tv Bloomberg Daybreak Asia Bloomberg April 4, 2019 7:00pm-9:00pm EDT
haidi: very good morning. i am haidi stroud-watts in sydney. australian markets are open for trade. shery: i am shery ahn. welcome to "daybreak asia." haidi: our top stories this friday, talking trade. president trump says negotiations are going well and a "monumental deal" may be announced in the coming weeks. he has less flattering words for jay powell. he says the u.s. is doing well despite the fed's destructive
actions. he says the campaign to drive him out started almost a year ago. shery: let's get you started with a quick check on markets close. the s&p 500 gained ground. the longest winning streak since february of last year. investors are more optimistic about a potential china-u.s. trade deal. we saw u.s. jobless claims falling to a 49 year low. tesla'disappointing delivery numbers did weigh on the nasdaq. let's see how we are setting up in asia. how is the australian market looking, haidi? haidi: the australian markets are mildly pessimistic. .e are seeing declines elsewhere, we are looking a little more optimistic when japan and korea, online. it is a holiday session.
the extension of that, .8% frothy shares into the friday morning session. a.j. dillon china potentially to come in the next four weeks to six weeks. the devil is always in the details for these investors given we have pushed when it comes to u.s. stocks. new zealand adding to the downbeat mood in the early part of the asian session, down by .4%. the kiwi dollar largely period ofafter a broad dollar strength. ed: president trump has resumed his attack on the fed the saying despite its actions, the u.s. economy is doing fine. he added that trade agreements are moving along and american optimism is high and the president intends to push ahead
with plans to nominate a former executive to the said board. moore --porter stephen the fed board. u.s. jobless claims fell, dropping to a 50 year low as the labor market tightened. the less volatile four-week average declined to its lowest level since october. at the same time, the edp research institute said firms added the fewest workers in march since 2017, potentially signaling some weakness. carlos ghosn has told the french tv channel that he was concerned about the company's declining performance and the state of the alliance with renault before his a mindless year. speaking before he was the claimed -- detained, he said there was a conspiracy that dates back to may. he said the plot is deeply
harmful to nissan and renault. the initial report into last month ethiopian airlines crash says the pilots were overwhelmed malfunctions. the transport ministry says the automatic anti-stall system forced the jets nose-down just two minutes after takeoff due to a faulty sensor. the crew performed all the procedures provided by the manufacturer but was not able to control the aircraft. >> the pilots have told us erroneous activation of the function could add to what is already a high workload environment. it is our responsibility to eliminate this risk. we own it, and we know how to do it. day,lobal news, 24 hours a
on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am ed ludlow. this is bloomberg. haidi: thank you. president trump says a trade deal with china is not finalized just yet, but "a very monumental agreement may be announced in the coming weeks." he spoke after talks at the white house. pres. trump: we have never done a deal like this with china. it is very unique, this set of circumstances, but it is a massive deal. it is the biggest deal ever made. there cannot be a deal like this matter where you look. this is the granddaddy of them all. haidi: let's bring our congress editor joe sobczyk. he seems ready to announce a meeting. up, expectations being set the granddaddy of them all, the biggest deal there ever was, but not much in the details.
the the original timeline president had been eager to have an announcement of a summit with president xi sometime even as early as this month. that was always at best a very optimistic timeline for it. oneade deal as complex as negotiated with china typically takes years. have got them going now. he is saying they will need for weeks to get the framework. another two weeks to put it on paper. so that is going to be prolonging a bit of the uncertainty that we have got with the trade relationship between the u.s. and china. you know, as far as he is a monumental deal. he said the main issues still our enforcement, tariffs, and a couple of other spots that suggest that the scope is not what had beens
originally planned for some sort of fundamental realignment of u.s.-china trading relationship and some major changes for china. for how they deal with u.s. companies in the trading. so we will see whether or not has is as monumental as he promoted. there still is a lot left to go, and despite his optimism, his s werenegotiator cautioning that the last bits can be the hardest as we go. >> are we expecting more working level talks? any idea on where president trump and president xi jinping could meet? ae: we are told there is meeting scheduled tomorrow, following of those that have gone on already this week. friday in washington, but nothing has been scheduled after that. presumably, they will be continuing on, trying to arrange
some things here or in china. the place for a summit has not been set. there was some talk that the chinese were pushing for a neutral country rather than having it done in beijing for in as trump had been hoping, mar-a-lago, his resort in florida. that is still a ways down the way and they will have to get through this next round of negotiations to get something on paper before they are going to announce any sort of summit before the chinese will agree to any sort of meeting. haidi: in the meantime, the u.s. is stepping up its campaign to shut huawei out. mike pompeo issuing a significant warning to the u.s.'s nato allies. joe: right. he is meeting with nato allies in washington today, and he told u.s.,ers that the
european countries, if they go forward with including huawei equipment in their networks, the u.s. is going to be reluctant to share information. that covers a gamut of things including intelligence work. the u.s. is concerned that huawei is too closely linked to thechinese government, and networks they are building or helping to build could have the potential for stealing information for the chinese government's benefit. the u.s. has been pushing this on several fronts with its allies in europe and canada and elsewhere in the world. up.here is no let they are still wrangling to keep huawei out of the european networks. shery: joe, thank you so much for that. scioscia -- joe sobczyk.
day asrose for a sixth investors remained bullish. su keenan has been watching the action right now. been optimism all around, especially when it comes to trade and eco-data. one strategists shifted from a question of when and not if. that adds confidence to the market. if we take a look at how we closed, we did see the dollar closing higher. we saw oil at performance and five-month highs. stocks inhe energy the lead in terms of gainers. it is near a record, the semiconductor chip stocks, as it were. really continuing to rise and help propel the market. let's go into the hamburg. and talk about volatility. this is titled cross-asset volatility. and it really supports the jamie from j.p. morgan's
dimon, who came out with a note that the fourth quarter of 2018, if you see that despite, that volatility is a harbinger of things to come. every two or three years, you see a big bike and volatility, in bonds, in aspects come in stocks. what we saw in the fourth quarter was stocks and fx or bonds.y hit the hardest expect more of the same is what jamie dimon is saying. meanwhile, let's take a look at the big movers. boeingting to note that was to the upside. that has a lot to do with his trade optimism. that shows that that is more in the forefront of investors minds down the very specific max jet story. notice also the latest ipo, which is trade web, and it has to do with a platform for bond in derivative trading, up 33%. a very strong performance.
arember of stocks down that in a crowd. software area. and tesla really dropping as much as 11% intraday, closing off the low on a record decline in first-quarter deliveries. 31% sequential drop in quarterly deliveries of its latest model, and that is a major concern to investors. haidi. haidi: double whammy for tesla. you mentioned the record decline in deliveries, the production question, but also the ceo, elon musk, was back in court today with his battle with the fcc. su: the judge was very stern and thethey need to go back to bargaining table to come up with an agreement on how to handle the fact that it appears he sec's order not to send out any more tweets. this is a federal courthouse in downtown manhattan.
he is smiling. it is the conclusion of the hearing. he is surrounded by paparazzi and onlookers, sort of greeted like a rock star. he is a fairly big celebrity. his celebrity has only gone so far in the big picture. it has been very rocky for the stock. bearish news of these deliveries feeds investor concern about demand for tesla. the weighted traded this week, a huge drop off the top of the day on that delivery news. the legal news, again, two weeks for them to work out a way to -- muskh this mosque tweeting concern. he tweeted information that parameters for ceo's. haidi: another bad week for tesla. just selloff a cliff. su keenan was a wrap of a very busy wall street session
haidi: mrs. "daybreak asia." i am height -- this is "daybreak asia." i am haidi stroud-watts in sydney. shery: president trump said an agreement is still weeks away but it will be "fundamental." let's discuss all of this with the founder of a global strategies company in los angeles. always great to have you with us. tariffse, we have seen on more than $300 billion of
u.s. and chinese goods as the trade tensions unfold. how long will it take for the tariffs have these had on the economy to wear off? >> i don't think they are going to air off anytime soon because if you think about what has happened, the economy is feeling the impact of the supply chain. the slower economic growth. and it is also facing the impact that the consumers in the united states are paying a higher price. in order for that to go away, to you need a complete revamp of the trade situation, and despite what president trump said this evening, in terms of a deal, the keyl details are still missing. until we know what is going to happen to intellectual property, forceat is happening with
ransfer, and how we are going to go ahead with checking the implementation of the policies by the chinese, until all of that is done, it may lo happen, and the negative fallout on the economy will continue. shery: we have seen stocks rallied, pricing in the trade optimism. there has been some discourse between what has been happening in the equities market and fixed income market. they seem to be having a very different view of where the economy is headed. who is right? komal: i think both are right if you look in terms of what they are responding to. i think the equity holders are responding to two things. one, the fed has pivoted. and they think the fed has their back so they can keep buying equities. and if there is a correction, the fed will come to their support. second, they think any deal which is announced on the trade side, even if it is not maintained, is going to give
some amount of support for the equities for some time to come. the bondholders on the other side of the can longer term. year to 18oking one months ahead, and they are increasingly seeing signs of a u.s. and global slowdown leading perhaps to a recession either globally or just in the united states, and that is why you see the bond yields come down even as equity prices go up. so it is not inconsistent, but they are responding to different forces. haidi: you can see that in the chart that is fair from our gtv roadry, looking up a split of the yield inversion and stocks. you wonder at what point that will close the gap. i am wondering, we had one analyst saying it is a matter of when and not if. what's the chances we will see the market selling the news? komal: the trade deal is probably going to get announced.
of lyingjust a matter more u.s. soybeans and saying that the chinese have entered 2025 to get it done. and they are going to monitor the alleged intellectual , alleged forced mergers, then you can have a quick deal, but nothing much was achieved. markets may the short-term be happy, but the longer-term, the question is, will the two tosidents revisit the issues solve the whole trade problem or not? and that is the crux of the problem. the chinese are being asked to do too much in terms of structural changes, and that is going to be very hard for the trump administration to get, to administer, and that is why you see the long delays that are taking place. haidi: what we are seeing this
week is that global rally really get kicked off and continued on the basis of optimism over the china recovery story, right? so much of that is being driven by the old playbook of excess credit. does this concern you that this is really an extension of the deep structural issues that beijing has yet to fix? komal: it really does concern me. because once again, going back to the question of equities with the fixed income, that is a rebound in a u.s. equity in chinese equities prices and signs that the chinese economy is turning around in the early part of 2019. it helps both chinese and u.s. equities, but notice that the spread between the two-year and ourear u.s. treasury's at 17 or 18 basis points. it has not widened. treasury is at 17 or 18
basis points. it has not widened. the bondholders who think that the increase in chinese stimulus just puts off the problem to a later date, and even more importantly, the debt to gdp ratio, which by my estimate is 320%, but china is going to increase even further with the stimulus that we are seeing taking place. so it is good in the short-term, but it is not going to be very good as you look at 2020 and 2021. haidi: always a pleasure having you on with us. komal sri-kumar. you can get more on the trade talks in today's edition of daybreak. bloomberg subscribers just go to dayb in your terminals. it is also available in the bloomberg anywhere app. this is bloomberg. ♪
haidi: the philippines may scale back fundraising efforts of the budget standoff -- if the budget standoff limits the plan. the budget impasse could hurt growth. >> the standoff in the budget was between the two houses of legislature. nationalthe administration. it looks like it is resolved. thethe budget now is with president and he will take action within the next week or two. unfortunate quite that we had this delay in the approval of the budget. it meant for us, for instance, that for two months, we did not spend close to one billion u.s. to all -- u.s. dollars.
that would be spent on more infrastructure, more people hired to do obstruction work, etc. so that is going to hurt as a bit. will you push through with and ther yen, yuan, euro fundraising plans? >> we are looking at the numbers again since we now have a surplus. in the first two months, we did not spend close to $1 billion. we are looking at it again but we will push through with it. >> in the first half? >> the yuan, yes. second, probably early half. >> all plans are intact. no delays, no cancellations. >> the numbers are going to be modified. >> you were in china recently
for a roadshow. what has been the inception? >> we will. our bond issue is coming up. i am going to track very closely the number of dips over the standard. .e are very hopeful there was a good response. the roadshow extended to the other cities aside from beijing. speakingta mingus exclusively to haslinda amin on the sidelines of the asean meeting and thailand. in thailand. trading and derivative platform raised $1.1 billion in this ipo, the largest in the u.s. this year after lyft. the offering gives them a total value of $8 billion. retain 75% ofwill
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ed: this is "daybreak asia." ludlow. president trump says a trade deal with china is not finalized yet but a very monumental agreement may be announced in the coming weeks. with the top negotiator at the white house, the president said there is a way to go, but the two sides are rounding the term. the president said the main issues to be resolved are ip protection. pres. trump: we have never done a deal like this with china, and it's very unique. it is a massive deal. i guess it is, if you think about it, the biggest deal ever
made no matter where you look. this is the granddaddy of them all. komal: the united states is threat -- >> ed: the united states is threatening to restrict the flow of information to allies. mike pompeo made the most explicit warning yet, ratcheting up the campaign against huawei. some nato members have rebuffed u.s. warnings saying the threat from china is not as dangerous as claimed. >> we made clear that if the risk exceeds the threshold for the united states, we won't be able to share that information any longer. every sovereign nation will make its own decision and the united states will make its own decision. ed: italy is said to be slashing growth forecasts and raising the budget deficit as the economy stagnates. sources in loan tell -- rome tell us --
1% in previousom forecasts. italy fell into recession late last year and is carrying a show of more than 130% of gdp. ship robot russian supply that set a record for the international space station. that knocked 19 minutes off the previous record set by another progress craft in july. it was carrying three tons of food, water, oxygen, and other supplies. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am ed ludlow. this is bloomberg. haidi: thank you. let's take a look at the state of play when it comes to australian markets. a pretty tepid start to the day.
we are seeing declines of .4% for the asx. we are seeing essentially every sector other than materials trading slightly to the upside. the biggest declines coming from tech and i.t. names after the nasdaq was dragged lower overnight. but still, u.s. equities seeing the longest winning streak of the year on this optimism that we may be weeks away from potential u.s.-china trade deals. president trump sounding quite optimistic. not yet feeding through to the session. we have a holiday session with taiwan and greater chinese the holiday.d for given we have seen gains of over 1.5% for the asia-pacific this week, it could be a day where investors are happy to maybe take a bit of profit. when it comes to central banks, we are seeing a less dovish policy message emerging from the reserve bank of india. there is a more dovish message than expected from a top
policymaker at the fed. kathleen hays is here. let's start with the r.b.i.. a cut was not enough. kathleen: the reserve bank of inflationeeing lower maybe ahead of the big election starting next week in the country. just cut their rate. they would send a strong policy signal, opening the door to more rate cuts. they made one and then kept their neutral stance. let's mix together the whole interest-rate picture with the inflation picture. this is what is so important. back in thes high middle of 2018. the former of yeah governor was hiking rates -- r.b.i. governor was hiking rates. it is well below the 4% target. 2.5 percent. another reason people thought the door was open perhaps to a rate hike -- a rate cut in june or august. two rate cuts,
we are down to 6%. the r.b.i. did say they will provide more liquidity because there has been a deficit of liquidity in the indian banking system, but nevertheless, there 10 basis point-- jump in bond yields when this occurred. the election is in the background and it starts next week. inme minister modi's party regional elections did not do as well as hoped. money been trying to give to poor farmers. constituencyoting to shore up those roads. seen as close to mr. modi, close to his policy goals in terms of stimulating the economy. is a central banker. he is independent to a certain degree from the government. we shall see how this unfolds. disappointment from the bond
market yesterday, but with inflation down and gdp steady after falling, i think maybe he figures they have done enough and can wait and watch. haidi: taking a look at the fed, some more surprising remarks from the fed president. can we still call her a hawk ' it is -- call her a hawk? kathleen: it is interesting. it is a little bit relative. loretta mester, president of the cleveland fed, has been somebody who has been very focused. inflation will go above target. then we will have a problem. when she was speaking earlier today, here is what she said. from move to this quote loretta mester when she was asked about where rate hikes are going next. could we be done with policy rate increases this cycle? it is possible. what it depends on is does gdp rise back above 2% this year as she expects it will?
maybe rates will me to move higher. president of the philly said made the same kind of point. he thinks there could be one more rate hike this year. that depends on whether or not the economy gets to where it is supposed to go. shery: kathleen hays, thank you so much. breaking news out of samsung. we have their pulmonary earnings report coming in with operating profit for the first quarter, missing estimates, coming in at 6.2 trillion won. the estimate was for a number higher than 6.9 trillion won. first quarter sales coming in at 52 trillion won. the estimate was for a marginally higher number then we saw. this was putting much expected. samsung warned they would miss analyst estimates. bloomberg intelligence saying the earnings plunge will continue until we see the demand for memory chips gradually
picking up. earnings,lmonary their operating profit for the first quarter missing estimates at 6.2 trillion won. haidi: if we get a resolution on the trade story, that could see quicker recovery potentially. that was the optimism over the u.s.-china trade deal, pushing boeing shares higher overnight, seeming to outweigh a preliminary report. our bloomberg aviation security reporter joins us now from washington with the latest. what were the key points made? pretty damming report. data aboutsome clear just what happened on that flight on march 10 that crashed and prompted the ground in of the new best-selling model by boeing. there are two key threads.
ironically,boeing, safety system they added when they built the plane activated for the second time and was repeatedly driving the nose down . it does appear that was a critical factor in confusing the pilots and causing the crash. there are some interesting threads in the flight data that was released. for one, the pilots were going extremely fast. they never pulled the power back from their takeoff setting. they were flying almost twice as fast as normal. that exacerbated the problems they had. shery: so what was the reaction from boeing? >> boeing put out a rather extraordinary long statement. they said they own this problem.
atentially acknowledging least in part that the system is at the root of these two crashes. they are of course fixing it. they hope to have that ready .ithin several weeks it needs to get approved by regulators, and you know, there is a lot of trust they have to rebuild with both the public and aviation agencies around the world. haidi: that is the up for battle for boeing. what comes next in the investigation? this point, it becomes a long, slow slog to figure out as best as possible what was in the pilot's mind. someow that they performed of the safety measures or the procedures that were required when this safety system activated and started pushing down the nose, but they did not
do all of them. they were fighting what is called the trend system, part of what raises and lowers the nose. there will be all sorts of questions about how they were andned, how well comfortable they are flying a plane manually. and then of course, there will at how boeing designed this plane and why they did not raise warning flags earlier. haidi: we will hopefully get as badre details investigation continues over the next year. our reporter with the latest in washington. south korea preparing to launch 5g services. we will take a look at it. we had the results crossing the bloomberg. also going to unpack the latest results and whether we will see any signs of an improvement. this is bloomberg. ♪
shery: this is "daybreak asia." i am shery ahn in new york. haidi: i am haidi stroud-watts in sydney. samsung reported disappointing operating profit for the first quarter, missing estimates by 10%. joining us from seoul, daniel. i suppose we were looking at the magnitude of that miss. the lowest profit in camcorders, and just about a 60% drop from last year. none of this would come as much of a surprise, but going forward, does that mean a second quarter is where we will continue to see that and not so much of a recovery? daniel: right. as you said, clearly, the numbers are coming in a below expectations. it is down 40% quarter on quarter. luckily, revenues are
becoming better than expected. down from the previous quarter by around 10%. isarly, the biggest drop coming from the semiconductor divisions. operating profit at 4 trillion, which is down more than 50%. it is turning into a negative territory of the profits. it is up more than 95%. coming in close to $3 trillion in operating profits. consumer electronics also down 53% year on year, quarter on quarter. whether concern is that there is any turnaround in the second quarter, i doubt that. the operating profit will go down a bit more. probably to the territory of 5.8 trillion, which will be down year on year by 61%. looking at the quarter on quarter number, down another 10% or so.
so the concern is whether that will be you the bottom of the earnings cycle. the earnings to turn around, which should lead the prices in the future. haidi: do you expect a quicker turnaround? the price level seemed to be somewhat less negative. daniel: right. that is the key thing. right now, the main risk is it is all about what is happening to the prices. it is going down continuously at the low level. that is affecting the semiconductor profitability's, but as we can see, it is doing better, but the operating profit margin over there is less because you have a much higher cost related to the modules and other components. affecting the
sales operating profits. all in all, it is about the semiconductors. whether or not that is going to bottom out. out tohink we are coming the price decline going into the third quarter this year because we expect the server demand to phonep as well as the sales being better than expected going into the second half. shery: it seems analysts are a little bit more optimistic about this bottoming out. this gtb chart on the bloomberg showing the philadelphia semiconductor's index just yesterday close at a record high despite the fact that prices have been falling. what is this telling us about where analysts are putting all of these chip stocks for the rest of the year? daniel: if you think about it, at the beginning of the year, i
heard so many investors, including the hedge fund managers, were heavily shorting of what you because are seeing right now. it is a significant drop year on year. with the earnings drop, everybody was worried about it , but stock prices are doing very well. all that is because whether or not the bottoming out of the cycle will happen within this year, and yes, we think that is a possibility because of two reasons. number one is what is happening to the server demand that is happening. the people postponed these investments. they are coming in quite heavy and the second half. s-o, all about the us 10 -- 10 sales. the sales numbers are coming in better than expected.
the numbers are coming in better than expected. we think the price should be bottoming out sometime in the therefore,ter, and the pickup should leave the price going into the future. shery: when it comes to samsung specifically, we are seeing south korea launching national services this week. how much of an edge will that gives samsung over apple and huawei? daniel: right. i think that if you look at last year, you have seen the smartphone sales not really growing in terms of the shipment. that was in samsung as well as apple. they were sharply rising in terms of the sales numbers by more than 33%. going into this year, we're seeing what is different. be picking ups to quite interest and it is a significant upgrade for the smartphones. it might be coming in at something similar to that.
what that means is that the demand cycle, there's upgrades which seem to be much better than expected. pay moree willing to for a better technology and better phone. why is that the case? you are talking about the 5g entrance right now. most likely going into the future, the 5g service will be starting faster than expected. that being said, we think demand for the phones will be coming in at better than expected. shery: daniel, always great having you with us. thank you so much for your insights, daniel yoo. if you missed part of that interview or you want to the logic, tv is your function. you can watch us live. you can dive into the securities or functions and become part of the conversation. send us instant messages during our shows. tv . this is bloomberg. ♪
haidi: this is "daybreak asia." i am haidi stroud-watts in sydney. shery: the rearrest of carlos his briefcut short freedom. back in his tokyo sell, his legal prospects do not look very good. stephen engle has been on top of this story from the very beginning. again, soind bars just making it more difficult for him to prepare his legal argument. absolutely. running parallel to a serious legal case is the tug-of-war of perception and narrative, all right? the first 108 days that carlos then was in detention, prosecution of nissan controlled the narrative publicly. he has been out since march 6. he has a new legal team. he turned the tables on at least
a public narrative and then was going to have a press conference next thursday to tell the truth from his perspective. turnede prosecution has the tables on the narrative, throwing him back in jail and re-arresting him for a fourth time on new charges. this does serious damage to carlos ghosn's ability to build out his defense for an eventual trial, but also curbs his , as much asontrol possible, his side of the story, and that is what legal experts are saying. this is an parallel to the legal ramifications. he is in serious jeopardy if these new charges are proven true. they are considered more serious than the previous charges. who says thealyst chance now for ghosn to come out andn is getting slimmer slimmer. that is on top of comments we got before this rearrest from a
law professor in tokyo who says things could change for ghosn's hespects of the time that was actually embezzling nissan money and that is what the prosecution says happened, basically ghosn dipped in to a for personaln expenses in the middle east and elsewhere to the tune of $5 million, but right now, carlos ghosn is back behind bars. thishis lawyer is saying detention could be even longer than the first one. haidi: so the allegations are more severe. this period of detention could be longer. what is his next move? what options does he have now? stephen: his lawyer said he recorded a video statement, if you will. he has also given interviews prior to this rearrest to two french television stations. we are learning that perhaps he was aware that prosecutors would
rearrest him so he got his ducks in a row beforehand, even announcing he would have that news conference with the awareness that perhaps the prosecutors would preempt that and rearrest him. he had an interview with a french tv station saying he knew of what they are describing this as far back a plot as may of last year. ghosn says they were moved. -- there were moves he was aware of to push him out as ceo. here is what he told the french television station lci. the way it all happened shows there was a conspiracy. but again, these are just parts of ghosn trying to control the narrative. he says he will not be broken. he says these were, you know, an unfair way -- outrageous, he said, rearresting him -- outrageous, he said, the arresting him. -- rearresting him.
haidi: the story continues to get more extraordinary. stephen engle with the latest on carlos ghosn and nissan. nomura is losing jobs -- is losing jobs. japan's largest securities firm 150 positions worldwide. it is focusing on the risk transactions. their operations outside japan have lost money. the ceo says it is time to "restart this company." shery: one of the world's most famous cartoon characters is cashing in. the production company behind pepe pig says revenue has jumped and it is planning new attractions in the mainland and the u.s.. shares jumped to a record in london bringing gains for the year.
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>> and a very good morning, i am haidi stroud-watts. major markets have just opened for trade. shery: welcome to daybreak asia. haidi: our top stories this friday. samsung in the spotlight. last week's earnings are alert is confirmed as profit plunges 60%. president trump says trade talks are going well and a monumental deal could be spoken about in a few weeks. ghosn said the
campaign to drive him out started almost a year ago. right now, we are hearing from a news agency that 8 -- that the chinese president has called for an early conclusion of the u.s.-china trade deal. what is happening in asia? is a little bit of managing expectations and asia. we have seen pretty robust gains msciout 1.6% on the asia-pacific this week. investors are happy to take profits as we have greater china closed for a holiday. the nikkei 225 out of the gate with a little bit of an upside, the .1%. it will be interesting to see if we see semiconductors continue the rally given the decline we
saw in samsung earnings. the dollar looking like it is setting a stronger direction. fromng more on the line -- chinese news agency ining the chinese president a message sent to president trump. more details on that as we receive them. momentum is resuming when it comes to the china-u.s. trade talks. ed ludlow has more from san francisco. >> president trump says a trade deal with china is not finalized "a monumental agreement could be finalized in the next week." the president said there is a the two sides are rounding the turn. the main issues to be resolved include ip -- i.t. protection. >> we have never done a deal
like this with china. unique.s very a unique set of circumstances. it is a massive deal. it could be the biggest deal ever made. no matter where you look. this is the granddaddy of them all. isthe united states threatening to restrict the flow of information to nato allies if they ignore warnings about chinese technology. like pompeo made this morning yet ratcheting up the washington campaign against annahuawei. say the threatrs from china is not as dangerous as has been claimed. ifwe have made clear that the risk exceeds the threshold, we simply cannot share the information any longer. summerrstand every nation will make its own
decision. the united states will make its own. despitedent trump says the destructive action of the fed, the u.s. economy is doing fine and trade agreements with china, canada, and mexico are moving along and american optimism is hard -- is high. herman cain could be pushed to the fed board. jobless claims fell last month dropping to a near 50 year low. the labor market is tightening. volatile four-week outreach declined to its lowest level since october. at the same time, the adp research institute says the firms added the fewest workers since march 2017 intentionally signaling some weakness. samsung reports that its worst operating profit drop -- samsung
reports its worst operating profit drop. $5.5 billion, 10% lower than analysts were expecting. samsung issued a rare warning last month that its result would be short of estimates reflecting a slump in orders. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i am ed ludlow and this is bloomberg. much. thank you so we are getting lines through from the chinese news agency progressat substantial has been made in the u.s.-china trade agreement according to the chinese president. he also called for the early conclusion of negotiations on u.s.-china that trade deal.
president trump said any trade deal with china is probably weeks away although both sides are making progress on an accord that could be very monumental. our next guest says the biggest risk is trying to achieve too much in too short a time. david goad is joining us. gaud is joining us. whenarket is wondering this will happen and not death. -- and not if. see what still have to will actually be in the agreement. there are a few points that will be quite important including the existing tariffs that are in place, if they will be lifted for good. that will be annexed or positive surprise and would add extra growth to both the u.s. and china over the next 12-18
months. that is a plus. the other thing we are watching for is how it will be implemented. i.t. protection is quite sensitive. how it will be implemented. sense -- to that agreement may be very ambitious and large but the implementation will have to be watched out for so details will have to be looked into. it brings back a lot of growth as well as expectation and momentum. we may see down the road the fed being forced to resume tightening edgers. view, liquidity point of the market may start to wonder again if inflation is not going to come back or if the fed is not going to have to tighten again further. in the balance, we should not be optimistic.
it is a positive but the markets have already priced in quite a lot already. haidi: how long would it take to undo the damage seen to investor sentiment? see a expect to significant impact when it comes to company earnings as a result of a trade deal? at thewhen you look , in particularia the consolidation we have seen in the last few years. the domestic market is becoming more important to a number of local companies. it did slow down the investment process and it blurred the horizon and the opportunity though it did not stop the whole move. a lot of corporations have kept investing and preparing. if global trade does reopen,
that is great news and it means we do not have to relocate and a lot of questions would be put to rest so people could refocus again. that would mean next are growth. but at the end of the day, there is a lot -- there are a lot of positive things that have happened in asia in particular despite all of the uncertainty. first-quarterk numbers are not scaring the market because underneath, there are still structural elements in play that are pushing up the market. week, analystst were pushing two rate cuts. with easingn yellow at the end of 2019. given the recent stock rally we have seen, has the fed peaked in dovishness?
year, for the rest of the we are expecting potentially a maximum of one for the rate hike. the situation will be quite stable. but you know we have oil prices commodityrld inflation is coming back and the job market numbers from the u.s. yesterday were strong and the u.s. economy is still growing above the average. and global trade may bring back some momentum. pmi out of china so there is some restocking at play which should benefit a lot of countries across the world. in the second half, we could see a momentum return which could lead the fed to again decide to tighten further. not in the near term. we have seen there is a cap in
the interest rate horizon. there is still need for liquidity across the world. is quite interesting from the investment point of view. good liquidity but at the same time, the picture is gradually improving and across the world among asset passes investment we see opportunities at the moment. 2018 is when we saw u.s. exceptionalism whether it was on market growth or market strength. will that story continue this year or could china get a huge stimulus given how much they have eased already? david: there is clearly a very strong momentum that is benefiting the u.s. economy and only the u.s. economy. the interest rate differential is there to stay. country is the
only ones still left with an interest rate cycle to say china also has a kind of cycle but much less. the u.s. economy and market is a bit on its own and last year, the u.s. market did not benefit other economies. recovers, that will definitely help a large group of countries including korea and taiwan. markets like germany which have done extremely poorly in the last year would benefit more from a recovery out of china. the focus point should definitely be the chinese economy and chinese markets. shery: david gaud, thank you and cie asia.et the most aggressive policy in three years. we check out the future of the fastest-growing economy. and saving a billion
>> this is daybreak asia. i am shery ahn in new york. >> a does get you a quick check of what is moving in the early friday session in asia. reaction in the trading in dollar-yen and bond movement across the region. along the line from what we heard from the taiwan news agency. that the chinese president wants a quicker finalization of the trade agreement with the u.s. sense ofon the momentum we are getting in the trade story after president trump met with the chinese spice premier in washington. premier invice washington. president trump said we could
get the granddaddy of trade deals in the next few weeks. details to be hashed out. highr-yen trading in the 111 handle. s&p futures in the u.s. looking like it will extend the longest winning streak all year. to look at -- take a look at what is on the move. pressure on profit. toributing the loss operating income at 4% below estimate. samsung electronics, 10% miss on profit. numbers, -- not a great deal of surprise which is probably why we are seeing a move to the upside in samsung electronics and line with the broader rally we are seeing
globally in the u.s. and japan with semiconductors and expectations that perhaps out of the second quarter we will see a resumption in global demand. let us take a look at one of the biggest decliners in the u.s. session and one stock that nasdaq down further. regulators say that a tweet from elon musk violated an earlier settlement. a day in court came with tesla shares thinking. let -- tanking. let us start out with a court hearing in new york. highly anticipated. is this considered a win for elon musk or a failure? >> he was happy about it. he emerged from the courtroom grinning and welcoming the decision.
the judge basically rolled along the lines of the argument that the lawyers of elon musk was making. ought to be able to work this out. to reachhave two weeks an agreement on what more be goingrules will forward. this has been a big issue for the sec trying to be specific about what is acceptable. it is up to elon musk ultimately to decide what is a material disclosure. this has been an ongoing issue for the sec for a long time. in 2000 they implemented the fairness disclosure role. they updated it with the rolleds ruling when they it was acceptable to disclose material information on social media. elon musk is on pretty firm ground but the sec also set out
rules and we will see how the negotiations go. while this was a victory in the courtroom, shares have been dropping a lot so there could be pressure from shareholders as well that he at least modify the way he has been tweeting in a way that will not risk further decline of the shares. >> on that front, the sec was complaining that elon musk had not diligently tried to comply with the settlement. what can we expect now in terms of number of tweets coming out of elon musk after this? >> the pattern has been that he has disregarded what these orders have said. in court, his lawyers said that he diminished the number of tweets but our analysis -- you can see a chart in our article out an march he has sent
higher number of tweets then since june. what is the nature of the tweets and do they disclose information that is misleading. that is what originally got this started. it is not just the number of their nature. shareholders are bearing down on this. billionany is worth $57 but the shares are down 20% this year. billion from elon musk himself. a lot of money is at stake when he gets on twitter. >> thank you so much for that. nomura unveiled plans to cut about a billion dollars in costs. the lender also announced a pullback from businesses as it embarks on another sweeping overhaul of its international operations. we are joined from tokyo by
russell. talk us through the cuts. >> good morning. there are also cap's to the toestic -- all caps -- caps the domestic retail business as well. mention did not specifics in terms of job cuts but it said about half of the savings will come from personal cut and our own reporting says staff inr is about 100 europe, mainly traders. 50 in the americas. and there already have been some cuts in asia including singapore in the research department. ,econdary side of the business trading, specifically high trading is where there will because. high bonds. emerging market trading. that is the focus area of the cuts.
and looking at stream lighting -- streamlining a lot of the back office departments. consolidating those departments into five hoping to avoid a lot of duplication there. >> this is just the latest in a long line of cuts that have been happening at nomura since the lehman's deal a year ago. what makes these different? a number of businesses from lehman is where the trouble began. three rounds of cuts since 2008 since the acquisition. analysts have been mildly positive about this announcement and shares opened higher, about 1% higher.
bloomberg intelligence is saying that it may benefit from this move all other analysts are concerned that revenue may suffer. when you are cutting frontline traders, revenue is going to face some pressure. the bank is pledging to focus on advancingy business technology to boost revenue going forward. we will have to see if this comes in the future. >> bloomberg's asia financial editor. on the latest job cuts for nomura. plenty more to come here on daybreak asia. this is bloomberg. ♪
progress had been made with the u.s. and president trump also saying that a very monumental agreement could be announced in the coming weeks. we bring in our senior editor. seems like there is more positive news coming from both sides. what do we know so far? >> i think a lot of people woke up this morning saying there was not a deal announced a between the u.s. and china in the meeting between president trump and the chinese official. is what it means. signs we are getting from both china and the u.s. are very positive saying that a lot of progress has been made. the chinese president calling for additional leadership to drive a deal even more quickly. weekss. side saying 4-6 before a signing meeting. this is a president that walked away from north korean talks because a deal was not done
walking in. eager to not have that happen with china. something will be announced when a deal is done is where we are headed. >> 4-6 weeks is our timeline. >>what can we expect to happen next? more rounds of talks? expect more rounds of talks. trade talks. they will be confined to a couple of outstanding areas. is probably compliance. we will have to see what that looks like. what the timetable will look like. additional chinese purchases. there are thorny issues remaining. but this is good news if you're looking for a deal. there certainly has been progress towards a deal. both sides are acknowledging that right now. >> thank you. the latest on trade. the chinese vice premier is saying that new consensus has
>> this is daybreak asia. i am ed ludlow. initial reports into the ethiopian airlines crash was the dealtts -- was the pilots with the system. due to a faulty sensor, it has been linked to a similar crash in indonesia last october. thehe crew performed all of procedures provided by the manufacturer but was not able to control the aircraft. >> the pilots told us the roni activation ofs
the system can add to the heavy load are ready. slashingis said to be growth forecast and raising the projected budget deficits. the treasury will lower its outlook for expansion to just 0.1% in line with a bloomberg survey down from one percent in previous forecast. italy fell into recession late last year and is carrying a debt ratio of more than one a to percent of gdp. carlos ghosn -- ratio of more 0% of gdp. said that there was a conspiracy against him that dates back to at least last may. he said the internal trouble was
deeply harmful. and a robot russian supply ship has set a record for trips to the international space station. -- itted off from on kazakhstan from carrying three tons of food, water, oxygen, and other supplies. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. take a look at asian markets and how they are reacting so far. in risk appetite as they get lines from the chinese president. a message to president trump from the chinese vice premier. -- aregest takeaways is
that both leaders appear to be on the same page saying substantial progress has been made on the text of the trade deal and a lot of progress had been made in the past month or so of negotiations which have alternated between beijing and washington. president trump saying overnight that he expects a monumental deal to be announced within the next 4-6 weeks which sent u.s. stocks higher. in terms of asia, the center pen is a little bit -- the sentiment as a little bit more tempered. the kospi. despite theer plunge in profit in first-quarter earnings that we had in the last hour or so. here in australia, the declines getting extended. 0.7% lower when it comes to trade in australia and new zealand having a down day as well. liquidity conditions are out
there. several markets are closed because of the holiday. shery: you mentioned samsung does it -- delivering disappointing numbers in the last hour. operating profit falling the most in four years missing estimates by about 10%. peter, we are seeing the samsung shares are under pressure but not by that much. about 0.1%.y is that because we already had the profit warning from samsung? large i think that is a part of it. technology is rolling out today and that might be helping a little bit. some analysts already talking about how the market is looking at the second half. moving on from the first quarter earnings mainly because of the rare warning that was issued last month. it did fall beyond the warning.
but i think most people have moved on and are looking at second half particularly with the new technology being rolled out today. battle overwith the continuing in other parts of the world, could the 5g give a boost to the likes of samsung in terms of opening opportunities with artificial intelligence and the like? peter: that is the hope of some of the endless that the new technology, while it is still in its infancy and it is rolling out on a limited basis, is viewed as a possible big ticket item for samsung going forward. samsung today is rolling out the s10 withas ton -- a 5g technology. something like this will happen
next week and the u.s. and eventually rolled out across the world. some of the analysts we spoke with today talked about how there seems to be an appetite for folks upgrading their phones somee new technology and people are anticipating that it will be better than expected. haidi: thank you so much for that. bureau chief, peter with the latest on samsung and the 5g rollout in south korea. is a highs coal quality but the price is a bit of a dog. -- a bit of a bug. still posing a risk. prices are down almost 20% since early march. cheaper than china's domestic great. grade.omestic >> we are talking about thermo coal.
since the start of the year, there have been reports of chinese authorities holding up australian imports of coal at the ports. largely seen as retaliation. australia was banding h -- uawei from rolling out the 5g. australian producers have more coal on their hands and they are trying to find more markets for it. we have an unusual situation where there are low prices out of newcastle. >> how long is this divergence expected to last? >> that is the key for when prices will recover. there have been reports that the restrictions may be used in may may but thered in
is no confirmation of that. that can be no certainty restrictions will be eased in may. producers in china will be lighting up seeing this high quality coal at such low prices. there will be a temptation for them to step in because the prices will go up. high efficiency, low emission power stations need this high quality coal and they are still being built across asia. it is a question on when deal step in and lock in those low prices? >> james, thank you. policy is emerging from the bank of india while there is a more dovish message from a top policymaker at the fed. kathleen hays is here with the
latest. start with the r.b.i.. >> it was not that they did not cut the key rate, that would have shocked the market but as they cut the key rate and let us look at how that looked because it was substantial. since september. replaced patel at the top of the r.b.i. what is opening the door? inflation, which was above the 4% target has come back down. gdp has slowed. there are all kinds of reasons why the r.b.i. should be doing it. what is the problem? people have talked themselves into the idea that the r.b.i. would not only cut its rate but go from a neutral stance to an accommodative stance. what happened? a big selloff in the indian bond
market. thisan look back and see move up in yields. 10 basis points as soon as the headline broke that the stance was still neutral. it is interesting. you can see how the rates are being raised to fight inflation. off plateauing here. even as rates have come down, the yields have also come down. going so far, the r.b.i., as to open the door for more rate hikes especially right before the big elections which start next week. contrast, look at the fed where one official is sounding increasingly more dovish than she used to. >> loretta mester, president of the federal bank in cleveland was speaking today and she was making remarks. she said the following -- you're
looking at rob kaplan. let us move to this quote. she was asked about what about the end of rate hikes and if we could be done with policy rate .ikes for this cycle she said it all depends on growth. if the gdp was to go above 2% and the inflation was to go above 2% would determine that. patrick harker, president of the philly fed echoed what she said. he also was on the fence but he thinks maybe a little more hiking is in store. and seeuld be in a wait mode. at most, one hike for this year, 2019 and one or 2020. one for 2020. >> the jobs report will be very
influential. for the nextching jobs report this friday. are we did texting a more optimistic picture in march? slowed though jobs have down to only create me thousand. 300,000 in the month before. a gain of 177,000. 3.8%. the lowest since 1969. average hourly earnings rising three point 4% in february and are expected to do the same in march. as long as payrolls rebound, wages could be the most closely focused on. could have more room to raise the rate one more time this year. always a big focus on the u.s. jobs report. kathleen hays, thank you.
breaking news. we are hearing from the japan economy minister saying that japan is trying to have trade talks with the united states this month. they will announce a date or talks when it i is decided. the minister was speaking in tokyo right now. these are very much in focus as president trump has threatened .uto tariffs a lot of countries depending on negotiationsde go. this coming at a time as well when we are seeing reports out of china -- where they are saying that there has been new consensus on the trade deal between china and the united states. is right.t seems like momentum is growing when it comes to trade on all fronts adding more risk appetite when it comes to trading in asia this friday. sayingghosn lashing out
>> this is "daybreak asia. the rearrest of former cutan boss carlos ghosn has short his brief freedom and now back in his tokyo cell, his legal prospects do not look very good either. continues. the twists and turns are so dramatic. where are we at? >> his legal prospects are a bit dimmer. it is more advantageous for him to be out on bail as he has been since march 6 until yesterday when he was rearrested.
it is the battle of the narrative publicly that is back in the hand of the prosecution and perhaps even the current nissan management as they are building the case arresting carlos ghosn for the fourth time adding new accusations. this time of possible embezzlement if you want to use that word allegedly of course of about $5 million from a fund thatwas nissan's money carlos ghosn allegedly had control of. that was allegedly used to pay for personal expenses in lebanon, oman, and elsewhere. a convoluted case. bottom line, according to legal experts and fund managers that we spoke to come at the legal prospects for carlos ghosn today as opposed to a few days ago when he was out on bail are dimmer. manager inasset tokyo and he said the chance for clean ghosn to come out
is getting slimmer and slimmer. just before his rearrest, we heard from a law professor from tokyo saying that things could change for his prospects if it turns out that he was actually an puzzling money from nissan. carlos ghosn has maintained his innocence saying he will not be broken. he says the rearrest was outrageous and arbitrary. even the lawyer said yesterday that the rearrest or a man out on bail is extremely inappropriate and irregular and he criticized the japanese justice system which japan's legal system has taken a beating but now, of course carlos ghosn is behind bars again. prosecutors said his agree arrest was because he was a flight risk and he could destroy evidence. a he might not even have chance to change public opinion because he cannot have the news conference that he wanted to have. what is his next move? anticipated that
he was going to be rearrested which is why he called for the thursday,rence next april 11. the prosecution that came out the next day to deny him so there was a perception battle there but he also recorded a video statement. to be waiting for it released so carlos ghosn can have his say on a videotape. he did give interviews to two french stations. he said he was aware of a possible plot to, a conspiracy he said, of ousting him possibly as early as may of last year. he said the way ed all happen shows it was a conspiracy. that is what he told lci television from france. another french station he told that the conspiracy runs deep. systematics been a
demolition and we know who is at the origin. in nissansome people who are at the origin who benefit from this duplicity. japanave acted outside of notably in france. that goes without saying this is an extraordinary case that is not only being played out behind the scenes and the tokyo legal system as well as publicly. as carlos ghosn is back behind bars after he spent the first 108 days of the saga in the tokyo detention center. >> thank you. the indonesian central bank chief says it plans to keep rates unchanged at the moment given global uncertainty. in an exclusive interview, the governor says the bank will use macro prudential policies to support economic growth. >> the design of our monetary
[indiscernible] increase --g now an probably only once this year or next year. will see what that information will bring about. for the time being, of course, --.ave to look into our we are still holding for the time being. this will impact our economy. ahead of the curve, however. had a months ago, we dovish fed. have you been surprised by the powell?urn from chief >> everyone is working at the
u.s. with very strong growth last year and now declining. towards 2% and even below 2%. reflecting a response to this development. we are watching this development for our policy. limitedovish fed has the outflows from emerging markets including indonesia. do you think there are other pressures perhaps from japan or europe? marketglobal financial is still dominated by the u.s. development inat japan and china and other emerging markets but we do believe that the u.s.
development is still the dominant factor in driving the flow of the emerging market. we are quite positive and quite pleased that we have done right last year. >> is it time to have a different priority? during the route, you talked about how financial stability was important. could growth be the priority this time around, different from six months ago? , becoming condition one of the important factors. was year, the condition really uncertain. we prioritized our stability. now, we have more room.
to work. back to your first question, we are becoming more preemptive and forward-looking and relaxing hour liquidity injection -- and quiddityhour the injection. iditylaxing our liqu injection. that was the governor from the bank of indonesia speaking exclusively to bloomberg. don't forget, if you want to catch up on any of the interviews, go to our interactive tv functions, tv where you can watch as live or catch up on any of our past conversations. you can join in on that conversation as well. this is bloomberg.
president trump, the vice premier, the chinese president called for an early conclusion to negotiations. he took part in washington discussions and said a new consensus had emerged. we saw some reaction in the markets. the chinese president wanted to encourage the spirit of mutual respect and mutual benefit and get this done as soon as possible. we saw a pickup in risk appetite. there is a holiday. the greater chinese markets including hong kong and mainland china are closed today. for daybreakit australia and daybreak asia. coming up next, bloomberg markets. ♪
♪ 9:00 a.m. in hong kong, singapore, and shanghai. , talkingur top stories trade. china claims a new consensus and calls for a swift conclusion. president trump talks of a monumental deal on the horizon. alert, earnings first-quarter operating profit plunges 60%. must: boeing says it decrease risks. says thel report ethiopian crew was overwhelmed