And betty, on the road. Betty indeed, on the road. Exciting, it is. You have a big lineup of guests, we are looking forward to in the next couple hours. I am betty liu here in new york, where it is just about 7 00 p. M. Vixtility is back, the surging the most since brexit. The dow set to extend it to asia. Carney has a warning on warming. He says investors are ignoring the potential costs of climate change. Tell us about some of the guests we have . Of course, this is a huge anniversary, 20 years and a lot of questions i know you will be posing to guess over the next several days, where is hong kong . Role in the kongs next 20 years . Will it be a Financial Hub . Fair, via the other fastgrowing chinese cities . Yvonne as we continue to see a tighter grip from china here in the city, we certainly got a warmer response and tone and tenor coming from the president on his first day on thursday. He did say, hong kong has always been in my heart. He wanted to talk about the benefit beneficial ties between hong kong and china. He wanted to talk about not challenging beijings authority, as well. It was a softer touch, but some thorns as well. His meeting with the chief executive, he praised him for cracking down on that small but vocal Independence Movement earlier this year that became a very Political Force during his term. We talk through this, the future what is in store in hong kong the next 20 years. In 10 minutes time, we will hear from the former Financial Services secretary, fred ma. And, the former chairman of hong kongs exchanges. He will be joining us in the next hour, as well. On Bloomberg Markets, i will speak to the chairman of a holdings company. A major player in hong kongs entertainment and restaurant scene. Betty mr. Hong kong, we will be talking to a lot of folks who have various opinions on where hong kong is headed. In the meantime, lets take a look at how the markets finished u. S. Trade. You can see a big tumble here on the back of those tech shares. A look at the nasdaq, down to the sevenweek low, down 2. 1 . Falling 167 points. In asia, lets take a look at how the new zealand markets are opening up. Down about half a percent. The kiwi trading flat. We are counting down to the open in south korea. Mr. Moon is meeting with President Trump as we speak. Equity futures in australia showing a gain of 1 . However, both kiwi and aussie dollar are unchanged. 1. 16 . Futures, down checking japanese futures, how they traded in chicago. Nikkei futures following the lead of wall street, down 0. 1 . The dollar slightly lower against the yen, off 0. 2 , trading at 112 even. Trumpst up, president s and clinton are to meet for the first time at the g 20 next week in hamburg. After bilateral relations are at the lowest in decades. This includes the war in syria, russias intervention in ukraine, american sanctions in moscow, and the kremlins a legend meddling in last years election. Those subjects will be raised. U. K. Prime minister theresa may has cleared her first parliamentary hurdle. Lawmakers expecting the queens speech. Northern ireland Democratic Union is the government. The bill only passed after ministers rushed at an announcement, funding for women in Northern Ireland to have abortions in england, to head off a tory revolt. The bank of england governor says he is concerned investors are not doing enough to assess the threats Global Warming will have on their assets. Mark carney has won the backing of many ceos for raising reporting standards related to the environment. He says it will help investors realize how rising temperatures can affect company performance. The risk is that people are not talking about this sufficiently. There is a bigger adjustment that comes. Toughernt much technological displacement. North korea has publicly vowed to kill the former south korean leader. Through statee television, saying she would face summary execution, should u. S. And south Korean Forces attempt any execution on kim jongun. They are planning to they added the plan was scrapped thre television, saying she would face summary execution, when they were impeached last year. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am courtney collins. This is bloomberg. Betty renewed selling an attack sender sector, sending u. S. Equities tumbling. With more onenan the tech selloff, yet again. Banke saw rotation in stocks, they were flying, tech was dying. Was at its worst, lowest since brexit. Take a look at the way we closed. For itshe nasdaq headed worst days since tuesday. It is an improvement from a drop in the selloff. Big, standout stocks, they are all tax bones. Especiallya big hit, as it loses to nvidia. T, the maker of a robotic vacuum cleaner taking a big hit as a short seller announcing they see the stock going down much lower from here. Volatility hard to get rid of. The hottest risks on trade, the stocks. Tocks fang lets look at the bloomberg. At the top come on the white line is a huge take off in fang stocks. It shows tech stocks are worse for wear. It is a dramatic separation in terms of the directions the two industries are going in. Yvonne lets talk about the banks, the rally kicked off yesterday after the fed a stress test. It gathered momentum today. Su a huge buyback, bigger than expected. 33 banks passed with flying colors and one eat to buy eked by. Lets go into the numbers. Stocks were up 2 to 4 across the board. We have one more bloomberg to show you. A lot of bank stocks are mirroring what we talked about central bankers been union bringing in the rate hike, once again. Lets take a look at one particular bank stock they really took off. That was a regions. It was up 11 times the normal volume at the height of trading. Look at that big hike. You can see how the stock has really jumped. It is just an example of how these particular stocks, where investors wanted to be for now. Su, thank you, joining us live from new york. We will talk about the south korean president , moon jaein, having dinner with President Trump right now at the white house in d. C. North korea may be the main topic of discussion after the Treasury Department announced increased sanctions. Lets bring in ramie inocencio more of the highlights from that dinner. Ramy as they are having that dinner, the more substantive part of their meeting will be happening tomorrow and friday. You outlined the yourself. The defense situation between north korea, what is happening in north asia, and the deficit over the past five years, it drivers of two main discussion between the two leaders. Things,t aspects of going to the bloomberg terminal. There is a great maps function. Is maps 5. This is where potential Nuclear Ballistic sites are. I want to point out the proximity of pyongyang. This is only 200 kilometers long. If anything should happen, it could be mutually assured distraction on both sides of this border. To the west, china has been trying to be pulled in your by the United States. Ever since february, china has stopped importing north korean coal. But there is more that can be done. With u. S. Pressure rising on china, that happening today with Steve Mnuchin saying there will be penalties with institutions, as well as people, affiliated with china, as a pertains to north korea. In a cityse is a bank on the border between china and north korea. This is been serving as a conduit for the north korean access to u. S. Financial systems , as well as international systems. Is unityspect shipping, with dolly and dalian. Two chinese citizens have allegedly been helping them avoid sanctions. That thereoint out are things here with chinese exports as they pertain to north korea. They also could be used as leverage. At last year, steel exports to north korea, soybeans, fuel, oil, gas, they can be levers that could be pulled, in terms of trying to make something happen with the pyongyang regime. Hopping back into my bloomberg, there is what is happening in korean trade. On the face of that, all of this is rising. And it does not look like it will be stopping the trade deficit. Ramy, thank you so much. Still ahead, how was hong kong placed for its future place in the world . We look athanges, sustainability and livability. Economics are doing well. Our next guest gave the now chinese president a unique view of hong kong back in 2004. We asked frederick ma heavy seas the relationship with china. This is bloomberg. Lawhe preamble to the basic , or major fundamental, is that hong kong is in inalienable part of the peoples republic of china. Autonomy under the basic law. Over the years, we have been operating, in my view, very successfully under one country, to reserving are serving preserving hong kongs position. Important point about the people in hong kong is that an understanding of the relationship between pluralism, rule of law, prosperity, free markets, free politics, is part of their dna. It is amazing, and good for morale, that it is not just older people that feel that. It is younger people, the generation that feel passionately about freedom. They should be represented in the government of hong kong. They usually win a majority in elections. Elections are the pretty limited in what they can achieve. Could hong kong be marginalized in the future . That was not a concern at the time. But now people see china has and it isntrol impossible to have a financial senator when you still have control. But the chinese economy is still growing and Financial Services are still badly needed. It is in a unique come good position to do that. Those are some of the big names of speaking on bloomberg as we mark the 20th anniversary of hong kongs in china. Kongs handover in china. We have a fred ma in the city. Thank you for joining us. A landmark day for hong kong. Rise ofable to see the the city is not just a civil servant, but a business leader. Have you reflect upon the past 20 years and how to the plane to hong kongs future . Fred hong kong, during the last 20 years have has grown to become an International Financial center. 20 years ago, our Financial Market was not as good as today. Capitale are the raising center for not just but in the world. Our fundraising diversity is one of the top three in the world. Alongside with new york and london. We definitely have done well, in terms of Economic Growth, during the last 20 years. Our growth rate is roughly around 3. 4 during the last 20 years. Compared to china, you would probably say that is low. But compared to most of the economy around 2 , we have done quite well. Yvonne what you see as the biggest challenge . Put we probably have to more resources on i. T. Shenzhen is the Silicon Valley of china. Yvonne singapore, catching up . Fred one big challenge is to remain our status retain our status as a big financial center. We have a lot of competitors. Singapore is a competitor. Shanghai is a competitor. Even shanghai is trying to catch up. We have a lot of edges. We have our judicial system, the rule of law, the human capital. Because the competitions are so strong, we cannot be complacent. Yvonne do you think this is an opportunity for beijing to win hong kong people over, to address these issues . Do you see that kind of will coming from president xi . You know him quite well. He was here in 2004 and you met him. Do you think he has an understanding of hong kong, 20 years later . Fred absolutely. Yvonne how so . Fred his father had a long relationship with dandong, and he was a relatively free solicitor to hong kong. In 2004, i was a secretary for Financial Services and the treasury. I had the honor of working with him. We took into the Hong Kong Monetary authorities and talked about the Economic Growth of hong kong. Even during that visit, i could tell he loves hong kong. He really cares about hong kong. And he does know quite a bit about hong kong. Yvonne i want to talk about mtr, infrastructure a big part of hong kongs integration into china. There is talk of a Highspeed Railway which has faced delays. Chinasprime example of tightening grip in the city. What you think of critics who say, we do not want chinese officials having immigration control in the city . Without location location, it will not be as effective as it should be. With it, it is a more effective railway. Fact, it is in europe, london. Staffn check in with your , and the French Border at the same time. Then you arrive in paris. Yvonne but people say it is different when it is in two sovereign states, that it could put one country at risk. Fred we need more particulars to make that kind of argument, because we are one country. This colocation arrangement is happening many years in the shenzhenhong kong border. We have to balance a lot of things. To make it effective as an economic tool. That withoutink it is another, train, just faster. From hong kong to shenzhen it only takes 40 minutes. It does not make sense. It will be completed by the Third Quarter of next year. I cann, with colocation, see hong kong will be connected to not just Mainland China, but the rest of the world. Yvonne one road, encompasses that as well . How does hong kong fit into the picture . Fred one belt, one road, challenges for hong kong. We are talking about lots of business opportunities. We cannot sit here and wait for opportunity to come to us. We have to go out and the more aggressive. Look for opportunity. We have to capitalize on this very important nationalist strategy. Yvonne fred, great to have you with us. Thank you for joining us so early in the morning. Mtr chairman. Do not miss the former chairman of the hong kong exchange, he will join us. This is bloomberg. Betty heres a quick check of the latest business flash headlines. Sold assets and introduced a new ceo. We are told he wants to give brian time to improve the companys performance. He took over last month and says he may reduce share buybacks and pursue acquisitions. That raises questions whether icahn will support him. Bhp opening of credit for its iron or joint venture in brazil. There will be access to more million. 150 in november 2015 killed 19 people and polluted waterways in two states. The reopening process has been delayed by the mayor. Murdoch will have to keep waiting. She told parliament she wants further scrutiny of 21st century s operator. He also controls the times and newspapers in the u. K. Buyers headed back to the market with what may be a hefty bargaining chip. Tokyo and osaka gas want to resell gas. They have more supplies and they need. Something their contracts denied. Japans Free Trade Commission tokyo gas says it will now seek more flexible contract terms. Will japan inch closer to whoooo. Youre searching for something. Like the perfect deal. On the perfect hotel. So wouldnt it be perfect if there was a single site where you could find the right hotel for you at the best price . There is. Because tripadvisor now compares prices from over 200 booking sites. To save you up to 30 . On the hotel you want. Trust this birds words. Tripadvisor. The latest reviews. The lowest prices. Hotne 7 30 a. M. Friday in hong kong. We are 30 minutes away from asias first major market open. We mark the eve of the 20th anniversary of hong kong handover to china. Betty a historic moment for hong kong. It is 7 30 p. M. Thursday evening in new york. Markets closing considerably down. That tech rally just disappearing today. The s p 1 lower. I am betty liu, here in new york. Yvonne i am yvonne man in hong kong. Youre watching daybreak asia. Betty breaking news out of japan. A lot of economic numbers we are waiting for. Pricesp is cpi, consumer yet again missing economist guesses. This is year on year, economists estimated a rise of 0. 5 . When you look at core cpi, excluding food and energy prices, not much better. Also missing estimates, no gains at all. Where is the inflation for the bank of japan . That is for the month of may. If you look at the jobless rate, up 3. 1 , that is exceeding what economists estimate of its 2. 8 jobs rate. The jobs to applicant ratio at 1. 49. It shows pretty much no move on inflation. That continued frustration for japanese officials and for the bank of japan which says, where is that inflation that allows the boj to start stepping back on that stimulus . Inflationtheir target, still. Lets get more from adam haigh. Pylon that the retail Sales Numbers we got yesterday, the stimulus is still not working there in japan. Adam absolutely. It is hurdle after hurdle, isnt it, the bank of japan keeps jumping over. We have Immediate Reaction to these numbers. It puts the context of a difficult situation with the economy showing declines here or there. Certainly going to be pretty hard for the bank of japan in the discussions going into next month and over the next few weeks. This is in the context of a of a risk off day. These numbers out of japan, head of the big deflator number we will get in the u. S. Later. It is one of the key measures for the Federal Reserve and Bond Investors who have been very worried about inflation in the u. S. Volatility is suddenly spiking, we see dollar under pressure. Is that likely going to last, or is there a sense this will pass . It is coming quick. We saw a big spike in volatility this week from Central Banks, europe and the u. K. , in particular. I will bring in the us terminal chart on the bloomberg, you can see across bonds and stocks, a huge impetus in volatility. The big question now, whether this has sustainability to it. The initial indications are, that it does not. In may just be a lot of the u. S. Is in rotation from one sector to another. People setting down some of their equities to buy into financials, got the clearance from the Federal Reserve stress tests this week. We hand back more money to shareholders, with buybacks and dividends. But you have to pay with that pay fo