galaxy note 8. and uber may be on the right road with losses. it is now a mere $645 million. a reminder to our viewers on what happened today in the u.s., you have to remember what happened last night. you guys were still trading in donald trumpsident said this. president trump: we have to close down our government, we are building that wall. let me be clear to democrats in congress who oppose the border wall and stand in the way of border security. you are putting all of america's safety at risk. betty: republican leaders sweating bullets after the comments. that hit the markets,. today, risk off. right after trade, you had mitch mcconnell, the senate majority leader who had been rumored to not have spoken to trump for weeks, ane, he is working with the president. they are going to work together on tax reform. trying to alleviate the market, that this government shutdown is nowhere near happening despite what you heard from trump. betty: is increasingly -- casee: is increasingly the the you are seeing markets sweating when it comes to the rhetoric. they are sensitive to the teleprompter trump. it puts a lot of steak with this government shutdown talk, as well as the debt ceiling raise. moving, with the dollar falling coverage rates falling with the u.s. 10 year. were on folkskets waiting for what mario draghi was going to say. a careful line. markets trading and closing lower. the dow, off by 88 point. that is setting up for you. hope you recovered from this typhoon. it sets up for you a stormy session. you are seeing quite a lot of trees and branches around. how the market reacts. we are seeing a similar trend in 0. zealand, shares down 1%. the kiwi getting relief after trade numbers. holding onto that. cindy 908 -- 7908 for the aussie. to japan, 108 right now. below the handle. looks like it could be i'm not too good day for the equities. like ayvonne, looks shaky opening. let's get to first word news with courtney collins. mario draghi has warned federal policymakers to be open-minded about the future. te said central banks mus not be constrained by traditional models. he said the world changed after the financial crisis. he added, that is obvious to most people but not all. actions undertaken in the last 10 years in monetary policy and regulation have certain made the world more resilient. we should continue preparing for new challenges. deltaey: the pope river delta is cleaning up after typhoon hato. sayral leading hotels services will remain shut thursday. the minor says it expects to start a stage to ramp up of its coal operation in new south wales. it has also reported a rise in measured mineral resources. it's final dividend per share is 56.4 cents. and -- if you are watching in sydney. profits jumped to $64 million on revenues of $353 million. the board has approved development starting next month. they expect to fund the project with cash on hand. with first production in 2019. pain in interim dividend of six aussie cents. news, 24 hours a day. i am courtney collins. this is bloomberg. betty: more now on how wall street reacted to the threat of a government shutdown to fund his proposed border wall. i want to bring in su keenan with more. at minimum, we saw uncertainty. u: there are reports he had a breakdown in his relationship with the majority leader. uncertainty,aising the s&p 500 falling to read if we look at the big movers, interesting group of stocks. that only has trading volume doubled, investors child in. fascinating story. a pharmacy accused of marketing animal painkillers to human users. the past two quarters. they have denied the allegations. this is a story that will continue to play out. there was a battle of the home-improvement stores with home depot stock pulling away from the blue, lowe's. the line shows how the differential has risen. these not only hitting equities but driving people to safe havens. shery: if we going to a market snapshot, we mentioned the yields falling. we saw gold futures bump up. this posturing by trump in his phoenix beach was of concern. that's go into some of the comments he made. he talked about ending the north american free trade agreement, e-kindled concerns. and the general theme of can he deliver on his agenda. investors waiting for the jackson hole commentary to reassure the market. yenwill notice the golden roller coaster. have seen, as the risk on risk off continues, it playing out in these two vehicles. yvonne: we did get some data coming out. u.s. fuel stockpiles for the eighth straight week. shery: there was -- about thewas concern bulls. $48,an see we got above carrying through. the fact that there has been yet another decline in the stockpiles comes as it believes fears of the summer ending. one of the key analysts is saying, this is going to help support prices. let's get more on the impact of the shutdown. if he doesn't get the money for the wall, we have got reaction in the markets. how much of this is really noise , or a real threat? some of it is noise. people are watching politics more than the fed. overall, we have been in a.d. de-reisking mode for a while. we are tactically modestly underweight. part of it is this political instability. there are good things. a you have strong earnings growth in the u.s. and europe. valuationsr hand, show markets are essentially on a sugar high. they are on a sugar high. you have to factor in a little bit of the potential of some type of government shutdown. it doesn't seem like markets are factoring this in, but we have not teenaged huge market reaction in the past with similar situations. what sort of impact could we actually have? some are saying me treasury yields could fall to 2% or lower. >> it generally could be negative for the markets. the general environment is fragile for risk assets. stocks, high-yield spreads. invest in and great spreads. they are above their 90th percentile relative to their long run history. conditions are fragile, political instability is one factor. you have others that could lead to a drawdown. betty: you say markets are on a sugar high. others will look and say, we are perhaps priced for perfection. not exactly overpriced. why are we too expensive year? are good things. you have strong global growth. it is broad across the growth -- globe. positive sentiment. volatility is low. sentiment,sumer those measures are close to their all-time high. the problem is, look at u.s. stocks. rates are expensive as well. we have jackson hole coming up, participants expected to be a non-event. you have this general malaise associated with stretch valuations across the board. there is no buffer. we will talk about jackson hole in a moment. stay with us. sebastian page with t. rowe price. yvonne: still ahead, we are going to unpack the latest earnings. joining us first on bloomberg and half an hour. betty: and earnings focus. his first interview on their results. "daybreak asia." president mario draghi is calling on thanks to be open-minded. a speech that avoided specific signals and guidance. he also made a fierce defense of stimulus programs, both in europe and across the atlantic. >> a large body of an article research has substantiated the success of these policies. in supporting the economy and inflation. euro.n the -- both in the any notice states. sebastian page with us. what did you make of this speech? careful to tow this line. given what happened to the euro. did you find his conversation, his speech was a nonevent for the market? i think so. he does have to tow the line. on one hand, he has to recognize qe and stimulus will not last forever and growth is improving in europe. on the other hand, he has to deal with the strong euro which could have countercyclical effects. we will probably see more of that in jackson hole. betty: what do you wish he said that she did not? >> he said what he had to. the market likes to ask for transparency and guidance. the reality is things unfold in a not always predictable fashion. he is doing what he is supposed to do as a central banker. betty: looking ahead to janet yellen, you mentioned before the commercial break, you do not think there will be much market moving news out of jackson hole. >> we have this expression popular in the u.s., a nothing burger. are at least to two things to watch. first, inflation is somewhat lower than expected. how will policymakers describe their views with respect to inflation? do they expect these to be transitory, or is it something more permanent? it might signal something more dovish. on the other hand, especially in yellen's speech, there is the topic of financial stability. is this a third mandate for banks? commentomist made the the last two expansions and it is not what the fed rising rates to control overheating economy and inflation, but rather with the popping of financial doubles. financialpt of stability, high valuations of financial assets, if that is making its way more into the , that would flash something more hawkish as far as expected changes in policy. makers don't want to announce something unexpected in jackson hole this week. financial stability, that is not a mandate for the dead. inflation is. the central bankers out there, many of them are dealing with a similar issue with inflation. they are pretty much stuck in a bind, sounding anymore hawkish than they already are. what can we expect? they going to have to address some of the structural issues when it comes to technology, the wage pressures and whatnot? >> if you step back and look at the context, 15 trillion dollars in stimulus since the crisis. even though the fed is slowing $200 billion ais month. you have a pickup in growth. low unemployment. yet, to your point, lower-than-expected inflation. it could be due to technology. some have claimed globalization. betweenationship unemployment and inflation appears to be broken. topicial stability is the and something central banks are taking intoly account. it could signal something more hawkish. nonetheless, the need to be very gradual and predictable so you deflate the potential bubbles. the bubble does not pop, it deflates. if we are all in this high-yield, ise, there further to run? to the extent sentiment remains positive, you have seen spread. you get into a situation where you have risks that are not symmetrical. not much more money you can make. you can lose a lot from risk materializing. risks on theer horizon that could materialize. there is a symmetry. yvonne: you can get around of the stories you need to know. mobile.ilable on the you can customize your settings. the news and assets you care about. this is bloomberg. ♪ despite lawsuits and leadership struggles, uber continues to expand its business. more than $6.5 billion of cash onhand area investigators -- hand. investors have been more skeptical. our reporter from san francisco. good to see you. from some ofshing these mutual funds. eric: vanguard down 15%. down just 1%. the public problems, namely losing it ceo, have taken a toll on uber's's perceived valuation. are the paper valuables, but it is a signal of how they are thinking about it. yvonne: we are following this ongoing barrage of that news come out reading to some of these mutual funds to be bearish moving forward. is it discouraging other investors as well? eric: if anything, they are looking at uber and seeing this as an opportunity. and uber rival is looking at a major investment. a lot of that would be buying out uber's shareholders already. that probably would be significantly or at least 69 billionbelow the dollars valuation. at the same time, other investors would invest another billion or so, trying to save valuationive them the even though other people want to sell for less. still seeing decent numbers when it comes to trips. thank you. from sans live francisco. coming up, we are going to take a look at president trump's border polities from the perspective of immigrants who have contributed to the nine states. -- united states. ♪ got you outnumbered. the dinosaurs' extinction... don't listen to them. not appropriate. now i'm mashing these potatoes with my stick of butter... why don't you sit over here. find your awesome with the xfinity stream app. included with xfinity tv. more to stream to every screen. a.m. in hong kong hato hitfter typhoon . some parts, macau in particular, seeing quite a bit of damage as well as casualties. incredible footage, a truck being toppled over by that wind. much kolmar here in new york. calmer in new york. 7:30, 24 hours after one comment from trump scooped the market. yvonne: you are watching "daybreak asia. courtney: president trump's threat to shut down the u.s. government secure funds for his pass wall -- congress must a spending bill to keep washington running by the end of september. leaders do not yet have a plan for how they will proceed. they also rejected the president's threat. potential bank the regulations could add $27 billion in profits at the six largest names in the business. experts say that could raise pretax income by 20%. -- goldman sachs as seen as an join the smallest percentage increase. corporate japan is urging shinzo to use the current run of growth to raise the sales tax. mitsubishi chemical chairman says difficult measures should be tackled in the good times. the government must not waver. australia's high court begins hearings thursday on a constitutional crisis. three of the prime minister's lawmakers could be declared in eligible to remain in parliament. the coalition holds a one seat majority. day.l news, 24 hours a i am courtney collins. this is bloomberg. yvonne: thank you. a look at what we should be watching as trading gets underway in asia. we have been talking about tracking the thai phone -- typhon. historically, the hang .eng has tumbled futures are assembling a higher opening for the hang seng this wednesday. we do have to keep in mind, some sectors are showing there might be some pressure when it comes to the hong kong action. macau, some hotels turning away guests. u.s. casino stocks, with maccallum facilities. jpmorgan, anticipating revenue will take a hit. have -- kicking off the earnings season for chinese lenders. also watch chinese insurers, also to report results today. you can see both stocks have underperformed of the asia-pacific energy index. in noted in blue and white this chart. both expected to deliver a rebound in the first half, given higher oil prices. oil and gas producers aso have given a bit of shine. a lot of it is going to come haveto help oil prices fared in the first half. higher commodity prices, that has been a big boon. --e metal, piping up the popping up the prices. sophie: we have had a lot of naysayers coming to the fore. into that chorus. regulators have been stepping in sync and steel. -- zinc and steel. you can check this out. aluminum, while it is one of the quieter contracts, chinese futures have had the heaviest of month in august. surpassing the record we saw last november. the aluminum story might be seeing a fundamental shift which has prompted the likes of ubs to raise their forecast. aluminum, it is the best performing base metal in 2017. you can see that on the bottom of the panel here. showing the surge. the metal is set to build on its weekly advance and on course for a gain this month. sophie kamaruddin with a look at the markets. hong kong coming back online in a few hours. immigration, back in the spotlight after president trump renewed his ousted wall along mexico. shut washington down to is necessary funds. president trump: we have to close down our government, we are building that wall. let me be very clear to democrats in congress who oppose the border wall and stand in the way of order security. you are putting all of america 's safety at risk. >> what we have done already in the house, control our borders. i don't think you have to choose between the two. about thiss talk with two people who are pro-immigration. deepak chopra and his co-author. they recently co-authored an op ed on how immigrants contribute to the u.s. economy and released a book recently. welcome. the book is essentially inspired by immigrants, poems inspired by immigrants. you have been very vocal on donald trump, i know this. critical on him and his policies. >> a typhoon. these terriblell offense we were talking about with stocks. i would buy all the news is because he is giving news a run for its money. more turbulent he gets. more turbulent he gets. betty: the description he had about the border wall he had with mexico, you say that is going to be a jobs killer. >> it will hurt the american taxpayer. trade wars.se it might even worse and security. these days, there are no walls anywhere. is there a wall between us and hong kong right now? if you want to attack someone, you do it through cyber warfare which the russians have done. already. walls.re the real for the environment, it is that for the ecology, it is that for trade. it is that for the american taxpayer. it is just good for his rhetoric, that is all. betty: i know the both of you have come very strongly on pro-immigration and there are many people who agree with you, but there are many who disagree. ,ow do you make that argument switch the other side, when it seems so entrenched? >> the immigration is such a fiercely debated issue. if we build this wall, it is going to be deleterious to middle-class americans. built, there is no doubt going to be a trade war. mexico is threatening to not buy corn products. we send about 30% of corn to mexico. what happens when mexico says they will not buy corn? will affect -- middle-class people in iowa who supported donald trump. thisems like every day, -- is not america first, this is america last. betty: i want to pull up a chart. we love our chart at bloomberg. let's bring in this one. what is so fascinating, the white line is the migration fear index. did you know there was an index that measured this? just look at the spike since the middle of 2016. no surprise, when campaigning was in full thrust. stoking those immigration fears. i kind of look at this, and i say, is this a failure -- it is a success of donald trump igniting those fears. lure oflso a fairl those who are pro-immigration to get that message? >> it is a failure of pro-immigration people also. they are not basing their on fear. fear comes from people who are fearful themselves. i hate to say this. fear, ityou have affects everything including the economy, ultimately. it is going to affect everyone. bigotry, hatred, prejudice. they are all based on fear. betty: it is at the highest level. >> we are becoming a tribal nation. extreme nationalism is nothing other than tribalism. we just heard overnight from paul ryan, talking about the proposal for immigration policy. one that is based on merit and contributions. paul ryan was saying, there are different needs necessary for different parts of the economy. at what point do you think there truth to that? >> there is a great point to be made for a meritocratic -- come help 2000t -- immigrants come to america. first-generation, donald trump, he needs to be more judicious. he is spreading fear and anxiety. that is not a good thing for america or for markets. index, ing at the fear would see this as a trading signal to buy u.s. stocks. the american people know open borders is where you make most of your profits. we need to be advocating, those on wall street need to advocate for free markets because that is when we can believe a rising tide lifts all boats. there is an argument the immigration policy is dated in the u.s. already. what in your view is sensible policy? >> the looser it is, the better. even if the illegal immigrants went away from california, it would shut down. america is told on diversity. it is built by immigrants. that has been the strength of this country. trump will hurt us in more ways than one. a lot of people follow you because they know you are for onthe beacons wellness. i know you have talked about trump and his personality and what you think about him personally. seeing the way he is right now, do you think he will last in this presidency? >> i do not think he will last. it is in lanes. -- flames. ,nflammation in the mind, body and personality. it extends to society. i would like to do an mri scan and look at inflammation in his brain. betty: have you offer this? >> i have, yes. betty: good to see you. : whereors of "home everyone is welcome." samsonite sales rose. we are going to find out where the biggest growth is coming next. ♪ betty: this is "daybreak asia ." the world's largest luggage maker has posted results. the stock surged the most among asian specialty retailers. sales are expected to rise. kong, greatn hong to have you. it seems revenue, the first half, up 30%. continuing on the earnings momentum. it seems like a lot had to do with tumi as well. >> the results have been satisfying for us. our core business grew by single digits. growth has been consistent across all regions. north america. confidence thehe trouble business is resilient despite of the noise we hear. yvonne: europe, we continue to see these terrorist attacks that continued to be devastating. how are you getting that? are you going to see this shrinking sentiment? is it just with sales for samsonite? quite honestly, we do not see that impact. people don't stop to travel. terrorism, happening every now and then, it does not stop people. we saw the next day sales, stores in madrid, were quite fine. get aole society tends to little more on the unit to what is happening around the world. you don't want to stop living life. i have a chart, the bloomberg function. showing the breakdown by region for samsonite. we continue to see asia, more of a sore point when it comes to regions. north america, europe. what is happening in asia? hong kong has not exactly hit a bottom. what do you see as the potential upside? one market that has been less satisfying. korea, for obvious reasons. hong kong, still searching for the bottom. at this stage, we enjoy higher market share that we are investing in commerce. that is where we are lagging behind. i believe with an increased penetration of the digital business, we should be able to bring back asia to double-digit growth. then there was business that first went through a disruption. all of that has taken away a little bit of shine out of our investments. asia shouldt definitely be back to double digits. tell us more about that. you mentioned the digital business. the online side, samsonite. china and south korea and japan. are digital business makes up 10% of revenue. it has grown double of what it used to be last year. if itdn't be surprised makes up for a quarter of what is intended. that is the target we have in our mind and we are working towards. betty: thank you so much, the samsonite ceo. one feature we would like to bring to our attention is our interactive tv function. you can watch us live and also see interviews. you can become part of the usversation by sending instant messages during our shows. bloomberg subscribers only. ♪ asia." this is "daybreak out with itsg is new note eight. phonethe largest samsung and maybe it's largest. selina wang was at the launch in new york. reporter: the stakes are high for this phone to succeed. it is the latest version. let's go take a look. the note has always been the biggest phone, with a screen so large, it has been compared to a tablet. and downloading content. the question remains, can son samsung win big after the smartphone debacle? they killed off the model after reports of phones exploding. company ancaused the estimated $6 billion. >> we will not know if they have until over the debacle early 2018. people have tested it. rude order: that is not the only problem the company leases. samsung iso head of on trial for embezzlement. >> the executive management is inextricably tied to the brand of the company. companies, tim cook, different. he represents the company. i feel very few consumers even know who runs the samsung. reporter: perhaps the biggest obstacle is its competition. to roll out its highly anticipated apple iphone eight. >> you look at what is rumored to come into the iphone, samsung has a strong lineup. the top: they gained spot in the shipments after losing ground during the note 7 scandal. can they hold on to the increasing -- top spot in the smartphone market? only time can tell. by keeping that same note rending, they are saying the note eight completely fixes any problems of the past. selina wang, bloomberg news. betty: 20 more to come. watching samsung, moments away. and thethat verdict trial happening this week as well. let's have a look. sophie kamaruddin, watching the opens. sophie: the risk rally flailed on wall street. given the latest trump rhetoric, along with perhaps an impact when it comes to global trade. lower.arkets set to open the correlation has subsided somewhat rigged futures, changes. sydney, marginally higher. we have the likes of -- returning with stronger crude prices. oz minerals, also beating estimates. it is due to start developing the second a guest copper mine in south australia next month. other earnings to keep an eye out for. watch -- this is bloomberg. ♪ yvonne: it is 8:00 a.m. here in hong kong live from bloomberg's asian headquarters. i'm yvonne man. stories, asia-pacific markets said to follow wall street lower as a threat to shut down washington reverberates across capitol hill. worried the issue might hinder the debt ceiling debate prompts a sovereign rating review of u.s. debt risks. we are live from bloomberg's global headquarters. betty: i am betty liu in new york, just after 8:00 p.m. counting down to jackson hole, ando draghi defend stimulus says south central bank should be open-minded. school is out forever. we meet the education company linking students in china with teachers in north america. yvonne: it is going to be all about jackson hole the next 48 hours or so. when it we going to hear back from mario draghi? walking on eggshells the last hours coming to policy in his speech last night. take a look at volatility across currency markets. there is a lot of anxiety on where currencies are going to go, where the euro is going to go. we did see a little bit more upside heading into the speech from draghi. the spread between the 1, 2 euro volatility has widened. it is very different from what we are seeing with the yen, the cad, the pound. hang on for the traders. betty: even after his very carefully crafted comments, yvonne, you still saw the euro rise. it really is quite a conundrum for them where they have got the economic conditions in europe rising as well as the euro itself, which has been tightening since the speech in june. the big question is going to be what does he follow up on coming this friday and how does that compare to what janet yellen is going to say? a lot of scuttlebutt in the markets about what we will hear from the central banks. what will come out of that is that nothing comes out of jackson hole, that the markets stay calm. in the meantime, let's get to the first word news with shery ahn. y: ecb president draghi has warned policymakers to be open-minded about the future as almost anything could happen. speaking ahead of jackson hole, he said central banks must not be constrained by traditional models that may be losing relevance. he says the world changed after the financial crisis and policy must continue to evolve. he added, that's obvious to most people, but not all. >> policy actions undertaken in the last 10 years in monetary policy and regulation and supervision have certainly made the world more resilient, but we should continue preparing for new challenges. shery: president trump's threat to shut down the u.s. government to secure the funds for his border wall could complicate the task of raising the debt ceiling. congress must pass a spending bill to keep washington running by the end of september. the same deadline it faces to raise the debt limit. republican leaders don't yet have a plan for how they will proceed. they also rejected the president's threat. pres. trump: believe me, if we have to close down our government, we are building that wall. let me be very clear to democrats in congress who opposed the border wall and stand in the way of border security -- you are putting all of america's safety at risk. >> while we work on doing what we said we would do and we have done in the house and we need to do, which is control our borders. i don't think you need to choose between the two. yvonne: china has called on the u.s. to withdraw sanctions imposed on chinese companies washington claims are supporting north korea. 16 chinese and russian entities are accused of funneling money or resources to pyongyang to help its nuclear weapons program. the foreign ministry says beijing opposes unilateral measures and attacks what it calls the long arm jurisdiction of the united states. australia's high court begins hearings thursday on a constitutional crisis that could threaten the turnbull government. three of the prime minister's lawmakers could be declared ineligible to remain in parliament because they hold dual citizenship. the 117-year-old law has rbc in one cabinet minister step aside and two senators resign. turnbull's coalition holds just a one seat majority. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm shery ahn. this is bloomberg. yvonne? yvonne: sherry, thank you. of course, those threats from president trump during his speech in arizona seeing reverberations across the market. on wall street, a little bit, but a mixed picture in asia pacific. let's get the latest from sophie kamaruddin. sophie: it is early in the day as we digest the handoff from wall street. the nikkei 225 looking to resume losses for a third day in four. in sydney, there are earnings aplenty to digest. ,e have materials leading gains but financials dragging the most on the index. ,e have the picture in bonds tracking treasury, 10 year yield fell to a june low now sitting around 2.17%. in the commodities space, iron ore on the up, gold trading just above the 1290 level. oil prices just marginally lower after jumping 1% overnight. that we gotven overnight in the wake of drums rhetoric, watch what is going on with the dollar-yen. it is tracking towards the 10860 level, the august type, so keep an eye on that. the yen's moves may be tapped by what we are seeing with korea risk as well as concerns around fiscal policy and action in the united states. we are seeing the korean won gain for a third straight day, the aussie up .1%, and the kiwi dollar gaining as 7235 rising after the trade balance beat estimates. not recovering all the losses we saw for the currency on wednesday that was triggered by the cut to the gdp outlook for new zealand. we are seeing the last for the dollar easing somewhat, but it is weaker against most major peers. topping thelar scale they are, the greenback also under pressure after u.s. july home sales data came in lower than expected, falling 9.4%. casting a light on the apache economic growth in the u.s. check out the euro, moving higher as an ecb official shrugged off the currency's gains for now, saying it is reflective of the euro area's economic momentum. the latest round of data surprised that an upside of that sentiment. the mexican peso recovering losses we saw in the wake of trumps rhetoric around nafta. a little bit of resilience for the peso, despite what trump has been saying. a last check on metals given this rally we have seen. a mixed picture as more skeptics are joining the chorus, dooming the metals' rally. keep a watch on aluminum, gaining 2.7% in shanghai. it is the top performer in the base metal 's year, but its price surge could see it rigpe for the next clampdown by regulators trying to rein in good of trading. we saw that for zinc. yvonne: thank you so much, sophie kamaruddin with an early look at markets. busy day of corporate results in australia. earnings were reported that jumped. to $1.15 billion in the 12 months. for more here is paul allen in first. how much of this was because the recovery we have seen in commodity prices russian mark -- prices? paul: a large part of it can be attributed to that. a very good result from south32, eightfold increase. billion,ess at $1.15 the market expecting closer to $1.18 billion. dividends of 6.4 cents per share , but it was all about the recovery in coal price, a very important resource for south32, and manganese as well. south32, the world's largest producer of manganese. the ceo had this to say. we adjusted production in the manganese business to take advantage of higher prices, consistent with the company's focus on value rather than volume. going ahead, south32's production forecast is largely unchanged, although the silver mine is expected -- production is expected to wind down this year as the mind begins to tap out. south32 shares starting trading, already up 2.6%. yvonne: we got quite a lot of earnings that came out this morning. saint-saëns was one of them with more bullish guidance. they needed it, didn't they? shares coming online now up 1.7%. the underlying profit, $156 million, a little better than expected. still a net loss of $506 million, but a huge improvement on a year ago with a net loss of more than $1 billion. no surprises, no interim dividends, but santos really struggling just last week, an $870 million write-down on its gladstone lng project. it has already taken to others totaling around $1.5 billion. more broadly, there is concern about the amount of debt australia's lng producers have taken on to build these very complex lng funds. a quick mention of all the minerals,- of oz shares up 2%, net profit after tax $18.6 million, up from $55 million for the same. last year. interim dividends six cents. minerals currently only has one mine producing, but they have broad approval to begin construction on a large copper mine in south australia. phase one should begin in september. back to you. yvonne: thank you, joining us live from the asx in perth. we will ask the ceo himself of atminerals coming up later 10:00 a.m. hong kong time with andrew cold, 10:00 p.m. in new york. don't miss our interview with another ceo as well, with us on bloomberg to discuss the company's results at 12:30 hong kong time. betty: back to jackson hole, where this week's symposium will be dominated by the path for stimulus and stubbornly weak inflation. ecb president mario draghi has warned colleagues to be open-minded and not be constrained by traditional models. our chief agent economics correspondent joins us now to talk about that. draghi not offering specifics, but what should be waiting to hear from him in jackson hole? is it going to be a nonevent? reporter: it may or may not, we certainly did not get specifics last night. it is interesting how the fed normalization will impact the world. we forget the ecb may be going down the path, too, and that is why draghi is so focused. he has previously signaled they will use the fall today's how they might exit the two week program. they are committed until the end of this year and have a very important meeting on september 2. an arizona, it will include growth that has been to the asia exports. they have a very strong currency to contend with as well. it will be important to see what draghi does signal at jackson hole, if he signals anything, because that will reverberate through this part of the world. betty: we heard ecb policymaker say that he is not concerned about the euro stifling growth. he is not concerned about the rise. he is more focused on shifting away from asset purchases and maintaining the easing stance. what did you make of those comments? enda: i think it demonstrates complexity. on the one hand, you could argue the fed has mapped out there normalization path. we don't have full details, but to some degree, the market is anticipating it. the ecb is more of an unknown quantity. especially for american markets in asia, a considerable degree of uncertainty as to how the ecb might impact as part of the world. when you listen to the ecb, it is interesting because he is saying they may maintain an easing bias while at the same time look at other ways of getting fed into the economy, other tools at their disposal beyond the classic qe mix that makes headlines. it is a reminder that even if the ecb does start to normalize their balance sheet, at the same time they may well be easing in other ways to ensure the economy is doing ok despite the strong euro. that is an important part of the debate going forward. yvonne: one central banker we are looking forward to is kuroda with a last-minute rsvp saying he is going to be going to jackson hole. of course, the boj years away from normalizing policy. what can we expect out of them? enda: these are the guys who invented qe. probably unlikely that we look at any kind of dramatic exit strategy signal by kuroda. it would be interesting if he were to signal perhaps to the point where the boj can start using back on purchases, but if we look at the most recent statement, they were flagging down the risks to growth, risks to inflation, not exuding overconfidence. it will be interesting to see a corona does signal the departure or stick to the same script. yvonne: we will see if that happens. enda curran, thank you. still ahead, samsung stepping up its fight with apple by launching its biggest phone ever. a closer look at the note eight. betty: up next, china's biggest oil companies discuss earnings. we will discuss what to expect with a senior oil analyst. this is bloomberg. ♪ betty: this is "daybreak: asia." i'm betty liu in new york. yvonne: i'm yvonne man in hong kong. china's state back oil giants are expected to post improved interim results on the back of stronger energy prices and lower cost. petrochina reports later on thursday, cytotec later on friday. joining us now is the senior oil analyst. good to see you. it seems like the higher oil prices are going to be doing a lot -- during a big favor. coming off some lows for some of these, petrochina, cnooc, sinopec. does not look like we will see such momentum now that we are stuck in the $50 range. >> year-on-year, we will see significant increase in profitability. but i think the question is going forward, are we stuck in this lower for longer environment, stuck at $50 a barrel? it could be we have seen the earnings peak given our average oil prices, which is pretty flat for the rest of the year. yvonne: seen up, -- cnooc probably has the most leverage when it comes to oil price recovery. is there anything it can do to reduce sensitivity to oil price? >> there is not a lot they can do to reduce their sensitivity, but what they can do is cut cost and. the name of the game is really to improve profitability through cost-reduction. i think what management are focused on is taking down the cash cost of production, trying to lower capex. when you see a report later today, i think he was a good progress. betty: it still does not really solve the problems of an output. i have a function here that shows petrochina, for example, we see this on a surge in sales even in the last quarter one earnings. we have seen gas and oil outputs still in the red. marginal oil very producer, and low oil prices great problems for the chinese oil industry because it tends to be quite high cost onshore. as a result, we have seen onshore production declined significantly. i would expect another 4% decline this year, not weighing on petrochina and sinopec. we will see production fall, but maybe only two or 3%. less exposed than the onshore names, but i think this will probably mark the trough year and i think we will start to see recovery in production as we get into 2018 and 2019. betty: i'm curious about the continued oil demand from china. how much do you think that will buffett oil stocks? >> what we have seen is strong demand growth in china has been tremendously beneficial for the downstream earnings of petrochina and sinopec. i think we will see some margins, off a little bit in the second quarter. but still, diamond stream profitability is really going to be important in driving the overall margins down for these companies. growingseen oil imports at 15% in china, underlying demands growing at 4%-5%. downstream is still an important strength of profitability for these companies. betty: bernstein i believe sees oil in the 50's through most of 2018? where are oil prices headed? >> what we have seen the last month, the last couple of months , there is certainly a tightening of the oil market. we have seen pretty good inventory controls in july, another good inventory control this morning from the eia on the back of very strong global demand. i think the question is as we come through driving season later into q3 and q4, we are going to see demand a slowdown and probably see inventory draws reduced. the worry for the market as we get into 2018 is really around the continued growth in non-opec supply, particularly in the u.s. what opec strategy is going to be -- the opec deal expires in march 2018 -- i think the big question is what is opec going to do once that deal expires? it is going to have to extend those cuts for a lot longer if we are going to see inventories will he unwind. yvonne: it is interesting, you mentioned about shale. i have a chart here. usually when it comes to oil inventories, if we see that falling, we see a reaction in the price and it goes up, which we have seen for the last couple decades. but lately, these two have been going in tandem, heading lower. does it seem like the market is tilting, overestimating what u.s. shale can do? it is overrated in a way? >> certainly there are increase questions for some results that have come out for midyear earnings in the u.s. ratios in places, which has led people to question whether we will see a production slowdown. u.s. oil production is very sensitive to oil prices. as we get down into the 40's, i do think that becomes a headwind for u.s. shale oil production to grow. once we get up to 60, that is a strong catalyst for production to re-accelerate again. i think the problem is that we are in this horny to 60 range, 50's in the middle -- this 40 to 60 range, the interval most shale producers feel comfortable in. inventories have been drawing down nicely, but i think the question is, are those sustainable as we going to be an of the year? i think the market says there is still too much supply. yvonne: going through some of your calls for the chinese players. cnooc you have outperforming petrochina. what do you think in terms of the petrochina stock price on the future of their gas and pipeline unit? do you think they will have to sell off assets? >> i think you are going to have to see a spinoff of petrochina's mainstream assets eventually, but i don't think that is going to happen yet, for a number of technical reasons. to have tois going sell their mainstreamers as china liberalize visits gas market and tries to encourage more competition. could beomething that a source of volatility for petrochina, but i don't think that reform is in the near-term. for petrochina, the biggest question is whether or not they start to pay a higher dividend. petrochina is the real laggard when it comes to dividend payments relative to see sinopec. i think the question is whether they will start to pay a higher dividend to shareholders. yvonne: always great to have you, neil beveridge, senior research oil analyst. you can get a roundup of the stories you need to know in today's edition of "daybreak" for bloomberg subscribers. go to dayb on your terminals, also available in the bloomberg anywhere app. you can customize your settings so you only get the news on industries and assets you care about. check it out at dayb . this is bloomberg. ♪ yvonne: a quick check of the latest business flash headlines. imports from japan that toshiba signed a deal to sell its flash memory chip unit by the end of the month. kyoto is saying buyers are extorting them. that includes its estranged partner western digital. the toshiba board decided to meet to discuss a new offer from a group involving western, kkr, and incj. the bid is said to be slightly more than $70 billion. betty: amazon's $13.7 billion hold with antitrust approval caught on the heels of a green light from shareholders. the approval indicates it does not think the tie up well hurt competition. concern has been growing in washington that big tech companies are becoming too powerful, and president trump has singled out amazon for criticism. yvonne: walmart is working with google to allow shopping by voice in a bid to catch up with amazon. next month, customers can link store accounts to googles express shopping service and use voice activated speakers to buy goods. next year that will include fresh food and in-store pickup. google is dropping its membership fee. they previously charged $10 a month or $95 a year. coming up, samsung hopes its new galaxy handset becomes hot property in a very different way from last year's note seven debacle. what is at stake next this is bloomberg. ♪ yvonne: 8:30 in sunny singapore on thursday morning, half an hour from the open of trading. yvonne: i'm yvonne man in hong kong. betty: i'm betty liu in new york. let's get to the first word news with shery ahn. shery: thank you. south32 has reported full-year underlying profit of $1.15 billion, slightly short of estimates. a statets to start ramp-up of its coal operation in new south wales early next year. it is also reporting a 24% rise in mineral resources at its kennington silver and led mine. it's final dividends for shares is 6.4 cents. the ceo joins us first on bloomberg to discuss the company's results at 12:30 this afternoon hong kong time, 2:30 if you are watching in sydney. potential u.s. backed deregulation could add $27 billion in gross profits as the six largest names in the business. say that couldes lift their combined annual pretax income by 20%. jpmorgan and morgan stanley would benefit most from changes proposed by the trump administration. goldman sachs is seen as enjoying the smallest percentage increase. corporate japan is urging prime minister shinzo abe to use the current wrong of economic growth to tackle national debt and raise the sales tax. the government approval rating fell earlier this year and a lawmakers want the tax i canceled. however, mitsubishi chemical chairman says difficult times, difficult measures should be tackled in the good times and the government must not waver. something clearing up after typhoon hassle. the storm was the most powerful to hit hong kong in five years and is blamed for at least three deaths in macau. jp morgan is warning the gaming revenue may be affected as some casinos lost power and the city's water and mobile phone systems were damaged. several leading hotel services say checking services will remain shot on thursday. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm shery ahn. this is bloomberg. yvonne: thank you. time to see how the asian markets are shaping up this morning. the latest with sophie kamaruddin. sophie: appetite for asian stocks being kept in check. looking to -- kospi resume gains for a third day up .3% with defense stocks. marvel is one of the top gainers in sold, rising by the most on record, the jump coming on expectations that third-quarter earnings for the game maker will rebound with the newly released game. aussie stocks now swinging to slight gains with materials leading the rise and flight center is the biggest mover, getting over 8% as it sees more normal airfare pricing. the nikkei 225 continuing to deepen losses down .2%. now a check of what is moving on the topics, snapping a two day rise. we have some strength coming through retail stocks, carol makers -- apparel makers on the up. this one leading the drop in that segment after the industry reportedly has agreed to bigger than expected price cuts with toyota for the october to march. keep in mind that the iron and steel index was the worst performer on the topix yesterday and looks to be the case today. steel is among the losers. it was cut to neutral over at j.p. morgan. last week, a tight prices -- it toed prices of hot royal oil keep up with chinese demand. still very focused on the chinese space. betty: does not quite rollup the tong. thank you so much. sophie kamaruddin on the markets. some of the big movers right now. samsung has launched a new galaxy note 8, stepping up the fight with apple. the largest samsung phone yet, possibly its most important. joining us is our tech vendor sam cam. the note eight comes after the note seven debacle, the exploding phone. a lot is riding on the note 8. what does it exactly mean for samsung? sam: like you said, there is a lot at stake with the note a lot. you probably remember the note seven fiasco last year, where some of the phones exploded days after release of the phone. samsung eventually had to recall all the phones globally. it has been almost a year after that. there has been a lot happening with samsung as well with the defected chief, jay y. lee, being arrested on corruption charges. all these things have basically led to sort of a lowering of the morale for the company. with the note 8, previously with the galaxy as a launch being -- previously with the galaxy s8 launch being successful, now samsung wants to put behind the scandals and controversy with the note 8, so it is a very important phone for samsung. betty: it is. does a signal they have finally moved on from the note seven debacle? paulsam: i would have to say ye. we will have to see in the coming weeks if there is any report of self immolation with any of the note 8. samsung executives had been very confident that this phone is very safe, and i think we can put some confidence in that because the s8 was very successful in terms of safety. there was not a single report of any phone catching fire. so with note 8, it is going to be another success, a lot of analysts believe. yvonne: i have been following you on twitter as you cover the trial of the century involving jay y. lee. of course, the verdict happening tomorrow. it has been quite riveting, drama filled, at times seeing lead choke up during his testimony. how has he presented himself in front of the court injures -- cord and jurors? sam: it has been a long trial, lasting six months, dozens of witnesses, hundreds of hours of testimony. almost all the evidence, according to what i have seen -- i have attended at least more than 20 hearings so far -- almost all of the evidence has been circumstantial, which means there is no really official transcript of what jay y. lee talked about with president park n the three meetings they had, so a lot of that is circumstantial. the prosecutors are saying there is also a lot of testimony that is basically a live by jay y. by jay y.ically a lie lee and the four other codefendants who were samsung executives. i think they have proved there is a lot of discrepancy between what they were saying before and what they were saying now. it is really up to the judge whether it is going to see the testimony from the defendants as valid enough to say that samsung is not guilty. , so wet a legal expert will have to be keeping our eyes closely on the case tomorrow. yvonne: certainly will be a big day for you as well. sam cam, our tech editor from seoul. chinese appliance maker my day up is betting big on automation calling -- following its purchase of a robot company. it is aiming to become the market leader in industrial robotics. speaking to bloomberg's tom mackenzie, the senior vice president says the opportunities are huge. industrial is the big push right now, especially for industries. i think that is a huge demand for the robotics application. we want to be the world leader. it takes time, but i think we can do it. tom: your business is obviously growing quickly, but the number of employees is reducing because of the use of robotics. where are we at and where do you see that going? 2016,pared to 2011 and the revenue grew by 30%-40% for the company, but the number of employees dropped 50%. tom: how is the use of robotics impacting the profit margin for midea? >> the profit margin had been growing steadily like every one point or two points the last 5-6 years, so it was 4%-5% in growth, now like 10%. tom: have you grow your footprint beyond china? >> there are lots of areas that are great opportunities, southeast asia, potentially a great collaboration with toshiba. u.s., we have a huge opportunity. tom: are you still looking for further acquisitions or have you stated your appetite? is this about digesting? >> i think we are in digesting mode right now. how can we integrate better? generate revenue and profitability to drive us. always there is opportunity, but i think we are ready to take the advantage we have right now. 'stty: again, that was midea vice president speaking to tom mackenzie. up next, the business of online education. we are going to speak to the ceo of a chinese company that is now valued at $1.5 billion. has some big chinese billionaires and a silicon valley venture firms invested in it. this is bloomberg. ♪ yvonne: this is "daybreak: asia ." i'm yvonne man in hong kong. betty: i'm betty liu in new york. let's focus on the booming mixture of education and tax. online education company matching chinese kids with teachers in north america, valued at more than $1.5 billion after a funding round from investors including tencent. joining us from beijing is the ceo. thank you so much for joining us. you have just completed raising $200 million from sequoia, tencent, and others. quite a big expansion for a company that has only been around for a few years. . what is going on with the market? how did you first see this demand? is huge inet demand china, given our population. the market size itself is a $15 billion u.s. market, so we have all this policy, many more kids are starting to learn english. everybody loves teachers from north america and our curricular content is extremely appealing the chinese parents and kids, so we have experienced really fast growth during the past two and half years since we launched in march 2015. betty: absolutely. i am curious about this funding round because there are a lot of people talking about the winter is coming and fundraising. how did you find a reception among silicon valley companies? did they get the concept runway? >> -- concept right away? >> yes, i think we talked to investors across the globe. education i think is the next big thing, talking about how education can bring changes to efficacy and connections that can make possible among teachers and students. this is a really amazing idea for everybody, especially when everybody sees fast growth. we just launched the market to an half years ago and had 200 students, today 200,000. betty: have you compared to utor, competitors like it also valued above $1 billion? what differentiates vipkid from other competitors? >> we are the only company that works with north american teachers only, and we work with very high quality k-12 teachers and esl teachers. three things differentiate us a lot from anybody else. one is efficacy. the second would be teacher community. thirdly, our data and research. talking about efficacy, parents want high-quality programs for their kids. we make sure we have 200 people curriculum team from all the top publishers across the globe and the best international schoolteachers. then we work closely iterating our program on a weekly basis and making sure efficacy as big. the classroom model ensures the learning outcome. secondly, teacher community. if you think about the 20,000 north american teachers we work with, they love the kids. she said she visited beijing last week and said the most exciting thing was not about the great wall or the summer palace, it was about -- i can hug one of my students, really amazing. the teacher community, they organize teacher meet ups across america. every month there are 40-50 of them. the kind of love teachers can bring to the students is different. lastly, data and research. we have 20 million classes going on this year. butne: it is interesting, still a very crowded sector right now, as betty was mentioning, some of your rivals. we have seen nearly 10,000 of these kind of afterschool programs in china, a fraction of them turn a profit. how do you make money out of all that? >> high-quality program differentiates everything. that is why we have over 50% of the market share for online tutoring. every chinese student who learns online, one of them learns with us. that is a huge advantage on our acquisition costs. students learn with us for four to five years, and also 70% of new students every month are referrals, so one of our existing customers was very happy, tweeting on social media channels, then their friends learn about it and send their kids to learn with vipkid. yvonne: do you think there needs to be consolidation, given how many players are out there? even the giants like new oriental, a dominant player in the business, the only make up 2% of the market. >> that's right, but if you are thinking about the online market, it is very concentrated. i have been teaching english as a tutor for the past 20 years almost as an educator myself. if you think about offline, 10,000. as the top layer, we are taking up 50% of the market share for online. we are seeing a great trend of online market over the years consolidating. yvonne: what is the biggest obstacle? there are still a lot of people probably that are going to say, look, learning english on a screen does not sound appealing for my kid. what do you say to those parents that say, i still value face-to-face learning and there is no substitute for that? >> you are right, the biggest challenge is adoption, thinking about how many parents are willing to send their kids to learn online. our distribution is that rwe grow by parents of girls, so we don't need to post -- we grow by parents' referrals, so we don't need to post expensive ads. neighborhood moms say their kids have great experience learning online, comment try it. their conversion rate is much higher than we have got through advertisement. also if you think about the efficacy, we have a research team working with top-notch professors like one from stanford as our advisor and cofounder of poor sarah -- cofounder of corsera. bringing top-notch technology into the program, so the learning outcome efficiency is much higher than they were learn off-line in a group set up where you go once a week for two hours and you barely speak anything. betty: just on a final note, the money that you raise, exactly how are you going to deploy that next? >> that is a very exciting question. we are big on our quality strategy and also our growth strategy, but quality comes first. builde are going to do is further our curriculum team, getting more talents across the globe on top of our collaboration with chief international, great publishers, corsera. we will align with more people so we had the best curriculum possible. secondly, deploying capital to our teacher community, making sure we continue to grow our teacher number from today, over 2000, to by the end of the year anywhere from 40,000 50,000. data analytics and research, we have an ai team thinking about how exciting it is to bring education equity to all kind of social classes, not just parents who can afford it. all these research are going to help us build a great technology team and you will our online classroom experiences so children will like it even more. yvonne: cindy, thank you so much, vipkid ceo just raising a $200 million round from companies like tencent. one feature on the bloomberg we want to bring to your attention is the interactive tv function, tv . you cannot only watch us live but also see previous interviews, dive into any of the securities or bloomberg functions, and become part of the conversation by sending us instant messages during our shows. for bloomberg subscribers only, so check it out at tv . this is bloomberg. ♪ yvonne: this is "daybreak: asia ." i'm yvonne man in hong kong. betty: i'm betty liu in new york. looking ahead to jackson hole, where this week's symposium will be dominated by the path for a stimulus and stubbornly weak inflation. i had of the meeting, mario draghi has warned colleagues to be open-minded and not constrained by congressional models. earlier we spoke to nobel laureate myron's goal. he said quantity of tightening will be an experiment. >> the speech was very well received. mr. draghi actually went through the history of monetary policy and said that the monetary policy combining together with research, the combination of research and policy, regulators had married the research together and overtime learned what mistakes they had done and changed their models to accommodate that. the one thing they did miss was the interaction of the financial system and the importance of the financial system with monetary policy and not only being able just to control the inflation rates without taking account of financial markets and the like. that,ked about the idea obviously, that quantitative easing programs that were put into place after the 2007-2008 -- during the 2007-2008 in the united states and in 2012 or so when he became president of the european central bank here in europe, the effectiveness and how he had felt that helped stabilize the economy and at the same time allowed for there to be economic growth in europe. >> some people argue that the solution to the previous crisis is beating the source of a potential problem in the future. at the moment, we have this tension we have been exploring between the lose financial conditions, asset value conditions, and what is happening with soft inflation prints. how is that tension going to resolve over the coming months? what can the central bankers ultimately do about it? obviously -- they have a problem in the sense that as quantitative easing was an experiment in our modern times, quantitative tightening will also be an experiment in our modern times. that means that they have to decide at what rate and how to reduce the large balance sheets they currently have. and second is how that interplay's with increasing rates. i think at the current time, the markets tend to be sanguine in the sense of let's wait and see and watch them evolve, the process of reducing the balance sheet and increasing rates. my view is that the threat of inflation tends to be muted and that gives them more degrees of freedom to experiment and to see how to reduce the balance sheet size, but not do it precipitously or with the great threat associated with inflation hanging over our heads. yvonne: such a tight rope -- betty: such a tight rope the central bankers are always walking. when is it ever easy to be a central banker? particularly these days. we are going to be watching, even if the wide speculation is there is not going to be a lot of news out of jackson hole, we are going to be watching it carefully. yvonne: just talking about some of this tapering debate out of the ecb, got a perfect chart to show how, located this is for ecb and mario draghi as well as the governing council. it looks really busy. show whatpoint is to is involved in this balance sheet. you have got gold and gold receivables, all these different things, and it makes you wonder how much thought needs to be put into this before we start talking about tapering. you talk about how mario draghi is trying to walk on eggshells. this is the reason why. that is almost it for us on "daybreak: asia." more coming up with "markets," rishaad joining us now. rishaad: you were on a roll. yvonne: i was trying to list out all these things, i figured, there is no point. rishaad: a legendary fund manager joining us in about 10 minutes, and in about an hour jpmorgan's lauren fitzsimmons at of sydney, fantastic analysis about what is going to happen perhaps at jackson hole and beyond. betty: a lot to cover. that is it for us on "daybreak: asia." "bloomberg markets" is up next. ♪ at one point, your father left your mother. mother found herself with four kids, no money. david: let's talk about ibm. ginni: we are the champions for business. david: do you see ceos are willing to say, mr. president, that is not a good idea? do you feel a certain responsibility? ginni: women still need good role models. -- >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it ay

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