tv Bloomberg Daybreak Asia Bloomberg November 11, 2018 7:00pm-9:00pm EST
haidi: asia's major markets have just opened for trade. shery: welcome to "daybreak: asia." haidi: top stories, asia-pacific markets facing declines after a friday session. opec and its friends signaled renewed output area saudi arabia will -- output. shery: alibaba delivers a shopping sensation. 24 billion of sales in just
hours. let's get started with how the monday session is looking. a stronger dollar, not to mention that wall street closed lower. what are you watching today? >> it is like haidi said. as the day progresses, it is worth watching. just to talk a little bit about friday, about 1% lower. there is a little bit of concern about china's growth with car sales dropping. people are concerned with growth in china.
single day sales were coming in at $30 billion. if you want to jump on the bandwagon, there is a chance that we might see a little bounce in hong kong and china. haidi: there is a lot of event risk. >> absolutely. there is so much going on this week. i would be watching brexit headlines. earnings, andh also the fact that it is a tech stocks. on.e is a something going there will be people watching to see if there will be information on the trade war.
a lot going on this week. a lot that could turn markets around if there is something good there. haidi: thank you. let's talk more markets. joining us now in sydney. this oil story, it will be particularly difficult for markets. opec neither put up or shut up. russians are sitting on the fence. maybe they want more attention. it is very much about what he wants. it makes it difficult. we got a bounce today that will like the mexican
peso other currencies are not going to like it. the rupee has been under some much pressure because of the r.b.i.. it is something that should get a lot more attention. just an indian problem. you are looking at a potential global slowdown and china having moderation because of deleveraging in trade. it has been coming from india. when you have a spat between the government and the reserve bank, you have oil prices putting all of that under pressure. that is a major area of concern. we will talk about that more with kathleen hays. the yuan is going to go weaker. everything is pushing their.
can they keep it together in general? there are signs of concern that the authorities are losing it a little bit with regulating and pushing companies. i think they do need the yuan to go down. both because of the optics with the meetings still in the wings and also because they do not want to appear to be losing control. kiwi: the aussie dollar or dollar -- now that you have some u.s. dollar strength, what is the expectation for the rest of the currency market in asia? today is going to be a difficult day for asian currencies because the u.s. is out. they are kind of on their own, jumping at shadows a bit. we have strong ppi numbers and we have been pointing out the
china yuan proxy situation in the mix. the aussie dollar carries a lot of weight across asia because it is touch a strong risk proxy. the rba last week quietly admitted in its forecast that it has no idea when it will get decent inflation. another removed support from the aussie. it has been a little bit of a surprise. it could make another run towards 70. that will be pressure on currencies across asia. shery: you can follow more on this story on bloomberg. you can get a market run down in one click with commentary and analysis from expert editors.
you can find out what is affecting your investments area ramy: -- investments. ramy: france called for greater international cooperation as they mark 100 years since the end of world war i. criticizing the protectionist policies and break -- embraced by america saying it is the andsite of nationalism nationalism is a betrayal of patriotism. the world is progressing on human rights. opec and its allies have begun laying the groundwork with saudi arabia announcing reduced shipments next month. said the group was responsible and would work hard to balance the market. the kingdome will export half a million fewer barrels in december with wider cut in the
following months. a we would only cut if we see persistent glut emerging. we are seeing some signs coming out of the u.s.. we have not seen the signs globally, nor can we predict 2019. ramy: the sterling opened weaker. the prime minister fights to keep her brexit plan alive. -- euro arees demanding a clean break. a deal could be struck soon because of this organization. to online shopping. alibaba set a brand-new record in 2431 billion of sales hours. the online extravaganza featured among the most
popular brands attracting customers. offering a gauge of consumer sentiment, especially during the escalating trade war between the u.s. and china. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. the trade advisor is warning about striking a trade deal with china. they should be focused on investing in america. correspondent is joining us now. can we assume that he is speaking for president trump? -- we haveave not not seen or had a clear idea of where they stand on china at the moment.
>> at the very least we can bring -- read it as a signal from the white house and trump administration. hegoes to show you that advocates taking a tough stance on china and does not seem to be ready to roll over any times you . it has been remarks from president trump himself, given that there is a behind expectation that they could cut some kind of deal in the near term. these comments are something of a reality check. in terms ofealing the internal debate at the white house. there is a bit of work to be done yet before they sign off on a trade deal. the dialogue that we have seen continuing and high-ranking officials, it is pretty interesting given the history in china during the nixon era.
could there be dialogue coming up at g20? >> to has been a flurry of commentary. right over to last week. continues, willing to talk and come to the table, but they will not be able over and they will not be bullied. that whateverview kind of resolution that might be reached, the broader concerns that the u.s. has about china's grand economic ambitions in certain areas of technology, that will be much harder to crack. unlikelyng that it is that that bridge will be crossed. nonetheless, both sides are talking to each other. it is something that was not
happening over the summer. there seems to be a push for framework to go forward. a lot will depend on what is agreed. haidi: talks before talks. still ahead, another record-breaking with big numbers from alibaba's big online extravaganza. in with the manager at investment partners. this is bloomberg. ♪
a stronger bear market do you? >> no. you look at the fundamental economics. despite recent slowdown, things are going quite well. wage growth is coming through. the talk of high rates is on the back of strong economic outlook. isna is slowing down but growing. australia is somewhat slowing. haidi: you look at these numbers for 10 years running. it is very interesting because a lot has been sold out eating up to this event. as we have seen, it is incredible. billion.9
incredible amount of numbers. we have seen recent consumer data. what is the reporting season telling you about the strength of these companies? the outlook is somewhat disappointing, but that is mainly reflective of the expectations. the market has become very bullish. bullishet has gone so to support the stretch valuation. this is really a good opportunity. some of the really quality -- anies to have a shery: it did come down a little bit more resolve the selloff last month. the tightening financial conditions. showing how rates have been
rising and at the same time, we are seeing financial conditions coming down. being a little bit complacent when it comes to understanding the global liquidity will keep tightening? i think the liquidity situation is interesting. the market has been reasonably guided. they gave very good guidance and try not to surprise the market. there is this point heading into next year when the three major central banks will start to tighten. ecb pulling back the bond purchasing program and increasing rate. japan withe bank of the equity purchasing program late next year. when they start synchronizing that tightening activity, it could be putting pressure on the
equity market. >> what is -- haidi: what about the strong dollar? a stronger dollar will have an impact on emerging markets come increasingly so compared to the other markets. we see the u.s. dollar continue to be weekly valued at this point. does pose a little bit of uncertainty as to whether that growth is going to escalate or if it is out a sustainable level at this point. we think that the dollar is pretty well valued. to geopolitics and aftermath of the midterms have any waiting? does it change the way you see the market? ofthere was a little bit discussion on what that means. i think it does not change that much in terms of how everything
will be run. dealpect some sort of coming out of of the negotiation of the next month or so on trade. we heard a little more reconciliation type of tone in the next few days. we expect the stimulus in the u.s. to continue to be reasonably strong. you will not get another round of tax cuts, but things are still going well. what happens when we see global tightening? are there sectors that you should be watching and investing you are in this environment? >> we have been in the tightening environment in the last 12 to 18 months, really driven by the u.s. and other markets started to talk about it. it is taking place now. environment, you
would expect the volume to start moving higher. what you want to invest in our the companies with earnings exposure with a cyclical recovery. the company will do better when the economy does better. thosent to stay away from . the tech sector, we have seen a correction. thank you so much for your input today. your input today. do not forget our interactive function, tv go. you can catch up on past interviews and dive into any of the functions that we talk about. become part of the conversation. the lower left right there, ask the guests a question and we will try to get it through. check it out at tv euro.
shery: this is "daybreak: asia." a quicket's get you check of the business flash headlines. risk for central bank intervention looms large. edging towards a decade low. the pbocctive if intervenes. the most liquid proxy to expose risk. shery: nearing a framework to join forces on vehicles. investing.see vw it is poised to share in technology.
haidi: the group is teaming up with companies from asia and europe to bid for a high-speed real project. it is one of the largest transport projects in history. and china'shyundai civic groups. malaysia's saga remains in the news. secrecy at the bank leading to wrongdoing among his staff. it is part of the guilty plea that was unsealed on friday. remy has the details. it is a guilty plea. anddmitted to conspiracy
another to lying to officials. ofically, over the course 2009 to 2014, eisner said he took part in many things. including bribery and kickbacks. this is pretty bombshell stuff here. let's bring up one of the quotes from this guilty plea that he put out. says i conspired with other employees. as well as agents of goldman from to conceal sacks certain legal employees of the company. that is one aspect. the other aspect is admitting to lying about the role of 110 we have been talking about for a long time ever since we heard about the scandal. this is joe low.
the prime minister this past week has said that we are going to get him, we are looking for him, but we do not know where he is. the prime minister of malaysia says he is hiding like a mouse right now. you can bet that people are trying to find him. that he was concealing his involvement as a meeting year a. about theat he knew paying out of bribes and kickbacks to foreign officials. a goldman sachs spokesman, they said that they believe the proceeds of what they were
trying to do was above board from their point of view and that they actually were not told. with the guilty plea, it looks like it is setting the stage for more employees to be revealed. telling inwas really what i showed you just now. have any names right now, but you can be sure that authorities are trying to get to the bottom of who he was talking to and working with. said, there is no agreement in this guilty plea on whether he is actually working with officials or not for the authorities. it was a heavily redacted transcript. he has only agreed to a couple things. one, that he has agreed not to appeal his sentence of less than 25 years.
haidi: it is 8:30 a.m. in hong kong, and our from the open of trading there. ready for start but asian -- pretty poor start, but tech driving a selloff in friday. lots for investors to focus on, fretting about japan's third-quarter gdp, china's domestic liquidity numbers and a slew of central bank decisions and more in focus with the asean and aipac meetings. shery: i am shery ahn. that is a lot on the agenda for investors to digest. a lot happening this week.
we will keep you updated. let's get to first word news. ramy: acting attorney general matt whitaker is said to have indicated he will not cut the budget for the mother -- the robert mueller investigation. it is a signal that attacks on the inquiry will not happen in the perceivable future. he said last year he could imagine and acting attorney general reducing the budget so low the investigation grinds to a halt. over to china, the country says last week's import export expo was a success with $57 billion of deals signed. our study of the agreement shows state enterprises in energy, shipbuilding, steel and autos dominated. president xi jinping promoted china at home and abroad. this is at the core of president trump's dissatisfaction with beijing. -- thed driving the cold
wildfires in california. the governor is calling on president trump to release new federal aid. a quarter million people have had to leave their homes to seek safety. the call comes one day after the president threatened to withhold funds because of what he called gross mismanagement of forest. space, they successfully lost commercial mission from new zealand. ofcould be a new era spaceflight. the reckitt -- the rocket blasted off from the north island, carrying six small satellites. it was delayed from april with emission problems. it could keep costs down by using expendable boosters with 3-d printed engines. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am ramy inocencio.
this is bloomberg. haidi: let's get more on what we should be watching in global markets this week. let's get to the bloomberg news managing editor looking across asset management in asia. ended it down friday, where do we go from here? a lot for investors to look at. potentially worrying. last week we got a lift from the midterm elections in the middle of the week, investors had decided that they were comfortable with the prospect of divided government in washington, but it did not carry through very long. by the end of the week there were increasing concerns about china's economic slowdown and fears that we could be passed the peak for the earnings season in the united states and developed countries. looking ahead to this week,
despite the singles day extravaganza from alibaba over the weekend, there are concerns about china's slowdown. it could get further ballast from wednesday data on october where we get key figures for retail sales, industrial production and infrastructure investment. the numbers are significantly weaker. they are not terrible but weaker than they were earlier this year. we also get credit lending data in china, incoming -- in coming days. metrics forey investors with regards to china is what our officials doing? news on friday the banking regulator wants banks to set quotas for lending to private
companies kind of spooked investors. they are going to that kind of extent in terms of using strong-arm tactics, the concern is, there must be something wrong. numbers outending of china will give us an indication of where the momentum has gone. we are looking at retail sales, industrial production. singles' day numbers from alibaba, does it put in the idea of the chinese consumer is struggling at the moment? couple ofe had a different takes from your guests. having covered the u.s. economy for a number of years, it is retail to black friday sales right after thanksgiving. they are never the best indicator of underlying strength in spending. there can be all kinds of
reasons for a new record. maybe the advertising was not all that much better. people responded to the cirque du soleil fact that alibaba rolled out as part of this may be. -- maybe. it is not a good indicator. story, whater happened at opec. we saw saudi arabia signaling production cuts come about this only after oil prices saw the biggest losing streak or longest ever. how will this affect other assets? about oilnteresting prices. the big decline a few years back tends to be net-net, a bad thing for stocks because it hit investment in the united states, slowed growth, didn't do so much to boost consumer spending.
this time around we got a much declinedecline, rapid and potential for reversal. it is harder to powers -- parse through the impacts. there is a significant impact for oil importers. it is a good thing. it is not a coincidence indian stocks and indonesian stocks outperformed the market last week. it could be less pressure on their currencies, less pressure to boost interest rates in those countries. that could be a good thing. not good for mexico. conversely could add to inflation concerns in mexico as the peso depreciates. choppy impact on different financial markets. much. thank you so
playing into investors minds, eco-data out of asia. let's bring in kathleen hays. let's discuss the data out of japan. we have ppi data, and what it means for the boj as well. they are so focused on inflation, and a couple of numbers are going to not be in the plus column for them but producer prices were released. they were a little weaker than they had been. talking about producer prices in the month of october. it is the sunset of consumer prices because business to business. 2.9% year-over-year, export prices not so bad. import prices up 9.5%. 4.5%tic demand was up three looking ahead, cpi has seen slowing again because oil prices have fallen, although if
the yen weakens, that could provide offset. next week is when we will be getting cpi numbers, so they can be showing weakness. it is important gdp comes out this week, and that is expected .o weaken in the second quarter a weaker gdp even if temporary or has special factors will not add to inflation pressures. it is a week where the gop -- boj looks at numbers and say, what is ahead? haidi: india, also releasing inflation data. r.b.i.ttle between the and the modi government is dominating what investors are watching, so much drama. kathleen: more and more people are saying we can understand you have this back and forth about how to manage liquidity,
capital, reserves, which the r.b.i. bank controls is legit. the more you battle in public, the more you undermine the credibility. this cannot be good for india, whose currency is the second worst performer in asia this year. it is getting interesting because there is a report india's government wants the reserve bank of india to hand over a big chunk of their reserves and loosen liquidity rules. the indian express newspaper reported that mr. modi wants one third of a total reserves held by the r.b.i. to use to recapitalize public sector banks. that has been an issue. the r.b.i. said it could lead to problems. we don't want to keep bailing banks out. the indian secretary of economic affairs on tweety -- friday tweeted there are no plans for the r.b.i. to transfer these
rupees to the government. he said the only proposal under discussion is to fix an appropriate capital framework of the r.b.i. the question of how they will manage capital and reserves is very important. looking ahead, there is a meeting november 19, the r.b.i.'s board has this issue in front of them. the head of the r.b.i. it was scheduled to appear before a parliamentary committee in india today. people were not surprised he canceled. they thought it would happen. we'll look at indian inflation later. it should be 3.3% year-over-year. before they settle this back and forth between modi's government and the r.b.i., that is where the focus will line for investors. hays. kathleen president trump was a target of criticism during ceremonies in paris to commemorate world war i. it began when he failed to
attend a service for fallen u.s. marines because of the rain but was singled out by president macron who criticized the protectionist and nationalist statements. our reporter joins us from hong kong. missing the ceremony did little to help cut the isolated figure over the weekend. >> the optics from this were very much the president in isolation, for not attending that ceremony because of the rain. and then there was the optics of the leaders and most of the , presidentether trump not walking in that line, showing up separately. he was not, and he was not seen. it was president macron and angela merkel who were sitting together, have their heads together at one point. their collaboration with seen,
he was seen as being isolated and to be isolated on the international stage -- shery: president trump has seemed intermune -- immune, even though his domestic approval rating is not that high. resilient around 40%. any reason this could affect him domestically? reporter: not so much. he basically will do well with his base. they like the america first mantra. they like that seeming to take on this internationalist philosophy that was proclaimed by, quite strongly by president macron. but there are times when the u.s. needs allies. certainly if it confronts china on trade policies and seeks to confront iran over for in an nuclear policies. so there could be repercussions
for president trump if he needs these alliances. clearly the international leaders are seeing him as somebody who does not sort of share in their international profit -- philosophy. that will have repercussions in the future. haidi: this week is the start of inmit season, asean singapore, then the aipac. president trump will be absent. is this a message that suggests the u.s. is pivoting away from asia? reporter: it does suggest president trump is not interested in attending these two important summits that he typically attends. he is sending mike pence. it speaks to the issue of isolation and kind of doubling down on america first, even after the midterm elections. it really does raise the
question as to whether there are going to be if there are opportunities for discussions of things like trade policies, and as the u.s. takes on china in trade, whether there might have been opportunities to talk to other countries about trade, certainly the u.s. is missing out on those. that will be a question for the future, whether there are repercussions. domestically not so much. internationally perhaps. thank you so much, our senior international editor. looking at geopolitics in the world, those asian summits. the annual shopping holiday topping $30 billion to set a massive record. this is bloomberg. ♪ this is bloomberg. ♪
alibaba rang up $31 billion in sales for the annual singles' day extravaganza, fitting a new record as shoppers swarmed to the online bazaar. more huge numbers. takeaways? key given a lot of analysts say there are a lot of variables in this one day shopping bonanza? tom: absolutely. we should be reading -- should not be reading too much into these numbers, but it is worth going through the topline data that came out of this massive shopping event. you talked about $31 billion sales number compared to $24.2 billion last year. the number of brands, 100 80 thousand brands, many international companies as well, 75 different countries. in the first two minutes alone
they notched up sales of more than $1 billion u.s., and some of the companies benefited by tying themselves into this shopping festival including apple, xiaomi, which is a they notched up sales of $700 million event. this there were 230 other brands that notched up $14 million each. the numbers on the surface are astounding, but you are right to point out there are distortions because many people hold back on purchases until the 24 hour event. and then purchases made start to slow because people have spent heavily over the last 24 hours. you also point out the context in terms of the pressures the chinese consumer under are worth taking into account as well as alibaba's challenges in the domestic market. they pull it off by straining every sin you -- sinew in the body, but they orchestrate all
of these different assets to make sure they get the record-breaking number. haidi: tom mackenzie in shanghai there. let's discuss single day and more with eric in hong kong. he is the blue lotus capital advisors founder and ceo. great to have you with us. forooks like singles day alibaba was another success. if we break down the numbers and what happened in terms of physical orders against parcel orders, what trends are we starting to see and what clues do these numbers give us about the future of this event? >> nice to be here. the data does look very strong crew we have several in and outs of this data. one is the data that is less than 1% growth rate, but this time data does not include alibaba's off-line acquisitions
adding those, the growth rate can go up. another interesting point we must point out is the number of parcels generated grew up 23% year-over-year. that is almost the same as last year. this means there is really a lot of physical goods in the --ponents, in the grocery gross retail. and it grew 29% year-over-year. that was over a high base. this year's number is even more strong. you are not seeing any signs we could see singles' day fatigue anytime soon? one aspect we look at is alibaba is increasing on the instead of of retail incremental level. this number does not really
indicate how strong china's retail sales are which all the data point to a slowdown. double 11 isba -- their testing ground for testing new technologies, new tools and methodologies. these will benefit the growth rate for the entire year next year. haidi: i want to bring up a .hart in our gtv library you talked about the fact the numbers alibaba's single day doesn't take into account the acquisitions. online shopping in china is growing three times faster than the pace of overall retail sales. at what point does it reach saturation? you see were the international expansion is going? international is also strong. [indiscernible] was included for the first time this double 11.
but there are two saturations here. traditional sense of e-commerce focus on four categories, apparel, cosmetics, maternity and electronics. these four have been saturated for a long time. they areate is reaching probably close to 15% of penetration -- 50% of penetration. the categories i mentioned are only 17% of china's retail. cars, property, but the biggest part is having to do with food. they cook food, raw food. these two together, 50% of china's retail, almost as big as the four categories i mentioned about. penetrating to the food category is low. that is why we are seeing j.d. newalibaba focusing on
incremental growth and also as i mentioned, there is still a lot of off-line, the remaining 50% in this for categories, very difficult to penetrate online, but alibaba is using the new to linkoncept which is off-line and online inventory together. salese have heard is the from this portion is actually strong, but he is not included in the double 11 figure as far as we know. haidi: tell me why investors are so bearish on the stock. i think alibaba is in a transition. starting from last year, gme to 50 ors 50%, close 40%. slowdown is alyssa given. alibaba is expanding into a lot of new territories.
including cloud computing, entertainment, to attract more traffic and international expansions and all that. there are five or six new businesses and all of them losing money. the core pressure on e-commerce business. the company is set to further increase the take rate, the revenue [indiscernible] early this year. only to be delayed until next year. so this is basically the hind the sheer weakness -- behind the sheer weakness. there is concern about the business being too much to traffic business down. number two is the effort to increase monetization of existing business, getting pushed back. we are still positive because we think this monetization will happen next year, and those new
initiatives, we are seeing increasing fines some of them will turn to profit making. shery: talking about transitions, jack ma preparing to step down. what will alibaba then look like? alibaba without jack ma, the company am of the biggest challenge is how to deal with chinese government. outof the reasons we find monetization is getting pushed out next year is because new legislation called e-commerce law. itself,mmerce law is by it is well sorted out and basically it is charging the same tax for online and off-line the same rate. global wise this is where the direction is going, e-commerce. but the timing of this is not the well timed, given
economy is slowing down, structural reforms china needed and the trade war. adding e-commerce law is more burdens and putting pressure for alibaba. haidi: thank you so much for joining us. talking about singles' day and alibaba. before we get to markets asia, looking at the india -- indo pacific. looking at inflation numbers, seeing declines with trading in korea and here in sydney. ♪
>> it is 9:00 a.m. in hong kong and shanghai. here are the top stories. >> japan leading markets down. declinesignal further in hong kong. >> opec and its allies signal renewed output curves. saudi arabia will produce crude exports from december. china's consumer sentiment seems robust. a record $31 billion of sales in just 24 hours.
>> two things. singles' day. a pocket of the chinese consumption story. when we look across what is happening right now, u.s. futures under pressure. the other big story is oil. >> you see how things are varying. just coming online following a downtrend we have been seeing across asia this morning. oil. what we learn from abu dhabi was -- they are taking the step in cutting production. we will have to wait until december to hear how coordinated this impact will be. here is what we heard over the weekend. will only cut if we see a persistent glut emerging. quite frankly we are seeing signs coming out of the u.s.. we have not seen the signs
globally, nor can we predict they would arise in 2019. >> we have to wait and see how the market is unfolding. as i have stated on numerous occasions, there is a toolbox which allows for an increase. depending on what the goal is in the goal is market stability. still too early to talk about any kind of new policy. it was interesting to see what happened with the wti snapping that off, 10 days of losses. $70..crude back above 500,000 barrels are going to cutme -- are going to be when it comes to saudi. that is the signal they send at the end of the weekend. we heard from the russians, are
they going to have to follow? russia is better when it comes moreeir -- they are in a comfortable position, showing no signs they are ready to act immediately in joining with opec. we will see how things play out. the question is, what is this going to mean for em? we have seen this rebound with oil weakness. is that going to reverse? we look at the ringgit. that is going to be the big fallout this morning. also the rupiah later on. this is how we are signaling when it comes to the china markets as well. we did see a bit of an ugly day on friday. seng fell 134 points. it really was what we saw when it came to tech stocks. these earnings reports really sending a shiver when it comes to tech earnings. tencent is expected to report later this week. we will see if that spillover
effect is going to catch on. stock, the shenzhen has really taken it on the turn -- on the chin. the u.s. trade advisor not holding back on their hard stance on china when it came to trade. he was saying, wall street, back off. did notidterm election give them an incentive to back off. in a lot of ways, a vote of confidence here. we will be watching these tech plays in hong kong. apple related shares on the backup. the positive story, singles' day. force really seems strong when it comes to the consumer story. alibaba raking in $31 billion. a massive understatement to what happened there. the numbers seem to indicate sentiment does remain robust despite escalating trade
tensions. tom mackenzie has the story live this morning out of shanghai. justthis monster has really evolved since its inception 10 years ago. >> it really has. this is why -- this is like black friday and cyber monday on steroids. --pare that to $24.2 million $24.2 billion from the end of 2016. 180,000 brands. over $1 billion worth of sales within the first two minutes. some of the top winners include apple, but also xiaomi, which said it gained sales in excess of 740 million u.s. dollars over that 24-hour period. in terms of what it says about the chinese consumer, they are facing headwinds. wage growth has started to slow. thrill estate sector is starting
to call as well. one of the cofounders of the company said that may be a reason they saw less demand for big-ticket items like refrigerators and flat screen tv's. alibaba put everything into this to try to get this record-breaking $31 billion in terms of their online and off-line, but also artificial intelligence data, game of vacation of online assets to ensure the consumer was hyped up towards these platforms, which seems to have paid off. is how sustainable is is given domestic pressure and the broader headwinds. >> xiaomi, apple, and dyson products were very much high in demand. president trump's trade advisor went on the attack against wall street executives, accusing them of trying to sabotage the
administration's handling of trade relations, tom. what's hear from peter navarro. >> as part of a chinese government influence operation, globalist billionaires are putting the full court press on the white house in advance of the g20 in argentina. of theseon unregistered foreign agents, that's what they are, they are unregistered foreign agents, is to pressure this president into some kind of deal. >> given the harsh language like what we heard from navarro, it does not bode well. >> that all depends if he has the europe the president at the moment. navarro and lighthizer are seen as the hawks. peter navarro has long been an advocate for a much tougher line on china. he wants to see this being a long, drawnout campaign of
pressure on beijing to check , whatf what they see navarro sees as bad behavior coming out of china, whether on the trade front or the military front or geopolitical issues. he is in line with lighthizer. on the other side you have steve mnuchin, pushing for a quicker deal. we are looking ahead to that g20 meeting. from the chinese side we have heard from the likes of the chief economic advisor to president xi, but also the chinese remain ready to talk to the u.s. side to alleviate trade concerns. have therro right now ear of trump? is trump now in a position where he wants to strike a deal more quickly? has why there is so much focus. most analysts don't expect any significant deal out of that, but potentially a framework that moves us to the point where we
start easing tensions at least. >> lots of meetings coming up. before the next couple of days, we have the aipac meetings, president trump not going to be there. jinping ahat gives xi chance to shine and take the spotlight. >> president xi has proven he will take any advantage, or take advantage of what many see as the u.s. retracing some of these issues. if there is a stage, president xi will stand up and give a speech talking about how china is upholding the multilateral trading system and is a champion of globalization, even of course when you talk to corporations and lawmakers, in europe and the u.s., they talk to the need for china to implement serious reforms around the economy to address the structural issues we have talked about, whether that is intellectual property or in
terms of equating and creating a level playing field for so many of these sectors. resident she will use this as an opportunity to push that message , and it will be seen as a missed opportunity for the u.s.. we are still at the point where tpp is something the u.s. have pulled out of and china are trying to make their own multilateral trade deals in this region. >> got to leave it there. tom mackenzie out of shanghai. there are lines coming throughout the post bureau. 1.3 billion packages generated on singles' day. crazy. >> a lot of packaging. >> a lot of paper. that for the environment. >> let's get the first word news. paul allen joining us from sydney with more. sterling opened weaker in early asian trading as theresa may fights to keep her brexit plan alive. pro-eu conservatives say this is
the worst of all options. eurosceptics are demanding a clean break. juncker says he thinks a deal will be struck soon. a disorganized split would make things worse for bus -- for both sides. president macron called for cooperation as the world marks 100 years since the end of world war i. he used the occasion to criticize the politics embraced america under president trump, saying patriotism is the opposite of nationalism. nationalism is a betrayal of patriotism. chancellor merkel warned the world is regressing on human rights. drive theinue to worst wildfires in california's history. governor jerry brown calling on president trump to release new federal-aid. at least 25 people are known to have died. a quarter of a million had to leave their homes. brown's call comes after the president threatened to withhold funds.
goldman sachs' former top a crumb across ages is a culture top in banker -- top banker says a culture of secrecy concealing -- global news 24 hours a day on air and @tictoc on twitter powered by journalists and analysts in 120 countries. >> under seven weeks to go, but certainly a bad year for equities. all of that with everything standard investments head of global strategy. >> up next we are joined by the head of south asia's largest bank.
>> singapore's annual fintech festival is underway. announcing they will be working on payment services in southeast asia. a partnership will see two companies collaborate. this will soon extend to other countries in the region. >> more on that and the rationale behind this. our chief international correspondent, haslinda amin is on the ground for us. tell us more. >> there have been few details, but i have the details. the ceo of dbs joins us.
congratulations. what exactly are you collaborating on? belief thethis nature of banking is changing. banking is to be a pipeline business from you to the customer. it is becoming a platform business where you have to work through a partnership arrangement. you need to find people who bring, mentality. companies which already have a large full of customer and are embedded in customer communities are good for us because they can bring the customer. we have germany's capability in terms of payments themselves, both brick-and-mortar, the infrastructure, but equally, the thinking on how you take payment . we are seeing a lot of customer base and trying to reimagine the
payment experience. >> dbs is a regional bank. out tois only venturing southeast asia now. why go-jek? >> indonesia is the biggest market in southeast asia. ofyou have any ambition trying to grow in a large-scale market, you are looking for a partner. as we said before, india and indonesia are two markets we would love to be able to grow off. haved, go-jek does regional ambitions. they are seeking to moving to other countries. we do think there will be an opportunity to welcome them outside indonesia. fintech -- in singapore? how is that changing the business for dbs? fintech's will be
collaborators for banks. they find some very creative solutions to customer problems. they have one big challenge. they don't have customers. we do have customers. they are happy to work with us. it is a match made in heaven. we use them as part of our customer solutions. they are the 1%, i call them the tech fins. companies like amazon or google or alibaba. they do have the customers. create different solutions, in some cases they can wind up being competitors to us. in others we can work with them collaboratively. >> would you consider acquisitions? think as we go forward, being able to look at fintech is a possibility.
we have made two or three small investments. what we look at our people we can invest in to make sure their longevity and then we can do the capability within our offering sweet. it is unlikely we will make large-scale m&a moves. acquisitions have to concentrated in some part of the chain. >> congratulations on your achievement. how do you envision dbs transforming in the next 10 years? >> everything is changing. our industry is not immune. cash -- the goal is to make dbs invisible, like intel inside. -- business is hidden symbol
hidden seamlessly in what you want to do with your life. we want to embed dbs in those parts of life that matter to you. in doing that we can actually use data. choiceslping us make that are better suited to you, that bring you value, that bring you the capacity to create -- that's what we will try and do. a you have been pushing for payment where fintech's perform the functions that payments have before would be regulated. that legislation may come into effect. will address the issue? >> i think it is a sensible piece of legislation. on the one hand, it actually
creates an environment where a lot of new techs have the capacity to perform and offer new services to people. that is a good thing. you want to be able to address a consumer need. -- inoing to allow singapore. at the same time, what it also the presencesure of these nondelegable -- -- depending on what they do, the amended regulation you have, will be in direct proportion. they will be constrained with what they can do with public money. they will be constrained with lending. i think it is a good balance. it is a better regulatory
consistency, but at the same time -- >> always a pleasure to have you on bloomberg tv. coming to you live from the singapore fintech festival. heading back to you in the studio. >> later on we will take you back in singapore. the yuan fix was out. i'm not going to say it. not very interesting. what will be more exciting our stocks to watch ahead of the open. we will get to that in the next few minutes. this is bloomberg. ♪
about was tax cuts. they are furthering tax cuts to pay for income tax reform. companieslso urging to improve in their share of buyback programs. one thing i was looking for friday was the rescuing of these private companies. the government actually purposely directly telling banks how much they should lend to them, which could be a good or bad thing when it comes from these banks in particular. it raises questions about how desperate officials are when it comes to helping these private companies out. it really did fall on friday. looks like we are set up to continue some of those losses today. in the premarket about 0.6%. a lot of questions about whether this going to raise questions about the bank's specific duties when it comes to an increase in npl ratios. why thoses a reason
loans were not existing in the first place. anyway, declines there. the other story is singles' day. five years ago we were at $5 billion, with $30 million on the weekend. we have this line out from the postal bureau. packages. a line of 5.2 billion for their own sales, just them alone, smart phones and internet of things devices. will this help sentiment? >> it's going to be a big one to --ch after at&t technologies aac technologies, boost of 1%. futures looking positive, building on the back of 0.6%. the hang seng could still fall out of favor. we did see changes when it comes to stocks.
>> 9:2 9 a.m. in hong kong. a foggy morning. the china open just one minutes ago. we are watching oil prices, seeing a decent rebound here. with the wtilines after it entered a bear market. opec coming to the rescue with saudi seeing the first step to cut output in december five 500,000 barrels fewer than we saw back in november. is that going to lead to price gluts to stall? or a rally? that is a key thing to watch. >> especially where we have seen break even move toward real rates are stalled.
a-shares as it pertains to next year, a love and percent is expected -- 11% is expected. the markets have been badly beaten black and blue so far. let's see how we are looking right now. and mixed picture, but hong kong has been following the trend. seems like everyone is. falling out of favor. you have to ask what has changed . the oil picture has changed. dollar gaining strength. weighing as that fed meeting did not change much when it came to the picture, but still shifted sentiment overall. hang seng flat right now. 0.1%.es down by tencent is reporting midweek.
oil, let's have a look at how some of these big oil counters are trading. we are higher on west texas. a leg up as we speak. six weeks ago, well below the peak. 20% below $69 is where takes you from the peak a couple weeks ago to where we are now. >> morgan stanley also coming up with a note saying the gas price increase is confirming that winter season is coming, with gas price hikes, they have started in china, it could be a good time to buy up energy names , petrochina was one they recommended. one to watch when it comes to the energy players. let's have a look at airlines given the fact we have seen a bump when it comes to crude. cathay pacific down 0.1%.
some green when it comes to china eastern and southern. world looks in the at airline and oil, as long as they don't pass it on to us, we are all fine. andrew milligan is here with us. good morning. very nice to see you. you were here three or four weeks back. anything changed? is president trump and president xi are potentially reaching agreements. -- bad is ofurse course president pence's from a few weeks ago. the bad is what you have just seen on the chinese stock market . stimulus efforts have not yet succeeded in stabilizing that market. times is warning
me about more debt problems. the good is better and the bad is worse. that is what markets are having to work out. >> you mentioned debt. it was unprecedented for the chinese government to tell banks , purposely, how much they should be lending to private companies. does that do more harm than good? >> absolutely. thing, stimulus, we are all looking for regulatory relief, as long as they don't it to fall rapidly through seven, any stimulus is a good sign. it relieves people to say, what is the problem if the government from thedirect capital banking system in that sort of way? we know china is not the world's most free market economy. even so. >> the success of any monetary policy program is contingent on the other side of -- the counterparts of the banks being
willing to take on loans. in the case of china that's part of the problem. liquidityd problem is . how would you suggest they tackle this? if it is about guidance, how do they alleviate your concern? >> we have to go back to some of the big stimulus efforts of a few years ago. what happened, local government that has taken on to being banking sector, and it may be that versions of that will have to happen again. banks can take on more debt, fine. otherwise it will have to go on to the central government as in the past. the mechanism will be different, but that's probably going to have to be the outcome. >> you hear people say the market moves have been too far. do you think we have overshot the overall macro picture we are
seeing? are we just contending with little returns in what we saw before? is this a sustained bear market? >> there is a possibility for shares to recover. if we get another bounce, 250 billion dollars of tariffs some a crime january, perhaps the next phase of a real trade war, certainly not. good get relatively relationship between the governments and the stimulus measures start to come through, absolutely you will see valuations on chinese stocks are very attractive. valuation requires a positive trigger and we have not yet seen that clearly. >> yet you are not selling on rallies. >> it comes down to the big questions. do we think there will be a recessed economy in the next
year or two? i say no. --we think profit debts will profit growth will continue? nevertheless, the relative valuations around the world compared with what we think bond market is going to do does not require bigou do policy in the eurozone, in u.s.-china relations. if it's going to be a recession in 2019, we have got start taking action now. >> what would you be buying at the moment? seems like you have to be more selective. tech stock has been some thing to worry about with earnings downgrades we have seen. tech are concerned about around the world. this regulatory change we have seen in quite a few countries. some of the autos in financials are very beaten down.
just as we saw in 20 when oil prices collapsed. if there is profit recovery, those can be nice. otherwise it is stocks you think will be able to return cash to shareholders through buybacks and dividends growth. ,ou said the word selective whether it is by country, region, or company, selection is essential. >> your assumptions on the u.s. dollar for next year? you get half of the equation. >> this year emerging-market selloff has been a dollar move at the end of the day. it's difficult see the dollar move higher because positioned her's are so -- positions are so entrenched. it is difficult to see. if we get a nasty inflation chart from the federal reserve year, the dollar
will be dragged higher. we are seeing range trading. already, sevene is protective, but if we go it is veryen, slowly, but very clearly, if the chinese authorities allow a big ,ove down again versus whatever the dollar, that is a problem for emerging markets. i hope the dollar just range trades. months before markets really moved higher. i don't think we should be expecting a rapid recovery after the october move. >> oil, real quickly? this fall we have seen, it has installed a little bit, but good for risk assets? >> for some. it is basically an equal
transfer. airlines or oil companies will benefit. consumer stocks will or won't benefit. opec wishes to stabilize. good fiscalery incentive. we should not forget shale oil exports in america will pick up strongly next year. goinger value we see is to be more u.s. oil being exported, capping prices lower as well. >> great to have a synopsis of everything. >> everything. >> aberdeen standard investments head of global strategy. >> let's get over to sydney. paul allen is therefore an update of our first word news. >> thanks. opec has begun laying the groundwork for output. saudi arabia announcing a cut in crude shipments. after the meeting, the energy
minister said the group was responsible and would work hard to balance the market. the kingdom will export half a million fewer barrels a day in december with wider cuts seen in following months. see awill only cut if we glut emerging. quite frankly, we are seeing thes of this coming out of u.s.. we have not seen the sign globally, nor can we predict 2019. new recordbaba set a for singles' day with $31 billion in sales. the online extravaganza featured mariah carey and cirque du soleil with xiaomi, apple, and dyson among the most popular brands. the single day is a bellwether for the chinese economy, offering a gauge of consumer sentiment. acting attorney general matt whitaker is said to have indicated he will not cut the
budget for the mueller investigation. sources say it is a signal attacks on the inquiry won't happen in the foreseeable future. last year he is told cnn he could imagine and acting attorney general reducing his budget so low is investigation grinds to a halt. u.s. based rocket lab successfully launched its first commercial mission from new zealand. what it hopes will be a new era of affordable spaceflight. the rocket blasted off from the north island carrying six small satellites. the launch had been set for april but was delayed by a vision problems. rocket lab plans to keep costs down by using 3-d printed engines. global news 24 hours a day on air and @tictoc on twitter powered by journalists and analysts in 120 countries. i'm paul allen. this is bloomberg. >> lots more coming up.
yvonne: now for look at the stories trending across the bloomberg universe. how some of the world's biggest financial firms are increasing their stakes in securities joint ventures in china as beijing opens up the financial sector. and on tictoc, get this. first ai anchor unveiled at the world internet conference in china. david and i have start looking for a new career path. those stories. president trump's visit to paris and the opec plus meeting in abu dhabi. check out those stories on bloomberg online or on the terminal. david: that ai actor, horrible.
yvonne: we have more spunk. david: a lot of these need more context. why am i so upset about that news. we promise we will talk about oil. the russian energy minister, alexander novak, is not ruling out production cuts with forecast showing the effects. he told bloomberg any decision they make will not be driven by immediate market swings. today, we have looked at the previous market situation. more importantly we have studied in detail a number of scenarios of how the market can develop. inhink many of those show the first quarter, the first half of next year, we are at a highlight of production. we have not made any final
decisions today including in relation to the topic you mentioned. we believe we need to take some time to analyze the situation in detail. why.will explain as early as one month ago everyone has been talking about the necessity to boost production because people were afraid. i think we should not rush decisions. we should not be driven by immediate volatility. we should sit down and make fundamental decisions. >> the kingdom saudi arabia saw their nominations declined by 500,000 barrels. on the demand side, are you seeing a similar decline in nominations? >> i think we should not only focus ourselves on one market. we should be looking at november, december, the dynamics of demand. >> the dynamics of demand for russian oil, are they declining?
>> the demand for our crude is fairly stable. historically, they are governed by contracts. >> won the discussion about cuts comes, will it be a look december opec meeting when there will be a full or discussion about cuts? i would not want to focus on production cuts. like to say i think we have to wait and see how the market is unfolding. as i have stated on numerous there is a toolbox which allows us to increase or decrease production. we have shown during the past four years we can use either way depending on what the goal is. the goal is market stability. questionssed on the
we are receiving from journalists and the market, it seems to me that the demand for this information is over exaggerated. to sum it up i would like to seeing we are not excluding cost -- i would like to say we are not excluding cuts. conversation,e saudi arabia is saying they are prepared to lead. how much is russia prepared to take? is mr. novak's redline in terms of accepting cuts? >> i do not think i would like to mention any numbers yet. as you can see from the past two years, we have always had a very dramatic approach to this topic. we have always been answering the questions of russia and the market and always continue doing so.
i would like to say that we have a number of options. we can increase, decrease, or keep production flat depending on what needs to be done. we will be basing our decisions on current goals and qualitative markets. yvonne: that was russian energy minister alexander novak speaking to manus cranny. tell us more about this. oil in a bear market. what is this going to mean for other asset classes when you take a look at stocks, bonds, and currencies? do you think opec supply cuts will be enough to hold the decline? >> it is interesting. i think a previous guest on this morning was talking about how essentially oil prices decline -- pricease our declines and increases our income.
when it goes the other way, all those traits reverse. at the start of this week i think my colleagues on our markets live blog are anticipating a rebound in currencies that got hurt. the mexican peso, the russian ruble, the malaysian ringgit. energy stocks really got hammered, particularly on friday. energy stocks within the msci world index are the worst performers of the past month. you can anticipate a bounce back here. how extensive the rebound in oil is remains to be seen. market.uch a volatile just a few weeks ago we were talking about shooting up to $100 a barrel on the brent measure. now we are potentially heading below $70 towards $60. this is something that investors don't have a generic narrative
on at this point. we are not likely were back in 2015 when pronounced oil price declines penetrated all kinds of asset classes, fed into the deflationary psychology we saw for bond yields and global stocks. at this point, i think andrew milligan, who was on earlier, hit it right. the income transfer way of thinking about it. put this into context of -- it is taking place this week. lots of data coming through out of china. there is wariness when you look at how traders are positioned. why are people more worried about taking bets either side of the point? >> the chinese yuan is back in week after tumbling last amid mounting concerns about a
slowdown in china's economy. we had a few earnings announcements including from sea trip, one of the biggest online travel per for riders -- travel providers in china that indicated the chinese consumer is raining in a little bit. obviously alibaba singles' day extravaganza was another record over the weekend. the weather this will carry through into official data and wednesdaylew of it on , retail sales, industrial production, infrastructure spending, remains to be seen. what is interesting about the exchange rate is that a number of analysts are saying people are little bit wary of actually shorting the you want outright in the offshore market. china has shown that it is ready to squeeze shorts aggressively
in theing interest rates overnight market in hong kong by starting -- starving liquidity, so it has been increasingly looking at what they call proxies. the aussie dollar a longtime favorite. the new zealand dollar and also the south korean yuan as well. another advantage is the interest rates in those markets are lower. it makes it easier to make those traits. -- trades. david: thank you, our managing editor leading asia. there's plenty more ahead. keep it here. ♪
yvonne: let's do a quick check of the business flash headlines. volkswagen and ford are said to be nearing an agreement joined join forces on electric and self driving vehicles. the pact to may see vw in the best self driving partner. vw also plans to share electric vehicle technology with ford piggybacking onto the fund. >> a group is teaming up with companies from asia and europe to bid for a $6.8 billion high-speed rail. the link is one of the largest transport projects in the history of of the country. the consortium is set to submit its bid later. yvonne: christmas has come early for universal pictures. studio ah gives the $66 million weekend stake and top spot at the weekend box office. benedict cumberbatch provides the voice.
morning. oil is on the boil again. extravaganzaay could help the consumer incentive inside china. david: it is helping a few names. market.the overall does it really change anything? you can see right behind us. when you look at what is happening across the currency markets, there is not one consistent theme here. we are watching sterling here. important chunk of the brexit story coming in the next few days. oil was down. and then we had it pop up a little bit today.