tv Bloomberg Daybreak Australia Bloomberg November 13, 2018 6:00pm-7:00pm EST
multiyear declines as opec warns demand for crude may slide more than expected next year, but investors see a glimmer of hope. the white house confirms the u.s. is talking to china at all levels. >> we have breaking news out of south korea, the unemployment rate coming in at 3.9% for the month of october, below estimates that it will stay flat at 4%. that was also the figure for the previous month. so it is a better-than-expected unemployment rate, lower at 3.9% in the month of october. there were some concerns about the labor market, of course. we have seen some corporate restructuring and industrial sectors that have hit jobs in south korea that rose to a 4.2% high in august, the highest in nine years. it has slowly been declining since then and for the month of october, coming in at 3.9% and
hadr than analysts expected. let's get a check at how markets ended. the u.s. trading session on this equity markets. we could see trade tensions easing between the u.s. and china, but it was offset by that plunge in crude prices. we are already seeing some oil stocks in sydney take a hit. extending tuesday's decline when it fell by 1.8%. the outlook not looking too rosy for oil. trimmingoney managers their forecast, but some money managers pointing out we are not surplus fromthe
2014 in the making. we have had the jobless rate come out from south korea and in hour, japan expected to post a slowdown in third-quarter gdp. we00 a.m., hong kong time, will be getting a check on china's economy. sri lanka'snoon, rate decision do this wednesday. third-quarter results do after the market closes. we will see how much of an impact regulatory risks from china have had on company earnings. than $200lost more billion in market value since january. >> let's get you the first word news with jessica in new york. >> thanks. have.k. and european union agreed on brexit.
theresa may must still drug the deal past her cabinet. five hardline skeptics have agreed to support it. is expected to be put to a vote wednesday. the trump administration to ramp up the pressure on iran with the forcing aof commission. -- john boltont reporting that iran is under pressure and it is the u.s.'s intention to squeeze them "until squeak." to filehired attorneys suit against the trump trump,tration, claiming chief of staff john kelly, and
press secretary sarah sanders acted unconstitutionally by revoking the credentials of correspondent jim acosta. tweetedident has condolences and prayers for victims and the california wildfires. he also thanks firefighters for their courage. his earlier insistence that forest management was to blame disaster fueled backlash to say most public woodlands are actually federally managed in the state. 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. >> thank you. let's get right to the plunge in oil. a 7% plunge in west texas was the biggest one-day drop in three years. su keenan is here with more. also a record -- 12 consecutive sessions of losses. on the you do not see
other side of that is those very skittish -- that's the word .eing used -- one managers what you see in the big picture is how severe the drop is. it has been building ever since the announcement of sanctions on iran and speculation if that would be bullish or bearish for oil, and the fight began. if you look at some of the , we will geton into this when we get to stocks, but let's go back if we can into the one-week chart of oil. there we are -- the energetic selloff. look to the far right and you see this selloff has not been this sharp really going back to longwhen we talk about the string of declines. we have not seen that since the
1990's, so there are a generation of oil traders that have not seen these kind of losses. let's talk about some of the other factors. talked aboutder how it really started to kick into acceleration mode, this selloff. over the weekend, there were big questions about what opec would do, and the dire forecast that .eally has raised questions a lot of technical selling, bears adding to their short position. many of the macro traders pulling out there long positions, and what you saw was support level after support level broken. what one trader called total capitulation. do not see that every day. >> what is the outlook from here ? are we hearing much from oil companies? >> what we are hearing from oil
companies is that there stocks are way down, but if we look at that their market we fell into, it has just accelerated in terms of losses, and a lot of these charts are very bearish. chart watchers fascinated because the question going is if support can hold. oil stocks have already given skittish fields to investors who ran from a lot of the stocks just like traders ran from their positions and commodities. some of the drillers took eager hits, but all the major players down in a very big way. say, the biggest sector decline on the s&p 500. >> su keenan with a look at the bloodshed we had overnight. markets enjoyed a moment of optimism early on as the white house economic adviser said the
united states and china are communicating again on trade at all levels of government, but he on talksto speculate leading up to the g20. >> the president kind of reopened china talks, which i will not say they stopped, but they slowed down, when he called president xi, and it's clear now at the g-20 meeting in our but -- in argentina, there will be talks between the two leaders. >> let's get to a sheet and where our reporter is watching all of this. on what the u.s. wants out of china and if it's possible to find a consensus, right? >> that's correct. as we heard from larry kudlow, talks have resumed at "all levels" between the chinese and u.s. over the trade impact, but are steep.s
the u.s. has been seeking what it calls structural changes to the way china approaches its trading relationship to the u.s. and its economy as a whole. speaking to "the washington post ," vice president mike pence said the u.s. is looking for something substantial, something concrete to bring back. in the past, we've seen that even concrete proposals sometimes do not cut the mustard with the president -- sometimes do not cut the muster with the president. but they are talking, which is the first sign of progress in this dispute, and this happens before president trump meets with his counterpart in argentina at the end of this month. >> we know all of this can change with the turn of a tweet. how close are we to a deal? >> on the one hand, the demands the u.s. has for china are very steep. within the white house, there is a division over those pushing
more -- pushing for more of a deal including larry kudlow and treasury secretary steven mnuchin, but you also have a very hawkish wing represented by peter navarro, who warned in a speech that only president trump could make the final decision on any deal with china and that only trump and u.s. trade representative robert lighthizer should be negotiating with beijing. of course, president trump will be dealmaking and meeting face-to-face with a leader he has touted his personal relationship with, but given the steepness of u.s. demands, it's hard to see that much progress will be made between here and then. >> with the summit between vice shinzo abe,nce and mike pence had criticism for japan talking about trade barriers. does this mean we could see auto
tariffs back on the table? when prime minister abe was back in the u.s., they said they would not the putting -- not be putting auto tariffs on japan as long as trade discussions continued between the countries. >> it definitely signals there is tension tween these countries as they seek a trade deal. japan and the u.s. our allies, but they are under increasing pressure to reach a trade deal, and japan is squirming as president trump raises the prospect of tariffs on auto imports. we saw a report the white house on theculating investigation into potential tariffs on autos in the name of national security. that has to amp up the pressure. it's just another sign the white house is willing to take on allies in its continued renegotiation of the trade deal the president perceives as , and again, we see that
sight. the pound reacting positively after three days of declines. are we getting ahead of ourselves given the uphill battle theresa may still faces? >> there has been such a earth of information, so maybe it is not surprising the pound did see its highest level since april against the euro. however, it is clear now that they are moving ahead. there will be a cabinet meeting tomorrow to discuss the draft deal, and the question is if theresa may can convince her cabinet that the whole thrust of brexit is leaving the european .nion there could be a special u.k.-eu summit on november 25. votes she needs to fight for -- doesbrexiteers who say it
not go far enough, that they will be tied to the eu for way too long. there's also bureau files in the group opposing it. they are still worried about sovereignty, and then there's partymocratic unionist for northern ireland. everyone is worried about what will happen to northern ireland. tories, break away from the eu, you got to do it 100%. pro-eu conservatives were giving away too much and this irish border deal is a deal breaker. a lot of people saying we need a second vote. former foreign secretary boren johnson called on the cabinet minister to resign today. he is an opponent big-time of theresa may on this. in terms of the market response, because theyy fell
say if this moves ahead and a deal will be agreed and we do not get a hard brexit, the bank of england could be closer to more rate hikes. of the action we are seeing in the euro, we're still watching this saga. other populists -- are the populists winning? >> that's a good question and i would say maybe they are. they are still standing up to the european union. insisting they will get growth this way. the ball is now in the court of the european commission because they are sort of defying the rules of the eu. delicate balancing act. we will see where it has next.
guest is underweight european equities and bonds. our next guest -- great to have you. i want to start with a recalcitrant italy. it has been piling on the debt. debt to gdp for the nation has continued to rise. the situation we find ourselves then, perhaps not surprising, but is there a sense you have the italian populists trying to make an existential point for the european union? the commissioners, are they going to be able to stand up and do they need to make a point of their own that they are going to enforce fiscal discipline within the eu? .> is a very tricky question
a lot is written on how the negotiations are going. from our perspective, we're looking at this from the sidelines and waiting for an , but we can see it is more likely. i think a deal will be done eventually, but how we get to that deal, the more pressure comes on the euro and the italian bonds, we're not sure. we want to wait on the sidelines until we get clarity on what deals can be made. ? what about brexit then do you have a greater gut feeling that this is the beginning of a breakthrough? look, steps towards getting a brexit deal is always good. chart ofyou showed the what parliament needs to pass the bill. i think that is the next hurdle
they have to get over. that it is going to be tricky for the government to get this through in the form that it is and indeed the way the government is formed at the moment. markets here about in asia. we're seeing a lot of pressure coming not only from red tightening but also volatility. crude prices falling now and so many other reasons like trade tensions as well. analysts have been cutting the estimates for 2018 profit. at asiantake a look markets, is there anything that you like and that is being supported by earnings growth? because very difficult much of the company earnings are being driven by the dollar side
of things, so it might take some time to figure out where trade is going to be hit hard in terms of topline revenues, but also, you are going to get an outlook from a stronger dollar and dollar earnings that asian companies have. we expect volatility to increase over the next year as the business cycle matures. there's a big debate about if we've seen peak earnings. earnings are expected to slow. economies are expected to slow, but slower growth is not necessarily slow growth for the world next year. strategies such as looking for value within asia is a winning strategy. also low volatility strategies theyocusing on areas where
should benefit from the environment we can expect next year. >> we are getting louder and louder voices suggesting this trade is going to intensify, that terrorists will be increased, that there will not circuit breaker. is that sort of your view as well? >> i think so. we have to wait to see what happens in the g20 at the end of this month. if there are new stories and politicians who seem to say we're talking on both sides trying to hammer out some sort of agreement, but, you know, as we see with what has gone on with the midterms, then the republicans losing the house last week, efforts on domestic policy might be stifled by politics, which means that trump may focus on other things such
as the trade war with china. >> thank you so much for joining us this morning. you can get a roundup of the stories you need to know to get your day going in today's daybreak on the bloomberg terminal, available on your mobile. you can customize those settings so you just get the news on the industry and asset classes that you care about. this is bloomberg.
hughes is selling more than 600 million shares. the company plans to buy back the shares in a company -- in a move that could raise about $4 billion. >> boeing slumped on week cow 730 for the cash seven, compounding worries about an of skier safety feature linked to the fatal crash in indonesia. low shipments last month put boeing at risk of missing annual targets. bloomberg intelligence says it needs to deliver 72 737's this month and next to hit their target. >> the cofounder and chief executive of indian e-commerce lipkart has resigned after allegations of sexual assault. there is some confusion about the allegations.
my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. >> it is 10:30 a.m. here in sydney. markets have been trading for about 30 minutes. this is what we are seeing in terms of trading. a great deal of direction. of course, we had twin forces in trading action. downe seeing energy sales by just over 2.3%. >> these after-hours u.s. futures looking slightly higher, up 5.5%. fallingee the s&p 500
for four consecutive sessions. >> no respite here for investors. let's get you to first word news and jessica summers. house sayse white the u.s. and china have resumed contact at all levels and that presidents trump and xi will talk trade when they meet an oslo. larry says it is better to talk trade than not to. the leaders will meet in buenos the month.e end of >> we are now communicating at all levels, and that is a good in. the president kind of reopened the china talks which had -- i will not say they stopped, but down.lowed
it is pretty clear now that at the g-20 meeting in argentina, there will be talks between the , and at whatever other meetings, trade will be included. >> oil slumped the most in 10 years as opec projected demand for crude falling even more next year. the gloomy outlook may lead to significant supply restrictions announced at opec's next meeting in december. italy and the eu remain on collision course. the populist government is determined to defy brussels over its spending plan. the coalition says it will stick to its growth and deficit target despite the budget being rejected by the commission for breaking eu rules. may now trigger disciplinary action, which could lead to fines of millions of
euros. greece said to be working on a banks cut back debt. lenders would transfer the claim to a special vehicle which would then sell bonds and use the proceeds to buy some of the bad debt. the bank of greece will release a detailed discussion plan next week. 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. >> thank you. you are seeing u.s. futures slightly higher after we saw tech shares rally and energy shares slide on the tuesday session. >> that uptick in u.s. futures is not moving through to sydney
futures. the wage priceon index for a third quarter, plus a potential announcement from the government of a one point or billion-dollar fund. this morning, energy players are , anding their u.s. peers among the laggards, you have beach energy, falling the most since october 11. highlight weaker forecast earnings forecast on higher input costs. headed for the lowest close since 2014. we have a half-hour to go before the start of cash trade in tokyo and then come down to gdp data from japan, want to highlight what is going on with the topic after the benchmark l more than 2% on tuesday. when you look under the hood, it's companies most exposed to
the terror fights leading those declines. prospects of u.s. trade policies targeting japan will not help sentiment. mike pence has criticized the u.s. trade deficit with japan during his japan visit. some are seeing a silver lining. tacticalast of a rebound, but on the other side the spectrum, allianz saying it is too early for optimism. >> we are just about 15 minutes away from that third-quarter gdp from japan. contractingseen as thanks to natural disasters and slowing growth in china. also looking at key
manufacturing, we've had investment numbers out of beijing later on today. let's look at what we should be watching. japan first. natural disasters aside, what is the trend going to tell us today? >> it is really, as you mentioned, twin pressures in japan. course, there was a natural disaster effect, which meant exports out of japan were much slower, and it meant that investment was not where it should be, and the end result has likely been a contraction in japan's economy over the third-quarter. i think the view, though, is there should be a rebound in this third quarter. are some signs of resilience on the investment side of things, so we are looking at -- expecting a
japan's economy in the third quarter, but equally, it is expected to rebound in the current quarter and revert to the mean, so to speak, over coming months. >> the biggest decline is going japane through trading in . factory production-related names, manufacturing names as well. we are going to get a pretty good indication of how china is holding up today. >> we definitely will. exports are china's doing ok because global demand is doing ok, also, but we are seeing some slumps. on investment side of things, we are not seeing too much to write home about on the infrastructure spending side of things and we know, for example, industrial production is certainly slowing signs of slowing.
the numbers point to an ongoing slowdown in china's economy and that will build expectations that policymakers have so much more to do. a lot will also depend on where these trade talks go. if some kind of framework is negotiated and agreed, that will certainly lifted cloud off china's economy and take pressure off policymakers, but of course, that is not agreed and we are headed toward more tariffs and higher tariffs. >> you mentioned auto sales. they take up -- what? 10% of sales numbers. we get those in a few moments, but what could that tell us about the health of the chinese consumer? it can be skewed by different factors such as tax incentives and the like, but the overall consumerthe chinese saw growth but is showing signs
of weakening now. economist -- i think there is a feeling -- again, it goes back to the trade story in earnest. if we see any kind of breaks from there, that will lift a cloud off the consumption side of things. i think the critical story for the chinese economy remains the talk of g-20 and what kind of framework and commend of it over the coming weeks. >> thank you very much. the u.s. and all over asia, a series of earnings from tech, commodities, and food. a recap and preview of more to come. >> let me give you a quick roundup of what i've been looking at. foxconn reported earnings and missed estimates.
we could call this sort of the apple drag based on what we've been hearing from momentum. take a look at the top year to date, just buy a little over 37%, especially with all the things that have been happening over the past year. terminalthe bloomberg because i want to show you the function. as the share prices fall, tiger prices also fall. what i think is most interesting is that in yellow, this is the most holds we have seen since this company has been public. a lot of people saying hold on, wait a minute, we have to take stock of what is happening. in green nearbuys their lowest level. to nobleo go on oval because noble group, we know
what has been happening with this stock over this past few years. noble now saying that even aough it got a little bit of bump from aluminum prices, a drag from its core cold trading business. of can see the total loss about $99 million. that's not a lot, right, when you compare it to the last several years of several billion dollars of losses, but this is really continuing the narrative of them trying to get out of this restructure they in trying to do. finally on over to tyson, the chicken, pork, as well as beef production making company. this is a china trade story. in its guidance for 2019, for
the fact that there is just too market.t in the u.s. let's pull of revenue growth. you can see that starting to go into slowing growth here, and you can see that ever since december it has been down, down, down. one interesting thing is its new ceo said that because china does not have any -- anything to do right now with tyson foods, that it is all upside at this point. really interesting stuff. when you start with zero, anything is a good thing. >> thanks so much for that. coming up next, we will talk to council's business president. this is bloomberg. ♪
>> this is "daybreak: asia." asean nations10 as well as six others gathering this week. our next guest believes they have plenty to do over there. >> we have the trade tensions front and center, given the escalating trade war, and the impact it has had, set to check on how that is impacting u.s.-asean relations. how have these relations been impacted by the u.s.-china trade wars? >> i think they have been strengthened in some ways because the united states is doubling down on asean.
the administration has made it clear that it's key to their policy. ,rom a business point of view the trade war is really having an impact here. look to it to mitigate the supply chain coming out of china. >> president trump has chosen attend this meeting. how should the region read that? >> is disappointing he could not make it out. he has been out already this year, but we are excited to have vice president pence with us in singapore. the vice president is a step up from the last time a u.s. representative could not come when the -- when president obama secretary of state
kerry -- when president obama sent then secretary of state kerry. what do you expect? >> they will be looking for u.s. meatrship, looking for the around the strategy, looking for specific trade and economics deliverables, and i think the vice president is going to arounde some things energy and infrastructure when he gives an apex summit. lookinghink we will be for u.s. leadership in geopolitics and the south china sea and the vice president will reiterate that we will continue work on navigation as we do throughout the world. kind of growth can we anticipate in the coming years?
>> growth and trade has been continuing. the key is how much additional u.s. exports will be generated. we have about $73 billion -- i think our deficit is found grow as people adjust the supply chain and look to southeast asia. consideringmembers tweaking, maneuvering their strategy? >> not only our members, but also chinese companies, european companies. everyone is looking at what they need to do from a strategic point of view should the trade war continue. >> what is the outlook for trade ? >> tptpp has no seven countries having gone through the full
process of ratifying it for the legislature, and that is exciting. japan is one of those seven countries. vietnam is another. singapore is another, and those countries will have unique access to each other's markets and for the american companies that are here in any of those seven markets that will also get access. >> given the current situation where the u.s. is having a trade war with china and given that , could its out of tpp eventually come to bite the u.s. economy? >> from a u.s. business perspective, we were very supportive of tpp and we think it is a business and strategic loss for us. we think at some point we will somehow,-- reconsider but we are excited the president move forward with
new strains of negotiations. he has an ounce with congress he plans to enter into negotiations with japan. there has been move forward with new strains of negotiations. rumors about the philippines. vietnam is maybe a step behind the philippines. .> alex feldman speaking to us >> thank you so much for that. just getting japan third-quarter gdp numbers crossing the bloomberg. a little bit worse than expected. the annualized quarter on .uarter number sought a decline the quarter on quarter number is a contraction of .3%, as expected, falling from a .7% gain. .e do see that rebound
nominal gdp seasonally adjusted, .3%. we are seeing private consumption falling a little bit as well as business spending falling where we were expecting a gain. stories about the china slowdown, the impact of the trade war, but we also have to the in mind we did have effects of typhoons which would have had an effect on airport closures as well as loss of life as well as damage to other infrastructure and investment. >> typhoons and earthquakes affecting a lot of the data that has been coming out of japan, but suffice it to say this annualized gdp contraction meaning that this is really lower than the boj's estimates of economic growth potential at 0.8%, which would be needed in order to get consumer price pressures to build, so this will inflationon pressures. core cpi came in at only 1% year
on year growth, and the boj growth continuing its massive easing measures. know that their source of assets is bigger than their nominal gdp of 500 ¥50 trillion. really a big conundrum when it comes to the boj now with third-quarter gdp numbers contracting. >> that number which does look pretty bad is actually the worst we have had since 2014. without about the decline in oil prices. .hat will cause further issues we are going to get a lot more analysis on that gdp inflation out of japan. plenty more ahead on "daybreak: asia." this is bloomberg. ♪
latest business flash headlines. disappointing earnings from an apple supplier of the latest sign of weakening demand for new iphones. incomeuarter net reported of about $800 billion, 12% below the average estimate. they join a string of apple supplier's warning of a worsening outlook as iphone volumes plateau and a lethargic smartphone market. >> credit agricole is working on a deal that offers five structures and for currencies. china once to transform the greater bay area into a high-tech megalopolis to rival the silicon valley -- china wants to transform the greater .ay area
>> a backer said there's no point in being in one world. other partners view qatar as a threat. >> we just had that pretty negative japanese third-quarter gdp, suggesting further downside and we will really need a pretty brilliant chinese data outlook to improve regional sentiment. the nikkei falling about 2%, as much as of the 3% of yesterday's session. also notese yen getting as much as you might expect, perhaps suggesting its luster is a safe haven is starting to decline at the moment. we're about 15% down from the january 26 high. if these declines continue, you see these japanese equities
inching pretty close to bear market territory. >> which is interesting given that the japanese yen has been pretty weak, trading at a pretty high range of about ¥113, right? even today after the gdp print really not doing that much. the asiana look at markets. a bit of a mixed picture when it comes to volume for a second consecutive session. nikkei futures slightly higher as well. the cost of these futures unchanged. up, find out how the latest growth numbers out of tokyo will be affecting bank of japan policy. we joined by a longtime japan investor who will also be
haidi: a very good morning. i am haidi in sydney. scarlet: good evening from bloomberg global headquarters in new york. i'm shery ahn. sophie: i am sophie covered in hong kong. welcome to "bloomberg daybreak: haidi: our top story, asia-pacific markets are upset by the dollars plunge. falling from 18 month high.