betty: welcome to "daybreak: asia". cleveland's investor says to be in the running for vice chair. betty: and from bloomberg headquarters, this past 6 p.m. on tuesday. wall street rose for a third day, and the stronger yen weighing. a costsident trump

american jobs. ♪ kathleen: breaking news on south korea's labor market, we have the unemployment rate now at 3.6% over last year, it was bute point six in december, that is what we are getting so far on this number. number on thetant context of the korean economy, it is an area where that has been strength, and exports very strong. this closelytching to see how this affects the bank of korea in the next meeting. holdingemployment rate steady at 3.6%. and life pictures, let's

take a listen. >> it is great to be here, it was eight years ago i just turned 80. i never really talked to any graduation groups or anything of the sort it was not on bucket list particularly. and then i got invited to go to -- and i met a truly , whether it was male, female, hispanic, african-american, whether it might be, these people have one thing in common. they knew they had it within themselves, they knew they could be something beyond they were.

they were willing to put their time and energies to better when i saw at the graduation on december 22, they had parents crying as they received -- their children spouses,their degrees, siblings, who is a great response of my life, and at that moment, i was hooked. i met the most remarkable group of people, and if he told me that 22 or 2300 out of those people would be here eight years later, having proven yourself what you really could do with more skills -- it is remarkable. i would like to tell you a couple of short stories, and

maybe we'll learn a couple of lessons from them. as i came in, mike bloomberg was talking and he talked about immigrants, and i echo his remarks. i would like to tell you of two each sold the business to berkshire hathaway to me, or many millions of dollars. $2500, them started with and by coincidence it was the same amount, it was everything they had in the world. one of them was a woman who 1917, couldattle in speak the word of english, had a tag around her neck, the tag fort dodge, iowa, the red cross got her to fort dodge

where she was reunited with her husband who was in the country years earlier, and she lived in fort dodge for two years, and then she felt like a dummy. she couldn't pick up the language and can learn a word, so she decided, she and her husband decided to move to omaha. 1919ey came to omaha in and there she found a small colony of russian jews and she felt that home. as her oldest daughter went to home,, she would come this daughter, frances, and she would teach her mother the words she would learn at school that day. years savingent 20 money, bringing her siblings she, her mother and father, sold used clothing to do it.

during four children this time, and by 1937, after 20 years, she said $2500. she went to chicago and she store.-- a furniture would never go to school with $2500, but with the same spirit of the people of the room had, of having a dream and working to a college that dream, she built a business, which she 1983 for $60 million approximately, which did a billion and a half dollars worth of business last year. [applause] the fourth generation is working in that business, and this woman -- she worked for me

until she was 103, and then she retired and died the next year, which is a lesson to all of berkshire managers. [laughter] warren: premature retirement, you know what is going to happen. one further fact about her, she could not read or write, and she went into a furniture business and she didn't think anything unique and furniture, and she brought a determination to succeed. she knew she could outwork anyone else. she knew that she could care about her customers. she worked low margins, but she felt an incredible business, and i saw one other woman who did a similar thing with $2500, and i paid her hundreds of millions of dollars for her business, so i decided to go to the source and get these people before. [laughter]

i don't what you guys coming to me -- so i followed this group. , today i would like to tell you about one other small businessperson. to buy his i want business from him, and he turned me down, which is very wise. this was a fellow board eight years before i was. in 1922.rn -- we will call him jack, lived in the midwest. he was a pretty good athlete, didn't like school much, and i will tell you one thing early in the story and maybe you can figure out who the guy was. the company he built hires more college graduates each year than

any other company in the united states. was destined for this but did not know it, jack, went to college for a year, and then dropped out. he wasn't interested in school. 1941,e dropped out was when the united states became under attack, he went down to the army air force according station and volunteered. they turned him down because he had hayfever. ande went over to the navy, again volunteered and they took him. they put him on an aircraft flew small fighter planes during world war ii and got two distinguished crosses

from the navy. and then he came back to the midwest, so now we have got a young guy, probably at this time he would be 23 or 24 years old. the interesting thing is, he got back to the midwest and he actually went from one job to another for a short period of time, and he finally became a used car salesman at the cadillac dealership in st. louis, missouri. and at 35, having moved up in hisorganization, he said to boss, can i go into car leasing business with you? the boss that it would cut your -- we can become partners in the car leasing company.

started atd jack, age 35 and the car leasing business. and yet seven cars. it was pretty slow. one of the things he did was whenever the phone rang, he let it ring three or four times so people would think he was very busy answering other phones. [laughter] warren: so his first venture was ok, but it wasn't going to go anyplace, and there's a lesson us.all of at age 40, he decided with 17 vehicles, he was us. going to go into competition and the rent a car business. so now he was taking on hurts hurtz,is and national -- avis, and national.

he has 17 cars and his cars are not different, and it's used by them from general motors or chrysler, and he can't get the locations, those companies have them all sold up, but he is determined that he would basically offer the customer a different car, but he frilly or service that they have seen, so he started the company. battleship after the that he had flown from in the pacific, which was the uss enterprise. he died a year and a half ago, but when he died, his rent a car company, starting with those 17 hertz,as worth more than avis, and all the rest of the

other rental car companies put together. [applause] the man's name was jack taylor, and his son andy taylor is a great friend of mine. a grandchild is in the business and there will be a fourth generation in line, so this man, in the united states, he didn't invent artificial intelligence. -- justt do anything furniture,, selling he lived by the creed of basically the lighting his delighting his customers and establishing relationships with them so in they would like to customer, and he learned how to and his attitude

towards his fellow man and his desire to make a friend out of every customer. he managed to take ordinary cars and turn them into this extraordinary business from virtually nothing. it illustrates several points. one is, you don't necessarily get it right the first time. the car leasing business basically you are competing on the cost of money to finance cars. it is very hard to delight a customer when you give them the send us a monthly check for five years and you will be back at the time. his towns were being wasted in that business, but at the age of 40, with all that experience behind him, he found the golden key, and he took a very ordinary

business and turned it into an absolutely extraordinary operation. b, roasted with did with -- rose furniture. he didn't worry about the federal reserve. he didn't worry about the stock market. he didn't worry about the things he couldn't change. on the one thing he could change -- and that was the customer's experience. the one that got away, enterprise. i went to florida and try to talk him to sell to berkshire, and he was smart enough not to do it. the value of the company has quadrupled since i made that

visit, but he was smart enough to see that he would find that business. failed twice before starting to fort company in 1903. the test is it whether you get the greatest business idea in the world the first time out, the test is whether you keep learning as you go along. what your struts are and what you can do for your customers. what you can ring to the party. need the that, you education that i know you have received through 10,000 small businesses. desire, theynuine end day out -- day in and day customer.light the

i have never seen one that likes the customer -- we want is the customer the next day, do i want to rent a car, or by furniture, what goes through their mind. it is whether they had a great experience. i don't know what i paid for this time, probably someone give it to me for the purposes of the speech. [laughter] idea -- or theno shirt, but i will remember how i was treated when i bought it. you long forget about the price, you never forget whether you had a good experience or a poor experience with the purchasing experience. [applause] you will have a hard time finding a person wes had a

wonderful experience in the light of experience in purchasing anything that is it going to come back. if the memory is of rudeness, indifference, what ever it might be, they are never going to come back. as a small business owner, as can not onlyt project the interest in people's well-being and delight them yourself, but you have to do it through other people. you want be able to do it through people who themselves do not feel they are being fairly areted, that their views appropriately considered. you really do need to learn to multiply yourself through other people.

advise the young people -- the certainly, in terms of your personal life, the most important decision you may make is the spouse that most of you will likely have, and it is important to surround yourself with people who are better than you are. you are going to move in the direction of the people you associate with. [applause] i have been enormously lucky in that respect. i have teachers and friends and a spouse that really is a better person than i was, and had enough sense to learn from these people that life went better if

you behave better yourself. it took a while. [laughter] outen: i advise you to seek as your partner in business, your partner in life, whatever it may be, look for people who actually are examples to you, our than somebody you think you need to straighten out yourself. simple rules like that, delighting customers -- associating with people that will cause you to move in a better path than you might otherwise have, will take you so far in life, it is hard to believe. totook rose without having be able to speak a word of english, couldn't read or write, and it took her to a billion and

a half dollar business. [applause] i think if you look at enterprise, my guess is that very little equity capital has been added to enterprise over the years. the business built on itself. i want to tell you that i admire this group enormously. class eighthis years ago, i was thrilled. doingre people that are what you have done. you are working hard at your job, and at the same time, he -- a lot ofdded hard work to further your skills

99% graduate. that is a mind blowing statistic. [applause] i am looking at 2200 people here i admire, amateur and for you, and i can tell you, the best is yet to come. thank you. [applause] yvonne: there you have it, berkshire hathaway ceo warren buffett speaking to the 10,000 small business summit in washington. simple wisdom we heard from buffett on how to really cater to the customer. how to actually grow and with someourself smart people in your life and do it to the people -- certainly nice words here as we look ahead to the markets today. theleen: if you ever read

car from enterprise, at the say, it is true, they have excellent customer service. consumer, we and go with so many businesses and all we see is that point of contact and will know the whole history and story and it was charming the way warren buffett brought that out. when you think about how you invest, elects to know companies and you get a sense of the attention to the human element as well. yvonne: and he likes to keep it small even with his own likes to keep it small even with his own headquarters. a lot of sound advice from wordperfect, also talk about buffet.ce -- warren off we are looking at a mix in asia dollarow, the kiwi headed back to the doldrums, and trading in australia is a couple of minutes now, and in sydney where seeing shares up a fifth of 1%.

we are seeing bob catching up ahead of that cpi data as the u.s. 10 year yield ticks lower. japan, quickly the focus, volatility in for force. at sevenhe nikkei tents of 1%, and the yen the strongest in more than a year all ahead of that fourth-quarter gdp report. kathleen: u.s. stocks is where we are headed now. treasuries rose as investors look ahead to wednesday's inflation report, which has taken on heightened importance. jack, it is the third day of gains for u.s. stocks and is the biggest string since mid-january, and it is only february 13 heading to 14, and we had a lot of down, but, you

have been watching these markets for many years. how does it feel? is this it? it is hard to say, kathleen. i will say of the different types of downturns that i have experienced, this one is probably the most mild. i called a technical downturn. i would call it a correction. what i mean is that it is a realignment of valuations of the stock market to the fundamentals like earnings and dividends. when of the things i took comfort in as we were whirling around a thousand points here and there -- credit conditions, the availability of credit and the willingness of lenders to extend credit to lower quality borrowers was under wavered. -- was under wavered.

nothing in fundamentals changed her, it was simply evaluation correction. to that point, have taken a market that is 15 to 18% overvalued and knocked down 25% overvalued, so with a little squinting, we can't say we're at neutral now. yvonne: in terms of the bond market, are we going to get to 3% on the 10-year note? >> if you look at historical relationships, the 10 year treasury tends to attract nominal gdp, and right now nominal gdp is at 4%. get to 4% real soon, i don't know. a lot of it depends on central bank policies. there has been this tug-of-war

between stocks and bonds, is 6009, and i still think at ait is still somewhat disadvantage with all the bond buying going on at european central bank, active japan, and some reinvestment scored on at the fed. it all depends on how fed policy plays out. if they were to stop by tomorrow, i would say the 10 year goes to 4%. yvonne: we ignore the inflation data that comes out on wednesday? what happens if cpi does it deliver? i think we're going to see a rally if cpi doesn't deliver. everyone is set up for pessimism on the inflation front and i will say that we have grown our economy now to the last two or three quarters above potential gdp. ae fact is when you throw

trillion and a half dollars on stimulus on top of unprecedented monetary policy, your economy is going to grow faster than a potential gdp, so we have essentially, in my view, taken a 2% and beat it to a 3% racehorse. i don't think that is sustainable, and if we keep doing that, who will run out of capacity and we are going to ce their wages go up or prices of other goods go up as we run out of the city there. a lot of it depends on how the fed offsets. remarkably we haven't heard ap at of chairman powell, and as a wildcard to. yvonne: he is keeping his mouth pretty shut right now. correlations -- in the last year, we saw this collapse in correlation, stocks and bonds going up in price, and what we are now seeing is old-fashioned risk off trades that aren't

materializing right now. now we see the correction and shock, do you think things reset or is this a sign of a change in time? >> i think there is a shift going on. we have enjoyed, throughout my career, we have enjoyed this normal hell went of lower interest rates year-to-year. a number starting as a bond and it was at four and a half percent for goodness sakes. glad than one trait and how that for 10 years, i would have been better off, but, that said, i do think that there will be a reversal. i've expect there will be runaway inflation. i think it is a central banks year late on40 inflation, so i'm not worried on that, a lot depends on ongoing other economic development. people are saying the

cpi number tomorrow, which is at the most important number for the fed, can come on the light side and there was a story on bloomberg about a small trade that really caught the bond markets eye, kathleen: if bombs rally, could stocks get another leg up? >> absolutely. the lower bond yields are below fair value, the bigger the equities can command. for the last several years, equities are the only child of the family. ofy children get a lot attention, spoiled, and they get the premium back. i would draw the line at 4%. the closer we go to 4% on the the less equities will command. if bonds go the other way, the

premium could come back. yvonne: always appreciate the time. president. a big band and so when it comes to the data front as well. japan posting its preliminary gdp data of the fourth quarter. that will be happening in 20 minutes time from here. gdp up is the singapore which comes out at 8:00 p.m. at the top of the hour. 12:00 p.m., malaysia releasing its growth figures. the bank of thailand announced its rate decision at 1.5%. a pretty jampacked day when it comes to the eager data just a day before the great migration for chinese new year. that is what we are looking ahead to. first word news with jessica summers in new york. jessica: thanks. president trump has been challenged by republican lawmakers over potential tariffs on imports. during a meeting at the white house, they said such a move

would raise prices and probably cost u.s. jobs in related industries such as car manufacturing. reporters were allowed to watch for nearly one hour during which several republicans openly tradenged the president's positions. meanwhile, jay powell has been sworn in as the new fed chief. he indicated the timeline for drives all rate rise -- gradual rate rises remains unchanged. he is gradually normalizing the balance sheet. he mentioned last week's selloff. they played down the impact on the economy and financial system. is cleveland fed president said to be under consideration for vice chair of the central bank under jay powell. sources say he impressed the white house, but there is currently no front-runner. the fed had no deputy since stanley fischer stepped down. john williams and allianz advisor are in the mix.

u.s. forces in syria are said to scores of russian mercenaries in the deadliest clash since the cold war. three russians say 200 contract folders fighting for syrian president al-assad died in a a joint u.s. in credit space. the russian military said it had nothing to do with the attack, and the pentagon except that. the israeli prime minister, benjamin netanyahu, faces the biggest task of his political light. -- life. evidencethere is netanyahu traded influencer favors. the prime minister denies any wrongdoing and claims he is a victim of a left-wing witchhunt. it would be the first time a sitting israeli leader is charged. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg.

yvonne: paypal has been pushing to make its service a versatile financial tool rather than a payment button on website. is strong. paypal's latest forecast fell short of estimates. joining us from the conference in san francisco is paypal's coo, bill ready. thanks so much for joining us. incredible strength here. a lot of questions from investors still is how is paypal going to fill that hole that ebay has created? we have seen the stock down 10% since your announcement. what is your response? things that has been widely misunderstood is that we are actually renewing our relationship with ebay for of paypal branded portion purchases on ebay, the vast majority of the volume we handle for ebay today. we have extended that another ave years, so we have had

long history with ebay and we will continue to have a great partnership with ebay. when we spun out of ebay, the premise was not just about how ebay, but also how we can serve the rest of the market. one of the things you have seen is that we have been able to more completely serve the rest of our market. we grew year on year much faster than e-commerce overall. we are taking share tremendously in e-commerce overall as we are able to more completely serve the rest of the market. we feel great about that and how we are extending our relationship with ebay. isnne: the question is, there a risk that some of the other partners the work with are going to kind of follow ebay and say "i want more payment options. i want to bring in revenue. i want to lower costs." with thisaypal deal potential trend where some of the use merchants are going in-house now? bill: this is actually how we

service most merchants today. this is something people have misunderstood. ebay was quite unique joint we were still performing a lot of the services of a retailer for ebay. we don't service any of our other customers that way. we service other customers to fully equipped them. 20 plus major partnerships. facebook, google, apple, alibaba, baidu. any others are coming to paypal is ase our digital wallet must-have in the global world. our conversion rate tends to be twice as high as our nearest competitor and much higher than a cart online. that is white we are seeing consumer growth accelerating, merchant growth accelerating, much fasterng overall, because our one touch buying experience is 80 million more thanmers and double what it was a year ago. it is becoming the way consumers want to buy everywhere. a great tailwind for our

business overall and a great reason we are striking partnerships with most of our fastest-growing partnerships in the world and fastest-growing retailers in e-commerce companies in the world. yvonne: it is a great story and a great message, but it seems investors are not fully aware of it. what about your brand? what about marketing? what do you most need to put your efforts to make sure the world sees exactly what you're talking about? you look at our objective results, the world is seeing that. we have a fantastic q4, a fantastic year. 60%consumer growth was up year on year from what it has been the prior year. an increasing number of consumers and engagement is increasing. we are getting more consumers signing up for paypal. those consumers have deeper and deeper relationships with paypal then they have ever had before. on the mobile device where the consumer is spending the rest

majority of their time, the paypal buying experiences are far superior to typing in a card online or the other competition that has been out there. that has been a great accelerant to our business and a place we are performing very well. kathleen: break that down for us. is this a global story? do you have parts of the world you want to grow more? there is a lot of competition in china, the rest of the world. tell us again. break it down. bill: we are in 200 plus markets around the world. one of the things you see is that major partners are looking for access to the customers we have around the world. alibaba, that we are working with, we are allowing them to go . our consumers in 200 plus markets around the world think outsidew they sell more

of china. we are hoping to connect with pluss in our 200 consumers around the world. we announced the partnership of baidu where we are helping them get consumers in china to the 18 million plus merchants we have elsewhere in the world. this is very much a global phenomenon and something where we see our business accelerating globally. more than half of our business outside of the u.s.. a globalto mobile is phenomenon. our strength is making us an attractive partner to not only the biggest tech platforms in the world as we connect buyers and sellers in 200 plus markets all over the globe. kathleen: we have seen just how big these wechat pay's are in china. they are try to translate that into beyond the country, of course. you said there is synergy between paypal and some of these payment platforms in the country? bill: we are working with, you

know, alibaba, to help them connect with buyers elsewhere in the world. we are working with baidu to connect them with merchants elsewhere in the world. waysbility to find unique to partner with other major tech companies has become quite prolific. the reason for that is we are very unique. we are the only place in the arld that you can find network of 200 million plus consumers, 18 million plus merchants, and the ability to control the buying experience and do that globally. some places can do that in a region and do parts of that, but not all of it. to do all of that together, the able to do that in 200 markets around the world, we are unique. that creates overlaps between us and other companies. we can workes together. we are finding the ability to do that with partnerships i was discussing. >> that has long been touted as a replacement for paypal crypto.

a this an existential rented company or do you see some opportunity there, too. ? bill: we have been working with crypto since the early days. we stay there close to it. the really interesting thing that i think about with crypto is much of the activities have been around the currency side of it versus the technology side of it in the blockchain. there is a lot of speculation and things like that happening with the currency, which has made it not very viable for commerce, there is very little commerce happening on bitcoin. you can see that. volatilityt is the in the currency, but the other part of it is if you look at what is unique about blockchain in particular, it solves this notion of distributed trust. i think people have been trying to take this great technology that solves the unique problem and apply it to places where there is well functioning brokerages of trust.

it does not perform as well. you will see more breakthrough when people apply blockchain to things that can really only be solved with distributed trust. it's not a replacement for a well functioning central brokerage that would exist today. new things that might not have been possible previously. it's very early days. anchor: bill ready, thanks so much for joining us. paypal coo. i'm next, president trump repeats his pledge to step up taxes on imports, but the white house says there is no plan in the works to make it happen. very interesting story. a lot of back and forth here. keep it right here. this is bloomberg. ♪

kathleen: this is "daybreak asia." i am kathleen hays in new york. yvonne: i am yvonne man in hong kong. president trump has doubled down on a reciprocal tax on imports.

there is no formal plan in the works for such a levy. let's get more from our editor in washington. here? president serious it seems the senior officials are trying to play it down at the moment. >> he seems to be serious. he brought it up yesterday. the official said we don't have any such plan. he brought it up again today in a meeting with members of congress from both parties talking about trade and talking about his investigation into whether china and other countries are illegally dumping steel and aluminum in the united states. he got a lot of pushback on both of those things from some of his fellow pogroms -- his fellow republicans on taking such a step. yvonne: that is the reaction from republicans. what is going to be the overall reaction from congress if he actually follows through with such a plan? >> the president has got pretty wide latitude on this. .his is a foreign affairs issue

but he would find himself i think without a lot of political support for doing that, and that does matter still. he has got other things he wants to do in congress, and there are .eople in congress here a number of them particularly among the republicans are basically for free trade with some restrictions. interestingly, he got some support from the democrats. some of the democrats who were in the room who are arguing for more penalties. notes of was a lot of caution from senior republicans such as porter from ohio, a few others who said to look. this is a big step and you have to worry about what comes after. yvonne: people are worried about what it means to the auto industry and all kinds of things, so it's understandable why in certain regions this is all the more important. can we move on to the infrastructure plan? donald trump says he is serious

about doing it. is there any way he could get a bipartisan plan through congress? because who doesn't want more infrastructure spending in their district? >> there probably is a bipartisan plan that could go through congress's. it's unclear that this is it. what he presented was panned by democrats who want more direct investment in infrastructure. republicans have given it somewhat of a lukewarm reception. nobody has spoken against it. there are a lot of statements along the lines of "things for proposing this -- thank for proposing this. we will take a look." there has not been a big groundswell that this particular plan to try to leverage state funding and private funding is going to make it through congress. they are looking for some ways to sustain the highway trust fund, which is going to run out think, probably within five years. of the other stakeholders

also want to do similar things, but it is not clear that this is going to have enough money, direct investment by the federal government, to get a lot of support. >> thank you so much for joining us and sharing your insights on all of this. he is bloomberg on this editor. moving onto another important story, cleveland fed president loretta mester is is said to be among the contenders for fed rice chair. hours afteroke just jerome powell was sworn in as head of the central bank. joining us from atlanta is the reporter and said watch extraordinaire -- fed watch extraordinaire, matthews. there are a lot of names out there. while a meta-master, do you think? what would loretto -- what would you bring to the table? >> loretta mester is really the intellectual leader of kind of the moderately hawkish wing of the fed president.

was for a number of years, a research director, as you pointed out, of the philadelphia plosser, whoarles is very much a hawk. she was promoted to be head of the cleveland fed. as head, she has been an expert and intellectual leader on monetary policy. given you have jay powell as chairman of the fed, and he does not have a monetary policy background, you need to have a vice chairman who is really an expert. she would bring that gravitas and knowledge of being able to go through equations if she needed to with the staff, and you can be bowled over by the staff, and she would be somebody who would be able to bring, you know, wait to discussions. >> you know, it's interesting when you compare and contrast are with jay powell.

one of my colleagues at spokeerg said when mester today, she sounded more in line with the consensus. gradual rate hikes. do you think she is positioning herself for that job? steve: it's interesting. she was talking about gradual rate hikes. she was signing on board for the same kind of pace of increases this year, as we had last year, she isould be three, so kind of a mild or moderate hawk. go ahead. yvonne: i have got to interrupt. breaking news coming through from japan. fourth quarter preliminary gdp numbers coming through. and missing expectations for the fourth quarter. up 0.5%. this is the scene it -- seasonally adjusted gdp. we are seeing an e

ighth-straight quarter of growth. there is a lot of downside here, the dragon terms of rising imports. we have seen housing investment that has reduced as well. the consensus was for the 1% in the final three months to end the year last year. we are seeing almost half of what economists were expecting. take a look at reaction in the end. we are still waiting on a lot of comments here from kuroda, whether he is going to be nominated for a second term in in termsttle bit of it of dollar yen. 107.7 t7. business spending has come down 0.7%. steve, i want to look ahead to what is going on in the u.s. when i comes to this inflation report. what should we be looking for? tove: inflation is expected decelerate from it when you look at it on a year-over-year basis. this may be the most watched

inflation report, cpi report, in a number of months. the investment community has been really worried that maybe the economy is going through a , five or six years of having below target inflation from the fed's standpoint, and you know, you have the labor market that has tightened, wages which, last friday, showed there markets arerge, and a little bit fragile. i am worried that maybe inflation is back and you have obviously a lot of fiscal emphasis as well with the budget. will be aow, this closely watched report, although the estimates are that it will come in a little bit lower than december. >> that's right, so who knows. we will see. jay powell's prepared statement, gradual rate hikes, watching financial stability -- when are we going to hear from jay

powell? i'm assuming he will say what everyone else said. keep hiking rates. what is on your radar screen in terms of what we should be looking for? steve: that was interesting. jay powell, sworn in today formally, and really his first public statement as fed chair, and you know, he talked about a number of things. he praised janet yellen and ben bernanke. he gave the impression that he is going to be a voice of continuity. have been doing these gradual rate hikes and that is going to continue for some time. he also mentioned financial stability as being one of his fairly brief a speech, so i think that is going to be really on the radar screen because the last couple recessions were caused by asset price bubbles that busted, so that is definitely something he's going to be watching for.

yvonne: should also be watching what we have seen in the markets here. some turbulent two weeks. steve, -- steve: no doubt about that. yvonne: don't forget about our interactive function, tv . catch up on some of the past interviews and securities that we talk about. you can also become part of the conversation. you can send us instant messages during our shows. this is for bloomberg subscribers only. you have got to check it out at tv . this is bloomberg. ♪

yvonne: this is "daybreak asia." i am yvonne man in hong kong. kathleen: i'm kathleen hays in new york. ocbc reported fourth-quarter net income that beat expectations. at the equivalent of 778 million u.s. dollars. the average estimate of $722 million in a bloomberg survey.

southeast asia's third-largest lender reported higher fourth-quarter profit purity climbed 16% to the equivalent of 646 million u.s. dollars. that compares with the average forecast of $660 million. shares jump after fourth-quarter sales topped estimates on the rising popularity of its news aggregation service and traditional web search. revenue was $3.6 billion. baidu is investing heavily in projects including driverless cars and ai. it began the ipo process for its video-gaming service. kathleen: shares in meyer have jumped after the ceo step down. his three-year tenure was -- 51% compareddown with a 1.2% decline on the asx 200. week, tradingt had worsened.

it could not give a full-year profit forecast. yvonne: coming up in the next hour of "daybreak asia," singapore gdp numbers next on a pipeline. we will be digesting those numbers coming out of japan with wisdom trees. this is bloomberg. ♪

yvonne: 8:00 a.m. here in hong kong. we are from bloomberg's asian headquarters. i am yvonne man. welcome to "daybreak asia." markets head to a mixed open. a stronger yen weighing on equities. japan's recovery plan steps on the brakes. an eighth straight quarter of growth, but gdp slows dramatically through december. kathleen: from bloomberg's global headquarters i am kathleen hays in new york where it is just past 7:00 p.m. further disarray after the surprise of jailing of their chairman. baidu sends an optimistic aftere, shares of surge

adjusted profits beat expectations. ♪ first japan, now singapore. gdp, the final numbers coming through for the lion city. we are seeing slightly slower growth, 2.1% quarter on quarter, for the fourth quarter. still slightly better than expected. but we are seeing this pace of growth is slow from 2.8% in the third quarter. year on year ending at 3.6%, better than expected. what we saw is the drag may have been the major factor, which expanded 4.8% from a year ago. a dramatic slowdown from 19% growth in the third quarter. the global demand a story may remain firm, i guess is what

singapore is saying for 2018. but just not as strong. kathleen: a lot of them focused on the year-over-year rate to smooth out the differences quarter to quarter. that it it is a concern did not grow as fast as expected. however, the important thing here is, 3.6% stronger than previously, stronger than forecasted. it is true manufacturing slow down. services steady at 3.5%. seems a split in the economy, we often see that. if i am a singapore economist i think i am probably saying the outlook is a nice number to get now. yvonne: pretty decent numbers. let's get you caught up with the market open in a bit. in the meantime, first word news with jessica summers. >> jay powell has been sworn in as the new fed chief, with a

timeline for rate rises unchanged. he said they are gradually normalizing rate policy in the balance sheet and remains alert to any developing risks. powell did not mention last week's market selloff. officials have played down the impact to the economy and financial system. meanwhile, the cleveland fed president under consideration for vice chair of the central bank under jay powell. sources say she impressed the white house, but there is no front runner. they have had no deputies since stanley fischer step down in october. john williams and another are also in the mix. one is a bloomberg view columnist. jpmorgan change is named a yuan clearing bank. the national popularity has faltered. global transactions felt -- fell to 1.54%. branchf china's new york

also has clearing services in the u.s. other lenders go elsewhere. u.s. forces in syria said to have killed scores of russian mercenaries in what is the deadliest clash between the two since the cold war. least 200 contract holders fighting for syrian president al-assad died at a joint u.s. kurdish base. they said they had nothing to do with of the attack and the pentagon except that. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. ♪ let's take a look at the market open real quick. a little upside when it comes to the nikkei 225. let's get the market open with david ingles. there was a miss on the gdp report. we saw a 400 point downswing

yesterday before we went slightly lower. david: these levels were down two days from the reopen we saw tuesday. another thing to note, we are stuck between the full training session, the u.s. inflation data coming out wednesday. we will get some gains, chances are. chances are those gains will be capped and we're looking at a tight range across equities. that is what we are seeing across the majors. we will see has singapore reacts to the numbers coming out of there. just uninspired trading here, ahead of the inflation numbers. yvonne: what is going to be the bull case for japan? i know you're watching technical levels in particular with about topix. david: we are looking at a few things. we're-yen retracement, looking to reach the 15 month low we hit in september at 107

.33. i would say we are 0.5% away from that level. that we are seeing a lot of downside momentum on that and. just a show you what that level .55 is the retracement level. flipping the boards on your topix board oversolds. above this moving day average, which has held steady for them topix index. quickly, what is the bull case for japan? we wrote about it this morning. a halfut from two and weeks ago has taken the forward multiple on the nikkei 225 closer to 20 and we are now at 17. if you look at the earnings season in japan, 75% of companies on the nikkei 225 have beat. about 65% have beat on the bottom line.

we do have a earnings optimism. that is something a lot of strategists come back to when it comes to japan. 17 times, those are happy hour prices, if you will. have a look at this, it is very cheap in japan at the moment following that selloff. yvonne: great charts. let's delve more into the japan gdp number and bring in enda curran to break it down for us. as you said, a bit of a reality check for japan. [laughter] enda: but it is. eight quarters of growth, a nice headline. but there is a lot more the economy still has to go. can see the contribution from net exports growth was actually zero. even though it is a trade rebound, it shows japan getting not much of a dividend and the moment because of the strong currency. certainly a wake-up call reinforces the idea that boj, when governor corroded -- kuroda

says -- kathleen: our bloomberg forecasted 0.4 instead of 0.5, even though the consensus may have been higher. exports versus imports, it is a surge in imports. it is not so much suffering with exports. enda: absolutely, there is good, strong consumption having -- happening in japan. again, disappointed in this morning's numbers. it is reflecting the strong record, corporate profits. that is on the back of the robust exports. at the same time, the yen is acting as something of a dampener on the exports story, or may come a going forward. especially when you consider the story from the u.s.-china trade tensions and geopolitical

tensions with north korea. and of course, financial market volatility in the world economy. there is a consumption story. on the export side of things, you have to look at the yen and the wider trade tensions. think a lot of exporters must get headaches all the time right now. that sounds like a lot to be thinking about. always thinking about a lot, enda curran. thanks, again. join us more for analysis with wisdomtree's japan jesper koll. great to have you back on the show because there is so much swirling around the bank of japan. let's start with the gdp figures. is this a one-time because imports were up? is it really a lower level of growth of that will be permanently here? what do you see? lookr: no, i think that, -- the good news is, domestic

demand is driving growth at -- as you point out. the pool of imports is stronger than expected. that reduces the net exports contribution. the key point is that domestic demand, virtuous cycle, consumption, business cycle, that has started. and i don't think it will be derailed quickly. kathleen: what could derail it? enda curran was dealing -- focusing on the stronger yen. he thinks it is not a problem at 110, 105, 100. he thinks the yen would have to get a lot stronger before it would hurt japanese exporters. what do you think? jesper: i would very much agree with of that. the good news is, volumes of japan's exports are being driven higher. the burst of

investment activity in the united states plus possibly trump's new infrastructure initiative, that is good news for japan, because japan makes the construction machines and capital goods that make the world run strong. it has an impact. investor'sre from an perspective you have to remember companies are budgeting for around 108 on dollar-yen. if dollar-yen were to move to , that would knock off a couple percentage points of japanese profit. yvonne: and obviously, inflation. should we assume the boj does nothing until we can see inflation hit that 2%? will they lay out an exit strategy, or is that too premature this year? i think you have hit the

point on something very important. there is a huge disconnect because the federal reserve is tightening. powell yesterday confirming they are on track here. myrefore everyone says, oh god, the bank of japan will follow suit. the bank of japan is decoupling from the federal reserve. there is no inflation. look at gdp, nominal, flat, not growing. a long way away from the 2% target. willnor corroded -- kuroda be steady, study, study. yvonne: there are questions whether he will be nominated a second term. how big of a stabilization of fact does kuroda think a second term has? a lot of this has been priced in already. jesper: it is interesting. prime minister abe is very focused on creating this bastion of the stability in japan where

policy is very consistent. volatility high contrast to what is going on in the united states. remember, the people's republic of china is in likelihood going to appoint a new central bank chief sometime in march. asan wants to stand out stability for markets. the question is whether stability is the same as boring, while the rest of the world is in transparent and personnel changes that make it more exciting. but japan's of stability should attract a premium. kathleen: also in mid-march, deputyo -- the two governors have their positions expire for the bank of japan. saying thiso are decision is just about made and it will be a group a decision, reappoint governor kuroda, and announce two new deputy

governors. you don't agree with that? jesper: this is highly predictable. we have the bank of japan seat that will be filled after his five-year term expires. likely to be replaced by the next guy in line at the boj. extremely competent technocrats. very thoughtful and well spoken persons. position it is a gift for an academic. will getminister honda the job there. but that is not really what will drive policy it is governor kuroda firmly entrenched and maintaininged on course, ableendent to decouple from the reserve. kathleen: a big challenge, also

driven by what prime minister abe wants. this is still the heart of abenomics. can stimulus boost inflation? it is very important to prime minister abe as well. jesper: absolutely. this is where the current yen strength we are seeing is posing an additional challenge. for the bank of japan to change its policy. october also in 2019 in we are going to get a tax increase in japan, which means when fiscal policy starts to push on the brink, the bank of japan's role to step on the accelerator will become more important. again, you look at japan's monetary policy, for all intents and purposes, zero rates across

the curve. it is here to stay. kolle: thank you, jesper from tokyo. take a look at lotte. we are seeing the stock down by as much as 10%. we have eased slightly off for 5.5%. this is after the surprise at jailing we had reported yesterday for the lotte chairman on bribery charges. it really has thrown one of south korea's chaebols into further disarray. there is a lot on the table and further questions for the group. they have a planned ipo for the lotte hotel unit. they are hoping to sell to china, as well. restructuring within the group. but there is this bigger crisis looming that we are continuing to track and we will get more from our bureau in seoul later on. kathleen? kathleen: another exciting story breaking.

first, we assessed trade tensions between china and the u.s. and how the soybean may be a crucial weapon. yes, the humble soybean. keep it right here, this is bloomberg. ♪

kathleen: this is "daybreak asia ." i am kathleen hays in new york. yvonne: and i am yvonne man in hong kong. one of china's most potent weapons in any war against the u.s. could be backfiring. and they are considering tariffs on u.s. soybeans. it is a big risk for china, too. tom, we have long heard from slappingerts that tariffs on washing machines, solar panels, was a very targeted measure. it is not really the trade dynamics. but soybeans, definitely a different story. tom: absolutely.

any restrictions on a soybean exports in the u.s. would not only hurt u.s. farmers, but farmers here in china and consumers as well. china imports the largest amount of soybeans from the u.s.. they buy up about 1/3 of the u.s. markets to feed millions of pigs. prepared to go, how much pain can they stomach? the chinese government is very wary of rising food prices. it would push up the cost of feed, according to farmers we spoke to, and push up the cost of the pigs themselves, which has an impact on consumers. the chinese government is concerned about potential inflation. they have historical concerns. in the 1890's there was hyperinflation that led up to eventually the tiananmen square protests. they are considering it, according to reports we have had.

imposed on solar panels and washing machines -- experts said this would be a worst-case scenario for china, if they were to restricted these imports of u.s. soybeans. kathleen: there is no doubt when you mess with some of people's favorite foods you could be in trouble as a government. if they did decide it is so important to strike back against the u.s., you know people have been holding back, saying 2018 would be the year of trade tensions between the u.s. and china, couldn't they just import soybeans from someplace else? tom: they have been trying to do that. we seeook back to 2017, the imports of soy from brazil picking up 33%, quite significant. whereas u.s. imports fell last year by 3.8%. the chinese have been trying to diversify their supply of soybeans. -- the seasonality impacts farmers we spoke to said between october and february, they are

almost completely reliant on soybeans from the u.s. because those being planted in south america are growing and not ready. they are totally dependent on u.s. soybeans between the months of october and february. therein lies the rub. they have already launched antidumping probes into sorghum wheat for the u.s.. they are looking to take measures. trump is determined to close this $375 billion trade deficit with china, which picked up 8% in 2017. the suspicion is or views are, he has something up his sleeve when it comes to aluminum or steel. those, whatmpose china severely restricted soybean imports? whether or not they do that will how much painw

they're willing to take from the tariffs coming out of washington. kathleen: it is only february and it seems like it is heating up. , can become thank you so much. he is our china correspondent joining us from beijing. you can find in-depth analysis on bloomberg radio. tune into daybreak asia and you can download the app, bloomberg radio plus, or access it via bloombergradio.com. this is bloomberg. ♪

♪ kathleen: lotte groups are ofling and seoul after one their most powerful businessmen through his conglomerate into further disarray. shin dong-bin was given 30 degrees for bribery, a verdict say isle -- chaebols tragic. how serious is this for lotte? >> it is among the worst crisis

the company has faced. this is a company that has had one problem after another. a family feud broke out about two years ago, to the public, between the eldest and youngest brother over control of the company. feud whentill mid this corruption case was filed. that is still up in the air. there is a chance the older brother who is based in japan could try to reassert control of the company. at the same time, they are trying to selloff their stores in china. that has been problematic. they have had geopolitical tensions going on with the chinese government that has complicated that. ipo, unithave a hotel they have been trying to sell to investors for quite some time. they delayed that. this is all up in the air just as his conviction comes down. kathleen: sounds like this could

rekindle the feud, make it worse. dave: it does give an opening for the older brother, who at one time did control the company. he has lost control. shin dong-bin, the younger brother, has consolidated his control through reorganization. it makes it tougher. but because of this conviction, shin dong-bin can now be remortgaged -- can now be removed from the japan side of the company. it leaves the question of the older brother would pursue that path, given the younger brother consolidated control of the korea side of the company. certainly a lot of questions who would be the next chairman. there is a question what happened with samsung, as well. are these two cases different? dave: yes, these are a bit

different. there were two separate cases against shin dong-bin. it is not as big as samsung. yvonne: dave, we are going to leave it there. this is bloomberg. ♪

yvonne: 8:30 in singapore, a little bit cloudy. half an hour from the open of trading their. -- there. gdp year on year numbers looking better. i am yvonne man in hong kong. optimism,i love the seeing the sun through the clouds. you are watching "daybreak asia ." let's get to first word news with a very optimistic and sunny jessica summers. >> economic growth in japan missed estimates in the fourth quarter. it should expansion of 0.5% from the previous three months.

it is down from 2.2% growth in the first quarter. business spending fell short of expectations, rising 0.7%. founder julian assange has lost his appeal against an arrest warrant in the u.k. the judge rejected the defense's argument it was no longer in the public interest for him to be detained for jumping bail in 2012, saying, he should come to court in person to make his case. he spent more than five years in an embassy. trump has president been challenged over potential tariffs on steel and aluminum imports. suchg a meeting, they said a move would raise prices and probably cost u.s. jobs in related injured -- in related industries such as car manufacturing. several manufacturers -- several lawmakers challenged president trump's position. benjamin netanyahu faces the

biggest challenge of his life, police saying he should be charged with bribery, fraud and lack of trust. they said there is evidence he traded influence for favors. the prime minister defends himself, and denies allegations, said he is victim of a left-wing attack. the pentagon asking for $9 billion to counter cyberattacks, saying the risks of a breach are rising. some are trying to delete vital data or cause disruption to critical defense infrastructure. china, russia, iran and north korea as the top cyber threats facing the u.s. military. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. ♪ yvonne: jessica, thank you. time to see how asian markets are shaping up so far. mixed data.

dave, where is the love? dave: nowhere to be found. obviously, it is almost valentine's day. it is inflation, the most unromantic answer out there. but we have to find some stability with that number. let's start with other lotte group, not finding a lot of love there, the chairman being jailed. we opened 7% lower. let me have a quick check, dayb on your bloomberg. 5.3% lower. that is your headline, the volume coming through. there is your price level on shares of lotte group. this is what yvonne was alluding to. not a lot of volumes. dispersion is not as extreme as you would expect. inflation numbers a bit later on. demand and bids

from a lot of these hedges. horses, to bet on both but how do you do that without exposing yourself to much on one side? current markets very uneventful. despite the heavy day-to-day. and the weak position due out of thailand later in the afternoon. david, the earnings season has been glossed over this time around due to market rout. dave: it was one of those things, we had the busiest day in terms of reporting on the days when the market rout was severe. we are almost done with the earnings reporting season in japan. 201 of the 225 companies have reported. top line, some have beat expectations. still not bad at all.

the other thing i want to bring up since we are talking about this, it came to mind when you are speaking with jesper koll, this might prove a problem for guidance and the next reporting season. the yen hasee, strengthened beyond the expectations of where large manufacturers in japan are planning around in terms of and earnings. d earnings. we're at 108 at the moment. if it stays like this, expect a drag on earnings. forleen: it is a big weight japanese exporters. for baidu, what needed to go right and very right. they beat top and bottom line forecasts of 2017. you can see the stocks move up the next and -- move up in extended trading.

remy inocencio has the bloomberg charts you need to know. >> what needed to go right did go right, as well as the bottom line. ad revenue rebounding from a horrific 2016. and the costs are coming down even though folks thought they would be rising. to my first chart, g #btv 8790. this is taking a look at the revenue growth year on year for baidu. growth.are, 29.34% this is the best quarterly growth ever since the fourth quarter of 2015. you can see how this has been stagnating with the stock rice in the blue line -- stock price in the blue line. there was the health care ad scandal that scared investors and would be ad companies. we are looking at the share price hauling from the q3 because they had said they did not expect as much revenue as they did.

the revenue that did come out 27%,29%, consensus at coming out at the top range, we see it rise 5% in after-hours trading. let's go further in baidu advertising revenue. similar picture. remember the fall through 2016. we see a rebound, 22%. the last time it was that good, it was through the fall of 2015. profit margins came in at plus 20%. consensus thought that would be plus 12%. the costs were going in a good way. online marketing mers in the fa function, financial analysis. -- 0.7%.en down 7% now, up 1.7%.

now to cost, also the financial analysis function. the percent of total revenue for the cost of revenue. have expected in a survey this number would have risen higher, it did not. it did surprise to the downside, 15.9% growth. it is still rising, but falling back from the expected. everything going as it should be, especially as baidu is trying to shift toward the ai future with the apollo self driving vehicle and conversational devices that would rival things like siri as well as alexa. back to you. y, thank you. in the up-and-coming business owners in d.c. for the goldman sachs small businesses summit. richard branson gave some words of advice for would be entrepreneurs. >> i suspect it was a little

advice my mom gave me as a child. if i ever said a negative word about anybody she would may be in front of the mirror for 10 minutes and say how badly it reflected on me. leaders it business is very important you are always looking for the best in people, that you are praising, not theicizing, and that is start of getting the right culture going for a company. >> if you look around the world states, what is the one thing the government can from a regulatory perspective, to spur business -- small business investment, from your perspective? >> i have never thought of government having anything to do with small business. i pray that government does not get in the way. in the 50 years since i have

been in business, by and large, governments have got less and less in the way of business. when i started, there was british gas, british steel, british airways, british coal. everything was run by governments. fortunately, they got broken up. they are now competitive, entrepreneurial businesses. and the country has been more successful as a result. i suppose what we have to hope, if there is a change of government in britain, they are talking about re-nationalizing a lot of industries again. sad things is, a lot of young people still can't remember how awful it was when governments ran businesses. to russia, and i don't think we want that in our countries again. >> how worried are you about how

the brexit negotiations are going, and what is your biggest concern as we move forward? i have been an open book as far as brexit is concerned. i thought it was a disaster for the u.k., very sad for europe. nowink the facts are beginning to be very clear, as to what a disaster brexit will be. sadly, it is the very people that voted for brexit in the rural areas and urban areas of the latest research shows are going to be the hardest hit by brexit. that whenill hopeful all the facts are on the table in front of the house of commons, and people realize just how damaging it can be for great britain, that britain does what parliament did and change their mind at the last minute. we will see what happens.

>> one area where government has been investing less in private industry, [indiscernible] state of the space race right now between you and bezos and musk? had you handicap this? blinderinly, i did a last week. he is a good friend. he deserves an unbelievable amount of credit for that. we are doing something slightly different to what elon is doing. we are building a space line for earth. mars. scheme is we want to build a virgin orbit into putting a whole array of satellites up in connecting people here on earth. we want to build our spaceships

like spaceships. spaceships that can land on wheels, fly in space like a spaceship, and one day can go point-to-point as well. i think we are not far behind him. i think this year i would be very disappointed if this year we have not done something equally as dramatic as wlon -- has achieved. hopefully we will put people before any other private spaceship company. founder: virgin air richard branson. he was speaking to jason kelly and washington, d.c. chocolate is in the spotlight on valentine's day. global cocoam the industry bitter or sweet? we have the outlook. this is bloomberg. ♪

♪ kathleen: this is "daybreak asia ." i am kathleen hays in new york. yvonne: i am yvonne man in hong kong. a big day for chocolate lovers, my self -- myself included. they expect to see growth with the world cocoa prices expected to stay low. -- the consumer staples analyst joins us to talk about this. certainly good for the chocolate lovers out there. you think the prices are so low these days. but how does the industry look as a whole? >> we are looking at 2% to 3% growth. we believe asia, particularly emerging markets, will drive that growth. markets likek of china, indonesia, the philippines, it is low relative to more secure markets. yvonne: why is that? >> income levels are still just

getting in to the adult population of consuming chocolate. players, they are looking to have sweets back and bring people to try them. as they start to expand, it will fuel consumption. yvonne: is there still opportunity for growth when it comes to mature markets? or is this a purely emerging-market story? tom: there are opportunities in the mature market. japan is a perfect example. we are looking at 4% growth in japan. one reason for that, they are focusing on the healthy profile. japan has an extremely high elderly population. the healthcusing on benefits in terms of heart health, blood pressure. chocolate with 70% plus cacao products are doing well. and you have the kit kat ruby

red generating buzz. kathleen: i think we asked this question about the biggest risk. it is striking to me that everybody loves chocolate. the cheaper and more affordable big gets, you can convince iurself its healthy, boom, wanted even more. but where does it top out, what is the risk to growth? one risk, consumers making chocolate at home. rawave seen drops in the materials, cocoa, sugar, palm oil. the consumer wants to have that unique product to give to their other on valentine's day, and easter, as well. we are seeing markets like japan for homemade chocolate, romantic chocolate, family chocolate, more individualization.

also, to invest in the r&d in developing products, chocolate makers are shrieking the size of the packaging. consumers feel they are getting ripped off and overpaying for chocolate in the quality is not improving, just new packaging, that could hurt consumption. kathleen: it is great to see something that brings people together around the world, the love of chocolate. thank you so much, tom. our consumer staples analyst joining us in hong kong. up next, on valentine's day, we speak to the cofounder of the dating app coffeemeetsbagel. ripley this is bloomberg. ♪

♪ kathleen: this is "daybreak asia ." i am kathleen hays in new york. yvonne: and i am yvonne man in hong kong. we are sticking to the valentines fame, talking about chocolate and online data. we are talking about coffee meets bagel, with its first event in the spirit of valentine's day. in e-commerce we are seeing companies emerge to be on the nnelsels -- monicha off-line and online. the founder and ceo joins us. >> thank you for having me. yvonne: valentine's day, what does it mean for coffee meets bagel?

is a like any other day, or like christmas? youalentine's day is a day go out on dates or spend time with loved ones. but when you're single, you don't have anyone to go on a date with. valentines means you? we did a poll. over 50% of singles a they feel really pressure to go on a date. yvonne: it is like proposing to someone on the first date. >> a lot of pressure. but this year, only 30% of people said they felt pressure to go on a date. 70% are like, i will just do what i feel like doing, some people are spending time with friends, some are just doing nothing. feel great to see singles empowered to be who they are, not be pressured to be someone they don't want to be. yvonne: there are so many of these dating apps. to what extent is it too much? you have seen bumble, a very similar concept of coffee meets bagel, where women take charge

and make the decision whether to talk to a guy or not. the swipe is the key, how do you fight that? >> there is definitely that going on. when we talk to singles about online dating this -- the feeling i get, they are tired of going on dates and being disappointed are getting ghosted. that is why i was excited to launch this cmb experience. the first event was in hong kong where we did the largest singles five kilometer run and 5000 singles showed up. they ran together. it was really fun to see people just interact and mingled naturally. there was nothing to review, knows the prizes. we will be -- there were no surprises. we will be hosting a variety of these. kathleen: i was surprised by your story. you worked for avon in new york,

went to stanford business school, had a big job at j.p. morgan. i know you started this with your sisters. didn't start as a hobby? how did you go from bankers in suits to this at -- app? dawoon: my dad was an entrepreneur. my sisters and i grew up watching him build his business, so passionate about it. we want to create something from nothing. we really just felt passionate about transforming the way this generation makes connections, making connections. the feeling of belonging and making connection is so core to what makes us human, it is a really important element. kathleen: are you married your self? is this something you wish you had? i have been married a really long time.

but i am curious about you personally. when i started the company i was not single. but over time i did meet a lot of great people coffee meets bagel through coffee meets bagel , so i am dating somebody through coffee meets bagel right now. yvonne: it is interesting, this venture offline. we saw that with the likes of alibaba. but with the online at meeting world, people are meeting virtually. but does offline cannibalize your online business? mentioned iter we is about creating multiple touch points for users. amazon is opening retail shops. they started online and now 80% of their sales are generated off-line. i think it is a natural extension. how do you become a brand naturally integrated into your user base's lifestyle?

yvonne: it is more marketing, getting traction to the app? dawoon: i think it works both ways. you can have a great experience. it is going to be really great branding. in terms of your expansion plans in asia, what are you looking forward to this year? dawoon: we have been having really great success in hong kong and singapore. at the end of the year we are going to be opening an asian office so we can enter into northeast asian companies like japan, taiwan, korea. i am very excited. yvonne: wendy you expect to be profitable? dawoon: we actually were profitable in 2017. yvonne: you expected to continue ? dawoon: because of the economics, we will be scaling up our marketing, opening up our asian market -- offices and

whatnot. that will change in the short-term. by 2019 we expect to be profitable. yvonne: thank you, coffee meets bagel coo cofounder and head of marketing. market coverage continues with haidi. certainly a lot to talk about, not just with valentine's day. kathleen: valentine's day, may be the cpi report will spread love through the markets. we shall see. a lot more coming up, so keep it here. happy valentine's day. stand by for bloomberg markets. this is bloomberg. ♪

retail. under pressure like never before. and its connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. leaving every competitor, threat and challenge outmaneuvered. retail. under pressure like never before. and its connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store

near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. ♪ i'm haidi lun and this is bloomberg markets, a check. asia. ♪ haidi: a new era of the fed. jay powell was sure in in. -- was sworn in. a support for the three hike strategy. said to be in the running as towels number two. good news and that.