Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20171003

Betty good morning, yvonne. Uber in the spotlight, that breaking news within the last hour. Lets focus on the auto market. I want to pull up a chart for our viewers, g btv 2623. The month ofr september, the best so far this year. You can see that right here. Just within the last few weeks. The yellow line represents the moment right before the hurricane that battered texas and the caribbean. Now, auto sales skyrocketing after that. I guess you could say there is a Silver Lining for investors with the hurricanes. That meant more people are going back in the market to buy cars to replace the ones they lost in the south. That could be up to 500,000 vehicles being purchased. Yvonne Hurricane Harvey really damaged more cars than any storm we have seen in history. The big question is, will this be a one off in the data when it comes to auto sales . Certainly giving fuel to japanese automakers as we look ahead to the japan open. A lot of news on uber. Reforms limits Travis Kalanicks power now. We will have more from our guests. Lets look at asian markets. And that 50 up about three points,. 7154 for the kiwi. We do see slippage in the last three days. Australia, no change in the rba yesterday. Notng currency, appreciated, they say. That weakness did not last too long. Still recovered, above the 78 handle. In japan, earnings coming through. Japanese carmakers in focus, 112. 43 for the japanese yen. Taking a breather here. We are looking to a slightly modest gain after the tokyo open this morning. Markets remain closed, for golden week. No trading in south korea or taiwan. Toty we certainly are going be watching markets who are closed and how they are reacting. Lets get the first word news with jessica summers. He says there is no chance gary cohn be the next fed chairman and no chance donald trump will allow janet yellen to stay on. Speaking of the vanity fair summit, he says he thinks Neel Kashkari will be handed the job, which has made headlines. He has been critical of the feds rate hike policy this year. Coming up later, tom keene has a conversation with Stanley Fischer before his departure from the role. At 6 30 hong kong time, 9 30 in sydney. Uber directors said to have approved a softbank investment 1. 25 billion. They have back to government reform, and a one share, one vote plan. That scene as limiting the influence of ousted ceo, Travis Kalanick. They set a 2019 deadline for initial public offering. Yahoo has revealed all its User Accounts were affect did by its august 2013 hack. That is about 3 billion of them. They are part of a verizonowned subsidiary. They obtained new intelligence about the customer information. They said it did not include payment card data and bank account details. Visitedt trump has stormravaged puerto rico, shaking hands with the san juan mayor he attacked on twitter, saying relief costs could strain the federal budget. Cost 60 billion to rebuild, including 5 billion for the power grid alone. The Trump Administration has been criticized for slow response. But he called it incredible. You, trump i hate to tell puerto rico, you have grown our budget out of whack. It is fine though, we saved a lot of lives. The king of spain waited for the crisis in catalonia, saying separatists deliver lee broke the law. Addressed the region. The king said the ballot was illegal and undermines catalonia. He said separatists have shown lack of loyalty and spain would ensure constitutional order. Regionaltalan government has broken the democratic principles of every rule of law and has undermined coexistence of society. Have projected the affection and solidarity that will unite all spaniards. Due to their responsible behavior, they are undermining catalonia and spain itself. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am jessica summers. This is bloomberg. Betty thank you. Stocks closing at record highs, yet again. It was more modest this time. Ramy inocencio at the wall with the details as we had to the start of wednesday trade in asia. Ramy lets look at the numbers and where we stand. Nominal growth in terms of the green. Staffers to monitor feeds for those involvement types. What about google question mark what steps have been taken since the election . We saw what they did with russia today. Improvee also tried to the Fact Checking on news to post article. Handsoff compared with facebook is talking about this week. Webb, andnk you, alex now the focus on alphabet. Also, the focus on uber. The 1 billion boost from softbank as they approve changes to corporate governance. We will discuss the road ahead. They have written about the ridesharing economy. This is bloomberg. Yvonne were counting down to opens first major market this morning. Beautiful look outside the imperial palace. Futures up about 70 points. Did not see a lot in terms of the dollar rally. We will see how the yen trades. Hopefully above 112. Modest upside for stocks in tokyo. This is daybreak asia. I am yvonne man in hong kong. Betty i am betty liu in new york. Uber directors said to approve the softbank investment of 1 billion, government backing governance reform, including three new board seats, expanding the number now to 17 people. Also, approving the one share, one vote plan. Joining us now is a business professor. Book,an author of the how sharing economy, businesses like uber and airbnb have changed the sharing economy. Not just ridesharing, but automobiles and Everything Else they have touched. I am curious, hearing this news today that is just breaking, do you believe fundamentally that will make a Stronger Company after these changes . If they can go through with all of the changes to the board, then absolutely. It will emerge a stronger economy than it went in. I also feel like you could structure a whole mba degree around omar uber. Betty a lot of Harvard Business limiting the powers of Travis Kalanick, that has been talked a lot about, the one share, one vote. Seeing thes whether story about travis and what he is done with the power grabs that have been in the headlines, how will that affect other Tech Companies . And also, emerging tech ceos as well . Will they be under pressure from this . Arun it is certainly going to make it a lot harder for any earlystage tech company to get the same kind of super voting protection. It is not that uncommon. Betty it was pretty common before, right . Mark zuckerberg had this. Arun he had already controlled the shares of facebook. Is going to thing become part of it because people appointed uber and say, we do not want what happened to uber to happen to your company. I think it affects founders but also early investors. It is not just Travis Kalanick who has seen his voting power diminish. It is also benchmark and the early investors, menlo investment. Influenceof outsized that the earlystage companies, earlystage investors and founders have on the company, i think that will diminish for future companies. What is also unique about uber in some ways is, they are the First Tech Company to have gotten so big without going to the public market. A fewrivately ipod times, tens of billions of dollars. It is an unusual scale for the company to be having these issues. Yvonne it is interesting. A lot of this has to do with how much power is left for Travis Kalanick to read what do you make of these recent developments . Arun he still owns a significant fraction of the company. From his point of view, if uber is left in a place where they have corporate governance, the new ceo can go ahead and fill up the Management Team and make uber a multibillion dollar company, travis can setback and enjoy the tens of billions of dollars the company makes. I think it lowers the probability we are going to see a travis come back. Never say never. Steve jobs was out for 10 years, and back he came. I think the chances are lower after today. We did hear from the board saying, they solidify the deadline for an ipo in 2019. Does this shakeup what we are seeing in the board, these losses in clashes with kalanick, didnt make you less confident they have actually reached the ipo date in two years . Even issues that have come over the nine months this year, over going public faces a lot of ad years from the point of view that they are fighting all these regulatory battles around the world. There is a tremendous amount of Regulatory Risk build into the model instead of waiting for this to calm down. It seems like two years is a reasonable timeline. Interesting, there are Regulatory Risks and uber is always being challenged, here and there. But the Business Model has continued to grow. I am curious if you expect competitors are going to continue to grab market share. Iis their final chance do not want to say, kick uber while it is down but through the transition, do they need to capitalize faster on getting into uber space . Arun we have seen many competitors gain share. This is being shared in the United States. Inb is increasingly dominant south asia. With transamerica, the United States, europe, these challenging markets in their own ways. I think what is going to happen, we are going to see differentiation. 2012 this was a mobile phone base substitute for a taxi. Transportation is up for grabs now. This is a 10 billion a year market. It is not going to be one dominant player. Autonomous vehicles on demand, the standard uber model versus their own autonomous vehicles. There is plenty of room for everybody. Ceo dealingthe new with so many multiple fires for uber. In the u. K. He has been dealing meeting with regulators there. It has become quite political in london. How big of a challenge will be for uber in trying to prevent the citywide ban . Arun london is different in some ways. Everywhere else, the pushback has been, we do not like your Business Model. You have to get the right taxi medallions and licenses. Not aondon, it is pushback against the Business Model, but uber the business company. They are saying, it is ok for other companies to come in and offer ride hailing services. But they do not want to burn not fulfilling their end of the regulatory bargain. It is a huge opportunity for dara to establish the new personality of uber. If he can get that band taken away it will be a huge win. It will depend coming out of traviss shadow and emerging as the leader of uber. Yvonne great to get your perspective on this, a critical day for uber. Author of the book the sharing how Companies Like uber and airbnb have changed todays economy. An ipo deadline of 2018 and limiting Travis Kalanicks powers. For bloomberg subscribers, go to dayb on your terminal. It is also available on your smartphone. You could customize your settings to only get news on the assets you care about. This is bloomberg. Betty this is daybreak asia, i am betty liu in new york. Yvonne i am yvonne. Warren buffetts structure hathaway has bought a stake in pilot travel centers. Agreed to have a 39 point 6 of the company, based in knoxville, tennessee. He plans to be the biggest shareholder within six years. The business is valued at over 9 billion. Betty a change in direction, focusing on suvs, trucks and electric electrification. They want to cut 14 billion in costs. He says the decision to change is the virtues that brought success over the past century are no guarantee of the future for ford. Revealing their 2016 Security Breach is three times as bad as first thought, meaning all of its users, billions of its users, exposed. We have the details. This is bloomberg. Yvonne 7 30 a. M. Wednesday in hong kong. Vacationead of another in the city for the mid autumn festival. 30 minutes away from ageist first major market open. Betty it is 7 30 p. M. Tuesday in new york. Markets did close higher. Another bright day in the markets. The Empire State Building lit up, again. I am betty liu, in new york. Yvonne i am yvonne man in hong kong. You are watching daybreak asia. Lets get the first word news with jessica summers. Collected equity firm 2 billion for a fund as demand grows for socalled impact investing. It is the brainchild of their managing partner, who recruited high profile activist and philanthropist, including u2 singer bono. They want to have financial returns with environmental benefits. There are 15 million jobs needed this year in africa and 15 million jobs needed this year and the year after, just based on the demographic. There is a general awareness we will not get there in terms of solving these social environmental problems unless we have Sustainable Capital to achieve these ends. India is cutting levies on gasoline and diesel after they and heard a bull market last week amid slow inflation. It will because bite two rupees equivalentosting the to billion dollars next march. Areel prices in new delhi back to prices seen three years ago, when oil was twice as expensive as today. Tycoon facing new charges in india and continues to fight extradition from the u. K. He is already accused of defaulting on more than 1 billion alone from kingfisher airlines. His charges relate to Money Laundering. He left india last year, saying he wanted to be closer to his children in london, and refuses to return. Saw their best month of 2017 in september as sales rose for the first time this year. The pack asa will drivers replaced vehicles damaged by the months of hurricanes. Toyota deliveries jumped nearly 15 . Both Companies Said the Auto Industry seem to be failing at the fastest pace since november. 1000yearold goal for chinese 37. 7cs, it sold for formerlyn hong kong, owned by a foundation in taipei, it is one of four known pieces in private hands. It was sold to an anonymous buyer. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am jessica summers. This is bloomberg. Jessica, thank you. Were counting down to the open in japan. South Korea Remains closed for holidays. The aussie market has been open closed half an hour. Lets check in with ramy inocencio. When it comes to australia, we saw the first day of the quarter looking strong. But we got back to this downtrend. Ramy we are not seeing the record highs we saw here in the u. S. Translate into aussie stocks. You can see they were down by nearly 0. 5 , the most since last friday. Sectors are down across the board, utilities down about 0. 7 . Real estate and energy also the laggards there. It has to do with the rates here. Of course what happened with the rba 24 hours ago. You can see the aussieu. S. Dollar crosses. Hop into the bloomberg terminal because i want to show you the aussie dollar cross and how that has been changing. This is g btv 2057. We saw some of the initial reaction happening yesterday from the rba. Thislysts are saying was a bit surprising what they were saying in terms of the aussie strength. This bouncee saying might be brief after reaching this 0. 78 level. We will see if this does change it all. It is not moving at all. In terms of the countdown to the open of trade in japan, what are you watching . The carmakers have a pretty good auto report from the u. S. Ramy we did see pushed to the upside for toyota and honda, as well as nissan carmakers. I want to talk about what is happening in terms of the yen as well as the dollar. If we can flip up the boards, i want to show those. Lets call this flat for the u. S. Jpy cross. These are pushing higher here, possibly getting a push from u. S. Stocks. That is where we stand right there. Pjy cross, lets get into this. G btv 3013. What is interesting is where we stand in terms of where japans currency is. In taking a larger and larger share of Global Reserves. We can see this has not been as high here, ever since 2002. Just goes to show where people, where traders are standing, in terms of faith havens here. Not only that, you were talking about those stocks in terms of u. S. Autos. Flip up the boards and lets take a look at what has been happening. What we are ahead for, toyota, honda and nissan, up in u. S. Trading. We will want to see what happens when they open in japanese trading. Back to the bloomberg terminal, g btv 2623. What we are seeing in the strength of these u. S. Automakers across the board is, that is a bum from Hurricane Harvey. When Hurricane Harvey hit across the middle of august, u. S. Autos all had a 14 bump up until where we are today. A bit of a Silver Lining, regardless of the damage and destruction that storm did do. Betty certainly that Silver Lining for investors. U. S. Steel held a dominant position in American Manufacturing from much of the 20th century. But with its leadership eroded by chief imports cheap imports from asia and the mastic rivals, they are investing over 1 billion to upgrade its plan. A reporter toward one of those new facilities, joins us now from chicago. We hear a lot about Manufacturing Industries trying to revive itself. What exactly is the Steel Industry going to do . Maybe in ael is different position from the rest of the Steel Industry, right now they are going to this revitalization plan. 1. 2announced about billion in from 2017 to 2020. Analystshe and last argue they are investing in the down years of the commodity cycle. Betty it seems to be in a different position. U. S. Steel, what have they had to do in terms of closing plants, and what are they doing . Joe they have been cutting costs, having to shut down asset. In late december they mentioned they were going to start considering this revitalization plan. Their First Quarter Earnings Call they announced they would have to speed up the process. Markets, it the fell 26 , 27 . The biggest drop they had seen going back to at least 1991. Theument was, the are market was not expecting this to happen. They were not sure exactly what was going to come from it. Situation just a few weeks later where the ceo step to down, the new ceo came in. By the second Earnings Call, he said 1. 2 billion. The time spent will be from 2017 to 2020. This will allay fears, but stock is not back where it was before that. Yvonne can they face the competition, is a big question. In terms of domestic competitors, you cannot discount the china overcapacity story that place through. Joe that is right, they are facing competition abroad. The whole argument of overcapacity the rest of the world, as well. In the United States they are facing competition from the steel dynamics. In these mills that are able to run at lower cost, higher sometimes depending on scrap prices, this is one of the worries. It is like one of the analyst told us. Once this revitalization plan is ine, you have to put it complex. It is not great, but where are all their competitors at . If they have been making a lot of money for the next three or four years, the worry is, it will not matter. Yvonne that is a fair point. Joe, great to have you, joining us live from chicago. Nowching gears to yahoo , says all of its 3 billion users were exposed in a 2013 Security Breach. Our reportern leading our coverage, he joins us from l. A. What a development here. How did this all happen and how did we overlook these 2 billion users we have learned in this latest development . This came out of nowhere. Verizon acquired yahoo earlier this year, that had been a long process in the works. They finally closed the deal. But yahoo disclosed to these breaches along the way, there was one in 2013 and one in 2014, as im sure you remember. 300 verizon knocked 350 million off the price in renegotiation and exposed the deal with yahoo . When they did that, they continue to do an investigation of the breaches. They came to the conclusion that it was better to disclosed all users that they may have been compromised. They said there was new information that came to light over the acquisition. They did not specify what that was. Say, this is a most conservative approach. They are saying, if you used yahoo in 2013, you may have been compromised. This definitely makes this hack a lot worse than most of us thought. How is yahoo going to address this issue now . Crayton they are doing a version of what they did before the verizon deal when they announced a one billion users they thought had been compromised, and that is reaching out to users, telling them how to protect their information. Yahoo f folks with a account they were deleting [indiscernible] if you are a yahoo user in 2013, you are likely to be receiving an email from them. Betty it is disturbing, nonetheless. There is no identified source yet of the attack. Are there any estimations of who is responsible . Crayton the 2014, the u. S. Government has identified russia as the sponsor of that attack. The 2013 attack, nobody has come out and been able to say clearly who it was. There is some evidence to believe it was statesponsored. But we do not know exactly who that actor was. Say, a major, largescale attack that would have involved a lot of resources. Betty thank you so much, with the latest on yahoo coming up on bloomberg television, Business Leaders will be gathering in moscow for Russian Energy weak 2017 on wednesday. President Vladimir Putin will speak in a Panel Discussion moderated by bloomberg. Do not miss that discussion, 9 00 p. M. In sydney time, 6 00 in new york. This is bloomberg. Betty we are counting down to asias first major market open this morning. Japanese futures are looking like this, up 0. 2 , carrying over from the rally we saw on the u. S. I amis daybreak asia, betty liu in new york. Yvonne and i am yvonne man in hong kong. Larry fink warning investors to temper their exuberance over President Trumps tax plan. He supports cutting the tax rate Corporate Tax rate to 27 , rather than the 20 the president wants. I think it will have to be amended. It has to be amended. I am not a big believer in the reduction or elimination of state and local taxes. That is quite harmful to some of the major states today. Including new york and new jersey. Of the greatest problems in the world we have today, in this country, is saving for retirement, and the liabilities of these major states in terms of retirement. If we stretch these states economically through the elimination of deductibility, it creates bad behaviors within our own country. Getting back to the specifics, there are a lot of merits in what was being proposed. Lets be clear. What is being proposed is a pretty large expansion of deficits. Ourccording to the cbo, deficits will grow to 25 trillion in the next 10 years, before whatever this tax reform or tax cut is. Whether this tax reform adds another 1. 5 trillion or 5 trillion, we can all debate. We all have our own scoring. My biggest worry come out tenish years, country in a country so dependent on other countries for foreign debt, we have the chinese and japanese owning up to 25 of our treasury debt. The domestic needs of china and japan, they are going to need a lot of that money. To think that we could have out 10 ownership of 30 years is a bad assumption. Are we growing our deficit in front of big deford ramik demographic laws . It works if we can successfully bring our economy up from this 2 to 2. 5 range to 3 to 3. 5 range. Gary cohn says this tax reform proposal thatat happens with it happened with tax reform during the reagan administration, and happened ever since. It brings growth forward in the future. Are you saying the tax reform proposal needs to be under control . Know, but it has to be mindful of what we need to do, related to our deficit. What can we change . Expert. Not a tax do not believe we are going to get tax reform if there is the elimination of deductibility. That creates a bigger deficit. We will have to find it somewhere else. The ways ofne of doing it is by raising corporate to rates from opposed 20 Something Like 25 or 27 . That is still a net positive. Most investors, most corporations, would welcome that. You would be fine with that . We would be fine with that. We pay about a 31 tax rate, so it is fine with us. Sure thated to make we are fair and just across all the different sectors. I do believe what the president s tax proposal, related to partnerships, that will help the small and medium businesses quite a bit, by having that 25 tax rate. Betty that was larry fink speaking to bloomberg there on many topics, including tax reform. Lets dig deeper into trumps tax plan with the davidson, who joins us from washington. On what latest shape is the tax plan going to Pass Congress . What is actually going to pass hereby lawmakers . Laura that is the big question. Republicans are still pushing to get a bill out in the next three weeks, by november. Theoretically, the senate will pass it and have it to the president by december, perhaps christmas. That is wildly ambitious. Unless every single thing happened as it is supposed do and it wont, because the book because it is congress they will have to settle for a 2001 orlike bush did in 2003. The issue, because republicans are not agreeing on anything. Tax larry and local fink was talking about, republicans disagree among themselves. Betty they certainly are. Where are all these republican deficit hawks . We talked to someone that traditionally had republicans behind her on cutting the deficit. Where are the this time around . Laura they are more quiet. Democrats have been criticism rising criticizing republicans for that. When you are looking to cut taxes, maybe not so much. Trump and growth that others at the Treasury Department are talking about. They could have a plan that would not addressed agreed to the deficit. But lots of economists disagree whether 3 is possible. They are using a close a number closer to 1. 9 . Yvonne republicans are also considering this tax act, keeping it at 39. 6 , which is what we heard from the proposal, a cut from 35 . Does this ease concerns among democrats that this is tax reform the benefits the rich does it help in any way . Laura i am not sure it will get democrats on board, but helps republicans in showing it is not a tax cut for the rich. Showedort late last week how it will increase taxes for the middle class, they are discussing how to go about that. The republicans from Freedom Caucus said, look, this is something we probably should do. Lets get it done sooner than later. They are all about, lets protected the forgotten man. Another said, the forgotten man is not in that top tax bracket. They are agreeing on other revenue raisers, that gives them more wiggle room, too. Yvonne laura davidson, thank reporter. Loomberg bna a feature we like to bring to your attention is our interactive tv function at tv. You can watch us live and see previous interviews, dive into securities or functions we talk about, all on the right side of your screen. But some part of the conversation by sending us an instant message. This is for bloomberg subscribers only. This is bloomberg. This is daybreak asia. I am yvonne man. There is a reliance on communications to challenge bigger rivals. 10 , thell more than lowest since the Company Began trading. They are set further biggest daily decline. In more than seven weeks. They are china to adopt a performancebased model for equity funds. Fidelity will introduce a new class of funds in 2018. If a fund manager doesnt be to their benchmark. Doesnt beat their benchmark. The Capital Company said its nominees will help rickets insular culture and lock. And unlock value. Betty pricewaterhousecoopers is that chinese movie theaters underreported ticket sales by 90 last year. China has been cracking down on Box Office Fraud as they prepare to renegotiate an access deal. Yvonne the market opening in japan coming up. Joining us. This is bloomberg. 8 a. M. In hong kong. Were live from bloombergs asian headquarters. Welcome to daybreak asia. Japan leads the pack. U. S. Automakers shift gears. Uber at the crossroads. The board approves three new directors. Deadline. 19 as an ipo 8 p. M. Onis just past this tuesday evening in new york. And hist trumps plans major changes. The russian inquiry. Youtube and gmail are in the spotlight. Yvonne the past hour has been about tech. This a new chapter in government performs . Government reforms . What interesting headlines in the last hour. But is this the trump trade coming back . Investors are kind of taking stock here in the u. S. They are looking at tax reform in saying this is pretty buillish. Bullish. Interesting comments coming out from jeff garlock. He is speculating on the next fed chair. We will see yvonne will see lots of names being thrown into the ring. Tpg collected 2 billion for socalled impact investing. The managing partner recruited high profile philanthropists for this fund. Combine financial returns with social and environmental efforts. There are 15 million jobs needed in the next few years in africa based on the demographics. We are not going to get there in terms of solving these big social problems unless we activate Sustainable Capital. Has said king of spain separatists deliberately broke the law with sundays independence referendum in catalonia. The king says the ballot was illegal and undermined coexistence with catalonia. He says the resistance has shown unacceptable disloyalty. The catalan Regional Government has broken a democratic principles for every rule of law and undermined the coexistence of society. The authorities have rejected the secession in solidarity that will unite in all the spaniards. They are threatening the economic and social system social stability of catalonia and spain. Paul directors have said to have approved a softbank investment of a quarter billion dollars. They are also approving three new independent board seats. Board is setting a 2019 deadline for an initial public offering. Revealed that 3 billion accounts were affected by an august 2013 hack. They have tamed obtained new ofelligence of the theft customer information. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. I am paul alan. This is bloomberg. Following rnds nco ay raymond ascenscio following market action. Nd seeing some of the positivity we got here in u. S. Trade. Of our major indices all ending in record territory. See the 112. 85. There might have been a little change of thethe weakening in the u. S. Dollar today. Gop pushback against trumps tax plan. Jump into the bloomberg. I brought this up earlier in the past hour. Proportionwing the of Global Reserves. Billion out of the 9. 26 trillion. This is at its highest proportion since 2002. How much Global Reserves it is taking, seeing in japan. We have to talk about what is happening with the japanese automakers. Those were all to the upside. 18. 4 million for the year. We are this in knockon affect. Toyota is up by half a percent. Nissan is almost up by 1 . Sales numbers for september working busters. Were gangbusters. Sales were up by 15 for toyota. The estimate for the year was 9 . Honda, september sales were up by 7 . The estimate was 1. 5 . Because of the unexpected bump in new cars being bought because of Hurricane Harvey. A Silver Lining from a lot of destruction. Oil has slid for a second day. Raymond new york crude. Wti brent. 6 10 of a percent. What we are seeing in terms of a respite in iraq analysts think this will be temporary. Were waiting on what baker hughes is going to say. The expectation is that rig count is going to rise to 750. Increasing its apply for the month of september. Jump into the bloomberg one more time. In september you can see this green bar shooting 7. 74 percent. But we are seeing this fall. I am not sure whether this sticks to the red line or whether we will come back. The demand for oil usually goes down. Betty lets see if it breaks below that 50 psychological level. Thank you. Politicians in and Business Leaders gather for the Russian Energy weak 2017. There will be a Panel Discussion moderated by bloomberg. It starts at 6 p. M. In hong kong and 6 00 a. M. In new york. Lawmakers are honing in on google services. This is part of the investigation into russias alleged involvement in the 2016 president ial election. Google, facebook, and twitter have been called to testify on november 1. Bloomberg editor Jodi Schneider has more on this story. It is interesting what lawmakers are focusing on. How is google going to react . Had tolly after facebook hand up 3000 advertisements to investigators . Jodi this has taken several turns. Lawmakers will be calling google executives. Intend tossians exploit the services to affect the election . Theyre going to be asking a range of questions. Spokespeople at first said their inquiries found no meddling. But they said they are going to cooperate with investigators. Youtube is the most vulnerable. There is a lot of content. They have pulled down some content. Yvonne they content. Pulled out of that add premium package. I want to ask you about north korea. Mattis supports the blanket efforts when it comes to writing in north korea. . S that surprising jodi the president is not in line with rating north korea. Orea. Iding north k there is diplomatic back channels. The president said it is foolish and a waste of time. The leader rocket man. And now jim mattis is saying he agrees with rex tillerson. This could be a little bit of good cop, bad cop. President trump is the bad cop to his cabinet members. It raises questions as to whether they are all following the same playbook. Yvonne raising a lot of questions. Things that President Trump is doing, whether it looks president ial or not, this is a big test for him. And how he is conducting himself in puerto rico. Can he manage a complicated situation like this . Jodi this is a test of leadership. This is a president who had no government experience coming in. He had some stumbles and the public in the publics eye. U. S. President s have to bring together a country in times of calamity. Puerto rico is largely without power. There is a lot of people hurting. And we have the horrific shooting in las vegas. The president is going to go there as well. Right,come up with that . Oothing tone can he step up and show that leadership . Thank you so much. Bloomberg editor Jodi Schneider. Still ahead, Indias Central Bank is expected to keep rates on hold. We will have what it can do to boost growth. The banks biggest winners in an inflationary environment. Up next. This is bloomberg. Betty this is daybreak asia. Fink saysrry President Trumps tax plan will greatly expanded deficits unless its radically amended. In the plan is unlikely to pass. And the plan is unlikely to pass. Say it willnomists widen the budget gap over the next 10 years in a bloomberg survey. It has to be amended. In thet a big believer elimination of deductibility is. Deductibilities. This is harmful to some of the major states. Our next guess says financials are one of his referred banks in a reflationary environment. Yvonne thank you for joining us. The big moves into financials, you have been paying it forward for your bets since july. Do call this trump trade sustainable . It was a sector rotation we were calling for. Amount ofa fair underperformance with the financials. We have seen that sort of come back. That is good news. Financials are part of that story. There is still another leg up. There is territory everywhere we look. Banks and financial storm makes sense. Financials still makeeg sense. Yvonne how much more of a leica could we see here . A leg could we see here . Hkar youre going to have the rate environment. It is slowly moving up. We expect one more rate hike this year and one next year. We dont have a huge rate increase scenario. There is an upgrade on the rate cycle. Given how strong the balance fact thee, and the economy is reasonably strong, i dont think the banks are still in a good place to be. You say the markets are tighterless repricing policies from the fed more than what we are seeing in terms of tax reform. Kar we have seen so much exuberance from this new administration. This time it is the twicebitten kind of story. People want to see how tax reform plays out. It will be positive markets and financials. But they need to be more measured about what to expect. Betty there are lots of headwinds going on for banks. Whether it is continuing regulation, regulation in the United States, or competition from fintech to brexit and whatwhe elsewhere do you see are the biggest risks to your outlook on financials . Bashkar a downturn in the economy is possible. Anything that changes the course of Economic Growth in the United States. It would pose a risk to banks. Gone,e that regulation is but at the end of that environment, maybe we might see some of these regulations being taken off. Betty stay with us. A lot more ahead we want to talk about. This is bloomberg. Betty this is daybreak asia. Let us get a quick check of the latest business flash headlines. Buffett is acquiring 30. 6 of the flying j truck stop chain. It plans to become its biggest shareholder within six years. Uber place to sign up female , takingin saudi arabia advantage of the kings decision to allow women to behind the wheel. Ban fear the repeal of the may cause a drop in demand for ridesharing apps. Fidelity international is planning to cut management fees. Are trying to stem the flow of money to cheaper, passive products. They will introduce a new class that willn 2018 reduce charges if a fund manager does not beat their benchmark. Let us continue our discussion. Bashkar, i heard news within the quotingr from the u. S. , another big man money manager, jeffrey garlock. There is a one of a lot of guessing over who will be the new fed chair. He said there was no way President Trump would reappoint janet yellen. We have talked about low volatility in the market. The longer this guessing game continues. What do you make of these comments . Bashkar if a chair change the policy is going to stay we have seen a. It is not possible to say to change the things overnight. Why wouldnt President Trump want to appoint someone , someoneore doveish who doesnt want to keep Monetary Policy the same . Someone was going to hold back on raising Interest Rates . Why wouldnt President Trump want to do that . Bashkar it is speculated that the stage. Speculative at this stage. Most chairs come with their own views. It is not one chair that decides the direction of the policy completely. It is the whole team. That will continue. How confident are we going to see three hikes in 2018 . Hikear there will be one next year. There is low volatility mentioned. Asia seems to have a lot of rallies, given this global super nice growth. How do you make global synchronized growth. How do you make money . Bashkar most economies are stable are on the upswing. Data from china has been positive. Market and wenas do think there is an opportunity there that is available. Most people are underweight markets in general. If you see a lot of it of money is coming on a passive investment, they have possibly overrated it. China would be one of the markets we would point out. Betty india. We are expecting their Rate Decision later today. How much has the narrative changed for you . Wendy would expect a rate cut when do you expect a rate cut . Bashkar we are still bullish from a longterm perspective. From a rate environment they are positive against a cut. The core inflation is ticking up. How much you can argue for a rate cut at this point. I dont begin will materially change. Will materially yvonne 8 30 in singapore. Betty it looks pretty gloomy there. You are watching daybreak asia. Lets get to first word news with paul allen. He says he is a believer of cryptocurrency. Right now they are trying to identify the extent of Money Laundering around the world. The illegal schemes have been one of the problems for critics. He sees potential in digital currency. Bitcoin remains a little bit speculative. Much money how laundering there is being done in the world. From the people are trying to move money from one place to another. They saw their best month of 2017 in september when sales rose for the first time this year. Gm and toyota led the pack. Almost 12 while nearly 15 . D to with Companies Say the Auto Industry seems to be going at a fastpaced. The Trump Administration defends james mattis. Mattis told senators the defense wantsment supports and to find a diplomatic solution. Sayse line cofounder there is no chance gary cohn and will be the next fed chairman. There is no way donald trump will allow janet yellen to stay on for next year. He says minneapolis president will be handed the job, he has been critical this year. Coming up later today on bloomberg surveillance, the conversation with vice chairman Stanley Fischer before his departure from the role. Kong time. 0 hong global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im paul allen. This is bloomberg. Yvonne thank you. Time to see how the asian markets are shaping up so far. Looking at what is happening in the markets today, there is a little bit of a mixed bag. Not really taking a fully positive cues from what happened with the record across all the major indices across the United States. The nikkei. With the nikkei is up by one third of 1 . 200 notsee the asx feeling any of the flow from tuesday trading in the u. S. We will call that flat right now. Lets see what is happening in terms of japanese trading. We can see that these are some of the biggest risks. Nearly 14 here. The reason for this is its affiliate wants to raise about ¥100 billion to massproduce at low cost. To severalaching out dozen of Companies Including toon, fujifilm, and nikon divvy up the total 100 billion. More than 5 here. They are upgraded to a whole. They are raising the 12 month price target. Toshiba, up by about 1 . Ukraine,s saying that the National Importer for its intent put off to sell estate. Those are some of the biggest movers right now in terms of japan, which is our biggest stock market that is open on this week. Betty china is closed for the golden week holidays. Lets take a look at how it stands. The offshore yen is down by 1. 2 , hovering at a six point marks here. We have been seeing Dollar Strength for the past several days. Trackingeakness is other currencies. We are seeing this give and take here. Not too much of a change right now. We will take a look at this change of the course of the past two months. His is just the offshore china markets are closed for the next five or six days. Betty a good, long holiday. The u. S. Auto market expanded in september for the first time this year. Automakers had their best month 2005. Gm and toyota leading the way. We got this bump up from the storm, the hurricanes in texas. How long will that last . The analysts we spoke to said probably a couple more months of boosted sales from that as more and more people come to replace their waterlogged vehicles. The impact of these storms is hard to underestimate. It was not just the flood in also much of miami was flooded. There are a lot of vehicles there across the south as people go to replace the vehicles that were damaged from the storm. That will be an ongoing boost to sales expected for october and november. What are the analysts seeing in terms of this boost that we are getting from the storms and longerterm . There it is actually very tough to beat the Previous Year sales. Auto sales had been marching up year after year. There are a lot of new cars out there now. Was not strong. That is why the hurricanes proved to be a turning point. Match then tough to years. Sales volumes are still pretty high when you look at them historically on a tear near 10 year pattern. We will probably get some small growth this year in annual sales of cars for the u. S. Thank you. We have some breaking news right now. According to our reports come a possible fed nominee is being calculated. They will be delivering a short list for the fed chair. We have been talking about this for some time. Included in that short list is andt yellen, gary cohn powell. Not recommended by many. Johnord universitys taylor is also said to be under consideration. Not a lot of surprises. Betty one remarkable thing about the short list, which seems to be growing every day, the names are really quite familiar with us, despite lots of speculation from different corners. You mentioned yellen is still recommended on the short list, but not recommended by many aids. This is ramping up. We will hear of something possibly in the next few weeks he had few weeks. The announcement is expected to be two or three weeks time. We will switch gears now. Walt disney ceo says the company will not walk away from the Linear Television business. He told Bloomberg Technology emily chang that the new streaming service is good for business. On the sports side, what we are doing is staying in the linear business areas espn will still be available by traditional means, meeting multi channel distributors. We are adding to that a significantly enhanced, extra sporting events as a subscription model that will be accessed through the same app. Or additional sporting events. They will be available this spring. On the disney front, we are launching a Disney Streaming service in the latter part of 2019. That will house the output of the studio in the pay window. For us, it has been a window that netflix has licensed from us. Ends in 2018. We will augment it with Television Shows and original movies made just for the service, as well as shorts. Rare case ofibe a mortality when it comes to espn. Given the struggles we have seen at espn, why not offer content direct to consumers . Right now, the Business Model that the access the espn content , 60,000 sporting events a year, is a good Business Model for us and a relatively good proposition from the consumer. It is working. It is not growing as last as it once did. That is what people have largely focused on. Espn, it would be far too premature to write it. Vanity fair used it. I have not read that yet. 16,000ill covers sporting events and here. Events agramming year. Hours of programming. 35 percent of americans watched some form of espn a month. It is really Popular Service and one that is thriving. The world of tv has been disrupted. We feel we need to adjust accordingly. That is what we are doing by launching a streaming service. That is why we are making available all these extra sports available. Do you think ratings will go up . It is early for the nfl. Stars emerge ive been around long enough to see that there are cycles and sports. Is facingt competition for consumer time. Even the most popular content, whether the nfl or any number of network tv or cable channels. We are living in a new world of reality. We have to accept that. It is still one of the most popular things out there. It is the reality of our time. That was disneys ceo speaking with them retaining earlier today. It is decision day. We will look at what clues commentary gave on the slowdown. Just out about President Trump and the short list for the next fed chair. This is bloomberg. Yvonne this is daybreak asia. Betty we just had those headlines break a few minutes ago. They haveto aides, sent a short list to President Trump 28 President Trump. We havethose names already heard. It looks like janet yellen is also on this short list. She did not get a lot of recommendation from these aides to President Trump. It looks like the appointment is coming down to the wire. I want to bring in kathleen hays. Kathleen Central Banks around the world are the focus tonight. Seeing isat we are donald trump and his team are definitely focused on this now. The are coalescing around a decision. His name was one of the newer ones that came to the list, powell. Cap and wash has already been on kevin of governors porsche janet yellen come a great track record janet yellen, great track record. She has been a great fed chair. It seems to me that donald trump, it is his choice. When it comes down to it, it is donald trump. Betty what did you make about these comments earlier . Kathleen you cannot discount it entirely. The thing about neil, he does not think we should raise rates now. He is very new. He has only been a fed official for a year now. That seems one of the most waste likely. That important to remember you trump had lunch with janet yellen. Trump had lunch with janet yellen. Expected to keep this benchmark rate at a low. Next guest says a rate cut has may be back on the table. Joining us is sanchez. Sanjay. We got a little bit of a shocker with some of the Growth Numbers we have seen out of india. A december rate cut is on the table . If you look at how severely growth has slowed, it was a big shock. If you look at the forward indicators, they are not really signaling any kind of improvement at this point in time. Have a slowing growth story. On top of that, there are no jobs created. Up, there is a case on the economy side that we need to cut rates. At this point in time, inflation has become an impediment. I think some of the factors such as an increase in vegetable prices make a case. I have a chart that shows a little more of that picture. The are seeing inflation starting again. We are seeing inflation surging again. The core price pressures are still continuing to build, not to mention the Federal Reserve is starting to shrink its balance sheet. Isnt that window for rate cuts getting narrower and narrower . The inflation at coming up two things that happen. One is you have the increase in housing allowance, which the r. B. I. Said they do not attach much importance to it. The second is that you had a wider corridor. That is a onetime shock to inflation. Is how can. Ue inflation be so inconsistent with the growth story . We will see inflation reconcile itself. Think that is the key reason why we think december cut will come back on the table. The second point that i think is important is basically the fact of the recapitalization of banks. Much as we like to think about more drasticl be measures being taken. If you look at the history of think capitalization, you always need shorter rates, a steep cut. I do not think india will be an exception to that. Yvonne i think it is interesting that india is among the low banks of the world. Cannot cut rates. Others are in the position where they want to tighten. Lets put more of the focus on gdp. This is clearly the issue for the rba r. B. I. And for Prime Minister modi. Look how strong indias gdp rate was. If you go back to the First Quarter of 2016, 9 . It is still pretty strong compared to rest of the world. 6 in the latest quarter. This is obviously why they need to cut rates. This seems tricky to me because there are a lot of Structural Reforms going on. Well rate cuts do the trick to will the economy again rate cuts do the trick to boost the economy again . Whatever they can find to rates, they have to utilize it. I do not think rate cuts by themselves will solve indias problems. When you going through a period of intense structure of reform and changes, at that point in time, if you do not have the support of low Interest Rates, it only aggravates the problem. If you look at the structured measures we have taken so far, eventually i think they will all be favorable. They have done very little to boost demand in the economy. Whatever support we can find for rates is one part of the jigsaw. You have to use it. Betty we have seen reaction to in india. H story we have seen foreign money flow out of india. Foreign funds have sold about 1. 8 billion of indians fox indian stocks. Do expect that to continue and accelerate until we get more reforms . I think we will see selling continue. One way of bringing the foreign investor back in is to incite them. Aspect is there. It will come back on the table. That is clearly something they should do at this point in time. It is india as attractive a market from a longterm basis . I think you really need to solve the issue. And the rest of the region, you are seeing the differential with the u. S. Rising. Here we have india which was supposed to be in domestic a domestic driven economy. You need the results. Yvonne great to have you. And we want to thank kathleen hays. More ahead on daybreak asia. Betty this is daybreak asia. Yvonne that is almost it for us here on daybreak asia. What are you watching . Rishaad looking amazing. 600 plus figures. Really looking at what happened. Yvonne you have the targeted cut trying to help these smaller companies. Are forgetting one other thing which is the tailwind we got out of new york records yesterday. Equity market records. Nearly up 8 . Raisingr big four between 5 and 6 . We will be talking about whether this rally is sustainable. Having a little bit of a calm her look at what is happening out there. Japan is the most preferred market in asia. Gdp is doing very well. That inflation target remains low. Also looking at india. You have just been talking about that. Seems like december might be the time to cut one more time. Thats all we have for the next few hours. Betty market coverage continues with rish and heidi next. This is bloomberg. Rishaad 9 00 a. M. In hong kong. Uber is at the crossroads. Travis. O rein in sales growing last month for the first time. President trump has a short list for the fed. Janet yellen will not stay but harry cohn will not get the job. This is bloomberg markets