as well. when is that? thomas: that is more of a story for 2019 if you break through percent. i would be buying bonds or
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selling yield around 3%. we hit to 75. and thens for 290 backs off. that plays into the correlation of equities and bond yields rising. equities have risk on. level 3%.pretty big we do back off of that. eventually, you should try to present again. a lot of sweet for the global cycle right now. probably would not really reflect until 375 on yield. david: but at the chart back up on juliette's terminal. i want to ask you as well because there has been debate going on for 12 months or so. trend?broken have we broken this bull market at this point? we have seen a few breakouts. some people say they were false positives. at 275, are we had a breakout? thomas: i think 3% is the breakout level. my call was we were going to
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push through that. we just kissed it with a reach for 290 and then backing off of that. david: what happens in the bond bunds space drives what happens for the yield. i can't imagine someone coming in and looking at bunds at 50 are and saying bunds cheap. thomas: they have a more bullish yield pattern. the treasury's right back off at 3%. bunds will continue to drive yields higher. that may be what takes the euro through 126. that's not good for european equities. it is good for emerging markets. seen thatill continually, even when they try to talk up the dollar. i think the differential favors the bunds and the european banks
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as well on the back of it. juliette: speaking of favoring some of the asian equities, particularly when we look at some of the em's, we have a chart on korea. we know that south korean stocks have been propelling or holding your these record highs. when we look at the kospi 200, most stocks make up 93% of the overall index. you say you could see a breakout andhe kospi 200 at 350 360, we are currently at a level of 333, so when does that happen? microanalysis, you can see a descending wedge that has broken higher. what is interesting is the yellow line is one you broke through that, that is a multi-year breakout, a decade breakout without a break in the 2008 level. i think you are going to see that curtailing through or following through leading into the hong kong and asian stocks. i can make a case for the
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philippines, indonesia, and some of the smaller markets. where you wantet to be selling japan and buying korea. david: the yellow line, would that break the low that changes your view on where that goes? thomas: that is a big move to the downside. david: knowing these markets, you can underestimate how jumpy these markets are. a lot of people will love this one. this is the breakout in hong kong stocks. this looks fairly complicated. please tell us what we are looking at here. why is this a longer-term, realistic target here? i draw, extract the move from the kospi above 272, one of the first ones to do that. you saw some of the smaller markets like indonesia do it. we saw hong kong breakthrough the 29,000 area.
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we have hit the short-term target. david: on hang seng? thomas: yeah. you probably pushed through 342. my global cycle sort of goes something like this. you have another push-up in risks, oil peaks, the dollar may weaken, but it is correlated to equities. you see it pulled back in february. and then i think you go to that 37,000 level next year. maybe i'm the road, you get to the $47,000. you look at the longer-term career chart, the hong kong chart, the emerging markets chart, and they basically have done one big correction since 2008. i think you can actually see the doubling of some of these markets. david: very quickly, apart from
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what we talked about, the hang seng and the kospi, is there any specific equity index you are most excited about as well? thomas: so what time frame? david: the next five years. thomas: five years? i think most emerging markets would do very well. i think there is a re-rating in korea. kong, korea, and taiwan. forette: thank you so much coming on and thank you for all of these fantastic charts we now have on our bloomberg terminal as well, courtesy of our chart master. the managing director and founder. plenty more ahead on bloomberg markets: asia. this is bloomberg. ♪
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david: we are a couple of minutes into the equity session over in mumbai. let's get a check of where we are. sophie has the latest for us on budget day. sophie: it is budget day and
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have stocks snapping a two-day drop of the countdown to that reveal. looks like investors are weighing their positions. they might be sitting on the cash, waiting to see what the plan is for borrowing for the government. that is going to weigh heavily on the bond market. series ofrong manufacturing pmi data from across the region, we are waiting on india's latest report for january. the pmi jumped in december for context. let's pull up off the board to check in on some movers in mumbai. tpc falling after net income missed estimates. a construction business on the rise after a third quarter net rise of almost seven. toubro rising. juliette: looking more mixed for the broader picture. a bit of a downturn from some of the chinese markets.
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glaringyou can see that red, the outlier down over 1%. that is certainly what we are seeing when it comes to the ndx as well. gains enough to help the region snap a three-day selloff. i reckon the picture a growth in earnings is strong enough to offset concerns about rising bond yields, so we have treasury falling once again. most regional bonds tracking the move. jgb yields rising again after being subdued by the boj's bond buying earlier this week. that is rising ahead of inflation data. chinese stocks have hit a roadblock and i want to show you closely what is happening, checking in on the shopaholic opposite. share -- on the shanghai composite. financials, the one bright spot on the benchmark.
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26 stocks falling by the daily limit. pulling up the board to check in on that stocks, it down over 12% this year to represent a by on aredip opportunity they asking for. petrochina is the biggest drag in terms of points, in shanghai. product price increases will be reported theer it refiner warned consumers about pricing. and water.ke a fire david: i thought i was kind of whenwhen those -- drunk those numbers jumped out of the screen. thank you so much for that. amazon set to report its fourth-quarter earnings. we should be getting those numbers before we wake up or at about the time we wake up in asia.
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emily chang has a look. amazon's >> for world dominance continues almost seemingly unchecked. it unveiled the convenience store of the future. $13.7 billion purchase of whole foods. a purchase that pushes amazon deeper into the $800 billion grocery market, where most spending remains with traditional brick and mortar retailers like walmart. amazon's share price has rocketed up and surpassed $1400 for the first time on friday. enthusiasmy investor around its e-commerce growth and profitable cloud computing business. amazon's forget growing advertising business that promises better profit margins than online sales. some investors are not so bullish, thinking this wall street darling is due for a
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pullback. big spending that outweighs revenue growth has historically been the thing to trigger an amazon selloff. investors are watching for signs of growth from amazon prime subscribers, the service that can turn occasional shoppers devotees. but could a company that has 90 million members and is planning to open a second u.s. headquarters and wants to take over your home appliances and get into the health insurance game be reaching a saturation point? we will be watching, and so will investors. emily chang, bloomberg news, san francisco. juliette: a quick check of the latest business flash headlines in japan's biggest messaging service reported a loss. $37 million in the red, confounding analyst forecast of a $21 million profit despite net sales beating predictions at
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$421 million. it said it is expanding. we are seeing shares down almost 3% in tokyo. shares of fujifilm have taken off. have a look at what we are doing after news of this xerox takeover. $18 billion company with shareholders getting a cash a share.of $9.80 it marked the end of independence for a company whose roots go back to the start of the 20th century. copiers became so ubiquitous of course that xerox became a verb. asian rivals eventually eroded it. juliette: a surprise third-quarter loss of $289 million. analysts had been expecting profit of $125 billion despite revenue of almost $30 million, beating the average forecast. high memory costs. 71% of lenovo sales.
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its own business also remains weak. david: that is it for our "bloomberg markets: asia." don't miss our special coverage of the indian budget including the full speech at 1:00 p.m. hong kong time. this is bloomberg. ♪
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alisa: i'm alisa parenti in washington, and you are watching "bloomberg technology." here is a check of your "first word news." a charter train carrying dozens of lawmakers to a republican policy retreat in west virginia struck a garbage truck in a rural virginia in town today. one person was killed and several others wounded. lawmakers said the fatality appeared to be someone on the clock. the chairman of the house oversight committee, trey gowdy, is not seeking reelection. he says he is returning to the justice system. he chaired a panel investigating the 2012 terrorist attack in benghazi. his announcement brings to 64 the total number of members of congress not opting

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