haidi: signs of a split, germany says the g7 and not issue the traditional unanimous statement. ramy: fears of a trade war hitting home. j.p. morgan say conflicting comments have cost investors more than $1 trillion. haidi: falling flat, few political gains as australian

wages see no real growth. ramy: five days to the summit, washington keeps the pressure up and says north korea must make the first move. the countdown is on. it is just past 8:00 a.m. i am haidi lun. it is just past 6:00 p.m. in new york. i am ramy inocencio. we will be looking at the action on wall street and how it will play into your asia-pacific trading day. the mood on the markets was one of optimism, in large part because of things cracking in the proverbial trade war. the united states saying they for give concession to zte them to get back into business, and china saying they will buy 25 billion dollars more in terms

of u.s. goods. all of that is subject to change. up.market was definitely haidi: things can change so quickly. it is this on-again off-again emotional roller coaster that we are getting used to. there is a? over the resilience of the rally, but a good session overnight. ramy: let's look at how the markets closed on wall street. they were green across the board for major markets. , a s&p 500 up .9% three-month high. 25,000, the first time since mid-march. the nasdaq is the story here. , itthe third day in a row was up at records because of that optimism out there. haidi: all that optimism. lots in europe as well.

the ecb suggesting they could be close to start talking about an exit from qe. take a look at how we are setting up, new zealand upside .2%. the key weak dollar trading at that level. we have all the action when it comes to the aussie dollar holding. still enjoying that tailwind from that first quarter gdp beat. sydney futures looking positive. let's head over to the commodities part of the story. york continuing to fall after government report showing a surprise spike in domestic crude stockpiles. above $1300, water the cheapest relative to copper this year, a signal of investor appetite and confidence.

, demandutures up by .1% for copper looking strong, close to that four-month high, along with the rest of metals. the index brought mixing a pickup in strength. let's get first word news with courtney collins. merkel is warning of deep splits at the upcoming g-7 summit, saying she would challenge president trump on tariffs and america first. leaders prepare to head to québec. the lack of compromise so far means the group may fail to agree on a final statement. sensual willr's speak directly to the president about trade. j.p. morgan says fears of an all-out trade war have hit u.s. investors in the pocket. a technique tod plot the impact of news about the standoff and found that the

comments and policy changes have 4.5%, stocks down by wiping one point two $5 trillion from the value of the s&p 500. theh korea watchers say regime is destroying its testing facility in one north korean city. it says it is the only known site use for land-based, mobile, medium-range launches. the report comes days before the summit the between president trump and kim jong-un. it is not clear whether the destruction is temporary or permanent. president trump heads towards the summit insisting north korea make the first move and commit to a timetable for abandoning nuclear weapons. official says the president is being advised not to offer concessions to put the onus on the north to make the meeting a success. other officials say the

president will walk out if the talks don't seem to be going well. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. ramy: thank you. more now on the u.s. markets, stocks rallied for a fourth day as hans fell and the risk on mood held. let's bring in our top life editor. tech stocks taking the spotlight, netflix higher, apple a record. 16 stocks in the nasdaq 100 that closed at all-time highs, apple, microsoft, analog devices. apple and microsoft were hitting record highs for the fourth straight session. that gives you the strength we are looking at. movers,couple of other

tesla rising 10%, the biggest one-day game since -- gain since november. twitter about $40 for the first time since 2015. once we hit that bottom on april 2, we have recouped all the losses from the correction, both of the nasdaq composite. this chart gives you an idea of why this momentum may continue. you're looking at the bloomberg cumulative advance-decline line. you can see this in our gtv chart library. advancing stocks minus decliners has been positive for a while, a sign that momentum may continue. it is not just the level. look at that trend line. haidi: what happens when you add in small cap stocks? does it remain as broad as it appears to be?

>> maybe we can take a look at the relative strength index for to strip out0 those small stocks. you only have 20% of that index level considered to be overbought. it essentially a small chunk of the index is making up a large part of the gains. another chart you can take a look at will take you down further. this index is a basket of 10 stocks. you see the separation. percentage returns on the nasdaq 100 and the line at the top is the inlet as he fang index. look at the separation. the gains have been much higher than what we saw for the nasdaq 100. names in make a cap the nyse fang index, amazon, alibaba, baidu, they are making

up a huge part of the gains over the past few weeks. haidi: heavy lifting for sure. thank you so much. our bloomberg top live editor. let's look at other stories making headlines. the white house once north korea to commit to a timetable to surrender the country's nuclear arsenal when he meets president trump next week in singapore. let's bring in our editor with the latest. about u.s. offering hence what they could be giving in return? the white house advisers are making the pitch to the president that he should offer no concessions going into the meeting. it should be pointed out that president is known for his improvisational style and going with his got when he feels like it. it is unclear what may transpire once they are in the broom and talking. insist the president is ready to walk away if he does

not get a firm timetable for when north korea would start dismantling and getting rid of its nuclear armaments. they are dangling the prospect of a second summit meeting and an invitation to kim jong-un to mar-a-lago, which would be something of a tantalizing prospect as it gives additional legitimacy to the north korean andrnment and to kim raise his stature within north korea and other parts of the world. ramy: rudy giuliani came into the picture today making controversial remarks. wasaid kim jong-un basically on his "hands and knees" begging for the summit to take place. how are his remarks likely to play in north korea? >> north korea has historically shown itself to be sensitive to slights, statements by people in

other governments, particularly in the u.s., anything that diminishes them. that is one of the big things that is on north korea's agenda, the legitimacy the summit will kimirm, and diminishing will not play well. onlygiuliani says he is speaking for himself, but he is known as the president's lawyer and speaks for the president on other occasions. we have not seen any reaction from north korea, but it is certain to be under the surface as we get closer to the talks. of a: certainly not much charm offensive if that is what they were going for. spoke at the white house earlier and touched on this trade spat with the g7 allies. are talking everything through. there may be disagreements. i regard this as much like a

family quarrel. i am always the optimist. i believe it can be worked out. might beunds like it more than a family fight, right? >> right. it could be one of those family dinners where everybody gets up from the table and leaves early ff.a hu justin trudeau will be hosting the g7 meeting in québec. he has called the sanctions or wantss the administration to put on canadian steel and aluminum as insulting. angela merkel was talking about how she is ready to confront trump over some of these issues regarding trade and multilateral relationships between the u.s. and the eu on a number of different areas. it seems certain the president will be getting and your full while he is there.

he is not known for taking kindly to such criticism. , perhaps they end up the first of g7 where they are not issuing a communiqué at the and has an agreement on all the things they agree on. haidi: sounds like an awkward thanksgiving dinner at the highest level. thank you for that. still ahead, the president and ceo of churchill asset management said some investors may want to add private debt to their portfolios. ramy: that is later. up next, wells fargo's joins us to explain why the u.s. bull market is not over. this is bloomberg. ♪ . this is bloomberg. ♪

ramy: we are counting down. haidi: we are counting down to

, looking sydney open quite positive, especially after asia-pacific stocks closed at the highest in three weeks. did get gdp out of australia lifting investors as well. i am ramy inocencio in new york. haidi: you are watching "daybreak: australia." let's talk about the markets, particularly this resilience. we've had this on again, off again geopolitical tensions and trade. weighingf easy money in on wednesday. u.s. stocks extending gains, bonds falling. let's get some insight with the senior equities strategist at wells fargo investment. if you want to talk about the resilience or the fragility of

the risk on mood, i want to throw up this chart from our gtv library, high yield levels we last saw in 1997 and 2007. you see this bullishness when it comes to u.s. high-yield debt segment. if you broaden this out as a litmus test for the broader market, is there a sense that investors are feeling overconfidence and the next wave of volatility will catch us out again? fixed incomeink guys would want to be overweight high-yield. they are underweight high-yield. i don't know if you can use that as a litmus test. the valuations on the s&p 500, are they above the 30-year rolling average? yes, they are. we are up at 18, a touch above that. anticipation into this market no doubt, but for us

in our target this year, 2850 is the middle of our target range. we are probably 3%, 4% away from that right now. , not wildlyistic optimistic. i think the high-yield market might be wildly optimistic. i think we have more upside to stocks. we will spend time shopping around. it will still be volatile, but net-net higher at the end of the year and walk out of 2018 with 7% to 9% total returns, maybe 10% in the u.s. market. haidi: what about that rotation week kept talking about since the february selloff from growth into value? the nasdaq hitting another record high, resurgence for the fang stocks. >> i think it will be really

for value to outperform for anything other than a brief time. financials to do well. that has a lot of value stocks, ofbe 12%, 12 percent, 13% the market cap of the s&p is in financials, but technology is discretionary is another 12%, 13%, so you are close to 40% of the total market cap of the s&p 500 in tech and consumer discretionary. , the fang stocks in these hot stocks are in these two sectors. even if they participate to the upside, it will be virtually impossible for value to make a good run late in the cycle. i think we will see a pickup in terms of gdp growth, but we will

not see a surge in gdp growth on the fourth quarter kind of basis. growth will continue to outperform, and the next time value consistently outperforms will be midway through the next recession, whenever that is. ramy: in terms of the risks, the headwinds, you do how play a lot of them. for example, inflation, slowing growth around the world. we have a chart from the world bank showing the pace of growth is expected to moderate, not just globally, but for the u.s. as well as china. if anything, it shows it is not going up. whenis your own forecast it comes to slowing growth? in the u.s., 2.9 this year. that is better than last year

and for the last 10 years. i think we will see growth in the u.s. improve a little bit, but one of the biggest risks out there, and certainly what has caused market volatility, has been a fear of slow down. our number for china is 6.2%, below consensus. have rolled over. a risk.that is a the biggest risk is a fed makes a mistake. if the fed raises rates more than three times in 2018, that is a mistake. if they start talking about that come raising rates four times maybeear, and four times next year, that will be a headwind for the market. the fed is the number one were in my book, but second is we see international growth slowdown. ramy: in about 20 seconds, trade with american

airlines, what are your thoughts on that? >> i think in all out trade war is a slim possibility. i think the market has been able to shrug it off because we have g7. the market wants concrete things. we have traded down on rumors before. we want to see clarity, but i don't think we will have a trade war. ity there. positiv thanks. you can get a roundup in today's edition of daybreak, dayb on the terminal. it is also available on mobile in the bloomberg anywhere app. you can customize your settings so you only get the news on industries and assets you care about. this is bloomberg. ♪ . this is bloomberg. ♪

ramy: welcome back. i am ramy inocencio in new york.

haidi: you are watching "daybreak: australia." facebook under fire from u.s. lawmakers after revealing data sharing partnerships with four chinese companies, including huawei.y -- what are lawmakers saying? >> all the senators have in some way mentioned this. fuel on the further fire over privacy. not exactlyve decided what are the rules that need to be applied, but they can all agree this is not what people thought was happening when they were using the facebook app. could we see mark zuckerberg back in washington anytime soon? contraryok said that

to some concerns from lawmakers yesterday, there was no actual data from facebook start on -- stored on huawei servers. facebook said it had reviewed the contract with cambridge analytic a, and that turned out to not be true. maybe they are concerned they have not fully fatted the things that could go wrong here -- fully vetted the things that could go wrong here. i'm not sure we have heard specific calls for testimony. what else did we hear from the chinese companies? say they havees these partnerships in place with facebook to allow deeper integration with the devices they sell with the facebook app. facebook does not sell iphone,

so they have to make sure the facebook product is on all the devices realm the world. that's why they have to inter-into agreements to make sure that even for devices that don't have an app store that you can still use facebook. thathas been something uses data from people in ways they did not expect or were not informed of. ramy: huawei is such a politically sensitive company. why would facebook inter-a deal with the company like this? >> huawei is one of the top phone manufacturers in the world. facebook wants to be available to all phones. facebook put in place somebody to make sure that each one of these times that huawei build an facebook branding that they had checked it and make sure to test it and it was not sending data back to servers. we will see if that is true.

ramy: thank you very much. indonesia's new chief gives bloomberg his first interview with international media since taking office. that is next. this is bloomberg. ♪ . ♪

haidi: it is 8:30 a.m. in sydney, markets look to open in a buoyant mood. weures higher by .5% as track another session of gains overnight. i am haidi lun in sydney. ramy: ramy inocencio in new york. you are watching "daybreak: australia." let's get first word news with courtney collins. >> first up, paul ryan contradicting president trump, saying there is no evidence the fbi spied on his election campaign.

ryan says he agrees with trey gowdy that russia was the target of the bureau. said it does not mean the -- president's team were infiltrated. >> we are waiting for darkness review. we still have questions. it would have been helpful if we got this information earlier. if we got all the information we were looking for, we could wrap this up faster. i have seen no evidence to the country of the initial assessment german gowdy has made. >> the new italian prime minister is seeking to reassure markets with a pledge to reduce the country's debt burden. the former law professor had unnerved investors with promises that could cost $120 billion in

the first year. he told the lower house that he expects a gradual reduction of debt. the latest wage data in japan it will finally drive pay and inflation higher. the jump in overall cash earnings was the biggest in years and raised expectations of robusta gains. .8% andpayrolls household spending fell for a third straight month. imports in india shrunk 39% a fifth monthly decline as the world's second-largest consumer enters a weak period for demand. tons from 166 metric tons a year earlier. inbound shipments are 40% lower through may. june to august are often a slow period for gold buying.

global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. get more has trading gets underway. garfield reynolds is with us. some big news for the bond markets. about ecb ready to talk an exit. >> that's right. italy has vanished as a concern. we prime minister is saying respect the concept of debt reduction, so everything has called down on that front. speakerscouple of ecb that indicated next week is a good chance the ecb will announce it plans to end bond

buying by the end of this year, september. we have a chart we can show you on the terminal on the gtv archive. that a see from this week or so ago we had that big spike in italian bonds. and treasury yields went down. that was flight to safety because italian bonds were causing panic. italiant, a tie-in -- treasuries and bunds went up. lessbond buying means demand and higher yields. that will have an impact across bond markets. stocks, stocks suddenly don't seem to have a problem, not with trade wars and with yields getting higher. haidi: what are you expecting for asia on the equity side of things? the it's one of those days where

it seems the trade war will not happen. >> it does seem like that. today will see a strong start in asia. that is what the equity futures are showing. the interesting thing is we had a story overnight taking a look at the idea that j.p. morgan says the trade wars have cost stocks $1.25 trillion from the is notket cap, so it that there hasn't been an impact, but the impact has not been enough to overcome other drivers like u.s. tax cuts, global growth momentum, general optimism. we have that blowoff top at the beginning of the year, then came back down. were was an expectation that would bounce back strongly from that correction. we bounced back, maybe not as

strongly as we would have if we did not have the trade wars. ramy: we did have earlier i guess saying 2900 by the end of this year, so still some upside. garfield reynolds. don't forget to check out our gtv library on the bloomberg terminal. forces pushing global central hass toward tighter policy been in full force in the past 24 hours, especially as the reserve bank of india the fight consensus and hiked its key rate for the first time in four years. our global economics and policy editor kathleen hays is here. those's give caps off to a out of 43 surveyed who said rate hike is coming. the consensus was no. they were right. the key force probably driving

them now. from look at another chart our bloomberg library that shows you three important metrics. this is the key rate for the reserve bank of india, from 6% to 6.2 5%, the first hike since 2014. this yellow line is oil prices. they have gone higher. india is so dependent on oil. come cpihat it has hit 4.6%, the target 4%. that's why they felt they had to act. there is hope. their statement had a dovish tilt. , thesaid one keyword decision of the monetary policy committee is consistent with the neutral -- there it is -- neutral stance in monetary policy with the objective of achieving the medium target for the consumer price index inflation a 4% within a band of plus or -2%, while supporting growth. means wee saying this

will keep hiking rates, sit back and be data dependent. a lot of people are thinking it could just be this one. they did say in the statement that oil price volatility and developments in global markets are creating uncertainty around the outlook. meeting,hing in this they are taking steps to improve regulation and deepen financial markets at a time when banks aren't buying bonds and there are so many things going on. they are taking steps to smooth things out. i let's head torb the ecb. this could be a pivotal week ahead. we might get word that may be -- >> they did talk about being on the verge of something big. the meeting wraps up june 14, a watershed moment. a chief economist at the is notn central bank, it

surprising that he gave a speech that the first formal round of talks on announcing a day to end bond purchases will be under consideration next week. let's listen. clear next week that the governing council will have to make this assessment on whether progress so far has been a gradual to warrant unwinding of our net asset purchases. assessment, it is important to consider the underlying growth of the economy and to what extent actually this is passingssment formation.wages and >> it affected bonds in the u.s. as well. people are figuring the bond purchases will be over by the end of the year and rate hikes could start in 2019.

inflation coming up to the ecb target. that gets in the window to act. the thing about italy, even though it has been a par 4 force in the last few weeks, right now risks seem to be contained. godoes seem the ecb can ahead with this step without much impact on the bond market italynegative way as if was a full boil. haidi: thank you for that. and inflection point for the ecb. enjoyed a hiring surge come adding one million jobs in five years and outperforming the labor market in the u.s., but offering the government little political capital with wages seeing no real growth. more people getting jobs come just not getting pay rises. >> that's right. yesterday's data, 3.1% growth.

it is beating all g7 nations. a budget coming back to surplus, one million jobs, i mean, what you have to do? they are a beautiful set of numbers. you are right. but itumbers look great, is this differentiation between what aggregates show and individuals feel. seeing thate disconnect between the labor market, inflation, and wages growth pretty much everywhere. ramy: this is not an australia issue. some of the other countries in the developed world, they had a terrible recession and high unemployment. australia skipped through that. i think people become used to asset prices and wages going up. when that's not happening, someone is to blame. it is an extraordinary thing.

if you're looking at it as a government running an economy, you can't do better than this. as ane thing you could say worker is if you look at the distribution between the prophet companies are making and the pay rises workers are getting, it is start, the divide between those two bank. the share going to capital is much greater than labor. that is something to watch. just waiting for it to turn here. haidi: thank you for that. our bloomberg austrian economy reporter talking us through the downside to what has been an exceptional set of numbers for the australian economy this week. ramy: especially when you think one million sounds like a lot, but wage growth affecting a lot of folks. a trial by fire for indonesia's new central bank chief, perry warjiyo. he has had to react to an emerging market selloff and hike rates twice in two weeks.

,hat help to prop up the rupiah one of the best performers in the emerging markets space. in his first interview as governor, perry warjiyo spoke exclusively to bloomberg and says his quick action has worked. lessons, you key have to preempt the uncertainty. this is the first thing we did, preempt the uncertainty. of possibility or impact fiscal policy in the u.s. the increase in the risk premium. these are the things we did. preempting this uncertainty, the rupiah has been quite strong. >> you talk about preempting, is there a need for another rate

hike? goldman sachs saying you probably need one in the third quarter, if not in june. >> we will continue to collaborate domestically and locally to align the interests in the term. is, yes, there is a possibility of a hike, and the timing will be measured and our calibration of new information coming. >> you talk about being ahead of the curve, what assumptions are you making about the fed next week, and how closely are you watching it, how closely will your own policy decisions be linked to that? >> how domestic economy is strong.

there is no reason to respond in the policy monetarily for domestic reasons. 3.6%, within our target. now it is 2.1%. there is no reason. for the longer term, we want it to be lower. banking is quite strong. andou touched on the rupiah wanting it to be stronger. what is fair value of the rupiah? is always ae dynamic and depends on fundamental indicators. the inflows in the portfolios in the development of the risk premium in the market. know developments in

february with imports strong, but since february there have been capital outflows, strengthening again, so we are seeing the development of inflows again, but not to the level we want. .his is cutting the development >> how deep is the pocket and how much can you intervene to prop up the currency? >> we stand ready if there is pressure in the market, like the one since early february. the marketsthing are in the process of adjustment. we need to step in , not to intervene in the market, but the adjustment that

is small. haidi: that was the bank indonesia governor perry warjiyo speaking with bloomberg. coming up next, we will speak with church asset management president and ceo talking about investor appetite for private debt. this is bloomberg. ♪

haidi: miami haidi lun in sydney. ramy: you are watching "daybreak: australia." stocks around the world may be performing pretty well right now. in asia, there is a new emerging asset class, private credit. that is what brings our next guest to hong kong. he is president and ceo of churchill asset management. talk to me about the appetite for investors in asia for the

reason you are there now. debte appetite for private in asia has been quite good. we have seen a significant amount of capital raised billion, roughly $180 in private credit, and asia continues to increase in the appetite from asian investors continues to grow. certainly an important driver for the asset class. ramy: if you break this down whats the region, countries, territories, are attractive for investors are would be investors to look at? >> sure. the we have seen is strongest interest coming from japan and south korea. japanese investors are looking for more conservative income.

private credit provides that. we have seen interest there and in korea, south korea has been an active investor in private credit as well. , andalia continues to grow obviously hong kong come up but the two principal markets where we have seen the most interest have been japanese and south korean investors. ramy: talk to me about rates of return. we are still trying to get out of that low rate environment with fed hiking, countries trying to pull out of that, india, indonesia, etc., but what numbers are we talking about here that investors might be interested in? >> middle-market secured loans, which we do and is certainly one of the more significant hearts , provides. market typically 7%, 8% current yield come and obviously in the

current environment pretty attractive in the sense they are senior secured and floating rate in a rising rate environment and offering inflation protection as well. haidi: you talk about the democratization of private debt. i'm curious what you mean by that. >> if you look at private debt 10-15 years ago, it was the province of larger pension plans, insurance companies, and other major institutional investors, primarily in the u.s., but also europe and globally. what we have seen is that increasing the there are vehicles being created that allow the smaller investors to invest in historically private other, primary funds and more public, liquid vehicles are now starting to increasingly

access private credit, which have been the province of the larger institutional investors historically. an ability for individuals, high net worth investors, to take advantage of what they see as a pretty attractive, risk-adjusted return. haidi: where do you see the strongest demand? with all the optimism about the chinese opening up and financial reforms that you expect to see more interesting opportunities in that market? >> we are. we have then meeting with institutions in china who are exploring, looking at the u.s. market in particular. it is a very large market. learn are surprised to the u.s. middle-market on a standalone basis would be the third-largest globally, 200,000 companies, a creation of roughly

a third of the jobs in the u.s.. it is a big market and one increasingly chinese investors and institutional investors are looking at, certainly investors in hong kong, southeast asia, so certainly growing in interest. last year, we saw a record year of $180 billion raised. year, $35ter this billion, so certainly an asset class that is viewed as providing very attractive risk-adjusted returns, generally less volatile than the public markets, so increasingly popular. haidi: thank you for joining us. up, don't miss an exclusive interview with ken 9:00 p.m. in sydney, 7:00 a.m. thursday morning out of new york. this is bloomberg. ♪ rg. ♪

ramy: welcome back. twitter is celebrating its entry into the stock market they colleagues by selling $1 billion .f lawns in a debt offering the sale comes as the company joins the s&p 500 thursday, forcing funds with trains of dollars in assets to own it. lasts have doubled from year as the platform pushes them to live video and personalized content. haidi: amazon expands its u.k. workforce by 10 percent this year despite uncertainty over brexit. 2005ompany is creating hundred jobs in machine learning to customer service. with a nine months to go until brexit, traditional retailers have cut thousands of staff, but amazon says it remains committed to the nine the kingdom.

that is just about it for "daybreak: australia." daybreak asia is next, a huge lineup with the asia trading day just getting underway. a pretty strong lead from wall street. this is bloomberg. ♪

>> it is 7:00 a.m. in hong kong. welcome to "bloomberg daybreak: asia." says thefic market global rally on optimism that an all-out trade war can be avoided. ramy: and i'm in new york where it is just past 7:00 p.m. on wednesday. fears of trade war is racking up . jpmorgan says the tension has cost investors more than $1 trillion. we are