tv Bloomberg Daybreak Australia Bloomberg October 2, 2018 6:00pm-7:00pm EDT
>> welcome to "bloomberg daybreak: australia." celtic: i'm in hong kong. recounting down to asia's major market opens. haidi: here are other top stories recovering in the next hour. small caps slumped to a two-month low. september was a bumpy ride for four. the fed ball salute america's extraordinary economy and says
low unemployment should not stoke rising inflation. >> a mixed picture, we saw the a fresh record high, gaining for four consecutive sessions. the s&p 500 ending the session unchanged, we have automakers weighing on the markets. sales data, sales reports from those automakers. we will check those numbers in a few minutes. the russell 2000 down 1% and losing ground for another session, hitting lows we have not seen since july. multinationals pacing gains but small caps domestically focused stocks again taken a hit. let's see how all this will play out in asia. sophie: asian futures are looking mixed and stocks little changed in thursday's session. docket,ight on the data
and the nikkei pmi expected from japan and singapore. lineup astest cabinet well as plans for the next budget. currencies we're keeping in the astlight, the yen back below the kleins have been overdone. the aussie dollar under pressure, set for more losses as rates fall further behind with the rba standing pat on tuesday. -- callingve hsbc for caution as the rupee has been the example fire, falling below 15,000 for the first time in 20 years. we are seeing that indonesia is looking to shore up the currency
, perhaps looking to cut taxes for bond investors to your end that money. also watching the pound, starting back below 130. other has joined carmakers in making contingency plans. were keeping an eye on tesla suppliers in asia. we do that china remaining on holiday this week and south but it is reopening today and were just a few days out from the r.b.i. policy decision expected to hike rates by 25 basis points. let's get you the first word news with jessica summers. jessica: they chairman jay powell says he won't agree to is confident and
low employment will not stoke inflation. he said wage rises were broadly in line with the fed's mission and don't point to the labor -- he expects the fed to stick with the current path of hikesl interest-rate while monitoring a preordained set of risks. >> this historically rare caring of low inflation and low unemployment is a testament to the fact that we remain in extraordinary times. our ongoing policy of gradual interest-rate normalization reflects our efforts to balance the inevitable risks that come with extra ordinary. so as to extend the current expansion while maintaining maximum unemployment and low and stable inflation. amazon has bowed to political pressure and the tightening job -- stop market. a november the company will offer $15 an hour to more than a quarter million employees, along
with about 100,000 seasonal workers. in the u k, the hour wage in the london area will rise to the equivalent of $13.60 and $12.30 elsewhere. italy's popular government has confirmed it is sticking with ,he 2.4% budget deficit target ecb governing council member olli rehn earlier called fears public finances are unsustainable a serious concern. european stocks fell to a two-week low and italian bond feels touched a four-year high. -- wealthyyear-old buyers continue to favor limited edition scott twisties. ae of just 12 bottles with presale estimate of one point $2 million tops the current record of $1.1 million set by bottle of the same vintage in hong kong. the label is designed by an
italian artists. 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 jessica summers. this is bloomberg. more now on the u.s. markets where stocks ended an up-and-down session, mainly lower. trade tensions each -- is 12 goals surged on the italian budget. and as the by the fed chair shrugging off inflation concerns. su keenan is here to wrap it all up. su: it was a search for direction from the start of the open. you saw the market taking its cue from there. index hit the highest in three months. small caps in the russell 2000
falling the most since july and retailers and banks and financial firms with the banking index of their. let's look at some of the stocks in focus, amazon wrap the spotlight. it's wage hike part of the story, it plans to hire 100000 and the holiday season, putting pressure on other retailers. intel up on a host of good news. showing optimism about its next-generation technology. lower, and stitch fix missing its earnings, really disappointing and that together with amazon pushing the retail index to having its worst day in years. let's take a look at ge, if you look at the two day story, you see it dropped off the top at the beginning of its most region -- recent session.
ratinge the other two services also examining whether ratingll drop the credit that raises the cost of borrowing. a risk the incoming ceo is probably not planning on. bloomberg, youhe can find our library of stocks. were talking about how the small caps had done so well during all the concerns about the test. dropped and is now below the s&p 500 and that is an important trend we will watch going forward. now the headlines, italian turmoil and the debt crisis there, led to people searching for safe havens. we so gold and silver rice and all will oil. silver catchd and
up within 10 minutes of the open, on concerns, will there be another debt crisis and you can see copper declined of it after hours. let's go to oil, the sanctions on iran are tightening, keeping oil off in the session. on concern about where the price will go. ubs is not ruling out $100 by years in. about missedlot of opportunities in ian's now because they are so cheap. saying stay way for now, talking about the impact of rising oil prices as the outlook for growth's getting a lot of attention. hasa couple of other houses said maybe it's time to go back
and take a look at the msci index. it rebounded in september, that cause many to say now is the time to get in. some saying wait, you have a couple of different factors that are creating a big caution flag. saying history suggests tighter global liquidity and slowing --bal growth can create they've highlighted the value in developing nations of late but other analysts are skeptical about a big emerging-market rally and you really want see that until early next year. a real up-and-down session therefore wall street. tesla map taken a major step ofard its elusive goal
making a profit. days after the sec punished elon musk for his tweets, tesla of making a profit. days turning out more than 53,000 in the last quarter. pretty big deal credit we will have to wait a little bit longer to worry -- to learn about profitability. >> absolutely. they really had to hit the targets is order because of all the unforced errors that we saw you on musk go through during the last few months. obviously the biggest story being the august take private tweets, claiming he had the funding secured. tot caused a huge mess that some extent is only just getting salt over the weekend with the sec settlement. we still don't know to what extent going to face ramifications from the department of justice. putting all of that aside, hitting your numbers is key here for tesla. they also deliver more cars than they produced, as they pledged
they would. that suggests they were able to make some progress toward the end of the quarter of resolving what musk has called delivery logistics hell. he talked about getting through and that being a challenge for them going forward, actually getting the cards to the customers. haidi: it seems like investors have been underwhelmed by that. >> from the commentary in the release, they talk a lot about headwinds in china, about the tariffs in china being a real concern. talk about not being eligible for incentives because they don't build locally, and the idea that they want to accelerate efforts to get a plan up and running in shanghai. they don't have any specifics around that front, so perhaps the market is a little worried about that, and also the lack of any commentary within the release about profitability. ford motor has had a very
humbling month especially in regard to chrysler. >> you look at the way the month shaped up for them, the f series pickup has held up very well with the new pickups coming from fiat chrysler, the new ram, and also gm bringing new pickups out. for has been able to put up with that to some extent. are starting to see these new pickups come in, perhaps causing a little bit of trouble for ford. for the whole industry this month, there was a huge withover-year challenge hurricane harvey being a big factor last year. there was a big bounce that that in september of 2017. >> we saw nissan do a little bit better. they were expected to do very badly, so that's why it was good. >> looking company by company,
ford was down 11%, toyota down 10%. nissan was expected to be down 12%,so they come in down it's a beat, but still nothing to write home about. the big bright spot was fiat chrysler. in addition to the new ram coming 12%, out, that new jeeps and sport-utility vehicles are where it is that in this market right now. >> thank you so much for that breakdown of the auto sales numbers for september. still ahead, how western businesses in china are dealing with the trade war and slow down. will speak to the former ambassador to beijing later this hour. >> achieved market strategist joins us next. this is bloomberg. ♪
the landscape is shaping up for the midweek session, lots of pressure coming down on small caps again. we're also seeing the aussie dollar continue to see downside pressures. shery: you're watching "bloomberg daybreak: australia." midterms are fast approaching here in the u.s., and while the democrats seem poised to take control of the house, the senate is more open question. our next guest says a big win for the democrats may be -- may lead to a market selloff. joining us is achieved market strategist, thank you so much for your time today. the dems could take the house but the senate it's still be a play and republicans are still expected buying large to keep the senate. >> and they may pick up a seat.
>> if that happens, wooden there be more political gridlock? question right speaking, that would be viewed positively by markets. the baseline expectation him as you said, is the democrats take the house in the senate remains among publicans. what is it really translate into ? that means some political gridlock, that means president trump's agenda becomes much more complicated. it probably leads to some changes in the 2017 past tax code, so thattax has to be seen. that is why do so critical depending on how many house seats and whether the senate goes one way or the other. whether republicans when code, t has by 51 votes are 52 seats, or whatever it is, at the end of the day, the expectation is that everything will go down vote wise by party line, so does it make a big difference. a 50-50 split tells a very different story, because while the tiebreaker would go to vice
president pence, there might just be one or two senators that are willing to cross the line from the republican to the democratic side, so that becomes problematic. that's what could cause a short-term selloff. fundamentals, will triumph over the short term political impact, just as they have so far for the last year and a half. >> this chart shows earnings revisions, looking at large cap earnings, there has been a boon over the past two days. you can see that on the s&p 500, that would be the line in yellow. u.s., others the trailing. do investors have good reason to be bullish? oliver: i think there is a good reason to be bullish in the short to intermediate term for u.s. equities. i don't think the traits that or
whatever you want to call it -- the trade spat is impacting the u.s. economy or corporate earnings yet. when we look at third quarter earnings, which are essentially starting now, i think we will be fine. it will not be problematic. that may change as it drags on. my personal view, and i'm not an economist, is that the trade war will get worse before it gets better. the gains the trump administration made with the usmca or whatever it is called, the former nafta, it's a fortical and economic win most. at first glance, looking at the changes, it's a particular wi for canada and mexicon win for the u.s. europe i think will ultimately kind of fold and play along, but they are very different economies, so that becomes more
difficult. i want to ask about what you're talking about, the impact on trump's administration and the impact on the economy. this chart i find quite interesting. u.s. political risk is forecast to drop over the next month, which is interesting given the conversation about the uncertainties over the midterm election results. reports say global confidence in president trump is actually lower than global confidence in the likes of president xi and even vladimir putin. does that matter when it comes to the performance of u.s. markets and the extraordinary strength of the u.s. economy? oliver: i think it matter slightly. i wouldn't get that type of research is probably not very accurate, in the sense that a confuse confidence
with likability. having grown up in europe and having family in europe, i can tell you likability of trump and his policies is extremely low there. that certainly impacted that type of polling. at the end of the day, the u.s. economy is performing very well, much better than any other developed economy out there, if you compare it to europe, canada, mexico. mexico is still somewhat emerging. it is doing better than emerging markets on a risk-adjusted basis. asia emergingat markets are more favorable than non-asia emerging markets. at the end of the day, the reason asia why there's less political risk going forward is because the wide expectation is that democrats effectively neutralized some of the more perceived dangers policy steps that the trump administration might take and is able to take controlw as republicans
of the senate and the house. >> is it fair to say that if you looking at some of these asian emerging markets that don't have problems liketic turkey and argentina, for example, that you should be opportunistic if you are a longer-term or value investor? oliver: being early and being wrong essentially equate to the same thing, especially in the short term. we continue to be underway, but certainly the case to reenter the space, especially when looking at asia as opposed to rest of those markets is getting stronger and stronger, aced on a valuation basis. if you are an aggressive investor looking at the next two years, and there is a case to be made, but otherwise, be a little more patient. che joininger purs
shery: you are watching "bloomberg daybreak: australia." let's get a quick check of the latest business flash headlines. the rising oil price hurting the airline business. more expensive jet fuel is negative for cathay pacific, which raised employers revenue outlook. the portfolio seen as being resilient and the marine services division will only benefit if the oil price stays at a high level for the same period. armi: $.10 music streaming is offering ipo, preparing to
sell shares after reporting of first quarter profit drop following restrictions imposed by beijing. 43% in hong kong this year. and the first sports club to surpass a billion dollars in revenue. the club set it on a fraction over a billion dollars for the eight straight year it close with a profit. it was the figure in a row it broke its own income records. the club said one reason for the increase was the news cycle of payments for the champions league. next, jaye in at powell is staying the course, saying he's not worried about inflation despite record low unemployment. discuss the likely next move with the fed. this is bloomberg. ♪
haidi: it's a: 30 a.m. in sydney where markets open for trading in just about -- 8:30 a.m. in sydney. sydney markets will close down about 0.8% yesterday. the rba once again left rates on hold, a divergence between fed rates and aussie rates continuing to grow. i'm haidi stroud-watts here in sydney. shery: i'm shery ahn in new york, where it is 6:30 p.m. futures not really here or there, as you said. pretty mixed picture again. let's first get to first word news with jessica summers. jess? jessica: the new york tax
department says it is reviewing claims that much of president trump's wealth came from his father through what the paper alleges were, quote, "suspect tax schemes." the president claims he only got a $1 million loan. boss jack ma is warning the escalating trade war will be severe and long-lived. speaking of the world trade -- at the wto, he said president trump's policy would destroy not only u.s.-china business, but a range of small firms. he expects the fallout the last 20 years. the president has threatened to pull america out of the wto unless it performs in a way that is more beneficial to the u.s. september was a tough month for ford. sales of the f series pickup tumbled. that left the company outsold by
fiat chrysler for the first time in a decade. analysts say ford is struggling with aging suvs, collapsing car sales, and the king of the road f series suddenly finding itself the oldest pickup on the market. ford hopes the updated escape and explorer will help turn things around. beatingumped, despite production and delivery estimates in the third quarter. it sent out almost 56,000 3's ins -- 56,000 model september. it may be on track for an elusive profit. it is accelerating the building of production plants in shanghai. global news, 24 hours a day, on twitter,tictoc powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: thank you. we have asian markets opening now.
we, of course, have china and south korea out on holidays. asian markets fell for the last two sessions. here is sophie kamaruddin in hong kong. sophie? sophie: midweek, it looks like asian futures are pointing to a mixed session in the region with the nikkei 225 looking at its first drop in four sessions. this as the yen is trending above the 114 handle. we do have some markets off-line today, but india is coming back online after the tuesday break. in sydney, aussie shares could snap a two-day drop. keep an eye on -- the bloomberg commodity index rose to a three-month high. shares in wellington could extend losses for a third straight session. home price inflation slowed to an 11-month low. softer employment growth. themes,comes to carmakers very much in the spotlight. it was a hard month for ford.
that was the case for japanese carmakers as well, as they saw u.s. sales decline for the month of september. we are keeping and i on mazda -- an eye on mazda as it plans to get into the ev game. optimize operations in light of the nafta deal. haidi, after the rba held on rates as expected, the aussie slipped below 72. you can find this in the gtv library. this is the widest gap since ozzy was floated 35 years ago -- since the aussie was floated 35 years ago. the differential is only set to grow. 11%, sinceis down hitting a january peak.
the prospects are of a softer aussie dollar. this could be a boon for the rba, given that it could help ratchet up economic growth and help with hiring and wages. the rba might not need to cut rates. this backdrop has prompted a mid-2019, move by which they say is equivalent to about 25 basis points of loosening on the cash rate. haidi? haidi: soph, thank you so much for that. more on what we should be watching when trade gets underway in asia. chinese markets, shut for the golden week holidays, but the bears are back in hong kong. >> we saw a tough day yesterday in the hong kong equity market. we have fallen into the bear market with a confluence of things going on, all working against british investors in hong kong. property, property developers
have been the story in recent weeks. yesterday was very broad-based. that hong kong stocks have been underperforming the rest of the world for some six months now, which is very unusual to see that long, protracted underperformance. and the higher interest rates there, clearly pegged to what's happening with higher u.s. rates, starting to have a bit of an impact. some people were talking about the weak manufacturing print we got out of china over the weekend. the market was closed on monday, of course. yesterday was the first day that traders got back into things. the bears do seem to have the upper hand at the moment. sentiment seems pretty rocky. globally, things starting to kind of turn, in some places, italy, indonesia at the forefront of investor thinking. some of that rolls through to places like hong kong, which tends to get disproportionately sold off when we see these kind of eruptions flare up in the
global space. certainly today we are looking for a little bit of a rebound. we fell more than 2% yesterday. i don't think we will see all of that recovery, but we do see futures up 0.6%. we might see a little bit of a recovery. haidi: what about a recovery for the indonesian rupiah? given how bad it has been, can we have some hope that the worst is over? adam: well, certainly, the central bank there would like you to think that. they have been working hard over recent weeks and months to try and prop up their currency and kind of stabilized things. but i think as this chart shows well, bond yields and the selloff in the currency have been moving together. it has been very pronounced. we are looking at almost 200 basis points now on that 10-year yield relative to where we were at the start of the year in terms of the increase. clearly, the risk is growing. it is this kind of double-edged
sword of the current account deficit. the momentum of the trade, which is continuing to build steam. also the fact that oil prices are now really becoming a concern for people, sensing a real pickup in inflation. that swings it straight back to the central bank, and any efforts they are going to have to take to keep hiking rates. they have already hiked five times since may. sentiment is very tricky. it certainly looks like a continued point of concern. shery: thank you so much, adam haigh. you can find his charts on the gtv library, gtv on the bloomberg terminal. fed chair jay powell has praised what he calls an extraordinary u.s. economy where wages are rising, but not quickly enough to spur a faster pace of rate hikes. but that's not what moved the bond markets. kathleen hays is here with more. let's start with mr. powell's speech. what was his key takeaway?
anhleen: his reference to extraordinary economy is interesting. lookan see why things extraordinary. in the past, one or the other was always in place. what's interesting and important is he made it clear that he does stepven muted inflation in with continued, gradual rate hikes. let's listen to what he said earlier today. jay: the rising wages are broadly consistent with and served -- observed rates of productivity, and therefore does not point to an overheating labor market. further, higher wage growth alone need not be inflationary. shery: i want to show you this chart. he said in other remarks that the ground -- moving toward normalization -- what we have here is average hourly earnings, up to almost 3%. that goes back to the highest,
really, since the crisis. they have been higher, still, though, in previous decades. core inflation, just under 2%. wages have risen, but where is inflation going, right? basically said we need to have these gradual rate hikes because we have to balance the risks that are inherent in having such low unemployment and trying to keep inflation at its target. we know the white house, president trump has not been a fan of chair powell. he appointed him, but he was not the chief money chair that he wanted. at least they seem to see eye on eye when it comes to a couple of things. kathleen: if you listen to the white house chief economic advisor, talking about trade, they are on the right track, his view of the economy strikes out here. he thinks enormous confidence stemming from all the things trump is doing is helping to drive the u.s. economy forward. here's what he said.
larry: president trump just wants a boom. i think trade reform is part of that boom and will pan out much better than critics seem to think, as did nafta, or usmca. kathleen: we can say the chief economic advisor, president trump, and jay powell agree on how the economy is doing. just after the september rate hike, president trump said he was not happy about it. he thinks there are other things we can do with a windfall from this strong economy than raising interest rates. haidi: paying down debt, creating more jobs. he has lots of ideas about what to do with that. kathleen, we know about italy's budget problems. all of this has been happening since the new populist government was elected. there are contagion concerns coming to a bit of inflection point. kathleen: i think today, one of
the things that really struck a nerve, sending those italian 10-year bond yields to a post-20 14 high, the head of italy's budget committee in the lower house said that the euro arrangement is not sufficient to help italy solve its fiscal woes. let's jump into the bloomberg and look at one more chart. here we were back in december. look how tight the spread was between italy, portugal, and spain. greece, bond yields, way up here. the italian bond yields spiked around the election. now it is continuing to climb. look how much it is closing in on greece. not much contagion fear here, as you can see. bonds --selloff in after this selloff in bonds, same man said the he didn't mean to imply that he thinks they should leave the euro area, but it touched a
nerve, showing people are nervous about this, haidi. haidi: we will continue watching that story in the days to come. thank you so much for that, kathleen hays. still ahead, the challenges of doing business in china amidst this trade standoff with the u.s. and a slowdown in growth. we will be speaking to a former australian ambassador to china, geoff raby. this is bloomberg. ♪
back --elcome shery: welcome back. i'm shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. you are watching "daybreak: australia." back -- shery:besides washington agreeia nafta revamp, a u.s.-china revamp seems as distant as ever. -- how worried should beijing be? geoff raby is a former
australian ambassador to china. he is uniquely placed to talk about some of the issues they face in dealing with china. great to have you. i want to start by asking you, you split your time between beijing, parts of china, and australia, and globally. what changed in china? geoff: i think china is very much underestimating trump and trump's capacity to basically hold a hard line and build a constituency around it. i think there is a lot of deep soul-searching going on in beijing at present. in fact, on the ground in beijing, you are hearing a lot more discussion of whether xi jinping has overreached himself mishandled the china-u.s. relationship. at least in china, they put a huge store in how well that relationship is managed.
there is a lot of for flexion and great consideration going on. -- of reflection and great consideration going on. haidi: have you heard of things getting harder or easier for businesses in china? your clients are less confident about making long-term decisions? geoff: china is deleveraging and growth is slower as a result. i think everyone would welcome the deleveraging that is going on. you overlay that with the trade uncertainty. i think china will probably actually moved to make -- move to make doing business in china easier. they will have to respond. it won't be status quo. they will need to try and work their way around this. one way of doing that is to improve the environment for foreign businesses in china. haidi: we've had this renewed nafta, by any other name, if you will. the new trade agreement with korea, the structure of an agreement with japan as well. is there a sense that this will
embolden the trump administration? they have already said this clearly means are strategy on threatening -- our strategy on threatening tariffs works. is it going to work on china? geoff: i have not had a chance to look at the details of the usmca, as trump likes to call it. the new nafta. it is catchy. but he clearly is very pleased with that. what i read from other analysts is that there doesn't seem to be a lot of substantial change from nafta, but the pr and the optics are tremendously good for trump, and he is now turning to look at deals with japan and the european union. it's all intended to put a lot of pressure on china as well. haidi: exactly. you said it. there has not been anything substantive that has changed from the old left the to the usmca -- the old nafta to the usmca.
now you have the trump administration tying to renegotiate with the third-largest economy -- trying to renegotiate with the third-largest economy in the world. it's not the same as renegotiating with south korea. for how much longer can this administration throw its weight around in negotiating these deals? geoff: i think -- it can. the u.s. economy is still the biggest economy in the world. the market is massive. trump has shown that he is prepared to create a bit of habit -- havoc if he doesn't get his way. the thing i take a lot of --ouraging from, the usmca encouragement from, the usmca and the trump statement when he was announcing it, he was putting out a clear message that he is prepared to do deals. if we take the point that there is not a lot different, i do congratulate the u.s. and making progress against canada over its dairy subsidies, something australian and other agricultural countries have been
trying to do for a long time. he has made a clear statement that he is prepared to deal. the bar is not necessarily that high. i think we could all be encouraged by that. haidi: how much does that have to do with what the trump administration wants to achieve with china? reducing the trade surplus is one thing. trying to force china to change the way that it operates its economy, whether it's in subsidies and government managed policies, that's a whole different thing. geoff: absolutely. it's a bridge too far, and it won't happen. what sort of package can be put together that gives trump a victory to announce? and also makes some substantive improvements in terms of the openness of china's economy? there are trump forces within china who argue that china should be more open and more liberal, as it were, in terms of economic management. this is not a one view in china.
there is quite a big policy debate within china about where it should go. these things will end up in some sort of negotiated package. it is how much face-saving china can give to trump. in terms of market opening an improved conditions for investment in particular, china has quite a bit to give. haidi: what are you advising your clients to have these interests in china to do at the moment in terms of how they are positioning themselves? is it business as usual? geoff: yes. it is business as usual. take a long-term view. whilst the trade issues will have an impact on china's overall economy, i think the impact is going to be quite marginal. china has great capacity to counter the impact of negative -- the negative impact of trade through stimulus, fiscal stimulus, monetary stimulus. i don't think we will see growth falling off the cliff in china anytime soon. it's an economy that is growing
haidi: i'm haidi stroud-watts in sydney. shery: i'm shery ahn in new york. you're watching "daybreak: australia." amazon employees across the u.s. and u.k. are getting a pay rise. jeff bezos says the hike will take effect november 1. >> we've had a great year hiring and a great year of retention. but as we look forward, what do we want to be as an employer, what do we want our focus on pay to be, we got to a place where we can lead. that's what you want to move to the $15 in the u.s.
more.y inocencio with least for the united states and for u.k. employees, they definitely cheered. there was actually a video, of course, good for tv, showing the announcement actually happening. you could see all the workers raising their hands, clapping. because they are getting a rise up to $15. reportedly, there is something on the range of it from the federal minimum standard. you can see them clapping, as you would, too, if you got a substantial rise. reportedly $11, $12 might be what many of these folks are making, so it is substantial, three dollars to four dollars. in the u.s., 250,000 people are affected. including seasonal workers, that rises to 350,000. it also affects about 37,000 people in the u.k. you can see the numbers.
for the u.k., it is about 10 pounds 50 per hour. outside of london, it is a tad lower. jeff bezos himself was also saying, listen, this is something we wanted to lead on. you can see the quote. they thought heart. we are excited -- they thought hard. we are excited about the change. one thing i want to point out is that they said they decided they wanted to lead, but really there was a lot of political pressure. the realization that there was a tightening in terms of the labor market as well. bernie sanders had pushed back, saying that amazon was paying its workers too low, and pointed that a lot of them needed financial assistance. we've seen the employment rate continue to drop. that's begging the question that people need to start getting paid even more in order to make them competitive in this ever tightening market, haidi. haidi: so, is the wage inflation
aspect behind the timing of why they are doing this now? clearly there are other sources of pressure as well. ramy: taking a look at the federal standard, $7.25. in a way, technology does lead the pack, even if you look at what's happening in terms of the city level. san francisco leads, because of all the technology leaders that are there. in terms of the costs, though, for amazon, $1 billion to $2 billion is the cost, according to luke capital market. that's a drop in the bucket compared to their operating costs of $60 billion. we saw the share price fall a little more than 1%. with that said, looking ahead, folks are saying, they can continue to carry this on, because they are about a $1 trillion company. haidi: thank you so much, remy inocencio with the latest on amazon. we will be sticking around over the next two hours as the market
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>> good morning. i'm haidi stroud-watts in sydney. >> good evening from bloomberg's global headquarters in new york area i'm shery ahn. >> and i'm sophie kamaruddin in hong kong. welcome to "daybreak: asia." >> our top stories this wednesday, asia-pacific stocks set for a mixed start after a volatile session in new york. saluting america's extraordinary economy, saying low