We dont. They gain when the economy gains. They gain when Companies Get better. They gain in lots of different ways, but they dont want that. So many people come up to me and say give it to the middle class, give it to people that need it, give it to people that want to spend it. You would be surprised. New englandns the patriots, good guy. He does a great job. He was at the white house recently, he gave me a super bowl ring. I was very honored. And it is so important. The second plank of our framework is to make the tax code more simple, fair, and easy to understand. American families and businesses te aliens of alere billions of hours and tens of billions of dollars on escrow shooting paperwork. You see it all over the place and you have no idea what youre doing anyway. And compliance every single numbers ofve paper. Under our framework, the vast majority of families will be able to file their taxes on that same single sheet of taper that i am so proud of talking about. [applause] pres. Trump as part of the effort to make our tax system simple and fair, where going to protect thousands of Family Businesses might ending the crushing, horrible, and unfair estate tax sometimes known as the death tax. [applause] that is a tax that has destroyed so many businesses and cap those businesses out of your family, your children, your grandchildren. It is very sad. We are working to end the estate tax, to end the death tax as it is socalled. [applause] pres. Trump in the crowd today we have calvin and his son, steve. Where is calvin . Goodlooking family. You have been in the trucking business since 1946, a very good year. A great year. I love that year. Trucking runs in their blood and calvin wants to pass his Company Along to his children just as it was passed down to him by his father. Where going to protect Small Business owners and their families so they can continue to run their companies with a dedication and with love. We will make taxes simple and easy, and fair for all americans. [applause] pres. Trump thank you, calvin. Calvin, you want to hand that business down, right . But dont worry about it for about 40 years, right . A tremendous advantage over china at 15 k at in mexico, all of these countries had a lower tax rate than the united states. You cannot compete that way. It is time to end this unfair disadvantage and give american a levels and workers Playing Field they so richly deserve. Finally. [applause] pres. Trump because when american truckers these are great heroes if they have a level Playing Field, there is nobody on earth with tracks or youother way that can feed folks. There is nobody. I know what you go through, there is nobody that can be you. Nobody. But you finally have a frankly yound finally have somebody that has given up a lot. Good, i life was very have to say. I had a very good life. [applause] pres. Trump i had a very good life and i have a better life now, im helping a lot of people. And believe me, i love doing this, because we are making we are doing so much between the regulations, the taxes, getting a to bring court judge not just nominated, but getting him onto the supreme court, Justice Gorsuch is doing a great job and appointing so many other great judges throughout the country. It was so important. I appreciate that. You finally have a government that is going to defend you and stand up for you and your country. [applause] america is being respected again. Something happened today. A country that totally disrespected us called with Important News in one of my generals came in and said i have to tell you, a year ago they would never do that. It was a great sign of respect. You will probably hear about it over the next couple of days. This was a country that did not respect us, this is a country that respects us now. The world is starting to respect us, believe me. [applause] new. Trump under our trademark you will radically cut the business tax rate so that American Companies and workers can win against foreign competitors who are winning in many cases because they have an unfair advantage. We will cut the Corporate Tax rate from 35 and more all the way down to no more than 20 below the average of our major competitors from other countries. [applause] biggest winners from this transformation will be every day families from all backgrounds, from all walks of life and our Great Companies which will produce the jobs. They are going to produce jobs like you have never seen before. ,hen companies leave our shores it is the American Workers that get hurt. In americaies stay and moved to america, it is our wonderful workers whove read the reports including our great truckers who will have more products to deliver and more contracts to fill. That is the way it happens. [applause] pres. Trump for the many who file taxesrs as sole proprietors, S Corporations or partnerships, we will cap your talks your top of 25 , at a maximum substantially lower than what you are paying now. [applause] pres. Trump the more than 30 million americans who have Small Businesses will see listen to this a 40 cut in their marginal tax rate. 40 . [applause] wouldnt want to be a politician against that. Theyre going to have a long, hard winter. This will be the lowest top rate in Tax Income Tax more than 80 years, not since 1931 have they had taxes anywhere near that level. [applause] pres. Trump this huge tax cut [cheers] words, huge and now rocket here. You know what we are talking about, dont worry about it. It will rocket fuel and it will be rocket fuel for our economy. Kevin birch ofs jet express who has been in the trucking business for more than 40 years. Where is he . [applause] pres. Trump 40 years, you dont look that old, kevin. Good job. If Congress Passes our tax relief and reform plan, and will be able to invest in new equipment and additional training for dockers, drivers, and technicians. He wants to create more jobs and we are working to help him do exactly that. Plus, we are working on a tax write off that will be almost immediate with your investment. That is something you have never seen before. All right. That was the usual heights up hypeddent trump on his taxt trump reform proposal, a lot you heard there, but i have to say very short still on specific details as we heard from President Trump here it he will add more Additional Details on tax reform. We heard simplifying the tax brackets, 0 , 12 , orbit5 noting that the tax rate will fall to a maximum 20 . That is the redline for President Trump. A big focus is Small Business tax, that cut is 40 in the marginal tax rate. That has been applauded by americans when you look up polls, that has been heavily criticized by immigrants and others as essentially a tax cut for the wealthy. Again, you have heard a lot of what we have heard already on tax reform. President trump really trying to appeal to the working class americans saying it is going to benefit them, be a 4000 pay raise for americans, the average american around the country. I want to bring in haidi lun also with me from sydney. Rousingresident trump the troops again, kicking off a roadshow where he is trying to sell tax reform to obviously very skeptical them a craft, but may more skeptical republicans. Atyet, and also lashing out democrats saying there are some being obstructionist trying to raise taxes substantially. We always knew this was going to be the salesmanhip part of the plans. Details, one thing to point out, i didnt know this if you are wondering why he is addressing the American Association of truckers, Truck Driving is one of the most common jobs. He is going back to his base and expanding on this make america rate again campaign that got him elected. Correspondentr who is utter to talk about this policy, what was your take away from that . Alexis i cant say that there were any surprises. Anything that the president highlighted were definitely elements released on september 27 with congressional leaders, but was really emphasized during the speech was this was a middleclass tax bill. He used repeated phrases to show that this is a bill that will benefit working americans, not a bill for rich friends and he tries to emphasize that throughout the speech. Top opposition. Forget the democrats, it is really the republicans. He we get any sense on how they are going to vote here on this tax policy . It is a good question. The middleclass rhetoric, he is definitely hoping to please senator rand paul who has been clear that he will not support a tax bill if there is a hike on any middleclass amalie. Rand paul align with who could be in opposition, but so far the details we have seen and they are incomplete cutting the estate tax, which the president just talked about as well as appealing a anti, those are things that benefit the wealthiest americans. Who has done the math here on what President Trump has revealed so far . The it actually improved average middleclass American Family . Because of two things included in the framework, one is basically repealing personal dependent exemptions, but the framework does call for increasing the child tax reddit, it is a significant increase without specifying the amount, without the details it is hard to know how middleclass the amalies welfare, but there have been reports saying because of that change in addition to the repeal of state and local tax reductions, ultimately 30 of those making 50,000 to a hundred and 50,000 could see a tax hike. Think its a much. Thank you so much. Here to give us more analysis, chief macro strategist david ater, country bitter contributor for bloomberg. You are listening in on this speech from President Trump and we heard him again reiterating the Corporate Tax rate will go from 35 and above to now 20 . How beneficial is that cut in the Corporate Tax rate owing to be . Going to be . It will only be beneficial to the bottom line of corporations here it the question is, how is it going to be paid for . There were scant details. We have seen this before. There was no question from a corporate standpoint it will improve earnings. That is a given. There may be other things they have to give up like the deduction for Interest Rates. He didnt address this in detail, but again, as a treasury market strategist, which is my background, the question is, this is going to cost a lot of money and it has to get paid for somehow. And he thinks its going to be paid for by rapid Economic Growth and you say historically that has never been the case and again on the details of if, we see tax cuts when we already have an extraordinarily high deficit, extremely high debt to gdp, i dont think that is going to pay for itself. 2 2. 1 been averaging gdp for a very long time and if you do the numbers on this, put it at a quarter of a percent to gdp, maybe. But there are some offsetting things, but i dont think this will give us the 3 to 40 growth to say it will be revenue neutral. What about other parts of the plan including ringing back the money that companies are storing overseas saying that, that combined with the Corporate Tax rate deduction is going to equal a 4000 pay raise for the average american . Again, we are very light on details, but is that feasible . I dont know if all of that money will come back quickly, and i would imagine no one has discussed what a corporation is going to do with the cash coming back assuming it comes back, but perhaps they will use it to buy back their own securities, which they have been doing through financing, through issuing ions. It may not go into the productivity increasing investment in equipment and software, etc. That would really help with productivity and profitability. They may just use it as a vehicle not to issue bonds, we just dont know what is going to happen. It is a great number and a great way to sell it to the public as he has been attempting to do, but we do not know what the future is going to look like. We dont know what corporations are going to do with this. A lot of salesmanship at this stage, right . Tax cutsknow how the are going to be paid for, but what about infrastructure. Again he mentions this 1 trillion package, how will that be paid for . Do expect that to eventuate . Again, the question of 1 trillion on this and 1 trillion year, it starts adding up especially at a time when deficit was going to explode anyway, and we could talk about those sorts of numbers and what that might do to Interest Rates in the economy. It all sounds good, but it hasnt passed through congress yet, and he is talking it sounds like he was running for president in 2020 again, but you know, there are the democrats will have an issue and there will be a lot of republican deficit hawks who have re spoken about it, so what he has said today in the salesmanship it is a hard act to follow, but we just dont know enough and i am almost frightened to sort of address that if we get this yes this is going to happen, we dont know at the end of the day what i would be concerned about again is this question of how is it going to be paid for and if it means the deficit is going to explode more than it otherwise is going to explode, it could send Interest Rates shooting up. That could hurt the market and the economy. We have not discussed applications that theres going to be a recession in a next couple of years and what that might do. I will leave that to the future. If you add to this mood and sentiment that you have a more dovish fed going into next year, it is good for the markets to maintain the highs we have been at . Youre thinking of the equity market now as opposed to the bond market. Im not sure the fed is at this stage so dovish. I think we got some information today looking at the minutes of what they were saying. It seems we are on for a december hike, the odds are over 70 . I think this ad would be comfortable for that height and make it easy for the next go easy at thet beginning of the whole thing. I wouldnt say that the fed is all that dovish. The one to go forward with their Balance Sheet reduction, that will add more supply to the market and that effectively could have upward pressure on Interest Rates. As far as the equity market, i of peoplea multitude that is surprised how well its done, shocked how well it done. I guess some supposed to say yet, it can get continued and i think the heights and hopes were a tax plan here that could do a boost to gdp may be enough to allow it to continue further, but again, as someone who has been in the next income world for most of my career, i tend to be sort of pessimistic on everything. Or a realist, lets put a positive note on that. There you go. Im a realist. There is a real possibility that the tax reform could fail, right . Considering where we are going right now. What would happen if tax reform fails . It mean to fail, doesnt mean that the Corporate Tax rate goes to 25 rather than if it does fail, i dont think it will at least in some degree, the russian is how much is the market discounted. Im talking about the risk market, stock market. I believe it is discounted a tremendous amount and anything that is a compromise from here will prove a disappointment. I dont think were going to get notthat trump is talking here and all of the initial proposals offered. Summarized that position is that the markets have already kind of given up to a large extent sort of the campaign thomas is going into his presidency. What we get if there is a watereddown version, it is still a positive thing . Kind of a positive thing, but i think it will prove an opportunity to boost profits on equity petitions, rebalance accordingly to a more balanced sort of allocation that would favor next income to some degree. It is a positive thing, no question about it, but you are already seeing other positives pulled away. You see buybacks starting to. Low down i would say that equity market is pricing for perfection or a lot of good news and anything short of that will be a cause for caution. Thank you so much for joining reaction from President Trumps speech in pennsylvania. Great to have you, david. As the speech ended, President Trump saying he plans to announce a decision on the iran deal shortly. We will be watching a lot it state there. Highlighting tax reforms he plans to put through, the focus being on benefits for the middle class. 20 more to come. This is bloomberg. Is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Of our shaping up in terms future session. Beautiful day here. The sun is coming out after a rainy couple of days. York,m betty lou in new you are watching daybreak australia. Lets get to first word news. President trump has promoted his tax proposal saying the outdated current code is holding back the current recovery. He told supporters in pennsylvania that his reforms would kickstart the economy creating more jobs and higher wages. He also claims to have increased the value of u. S. Assets in the first eight months of his administration. Terry duffy has pulled support, but is not impressed by proposals that he says make no sense. He says the volcker act is not one of them. He says he didnt support over at the time and says limits on the market doesnt help. I think it was ill advised that best. I think the bank should be allowed to i think theres nothing wrong with it as long as they are regulated like everyone else. That liquidity is going to be key to the security of of the marketplace. Prime minister Justin Trudeau adopted a positive mood at talks about nafta. More contentious issues are the agreementer is effectively dead, the president said it is possible we wont make a deal. We will see. A fourth round of negotiations is underway in washington. Taiwans exports surged to a record last month. Shipments rose 28 to 28. 9 billion, the most since july 2010, more than twice the estimate of every economists surveyed by bloomberg. Experts say china and japan also climb to record levels. Reports from australia say hackers have stolen data on naval vessels and air force planes. Authorities were only alerted last november here at the government says be stolen information was commercially sensitive, but not classified. Stagnant spending, soft wages, and an aging population are forcing jim japanese retailers to look over to growth. Fast retailing is expected to see higher profits improving results in china and Southeast Asia while seven and i may post record net income. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im jessica summers. This is bloomberg. Thanks for that. Lets get an update on the markets. To new zealand where trading is underway, we are seeing the weakness off by about. 1 of 1 . In the wake of the fed minutes, we have the u. S. Dollar holding dnpo weakness against all other than the yen. Asian stocks at multihighs over the past few days, sydney looking to open the much lacked at the moment, unchanged. That is how we are sitting in terms of the aussie qe dollar care. Japan is the market to watch after two decade highs we have seen . Headlines coming out of kobe steel, we still solve the japanese market and momentum ahead of elections there on october 22. The dollars trading slightly lower against the yen. We have had dollar weakness pretty much throughout the session in reaction to the fed minutes. The Pound Holding steady, treasuries holding a bit on to their gains and i would say a balanced outlook from the bed minutes. Are on track we for that rate hike in december and again in the equity market, looks like no stopping this trump trade, although we didnt rise as much as before, still the s p trading higher there. Our now, 2555 up about. 2 year to back on fed minutes, some officials were on the rate hike inflation weakness is temporary, others arguing low employment will push it higher. Appling haze with a closer look. Kathleen hayes here. It seems to me what happened at the meeting is everybody inted to come together consensus. They wanted to get behind janet yellen and another rate hike on the rise especially when theyre anding the Balance Sheet inflation underway. I think it is a little hotter than we thought. Lets take a look at the key phrase from the september meeting, many participants expressed concern with low inflation readings this years might reflect transitory factors, but also the influence of development that could prove persistent and in fact several disciplines said rate hikes will depend on rate hikes rising toward 2 . Lets listen to charlie evanss began circa earlier, i think it is easy to see which camp he is in. It is too early to say. I think the inflation data was disappointing, i understand i have read the arguments. I have understood it is likely due to transitory factors. There have been those in the u. S. Low inflation is a global environment. The whole world is dealing with transitory effects. The minutes showing that many officials saw one more rate hike wanted this year, many is probably a few more than several. Dot came out of the september meeting. I think this is what convinced some people this is all but a done deal. You have 11 of them saying yeah, one more rate hike this year. This was a significant set of minutes. On the side of those more convinced, tightly boosting wages and inflation, that is a region. A couple of comments we have seen or than once on this show, ward mccarthy says fomc shows befuddlement on inflation and that the december rate hike is still on the table. Mitsubishi says the minutes are dovish and it may mean that paths get hike shallower over the next few months if there are still members concerned about week inflation. What are the implications for ense ket s peopleink it shows that are saying maybe they are not as hawkish as we thought. I to look at projections because the market it aims to me in terms of fed one future traders, worldwide projections didnt touch. Inverted yield curve is becoming more likely. Bondding to a long time market bowl, because of the fed keeps raising shortterm rates, that is up in light to buy longterm bonds. And an economist in washington making the same argument in a note today. October 30 is the next key inflation gauge. Very important. All right. Watching out for that. How asia is set to react. Another was saying, yet horrible governance scandal in japan, but japanese equity markets are just charging it off. Japan has been the focus this week. Everything that has been happening the bulls continue to come out of the closet and continue to buy Japanese Equities. Lets look at the terminal, g btv 9481. It shows the propensity of people whining to continue to add Japanese Equities to their portfolios. There are number of bulls we have spoken to recently. We talk a lot about global policy, japan is a place where Monetary Policy is lose. If people make an assumption about an election victory, but of horse is not a done deal, but if that were the case it would environmente of an to have looser policy in japan and a continuation of a very slow, but definitely recovering, economic picture in japan. And you know, even some signs of inflation coming back after many years without it. Japan continues to be a place where bulls are allocation performed this year. Dont get us to excited talking about inflation in japan. We have heard about the runoff in emerging market this year, but small caps have lagged behind. Are they going to catch up . Adam yeah, i think the because of the extent of rallies this year, people are wanting to look in other places to try and find and generate some are performing in part of their allocation. 9409. Look at g btv this gives you a sense here of how much those small caps performed relatively speaking. They are really lagging behind and and interesting argument being made, investors are looking further down the food change food chain of equities and wanting to get smallcap exposure, of course the big act in town is these the tech sector. That as what is been driving china and south korea this year. In small caps you can get more exposure to other kind of sectors in consumer space or health care space, but other areas nontech related and that may be a place where people are looking to add exposures giving valuations of right now in this long performing bull run in the last 1718 months is really the start of last year that this that going. So with people wanting to continue to add exposure it may all in the area of small caps rather than the big end of town. Think you so much, adam. We are going to get back to at how banks with a look the Chinese Central Bank is adopting a strategy of undernourished sectors of economy, Small Businesses. One analyst calls it the money your details next. This is bloomberg. Good morning, i am betty liu here in new york. Haidi and i am haidi lun in sydney. Youre watching bloomberg a break australia. Better results when the acb and bank of england did when they tried a similar move your the program was unveiled a week and a half ago. Chief asia correspondent joins us now from washington. Pboc aiming to do with this targeted approach . Clever and sophisticated take on things, rather than Interest Rates already at a record low and rather than pump money in indiscriminately when theyre trying to curb the overall debt story, they are going after sectors are you can generate activity underground, small and medium enterprises. If you channel money to the sectors, it will generate growth in a more effective way then you would do through other channels. A are taking the leap from other Central Banks, rather than wholesale using it is a sophisticated way of going about it. Haidi they havent done wholesale moves in some time your doesnt mean that the pboc is looking at other tools they can use and by extension the significance of economy . Definitely an example of how they are looking overseas and joining in on examples of what peers are doing. The ecb has rolled out similar measures as have the bank of england. Effectiveness has not in perhaps as hoped for, the view on china can be more effective because there are more legals they can pull more levers they can pull. It is all about keeping the economy taking over ahead of Congress Next week and once they get over that hurdle the backdrop is that in china, authorities are trying to slow the pace of reddit rose, but that does not mean they are not willing to put credit in parts of the economy that it matters most. Week, imf meeting this Central Banks are willing to act when needed and one of the reasons it is a positive mood is the chinese economy has been performing better than anticipated. It has. And as you point out, all of this happening before the congress by the chinese government, is it going to go far enough to protect the real economy . I think so, betty. Hasink the view is china a threepart economy right now, and even as we get to Congress Next week, i dont think too many people are expecting a bank anytime soon. Schematic will remain in place, certainly that is a view that they think china is on a pretty smooth putt right now. They are not expecting shocks to emanate from that part of the world. I think what were seeing is a targeted approach with these new landing channels. Rate tot the exchange remain smith, markets to remain free of volatility and that builds to chinas economy being right where policymakers want that. Betty targeting the reserve requirement ratio we see the pboc pull other levers to help this other part of the economy, Small Businesses, trying to give them more acquitted the. Are there other things they may be doing down the pipeline . Yet, this is a good example of how they can get outside of the box, it is not just for china Central Banks. Central banks a logo the world has moved the on central policy. This is how the pboc is trying to innovate. We have probably seen them didnt can you to use continue to use dont forget they have additional firepower as needed. Betty they do so much enda curran there. You can get a roundup of that story, many more you need to get your day going in this edition of number daybreak bloomberg daybreak. You can customize your settings so you only get the news on the industries and assets that you care about. This is bloomberg. Haidi im haidi lun. Betty and im betty liu. Still wanting to merge sprint and tmobile although it failed to win the approval of u. S. Regulators years ago. The companies are said to be on the verge of announcing a deal. Ceo says it was alwayss plan to buy the two as a set. Let me ask you about another company which may be hasnt worked out so well yet, mobile Telephone Companies at t, verizon, you bought sprint and then there is another one, tmobile. You owned sprint for a number of years and i think i your own valuation it is probably worth less than when you bought it, some people might say, now youre trying to buy tmobile and merge the two, that will that be a good weight to a good way to make your investment work . our return on investment is over 40 despite image, very good profit already. So, the company has turned around. It is profitable now and growing one iell, but from day wanted to acquire not just and tmobile as a set. That was my strategy. I had a believe that the u. S. Government would approve the merger and somehow i believed it and the government rejected. So, i ended up with only half the piece. It is a new government now. The Obama Administration didnt support the merger, but you think now you could edit approved could get it approved . i dont know, but i think it makes sense not with twouch a duopoly big ones make a time of market share, and two little ones, duopoly, three real fight, better competition. Three better than four, that was Masayoshi Son speaking to david rubenstein. Only a billionaire can say that, by them as a set. Its like i want to ive this pair of lamps for my bedroom. Only he can say i want to buy two companies. We saw the share prices of sprint and tmobile briefly tank earlier in the session on reports that the doj likely to oppose the deal. I know some analysts coming out and giving the chances as rp that this would happen as pretty poor this would happen. He believes a stronger third competitor is better for the market than a three and for that are weaker than the top two, but that will probably be a hard sell to the regulators. Yet, for consumers looking for cheap options and contracts, if masa can collect the two care as he put in the interview, a lot will have to change in terms of addressing issues raised three years ago when he was rebuffed. One of the analysts, jpmorgan saying the potential sprint tmobile combination would have a 60 to 70 probability of getting approval, significantly more optimistic than the straight view which is approximately 40 or 50 at the most optimistic. That protects Downside Risk to softbank, watching how that impacts stock. Pretty optimistic from masa, but he is determined, isnt he . Betty clearly, yes. Several years have gone by and he still has his eye on the rise your haidi let get you the check of the latest business flash headlines. Cheaper has shown a headset that doesnt need to be tethered to a computer rounding out plan to push the to a wider audience. It is called oculus go and will be available earlier this next year. It has cut the price of the wrist set. At 599. Comes in betty qualcomm has been fined 735 million for the way it processes chip patents. It has been while waiting antitrust regulations for at least seven years and collecting licensing fees in that time. That is it for daybreak australia, but up next is the daybreak asia. A fresh governing scandal out of japan . Here we go again. Welcome back. We missed you. A freefall for stock, 40 drop in the last two days and we will talk to an analyst that is bullish on the stock. Onffirmed his buy rating monday, just before that plunge where it wiped out a third of the value of market share for kobe steel. We will ask him what he thinks now, if it goes beyond aluminum and copper products. And people saying it is worth more open up than whole. Any time mitsubishi joining us to talk more about what we heard about the fed minutes. Kathleen saying a little bit of a hotter debate around Interest Rates. It looks like we are set for the december rate hike. Yet, trading revenue will be highlighted when the big banks support their earnings, we will be speaking to our correspondent from bloomberg intelligence. He says tech is the one to watch in this round of earnings. That is it for daybreak australia, for the action on daybreak asia next this is bloomberg. Yvonne 7 00 a. M. Here in hong kong come alive from bloombergs asian headquarters. I am yvonne man. This is daybreak asia. The fed minutes show some policymakers one more inflation evidence before they have another rate hike. The markets determine that is dovish. And new highs, the Asian Pacific expected to rise, as well. Betty i am betty liu in new york, it is after 7 00 p. M. Wednesday. President trump an hour ago talking tax, saying the current code is Holding America back. The speech