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tv   Bloomberg Daybreak Asia  Bloomberg  September 26, 2017 7:00pm-9:00pm EDT

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♪ yvonne: 7:00 a.m. here in hong kong come alive from bloomberg's asian headquarters. i am yvonne man. welcome to "daybreak asia." asian-pacific markets seen rising as investors move out of haven isis. the yen weekends while the dollar heads back to gains. janet yellen is a catalyst, warning of inherent risk in tightening policy to slowly. globalfrom bloomberg's headquarters, i am kathleen hays in new york, where it is just past 7:00 a.m. this tuesday. republican leaders prepare to roll out a new tax framework, but the numbers are hazy. and twitter experiments with 280
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characters in a bid to have wider debate. ♪ kathleen: i don't care how many twitter characters you have come it would take a massive tweet to tweet out so much in janet yellen's speech today. when you look at the citations, the charts, 20,000 pages. i think she had one message, the fed is going to hike again, even if inflation is below target. yvonne: pretty much. i wonder what the president thinks about that twitter development. but then again, you mentioned about janet yellen. -- she is ono-part a two-part mission, normalizing the balance sheet. we saw the market move on this, futures up to 70% for december.
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kathleen: let's look at what the stock market it, rather muted, but everyone digesting what janet yellen said. you have the dow closed flat. 22,284. 0.2% of500 gained about a point. the nasdaq up nine points to 6,380. yvonne: big movers were in the bond market, yields heading higher and the dollar. let's see how things are faring in new zealand. just getting underway in the last hour -- two hours, now. for theuch flat, .7212 kiwi. a little pullback earlier. australia, the energy space is the focus. they could continue to catch up with more fox, but $50 oil will
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hold and stay in the new trading range. equity futures up 16 points. weaker aussie this morning. trading in chicago for japan, downside about 10 points. 112.29 for dollar-yen. shinzo abe the prime minister speaking to local tv stations overnight. he was talking very highly of the boj governor kuroda, after he announced the snap election. the list of candidates for the boj, still a blank slate. something to think about. kathleen: we have something else to think about, first word news. north korea has ramped up its plans, issuing a propaganda video with destruction of u.s. military assets. they show an attack on an aircraft carrier. as well as president trump and a
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burning flag. [no audio] emma: u.s. commerce secretary wilbur ross repeated his views that his visit to china went well. he met with li keqiang and other officials. he said it will be good for president trump's visit to beijing later this year. if you look at how the trade is one geographic source, that is china, one big product source. then there is automotive and automotive parts. essentially if he can resolve china and automotive, in theory,
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you could resolve the whole trade deficit. force --a's wealthiest person joining forces. they will be part of the alipay hk round launched in may. it will allow people to make payments to thousands of retail outlets. listing -- allowing female drivers, they will be entitled to a license, starting next year. the kingdom is the only country in the world to ban women from driving. they are trying to liberalize saudi society. the crown prince is behind the change as he has pushed back from powerful religious conservatives. its lowestell to since march, tracking declines in east asian currencies as tensions rise in north korea. the rupee-denominated government sold almost $100 million monday.
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the longest run of outflows since mid-august. there is concern that deficit may widen. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. ♪ to move on toant the big intraday moves on wall street, especially for bonds, the dollar and bank stocks. strong suggestion of a rate hike in november is a very likely behind these moves. su keenan, what is going on today? su: a lot of focus midday. she reinforced to the focus that there will be -- strongly suggesting by the dot plots, at least one more hike. we did have stocks that have been fluctuating threat the day, click a little higher. they have been at new records. the dow, a little weaker.
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if we go into a chart on the banking index, around 1230, where gelling -- around 12:30 where yellen made the comment. that is moving gradually. as meaning, those hikes are coming in that means profits. let's go to the bloomberg, g #btv 8290. what you're saying we are calling the yellen affect. -- effect. the probability of low as 22% on september 8. it has moved higher to 60% and rising. be at leastely to one hike before the end of the year. yvonne: 2018 a little more cloudy. let's talk about commodities, the bulls very much in control. crude, above wti
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$50. brent nearing $60. su: if we going to the bloomberg, we can see that. g #btv 504. brent crude is traded throughout the world. distancethin striking for brent -- distance of $60 for brent. it is a strongly bullish indicator. whatare talking about, does it mean we are seeing $60 crude? if we talk about the is $52.iate, it it was softened in today's trading. what that means also, if you look at how opec ended, how refineries are breaking up demand-- racking up post-hurricanes, it is stronger than expected demand.
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that is because of higher prices. could that boost a shale boom? this is giving the bulls reason to run for now. kathleen: how about specific stocks? a retailer in china, for example. su: it is a very fascinating story. they are looking to alibaba to launch a bigger expansion into shanghai,ities in beijing. lululemon is the maker of yoga pants and a leisure close -- clothes. they were known, many of their pants were a bit more sheer, i.e., see-through than many consumers originally thought. they got pass that, had a big launch into china. they believe going forward, chinese cities will make 13% of their business. focusing on china, we
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saw that in the nike earnings that came through overnight. su keenan, thank you, with wrap up on wall street. a look at what happened in d.c. after the defeat in repealing obamacare. u.s. lawmakers turn their attention to tax reform. the white house and congressional republican leaders say they will be unveiling a framework on wednesday, expected to include cuts to individual and corporate breaks. let's bring in our tax reporter joining us from washington. good to see you. after the failure of health care, what will be the primary goal for the republicans as well as trump? get a first goal is to political win. health care has not been easy for them. all the republicans are ready to put this behind them. waynd, they want to find a to grow the economy. the way this plan is expected to lay out is to cut the corporate tax rate down to 20%. it is at 35% right now. cut rates for individuals and small businesses. the question is, how are they
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going to pay for it? that is not expected to be in the plan, and that is a hard work. what sort of tax rates are we going to get rid of? that will be a heavy lift as we get to the fall. manyeen: there are so heavy lips. donald trump wants to cut the corporate tax rate to 20% from 35%. the top tax rate from 39.5% to 35%. a lot of democrats will say, this does not help the middle class. the hallmarks of the health care debate. the republicans got together, put proposals up, could not pass -- will that happen with tax reform? will tax reform have a similar fate? laura: it is hard to say. republicans are walking a tricky line. republicans and democrats agree you have to lower the rate. there might be room on the
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individual site, particularly the middle class. maybe you even cut deductions that go toward wealthy individuals and you can maybe cut that top rate. with the democrats coming out of a meeting with donald trump today, they were opposed. donald trump said we will not cut rates for the wealthy, but there is not a level of trust there between the democrats and trump that what he says the plan will do is what the plan will do. republicans are more unified than they were on the health care. we saw that fall apart, democrats did not even have to play a role. they're looking to maybe get the republicans together on tax. they are supporting people to get ready for the plan. kathleen: laura davidson, thank you for keeping track of the latest on donald trump and tax or form. still ahead, forget 140 characters. twitter wants to hear more from its users. why it thinks longer tweets are good idea. yvonne: and we will look more
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into janet yellen's manifesto. how she sees her legacy and what may be thought -- final month of her term. this is bloomberg. ♪
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yvonne: this is "daybreak asia," i am yvonne man in hong kong. kathleen: i am kathleen hays in new york. janet yellen has defended the latest rate hike. let's look behind the headlines and dive into her speech in cleveland. with a chief economist and bloomberg's new capitalist economics columnist. in on you to both weigh one key point janet yellen was discussing. chris, when i saw the headline/, janet yellen said it would be 2%rudent to wait to get to
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to hike rates, i thought, boy, she is really letting us know where she stands. what do you think? did she then go through the speech and dismiss arguments about inflation? to raise doubtng about what i thought was a strong message? messagenk the strong was intended. but at the same time, she wanted to indicate she is listening to her colleagues. there are several on the fomc who are worried that maybe low inflation is structural. she wanted to address those concerns. the way i read the speech, she ticks them off, one by one, and is dismissive of the speech. kathleen: i want to put up the dot plot. you mentioned the doves, there are four of them. probably heard from charlie evans, barely dovish.
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we will probably hear from more doves tomorrow. there are many in lockstep with janet yellen on one more rate hike read you think janet yellen raised doubts about this view that if we do not hike soon enough, it will hurt the economy? dan: it is safe to take away from this, and certainly from the fomc last week, that december is definitely on the table. there is reiteration that with a gradual hike, they will get the 2% eventually. we will stabilize around that level. airings give quite some to this idea that they could be wrong. they could be imperfectly understanding the link between the labor market and inflation. they could be imperfectly understanding of inflation itself. the reason that jumped out at me, this is the question potential bankers around the world are asking. it is not a uniquely american phenomenon. chris: i do think it is interesting the way she frames it. she is talking about inflation being low this year, which makes
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the idea of transitory factors credible. what she does not talk about is, inflation has been under 2% for 20 of the last 25 years. which makes transitory factors a little less credible. there bis has factored that. draghi has touched on that. certainly in japan they are well aware of that. i think that the fed you are starting to hear that from brainerd -- brainard. yellen is stubbornly fixed on the short run. i think that is how she manages to be what our traders call, america's greatest two-handed economist. dan: she has a bit more to do, she made that clear. but she talked about the long-running forces of globalization, the entry of china into the global labor market, and the long march of technology. if the fed is no longer
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fixated on the 2% target to move rates, it is more moving toward this classic fed, this normalization of tightening policy. if we are going to look at that datag forward, and the still is cloudy with the hurricane effect, what is the fed going to be looking at the hike rates? is a more going to be about financial conditions or data from the labor market? i think you are precisely right. it will be labor conditions, and data. but that will be clouded by hurricanes, as well. it is also going to be the passage of time, as yellen said. we do not want to wait too long. the other thing we touched on is the idea of a more traditional, normal approach. the idea of normalization being necessary, which is really saying that preemptive -- is
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still necessary. you can have a reactive said. -- fed. that is the battle yellen is fighting. she does not want to wait until we see inflation before hiking. dan: as she works toward her conclusion of the speech she gives space to the idea that we also do not want to go too fast. we do not want to be jumping at a historical shadow that may not be there anymore. i think that is huge, especially if we have a new chairman in february. yvonne: great to have you guys bouncing off each other. i have a question. market reaction, we saw that dollar move the last couple days, a little higher. yields, slightly higher. do you think markets are getting ahead of themselves? especially post 2018 when we do not know what the fed will look like, who the fed chair will be? dan: the markets have reasonably
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focused on the process of a rate increase being on the table in december. we will have another few months dated to pour through between now and then. it was certainly implicit, if not explicit from comments last week. i guess where chris -- i guess going is,s and i are what about beyond december? kathleen: i want to bring up a chart important to the markets longer-term. it is g #btv 776. -- pce core, the white line. and the other is the average hourly earnings. it looks pretty flat to me. you can see have a sort of move together. as bond market people gauge what is going to happen next, in the december hike is almost 70%, the small median is on board with
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three rate hikes next year. where they going and what will that mean for bond yields? chris: that is the question. the market does not have that priced in, at least in futures at the moment. partly that is talking to our money market guys. that is because hedging is expensive, yields are still really low. it does not make sense to hedge this early against what the fed might do next year. if you look a cash treasuries, there is also not three rate hikes priced in. at some point, there does have to be a reckoning. i suspect what is going to happen, and they have talked about this quite a bit on bloomberg view, as well, watch december. thatey are at all hawkish, is when the market will snap into thinking about 2018. hawkish, what is more hiking your key rate when
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inflation is 0.6% under 2%, and as you point out, it has been under 2% for so long, suggesting as john williams suggested, maybe central bank should realize, 2% as a target is not such a great idea? chris: it may not be obtainable. in the meantime, yellen certainly does not want to even have a discussion about that inflation target. ifause i think she is afraid the fed abandons 2%, the public and that will drive inflation expectations even lower, which could ultimately pull inflation lower. dan: the central bank, you cannot just get up and say the model does not work in 2% does not work. the first thing that will happen, people will say, what is your new model and your new number? and if they do not have that, they just get killed. kathleen: thank you so much. i recommend everybody go to the
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fed website and read the speech. it is very understandable, see what you think. coming up, lots of big names on bloomberg. we speak with a former goldman sachs associate. also, u.k. treasury. --ll be joined by and a former chair. roundup to can get a get your day going in today's edition of "daybreak asia." for bloomberg subscribers, go to dayb . it is also available on your smart phone on your anywhere at. make sure to check it out. this is bloomberg. ♪
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yvonne: a quick check of the
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latest business flash headlines. nike is increasingly reliant on overseas markets, the domestic market continues to slide. china was especially wrong -- strong last quarter. way ahead of the median forecast. u.s. sales fell 3% in the period, offset by a 5% rise in latin america. and the 9% surge in greater china. ceo richarduifax smith has stepped down, after the reach of 143 million americans private data. the company wants new leadership. in unpaid million retired -- retirement. yvonne: that was certainly a shock with that breaking news. coming up, is bigger better? we are talking about twitter. at they think it might be, when it comes to tweet.
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they want to change the number of characters in a tweet from 140 to 280. this is bloomberg. ♪
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yvonne: 7:30 a.m. wednesday here in hong kong. you're 30 minutes away from asia's first major market open. the region waking up to janet yellen's speech overnight. showing more determination when it comes to raising rates, something to ponder before the open. kathleen: a speech heard around the world. it is 7:30 p.m. tuesday here in new york. a hot, sunny day. market closed, in spite of the janet yellen, narrowly mixed. i am kathleen hays, here in new york. yvonne: i am yvonne man here in hong kong. you're watching "daybreak asia." emma: french president emmanuel
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macron has added fuel to the brexit fire by calling across the european union. he says the bloc needs to remain globally relevant. he said it would allow easier investment for european projects and help stabilize the eurozone. forwardget can only go with strong political leadership led by a common finance minister and strong parliamentary supervision at the european level. only the eurozone with a strong international currency can offer europe the framework of an economic world power. a former barclays leader said the economy is improving and the best opportunities [indiscernible] he also described to the current situation in traditional retail and commercial banking as
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raising. he said he is not felt this good on your. >> we are very bullish on europe and banking in europe. i say that, recognizing i have not been bullish on europe as an economy, as an investment opportunity, and at least 12 years. emma: the japanese government has approved a revision to its 30 to 40 year plan to decommission the nuclear plant. they delayed by two years the removal of nuclear reactive fuel. the location was unknown. robots that can withstand high radiation levels will work. not standing for the u.s. national anthem has reached the business world. --t is offering refunds president trump is magnified the issue by saying protesting
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players should be fired. at the start of his trial, a former -- has pleaded not guilty to accepting advantage. they said the 72-year-old accepted a three-story penthouse. he denies this and said he was -- he was hong kong's financial leader for five years. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. ♪ let's get more what we should be watching is trading at underway in asia. sophie kamaruddin joining us on set. i wonder what china feels about janet yellen's comments overnight. the party congresses weeks away. beijing does not want to rock the boat. this china beige book put forward.
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is it comes to 2018? sophie: we have the organization connects -- that collects anecdotal accounts from 3000 firms in china. the picture it pinks is not looking so rosy after a robust 2017 of offering evidence that above key perceptions about the economy, namely it is not rebalancing to services for manufacturing, that corporate borrowing continues to rise, that has yet to come. plus, china has said it is cutting back on capacity of commodities like steel. capacity expanded in the third quarter after spiking in the second quarter. is farhina's economy better this year than it has it been in the past two years, 2018 is shaping up to be less than positive. we are waiting on the latest economic indicators this morning of china's economic health. industrial profits for august will be out.
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kathleen: emerging markets are really paying attention to janet yellen. it is interesting, if you think the odds of the rate hike, 2.5 years ago -- now they're up to 70%. more declines across asset classes. i doubt that was really her purpose. but it seems like one of the big effects so far. sophie: yellen's remarks fueling the rate hike,. -- hike. four day drop, wiping out gains for september. volatility has returned. we have seen the resilience of em. i want to show you this chart of the terminal that shows you the negatives mounting. this chart showing you the em stock gauge could test its 50
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day moving average. comes to the relative strength index, we are seeing that gauge retreat from the 70 mark on a monthly basis, for the first time since 20 -- 2007. adjusting some investors have gone too far under not selling. kathleen: sophie kamaruddin, thank you. twitter is launching an experiment to see whether bigger is better. testing longer tweets along a small test group to see if they can turn itself into a platform for live debate. selina, who drove this and where is it going? >> this is something jack dorsey has been talking about for quite some time. blaster they were considering raising it to even 10,000 characters. twitter's corp. problem, how do we become a
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mainstream platform and increase monthly active users? the number has remained a stagnant, which is causing a lot of concern for investors. by making it longer, the amount you can tweak, they are hoping more people felt comfortable tweeting on the platform without having to spend time and frustration to condense all of their thoughts. what is this mean for user base growth? obviously it has been slowing. will this help? selina: some analysts say it cannot hurt. it is unclear if it will push that number forward. we did see around the election time, donald trump's tweets did have an impact on that. a core criticism has been this is a platform that is very niche, for certain groups of people, journalists and celebrities, and how can we make it something everyone wants to interact on? they are hoping by making it easier to converse of people and
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have longer discussion, it will drive growth. another pushes to get into the live streaming category to watch my video, but to discuss. if you have more strength -- if you have more space to write, they hope there will be more livelier discussion on the platform. yvonne: i am guessing with the president and how much he has been tweeting about the nfl, he might be liking this new change. selina wang, thank you. tech shares have had a tough week, including the likes in asia. we did see a bounce back in the fang stocks. tencent closed down more than 1% tuesday. though it is still up around 70%, your to date. is an hsbc director. he joins us here in our hong kong studio. fang stocks are back. you cannot base it on one day of moves.
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what does it mean for the asian tech rally? i keep hearing it is not about the fang's, it is about fundamentals and earning potential. a number ofesent things. fundamentals are generally sound. especially the china internet --es that we have seen generally speaking, sentiment for china is improving. you want to buy tencent, alibaba, these other chinese internet names. they generate a lot of profits. kathleen: are the gains to concentrated? i have a chart here g #btv 283. we talk about the giant of the hang seng, which is tencent. it is also the giant of msci china. behind the moves we have seen, this is the market value, a portion of the msci china. it is inching closer to 16%.
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isis not just tencent, it alibaba, baidu. 13% are about 1/2 of the surge this quarter alone. are we looking for a pullback? placehis has been a weak in the world, with about 100 investors. we made a lotwas, of money, i do not want to be the last person off the train when the music stops. we have seen that action two days ago. we had a little bit of a rebound. valuations are generally constructed. all these stocks -- yvonne: a lot happened in china when it comes to regulations. we heard from the likes of regulators, cracking down on the content of tencent. they have been fining the likes of baidu and weibo, as well. chi: all these chinese internet
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companies operate under a sphere of regulation, getting more and more important as companies become more important in the fabric of people's lives. last year we saw with baidu and others, it is a persistent construct investors need to pay attention to. i would argue that is not different from what uber faces with the e.u., or this global pressure as these companies become more and more dominant. let's turn to one of the stories bloomberg news was reporting on today. the netflix of china is getting ready. they are targeting the u.s. ipo, initial public offering, as soon as next year. they could value is more than a billion dollars. when you see has -- how netflix has performed, how big of an opportunity for investors will this be? chi: i think the story will be an exciting one. you point out, netflix, over $80
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billion. it has over 100 million subscribers. 30 million to 40 million paying subscribers. they have 500 million active monthly users. they could also have 100 million paid subscribers. and the business model is evolving to look more closely like netflix. you see it moving from an advertising model to a subscription model. i think it is a great story and baidu has created a significant amount of value. some people who have been bears on china, skeptics, have looked at transparency in management. tell us about their management, their business model, and how it would translate into the u.s.? if you think about alibaba and tencent, this is
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widely considered -- i met with the new vice chairman, cfo last thursday. i was impressed. experience,lot of but rapidly learning about china . he knows technology, he knows china, and he is putting in place the day-to-day operations. player.ok, he is an a along the lines of leadership in alibaba and tencent today. i am up -- i am optimistic. the search is probably the best business model created in the world. one of the big stories is what is going on in apple. there are concerns on demand when it comes to the iphone 8. would you be buying asian suppliers at the moment? is: my colleague
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constructive on the supply chain for apple. if they cannot make enough funds, there is a problem. yvonne: you mentioned how there could be rotation within the tech space itself. what else are you looking out? are you looking at smaller names ? chi: no, the smaller names are up more than the large chains. 50% to 70%. i actually think that if we held,alibaba is widely baidu is the least widely held. ,here are issues with growth management change. it is reversing itself and we are in a period of the accelerating growth and a new team. if you're rotating, baidu is the stock to look at. kathleen: let's follow on that
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point, the smaller ones. it is interesting and exciting to talk to people like you and your team, who are names that might not be on the radar screen yet that we should be watching? i think of the mid-cap netease is a stock that has been under-owned as they worry about the pipeline stocks at a valuation of 13 times mixed earnings, generates cash flow. it is grating a lot of value. of new gains is strong. they just launched minecraft in the last number of weeks. mobile minecraft's top five in terms of consistent daily downloads. there is a number of very strong gains in the pipeline for minecraft. it seems very attractive here.
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thank you so much. up next, is bitcoin a bubble? it has been labeled a fraud and a fake. but, they say to change the world. this is bloomberg. ♪
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>> i really feel that bitcoin is very nascent right now. you indicated we started an index that crated transparency from a pricing perspective. however, we are shifting our focus toward digitization and looking at technologies associated with it, and how it might further complement our client needs. >> we will see if bitcoin last, if it is a bubble or not. we are paying attention to it.
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i do not see it as a credible competitor to the dollar, because there is only one dollar. it is a monopoly created by the united states government with the full backing of the united states government. bitcoin cannot compete against that. kathleen: we have been hearing about bitcoin. just illustrating how deep and big this debate is. dimon labeljamie bitcoin a fraud, another called it a bubble, another said it is not real. another defends bitcoin and says the world is about to change radically. >> when i first bought it -- the whole thing was an experiment. now i'm positive it is implementation. when we were talking about the internet, we dreamed of what it could be. but it is so much more ubiquitous than what we dreamed about.
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the same with blockchain. you will see blockchain technology everywhere in 10, 15 years. it will be a different world. some of that you will not notice. it will be behind the television set, who cares where the wires go? >> there are eight naysayers out there, jamie dimon. at the same time jamie dimon is making those comments, his office is hosting a bitcoin forum. daliocalls it of fraud, called it a bubble, another said it is not real. >> it is a bubble. this will be the largest bubble of our lifetimes. remember, bubbles happen around things that fundamentally change the way we live. the railroad bubble, it change the way we live. prices will get way ahead of where they should be. you can make a whole lot of money on the way up. and we plan on it.
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at one point you will have to sell. just sittingcipate here and watching my money go up and down. we will be active and try to buy the right companies. that was a lot of ico's will go to zero. it is a dangerous space. i would not tell someone to put 100% of your net worth and it. one reason i sold it, i had so much of my net worth in it. >> but you think you should have some? >> everybody should have some. kathleen: that was mike novogratz talking to bloomberg. yvonne: we have breaking news coming from the president. his sources will unveil the individual tax rate at 35%. that is lower than what we saw from the 39.6% right now, which is what the lobbyists have been saying. an optiony there is
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to go higher, as well. which is what we have been hearing from the likes of mike kelly, the representative from pennsylvania. there is a good chance of that to stay higher. that is the individual tax rate. just a little more detail right now for tax reform. kathleen: that is expected to be dropped to 20% from 35%, the corporate tax rate. there was a possibility this could be suggested on the individual tax rate. the immediate criticism will become a why are you helping the wealthy? your plan is supposed to help the middle class. the wealthy do not need it. one of the key questions is going to be, if this lower tax rate is also a company buy fewer deductions. wealthier people tend to itemize more deductions because they have so many. it is a specific story. one thing bloomberg news was writing about today, states
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where there are high taxes, already pushing back against talk of that this tax plan could reduce the top rate, but also take state and local taxes out of the mix, as something you would be able to deduct from your taxes. who would it hurt -- california, new york, new jersey. you are going to see a lot of fights based around, who gets did options and who does not? yvonne: taking a look at market reaction, we thought in the dollar. but the yen chart back up. 112.37. we keep asking the question, how much of this tax reform prospect is baked into the market? besee inklings it may creeping back up with the so-called trump trade. the dollar being favorable after janet yellen's comments. that will weigh in on what the asian market open is going to look like.
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could be favorable for tokyo. but we can see the dollar strength. the big question, what will that be for themem -- the em rally? we see determination from janet yellen as she wants to do this t wo part mission of raising rates at least for december. those rates rising overnight to 70%. we have more ahead on "daybreak asia." the market open in seoul, tokyo in sydney. this is bloomberg. ♪
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yvonne: a quick check of the latest headlines. general election is warning that if india dumps a multibillion dollar deal, it could hurt foreign investment and efforts
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to increase jobs. india could face substantial fees. deal -- theyion prefer electric trains, which e.g. does not make. 3 anden: the new model future versions of the lineup will launch a change which highlights the increasing important -- importance of the tech market. wants to lower its dependence on personal computers. yvonne: the electric car market may have a surprising new player soon. vacuum maker dyson says it will build what it calls a radically different plug-in vehicle by 2020. investing more than $1.3 billion in r&d, with batteries. most use lithium-ion packs, but they use a different type. kathleen: i guess it can clean
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the carpet and you can drive it, too. our guest joins us to discuss the market opens. we are counting down to the starts of trade in australia, japan and korea moments from now. this is bloomberg. ♪ what did we do before phones?
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yvonne: 8:00 a.m. in hong kong, live from bloomberg's asian headquarters. i'm yvonne man. welcome to "daybreak: asia." asian markets rising as investors move out of asian assets. the yen weakens, the dollar hands back to gains. janet yellen, the fed chair, warning of inherent risk in tightening policy to slowly. kathleen: i'm kathleen hays in new york, where it is just at :00 p.m. on this tuesday. sources in washington say president trump will announce a corporate tax rate of 20%. the individual rate is also set to fall. bob diamond says he is finally bullish on europe, and it has only taken them 12 years.
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we will have an exclusive interview. yvonne: we have a focus on janet yellen, her manifesto, as you call it kathleen, really a two prong approach when it comes to normalization. they want to reduce the balance sheets and are determined to hike rates at least in december. markets more confident on that. also breaking news from the trump administration. sources telling us they are considering cutting that individual tax rate of 35%. kathleen: and dropping the corporate tax rate. this is one of those things -- remember when we had the trump trade, the global rally? a lot if it had to do with people believing that donald trump would do two things -- but through tax cuts, infrastructure spending. it will be very interesting to see. whether you think it is a good idea or not, create inequality
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between wealthier people and not so wealthy people, it will be interesting to see how the markets follow this, if it looks like somehow this time, unlike health care reform, don trump and his team are able to get republicans on board and push this thing through. we will see. yvonne: after the failure of health care, you have got to wonder if they can get this done by the end of the year as they have promised. movet reaction, a little for the dollar against the yen in particular. let's get the market open with sophie kamaruddin. sophie: another job for the dollar on the back of those trump tax reforms that have been reported. check out with the bbdxy is doing, trading at the highest level since august 22. the dollar is getting the most against the yen, the loony. the aussie dollar in the g10 space. gaining ground against the korean won as well, trading at 1139. check out what is going on. futures are pointing to a more
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positive open, but we do have a mixed bag. .4% while theing asx 200 flat at the open. marginal gains for the kospi. the yen is lighting about .2%. -- sliding about .2%. relatively in a tight trading range, but a series of higher lows. that could give some pause when it comes to dollar buying. check out the offshore yuan as well. weaker for a fourth straight day ahead of august profit due out of china at 9:30 a.m. hong kong time. this morning, the currencies trading near a one-month low above the 663 handle. some see buying opportunities. the pboc is perceived as not trying to oppose the yuan's gain, but merely to slow it down. aussie dollar trading at the lowest since august 15 as treasury yields are being pushed higher and metal prices have softened. we are seeing copper and
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aluminum slide while steel is maintaining its gain. oil is gaining ground on signs that u.s. stockpiles declined. brent back below the $59 a barrel mark. back to the aussie dollar, i want to pull up this chart, #btv 5220, showing some resistance for the aussie. could be seen at the 55 day moving average of 7939 well support lies at the august 16 low of 7870 and. given the downturn we are seeing in iron ore prices, that is likely adding to pressure from all the. -- pressure for the aussie. for now, it is what is going on with the dollar following these details of trump's tax plan. kathleen: thank you so very much. after their failure to repeal obamacare, u.s. lawmakers are turning their attention to tax reform. the white house and republican leaders expected to layout
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framework for change on wednesday, but we are getting breaking news on more of an idea about what some of these numbers are going to look like. jodi schneider is tracking this for us. details ones, some tax policy, what do you make of this so far? jodi: some people familiar with the matter have told us at bloomberg that we are looking at a corporate tax rate, the number everyone looks at, of 20%, down from 35% now, although few companies actually pay the full amount because of deductions and exemptions, that kind of thing. individualg at a 39% -- top individual tax rate. i'm sorry, 35%, down from 39%. with perhaps one high bracket for super earners. then things like a repeal of the alternative minimum tax and the estate tax, which would benefit high earners and the wealthy,
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are also something that would allow companies to have a one-time repatriation holiday on their overseas earnings, to ,ring them back and pay the tax which would make companies happy with a lot of overseas earnings. i think this would be viewed as a good package by, which would corporations, particularly high earners. yvonne: exactly. there are so many interesting things we're going to learn. you have been following this for so long. we don't yet know about deductions. corporations' deductions could jane's -- could change. they could be able to shield less. same thing with individuals, that could change. you have seen how tough it is to get these things through congress. at the same time, who does not want to give tax cuts if they can? as you are pointing out, from some corners that is a big vote-getter in a couple of years when congress has to run for office again. jodi: that's right.
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obvious in the administration is putting a lot of muscle behind this, and congress must does, too. this is something paul ryan, the house speaker who used to be the chair of the ways and means committee, the tax-writing committee in the house, really wants to see. however, tax reform is extraordinarily hard to do. the last full rewrite of the u.s. tax code was in 1986. we just saw the difficulty congress had repealing obamacare, which they had vowed to do, had been trying to do from a seven years now. it is going to be a very, very heavy lift. yes, this is something that will be priority one on the republicans agenda. yvonne: it seems to be that is where the focus is from the president as well as he does head to indiana on wednesday. what is the focus of the speech in particular? a lot has to do with the senator in indiana and convincing him to go through or support the gop tax overhaul. jodi: yeah, it is going to be
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about taxes. the president is going to be stumping for taxes now. he wants to change the conversation. he wants a big win in congress. he feels if he can get a big win, especially on something like tax reform that will help him with businesses, with the banks, that will be a big win, that this could change some of the recent negative news, and also give him a win in congress, where they have not had a win with his administration yet. yvonne: health care reform, is that really dead now? jodi: you never say never in the u.s. congress. there are some people saying, we're going to bring this back. however, they are talking about bringing it back a year from now. there is budget procedures that allow you to fast-track an end -- use 50 votes rather than 60 votes in the senate. they are going to use that up, that procedure for this years budget. they want to use it on tax reform.
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there talking about next year for that, which seems a long time away. kathleen: i would like to ask you about how the democrats are going to respond to this. i would have guessed there is going to be a hue and cry about donald trump giving tax cuts to the wealthy. be something to that is going to require some compromise to push this through? do you think they will be able to line up boats -- votes even if democrats say no way? jodi: that is the real question and will be the real trick in congress. because there is a lot in the plan we are seeing -- people familiar are telling us -- that it is for the wealthy, for high earners, for corporations, therefore corporate people who pay taxes on their individual rates. it is really going to -- we are going to see, i presume, from the democrats a lot of hue and
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cry about this being a tax bill for the wealthy. we will see what else they put in there. there may be things that would help middle income earners, but it is going to be a fight. tax reform is really, located in hard to get through congress. yvonne: that kathleen: the more things you give away, the tougher it gets to pay for it. jodi schneider, thank you. let's get to first word news with paul allen in sydney. paul: banks, kathleen. north korea has ramped up its war of words with america, issuing a propaganda video showing the destruction of u.s. military assets. it shows the shooting down of a b-1 bomber and an attack on an aircraft carrier, is listed of president trump and a burning flag. as theeo was released foreign ministers said trump had declared war on north korea, something the white house said was absurd. pres. trump: we are totally prepared for the second option, not a preferred option, but if we take that option, it will be
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devastating, i can tell you that, devastating for north korea. that is called the military option. if we have to take it, we will. paul: u.s. commerce secretary wilbur ross has repeated his view that his trip to china this week went well. speaking in hong kong after talks with the premier and other senior officials, he said things are looking good for president trump's visit to beijing later this year. he also said there is much to be done to improve trade relations between the two leading economies. >> if you look at our trade deficit, there is one big geographic source, and that is china. and there is one big product source, and that is automotive and automotive parts. , if you canly resolve china and resolve automotive, you in theory could resolve the whole trade deficit. paul: hong kong's richest man and asia's wealthiest business
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are joining forces to launch a digital wallet service. the project between the two will come under the name alipay hk, officially launched in may. the app will allow users to make in-store payments at 4000 retail outlets and will also offer insurance products and food and drinks vouchers. the commerce department says canada is unfairly subsidizing slappedants a 220% duty on every plane imported into the united states. the decision is a victory for boeing, which says the subsidies were used to sell jets at artificially low prices. canada rejected the levee, saying it is aimed at eliminating the c-series range from the u.s. market. saudi arabia is lifting its ban on female drivers. the degree means women will be entitled to a license from june of next year. the kingdom was the only country of the year to ban women behind the wheel.
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the change will be the most visible in its efforts to liberalize. the crown prince mohammed bin salman is seen as driving the change, which good faith pushback from religious conservatives. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. yvonne: still ahead, just not doing it. we look at nikes pivot to asia as its domestic sales slide. kathleen: plus here why our next guest says china's glass is half-full. helmet issel joins us next. this is bloomberg.
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yvonne: this is "daybreak: asia ." i'm yvonne man in hong kong. kathleen: and i'm kathleen hays in new york. stocks in asia looks like they might start the session hard, but they are starting to weaken. the yen moves out of haven assets after janet yellen boosted expectations for
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interest rate rise in december. we are getting some news on what the tax reform plan might look like, and more. joining us from singapore's hartmut issel, head of equity and credit at ubs wealth management. wants to talk about, but i would like -- lots to talk about, but i would like to start with breaking news on tax reform. is talk aboutre reducing the top rate on the wealthiest to 35% and cutting the corporate tax rate to 20% from 35%. is this potentially a market mover for global markets, including asia, if donald trump, unlike health care reform, if he and his team can be the impetus to push tax reform, tax cuts, which some see as stimulative, through congress? >> i think to some extent it will be. tax reform, especially corporate tax or lowering corporate tax rates, markets to some extent expecting that.
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i don't think they have priced it out. anytime there is progress on that it will be welcome. just to give a sense of proportion on the intake for the government, the intake on the corporate side is lower, but if -- about a fifth of the personal side. we think that will be easier to negotiate before the personal tax rate. scenarios it may, our is we never believe the 15% corporate tax rate, it seems too low in the first place. , but even ifis 25% we cut the rates 25%, this is worth some percent of s&p earnings. even on a higher rate. it would be positive for the u.s. market, i think. kathleen: we know that north korea and the war of words between donald trump and kim jong-un has been weighing on markets more or less, depending
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on what the latest tweets are, perhaps. janet yellen spoke today and seems clearly telling us that she is looking to hike rates again in december. let's look at yellen. how important is that for asia? are ready priced in, because we have seen emerging-market moves it seems after the speech today in cleveland. >> if we look at the fed funds futures, probably not fully priced in, but i'm not surprised to see her attempt to telegraph what is shaping up to be a december hike, in our view. also maybe not quite as hawkish for next year, but also our scenario is for two hikes next year. if she wants markets to be prepared for the december hike, i think she needs to come up the probability a little higher yet. i think on the margins, she was trying it or is trying it. with the fed, we can see the
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prices have moved, the probabilities have moved, but probably not quite where they should be. therefore, there is a bit of an impact yet, especially on the dollar in the short-term. kathleen: as you look around asia, where do you see the most potential to make money? i know it is a broad question, but what is at the top of your list? >> i think it is exactly the question. as we come towards the end of the year that investors should ask themselves. we do think market leadership could shape. , 2017, we a step back have very strong earnings scores in asia, but also very lopsided. in terms of countries, it was very much concentrated in the north, especially korea, to an extent also china. there is really where we saw the surprises. as far as korea, it is very cyclical, so we can safely assume that next year cannot be nearly as strong. it is very cyclical.
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on the other hand, we have the south-southeast lagging. we believe in terms of earnings growth, it is going to broaden. probably north asia coming back a bit, maybe this out catching up. on the country or regional side, there is a potential to rotate into this out a bit more. yvonne: you mentioned a little bit about the dollar, now that we have seen i guess you could say substantial moves in the last couple of days, higher for dollar. i was speaking to a record that the different goldman, saying -- i was speaking to a representative from goldman, saying that now we have had the german election and the dollar is pete, we are losing the transition into asia that has led markets higher. do you think this will be a headwind for asian particular, the stronger dollar story as well as north korea concerns, rising oil prices?
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for em rally could be a bit choppy. >> i would not think necessarily significantly stronger dollar. we have most of the asian currency for the next 12 months with what we are forecasting, either relatively flat or maybe slightly up. one exception is the chinese regionsr four different -- regions -- reasons. we will say that the euro strength we anticipated since the end of last year is coming to a halt. where does that leave us in terms of currency? probably relatively neutral. i don't think dollar will be very supportive from here, nor do i think it will be a major headwind. it is probably going to be a relatively flat story. we can really look at the earnings. that is also for next year, slightly lower than this year, but 11% earnings. -- asiapull a bit more can pull a bit more.
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yvonne: you mentioned asia banks. where are you in the debate on value outperforming growth? that was a discussion on tuesday when we saw this rotation out of it, but now it seems like we have to reverse back up there once again. are we really seeing some type of manageable and material, sustainable rotation out of value into growth? kathleen: that should be the other way around. >> i would look at it more in terms of secular movement. you can call it growth, maybe materials. very idiosyncratic. however, what we have seen is certainly in terms of earnings revisions, earnings scores in general. arerials in particular justifiable a very strong, but i would argue especially in the case of materials, we had probably only seen the peak. if we look at the second-quarter earnings, a bit more under the microscope.
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that also is very consistent with the cyclical framework, moving from early cyclical more into the middle. we have seen banks and financials in general, banks starting to outperform the expectation. this is probably the next part of rotation, so when we look at the sector level, you are ready starting to see not that much loan growth, not even marginal expansion, but what you are seeing is the bad assets peeking out. this is usually the most prominent driver for bank stocks. they have not yet outperformed. yes, i think that is the rotation, a big rotation topic for asia. the next one in line should be banks. yvonne: always good to have you, hartmut issel, head of equity and credit for the asia-pacific and ubs wealth management. you can get a roundup of the stories you need on today's edition of "daybreak." bloomberg subscribers, go to dayb on your terminal or
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smartphone. you can read all the stories you want, customers your settings so you only get the news you care about. check it out at dayb . this is bloomberg. ♪
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kathleen: turn to virtual currencies now. that quite has plunged this month after china said it would ban exchange trading. ramy inocencio has what you need to know. todaywith mike novogratz talking about how he wants to get in to bitcoin, it is an interesting time. this is bitcoin over the past four years. --has come off as 20% or so it has come off the time by about 20% or so. this blue line is the nasdaq, back in 1996 to 2000.
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that was the boom and bust of the is not crisis. you can see -- of the internet crisis. you can see how the growth is correlated similarly, as was the falling off. bloomberg intelligence is saying we might have seen the peak of bitcoin. 8843.ond chart is btv this is a golden opportunity for gold. we can see gold in the blue line. what we are waiting for is the white line, the vix. if it turns up from his 1991 low, we could see some sustain of support for what is happening with gold. finally for my third chart, it could be similar for the yuan. btv 4202. but could be happening is an inverse correlation as bitcoin is holding, possibly we are seeing the chinese yuan rise in tandem. that is what we are seeing in terms of the red line. three charts you need to know as we continue our conversation on bitcoin. kathleen: thank you so much.
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we have got to understand it better, people are using it more all the time. plenty more to calm on "daybreak: asia." this is bloomberg. ♪
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yvonne: eight: 30 in singapore, half an hour away from the open of trading. markets lower today after comments from janet yellen, determined to normalize the balance sheet and reduced the $4.5 trillion balance sheet, also hiking rates possibly by december. 70% dip on futures this morning. i'm yvonne man in hong kong. kathleen: and i'm kathleen hays in new york. yellen a very big focus. you are watching "daybreak: asia ." i want to get right to the first word news with paul allen in sydney. paul: china's earliest economic indicators signal that growth continues to moderate in september as an official drive to curb debt risk weight on activity.
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the gauge of small companies edged down and the index of sales manager sentiment weakened. the outlook was brighter elsewhere as satellite images should manufacturing activity at its strongest in six months. french president emmanuel macron has added fuel to the brexit fire by calling for comment financial and defense systems across the european union. he said the block needs a joint budget and harmonized taxes to remain globally relevant. speaking and parents, macron said that would allow easier investment in european projects and help stabilize the eurozone in times of crisis. >> [translated] a budget can only go forward with strong political leadership led by a common finance minister and strong parliamentary supervision at the european level. only the eurozone with a strong international currency can offer europe the framework of an economic world power. governmentapanese
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has approved a revision to its 30 to 40 year plan to decommission the fukushima nuclear plant, delaying by two years the removal of radioactive fuel in two reactors. six and a half years after the disaster, the exact location of the melted rods is largely unknown. robots that can withstand the high radiation levels are still being developed. sportswing dispute over stars not standing for the u.s. national anthem has reached the business world. at&t is offering refunds to directv subscribers who want to cancel their contracts over the issue. the issue has been magnified by tweets from president trump, who says the protesters are disgraceful and should be fired. he also encouraged football fans to boycott the nfl. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. on paul allen. this is bloomberg. yvonne: thank you. time to see how the asian markets are shaping up.
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a little bit to trade on this morning. more detail on this tax overhaul plan, sophie. sophie: let's see what is going on with the sentiment. we had a cautious move prevailing for asian markets. the nikkei 225 sliding .4%. despite the weakness we are seeing it again coming off the back of the strength we are seeing in the dollar, which is climbing on trumps tax reforms, resuming gains triggered by yellen's remarks overnight. the dollar is headed for a third day of gains, dragging on other currencies. you have the kiwi dollar down .2%, as is the aussie dollar. take a closer look at what is moving to dial in tokyo, the nikkei 225 being dragged lower by auto stocks as well as nissan. investors are buying into japanese steel companies, pacific metals, ostensibly tracking steel prices higher. we also have chemical players, petrochemical stocks on the rise
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. i want to highlight as well and dentist, on the -- highlight adventist, after its u.s.. posted an earning beat and predicted earnings ahead. ahead of this thursday central-bank meeting in new zealand, we do have kiwi bears eyeing the rbnz potential removal of a tightening bias. if the acting governor does sound dovish, that could put pressure on the kiwi that has remained stubbornly high in relation to the benchmark rate, despite falling since august 10. but we are seeing pressure for the kiwi dollar today. kathleen: sophie kamaruddin, with a big central-bank meeting ahead for new zealand, not surprising to see the kiwi taking notice. leading republicans are announcing their long-awaited tax reform plan later on wednesday. theces telling bloomberg
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corporate rate will be cut to 20% from the current 35%, with businesses allowed to immediate we write off capital expenditures for at least five years. been brodie is tracking this and joins us on the line from washington. thank you. a lot to digest year. -- digest here. tell us more about what we should be watching in the hours ahead, the flexibility on the top rate. there is political and budgetary realities. what should we be most waiting to hear as we get more official details? >> thanks for having me on. that flexibility on the top rate, we don't know exactly what it means. there has been some talk that the white house is going to leave it to congress to create a fourth bracket above the 35%. 39.6%it will come back to , maybe it comes back to something else. it gets to those clinical realities you are talking about. the president has made clear he
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wants this to be a middle-class tax-cut. a lot of tax cuts are sold as middle-class but benefit the wealthy. he at least is seemingly trying to take steps to make sure that doesn't happen. he is lobbing it over to the other side of the district. what happens when he does that is unclear, but he is giving them the flexibility as far as we understand it. yvonne: what is the feeling like in congress now? we have seen scant details of this tax reform plan, quite secretive. we are seeing more detail now. they wants to own it after the failure of health care. how likely are they to be able to cut those taxes as steeply as they hope? that is the question i think a lot of people in washington are constantly asking. republicans are going to be pulling all in the same direction in a way they may not have been on health care. maybe that signals things are going to be a little stronger. i think you are right, they do want to dig in. a lot of members of congress
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have been waiting as long as we have for these details, the rank-and-file members. they are ready to own this process. they are ready to go back to their constituents and say, we built this, we put this into the , and we wantd this to make sure we are bringing it home to you in our districts. i think they are very eager to get to work and very eager to put their stamp on it. , ashe same time, the risks the senate and house are increasingly moving apart on some key issues. kathleen: just like on health care reform. how about the repatriation plan for corporations? a lot of talk was about a one-time bring home all that money sitting overseas, a very low tax rate. of course, proponents of this say it would stimulate investment, etc. others say it did not work that way before. what do we know there? ben: exactly. we don't know exactly what that one-time rate is.
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we think it will be a little different for cash and some liquid assets. but we do believe theoretically it is going to be a one-time charge, something very low that makes it worth it to bring it home here to the u.s., to use it , either to go back to shareholders or use it for investment. we do think that is going to be part of it, but again, this is one of those things that may be punted to congress. this is one of those things that congress is going to have to put its stamp on, and the devil is in the details. we don't know what the rate is, and it could affect the behavior on the other end. yvonne: how will this all be paid for, when it comes to deductions? what needs to be on the chopping block? ben: absolutely. we do believe -- we are still making sure of this -- but we do believe state and local tax deduction is something they're going to propose to end. that is several trillion dollars over a decade. they are going to get pushback
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from both democrats and republicans, as it is sort of a sensitive issue. as for a lot of the other pay for his, we don't know. some loopholes maybe ended in congress. again, they're going to punt, face this political reality. we do think this will end up increasing the deficit. there has been -- what senate republicans have called headroom for this. we don't know exactly what it is, but they have theoretically agreed. so maybe something a lot more like tax cuts and tax reform. if you listen to the president and speaker ryan, they have increasingly started to describe it that way. had to pay for it is a question, but we will see. you, thereat to have lobbying and ethics reporter on the phone from washington. from d.c. to another topic, janet yellen, our big story this morning. it was very interesting, right? argued shee market
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was slightly towards the hawkish side, but she gave something for everyone. admittedly, she said inflation -- they got it wrong, to an extent, when it comes to the structural issues of inflation. but then again, she said it is prudent to continue gradually raising rates as well. she kind of gave the go-ahead when it comes to december. futures did hike up a bit. kathleen: more than 20 pages in the pdf file, nine charts, citations -- a lot of work went into this speech. when i read it, what i heard was a fed chair who acknowledged all these caveats. maybe if this, globalization, online shopping causes week inflation, but in the end, she seemed pretty definite about what she thinks the fed should do next. let's listen to janet yellen speaking in cleveland. >> persistently easy monetary policy might also eventually lead to increased leverage or other developments with adverse
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implications for financial stability. and givenreasons, that monetary policy affects economic activity and inflation with a substantial lag, it would be imprudent to keep monetary policy on hold until inflation is back to 2%. imprudent to keep monetary policy on hold until inflation reaches 2%. we know the key rates. we know the target is 2%. there is a big distance between those two points, but janet yellen seems to be saying, well, we can't wait. she even talked about the risk of overheating if the fed goes to gradually -- goes too gradually. it seems her manifesto is there is a lot of uncertainty around inflation, but stressing the labor market. the labor market is strong. history shows that when it is
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strong, inflation eventually rises. that seems to be the message to me. yvonne: manifesto perhaps, maybe a swansong. some say this could be her last speech before her term ends. we heard from the likes of alabama senator richard shelby telling us that he spoke to the president and he is not too confident that janet yellen might be nominated once again. there are some analysts that say kevin wars seems to be the rising star, second most likely candidate after the fed chair. it is interesting where gary how thes as well and other might govern policy moving forward. kathleen: he was at the board of governors at one time, has worked at the fed before, so he is an experienced candidate. yvonne: private sector and fed experience, so could be likely. more coming up, asian billionaires breaking billionaires -- breaking barriers and disrupting markets across the globe. there is one area where they are lagging behind.
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we will look at why there are few if any women on their boards. this is bloomberg. ♪
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kathleen: this is "daybreak: asia." i'm kathleen hays in new york. yvonne: i'm yvonne man in hong kong. even by asia's low standards when it comes to women on corporate boards, progress is lagging. most of the richest men in china, japan, south korea run companies with few or even no female board members, especially in the tech industry. now is susan, ceo of women corporate directors foundation, a florida-based group with members who said on more than 8000 boards worldwide. thank you so much for joining us and welcomed the hong kong. what is going on in asia? why are we so behind? look at all the corporations in asia. most big names like alibaba, i
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think that is the only company that has a woman on the board. we are seeing solid growth in the region, financial markets maturing, why are we still so behind on this? susan: we have to compete with everyone everywhere for anything. what directors have to do is to reach out and try to find talent in areas they want to expand into, not just go back to people they like to play cards with. yvonne: how much of it comes down to the asian culture of the family where women have the burden of taking care of the children? how much of it has to do with the corporate culture, long working hours, not a lot of childcare, when it comes to maternity leave as well? do we have this corporate structures in place, do you think? susan: obviously it is tough without the full support systems. also if you look at companies in the united states, they let women work with the families and
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get online later and work. there are ways to continue to be involved, does not have to be 9:00 to 5:00 anymore. yvonne: the issue of legal mandates, how many women should be on a board. it is a very controversial debate for many countries. india and malaysia have imposed some gender quotas. shinzo abe in japan trying to push for one for 2020. do you think this is a good idea, or could it do more bad than good? susan: targets always held. -- always help. mandates work very well. in france, when the lower house of the senate passed the mandates, the number of women doubled in one year, from 6% to 12%. companies and sought coming, so they might as well pick the best people. whether it is a quota or a target like malaysia has, or a mandate as india has of women on the board, you need to encourage
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people to look beyond their best friends to look for the best talent. where does a company need to grow? does it need expertise in different areas? then you make half of your selection list of candidates women, so you have a chance to look at these women. kathleen: it is kathleen hays in new york. i were bloomberg story points out -- our bloomberg story points out that a lot of asia's billionaires who started successful companies are less likely to have women on their boards because they control their companies through their own shareholdings or those of family members, and family controlled entities. certainty interlocking sorts of corporate arrangements in many different asian countries have been part of the way corporations work, at least to date. is that another thing that is maybe difficult to change, if there is not more of a social, legal, cultural push to move in that direction? susan: it is.
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but then you look at countries like miramar, where the generals control a lot of the country, so women have decided, we want to bring more investment, make our companies better. so women are taking over the companies and pushing them and doing a great job. we are thrilled to be launching a chapter in miramar next week, because it is the women who want to be able to compete with other countries and show they can do a great job. kathleen: how much of this is generational? we can look in the united states and look back at grandmas and mothers, they were the secretaries, now executive assistant. nowadays, we have a generation of women, more young women going to college than young men. how much of this is just part of that passage of history and time that really seems to be spreading around the world? susan: i think it depends on the industry. if you look at technology companies in silicon valley, it
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is mostly guys coming from various other parts of the world. when you look at consumer products and other companies, they realize that it is women who are buying cars, shopping for the families, women who are making so many of the decisions. so it depends really on the kind of company it is, not necessarily the country that it is in. yvonne: we have a chart that shows where everything ranks across the globe when it comes to female directors, the percentage of corporate board membership. you are seeing asia is pretty much on the right side of that chart. thailand, india are leading the charge so far. is there one country or one company in particular that comes to mind in this region that is getting it right right now? it seems like the smaller countries are pushing more in that direction when it comes to good governance. susan: australia and new zealand are doing a great job. i think they realized that women can bring a lot to the table, that women -- think of retail
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companies. retail companies in the united states, every board member is supposed to spend two days a month going to various stores, seeing what works, meeting with women employees, making a difference. kathleen: what does it say that you can't link gender to company performance? , youposing gender quotas are undermining or jeopardizing the quality of a board? susan: studies by credit suisse, catalyst, studies around the world show that when you bring more women on the board, the company does better not only financially, but does better taking care of its employees, employees stay longer, there is more involvement in the community, less mergers and acquisitions. i don't think women push as much for mergers and acquisitions, they push to make the company successful. yvonne: susan stautberg, joining us here in hong kong. still more ahead on "daybreak: asia." this is bloomberg. ♪
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kathleen: this is "daybreak: asia." i'm kathleen hays in new york. yvonne: i'm yvonne man in hong kong. hong kong's richest man and asia's wealthiest person are joining forces to launch a digital wallet service in the city. the partnership will come under the name alipay hong kong, which
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officially launched in may. the mobile app will allow you to make in-store payments at 4000 retail outlets, also offer insurance products and food and drink vouchers. let's bring in bloomberg stephen engle with more. all i have got to say is, finally. stephen: it was launched in may, and also last year, the de facto monetary authority, the central bank in hong kong, approved operators to issue licenses for these digital wallets. , but nowot one as well alibaba and alipay is in here, teaming up with one of the biggest retail operators, li ka-shing. and of course ck hutchinson. big retailas presence, whether it is beauty stores, supermarkets, but also the mobile telecom operator, also hong kong electric. a number of different ways you can use your mobile wallet at 4000 retail outlets throughout
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hong kong. you can even buy insurance products. yvonne: what about taxes? -- taxis? stephen: can't even use credit cards and the taxis here. i know in thailand, they have this agreement with cp group where in 7-eleven's, you can use alipay and buy a wealth management product at a 7-eleven convenience store. that is a tie up with a wealth management product. that is what we are going to start seeing more of. kathleen: let's stick with alibaba. jack ma, there is talk he is taking controlling stake in one of its logistics partners. what have you learned? stephen: they have more than a dozen partnerships with logistics and delivery companies for procurement and fulfillment, but they don't necessarily own them out right. now they are going to be spending about $800 million u.s. to take a controlling stake,
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upping the stake in a delivery company from 47% to 51%. they're going to add a seat on the board and fold the financials and the alibaba group , because that was the focus of an s.e.c. pro in the united states, where they did not quite understand the equity method of accounting that alibaba had done, so now the losses and everything, 100%, will be wrapped into the alibaba group. yvonne: thank you with the news on the new digital wallet, also the update on alibaba. we have got plenty more to come on "markets: asia." almost it for us on "daybreak: asia." rishaad is here with a bit of a teaser. janet yellen comments overnight, also details with sources saying the white house is looking to cut the individual tax rate. rishaad: japanese an economic win at the moment. he has not really had one. ,oing to be joined by haidi
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talking to mark earns as well about janet yellen's subtext, what about tax reform? also looking at japan, what is next for economics after the snap election? and perhaps an hour and 10 minutes, we have got asia-pacific m.d. of global markets for eurasia group, cal henderson, joining us. looking at the currencies as well. he is suggesting the pound has really gone a bit too far too fast in such a short time. also defense deals with the u.s. and focus. kathleen: that is it from "daybreak: asia." rishaad salamat coming up. "markets: asia standby for"markets: asia." this is bloomberg. ♪ is this a phone?
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rishaad: it is not in hong kong. 9:00 on a tuesday evening. i am a shot. -- i am rishaad. lun, this is bloomberg markets: asia. ♪ rishaad: a start for the asian pacific. this is against a slow pace. the regional benchmark is down for a fifth day. >> the yen is falling. ov


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