tv Bloomberg Markets Asia Bloomberg December 2, 2019 9:00pm-11:00pm EST
david: ok. the hong kong chief executive still speaking at this press briefing. we talked about it a few seconds ago. opposes the u.s. act in hong kong and says it is unwarranted. yvonne: they are saying it undermines confidence. in all oftaliation this in sanctioning some of these human rights groups, but they did not go that far in terms of any trade related retaliation, perhaps that is some good news. certainly, we are seeing still a lot of uncertainty on where this goes from here. rishaad: absolutely. measureserms of relief , we could just see what the latest is. has far as the investigation
into the police, the well-established mechanism is to use the ipcc to look into those allegations and complaints. at this time, they have chosen or taken the initiative's to conduct a thematic fact-finding study into the more significant incidents that have caused a lot of public concern. , it has already worked. the best way is to complete its finding and for society to examine the findings and have a good discussion on the outcome of the report. >> [speaking foreign-language] david: ok, just to recap some of those lines. she is taking questions.
carrie lam says she will soon announce relief measures. we will bring you anything new out of the news briefing. at first wordok news with su keenan. with the new ecb chief christine lagarde. she has said that policymakers will be resolute in restoring euros in price stability under her watch. she also stressed to that an upcoming review strategy will be wide-ranging and will include the effects of climate change, as well as low-inflation. she will share her first ecb policy meeting on thursday next week. weakro area growth remains with gross domestic product going by only 0.2% quarter on quarter in the third quarter of
2019. has been mainly due to global factors. su: the u.s. is proposing tariffs in almost 2.5 billion dollars of french product. in digitalaliation revenues that hit large american tech companies including google, apple, and facebook. robert lighthizer says the agency is also exploring opening investigations into similar digital taxes by austria, italy, and turkey. leader is malaysian back in court in kuala lumpur .irecting -- defending himself he will deliver a sworn statement and face questions after a ruling last month that the prosecution had made a successful case against him.
he has been accused of accepting bribes for approving a state guarantee on a loan. has an investment from another gulf neighbor. kuwait will invest up to $1 billion in the ipo as riyadh seeks regional support when there has only been lukewarm interest from further abroad. we are told the kuwait investment authority was reluctant to commit significant funds to aramco but are told it was in their strategic interest. ,lobal news 24 hours per day i'm su keenan, this is bloomberg. bring in our chief north asia correspondent. let's talk about what is happening right now. lams i predicted, carrie did not give any concession as far as the independent
commission against the police or against any other violent crimes that have happened in hong kong. thethrew her support behind police council that has been investigating these incidents for the last four or five months. this is not going to assuage the fears across society, not just in the protester camp, but also one who want an independent commission for the objectivity. she says, let the work of the police do their job and let the public weigh in on their findings. it is the police investigating the police, so i'm not asking this, but a question a lot of people would ask is how objective it would be? rishaad: that is just it. isn't it? no movement either way. the question is where do we go from here? >> this is the pattern we are in right now. there is no give and take right now on either side. the protesters -- we know the retail sales were absolutely horrendous.
and in norma's drop -- an enormous drop. 26% by volume. we are hearing there could be a budget deficit for the first time in 15 years. percentage of gdp could be shaped by two percentage points. these new relief measures compared to the past relief measures? stephen: they are no longer in surplus, but the other ones really were a bit of a whimper. $255 million u.s. dollars package giving fuel subsidies for minibuses, rent production for public properties, plus $13 million u.s. dollars, that is chump change, to travel agencies to give to incoming tourists in an incentive to come. nobody is coming right now. the tortoise numbers have dropped off 45% for mainland china during golden week and
that is having a spill in effect to retail sales. what can the government do? more. thank you. the latest on the hong kong situation. president trump is back in the trade offensive, reinstating tariffs on steel and aluminum from argentina and brazil. his commerce secretary's warning that china will face additional duties if no trade deal is reached. let's bring in bloombergs opinions editor joining us from singapore this morning. what does this blizzard of tweets that we have seen from president trump, these headlines in the last 12 hours, tell us about the direction of the trade >> the headlines are definitely rolling. there seems to be a lot of activity from trump's twitter feed. he has just landed in europe attending the nato summit. you have to remember there was a
lot hanging over trump right now. he has a couple new democratic contenders in the 2020 election, and impeachment inquiry, then you have to look at the market side of things, which he takes very seriously. ism figures were disappointing for the fourth straight month in contraction. and the stronger dollar. when you put these factors together, you see why he might have thrown this blizzard of measures out just in the last 12 hours. what has he done? he has put it into buckets. there is the latin american action which is primarily targeted at the currencies of these latin american countries, then he has also taken action against france, turkey, and a number of other countries for the digital taxes they have imposed on some of the big american tech firms like google, facebook, amazon and such. david: one would hope that there is some overall strategy here.
i could connect with those fronts are too what the overall strategy is when it comes to that strategic rivalry with china? i think strategy is a bit of a generous term. you have to think about what is happening with china over the course of the past few weeks. we are in a pretty good spot. trump said we were in the throes of a good deal, we were very close, trade negotiators were in touch with each other, which is always a sign of artful diplomacy, of course. then he signed the hong kong protest bill. that supports the pro-democracy movement going on in hong kong. i think china naturally took issue with this and they had a few days to think about how they would retaliate. they said they would retaliate. mind thato keep in trump did not necessarily need to sign that bill. it had overwhelming support. you have to think about his long-term strategy going into
2020. he does need a win, but does he right now? the trade deal is broken out into phase one and phase 2. it seems like we are broken out a lot further from both. just getting to a moment in kuala lumpur where they have a trial of the former malaysian prime minister underway and lawyers have already come into court saying they have not had enough time to prepare for the case. anyway, we have the lawyer arguing that the former prime minister had no knowledge of the 42 million transfer that formed the basis of the case. saying the transactions were done at the behest of third parties, saying they were done at the instructions of the fugitive financier. that is currently where we find ourselves that.
theill be speaking for first time to defend himself a bit later. more will be coming out of that trial still ahead. the rba is making their final rate decision of 2019. all 29 economists surveyed by bloomberg think they are holding the cash rate at the record low levels. yvonne: up next, global stocks under pressure in renewed worries over global trade and the disappointing u.s. factory data we got. we will talk market risks. this is bloomberg. ♪
from a mega global investors -- omega global investors. it seems like markets were assuming that december 15 tariffs were going to be lifted. if they do get raised next week, what happens to markets? think it is important that if there are increasing levels of glover interdependence desk bloomberg -- global interdependence, that is weighing what is happening in the moment. the current trade implications the company and capital investments, so to say , iut what is going to happen think it is noting the impact. the manufacturing payment
numbers. they are increasing in theuction driven by seasonal factors. that is not uncommon to see. downhina economy does slow , but from that perspective, i think china is only going to termste that slowdown in of credit easing. u.s., broadly speaking, the u.s. -- the number that i'm focused on right now is the k packs that has been trading lower for the last few months. train, is still on that then we will see the deceleration. yes? david: i just wanted to pick up
on that phrase you just mentioned, the trade war. a lot of economists are pointing to it as one of the main reasons we are getting a slowdown. do you think the trade war is also why inflation is low? if we get a resolution to the trade issue, would you consider that a reflation event? i do think partly that the inflation is contributing to the slowdown of the economy. the slowdown of the economy is partly contributing to the inflation, as well. the market is looking at the phase one deal. i think that the rate of the phase one deal is needed given the damage that we have seen to both economies. whether we reach a phase one deal or not will have to do with confidence in companies are
whether or not that will increase. it remains quite debatable. i don't think the phase one deal is the only thing they are looking at right now. because it depends on the election that will have deeper implications. until the elections finish, there is still a lot of uncertainty in the markets apart from the trade talk. we will probably see more volatility in the market. in an economic sense with some signs of bottoming of the global economy, is it a sense that we have gotten used to these tariffs and we carry on with the status quo as it were?
one of the downside risks i'm ifing is what would happen the trade talks don't have progress or what happens if trade talks do escalate? case isl happen in that you are going to see it into groups. you will start seeing independence between countries. level, you will see the limitations. rishaad: while all this goes on, we have corporate's reaching into their supply chains and you can continue in a new war world order kind of emerging. a new economic order.
what are your thoughts on that? how would that dovetail into how you look at your portfolio? so, that comes back to my views on the markets. seensset markets, we have the valuations stretched so far this year. that is because the market sentiment is quite optimistic and also that is probably based on the lower interest rates. in any of the simplistic equity valuation models, assuming low interest rates and a higher equity valuation which is true, that equity valuation, they assume that business does last forever. we know that is not the case, especially when there is an economic downturn. i think that there are a lot of things to be watched out for in terms of the economy in 2020.
the risks we are seeing and the behaviors and markets because of the lower environment. when i say the valuation we are seeing, because of the slowdown economy, we need to focus on the earnings growth of the business and also because of the downturn, we need to focus on the downside risk of specific businesses when it comes down to that. david: so, what you are saying is that global equities are expensive and even though we have lower rates and that tends to inflate valuations anyway, you think things are expensive. do you have any investments? are you long equities? from our investment strategy, we don't tend to long or short any asset class. whatrms of if you asked me i would shop for the moment, because of the increase in fiscal spendings in countries
like japan, australia, in the u.k., or in europe -- fiscal reviving toms to be sustain economic growth. fiscal stimulus tends to benefit sectors in an environment where there is increasing fiscal spending. in terms of sector, i would say the sector to watch out for is infrastructure. rishaad: all right, thank you very much indeed. a lot more on the way. losers the winners and for the asia-pacific at the moment, as we have the down arrow story. this is bloomberg. ♪
business flash headlines. a japanese drugmaker is buying geneericain -- american therapy company. the deal is expected to close in the first quarter of next year and will help develop genetics medicine for rare neuromuscular diseases. they will pay $50 a share, a 110% premium to monday's closing price. twitter is marketing a $600 million high-yield bond, the first of its kind for the company, which previously relied on convertible notes. the initial plan is to sell eight-year bonds. the deal may price as soon as thursday according to someone close to the move. twitter has said it is using proceeds for general corporate purposes. mine surged in torontor. there will pay 5.5 canadian taking over aare,
project in columbia, which is currently be developed. the listing is in hong kong and shanghai, with both stocks up this year so far. david: an update quite literally here. landfall at about midnight. as far as the markets go, all indications are there is no disrupting trading or local ports. , about 30f flights --utes from now, 380 flights stay tuned and look out for updates if you are flying in and out of the weather system. rishaad: ok. let's look at what is going on the msci index in terms of returns. , it iseon corporation
based in japan. it is sending out a profit warning. , this could be seen as the impact from the trade war. the coal group, there is a feeling that supermarkets and department store groups are not going to be faring well looking ahead and that is something dragging that company down. newsiggest gain, no clear on this. in a declining market up 5.1%, likewise, living services, those companies are making waves out there. we have the asia-pacific index down. the rest of the equities in this part of the world, the benchmark indices just feeling it. let's have a look at what is going on with the gmm function, have a look at the markets in total. david: yes, we are down about 2% in australia. about 60 minutes away.
10:29. i'm su keenan with the first word headlines. --start with the very latest we are going to talk about a number of different issues. let's talk about two senior white house aides in the u.s. which have indicated that the ball is in china's court when it comes to a trade deal. it is suggesting that tariffs will only be halted if there is real progress in talks. kellyanne conway says it is china's choice if a deal is to be struck while wilbur ross says new duties will be imposed if the two sides fail to reach an agreement soon.
>> you have a logical deadline december 15. if nothing happens between now and then, the president has made clear that he will put the tariffs in, the increased tariffs. su: china has -- responded to a bill signed by president trump over hong kong. they will suspend port visits by the u.s. navy and sanction u.s. democracy groups. it is a low-key response. china barred american warships from hong kong in august and democracy groups are already prevented from working on the mainland. to the philippines now, at least one person has died and more than 200,000 have fled their homes as a typhoon makes landfall on the main island. manila airport is closed. most of the city schools are shut and electricity has been cut off in some areas as strong winds toppled power lines. the typhoon is packing maximum
winds of 155 kilometers per hour and gusts of up to 235. former president jimmy carter has been taken to a hospital in southern georgia for treatment of a urinary tract infection. the carter center says the 95-year-old was admitted over the weekend, adding that he feels better and looks forward to going home soon. an president has had eventful year, particularly as regards medical issues. he had a hip replacement surgery and a head wound that needed 14 stitches. he also recently fractured his pelvis. global news 24 hours per day on air and on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan, this is bloomberg. just checking in quickly on equity markets, u.s. futures are pointing higher. you are looking at australia
down about 2%. have a look at dollar china. 7.04. that is where we have been trading. we were flirting with 1.10 in dollar-yen. all the bad headlines driving at below 1.09. 10 year is waiting on a central-bank decision. david: we have the rba -- yvonne: we have the rba last meeting of the year. bloomberg economics has been talking about what could happen. this could be a nonevent. --seems like this could be we are bringing in james mcintyre. governor lowe, are we expecting anything new from him? >> it is unlikely we are going to hear anything new from the central bank before they take their traditional break over the summer and come back to their
next meetings in february next year. we have not had an -- a lot of new economic data. they said they do want to make a full assessment before doing anything else with policy after having cut three times since june. the full assessment means gdp which is out tomorrow, but also the cbi, which is out in january. we do think that february is the next chance for actual movement in policy. nothing today. , on top of that was data on the aussie housing market. to be a huge conundrum for the rba. we have other parts of the economy weakening, then you have a housing market coming back. it is kind of like their worst nightmare. >> well, it is. they are really torn. the bits of data you had yesterday, the key one, that has attracted the focus, that has been how strong the price was.
we had the strongest monthly gain in the corelogic monthly house data and that was driven by melbourne and sydney, the two largest property markets. also yesterday, it is really keying the question or the conundrum for the rba. have there rates been transmitted into the economy more broadly? they need to see it feed into consumer spending and also construction activity listing. there is still the growth next year. the big fall away in residential construction activity begins to impact the economy. job adds yesterday were week. there is a bit of heavy going ahead before we see the uplift and property prices beginning to turn into a tailwind for the economy. we think there is a chance they have more work to do next year. rishaad: thank you very much, james. markets on auity
downdraft from the u.s. and we have global bond markets extending a little bit from the selloff on monday. weak manufacturing is countering some of these signs of recovery. always gettings a reminder. guest let's bring in our who is with us in studio. would you buy u.s. 10 year treasuries right now? >> i think of the 10 year treasury rises up, that could provide a good entry-level for institutional investors. pictureeeing a mixed for the long-term. i'm pretty sure the yield is dragging toward 1%. if you take a look at the global , the u.s. offers
the highest ones. especially if you look at the european countries. it is trading around 4% right now. you don't think the pmi data is enough to get europe and japan up instead of the u.s. down? >> japan's economy is in better shape compared to europe. together with the gloomy economic outlook for europe, in general the european economy is not part of it. we are not going to see a risk hike. either europe or japan.
yvonne: is it going to get harder to justify buying on dips in treasuries? i think so. that is the only game in town for financial institutions. if they want to survive, they have to make a lot of investments. if we get a handle of , you are looking at an economy that is doing ok, surely. >> we have to check the correlation, the consequence if the treasury yield goes up. as i mentioned, we are seeing a mixed picture.
up.pressure is mounting there are three components. and also thet commodity cost. given the base effects, the pressure is mounting up. the fed set a pretty high barrier to cut rates or hike rates going forward. that means the short end of the yield curve is pretty much anchored at the current level. the two-year is trading around 1.6. that offers a very good investment opportunity.
we does a common indication. now there is space for investors making a lot of investment into the european government bonds and the japanese government bonds with the fx hedge. this way, they can get the higher yield than the u.s. treasury. however, if the yield curve that makes this trade means thele, which back and thep reinvestment into u.s. treasury markets, that will put downward pressure on the treasury yields. david: let's simplify things. december 15, tariffs take place. you assume the tariffs would kick in. if not, what happens to tariff markets? >> it is definitely risk off.
so, the reason i set the barrier chineseyou know the leaders put a lot of political capital into this trade deal, so the reason i just said will make this treaty more costly for chinese leaders. i want to pick up on what you are saying about the japanese economy. overall, you would not have thoughts of given some of the data. this is kind of a big question in a funny sort of way. you have these economies getting rich. then it probably keeps on getting older. the point is is this a unique phenomenon that requires unique things to deal with because it
is special in that sense and the economy has got rich? a very long-term picture. hard for japan to get out of the woods of a deflationary spiral. going forward for the next 5-10 years, we are still seeing disinflation or d inflationary scenarios for japan. if you look at the current account balance with the fiscal, are at a historical high. compared tolevel the 20-year history. right now, it is in critical shape. i don't know if you pay attention to the news that japan is easing fiscal policy.
that can give another boost to the economy. yvonne: i was going to ask you about chinese government bonds. they have not exactly moved since the pboc trevor -- triggered that selloff. what is the play in chinese bonds? >> i think if you take out the are seeing aou deflationary picture. i believe the pboc will continue to cut rates into next year. a very interesting investing opportunity. opportunityesting is also in the dollar bond issued by the chinese. the boe and the s oe. right now, the market as we are speaking now, the market is going into a mini panic right now. david: what yield do you get there?
if it is priced properly. >> 200%. david: something is probably wrong. >> because it is a panic. in the past, the market players believe in their heart that the soe's will not default on dollar debt. however, there is restructuring going on. i think this market is growing very fast and that will bring forward a lot of interesting opportunities. for the chinese mindset, we never give shock therapy to the economy. always touching the stones to cross the river. i think the market is over pessimistic right now. david: wisdom words. [laughter] david: if you like those trades, give him a call. [laughter] yvonne: coming up, we have cyber monday sales on track for a new high. we will assess the early winners from the holiday weekend next.
david: welcome back. let's talk about cyber monday. not quite done. let's talk about shopping. a fresh spending record. when you look at wall street's opening bell, online sales were on track for a 19% increase from last year. rishaad: su keenan is in new york watching all of this. have you been bargain-hunting? do you know other people who have been? not, but i would not admit it. most people shop after work and that is why they are expecting numbers to climb. as was mentioned, consumers in
$500,000have dropped online according to adobe analytics. they track this. golden hours are between midmorning and midafternoon. that generates the numbers. they anticipate a lot. on the east coast, they still are heavily shopping. top $9.4ected to billion. before we saw amazon.com have roughly a third of online sales, that is now diversifying. itsart has stepped up online operations. you also have etsy and ebay that can benefit again. it is the platforms that benefit the most, even though we are seeing strong sales in amazon fire, tv, dolls including "frozen 2" and "paw patrol."
also the electronic games such as "madden 20." david: but not everyone is benefiting, right? we have been talking about this on a yearly basis and the bigger it gets, the bigger the blowback for department store sales. if we go into the bloomberg, you can see the steady decline in the department stores that was happening before we started having cyber monday. it has been exacerbated. macy's is a perfect example. macy's, their stock has been really hit. it lost a good quarter of its value over the past five years. you are looking at macy's and the height of its black friday the doorbuster sales, but check out a chart real quick because analysts are saying macy's is getting killed by a number of things, not just amazon. by strategies, t.j. maxx offers all kinds of bargains that you have to hunt for. target building up its online
presence along with walmart. rishaad: thanks, su. let's get the latest business flash headlines. nomura. the chief operating officer has been there for over 30 years. theerages sweeping over global operations. replacing the leader of the company for seven years and will become chairman. sense of urgency is even stronger. shift.ill be no big will be the most important thing to focus on going forward. rishaad: hong kong airlines is fighting for its survival.
online street protests. passengers avoid going in or out. the finances are deteriorating rapidly. they are waiting until saturday to find a solution. down the opening session in india. let's get the bloomberg reported. day across thef region. what is the set up for india? >> it is the same. we will take you through what the u.s. markets did. don't expect too much of a big bang open. yesterday's session was muted in terms of index performance. losses.or most of the other banking names are near the support levels. you may see a little bit of a rebound.
we have a bigger open on the lower end and a continued trade on the downside. you might actually see a breach of the support on the downside. that is what you got an terms of the index. you saw it widening in favor of the bears. that, it is going to be the usual stock specific. focusing on the big banking names. also a little more focus with what is happening in the pharma space. david: speaking of biocon, new drug tests. wire we watching that stock? launche is a new drug that they are doing in the u.s.. $4.5 billion market. they already launched this. the u.s. launch was fairly
critical. deal that a 33% share could really aid the bottom line. this is something that was anticipated, but i guess with the formal launch that has happened, this could lead to a big bump up. also profit share for biocon. right, good stuff. coming up, it is battle of the charts. it is emerging-market equities against credit spreads in the chinese mainland. what is more exciting? we will see. this is bloomberg. ♪
david: someone give the dj mixing lessons. [laughter] david: it is time for "battle of the charts." they are going to put their best charts against one another. rishaad: using the bloomberg terminal, run that function at the bottom of your screen. let's go away. let us get to marcus. what do you have for us? >> this chart shows that emerging-market equities already key crossroads as we near the end of the year. index shows-market
the moving average is close to above the 200-day moving average , but not just quite yet. if it does cross, you will signify basically a golden cross, which is a very good bullish technical move moving forward. crossroads, with president trump recently announcing tariffs on steel and aluminum, brazil, argentina. athink both countries export minimum amount of steel to the u.s., but i think it serves to show how competitive it is moving forward. lost ifd, all is not u.s. and china comes close by the midpoint of december. david: all right. >> we could see it end on a stronger note. david: we've got to get to jen to defend her choice.
go for it. >> yes, my chart shows interesting scenarios. traders don't seem to be worried about the quick spike in defaults. the upper panel shows the one year yield in china and the double weight bonds in china. the lower panel, you can see the yield gap between the two is closer to the lowest level since 2007. it is pretty surprising because we have seen a spike in deposits recently. david: yes, well. that was enough. congratulations. [laughter] david: this is bloomberg. ♪
this is bloomberg markets. ♪ haslinda: asian stocks extending losses, investors pretty much spooked by the tea words, terrorism and trump. the focus is on december 15 as the deadline for when the u.s. could impose those tariffs on chinese products. of course we heard from wilbur ross who said it is still on the table if the phase i deal is not sealed and signed. let's take a look at where we are right now. asia down by .6. the question is where it goes from here.
that depends on whether those tariffs are waived or delayed our if they are imposed, that will impact sentiment in the market. the pack00 leading when it comes to declines, down by 2% ahead of the rba policy announcements later today. the expectation is that it will stand pat, though there are further cuts expected. the governor says qe will not be the immediate response, there would be one or two more rate cuts before that would happen. let's look at where we are at this point in time, given that tariffs are back in focus. the dollar you want back in it is expected untilon the higher side the u.s. imposes tariffs and it's highly likely that pboc will keep a lid on those.
take a look at where crude is, up .4% but expectations are for further opec cuts, putting the lid on supply. opec was supposed to be meeting and vienna through the course of this week. 42 minutes left before things get underway. a look at nifty futures just about flat. threee've had the last trading days, down about .4%. we did have the dollar index falling back considerably. stable, a tad higher at the moment. 10 year yields, course we got an eye on that reserve bank of india interest rates coming up and that terrible reading on gdp growth on friday, bond markets
looking for further rate cuts, some suggesting as much as 50 or somewhere in between because we've had the government there do exactly that before. let's look at the first word news with su keenan in new york. kong,ing to start in hong chief executive carrie lam is urging further relief measures after showing the city straining under ongoing protests. retail sales plunged 24% from a year earlier. she also condemned u.s. as unnecessary and unwarranted. she said hong kong will follow beijing's lead on retaliation. to malaysia, the former ms. asian -- malaysian leader is back in court in kuala lumpur, defending himself against
charges of corruption involving a unit of the 1mdb investment fund. there was a really last month that the prosecution had made a successful case against him. he's accused of accepting bribes worth $10 million. for improving estate guarantee of a long. production among opec members has fallen ahead of a strategy meeting with independent allies in vienna this week. lowest inad to its more than a decade while writing -- uranium production fell further, having already been squeezed by u.s. sanctions. total opec output fell 110,000 barrels a day, 29.7 million a day last month. property developers in singapore are increasingly concerned about the oversupply of private apartments at a time of slowing demand. they say the glut may soon --
may suppressed prices. the real estate developers association said homebuilders are alarmed and are calling on the government to play -- pay close attention to the market. it describes the current property market as challenging. and in the philippines, at least one person has died and more than 200,000 have fled their homes there as the typhoon made landfall on the main island of luzon. been cut offty has in some areas as strong winds toppled power lines. the typhoon is packing maximum hour of 155 kilometers per . global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. top storyback to our this morning, president trump is back on the trade offensive,
reinstating steel and aluminum tariffs in argentina and brazil and weighing potential for innce, italy, and turkey retaliation for taxing u.s. tech firms. things are looking much better on the china front with commerce secretary wilbur ross weighing in with the threat if a deal cannot be reached. you have a logical deadline december 15. if nothing happens between now and then, the president has made quite clear he will put the tariffs in, the increase tariffs. let's bring in our chief asia correspondent. it's not just china were talking about, were talking about france, possibly austria and italy and turkey come on top of brazil, and of course we have china. tell us about all this. you've got argentina and
had thend then you ongoing tensions with china, were getting more news from the global times. you can see that argentina and brazil are getting caught up, the thinking is they're punishing argentina and brazil .ecause there benefiting it shows that even if trade relations [indiscernible] back to the question thehe economy, manufacturing numbers in the u.s. tend to show that the u.s. economy is getting impacted by the trade war. >> you're right, the global manufacturingthat
globally is finally on its feet a little bit. spilling over to the rest of asia in november, but then you saw the u.s. figure last night, that's a reality check about additional pain being felt there. the economy more broadly still holding uppity well but it's difficult to say there's no trade war pain at all. that's why a lot of people are now looking at this december 15 deadline to see whether or not the two sides can at least extend that ongoing trade truce or whether the u.s. goes ahead and pulls the trigger on december 15. it seems like we are in a critical two week period ahead of that deadline which will probably make or break it as to where the trade talks go next. they've been notching up a little, it's almost as though there's a feeling out there that december 15 tariff
hikes are not going to happen. the thing is, they could well happen, and that's the big danger, is it not? >> i don't think many people are expecting the argentina and brazil tariffs, but president trump has introduced currency back into the mixture as well, accusing both countries of weakening their currencies. that something it has accused china of doing as well. to your point, it does feel like we're in a fairly delicate state at the moment. we'll have to see whether there is tangible progress over next week. wants big progress in i.t. and the like. how sure are we that china's economy is resilient?
we heard that it's ready from -- for a mid and long-term trade war, it has the ammunition, it says. >> they are certainly digging deep for the long haul and there's no doubt about it. things, theide of headline was pretty positive that there is a seasonal impact their. season, global shopping and were comparing november to october when there was a big holiday. but there's no panic in china's economy either. they're tweaking and nudging the policy levers, and small and medium-size businesses need it the most. now were having some talk about accelerated bond sales which should support things going forward. we are not at the panic stage but we have a big policy
meeting this month in china, at some point will have the economic work conference and policymakers will rollout in the near to medium term. haslinda: it all depends on investor sentiment. thank you so much for that. joining us is eli lee, good to have you with us. talk about how there's little expectation that the december 15 deadline will be met with those tariffs. if trump decides tariffs will be imposed? what is it mean for asset classes? eli: this is the most onerous set of tariffs since the previous round. we think the likelihood will be economy in ah the
very delicate situation, if this came on, it would seriously ratchet up the risk of a recession and i think the white house would not want that situation going into the 2020 presidential elections next year. haslinda: how do you play it? eli: i think i would stay the correction today. has been ongoing for some time now. the way i read today is that president trump is likely trying to bolster his reputation ahead of a trade deal with china that could have an offsetting effect. generally i think that the market reaction, we've seen some sharp corrections in the equity market into a smaller extent, the bond market. chasing the reflation trade over the last few weeks, but if you , veryt what is happening
muted movements as well. the expectations for reflation have not been derailed by the news of the last 24 hours. rishaad: is this too much good news for next year now, already being priced in? extent ofu track the the rally until now again the since 1995,verage 1998, 2012 and 2016, there is more upside ahead. what would give me positive valuations stopping -- some argue that interest
rates are lower so there is some expansion. generally i think the expectation should be moderate. but we will not get as strong a return as we did in 2019. with interest rates so low, then we get fiscal policy on top of it. the thing is, we've already got the japanese announcing a big fiscal program elsewhere. it is going to create more asset bubbles in the places where we don't need them? or can this be the stimulus we targeted correctly? eli: i think the scope for an asset bubble next year will be a problem that we grapple with at a later point in time. i don't necessarily think the
--se of the fiscal stimulus china will likely expand the program but really in a calibrated way that will see bigger fiscalg of policy next year. for the u.s., we think the scope in an election year is quite limited. really the danger for a bubble will come with monetary policy, cautiousarket is quite . it's quite hard to say whether that will happen next year. we have prime minister shinzo obvious in tokyo, saying japan is in the final stage of forming a stimulus package and he wants to make economic
recovery, those headlines coming right now. eli lee, staying with us. i had this hour, indian budget carrier indigo has stopped pushing engines on their airbus planes to the limit. find out why, later. rishaad: next week u.s. manufacturing data showing signs of recovery. will look at how market strategy can keep up with data divergence. this is bloomberg. ♪
board, at the conference we've got pmi data which is painting a particularly bad picture as well. what we can look at other parts some good and see data as well, which provides encouragement. it's good or bad in parts. tell me which part you are looking at? what is key for us is the manufacturing data, particularly the survey data. it has led the economy down and the economy is still in a delicate situation because were seeing -- starting to see the manufacturing recession on the services side of the economy and consumer confidence as well. with the good news is that in
recent months, the general picture is one of manufacturing starting to hit a bottom and rebound. this is led mostly by the numbers in the emerging markets. the signs are less clear in the yesterday ittioned was below expectations. the market has rebounded strongly. reflect sentiments with the larger companies but i wouldn't read too much into one data point if the general picture is one of the stage being set for recovery in the middle of 2020. haslinda: i don't think the markets have decided if for recession will take place or not. put in assetbeen classes right now? eli: i think the count is low. markets are forward-looking and
history has shown it's very costly to get out of the market after federal reserve cuts. i think the markets have performed very strongly over the last few weeks, but you are right, the risk is there we don't get our best case trade deals being ratified. i think i would change my view if that -- of the tariffs did come out against my expectations. haslinda: eli lee, head of investment strategy joining us here in the lion city. if you are bloomberg subscriber, you can catch up with all our interviews by you are interacting functions at tv . you can also join the conversation by sending instant messages to our team and during
haslinda: welcome back. let's do a quick check of the latest business flash headlines. a japanese drugmaker is buying aboutan gene company for $3 billion. the deal is expected to close in the first quarter of next year generic help develop medicines for rare diseases. 100% premium to monday's closing price. twitter is marketing a $600 million high-yield bond. the first of its kind for the company which is previously -- to find itself in the debt market. is addition -- initial plan for as soon as thursday.
continental gold surge in rareto after accepting a all caps take over from china's -- they willcer of take control of the project in columbia which is currently being developed. it's listed in both hong kong and shanghai and is up this year so far. it's time now for the stock of the hour. japanese makers is on your radar? rishaad: simply because we've got a lack of inbound tourism into japan at the moment for people who normally would be going to japan to buy things
like maternity kits, baby things, that sort of thing. it decline into 16%, rate -- it was down essentially the most this company has seen in share price falling in something like eight years. net profit and net sales forecasts really did point to decrease in the incline in this business segment it operates in. one analyst saying skincare may be reflected in other cosmetic firms as well. so it could have repercussions. look,1240% more stock
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rishaad: looking at what is going on -- we are 53 seconds away from the interest rate decision from the reserve bank of australia. indid of course have a cut october. the aussie dollar has been easing back since the november meeting and does remain supportive of the economy. we do have reduced pressure coming from global central banks. rba toncy for the deliver further easing. housing market in
sydney and melbourne. haslinda: we are about 20 decision. the rba the expectation is that the -- we heard from governor low recently, saying qe is an option, but not the needed option. there will be one or two rate cuts more for we can go to qe in australia. this has a country that has not seen a recession in many years. we are expecting that decision now. the cash rate unchanged at 0.75 percent. it says it is prepared to ease monetary policy further if needed. this is on the back of 75 basis point easing. a bank that has been very aggressive in propping up its economy. economists would be passing through the statement as well. with anything which would give
them a clue to what happens next with monetary policy. saying --ba interest ratese further if needed and saying a pick up in wages growth would be a welcome development. at the moment, they are identifying rate cuts have put downward pressure on the exchange rate. index, the asx 200 what he much where it was before. taking a look at the aussie dollar because it was on a downward trajectory. this is what we have those for you. this is currently the position, householdt weak income is weighing on spending. wage growth not coming in as much as they would like. haslinda: as expected, the rba
holding rates steady at 0.75%. eli stays with us. this is not a surprise. it does not mean that most journalists may be needed going forward. >> they made the right choice in keeping rates on hold. they are very much looking at a scenario where we could see a potential recovery in the global economy in 2020. because of the chinese stimulus that has been keeping prices supportive, the australian economy has benefited. before, theyyears had been surprised by the impact in the decline on the housing market by consumption and the general economy. the debt market has now turned since the third quarter of this year. the rebound in the housing market would also be a tailwind for the economy. think seee also, i
that the labor market in australia is firm. that is another supportive pillar for the australian economy. for the central bank makes a lot of sense. ishaad: also, what we have an interesting line coming through. they are being positive on what is going on in a global sense. they are saying the risks to the global economy have lessened recently. they too perhaps are seeing a bottom. would you agree with their assessment? that when onek looks at the general manufacturing data that is out -- make theas to assessment that risks are bottoming. reallyral banker can forecast what is going to happen with regards to the trade
negotiations between the u.s. and china. that is a wildcard for the global economy today. everyone is waiting to see what is going to happen in the next few months. the tariffs bes postponed. fingers crossed, we will see a trade deal. haslinda: it is a wait and see. thank you so much for your insights. it's get the first word headlines with su keenan in new york. su: we are going to start with the u.s., which is proposing tariffs on almost two and a half million dollars on french products in retaliation to a tags on digital revenues that hit large american tech companies that include google, apple, and facebook. robert lighthizer's has the agency is exploring open investigations into similar taxes by austria, italy, and
turkey. two senior white house aides have indicated the ball is in china's court when it comes to a trade deal. tariffs a set for next week will only be halted if there is real progress in the talks. kellyanne conway said it is china's choice. willr ross said new duties be imposed if the two sides failed to reach an agreement soon. >> you have a logical deadline, december 13. if nothing happens between now and then, the president will make clear he will put the tariffs in. the increased tariffs. su: chinese state media says the government will soon publish a list of what it calls unreliable entities that could lead to sanction against u.s. companies. the communist party backed global times has a list in response to a bill sponsored by
republican senator marco rubio. aramco may have netted investment from another gulf neighbor. kuwait will invest up to a billion dollars in the ipo according to people close to the move. this comes as a riyadh seeks regional support. we are told the kuwait investment authority was reluctant to commit sufficient -- commit significant funds to wasco what was told a stake in the country's strategic interest. global news, 24 hours a day, on air and on tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. thank you. hong kong's chief executive carrie lam pledging more relief
measures are forthcoming. retail sales plunging the most on record. >> will be working very hard to monitor the situation and introduce relief measures so we are able to support -- keep jobs and of a relief to the public. relief to the public. very soon, we will be offering the fourth round of relief measures. rishaad: steve engle is here. tell me about it. what has she come up with? >> no specifics. rishaad: there are going to be for the relief as yours. was there any kind of traction on anything else? >> in october, they did a number of measures. they gave subsidies to has hacked see drivers and minibus drivers. measures,f different upwards of 255 million. hong kong has not done anything. look at the economy. they are going to contract for
the full year. arrivals are down. hotels are dumb people -- hotels are empty. likelycentage points shaven off any kind of economic growth whatsoever. sales -- thank you very much. down by a record. 26% by volume. 24% by value. things are looking pretty bad. what can she do? this is what carrie lam had to say when asked, what is going to be your reaction? she said, i hope we can find a way to stop the violence. there is a chance for our economy to come back. she reiterated, i hope violence will stop as soon as possible. that seems to be the hong kong government's solution. please stop the violence. we all agree, nobody stop the violence -- nobody likes the violence. that is not a solution.
that is an end result. haslinda: we are looking for more relief measures. the question is whether or not local, consumers can prop it up. maybe provide a buffer. >> a lot of these retail outlets in hong kong are struggling. they need rent relief. one has indicated they could close as many as 30 retail outlets coming forward. jewelry story has 40 different leases on its retail outlets in hong kong. arent is coming due in the first part of next year. -- there rent is coming due in the next year. guess who buys a lot of their gold? mainland chinese taurus. mainland chinese tourist down 46%.ere they are the weakest constituents of spenders.
there the biggest by capital. it is tough right now. predicting a 70% chance there will be a wave of retail closures if there is not an end to the violence and not an into -- not an uptick in spending. social: the hong kong unrest and economic slowdown -- a negative impact on the forecasting a 5% drop in the mass residential of next year. david is the head of research for greater china. david, it is fairly modest. when we look at the crisis enveloping this territory, we are not getting that this time. is it because people recognize what happened then and are holding on? tell us your thinking. >> this is interesting because
you look at it -- people are focusing on the retail market. the commercial market. people are thinking the housing market is stopping long time. ab this is a price point where we can get in to the market. at least according to some. social unrest or anything like that will blow over in a couple of years time. that, there is no other alternative investment channels. stockmarkets are not doing too great. that is the thinking behind it. -- these, whether or not economy is going to tank any further, that will impact people's incomes.
that will impact housing prices. rishaad: unemployment and housing have the biggest correlation. >> absolutely. we did a study, the hunt sign index core -- the hang seng correlation. the financial market driven. benchmarkis a good for the economy. haslinda: we talked about how the retail market has been smacked, sales down 20% year on year. you see the retail market playing out? >> the street front shops will take a huge hit because of this. that, there is already a changing pattern of mainland shoppers from luxury goods to midprice goods. they are impacting on the rent of the street front shops.
now that the tourists are not coming, that is going to have an even further impact on those shops. perhaps the silver lining is that the community -- not the ones in the front, but the ones in the back end of the street selling goods. having a better trade than the rest of us because the people are not going to the business areas to shop. that is something that is perhaps a small relief to the whole situation. haslinda: can the government provide some kind of support to ease the pain? >> i guess the government -- there is little the government can do apart from what they have said in various announcements. the landlords probably will have some kind of renter relief. end, we have to look at
the shoppers' behavior because we so rely on mainland tourists and tourists in general. is that so easy to switch to community shopping? i think that is not realistic. the current downturn will persist for some time. fromad: let's talk away hong kong and talk about elsewhere in china. how is it doing through the different tiers in the city? >> again, something to do with the economy. economic activity in the end is focused on third tier cities, especially during a downturn or slowdown. efforts toernment's rein in prices, the demand is still heading towards first-tier cities.
area -- look at the this area is going to benefit away from the-- general country. this area is going to benefit. in the end, it is the economy that has to drop house prices. rishaad: thank you for joining us. just let it about indian markets opening up. unchanged at the moment. we will no doubt get some proper price discovery as we venture in and get over to mumbai after this short break. you are watching bloomberg. ♪
asian markets. never need is in mumbai. what have you got? >> the indian markets were also open in the red. for the last three sessions, we have been looking at profits in the last week. numbers,the weak gdp also for the november month were subdued. nifty is sitting with cuts at is seeing ant 5500 muted session. also seeing some negative rations. the focus will shift to the r.b.i., which starts today. we will get to know what the monetary policy has. economists are expecting a 25 basis point cut. biocon is something we are watching in today's session. this particular bio could change
about 180 to 220 million dollars in sales at the higher margin. the stocks are having a positive reaction. our be a is another one. they are looking to raise 290 dollars. motors have stated the company has said it is working to complete an order by february 2020. the stocks open have a percent higher on back of the news. to you guys. -- back to you guys. rishaad: thank you. have a great day. india's biggest airline has told its pilots to stop pushing engines to the limit during takeoff. the aviation regulator is saying the practice may have contributed to turbines failing in the air.
by conglomerates reporter in mumbai. what forced indiegogo to take this decision? >> it is largely concerned about repeated engine failures faced by india's largest airlines. the repeated failures have made them to think twice. they have examined the landscape. they have come out with a statement and guidelines asking pilings -- asking pilots to not use -- atf -- aircraft turbine fuel. the regulator has asked to limit the fuel thrust so that it can avoid ending failures in the future. manufacturers --
for now, the regulator has asked the regulator -- as the airline not to use the full engine while taking off. haslinda: midflight dramas have been quite a headache for indiego. what is it mean for the airlines? clearis not immediately how it will impact the aircraft. it has faced several issues in the past. they are switching over the engine. india has placed a huge order the rival ceeo phone. in the future, more engines will come from say from. thank you so much for that. still to come, qualcomm is facing off with a huawei in the
haslinda: welcome back. the u.s. and china are jostling for the top spot in the race to roll out 5g amid looming regulatory hurdles and mounting competition. vyingmm is among those for a piece of the pie. the ceo told us, both sides need to work together for 5g to take off. >> kind of the red and blue world people talk about -- i do not think that is going to happen. i think you are going to see the continuation of international standards. if you go back 10 years, 15 years any the cellular industry,
there is not an attempt to create chinese standard and an american standard. neither one had the skill that was helpful for the industry. i think you are going to continue to see international standards bodies be important in the cellular world. to battle is, who is going have influence in the international standards body? that is a 30-year-old issue for everybody. different players -- years, theack 20 europeans would have been much stronger today. south korea and japan, very strong. for us, i do not see this general decoupling people talk about. i think it is quite dangerous for both sides if that were to happen. for qualcomm, the interesting thing from my perspective to versust is qualcomm
huawei. if they do not cooperate, you will not have 5g as an international standard. it is not in the interest of both companies to create this separation, so it does not happen. we do compete with each other for i.t. and market space in certain areas although we are in different market segments, but really, both of us need to cooperate in order to have 5g grow, and we do. >> had you keep those lines of communication open when from a government perspective, the lines of communication are pretty tough. >> it is a different conversation. it is about, we need to get 5g for both our businesses and the ecosystem. it just happens. is nots a lot of -- it as complicated as people make it out to be. the standards bodies and technology. companies, buto in general, there is a lot of
activity at the technical level. it dominates the discussion. there is not a lot of geopolitical discussion when you're talking about driving technology. what about in terms of competition as you see it? you have to be so colalled frenemies. how do you find that as an executive? >> it is part of the requirements of being in a similar seat to mine. there are number of people in similar seats. you have to navigate those. rishaad: the call, ceo -- the qualcomm ceeo talking to us. asian stocks are going to have a good day after the headwinds from wall street. the hand saying, 1/10 of 1% down. the decision of the reserve bank in australia. the market extending declines.
♪ taylor: i am taylor riggs in san francisco in for emily chang and this is "bloomberg technology." coming up in the next hour, clicks before q. black friday sales breaking an online record. how the holiday weekend spending will turn out following cyber monday. plus crypto crackdown. , china continues its assault on crypto exchanges, and currencies are feeling the pressure. we will have the numbers.