tv Bloomberg Daybreak Asia Bloomberg April 5, 2018 7:00pm-9:00pm EDT
♪ yvonne: president trump turning up the heat on china, says america deserves that are and may order $100 billion now of new tariffs. >> the yanis strengthening on the president's latest threat. they are saying it is better than world war. >> u.s. employers may have created a quarter of a million new jobs last month. >> meetings, red tape and bureaucracy, a few of the things that irritate jamie dimon.
♪ >> hello, and welcome to daybreak asia, haidi lun here in sydney. betty: and i am betty liu in new york. we have been going over headlines that broke a few moments ago, president trump threatening up to $100 billion worth of tariffs on china. also interesting to see a statement from lighthizer saying extra tariffs are subject to public comment. futuresres -- dow mini tanking, down over 300 points. haidi: so much for that three-day rally we saw to close up the night. the dollar-yen situation reflecting risk off, falling to the session low going into the tokyo open. just as it seemed trade tensions were easing or perceived by the
markets, president trump turning up the heat again, ordering the u.s. to consider an additional of tariffs on china. let's get to joe sobczyk with the latest. the president said it is retaliation for china's $50 billion worth of retaliatory tariffs from the original threat of u.s. tariffs on beijing. can you say tit-for-tat here? joe: certainly seems to be that way. it is a dramatic and surprising fewlation, over the past hours it seemed to be under negotiation with the presidents chief economic advisor larry kudlow saying they were in talks with beijing. order, trump did do something that suggests they are anticipating another serious response from china, directed
the agriculture department to take whatever steps are necessary to support u.s. farmers because the chinese response was directed primarily at the farm states, soybeans, one of the and beef, biggest cash crops for u.s. farmers, and china is one of the biggest customers. betty: we will see the fallout and any response from china to the new threat from the white house, but we also heard the president saying the e.u. is not treating the u.s. fair on trade either. looks like the e.u. is in his sights again. joe: the u.s. is looking for other trading partners, including the e.u. to act with of the u.s. in terms of punishing china and putting pressure on china. ramping up the rhetoric against the e.u. would seem countered --
counterproductive. the have until march 1, exemption from steel and aluminum tariffs, which the president will be reviewing. he seems to be conducting this on two friends. it remains to be seen if they will impose steel and aluminum tariffs on the e.u.. betty: what about nafta? there is so much to talk about on the trade front. are there hangups with a nafta? joe: there are a few issues. primarily dairy. through one of the hangups on automobiles as the u.s. dialed back demand. there is talk from justin trudeau of canada, who was very optimistic today, saying they are close. following other officials telling bloomberg they were hoping to get an agreement by the time they got the president
and leaders of canada and mexico to meet for the summit of americas in peru. trump has dialed back on that saying, no rush to get this done. many things seem to be in flux and a lot of balls in the air for the administration at the moment. betty: thank you so much, joe sobczyk, on the trade front. the white house threatening $100 billion now of tariffs. before those headlines we saw the market take on a bullish tone, thinking trade tensions were all talk and no action yet. the s&p rising over 0.5%. the dow closing 240 points. the nasdaq adding gains as well. let's look at day three of the u.s. stock bounceback, is it going to last with these new headlines? su keenan joining us. >> balls in the air, not a good
thing for the market. it does not like uncertainty. could be the third day higher for the s&p, but now we have the toning down of rhetoric being toned back up and it sets up for a very volatile friday. let's go into the market snapshot. lower, it was higher in the earlier session. you had a move away from save haven plays with the exception of oil moving lower. if you go into the bloomberg, easy squeezey is the title of a shot we will show you. among big movers, those the most heavily shorted stocks. hedge funds had bet would move lower. we can go into the bloomberg and have a look at this. what we have here is a big rise. it raises the question, do you have momentum stocks moving higher, or do hedge funds cover
their bets because there has been a reprieve in the market? we have news these tariffs may be back on. you may have hedge funds rush to reposition these shorts. let's take a look at what moved today. a lot of stocks beaten-down by tariff concerns. this one was a big gainer. if we can take a look at these froms in focus, it was up 4% after being beaten down by concerns. a roller coaster lower because of the latest news. trump was up despite laying on criticism of the company. the bottom stock had a lot to do with blockchain infrastructure, even though that stock also had been in the controversy. let's look at one more bloomberg chart. is the real interesting surprise rise of initial u.s. jobless claims, drop to more than forecast, still near a 45
year low. there is an expectation the jobless claims will be lower for the month. as mentioned, there will be a significant job gain. that will set us up for a continuing story of a robust job market. again, it is looking like a volatile open for friday. haidi? haidi: it really is, and how quickly things change. let's look at new zealand were trading is underway. we saw gains pared, the kiwi -- .7267..76 we see the aussie giving up short-lived gains this week. we had a 77 handle for the aussie, but that is paring back. let's look at futures in sydney, 31 points, unchanged.
the yen is really where we are seeing the reaction. dollar-yen trading at that session low, 107.04 is the level we are buying -- eying. if you look at liquidators, they would be happy about that decision. literally doubling down when it comes to this trade war going from $50 billion to $100 billion potentially. nikkei futures, 1.5% to the upside. dollar-yen continuing to grind lower going into the tokyo open. that is your markets. u.s. futures looking wobbly after the gains of the previous session. let's get the first word news with courtney collins. >> facebook has told bloomberg it has a long way to go on protecting people's data, and that some advertisers have been cutting back on spending.
sandberg says corporate buyers are asking the same questions as ordinary users, is security tight enough? facebook is reviewing its tools after admitting all of its 2 billion users may have had their data accessed illicitly. build our did not operations task and that is on me. we had 10,000 people working in security at the beginning of the year. at the end of this year we were doubled to 20,000. we are massively investing in smart technology and doing this to make sure we get to a place where we can proactively protect people's data. japan and the european union want to join the trump and ministration's wto case over china's alleged discriminatory tech licensing rules. brussels in tokyo say they have a substantial interest in the dispute going ahead. japan says it is one of the
largest stakeholders in technology transfer to china, and japanese nationals hold a significant number of patent country. -- patent rights in the country. buying the chicago stock exchange. the chicago board unanimously approved the sale, which followed an in-depth review of strategic alternatives, and is clearly in the best interest of stockholders. it is expected to close this year. the chicago exchange handles a fraction of u.s. stock exchanges. apple boss tim cook will be questioned by qualcomm's lawyers in june as part of the chipmaker's escalating battle with one of the world's most valuable listed companies. the dispute began in january last year when apple filed a $1 billion suit, accusing qualcomm of overcharging for patent licenses. it is part of the chipmaker's
countersue, accusing apple of lying to regulators. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. ♪ betty: courtney, thank you so much. jamie dimon warning of risks to the global economy from a potential trade war. he shared a solution with shareholders. rally a thirddid day. $100 billion worth of additional tariffs to punish beijing for what is seen as a lack of contrition by washington. that statement out the last 10 minutes or so. our guest joining us with his views. this is bloomberg. ♪
asia's first major market open this morning. japan futures looking shaky going into the tokyo open. the latest segment from president trump saying they have been asked to consider an additional $100 billion on tariffs of chinese goods as beijing's retaliation to the first set of tariffs. certainly a tit-for-tat situation underway. trump saying the u.s. is still open to talks. nikkei futures, this is how we are sitting on chicago futures, looking weaker to the downside. dollar-yen falling to that session low. certainly going to weigh on sentiment, as we go into the open of trading this friday in tokyo. i am haidi lun in sydney. betty: just as we were talking about headlines, we may be getting past them a new set of headlines walloping the markets again.
asian-pacific stocks may be facing a difficult day, president trump adding new tariffs threats. that is rippling through the markets. we are seeing stock futures tanking. yenaidi mentioned, the jumping on this idea of an additional $100 billion worth of duties against china. i want to bring in whittier trust vice president caleb. we thought this might not be over with, but we thought there would be a relief in the market, and now this. why do you think we are suddenly reacting so violently to these new headlines? we thought we were in a round of negotiations toward the end of the day. clearly, after market close, we are back into this retaliation period. from a long-term perspective, this is reminiscent of brexit in
the sense that you had a big, swift selloff in the market and the concern was, how bad can things get. i think over time you will see a negotiations, fundamentals in the market. this is temporary, this is foruring, it will not last the remainder of the year, maybe a couple weeks or months. isty: you are saying this still fresh, we are reacting to headlines, but like brexit, in a few months it will turn to noise? caleb: yes, you cannot be by president trump and what he is going to do in terms of posturing. on the other side, the chinese will make sure they stay safe. this is not just about economics, this is about pride as well. right now you're seeing posturing on both sides, but over time you will see
negotiation and a return to fundamentals. a fundamentals are strong. the market is trading at 16 times earnings. the s&p 500 has seen multiple compression this year. interest rates have moved up a little since beginning of the year, and has led to slight multiple compression, but sets up for better returns going forward. we are not seeing this spill over to the credit markets. bonds are down less than the aggregate bond index. if this is spilling over into the economy, the credit markets, that would be a bigger concern. right now this is targeting specific companies, industries. bute is a lot of posturing, it is not an indication the economy will slow down, head to a recession anytime soon. just asomeone say it is matter of time before this shows up in the credit. the thing i am grappling with,
markets hate uncertainty, but this is not a binary issue. we are not likely to get a result quickly. many are saying it will be round and round of tensions. is it ignore at your own peril, if you look at the market reaction this morning? caleb: no, i don't think you want to ignore it and -- by any means. you want to look at what is presented by these headlines. names moree specific susceptible to trade tariffs. they will selloff in the interim, you can take advantage of that by buying names beaten up. we have seen the rally in the last couple days. the names rallied the most were beaten down by the specter of trade tariffs. the same thing will happen again. those names will selloff. we think you're are better off being in forgotten names, rather
than the most actively traded. if you can be in the names less dependent on these trade negotiations, that is where you want to be today. looking forward, three to six months, there is an opportunity names could be beaten down. you can buy pretty decent companies at discount prices. haidi: how does that apply to tech? valuations were better off after the selloff. specific are facing existential problems at the moment, but is there a shift away from buying the growth story? has that can fiction -- conviction faded? caleb: we do. you want to shift toward quality rather than overpaying for growth. there are still quality names in the tech space. google would be a name, apple would be a name, still what you want to hold. they are growing cash flow,
fairly reasonable valuations. we would continue to own things like that. haidi: where else do find safety in this market? one of the big questions that comes up time and time again, this is the year were volatility is back, or may be getting back to normal after an abnormally your of calm. -- year of calm. caleb: it is an interesting year. the stock market has outperformed the bond market, your today. -- year to date. in some respects it has been a boring year, but if you look underneath the surface, it has been anything but. where you find safety is in names that are the forgottens. the names that are not in the headlines every day, but
high-quality companies like honeywell, johnson & johnson, berkshire hathaway. those high quality names that have grown cash flows for decades. it has worked for us for 30 years, it will work the next 30 years. when you see headlines that cause the market to selloff, fundamentals remain strong, that is when you want to take advantage of it. we will get a better glimpse a fundamentals tomorrow in the jobs report. matter, these headlines on trade? caleb: no, it is important. the fed is very important this year. raising rates,ey but engaging in quantitative tightening, something we have not talked about much because of all the fiscal headlines. quantitative tightening is a big deal. by october, the federal reserve is expected to reduce the
federal balance sheet. at the same time you have a pretty wide deficit on the fiscal side. i think you are going to see the federal reserve take a real hard look at slowing the program down with the volatility we are seeing in the equity market. supportive of equities over the next three to five years. while this is a near-term headwind, we think over the longer run that may be beneficial, in terms of having the federal reserve slow down on quantitative tightening. betty: thank you so much, caleb silsby of whittier trust. bloomberg subscribers can interact with the chart you just saw using gtv . you can browse recent charts on key analysis and link back to conversations you just saw in our program. pretty cool, just click the
♪ betty: a quick check of the latest business flash headlines. the japanese convenience store operators says output increases as they look to have more revenue. they expect operating profits will rise to $3.9 billion. they seek a surges of more than 1000 sunoco stores in the u.s. next january. they are introducing it in out -- an app next year.
>> it is not just retail, autos and the financials are affected by the amazon affect. we want to make digital strategy a part of our approach in the future. betty: we will talk more about these results later on daybreak asia. guestl be joined by our for analysis. pershing square under pressure with many institutional investors asking to redeem their money. about two thirds of the capital investors could pull from pershing -- pershing funds. jpmorgan has removed pershing square from its list of recommended funds. executives inp the u.s. leaving after nine years on the job. he will step away on april 17.
♪ 9:30 in the morning friday in sydney, 30 minutes away from that asian first major market opens for the end of the week. storm ofking like a bad news when it comes to that last trading day of the week. a potential $100 billion of extra tariffs to be slapped on china as a retaliation for what is seen as beijing's retaliation to the first round of terrorists. subject saying that is to the public consultation process and the u.s. is still open to talks. i do not know if that is seen as comfort to investors. betty: no, but as we were os theg about, approp
chinese markets were closed today. 7:30 p.m. tuesday evening it -- wednesday evening here in new york. certainly a bullish tint to the market. i am betty liu in new york. haidi: and i am haidi lun here in sydney. you are watching "daybreak asia ." has thrownt trump fresh fuel on the trade fire, threatening additional tariffs on $100 billion of chinese imports. the president says the action is in light of what he calls china's unfair retaliation to the initial tariffs on $50 billion of goods. the s&p 500 made a third day of gains on talks negotiations could head off a trade war. the president has also renewed his attack on amazon, saying he
is taking a serious look at what unlevel an unfair -- playing field. he says there could be a decision from the supreme court. the u.s. postal's office loses out delivering amazon packages, but they say that is not the case, they actually make money. saudi arabia has unexpectedly raised the price of its crude in asia, sending brent crude to its highest in almost three years. aramco lifted the official price by $.10 a barrel. a survey last week said refiners and traders were anticipating a $.60 a barrel decrease. former head of sales for bitcoin exchange says he is no longer a believer. the technology is
here to stay, but bitcoin may have trouble you evolving and keeping up. he says he does not own any bitcoin anti-think its main untested.reum is too he filed for bankruptcy after millions of bitcoins meant -- went missing. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. ♪ betty: we are getting samsung earnings. for the first quarter, operating profit at 15.6 won. almost double what we saw in the first quarter of last year. a huge rise. the sale ofng memory chips. demand for memory chips has juiced its profits. won, below0 trillion
what analysts estimated. that signals samsung has not only been doing well in terms of its memory chip business, but also doing well at cost-cutting. it appears they continue to company andt of the that is improving the bottom line at the tech giant. haidi: we keep looking for that profit downturn. this is a company that continues to impress with each set of numbers. we were concerned by the pickup of the oled screens, given we have sluggish cells for the iphone x. it has been such a massive component. views, techsome analysis, his views on this company, particularly as we get apple wrapping up its own integration, and moving away from these samsung components. good news certainly, could give
a lift when it comes to the kospi trading today, given they are such a massive part of that audit. new zealand turning into the negative, although it is pretty flat. the kiwi dollar at .7257. watching this ratcheting up of trade rhetoric from the president. sydney futures holding onto gains. the aussie dollar, .7659. willes not look like we hold onto momentum going into the close. australia 10 year yield, 2.66, the lowest relative to the u.s. 10 year in four decades. this is what we are seeing, reaction to potential $100 billion of extra tariffs on china. chicago nikkei futures well and truly off by 235 points.
paring earlier losses, we were down as much as 250. nikkei 225 that last quote 1.5%. dollar-yen holding onto that 107 handle. not much of a market for hong kong to come back. we were looking at them playing catch-up. they may not even get a chance now. betty: no, not at all. let's look at how equity futures in the u.s. are trading. dow futures plummeting to their lows of the session, down 1.7%. s&p futures more liquid, down 1.4%. nasdaq futures down by about that much, just reacting to these fresh headlines from the white house, ratcheting up tensions with china. you can turn to your bloomberg for more on president trump's additional tariffs proposals. --to
fears to the trade war one side because march payroll numbers will be out tomorrow and bond traders around the world are poised to respond. kathleen hays here with a preview. kathleen, do you think those numbers will be important for the markets, given the headlines? >> i guess we will see how they react tomorrow. president trump has been sticking to his guns. they want to change, but they have to do something. it is upping the ante. it is like playing cards. china says we will match your $100 billion worth -- we do not know. ultimately, assuming we do not have a trade war, jobs, the federal reserve, inflation, that will be most important to the fed rate hike. march come a could be distorted, marchd, by wintry --
could be distorted, clouded, by wintry weather. some people work in those jobs. construction, for example. you can't work, so it could shorten work weeks. tends to boost hourly earnings. this could lead to a wage inflation head fake for one month. jump into the bloomberg with gtv , if you want to look at this chart. this chart is average earnings, u.s. unemployment rates. you can see that back in january, a couple months ago, got up to 2.8%, year-over-year. not as high as it was back in october. that was when we had pretty harsh weather. down to 2.6%. what does this all mean?
it will probably mean when this number comes out, bond traders, could really react. be 185,000,posed to could be even weaker. that would help the bond bulls. unemployment not a big deal. if it prices higher, that is when you get the bond bears going. they are waiting to make their attack on that percent. the bears want to get out of that cave. haidi: what are the implications for the policy partner? kathleen: the federal reserve has more time than bond traders due to react. er-distortedath number. pushing inflation toward 2% or higher. they were speaking to reporters in florida earlier. here is what he said about the
possibility of exceeding the fed target. >> the train is going in the right direction. we will hit 2% in the next quarter or two. i am comfortable going above the 2%, 2.2%, 2.3%. i do not think that is a crisis of overheating. kathleen: not something to be worried about right now because gauges, 1.6%, 1.8%. the report may be the trade dispute, if it is really catching headlines and moving bonds. in that case we will see people look for safety. haidi: kathleen, thank you so much. dimon,n boss jamie everything from the potential trade war to global growth and even bureaucracy. he thinks some meetings are an utter waste of time. our reporter joins us from san
francisco. what stood out out of the myriad things that were touched upon in dimon's letter? wars you said, the trade come up of tariffs between the united states and china, were highlighted as a risk to be economy and the markets. in jamie dimon's letter to shareholders which moved thursday morning u.s. time overnight for asia, mr. dimon said the tariffs, the threat of tariffs, could be something like a pandora's box, which could open all sorts of problems for world markets in the world economy. not the least of which, he thinks it could damage growth in the united states. say arehat did dimon the biggest risks the global economy? dan: in addition to the prospect of a trade war, he was
discussing the fed's unwinding of a balance sheet. the idea of interest rates steadily rising. he said if this is happening because we have a strong economy, because growth is doing well because inflation is under control and wages or fairly steady, that is a good thing. that is how it should be. he talked of people's expectations and how they might be surprised if inflation suddenly becomes an issue. and if the fed needs to therefore act more quickly and rates might go up quicker than expected. betty: did he signal any plans for growth? dan: for jpmorgan he was exuberant about plans for growth. he went through every business -- bank has an talked about
and talked about growth targets he's -- he expects to see. sticking to asia, he talked about the market share in asia the jpmorgan has, is only 5%. he compared that to 10% in the u.s. and said, i expect investment banking to go in asia. he expects some to grow in commercial banking, consumer banking. he said the bank will answer may be 15 to 20 markets in coming years. it is not currently in for consumer banking. betty: jamie dimon taking over the world. thank you so much. sheryl sandberg saying a few advertisers have curtailed spending over the social network's data crisis. she told emily chang she takes some responsibility for the scandal. build our did not
operations and that is on me. we had 10,000 people working in security at the beginning of the year. at the end of this year alone we are doubled to 20,000. we are massively investing in smart technology. we are doing this to get to a place where we can proactively protect people's data. betty: joining me now, tom giles. is it really only a few advertisers? tom: she said a very few advertisers. we think it is notable she even called that out. up to now facebook has said and been clear, one executive after another, we do not see a material impact from the delete facebook campaign. this is where people having courage to each other to delete facebook, i am getting off the platform, i do not trust them. we have seen high profile people
on twitter talking about it. facebook so far has said we have not seen a lot of material impact. today, talked to sheryl it is the first time in my mind she or zuckerberg has talked about the advertiser impact. the fact they are seeing people who are pausing in their spending, it is notable. she said the number is very small. we have to take over at face value. we will know more in a few weeks when they report first-quarter earnings. we will see if things meet up with traders and analyst expectations. certainly up to now we have to take them at face value when they say no more material impact from user defections and advertiser spending. boss mark zuckerberg due to appear before congress next week.
what does she say in terms of his performance, if he handled it well? what do we expect from this hearing? she when we asked sheryl, said he wants to answer people's question, use this as a platform for talking about the changes facebook is making, the ways they are trying to be more transparent with users, about how are our data is used, how it is shared, and communicate the changes they are making around that. i think the hearings we are going to see on the hill next week will be more than just this isolated incident whereby cambridge analytica misappropriated user data from this research. bigger it will be a much picture set of questions for facebook and it will strike right at the heart of their business model, which is, how do they use all that data we put out there, all those photos, that information we share with our friends, with groups, how
are they using it and how are they using it to make money? i think that is the questions lawmakers will strike at the heart of their fundamental business model. haidi: some real existential questions being asked. tom giles, our bloomberg technology executive editor on the latest with facebook. samsung, going to run through those first earnings results. this is bloomberg. ♪
♪ haidi: we are counting down to asia's first major market open this morning. korean markets coming online as we watch reaction in shares of samsung electronics, the company posted a better-than-expected operating profit of $16.7 billion last quarter. could possibly get a listing in that share price, which is
welcome news, given we are seeing a bearish open to asia. joining us, the president of tech analysis research. we keep waiting for the shoe to drop when it comes to samsung profitability and when we will see a drop. pretty impressive numbers again. >> it really is. what we're seeing, the semiconductor business, the business a lot of people do not know about. d-ramsemiconductors and in particular, used in pc's and other devices. it continues to be strong. macron talks about strong industry growth for d-ram. a lot of that is being driven by servers, data center call servers, the big guys doing these big servers, using a lot of memory, a lot of d-ram, and that is very profitable for samsung. profity it is a 70%
margin. it is a great business for them, they can control supply to a certain degree. that is why we see a jump in profitability. haidi: chips could potentially be front and center in this trade tousle over technology. do you see potential headwinds for the sector? >> not necessarily on this particular sector. there are other components of samsung's business that could see that. but i think d-ram and the memory they make for other storage will probably be fine. i do not think we will see a major blowback for that on that particular component. there are only a few players that can make these huge investments. samsung has been investing in this decades, literally. they are reaping the benefits of that now. haidi: what parts of the
business could potentially come under negative pressure? i think the bigger macro issue we have to think about in terms of samsung is going to be the branded phone business, the worldwide phone business -- smartphone business has been challenged. samsung will suffer from that. samsung is a big supplier of displays for smartphones as well. if we see issues, it will be on the supply -- display side and branded phone side. what about apple? apple is a huge customer of samsung for their displays. they have been rumored to be doing their own displays. the reality is, if apple gets those displays manufactured -- first of all, it will be a couple years. second of all, it will be for apple watch and smaller devices. it will be many years before we see an impact on samsung display for smartphones. betty: it certainly seems like
it would be several years out, but it is still a threat to samsung. should they be preparing for that now? bob: absolutely. they have got to be aware of that and i am sure they are. the good news is, we look across the tech market in general, the big markets -- first it was pc's, then smartphones, tablets, all of those have started to pull back. there is a new reality in the market. automobiles are a much bigger user of semiconductors and displays and other components. devices, medical devices, all these new areas are smaller, the collectively, represent a great opportunity. what we will see is a shift for samsung away from that. samsung is growing their business on the network infrastructure side of the house. not very well known, but they can be with the nokias and
erikssons and huaweis of the world. they have an opportunity to become a supplier for the major telecom networks. betty: certainly that could be a sea change for samsung. what about the areas they can make up for in the smartphone market with that decline? smart devices, smaller screens? you have automotive, what about those areas? bob: i think automotive will be important for samsung. if you look at modern cars, there are huge displays becoming the standard. tesla started that and now everyone is doing large displays. samsung is well-positioned to be offering that. these new devices are doing more computing, therefore they need more d-ram, more storage. that is important for the data storage business. that is important for iot.
five gnsee them do more five g networks as well. ask -- we willto see them do more 5g and 5g networks as well. betty: we have to ask how global protectionism affects samsung, will they be pricing that into samsung? bob: it is not entirely clear how that will play out. there are a few instances it could benefit samsung in terms of opening up opportunities for them in places that are not as as i said, the network telecom stuff versus a huawei, for example. if we see these tariffs on devices using a lot of samsung components, which many do, that is on the negative side. to the honest, there are probably a few more of those
then things on the positive side. betty: thank you. let's get a quick check of the latest business flash headlines. delta says a cyber attack on a contractor has potentially exposed payment data of several hundred thousand customers. a breach in late september allowed unauthorized access to names, addresses and payment information. the vendor provides online chat services to delta. they notified them last week. delta says they cannot say how many customers had data stolen. haidi: indian budget carrier indigo says it does not have the capability to buy and turnaround air india. they had expressed interest in acquiring their international it now sayshowever, that option is not available under the terms of the government's plan. betty: jetblue is offering fire patentnder
whitney, offering engines to power new airbus planes. it means jetblue will take turbofans for its new fleet, in a deal valued at $2 billion. entered service two years ago, but have been plagued by durability issues and delivery delays. haidi: reaction to this -- we are looking at another $100 billion in tariffs on china. the reaction from beijing has been swift. we have heard this before, the tariff proposals violate international trade rules. we are hearing reaction from japan, they are watching the tariffs and china's reaction very closely. betty: the chinese markets are closed, but we will be watching what comes out, more statements
i can tell you about... streaming the most free tv shows and movies on the go. yeah, and... xfinity internet. it's so fast! and you can save by... by getting up to 5 mobile lines included. whoa, you're good. i'm just getting started. ♪ simple. easy. awesome. come see how you could save $400 or more a year with xfinity mobile. plus ask how to keep your current phone. visit your local xfinity store today.
yvonne: president trump turns up the heat on china. he said america deserves better and could order another $100 billion of new tariffs. betty: while the yen strengthened on the president's threat, investors hoping for talks. haidi: samsung leading the street in the first quarter. $15 billion on memory chips and drives. betty: facebook admitting it has been slow on security with user data access. we hear from the coo, sheryl
sanford. this is the second hour of daybreak asia, i'm betty liu. haidi: i'm haidi lun in sydney. we have heard so many analysts describing the high-level game of chicken. i don't think investors are feeling good. they are not thinking this is a fun game. getting these lines, the state media representing the voice of beijing. china vowing to defend its interests against u.s. actions, reiterating the tariffs proposals internet -- violate international trade rules. haidi: we will wait to see if there is harsher language coming from china. in the meantime, we saw futures, tanked.&p, and nasdaq we will watch those futures. let's get to the first word news
with ramy inocencio. ramy: samsung, the company reported better profits as robust demand for the memory chips outweighed concerned about this play -- displaced devices. apple coming in more than one billion over forecast. it includes sale on the galaxy s nine smartphone and eases worry about samsung's business. president trump is pulling back from his call at a nafta deal, saying something may happen "fairly soon." he previously wanted and outlined in agreement so he and the leaders of canada and mexico could make the announcement at the summit of america's and peru next week. he has told staff to "take it easy." president trump renewed his attack on amazon, saying he is taking a serious look at what he calls an uneven playing field.
he expects their tax situation to be investigated,. and there could be a decision from. the supreme court. the u.s. -- the president claims the u.s. postal service loses out, but it is said that is not the case, and it makes money. apple boss tim cook will be questioned by qualcomm's lawyers inmate june. this is part of the legal battle with the company. again in january, when apple filed a $1 billion suit, accusing qualcomm of overcharging for patent licenses. they accuse apple of lined to regulators. regulators. saudi arabia has apparently released the price of its crude in asia, sending it to the highest in almost three years. aramco lifted the official price by $.10 a barrel, taking it to
$1.20. the survey last week said refiners and traders were expecting a $.60 a barrel disc priest -- decreased. global news 24 hours a day powered by over 2700 journalists and analysts in over 120 countries. i'm ramy inocencio, this is bloomberg. been a fraught set up going into the open of the markets in asia. let's take a look at how we are faring. we are getting a mixed start to the session. we take a look at what's happening in japanese markets. the nikkei is adding one third of a percent. technology and telco stocks. drag,g looks to be the which is losing about 6/10 of a percent. very much in the spotlight after its first-quarter numbers. we have a focus of what's going on, the safe haven plays. this might spook foreign funds.
ofy turned to net buyers japanese equities for the first time in 12 weeks, toward the end of march. we are seeing the s&p 600 open flat, let's take a look at what's happening with samsung. chipse rallying memory helping them. an antidoteovided to the stock decline since hitting a record high in december. about $39 says a lot million hitting the peak in november. an outlet things to the tight supply-demand condition. i want to take a big picture view on samsung. the trade ministry announced its new trade policy to soft and the potential collateral damage to its own exporters as the u.s.
and china go toe to toe on trade. one example is korea's deepening ties with vietnam. korea has become the top investor in the economy. you can see the trade flow shipments to vietnam, it is expected to overtake the u.s.'s place of number one export by 2020. about one third of korean shipments are segment -- semiconductors and displays. when you look at china's ,elationship with south korea it makes china more attractive as a production base. we see korea attesting to diversify. we really saw president moon and his administration attempt to do so. haidi: sophie on the markets. about,ere just talking and looking through the last few hours, when it seemed trade tensions were easy, that he is turning up. president trump ordering a representative to consider ramy:
on $100 billion --tariffs on $100 billion of chinese imports. ofare trying to make sense where we are in this trade spat. let's start with you, catherine. let's say we can never discount donald trump' ability to surprise uss. from everything we have heard, from peter navarro, his point man saying we will have high-level talks with china, larry kudlow saint we are not kind to punish anyone. donald trump is trying to lead toward a fair trade agreement that the world supports. to have him come out with another $100 billion saying it is in light of china's unfair retaliation. i think it is very important and interesting to remember this is
section 301 of the trade act of 1974. 1995 when the wto was set up, the president used it a lot. donald trump is it using this tool. ofmaximizes his leverage china, because he doesn't have to take it to the wto. this is something the u.s. has , or to go ahead and punish try to get another country to move on its tariffs. what is interesting is it doesn't just single out trade barriers, or unfair trade practices broadly, it looks specifically at a country's denial of adequate or effective protection of intellectual property rights. 'sat is one of the trump team big complaints. the eu and japan joined the u.s. complaint to the wto, particularly on intellectual property. they feel they have vested interests that. very surprising,
$100 billion is a lot. we will see. betty: we saw the chinese response to the first $50 billion tariffs and their own matching that amount. are we likely to see retaliation? steve: we are getting comments from the news agency saying this latest proposal, $100 billion in violatesl tariffs, international trade rules. they are also saying china is bound to defend its own interests. come morealso strident recently following the first-round of tariffs the united states announced. then the response on wednesday from china. the people's daily was particularly strident, as well as, the global times which tends to be more hawkish. people said china showed its
sword to the united states trade actions, and said the united states could learn a painful lesson. one of the best comments i read about this back and forth is it is escalating, but one person said what you are seeing is a context of narratives. anda is painting xi jinping china as a champion of free trade in light of donald trump being the protectionist bully. these are contests of narratives. china, with its blooming debt problem and internal issues, they do not want to see a global trade war with the united states. betty: we have been talking about this as an highly article and economic battle. . are we talking about the real economic ramifications? particularly when it comes to
implications from policymakers? kathleen: this becomes a global trade war. as i mentioned yesterday, the dow's fed study says a trade war could cut u.s. gdp. they are not just saying the u.s. and china going back and forth, they are talking about the eu and latin american countries jumping in. you have so much going on that the economy is brought down. i wonder if this is going to move to a point -- i think this is where the u.s. is trying to point it. everybody is looking at the question of intellectual property and the theft of it. xi jinping said we have to improve this. i believe the chinese commerce secretary said they need to do more on this. the delicate thing is trying to deal with the chinese to get them to say we are going to move ahead. theof the reasons why is
chinese have talked for a long time about moving ahead, and doing something about the intellectual property. if the whole world is looking and more countries are agreeing, doesn't china have to respond? haidi: absolutely. certainly in the statement from the president, he is still open to negotiation. what do you think are the discussions going on? what do you think they are going on? how do you think we may end up? steve: there are no form of official -- formal official talks. peter navarro and others have suggested they will be talking with the chinese. nothing official has been announced. there is a bit of a battle of narratives. what sheith kathleen, has to say about the battle of narratives over high-tech trade japan and the eu say they want atjoin the u.s. complaints
the wto. xi jinping says through state media that he wishes all members againstto to lock arms the straight actions by the united states against china. it will be very interesting to see where the narrative falls on the international community, beyond a bilateral tip between the united states and china. haidi: i don't think we can underscore it enough, 60 days public comment paulperiod in the united states. i believe there is at least a 30 day comment period. that is the structural window for plenty of time to get negotiations going. feedback,d public let's leave it there. kathleen hays and stephen engle. we are going to continue to talk about trade. you can go to the bloomberg for
more on this. we are getting live commentary, reaction, analysis from bloomberg's expert editors on top of the day. one thing, the reaction to the proposed $100 billion of tariffs . still ahead, japanese convenience store operators seeing a boost from the u.s. expansion. the outlook for japanese retailers later this hour. betty: the fed is closely watching the president's trades. with china what does it mean for race and inflation -- rates and inflation? this is bloomberg. ♪
going into the open of major markets the drop in dollar-yen, as well. picture.eing a flat modest gains, a mixed picture across asia. hong kong coming on after the holidays. taiwan and china remaining closed. let's get some more market analysis of what to make of president trump's ratcheting up of trade talks. trade tensions threatening an additional $100 billion of tariffs on chinese goods. it has been an eventful morning. this most recent announcement is clearly going to keep markets on the boil. a lot of uncertainties. we can take a step back. we have seen this pattern before. this big pronouncement by the president. there are a lot of negotiations taken place.
we have seen carveouts and exemptions. it was only yesterday we had livery kudlow and the press secretary talking about hosing down the absolute concerns about global growth and the big impact. if the u.s. is trying to cut trade deficit, it probably won't succeed in meaningful terms. they are clearly trying to get a better balance in terms of trade, going forward. is really whatn president trump's main negotiating tool is at the moment. betty: how do you position yourself as an investor? the sideline, do you hold more cash? do you go all in and do evaluations for these companies? don't think it is a timeframe at the state. see there starting to u.s. valuation starting to improve and look more attractive.
holding high levels of cash is smart in this current volatility. time ofedibly long complacency is now over. we are going to have to get used to high levels of volatility. the always present opportunity. where do we want to be positioned? we are at this stage more towards europe then the u.s.. we probably have a preference to europe. that is to provide the opportunities we think are good for investors at this time. betty: it is interesting you mentioned europe. evaluations here have gone down so much. you mentioned the markets are more attractive. is there a point where you say have gone down so much, the s&p is so cheap, that might draw your attention more than two europe? europe?to
>> it is probably not until we see this trade situation start to settle down. is biggest risk for markets if it escalates paid we are at that point right now where there is going to be further retaliation by china. if you start seeing mexico coming into this, then that becomes more of a war and global growth in the u.s.. it is premature to look every week -- valuations alone. it will carry criteria. it will put money in particularly where we have seen the tech fest are the tech sector go up. the big tech things are not going away anytime soon. betty: this may be a brief lull. i want to talk about interest rates. we are watching the jobs report tomorrow and how that might affect the fed. jamie dimon referenced interest
rates. i want to pull up a quote from his letter where he said "well in the past, interest rates have been lowers and for longer people have expected, they may go higher and faster than people expect." would you agree with that? contextpends on the around that. at this point in time, we think the fed is going to protect the amount of work. i think they have had a really solid recovery. is being more synchronized around the component, as well. it has to be around what's happening on the trade site. investigation, it may force the fed to raise rates faster than we are currently anticipating. import inflation is going to rise. we are a long way from that at this point in time. i think it is interesting that it is starting to be talked
about. the biggest risk is the central banks getting behind the curve on inflation. betty: i want to pull up this chart. frontier markets have done better than emerging markets. even when you take into account volatility. is it interesting you are seeing these asset classes perform almost like haven? >> even more interesting, with the prospect of trade wars, where you have emerging markets being leveraged to global trade. it is interesting to see that recovery. we have seen a pickup in global trade. we saw growth around 4.5%. now it is heading towards 5.5%. we are starting to see a pickup in momentum. that is reflective of what's going on in the synchronized counter around the world. it is no surprise to see emerging markets start to pick up. we would hate to see it crimped.
betty: i'm betty liu in new york. let's get a look at the latest headlines. japanese convenience store operator said profit will increase 6% as it looks to draw in more revenue amid expanded u.s. presence. they expect operating profits to billion.3.9 the company leads to purchase of more than 1000 stores next january. it is also promising a new smart phone payment app next year. retail, otherust industries such as autos and the financial sector are hugely affected by the wave of i.t. demand -- development. we feel we should make digital strategy part of our core approach. betty: we are going to talk about the results later this hour. by an operator for a close analysis on the japanese retail sector. haidi: deutsche bank is set to
name met zane as a potential successor. there is no formal mandate for recruiters. they have singled him out because of his credentials. u.s.efers to remain in the last week to discuss possible candidates. they struggle to restore birth. betty: jpmorgan boss jamie dimon on a mission to bust the myth of bureaucracy. ising been told bureaucracy a necessity. he said it is a disease the drives out good people and slows down vision making. it closes innovation and is a petri dish of bad politics. more room tod streamline decision-making. the square is set to be under pressure with many institutional investors asking to redeem their money.
♪ betty: it is 830 in the morning in singapore. we are about half hour away from the open of trading. we had earlier gains swinging from losses on japanese markets. that has swung back to a flat line. it is going to be a volatility filled day. i'm haidi do in sydney. betty: volatility seems to be the name of the game, i'm betty liu in new york. let's get to the first word news with ramy inocencio. ramy: first president trump, he has thrown fuel on the trade fire threatening additional, tariffs on $100 billion of chinese imports. he says the action is in light
of what he calls china's unfair retaliation to the initial levees on $50 billion of goods. u.s. stock futures fell on the announcement. chinese state media say the country will defend its interests against u.s. actions. southeast asia and malaysia has suspended the party of their former prime minister ahead of an expected election announcement later today. it is seen as weakening his challenge to current prime minister with a vote possibly coming within the next two months. the suspension comes after his party fell to suit -- provide information to election authorities. it is not known with information was. a brazilian judge ordered the arrest of former president lula da silva one day after the supreme court rejected his appeal against imprisonment. lula has been convicted of corruption and sentenced to 11 years. he argued he should not be jailed until he explored every
legal appeal. the supreme court denied him that. he is banned from. october's presidential election, although he is the clear favorite. failedmer head of bitcoin exchange says he is no longer a believer. he told reddit the technology is here to stay, but bitcoin may have trouble evolving and keeping up. he doesn't own any bitcoin and thinks its main rival is too intrepid for serious use. they filed for bankruptcy after thousands of bitcoins went missing. global news 24 hours a day powered by over 2700 journalists and analysts in over 120 countries. i'm ramy inocencio, this is bloomberg. betty: time to see how the asian markets are shaping up this morning. here's sophie kamaruddin with more. stocks are trading near special lows. the treasury's are rising across
the curve. yield has fallen. futures are falling over 1%. the yen is catching up, treading for the seventh spot. watch for the one await handle should that u.s. jobs report come in strong. we have the korean won slipping against the greenback. stocks, 6/10 at percent of samsung is the biggest drag on the index. in raising225 is most of its earlier gain, trading flat. we are still six to eight weeks away from the first china tariffs from the u.s. becoming a reality. trump indicating the u.s. is still willing to have trade talks with beijing. it could be read as more blustery around then. right now, we're seeing more caution in markets. we have chipmakers leading the drop.
samsung slipping following its earnings update. we did have preliminary numbers beating estimates that the stock is set for a third weekly drop. electronics set for a third day of gains after its results. in tokyo, that is timing -- climbing for a third session. 711 profits will grow amid its overseas push. the move to expand its footprint seem to be paying off. a quick word on blue sky alternative, falling for a fifth straight day. it lost about half of its market value after short seller published its report on april -- march 20. the stock is still under pressure. haidi: aussie and finance minister meet this week. that withis traits
the u.s. and china has been front of mind. what have you been hearing? this traits that really dominating the talks at the fourth central bank governors meeting in singapore. a lot of the talk commenting on how these natives can try to bolster their own mystic growth to push in the impact of any potential tariffs. there has been a lot of disappointment. we spoke to the finance minister of indonesia, who says the wto should intervene in any trade differences, rather than slapping broad-based tariffs. between the u.s. and china, the world bank managing director was more sanguine, still six to eight weeks away from the tariffs potentially being put on. there could still be a lot of negotiations. he thinks negotiations will prevail.
haslinda amin had an interview with the central bank governor. he said the impact of the trade skirmishes to as you nations has been minimal, but he has been concerned if the trade spat from this morning, it could cause a very large disruption. it is definitely something we have to monitor closely. the direct impact so far has been quite small. if you look at the ties to products that the u.s. has come out with its new tariffs. a major exporter and account for a small share of total exports. possibly aviation .
betty: the central bank governor also address concerns his country could be at risk of being labeled a currency manipulator, saying it is not the case. in around one hour, finance ministers will gather in singapore. they will be joined by the central bank governor counterparts and address the media later this evening. a lot of focus on the potential tariffs, how that will impact the global economic growth. perhaps mean more fortuitous the chinese markets have been out of action trying to cushion any impact from panic. betty: we will let the news digest before anything happens. juliette saly in singapore. hours, the four social network has said the number of users -- facebook has said the number of users impacted the cambridge analytica scandal could be as high as 87 million people. that is the number of profiles
of all of facebook's 2 billion users that could have been scraped. we spoke with coo sheryl sandberg with her thoughts. >> i feel deeply personally responsible. there are real mistakes that we made. when you take a step back and think about what happened, for a long time we were focused on building social experiences. a lot of good happened the cousin of them. when we saw problems, we would shut down that problem. the specific case of the sharing that happened is one that was shut down in 2015. what we didn't do until recently, and what we're doing now, is take a broader view, looking to be more restrictive in ways they could have been these deuced -- data could have been misused. we did not build products fast enough. we had 10,000 people working in security. at the end of this year, we were more than doubled to 20,000.
we are massively investing in smart technology. we are doing all of this to make sure we get to a place where we can proactively protect people's data. >> facebook has constructed a district -- business model that leverages users share with facebook. you are the architect. assuming the model will evolve, how will that impact the bottom line? how will it impact profitability? > we have never run this company for short-term gains, we have never run it to maximize profits. we run it for the long-term health of our community and business. we announced two quarters ago that these investments are big and will impact profitability. that is ok with us, because it is the right thing to do. we will update at the next quarter. -- youtalk about mentioned a few advertisers have paused their funding, how big is it? >> it is a few advertisers.
what matters is not how big it is. what matters is the questions they are asking. advertisers are people who use facebook, so are investors. everybody wants to know the same thing, are you protecting people's data? the advertisers and people who use facebook also want to know the good things will continue. those are really important. emily: mark has been asked if he is the right person to lead facebook, do you believe he is? >he said he is, do you agree? >> i believe deeply in mark. he had a vision for what social services and social sharing could be. that vision remains important. us,, along with all of takes full responsibility for what's happening. we are making an important shift. we are going to keep building social products because sharing is so important to people all over the world. we are going to be much more proactive. i will not sit here and say we won't find more problems.
we are going to continue to find problems, we are continuing to shut down situations when we find them. this is a forever thing. security is an arms race. we are signed up for it not just now, on an ongoing basis. with theily chang facebook coo's sheryl sandberg. coming up, the owner of 7-eleven has been boosting efforts to overall operations in japan, but also expanding overseas. that effort may be paying off. full analysis next. this is bloomberg. ♪
the bloomberg charts. ramy: the number that came out one.5.6 trillion we were expecting the consensus of 14.5 trillion. this is more than double the first quarter of last year. in part, some of the good stuff is right behind me. the galaxy s nine, which came out earlier than expected, giving lift towards those numbers. i want you to go to the gt the library. this is samsung's net profit. in the fourth quarter, they now in at 12 trillion won, we are looking at another record set of profits if the number stays true when the company reports and final numbers. this is the overall view for samsung. one of the other things that was a weight was this, the iphone x.
we know all of the reports that were happening because of the sluggish demand. the oled sales. samsung supplies apple' samsung -- smartphones brings. smartphones greens. this is an assured electronics dashboard for we are is backing it to fall in the first -- we are expecting it to fall in the first quarter. we didn't get the number for this during the preliminary order. because of what is happening with the iphone sales, we are expecting a drag. one other thing i want to talk about is this. this is memory chips. rs.s has been going gangbuste
the fact that we are getting further into the internet of things, more high-tech cars, devices, artificial intelligence, we are only going to see further demand for these memory chips. once more into the bloomberg terminal, i want to show you the prices. up, up, up. from 2016 to 2017. the forecast looking further ahead, it is expected to slow down in terms of growth. it is still not going to fall, according to bloomberg intelligence. the takeaway is for the most part, samsung is doing very well. record profits when the company reports on april 26. one interesting thing, we are seeing samsung's shares down as much as 2%. they are paring the losses. we have those lines about the new u.s. china trade tariffs
which are heating folks across the board. betty: remy inocencio with the latest. let's talk about japanese retailers, japanese convenience store operator say employer profit will increase 6% as it looks to draw in more revenue from an expanded u.s. presence. let's get more analysis from tokyo, we are joined by a partner at managing consulting form at tyranny. before we get talking about it specifically, i want to get your quick take on some of the numbers we got out this morning on japan/we had household spending coming in about 1/10 of 1%. we knew february might be slow. labor cash earnings were a bit higher at one point. what does that tell you about the japanese consumer? japanese --betty: what do
these numbers tell you about the japanese consumer? think japanese consumer sentiment is upbeat. the unemployment rate and all of these stats show the economy is in a good state. the numbers suggest people are quite happy. the wage is stagnant, but that is not going to negatively impact the feeling. betty: how are these convenience stores best positioned? the convenience stores are such an integral part of consumer's life. . consumer's life.
>> in my mind, aging population is not all negative. vonnie: what kind of -- betty: what kind of grade would you give them over the past two years? >> i would actually give them an a. two years ago was unexpected. it was almost pushed back into the position. purchases were pretty much ousted by the ward. it was a very troubled beginning for his tenure.
however, he really held his rope tightly. where he is strongest, and which is the convenient store chain operation he managed well. path --y helped the past fiscal years earnings. he also made progress in the restructuring of other elements, which is the department stores. all in all, if you look at the giant, of this retail you would have to give them a solid grade. betty: thank you so much for joining us. we are going to have to leave it there. talking about convenience store earnings. don't forget our interactive tv function tv . you can watch us live, catch up on interviews, and dive into any of the securities on the bloomberg function that we talk about. join in the conversation and send us instant messages. this is for bloomberg subscribers.
the breach in late december -- september authorized access to names, addresses, and payment information. the vendor provides online services to delta and notified the carrier and other clients last week. delta can say how many cover simmers have -- customers have gotten data stolen. buyoesn't have ability to and turnaround air india. indigo had expressed interest in acquiring the alliance international operations, as well as the air low-cost arm. it now says that option is not available under the terms of the government's plan for the debt laden carrier. restedjetblue offering to under fire pat whitney, ordering an extra 97 engines to power new airbus planes. it means jetblue will now take 183 turbofans for its fleet in a deal valued at around $2 billion before discounts. the latest turbo fan engine
entered service two years ago, but has been plagued by issues and delivery delays. betty: before we hand over to bloomberg markets: asia, a quick look at how the markets are trading. they are spooked by what we heard from president trump and the retaliation to china's $50 billion in import tariffs. the nikkei is just about steady. red, downso in the 3/10 of 1%. not as bad as we may have expected going into asian trade. let's get a quick check of asian futures. the taiwanese market is closed, but the singapore markets are still open, as well as malaysia. according to our higher open, certainly lower in asia. haidi: the markets are closed for another day. it is struggling as investors try to work out what
trump says. it is actually -- is it actually what he is going to do? perhaps an additional $100 billion worth of tariffs on chinese goods. what is beijing's response going to be? risk whenabout this it comes to u.s. when it comes to u.s. futures, or the dow jones many futures down by 1.5%. we were close to 400 points before off of the flows. s&p futures up. the dollar-yen off of the lows on the day. let's take a look at what's coming up over the next few hours. risk, still trade. let's look at what we have heard upping the ante with the trade tariffs. it is still not quite a war. a professor is going to be joining us, giving us his views as to where it goes next and how china might respond should it
come to fruition this latest $100 billion worth of tariffs taking place on chinese goods by the u.s.. we will have a look at that in about one hour. we also have -- are looking at semiconductors in samsung. is it enough? we have seen it languish to some extent. trouble in strike to india's banking institutions. joining us is a senior vice president and senior analyst. what sort of shape are these banks actually in? what do they perform like? that is bloomberg markets continuing for the next three hours. ♪