China says the ruling is a farce and criticizes the u. S. Response. Bernie sanders endorses Hillary Clinton and a show of unity against donald trump. Can clinton win over Bernie Sanderssupporters. Let us know what you think of todays top stories by following me on twitter. Dont forget to include trendingbusiness. The china and hong kong markets get underway in 30 minutes, but singapore, taiwan, and malaysia have come online. Here is a look at what is happening so far. Juliette the bulls are back, another positive session. At aprilnal index is 28 highs. Adding to the 6. 5 gain so far this week. The yen posting its biggest 28 twoday drop. , thee austrian sharemarket losers are gold stocks. This is showing the risk on appetite in the region. Gold in the new york session fell by 1. 6 , the biggest drop in six weeks. Solid support from other mining players lifting the asx 200. Korea had a better than expected employment report, unemployment falling to 3. 6 , the kospi well supported there. A flat start in malaysia, and a good pop in taiwan. The new Zealand Market is pretty flat, up 11 of the past 12 sessions. We are waiting for the china trade data at the top of next hour. We have had australia july Consumer Confidence falling 3 month on month, taken when the austrian election uncertainty was still happening. All looking pretty good. Angie you can say that again. Thank you. China has rejected the ruling of ,n International Tribunal rendering and valid its historic claims and the South China Sea. The case was lodged by the philippines three years ago, questioning chinas Land Reclamation activities as it tries to extend its global power. Lets get now to our Southeast Asia correspondent. Chinas response was really no surprise here. You are right. Immediate,e was unapologetic, direct, saying the ruling is null and void. It called the tribunal illegal and ridiculous. It was unexpected reaction. China made it clear from the start that it wants no International Arbitration and will not recognize the verdict. Toll, a hard one for china chinaw, the hague saying has no control over the resources, never mind that china has claimed 80 of the waterway. Sovereigntyshows line. He 9 there is some talk about china compliance. The hague ruling is technically binding, but china has said it will not comply. Oh, you bet. It is binding. You can imagine that other claimants would welcome it and be an powered by it. The ruling lacks the mechanism for enforcement, so it cant be enforced. So what now . What will china do . Talks, or will it be more aggressive and confrontational . The philippines are hoping cool heads will prevail. Take a listen to its response. Concerned to those exercise restraint and sobriety. Firmsilippines strongly a its respect for this milestone decision. Resolution, that is what everyone is after. Angie but that spat really reflects influence in asia. What is the u. S. Stand on this . They do not take a position on the claims, but has given support to its allies, sending navy vessels to ensure freedom of navigation. The waterways are important to the u. S. Because billions of dollars of trade passed through the area. We had Hillary Clinton saying a deep ands. Has abiding interest in the South China Sea and it is important for the claimants to abide by the ruling. It is a potential hotspot if tensions get escalated. Growing problem here and this region, and we are watching it closely. Thank you so much for that. Lets take a look at some other stories we are watching today. N, but this time it is a good thing. Rosalind Bernie Sanders has endorsed have a clinton for president. Sanders took to the stage at a rally in New Hampshire on tuesday in a show of unity. Sanders said the campaign is about addressing the needs of the American People and the serious crises facing the u. S. Mindere is no doubt in my that as we head into november Hillary Clinton is far and away the best candidate to do that. Opec says demand for oil will rise next year and global supplies shrank. Output from nonopec nations has fallen. Said its members will need to produce 33 Million Barrels a day in 2017, 142000 and day more than june. Oil prices have recovered 70 from their 12 year low earlier this year. Chinese buyers slowed the pace of land purchases in the first half, joining developers on the sidelines and setting the stage for further price declines. Outbidd developers had hong kong firms in recent years, but this year participated in only two of eight tenders. The tepid demand from china as to market headwinds, with prices dropping 12 from a september peak. Home sales this lowest on record, land sales suffering. Angie Amc Entertainment will for 1. 2n cinemas billion dollars, expected to be the biggest u. K. Take over since the brexit vote. We have our media editor joining us right now. This really extends amcs ambitions, doesnt it . It does. With this deal a sickly if it goes through, amc deal basically if it goes through, amc will be the biggest operator of movie theaters. It has over 2000 screens across countries such as the u. K. , spain, and germany. Angie what does this mean for the carmichael deal . The first thing you can notice is that it reduces amcs needs to buy carmichael. Basically they are similar in terms of scale. They both have just over 2000 and 200 2000 screens theaters. Cody on generates a little bit more money, but roughly they are the same. Angie roughly the same, but this is a feather in his cap. This is part of his global strategy for his entertainment empire. Obviously he has other assets such as stone production, theme parks, and what have you. The purchase of additional movie theaters increases the scale. That scale matters when you have movies coming out for example like or craft recently came out, turning out to be a flop in the u. S. Angie but it was huge and china. Part of the reason why is that he owns most of the movie theaters. Angie did he put that as pretty much the only thing to watch for that one weekend . I dont think we can prove that, but it was showing a lot. , aie it is interesting monopoly there and china. Thank you for that. Still ahead on trending business, trade implications for u. K. Post brexit. We will discuss with Peter Mandelson later on in the show. Plus, watching the fed. Our next guest critics one rate hike before the election. This is bloomberg. Angie a quick check of the latest business flash headlines. Replacing sharp on the nikkei 225, the troubled electronic maker will be removed on august 1. It has exceeded assets in shares and drop 39 . They agreed to share a majority stake to foxconn. Banks next central governor will face a tough task as inflation holds at a 22 month high. Prices jumped in june, in line with analysts expectations. The outgoing chief wanted to ease inflation to 5 . The government will announce the replacement this week. Thank of England Governor Mark carney has denied undermining the institutions independence in the runup to the brexit vote. The central bank chief was criticized by leave campaigners for warning that leaving the eu could weaken the pound and cause a recession. Mark carney has told a Parliamentary Committee that he was not trying to pressure anyone. Englandine of bank of are the lines of the policy committee. I did not prejudge the line. Thats not the way the system works. That is not the way the system was set up. Angie markets say the system looks pretty good, at least right now, post brexit. We are back to gains, checking in on the market in joint by the chief market analyst at investec. Hes. Invest securities. We are in a major risk on sentiment right now, but the question we have been asking all week, how long does this last . I think it will last a while. Good morning, angie. I think what was important last week were to events. First, the u. S. Tenyear bond yields hit their lowest level ever midweek. After that, the jobs report came out and blew away expectations. Is nowmployment rate comfortably below 5 , and since then over the past 72 hours there has been a real revision and expectations, a real mood of positivity because global yields on debt are at historically low levels while the Worlds Largest economy in the world is proving that its economic recovery is sustainable and consolidating gains. Angie is it though . It . By janet yellen that the may jobs report was a oneoff. By that measure shouldnt we say that june is a one off as well . We have not seen a sustainable trend yet based on june. I think it should be september at least. That puts us in a time range where the central bank might or might not act to raise rates. The question is, within the next three months, how do we know that global weakness will not impact u. S. Economic recovery . Good point. Its not just the jobs rate. If you look at base metal prices, they are stabilizing and recovering from depressed levels. Energy prices have consolidated and started to improve. The brent crude price is not where it was two years ago, but 25 dollar reach those levels that analysts were calling for three months ago. Postbrexitat the follow, it has been contained. The bank of england at the table making sure there is no financial contagion. What you will see is the fed making the case for its next move. We said at the beginning of the year that they Fourth Quarter was the most likely on this program on record. We stick i that, and i think the market is starting to realize that it will be difficult to brush off as a once off. Factors, many other corporate profitability in the , so thats why the stock market in the United States is at an alltime high one week after bond yields hit alltime lows. Beat ors it earnings easy liquidity globally . Rates, ite fed raises is still near zero. Are we looking at stimulus ecb, still boe, boj, an easy money world environment . If you take disney for mple, disney is a business and that is unbelievable considering bond traders are willing to lend 30 your money to a corporate at that rate. The beauty for a corporate is they can access a corporate with strong Balance Sheets and reinvest into a business that they might only be generating 6 or 7 mother that is still a nice bread away, and that is what generates earnings. Starting Balance Sheets and profitability and what drives corporate earnings, the cost of debt is a major factor in a businesss ability to go out there and grow. When your cost of capital is low, many s p 500 businesses are by their nature good businesses, thats why they are in the top 500, and that flows through the stock market and drive stock prices high. Angie that is a great point. If you invest in your business, we are seeing buybacks. Sorry, i did not get that last point. , the cost ofy debt debt is very low, absolutely true, great for corporate earnings may be true if you invest in your infrastructure, in research and development, but what we are seeing is that a lot of these companies are driving gains through buybacks. Well, lets go back to the analogy. If you are trading on a 20 times earnings multiple, that implies 5 , so your business is trading on a 5 yield. If you can borrow money at 3 , it makes sense to borrow at 3 and invest at 5 . Markets giving you that opportunity, the buyback opportunity may be the quickest way to generate by you. If bonds are higher, that wont work. At because they are historically low levels, 2 or 3 , and come back and buy stock on a 5 or 6 yield, it is already value added. The best businesses are those they can reinvest in their businesses and get a higher rate of return. Drives the big premiums on certain stocks, and thats why they outperform the market. Not every business can do that. Angie you are totally right. Are there some sectors that are doing it better than others . Think if you look at the United States, the technology space, twothree years ago, there were doubts around valuations. One of the most important transactions is microsofts acquisition of linkedin. That underscored the valuations. There was a lot of doubt that these valuations were fluffy and not real. Now they are real. There is a benchmark in the market. Businesses now have momentum and will continue to innovate around the world. To talk toys good you. Thank you for that. Coming up on trending business , this is bloomberg. Angie the u. K. Will push ahead xit the eu. To e i think it was foolish to call for a vote. By David Cameron . Yeah, he expected not the vote he got. Clearly. Why would you have something at a 50. 1 t as that vote . I think the issue of immigration is critical. Obviously it is a problem throughout europe. It is just the first of many countries that might destroy the eu as we know it. Immigration for everybody, for those who want to have it modified . That is a hard question to answer right now. It is a very hard question and they are still struggling through that, but you think the doomsday scenarios we heard before the vote took place, do you think they will still play out . I think it will have an impact. First of all, you have to negotiate all the terms. How long will that take . It may take two years or four years, who knows . Happens, nohat British Company can passport into europe, so you will have to redeploy people and decide what countries they are going to, ireland or the netherlands or where . People leave come all the businesses leave . People think so leave, all the business . I dont think so. Angie how about you . We have a new company that passports into europe. Change that. To i dont think the Insurance Industry will change that much. Lloyds will be lloyds. I dont think that will be a big problem. That will take time. The Automobile Industry in the u. K. Will be hard hit. Once you get rid of all the treaties, economic treaties, that is going to cause a problem. You have to renegotiate those. Angie that can take years, decades. Right, so there is a lot of uncertainty. Do i think there will be another vote . I dont think so. Even though there will be a new Prime Minister, the second woman coming in and history of the u. K. , but i dont think that will happen. Angie why . I think they are stuck with what they got. I dont think that will change. This top stories trending hour, japanese shares on their biggest threeday surgeon six years while investors wait details of the new stimulus plan. And join global stocks wiping out postbrexit losses. Highs not seen since april. Crude has reversed some of last sessions 4. 6 jump. China,ake a look at rejected what it is calling a farce, a u. N. Tribunal ruling has no legaled it claims to the South China Sea. The case was brought by the philippines, and the ruling and validates the line by which china claims 80 of the waterways, 5 trillion in trade. The decision has inflamed tensions with the u. S. With beijing protesting against washingtons response. Sanders here, formerly and doors to Hillary Clinton as the democratic president ial nominee. The vermont senator join the former secretary of state rally in New Hampshire saying that while it is no sigrid they disagree on a number of issues, she is far and away the best credited to address the crises facing the u. S. There it is right there. And hong kong markets have just come online. We have a look at what is happening so far this morning. Juliette yes, the shanghai open, awaiting china trade data later today. By ahanghai composite up 10th of 1 , not very strong, but hong kong up by. 5 , so adding to those solid moves. Seeing to what we are seeing from Similar Energy players, that rebound in oil, up by 1. 2 . Shares leading the gains on the hang seng. Taiwan has had a switch out, but solid buying in Southeast Asia, philippines up by two tens of 1 . Japan leading the region higher. The regional index at the highest level since april 28, and japanese stocks having their best threeday gain in six years. Up 6. 5 before the start of todays session, up by another wait fory as investors the proposed stimulus plans from Prime Minister shinzo abe, what format that will be, and the yen continues to weaken. Korea had a positive employment report come through today. Having a look at some movers, yamaha up by 2 . At one point up 10 on the nikkei 225 as yamaha motor overtook sharp on the index, so sharp has been excluded from the nikkei 225. Nintendo coming off after a very solid session. 4 , not surprising some profit taking there. New crest mining leading gold players lower as gold had quite a fall in the new york session, the biggest drop in seven weeks, showing the fact that we do have this risk on sentiment throughout the region. The yen, stronger there, 104 point 64, but certainly not having too much of an impact on japanese equities, which continue to rise. Angie thanks. Nissan rolling out its take on the autonomous car. It is a prototype based on its leaf electric model. Lets go live. We are at the event at nissans global headquarters. All right, you got in that car. How did it drive . Action, you did not have to drive. Actually, you do not have to drive. Exactly. Handle singlee to lane highway driving autonomously. All you have to do is press a button and the car can break, accelerate, handle stop and go highway traffic. Underespecially helpful heavy highway traffic, because that will relieve the stress from the driver. What is the Technology Behind this car . Right, nissan uses a camera to detect obstacles. It is working with mobile i to develop a system mobile eye to develop the system. The technology is groundbreaking. A lot of the features are available on premium car brands. It is still very nascent technology. Introducing this technology in a minivan in japan. Say you lookedo a little hesitant to take your hands off the wheel. Fatalityeard about the with teslas autopilot program. How much of this technology tobles you to feel confident let the car takeover . Actually nissan designed limitations that requires you to put your hands on the steering wheel. If you take your hands off the wheel, it will send you a warning. If you ignore those warnings, disable thet will autonomous driving function. Nissan will make sure its dealers are informed and that they inform consumers of this autonomous driving limitation. The whole point is to let consumers know that it is not a driverless car. It will not take you from point a to point b. It is only designed to relieve the driving stress. Angie thank you so much for that. I think i want to do it on my own if that is the case. Thank you for showing that technology to us. China has rejected an International Tribunals ruling against its territorial claims in the South China Sea. It is a blow to beijings prestige as a rising global power come or is it . Power, or is it . Does the ruling give any support to chinas claims whatsoever . It really doesnt. Ruled that china had no historic rights to the waters of the child sign a waters of the South China Sea. On all the counts that the philippines brought against china, china lost one by one. Is the courtreed never purported to address questions of sovereignty, where china claims to have sovereign rights over certain land features, the court has not disputed that. Will this ruling change in the backs on the ground . Canhere anything the world do to bring china into compliance . There isnt in the short term. There is no International Maritime police. The court has no enforcement powers. Tores no way to get china unveil these artificial islands they have created or vacate them , but in past instances where countries have initially defied international rulings, public pressure over time has brought them closer into compliance, and i think it is important for the u. S. , the philippines, the eu, to keep the pressure on china and make it clear to them that if they want to be a part of the global system that they have to play by the same rules as everybody else. Angie what is the best Case Scenario here . What role does the u. S. Have to play . Shortterm, nothing happens. If itatus quo as it is does not change right now, that will add no new provocations. If china does not declare an air defense own or start reclaiming other features, that will open the door to negotiations. Theyhilippines had said were willing to sit down with china and talk by literally about the dispute and resource sharing and so on. The role of the u. S. Is to , toort the global rules sail its ships were ever global law allows them to do so. It has become much more clear where that is. The, to maintain unity in face of what could be continued chinese defiance of the ruling. Angie thank you so much, live in singapore. There is plenty of money out there. The problem is that there is little to no yield. Push into riskier assets, stocks have gone up and out. David, take a look at where we are right now. David we have been talking about the s p at a record, the dow jones follow suit. This is a year today chart. That means that there is so much money out there, i think we are seeing that play out not just in equities, but when yields come down to record lows, equities are on the way up, gold, Corporate Bonds being bought up, so this is just one facet, but a small part of this global rally that we are seeing. What we have seen this week, and we are only into wednesday, three other markets have entered a bull market, so we are looking at the ftse 100, india entered one on monday, and of course thailand entered one yesterday, so three new markets added to this list. Normalized and based on an index that shows a 20 pop. The latest index to come in to this bull market, that is your 20 . There we are. Have a look at this list. We are looking at more than a handful now. There we go. Lets just go through each one. India, i mentioned that. The philippines has been in a bull market, indonesia as well, thailand. Has an upgrade from msci, and vietnam has all guns blazing. And thailand more will be in that list. 5 more, hong kong, and singapore as well. Let me wrap ins up with this. This is a market that has been battered and bruised. Daysikkei 225, best three in six years. Growths is happening as forecasts have been revised lower, earnings are not expected to improve substantially. , how just funny, angie there is so much joy, love, and glee being tossed around the markets when the world, as we all know, is not in a better place. Angie great point. Bernie sanders has endorsed Hillary Clinton for president , but some of his supporters are less than and pressed, and donald trump is trying to convert them. We are taking a look at what social media has to say. Even as Bernie Sanders spoke with Hillary Clinton beside him, there were shouts from the crowd, never. The two sides have had their issues, and Bernie Sanders did say they have not seen i to eye on a number of issues. Some of the more hardcore Bernie Sanders voters could be feeling disappointed by this. Weve had had a lot of comments on social media about this. One saying that we feel betrayed. Another saying that this is where we part ways. Another person with a picture of bernie posters in the trash bin. Saying that if it is not bernie, it has to be hillary if you want to support the Democratic Party. Bernie sanders is trying to bring the republican the Democratic Party together so that they can push forward in a more unified state. There is still a lot of division about supporting donald trump with the republicans. Angie is this establishment versus antiestablishment, which is what Bernie Sanders represents, which is what donald trump represents . Donald trump is using the situation to his own advantage. Some ofying to take those Bernie Sanders supporters for himself. He has been saying Bernie Sanders endorsing crooked Hillary Clinton is like occupy wall street endorsing wall street banks. Basically if you want to stop bad trade, we welcome you with open arms. Basically, if you dont want to vote hillary, trump will have you. Eyes are turning to who the running mates will be a head of the National Conventions coming up for both sides. Angie we will look to social media and you for that as well. Im sure there is a lot of speculation. Coming up, life after brexit, the former european trade commissioner expects problems ahead. This is bloomberg. Angie a quick check of the latest business flash headlines. Airbus says it is cutting area output for the worlds biggest passenger plane. The company once predicted carriers would by 1200 superjumbos, but has delivered only 193 with one of 26 more on its order books. Rate,ched a break even but will cut that to one per month in 2018. China National Chemical corp. May be making a move to fund its acquisition. Sell 10planning to billion of preferred shares of one of its units. We have been told that the companys plans to raise another 15 billion in cash, bringing the total equity contribution to 25 billion. The plan takeover still needs approval in the u. S. Critics higher demand next year as global supplies shrink and saudi arabia comes near record levels. 14 members say they will need to produce 33 Million Barrels a day next year as production from nonopec nations falls. Oil prices have recovered more than 70 from their 12 year low, output in the u. S. Has retreated to a twoyear low. Peter mandelson had warned that breaks it would have a Significant Impact on the countrys trade deals. Would have at Significant Impact on the countrys trade deals. Lets go live to singapore. We are standing by with Peter Mandelson. Brexit,orning after Peter Mandelson declared it was the worst day and postwar british history. He joins me this morning. Good to have you with us. Is not looking any better, by the way. In fact it is looking worse because of a lack of leadership. Is theresa may the right person to provide leadership in such difficult, challenging, and trying times. Sheet is the only one we have to chew will now become Prime Minister. Anid cameron after ignominious defeat and this referendum and the appalling tactical blunder he made in calling this referendum in the first place is now going to walk away into the political wilderness. Indeed already have so many of those who have advocated leaving the European Union. One by one day have taken to the thes or been knifed in leadership fight that has engulfed the conservative party since then. Angie if she going to be any good . She is the last woman standing, thats true. She has got to undertake a really comprehensive, intensive, objective analysis of what this decision really means for the british economy. As well as british influence in europe and the rest of the world, but of all, for our economy. Although there was an enormous amount of debate during the referendum campaign, what most people were focused on was not the economics, not the impact on trade, not what it would do two jobs and living standards, but on a whole raft of other subjects, notably immigration and peoples anxieties and concerns about migration in europe. What theresa may needs to do is put before the British Public what the full implications are of unwinding 40 years of close britain integration by into the European Union. I think that when they see that, they will then start to really britainreflect rather more realistically than they half on what the consequences will be. Angie trade negotiations are crucial. You yourself have said that having been with the eu, part of the eu, for so long that no good trade negotiators are in the u. K. How will it transpire . The last time britain employed anyone to negotiate a trade agreement was in the 1970s. I know a handful of officials in the British Government who look at trade, and a century what theyre doing is informing british ministers about what the European Commission is doing on their behalf and conducting trade policy. What is going to happen first of all is that the entirety of the British Government, and of course scores of officials in brussels, our first of all going to be preoccupied with working out what this means for britain and europe. It will be trade between themselves, but they have to focus on that. That will take years to first of all undo the arrangements we have at the moment and then start putting together and making some crucial decisions near in britain wants to end up with respect to europe Single Market or how far apart. There is a very big judgment call that the British Government will make an which the European Union will negotiate with us on. We have to leave it at the moment. We will continue our conversation right after this break. Stay with us. This is bloomberg. Angie welcome back to bloomberg. Back to bloomberg. We continue our conversation with Peter Mandelson. She can getsaid better trade deals with the eu. What hurdles you see her having to undertake . That is the right call for her to make. In andthan go rushing triggering article 50 and trying to start negotiations to leave, what she needs to do is gather as much information around her, britishat with the public about what leaving actually means and what alternative relationship with the European Union we want. I think that will take quite some time. I think that will take months. Surprised if she and the government were in a position ready to act on this until the beginning of next year. Toe they do that and applied leave and trigger article 50, they then have two years essentially to start unwinding our involvement in the European Union. A whole series of chapters of negotiations, starting very importantly with the eu budget, where we make a substantial contribution. They dont want to be left overnight with a great hole in their budget, so how that is phased out will be the subject of lengthy negotiations. All this will go on over a couple of years. It is only after that that britain will then start renegotiating with the European Union about the sort of you to relationship on trade that we want with europes Single Market. How tough do you expect the eu to be . He president had said that will play hardball and this will be a deterrent for the rest of the eu membership. Ofi dont think the spirit the remaining states in the eu will come to this. Look at it from their point of view. They are a very large and very important and very successful club. You cant have members of the club simply opting to leave, then saying we will not abide by your rules, pay your membership subscription. We just want to keep coming in and using your facilities when we want. That will not work. I dont think they will be chair picking cherry picking what they want or doing ything other than applying the standard rules to us. Thank you for your insight. Bloomberg will be right back. Stay with us. Traveled. To. From our studios in new york city, this is charlie rose. Charlie we begin with the aftermath of the shootings in dallas. Mourning after Police Officers forgotten down at the hands of micah johnson. It was the deadliest day for Law Enforcement since 9 11, on the heels of two caught on video shootings of black men in louisiana and minnesota. President obama will speak in dallas