surprisingly, a little more risk coming back to the markets. gold is coming back a bit, equities are on their way up. rishaad: bitcoin. dave: who knows what is happening there. [laughter] rishaad: let's get straight over and look at what is happening because it is green on the equity side of things. this is the position, 1.2%. and up 0.75% to the upside. not screamingly higher. position fore equities, this is what we have going on on the currency market, very little change of the bloomberg dollar overnight. we have the filipino peso on the way up and china offshore and onshore moving along, but respitea little bit of

over concerns of chinese growth. onbers out of china industrial profits. let's look at what has been going on with them. a little recovery. we got above the dotted line, breakeven, if you will. for april.e 1.1%.e we got up this informs us about nominal gdp and that would suggest we are on a slight uptick. the bottom of this graph is the ppi. years of negative prices. we have been positive and remain positive as well. against this backdrop of where companies do have pricing power, industrial profits ticking higher. against thehat background of the g20. we have a date for that. president trump stepping up

rhetoric against china as he prepares for the crucial meeting in japan. stephen engle is on the ground for us for that meeting. we have a date for the date. do.hen: we saturday, just before lunch, 11:30 a.m. saturday is when president xi jinping and trump will meet. president has a full schedule tomorrow. he will be meeting scott morrison of australia for dinner and a whole wave of meetings tomorrow with vladimir putin, narendra modi, shinzo abe. bolsonaro, the brazilian president, angela merkel at 10:15 in the morning. the whole schedule of bilateral meetings for the g20. issues hanging over

this. number one is the china-u.s. trade war. the conflict and rhetoric stemming from the iran standoff with the u.s. sides of the two story on the trade front, steve mnuchin, u.s. treasury secretary, is saying we are 90% of the way to a trade deal with china that could come to fruition by the end of this year. sources are telling bloomberg the u.s. could postpone or not enact the threat of another round of tariffs on $300 billion worth of goods, if indeed china agrees to come back to the table, and they find a path forward for negotiations. perhaps even with the face-to-face meeting saturday with xi jinping. speaking of fox news news, donald trump contradicted optimism coming from his treasury secretary and saying, -- could become

plan a, if they do not negotiate. everything is up in the air until we have that face-to-face meeting saturday. donald trump going to meet friendlier faces perhaps tomorrow and tonight with the first meetings with scott morrison and then shinzo abe tomorrow. onn the tough one begins saturday. rishaad: i wonder who is going to be representing britain because it is in flux. tell us where we are. david: theresa may. rishaad: she is still prime minister, i suppose. lame-duck leadership. [laughter] stephen engle there in osaka. next up we hear from yorizumi

watanabe and --yorizumi watanabe . had decent data out of china industrial profits. a thought we would see decline. what we got was not exactly higher. 1.1%. renminbi for the month of may. rishaad: this is the chart we showed earlier. economyf china's contracting overstated. quite yet.t too soon to call it a turnaround. better-than-expected. pmi's remain under pressure. p it -- ppi is somewhat under pressure as well.

the manufacturing sector is headed in the wrong direction. ofhaad: we had years negative factory gate prices and roaring growth. how does one play against this time there is a lot of pressure on the chinese economy. you have the trade war, policies toward stimulus and a signs of slowing consumer demand. there is a confluence of things come together keeping pressure on china's economy, which is why the ppi is a negative story. david: the earliest of early indicators, that is a thing we track -- what is it saying? enda: a similar story. industrial profits -- the broad story remains that indications for the small business sector in particular are looking downwards. property stocks are headed in the wrong direction. the south korea story is a big

indicator for demand for chinese exporters. it is all pointing out downward pressure on china's economy. think it adds to the broader story around, we know it is under pressure. that is why there is so much attention focused on this weekend to see whether or not they can get a circuit breaker at the g20. the economic gauge for smaller companies, how does that enter into the landscape? enda: they are the backbone of the economy, any economy. no different in china. new is why when you look at orders, indexes on a demand for exports, where the ppi is gauges, and the external such as south korean exports, that is heading in the wrong direction. taken together, there is not much positive to say about the small to medium enterprises at

the moment, especially with the broader trade war tensions going on. they are looking for a circuit breaker and are not seeing one anytime soon. david: thank you. other things happening in the world, to get us an update, selina wang. war is biting hard on businesses operating in asia with companies reporting more delays or cancellation of investments than a year ago. the american chamber of commerce in singapore said the effects were cited by surveys, up 4% from late 2018. businesses are considering moving supply chains away from the u.s. likely to slide into recession in the next few months if global trade darkens. downgrading forecast for growth, 3/10 lower than before.

the singapore government sees third-quarter growth at 2.5%. ease insaid it would october. president trump is praising mario draghi, saying he should be holding the reigns at the fed. he says he has a right to fire the fed chief and tweeted that policymakers blew it last week when they cap rates on hold. attractthis week he had draghi for claiming more stimulus in the euro zone. iran set to breach the terms of the 2015 nuclear deal thursday, piling pressure on european powers attempted to deal -- attempting to deal with fallout from the gulf. i ran says it will agree on the andt in the coming hours may raise enrichment beyond the levels that prevents the making of weapons grades materials. 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 selina wang. this is bloomberg. come, thetill to latest market moving. , we ask him why quing his interest. david: and details coming up later. this is bloomberg. ♪ ♪

david: welcome back, you are watching bloomberg markets. the big meeting, the g20 on the weekend. war?ins in a trade the answer is, no one wins. have a look at the projected loss output, not just in the u.s., but in china, if this continues. we could be talking of lost output of $1.2 trillion over

these next two to three years. rishaad: let's look at this one showing how much gdp of various countries is exposed to the u.s.-china trade war. china, 3.9%.ect percentages of overall gdp. having said that, they do have a multiplier effect. they can spread because a loss of about 4% of the entire gdp is large and can ultimately end up becoming a much bigger slice. sign becauseing you do not really know. a lot of supply chains are to oo divorced. stephen engle is in osaka within a guest to talk about the potential of a trade deal or

not. stephen: some of the numbers you were talking about really show this is not just a bilateral issue between china and the united states. it will affect the whole economy. if the $.25 extra tariffs of additional products less the resulting market turmoil that would result would take off one point $2 trillion off the global economy by 2020. i would like to bring in yorizumi watanabe, former trade negotiator from the japan foreign ministry and also kansai university of international studies. thanks so much for joining us. the japanese u.s. trade issues probably off to the sidelines a bit because there will be an election coming up. right now the main emphasis is on china-u.s. and the face-to-face meeting we will get on saturday. how optimistic are you we will

be able to find a path forward here at g20? yorizumi: i am cautiously optimistic about the results of these bilateral talks between mr. xi jinping and mr. trump. what is behind that optimism? yorizumi: the business community of the world is very much escalation ofis trade war's and even the u.s. business community, when there was a public hearing in washington dc, more than half of the members who have been invited to this hearing, they express their concerns about this trade war. half of northern american enterprise firms, asia, theyn east also expressed their concerns.

says ihen donald trump will go with plan b because the u.s. economy is going well, i seem to be getting support i need for reelection. we will slap on these additional tariffs. they might not be 25%, they might be 10%, but we will go into round four or whatever it is. will be the impact on the global economy and japan? yorizumi: japan is preoccupied with development because the aree escalation of tariffs adversity affecting the existing value chain or production network. it is devastating to the existing value chain. japanese companies are very actively involved. appeasement be some taking place in the bilateral talks. our prime minister is very much

twovated to mediate between leaders and he will meet mr. xi jinping sometime tonight and mr. trump also meet mr. abe. i hope the japanese prime minister as a host will work well between the two superpowers. with theh -- stephen: negotiations, there are threats on japan again. have said japan is not particularly interested in a free-trade agreement with the u.s.. why is that so? this --: the logic is what we have agreed upon was the bilateral u.s.-japan

[indiscernible] we have the deal already done. in order to capture the dynamism theoutheast asia, i think bilateral cannot grasp or capture all the dynamism. together withtes japan, both countries need a more dynamic structure, which is not the bilateral deal. stephen: trump is not going to sign back in to tpp. yorizumi: if the u.s. stays back from that, what happened to humility? they are lagging behind in terms of their market assets. stephen: you think he could be coaxed back into tpp? yorizumi: not necessarily the transpacific, may be trump pacific. [laughter] tpp-likebe possible

agreement. stephen: as long as it is his initiative, not obama's? yorizumi: exactly. stephen: a story this week said donald trump mold scrapping or revising the u.s.-japan security arrangement that has been around since the end of world war ii. how destabilizing on a security front end economically -- the last 60 years that framework of the u.s. protecting japan has protected the prosperity of east asia. yorizumi: mr. trump been mentioning that thing already several times and we have to take them quite seriously and really think about what thoughts he has in his mind. at the same time, we like to remind the united states that japan has played a very important role on the security front. 1985 saidminister in

unthinkable.is role is been playing that withe military determines military forces. stephen: what is your outlook? could the election backfire on shinzo abe? he does not get the mandate or added support he is seeking? he might postpone it in october, or is that a foregone conclusion? affordi: we cannot anymore prolonging or delaying the rise of a consumption tax anymore. we will raise it in order to keep the budgetary discipline. i am sure he is determined to go ahead with this. stephen: professor, thank you for your time today.

we can find the path forward at g20. yorizumi: indeed. stephen: thank you. back to you. we are here all day previewing the g20, the critical juncture of g20 and the trade negotiations and talks between china and the u.s.. we will bring it to you live all this weekend. back to you. david: absolutely. they will be there all the weekend we bring you the latest as the world awaits this date between president trump and president xi. we will have daily in-depth coverage from osaka. a market update to tell you about. have a look at our bloomberg chart. proof.calling it 1000 that would be 500% alcohol. [laughter] david: 1000 renminbi. nominal figure. as you can see we are pulling back just to show you how that

looks. we are actually zooming -- pulling back from this level after crossing above. speaking of movers, lots more coming up, especially those in the japanese market. stay with us. this is bloomberg. ♪ this is bloomberg. ♪

david: welcome back. you're are watching bloomberg markets. blackstone, let's start there, said to close on more than $12 billion for infrastructure funding. we are told it will be finalized in the coming weeks. it will be blocked to new investors until a certain amount is deployed. investors have publicly expressed confidence that blackstone infrastructure partners will reach $40 billion over the longer-term. rishaad: bitcoin surging,

topping $13,000 for the first time since last year, bringing its weekly gains to almost 40%. it has climbed by more than 200% leaving traders wondering if this rally has more staying power than 2017, which ended with a wipeout. david: speaking of jumping, japan display surging on reports it is set for $100 million of investment from apple. they say apple will make the money available through china's harvest group. it said it will support the ailing screen maker, which lost money for five straight years. apple accounted for almost 2/3 of the company's sales last year. rishaad: let's look at japanese workers in japan. 18%, a position that is decreasing lcd orders from china. what you can call the ailing

japan display. 7-eleven, of packaging partially composed of plant-based plastics. probably good for business, impact on the environment less clear. 6.2%.een, that is up by this is micron in the u.s., leading third-quarter sales and estimates. it resumes some shipments through a backdoor, legally speaking, to huawei technologies. micron's news -- u.s. chip stocks higher in the extended session. 6.3% gain. some of the biggest winners on the nikkei are related to those semiconductor issues. want to get quickly to the overall positions. yen continuing to weaken.

good gains for the nikkei, 0.8% higher. the topics, 0.9%. the lunch break in tokyo is upon us. ♪ >> it is 12:29 in sydney.

first word headlines. the white house has released details of president trump's schedule of the g20. saturday he will have a working breakfast with the saudi prince mohammed. after the murder of jamaal ishaqi last year, then he moves on to a high-stakes meeting with president xi jinping with trade talks at the top of the list. of huawei, despite

its inclusion on a trump administration blacklist. when companiess are based in the u.s., they may use subsidiaries to classify tech as foreign. less than 25% originates in america, it may not be covered by the ban under current rules. conservative front runner boris johnson seems to be softening his no deal brexit stance, saying there is a million to one chance it will be a chaotic split. does not see a no deal as an end results, but that it is important to be prepared. leave inlanned to october with or without a deal. rallieds of protesters in hong kong wednesday night, keeping up the pressure on the government ahead of the g20 summit. activists delivered appeals to the consulate asking for backing to with draw the controversial extradition bill. carrie lam has shelved the idea

but has not formally abandoned the plan. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. i am selina wang, this is bloomberg. just a big mover here in china against the backdrop of dawning information is one of five companies blacklisted by the u.s. as you can see we are down to 10%, bottom left is the price change their. one of the five companies blacklisted by the u.s. investor along, are moving currency space is mixed. u.s., backing up in the six to seven basis points in australia, backing up by eight

right now. more risk on. light. are quite we are wrapping up the first half of the year, putting together your four major asset classes. index, white, bloomberg blue. commodities are a lover the place, the yellow line is because of gold and oil. treasuries, the purple line is giving steady returns accelerated in may. a lot will depend on what happens for the weekend. rishaad: the g20. let's talk about that. you probably found the white line the most interesting with equities. things coming back a little bit. what is the market at the moment pricing in? that is key here. is it getting ahead of itself?

ago there were zero expectations of anything good happening. 25%more recent period it is , some positive news happening. i mean on trade. different things, one is on trade and the other is on technology, specifically semiconductor technology. three, what we saw last friday with the expanding lease 25 new chinese companies is really concerning that we have two different issues. david: what doesn't change after the g20? to semiconductor continues be a problem, is a south korea you do not touch until it

resolves itself? what other market is in the firing line? we had someld say background on the semiconductor where we see the price falling in the memory chips. you have adding pressure coming from the u.s. export control policy. i do not think even if we are seeing some kind of agreement on more substantive technology issue, it is going to be a signal for the sector. on youraid that, question of what is priced in, it is interesting, you have one market in asia, the taiwan stock seeinge in which we are some bad news starting to price.

the good news is not really priced. this is something we see by looking at the option. news is beingbad price then? and what is the good news not being priced in? frank: i think what is being aree then is the tariffs going to remain in place. the new batch of tariffs being implemented is something that might not be priced in. that would have negative impact if it is happening. you can around that have some variation. you could have instead of 25%, you could have 10%. or you could have one part of the 300 billion of product not

which will, the one be the most painful for the u.s. economy. this is a possibility. david: the last time we spoke was the day before donald trump re-escalated things. you were constructive on chinese stocks. we are back at the same level roughly. worsee economy is in condition. are you still constructive? frank: yes, there is one stand we have, we decided to be at the epicenter, and to keep the other weight positioned on chinese equities. the reason for that, we look at , chinesengs cycle earnings are outperforming the rest of asia. even if you take into account you will have some further downside coming from the trade

war. we are confident we will have something between a percent and 10% in earnings this year. -- 8% and 10% in earnings this year. that is not some thing see in other markets in asia. rishaad: you mentioned earnings, the thing is what are you expecting? what will you see in the forward guidance? and other jitters about this particular set of numbers. frank: we have the u.s. number coming soon. the expectation is low. 2.6% for the quarter. that is something that is easy to beat. of thed be a repeat first quarter with low expectations. the earnings were not great but

better than that the expectation. there is upside with that. back as always, we appreciate your insight. frank benzimra, head asia equity strategy, societe generale. scoop,up, this bloomberg ties between huawei personnel and the chinese military. this is bloomberg. ♪

rishaad: you are back here with "bloomberg markets." worth $800nd million, shrugging off concerns about the effect of the trade war on earnings. as -- triple b,

s&p. shares plunged about 30%, one of the worst performers on that msci chinese index. david: if you spend a too the much time on youtube, you will like this that lets users override recommends. users can tell youtube to stop suggesting content from a specific channel, the platform had been criticized for not taking action on misleading videos because it was too focused on increasing viewer time. inhaad: plunging the most sales, the division slow down until the recent acquisition brought in last then than anticipated. 60% increase from a year ago. the internet of things division was down $11 million in the previous quarter shares.

let's talk about this bloomberg scoop on huawei. we have learned several employees have collaborated on thearch projects with chinese armed forces. a bloomberg news investigation seemed to indicate closer ties to the military than been acknowledged. rishaad: we have all the details. what is the story here? tom: about 10 employees of researchve engaged in projects with the chinese military. this is something that is notable because of the scrutiny is under globally about allegations it has a relationship too close between the government and the military. huawei executives have said we do not have close ties. they have downplayed any collaboration whatsoever between themselves and the military. it be a surprise

that they do business with the chinese military? i imagine this happens not just in china. tom: all around the world, it is not a surprise. they are a big company. what makes it notable is this is a company in the crosshairs of the u.s. government which has embarked on a concentrated global effort to shut huawei out of not only the u.s. but encouraging u.s. allies across europe to also shun huawei, saying it represents a national security threat. it can create backdoors that would allow the chinese government to spy on sensitive communications over your telecommunications network. that is where we want to find any insight we can into whether u.s. allegations, if there is any merit to them. the u.s. has not been forthcoming with a ton of hasence in ways that huawei

created backdoors, or does represent a national security threat. we have had instances where they have been accused of ip theft or violating the trade embargo with which is why the cfo is in house arrest in vancouver. we have not had a lot of hard created, how have they -- have they created backdoors? have they given china's government insight into sensitive medications? that may be happening and they are not willing to share that with us. to look of there are ways of collaboration, are their research agreements happening between employees of huawei and the chinese government or military? huawei is quick to tell us these are employees acting on their own, it is not huawei research. but what is interesting is name is very prominent

on the research paper. ofhaad: it is a smack hypocrisy in some ways. we look at companies like at&t who works closely with the u.s. government. other telecom companies work with the military. why shouldn't huawei? tom: to be clear, there have been instances where china's government has raised concerns about whether working with the u.s. and the u.s. company could be a national security threat for china. there are some companies that do well in china. there are other companies that do not do well or do not have the freedom to operate in china. -- we do not have any indication in terms of the research that we have uncovered that it represents anything sensitive. is possible there are

projects that are top-secret that we do not have insight into. we spoke to one academic who told us that some of the research they are doing analyzing online emotions, he called it not particularly cutting edge. some of it might be routine and straightforward. we thought it would be useful to point out instances where there has been collaboration for a company that has gone to great lengths to say there is no cooperation, or there is minimal cooperation. rishaad: thank you very much, tom giles with the latest on this bloomberg scoop. executiveswei working with the people's liberation army. the 737 maxng about unveiling a new safety risk on related to the two fatal crashes. the plane needs to make additional design changes. david: our asian business

reporter gives us the latest. tell us what those changes are. it is not entirely clear what has been discovered. what we know is that faa is max,tigating the 737 and simulator tests have uncovered a new potential safety risk. it is not related to the two crashes that grounded the flight since march. all the same, it is an issue .hat could produce a dive it is a dive that proved difficult to recover in simulators. this is a new safety risk. the faa has ordered boeing to address this, and boeing has said they will do that. it is the worst news for boeing at this time. angus, the pressure has

already been piled on the company with that grounding. a lack of clarity when the plane will take to the skies again. this was a fault in the simulator. what about the window for this plane to get its airworthiness certification back. does this lincoln that? it is a good question, and i do not think we have clarity yet. , the u.s. regulator and boeing are not being transparent about the extent of the safety issue, or exactly what it is. there are statements and boeing is filing today that shed very little light on what this was. knowing called it a specific condition of flight. the faa called it a potential risk that boeing had to

mitigate. they are not being transparent about the risks. our reporting showed it was an issue with the horizontal stabilizer. that controls the pitch of the aircraft, puts the nose up or down. the simulator showed it can be commanding the nose down without pilot control. that is an incredibly serious issue if you are a pilot. discover of the safety risk has done nothing to alleviate concerns among the flying public . what it does to the timeline to get the plane back in the air, boeing is aiming for an end of summer timeline. around september, that is what the airlines are gearing for as well. david: thank you so much, angus whitley. the latest snag on the 737 aircraft. a quick check market wise, when

whatook at the big four, is missing here? thailand opens later on. we will talk about the strength of the currency. we are tilting more risk on across the region. this sets us up for the india open in about an hour from now. we have a preview of what that might look like. of, --wants to take note one nuance to take note of, this could lead to price action. a bit more alive than usual. >> it would be, and you would expect it to gradually pick up in the last half, particularly when you see the close-out of these contracts. the stronger footing, you anticipate the same

for the market open as well. days have not been bad, we have gained some weight and that is a good sign. support coming in from the flashes of green everywhere across the board. broader market space is not all that bad. in yesterday's session, it could increase in today's session. you.ad: thank coming up, i were reporters going chart to chart, competing. it is battle of the charts, next. this is bloomberg. ♪

david: welcome back. rishaad: it is time for battle of the charts. saly, they will pick the best charts against each other. rishaad: gtb go is the destination if you want to look at the charts we are featuring. let's kick things off with david. it is a bit ominous that

juliette saly is in the main studio. lookquity indices, if you youhe dow jones index, if believe the dow jones theory, you will notice historically the , andones index will track there is logic to that. it underlines strength in the economy goods being shipped from a to b. the index seeks a record high, the transportation index has not confirmed that out all. it has not even breached its april high in june. the divergence is picking up. on the core level there could be problems in the economy. we know global demand is diminishing. president trump agreed to not impose more tariffs.

will weigh even more. the transportation index is implying that moving forward there could be problems for the dow jones index in the may selloffs. a truck we have class inventories at a levels we have not seen since 2015. juliette saly, what is your offering? juliette: i feel like we are talking a lot about bitcoin and gold, and how much they are rising. you cannot eat bitcoin or gold. you can eat cocoa, and it is rising sharply. the cocoa contract futures up for a fifth straight monthly gain, the longest streak since 2014. hana is the -- g second-largest producer. they raised their -- and analysts we spoke to in chicago

reckons it will become bigger buyers of cocoa because technicals are improving and fundamentals that positive. a little bit of chocolate to sweeten the battle of the charts. sorry, it is not enough for me, i am giving it to david. very unique. rishaad: i also go for david. it is a bit worrying that the transportation index is falling. what is happening with those class a t-rex, showing how things are slowing down. go for the recent charts we have been featuring. this is bloomberg. ♪

emily: i am emily chang in san francisco. this is "bloomberg technology." coming up, president trump says the u.s. should sue google and facebook. this, as executives are grilled on capitol hill. it is ahead of the first democratic presidential debate. plus, a legal loophole. american companies finding a workaround on the u.s. ban on huawei. will it last?