yvonne: 17:00 a.m. in hong kong, live from bloomberg's asian headquarters. i am yvonne man, welcome to "daybreak asia." the dow posted its biggest gain in five weeks amid new benchmark highs and corporate earnings beat estimates. china reports third-quarter gdp later. the forecast saying growth is slowing. however, president xi once quality, not quantity. kathleen: i am in new york where it is just pastors -- just past 7:00 p.m. wednesday. strengthening u.s. economy despite two major hurricanes. janet yellen preparing.

how conservatives are mounting a campaign against her. ♪ kathleen: it is interesting, the juxtaposition of two stories. they go region by region from a tight labor markets, wages are not rising. janet yellen it ready to sit down with the donald trump, thursday's meeting. i wonder how much they will look at inflation and what he will try to get from her in terms of the future of rate hikes. yvonne: if we are going to hear any details of that meeting, gushing over janet yellen the way he was over john taylor. there was talk about how hawkish john taylor can be. kathleen: what was once let'sered quite the dove,

take a quick look at the market. small gains across the board. 61, on the s&p 500. 157.dow at 23, a good seems second be slide up in asia. let's see how things are looking in new zealand. i have been saying any day on this coalition government, it could be this afternoon we get an announcement by the new zealand first party. flat for the nzx 50, the kiwi ahead of that big announcement. australia, china's data coming through in the next couple hours. gdp and production, what we are looking out for. steady as she goes for australia, leading up to that. 56 for thet, .71 aussie.

for japan, futures slightly higher today. the dollar-yen, 113 against the dollar, breaking against the threshold. the longest winning streak we have seen in two years. trade data numbers coming out in 50 minutes. can this export engine keep chugging along? three-month lows for young should be helping as well, these in data ahead again -- ahead of the big election. let's get the first word news. separatist leader has until 10:00 local time thursday morning to clarify his position on independence or face dismissal in the region being governed from madrid. emont has a mandate for succession but has not made a declaration. they have said they will evoke of the constitution

and take control of the region. meetings in brussels with the talks for brexit virtually deadlocked. seems to be weakened by divisions in her government. the head of the european council said the u.k. team must offer more concrete proposals if the brexit talks are to make any progress this year. sure.m not it is still possible to achieve this in december. we need more concrete performance, to be honest. >> a bipartisan deal to prop up obamacare has stalled over confusion whether president trump supports the plan. the president had encourage negotiations, but as soon as progress was announced, he tweeted conflicting signals. he told his followers he supported the process but would

not bailout insurance companies he said made a fortune out of obamacare. the nasdaq and the singapore exchange teaming up to let companies with shares on both markets. exchanges pitch to customers outside their home market to attract more ipo's. the singapore exchange said it is the best of the east-west combination, giving companies access to both asian and american investors. the nasdaq is working on a similar arrangement in taiwan. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. ♪ the dow posted its biggest gain in three weeks and all the benchmarks closed at records. su keenan joining us now from new york. we see in the latest trading session, the conflicting data.

of the data about health care and tax reform issues. su: we heard about the conflicting tweets from president trump on health care, we will get to that. treasury secretary steve mnuchin saying there will be big boost to the stock market in his view if tax reform goes through. but he warns, if we do not get it, you will see a reversal of a significant amount of those gains. you see green on the screen, but small gains. earners, a major theme. ibm, a big performer. posted its -- the dow posted its biggest gain. ibm posted the biggest gain since 2009. a very strong outlook. its first sales growth outlook in five years. that added to better than expected results. getting a ground -- getting a downgrade, a troubled

restaurant. gopro getting an upgrade. selloff a view of their in the stoxx is perhaps over. let's go to g #btv 3883. the market will fluctuate? that is following from the famous quote from jpmorgan, when asked about the question of the market, which is very difficult to tell. the volatility gauge has fallen to the lowest level since the 1960's. that is something. what does it mean in terms of direction? nobody knows. how about the big earnings report? we mentioned ibm, powerful companies, helps prop up the market after hours. american express is down a little bit. there was not any disappointment in terms of what they told us about earnings. third-quarter earnings beat expectations, rising 19%.

of the most prominent black executives in the u.s. will be exiting early next year. another person will be taking over. year turn around, getting ready to start a new chapter. a lot of the estimates are that they came in, boosted their four-year earnings forecast, as well. and the commercial unit, they bid part of the story. let's look to the bloomberg one more time. the question is, the health care reform, we see stocks catch a yesterday. a lot of health care facilities missed out on the rally, even though insurers, as trump has criticized, have outpaced the s&p. very mixedve it, message coming out of washington on health care, mixed tweeting pattern for these various stocks. kathleen: it makes being a

political nerd all the more important, doesn't? su keenan, thank you. janet yellen expected at the white house on thursday to sit down the president trump for a meeting. will she pitch her job? will he be suggesting he would like her to stay on for a second term? this is threatened by a group of house conservatives mounting an active campaign against her. joining us is bloomberg economy reporter. what is going on? the freedom caucus guys are saying she would be the worst pick for fed chair, even though she has overseen a relatively stable, healthy economy. to be angoing interesting phenomenon to watch play out because we have on one hand these guys saying she is the worst pick. we have a lot of liberal and moderate groups saying she would be a good pick and has done a good job so far.

and we have the president himself who criticized her strongly during the campaign. as president, has come back and said, i like low interest rate people and she is a low interest rate person. it will be an interesting dynamic going forward. talkeen: in terms of the tock, is it anybody's guess what he tweets? jeanna: i think it is. --t we do know, november 3 it will probably be in the next couple days. take from that what you will. kathleen: we will both rest easier when it is not hanging over our heads. we will all scramble when it happens. jeanna: it will be a wild rush. yvonne: speaking on the fed speakers having addresses here on wednesday in new york, a lot of debate about what a neutral rate was. what it seems like most of the speakers were saying, on track

for that december rate hike. jeanna: right now what we are hearing when we speak the fed officials is, they still expect a strong labor market to drive inflation back to the 2% goal. that is all they need for a hike in december. kathleen: what struck you most from the beige book? wherever you look you have a tight labor market and wages start raising. jeanna: that is the biggest take away. we see across the entire country employers reporting tight labor markets next to know pricing power and pressure. that is a conundrum that will be with the fed through december. yvonne: thank you, joining us there from new york. samsung announces it is uniting its services. the ceo that will be managing it all. our smart things interview later this hour. kathleen: our next guest is on

the cusp of a downturn and corporate profits are poised to take. find out why. this is bloomberg. ♪

kathleen: new york city, empire state building on a crispy autumn, balmy evening. it lovely weather in new york. the dow, nasdaq and s&p all higher. a lovely day on wall street. records, a lot of volatility around what is going on in washington on health care, tax reform, and others. this is "daybreak asia." i am kathleen hays in new york. man in and i am yvonne hong kong. ramy inocencio has our scorecard so far. he is at the wall with the bloomberg charts we need to know. ramy: good morning.

i want to get this scorecard up and running, it is the earnings announced function. follow me here with the old -- all security tab. that is roughly 10%, so we have 90% ago. on this side, look at all the green, way more than there is red. that is good if you are long for these stocks. we are seeing something on the order of 1%, 1.2%. earnings, nearly 5%. we want to take a look at financials because we did stick to the big ones over the past week. sales, surprise to the upside by 1.6%. about 1.6%. there are headaches we do need to talk about. that is in my second bloomberg terminal. this is something called the function.

this is from september of 2016. difference and clear is what is going up and going down. on the order for fixed income trading, double digits, 20 6%, 25% for jpmorgan. the lowest was still a double-digit, -15% for citigroup. that was one big takeaway, going back. my next bloomberg terminal chart is g #btv 6054. the yellow bars on the right-hand side of your screen, that is where we are for q3 2017, expecting earnings growth of 3%. not so great compared to the past few quarters. it is only a tad higher from the past quarter. there is a light at the end of the tunnel. 2017, fourth quarter, 12% is

what analysts are saying we might be headed toward, and evening out for the early part of 2018, around 10%. that is the u.s. look of things for the s&p 500. let's do the macro point of view for the world. global earnings -- where are we? 2017, earnings upgrade for the year, stability flattening out. years we time in six have seen upgrades finally for global result. we will continue on further. kathleen, i know you have that, but those are your four bloomberg terminal charts. i know what your next question will be. economic growth is above trend, moderate, steady. but as good as that sounds, are we on the cusp of a downturn, potentially? according to a new article by bloomberg, profit growth is

likely, but it is a problem because of the view it is central to the stock market's direction. joining us to connect the dots is the author of that article. welcome, good to see you. thank you for joining us on "daybreak asia." start with your model, because that is one of the things you have done for so many years. you have a proprietary model. how big of a part to corporate parts play in your model? >> it is a key component. not literally a model, but indicators of the business cycle. corporate profits are closely linked to the business cycle. corporate profit growth is linked to growth in the economic cycle. perspective, 2010 to 2011 we had a slowdown in growth, a 15% decline in the

stock market. to put it in perspective. 2012 to 2012 the 2013 we had a 10% decline in the markets. 2014 to 2016 we had a longer and a couple downturns in the market. during all of that we had all these qe's and operation twists and low rates. that is a little different now. we are talking about global growth being good. in januaryis program and there were people talking about recession. we push that hard because our leading indicators was unequivocally bullish, the best it had been since 2010. i think we are seeing the fruits of that now. that is why i am saying it is as good as it gets. but the forward-looking indicators have all world over. we are having a new slowdown in growth.

since corporate profits growth is linked to economic growth -- kathleen: that you need a little more of a smack as to the cause of recession? lakshman: great question. for a recession, absolutely. we are not talking recession, we are talking slowdown in growth. depending on how the slowdown in growth unfolds, which i cannot predict at this moment, but if it should go look -- go on long then a shock can be recessionary. we are not there now, there is not a recession insight. 2011, other years, we had growth rate slowdowns. the market itself when down. all and outcall it huge plunges, but consider the backdrop.

there was a lot of quantitative easing and it was different today. isn't the story the lowet right now, it is in inflation. the interest rates are not going to go over a lot higher, it is pretty stable at this rate? isn't that driving the rally? lakshman: you have the beige book. even though the jobs market is tight, you cannot pass through inflation. the fed is trying to stay the course. in the summer in portugal they got together and said, mission accomplished, we did it. at that point, inflation started a new downturn. pceave seen the target, the year-over-year sitting at 3%. the target is 2%. they are well under that for five months. i think chair yellen called it a

puzzle. we have this puzzle. i think the market may get some solace from that. yourf growth slows, earnings growth starts to slow. it is about demand coming through the door. i think we can see disappointment in profits growth going forward. you tell me how wall street will react to that. stephenit seems like mnuchin adding about what he thinks about the market come i want to throw out what he said in his podcast. the taxthey say we get deal, the stock market will go higher. but there is no question if we do not get this done, we will see a reversal of a significant amount to the gains. we have a chart that decides what he is saying. 2272, we see this high tax rate versus low tax rate. this is the deutsche bank index.

all that optimism after the election has been fading away ever since. is the treasury secretary right? i suspect that with the growth rate going down in overall growth, that profits growth will have a hard time dealing with that. will point to a lot of different things as to why profits growth has gone down or maybe the market is linked to that. it is hard to say. is stronginess cycle and going up, you can have higher taxes. the business cycle is a bit bigger, i believe, than many of these policy moves. also, these are just proposed policies at this point. only after a policy gets actually passed, then there is a

lag effect on the business cycle. yvonne: what would you buy? well in: things that do a slowing economy, with low inflation. people have gotten used to those on the earlier downturns. i would take a look at what did well in the earlier slowdowns, s.ose period the difference is, you of a central bank and were talking about the changes that may come there, trying to tighten into what is also an inflation cycle downturn. and on top of that, growth is as good as it gets. it is not just the u.s., it is slowing down globally. it is trickier. it is more or less risk. on balance, i would be careful

with risk going forward. kathleen: there is this phillips curve question. a lot of people in the fed signaling they still think a rate hikes are on board. wagestire labor market, rise, companies will have to pay more to get workers, that will feed through to inflation. where do you come in on that? you see something the global economy when you look at other leading indicators that there is a shift? or will it take more time for this historical pattern to come through? thingsn: there are two going on, a cyclical picture and structural picture. the structural picture is hugely challenging. the cyclical excerpt, it goes up and down. two -- eng these

tangling these things is critical. the cyclical picture has been confused for a structural change. there is no mission accomplished. inflation around the world will fundamentally continue. it is fundamentally going to continue. the phillips curve does not work. i am talking out of school a bit, but in greenspan times we talked about the future inflation gauge. it is not the phillips curve -- low unemployment, high inflation. that model has not worked for years. the future inflation gauge has nailed it in the 1990's, when you have the only time you had a preemptive tightening and easing without a recession, it nailed it. here, a got the upturn and now the downturn. kathleen: could said tightening

into this down turning inflation and corporate profits falling, could that be the prescription combo that brings risk of recession? lakshman: sure, not imminently. but if we stayed too long at the party. december is not going to hurt it. we do not have any recessionary vulnerability. if we talk in several months, instead of a slowdown we are talking about recessionary vulnerability and the central banks are still hawkish, there is your classic policy mistake. kathleen: so happy you joined us today. lakshman: no recession. kathleen: thank you for joining us, the ecri co-founder. we're live in beijing with the latest from china's 19th party congress after a three-day speech opening the congress yesterday. we will be covering that live

from beijing. this is bloomberg. ♪

yvonne: 7:30 a.m. thursday morning in hong kong. clear look outside victoria harbour. is 7:30 p.m. this wednesday here in new york. markets are closed, it is a clear, cool autumn night. i am kathleen hays in new york city. yvonne: i am yvonne man in hong kong. you are watching "daybreak asia ." let's do a latest check in australia. we are seeing things higher when it comes to stocks, but not doing a whole lot in new zealand.

news expected to come out this afternoon from the new zealand -- a stronger kiwi here this warning. numbers coming out of china, could be along the sidelines. expecting the data to fall to the, down 1/10 of 1% for asx 200. japan, we're looking at about 100 or 90 point gain for the nikkei 225, 12 straight days of gains for the nikkei. looks like we will continue that straight, lucky 13. we did see dollar-yen breaking above 113. first up, secretary of state rex tillerson has praised india as he lays out the administration's vision for america's role in south asia. he calls for closer ties between washington and new delhi and

cause india and anger for stability. rise hadhina's global been carried out less responsibly and undermined international rules. florida is recalling millions of -- ford is recalling millions of f series trucks, costing them an estimated $1.3 million. it comes as the new ceo seeks to win over wall street with a plan to cut $14 billion in costs, while pushing faster into self driving and electric vehicles. the latest r.b.i. minutes reveal this agreement over further stimulus with growth slowing. the six strong policy committees voted to keep rates unchanged this month. but one said they must be ready to tighten. basis points or

too little, too late. is already bouncing back from its biggest loss in almost a month. the tumble came after the u.s. commodities future trading commission said it has oversight of virtual tokens used in initial coin offerings. they have claimed jurisdiction , buttokens from some ico's say there is no inconsistency with their own assessment that virtual currencies are commodities. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. ♪ courtney, thank you. the third quarter gdp growth in a couple hours. economists expecting expansion to did back slightly. of themes on day two communist party congress, with president xi emphasizing quality

over quantity when it comes to the economy. haidi lun is live in beijing. it is that marathon speech they were talking about. what do you think his comments reveal about the view on growth? it seems there is with a room 2017. haidi: a marathon come three and a half hours. it was focused on economic reform and his view as to what chinese growth and the economy should look like. a lot of it was focused on the role to be played by shanghai enterprises, and these global, multinationals. that was an interesting point. going back to quality over quantity. he talked about promoting a moderate pace of growth throughout chinese society. maybe it was what he did not say.

back in 2012 at the last congress, the previous president pledged to double the size of the chinese economy. that would be an artificially supported rate of gdp growth. the fact xi jinping did not say that in his speech yesterday as a lot of economists and analysts saying, perhaps this is signaling a greater appetite for a slower pace of growth. indeed they could see 5% to 6% growth over five years, that gives them a greater window, buffer to deal with structure problems. things like capacity cuts as they transition away from manufacturing. moving toward high-tech and services. a gives them more of a buffer in terms of pushing ahead with this

deleveraging, which a lot of critics said that come to a halt going into congress, because stability has been key. as i said, it is perhaps more what he did not say than what he did say. if you want to take a look at quantity over quality argument, bloomberg intelligence had a look at the number of words and what they were used throughout the three and a half hour speech. the word environment was mentioned 89 times, and it was 74 in 2012. economy had fewer mentions. maybe if we take a look at that as a micro-indication of what the focus is, going forward. that is very important, they are like fed minutes. there written very intensely. in terms of the chinese currency and the trading ban, direct

statements from the president on that? haidi: we were watching for this, whether they would abandon the 6.5% growth target. the other is looking at fx reforms. they said maybe there would be and appetite for the yuan, interest rate liberalization. what we did hear from president xi, he did improve the framework see interest, and rates and exchange rates become more market-based. of a free flow. but he did go on to say, we developed road projects. spelling as that is, it will result in internationalization of the currency and the widening of the trading ban. a lot of people do not expect much after the congress wraps

up. his first loom large, five-year term, we have not forgotten about the international volatility that happened after the shock evaluation of the yuan in 2015 and this uphill battle in beijing. they would not be wanting to loosen policy to quickly. we are expecting news out of the financial sector delegation taking place today. watching for indications as to the gdp target, the currency and rate reform. but also looking at the 10 year, governor.-- the pboc he is mr. yuan. he has been expected to retire for a number of years now. we are watching to see if there are any indications when he will

leave and when his successor will take place. not just janet yellen in the spotlight. kathleen: definitely central banks, we like that. haidi lun, thank you for joining us from beijing, where she is covering the 19th party congress. wednesday and official said the central bank had been abandoning what he called standard intervention in the currency exchange rate. let's get from our -- let's get more from enda curren. i love watching the intrigue. you were getting a clear picture. we want to see the take away from president xi's opening remarks about reforming the yuan . we know that abroad backdrop, they wanted to promote the yuan around the world, they wanted to be an international currency used in trade.

it will involve reforms around the way and the chinese state needs to step back and free up the currency. judging by remarks from the speech, there was not too much focus on the exchange rate. china is in no hurry to let go of its currency anytime soon. as long as that is the case, there is feeling there will be a break on the ambitions for the yuan. kathleen: you can understand why they are so careful. in terms of the internationalization report, what were the highlights there? again,n: again, -- enda: it is a positive outlook. hoping to see greater usage of it, especially in the countries taking part in the belt and road initiative. they want to see more central banks by the yuan and put them in their national reserve holdings.

is a positive outlook, pointing where there are growth opportunities for the yuan going forward. but there is an element of constraint in all of this. yvonne: but there is the prospect of one belt, one road. isn't that supposed to internationalize the yuan? a massive it is infrastructure project, hundreds of billions of dollars on the table. as we go through china building ports and rails in neighboring europe,s, stretching to there is a chance that yuan will feature in those transactions. ders will be in china's currency. i have a feeling it is a long road to go before the yuan development catches up on where china's economy is at. the u.s. continues to dominate, still the world's biggest

reserve currency. is thet that china second-biggest biggest, they still have a ways to go. the message from president xi seemed less strong than we heard in previous party congresses. when it comes to the willingness to hold the yuan as a reserve currency, what we hear from the pboc? enda: there was a lot of excitement when the yuan was with imf a few years ago. what we have seen in recent ,ears, a significant uptick merging credit facilities, for central-bank reserves in helping the yuan pay for trade. there is still a positive story for the yuan. they are certainly interested in holding china's currency. perhaps the pace of it is not quite what some people expected.

there is a sense there is a long way to go. kathleen: if you could peer inside the deliberations, the pboc, the party, how would you characterize the three sides? who wants to go quicker, slower? .t looks like go slower has won enda: you are right. it should be pointed out china is proceeding cautiously for a good reason. china has a classic capital emerging-market style, opening soone capital markets too and triggering capital flows that undermine economic preaches a- the imf sequences of reforms to go through before you reach a point where you can fully free up altogether. hisgovernor of the pboc,

he was forecently, reforms in urging china push forward with liberalization. you consider he is a reformer, there is a sense he could be doing more and is in their own economy's interest ago more. of things arede winning, but that could change when we get over to congress and the new government has settled into place. we are expected to hear whether he is retiring anytime soon. we will take his word with a grain of salt. enda: even if he is replaced, [indiscernible] the rise of the robots, wall street jobs most loanable to tech revolution. this is bloomberg. ♪

yvonne: this is "daybreak asia." i am yvonne man in hong kong. kathleen: i am kathleen hays in new york. we have heard about the robots are coming to replace humans in jobs. bloomberg is looking at the tech revolution happening in financial institutions and what it means for people who work there. our reporter joins us now with more on the rise of the robots. i love this because a lot of people would say it would create lots of jobs. there will be a big loss of jobs. >> that is exactly it. we wanted to show that every single area of the financial industry, financial services industry, will be affected by this. whether you are on the buy or se

ll side, this is something that will affect you. we actually see that in some areas they are already losing jobs. and other sales are using this. on the equity side it spans across the board. gary cohn, before he went to the white house said in 2011, because of technology, they were not able to -- they were able to reduce over half of its equity staff due to advanced technologies. yvonne: it creates soul-searching among the banking world. whether executive saying to their employees? are they being honest or realistic? sarah: like you said, there has been a lot of soul-searching. when they speak in public, they are really upbeat and positive about this. they say these technologies are really going to make more opportunities. yes they will come a but they also say, they are going to free up their time to focus on higher

value tasks. to an extent, yes. but when you speak to executives in private or candidly, and the people working with them, what happens is, you realize they are worried. they say, i have kids, this is something i am worried about. kathleen: you can do some of this through attrition. but how quickly is this going to happen? to happenis not going immediately, maybe 15, 20 years. it will happen gradually, department by department. that gives executives time. they should not sugarcoat it, they should tell them what is happening so they can prepare their employees. in terms of the next part of the question, how far is this going to go? is banking going to be transformed?

would you tell a young person, do not go into this industry? sarah: a lot of people i have spoken to when i speak to them privately, they say, if i had kids, i would not advise him to go into this industry because it is being transformed, and there are a lot of unknowns. the fact of the matter is, it is coming. you might as well take it in so you can prepare and hone in on your relationship skills or lun -- or learn new technology. kathleen: thank you for joining us. japanesereaking news, trade numbers at balance. that surplus widening. 670.2 billion yen, they were yen.ting 560.8 billion six times larger than what we saw in the previous month. also taking another look, we are

seeing 14.1% growth in exports, year on year, for the month of september. 15% growth. -- growth that we saw imports missing. also seeing pretty decent numbers, budget -- double-digit growth when it comes to imports and exports, solid data leading up to that election on sunday. more to come in more analysis on this data. we will talk more about iot. samsung bundling its internet of things units under one banner. we go to san francisco for development conference. this is bloomberg. ♪

yvonne: samsung is making the

connected home a big focus of its annual development conference this week in san francisco, combining three distinct services under the same banner. mainly samsung connect, arctic, and smart things. joining us from san francisco is andsmart things founder ceo. thank you for joining us. i think it was three years ago samsung did acquire smart things. what started out as a starter kit for you guys has come a long way. how big of a game changer is this for you with smart things and samsung collaboration? >> it is amazing how quickly it has evolved. we had the vision to be an open platform and what we see with today's announcement is, samsung's full weight going behind it. it is a very exciting day for us. yvonne: your big announcement devices are all

connected to samsung iot devices. it sounds familiar. we heard the likes from amazon leading the pack in this race, where they use hardware products andonduits to popularize expand their virtual systems and make them buy more of their products. what is different here? alex: we have the most open platform. with all the samsung devices, it is the largest consumer products company in the world, one billion devices on the market, many hundreds of millions sold every year. and smart home to many consumers. we have the biggest ecosystem of third-party. what it means for consumers, whether it is home security or energy or lighting or entertainment, all of the top brands work with our one platform and bring all this to life, versus just a subset.

we have the biggest ecosystem by two or three times all the competitors. there is a lot of emphasis on bixby and the voice assistant. we have seen a hot -- a fight between amazon combo -- amazon, bixby, is there something will have that the others do not? alex: there are many voice platforms to give consumers choice. but with bixby, i think it can be ubiquitous, and cross all the samsung devices. they can show up in your everyday products everywhere that you are. through that we can be more personal, a lot of personalization. it is tied with this open platform. a developer or device maker may be connecting lights. you may have to connect each

platform. but with us, you can connect in one place. kathleen: quick question, ease of making them work and programming? and the one thing i might not be expecting you have in development? alex: the ease could not be easier. we launched a new developer tools, we had more than 50,000 developers that have built custom apps and services. that includes the biggest bringing, like adp, next-generation home monitoring to consumers everywhere. for everyone, you have unexpected use cases. the most unexpected announcement today was, voice recognition in a lightbulb or a teddy bear. whether you like that or not, it is coming everywhere. yvonne: i love it. it thank you, smartthings

founder and ceo joining us from san francisco. suisse says japanese markets will rise or fall depending on the outcome of this weekend's election. kathleen: we speak to a key japanese economist. this is bloomberg. ♪

>> we are live from bloomberg's asian headquarters. the top stores best thursday, the market confident after lifting wall street to new highs. investors now turn to china. president she says growth must be quality. is just past 8:00 p.m. in new york. janet yellen is -- mounting a campaign against her. to shinzo abe is scheduled

win the election. plenty of talents leading up for shinzo abe. trade data one of double-digit growth. slightly off estimates. absolutely. seems to me it is a really important thing for japan and looking quite strong. still moving ahead, double digits and i think the latest partyshowing the ruling with the best result in three decades. yes it a good about that. >> he certainly does.

before the open, reaction and numbers. catalonia's leader has until 10:00 to clarify his -- position on independence. outright made an declaration. authorities have threatened to revoke article 155 and take control of the region. meetropean leaders thursday. weekendmay seem to be by the government. the head of the european council offered a more concrete proposal. sure it is still possible achieve, but for this we need

more concrete proposals to be honest. a bipartisan deal to prop up obamacare has stalled over trump supportser the plan. hetold his supporters that supports me process that wall bailoutauthorities -- a pitch to comes as attract more ipos. they say the agreement is a combination, giving companies access to asian and american investors. dayal news, 24 hours a

powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. things pretty green right now. >> lucky number 13 as we count down to the election. this is looking good or economic recovery. we are marking this black monday anniversary with far more than we saw 30 years ago. we did see some reaction in the yen. a drop slightly there. trading here, a two-week low. looks like a dollar-yen i.t. underway. they are positioning for dollar reversals.ated by

you see that live in yellow on this chart. we also have this policy between the u.s. and japan who trump might select as well as the sunday.l to extend on we have a busy couple of hours when it comes to eco-agenda. we have a swath of data from china. -- we continue to gain about 2/10 of a percent. the korean won is falling about 2/10 of a percent. we are waiting to hear from the new england -- new zealand party holding onto overnight losses ahead of that and it says beyond politics, it is clear support for the kiwi dollar has started

to fade. a job see could come at the bottom of the hour. that could see the aussie test resisted. that is the yellow here. last check on equity movements, some energy and mining falling today. 866 -- stocks's insouth32 posted a loss korea aerospace a jump of 15%.

35% over the past 12 months so kathleen, we are seeing a fairly optimistic from investors at least for now. >> thank you. let's move on to china. this comes on day two of the patty is in beijing covering this closely. what do these comments indicate? in fact, if you take a look -- the president included the words moderate prosperity.

-- gent the same line level through 22020 would suggest that the where seeing a little more appetite going forward for a subtle slowdown. it won't tolerate a hard landing if you will, but there is a moderate prosperity and more vague allusion to what kind of economy and growth level policymakers are looking at that we may see a more willingness to more- give policymakers room. the other thing is quality over quantity, looking at the environment. not just air as you can see behind me. water pollution, income

distribution, you talked about quality in terms of china's growth. it does seem to be maybe a subtle shifts. we will have to wait until congress is over to see if there is appetite to take part in more these painful reforms. looking ahead to this data dump in it is more of the same, steady as she goes. bitcted to slow little coming in at 6.8% is the consensus estimate, but still -- just a few days ago saying he sees potentially 7% growth so it is noteworthy a are looking at potentially doing

some more of these reforms and not going for these superhigh growth. sales, industrial production to continue to paint readingsure by pmi over the past few months of stability and relatively strong growth. thee have been doing all work counts here. there wasn't a whole lot of mention when it came to the currency as well. it seems the president and china still nursing their ones from what happened on august 20 -- on august 19. heidi: we remember the shock devaluation. deftly going down as one of the policy missteps. i think most agree and we saw -- to try to get

that back under control to regain credibility and the confidence of the markets and we also had the equity rise and fall for the shanghai cop. that market has not recovered. -- that ise shadows an argument that bloomberg intelligence makes when it comes to opening up reform. this one statement saying they will improve the framework of regulation when it comes to monetary policy going forward and also see interest rates and exchange rates become more market-based. not a lot of detail. he spoke about the yuan trading ban. -- we're looking ahead.

potentially there is a financial work conference so we may get more details whether that will give us more of a roadmap going forward for the next five years the next three months. the other thing we are washing we have been with the , he has for so long now really been around and at the 2002 and is known as the great reformer. the past three days he has been ringing the alarm bells. whether he stays or goes when it comes to reform, that will be a crucial thing investors watch for today. >> the market has been honing in

on the comments. thank you, joining us from beijing. work ahead, australia gets with the latest employment figures. will it show a further drop in the jobless rate? those numbers in about 20 minutes. is a victory a sure thing -- abe victory a sure thing? keep it right here. this is bloomberg.

♪ asia.s is daybreak man.f on month -- yvonne will reachting they their best in more than three decades.

some analysts say the optimism is overdone. bloomberg's men generally is following this. what is behind a stock rise and ?isit justified there is certainly a lot of excitement coming sunday, but it is not just about the election. there's a whole bunch of things. weaker yenrnings, and plus in japan, you have this election coming up where oblique --expected to -- probably some people have said different things about this extra boost coming from the elections

shinzo they are saying abe -- this election does not change the power he has always had for policies that he wanted to pursue and they are saying after this, the new administration might rochus less on the economy and more on other stuff like constitutional changes. yvonne: it is fascinating because it seems like a couple -- they were looking to be challenged and now you wonder if there's any chance she will make a dent into shinzo hobbies majority. >> it's interesting how the polls have changed quite a bit. like you said, as early as october, polls were saying the -- which would be

now the latestt polls like you mentioned earlier are showing that is not going to happen. he's not going to make a dent and he is heading for the best election results in three decades. like he'sesn't seem going to make a dent and abe will have this huge majority leadership. of course, we have to see what happens. supporters say that this .as exceeded is that also a draw for investors? >> yes. people part of this hype are thinking with abe

reaffirming his leadership. the government is going to have another huge push towards economic growth and see this policy revive again which actually had a lot of impact over the past for five years since 2012. but people have different thoughts about what his priority will be and his policies going forward. yvonne: thank you. just got the trade numbers that came from the pan earlier. year, also1% year on a slightly missed forecasts which left a surplus of nearly $6 million.

thank you for joining us. we continue to see the export engines power through all across asia as well. how much longer can this last? situation ise onorable and we have focused and strongly -- [indiscernible] we focus on the exports for china so i think the japanese exports, and particular under the current level will continue to grow, maybe for the coming year. yvonne: heard economists say

this uptrend is quite cyclical. the iphones have already been made. more could we see or can it hurt the supply chain powerhouse that we see? goodthink we have suppliers and of course there .ill be some impact in the meantime, we consider japanese companies can benefit so -- e growing

>> if shinzo abe and his party have a strong showing and they come out of this on top, what does this mean for policy moving ahead? a lot of people are still waiting and there is that potential tax over the economy. >> if you take a look at the , oney commitment documents ldpresting change is the has now put a more important activity gains. economics now shifting --

waiting for labor reforms and so forth, but the markets are not necessarily that prepared for that policy and instead they are focusing on the monetary policy and fiscal policy. hike will think the night -- not necessarily -- as long as the government sticks to boosting productivity labor. yvonne: a lot of economists in japan who are not so ordered of -- couldg of her the start pulling away from some of the bond purchases? already started

tapering. say they already manage and control tapering and we tend policyk that is the we tend to think gradual tapering is quite likely . economy, we the tend to think acceleration of tapering is possible. saying evenyou are if shinzo abe winds, the chance of him reappointing kuroda are 123 -- 1-3.

why? one, as we report, the chance for the reform it will be 30%. guy -- for thelimited chance goingorship to change .orward i do not think he is a leading candidate, but it's interesting this without affect the policy going forward. caroline: --

yvonne: perhaps bringing fresh ideas. , a look at the business headlines. steelr that share of kobe -- by about halfhtly of 1%. the situation is not considered unsafe, and there is no intimate need for a directive, but have lost about 40% of its value. -- sales of two 80 million barrels equivalent. $793 quarter revenue was million. meanwhile, has lowered its output guidance and a third -- i didn'tnue of

think to sell its oil trading unit. the deal is highly concentrated and may not end in success. the failing oil unit is crucial for the survival of noble which is one of asia's largest commodity traders. they hope to complete the sale last month. technicalitiesme and they are obviously looking for it clean do. >> they are opening an investment office to manage softbank's business fund. those states are looking at new opportunities and saudi arabia

said to be committing 45 alien dollars to work with softbank. the central bank finally hear a dissenting voice on rates? this is bloomberg. ♪

yvonne: looking a little bit cloudy out there. kathleen: you're watching daybreak asia. big central-bank meeting tonight. spotind of in my sweet waiting for the numbers in a decision coming up in the next half hour. septembere of the jobs numbers. allen is in sydney. coming in better than

expected, the unemployment declining to 5.5%. also, a suspicion a bit of an expected job numbers. to 19,000,ent change 800 jobs created. bywere expecting the survey burke and was coming in. full-time employment changed a little bit. if we take a look at part-time created.000, 700 jobs a little less than what we saw. 65.2. holding steady at released,numbers got

78 spot 62. you, 5.5%, theor unemployment rate climbing. full-time jobs a little disappointing. thank you. .hese anxious currency traders let's get a little more of the market action. >> we are seeing the policy and the kiwi some of the strong gainers. -- on to focus in on well what is going on with japan. the latest trade data showed that the recovery is powering ahead. keep an eye.

japanese debt is falling across the curve. -- said this month it will adjust the shape of the yield curve has necessary. you can check that out on g #-- julyields have risen to and investors are anticipating the bond will continue to rise even after the election matter who winds. for investors, they are going short on the long and the curve and a last look at what is going on for a nikkei. you have materials in this

benchmark it since march 1988. kathleen: time to get to the first word news. grew by double digits for the third straight month. trade recovery showed no signs of letting up. imports increased 12%, leading to a surplus of $5.9 million. u.s. secretary of state rex america'splayed out role in southeast asia. he described india -- ford is recalling 1.3 million

trucks to fix a problem with door latches. they recall comes as they do see whilever wall street pushing faster into self driving and electric vehicles. back afterbouncing its biggest loss in over a month. it comes after the trading commission -- jurisdictionimed over the tokens for some ipos, but says there is no inconsistency. reveals disagreements over further stimulus. five of the six committees voted to unchanged this month and

another 25 basis points to little too late. -- and moreators data is needed. thanl news powered more 2700 journalists and analysts in over 120 countries. >> the bank of korea expected to keep interest rates on hold and some analysts are warning they could be pushing for a hike. chris joining us here in hong kong. we heard from the governor month ago saying they seek clear signs of recovery. are they inching closer to a hike question mark >> that seems to be what the indications are. if you look at the korean bit sub it is a little 3%. south korea grew at 4% so they

have taken a step down. that is why they have kept the benchmark rate for many -- for quite a while now so they are looking at other signs that it may be time to let that benchmark off the floor. you look -- look at export growth, it has been accelerating and continues to do well this year so they had inflation around where they wanted to be so there are fewer and fewer reasons for them to keep the benchmark quite low. hurdlesthere are some to neighbors to the north as well. how much does korea -- occasions where external events can affect consumer spending so of years

back there was that her if it for disaster. that affected consumer sentiment and that affected consumer spending and the economy we have seen a lot of tension surrounding north korea in recent months so they could pay dividends for the central bank to hold off a little further and see if there's one of these kinds of episodes and negative reaction in consumer sentiment. hear fromat will we the governor then question he talked about slightly hawkish language before. >> we're not expecting any change when a statement comes out in the policy rate, but the key thing will be later in the morning. what kind of indications are we getting from the central bank governor.

indications they are prepared to take will be the first rate hike since 2011. another thing they may want to keep an eye on it is a few months down the road, probably greater clarity on the federal reserve outlook in the u.s. tax cut outlook and if that starts lifting the u.s. dollar, that would give another push to the south korean economy, maybe give them a little more confidence that now is the time to raise rates yvonne:. speaking of confidence, you have a political scandal in korea. the last press conference, governor lee mentioned north korea tensions and how is -- he was concerned about that. i guess to questions. you expect him to comment on this again and is it something

better. even get the be ok is moving cautious year question mark -- year? >> i think are right. they want to keep a close eye on it. one analogy that i would like to use when you think about the south korean economy is the analogy with samsung. biggest company in south korea. at how samsung has had so many challenges and problems over the past year. problems with leadership, scandals. you look at those earnings reports and they keep on doing well. this month, they beat expectations. there's a lot of clouds on the horizon for the economy. at the end of the day, the

fundamental looks solid just like that in the indications are they are preparing the ground for a hike. yvonne: thank you. down planswe break retail sales at it due out at the top of the hour. this is bloomberg.

♪ this is daybreak asia. -- expecting expansion to pick back up slightly. joining us now from singapore

how so. of just curious, in terms what you are expecting, a lot of things expecting at gdp. seems to put it whole different cents on what might be happening even though joe said europe 7% growth. our forecasts is 6.8 and the market has priced in the upside risk because over the weekend, china could have growth over the second half of this year. i think the number will be 6.9% to 7%. the problem right now is that if , the quarterlyth

percent growth will be around 2%. since q2e the farthest 2013. that is something they will have questions about. and generally, i think china's economy has been improving. yvonne: in terms of what we are , what do your think is going to be the most important take away here? is it going to be something chexi'sabout president vision? i think at least the two highlights by have, i think

first thing it is very clear not get the gdp target the next 10 years. growthwth in the economy is important for the economy and the second thing is debt. the main issue is that out balanced growth approach which means china tried to strike a balance. the quality of the growth -- basically, china tries to andeve a more balanced eco-friendly economy going forward.

the thing we learn from this speech is that the president suddenly dropped this pledge from its predecessor to 2020. the income by can we take that as a signal there is more leanness to assess the lower growth and what does that mean for the growth target? years, wepast two china gradually -- last year, china had to achieve 645%, but this year, i think around 6.5 and this looks like china accepts low growth. 6.326.8 will be the rate growth will6.3%

still help china achieve the target in 2020 so i don't think the numbers are problem. the problem is that the profile of the economy and the numbers. for example, if we have 7% -- baby the, service industries picking up. hand, wen the other heard from the resident. not a whole lot mentioned about the sme sector. in fact, bigger stronger state owned enterprises. it does not see my kids really able -- willing to take these on and what does it mean for the private sector? interestingt is

that china has the two check of the reform. they want to see a lot more but they will do more like privatization, especially in the heavy industry. the most important thing for chinese authorities is to improve the efficiency so for the private sector, this is not really mean the market won't be competitive. i think the competition won't compare. it will gradually lower the barriers for the private companies to end the market. yvonne: appreciated.

-- it is also available on your mobile anywhere app on your way to work. settings.omize your make sure to check it out. this is bloomberg.

♪ asiaeen: this is daybreak and i'm kathleen hays. thene: negotiations to buy wall units of trigger noble are comforted and may not end in a deal. he ceo ian taylor says cannot say where the talks might and. >> we are engaged. we have been talking to them, but i'm not quite sure. this is a very complicated deal. there are some technicalities. aey are obviously looking for swing deal so it is hard to say where it will end up. -- >> you are leading you on. no, i think it is the overall

terms and conditions. >> i want to understand. see ay we could provocation of $60 in the near terms. ? >> iy need to extend think if they want to continue to see the market going up they would like to extend. i think will be difficult because there is upward pressure from many of the countries, but i think for the price to move north. all the traders in the world would love to. what can you coming about the physical drawdown in the market? can you confirm that kind of drawdown? yes, the market has taken

a lot of it out. has tightenedrket up. in -- r, the market was [indiscernible] the trackers are pesky, they come in at 50. you think they will come in and capitalize the market? >> no, i question mark think that is one of the biggest downsides to the market is the amount.still see a huge we're still moving a lot of oil from the u.s. to the far east and i think i will have an impact. yvonne: that was and taylor speaking in london. we are about 10 minutes away for

a decision from the bank of korea. the stars seem to be aligning more towards a rate hike for the bank of korea. figures,omes to these double-digit growth. 2.7%. also, getting close, if not above that target right now, yet we are still seeing rates at one and a quarter. it looks like the tilt we heard earlier this year, we are looking for clues in that meeting when he does -- when he updates the growth. >> most interviewed said they are on hold right now. one of the things is a tension in north korea.

i want to share some research. they are expecting a unanimous vote. they think it will send the signal. see what happens there and they are expected to use the forecast to 2.9%. there are some changes. we will see if any indication has any hurdles when it comes to consumer spending. a quick look on what is coming the next few hours, you have gdp out of china. looking at that chinese data, quite amazing. yvonne: so rare we have to together. at retail sales and

production -- and about an hour and 15 minutes. -- what canhas ever we do about it? ambassador robert gallucci joining us. i can hardly wait. that is it from daybreak. next.verage continues this is boomer. -- bloomberg.

♪ david: when you told people you would raise a $100 billion fund, did they tell you you were crazy? masayoshi: some people said. david: did you suffer discrimination in japan? masayoshi: that made me stronger. david: how did you feel losing $70 billion of net worth? masayoshi: i was so close to full down from the cliff. we almost went bankrupt. somehow, i survived. >> would you fix your tie, please? david: people would not recognize me if my tie was fixed, but ok. just leave it this way. all right. ♪