♪ 7:00 a.m. in hong kong, live from bloomberg's asian headquarters. i am yvonne man, welcome to "daybreak asia." republicans rollout their tax proposals. ironclad says he sees will for the first revamp in three decades. says his fed would keep a close eye on financial sector risk. bloomberg's global headquarters, i am betty liu in new york, where it is just after 7:00 p.m. thursday. the iphone x the finally hits the stores, are you excited?

the demand for their most important device in years. trade, security, and north korea, we check the president's agenda as he packed his bags for asia tomorrow. ? ♪ it seems like the president got unfinished business done before he headed to this part of the world. naming jay powell as the next fed chair. not a whole lot of fanfare. there seemed to be opposition on the tax bill mounting now. will bebsolutely, that the next big thing to watch, whether we can get this tax reform bill done by christmas, as president trump promising -- promises.

likeesting, jay powell janet yellen 2.0. steve mnuchin, pushed president trump over the line into nominating him as the next fed chair. yvonne: it certainly is the case, plenty of earnings to digest after the bell. apple, alibaba, both strong. we have the jobs report, as well. betty: let's look at u.s. markets. pretty much taking this news in stride. the s&p finishing the day up. and made at the open its way back up, the dow up 81 points. the nasdaq finishing the day flat. no earthquake in the markets. that is setting up for a mixed session for you in asia. yvonne: not a whole letter fireworks here on the new new zealand, the

nzx 50 up 0.1%. the kiwi, flat, .6910. a little bit of a roller coaster -- rollercoaster ride. trading in sydney just underway, retail sales numbers in the next hour. shares up a seven points on the asx 200. 28 month highs for wti. today, it is japan culture day in the country. the yen still trading above 114, against the dollar. key to watch is the kospi. we definitely could see up pullback on thursday. betty: let's get the first word news with courtney collins. >> first up, alibaba continues to power ahead, even after adding $250 billion in a market

value. it is raising its full-year outlook for revenue growth after sales rose 61% in the three months through september, the fastest pace since listing in 2014. alibaba diversifying investing in the cloud and ai as well as brick-and-mortar stores in china. the stock is up almost 90% in the last year. apple jumped in after hours in holiday period sales forecast that exceeded estimates. they expect robust demand for the iphone x, the most important product in years. apple says the device will help push sales to $87 billion in the final quarter. the previous high was $70 billion in the holiday quarter of 2016. broadcom of the latest indeed president trump's calls to return to the u.s. it is moving its headquarters from singapore and what the ceo

-- the ceo says they will port $20 billion into the u.s. they have listed san jose, california as the cohead quarters. shares slumped on the news before recovering. my administration is working every day to make the u.s. the most attractive place in the world to do business, so that more and more companies like broadcom come back to our shores, grow their businesses and create more and more american jobs. you see it happening on a daily basis. >> malaysia is the latest country hit by hackers. customers'6 million mobile phone records, a day after australia reached -- told of a similar breach. fireeye says many companies are unknowingly compromised and

should assume they will be attacked. 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. betty: as we mentioned, no surprise at all as we said yesterday. president trump going with jerome, jay powell, when janet yellen's term ends in february. our global policy editor kathleen hays joining us now. he had been chosen, he made his comments. what happens now? is aeen: what happens now nice period for jay powell. janet yellen is not due to step down until february. baton theanded the janet yellen, most of the time, they go up until the end. jay powell also knows -- already

knows everybody at the fomc pretty well. they have to get ready for the job in front of him. he sounds like a fed chair, don't you? he spoke earlier in the rose garden. let's hear what he said. as long as he passes the senate confirmation, he will take the chair. >> we understand that monetary policies matter for american families and communities. i strongly sure that sense of mission and then committed to making decisions with objectivity, based on the best available evidence, in the long-term policy of monetary independence. kathleen: isn't it interesting that he chose to include the phrase "monetary policy independence." it is a given, they are independent from the federal government, congress, white house, and they have to answer

to everyone, including the american public. i wonder if on some level he is already starting to address the question that may come to him about his independence from donald trump. donald trump is a republican who has been working in other republican administrations. people who know jay powell well do not think of him as a partisan person. about, thing the think if the think about, if jay powell is going to be fed chair, who will be the vice chair? it was made clear by steve mnuchin, the person that pushed inside trump's inner circle to get jay powell chosen. who will he push for, and will john taylor, if it is offered to him, will he take it? a powell-taylor ticket would be interesting. a historicland,

move, they raised rates for the first time in a decade. the markets took this as more of a dovish hike. kathleen: they sure did. mark carney has been leaning in that direction for a while. there were a couple defenders -- dissenters. let's listen to what mark carney said in explaining why he made the move. >> with unemployment at a 42 year low, inflation running above target, and growth just above its new, lower speed limit, the time has come to you that our foot a little off the accelerator. that will help bring inflation back toward the 2% target, while still supporting jobs and growth. kathleen: the statement also considered very dovish, weak productivity. k inflation up to three point set -- 3%, gdp 0.4%.

that is the conundrum they are facing. that is what he said, only a couple more rate hikes over the next few years. yvonne: stay with us, we want to bring in our next guest. he is now at the university of chicago school of business. he joins us here in hong kong. perfect timing. let's take a look at the comment from jay powell. we have not heard too much from him recently. he mentioned the economy, close to full employment, close to a full recovery. hen't make it seem like would be janet 2.0? randy: in the beginning he will be close to where janet yellen was because he supported monetary policy actions that she has undertaken. i think of the gradualist approach is one that is natural to him, and one janet had led.

at least for the next six to nine months we will see that. if the economy changes and we get a spike in inflation or a shock, we will see the potential difference between jay and janet. but for now it will be continuity. in the long-term there seems to be a lot of questions. what happens if there is a downturn? it is likely we could see an end to the cycle, recession in the u.s. you are in the fed chair, regulatory affairs during the financial crisis. what do you think powell can bring to the table in terms of his experience? when it comes to dealing with a potential crisis, there is not a whole lot of room to cut rates. republicans have not been too keen when it comes to qe. randy: whether jay has a phd or not, it is the circumstance

rather than the particulars. one of the reasons it is raising rates is because you do not want to let a good boom go to waste. people talked about not letting a good crisis go to waste. this is the time when you should be moving up, the bance sheet coming down. jay has been supportive of that. e woulve a low endpoint than janet yellen would. they say they are going to unwind, but have not said how far down they will go. will have a handle on that, in the $2 trillion area, whereas the janet yellen would've had the $3 trillion area. reduce rates, try to provide support potentially through quantitative easing. also hopefully what we will do is get a good, robust financial system to sustain shock better. betty: hang on one second, we

have breaking news on the earnings front out of singapore. the united overseas bank with its third-quarter net income at $883 million singapore dollars. also noting the net income margin at 1.79%. the nonperforming loan ratio at 1.6%. estimate -- we will watch have a stock behaves when the singapore exchange opens. hi from hong-- kong. getting back to powell as the appointment, with paola pointed to the chair we have one more vacancy here on the board of appointed topowell the chair, we have one more vacancy here on the board of governors. randy: the president has a lot

of opportunity to shape the board. he has a vice chair for the traditional vice chair that probably will focus on monetary policy. jay is a crucial person. the first among equals of all the governors. these others could also have an influence on monetary policy. kathleen: randy, i want to ask you. putting yourself in jay powell's shoes -- he has been on the board five years, established himself, is well-established and well-liked. now he steps up to this seats. you have been there, watched the , what do you think is his biggest challenge? what would you advise him after being there? if he asked you, what do you think? the key thing is being

willing to listen and learn. that was one of the things we saw from ben bernanke ring the crisis, the way he operated within the market committee. things, very new controversial things, but not everyone agreed with. but he was very open to listen to the issues and concerns they had. he would push back and say we and thato x, y, or z, is why we have to do it. it was very valuable for jay to be able to do that. yellen was a consensus builder. than benewer dissents bernanke had. it is important for him to listen and learn the economic analysis. he is someone who has been a very avid consumer and an excellent consumer of the analysis economists have put out. it is an acceleration of the

activity he has already been doing. now there is a bigger burden where a lot more people are focused on him specifically. betty: stay with us, we will continue our conversation with you, but this time looking at the republican tax plan just unveiled today. thank you to our policy editor, kathleen hays. coming up later on, more insight into jay powell from former atlanta debt -- said dennis lockhart. this is bloomberg. ♪

>> we are going to reduce the business rate to 20%. this will in courage companies to stay and produce here in america, where we want jobs and better paying jobs.

our plan calls for massive investment of capital back into our country. >> top line on what this republican tax bill is about is a $2 trillion giveaway to giant banks. number one recipient in the entire country from this tax break is wells fargo, the company that cheated their own customers. >> i cannot say is the moment where you want the most fiscal stimulus on the market. 3%, gdp was registered at it is not the moment you provide the biggest stimulus. some thoughts of their on the republican tax proposal. let's bring in laura davidson from d.c. this morning. it has been interesting, we got what we were expecting with this cut in the corporate tax rate to 20%. but the market reaction was underwhelming. traders aree

doubting this would get done by christmas. laura: it has been priced in a little bit. we have been talking about this since january, when trump was elected. we now have more detail. but these topline numbers are pretty much the same. now companies are modeling that they have the details in the fine print and they can say, are better-- will i f or the same? what is likely not going to survive? laura: it is a lot of give-and-take. one thing that is tenuous is whether or not that corporate rate is going to be permanent. it might pass the house, that 20% in perpetuity. but when he gets to the senate, there are stricter rules on how much they can add to the deficit. that is one of the first things they can take -- tweak with. it is easy to kick the can and

say in 10 years, congress will act on it. who is to say if they will. betty: the other aspect was repatriation at 12%. we know that is the focus for investors like apple. how stimulative is that going to be? laura: this is a big deal because companies can reinvest their cash overseas and do not have to pay any tax on it. they have to pay 12% no matter what, it is not optional. previous proposals have had 8%, 10%. could make companies rethink where they store assets, how they are restructured. there is a tax on a foreign minimum tax. if you're earning in any low tax jurisdiction you have to pay 10% on all of that. betty: still lots of questions around the tax bill. laura davis joining us from washington.

back with us from hong kong is former fed governor randy krasner. let's talk taxes. what did you make of this bill? randy: i have not digested all of that yet. a lot of pieces. but it is along the lines secretary mnuchin had talked about, and the president has talked about, to try to do fundamental reform. they could have taken a few pieces and done something easier to get through. trying to do fundamental reform like has been done with reagan in the 1980's. that is not easy because there are a lot of people that will say, preserve my tax break, you can take the other persons away -- other person's away. betty: do you share the puzzlement, we are here at gdp a

3% in the economy is humming along, why are we going to put in a stimulus plan? it is not just a spending plan. a simple spending plan would be a short-term stimulus plan. if they can do -- if it can get through changes, it is a fundamental change in the incentive for investment and growth. that will lead to a long-term impact on growth. we have been growing in the last two quarters at 3%. part of that is because of the anticipation of some of these changes, as well as regulatory reforms that have taken place at the agencies. if we want to make that sustainable, we have to do structural reforms. going to see are structural reforms and see 3% growth as the president is promising, will the fed have to raise rates more easily? makes it principle, it

less hard to raise rates if the economy is coming back. yvonne: overheating in the economy? randy: for sure there is overheating. but if you can move the sustained growth rate from 2% to growinge economy is more rapidly, it does not necessarily generate inflation. greenspan said productivity growth is growing, so i do not need to raise rates as rapidly. he was right on that call. we will see if this gets through and has those impacts. it has the potential. yvonne: great to have you here in hong kong for -- former fed governor and professor at the chicago booth school of business. knowhe stories you need to in this addition of daybreak. for subscribers, go to dayb on your terminal. the mobileable with

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♪ check of theck latest business flash headlines. starbucks plunged after sales missed estimates. comparable sales rose 2% compared with the median forecast of 3.2%. the latest forecast in asian-pacific and in europe and the middle east, now revenue $5.7 billion against projections of more than six dollars billion. surging demand for cosmetics and oreal struggles in france and america. such as urban decay leading the way.

it raised to $7.1 billion. l'oreal says the asian division helped them with growth. the new iphone x, more on that. this is bloomberg. ♪

yvonne: happy friday, 7:30 a.m. in hong kong. betty: it is 7:30 p.m. thursday in new york, where markets closed mixed, but pretty much taking this news in stride. fed chair nomination and also the tax bill. i am betty liu in new york. yvonne: i am yvonne man in hong kong. you are watching "daybreak asia. " >> house republicans had begun rolling out proposals for tax reform, something president trump says will be a christmas present for america.

paul ryan pledged fast action, saying he will revamp the tax code for the first time in three decades. the plan includes cutting the tax rate to 20% and a levy of up to 12% on companies' offshore cash. jerome powell expected to be the next fed chairman, pursuing the goals of stable prices and maximum employment, while watching risk. powell has been a fed governor since 2012 and is seen as a candidate for continuity. he favors gradual rate hikes and looser regulation. it is subject to senate confirmation. >> inside the federal reserve we understand monetary policy decisions matter for american families and communities. i share the sense of mission and am committed to making decisions with objectivity based on evidence, in the long time

tradition of monetary policy independence. >> the u.s. is leading a global anticorruption drive to have mining companies disclose payments for me to governments. the decision is expected to poor but citizens in mineral-rich countries about how their political leaders receive taxes, royalties and other payments. they say it does not fit with u.s. law. venezuela will restructure global debt after one final payment. president maduro blamed the u.s. for the blockade preventing the country rolling over its obligations. they will make a $1.1 billion payment on their oil company bonds that became due thursday. they will renegotiate. goldman sachs is the biggest owner of its u.s. dollar debt. 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. ♪ yvonne: we are counting down to major market opens in the asia-pacific. to's bring in david ingles kick off the end of the trading week. we have the fed chair, the tax reform bill, what are we looking for? david: japan is closed. that takes away [indiscernible] we have 90 minutes more before taiwan. the reason i bring japan up, it has been the key driver this week. average we get 60 to 100 companies reporting earnings. we will talk about earnings a bit later on. when taiwan opens up, i will be looking at the apple suppliers. i am calling it the big three plus one. the other thing i will mention when you look at apple,

especially this specific set of guidance, is samsung. it does supply the oled screens to the new iphone. they have cornered that market. if apple does well, samsung does well. even if apple does not, samsung as well. if everything goes to script, and it looks like we will see monetary gains, record highs. taiwan regains its 27 year high, thailand -- taiwan comes within a record high. yvonne: earnings we should look out for this week? david: i think we had uob earlier from singapore. 11 companies reporting earnings today. to recap, look at my bloomberg, this is an ea function. you get a sense of where we are.

out of 817 have reported. a smaller majority when it comes to the bottom line. if you had to choose a winner, -- not very exciting today because japan is closed. yvonne: especially with the yen, not a lot of movement there. the fx space is all about the pound. david: they did hike. they are taking away the extraordinary stimulus they put in, post-brexit. it is about the guidance. mark carney said we are looking for two more rate hikes. have a look at my bloomberg for the first time in two or three months, trading below the hundred day moving average. you see the selling pressure right here, just above 130.

the other thing to mention about fx, how massively bought up gild for yesterday. yields fell since the first time the bank of america cut -- bank of england cut rates. on your right, power starting off point. japan is closed, so we do not have trading in cash treasuries. as we get into the open in south korea. betty: thank you, taking us inside the bloomberg. apple is jumping on the holiday period forecast. they expect robust interest in the iphone x, its most important offering in years, maybe the only thing that will be important for apple in the years to come. mark gurman joining us from san francisco. we hear about the lines already.

what is demand looking like so far? pretty great so far for apple. they would not talk too much about the demand or how many units they have. what we saw is when the store opened midnight october 27 last week, five to six week shipping times within half an hour. today, decreased in many questions, including in greater china, australia, germany, italy and france. but in the u.s. and china, still five to six week shipping time. there are 500 people in line in some of the stores in japan and singapore. really high demand. people around the city block like i have not seen since the first iphone launch a decade ago. betty: so much anticipation. almost makes you think, because we had an analyst that said, this will be the key product for them in the years to come.

it will be all about the iphone x. what is the downside to that? mark: i do not think there is too big of a downside. they have a formula, there is a iphones and the software and services and accessories built around the iphone. if you have a great core player like lebron james, you want the best players around him for the best chance at championship. the best chance of success, they will build around the iphone, make new accessories, software, service offerings to augment the phone and make it better. we will see that for years to come. betty: we heard tim cook say earlier he believes these features will justify that price tag. what are the features of the iphone x you think are exciting customers the most? the biggeritely screen with rounded corners, it has a strong appeal, because the more room you have, the more content you can see.

the cool thing about this phone we have been reporting on, they are putting a giant screen in a smaller body. before it was a compromise, you could get a big screen, but the phone would be big, it was hard to fit in a pocket or purse. can get an iphone like the 6, 7, or 8. it is too small for me, pretty small compared to the plus models. this is a leapfrog product where it does both. you have a big screen and a small frame. that is its most appealing enhancement. if you compare the old models with the new it is such a big difference. you just can't go back. you, mark gurman, bloomberg tech reporter joining us live from san francisco on apple. more talk about alibaba capping a $250 billion stock rally this year with sales growth of the smashed estimates. september quarter revenue post

-- pushed 61%. could this growth be starting to peak? at's bring in ramy inocencio the wall with the charts in need to know. ramy: you're were talking about growth, cloud computing, pushing to something new. e-commerce growth still gangbusters. there is one thing investors should take a look at, it is this white line on g #btv 4742. the white line is the gross margins. since 2014 they have fallen from 75% to 60%. is that a big fall? relatively, yes. we were talking about apple, they are gross margin is 27% or so. this is still going really well. the purple bar is the revenue 60.7%, year on year.

the second chart, g #btv 4698. these orange bars are all about the active annual accounts for the company. million.1% to $488 that is the annualized rate. jumped.s you can see the share price for just 2017 has risen more than 100%, about 110%. we are seeing perfect numbers there. this is a financial analysis function for alibaba. what you are looking at in the white bars, it is heading downwards. but it still represents a percentage of growth. this is the growth for the revenue for cloud computing,

jumping up by 99.2%. that means it double quarter on quarter. we are looking relatively what happened with of the core e-commerce business that was 63%. also very good. this includes storage, security and website services. past couple the weeks when we saw other tech companies report from amazon and microsoft's azure, we see a push into cloud computing. let me wrap this up with a bow, g #btv 4512. this is the share price performance year to date with ers,aba, as well as its pe the u.s. thing stocks. alibaba up 110%. the blue line is not a things.com a this is tencent. even tencent and alibaba are outperforming the thing stocks. this blue line, google alphabet.

you can see when you take a look at all this, alibaba does beat them all. if you're in it for the long, you are smiling. it looks like everything is hunky-dory, moving ahead. betty: thank you, ramy inocencio, looking at asia and tech companies. president trump will be arriving asia, his longest foreign trip yet. this is bloomberg. ♪

betty: an overcast day in seoul. we are counting down to opens, including in south korea. kospi futures up 0.1%. a mixed session in the u.s., not lending a lot of direction. this is "daybreak asia," i am

betty lou in new york. yvonne: i am yvonne man in hong kong. president trump embarks on a five nation asian tour friday where he will have tests of his economic and foreign policies. there is continued worry about north korea, but he will be expected to deliver wins when it comes to trade. there is continued worry about northour reporters are on to her us -- on tour for us. >> five nations, including stops in vietnam. jong-un have kim following him around, not in person. all these issues with trade, because of the different trade deficits the u.s. has with totalingilippines, $577 billion u.s. dollars in

2015. let's get to the first stop, japan, 69 billion dollars trade deficit with japan in 2016. second behind china, the u.s. also keen to memo -- to remove safeguard mechanisms to remove tariffs on goods. there are a lot of beats -- beefs on trade. the panel be seeking reassurances from trump that there will be a security umbrella over japan, given north korean tensions. chummy at as relationship between mr. trump moon as he has with abe. one of the first things trump said was to renegotiate the trade agreement with south korea because he sees inequities. south korea fueling this $28 billion trade deficit with the u.s.

it double over the last decade. later next week he goes off to china. that is one of the big ones. north korea at the height of the agenda, $487 billion. market access, we will be hearing about. what does xi jinping want? he wants trump and the u.s. to get on board with the belt and road initiative and drop the into allegations of stealing intellectual property from u.s. companies. quickly, we get into hanoi. a big issue, the u.s. dropping out of it. vietnam once closer economic ties with the u.s. to lessen alliance -- reliance. and then manila, talking about -- talking with duterte. yvonne: you said before

president trump did develop and asia strategy. if you look at the list of places he will be stopping, places he is not going, doesn't give you an indication of what he wants to achieve? things,mentally, two reassure asian policymakers that asia is part of it. and second, to indicate he has a strategy. they have indicated they have a strong indolding a pacific strategy. the question is, is that credible to asian policymakers? is very good economic component, a security component? or is this just pro to containment of china? -- proto-containment of china? betty: trump will be meeting with his counterparts, but they have been elevated, you might

say, includes of their own power. partyping after the 19th congress solidifying his role in china and his position. then you have a shinzo abe, who has a new mandate after the snap elections. will that change the dynamic between these leaders in their meeting? >> it absolutely changes the dynamic. because trump comes to asia in a time when his politics at home are challenged. there is the mueller investigation. he is struggling to pass tax reform. is strong.e abe, who ou wl see the personal relationship with abe and trumpet being important to the alliance. then he will go to china. xi jinping after the party congress is in a very strong position. and trump looks on the back foot. the rest of the region is going to look at that u.s.-china dynamic for signals how they

should align themselves in relative terms. betty: on that point i am curious, we read so much into the pomp and ceremony around this. esam just waiting for the mem that will come out of this trip. what kind of reception is trump going to get? going toina, is xi lavish them with pomp and ceremony to elevate him, as well? >> absolutely, at least on the public from the two will be very cordial. much like they showed in florida when xi visited. behind the scenes is much more tricky. trump wants more access for u.s. companies, there is a big trade deficit. he wants to not only nudge, push china to exert more pressure on north korea. there are a lot of contentious issues between these two.

praise on itished xi jinping, saying he is a strong man. behind the scenes, a lot of tough talk, perhaps. whatps we can ask evan pressure china can exert? yvonne: is it necessarily a zero-sum game? can it be a win-win scenario? >> there are sources of cooperation and competition within the relationship. what is the relative balance between the two? because trade and north korea are the top of the agenda, finding the balance will be a challenge. the chinese have not been willing to make the structure reforms to their economy that would open up market access for american companies. there are huge sectors where -- financial services is a great example. on the amount of equity american companies can invest in chinese financial

firms. yvonne: it has been interesting, the timing of this trip. we heard about this china and korea detente. they say they do not want the thaad missile system. announcing this the day before trump arrives in asia, what is the signal they are sending? the chinese are trying to move chess pieces in northeast asia. they recognize they should every chapter north korea before. doing it right before trump's limit theoing to strategic space for trump to engage south korea. fundamentally, the chinese want diplomacy. solution,d diplomatic they know moon supports that. and south koreans will be aligned on one approach to north korea. increasingly, the u.s. and japan will need a different space, preferring much more sanctions,

coercion-based options. it was a smart play by the chinese. it should have happened months ago when the moon got elected. nonetheless, it changes the dynamics in northeast asia. >> you might have all six party leaders speaking face-to-face at apac. yvonne: great to have you, joining us in our hong kong studio for this fruitful conversation. one feature, our interactive tv function. you will find it up tv . not only can you watch us live, but see previous interviews, securities and functions we talk about. a good day to look at this, given the big newsmaker we have. you can recap our conversation with the eurasian group. this is for subscribers only. this is bloomberg. ♪

♪ check let's get a quick of the latest business flash headlines. micro-lendersnese fell after bloomberg reported regulators are considering a crackdown on the sector with claims of excessive interest rates. they say regulators may shut firms found to violate laws, restricting and capping interest rates. the sector has grown since a 2016 crackdown on peer-to-peer price -- financing. yvonne: questioning the architects of plans for dual flash shares. willwant to know how they balance investor safeguards with attracting new economy companies. reports on the proposal expected by the end of the year.

hour, former atlanta fed president dennis lockhart joining us with his take on what kind of fed chair jerome powell will be. keep it here. this is bloomberg. ♪ is this a phone?

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>> 8:00 a.m. in hong kong. i'm yvonne van. "en to " -- welcome to ."ybreak asia -- daybreak asia ron paul commenced a stable prices. eye on thelose financial sector -- sector risks. it's just after 8:00 p.m. on this thursday in new york. oil is continuing to rise it has enjoyed since dune. investors backing further

curves. alibaba powering ahead. last quarter, adding $250 billion in market value this year alone. ♪ >> to snow stopping these tech shares, right? a large part of the rally we have seen -- no stopping these tech shares, right?we are seeing this in u.s. companies that don't have a lot of international business. goingly, you expect global. take a look at g #btv 4690. it shows you the indexes, the index and white made up of companies who have primarily domestic sales in blue -- who have domestic sales, and blue international sales. you can see the gap, and how much the white line, those companies that are domestically focused, have rallied.

that:rds related to corporate taxes. all in estimation, johan, of the corporate tax rate being cut to is, and how beneficial but going to be for u.s. companies. >> question of how these proposals are going to be. is it going to generate that 3% as president trump has promised? could be a surprise, we got a blueprint for taxes overnight. it's higher than what trump proposed before. the question is how business friendly this administration can be. betty: so far, it looks like with the tax bill, quite resinous -- business friendly, to the superrich in the united states. yvonne: hopefully. [laughter] betty: it's all about how this will survive. yvonne: it's true. let's take a look at markets. first, for -- first word news with hell is ahmed. haslinda amin.

this would be a christmas present for america, paul ryan pledged fast action. he said he had ironclad political will. move is cutting the corporate tax rate to 20%, and allowing companies offshore cash. the bank of england raised rates for the first time in a decade. -- by saying ais number increase is not imminent. there was a vote to lift the rate from a quarter of 1% to 1/2 %.that said they will do what is necessary, "the one thing we know is that the situation will change." apple jumped holiday sales forecast, and exceeded most estimates. it's a sign that the company expects robust demand for the new iphone x, it's put -- most

important new product in years. apple says the divide will push overall sales to a record of $87 billion in the final quarter. less inious high was 2016. alibaba powers ahead after adding $250 billion in market value. it's raising its four year outlook, 61% in the three months through september, the fastest pace since lifting in 2014. alibaba is to vesting -- investing in the cloud. they have almost monday percent in the last year. a latest to heed president trump's call to return to the united states. a company is moving its hq back from singapore. this will call -- the company is broadcom. they will have california as a cohead of dutch headquarters.

the president company was formed in 2016. -- the present company was formed in 2016. president trump: my administration is working every day to make the united states the most attractive place in the world, so more and more companies like broadcom come back to our shores, grow their and create more and more american jobs. you see it happening on a daily basis. haslinda: global news 24 hours a day, powered by more than 2700 journalists and analysts in 120 countries. i am haslinda amin, this is bloomberg. thank you. let's look at markets here, with markets open. lonely when it comes to south korea, closed for culture day. we are seeing this mostly higher. >> bank of england. a big surprise -- not a big surprise. it's a little bit of a surprise, given some details.

13054 on sterling right now. 133, that's a drop of 255th to where we are at the moment trade longer-term, a look at the chart. 4782. for the first time in a few months, 100 day moving average, which currently as it one 1383. we will see a convergence, a lot of these key technical levels above these levels. bear with me here well i try to bring that up for you. there's your brexit drop. here is your bullish move up. when he fixes for you guys, give me a second. there is your bullish full -- put up. you put race been in place talked about it, brexit, entirely this year. it's also converging above that level, 48.2%. watch this level very closely.

psychological, 13050. south korea opening up right now. we are about eight points short of the record. we are watching a lot of the apple suppliers. a look at how some of these names are doing, especially samsung. it's a good quarter for apple, for guidance -- the holiday season. we'll talk about that more in the program. we are seeing 14 2000-1 to the downside. off its record high as well. >> especially with apple earnings. that will help samsung as well. no surprises after all. yesterday, president trump is going through jerome powell is the next fed chair. let's get to our global policy

editor joining us live from tokyo. ?hat happens now kathleen: assuming jay powell can make it through his senate confirmation hearing, he will be the 16th chair of the federal reserve. . of course, donald trump given the pomp and circumstance week came to expect after a long, highly public search for someone to replace janet yellen. jay powell talked about the economy. it looks good. more see what he said broadly about this individual. >> inside the federal reserve, we understand monetary policy decisions matter for american families and communities. i strongly share that sense of mission and am committed to having missions about objectivity based on available evidence and a long-standing tradition of monetary policy independence. people sayll, many

he has a lot going for him. his banking background has a lot of expertise. thinking regulation passed the .odge -- dodd frank act one thing that's important about being the chair is that you don't just represent your view of the economy policy. you have to bring the community together. he's a consensus builder who can work well with people. he has gone through two senate confirmations already. both times, republicans with -- against him. it looks like smooth sailing to an estimate conversation. we will see what happens them. >> we will indeed. i will take it up from here. i want to bring in someone who knows a lot about this. going to get to the top level reaction. this is just lockhart. janice, thank you -- janice

lockhart. thank you for joining us. you keep hearing he is not a research economist, he's in the private equity world. you yourself joined the fed after a successful career in course, became a successful fed official. perhaps you could identify this right now. >> i think jay powell is a versatile, a versatile well-equippedo is to do all aspects of the job. monetary policy is what the public sees the most of from a fed chair. there are other aspects as well, including bank supervision and regulation, payments. then, running an institution of roughly 20,000 people. i couldn't be more pleased with

this nomination. jay powell is going to be an outstanding fed chair. >> you work with jay powell -- you worked with jay powell. his cap does janet yellen -- cast as janet yellen 2.0. i wonder if jay powell -- is maybe going to be -- his own kind of fed chair, he's going to look at this question of tight labor markets, inflation, and saying it may be we need to think harder about this. what do you think? >> clearly, he will be his own kind of fed chair. is business background something that recent chairs have not had, at least a direct experience. i'm sure this will have a fair amount of outreach to the business community.

this takes nothing at all away from janet yellen, an effective communicator as well. i think jay will pay some attention to regulatory balance. his are ready said there are some areas were here the federal lessen could actually the burden, particularly the cost of clients. clearly, he will be his own person in the job. it's important to understand, it requires collaboration. it requires listening skills. the federal market committee is very much a committee process. dennis, how is this going to balance with the dynamic of low inflation and asset prices?i sure you see -- i'm sure you

have seen this chart before. conditions continue to loosen. do you think his experience in private equity, when it comes to could het bankers, bring more importance when it comes to financial stability, yek, them yellen -- than llen? >> i think governor -- think governor powell now, with his knowledge of financial markets is going to have some -- he will have natural instinct for when we are in dangerous territory. financial markets become more, perhaps more dangerous. he will be able to talk to getvely with markets how precarious this circumstances might be.

>> am going to look at a chart. so focused on how this question of tight -- how tight labor markets are and how much weaker inflation has gotten, and how the federal reserve, under janet yellen's leadership -- will keep raising rates. let's look at #btv 3140. you can see the headlines, pce, the core pce. this is around 1.3%. if you are jay powell and have a chance to look at things with fresh eyes, is it time for the fed chair, the leader, to maybe everything?n this is an opportunity to jay powell as fed -- the fed ?eadership changes >> i think you're putting your

finger on an important issue that is going to have an influence on the project three policy for the next year or more . that is the performance of the inflation data. very importantly, the interpretation of the inflation numbers, what kind of economy the inflation data suggests we are in. here's the way i think of it. december,w and committee members are going to be following inflation data very closely. to some extent, it will be influenced by inflation performance in the december decision. continues attion 1.5%, about where we are today, and we see no firming on this will take a real introspection.

will how inflation behaves in a modern economy. all, i'mrprise me at out of it now. it wouldn't surprise me that the staff is tasked with putting what we a deep dive on know about inflation. maybe with the idea that there will be some kind of a new synthesis around how inflation really works. inflation and inflation data are very much in the minds of the policymakers. at the same time, i think jay powell and the moc for the most part would like to continue with the removal of stimulus and monetary accommodations. >> in person we forget is janet yellen, who is not going to be continuing her term. this questions about whether she will remain on the board.

she's got six more years on her term. what do you think happens? >> it's hard for me to guess what is and janet yellen's mind. i suppose, probably the most likely scenario is that she will up a and probably take role in the academic world and think tank world along with -- or something along those lines. but, you are correct. she has the prerogative of staying as a governor. her term last for quite some time. it's an option she has. i have no inside at all how she's thinking about this. >> dennis, do you have a pic on who could be a potential vice ?hair one of the vice chairs has been nominated, randy quarles, the vice chair for supervision.

that leads to one more vice chair position open. assume that the trump administration will make that nomination. they have quite a number of seats they can fill in the board of governors. >> john taylor. >> it's likely to follow the of perhaps a confirmation of jay powell. in due course, they probably are going to get on with the nomination for the vice chair position and other go -- open governor seats. >> i wanted to ask you about something that i think may come up in the senate banking confirmation hearing for jay powell. it may be over his head. he may have prove his independence. trump -- since president trump made publicized decision-making process, is he going to have to show extra independence to show

the world that he is independent as a republican, of a republican president. do think there's something in the banking committee, particularly democrats are going to ask them about? >> i point out that ben bernanke was a republican when he came .nto office in 2006 he took action during the financial crisis and recession, and got quite a bit of criticism from the republican side. happens, i believe, is when you get into the central bank, and are imbued with the bedrock principle of independence of a central bank and formulating monetary policy. this is at arm's length from political pressure, particularly in the short-term. strikesf your political -- stripes, he tended to take on

that view. i have no question that jay himself, andonduct the fed will conduct himself -- themselves quite independent of the administration. maybe because he is a republican, he's going to have to somehow emphasize that, but the decisions that are made of the important decisions are really committee decisions, or governors decisions. a single person, somehowugh chair, to show independence, at least in decision-making. >> dennis, we are going to leave it there. thank you. ofcom -- of course, we thank kathleen hays out of tokyo. up next, we continue our analysis on what kind of leader

he would be. michael kelly joins the conversation with the markets view. oilater this hour, with hovering around $60, does that mean opec strategy has worked? will have sg -- this is bloomberg. ♪

♪ this is "bloomberg daybreak: asia". , i'm yvonne man. had its of england first rate rise more than 10 years after someone -- after the new fed chair appointee was nominated. team is left managing more than $15 billion, our guest joins us here. michael, good to see you. tell me more about what we just heard from the atlanta fed president, dennis lockhart, talking about how jay powell

will be -- not so much a leader, janice 2.0. that's a best case scenario, you think, for markets? >> markets, they have never experienced this, where they have to withdraw prices based monetary policy. the last thing anyone wants is an independent thinker to go off in a different direction and surprise people. having people describe this continuity -- the first that has ever been a non-economist -- people say volcker didn't have a phd, but he was a powerhouse economist. non-economistrst ever. it's not continuity. he is a consensus builder. he is not going to surprise the markets. a think he will be very timid removing this crisis based monetary policy from the markets perspective. that's a great thing. >> especially for the bond market. during his comments at the rose garden, he didn't mention

anything about inflation. it's about banking, unemployment so to speak. it's putting less weight than what we hear from janet yellen usually. what do think that means, when he takes this helmet at the fed what can -- this helm at the fed? >> the charter is price stability at one -- full employment. it's not 2% as measured by the pce index. economists can get religious about this, but if you look at the gdp deflator, it is 2%. whoever declared, anointed, that has to be exactly 2 -- that will take a less religious perspective, and the more common sense perspective. has been belowr 2%, 80% of the time in the last 20 years. this is a disaster if it -- hass 1.8% like it had

for the last 20 years. we will have to look at broader issues, such as deregulation, and the full gamut of issues. i think criticism of fed chairs, and we had a spring of terrific ones -- they are too focused on the economy only, and not the regulatory apparatus. as you rightly point complacentwe are too -- carrying being on janet yellen's policy, or a policy in the way we believe. given that, what are you doing with your investment exactly? have you changed any strategy given the new fed chair? >> well, the new fed chair supports our policy. we are not changing it because of that. the major change is that after a classic post-crisis private

sector deleveraging, during which growth was slow, string of years, nine years -- private sector do it teach -- deleveraging began to wear off. this cannot back up very fast. the central banks aren't the only reason why that's the case. the bigger reason was we have been to be of the savings club. that is the result of the private sector deleveraging. it's going to take a long time to clear. when cash flows are faster than rates, that's a very bullish backdrop. there's nothing in this appointment that would upset that. >> michael, thank you so much. global head of multi-assets. much more ahead, and closer -- including a closer look at alibaba. raising the outlook for full year revenue growth.

we will look at what is driving their success. this is bloomberg. ♪

♪ yvonne: full right now in australia. yvonne:the fed bank -- up half a percent right now. breaking news out on the straily retail sales. unchanged right now. that is lower than what economists want for 0.1%. also the third quarter excluding this -- retail sales just marginally higher than an expectation.

that month of pointing, we had two months of decline in retail sales. this is a signal for the important part of the australian economy. weak, givell quite on. yvonne: we are pretty much flat. let's look at the market reaction. the aussie move -- >> not liking that one. [laughter] 76-89. where does this take us, to for ? longer-term view -- for a longer-term view?

in australia, we only have three markets opened up right now. it's really about ehb. here's a snapshot up and down, unchanged. with -- 151 out of the 200, 44 down. that's chp right there, third straight day we are getting -- php up well over 1% gains. the cross sector groups, every single one here. this comes down to heavily weighted stocks -- there you go, down 6/10 1%. this.lluded to australia is the only more pronounced, in terms of movement. across these markets, if you took a snapshot five minutes back from australia, it was about the dollar being offered up a little bit. that's the gains you are seeing.

you're getting this on the aussie dollar. that being said, the shift is around. you are reading about how uneventful it is. roughly ato trading the same level 2-3 hours back. the same -- big move, left side of the screen right there, right side as well. yields, a lotat of this comes back to the back -- fact that this is fairly dovish. next three years come a hikes essentially is what he is saying. in 30rket following minutes. your 27 year high. a lot of the push in this market will depend on how the apple supplies react to the latest earnings report. year, 27 yearatch high roughly, give or take. betty.

>> thank you so much for a look at the market. >> let's get a look at the news let's get a look at the market with haslinda amin. haslinda: there was ironclad political will kerley to leave out certain parts of the tax code from paul ryan. this includes cutting the tax of 20%om 12%, and a levy of companies offshore cash. jerome powell is to be the next fed chairman, pledging to pursue , especiallyals maximum employment. pal has been the fed governor since 2012, and is seen by many as a candidate for continuing. he favors only gradual rate -- rate hike. >> inside the federal reserve,

we understand monetary policy decisions matter for american families and communities. i strongly share that sense of mission and am committed to having missions about objectivity based on available evidence and a long-standing tradition of monetary policy independence. ♪ >> think we lost the sound with amin, she was reading our first word news. we will try to get her back. in the meantime, let's talk about alibaba, cap 200 $50 million stock rally this year, $250the sale growth -- million. they're beating their projections. could this be starting to peak? uber you need to know come with

ramy inocencio. that it's very unlikely they could have been this. let me walk you through the numbers. g #btv 4742. this is the growth you were talking about, betty, up 67 -- up 60% over the year. and of 2013 to the start of 2014, that's when alibaba first ipo would. look at the white line, which is sort of going the other way. started around 75%, down to 60%. what is this? this is the gross margin. over thebeen falling past 3-4 years or so. this is of small concern relative to other companies they were talking about. apple's gross margin has come in at 37%. 60% relevant to 37% is still something you would probably

want to over apple. next one is g #btv 64 -- 469 eight. the orange bars are the annual active accounts for alibaba in the past quarter. -- for alibaba. in the quarter, -- last quarter, they rose. you consider share price up by 110% year to date. this is the annual users. looking at the monthly active users as well -- the rose to 549 million. more numbers to the positive for alibaba. the third try to want to show you, this is the financial analysis, the fa function. you are looking at a revenue for cloud computing, one of the biggest sources of growth for alibaba, rising 99%, basically doubling year on year. it was just about one point 5

billion u.s.. the core e-commerce that was growing 63% -- you can see it's definitely going back gang busters. let's take a look at the share performance. #btv 4512. this is up by more than 110% year to date. the for fang stocks are at the bottom here. the blue line is google, the aliveness facebook. look at that, even another chinese tech, rue voting on november 14 -- reporting on november 14. your today performance of 90 for -- 95%. you still had -- gains here a few words with alibaba. >> certainly paying off. ramy, thank you. china -- become -- chinese company have to -- having to pay

top dollar, pushing ahead with a record bond sale overshadowed by government scrutiny. our reporter has the story for us. just 300 -- 300 -- this bond price techt 8.875% there. what is the showing us? they continue the strain. >> the company is under a lot of pressure. there's $28 billion of debt coming in the next eight months. this new debt is $300 million. it's not much, and it's priced , which is the highest chinese company has paid on its short-term dollar debt. a toll on page and a jury the company doesn't have much room for error these days. really, stretching itself very

thin here. >> this is the same story we see with companies getting more pressure here. >> there's some kind of demand here. we don't know if that is fixed for the deal. later on, the company might reveal who are the instors in the deal. as far as i'm reporting yesterday, investors were split into two groups. one group is saying -- i'm not going to touch it. .t's a high headline risk maybe tomorrow, the bond will dropped 10 points. who knows. on the other side, the other cap is saying wow, juicy yield, close to my percent. where can you find such high-yielding debt with such short tanner in this dollar market? >> what about dealmaking?

talk to us more about the dealmaking going on after this government crackdown by china. >> ins to be deal specific in the uk. it seems that things are improving. the government has given the greenlight for agent-based takeover of the company that manages deutsche bank shares. hna has a 9% stake in deutsche bank, its largest shareholder. -- this takeover board is also asking low questions. there's also some interesting developments in spain. this is a spanish hotel chain.

a 10 day has no control of this company, while having a 30% stake. so much on a 10 day -- up next, the republican tax lan looks decidedly fossil fuel friendly. we are going task what all this could mean for energy companies in the energy market. this is bloomberg. ♪

♪ yvonne: th is "daybreak: asia" , i'm yvonne man in hong kong. betty: and betty liu in new york. oil has -- futures closing at thanighest levels in more two years, as opec members have an extension of the production

curb. -- of this is ms. rockey sge. thank you so much for joining us. cut,e we get to the opec there's news today of a tax bill. there's a pretty friendly policy, tax policy for oil companies. off allows them to write expenses of their equipment. seen.s energy we've do think there will be markets for oil companies? >> i don't think it will be a big boost. under the obama administration, it was all tax trivia and help.

these opecalk about cuts. to think there will be beyond march of 2018? >> i think it's a done deal. the only issue to be discussed more be this extended for six months or nine months. markets are already really pricing the same. wisner this timeframe --why is there this timeframe? >> opec has framed itself to have a five-year average. beyond extends this march to some time by the next summer, there could be a

five-year average. >> what does that mean for u.s. cruise -- crews? we have seen oil production ramp up now. there's a lot of people in the markets saying it's unlikely we are going to see this ramp up more in 2018 then we did. it exceeds 1.1 million barrels a day, it will be hard to make -- break. >> think that the critical number, we all talk about oil prices. in the u.s., it doesn't matter. wti, about 54, reaching almost 55. level,u are at that everybody will hedge one year forward. you will have this so-called drill.

i think the impact while maybe not be as great as it was in previous years. there will be an impact. if the price of what -- is going up, the president gauck. -- the price might be going up. >> is there demand growth as well? >> demand growth is great, as well -- if prices are $60 a barrel. , we have higher prices lowered on demand growth for 1.5-1.6, around 1.4. the impact of the higher prices would be lower demand. >> is your formal role to the -- what are the

conversations you are hearing from officials in particular, about the affect this could have on the oil market ? >> actually, this is a very interesting story. president trump promised something. he made an announcement, but this was next to zero. i don't think there was an attempt to deal with this -- with these international deals and iran. european, asians, you want to make money, go ahead. no dangery, there is to the oil production and iran, or investment in around. we expect more investment in europe and asia to go to iran and, for oil production to continue. >> great to have you.

-- we have to leave it there. this joins us -- he joins us live from singapore. of can get your edition "daybreak: asia" for bloomberg's of court -- subscribers, available on your mobile oil -- mobile and bloomberg anywhere app. check it out at jb go -- dayb . this is bloomberg. ♪

♪ is "daybreak: asia". yvonne: goldman sachs ceo says that jay powell is a credible fed candidate. this move could be care -- ve onthe refully integrated monetary policy. >> the federal reserve has to, .gain, extract us i think -- i don't think that's going to occur, i don't think that it's that dangerous. with rates writing, for a long time, interest rates are low. that hasn't been of noxious to the economy. inflation has been low. around thehat money world will not be a free good,

and it will be properly allocated -- i'm sorry, properly priced. occurring, we have to remove that extra stimulus, reduce a balance sheet, raise rates, and the big test will be to do that in a way that doesn't shock us into a bad position. this is a little bit like moving an unstable, dangerous chemical, and we want to treat it very carefully. everybody knows it has to be done. everybody's doing transparency again, as part of the implication remedy to make sure everybody knows what's happening. it's predicted that there's no sudden quick, jerking move -- this could take a touch to do this, all the while bracing for the fact there may not be doubles in new places -- maybe this is gone places that it shouldn't have.

>> there's places that this could go -- monetary policy, president and a republican portion of congress seems really bent on increasing fiscal stimulus. details just today, the of this tax plan. what does a good tax reform package look like, and what is a bad one look like? >> i haven't seen, involved in this conference, it's been out. i know there's leaders, which i think is a little bit, i can't see that this is a moment when you want the most fiscal stimulus and the market. the president thinks the economy could grow really fast, and the economy can go faster. out therethings competing the growth of this, so maybe they could get higher than 3%. >> that was goldman sachs ceo --

speaking exclusively to bloomberg's david westin. speaking of goldman sachs, headlines coming across, singapore police are said to be examining goldman sachs'role on this scandal. interviews are part of singapore criminal probe -- the singapore criminal probe. this current employee is said to be interviewed. this is a year-long scandal that has been wrapped up. this includes the goldman sachs --. this continues to be, and of course -- this continues to be a widening scandal, that has wanted -- and goldman has wanted to distance himself. >> it's interesting, the investigator meetings with

current and former goldman sachs employees, they didn't stress the bank itself is not the focus of the investigation. certainly, this raises questions about the dealing of singapore, as well as the u.s.. also, a willingness for the u.s. side of things as well. a lot of questions about the justice department and new york's banking regulators. the investigation didn't result in charges, though it does draw scrutiny when it comes to u.s. authorities. on for somen going time now, a couple of years. since 2015. also, if anna, another piece of news that happened a while ago that caught our eye was donald trump's twitter page. this seemed tod go off-line for a moment, lots of jokes about whether this might be russian hackers or not. twitter coming out saying it was restored, and it was because of human error.

yeah. human error. twitter ran all over on this one, saying, 11 minutes of bliss. [laughter] coming up with markets as well. >> bank of america, merrill looking at monetary policy. also, he's making a trip to asia. rate, and alex cap weston not least, talking to a ceo about the future of his hotel group, and the hostile industry in this part of the world. ♪

♪ 9:00 a.m. in hong kong. i am haidi lun in sydney. this is "bloomberg markets: asia." ♪ rishaad: jerome powell committing to stable prices and keeping a close eye on financial sector risks. haidi: