♪ betty: tesla burning cash on a model 3. the stock jumping in the after-hours. yvonne: apple almost single-handedly drags wall street higher, pushing the dow to 22,000 for the first time. betty: president trump weighs action against china for alleged violations of intellectual property. yvonne: shinzo abe shakes up his cabinet. they could create a leadership

challenge and the end of abe -nomics. betty: i am betty liu in new york where it is just after 7:00 p.m. yvonne: it is just after 7:00 a.m. here in hong kong. i am yvonne man. we are looking pretty mixed leading up to the market opens in the region. we did rally to 10 year highs on asian stocks. perhaps a bit of a breather to look ahead to u.s. jobs report and the earnings that have just come through in the last couple hours. especially with tesla. the conference call with the elon musk a just ending. quite a few headlines coming out, including him talking about the compact suv, the model y. how many more letters in the alphabet before he runs out of cars to produce? .e saw apples lifting shares tesla is up over 7% in the

aftermarket. be the same for u.s. markets tomorrow. in the meantime, the tech shares in focus in asia, your markets are about to open. yvonne: the dollar on the defensive after fed speak. it could be a good indicator of how asia will play out today. could be more confident than expected. in new zealand, down in the nzx 50 1/10 of 1%. the kiwi reeling from software and employment numbers at .7419. doldrums, fedthe speakers urging caution overfed hikes. a 15 year low for the dollar. in the australian, a bounceback and oil price. gasoline demand at a record. weakness in the asian session for wti. 63. aussie sitting at .79

upside at the open for the asx 200. a big day for the prime anister, set to announce potential cabinet reshuffle after his approval rating plummeted following the tokyo election follow. breaking news coming out of south korea, a current account $7.1us number coming in at billion. from the what we saw previous month of may, up $5.9 billion. we just got that two hours ago. that good balance, seeing an exportsn terms of growth from south korea, rising some $9.7 billion. how koreatch that and reacts in an hours time. betty: just a quick reminder, let's bring up the board about the u.s. markets closed.

apple helping both the nasdaq and dow. closing above the red line, as you can see. the nasdaq has seen bigger losses, ending the day unchanged, the same as the s&p. one stock that is rising is tesla. tesla shares are soaring after second-quarter earnings beat wall street expectations, losses narrowed more than expected. using ak has been conference call to talk more about his international plan. we expect to keep the majority of our production in the u.s.. but it makes sense to establish a factory in china and europe to soak up the markets there. just to sell cars in

california, but around the world. betty: it is always odd listening to conference calls, it sounds like he just woke up. we have a reporter here to break down the numbers. it is interesting, he mentioned the model y. curious to hear about that because it seems like something new there on that call. >> they had hinted the model y would be a new platform, new architecture. he walked that back today and said his team old him back from the cliffs of insanity and the model y will share attributes with the model 3. that was new, that the model y will not be its latest platform. betty: that will help with the costs. ms. byrne rate in focus, they still had $3 billion in cash at the end of the quarter. how much cash will they continue to burn?

is this company on track to meet the target they outlined in the call? >> they are sticking to their production timeline. are always caveats, there could be an earthquake in california or a problem with the server -- with the server what -- with the supplier. on cash, they are comfortable. think the does not capital raises necessary this year although they are considering looking at raising debt. they do not seem to need cash to get through the end of the year. they will be in a more comfortable position in the second half as more orders for the model 3 come in. when it comes to the production side of things, we were talking about the rate we went from zero to 70,000 cars produced. do we get color in terms of how

they are going to hit this target of half a million? dana: no. it was really an interesting call. was in a good mood, the happiest he has ever felt about tesla's future. he hinted they will be ringing out the electric semitruck in the fall. they focused on the response to the model 3, which is been overwhelmingly positive. they clarified they do not have reservations, there have been cancellations that they still have many reservations for the model 3. there was a statement that the model 3 would cannibalize other sales. they stress that is not the case, that they can exist -- sell existing models while they ramp up of the 3. yvonne: this is further evidence people are willing to overlook the numbers.

david kirkpatrick was saying earlier in our that this religious beliefs that elon musk really delivers, further upside to the stock, do you think? dana: most of the investors in the company are thinking about what tesla will be like in 10 years. it is not a quarter of a quarter, it is a long-term investment. you have to look at the terminal. the top five investors in the company, they own 55% of the company. , others, they are in it for the long haul. they are thinking about tesla's ability to disrupt a $1 trillion auto and energy market. as long as they continue executing despite inevitable hiccups, people are waiting to make -- willing to wait for the mission to be fulfilled. betty: you were talking about their battery chief. , ateparted the company tesla.

how big of a concern is this, at a time when they are going through production hell? timingt is intriguing and i would love to know more. he is fluent in japanese, previously worked at panasonic. he was the linchpin of the panasonic-tesla relationship. he helped to ink the companies. i do not know why he left the company. it is very interesting timing. tesla has grown enormously. it is a company of 33,000 employees. it is not unusual to have executive turnover at a company of this size right now. betty: thank you so much. let's get to the first word news with alisa parenti. alisa: the u.s. may be preparing new action on china in what the trump administration sees as violations of internet -- intellectual property.

let's getthere seeing if steel s threaten national security. a trade that gives them the power to impose tariffs without going to the wto. trade experts say china could appeal and would probably win. theident trump has signed russian sanctions bill forced on him by congress. but he says he is reservations about legislation he called significantly flawed. he said it encroaches upon presidential authority, may hurt america's ability to work with allies, and could have unintended consequences for u.s. companies. however, he said is an administration would stand by the letter of the law. seeakers in brazil could the downfall of president michel temer. they will vote on whether he should be suspended and try for bribery. wash a rapidly rising car graft investigation. temer retain support in the

chamber of deputies. japanese prime minister shinzo abe will sign -- will shake up his cabinet today to get his government back on track after a slump in popularity and a humiliating tokyo election defeat. the long serving foreign minister is expected to lead, potentially freeing him up. has increased between different factions. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: let's stay with the expected cabinet shakeup in japan. it could lead to a leadership challenge and potentially the end of abe-nomics. good to have you here. let's back things up and talk about the prime minister in particular. is a his reputation repairable? >> i think so.

does something new or more innovative, it could be possible. yvonne: is this cabinet reshuffle going to be innovative? >> already we have news we that there will be a new appointment. reshuffle cannot push up the approval rating. the public did not necessarily love the prime minister, but he brought stability. you say there is a 40% chance he might step down in light of this scandal after the tokyo election? what happened the markets after that, will abe-nomics go with it? there was monetary policy

and fiscal spending, and a structure reform. there was monetarywhat was sucy first one. even though prime minister ab stands down, as long as the monetary policy remains the same, it won't have much effect on the japanese economy. betty: what is the chance he gets reelected for a third term? ratingif his approval rebounds, it is possible. it is not reliable. also, there is a leadership in december 2018.

more than one year later. he can push up the approval rating in that time. betty: he has enough time, that is certainly true. more than one year later. he can push up the approval rating in thatbut how exactly ct -- what exactly does he need to do? tohru: i think it is a bit difficult now that his approval rating is going lower. he has to do something which i cannot imagine. it is difficult to tell. fiscal spending or tax cut approval, is not enough to push up the approval rating. it have to be really innovative to push up the approval rating? i will be devils advocate and say, why not a fresh start and a fresh face in the government? we arears of abe-nomics, not seeing wage growth, structural reforms have not gone anywhere. why not in december 2018 we say perhaps mr. kuroda, a new term for you?

we could have a new governor of the boj. but there are limits to what the boj can do from here. the boj has done a lot already. i think prime minister abe, they have to do something on the structure of reform. the japanese economy has not changed much. yesterday, we got the first market operations from the boj for the month of august. a copy people by surprise at the boj refrained from cutting it set purchases on friday. even though we have seen treasuries pulling the long and higher as well. the last time we spoke to enable you said it was one of the more riskier aspects of boj policy. do think there is more hesitation from the boj to try to reduce of their debt

purchases in fear of being misinterpreted as tapering? the boj is concerned about their intentions. but they are reducing, tapering. care.e market does not basically, the purchasing amount should be no problem. the problem is control. 0% is maybe too rigid. [indiscernible] we see the euro yen at 1.31. what is your target for the next six months? 1.05 by the middle of next year. head of japan markets,

thank you. of donald amid chaos and deadlock in washington. betty: u.s. tax reform or tax cuts? we discuss why you might not be easier for republicans to pass that reform versus health care. we are joined by a policy advisor to both mitt romney and marco rubio in there presidential campaigns. this is bloomberg. ♪

yvonne: breaking now is -- breaking news out of brazil, michel temer with enough votes to avoid a corruption trial. the latest we have so far is 513 members off congress have voted to block the investigation on the president with 12 absentees and one abstention so far.

so far, meeting this opposition. they can no longer gather enough votes to let the process continue to the supreme court. tos paves the way for temer cling to power until his term and in december 2018. shelved until his mandate ends for these particular bribery charges. some analysts are saying there could be further charges brought and then the whole process starts over again. temer.ot 100% clear for let's get back to how the markets traded here in the u.s.. we were focused quite a bit on apple shares. now we are focused on tesla. that will drive the dow even further past 20,000. su keenan with more on the markets. su: we had apple driving the market higher. we did not pull back as we got to the close. we did hit 22,000 with the dow.

we will take a look at the makeup of behind that big move. stocks, apple one of the big movers of the day, up as much as 6.5% at the peak, it was almost a 5% gain. an optimistic sales forecast of the doubt to the record. this sold 16% at the open. a lot of stock specific stories. ipo'sone of the biggest of the year, falling below, dropping this week because of the drop off and falling to an all-time low for this relative newcomer, down another 3.5%. go to the bloomberg at g #btv 333. we will take a look at the dow highfliers. apple is the orange of the top, and you look at boeing's earnings, and half of the gains.

green is united health care, mcdonald's is in purple, and caterpillar one of the reasons we have seen the dow raise higher. onty: we will keep our eye the markets. it is interesting the markets have shrugged off any of the troubles going on in washington. someone who knows a lot about how washington operates, with the hoover institution and former policy adviser to mitt , great to marco rubio see you. what is incredible is we had people on the show recently who said, it is incredible how the markets have shrugged off anything going on. health care reform did not pass, there is very little chance, it seems tax reform will pass. and yet markets seem to go up. is there any chance for tax reform?

the dysfunction in washington is baked into this market. it is not working. health care reform is a classic example. you have a lot of promises made. republicans may promises for seven years, nothing ended up happening. cuts are different. if they get a tax reform, it will be a 2018 proposition. notwithstanding come all the rhetoric you hear from the house, senate, and white house, this process will take time. there is much more natural agreement between republicans on tax policy than health care. that does not necessarily make it easier to get to the answer they need to get to. betty: steve mnuchin was on a panel and said, we are going to be successful. we will pass it. i want to play a little part about what he said. steve mnuchin: of course they should believe it. we said that, speaker ryan said

committed tol 100% getting tax reform done this year. in june, hewas back said it a few days ago, as well. he keeps saying it, but everyone around him says it is not going to happen. where is the disconnect? lanhee: it is important for the secretary of the treasury and other officials to convey confidence it will happen. at the end of the day, they will get to an agreement on tax. it will take longer than we think. but i think they will get there because it is a huge issue. have campaigned on the issue of tax reform, if not just tax cut. that, it is a more natural fit for republicans. they are more comfortable talking about tax reform than other topics. we will see leadership coming out of the congress. people like paul ryan, a guy named kevin brady who runs the key tax writing committee in the

house, they are committed to getting this done. i think that leadership will be very important. yvonne: it is interesting because they drop to the border tax adjustment, that seems to be dead right now. but it raises question marks because it is supposed to be providing $1 billion of revenue. how do they live up to the promises the gop made? lanhee: they will not. the so-called big six in the the people that will be the key policymakers in the congress and in president trump's administration came out with a statement last friday that talked about what their priorities will be for tax reform. one of them was not revenue neutrality. it was not saying they will get to a situation where they could offset will be the key policymakers in the congress and in president trump's administration came out with completely the cost of any reductions in the rate. what you see in the u.s. is a tax cut, not necessarily tax reform. yvonne: given the terminal

within the trump administration, we have spice or out, scaramucci out, we have john kelly as chief of staff. is he going to turn things around? it is a potential turning point for the trump administration. how much can he accomplish? lanhee: we have to be careful not to us -- overestimate this. i think kelly will restore much-needed order. at the end of day, the chief of staff is responsible to the president. ishave a president who highly unpredictable, potentially volatile, some would argue. it is difficult to manage a staff in that context. i would not expect too much to change. you may hear less about the drama, cls on the front pages, but it will still be a difficult dynamic. betty: what about the debt ceiling? lanhee: that will take up all

the energy in september and october. tax reform will have to wait. the treasury secretary wants a clean bill, it will be hard to get that through congress. betty: one feature we would like to bring to your attention is our interactive tv function. you can find it at tv . you can watch us live and dive into any securities or bloomberg functions we talk about. you can become part of the conversation by sending us instant messages during our shows. this is for subscribers only. ♪ yvonne: it is 7:30 a.m. hong

kong morning. minutes away from asia's first major market open. p.m. wednesday30 here in new york. it is muggy. in terms of the market, i would describe it the same. apple savesr lower, the day for some of the bulls. i am betty lou in new york. yvonne: i am yvonne man in hong kong. you are watching "daybreak asia ." let's get the first word news with a alisa parenti. shares of soaring after-hours despite the company burning through cash at a record pace.

tesla's negative cash flow was a most twice the first months of the year. that is less than analysts were expecting. appletesla spent heavily to rot the model 3, which has almost half a million reservations. is that we canna make the car and get paid for the car before we pay our suppliers. the faster you grow, the faster your cash position grows. samsung's de facto bossa jay y. lee has denied corruption charges when he took the stand for the first time. he rejected accusations he okayed the payment of bribes to a confident of president park in exchange for a part in a key merger. he has been detained since february as part of a widespread investigation into corporate influence in government that brought park down earlier this year. of former prime minister is

they wereinisters -- acquitted with the court saying they could not be sure certain injuries suffered were inflicted by the police. they were accused of authorizing unnecessary force to clear protests outside the national assembly. hong kong lawmakers visited the site of a high-speed rail line linking the city to mainland china. it will run from hong kong to shenzhen and cost almost 11 billion u.s. dollars. it is controversial because of a cold location area -- co- location terminal where china can enforce its laws in hong kong. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. betty: russia and china are again the focus of the trump

white house with sanctions in trade on the table. ramy inocencio has more for us. first on those sanctions in president trump expressing big reservations on this. ramy: huge reservations. tied, -- his hands were and are now tied with regards to any russian sanctions. he cannot pull anything back because of this document he signed. he questioned the constitutionality of this. hethe other side of things, said he signed it for national unity. you are seeing a part of his statement saying he favors tough , by a bunch of other aggressors including iran, north korea, pressure. but he says the legislation is flawed. we are talking about chipping away at his own executive authority and possibly, some harm to u.s. companies and businesses.

this other quotes saying, while he recognizes the negatives, he says he is not going to let anything happen with the democratic process. he says he will address this with russian subversion and destabilization. looking at the russian side, vladimir putin did not weigh in, but is prime minister -- his prime minister did. saying, hopes of ties they thought were going to be improved with the u.s. administration are now at an end. now said, trump's hands are tied. he cannot lift those sanctions. congress said it is a rebuke. mr. trump, the house, senate, and fbi all have investigations going on. we cannot let you do this, we need to put an end to a potential unilateral meddling into all of these goings-on.

yvonne: shifting to what happened in china, we learned they are blaming a trade probe on intellectual property. what does that all mean? ramy: it is all talk for now. the possibility is rising for of whatonism, because the administration is trying to do with regards to the section i of the 1974 trade act. it has not been used since the 1990's. and hisbama administration went through the world trade organization to address trade issues. if it happened, it would allow president trump to impose import tariffs on other countries, if they deem it necessary. that said, china could retaliate. that would spiral into a trade war. also, what industries would be at the heart of all this?

china u.s. ambassador to weighed in on this and focused on the text fear -- tech sphere. >> they are pouring a lot of money into and protecting their companies. it is a problem. we have to deal with it strongly. but: not just technology, from equipment and transport. interestingly, china takes up half of the exports. huge losers on both sides if a trade war happens. thank you. we will stay with the story and bring back lanhee. what do you think in u.s. is trying to find in this probe? part of this goes back to politics, as it always does. the fulfillment of president trump's campaign promise to get

tough on china -- it is something we hear all the time. for president trump it was a key part of his platform, what galvanized his support, particularly in many u.s. states when republicans and not done well previously. you think about states like michigan and wisconsin where they were perceived losses. it was about fulfillment of a promise and playing to his political base, which will be important if he wants to be successful, should he decide to run for reelection in 2020. yvonne: he has pulled back on slapping steel imports and labeling china a currency manipulator. is there a sense this time is any different, that they are taking a more seriously, given the fact we have seen north korean tensions escalate? lanhee: it is a difficult dynamic. on the one hand, this administration would love to take a more aggressive stance when it comes to the trade relationship with china.

you see it in the personal the president has put in place at key trade offices. someone like peter navarro, a former professor at the university of irvine, has had a tough stance on china. you balance that against the fact to the u.s. is desperately working with china to resolve diplomatically the issue with north korea. there was no way that get solved diplomatically without real exerted pressure by the chinese. you are not going to get there if you're pressing them on trade at the same time. it has been scary to see the rationing -- ratcheting up of tensions between u.s. and north korea. over the weekend kim jong-un said he had ballistic missiles -- that hit the u.s. could hit the u.s. lanhee: could they get the warhead, weaponize those icbm's?

now apparently the test of the missile body suggest they could hit cities like chicago on the american mainland. it is a big concern for the united states. we have relatively limited intelligence about north korea and their missile systems. betty: we do not know what is true or not true. lanhee: all we know is what they are testing. we have also tried to test our deterrence. we had a missile test this morning. ultimately, no one wants a military resolution. -- the bad for everyone chinese, the south koreans, and the u.s., as well. which is why we continue to pursue a diplomatic angle. betty: speaking of military mien, you have john kelly, general mcmaster, many people in the military populating different positions in the cabinet in the white house. changesou think that how the white house machine

works? i am curious, because you worked inside it for so long. usually you are used to civilians running these positions. how does that change? lanhee: there is been a theory about the militarization of the u.s. administration because there are so many generals in civilian positions. i am not sure that is the right way to look at it. the question is, who does president trump respect? he respected generals, and people who have made money. part of this is the evolution of donald trump realizing what he needs an office. someone like john kelly, unaccomplished military man, he commands the respect of the president. others, not as much. this is part of what president trump believes he needs to make good decisions. it is not so much of their impact on the environment of the white house but there interaction with the president. betty: do think it will stop the leaks, which is what scaramucci

was talking about? lanhee: you will never stop the leaks. any u.s. administration always leaks. the question is, is it leaking strategically? others leaked with a purpose and this one seems to leak with abandon, for no purpose. ultimately, there are cultural issues that go beyond the chief of staff heads. yvonne: we wake up to more leaks on a daily basis. it has been quite exciting, i guess you could call it. we hear the russian sanctions bill. donald trump said he reluctantly find it at of national unity. is he hoping for better relations with russia? lanhee: it would appear that is his overall strategy. this is now the third u.s. administration in a row to underestimate what the russians are doing geopolitically. if the president is still hoping for that he will have to keep on hoping.

this is sanctions bill was passed with a huge majority in the u.s. congress. even if president trump had vetoed it, it would have been overridden. this is policy that would go into effect regardless of how the president felt. even if president trump had vetoedif you look at the situatn with russia, there is a bipartisan consensus. yvonne: thank you, stay with us. we will turn to u.s. politics next and look how president trump's reform agenda is tracking. plus, what a goldman sachs ceo thinks of the current regulatory environment. this is bloomberg. ♪

betty: this is "daybreak asia," i am betty lou in new york. yvonne: i am yvonne man in hong kong.

lloyd blankfein says things are moving despite the apparent policy gridlock on capitol hill. he told alix steel that regulatory sentiment has changed and traders are wary as they blur the lines of speculation. the one thing people are talking about, some things are ready getting done you have to say. a bit of a change in sentiment and attitude. the way rules are implemented, the attitude of the new class of regulators that are coming in. again, we operate in the are aial services, but we big corporate advisor in m&a. we get involved in every industry. every industry is regulated. a lot more highly regulated than it had been. instantaneous, in

some cases, does not need approval. some cases it does. it certainly does not need legislation. it is the weight existing laws are implemented and the attitude towards it. we are already witnessing a change in sentiment. >> talk about regulation. we heard the office of the comptroller is starting a process where companies like you can comment on what you would like to see world back. can you quantify what the world did? -- rule did? like what you want to roll back. throughthey were going financial regulation, you could regulate the amount of capital, processes. and you can regulate activities. you could do this transaction, but not that type of transaction. ule did waslcker r

impose a state of mind test. you could impose -- they wanted to dampen speculation. the line between speculation come out and market making, facilitating other people's trading, taking the other side of what your client wants to do, is also a risk-taking activity. the line between the two is blurry and indistinct. , it saysvolcker rule if you are taking positions, points of view, in anticipation or connection with a specific client operation, that is good. away from doing it that specific, it is not good. but if you are a market maker sitting at a desk, it is hard to know where that distinction is. betty: that was goldman sachs's blankfein.d

lanhee, we were talking about this during the commercial break. there's been progress made in rolling back regulation. one area of the trump administration where they have made progress, the regulatory rollback is one. they have done it either unilaterally or with the support of their majorities in congress. that affects the energy sector, financial services sector. in many ways, it affects people's impressions of the business friendliness of the u.s. if you look at the things that have been a drag on u.s. growth, the bad tax code. i do think this administration is working hard to address it. you never hear ceos say they want more regulation.

given this momentum here -- perhaps that is also the reason why, getting back to the original point, despite all this chaos in washington, perhaps this may be the reason why markets continue to move higher, right? the business friendliness continues in washington. is a sense they will advance policies friendly to business. whether that is accurate or not is not the issue, that is what the perception is. with respect to the regulatory area, there has been progress. is the expectation going to be so large and significant people will be disappointed if it does not happen? i would argue the opposite. people are not expecting too much fromis the expectation goie so large and congress. the actions they have seen so far, they like. the midterm elections are around the corner.

how will this affect the outcome? fundamentally, u.s. elections are decided by the strength of the economy, it is a huge predictor of how a party is going to do. how voters perceive the strength of candidate. for the republican party, they have not been able to do health care. remains a economy strong going into next summer and fall, that will be an incredibly important predictor of how well republicans will do. betty: so far? lanhee: so far, the labor market has little slack, unemployment numbers are good, growth is relatively anemic, but people are used to that. the issue we have to watch for his wages. we see stagnation, that will be a huge measure we continue to watch. yvonne: we have not talked about immigration, that is something we also learned overnight with this proposal from the trump

administration moving it more towards merit-based. is there a need for immigration to be modernized? we have not updated it in half a century. lanhee: the u.s. immigration system is in desperate need of reform. the questions asked, should we focus on illegal immigration or modernize illegal immigration? if you care about economic growth, fixing illegal immigration is more important. the president proposed moving tom a family-based system, one that is more merit-based, similar to what they have in australia and canada. that makes less sense. the big question is, will u.s. employers have enough access to low skilled labor that u.s. workers -- will there be enough to fill their needs? that question remains. it going to go in

terms of updating the current system so that u.s. remains competitive? we talk about trends in asia, -- friends in asia that say it is hard to receive a visa in the u.s. lanhee: one example is the h-1b visa process for high school blaber coming into the u.s.. you have a lot of brokers getting those out of the gate. those are oversubscribed right away. it is difficult to come to the united states and high skilled position. many will be educated in the u.s., have masters degrees, phd's. they say, congratulations on your degree, no leave the country. that system is not rational, it needs to be changed. whether trump gets it done or not is another question. modernizing the immigration system, that is the right way to go. betty: thank you so much for staying with us.

speaking of changing seats, gary cohn's name in the last few months has been surfaced as someone to replace janet yellen at the fed, come next year. what are the chances of that, in your view? lanhee: it seems to be good. there is a lot of palace intrigue. we have already talked about the unpredictability of donald trump. he said it is as likely he could keep janet yellen on. but in the past he said he did not like her. gary cohn is getting consideration, which is making some nervous in washington. we will have to see where it goes. betty: great to see you for this hour from the hoover institution . a former policy advisor to mitt romney and marco rubio. -- ofn get a roundup on that story and more. subscribers go to dayb on your terminal. this is bloomberg.

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betty: plenty more to come with asia's first major market open moments away. yvonne: let's bring sophie kamaruddin watching the opens. >> first thing we have to address is the dow to 22,000, that will trigger head scratching along the fundamentals. we do have a mixed start ahead when it comes to asian markets. investors weighing economic data along with earnings. earnings very much in play. under as we see volatility in the like of crude and other commodities. let's switch the board to show you what we are watching when it comes to the open in asia.

we are keeping an ion softbank -- an eye on softbank. kirinhave earnings from and asahi. watch a drop in samsung shipments in the second quarter, down 1.3%. market share has fallen to 23.3%. on rioey, keep an eye tinto. it delivered on a much anticipated dividend. that is from the iron ore rally. we are looking at june trade data out of australia, along with other ecodata. that is a brief look of what we are watching when treating its

underway in australia, japan, korea, moments from now. this is bloomberg. ♪

actionident trump weighs against china as alleged ip violation threaten. temer avoids impeachment. shinzo abe prepares her shake up his cabinet in a leadership challenge and even the end of abenomics. tesla jumping as a model 3 takes the stage. we'll ask what that means for the auto and energy market. this is the second hour of

"bloomberg daybreak: asia." it's just after 8 a.m. betty: just after 8 p.m. in new york. i'm betty liu. in terms of the market we have been watching the lower dollar, oil prices struggling at that $50 a barrel level. one brightsia, the spot, apple leading the way in stocks in the u.s.. yvonne: for the past hour, talking about washington, a political shape up in japan today.e happppening a cabinet reshuffle. we've beee hearing it will be some familiar faces. find out if -- it does anything to improve his up approval rating. let's get the latest on the market open. abe should give

up that means investors may give up on japanese equities mark ets. we have the nikkei 225 coming out the gate lower by 1/10 of a sercent, even as the eyyen i on the back foot. the cost be falling 2/10 of a percent. keep in mind, we have got the current account surplus of narrowing. that data coming out of seoul. ahead of australia, aussie stocks flat, but we have the dollar falling 2/10 of a percent along with bond yields. and keeping an eye on the forex space. some of the moves we have seen in the euro. it was moving towards 1.19, briefly breaking above that level overnight. for the first time since. 2015 1.20 for the currency could be

an site with forecaster scrambling back to the drawing board. the euro rally took them by surprise as fair few expected the euro to trade above 1.18. g#5034,an see, forecast have been trailing gains for the euro. it fell to as low as 1.07, oh, in april before it started take off this yera. ar. now adding 12% year-to-date making it the best g-10 currency and 2017. stronger eurozone data has spurr ed the rally. the stronger euro could be a drag on earnings and we might see a flurry of revisions when it comes to european corporate. plus, every 10% appreciation will likely knockoff 0.2% from inflation. betty: thank you so much.

now, brazilian president emer has avoided being put on trial for corruption. security enough support in the nation's lower house to cling to power. our brazilian bureau chief joining us. ramon, there was a lot of questions about whether he could survive this vote. now that he has and is not going to go to trial, how is this going to play out here? >> what we're expecting is for the official announcement to come out in t nexth couple of minutes, really, no more thane one hour, 100 votes away from the final announcement. but there's no way the opposition can reverse the tally. tmemer will not be put on trial and what the government -- they're telling us, they are going to focus on trying to kickstart what has been a

stalled economic agenda. brazil's been in the worst recession on record for over two years. the economic reform plan has been stalled. he now wants to get back and we know over investor confidence or the remainder of his term through 2018, he can push the economy ahead. betty: but what are the main areas of his policies now that he is going to stay on? what are the main areas that have better prospects now? they have been working on a number of smaller microeconomic issues. they're pushing a mining code that would open up the sectors are mining and aviation and oil. that are number of sectors have been closed for a long time. this government has been pushing to open them up to foreign policy -- foreign investment but the main reformist pension reform. everyone says it is necessary. brazil's. public finances have been battered by this recession if within two or three years, the reform does not come

through, brazil's finances are going to be in very deep trouble. yvonne: is it still far from over? what can we expect from the top prosecutor? raymond: this is one of the big potential pitfalls. we did actually repeat the entire process we just went through in the past. six weeks if the prosecutor in september, before he leaves his office in september, files more charges against temer, the whole thing with start over again. it would have to go through congress, it would take up time, stalled economic agenda and by that time we are moving very quickly into next year's willion season and it become very difficult to move any economic agenda ahead. yvonne: that could go back to square one. thank you. our dear chief out of bras ilia. >> shinzo abe is expected to shake up his cabinet today. his goal is to forces government

back on track after his popularity plunged to a record low and humiliating tokyo election defeat. the long serving foreign minister is expected to leave, potentially bringing him up for a run at the leadership. abe's struggles of increased tensions between ldp factions, one of which is headed by kishida. meantime, the possibility of btftbank piling on more de with a bid for charter communications is starting to spook the bond markets. the cost to insure against default has jumped 14.6 basis points. that is its highest since general. despite the claims that masayoshi son has lined up $55 billion to finance charter and merger with sprint. so much for the from the skies. ar airways, it dropped plans to invest in american airlines following a frosty reception. stake nod buying a

longer met its objectives, leading to "the latest public disclosure from american." qatar's decision marks a victory for american's ceo doug parker who it called for the proposal " puzzling at best and disconcerting at worst." pushedle's rosy outlook shares and the dow jones to a record and put tim cook within reach of a performance bonus currently worth $4 million -- $4 4 million. he would collect 280,000 shares, his shares over three years beats 2/3 of the s&p 500. he plans to donate most of his fortune to charity after paying for his nephew's college tuition. that should leave a fair bit still there. global news powered by 120 countries. in 120 this is bloomberg. yvonne: beijing's scrutiny on overseas deals has had wide

reaching applications for china. new information is that it is driven by president xi's top economic provides are -- advisor. for china to avoided japan style boom and bust. let's get the latest from tom mackenzie. what were the main takeaways of this report? tom: this report was commissioned by the top economic adviser to president xi. he put this report in front of the politburo on april 26. and what it looked at were a number of areas of the focus on japan's boom and bust. including things like the plaza accord on currencies, and japan's democrats that make it the oldest nation in asia in terms of its population. and also, on curtailing the overseas investments and acquisitions of some of its biggest private companies. is a recommendation that has been acted on already in china following that meeting. you will, of course, remember

the oversight and the focus, the stoplight that is now on the huge chinese conglomerate, the thoseof en banc, h&a, companies have pursued the kind of deals that japanese conglomerates were pursuing in the 1990's. japanese firms buying a pebble beach, buying a movie studios, buying up hotels, the rockefeller center in new york. that sounds familiar because that is the kind of deal that have been pursued by the likes of h&a. that is why they are under the spotlight. and this report is obviously consequential. it's been acted on, other recommendations have been put in place are things like curbing excess borrowing, speculating on equities and clamping down on wealth management products. so, it is interesting to china has looked at japan in the past. it has looked at the fates of the yo soviet union. this focused has -- this report

has focused on their overseas deal making. betty: you know, tom, how effective really have these measures been? tom: well, that is the interesting question. we actually sat down with one of the company's top hedge fund managers yesterday. we'll play that interview out tomorrow. he said the focus on the conglomerates in china was blunt was effective. it's not market friendly but it is doing the job. we can hear more from his interview tomorrow. but you know, from his perspective, this is working and he also said that the regulatory environment now in china is facing fundamental change. this is not just about regulators firing a warning shot for big conglomerates. this is going to be a long and sustained a long and sustained change in terms of the regulatory environment. deals,s of the overseas we can see in 2017 in the first six months, the number of deals have dropped off by 55%.

2016 was a record year for outbound deals from china, 256 billion dollars worth of those deals. thos have have already started to fall off. other things this report recommended was putting in place a national law overseeing outbound investment and also getting the regulators to pay for the long-term viability of these deals. this report has teeth. the question for many and we need more clarity on this is how china's policymakers plan to square their targets for gdp which is currently about 6.5% or higher. how they square that targeting with this focus on deleveraging and on clamping down on financial risk? how they square that is something we need more answers from an something whether or not they're going to do it. there is a feeling the revelatory environment will be shifting after the party congress, because this is about really the communist party's grip on power.

their concern of borrowing too much from the state banks, too many risky loans. that puts the financial system at risk and that potentially puts the grip on power that the communist party has in china in jeopardy as well. this is what it is all about. tom, tsonga be watching for that. tom mackenzie in beijing -- tom mackenzie in beijing. our a squeeze of chat with the ceo of square jack dorsey later in our program. yvonne: up next, catesla shares have surged. we dig deeper into the economic effects of electric car demand. this is bloomberg. ♪

yvonne: this is daybreak asia. i'm in hong kong. soaringesalsa shares after hours bringing the model three to market. negative free cash flow was more than $1 billion on the second quarter, twice of the first three months of the year. that is less than what analysts had been expecting. tesla spent heavily to roll out the model 3, which is almost half a million orders. yvonne: let's talk more about this and discuss e.v. and what they mean with the energy markets. as head of asia-pacific research and we want to bring in our gaslight columnist from sydney. let's go to first, because all we have been talking about is the model 3. but there is a lot going on in the electrical vehicle market. what is driving the growth at the moment? first i would say that

model three has created a significant buzz, but it is not the only game in town. it's one of 120 markets available globally to consumers. that number within the next year is going to rise to over 200 cars. so, increasing consumer choices from hatchbacks to minivans at different price levels is a big factor that will drive this market. the other one obviously is the headwinds that diesel cars are facing, not only having sunset and in places like the u.k. france but also significant backlash perhaps in places like the u.s. and the third one is falling battery costs which are a key component to electric cars. as batteries get cheaper, there is room for -- manufactures to pass on those benefits to consumers. betty: we were talking about the model 3, but there is still so much more we have not talked about in the last couple weeks. yvonne: take a look at the other carmakers.

volvo how they want to go elected by the next decade or so. china has a big effort on that front. >> absolutely. and i think it is worth bearing in mind it is not that long ago we were looking at the chevy new electric car and talking about how that was knocking tesla a lot of the water and now the model 3 knocking them both out of the water. one of the reasons as that with the product of element cycle is accelerating very fast with a little bit like where we were with mobile phones in 2008 or maybe even back in 2000 before smartphones came along. the new product because battery costs are falling so dramatically is doing much more impressive things than any other product. it is worth bearing in mind, there are lots of players out there. the biggest builder of ev's is not tesla. nault-nissan.

they have an $8,000 one for the chinese market and you have byd in china which is larger than and makes profits which is something that tesla has not managed. betty: i want to put this into perspective because when i think about a company like mcdonald's, right. whatever mighty andpomegranates or what not suddenly the markets move based on that demand, are we anywhere near approaching that sort of situation when we talk about these companies going electric in terms of moving the commodities market? we're clearly already moving the commodities markets in some ways. you look at the price of cobalt over the past two years, that has risen dramatically. we're seeing some of the things in the price of lithium. if you look at the stock prices

of the companies that produce graphite, which is used in electric cars, though stock prices are rising dramatically. of i think, i've got a note caution for the industry. sometimes there is a tendency to think that these materials are going to be the savior of the commodity industry. it's worth bearing in mind that the real demand push on electric cars, a lot of it is going to come with traditional metals, aluminum, copper, zinc, nickel. these are used in equally large or greater volumes and electric cars. and i think gradually if you see the price of stuff is like lithium and cobalt, you see other materials come in to replace them. >> i would agree with david there. in fact, obvious to you need

more money capacity of production for things like lithium, cobalt or graphite. you might see things moving in the short-term but in the long-term, our analysis shows there is enough -- of everything that goes into a lithium ion battery. i would like to add that in l-placed,countries well australia is a good example where you have practically everything that is used for making a lithium ion battery, and china has significant reserves of lithium as well. those two countries will probably benefit from an uptick in battery demand. betty: given all this talk about the battery demand. we're seeing these batteries and the ship -- to electric vehicles, what does that mean for the oil companies? i want to bring our viewers into this chart i have in my terminal. 7920, which i showed before.

let's take a look at one of the markets, right? which is the u.k. what's really fascinating here is by 2040 almost 80% of the new car salesin the u.k. are going to come from electric cars. this is the white line here. in place of gasoline, gas powered cars. so, given that, give me, tell me in more detail what you think about the prospect of oil companies going into making batteries. >> so, as a baseline we have estimated that by 2040 the growth in electric cars will be responsible for roughly 8 million barrels of crude disbursement. -- displacement. that is roughly 8% and is relatively close to the u.s. shale oil production. it is significant volume. but i would say you do not need to wait until 2040 to see the

impacts on oil prices. somewhere around the mid- 2020's, you would see two to four barrels per day displacement which might be enough to start reflecting the impact on oil prices. in terms of the options, the oil companies have, obviously they cannot go into electric car manufacturing. but things like battery manufacturing, some of them may be considering that already, as well as charting infrastructure is a big one. these companies own fuel stations at key intersections in cities. and they have the infrastructure to actually scale up charging infrastructure. and shale's announcement -- shell's announcement a few months back in this regard is a clear reflection of that. the last'll give you word. how far long-term do we have to

look to see any kind of meaningful shift in the commodities market because of this? david: well, i mean, there will be quite dramatic shifts. it is worth bearing in mind, though, that passenger cars only make up about 25% of the bareerl of crude oil. oil and gas companies are used to big changes taking place and they have lots of other things to be worrying about. industrial fuel oil demand, diesel demand is dropping very fast. we've talked about the effects on ev. expects energy efficiency of gasoline cars to take away about 11 million barrels a day 0. 204 they're all sorts of other changes. an energy companies are thinking about things like charging know their that they market is changing and they know they will have to change dramatically to move with it. yvonne: great discussion. thanks for joining us.

you. so much plenty more to come on "daybreak asia." this is bloomberg. ♪

check of thek latest business headlines. china's largest restaurant review company may be looking to build a warchest as it takes on rivals backed by alibaba. raise $5alks to billion in a funding round that may value the company at $25 billion plus. have submitted a merger plan for approval by a 40's. the hong kong list of shares jumped. liky: it is a big day for kai chin. they saw their best month since

to growingthanks confidence in the european economy. officials remain upbeat on inflation. convinced that weakness will snap back. are they right? this is bloomberg. ♪ who knew that phones would start doing everything?

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♪ singapore.ght: 30 in i am yvonne man in hong kong. >> i am betty liu in new york. this is "bloomberg markets: asia." the u.s. may be preparing new action against china on trade and what the trump administration sees as violations of intellectual property. washington is investigating whether steel imports from china threat national security. the administration has the power to impose tariffs without going to the wto, but china could

appeal and probably win. president signed a russian sanctions bill, but says he has reservations about legislation that he called "significantly flawed." may hurt america's ability to work with allies and have unintended consequences. he said the administration will stand by the letter of the law. jay y. lee has denied corruption charges as he took the stand for the first time, rejecting accusations he took a bribe in return for support in a key merger. he has been in detention since february as part of a widespread investigation into corporate influence in government. hong kong lawmakers visited the terminus of the new rail line linking the city to mainland china. cost almost $11 billion. the project is controversial

because of the co-location area where china can enforce its laws in the hong kong territory. the terminal is expected to be ready by the end of 2018. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> thank you. time to see how asian markets are shaping up. broad week as when it comes to equities and currencies. kospi erasing all gains this week. switch you can see the up in tech shares on the nikkei 225 set to see its first drop in three days as tech shares are in the doldrums on setting the rise in utilities, financials, and consumer shares. one apple supply reversing , ande after a rise

chipmakers falling today. japanese equities are still on an uptrend given the solid earnings backdrop with many companies topping estimates. the benchmarks could be looking at eyes. as a gaugerk topix of tech firms at its highest level since 2007, so learning's could perhaps still fuel this fire. manufacturing firms are raising their annual forecast, which we don't normally do after the june quarter thanks to renewed investor interest in steel, autos, and banks to which have been largely underperforming. japanese steelmakers have trailed peers amid the metals rally sending prices higher. players inl lagging korea and other local rivals

to the oilxposure and gas seamless piping market. i want to look at the dollar-yen as it looks to test a major support for a third time in four months, the fit the day moving average on this chart has been a key support for the dollar against the yen in april and june. a break below this line could propel the yen to 105 according to mitsuko securities. >> thank you so much. we are watching the child's report and central banks. three fed officials signaled they remain in rate hike mode. the boe issuing its policy decision, and the reserve bank of india says it is time for the prime minister to spur growth. kathleen hays joining us with what to watch. let's look at,

what the fed said about inflation. watching the fed and the u.s. economy because so goes the fed, so goes the dollar, so go other currencies. the three fed hawks are on the fed reserve forward, the fomc, so they have a voice, and they all see inflation as transitory and see it coming act, snap that -- snap back. john williams sees one more rate hike this year and said at 4.4% unemployment that the u.s. is above full employment. you haveeconomists say to have wage pressures and more inflation. the boston fed sees some reasonable risks that unemployment falls below 4% in the next two years. he told this to the wall street journal. the cleveland fed sees inflation

back at 2%, but once to see more data before deciding on the support for a september rate hike. this40 coming you can see is what these guys are looking at and have to answer. look at how low we have unemployment. you can see it is where it was before the great recession. the turquoise is average hourly earnings has fallen down below 2.5%. to havee line seems plateaued, so this is the fed's conundrum. up 178,000 adp jobs in july. that is consistent with u.s. payrolls rising 190,000, but average hourly earnings are expected to fall .1% to 2.4% year over year. fed officials looking for this shift and inflation, but the

data not cooperating. the boe also meet and issued their decision hours from now. last time mark carney talked coming he seemed to be more hawkish, but since then, some mixed data that they may not raise rates. >> all these things suggest the debate will continue. the vote is supposed to be 6-2 to hold the key rate steady. thatthe key rate off record low at 0.25%. formertingly enough, the saysy governor of the boe the boe needs to hike rates because even with all the brexit uncertainty, you have not seen growth from it the way people ought it would, and there is no

reason to keep rates down. inflation is above target and unemployment has fallen. 6974, yellow line 2% target, the turquoise line headline inflation up 2.6, down to 2.4 on the quarter, but look how they have come up, mostly because of a big drop in the pound. that is why people are saying they won't have to move. theyct adam pozen saying cannot hike rates. they have to look at inflation 2-3 years down the road, and that's when it could be lower. cut rates in response to that massive drop in inflation, but what was surprising was the message to prime minister modi. >> it is interesting. placated government

demand and the push to cut the key rate, but also urge prime minister modi to step up and spur growth. sees an urgenti need to boost private investment. this is a chart from our bloomberg news team showing capital formation is slowing and turned negative after more than 2% year-over-year drop. here is mr. modi's dilemma. slowing androwth is investment is slowing, you could have a slower economy before he bid.to his 2019 reelection india already has -- let's move on to the deficit -- they already have a large deficit, so there is not so much that prime minister modi can push for at the federal level. that is why he has to depend on his state allies to spur growth. controls 18 ofy

29 percent, representing 68% of gdp. said local administrations need to speed up projects. saying they done what they have nowt they can come a but they have to boost growth. fed little window given the is expected to continue with its rate hike path. our interactive tv function to watch is live and see previous interviews and dive into securities or functions we talk about throughout the morning on the right side of your screen. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

♪ we have not lost the magic

touch. the formula is still there. i applaud these people taking advantage of that. i hope they sell me their business prematurely. take me you can do to on as a partner, do your part and you will find it comes your way. >> classic buffett has warren goldman sachset 10,000 small businesses the event. they are encouraging more entrepreneurs. interesting that buffett is so unwavering in his belief in the u.s. economy no matter what is going on in washington. we know he was not a supporter of the president, but he believes that when others are fearful, you go into the market and buy. you have and ier

will give you a commission on it, classic line from buffett. dowe just it 22,000 for the . thousand to from a 1000, now to this milestone, more psychological than anything. markets are overlooking the political side of things and turmoil in washington, d.c., whether within the administration, tax reform, the health care bill. to see low inflation as the reflation trade, i guess. lacklusterpretty after some solid gains in tech, but let's do a quick check of the business flash headlines. has aig beat estimates in second-quarter operating profits, one dollar 50 two cents net earnings driven by gains in the consumer unit. for the news a win ceo who joined in may and shook

up aig's management team. it is still under pressure in its commercial insurance operation as margins worsen. generale accusations of misconduct clip results. france's third-biggest bank saw second-quarter profit of one $25 billion in line with estimates a 300 54 million dollar increase in provisions for unspecified legal disputes hit the balance sheets. >> what we decided to do is add .o our provisioning there is no significant development here it we still have to put the hind us on several issues. we have these medications and

try to put that behind us as quickly as possible. lloyd blankfeins' brushing off concerns about the fixed income business. he says he is not panicking because it is working on changing its next up products and clients. >> we tended to be overly weighted in our business to a client race, a terrific client face we will never abandon, but disproportionally involved in trading clients who trade a lot, hedge funds and other things here to again, we are in investment bank. the corporate banks have much more business with corporate send others. that is something we should fix. we should not have let it get that disproportionate, but we did, so we will fix it. hsbc says the possibilities are in the us and china has the government opens up the economy despite speed bumps between beijing and washington. the potential for

two-way trade and investment continues to expand. the relationship between businesses in the u.s. and china character rises one of optimism. so if i take our own numbers over the past year, first half versus first half last year, we , soup 33% for our clients both directions. chinese companies into the u.s., u.s. companies going out to china. about restrictions on capital close from china to the west. are those affecting your clients? >> there will be some cases with a client interested in doing a deal and the united states and they may have to slow that down, but i think the way we think about this is not so much the immediate term what is the impact, but rather this long-term interest. you have huge sectors of the economy and the u.s. that are interesting and attractive to chinese companies. regardless of capital flow and restrictions, that interest will

remain. years ago there was a fair amount of disruption in the chinese market that discourage people. now?at all past is are your clients confident about this to build the and the course going forward in china? this is over an arc of time, but there is a tremendous andnt of progress achieved, i anticipate that will continue. we are likely to see further tensions and some surprises in the future, but if you look at this as a long-term investor, the steps the chinese are making to open capital markets are substantial and substantive. >> what are the biggest impediments that your clients see in doing business with china , investing in or doing business there? >> i don't know if it is an impediment question. they want to make sure what they are doing will achieve their lives. that's one thing we can help with. we have a lot of experience

there and boots on the ground in china, so we can help clients to decide this may be the right place for you, or if they are thinking about something we might think is not, we will share that with them. it's not so much impediments that it is understanding how to navigate. >> that was the u.s. head of hsbc talking to david westin. coming up next, our exclusive interview with jack dorsey. this is bloomberg. ♪

♪ >> this is "bloomberg markets: asia." i am yvonne man in hong kong. >> i am betty liu in new york square results topped estimates think to larger merchants revenueit but form, rising 40% as customers process more payments and pay the company for loans, deposits, and software. also raised its full-year sales and profit forecasts. emily chang spoke to jack dorsey exclusively in san francisco. business, that is what we are most proud of as we continue to build a business morescales, reaching's small businesses.

one of our biggest differentiators in the market is for self-serve. anyone can come to us and get started right away. we are seeing that at scale from the small to the large, so that is the core. square capital continues to be something we are really proud of. i said on the call that we we ared recently that not competing with financial institutions, banks, and traditional lenders. our average loan size is $6,000, so we are competing with people going to their friends and family and asking for a loan, and that is a massive market. we continue to innovate in that space. it has great fundamentals to it. it is something that continues to be attractive to all of our sellers. >> you're rolling out product lines, diversifying revenue,

offering an all in one solution youbusinesses, so where do see the promising sources of growth in the future? -- we havesee a lot a lot of small merchants to reach, so we have room to grow the market. squarently introduced point of sale for retail, so we are getting more specialized and paying attention to what retailers need in particular. we have always been more of a horizontal service. been able to specializing go vertical, and by a lotso, we get to reach of our competitors point of sale who have only focused on retail for instance, so we have a lot of power in the fact we can speak to everyone, it can now go vertical because we have built a platform that allows us to move faster. >> let's talk about the decision behind the physical card.

you want to offer more banking services? >> over eight years we have taken on a partnership mindset with the banks. we are not out to compete or replace banks. at ise have been good making what they have accessible to more people. tookarted with sellers and an industry that would only enable 48% of people to accept credit cards. we took that number two 99%. we still believe there is a lot of room with the sellers faced with square capital and loans, but the individual side as well. i would consider us as a simple, easy way for anyone to be able to start immediately and participate in the economy, whether on the seller side or individual side. what we are seeing with square caches we are reaching an underserved and under banked, a

young audience, so that makes us really proud, but is consistent with what we have always done. largerare attracting sellers. how do you handle the competition as you move upmarket? >> it goes back to our core differentiators. building software that is intuitive and easy no matter the scale is really important. our greatestf differentiators is ramping cohesive. we aren't just a point of sale. we are payments and square capital and crm in instant deposits. it is all built into the same package. you download one happen you have everything to scale. onecan start with to 42on and scale tweet focus our energy on delivering the most critical

things first and identifying with the next most critical .hing is to solve like i need money, but i don't need a loan of $100,000, $50,000. i just need $6,000, $5,000, to buy another salon share and double my business. that's where we come in and that is what we are serving. >> that with square chairman and ceo jack horsey speaking exclusively to emily chang. that is it for us on daybreak asia. time for a look at what is coming up. more data after china, the caixin, and now may be another upside surprise. rishaad: this is the nonmanufacturing, not just services, includes construction. we are looking for a rebalancing of the economy as well. the manufacturing numbers exceeded what the official numbers were. >> this shows we are well above

expansionary territory for manufacturing on the private gauge. lookedn, shinzo abe unassailable, now under threat, a reshuffle expected. we will have temple university on to discuss what it means for abenomics. out ind the earnings singapore. >> we look forward to that. thank you. we leave it there. betty, we covered a lot of ground today. >> yes, we did. a lot on tesla as well. standby for rish and bloomberg markets. this is bloomberg. ♪

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♪ david: what was the strategy that you used? paul: i was completely determined to recapture my parents' money. david: how do somebody raise $5 billion in 24 hours? paul: it was first come, first serve. david: you have the image of striking fear into ceos. some people are probably afraid they will get a call from paul singer. paul: it does not bother me. david: if somebody invested in the very beginning, what would the rate of return with a have compounded? paul: one dollar became $160. david: is it too late to invest retroactively in that? [laughter] >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. alright. ♪