Transcripts For BLOOMBERG Bloomberg Daybreak Australia 20240713

House speaker blocked his bid for a monday vote. Its election day in canada. Prime minister Justin Trudeau looks to retain power but loses his parliamentary majority. Kathleen later on, Bloomberg Technology global link. We will discuss the bailout plan for wework as softbank is said to be taking control. We are taking a look at how u. S. Stocks ended today. A big day for the s p 500. A gain seven times of 1 . It gained to 7 10 of 1 . Over 3000. Importantly, it is getting close to its alltime high in july at 3025. 3006 on the s p 500. Nasdaq gaining 9 10 of 1 . Apple hit a new record. Pharmaceutical surging as they reach opioid settlements for thousands of complaint ands. The Dow Jones Industrial average lagging the other gains. 2 10 of 1 . 26,827. You. Can blame boeing. The second day you can blame boeing. The second day. When you stand back, and a lot of positive impetus today as more signs emerge that a trade war, even if it is a phase one deal which can be a sign between President Trump and president xi next month in jail he is having a positive impact. We have heavyweights like mcdonalds and caterpillar. They will put their optimism to the step to the test. Sophie we are seeing some green shoots. Japanese markets are closed as the country marks the emperor. City stocks are sent for gains. More production updates on deck from the likes of whitehaven, oil search. Keeping an eye on bhp as the mind could be disrupted by unrest in chile which is being rocked by four days of rioting. Switching the board to check in on aussie bonds. Yields continuing to backup. Holding are yuan, threeday advance on trade lines. Trading the 707 handle against the greenback. The yen, staying in the mid 108 area. The loonies staying above 130 this morning. Bypassing election risk in favor of strong technicals. Haidi thank you. Sophie kamaruddin in hong kong. Lets get you to first word news. Canadian Prime Minister Justin Trudeau is set to retain private power. Polls suggest he will lose his parliamentary majority forcing him to rely on a leftleaning party to survive a second term. His popularity has been hobbled by a series of scandals. If he loses the election, he will become the fifth Prime Minister in canadas history to be ousted after one term. Israeli Prime Minister Benjamin Netanyahu has failed in his bid to form a new correlation, forcing him to return the mandate to do so back to the countrys president. The president plans to pass the right to Opposition Leader and former military chief, benny gantz who was expected to face an equally difficult task. Two inconclusive elections have left israel in a political deadlock. Indonesian president has asked his key political rival and the founder of the countrys biggest startup to join his revamped cabinet. Ministerial posts were offered to the president s defeated challenger in the last two elections and the 35yearold cofounder of ridehailing service gojek. The cabinet is due to be named wednesday. The United Nations condemned violence in chile and ordered all sectors of society to reduce that. Police used tear gas on monday to break up protests on what of santiagos main streets. Many people lined up in the supermarkets. Global news, 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im rithika group data. This is bloomberg. Isdi President Trump stoking trade opposition raising expectations then an agreement with the china could be signed and is month in july lets cross to our washington reporter there, greg sullivan. What has trumps been saying, touting the likelihood of the imminent likelihood of this deal being done . Greg thats right. Today, President Trump saying china had a signaled they believe talks are on track to sign a phase one agreement in chile later next month. We have heard President Trump say he hopes to sign it there. He repeated that today. Of course, if they sign any deal, it would be the socalled phase one deal that they are close to negotiating. It is such a deal that would not address some of the u. S. s key concerns in this ongoing trade war. But the u. S. Has said that china has agreed it by almost 50 billion worth of farm goods from the u. S. We know lowerlevel officials are talking this week and continuing the discussions on any such agreement. We also heard potentially steven mnuchin, the treasury secretary and u. S. Trade representative Roger Lighthizer could speak with their counterparts later this week. Wilbur ross did this morning say it is more important to get the details right than to actually sign an agreement next month, and cautions the meat of any real agreement with probably come in a phase two or phase three deal. Kathleen an unexpected topic, a related topic, global Index Provider ms ci and republican senator marco rubio of florida are touting over strong criticism that they are helping billions of American Investment dollars into chinese companies. What is this about . Where did it come from . Greg thats right. Thats right. Marco rubio sent a letter to this global index company. Hes one of several lawmakers with concerns. The issue here is the company added hundreds of chinese stocks to their benchmark index, and later waited those companies heavier. That move allows much more American Investments and Retirement Fund flows into chinese companies. Rubio and other lawmakers are concerned u. S. Dollars would be flowing into companies with potential Human Rights Violations or companies that could oppose National Security concerns to the u. S. Rubio himself has been trying to lead a Bipartisan Group of lawmakers to come up with some legislation. We also know the white house has concerns about this. Theyve had discussions about how to coat how to curb portfolio flows into china. It is another issue where we see this increasingly adversarial relationship between china and the u. S. , and lawmakers with serious concerns about Human Rights Violations, National Security concerns with chinese companies. Haidi we are approaching that tuesday expiration when it comes to the u. S. Broker truce in syria. What do we expect to happen next . Greg today we heard President Trump say he thinks the ceasefire is holding and that the kurds are withdrawing from that area. President trump also said that the u. S. Would help negotiate a way for the kurds to maintain their cash flow. It was unclear what he was talking about but he said a u. S. Oil company could be involved. In those same comments, President Trump threaten turkey that if they committed some unspecified misbehavior against the kurds, that the u. S. Could potentially sanction them. If you remember, this whole situation in syria, in trumps policy on the matter, sparked backlash. Wmaker interestingly enough, trump did receive some defense from some of his allies. Secretary of state mike pompeo and republican senator Lindsey Graham did defend trump over the weekend. Lindsey graham, a recent critic of trump, went so far as to say this is just the president thinking outside the box. Interesting to note. Kathleen outside the box again. Greg sullivan in d. C. , thank you for joining us. Looking toon is lawsuits crucial brexit through the house of commons in three days. After he was thwarted in his latest attempt to get parliamentary approval for his deal. John authors joins us now. Lawsuit lot to doe house ofanother joha with what happens today. Explain that to us on how that has placed boris in the same or different position . John right. In any political situation, ultimately power rests with whoever controls the agenda. At this point, nobody controls the majority of the house of commons. It speaker of the house of the commons who basically is the most powerful single individual in britain for the time being. It is a remarkable situation. I cant think of a precedent. Very int is on think he said to 1604 that if the question has been put once, the same identical question cannot be put a second time. Its a parliamentary version of double jeopardy. They had that chance saturday. They cant just keep asking the same question day after day. They are going to have to show that they have responded to parliaments initial him move. Another,hy somehow or john bercow who very few people outside of britain actually, not all that many people in britain as of a few months ago, is now one of the most powerful person in britain. Does he still have a decent chance as any other outcome of pushing this through in the following days, i just get this feeling that maybe the brexit exhaustion is getting to parliamentary participants and that may actually be one of the cards he has. John yes. I think you are exactly right about that. I actually think if it was not for the fact that Boris Johnson thinks he really needs to get this deal done by the Witching Hour of halloween, october 31, the current official deadline, i think he would have almost no problem at all. It is obvious we are not going to have a no deal exit at this point. About as close to obvious as it could possibly be. The votes are there for somethings that looks very much like boriss deal, even if it is not exactly what is on the table. The question is merely when it gets done. From the point of view of the people that may be are watching the show, the people in the markets, that is a very minor significance. In terms of how it plays for the next few months in british if boris makes himself look weak by failing to meet his own deadline, or manages a really impressive show of strength by getting it done by halloween, that matters for british politics, not terribly for the markets are global economy. Kathleen but it is so fun to watch. Butthing less fun to watch very exciting and dramatic is the riots. The protests. They suddenly sprang up in chile. The president saying today that there is a war going on. People saying that is risky because there are people who feel they are generally suffering. There is the question of copper, an important export. Where does chile stand . John it is very ironic and ropriate maybe, the u. S. The next big stage and the u. S. China trade dispute will take place in santiago. If you take a look at how the copper price compares with the chilean peso, chile is in a norm exporter of copper, and it is a very, very dependent on the global copper price, which is in turn very dependent on the strength of china. It is the country that demands all of china. Of theget a worsening trade conflict, that will create even more pressure, even for a country that is genuinely a stable and prosperous as chile. It would make a lot of sense if they could find some kind of a deal in santiago, of all places. Haidi and of course, the host of the aipac a gathering which President Trump is expecting the trade deal to be signed with china next month. John, a pleasure to have you on with us. John authers there. Our exclusive with one of the Worlds Largest etf providers. He explains why he is looking to expand in china, also why investors are being too conservative. Kathleen we will discuss the elections in canada with Eurasia Group managing director robert johnston. This is bloomberg. Haidi im haidi stroudwatts in sydney. Kathleen im Kathleen Kathleen hays in new york. You are watching daybreak australia. Hays in new york. You are watching daybreak australia. The s p 500 pushed back the 3000 mark on monday as u. S. Stocks jumped on positive trade signals. Lets bring in management founder and chief investment officer, cam. Welcome to the show. Great to have you. In an alltime00 high at 3025, getting in within spitting distance of that. Trade, yes, it looks like it the step one deal is starting. Is not enough to keep the rally going . Kim i think it really is. It is not just because i am an optimist. If you look at the condition that the economies of the world are in, i think the only thing that has been keeping us down is the u. S. China trade war. Everybody else has been dragged into it, especially europe. As well asia australia. I think if we can begin to repair that risk, the rest of the worlds economies can get back to doing what they are doing which is outperforming overtime. Kathleen you are optimistic that this is going to lead to a lasting trade deal, which will allow businesses to gain more certainty and manufacturers to start raising their output again, reassuring consumers, etc. . Because this is what we really need to see. Kim exactly. If you look at the foundation of the slowdown, it was not caused by overproduction or some sort of credit crisis. This was all predicated on slowing economies. Affects theit credit situation in europe especially. But this is not a credit event. This was a slowdown created by trade. If trade starts to repair itself, and i think the bar is set low enough, we just want them talking to one another because we have had a year of escalation on both sides. As long as we are not escalating, and may be deescalating, thats good enough. Haidi even if you take the side that of the trade war and tensions and assuming we get a month, nopac next doubt we will get a relief rally, we are still at the tail end of this cycle. We are dealing with major cyclical issues when it comes to economies like china, structural issues responsible for the slowdown, not just geopolitics. Kim sure. Understood that china has a demographic problem. Overbuiltave probably their infrastructure, those are issues china has. If you are looking at trade alone, there was a wall street journal piece sometime back in the summer where an oped columnist says look, we have a really great supply chain because it is computers now. Those traditional recessions just dont happen. And i really agree with him. Areink other slowdowns creating our recessions, not the classic every x number of years, we overproduce and have to slowdown. Maybe this time it really is different. And of course, there are spots on the world that have to address their issues. But we could get back to trade, and i think that would really pick up a lot of the issues we have had this year. Haidi where are you then over the next few months, assuming appeasement at least when it comes to the geopolitical side of things, where do you find yield and value now . Kim well, im sort of a value person but im always looking for where growth can come in. That is what makes a company interesting to me. Ithat is what makes a company interesting to me. I like looking at stuff that other people have thrown out, and that kind of colors where i look. Im looking at industrials now because of course, theyve been affected by trade. But im also looking at Consumer Discretionary names because the consumers changing, it is not necessarily an economic issue. It is Consumers Want convenience. And Consumers Want selection and Consumers Want a lot of stuff. But not a lot of retailers have been able to get that magic formula late yet formula yet. Kathleen does the federal to keep your eye like tech usually supported by lots of Central Banks easing. I like the consumer, also supported by Central Banks. Is that part of your view . Kim it is. Mostly because the rest of the world has lower Interest Rates than the u. S. Thats an easy thesis there. I dont have to over explain that. Kathleen kim forrest, thank you very much. I think you explain perfectly. Kim is boko founder chief officer. You can get a roundup of the stories you need to know in order to get your day going in todays edition of daybreak. Bloomberg subscribers can go to dayb on their terminals. It is also available on mobile in the bloomberg anywhere app. And you can customize your settings so you only get the news on the industries and assets you really care about. Check it out. This is bloomberg. Im Kathleen Hays in new york alongside haidi stroudwatts in sydney. Bloomberg technologys taylor riggs in san francisco. Time for a look of the top global tech stories of the day. Taylor we are starting with shares of snap. Up the most since july after a course of polish commentary the wall street raves began with partners initiating the by rating. Credit suisse joined the bulls, boosting its price target to 21, saying the company has come full circle. Snap reports tuesday after u. S. Markets closed. They expect a meaningful beat. Mark zuckerberg has acknowledged giving hiring recommendations to democrat pete buttigieg. But says it should not be misconstrued as an endorsement. Zuckerberg and his wife spent sat sent several emails to buttigiegs managers and two of their people were hired. It is a rare example of political involvement from the tech mogul. Facebook meanwhile says the shutdown of four separate misinformation networks, three tied it to iran and one to russia as it tries to counter what it calls for an influence campaign. It removed the instagram accounts and one facebook account originating in russia and aimed at the u. S. It says the russian efforts had ties to the Internet Research agency, a Group Previously indicted for alleged u. S. Election interference. Those are the top global tech stories im watching. Get more on our biggest tech story of the day, more twists and turns in the wework saga. We work has learned softbank is planning to take control of the company, one of the japanese conglomerates biggest investments. Our reporter has been covering this drama. He joins us from san francisco. It is this package versus jp morgans financing package. How does it compare and what is the latest we have . The latest is it seems like softbank package is perhaps a preferred option. The board and the people who will be making this decision will be weighing these packages same. Potentially tonight or as soon as tomorrow. The softbank package as mentioned, we have new details on what that looks like, it involves around 5 billion in debt as well as up to 3 billion of a tender offer. As well as eyes as a consolidated as an accelerated version. Again, this is a new deal that would probably value the company billion. 8 to put that into context, contrasting with the 47 billion softbank valued as part of its investment at wework in january. Taylor we are getting headlines crossing softbank that is said to take a 60 per six he percent to 80 stake in wework. As you evaluate this, any idea of what wework prefers . Softbank coming in for control or the jp morgan deal you mentioned . Ellen there are tradeoffs to both the deals. If you go with the softbank option, it provides a lot of cash the downside is that it will dilute existing shareholders, it will add a couple occasions to some of the tables, there may be investors who are not excited about that. The debt deal on the other hand, that settles the company with a lot of debt to be repaid in the years coming up. That may be seen as too much of a burden for the company to take on. It seems like they are pushing against the clock. This Company Needs money fast as we reported. They are likely to run out of money as soon as next month which is coming soon. Haidi how much reprieve with the company would he give the company to raise that cash . Ellen it depends on how quickly they are burning money. Thats something the company has been trying to change dramatically over the last month or so is it becomes clear that they need to tighten the belt to keep going. This is a company that has said they are planning to selloff side businesses. They have announced they are going to close the private elementary school. Trying to cut expenses. The 60 million Corporate Jet up for grabs. Ellen hewitt with the latest on wework. Technologyomberg global link. Dont miss Bloomberg Technology 5 00 p. M. In new york. This is bloomberg. Loomberg. Shery to some breaking news, cutting thousands of employees from its branches, saying it will affect thousands of people familiar with the matter, saying the ceo remarking that changing Customer Behavior is causing these cuts. The ceo making these comments in a memo distributed to the bank call staff. We know that they are cutting thousands of Branch Workers as the bank is working to adjust changing Consumer Preferences and that is going to be prioritizing a digital push instead. The person asked not to be named. Memo,e reviewed this saying that the company made the difficult decision to eliminate their jobs because Customer Behaviors have changed. A workforce of 74,000 as of midoctober and we are looking at this latest news that the cuts will be in the low thousands. We will get you more on that banking story as the details become available to us. Lets get the first word news with ritika gupta. Ritika President Trump has upped the ante. He and president xi are due to meet in file. The word from china is negotiations are advancing and it has already started buying all u. S. Agricultural products. Wilbur ross said what he called the actual meat of the agreement would come into more phases. More phases. O the House Speaker on monday rejected his latest bid for a parliamentary vote on the deal. Opponents accused johnson of trying to ram a complex bill through the parliament as he seeks to get the u. K. Out of the e. U. By the end of this month. Companies accused of fueling the epidemic, thousands of lawsuits, a manufacturer agreed to pay. Distributor settled just before a federal trial. The agreement may be, a benchmark for a wider settlement involving thousands of companies. Japan is preparing for an elaborate ceremony later tuesday that is even bigger than the rugby world cup. Political leaders and people around the world will gather at the imperial palace in tokyo mark the enthronement. Formally install him as japans 126th emperor. 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 ready. I am ritika gupta. This is bloomberg. Shery thank you so much. Australia opening at the top of the hour. Sophie, what are you watching . Sophie we have several trading updates from australia. Whitehaven registered a 14 increase in total coal sales for the First Quarter and maintains its fiscal 2020 guidance. Chinese coal imports are recovering and there is solid enduser demand. With its firstquarter report, affirming its fiscal 2020 cost and output outlook. As for its firstever dividend, the goldmine are maintained the payout. They are on the radar as the president said workers will stage a 10 hour stoppage over to shifts on october 22 in solidarity with protests in the country. The first stoppage is to start at 8 00 a. M. Local time and the second at 10 00 p. M. Local time. Kathleen. Kathleen the United Nations condemned violence and she lay and urged all sectors of society to reduce tensions after protests clashes that left at least 11 people died. The peso and local shares fell with no end in sight. Joins us on the news from santiago. An amazing four days for you since this riot seemed to flare up. Is atesident said she lay war. People have died. There are military patrols reminding people of the use of the pinochet dictatorship. Where is the country now . Where is the government . Eduardo totally bewildered. Giving different messages right now. It took everybody by surprise. The president had given interviews in which he said that hile is an oasis of calm. This all exploded over subway fares, the protest against the hiking subway fares, but then the government reacted, denouncing the people that were jumping turnstiles to protest this and things started to get out of control, especially when people are protesting because in the state of emergency, the army was called out to the streets to help quell the situation. We are going to face our third night of curfews in chile. Some of them have already started. In santiago, it starts in half an hour. It will last until 6 00 a. M. Basically, the government has called everyone protesting or at least looting. There is a war going on. At the same time, you see thousands and thousands of people protesting peacefully, sitting in the streets and chanting and jumping and celebrating even, doing peer rouettes, hugging the police. As soon as this curfew begins and the lights go out, things can turn quite violent. One of every four supermarkets and she lay was diluted. You can see people trying to buy stuff. Theres some shortages already have some products and supermarkets. Difficult to find bread in smaller stores. These we are looking at extraordinary images and it is quite extraordinary to a lot of investors who view chile as the emergingmarket darling, this poster child of economic and social stability in the region, but i am reading just in this story, speaking to one person, saying things need to reach a crisis point in order for things to be heard. What would it take to appease some of the discontent and cannot be done before the aipac meeting and before sentiment deteriorates when it comes to the chilean economy and assets . Eduardo it is better improved before the aipac meeting because trump said he wanted to sign the deal here in chile. That remains to be seen. The government has to come up with some sort of proposal, something that make well the situation may quell the situation right now. There are areas in which the government has said it will hear, wants to do dialogue. Last nights speech was very confrontational, very belligerent, saying the country is at work, but he could offer pensions for the poor and also in health costs, in medicine, in taxes that retirees have to pay over their properties still. There are many things people are calling him. People saying, yes, the looters are delinquents. But theres also victims of other kinds of abuses. Housing prices going up tostically, little Access Pensions and everything. They have to do some big proposals soon or else this will not go on for very long. So very thematically familiar things that you mentioned. Thank you so much for your time. Eduardo thompson, bloomberg news, Santiago Bureau chief. Lets take a look at how we are setting up when it comes to the asian trading day in australia, we are counting down to that sydney open, but this is how we are shaping up when it comes to futures. A pretty flat start when it comes to the start of trading. It was a pretty stellar session on wall street with the s p 500 cracking that 3000 point level for the first time in a month. We are getting trade optimism. A bit of residual brexit optimism despite Boris Johnson being thwarted again in parliament. The kiwi dollar trading at 64. 0. 6406. We could see a bit of again at that open. Lets get more on what we are watching us trading gets underway in asia. Crossross asset at asset editor is with us. How does that impact investors in asia as we had that horrible date entree just yesterday . Data entree just yesterday . On trade just yesterday . It is going to be very interesting to see how this slowdown in global growth, trade, as well as brexit, is affecting companys bottom line. Your 12 month earnings estimates for the msci asiapacific have declined significantly this year amid the slowing global growth, and in the u. S. As well, we are seeing analysts slashing their estimates for earnings for 2020. So there is some sensitivity around earnings as this earnings season unfolds. You mentioned the s p 500 cracking that 3000 level so it will be interesting to see how investors react if the earnings disappoint. We do get some sort of a trade deal. A lot is in the balance out there. Investors want to see Earnings Growth pick up to underpin this rally that you see in stocks. Even though it is early days in terms of reporting, i think in the next couple of weeks, certainly, earnings and how the trade war has impacted companies is going to become more of a focus as the year draws to a close. Kathleen despite john mack performing government bonds this year, the rally, it appears, may not yet the over for indonesia as bonds. Why is that . Andreea thats right. Indonesian bonds have returned 13 this year and that is well outperforming the 6 for emerging market bonds, and what has been the underpinning that . The central bank being more accommodative has done that. We have had three Interest Rate cuts in indonesia. Economists in a Bloomberg Survey are expecting another cut when the central bank meets on thursday. The country also has a manageable trade deficit despite promises of government spending. Be stable. Ected to indonesian bonds seem to be benefiting from indications of some resolution in the trade war. Deterred that has not investors has been increased volatility in indonesian bonds, but even there, the central bank has been stepping in to support the currency and to support the bond market, so there is diminished chances that volatility will continue, so a few positive factors, i should say, stacking up in favor of indonesias sovereign bonds. Bloombergs crossasset asia editor, andreea papuc. Just an alert crossing the bloomberg, we have revenues comingthrough numbers through. 81, a production at 6. Contraction of almost 10 year on year. In terms of the bottleneck politically and supply wise in Papua New Guinea, looking at a bit of an uphill battle, given that peter is stepping down in february. The incoming head, karen wolf, will be facing potential delays of new projects by the Papua New Guinea government as well. The opportunities in china continue to lure some of the worlds biggest financial institutions. Tomchina correspondent, mackenzie, is in beijing. You have been speaking with one of the worlds biggest fixed income etf providers. Tom thats right. This is a new york firm, and of course, the ceo is Don Frederick and the ceo is this is a firm that has 50 billion u. S. Dollars assets under management. It is the second largest provider of fixed income etfs after chem coso they are a big player. Despite the trade war, despite the slowdown in the chinese economy and despite the push by some in washington to curtail the exposure of u. S. Pension funds the chinese equities, he is very much focused on trying to expand efforts. Financial sector in china continues to open up, even if it is at a gradual pace and we have had moves out in the last few weeks that, for example, Foreign Financial Services and investors will be able to get full ownership of funds futures insecurities businesses by 2020. And of course, he is focused on asset management. The opportunities are significant. Blackrock,nguard, pimco, fidelity, all looking at opportunities despite these headwinds. This is a broad conversation around issues of china, hong kong, and the u. S. Recession and where he sees the Federal Reserve going. Take a listen to this exclusive interview. Internals mainly an issue within china. What i focus on, the larger narrative, which has been happening for well over a decade, is the opening up agenda of the china renminbi and local Capital Markets to the rest of the world. If you want to comment making hong kong less important as an entryway in and out of china, our offices are in shanghai, and we do that because i think going forward, shenzhen and shanghai and beijing, to a lesser extent, are really important cities in their own right for the Capital Markets in china. Are you still seeing demand into yourf inflows china etfs from u. S. Investors . Jan no. Let me be very clear. The headlines, the trade war, everything going on has basically put americans on their heels as far as investing in china. Investors have been allocated but adwhile, while, but theres a lot of wait and see. Why bother with that risk . Anthe longterm, it is interesting opportunity, like i was saying before, but absolutely, sentiment is horrible and interest is low. Lets shift to the u. S. Recession concerns, the yield inversion, that has shifted around. Some of the data points out of the u. S. , manufacturing is under pressure, but services as well. What are you seeing . How concerned should we be about recession risks in the u. S. . Asreea as with china with china, the economy is putting much ok. If you look at monetary policy, if you want to see what the Financial Markets are going to do, what is the central been doing . Basically being accommodative again . What has been the most discussed is the fiscal deficit. If you can get that earnings going, again, companies are cutting costs as well. It is all about revenue and gdp growth. In terms of the negative yielding debt, anywhere between 14 trillion and 16 trillion, how is that impacting and shaping market behavior . How do you view that . Jan there was a big event for the summer and i cannot explain it. Why did Interest Rates in the u. S. Absolutely collapsed this summer . A lot of people interpreted it as the global recession fear. Who needs to borrow money if the economy is going to collapse . Our interpretation was looking at chinese pmi, and the u. S. Was ok. Maybe it was sometimes the market overextended itself. In any case, the assets that did well our gold. Those that compete with high real Interest Rates, so that is why if one is concerned about Central Banks in europe, basically, they cannot get the economies going in and of themselves. For what my colleagues were hearing at the meetings on thursday and friday, it was a little bit of, hey, central bankers have to put their superman capes away, and they are not the heroes, right . Otherve to use fiscal and forms of stimulus. If that is the case, then maybe you want to hedge in gold. The ceo saying he sees more upside for gold and also for equities. Investors in the fixed income space are being overly conservative. He said there were opportunities in highyield, and also likes argentina in ukraine. Shery Tom Mackenzie in beijing. Great conversation. Lets turn to canada because polls begin closing after a knife edge national election. Justin trudeau appears to retain power but lose his parliamentary majority. Robert johnson is the lead analyst for canada. Great to have you. You were poised for a second term, but what at what cost in terms of who will he have to signal allegiance . What are the ramifications of these partnerships . Robert Prime Minister to Woodrow Wilson just while short of the 170 seats needed for a majority government. Maybe 140 seats. He will probably be partnering with the new democratic party, to the left of the political spectrum in canada, and will certainly push for big changes on trudeaus energy and Climate Policy in particular. We are watching that one quite closely. Shery its quite interesting because this is a party that it is antipipeline, promore aggressive on climate change, promore universal social programs. How does that mesh with what is already a very leftleaning government . I am wondering how that impacts the energy sector. Robert i dont know if trudeau is all that leftleaning. On energy policy, they are not happy with everything, but they approved of pipeline and lng canada and try to balance that with their National Carbon tax they implemented, but you are them toe nep could told the left, but the trudeau government will partner on a carbon tax, maybe acceleration, but will likely try to continue to support the pipeline. It means we will still be battling federal provincial issues in the energy sector, but the pipeline, which is the one investors are watching most likely, will likely still move forward. Kathleen trudeau was such a darling, not just in canada, but an international darling. He seemed like he was attractive, charismatic, could now,o anything wrong, but his opponent, a barbecue dad, to what degree has he slipped and why . What is it about his opponent that is gaining power that you might not have expected to or three years ago . Ago . O or three years robert it has really turned much more into popularity. He stumbled with the scandal when he was accused of interviewing and a government interfering in a government investigation, his brown face scandal, and others. Parts of ontario are turned against him. Trudeau is probably going to come in in the low 30s and have lost some ground. But also in quebec. Kathleen look hong kong protests have grabbed attention around the world and we have a very broad, global, and asian audience. I have to ask you about an association of hong kong canadians questioning whether a toronto area liberal candidate is to close to probeijing elements in the party. This is something we never expected a couple of years ago. What is going on . Bigrt it has not been a Foreign Policy focused election but china is a huge issue for canada right now. In several respects. There is the arrest of the huawei executive cfo under a extradition treaty. There is the role of chinese influence in canadian local politics and local community affairs. And the future of trade agreements and International Cooperation with china on things like belt and road. Andrew scheer, the leader of the conservative opposition, might try to take a tougher line with china than trudeau has done, but i am not sure there is a lot of flexibility. Canada is stuck in the middle between its largest trading partner, the u. S. , and what is increasingly a u. S. Adversary in china. A tough spot to be for canada. Has interestingly been a quiet fund for Foreign Policy on china. Most politicians around the world feel like it is a bit of a loselose situation on that front. What about the economy . What about fiscal spending . It seems like this relates bound this late bounce comes because of him doubling down on deficit spending. Robert i think it is that but from a slightly different angle. They have been able to attack the conservatives for cutting spending and existing programs or threatening to, and in that way, the liberals have tried to link federal Leader Andrew Scheer to prevent show conservative leaders like doug ford in ontario. Some of his social spending cuts have been perceived as quite unpopular. The liberals are talking about spending more. Push theliance would pressure up a little bit in china. Liberals would try to say the conservatives will be cutting social programs, which will hurt them as well. Kathleen thank you so much. Robert johnston, covered a lot of ground. Great details as well. Watch us live, see our past interviews on our interactive tv function, tv. There, you can dive into any of the securities or bloomberg functions we talk about. You can become part of the conversation. Just send us instant messages during our show. This is for bloomberg subscribers only. Check it out at tv. This is bloomberg. G. A quick check of the latest business flash headlines. Boeings most actively traded bonds fell along with the Companies Shares after downgrades from at least three equity analysts. Ubs, credit suisse, and another cut their views on the stock after reports that a pilot working on the 737 max during its certification expressed concern about a future leader implicated in two crashes. Credit suisse called the news indefensible. Kathleen more job losses on the way at deutsche bank. The german lender may eliminate at least 10 of positions in its unit that trades Interest Rate securities. We are told the bank will likely cut a low doubledigit percentage of jobs at the business which employs several hundred staff. Shery Softbank Group is looking to take a controlling stake in weork. We are told it will value the company at 8 billion dollars and includes an offer to buy back up to 3 billion in stock. Wework has been considering will get all the action on daybreak asia, next. We are looking at a pretty optimistic day for asian markets after u. S. Stocks had a stellar session. The s p cracking 3000 points for the first time in over a month. This is bloomberg. A very good morning. I am haidi stroudwatts in sydney. And i am Kathleen Hays. Good evening from bloombergs headquarters in new york. Kamaruddinm sophie in hong kong. Welcome to daybreak asia. Haidi our top stories this tuesday, President Trump raises hopes on chances of a phase i one trade deal next month. He says the word from china is that things are going deal. Boris johnson