>> 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 dangers of a trade war. president is under fire for

going soft on russia. he said he sees no reason why moscow would meddle in the election. good morning to you, yvonne, and to our viewers across the asia-pacific. it was an interesting day in the u.s. market because there was not actually anything happening at least in terms of u.s.-china trade tensions. guide the market was earnings. for example, in financials, as well as some surprising news coming out of saudi arabia that space hurt the commodity with oil falling by 4% both on the wti as well as brent crude front. .nteresting difference headwinds pushing the markets as well as commodities around today, yvonne. yvonne: despite the geopolitical

tensions around helsinki, it seems that was nothing. is the imf worrying about complacency when it comes to the risks to a trade war and when it comes to netflix and the miss on earnings, certainly going to be eating headwinds as we wake up its morning. ramy: that did happen after hours. the nasdaq falling a little bit further. let's get to the u.s. close at least to show you how we ended the day. made a mix in terms of stocks. the dow up by the .2%, the highest in the month. the s&p pulling back from that 2800 mark we just hit in the nasdaq. down the most. because of netflix happening after hours, the nasdaq in terms of futures are looking fairly negative as well. take a look at currencies

as well as commodities. the bloomberg dollar spot not moving so much. the u.s. 10 year, 2.86%. new york crude as well as brent 4%de both falling more than in the u.s. session. we are seeing that also continuing down by about .1% for new york crude, yvonne. yvonne: it seems like risk assets could be troubling here today. let's take a look at how we are faring when it comes to equities. japan coming back from that holiday as well. catch up in tokyo. index 50 -- kospi also on the way lower. pretty moderate losses it seems at the start. we are looking ahead to some data and we did get the china data. gdp pretty much was expect it. slow, modest, but we have the chinese property prices coming

through in a couple hours or so. not doing a whole lot. the kiwi, we did see that inflation miss for the second back fromut we bounce the low. hovering around 67. a lot of the market still pricing for slower inflation and a rate cut in the picture. the offshore renminbi not doing much. we are holding off on that line in the sand at 6.70 up -- at the moment. the question of russian interference in the election brought him to power. pres. trump: all i can do is ask the question. my people came to me and some others, and they said they think it is russia. i have president putin. he just said it is not russia. i will say this. i do not see any reason why it

would. yvonne: we are joined now from washington by joe sobczyk. interesting press conference between the two leaders. tell us a little more about what we have heard so far from helsinki. joe: it's been pretty widespread and pretty quick. there are a number of republicans who have been critical of trump in the past. this a disgraceful performance, the worse in memory by a u.s. president. there are other people who traditionally defend trump or avoid directly criticizing him. he did contradicts the president with his statements about u.s. intelligence agencies, saying the evidence is in that russia did indeed interfere in the 2016 election. where that takes it, whether or not more republicans feel themselves free to the five

y trump on other matters remains to be seen. it was remarkable even with his staunchest allies who called it the worst mistake of his presidency and one that must be corrected immediately. trump is getting a lot of pushback on this. scathing fromal the democrats, but even in his own party. paul ryan said the president has to appreciate that russia is not our ally and calling russians thugs. aside from the verbal side of things, what can be done? can congress do anything? is this really all we have right now? joe: the constitution gives the president pretty wide purview over his foreign-policy, but there are other areas where they can express their displeasure. there is some legislation that in been proposed, bipartisan

the house and senate. sorry, the senate. that would require that the director of national intelligence would have to certify whether or not russia has stopped interfering in your elections. otherwise, they would get additional sanctions. it would take the certification from the president and put it in the hands of the chief of u.s. intelligence. there are some things on the side they can do to create some pressure for the president and on russia. ramy: interesting. mr. trump did say he trusts his national of intelligence equally with vladimir putin right now. joe sobczyk. ,he latest from wall street where tech and energy stocks led the market lower end we have to talk about netflix. the first of the fang stocks -- faang stocks plunged. they were definitely looking for

direction. >> we really did not see it find direction. today'syst said it was higher. let's go to the board. it was a mixed close. definitely not a session where by stocks were moved higher any of the positives including bank earnings and the fact that you had a stronger than expected retail sales data in a provision that caused the dollar to move lower. let's look at it. the tech heavy index. hitratio between the stocks by the china trade war affairs in the nasdaq, near the lowest since august 2017. analysts say it has been drastically underperforming tech. check out oil down below 70. let's go to the price chart and see what's going on. in theged 4% or more latest session. go back two weeks. high, downa 40 month

10% since then, and it's concerns are twofold, that you have a decrease possibly in demand because of all these trade concerns and an increase perhaps in output. saudi arabia is said to offer more oil. let's take a look at the big movers in the stock trading. it has a lot to do with earnings. ceo misbehavior. tesla's ceo, elon musk, taking to twitter over the weekend after asking himself and others and actuallyn saying something quite surprising. a critic from the u.k. was called a pedophile by musk. netsuite has been deleted. on stock is taking a beating this. he will reign himself in going forward. j.p. morgan chase riding it. we had another round today we will get to. we had an energy company, green

energy, moving higher, as concerns in ontario have updated. quickly, let's go into the bloomberg. is is where you can's -- gtv where you can see our charts. the vix spiking here. the ceo of bank of america saying i am not in favor of a trade war, but one of the tail winds be stronger trading revenue. ramy: especially with the bank of america reporting earnings today. analysts definitely raising their estimate pretty much across the board. this is some positive news. >> bank of america was one of the banks we were worried about. they came in strong. we had blackrock, deutsche bank, with positive news regarding earnings and green on the screen in a big way. let's start with bank of america. bank loans with a big story. they increased their loans to consumers faster than their

rivals. their income topped analyst estimates, having a lot to do with consumers levering up again. their highest earnings in the consumer unit in eight years really got wall street's note. take a look at deutsche bank start. this company is under big pressure. a new ceo. they came out with their pre-earnings forecast. we are going to beat earnings. wall street was rather supplies -- rather surprised. they came in ahead of estimates. the ceo, larry fink, warning that tariff trouble could be a hit to the stock market, and that grabs the headline. grabbedwhat also headlines after hours was netflix. the surprise slowdown in subscriber growth and the stock tumbling. how much will this put a dent on the nasdaq for tuesday? >> it definitely put a dent in

nasdaq futures. let's look how low. it was down as much as 50%. is is then here subscriber slowdown the beginning of a trend? this is the first of the fang stocks to report. high momentum stocks. as you know, subscriber growth came in one million below what was expected. even though they beat on the earnings, it's all about subscriber growth when you have this kind of momentum. the stocks have been off to the races, one of the ones to own, and when you look at what investors are concerned about, it is the high momentum stocks. when you get a sign of a slowdown, usually, investors run for the exit. how heavily does this way on the nasdaq? how heavily does it hurt the other faang stocks momentum? yvonne: strong but not stellar.

a lot of the guidance has been soft as welfare netflix. su keenan joining us from new york. first word news with jessica summers. boss larryackrock thinks as escalating trade tensions make for a broad market downturn and hit the u.s. economy. people bloomberg stocks could fall 10% to 15% and gdp could start slowing next year 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 spat to a full-blown trade war. >> if we do implement this $200 ariff, i think all bets are off. the gdp will slow dramatically. we will have even more uncertainty about the world and how the u.s. is being portrayed. alsoca: the imf is concerned, warning that

financial markets continue to be complacent amid mounting trade tensions. chief economist -- the chief economist for bloomberg that equities will be susceptible if the escalating spot is not taken more seriously. he said the current growth trend in the u.s. economy is unsustainable in his opinion. may prime minister theresa has won the first vote on post-brexit customs arrangements but it's facing more pressure from inside the party. she carries the majority with just three that suffered another resignation. she is being attacked by both pro-europeans and hardline brexiteers for her plan to maintain close ties with brussels after the split. amazon kicked off prime day with technical glitches on its website and app. that is threatening what was expected to be a 36 hour sales extravaganza. travel spike at 3:00 p.m. eastern.

shoppers spend $3.4 billion on the site during the event, up more than 40% from last year. global news, 24 hours a day, on air and at to talk on twitter, -- at tictoc on twitter. i am jessica summers. this is bloomberg. ramy: thanks very much. still ahead, we will take a closer look at earnings season. not awful is not enough. international assets advisory joins us next. yvonne: we will have the views of ratings as we run the rule over u.s. banks. this is bloomberg. ♪

yvonne: this is "daybreak asia." i am yvonne man in hong kong. ramy: i am ramy inocencio in new york. asian equities look set for a

weaker open after a decline in tech shares led most u.s. stocks lower. president and a ceo of the international assets advisory. he joins us from orlando, florida. good to speak with you here. as our asia pacific investors start waking up and taking stock of what happened today, it was a different direction. earnings clearly taking center stage at least for today. >> earnings absolutely later in the day took center stage. that is a good sign. i would rather see the market driven by traditional fundamentals instead of geopolitical hyperbole. with regards to earnings, bank of america came out today. it was an earnings surprise of more than 11%. ahead toof looking where bank earnings might be going as well, earnings per share, the stock rises, where do you think these are headed?

assets.national cautiously optimistic on the bank stocks and all financial stocks. in an environment where we have seen interest rates rise and expect interest rate to continue to rise, a little bit in incremental step. we see this as a good generator for the banks in particular. ramy: one thing we are waiting to feel the full effects of is netflix plunging by some 50% after the subscriber numbers in the earnings call. looking ahead, since it is part of the faangs, what are the expectations? it comes to tech stocks, we always have so much a dictation that they will continue to do well and any good them significantly higher and anything we perceive as weakness, weaker than we expected, certainly has the opposite effect. netflix earnings were very solid. report,entioned in your

it has caused some concern. i think that is the same type of concern we will see as the other faang stocks and tech stocks start reporting, if there is any weakness that the market is not looking for. right now, it will lead to negative effects on those stocks. yvonne: do you think tech can dominate for the rest of the year? tech needs to slow down. i think if we can have tech slowdown at a measured pace and not continue to go up, then we will have more balanced. im very much a long-term investor. i hate to see anything go flying too fast or come crashing down to suddenly. not lead as will much as it has over the past year. i think it will continue to be one of the leaders but we will see a move to other spaces like financials. you mentioned a little

bit about earnings driving market, which is a positive sign, but where are the risks that things could be tilted to the downside? it seems we are expecting earnings. when we see these kind of big netflix, markets can get panicked and punished quite a bit as well. are we seeing a talk when it comes to earnings ? ed: i don't believe we have seen a top. concerned we are seeing another 1999-2000 in the stocks. and 2000, weo 1999 had the tech crash. it did not take the misses. it just took small misses. that is a real concern. yvonne: what do you make of the guidance we have been hearing from ceo's? it seems they are benefiting from tax cuts, but there is -- they are uncertain about where this trade war will live. that is what is getting these

stocks punished. how important is the guidance this time around? ed: i think the guidance is extremely important and i think their concerns are very valid. i think it is still at a stage where it is hyperbole in the trade war. by the same token, if we wind up starting to go down the wrong path, it will be the first hit, so i can understand the concern being shared by the ceo's of these type of firms. ramy: it's interesting because i see that you think that tariffs could be good or bad depending on the country here. it's interesting because earlier today, we had vanguard's chief economist actually agree with you. explain to me why you think tariffs could be good here. all, if we look at the less developed world, if we eliminated all tariffs, the first thing it would do is just further increase the chasm between the haves and have-nots.

without tariffs for these countries, whether it is africa or developing parts of asia or latin america, all other goods would leave their countries at very low prices. they would all be gobbled up by the you, the united rates, japan, australia -- the e.u., the united states, japan, australia, etc. it is not like they are buying our finished products in any great way, shape, or form. all we would be doing is eliminating the tariffs in those countries and focusing on export tariffs. we would make their goods just more readily available to us to have countries. terrace can be a very good thing. we are talking about the developed world. the g7 or the g20. maybe we need to have a further look at terrorists and more free trade and more open trade and the elimination of tariffs between those type of countries that are fairly well-developed.

we had knowledge on the g7 countries economies are extremely developed. if we bring down trade barriers, that would increase global trade. i am always saying this. a rising tide lifts all boats. yvonne: thank you. ed joining us from orlando, florida. bloomberg users can interact with charts using gtv . the key analysis. you can say this charts for your future reference as well. he sure to check out this cool function. this is bloomberg. ♪

ramy: this is "daybreak asia." i am ramy inocencio in new york. yvonne: i am yvonne man in hong kong. faces new questions about

corporate culture as it faces a gender discrimination inquiry in the u.s.. sources tell us the investigation is focusing on alleged paid as garrity's -- pay disparities. claims of discrimination and questionable practices led to the toppling of co-founder travis kalanick. two: the world's top playmakers far to withdraw on the opening day of the farnborough airshow in the u.k. than $55ed more billion in aircraft sales with airbus coming out fractionally ahead. business was dominated by the latest a320 and they are helping to spur orders past 12,000 claims. fell as elon musk found himself under fire for another controversial tweet. british cave of diver who helped save the football team trapped in northern thailand, accusing him of being a fed a file --

pedophile and saying he was not involved in the rescue. he called for tesla to keep calm and focus on building parts. this is bloomberg. ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver.

yvonne: 7:30 a.m. tuesday in hong kong. we are in a storm watch this morning as well. plenty of rain throughout the week. 30 minutes away from asia's first major market opens. seven: 30 p.m. on a monday in new york, looking across to the empire state building into downtown financial district of manhattan. markets closed down just marginally, about .1%. the biggest weight was happening in the energy space. oil falling for wti and brent. i am ramy inocencio in new york. yvonne: i am yvonne man in hong kong. you are watching "daybreak asia ." first word news now with jessica summers. jessica: thanks.

several top republicans president trump. he said russia must be held accountable for election meddling and senator john mccain called the helsinki summit a tragic mistake. trump questioned whether russia interfered in the 2016 election putin assted he trusts much own national intelligence director. pres. trump: all i can do is ask the question. people came to me, dan coats came to me, and some others, and said they think it's russia. i have president putin. he just said it is not russia. i will say this area i do not see any reason why it would. jessica: australian workers face stagnant wage growth. theing bonus payments for ceo's have pushed their pay to record highs. a survey by the australian executive bonus payments climbed 18% last year. the group's members own 10% on

average of the asx 200 index. they say they will recommend voting against excessive awards. groupon is being accused of building its online coupon business on the back of ibm technology without permission. a lawsuit in delaware sees ibm developing more than the $166 million in damages for the claimed innovations. an ibm lawyer says groupon failed to purchase licenses. they say the patents in question are invalid. the world's most dangerous nation is planning bonuses for police officers. that is despite claims that only one in six ordinary people's feel safe -- ordinary people feel safe. president nicolas maduro for each bonuses officer. that sounds impressive but actually works out to the equivalent of three dollars u.s.

on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 100 20 countries. i am jessica summers. this is bloomberg. that.thanks very much for let's head to netflix because the company plunged in extended trade after earnings as well as user growth missed expectations in the last quarter, settling down after hours. the company missed its target by about one million users and warned of more disappointment in the current period. from losw joins us angeles. i understand that at least part of the problem was that there was not new content for people to get inspired to be new subscribers? not evenhat there did to be a big breakout hits in the quarter. netflix releases so many new shows every week, often more

than once a week, that it seems like every month or so we have a big hit on netflix. the only things that stood out tended to be standalone movies. those don't bring in a lot of subscribers. it is the dramas and comedies that tend to drive user growth, and they did not have something in the quarter that helped. ramy: i have to say, i was looking for things like that. nothing too compelling here. thething interesting is free cash they had has been going through at a terrific pace, and they are trying to put in $8 billion in terms of new content. does this begs the question that they need to do more investment in that space to try to attract people? lucas: they will continue to increase their programming and the marketing around it. the amount they spend to sell

those shows to users has doubled. escalately that will is not so clear. i think it is on a pretty steady pace. they are not overreacting to today. the executives reiterated that they are doing just fine and if you look over the past 12 months, their growth has exceeded expectations. their expectation had nothing to do with programming competition or anything. it had to do with forecasting their growth over the past three quarters. they have missed forecast by at least one million each time. the last two times, it worked out better for them because they beat the forecast. ramy: clearly, not working now and they are bearing the brunt of that with the share price falling 14%. to eightlooking ahead internationally. for 100hey are hoping

million new subscribers. any new insight to try to shore up the frontier markets? lucas: netflix does not breakout subscriber totals for any territories beside the u.s.. withdid use a phrase regard to you asia about turning the corner, feeling like they are starting to see watch time and smarter growth pick up in that region. they express a lot of optimism. it is still a niche product. if you look at netflix's progress, it is undeniably successful in the u.s., u.k., canada, brazil, mexico. they seem to be having more and more success in france, germany, spain. asia remains an unknown. it's based on some of the word wordss they had, and the their executives suggest that

they are having a little bit of success, but the numbers are still quite small. yvonne: there is also the question about competition. dealsghting these merger we see with at&t and time warner. fox and comcast, so to speak. how is this going to impact them? at what point does it become competition? lucas: as they are material difference -- materially different or new. we willas one that not see until 2020. at&t has pledged to invest more in programming. when you invest more, you do not see those for another year or two. the impact of the programming may be even longer because it will be hard to know -- i don't seek he will automatically someone cancel netflix, so i think this new competition we are talking about, it should be four years until we see what the

real impact is. yvonne: thank you. lucas shaw, our bloomberg media reporter joining us from l.a. on netflix. switching to bank earnings, u.s. consumers are borrowing more and that led to higher profit at bank of america. unit posted the highest earnings in eight years in the second quarter, and that helped the banks beat estimates. joining us is the managing director and global trading and in globalthat -- trading and universal banks. it seems a solid quarter for the banks. are you encouraged by the results despite what we are seeing in the stock prices? >> yes, we are obviously looking at fixed income creditors, so from our perspective, these earnings have been pretty solid. we are seeing, in the u.s. particularly, pretty strong economic growth, and that is being reflected in bank earnings. as an: do you see this

improvement in overall operation from the financials or a lot to do with the tax cuts we saw earlier this year? >> there is a big boost from tax cuts. very strong profitability as a result. they took a big hit at the end of the year, but that is a clear turnaround. now, it's just a matter of time in terms of whether they hold on to those earnings. yvonne: one of our bloomberg opinion columnists wrote this report saying they have to report a 14% improvement in earnings. it's quite alarming because you take a look at the economy approaching 4%, you have the talk of deregulation. why do you think it's not generating better business? joo-yung: there was a bit of a slowdown in loan growth, but we see quite a pickup from loan growth. is the banksof it have been working at

restructuring and cleaning up for quite some time. you are starting to see that operating leverage told. the results of that you are seeing in this year's earnings. net interest margins expanding, which is something that actually has bucked the trend. yvonne: earlier today -- ramy: earlier today, the cfo said the not care, while he did for it, could actually be good for the banks bottom line. hop into the bloomberg terminal. witht to show you happening in terms of volatility. this is called the return of volatility. the question is whether it may aid trading revenues. what do you think about this? joo-yung: yes, that's definitely something we have seen historically in terms of client engagement. the more volatility you see, you see more trading activity, which benefits the larger banks like and of america, city, jpmorgan,

as long as it is not too much volatility, it tends to benefit earnings. ramy: also what yvonne said, talking about the tax cuts and really helping that bottom line. what do you think that this might come off, and of this year? -- end of this year? joo-yung: it depends on how aggressive banks are in terms of pricing. they are enjoying the benefits of, you know, it depends on how much deregulation there is and how much competition there is among some of the large regionals. a little bit of an advantage for the smaller banks actually because they will see less regulation. more price competition as a result. i don't want to say when that's going to happen. we just do not know. yvonne: the chart shows what we see when it comes to stocks.

we have seen this on the performance when it comes to the financials. compare it with the rest of the s&p relative strength. it shows the six-month the five-year spread, which is lighter as well. i think a lot of the worries is the flattening yield curve. is it justified? joo-yung: i think what we have seen is it has been a pretty flat yield curve and the banks have been doing ok. it's just how long it lasts. there's been some concern because that will compress net interest margins and that will be, you know, negative for earnings. it really depends. part of it is the cycle has been pretty long, too, for u.s. banks. we will see a bit of a turnaround. yvonne: the function we usually like to show when it comes to bank ratings, i put on what they are seeing so far when it comes

to north america, the outlook when it comes to financials. we are seeing 33 upgrades and eight downgrades. do you expect to see more upgrades? prettyg: i think it's a stable rating outlook for the u.s. banks and a lot of those upgrades and downgrades have been driven by idiosyncratic factors with more individual bank issues as opposed to thematic sector issues. we really look at the fundamentals. that's what's been driving it. i don't think it's one specific thing that's creating those changes. yvonne: which banks are better positioned? joo-yung: recently, we did take some rating actions. you saw what we did with jpmorgan. we also upgraded bank of america. they turned around their earnings story. we continue to see that play out. i don't know that we take winners or losers per se. yvonne: what do you make of deutsche bank? joo-yung: you know, that was, i

recently with deutsche bank, we did put them on negative outlook. we have another round of strategy changes. it is a decent amount of execution risks. produced earnings that were surprising to the market on the upside. relatively similar to what we saw last year. yvonne: do you think that this is a change in what we saw with the company itself? or do you think they are doing more now? do you see positivity with the new leadership? joo-yung: he's pretty focused on cost cutting. we are seeing quite a bit of that. we are rethinking his strategy in the u.s.. that's part of what we want to see in terms of longer-term, where the profitability comes from as well as stability with postbank, so we are looking at that. there is still some execution risks for sure. yvonne: head of north america banks and global trading and

universal banks. coming up next, the imf warns of cracksg crops in the -- in the growth picture. this is bloomberg. ♪ mberg. ♪

yvonne: this is "daybreak asia." i am yvonne man in hong kong. ramy: i am ramy inocencio in new york. definitelyay powell faces a political minefield as he prepped his half yearly report to congress this week. he's expected to deliver an upbeat message despite growing warnings about tariffs from the likes of larry fink as well as the imf just today. kathleen hays is here in the studio with me. interesting background with the trade concerned, but retail are positive. they have not to go to consumers, the concerns. kathleen: apparently not.

one thing about the semiannual testimony -- this will be jay powell's second time he's done this. you are facing a fairly politicized atmosphere. republicans on one side, democrats on the other. each tends to want to get the fed chair to say what they think about trade wars, what they think about tax cuts, etc. another issue for jay powell that makes it difficult, he has already given us an upbeat view of the economy. it is getting worse. thee is concern about how fed is going to navigate all of this. at the same time, it's interesting. the imf saying the trade war is going to imperil growth at a time when they are also saying that it is not happening yet, basically. let's jump into one of the charts from the bloomberg library. the though they said -- u.s. could be hit hard by a trade war. they left their global growth

forecast for 2018 at 3.9%. they are looking further down the road. they did not downgrade china's outlook for growth either. at any rate, that is an interesting view here. meanwhile, solid retail sales. if there is such concern and fears, why are people still spending money? up for the fifth month in a row. the retail sales revised sharply higher. consumer spending in the first quarter, bouncing back in the second quarter. the atlanta fed edp tracker now estimate second quarter growth at 4.5%. meanwhile, the chief economist for the imf warned not so much about trade. one of his big concerns for the u.s. is something jay powell will be asked about. what is that going to do to the economy? let's listen to what he said.

jay: we think u.s. growth will fall as the effects of the current fiscal stimulus begin to wane. less government spending and the reversal of tax incentives, and furthermore, the u.s. is growing way above potential, and that cannot continue. when you put it all together, this is another thing. jay powell mentioned he thinks tax cuts are boosting the economy for some time, but that is one more reason there is a need to be raising rates. when he gets before congress tomorrow, democrats will want him to attack trump's trade raise questions about tax cuts. so a bit of a minefield politically. yvonne: we will see if he actually, you know, talks -- overlooks it or whatnot. the one thing we cannot overlook is a flat getting yield curve -- flattening yield curve.

his potential is that it is not signaling recession, but we have heard from other fed officials who say otherwise. latest,: in fact, the at neel kashkari, president of the minneapolis fed, in an essay, said he thinks fed, if it rates, risks in ridding the yield curve. in the past, that has been a harbinger of recession. furthermore, the ceo of black rock, larry fink, in an ,nterview with erik schatzker says he also sees a possible inversion of the yield curve this year, although he is not so convinced that it's going to be a harbinger of recession. he says that there are other things that are flattening it. this is something we know in the past, yvonne, we have seen the curve invert. the red bars are recession. you'll a nice white curve that gets smaller and

smaller and smaller. when it gets negative, you see the red bars appear. look where we are. 25 basis points behind the 2-year note and the 10-year note yield. this is definitely a concern. one more thing that's interesting from that interview, yvonne, larry think was really concerned about tariff war's. in fact, he said that not only would more china terrace end up hurting the u.s. economy -- t ariffs and up hurting the u.s. economy, but they could go down 15%. if this goes on and on, more and more people are worried about it. coming back to jay powell, i think it will be difficult for him to not give more specific that he has. there has been this view that the economy is at not that much of a threat yet. complacency of what people are not noticing when it comes to the economic risk of the trade war and also the flattening yield curve.

kathleen, thank you. kathleen hays joining us from new york. we are also counting down to the opening of japanese markets after monday's holiday. to's look at which stocks watch. our reporter joining us in tokyo with more. i know you are watching for mitsubishi ufj. it has been hit with a month-long ban on participating thegb auctions now due to price manipulation case. how does this add to their struggles for the rest of the year? >> right, this is certainly on thed to damage firm's trading profits, but the extent of the damage, we have to see how bad this is. the firm has apologized, but of course, this is also expected to have a bad impact on the firm's reputation. it is expected to have a negative impact on stock prices. how badly investors take it today, we will have to see when

the market opens in about five minutes. are watching nintendo stock as well with analyst upgrades. what is the story? min jeong: they raised the stock to buy from neutral, saying that although stock prices slumped 30% from its january peak, stock and the company has potential for growth based on its content ip and its popular switch platform, so we will see if that is able to give the stock a boost today. ramy: what else are you watching as we come back from matt holliday? -- that holiday? min jeong: there is a few i think. there is a japanese company called alpine. pulsing is hedge fund disclosed singer's hedgel fund disclosed it owns it. we do not know what the details of the proposal are. shareholder activism has been increasing in japan.

we will see if this turns out to be an interesting event or not going forward. ramy: all right. thank you very much. bloomberg asia stocks reporter, min jeong lee in tokyo. we will have more coming up. this is bloomberg. ♪

yvonne: we are counting down to the market open in japan, south korea, and japan. -- japan and south korea. equity futures facing a bit of a trouble at the start. modest losses projected by futures right now, down .1%. the asx 200 down by .3%. it wasn't so much the geopolitical tensions that came out of helsinki but more so about trade. the fed, jay powell's testimony starting in congress later on today in the u.s., and also when

it comes to earnings, netflix missing when it comes to subscriber growth as well as the guidance, pretty soft as well. that could be more headwinds for tech. we will talk more about what is to come with our guest, later on. ♪

yvonne: 8:00 a.m. here in hong kong. we are live from bloomberg's asian headquarters. welcome to "bloomberg daybreak: asia." the asia-pacific looks for a lower opening after tech lead most u.s. stocks down. earnings not trade are now pushing markets. the big loser as subscriber growth missed expectations. ramy: from bloomberg's headquarters, blackrock's larry fink says terrorists -- says may hurt says tariffs

the u.s. economy. beijing says it will work with europe to protect the rules. yvonne: earnings running markets right now but certainly it is interesting given the positivity we were expecting for this earnings season. it seems the beats are a you on fast. yawnfest. that could lead to some trouble siphons in the asian market. ramy: you know, looking at at least bank earnings that have come in in the last half week, they have been pretty positive. for example, bank of america reporting 33% profits and

analysts have been raising their ratings for banks 30 much across-the-board. a far cry from where we were this time last year when banks were getting downgraded because of a lack of volatility. the volatility coming around the world from geopolitics as well with trump and vladimir putin. that is giving a lot of people time to figure out what they want to do. yvonne: we have been talking about not so much the fed or trade, it really was about earnings. look at the latest with sophie kamaruddin. and jay powell's testimony as well. >> given what we have going on with oil markets and netflix humble. energy markets are weighing the most in tokyo and seoul. more voices chiming in around trade related risk from larry fink for blackrock to the heads of boeing. the imf did trim its outlook for

japan based on weak consumption and investment. we are waiting for rba meeting minutes. take a closer look at what is going on with 10 year yields. 2.85 percent.at we are waiting for jay powell's commentary on tuesday. there is little expectation that he will change his tune on the pace for tightening. until the fed shifts from a hawkish system, investors have dumped gold for etf's for eight straight weeks. this is the longest stretch of outflow for gold since january 2015. with oil under pressure and prices that a three-week low, volatility has been picking up reaching the highest level since august. we saw what happened in

u.s. trading. as brentas well falling by more than 4%. more now with bloomberg strategist was goodman -- wes goodman coming out of singapore. jay powell will be briefing congress on monetary policy beginning on tuesday. what can we expect from his testimony? : hello and good morning. more of the same. of further,idea gradual rate increases. jerome powell has been saying things like the economy is in a good spot and he has been sleeping well at night. he called growth very strong. he seems perfectly content -- he will certainly solidify the idea that there will be one more hike this year and he seems content to keep the idea like that there might be two more. what that goes against

neel kashkari is saying. he says there is not much reason for the fed to raise rates much further. what is happening there? : i mean, as they keep raising rates, the question is how much is too much? goals of the fed is to keep the inflation rate at about 2%. overnight, we saw a big fall in oil prices. they are now following commodity prices lower and by some measures, inflation expectations are falling quite a bit now. there is this concern that the neutral,osing in on maybe going to be hiking to quickly. if you follow the narrative through further, it will issue in --

there is a growing body of officials that the fed is hiking an of and it is putting brakes on the economy. yvonne: we have a chart highlighting best. you can see the yield. 2%. higher than the s&p 500 dividend yields of 1.85%. do we have to start looking closely at the class now? is one of the biggest drivers of financial market its best of financial markets this year -- these days. the two-year treasury yield is about 2.6%. some of the short-term treasury rates were closer to zero a few years ago. that will draw people to the u.s. the will attract people to u.s. assets which is positive for the dollar. other assets that do not yield

anything i think will suffer. you mentioned gold earlier. i think we could toss bitcoin in that. they do not pay any interest in they do not have any yield. treasurying short-term yields will benefit the dollar and will be to the detriment of other assets that do not pay any interest. goodman, thank you for joining us from singapore. you can follow more on today's top stories on our live blog. you can get a market rent get with one click. there is commentary and analysis from wes. get you caught up with the first word news. jessica summers has more from new york. >> several top republicans have criticized president trump's comments after his meeting with vladimir putin. house speaker paul ryan says it russia must be held accountable for election meddling and senator john mccain called the

helsinki summit a tragic mistake. questionedrump whether russia interfered in the election and he also suggest that he trusts vladimir putin as much as his own intelligence director. >> all i can do is ask the question. and some came to me others and they said they think it is russia. president putin and he said it is not russia. i will say this -- i don't see any reason why it would be. >> blackrock bus larry fink says escalating tensions may hit the u.s economy. 10%-50%cks could fall and gdp could start slowing next year. that is if president trump sees through the tariffs. it would elevate the current spat to a full-blown trade war. concerned also

warning financial markets continue to be complacent amidst melting trade tensions. global equities will be susceptible if the escalating spat is not taken more seriously. the current growth trend is unsustainable in his opinion. day withcked off prime technical glitches on its website and app. threatening but was expected to be a 36 hour sales extravaganza. trouble spiked when the even begin at 3:00 p.m. shoppers could spend $3.4 billion on the site during the event. that was up more than 40% from last year. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i am jessica summers and this is bloomberg. ramy: thank you so much. still ahead, china's crackdown

on syntactic regulation. we hear from hannah qiu. warningblackrock is escalating trade wars will hurt the u.s. at home. in.s kuijs weighs

yvonne: this is "bloomberg daybreak: asia." as we know, trade tensions remain front and center as they tariff spat heats up between china and the u.s. with warnings from larry fink saying the escalation could hit the u.s. as well as global economies. kathleen hays is here. this tit-for-tat has really begun in earnest. reporter: the wto

retaliating against american tariffs on imported steel and aluminum saying you cannot do that while everyone else says you cannot say that is a national security risk. i think tit-for-tat is here. we have had more stories on bloomberg today about how wall street firms are looking at this and the ceo of blackrock, larry our ownterviewed by erik schatzker said if they -- if there are more tariffs, that to slowed the gdp dramatically. he is also very concerned about what this means for markets. let us see what he said earlier. war, we have a true tariff it will pull the markets down 10 -- 10%-15%. >> you would not call this a

tariff war? >> we will see about the proposal that the u.s. has done with china. reporter: we did have that world economic outlook from the international monetary fund. they are worried about complacency in markets. like larry said, that would really get the markets' attention. the u.s. economy is vulnerable. not reducing the global outlook -- global growth is still pretty decent. it is interesting that citigroup put out a piece today saying u.s. trade actions had been brutal and unilateral puncturing the trust built up over decades fortheir best case is negotiations to continue especially between the u.s. and china and for trade deals to be done in time for the u.s. midterm elections. a lot of people are counting on that -- that it is a political lever that president trump is

trying to push. interesting views from wall street today. and a lot of concern. and a lot of concerning sentiment. on, you're going to stay with us here. let us bring in louis kuijs. giving usrom kathleen the sentiment side of things as well as the forecast for pain. where do we stand from your perspective? theheard larry fink say market will fall 10%-15%. louis: the big question with the u.s. versus china is are they actually still talking? what is the probability that we will see a de-escalation as opposed to an escalation? .e would like to feel hope we have to admit that at the moment, there is no meaningful

discussion going on between the sides and that makes it more worrisome. and more threatening. ramy: a lot of analysts have come on bloomberg television saying they think they will see result solutions and solutions before the midterm elections. the s&p 500 is a barometer of donald trump's popularity. do you have a similar hope? louis: i am not an expert on u.s. domestic politics but i have a feeling that with the current administration, some of the benchmarks that we used to have do not seem to operate. i think there are other triggers a change inead to the trump administration's policies. for example, if some of the more conservative pundits start to criticize him or for instance if we get significant economic spillover or damage and people

start to complain about it that would be the biggest hope that there will be a turnaround from the u.s. side. on china side we still need to see -- at the moment there is a stalemate between the two sides in terms of technology policies from china. the u.s. says they are unfair and china has to change while china says they are part of their development strategy. we need to see some getting together before we can think about meaningful discussions over there. culling up ajust chart from our bloomberg library. it just shows the outlook. 3.9 percent. through the end of this year. question, donald trump has gotten the attention of china and many nations have been chagrined that the u.s. has complained about china's trade policies. what could get serious change terms?f these dramatic

i think that china at the moment is trying to position of these a defender existing international systems, the rule-based trading system and globalization. any feeling out there globally that china itself is not sticking to the rules and is not doing its best to further open thets economy will increase pressure on the chinese side. for instance, it is interesting to see what is happening with europe. china and europe for a few years were not able to agree on a common statement after their discussions. this year we have such a common statement because the pressure on china. we have seen a playing by the

global roles in the pressure has risen and that pressure will also lead china to perhaps start to be willing to talk about taking off some of the sharp edges of its industrial policies. interesting what we heard from beijing. we got a joint agreement and then donald said there were still some barriers out there. there is still some company discontent about doing his miss in china. how united is this eu-china front right now? eu-chinaere is no front right now. they both strongly believe in the wto and the environment but the eu is quite careful. it does not want to be seen as being squarely on china side. have commonely criticism with the u.s. in terms -- in terms of china's

industrial and technology policies as well as its investment policies. europe is always talking about the lack of reciprocity. about taking the sharp edges off of its industrial policy. do you see signs of its willingness to do that? they are now the second largest economy in the world. does china think it needs to have a more open way of doing things? louis: at one point, these policies are a crucial element china's -- of development and growth policy for the next two decades. they are very much embedded in china's long-term plans and objectives. it will not be easy to change the essence of those policies but i think it is possible for inm to at least communicate

a different way about them and they could also make changes on the margins and it is interesting to see recently that we have already had implications that china is trying to change the messaging about the "made in china 20 25." that suggests there could be some segue into a little bit of a different kind of discussion about it. -- some ofadmit these policies china is pursuing are not as outrageous as sometimes we are led to believe. these are the kinds of policies many countries have pursued. it is a matter of degree. tois the u.s. giving credit china for this policy? how effective has their policies been in the past? industriala's

policies have been very successful in terms of building infrastructure, railways -- but it is much harder to pull off becoming a power in semiconductors or ai. in a state led way. even within china question the success of these industrial policies and in that sense it is a tricky issue. ramy: looking ahead, the premier has said they hope to release a joint visit -- a joint feasibility study on the fta. this comes at an interesting time. to what degree do you think this is realistic? and what are the bones around this? louis: i think it is realistic. both sides are looking for something like this. fta that is agreed on in the

context or consistent with wto rules and ever sizing the multilateral nature of that. such an agreement is very much in the interest of both sides. there is a driving force over there. --people believe it will be possible. there are discussions around technical issues like recognition of brands, especially in terms of food products. technical discussions that if there is political will on both sides, they can progress and 60. ramy: also -- and succeed. ramy: people wonder if china will pursue policy to hit that 6.5% target. toyou think they will try

pull the trigger on some kind of easing moving ahead? louis: they have already started to ease on the margin. ratio.ve cut their rrr they have changed the instructions to local governments encouraging them to spend. we have seen some change. and on the monetary side, which is crucial, whatever change there has been in policies has not changed the course of overall credit growth. the change is a little on the margins and that is in part because they do not want to overdo the growth. growth has come down to 6.7%. that is still significantly higher than their own target. they do not want to completely shift course. they still want to take that leveraging campaign seriously. ramy: we will leave it there. thank you very much for your analysis. don't forget our interactive tv

unction, tv , you can watch us live and catch up on interviews as well as dive into any of the bloomberg functions we talk about on the show. this is only for bloomberg subscribers though. it is at tv . this is bloomberg. ♪

yvonne: a quick check of the latest business flash headlines. it is keeping a wary eye on trade tensions. the fund says of all of the capital freed up over the last two years, the u.s. has taken the business -- the bigger share including investments in boeing and dow dupont. ford has agreed to pay almost $300 million to settle consumer economic loss claims connected to airbag recalls. the deal reimburses drivers for

out-of-pocket expenses. the settlement follows a $533 million agreement involving toyota, subaru, and others. this is bloomberg. ♪ phones have made our lives effortless.

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yvonne: taking a live look outside. we just got some breaking data coming out from singapore right now. nonoil domestic outputs now, down 10.8% for the month of june. this is worse than expected. a .7% was expected. -- 8.7 percent was expected. electronic outputs also down 7.9% for the month of june. alsoonoil domestic exports missing estimates of 1.1% gain. economists were expecting 7.8%.

really goes to show why we saw the slowdown in the gdp numbers that we saw last week in singapore. this is due to the weak export number. talk about the headwinds facing singapore right now not just with trade tensions. given it is such a trade dependent country. ramy: a lot of crosswinds in singapore and other countries. they will try to figure this out. the 1.1% versus the prior 15.5%. that is a huge about-face. we will see how the singapore market and traders react to that. in the meantime, i does get the first word news with jessica summers. >> u.k. prime minister theresa may has won the first boat on post-brexit customs arrangements but is facing more pressure from inside her a party.

she carried the vote with a majority of three but suffered another resignation from her government. she is being attacked by both pro your appearance and hardline brexiteers for her plants to maintain close ties to brussels after the split. being accused of building its own online coupon business without permission. a lawsuit in delaware sees ibm demanding more than one edges $6 million in damages for the use of illicit innovations. groupon arrived late to commerce and failed to purchase licenses. groupon says the patents in question are invalid. while australian workers face stagnant wage growth, surging bonus payment for ceos has pushed their way to record highs. a survey found executive bonus payments climbed 18% last year.

own 10% on average of every company on the asx 200. they say they will recommend voting against excessive awards. the world's most dangerous nation is planning bonuses for police officers despite claims that it wants to only make people feel safe. venezuela is below afghanistan and south sudan. the president announced a bonus u.s.e equivalent of three dollars. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i am jessica summers. this is bloomberg. time to see how the asian markets are shaping up so far this morning. we have our update with sophie kamaruddin. aboutautious commentary trade and earnings.

japanese equity investors are coming back from a long weekend slightly in the used to see the a third ofat 0.7 -- 1%. theso want to highlight kiwi-dollar reversing its earlier decline. second quarter inflation data. cpi is moving toward target range. making imports more expensive reducing pressure on the central bank to move on rates. checking in on some stock movers. smartphone gain. jumping the most in tokyo since august. nintendo has a lawsuit against the developer asking for damages over five patent violations. nintendo is also gaining ground. airlines surging 18%.

i also want to highlight energy stocks weighing the most in sydney and across the region with oil trading at a three-week low. wti are hovering above $60 a barrel. year, chinaier this announced a restructuring of its regulatory agencies. the semtech companies face a tougher environment. in the long room -- in the long run though, it could benefit their reputation. ping an oneconnect offers services. joining us is hannah qiu. and stephen lamb. thank you for joining us. tell us more about the regulatory framework.

we have seen a lot of changes around semtech. perhaps for the better now. what are the improvements here? industry is developing a lot. iscan see the regulation moving. we see a little stress when it comes to these online lending platforms. massive failures recently. what do you make of that? why is it happening now? development,g the we do need more regulations to protect the interests. vonne: how have investors' expectations changed? is there panic?

is there a crackdown on shuttle lending? industry --banking at ping an oneconnect our major partners are banks. we want to provide more services to our customers. only 200 of the 1800 platforms --? --do you agree? hannah: it is difficult to predict. things are changing. we are offering more interesting products to the customer is. >> we talked about risk management. is a technology company.

hannah: the risk management is very important for the financial industry. terms a lot of changes in of customer behavior. these days our customers are moving. banks do need a lot of solutions or help to help them serve their thatmers and to understand the risk is heavy. borrow --e, when you when you borrowed from a bank in the past, you would have to have an interview with a risk manager. , our customers tend to use a mobile phone. instead of going to a branch, they use remote channels. how can we assess the risk of this customer through these channels? that is why we develop a lot of tools.

technology -- it is like a lie detector. by using this, the interviewer can have the interview and understand the feelings you have and whether you are telling the truth or not so it is easy -- so it is easier for the customer to apply. this is only one example. other solutions to help banks assess the risk of a customer. yvonne: looking at the broader industry -- why are insurance companies willing to generate revenue through technology? >> the broader picture is that it is because they need to improve the risk management. this is the money they need to spend anyway. on the revenue side, doing traditional insurance of banking business is capital intensive in terms of solvency, risk on.

generating revenue from i.t. or software -- you can call it capital intensive in the beginning. but, when you go down the road, it is a pretty high-margin business. hannah: that is true. >> my question is, how do we think about the revenue potential in the area you want to tap into in china? is a hugeere potential. around two years ago, oneconnect was serving banking customers. up to now, we are serving more than 400 chinese local banks. in the past, more than 20 local insurance companies and more than 2000 financial institutions. the market potential is big. we -- yvonne: we see many small businesses denied banking.

how are you trying to help that right now? hannah: we have many platforms. the biggest challenge for the s is higher costs. companyme of the small is small and it doesn't make sense to spend dedicated people. that is why we offer more technology solutions. you can generate all of the information automatically. assessg this, banks can the operational data about your system and they can determine what your financial situation is and grade you. it will technology, help the banks a lot to do this kind of service. do you know any other

examples of insurance companies putting technology in the forefront? psse group. they are very technology driven now. and another 1 -- there are other smaller ones like china typing -- china taiping. yvonne: last question. you have to look at the consumer and see that this is a great opportunity? investors are much more savvy right now and there is a lot of disposable income out there. hannah: we at ping an oneconnect have our banks or insurance companies to serve. overseaso you have any potential partnerships that you are looking at? blackrock is always a good model out there.

hannah: we are very open to a lot of different partnerships. we just opened our new office in singapore as well. we are open not only to the banks and financial institutions but also to sim tech companies or startups. we are currently serving the banks. open to allwe are semtech companies -- yvonne: in china? hannah: inside or outside of china, both. , hannah qiu. you just ahead, beijing and brussels take to the stage while tokyo waits in the wings. the key takeaways from the china summit. coming up next. this is bloomberg. ♪

ramy: this is "bloomberg

daybreak: asia." i am yvonne man in hong kong. eu arehina and the pledging to work together to defend the global trading system amid rising concern about protectionism. japan is set to sign an agreement with the eu. jean-claude juncker will meet with prime minister abe later today. tom mackenzie from beijing as well as our managing editor daniel from hong kong. daniel, talk about what china and the eu have agreed to do. daniel: we got some substance out of this one day summit even if it was not groundbreaking the results. we got the first joint statement since 2015 between the eu and china. they pledged to uphold the multilateral trading system and open markets. we also got movement around a

bilateral mark -- trade treaty they have been working on. wto, this isof the something the europeans have been keen to pressing the chinese on. we did get that commitment from the chinese. we will have to see what that means in consequence. we heard from donald taft in terms of what he would like to see in terms of reforms. take a listen. we need new rules in the fields of industrial subsidies, intellectual property and technology. of -- as well as a new approach to development and more effective settlement. the aim of these reforms could ensure auld be to level playing field. digital: they also talked about

their determination to find synergies between the initiative and some of the eu's initiatives. they also discussed areas like climate change and north korea. more important, this is about both sides coming out to show they are working together on trade to reaffirm the markets and the global economy that they remain rational actors amidst the turmoil from the trump administration. even though both pains -- even though both sides were at pains to say they did not oppose washington. ramy: what are the sources of tension between the eu and china at this point? daniel: the same sources of tension that have been there for a number of years. they came into the spotlight again yesterday. the business summit. european tradehe

commissioner. she said investment has fallen in china. tore remains broad barriers entry for european companies looking to expand their footprint in china. she said it was good to hear from the chinese about opening up markets but it was nice to see some action. we also heard from jean-claude juncker saying the european union remained open and not naive. the premier told an airbus executive -- if you have problems, talk to me about them and we will get them addressed. it does seem at least on the surface that china is willing to try to alleviate the concerns to be is always going what is implemented on the ground. yvonne: and the eu heads to japan next. we are likely to see quite a big agreement here. what is in the cards? reporter: they have been negotiating since 2013.

they are finally going to seal the deal. this is something that japan is building on. it signed the tpp without the u.s. not long ago and this is another big win for free trade. free trade agenda. he is moving forward even with the setback of from pulling out. trumph the setback of pulling out. is a really symbolic top of the eu moving along two countries in asia that share a common agenda to preserve the global trading order that is threatened i donald trump's policies. watched the press conference between president trump and vladimir putin. interesting to say the least. how much are geopolitical tensions affecting the eu? trump is outd

there, he sees the world in trade terms. when he was asked about his biggest foe, he mentioned the eu. that was really surprising. lumped the u.s. and russia together and talked about how the eu and china needed to preserve the global trading order. viewing the u.s. it and russia as disruptors of these -- of this multilateral system that exist. when he goes to tokyo, it will be -- and the message will be that we need to preserve the system that a u.s. helped to build up before donald trump came to office and now it wants to take shots at the wto and knocked down this alliance system or at least undermine it to some degree. donald trump does

compartmentalize trade and security while the allies see what he is doing in trade as undermining the overall relationship and are seeking out new ways. on a cusp of an international shift in order. yvonne: this will be the largest in eu history. does this remove most of the tariffs that we have seen between the nations? reporter: about a billion euros and it will open up the japanese market to wine and cheese and all kinds of good things. yvonne: to you. thank you. some of theok at stories trending across the bloomberg universe. bloomberg.com. prime day kicks off. jeff bezos became the richest man in modern history cracking

100 $50 billion according to the bloomberg billionaires index. about $55 billion more than bill gates. warren buffett donated more than $3 billion to charities. he has so far given away a total of about $31 billion. on tictoc, elon musk cannot seem to take his own advice. stocks slumped after he criticized a british cave diver. he said he would engage with his detractors on twitter less often. you can check out those stories trending online or on the terminal. this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia." ofy: let us do a quick check business flash headlines. the farnborough airshow in the airbus shared and more than $55 billion in sales. dominated bybeen two aircraft. spurring orders past 12,000 planes. >> we think it is important that in the opening market.

international business is essential for aviation. we think there will be no winner if there are trade wars around the world. as ever, we want to keep developing global business with many partners around the world. netflix was hammered an extensive trade after missing earnings and subscriber expectations and warning of potential disappointment in the third quarter. 5.1 new -- 5.1 million new users subscribed. now for a look at what is coming out. you are watching china data coming through. >> how do these top two tier cities compare? there is a little confusion here. we had home sale values come out yesterday.

we saw property values rising from january to june, 13.2%. that comee on top of very us articles one suggesting the slowdown taking place in the chinese market and another saying that it is going great guns. it makes no sense. we will break down some of these numbers and get the implications. and there are property developers also. yvonne: that is it from us here at "bloomberg daybreak: asia." ramy: standby for bloomberg markets. 0.25%.arkets are up this is bloomberg. ♪

start for the emerging markets trading. netflix is one of the big losers. the international monetary fund thelackrock morning about dangers of paris trying to defend the global free trade rules. this is bloomberg markets.