Reinforce a sobering message. Bloomberg technologys says apples new iphone features equipment that is best in class. We are seeing u. S. Futures under pressure, down. 1 present. 1 . Make a comeback after dropping about 1 as we services readings. It managed to bounce back. Investors bet more said action will be needed. We have the 10 year yield falling for a sixth consecutive session and headed towards 1. 5 . Contact leslie gains with the nasdaq gaining more than 1 . Sophie. Sophie futures are looking mixed as the regional benchmark is set for a third weekly loss. In tokyo, we are watching for reaction to reports that the u. S. Japan trade deal will take effect on january 1. President moon is to meet with the chiefs of four business lobby groups. He will meet with investors to explain the state of the economy. Switching the board to check in on bonds this morning, we have aussie 10 year yield slipping below 90 basis points, and the kiwi 10 year yield is below one percent this morning. Again and gold holding onto a three day gain. Indias Economic Growth under pressure. The r. B. I. Is expected to cut rates and lower its gdp outlook as well. And will have an Inflation Report to consider today. From australia, retail sales along with the rbas Financial Stability review ahead of the speech later this afternoon, and in hong kong, as the city reels from unrest, we will get a gauge on manufacturing sentiment here merge pmi could show us the continued slow down into september. Paul. Paul lets check in on the first word news with jessica summers. Useica hong kong will emergency laws for the first toe in five decades in a bid tackle the increasingly violent democracy protests. Local media say the government atl enact a ban on facemasks public gatherings after a special meeting of the executive Council Later friday. The emergency regulations ordinance was passed by the a dock in 1922 to call a dock strike. U. K. Prime minister Boris Johnson is being given one week by the European Union to revise his brexit plan or face being given a humiliating postponement. The top negotiator, michel barnier, told senior diplomats that johnsons proposal falls well short. The Prime Minister told the house of commons it is up to the European Union to compromise and agree to his deal. If our european neighbors are not willing to reach a deal, we shall have to leave on october 31 without an agreement. And we are ready to do so. But that outcome would be a failure of straight past, which all parties would be held responsible. Jessica indias worsening banking problems are adding a new layer of complexity to the rbis policy planning. His team prepared to cut rates later friday. That will be a fifth cut this year and comes days after policymakers insisted the Banking System is safe and stable. The r. B. I. Imposed withdrawal curbs on one bank and lending restrictions on another. The strong gold price is hitting demand for imports in india. Inbound deliveries of the precious metal plunged for a Third Straight month in september to the lowest monthly level in at least three years. Shipments slumped 86 to 13 point 13. 5 tons. The Lowest Reported monthly figure since january 2016. Global news, 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Paul thanks, jessica. Lets take a look at the Market Action and the countdown to the dogs number later on friday. Thats get over to su keenan. In the s p 500, biggest gain one month. What were the highlights . Su that cheered investors. We saw 3 today drop in the s p earlier this week and there are concerns, will this jobs data possibly be yet another weaker than expected report . Lets go right to the market snapshot. At one the areas of strength as tech lead the rebound. Momentum stocks are losing momentum. We are looking at the bloomberg where you can find these charts on gtv with our library of charts. This is a chart of the withdrawals from the etf, which is called it tracks stocks known for their momentum and people have been pulling out. Lets see where the momentum was in this latest session. You will notice tech heavily on the list of big movers. Nvidia, jcpenney. And thats going to some of the recent ipos just to check how they are doing after that huge selloff last week. Telecom interactive still under pressure, but many of these software and cybersecurity stocks such as cloud strike that took big hits, coming back big. As was the smile direct, one of the most challenged ipos that we have seen so far this year. That had a bit of a bounce. After hours, we are getting news that hewlettpackard is cutting jobs. Bentos underscore some economic weakness and we will probably have more on that. Shery we are continuing to see this rush to save havens. The Key Takeaways in the commodities space . Su lets take a look quickly at the oil futures. You are seeing a continuing losing streak. At the bigger picture, it is the longest drop we have seen really in 10 months and it underscores how this economic demand issue is outstripping concerns about supply. Shery shery su keenan, thank you, with the latest on the markets. Three days of disappointing Economic Data spelling caution for the markets and they do not bode too well for the numbers due friday. Chris lowe is the chief economist for a financial company. Great to have you with us. As we speak, we are seeing Richard Clarida speaking at an event in new york and he has been saying he sees no evidence. F an overheating labor market the fed will act as appropriate to sustain the economy. Our the markets right in banking and more fed action to come bven the banking in aking in more fed action to come . C we have heard from others today including Robert Kaplan who said the fed will do what they need to do, and he is saying that. This is a markets guy after all. He is saying that in the knowledge that there is about a 90 probability priced into the market for the october meeting for a cut, so i think we will get that quarterpoint cut. What i think has been difficult is that it has been pretty clear for some months that the economy needs a bigger jolt than match. 50 basis point cut would be more effective and for that reason, the market has gotten what it wanted or what it expected, rather, but they react with disappointment anyway. Now, it seems that it is turning more into the story of what the market need given that we continue to see this weakness spreading not only for the manufacturing side of things that play into other different sectors, especially surfaces. Chris not as may be the most troubling. The ism Service Index that came out today, as you mentioned, a three year low. Three years ago, what that was was august of 2016 and a series so looking pasto that, you have to go all the way back to the 20082009 recession. Looking at this level, 52. 5, above 50 is growth, so that sounds pretty good, but 52. 5 is where we were at the beginning 20082 thousand nine recession, and it is actually where we were about midway. It took about midway through the session to get there. These levels already consistent with recession. I think it is important to take it seriously, especially since the bulk of the weakness is in the three most important components to business activity, new orders, and employment. Paul and i guess the trend is an important consideration, too. The direction of those numbers may be a little troubling, but through all of those, and this is a point we have been raising the times this week, the consumer remains we told him up strength of the u. S. Economy. But at what point does this reach the consumer as the does this reach the consumer . Chris it is the only domino standing. If they fall, they will be the last domino, but consider, paul, i think the key here is when you are so reliant on this one component, consumer spending, the key is income, and net income of course comes from employment, so we have already lash spendinges s 20. They are not spending. There is no growth at all. But they are still hiring. Factg has slowed 25 in since last year. Is already weakness beginning to develop, and that is one of the reasons i am concerned and i would like to see the fed take this a little more seriously. Up one of theing many charts we have on the bloomberg at the moment, painting a somewhat pessimistic picture. Risk ofsuggesting a contraction according to u. S. Data. Not a done deal just yet, but where are we heading here . It is the greatest thing to fear is fear itself . Its a recession around the corner . Chris here is the good news. The fed has cut rates twice. Those two rate cuts allowed rate cuts around the world and we have seen other Central Banks piling on. That is great. And i think, you know, as you look at that chart, we are at a level consistent with recession but we are also at a level that has been consistent with false signals in the past and those false signals come mostly when things look dire like they do now and the Central Banks step up and respond. Shery is the fed backed against the wall . Even if you have stronger Economic Growth in the u. S. , that would risk having higher yields and then that would hurt the nascent rebounding that we are seeing in housing. Default rates would go up. So at the end of the day, there is no other option than the fed using. Could this even lead to kiwi qe . Chris i dont think so yet but i expect the fed to start growing the Balance Sheet by purchasing bills in order to allow reserves to grow and ease some of the pressure in the repo markets, but at the moment, theres plenty of room, i think, to cut, as long as they do it quickly enough. The irony is that John Williams gave a speech to that effect just a couple of months ago, when the economy is in trouble and you are in a very low rate environment you actually ought to cut more aggressively rather than less. Just to be certain. And it is that quest for certainty, that risk aversion which the fed has talked about since jackson hole. Not this summer, but the summer before. It is not like they do not know what to do. It is just we are waiting for them to actually do it. Shery chris lowe, thank you so much for joining us. Ftn financial chief economist. We will have plenty more to come on daybreak asia. This is bloomberg. Shery this is daybreak asia. I am shery ahn in new york. Paul i am paul allen in sydney. Lets get a little hong kong for what to watch in the markets for the final trading day of the week. Sophie. Sophie amid more signs of slowing Global Growth, the reserve bank of india is in the spotlight. It will deliver a fifth rate cut to bring total using to 150 basis points since february. Bond traders will be on edge. 10 year yield fell for a Third Straight day through thursday. The r. B. I. Likely to lower gdp outlook to less than 6. 5 for 2020 after growth slowed to 5 in the june quarter. That was the weakest reading since march 2013. Leading indicators are not showing much in the way of recovery for indias Economic Growth and the r. B. I. May be under more pressure to ease steps from the government not looking like they are enough. Shery. Shery President Trump is stepping up his push for an investigation of joe biden and his family. First, he called on ukraine. Now, he is turning to another country for help. Pres. Trump china should start an investigation into the bidens. Because what happened to china is just about as what happened with ukraine. Shery our congress editor, anna edgerton, joins us from washington. We are seeing the latest reporting out of cnn as well that the president raised joe biden and maureen in a june call with xi jinping. Stayed quiet on hong kong during the trade pumps. Given the reasoning behind the president s thoughts for bringing china into the mix here . Anna everything for trump is transactional. If he perceives that china does not want International Comments on hong kong and he is trying to strike a deal with china as we speak, he will not bring that up. As far as biden and Elizabeth Warren, i think that is a good sign for Elizabeth Warren that she has risen enough in the polls that she is on the president s radar. You heard the clip of his comments about joe biden and china. That was an example of him saying the client part out loud and being out there, saying we should have this foreign power investigate my domestic political rivals. Shery what implications will this have for the ongoing impeachment process in congress, which was related to the president asking ukraine for help . Anna those comments did not get much reaction from lawmakers on capitol hill. There is a small group of lawmakers in washington right now because congress is in recess. The committees responsible for the inquiry are focused right now on the ukraine allegations. They have the special envoy, former special envoy to ukraine, in to testify for eight hours today so as this goes on, they will bring in other allegations including the president s most recent comments about china. Any reactionhad from republicans, particularly senators, to this these latest developments . Up until now, they have circled the wagons around the president. Anna not from senators and it has been interesting to see how they have hedged their reaction. Senators have mostly criticized democrats, saying they were getting ahead of themselves by starting this partisan impeachment process, but notably, they have not really defended the president or trumps actions, but house republicans, on the other hand, have vigorously defended the echoed hisnd talking points on capitol hill, saying this is a witchhunt, democrats overreaching and trying to go too far for these allegations. Paul anna edgerton, thank you so much for joining us. You can get a roundup of that story and all the others you need to go to get your day going in todays edition of daybreak. Bloomberg subscribers can go to dayb on their terminals and its also available on mobile in the bloomberg anywhere app. You can customize your settings so you only get the news on industries and assets you care about. This is bloomberg. Shery we want to take you to an event happening in new york, where Richard Clarida is speaking at the moment. He has said that the fed may be adding more tools to its toolkit, if needed, in a downturn. Repo going to address the facility at future meetings. We have seen some funding stress in the repo market. Now, mr. Clara to also saying that the fed is very happy that they made the decision to cut back in july and september. We are doing one meeting at a time, although he sees no theence of an overheating labor market and he talked about the global economy, saying it has been slowing some time. Again, Richard Clarida speaking at an event in new york, talking about adding more tools to the fed toolkit if needed in a downturn. Turning now to indonesia, while thehe president says government wants lower rates, the central bank will continue to be independent. He spoke exclusively to john micklethwait. Winter is coming. Yes, right now. Winter is here in the global economy. We want Bank Indonesia to be able to manage Monetary Policy with prudence. I need to remind you that Bank Indonesia is independent. The government will not intervene but i think if rates could fall, it would be good for the real sector, but the government will not intervene. They know when to raise or when to cut the rate. Said fall,e, you fall, fall. Now you are saying, fall a bit. The government wants to the rate to fall but the policy is up two indonesia. Paul the indonesian president , joko widodo, speaking with john micklethwait. Is lower in late trade after itsuncing it will slash workforce as part of a broad restructuring. Tell us more about the scale of these cuts and what is behind them . Hp announced today it would cut between 7000 and 9000 jobs worldwide over the next three years. Has is a company that 55,000 workers, which is a huge base, but it is still a very significant percentage. The reason why is because hp has seen, over recent years, difficulty in its two core markets. There is the personal computer market, which it is most famous for and that is a market in which hp does very well from a market share perspective, but there are very low Profit Margins there. And then it has a printing business. For a long time, that printing business was being helped by selling ink cartridges and toner. That was where the profit margin ones, not in the actual printing margin itself. Recently, that business has been under strain. There are people no longer buying personal computers in the way they have been, so there is a 4 drop in consumer printing from hp, and then people are buying counterfeit think or not as much ink as they used to, and that has been something analysts have been very concerned about. Shery and yet we are seeing the company boosting their dividend and buybacks as well. Richard so the company, ever since meg whitman took over hewlettpackard co. And then split it into two companies, hpe, which makes servers, and whichhich hp inc. , makes pcs, it is returning as much money on value to shareholders as possible, so we have seen the company make pledges like this before. Now, it is a 5 billion buyback and a 10 dividend increase. The company did a 4 billion buyback last year, and it is going to return about 75 or more of its Free Cash Flow to investors next year. Shery thank you so much. Our tech reporter joining us from san francisco. Lets not get a quick check of the latest business flash headlines. Told staff the job parts are coming as soon as this month. People at a Company Meeting told us it would include layoffs that the bosses said would be handled as humanely as possible. Last week, we reported they are considering job cuts that could affect around 2000 positions. The company had 12. 5 thousand employees at the end of june. Paul costco fell in late trade after reporting quarterly profit that fell short of estimate and domestic sales but also slightly missed the high expectations. 5. 2 in the september period, short of projections by consensus metrics. Plenty more to come on daybreak asia. This is bloomberg. Jessica this is daybreak asia. I am jessica summers with the first word headlines. The latest disappointing in the u. S. Is boosting bets on more action from the federal reserve. Investors gamble on two more rate cuts before the end of the year with a halfpoint of additional cuts closer to being fully priced in the futures contract. Traders have already been forecasting more easing after u. S. Manufacturing sank further into contraction. There are more signs of a slowdown in the u. S. Industries have joined manufacturing in something last month, stoking concern that the global slowdown and trade war are hurting the domestic economy. The nonmanufacturing index fell almost four points to 52. 6 in september. That is the lowest since august 2016 and well below the most pessimistic forecast in a bloomberg survey. Continuingrump is his attack on potential election rival joe biden, calling on beijing to investigate him and his son. Without elaborating, the president said what happened in china was about as bad as what happened with ukraine. Another contender, Elizabeth Warren, is calling for the transcript of the trump calls to be publicly released. U. K. Artist banksy has shattered his own auction record. A painting depicting british lawmakers as chimps sold for just over 12 million. Bidding for the piece called devolved parliament surged past the presale estimate of 2 million. His previous Million Dollar sales record hit the headlines when they artwork selfdestructed immediately after the final bid. Global news, 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am jessica summers. This is bloomberg. We are half an hour away from the opens in tokyo and sydney, and seoul also coming back from holiday. Sophie, what are you watching . Sophie keeping an eye on stocks like tokio marine after the company agreed to buy a company. It ensures wealthy families across the u. S. An Electric Company remains on watch. We are keeping an eye on fila korea in seoul. It will spin off its sales unit next year. Officiale number two at the bank of japan expecting global trade tensions to persist for quite some time. At an event in new york, the Deputy Governor told our economics and policy editor, Kathleen Hays, that the boj is closely watching the impact of the u. S. China trade war. We have seen dark clouds. They are gathering their it is really threatening our momentum to reach a 2 target, so we are kind of debating and obsessing. Will trade and other risks affecting the bojs decision when it meets at the end of the month . Meeting us now, the Columbia University and our very own Kathleen Hays is with us. Had, soversation you interesting. They do not want to see this negative rate environment. Kathleen he said it is a very important piece of policy dating that is working, and the question is, are they going to have to do more . Certainly not just yet. I want to turn to you now, because it seemed to me, if i listened to everything he said, clearly, the boj is looking out if they are going to need to add more stimulus. He referred to be dark clouds over the japanese economy. The dark clouds over the japanese economy. Do you think they will have to do so . It depends. I think he mentioned he implied that negative spillovers on chinae slowdowns and the u. S. And japan exports to both countries export channels. Also, the u. S. , for the reserve, cutting the rates, and the dollarill change yen exchange rate, and that would be a financial channel which japan could suffer. Those external shocks are something they are watching very carefully. Kathleen there is a lot of speculation about if the boj will cut its negative rate even further. It is not very negative. But lets listen to something that he said to me when i asked him, are they working . Them . You be in favor of basically, he said he thinks they are. What else he said towards the end was surprising. Lets listen. We would like to reach the target. Thisuld like to get out of negative Interest Rate policy. Now, of course, that does not mean but this much is clear, because want it toant to become a forever. Loweren he does not want for now to become lower forever. With bond yields falling around the world, negative bond yields in many places, what do you think, as an economist . Would it help to cut the negative rate further . Takatoshi yes. The next likely move is to putting the negative Interest Rate more. Getting out of the negative Interest Rate. All the indications, those negative effects on the world to japan intensified, i think the boj will cut the negative Interest Rate. Kathleen how closely is this action linked to the yen . We continue to see stronger and stronger yen given the global uncertainties. Takatoshi that is an irony. The japanese yen and swiss franc are considered to be the safe haven currencies. Againng risk goes up, goes up yen goes up, swiss franc goes up. Boj wants to mitigate. Of course, the boj is not targeting exchange rates. Yen appreciation has bad effect on the rate. One of the responses would be to cut their rates. Shorttermutting the rate, a lot of bond traders, japanese government bonds, they are thinking, on the other part of the equation would be to announce you are going to buy fewer longterm bonds. Maybe after 25 years, we will not by any to steepen the yield curve, because it is hurting banks so much. You are watching the boj closely. You know so many of the players. Do you think there is a possibility they would seriously consider Something Like that in a couple of weeks . Takatoshi the purchase has been declining steadily. It is now below 30 turbine. The bond rate is 20 basis points, so cutting thethe bond s points, purchase does not seem to be helping the steepness of the yield curve, theyhe quantity, how much bind, is a derivative. It is more important to know where the rate is. They are less likely to buy more. More towards zero. Kathleen how much impact will that have a they steepen the yield curve and if that is a paucity move they end up making . That is what people are betting on are hoping to see. Will banks be that much more profitable . Will they lend more money . Takatoshi think profitability is not a game that targets the boj. Financial stability is. They should coordinate to help those financial the Financial Stability to be stored. While one of the solutions is to maintain the slope of the yield curve, so even if you cut the short end you want to keep the banthia. Bond rate. But the consumption tax hike this year is nothing like 2014, so it is much less. We have the reduced rate. The impact should be muted this time. Said the the governor same thing. The boj is watching the data. They are assessing inflation. Assessing Economic Growth. What would they have to see . What has to happen for the boj to take this very big step . Everyone has been waiting so long for stimulus to what would make a difference in three weeks . Takatoshi the defendant weakening of the economy and the inflation rate. Level thatange rate will predict the future. Downturn in inflation rates. Key variables. Shery thanks to Columbia Universitys takatoshi ito, and our very own Kathleen Hays. Plenty more to come on daybreak asia. Do stay with us. This is bloomberg. Shery this is daybreak asia. I am shery ahn in new york. Paul i am paul allen in sydney. Australias Pension Funds are throwing off their reputation as passive investors. They are making environmental, social, and Corporate Governance part of their mantra. Six australian funds recently named as World Leaders in the esg field. Liza mcdonald is here and joins us now from melbourne. When it comes to thinking about esg, i guess a lot of investors deliver our purpose is to deliver to our members. We have been looking at integrating environmental, social, and governance risk into our process. What that is about is really understanding all risks associated with our investment and ensuring that we are mitigating those risks. What we have seen a lot is understanding it from the opportunity lens so when we are looking at our investments, how do we look at opportunities for the long term when it comes to integrating environmental and social governance into our process . Paul how do your returns compare with other funds . Returns, over the long term, do compare. We sit in the top quartile in it isof our returns, so certainly, from our perspective, thinking about the longterm, and the longterm returns to our members. Shery how does your focus change depending on the region, industry, or the investment horizon when looking at esg investing . So we have investments with external fund managers. We have internally managed funds and we do direct investments. We are invested in all markets and all regions and all sectors as well. So depending on those, obviously various regions, timeline of investments, and what the actual underlying investment is, it will determine what types of environmental, social, and governance risks we are looking at. If we are looking at an berastructure asset, we will looking at issues such as the actualsks to investment. We are looking at things like safety and a number of Different Things as well. Also watching with our fund managers, the process we have is to ensure they are integrating esg into their investment process as well, so we look at things such as their policies, their resources, their stewardship, engagement,ing and alignment and transparency. How transparent they are in their process. Have any direct interactions with the Australian Energy and mining sectors . Liza yes, we do. We have been engaging with companies for quite some time. Keyownership has been a pillar in terms of our esg integration. Engage with all sectors and all companies we invest in, but what has been very successful, particularly with some of the energy and mining companies, and our focus has been Climate Change risk and how they are responding to Climate Change risk. Themve been engaging with particularly as part of a collaborative engagement of Climate Action 100, and that is really about asking companies to disclose to investors how they are looking at the longterm environmental risks. Of your moste some recent investments, and where are you looking at the moment . Sir most recently, in terms of some of our direct assets, there have been some infrastructure assets with some land titles in australia. We have invested in retirement villages. We have also invested in Affordable Housing in New South Wales and australia. We continue to look for investments that will deliver longterm returns for our members, both locally, globally. Renewables and anything related to an Energy Transition are a focus from an opportunity perspective, and there is also a focus to build out our Affordable Housing and portfolio as well. First dateper super head of responsible investment, liza mcdonald. Richard says the bank is committed to the Chinese Market and helping it open up. Speaking exclusively to bloomberg, he said goldman has long experience with china and will continue to play a big. A big role. Our focus is making sure we are focused on our chinese cloud base. We have been there for a long period of time. And we have led many of the innovations in the Chinese Market. I think our reputation amongst the chinese corporate community, amongst the Chinese Government community, is very, very strong. We have helped develop the Capital Markets. It is critical for the longterm growth of the chinese economy that they have an efficient financial system, Capital Markets that function, and that will attract foreign capital as well as service for domestic requirements. We want to play our part in that. That is what we are committed to doing. What do you see going on with u. S. China trade . Over,e be in this boiling two steps forwards, for the two stepse forwards, one step backward, for the next decade. Richard the good news is that they are trading. As far as these two economies continue to trade, there will be tensions. These are major blocks. The issues will diverge from time to time. Put yourself in the u. S. s position. What the u. S. Is trying to do is renegotiate its supply lines. If they can get better terms of trade, that is what they are trying to do. China is trying to protect its own interests. The important thing is they continue to trade and they continue to talk. On that basis, i think we can move forward. There will be agreements along the way, but i am sure there is no such thing as a permanent agreement. Youhat kind of steps have taken with abu dhabi following the 1mdb scandal . Richard we continue to have good relationships in abu dhabi and we continue to do business in abu dhabi right across the region. Like to puts, would this behind us and we are obviously working with the relevant authorities around the world to try and reach a suitable resolution to this issue. How close are you to finding a resolution with malaysia . Richard these things have to run their natural course. The work is ongoing and it will happen at the right time. Paul paul that is Goldman Sachs international ceo Richard Gnodde speaking exclusively with francine lacqua. Dont forget our interactive tv function, tv. You can watch us live, catch up on past interviews, and dive into any of the securities or bloomberg functions we talk about. You can become part of the conversation by sending us instant messages during our show. This is for bloomberg subscribers only. You can check it out at tv. This is bloomberg. Shery this is daybreak asia. I am shery ahn in new york. Paul i am paul allen in sydney. As apples latest smartphone comes to the markets, lets look at some of its best features. Maybe more importantly, the price. Bloomberg Technology Editor vlad joins us from tokyo. The iphones camera was already pretty good. Is it now even better . Vlad absolutely. Absolutely. I spent the past couple of weeks Walking Around tokyo, daytime, nighttime, trying to challenge the cameras, and they have been super impressive. It has been a major leap for apple and a big catch up compared to its competition, android. I have been using its smartphone over the past three years because it is that far ahead in terms of camera image quality, especially with its night mode. Now, apple has been falling behind, but has really caught up. I would say it has the best camera in the smartphone business at the moment. Shery is that why apple just sort of veered its strategy and focused . For me, a camera is not a big deal. I mean, may be it has. I would saying that people like myself are actually quite influential. It is always the tech enthusiasts, who will tell people, who advised their friends and family what devices to buy. Fair enough. People in the ios ecosystem look into it but it is still the case that the camera is one of those achievements. Like a super car. He wanted to be the best in the business, and for apple to say we have the best smartphone, you cannot not have the best camera to accomplish that. It has that title. Shery if it is for people like myself and i do not really care that much about the cameras, is there anything else on that iphone 11 pro that i might be looking forward to . Vlad that is a fair enough question pmi would say yes, absolutely. Not a big upgrade. Smartphones are even. Another big upgrade apple has done is with the battery. This is pretty much the longest lasting iphone device. Also, apple has improved the display so it is a little more shatterproof. The design overall is a little bit more waterproof. In terms of durability, in terms of battery and in terms of how long it will last, this is going to be a much more longlasting device. Great display, great camera. Checked all the hardware boxes. Shery i am sold with the battery life. Thank you. Lets get a quick check of the latest business flash headlines. Googles cloud operation is now estimated to be worth 225 billion. Deutsche bank says the unit could report compound annual growth of more than 50 between 2018 and 2022 and reach annual sales of 38 billion by the middle of the next decade. That estimate is nearly twice the market value of ibm, which reported cloud revenue of 19. 2 billion last year. Instagram isks introducing a new mobile app called threads which will allow users to stay in close contact with a small circle of people. The messaging platform is designed to help instagrams one billion users and develop closer connections with chosen contacts. The parent of rival snapshot fell 7 on news of the launch. Tery . 10 big mobile hasnts mobile game attracted millions of users. It generated 2 million in spending. Downloads rival those for mario kart 4, which is seen as one of the most successful mobile game launches of all time. The market open in tokyo, sydney, and seoul comes back online after a holiday. Lets turn to sophie for what to watch. Sophie asia stocks are set for a third weekly loss. I had the yen is trading this morning, set for a weekly rise and it could be pushed below 1060 if the u. S. We are seeing a bearish pattern for the dollaryen and beyond the weather there are further declines for the dollaryen. Paul i am paul allen in sydney. Asias major markets are about to open for trade. Shery i am shery ahn. Sophie i am Sophie Kamaruddin in hong kong. Welcome to daybreak asia. Paul our top stories, u. S. Treasuries and german bunds reinforce a sobering message, go Global Growth the Global Growth is slowing. Data piles pressure on the fed, traders increasingly betting on two or rate cuts before the end of the year. Shery pressure for the r. B. I. , indias worsening banking problems adding a layer of complexity as they meet later friday. In japan, south korea and australia, how are we looking . Sophie seeing lots of continuing after the nikkei 225 lost on thursday, the benchmark off. 1 . The topics seeing a deeper decline. Opix seeing a deeper decline. Trade deals will take effect january 1. Jgbs climbing earlier in the session. The first operation of the month, that is today in the five to 10 year zone. 10 futures are up after a threeday advance. Looking at soul and south korean markets, seeing pressure seoul and south korean markets, the korean won firming up against the dollar. Geopolitics are in play ahead of the u. S. North Korea Nuclear which Nuclear Talks will restart. And they will meet with the chief of this minister is going to london to talk about the state of economy with investors. Stocks in sydney adding. 1 , rebounding after the drop thursday. Yields extending declines are the aussie 10year is down for a fourth straight session. The kiwi 10year yield over the course of this week off 11 basis points, trading below 1 . Paul lets check in on first word news with jessica summers. Reporter thank you. Chinas top trade negotiator flies back to washington next week as the two sides revive talks that have been stalled or months. Details havent been released but they will meet thursday. Negotiations were given a lift announced to buy one million china announced to buy one million tons. They dont expect a breakthrough anytime soon. Very longstanding the u. S. Is getting short on trade and he believes he needs to rectify that area that this point the genies rectify that. I think reversal seems unlikely. Reporter japan has no rejection to u. S. Calls to bring the trade agreement into effect. It follows the signing of the basic deal last week after President Trump and shinzo abe met at the United NationsGeneral Assembly in new york. The foreign minister told nikkei news he expects future talks to focus on abolishing tariffs on autos and auto parts. The u. K. Prime minister Boris Johnson is being given one week by the European Union to revise his brexit plan or face being given a humiliating postponement of the split. Michel barnier told to bless the proposals fall short told diplomats the proposals fall short. It is up to the European Union to compromise, says johnson. Neighborseuropean choose not to show a corresponding willingness to reach a deal, we shall have to without october 31 agreement. And, and we are ready to do so. But that outcome would be a failure of statecraft which all parties would be held responsible. Useie hong kong will emergency laws for the first time in five decades to tackle the violent protests. The government will enact a ban on facemasks at public gatherings after a special meeting of the executive Council Later friday. The emergency regulations ordinance was passed by the british in 1922 to quell a strike. It was helped to control communist riots in 1967. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am jessica summers. This is bloomberg. Paul thank you. U. S. Stocks advanced and investors ramped up thats the fed will cut rates. Ramped up bets the fed will cut rates. Lets bring in our field rentals to look ahead Garfield Reynolds to look ahead. This bad news is good news will it feed through to asian markets . Reporter indications are that it will. Looking more like relief instead of a relief rally. We are not going to get an extension of the severe declines we have had. Asian markets are heading for a down week for a Third Straight week. Unless something happens that will magic that out of existence, it feels about right. We have still got china away. That makes everything phony war sort of feeling. By the same token tonight is u. S. Jobs and there is a powell speech and other fed speakers. Back,s suddenly went perish the thought, powell says we dont need to cut rates or signals that, i suppose the stock market tanks and asian investors who bought stocks today would be cursing the strength of the u. S. Jobs market. That is an interesting menu for Asian Traders to be trying to digest today. They might decide they are better off sticking where they are. Shery very important 24 hours in the u. S. In india we are getting a central bank decision. India markets are already pricing in significant rate cuts. What are you expecting . Garfield the r. B. I. Cant afford to not cut and indeed, especially given the last couple of days and what is going on with the fed expectations, you would be surprised if they didnt again go by more than 25 basis points. They have a tendency to do that. They dont meet quite as often as some of the Central Banks. When they do move, they might feel it is worth moving a little bit extra. A key thing for Indian Markets in particular will be more clarity on the communications front. Last time they cut by 35 and said, we didnt want to cut 50. It left a little bit of confusion in the year, a feeling that the r. B. I. Was hesitating about being as aggressive as it might need to be. Given what has been going on with the shadow banking and banking sectors in india, given the confusion about what is going on with the government and its fiscal policy where it has flipped and flopped between prudence and stimulus, the r. B. I. Probably wants to take a leaf out of their counterpart in australia, who cut as expected and made it clear he was ready to cut again in the not too distant future. A clear dovish communication would go a long way to reassuring Indian Markets that the r. B. I. Has their back. Shery thank you so much for that. You can find garfields commentary on our markets live blog on the bloomberg. You can get a market run down in one click. There is commentary, analysis from expert editors to you can find out what is affecting your investments right now. Has the other Economic Shoe finally dropped for the fed . Days after a key manufacturing gauge tumbled, the same gauge for a much bigger part of the economy, the Services Sector that has suddenly decelerated. Our editor Kathleen Hays is here with the latest. Should we get started with the latest fed speak because we are hearing from the vice chair . Kathleen Richard Clarida still speaking. Say hee chair, you would has been keeping with jay powell, the chair himself. One thing he has that has become a mantra. The u. S. Economy is in a good place. We have seen weakness but we saw a strong labor market, inflation towards the target so it is in good shape. He acknowledged he sees powerful global disinflationary forces. That is how we seem, Central Banks cutting rates around the world because there is concern about the fallout from the trade war. Charlie evans, president of chicago fed, he had an interview earlier. Clear he is not on board with the rate cut but he is openminded on the decision. Lets listen. We have repositioned policy from heading from straightly slightly restrictive to one that is accommodative. The question is how cognitive we need to be. At the moment it is risk management. Ism and risk increases concerns. Dallas fed said earlier they will not increase one number but they are waiting for the latest data extremely carefully. The cleveland fed considered more of a hawk, said if you keep rates low for long, you need financial balances. ,o keep this in global context with the fed does on rates it is important for Central Banks around the world beer the more the fed cuts, the more they open the bank doors for other Central Banks to cut. If they dont move ahead, as many expect now with the idea that something will happen in the october meeting, it makes a difference. We have got a sense of anticipation building, this after another key economic gauge stumbled, not just manufacturing but services. Kathleen services was a bit of a surprise because the fed is resting this week, we can see, maybe we dont need to cut rates, based on manufacturing, but it doesnt seem to have it services. Have hit services. Lets jump into the library and see what happened to the latest numbers. A big deceleration, the turquoise line from about 56. 5 to 52. 6, four points, a big move. Two days ago, the manufacturing gauge from the institute for supply management, purchasing managers survey, 47. 8. You are into contractionary territory and that is what has a lot of people worried. We saw the global bond rally continuing and they say it is spreading. Many people consider it a sobering signal. Paul Kathleen Hays, thank you for joining us. Still to come, reserve bank of india set for another rate cut in the coming hours. We will preview that decision with nomura later in the show. Shery in the search for returns, our guest chooses equities. The manager of the International Equities fund says why they are more interesting than fixed income. This is bloomberg. Shery this is daybreak asia. I am shery ahn. Paul i am paul allen. Dbs group says investors have little choice but to turn to equities. Our next guest agrees saying stocks are far more interesting than bonds even though they deliver lower returns. Stephen glass is a sydneybased fund manager. Thank you for joining us. Equities are far more interesting but are they it has been a wild ride this week. It has been. There is 16 trillion of negative yield in debt out there. It is not a small number. 16 trillion. Consider the u. S. Economy is a 20 trillion economy, it implies it applies to the gdp. Anyone who is buying debt is guaranteed to make a loss. They are behind they are buying something and it doesnt make sense. It seems more appropriate to which areequities cheaper. The s p 500 is on a 2 dividend 1. 6 compared to the 1. 5 ,. Also equities growth. You are going to get cheaper and growth inside. If you are a pension fund it might make sense to invest in equities. Approximately 50 of global funds are in fixed interests and 27 are in equities. There is room to change allocation and it should provide a good support base for equities going forward. Francine you mentioned the enormous pile up paul you mentioned the enormous pile of negative debt. It has pulled back, 14. 5 trillion. There you go. If you want to get defensive, it has been a long time since we have had a major correction on equities markets. Due, buto are we you dont want to be in that big pile . Steven we have been due for some time. This is probably the most unloved bull market in history. One cannot wait for the pullback. You have to look for value and it exists but you have to look outside the most popular crowded trades. If you look at the index, what has driven this has been largecap growth varied a lot of the rest of the market has not performed strongly. Has been asay it bear market but other areas have been neglected. Some include small caps. This is too slow gdp growth and often small caps underperforming in slow gdp growth. Valuations look attractive to us and we have invested in high quality small caps like an italian break company, kar auction services, a u. S. Auctioneer of unused vehicles, and one leader in wine corks. You have to be prepared to go against the grain and not just invest where everyone else is. Shery why havent these small caps caught up with the market . We have talked about the potential for a year with a have underperformed despite the fact we thought they would be insulated from external headwinds like the trade war . Market there is always a fame and story. The one that has been going on ,or the past three odd years low gdp growth, you want to be in companies that can grow by themselves, disruptors. With low gdp growth in general, people preserve prefer to be largecap. Low,Interest Rate so valuation doesnt matter. You have a flood of money going into the largecap growth names and other areas of the market have been neglected. Small caps do suffer if there is less gdp growth but you have to look at the valuation. When we look at Companies Like one of these, which is a leader in breaks for automobiles, it is yield. Ree cash flow it has virtually no debt and it is revenue growing. Its revenue grows. We have gone to extreme levels which are worth considering, notwithstanding there are economic headwinds which are reflected in the share price. Shery i wonder how much the economic slowdown will affect stocks in the future given if you look at this chart on the bloomberg we have seen some scary downsides, but it has always been supported by central bank easing. You have the fed push, but on the top side economic slowdown coming up. Wont that put a ceiling to what the equity markets can actually do . Steven of course it is a concern but it will actually perform better than if there was Economic Growth. I dont disagree with you. I think the low Interest Rate environment will support asset prices and can increase multiples. We think the next stage for government is fiscal stimulus. We have run out of ammunition, and we think there will be fiscal stimulus and that could support gdp. There is always something to be nervous about in markets so you have to look at valuations and beyond the next month or look longterm what is going to perform. Quality always does well in the longterm. Paul if Central Banks reached the end of the line we have Interest Rates around the world getting very close to the euro is that what we are waiting for in terms of catalyst, fiscal stimulus, trade war resolutions . Opinion,n our certainly. There is room to cut Interest Rates further but it is not having much of an impact. It is pushing up asset prices and all of that is mostly doing is making the rich richer. There is concern a lot of population is missing out. That is why we have had issues like yellow vests in france, known in league in italy, trump in the u. S. , brexit. There are a lot of people who rer andting for pooer creatingd it is political turmoil. It will have to be fiscal stimulus. Resolution of the trade war is going to be very tough because it is more than a trade war. About ip and protection. I am not sure it will be resolved anytime soon. We have a mexican standoff which needs external events to resolve. It could be the u. S. Election where if trump lost, it could be part of the way to resolve this. Not making any projections but saying yeah, external factors. Shery we will be watching those votes closely. Plenty more to come on daybreak asia. This is bloomberg. This is bloomberg. Concerns about recessionary forces. People are focusing on demand and not on supply. I am sure the demand will be growing. We need to be ready. Prices bound, we will be able to take a decision to reduce or increase the production. However there are a gloomy picture that have been drawn. The volatility of 20 Million People behind . I guess you will have to stay or watch how things develop. There is no crisis. Events that calls for our meetings and to take decisions. I believe next year will be better. Shery highlights from a Bloomberg Panel as russia early energy weak in moscow with various risks to oil demand while staying the course with their strategy. West texas crude is set for the biggest weekly decline in more than two months and brent is poised for a rough week. Aaron clark joins us from tokyo. We heard from the Energy Ministers, there is not much in terms of news that could boost prices, whether demand concerns or u. S. Supplies. I think there is a couple of factors but it is a wave of bearish sentiment sweeping over energy markets. Wtita bdi fell last fell last week. Brent is about 58 a barrel. The main factors that are driving prices lower is weaker global Economic Data, yesterday, earlier this week, u. S. Payrolls in September Rose less than expected. The august figure was revised down, suggesting possible recession in u. S. Manufacturing. Nonmanufacturing index fell to the lowest since august 2016. Those are strong data points people are looking at that showed a lot of weakness. The other factor like you mentioned is supply. There is a lot of oil going global inventories. U. S. Inventories rose by 3. 1 Million Barrels last week, more than expected. Total inventories in the u. S. Are above the fiveyear average. The factors are why we are seeing weakness in crude prices now. Paul opec plus has been fighting a violent valiant battle but losing. We saw them speak yesterday, the Energy Ministers of saudi arabia and russia, the main drivers in this opec plus group. Risksgnore the concerns, to Global Oil Demand but i think what we are going to be looking at is whether they extend cuts next year. They have this 1. 2 Million Barrels a day production cuts in place. They are scheduled to go through march. People are asking, will they be forced to extend cuts for the next year . Paul erin clark, thank you for joining us. Plenty more to come. This is bloomberg. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of Wireless Network, designed to save you money. Switch and save up to 400 a year on your wireless bill. Plus, get 250 back when you buy an eligible phone. Thats simple. Easy. Awesome. Call, click, or visit a store today. Paul 8 30, away from the open of trading, futures looking flat now. Markets in china still closed as china to liberate the 70th anniversary of the establishment of the prc. I am paul allen. Shery i am shery. We have breaking news out of hong kong, getting the latest 41. 5umbers coming in at for the month of september. Of course we have seen great deceleration in the pmi numbers for july and august as the hong kong protests continued we are seeing it at 41. 5 in september, slightly higher than in previous months of august at 40. 8 but it shows a strong contraction in the last three months as we continue to see this pressure on the hong kong economy including retail sales plunging the most on record. Lets get to first word news with jessica summers. Reporter there are more signs of a slowdown in the u. S. Service industries have joined manufacturing in slumping. The trade war is hurting the domestic economy. The nonmanufacturing index fell four point 252. 6 in september. It is the lowest since august i16 and below the most pessimistic forecast in the bloomberg survey. The latest disappointing data in the u. S. Is boosting bets on more action on the federal reserve. Treasury buying soared as investors looked at rate cuts before the end of the year with a half point of additional cuts closer to being fully priced into futures contracts. Traders had been forecasting more easing after manufacturing sinks into contraction. Indias worsening banking problems adding a new layer of complexity to the r. B. I. Policy planning as the team prepares to cut rates later friday. That would be a fifth cut this year and days after policymakers insisted the Banking System is safe and stable. The r. B. I. Recently proposed withdrawal curbs on one bank and lending restrictions on another. U. K. Artist banksy has shattered his own option record. A painting depicting british lawmakers sold at sothebys for 12 million. Calledding for the peace duval parliament lasted 13 minutes and surged past the presale estimate of 2 million. His previous 1 million sales record hit headlines when the artwork selfdestructed immediately after the final bid. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am jessica summers. This is bloomberg. Paul thank you. Lets check out what is happening with the markets with sophie in hong kong. Lacklusteris a friday. Bonds on the up. The euro back to 21 basis points ahead of the boj first bond buying of the month. Stocks in tokyo are extending losses. The nikkei 225 off, and the sinceat a risk of drop may. The kospi is under pressure as markets reopened, extending the drop from wednesday nearly 2 . Movers in the region, i letting Onward Holdings in tokyo. The stock falling the most in seven months after the japanese apparel retailer cut the full year guidance, seeing a net loss on a global researcher and plan which will see it close 600 stores worldwide. In sydney, Santa Barbara shares are sliding after the gold miner released its consolidated output update for the september quarter. We also have what is going on in bonds which are very key. Look at that space. U. K. Prime minister Boris Johnson is being given one week by the European Union to revise his brexit plan or face a humiliating delay of the split. Lets look at this with our Senior International editor jodie snyder. The premise are seemed defiant, saying the European Union should compromise. What is next . Reporter after being fairly welcoming on his plan, the e. U. Has become critical of it. We are hearing critical voices like it is unworkable and there is no way this could occur, that they need more time. The european parliament, which would have veto power over it, has the most specifics. They have concerns. This stems from the lack of socalled i respect stop in the proposal. Instead what Boris Johnsons plan does is it separates the Northern Ireland you would end up with different customs regimes between Northern Ireland and the Irish Republic and they would not be settled until after brexit took effect. Therefore the e. U. Is saying come back with another plan. We will give you another week. Time is running out for that october 31 deadline which is looming. Parliament is sitting again. What is the situation . Jodi it is interesting that parliament is more welcoming than the e. U. What was interesting before was that theresa may got her proposal went through the e. U. But went into parliament in defeat. It looks like Boris Johnson could be able to get a narrow enough majority to get it through but he has got to get it through the e. U. First. Meanwhile he is saying he is prepared to have a no deal brexit but parliament thinks otherwise. They have passed legislation saying he has to ask for an extension if you cant get the e. U. To approve a deal. Shery is that why the pound continues to rally . Jodi yeah. There is some assumption this will not occur, a no deal frexit will not occur. The Scottish Court will begin hearing the case parliament has brought to try to ensure the legislation they passed requiring that there be an extension or that they seek extension, if they cant get a deal, that it will be respected. Boris johnson saying he intends to leave without a deal if necessary. Parliament saying we dont want that. It will go to court. Schneider, thank you. Getting you across an alert on the terminal at the moment, the u. S. ,advisor for the Peter Navarro is talking and saying that the u. S. Will get a great china deal or no deal at all. He is speaking to foxbusiness network. He said there will not be a small deal with china. He said the u. S. Economy is strong and is urging the house to take up the usmca this month. There will be a great china deal or none at all. Top level negotiators from china including leo feel will be in d. C. In a weeks time. Aery the ceo of aggie. Set currency said a currency war would have a devastating effect on the global economy. War couldthe trade morph into something worse, and then it will be massive and widespread. We are concerned about global trade war which can move in to a currency war because as all Global Companies that trade in different currencies if you start having a war on who can devalue the currency the most, it will be a losing war. We are less concerned about technical issues from one country to another but a currency war will have devastating impact on the global economy, not just on our company but all Global Companies will suffer. It is what i worry about the most. Can you hedge against them . We can put on a revenue line. But not on a revenue line. Seeing, the u. S. Economy is slowing down and you can see he signs in the u. S. We are less concerned about asia but we believe the industry is in better position than most industries because our price point, we have less exposed to a recession. We believe our products will do relatively better than most other products. You struggled getting products in the u. S. Is that fixed . Wherewere in a situation we have more demand for products than we could manufacturer. The Third Quarter will be the last where we have issues. The Fourth Quarter will be a wave and the next year will beam normalized. It is not ideal. Manufacturero you in china . 95 of our products. 90 of our product is in china and 22 of revenues in china. We have a quite good natural hedge position. If the trade war erupts, it will be it will not be a devastation. We dont believe that the is aing goods industry, it strategic industry for the most regions because those industries that have impacted technology, energy it is high r d related industries and we manufacture tshirts. Adidas ceo. This is bloomberg. Paul this is daybreak asia. I am paul allen. Shery the reserve bank of india is said to deliver a fifth straight rate cut. Economists are unsure of the level after the unconventional 35 basis point easing last time. Doing us is the nomura chief economist for india joining us is the number of chief economist for india. Are you pricing in a rate cut . How big would it be . 25 basis points is very much expected. Our own assessment is that the r. B. I. Is likely to deliver more than 25 basis point rate cut. We think we could end up getting 35 to 40 basis point cut. Main reasons for that, the growth has been substantial and as of now, it looks like the thirdquarter growth will be even lever lower. Financial around the shadow Banking System, now the cooperative Banking System. The Financial Stability concerns are very much front and center. Growth and International Call view,sing and in our frontloaded easing. Shery they are seeing uptake in inflation. It should not be an issue. The uptick in inflation is driven by two activities, vegetables, and the second are more protein food items which will sustain. This is happening in the backdrop of declining core inflation which is heading towards and below 4 . The r. B. I. Will need to mark of its inflation forecast given rise ons been a slight food inflation but the aggregate inflation is at the 4 target. When balanced, the letter growth issues actually outweigh any inflation related. Lets talk about the growth concerns. What are your expectations . It is for around 6 growth. Projecting in Downside Risks. The expectation was the june quarter number of 5 was the bottom in this cycle. The highfrequency for july and august, the thirdquarter will end up being lower than even 5 . , belowown assessment r. B. I. And Downside Risk to our number. , one needsng forward to recognize that there has been substantial policy easing but this is happening in a backdrop of Global Environment and the tighter financial conditions unleashed by the shadow banking crisis. The two are offsetting each other. Third quarter should be the bottom but overall it will be weak and the output gap remains negative. Paul in terms of the growth projections, where are they contingent on more easing into 2020 . Rbi has been one of the more aggressive banks in asia. We think we will definitely get to five. A easing, liquidity in the Banking System that is positive. The government a few weeks back announced Corporate Tax cuts. There is a bit of fiscal stimulus. There has been substantial easing. The bias remains for policies but i think we are potentially getting closer to the end of the rate easing cycle between 2020 recovery is going to be on the back of the commutative easing already delivered by the r. B. I. Shery you mentioned Corporate Tax cuts. How much will that help in this investment environment where you have so much uncertainty globally . It will not help as much. It is a mediumterm that the government has spent, but in terms of the shortterm growth multiplier it will be quite limited because the companies are more likely to use the profitability, the extra profit to save and the decision is a function of sustainable demand where capacity is where the Balance Sheet exists and none of the boxes are actually ticked right now. There are some companies who have passed on the Corporate Tax cut to consumers in the form of Lower Consumer prices. So at best to appoint one or two percentage points, but i dont think we should back on Corporate Tax cuts as a reason to be positive on growth. Cutting the Corporate Tax rate is going to open up a bit of a revenue whole for the government. The budget deficit, likely to widen. You expect to see more debt issuance . Aroundaps around the december. There is a fiscal hole relative to the budget target and this is not just because of the at nominalax cuts growth. This will be substantially lower than what the government is budgeting which means lower tax buoyancy and the stimulus and weaker growth, a reason why there is a fiscal gap. The government is trying to rely more on asset sales, more privatization, dividends time to plug the hole, but i think there debtbe some additional issuance is but more likely to be announced around december. Numeral chief economist japan, thank ex you. You can get a roundup of stories to get your day going in todays edition of daybreak. Go to dayb on the terminal. It is available on the mobile in the bloomberg anywhere app. Customize settings so you only get news on industries and assets you care about. This is bloomberg. Paul this is daybreak asia. I am paul allen. Shery i am shery yen. Hong kongs purchasing Managers Index climbed from a month earlier but it was still substantially lower than a year ago as protests continued around the city. Lets look closer at the numbers with sophie in hong kong, joined by Bloomberg News across asia cross assets reporter. Manufacturing sentiment within contractionary territory despite the uptick we saw. Looking at the numbers, give us a broader context. 41. 5, not that great. Seeing the numbers go higher is pleasant but 41. 5 is still weak given 50 is the level we were talking about expansion or contraction. One thing to consider is the factor here that the pmi numbers we are talking about is an overall private sector number. It encompasses private business across hong kong. Talking to economists, we see it every weekend, the protest, the shocked it is not good for business. Is arguments for economists the trade were between u. S. And china is also a huge factor in hong kongs economy. We did see a little bit more optimism that we might get a deal. We have talks scheduled in october. We saw the stock market bumping up here as well. We could have explanation that is why we saw Better Business sentiment. Business confidence still under pressure and we are anticipating more stimulus measures from the government. More. Lam announced aboutn we are talking what the government can do, they are stuck between a rock and a hard place. The political issues with the protests, that is one set of issues that are complicated. When you talk about the economic side of it it is tricky because a lot of the factors, talking about the trade war, they are external to hong kong. We heard from the financial secretary the last set of measures he introduced, the spending was 2 billion u. S. Which is not a huge amount. If they bring in temporary sweeteners, the expectation is it is fairly short and will not have Lasting Impact on boosting the economy. Will be gauging the reaction when hong kong opens. Paul lets get a quick check of the business flash headlines. Costco fell after reporting a profit which fell short of estimates. Domestic sales also the low expectations. Inestore sales rose 5. 2 september, short of projections by consensus metrics. One boost for investors, they growth in membership fee revenue and renewal rates which generate all of their profit. Talking of Key Technology used in the future porsche and audi models. This is part of an industry effort to spread development costs. The vw identified companies that are interested in adopting the brat the Battery Technology which will develop electric cars from 2021. Paul i tencent mobile game is enjoying a blockbuster start. This is the first day of its release. Analysts say it has generated a quick 2 million in player spending. Downloads rivaling mario kart tour which is one of the most successful game launches of all time. Facebook introducing a no new mobile app which allows users to stay in close contact with a small circle of people. Sharing videos and status updates automatically. The messaging platform is designed to help instagrams one billion users develop closer connections with joseph contacts. Fell asnts of snapchat much as 7 on news of the launch. Paul apple is reviewing a decision to reject a Hong Kong App to track Police Activity in the midst of the democracy protests. Version which app helps users avoid potentially dangerous areas. Apple says it was rejected from the store because it facilitates, enables and encourages activity that is not legal. Before we go to markets asia, we are seeing the japanese nikkei under pressure, down from down. 2 . The japanese yen shows strength. The japanese finance minister not seeing major trouble related the tax hikef but they are watching overseas conditions. Coming back from holiday down. 3 and we have the asx 200 up. 2 with health care and tech leaving. That is it from daybreak asia. Market coverage continues with the start coming back from holiday down of trade in hong k. Shery that is it for us. Stand by for Bloomberg Markets. This is bloomberg. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Call, click, or visit a store today. Welcome to Bloomberg Markets china open. Im selina wang. Ivanka we are counting down the opening trade in hong kong yvonne bubble growth is stalling and inflation hopes are fading fast. Selena traders are increasing betting on to more rate cuts before the end of the year. And President Trump steps up his attack on joe biden. Hes now calling on china to open an investigation. Biden said it is totally without