yvonne: 7:00 a.m. here in hong kong. where live from the asian headquarters, on the yvonne man. a come to "bloomberg daybreak: asia." the top story, asian stocks are set to advance as trade tensions are on the back order. -- back burner. slide continues. a bloomberg survey says authorities are perhaps intervening at a key psychological level. kathleen: and i'm kathleen hays in new york. just 7 p.m. on this thursday. the fed forces six u.s. banks to scale back payouts. deutsche bank fails the test entirely.

president trump toward a new wisconsin plant. new wisconsin plant. yvonne: kathleen, let's kick it off on friday with breaking news out of south korea. industrial production numbers year on year coming in. they are in line with estimates growing 9/10 of 1%. month on month seeing it 1.1% gain which was much better than what the economists were expecting. it is slowing down from what we have seen in previous months before that. we have seen signs of this within the economy whether it is export growth having a slowdown as well, and there is a lot of questions about the one as well -- juan as well.

still, they are in the crossfire here within u.s. and china trade dispute. kathleen: every export dependent nation in asia is watching exports, watching industrial production very closely. we are watching japan's industrial production later in the show. stocks managed to rebound today. bonds was bac -- bonds pushed back a little. you can find this gtd on your bloomberg terminal. what i'm showing you is the msci index which has fallen sharply. the jpmorgan emerging market indexes also down, although a little bit of a rebound. it is true, if you take out china, it is not bad. if you are just looking at asia, this is a picture that is pretty clear and, in fact, more and more traders in the u.s. and around the world are watching what is going on in asia. in terms of the close, i'm

on the up our wei chart major indexes. you can see an increase from .4% and .8%. a moderate rebound. people are still waiting for another shoe to drop on trade. that is something that will happen friday on wall street. yvonne: the week will be crucial given the fact that we have this tariff announcement on july 6. all of the crucial data out of china as well. here's the setup for asia. it looks to be better given the backdrop from wall street. in walleeing the index street. all the futures point to positive and this oil rally further on here and nikkei futures are flat right now. we get cds and gains in tokyo as well. currency,about

especially given the volatility we have seen in em. here's what we're looking at right now. 1050 --ar-yen is 100 .50.point 50 -- 110 one has been down for 11 straight days. there has been speculation of intervention into the onshore markets. we are still holding on to some decent losses for the week. of course, as you mentioned, kathleen, when it comes to the bond market, it seems all quiet. you see income spaces, the yield taken up by one basis point across the board in australia and the u.s.. kathleen: it looks a little did of quiet is making traders happy for a day or so. [laughter] kathleen: let's take a closer look at the action on u.s. markets with su keenan. test --ed's latest reps

latest stress test but the banks in the spotlight. >> there were six banks ready to do the payout. they had to bring in their proposals because the fed wants them to have the capital reserves and pass the test, they have to pay out 28 banks moving forward with it. one deutsche bank failed. let's go to the chart. you can see this is a bank under pressure. a very tough year in so many ways. it is the u.s. unit that is having problems. what the fed said is the 18 domestics take a qualitative section of the exam, and the finding shows authorities added to a list of troubled lenders last year. let's go to the panels of how banks performed after-hours. we saw investors buying in to jpmorgan and morgan is under a bit of pressure. that makes sense. it will be interesting to see.

with jpmorgan and goldman, all among these financial firms, they had to scale back proposals and goldman sachs and morgan agreed to freeze their payouts at previous levels. american express, and t bank, and others had to temper their initial request. that is to make sure they have enough money on hand, 28 banks can proceed with the proposals because they were found to have enough capital to whether a hypothetical economic shock. that is what these tests are about. dtv is where you can find these charts. this one tells us the story where been talking about. 13 days unprecedented decline for these banks. look at this. they were finally up and that is important. they have been down because of concerns about the lower yield and that affects profitability. let's go to the panel of how the stocks performed in the regular session.

theere in the green as markets retired. kathleen said, without any trump tweets, it looks like they had a chance to move forward. one more panel for you. winners and losers stocks. well. dwell -- did look at these health care stocks. the drugstore chains were down and amazon.com, the huge online giant fought an online pharmacy company. lookout guys. investors were concerned. yvonne: other sectors are grabbing the spotlight. you mentioned oil and attack as well. at 74., we are waiting let's start with the rebound. it was quite a big bounce. >> it was the biggest rally in four weeks. the size of the gains really tells a story. snap is an ipo under a lot of pressure. and a lot coming in, of these chip stocks are down as of late.

the bottom company is a software id company. big again. about gain, q the three-year que the oil -- three-year chart of oil. if you look at the last 60 days. i have one more try for you. you can see it is a rapid rise ever since they wanted to bring the price of oil down. pressure was being put on saudi arabia to pump more and never really brought prices lower. when the pressure was put on exports, not the by iranian oil, that shot oil through the roof. there are now predictions that we are looking at the biggest monthly gain for oil in a long time. and the price short-term, the election is higher. -- erection is higher. yvonne: yeah, sue, thank you.

let's get to our top story. president trump has taken part in the groundbreaking ceremony in wisconsin. this is 30 miles from harley davidson's headquarters. the president repeatedly criticized this week. trump a strike to make the case that his economic policies are making off -- paying off ahead in ahead -- paying off ahead of a midterm election. joe, how is this move playing out in wisconsin at the moment which is important politically for mr. trump? >> the foxconn plant, this which willing eventually employ 13,000 people came at a good time for trump. he is a getting a lot of flack from republicans over tariffs and the retaliatory tariffs that affected harley davidson and is prompting the company to shift operations overseas. of favorablea lot

opinion in wisconsin on the tariffs based on recent polls there. the president is trying to that will be jobs brought by his overall economic policy here at the foxconn plant. there is still some skepticism about whether all of the promises will be able to come true, but right now, he has a good message to counter some of the spillover effects from the tariffs. of this before the crucial summit between president trump. and vladimir putin today we heard from the president and he seemed to suggest russian denials from election meddling, joe. >> this is similar to statements he has made in the past saying president putin has denied it, seems a sincere, and this really his to the tellings of his base and his domestic political sense. the russian meddling

investigation and accusations that russia interfered with the 2016 campaign go to the heart of trump feeling that those allegations delegitimize the selection and it seems to be very important for him to do that. he is also gearing up for this coming summit with vladimir putin after a meeting with nato members, which is something that is liable to be practice as a tris as a- frac meeting. they want to reset russia and fix the bad things behind it. however, he is not publicly wouldsed any idea that he confront putin over the allegations. joe, republicans are cheered by a possible supreme court nomination and the president once to get this done as quickly as possible. how is this going to help or hurt the party going into the congressional elections?

supreme court justices decide on some he thinks -- so many things. joe: this is a driving force for the significant part of the republican voters. there are many lawmakers in the senate and house as well as voters out there who are really going to forgive the president quite a bit. just so they can get the supreme court nominees they want which is to push the conservative direction. this is a motivator for them. this is also a major motivator for democratic voters who have also seen the supreme court as a big threat as well. the democrats are highlighting the possibility that they could overturn obamacare protections for requiring assures not to reject you for pre-existing conditions and the right of women to seek an abortion also

could be on the line with this. realth sides, there is a way to energize their base and it is going to be going all the way through the fall until the court nominee is in place and probably after that. kathleen: i've already heard conversations. yk, thank you so much for joining us. let's get right to the first word news with jenna degen heart. >> the white house says it strongly condemns an attack on innocent journalists after five people were shot and killed at a newspaper office in maryland. a reporter at the capital gazette tweeted a single gunman fired into the newsroom and shot several employees. they described staff hiding under desks and said they do not know why the government stopped firing. officials say a white male is in police custody. tougher federal reserve stress

tests have affected more banks and caused them to scale back proposals to dolby back -- to pull back on money sent out to shareholders. deutsche bank failed the latest stress test because of " widespread and critical deficiencies in planning." a bloomberg survey of traders and analysts see china stepping into support the yuan once it approaches the u.s. dollar. that is 1% below current levels. the dramatic dissent has currency traders on edge, but they are not to panic and. that is the take away from the barometer of sentiment. the wall street journal says john kelly is expected to leave his position within the coming month. president trump consulting advisors about possible

replacements. front runners for the job are said to be the chief of staff to vice president penn, and mick mulvaney who has a process of management and budget. day, onews, 24 hours a air and on tictoc on twitter. powered by more than 2700 journalists and analysts in more than 120 countries. bob format weighs in on what china may do to defend the yuan. yvonne: td ameritrade and their strategy in a time of uncertainty. this is bloomberg. ♪

kathleen: this is "bloomberg daybreak: asia." i'm kathleen hays. yvonne: and i'm yvonne man. all street higher on the last trading day.

on for em stocks and currencies. falling since 2015 while treasuries launch with the dollar. john cruz with ameritrade, thanks so much for joining us. we've seen some higher drifts overnight but we see angst in this part of the world whether it is trade or fed timing. is this a dead bounce that we are seeing on wall street? bit to bee's a little said about getting way from the most recent trade tariffs and recommendations on the terror -- table. we don't see too much rhetoric dialing up. you will see markets settle back in and really start looking at what is going to come before we hit the july 6 deadline next week. what we are telling our clients is you want to be paying attention. whenever you start to see a lot of the rhetoric start to heat

up, you see markets pullback and you see it dry. markets will recover and bounce back a little bit. you see the vick pullback -- the vix pullback and the 15 level on the vix is an important threshold. when it gets below the 50 level, that is when we see a decent rally across the board. --, right now we see a little more volatility back-and-forth. overall, we've seen pullbacks around the trade talks, around any sort of this coming out of the administration. --is representative i represented by opportunities. just be cautious. we were talking to a previous guest this week. of the domestic related companies, it seems the selloff was a little different than what we have seen in the past read is a getting harder to

buy on these. is this a signal that perhaps we are in for more of a downturn or the start of one? felt a littleloff different and felt concentrated in a lot of these things. they were a little less reactive to some of the tweets. a lot of investors thought because of the tech space, it will be different than boeing or a bigger industrial. this week is focused around tech and a lot of those high cyclical companies. that was a little different in what you are not seeing for focus volatility. this as at to see buying opportunity, if you look at facebook, apple, and others having pullback in february, some of our clients were able to go and buy in at low levels and they rotated out a little bit. if you want to go in and use that strategy again, it is important to make sure you are managing risk and not going all

in all at once. you maybe want to scale in or use options to get exposure. kathleen: let's look at the big picture greed let's do this in part by looking at what financials have been doing going into our bloomberg library from one of our g #btv charts. is thisshows record-breaking streak of losses for the bank, it has ended for now. a nice bounce year, but we had a guest earlier on our show who said that for him, from jewel financial, he joined us from lexington, saying that when you see bank stocks looking iffy, you are perhaps looking at something that could be problematic. atsaid that if you look back 2007, we saw bank stock starting to break down, they're not breaking down like that. is it a warning though?

shawn: the thing right now, banks are going to lag the rest of the market. so far this year, we have seen a pretty strong performance out of i.t. and banks are negative. what you need to see for banks to rejoin the rally is going to be a little bit of her resolution around some of the straight talk and rhetoric that seems dialed up week after week and seems every week they throw another zero on this to tariffs they are recommending. get out of the terror of talks and move past this, that is the one thing holding banks back. yield curve,t the you're seeing the log flatten out because these growth stories get called into question. storyk the global growth will come into play a little bit and start to see it get dialed up. a good steepen the curve up.

we certainly saw signs of a healthy banking sector today with part two of the banking sector. growth, u.s.estic growth, gdp down to 2%. a lot of people are thinking of three and a half percent or 4%. what are you looking for? are you positive on outlook for stocks? shawn: i think so. not only gdp but also corporate profits, i think the gdp numbers first quarter, there were a lot of weather affects and a little bit of dampening down of the number. we'll expected the first quarter to be weak. see numbly their first quarter -- seasonably their first quarter is weaker. i think there is a strong recovery expected to come out of second-quarter numbers. the first quarter is coming in around 2% isn't as bad as we have seen out of previous first quarters. i think we can see plenty of positive momentum to carry us in to the remainder of 2018.

cruz, think you so much for that. american trader -- td -- ameritrade. catch up on key analysis and save charts for future reference on the bloomberg. keep it right here. this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia," i'm yvonne man in hong kong. kathleen: i'm kathleen aides -- kathleen hays in new york. pack,quisition of pill the billion-dollar acquisition is expected to shakeup the prescription drug industry, challenging major pharmacy change -- chains.

walgreens and cvs fell on the news. yvonne: bloomberg was told that 20% three fox shareholders are set to vote on july 27 on the $71 billion offer on assets. the meeting is scheduled for 10 a.m. at the and you are kelton. -- new york hilton. this gives it another edge over comcast which is also vying for the assets. kathleen: they're planning to get more bridgwater employees ownership as the firm moves toward its decade-long succession plan. this would give staff a greater say in government -- governance. we are going from a company in which i led the company in this way and now we're going to something that might meet broader and more formalized partnerships. yvonne: coming up next, all but

one of the biggest banks posted a passing grade in the second round of the fed's stress test. . more and what that means -- more on what that means. this is bloomberg. ♪

yvonne: happy friday. a beautiful look outside in tokyo here today. if you -- we see futures pointed up. decent rally on wall street and during the last of the quarter, we are looking our wounds. the worst quarter in three years. kathleen has been watching some of the breaking they does coming coming outn -- data of japan. kathleen: the job advocate ratio has moved up to 1.60. that means 1.6 jobs for workers. moved down to 2.2%.

it'll be interesting to see how markets,cts japanese and certainly labor markets are governoris is what the of the chief of the doj is saying. i'm sure he is very happy. we shall see. let's get right to the first word news with jenna degen are . . -- >> days after what could be a tense meeting involving donald trump and america's closest allies. the president has accused nato of irrelevance and called for russia to be reinstated to the g7. trump has met with putin before but this will be their first formal summit. in wisconsin, president trump broke ground at the massive technology campus.

he tried to make the case that his policies are paying off ahead of november midterm elections. trump says the foxconn project will contribute $3.4 billion annually to the economy and create 15,000 jobs australia has awarded a 26 billion u.s. the contractor will design nine antisubmarine ships which will be constructed by shipbuilding in south australia. the warship will enter service at the end of the next decade. andes climbed in london italian bettors swamped. the latest abruption of a places like jet .tar has canceled flights 150,000 are forced to

leave their home. 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'm jenna, this is bloomberg. yvonne: thank you. trading is getting underway in asia. adam's joining us from sydney. adam, it is really going to be about china. another brutal day. had we assess the damage now, two weeks later, and at what point do we see intervention to the currency? yvonne that question around intervention is crucial now. we've seen signs this weekend speculation in the market that maybe authorities have already been in the market. what we have done here across of market is survey a number traders and analysts and they point to the 6.7 dollar level.

chart, thatyour looks like the next key psychological level we're looking at now in terms of support for the chinese currency which has been under tremendous pressure as of late and as well as the stock market. the domestic slowdown story itself, weak retail sales, industrial production numbers, people dieting -- dialing back there gdp forecast. it is also the escalation of the trade war situation in the sentiment the teary rating in the currency and the stock market. is, will the 6.7 percent level trigger intervention from the authorities. there are a few differences to what has happened in the few weeks -- last few weeks. some point out the devaluation back then was a lot more severe in the magnitude was more significant.

one interesting point made by the head of strategy at jefferies, he is been looking at the dollar yuan options any points to the risk reversal which is another chart your library. says, authorities of electing this happened, they are very cognizant of it and it is a gradual move. gradual on it looks the chart, it is gradual, and he is less concerned in a sense. crucial on friday, will be the , and as we go through to see how sentiment props up in the equity market and whetherrkets, we see stabilization and a very tumultuous week. don't forget you can check out our gtb library for some of the terrific chart you just saw their. it is on gtd on the bloomberg terminal.

another big story today, the stress tests forced six u.s. banks including jpmorgan to scale back proposals for dishing out additional cash to scare holders. deutsche banc failed the stress tests entirely. in the bloomberg news editor on the finance team in san francisco. dan, bank stocks managed to bounce back. it does this tell us anything about impacts on banks? >> absolutely. some of the biggest banks involved in the stress test today are american banks and they lead the way with the bounceback and stocks in after hour trading today here in the u.s. and on thursday. as you probably know, bank stocks have been under pressure lately. index has0 financials been plummeting for most of the month. this was a welcome reprieve for the stocks today. yvonne: will this be a sustained

turnaround after what we have seen? we are expecting worse coming out of goldman and morgan stanley. the numbers as far as how will the banks did with their stress tests and the ability to pass money onto shareholders now, the numbers are high, and analysts are pleased. it looks like banks are going to be passing along quite a bit more money to shareholders through raise the dividends and stock buybacks within the next 12 months than they did in the .ast 12 months favorably.eive yvonne: tell us more about the troubles of deutsche bank. the one bank that failed the second round, is this more trouble to come for the trouble under? dan: more trouble for deutsche bank. the fed's language was harsh today when they failed deutsche

bank's u.s. unit. they found widespread and critical deficiency in the way the unit is run specifically risk management is a problem there. way ofhodology and the the assumptions they use when they are outlining the future performance is called into question deutsche has been struggling quite a bit stocks are down 40% this year we've had three straight years of losses traders and bankers have been leaving and it seems to be restructuring going on at deutsche bank continuously. dan, thank you so much for joining us. now, to with the fed our adding their voices saying

this is weighing on business and we are happy to welcome to the hormat.ert he has a long history working with china and you started your career going to china with henry kissinger years ago. you are a deputy trader and i were to get to the very basic question. is a full-blown trade war now inevitable? robert: it is not inevitable a we are moving in the direction of a trade war unless the brakes can be put on this escalating process. action toy taking an impose tariffs and another country retaliating. then, the first country decides it wants to double down and do more. you can get this escalating series of action, reaction the does lead to a trade war. in addition, we have a number of canada andrtners and

mexico engaged in a dispute with us over aluminum and steel. and perhaps if president trump moves in that direction of cars. we have multiproduct trade conflicts whether it will be a trade war, we will see in the next month or so. kathleen: you are there for many years, the commerce department, you dealt with official negotiations, business negotiations. can we avoid it? robert: we can certainly avoid it. the question is, after this initial round, which is likely on the china imposed tariffs on $34 billion worth of trade, at that point, perhaps having done that, they agreed to sit down and avoid the deteriorating further. that is going to have to happen or else you do get in a series of action reaction and retaliation on both sides. charten: let's bring up a

from the library we were just talking about. it looks at uncertainty surging. this is something affecting markets, emerging market, and this is around the world. reserve. officials mentioning it is this something that could derail markets further? could this prevent fed from raising rates for times this year? robert: i don't know if it would derail markets but it will disrupt them particularly in the stocks of american companies that depend very heavily on exports for their profitability and also a lot of jobs in this company depend on exports. those companies could be severely disrupted. in terms of the fed's activities, in fact, to regional governors and jay powell a both indicated, how in a recent speech in europe, that they might have to reconsider the trade problems during --

reconsider as the trade problems and decelerate to a greater degree. china in particular, the academia has been fighting financial panic. a mounting pile of debt and we're going to see defaults, the stock market entering into a bear market. if we look at the economy, one index is showing growth above trend. do you think china can pull up and how much longer can they? robert: i think the chinese economy is still strong. it is not as strong as it used to be. economy has been a little weaker over the last several months. is reallye currency interesting as an issue for china. on one hand, the chinese do not want it to go down dramatically as it has in the past.

that makes them nervous. on the other hand, somewhat of a decline improves the competitors of goods which helps offset the additional tariffs that they are likely to face in the united states. i think they are looking at the decline so far probably would not a great deal of apprehension and probably anticipating it will help chinese companies and offset the anticipated tariffs. it will sharply decline in cause a greater degree of capital outflow. that would make them very uncomfortable. they are trying to really walk a fine line. yvonne: bob, hold on the second. we have breaking news. sale is canceling its new on the condition of what we have seen of market instability. the company is saying markets are unstable due to the u.s. trade tensions, therefore, they are going to postpone or cancel

the new share sale. for now, we see how the stock trades at the open. how bob, he goes to show much uncertainty there is among a lot of multinationals across the globe. i what point does this sentiment star weighing in on earnings and global growth in data? robert: it will because a lot of high-tech companies, american high-tech companies, numerous companies around the world been heavily on exports to major starts and, if currencies deteriorating in one country or another, and there is more volatility, one, things will be harder to price deals because it will be harder to anticipate earnings in that environment. second, new investment which is supposed to take place on the a more open trade environment may not happen. you make it real hits to earnings of a large market of big high-tech companies is

compromised as a result of trade barriers. markets withon the some companies more than others more exposed to international supply chains. the more exposed you are exposed to international markets, the more likely it will have an adverse affect on stocks. it seemed a real example of how things boomerang with canada says they will put quotas on steel imports. they don't want to be flooded with steel as steel comes in. if you are at the white house, what would you be advising? what would the u.s. due to push back against china but not start a trade war? robert: that is the tough call. there are other people in the administration, for domestic and political reasons as well as domestic economic ones, that they want to take a tougher position on china. the question is, how do you get results without hurting other aspects of the american economy.

american consumers, american companies that trade with china. how do you deal with that issue? the issue in the past has been you try to negotiate some kind of understanding. this administration does not seem to have much patience for that. although, two or three months ago, the negotiations were going well. they were quite satisfied. the question really is, how do they get back on track to resolve this issue? if they do impose a lot of new tariffs, consumers are adversely affected. other companies are adversely affected, and over a. of time, a lot of companies loses jobs because of that. kathleen: this china have to be ready to step up to the plate and say maybe we do have to change our ways after becoming the second largest economy in the world? a lot of people would say china made a lot of agreements and

they still steel industrial property and espionage. the negotiations did not work. robert: i would say they worked slowly. some progress was made but american companies are apprehensive about future intellectual property. it is certainly true that american companies have been frustrated. they have been encouraging to a substantial degree the administration. the question is, where does the balance live. does this administration take a tougher point of view and is that adversely affect other companies that are hit by the ricochet effect. finding the right balance, the chinese understand this. as a result, they will take action and have an impact on certain key centers of the united states. figuring out the right balance, you can be tougher, but you want to be tougher in a way that does not affect the american economy. kathleen: so far we have not found that way. stick around because we have a lot more mess just ahead.

yvonne: a programming note for you, don't miss our conversation. on malaysian prime minister bloomberg television tonight at 6 p.m. in hong kong. that is 8:00 p.m. for sydney viewers. this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia." on yvonne man in hong kong. kathleen: i'm kathleen hays in new york. back to our conversation. roberte vice president hormat. bob, i want to ask you about the currency and what the chinese are doing to not stop it or stop it. are they on the right track or do they risk letting the u.s. think they are trying to devalue their currency rather than dealing with a currency that traders are pushing down? result ofthink, as a these very substantial

escalations and potential escalations and trade barriers between the two countries, markets are pushing the rmb down. that is a natural reaction that markets would have in this kind of circumstance. i think that it is hard to blame the chinese for pushing their own currency down when the markets are probably much more the reason that this is happening. i will point to the chinese decide they want to stabilize their currency? my guess is that if it were to go down sharply as it has in the past, they might do this to enhance capital outflow of the currency sharply deteriorating. the moment, they are saying markets are pushed down, they improve the tariffsiveness of new and we will be a little less adversely effective -- effec ted. a second,b, hold on

more breaking news. we are seeing the industrial all for may coming out of japan. better than expected but still ion with month by month numbers. we are expecting a 1% drop. the year on year is looking better. 4.2% for the better 3.4 estimate. bob, your been talking about the evaluation we have seen and you mentioned the could help soften the blow when it comes to potential tariffs. a strong effective policy tool to fight into trade war, or is this more of a protection? more a natural reaction because if the markets anticipate that china is going to face higher barriers and adversely affect chinese companies, they are going to be a little more negative about the rmb. but, it does have the effect of

making chinese experts more competitive -- exports more competitive worried his right now more of a market driven phenomenon. of course, it makes exporting to china somewhat more expensive for foreigners who sell into china. i was wondering, we were speaking to when chet, formally the board on china and he was talking about made in china 2025 was a strategic disaster in that it produced this anti-china sentiment beyond the u.s. and the rest of the world as well. do you agree with that statement? do you think xi jinping overreached in certain regards? bob: i don't think so. i think it is been a target for some people saying china wants to dominate all of the sectors.

on the other hand, if you look at china as a modernizing economy that wants to be a very competitive country in new technologies, then you could say focusing on these new technologies is a way of strengthening the chinese economy and making it more competitive in cutting-edge technology. -- how the chinese chinese government is doing it is causing concern. they don't know how much money the government is going to put in and how much benefit the chinese companies will get versus foreign companies to make the playing field less level for foreign companies. i think that is the issue a lot of american companies and companies from other countries are focused on. if you can get some understanding as to the techniques of the chinese government and convince foreign companies that these are not going to put them at a big decision manage, competitive

china 2025e, then doesn't become as threatening. it is how it is done rather than the goal. one of the points we ought to heart,rt -- take to you need to put more money into our national laboratories and be doing more with our grassroots competitors. complainant -- china is competitive. we need to make ourselves more competitive also. yvonne: bob, we were going to leave it there. thank you for joining us in york. with more ahead on "bloomberg daybreak: asia." this is bloomberg. ♪

yvonne: minutes away from the market open in japan and south korea and australia is looking to be a better friday after we wrap up a volatile quarter. the worst since 2016. futures are pointing positive today after a decent turnaround in wall street sessions. china still remains the

wildcard. we speak with one economist at their that is predicting that china will weaken the -- this is bloomberg. ♪

♪ yvonne: 8:00 a.m. in hong kong. we are live from bloomberg's asian headquarters. i'm yvonne man, welcome to bloomberg daybreak: asia. riddance.good asian traders said farewell to the worst quarter in almost three years. the bbo see line in the sand. a bloomberg survey sees intervention coming at a psychological level. betty: from bloomberg's world headquarters, i'm kathleen hays in new york. it is just past 8:00 p.m. on this thursday. have a plan to sell stock to mainland china shows beijing's ambition getting ahead of its reality. oled sets up a display of screens as it depends on rival

samsung. ♪ yvonne: happy friday, it seems like no bad news on trade. that's good news for the markets. wrapping up an ugly quarter for us for asian stocks. we have been talking about the worst quarter since 2016. em continuing to spiral into this barrel. a key decision from the bank of indonesia. it will be interesting on how they halt what we have seen. kathleen: what is happening is more and more traders and investors are looking at these big signs. they are looking to selloff in emerging-market stocks, they are looking at chinese currency, volatility of the markets. they are asking themselves if they could be contending with something worse?

u.s. gdp continuing to snap back. if trade tensions don't get too bad, the fed will hike rates two more times this year. there seems to be unease with the people in the markets when they see the markets behave how they are. yvonne: certainly is the case. let's look at how the market opening is. it looks to be green across the board today. currencies are looking pretty stable. we have been watching the stability in the japanese yen. the korean won continuing to see a bit of pressure, but actually strengthening today. perhaps we are getting relief. the aussie is pretty much flat. the kiwi is down a 10th of a percent. let's look at the gmm function. we see all signs pointing to green, at least for equities today. we continue to watch what comes next in the u.s.-china trade front. crucial section -- crucial

cosby after week, the route we have seen is seeking relief. sydney, we have been talking about how teflon these markets are. 225 up about 42 points. the korean won also getting it. what is going on in the commodities space. continue to see the pressure in industrial metals. crude continuing to power ahead as we did see more geopolitics being played into. futures for the rest of asia are looking positive. kathleen: perfect set up as we take a deeper dive into markets with mark cranfield. currencies had another rough day on thursday. not looking like it will get better. where are the concerns? mark: china, in a word. everyone is worried about what china will do next, particularly

with their currency. it has been weakening quickly as we have seen. the stock market is in a lot of trouble. 20% loss for the mainland markets, as well. everyone is trying to second-guess what will happen next with the chinese markets. as we see on bloomberg, there was a good story on which level 6.7yuan may be defended, seems to be a good consensus. that's where the central bank in china would probably feel the real pain and would try to stop something in the currency moving. until we see stability in chinese currency, it will be hard to find stability in other markets. as people look ahead, they would like to know what point china will calm down its own markets. kathleen: it seems any real impact on the economies from trade will take a wild to show up. one thing they see is market volatility. does this mean as we look at the data coming around, is a less

important? what should we be focused on as we look at the big numbers coming out? >> one of the big things we are looking at is bank indonesia. they have a meeting where they will change interest rates. expectation is they will do a small increase in rates, probably 25 basis points. you can see emerging-market currencies are having a pretty rough time. maybe this time they will take their lead from the wild turkey deal. turkey is more extreme of a case. you can see how bold. turkey increased interest rates by much larger amounts. it helped stabilize the lira. maybe we will see a bigger rate hike for indonesia. maybe they will discuss the idea of whether they should go more than 25 basis points and see if they get a good response from the market. it should be an interesting meeting. yvonne: it doesn't seem like such a shocker. mark cranfield, our market strategist joining us from

singapore. you can follow more on today's market news,, the story on the day's trading on our markets live blog. you can get a market rundown in one click. there is commentary and analysis from bloomberg said -- expert editors. let's get you caught up with the first word news. jenna diehard joining us from new york. : tougher federal reserve stress tests have scored six u.s. banks to scale back proposals for doling out more cash to shareholders. goldman sachs and morgan stanley accused to -- agreed to freeze levels. because -- "widespread and critical suit -- deficiencies in its planning." the white house strongly condemns an attack on innocent journalist after five people were shot and killed at a newspaper office in maryland. a reporter tweeted that a single gunman fired into the newsroom and shot several employees.

he describes staff hiding under desks and says he doesn't know why the gunmen stopped firing. a white male is now in police custody. with -- in wisconsin, president trump broke ground at a massive technology campus. he is trying to make the case that his economic policies are paying off the head of the midterm elections. he says the project will contribute $3.4 billion annually to the state's economy and create 15,000 jobs. australia has awarded a 26 billion u.s. dollar contract for nine anti-submarine to bae systems. the military contract designed the warship, which will be shipbuilding asc in south australia. it will start service before 2030. shares declined in london. the italian bidders slumped. 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. i'm jenna degen her, this is bloomberg. ofnne: bloomberg's survey traders and analysts see china stepping in to support the renminbi once it approaches 6.7 u.s. dollars. that's about 1% below current levels. we talk more about this survey. we are expecting more weakening before we see any kind of intervention. rise, andlar may there is concerns of trade war. we are expecting to see more weakness. they have a history of aroundning when it nears the level. if it breaks the level, traders will usually take it as a signal that it is allowing more weakness. while the central bank has a lot of tools.

one is tightening liquidity. that makes it more expensive for people to bet bearish. heavy-handed one would be the direct currency marketing intervention. selling the dollar in chinese currency. yvonne: everyone has been talking about is it like 2015 again, given how steep the losses are? what is jeffrey c on the risk reversals -- seeing on the risk reversals? >> they engage the bearishness in the market. if risk reversals rise, they usually mean there is more short bets on the yuan in options markets. with reversals in the past few days, it is pretty much far away from the level we saw in 2015. it means that even though the yan has declined in the stock they are not in the

derivative market. kathleen: meanwhile, bond markets moved yesterday on news that authorities are looking to slow approvals on offshore bonds and potential bans on shore data dollar issues. it seems to be cooling off on the housing market and more. what to be the impact of these measures? -- what could be the impact of these measures? already --rs who are they will find a harder to seek refinancing. is moreevere result defaults in the onshore bank markets. that will hurt sentiment. it will also hurt sentiment in the stock market, as well as the yuan. even though there are negative impacts of the rule, analysts are placed -- praising it because it will move and it is good for the marketing -- market in the long-term. yvonne: our china markets

reporter. we will see it later on. joining us for more is alex wolf, aberdeen standard investments economist. people are saying the chinese officials are using renminbi as a trade weapon. some people think it is too high, what is your take? >> i don't think they are using it quite yet. it definitely is a tool they can use, especially in an event that escalates. while the market forces are renminbi, they are letting it go as a signal to show what could happen. yvonne: haven't they learned their lesson from 2015? we learned how quickly the situation can trigger this snowball effect. to what extent do you think they are learning from what we had seen three years ago? they have to start worrying

about capital outflows. there is no form of retaliation that doesn't have cost. there are risks to every option. risks to outflows, they can later depreciate, then it gets uncontrollable and they cannot hold the line. there certainly are risks, but things have changed, in terms of capital control. they have tightened them up since 2015-2016. they would not let it go freefall. they would still intervene, they still provide guidance to banks to sell dollars. i think they would let it go a bit. certainly in an escalation type of environment, where you have up to $450 billion in tariffs, they have to consider it. kathleen: one thing you are checking off as not likely to happen is the chinese selling their u.s. treasury to push back. why? alex: the costs are too large.

you think about a trade were scenario, and what they would try to achieve, they are trying to change the behavior of the other parties. it is not clear enough what the impact would have. if you go back to 2014-2015, they were sellers. they had been barely buying over the last couple of years. it didn't have that much of an impact on a market. while it would be difficult to dump such a large amount, if they trickled it out, there would likely be a buyer and it wouldn't have that much of an impact. it would hurt their remaining reserves, as well. kathleen: what would you say is a fair valued yuan at this point? china is supposed to slow down, it is not falling apart, are people assuming trade tensions could cause damage, where should it trade? there are different factors, they are easing. you have a slow economy, easing,

trade tensions on top of that. it should depreciate a bit from here. it's hard to pick an exact level. it is still running a flight account surplus -- slight account surplus. in easing, there is weakness in trade, potential trade tensions. a bit of weakness from here is probably fair value. to $450 billion in tariffs, that would have a much larger impact. equityn: in terms of the market in china, has it had enough of a selloff yet? a large has had selloff. growth is weakening. you property developers -- you see property developers under regulations. the property market, you can't underestimate the importance on

the overall economic cycle. given that, there is a high exposure of a lot of companies to export. there is high exposures to properties. there could be some additional weakness in chinese equities. we are looking at slow factors, as well. both the hong kong shanghai stock connect. you are looking at four incentives playing a larger role than in the past. you have seen portfolio outflows over the past couple of weeks as tensions have picked up. yvonne: we see china bear markets, renminbi depreciation, fastest since 2015. it isk at a measure and looking much better than what we see when it comes to the official data, as well. that perhaps is a silver lining. can the economy continued to grow above trend, given the uncertainty? it has been growing above

trend for the last couple of quarters. the first quarter was strong, stronger than most expected. too narrows a bit because it measures sector industrial-strength. within the industrial sector, you have strength. you see soes improving, their profits and margins improving. one thing that is often missed is you do that at the expense of private sector companies. you see weakness in private sector profit growth. it masks weakness happening elsewhere, especially amongst sector corporate -- private sector corporate. i don't think it can continue. yvonne: stick around, we will talk more about emerging markets next. we are watching for the bank of indonesia's rate decision. kathleen. kathleen: are venture continues. hear from one of the fast-growing stage funds in a crowded market dominating the likes of baidu, alibaba, and

tencent. this is bloomberg. ♪

♪ this is "daybreak asia," i'm yvonne man in hong kong. kathleen: i'm kathleen hays in new york. the indonesian central bank set to raise its benchmark interest rate friday. it will be the third rate hike since may. there appear trading close to its all-time low. look at this. you can see to rate hikes. there is one, there is two, 225 basis points. a governor facing the big challenge to try to stem the big drop. there is talk now that it could be a 50 basis point hike tonight to put some stop to this continued selloff. still with us, alex wolf.

why is indonesia being attacked so brutally? can they stop it with rate hikes? under pressureis because it is one of the emerging markets economies that is still running a current account deficit. it imports quite a bit of oil. you see a stronger dollar, reduced sentiment around em, you are going to see outflows. they need a cheaper currency to continue financing their current account deficit to make it more attractive. can they stem it? yes they can. you have seen turkey, argentina, you see how their emerging markets economy raise interest rates quite sharply to stem outflows. economicwise, indonesia still looks ok, it is still low inflation for the most part. they have a level of debt. higher commodity prices should

benefit overall. it is not in terrible shape. kathleen: emerging-market experts have been noting that you see so many emerging markets selloff in asia, in particular. it is not stocks or bonds, it is both, it is currencies. is this some kind of overreaction, or is it telling us something about the market sensing a difference in asia's economy from the global economy? if you don't see trade tensions, then you could -- if you don't see tariffs, you could say it is an overreaction. the events we are seeing at the moment, both with fed hiking, reducing the size of the balance sheet, and the dollar taking off strong, also the positive correlation between dollar and oil, which is quite usual. you throw in some growth this apartment, and trade tensions, it is hard for traders and

investors to estimate what the impacts would be on emerging markets. i think the markets are a bit late catching up, especially on the trade site. consensus seems to be we were not going to see some hikes. the markets seem to be catching up. it may be an overreaction, but it is hard to estimate the total impact of the factors. yvonne: it also raises the question to why the central banks in emerging markets are behind the curve. we were talking to mark cranfield about a 50 basis point hike four indonesia. is that considered to be a possibility? would it be better to preempt the uncertainty with a 50 basis points versus 25 basis point hike? it is certainly a possibility. it probably could be a pretty smart move to send a strong signal that they will step in

and defend the currency. the yield does become more attractive. yield onrelatively low treasuries and -- yield, on treasuries and the dollar it has pickup. still in the world of relatively low yields. increasing interest rates by that much could stem the outflows and begin to attract more balance and stabilize. yvonne: i want to switch to india, we saw the rupee dropping to some key levels. we reached an all-time low heree yesterday. it shows the steepness we have seen in the last couple of weeks. with trade tensions, but you also have to add in higher oil prices. are we likely to see more moves in the central bank th -- more moves in the central bank there, too? alex: i think yes.

a lot of the economy depends on oil. especially as we see inflation picking up, even before oil prices started to rise sharply. oil will have a big impact on inflation. the central bank is very sensitive to those headlines. on the trade side, it is one of the less exposed emerging markets in trade tensions. it is still a relatively closed economy, not tied in to the china supply chain. it doesn't see a lot of in demand good stock from the u.s.. it is less exposed to trade. it is more of a factor of what we see in oil prices. kathleen: thank you so much, connecting the dots for a lot of countries and markets. he's aberdeen standard investment senior emerging-market economist. i want to bring you interesting breaking news. electronics maker controlled by foxconn technology group said it is canceling plans to raise as much as ¥200

billion, $1.8 billion, in a public shares sale because market instability. the market is up 50%. they are making the decision because of unstable markets due to trade tensions between the u.s. and china. it retracted its securities report, according to a statement today. interesting how we have been talking about market instability due to trade tensions, what would it mean in terms of broad market moves, now you can see how it can affect an individual company. plenty more to come on "daybreak: asia." this is bloomberg. ♪

♪ yvonne: this is daybreak asia," i'm yvonne man in hong kong. kathleen: i'm kathleen hays in new york. don't miss our conversation with the prime minister on bloomberg television tonight in hong kong at 8:00 p.m. for sydney viewers. yvonne: investors rumored to be

eagerly buying into what is expected to be the world's largest ipo in two years. more next. this is bloomberg. ♪

♪ 8:30, halfpy friday, hour from the open of trading. i'm yvonne man in hong kong. kathleen: i'm kathleen hays in new york. you're watching daybreak asia -- you're watching "daybreak asia." yvonne: first word news with jenna degen heart. jenna: a bloomberg survey sees china stepping in to support the yuan when it approaches 6.7 u.s. dollars. that's 1% for low current levels. while the dramatic descent has traders on edge, they are not panicking yet. that's the take away from the paris risk reversal, positioning and sentiment.

isomberg has been told china slowing approvals of offshore bonds and whether or not to ban shorted issuance. the move would reduce financing options for debt laden property developers selling bonds at 364 because become popular it did not require ndrc approval. the u.s. and russian presidents will meet in helsinki on july 16, days after what could be a tense nato meeting involving donald trump and america's closest european allies. he has accused nato of irrelevance, and called for russia to be reinstated into the g7. twice met with putin before on the sidelines of international meetings, but this will be their first formal summit. the wall street journal says white house chief of staff john kelly is expected to leave his position within the coming months.

president trump's consulting advisors about possible replacements. the front runners are said to be net heiress, chief of staff to vice president, and mick mulvaney, who has the office of management and budget. place between australia and balmy have disrupted after the disruption of the volcano. air asia and get star have canceled flights for safety reasons. they will give an update shortly. it erupted last in a november, forcing 150,000 people to leave their home and disrupted the lucrative tourism sector of the island. global news 24 hours a day on air and on tictoc that twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jenna degen heart, this is bloomberg. yvonne: markets trading in the asia-pacific. it looks to be a happy friday. we are seeing a reversal of initial gains we saw for the

nikkei 225. the topics of course entering into their market as early as this week. we are down one third of a percent. the asx 200 still staying resilient in sydney. still a lot of trade tensions weighting on markets as we wrap up the first half. we're eying for any kind of clue between the u.s. and china on imposing the first round of tariffs. one thing we are watching thegst the ipo world is plan to be what's set to be the largest public offering in two years. everyone for major institutional players to mom-and-pop investors are set to be lining up. for more, we're joined by emmanuel by a gory. talk about what we have been hearing so far. >> it has been mixed feelings all over the place.

investors in asia, europe, and the u.s. were raising questions on the prospect of the business, how much it is really worth, and the real outlook for profitability of the business. investors don't seem to like it too much. we will see, because the books are being filled in. so we will see in the coming hours what the actual response is. yvonne: the fact that they pulled that out of the listing, will that impact what we are seeing now? >> two different deals in one, so to speak. it, atld see demand for least here, being piled up. sources thatg from are in the low end of the book or the price range. that should not affect one way or another. it was quite meaningful, the

fact that they were not able to pull off the cdr in time. yvonne: you have the chinese depositary received. when do they expect book billing to end and a price point to be set? >> it should be in the coming hours. we are reporting and trying to break news on who those investors will be. you will probably see headlines crossing the wire. it.e is appetite for needless to say, there are big investors backing these tremendous successful companies. is's face it, the reality there are a lot of questions about the company and its future. and volatility is affecting markets, so timing is not the best. much.en: thank you so that was bloomberg asia deals reporter.

apple said to have landed a second supplier for the oled these greens used in -- these screens used in iphones. they will initially supply between 2 million and 4 million units. let's bring in our bloomberg stocks reporter. why the need for a different supplier? importantthe key points for this is about pricing. the screens have been so expensive it's why the iphone, x was so expensive. apple and lg have been working on board andet lg be a second supplier for the screens. now that this is happening, it sets them up for significant supplies next year. the volume is still quite small at this stage. kathleen: this is a pretty big deal for samsung.

why is apple trying to diversify away from them? >> it is along the same lines, about pricing. because samsung is the soap look -- soul supply for these screens, apple doesn't have much of a say in pricing of the screens. samsung has a huge advantage when it is selling oled, because it is the only supplier, and no other player has been able to produce oled screens in such mass volume. thislg is capable of doing hopefully next year, after initial sick -- shipments go through. they will -- apple will have leveraged and bargained better prices for oleds going forwar --oled screens going forward. kathleen: there were your -- there were earlier reports that they wanted to adopt them for next year. what do we know about that? >> this is a significant

development that lg is getting on board, but in very small volumes. this doesn't necessarily mean apple will start adopting those screens for all of its iphones next year. they still have the price issues. apple still needs to figure out what the demand is for oled iphones in the market. volumes will not be quite enough , as far as we can tell. they will not be able to adopt oled screens for all of its models next year. yvonne: are tokyo stocks reporter. we have been talking about the story on bloomberg businessweek, netflix i think india for its next 100 million subscribers. india for its next 100 million subscribers. forecast suggests it will only reach 3 million by 2020. let's bring in dave macomb in tokyo. these are pretty big ambitions for netflix.

how are they going to reach the target? of their strategies is to create foreign-language content, local language content, some of the projects they have been working on in india include hindi language films they are producing to be available exclusively on their network. that is a strategy that is working for them globally and driving a lot of growth for this company. when you think about the increased in availability of broadband in india, that is another driver. some 50 million indians have for itnd in their home all of those are seen as potential customers for netflix, which is leading the way in offering the biggest selection of content on demand. they have a tough position in india, in terms of pricing. the prices about double what india expects to pay for that kind of service.

they areme time, focusing on assembling a content library that puts it in the number one position for people who want the highest quality and biggest selection of content. bloomberg piece, fewer than 10% of indian households with tv pay for a premium service that costs more than netflix. if it is not a price, how do they win customers in india? -- theytrategy is going are focusing on getting india started and working with bali would producers -- bollywood producers. the potential is larger than hollywood. the filmmaking community is massive. netflix definitely has the cash to spend on it. they throw around figures like a billion dollars for what they are spending globally on their own original productions. we have seen what has happened in hollywood.

when you spread cash around the debt, filmmakers start to listen cashu -- when you spread around like that, filmmakers start to listen to you. they are working creatively for filmmakers who wish to avoid some of the constraints that other more established studios have been putting on them. that is the formula they are bringing to india. with that, they expect to be able to sign up some of india's best and groundbreaking filmmakers to produce the kind of content that can make a segment of indians willing to pay up for on demand content. kathleen: going into india and doing international programming, will we see this around the world? how ambitious is netflix in terms of, international programming? mentioned,tory you the head of international programming said next year, they will expect to produce about one foreign-language show a week.

that is a lot of new content. the shows they are really driving this globally, not just in india. this is their platform that they are using to produce local language content and drive growth in markets. they have done the same in japan. they have invested in the country. in terms of getting local language content on, that is original to netflix, they have spent a lot of money on that and continue to do so around the world. one exception is china, where they have to license their content. they haven't been able to deliver it directly. that probably means india is their biggest potential market outside the u.s. kathleen: indians do seem to like movies very much. thank you so much to bloomberg asian media editor dave macomb, who joins us from tokyo. up next, one tiny venture capital fund managed to hold its own in the cranny -- the crowded chinese start of arena.

we find out how, coming up next. this is bloomberg. ♪

♪ yvonne: this is open -- kathleen: this is "daybreak asia," i'm kathleen hays in a new york. yvonne: i'm yvonne man in hong kong. early trade after the company announced it is gambling -- canceling a share sale expected to raise as much as $2 billion. let's bring in rob steiner. it goes to show how fragile markets are at the moment. collateral damage could come out from the trade tensions. >> absolutely. raising close to $2 billion, selling the shares that would be ordinary. they essentially wanted to buy back the preferred stock. the markets are volatile. there is a high risk if you try to sell 2 billion worth of assets in this market. you have egg on your face, and

you don't get the money. it makes perfect sense for sharp to do that. market reaction shows people are is -- relieved. yvonne: what were they supposed to raise it for initially? >> preferred stock, some from the lenders, which were a terrible time. it was basically going broke. it was losing chronic amounts of money. foxconn came in and recapitalized the company. it also had to strike deals with lenders to preferred stocks. this is a way of catching them up and moving on, but that will not happen just now. it is not clear exactly what plan b will be. sharp will be looking towards it. yvonne: what does it mean for the turnaround of the company? hetalked about even before stepped in, there was a recovery. what is a long-term impact? >> i would imagine the plans stay the same. now that the balance sheet has been cleaned by the foxconn

buyout, it is in better shape to invest in production and things like liquid crystal displays. they want oled, which is what apple is using. they want to be able to do that. they are capable of doing that, but it is a little bit more constrained without the new shares. the expectations is they will resume it once the markets get more stability. up, we they better catch have lg displays potentially working with apple to provide the oled screens. a moving story when it comes to sharp canceling the share sale today. kathleen: let's take a look at panda capital, one of the fastest-growing see stage funds in a crowded market dominated by baidu, alibaba, and tencent. it has held its own things to a very big win on mobile. it's part of a venture. the editor shares how he competes.

init is quite promising china. it has grown faster, faster than the u.s. we found that there are many companies that started saying that they want global market in the first day. we invested in mobike at the early stage. investors told us they want to put the bike all over the world. our strategy is we want to power those young guys who really have be --eam or ambition to to change the world, to make a difference. investment you made, that has raised your product? >> definitely. >> how pleased were mobike you with your investment in mobike -- in mobike and how it turned out? would you prefer growing prior to it being acquired? >> we expected the ipo for this company. in the end, the positions on the

company. and weour opinion, respect the decision of the shareholders of the funders. >> what return did you make from your investment? >> over 10 times in less than three years. we are happy on this. >> how competitive is the vc market in china? >> it is very competitive. v' ridge -- vc 's registered. there are a lot of individuals who have money and call themselves it. the top 5% of the firm earned 95% of the money. firm's need to be on the backs for money. --

nice.ys live the rules we can follow, no kinks, so we need to be alert. we need to try to stay in 5%. >> a big question on many people's lips is who will be the ?ext baidu, alibaba, tencent who do you think has the potential? which startups in china are likely to make it? has the bestably chance. eventually, what company can beat it? maybe on the social app. they can get a large user base quite fast. enough that it is no way to copy. >> tencent and alibaba by far the biggest investors in the start up space in china when it

comes to technology. how are they shaping the landscape? >> i think they feel really anxious about the startups. they are really worried about some integrative company beating them someday. make a lot ofy investments to make sure that something doesn't happen. when you worry about something happening, something will happen very soon. capital'hat was panda peter miao speakings to us. we take a look at the stories trending across the bloomberg universe today. we have a story of a leaked chinese government-backed think tank report, which warns the potential financial panic in the world's second-largest economy. a sign of concern over market turbulence and trade tensions. among the stories on the bloomberg, amazon's push into drugs. it's billion dollars purchase.

bloomberg.com has a story of a warning of a cyber attack. millions of customers may be affected by a potential data breach on it's website. check out those stories on bloomberg online or on the terminal. for more breaking news wherever you are, we have teamed up with toyota to launch tictoc by bloomberg, the first -- with twitter to launch tictoc. by us.d if you are on twitter, follow tictoc. this is bloomberg. ♪

♪ yvonne: this is "daybreak: asia," i'm yvonne man in hong kong. kathleen: i'm kathleen hays in new york. let's look at the business flash headlines. nike return to growth for the first time since 2017. forecaster giant had flat sales for the region and credits new projects. 3% rebound in its home market falls short of adidas' recent performance. u.s. companies also seeing growth accelerate overseas, where he generates more than half of its revenue. yvonne: starbucks shares fell to a three-year low on news the chief financial officer is leaving. his retirement comes as starbucks grapples slowing sales in the u.s. the tricky expansion in the key chinese market, and departure of howard schultz. it said it is closing stores in u.s.. kathleen: 20% trade stock

shareholders expected to vote july 27 on disney' $71 billion offer for the companys' entertainment assetss. our source says a meeting is scheduled at 10:00 a.m. at the new york hilton. disney wants antitrust approval for the u.s. department of justice. that gives it another edge over comcast, which is also buying for the assets. to get moreplan bridgwater employees ownership of the firm moved towards its next face of its plan. the changes will give staff a better say in governance and management. the billionaire is more than midway through a 10 year succession plan and has had some faulty starts. >> we are going from a company in which i led the company in this way, and now we are going to something that needs broader and more formalized partnership. -- more formalized -- yvonne: for a look at what's coming up on bloomberg television, let's bring in rish.

it really is just one story, china. >> things going on in the country that we really don't quite know what is going on. emerging markets just under pressure. credit markets, particularly being squeezed. we have issues with bondholders, as well. bloomberg vice chair of bloomberg asia will be looking at behind-the-scenes and the trade dispute, the impact on the yauan as it gets weaker. what sort of monetary tools do they have at their disposal? worlds a backdrop of equities taking a bit of a beating. there ago. -- there we go. kathleen: always so much look forward to. a quick look at how markets are trading. japan's nikkei is down about .4 of a percent, with topics that have entered a bear market, also

down. cost be may have called it -- the cost be have called each other. on the heels of u.s. which has close down on the major market indexes. we see a small gain in aussie stocks. yvonne: we see this turnaround in sentiment to the negative as we wrap up this trading quarter. the worst we have seen in three years. singapore, taiwan, and malaysia looking more positive. the index futures of about .10 of a percent. we are also counting down to the bank indonesia policy decision later on today. that is it from us on "daybreak: asia," our market coverage continues next. kathleen: this is bloomberg. ♪ what's a gig of data?

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close out the worst quarter in nearly three years. emerging markets have had the worst of it. china fighting back, the pboc kicking off the second half with targeted easing, support for the yuan. a bloomberg survey pinpointing 6.7 as the magic number. i am rishaad salamat in hong kong. haidi: also, stressed out, the fed forces six u.s. banks to scale back payouts, while deutsche bank failed the test completely. this is "bloomberg markets: asia."