♪ >> take shares drive markets lower. netflix plunges after the earnings. cell growth this is expectations. >> the s&p 500 drifted as energy losses offset gains and financials, bank of america and blackrock both beat earnings forecasts. black rocks larry fink's says tariffs may hurt the u.s. economy. the imf says another warning about the dangers of the trade war. >> president trump is under fire for his comments on russia.

he said he sees no reason why moscow would meddle in the election. hello, from sydney. it is past 8:00 a.m. i'm paul allen. this is "bloomberg daybreak: australia." frome two hours away asia's first major markets. >> good morning. it is past six ago p.m. in new york. i am ramy inocencio. we will be looking at how the action on wall street and across the united states will play into europe, asia and -- pacific trading day. it really is a different day depending on what kind of news comes out. especially with u.s. trade tensions. different directions, especially for the markets. we saw the nasdaq as well as the s&p both down. the dow actually ended up higher . you can see basically we ended mixed here. -- ins, good news, in the terms of u.s.-china trade war. the imf is saying the tensions could derail global demand and

its rebound. earnings, definitely in the driver seat. the s&p 500 pushing -- push and pull because financials with the winner of the bank of america news. energy was a laggard because oil falling. wti as well as brent both falling about 4%. flipping the boards, there were things after hours we want to take note of. most specifically with the nasdaq. take a look at that. it is the outlier in terms of its fall. .25%.sdaq down that is what because of what happened with netflix, missing its estimated subscriber additions on the order of one million subscribers for the second quarter. not only that, looking ahead to the third quarter. netflix is expecting one million subscribers less as well. price in after-hours trading fell by upwards of 15%. this of course after a rally we saw of more than 100% year to date. tepid red sea seems

to be spilling over to us here in asia. trading in new zealand getting underway. looking flat.ou it is off by a couple points. the u.s. dollar weakened against most of the major currencies. the aussie dollar, up -- a bit of an outlier. around $.74. to be futures pointing lower by 2/10 of 1%. you mentioned commodities taking a bit of a beating. let's get into that more. gold was off again. oil slumping for a number of factors. not limited to the likelihood of increasing supply coming on. the broader bloomberg commodities index continues to drift lower. let's get it back to you. ramy: thanks very much. let's do that and get to wall street with the action. as i mentioned, tech as well as energy stocks led the market

lower. netflix, the first of the feng stocks to report earnings there. plunging after the bell. let's get more on this with seeking who is watching the stocks. stocks were searching for direction most of today. >> they began at a wait-and-see mode between -- when trump and putin met. they search for direction. let's go to the chart. the real focus here, we have the dollar declining. on's were in focus. we talked about oil. oil dropping below $70. if we go into a chart on that, the fact that the saudis are offering more output to their asian customers, is putting a lot of pressure on oil. you can see where we have been. we have come down in a big way. president trump actually talking -- said to be talking about tapping the emergency supply here in the u.s. more oil on the market. the prices down. let's take a look at some of the big movers of the day. tesla --ave here is

the ceo has been talking about reining in the twitter talk. over the weekend said something really surprising on twitter that was a british cave explorer criticized the company. the ceo shot back and cute -- accused of him -- accused him of being a pedophile. riding the wave of strong bank earnings. they reported very strong numbers on friday. you have got had an anti-moving higher. this is the green energy company which was heard by some of the ontario related was at analyst say are nonexistent. semiconductors getting hit and a big way. let's go into the bloomberg. gtv is where you can find our charts. the title of this one, it is called return of volatility, which you can feel in the market. it may aid trading revenues. that is what we are seeing. this is the fix. -- vix.

as the market rocks, people have to get out, reposition and that causes a lot more exchange of money at the bank trading desks. therethis time last year, was a lack of volatility. that did lead analysts to take down their estimates for banks. now, especially looking into third quarter, fourth quarter, they are raising estimates. su: bank of america is a perfect example. what you had was analysts concerned that there was going to be a 50% in their droppings -- in their earnings. bank of america was at the top. deutsche bank coming out with very surprising news. blackrock also beating, a real big warning from the ceo. let's start with bank of america. what was really the strong point for this bank, the increase loans to individuals or consumers at a much faster rate and then rivals. the second quarter beat analysts. this added to cost cuts to boost

the prophet. let's take a look at deutsche bank. this is a company under major construction with a new ceo. they came out with a pretty earnings announcement. they expect to exceed estimates. wow. analysts were impressed with that. blackrock, they also beat. the ceo really stealing the headlines. he was warning that there could be a real negative consequence from the trade wars and we will get to that and hear from him later. su, the tech trauma was netflix at the lack of new hit shows surprised that. it is all seeing the stocks tumbling or this puts a dent in the nasdaq on tuesday. su: this could have major implications to let's go to the after hour chart. you can see the major moves we are talking about. down as much as 15% are well into the extended trading. we are still down quite a bit. reallyry is that netflix

disappointed on the subscriber front. they additions and revenue were short of the bar. they came one million under the subscriber growth that was expected. there is a lack of hit shows that may be impacting that. while earnings beat expectations, that really does not matter for a hot growth company like this. does it affect the faang? that is a big question. let's take a look at netflix. stock performance for the year, this has been a killer stock. the one to own. are seeing drops we after-hours is likely to translate into the tuesday session i could be a huge weight and the nasdaq. a lot of analysts are warning. buckle your seats. su keenan, thanks for that. plenty to get through that. plenty to get through politics. president trump is back with a republican backlash after giving equal weight to vladimir putin and u.s. intelligence when it comes to the questionable russian interference in the election. all i can do is ask

the question. my people came to me, dan coats came to me, and some others. they said they think it is russia. he justresident putin, said it is not russia. i will say this, i don't see any reason why it would be. joined now from washington by bloomberg congress editor joe subject. tell us more about the reaction to the news conference after the helsinki summit. joe: republicans have sort of looked away -- look to the other way with trump on a number of issues in the past. fearing mainly because he has a hold of her gop voters in the united states. but this triggered quite an intense backlash to probably more than anything he has done in office. you had some of the people who have been frequently quitter -- critical sanchez as senator -- critical, such as senator john mccain. in of one -- even one of trump's supporter, new green -- newt gingrich.

he said this is one of the most serious mistakes of his presidency. it needs to be corrected immediately. there have been a few who have stuck by him and suggested the relations with russia are worth it, but party much universally, even some of the republicans who have been fearful of crossing -- haveve at least in at least been contradicting him. this is moved things in the u.s. ramy: that's right. in terms of even his republican allies, paul ryan saying russia is not an allied. jeff flake saying disgraceful. these are not quick words you want to come to hear. further of repercussions, maybe beyond the verbal, what might there be for trump? seen.hat remains to be congress doesn't have a lot of ability to influence u.s. foreign-policy directly. they could pass resolutions

supporting the u.s. intelligence committee, but there are a number of other things they could do on the side. make it more difficult with some of his policies that will need to get congressional approval. there also have been some movement in the u.s. house by republicans there to do things that undercut the probe into russian influence on the campaign. and possible ties to trump's campaign. those may slow down. seere still waiting to whether or not they go through with some of the other things. there is not a lot directly they can do. but there can be more defiance of trump and other areas -- in other areas where he wants to advance his agenda. ramy: thank you very much. joe subject in washington with the latest in the aftermath of what happened between donald trump as well as wagner pigeon in helsinki. let's get the first word news with jessica summers to jessica: black rock bass larry faces

escalating trade tensions may spur of broad market downturn and also hit the u.s. economy. he told bloomberg stocks could gbp 10 -- 10% to 50% and could start slowing next year. that is if the trump administration sees through its threat of tariffs on an additional $200 billion of chinese imports. he said that would elevate the current spot to a full-blown trade war. this $200 billion tariff war between china, i think all bets are off. >> meaning what? didi people slow down dramatically, we will have more uncertainty about the world and how the u.s. is being portrayed. ims is also concerned, warning financial arm -- financial markets continue to be complacent amid trade tensions are chief economist told bloomberg that global equities will be susceptible if the escalating spot is not taken more spirit ashmore's ears like

a he said the current growth trend in the u.s. economy is unsustainable in his opinion. prime day withff technical glitches on its website and up. -- app. evente spiked when the began active tray clock p.m. eastern. 3:00 p.m. eastern. spend $3.4uld billion on the site during the event. that is at more than 40% than last year. while australian workers face wage growth, bonuses for the ceos have pushed their pay to record highs. by the us trailing council of superannuation investors found a ticket of bonus -- bonus payments climbed 18%. the group's members owned 10% on average of every company on the asx 200 index. they say they will recommend voting against successive awards.

global news, 24 hours a day, on air and at tic toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm jessica summers. this is bloomberg. ramy: thank you very much. we are updating you on netflix. the earnings call has gone underway in the past several minutes. you can to the share price and more streets still down by than 14%. some of the lines crossing the bloomberg terminal renault include netflix saying we are still on track for strong growth this year. this despite them missing their second-quarter estimates for ads as well as their third quarter view for ads by about one million subscribers on each side. netflix also saying that strengthening competition is "normal and expected." investors not happy about those numbers. netflix shares down i want and 14%. if this number stays in active

training for the united states, then that will be its lowest ever since around mid or late march. run much 24. -- march 24. over to you. paul: we will have more on that netflix story as the earning calls continue -- call continues to unfold. coming up up, a review of the helsinki talks. havedent trump's remarks infuriated some republicans. ramy: warnings about tariffs, inflation, and a looming slowdown. we will have the view of the chief u.s. economist, stephen but. this is bloomberg. ♪ ♪

♪ just want to get across some breaking news. vladimir putin telling fox that russia and the united states have been working together. putin saying things of change

for the better after the summit. u.s. and russia have been working on antiterrorism incorporating in syria as well. putin also saying russia is ready to extend the start treaty but has a few questions. we will be getting into that story a little more as the show progresses. ramy: thanks very much. meantime, the imf says escalating trade tensions are threatening to derail a global upswing that is already losing momentum in both europe as well as japan. our reporter told us the u.s. is not united. >> we think the u.s. growth will fall as the effects of the current fiscal stimulus begin to weigh in. less government spending, and the reversal of tax incentives. furthermore, the u.s. is growing way above potential at the moment. that cannot continue. with tst's get more now lumber chief u.s. economist,

stephen blitz joining me in new york. we just heard from the imf chief economist there. they are also stake -- saying that only some folks are saying that 10% 50% -- you might see equities fall if a trade war totally does blowout. woody think about that as well as the imf comments? on target.they are where they are on target in terms of the economy slowing down is not so much the tariffs per se as to a negative impact. we were at the point in the business cycle here where capital spending was ready to take off. in my opinion. they were being helped with this take off by the tax cuts, which were essentially corporate tax cuts. that the republicans and trump past. the one thing firms will not do is they will not invest when they are uncertain. especially when you are this long into a cycle. of the a big part

problem here going forward. you can say, well, they will readjust the supply lines with the tariffs on all that. that is not entirely true. you don't know 3, 4 months from now, they could come to an agreement with china and remove the tariffs. the next president, whenever that may occur come in two years, four years, may decide to reverse the tariffs. even the tariffs themselves are permanent.rily you naturally will cautious a certain amount of capital spending plans. ramy: the question here is you might be nearing a -- or some say in label cycle for growth -- essay in late cycle how much further do we have to go? we discussed this, we can see that this terminal chart labeled domination like never before shows u.s. stock so far have been removed from the rest of the world in terms of their performance. growth, that is happening here, where do you

think we could go? 2000 is where we had yesterday. we are pulling away from that today. steven: someone like 10 come of it -- 10%, 20%. also don't have these tremendous imbalances in the economy that we had say in 2005, 2000 6, 2007. you don't have this and that is going to adjust negatively the same way. it is more about dropping what we used to call the growth recession. where you might get pod of -- positive gdp numbers but in a -- the and employment rate begins to take up. the real challenge with all this uncertainty is the fed. you are sitting here in december and the fed is looking at an economy that is probably slowing down, but they are probably not too unhappy with that because if you look at their forecast, they are looking for then employment rate to talk back up toward 4.5%. the economy may be slowing a little bit but not greatly. the bias on inflation's going

to be higher. it is a delaying indicator. come december, what does the fed react to? that is the question -- that is where they will earn their pesos, so to speak. do they react to inflation or slowing growth? will react toey inflation. that will slow the economy in 2019. i just want to offer a counterpoint to what raimi was showing us what that shot. -- chart. this one shows us the three-month money market bill that is holding above the s&p dividend deal. is coole, holding cash again. this is an the first time this has happened since the global financial crisis. you see a bit of money being taken off the table. steven: i'm sure there is. powell is a markets guy. going to raise the fed funds rate on the basis economyconomy, how the

is doing, not necessarily inflation per se. by being a markets guy, what does that mean? he says, money is to dilute cheap. -- is too cheap. dilute money is to cheap, that is an argument for why you should raise interest rates and you should raise the cost of money to something that better reflects growth in the economy which we have not had. i don't think he would look at that chart and i shouldn't put words in his mouth, but to do that, i don't think it would look at that chart and the all that upset about it. i think he would say they are correcting a problem before it got worse. -- adding toaving fragility to the financial system for the next hour. got a few seconds left. i want to get your opinion on the yield curve everyone is watching it closely. what is it telling you? steven: it is telling me normal.

if you look in the mid-1990's in mid-1980's, the curve stays relatively flat for an extended period of time. what was abnormal in this recovery was how long the fed needed to engineer a steep yield curve in order to get the economy righted. if you think about where the level forward and current inflation expectations are, the difference between real rates, point a 20-40% basis spread is not that unusual. it is not a negative until it dips negative. for the economy. one other thing i would add is that for me, the kirk -- the curve that matters is the nominal rate of growth is in final sales. you will see when the commercial the rate ofs over growth in nominal sales, that is when you get a recession.

we are not there yet. paul: thanks very much for your insights. very reassuring. u.s. economist, stephen blitz joining us. remember, bloomberg users can interact with the charts we were showing you they're using gtv go. you can browse recent charts featured on bloomberg tv to catch up on key analysis and save charts for future reference. this is bloomberg. ♪ this is bloomberg. ♪

♪ paul: breaking. numbers crossing the bloomberg right now to we have rio tinto production numbers for the second quarter coming up. shipments coming higher than expected. 88.5 million tons. the estimate was 80.4 million. a slight be to. as for outlook, rio seeing shipments in 2018 to be coming in at the upper end of the range. no shortage of that.

this comes a day after valley announced record shipments. maybe we see pressure on the price. bite.x suffering a nasty this is bloomberg. ♪

♪ 8:30 a.m. on another beautiful blue crisp winter's day. 12 degrees in sydney. markets opening and 90 minutes time. features off 2/10 of 1%. i'm paul allen in sydney. ramy: i'm ramy inocencio in new york where it is 6:30 p.m. and you are watching "bloomberg daybreak." let's get to first word news. several top republicans have criticized president trump's comments after his meeting with vladmir putin. must ben said russia held accountable for like -- four election meddling. john mccain called the summit a tragic mistake. trump question whether russia

interfered in the 2016 election. he also suggested he trusts putin as much as his own national intelligence director. pres. trump: all i can do is ask the question. to me, dan coats came to me, and some others. they said, they think it's russia. . have president putin he just said it is not russia. i will say this, i don't see any reason why it would be. jessica: u.k. prime minister theresa may has won the first vote on post-brexit customs arrangement. she is facing even more pressure from inside her a party. she carries the vote with the majority of just three. yet suffered another resignation from her government. attacked by pro-europeans and hardline brexiteers. for her plan to maintain close ties to brussels after the split. being accused of building its online coupon business on the back of ivm technology without permission. delaware says ibm

demanding more than 100 $6 million in damages for the claim to elicit for innovations. lawyer says groupon arrives late to two e-commerce and failed to purchase licenses to use patents packs. groupon says it is invalid. the world's most dangerous nation is planning bonuses for police officers. that is despite claims that only one in six ordinary people feel safe. venezuela is below afghanistan and south sudan. president nicolas maduro announced bonuses of 10 million blvd for each officer. that sounds impressive that actually it works out of the equivalent of three u.s. dollars. global news, 24 hours a day, on air and at tic toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm jessica summers. this is bloomberg. paul: i give it much.

let's get an update on the markets. new zealand had been trading this tuesday for over 30 minutes now. is currently up 1/10 of 1%. those currencies strengthened against the u.s. dollar to we are seeing them pull back a little. sydney futures off a 2/10 of 1%. more broadly, we saw the japanese yen also beginning against the u.s. dollar. the british pound, not a great deal of change. the u.s. tenure stabilizing we have good retail numbers out of the u.s. as we were talking about, the s&p 500 stalling a little there. get more on what we should be watching is trading in asia is about to get underway. bloomberg's global market editor joins us. inflation is important this morning. it might help explain why hedge funds are getting more bearish on the qe. adam: it is a big day to release this morning. it comes out in 10 minutes time. for in the looking

inflation number is any sign of further easing and calling it that might give but even more reason to think about leaning towards a cup. really, it is the impact it has been having on the kiwi dollar going into this. have a look. this chart is in your gtv library. sense of the technical perspective of the kiwi dollar and how trading since we had hit that cross there, the longer-term average of the currency, crosses below the shorter term. we have seen the big slide in the kiwi. a lot of pressure on the currency. what we have seen hedge funds do is basically double down on those bearish bets. we have had three straight weeks now where hedge funds have upped the ante on the bearish side. any weakness we see in that inflation data in 10 minutes time will put more further pressure on the qb. -- on the kiwi. in australiaearch

shows ceos are getting massive pay increases. compared with most normal workers, those are struggling to get a raise spirit what is happening here? ramy, this is a piece of research from the australian council of superannuation trustees. group ofa very huge pension fund investors. they collectively control about $1.6 trillion worth of assets. these are funds that own about 200 biggest australian companies. what they are seeing in their research is bonus payments to ceos at australian companies are up about 18% over the past year. of course, the context of what is happening in the rest of the economy and with your average which growth is very stagnant. it has been a topic of central bank done here for the -- for a

long time. they have been struggling with this inflation conundrum and the fact that wages are not growing. you have this huge offset between ceos that are receiving massive increase in bonuses and the rest of the population that is struggling with this wage growth. this chart shows a 12. majorities ofvast -- vast majority in australia has been stagnant. i are saying is going into the reporting season which starts in the august -- starts at the first of august, they will put more pressure on the renumeration side of companies across the board and a scrutinizing them to a greater level, given these bonuses to the stop of australian businesses have been so staggering over the last year or so. ramy: big numbers there. adam haigh, thank you very much. don't forget to check our gtv library for some of the charts he saw there. that is on gtv go on the bloomberg terminal.

let's switch gears here and had to earnings. netflix is plunging in late trading after adding one million fewer subscribers than was expected last quarter. running us now on the line from new york is matthew thornton. he is suntrust robinson humphrey director of equity research for digital entertainment and marketing for he has a hold ratings on netflix for the price -- $415. 415 let's start with what went wrong. at least from what i am seeing here. it could be around the fact that they did not have new blockbuster hits. would you agree with that? -- first off, thanks for having me. yeah, that could be a piece of it. in any given quarter, what netflix tends to do is give you their guidances, their internal forecast. thethey report relative to forecast can have to do with the strength of the content into recorder. there could be other extraneous things out there. like the world cup.

i think the content latest probably right. dent from the world cup if that is what it was. i am curious about what they need to do moving ahead. happened to the bloomberg terminal, i want to show our viewers the cash burn that netflix has been doing over the course of the past few years. every since late 2014. in 2018, they did commit to $8 billion to try to get new shows or at least new seasons of here. do they need to burn even more? do they have the wherewithal to do that? matthew: i don't think they need to burn anymore. their outflow did not look -- did not change. i think this is one quarter. again, this could be a function of several pieces of key content coming in softer, not resonating quite as well as initially thought or hope. as he moved to the back half of the year, the content does

change. a couple of hits, particularly late in the year with things like stranger things. havenk it is too early to too much conscience -- cautious around it. the free cash you alluded to is a function of them building their own content as opposed to licensing it from somebody else. you have to plunk down those dollars. time zero. to build the content before it hits your platform. mirrorsy the cash out putting the content on a platform. it is more of a timing issue that causes that free cash burn. in terms of subscriber growth, looking ahead, the third quarter, missing estimates by about one million there, i think it is 5 million versus 5.9 3 , international is where the subscribers rp we heard netflix could grow or wants to grow on the order of

100 million subscribers in india alone. there was a my roles there. is there anything that needs to be done in terms of newmarket moving ahead to try to flip that script and try to get back to that 5.9 3 million growth? matthew: i think it is -- there are two big things. i think they are in all the markets they are going to be in. i think it comes down to two things per one, launch more and more local content for those market are you alluded to india. having local content for the indian market. secondly, what you have been seeing them doing what they will continue to do is partner with whether it is mobile operators or cable operators, or others. to bundle that. netflix product and get those into russian front of the households in into the households. those are the two things he will save them lean into two kind of penetrate those large markets, like in india. can: matthew, how high subscriber growth reasonably go? you have the issue of markets

had shirt -- saturation. the flex is not the only game in town. there is plenty of other streaming services too. their pie is getting smaller, isn't it? truth tothere is some that. if you look at the u.s. market as their most highly penetrated market, you are approaching 60% of broadband enabled households having netflix. developing markets, that market is low. more in the single-digit. certainly the opportunity is going to shift from developed markets like the u.s. or canada or u.k., and you will see that growth have to come from developing market like in india. more local content, certainly parting with some of the local operators in these markets. wraps down the line, thinking about price point is going to be important to drive that penetration. have a holdw, you on netflix, $415. happened to the bloomberg

terminal i want to show you our function. that hold is represented here in yellow. the cells are here in red. the greens are obviously buys. what would it take for you to change your hold to a buy? coming into our preview -- we called for a subdued quarter, was the term we used, and we maintained our hold rating basedon -- on that subdued data that we were seeing coupled with valuation. i think that answers the question as to what we will look for. if we were to be more constructive. paul: just a little bit of conflict -- comment from the netflix ceo. let's have a listen. >> the background and underlying characteristics of the business have not change. our adjustable market is intact and has not really changed. ofed on those 90 days

actuals. in general, we think the conversion grows to entertainment is intact. to go are loving it. people are adopting netflix around the world. increasingly more in our newer markets as well. i think we are still on track for a strong growth year this year. maybe it will come in a little differently than what you expected and others expected. wells, theis david netflix cfo's speaking on the earnings call. matthew, i wanted to get your reaction to those comments? matthew: i think those comments are fair. it is one quarter. like i alluded to previously, having a content slate does -- but does not resonate that you intended to or thought it might in one particular quarter does not necessarily -- i think you would be hard-pressed to say that is a red flag that subscriber growth is going to roll over or you're starting to saturate your core markets. it is one quarter.

is,questions it does raise what did the next couple of quarters start to look like? will we see a pattern? will we see it. can they raise prices? if that subscriber growth's getting choppy or, it is probably the bigger question. it is one quarter. think you would be hard-pressed to really throw too much of a red flag care. matthew thornton, thank you for joining us. analyst call with netflix has just wrapped up now. coming up next, we will get more reaction to the trump-putin meeting with senior fellow robert service. this is bloomberg. ♪

ramy: breaking news new zealand cti has just come out. at 1.5%.me out

that is the actual. that is lower than the survey estimate of 1.6%. that is amiss here, the prior was 1.1%. we are still seeing nominally higher growth. a similar story. 0.4% was the actual. 0.5% was the bloomberg survey estimate there. that would have matched its prior 0.5 percent. both of these missing estimates by 0.1%. take a look at the new zealand dollar. he can see it is weakening by about 0.2%. 2/10 of 1%. off the back of this news. both cpi ae and quarter on quarter missing estimates just by 0.1 percentage points coming out of new england -- that amazingly. -- out of new zealand. paul: let's get back to the meeting between president trump and putin. with the u.s. leader questioning conclusionslligence

that he was to be blamed for the elections, joining us now to analyze this from stamford is hoover institution senior fellow robert service. thank you very much for joining us this morning. some of the backlash from the gop has been profound john thein calling it one of most disgraceful performances by an american president in memory. your memory will be quite long. you have been studying u.s.-russia relations for a long time. in terms of history, how do you rank the summit? robert: i was trying to think, when was the last time that a russian ruler talked down to an american president? in quite a drastic way. you would have to go back to 1961 when kennedy was a young president and the russian president talked down to him. for theot work out well

russian president. the following year coming he had to back down himself in the cuban missile crisis. around, it is really mystifying as to why president trump has allowed putin to act in this way. paul: another thing that has been mystifying is this attempt to have it both ways. the intelligence director, dan coats, issued ever sponsoring it was clear in his fact-based assessment that there was russian meddling in the 2016 them at -- election. it appearednied president trump saying he trusts both. how do you square that circle? robert: it is mystifying. why would you trust and kgb man who has been through the higher kgb school, who knows how to dissemble, who knows how to negotiate, while pretending to believe one thing, but actually believing another? putshould so much trust be

in a russian president with that kind of background? with that kind of early group behind him? why on earth would you concentrate on the single subject of packing when the geopolitical -- geopolitical politics of the world is at stake at the moment in crimea, in eastern ukraine, in syria. and in north korea. why haven't we heard anything about this yet? while i can understand why u.s. congressman are saying -- congressmen are saying it is terrible that's a little was said about the hacking, there very, very big other questions that have not been addressed at all. was trying toi get around this too. why, why, why, why would he let putin off the hook? does it come down to legitimacy for authority for donald trump coming off of the elections? i have suspected for

some time that when president on ansays something, electoral campaign, he does tend to come back to it. despite all the criticism. on campaign committee said repeatedly that he wanted better relations with russia. we don't yet know what kind of price he is willing to pay for this. are going to hear fairly soon, i suppose. at the next summit or the summit after that one. is an open't have politics, at the top of the american system. ramy: this really does make the question after helsinki, what next? where does the relationship between the u.s. and russia go? what next meeting do we hang this on?

say there is sides agreement, that they are working together on things such as treaty, these are just words. robert: these are important things to go on working at. it is very important that we engage with russia. but so much bad has come out of russia in the last few years. that has to be dealt with as well. dealt with in the way that ronald reagan dealt with it in the 1980's. the russians have to know that there is a price to be paid for bad behavior. to leave itl have there. hoover institution senior fellow robert service, thank you so much for your analysis. looking back at what has been happening, trying to make heads or tails of where things go between the u.s. and russia relationship. "daybreak:on australia." this is bloomberg. ♪

♪ bloomberg has been told chinese electric vehicles startup expects to raise more than $600 million this month from investors including alibaba. that would value the company a close to $4 billion despite the fact they have not sold a single vehicle. it has yet to get a production license either. the cofounder told us more about the plans. i think first off, it is a new company. the majority of the auto businesses in china tend to be other carmakers. any new company needs to have a young mindset. i need to be able to drive innovation from places like the internet. new technology, carmakers, and a financial system in order to differentiate itself. i think this is something that makes us unique. us into amake different manufacturer.

and a company that can change the future of mobility services. i see car manufacturing as a way to get us there. because the car itself is at the core of intelligence mobility. a teche perspective of manufacturer, they will combine hardware and software to provide products and services here but the most important thing is through our tech product. we content -- can connect to for and skills to provide a different operation and service. this is my hope. >> you were a successful entrepreneur before this when you started. what is the environment now for startups compared to last year -- compared to when you are starting? >> the temperature of the entire market is different or when i first started using web, the market did not pay attention to mobile internet. there was not interest here there was no much money. there was not much talent. when we started out in 2004, there were about 1500 companies. by 2017, there were only about three to 10 companies left alive.

we only invested about $150 million total in a decade. now it is different. everything is concentrated. there is money being pumped into the auto industry and we have invested $1 billion. going forward, we plan to invest $1.5 billion. >> this is a very capital intensive business p what is it like raising funds now, there are more people and investors willing to get involved than it was 10 years ago? business,started my funds were generally smaller. for example, if a fund had 500 million dollars, we consider that to be a decent size. if you look at it today, we are seeing huge funds. why are there some and a good opportunities in china? it's the users, it's the markets , and many sources of capital. like individual, strategic investors, government, venture capital, and now banks. any banks have given us credit.

-- many banks have given us credit. moreays, we have a lot strategic investors. such as alibaba and foxconn. ceo speaking to bloomberg.

>> it is 7:00 a.m. in hong kong. i am yvonne man. welcome to "daybreak asia." the top stories this tuesday, asia-pacific markets looks set for a lower open after tech let most u.s. stocks down. netflix, one of the big losers on wall street to my shares plunging after the bell as earnings and sales growth missed expectations. ramy: from bloomberg's global headquarters, i am ramy inocencio in new york, where it is just past 7:00 p.m. on monday. blackrock's larry fink says tariffs may hurt the u.s. economy. imf is warning about the