Transcripts For BLOOMBERG Bloomberg Daybreak Australia 20240

More big spending. And drinks all around. Interest in an ipo. About a minute away from the launch of the spacex mission. The latest attempt last night was canceled because of Stormy Weather conditions. You are taking a look at the Spacex Dragon Cargo Carrier. This is being put on the falcon nine rocket and will launch from cape canaveral. This Cargo Carrier of moreing supplies than 5000 pounds. This launch has been canceled multiple times in the past because of Stormy Weather, but it it actually goes ahead, this will be the first time the same dragon has gone on a third trip to space. Very significant moment when it comes to the reusability of these rockets. And i believe this rocket as well has been used once before. It was going to be used. Esterday the count was aborted 29 seconds before liftoff. Here we go. Heres the count. 0. 3, 2, 1, it mission. Liftoff. Ignition. Liftoff. Paul the falcon nine rocket with that dragon capsule, on its third trip to the International Space station now. 2270 kilograms of cargo on board if you like the metric measurement. 250 experiments, experiments on how to culture cells, a 3d printer, which could print 3d human tissues in space, also an about how microbes interact with rocks in zero gravity. That could have implications for mining and space. And of course, lab rats. It is also going to be an historic moment when it comes to installing that docking adapter, which is what they are trying to do in the exterior of the International Space station. That would be sort of a new parking spot for two future commercial spacecraft. This docking adapter was made by boeing. That is what were expecting from this trip. Would be theis 18th commercial resupply mission for the iss. One of the final Cargo Missions spacex will do under its. Esupply contract with nasa a very interesting moment as we continue to see this race to by not only elon musks spacex but also by other billionaires such as jeff bezos. Nd blue origin agent of ais the contract with nasa, but a second contract has been signed that will keep spacex and nasas partnership going through 2024. The next seven missions will be using a new dragon capsule and that will be similar to the capsules has which will be able crews. Cruise take they would go. Now clear of the earth. There you have it. With thiswill be back launch as we get that landing, but for now, lets get a quick check of how markets closed here in the u. S. You can see it was all in red. The s p 500 and major indices coming down from those record highs. The dow at the lowest level in two weeks. We had tesla, ford taking a hit. Of course, lingering concerns over the Global Automotive market. Will sustain the largest fall in about a month. Facebook had impressive results less night, but despite that, we have that ftc probe also weighing on the stock, so it was down today, weighing on sentiment. We also had the ecb president , mario draghi, being a bit less dovish than expected. If you can bring up that euro chart we have, we have seen big fluctuations swinging between gains and losses in the previous session. Initially plunging against the draghi left mario rates unchanged, but then a significant degree of monetary stimulus is needed and the outlook is getting worse and worse, that led to a euro spike and sort of initial unchanged, but of course, we will keep a close eye on what happens throughout the rest of the Asian Session as we see how things are shaping up there. Sophie this friday, no liftoff for risk on sentiment. Earnings very much center stage. More pain for the auto sector. Reportinge, nissan 14week numbers. On the eagle agenda today, we do and korea cpi data will get a read of Consumer Confidence at a time of Economic Uncertainty and here in hong kong, were going into the weekend with more protests anticipated amid signs the economy is under strain. The latest trade data showing exports slump in june for an eighth straight month, this ahead of the gdp report due next month. Thanks for that. As you can see, we continue to watch that launch from spacex. We have confirmed main engine separation the stage has been confirmed. In the meantime, lets take you through some of those earnings. Amazon is falling and extended trade up to reporting lowerthanexpected profits and trimming its forecast. The tech giant says it will continue its cycle of spending big to improve delivery times and boost topline growth. , and ourss to seattle tech reporter is there. We have seen we were day ng the record high record prime day to help. What was the outcome . They did have a good revenue guide. The big thing spooking investors is the earnings miss in the Second Quarter and the outlook for earnings and for operating income in the third quarter. That is also in this by far. What amazon basically explained is that they previously onedayd this shift to delivery would cost 800 million dollars. It is actually costing more than that and will continue to cost more, so it will put a dent in profits for the next several quarters. Investors are initially a little it issh about that, but trying to reassure them saying this lead to longterm growth. We can sell more things to people if we can get it to them in one day. There will be things they simply cannot wait todays four. They are trying to do a little damage control on this spending uptick. Paul a little bit of remote building a little bit of too, by theg, looks of it. What does it say about the health of the consumer . It is tough to read. Revenue was quite good, so theres no indication of a weaker consumer market, at least from amazons results because Revenue Growth remains strong. More azon situation is reflection of this uptick in spending to make a big reduction in their delivery times from twoday to one day. Thank you very much. You just missed that stage one reentry burn. We just saw that happen. We know the main engine cut off and stage separation have been confirmed with that Spacex Dragon Cargo Carrier avoid that falcon nine rocket. We are also seeing now the upper stage propelling the dragon cargo into orbit. Right now, were expecting for the landing to have of that first stage booster that will attempt to land back at cape canaveral, and of course, very this reallybecause signals and new momentum in this space race when it comes to reusability of these rockets and boosters, which help the profitability of these companies. The yeah, indeed, reusability has made a huge difference to the space race. This blows my mind. Cany time i see it, i scarcely believe that this is possible. Spacex has such a good record when it comes to relanding these boosters, and there it goes. I believe they have only lost ditching during this entire Contract Period with nasa. There you have it, stage one booster back on the ground after its second trip into space. On the first word news now with jessica summers. Jessica the European Central bank has sent its strongest signal yet that stimulus will be stepped up would lower Interest Rates and renewed asset purchases on the agenda. Eurozone inflation remains far from the banks goal. Meanwhile, the new governor at the bank of turkey deliver the countrys biggest rate cut in 17 years, slashing borrowing costs by 425 basis points. Hong kong exports plunged more than expected last month, marking an eighth straight month of declines. There are warnings that theres no relief in sight. Overseas shipments declined 9 to the equivalent of 39 billion u. S. Dollars. That was the worst result ends 2016. Hong kong is struggling with the trade war, public arrest, and the global slowdown. Trade tensions are threatening to drag singapore into recession. Slumped to the second worst pace since the financial crisis. At the same time, the purchasing Managers Index fell into contraction for the first time in three years. The economy also shrank dramatically in the Second Quarter. U. S. Secretary of state mike pompeo said he would be willing to fight fly to tehran to discuss American Foreign policy and how the iranian leadership has harmed its own country. Said heident has also for an to direct talks restrictthat would irans ability to make nuclear weapons. He drives around the most wonderful city in america, gets iranianian profit propaganda out to the american airwaves. I would like to speak the truth about what the iranian leadership has done and how it has harmed their people. Paul thanks, jessica. Earnings. We will ask a senior beverage analyst if there is any chance of renewing its asia ipo. This is bloomberg. Paul counting down to the sydney open, we have futures pointing lower at the moment by about. 5 . This is after we saw some. Eclines on u. S. Equity markets you are watching daybreak australia. The u. S. And china head back to the negotiating table next week after a twomonth rate. China is making some goodwill measures to smooth the way. For a global perspective, we turn to someone who has been through these types of negotiations. It is great to have you back with us. We talked to you while you were in australia. The talksstarted with in shanghai. It is not just that they are speaking to devise for mayor, but this time around, the commerce minister will participate in these talks for the first time. He is supposed to be a bit more of a hardliner than the vice permit or what can we realistically expect in these talks . It is a good sign you have both ministers there. The foreigns found minister good to deal with. I think the real issue around the bilateral relationship between the u. S. And china is going to be an assessment of the Political Landscape here in the u. S. Because in many respects, the question a lot of people does theesolve is president think it is in his political interest to have an ongoing dispute with china . That is obviously distilling it to its most basic elements, but it is still a primary consideration driving the primary agenda. In that sense, will the chinese be able to trust the u. S. Administration, especially given what they have seen the u. S. Do when it comes to handling matters with mexico . They first agreed on nafta but then backtracked and push harder on immigration. Will the chinese have learned a lesson from that . I think one most sides, there is goodwill. What we are seeing is a. Ifference in policy approach that has been quite well received in a number of democracies because of the impact this had around intellectual property policy. That notwithstanding, i can say that having spoken to a number of people globally, the fact that the u. S. Is pushing back on what is viewed as an incursion on what is fundamentally a lack of respect for ip laws has been respected and well received. You have to take the good with the bad, but i think the u. S. Has demonstrated that if they can do it, they will stand by that deal, especially when it is time to see a marked downturn in trade volumes, for example, and expectations. There is a desire to smooth some of them over. Paul i want to return to the point you made a second ago about the chinese calculation as to if President Trump will be around after 2020. Politician, surely you appreciate the power of campaign rhetoric. There will not be too many candidates on either side of the field that will want to appear weak on china. Doesnt the 2020 election cast a huge shadow over all of this regardless if President Trump wins or not . It does not cast a huge shadow, but i think it is in the interest of both president xi as well as President Trump for the two seem to be a pathway forward. Nobody wants to see protracted downward pressure on economic growth. People want to see continued growth. They want to see the creation of jobs. All that flows from a trade congested environment. When you have ongoing conflict, aats when you start to see downward back in terms of economic growth. We continue to see sluggish growth across europe and we are not seeing terrifically strong growth in the u. S. ,or all of those reasons theres a lot of reasons to get a deal done. Paul the u. S. Would like to see some structural reform in china, but is there simply too much to ask . Not at all. I think the fact that the United States is pushing back, especially in relation to intellectual property, as i said has been welcomed in a number of corners and i think it is in putting to delineate between a number of different elements in u. S. Policy. Lighthizer i found terrific to deal with, very pragmatic, but also unapologetic about the policy outcomes the u. S. Is pursuing. The u. S. Is pursuing particular outcomes around ip policy and that is different to what is being pursued around threats on auto tariffs or biopharma and the sort of thing. We also need to see real commitment to what can be done around reform at the wto. There was a conversation initiated when i was trade minister that is ongoing today. Ultimately, how the wto is reformed will also have a marked impact Going Forward. Shery it has so many different paths. See the path of a conciliatory tone coming from the trump administration, but having a different path when it comes to congress, where they do want to rein in huawei and other Chinese Tech Companies . The design is always too simple fight it to its most basic elements, but the fact is there are many elements to trade investment that have a marked a Material Impact on the economy. Ive always thought about the ist that trade investment the large genesis of a lot of economic growth, both to mystically as well as globally. When you see pressure in relation to trade volumes and the impact on tariffs and nontrade barriers, automatically you see a decline in economic growth, so there is a fundamental sense to maintain liberalized trade as much as you. An that is what basically the administration is saying. Shery of course there is the economic incentive. Australia, for example, is a good economic partner with china but also u. S. Ally. You have so many domestic political considerations, has the environment just changed . Its more competent it. The impact it has in terms of Global Supply chains, theres so many strands to this. You see it for example in relation to the ad sector here in the United States. From australias perspective, the dispute between the u. S. And china was positive for agricultural exporters because it meant we could fill some of the large demand coming from china. If the u. S. And china were able to resolve some of that, will that be a marked impact on australia . I would argue not as pronounced as people would take. We are still not touching the sides of aggregate demand that is coming from china. Happens when you conflate economics, politics, history . It gets difficult. Thats why i think a lot of people are uncertain about what the pathway forward is to markets are always looking for cues about the direction for where this is going. That is why i post the question which is to say you have to look at it in the context of i think the largest blip on the radar, and the largest blip on the radar is the forthcoming president ial election. That is why i distillate to its most basic element. Is it in the president s interest or public in partys interest to have this dispute ongoing or to be resolved . Ultimately, i think it is in their interest to have it be resolved. Shery thank you for joining us today. Plenty more to come on daybreak australia. This is bloomberg. Paul lets get a quick check of the latest business flash headlines. Ofing fell the most in need months as its 737 max heidegger 737 max hangover worsens. Meanwhile, boeings defense unit also would through from a lucrative race to supply the u. S. Air force with Nuclear Missiles amid a dispute over bidding wars. A very same unit fueled the near sure spot on results which passed analyst expectations and was powered by 23 gains in revenue. That helped the stock reach 56 gains for the year as the company putback market value since its 2016 purchase of sab miller. Paul toyota betting on car hiring in china. Help theesting to Chinese Company set up a management venture to provide services such as car rental and maintenance. Bankrollwould expansion plans. The Company Still has not turned a profit and has been struggling with government curbs on car supply. We willoming up next, discuss the ecbs policy decision. This is bloomberg. I dont know why i didnt get screened a long time ago. I kept putting it off. What was i thinking . Ok, mr. Jones. Were all done. I told you it was easy. With life line screening, getting screened for unknown Health Conditions is so quick, painless and affordable, youll wonder why you hadnt done it before. So if youre over age 50, call now and schedule an appointment near you. For just 149 a savings of over 50 youll receive a package of five screenings that go beyond your doctors annual checkup. Ultrasound technology looks inside your arteries for plaque that builds up as you age and increases your risk of stroke and heart disease. After all, 4 out of 5 people who have a stroke, their first symptom is a stroke. So call today and start with a Free Health Assessment to understand your best plan of action. So why didnt we do this earlier . Life line screening. The power of prevention. Call now to learn more. Paul its 8 30 a. M. Here in sydney friday morning. The market opened 90 minutes away. Futures pointing lower by about what 5 after a down day on u. S. Equity markets. Im paul allen in sydney. Shery you are watching daybreak australia. Word newsthe first with jessica summers. Jessica the house of representatives has passed a and aar extension bipartisan budget bill backed by trump. Not republicans voted despite trump urging their support. The legislation low is the chance of a Stormy Weather<\/a> conditions. You are taking a look at the Spacex Dragon<\/a> Cargo Carrier<\/a>. This is being put on the falcon nine rocket and will launch from cape canaveral. This Cargo Carrier<\/a> of moreing supplies than 5000 pounds. This launch has been canceled multiple times in the past because of Stormy Weather<\/a>, but it it actually goes ahead, this will be the first time the same dragon has gone on a third trip to space. Very significant moment when it comes to the reusability of these rockets. And i believe this rocket as well has been used once before. It was going to be used. Esterday the count was aborted 29 seconds before liftoff. Here we go. Heres the count. 0. 3, 2, 1, it mission. Liftoff. Ignition. Liftoff. Paul the falcon nine rocket with that dragon capsule, on its third trip to the International Space<\/a> station now. 2270 kilograms of cargo on board if you like the metric measurement. 250 experiments, experiments on how to culture cells, a 3d printer, which could print 3d human tissues in space, also an about how microbes interact with rocks in zero gravity. That could have implications for mining and space. And of course, lab rats. It is also going to be an historic moment when it comes to installing that docking adapter, which is what they are trying to do in the exterior of the International Space<\/a> station. That would be sort of a new parking spot for two future commercial spacecraft. This docking adapter was made by boeing. That is what were expecting from this trip. Would be theis 18th commercial resupply mission for the iss. One of the final Cargo Missions<\/a> spacex will do under its. Esupply contract with nasa a very interesting moment as we continue to see this race to by not only elon musks spacex but also by other billionaires such as jeff bezos. Nd blue origin agent of ais the contract with nasa, but a second contract has been signed that will keep spacex and nasas partnership going through 2024. The next seven missions will be using a new dragon capsule and that will be similar to the capsules has which will be able crews. Cruise take they would go. Now clear of the earth. There you have it. With thiswill be back launch as we get that landing, but for now, lets get a quick check of how markets closed here in the u. S. You can see it was all in red. The s p 500 and major indices coming down from those record highs. The dow at the lowest level in two weeks. We had tesla, ford taking a hit. Of course, lingering concerns over the Global Automotive<\/a> market. Will sustain the largest fall in about a month. Facebook had impressive results less night, but despite that, we have that ftc probe also weighing on the stock, so it was down today, weighing on sentiment. We also had the ecb president , mario draghi, being a bit less dovish than expected. If you can bring up that euro chart we have, we have seen big fluctuations swinging between gains and losses in the previous session. Initially plunging against the draghi left mario rates unchanged, but then a significant degree of monetary stimulus is needed and the outlook is getting worse and worse, that led to a euro spike and sort of initial unchanged, but of course, we will keep a close eye on what happens throughout the rest of the Asian Session<\/a> as we see how things are shaping up there. Sophie this friday, no liftoff for risk on sentiment. Earnings very much center stage. More pain for the auto sector. Reportinge, nissan 14week numbers. On the eagle agenda today, we do and korea cpi data will get a read of Consumer Confidence<\/a> at a time of Economic Uncertainty<\/a> and here in hong kong, were going into the weekend with more protests anticipated amid signs the economy is under strain. The latest trade data showing exports slump in june for an eighth straight month, this ahead of the gdp report due next month. Thanks for that. As you can see, we continue to watch that launch from spacex. We have confirmed main engine separation the stage has been confirmed. In the meantime, lets take you through some of those earnings. Amazon is falling and extended trade up to reporting lowerthanexpected profits and trimming its forecast. The tech giant says it will continue its cycle of spending big to improve delivery times and boost topline growth. , and ourss to seattle tech reporter is there. We have seen we were day ng the record high record prime day to help. What was the outcome . They did have a good revenue guide. The big thing spooking investors is the earnings miss in the Second Quarter<\/a> and the outlook for earnings and for operating income in the third quarter. That is also in this by far. What amazon basically explained is that they previously onedayd this shift to delivery would cost 800 million dollars. It is actually costing more than that and will continue to cost more, so it will put a dent in profits for the next several quarters. Investors are initially a little it issh about that, but trying to reassure them saying this lead to longterm growth. We can sell more things to people if we can get it to them in one day. There will be things they simply cannot wait todays four. They are trying to do a little damage control on this spending uptick. Paul a little bit of remote building a little bit of too, by theg, looks of it. What does it say about the health of the consumer . It is tough to read. Revenue was quite good, so theres no indication of a weaker consumer market, at least from amazons results because Revenue Growth<\/a> remains strong. More azon situation is reflection of this uptick in spending to make a big reduction in their delivery times from twoday to one day. Thank you very much. You just missed that stage one reentry burn. We just saw that happen. We know the main engine cut off and stage separation have been confirmed with that Spacex Dragon<\/a> Cargo Carrier<\/a> avoid that falcon nine rocket. We are also seeing now the upper stage propelling the dragon cargo into orbit. Right now, were expecting for the landing to have of that first stage booster that will attempt to land back at cape canaveral, and of course, very this reallybecause signals and new momentum in this space race when it comes to reusability of these rockets and boosters, which help the profitability of these companies. The yeah, indeed, reusability has made a huge difference to the space race. This blows my mind. Cany time i see it, i scarcely believe that this is possible. Spacex has such a good record when it comes to relanding these boosters, and there it goes. I believe they have only lost ditching during this entire Contract Period<\/a> with nasa. There you have it, stage one booster back on the ground after its second trip into space. On the first word news now with jessica summers. Jessica the European Central<\/a> bank has sent its strongest signal yet that stimulus will be stepped up would lower Interest Rates<\/a> and renewed asset purchases on the agenda. Eurozone inflation remains far from the banks goal. Meanwhile, the new governor at the bank of turkey deliver the countrys biggest rate cut in 17 years, slashing borrowing costs by 425 basis points. Hong kong exports plunged more than expected last month, marking an eighth straight month of declines. There are warnings that theres no relief in sight. Overseas shipments declined 9 to the equivalent of 39 billion u. S. Dollars. That was the worst result ends 2016. Hong kong is struggling with the trade war, public arrest, and the global slowdown. Trade tensions are threatening to drag singapore into recession. Slumped to the second worst pace since the financial crisis. At the same time, the purchasing Managers Index<\/a> fell into contraction for the first time in three years. The economy also shrank dramatically in the Second Quarter<\/a>. U. S. Secretary of state mike pompeo said he would be willing to fight fly to tehran to discuss American Foreign<\/a> policy and how the iranian leadership has harmed its own country. Said heident has also for an to direct talks restrictthat would irans ability to make nuclear weapons. He drives around the most wonderful city in america, gets iranianian profit propaganda out to the american airwaves. I would like to speak the truth about what the iranian leadership has done and how it has harmed their people. Paul thanks, jessica. Earnings. We will ask a senior beverage analyst if there is any chance of renewing its asia ipo. This is bloomberg. Paul counting down to the sydney open, we have futures pointing lower at the moment by about. 5 . This is after we saw some. Eclines on u. S. Equity markets you are watching daybreak australia. The u. S. And china head back to the negotiating table next week after a twomonth rate. China is making some goodwill measures to smooth the way. For a global perspective, we turn to someone who has been through these types of negotiations. It is great to have you back with us. We talked to you while you were in australia. The talksstarted with in shanghai. It is not just that they are speaking to devise for mayor, but this time around, the commerce minister will participate in these talks for the first time. He is supposed to be a bit more of a hardliner than the vice permit or what can we realistically expect in these talks . It is a good sign you have both ministers there. The foreigns found minister good to deal with. I think the real issue around the bilateral relationship between the u. S. And china is going to be an assessment of the Political Landscape<\/a> here in the u. S. Because in many respects, the question a lot of people does theesolve is president think it is in his political interest to have an ongoing dispute with china . That is obviously distilling it to its most basic elements, but it is still a primary consideration driving the primary agenda. In that sense, will the chinese be able to trust the u. S. Administration, especially given what they have seen the u. S. Do when it comes to handling matters with mexico . They first agreed on nafta but then backtracked and push harder on immigration. Will the chinese have learned a lesson from that . I think one most sides, there is goodwill. What we are seeing is a. Ifference in policy approach that has been quite well received in a number of democracies because of the impact this had around intellectual property policy. That notwithstanding, i can say that having spoken to a number of people globally, the fact that the u. S. Is pushing back on what is viewed as an incursion on what is fundamentally a lack of respect for ip laws has been respected and well received. You have to take the good with the bad, but i think the u. S. Has demonstrated that if they can do it, they will stand by that deal, especially when it is time to see a marked downturn in trade volumes, for example, and expectations. There is a desire to smooth some of them over. Paul i want to return to the point you made a second ago about the chinese calculation as to if President Trump<\/a> will be around after 2020. Politician, surely you appreciate the power of campaign rhetoric. There will not be too many candidates on either side of the field that will want to appear weak on china. Doesnt the 2020 election cast a huge shadow over all of this regardless if President Trump<\/a> wins or not . It does not cast a huge shadow, but i think it is in the interest of both president xi as well as President Trump<\/a> for the two seem to be a pathway forward. Nobody wants to see protracted downward pressure on economic growth. People want to see continued growth. They want to see the creation of jobs. All that flows from a trade congested environment. When you have ongoing conflict, aats when you start to see downward back in terms of economic growth. We continue to see sluggish growth across europe and we are not seeing terrifically strong growth in the u. S. ,or all of those reasons theres a lot of reasons to get a deal done. Paul the u. S. Would like to see some structural reform in china, but is there simply too much to ask . Not at all. I think the fact that the United States<\/a> is pushing back, especially in relation to intellectual property, as i said has been welcomed in a number of corners and i think it is in putting to delineate between a number of different elements in u. S. Policy. Lighthizer i found terrific to deal with, very pragmatic, but also unapologetic about the policy outcomes the u. S. Is pursuing. The u. S. Is pursuing particular outcomes around ip policy and that is different to what is being pursued around threats on auto tariffs or biopharma and the sort of thing. We also need to see real commitment to what can be done around reform at the wto. There was a conversation initiated when i was trade minister that is ongoing today. Ultimately, how the wto is reformed will also have a marked impact Going Forward<\/a>. Shery it has so many different paths. See the path of a conciliatory tone coming from the trump administration, but having a different path when it comes to congress, where they do want to rein in huawei and other Chinese Tech Companies<\/a> . The design is always too simple fight it to its most basic elements, but the fact is there are many elements to trade investment that have a marked a Material Impact<\/a> on the economy. Ive always thought about the ist that trade investment the large genesis of a lot of economic growth, both to mystically as well as globally. When you see pressure in relation to trade volumes and the impact on tariffs and nontrade barriers, automatically you see a decline in economic growth, so there is a fundamental sense to maintain liberalized trade as much as you. An that is what basically the administration is saying. Shery of course there is the economic incentive. Australia, for example, is a good economic partner with china but also u. S. Ally. You have so many domestic political considerations, has the environment just changed . Its more competent it. The impact it has in terms of Global Supply<\/a> chains, theres so many strands to this. You see it for example in relation to the ad sector here in the United States<\/a>. From australias perspective, the dispute between the u. S. And china was positive for agricultural exporters because it meant we could fill some of the large demand coming from china. If the u. S. And china were able to resolve some of that, will that be a marked impact on australia . I would argue not as pronounced as people would take. We are still not touching the sides of aggregate demand that is coming from china. Happens when you conflate economics, politics, history . It gets difficult. Thats why i think a lot of people are uncertain about what the pathway forward is to markets are always looking for cues about the direction for where this is going. That is why i post the question which is to say you have to look at it in the context of i think the largest blip on the radar, and the largest blip on the radar is the forthcoming president ial election. That is why i distillate to its most basic element. Is it in the president s interest or public in partys interest to have this dispute ongoing or to be resolved . Ultimately, i think it is in their interest to have it be resolved. Shery thank you for joining us today. Plenty more to come on daybreak australia. This is bloomberg. Paul lets get a quick check of the latest business flash headlines. Ofing fell the most in need months as its 737 max heidegger 737 max hangover worsens. Meanwhile, boeings defense unit also would through from a lucrative race to supply the u. S. Air force with Nuclear Missiles<\/a> amid a dispute over bidding wars. A very same unit fueled the near sure spot on results which passed analyst expectations and was powered by 23 gains in revenue. That helped the stock reach 56 gains for the year as the company putback market value since its 2016 purchase of sab miller. Paul toyota betting on car hiring in china. Help theesting to Chinese Company<\/a> set up a management venture to provide services such as car rental and maintenance. Bankrollwould expansion plans. The Company Still<\/a> has not turned a profit and has been struggling with government curbs on car supply. We willoming up next, discuss the ecbs policy decision. This is bloomberg. I dont know why i didnt get screened a long time ago. I kept putting it off. What was i thinking . Ok, mr. Jones. Were all done. I told you it was easy. With life line screening, getting screened for unknown Health Conditions<\/a> is so quick, painless and affordable, youll wonder why you hadnt done it before. So if youre over age 50, call now and schedule an appointment near you. For just 149 a savings of over 50 youll receive a package of five screenings that go beyond your doctors annual checkup. Ultrasound technology looks inside your arteries for plaque that builds up as you age and increases your risk of stroke and heart disease. After all, 4 out of 5 people who have a stroke, their first symptom is a stroke. So call today and start with a Free Health Assessment<\/a> to understand your best plan of action. So why didnt we do this earlier . Life line screening. The power of prevention. Call now to learn more. Paul its 8 30 a. M. Here in sydney friday morning. The market opened 90 minutes away. Futures pointing lower by about what 5 after a down day on u. S. Equity markets. Im paul allen in sydney. Shery you are watching daybreak australia. Word newsthe first with jessica summers. Jessica the house of representatives has passed a and aar extension bipartisan budget bill backed by trump. Not republicans voted despite trump urging their support. The legislation low is the chance of a Government Shutdown<\/a> and prevents any risk of a enteral default until after the next election. Johnsons claim that he will seek a new deal from the European Union<\/a> has been rejected out of hand by brussels. The chief eu negotiator said it is impossible to reopen discussions on the agreement signed by theresa may. He also adds that johnsons demand that the irish backstop the scrap is unexpected will unacceptable. The new Prime Minister<\/a> said brexit will happen with the without a deal. Japan is weighing a new trade weapon. The government setting wednesday as a deadline on removing seoul from its socalled white list of trusted export destinations. Such a move could curb the ship and of hundreds more products, for jew damaging koreas tech sector. The u. S. Is urging both sides to cool down. Further damaging koreas tech sector. A booster designed by a Company Called<\/a> beijing interstellar glory lifted off from chinas cancer province ginsu province. At tictocs on aaron on twitter powered by more than 2700 journalists and analysts in more than 120 countries. Shery lets get straight to sophie forecheck of the markets. Sophie a couple of things to watch when it comes to stocks and australia. Were keeping and i on shares in australias Largest Companies<\/a> ofch jumped amid speculation the timing of regulations. And ab inbev being sued for allegedly charging customers these it was not entitled to an cba moving after lenders said it has received all Regulatory Approval<\/a> for the sale over the sector. Sset management west bank is in view after being downgraded to hold at morningstar, plus australians supporting that westpac is for its lifeptions insurances. Paul lets get more on what we should be watching is trading gets under way in asia. Still a few events on the asian ecocalendar that markets should be paying attention to, right . Thats right. There are three big economic reports coming out today that were keeping an eye on. The first is japan inflation and that is expected to be 1 . Right after that, we have singapore jobless numbers, and that is expected to be two point 3 . Later this afternoon, we are also looking at thailand foreign wereves, which previously 216. 6 billion. Markets are betting on 75 basis points of cuts by early next year, which already seemed pretty aggressive given the recent strong Economic Data<\/a> that was seen in the u. S. There one bank suggesting even more could be needed. Thats right. There is one strategist from the ammo Capital Markets<\/a> saying that while traders are leaning towards 75 basis points of cuts, currentying that the scenario, that we are in this new normal and he is looking at cuts. 125 basis points hes saying this view of the 75 basis points is coming from a history of the 1990s and that the reality has changed a little bit since then. He is saying that were looking at 100 or 125 basis points because in the scenario were policymakers would be able to avert a recession, this is so important looking forward to next weeks fed position on july morend this does suggest easing may be needed so they can make a bigger difference than previously when it has called for these socalled entrance cuts. Thank you so much, our Bloomberg Asia<\/a> stocks reporter. Bank hasean central sent the strongest signal yet for the stimulus and a move in september with mario draghi bemoaning a eurozone economy that is looking worse by the day. Draghi sounding very concerned, and yet, not moving just yet. Kathleen not just yet, but, boy, oh, boy, its pretty clear the ecb is revving up to do that rate cut and more come september. When you hear the head of the European Central<\/a> banks say that things are looking worse and worse, that has got to signal to everyone that draghi is aware things are weakening quickly. Lets listen to how he put it when he was describing when he sees in the euro area economy. Generally speaking, you have resilience in the Service Sector<\/a> and social sector. At the same time, this outlook is getting worse and worse, and its getting worse and worse in manufacturing especially and its getting worse and worse in those countries where manufacturing is very important, but because of the value chains, this propagates all over the eurozone. Kathleen countries where manufacturing is very important, germany right at the top of the list. 24 hours ago, we were talking about the purchasing Managers Index<\/a> for july and germany slipping down to 43 point one, well below 50 which signals contraction. No surprise that mario draghi went on to make it pretty clear more stimulus is coming. In this environment, inflationary pressures remain ofed, and indications Inflation Expectations<\/a> have , therefore it is significant degree of monetary stimulus continues to be necessary to ensure that financial conditions remain very favorable and support the euro area expansion. Kathleen the ecb let us know they have committees studying if they will do rate cuts, renew bond purchases, make Forward Guidance<\/a> even deeper and longer, etc. Maybe we have to wait until september, but it sounds pretty clear like the ecb monitoring forces are getting ready to ride to the rescue. Latest german report sentiment pretty much underscores the need for stimulus. Kathleen thats pretty much all there is to say. Institute felt ,fo institute, wellrespected well known for their service and what we saw is Business Expectation<\/a> tumbling to the lowest levels since 2009. Where were you in 2009 . We were in a financial crisis, a great recession. The head of the institute saying that the Business Climate<\/a> indicator went into freefall in july with more than 80 of the factors in contraction. Thats that turquoise blue line. You can see that this just underscores that you could not have the whole question of worse and worse being better book ended by the pmi and now the ifo index today. The institute saying if this continues it could push germany into recession. We have now seen the impact on the bond markets. European markets selling off, not translating into the u. S. As well. Kathleen which is interesting because when this first came bonds started going up. Then when draghi started speaking, people could see he was talking about rate cuts in the future. He said it is hard to be gloomy. He is not worried about recession, and apparently for bond traders who really needed a dovish statement from draghi to keep this rally going, that kind of put the kibosh on it for a while. Does not negate what Mario Draghis<\/a> message was and is. September is just a couple months away, so to my mind, the global march toward lower rates continues. Paul thanks for joining us. Still to come, alphabet rose in late trading. We look at the highlights and potential future acquisitions. This is bloomberg. Paul you are watching daybreak australia. A tale of two earnings as amazon court reallyreport results and googles Parent Company<\/a> jumped in after hours trading while amazon went in a different direction. Lets take a look at those amazon results first. How important is growing at sales to their growth and outlook . That was one area that was actually pretty strong for them. We saw about a 37 yearoveryear increase in terms of their other revenue category, which is basically their ad actually, that was even though the quarter was interpreted as being somewhat negative because they missed on the bottom line, that was actually part of the report that was actually very strong, so that is encouraging that they are continuing to garner more of that Online Advertising<\/a> dollars because we saw great numbers earlier this week from facebook and snap in that same space. Call thats the encouraging side of the picture, but amazon has had to defend its story around this oneday delivery. How is that cutting and profitability, and does is amazons story believable Going Forward<\/a> that this is the way to go . Its not really much different than we have seen from amazon over the years. They came out, said they are going to spend 800 million to do oneday shipment for all prime members, and that obviously impacted the bottom line. Net margin dropped from over 7 to over two about 5. 9 , and they missed in terms of earnings, so i think this has to hail back to the days when amazon was spending money to build Fulfillment Centers<\/a> and do all these Different Things<\/a> to kind of set the stage for growth down the road, and i think that is how we have to kind of view this investment in terms of one day shipment for prime members. A different story when it comes to Earnings Results<\/a> for alphabet. It was pretty strong, beating estimates. Will this calm some of the about growth . You are right. Advertising revenue was up 16 . Their other revenue, which is a place for gc p, which is their cloud group and also their hardware group, that was also very good. There was a comment they made during the call where they said that the run rate right now for their Cloud Business<\/a> is 8 billion, which would make you think they did probably about 2 million in the quarter. I think it does put aside some of those concerns we had after the First Quarter<\/a> that google was not growing fast enough, and it gives people some evidence that some of these newer businesses for them are starting to kind of take off a little bit. Those especially for sectors like maps and shopping. Will this add to their monetization potential . I think so. The key to them is keeping traffic acquisition costs down and finding new businesses, like the one you mention. Also, Driverless Cars<\/a> is another area of growth for them. Youtubeutube tv and premium, those are areas they are really starting to monetize in terms of advertising and i think they are really starting to get a handle on that. They have a lot of things they search injust beyond their standard model that could be pretty exciting for them. Paul just want to grab your thoughts on this book as well. Reasonable set of numbers for them. Privacy,risis of antitrust probe, but seemed to be crickets when it comes to the market. The stock just continues to perform. Yeah, kind of like they just shrugged it off. They wrote a check for 5 billion. Obviously, that was the largest settlement ever with the federal trade commission. Think google wrote a check for past, 23 million in the and the market just kind of, in terms not even stop of intos he. They had really good growth in their ad revenues. It was very, very strong, stronger than what we saw in the First Quarter<\/a>, and even though their monthly daily average user growth is slowing down to about 8 , they are still moving forward in terms of their of theirion of some newer platforms like messenger and whatsapp and so forth. Things that are still positive about facebook even though they continue to be under this scrutiny from the federal trade commission. Intel we also had numbers, sales, outlook all beating estimates. How much does this reassure investors that demand concerns, trade tension concerns will not affect the company . You have to remember that the bar was very low or intel coming into the quarter. We know Texas Instruments<\/a> reported numbers a day or two ago and they were pretty solid. If you look at the intel numbers, their Data Center Group<\/a> going intothey make the cloud centers, that was actually down 1 . Excuse me,roup up 1 . The Data Center Group<\/a> was actually down 10 . If you sort through the numbers, they did better than expected. They raised guidance for the next quarter for the fiscal year, but it does not really change the fact that they are not really growing the top and bottom line right now. As i said, i think the bar was pretty low for intel. Thanks for joining us. If you missed any part of that conversation, tv is your function. You can watch us live, watch past interviews as well. Also become part of the. Onversation this is bloomberg. Paul you are watching daybreak australia. Lets get a quick check of the latest business flash headlines. Alibaba has developed its first ever Artificial Intelligence<\/a> chip, delving deeper into semiconductors just as washington targets chinas tech industry. It is developed on a design that competes with the global standard. Shery a French Luxury Group<\/a> seeing sales growth slow after three years of breakneck games. Comparable sales rose in the Second Quarter<\/a> compared with forecasts of 14. 5 . Gucci saw major slowdowns, struggling to maintain previously bet has sales growth. Is merelyhe brand normalizing. malaysia lightning its debt burden. Canceled a year ago by a malaysian Prime Minister<\/a>. This after he balked at the 16 billion cost. The market currently weaker. Have a look at futures in japan. Off. 2 for south korea while here in australia, we are. 5 weaker. This is after we saw a very mixed bag of earnings driving markets lower. Geopolitical headaches continue to mount from washington. Tensions from turkey on the rise. We spoke to secretary of state mike pompeo and will bring you later in themore show on daybreak asia. For now, we have a guest on ab inbev beating on earnings across the board. It was the aipac division that beat on growth, the division set two months ago but then did not. Macquaries senior beverage analyst is with us. Great to have you with us. How strong were the results . China had another fabulous double digit growth quarter. Australia even surprised on the upside, so just across the board in asia, we continue to see year after year really strong Revenue Growth<\/a> and margin expansion, so very, very impressive results out of asia. In other partsut of the world . U. S. Volumes seemed to continue to disappoint. U. S. Volumes were bad. They still managed to get Revenue Growth<\/a> than they actually have a little margin expansion. It was surprisingly good results in the face of serious share losses. In northe phenomena america is that hard sulfur, that sort of sparkling water with alcohol, is taking off and hurting the rest of the business. They had very good results in mexico. Brazil did a little better than people might have thought and europe was very strong. Paul Going Forward<\/a>, what are the greatest risks for ab inbev . Is it mostly matters beyond their control . Two major risks. One is that their debt is largely in u. S. Dollars and euros and that they are very own very heavily weighted toward emerging markets. You are seeing an acceleration in declines in the beer category of they are really fighting an uphill battle to try to sustain volumes. They are doing a good job of premium rising premiumizing, and theyve had a real winner in michelob ultra, but 70 of their u. S. Portfolio is really vulnerable. Particularly as this hard couldr phenomenon accelerate and make it harder for light beer to grow. Paul lets talk about the debt pile. If they are going to have another go at that ipo, how critical is it to get that lower . Just to clarify, the us trillion deal will not close until the First Quarter<\/a> of 2020, sales price,llion they wont get that cash yet, but i think it is interesting that they are very keen to pursue an ipo in asia that says either they really feel anxious about reducing that debt quickly cashey have other uses of that they would like to accommodate ie acquisitions in that asia region, but they really cannot do that because of their commitment to reduce their debt to even. Debt to ebitda ratios. Their fullyear guidance did not change, but how much will commodity and currency headwinds hurt . In terms of commodity headwinds, they actually hedge a year in advance or so, so they knew and we have had some warning that in latin america in particular, there would be significant pressure on margins in the thirdquarter, so they have warned it will not be anywhere near a strong as the second. In terms of fx, if you look at where rates are today, we should be entering a much more favorable period Going Forward<\/a>, but anything can happen in emerging markets. The argentinian crisis a year ago was not expected. If Something Like<\/a> that were to happen, it could set them back, but the codes look fairly clear and even optimistic about 2020. Shery thank you very much for that. Coming up, we are discussing markets and earnings. We will also focus on the trade pact between china and korea. Plenty more to come. Is it from daybreak australia. We will have all the action in daybreak asia next. Will update you on the Market Action<\/a> and todays news in a moment. This is bloomberg. Paul good morning. Allen in sydney. You are under one hour away from the Australian Market<\/a> open. Shery i am shery ahn. Sophie i am Sophie Kamaruddin<\/a> in hong kong. Welcome to daybreak asia. Paul our top stories this friday, mario draghi sends his longest stimulus signal yet. Amazon may not deliver. Short ofre expectations amid concerns of morepe","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia801005.us.archive.org\/27\/items\/BLOOMBERG_20190725_220000_Bloomberg_Daybreak_Australia\/BLOOMBERG_20190725_220000_Bloomberg_Daybreak_Australia.thumbs\/BLOOMBERG_20190725_220000_Bloomberg_Daybreak_Australia_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240716T12:35:10+00:00"}