we're live from bloomberg's asian headquarters. welcome. the top stories, pacific it equity is set to gain after trade resumes after mayday. treasuries fell. apple is hopping after hours and what they describe as a sensational quarter. are $61 billion. are $61 billion. arey: and snapchat chairs stumbling. users did not like the new redesigned. and zuckerberg is striking and

tone, facebook is entering the dating game. ♪ breaking inflation data coming out from south korea. we have been getting dismal numbers, particularly in the export side. numbers are just in line with what estimates showed, cpa data your point year. core cpi coming in 1.4%. these numbers are not likely to change. that should eject or a people expect, to stay on hold with interest rates. yvonne: it seems like that is the case. we are far from the target which we reached late last year.

dismalrounding out numbers when it came to export, pmi data. if it were not for the dividend that we see, the korean markets would be looking different. betty: who would've thought north korea might be the one helping the markets? speaking about the market here eyes in.s., lots of asia are on the apple results. it was a limp session at the end, the dow down 64 points. updaq is powering ahead, 9/10 of 1%. a late dayking recovery. apple is still in the spotlight. a bit of competition from snap, which is making headlines for

different reasons. su keenan has more. we have apple up in a big way. a lot of people are asking questions. what is next for the market? let's go to the snapshot. we have the dollar moving higher. you saw some weakness in treasuriesurs but are grinding lower and commodities are hurt by the stronger dollar. let's go into the chart. data oneak economic factory activity. industrials had are even week going into this. look at this down market here. that tells the story. last week the industrials tumbled more than 3%.

it was a week sector in the tuesday sector. let's go to the big map movers. you get a mix of what was moving higher and lower. apple was a big mover late in the day. the former company coach. they make the handbags. kate spade is having trouble. ditto with the shoe company. higher. moving ity have some software and -- software aimed at drones. and now, to apple. the story is a good one. sales came in strong. the ceo got on the conference call. analysts asked some tough questions. one thing he said is very bullish on china and the opportunities there. snap is a different story. i redesign caused a lot of the users to flee and investors

flight as well. a big disappointment for snap. that likely follows through in a wednesday session. about: let's talk more the strength of the dollar. it has been on a tear this month. metals, particularly, but also oil. what you are seeing again, we are talking about a breaking above a three month range. the dollar had been lower, coming on strong, it was one of the latest -- one of the stockist we have seen in more than a week. with oil, traders are anticipating a buildup in oil supply in the wednesday data report, there is the stronger dollar and that is creating risk. metals, also lower. yvonne: thank you.

today is the first day in the whole week where markets in asia are open this morning. we could be reacting to some of the trade headlines when it comes to delegations heading to beijing. in be seen -- in new zealand, we are seeing gains. dollar about the kiwi deescalate's the edition. in australia, we saw futures looking positive. ,he aussie dollar going nowhere yields ticking higher on the aussie 10 yields. the key will be the asx. can we hold above the 6000 line? it looks like we see 30 points up when it looks to stop futures 109.90, we are

inching towards 110 territory for the dollar-yen. just joins us for the first word news. jess: the eu is warning of growing market and certainty following the u.s. decision to delay tariffs for another month, just hours before temporary leave was about to expire, the trump administration said they will allow another 30 days for negotiation. and washington insists progress is being made. >> we are having very productive discussions and are hopeful we can come to a mutual agreeable resolution that will protect the national interest and natural -- national security. jess: steve mnuchin will be fored by robert lighthizer

a triple that they say will be a big challenge. he said the chinese were -- chinese system has worked for them but not for the u.s. and it would be good if the problem could be managed to suit everyone. belgiumalks resume in with the u.k. per boozing new plan for the irish border. david davis says he wants to move quickly and avoiding a hard-line when the split happens next year. south korea has begun dismantling loudspeakers in the d miller ties zone that were used to hurl western propaganda into the north. theoudspeakers in demilitarized zone that were used to hurl western propaganda into the north. global news 24 hours a day, powered by more than 2700

journalists and analysts in more than 120 countries. this is bloomberg. betty: apple jumped in extended trading after second-quarter .evenue rose 16% more than $600 billion. the company sold more than 52 million iphones even though the average price did fall. the report revenue is better than what analysts expected. alice, when it comes to the iphone x, the key focus for investors, do you think all of gloom when it comes to their suppliers, was overdone? there is huge relief after the forecast for the current quarter.

at the problem still is that the unit growth sales are not growing that much, only 3% year-over-year. the iphone x has really helped. it was not the super cycle megahit they were hoping for, but the higher price has really helped. unit sales are only up 3% but based on revenue, the revenue is up 14% because of the higher prices. trying to find ways to grow. when it came to the asp, we saw some movement here towards the cheaper phones. what will be the strategy for apple moving forward in terms of pricing? will they have to move the iphone more aggressively and take lower margins, or can they remain in the high and? : i think the strategy

will be broad. it will be an iphone for different budgets. tim cook spoke a lot on the conference call about china and how great the outlook is there, but he also mentioned india, very is a market where cheap smartphones have done very well. so apple has an iphone model that you can still buy today that is based on a couple of your old technology. they may come out with a new version of that. xd also with three new iphone type phones. if you really want to spend $1200 on an iphone, you can do that, but there will be iphones better priced all the way down to about $400. betty: does this underscore the point that apple is so dependent investorsone that

judge the company and the stock price solely on the iphone? alastair: there are a lot of products and services that apple is putting out but they'll work best with the iphone. services that they have been doing lately, it is funneled through the iphone, so if that is the case, the company really has to brought in that product. you cannot just have one or two iphones and hope everybody buys them. to create a broader sweep of the smartphones. thank you so much. apple's earnings headlines today's edition of daybreak. and alsotv our bloomberg app.

still ahead, we will look at the other earnings that are out today. snap is sliding after hours of disappointing sales following a big app redesign. yvonne: u.s. allies push back after temporary tail it -- temporary tariffs. this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia." the european union and is were is warning of growing market uncertainty after the steel and aluminum tariffs are postponed for another month. greg a, we weren't highly anticipating this announcement of who was going to get released. why did the president postpone the tariffs?

greg: the administration announced to policies. they temporarily delayed the and steel. aluminum they also said they were lifting the levy for australia, argentina, and brazil. the white house did not say why they were temporarily extending the delay. said thatabee sanders the white house saw progress and they just needed more time. so perhaps they are trying to use it as a negotiating technique and some of the other things that are going on right now on the trade front. that remains unclear. there are a lot of questions. what about the international response? greg: the first thing to note is

that every country is seeking a permanent exemption from the levees. nobody wants the levees on steel and aluminum, especially not canada and mexico. for them, they did not get the permanent exemption. the eu has been pretty clear that they see these tariffs as illegal. they have threatened to retaliate and at times a have threatened to retaliate on iconic american goods like kentucky were given or harley davidson motorcycles. said -- angelael merkel said they certainly expect it. theresa may said the u.k. raised concerns over what would happen to global trade given the tariffs. so it is been pushed back. betty: a little bit of relief

when it comes to how temporary these sanctions are. it seems there is still a lot of uncertainty and things up and takes down the road. so the administration has a lot on their plate internationally. they wait for this big delegation to head to beijing led by steve mnuchin. what is the latest? heading to china this week to talk about trade issues and talk about uncertainty. they took to the air today to downplay expectations. the u.s. trade representative light heiser said they are facing big challenges. officials talked about the long to deal of learning with each other, these two major economies trying to negotiate and talk. they talked about the big challenges over what they see as

china's unfair treatment in trade practices with the u.s.. mnuchin said he was cautiously optimistic. i do not think we are looking for a major announcement out of beijing with these trade talks. it's and like the beginning of a long road. yvonne: greg, thank you. let's go back to the markets. mixed day on wall street after apple led a late afternoon rally. the dollar gained and treasury fell. investors are now looking ahead to the fed policy decision. we are joined by michael jones. it seems like stock is coming up before no reason with apple earnings. what do you think is the biggest catalyst for things to turn? interpreted light has

are's comments as hopeful and optimistic that they are going to get to china and accept the deal. when you think about the three things weighing on the market, the potential for a trade war, nafta breaking up, rising rates, and the potential rolling over in growth, the thing that is really weighing the most heavily is trade. when the market tends to swing the most violently on every new piece of news. yvonne: in terms of conviction, we do not see investors jumping to reenter the market. stocks are falling. apple is an exception. now we have bonds and equities moving in tandem. so we have to throw some of these established patterns out the window. toyou think we're heading the end of the cycle or is still there an opportunity to buy on this weakness?

>> i think this is an opportunity to buy on the weakness. the most important thing holding back the market, and the biggest explanation for the slowdown in global growth, is this uncertainty over trade. as i published a couple weeks ago, i believe the odds of a positive resolution have gone up dramatically in the last few weeks. put some she -- xi really big concessions on the table that if the trump administration accepts it, they can claim a pretty big victory. i think the upcoming summit with north korea gives them a big incentive to go ahead and put this behind them. it but the deadline on things because that summit will go a lot better with chinese cooperation. i think you could even see the delay in the tariffs as another sign that they see imminent resolution of some of these trade disputes.

they kicked it the road 30 days. , think they are hoping remember that the condition for relief on the steel and aluminum tariffs is cooperation and negotiations with china. so i think they are keeping pressure on our trading partners and allies for a finer -- final round of negotiations. then they can declare victory and go home. that scenario, does the fed stay on its path? , i'm afraid so. i look at the gdp data and i see nothing but bad stuff for bond markets. the growth slowdown is very temporary and will reverse in the second quarter. some of the inflation data and employment data, the fed has to be concerned. i think it is more likely they do for increases this year instead of three. idle think the ten-year treasury

is priced for that and i think we could see a 3.5% ten-year treasury by the end of the year. on a final note on the , what will you be parsing through tomorrow's remarks for? is their language about transitory weakness and consumer spending during the first quarter? that would be a red flag for me. i want to see how much emphasis are they playing on the recent inflationary data that has spiked up. i think that is a likely outcome in that statement. i want to reassure people, in my opinion, higher interest rates are not a threat to the equity markets. historically, when 10-year has gone to three to four, equities have rallied because higher the 2, 3,increase in

4 zone, says the global economy is healing from something really bad, that is the only reason rates were ever 2%, and the stronger growth is more important to equity investors. we are going to leave it there. michael jones, thank you so much for your outlook on the market. special coverage of the latest fed rate decision tomorrow. join us then for that coverage. this is bloomberg. ♪

betty: sprint and t-mobile are said to have stated their case for a merger in front of the fcc. we are told they laid out the reason for the buyout based on the announcement the companies presented on april 29.

the deal needs approval from the sec and must clear antitrust hurdles at the justice department. the proposed merger four years ago was rejected. and dramatic sales decline in for nissans. the only four-door lincoln that drivers bought was the gt. $400,000 supercar that sold in small volumes. hutne: young china's pizza was not helped last quarter. the disappointing results in shares down as much as 10% after hours in new york. young china has struggled to attract younger diners to pizza hut.

-- facebook editors enter facebook enters the dating game. this is bloomberg. ♪ 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. yvonne: take a look at this shot outside the victoria harbour. we are getting back into the swing of things with markets reopening in hong kong back from the mayday holiday and now 30 minutes away from the market open. p.m. here in7:30 new york where markets closed mostly higher after a rough session. i am betty liu in new york. yvonne: you are watching "bloomberg daybreak: asia." now let's get some first word news with jessica summers. jessica: prices continue to rise

on supply constraints and fears of trade tariffs. the factory and a to 57.3. the production measure dropped from 61 to 57 point two. that is the lowest since november of 20 -- of 2016 biggest decline in the year. u.k. manufacturing slowed more per expected in april area performance continues. pmi came in at 53.9. that is worse than economists had forecast. opec continues to overdeliver on production cuts. cartel pumps the 31 point 8 million barrels a

day. and prices fell the most in more than three weeks as the dollar strengthened and traders that on another rise in u.s. stockpiles. it has been revealed that the investigation into alleged collection -- corruption in malaysia includes a fish in oil producer petra saudi. two people are suspected of criminal mismanagement, fraud, and money laundering. authorities are looking into allegations that more than $3 billion was diverted from 1mdb. the world health organization says toxic air that to the early deaths of 7 million people in 2015. a new study says nine of 10 people around the planet face dangerously high levels of pollutants which can cause cancer, cardiovascular diseases. it was worst in southeast asia.

global news 24 hours a day, powered by more than 2700 and analysts in more than 120 countries. this is bloomberg. yvonne: we're counting down to the open in tokyo, city, and soul. --seoul. apple earnings will be the focus. the tech giant powered through concerns about the iphone x. and the metals market will see some actions with the u.s. market delays. on the board, we are looking at a mixed start across the region.

some stock stories to keep an eye on, including qantas and softbank on the back of the sprint t-mobile urge her. we are keeping an eye on nissan stock after a 28% drop in sales last month. analyst put it, our highs are bottoming out here with nissans performance. yvonne: the dollar keeps rolling. there are still dividing opinions on where to go next for the greenback. sophie: chart watchers are not sure when you look at the landscape. out, we have the average jumping into the turbo just to see the visualization. the u.s. dollar index is now above that line for the first time since may 2017. willanticipate that this

set the groundwork for a .wo-part 5% value this quarter we have rising treasury yields and expectations. fargo, the rebound is being seen as a correction. that is forecasting a renewed decline ahead. a number of strategist note every can sell us this -- consensus has a plied has an implied short dollar value. betty: tech is the focus of the week with eagerly awaited earnings. we had facebook and snap both breaking hearts.

remy has the details. remy: breaking hearts for both of the companies. facebook is heartbroken because of its competitors match and iac. facebook is getting into the online dating scene. of ising i was thinking that when i saw this headline, i thought, wait a minute. after the security and privacy issues, why would someone want to give even more information to facebook? priceoking at the share for facebook, it closed up 1%. in terms of competitors, those slid a lot. let's head to the bloomberg terminal guide which shows you of share price plunged match. match is the biggest online dating company in the world.

its parent company down 19%. fallwas matches worst ever. is opt in only, it is text only, see you can't send photos, so will be safe. and you can potentially meet people face-to-face after you opt in. first you have to opt in. people will not really know that this is something you are looking for. so from what i understand, let's say you and i are facebook friends. let's say you are in the mood for love. you are looking for someone to date. there would be a little heart apparently over your profile. peered up or be introduced to me because we are already friends. you would only be introduced to non-friend.

so i would have to unfriend you on facebook if we wanted to go on a date. it is complicated but fun. match, the ceo is not happy. let me walk you through some of the lines. said she isceo, she flattered that facebook is coming in but that she is surprised at the cot -- timing, given the amount of personal data, etc. saying, come on in, the water is warm. the product could be great for the u.s. russia relationship. betty: ouch. and the response on snap, their ofnings, it seems a lot

investors are not really thrilled with this redesign on their app. what is going on? plunged byhare price 15%. there was a miss in revenue, in eps, in daily active users. back in my bloomberg terminal, i want to show you a snapshot related to revenue growth areas we can see it basically falling , 54% was the growth here. second quarter said is not going to come in as good as they expected. chart, daily active users, 191 million. expectation was 194 million. and my last chart, a breakdown of what is happening on eight geographical acis for north korea -- basis for north korea.

growth in the rest of the world, but falling here. remy, thank you. if you want to check out his charts, just go to tv and check it out in the new function. moving onto the fed, they going to their second day of the latest policy meeting as the attainment after -- of a sought-after goal. kathleen hays is here to look at what 2% inflation means. does this mean faster pace? kathleen: that remains to be said. -- that remains to be seen. the fed is not ready to speed up their pace just yet. inflation, yes. 2% inflation. it has not been that high in six years.

the yellow line is 2%. 2%.turquoise line is 1.9% when you take out food and energy prices. but it looks like they could declare victory. so what is next? will they hike when they wrap up their meeting on wednesday? they have pledged a gradual rate hike path. they are not ready to change that yet. a very tricky task at this point as we move on in the story. i have to avoid derailing the expansion, even though they are hiking rates to make sure inflation does not pick up too much. so let's look at the chart. this is a great chart, showing how this expansion in the u.s. at eight years and 10 months is the second-largest -- second-longest on record. .t is only averaging 2%

past extensions were stronger. the record was in the 1990's. the fed does not want to mess that up. they do not want to inadvertently dampen the effects the trumps that administration is promising will boost the economy. another thing is the fact that there is no post meeting press conference. they are will -- there will be one in june. and a stronger dollar is hiking financial conditions. will bee reasons, we watching be policy statements closely to see if we get any of those hints about what could happen next. noty: as you mentioned, expecting a rate hike at the meeting. will we get a hint that the fed it could be lining up for a faster pace of rate hikes? kathleen: it is only five or six paragraphs. the anything that signals that

inflation was not gradually rising will be jumped on by anybody in the bond and stock market. one said that the gradual policy path could be altered if inflation were to top 10%. before that, another said he felt calm -- comfortable of -- about a two point 2% inflation. look at the prices paid as we look at one more chart. this is a powerful one. one picture is worth a thousand words. you can see prices in the white line up to 79.3. a lot of it is commodity prices but prices are rising. index, 50 73, 59.3. well above 50. many manufacturers still looking good in the united states.

we expect a strong report on friday when it comes to payroll. people will be watching wages very carefully. the forecast is 2.7% year-over-year. one more thing that could tilt the fed toward the path of faster pace right hikes in june. in june we will be updating the economic projections. betting.re still we will have to watch inflation and the jobs. kathleen, thank you so much. coverage of special the latest fed rate decision on bloomberg television tomorrow. join us then. betty: up next, how will the rising interest rates impact that u.s. housing sector? this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia." betty: apple boosting its share buyback plan by $100 billion on top of the existing $210 billion i back program, returning more money to shareholders and also the benefits from u.s. tax cuts. i want to bring in metro shall. helle. -- mitch roceh it seems like only time. these companies are getting big tax breaks and are going to give it back to shareholders. >> many have given it to employees. let's not roll them out. referred to as a one-timer. i don't think it is. a lot of companies as they get

the benefits of tax cuts will --tinue to share it to their continue to share it with their employees. it makes sense. investing in your own company. employees benefit there as well, with a 401(k) plan. betty: is all of this for the u.s. economy? is it a job in the bucket? -- drop in the bucket? >> i think businesses large and small are behaving differently as it relates to the tax benefits. i think we will have to see it over time. one could argue that buying stocks is not putting it into circulation. and i think there is a trickle-down effect we will see. you can't look at the first quarter gdp growth and say, where is the benefit from tax cut? that is a little unfair. let's look out more long-term. betty: let's talk about interest rates. housing is one of your

specialties. housing data was a little disappointing later in the week. no expectations of rate hike from the fed. we have a flattening yield curve which probably does not affect the housing market. the biggest issue and housing is affordability. if rates were to go up 1%, that could squeeze the consumer. we have to keep an eye on it. i do not think the 10-year breaking 33 is a big watershed event for the housing market, 4.5% if weow were at get 1% higher, that could start to squeeze the home buyer is worried about rising prices in homes is of lack of availability, which is putting pressure on affordability. we are still hovering

around 4.42%. what if we hit the 5%? on the margins when we come to homebuyers, with this slow their plans or stop their plans to buy? or is there more than urgency to buy now because rates could go higher? >> i think we are going into homebuying season in the u.s. and so if you're out looking to buy a home this season, interest rates are not going to be an issue. but the reality is, let's say prices were to fall because of interest rates and a shift in demand. then all of the other people who were frozen out on the sidelines, i think we are in a virtuous cycle as relates to housing. or take aate give percentage point are not going to chill the market that much. arene: property prices rising faster than wage growth. this show whenn we talk about how tax reform

could chill the market, i said it housing prices started to not conflate by 6%, that would be a good thing. they are going up because of supply and demand. who have americans hope -- you have formed households have decided not to buy a home because they are not affordable. if houses -- house pricing fell a bit, more people would enter the market. we have seen new regulations when it came to tax cuts. the biggest changes revisions on reducing the path -- cap. --t effect is that had on what effect has that had on the housing market? >> very little. deductibility is three times the median house price in the u.s. so i do not think that has chilled the market.

of state andlity local taxes might have a bigger effect, but across the u.s., i do not see tax reform being and a pediment -- in peter mitford people who want to jump into the housing market. if there is a lack of availability in residential real estate, will builders accelerate holding in the u.s., and if so, what of the country will see the bulk of the growth? >> great question. prices, this is the reason homebuilders are not building at the right. lumber prices are going up. there are laws and regulations. land prices are going up. these things are keeping homebuilders out of the market. if we see lumber prices and commodity prices go down, we

will start to see more supply. right now we have builders building at the lowest rate in a time of rising prices, which does not make sense. you would think producers would be producing more product. what region would see the most growth? nashville,lorida, austin. areas like newn york and the bay area tend to have a lot of barriers to entry. that is the regulatory side of things. or land prices are very high. prices, lower barriers to entry, that is where builders go. if they are taking a risk with capital so they want to know they could get out. betty: that make sense. good to see you. thank you so much.

do forget our interactive tv function, tv go. you can watch us live and dive functions wemberg talk about. you can become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only. check it out on tv . this is bloomberg. ♪

yvonne: a quick check on the latest headlines. pay 110sachs is to million dollars to resolve claims that its foreign exchange traders improperly shared information about client orders and electronic the chat rooms. they will pay roughly $55 million each to the federal reserve board. they will provide regulators with a plan to improve internal control and compliance.

and it will be -- and qantas says there will be a revenue jump on year to $3.2 billion. this is in line with analysts estimates. microsoft has bailed out of twitter, saying he does not like being an investor. -- bought in 2015 and chairs have doubled. remains bullish about twitter in the long run. we willcoming up, continue to break down apple's andyd-quarter results with kaplan in a couple of minutes. hear from fred who

on the china u.s. relationship. our interview with him, coming up. this is bloomberg. ♪ 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.

kong, 8:00 a.m. in hong i'm your yvonne man. welcome to asia. asia-pacific markets set to gain out of the labor day break. u.s. equities rose and the dollar climbed while treasuries fell. felltock in the spotlight to it breaks in america, securities plunged 20%. betty: from bloomberg global headquarter, i'm betty liu in new york, where it is just after 8:00 p.m. apple popping on what's described as a sensational porter. atenues topping expectations $61 billion. the u.s. trade team prepares to head to china. robert lighthizer says they seek

a big challenge. -- they face a big challenge. ♪ yvonne: with/into what will happen in beijing when it comes to trade. earnings,mes to apple there is a lot of concern about this doom and gloom scenario when it came to the iphone x. this is what most of asia will be focused on, especially when it comes to supply chain and the fear that we have seen. leading to these earnings we have 14% revenue growth when we see the iphone sales. we still saw that the iphone is still very much popular and profitable for the business. whether that is good news depends on which analyst you talk to. betty: it does indeed. it was interesting to see the disconnect between we saw from

the suppliers and what came out from apple today. onee are areas of concern, is apple continues to be dependent on the iphone. the second is what about other parts of the business? the services revenue seems to be growing too slow for some wall street analysts'taste. let's go to paul allen, who has more. paul: the european union is warning of growing lack of uncertainty following the u.s. position to delay steel and aluminum tariffs for another month. just hours before temporary relief was due to expire, the trump administration allowed another 30 days for negotiations. he says business negotiations are being affected. washington insists progress is being made. >> we are having productive discussion. we are hopeful we can come to a mutually agreeable resolution that will protect the national interest of national security.

wilbur ross will be part of the u.s. trade team heading to china later this week. steven mnuchin will also be joined by trade representative robert lighthizer. they say the trip will be a big challenge. the chinese system has worked for them, but not for the u.s. it will be good if the problem can be managed to suit all sides. brexit talks resume in brussels, with the u.k. proposing a new plan for the irish border. they want to move forward quickly on avoiding a hard-line friend when it comes next year. micco by near is promising to work around the clock to find an agreement that this months of european leaders. south korea has begun dismantling banks of loudspeakers under the militarized zone used to hurl k pop and western propaganda into the north. they agreed to end cross-border

messages. news reports signs north korea is dismantling its loudspeakers. the defense ministry in seol can't confirm that. the world health organization says toxic air led to the early deaths of 7 million people in 2016. a new study says nine of 10 people around the planet face dangerous high levels of pollutants that can cause cancer and cardiovascular diseases. pollution was worse in the eastern mediterranean and southeast asia, where some airborne toxins were five times the safety limits. global news 24 hours a day powered by over 2700 journalists and analysts in over 120 countries. i'm paul allen, this is bloomberg. ♪ betty: let's take a look at your market open. pretty slow going when it comes to equities. a downside when it comes to the south korean markets. the latest with sophie.

sophie: this is coming down to samsung biologics. that share is falling 15% after an accounting violation report. keep track on the stock. we are seeing gains in tokyo up about a 10th of a percent led by tech stocks. apple earnings are very much in focus. h are watching out for sk ynex and apple memory chip prices are expected to fall. we're seeing weakness at the open. the aussie is at a 10 month low, pummeled by the rally in the greenback. divergent -- prompting divergent views. just after the rba held rates at 1.5%. is under pressure, dropping to a four-month low after jobs data came out this morning. we have the one slapping a today down.

stocks tomes to watch, we are keeping an eye on nissan and japanese carmakers when it comes to a slowdown in automakers. shocked when a 20% plunge in april happened. in sydney, we are keeping an eye on qantas after it forecasted it is on track to hit record annual profit. the company ordered six more dreamliner's and have more demand. rio tinto also in the hotspot. they spoke of 2018 looking more challenging than last year, with rising cost inflation and geopolitics adding to the risk outlook, with increasing volatility driven by trade and protectionism. speaking of volatility, expect swings in the metals markets, given the dollar strength and comes decision to delay the imposition of u.s. tariffs on steel and aluminum, which will likely prolong market and pricing uncertainty as the white

house wants to set quotas on imports. it could take longer than a month to work out for some's month -- it could take a for some larger distributed. yvonne: let's take a look at apple. extended trade after second-quarter revenue rose 16% on the year to more than $61 billion. the company sold more than 52 million iphones, although the average price did fall, as apple predicted. third-quarter revenue better than one analyst had expected. let's take a look at simon james. looking ahead at what this means for the supply chain. taking a look at the bills to $53 billion. what does it make you think when it comes to the suppliers? is there more relief? >> on the supply chain side, when we look at it, it is in line with what analysts expect.

the expectations have already lowered when we compare to because people are coming to the realization's that iphone demand is at certain levels. quarter,ok at the june we can see that they are expecting 15%. if you look at the growth in services and also the other businesses, iphone sales are probably going to be 15%-20%. this is going to help on the top line. whenever apple gained on that companies. get it on , the salesin front

growth are high -- driven by high asp. on that front, it is for the samplers a higher asp going to the margins because they are going to have higher component costs. are going tocosts go into the cost of the sales. on the margin front it is not going to be as positive. yvonne: margins can get more squeezed. what are some of the key developments that is significant for the supply chain moving forward? are we continuing to see more interdependence when it comes to suppliers in apple, or will there be released -- reduced? focus on the new phones that will come out in the second half of this year. the expectations for iphone are all pressing into the internet

expectations. the new funds are going to spur new demands. this is what people are focusing on. yvonne: thank you so much, simon chan. let's see what this next analyst is really focused on. i want to bring in andy cap are in, the director of research at regent atlantic. what is a big question that came out? the biggest thing to watch is what is going on with the iphone and what is going on with the iphone environment. what you are seeing from this most recent earnings report is news around the iphone and iphone environment. they are selling as many units as they are expected, not quite at the price. they are not filling as many units as they maybe. it is one of their intent to earn more revenue.

it was a good strategy because it allowed them to collect more revenue for those people -- from those people who are willing to pay more. without alienating budget concerned consumers. great news from the fact they are continuing to sell iphones as quickly as they can produce them. what is important is the diversify beyond the iphone. they are doing services, the services may not be as diverse as people expect. betty: growth is just too slow. >> the growth is double digits. but all of it is in iphone peripheral services. servicesn a lot of that are going to the consumer through the iphone environment. where apple is failing to gain traction is in more business to business sales, amazon web services trying to come in and eat their lunch. betty: you point to a lot of areas of weakness for apple. you mentioned maybe the biggest area is that it is so dependent

on the iphone. as ahat's what keeps apple high-quality different. there is so much risk in having your entire business, the biggest business in america, tied to just one product. it is tough for investors. betty: you said what was interesting and surprising is the share buyback, the $100 billion share buyback that was announced. >> it is really good news. as i look at the previous generation, cisco's, microsoft, what do they do when they ran out of growth? they took the cash and started to buy out little competitors with big ideas, and turning them into bigger ideas. it was always did money. cisco went out and bought a consumer company that made handheld video recorders, it was a waste of money. i'm glad apple is not throwing its cash at little products -- projects like that, and instead

returning to's shareholders. it is really going to drive growth, at least in the earnings-per-share. when you look at the pace of these buybacks, do you think it will be enough to keep the stock price elevated? we have seen pretty down days when it comes to apple leading up to these earnings. is there a signal that they have run out of ideas when it comes to investment and m&a? >> i don't think they have run out of ideas. therek what it means is are not a lot of ideas worth $100 billion. there are very few companies of that kind of a market cap. there's no sense trying to acquire them. it illustrates the company has discipline, they are not china to build an empire, and are trying to grow organically. when you build a big is this around one product, it will take time to diversify. investors will have to have patience. we will continue to see a bumpy

ride for the entire u.s. stock market, for apple, in particular. thene: tim cook mentioning numbers coming from china, 20% year on year. do you think that is sustainable given the trade tensions? >> i think it is sustainable, because it is a consumer demand story. consumers flock to whatever product they can afford and appeals to them. what is important is apple is in a premium price product that has kept it out of the hands of many consumers, because an extra couple hundred dollars makes a difference to most consumers outside of the u.s. as you see more disposable income outside the u.s., it is making it an approachable product. yvonne: what is your verdict on the apple stock? are you a buyer? are you waiting it out? i am a buyer, but i will be boisterous. i want to see apple do more to diversify its product race. when you buy apple today, you are buying an inexpensive tech

company, you are buying a will manage stock. you are doing it with a very unique risk, which is just your staking a lot on this one asset. betty: just pulling back from apple, to the earnings season, which is generally been bullish. we have had a majority of companies beat profit and revenue, but the market is not reacting to that. >> i think the market is reacting. the way they are reacting is it has stabilized. we are no longer trading longer. we are starting to gain steam. the market is not recovering but to january's peaks, this year is a different year. 2017 was driven by politics internally for the u.s.. the white house was focused on obamacare, didn't do much, but turned around and did tax reform. it could only have been good news for the stock market, because the united states's

world highest income tax rate was not going to go higher. it could only be good news. in 2018, the white house is focused hourly, on international relate -- outwardly. goingl possible news is to be good news. the white house approach is shoot first, ask questions later. that can work well in washington, where people are slow to act, it can be harder when you are dealing with the rest of the world where people respond quickly. betty: thank you so much, andy caprin. you can turn to bloomberg for more on apple's results. go to tliv go to get analysis from bloomberg exper editors. nissan' u.s. sales weres a hard crash. we look at what the company struggled in an otherwise strong month. yvonne: up next, no permanent promises on tariff exemptions.

how the white house is responding to pressures from u.s. allies. this is bloomberg. ♪

♪ betty: this is "daybreak asia," i'm betty liu in new york. yvonne: i'm yvonne man in hong kong. the trump administration has pushed a trade war down the world by delaying a decision on tariffs. the european union is worried about the uncertainty and its effect on business. let's get the latest from kathleen hays, who is watching this out of san francisco. the eu complained so far, it seems like there is a relief, but some frustration. kathleen: there is frustration. i am one of the people who is guilty of making up their mind and changing it. you drive people crazy. imagine if you are the leader of a country trying to figure out if you are going to get an exemption or not. of course, when angela merkel

was speaking to the president caseweek, they made the that they were friends of the u.s. donald trump can't make up his mind. late monday night, the white house announced an agreement with argentina, australia, and eu, extending it to enable time for more talks. this does give everybody more breathing room to make their case, to negotiate back and forth. wilbur ross speaking earlier to bloomberg television seemed pretty upbeat on how things were going. >> we are having productive hopeful we and are can come to a mutually agreeable resolution that will protect the natural interests and -- national security interests. yvonne: let's see what the eu

said, a little bit of frustration. the u.s. decision prolongs market uncertainty, which is affecting business decisions. the eu should be exempted from these measures as they cannot be justified on the grounds of national security. just with the leaders of germany and france told donald trump. found u.s.ay manufacturers, the purchasing managers index, they asked purchasing managers of a manufacturing companies what is on their mind read so many complaints about tariffs, raising commodity prices, they can't do business planning, one company had to drop products rather than put them in production. you ask businesses complaining just as much as businesses in the eu and other parts of the world that are still wondering what will happen. toty: wilbur ross tried backpedal expectations of the u.s.-china trade breakthrough.

what did he say? kathleen: you don't want to build up hopes, maybe you want to go into it. people are going to be negotiating, realizing you are going to walk away from the table if you have to. never know where you are until you get into the conference room. i wouldn't be going all the way over there, he means to china, if he didn't think there was hope. it is not just wilbur ross, you have steve mnuchin, larry kudlow, now donald trump's top legal adviser, robert lighthizer, all going on thursday. the system hasng worked well for china, just not for the united states. donald trump is a cheerleader urging the team on. delegated heading to china to begin talks on a massive trade deficit that has been created with our country.

korea, thiske north should have been six years ago. same like countries with nafta, but it will be done. great potential for the usa. he closes with another study from the u.s.. the national federation of retailers and technology association of the u.s. they are both opponents of tariffs, but they say the fiscal cost $2.9 billion worth of gdp, maybe that's not so big. 134,000 jobs will be lost. more than 77,000 voted for trump. the complaints are coming from u.s. sides. whether or not they will be implemented. betty: we will leave it there. global economics and policy editor kathleen hays. incan find in-depth analysis today's big newsmakers on bloomberg radio. tune into daybreak asia from 6:00 a.m. hong kong time, 8:00 a.m. in sydney. you can download the app, or access it via bloombergradio.com. this is bloomberg.

♪

♪ a quick check at the business flash headlines. quantum shares jumped after their quarter revenue climbed 7.5% on year to $3.2 million. they underlined their profit up to $1.2 billion, in line with estimates. it has ordered six dreamliners to bring it to 14 by 2020. that will speed up the retirement of its last six jumbo jets. india is extending the deadline for buyers in mid-bid for the national flag carrier. final dates for offers are being pushed back to may 31. they have a 76% air holdings, including air india express and is interested in a ground service unit. air india is struggling with billions of dollars of debt.

a new mobile app and marketing push didn't help china's pizza hut. a projection of 3.3%. sentisappointing results shares down as much as 10% after hours in new york. they have struggled to attract younger diners. sales slumpede 5%. nissan has shocked the auto market with a dramatic sales decline in the u.s. deliveries/20% last month -- slashdot sales showed why it is quitting the sedan sector in america. the only four-door lincoln drivers but more of was the got, the 400,000 -- gt the poor husband -- $400,000 supercar. the japanese carmaker took a wrong turn. this is bloomberg. ♪

♪ betty: 8:30 in singapore, good morning, we are half an hour away from the open of trading. equities are being mixed. the dollar seems to be continuing on its tear. plenty of earnings including that of apple this morning. i'm yvonne man in hong kong. betty: i'm betty liu in new york. you're watching "daybreak asia,." let's get to the first word news with paul allen. manufacturing expanded last month at its slowest pace since july as raw materials prices continue to rise on supply constraints and ears on trade tariffs. 59.3.dex fell from

the production measure dropped from 61 to 57.2. sinceas the lowest november 2016, and the biggest decline of the year. on the other side of the atlantic, you manufacturing slowed more than expected in april. signs of the economy's poor first quarter performance continues. the pmi came in at 53.9, when we revised 54.9 in march. that is a 17 month low. against -- it fell against the euro and dollar. new zealand unemployment fell to a fresh low, indicating signs of weight growth will eventually pick up. the jobless rate was 4.4% in the fourth quarter, matching the median. that's the lowest since the final quarter of 2008, inflation languishing near the bottom of its target range. they have signaled low highs in 2019. opec continues to overdeliver on production cuts without

performing for the last month. the cartel pumped 31 point 3 million barrels a day. led to drop ahead of the may 12 nuclear deal deadline. prices fell the most in more than three weeks as the dollar strengthened and traders bet on another rise in u.s. stockpiles. it is being revealed the investigation into alleged corruption of malaysia's one mdb fund includes official of saudi arabian oil producer petro saudi. two people are suspected of criminal mismanagement, fraud, bribery, and money laundering. swiss, u.s., and singaporean authorities are looking into allegations that more than $3 billion was diverted from one mdb. global news 24 hours a day powered by over 2700 journalists and analysts in over 120 countries. allen, this is bloomberg.

yvonne: time to see how the asian markets are shaping up. let's get an update with sophie kamaruddin. sophie: asian stocks are looking at. u.s. futures are taking a flight hit. when it comes to the stec pate -- textbased, we are seeing a divide as apples profits beat out. and in tokyo it is rising. -- in seao it is falling because oful accounting violation reports. see a rise in the yen after headlines robert mueller is set to break the possibility of a trump subpoena. other countries are under pressure in face of the dollar strength. treasury yields remain below 3%. we are seeing the all the bond market catching a bid. this after the country's aaa rating was confirmed, underpinned by strong governance, high income levels, the track record of macro economic stability.

the aussie dollar is removing -- the aussie dollar is resuming its drop. a 10 month low despite the rcb's greater confidence. taking a look at the stock movers in sydney, qantas is leading among the gainers after flagging it's on track to deliver record annual profit. it has ordered six more dreamliner's on rising demand. switching it up to check in on the laggards, you have jb hi-fi dropping the most since 2011 after cutting its profit weighing on other retailers. pressure as under they face a bleaker future following a scathing report released on tuesday that found cba commonwealth bank to be found complacent from the top down when it came to risks. the ongoing inquiry is likely to impact of the confidence, but has not affected the underlined soundness of the banking system to date.

betty: we will leave it there. -- tech is the big focus of the week. accompanying news and events. facebook and snap are breaking parts. ramy inocencio has the details. ramy: facebook wants to get into the dating game, the online dating game. we saw the plunge about 22% worldbecause match is the 's biggest online dating site. facebook's how business would actually play y, yout is opt in onl can't send photos, it is only text. in regards to who you can reach out to, if you are not a friend, you can talk to them.

if you are a friend, you don't want to be paired up with one of your friends. on interesting thing is the privacy issue comes up, the security issue comes up in light of what has been happening. mark zuckerberg did have this to say at his conference. >> it will be in the facebook app, but it is optional. you can make a dating profile. i know a lot of you will have questions. we have designed this with privacy and safety in mind. your friends are not going to see your profile. you are only going to be suggesting people -- suggested people who are not your friends, who have opted into dating. ramy: did you notice he smiled a lot? that is a really good face to put in front of the audience. price,gards to the share we saw that fall hard-core. today it rose by about 4%.

go into the bloomberg prayed i want to show you how bad match fell --. i want to so you how that match fell. match falling 22%. its worst day on record. iac in blue, the parent company falling about 10%. that's its worst fall since 2001. investors are seeing good things with facebook. it gives them a new ad revenue possibilities. they can possibly offer this for free while the other apps are adding subscription services. let's go to match. not the reply, but the retort with regards to its ceo. she is flattered that facebook is getting into this space, but the more important line is the second one. she twists the knife. timing,urprised at the given the amount of personal and

sensitive data that comes with this territory. the parent company of match but that knife in deeper. he said the water is warm. .. iproduct could be great. think for u.s.-russia relationships. reporting to the groups that reportedly trying to influence the 2016 election. yvonne: that one really stung. taking a look at snap earnings, people are really starting to doubt this redesign. this is a short-term disruption that they transformed the app, but it doesn't seem anyone is buying it at the moment. ramy: especially with the share price after hours plunging at about 15%. you talked about the redesign, that really annoyed a lot of people, a lot of celebrities who are influencers. that had a knock on effect, in terms of user growth, and in terms of growth for revenue. i want to show you the revenue

growth. 54%, that is the lowest since snapchat went public, not good news. the guidance they gave was also less than expected for the second quarter, for the current quarter. we can see the daily active users, the number goal.helmed the the estimate was for $194 million in this line, it came in at $191 million. they missed by just one penny. everything went wrong for snapchat in this first quarter. inocencio there. if you want to interact with any of the charts, go to gene keady go -- g tv . theauto sales are in spotlight today in tokyo after u.s. sales fell much more than anticipated. let's go through this with kevin

buckland, joining us from tokyo. month wasat this going to be tough for the automaker, given the fact that there was a quirk in the calendar, there were two less selling days, how much of a surprise was the sales drop? was a big surprise. one analyst said her eyes were bugging out after seeing the data. the consensus was for a 10% drop. certainly among the bigger jobs, that is quite back. 28% is much bigger. among it doing better than estimates, despite the quirk in the calendar. else,, most everybody with one or two exceptions, doing better than analysts forecast. people are scratching their heads when they saw the numbers, trying to figure out what is

going on. betty: what went wrong? is there any explanations of nissan for this drama? nissan does talk about some pullback in fleet sales. nissan had been trying to boost volumes by selling more cars to places like rental car companies in order to target share. there is a pullback. there is more discipline from nissan. something else they had been incentiveincreasing spending. they are about $400,000 per car on average that they have been offering. they have been pulling that back. those things were probably factors in this. carmakersly, japanese , relativesedan heavy to their rivals in the u.s..

the altima, nissan's best-selling sedan, it fell by half. of a quirk because we are waiting for the new altima, coming out in fall. unless there is strong give incentive to people to buy those, i wonder how they are going to do in clearing that inventory. yvonne: what is the road ahead for nissan? they have taken a more disciplined approach. analysts seem to be -- think it could be a one-off for nissan. adjustment.od of they have new u.s. leadership in place, they will be doing things differently. the altima, although it is an

suv market, it is their best selling sedan. kicks,ve also got the compact suvs, the hot segment, that is coming out soon. we could see some sales boosts from those going forward. time will tell. this is a very fierce market. the market is shrinking, it has been the most lucrative for everybody. it really is a tough place for everybody to be doing business. betty: kevin buckland, bloomberg's automotive reporter in tokyo. up next, we hear from former goldman sachs partner fred hugh on the chinese u.s. relationship. what he says is most important in the world. this is bloomberg. ♪

♪ asia," this is "daybreak

i'm yvonne man in hong kong. betty: i'm betty liu in new york. fred hughes says the china u.s. relationship is already fraught with an stability, and could be stabilized attention continues to mount. primavera capital spoke to bloomberg at the conference in beverly hills. importantt relationship in the world right now. relationship is also filled with risk and uncertainty. haverade tensions really potential to further escalate. it will not only inflict tremendous damage to those u.s. and chinese economies, but also taking the whole world economy and damaging it. very concerned about the risk. >> what are the prospects for

u.s. treasury secretary steven mnuchin making his way to china. he is looking forward to strengthen trade talks. should we be optimistic? mnuchin is very encouraging. high, itstakes are so is encouraging for the top economists in both countries to meet each other, sit down, and talk about the differences and views. solutions in a cool and confident manner. i hope the meetings are productive. >> is there a possibility china could take a tapa son? giving the u.s. is mulling over steel and u.s. tariffs. >> it is infuriating, but i feel

prevail -- heads cool heads prevail. they don't have to resort it to portrait -- tit-for-tat trade. try to speed up reform, open markets. not only to appease u.s. trading partners, but china trading partners. yvonne: that was the prima capital -- primavera capital chairman speaking to us. stocks open in the next hour, investors weighing up the simmering trade spat, and the latest pmi data out in a couple of hours. tom mackenzie is joining us from beijing. what are markets likely to focus on? tom: it is going to be the trade dispute.

discussing, wen will have the delegation in town. ludlow, lighthizer, wilbur ross, the u.s. side has been discussing, playing down expectations around these conversations that will be had. you heard that it will be a big challenge, and only the start of this process. you heard from wilbur ross saying if they didn't kick off on good terms, in terms of these talks, they may look to cut the visit short. dialing down expectations on what will be achieved. ross was saying we will not get a big breakthrough. markets will focus on that. for the u.s.focus side when they come over will be the trade deficit, which came in close to 340 billion u.s. dollars last year. that is an area where potentially china could have some offerings t the u.s. sideo.

they would be making a big play, chinese officials over there, to improve the import situation. we can bring that up. 2015,s and exports since imports have been taking up in the first three months of this year. chinese may point to that to alleviate those u.s. concerns. the other big focus is the industrial state backed policy around innovation technology. that is expected to be a more from discussion. the markets will be focused on the pmi data that came over the weekend. , botht estimates manufacturing and services sector, that's something the markets will be digesting. the economy is on pretty solid footing, despite the trade tensions and a squeeze around the edge when it comes to credit. betty: what about the private manufacturing survey? what are we expecting their?

-- there? tom: divergence. the estimates from the server rate that comes out -- survey that comes out a 9:40 is you are it down a smidgen from 51 that we saw in march. the private survey focuses more on small and medium-sized enterprises to better gauge on that area when it comes to manufacturing. we are expecting divergence from the private survey two, this morning. you may also want to look at the u.s. dollar and offshore yen. the markets are coming back after strength in the u.s. dollar and the fomc meeting today. rate high expectations in focus. you may see weakness around the offshore yuan. that's something investors are likely to be concerned about. betty: tom mackenzie, our china correspondent in beijing.

bloomberg users can interact with the chart shown using g tv . browse the recent charts featured on bloomberg television and catch up on key analysis and save the charts for future reference. this is bloomberg. ♪

♪ yvonne: this is a -- betty: this is "daybreak asia," i'm betty liu in new york. yvonne: i am yvonne man in hong kong. let's of the business flash headlines.

t-mobile and sprint have stated their case for a merger. john ledger and marcelo clarity laid out the tire based on the announcement the company presented on april 29. it needs approval from the fcc and must clear antitrust hurdles at the justice department. the proposed merger four years ago was rejected. goldman sachs to pay about $110 million to resolve claims that foreign trade exchangers improperly shared information about client orders in rooms.nic chat the bank will pay roughly 50 family dollars each to new york's department of financial services and the federal reserve board. they will also provide regulators with a plan to improve internal control and compliance. betty: wednesday sees a big expansion in china's stock connect with hong kong. investors predicting greater volumes through the gateway. this up on quota will instinct to the equivalent of 7 billion u.s. dollars, the northbound

rising to a $.2 billion. chinese shares will be included next month. yvonne: bloomberg markets is coming up next on bloomberg television. looking ahead to the fed decision, we have at 9:00 a.m. calpine jude, jpmorgan's global market strategist who will weight what we will hear from the fed statement and whether there will be any indication they might do more than four rate hikes. is the bigee or four question after the inflation number we got earlier this week. all looking ahead to what this means for the dollar. are we heading to a boom or bust when it comes to the greenback after it broke above the 200 day moving average? we have bank of america merrill lynch cohead of asia rate strategy joining us. betty: and unpacking apple's earnings. at 9:30 a.m., senior research manager joining us. it will certainly be's parsing through after the -- how this

affects asia suppliers. it is a robust report coming out from apple. before we hand over to "bloomberg markets: asia," a look at how the markets are trading. it is an odd week with holidays in asian markets. the nikkei down about 1/10 of 1%. be --ower as well is cost kospi. 1% --x 200 up retentive up 3/10 of 1%. yvonne: still above the 6000 psychological line when it comes to it, but the kospi not getting their dividend. we had rough numbers through the week. the cpi numbers seem to be in line, but we are far from the 2% target from the bank of korea. let's check in on asian futures. supplier ise apple going to be a key focus. we are seeing not a lot of change when it comes to the futures of taiex.

singapore time index futures unchanged at the moment. we could see a bit of downside in the future. betty: let's take it from the currency market. advanced in the greenback is making new lows for some of the asian currencies. you have a three-month high for dollar-yen, they are trading at 10980. the korean won trading just a bit lower, as well. the aussie dollar is hitting a new 2018 low. yvonne: that is it from us here at "daybreak asia," markets coverage continues with heidi. this is bloomberg. ♪ mr. elliot, what's your wifi password?

wifi? wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. [ child offscreen ] hey! let's basement. and thanks to these xfi pods, the signal reaches down here, too. so sophie, i have an xfi password, and it's "daditude". simple. easy. awesome. xfinity. the future of awesome.

♪ asia-pacific markets mixed as trading returns after made if you'd the end nearly hundred 10. keeping tabs on deliveries. plunging 28%. u.s. trade team very for crucial talks with china. robert line hiser says they face a big challenge in hong kong. this is bloomberg markets. ♪