Testifiesller finally but his longawaited appearance falls somewhat short of democrat hopes. Shery we have breaking south korea gdp numbers for the Second Quarter. The preliminary numbers year on year are seeing growth of 2. 1 , which is better than the expected 1. 9 growth. It is also an acceleration from 1. 7 in the First Quarter. Quarter on quarter, those numbers also avoiding a technical recession after contracting 0. 4 in the First Quarter. We are now seeing quarter on quarter growth of 1. 1 , which is better than expected. It seems that we have seen more Government Spending and south korea. The contraction that we saw in deceleration in the First Quarter came from local governments not spending as much. Now we have Government Spending kicking and again. Also consumption being relatively resilient despite the fact we have been getting contracting freddie lacks exports contracting the last seven months. This has been a difficult environment for south korea. Investments have been falling. Contracting for the first two months of the Second Quarter. And really tons of challenges for the bok. It is not cut rates for the first time in three years earlier this month. Paul that rate cut was something of a surprise. As were these gdp numbers coming in significantly that are than expected at the higher end of the range. Could be that Government Spending might have saved the day and got the be ok off the hook, but we shall see. Standard e have head of economic research. Thank you for joining us. What is your initial reaction to those numbers . Bit of an upside surprise. Alignedt is pretty much with what the market expected. Hintedek our governor going to 1. 9 in the first half. 2. 1 in the first half. Expecting around 1. 1 today. L but could really carrillo but korea really dodging a bullet in terms of recession. Spending, is that what saved the day, or fundamentally are things more sound in korea than we thought . As you said, it is Government Spending. Government budget was saving the Second Quarter. If you look at the First Quarter, even though government executed the budget, it was not implemented in local government. I think it was implemented in secondhalf. That was expected for the second half. Shery what can we expect in terms of recovery in Semi Conductors given how much this peaked in the growth of south korea . We keep saying we are going to see a bottom for Semi Conductors, yet that bottom is not coming. Guest yeah. Monthslook at last Semi Conductor data, price went down 30 . Price has been the leading indicator for semiconductors. Which means the Semi Conductor will not bottom out in the second half. Should expect the amount probably next year. Will ductor slowdown can driveors investment in the second half. It has been negative growth for the second half. In the second half probably because of the basic factor i think investment will pick up. Shery and of course we are still not seeing the impact the japan export curves that happened earlier this month. These are secondquarter numbers. How big of an impact will this have compared to other trade tensions around the world like china, u. S. And so forth . Guest i think actually the impact will be much bigger than the trade tension between the u. S. And china. Example, would have semiconductor exports decreased by 10 because of a dispute with japan . 10 of exports could easily cause then korea would grow below the 2 level. Economic impact will not be too huge. It is charged its hard to pin it down. It will be much bigger than trade tensions between u. S. And china. Paul are we seeing some of the impact being inflected and earnings . We have a chart that reflects that. At thees are being cut fastest pace since the financial crisis. So, in terms of leading indicators, what does that tell us about the health of south koreas economy Going Forward in this difficult trading environment . Guest i think right now it is hard because of the uncertainty. The market we hesitant to price. Looking at the macro number, headwinds look much stronger than the tailwind. Shery lets talk about some external random factors, especially on geopolitics. This morning we have seen japan confirming that short range Ballistic Missiles were launched by north korea. Of course we know this is always an ongoing issue. Will it make that much of a difference to the south korean economy, or at least to the markets in terms of sentiment perhaps . Guest usually the north korean action is more impact buy. That is more important than what north korea actually saw. Some of the market has been lukewarm. So it will not impact the sentiment because there is nothing much between us and north korea economically. Shery and this was just a short range missile, not an Intercontinental Missile would were the u. S. Thank you for joining us. Lets turn now to sophie for a check of the markets. Sophie we are looking at a muted start and asia potentially would little change to nikkei futures in chicago. Ditto for asx 200 futures. The kospi will be tested today as we adjust the latest gdp numbers. Economy returning to growth. The worst retraction since 2008. There are few signs of relief. We will see earnings later today during an already busy week which has seen mixed numbers from korea. Nice unconfirmed reports for a 90 profit plunge. Ansie bonds, bets rising on october rate cut setting the 10 year yield to a record level. Haidi lets check in paul lets check in on the first word news. North korea has launched projectiles from the eastern part of the peninsula. Japan confirmed two missiles were fired. Chiefs of staff say they flew for about 430 kilometers. Lee launches come weeks after kim jongun President Trump in the Demilitarized Zone and agreed to restart stalled talks on the norths nuclear program. Boris johnson promoted a string of brexit enthusiasts to his first u. K. Cabinet, shaking the government to drive the country out of the eu. 19 of theresa mays leaders left the team. Johnson will set out his priorities later thursday. He says it is time to take action to move the country forward. I have every confidence that in 99 days time we will have cracked it. But you know what . We are not going to wait and 99 days. Because the british people have had enough of waiting. , totime has come to act make decisions, to give strong leadership and to change this country for the better. Former special Counsel Robert Mueller finally testified on capitol hill, but democrats largely failed to achieve the goals they hoped for. Some hope to refresh details on possible obstruction of justice from President TrumpRobert Mueller did not offer any clues. The president later said he had a very good day. The infamous three mile Island Number two reactor is set to be dissolved and dismantled. 1979s been shut down since when it was the scene of the worst ever Nuclear Accident in the u. S. Pump failures triggered an emergency shutdown that resulted in partial meltdown and a radiation leak. Now a Salt Lake City company is in talks to buy the site and tear down the facility. The allmale board of directors has finally been consigned to history by the s p 500. They were the last company on the index without a female board member. Appointed a new cso. Progress has been slow. In 2000 86 of s p 500 companies and at least one female director. Almostt 14 have taken 20 years to close the gap. Global news 24 hours a day on air and on tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Shery still ahead, congressional hearings with former u. S. Special Counsel Robert Mueller. They lasted for several hours. Did we learn anything new . Earnings season is in full swing with mixed results. We will wrap some of the biggest hits and misses. This is bloomberg. This is bloomberg. Paul we are counting down to asias first major market open this morning. Korean futures pointing modestly higher. This, after we got some upside surprise on the gdp numbers. Korea avoiding a technical recession. 1. 1 . 2. 1 on year. This is daybreak asia. I am paul allen in sydney. Shery i am shery ahn in new york. Stocks helpedp offset weak Economic Data and mixed earnings. Tesla plunged after hours and facebook rose. Su keenan has more on this. Lets talk about the big moves. Su these will very much impact the friday trade. Lets start with how the big numbers are moving. Lets look at the three key stocks. For, tesla, and facebook. Two misses and a hit. Facebook really coming in strong. Lets start with tesla. Shares plummeting after the worseic carmaker posted a than expected loss and backtracked from a returned to profit. You can see the rough ride they have had throughout the year. Now down in a big way year to date. F 1. 12 a share, missing excitations of only 0. 31. They are going to focus on delivering more cars, expanding capacity, and generating cash. Facebook meanwhile be sales estimates. Also confirming the 5 billion settlement the ftc on the privacy issues were drafted it week and confirming there is also a new antitrust probe into some of the bigger social media giants. Continue to add users as scrutiny intensifies. Revenue jumping 28 , showing resilience in advertising. Ford, the strategic push for suvs has proved to be a shortterm negative in terms of the rent up and attempts to turn things around. Aging asian models result with a 32 drop in deliveries. Really weighing down on the company. Adjusted earnings range from 1. 25, well below excitations. A negative for ford. That will probably weigh heavily on stocks. Paul in the regular session we saw a similar mixed earnings. Weak from boeing and caterpillar. That was a drag on the dow. Su it was. Raise the s plp and nasdaq to record levels. Lets look at the nasdaq. A record high intraday and a closing high for the nasdaq on the strength of tech, specifically the chip stocks which continued to show momentum. That was offsetting some of the weaker manufacturing and home sales Economic Data. To the big movers, caterpillar and boeing topped the list. Boeing a surprise quarterly loss. I slow down and manufacturing, a key theme. Big losses for those. Snap up in a big way, better than 18 . One analyst said it validated their turnaround view. The stock has tripled since december. Ups gaining. Revenue beating. Lets look at year to date for caterpillar. They see annual profit at the lower end of outlook. Machine sales for the company were at the lowest in two years in june. The stock is offered often considered an economic bellwether. Concerns and trade conflict in the u. S. And china. Continue tos rivals put pain on the company. Way as apart in a big rival came and took market share. Paul su keenan, thank you for that wrapup. A mixed set of earnings from wall street there. Sophie, what reaction can we see in asia . Sophie we are going to be watching heavy equipment makers in asia after caterpillars earnings at the low end because of declining sales in asia because of competitive prices. Particularly in china where the market is expected to be flat. Japanese makers have also been on the losing end of chinese manufacturers grabbing more market share. Toy now only account to 3 4 compared to the 7 to 11 they had in 2011 in china. This week the korean producer said it is looking to trim its reliance on china growth after dismal numbers we saw for the Second Quarter when it came to sales on the mainland. It is looking to the u. S. And europe to make up a bigger part of its total revenue. It is hoping to see its revenue from china come down to about 16 in the years to come. Shery thank you so much for that. Of course you can get a roundup of the stories you need to know to get your day going in todays addition of daybreak. Bloomberg subscribers go to dayb on your terminal. Also available on the mobile app. You can customize settings so you only get the news that you care about. This is bloomberg. Paul this is daybreak asia. I am paul allen in sydney. Shery i am shery ahn in new york. Former special Counsel Robert Mueller finally testified on capitol hill, but democrats hoping for a jumpstart on their case against President Trump were largely disappointed. As we say in the report and as i said at the opening, we did not reach a determination as to whether the president committed a crime. And they say this was a devastating day for the democrats. And you know what and everybody else knows it. This was a devastating day for the democrats. Lets cross to washington. Did we get any more clarity on the obstruction of justice part of this investigation, which the report did not conclude on . Guest Robert Mueller never went beyond the report. He declined to even read from the report which would have given the democrats the soundbite probably they were looking for. So, there was no new news here. It probably did not change many minds. There were no republicans suddenly coming out saying they are going to take a closer look. And his answers were very sore short and terse, often just yes or no. Severaliven opportunities to read sections of the work and he declined. So, there was not anything that was not already in the public sphere. And it is likely the battle lines that existed before he arrived in the capital are still there. Shery that probably did not make them happy. What was the reaction around washington . Guest as we saw, President Trump called it a devastating day for democrats. He said again he had been totally exonerated, even though mueller in his testimony made that clear that was not the case. Republicans also in congress came out looking for additional investigations into the origin. Answer anyused to questions about the socalled are nowossier, and they pushing for their own investigations into the democrats and their use of dossier andm that whether the Trump Campaign was spied on. Thosenot clear if investigations will go anywhere. But no mines were changed. Courseome democrats of pushing for impeachment. Robert muellers Performance Today does not give them much momentum, does it . Guest no it does not. Anwas at least somewhat of indication for nancy pelosi, who has been urging democrats at a goslow approach. That has irritated some progressives and other democrats. There are probably about 80 democrats in the house which would support going ahead with impeachment. She came out afterwards and said they would continue their investigations through several committees. They are pursuing several court cases, including trying to force the testimony of Trump Administration officials, and access to the president s financial records, including his tax returns. She said if the evidence leads to impeachment, so be it. But she wants to build a strong a case as she can that if they go down that path, they have something nice the senate would be forced to look at. And republicans in the senate at this point are nowhere near the idea that they would vote to convict trump on impeachment articles from the house. Paul thank you very much for joining us. Lets get a quick check now of the latest business flash headlines. They are writing out Global Economic uncertainties as extreme protests in hong kong. Revamps helped fuel growth. Overall sales grew 12 . Almost 50 , making the secondbest stock on the encz mark this year shery jelly be tumbled on expectations it would record another profit drop in the Second Quarter. Net income in the first three months fell 15 and analysts say is things are unlikely to improve. The main drag but results are not slowing their expansion plans. It is targeting 500 new outlets by the end of the year. Paul nissan and mitsubishi reports seeing operating profits collapsed 90 last quarter are broadly accurate. The Company Issued a statement saying earnings venues are roughly correct. They will not be able to release official results until the board gives its approval later thursday. Shery lets get a quick check of the asian markets. We are seeing futures in the aftere nikkei up. 4 closing at the highest level in almost three weeks. Kospi flute futures unchanged. Keep an eye on chipmakers. Texas also posted strong earnings. We could see chipmakers moving in asia. Sydney features not moving much. Kiwi stocks up. 25 . Next, with at least one settlement in his rearview mirror, facebook posts secondquarter earnings and adds features. This is bloomberg. His is bloomberg. This is daybreak asia. More signs of weakness in the u. S. Sales of new homes rose last month less than forecast. Sales climbedhome theo a pace of 646,000, first gain in months. They are still struggling to Gain Momentum despite low unemployment and low mortgage rates. Reports from tokyo suggested bank of japan is divided on the needs to ease policy. On thursdaysnd decision from the European Central bank. Boj board says many members did not see an immediate need for stimulus as demand is waking up making up for weak export. Amazon is being lauded as a success but also a Steven Mnuchin and said although the company has certain benefits it has destroyed retail across the country. There is no question they have restricted competition and he welcomes the Justice Department investigating into big tech and its practices. Boeing is warning it may slow or temporarily halt production of the 737 max. If the global grounding dra