In australia are set to worsen this week we will have the latest from city. Sydney. Lets check the market close in the u. S. It was a mixed picture. It touched record highs earlier in the week. We have been managing to gain slightly with those blue chips like boeing and intel leading the gains. We have reports of a record holiday season. The s p 500 barely changed. We have the Energy Sector leaving the declines. Despite the fact that will prices rebounded from friday. The nasdaq fell 2 10 of 1 . Instead of of that 9000 level. Lets see how things are shaping up this week. Sophie weoap are so close to saying so long and farewell to 2019. Pointing tos potential losses in tokyo, sydney and sold. Seoul. I want to check in on one of those movers in wellington. We are seeing metlife care gaining ground and rising over 6 . That is after a takeover offer for seven kiwi dollars per share. On the calendar it is looking pretty light. We will be getting industrial output later this morning. The government will be less flexible with it possibly Natural Resources its Financial Resources. Paul a 37yearold man has been arraigned on five account of attempted murder after multiple stabbings in the new york suburb. The attack was described as an active the message terrorism. Urged thetrump country to rise against antisemitism. More than 12 million acres of land burned nationwide over the past few months with nine People Killed and over 950 homes destroyed. Volunteer firefighters are battling the bushfires in New South Wales and they will be compensated for the effort. The philippines Disaster Response agency are have have been told. Dozens more people are missing an injured. The agency said the damage to look and infrastructure totals near 29. This was the 20 want to hit the country this year. Jongun may have reconsidered his socalled Christmas Gift to the u. S. After the diplomacy efforts of donald trump. National security advisor robert devry said the u. S. Is ready to respond should they five additional longrange missiles. Lets turn to hong kong for our top story. Paul chan says the economy is set to contract in the Fourth Quarter. More on this. Not surprising given all of the months of a mess. Not to mention, the violence out there. We have been hearing that the economy will contract this year for the full year of 2019. They expect further contraction in the Fourth Quarter. Has hadsee the economy two straight quarters of recession. The Fourth Quarter numbers will come out soon. He will be looking to help businesses and help revive the economy in the budget speech in february. This will show how the economy has been doing in the last few quarters. There was more than 18 drop in september. This is usually a peak month for. Etailers they have been dropping precipitously in the last few months given the unrest and the violence in hong kong. Before the protests, we were are we talking about the fact that hong kong was starting as a tourismraw spot. The mainland middleclass was able to travel further. Yes, the process has been a big factor but the shine is starting to come off of hong kong shopping a little before the process. Paul in terms of those protests, is there any hope that there may be some relief in 2020 . Ros many of the authorities and lawmakers are thinking that these trends are set to continue. Amy not in as large a scale as previous months maybe not as large a scale as the previous month but there was a smaller scale protest over christmas. There will be another rally planned for january 1. This has been planned by the civil human rights front. This has organized some of the biggest protests in the last few months in hong kong. We will be seen at the gathering on that day. Paul that was Rosalind Chin in hong kong. President trump is facing criticism from what the opponents. Complaint triggered the congressional inquiry that resulted in his impeachment this month. Lets get the details on this from rust resume. What do we know about why the president decided to name the alleged whistleblower whistleblower . It seems like something President Trump has been warming up to over the last several months. He has tweeted about it whistleblower dozens of times, maybe 100 times just in the last few days. To aursday he had a link conservative new site. If somebody click on the story clicked on this story that he linked to, it would have said the whistleblower name. He goes that he deserves to meet this man or woman and has set out to discredit the alleged whistleblower. It seems like he is still angry about the role that this person played in his impeachment and unmask them. O is this even legal . That is a good question. Believe the trump broke not one but two laws. One of the key jobs of the president is to protect whistleblowers. They may be considering their options for what kind of response to make. I dont know what town they would go, if they would go back to congress to see if this would article of another impeachment for president from. In the white house, there has been concern about donald trump going down this road. Pretty headstrong. When he has of the he wants to do, he does not take advice. Another group that you did not hear from today, there were 14 that commissioned a caucus to protect whistleblowers. Hear anything fresh from those democrats or republicans today. We may hear more in the next few days. When the impeachment trial gets underway, democrats may have suffered to say about this action from trump. They are quite upset about it. Paul President Trump has a few International Issues on his plate. He had a call with vladimir putin. What are the details . The white house is not with the call from president putin. We heard an announcement on the putine that wanted wanted to call trump to thank him for helping prevent terrorist acts in russia. Greek readouthe we got from the kremlin how many incidents that putin may have been referring to. There was an attack on the headquarters in the federal security service. That was a little before christmas. We dont know if that was the one he was referring to. Month thatthis Security Services in russia have prevented Something Like 54 terror incidents this year. We dont know if the u. S. Was involved a lot of those. It sounds like to have Common Ground to speak again. Of two also spoke on issues mutual interest. That could be anything. Pipeline tothe gas germinate. It could be north korea. We dont know. North korea is holding a second session of the Party Planning commission meeting. They were stressing the need to take steps to ensure sovereignty and security. Can we say that we are saved jonguns suggestion of a Christmas Gift for President Trump . Christmas has passed. There is still great christmas greek christmas. We heard from robert obrien, he sounded pretty upbeat. Some would say of the naive when suggesting that trumps personal diplomacy with kim prevented any kind of christmas message or missile test. We know there has been ongoing missile testing from north korea for months. What theo unclear channels of communication are between washington and pyongyang. They are pretty strained during the fall. Anythingnow if theres in particular that the National Security advisor could speak to, it sounded like the rhetoric coming out of that Central Committee meeting you referred to. It sounds very strong in terms of what pyongyang wants. Paul that deputy editing manager. Carmaker neo is rolling out a fleet that is made in china. First, a stock market play before 2020. Hilary kramer will share predictions. This is bloomberg. Paul that is a whiff of smoke is in the air. Smoke haze in the air. 3 . Es are weaker by you are watching daybreak australia. Our next guest things those gains will continue well into 2020. Joining us now is kramer capital owner hilary kramer. Were closing in on the best year since 1997. That is more than two decades. Are you concerned that all of the good news has already been priced in . No. Ry these rates are artificially low. It is manufactured what turned out to be a very positive economy. It is fake it until you make it. Once we get closer to that election, it is all about right versus left. Thatoment it seems President Trump will not be elected, all bets are off. The market will come down hard. Investorsstitutional on the street, everybody thinks it is all about tax cuts and the fed and if the said will have the right to do what they want to do and need to do once we go than aything other Republican Trump white house. S pou are putting the target at 30 by june. Is phase one trade deal almost already signed. Hilary they will not be any uncertainty. That overhang will not be there anymore. The financials have finally started to catch big. I am also referring to some of the big global banks that were considered u. S. Banks. Goldman sachs, i am more bullish than ever that it will go from 231 to over 300. That is when their issues are reserved in malaysia. Resolvedthe other competition knocked out. We should see a lot of cross merger m a. Lot that is still left to come. I just recently got myself a puppy and i did not turn to chewy, i turned to amazon, it was easier. Hilary i think amazon will buy chewy. It is hovering there. It is getting close to being a 30 stock. There are some issues earlier in the month. Really, it is interesting. I that you will turn to chewy. Amazon has been really busy with other things. Ve, making sure thats but half of their packages are their own Transportation Providers and making that transfers of the holidays. Itm finding that chewy, makes a big difference. I think what happens is we have humanized our animals. I think it is a wonderful thing. Everyone is sitting on their phones. The reality is it is wonderful. The funds, the hedge funds, they will look for something to bring up. When you see that homebuilders were up 53 this year, even is a laggard but at 19 up, that is considered a laggard . Like chili could be a 50 stock really quickly. Could be a 50 stock really quickly. It looks like it is coming up roses but the valuations we are seeing is this all and lever facade generated by the rates . Hilary there is another facade going on. Isce rates are so low, there a continuation of companies borrowing to pay that dividend or special dividend and to buyback stocks. That should be good enough for the next quarter we go into. I think there was a surprise to the upside on the Holiday Shopping season. Retail is already a train back. Everyone has priced in disaster there. From a real valuation standpoint we are fine. You have Companies Like boeing that are 100 ahead. 440 was the high. Now you are talking about 330. That is a big part of the doubt dow. About 17 ino earnings per share next year against . 79 this year. Athink we are going to see lot of the laggards come back. This is near 36 on the nasdaq. There are a lot of companies there that are incredibly undervalued. Some of those Industrial Companies that have been languishing because they havent funds. Attention of the funds, theyequity feel so much ready so much better. Now that they have already gone for the big cats, they will head down and look for these 410,000,000 dollars market Cap Companies that have been around a while. They dont have a lot of debt. They have cash flow that is consistent. There, they will see the opportunity to shake them up and have another good portfolio in the next coming year. Paul i just want to get a on the Political Risk factor. Under President Trumps watch, there has been a trade war. This market rally occurred in spite of the president ial policy. Hilary i credit the fed. Follow the fed. It is remarkable. Issued have taken years. Just like in 1989. October of 1989, the market crashed and then six years later , everything was still going down. Then it came back strong. 1997 was the last time we had such a great year. Had the kind of equality that we need in distribution. Here in the united states, the problem is we have so many billionaires that were created but not enough multimillionaires. It is the millionaires that get their kitchens redone and buy cars and do all the things that we need to do to keep our economy truly strong. Everybody is buying like crazy. No one wants to be left behind. Lets see what happens with that election. We will be watching, thank you. We have pointed more to come, this is bloomberg. Here is a quick check of the latest business flash headlines. We work will have to pay 8. 3 million each to its coceos as they are fired or leave the company. The chief legal officer would receive 1. 5 million under the same conditions. The packers terms were sent to shareholders ahead of a 3 billion tender offer for we work shares by softbank. The struggling nio isc carmaker, promising to improve coming finances. This is feeling demand of a slowing ev market. They have accumulated a deficit 2014. Ost 6 billion since this is bloomberg. Paul we are over 30 minutes away from the markets opening in sydney. Futures are a little weaker with of the close. We are off about. 3 . That is the aura of bushfire spoke bushfire smoke. I am paul allen. Rishaad i am share kong to lookhong at what is to watch. It is in your to remember for risk assets bouncing back from the 5 trillion market dollar wipe out since the asiapacific index tracked higher in the final four months as trade tensions ease with the tech sector leading gains and expectations for turnaround in a Semi Conductor cycle. Peoplen is among forecasting a recovery next year. Optimism has helped taiwanese stocks outshine most regional peers this year. Levels not seen since 1990. Cause 12,000could points higher. Climb the expected to most in asia next year after a top 2019 for the export dependent economy. The rally more than 15 . Japanese shares enjoyed a resurgence as well with more gains expected in the vix this year. By 2020. Uspects 1800 better valuations over market peers. Malaysia, ubs expects the worst could be over with investors setting a low bar in the face of Political Risk and weaker profit outlook. There could be less because during risk. Taiwan maintains they are unattractive after two years of underperformance. Seng is the hang expected to end a five month high but trading at a ratio of. Bout 11 compared to near 20 seven months of protests have hurt the economy for the first annual contraction since 2009. Paul thanks. Lets get more on what we should be watching as trading gets underway. Our editor is with us. Stocks finished 2019 on an uptrend. Many predicting a good continue into 2020. Different for bonds. Stocks, we have global near record highs. This was a recession in the middle of the year. Looking for this to continue into next year. Different story for bonds. We have had the bond yields falling for significantly. What investors are seeing as the theme for the next decade is this emergence of fiscal stimulus from governments. The reason bonds have rallied is because we have had using from central banks. Going forward, they are seeing governments coming in with stimulus. We have seen some in asia, in japan. Yield, stuckbond at 2 , 11 trillion of debt worldwide. Definitely something investors will be looking at. Shery investors are looking of the financing vehicles in china. At the financing vehicles in china. Have e reporter that is right. The vehicles having emerged as the Top Investment for investors 2020,ernment bonds in that is despite many of them they have 1. 2 trillion , last year lacking sustainable revenues and rating agencies. They have warned about the investing. But the reason they are more positive is because the government is seenin and actually supporting them. There have been instances when some of them have become close to defaulting and you mentioned the very last minute, you had state funds being made available convincedders being to delay payments. They are avoiding default in 2020. Still having said that we are going into next year with an elevated risk of default in chinas 13 million bond market. Shery bloomberg. It is time for the first word news. President trump is facing criticism from political opponents and some supporters for reach weeding a social media read tweeting a social media coast. It resulted in his impeachment. This is potentially breaking roles and not protecting whistleblowers. Inevitable growth will be negative and the government will be less flexible using Financial Resources under economic recession. Prodemocracy demonstrations are set to continue into the new with a mass rally approved on new years day. Bank to adopt a new loan pricing regime for next year. The move marked an end to the previous benchmark and takes another look at relevant rising at liberalizing the system. They could use a new all loans from january, converting missing loans from march to august. Operations at its refinery after investors marched into the facility. About 700 protesters blocked employee access to the refinery which processes between 25 and 30,000 barrels a day. The oil Ministry Says it is pumping more from its fields to make up for the output drop. Paul wildfires are expected to. Et worse this week tens of thousands are being urged to evacuate popular Tourist Spots in the southeast as authorities warned a major highway could be closed. Eddie johnson joins us for the latest. What is happening south of us . Extraordinary. The southeastern corner of australia, it is four hours to the state capital. Authorities yesterday issued , anyonedrastic warning in that area, this is a massive area half the size of belgium, to get out. Today,id the fire risk temperatures soaring to 42 degrees celsius, strong wind sweeps through with a danger of lightning strikes. It is going to be too dangerous. There is a risk bushfires will close the main princess highway. Shery there was a petition going around for the new year fireworks celebrations to be scrapped. What do we know about how all of this is affecting events in australia . The good news for the sydney fireworks that draw hundreds of thousands of people to enjoy the harbor spectacle, those celebrations will not be canceled. The petition called for them to be scrapped because of anxiety around bushfires and we are feeling that at a time of national crisis, was it right to have such a spectacle or should the money be diverted to the firefighting effort . The city council said the event to the stateant economy, drawing in 130 million. They will go ahead. Other events across the nation have been canceled. The fireworks celebrations in beenrra, the capital, have canceled because of high temperatures and smoke shrouding the city. Lorne inval in victoria, the annual Music Festival has been canceled. 9000 people have been told to pack up and head home because of the danger. Paul we had remarks from Scott Morrison offering compensation for volunteer firefighters. Prolonged fire season, this is putting additional demands on our firefighters in particular. It remains the turnouts and callouts have been far more extensive than previous years, going beyond and above what is normally expected of those who are engaged in volunteer service. But payment for volunteers the cancellations you described our various events. Have we seen in the other thing . Any other things . Reporter no. This has put the government on the back foot. It has been an extraordinary fire season. It has left nine people dead. Huge areas, huge morrison, whose government has been criticized for championing the coal industry, for not doing enough to lower australias carbon emissions, he was forced to cancel his prechristmas trip toovnments response. Really shining a light on thank. Bloombergs australia managing editor. Investors are pricing for the political impact in hong kong to continue next year. They are notomberg seeing massive capital outflows. Our interview with the deputy chief executive is next. This is bloomberg. This is bloomberg. The social anxiety in hong kong is likely to continue to take a toll on the Life Insurance sector not only because it will drag down sales to many visitors butl residents as well as they avoid public areas and home because traffic could be difficult. If theeve next year protest continues, the sector may face a 20 drop in terms of new analyze premiums. Expensive for the retail or hotel segment, we see them coming down by 40 or more. Things may happen again in 2020. It takes time to get visitors back to hong kong. Office, we could see more challenge. We dont expect the hong kong political unrest to get results in 2020. There could be [indiscernible] in capital outflow. That would put pressure on the hong kong dollar. There could be mega ipos coming up which could harm the dollar, but it could be a better window for investors to position for hong kong dollar business. Shery Bloomberg Intelligence analysts and strategists with their outlook for hong kong. People bracing for the political impasse in the city to continue next year. Hong kongs image as a Financial Hub is taking a hit. It is pushing ahead with a bill backing the protesters. But the deputy chief executive told bloomberg in november they are seeing big outflows affecting markets. Arent seeing big outflows affecting markets. This is not welcome news but the reaction has been pretty calm because a lot of bankers market this event, they view the Immediate Impact of the bill is not going to be huge. Much will depend on further development. What we are doing is looking very much at these fundamentals of hong kong including what we can have under the one country, two system, independent judiciary, commonlaw system. If it lost its special trading status, would it be the end of hong kong . It is helpfulnk to speculate on different possibilities. Basically i think a hong kongs special status, the basic law is still intact. That is what make hong kong a place, wellpositioned to offer the positions many investors would like to have. Many opportunities many investors would like to have. , thered of unrest status is no outflow from hong kong dollar in the past two months. If you look at other metrics, for example hong kong dollar deposit, it is pretty stable in the past few months. Yvonne but the economy has entered into a recession. We see a triple threat from a global slowdown, the trade war and a domestic situation. Is this time different . The markets are showing some signs of stress. It is nowhere near extreme. What would break the foundation . In terms of the economy, look at the real factor, obviously if you look at gdp, we are going through some difficult times. That didnt start from the middle of this year or the summer. It started from more or less mid last year, when the trade war rhetoric heated up. This is having an impact on our economy as a whole. Starting from summer, we are seeing more impact on more visible sectors, tourism. We are seeing fewer tourists arriving. Hotels are having lower occupancy rate. This is something we need to be concerned about. May is why the government have been launching various measures to help the economy, including the sm east. We have a platform to discuss with banks how the government has launched a new loan scheme, guarantee scheme. We have a 60 guarantee scheme to facilitate bank lendings. Lendings. Paul howard lee talking to yvonne man. You can get more on the story with hong kong and a roundup of the others to get your day going. Todays edition of daybreak. Bloomberg subscribers, go to dayb. It is available in the bloomberg anywhere app. You can customize settings so you only get news on industries and assets you care about. This is bloomberg. Shery i am shery ahn in new york. Paul i am paul allen in sydney. Over the weekend chinas unveiled the neo third major project in its lineup. Tesla will start delivering china built cars on monday bringing more competition to electric vehicle makers. Selina wang joins us from beijing with more. Neohas been under some financial faculty. What is the plan to stay afloat . Reporter it is only a few years spent much on marketing and Product Development and been burning through cash faster than tesla. The company has been scaling back on sis on spending. It has been scaling back on employees. It will be able to remain competitive despite the looming tesla threat. The company has received 100 million in notes from the ceo as well as tencent, which is a major shareholder. The company is restructuring its business and spinning off the noncore businesses. Despite downsizing analysts have noted it will be difficult for nio to sustain its business. You got more financing otherwise and you could ramp up faster and continue to cut costs even further. Things are starting to turn around ever so slightly. We have seen demand pickup. The Company Launched a new suv ahead of the weekend. There is 0 interest for three years and guaranteed subsidies for cars registered before the end of 2020. And it will probably rise 44 next year to 30,000 vehicles for nio. Things could be turning around. Look at the stock price, investors have not been bullish. Shery tesla starting delivery of its china built cars in two days. It is amazing to see how fast tesla has set up their factory in shanghai. What are we expecting . Selina we have been eagerly anticipating this for months and things have been moving quickly money andn terms of financing, getting electricity at the plants. We are awaiting the rollout of the first 15 units that will be delivered to employees at the shanghai plant. This is teslas first car manufacturing plant outside the u. S. It is chinas first fully foreignowned plants and represents how fast things are moving for tesla and the relationships built with the chinese government. We found out tesla cars made in china were included on a list of vehicles qualifying for exemption for a 10 tax in china. The factory represent how successful track tesla can go up against competitors like nio and others that are trying to break further into chinas ev market which is the largest with players like mercedesbenz, audi. Ceoen to what Loup Ventures gene munster had to say for teslas global ambitions. Rice dont have a specific target. It is worth more than the current market cap. It will be bumps in the road. China will be a positive swing factor but ultimately this a much bigger ambition beyond china and capitalizing on the 90 million vehicles sold every year and turning those into electric vehicles. Investors are watching closely to see what this means for tesla stability in china and ability to go global. They have plans are manufacturing plants in europe. For manufacturing plants in europe. 1000musk wants to produce cars a week in china. We are going up against the end of the year and havent reached that target yet. We will see if they can hit that next year. Paul thank you so much for joining us. Lets get a quick check of the latest business flash headlines. Musk has Great Expectations elon musk has Great Expectations. He says spacex could launch its starship vehicle in the next two or three months. It will transport people to the moon and mars. He unveiled this in september. Shery egypt signed off on acquisition ofs kareem. But other things to keep the local market competitive, it includes other companies being able to view ubers trip data to encourage growth in the market. Uber announced its plans to buy kareem for 3 billion in march. Paul the month macau monthly can sunoco monthly casino revenue is expected to plunge. Gross gaming revenue is estimated to four by an average analystson year, nine were surveyed. It is worse than the 8 for last month and marginal 3 drop in october. Isry a u. S. Billionaire nearing the end of purchasing an italian soccer club. The report says the deal could be finalized by the end of the year with him buying the club from his main shareholder. Valued 872l be million u. S. Shares raised in italian trading on the prospect of a deal. Plenty more still ahead. 2020ro strategist has his forecast for asian equities and other asset classes. This is bloomberg. [ dramatic music ] this holiday. Ahhhhh ahhhhh a distant friend returns. Elliott. You came back and while lots of things have changed. Wooooah woah its called the internet. Some things havent. Get ready for a reunion 3 million light years in the making. Woohoo yeah good morning. We are under an hour from the open in japan and south korea. Shery i am shery ahn. Sophie im sophie kamaruddin. Welcome to daybreak asia. Paul our top stories, volumes are low but sentiment seems high as markets in joint a year in recovery enjoy a year in recovery. There is less optimism