tv Bloomberg Daybreak Asia Bloomberg May 14, 2018 7:00pm-9:00pm EDT
yvonne: 7:00 a.m. here in hong ong. i'm yvonne man. welcome. rkets face a mix start after wall street closed little change. treasury yield topping 3% again. 200 mainland mpanies selected to join industries. just app after 7:00 p.m. in new york on this monday. betty liu. china looks again at qualcomm's .id for
. louis's jim bull lard is worried about the economy. betty: eon -- yvonne, it was central banks that pushed the rkets today and starting out with the comment coming out on francis ville roadway, who was talking about the effort c.b. and the end of bond-buying program and noted to market par 'tis pants hikes were going to follow in months, quarters, ertainly not in years and that kind of speek spooked the narkts. -- markets a bit. show a chart of
synchronized arraignment rises. yields on pretty much all the developed markets, government debt is on the rise. see the -- with the s., germ any, as well as the u.k. it's per septemberable now and we're in this synchronization when it copts remains. yvonne: right. surprise given that we were hearing this was going to happen in the next or so. the german markets remains very low at this point and is europeo ess in the area transitory? hose are key questions as well but programs it took a bit of steel out of the equity market overnight. belty: it did. and how we closed today, the dow ending up about 68 points
t as you can see here on the s&p and nasdaq closing pretty unchanged. yvonne: in arba as well, pretty mixed at this point. see the dollar ruling its by willter the comments burp ross about the gap between trailed remains wild. the key numbers, leading the 8% to 10 pocket. and trading in australia about an hour away. the moment.anged at still holding on to four-month highs. oyed but this route in the a.n. irby five ken high basis points. lso coming down to the open in japan and korea.
checking futures in japan, -- looks like we could be seeing some modest gains in tokyo. lot of interesting eco data. sale then retail production. trailed dad ia's the -- datza and also exports from india. the data watch on front. in the meantime, jessica summers new york. om jessica: we're getting mixed senior officials at the fed. steasmed path of graham rate hikes. st. louis colleague james is warning that that strategy could cause problems or the u.s. economy. as they continue to debate the himbings e highs -- after three more are expected year.the end of the
e trump administration's fed pick number three said that if keyon firmed by the senate, he support policies. arida is a global strage strategic advisors at pimco. senate panel ce a later tuesday. violent clashes between the palestinian nd rotesters. 55 were killed. the protest came as the u.s. embassy from tell lesm. to veers the war crimes case will be israel by the palestinians. has s. federal scourlt teams. ates to bet on matter could begin in a
of weeks. are $150 billion a year place is on illegal sports belts. lobal news 24 hours a day on air and ticktock on twitter, 2,700 by more that be journalists and analysts in more countries. this is bloomberg. so much.ess, thank you the announcements that 224 chinese company's a shares will included in its benchmarks from june. me of the names familiar and others not, right? >> yeah, some of the big banks, sharpgse. alley babba and others have been on global indexes. you're the first time seeing a lot of the mainstream included in nies the msci emerging markets index. followed by trillions of dollars in tracking others ension funds and
so that has been the cat list of buying amount going into edition of the shares and it will likely continue. let's look at some of the companies added and these are weight, icbc.rket construction bank and china. 0.7% of the bout index but it could grow to as 14% and what's significant here is that it really takes china global and for a long time a lot of hanltvnltsd ally had access to china shares for a d also been asons an as somewhat reluctant. thatina has grown at twice of the u.s., the appetites to be a part of it has grown and china on theutting
map through this index does. hong kong york and stings, alley babba and 10 scent have long been there but expected, according to citigroup to bring billions of investments into china as a result. just to take us through the u.s. session. we talked about the bond selloff but it was the trade tensions we saw, the easing of those with boost the teched shares. >> it did. ech and telecom got a bit of a boost. they eased off a bit at the end of the day. stronger, that made gold weaker. of 0-year mily: at 3%. telecom is highly represented.
the top. at kaboom lost about 1 third of its value. the stock bid up in a very big way. any announced there would be after the market call on this internal probe and after the said they did not expect to it adversely affect the line.y's bottom the supreme court has said that companies or states can now a lot of sports teams and caesars is going to ring betting nationwide. qualcomm also getting a boost as chinese regulators take another merger deal in the works. equal come trading about 3.5 times value. it had a bit of a roller coaster upswing now back on the the ey're looking amount
requalifying of conductors so trump easing the way for andcomm and many other tech telecom shares with his latest bit of rhetoric. ack towel. with : the u.s. and china a desire to avoid a costly trade openeder president trump a lifeline to z.t. effort. take a listen. z.t.e. did do some inappropriate things. hey've admitted to that. the question is their one native remedies to the that we had originally put forward. area we'll be exploring very, very promptly. yvonne: wilbur ross there. economic advisor is on his way to washington for talks. editor in ngress
d.c. joe, we've seen the fallout from u-turn crats about this we saw from the president's eet on sunday about z.t. effort. what was behind the president's terest in saving the company phau? >> there was quite a bit of congress atching in after -- congress after the president's tweets and the shock about his regard or concern jobs in china was really bipartisan. there were a number of democratss as well as who excessed -- expressed surgeon -- concern about that. of a ered a bit explanation later this afternoon, on monday afternoon that well, z.t.e. uses quite a few u.s. companies supply parts and this was part of the larger negotiations with china over trailed practices. just last month that the commerce department had cut violating or sanctions regarding the trade but iran and north korea
this is sort of still unclear exactly what it is that the u.s. other than perhaps look for some other remedies beyond zrment t.e. off completely from u.s. supplies. but what are some of the z. rnative ways to punish t.e. for violating rules? hasn't been laid out. they could limit certain times splifles, electronic parts, events. there was also a bit of concern security issues that company and the their new -- influence in the the and possibly opening way to some cyberespionage. has cut off on using some of their equipment nd phones and because of that, that could programs be re instated with some guarantees right now that is still
subject to discussions between e commerce, treasury departments and the chinese officials with these talks starting in tuesday. >> what does in mean then for a trade war?of >> although, as you mentioned, the commerce secretary said the between the two countries remains wild but president trump tweets was be cool and his statements about z.t. reacted to favorably into these talks starting on tuesday and there re, as you also mentioned, the choigs looking again at the qualcomm bid so there are at going on and ks there is some movement. down to theng to be details, what the u.s. is illing to give up to china and what china is willing to do to address the concerns of the u.s. property.
the administration still has on impose tariffs as billion worth of goods from china. and hasn't been resolved the commerce secretary wants to keep that separate from the z.t. about what to do with effort. betty: thank you, joe. top story in ur ."day's edition of "daybrick available on mobile and the loomberg anywhere app. still ahead, that may be a delay ebreham.lease of trade tensions and violence in the middle east. this is bloomberg. ♪
>> we are counting down to market opening this morning. it was a pretty lackluster stocks on wall street. .1. re hong kong.man in betty: and i'm betty liu in new york. outlook for the rising tensions in the middle east and . tween the u.s. and china which seemed to ease a bit today. c.e.o. matt toms joining us. fore we get into some of the geopolitical tensions roiling the market. what's also roiling the equity is this eyes -- rise in yields and i want to points to chart we have here.
how yields, an see government debts, whether in u.k. or even in japan, surprisingly, and of course here in the u.s., they're going up and that is -- hat's some synchronization happening that we hadn't seen before. seems to be rallying the markets a bit as we saw today. what do you make of that? synchronized to the up side and we think the g part to play in this. dollar strength ending that hannel lower basically puts in place a requirements for global elds to go up to lock up the up. structure to move otherwise the dollar gets too rong and you have a negative looping into other markets. e think the dollar was the key and obviously the statements out of europe today where the effort
c.b. once again hinted that programs they can sell and not just buy. e.'ll se we've seen that statement before. betty: why do you think that from villaroy today took the markets by surprise? >> the markets had been expecting the e.c.b. to start balance sheet but the last comments started to that was at that and surprise for the markets. this puts the markets back into they were about two months about. the effort c.b. will eventually move but they're incredibly patient in doing so betty: despite what pickup in, the little people say h most would be shocking how low those yields had been. yvonne: that's the wildest we've
years. 28 do you think that could still wyden before it narrows? unfortunately, yes because we think the effort c.b. is going slowed.credibly by all accounts the fed will times to three more this year and programs one or two times next year. us a two-year in the u.s. up towards a 3% level. think we quite get there this year but it's likely that the front end of the german curve can keep up after a few months, they should catch up. do you think the ftness across the board is justified or programs temporary? a global ertainly growth trade that fueled the in 18 months to 24 months markets and real bullishness in
europe. think the flip side is going to become the concern. if you've had all this upside in flows and the positive and equity markets perform and still don't have rates higher, does increase the risk that the effort k.b. -- e.c.b. is in a tram. we think that the effort c.b. may be missing their window. to move quickly and it already may be too late. rates have a harder time moving up on the back end f the curve. yvonne: golden came out with a to t saying when it comes u.s. yield they think there could be more of a jump. is a time when the employment rate is at record lows they say hasn't lapped the vietnam and korean wars. they're saying we could just to by next year.
do you think that's overdone a bit? >> we do. the fed will push higher. however however, once you get second half of 2019, fed's response function is likely to change because rates we already be higher and think you act more slowly and ou'll be starting to look at the second half of 2019 when fiscal impulseis starts to roll out of the numbers that ultimately keeps 10-year rate contained in the u.s. a il we -- unless well see big influence come in. that's where we're looking to can go to 3 year a quarter. yvonne: it's interesting to see y officials talk about the inverted curve yield. bowler of the st. louis fed who says the fed
-- if they aggressively tighten their -- they're going to be responsible for inverting the yield curve. take that as an investor? stop elieve they'll short. it's nice to hear them be concerned about this. done this multiple times. debatesa dueling pianos going on in the ned with the news wires. to hink that once you get that 2.5% level, you get much dependent and that i e any they will before forcing the yield curve. viewers can view the chart just shown. catch up on analysis and save reference.for future this is bloomberg. ♪ omberg. ♪
>> this is "daybreak: asia." i'm betty liu in new york. yvonne: and i'm yvonne man in hong kong. nissan is under further pressure forecasting full-year operateling profit but missed estimates. see operating income this $4.9 billion. ell below the anticipated. sales in the u.s. have seen a dismal start this year. in the medium term, of course, we wants to aim at u.s. groupt in the market but in the short term this fiscal year, profitability to be improved. that is our largest salient point. about that.oubt >> tesla set up a new wholly shanghai.any in moving a step closer to giga ion at its first
u.s.ry outside the beijing announced last month foreign new allow energy vehicle makers to fully n factories as early as this year. >> portugal's biggest energy to ny is said to be ready reject an $11 billion takeover from china's company. st as investors expect the chinese utility to sweeten the deal. up next, mixed messages from the fed on the way forward -- uard on hikes. a look at what they're saying in a few moments. this is bloomberg. ♪
>> 7:30 a.m. tuesday in hong are 30 minutes away from asia's first major market open, betty. betty: 7:30 p.m. on monday, cool in new york where markets closed pretty much made at this point, losing a lot of steam with treasury yields on the rise. i'm betty liu in new york. i'm yvonne man: in hong kong. let's go to jessica summers. jessica: a list of 200 34 chinese a-shares to be added to the benchmark equity gauges for next month. the three largest additions to the emerging markets index will
, china construction bank, and petrochina. inclusions inspected -- expected to channel has a funds and the world's second-biggest equity market. the new edition begins with very low weighting. commerce secretary wilbur ross has again attacked china. it's a member of the world trade organization in name only. the joy -- and they enjoy the benefits but do not abide by the rules. he spoke including the treatment of phone makers. he says the u.s. has suffered from its free market stance. >> the u.s. is the most open and the most exploited market in the world. both china and europe eloquently espouse free-trade rhetoric. but in actual practice, we are far more protectionist than the united states.
>> they miss the may 17 deadline. the latest marker working the deal. we are told the three top negotiators are not scheduled to meet in person this week despite holding bilateral talks in recent days. sources say they may hold a conference call to assess the size of the toxin whether the high level is later this week. as saudi arabia opec the oil production was the least since more than a year ago. the cartel's biggest lender -- since reported the lowest january 2017. triggers now ask if they will be forced to raise output if a radiant exports are curtailed by u.s. sanctions. >> we have seen a withdrawal of the agreement and another negotiation agreement of some kind. it could lead to one million barrels a day off the markets
and that will affect things. there is a lot of uncertainty out there and i think it is more reflected in that and what is happening in venezuela. >> the turkish president has told bloomberg he is considering forming a cabinet of unelected politicians. turkey has been cracking down on opponents inside and outside parliament. in some failed coup in 2016. could ask a the idea of unelected government is another sign the country is moving away from democracy but everyone says there is precedent around the world. the 24th in june, the scene will be different. if you look at the united states , you can see that those in parliament do not take part in the cabinet. we may form a cabinet from those not from within parliament but outside parliament.
jessica: we have an exclusive interview as campaigning begins for next month's election. day, onews 24 hours a air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. to the we are going major market opens in the asia-pacific and let's get an update with david. we have the bond yields higher and a little mix of geopolitics. what are the conditions like? >> we're on this many deflation. we have the tenure yield at 3%, .61 on the german fall. different central-bank governing, and jessica was just talking about this for you. we have the sort of conditions that were under as we get underway this tuesday morning here. long story short, the saudi said
they can't the least oil since the curve started. and now it is 9 million barrels globally. in other words, that is a days work. but dollar is up and really uninspired. wei f.look at when you look at the prospects, i should also know that when you look, we did also enter over terrain here. that one. on >> improving a little bit now, that flow is heading the other way now. potentially be a positive single for chinese stocks as a way to get them more confirmation on which stocks are included. >> it is a big deal and becomes a bigger deal and you go up. the biggest additions to the
basket, there was no way on earth that it was going to be there. the weighting was 3.9% of emergency market index. that is total. 200 stocks within the weighting. stocks.ine those 200 if you ask me the bigger impact, earnings are out tomorrow. just have a look at it. we have it for you there on the top of the list. 5.2 percent, samsung, and 10 times bigger as well. it becomes a bigger deal when the waiting moves up. is not just the china story. >> thank you so much, we will leave it there with a check on those markets. messagesing some mixed .
the cleveland president is endorsing that cap of city gradual rate hikes. and president jim bullard also learning that such a strategy could cause problems for the u.s. economy. he is watching that yield curve. kathleen hays here with more. first, talk to us about what they said. >> what we have here to a certain extent is jim bullard against the consensus of the open market committee. a masters spoke first of the global center event in paris in later with francine on bloomberg television, she said that inflation, the goal of 2% has not been fully 2% inen though it touched march and she is concerned that may be some of the change here is temporary due to oil prices. nevertheless, she endorses that steady rate hike path. >> we will see some variation over time.
it does not necessarily mean that we will shoot it off here. i don't see that happening. i think it's going to be a gradual process. and therefore, the fed will stay on a gradual upper path of interest rate. >> even cautious and gradual is possibly too much for this u.s. economy. he gave a very important presentation on friday, repeated some of his points on monday today in new york. i will be speaking to him on wednesday to flesh this out. inflation expectations are still low in the fact of the matter is, the currency and policy rate is neutral. it is not heating up the economy are slowing it down. the yield curve is flat. disinvestment is still weak and it has more room to glow -- grow. fact, he's blaming the fed for a flattening yield curve and
that these things could invert even as soon as this autumn. he knows research is cautionary. a bad signal will cure what rich , the fed nominee says to the senate banking when he testifies . we'll will see if he gets that job. >> an interesting one to hear from him. eco-spotlight in focus, we have india and china. and a mixed bag here out of the china numbers today. >> india, the bond market. so much is going on. us take a look at bloomberg now. we'll add it to the chart library and what you can see here is the cpi accelerating quite a bit from 4.1 all the way to 4.6.
it is well above target in wholesale prices on the rise. argument for the the r.b.i. cutting the key rate. mixed.na, the data is >> it tells the whole story at once. >> you start with this lovely turquoise line. it is a very positive sign. assetked at fixed investment expected to slow down just a little bit and maybe that's not a worrisome sign. to 6.4%,posed to go up something to look forward to in december 2 good reading on china. are waiting for the minutes of the meeting, deputy governor mr. deval. an optimistic global today point economically that could help australia's economy. yvonne: all right, kathleen.
thank you for joining us from new york. to miss thent extensive interview with james bullard, at 1:30 a.m. on thursday. half past one at wednesday afternoon for east coasters. the daughter billionaire sumner -- it erected into open warfare, throwing a potential deal with viacom into doubt. and keep use drama up to speed right now. let's start with how this all escalated in the first place. cbs has thrown a grenade at this deal and what they said is they want to reissue a special dividend that will reduce the sharing of the controlling company. it will reduce the voting share from 80% to 17%. and with a worried about is they have decided that this deal doesn't make sense for them
under the terms proposed and they are worried that she might force them to do it anyway. that is why they've come out and shoot her for this. you have come out today and said they actually have no intention of replacing the board or forcing a deal that was not supported i both companies. >> how has she responded to this suit? >> she is not happy. so she has come out and said that they committed to a world governing process. these companies had already reached a provisional agreement on economic terms. this has come out of nowhere for them and we hear from our sources. she has come out and said that they think this would following the nia raising specific concerns about incidents of bullying and intimidation with relation to
one cbs director that she feels the hazed poorly towards her and they brought this up again last week. yvonne: what are the chances of a deal now? wax they have just jammed, but if you want some clues as to how this movie ends, have a look at what happened at viacom where she did change the board and did oust the ceo. take weeks, months, or even a little bit longer than that. this is a deal that she does want to do. >> ideals reporter on the latest on cbs. malaysia's new government faces early test in the community with former leader abraham expected to be released from jail this week. newly elected prime minister promised and is already warning of possible delays. let's get more from sophie kamaruddin.
sophie: betty, ahead of the elections, they telegraphed the timeline for the handover of power and it could be up to two years. we are seeing him be coy regarding the timeline of his release, expected this week. a aren't is abating the update of his release by this tuesday. the prime minister's department did say that they had the royal on wednesday.a.m. the ability to execute on theregn promises and might be some political infighting within the coalition as presumed by what we saw over the weekend following the appointment for the cabinet ministry position. support base might have some doubts over. but he came out with a statement of support from a decision and when it comes to the broader
picture, they are not exactly out of the woods yet. they pick the finest minister -- finance minister who has to be aired of charges before he can take that position and the finance misty is to directly report in the meantime. we are seeing hits starting to roll as they attempt to clean up government. the head of the anticorruption agency has resigned. the attorney general cleared him of wrongdoing back in 2016 and he's about to go on leave. >> we were supposed to be celebrating the 72nd anniversary but it seems like rings have kind of changed in terms of the mood music here. and they are licking their wounds, it seems? certainly more adversity last week and they decide what is next.
component parties on monday. the acting president said the task force will be formed to rebuild the party. he has been calling for a reform agenda in the wake of them stepping down as the chairman as well as presidents of -- i was told that there will be some soul-searching, that systemic rot has settled and the party that has to be addressed heavily. we ought to be collectively responsible. said it was his fault, we would be in great denial. hase is systemic rot that set into the party that we need to handle. sophie: khalry is being
watched and the party meetings are to be held next month at the branch level about the decision for the top post yet to be determined. this is happening as the party has delayed the party elections at least twice, which puts him at risk of being the registered given that they are in violation of the constitution. the future is in doubt here. kamaruddin, thank you for joining us. coming up next, ht people to is making strides in biotech. we will hear from the company chairman and ceo phil about his vision of a permanent capital that form. this is bloomberg. ♪
yvonne: asia's first major -- market open, japanese futures losing steam here before the open. a lackluster session when it comes to stocks. the bond market will certainly be in focus today after seeing a synchronize up taking yields overnight. this is daybreak: asia. i'm yvonne man in hong kong. betty: i'm betty liu in new york. ht to holdings is making strides in biotech. was recentlysets sold to janssen pharmaceuticals for more than $1 billion. i spoke to the chairman and ceo earlier today.
>> yes, that was part of our life sciences entity where we made an investment in the company by the name of been a beer. it is a virus in the immunotherapy space. we have been working on it for a while. >> you put $8 million into it. >> and we cut a deal to sell it to janssen which is the division of -- the pharmaceutical division of johnson & johnson for a total that could be over $1 billion. >> certainly a big return here. is a guarantee you will get the billion dollars? : there will be a milestone payments which is typical for transactions like this in the pharmaceutical space. the fact that johnson & johnson is putting a tremendous amount
of effort in there, we're comfortable with that. monetized andbeen i wear the transcript of your last conference call, for instance. or some time, investors were undervaluing their portfolio. you think your portfolio has great value but the stock price wasn't reflecting that. do you think this is proving the naysayers wrong? transactionalhe think is hopefully indicative of and in life sciences. in general, the company is a little bit different and a little bit difficult to analyze energy and insurance. it is more than your typical entity. there are other companies listed that are pretty
diversified. what are investors not getting? people want to see that we follow through with some of the different things we are doing. they are looking at our capital structure at the same time. and the fact that this is a relatively nascent entity for us, people like to see the continuity with a different things we're working on. this is a time we expect the stock to start to move. betty: it certainly did move. mr. falcone: not as much as i would have hoped. get a lot ofu phone calls? i'm curious if this will make it easier to monetize on a part of your portfolio? >> i don't think it is a function of making it easy or difficult, i think it's a
function of us taking our time and make sure we are extracting the appropriate value. people questioned what we are doing in life sciences and it was really a testament to the different investments that we have because we do have more than one. betty: don't forget our interactive tv function. this is for bloomberg subscribers only, so check it out. this is bloomberg. ♪
dollars for the current fiscal year to 17% decrease from the year ending in march 31. a $2 billion average estimate for analyst surveyed. for companies, it would be toroved, very much improved show strength. it would be much stronger. one of the productions of acquisitions that we got this week. bank bowing to remain strong and asia, despite a global overhaul. they told investors that the ifk can only remain relevant it maintains robust presence in the region. both sets, they went from one to another in recent years. next half hour,
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yvonne: is it :00 a.m. from hung -- 8:00 a.m. in hong kong. street closed with little change. treasury yields have been 3% again. a 230ese lineup with mainland stocks selected to join its benchmark indices. betty: i'm betty liu in new york. it :00 p.m. on this monday. tensions over trade. is itent trump -- 8:00 -- :00 p.m. on this monday. tensions over trade.
iphone sales struggle to grow. ♪ yvonne: the bond market story once again in focus. europeally happened in after we heard from the ecb policymaker. we might start talking about tapering at the end of this year, followed by a rate hike in 2019. what does this mean for asia? perhaps a lot of difference for the dollar-yen. when it comes to german yields these the yen, the -- have been tracking closely together for the past few years. until recently, we saw this divergence.
sitting around one-month highs right now. can the dollar-yen catch up? that will be a pretty big landmark there. betty: we have had so many divergent opinions of where the dollar is headed. we heard from one of our guests in the last hour that said the dollar has been driving -- it is behind what we are seeing here with the yields, whether you are or u.s.at the bonds treasury. let's get to first word news with paul allen. least a list of 234 chinese -- to be added to the gauges next month. bank.chinese construction it will channel $13 billion into the second biggest equity market.
some mixed messages from senior officials of the fed today. study, gradual rate hike. such a strategy could cause problems for the u.s. economy. their comments come as investors debate the pace of rate hikes after three more are expected before the end of the year. >> when the fed is thinking and inflation of 2%, we are thinking about it on a sustained basis. you'll look through these transitory movements and look at where inflation is going. we will see inflation be at 2% over the next one to two years. least 55 people have been killed in violent clashes during the israeli army and palestinians. dayay was the deadliest
since the cross-border war. the protests came as u.s. moved its embassy from tel aviv to jerusalem. palestinian authorities say they will launch a war crimes case against israel. freeds. supreme court has states to legalize gambling on sporting events. instigated and betting could again in a matter of weeks. the american gaming association says $150 billion a year are placed into illegal sports bets. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. yvonne: let's take a look at the market open request. still looking favorable when it looked -- when it comes to equities. that bond market story we see
these yields higher. dollar also stronger. d: we will talk about the bloomberg dollar index soon. when you look at the global , stocks slightly higher. just new zealand. we are watching new zealand as well. might be a little too hot at the moment. yields are on their way up. future is looking flat at the moment. shares were flat at the open. we have a statement out of a fairly prominent shareholder. have a look at the statement right here. i will let you read it for yourself. restructuring plan does not exactly make business sense.
there is not a lot of logic in it. they are advising shareholders to vote against it when they meet and if you met -- few weeks time -- when they meet in a few weeks time. oil is also on the way up. out yesterday.n we are pushing towards $80 now. the saudi's reported the smallest monthly output. if you take it as a whole, we went from 340 million barrels. that is a days work. the dollar is up. out,ing at comments coming and the yield is now at 3%. we talked about inflation. oil is on the way up. are a bitr in india more clear.
back to 3.2%, the highest in the year. we are tracking that very close. that is the story in india. just a quick look. here,ou want to watch for .ou have china industrial productions also out as well. i mentioned exports out of india. the philippines also underway today. they are reopening after being shot last week. a lot of data to look forward to as we head into this tuesday trading session. david checking the market. thank you so much. the u.s. and china has signaled the desired to avoid a trade war. china reopened a review into qualcomm's bid.
the top economic adviser is on the way to washington for top -- for talks with steve mnuchin. a lot on the agenda this week. jodi schneider is joining us now. lawmakers like marco rubio did not like this. >> they are concerned on several fronts. leadingbio, who is a republican in the senate, has said that he thinks it would be crazy to enter into a deal restrictions imposed on them. on the other side of the aisle, chuck schumer, the leading senate democrat says he thinks this is a bad deal. there is concern from the fact that the cia, the nsa and fbi have expressed cybersecurity worries about zte. gina haspel, the nominee to head
the cia, not that i -- now that mike pompeo has gone to be secretary of state -- she said in testimony that she would not use their phone. she was worried about the risk of these telecom manufacturers. they are also worried that the u.s. may not have gotten -- may not be getting a long-term good deal. it's that they might be trading a long-term concern about cybersecurity for a short-term gain with their relationship with china. yvonne: what is the position from the congress department? they still continue to throw jabs at china at the same time. >> the administration is working towards this deal. he did say that he wanted to zte using a two track strategy.
not in the trade negotiation. the president himself seemed to popular that a little bit by saying that maybe there would be some ways to further punish them. it is a little bit back and forth at this point, even though this was a surprise announcement that zte would be -- that they would be looking at helping zte. yvonne: in light of this, they might lift some of these tariffs on agricultural products as well. is good news. we are heading in the right direction. >> it is tapping down some of these tensions that had been rising. the differences between the two sides remain wide, but there are a lot of things that need to be negotiated with the vice premier
coming. there will be serious talks. meticulous efforts to try to do something. downe: still tampering expectations. jodi scheider their joining us in hong kong. still ahead, analysis after missing estimates. apple barely meeting wall street expectations. betty: msci names chinese shares to be added to benchmark equity gauge is from next month. this is bloomberg. ♪
chinese shares to its indices, forcing international retirement to buy them for the first time. a symbolic win for china as it opens up its financial market. joining us is the head of research in hong kong. thank you for joining us. your thoughts on these 234 stocks? you seem a little mixed. it is in the portfolio are ready. you see the big amount going to china. somethinglready doing . they know that. impact.why you see the china will open up more. i think that will be more of an
impact on the index. do not expect too much from that. --ty: we have to wait yvonne: we have to wait for about a year. i want to talk about this chart that you mentioned. you have seen this share premium has narrowed down from what we have seen in the last couple years. you take a little bit of the evaluations on the market. is still there. do think that is a good entry point right now for people to start raising their interest level in the market? benchyou really have to the msci, there is time to buy more into china. they will definitely choose the best price. in the last two months, you see asia dropped and you see some of the portfolio managers on the market to buy first. for the moment, still ok.
i think it dropped already. days they willo rebound. market is actually not that good and then jump again, maybe that would be a good time to get into the market. is ae: there already selective premium there. perhaps we could see a little bit of arbitrage. you have to have a mandate. you have to buy a share. you have to buy it. you have the discretionary on this. it is what they do all the time. betty: i'm curious about what you thought about what came out. were there any surprises to you on the companies that would be included?
>> i am not surprised. all those company is are the biggest companies. -- i feel likees that will be good for them to open up for msci. it will be good for them to buy. i'm looking forward to this in the future. there will be more opening in the china market. be in theat will coming years, we will see more opening. betty: it is not immediate, but as chinese stocks become more and more popular, as they grow , some of modernizes these stocks will only increase. a number of them will only increase on these ms ai indexes. might that come at the cost of other emerging markets -- msci
indexes. might that, the cost of other emerging markets? think globali equity has a lot of money in the market right now. the problem is everyone has been looking for a good market and increases. a good falling. all these things to help them. emerging markets do good and economic growth continues to go up. keep the liquidity. yet to make the emerging markets better and better. betty: speaking about emerging markets with interest rates rising in the u.s., it looks like the ecb is on its way to tightening now. will add a
detrimental impact on emerging markets? i think the key issue is that we know the rate hike cycle kicked off when you're ago. increasing rates. the emerging market knows it. conditions are much better than before. seeing the asian economy, most of the economic conditions are actually quite good. i do not think they will have any big issues here. for the moment, i think look for the outlook for this emerging market. that is more important for the
moment. korea is one of the markets you like as well. the earnings season have not been great in south korea. we have seen more of these estimates from down lower. it is weighing these estimates when it comes to the msci index. we saw these export numbers that came through in april that dropped. there was a lot of focus on this ominous sign for moving forward. what is your take? korea ink the south issues are i think getting better. that will be good for a lot of korea. it might be good for the january outlook. , if you think korea number ispping, the
expectations. let's go to overtime taipei and bring over our expert. what are the numbers indicating? >> they indicate good news. i know that is not gel with your intro. -- does not gel with your intro. if you go down through the numbers, what we are seeing is the cost of the major components of cost there, rose. operating margins are down. don't through the line, numbers for the first quarter were down year on year. that is why people were disappointed. betty: what is the indication for other suppliers? >> for the supply chain, this is good news. they look atmeans it as a proxy for apple itself.
they are putting more into the supply chain. $60 billion was spent last year. that is more. that is more money going back and employees at hon hai buying equipment. is more money fly -- flowing into the supply chain compared to last year. that is good news for the supply chain. analysta note from an was talking about it is the fundamental changes. the do not expect the momentum will last for them. is there a need for some sort of revamp here and less of a dependence on apple? apple storydence on
has been going around a long time. he got into apple about 12 years ago. four or fivefor years that he will get away from being dependent on apple. cloud been getting into and all these other areas. apple is that thousand pound gorilla and they have to keep supplying them. we are trying to build into other areas. -- they are trying to build into other areas. yvonne: a columnist joining us from taipei. let's take a look at the flash headlines. company in shanghai moving a step closer to production at its first factory outside the u.s. registering the business with electric vehicles, batteries, storage and solar panels. it would allow it for an energy
factories ass early as this year. betty: ready to reject and $11 billion takeover from china. the resources say they view the current offer as too low. its shares soared the most in more than a decade. they expect chinese utility to sweeten its offer. yvonne: amazon is taking a giant step into digital advertising. around thehoppers web to lower them back to amazon. them back to amazon. it is inviting select companies to test it later this month. than 230 chinese stocks set to start trading on
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yvonne: acorn 30 and we are a half hour away from opening -- 8:30 and we are a half hour away from opening. betty: let's get to first word news with paul allen. congress secretary wilbur ross attacking china again they it is a member of the world trade organization in name only. they do not abide by the rules. administration is making progress in trade talks with china, including their treatment of the phone maker zte. >> united states is the most
open and most exploited market in the world. both china and europe espouse free-trade rhetoric, but in actual practice are far more protectionist than the u.s. paul: the nafta talks are said to miss the may 17 deadline. the latest low to the market for we working the deal. top negotiators are not scheduled to meet in person this week despite have -- holding bilateral talks. arabia oil production last month was the least since output cuts were introduced more than a year ago. ae biggest number reported output of 9.9 billion barrels a day.
they are asking if the kingdom or its allies will be -- >> what we have seen as a withdrawal from the agreement, which seems to be another negotiation of some kind. partially, you could be to one billion the day off the market. there is a lot of uncertainty out there. that is more reflected in what is happening in venezuela that is affecting the oil price right now. paul: the trump administration picks for vice fed chair says he supports stable prices. is that support policy take a balanced approach to achieving those objectives. face senate panel later on tuesday. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.
i'm paul allen. this is bloomberg. ♪ yvonne: cap to see how the markets are shaping up so far. time to see how the markets are shaping up so far. nothing is happening. japan opened a little higher at those levels that are the complete opposite image. the dollar rally continues with yields pushing up. that is a story we will continue to follow. about .1%. market at a record high. have a look at the movers. i will not going to each of the names. may 10 was when they were meeting.
dovish.fairly the other market i want to bring up, i will bring up australia right now. let me just give that up. live tv, stay with me. that is your index. -- let see at the bottom me clear that up for you. , it you are looking at here is pushing your momentum indicator to fairly overbought levels. that might be a cap. in january, watch that closely as well. we are about 25 points short of that level right now. the other stories we are following right now is oil. have a look at that. we are now pushing 80.
follow that closely. the saudis came up yesterday and said they pumped the least amount of oil. -- we're now down to 9 million. , we will bea talking about that in a moment. it is a big deal. it does not kick in until the start of next month. the new combined the 230 stocks and compare tencent, about 13 times heavier. it is a bigger deal when it goes up to 5%. tencent is out with earnings tomorrow. yvonne: let's continue that story. shares to be34
added to benchmark equity gauges next month. the three largest addition to the mci -- msci index. let's bring up our reporter in hong kong right now. what does this mean for these companies that have been included now? is a hugehe said this deal, but it is a small slice. these are huge companies. it is a tiny percentage. they have been able to buy them through hong kong, but they are actually a lot more expensive on the mainland been in hong kong. .t is a symbolic move they will have shares listed in shanghai and beijing. you might not see an immediate impact on june 1. we will get another addition in
september. it is a process towards opening up chinese markets to international investors are you we might not see the stocks rise in large amounts. this is exactly what msci ones. they wanted to be a smooth process -- wants. it to be a smooth process. it is not a surprise to anyone. -- it will go as smoothly as possible -- as possible. now, we have a lot of money tracking msci indices. the emerging market, it is a must $2 trillion. -- this money will suddenly it will be a smooth process because that is exactly what msci wants. because it is a small slice of the markets, we are hearing from
a few investors, that even if they do not immediately add the stoxx to their portfolios, they can do that in a staggered, steady pace. they're tracking arrow will be so small that it will be ok. we will see a very gradual process. we will see these index trackers from firms like state street, which have all these that track msci indices. they will not necessarily pile in on the same day on june 1. betty: thank you so much. are seeing some mixed messages from senior officials at the fed. cleveland fed president endorsing this path of study, gradual rate hikes. that strategy could cause problems. watch the yield curve.
kathleen hays is here with more. just about every fed official you talk to says that baseline for 2018 is three hikes, some leaning towards four. more of a middle-of-the-road consensus right now. when she spoke in paris, she goalthat the fed inflation target of 2% have not been met, even though it hit in march. it is partly due to the oil prices. explaining why she is still in favor of a gradual rate hike path. i do think we might see some variation in numbers in time. that does not this daily mean that we are in a shooting off period where inflation will take off. i do not see that happening.
i think it will be a gradual process. basically meeting both parts of the mandate. they seem to be in step with this consensus. --kathleen: they seem to be in step with this consensus. hiss take a look at what reasons are for going slowly. inflation expectations are still low. that is important. the current policy rate is neutral. neither pushing the economy faster or slowing it down. stillss investment is week. -- weak. he is also raising a red flag about the flattening yield curve which is a flat that it could
invert by autumn. we will want to get a lot more from him. clarida is in line to be the next vice fed chair. right amount of unemployment and just the right amount of inflation. what kind of tone will he set? that will be interesting. we have the inflation data out of india that david mentioned is driven by the oil prices. -- y: saying -- saying thatople are the r.b.i. could be hiking key race as early as next month.
cap into a bloomberg chart with me and you can see this red line, the 4% target. -- jumping to bloomberg chart with me and you can see this red line, the 4% target. yes, oil is india's biggest import. that prices rising and it will be tough to keep inflation down. moving on to china where everything is being watched so closely during a time of trade tensions. a mixed breed. track the growth. three big indicators, let's start with the turquoise one. 10.1% is a good reading. move down to fixed asset. industrial output was 6% year over year and expected to rise
to 6.4%. it sounds three good. also waiting on the minutes from the reserve bank of australia's last meeting. they held policy study. thegovernor is optimistic global economy could be picking up enough to help australia's economy. falling and a scope for a rate hike down the road. yvonne: thank you. our editor joining us from new york. you do not want to mr. exclusive interview at 1:30 on thursday. half past 1:00 on the east coast. betty: breaking news out on the financial front, earnings front. , that is aer net large miss.
in underso coming analyst expectation. one --ndred 11 billion 711,000,000,001. reporting numbers coming out from this company. next, we will hear from the stock being down in the korean trade. economist anda his outlook for china's economy as we wait for april retail sales numbers and factory output. lots of data coming ahead. this is bloomberg. ♪
bloomberg with april factory output extended. retail sales are study. as is the chief china economist, the number one forecaster of china cpi, according to bloomberg area an interesting set of data -- bloomberg. this is an interesting set of data. it seems like things are holding up. what do you think? gdp grew by 6.8% in the first quarter. the growth remains quite resilient. we also see some softening with regards to external demand. likely it may have rebounded to 6.5% from 6% in march. it benefited. faced risk
surrounding the u.s. china trade war already leading to a slower growth of orders. internally, the credit growth has fallen. they remain at a relatively low level. weigh on growth in the next few quarters. policy will be tightened further because of pressure. credit policy could constrain developers ability to invest. putting all those factors together, we expect growth to edge lower for the rest of the year. all these dates coming up this month, may 20 seven is when the public comment period ends. they will decide on whether to impose these tariffs on china.
to aat going to lead potential drawdown in china? is that going to start reflecting in the data? estimate on an f -- the impact. proposed by the administration -- based on our estimate, it 2%ld cause a 5% fall and a loss of china's gdp. that is substantial but not damaging. the interactions between the thatand china are that so a full-blown trade war can be avoided. a trade war is costly for both sides. there is substantial room for both sides to reach a beneficial
deal. yvonne: the rhetoric seems to be a little more positive. a tradewe do over it war, this will delay investment. is it different from sector to sector? it seems like china is willing to open its manufacturing sector. depending on what comes out during their trade negotiation. i think there is room for china to open up further for investment. of example, we got news tesla setting up operations in shanghai. in the service sector come in this area come the u.s. has a competitive advantage. in transportation come in
medical service, education and financial service. that could help to offset some of the downside. downside,ying on the if these trade talks continue , whatospects look grimmer are the areas that we have to watch out for that will take the biggest hit in china. -- bighust hit in china china?t in far, it is talk to detract from a trade war. high-tech sector could be affected in a major way because the u.s. increasingly
has china as a strategic rival. that is evidenced in the sections of the investigation. china's high-tech industry could be hit hard by that potential trade war. large external stocks begin a slate -- major slowdown. by what keepsond -- china already cut the reserve ratio. that can be seen as a structural measure to reduce the cost of doing business. cuts areity of our likely for the rest of the year, in order to offer the banking system longer-term funding at a lower cost. yvonne: it is more of a buffer
betty: a quick check of the latest flash headlines at this hour. missing estimates days after announcing a $62 billion deal. operating costs will be about $1.8 billion for the current fiscal year. a 70% decrease from the year ended march 31 compared to the estimate of analysts surveyed by bloomberg. yvonne: nissan under further pressure after missing estimates. operating income at $4.9 million -- $4.9 billion. numbers reflect a stronger yen and stronger demand in the u.s.. and look for what is coming up in the next few hours. what are you watching? economiste have china
coming along to make sense of retail sales numbers. what it means overall for the chinese economy. there she is. 10:00 hong kong time. in 10 minutes, head of dynamic markets will be a long discussing where the money is going at the moment and ways of being contrary to the heard, which is quite -- herd, which is quite something. the state of india with elections, state elections taking place. what that means for their prime minister modi. that is what we have coming up. yvonne: with the forward to that. let's look at how the market opens are setting up. malaysia obviously in focus.
we did see a rebound ins talks yesterday -- in stocks. the government using some of these tensions with what is going to happen with the government. the futures down .1%. frictionstill a lot of between the two leaders, as well as uber him -- the two leaders. betty: certainly one to watch. -- coverageed continues. this is bloomberg. ♪
rishaad: markets flat at best. investors weigh tensions. the dollar holding gains. oil edging higher. trade tensions seem to be easing but president trump wants to help. the naming of the chinese lineup. to do that.0 voted in hong kong, i'm rishaad salamat. sydney, i'm haidi lun. coming up, we are live in malaysia as the government faces a test of unity. the coalition is already under strain. this is "bloomberg markets: asia." ♪