>> stocks recovering from a second day of losses. >> tesla among the losers erasing all the gains from the going private tweet. haidi: it could be make or break for us trillion's energy fix. newleen: samsung launches a weapon in the mobile war. the samsung device entering a

crowded global market. we're 12 away from the -- two hours away from the opening of the market. kathleen: over the next three hours will be looking at how they are playing into the asia-pacific trading day. if investors are looking from a strong signal from the market they won't get it today. the last few minutes of trading sliding into small declines for the dow jones industrial average. littlewas flat with a green tent. the stock market -- what hit it at the end of the day was the bond market. yields, a lot of focus on the philippines after the largest rate hike in 10 years. the 50 basis point hike to fight off rising inflation. guess who we have coming up?

the head of the philippine central bank. at 11:00 a.m. sydney time. he signaled more rate hikes could be coming. haidi: fighting the war against inflation. looking ahead to the market open here in asia. trading in new zealand is just getting underway. you see the reaction when it comes to the kiwi dollar -- he gave up key support going back to the financial crisis. a little bit of positivity going into the open. a lot of concerns throughout the week and maybe the kiwi will drag down the aussie given the synergy between the economies. this is basically what happens when the u.s. directs its

aggressive trade or political policy toward you. year yield still close to 20%. seeing the russian ruble tumbling overnight and away we haven't since 2016. moscow threatening to retaliate for these new planned sanctions. we are continuing to watch the china story today. some suggesting that some of the closeism is playing very to start. some claiming his nationalist start has created a harder position. on the report that the tesla board is planning to meet next week. aboutke to advisors

finalizing the process to take the company private. what a roller coaster it has been. what is the latest? >> it was a crazy 48 hours. earlier bloomberg broke the story that they are looking not just at his tweet from tuesday but broader company stances. we are trying to find out who tesla will be working with. we have a new report from cnbc about the board moving forward and potentially meeting next week. there is a new wrinkle to this story every hour. the company has not issued any new statements. has been very quiet on twitter. there is a lot of information that people don't know. latests of his

development, his reaction from investors was pretty positive. >> there are two scenarios. has lined up financing for the deal of the century or he is bluffing. board ist that the moving forward is seen as a positive development. it seems like they are sorted ford of -- forward moving on that. any development like that would be seen as a step in the right direction. kathleen: as courtesy of the exchange commission you have to speak carefully as the head of a company. that is one rule elon musk does not follow well. what do you think is behind it or not behind it? >> the story today is that the ncc has -- they begun a justamentary look at night his tweet but other statements he has made.

tesla has been under a world of scrutiny because of the model three and the sale and production targets. like they are interested in more than just his tweet from tuesday. theounds like folks from san francisco enforcement division have been in contact with the company. >> you have been very busy since early today. thank you for joining us and covering tesla and bring it to our australia daybreak audience. the s&p and dow ended a second day in the red. nasdaq seeing its eighth straight gain. -- unchangedp in even though there was fluctuation throughout the day. $for bond is higher. look at the way we closed in terms of the nasdaq. thoughtilt lower even the nasdaq had a bit of again.

will atke a look if we some of the big movers. the size of the move is notable here. serviceaming of video really blowing it out. could climb to $.60 per share. report after the bell, people piling in ahead of fact. of drilling stocks and energy stocks moving lower. and really taking off. thrilled thatare shares our soaring. let's go to the bloomberg for a different story weighing on the market. u.s. trade policy uncertainty surges.

this is a 20 year high. you have to go back to 1994 to find a higher level of uncertainty about what is going on between the u.s. and other countries. >> oil and commodities. fleeing. are etf might back gold. what is going on? >> we assisted at the dollar is a big driver but this is being driven by a lot of other factors. oil is a concern. the china would match the u.s. caps on $60 billion -- tax on $60 billion of imports. latest list that has come out is just the fuel. we did to the price stabilize at a seven-week low. you are seeing investors flee the etf. a continued reflection that gold

is less favored. it has a lot to do with the rising interest rates. haidi: overstock.com is when you are looking at in terms of leading the pack. this is on news of a new investment. >> from a hong kong based private equity company. the size of the move is really something here. you can get a bigger picture of how they have done. they have been up as much as .wice 5% gsr capital signs an agreement of about $374.5 million. they will buy some of these key coins, about $30 million worth. going to dropbox, they did beat second-quarter earnings. the filesharing service has really beat on revenue.

the paid users increase. that is viewed as a positive report and then we go to lions gate. you the firstet word news with jenna heart. jenna: the trade war starting to affect american companies with supply chain exposure to china. they represent 200 companies doing business on the mainland. terrace have forced some of them to shift operations abroad with the eu being beneficiaries. north korea says washington cannot expect any progress toward civility while it keeps its outdated script. they called for tougher sanctions on pyongyang even after they halted their tests.

indonesia says the number of people killed by earthquakes has reached 319. the earthquake -- the island suffered three powerful tremors in less than a week. indonesia is prone to earthquakes because of its location in a specific ring of fire. 5.1 quake triggered a synonymy that killed 230,000 people in a dozen countries. the trump administration is calling on congress to advocate a billion dollars for extra security and space. the defense department has released a report outlining plans for defensive capabilities. the white house says the issue is becoming urgent. >> for many years, nations from russia and china have pursued weapons to jim, blind and

disable our navigation satellites. adversaries have been working to bring new weapons of war into space itself. >> global news 12 four hours a day howard by more than 2700 journalists and analysts in more than 127 countries. haidi: still ahead, parting ways . scott kennedy tells us how an escalating trade war could pull the u.s. and chinese economies apart. kathleen: up next, the take on the global -- on the global economy. this is bloomberg. ♪

haidi: we are counting down to

the opening trading session. they're looking like they're extending this rally which has been 10 year highs here in sydney. proudly speaking, we're looking at another mixed to weaker session at the opening of trade. kathleen: that is just what we have in the u.s., a little bit of weakness at the close. i am kathleen hays and you are in new york. brewing trade tensions are beginning to take their toll on u.s. company's forcing some to moves -- move productions elsewhere. but spring in kyle weinberg. mr. with a very broad question. personally estimates of what a full-blown trade war could do to the global economy. 1% for u.s.. can we even do that question mark >> i think it's possible.

we don't really have a precedent with terrorists at this level of integration of the global economy. global supply chains are much more mixed up in the 1930's. all we need to know is it is bad. however bet it is it will cause the reallocation of resources. >> we know it has been banned for the chinese currency. it's interesting when you can contrast the united states. i have seen so much written and are about chinese, the pboc letting the bad currency weaken on purpose. i would say fundamentals are pushing the currency down. who's hand is at play here. >> if we look year-over-year, the one is in the same place where it was a year ago. they don't care at the dollar

anymore. they are well within the established trading arrangement. short-term weakness but it is not a crush of the yuan. factor atreally a all. are they letting it slide. it is possible that they also have a long-term interest. they want to promote the yuan as a stable currency. there were to be the next global currency that people pay for. they don't have an interest in letting this go there he far. to pull up a chart as we talk about an interesting point you made today. we start with the chinese puzzle and you are taking issue with the portrayal of chinese exports. you say if you look at them in their own currency they are not falling apart but they are not as strong as if you're looking at the dollar value.

can but if you look at total global exports the three-month moving average and that is down about 1% year on year increase. main june-julye averages down to 1% year on year. along with everyone else we are seeing china is it exports slow. that is a problem because experts do support their economy and their production. it's a negative even before we get to the impact of the tariffs . can but that begs the question. it's not iteris but a slowdown in the global economy. in the sense that china has more to lose than the u.s.. they can say we are going to take the pain, but they really are going to have the pain.

>> i'm not sure how strong the pain it will be on china. the stick this in two parts. the tariffs that china imposed on goods coming from the u.s. are primary commodities, low down the chain of production. is stuff that the u.s. sourcing is stuff we have no alternative source. americans will have to pay more for products coming from china because they cannot pay -- by a swiss-made ipad but all soybean purchasers from american farmers were canceled because there are plenty of soybeans in the world that don't have a tariff. we are also talking in high-frequency. howre thinking about companies do business in china. how much of china's commerce is done in the free trade zone.

the area where goods come into china but never enter china. they are not subject to the domestic tax and go back out the door. the question we have for lawyers, are they terrorist as goods from china or because they never entered china are they free from tariffs at all? bigonn is essentially one free trade zone. specific to be companies depending it with their free trade zones are. this is research in progress but we are working on it. haidi: is the pain also that they are not limited to china but the entire global economic supply chain? make a stretch to come up with products along the supply chain that will be impacted by all of this and we

don't know what will happen next. the issue on the trade thing is every but he says that china does not have enough imports iteris with the u.s. of the u.s. will beat them up, what about to trade. barriers for example boycotts of american products. sourcing goods away from the united states. putting up barriers to goods that do come to the united states. the whole flow gets cut off because chinese cubbies cannot buy them. this is at all points of the supply chain not just the final end. haidi: doesn't it muddy the policy, wemonetary such early evan saying they may need to raise rates to restrictive levels to combat the effective stimulus. policyalso need to tweak

to combat the longer-term stagflationary impact? >> that is a good question because we don't know the answer. american consumers, will they have to belly up and pay the extra tariff? if they do, goods are not just a piece of it. and goods from china while insignificant they're not dominant. see some impact, but right now we are not even factoring in or changing the forecast based on this tariff skirmish, i will call it, based on where we are now. haidi: we're looking at a japanese gdp later on today. we have some unusual tweaking from the bank of japan. given that it is part of this trade spat, negotiations are

underway to sort out a trade agreement. is that economy on track given the enormous amount of monetary policy being brought up? >> the economy itself is on track for implosion. the population is declining and everything i have learned a lot economics, you take people out of the pin factory you have fewer customers and you make fewer and the economy gets slower. monetary policy has no way to address this. backpack to the tweak that the bank of japan did last week, i can't figure out what they did. they said we want to have a higher range for bonds and they bullied bonds to the middle range and then they made bonds again. there policynce meeting has been that the supply of bonds is the same. if the supply is the same than the price will move much either. aggressive is a

won't call it a tapering but a backing away from qe. we know they are buying only half as much as they promised to buy. -- last 12 month run it was 30 trillion yen instead of ¥80 trillion. haidi: great to have you on with us. you can get a roundup of the stories that you need to know to get your friday going. bloomberg subscribers can go to gtv on your terminal. you can customize those settings they just get the news on the industries and assets that you care about.

kathleen: time for a quick check

of bloomberg business flash headlines. the firm will purchase 51% of radisson hotels. they are selling them as part of a global offloading of assets. the sale ads more than $17 billion in divestment that they have made in terms of lowering its debt. haidi: spotify is teaming up with samsung to take the battle to apple music. it will be available with the purchase of new samsung phones. spot will also be integrated into the new samsung smart tv's and speakers. this is their biggest intraday gain in two weeks. >> deutsche bank continues to some formerd now -- employees say severance pay was less generous than in the past.

told -- coming up, australia government struggles to find a plan to tackle the energy crisis. this is bloomberg. ♪ retail.

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haidi: it is 8:30 a.m. here in sydney. markets open in 30 minutes time. there is a 10 year high where markets are sitting at here in sydney. a beautiful friday morning with the opera house just shy of 10 degrees. i am kathleen hays in new york where it is still very warm. you are watching daybreak, australia. tesla slumped erasing all the aboutfrom musk's tweet tesla going private. below thesed well

$420 that musk said would be the price offered to stockholders. musk has offered no evidence to back up his tweak nor has anyone indicated they are behind the plans. >> but if something would happen with you on or not we wouldn't comment in any way. on there is a deal going there is a chance we will be informal and part of the conversation. plunging asis relations between turkey and the u.s. began to sour. thates in washington said turkey was refusing to release a detained american pastor. the trump administration has sanctioned two turkish ministers. suzuki and yamaha led -- after revelations about inadequate fuel economy and emissions test.

vehicles emissions were not properly examined. japan's the petition for manufacturing quality has taken a beating after nissan and subaru admitted improper testing. >> the tests were carried out by inspectors. we realize the poverty of the system is the problem with the company as a whole. somee political team says sensitive topics would be out of bounds with any interview with special counsel robert mueller. rudy giuliani says that the he will askthinks him about comey no matter what the president might say.

ism jenna dagenhart, this bloomberg. haidi: its get you a quick update on the markets. pretty flat picture as you can see. the kiwi dollar holding on to those losses. we could get more losses to come after falling 2% in the wake of that dovish tilt. looking to build on that decade high for that market. let's get more on what you will be watching as training gets underway. adam haigh is here with us. stocks stills. within striking distance. recordou say you are at highs. you're talking about some real

serious gains. getting to the end of the year is less than five months away. what these bullish strategists are talking about is an increase in the magnitude from here, 10%-plus gains from here. tony dwyer expects about 12% from here. the s&p getting to about 2200. that is the green line. look a much higher that is then the street average. is,mately what the thesis the fact that the economy continues to expand. the fed continues to tie up policy but not too much. he has an increasing earnings and environment that gets better and better. people are talking about peak

earnings. whether or not we have reached the ultimate and what we will get during this cycle. it is now about that growth rate. we are still going to get earnings expanding very well. that is the key to this bullish thesis. kathleen: it has been a bit of a topsy-turvy week to say the least. why is one notable tech etf still hemorrhaging cash? has been abserve it tough week for chinese assets. has been a tough few months. the local market on the mainland in china his well and truly bear market. we are series fits and starts where equity have tried to rally off the lows we have had one or two -- one or two days of gains. speaking butish

not in the outflows. we had this china internet fund. it speaks largely to the fact that people have been selling down on a lot of the winners of recent years. a big component here is tencent and the likes of alibaba have been under pressure as well. broadly speaking, etf outflows have not been significant in the chinese equities space. the have been key is in some of these internet names. the question becomes in china around capital outflows, we are starting to see some numbers beund whether that will larger or not given what policymakers have been doing, given the weakness in the currency. withtf outflows coupled readings that will start to get through now will hopefully give

us an indication of what is likely coming next. kathleen: don't forget to check out our library for some of the charts. on to prime minister malcolm turnbull trying to persuade australia's territories to support the national energy guaranteed. it promises cheaper and more reliable power well reducing carbon emissions. but skidmore from jason scott. what is this meeting today about? >> the energy minister josh freiberg will be meeting with the states and territories to try to get them to agree to his national energy guarantee plan. tos plan is his own implement bipartisan policy that will ensure cleaner, more reliable and cheaper energy for australia.

the government wants the business and the community to decide what new baseline power comes online. australia it makes paris commitments to reduce emissions by 26% by 2030. malcolm turnbull says he is a gnostic about what new energy comes online as long as it meets the paris commitments. haidi: what is the premise are hoping to achieve with this? end a decadeng to of headlock that has really almost seized up parts of the national energy grid. aging coalening as plants have been mothballed and new bonobos have gone online energy solar and wind

has come back online. is problem with those things where the wind doesn't blow and the sun doesn't shine, the renewable energy does not work as efficiently and that has raised the risk for blackouts. he really wants to smooth out the problems in the international lecture city grid. renewables are better for the environment. haidi: isn't unlikely to be a positive outcome for the government? if not, what happens next? >> unknown really. it needs to win over some of states.bour party that's the opposition party. some of those have been stonewalling because they say that much more of much greater commitments to reduce emissions

are needed. there are a couple of states such as victoria and queensland who are saying they don't agree with this. there is quite a bit of negotiating to go and the prime minister needs a good result because voters want to see a good outcome from this and the prime minister still trails in opinion polls with an election less than a year away. jason scott coming to us there from -- to reduceruggle sales's of the flagship line. the galaxy note 9 will start it $1000. >> we are here at the barclays center in brooklyn new york for the samsung launch. today the company will launch three new products.

the new smart phone with a bigger screen is about a 6.5 inch screen with an updated wireless stylus that you can actually use. you can control presentations, take pictures remotely and draw on the screen. the next part is the new galaxy watch. they are taking on the apple watch in terms of harboring and monitoring functionality. the third thing announced as the galaxy home. it is a very loud speaker and competes directly with apple's home pod. it competes with amazon echo in terms of voice recognition. they are hoping these help rebound the consumer electronics division. samsung announced key new partnerships. there will be a 3 -- a three-day

exclusivity for the new fortnight. there will be a big new .artnership that spotify the spotify ceo spoke at the announcement today indicating a multiyear partnership between the technology giant and a streaming new service. apple has their new announcement. we are expecting new ipads, three new iphones and redesigned watches for them. haidi: -- kathleen: why the trade war made be here to stay. we have cif director scott kennedy joining us next. this is bloomberg.

kathleen: i am kathleen hays in new york. haidi: i am heidi in sydney. you are watching daybreak australia. our next guest says the rising

trade tensions are not going away anytime soon. we are joined by scott kennedy, the director of freeman china chair. one of the most interesting latest developments are these increasing reports of beijing that they are seeing domestic pressure that there are risks within the communist party. part of it has been criticism that because of being overly nationalistic you can say he managed to miss judge the u.s.. the think that is the case? >> there is definitely a lot of self reflection in china. wrong. everybody got it no one expected trump to go through with the tariffs. they thought he was a deal and he was looking to settle. some selfthere is reflection. people may be criticizing xi jinping but he is not in danger at all.

no one had a plan b. everyone else is as wrong as he is. there to figure out what to do next, but certainly china is in a moment right now where they are basically trying to figure what happened and what should we do next. what is the opportunity for a potential circuit breaker? within looking at the midterms as an opportunity for trump to be able to at least superficially come together with some sort of a deal. >> i think that is really unlikely. were discussedt just before i came on the air were all about how great the markets in the united states are doing. amongs approval rating republicans is about as high as ever. in china the economy isn't doing quite so well but they haven't pulled out many of the tools

they would need. the trump administration looks like they will continue. midterms are not a silly going to make it so it could stop him. i think you would see vetoes. i don't see any reason why the trump administration would want to stop given the way the economy and political trajectory seems to be pointing. kathleen: it is not surprising to me that the chinese got this wrong because so many u.s. administrations have all these talks about trade in the chinese will change and the chinese do what they want. trump.mes donald people call him protectionist but you could say he is using these tariffs to bust open protectionism. >> that was the thinking of a lot of folks. there were many in the

administration who argue that you have to be tough on china and others for them to bring down there their ears. patient diplomacy with china has not brought them down. on the other hand, it is not clear that everybody is on board with that plan. it may be that the president is just a protectionist and we are seeing the beginning of putting up walls that are not temporary but may be permanent. president isn't doing this just against china. he is not giving the chinese any list of demands and it doesn't look like the u.s. is running to the table waiting for the chinese. it's hard to say with the american motives are here in that context you want to the chinese waiting either. they don't trust administration because they thought they had a deal and didn't get one. >> will we be able to glean anything from the japan u.s. trade talks, starting today,

continuing tomorrow in terms of things moving ahead and we say, the trump team figures out you don't want to bash your allies for put firepower on china, or nothing gets done and the policy makes less sense than ever? >> in those conversations what you want to be looking for, to see if your hypothesis is right is, does the trump administration offer any exemptions to japan for steel and aluminum. in exchange for really moving forward with talks for bilateral agreement. like that some deal you can see the administration's move recently with the eu to put aside potential auto tariffs is being replicated in the deal with japan. that would look like they are actually looking at how it is important in facing off against the larger problem which would

be china. tpp remains?f the 11 are left at the altar. the u.s. was a big advocate of it. certainly the japanese are pushing the conclusion and implementation of tpp and wants to bring more countries into it. at the same time the door is wide open for the u.s.. i think all 11 would welcome the u.s. back with open arms and would probably offer a little bit more. if you are looking for the big source of allied support with the u.s. that would make beijing really worried, it would be the u.s. doing the surprise of surprises and going back to tpp.

>> you are singing this could be the end of china-america. in your view what was it and if it is gone, what is that mean for both sides? ande still have the u.s. china economy steeply integrated into global supply chains which involve both producers and consumers, investors investors in both countries, financial markets are linked in many different ways. is the massive economy we are both connected to. that would mean is the intermediate trade and investment reduced dramatically between the countries. even if that is the goal of some in the trump administration, that unwinding is a long process. businesses are not going to walk out of china quickly. it would take a long time. even if you want to write that

headline today you have to come back five to 10 years before you see the fundamental changes that would lead you to say they are not here anymore. kathleen: thank you, a lot of perspective in that conversation. don't forget you can always find in-depth analysis from the big newsmakers on bloomberg radio. app or download the access it via bloomberg .adio.com this is bloomberg. ♪

haidi: i am heidi in sydney. i am kathleen in new york you are watching daybreak australia. of recent performance

legendary manager bill gross has been disappointing but is confident he will bounce back. unconstrained bond fell down nearly $1 billion from the peak in february. ceo says gross will be back. arehe underperformance we seeing now is challenging and disappointing to him more than any of us, but certainly to all of us. we are not where we need to be. if you look across his record, that is the anomalous poco. in -- anomalous period. he will come back around. shares of the effects seen maker's chairwoman were frozen following her arrest. local security officials -- she and 17 other employees were detained after revelations that the company had violated the vaccine standards since at least

2014. kathleen: germany's online marketplace -- the net shortfall in the june quarter was $32 million although revenue climbed 40% to $86 million. than $1 billion in the june ipo, japan's biggest tech offering. for's daybreak australia this friday and this week. the week we will look at major market opens but also getting to a major data point on the calendar today. we are joined by the wisdom tree head of japan. says he is expecting to talk about the decoupling of the boj. we are expecting a bit of a rebound in the second quarter. but largely is that going to be

on the impact of oil prices and the currency effect of the yen? cathleen: carl told us he didn't think the bank of japan did much with that yield curve tweet. tom schafferour, will come to talk about these important trade war talks thursday and friday in the u.s.. japan and u.s. bilateral agreement. he was the ambassador to australia. he helped negotiate the u.s.-australia free trade agreement years ago. tohas done a lot of work increase trade between the two nations. he has been there and done that. we will get his sense of where we are and where we are going next. haidi: an increasingly number of the people we talked to say that there will be more pain ahead. a lot of them are throwing up

their hands saying, this is a trade war that is here to stay. kathleen: all right. that is all ahead on daybreak asia. haidi: this is bloomberg. ♪

haidi: it's 9 a.m. here in sydney. asia-pacific markets facing a mixed open at the end of this week. they were tensions continue to weigh on sentiment. private gains in the regular session and rose reports of an imminent word meeting. kathleen: from bloomberg's local -- global headquarters i'm kathleen hays. trade tensions may be affecting companies with supply chains in china. an elephant starting to run. the booming opportunities in india.