i believe we still have the finance secretary, paul chan, he has been talking to the legislative council in outlining the damage to the economy. as last line coming out is the damage from the unrest is the equivalent of 2% of gdp. if you base it on world bank numbers as of last year, $368 billion economy. that is about $7.25 billion more. rishaad: looking at that and looking at the recession respectively in place. obviously put in place. having a look at the hang seng in the green. once again markets. just seeing what is happening. looking like a muted start. did not getting the tailwinds. thes&p 500 their moving to downside by about 4/10 of 1%.

the dow had a close thanksgiving low-volume trading day. shanghai on the way up. 6/10 of 1% of the hang seng just .till 500 points at the moment there below that psychological importance. let's move along and have a look at some of the other aspect classes that are in play. taking a look at that taisha in number that came out a short while ago. that has affected bond prices that we see. 10 year yields moving to the upside. three basis points. this is relatively unchanged. seven rmb three. crude oil, 1.5% up. this is being reversed partly by opecs oil minister saying could be taking place in vienna this week. we could see a deep cut. a cut of 400,000 barrels a day. that means the oil barrels have gone into the action. this is suggesting we have gone

through a key level. as a result we are seeing more movement in the downside. true .8% down. -- 3.8% down. in theh price action gold. certainly, there is little risk -- there is risk appetite will we thought there would not be much risk appetite. let's look at what's going on. first word news right here with rosalind chin. osalind: one month after being unanimous -- unanimously elected. japan's minister of finance and a special advisor to prime minister shinzo abe. he will be the 10th president and take over from the fellow japanese official. kong financial secretary paul chan says he expects the government to record its first annual deficit in 15 years. as october retail sales do show "enormous decline." that as a number of visitors

from china decline amid clashes from police and protesters. teargas and violence but again as thousands of people marched in the busy tourist district of tsp. trump will not accept an invitation to testify his impeachment hearings this week, but he left open the possibility he may be represented in the future. they subjectively called for them on wednesday, criticizing the panel for demanding before any witnesses have been named. he added that the hearing was scheduled by the president is at the nato summit in london. paste theson will conservative party is a champion of law and order. the attacker happen has cost the shadow over the election campaign and hasbro security into the spotlight as a debate topic. the prime minister says he is determined to tighten the law and blame his opponents of previous legislative mistakes. said in the last three or four months is that i think the whole system of

automatic early release, which is brought in, it was under that -- i have only been in office for 103 days. roslyn: the german government thesis crisis after electing a new leader. her own choice with the social democrats was soundly defeated by two politicians seen as fierce critics of the christian led government. they have no intention of toppling merkel, the many issues that the chancellor may find it hard to accept. dozens of people were injured in the southern iraq he city. at local and government levels, as well as poor services and a lack of jobs. the crashes came as the iraqi parliament approved the resignation of the prime minister after two months of antigovernment anger. more than 400 people have died since the protest began in october. onbal news, 24 hours a day,

and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am rosalind chin, this is bloomberg. rishaad: some signs of optimism, even as aging in washington continued their trade talks. last hour, the manufacturing pmi came in at the highest levels on record of this particular series. 51.8 was the figure. in the -- david: meantime, you have the official numbers over 50, indicating an expansion in terms of the outlook and improving when it comes to the data. rishaad: our chief asia economic correspondent is with us right now. mean?o these numbers enda: i don't think we are here yet. it does make a positive headline. after months of damning news,

the pmi is now headed in the right direction. i guess the reason to pause is that there is some seasonal affect behind it. exporters in and the key holiday shopping season, holidayad the chinese in october. those are reasons not to get too excited about this number. what we saw in china's pmi has also spilled over to the rest of the region and has been a pump -- a bump. south japan and taiwan. it is certainly a positive take. signednot yet seeing any -- signs of a sustained rebound. david: does that mean less monetary and fiscal? enda: they don't want to roll out extra stimulus in china. they are trying to push an approach and we have had more commentary from the pboc. he is not very interested in a rock-bottom or zero, negative interest rates either, the question would be, how much would he have to do.

there is this big important policy meeting in december. that will decide china's policy in your head on the economic side. the rest of the region is starting to dig in their pockets. what theeen japan fiscal stimulus. south korea with the fiscal stimulus. even central banks are on something of a pause after doing a lot of work over the past year. if you are a business person right now, national authorities probably have more room for the economy than we do. it certainly helps, but that is coming from a low base. is expectingt growth to stabilize. let's bring in the head of asset allocation, he joins us out of singapore. evan, good morning. >> good morning, thank you for having me that. david: is this a game changer for you? i would say it is just

further confirmation of a turn in the global manufacturing cycle. have been waiting to see some stabilization. we have gotten that stabilization, now we are beginning to see an inflection higher. yes you can point to some of it as some seasonal effects that are artificially flattering the numbers a bit. but it is better to be pointing higher and inflicting higher than the opposite. we have spent almost two years of a downtrend. now we are inflicting higher. let's take it for what it is, which is some improvement and is showing some resilience in the global economy. would you say that this is also reflective of what's used to, we are getting the uncertainty out there, which has been thrown up by the likes of any trade deal at the moment? that iss, i think really a great point, which is that, if you had said two years tariffs we would expect

on nearly every chinese good or import into the united states, most people would have said, that is definitely going to send us into a global recession. as awhat we have seen global economic slowdown, but not a recession. we have seen global corporate's or storm, at gap. we have seen developed economy andr markets hang in there consumption holds up just fine. and corporations as a whole are dealing with it. if anything, i think this speaks to some underlying resilience in the global economy. also the adaptability of somerations to geopolitical uncertainty. to your point, the markets and corporations are getting more comfortable with the uncertainty, which is not going to disappear anytime soon. this, i would imagine giving what you just mentioned, for this to be a case of small

equities. if you are not already, you like european equities. is this simple or more nuanced? evan: it is both. in general, europe as an index is a little bit more cyclical, a little bit more manufacturing, but i think in general, within cheap thatue is so even if you get just some improvement in the global economy, the european value sectors and cyclicals are really going to pick up. within that, banks are a little bit more cautious. we still think negative interest rates are not going anywhere anytime soon. that is going to remain a headwind. but more broadly, we think that europe's economy and small caps in particular can pick up with the improving economic outlook. that call are ready

also assume that the germans will be spending more? what is the offset that you guys are assuming for next year? we have a little bit of stimulus coming from germany. there is some tinkering on the margins year. think the news over the weekend was -- the headlines are 'smerkel is in crisis, germany political setup is in crisis. really we do this in a positive way and that it seems the first moretowards eventually aggressive fiscal stimulus coming out of germany. the coalition partner, the spd, they are demanding merkel to spend more to review the blacks zero budget to be acting more on the green fiscal stimulus and trying to address climate change. it is only a matter of time before you get more german

fiscal stimulus. maybe given the political pressures, it happen sooner than we think. we are not betting on a huge increase in german fiscal spending, but it definitely provides an upside risk to our more upbeat outlook on the global economy in europe as a whole. on the one hand, let's look at the positives of the numbers. that supports and narratives, the green shoots narrative, which has also been nurtured by the surprises by u.s. gdp. also global goods. as we look in the negative: here as well. rollbacks tariff being introduced. maybe they won't be rolling back to december 15 tariff hike. it with hardput firm purchased target. german political problems here, brexit again. how do you actually balance all of these looking ahead?

it is never easy in the markets. for i would say is that equities to go up or assets to go up there always has to be a wall of worry. the markets will climb that wall of worry. there always be these risks in the background. we have to calibrate how significant and meaningful are those risks, and what is the probability of their taking effect? in general, on the risks you mentioned, we see the glass is half full. we actually think the larger that these phase one trade talks between the u.s. and china go on , the higher probability that you are actually going to get the more meaningful tariff rollback. the fact they you have continued to see u.s. and china negotiate, even with the president signing this hong kong pro-democracy act , is a positive signal.

brexit, it remains an ongoing story, but i think it looks very much as if the tories and boris johnson are going to win the election. fingers crossed we are going to get a resolution before the january 31 deadline, and a deal brexit. there is always going to be these risks, but in general, we try to focus most on, what is the economy doing, what is the data telling us? the data is showing a positive turn. we want to place most of our focus on that. if we don'twise, have those lists, how can we sell six hours of programming in asia? i am kidding. the wordoned calibrate. it is a new decade, low inflation. do investors need to recalibrate their expectations of a realistic annual equity return? what do you think the return

should be? we enter 2020,s we do see this manufacturing coming off a few years of slowdowns. usually those trends are positive for risk assets. cheapaluations are not across pretty much all risk assets. it is hard to expect, especially after a year like 2019 of really impressive returns we cannot expect high double-digit percent returns, or even maybe low double-digit returns. risk will create volatility. we think of global equities, positive returns are reasonable, given the improvement in the economy and more evaluations and where they are right now. get too far ahead of ourselves. rishaad: final question for me,

which is, friday's job data out of the u.s., given the fed's positioning, quite clear positioning, what other noises there out there and do you think it has less significance than it would normally? it matters less to the fed. we don't think the fed is moving anytime soon. the base case is, no hikes until after the 2020 election. the reason being, the fed is undergoing disinflation framework review. powell said in his last press he needs to see a significant move up any sustained and robust move up for them to even think about hiking. we do not see that coming. the fed is going to be -- is not going to be moving anytime soon. the jobs numbers matter less in terms of what the fed will do. just giving people comfort that the economy is still holding up and we are still printing well

over 100,000 jobs a month. we may print close to 200,000 jobs per month with the return of striking auto workers in friday's job print. think the overall messaging from the jobs number is, the economy is hanging in, most important after and any global economy is the u.s. consumer. that is just how it works. ok,u.s. consumer is saying, overall we think the jobs report will send a proceed -- a pretty positive story. david: we will be coming back in a couple of minutes. we are continuing about the unrest in hong kong. these could make or break for business in a city that is after another weekend of protests. rishaad: the next opec strategy in question. it could impose additional theooks and despite reluctance amongst leading members. this is bloomberg. ♪

david: welcome back to the program, we are looking at oil closely. had onas a drop that we friday. iran is signaling that opec and its allies will consider deeper production cuts, totaling about 400,000 barrels a day. thecomments come despite cartel itself indicating reluctance. it is sending oil donna more than two weeks. correction. to evan let's get back brown, who is expecting the agreement to continue. this is what we have, we have the possibility of iraq throwing this curveball into the whole thing here. what do you make of it, and truly they look happy with this? -- with the status quo?

evan: there is always headline ping-pong with different sides posturing and trying to get the opec plus group on their respective sides. we try not to pay too much attention, all we try not to trade so tactically into opec meeting. i think general base case, you should expect a continuation of the current agreement from march 2020 into june, 2020. i think that maybe there is an upside potential there that you .et this further supply cut more important to us when it comes to energy is where the demand is coming from. i am talking about this turn in the global economy and turn cycle, we see it in some risk assets. we certainly see it in u.s.

stocks, but we are not seeing confirmation that and broader commodities. we would like to see not just oil, but base metals. we like to see emerging-market equity show more confirmation of this. so, we are almost focus more on oil once the dust settles in terms of what demand is going to tell us about the global economy as a whole. david: final question, apart -- who knows what we will get a phase one deal. what else would you say would be the best indicator of global equity markets? what are you watching? evan: i think we need to continue to watch these pmi's. we have had some from china. furtherow going to see over the rest of the day, manufacturing pmi coming out around the world. someally want to see inflection in europe.

we have been hearing from china's policymakers that you are not going to see a lot of stimulus from china. there has to be other drivers of the global economy. focal point.ey so where we are looking as those manufacturing pmi's. lot. will tell us a first news on that front is good. little but continues over the rest of the day. you for joining us. that is evan brown. if you want to watch that interview or any other interviews we have been conducting, you can watch us live or delve into any of the securities and functions that we do. you can also become part of the chat. send instant messages during our programming. this is for bloomberg subscribers only. have a look at it at tv . this is bloomberg. ♪

rishaad: let's have a look at some of these companies making gains. having a look at the msci asia-pacific index. we are moving to the upside with the regards of having a look at farmer stocks continuing their weeks. farmer -- pharma stocks. that are all companies moving with stories continuing to make waves across that particular industry group. rice is cut and china. that would result in margin erosion and profitability as well. looking also at some of the other companies that are making ways. biochemicals up a .1%. the biggest winner there on the msci asia-pacific index. upgrade. an it is a recommendation for the stock. pointed out, you

have nine out of the 10 groups up, led by health care. for the most part the equity stories are on the way up. as we head into the tokyo lunch break. this is bloomberg. ♪

>> hong kong and shanghai. that it reiterating wants tarriff laws back before a new trade deal can be achieved. it says that u.s. interference andhina's internal affairs the applying a pressure could threaten any trade agreements. more is giving the banks reserve rates this week to add to the fiscal stimulus already in the works.

-- the first time that it has .een below 5% since 2013 has beenoil strategy upset by one member deviating from the initial plan. stepped -- iraq stepped away despite officials previously stating it would balance the market. to address the continued speculation that china itmeddling in its affairs will draw on support from the federal police, national crime database and international crime

>> this revenue was down 18% in 2018. there are a host of reasons for the decline including the trade war, the chinese slowdown and the weakening yuan. bloomberg news on air and at tictoc on twitter. this is bloomberg. hong kong projecting their first deficit in 15 years. the recent damage from the ongoing protests. what is paul chan saying? david was saying we are looking at a 2% -- two percentage point

drop back in gdp. is a government coffer that has been -- paul chan is giving some meat on ,he bones of the problems here reiterating that this economy will fall into recession for the .ull year .e will reveal his retail numbers coming out today expected to be down 21% year on year. it is almost got worse every single month since the violence in this protest movement began.

august was a bad month. tourist arrivals from japan have been down. mainland chinese visitors are the biggest demographic of foreign spending. 49.9%.umbers are down mentioned toat you the economy equivalent to two percentage points of gdp, 7 billion u.s. dollars. >> i was in singapore over the weekend and the question i kept getting is when to the protests end? >> your guess is as good as mine. i went to the states for 10 days and i thought things are coming down.

resumed the protests. maybe they are bold and by the election victory, or by trump signing the human rights and democracy act. maybe they are ticked off because carrie lam has not given .ny new concessions bricks came back out, the teargas came back out. police and protesters marching through the main area. that's not something the hong kong tourism board likes to see. boy -- david: we are joined by gary to talk about the advantage to the economy.

>> we already have two pauses or contractions at this time. we have six quarters of contractions in the 1997 asian militia crisis. we have already had two. .e may hope rishaad: take a look at the data. the point being that this is a structural shift. , buts never cyclical structurally, it has changed. some of it may never come back. >> i think we are not that

pessimistic. we are seeing a big decline, but that is mostly driven by the .ecent incident we believe that after everything is settled, in a few months time everything can go back to normal .retty soon we have seen the decline not just over the past few months. we have seen it in the first quarter of 2018. that was driven by the depreciating markets and the r&b. that is added to the fiscal decline we have seen for more than a year. ,opefully if things get settled i'm confident we

will get back on track. david: if things settle down. how long will it last? inwe hope it will finish four quarters. >> two more of contraction? probably. it really depends on how long the social incident will last. you can't tell how long it will take, and how bad you can go forward. generally speaking, once everything is settled, i'm quite sure we will be back to normal soon. rishaad: some say they have done very little in terms of relief.

they could be doing more. reliefe expect more tax at the upcoming budget speech in february. to lacs onite room the impact side. on top of the tax relief, i think there would be a limit that the government can do. what they can do in the market is quite suspicious. you cannot do a lot for the market. in terms of tax relief, and the

areerty market side, they mainly focused on the smd. support to add a lot of to reduce the fees. anything beyond would take some time to implement. david: i want to talk about macau. be indications say this will the for the -- the worst year since 2016. how much of what is happening has to do with what is happening in hong kong? gary: it is quite obvious. of tourists going to macau slowed quite significantly since august. saw double digits before that and it dropped to low single

digits in the recent months. that's quite obviously affected by the political situation in hong kong. we also expect the macau economy to retract into next year. mentioned, china has the part to play. they have an obvious slow down. that's going to affect the gaming business. question.uite a big seems the doort the cozy area of retail spheres on the property sides, do you see any recognition on the part of authorities that they need to do something about that? to try to break this coziness that people have with the upper echelons of society?

as you mentioned, it is more a political issue. on the economic side there are very little things that the government can do. the economy is not only affected by the local economic situation but by the trade conflict and the global slowdown. on the one hand you can try to than tax relief, but other that there is little to do because hong kong is a that hasaire economy little to do to resolve the current situation. david: it is a model that works when things are good. a very brief check of where you are, session highs in asia. to a lesser extent, msci even as

well. you have an equity market which is a good story. dollar-yen.the that pair going back to may of this year. rishaad: taking the wheel with nissan and a rocky road ahead. bloomberg.

rishaad: you are back with midnight markets. i am rishaad salamat it. news conference coming later on monday.

david: let's bring in our bloomberg business editor. we know who was selected. what does that tell us? >> it tells us they are very interested in the three-company alliance and building that out. on the greater emphasis group leadership. carlos gomez came in at an point. crisis at this point they are looking for stability. they picked a leader within the company and someone who has a quietlyon for working

to make things happen. egypt andome time in grew up around the world and spent time studying egyptology. his profile is that of someone who is going to take a quieter role. do,aad: he has got a lot to has nt? considering sales are falling as much as they have been, he has this fractious alliance as well. these are things he has to get right. >> his to do list is very long. in addition to turning around the carmaker's fortunes in the market, there is a long list of issues. the board will be deciding on the dividend.

it's very important for the alliance. ceo as ofhe role of today but he won't be on the february,ally until and they will be making before then without him. they have announced they will be laying off 5000 people. complex toibly execute that kind of layoff. , over the weekend there were reports that the company has got together to do it over the weekend. david: well done.

let's get a look at the business flash headlines. they have been taking the reins here. both quitd chairman --er reports of double down on criticism saying he earned his criticism. reports themany best holiday season yet for its switch console. selling 65 million units of software in the current quarter. delivering most of nintendo's profits. they may surge 23%. singapore's investment company is in talks to invest

wonder $20 million in the startup cure fit. range of a wide workout programs at the gym or at home as well as a healthy delivery service. are seekingays they a valuation of 800 million u.s. dollars. rishaad: we are 55 minutes away from the open in india. how is it all looking? the weak skills which happened on friday -- both of them ended in the green. move we will be seeing could continue. coming down to the important factors to watch.

whether the is market is already digested below .dp it's important to watch for unusual pockets of interest. banks continue to remain in focus and whether or not they can recover money back is something to watch out for. david: thank you for that set up. our reporters going chart to chart competing for david's vote. battle of the chart is on its way next. ♪

david: it's time for the monday edition of battle of the charts. andrea is in sydney up against joanna in singapore. can accessewers their charts on the bloomberg by running that function. we will kick things off with andrea. >> my chart shows the australian

dollar. the spread between u.s. two-year -- as thatstralia spread has widened, the australian dollar has been falling. that pressure on the currency is likely to continue into 2020. that will be on the table for next year instead of what was widely expected. 0.25% is the level at which quantitative easing becomes an option. that has money managers moving to adjust pricing next year sending bond yields tumbling. the u.s. is likely to hold firm

as they take a more wait and see approach. today, and underscored the australian economy. we don't expect any change tomorrow. is likely to be very important. david: good stuff. are like20 outlooks christmas decorations coming out earlier and earlier every year but one of the things we are seeing is that people think europe is going to outperform next year. european valuations are pretty low. next year as the economy turns around and improves and does well generally. consensus point

at this time next year. goldman sachs pointed out recently that after the u.s. elections, the valuations tend to rise. going back before the election and hesitating because of the uncertainty but afterward tend to do better. if you're in the mood you can go with the u.s. for evaluation exemption. them: the choice between depends on the choice that you look at. joanna, that is the next year's story. very close. i'll have to give it to -- rishaad: say who came second.

i'm looking short-term. david: thank you very much indeed. let's have a look at the hang seng and what's going on. positivityy got some now even though the hang seng is off the highs of the day. potentially have a risk on the table mood for financial markets here. better than expected reading. perhaps some are taking that as evidence that the global economy is turning a corner. japanese stocks have their morning session up as well. let's take a look at the peak in hong kong.

everyone uses their phone differently.

that's why xfinity mobile lets you design your own data. you can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. all with millions of secure wifi hotspots and the best lte everywhere else. it's a different kind of wireless network, designed to save you money. switch and save up to $400 a year. and now get $250 off google pixel 4 during xfinity mobile beyond black friday. that's simple. easy. awesome. click, call or visit a store today.

>> it is all most 11:00 here in singapore. i'm juliette saly. rishaad: we had to the last hour of the morning session. returning to hong kong after a week of relative calm. the economy is getting hammered. retail sales are collapsing and gdp will be taking a big hit. >> china's factory outlook brightens. ratings show the first expansion since april. >> india giving the reserve bank more reasons to cut rates and fiscal stimulus is already in the works.

>> the first trading day of the new month. the final month of 2019 and it is a positive one. the nikkei is really leading these as we see the yen hold at a six month low. still at aydney are record. let's have a look at some of those move. this week it has been the japanese yen lower against the dollar. the korean won is higher. a 12 month contraction in terms of exports. wellw consumer prices as offering little wrist bite to the bank of korea.

watching what's happening the new zealand bond market because we heard commentary from the treasury market saying growth is likely to be below their budget. these's take a look at indian futures. the negative story merger on friday. that was in the run-up to growth numbers which were meant to shock. futures are down again this morning. we did manage to end the last three trading days. the rupee at the moment is stable but it is losing a bit of ground. yields here at 6.46%. this is probably factoring in another rate cut from the central bank. .oreign a half percent growth

the first time we have seen sub 5% growth for the indian economy since 2013. 43 minutes away from the start of the session. let's find out what else is happening out there. >> china reiterating that it once tariffs rolled back before any trade deal can be found. the paper says that u.s. interference into china's internal affairs and the applying of pressure to buy american commodities could threaten a trade agreement. strategies are set with one generally agreed plan. to be considering deeper curbs on productions despite indicating last week that current levels are sufficient to balance the market.

reports from japan say that the government is putting together a fiscal stimulus package that could be worth more than $90 billion. officials will discuss the plan with the ruling m.v.p. this week. the expected stimulus has risen in spite of slowing global growth and a spate of natural disasters. will paper the conservative party as the champion of law and order this week after the terror attack which killed two people. they have thrust security into the spotlight as they debate -- said in the last three or four months is that this whole system of automatic early release was brought in by the labour party.

>> you can't keep people safe on the cheap. for too long our country ask about leaders have made the wrong calls on our security. kim of the panelists in more than one under 20 countries. i'm rosalind chin and this is bloomberg. rishaad: the latest data out of china showing hope for the country escobar recovery. the msci rose by 50 for the first time since april. let's find out. i asked you this question an hour ago. if anything has changed in your analysis of it, are we turning the corner?

those viewers not watching -- we are getting official with the private sector pmi headed to the private sector. meant to be a difficult time of year anyway. there is also the effect that october had a big holiday which naturally gives november a bit of a bump. the one takeaway is that it has been over the rest of the region. thailand holds steady. they are still in contractor he territory. it means he could be spending -- spreading to the rest of the region too. how the government might view some of these figures? soft. stories remain

soft, evenill very other is a bit of an uptick. the story around the rest of the region remains quite subdued. if you are a central bank or a fiscal authority you are going to be looking to get more support in 2020. we know that they talked about a big fiscal stimulus program. obviously they are preaching a distant message. he's made the same point again and again, he doesn't want to do qe, but how long can they hold that? we have a big policy meeting there. we come back to the trades negotiations.

back to where we started a few months ago. kim of chief asia economics correspondent. let's get our guests thoughts as well. china is changing away from credit growth toward rate cuts. joins me here in singapore. i went to turn back one of your own charts on you. global pmigan's index has shown is that you are seeing signs that the treasury markets are obliging. do you see more optimism here? >> going into 2020 the dynamics start to change in a more significant way. the u.s. economy has been the

primary driver of global growth for the past four or five years. outink you rightly pointed the most important statistic which is that context matters. the pmi is coming off of lows we have not seen since 2009. it has turned positive for the first time in 18 months. we are arguing that investors need long markets. this u.s.-china trade and we are no closer to any kind of phase one china deal and that is worrying. >> i think that's right. i would take a slight grain of salt that the overall concept is that the world is changing, we are moving into a multipolar environment.

this isn't about trade but a realignment of the way that the global economy works. even if we do get a phase i deal, the argument from our side is that this is a multifaceted strategic conversation that will be ongoing. we don't think the global economy is waiting for us. we are starting to see clear signs of strength. >> you say that even though we saw that -- today out of south korea? >> we are starting to see signs in the tech sector. we are seeing houses in the supply chain. this were talking about hold being more than just a trade conflict in the

bifurcation taking place. in the hegemonic conflict. do you still hold that view? if we look at certain sub segments of the economy it has existed for some time. this concept that you will see global intranet rather than the internet. we've had that in china relative to the u.s.. elements to this conversation are quite old and nothing new. but you start to see that moving far more aggressively into tech standards. it hastext is that existed for the past day and a half. >> how does that inform your investment horizon, and how do you look at it ahead? can we talk to investors a lot about the supply chain realignment. marketseeing growth in

like vietnam. it is very early innings. i think we will be talking about that for the next five to 10 years. as we see these changes to the structure of the economy, it's not necessarily negative. significantide very idiosyncratic investment opportunities where we are seeing these realignments. >> you mention something called factory investing. tell us what that is and how it works for you guys. >> it's a way of describing stocks without talking about the company itself. china mobile as a stock can be defined as the telecom business that it runs were a series of criteria. one of the things we have tried to do is to merge fundamental research to provide an overlay conversation to describe not just the earning profiles.

credibly important in our environment. we are seeing a rotation away from growth toward value. we have seen a multi-standard deviation move over the course of the past couple of months. most investors are still very much underweight value. it's by no means that fundamental flow shift that we would expect to see. the other one would be auto bonds and into equities. >> you also like india and some of the chemical banks as well. >> at the moment it is hard to see the upside from a global perspective particularly from a southeast economy. we are starting to see glowing economic growth where the domestic demand impetus that has driven outperformance for the past couple of years is starting

to wane. we are trying to see a rotation into more expert oriented encyclical driven companies. >> i went to point to the chart in my terminal where we are seeing u.s. and chinese stocks outperforming these broader indexes despite everything going on in the trade space. anthe wonders of being investment professional is that reality sometimes matters less than expectations. one of things we have seen is a dramatic underperformance. particularly in a market like china. platform plays start to come to the fore. to focus away from growth and towards profitability we are seeing some of these companies strategically advantage starting to outperform. sullivan. james

silla had this hour we get the outlook from indian equities with the r.b.i. eskimo potential rate cuts this week. >> the next economic data keeps getting worse from hong kong and macau. .etails are on the way

>> hong kong facing a new challenge saying that the prices and up to about 2% of gdp after a weekend of renewed clashes. that sincele saying he composed his first budget deficit in 15 years. you left and it seemed like it was the same thing to you with that low in between. streetthe angst on the

is back. the pain in the economy has persisted before the last six months. we are seeing it reflected in retail sales. the financial secretary just gave to legislative council were he planed -- painted a gloomy picture reaffirming that for the full year the economy will slip into the recession. andave the ongoing protest the aggravation from the ongoing trade war. he is singing backed to report the first budget deficit in 15 years. this is when -- in an economy that has had a government surplus in quite some time. some are calling for even more but now there will be a deficit. 26,ill reveal on february he expects enormous decline in retail sales and the damage equivalent to two percentage

points of gdp. those retail sales for october we knew would be bad. on friday we had the visitor arrival numbers. rishaad: >> they are not good stop lipstick on. down 21.8 percent is the expectation. >> august is bad. it's still better than august. the numbers from china are down 45.9%. we are calling at the biggest decline on record. i repaying says that there is 70% chance that there will be a wave of retail closures in the retail place -- if those numbers do not get better. because catering companies have the christmas holidays coming,

they have chinese new year coming and are hit hard among other businesses. >> and they are thinking about whether or not the protests will die down. doesn't look like there is any end in sight here. i was getting some fresh air and i thought oh it's getting better. it's not. the streets were erecting again. more tear was used to disperse protesters who gathered. some of this angst had been brewing since late saturday when the groups blocked roads and set fire to the subway entrance. they threw bricks at the police and vandalized shops in the garden. the bus and rail systems are said to review -- normal service today.

this is a bad situation that doesn't seem to have an end in sight. maybe they were emboldened by their district council elections. trump signing the hong kong human rights and democracy act. however carrie lam has not given in yet. you inhen engle thank hong kong there. revenue in macau is headed for its first yearly decline since 27 -- 2016. let's bring in our consumer report for more. what are some of the key drags? >> it has been a challenging year. the key drags we can't even count on one hand. we seen the china and u.s. trade war and the economy growing at 1999.owest pace since regionhan that in the

there are others rising in southeast asia and china cracking down on the activities crunching the junkie's liquidity. seeingseeing the casinos their first decline in three years. rishaad: what are people saying for next year? entering very soon december were macau is celebrating his 20th anniversary. that's the time that present xi .inping might visit the city that's why all of the vips are shying away from the city. that's on going to help gdr toward the end of the year. are seeing a median 3% rise.

it's still a long way from the double-digit jump stop it wouldn't be a very big growth. >> thank you very much indeed for that. more coming up here on bloomberg markets. -- this look at pharmaceutical company is seeing some pressure on it.

>> a quick check of the latest business flash headlines. hsbc is giving its hong kong nextyees an extra week off year, a thanks for what it calls the protest a. apple says that the bank is planning to freeze local executive salaries for the next 12 months and limit staff pay rises to the lowest in two years.

a new leader takes control monday facing a string of challenges with a threat to the company's very existence. carlos -- it's now a decade lows with thousands of jobs being cut. has drawnaramco ipo more than 42 billion dollars from retail investors. about 1.7 times with the government is seeking to raise. institutional investors have until wednesday to buy in, so far the ipo hasn't been involved. time now for the stock of the hour. >> this is the second-biggest

followed on the msci specific index. about 9.1% at one stage. this is all under speculation that beijing will be accelerating the procurement program which is designed to drive down generic growth prices. it's driving down the price of stocks for these pharmaceutical companies as well. this is all down to traders suggesting the government is considering adding dozens to another round of procurement. the current program has already driven down the price of some drugs by over 90%. if you bring down the price of drugs, you erode margins and erode profitability. down 6.8% now.

>> you can look at that on your bloombergs. we are seeing some upside after that better-than-expected manufacturing data in the private and public readings out of china.

>> it is a most 11:30 am in singapore. the first trading day of the new markets. by 0.2%. is up we also have a bloombergs coupon a record m&a. stroke more danes in the sector. the singapore rates have brought more than $59 billion in assets this year. more than four times the rise in the benchmark care. let's get the first word

headlines now. >> the aussie dollar the officialshowed manufacturing pmi above the 50 level for the first time since april. they easily beast -- beat estimates in boosted investor confidence. china would like tariffs rolled back as long -- along with any interim trade deal in the u.s.. the hong kong foreign secretary says he expects the government to record its first annual deficit in 15 years. the economy suffered. the retail sales show enormous decline. that's as the number of visitors from china tumbled. after a week of relative calm.

president trump accepted an invitation to testify at the impeachment hearings this week. he may be represented in the future. demanding a response before anyone has been named. he added that the hearing was scheduled while the president was at the nato summit in london. i said, is the new president of the asian bank. after being unanimously elected to the role. advisor to prime minister abe. dozens of people were injured in clashes in the southern city in iraq. government levels. these clashes came as parliament approved the resignation of the monthsinister after two of anger. more than 400 people have died

since the start of october. 24 hours a day on tictoc and on twitter, more than 120 countries. i am rosalind chin, this is bloomberg. ♪ athaad: let's take a look what is going on market wise. sales which isl meant to be a horror show. looking at double-digit declines as weak. up.nikkei 21% we are seeing gains across the board. are recovering some of the appetite that they had for risk. better-than-expected ratings of chinese manufacturing. read too much

into one month alone and consistent data to the upside here. let's take a look at the indian markets. are 12 minutes away from the start of the session. -- 0.1% of that. 71 rupee. withf this playing out growth coming out and seeing the weakest growth of the economy since the first three months of 2013. that is certainly a subject for our next chap -- chat. , economistsnly is are predicting that could mean another rate cut on thursday. let's bring in our economics reporter. how deep does this slowdown go?

>> pretty deep. if it hadn't been for government spending, the private sector is an absolute dull drum. -- the services sector grew at a much smaller than expected speed. government spending with an impressive 15% year on year. columnists are telling us that the economy would have grown 3%, but of course it doesn't end there. we have data that showed october was a lousy month for the investors sector that comes with the services sector at have actually contracted. it's fair to say that growth in india is struggling to achieve even 6% which is way below the 7% growth we saw a few years ago. is the rba likely to respond?

respondba will have to and fortunately to do the heavy lifting. it's big enough or those grim numbers on friday. there is a school apart that the -- school of thought that the rba could go weaker. to 6.1growth forecasts percent in october, down from 6.9% already. depending on how sharp the thegrade will be this week, mpc might go for a bigger than expected 25 basis points. aggressive monetary easing is closing. that's the medium session for the r.b.i..

kamil we have a bit of positivity on the futures at the moment. there is some thinking they could shove this all off but these numbers are pretty bad even when you go through them. much are the global markets already taking this into account -- account? >> very good question. but the stock market has diverged from these economic numbers. what people are telling us is that the gdp numbers are weak but not shockingly bad. increasingly confident that the worst is probably behind us. some strongy to see inflows into the market. happyrs will be very because the 25 basis points is probably big if not the bigger one. bond markets will be happy with these numbers.

the stock markets are the one to look out for. there are people who are looking at those numbers thinking that the worst is probably over. >> getting the outlook for indian equities. that.e details on you are with bloomberg.

>> our next guest with a few more quarters of gdp growth worsening before seeing an uptick. mumbai joiner to our strategist. let's have a look at what's --ng on and how it actually

with the economy is doing how it fits into your investment strategy like valued momentum and that sort of thing. >> thank you for having me here. what we do is look at markets from a factor which is barth -- broadly dividing the market into value growth momentum. we saw these gdp numbers coming out. 5% --e expecting this it is at the bottom. we use the india -- indicator to approximate gdp growth and that hasn't bottomed out. we are taking a defensive stance for the next six to 12 months. avoide trying to devaluing for the next six months.

rishaad: is it a situation where some of the folks in the past are taking a backseat to those who have lagged behind? markets, look at the what has happened is a few macros which are relevant so stockssed on those the in the economy are happening domestically and globally. bradley there is a global economic slowdown in india. that's why we like these stocks which are able to generate in the current environment. some of the names that come to mind would be these stocks. i wanted to focus in on some

of that commentary. i have a chart on my terminal iswing that the ip index underperforming. what are some of the areas you are staying away from here? are taking away -- staying away from discretionary and health care. india,nd momentum in care isething -- health naturally offered and that's why we are staying away from those sectors. you'll find a lot of low-quality names as well as low value in these sectors and that's why we are avoiding these sectors for the time being. wewhere are weak because have been seeing record highs almost daily on the index.

>> i think that the markets and macro are disjointed. markets are probably more driven by liquidity and the effect we are seeing with the macro is not imploding. believe that we are in the lead cycle. it's been that they have been indicating -- a recession to india for the last three months. expensivelightly relative to the broader markets. even within india there are a few sectors that are quite expensive. are advances. like the modern investing more which looks more from if the medic perspective. >> when you are thinking about

the medic perspective, do you expect this kind of recovery in terms of what we have been seeing in value rotation? is that going to be more of a v-shaped or a you-shaped recovery? it happening in india. it is definitely happening in the u.s.. in india it's not really the case. we are short on devaluing india. i think what can help value trade in india is if we see some sort of recovery in india, that is when we think the value trade becomes quite attractive in india. >> stay with us. we want to get to the market open. india ask about markets have just opened.

today's opening looking after we saw that week gdp read >>ing through on friday there are two factors that will play out in gdp equities today. are callingargin we for for six straight quarters now. sector isication looking at some hikes in tariffs. at this point in time we are looking at some of the strengths in the benchmarks. at a little bit over 3/10 of a percent gains. despite the fact that you have heavyweights lifting the indices, we still have the fact that the economy has not been up to the mark. the banking indexes climbing

marginally. the broader market is largely in tandem with the benchmarks. rishaad: we have -- up the most in close to two years. it does seem like the price war is increasing. >> certainly we are seeing at coming into play considering over the weekend you had news that they will look to hike tariffs. seeing it from reliance industries. that's why there is a 2% gain for reliance industries. one factor keeping those markets as much as 15% also advancing by around 7.5%. pocket at thisy

time keeping the indices going. .ishaad: 7.8% in the session. to asia. back how do you look at what has been going on from your quantitative perspective? all sorts of things are going on from back payment on taxes to this price war as well? >> as sarah mentioned, we don't look at markets from a sector perspective. seeing ise currently this huge dispersion in growth at historically low correlation with other factors in the market . it's giving a lot of growth managers the opportunity to make selective bets.

it's one of the key topics within the telecom center. how do you look at the economy side of things where the stocks are? it's something that juliette was referring to. in your view what is priced into the market in india? macros in that we use to seeel is we try out how different types of stocks behave. 14understand that there are which affect the stocks. one is where we are in the domestic economic cycle. qualityg like uncertainty is quite key.

that's why a lot of this uncertainty around general policy making is affecting growth currently in the market. in terms of what's broadly happening in the asian regions. how we tie in the broader macro story in terms of what we like in the next six to 12 months. >> we touched on a couple of areas that you do like but we are seeing record highs on the indexes. i have a chart showing that the valuations are nearing the two standard deviations from the 15-year mean. is india too expensive? >> i think india is definitely expensive. along with australia and indonesia looks expensive.

high opportunities even in such macro environments and that is why we are recommending to take this defensive stance for the next six to 12 months. definitely, the valuations are expensive but there aren't factors like year healing factors which are in india. it's almost five standard deviations below the historical mean. clearly valuations which can be paid out. >> part of your research has been looking at how india performs. there?ve you found diversions clear

where we are in the domestic cycle which is where we are in china. what we are recommending in india is quite different from what we are recommending in china. there is still room for expansion. in india we see most of these quality names have already extended. are going for momentum where the evaluation is still supported. there is clear diversions in terms of what we are seeing in china. rishaad: what is your favorite market item? you have india versus broader asia as well. give me a historical perspective on how markets are similar or different based on the different styles of investing.

>> i think probably asia has been in easing market. the stocks have done really well. asia as well as in india. -- seeing long-term growth thanks to -- which is not really true for growth as a factor in the other regions. these why we really like strategies in asia as well as india. rishaad: thank you very much indeed. phone service providers in india on an absolute tear. around 16%. it had been even higher than that after the service providers

said they would raise the cost of subscriptions. they find themselves in a cutthroat price war in the country that has a sign that it could be easing. there is a lot more on the way.

>> australia is setting up a task force to address the threat of foreign interference amid reports of chinese meddling in election interference. our managing editor for australia at johnson joins us from sydney. what is the goal here? >> that's right, prime minister scott morrison announced an additional 19 million australian dollars this morning for the new task force to track and disrupt foreign interference in australia. unnamed spy an

and also cyber intelligence experts. calling on their back last year to disrupt foreign interference in australia. it was widely seen as an attempt to disrupt chinese meddling. that issue has been in the spotlight recently with reports in the national press of a spy-professed chinese offering details of chinese intelligence gathering activities in australia in return for political asylum, and even a report of beijing offering large sums of money. >> tell me about the relationship between australia and china. we know that politically they are very tight but diplomatically, not that cozy. >> that's right.

thisalia is treading diplomatic tight rope between men tainting -- between tainting , close relationship with china they are the world-esque of the most china-dependent economy but on the other hand in that relationship ensuring it maintains close and cordial relationships with its biggest security ally, the united states. there are flash points now and again with that relationship. apparent, the detention of the chinese-born of straily and writer who has been detained since he got off a flight from new york in january. the foreign minister has made repeated requests for his release and a fee can't be released, that he be treated fairly and humanely and president xi -- president xi

jinping saying he is being interrogated daily. >> thank you for keeping us up-to-date on that. that is it for bloomberg markets asia. bloomberg daybreak middle east is next.

>> this is bloomberg daybreak middle east. our top stories. >> the start to asia. the menu -- rain pmi reading shows expansion for the first time since april. the economic damage in hong kong is the equivalent to two percentage points of output growth. we will have the latest. new leader takes control today. we are live in tokyo to look at the strength of challenges facing them. biggestebounds from the weekly lt