Skip to main content

tv   Bloomberg Daybreak Australia  Bloomberg  August 13, 2019 6:00pm-7:00pm EDT

6:00 pm
paul: welcome to "daybreak: australia." sophie: i'm sophie kamaruddin in hong kong. counting down to the major market open. stephen: i'm stephen engle at the hong kong airport. demonstrators are being worn they have crossed the line. paul: markets rally as president trump delays additional tariffs on china. consumer stocks lead the way with apple surging 4%. from huawei.nd
6:01 pm
income fell less than expected. shery: let's get you started with the quick check of the market close. a risk on that with the s&p 500 rallying 1.5 percent. every sector was in the green. investors had a lot to digest, from positive trade headlines in hong kong and argentina, not to mention a strong economic number. wen it comes to the s&p 500, saw the makers and sellers of toys and clothing and electronics really surge after president trump delayed that extra 10% tariff on additional chinese goods. the nasdaq also gaining almost 2% and the dow rallying more than 370 points. the trade headlines came a little bit after we got those ,urprisingly strong cpi numbers
6:02 pm
to avert the argument that we could continue to see the fed cutting rates. futures at the moment unchanged, but let's see how they react as the trading continues in asia. sophie: we are set to echo some of that tariff delayed relief futures in asia, a busy day for earnings and data. unaudited cash profit coming in additionsnk said would be added. tencent is today's heavyweight as political unrest intensifies in the city with the hong kong airport severely disrupted for a second straight day. tokyo stocks could resume gains,
6:03 pm
pushing valuations even lower as for how to get back strength in the second half. china expected to deliver week activity data for july. machine orders from japan, korea and jobs data and aussie wage numbers as well. paul: let's check in on the first word news. >> a key measure of u.s. consumer prices unexpectedly accelerated in july, signaling inflation maybe firming as the fed debates whether to lower interest rates again. the core consumer price index which excludes food and energy rose .3% for june and 2.2% from a year earlier. both gains exceeded the meeting surveyed of economists . inflation slowed for the first time in july in six months, offering a reason for the r.b.i. to remain dovish to spur growth.
6:04 pm
consumer prices rose 3.15% from a year earlier, faster than the meeting estimates in a bloomberg survey but well below the banks for percent go. the r.b.i. had to lower its rates four times this year and the governor has said each move will be dated-dependent. pakistan is calling for an urgent meeting of the un security council to discuss india's decision to revoke autonomy. islamabad said the move poses a threat to peace and security and threatens to trigger conflicts between two nuclear armed neighbors. pakistan also says india will provoke a standoff to divert attention from growing problems at home. 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. this is bloomberg. story, thehe top trump administration is delaying new tariffs on some chinese
6:05 pm
imports until at least mid december. those include laptops and cell phones, but other items including agricultural products will still be hit with new duties of next month. sarah mcgregor joins us now. spareent trump trying to the christmas shopping season. the this essentially undermine his -- his own argument that the tariffs don't hurt american consumers? sarah: we even heard from trump today, he acknowledged the delay in the tariffs was at least partly due to the fact that the holiday shopping season is coming up and it would hurt some businesses. it's loud and clear that this might increase prices is. -- increase prices. there is that small acknowledgment that prices may go up. business has been telling him that and a tariff delay is not a bad idea. we are left wondering what really is behind the decision. there was a phone call between senior officials, u.s. and
6:06 pm
chinese officials, and what did they discuss, what was promised in that call that may have also led to the decision to delay some of the tariffs? we saw a rally on equity markets as a result of this good news. does it open the door a crack for some progress here, or is this another false storm? we have had a few. sarah: the markets jumped on this news as they often do. we've seen the markets really react. it's good to keep it in perspective that we have no reason to believe right now that there has been any progress in the talks. or that the two sides of any closer to deal. we don't know were motivated this reprieve, whether it was a political move by trump to shield consumers and businesses ahead of the busy holiday season in the last four months of the
6:07 pm
year, or whether there is reason to believe that he thinks he knows a deal could be closer or that china is willing to work toward a deal with the u.s.. i think for now, it is what it is, and we will have to see if there are talks come the next round between senior officials. there's a phone call scheduled in two weeks and we will have to see if any real progress is made. paul: sarah mcgregor, thank you for joining us with the latest on the trade front. let's get over to hong kong which is bracing for more unrest after violent crashes halted flights at the airport for a second day. president trump says china is moving troops to the border. the u.s. urges paging to respect the cities autonomy. meanwhile an investigation into the use of tear gas by police. let's get over to the hong kong airport in stephen engle. another night of chaos, so what is the scene there now? is figuratively and
6:08 pm
literally night and day. when i walked in at 5:00, it was an orderly operating airport. planes are landing, passengers were arriving. nothing like the chaotic scene we saw late last night and still at midnight. we have all seen most of the night, protesters surrounding a number -- at least two different, what they claim to be mainland sympathizers, if you will. claim one was a security adviser. they beat him and tied his hands and they would not let paramedics come in and take them away. led off to the hospital. another individual was found to have a t-shirt saying i love hong kong police. they tied his hands to a luggage trolley. it was a chaotic scene as they
6:09 pm
blot passengers from getting to their airplanes. i want to set the scene now. that was last night until a little after midnight. let me step away here and let our cameraman pan off and show the arrival hall now. few dozen at most protesters are left. we are hearing most of the protesters cleared out of their own volition late last night, just after midnight. many are saying they wanted to catch the last train home. the few remainders here have been huddled this morning, trying to figure out what their plan is for today. they are leaning toward calling their brethren and sisters back today for another day of protest. you can also see -- maybe you can't see it clearly, but that is the arrival board up there. yesterday about a third up to a half of the flights read canceled or delayed. next i don't see any red
6:10 pm
to any of the flights that are arriving. so orderly chaos? that could be the way to describe it this morning. shery: i'm getting a little bit to art of asking the same question, but really, what is next in terms of hong kong? where did the protesters go from here and where does paging go from here? what could we hear from the hong kong government now? stephen: that's what everybody wants to know, what is next. said many of the protesters did leave up their own volition, catching the last train home last night. we -- there were some riot police, a small contingent of police here. we are hearing some pepper spray but from what i'm hearing they were beaten back. so the police did not cure them
6:11 pm
out. if the protesters come back again today, we are hearing they do have a court order, so it could be confrontational. donald trump had that tweet saying intelligence sources are saying more troops are building up on the chinese border. perhaps another threat from the chinese, that the troops could come down. but increasingly state media has been showing videos of those thembled soldiers from people's liberation army just across the border. that is the overarching threat that china is using, as they also use the terminology two days ago, terrorism. that could be a precursor, if they use that technology, that could be a precursor for using some kind of action. paul: stephen engle, thanks for joining us there at hong kong airport. let's look at the situation in withkong a little more
6:12 pm
andrea mitchell. you heard stephen there talking about a couple of interesting developments there, the use of the word terrorism. president trump issuing this warning about u.s. intelligence showing chinese troops appearing on the border with hong kong. to carry ado tend fair bit of geopolitical risk, don't they? >> they do, and the use of the term terrorism is what we distinguish the level of responsibility. anything short of terrorism, domestic instability, is something that can be dealt with by the local authorities. the use of the word terrorism really warrants beijing's intervention from its perspective. an excuse for the people's armed police or the people's liberation army to intervene. i don't think the preparations are a bluff or are meant to
6:13 pm
scare the protesters. they are probably real preparations for potential intervention. i think we will avoid one for the foreseeable future. paul: let's run that scenario, if we can imagine the potential to see chinese troops on the streets of hong kong, what would that mean, what sort of international reaction with that provoke and what would it mean for companies that currently operate in hong kong? andrew: in terms of physical assets in hong kong it would lead to a dramatic downturn from already low levels at the moment. in terms of the country -- the odds of the u.s.-hong kong active 1992 being amended to preferential status, i think that would remain a little further off. probably the first steps would be to punish a number of chinese political leaders individually,
6:14 pm
the visa restrictions and individual sanctions, but i don't expect the u.s. is going break hong kong status as an economic hub, if you will. would beijing risk the international backlash of moving into hong kong when they could in fact have the hong kong government and police do their bidding? great point.aise a we think they will not intervene, not so much because they would be hesitant to do so, we think they have all the results necessary from a political standpoint, if it -- if they feel they have to intervene, then they will. to your point, they can probably .anage this via proxy with plainclothes civilian police and other advisors on the ground, without necessarily
6:15 pm
having to trigger a full-blown invasion or intervention, if you will. shery: hong kong just adds more pressure to president xi. how much of a reprieve did he get this time around as president trump delayed that extra 10% tariff on chinese goods? andrew: i think it is a large reprieve for president xi. it comes at an opportune time for the summer meetings. the reprieve in my mind is less on the 150 $5 billion in tariffs on. are exley going to be more important, today's mood by president trump shows the president is worried about the economic and financial implications of his stance on china. to me that is a sign of weakness on the u.s. presidents part, that beijing will be keenly observing and noting in its negotiation strategy. xi is thate away for
6:16 pm
he holds the upper hand in the coming months. is that a tacit admission that the tariffs are starting to hurt u.s. consumers? andrew: it certainly was. the caveat is i believe it's more and admission that the tariffs could eventually hit consumers, especially in the way they are being delayed, until december 15 at the earliest. if you consider there is a one-to quarter delay or drag in the real impact on the real economy, you are essentially looking at the fact that the in 2020ld really come and potentially late enough that it won't affect president trump's chances in the campaign next year. so i wouldn't get overly worried. obviously we are in a late cycle situation, environment. i am not among those who believe that president trump's trade action will trigger a recession,
6:17 pm
per se. shery: thank you so much for that, andrew. ceol ahead, former cisco and chairman john cheever's joins us to talk trade and tech, as tensions continue to unfold. he will detail his latest ai investment. boostrisk assets get a president trump's tariff war, s treasuries tumble. we will get into the market action. this is bloomberg. ♪
6:18 pm
6:19 pm
shery: welcome back. let's get you started with a look at some of the sox at rallied after the president delayed those 10% tariffs on chinese good. -- goods. apple rallied more than 4%. tv, mac computers and
6:20 pm
apple watch, not so much. they we hit by tariffs on september 1. we also had electronic sellers like best buy seeing the best gains on the s&p 500. --ailers also rallied like toy mug -- toymakers also rose by 2%. is a research analyst, great to have you with us. we continue to see these reactions in the stock market, the latest trade headlines. given how tech and semiconductors have been caught in the crossfire of the u.s.-china trade war, are there specific sectors that investors should still stay away as these trade developments continue in the next half of the year? >> thanks for having me. i don't think there is a specific sector that investors should avoid based on the tariffs and changes in tariff
6:21 pm
policy. i do think investors should be careful about buying businesses that are lower quality, have weaker balance sheets or weaker management teams. i think if investors want to stay the course through these negotiations and issues, they can look toward businesses that will weather this fine. shery: in your notes, you mentioned samsung electronics as one of them, which i find pretty interesting. they've been affected not only by the trade tensions but also because of the japan and south korea relations. this chart shows the blended 12 months forward pes are now showing they are the most expensive level in years. that's the 10 year average in red. this as their outlook has become a problem. why do you like a company like this one? we have seen in sharp
6:22 pm
decline in dram and memory pricing. that's why the forward pe looks really elevated. on a normalized basis we think the pe is in the single digit range. one thing we like about samsung is they have built a tremendous cash balance sheet and a tremendous competitive advantage in the memory industry over the past 15 years. their management will have to manage through that as well but samsung has done a good job of integrating certain components and manufacturing processes. it leads the industry with a 40% share. it will be difficult for any supplier to samsung to observe pressure over that term. so we are white comfortable holding those shares. paul: i guess that fits with another part of the strategy to get long and just sit tight and you will be ok. wouldort of volatility you expect to have to stomach in the medium-term?
6:23 pm
grady: we will have periods of drawdowns. horizon,ok at 18 year we have an expected total return based on the current yield on global stocks and the expectations for 5% or 6% earnings growth. certainly our valuation across markets are average in our view. so we could see multiples expand and contract over that 10 years based on sentiment and changes in global economic activity. paul: in of valuations as well, i know you like the u.k.. i guess you can put brexit to one side and just hold on tight. there are two kinds of bifurcated outcomes for brexit. we don't know how stocks and currency will react. we have already seen weakness in the pound and for businesses in the u.k. that we on, the valuations look reasonably
6:24 pm
compelling on a normalized basis. the 2016hen presidential elections occurred in the u.s., and the market seem fairly certain that if trump were elected, the markets would do poorly, and of course, the opposite happened. i think they can feel comfortable staying the course through these political uncertainties. shery: we continue to see signs that we may be headed toward a recession. this is a three-month 10 year spread, retreating further into negative territory. owningfortable are you cyclical stocks in this environment? grady: there are a lot of signals that suggest a recession is more likely now than we would have said a year ago. hopefully they can gain market
6:25 pm
share through the recession into a recovery. we think it is important for a proportionate portfolio to be in or defensive sectors as well. it doesn't have to be utilities and sectors that have been bid up. health care is where we have seen some opportunities, for example. not factoring in any kind of currency expectation. the dollar has been so strong for so long, some would argue it is overvalued relative to other currencies. if the dollar does we can, that would be an advantage to the portfolio overall for u.s.-based investors. overall in might have a neutral impact across the portfolio. burkett, thanks very much for joining us. an alert on the bloomberg terminal, hong kong airport says operation is now normal and
6:26 pm
flights are being rescheduled. when i first read that i must confess i thought it said operation new normal. the airport working toward rescheduling flights after we saw another night of chaos there in the hong kong airport. shery: let's get a quick check of the latest business flash headlines. cbsoff-again on-again viacom romance has finally led to a marriage. the all stop deal unites the most-watched u.s. tv network with the parent of paramount pictures, mtv, and nickelodeon. shareholders will have 61% of the company with the remainder going to viacom investors. .hery redstone will be chairman paul: the maker of hp laptop says it will shift production of u.s. bound computers out of china within months, as the
6:27 pm
trade war heaps pressure on the tech industry. ining into its home base taiwan as suppliers reassess their dependence on china. telling the earnings call that the escalating trade war is very painful. s3 partners say there have been three quarters of market gains in 2019 so far. musk took ton social media to attack what he called value destroyers. and to create -- to prepare for the short burn of the century. come, we weto talking chips and hot hi earnings.--honhai this is bloomberg. ♪
6:28 pm
6:29 pm
6:30 pm
-- we saw a.m. time , andequities rally encouraging sign on the trade front. about .75% here in australia. shery: it's 6:30 p.m. in new york. you're watching "daybreak: australia." let's get the first word news. >> president trump has vowed to pressure from corporate america, delaying additional tariffs on certain products imported from china. be imposed until mid-december, with the president
6:31 pm
acknowledging that higher prices would have impacted consumers in the run-up to the holiday season. hong kong is bracing for more unrest after police crash with protesters at the airport where chickens for departing flights were suspended. two men were accused of being mainland police undercover. president trump said china is moving forces to the border and hong kong authorities say protesters have crossed the line as civilized society. iran said it expects the oil tanker seized by u.k. forces to be released soon, something that could help ease shipping concerns in the gulf. saidfficial news agency documents have been exchanged between tehran and london and the problem maybe that was in the near future. a resolution could also mean the ilease of a u.k. tanker that ran seized in the straits of hormuz.
6:32 pm
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. this is bloomberg. shery: we are setting up for a busy day for earnings in asia. let's turn to sophie for what to watch and other companies in the lineup. sophie: in australia, slight increase in profits for the third quarter. though there expect more provisions in the second half including service fees. cso reported income missed estimates at 1.19 million aussie dollars and announced a higher final dividend. out this morning we had the sports apparel maker shifting the focus in spending on digital
6:33 pm
channels. it said it will continue to close down inefficient stores. what wet's get more and should be watching his trading gets underway in asia. adam is with us. another twist in the trade war socket. how sustainable is the relief ?ally going to be adam: the key question is whether show short-term relief or people are factoring this one move as a more significant move but the u.s.. it seems like we're in the former camp and it's just a delay, pushing that date forward a little bit, by a few months. it does provide some short-term relief, but really people are assessing whether it does have further legs. in terms of asian markets, you could see a decent relaxed -- reaction in japan. the yen has we can buy 1.4% against the u.s. dollar. thertant to note here
6:34 pm
context remains in this chart shows pretty well, multi-asset volatility remains very elevated at the moment. volunteerout equity as the move index of treasuries volatility. also for fx markets as well. volatilityelevated relative to what we seen over the past 12 months or so. clearly a little bit of that will come off today, but whether or not it resets a regime change in how people are seeing the trade war, it doesn't look like we have got that far yet. some: could you provide relief for the chinese economy short-term? economic a slew of data out of china. what are we expecting? adam: of course the data today is centering on retail sales and industrial production.
6:35 pm
the july figures will showing pretty much a sideways movement to be essentially flat or down. it's not really showing any meaningful improvement there. the backdrop and context of this policies areurther you going to see from the pboc and from authorities in china? there's a lot of disagreement and how they continue to manage their orderly depreciation of the currency. that is the way the currency goes over the next 12 months. whether the data today give see any meaningful impact on how policy is going to materially change, we doubt it, but certainly it will give us the latest read on what is happening on the ground in china. paul: adam, thanks for joining us. some out our library for of those charts we have been
6:36 pm
gtv on the bloomberg terminal. the chip surge was a nice reprieve from recent losses but the supply chain is already shifting operations. i guess joins us from san francisco. earlierhearing a little mademaker of hp computers the decision to shift manufacturing to taiwan out of china. this sort of illustrates the point that day-to-day shifts in the trade dispute don't really affect the longer-term picture of having to reorganize the supply chain, does it? >> we have been dealing with the tariffs and the changes to the supply chain since followed last
6:37 pm
year reminds us that the threat of tariffs caused the taiwan supply chain to start shifting operations outside of china, and those actions actually accelerated into early 2019. what we have been seeing is taiwan, along with other manufacturers, diversifying more outside of china, simply not knowing what the outcome of the tariffs would be. at the same time, there pockets of excess inventory in the supply chain is manufacturers move operations outside of china. it has been very confusing and has created a lot of chaos as we go through this transition. paul: so this news we've had today that there will be a three month pause until december for some of the consumer electronics products, if you are a ceo of a tech company, is that enough for
6:38 pm
you to hit the pause button on your supply chain diversification, or do you just think it could be another false storm and we will continue? >> we have been expecting these kind of tariffs to have some disruption by increasing the cost, but we have seen some near-term remedies at the last minute moving through this early in the year. september 1 deadline that has changed to december 15. this is creating some disruption since supply chain, but these delays have happened a couple of times, i get the sense worriedple are less about the actual tariffs and now are making changes to the supply
6:39 pm
chain. we have yet to see the impact. i think at the end of the day, consumers will end up paying more for consumer gadgets. shery: at least when it comes to these trade tensions. seem problems for huawei to have led to some gains forhon hai. can this be sustained? >> i'm not sure if it can be sustained. what we saw early this morning could perhaps reflect some buildout of the new iphones that will hit the stores late in the fall. it creates an artificial spike in the month of july and it helps huawei with their recent earnings report. but i don't think it is sustainable. we're are still dealing with the smartphone market that is mature.
6:40 pm
away, andor two years the supply chain is creating volatility in the quarterly earning reports. shery: as customers wait for the 2020, whatperhaps in does it smells -- what does it spell for companies like hon hai? >> they are benefiting from the early structural buildout for 5g. china is leading the pack. investment in europe and north benefiting huawei's competitors. i'm not sure if the 5g phone will be a part of it in 2020. it is more like 2021. the consumer segment, in my
6:41 pm
opinion is more of a 2021 catalyst, not next year. thank you so much for the and then hon hai semiconductor industry. breaking news, brookfield forerty agreeing to buy avo $125 per share. this deal has been speculated for quite some time. this would be around the 9% premium from the close. this is a retirement care stock. avo and theto buy board unanimously supporting the takeover offer from brookfield. coming up next, we will sit down with john chambers. stay tuned. ♪
6:42 pm
6:43 pm
6:44 pm
india-based ai startup has raise $51 million in its largest round of funding. it is expanding in north america and building a presence in silicon valley. one of its backers is john chambers. john joins us now from stanford university in california. always great having you with us. basically you will be competing with tech giants like google and microsoft and a dozen other ai startups when it comes to automating the call center industry. what differentiates this startup from all others? john: i think first its numbers speak for itself. is growing at 300% per year. it's been one of the few indian startups that are enterprise to enterprise that are successful in the u.s.. u.s.ew over 400% in the
6:45 pm
last year. the fact that it the money so itily, and the ceo would say wasn't as easy as it sounds, is good for the market as well. the customer service market is a 300 $2 billion market. artificial intelligence and automation is what will drive that market very strongly and voice is the new interface. these agentso make so much more friendly and easier to use is key. if you watch the millennials, two thirds of them will switch companies because when they call into call centers, they don't get good service. 40% of calls to call centers are not even resolved. i think this will be an example of how you see startups expand throughout all of asia, not just silicon valley or one or two locations in asia. paul: a critical question is,
6:46 pm
does it work? recognition ai is notoriously, let me be impolite, unreliable. in my world, you never consider it perfect. if you look at what's really occurring, you can take an australian or west virginia accent and it will understand the absence really well. it's not just one language but across 150 different languages. the ability to do this in a way that dramatically changes the consumers view of the company. most companies have commodity-like products. people think of the market where ceos think 80% of customer service is very good where less than consumers -- 10% of consumers agree. asked question shery
6:47 pm
earlier, i think you will see the challengers unseat the incumbent in this marketplace. shery: you mentioned the potential of asian startups. you have been investing heavily on india. why do you like these companies and where do you see the most potential? john: if i were betting on one country in the world in terms of gdp growth and the rapid growth of their startup marketplace, i would bet on india. the prime minister has done an amazing job there. grow athis economy will 7-11% per year. what is exciting is how quickly it has changed. i bet on china in 1995 in a big way. one of the first american high-tech companies to really bet on china in a bit rate. that is where i see india today. you are seeing growth in korea, japan, australia and southeast asia. startups that i think almost all job creation globally will no
6:48 pm
longer be in the big companies. it will be in the small companies and startups. very important to our countries -- to a country's future, how the start of economy takes off. voice will be the primary way we will interface with machines of the future. these 500 billion devices connecting to the internet, the way we as people interface through machines will be through voice, in my opinion. shery: the tech industry has been one of those affected by the ongoing trade tensions between china and the u.s.. how positive a sign is it that the president delayed those 10% tariffs on some chinese goods, when you still have ongoing issues in other areas? john: i think you have identified the issues properly. i try not to look at the individual moves in the chess game from both sides, but look at the big to. the big picture is the
6:49 pm
relationship between the u.s. and china. i have been in china over 40 years. it used to be a win-win. it has developed into a win-lose, with the u.s. losing. there is not a level playing field with how chinese companies are treated in the u.s. versus how american companies are treated in china. we have to get back to a better balance in terms of trade. u.s. hasgree that the the best assets. it is in both countries best interest that we get a resolution here. the question you asked was the right way to ask it. it's not about delaying tariffs. it is can we get the resolution on intellectual property protection, a level playing field between the businesses in the countries and do it in a way that both countries when paving is in both countries best interest. i'm probably a little more optimistic this will be resolved
6:50 pm
in the next three or four months versus my counterparts. paul: supply chain diversification, we have run a story today about how the company that makes hp equipment is shifting all its operations back to taiwan. competitors are doing something similar. in that environment you described with perhaps no end in sight, if you are diversifying your supply chain, does it even make sense to go back to china? john: it will always make sense to be in china as long as it is a reasonably level playing field. they will have a good shot at becoming number one. it will be the u.s., china, and india, in my opinion. it creates opportunities for other countries in asia and southeast asia, such as india and vietnam, et cetera, to benefit from the changes here. think in theme, i
6:51 pm
end it is in china's best interests and the u.s. best interest to have free trade on global banks. i think we will move back to that. the current issues were necessary to arrive at a true win-win solution. much fornk you very your insights, john chambers. there is more to come on "daybreak: australia." stay with us. this is bloomberg. ♪
6:52 pm
6:53 pm
scoop,now to a bloomberg and another controversy for the social network. we are told facebook has been paying hundreds of outside contractors to transcribe clips of users audio. the work has rattled these contractors who were not told where the audio was recorded or how it was obtained, only to transcribe it. story.ter broke the we have seen apple, amazon,
6:54 pm
google all being scrutinized for something similar. i thought these practices had been stopped. what happened with facebook? stop: facebook says it did doing this more than a week ago, but that doesn't change a fact that they were doing it for many weeks at least. and this is not something they told their users that they were doing. i want to be clear that this is not just general audio clips from users, this is specifically users who use messenger and opted to have their voice messages turned into text. but facebook was doing was using outside contractors to figure out if the ai that was translating audio to text was doing a good job. this goes beyond what we expected ai to be doing if you're using that service. certainly don't expect that other people are going to be
6:55 pm
looking at your messages. that the purpose of this exercise, just to determine accuracy, or was there more to it? was there some violation of status going on? sarah: it is unclear if there was more. facebook's commentary is that it was solely for ai purposes. as i have talked to contractors and one of the offices that was reviewing the content, they said they overheard some of her stations that made them uncomfortable. some vulgar content. facebook has spent so much time tampcent years trying to down conspiracy theories that it listens to users, and here these people were in this contractors office listening to users. they really felt like they were when something wrong and
6:56 pm
they feel that way, they talk to journalists. shery: we have seen facebook settle of $5 billion issue with the u.s. ftc. are we seeing anymore news of regulation against these tech giants? >> we talked and that ftc chair about this issue. the ftc is feel like in their best interest, but as i reported, there's nothing that's going to change fundamentally it occurs.ay they have new oversight on the board and maybe you people looking at privacy issues, but the way products are created at ,acebook, it still about growth still about making a bigger, stronger network. sara, thanks for joining us there. let's get a quick check of the latest business flash headlines.
6:57 pm
ongoing protests in hong kong have prompted china's biggest bank to lower its rating to strong cell. stock price has a about a third less than where it closed on monday. shery: moody's is warning exxon mobil that its credit rating may be lowered as debt piles up. the agency assigned its highest rating of aaa to exxon's proposed $7 billion offering but the outlook is under pressure because exxon is outspending cash flow in its refining businesses are underperforming. plenty more head on daybreak asia. we will cover the wild moves on the bond market. we will discuss president trump's tariff delay. paul: that's it from "daybreak:
6:58 pm
australia." stay with us, all the action coming up on daybreak asia next. this is bloomberg. ♪
6:59 pm
7:00 pm
paul: good morning. i am paul allen in sydney. we are under one hour away from the australian market open. shery: i am shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to "daybreak asia." this a la top stories wednesday, hong kong braces for more unrest after violent clashes and further disruption at the airport. the u.s. says china should respect the city's

40 Views

info Stream Only

Uploaded by TV Archive on