>> 7:00 a.m. here in hong kong. i am yvonne man. welcome to "daybreak asia." the top stories this tuesday, asia-pacific markets face a mix to start after a broad-based rally lifted u.s. stocks. the s&p back to gains for the years. a new maple low as president trump rants china and russia currency manipulators. from bloomberg's global headquarters, -- betty: from bloomberg gode global headquarters, and betty liu. profits top quotations as earnings rise to a record. record, netflix jumping in late trade.

more than 7 million people signed up in the last quarter. yvonne: we will be looking at those chinese gdp numbers, looking at and that for some clues, perhaps, not just on , but in policy in china the reaction than the markets. i want to pull up this gtb chart. gtv chart. -- continuedoldings have to rise. yuanhe same time, the has risen. it is all confounding when we hear the president saying that ,hina is a currency manipulator

and china is not using as they could the leverage of the u.s. treasury holdings. yvonne: we are perplexed by that ethics tweet saying that this is defying what we heard from the treasury a day ago. tos going to be interesting see these gdp numbers come out of china. what this will mean for the renminbi as well. we continue to see the economy firing on all cylinders as well. you need that extra ammunition to use as monetary options in this trade spat with the u.s.. betty: let's take a look at how s ended with a lack of trade tensions that help the markets move higher today. the s&p up .8%. the dow adding 200 points. the nasdaq also rising as well. earnings back in focus, yvonne. that giving a little bit of lift

as asia begins trade. yvonne: focus back on the earnings, the fundamentals. also, the u.s. halting their plans on these sanctions on russia. a little bit of a relief rally as well. looking at new zealand right now, we are seeing downside when it comes to equities. down .1%. we mentioned the dollar holding onto those losses after the tweets from president trump. under one hour away. futures looking flat right now. treading water when it comes to the aussie dollar at 7781. yield taken one basis point higher. we are counting down to the open in japan and korea. take a look at futures here. it looks like it could be a muted start. seeing gains when it comes to the nikkei 225. dollar-yen pretty steady. let's get to the first word news with jessica summers, who joins us from new york. jessica: president intends to nominate pimco's richard clarida

as fed vice chairman. experience after more than a decade at pimco and also insight into how washington works from the time at the treasury under george w. bush. he was a long time university professor. he steps down from the fed in october. u.k. prime minister theresa may has come under fire for not meeting a common debate on airstrikes in syria. she spent more than three hours justifying her decision. debate.eduled the she is accountable to parliament and not president trump when it comes to approving military action. u.s. and u.k. have issued an unprecedented joint alert saying russia is using compromised computer networking equipment to companies and agencies.

the department of homeland security, the fbi, and britain's national security center wants specifically of attacks on routers. they say individuals and business should ensure software is up-to-date and password are secure. 900national guard says personnel have been deployed to the mexican border. that is part of president trump strive to combat illegal immigration and drug trafficking. 650 troops are in texas. 250 in arizona. 60 in new mexico. the president have called for 4000 troops to patrol the border. he already has commitments for more than half that number. the national football league is taking action to protect players from potential brain injury. it spanning 10 varieties of helmets that were found to be inferior to others. until now, players could wear any helmet that passed certification standards. helmet types are banned immediately while the remaining four will not be used by players. 24 hours a day.

a tick-tock on twitter powered by more than 2700 journalists 120analysts in more than countries. i'm just summers. this is bloomberg. betty: thank you so much. let's return to u.s. markets, where stocks rose. geopolitical tensions faded. netflix jumping in subscriber revenue numbers. su keenan here with all the action today. the upside it was. >> she delivered strong earnings that were expected. are the future earnings strong enough to show order? on the lowest volume of the year so far. we did not see currencies take center stage. currency devaluation. the dollar held on to its losses. we did see crude popping higher in extended trading. it gives back earlier gains.

let's go into some of the most active. there was a lot of activity going on. possible m&a. a big trucker and turnaround backed by carl icahn. takeoverinvolved in a by volkswagen. some are calling it -- amazon announced its halting a plan to sell drugs to reduce competition. check out tropicana moving in a very big way. the casino appears to be in a deal to be sold. carl icahn has been making deals with some of his properties in recent weeks. let's look at netflix, the big star in after hours. up as much as 6%. fairly strong in what was allrted to be a win-win around, coming in with a record number of subscribers, exceeding

all estimates. ..4 million use of drivers in europe and latin america. that's going to the bloomberg dril-quip. dtv is where you can find -- gtv is where you can find these charts. this is for the bank of america record profit reported in the latest session. all banks have been posting higher eps since the financial crisis. the question is, can it be indicative of what we see with all the earnings reports for banks? you have got to remember, we have corporate tax cuts, the increased trading activity from some of these banks that have a lot to do with the volatility behind us, and again, there is the expectation of higher interest rates, and that also is adding to the bottom line, as is cost-cutting. if these earnings this season are not strong across the board, thatanalysts are wanting because extraordinary expectations are already built in, it could be a negative for stock market stability.

>> could be all priced in is what we heard at the beginning of the year. let's talk about commodities. we saw the shot in the arm from geopolitical tensions last week. you know, it seems like oil fell sideways, even with gold. why do you think that is? su: that used tensions clearly educed some of the tech -- happenedtegic strike over the weekend. major disruptions in the middle east. is 8% last week alone. we are seeing a lot of expectations come down a bit. very strong, bullish bets have been placed. a bit of relief in the market that the expected syrian missile strike did not spill over. a lot of the oil analysts are

saying they really threaded the needle in keeping it a mission that was limited. gold edged up a bit even though there was a reduced threat that underscores that traders are not writing off the volatility. the volatility we have seen resulting from trump's tweets. we did see the etf again build on their gold holdings, and that has been a rising trend pretty much since september. yvonne: thank you. we will continue on with trump';s tweets here. a critical one should markets. he may have reignited the trade friction between china and the united states. take a look at what the president must tweeting, saying russia and china are playing the currency devaluation game. the u.s. keeps raising interest rates, not acceptable. this of course contradicting the latest treasury department report that refrain from naming any country a currency manipulator. let's get to stephen engle, here

following the story right now. it's quite perplexing. treasury has the semiannual report that comes out, and they have the opportunity to name the 12th currency- 12 biggest partners with the united states as either currency manipulators are not. they did not name any nation a currency manipulator. china is on the treasury department's watchlist. that is of course in the crosshairs, but not named a currency manipulator. russia is not on the list. what is also perplexing. he is naming out russia and china as using current the in an unacceptable way. the immediate reaction, the bloomberg dollar index slipped into his -- its lowest since march. weak dollar expectations will remain entrenched in the market as long as these contradictions or talking down the dollar from the president. yvonne: it the u.s. doing the currency to evaluating?

in the end, we are seeing the renminbi. su: the renminbi -- stephen: the renminbi is up 10% versus the dollar. it's its highest since 2015 and march. the rebel, keep in mind, it has weakened quite a bit, 9% versus the dollar. much of that is due to u.s. sanctions against russia. betty: later tuesday in the u.s., trump will be meeting with the japanese prime minister, shinzo abe. tell us more about what is at date between the two. stephen: a lot is at stake for shinzo abe. he's under fire at home with a number of different scandals, and his popularity has signed -- sagged quite a bit. the united states did a double whammy on shinzo abe. the japanese were not part of the negotiations or the overtures toward north korea. that is something shinzo abe in the his advantage

run-up to those october special elections. the hardline versus north korea. japan was not involved in that. japan being a key ally, a key trading partner with the united states. donald trump not give the japanese and attention in that deal tariffs and aluminum. a couple of double whammy for shinzo abe. a lot at stake with donald trump. he is said to be going there as well with a proposal to start a of bilateral trade talks given hasfact that donald trump at least given a hint that he would like to explore the possibility of rejoining the transpacific partnership. that will be on the agenda as well as north korea. what role can japan play in this very complex lead up to talks and of course between south korean president moon and kim jong-un and potentially in may or june, trump or kim?

betty: stephen engle, our chief north asia correspondent. high-stakes. still ahead, we are expecting china's latest gdp numbers progrowth critic at 6.8%. we will look more at the headwinds racing the world's second-largest economy a little bit later this hour. yvonne: up next, how our markets preparing for the chinese data dump? his thoughts. we will look ahead to this barrage of fed speakers this week as well as the potential new vice chair. this is bloomberg. ♪

yvonne: and we are counting down to asia's first major market open this morning. japan's futures lower today. aheadrse, we are looking to president trump and shinzo abe's summits in mar-a-lago, happening today. this is "daybreak asia."

i am yvonne man in hong kong. betty: that's right. i am betty liu in new york. u.s. stocks rising on the back of the fading concerns about geopolitical tensions. equities let higher by gains in tech, health care, industrials, and netflix jumping in the trade, as we saw, adding more subscribers. forecast is in the first quarter, we want to drown ourselves and good television, good content. [laughter] betty: the chief u.s. economist, you can't forget people who just wanted to an out what's going on. >> not at all. not at all. betty: what did you make first about the market today? i know we don't like looking day-to-day as much, but it's incredible to me how the markets been, headlines, right? whether there are headlines are no headlines. took a lookck and at the markets during the watergate period. betty: you went back. >> and the lewinsky period.

i'm not that old, but it did go back. basically, what you find is that these types of white house events have very little impact on the equity markets and the economy generally. what has happened in the past periods is foreign actors behave badly, looking to take advantage of the fact that the u.s. president doesn't have his eye on all the balls, and as a result, things happened globally. that does impact the market. , it makes politics for good headlines. it makes for volatility. doesn't really matter very much at all. betty: what about some of this news out on the fed and richard clarida becoming the new fed vice chair? steven: i think it continues. it's important because he is obviously a strong candidate. it's hard to say any thing negative about

him. he is an academic economist, but somebody who has worked in the markets. felt they used to visit the capital markets every six weeks. it was not really someplace they lived. powell lives there. that's where he grew out of. betty: net positive for the markets then? steven: it continues a string of appointments at least that the fed. it's a positive that shows he is putting really sane, adult -- sane adults at the table. are they great, imaginative thinkers something goes askew? we'll find out. betty: right, and it won't be pretty when we find out. we will find out when they are actually tested here, right? steven: right. at the moment, they are strong candidates, all very bright. i think what's really good is

that they are grounded in markets and the reality of how the world works as opposed to being in the theoretical world of how things should operate. net positive. have been talking about just how busy is going to be when it comes to some of these fed speakers. speaking more than once this week as well. are we likely to get a little more ahead of ourselves, what they are likely to say? there is a chance they might be reiterating what we heard india fund the minute as opposed to what we heard in the fed meeting back in march. steven: obviously, they are going to do a lot of reiterating. speaking for themselves, not the fed. but i think what you probably are going to get out of it is people who matter on the board. sense they are less concerned with this data dependency of month-to-month data in terms of whether or not the fed funds rate should move

higher. it is in a lot of ways an old-fashioned fed. they are looking at three months rates, year-over-year rates changed. the trend is strong. very difficult, given this level of activity, to say the funds ratio will be trading at some level below inflation, let alone a little bit above it. it makes a little sense to have funds where they are, so i think, you know, if i could put words into powell's mouth here, i think he would say that the price of money should reflect the level of activity in the economy, and right now it doesn't. on emergencybe standards. this concept we have to constantly be focused on every month's cpi number, all kind of silly when the economy is growing and strong, and capital spending is up.

it will not be the level of interest rates. and what we got from the fed minutes was this interesting survey, i guess. it shows us the gtd live ratio. they are not concerned about the downside risks to inflation anymore. that has dropped to zero. why'd you think there is such a lack of downside risk to inflation? will we see inflation back down to 2.5% now? steven: people are surprised on year movesas the forward. you are already seeing it in wages and you are beginning to see it in prices as well. inflation will be a 2% low. they choose a measure of inflation, core pce, which is fairly lagging or certainly low for a lot of various reasons.

if you take some broader measures like gdp, which 100 years ago, that was the inflation measure that we used, the gdp deflator. that is over 2%. so inflation is moving higher. is it problematic? is this the 1970's? not at all. the disinflation period for the economy as far as this cycle is concerned is over. >> real quickly, is the yield curve inversion concern a bit overdone right now? are we going to quickly reverse? steven: it's very much overdone. if you look through the 1990's in that middle part of the theysion, the good years, traded 50 basis points fairly consistently. the idea that they have to be a spread of 80 basis points is really more period of just andng out of recession,

when the fed is trying to basically put money in the banks , which is what a very steep curve does. 40 basis point spread, that's not inverted. is surelyoint spread normal at this level of rates. could even though a little flatter. the economy will do just fine. the level of interest rates at this point, whether you are looking at real or nominal, is not a constraint on growth here. there are other constraints on growth about a sense of confidence, about the world arelf, but interest rates not standing in the way. in fact, if anything, what the fed wants to do is at least get them even with the economy, so very smartt causing people to do dumb things with money. yvonne: glad you are enjoying it there. joining us. users can interact with the chart using to tv .

you can catch up on key analysis and save those charts for your future reference, so pretty cool function. make sure to check it out. this is bloomberg. ♪

betty: a quick check of the latest business flash headlines at this hour. facebook has been explaining why it collects data from people who are not users. mark zuckerberg told congress it was based on security reasons. the company has expanded on that answer. it says other sites and apps use its services and send back information with details of everyone, not just facebook users. the company says that because other sites and apps do not know who is using facebook. yvonne: general electric fell the most on the dow. it put the forecast at risk. joe ritchie said and outlook cut is almost certain and could come in the first quarter report this

week. jpmorgan said it also expects ge to lower its profit forecast. they restated 2016 and 2017 results last weekend that it saw no impacts to this year's forecast for coming up, a new milestone for bank of america sees its stocks or. we will unpack the latest earnings, next. ♪ retail.

under pressure like never before. and it's 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.

7:30 a.m. tuesday. ; 30 p.m. in new york. -- 7:30 p.m. in new york. i am betty liu in new york. yvonne: i am yvonne man in hong kong. you are watching "daybreak asia ." first word news now with jessica summers. jessica: president trump has overruled his own experts and accused china and russia of the evaluating the currency. that is despite the treasury's latest report saying neither country is a manipulator. he tweeted russia and china are

playing the currency devaluation game as the u.s. keeps raising interest rates. not acceptable. the president did not provide any evidence to substantiate his claim. from washington to the president have halted plans for new sanctions on russia. they also say he's unlikely to approve further moves about a new incident. the washington post site several sources for the decision was contradicts trump's u.n. ambassador. sanctions were coming and would be announced eminently. declare the plan as openly putative. trump suffered a setback as a federal judge rejected his request to prevent prosecutors seizing evidence. the white house went to court to block a review of materials taken from michael cohen on the basis of attorney-client privilege. the judge indicated she is leaning towards a so-called special master to consult on whether some documents are protected.

china's holdings with u.s. treasuries rose in february by the most in six months. that highlights the attraction of american asset despite a simmering trade standoff. beijing's ownership increased by $8.5 billion to almost one point $2 trillion according to official data. china remains america's largest foreign creditor followed by japan. holdings dropped slightly in january. global news, 24 hours a day, on the air, powered by more than 2700 journalists and analysts in more than 120 countries. and jessica summers. this is bloomberg. yvonne: thank you. let's get more on what we should be watching as trading gets underway in asia with our bloomberg global markets editor, adam haigh, who joins us from sydney. looks like we got a mixed start ahead in asia today. china data will be the big event later. seems like it is getting harder to separate the noise to what really matters to investors now. what are you watching in particular here to see whether the markets have calmed down?

adam: yvonne, of course what we have seen in the equity market is a gradual decline back in volatility over the last few weeks after the initial spike in late january, early february. more broadly than that, a very interesting level of market stress indicator, which you can find on gtv. this is the bank of america merrill lynch market risk indicator. it shows a number of inputs across many different markets. it shows generally a drop-down away from those kind of elevated levels we saw midway through the first quarter. a lot of the market turmoil largely shaken out now. global money managers, you are hearing a common refrain. a little bit of evaluation reset is incremental. people are wanting to take on more risk. indicated, very indicative

of the fact that there is money wanting to get back to work in the market. global growth remains, largely speaking, intact. those worries we had around inflation in the early part of the year have largely gone away. it will be interesting to hear what john williams, the incoming new york fed president, says later on today, because any kind of hit around a more hawkish the towards his view on u.s. economy will be very closely scrutinized, especially by bond market investors. for now, equity markets are looking like they have some stability after the initial turmoil we saw in the first three months of the year. yvonne: one feature of the earnings season has been the rosy profit picture from individual companies. that's not causing these positive share price reactions, so what is the matter here? our expectations too high? adam: what we're seeing here is fairly remarkable and quite unusual for the u.s. earnings

season. we are still early days. we are only a few days into the earnings season. data we have to the end of friday incorporates 29 companies, and that showed us that even companies that we are beating on earnings numbers, we see a negative share price reaction. in some cases, not a huge selloff. even with an earnings beat, not seeing positive share price reactions, which speaks to an expectations being very high going into this earnings season, and also, the valuation argument now, given where this will run is after nine years in the u.s., as this chart shows in your library on the terminal, it really is a tricky environment with ratios having pushed up significantly in the sport run. expectations are already high going into this season. we need to see blowout numbers for gains. we saw netflix in that camp on

monday. good numbers. good share price reaction. across the board, it's getting tougher and tougher, and a higher bar to be. betty: adam haigh, our bloomberg global markets editor. we will bring the latest check on china because we will be counting down to the first quarter gdp numbers, expected to underline continuing growth. robust growth in china. nowmackenzie joining us from beijing. tom, in a few hours, what is expected in these numbers? see we are expecting to 6.8%. that is what the survey is telling us. that would be in line with the previous recorders of growth in china. of course, in the context, you saw growth of 6.9%, above many of the forecasts. this is about 6.5% growth. he gets a 6.8% growth in the first quarter, of course, and that with them while on the way towards that.

what we are seeing is pretty strong domestic demand. the consumer is bullish. we will see the retail sales same time.around the 10:00 hong kong time. we are expecting retail well to take up 9.7%. you have the global demand picture as well. consumers in europe and the u.s. buying exports out of china amidst these trade tensions. and then, of course, continuing infrastructure spending as well, which is continuing to repel some of the growth we are seeing here in china. we heard from the pboc governor last week saying that the early indicators suggested that first quarter growth was going to surprise the upside. he is bullish on the outlook for china's growth. these numbers. first quarter gdp and retail sales and fixed asset investment . a whole host of data out at 10:00 local time.

>> the question of course is how much longer this can last. the robust growth that we have seen. take a look at the potential headwinds coming through the rest of the year. of course, it is the critical battles that president she wants to -- xi have to battle which will be deck control, pollution cleanup, and the traits that with the u.s. to worry about. absolutely. the three critical battles. pollution -- it's another polluted day in beijing. i was wearing my facemask before we went on air. 250% debt tover gdp. that remains a crucial issue. that debt part is growing as china continues to try to ratchet down financial risk. there will be debt put on top of that pile at a slower rate your there is a focus on poverty that president she has made a priority as well. that could potentially be a drag on growth of 2018. we have the real estate sector. don't forget about that one. they struck something of a goldilocks balance in terms of

taking some of the heat out of the top-tier city prices and selling down some of the inventory in the smaller cities. look at the property developers. they are under pressure. some of the bonds are likely to mature this year. bondsbillion worth of maturing this year for the property developers. that's a record. real estate is a pressure as well as the trade tensions that are front and center of the focus for many watching china and the u.s.. tom, thank you. look ahead to those numbers in just a couple hours time. tom mackenzie, our china correspondent in beijing. take a look at earnings. bank of america has had a new milestone in its years on effort to get cost under control. first quarter profit was a record 6.9 billion dollars. that's a 30% increase year on year. brian moynihan had this to say on a conference call with analysts. , we madeike last year money every day in the first

quarter in the global markets business despite the pickup in volatility. >> for more, ramy inocencio walks us through the successes of the u.s.'s second-largest bank. ramy: basically, bank of america is looking at three pillars that are supporting it. one is a jump in equity trading. another one is cost cuts that brian moynihan has been on this >> over. thee are the tax cuts in united states that have been helping bank of america as well as a bunch of other companies here. let's go to the tax cuts. investors really are happy about this. the magic number is 60%. let's flip the screen. i will show you exactly what i want you to see. the blue bar chart you're looking at is the 60% line. the last time it was there was more than five years ago. mr. moynihan clearly getting his cost under control under that $62 billion mark,

succeeding that joy glenn short over at ever core isi saying that this is the gift that will to this bankg posture price. bank of america up i-30 1% year on year. hop into the bloomberg. i want to show you my first terminal chart. you can see the yellow line in terms of the shares rising over the past year. the positive that investors are looking at is in the book , as i mentioned. equity trading revenue up year .n year by about 38% there is negativity in terms of the fixed trading. we are talking about this volatility which is not helping it down by 13%. when you look at the share price, up .5%. it did spike by 2%, pulling back just a little bit. >> one interest in moving that stock was that it declined in the beginning, right at the

open, and it made its way back up. what do you read into that? adam: volatility as it always is in the market. one of the biggest ones is in terms of growth. i wanted to show you the loan growth not just for bank of forica, and purple, but jpmorgan, citibank, as well as wells fargo. 2.4%oan growth is falling for this most recent quarter. we can see it is flat for jpmorgan here in white. it is still in contraction phase for wells fargo. up just by a little bit, but still under the zero marked and. the mortgage sees that these banks are actually getting, in particular, bank of america merrill lynch, is also falling. i have got one interesting chart. i will bring that up. take a look at what is happening in terms of the past several years. back in 2009, you can see production revenue as well as servicing revenue was nearing $2 billion for each, but in 2017,

look at that. it's almost nothing. the loan fees are being lumped into the other category, betty. on the whole, investors still are positive. i to go look at the functions. a whole lot of cells -- no sells, and a whole lot of buys. >> that would be more in my with what we usually see. thank you so much, ramy inocencio. i want to bring in another guest. forward-looking projections. what did you make of the stock as ramy just mentioned,? what does that tell you about the financial sector? >> with all of the banks, we have seen these massive upward revisions for both eps and revenue. obviously, this quarter, it seems like they are going to get the one-time boost to the equity trading.

fixed income across the board. technology continues to cut away at that business, so i think, when you look at the reaction to wells fargo, bank of america, j.p. morgan, stock opened higher, and they all closed a lot lower. this is what we call an outside reversal. it's usually not good for the next couple weeks to months of the stock. i think high expectations were baked in. there was not a lot that people were surprised about, in a sense, so they sold the socks off. betty: they will have to continue to beat higher and higher estimates. >> i think what they need to in a market the vol that produced the equities trading revenue, which allowed them to put up these good numbers where you saw the upward revision, that cannot be a one-time thing. yes, the tax cuts are great for these companies, obviously. that will continue on. there has got to be a little bit more there in order to get these stocks moving more. loan growth

struggles, we have seen that with all the banks good for bank of america, they were more worse off in their rivals -- than their rivals. they moynihan was saying retreated from some of the more risky areas of lending. we talked about the mortgage space. they have not followed others when it comes to the credit card business as well. is there such a thing as being too conservative for bank of america? the banks are falling back on the not do anything wrong with the tax cuts we received, with the general economic environment. it's obviously very strong in the u.s.. it was the don't screw up phase. stick around. we are going to talk more about the tech earnings like netflix coming up next. coming up next, netflix posting the strongest start since going public 16 years ago. what's driving subscriber growth. this is bloomberg. ♪

yvonne: this is "daybreak asia." miami yvonne man in hong kong. betty: i am betty knew in new york -- betty liu in new york. subscriber growth forecast exceeding expectations. lucas shaw has that story in l.a. for us. concernsle, there was about the describe the numbers. what happened here? what was the big surprise about? >> momentum, at this point. netflix would have big swings after earnings. rowpast four quarters in a have exceeded by a big margin, and the company seems to talk it up to this idea that they continue to deliver shows people want to watch and they created a streaming experience that a lot of people have taken to. the more people who sign up, more people get into the idea

that this is something they have to have which is equal to or better than what they are paying for video. calling out individual shows. they don't call out individual territories. they don't call for a tremendous amount of detail as to why it is growing beyond the fact that internet tv is here and they are the leader. >> it has gone from a nice to have to a must-have. it seems like everyone has to have a subscription these days. let's address some of these concerns we heard about the rising cost of content. >> for now. you know, netflix can spend as much money as it wants on shows to get as it continues new subscribers. they are about to have negative free cash flow, go in and raise that, as long as it is funding content that is bringing in people. if the content stopped bringing in new customers, then they are not allowed to spend the way they are. to growth in their streaming content obligations was slater

smaller thaneen -- it has been. the acceleration will subside. muche: we talk about how they are spending when it comes to original programming, but you have done a lot of stories about how much they are spending on recruiting some of the big shot producers as well, like ryan murphy. how is that really compared to the rest of the tv industry? >> the amount of money that netflix will spend in any given year is comparable to the largest media companies in the world, the comcasts, the disneys. it is not just a movie studio, but if you are looking at disney disney add together the movie studio, abc network, free-form, espn, all of that, what disney spends and netflix spends a comparable. netflix is adding to it more than disney is on an annual

business. >> lucas shaw in los angeles. we want to bring in a ceo to talk about this. it seems like netflix is really the sweet spot right now, as loose this -- lucas has mentioned. at what point does this actually start to not sustain itself? >> i was at a conference in santa barbara about 3.5 years ago, where reed hastings was speaking. he gave this talk, and everyone looked at him a little cockeyed and said, does this guy really know what he's doing with the margins of his business? it seems like he was all over the place. when he puts out eps guidance, he nails it. he just put out an eps guidance number for next quarter that is above the top end of the consensus range. that the big eps number that he expects, and they have been able to hit it. he does not sand and those numbers. when he says that's what he's

, that's what he's done. he knows exactly where this business is going in the future. these are huge numbers. 2 million, over 2 million domestic subscribers added. over 5 million international subscribers added. the consensus has been rising all quarter. it was above the guidance number. he is going these numbers out of the water here. given the pace that they are adding shows to the platform, we don't see why, given expectations for future numbers, that those numbers will be wrong. yvonne: and we see that in the stock as well. i have a gtb chart that highlights this. put did not really catch that fang glu. it's up 60 -- fang ful. it's up 60% year to date. how much until investors start to care? leigh: a method is a shot, i don't

think you look at any company's growing as fast as netflix is, especially with the eps numbers that they are putting up. they are not going to have access to capital. i don't think investors will being them for that -- ding them for that anyway. betty: how do you value netflix? [laughter] betty: is it a tech company, a media company? that will lead you to believe whether it is overvalued or not, right? richly valued or not, right? i viewtom: i a -- leigh: netflix my gut you some other companies that are disruptors. you look at netflix and say, of all the market cap of the cable companies, other content companies, or generally just other companies that take people's time and attention, because attention in this economy is worth everything, worth a lot more than little physical goods -- betty: facebook most this very well. it, what netflix hits

does that do to all these other companies, and how much are you willing to pay to basically not owncomcast and others, but netflix, and that gives it the multiple that gives it? is there a reasonable way to do the relative value trade there ? no. pick a number and go with it. that is basically what the market has done. betty: what did you make of -- as yvonne was mentioning -- ngs, big tech companies, the volatile price swings? the momentum stocks, losing momentum, the crash, they went back up again, what do you make of that? leigh: what's funny is that when we speak of momentum stocks, we are normally speaking about mid and small cap technology names and consumer names. the funny part is if you look at those names, hub spot, zen desk, new relic, you know, those names have held up really, really

well. in fact, they are trading right at all-time highs here in spite of the headwinds. this was really a flu that was precipitated by facebook and the issues that it had. that it isthe fact such a large part of so many of these etf's, it tramped down a lot of those names, and they are highly correlated. when i look at the momentum names, are they healthy, it's incredibly healthy right now. facebook itself has obviously come down and is now significantly cheap. but the other ones up with the good. you're looking ahead to facebook, i guess, after these testimonies of mark zuckerberg. if they do not put up with the growth numbers as well, could we see another thing flu -- fang flu? leigh: the biggest things to look out are two things. is zuckerberg being honest about the fact that he is going to hit the margins of facebook in order to hire all these people that

supposedly are going to do the job that he says they are going to do? i find that to be probably not very honest. the other part of what he is saying is we are going to use ai to do all of this. i don't think sheryl sandberg will allow him to destroy the margins of this company because facebook trayvon eps. that if only one way you don't believe those two other things are going to happen, that you get a face-to-face -- hit to facebook dps. they cannotif give the people around and they start to see a significant exodus of domestic monthly and daily active users. we are not seeing that in the expectations on the estimized platform. be expectations could always wrong, but again, that is the expectation. and can they continue to drive increased -- they were able to raise prices 50% last quarter.

the expectation for this quarter is a plus 25% year-over-year rise. again, if those numbers hold true, you will not see any fall in the eps numbers or growth in the eps numbers, and i cannot see how investors take the multiple for this stop down unless you consider really -- considerably hit the number. betty: let's do a quick check. blocked from exploiting sensitive technologies in america. it faces allegations of misleading u.s. officials. the congress department has they made statements about disciplinary action in 2016 and 2017. authorities say the company did not disclose paying full bonuses to staff are engaged in illegal combat and failed to reprimand them. yvonne: gm has reportedly banned business trips to south korea where it faces possible bankruptcy. the nikkei news said earlier this month that union members entered the office of the gm

korea ceo and destroyed equipment after he moved to skip bonus payments. the union says management has told it that bankruptcy filing is likely if the deal cannot be struck on wages. much more ahead. this is bloomberg. ♪

>> we are low from the asian headquarters. welcome. market with aic mixed start. russia is labeled as currency manipulators. netflix is -- abe had a seat at the

with north korea to talk about the agenda. well, we focus on the big event here andve this chart it looks increasingly more positive when it comes to 2018. there looking to see chinese economy and you can tune out all of the noise about the cleanup andnancial the question is how long can this sustain until we see the

uncertainty. >> that is right and it gives a buffer or blunts the sharp and let's get to the news now. nominating richard fed vice chair. under georget bush. he is a columbia university ed -- or and would succe more than three hours spent just find the decision on u.s. by agreeing to schedule

the debate on tuesday. jeremy corbyn said she is accountable to parliament. russia is using computerized equipment to attack agencies. the department of homeland security, the fbi, and the british cybersecurity center warns of attacks from routers and say that businesses should make sure their passwords are secure. -- national guard says sinceard says that hundred 50 troops -- that 650 troops have been deployed and forpresident called

more than 4000. the national football league is taking action to protect players from brain injuries and is banning brain injuries from helmets. the players could have six remaininges and the may not be worn by new place. bybal news powered journalists and analysts. this is bloomberg. >> thank you. taking a look at the market opening here. latest.t the >> the people are switching to economic data. have these not too far off

this is afterand they called for the dividends and gains ground. agrees swinging at the start of the session and this is as abe is

and currency issues. we have a final look at the outlook for midday. now, we see that there are in control of the dollar and you can check out this chart and this is struggling to break indicator.his is the it was entrenched in this currency markets and this has recent gains and this comment may signal the possibility of extra tariffs on china. this would drive markets today. >> thank you so much. we mentioned the first quarter gdp report, that is due

in a couple of hours of time. now to the people standing by in beijing. this around the first quarter, right? >> this is in line with the previous quarters of growth and putting this in line for those hasets and the government you are seeing some strong domestic and global stressesd strains and as well as the continuing crack leverage.sk and you are also seeing strong and itructure spending

remains a thing that is a supported factor here. governor says that these economic numbers have him and therelish on this andhat trading relationship the most recent tweet and the valuation. there are concerns about the theerty sector and you have priorities of tackling poverty, pollution, and the debt and the drag that will have on the economy. that are the headwinds and

is all around 10:00 local time. >> stay with us here. great to see you. it is no surprise that we will data beingth the pmi pretty robust. does this give enough room? the thewas strong and weakness in retail sales. it is really about the numbers

now. this has been a key support and we have seen some of this softening. are you seeing more of a marginal slowdown? >> the risk is over the tightening and financial conditions with the government k the financial sector, but it is hard to calibrate. it could be something that they there isten and weakness coming through.

there is not so much consumption of private investment. >> let's talk about the leveraging campaign with lifelines and the with the cash flow's and how they have those rates? on the demand side, the government offices made it clear that they want to curb mortgage lending growth. this be a signal that the government can handle this?

>> this is the financial system implications and it wouldn't the surprising and would be surprising if there was more details coming through. >> taking the step back here and looking at some of the numbers that we have had on the treasury holdings, i want to point out the chart that we have showed and have they kept the treasury holdings. your takees to get massive amount of u.s. treasuries. >> investing reserves in u.s.

treasuries is smart strategy would --t was leaked , more to the and something that was outside the realm of the accepted and the trade disputes resolve around market access and using this is a step that is uncharacteristically china because it takes the dispute into a different realm. >> would you say it is the same for movement on the currency? you could have the argument

therehe weaker dollar and was a sense that this was a great opportunity to liberalize the currency and the long-term alternative to the u.s. dollar. you'll will want to keep this currency relatively stable and reduce the access and that is what they are doing. in longese think cycles. that will change overnight. we talk about the options for -- a and it seems like we see this more and further

escalation's when it comes to president trump. in light of this, they could moving out of are likely to do make this more on these ofunds and the number students is a financial boon and there were a number of unofficial steps and it is the

most likely option. we are still waiting to see the thisls on that and threatens $100 billion and they have made it clear that they will fight until the end. , in terms of the risk around the chinese economy and what your views are. when did you get concerned about consumer debt levels. curves seen continuing on the property sector and, at becomeint do you concerned about the household that in china. >> the household debt has

increased sharply. concerned about the property market and these been very well financed and there is another issue of consumer credit for car purchases and other goods with regulation really starting to it is the curbs on household consumer credit and a this down and this could cool down consumer lending and have a more meaningful impact on economic growth over

the next six months or so, as the government tightens the regulations. >> stay with us and we'll talk more about growth. with more to come on daybreak: asia: asia. this is bloomberg. sia. this is bloomberg.

>> this is daybreak. etty.b talk to me about global growth because it seems like a solid footing, but the data has seen a bit of a softening in the numbers. how do you forecast for growth? one of these were calling and

trade may likely suffer. signaling something deeper or is this temporary breathing? and you thinke and ithe fiscal stimulus is still above 6.5% and the rates are low globally. there is something more structural going on. >> do you think that this is sped up the end of the cycle? we have seen the equities and most of these measures haven't implemented yet, but they will not derail the global growth, per se.

if i were to forecast the next quarters, it would not impact numbers too much. impact the will this growth of normalization of asian banks? what is your take on that? decoupling go in jan and i know that we use that have theion, but we monetary authority and this raising interest rates wille look the on this and they raise the rates necessarily? it does not look like we have been inflation problem here.

>> it does not. what are the chances of a challenge or a headwind there and the possibility that we see the inflation effects start to go through. and wagek closely growth matters are subdued. higher oil prices and nothing has really changed. this is really what happens at the long end of the curve and this really insulates asia from the rising information. sharp steepening in

the yield curve and that could put pressure on financial situations. >> are the higher rates coming to hong kong? >> that is what they are doing and how the peg works. knowledge -- nudge up and that is the process we are seeing. it is the way to drain the liquidity away from hong kong. interact with these charts and catch up on the key analysis and save the charts for future reference. make sure to check those out. this is bloomberg.

>> a quick check of the headlines. zuckerberg said that there were company reasons and the expand on the answers. it sends back information with details on everyone and other websites that asked do not know who is using facebook. restatedachs financials and a put the profits forecast at risk. morgan saidj.p. they expect a lower profit forecast.

they had no impact in the forecast. and it is on a tear the strongest start of the year since going public. this is bloomberg.

>> it is the opening of trading there and we have some breaking domestic exports missing estimates and they are down year on year. andis cv contraction here these exports are falling for a fourth straight month and this is a little less than what we february and we continue to see some further deterioration, but we saw this policy tightening and this

certainly could just be a seasonal effect and we will have .o see how this plays out >> i was just about to say that and youeen revised down mentioned the tightening that we seeing we are clearly economies on that tightening from frede heard newman earlier that this does not feel like a huge tightening path, but let's get the market reaction to these numbers and we have -- standing by. dollar,ing about the they are focusing more on what

happened last week when they indicated the tightening path and we have this set for a third day of gains, even with the data missing expectations and you can take a look at the broader move highlights andis spi goes up on discretionary stocks with the aussie dollar and gains of half a percent. ground andaining let's check on the board to see this rise the most in two months performers the best

that is over 9% and a cancer drug solidified the lead. motor gained ground. now, let's look at the aluminum they will be forced to cut the production on this space later with the hong kong open's. >> all right. thank you. overruled his own experts and accused china and devaluing currency

and saying neither are manipulating, while they are ing the currency. the president has halted plans for sanctions on russia and says he will not approve further moves without a major new incident and the washington post many sources. nikki haley said that sanctions were coming and they would he announced and moscow condemned the plan as punitive. china treasuries rose and attracted american assets, despite the simmering trade standoff. largestmains america's

foreign creditor. news 24 hours a day powered by toys of hundred journalists and analysts. >> a setback in the plan to protect president trump cause personal lawyer. the white house was trying to block the materials taken from michael cohen. how significant is this? is an initial hearing and it involved three hours of ,rguments and it is a set though there will be a back and forth.

they want to keep this on the hands of prosecutors. >> does this have implications when it comes to the robert mueller investigation? >> this is what is important about this. the investigation is getting closer to trump and those who are close to him. this is a person who has a great deal of evidence and electronics and the president is very angry eted about and twe this. now people are wondering if it makes him more likely to fire robert mueller from continuing the investigation. amonghas been speculated many that he has tried to do this. what are the implications

here for the president? a lawyer with whom he has had andidential communications we have the investigation with russian involvement with there is theand president's person -- personal what he will try to do next is a lot of this.

how much closer is that? the judge in the case allowed the defense team to have access to all of this and we will see courto back and forth in and this is certainly not the end of this. this is the beginning of the hearing. she had a lawyer. does the white house have a more cozy relationship with fox news van we thought? >> it is interesting. and seanity's lawyer lot in support

of the president and has talked about this case and this raid and it is all very interesting. >> thank you. the japanese minister is talking with trump and his approval ratings are going to new lows at home. story.north-asia are we getting closer to a danger zone for the prime minister? >> absolutely. yes. is here and he is definitely slipping and we that helways remember has bounced back from slumps and

we should see if he does this again. >> what are some of the options here? it is kind of ironic that the numbers are fading as trump seems to have his numbers going up. >> yes, indeed. had several he has ways to get out of this. he could bide his time and wait for the other scandal to go over and another scandal could become hard and he had a very -- enient the public seemed to back this and hereroblem is

he has to get to where he was on japan. likeis certainly seems north korea is at the top of the agenda and the closed second would be trade. does he need a large win? >> he needs something. japan in attacked recent weeks and it has been an interesting discussion with trump now considering going back to the tpp and other countries say they will not renegotiate just to let the u.s. back in and i think he needs something small

to get the momentum going again. >> thank you so much. we are going to leave it there. posted its strongest start in a year since going public. technology reporter, selina wang, had more. andhis was a blockbuster they posted the strongest start since the company went public. investors are pushing the shares of after they said they added more subscribers and we are seeing the revenue grow at the fastest pace in the history. has the pricing power. the company is also going to spend on original content and

the company already releases more movies in any studio and netflix says that it will release 700 pieces of original a concernis year and the investors may have is the this has lifted it woulde sector and rise slightly. coming up next, we have additional sanctions on russia on hold, contradicting trumps u.n. ambassador. this is bloomberg.

>> this is daybreak. trump reportedly blocked additional sanctions on russia for the role in the syrian chemical attack. in the sanctioned leader. andrly, the expert here this is bizarre today. is the rebuttal from the administration today. vs.s pretty of

vious.is pretty ob taken a hit and some designated companies have lost 50% of the value and this will have an impact on the russian economy beyond the anticipated targets and there is a balance. happen.tions >> does this indicate to you that the president thinks he can negotiate his way directly with vladimir putin on this? >> the strategy is obviously that there is not a strategy and you can take the lessons learned from north korea and what the administration did was not effective in bringing them to a summit. this could potentially bring them to the negotiating table and the challenge is the different reasons the sanctions

are in place. >> right. these ares of interesting. with these be even more effective? >> you are starting to see an and this the allies will have an impact. this is different. russia, we are talking about things tied to crimea, spot poisoning, and a lot to unpack to see what would bring sanctions really. this is different. there has been so much applied to them and i don't think it is as straightforward as other

programs. >> then, there is a question about how these could work, if europe won't be in the same line . >> you saw of the multilateral approach to getting rid of the diplomats in the u.s. and this is definitely unilateral and has created some concern around the european community for what this roadshow this is a across the u.k. and europe beginning to explain to them the merits with the associated entities. there is some nervousness around with the next step could be and it is not clear what the relief look like. >> take a look at the price of oil, which has surged, as of

late. >> the next to step to hurt moscow is to apply secondary sanctions and this can happen and applies to non-u.s. companies. in doing choice business with the target in question and this has pulled iran to the negotiation table this tould suspect drive the behavioral change. that nikkio imagine haley, who said that there would be additional sanctions, what would that do to her credibility the next time she comes out with more threats like that?

this has been and am printable administration. >> so this is par for the course? i this is the reverse and think that there has to be a measured approach to sanctions. essentially, since the april 6 designated, there has not been any further issues that could potentially be that event and you are seeing more episodes and whether that falls into a definition of an event. what is the next to step? this is not as simple as the individuals and entities.

list.as a non-exhaustive these are also blocked from ofities and there is a lot due diligence that has to be done to understand these counterparties. >> thank you so much. you can see this live and catch up on the past interviews. plus, you can become part of the conversation by sending us instant messages. this is bloomberg.

>> this is daybreak. >> now, a check of the business headlines. saidhinese telecom has that they are co-operating with the authorities. making falsesed of

statements on the disciplinary action. they did not disclose paying the full bonuses and failed to recommend. reportedly banned theyusiness trips and destroyed the equipment and moved. bankruptcyhat the filing can't be struck on wages. >> this and they want to roll electric free-wheeled rickshaws in the year. this is in discussions with governments and automakers. most will be electric-powered by

2030. and see what they are looking to with the bloomberg markets this avalanche and data. there are a couple of welysts and strategists and will be joined to have a look at what is in the cards in over an thumbs-up or and thumbs down. with donaldg on trump and north korea? we will have a look at that and go to the moment.

damage control and what that is all about right now. strategy and we will talk about all of these things. we will be joined in about 1.5 hours from now. is what this is all about, those big numbers from china, growth, retail sales, and industrial production. >> we are going to watch those it looks like the markets and this ishigher bloomberg.

this wi-fi is fast. i know! i know! i know! i know! when did brian move back in? brian's back? he doesn't get my room. he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is simple, easy, awesome. in many cultures, young men would stay with their families until their 40's.

>> also looking after those growth numbers. spending trading in hong kong and banned from exporting tech. accused of misleading officials and making false statements. president trump stoking the fires again. saying china and russia are currency manipulation. >> pimco is reaching -- is put forward. we take a look at what qua