tv Bloomberg Markets Asia Bloomberg February 28, 2019 9:00pm-11:00pm EST
rishaad: the deal seemingly on the table just evaporated, didn't and it is gone, what are we doing? back to trade talks. refocus back on fundamentals, in terms of the economy. the chinese markets, the volume we saw there this week is a very good sign it could continue. the next upside will depend on the same factors that drove all of the equity into the market. -- ms cithe big news got the big news that there will be pushing to 20% which the market has been pricing in already. look at the floo foreign inflows into the asian market. every day in february we saw foreign investors become a net buyers of the shares. it will be a key question
whether these gains can continue. we will talk more about that later. here is our sizing up when it comes to this friday. we are still seeing solid gains when it comes to the likes of japan, australia up about half of 1%, indonesia online coming up for tenths of 1%. wise we are seeing a little bit more risk appetite coming back in japan. seeing a little bit of a little bit after geopolitical tensions when it came to hanoi. no trade deal between the u.s. and north korea. larry kudlow talking overnight about how the u.s. and china are close to reaching some type of historic deal as well. the pmi data out of china, looking much better than expected. 49.9 when it came to manufacturing.
sawing better than what we with the official data we got yesterday. it suggests the private sector is showing a little bit more of a recovery. taking a look at china stocks as well for the month of february, sizing up with some of the major benchmarks in the world. china comes out on the top. from the worst we saw more than a 20% loss in 2018. now we are seeing the 300, the number one spot when it comes to february when it comes to the likes of southeast asia, japan, the s&p 500, it outperforms in a big way. what has been fueling this? we were talking about the margin financing earlier, these shadow banks, the shadow banking firms are calling up investors. they are placing ads and offering up loans with 10-1 leverage ratio. we are fueling why
seeing the margin financing the last few weeks in february sizing up here. take a look at that peak up there which has been with the gains we have seen on the csi 300. the milestones we have been reached are remarkable. the ¥1 trillion turnover, about 150 billion dollars. we are marking eight straight weeks of gains for chinese stocks. >> we are talking about china. we are down quite a bit in the overnight. we are not at the lowest level since 2014. it is -- the magnitude of the move is the most since 2014. it just underscores really. ashaad: we have that data well. showing plentiful supply of cash and liquidity. you don't need to have such high rates. that is essentially what we are talking about here. we will keep watching that one. >> the pricing numbers we got
earlier, the smaller businesses, we are starting to see -- rishaad: we are in contraction territory. >> a little higher than we expected. is a stark contrast from what we had yesterday, the official number which was quite bad. let's get more details from tom mackenzie. he has been pouring through the numbers. what can you tell us? said, the liquidity environment, the financing pressure that seems to be for the small and medium-sized enterprises. that is part of the narratives and policymakers from the last few months. we want to get more liquidity to the smaller and medium-sized in the private sector. if you look at the official pmi from yesterday and contrast that, it suggests that the story now is a starting to solidify in terms of less of a focus on the soe's, the official numbers focus on that section. numbers came in
smaller than expected. 49.9, still ua contraction. were upthe new orders for the month of february. the highest reading since november of 2018. of course, as i said it comes on the back of the official data. the demand picture domestically and externally as well as part of the focus. we saw the numbers in january in terms of exports ticking up. there is a concern that may be the inflationary environment is still sluggish and that will put a drag on profitability for some of the corporate. overall, most economists seem to think things will bottom out at least around the second half of the year. >> tom, thank you so much. he is live for us out of beijing. how does that play into the markets because the other big stories is msci which announced
it will be expanding. the benchmarks tracked by a lot of these investors, this decision has caused goldman expect $60 billion to come into the markets. rishaad: you would approach with a little bit of caution, wouldn't you? >> always. rishaad: you are saying msci is not a big deal, why? they only own about 2% of china's stock market. goldman's number is very impressive. the stock market is huge. it has a $6.4 trillion market cap. following the new benchmark and they will go to china, that is only 1% of the total market cap. the thing we really need to investors still own
20% of china stock market and insiders. company founders, management, and holding companies are the majority shareholders of china's stock market. >> we know what they are selling. we talked about this topic earlier, you saw the rally but the sign that you have the owners and vested interests, why are they selling? is that necessarily a reflection of where the market will go? think china's private enterprise is still very unsure about the economy. the running joke in china is the private enterprise has one foot in and the other foot out. i get the pmi number is ticking up a little bit but you still share the anecdotal experience that they are moving out of china. that they are only buying industrial and they are not really buying into equipment machinery. this is what is required and that is the future.
, for instance, the local government financing vehicles can still issue bonds. the high yield, private companies have trouble. breaking news coming through. this is as barrick tries to by newmont. they have no intention to raise the offer. this came up at the beginning of the week on monday with a negative premium. takeovers called desperate and bizarre. it was actually a negative premium at 17.8 billion. a hostile deal. we will tell you about these tensions between islam and new delhi, will we have a breakthrough? let's get the first word news. su: the indian air force pilot
captured by pakistan may be released later friday. it is not clear that will help reduce tensions to the nuclear armed neighbors. prime minister imran khan says he will free the officer as a gesture of peace. adding hopes that the international community will help ease the relations. u.s. secretary of state mike pompeo says he has talked to both sides and is calling for calm. netanyu is being indicted in an investigation that could end his career. it is the first time a sitting leader has come so close to charges. this comes seven weeks before what is expected to be a closely fought general election. itimen netanyahu has denied and describe the investigation as an unprecedented witchhunt. some prominent new york figures are pleading with amazon not to
abandon its plans. morgan stanley boss james harmon, mastercard's representative and former mayor david lincoln have written an open letter to jeff bezos, urging him to reconsider long island city and queens. new renault chairman is said to be replacing at least two members of the board amid a shakeup of governing in the post carlos ghosn era. we are told the wife of former u.k. prime minister tony blair will not be reporting. a top independent director will leave in june because of his age. they want the board to be more of an operation that it was under carlos ghosn. powered by more than 2700 journalists and analysts in more
chance to negotiate. up withugh we have come a deal that we have never offered in the past, the american government still will not take off the sanctions. it concerns me that our chairman will continue the negotiations with the u.s. i cannot assure this kind of chance will come again for the american government. >> stephen engle, our chief north asian convert -- correspondent has been in north asia all week. this time yesterday, we were talking about a potential deal coming together and of course we all know what happened. what are the key takeaways? stephen: it changed pretty quickly. the night before when kim was withng towards the meeting donald trump. there was a lot of optimism that they could move the ball forward on that clearly watered-down declaration that they produced
eight months ago in singapore, in june. that quickly fell apart. you could rightfully say that things are in disarray. it is a setback. there was a planned working lunch which was abruptly canceled. there was a planned a joint statement and signing ceremony abruptly canceled. when one side of the negotiating table gets up and walks out and leaves theome, that negotiation process in disarray. is it the end of the process? absolutely not. they will continue to talk. the north koreans are refuting some of the allegations from donald trump who said yesterday at a press conference for he boarded air force one that the north koreans wanted all sanctions removed. that the united states was not willing to go that far. the north koreans, in a news conference late last night which bloomberg news was up just -- ad in said we did not
participant in. we said it was an offer that might not come around again. aey offered realistic -- realistic proposal. they wanted a real elect station -- a relaxation, not all of the sanctions. nevertheless, the talks ended in disarray and that is where we are right now. rishaad: please stay with us. we are going to get over to washington now. we are going to bring in robert king. thank you so much for joining us. we have this disconnect from a hud noise and washington. on top of that we had a summit take place where apparently, there was little or no groundwork was undertaken. what went wrong?
abert: i think there are number of things that went wrong. you highlighted the fact that the preparations were not particularly well done. part of it is that for both north korea and the united states there are leaders who tend to be involved in making the decisions. they don't want to leave those decisions up to anyone else. i think there was a concern certainly that this might have been the problem. that there was not enough time allowed. there was not enough leeway given those who were involved in terms of making the decisions. donald trump is a real estate investor. when you are dealing with real estate, you buy, you sell. you don't have to have a relationship. all you have to know is if they have enough money in the bank to follow up. when you're dealing with diplomacy, it is more complicated. i think he found that out. jong-unther hand, kim may very well have overplayed his hand with the information that was coming from a
washington yesterday about the michael cohen hearings and the problems he was raising. wasmay have felt trump willing to accept any agreement offered and there may have been miscalculations on both sides. let me ask you, do you think the white house perhaps might have already had this baked in the pan to walk away if the north koreans did not come up with a better proposal and that donald trump took a lot of consternation for a watered-down statement eight months ago and that was the plan all along? it may well have been. trump's part of the deal, which explains how you negotiate suggests you have to be ready to walk away. he may well have done that as a bargaining tactic.
hard to believe he wanted a failure. there certainly seems to be a real possibility this could create difficulties that will be more complicated to overcome. david: kim jong-un, who was on his way back might stop over and meet president xi jinping, to that idea of where we go -- where do we go next? negotiation 101. no the point at which you and the person across him you will walk away with the tables. thethat we have an idea of limits and parameters, what do you think will be the talking points if we do find ourselves at another summit? robert: it seems to be very clear that both hanoi and washington are indicating an interest in continuing negotiation.
i think there will be some regrouping on both sides in terms of looking at where we are, how far we got, what the possibilities are for moving ahead. i hope there will be an opportunity for other individuals to prepare and get something in place before you get the two leaders together. stephen: does the fact that there has been some -- let me ask you about beijing's new role. there has been some consternation between the united states and beijing over trade. you think this could impact negatively any restart of talks with north korea? robert: china clearly plays a key role. most of north korea's foreign trade comes from or through china. 90%. china is a key player in terms of the sanctions. the role china has played in
supporting the u.s. sanctions have been the reasons they have been so effective. probably more than anything that has led to improvement in relations between the chinese and the north koreans. to beijing has been several times in the last 12 months. he did not visit beijing during the five years before that. to improve is hoping the relationship with china in hopes of being able to deal with this issue. i think china is going to play a role in the process. the fact that trump has provoked the trade conflict is not particularly helpful. rishaad: last question, quickly here. we had some of this overshadowed by the michael cohen testimony in congress. many people say it was vengeful at the end of the day. whether hes to ask has any credibility, considering beside donald trump
while not president, as a as fraudster as he put it, and a racist, as he put it. robert: he does speak with some experience. he is a convicted liar. part of what he is attempting to do is redeem himself. he severed his ties with trump. he is going to prison. he knows that is going to happen. what he is trying to do is set things right before he goes. clearly, it you don't accept what -- you do not accept what anyone says, particularly at a liar without making an effort to follow up and see if they are true. i think that is what congress will do. the democratic leadership of the committee will continue to follow through on issues that have been raised and follow-up if what michael cohen is
claiming about trump is true. it is interesting because the republicans made no effort to defend the president. they made every effort to undermine the credibility of michael cohen. the democrats were looking at what does this tell us? what are the issues we need to follow through? appreciate your time, thank you for coming on the program. former special envoy for north korea human rights. lots more coming up here. this is bloomberg. ♪
market. placesiness is not yet in and the decision still has to be taken. it in china but the pitch was rejected. david: the owner of british arways has decided to order shipment to replace its jets. they will take 18 of those plans. agingurrently have 34 747s which are due to retire in the next seven years. iag preferred boeing. it gives the triple seven program a lift. rishaad: southwest airlines jumping the most in a month amid speculation berkshire hathaway is considering a takeover. rumors first showed up in a tweet but the talks were called unconfirmed. -- it is then the
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>> it is 10:29 in hong kong. force pilotir captured by pakistan may be released later friday. it is not clear if that will help reduce tensions in the nuclear arms neighbors. president imran khan says he will free the officer as a gesture of peace. adding he hopes the international community will help ease cross-border relations. u.s. secretary of state mike pompeo says he has talked with both sides. indian growth slowed in the fourth quarter with a global slowdown and tighter domestic conditions, now worsened by conditions with pakistan.
it is also slightly below estimates and down in the september period. economy demand her an where domestic spending accounts for about two thirds of gdp. cooledu.s., the economy be strongerth could for longer. analyze gdp growth rose 2.6% through the december period. that compares with estimates of 2.2%. the commerce report says the tax cuts may have helped. said to be chairman replacing at least two members of the board. announcement of a shakeup in governments -- governance and the post carlos ghosn era. we are told the wife of former
u.k. prime minister tony blair will not be returning at a top director will leave in june because of age. boards say he wants the to be more of an operation that it was reportedly under ghosn. than 2700 more journalists and analysts in more than 120 countries, i am su keenan, this is bloomberg. rishaad: just getting some headlines coming through at the interviewm this conducted by sean hannity with john will trump -- donald trump. he said kim was very good", i like him. this on top of saying that kim is a very smart. real character. nothing really some stance of -- ubstansive kim. telling me
he would not test missiles and i believe him. a little bit more about him now. the big talk now is the u.s.-china trade war. donald trump talk about short-term wins. longer-term optimism. retaliationnese tariffs appearing to be hitting u.s. exports harder than chinese. this according to a new study by the iif. they are costing the u.s. about $40 billion a year in lost exports. we have a guest in our studios to talk about the damage. see easily is the hit to exports for countries.
what is not too obvious is the cost to business. you looked at this extensively. you talk about a lot of your big customers. summarize the hit to business. gerry: that is a great question. back in december, we were talking about this topic, we had surveyed 200 u.s. executives. that ceos worry about the situation and 60% say see a negative impact on the business already. that translates into real dollars. we expect to see a billion dollars and $10 billion to be hitting the consumers either through the cost of the tariffs or the supply chain getting more expensive. the threat is real. still imminent. meid: does it make sense for to worry about cost, we could get a trade deal, we don't know
if we will. it might not make sense in hindsight at some point? gerry: changing the supply chain, is a perfect time to do that. the trade dispute will not go away anytime soon. today is the first of march, it has come and gone. no decision yet. we may get a trade deal closer to the summer, will be comprehensive enough to get us to where we were before? probably not. right now is the perfect time to look at supply chains. there are companies that are leaders in having flexible supply chains and they are able to react to the volatility right now much better than other ones that have more rigid supply chains. it could also have a big impact on business in terms of who will become the new leaders and who will become -- moving: those ones
supply chains, where they going to do it anyways? of them but a all lot of them. move aways trend, to from china, started about four years ago. there were thing about resourcing strategy, what is happening now is we are seeing a very fast acceleration of having to make these decisions. southeast asia is very close proximity and a very good target and location. they have a very big infrastructure gap. about $1 trillion needs to be able to be funded to make it the same criteria of where china is today. that move starts to happen and we will have to see how quickly can countries and economies catch up. rishaad: we seem to be edging towards some sort of trade deal. 24 hours ago we were edging towards deal with north korea
and washington. what would a trade deal look like? and if you question had any sort of trade deal, it has to be based on trust and verification, ultimately. gerry: we live in interesting times. through, ineal came my mind and our mind we think it would be one that looks a little different from previous trade deals. right now, if you look at the key points of discussion between the u.s. and china, it is not so much about moving products but it is also around ip, market supply chains aren't far more automated than they used to be in the past. these issues are important in trade. to have reasonable tariffs and a very comprehensive
view in terms of ip, market access, and all of the risks that are being addressed. might that looks like it be 20 years away. very quickly, does the need to look at supply chains and move it, does that apply across all industries or are there more prominent examples of industries where it applies most? ,erry: certainly industrials they are much closer to be affected by the trade deal. ofy are in the forefront rethinking supply chains. one is short-term, how do i build tariff tactics. how do i rethink my footprint? supply chainle the to become faster, flexible, agile? what new partnerships can we forge with people out there to become more agile and flexible? rishaad: thank you so much for coming on. is's have a look at what
going on. .uawei says it is innocent >> huawei basically pleaded not guilty to u.s. charges of stealing trade secrets from t-mobile. non-guiltycement and plea was reached in seattle just overnight here. is asian technology editor here with the heart of these allegations. number one things that the prosecutors are making out is that huawei have stolen other people's property. arm,ile had this robotic it was testing the technology. the argument that the prosecutors have made is that while way basically stole the technology. one of the engineers was visiting t-mobile's headquarters and stole part of a robotic hand.
there is a much bigger picture story in play. ascendancy into the telecommunications field. there is a view in the u.s. that while way cannot be trusted on security. according to them, quitere accusing away of an interesting bounty program. they were offering bonuses for employees allegedly for stealing these trade secrets. robert: that is what has been reported. huawei has been aggressive about developing technology. with the u.s. is saying is they have stepped over the line. it is providing incentive to workers to break the law. to literally steal other people's inventions and innovations. that is a line that the u.s. authorities don't believe should be crossed in that company should be punished for. >> we are entering a pretty
pivotal week next week for the cfo. robert: this is not the end of huawei's legal issues. theyht, and canada time, will have to decide if they will extradite the daughter of the founder of why way to the united states. she is being accused of breaching sanctions to iran. lhere is a lot of lega issues facing away. the case will not be heard until march of next year. this will be a long, drawn out process. >> thank you. our asian technology editor joining us here in hong kong. and musk is cutting prices jobs and profit outlook too. that is next. this is bloomberg. ♪
lendernghai-based is said to cut 2000 jobs. as it pertains to the company, they are shutting 60 out of their 90 brick-and-mortar stores. jobs looks to be tied to that. jobs.ng to cut 2000 the chinese online lender. let's move things along and have a look at tesla. elon musk is actually delivering on one very big promise. the cheaper model three cars, which falling short of course on another, tesla's days of losing money are over. rishaad: they won't post a profit in the first quarter but sees them coming. significance of the model three price cut in the
whole scheme of things? this from to look at a couple different angles. this is a promise fulfilled, for a long time tesla has said we will produce an inexpensive car. that should be the model three. when they plan that model, they priced it at $35,000. they are finally fulfilling that promise and offering the vehicle at that price. at least now they say they will. that is part of boosting his credibility a bit. that is important for company like tesla. the second part remains questions as to whether or not they can make money at that price. also, when you look at the demand for vehicles, demand for tesla has never been in question. the only question is can they produce the vehicles fast enough? when you talk about lowering price and offering a vehicle at a lower price, you are trying to
stimulate demand. if they are still not capable of making enough vehicles to meet existing demand, it raises questions about why they would be willing to bring it out now at a lower price. still a lot of questions of whether they are making a profit on the vehicle at that price. here, speaking of profits he says something about the first quarter and he does not think they will make money. how will investors take to that news? dip inhere was a little the shares after the announcement. obviously not good news. if you look at what analysts were projecting, they were not looking for a profit in the quarter anyway. even though elon musk had promised it, the expectation was they would have a loss in the quarter. not a big shock there. aalysts have been looking for loss anyway. that is not a huge shock. it points to this dichotomy that tesla has. on one hand, it is the company
that makes cars. on the other, it is elon musk's reality distortion field where he makes claims and then does not always back them up. he has gotten into a situation where a lot of what he has to do now is make good on promises that he has made and other people have said may never come true. there is always two ways to look at these kind of announcements. one is how much of this is him backing up claims he has made in the past and how much really gets the dynamics are and the operating conditions? rishaad: thank you very much for that. we will have a look at some of the companies which are making waves at the moment. >> we are watching some of these property developers in china. green town down 10% here today. profit line for them, they are expecting 2018 net income to
drop 50% or 60% from a year ago. they're saying 2018 profit will probably rise 45%, the stock still slightly hit today. not a wholewell, lot here but morgan stanley listing their price target for the stock by 73%. they are seeing positivity when it comes to construction outlook. we areook at the boards, focusing more on these southeast asia banks. malaysia in particular. alliance bank malaysia, that is up 5.3%. than profit was up more 21%. analysts are saying they can sustain these net interest margins. the upturn they have steen. tenada nationality going the other way down about 3.4%. down 2.7%, they were
talking about the contraction in the eno needs you -- indonesia unit. we are counting down to the opening of the session in india right now. obviously, a lot of news geopolitically in the india and pakistan border. we have our reporter standing by in mumbai. what are we watching for today? it is going to be an important day to see if the indian pilot gets handed back over to the country. it will be an important moment. yesterday, you had the gdp number that came in below expectations at 6.6%. they were expecting somewhere around 6.8%. the bigger disappointment was the bringing down of the entire
year from 7.2% to 7%. the third point being in from the's session market standpoint, markets did not do anything. cash market saw a big spurt, indicating a lot of interest. and it big number actually bottom the market in yesterday's session. a range of about 10,600 to 11,000 is about what we are expecting. rishaad: you are watching some equitiesauto related as well, why? devina: today we are going to get the february numbers that come in every month. it has been a big disappointment and a big drag for some of these autos.
reportig ones will numbers for the month of february. they're expecting to increase volumes. moto is on hereo expected to be on the lower side. much. thank you so of the marketsew there in india. let me point out some live pictures. mike pompeo is in the philippines. you see him speaking there with the philippine foreign secretary. a few lines coming up as it pertains to that relationship. island activities in china threatens the sovereignty of the
philippines. they had a great conversations, they say with the philipine president. in the event we do get an armed attack -- rishaad: one thing that pompeo will talk about is how the united states is worried that huawei technology is not transparent. that is another headline coming through from that news conference taking place. that is currently what we have. this is bloomberg. ♪
rishaad: act with bloomberg markets as we go on the latest episode of battle of the charts. hereve our china editor pitching their best charts against each other. they're using the bloomberg function you can see on the bottom of the screen. david: it is your first time, right? yes. you might think there is a lot of drama going on these days but big rallyseeing the and cross out volatility is at historic lows, especially in fx. andhave volatility in bonds
fx is as low since january 2018. what does this mean? it means it could be a time to buy options. they are cheaper. and analysis from sundial capital says u.s. ten-year treasury futures do well when it is low. it is an interesting phenomenon. it is interesting when all assets are pretty low. usually you have one or two that are low. i was hoping to play the novice card. that was pretty good. rishaad: this is your first time as well? >> my second. be taking stock of the incredible february for chinese equities after a dismal 2018. you can see shanghai comes in just below it.
in thei was up 40% month. i think that is better than any other major index worldwide. chinese stocks didn't even trade the full month, due to the new year break. they still found time to search into bull market. they had heights not seen since the days of 2015. we saw a rapid shift in that and investors shrugged off the fact that they did not really go away. they were sensing more friendly regulatory time. there was a little more optimism maybe over trade talks. there was a lot of excitement to start the week and then we saw caution emerged. i guess the question now is will we see march madness or mildness? base. a bit of a low rishaad: it is a tough one.
>> it is a most 11:00 in singapore, 8:30 a.m. in mumbai. rishaad: as we enter the last hour of the morning session in hong kong, a look at top stories. the rating of china's factory floor, better than anticipated. mainland stocks on their longest winning streak since 2016. juliette: the fed will remain patient. rishaad: north korea, warning aere may be no chance of landmark accord. this is bloomberg markets.
juliette: mike pompeo speaking in manila says the u.s. is anxious to get back to the negotiating table with north korea. hanoirupt end to the summit yesterday saw korean stocks dropped by 1.8%. holiday. a public pretty good buy in coming through across asian equities. shanghai looking pretty strong. csi 300 up by 1.2% after a stellar month for that market. we saw the cfi up 15 percent in u.s. dollar terms. it was the best-performing market. comee watching new zealand up by 0.5 percent, business confidence dropped in february. the numbers out of china, as well. when we think about the broader chinese market, the stellar
february up by 15%, the best-performing market globally. when you have a look at how it has performed over the course of the past 25 years or so, it has been underperforming. the s&p 500 when you look at the relative factors it has seen a lot of support coming back into the u.s. equity markets. we will be watching to see what march brings. the first trading day of the new month. rishaad: we are looking at india. huge amount of attention between islamabad and new delhi. it hasn't played on the markets to a great extent. we have seen reaction but a stabilization pattern coming through. the big move today in the rupee. in the face of a bit of dollar strength, we are seeing the rupee appreciate quite a bit, 0.04%. -- 0.4%.
looking pretty much flat on the future contracts, the nifty. seven basis points down, the front price moving to the upside as well as the yield has gone to 7.41%. that is the situation is the moment. a bit of hope on the subcontinent currently with the release of that indian pilot who had been captured. he is due to be released by pakistan. keeping eyes on that and seeing how that plays out. hoping that it doesn't result in have a hoping it doesn't massive negative impact on markets in india. what else is going on? let's get over to rosalind chin. details about that story, the indian pilot kept by pakistan may be released friday but it is unclear whether that will help reduce -- help
reduce tensions between the neighbors. the prime minister says he will free the officer as a gesture of these, adding he hopes the international community will help ease cross-border tensions. the u.s. secretary of state says he has spoken to both sides and is calling for calm. his early prime minister benjamin netanyahu is to be andcted for bribery, fraud breach of trust after an investigation that could end his political career. this is the first time a sitting israeli leader has come so close to criminal charges. wrongdoing ands describes the investigation as an unprecedented witchhunt. some new york figures are pleading with amazon not to abandon its second planned campus. morgan stanley's boss and a dinkins,yor, david wrote an open letter to jeff
bezos, urging him to reconsider the station in queens. they say governor cuomo will take personal responsibility for approval. global news, on air and on tick tock on twitter, and more than 120 countries. i am rosalind chin. this is bloomberg. rishaad: china is surprising with a rebound in the thai shin , 49 pointing index nine under -- against an estimate of 48.5. the state-sponsored pr i'm -- pmi missed estimates thursday. beijing appeared to score a win in the trade wars. chinese retaliation tariffs appear to be hitting u.s. exporters harder than their counterparts accusing -- according to a new study. it is costing the u.s. $40 billion per year in lost exports. juliette: more on what is happening on china, rob joins
us, chief aipac economist. thanks for joining us. how did you read today's figures? they were more bright than yesterday. rob: not do much good news coming out of the chinese macro numbers so these were definitely quite unexpected and quite good. we have seen things like this before. theuple months ago, in depths of the trade war when everything looked awful and the chinese numbers managed to get up rather than pushing down through the threshold of boom bust. in the backdrop, we have had supportive aggregate financing data. shadow banking numbers went up last month. caixin firms,-- we may be seeing a short-term lift. i wouldn't bet much on this continuing on let -- unless we get further good news on trade. juliette: i wanted to point to
potentially a slowdown coming for particularly when you see a lot of the credit impulse and the money flowing through in january. perhaps throwing cash at the problem. what happens down the track? itlike all these policies, is a knee-jerk response. month.'t do that every the authorities are conscious of the problems last time they threw money at the economy in a big way. that produced a financial crisis. they won't do that again. this is an initial response. from now it will be more ,oderate, more thoughtful delivering liquidity, trying to get it where it's needed which is tough. the banking sector isn't geared up to support the private enterprise sector. juliette: we have the trade relationship with the u.s. looking like it could get close to a deal come although the latest headlines, how confident are you? rob: we have been following this for a year.
positive, negative, positive, negative. we will go into the weekend on a positive note. i will believe it when i see it. it sounds positive, some of the elements they are talking about in terms of, it is not just by more agricultural produce. iny are talking about moving the right direction. i am not counting chickens yet. extent, will this trade deal be verifiable? that will be the key thing. it is a question you can't really answer, i am guessing, will be the most contentious and would require checking? rob: good question. one of the things about this that has been a bit of an issue for me is, is it going to be two-way verification gekko is china going to be making demands on the u.s.? i doubt they will just want to the uaeas doing what
demands. the areas where you might expect there to be oversight or verification would involve anything to do with currencies. that appears to be the big wheel on the u.s. side, and verifying china isn't interbeing to -- intervening to weaken currency. i don't like it needs to do that. if that were the case, that would be something the u.s. would be unhappy with. they would want to see some sort of information on the pboc getting into the market. think,: how close do you what do you think a trade deal will look like if we get one? , obviously at the top of that there will be more purchasing of u.s. goods by china. we knew that would happen anyway. china is an open door to a lot of these things, soybeans, lng, machinery. this is what china wants and
needs. this is something they would be happy to do anyway. if americans count that as a victory, they are missing a trick. opening markets is the thing a lot of businesses i talked to really want to see. they want a level playing field of competition. that is much harder to deliver but i suppose her tailing some state-ownedrtailing enterprise subsidies would be an element of that. they'll be a big thing for the u.s. rob, if you would stay with us that would be great. getting headlines coming through from south korea, this is a current situation. they are marking independence day from the japanese. moon,e the president, talking about the path to become friends and healing victims'
pain, how people should hold hands to reflect past history. some of the headlines coming through as we get them marking independence day in seoul. some of the more gritty things, they will work to achieve a agreement between the u.s. and north korea, promising to cooperate with both entities there as well. that is the situation. looks like a very fun celebration happening in seoul with great music. of course, with the public holiday it means markets are closed but we saw the big slop coming through after the hanoi summit abruptly ended yesterday. stays with us as we dig into data from southeast asia's leading economies. india, pakistan tensions running high ahead of an indian election. how the rupee is faring.
juliette: federal reserve chairman jerome powell repeated his recent mantra of the need for patience. speaking in new york, he said the central bank is focused on keeping the current favorable economic conditions going. >> we will be patient as we determine what future adjustments to the target rate for the federal funds rate may be appropriate to support our objectives. this commonsense risk management approach has served the committee well in the past. rob is still with us. the change from december to january is the rewritten monetary policy in this part of the world. would you argue that perhaps he has given the global economy, i am talking about powell, a reprieve by not keeping on tightening at least for the time
being? rob: for sure. at the time i think i talked about it as being a cave in to the u.s. president. the justification as you get closer to the peak fed funds rate, whatever that is, we may have already hit it, the justification for slowing down and being patient is a decent one. it is a contrast to what he just said on the clip you showed. the fed has been good at that in the past. they carried on bamboozling the market until they have done too much, and have wrecked things. this has thrown a bone to the global economy. it is held this part of the currencies, enabling the central banks to do less. it is great for everyone. markets what emerging central banks, they do have wiggle room. we are not seeing aggressive rate cutting taking place yet. do you foresee that if the global economy shows further
signs of weakness? rob: i think that is the key. if it shows signs of weakness, yes, there are a number of economies in the asian region that have hyped aggressively last year. inflation has dropped across the board. bankple are sitting high, of thailand would be one, bank of korea another. you think, why did they raise rates last time? bank of indonesia, the philippines, they all have the potential to do stuff should things deteriorate. at the moment, we are waiting for this trade deal and if that comes through, shouldn't need to see anything. juliette: i know you were interested when we were showing the pictures of what is happening in seoul. there is certainly a national day of celebration. >> ♪ juliette: their independence day
there. thatcomes after we saw summit abruptly end in hanoi yesterday. were you surprised by what happened? i guess what happens next in terms of continuing relations? expecting anything good to come out of it. i think the u.s. went in without any agenda. a positive, it was a positive move in the sense of both sides knowing a bit more about each other. the north koreans know the u.s. knows they have other nuclear facilities and they can't get away with a token close down and expect sanctions to go. it is two steps forward, one step back but i daresay there will be further talks. there is scope for further progress. the u.s. knows north korea is prepared to move, which is good news. there is scope for a deal. there is more legwork to be done and more time if we have another , let's get all the bunting out and have a big national celebration for this.
juliette: speaking of getting the bunting out, there was hopes there could be some further progress and that could be positive for south korea's economy. if we look at the trade impact with u.s.-china on korea, we saw quite a big hit humming through in exports today. they were down 11.1% year on year. how worried are you about this impact the growth in the region? the trade story is important. there is another story in the background which we should not lose sight of, the global slump in semiconductor demand. what we saw today, a lot of what is happening is semiconductor prices are plunging. the volumes are holding up reasonably, but it is the prices . in dollar terms, the export numbers are plunging. that is something that is beyond the ability of a central bank to do a great deal about. we will have to wait for the ,ollout of 5g to kickstart this
before we have new smartphones coming out, things that you fold in half. i am not sure. that may give it a boost but i think really to get this going again, we need the quantum leap of 5g. that is probably a next year story. question, as we look at all of these export numbers, in vietnam yesterday, very weak export numbers. what does that tell us about the global economy? are things that bad? are we seeing signs of ottoman out? -- bottoming out? what about the u.s.? is it basking in exceptionalism? what do you see their? rob: good question. i have been trying to put together presentation slides to answer this. case theasily make the u.s. is in great shape and a number of the things i was updating no longer look as good as they did a month or two ago.
i think we are beginning to see the boost from fiscal stimulus wearing away. some things still look impressive, the labor market the most obvious one. if you dig further and look at strains thatiness are beginning to appear, suggesting wage increases will start taking, they are looking to moderates now. people available for work are picking up so that takes pressure. the fed should still be hiking, it should be a buyer's policy. it is not looking as obvious now. time,te: thanks for your rob carnell, ing head of research and chief aipac economist. we will head to the hanoi are the aftermath of the talks breaking down. this is bloomberg. ♪
news agency says kim jong-un vows to meet president trump again despite the hanoi summit ending with no deal. more optimistic than the regime's top diplomats who warned there may not be another chance to negotiate. >> although we have come up with a deal that we have never offered in the past, the american government still wants -- doesn't want to lift the sanctions. it concerns me that our chairman could lose the intention to continue negotiations with the u.s. i can't guarantee this chance will come again for the american government. juliette: our chief north asian correspondent stephen engle is -- has comments. for an event that ended up with nothing, it sure was a busy day yesterday, from very early in the morning until late at night. we were there covering every
inch of it. it was a fascinating night, because we got the press conference from donald trump after he cut short the summit with kim jong-un at the metropole hotel where i was camped out all day. they didn't have lunch, didn't have a joint signing declaration, didn't have a joint statement, and he left saying the north koreans wanted to much. they wanted full relaxation of sanctions and trump says we are not going to do that. we are not in the position because the north koreans haven't given enough of a pledge to dismantle their nuclear weapons arsenal. so skip forward to late in the evening. 10:00 at night, our team gets a phone call saying we will have a press conference. the north koreans will have a press conference. they don't do that. they don't collect the foreign media. they did. the foreign minister and the vice foreign minister, who you just heard from, having a press conference and refusing -- refuting what donald trump said. they said we didn't ask for relaxation of all
sanctions. they wanted some of the sanctions relaxed in exchange beyondess to the young facility and pledges to stop uranium and plutonium enrichment processes at the facility. donald trump that wasn't enough. summit,s knew this number two, was not necessarily going to be about the dynamic between kim and trump, it would be about efforts to denuclearize by the north koreans and sanctions release by the united states. none of that happened. , what we dol me have currently is, all of the dust is settling. what has been the reaction, the feeling we are getting? stephen: there is a bit of a letdown, because hanoi wanted to play the role as peace broker.
there are signs everywhere and hanoi, hanoi, city for peace. the peace process is still going on. there haven't been more missile tests since the talks broke down yesterday. they are still pledging they will talk. they haven't decided on summit number three but the casein a news agency says kim jong-un is willing to talk. thank you very much indeed. go ahead. juliette: that is stephen engle. a quick check of the latest headlines. ofrick gold has no intention increasing mining. it made a $17.8 billion offer that was 8% low the closing price. they said they were more interested in their mo -- there a dental takeover. rishaad: close to buying a
division of a german lender. pay $6.3ld they would billion and an official announcement could come later. they have been trying to sell of portfolios to security -- steady balance sheets after losses. juliette: looking at making the new a 30 neo-wide-body in china. this is in a rapidly growing aviation market. they may expand the existing plant. the decision is still to be made. airbus offered to build another plane in china but the bid was rejected on concerns about the plane's suitability. rishaad: a look at what is going on as we get to the end of the .ession in shanghai the composite pretty much flat. still on the longest winning end upsince 2016 if we positive today. the csi 300 up 0.4%.
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juliette: it is a most 11:30 a.m. and we are in the middle of the trading day. a positive session after three sessions of losses, up by about zero point 5%, outperforming the broader index which is around 0.1%. singapore dollar flat, after two -- and dbs among some of the stocks to watch. a flight air saying will take off as planned but will reroute to avoid expected -- affected air pay -- airspace in india and pakistan. rosalind: top white house aide larry kudlow says the u.s. and
china are on the verge of an historic trade deal after what he describes as terrific progress in talks. he says beijing agreed to cut subsidies desert and companies -- to certain companies. china also agreed to deemphasize its plans to dominate emerging global technology. the trump administration won a key victory over china with the wto, ruling that beijing's farm reduce subsidies making american farmers more competitive. china is considering making an appeal on the ruling. huaweiay pleaded -- pleaded not guilty to several charges. a trial date has been set for march next year. friday is the deadline for canada to decide whether to expedite the cfo who is wanted in the u.s. on fraud charges.
china demanded canada release her. a chairman is said to be replacing at least two members of the board amid a shakeup of government. formertold the wife of a u.k. prime minister will not return and a top independent director believe in june because of his age. sources say they want the board less to be -- to be less of an operation. day,l news 24 hours per powered by more than 2700 journalists, analysts, i'm rosalind chin, this is bloomberg. .uliette: let's check on india currency and bond markets coming online, we had three sessions of losses for indian equities. looking like a flat start on the nfti. not much movement in the rupee. it is slightly weakened against the dollar. we are seeing the movement on
7.1 -- 7.41. pretty flat.g signs of quick recovery, gdp on the way up, 6.6% in the fourth quarter year on year compared to the average of 6.7% and a provides -- revised third-quarter number. tensions with pakistan may have changed this. tell us what the latest news with regards to what is going on on the ground. >> everyone was surprised last night. the prime minister, imran khan, came out and said pakistan was willing to release the captured indian air force pilot that has captivated all of india. he has been on the front pages of newspapers. everybody wants this guy back. obviously this is from a dogfight over kashmir that
handed between -- happened between india and pakistan and drew in the u.s., china, and other global powers urging the countries to show some kind of not escalate the military situation. at the moment we are waiting to comes,ther and when he he is meant to come in the afternoon and he may cross the border between the two countries, where the two armed forces give displays every day that are famous and draw tourists. we are waiting for that to happen. i think everybody is trying to figure out how this is going to go down. how is it being perceived, the release of the pilot, should it happen later? how is this going to be perceived by people there, pundits and the government led by a right-wing bjp? >> there has been two sides here. one side is portraying this as a
thereatic coup by modi. have been reports of backroom ,egotiations, saudi pressure pressure from gulf countries on pakistan to release the pilot promptly. others are criticizing modi for being silent. many people are confused by the indian government's official silence on some of these matters. modi has been addressing election rallies but hasn't said much publicly about the pilot or the military standoff, whereas imran khan has been going on tv addressing the nation in these formal broadcast. domestically i think modi will come out good. everybody wants the pilot back and i think people have viewed this as a window for de-escalation between india and pakistan and it looks like if the pilot is handed over, both sides could walk away from this.
khan looks like a responsible leader. modi looks like he stood tough against pakistan. everybody hopes that is the result that comes out of this. juliette: how important is that for modi i head of the elections? >> it is absolutely crucial. i think the terrorist attack in kashmir earlier this month that set all of this new round of tensions off, the attack that --led 40 pella military paramilitary troops, it created a sense of public anger in india and generated pressure for modi to respond. he is heading into an election in a couple months and national security issues are on the front burner. although modi was facing aoblems, he now looks like global statesman. he stood tough against pakistan,
launched airstrikes, and his party on twitter and in rallies have already been playing this up. there was a politician from the ruling party in southern india who said this would be great for the election. we will win more seats because of these airstrikes. it is blatant in some ways that least a there is at political dynamic to this, whether they want it or not. juliette: bloomberg's south asian reporter in delhi, thanks. our next guest is the recent -- says the heightened tensions things inaffect india. great to have you with us. there has been market reaction. the rupee, as people have said, has been holding up well. why do you think we are more likely to see equity and other assets in india basically hold this out and not react too much
long-term? >> at the border in terms of this option to the economy, the part ofreas are a small overall gdp so it doesn't disrupt day-to-day activity. some were a few hours when flights and airports were shut down but otherwise, by and large the economy has been running the way it was before this skirmish. in terms of the fiscal cost, broad estimates, these are hard to get numbers but it is safe to say that a few weeks of heightened air defense would million, $1300 million. that is not really something that worrying -- that is worrying. if it the escalates, which seems likely, even in terms of the
risks or potential risks to , iital flow and uncertainty think all of those concerns also will fade away soon. therefore, sustained growth will be sustainable. juliette: this coming ahead of the key elections. when you talk about gdp, we had and theyom movies think india's economy will grow 7.3% this year and in 2020. what are your forecast for gdp? growthuld drive economic ? what do you think the government is focusing on leading up to the elections? >> the gdp forecast for fy 19 was cut down around 7%, it in the year ending march 2019. the mullet -- the mall and a terry policy prediction for fy 20 of 7.4%.
to get to 7% in fy 19, you need 6.3% growth in the march quarter, the final quarter. we saw 6.6% in the december the presumption now is 6.3 in the march quarter. that means to get to the target, you need a significant momentum. that is unlikely absent a stimulus. therefore, i think those numbers need to be brought down as well. that opens the room. at an terms of what the government is doing, i think the budget announcement and the income transfer scheme where the two critical's -- critical elements. the budget, from an outside tax cut for the people of -- with income up to -- there was not much it -- other than directing
a transfer scheme for about 125 million farmers, 6000 rupees each per year. the first challenge has been issued in the month of march itself. that is the only thing the government can do and has done in the run-up to the elections. get backi am going to , theretensions that hasn't been much reaction market-wise. it has been sanguine. do you think there is complacency? this ain't over yet. that is the message coming out of delhi. is there a bit of complacency that this may actually stay where it is and remain confined and the all done with rather than actually a danger that it gets wider, this conflict iraq of -- this
conflict? >> nothing is impossible. everything remains on the table. concerns on the terror camps functioning on the other side of the border. pakistan denies them. the concern is also on the indian side that if there were further attacks, we reserve the right to retaliate. but that is a situation i think which has continued for many years. i think if there were any further terror strikes in india, terrorist organizations trying to seek revenge for the bombings india conducted, and if in retaliation more action was to happen, perhaps things would escalate. but based on the press briefing by the armed forces in india yesterday evening, it doesn't thing, for that this
now, will be escalating. , thead: very quickly equity markets, great year last indian stocks. this year, not so much. what is going on? think the growth momentum has stalled. flaws have started to slow down. the expectation for growth, we are really worried about growth right now. i think the financial system is stalling. the economy is slowing down by the week. there is a very serious problem in the financial system. there is an aggregate level that is a challenge. it doesn't look like it will get addressed very quickly. so the finance system, mutual funds and mbf see. foraad: thank you so much
juliette: india's markets have just opened. let's get to mumbai, where our reporter is standing by to take us through today's session. what do you think indian markets will make of armed forces chiefs addressing this last evening? do you think the tensions have eased somewhat? >> absolutely. the address from the indian armed forces chief is evidence that there is no rise of risk in
terms of further escalated nation -- escalation. foreign investors have bought in equity worth another half a billion dollars yesterday, and that is evident in the times -- the types of move we have seen. trendinge indices are higher. there is more strength on the banking index as well. higher by as much, nearly 1% and the broader market index is also doing, advancing with the benchmarks. at this point investors are -- taking in the comments of the indian armed forces very well. rishaad: what about these companies, auto companies reporting volumes for the month gone by? what is the industry looking like? >> the expectations are likely to see a mixed month when it comes to volumes growth.
the auto indexes are trending higher by as much as 0.5% but it will be all about individual companies. while we are expecting weakness on the domestic level, with auto, they are expected to show double digit growth. we are seeing bajajauto trend down. other motor companies advancing in trade. we will keep an eye on these volumes. rishaad: thank you very much. let's look at the latest headlines. chinese peer-to-peer is said to be cutting staff and reducing costs. this is to comply with efforts to shrink the industry. they are planning to lay off up to 2000 employees and shut about 60 of their 90 brick-and-mortar operations among which -- operations, which means current and former staff have taken the social media to demand
compensation. the prospect of a buyer on the horizon. someone is making a bid that the stock is going to fall. inclined to think the sale of a 47% stake by south korean companies won't trigger a premium price offer. short interest tripled to about 3% of nexon's outstanding stock. rishaad: falling back, tesla. elon musk does not expect a profit in the current quarter buddy sees improvement in the next one. tesla also says it is shifting worldwide orders to online only. it will wind down brick and mortar outlets to concentrate on direct sales. basketball draws huge numbers in china and it is an increasingly important market for the nba.
to bloombergke about the impact of trade tensions and the prospect of growth. are 300 now there million people playing basketball in china. you probably have 60 fit -- 650 million watching nba content last year in china. our most highly rated games last year, 30 million people watching the western conference finals on cctv, another 18 million watching on tencent. we concluded the all-star game and i think it probably 30 million people watching. the culmination of the events over four days on cctv, 20 million watching on tencent. you could see where the game continues to grow in popularity. more people are playing and media,g and with social interacting with our brand, which is great. >> china is the number one international market for nba
merchandise. how much do you expect it to grow? >> we don't release specific numbers but we believe it will continue to grow at a good clip. if you look at the underlying dynamics of chinese markets, obviously the growth is there. lots of people complain china is not growing like it used to but it is still growing at a greater thinkhan the u.s. or, i the other phenomenon, just having people continuing to have more disposable income, our brand is such a lifestyle brand. not just an athletic brand but what it represents, i think the opportunity for us continues to grow. >> how closely have you followed the u.s.-china trade talks? >> as you said, china is the biggest market for the nba outside the u.s., so clearly what happens in china is important. we need to follow it. that said, we are also realistic. there isn't much we can do about it.
you can't of have to sit there and say, what can i control? i can control things like continuing to make the game china. for the fans in we can focus on things like the development of basketball in china. we have a great partnership with the ministry of education where to 4ought junior nba million students, 4000 schools in china. it is about creating access to the game. that will help us. that will help us not only grow the game, but there are initiatives in china about health and well-being and that plays into it and the supporting those initiatives. >> have the tariffs are tensions impacted merchandise sales or the popularity of the sport? thisdon't think so at point. i don't necessarily anticipated would. but again, we live in somewhat volatile times, so i would not be the one to guess that. china's president
juliette: you are watching bloomberg markets: asia. i'm in singapore. rishaad: i'm in hong kong. looking at macau, reporting monthly casino revenues in roughly six minutes. aftercould be good news january's lackluster results. consumers reporter daniela is with us. the rise in mainland visitors, does this translate into growth? in february, there is a holiday in the middle of that. >> february is interesting to watch. it includes the entire holiday
for macau, the new year. we can actually see from the visitation data, it is robust, 26% growth in mainland visitors. gotinitial market data we from analysts shows that the robust visitation data didn't effectively transfer to -- rishaad: exactly. what dragged revenue growth? >> to be honest, the key factor the drag, maybe the vip revenue, because we naturally assume the high during the't come holiday because high rollers want to avoid a crowd, to enjoy their private time. however, the data shows after the chinese new year, about two weeks after, the data actually
back that they didn't come to the city is much as expected. mass market is still doing well. .ccording to the data but still, the vip this month affects the revenue growth. juliette: do you think the trend is going to continue in that vip segment? what about the easing policies coming through from china? could that help? daniela: of course, for this month plus data alone, it can tell the whole picture because it is still short term. february's data is important because it can be a test for the markets. it misses the estimate this month. showing the china factors, including trade tensions, outflow,and capital are starting to put heat on
macau's revenue growth for the rest of the year. so we need to watch out carefully. juliette: we will be watching those numbers coming through shortly. daniela way joining us from hong kong. we will be watching next week, a busy week. the npc congress, david ingles is dusting off his passport for that one, is happening next week. the ecb monetary policy every -- meeting coming out of the u.s., enthusiasts, there is the international motor show in geneva. i covered it a couple times. it is massive. right by the airport conveniently. throwneva motor show will up a target rich and buyer meant comes to guests. , andve a chief executive another guest joining us to talk
♪ emily: i'm emily chang in san francisco and this is "bloomberg technology." coming in the next hour, tech names plunge. in a single day, hb think drops 17%. fox falls 9%. fitbit sinks 14%, and all on the back of earnings. what does it mean for the rest of tech? plus, could uber make a big global play ahead of its planned ipo?