>> big tech sounds a retreat as investments show sign of exhaustion. nasdaq approaching its biggest three-day loss since march. >> net flex led the way heas famed mega sats tumbled almost 3%. the group has lost 9% since facebook reported. >> global bond views rising as markets await the bank of japan. there's still speculation policymakers will adjust their anguage.

join and west -- rose today. exas sidney. m haidi in i'm ramy, we'll look at how the market wills play to into your trading day. the word is exhaustion when you look at the market the nasdaq down more than 1%, 1.4% because this is still something that investors condition get -- can't get out of. the sentiment here still negative three days after facebook report and twitter reported, both falling on the order of 20%. will apple try to turn the tide when it are reports? some investors are honing for that. let's flip up the board and show

you what's happening with currencies an commodities. the dollar down two days in a row that has a knock-on effect on the bloomberg commodity index. that's the highest in three weeks for new york crude as well as brent crude. they had both been up positive. but new york crude catching, going a little lower there, but still above the $78 a barrel, haidi. haidi: seeing some of these, tillwinds coming through, let's take a look at how we're shaping up in asia. most asia stocks going lower going into the open in this part of the world. there's technical difficulties, shall we call them, in the u.s. not providing a strong lead here. kiwi dollar 68.25. as you mentioned we had the u.s. dollar falling against every g-10 peer as we see selling of

dollar longs going on as well as concerns about trade issues. that is also looking to have an effect on the 74 cent level we're seing for the aussie dollar, that's also way down with a continued flood in the yen as well. we're on bank of japan watch, just one story here in asia. dollar holding at 1.11, very much primed the yen that is to gain on any sort of tweaking we see in the language. they're going to have to be care nfl commune keags. nikkei up about .1%. the nikkei 25 closing off by about .7%. on these concerns or expectations of the tokyo whale or bank of japan. in other words, may be reducing buying of a.t.s. tracking. the nikkei in fare of diversifying. some i.p.o. news coming through,

the first biotech company to take vng they have hong kong listing rules, saying it has raised 2.8 billion dollars in its hong kong i.p.o. saying that the retail portion is 9.1 times subscribed. trading set to begin on august 1. 2.98 billion hong kong dollars for how much has been raised. we know that tech swoon, the swoon we seen in hong kong hasn't been favorable for some of the big, hot listings that have come online this year. ramy: that's truly clear and evident over the past three days. let's get more on this as it continue into the new week. more analysts are saying it may be time to short those much-loved, at least until now, fang stocks. has the fang trade run its course? >> it looks like it's starting to. wilson get a lot of credit in

this at morgan stanley he said folks need to be more defensive about tech stocks, rotate out of them them. bank of america much stronger. he nyse fang index down almost 3%. dropped about 9% since the facebook earnings and all those big names getting sold off. there's been a change in sentiment, not only the faang name, the broader nasdaq composite getting hit. about $462 billion taken off that index over the past three days. this has given you an idea that investors are starting to wovender has this peaked and sit time to just move on to omething else? ramy: the upside, caterpillar, people are optimistic, bullish but people are saying not so fast.

>> a year ago they talked about the high water mark. this year they posted 297, the high water mark moved up and you saw the stock rallied at the open but faded as we got in later to the day, that was primarily the cost of the tariffs. they were saying $100 billion to $200 billion primarily tied to rising steel prices and that basically took the wind not only out of caterpillar but a lot of their competitors as well. still a lot of concern here about how the tariffs are going to affect these companies. haidi: over the past few days it sounds glamorous, a tiny waste management company, what's going on in terms of its runup, has the company said anything about it? >> avalon holding has take then internet by storm. this company had less than a $10 million market cap a week ago. then started mysteriously

rising, topping out at over $20 a share after averaging about $2 a share over the past year. basically, a company in the bahamas named mint broker took a $1.92 million share stake, that's about 50% of the company. now we haven't heard from that company, avalon did come out with a statement late on monday saying it has no idea who this investor is and that the company hasn't made any material changes to its business that would warrant this type of runup. but for right now the shares still trading hager. they've dropped back late bit, back to $6 a share. for a company that was trading at about $2 a share a week ago, quite the pop far company that most people probably never heard f. haidi: curiouser and curiouser. thank you so much. let's get you caught up with the first news, jessica? jess camplet the man who

popularized the term "new norm aling" says the u.s. is the rst couldn't to slug off the post-recession malaise. he said the u.s. is alone in finding growth moment up of 2.5% to 3%. they coined the term to describe their outlook for meek expansion and more regulation. >> we have gone from a notion that we had a synchronized global pickup in growths to it's all about different growth patterns around the world. i think that's where we are. that trade, long and short tech, makes sense over a very long term. but i'd be careful how much you do up front. jess camplet president trump says he'd be willing to meet iran with no preconditions. that's in much the same way he surprised the world with his decision to talk to north korea. he said when dealing with critical issues there's nothing

wrong with meeting. one possible opportunity would be at the annual u.n. general assembly in late september which president rouhani usually attends. >> if they want to meet, i'll meet. it's good for the country, good for them, good for us, good for the world. no preconditions. if they want to meet, i'll meet. jessica: the cryptocurrency focused merchant bank makes its long-delayed trading debut in toronto. the founder wants to list in hong kong, frankfurt and london as well. galaxy digital will trade virtual currencies, invest in related companies and act as a merchant bank for cryptocurrency communities. >> it's frustrating that the equity markets are soft and the crip toe markets are softer. the job is stunningly exciting. the banking markets we're looking at, the companies we're talking to, are doing

things. bly creative >> galaxy digital founder mike novembratz there bloomberg news ns and operates the crypto index. soft base vision fund is said to have ended talks to invest in cadre a real estate tech startup partly owned by jared kushner. president trump's son-in-law started the company with his brother and harvard classmate and kept his stake despite shedding other asset whence he became the white house advisor. his role as a government figure and a beneficiary of any deal with soft bank pose conflicts of interest. global news, 24 hours a day, on air and atticing to be on twitter powered by more than 2,700 journalists andage sirks i'm jessica somers, this is bloomberg. haidi: thanks for that the bank of japan wraps up a two-day

meeting on tuesday with speculation that a small but significant tweak to policy may be in the works. kathleen joins us now from outside the central bank in tokyo. not long now but why would governor kuroda want to make any change at this point? >> well, it's -- we're certainly glad, of course that this story has surfaced about a week and a half ago, bloomberg, nikkei and others here in tokyo picking up intelligence, whatever you want to call it, reporting that there's discussion at the b.o.j. about tow ho change the way they're dealing with yield surf control policy. as hot as it is here, the speculation around this question is hot in japanese markets and markets around the world. in fact, the speculation is so strong, it norse bank of japan to do three sixth rate operations already this month to buy bonds to prevent traders from pushing that -- pushing that yield from close to just zero to 0.1%, even a little

higher. so why would they do this now? many people say it's premature. inflation is running for below target. the fiscal year 2018 forecast is 1.3%, it had got ton 1%, it's back down to .8%. it's going to keep monetary stimliss more stim laid for longer, rates lower for longer, maybe you need to adjust the yield curve control accordingly. also it's becoming clearer and clearer that yield curve control is hurting commercial banks in japan, particularly regional banks. another reason to look and maybe make small adjustments. bond purchases have started that number. this will be another way to sort of finesse that, make it more consistent with what they're doing. the easy call right now is for them to adjust their e.t.f. purchases away from e.t.f.'s weighted toward nikkei stocks, waited more toward the topics. there's some distortions there as well. interesting conversation we had yesterday with the former vice

minister for international affairs at the ministry of finance, well known for his currency market expertise and certainly his monetary policy expertise as well. when i asked him this question he said, well, there's no reason for the b.o.j. to change policy now. of course they do have to make their policy sustainable over the long run for all the reasons i just listened he said he doesn't see any policy for the change but maybe a technical change making it clear that keeping the 10-year more of a range. let's listen to what he told us. >> expand both sides, which means to make market increase market growth to find ppropriate deep. >> if this is what happens, how will the markets take it? that's what's at stake. people are concerned that maybe

the yen could strengthen against the dollar, that's exactly what governor kuroda doesn't want to see. hurts exports potentially. then global, you can't make -- the yield can't go much above where the b.o.j. is anchoring it but global bond yields could rise. that's another thing we're waiting for after we get this very important decision later today. ramy: exciting stuff, looking forward to that. kathleen hayes from tokyo. coming up now, trade tensions about too enter a new phase with the public comment period for further tariffs on chinese goods ending tuesday. keerp institution senior fellow johncock ran joins us late they are hour. haidi: up next, market strategy at a time of military tightening. evan lucas talks to us about the opportunities and risks as central banks turn hawkish. this is bloomberg. ♪

ramy: welcome back, i'm ramy inocencio in new york. haidi: and i'm haidi in sidney. the bank concluded its meeting on tuesday there were talks about massive monetary stimulus programs a lot of economists saying even talk of an adjustment is premature. we're joined by chief market strategist evan lucas from melbourne. great to have you, evan sit premature to start talking particularly as we get this kind of jolting effect of central banks plarkly here in asia, trying to balance, to react to some of these trade war tensions. trying to react in spots of inflation here and there the bank of japan mandated very clear, they're nowhere near that 2% inflation target.

>> exactly. it's k that's the way going to go. we are getting spots of inflation that is actually showing sustained signs, it's actually happening in the u.s., not happening unfortunately in the asian region and you're right, japan is so far away. they've had that 2% mandate for going on five and a bit greers and they haven't got within touching distance, let alone distance to give them the ascension to move toward either unwinding their program or even touching rights and looking at what most people say, i'm in agreement. the only thing they'll do is tweak it and that word needs to be highlighted. tweaking means it's working at the margins. it's not going to see any material change overall. their e.t.f. is clearly the easiest way to move it. yes, they'll move away from being a fairly large support that's been going into the nikkei, probably more toward topix numbers but their bond curve? a loop in my view. the inability to actually affect

material structural change would create quite volatility and take a very long time, it would require communication for a while and before action even happened. so i think it might be atele -- a little less of an event that's been forecast. despite the rumor and innuendo, i suspect they'll sit on their hands and probably the contrary trait. whatever they say, whatever they say i think is going to see a reaction anyway. and that therefore i'm actually move twargd a listening position in the end anyway because i think the market is just looking for any opportunity to go risk off. any suggestion of even changing the current strategy, even with those tweaks i alluded to, is going to create a pop. that's why at the moment i think the jen is an interesting one to the upside. haidi: it looks like it's trying to move as a slight side of the change. in terms of that synchronized move, the global bond yields, do you think that's a sign that

maybe the markets have front run or do you expect to see that reaction continue if they do, as you say, tweak around the edges? -- edges after today's meeting and does that result in the repatriation of funds we've been expecting? >> i think it's the former. i think that's -- i think the market is fully aware that the speculation is probably being deliberately put out there. the communication here is absolutely key and forewarn, allowing markets to slightly start pricing all this in is part of what's likely to happen. i think that there will be less of a move today than probably what's been run into markets so there might be a dropoff over the next couple of days. overall i think that's more the -- i think the more interesting thing in global markets at the moment is the pressure that was going in the two and 1-year is started to exhaust. the 10-year is starting to move to writ should be that is

releasing this idea that rates are going to be higher we know why they've moved down. geopolitical risk and general risk off momentum kept it below that 3% level and the two-year bond moved up absolutely correctly considering we know the fed son a six rate hike circle over the next eight months. that i think is more of an interesting one. the u.s. markets have finally relaxing from risk off and loy -- allowing their overall markets that do intend to move naturally the way they should be which is following the fed and move up. the macroeconomy in the u.s. is fantastically strong and i think you're going to get that reaffirmed on friday with the payrolls and some of the metrics as strong as the pensions. ramy: with that said of course we've been seing the nasdaq down three for three. with what's been happening with the rally in bank stocks, the only other letter we're waiting for is apple out, what, tomorrow? so in terms of the -- in terms

of what's there, it looks like this is headed one way. what are your thoughts? >> if you look at where we are, if you want to look at the initial reaction. so facebook, netflix were, you know, absolutely continuing to fall. amazon was good but has fallen off it, alphabet was fantastically strong, they were alluding to the revenue side. aple is probably the most stable out of all of them, it's a question of how iphone styles go into asia. i think taking them all as a whole, the caveat with all of them and i think everybody has been saying this, it's not hard to sort of figure it out is multiples. if you strip out the faangs and look at the overall u.s. earning season, it's fantastically strong. we're looking around 30% 2035% e.p.s. growth. put the faangs back in, drops to 25%. that's still brilliantly upside.

i think what happened is the growth stops outside of faangs. look at things like commodity plays, look at industrial that was very much exposed to growth markets. they're the ones showing the retrospective numbers you should expect. i try and stay away from faangs, they are such a big factor on mark, that's clear, but the underlying outside of those five is quite good and longer term i'm probably more bullish than i was three months ago. i think 2019 might be better than it was expected to be. ramy: so some folks have been started to say this could be a term for the defenses but you're thinking this is a buying opportunity. >> i do. i let markets define -- picking the top is always fun to do but if you look at where the bearish goals have been made over the years, they've been wrong every time. i don't allow that to happen. i think this jut look statement has been slightly more positive

than has been forecast. a lot of people have been alluding to whether or not you -- whether or not you hear talk about the tariffs. only around 10 to 15% of companies reported. it is only halfway through. have alluded to them. i think u.s. firms are seeing decent upside. take away copper if you look at commodity markets as a whole, they're pret tri-ty strong. got energy that's tick up. we know there has been issued up in canada and what could happen dun in cushing with regards to oil, that explains why w.t.i. is on a tear. energy is up. we know that there's definitely supply issue. i'm still on growth that's why i think it should be there. >> evan, i always appreciate your -- haidi: evan, always appreciate your insight. coming to us from the sunny melbourne. remember bloomberg users can interact. you can chat with those featured on bloomberg tv. this is bloomberg.

♪

>> president trump continues to troll him on twitter -- >> this new threat to fed in dependence.

ramy: you're watching "day break: australia." let's do a choveg the latest headlines. petrochina expects profits to double to its high nest three years due to rising oil prices. they say it probably jumps between 107% and 122% from a year ago. that puts profit at roughly $4 billion which bloomberg calculations say would be the highest semiannual result since the second half of 2014. idi: first quarter profits gained, net income slipped the equivalent of $167 million for the three months through june. revenue rose when they announced

a new ban. the stock markets stagnates. next, apple's x factor, investors will be looking closely at the new smart phone. ♪ retail.

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haidi: it's 8:30 a.m. here in sydney, markets open in just 90 minutes time. these tech difficulties overnight, the nasdaq fall, the three-day loss, down about 10%. looking pretty muted heading nto the asian trading session. ramy: i'm ramy in new york, it's 6:30 p.m. and you're watching "daybreak australia." let's get the first news with jessica somers. jess camplet government borrowing in the second half will jump to the most since the

financial crisis as the neigh's fiscal health worsens despite a strengthening economy. it expects to issue $390 billion in marketable debt from july to september they feel fourth highest total for that period on record. higher than what was estimated in trill. -- in april. wilbur ross says go are going well and may be close to wrapping up. the president wasted in time in appointing a new trade team. president trump admitted he may pursue a bilateral deal with exico before separate gos with canada. cbs' les moon vest will remain as c.e.o. for the time being as outside counsel investigates allegations of sexual

harassment. several women said they were sexually intimidated and their career suffered when they refiesed advances from moonves. they describe a culture of harassment at cbs. the owner of nyse is said to have fired a dozen employees after acquiring the exchange. c.e.o. john karen is among those who left. the exchange tried to sell itself to a group of investors but that deal was reject the exchange handles less than 1% of u.s. equity trading. global news, 24 hours a day, on air and on ticktock on twitter powered by more than 2,700 journalists and analysts in more than 120 countries. i'm jessica somers, bloomberg. haidi: thanks for that. let's get you an update on the markets as asia wakes up to b.o.j. decision day. this is how we're faring so far. pretty lackluster session trade, just about .1% lower in the new

zealand session session. sydney also looking flat going into the open there the aussiee dollar holding wembing the dee de-cline in the u.s. dollar, low against every g-10 there as we get some month end rebalancing taking effect there. it is all about the bank of japan today as we watch to see the yen that looks primed to any news about a tweak around the edges to japanese policy. here's what you should be watching as trading gets under way any news in asia. the same stocks that trade get long in the tooth? >> it's been quite dramatic, about 10% in the space of three days. the interesting thing is that it's seen as likely tone courage a rotation with -- from growth into value from tech and industrials and that's the sort of rotation that's already been

started in asia. and the pboc, what it's doing, is also an invitation to do exactly this so if you take a look, we've got a chart on the -- in the gtv library we can show you that demonstrate house asia had a very bad beginning of the year when the faangs shook off that february, for them, february was a hiccup. for asia it was a case of avian flu perhaps. but now, we've got asia picking up even before the faangs came off. we had some weakness in some of the big tech-oriented companies here. i think that was encouraging those people who were still looking to keep their money or to come in and look for bargains. precisely if you were thinking that china was going to ease, and there was some talk that it would, and then it did, sure enough, old economy was the way to play that so that's why

although asia has been, hasn't been ex-static with what's been going on with the faangs, the follow-on here hasn't been quite as dramatic as might have been expected. ramy: interesting. one other thing we're looking at here is the b.o.j. set to announce the latest spoil decision on tuesday. for the first time in a long time, there's some real buzz leading into this meeting. what's causing that and how are markets likely to react once that statement is out? >> it's all about going back, i think, friday before last there was talk the b.o.j. was going to look at tweaking policy. that was a bolt from the blue as far as the japanese bond market was concerned because everybody knew that second half of 2018 was when the b.o.j. was expected to start the run -- to run into some serious constraints in how

many bonds it could buy. there was always that nagging thought in the back of people's heads that the b.o.j. has to move. just didn't think it was going this early. so that had b.o.j. strog step in in the space of a week to whack the 10-year yield back down with unlimited buying operations, that's created, there's obviously this thought that the b.o.j. is going to do something. that matters a lot for the world and also for especially for japanese markets if you want to look at a chart we've got prepared in the g.t.v. archives this shows the growth in yen terms of the b.o.j.'s balance sheet, that's because it's been buying mostly japanese government bonds but also a little bit on top there. it's one of the biggest shareholders through that already. you can see how that has actually in the end is now outpacing the growth in the value of the japanese stock

market. it's been tracking together, japanese markets coming off. that's dilemma for the bank of japan. it needs to get out of what it's doing but will the market be able to cope with that? will the stock market end up taking a bath? >> critics have been saying that the b.o.j. has been distorting those markets, they don't want to rip the band-aid off but we'll see what happened in the next few hours. garrfield reynolds, bloomberg markets live strategist. don't forget to check our gtv library for some of those charts, gtvgo.com. secretary pompeo took a hit at china. let's go to washington and our

congress editor. mr. pompeo signaled the trump administration wants to re-engage with asia but steadfastly without the f.p.p. what's the plan here? >> right, well. secretary pompeo is trying to reassure some of the doubts that were -- about nations who had some doubts after trump pulled out of the t.p.p. and doing so that he said that with the u.s. contrasting with china, trading partners could expect honest contracts, transparency, and he portrayed china as fostering smog of a dependency culture nits trade through loans for infrastructure projects, other commitments and something that he called off the books nonsense. so the u.s. wants to re-engage with asia but wants to do so on a case-by-case basis in bilateral deals with individual countries. the message there is that the sust going to be a much better

partner for them than china. whether or not that can be pulled off since the other 11 nations in the t.p.p. have already signed on to continue on with that agreement remains to be seen but the sust a major trading partner for the region. ramy: looking across to the other side of the coast, the atlantic. italy's prime minister seems to be donald trump's new best friend in europe. what do both sides get out of this budding relationship here? >> the prime minister seems to want to replace french president mack ron as the trump whisperer for the e.u. wants to be the facilitator between the u.s. and e.u. there are -- they are kindred spirits in terms of their approach to imgrarkse the populist nature of kconti's government, there are some issue he is has internally within the e.u., particularly over libya, security of the mediterranean, he'd like the u.s. side on.

now the u.s., from the u.s. end, they want to negotiate now some sort of trade agreement with the e.u. there may be some friction there, though, nonetheless, because italy may not be ready to give up some of the agricultural barriers protections for their farmers. trump -- ♪ haidi: we're getting a glimpts of the prosecution's case against paul manafort. what are we seing? >> there's the court case now is moving into what sort of things will be allowed in and the prosecution has presented some of the exhibits that it wants to bring to trial, which would show that manafort in his work before ukraine got something like $60

million over a decade from various ukrainian oligarches and that hundred was often funneled through bank accounts in cyprus and this is an attempt to show the money laundering charge and is to supplement the witnesses that the prosecution intends to bring up. they say that these documents, emails, including some photographs, will supplement and back up what witnesses will be telling the jury. the manafort defense right now says that they're -- they want to block that. these are prejudicial. so there's the continuing court battle there. haidi: joe, thank you so much. our bloomberg congress editor there in washington with the latest. this russia to -- this rush to exit u.s. tech stocks con forward third day with nearly $300 billion shared over concerns about rising rates and slowing growth. now investors turn their attention to apple's results out

on tuesday after market close. let's talk to mark, what's on your radar? what are investors wanting to see in these earnings? >> there's two main things. they want to see if executives will give co-throrne china-u.s. trade war with tariffs on both sides. they want to see if there's any hint of when the new iphones will be released. we'll get those hints based on the guidance apple will be giving. some investors and analysts are looking for guidance about $59 billion for the fourth quarter, significant year-over-year growth for apple so those are the two big ones. haidi: is the growth -- clearly they're going to be looking at sales of the iphone x but what about the services component as well? are we seing a shifting in terms of where growth is coming from? >> we're sort of seeing growth

slowing down considerably on the iphone side. some predict growth will be between 0% and 5% for the next five to 10 years which isn't terrible but it's not the growth numbers that investors and analysts have become used to seeing without the products over sincest two decades since he return. the app store, apple music and siri expected to be 25% to 30% growth that one a significant new area for them. ramy: do you think we'll get any detail regarding the stock buyback program they announced earlier this year? $100 billion? >> it's possible they give an update, but they usually cey those for q2, the march quarter, but i wouldn't rule out the possibility of some commentary on that ramy: great stuff. thanks very much. mark german in san francisco as we head toward apple's most

recent result. coming up, crazy like a fox or just plain crazy? that's what hoover institution senior fellow johncock ran wants to know about trump's trade policies. he joins us next. this is bloomberg. ♪

aidi: i'm haidi in sydney. ramy: and i'm ramy in new york. trade tensions may have eased slightly after the u.s. and e.u. announced a cease fire. major car producers including the e.u. plan to be in geneva to discuss a response to trump's tariff threat on auto imports. hoover institution senior fellow johncock ran joins us from stanford, california. now, john, i just have to start with this. interesting line you have in your latest blog post about

donald trump about the trade war. crazy like a fox or just plaven crazy? what's your answer? >> i'm not here to judge the president's character. the question is, is the trade war all in service of a world completely free trade, that would be lovely or sit in service of just high tariffs around the world and lots of protectionism. that's the thing i'm more worried about. ramy: one interesting thing that secretary of state mike pompeo just said earlier today before he goes to asean is what is going on with china, knocking china, saying the u.s. is the best partner. this is still with the knowledge, of course, that donlt trump pulled the u.s. out of the t.p.p. what's going on here with trying to strategize or posture the u.s.? >> i think there is a legitimate

idea, we're going to try to encourage china to behave more like other countries, especially regarding the treatment of intellectual property. it's a little unseemly, like the captain of the football team complaining a 6th grader took his lunch money because we are much richer than china and then the question of whether the stat injury goes about it or leaves with us mutual tariffs and retaliation and everybody feeling bad about each other and really our big hurt to global rade in a recession. hoich the well-known investor we talked to yesterday shared your view, he said the president is dumb like a fox and that negotiations are happening all the time and you're just starting to see the binning -- beginning of that with the detent with the u.s. and e.u. trade talks. i guess my question is, is the fight with china different? is this an ideological objection that washington has? >> the question is, what is the goal? what are we trying to get at

here? are we trying to get at a world of completely free trade , in goods and services that would be wonderful. wever heard some noise about that. is the goal to eliminate the u.s. trade deficit without the u.s. starting to save money or our federal deficit? that's not going to happen. is the goal to protect dying industries and bring back steel jobs? that's not going to happen either. if you're going to start any war it's a fwad idea to know what the goal is of this war. i think it's quite unclear what the u.s. wants which is why the whole world is scratching its head right now. haidi: it's clear that they want, i think every trading nation, wants a bigger slice of the trade pie. but i guess the payoff of that, or the result of that, a smaller pie to share around? >> if we way we get to a bigger shice of the pie is lots of tariffs, the pie goes down. if we understand that, if i buy something from you, you'll turn

around with those dollars you'll buy something back from me, the pie grows. it doesn't necessarily grow in politically favored industries. ramy: john, we're one day away from what could be the end of discussion for what's happening with china. those extra $16 billion in chinese imports. do you think you've heard enough in terms of public pushback in commentary that this might not happen or will it go ahead? >> what are you talking about that might or might not happen? ramy: the $16 billion more tariffs that the sust thinking about putting on china? >> let's hope it doesn't happen. you want forecasts of what's going to happen ahead of time with the trump administration? they're good at surprising us and making it entertaining. i hope it doesn't happen. tariffs, once put on, are very difficult to take you have. you can say, we're just doing this we're going to put tariffs on steel and then when they give up, then we'll take off the tariffs on steel but the steel

industry is going to scream bloody murder about that ramy: republicans in congress have been thinking about, or some of them have been trying to tie the president's hands. doesn't seem to have happened just yet but is this something you're in favor of? >> absolutely. tariffs are attacks. in the united states the president cannot unilaterally put taxes on anyone, except for on trade, where congress after the smooth hally disaster gave the president the president the power to put tariffs on. ey wanted to sound tough and thought no one would do it, but now we have a president who is doing it. congress needs to step up and take back its authority to tax which is what tariffs are. haidi: i'm curious is the -- if the assumption is that the tariffs of $34 billion back and forth with china, perhaps more

if the situation worsens, stay in place, the result being, you know, shorter term price crashing and longer term stagflation, does the sfred the policy tools to deal with that? to respond to that? >> absolutely not. the dangerous stagflation, prices going up but output going down, unemployment going up, that's a situation that monetary policy is poorly adapted to deal with. the situation is basically you cut off your arm in spite and then want a cappuccino to stimulate to make you feel better. that's not a good policy combination. haidi: and then you add the nevittability of a continued strong u.s. dollar if we end up in this trade crisis and the reaction of central banks and eamericaning markets in asia. where does that leave the fed? what's the best thing they could do right now to, i guess -- to deal with the uncertainties? >> you're exactly right. what happens if you put in a lot of tariffs is the trade balance

is going to be the same no matter what. if you put in tariff the dollar strengthens until the other countries are sending us exactly as much as they did before. this is why going after trade receive did -- trade deficits is hopeless. this is not an issue central banks can do much about unless they go way outside their statutory authority. haidi: all right, great to have your views. hoover institute senior fellow johncock ran joining us, interesting set of views there as we continue to watch, some indication of developments in trade and that fleet of central bank decisions. let's get you in the meantime a choveg the latest business headlines. reports out of hong kong say conte pacific may cut jobs in its latest attempt to get back to profit. the carrier is discussing the consolidation of overseas sales, marketing freight and airport

operations. cathay has about 100,000 workers employed away from hong kong. ramy: goldman sachs says customer enthusiasm for tess la's model 3 may be waning the bank says key areas of second quarter results are the sustainability of model 3 production at 5,000 a week, mo ten rble for margin improvements and the amount of cash tess la is burning. and they expect a second quarter loss of $3 a share. haidi: they'll decide soon on a new plant in china as it pursues a goal of expanding sales there by 2022. the first step would be to add capacity in existing operations before any decision is made. in february, they had a plan to spend $9 billion to become the biggest global maker of electric cars in china. thank you for joining us on "day

break australia." yvonne will be up next request "day break asia." >> i think there's a big decision happening in a couple of hours. the b.o.j., we overheard kathleen hayes, the countdown to the big decision coming through. probably the most interesting one we've seen for some time for governor kuroda. we have the chief economist and former advisor joining us an joining kathleen from tokyo. interesting take on what he thinks the governor -- thinks governor kuroda can do today. the b.o.j. will have to tweak its control curve policy and widen the yield target to steepen the cush, and he says they've got to do this now and do it sooner rather than later before it leads to more deterioration an more distortion in the markets as well. we talk about the e.t.f. , he thinks that's going to lead to some reduction in the distortion of the stock market and if it

happens, the b.o.j. will reduce indirectly the purchase of some of these large market shares you've been talking about. in the meantime he has upgraded his forecast when the b.o.j. can raise interest rates. most people are think 20g20. still is the guide post there. but he says maybe january of next year. ramy: as early as that? that's one major story we're talking about. another one, the markets, the route we're seeing happening, we'll speak on that and gold market strategy, the faangs have fallen 3%, they're down nearly 10% since facebook reported last week which is really only just three days ago. the big question, sit time to get defensive or is this just a little bit of calm, con sol case -- consolidation and then an opportunity to buy sflst one key

risk that's going to be talking about. the inflation surge that's pushing yields higher. haidi. haidi: the shift from growth to value, it's a familiar refrain. a lot of people have gotten caught wrong footed shorting faangs before. also, on top of all that, it's a busy day. china's p.m.i. is coming thru as well. we'll see a little bit of moderation in the numbers. we'll be joined by julia to talk about the implications of that, the implications of the stimulus measures that have been unveiled by beijing on what it means for deleveraging. she said the fiscal deficit this time of year is smaller than what it should be. that's on track to be reversed that deleverage, the tightening effect starting to get loosering more spending out of beijing and sit time to rotate back to old economy stocks? lot oto -- a lot otalk about.

yvonne and ramy up next with "day break asia." this is bloomberg. ♪

>> it is 7:00 a.m. in hong kong and we are in bloomberg's asian headquarters. i am yvonne man. welcome to "daybreak asia." asian futures point to a weaker open after tech the retreat in new york. the nasdaq saw its biggest loss since march. netflix really leading the way as the mega cap stumbled 3%. the groups lost 9% since facebook reported. ra