Brazil and russia. In twoe highest and years. Betty i am betty liu in new york where it is just after 7 00 p. M. Yvonne it is just after 7 00 a. M. Here in hong kong. It has been about the apple earnings. It was maybe a slow quarter before the new iphone, that we were going to see potential delays on that front. Betty it feels a little like deja vu. We have seen apple disappoint before on their numbers with investors for giving apple. There is certainly more tepid revenue numbers just in anticipation of the new devices, the new iphones to come. This one that is anticipated really has to deliver or justify the amazing stock rally we have seen an apple. Yvonne absolutely, i think it is 30 this year. Lets see how the rest of the markets will be. A little quiet on the d. C. Front. Here is how new zealand is faring. We just got the jobless rate 15 minutes ago, falling to 4. 8 . The reaction on the kiwi, we are down 6 10 of 1 ,. 7421 for the currency. We are seeing the post rba reaction. A longer statement from governor philip lowe yesterday. In particular, talking down the currency. That Dollar Strength helping helping things a bit. For thetill at. 7961 aussie. We see oil pullback ahead of that u. S. Inventory report. Going futures not anywhere. Japan, the bank outperforming. Dollaryen, were back above 110. These as speculation stoploss sell orders would twist under those levels. But they are above positive territory, above the 110 handle. It was not it was not all risk on. Mixed data coming out of the u. S. When it came to auto sales, income, and spending. There was a lot of focus on that 22,000 down. Dow. Betty lets pull up the boards to show you where the markets settle today. As you mentioned, just shy of that 22,000 level on the dow. Shares trading in the after markets, if they keep up this momentum, they will open it up at a record tomorrow. Lets stay on apple. A strong outlook from the company. Following apple, joining us now from San Francisco. A lot of this is an anticipation of the new phones to come. Is there too much anticipation . Any skeptics out there that apple might not meet those numbers . Alex i think that is why the shares have reacted so strongly today. The Sales Numbers in the summer period, would be particularly disappointing, and that is not proven to be the case. They see the strength of the brand is standing up. Everyone is expecting the blockbuster new iphone later this year. That could do even better than we have seen in the past 12 months. Betty is there evidence people are holding back from buying new iphones because of this new iphone 8 . Alex yes, that is noise the case. They see how cycles work. Apple generally doesnt do iphone every two years. That has not happened this time. Was broadly similar to them 6s, which came before it. Product launchhe cycle, there is a slowdown. Betty what is priced in the stock . Are any saying the stock is getting carried away . Alex you have to look at two elements to read it is not just the iphone 8. Ofre is the expectation offshore cash expatriation. We have yet to see progress on that from the Trump Administration. Those two elements are what are firing it up to read we will have to see in six months time if expectations for the iphone 8 will work or night. Apple surprises investors with how enthusiastic they are for the product. Yvonne if you are a longterm investor it does not matter if it is a september launch. Alex, when it came to china, it is interesting. We hear tim cook say he is pleased with what is happening. But we have seen Slower Growth of 10 compared to what we saw year ago. I things turning around in the mainland . No, sales declined in china. The message changes when it comes to china. A salesuarter is one decline is not as deep as in previous quarters. China has been a huge growth driver over the past five or six years. In the past 18 months it has dropped off. Apple attributes a lot of its declines to currency. If it was not for currency effects, it would have been flat. Similar in taiwan. The big problem market is hong kong, where they have actual declines in growth, and that is driving the comparable decline. Yvonne deeper into the china market for apple in the next half hour. Lets get to first word news with nina melendez. China company lanning to raise money on the purchase of riotintos coal assets. Two Chinese Investment groups well offer a further 1 billion. The senate has confirmed the Christopher Wray as the new fbi director in a bipartisan vote. He vowed the independence of the bureau after President Trump fired his predecessor, james comey. He disputed trumps description of of a witchhunt and called Robert Mueller a consummate straight shooter. The one calling for calm on all toes after forces loyal president maduro arrested the opposition. The former mayor of caracas, detained 24 hours after the controversial constitutional vote. It shook markets, Drew International condemnation, and brought the threat of new sanctions from the u. S. Russias economy minister says the ruble has stabilized. He told bloomberg, oil is having less of an impact because of a fiscal mechanism introduced this year. He reiterated that any price above 40 is comfortable. He also said the u. S. Is using sanctions to gain a competitive advantage over europe. About european businesses and u. S. Businesses. Relationships have become worse after the announcement approved by the senate. [indiscernible] global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am mean a melendez nina melendez. Betty adjusting the latest corporate earnings. Here is su keenan. Tomorrow we will be talking about the reaction of apple. But today it is car sales, to build the markets. But there was was buoyancy in the market. The dow 22 thousand looked like a reality, temporarily. Had the markets prepared for a strong report from apple, that seem to be delivered. Lets look at the standout stocks. They speak to a couple factors. Sprint moving higher on word it could be exploring a sprintdish merger. Norwegian cruz lines, one of several, carnival and royal caribbean, on Strong Demand for cruz is. General motors is part of the story. It was the lowest its biggest sales plunged since 2010. Sales were down 15 in july. Lets go into the bloomberg g btv 7243. Themeg the brakes is the of this chart. If you look at the white line, it is from 2007. You can see the correlation of car sales with the s p 500. Look at the red circle. That is where you see a divergence. The car sales, the white line, going lower. While the blue line heads toward records. Could sales dragged down the s p . Theser warning sign technical charts seem to be showing up. Yvonne lets take a look at commodities, we see oil falling back below 50. There is a chance we are setting out for some inventories in the u. S. . Su that is a big question mark. You see yes, 50 oil was a miss in the tuesday close. Closedthe first time we at 50 since may. As the market pulled back, there is anxiety or speculation on what the government supply data will show. Because on tuesday we got the whiche supply data, api, showed a buildup in crude supplies last week. And the key hub had a big build. One trader said any build an inventory is negative for the market because this is the time of year when inventories drop naturally. That would be a countertrend. As opec works to rebalance, there is an uptick in output. One trader saying it is a marathon, not a sprint. That is what new investors are looking for, a quick answer to the direction question. Copper at a twoyear high. A number of factors supporting the bullish trend in copper. In addition to strong numbers out of china, the biggest consumer, the u. S. Economy showing strength. The u. S. Dollar continuing to sink. Yvonne thank you. Apple banks big on its upcoming iphone. By revenue forecasts saw shares dialup in an alltime high. Betty the brick nation meet in shanghai where there live for the latest on trade talks. This is bloomberg. Yvonne this is daybreak asia, i am yvonne man in hong kong. Betty i am betty liu in new york. Global politics are overshadowing this meeting of brics nation trade ministers and shanghai. When the term was coined in 2001 it was for a powerhouse of emerging economies. You can invest in this bloc. How has it worked out since . Lets get to Remy Inocencio with a look at the brics and how it has fared. On the whole, a positive picture. Lets look at it from a investors point of view. The bloomberg terminal. On a normalized basis of 21, if you in if you invested in the , it would have performed twice as well as the world index. This is clearly a positive. Looking at gdp growth next, it is a mixed picture. 8568. Is g btv. That is at 6. 9 . It is at the lowest in 25 years. But still higher than beijings 6. 5 target. Notable because we are headed to the fall party congress. In purple, we only have data going back to 2012. It is fallen from 7 to 6. 1 . There is the demonetization policy. We are expecting a rba rate cut. In blue, russia down because of oil recently. Bricfor brazil is the only nation with gdp contracting a negative percent. Blame, because exports are a factor. Bilateral trade has fallen by 25 percentage points, since 2013. We have to talk about inflation. Inflation across the world is either stagnant or slowing. That is the case for them bric nations. For china and india in the purple and white, that is at 1. 5 . For india in purple it is at a record low because of falling food prices. For brazil, falling food prices mean good news. Inflation has fallen from 3 from 11 at the start of 2016. For russia, inflation is rising. It is that 4. 4 . Higher than moscows 4 . Higher moving ahead into the Third Quarter. A mixed picture for inflation. Finally, if there is one thing that is clear, it is that investors are piling back in a very big way. The flows were actually negative, but now they are at their hiatus highest, at more than 160 billion. A question we ask our next guest, emerging market equity strategist joining us in the hong kong studio. It is interesting, you called it a new era for em. It is mostly about the improving are we talkingr super valuations, or investors chasing yields in this space . Equities, we are in a new phase, which happen in the First Quarter of 2016. Prior to that was a fiveyear down term. Which was a classic tightening positions, which led to a fallen profitability. There was a significant decline in energy and Commodity Prices, which is a huge trade hit to some of the markets we have been talking about, russia, brazil, and other commodity producers. Now we are exiting that. We are exiting that with rising operating profit margins. We have always had in these markets premium nominal gdp growth to the developed markets. The problem was, we were going through profit recession. We are exiting that. I think we havent up cycle here. Lets talk about cycles rather than new eras. We are investors, we look at economic conditions, earning conditions. Yvonne we talk about this gps upward cycle we see in asia right now. But if you look at the techheavy stocks or benchmarks like the kospi in korea, some major downgrades we are seeing are in india, as well. Thatsay you can see how consensus goes to records. But the Earnings Growth is just not there. Do you support that kind of thesis . Adrian i think india is the exception rather than the role. The eps revisions out of india had been negative in go in the opposite direction of what were seeing in the balance of emerging markets. It is beyond tech. If you look at the materials el, Petrol Chemicals and aluminum, i think there is a broader story than just tech. The issue in india is, expectations are high. But they have had to deal with two significant monetary events. Demonetization cause problems with recovery. Now, indian businesses are paring yvonne and the r. B. I. , as well. Adrian the r. B. I. Has been cautious about cutting rates. Real rates in india have been moving up, as well. India is the exception here. As we look at india going into 2018, we do think there will be decent Earnings Growth. These high valuations will probably be acceptable. I would caution, we are neutral on india. Of the key sectors in india, particularly places like i. T. And health care and consumer staples, which are expensive. Yvonne i meant r. B. I. , not rba. Themtwo y to get easy to get the two mixed. What are the sectors where you slike. Est bric where are you overweight or underweight . Adrian there is supplyside discipline. We have had decent recovery in Commodity Prices in the last couple months. Average Commodity Prices in 2017 would be higher than 16. I think that is all supply discipline rather than demand shock. If we look at the overcapacity industries in china, most notably steel, but i would also throw in petrochemicals, aluminum, cement, margins are staying high in those sectors. You can play that indirectly. We are bullish on taiwan and korean materials. Effectively, they are living under the pricing umbrella of china. It is a great irony the u. S. Is focused on antidumping duties against china steel, when chinese Steel Companies have a record high margins. We have some very cyclicalit iss focused on antidumping duties sets. The other area i would highlight is chinese banks. You look at the Free Cash Flow of the old economy in china, it has recovered very genetically from the lows of 2015. What does that mean . Of chinese, old Economy Companies to pay their debts, has improved dramatically. We think one of the big value sectors investors should be very overweight in the second half of this year is chinese banks. Betty those are great sectors to take a look back take a look at. Looking around the world, what do you think it is a emerging market that is perhaps under the radar, that others have not paid much attention to . We have been quite positive on markets such as chile, where positive Political Developments are going on. We think that will enable a rerating. Elsewhere, i have to say within em, our focus is into the larger emerging markets. We have overweights today in china and korea. Markets those two together, you were at over 40 of the benchmark. It is a condition that tends to be focused on large markets rather than the smaller market, the contrary markets. Mowat, thank you so much. One feature on the bloomberg we would like to bring to your attention is our interactive tv function. You can watch us live but see previous interviews and dive into any of the securities or bloomberg functions we talk about. This is for bloomberg subscribers only. Check it out at tv. This is bloomberg. Yvonne a quick check on the latest headlines. Didi chang and uber going headtohead in europe. The right taylor is back in estonia with cash and tax tech support as they expand. Didi chasedd uber. Betty sprint soared after positive talks with other companies. His optimism comes hours after they said they were interested. Softbank is exploring a link yvonne 7 30 wednesday morning in hong kong. Minutes away to asias first major market open. A cloudy picture this morning. Betty quite gloomy there. 7 30 p. M. Tuesday in new york. Markets also closing pretty hot. 22,000. At a record, apple might push it over the edge tomorrow. I am betty liu in new york. Yvonne i am yvonne man in hong kong. You are watching daybreak asia. Capital says Anthony Scaramuccis deal to sell his stake remains on track after his white house firing. It still needs to Cross National security hurdles. They want to sell to a subsidiary to chinas hna group. But it is far from certain, according to those familiar with the panel. To be among Chinese Companies under scrutiny for using domestic asset to secure loans overseas. Sources say the regulators is reviewing guarantees involving insurance, as well as dalian and other companies. It does not mean the companies have done anything wrong. Bloomberg has been told wall street regulators have agreed to rewrite the balkan role to loosen the restrictions central to the u. S. Response to the financial crisis. Our sources say the five will begin working together on revisions that would let the Trump Administration bypass critics in congress. They missed estimates in the second hour. They will have to cut jobs. They are reeling from a 3. 3 drop in the American Box Office due to a string of disappointing hollywood sequels and remakes the summer. It is seeking 30 million in savings. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am nina melendez. This is bloomberg. Yvonne apple has predicted revenue this quarter ahead of analyst estimates, signaling strong scale sales of iphones. It is a product that accounts for almost 2 3 of apples revenue. It three new models are expected this year. Mark gurman joins us from San Francisco with more. I cannot help but remember what happened in early 2016 when we saw iphone sales of fall for the first time in 13 years. Everyone was saying, we will get a new cycle of iphones. That did not live up to expectations. And then everything shifted. Is it different this time around . Everyone talks about the super cycle, can it live up to that hype . This i feel like we have conversation every year. As long as i can remember, people are saying wait for the next iphone. Oh, this next one will be amazing. It is an annual story. Almost a by quarterly biqu arterly story. Iphone sales were up 1 , 2 . And 3 in terms of revenue, yearoveryear, for the Third Quarter of 2016 to 2017. It could have been worse. We are at a fever pitch for rumors about the iphone 8. Being up 1 to 3 , that is good news for apple and investors. Yvonne in terms of the hardware, we have seen a couple links on what will come out for the new iphone generation. Can it live up to the buzz, given the fact we saw a leg up when it came to samsung and their s8 launch . Mark bloomberg has been reporting on this new iphone for months. We had a big story in april. I would encourage everyone to check that out. Yes