♪ haidi: u.s. stocks slump in the beginning of a new quarter. the worst since the start of the great depression. leading the way fresh presidential attacks on amazon and retaliatory tariffs from china. haidi: production still fails to get the target.analysts say a lot more money may be needed. betty: when the chips are down, apple said to put its own microprocessors in fresh presidl attacks on amazon and retaliatory tariffs macs at the

end of the decade. hello, from sydney. this is daybreak australia. we are two hours from the open. betty: it is just after 6 p.m. monday in new york. we will be looking at how all of the action on wall street is going to play into the asia-pacific trading day. we woke up this morning to a winter storm again. it certainly felt stormy in the markets. the kickoff to the second quarter looking pretty ugly. take a look at the s&p, down 2.2%. the dow losing 450 points. kind of rebounded a bit into the afternoon session, but could not make up for those steep losses from earlier in the session. the nasdaq, the biggest hit, down almost 3%. again leading the way. one minute we are looking at geopolitical risks and then we are looking at the fed, now it is really tech. haidi: it really is.

given that we had u.s. stocks snowed under, with the weather analogy. looking at a pretty mixed open in asia as big markets come back from the long weekend. trading in new zealand is getting underway. we will take a look at how kiwi stocks are faring. the kiwi dollar pretty much unchanged. the u.s. dollar was marginally higher than that. what outperform was the japanese yen, leading to the tokyo open. sydney futures looking at some positivity looking into the decision day. the central bank not expected to move from the 1.5% cash rate, given the inflation wage growth grew lower. looking out for the guidance as always. the aussie dollar hitting a three-month low ahead of the 76. 59 in reaction to the mixed china pmi numbers yesterday.

let's take a quick check of commodities. gold, which has outperformed equities so far this year, getting that haven bid. we are seeing a little bit of downside. crude slipping $163 a barrel. we could hit the low 60's from here on out. p in singapore. while americans shutting down the regulations in brazil which is leading to higher pressure. let's get to the first word news with jessica summers. jessica: thanks. the trump administration is said to be pushing for the u.s., canada and mexico to reach a nftafta deal. p in singapore. that could be announced at the summit of the americas in peru. negotiations resume in washington this week to reach agreement on significant remaining differences that would allow the president and leaders to make a positive statement

while the technical terms or hammered out. fell flat. cash reserves under pressure amid the long running pressure to build the sedan. tesla may need to reai as much a $3 billio -- taise as much as -- raise as much as $3 billion. output is still below target. to get overakers listed tech companies back home. he added his back into the plan to allow companies to trade abroad. he describes the plant as a great innovation. xiaomi is said to be preparing an ipo could be the biggest since alibaba's debut in 2014. finally, environmental regulators say the time i put

in place by president obama is too high. the epa decision follows intense lobbying by the auto industry to measures.pollution the widely anticipated position has drawn criticism from consumer an environment of groups. the agency may revoke california's right to set its own emissions rules. global news 24 hours a day powered by more than 2700 journalists and analysts. i'm jessica summers. this is measures. the widely bloomberg. betty: thank you so much. the bearishack into u.s. close and the confluence of factors giving investors cause for concern. speculationgst, the about trade regulation. the s&p brace below key support levels since the first time since 2016 was likely signals more selling ahead. let's go into the bloomberg. what you see in this chart on

the far right is for the first time, we have closed below the speculation about trade regulation. 200-day moving average since 2016. let me move my mouse so you can see this. it is represented by the pink line. indexeshese three major are down about 10% from the recent highs? >> that puts us in correction territory. what is important about the average -- in the past three major selloffs, we have seen the old, we have seen the 50 day selling break which means a lot of sellers have conviction. breaking out. buyers are starting to disappear. that is what the market snapshot shows us. gold futures buttoned down but they were clearly higher. this has been a pile into gold kind of environment. let's go into some of the big movers because tech took a major hit. the momentum stocks clearly getting hit.

having tohese plays do with the big stories of the day. amazon getting hammered by these trump tweets. apple announcing it is planning to move out of intel chips by 2020. that stock and a lot of its fellow chip rivals getting hammered. tesla, in its story, this stock down 20% since its stock options were approved by investors on march 21. the credit downgrade weighing on that. general electric announcing a $1 billion asset sale, but analysts say it will be the first of many.that stock taking a hit . let's go into the bloomberg. we call this chart all good things come to an end. $2.3 trillion was raised by u.s. stocks in february. in march. what we have announced is it is the first correction since early 2016. volatility has almost doubled

from historically low levels. while a lot of investors had bemoaned the lack of action, the tranquility in the global markets, you are not hearing that complaint now. the s&p 500 and the dow have made first-quarter losses and 10 quarters. there is a lot of the minimum repositioning taking place on the part of many investors. haidi: i'm sure a lot of people would give a lot to have some calm. let's take a look at the big parts of the tech story that continues to see a stumbling start. on renewed attacks by trump amazon. facebook continuing to see issues as well. let's start off with amazon because you are seeing this presidential of session continue. su: if you go into the stock chart, what you can see in one week on amazon and how the stock has fallen since the axios report came out, announcing that trump, or reporting that trump

was obsessed with amazon. that hisn everything believe on the underpay taxes, they don't pay enough u.s. postage. the pressure is starting to take affect, raising the concern that amazon could be subject to greater scrutiny and the market value has fallen considerably. then, you have apple announcing their a plenty -- they are planning to move out of intel chips and put their own chips into their computers by 2020. that not only had intel stocks go lower but a lot of the sector moving down in a very big way. it was about a 4.5% drop for the semiconductor index in general. all 50 members were lower. even apple was lower on this move. again, that is another nail in the coffin for the tech momentum story that was so much a part of 2017. let's take a look at facebook.

know, a lot of the tech rout began with concerns over facebook. while this is not a technical indicator, any kind of death cloc a lot of the tech routk where you have the 50 day short-term moving average, it is a sell signal. it indicates more selling ahead. there is concern not just technically but fundamentally for facebook. zuckerberg has become increasingly isolated among tech ceos. -- see tim cook, elon musk criticizing facebook which is very unusual in the past when one company has come under fire in silicon valley, others have rallied to their defense. it is not happening here. haidi: thank you so much for that. fundamental, technical, existential issues for facebook. amazon falling again on the back of more criticism from president

trump. the president said only fools or worse are saying are money-losing post office makes money with amazon. trump. they lose a fortune and this will be changed. our fully taxpaying retailers are closing stores all over the country. not a level playing field. joining us now to discuss more is spencer. what does the president have against amazon or jeff bezos? they lose a fortune and this will bespencer: that is hard to untangle. the one thing is that jeff bezos, in addition to running amazon, he owns the washington post. he owns it as a separate entity. it is not intertwined with amazon, but president trump conflates those two. the washington post often runs coverage that is critical of the president. that could be part of the motivation there. it is certainly a nice

distraction for the president from the stock market declines we have seen today. his latest tweet specifically about the postal service losing a fortune from amazon. how dependent is amazon on the postal service for delivery? spencer: it is certainly a nice distraction for the president from the stock market amazon has warehousing and shipping hubs around the post office which does about 40% of amazon's delivery, last mile. it packs people's orders, sorts them by zip code and brings them to the correct postal service to do the last mile. it is beneficial for the post office as well because the postal service is grappling with jobbing -- dropping letter volume, parcel delivery like amazon is providing is picking up. it is providing them additional revenue. as long as you are under legal mandate to reach every address, the amazon relationship is beneficial. betty: spencer, thank you so much, our bloomberg tech

reporter on the latest feud between president trump and amazon. i want to bring back matt, managing director of equity strategies, to talk more about the markets. joining us now from massachusetts. i want to bring up that chart again. it is on my terminal, which shows again, this key moment here, matt, where we have fallen below the 200 day moving average or close below that average. how significant is that to you? matt: well, it's interesting because it is important on a short-term basis. you see how with a chart it got down to the level several different times and bounced strongly off it each time. that is a concern, especially on this day of mechanized trading where high-frequency traders are so involved and those moves can be so sharp. the thing for me is you go back even further and you look at the

two-year trend line. you go back to the lows in early 2016, just after we had the crash in the oil market and nobody was worried about the junk-bond market and we finally bounced. that trent lott is at the same level as the moving average so it is a little longer trend line. we have broken slightly below that. having said that, we still need a more meaningful -- typically, we get head fakes that they are down for a day or two and back strong. if we do get a meaningful break -- i will be watching the intraday lows from february. 23.35 on the s&p. you break below that, that will confirm we are getting another way down here. case, as is often the particularly at the moment what is hurting sediment is so much -- sentiment is unknown. exactly what the trade war will materialize, the regulatory

action will look like and the ramifications on the earnings and business model. as an investor, what would you be staying away from? you can see that there the classic safe haven reaction the overnight session. all in the of technology area, let's look at the difference between today and what we saw in 2000. i thought that was a great thing over the weekend, in 2000, the tech group reached a 25% waiting 500.e s&p that is a similar one we had now. in 2000, it was only 13% of the earnings. today, it is 23% of the earnings. it is at a much better base below it. even though we could and should see more downside to it, i don't think it will be quite as severe. with all of these uncertainties, i think looking at all of the stocks that have high dividends but also a record of strong dividend growth to look at going forward. haidi: stay with us.

lots more to talk about. matt, staying with us on daybreak australia. china calling for more trade talks amid the tariff sp at. we will discuss the prospects. betty: tomorrow, we have a special guest. warren buffet's son howard buffett who is out with his new book talking about failing border policy, certainly coming at a perfect time in washington. that is at 8 a.m. in sydney and 6:00 p.m. right here in new york. this is bloomberg. ♪

haidi: i am haidi lun in sydney. betty: i am betty liu. as you mentioned earlier, the trump administration making a new push to have an outline nafta deal agreed upon, allowing

leaders to make an announcement at the summit of america's next week. joe joining us now from washington. one moment, president trump is threatening to just cancel nafta altogether, and the next minute, they are trying to scramble together for a deal. what is happening? joe: there does seem to be some disconnect between the president's twitter account and the rest of his administration. there also seems to be some eagerness to wrap some things up. they have done this with the south korean trade pact. there was a lot of angst and words from the president about the deal with south korea. suddenly, there was an agreement on principle. not a lot of major changes to the pact. words from the president about the deal with southit seee same direction with nafta. there have been some outstanding issues on autos. an agreement in principle does not necessarily mean something will get signed, but it will give the presidents of the

u.s., the president of mexico and the prime minister of canada to give something to show off after the summit of americas. haidi: the president has a tendency to link issues of security and immigration policy with trade. is he likely to do this going into the negotiations? joe: i think that has been a big rhetorical part of it, though there does not seem to be, at least from what we understand, negotiating terms in the actual talks among the three nation. s. there is -- there has always been a concern with the u.s. and mexico regarding security on the border, immigration, drug flows, etc., but there does not seem to be holding anything up. haidi: thank you so much for that, joe. let's get back to matt, still with us. one of the unknowns we were talking about is the implications and how widespread

the impact of a global trade war witould be. does anything that change from january until now changer outlook when it comes to corporate earnings? matt: you with the nail on the head with the word uncertainty. there are other uncertainties as well but the problem is this is probably not something that will play out over a short-term period. it will be spread out over a long time frame. it is nice we resolved the situation with south korea, very small changes and very quickly. hopefully they can do something on nafta. china, especially when it comes to the intellectual properties, this is something he seems like he wants to fight hard on. president trump sets the bar really hot. he does not do that because he wants to make a small impact. he wants to make most of what he wants. we don't know what we will get and that will continue to be a lot of uncertainty.

earnings in the first quarter going to be great, we know that. the real thing is going to be what is going to happen with the projections, the guidance going forward? whether it be trade wars or issues like the regulation on tech companies, if they say that will cause headwinds, that will cause problems for the issues like the regulation market. betty: one interesting thing, we have not talked about surprisingly the last few sessions is the fed. amid all of this, is the fed truly now not a factor in the markets or is it just these other things we are talking about are so much more important right now? matt: well, i mean, i think it is important that the fed has changed. it has been a long-term change and they changed a while ago. they have been raising rates now. their qt program, the shrinking of the balance sheet has accelerated. it was only $10 billion last year a month for the entire quarter.

it became $20 billion a month in the first quarter. it will be $50 billion on the fourth quarter. it will be a much different situation with the about of liquidity the fed will be providing. i think that is a major headwind for the market. it is not at the forefront of what people are talking about but it is an important issue on the background. haidi: thank you so much for joining us, matt maley. and catchtch us live up on past interviews on our interactive tv function, tv . you can dive into any of the securities on the bloomberg function and join our conversation, sending us instant messages. it is for bloomberg subscribers. check it out at tv . this is bloomberg. ♪

haidi: i am haidi lun in sydney.

betty: i'm betty liu in new york. here's a quick look at your headlines. analysts said snapchat users do not like the redesign. middle and high school students and college graduates complain about the way contacts are ordered, stories on their page and the rising number of alerts. snapchat is still dominant with middle schoolers, but instagram is becoming a strong contender. bank fell the most since 2015 despite denying it is involved in an official investigation into a loan. local media says india's enforcement director is looking into a $500 million loan to a group. the relationship between the chairman and the husband of icici bank ceo. betty: spacex has sent a rocket carrying supplies to the international space station. the falcon 9 lifted off from

cape canaveral with its dragon capsule packed with three tons of equipment and research. spacex is targeting 30 launches this year, up from 18 in 2017. the latest mission brings the 2018 tally to seven following monday's launch. certainlycex continuing on . musk has had his hands in several things, but these days, it is his hands in tesla that has investors worried. haidi: we were speaking to don yesterday, he was saying the tesla stocks scare him because he does not feel like it is a company being run by a man who is focused on making cars. we are going to talk more about the delivery issues and production issues that still plague tesla. betty: is he going to make those production targets? there was that 3:00 a.m. memo from elon musk saying if they

made 2000 vehicles in the last seven days. we will talk more about his struggles and projections on tesla. this is bloomberg. ♪ retail.

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haidi: markets locally open in nine minutes time. we are not expecting a change from the central bank here. wage growth, inflation growth. futures looking tentatively positive, let's put it that way given the selloff overnight. i'm haidi lun in sydney. betty: big question on how that last.ill i'm betty liu. you are watching daybreak australia. let's get to jessica summers with the first word news. jessica: u.s. stocks seeing the first start to the second quarter since the great depression. data compiled by bloomberg shows the s&p 500 slump was matched only by the fall in april 1929.

retaliatory trade comments brought a tech rout. they lost more since october 2011. expanded at aring slower pace in march and robert uriel prices were near seven-year high -- raw material prices to a near seven-year high. that is just below forecast. while new orders slip to the lowest since august, the prices index raised for four straight month to the highest since april 2011. the bank of japan is offering a rather negative view on cryptocurrencies with a downgraded q&a for those seeking information. a website asks in bitcoin and others could be considered money and whether profits could be made. the boj governor has expressed cryptos whilebout

the g20 warned they could destabilize financial markets. japanese lawmakers are said to have agreed on a maximum three casinos as gambling is ultimately approved. the party members told reporters the number will be reviewed seven years after the first location wins a green light. however, they are yet to agree on entry fees and continuing tax onmay reach 30% gaming revenue. global news 24 hours a day powered by more than 2700 and tax on analysts. i'm jessica summers. this is bloomberg. haidi: thank you for that. let's get you a quick update on the markets, at least what we are setting up for in asia. a number of big markets come back from the longanalysts. weekend. new zealand among them. you see the losses being extended. the kiwi dollar trading at

.7210. the safety effect for the trade overnight. the gold is higher. the vix is surging. equities very much falling with the s&p filing. futures in australia looking pretty negative. positive, i should say. positivity as we go into the rba decision day, expected to leave as it is.nge the aussie dollar hitting a fresh three-month low in the early morning session on tuesday. the aussie-kiwi trading at 1.0619. big news in the world of high tech. apple is expected to use their own ships in mac computers as early as 2020, moving away from their reliance on intel. mark, this is part of the narrative we have seen of

vertically integrating its own supply train -- chain. mark: absolutely. this is a major move for apple. it is a defining moment for the company's supply chain ability to design and produce trip sets to match speed and performance. they are going to have to get this right. i think they will and will take a couple more years. betty: what are the big risks here? mark: the risk is walking that fine line of being able to produce her own chips for mac computers which are pc's, without sacrificing the without sacrificing the performance, the reliability, the scalability of these as they macs that use intel processors. intel has been in the chipmaking game for desktop laptops, high-performance pcs for decades. just kicking them out of the mac will be a gradual transition

until they are able to get to the speed intel is at. betty: what kind of timeline are we looking for before this can be fully deployed? mark: we believe they will kick this off in 2020 and it is going to be a multistep transition. we are not reporting how long the transition might take, but i have a feeling it will be a bit longer and longer -- larger scale in transition from pc chips to intel processors which took under two years from 2005 2 2006. -- to 2006. gurman.hank you, margaretk tesla stock falling as much as 8% at one point before erasing some of the losses. musk toldafter elon staff that model 3 weekly output may have topped 2000 cars in the first quarter. that would be below the 2500 target he set back in january.

our u.s. automotive editor joining us from detroit. craig, is it all but a given they will not meet the reduction -- the production target? craig: it is pretty much a given. the shares had a bit of a relief rally after that report you mentioned. was --1% the klein that decline came before the report. i say perversely because there is generally an expectation they will come up short of that 2500 model 3 target you reference. the 2000 figure is a close enough for some investors and that is what analysts were anticipating. that as long as the company close, they may actually be read as a good sign. you still see tesla shares finished the day down quite a bit. close, they may actually be read as a goodthey really hat week and awful entire month of march.

it was the worst month for the company's share performance since december 2010. haidi: elon musk has been super active on twitter, starting with april. . responding to a journalist asked him for an interview, my focus is on getting the model 3on time. we had another spacex rocket launch. does he need to do more to convince investors this is his focus? mark: i think you have heard investors or just analysts or people who follow elon raise this concern of is his plate overloaded? this was a major question that to the companyd recently passing a huge pay package for him to lock in this idea that he will be with tesla for the long-term. he got spacex and all of his

other interests, including boring company which is doing tunnels into the ground for alternative transportation system. he was tweeting this past quarter about selling flamethrowers to support the company. i think it is a legitimate question of whether or not he has put too much on his plate. you have seen people raise that. with rearing its ugly head tesla coming up short execution wise at the end of this past quarter. betty: if they do, if they give in, what happens to the cast position? do they have the money to be able to survive past that? mark: this comes down to the question of how much the cash the company is going to be burning through. they spend billions of dollars

in capacity for getting the model three up and running. by making so few of them, the amount of return on that investment is very limited. there are also concerns, since the car is eventually going to be sold for $35,000, once they work through the initial there are also concerns, since the carcustomers who are payinge than that, you get into this trap of the company selling a lower margin version of that car and some ongoing questions about cash burn. there are some expectations that the company is going to have to raise capital again. you have seen movies and jefferies in particular raise somewhere in the ballpark range of $2 billion to $3 billion, being what is expected in the near term. what about the regulatory issues and the investigation into the crash and autopilot system? is that being seen as a pretty big headwind? craig: it is certainly a

headwind risk. another one of elon's tweets pointed this out -- the ntsb does not regulate the auto industry as much as the national highway administration does. the national transportation safety board is the one looking into this recent model x crash. really, they make an investigation and recommendations about what the company should do going forward and make recommendations on ways to avoid crashes they have investigated. they don't have actually power to levy fines or crackdown on the company. it is certainly a negative from perspective and reputation perspective for autopilot. craig, thank you so much for that, wrapping up the tesla story. almost astweeting

much as president trump. next, we will take a look at how trump feels about xi jinping and how that could affect trade policy in the long run. this is bloomberg. ♪

betty: good morning, i am betty liu in new york. haidi: i'm haidi lun in sydney. you are watching daybreak australia. president trump's trade threats are not really hitting stocks and bonds. tariffs raising the question on over what it could mean for central-bank policy. kathleen hays is here with a look. is the inflationary threat of tariffs real? kathleen: there was a report we saw today, purchasing managers survey for the month of march raises the question big-time. finally start lighting u.s., maybe even a fire? inflation

chart.ump into this you can see the blue line. that is the purchasing managers index, easing from just over 60 to 59.3, well above 50. you are clearly in strong territory with a good pace. it is this line that cut everyone's attention, prices paid. prices of raw material that goes into production. 74.2mped up from 78.1 to the month before, the highest since 2011. some of these rising costs were due to some panic buying before the tariffs. the survey was taken before they were put on by president trump. 32% of the chart. you can see the blue line. comments made by members of the isn in response to questions were that tariff concerns were a big concern about what is going to happen. this is early days. the chief economics for

bloomberg economics says this story is overblown, but it is one of the big risks people are watching. betty: what does it mean for the federal reserve and its three to four rate hike plans in 2018? officials, from the fed, the new york fed. charlie evans -- they have said tariffs alone are not a big deal for the u.s. economy. it is a threat of a global trade war that could be a risk. the risk we are seeing right now is financial stability. market volatility. yes, it was hardly bank stocks by trade tariffs between the u.s. and china is a big driving force. another thing we have to watch closely is the yield curve. let's take a look at this chart. is the 2-yearee

note is the 2-year note to 10-year note spread is down to just about 45 basis points. that is the narrowest since before the financial crisis started. when people see flattening yield curve, they start thinking will it invert? an inverted yield curve leads to this sense that maybe recession is coming, maybe even next year. trade war goes along with that question is if this gets bad -- we're a long way away -- but depending on how this goes, depending on escalation and retaliation, that is where you get into territory which could affect the fed's expectations for how many rates. what is the main implications for the rest of the world, particularly asia? kathleen: asia is full of exporting nations. this is a very important question. the reserve bank of australia is meeting today and they are not expected to change rates. they are expected to keep policy on hold. this question of trade hangs over them.

let's take a look at what the market is looking at. traders now see no rate hike of the rba until the third quarter of 2019. inflation is the 2% to 3% target range. wages are still slowing growing -- slowly. the wild card is the weak aussie dollar. the worst performer among g10 countries. aussied mean a boost in exports. at the last meeting, rba c hief warned that protectionism spreading across the world could hit the global economy hard and australia as well. let's take a look at japan. a survey we got yesterday shows business sentiment still strong despite a rising yen. we know that prime minister abe is expected to discuss the tariffs with president trump when they meet later this month. it is a big question hanging over asia. betty: huge question.

thank you so much, kathleen hays, our global economics and policy editor. a transpacific trade step widens. possibilities. stratford is one of the world leading geopolitical intelligence platforms. headlinessee so many back and forth, day to day and a tit-for-tat between u.s. and china. we here about trump, is he or is he not trying to pull out of nafta. what do you think we are missing in all of these headlines? roger: if you look at this administration, it came with the strategic idea that it needed to fundamentally alter u.s. trade agreements across the board. not only because of the concern of trade deficit, but because many of these trade agreements were built in a very different world with different supply cames, and at times, nafta into effect before the was an iphone.

how do you understand modern trade without it? the challenge was this idea it would threaten in a very extreme manner and use that as a starting point for negotiations. that i think has left people very uncertain about the potential outcome. betty: what do you think the potential outcome will be? rodger: i think there is more restraint when it comes to the end goals. there really is negotiation going on. we know the chinese are talking behind the scenes. when other canadians, the mexicans and the americans are talking. the south korean to probably have the easiest deal for the u.s. to walk away seems to have been able to strike the fastest negotiation of all of these. certainly, some changes coming. probably more time limits, trade agreements, more restrictions. less of the very broad style of trade agreements we have been seeing in the past few years. but maybe not all the way to a complete breakdown in the way the which the global regime has

been working. haidi: i'm curious as to how the strategy, the trade tariffs being threatened is actually going to help when it comes to trump's basic idea that he wants the chinese to reduce the trade deficit. does that show you it is going to work or more make some good headlines, if you can get them to produce the trade deficit by $100 billion? rodger: i think it is really going to be a mixed bag. he does have the chinese trying to adjust some of their own trade. they really want to cut back on the excessive steel production they have going on. this is a great way for them to push that back domestically further. that helps them out. on the other hand, the chinese are really focusing on new industries they want

to ultimately industries they wt to ultimately leapfrog much of the rest of the world and be the leaders of these industries. it is hard for the united states to keep up so the chinese may be able to move along these lines. that is not necessarily going to come back and help the u.s. the chinese are very clever and looking at the places that hit at very specific elements of politics in the united states. iny are targeting and -- -tariffs,rro agricultural products that are designed to hit at the base that supports president trump. haidi: this is an ideological fight in a way. i will jump in. haidi: this is an ideological fight because you mentioned in --r notes that the u.s. has beijing is a peer-to-peer level competitive or being on the same level, do you think the president is almost fighting a historic battle when it comes to

these intellectual property, counterfeiting type issues when china is a lot more innovative these days? rodger: i think that is a difficulty. we have to look at this in the dual context. one in the economic context and the other is the strategic context. the united states now sees china as a rising peer power. that is not all away so the cold war dynamics between the u.s. and the soviets, but it is the united states concerned that china is becoming a player on par certainly with what japan was in comparison to the united states in the late 1980's and maybe even further. secondarily, the chinese are looking to reshape the global economic architecture, maybe not to throw away the u.s. centered system that was built coming out of world war ii and reinforced out of the end of the coldwas id states in the war, but to insert themselves into a stronger role.

the connection between the chinese government and chinese economy is stronger and gives them more space to act in the u.s. has. rodgerthank you so much, bigger. aker. we have the latest on this possible m&a deal between the energy companies, australia santo getting a proposal from harbor energy at $6.50 a share. santos giving them the opportunity to do the due diligence. harbour will be funding this deal with $7.57 billion of underwritten debt. no certainty this basel will this offern offer -- will result in an off. er. it was at a much lower price, meant this to look like they rad their price per share for the australian company santos. haidi: you can get a roundup of

the top stories you need to know to get your day going on today's edition of daybreak. bloomberg subscribers can go to tv on their terminals. you can see the overnight trading action. also available on the bloomberg mobile app. you can get news on the industries and assets you care about. this is bloomberg. ♪

♪ haidi: that will be about it for daybreak australia. we will be up next with daybreak asia taking a look at will we be coming over the next two hours. yvonne: we continue to follow this tech selloff. we have the head of credit rivoli management to talk more about that. he says president trump's's tweets are indiscriminately here.seen by traders not only seeing the stocks but also what we are seeing when it comes to fang bonds.

they have held that resiliently the last couple of weeks but not until what we saw today. certainly seeing more of this spreading to the credit markets as well. betty: we are going to zero in on one part of that market, and that was really one stock, tesla, which plunged in today's trade. john thompson of villas capital says this company, despite what elon musk says, is going to crash and burn in the next three to six months. haidi: i guess we know what his view is. very distinctive views when it comes to tesla. that will be a great conversation. we will be joined by the paypal chief technology officer, talking about future expansion, m&a plans for the company, the changing nature of its relationship with ebay. also, all this talk about blockchain, blockchain payments

becoming commercialized through the likes of paypal. not to talk about today as major markets come back online from the long weekend. that is it from daybreak australia. this is bloomberg. ♪

yvonne: 7:00 a.m. here in hong kong. i am yvonne man. welcome to "daybreak asia." the top stories this tuesday, risk-off trading is back. weakness in cap sparked a route. president trump resumed his attacks on amazon. stocks slump at the beginning of the new quarter. the clients are the worst since the start of the great depression. bloomberg's global headquarters, i am betty miller in new york, where it is after 7:00 p.m. on monday. model t production failed to hit the target. a lot more money may be needed. apple breaking up with intel and