tv Bloomberg Markets Asia Bloomberg December 23, 2019 10:00pm-11:00pm EST
>> you can call it a quiet day. this christmas eve. investors keeping a close eye on the trilateral summit in chengdu. korea cannd south somehow ease relations and tensions, that could provide momentum for markets going forward. taking a look at where we are , asian stockstime are trading at the highest levels of the year. slightly higher by 0.1%. it has been a spectacular year for chinese stocks, up 31% year to date.
say cuts are needed to pick up momentum. let's turn the page. let's look at where currencies are at this point in time. dollar-yen, taking a look at 1.0939. taking a look. the shock of flooding. it consolidates in. pretty much a subdued session. at 1197.r index rishaad: let's take a look at india. the session is about 43 minutes away. futures at the moment down a fraction. getting you up to speed with what happened. a very topsy-turvy day in mumbai. at the end of it, we were pretty
much where we started, flat, but we did have some pretty big deltas. rupee continuing to weaken. against a little bit of dollar strength among some of these emerging-market currencies. thething which had gone by wayside a couple of weeks ago when we saw the reserve bank do nothing with interest rates. 50, bute looking at they did not do anything. some of the verbiage has turned more dovish. as a result, people have been sending yields down. 6.57% in the 10-year note. let's move things to first word headlines out there. >> thanks. south korea's new property rules criticized as negative. their effectiveness in curbing prices is being called questionable. they were announced as dirk
owning and attempts to rein in indraconian attempts to rein skyrocketing home prices. china will further lower the amount of money banks must put aside as reserves in a bid to reduce the cost in small firms. the pboc will cut the reserve ratio and explore increasing re-discounting. the plane as part of official efforts to ease the liquidity crunch. hackers are being accused of using increasingly sophisticated technology to spy on regional rivals. a cybersecurity research firm, crowd strike, says the main vietnamese group is believed to be linked to the government. experts say it specifically targeted the automotive industry and american businesses with links to the vietnamese economy.
almost $1.5 billion in financing secured from china, the money coming from local banks, and an soon.cement may be coming tesla climbed to a five-month high. global news 24 hours per day. this is bloomberg. let's get to our top story. muilenburg,g dennis they are struggling to announce the 737 max crisis, boeing is telling to halt shipments. our correspondent is watching all of this. where are we with this? we have the chairman becoming the ceo. that is the position dennis muilenburg used to have. >> dennis muilenburg is out.
david calhoun is in. for how long he will be in, we don't know yet. he is 62 years old, he is nearing the retirement age. is he the right person to lead them going forward? perhaps, he is being brought in d repairr the damage an the damage with customers. a lot of customers here in asia, they have tona, repair relations with suppliers, as you mentioned. dennis muilenburg repeated the mantra and part of that was driving a hard bargain with suppliers, driving down cost. dennis muilenburg had a laser focus on reducing cost, in cash, and return on equity,,. some say perhaps at the expense of safety. obviously,s 20/20 given the couple of crashes. in the long list of things that he must do in addition to
repairing relations with the faa, customers, suppliers, and the flying public. haslinda: it is a long, long list. be david calhoun's first order of business? thet probably has to be regulators, the faa. we are getting word that a second batch of emails have also been turned over to the faa. again, there was another set of emails in october which shed light on there might have been some hiding of information. there were definitely some simulator tests that pilots had system, about the mcas the pitch augmentation system that was employed in the 737 max. perhaps that information was not passed on as early as 2016,
2015, on to the regulators. there was a lot of animosity to dennis muilenburg, and the regulators. within hours of dennis muilenburg stepping down or retiring or ousting or whatever you want to call it, the faa did put out a statement saying the first order of business for the new leadership is to repair the relationship with the regulators. that would be number one. you need that before you can get airworthy certification for the 737 max, if at all, i might add. rishaad: it is interesting here. the instant messages that were not disclosed, that perhaps got down to the deepest issue. one thing that dennis muilenburg was perhaps in -- implicated , the the closeness coziness of the relationship to the regulator. >> that's right. that is part of the criticism. historically, boeing has had wide latitude with regulators,
including the certification process for the 737 max. they also had warm relations on capitol hill. is being reviewed right now in light of these two accidents and the subsequent relationship that has not improved between the boeing c-suite and washington, d.c., regulators, and lawmakers. haslinda: thank you so much for that. a couple of headlines crossing right now. sale.igh tiktok's they would prefer to maintain full control of tictoc -- tiktok and the majority stake. that would stretch much more than $10 billion. we know that the u.s. government is threatening that particular
success is officials in d.c. want them to address the security threat. still ahead, the reserve bank of india has been finding new ways to push money into the weak economy. this time, there is a twist in the tale. more on that next. rishaad: first coming up, the s&p 500 closing higher for the eighth time in nine sessions and analyst's see that rally continuing. this is bloomberg. ♪
selloff is greater than usual because the optimism of reflation. out because broken too much optimism essentially has been priced in here. our next guest sees a continuation of the current equity rally at least until the end of january. guest.ring in our he joins us from los angeles. i was the weather? , youing of the correction are seeing a correction, as well, no? perhaps that the end of the first quarter, second quarter. >> all right, so we expect to the good mood to continue at least until the end of january. that is because of three main factors. geopolitical risks are abating. the u.s.-china truce being signed. we will likely see some kind of provision with respect to the brexit saga and a lot of investors have been on the sidelines and are still on the
sidelines and they will have to put their cash at work at the beginning of next year. this together with the accommodative central banks and potential for skill stimulus are likely to make equity markets start on a good foot with respect to next year. then as often happens, the market might get a little bit ahead of themselves. therefore, we would be a little bit cautious around the first quarter of next year with potentially some profit taking and correction materializing. haslinda: you take a look at vo l, it is looking pretty cheap. >> vol is cheap. take advantage of that. you can take advantage of that into ways. had your portfolio. also take advantage in the long side. going those long data calls will add value to
your portfolio. that is in terms of hedging your portfolio. when you take a look at emerging markets best performing in the 10-year, going , what does that rally depend on? will it depend on china, china's growth? >> it will be two main factors. first of all china. you are absolutely correct. we know that is one of the main factors. after this truce and the fact that we see the white house having a little bit of motivation to find an additional agreement around q3 of next year, before the election, that could bring an additional leg up for emerging markets. it is going to be very important of the u.s. dollar performs. we know very well that a strong u.s. dollar goes against emerging markets economies in general. as we expect the dollar to week and next year, that should add additional fuel to emerging market rallies that we have been
seeing. haslinda: we heard from china that -- go ahead, rish. rishaad: yes, we want to get to our question of the day from the mliv team. if wer could stocks rise get treasuries reaching 2% yields and beyond? factors that i thatoned before, the fact it is going to be the beginning of the next year, we think the global equity index can increase another 3%-5%. even if u.s. treasuries do go to that kind of value, we don't see that as being a huge stumbling block with respect to equity performance. should it increase further than that, it might start being a problem. keep in mind that once again, we have been worried a lot the last year of the 10-year spread becoming negative. now the longer term are going
up. the spread is becoming more positive. you could see that as a good sign. we think equities can keep going quite a bit. we mentioned 3%-5% to the end of january with nasdaq continuing to be the outperform her with our view. rishaad: many people we have have seen theing emerging market space as the destination in 2020. are you in that camp as well? selective emerging markets having a lot of value. we agree with that. a lot of that has already been done, i would say, it is already priced in to the current valuation. we continue to like u.s. markets, even though from a valuation perspective, they are a little bit on the expensive side. we think that will keep going. in the emerging market space, china is not exactly and emerging-market,, but chinese equities still have quite a lot
of room to go, even from these levels. overall, basically a lot of people will be thinking about emerging markets. we think in the short-term it will be supported. you don't want to get into a crowded space too much. when everybody goes for the exit, the door for the exit is a little bit small. we would probably remain bullish for the short-term. we would not advise to go heavily overweight emerging-market space. rishaad: do you think the areral reserve and the fomc going to have a fairly quiet few months anyway? what does that mean in terms of for stimulus and does it give you an idea of what that kind of dovetails into with markets -- for market participants such as yourself? >> i definitely hope it will be relatively quiet. that should keep doing quite well. overall, we think the fed will not act much next year. we still see our base case scenario being one more cut. that is because global growth
remains elusive for the rest of the world. even though u.s. data remains robust and is likely to remain relatively robust going forward, we expect there to be a gradual decline. it will probably not want to risk and will basically err on the side of caution. we still do see one more cut into 2020. a slight risk of maybe two cuts. we definitely do not see a hike in the fed. that is likely to continue supporting global valuations overall across the board. rishaad: one more cut for the fed. the ecb seems to have its hands tied. very little they can do running out of ammunition. fair assessment? >> absolutely. we don't think they will do much more than what they are currently doing. potentially an increase in the current qe, but we do not see that is the base case scenario. we think they will keep the
current accommodative package. they will hammer the need for fiscal stimulus, which is required in europe, which most of the european countries have space for. politically, it is a little bit harder to implement than monetary stimulus. we do not see the ecb acting much. that would be the little difference into next year, why we might see euro-dollar moving a little bit higher. haslinda: all right, thank you. joining us from los angeles. of course, happy new year and merry christmas to you. plenty more to come. this is bloomberg. ♪
terms of how companies actually deploy how they are treated. to thell issue guidance chinese news agency. that is currently what we have coming from the people's bank of china and through the china news service. have oneith china, we of the rare global hits, tiktok. the american government is threatening that success. bloomberg has learned that the company may be weighing a majority stake sale to ease that pressure. of the options that they are considering at the moment. >> that's right. bytedance is weighing a range of options, including aggressive legal defense, possibly spinning off tiktok as a separate unit that is completely operated out of the u.s., and even selling a majority stake in tiktok.
all of these talks are very preliminary and the company has not really made any decision. rishaad: what about the headquarters? that is another story. >> bytedance that's right -- that's right. bytedance is operated out of beijing. the company is looking for a global headquarters outside of china. they are in the process of looking at that. this started because the u.s. is doing a review of the acquisition of the business that became tiktok, which is musically. in 2017. part of that is because the company has become so huge, taking the u.s. by storm, especially among teenagers. they are saying this app is dangerous because it understands what your child is doing in their bedroom. if the chinese government wants to access that data, there is the potential. bytedance is denying that and saying it is operating and storing its data out of the u.s.. how would this affect
its potential ipo next year? theiktok is very much central business that is underpinning bytedance's humongous valuation right now. if they want to take advantage of that, ideally, they would have to go public as soon as possible before even more clouds start gathering over there u.s. business. i think it is quite essential that they figure out the right strategy and then also what we have been told is the company does still want to control, maintain its control over tiktok , even if it sells a majority stake to outside investors. rishaad: thank you very much indeed for that. bytedance and tiktok. you are looking at airline surrounded by controversy because of "notrage -- "nutrage
." [laughter] rishaad: remember the --haslinda: remember the nutrage incident? criticizing how her brother has been running korean air. she says her brother is ignoring and disobeying the wishes of their late father. the first time any member of the founding family has voiced public discontent. take a look at how the stock is doing. your to date, down 14.5%. buys, one hold, one cell. forget the rage, it is delayed by -- it is still a buy. go in your bloomberg.
rishaad: thank you very much. let's have a look at what is happening with the chinese markets as we get into the lunch break. getting a bit more conviction. the shenzhen composite up by 0.2%. as we go for that 90 minutes of lunch. elsewhere, the little change we've got. volume already thin. half an hour before the trading community goes off for its lunch break in hong kong. taking a look at what else we have going on. the s&p 500 losing higher for the eighth time in nine sessions. the seasonal factor. some volatility. that is china markets. generally speaking, muted christmas eve. just to say we've got global msci world index at successive
rishaad: we are looking at live pictures --haslinda: we are looking at live pictures out of chengdu. it is where the trilevel summit is being held amid fresh threats. north korea said it may fire a long-range missile. this is the first meeting in 15 months of the three countries. we know that the nuclear talks have stalled as we inch closer to the year-end deadline set by kim jong-un. we are seeing live pictures out of chengdu, where the trilateral summit involving japan, south korea, and china is being held. for now, let's get our first word headlines. boeing has ousted ceo dennis
muilenburg after a tumultuous year that has seen two fatal air crashes, the grounding of the company's most popular plane, and a failed mission to the international space station. he leaves after being publicly rebuked by the aviation regulator for his handling of the 373 max crisis -- 737 max crisis, boeing pushing too strongly for the plane to be allowed back into circulation. narendra modi is set for an election defeat in the eastern state. he struggles to contain nationwide anger at his religion based citizenship law. violence has seen at least 24 people killed. the economy growing at its lowest pace in six years and unemployment at its highest in four decades. five people sentenced to death for the murder of journalist jamal khashoggi. the saudi court ruled that the killing was not premeditated.
it said it did not have enough evidence to incriminate two senior officials close to the crown prince. he has repeatedly denied sanctioning the killing, but the u.s. says it could not have happened without his knowledge. credit suisse has blamed its ousted coo for a scandal at the bank. they painted him as a rogue operative. wasas been blamed and allowed to resign in october. he has now been declared as having been fired and is set to lose millions in stock. global news 24 hours per day on air and on quick take on twitter. i'm paul allen, this is bloomberg. let's have a look at what is going on in the markets. japan just coming back from its lunch break. down a fraction. that still remains the case.
a bad time of it at the moment. korean air. a family feud has been simmering theover the last few days, share price of korean air has been falling. kospi has been dragged down because of that. let's take a look at what is going on in chengdu. this is where we've got this trilateral summit taking place between south korea, japan, and china. a joint meeting briefing. one of the reasons they are together is to discuss trade and also perhaps trying to resolve the differences which have been causing a big rift between seoul and tokyo and the chinese perhaps leading a mediation rule with regard to that. haslinda: that's right.
it is important that the two countries, south korea and japan, ease tensions between the two sides. to give us a sense about the two sectors, they are pretty much important to the two countries. as much as the leaders may want to mend ties, you have to take a look at public opinion here. it has become really crucial. pollggests -- an opinion says 30% of those in japan are in no hurry to improve ties with south korea. perhaps they can't achieve as much as they want to if public opinion is at that stage. rishaad: yes. we are just getting a quote. pompeoing with mike about, they have been talking
about global or geopolitical situation at the moment. -- it occurred after the arrest of the chair of huawei in china -- canada. that is also taking place elsewhere. they are also talking about venezuela. that is the minister of foreign affairs and mike pompeo discussing. this is chengdu. we do have them having a joint press conference. let's get a little bit more now on what is going on there. our chief executive editor for greater china in beijing. we are also joined by our breaking news reporter in seoul. let's start off with you, john. tell us the news from beijing as
china perhaps tries to mediate in the differences between seoul and tokyo. >> the world is an uncertain place and we would like to afford as much certainty into it as we can. having sold and tokyo having -- seoul and tokyo having this spat makes life very hard for makes things difficult in china especially when we have all of these tariffs from the u.s. in place. rishaad: china is stepping into the breach. these are two american allies in a way. perhaps this is another sign that the u.s. is turning its back on foreign affairs in some regard. >> beijing definitely sees itself as playing an influential role in this region.
i'm not sure that the u.s. has totally given up on that just yet. the u.s. still has a significant military presence in the world. largesttill one of the trading partners for all three of these regions. washington is still going to exert a big influence. calculation is getting back -- bigger by the day. us an idea of the view from south korea. this disagreement with japan is one which goes back decades right from the second world war and the use of so-called comfort women from korea by japanese soldiers. >> this is actually where the trade spat with korea and japan started.
with them asking japanese governments to compensate for the forced labor workers that -- or at least the government says that it led to japan imposing these export controls on south korea. aren is claiming that there security concerns to be paid attention to in terms of how south korea uses the materials. used is why south korea the same excuse of security about how it is really taking a toll on the relations between south korea and japan. leading to them opting out of a military intelligence sharing packed. south korea and japan no longer of sharingin terms
information. the military activities as well as china. >> isabel taylor those -- take .s through what can be expected >> the fact that they are actually having the talks is definitely a positive step. we have seen a few mild hints in the last few weeks. there has been a round of trade negotiations over those export controls.
i think that there is a common view that these countries need each other. but abe has said he sees the onus on south korea to create the right situations to move forward whereas south korea is very much blaming japan for what's going on in their relationship. it's hard to imagine anything positive coming out of this meeting. >> john, i want to take you back to this conversation. xi jinping met with abe yesterday and brought up hong kong. take us through the conversation. >> abe did bring up those
issues. it's not the first time. i would expect he would continue to do so but i don't think those issues are likely to bring warming between china and japan. president xi jinping is expected to make a trip next year and it will be the first time that a head of state has made a trip to mainland china and a long time. >> how much improvement has there been in terms of relations and where will it go from here? >> in terms of china and korea the relations between countries have slowed down after the u.s. deploy a highd to altitude area of defense act to tackle missiles from north korea and deployed it in south korean
territory and that led to a lot of not only the chinese government but chinese companies as well which has really taken a toll on chinese and south korean relations. when he met xi jinping yesterday he said that despite some , they said that they will overcome certain differences. an attempt to get over some issues and put them in the past. >> our breaking news reporter in seoul korea, and our politics reporter in tokyo. plenty more to come including r.b.i.'s operation twist. this is bloomberg. ♪
>> time for a quick check of the latest business headlines. itsgovernment may delay plan to sell hundred billion dollars in shares after scandals and its insurance unit. struggles ofhat corporate governance and a tumbling stock price or making it difficult to offer that third and final range of shares. for a second consecutive year, it will run ship making throughout the holiday season. more than doubling capital spending in the business to $2.5 billion this fiscal year. and in the latest bid to buy out
public shareholders of the summit. they are raising the offer by about 3.5%. they are engineering a complex deal that would create a japanese champion to compete with global giants such as google, amazon and tencent. rishaad: indian markets just opening. let's take a look at what we have so far and what is going on . >> thanks for that. indian markets have been trading around their all-time high levels. the nikkei is just opening at a nifty bank is seeing cuts of about 28 points.
becauseimportant week they have the monthly expiring today and with tomorrow being a holiday we could see some pre-expiry trade taking place. but what is supporting the indian equities is the lower volatility. and they have been showing a lot of interest in the last seven trading sessions. we've seen an infusion of $1 billion of money into the indian equities. volatility seems to be on the lower side. tell us more about the arbitration with the government. the line is a heavy weight on the index. it was down yesterday as well after the news came that the
deli high court in india has asked for details of reliance industries and its partners. this comes after the indian stopnment had petitioned a -- saudi aramco. it had been announced that they were seen as a minority state in business with saudi aramco so the government has asked to see all of the business. the bloomberg report mentions asked the partner has indian unit to sublet the details and this comes after the government has been fighting with the company for its profit sharing and royalty payments. coming in.ws void a phone is not reacting much but it is being reported that the licensing could be cut in india.
rishaad: have a merry christmas and thank you very much. just one headline coming through from the trilateral summit. there is a big expectation of this upcoming summit. all thingsack to india and we are joined by -- the head of asset management. we have equity markets at record ishs and an economy which slowing down quite rapidly and on top of that we have credit issues. how do these things inform each other. that does seem like equity markets are ignoring the fundamentals. >> i don't think that's true because what happens is markets
try to move themselves ahead of what is happening. if you look at the strong point we are seeing a lot of liquidity injected into the banking system. rate cuts as high as 35 basis points and that's a strong factor to pump the economy. if one aspect of the economy is not front -- firing, every aspect is not going. world slowinghe down at a faster pace than india is. so it looks like margaret -- markets are trying to portray itself ahead in terms of what the future holds. theaad: i want to move to reserve bank of india. there have been so many rate
cuts that nobody can qualify what happened. what does the reserve bank do now. what about unconventional measures? what do you make of them? >> definitely the governor has moved in. -- it is the first of its kind in india. the -- fromdo with the banking sector to the oil sector. people are ascribing this to government bonds. that seems to be one of the key reasons why there is general apathy for the credit sector. along with the unprecedented move in india, there is an attempt to bring down -- between
the government bonds. be hope is that there will with the lesser incentive to own these bonds, you start transferring -- i think this is theeat step in making signal for the yield curve to flatten significantly from the current level and we are seeing that happening as we speak. is this one and done or are we expecting more operation twist from the rbi? >> this did not, according to us, be a one stance. it will not achieve the desired outcome. this has to be calibrated. the quantum in the magnitude and the periodicity. that should achieve the desired objective. >> before we let you go, looking
at the economy, we have inflation spiking and growth slowing. are we potentially looking at stat-flation. how do you perceive the market going forward? in thebefore, we saw price of onions and tomatoes. one cannot say that that inflation is due to the limitation. we also have to look at -- the economy. i don't know we can say in terms of india calling it -- it should be more transient. what weility is perceive, we are clearly looking at economic prospects. you so much, lakshmi. still to come, asia's richest man is better off this year. we will take a look at his wealth.
>> let's talk wealth. it's been a pretty good year for asia's richest man. oes, theo to rich g indian tycoon added almost $17 billion to his wealth as of this week. taking his net worth to $61 billion. in comparison, the alibaba founder's net worth grew $11 billion while jeff bezos lost about $15 billion. for more, we're joined by pierce and j -- pierre sanjay. what led to his wealth? we notice that the founder of
spend on saudi. 20%an watch out for his stake in oil in the coming year. he has announced he will be listing his telecom arm in the coming year. he's a legitimate platform writingwhere he will be a global strategy. there is a lot to watch out in 2020 and onward. rishaad: thank you very much indeed. thank you so much. have a great christmas. a quick look at what is going on market wise. flat data so far. we have also the summit taking place. trilateral china, south korea, and japan as well. shinzo abe speaking there.
♪ ♪ taylor: i'm taylor riggs in san francisco, in for emily chang. this is "bloomberg technology." coming up in the next hour -- stock record. tesla shares touched $420, the goal price elon musk outlined this past summer. he joked about the milestone on twitter. how much higher can it go? plus, automated hacking. in 2020, online risks will morph into new threats. is your information fe