This is daybreak australia. We are still an hour away from the start of asias major market. Betty a brandnew week, but it will be a short week. It is just after 5 00 p. M. In new york. The thanksgiving holiday break already. Last week we saw a second decline in u. S. Stock. We ended on a red note. The s p and dow off by about one or two points as well. Decline, twoek of an a row since august. It continues to dog investors. Where is the fed going to go next year . Beheadedl tax reform and will we get it done by the end of this year . These Research Notes coming through last week. You have this market, nothing seems to bother it. You have something skittish starting to build, it seems like every headline might comes to that tax reform seems to be hurting the markets as well. We get this brandnew trading week started, lets take a look at new zealand where trading is underway. At about 1 10 of 1 . Australia, coupled members speaking early this morning about financial stability. Cindy futures with a little bit of a downside. Low lowest since june. With somes dropping concern over the political instability that may be building. You caught up with first word news. Good morning. Zimbabwe remains in a state of confusion after the President National address about resigning. He is expected to quit after meeting leaders to give up our last week. He and his wife were both fired from the party on sunday, four days after the military put them under house arrest. Is showing signs of stabilizing. Rose. That indicates china is having some upset and prices without forcing a sharp deceleration. Says theyxi jinping are for lifting, not speculation. Exploring the sale of its Nuclear Related assets to avoid being delisted from the stock exchange. The company is selling its holding against westinghouse. Toshiba will significantly reduce resources. Japan says it still has faint a partnership. The tpp would have covered 12 nations that account for 40 percent of the global economy. The remaining 11 countries are pushing ahead. There is always a chance the u. S. Will return. Frankly, the possibility of having the u. S. Back is slim, but japan would like to make an effort to persuade the u. S. To return. I believe the fact that 20 items that are still on hold will encourage the u. S. To come back to negotiations. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Promising to make some headlines this week. Spotlight is back on central banks. Kathleen hays is here with a preview. Lets start with the fed. There are a couple interesting points that we have to watch from the Federal Reserve this week. The minutes from the november meeting will be out on wednesday. No rate change was made. People want to see how predisposed the fed would be to raise the key rate again in december and maybe keep going next year. Lets take a look on the bloomberg. Of one the configuration more rate hike in december. Three rate hikes in 2018. Goldman sachs within the last couple of days putting out its rate hikes next year. Inflation picking up to 1. 8 1. 8 . It will be interesting to see what happens. The yield curve has been sending ominous signals. See is how tight the yield curve is right now, it is the tightest in 10 years. It started flattening, getting tight and tight, and next thing we knew, we were in a crisis. Get what happened since the fed started raising rates again. It could be a sign a recession is coming, no one is sure. When janet yellen sits down for a conversation on tuesday night at nyu in new york city, we want to see if she gets asked questions about that. Our bloomberg economists team is eager to see if she makes any hence about whether she might about if she will stay on after her term has expired. Urging the u. K. To be ready for a hard brexit. It will be interesting to see if any of these Big Questions will be addressed. Brexit will be big on two fronts. Tell us what we are expecting. Kathleen an interview with the bbc on sunday. Thathammond has signaled the u. K. Is getting ready to offer some kind of proposal to the eu on what they are going to pay the European Union tax it. They do not want to pay too much. They want to move on to trade. That is a big move and concession. On friday, donald tusk told theresa may they need to know something by early december at the latest. The chief negotiator on brexit with the u. K. Will be briefing eu ministers. The ecb is going to be addressing the eu parliament. Is the u. K. Trade secretary also speaking this week. Mr. Hammond is going to present the budget to parliament. One of the Big Questions pushed there is the debate about which inflation measure the bank of england should be using right now. In the budget, they can change this election. Herces told Bloomberg News is not going to do anything like that. He does not want to rock the boat. Haidi it is a fairly light week. There are a couple reports that are quite key. Japan and korea in particular. We will get the trade data in less than an hour. We will be dissecting that for everybody. Japans october trade surplus are seen shrinking a little bit. And Commodity Prices making that import bill higher. Exports ares goal strong. Strong. Till i am still interested in korea. That is not until tomorrow. Their exports for the first 20 days will be out. If we look into my next chart, toch is right here, it is underscore south koreas dependence on exports to grow the gdp. The is a lot of volatility in exports, but gdp has been growing. Growth rate of about 6. 9 yearoveryear. Stronger growth in the Third Quarter. They will be watching very closely to see how the exports come out if they support this view. The indications that they are ready to hike rates again is something to watch closely. We will get the minutes of the last meeting this week. Haidi no rest for the wicked. Kathleen hays with a look at what is coming this week. We will take a look at how amazons imminent arrival in australia is leading to optimistic tales predictions. Betty saudi arabia anticorruption crackdown may cost as much as 100 billion. The latest on that and what it means for markets, next. This is bloomberg. Haidi im haidi lun in sydney. Betty you are watching daybreak australia. Be ableies say they may to recover up to 100 billion from people detained in the anticorruption crackdown. Suspects are being offered deals to avoid going to court. Lets discuss all of this and the impact from saudi arabia from this crackdown we saw last month. Usaging partner gary joining backandforthes to the middle east. You have done deals there and you know the kingdom very well. What did you make of this news when you heard about the crackdown . Fascinating. It is not obvious. There are a lot of countries known for corruption. The kingdom is not one of them. It took everybody by surprise. Worth getting behind the headline of this, to think about what is really going on. Betty you dont think perhaps not as widespread in other countries, but the reaction that we had heard from people on the streets were quite pleased by this crackdown. Arabia hase in saudi never been corruption, as much between theng royals and everyone else. Arabia is theudi most populous country in the persian gulf, between egypt and saudi arabia. There are Something Like 100 million people. Poverty inlot of saudi arabia. There is a lot of rigidity. It is not modern. There is an international crowd here. It is a very closed system there. Sure, there is corruption, but that ther issue is have, have so much. This is the beginning of a new chapter for the country. It is going slowly. I am curious. As a foreign investor yourself, did you look at Something Like what is happening in saudi arabia and say we might want to rethink the country or not . We looked at the kingdom several times in the past. The attraction has come through different events. One event that was significant was the establishment of the university of science and ashnology, which was viewed the beginning of a new era. Reaction toit in the establishment of the shared campus. There was a movement to bringing youth and a more international crowd in students and instructors and staff. It never really went anywhere. There was a feeling that it would be Technology Parks and others. It never really happened. We looked at housing in the kingdom. It never really did anything. Housing, because of the rigidity in the country, the housing tends to be either super luxury for a handful of people were very gated, secure housing, neither of which are growth ideas. Haidi it is fascinating when you talk about this wealth disparity because so many comparisons have been made over the last week. The crackdown in saudi arabia and what is taking place in china. It i find fascinating is dual perceptions. A lot of people say this is destabilizing and introduces. Npredictability other people saying this is a cleanup that is needed. This is actually a positive when it comes to growth and development. I am curious where you sit on that spectrum. There has been so little that has taken place in that country. The ipo has been rumored forever. It is moving slowly. We know because of the disclosures required. It is difficult to do that. Particularly for a national oil into t. Entity. If it happens, in retrospect, it can be looked at as a bit of probation foundation for that. A decision to either consolidate power or move in the direction , asore consensual activity far as leadership in the country goes. Haidi i think it is fascinating. It is 8124 on your bloomberg. We are seeing this day correlation when it comes to oil prices in saudi stocks and prices. They tend to be closely correlated when it comes to how the oil is doing. Investors are getting really freaked out by these headlines. Eing made the detentions and corruption crackdown. Do you think this is a short time shortterm blip . This are not an expert in particular sector in this situation. I think it is a blitz and will get back into a zone. Low Energy Prices are continuing. This is a country that for a higherriod of time had Energy Prices. That has caused so much of the stress over the last 10 plus years. Betty speaking of stress, there is a lot of gray hair in washington over tax reform. Make of the tax reform bill . Does it have any impact at all on how you are doing business . Strangely, what is happening in the u. S. Has a little bit of a corollary and saudi arabia in saudi arabia. People have been living this unreal world. I am referring to the royals now. The politicians now in the United States are viewing tax such ain such through symbolic lens. There is a cost associated for tax cuts. To the extent that there will not be some massive addition to the deficit. Someone is losing. Not everyone can win. It is impossible. No one wants to focus on that professionala politician standpoint betty you are saying they are living in unreality right now. Does that make you less or about even, more or less confident in the economies that matter to . I think the economy will bump along. U. S. Not really view the in the context of the developed world growing much. Is a code that we do not see much happening. Interest rates in the last segment talked about flattening yield curves. No inflation. No wage growth. Nothing really happening. To the extent that immigration is threatened, growth has actually gone down. Betty there is certainly going to be more opportunities elsewhere. Thank you so much. Great to see you. We have much more ahead. More guests joining us exclusively on bloomberg. Former italian Prime Minister will be on at 8 30 this evening sydney time. We will have john chambers. You do not want to miss that interview either. This is bloomberg. Betty good morning, im betty liu and new york. In new york. Haidi you are watching daybreak australia. Lawmakers with legislation that would toughen regulatory scrutiny on minority stakes. We have more from San Francisco. Haslinda this would significantly increase the oversight on Foreign Investment in the u. S. , also which reviews foreign takeovers for National Security concerns. This committee generally concerns acquisitions, but under this new bill, even small investments could trigger review, especially in the most innovative and growing areas like artificial intelligence, robotics, and drones. This legislation comes from growing concern among lawmakers and the department of defense that investments could lead to the transfer of technologies to the chinese military. They are made it very clear that they want to become the leader of the in artificial intelligence. They want to collaborate with each other. Critics are concerned that this will actually have the opposite of the intended effect. Chinese investment has flooded the u. S. Market in emerging tech and helped fuel innovation. It will make it much more difficult for startups to get investment and make it harder for u. S. Investors to exit their investment. This also extends the review to 120 days. That will make it very difficult for earlystage startup deals to close. This bill may not be voted on for several months, but it is expected that the immersion of this deal has significant bipartisan support. Bloomberg news, San Francisco. A quick check of the latest business had lines. Apple says its new home pod smart speakers will not be ready for the Holiday Shopping season after all. Hardwarees the next project and was scheduled to ship in december. Last year, apples Wireless Headphones were held back from an october launch until december. Haidi u. K. Online fashion retailer has reached a historic spencer forpassing the first time. Capitalization to 4. 9 billion pounds. Hat nudged ahead it is a far cry from the 18 billion pounds the company was worth in 1997. Chinas grand plan to make the worlds most powerful tech pass. It will take a look live next. This is bloomberg. It is 9 30 in sydney, where markets open in about 30 minutes. A littlehowing positivity even though we saw about a quarter of 1 gain on the friday session. A little bit lower now. I am haidi lun in sydney. Betty and i am betty lou in new york. You are watching daybreak australia. After those declines on friday, asia a little bit lower. Extra to the first word news. Forinda Goldman Sachs sees fed rate hike next year. The bank says the u. S. Economy is heading into 2018 with strong momentum that is likely to boost wages and lift inflation. Goldman has lifted its outlook next year to 2. 5 . Says it is not opposed to removing the Obamacare Mandate repeals from the Senate Tax Proposal if it would help it past beard it pass. The treasury secretary and white house alleged that the director the sundayll toured talk shows. The government will make a socalled offer on the brexit deal before a key summit next year. The deadlock in negotiations. Linends warrants are in with the david davis from last week. China says it is cautiously diplomatica solution can be found to stop north Korea Developing Nuclear weapons. The ambassador said his government has done everything it can do to hold the program and the reason answer can be found if all parties engage. Envoy to xi sent an north korea last week just days after discussing north korea with president trump. Singapores Prime Minister says growth could top 3 this year. Addressing his party convention, he said singapore is benefiting from the growing World Economy but must upgrade domestically to sustain growth. Expects to expand social services and health care. Not a matters is of whether but when viewed global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am haslinda amin. This is bloomberg. Haidi thanks so much for that. Lets look at the markets feared dead markets. The s p ending another week of decline with concerns over the pace and tax concerns. The kiwi dollar trading at 68. 11. We are looking a little bit weaker after finishing fridays a session high than about one quarter of 1 . The aussie dollar seen downward pressure into the end of last week. We saw it falling to the lowest in about five months. If you want to look at gauges sentiment, it was falling against the backdrop of the weaker u. S. Dollar. Lets get more on what we should be watching us trading gets underway for this week in asia, adam has look ahead. Asian equities have had a huge year. What is the technicals telling us . Adam lets dive into the bloomberg and see what it is telling us. Call a what analysts double top. We have a high back in 2007, and then where we are now. We are reaching levels we have not had for 10 years. Technically, that puts a lot of pressure on the ability for equities to push higher. You have seen that in recent ofks in asia, that lack buying, just wanting to follow through and push it up high. I think it this point, it is a little tricky given we dont have any huge Earnings Releases or Economic Data coming out this. Eek to move the dial the thanksgiving holiday, we will get trading a little choppy on the back end of the week with the u. S. Markets closed. Place fora tricky asian equities. As you mentioned, they have had such a stellar year. The china related markets in tech sector have done very well. People are dialing back risk a little bit in taking some money off the table. Betty volatility sees the risk off. Volatility rising again in japan. Is it a sign things will get more choppy there . Back if you cast your mind 10 days or so when we first started to see these wobbles in Global Equity markets, was actually the japanese market that moved first on that thursday afternoon when we were up quite a bit and had a significant selloff. Every day premuch sick pretty much subsequent to that, we have seen the neck a, a good proxy for volatility. Lets look on the chart here. 8002. This shows you how volatility remains elevated in japan. You see this bike have highlighted with the yellow oval. It shows relative to where we have been in the early part of the year, apart from the spike in march. Level,still at elevated and we are seeing a bit of pressure on japanese stocks when we open today. Currency moves have been less of a factor playing into japanese stocks recently. Foreigners have started to exit the market, as well. Particular notable and it might limit further gains for equities. Betty thank you so much. Adam haigh, our Global Markets editor. To chinas property sector. Home prices rising in more cities in october versus at the month prior, snapping a threemonth fall according to the National Bureau of statistics. Beijing has been trying to avoid a hard landing and it seems to have achieved that for now. Ramy inocencio has more insight and a chart. Firsttake a look at my chart, 76. The good news, prices are stabilizing. They are at high not seen in the past three months or so. Prices rising in 50 of the 70 cities tracked. Levelould put us at this in september, that was 44. This has been on a current downtrend over the past 34 months. The last time you saw 44 was not since two years ago, november of 2015. We are seeing what some might say a surprise rebound in home sector. In terms of other data, 14 cities so home prices fall and six were unchanged. Rosell, new home prices about 5. 5 percent in october, relative to the 6. 5 rise in september. 4898 the chart here. Not all growth is created equal. White line, for steel first tier cities. The purple line is third tier cities. You can see the shallowest line there. First year mixed results. 02 percentminus month on month. We see this retrospectively with what home sales are doing. This is 8087. We were expecting this to fall, but we are also seeing this in contrast to the prices rising. It is something we have to see whether this is something volatility wise or more of a trend. These are the trust with what you need to know right now. Back to you. Haidi thank you so much. A look at the rate is property stability, i suppose that is the theme, and what policymakers have been wanting. Turning to text, this is part of the great two tech, this is part of the great rebalancing. San francisco has china has San Francisco on his side to turn a city into one of the worlds most powerful tech hubs. Entrepreneurs have been speaking in china. It is hugely ambitious. Typically for china, yes, hugely ambitious. We spent a week here speaking to executives, not just of colonies Like Airlines and automakers, startups, people working on artificial intelligence, drums, drones, to get a sense of what they feel about the project. There is a lot of enthusiasm and optimism. There are a lot of questions about the project, what comes first and how are they going to build this out . Overall, the consensus from the executives is a lot of optimism. The ceo of ais company that really represents in many ways what is going on in terms of the shift from but went manufacturing to highend. Of whiteup makes a lot goods, the largest in the world. Upstream ining terms of manufacturing. He said he was usually optimistic. Take a listen. Without a doubt, the greater bay area plan is of great magnificent spirit it is very much consistent with current industrial development. This region has stood on a solid foundation. It has the manufacturing ever structure and skill, manufacturing capital and talent. Not to mention its complementry it is consummately with other cities. Media,cording to state we are to see gdp growth in this area to about 4. 6 trillion by 2030. That is one estimate. A lot of it will be down to an structure building. A lot of highspeed Rail Networks are being built in the region. You have a bridge linking hong kong to the province. Betty who is likely to benefit from all of this . Analysts are pointing to Property Developers well outm i do pretty of this. Numbercrunching, they say house prices could double in the next eight years. Thats even with the price curbs we have seen put in place. A desire by the Big Companies here to attract the best talent when it comes to things Like Technology and innovation. We spoke to the president of one of these of the companies, and an automaker, they are hoping to sell some of their cars in the u. S. Market by 2019. He said it talent and capital were key in terms of what they could attract. Take a listen. Opportunity golden for our automobile group. Under this National Strategy and government support, more and more capital, talent and advanced technologies will converge in this region, which is key to integrate all kinds of resources from across the globe to further improve our products, brand and competitive edge. Tom given the size and scale of this project, there are risks along the road. The policymakers in beijing are trying to push ahead with this, delays and implementation arent possible risk. Also competition between different cities. They are hugely competitive. Whether or not they can get the governments to Work Together and coordinate to the skill they want them to is a key question Going Forward. Betty thank you so much, tom. Our china correspondent. Arrival inw amazons australia could shake up traditional retailers. That has been a longstanding story in australia. This is bloomberg. The earnings parade continues this week on wall street with a round of Major Tech Companies set to report at the end of this week. It also kicks off the u. S. Holiday shopping season. Black friday putting a big focus on retailers. Lets start with the earnings. The focus is on tax because weve seen underlying strength and text, a lot of that is translating from strong earnings reports. Big Liquor Company and dollar tree are among stocks in the spotlight. Lets start with medtronic. A strong yeartodate stock performance, pretty decent. They will overcome hurricane marias impact. The maker of medical devices is expected to face growing competition. They are adjusting downward because hurricane maria, which better puerto rico, is expected to have a 55 million impact on their sales. A business and Financial Software company, their First Quarter is typically the lowest revenue quarter because the bulk of the sales are made in the second and Third Quarter coinciding with tax filing. They continue to expand quickbooks. Dollar tree, they have legal issues, they will refocus because they are a retailer and we are entering the holiday sales season. Thursday, the thanksgiving holiday, blends into friday, black friday, and thats when Holiday Shopping takes place. The expectation is fedex and ups will have a banner year because of shipping. We will also take a look at a lot of retailers that have an Online Presence including target and a lot of other companies. The question is, can they come out from under the domination of amazon . Back to you. Think you so much. High expectations for amazon here in australia, as well. The companys arrival down under has led to optimism. Take a look at the numbers. To be fair, we are coming off a low base when it comes to ecommerce and australia. Are, just 4. 4 back in september of total retail sales conducted online, compared to more than 14 in china and more than 15 in britain. Sees Online Retail sales rising to about 10 of the total spent within two years. Will encourageit brickandmortar retailers to build online businesses and start leveraging off of amazon services. Retailers areia split on whether amazon is a good thing or the apocalypse there for retail. Paul that is pretty much down the line. We had a survey, the annual christmas survey, they asked 52 Senior Executives and management at australias leading retailers about what they thought about the arrival of amazon. 33 expect a negative percent, 39 think it will be positive. Create greater channels to the market, but typically it ,eems to be smaller mediumsized ones. The larger retailers are worried. Betty thank you so much. We will have much more ahead on daybreak australia. This is bloomberg. Betty toshiba planning to raise billion to explore Nuclear Related assets to avoid being delisted from the tokyo stock exchange. They are raising more money. Lets bring in our asian managing editor for technology. Peter, what kind of pressure is toshiba facing over the delisting . Peter toshiba has been in trouble for a while because of its Nuclear Assets in the u. S. This is the westinghouse business it bought a few years back. They had a very troubled foray into this business, multibilliondollar losses. Theyve had to raise capital to avoid the delisting from the tokyo stock exchange. The shareholders equity is negative right now. They need to make it back in a positive territory by the end of their fiscal year in this upcoming march. They are in the process of selling their chips business. They have a tentative agreement to do that but now they are saying the Regulatory Approvals date,ke longer than that so they want to raise capital separately from that and they are going through the process of writing about 5. 5 billion to fill the whole hole. Haidi has anyone expressed interest in westinghouse . As part of the announcement they said they wanted to sell their assets relating to westinghouse. Westinghouse filed for bankruptcy, they are mostly liabilities in the business, and toshiba has agreed to pay for some of the liabilities. Or maybe some valley some value in the business Going Forward so they might sell some of the many liabilities are assets depending on how it plays out in the u. S. The utilities that have agreed to buy the Nuclear Reactors from tissue have been in negotiations with the dust from toshiba have been in negotiations with the company. If not sure how that will play out, but there is some uncertainty about westinghouse. The chips, where we at with that . Peter it goes on and on. Agreement to sell it to a Consortium Led by bank capital, a private equity firm, a big group, apple and dell are in the group. The sale,agreed on they are proceeding with the negotiation, they need to go through Due Diligence and they need Regulatory Approval from governments around the world. That is the process they say they are concerned about at this point. There is another outstanding issue, which is toshibas venture partner in the chip business has taken them to arbitration over the deal. Western digital says it has a say in whoever buys the business. Courts will determine that question. Haidi thank you so much for that, our asian managing editor for tech coming from tokyo. Saying japan tokyo tobacco will replace its ceo in march. An attempt to end 13 straight month of falling domestic sales. If been hit by the rise of ecigarettes taking customers away. 60 s remain strong, about of revenue last year. They went on a spending spree across southeast asia. Betty honda recalling a hundred thousand odyssey minivans in the u. S. After reports of faulty passenger seats leading to entry. The cars are built between 2011 and this year. The recall comes to months after for hundred to pay 80 4 million in federal claims tied to potentially lethal airbags. Millionptember, 20 vehicles still have not been fixed tied to the airbags. Haidi a new production plant will have to be built in the u. S. , if sales continue to grow as expected for one company. They will need a new facility, as existing plans in the u. S. Are working at capacity. They have the most productive plant in north america. There also the top automaker in mexico. Frances Largest Hedge Fund is plenty to double down on assets in australia with plans to seek investment deals across the retirement market. Thefinance reporter has story. Around the world, they want a slice of the pension pot of money we have over here. Context,ut it into australias population is smaller than tokyos yet it has the fourthlargest pension pull in the world. Hedge funds are coming down here to win a slice of the action. Betty what are they are hiring plans . To the have a longterm goals to build their business for the longterm and australia . Capital has been her about 10 years. They are setting up for next year. Theyre looking to hire people over the next five years. As you say, a flock of hedge funds are wanting to capitalize on this. Is it easy money . Ruth its not as easy as it looks. Funds hereensions that refuse to touch hedge funds because they perceive them to be too risky. Fund managers need to work really hard in order to win those mandates. But, the pension pot is growing rapidly. The stock market and bond market sizes here are not keeping up. Betty is this trend of investing offshore into alternative assets set to continue . Ruth absolutely. The size of the stock market today is actually smaller than it was 10 years ago. At the same time, pension assets have more than doubled in size, that tells a compelling story about the need to cap offshore assets and alternative assets. Wellnative funds here are aware fed and they would need to increasingly invest offshore. Haidi thank you so much for that. Our Corporate Finance reporter here in sydney with the push by overseas hedge funds to get into the pension market. Before we go, headlines crossing the bloomberg. Push to reach a four Party Coalition agreement has collapsed. Getting more information on that in the next hour. Been broken off with merkel to create the agreement. Thats according to comments made reporters in berlin, saying there is no aces for a poor for a four Party Coalition. We look at those developments in the next hour. That is about it for daybreak up inlia, more coming daybreak asia. This is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. 7 00 in hong kong. I am yvonne mann, welcome to daybreak asia. Asiapacific markets are set to extend last weeks losses, ringing a stellar run to a close. China has ambitions for worldclass tech colossus. Weeks him the challenge to silicon valley. Liu in new betty york, it is just past 6 00 p. M. On a sunday evening. Neare hike is seen as a certainty next month. Goldman sachs says we should expect for more next year. And japan retains hopes to bring the u. S. Back to the tpp