tv Bloomberg Daybreak Australia Bloomberg July 18, 2018 6:00pm-7:00pm EDT
forecasts and that means that they surpassed estimates in the quarter. >> a record fine for google in europe that will change the way they promote services in europe. >> giving and receiving. to charityett gives and changes at berkshire give him even more. >> hello. ais is daybreak and we are couple of hours away from the open at the asian market. --it is just past this playsk at how into the asia-pacific trading day and we got a lot of different crosswinds here. we have morgan stanley beating estimates and jay powell was in the second day of his testimony in his annual report with an of
upbeat sentiment and there is still a specter of trade tensions, with no new headlines, sentiment.eighing on >> there is a question about the new normal and the absence of negative headlines could be enough for marcus to trade higher. ve betenu.s. banks ha estimates. >> this is something to look at. .22%ee the s&p 500 is up days in a up five row. at its highest since february 1. the nasdaq is flat, but we did see a pop, but some pullback
there. spot was upg-dolalar and it is up there. anderms of new york crude brent crude, it is a surprise, even though we got the surprise inventory build as of last week. the reason for this is that surprise draw down that landed support to oil across the board. estors were watching that and there was not a lot of detail, in terms of redistributing the boost and we dynamics. those it is looking positive heading it israding today and
pretty flat with a little bit of positivity. trading -dollar is ndgher and the aussie amn kiwi were the best indicator of risk appetite with the weighted currencies. the futures are looking higher ssie-dollar sits above that level and i want to make a mention of the crypto year sincetcoin this june. it has been helped whyjay powell saying jay that the fed will nort regulate
cryptos. there was a gain of 11% before 8.5%.ed to putting pressure on allies it is threatening tariffs. the sides will meet for talks next week and imported vehicles will be at the top of the agenda with automakers warning of job losses on both sides of the atlantic, if the administration carries out the threat. >> we said, if we do not negotiate some ink fair, we will have tremendous retribution that we do not want to use, but we will have to, including cars. cars is the big one and you know what we are talk about, with respects to cars and tariffs on cars. >> theresa may has said no deal is better than a bad deal with
>> it. there was a question about the no deal scenario and they said there would be no easy answer for the border. quit johnson said that he because of her dithering, but did not question the leadership. diver ak called a pedophile and has now said that didn'te in anger and it justify that response, saying that the fault is his and his alone. the boys have been kept in quarantine for more than a week while the doctors have checked them for possible illness or psychological damage. the rising water had truck them in the thailand cave on june 23. the boys and the 25-year-old
coach have been declared generally healthy. global news, 24 hours a day, on powered bytwitter, journalists and analysts in more than -- this is bloomberg. the market close was about the banks and the positive earnings and the oil swung because of the conflicting data and american express grabbed the spotlight afterwards. sue has the latest. s&p hit aed but the high. >> absolutely. theave the tech names and snapshot with the dollar holding steady, thanks to the positive comments from powell and we have the oil climbing up and the gold
the interest saying that bears are taking charge and the rough ride is getting rougher. we have american express though they came in with quarterly profits that expected- boost the revenue was a slight miss. posting growth and saying that clouds sales are strong. it.stors love we will see how this plays out. we have banks coming on -- -- have banks coming on strong and fett got the go-ahead for the
share buybacks and you had a lot of different stocks going higher. nthted airlines is at a 6-mo high. reportingave roku earnings and they are down in sympathy with netflix./ -- netflix. morgan stanley. strength was across the king was a the deal ma standout and that goes with the theme. e of fits with the them investment banking performing strong. again, morgan stanley saw shares
key topics included the institutional securities business and turning in the best the dealsince 2007 and pipelines. we have the investment revenue graphed out for you and you can charts of investment banking rising across the board is where yougreen find morgan stanley. if only all the results could be this easy. really, a strong quarter for morgan-stanley. >> it is tough to find weakness. we have conflicting supply data that we are looking at. bui surprise here with the that was offset by
gasoline. you saw oil was lower earlier in the week and it came back and it was a positive for the oil bulls . it is at $69. again, oil is pretty much back ds better results, after being at the lowest we had seen in a month. let's go to the gold holdings because of the bullion-backed a slump andeing there is a lot of speculation about the futures of gold are rish going for. >> that is the wrap of the overnight trading action. will haveys that they st fund on android and devices.
>> they have use this as a vehicle to cement dominance as a search engine and these practices have denied rivals a chance to innovate and compete on the merits and they have denied european consumers the benefits of effective competition in the very important -- in forave our reporter the details. how did they respond to this. in for the details. how did they respond to this. -- this? reporter: some of this was expected for some time and price in, but the bigger concern is the search business and they see the fine and the remedy is not affecting this largely in the european union or globally and they think that investors are confident that android handset
makers will still -- they will download because they are not great alternatives. fine that is 16 days of what google pulled in last year. how does this impact the business? is hard to say, but they will say that they are taking the net loss in the second quarter, similar to the shopping fine. is, how muchactors rivals, microsoft, amazon, who are building out voice search and are creating consumer places that would affect google. google givesuawei,
him a lot of money for the deals and google is paying out what is that investor concern could affect the margins. >> we will leave that there and we have our bloomberg technology reporter there. all right. the trade warill go nuclear? we will get reaction later in the hour. top-performing pension fund says that tech is the focus. m joins us in just a moment. this is bloomberg.
on. it is getting boosted by the strong performance there. you are watching daybreak. that ae is no indication recession is eminent, but he did recognize that the escalating trade war is a risk to his outlook. hays is there. the trading is a big risk to the economy. he was asked about whether he felt one way or the other and he said that he didn't want to criticize the policies. >> it is an important point and it is something i picked up over the last couple of days and he prefaces every time with this , when itcould be good comes to global trade.
he doesn't think they are trying to go back to protectionism, but is quick toit as he acknowledge. let's listen to what jay powell said earlier today. >> the retaliatory tariffs are just beginning and we have the agricultural patch affected and it is just the beginning. workant to be careful to on this. beige book survey, what did they find? it is holding up
nicely, but there is trade concern in all the streets and it is starting to spread. all the districts are reporting tight labor markets and the inability to find the mark is that they are looking for. this is an issue and jay powell said that the united states may employment, butu there would still be some slakc and he says that inflation risks are balance and wages are rising res, but don't look for the aggressive fed in the light of the trade tensions that are definitely there. that.nk you so much for top-performing pension fund has shrugged off trade war concerns and looks to pump hundreds of millions of
dollars into international equities. ey are eyeing tech stocks. great to have you with us. impressive set of results that we are looking at with the what factors contributed to this outperfom ormance? >> thank you. let's start by recognizing that the return is after-phase and tax. thefactors that drove return is the long-term investment strategy rather than markets timing it in and out of listed aour belief in active management.
this was part of the ingredient towards success. if i understand this, you are extending allocation by and we have the stock allocation. you talk about the trade war and the significant tightening for global banks and the fed, does when it comes to allocating equities in the environment? us, it does not. markets are trade wars, are volatile's, but if you are a long-term investor, you should see through the volatility and take advantage of the opportunities as they occur. that is what we intend to do and we intend every balance away intodomestic equities
international equities, but the equity exposure is staying thedy because it has for last decade. >> some pension funds are trimming as you push in. explain exactly why you want to go further in during a time of volatility and where. >> right. so, the market is believing four things. one thing they believe is that there will be trade wars that are necessarily bad for markets and you will get volatility, but opportunities and you need cash available to take advantage of the opportunities. that is what we intend to do. in the rebalancing away from
domestic equities, the one or 2% is what we talk about towards international equities and it involves markets and emerging markets and we are he have a significant exposure to emerging markets at 8%. butill not change that, will add that to market equities. >> you are quite bullish on equities and we are at a battlingwhere they are 5or a supremacy in the 202 initiative. >> right. unless you believe the technology is about to get switched off, there are a number of consequences to a world, a future world of technology. if you believe in that scenario, why what you put in
to take thecks vantage of the technology as it -- take advantage of the technology as it occurs over a span of years. >> when it comes to the asset pricing and the way they have priced unlisted assets, which is part of the strategy and that performance -- >> yeah, sure. evaluationsretched and increasing asset prices as the demand for the asswets foreases and that is true all investors, whatever that valuation is for the assets. strategy is to
take advantage of those and you need to continue to deploy money in the markets as the opportunities arise. >> do the chinese markets moment? you at the you question is about on listed assets and private -- and privateets equity, we have the asset managers assessing the merits or otherwise of valuations from investments. s of listed markets, the asset managers have the opportunity to assess the valuations and the metrics in the financial markets everywhere, whether it is china or other emerging or developing markets. so, we leave it up to the
individual managers and we are of beneficiaries of the sum all those decisions. >> in terms of the larger picture and the switching out from the australian equities into the global exposure, what does this say about your view when it comes to australian equities? it has been interesting, as the market has performed as a bit of haven for global investors? >> we expect that to continue. moving away from australian anities into others isn't adverse view of australian equities, but recognizing that more money in the pension system , that means that we needed take invented the industry's offshore to make the investments because
our members are beneficiaries of what is, in fact, a global equity marketplace. >> okay. great inside into this -- insight into this and he was returns.bout the 12.5% let's take a look at the business headlines and it was returned that cbs management dilution stock dividend over several years. the trial said for early october will investigate whether cbs had the ability to prove that. >> a new law forced airbnb to share the names and addresses of accommodations.
you are watching bloomberg daybreak. >> google says they will appeal a fine from the european union. brussels want them to stop this contract with handset manufacturers and they have a deadline on until mid-october and could face daily fines on 5% of daily revenue. the top economic advisor is blaming china for the stallinjg talks, saying that they chinese president is holding things up. have ant xi does not deal and has no intention on following through with other agreements. jay powell spoke out against
trade barriers and said that the lower tariffs would be good, saying that he opposed protectionism and doesn't want to see a trade uncertainty upset economic momentum and remained upbeat about the economy and said that there is no indication a recession is eminent. some people cannot help making money. added $4 billion to his fortune after giving away $3 billion to charity. most ines rose the years and the wealth of buffett had dropped after he announces latest gift. by 2700ews is powered journalists and analysts in 120 countries. this is bloomberg. so much fork you that.
let's get you a quick update on the march and we have the wall street financials waking up from the decline in tech after the stellar set of earnings from the u.s. banks. take a look at how we set up for the asian open with the kiwi sto cks pretty open and the outperfr % higher and at .10 the business confidence indicators are just shy of the sentiment level. let's get more as trading gets underway here. veteran strategist thinks that markets are trying to send a message to the fed to stop the tightening. that we area view aring andgly heart
people talk about how will the tightening a policy affect assets? -- assets. this is the library and it shows you the liquidity shortage on markets and credit and they are all starting to retreat and the fed is rewinding that balance sheet. what they think will happen is toy will force the fed increase the cost of capital and with thed happen there is a debate around the overall size of the bank and the flows that are .oming through
>> below the hood, it seems that there is a development happening and it is indiscriminate with the estimates. aswe can characterize this mixed through the s&p 500 companies and there are interesting things going on with the impact on sales mrs. and earnings misses -- sales misses and earnings misses and the miss sell-off and a big the market is hammering companies that miss on numbers.
partly reflected in the they clearlyand impacted the stocks and it became more in the first quarter. >> in the middle of difficulty is opportunity. and it waswords hold bruised by the markets and they on the valuation discounts. for more on this, let's bring in rachel porter. tell me where they are looking for the opportunity. >> you know that there is
certainly an opportunity to buy in the worst quarter debt all way to bonds with a purchase of includer traits creditg mexican cds's -- default swaps -- and turkey. what about how they are globally positioning themselves but mark >> their view is that there is not going to be a trade war and that there will be an exit ramp and they are just going full steam ahead. >> i suppose that part of that is the view of the dollar.
>> yes. thes essential and we saw the pendulumand swing earlier this year when on u.s. outperformed growth and we will see dollar-weakness going for. >> thank you very much. street, whereall the large banks are shrugging economy,stree -- the with morgan stanley leading the way. what stood out to you? look at the earnings and you start with the investment bank up 20%, in terms of
revenue, driven across all pieces of the investment banking side. the ipo the m&a and side of things. $4.7 billionat was and the trading side also leads into the secondary with them andg well on the bond deals they were able to keep the given overwn and not to goldman. >> the interesting statistic that we have is that, looking at all the banks, the topped for straight quarter. >> yes. quartert, the last -- the last
quarter was good because the tax changes, but this is an will we saw on the trading revenue side, for example. and, the same thing for the consumers. they did well, despite where we saw the curve and the analysts were concerned that banks would have hindrances for the quarter and it did not play out that way for the quarter. >> what of the top executives talking about? they have to think about the trade war. >> it is something that a lot of journalists and executives are looking at and he said it thanted psyche more economics and there are issues
with starting skirmishes with these countries and he hopes that they get resolved. some of the colleagues are sort of saying that the trade conflict is not really bleeding into the client outlook right now and they don't see it happening. hat trade is a risk narrative, but it is not causing the company to change the strategic actions and the decisions they are making and it isn't something they are seeing happening right now, they do have this as a potential concern for the future. i asked the cfo about whether positives with volatility and he said, i would warbe rooting for a trade because you cannot predict where the volatility will go. always optimistic, but we
enterprise institute and joins us from washington, d.c. interesting point you make about the bilateral trade deals, as we are seeing with japan and the european union, the united states is lacking in the realm, even though they promise to the contrary with donald trump in office. >> that is exactly right. i am not in favor of the bilateral's and the that the wto and the transpacific partnership would be best, but the administration is not doing otherng with that and nations are doing bilateral agreements. so, the united states is not gotten very far. they were just rebuffed by african nations for a model fta.
they are not following through with the second and third best opportunities. >> donald trump touts the possibility of a bilateral trade deals today with mexico and the mexican and canadian officials say they prefer a look at nafta. what do you think is behind the impetus for this and do you think it is more posturing? thewell, there is always in chance it is posturing and most thought that the administration would try to get the canadians to go along with this le andave ou -- and leave out the mexic ans, but they think it might be easier to get the deal with mexico. the best outcome would be to nafta,e trilateral
because we do not have the u.s. -canadian market that you would disrupt, if you want to the bilaterals. helarry kudlow says that does not think the chinese are interested in coming to the table. do you think that there is a circuit breaker that could address both the domestic tensions and the chinese needing to keep their face in the midst of all of this? well, i heard larry kudlow say that today and that is clinical posturing. there may be rumors around washington that there -- around washington. ohere are back channels t china. the president is mercuriual.
the president you saying he will up the ante. on,ther it was turmp or clint i thought the time had come to challenge china. was not necessarily it all the voices are in chorus. do you think that the advisor to sees the says it possible when it goes into what this was? think you can get bipartisan support for sensible and strategic policy would china and the complex comes with the administration declaring a trade war with most of the entire trading war, mexico, europe, japan, and what they are nervous
about, including the republicans, is the evocation theyational security and economicing with this issue. they would oppose. >> we are seeing different channels and different avenues and to whatn degree do you think that the deal will shield them with what is happening coming through the united states, in terms of trade. >> i don't think that the agreement will shield them from what donald trump decides to do
or not to do because it is an agreement between them and it is a modest liberalization that shows that degree to which they are giving concessions to each other and the united states is not part of it. it happens all over the world and other nations are going forward with these agreements and the united states is getting shut out. there are various other pieces of the treat agreement -- trade agreement. >> we had the japanese trade minister. take a listen to this. >> the japanese will not take the same approach to u.s. tariffs that it took with the steal and the aluminum tariffs, but the damage would be huge to the japanese economy and the u.s. and global economy.
>> we are hearing from japan a bit of fighting words. does this need to happen, this kind of push back from the allies? >> i think the only way the administration will be brought 2 by 4.is by a the steel and aluminum tariffs the type of retaliation you will get, if the administration goes forward with this on automobiles. ande supply chains are huge disrupting them will mean, politically, that these countries will have to retaliate in a way against the united states. >> i see the image of the inanese with a 2 by 4
chairman tells us that he plans to push into the crowded market. the far east group has been in industrial leader in copper cable production for a couple of decades and we now need a strategy to become a leading player in the smart energy and city business. we have a history of 110 years and we have built a lithium 2700attery and it produces batteries that are compatible with tesla cars and we have invested in lithium mines. much are you investing in the battery space and what is the opportunity you see? that, we have
invested in the energy sector up to ludes productivity 10 billion yuan and it will grow in the business. >> how much of a challenge will dispose for the business? chineserowth of the economy and the development of the businesses shouldn't be seen as a threat. the chinese economy will see the opportunities and enter the prime time in the next 10-30 years. there should be in alignment with the national development strategies. energys the far east founder speaking to tom mckenzie. businessa check on the headlines. tariffss talked about
and aluminum and a significant headwind. two suggest earnings of $3.2 billion and it is down from the previous estimate. concernsast adds to over the potential impact of the tariffs. >> india is set to inject es into the rupe banks and will spend $2 billion capital buffers and the government has been forced to act because of the debt and profit. they are struggling with a record fine and will get the most cash. a deal inade signed china with a shoemaker. launched his latest footwear. it is thought to add tens of millions of dollars.
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which could save you hundreds of dollars a year. plus, get $150 dollars when you bring in your own phone. its a new kind of network designed to save you money. click, call or visit a store today. >> it is 9:00 a.m. on wednesday. i am haidi stroud-watts. stocks set for modest gains. the dollar is holding on to with the gains. jay powell repeating his upbeat message on capitol hill. he says a trade war would be a threat, but does not see an eminence recession. --from bloomberg school global headquarters, i am ramy inocencio in new york. google is slapped with a record fine in europe, it is asked to change the way it promotes services on its android devices. morgan stanley is the latest to be a street.