>> it is 7:00 a.m. in hong kong and we are live from bloomberg's asian headquarters. i am david and glass. -- ingles. a muted session in new york. treasury yields climbing above 3.1%. the longest week of weekly gains and almost three years. round five and counting. betty: from bloomberg's global headquarters i am betty liu in new york. thea said to be offering u.s. a trade surplus sweetener $12 billion a year.

japan data out this hour. we will be out in tokyo as the numbers break. japan data at the bottom of the hour. in the meantime i want to pull up this bar chart which i think is super interesting. we keep talk up -- talking about the hunt for yields. this chart is remarkable. bills arehs, key returning more than 10 year france,n britain, germany, japan. you could go shorter duration and get a better rate of return than going into other countries.

it shows you how likely money will flow into the u.s. markets. particularly if the dollar continues its path from bearish to neutral. up that concept of that something is misplaced out there. if you believe the u.s. economy is a benchmark for the global economy, the cheaper end. you take on very limited duration risk by getting into u.s. assets. it speaks to how cheap treasuries are at the moment. when you look at europe, that my -- might be misplaced. a very telling chart. betty: let's pull up another chart, the equity markets and how they did today. 0.2%, about 55 points. the s&p and nasdaq drifting lower.

pressured by the rise we saw in oil prices. a grim friday in asia? david: a struggle, let's put it that way. open,ht get gains at the but struggle to hold on to the gains as we make our way to the weekend. for the week we were hoping to get a break across equity markets. did not happen, we are down 1% from last friday. overnight, dollar up week number five. dollar-yen, inflation on deck. brazil, the key story, it does seem the government might slash its growth target for the year. 2.5%.rking assumption is indonesia, do we see further strengthen the currency? we talked about this earlier at 2.92 on your australian 10-year.

very steep compared to a week back. oil very much in focus. flashback friday, we are back to the 80's. that is the pricing in london. we will talk about bigger issues at hand and a moment. let's get a first word update. >> european leaders are presenting a united and determined front against proposed u.s. tariffs and of iran deal. what they call the capricious assertiveness of the trump administration. would continuet to fight for a rules-based system. however, it sees no outright trade war. to launch at going trade and strategic war against american companies based on what is happening in iran.

that would not make sense because the goal is to get broad agreement. especially with of the signature of the united states. has the u.k.'s latest attempts to propose a brexit deal. they want to sidestep a hard border in ireland. it is tooials say early to give assurances because of what they call disorienting messages out of london. --y risk says naftathizer countries are "nowhere near close to a deal." talks to last-minute see if a deal is within reach. lighthizer says gaping differences remain on intellectual property, agriculture, energy, labor and much more. gina haspel has been confirmed

as the first female director of the cia after a nomination process that reopened the debate about brutal interrogation tactics. six democrats joining most republicans in support. haspel is controversial because of her role in a former cia program to waterboard suspects. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. thank you so much. we may have gotten a break. we will get to the details in a moment. reports from washington that china may be offering up the u.s. a trade deficit reduction package approaching $200 billion a year. liu he holding talks with the

trump administration. let's get to washington. our reporter greg. this is good news? rbnz -- >> seems that way for the trump administration. month,ek or earlier this treasury secretary stephen mnuchin led a delegation to beijing. it did not seem much came out of those negotiation, -- negotiations, but the u.s. asked for a cut. that appears to be what the chinese are offering. the white house has not confirmed it, by multiple reports are out. that is something the trump administration is looking for. we heard president trump change his tune on zte. that was a request from chinese president xi himself.

maybe there is movement on the trade front here. betty: may be, but what about movement on north korea? the president seems to be contradicting the national security adviser. what is that about? greg: president trump was talking about north korea and he outright contradicted national security adviser john bolton. boltone weekend john said libya would make a great model for the denuclearization process that the u.s. is seeking from north korea. north korea is not as keenly aware as what happened in libya. i gave up nuclear weapons than two years later he was overthrown and killed in an uprising backed by the u.s. north korea not liking the look of that libya model. trump today speaking at the white house said libya was not the model. he was careful to say, or said

libya, kimlike in be runningld still the country and the country would be prosperous after any deal. trying to distance himself from the libya model for denuclearization. betty: what about the proposed june 12 summit? he is hearingid nothing from north korea about any alterations. after these libya comments were governmentorth korea called john bolton repugnant. they said there was a rupture with south korea, they ended talks with seoul, citing a joint military drill. trump himself has said there has been no altered arrangements for this summit. the trump administration said they are still preparing for the summit.

unclear if any changes are coming to that. the denuclearization issue still remains a sticking point. north korea said they are willing to talk about it, but they want a step-by-step denuclearization process, and end to trump's multiple -- maximum pressure campaign. anyon and pompeo said denuclearization has to be complete and verifiable. according to trump, the summit appears to be set for june 12 in singapore. betty: thank you, greg sullivan. geopolitical friction is our top story in today's edition of daybreak. subscribers go to dayb on your terminal. it is also available on mobile in your bloomberg anywhere app. lets get back to u.s. markets, stocks searching for direction. oil climbing to levels not seen

in four years. the dollar extended gains, treasuries dropped. more, remaining above the 3% level. su: that is causing people to look past the friction. some disappointing earnings. let's go into the snapshot. treasuries are front and center as a big story. the dollar extending its advance. above 2.72.oil rise if we look at the big movers, walmart a big story. e-commerce delivered, but some thought the growth not as strong as expected. cisco disappointing, hurting tech shares. cbs, the battle of the titans continuing after hours. midday the company lost a big

battle in the court. let's go into the bloomberg real quick. bond volatility jumping by the most since february equities spurred. sap demande 3% will for stocks. cbs,: su, you mentioned this battle for control over the company. it is far from over. lots of headlines coming up, bring us up to speed. su: let's go right into the cbs intraday. we have a two day tour for you. you can see mid day where the decision came in from the delaware court that cbs has to rich -- restrain sherry viacome, part of the company, from voting. that shareholder was denied. cbs concerned that

what could have happened at this board meeting is that redstone would have moved to disband. he would have been out of a job. headlines from cbs, they voted to dilute the shares to 20%. byt is subject to approval the delaware courts. there has been counter messages from aie the company that owns the majority control,. cbs is not dealing with reality. cbs sent a message to redstone. they will continue this battle both in the board room and the courtroom. this is about control of cbs. one, i will track the story as well. let's give it to oil. we touched $80 to barrel in london, first time in 2018.

where do we go from here in oil prices? su: let's go to the chart of brent crude. you see the dramatic rise in recent weeks has to do with having decided to pull out of the iran sanction deal. if you go into the wti, which is traded here in new york, you can see the rises come dramatically. goldman sachs said it would be "dangerous." let's go into the bloomberg gtv. this is a diverting path chart, where inventories have fallen. we see production rise as prices have fallen. again, there is a concern that in the short-term the bulls will prevail. that appears to be the direction oil is heading in, higher. david: thank you, su keenan, live out of new york with market

action overnight on wall street. inflation numbers coming out of japan in a few minutes. for the firstdue time in 2.5 years. hour, later this investors disappointed with walmart's latest results. we will crunch the numbers and what they are doing against amazon. this is bloomberg. ♪ zon. this is bloomberg. ♪

david: this is "daybreak asia." i am giving ingles in hong kong. in newi am betty liu york. inflation hit a speed bump. an annual rate of 0.6%. the forecast calls for growth to resume. joining us from chicago, cio chris mcguire. of leasthe path

resistance is upward equities. why? . chris: throughout last year we rallied 20 points or so in the nikkei. almost up 7% by the third week of january. the short volatility chaos we saw pulled all equity markets down substantially, japan included, but now we are almost back to the top. it has been a slow grind, but there are investors who still find value in japan. a multiple of about 17 times, which is not so bad on a global basis. betty: how worried are you a strengthening yen will spoil this story? chris: always concerned. i have been dealing in japan for 24 years. when the yen is strong, equities are heavy. markets yen is weak, rally. we saw this with -- when the markets pulled back

early in the first quarter we saw the yen trading down to 105, and subsequently a very heavy nikkei, but now we are back up to 110. rates,u.s. keeps raising there should be a weaker yen, in my opinion. betty: how crucial is the ppi data today? what if we miss forecasts? there may be short-term gyrations, but i do not see big effects dramatically higher or lower. we are stuck in a trend which is good for investors. i still think we have a little more to go in the market. david: you brought up a point earlier. when you look at dollar-yen at 110, it could be much weaker when you look at the spread. 300 basis points. shouldn't we be about 125 in dollar-yen? chris: i felt we should be above

120 the past 20 years. i agree, yes we should. i am waiting for that to happen. that is why i feel there is good upside in japan from a technical level. the yen should be above 120, a mere couple years ago. that was before the u.s. began raising rates as much as they have. david: you have been investing in japan for 24 years. for the foreseeable future it seems the boj will keep doing what they are doing. from a foreign investor's point of view, is the distortion created in the market in japan, doesn't that turn people away? chris: it does. japan is a difficult market for investing. i am very much a trader. i have been treating japan since 1994. japan goes up and down. it has been an excellent market for me for the past couple

decades. but it is frustrating for investors that take a long-term view. we are currently trading at the highest in the nikkei since i started my career in 1994. there have been good gains made, a japan is a market that takes a tremendous amount of patience for some investors. david: convertible bonds. it is not an act -- asset class that appeals to the broader base. it is massively undervalued at the moment. can i just get in and by the yen? is there an index i can buy? unfortunately not, it has to be a specialized hedge fund like myself. in 1994 the convertible bond market was bigger than the global market combined, $300 billion. currently it is only $30 billion. japan is the cheapest convertible bond market in the world and presents a fantastic

avenue to getting volatility exposure into japan. you say,at would because you specialize in japan and asia, what is the bigger risk? u.s.-china trade going up, or u.s.-north korea? chris: in the short-term it is north korea. the june 12 summit we have to see what happens. korea as a whole has had lesser effects on the japanese market than it did in the 1990's and early 2000's. was in power it was, and we would see nuclear tests and wake up monday morning in asia and equity markets would fall 1% or 2% very quickly on that. that does not happen anymore. peace, somesome steps that occur in june, that could be a real boon for equities. betty: before we go, we were talking about this headline,

china promising to buy $200 billion in american goods. at the same time, it looks like they are turning more reliant and inwards on their own companies. what happened to zte was another cruel wake-up call. does that change your thesis or portfolio? chris: from my perspective, we are a market-neutral fund, so we thrive on volatility. we like it when markets are moving. the more chaos that exists in the geopolitical world, the better it is for us. if there is a hiccup on that front, it could send equities gyrating up or down. we will gladly welcome that. betty: it must make you very unpopular at cocktail parties, chris. [laughter] chris: when i speak to friends they know i i am like the market -- mark favre.

we like when bad things happen in my business. betty: thank you so much, chris mcguire. this weekend on bloomberg television, don't miss our exclusive interview with turkish president everyone -- erdogan. catch it at 5:00 p.m. saturday hong kong time. this is bloomberg. ♪ ♪

david: let's get you a check of your latest business flash headlines. cbs, the board has moved to dilute. it is doing that by issuing a program at a dividend -- issuing dividend by the

court. cbs cannot wish away the reality that it has the controlling shareholder. nissan demanding better terms as it discusses closer ties with renault. managers believe they have the better operating facilities. the ceo said he wants nissan to maintain some autonomy, while still reaping the benefits of working with renault. david: in india we will be watching arcom. settlement talks with of the indian unit. shares took off on speculation the two companies have asked the bankruptcy court to hold off on bankruptcy proceedings on rcom. recover $170ing to million in unpaid dues. betty: the effects of rate hikes

and undeveloped economies. this is bloomberg. ♪ s. this is bloomberg. ♪ mom, dad, can we talk?

sure. what's up, son? i can't be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. seems a bit long, but okay... set a memorable wifi password with xfinity my account. one more way comcast is working to fit into your life, not the other way around.

joiningf you are just us, very good friday morning to you. 7:30 in the morning here in hong kong. andre looking at markets seoul and sydney. p.m. thursday:30 evening in new york, where markets closed lower. oil prices shot higher and that weighed on the markets. david: you are watching "daybreak asia." betty: breaking economic data coming across our wires. we have been watching japan inflation numbers for the month of april.

japan april core consumer prices up 0.7%. miss fromflight economist estimates of a gain of 0.8%. excluding fresh food, energy is up 0.4%, in line with estimates. year on year, the headline figure for the month of april, a slight miss, up 0.6%. economists had estimated a rise of 0.7%. looking at the reaction in the dollar-yen. crashght see a bigger with the currency, but right now, it looks to be a moderate reaction. bode well for not the boj in terms of exiting their stimulus program. no, it seems the olympics will, much sooner than that. have a look at that dollar-yen, 110.82. it was more or less in line with

estimations, but we are still far from the target. let's have a look at aspects for markets in the asian pacific. we only have one cash market up and running. new zealand is up about 0.4%. we might get bids in japan. us pointing to moderate gains at the open. yields are continuing to back higher. brazil two-year, 24 basis points. the story at a brazil, expectations the government might slash their target for the year. we are getting a decline in the loonie. concerns nafta is nowhere near done. the talks are ongoing. we will get you an update later on what is going on in china, those talks between beijing and washington. have a look where we are as far as fixed income is concerned.

the twoteeper curve on and the 10. the 30 year broke above 325. watch that very closely. we will rise at the level of the 30 year. it takes you all the way back to 2015. we get a big -- we get a basis point or two further. 325 at the bottom of your screens on the u.s. 30 year. i will flip this up. have a look at this gtv chart. breakout,oking for a sort of got one on friday. there was the false hope. this is the support level on the 50 day. we were hoping for a breakout, did not get it. 4% on a weekly basis. have a look at this chart now and then to track momentum for equity markets. another story we are tracking, oil.

$80 in london. lower, $71 was your last pricing. it takes you back to inflation expectations of yesteryear. that is continuing to get revised higher. a lot of things happening in these markets in asia. betty: let's get the first word news. >> reports from washington say china is ready to extend an o live branch on trade, looking to reduce the trade deficit by $200 billion annually. the news is yet to be confirmed by the white house or beijing, but sources say that is what is on the table. initially asked china to cut $100 billion off the trade gap. trump says libya is no model for north korea. john bolton says nuclear disarmament should follow the

gave model, when gaddafi up his weapons, he was later killed in an uprising. threatened toter cancel the summit. pres. trump: there was no model da this is a much different dealfi. afi. gadd this is a much different deal. kim jong-un would stay in power. his country is rich, his people, industrious. and $18 billion sale will go sideson june 1 as the two awaited a decision from beijing. toshiba retaining a stake after the deal goes through. dealer companies nearing a

to salvage investment in 666 fifth avenue. they have been looking for a partner. kushner has lost millions each year due to low occupancy and high mortgages. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. cb drama has takens another twist, the board looking to dilute the interests of the redstone company. the board met over an hour ago. our reporter is watching all of this. redstone has been diluted by a tremendous amount? >> she has, her voting power has 70%.diluted from 80% to

however, she does not think the vote should count. yesterday she came out with a nuclear option of changing the bylaws. instead of a simple majority, you need 90% of the director support. on that basis she has won the vote, because it was 11-3 against her. betty: what about moonves? i am unclear what happens to him. >> this will probably get tied up in the courts for weeks or months. if he is terminated before his owedact expires, he is $150 billion, plus assets. yesterday they said they would reserve the right to challenge that, given the legal maneuvers that have happened this week. david: i am guessing he will be

fine, but what about investors? i am looking at the stock price, how they closed in post market. investors not liking this one. nabila: not at all. for investors it means future uncertainty. it happens at a time when companies are scrambling to bulk up and scale. you have seen disney, comcast join the fray. media companies need to get their act together if they can be able to compete against netflix and amazon and google. it is a tricky time to be a cbs or via, shareholder. david: banging your head on the wall i would imagine, for some. thank you so much. let's pivot and have a look at central banks and discuss the concept of spillover affect. that is how they referred to what has been hitting whening-market economies,

you see central banks boost interest rates. to's bring in kathleen hays talk about -- we had a bank of indonesia rate decision yesterday to shore up the currency. has the bank done enough to end the rout there? kathleen: that is an interesting question. it depends on other developments around the world, but it remains to be seen. they did hike their key rate at a quarter-point. the rupiah hit a low. has beennt -- descent swift. we will see how they took their seven-day reverse repo rate from 4.25% to 4%. a steady course since the middle of 2016 of rate cuts that did not seem to roil the rupiah much. haveast month or so, em's sold off, emerging markets have

been hit. here is what the governor said about this move. bank of indonesia will continue to monitor economic development and is ready to take stronger measures to make sure macroeconomic stability -- their statement said they are vigilant of global risks like rate hikes, rising bond yields, oil prices rising, trade tensions. bloomberg economics writing today thank indonesia may have to hike of that key rate as early as next month. generally speaking, emerging markets are all facing these risks. one of the biggest, nations that have current account deficits. before the last financial crisis, a lot of markets had surpluses. argentina, poster child for

getting hit by investor concerns, key rates to support its currencies. on daybreakr was australia. here is what he said about the wrist to emerging markets. >> we saw with argentina confidence can shift rapidly. dire thisst year, year. i worry that things can be fragile. a lot of concerns things can change rapidly. kathleen: there is an old saying, when the tide goes out, that is where you see the rocks. buffett one said, that is when you see who has swim suits. when liquidity gets pulled away as the fed hikes rates, that is the question over emerging markets now. the onlyey are not ones hit by investor concerns. italy's bond yields are rising,

populists taking over the government. kathleen: a terrific interview on bloomberg television. definitely watching italy closely. bond yields are spiking. the five-star, the league, these two parties have gotten the votes to leave the government. i have another chart i want to library.from our gtv i am having a little trouble, so we can move on. yieldss italian bond have spiked over german bond yields. the benchmark in europe has gotten wider. you can see at the far right-hand side, the latest spike up in the italian bond yield is pretty definite. it shows investors the concern. they want to take their money out of a place they see as more risky. toldis what constancio bloomberg earlier about this

spike and what it means for the ecb. >> we have to monitor that situation. it has changed from what has been happening recently. the problems of italy are the same, known by everyone, particularly in the market. the yields and the spreads have been contained. until recently. there is a spike, we have to see how it will develop. one small ray of hope on this situation in the last few hours. five-star and league have been talking about cutting taxes dramatically, boosting spending for the poor. would increase the debt at a time it is already big and italy. they threatened to go to the ecb and push for a debt write-off of more than 250 billion euros.

an italian newspaper reporting they have backed off from the debt write-off. tumult, being expressed dramatically in markets. kathleen, thank you so much. out, is news coming headlines from cctv. trump saying u.s. and china should boost their ipr protection. it appears to be after the meeting. china working to -- looking to work with u.s. on the trade issue, as we saw with that $200 billion purchase of u.s. goods. these are all headlines coming up after this meeting between trump and chinese premier liu he. trump also saying they should boost access cooperation.

sounds like a lot of talk right now on cooperation. it seems things may be warming youetween the two, but never know with the u.s. and china. walmart news -- h-shares falling the most. investors were most focused on the retailer's e-commerce business. remy inocencio has the details on walmart. >> when we look at the now as well as the future, everyone will be looking at e-commerce. the number was 33%. it sounds good, but putting it the fiscal year is 40% for guidance. i want to hop into the bloomberg and show you what this looks like an bar chart form. side, that isand 33%. you can see it is at one of its lowest in the past year,

year-and-a-half. we have seen that kleiman the year prior because of what was happening with the scoop up of jet.com. thwell as other brand names, e bonobos brand, a favorite of millennials. there was a concern that was petering out. have as investors might reason to hang on a little longer as that e-commerce growth continues to rise, as investors are looking at this. let me walk you through the top and bottom numbers. when the numbers first came out, the stock rose because investors were saying, this looks pretty good. you can see revenue and earnings per share beat by a few pennies. other information started to drop. same-store sales missed 1.2%.

the estimate was for 1.3%. nature took its toll, because it was colder. bad weather, shoppers stayed at home. but interestingly, shoppers that went out spend more on each trip. let's put this up one more time. looking over the past year today, the share price is down 13%. a little uptick. on the right-hand side of your screen, the company said it would buy a controlling state in india's flipkart. that is a huge e-commerce boon in and of itself. flipkart is a major player. it is positioning itself in populousmber two most economy. who knows how long that will because india is still needing a lot of time to grow. david: we cannot talk about tomart without comparing it

amazon. what is the latest metrics we are using to compare them? ramy: we can look at the bloomberg terminal for this. when we look at the curbs, we can see in the blue line in your library, amazon really does blow walmart out of the water. is flipped for both ofpanies but the efficiency and -- amazon is higher. i want to put this into perspective with regards to a couple other indices. you can see in blue, amazon does blow everything out of the water. the white line is the u.s. retail index. the purple near the bottom is walmart. guess what? least of all is the s&p 500.

if you were with walmart -- with amazon, you would be quite happy. if you were in walmart, i would suppose you were still pretty happy. ramy, thank you so much. we will talk about the latest inflation data in japan. this is bloomberg. ♪

betty: this is "daybreak asia." i am betty liu in new york. david: i am david ingles in hong kong. we got inflation data from japan. upluding fresh food, going on year.r still pretty far from the 2% inflation target. our guest joins us out of tokyo to discuss this.

help put everything into context for us. we had gdp falling and inflation falling more than people thought. >> it is interesting. definitely japan has hit a soft patch. definitely there is no evidence of price power. the inflation target is a long way away. the success story comes in corporate earnings, because despite the fact companies have no power, it is reaching record highs. speaking of corporate earnings, i want to talk about where wages are. that might be the silver lining. we have seen wages start to pick up. does that eventually show up and shrinking marches? do you think people are feeling that in japan, wages going up? i think the turning

point in the labor market is here/ it is wages actually growing. every year wage growth 0.5% totes by about 0.75%. this is for real, it is a structural improvement. as a result, hopefully in the next six to nine months, the purse strings, the spending power, will lead to higher consumer spending. david: we have not really seen that happen. i would imagine it is symptomatic of a deeper problem, that people do not have confidence that life and the economy gets better. jesper: you are absolutely right. for the last 12 months, income but by ¥5 trillion,

consumer spending only grew by ¥1 trillion. there is money going into the bank. it tells you that right now, the confidence mr. and mrs. watanabe succeeding isics pretty low. but there is enormous spending power that could come from japan. betty: we had a guest earlier that is still bullish on japan markets, particularly japan equities. he was saying, for japanese equities to rise, we need a weaker yen. what are your forecast for the japanese currency? is he going to get that wish? jesper: on the market i am extremely bullish. be ateve the nikkei will 40,000 by the time of the tokyo olympics. it is exactly because japan is in that sweet spot. productivity is rising,

corporate profits are rising, earnings per share were going up, dividends are being increased, and there is no inflation, which means the bank of japan can stay the course, can maintain zero interest rates. think the yen do is likely to be a very weak currency. by the end of the year, possibly 120, 125. betty: that is quite a ways from where we are now. and how about the yen that factors into the trade dispute, we have heard headlines from japan the last few days about retaliatory measures they are going to take against the u.s. on the tariffs. how does that fit into your more bullish outlook on japan? jesper: it is not much of an issue. there are tactical issues, the trump administration, responses

from the people's republic of china. are we going into an outright trade war? i think that possibility is low. you aren what matters, working hard in japan to open up trade relations in a multilateral framework with the transpacific partnership, excluding the united states. if you do not want to join, that is fine. but overall trade in high-growth areas of asia, that is where multilateral agreements are coming to them fore, and that is excellent news for japan. betty: moving from trade to a chart we showed earlier, it was showing how shorter duration government debt in the u.s., something like three-month t-bills are yielding so much more than what we are seeing from other countries in japan. nothing from what you could get by putting in money for three months into u.s. t-bills.

how concerning is that for japan? what do you think of that is going to do for the close in the future? jesper: you are putting your finger on the point. that is what the dollar will rise to 120, 125. it is exactly that differential. if you are a japanese bank, trading company, you see, whew, i can capture a 200 basis point spread. that is the flow that will start to happen. betty: we will leave it with your point. jesper, thank you so much. good to see you. bloomberg users can interact with the chart showing you the gtv . catch up on key analysis and save the charts for future reference. david: coming up in the next hour of "daybreak asia" we are

talking about trade. we look ahead to the meeting next week. bullard joins us in 15 minutes from now. rbnz --this is bloomberg. ♪ ♪

david: it's 8 a.m. here and hung, eric -- in hong kong. we wrap up this trading week facing the largest gains but the fairly new session in new york. 10-year up above 3.1%. that takes us to the dollar on sweep up its longest weekly gains in almost three years. we're at five and counting. betty: i'm betty liu here in new york where does just after 8 p.m. on this thursday. china offering the u.s. eight $200 billion trade surplus. it would be hard to deliver or

enforce. as we saw in japan, the key inflation gauge way out of reach. ♪ david: he talked about trade, a lot of people weren't hopeful going into these talks. we didn't get a lot of traction when they met in beijing. now we are getting headlines that may be china might be offering washington something to work with whether that is realistic or not. 200 billion is quite a package of a are able to deliver. how does it look? we've the bloomberg chart that shows you the trade surplus. chinana with its major partners. you want to look at the blue are. trades the monthly

surplus with the united states and how that has evolved to going back to 2000. as you can see it has been increasing. it is continuing to increase. total, you're getting different figures depending who you ask. 280 billion was the surplus. you take that and cut it in half. whether they can do it is another conversation altogether. betty: it is. good to divertf to the u.s. -- a lot of airplanes and whatnot. there are certainly severe doubts about whether china can deliver. it certainly, if you have been fearful about the trade for it seems to be a step in the right direction between the two sides. we will talk more about this, but let's get to first word news with how alan. thanks, betty. reports from washington say china is ready to extend an olive ranch on trade. reduce is offering to

the deficit by as much as $200 billion annually. the news has yet to be confirmed by the white house or beijing. to the talks say that is what is on the table. european leaders are presenting a united and determined rubbed against proposed u.s. tariffs and washington's threats to the randy edsall. the block spoke of what it called the capricious assertiveness of the trump administration. the eu said it continue to fight for a rule race system and won't negotiate without a permanent tariff exemption. but it sees no outright trade war. >> we not going to launch a trade and strategic war against american companies based on iran. that would not make sense because the goal is to get a broad agreement, including the signature of the united states. also said tois have rejected the uk's latest

attempt for a brexit deal. theresa may pitched extended membership. however, we are told senior officials say it is too early to give assurances because of what they call disorienting messages out of london. there could be a rebellion. robert lighthizer says the nafta countries are nowhere near close to a deal. holdoke as negotiators high-level talks. just bigger paul ryan says weeks are left if congress is to approve an agreement this year. my ties are as gaping differences remain. global news, 24 hours a day, on air and at tick-tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. all right, paul iq.

as we were flagging earlier, moderate gains across the benchmarks right here. u.s. futures are moving up a tad. that takes the weekly loss, to 7/10 of 1%. we are also getting essentially a mixed picture across the region. make no doubt, tailwind across the u.s.. when you look across g10, the loonie is the biggest loser. push higher.es to maybe a problem when you look at emerging-market currencies. a few subplots to note. we talking about turkey a lot this week. we have come off those records lows on dollar turkey, but the tailwind of the u.s. dollar playing out on the lira as well as the thai baht. across onlays out

yields in india, where you have expectations essential i might need to hike in two and a half weeks when they meet in the first week of june, 8% is easy work here for the 10 year. a rate hike out of indonesia yesterday. delivering on that pledge to preempt and whether or not that is enough we will see. they promised to do more if needed. u.s. yields trading at 257 on two-year. 312 on your u.s. 10-year and that takes your yields in the curve. approaching 55 right now on the two and the 10-year. 30 year by the way is that 325 as we speak. of horse we, oil will talk about in a moment. we touched $80 yesterday. we are pulling back a bit. the next stop, bear with me here. i forgot to put this in.

bottom, that would be your golden ratio. it is right at about where we are right now. i'm guessing it is two bucks. all right, we will certainly what oil and, as you know rounding to $80 levels. in london for the first time since 20 or teen amid mounting signs of the local what is shrinking. i want to cross to tokyo to erin clark, do all signs point to higher oil? there are a few things that rope oil -- rent above $80 per barrel. first time in three years. the first is global inventories. there is a growing consensus that you have demand more in line with supply. that has been opec's goal the last few years that they have imposed production cuts.

you are seeing results of that bear fruit. are a couple other geopolitical factors underlying that right now. and a silent exports are the lowest in more than a decade because of the political situation. you have the u.s. pulling out of the iran nuclear deal. if they reimpose sanctions and you could see opec's third-largest producer be forced to reduce exports. the three factors are contributing to a high oil prices across the board for brent. that's why see it near 80 right now. betty: what does that mean for u.s. crude export? the higher the oil prices go, are we going to see more u.s. crude oil export? >> definitely. one interesting think that is happening is you are seeing the differential between mobile prices, brent which is near 80 and wpi which is near 71, you are seeing that widen.

there are a couple reasons that. u.s. shall producers will pump as much oil as they can and they will try to meet any global shortfalls. they are doing that and you are seeing record u.s. exports. if you have these significant supply outages, potential disruptions or further disruptions from a ram, and venezuela, there may be limits on how much the u.s. can export. you had goldman coming out yesterday saying there may be pipeline constraints and the u.s. that limit exports to some extent of the coming year. we will have to see how much demand growth there is and also the other factor is if opec lifts their production cuts and allows members to export at capacity to meet future demand. those are some of the factors we will look at going forward. david: big factors. thank you so much, aaron ark.

-- aaron clark. in the meantime, talking about big numbers here. 200 billion. china is said to have offered the u.s. a tribe deficit reduction in the amount of about that level. the news is yet to be confirmed by the white house or beijing. it does come of course as the top trade advisor is holding talks with the trump administration. let's bring in senior editor jodi schneider. help us understand how this might affect negotiations? i'm guessing if it is true it will be a good thing for the u.s.? >> if it's true and what the details are we still don't of the details. but 200 billion and a reduction of trade deficit including a lot more imports would he a big deal. china isalso show that serious about these talks and this would be eight serious give on their part. of course, president trump of the weekend had said they would

the situation with cte and let them get back in business. he said even before this latest news that that came at the request of the chinese president. giving is true and he is them cte and china is willing to give 200 billion, that is a big number. that is significant. it shows everyone wants to avoid these tariffs. however, just before this president trump said he didn't think they would come up with a deal. back and forth. but that is how negotiations go. he is a member of the inner circle and this is a serious delegation. china is serious about trying to do something. and to keep talking. that in itself is symbolic. so, it comes down to the details. that's a lot of planes,

cars, i would imagine. but that is the give as you mentioned it what is the take? it is the u.s. come in and offered china something in return for them putting that number out there? >> the obviously would be part of that. by the way, this was on the u.s. list of demands, what they wanted to see. the reduction in the trade deficit. that is significant as well. i think the question now, what else is the u.s. willing to do? where are they willing to go? the fact that things are on the table of this significance really tells us something. i want to pivot to north korea and it kind of seems like this summit is on shakier and shakier ground here, what is your you on the latest and john bolton's comments about how this meeting would go? >> it does seem to be dimming.

we are hearing that are is real attention now between north and south korea. we thought things were looking rosy after that summit they had a few weeks ago and they called off their summit this week. so john bolton is in the news and president trump came out and said, he publicly rebuffed him ain't it is not a libya model. that is the comment he had made about denuclearization for north lot ofwhich really got a criticism from north korea this week including from the leader there. he said he found the comments repugnant. president trump is stepping back from that thing we don't want a libyan model, we would keep the run to hisnd let him country. but they have not step act from the denuclearization demand. is goingomething that

to be very key in these negotiations. north korean leader kim has wanted there to be a step-by-step approach. so his sharp words this week are really a turn. the trump administration we are still looking at the summit. we have not heard the summit is off, but all of this clouds the prospect for serious discussion. betty: all right, jodi. thank you. coming up on daybreak asia at this hour, month after losing $500 million worth of cryptocurrencies to hackers, japanese exchange declined check ready to -- japanese exchange coin check ready to come back. david: coming up next before that, more on the apparent concession here just sue the united states on trade. we speak with aipac executive director. this is bloomberg. ♪

betty: this is daybreak asia. on betty liu in new york. david: trade tensions are not the only focus in washington. 21 members are preparing to meet and papa new guinea next week. they are hoping to bridge differences in policy and finding common ground to capitalize trade agreements. we are joined by alan bullard the head of the apex secretariat. why are we calling this a pivotal meeting? alan: it is happening at a very important time for all of us. we're hearing a lot about u.s. and china, there is a very big trade machine and a lot of people whose livelihoods depend on this in the asia-pacific.

that is what our focus will be and we will continue to keep pushing portrayed. free ando talk about open trade, now more and more we are also saying it has to be etc. soste, inclusive, we are more fussy about what we are talking about, but trade is still the important driver in this region. of allwhat do you make the back and forth that we are hearing out of washington and the latest being this morning that china is that to have offered the u.s. that they will look to cut their trade surplus with the you -- with the americans by $200 billion a year? complex is a really time at the minute. there are so many threats and counter threats and offers and counter offers. some of it is bilateral and others is multilateral. some is related to companies others to sectors. then you have korea and the whole question about oil

embargoes in the background as well. so really it is difficult to know. at the moment, we don't see trade slowing down. we see it strong in this region. sure ite we can't be will continue. no one wants to see a bilateral trade war. at the minute, the only evidence we are seeing is on some of the share prices of the individual companies to try to model what is happening from all of this. it is too soon to be able to do this. we will keep pushing ahead with what looks to be positive possibilities as trade goes more and more digital in the region. glad you brought up the uncertainty ahead. for moment i was hoping you could put your monetary policy had on for us and help us understand how policymakers are approaching, save the pboc. how are they observing these situations and what do the policymakers do? do you preempt this army for the disruption to happen?

lan: if you are a central bank you are involved in monetary policy and bank regulation. it is not a direct trade inc.. no central bank should be working to stimulate or tighten at the moment race on what they're are seeing. they are there to get stability and keep things going in the longer term. fiscal policy is interesting because the u.s. has a stimulus at the moment when trading conditions and economic conditions are quite good. but policymakers have got to wait and watch. the other big thing on the horizon is where the next that negotiations are appeared we have to wait on that as well. betty: and we heard from robert lighthizer that these nafta negotiations are nowhere near as to a deal. how troubling is it to hear that? alan: the things are really complex. they will take a long time. they took a long time last time.

now because of the supply chain complexities they will take even longer. that is the reality. i don't read anything into that. it's not the sort of thing you can just do and a short space of time. it will take a while and it will take a while to ratify. we will just keep watching. we will keep working on growing trade and making sure it is not slowing down. believe it will ultimately be renegotiated? alan: i think it is quite likely it will that we can't be sure about that. what is important also is that this now very complex supply chain networks between mexico and the united states, hard to just unravel those. in addition, there is a lot of third countries suppliers into the supply chains now. it doesn't just affect those three countries either. think when trade ministers get there, there will be's quite strong messaging from all the

other economies about how important it is to keep these supply lines going and keep trade growth going. david: can i be helpful as a businessman for example, i'm looking at this and planning three to five years ahead, these daily disruptions and the noise that comes sometimes out of news, can i ignore that and conferenceful that is yours next week are able to move in the right direction? alan: i think you can. this is not the 1930's. we will not get that kind of response. it's not even the 1980's and the japan auto disputes. , we are now talking about a trading an environment where we are talking but many products going through many countries as they get built up and assembled and sold. it's in the interest of all those countries to keep the trade lines going and growing and more of it isn't in the

things we are hearing about, in autos and steel, it is in high-tech goods and services and data movement. that is where a lot of the discussion will be and where we are looking for agreement. david: and we're looking forward to those talks next week. apextive director of the secretariat. our exclusive interview with the turkish president, talking all things really. we talked with the economy and the currency and the upcoming elections here it the relationship of the country with it west. do we need to see them play a bigger part when it comes to setting monetary policy in the country that has played out quite badly? check out those times, that is coming up if you are watching out of new york, it is 9 p.m. today. 9 a.m. in hong kong. if that time is not good for you, the interview airs again at

5 p.m. on saturday hong kong time. check that out. this is bloomberg. ♪

betty: david: this is daybreak asia. betty: a quick check of the headlines, abs board has moved to dilute the voting interest of national amusements. they control shareholders, they are doing it right issuing a pro rata share dividend. national amusements is the board's vote was. protects. the network is hiding the redstone's plan for a merger with viacom. david: stuck to watch in india, pointce up by 70% at some on reports that settlement talks

with the indian union of ericsson took off under his speculation the two companies have asked bankruptcy court to hold off on proceedings. there are struggling out of $7 billion of debt with ericsson seeking to recover 170 million in unpaid dues. betty: singapore airlines is rewarding investors by doubling its dividend. there paying out 40 singapore cents or 3.6% for carriers. net income in the year ended high surge to a seven-year of 665 million u.s. dollars. david: coming up next we will be talking about this on -- talking about nissan. read the longest streak of gains, hang on, wait a minute, going back to june of

last year. the end story, the company continues to resist this merger. we dig into other details and options next. this is bloomberg. ♪

david: a: 30 in the morning and singapore. hope your cooling down right out. 30 minutes away from the opening of markets. also, and taiwan, i'm david in less. betty: i am betty lou, you're watching "bloomberg markets: asia". bolivia is no model for north korea. nuclear disarmament should follow the bolivia model. later overthrown and

killed. north korea says such, comments were repugnant and turn to cancel the summit. keepere was no deal to gaddafi. the libyan model was a bunch different model. with kim jong-un, it would be something where he would be there. be very rich.ould his people are tremendously industrious. full has been confirmed as the first female director of the cia. 54-75 senate votes split the party. controversial because of her role in a former cia program to waterboard suspects of foreign sites after 9/11. they've won china's approval of the.

flash memory chip the $18 billion sale 10 go ahead on june the first. . the two sides have awaited a decision from beijing. toshiba retains at stake after the deal to serve. kushner's companies are said to that 666 fifthal avenue. for41 storyteller was bait billions of dollars. fisher seems to have lost money each year. the soccer world cup is less than a month away. the bank has deployed a team of analysts and run computers simulations 10,000 times trying to predict the eventual championship. it says germany will come out on top.

however, such simulations usually do not work. global news .4 hours a day, powered by more than 2700 analysts and journalists in more countries, iany -- am paul allen: this is bloomberg. david: i will shy away from looking at any of the simulations. world cup is coming up. here and now, have a look at markets. we opened higher on the equities face and we are pushing lower as we make our way 30 minutes into the session in tokyo and seoul and sydney. those markets are flat. 30% of 1% on the cosby index, perhaps, signs that was korea maybe easing a little bit. the summit may just get underway in singapore for about three

weeks from now. i will shift this and look at the close markets, rizzo is at the very top. -- brazil is at the very top. the stock market is getting absolutely smacked. the story there really comes back to the central banks surprising by not cutting rates. a tighter policy is a. that is something to watch -- policy is ahead. they topped brazil for a client. it does seem that the finance ministry they come up very soon because of cleaver flushes a few percent target for 2018. the working the something that we understand by the government is 2.5%. that is fairly disappointing if he will. breakdown oft the across sectorwn

groups. industrials are on the lay-ups. we are just about wrapping up earnings. we get a sense of the big movers up-and-down. the dna is down about two to present. here, look at a stronger that is your option. -- estrella here that is your option. pushing towards session lows, 120 on the way down. let's get a sense of what we are as far as stocks are concerned. materials areu, down about 1%. metals and mining as you can see, there is your split. that is down about 1%. as with other big names over in estrella appeared very quick, -- estrella -- australia. the high was back in 2015. it was june of that year.

beyond that, if either look to heal the way back to 2014. yields are on the way up. betty: retracing some historic steps. the bank of japan inflation fight has become harder today with the consumer prices that you saw. slowing in april, that increase hit its 2% market. our global economics fundraiser is here with the pressure that is building on emerging markets as the fed raises rates. the boj is far off from their 2% market. corona, mygovernor heart goes out to you because he is code -- so committed to this. keeping the tenure at zero. buying lots of bonds and of course a contractor and in gdp is the first quarter really casting some shadows over with the bank of japan can do to boost growth and inflation. what happened in

the numbers we just got in the last couple of hours. in the chart, you can follow along on your bloomberg greenline. 3% is a target. well, they have gotten on the main number. they are up to 1% year over year good halfway there. that is back down to 0.7%. you have a nationwide cbi back down to 0.6%. if you take of food and energy, there you are. one thing i think is very important to remember is a story we have that on bloomberg in the last 24 hours, japan wages, 2.1% year after year. that is giving hope that inflation will pick up. of course, coming out of the gdp report, this is temporary. exports will improve again. a fracturing wise, you will get the growth. talking about wages, talking about japan, what people are

treeg, ceo of winston japan, in the last hour, expressed some hope. >> i think that we are just whereat the turning point mr. and mrs. watanabe are saying that this is real and it is a structural improvement and as a result, hopefully, in the next 6-9 months, the suspending power is being unleashed and will raise consumer spending. that, when i hear him say i am listening. he is watch the bank of japan for many years. remember, oil prices are rising. yet all of these kind of thing can boostthings that inflation. it will take a little bit of a downturn. david: when it showed the chart earlier, it may me think. we have been showing that chart

for years. it is not really changed. they were in deflation as recently as 2016. >> i think they have made progress. they had a setback, who knows. i am a glass half-full kind of dell when it comes to inflation in japan is enough. david: we are halfway there. emerging markets, central-bank there. bank of indonesia has had a high. the question is, will they went -- win? >> they are definitely doing what they need to do. they had a 31 month low. dtvs bring up another showing the boe imd to make that rate.

side, go to the left-hand you can see how they were cutting rates for the last couple of years. the circuit to weaken and us picked up and inflation, the bun hill drives good they got hit really hard. the head of the bank of indonesia and the outgoing governor pledged to do more if necessary. the bank of indonesia will continue to monitor economic development and is willing to take stronger measures to ensure its stability. once again, we will do it without a doubt they also said, they are vigilant to the global risks. rising, trade tensions, and more. bloomberg about comics saying that they made you hike the key rate again next month. we are going to watch all of these forces. broadly speaking, this is what is hip and -- hitting a lot of markets around the world. people are concerned. if you have a deficit, you are potentially in trouble.

before headboard governor expressed his concerns about the emerging markets. it is not just emerging markets. it is someone that has been watching these markets closely and continues to be concerned. the fed moves are a risk for emerging markets. david: think you very much kathleen. let's move over to tokyo and talk about cars and mergers. could actually strengthen including, a possible merger. sources are not telling us that they are resisting that unless it gains clout in some key areas. he is been following the talks there. sticking point? nissannow the the alliance has been the most successful and endearing. the two companies are working really well together in the past

decade. servingason for that is the ceos of companies until as recently as last year. , he is going to start his lust for your term as the ceo. the company wants to see the alliance follow part. apart. they are working very hard to find a solution there. one solution could be a holding company for both companies. is increasing across their shareholder structure allowing nissan to ,erger/ull-blown the -- will have to wait and see. betty: what are the obstacles down the road? andven though, both nissan

to defende willing their ties, we need to see a different level of willingness. the nissan ceo has recently said, a deepening alliance should not come at a cost of sacrificing the autonomy of both companies. he does not see any merit in a full-blown merger. our sources, nissan is also negotiating for a bigger role in the future of structuring the alliance. currently, the structure is seen as lopsided because nissan is contributing more revenue and profit to the alliance. nissan does not have any voting rights and we know they are holding a smaller stake. clearly, both companies are very proud companies. they are very proud of their own technologies and capabilities.

there will be a lot of hurdles. betty: thank you very much. japan's auto reported there. plenty more to come on "bloomberg markets: asia." this bloomberg. ♪

betty: david: this is daybreak asia. betty: china's netflix so video had seen it service its stock fluctuate after a rocky day in the gnostic a few days ago. the founder and ceo says investors are taking notice of the company's expansion plans in the crowded social media market. he spoke to bloomberg television excessively from beijing. >> i was a bit shocked to see our stock fall by 13%. on the other hand, we actually had some luck. lots of negative elements were building up tensions.

the american stock market was going through its darkest speed is. the chinese you just trade tensions continue to escalate. several days later, we were not even lust -- listed. now, our stock prices are functioning a lot but we are rising up and are confused about these constant fluctuations. i am certain about one thing, what of investors are paying attention. partneredght actually with the streaming provider including tencent in order to make contact in the future. is this something that has often? -- ahppened? to buytimes, we team up shows. sometimes we exchange the shows we have but with each other. we collaborated at many levels. we work more with tencent. for us toility collaborate or work very closely on self produced comment -- content is very small. contrary, there are

certain possibilities for us to collaborate on the sales. i am only talking about the possibility. i am still doing research and doing initial conversations. talkingounder and ceo exclusively in beijing. the japanese coin championship exchange, it is looking to expand into the u.s.. keep in mind, this is less than four months after the company lost an unprecedented $500 million of virtual coins. but to market losses, but thieves. their but he says the attitudes towards cryptocurrencies will change. the framework for this cryptocurrency in the states is somehow kind of wondering right now. transfer,een money commodity, and security.

it is also different state-by-state. we have to study carefully. the short answer is yes. matsumoto. i heard that of -- sound bite, why is he talking about going into america are ready? are they not struggling from the massive theft? it was definitely a hit scratcher. there is still a ton of rebuilding to do since you anyway. he is excited about the u.s. because he thinks that regulations, crypto regulations, are going to move ahead of what they have going on in japan. the u.s. will be more crypto friendly. you see that happening on two fronts. in japan, crypto exchanges are illegal. licensedompletely process. it is all transparent to be on

that, we actually do not have anything else. we do not have the coin features. moneynot have official when you're coming into the market all. that is what is happening in the u.s. right now. a big debate is happening about whether or not, some tokens are securities or commodities. at the very least, the conversation is being had in the united states of a certain level. sumoto he's a conversation being at least one year ahead in the u.s. than it is in japan. he wants to be there when officials when he starts coming in. what we have the clarity in the united states, you think that the u.s. could be a leading nation in terms of fostering crypto growth. even though, he is still rebuilding from this big tech that is happened in january, he will be looking at of the u.s. and he is already planning to establish if a holding back. keep in mind, they are he have about 600 employees working in the u.s.. they are not starting from zero.

they can build from what they are at a have an check the united states and combine that together with their existing online stock brokerage business. betty: what about the attitude there? a lot of the juices share about 100%. nervous about living up to the expectations/ >> the markets are loving it. it is such a crazy deal. point checklist making so much money, you could have easily have valued it $5 billion or so. is not making money off of the tokyo stock exchange. essentially, it has fallen since then and the hack is happened. say what was would a $5 billion business, monarchs paid $40 billion. still, that is a really low price.

the markets are really excited that monex got a huge bargain. he played a tiny premium for a huge upside. i do not know that is actually going to be true. i think he took a huge risk by point check. fundamentally, whether they can really protect themselves or crypto exchange could protecting cells, that is not clear. i think there is a lot of downside to the point of purchase. whether or not they get back to that profitability, quick check will never reach a evaluation of $1 billion or not, that is not clear. certainly, the reaction has been very positive. they have gone up from a hundred million dollars to about 1.7 billion. it is pretty much doubled. sumoto himself was cautiously optimistic about the possibility of getting back to the same level of profitability.

obviously, there's competition coming into crypto. margins will be depressed. yet the law or clients pay for. you have a lot more internal protections that will cost money. the margins are definitely going to become compressed. he admitted this. his plan to go back to the u.s., he wants to expand the customer base. he is over 2 million accounts in japan. that could grow quite a bit in the united states. maybe he could get back to that level but is a very evident maybe. bloomberg's took reporter in tokyo. do not forget about tv . watch it live and catch up on past interviews. plus, become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only. check it out a tv . this is bloomberg. ♪

betty: bloomberg users can interact with the charts that we have showing on the program. it is featured on bluebird television and catch up on the analysis. it is a pretty big function i would say. this is daybreak asia. i am betty lou in new york. david: i'm david in us here in here ing -- ingles

hong kong. richard is here for the key things to follow. he talked about oil prices and how the pressures are at the moment. can we sustain our prices? there is also that cap. shell would kick in and we would actually see was applied at some point? oil and moving on to all think straight with the representative from bearings. trade negotiations are taking place there. positive things coming out of beijing in regards to trade with the united states. he will be talking about the significance of how this pending move of china's equities is

playing out. concluding with what opportunities they actually see. betty: before we head over to market it asia, to go look at how the markets are trading right now. of course, the focus is on japan after the inflation numbers have come through. the nikkei is up about 3.4%. the cosby is rebounding after the losses that we have heat -- seen here in the united states. market coverage continues next. david: standby for bloomberg markets. this is bloomberg. ♪

china said to be offering the united states a $200 billion trade surplus. skeptics say it would be hard to deliver or even enforce. the throw down in japan taking place, key inflation gauge slotting for a second straight month, leading the 2% target way out of reach. brent crude said to be above $50 for the first time since 2014, amid signs of the glut that is draining away. i am rishaad salon it. -- rishaad salamat. i am haidi lun. why consumer companies are leading the recovery in hong from the loss