tv Bloomberg Daybreak Australia Bloomberg October 3, 2019 6:00pm-7:00pm EDT
paul: welcome to "daybreak australia." i'm paul allen in sydney. shery: i'm shery ahn a bloomberg world headquarters in new york. sophie: and i'm sophie kamaruddin in hong kong. we are counting down to asia's major market opens. ♪ paul: here are the top stories we are covering in the next hour -- more disappointing u.s. data piles new pressure on the fed. traders are increasingly betting on two more rate cuts before the end of the year. u.s. treasuries and german bunds reinforce the sobering measures that global growth is stalling
and inflation hopes are fading fast. then president trump steps up his attack on his potential election rival joe biden, calling on china to launch an investigation. later, apple made a pricey gamble on the iphone 11 camera as more people get their hands on the device, we will ask if the gamble has paid off, but first, let's get you a quick check of how markets are trading at the moment. we are seeing u.s. futures currently unchanged at the moment. it is still early in the session, but this, of course, coming after the s&p 500 rose the most in a month. we are talking .8% gain for the s&p 500 as we had week services sector numbers, the weakest we've seen in about three years. that, of course, sort of raised odds the fed could be moving, and that led to investors pricing and more rate cuts. the dow gaining 122 points, and the nasdaq leading those gains
with gains of more than 1%. we also had financials higher, but a little bit of underperformance that we saw against the broader markets as we have seen rates moving lower despite the fact that equities were higher. we had the 10-year yield falling for a sixth consecutive session we moving toward 1.5%, so had financials underperforming a little bit. let's see how we are shaping up for the markets in asia. sophie: futures are narrowly mixed in asia. the sydney stocks could see some bounce back this friday, and we have south korean markets reopening as well. let's check in on the yen, which zone.ding in the 106 check out kiwi yields, slipping below 1% this friday morning. this as debt markets are very
much in focus amid more signs of slowing global growth. we will get more hits perhaps on australia's great path with the rba financial stability review. amid questions of how much have amay be ahead, we rate cut decision expected from india and from the philippines, inflation likely sticking below the target range for a second straight month. from us trillion, retail sales saw a slight uptick and later this afternoon, malaysian trade data for august, we might see a narrowing of the trade balance from malaysia there. paul: thanks, sophie. let's check in on first word news now with jessica summers. jessica: thanks, paul. hong kong will use emergency laws for the first time in five decades in a bid to tackle the increasingly violent democracy protests. local media say the government will enact a ban on facemasks at public gatherings after a
special meeting of the executive council later friday. the emergency regulations ordinance was passed by the british in 1922 to quell a dog strike. it was last used to help control riots in 1967. there are more signs of a slowdown in the u.s. service industries have joined manufacturing in slumping last month, stoking concern the global slowdown and trade war are hurting the domestic economy. the ism nonmanufacturing index fell almost four points to 52.6 in september, the lowest since august wendy 16 and well below the most pessimistic forecast in a bloomberg survey. u.k. prime minister boris johnson is being given one week by the european union to revise his brexit plan or face being given a humiliating postponement of the split. the eu's top negotiator told senior diplomats that johnson's proposal falls well short. however, the prime minister told
the house of commons that it is up to the european union to compromise and agree to his deal . >> if our european neighbors chose -- choose not to show a corresponding willingness to reach a deal, we shall have to leave on october 31 without an agreement, and -- and we are ready to do so. be ahat outcome would failure of statecraft, which all parties would be held responsible. trump ispresident continuing his attack on potential election rival joe biden, calling on beijing to investigate him and his son. without elaborating, the president said what happened in china was about as bad as what happened with ukraine. trump's allegation that biden tried to shield his son from a ukrainian investigation into a company that employed him has already been discredited and dismissed by biden's campaign as
without merit. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 analysts and analyst in more than 100 20 countries. i'm jessica summers. this is bloomberg. and our other top story, has the other economic chu finally dropped for the fed? ae same kind of gauge for much bigger part of the economy has suddenly decelerated sharply. our global economics and policy editor kathleen hays is here with a services reading. when we have those manufacturing numbers earlier this week, there were people saying this could be a repeat of 2015, 2016 when the slump was contained in factory data. could this time be different? kathleen: that is what the federal reserve is watching very closely. you could say trade war damage is confined to manufacturing so far. still about half of u.s. output, so not something you can just
overlook eerie let's get right into our bloomberg library, though, and take a look at the chart that tells the whole story all at once because services -- u.s. purchasing managers index from the institute for supply management really decelerated sharply. if you jump in with me now, i will show you right here, look at this blue line going from 56.5 all the way down to 52.6. here is the manufacturing pmi. whoa, did it slide a couple of days ago. that unnerved markets around the world. the dividing line between expansion and contraction and i want to show you another thing. typically, this services index tends to rise higher than the manufacturing index, so when it goes to 52 .6, it is a more serious signal. that is one of the things that is important. one of the problems is people are wondering to what extent is not just the trade war damage for manufacturing possibly spreading to services in the broader economy, globally, look what is going on.
three major countries. go back to the library with me now and you will see that you have the u.s., china, and germany all below 50 now. of course, china not quite so bad. there's the u.s., but poor germany, last week, that really got the markets going when people saw that. today, once again, bond yields tumbling. german bond yields, u.s. bond yields because it looks like the damage is spreading and that will have big implications for banks. shery: we heard from some regional fed presidents. did we get any clue on how they might vote in three weeks' time? kathleen: they are watching. they are waiting. the president of the chicago fed was at a conference in madrid, and he did speak to bloomberg television. basically, he is not exactly on board with the rate cut, but he is keeping an open mind. take a listen. >> we have repositioned policy from being headed for slightly restricted policy to one that is
accommodative, and the question is how accommodative we need to be. at the moment, it is still risk management. i would say the weakness in the ism and manufacturing is something that definitely increases concerns. kathleen: you cannot help but wonder if charlie evans had amy services ism pmi before he gave those remarks, before he told the fed at this interview, would his remark have been different? rob kaplan from the dallas fed saying this afternoon, not going to overreact, but watching it extremely carefully. the president of the cleveland fed very cautious. she says remember, there is risk of financial imbalances when you have an environment of low rates and keep them there. that is the side of the coin that is more hawkish. paul: friday in the u.s., the jobs report. is that going to tilt the
balance? kathleen: it certainly could. remember, it's the first report every month that shows the whole u.s. economy. every industry is reflected here, every region, and it's all about payrolls this time because they were weak in the last report. let's go back into our bloomberg library. i want to show you one chart you will be looking out a lot in the next 24 hours. what it shows is the payroll, the three-month moving average. payrolls are these turquoise bars -- i'm sorry, i don't think i called it up from my control room. there they are. sorry, guys. thanks for your speedy work. there was only 130,000 jobs created last month and if you took out 30,000 temporary census workers, you are down to 100,000. here's the big question -- does this turquoise bar bounceback up? consensus looking for something like 130 again, but if it stays where it is, is it too weak for the fed to say it is ok to wait and watch? if it moves higher, will that reassure people like charlie evans he does not need to vote for a rate cut?
are already raising their bets on a rate cut in october. they are up to over 80%, and now the odds of a cut in december are rising, too, close to about 60%. paul: entering a critical 24 hours in u.s. monetary policy. thanks very much. still to come with u.s. auto sales taking a turn for the we get advice from ihs capital analyst. shery: still ahead, hilary kramer says the flight to treasuries is guaranteed to move. find out why straight ahead. this is bloomberg. ♪
action. investors looking ahead to friday jobs data after a rebound with stocks. the s&p 500 saw the biggest gain in a month. su keenan is with us with more. su: there is a question in the market -- will we see a third weak economic data report? it will add to the increased likelihood the fed may cut rates. let's go right to the market. tech heavy index of semiconductor stocks up almost 2%. that shows what the spread to the market is. let's go into the bloomberg real quick because we talked about the rotation. we are continuing to see .nvestors sell out of the area you can see the big drop here. investors ditching those mid-cap and large-cap momentum plays. let's talk about some of the big movers at the day.
heavilynd nvidia represented. also jcpenney having a positive day. let's take a look at some of the ipo's that have recently been in the spotlight because of the disastrous debut of palatine -- debut of peloton. it had another down day, but note some of the tech-related ipo's. crowd strike and data dog which were actually strong security-related debuts, they have all bounced back in a big way. they were two biotech-related ipo's that hit the market for the first day of trading and actually did well. shery: in the commodities space, we are seeing gold up. haven demand and so forth. what are some of the notable moves you have seen. su: notice you are seeing the
biggest losing streak for oil in 10 months, and that was extended. thank you so much for that. joining us now is kramer capital research cio hilary kramer. we saw this rebound in u.s. stocks. there's the expectation the fed will need to act now. does this move have room to continue to rise given that we are still expecting the nonfarm payrolls to come on tomorrow? rise.ket can still if the number exceeds the estimate or is below, even if we are 90,000 are coming in 100,000, the market will be off to the races because it means we may see a 50 or 75-basis point cut october 30, but even if the atber is positive and good 150,000 jobs, at the same time, what is the fed chairman doing? he's cutting rates because of
worry about global recession, global weakness, so it is a win-win either way. the market is really pricing in the fed will continue to cut. shery: we have seen this safety play, right? are those the trends that will continue through year-end as we continue to see the uncertainties? where are you finding value? >> i'm really looking at defensive names. ,hen it comes to utilities edison continue to rise. i'm looking at a lot of the consumer products companies, and companies that supply to consumer products as well as some of the big pharma names, even if they are trading at 52-weak ties. there's still room. everyone is looking for yields. everyone is looking for a proxy in order to find income, which they cannot get, which has been the big problem, right? the individual investor has been absolutely hammered while big
money was able to make lots of money on the equity market. i am specifically looking at, like, gsk, for example, that has a yield close to 5%. .t's a great global plate polident, aqua fresh, i like those. it looks like corn prices are stabilizing, and they are also high dividend yield, and it's the high fructose syrups and starches that are in everything. be defensive. shery: did numbers today give you a pause on consumer play if the manufacturing slump translates into consumption weakness? >> and it probably will to a great extent. that's why we are waiting for earnings. i want to hear what jamie dimon has to say at j.p. morgan. what is he going to say? so much of what he will say is
about consumers, credit quality, car loans. he will let us know if they have to take more reserves, but that will be one of the ways he will let us know, but of course, the consumer will get week. that's one of the reasons we buy big pharma or ingredient on or general mills, because people still have their kyrgios and their betty crocker and their haagen-dazs ice cream and their dividend yields. on the subject of earnings, i want to bring up this chart on the bloomberg terminal. it shows the share of companies guiding earnings lower now are at the highest since 2016. fed easing, all very well and good, and that might provide a short-term sugar hit for markets, but at the end of the day, what are your expectations for earnings? that is really what will drive things sustainably, isn't it? >> the top line is the only place there is room for movement, and we probably will see single digits on the upside
there, but certainly it is going to get real stretch through that estimate of 106 the five dollars on s&p 500 earnings to year, 2020, 100 $85. this might be it, so what i'm expecting is we could see some weakness. certainly semi conductors, which have not been trading well. technology. we are already getting hints of what is to come. look at how federal express did when it came to -- they announced that -- obviously, they do not have amazon anymore, but federal express has bombed out. companies are taken to the woodshed when they have bad news, and that is what is going to happen. tesla today -- i'm surprised it was not down more. tesla did not hit the numbers that were expected with car deliveries, so the market is very, very fickle and very emotional. they will bring it up or bring it down really fast. the fed is heroically
trying to do its best to reassure markets, but what is really needed is a catalyst to get things going again. do we need a trade deal? is that what is really going to drive things forward? deal, tradel, trade deal. it's like when it comes to real estate, location, location, location. it seems like everything is centered around that, but now, of course, we have european trade as an issue with tariffs. luckily today, the big news that i think brought the market back up was some muted comments things are coming along in china with our relationship getting to a memorandum of understanding on trade, and of course, in europe, we will have high tariffs on everything from irish whiskey to spanish olives. then that was brought down. i think that trade is vitally important, and that's why we saw tuesday, the manufacturers number contracted again, and it
was the worst showing in 10 years. who wants to manufacture when they do not know what is going to happen? 3m, a great industrial company, hit another 52-week low, and the reason is clear -- because there's just no clarity and no visibility in terms of trade and there's a lot of countries that have been provoked by the united states and some attitudes that have emanated from here. it's going to be tough internationally, and that is why we are so focused on some of the and whys domestically companies will keep you getting income and not having too much exposure abroad. paul: we've got to leave it there. thanks so much for joining us. across anto get you alert right now. wework executives said to be weighing cutting about 2000 jobs this month after, of course, the .po was shelved
paul: this is "bloomberg technology global link." let's take a look at the top global tech stories of the day. taylor: google's cloud operation is estimated to be worth 225 billion dollars. deutsche bank says the union could report compound annual growth of more than 50% between 2018 and 2022 and reach annual sales of $38 billion by the middle of the next decade. instagram is introducing a new mobile app that will allow users to stay in close contact with a small
circle of people, automatically sharing videos and status updates with them. the parent of rival snapchat fell on news of the launch. big-nament's latest mobile game is enjoying a blockbuster start. call of duty mobile has gamers.d 10 million analysts say it has already generated a quick $2 million in player spending. those are the top global tech stories i'm watching. shery: thank you. as apple's latest smartphone comes to market, let's look at some of its best features and ask maybe more importantly, is it worth price? mark gurman has published a review of the iphone 11 pro and joins us now. similar toks quite the iphone x. what makes it special? mark: what makes it special is two things. one is the camera, two is battery life.
becoworker and i found it to a really great camera with a really wonderful night mode, being able to take pictures in lowlight environment. i did love the feature that lets you take information from a lost.e that was the battery life has also been tremendous, but the big question is -- do you really want to upgrade to this thing? i would say if you are on anything lower than an iphone x, you would probably consider upgrading. if you have a 10, 10 s, tennis 10s max, this might not be the year for you. the three-camera system on the back of the phone is nothing new . i actually have it right here if you want to see what it looks like on the back. it is not new. this is not something apple
paul: 8:30 a.m. on a beautiful friday morning. futures pointing higher as well by a little more than .5% following a rebound on the equities markets. i'm paul allen in sydney. a new yorkshery ahn where it's 6:30 pm let's get to first word news with jessica summers. jessica: the latest this appointing data in the u.s. is boosting bets on more action from the federal reserve. treasury buying sores as investors gamble on two more rate cuts with half a point of additional cuts closer to being fully priced in the futures
contract. traders had already been forecasting more easing after u.s. manufacturing sinks further into contraction. india's worsening banking problems are adding a new layer of complexity to the r.b.i.'s policy planning. they prepare to cut rates later friday. days after policymakers insisted the banking system is "safe and stable." the r.b.i. recently imposed withdrawal curves on one bank and lending restrictions on another. strong gold prices hitting demand for imports in india. inbound deliveries of the precious metal plunged for a third straight month in september to the lowest monthly level in at least three years. shipments slumped 86% from a year ago to 13.5 tons, more than a ton lower in august and the lowest reported monthly figure since january 2016.
u.k. artist banks a has shattered his own auction record. a painting depicting british lawmakers as chimps sold at sotheby's for just over $12 million. bidding for the piece lasted 13 minutes and surged past a presale estimate of about $2 million. banksy's previous million dollar sale record hit the headlines when the artwork self-destructed immediately after the final bid. global news 24 hours a day on air and at tictoc on twitter powered by more than 20 700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. shery: let's turn to sophie in hong kong for what to watch in markets this morning. we have some key data out of hong kong. sophie: indeed. we are waiting for data that may add to the increasingly grim picture of how unrest has into the economy. we will get the latest market
pmi data which will offer the first hint how the downturn may have persisted into september coming after a report showing a record slump in retail sales. when it comes to manufacturing sentiment, the last reading came in at 14.8, and it had been in contractionary territory since about early last year. as the city braces for more protests, carrie lam is reported to hold a special meeting today to consider a colonial era emergency law for the first time since the 1960's which would ban people from wearing masks at public a sublease. the act could entail a jail term of as much as one year of a fine of more than $3000. paul: thanks very much. let's get more on what we should be watching us trading gets under way in asia. bloomberg's global markets editor is with us. how was the balance between weak data and bets on higher chances of stimulus likely to play out with the fed meeting approaching? adam: in many ways, it kind of
did reach the tipping point this week because we have had this slew of weak data, but you are starting to see pricing get pretty firm for two cuts by the end of this year. clearly, that is continuing to mean more money playing into the treasury's market, and you continue to see that bid for sovereign bonds, and of course, yields continuing to be under stockse has meant that have come off significantly this week. we did have a little bounce in the u.s. on thursday, but they set up for asia today is relatively muted, really. it will be interesting to see how the session plays out, see if any of that rebound from the u.s. gathered steam, but, really, we are pretty well -- you know, the jury is still out as to if the consumer is really being impacted in a meaningful way by what has initially been a manufacturing slowdown kind of story, but of course, we have not had much really to move the dial on the u.s.-china trade
war. china remains on holiday today. the equity markets closed there and through to the early part of next week, so we have not really seen any developments on that front. going into next week, that's really where things might start to liven up a little bit, where you start to get the progress of those high-level talks and anything on that trade front might be the next catalyst to move the markets. shery: we are watching the indian market very closely as we get the rate decision from the central bank there and it seems a rate cut is pretty much baked in. adam: indeed it is, but the forecast for how much the r.b.i. might actually move later today -- they are quite wide. anywhere between 20 basis points and 40 basis points is kind of in the expectation. the chart shows how the bond market has been responding as repo rates come down. of course, you have already had 110 basis points worth of easing
already, so you are down to 5.4% on the indian main rate, and of course, there's no real signs of recovery on the growth front. much ann still pretty issue if you take out the exception of onion prices, perhaps, but it is still a pretty live event today. if they were to go on the dovish side toward maybe 35 or 40 basis points and more dovish commentary from the head of the central bank there, you could see a pretty decent sized move in the bond markets. thank you so much. you can find adam's charts on the gtp library on the bloomberg. we have an alert at the moment out of japan. we are hearing from nikkei news that japan's foreign minister is saying the u.s. trade deal is expected to take effect in january. of course, we know that an initial trade deal has been struck between the u.s. and
japan during the united nations general a sibley. we have heard from japan and the u.s. that auto tahrir square off the table because this initial trade deal was signed between the two parties. we are now getting news that japan's foreign minister is saying the trade deal will take effect in january. the japanese yen trading below that 107 level as we continue to see yen strength in this uncertain market environment. let's turn to the u.s. because president trump is stepping up his push for an investigation of potential rival joe biden and his family. first, he called on ukraine. now he is turning to another country for help. >> china should start an investigation into the bidens because what happened in china is just about as bad as what happened with ukraine. shery: our congress editor joins us now from washington.
did the president give any reasons for bringing china into the mix or any evidence of what he is saying? anna: not in that statement, but it was something the president has talked about before. it was kind of shocking to hear him say this out loud, although this is kind of a way the president usually talks. he speaks to reporters and says exactly what you think he would want to hide behind closed doors in a secret call with other foreign leaders. the fact that he had brought china into this got a response from the biden campaign. they said that this is his ,oment where he is saying pressure, if you have hillary clinton's emails," like he did in the 2016 campaign. he is doing the same thing where he is asking a foreign power to interfere in the 2020 election. shery: do we know what effect this might have on the impeachment proceedings happening already in congress?
>> kurt volker, the former envoy to ukraine, was testifying on capitol hill today behind closed doors. that testimony focused on the aid that was withheld from ukraine was part of a quid pro quo agreement with the pressure the president was trying to put on ukraine to investigate joe biden, trying to get to the bottom of what exactly that exchange was and what the leverage was trump was using. that is really where the committee members were trying to go with their questioning today. trump's remarks the actions of a very stable genius? nobody is talking about the democratic primary anymore. anna: that's true. it has definitely affected the way the 2020 race has laid out. we got some interesting third quarter fundraising numbers from joe biden. he only raised $15 million in the third quarter, less than buttigieg and bernie sanders. the fact that the former front runner is now raising much less money than pete buttigieg, who is only pulling out about 9% -- that is not a good look for joe
bloombergcome back to "daybreak australia." u.s. auto sales took a big step back in september for leading asian carmakers. it was a lousy month by any measure with double-digit drops for toyota, honda, and nissan. the quarterly sales numbers from the detroit three were not as bad, but none of them can check off concerns the u.s. auto market is taking a turn for the worse. meanwhile, tesla reported much anticipated third quarter figures this week and failed to live up to its own hype. investors were disappointed, even with the record 97 thousand
deliveries, after elon musk hinted that 100,000 was doable. this chart showing tesla's numbers continue to rely on the cheaper model three, and of wider, we know that the car market affordability could be at risk amid fears of a u.s. recession. paul: thanks. adding to all of that, a key figure used for decades to some of the state of the auto market looked wildly out of step. we look closer at this with ihs auto analyst stephanie brimley. i'm wondering, what are your expectations for the rest of the year? we have the seasonally adjusted rate. months,the last seven it has come in over 17 million. we are looking at this year to
close out at pretty much straight on 17 million, which would be about a one point 7% decline from 2018, which is a little bit less than we were expecting earlier in the year. number, terms of that there is a story on the bloomberg terminal out this morning which points out gm, ford, fiat chrysler do not report monthly numbers and those that do often try to deduce the numbers with incentives, so is that still a useful number? >> yeah, it is still a useful number. it is still helpful as a good indicator of the year, but it does change. it does fluctuate throughout the year. it is interesting, looking at the different approaches to quarterly versus monthly forecasts -- or reporting. i think we might see some change in that to come. when we look at september numbers, you referred to the
declines in september. a lot of that was really expected. we had a calendar is asian -- calendarization with the labor day holiday, which is a high-volume we can for cars, was attributed to august sales. andaw a big jump in august a big dropped in september. those who kind of canceled each other out. year to date, the market is down about 1.2%. 17 millioning at units for 2019 a little bit relatively,0, but it is a strong, healthy market at this point. interesting to hear you say. was there any significant difference when it came to those premium brands? >> yeah, we did see premium brands in the last month pick up a bit. that was interesting. still digging into the reasons
why on that. some of it has to do with new product, for sure. that always is a helpful element. premium automakers have been struggling throughout the year, so it could have been a little bit of incentives, could have been a little bit of attitude change. shery: what are we expecting for the final quarter? will we see some big year in deals or will we see carmakers stick to their undisciplined approach we saw the rest of the year? >> the last couple of years, we have seen a pretty big push toward the end of the year, so we may see that happen again. the important thing is if we do see that happen, the monthly will come off, but it will not be sustainable and we will see the first quarter of 2020 settle back down a little bit, but there certainly is opportunity for the fourth quarter pick up a bit. paul: i just want to get your thoughts on those tesla numbers and the market response to them. everybody knows now about elon time. should we all be getting used to
this idea of elon guidance as well and just ignore some of these things? 97,000 deliveries is pretty good. >> it is a pretty good number, and it's closer to -- he said 100,000, and it's not super far off from that. the interesting thing, too, is model s and x numbers being down a little bit and model three coming up. it's good that model three is coming up. you have more production, more access, more availability. it is the lower-priced vehicle of the three, so that is a trade-off, but, yeah, elon musk has certainly set some targets and not quite brisk them, but he is certainly not the only one in the automotive world to have done that. i think we have to wait and see what financial numbers come in at and if they can start producing in china at the end of this year as they have talked about. tesla's numbers being boosted by the cheaper model three. will there be an affordability
goingin the car market forward? >> that is something we are watching closely. so far, consumers have been, at least in the u.s., looking at longer terms and managing that, but we do have models coming in with higher price points for some of the new technologies they are offering, so we do think that affordability could be a headwind going forward, and it's one we just have to keep watching because so far it has not had a dramatic impact. do you expect we will see more consolidation in the auto industry in 2020? inmaybe not necessarily 2020. what i really think we will see is more partnerships and more strategic partnerships. that it'souncement working with volkswagen in a very strategic and limited way, i think that is probably a more likely response. there's different companies that
have different strengths, if its technology, geography, and working together on strategic elements does seem to be in some cases a more advantageous approach. shery: thank you so much for joining us. we have an alert at the moment. we are hearing from the fed's richard speaking at an event in new york saying the economy is in a good place and that inflation is stable, that u.s. consumers in aggregate are in a good place, saying that the economy is in a good place, although the global economy has been slowing for some time. we will continue to discuss the state of the u.s. and global economies with the chief economist of ftm financial in the coming hour. this is bloomberg. ♪
shery: i'm shery ahn in new york. paul: and i'm paul allen in sydney and you're watching "daybreak australia." goldman sachs' international ceo says the bank is committed to the chinese market and helping it open up. speaking exclusively to bloomberg, he said goldman has long experience with china and will continue to play a big role. >> our focus right now is making sure that we are absolutely focused on our chinese client base. it is a big and broad client base. we have been there for a long time and we have lived many of the innovations in the chinese market. i think our reputation amongst the chinese corporate community, amongst the chinese government community is very strong and we will continue to build on that. it is critical for long-term growth of the chinese economy an efficiente financial system, capital markets that function and that will attract foreign capital as well as service domestic
requirements, and we want to play our part in that and that is what we are committed on doing. >> what do you see going on with your china trade? are we going to find agreement or boiling over two steps forward, one step backward for the next decade? more back-and-forth. these are two of the world's great economies. they are going to continue -- the good news is that they are trading. as long as these economies continue to trade, there will be tensions. these are major blocks. issues will diverge from time to time. put yourself in the u.s.'s position. essentially what the u.s. is trying to do is renegotiate its supply lines, and if it can get better terms of trade, that is good for the u.s. economy. that is what they are trying to do. china is trying to protect its own interest. the important thing is they continue to trade and continue to talk. as long as that is happening, we can move forward. there will be agreements moving forward, but i'm sure there will
be no such thing as a permanent agreement. >> what kind of steps have you taken with abu dhabi? >> we continue to have good relationships with abu dhabi. i'm sure they, like us, would like to put this behind us and we're working with relevant authorities around the world to try to reach a suitable resolution to this issue. >> how close are you to finding a resolution with malaysia? >> these things have to run their course and the work is ongoing and it will happen at the right time. goldman sachs' international ceo speaking exclusively to francine lacqua. wework has told staff that job cuts are coming as soon as this month. people at a company meeting thursday tell us that cost-cutting efforts would include layoffs that would be handled as humanely as possible. we reported the parent company
is considering job cuts that could affect around 2000 positions. the company had 12.5 thousand employees at the end of june. paul: costco fell in late trade after reporting courtly profit that fell short of estimates. domestic sales also slightly miss high expectations. sales excluding gas fell just short of projections by consensus metrics. one boost for investors was the growth of membership fees and renewal rates, which generate the bulk of costco's growth. has denied an app designed to monitor police activity. it is the mobile version of a site that the developer says helps users avoid potentially dangerous areas. apple says it was rejected from
the app store because it "facilitates, enables, and encourages an activity that is not legal." have more lines coming from the fed vice chair speaking at an event in new york, saying will act as appropriate to sustain the economy, that there are some pretty powerful global disinflationary forces, that the global economy has been slowing for some time. we also have breaking news. hp is coming out and announcing they will be cutting 7000 to 9000 jobs, that they are seeing $1 billion in costs. we are talking about a slash in their workforce of as much as 16%. 7000 to 9000 positions. hp coming out and saying that the job reductions will help save $1 billion in overhead costs by the end of fiscal 2022.
they have also announced share repurchasing plans by an additional $5 billion. paul: thanks. that is almost it for "daybreak australia" this morning. let's get a quick update on how markets are shaping up. we have had new zealand trading for a couple of hours this friday. trading higher by almost .9%. kiwi dollar and the aussie dollar continuing to show some weakness, though, but here in australia, we have aussie futures pointing higher by a little more than .5%, so something of a relief rally under way today after we saw u.s. equities closing higher. we do have plenty more to come in the next hour of daybreak asia. -- ftm'shief financial chief financial economist joins us and will tell us why the fed is ignoring what he sees as a 50/50 risk of recession. all the action coming up in a
paul: good morning. i am paul allen in sydney. we are under one hour away from the market opens. shery: good evening. i am shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to "daybreak asia." paul: our top stories this friday, more disappointing u.s. data piles a new pressure on the fed. traders are betting on more rate cuts before the end of the year. u.s. treasuries and german bunds