Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20171031

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manipulation of social media and says they were caught flat-footed. ♪ betty: speaking about russia, it within the last hour a new headline about george papadopoulos, the former trump advisor. some claims he made in an email stating top trump campaign officials agreed to a pre-election meeting with representatives of russian president vladimir putin. we saw inrevelation the last couple minutes, bolstering the claim and making it harder for the trump administration to distance itself when it comes to these meddling issues, as well as collusion allegations we continue to see. how we have to look at this with a grain of salt, the details still unclear. betty: it is still a little murky. let's get clarification with megan murphy, our bloomberg's nest week editor and washington bureau chief. how significant are these new claims? >> every revelation that comes out of this nature is significant in that it furthers what we know, expands on the investigation in terms of what is out there. this program bloomberg in the past half hour. we were pushing ahead with the story. in july, to reporting, send anapadopoulos email indicating the trump campaign had approved a meeting in the u.k. between representatives from the trump campaign and those from the putin administration. there was no indication that meeting was ever set, that it ever happens, that that meeting was actually approved. but that email was taking the -- telling the truth about what happened. the trump administration has hit that hard. they characterize george papadopoulos as a low-level player in the campaign. it will draw further questions, scrutiny, drawing the circle closer and closer to the extent. betty: where there is smoke, there has got to be some fire, right? right trump white house when they say he was a low-level advisor, or that he did not have as big of involvement? these headlines are making a sound? megan: in terms of being in the inner circle, no. but this is someone trump ancribed as a great guy, at important foreign-policy meeting. a volunteer, we should point out. someone characterized him as somebody who just got coffee. here is what is significant. mueller, whatat he is doing to build this investigation, you can see the trend of where he is trying to take this. the manafort and gates stuff about laundering money and not disclosing their work as they should have, that is one trend. another goes to the issue of, was there collusion with russian contacts? and was there lying about the extent? that is what they are focused on. that is what the american people wanted this investigation to be all about. we were just talking about how the focus might turn next to sam clovis. what can he provide? megan: he is linked to george papadopoulos, a linking of what it -- was instructed. clovis has said there were strict rules about people representing the campaign abroad, strict rules about what they cutting could not do. yes, there are a lot of theerent figures investigation is swirling around. michael flynn come on the democratic side, tony podesta, famed powerbroker, has stepped away from his lobbying firm, also involved with manafort in ukraine on that side. there are number of figures. circle ofry wide people. when you look at the white house and how they have responded, they have been consistent in their distancing. a standardt taking lawyer saying, i will not comment. you have characterized george papadopoulos as a liar, having nothing to do with the campaign. they are saying paul manafort was a minor figure, despite he was campaign manager. we know have the trump administration acts in these situations and expect they will continue to take a tough line. we learned yesterday papadopoulos had pleaded guilty a couple weeks ago. he has agreed to cooperate with mueller. we have not heard that from manafort or rick gates. do expect them to cooperate with mueller? megan: anyone knows this will be a sophisticated dance, that indictment of paul manafort was sobering for many republican officials. sobering for the white house in terms of the gravitas and the seriousness of the allegations. this is amanda was the campaign manager of the current president, essentially mock -- laundering money and failing to disclose massive influx is from foreign government contacts. that is not something to take lightly. it is going to be fascinating to see how this plays out in terms of cooperation. the charges are what they are, they are very serious. they will be addressing paul manafort, to see what kind of deal they can extract. and if they think he is a linchpin, they will be pushing firmly with serious charges. yvonne: thank you, megan murphy, joining us from our context as we learned more detail, papadopoulos claiming the trump campaign had approved a russian meeting. we will have more info once it comes through. big tech, the story today. russia's influence over social media in the election is still unclear. they do not have the power to prevent it. lawyers from facebook, google and twitter testifying how russia manipulated social media to allegedly influenced last year's election. they were caught flat-footed but are working on a response to future threats. bergen,t more from mark who has been following the hearings. what were the key highlights? looking whatut happened more so than providing any sort of solution. mark: the tech companies were the most contrite. they came out and said we aknowledge this problem was bigger than we saw after the election. transparency and about what they are working on. a lot of it was political theater. they hit facebook hard on, how are you not aware of this problem? and what can you do going forward? senator kennedy talked about what about potential advertising with north korea and china? none of the companies could address that. there is debate on if should be companies considered media companies. should the government step in? .that was addressed they said, we are technology companies. they said they were mall -- more culpable about what happens on their platforms. there is only one republican cosponsor for legislation. it is hard to see it become immediate and far-reaching legislation. this is a prelude to the hearing tomorrow. betty: what might we hear in those hearings? mark: i think we are going to get a rehashing of that. full extent companies have to be responsible for, the political advertising bailout on the platform. we see a bigger reach for organic, non-pay. bots control accounts on twitter or youtube, was not necessarily advertising, but the fundamental ways these tech companies are structured. we will see if there is a challenge or if they force the companies to change a lot of their fundamental architecture. betty: certainly going to be some changes. mark bergen, thank you so much on the hearing of tech companies. facebook is reporting their results tomorrow. you are going to see a lot of action in the markets. you already saw it in the session today. we were 60% through the earnings season. markets closed higher. let's pull up the board will be ended with the u.s. markets. closing up a month where we ended 1000 points on that dow jones. the dow up 0.1%. the nasdaq gaining ground, up 0.4%. no spirit is in the markets, very comforting for the bulls. we have lots of news, the fed meeting, and who will be the fed chair. yvonne: and tax reform, a little more detail on that. pretty quiet to wrap up the trading month. on wall street, the best month since february. let's see how things are airing in asia. 0.7% on thedown asx 200. the kiwi jumping 0.7%. jobless rates falling to a seven-year look -- eight year low. pmire expecting china numbers after the official manufacturing came out soft. shares, up for the asx 200. aussie.r the the dollar not doing a whole lot overnight. japan futures in the green. the boj did exactly what was expected yesterday, no change on policy. they did cut the inflation forecast, dollar-yen hovering 113.65. looks like we could be seeing upside in the tokyo open. let's get the first word news with jessica summers. >> president trump has condemned the killing of at least eight people in the truck crash in.new york -- in new york. it happened when a man in pickup truck drove onto a bicycle path. he drove -- he jumped out of the truck carrying what -- was a fake gun. tweeted,dent has just my thoughts, condolences and prayers to the victims and families of the new york city terrorist attack. god and your country are with you. catalan leader carlos priest t accusedpuigdemon madrid of a widespread and dangerous move against the separatist movement and said it would only slow, not stop the creation of the catalan republic. says the matter is an internal one for spain. guarantees ofre the fair treatment, and if you could understand the direction of the state, they could guarantee to all of us a fair prosecution, which you see in most european countries. the latest fed meeting has gone largely under the radar, amid speculation of a new chairman. we will have a statement later, although no one expects a change of course. a hike remains a possibility, providing policymakers are comfortable with the data. rate hikes are still seen as regular, but gradual. we will let special coverage of the fed decision from 2:00 p.m. philrn with analysis from gross, and blackrock's jeff rosenberg. china is said to have granted approval for some mainland companies to sell bonds overseas. to the matter is that the green light came dr. the end of the communist party congress last week. it was beijing's first dollar bond offering since 2004. it reached 11 times the issue size and traded tighter. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers, this is bloomberg. betty: looking ahead on "daybreak asia," we will talk tax or form with pwc. how plans could affect the u.s. economy. yvonne: bitcoin jump to a record after the world's biggest exchange owner, changing his tune. this is bloomberg. ♪ betty: we are getting a statement from the white house , the shootingg that happened in lower manhattan. the statement, our thoughts and prayers are with the victims of today's terrorist attack in new york city. this is where a people died and several dozen were injured, when this alleged gunman rolled into several pedestrians, hit a school bus, came out with many thought was a real gun. it was a pellet gun, he was shot down in critically injured. quite significant because we heard the mayor call this an act of terror. the president calling this a terrorist attack in new york city. yvonne: he condemned it earlier, the president. it seems he has changed the statement of course. details about this unfortunate incident, at least eight killed. details are coming from law enforcement officials, saying the attacker to get out of the truck, he was heard yelling "allahu akbar," which is arabic for "god is great." that is the latest. the driver of a truck with a 29-year-old man who came to the u.s. in 2010. condition,ave according to some officials. he had rented that truck from new jersey. betty: home depot saying they cooperated with authorities. he came out with a pellet gun, which authorities thought initially was a real gun, which is why he was shot down. we will continue to monitor the comments coming out from the white house and anymore headlines on his condition. in the meantime, bitcoin a topic of conversation for the markets, surging for a record on the group plans the cme to announce a futures platform by the end of the year. i want to bring camilla russo. why was this so significant for bitcoin? >> it means traditional investors might come into the space. they had been largely in the sidelines, more than 500% this year. having a derivatives market might make it easier for them, once they get it going to seal the contract and have investment in the cryptocurrency itself. have contrast against the risk. betty: does this lead to an easier approval of etf? >> exactly, it is the speculation after this announcement, in might be easier for the sec to approve an etf. one of the reasons they gave to reject earlier proposals was that there was not a derivatives market to protect investors in trading securities like these. yvonne: everyone has been talking about the rise, you hear the likes of jamie dimon talking about how bitcoin is a fraud, he would not want his employees to be trading it in any way. on top of those debates we heard, what are the risks we should be looking at? the risk specifically to the derivatives, the bitcoin derivatives people have been raising, is just how volatile bitcoin is and the price difference there is across different exchanges. these contracts will be settled in cash based on the bitcoin compiles. the cme they compile this index based on different exchanges. if it is different, it can become difficult to determine at what price the contract should settle. the cme is definitely trading on a new territory. it will have to see how it develops. thank you, camilla russo from new york. they say robots will be 20% of their business by the end of the decade, we hear from them next. this is bloomberg. ♪ ♪ betty: this is "daybreak asia." i am betty lou in new york. yvonne: i am yvonne man in hong kong. we will check the health of the chinese economy, the official gauge yesterday showed continued growth, but a slight slowdown in october. that was due to the kleins and new orders and prices. let's get well corresponding, tom mackenzie. theave been seeing difference between the public and private gauge recently. what are we expecting from the numbers today? tom: as you know, the number looks at the sme's in the private sector. it is a better gauge then we got yesterday. we are expecting it to come in line with what we got in september. a number of around 51 in terms of expansion. the official numbers were put down slightly because of the pollution curbs put in place, some of the deleveraging. we will see things like new orders and input, output prices. a will be affecting the private sector. we are in the capital of that province, there is a big push to implement those curves. there is a big push to automate. we have been speaking to the maker. largest appliance they have made a push into automation, robotics. they pivoted when they bought a german robot maker last year. this is a market in china worth about 11 billion u.s. dollars. to grow, fewer robots per employee than in countries like germany and south korea. medea is leading the way in many respects when it comes to automation. we spoke to the ceo and chairman exclusively on monday. listen to what he had to say about their ambitions for robotics. >> the robot business is expected to contribute 12%. we expect there will be huge and explosive growth in robotics and automation sector in china in the next few years. yet, we are only at the beginning. we hope that by 2020 the robot business will account for 20% of total revenue of midea. tom: midea's push into robotics dovetails with the government strategy to automate key sectors, including electric vehicles, health care and food production. midea have teamed up with a pharmaceutical company. it is the largest drugmaker here in china. what they plan to do is automate the production of drugs and pharmaceuticals, and also the way they are distributed as well. pretty ambitious plans. they are looking at investing in the electric vehicle space. it is a fascinating conversation with the ceo of midea about their push toward automation here. betty: what is a company looking at in terms of expansion? they are growing their revenues abroad by 40% to 50%. they want to expand that get the majority of their revenues from their international market, within three years. they have a cash part of a billion dollars which they could pull the trigger on to buy up other acquisitions. they have already made acquisitions with other companies, as well israeli company. m&a will be part of their international strategy. have enough capital for further expansion and are still very capable of further m&a. at the moment we are adjusting our orientation. we won not exclude the possibility of entering new areas in the future. our strategy is clear, our investment must target three areas -- household, building systems, and manufacturing industry. tom: investors rewarding midea for their strategy. cap, up this year. betty: tom mackenzie, our china correspondent. much more ahead, focusing on samsung shaking up the senior ranks after posting that record profit. we will look behind the name of samsung. this is bloomberg. ♪ yvonne: 7:30 a.m. wednesday in hong kong. a little chilly despite the sun. beautiful look outside the victoria harbour. betty: it is 7:30 p.m. tuesday in new york. halloween night, markets not closing too scary. quite in line with what we have seen all month long, gains across the board. i am betty lou in new york. yvonne: i am yvonne man in hong kong. you are watching "daybreak asia ." let's get to first word news. >> a former advisor claims president trump's campaign team gave the green light for a pre-election meeting with russia. if true, it would bolster claims of trump team colluding with russia. has pleaded guilty to a string of charges, including lying to the fbi. it is not clear if you was simply posting. big tech has told capitol hill the extent of russia's manipulation of social media and the election is unclear and they do not have the power to prevent it happening again. google and facebook, twitter began two days of hearings by telling lawmakers interference is a global problem. foral media faces calls changes following the election. president trump has condemned the killing of at least eight people in a truck crash in new york. incident happened at the world trade center memorial when a man in a rented pickup truck drove onto a bicycle path. he was shot by police when he jumped out of the truck holding a fake gun. president trump said, got in your country are with you. softbank fell the most in almost a year amid claims that attempts to merge t-mobile is on life support. they said it includes how many sprint shares they except for every t-mobile share. they are holding out foreign-exchange ratio. the u.k. is signaling it is prepared to compromise on the brexit standoff with new talks scheduled next week. negotiations have stalled with the u.k. continuing to demand more details for how much london will pay for the so-called divorce bill. brussels will not move on to trade talks until it is settled. they told lawmakers the ultimate deal with probably favor the e.u. >> in the famous words of the european union, nothing is agreed until everything is agreed. to withdraw agreement, on balance, will probably favor the union, in terms of things like money and so on. whereas the future relationship will favor both sides. >> global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers, this is bloomberg. ♪ betty: we are getting more earnings, the earnings season around the world, to chino -- shiseido raising their forecast operatingear 2017 profit forecast, 16% to ¥65 billion. along with other consumer companies is a good measure of the domestic and consumer demand in japan. it'll be interesting to get through the earnings to see how china fared, given the fact there was uncertainty earlier in the quarter of last month. talking about restrictions from some of these tour groups to japan and china. interesting to see them raise their forecast. as we have been talking about, halfway through the week of weeks three and -- weeks. plus, the earnings season has not let up. let's get more from sophie kamaruddin. is this the calm before the storm? sophie: looks like we can be off to a positive start. but it is an unkind month. wednesday and thursday could be pretty epic. with healthy corporate profits and economic signals looking decent, it has not spooked equity bulls. u.s. stocks have the best month since february. check out g #btv 7502. october delivered a historic winning streak. tuesday, a lower on drop-off and boj buying. although governor kuroda did push back against the notion they are tapering, saying there is no specific timing. to get a sense of the listlessness as we head into that fed decision, the dollar-yen tells a tale, g #btv 2320. it has been unable to break and hold 114 throughout the year. one month implied volatility has fallen to a four-month low. traders are sitting tight, given potential headwinds. let's pull up the futures board to see how it could trickle into the asian session. japanese stocks expected to most of the year. betty: is there going to be more fuel for this rally? sophie: we may see it come october trade out at the top of the hour. it helped to justify the rally we saw for the kospi and the yuan, jumping more than 2%. the kospi spread, exports growth driving the factory output we saw in september. this sentiment is also climbing for november. a strong macro backdrop supporting eps growth. thank you so much, sophie kamaruddin, with the preview on the markets. samsung, going to be in the spotlight, opening the next half-hour. that fresh, all-time high after posting record results in announcing new leadership lineup. stephen engle has been following that story. the senior shakeup, while the company just keeps progressing, humming along. stephen: who needs management, right? of course we do. record profits, better than expected sales. they were following on the same trend as sony, they are seeing their big turnaround on demand for displays and chips. samsung really humming along despitetheir earnings, the real vacuum in leadership structure at samsung. you have jay y. lee in jail. he is appealing the corruption convictions, but he is in jail. comaather, said to be in a since 2014, he is the chairman. stepped down, offered to resign two weeks ago, saying the company needs younger leadership to pilot the company through an unprecedented crisis, as he called it. they brought in a stable of new people. the two gentlemen on the left are out. gyo-young will likely be the new ceo. they have a three-tiered system heading up the positions. will likely have the top position. he spearheaded samsung's push into advanced memory chips. threember two and number one will head up appliance division at samsung. they will name a new chairman of the board, the cfo. he will likely be elevated to chairman of the board. usually the same song split -- this is the first time they have split. is verymind this complex leadership structure because the father, the chairman in the hospital, he is going to maintain his chairmanship of samsung electronics. he will be chairman of the board. it is confusing. changes goingese to keep samsung staying the course when it comes to record profits? thehen: there really riding coattails of the demand for smartphones and the memory chips. tight supply in the latest quarter really drove -- drove up isis. they expect tight supply and demand conditions and memory in the fourth quarter. they expect strong consumer device demand and service to continue into next year. senior that shakeup in management in samsung. we talk about cryptocurrencies, a little more about malaysia, fighting saudi arabia. a tough battle for dominance when it comes to islamic banking. in our exclusive interview, sophie kamaruddin spoke with the head of the malaysian securities watchdog, about how this competition will play out. >> i think growth of islamic markets in other countries is going to be important. it will help create a much bigger islamic finance industry around the world, and therefore growth in segments like saudi arabia and other parts, is actually a positive aspect of increasing the system. inthere was interest markets, but with fed tightening, haidi see this providing challenges? or is malaysia well prepared for such an event? around the world, if you look at it globally, there are around valuations around the world, particularly in the more developed markets. malaysia, wet of do not see similar concerns appearing. we have seen strong, stable growth. there are many opportunities for investors to participate in. reinforced by some of the measures we introduced in the budget, and introduced over the years here. he said a decision on cryptocurrencies will remain by the end of the year. what challenges might you foresee -- any progress in made? -- being made? wherekeep a watchful eye we feel there needs to be facilitation, we allow that. this particular segment is concerned, one of the aspects of digital assets such as cryptocurrencies is to be able to look at the trading aspect. we are currently keeping an open mind and engaging in the players. some of the players have come to talk to us. we have several cryptocurrency exchanges operating in malaysia. we are currently in the process of developing an appropriate regulatory posture around the segments. certainly engaging with them and them with us. their position from a global, regulatory standpoint has a different continuum. some have taken a harder approach and some have taken a facilitative approach. therefore, our position on this has always been a source trying to promote digital markets, we have been inclined to ensure we create a safe harbor for this to grow, and make sure investors are protected, and there is sufficient amount of investor protection in place, without stifling innovation. that is the same approach we will take in regard to cryptocurrencies. betty: that was the chairman of malaysia's security commission. a look at trends in u.s. real estate. are there signs chinese investors are pulling back from u.s. property? this is bloomberg. ♪ yvonne: this is "daybreak asia." betty: president has set a timeframe for when he sees tax reform passing in the house. i want the house to pass a bill by thanksgiving. i won all of the people standing get ready, when we design, by christmas, hopefully before christmas. betty: an early christmas gift to americans. joining us to discuss in new york is the pwc partner in business development. mitch, do you believe we will get the gift? >> it could be the gift that keeps giving. we will see tomorrow. there has been a blueprint, a one pager, a nine pager. tomorrow we will see his version of the bill. a lot of unanswered questions. theoretically they have been working on it for six years. their goal is to simplify, so hopefully they do make the bill simple. a lot of unanswered questions up until the 11th hour. ae property tax deduction, lot of states that pay a lot of property taxes. betty: like here in new york, new jersey. mitch: that could be in play. the death tax, there is talk about being in play. there was talk about on the corporate side phasing in the tax rate deduction until 2022. a lot of unanswered questions, hopefully we will have them tomorrow. betty: we talked to a professor who said the big question for him is, how much is it really going to impact the deficit? in the short-term, but also the long-term? would you agree, is that your big unanswered question? mitch: the debate is on unanswered questions. from a procedure perspective, the senate approved the $1.5 trillion shortfall over 10 years. the house narrowly passed this same budget. that does not mean it is what will happen in reality. revenue neutrality is what everyone strives for. there was a lot of budget cutting. we have not figured out the cost side of the equation. the plan is to be stimulative to the economy, and that is how it gets a form. the debate will be between tomorrow and thanksgiving if they can take something to the floor of the house. yvonne: does that include the slow rolling of the rate? do think phasing in these tax cuts would be better than having temporary tax cuts? the noise in the past 36 thereabout the phase-in, is a lot of pushback from the business community. we saw the market selloff on monday as a result because the goal is to reduce corporate rates to be stimulative. so the companies reinvest so they can distribute more to labor and drive wages up. if it stays between now and 2022, the concern for investors is that we would not see the stimulus we had hoped for. yvonne: if the business community is not in favor, what is the aim? is it toward getting democrats on board or states like new york and new jersey? mitch: yes, it is one of many trade-offs. word on the street, that phase in could be dead on arrival. we do not know if it is going to be in tomorrow. there is a lot of leakage of things being discussed, just to see what the markets reaction is. whether or not they make it to the bill in final form, the first version of it, still unknown. betty: i want to switch gears and talk about real estate. pwc released its emerging trends in 2018 in real estate. one trend now taking hold is chinese investors pulling their money out of u.s. property. barry to what very -- said. >> as an institutional money manager, some places capital continues to flow, places like the u.s., are korea, the middle east. we're looking to the future for japan. especially with the creation of the japan's sovereign wealth. that will make up for lack of investment, which has been prominent in the u.s. markets. betty: would you agree that is definitely happening and will grow? mitch: i think that was referring to the institutional side of it. on the individual side there is an offset because individual investors continue to like u.s. real estate when they can get it. in our survey the number one city which we have not seen being number one since 2009 was seattle. seattle is viewed as a gateway for japanese investors. for individuals. the survey focuses on commercial real estate, whether it is individuals or businesses, is indifferent. do have a west coast u.s. gateway city being number one. part of that is the robust economy in seattle. the wall of capital looking at it includes chinese investors. in 2018 will we see less money coming in than in years past? mitch: perhaps. one reason is not because of anything negative about the u.s., but other economies around the world are also growing. we have a wonderful thing happening, other economies that have been in recession are now in recovery. there is global competition, investors want to allocate assets. much, mitch, thank you so pwc partner. more ahead on "daybreak asia," including a preview of facebook or. they are out tomorrow. facebook in the hot seat in congress. this is bloomberg. ♪ ♪ ,"tty: this is "daybreak asia i am betty liu in new york. yvonne: i am yvonne man in hong kong. sony leaves new york, firmly on course with outlook for operating profit to a record $5.6 billion for the fiscal year through march. that is up from $4.3 billion. the last time we saw numbers like that were back in 1998. --mands for 4k tv's there were complaints over the premium we talked about. it charges on already expensive devices. best buy is one of apple's key retailers, but they should charged more. apple said that it has a cost. netflix has halted production of the final season of "house of cards," in light of a sexual harassment allegation against kevin spacey. they are now deciding whether to continue with season six of the show. they say they are reviewing the situation and consulting with cast and crew. "house of cards" is their first hit original series. betty: let's turn to facebook, the social media giant reporting third-quarter earnings after the bell on november 1. we predict they could have a record of nearly $10 billion in revenue. at the wall to tell us what to watch with facebook. ramy: in my first chart take a look at mobile ad sales. this is the bloomberg intelligence functions on your own terminal. you are looking at bar chart headed down. you might be thinking this is not a good thing. turns out this is percentage growth, and in the second quarter it was 52%. bloomberg intelligence is thinking this will continue into the third quarter, along the lines of 60%. that would be something spectacular for any company. one of these things, one of the reasons is because we saw from third-quarter earnings from google, they saw 47% rally. when you think about facebook, it is not just one platform, it is a few. is instagram, whatsapp messenger, and instagram stories, to push out more real estate. which brings me to g #btv 1275. we talking about facebook is just one platform. there are so many others. while we look at falling ad load this is still percentage growth. 19% percentage growth for the second quarter, but with all the other ad platforms there is still room to grow. bloomberg intelligence thinks this will rise when the numbers come out. my final chart, g #btv 1238. we know the story for monthly active users for facebook, hitting 2 billion in the second quarter, along with record share price coming in at $180 and change. will this go higher? the data does not lie. those he or bloomberg terminal charts you need to know. yvonne: a lot happening with earnings, as well as testimony in d.c. for facebook. we are looking ahead to the tokyo open. a lot to unravel, not just with earnings from sony, but can they continue to see gains we saw, outpacing every benchmark in the world? in the nikkei, futures up. ♪ is this a phone? or a little internet machine? it makes you wonder: shouldn't we get our phones and internet from the same company? that's why xfinity mobile comes with your internet. you get up to 5 lines of talk and text at no extra cost. so all you pay for is data. see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. ♪ in hong8 a.m. here kong, live from bloomberg's asian headquarters. i'm yvonne man. it is wednesday. at the russia house, the former trump adviser claimed the president's campaign team approved a meeting with moscow. at least eight killed when a truck hit cyclists in new york. president trump condemned a sick and deranged attacker. and from bloomberg's global headquarters, i'm betty liu in new york where it is just after 8 p.m. on tuesday. the sun is shining on sony once again, surging on rising sales and a four-year profit forecast being lifted to a record. lookout, detroit. best quarterly market share in 2009 -- since 2009. ♪ yvonne: and we are coming out with a breaking news on south korea. a pretty big miss here on the trade numbers for the month of october. export 7.1%, that is more than of whatless than half the estimates were for 15.6% growth in october. and well under what we saw back in the prior month at 30 5% growth. imports also coming in under economists estimates of 7.4%. they had estimated 14.8%. all that leaving the trade balance at 7.3 billion u.s. dollars. actually $8.6 billion according to economists estimates. these numbers really missing the mark here. and certainly not a great picture for this generally robust trade picture for south korea. we will see how these are going to hit the market, if at all. sophia for more on the south korea open. sophia: we are not seeing that derailed the rally in both the korean sharemarket, the cost be adding 6%. living on record highs in the wine is also -- also up. we saw the one jump 2% to lead asian forex gains. and it was a big day today for asia. we have pmi numbers due out later. check out with going on with the kiwi dollar gaining .8% after the jobless rate hit an eight year low as employment jumps. with asian stocks near a record high, watch tech shares supported by strong earnings growth. paribasble, look -- bnp , look for price-to-earnings ratios. traders may be sitting tight with a cornucopia of catalyst. we have the trump decision for the fed chair do on thursday. and janet yellen potentially the foschs -- the last of meeting. and i want to pull of the board here to look at some stocks in focus. look at sony. have the record target. climbing after slashing the net income outlook on a goodwill right now. the fed did raise the operating profit forecast by -- shares continue to climb at highs as it shakes up its executive ranks. and a last peek of what is going on down under in sydney. aussie stops are resuming gains. we had nickel miners, western areas, and independence group rising with more optimism around use of nickel in electric vehicle space. that is gaining the most ground since january of 2015 after regulators say no further inquiries will be made on its financial report. a few micro jumps here, but it's about the big picture themes in the first few weeks. triple when he with the fed, the announcement of the fed chair as well. auntie of other things like to be kobe happening as well. to the top story, bloomberg advisors claim the campaign team gave the green light for a pre-election meeting with russia. thatwould bolster claims he trump campaign collude with moscow. weight should we be putting on this email that papadopoulos has to these lin ked russian officials. dan: there is more information to come out on this one. those who see evidence of collusion point to this and say, here we go. thing whereer collusion took place. donald trump and the u.s. is basically saying this is nothing. he's a liar. if we really wanted to go, we wouldn't have done it this way. we would've gone through some higher-ups. manafort has denied it. trump has tweeted, calling him a proven liar. the timing is crucial as well. trump tweeting this was years ago, just a week before one of the conventions. more tough forit the trump administration to distance themselves from the collusion allegations? dan: basically, this looks like the first step in the process. they have a witness that pled guilty. and what other shoes are going to drop? yvonne: he's cooperating with mueller. dan: exactly. for this to be a slamdunk case, we are still not there yet. but, you know, all indications are that this is not over. the investigation carries on. that's right. this was far from over. this is just the beginning, dan. are there any indications of when we might get more evidence or the timeline here of what might be coming down the pipeline? the timeline is not totally clear at this moment. definitely more is to come. r.,ther manafort, don j there are all sorts of meetings and contacts and we're just getting a taste of the timeline now. so when mueller comes out with more indictments, raids, arrests, that is unclear. but certainly it has been kicked off now. onot of people are checking the contacts they did have in making preparations, for sure. yvonne: thank you so much, dan kate, bloomberg editor. it lets get the news with paul allen. president trump has condemned the killing of at least eight people in a truck crash in new york. the incident happened near the world trade center memorial when a man in a rented pickup drove on to a bicycle path. he was shot by police when he jumped out of the truck holding what turned out to be a fake gun. prayers to the families of the new york city terrorist attack. press his brussels to independence claims to eu leaders. he accused madrid of planning a widespread and aggressive move, saying such actions would only slow and not stop. the matter is an internal one for spain. meeting for spain have gone largely under the radar. athough no one expects change. a high possibility -- providing policymakers are comfortable with the data. seen ases are still regular but gradual, whoever's in the chair. special coverage of the fed decision from 2 p.m. eastern with analysis and reaction from former fed vice chairman alan blinder. chief income's strategist jeff rosenberg. china is said to have granted approval for some companies to sell bonds overseas. bankers close to the matter tells the green light green light came after the end of the communist party congress last week. it beijing's first offering since 2004. investor demand for that sovereign bond deal last week reached 11 times the issues -- days after the sale. global news 24 hours a day powered by more than 2700 and analyst in more than 120 countries. i'm paul allen. this is bloomberg. yvonne: the sun is shining on sony once again, waiting for the shares to start trading. gaining 12% overnight, the company posted sales increases in all of its major divisions. and they hikes the profit forecast to a record. stephen engle has been deeding into the results. -- digging into the results. i've just been going back and reading the stories from 2012 when they took over that big turnaround plan. i don't see how they can turn this mammoth around because they really missed out on the revolution into digital space. the internet, they say, they miss that move. the could've had the psp, portable playstation, they could have turned that if they opened to outside developers. it could've been the iphone. sony missed out and it was a lost decade for them. now analysts and others are is reallyt kaz hirai hitting his stride. and that full-year forecast through march of next year. fiscal year calendar through april. they raised it to a record. 5.6 billion u.s. dollars. of 2018.arch the last time it was near these kind of numbers were back in 1998. the waning days of the walkman days when they had the minidisk back then. cd players and all of that. they also raise their forecast to $8.5 trillion from $8.3 trillion. billion, they204 beat the analyst estimates by billion -- by more than 500 million u.s. dollars. also helping the sales beat estimates. yvonne: you are dating all of us with the sony walkman. stephen: and dating myself. yvonne: talk to us more about what is driving the turnaround. stephen: they hit on some key products. give me one product you bought from sony in the past two decades. my last product was probably a minidisk player in 1997. forte televisions are big -- 4k televisions are big. semiconductor has been hitting on all cylinders because they have invested billions and billions into the state-of-the-art image centers that going to smartphones. it includes cameras on both sides of the phone, multiple cameras, they need these image sensors. they have really seen a sharp increase their. they're coming out with new 3-d image sensors which will be used in everything from smartphones to autonomous driving vehicles to augmented reality devices. it is going to be -- they are banking on this. it was ¥49 billion versus a loss of 1.2 billion. 4k tv's making up for slower growth and playstation and a lack of a block esther in their film division. yvonne: certainly a turnaround there. it looks like it is pretty bright ahead. stephen engle there on sony. one of the key architects of abenomics, how japan's economy is tracking in about half an hours time from now. yvonne: we are expecting president trump to name his pick for fed chair on thursday. we are joined to discuss the options. this is bloomberg. ♪ yvonne: this is daybreak asia. betty: i'm betty liu in new york. central banks are in the headlines this week. kicking off the latest meeting in the shadow of who is going to be the next fed chair. we should know soon. the white house says president trump will name his choice on thursday, leaning towards jay powell. joining us is head of fixed income research. it feels like finally we are getting this through. we just want to know who so we can move on. belooks like it will likely our market participants. how bullish is that going to be for the market if it is jay powell? guy: i don't think it is bearish one way or the other. as you say, he's sort of the consensus choice. seen to beh is someone is a continuation of the current policy. i think markets will brush it off and move on to the next. the big issue in the u.s. is if we will start to see higher inflation coming through for the labor situation. but that has been a question for months. nine there is very much a divide what the fed is communicating in terms of adults and what the market is discounting. betty: you say the markets are underestimating just how much tightening we could see next year by the fed. guy: that's correct. we tend to be on the bare side because we think we will end up seeing inflationary pressures feeding through in terms of the wage cycle. clearly, we have had a decline in terms of the unemployment .ate and underemployment rate given the combination of those two, we should be seeing wage , heading mature towards 3%. this will be more of an issue heading into next year. what does it mean for the dollar then? if it has become much more rate sensitive, how is the fed chair if it is a hawk or dove deal with that? it could be more to straitjacket when it comes to where the fed can go. ramy: -- guy: you're right. euro,k in terms of the the power tends to be the way we think about the dollar. we still think the euro has a little bit further to run. the dollar has a weakness in terms of the euro. maybe there are more incremental changes that will be on the european monetary policy and european growth will continue to be strong. yvonne: you are pricing yields steepening for 2018. how are you positioned this week? week as likelihood this we head to the back end of the week is that we tend to see yields rise a little bit as well. yvonne: i want to talk you ahead of the boe decision. i think it is eminently will see the rate hike from the bank of england. do you factor in one and done for mark carney? bank, it'sy central probably the bank of england that has the toughest choice at the moment. deviously, they have communicated on their great concerns. in the past two months, almost every member of the mpc says we will look at the data right now. you can see we are experiencing higher inflation pressures, so we need monetary response. in their heart of hearts, they think brexit will be negative for the u.k. economy. they will have to react. we were in the camp that they wouldn't move at all. we shifted given the big change in the mpc commentary over the past month. a the last couple of weeks. betty: i want to break in for a moment because we are getting news out on sony. which is really their stock rise. the stock in tokyo rising about profit,r the record operating profit forecast also beating expectations. pretty much strength across the business line. yen, but the weaker demand for the playstation network and the image sensors fueling the turnaround at sony. the stock opening up about 11%, guys. yvonne: you have to think the selfie evolution for sony when it comes to those image sensors. 10% upside, 11% for sony. we will watch those lines coming through. we will continue the .onversation with guy stear we will talk about china when we return. this is bloomberg. ♪ is daybreak asia, i'm betty liu in new york. yvonne: i'm yvonne man in hong kong. it china has approval for mainland companies to sell bonds overseas. anchors close to the matter said the green light came in the end of the communist party congress last week. beijing's first dollar bond offering since 2004. ear is still guy s with us. it is record dollar issuance we have seen. no surprise the demand is out there. my question is, does china need this type of funding? is this more about the symbolism behind it, and building that global china brand? guy: i think it's a combination of the two. china wants to be seen as an important part of the global capital markets. they are seen as an important part. i think the chinese companies do need financing. if you look at the trend we have seen in terms of the emerging-market corporate world, china has dominated the net sincece every single year 2010. back in 2010, chinese corporate's were about 4% to the index. a norm us.been i think it's a continuation of that trend. yvonne: the spreads over the ten-year note in china, it was 17 basis points. does it get tighter? guy: i think not. i think evaluations are fairly rich. among stumble -- a symbol asian investors. asian investors are comfortable buying chinese companies and chinese names. it's a reflection, i think, of that. yvonne: think of this bond in the we have seen corporate space in the last month. it is triggered by policy makers. they will be scaling back on leverage after the party congress. and you have the government stepping in trying to inject these cash injections to stabilize things. are they doing the right prescription when it comes to balancing deleveraging and destabilization right now? has beenveraging important because there is a pickup in terms of leverage and the chinese economy since 2009. on the other hand, it will be a challenge to see a deleveraging that doesn't lead to tiny hiccups. that is where the selloff is reflecting. people's concerns at how deleveraging will take place and how much of the soft deleveraging you can actually achieve. it's incredibly difficult. if anything, international investors will be comforted by the fact that the chinese government stepped in to smooth out the volatility of the market. betty: the you expect this will have to continue? this intervention by the chinese government? probably will, because, as i said, the deleveraging issue is going to be a challenge. riseave had a very rapid in terms of the corporate leverage in particular, in china. yvonne: the bottom line question is, is there really a risk that we are going to see some sort of contagion, right? how big of a risk, really, is that? guy: the one thing i would focus on at the end of this year and beginning of next year is the chinese property companies. if you look at the 70 city survey and you wait the cities by population size, in september of 2016, we were seeing monthly increases around two point or percent. -- 2.4%. now it has decelerated to 0.1%. year, we could be talking about monthly contractions. and i think the concern is going to be that we've had such an increase in terms of the chinese corporate bond market, china has become such an important part of the dollar denominated market. what kind of knock on impact does that have on chinese credit values and also one other parts of the corporate bond market? yvonne: we will leave it there. ar, head of fixed income. let's get a check of headlines at this hour. nissan will resume car production in the japanese market within days, a week after suspending because of inspection. a plan for restarting output is complete will similar measures will be in place at the remaining factories by the end this week. the transport ministry must give approval before production can resume. betty: the lowest in a century on the concerns on the ability to service debt and return to profitability. after divesting the north american gas power unit, sales amounting to $1.4 billion. they will pocket $580 million after repaying to loans. they still oh $3 billion. yvonne: up next, toyota closing in on gm for leadership in the u.s. car market. what is driving the success of toyota? in just a moment. this is bloomberg. ♪ yvonne: 830 in singapore, a beautiful morning out there this morning. we are half an hour away from the open of trading there. i'm yvonne man in hong kong. betty: finally looks like the clouds are parting in singapore. i'm betty liu and you are watching daybreak asia. let's get to first word news with paul allen. paul: a former adviser claims that president trump's campaign team gave the green light for a pre-election meeting with russia. if true, it would bolster claims the trump's campaign attended to collude with moscow. george papadopoulos email the kremlin linked contact last year and has pleaded guilty to a string of charges including lying to the fbi. it's not clear if he was simply boasting. has condemnedp the killing of at least eight people in a truck crash in new york. manincident happened when a in a rented pickup drove into a bicycle path. he jumped out of the truck holding what turned out to be a fake gun. the president tweeted, my thoughts, condolences, and prayers. the manipulation of social media , they have the power to prevent it happening again. social media -- amid claims the attempted to merge sprint with t-mobile was on life support. it is now awaiting an 11 our include that is said to how many sprint shares it is willing to except for each t-mobile share. softbank is holding out for an exchange ratio of fewer than eight sprint shares per t-mobile share. u.k.'s signaling it is for paired to compromise on the brexit standoff with new talks scheduled for next week. negotiations have stalled with the eu continuing to demand more details on how much london will pay for the so-called divorce bill. brussels will not move onto to trade talks until the matter is settled. david davis told lawmakers the ultimate deal will probably favor the eu. words of theous european union, nothing is agreed to or everything is agreed to. we see these linked to each other. it will probably favor the union. things like money and so on. future relationship will favor both sides. poll: global news 24 hours a day powered by more than 2700 and analyst in more than 120 -- journalists and analysts in more than 120 countries. i'm paul allen. yvonne: let's get the latest. sophie: we just got a flurry of nikkei data. it you are seeing moderation for japan and south korea. but that is not dampening the mood. the kospi over 1%. the nikkei 225 rallying almost 1% as well. space as the bond well. we have been following gold. the commodity space, the base metals mixed on the rise. creeping higher after locking his biggest gains in six years. ahead of the fomc. holding steady, the yen holding about .2%. it is still a fermentable for the currency. to go look at the nikkei 225 and the surge over the past seven weeks, you see a close in on the s&p 500 gains. and the economic prospects are driving businesses well. helping to steepen the jgb yield curve. that is the line departing from the u.s. and german curves. it is even more appealing and the earnings keeping the strain on track. to show you sony, and nintendo delivers an upside surprise. sony has jumped to a decade high after that quarter and the record profit target indicates the ceo is more confident now that the company has returned to profit growth. and alas check on the cost be rising for a fourth straight session despite the trade data miss this morning. it is pretty much driving this event, rising 2.6%. also climbing about 6%. on those related stocks. korean companies are likely to maintain their diversification strategy to in china without abandoning their foothold on the mainland there. but so far so good for the cost be this november, betty. betty: thank you so much. it sophie talking about some of the stocks. toyota is one to watch. winning hearts and minds in the u.s., hosting the best quarterly market shares since 2009. heaven joining us now from tokyo. thanks to the route four, it is about to list an even bigger prize. retail sales and leadership within the u.s.. why is that significant here? kevin: retail sales is seen as a better gauge of demand. fleetludes things like sales, and more importantly, to rental agencies. retail sales are direct to consumers, it is considered a better measure of actual demand in the market. particular can be very dangerous because if you sell too many cars at discounted prices to things like car rental agencies, it brings down the residual value of the cars. the same cars the consumer zone. when those cars come back on the market, they are sold at very low prices. it can hamper demand for the new models of the cars. nissan has been quite strongly pushing retail sales -- fleet sales this year. ford has also been engaging in it. toyota to a much smaller degree. betty: some of this by toyota, does this cometh the expense of u.s. rivals like gm, ford, chrysler? kevin: the way that toyotas line up a structured is that it has -- it owns the best car, which it just updated. that will give them an additional sales boost. they were trying to offload the old models, offering discounts. it is gone now with the launch of the new model in the summer. they also have the best selling compact suv in the rav4. they own that space. in terms of truck's, that is something that they have a lot of catching up to do. the u.s. companies are the clear leaders in that category, gm and ford. i drove around for for five years, so i'm totally in the rav4 club. talk about this new platform that toshiba is moving toward. this new global architecture. how big of a game changer is that? kevin: if you listen, the company -- if you listen to the company, it is extremely important. they call it a revolution. what it basically does is save costs. it is really a vehicle to create better cars. say.is what they always another really big part of this is that it saves cost on parts. it reduces the number of parts, makes those parts usable across different vehicles and different vehicle categories. tian j is more than architecture for the vehicle. it's also a way of making the vehicle. factories will have more flexibility to move between models as demand changes. you could extensively create a sedan on one line and if you find that you need to be making more, you can easily switch. it, through flexibility and the speed is extremely important. the toyota famously got into this. they were creating specific parts and specific architectures for almost every new vehicle because engineers wanted something new every time. this is a revolution in simplifying the designs of the cars in the process of making them. yvonne: and building the scale globally as well. malaysia,gears now to introducing a 66 billion dollars spending plan last week as it looks to boost growth. bloomberg chief international correspondent for southeast asia has been on it. asked if the budget would provide new investment opportunities. >> in terms of the budget, you look at where we are going. they see there is a lot more they can do. it's focusing on growth industries. -- if you look at the budget, i think it has been a lot of capital investments. the institutional that have a fair amount of advantages in that space. encouraging the pro-sector investments to come in. etf has been clear in terms of long-term strategies, investing more overseas. what is looking attractive and into markets? given closer relations between the u.s. and malaysia? i think it is more in continental europe as well as the preferred european countries. we think the u.s. has done very well for us. we thought that for a few years now. -- we believe there is a fair amount of value in europe today. >> the question is what kind of returns he will be getting? there are some criticisms out it is hard to retire. they don't have enough money. partly due to the fact that there have been very low returns in terms of their investment with the etf. the sense you are getting? is that a fair assessment? >> it is a multifaceted problem, not just returns on investment. , asave been well out there it spread to inflation. the problem i think in malaysia has been around a low income problem as well as determining it. look at it,take a it is one of the worst performers in the asia region over the last 12 months, down about 1%. how is that determining your investment strategy and your investment decisions? >> if you really get under a long-term basis, we have it is all around currencies generally. we see an opportunity to take advantage -- thinking of a long-term central u.s. to how this can work for us in the long term. >> malaysia's employee provident fund. speaking exclusively to bloomberg's haslinda. japanesee speaking to prime minister shinzo abe as the company -- country mulls over whether to keep corrode as head head ofoj -- kuroda as the boj. this is bloomberg. ♪ yvonne: this is daybreak asia, i'm yvonne man in hong kong. i'm betty liu in new york. take another look at the bank of japan which left its stimulus program in place while trimming inflation forecast. editornomic and policy kathleen hays is in tokyo with our next important guest. indeed.: very important economics inan of the global economics community, certainly here in japan. to -- anime minister advisor to prime minister shantou on that. to talk about the boj's role in all this and his concerns about the japanese economy moving ahead after prime minister abe won his election so recently. welcome to the show. >> inc. you very much. nice to see you again. was nice to meet you at the society. i want to ask you about putting the boj in the context of other non-. -- of abenomics. full speed ahead. and at the same time, the economy has picked up. prices aren't picking up as much as he would hope. is there anything else at this point that the boj can do and should do? i think they will continue the relevant policy of all been on macs -- abenomics. is by direction. we has a very long streak of prosperity from revenues. sometimes government revenues. and particularly in the labor market. thethe labor market, even -- [indiscernible] in this shows monetary policy of abenomics. the election is making great success. so if it is such a success, is it time to start pulling back on samuel s yak -- pulling back on stimulus? is that the right course? the lack of ,nflation trend is a benefit not a drawback to monetary policy. it is a clear indicator that the very tightt is not for employment stage. think the first should be continued even further. would it be appropriate to back off of that 2% target? riseis failure of wages to is not only happening in japan, it's happening in the u.s.. it's happening in europe. it's the same problem the ecb is grappling with. help further abenomics if the boj would just let go of that? the inflation targets? mr. hamada: i have a slight kuroda.ce from governor the target is an instrumental target. can we lose the percentage of inflation. have such aince we good record in labor markets and , we are and so forth emphasizing the price target or inflation target. kathleen: you are special adviser to prime minister on a. he had is very strong election result. many people think they connect the dots to the bank of japan and governor kuroda. this is increasingly on prime minister abe reappointing him to a second term when that expires next year. the you agree with that idea that governor kuroda would serve another term as head of the boj. is that a good idea? mr. hamada: i think if you are playing tennis and you are winning, you shouldn't change strategy. with theense, i agree abenomics and the strict monetary policy should be continued. or following that type of monetary policy, it would succeed at the boj. kathleen: would you support ito, economics professor at columbia university if it's not kuroda? mr. hamada: not necessarily. kathleen: one quick question, the net effect terror, it looks like powell is in the lead but janet yellen is still on the list. who should be the next fed chair in terms of japan? a longtime resident of the united states, so i don't want to intervene in such kind of matters. but in the economic sense, it is important that moderate monetary helps people's lives in the united states. -- [indiscernible] to have theortant fed chairman who has not very drastic policy. on the other hand, from a purely selfish point of view of the john status is somewhat hawkish. stance made it clear that the yen really turned again. it is a mixed answer. relatively down people, it would be ok. think i understand. hawkish fed chair, higher rates. thank you so much for joining us. we hope to have you back again. special advisor to prime minister abe, thank you so much for joining us. we will end it back to you in hong kong. withe: kathleen hays there the economic advisor to shinzo abe. a roundup of the stories you need to know to get your day going, for bloomberg subscribers, go to tv on your terminal, also available on your mobile or the bloomberg. customize your studies and look at the industries and assets that you care about. check it out at tv . this is bloomberg. ♪ betty: this is daybreak asia, i'm betty liu in new york. man in hongyvonne kong. we've gone through a lot in the last two hours. the breaking news that happened a couple hours ago on george papadopoulos claiming the trump of this was approving russian meeting. a lot of details and here as to if this actually happened and why the email didn't make it into the court documents. we will continue to see mueller's investigation unfold. betty: we know the meeting did not happen. we don't know why the meeting did not happen. the white house has tried to distance itself. it is unclear if the revelations are really that significant. there will be a lot more reporting around this as to what exactly this email entails. and if it was just pop adopt a less -- george papadopoulos boasting about his campaign. stocke seen lots of movers, and in particular, sony in japan. that turnaround not helped by some of the older products, right? stephen reminded us of the sony walkman. or sohares up still a 11% right at the open. but still continues to rise here by 10% haste on that record annual operating profit outlook. and really pretty much a turnaround across all the business divisions. that record outlook seems to be what really is fueling things. quite a turnaround, as you mentioned. before we were talking about sony laptops anymore. tv's,back to tv's, the 4k the image sensors, the cameras helping things move forward for sony. betty: and the playstation, right? that is it for daybreak asia. market coverage continues with rish and heidi next. standby for bloomberg markets. this is bloomberg. ♪ ♪ 9:00 a.m. in hong kong. 9:00 tuesday evening new york city. i am rishaad salamat. i am haidi lun in sydney. this is "bloomberg markets: asia." ♪ rishaad: a former advisor claiming president trump's campaign team approved the meeting with moscow. president trump says he is a liar. testifying about russia's manipulation of social media saying the

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