haidi: u.s. stocks have their worst day in seven week as 10 cent and copper slumps into a market. ramy: strong retail sales did little to help as the s&p 500 fell for the fifth time in six days. macy's tumbled and that's despite beating forecasts. haidi: the dollar reeling from the trade war. ramy: and tesla declines for a second day on reports of a subpoena from the s.e.c.

it concerns elon musk funding secure tweet. haidi: hello from sydney where it's just past 58 a.m. here. i'm haidi stroud-watts. ramy: and it's just past 6:00 p.m. here in new york. i'm ramy inocencio. we'll be looking at how action in wall street and around the world will play into the asia pacific trading day. today's turmoil was brought to you by the letter t, turkey, ten cent, tesla and who let the bears out? copper now in a bear market. e.m. equities also. of course the s&p down by the most in about seven weeks. let's get more with su keenan here in new york. sue, even some positive u.s. data couldn't stop this sea of redful >> not at all. name the commodity, it's a down

day. the trade war and turkey. the only one-two punch, stocks closed off the lows but boy, they were down. 10 cent, tech stocks were the lowest. the s&p 500 again down for a fifth out of six sessions. let's go to the commodity story. the bears in control. g.t.e., copper and commodities as a whole tumbling amid the trade woes and the big movers. tesla sexilet subpoena worries the least down stock of the bunch. macy's as mentioned, getting hit hard excite the fact it beat -- despite the fact it beat earnings. ten cent off its low. and micron, the chip sector getting hit hard. a lot to do with the fact we had a lot hedge funds dumping micron.

let's go back into the bloomberg real quick, g.t. effort. retail sales were jumping more than forecasts. didn't matter, stocks were in selloff mold, joining the rest of the world at a better than one-month low. haidi: we have earnings coming through on the bloomberg here in australia. australia's biggest global insurance company reporting a first-half cash profit of $385 million. risen people yums. 35. 5 ium coming in at billion. presumably this is going to be a dominant story. sliding commodities. oil to metals, copper. gold continues to languish.

palladium and platinum are in free fall. what are the drivers? >> traders are concerned that this is going to undermine global growth. let's go to the chart of the commodities as a whole. that -- palladium and platt yum - platinum are used in car pligs pollution devices. a big surge here in the u.s. .hat pushed oil below opper down on the day. the common definition of a bear market and let's go right to the stocks directly impacted by the declines in the underlying commodities. again, a very non-optimistic day for the bulls but the positive news we did close significantly off the low. the could you dow was down 330

at the lowest point of the day. closed well off that by the end. haidi: su, thank you so much for that. taking a look amount treasure, this is clearly one of the stories, one of the stocks looking most vullmerble. -- ure one, net income at revenue of 2.5 aussie billion dollars. andfull year, 530.2 million finally that final ditchdenled per share being issued at 17 aussie cents. there's some confusion as to whether we see benefit for treasury one, given perhaps exports going to china. trading in new zealand is just getting under way.

anything positive, as su just went through but a bit down for kiwi stocks. more on the aussie dollar in a moment. 7238, pretty close to that 19-month low for the aussie dollar. let's get thank you first word news with jenna. >> the leera jump as qatar rose to turkey's rescue. announced plans to invest $15 billion in the country as president erdogan reaps by his rewards of standing by. the leera was already rengthening with a series of funding. raised its key rate in the face of the rue peoria and the seven-day turkish crisis. only seven out of 28 forecasters on bloomberg forecast this jump.

the are you peay was reeling from higho interest rates and the stronger dollar. the dollar's correlation with the tumbling juan reached the strongest on record as the clear sign y it's a to australia's vulnerability to slowdown in china. china insists that it can weather the escalating trade war nd reach its target on the year. the impact will be controllable through proactive fiscal and monetary economy. chinese economy rose to 6.4% in the second quarter and remains above the official target. global news 24 hours a day, on air and on tick tock in twitter.

i'm jenna. this is bloomberg. rishaad: thank you very much. breaking news with telstra coming in with earn oogs coming in at 3.5 billion aussie dollars. he senate there was 3 clnts 41 billion. that means it's beat its highest estimate. the share price today down 24 percent. beebe reis coming in at -- tesla also saying that june 20th hasn't changed. lso, it's fiscal cash free flow. looking also at the 12-month price targettle with see that analysts have been fairly bearish on this stock since 2016 with that falling from about 5

nts 50 so clnts 50 so where it stand thousands -- now, just about the $3 mark. let's get to one of our big top stories of the day, of the week, of the month, really, and that's turkey's financial crisis. in the latest u.s. tegs, tech also took a stoll on stocks. kevin, it's been really busy today with a lot crosswinds. he -- we have turkey on one side. tech on another side. tech tensions here. the s&p down as its most if the past several weeks. what's really guiding the markets right now? >> over the last year and a half or so we have good earnings. have s&p up with 10%, re-knews up to 15%.

as you said, we're seeing boros cost wind. lets evening global growth and then in the united states, you're hitting roord highs in the markets. today not included but in the bond market, a flatenings yield curb so some differenters to ask not as much as on the unchampionship cal news we had last year. >> to your point about those record highs. i want to hop into the g.t.e. linebacker and you can see that this time, that u.s. stocks look better under the hood. small caps' return even higher, at 12%. to what degree can we continue on this? most people are saying that this is the ultimately safe haven.

>> we any that is -- the united states is in the best position as far as greept is considered. we're seeing some very nice things in the united states in terms of investigate spending. and when we think about what's pp driving markets, even over at record highs, earnings have risen faster. part of that is strong growth, port of it are buybacks and part passed last pass year. we thought down the road we would see united states provide leadership but the overall picture for global ementty is clearly choppier than a year ago. craig: do you think in a sense we're in a peak when it comes tolts earnings and growth cycles? >> take the earnings for a

impact. you have had a one-time pop in earnings for the s&p and the repate race of foreign capital will be kind of a up with-time event but then there's another aspect of it. if that aftertax return in the united states is impruse proved place the ayes backs a that could put capital growth into it. so what we're looking for is to see whether not the one-time effects but whether or not we said a sustained shift as far at complal -- capital in the united states as a result of that tax change. lisa: emerging market stocks are at their cheapersest this year and this was the trend before all this happened with turkey.

by does this suggest to you, the u.s. looking pretty pinky or would you be looking for -- out of that pace? >> when you bring debt into the equation, things suddenly get more agitated for the emergencying markets. that's been driven mostly by very, very high let's of investment spending, oftentimes centrally. so you want ma that tends to end badly. >> turkey is just another example of an investment growth led country that has had to go outside to borrow in other curbsies to fund that frothe. and as we've seen 20 times in the past, that seems to end fairly poorly. haidi: kevin, thank you so much

for them. kevin caron there joining us. more earnings. ka underlying epitar, $ 75 ist half aussie dollars. sbirn dividend per share of 10 aussie cents. 0.63 i should say. to is a minerals manner here in australia so another one to watch. we'll collapse when it comes to the demod 'tis overnight. coming up "bloomberg daybreak: australia," we'll look at how the u.s.-china trade war is ulling -- them down. >> plus, profits dropping and regulatory hurdles clouding investment sentiment.

we assess second quarter results next. this is bloomberg. ♪

haidi: i'm haidi stroud-watts in sydney. ramy: and i'm ramy inocencio in new york and you're watching "bloomberg daybreak: australia." to tesla now and the tale turns yet another page with the s.e.c. now said to have sent a subpoena over c.e.o. elon musk's tweets about securing to go private. an s.e.c. investigation would ask what musk meant in his august 17 tweet that sent this saga in motion. ith naughton, what does this subpoena actually say about this investigation? >> it says the s.e.c. is knew taking this to the next level. it's mechanic a -- become a more serious investigation and they're going to look deeper, particularly at the part of musk's tweet that says funding secured because it appears

funding was not secured. he said in his log post on monday he's he'd been talking to officials but it had not skired the funding. this is another example of elon putting the cart before the horse. he said two days ago that he had goldman sachs as an advice advisor but it was only today that goldman sachs confirmed that. he seems to be getting ahead of himself which is causing concern with the s.e.c. haidi: what does that mean for elon musk? are we talking about a different type of investor pressure then? >> exactly. there are a couple of things at rk with the sawed rain investment. -- saudi arabia investment. it's expected to to be large and could be even larger than elon's

holdings himself. his business decisions might be quelled. he might have to make d. moves. that's not how he likes to operate. and president trump's administration has created new legislation that's going to look more closely in foreign investment, especially in tech firms because they're worried about losing tech to overseas interests. haidi: lots of aspects to yet more dramatic developments in this tesla story. keith in detroit. . going to stay with tech and taking a look at the tech selloff overnight. in a further sign of the strain being held by tencent has reported it first drop the in profit in at least a decade. steve has a story from hong kong. what's bringing this down? >> it's the first profit drop in

more than a decade. it seems to have always powered through any adversity but they're getting adversity on multiple front. the mobile gaming revenue took a hit, down 19% from the first quarter to the second quarter. we were expecting that be they also got news this week, bloomberg news broke that scoop on the regulators in china. there's a reshull -- reshuffle going on there and they're -- they've frozen profits and the ability to monetize that. the mobile gaming revenue on its own merritt was already declining because fatigue in older titles like "honor of kings but there are new games like fort knight that cannot monetize right now because of wi massive exposure to

chat. future growth in mobile gaming is a big question right now and again, that's what martin lau, the president said yesterday in the conference call. he said we're going to work this out but right now it's a little bit out of our control. rishaad: makes up the biggest revenue stream i saw. with pressure on the game business not going away anytime soon with that regulatory uncertainty. what is next for tencent. they've invested billions in new businesses are. they playing off? >> some of the companies they've invested in haven't gone so well after going i.p.o. china literature down 37% since its i.p.o. it also sold out of a food as

much as company. also m of course bike to kind of cash out and then invest in other businesses. so investment returns were not so good in the quarter but keep in mind, we have wi chament and wi chat users climbed to 1.6 billion so they have that eco system and that underpins gains and ad revenue. ad revenue jumped 29%. payments surged 40% but again, small compared to the mobile gaming business. rishaad: they're going to try to monetize that. cents cents over the last several hours. thank you very much. you can get a roundup. bloomberg sub scripers can go to day v. go on their term false. you only get the news on the

industries and assets that you care about. this is bloomberg. ♪

ramy: welcome back. i'm ramy inocencio in new york. haidi: and i'm haidi stroud-watts in sydney. you're watching "bloomberg daybreak: australia." new zealand will ban farmers from buying homes, saying its citizens should not be outbid by wealthy foreigners. what prompted this latest variation of this law? view for some nt time has been that house prices have been going too high too fast and homeownership rates are the lowest since the 1950's and there's a number of reasons for it. poor supply, population growth but labor and opposition particularly eached foreign buyers certainly in auckland and

queenstown as the reason and late last year, there was a the president. she felt it was new zealand's birthright to enown its own property and foreign investors are outbidding locals. rishaad: does this mean that every single foreigner can't buy in. are there any caveats? >> certainly it's going to be quite difficult to buy an existing house because of complications around existing trade grease. citizens from australia in singapore will be able to buy existing homes and there will be the odd exception in terms of new houses, there's a bit more scope. the government is obviously wanting to boost the supply of houses and it doesn't want, for

example, apartment people developing big apartment blocks not to be able to finance them by preselling units. so investors will be able to buy a portion of united states say in an apartment block and there are other exception. it's a pretty thorough ban, really. ramy: what does this mean about the welcome mat generally for foreign investment? >> it's search an issue. opponents like the former prime minister say we need foreigners to come in. they're the ones who connect a smaller market like new zealand to the global marketplace. historically julia roberts and rick kaine have built lodges here and opened up facilities. others like peter teal have bought properties in the south island and have sponsored some of our local businesses so it's

quite important. ramy: we'll have to leave it there. thank you very much, bloomberg's tracy withers in wellington. up next, the -- under pressure. more after this break. ♪

aidi: it's 8:30 nam sydney where markets open soon. u.s. stocks falling again overnight largely driven by the weakness in tech. e sydney open about half a percent higher. something of a safety play here with more than a decade high. i'm haidi stroud-watts in sydney. rishaad: and i'm ramy inocencio here in new york where it's :30 p.m. and you are watching "bloomberg daybreak: australia." oz minerals with a focus on

copper coming out with its numbers. it's first half net income, $128 .8 million aussie dollars and as for the interim dividend per share, that is at eight aussie cents. those are the latest numbers coming across the bloomberg terminal. having the focus on copper as well as gold. analysts have continued to be bullish over the years since 2016 raising their 12-month price target to $10.52. you can see year to date there's been some volatility in the stock, up by about 2.72%. let's get the first word news with jenna. >> thank you. emerging markets had their third worst day of the year after tencent reported a rare and unexpected drop in quarl profit.

tech stocks have been pullled in the escalating trade war. tencent is the largest component of the emerging market stocks. tesla is said to have received a subpoena from the s.e.c. regarding elon musk's go private plan. sources say the demand for more information comes as the commission investigates last week's tweet about having secured fund all right -- funding for the move. ocks went more than 2% lower for a second day. the s.e.c. and tesla both declined to comment. president trump has lost patience with former c.i.a. director john brennan, yanking his security clearance and accusing him of erratic behavior. he's been a vociferous critic of

current president. president trump says he's trying o limit freedom of speech. knobble has finally come forth. he's been described as disgruntled former employee by -- behind a series of reports of an anonymous group that began attacking noble in 2016. he confirmed his links and said bad companies must die. goebel news 24 hours a day on air and at tictoc on twitter powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. haidi? haidi: thank you. a quick update on the markets as trading gets under way in asia. declines criven by tech. lots of problems for that

sector. taking a look at how we're setting up. new zealand off by about .1%. sydney futures looking pretty negative. that market is up a decade high. we're looking at about 14, 15-month high for the bloomberg familiar. we're watching as australia gets under way here. this gulf between the chinese and u.s. markets is becoming even more stark. are we starting to see some foreign influence? >> let's look at the gap first. %age pointw about a 15 gap between eight shares traded there hong kong in the s&p 500. this is showing the

underperformance and the lack of appetite for chinese assets at the moment but it's getting to the point where valuations are becoming incredibly depress. if we look at the hang zhang china enterprises index, it's down. an extremely depressed valuations and for the likes of andrewmatic at andrews asia. he's looking to buy some of these and has been buying some of those shares. he said it's a little bit too early for him to dip into too much of the asia company currently in the mainland but some of these companies trading bargains.ng have seen ramy: the aussie dollar has been a fallout. why are many in the markets

expecting it to fall even further? >> the tricky thing to be australian dollar and the outlook to the aussie here is that a lot of this isn't really to do with the local economy itself. it's primarily being driven by external factors. the r.b.a. is at a bit of a loss. they can't do much about what's going on. hat we're seeing is a huge correlation between chinese yen. and the that's quite unusual. the aussie becoming a real proxy for some of the worry around china. this global escalation between the u.s. and china and its trading key partners. there's a leaning to the short side of this trade in the market at the moment. plenty of people are expecting the aussie to go back below $70,

maybe get into the 60's. nestically the economy is still struggling ask there's not enough inflation to get the are. b.a. set on raising rates. join our 't forget to j.b. the live on those stories. a quarter of a century without a recession in australia. cording to our next guest, there could be worse to come. nick joins us now. it's being squeezed from all fronts. the china trade war and the slowdown story and the fact it's highly liquid and available for trading >> that's the main thing we're looking at with the aussie. because we get liquidity for and

it we're seeing this link that we just looked at, the real lose ko correlation with the yuan. when you've looked at previous and i he is at the same time to use the word "crisis" but when your seeing these trade tensions come in that has been the go-to currency. yen generally the aussie but it had a keep key technical level break last week. it does open the way to 70 and below that you're looking at fresh loads, around 68, 50 and that could even come before the end of the year. haidi: i.s.x. reporting its 1.01 dividend per share of aussie dollars.

just a couple of numbers coming thank you. nick, i want to go back into this chament. you were talking about the correlation between the juan and the aussie dollar. pretty -- looking chart but beer seeing the yawn being the kind of ainge -- yuan being the anchor currency here instead of the greenback. and now we're seeing this severe tension really between china. it's not a bad thing to think the chinese will allow the baun -- but obviously it has international aspects to come through and aussie: is one of the things that'sa aoccurring. to be honest, we're not seeing any signs that they're going to

calm down anytime soon, certainly from the u.s. administration and from the u.s. well-. so both the juan and the aussie, certainly medium term and probably long term at the moment. >> ramy: what kind of scenario in china, in trade tensions do you foresee? >> i think what we're looking to see is that the tariff imp policemen -- implementation, if it comes through and if we get escalation and protectionist policies from the trump administration, i think that could really move -- and we've seen currencies move and it was the leera this week. but i think if we do see that continued escalation and once it starts to hit those fundamental numbers, that could speed up the move to the downside, both for

the juan and the aussie. i think it's going to be a gradual deprotection for the aussie but for the yuan, that could be a more volatile move. ramy: weaker aussie could possibly spur some inflation what possible impact could that have on the r.b.a.? >> maybe by get that drive down for the aussie and at least we can see some movements from the r.b.a. they've not indicated we'll see too much in maybe the next year, near and a half but if we get them do you know into the mid 60's then maybe there's a chance of a hike from the are. b.a. haidi: what sorts of assumptions are you making about with the since if the trade war continue you're going to see short-term

inflation presumably in the u.s. does that potentially change the course of the fed and therefore that story of divergence? roip i think it does. as you said, we're book loosh looking for rate hikes from the fed. become in with that tagflation, companies may have room to cut through to the future. maybe longer term we see those flip around and we edo get a base somewhere in those mid 60's for the aussie and then the interest rate different rbles do come back in but it's very difficult to predict. i think we're all waited with bated breath for the next sixth six to 12 months. haidi: nick, really appreciate you coming on and spending the

morning with us. australia's chief operating officer here in sydney. coming up, we'll look at investing in tech. the co-founder of arba's largest republicanture capital fund tells us about the company's biggest opportunities this bloomberg. ♪

ramy: welcome back. i'm ramy inocencio in new york. haidi: and i'm haidi stroud-watts in sydney. you're watching "bloomberg daybreak: australia." tencent has suffered its first profit drop in at least a decade as the chinese government moves to crackdown on new gaming releases. that taking a toll on tech stocks overall. in the last u.s. session, the nascar was the worst performer in the latest benchmarks. welcome to sydney, great to have you on "bloomberg daybreak:

australia." does this change the level of caution you think investors have when it comes to tech and growth? >> no, i don't think so. s always have regulation that is try to control things they think are going a bit out of hand. it's a blip in the long run. haidi:s al china can be very uncertain. they can come out with a new change in policy essential -- essentially overnight. how do you put that into your decision make something >> you can't. you can't predict fundamentals and over the long term fundamentals will prevail and every country is always coming up with different regulation to control this and that. even the u.s. sing poyer made changes. you can't predict these things. you hope in the longer term food sense will prevail and the fundamentals get through. haidi: how do you pick a successful tech story?

what do you look for? >> i think there are three characteristics of a dream of adventure nevpl. you want a technology that is disruptive and you want it to be i.b. protected ask number three, you hope that the market is already known so there's no risk. haidi: one of the things you talk about is exactly one of the wars that donald trump is fighting with china at the moment. is that an area of concern when you're investing in chinese companies, that there is a feeling of -- intellectual property? >> i think china right now is very protective of it own i.p. obviously it's less protective of others' i. perform. like in any away, the outcome is unpredictable and it's going to be a lose-lose. both sides will lose in any war so the key is hopefully this

brinksmanship game, good sense will come through at the end. ramy: looking right now at china tech because of what's what happens and also with ten cents and the earnings there. t's also impacting bidu. what concerns do you really have here? >> i think whenever you have big regulatory changes, you get a bit of a contagion effect so sometimes you get companies that are not really -- also being affected. bidu is a company not really in gaming so much so it shouldn't be affected too much, however there is a contagion in everything. i'm not too concerned. ramy: go ahead. >> i was just saying that the big push right now is all about

artificial intelligence. in fact, the gaming business is a little bit passe. peak ort of reached its and was plateauing. artificial intelligence is the main thing driving china tomorrow and that requires two things, talent and data. data is more important than talent. if up good data, good talent will come and china is the biggest population in the world who don't really care so much about privacy and as a result the richness of the data is incredible. so you ain't seen nothing yet. china is going to lead the world in artificial intelligence in my view. ripe not so sure about where they don't care about privacy another discussion.iscussion. u.s. tech vs. china tech. the white line is -- the blue line here is china tech.

since thece happening middle part of june or so. do you think this now is an opportunity to get in or how long do you think this divergence mike continue? >> can you repeat the diverge sentence >> where china tech is going vs. u.s. tech. >> what is your schnur is it a list of markets? ramy: that's right. the invesco. trust vs. invesco. china tech e.t.. if. >> i see. well, we don't really look amount the listed markets as much. we're more looking at the unlisted markets and looking forward and i think china tech is going to be much higher than it is currently and the growth of it's it will be much faster than anyone else in the world.

haidi: we were talking about privacy. with all the head winds facing a company like face pook, there's lots of exis stencil head scratching on the use of data. do you think that's going to confound the chinese market at some point? >> right now as you said, artificial intelligence is very dependent on data. the richness of data is incredible because they have 750 million people logged only and there is less concern about privacy in chin for whatever reason and that's a fact. and because of that, the richness of data is making artificial intelligence grow so much faster. haidi: is there going to be a backlash? >> i don't know. the answer to that question is really unknown for the time being because how are people affected really by agreeing to have more of the data in the market?

if they can somehow benefit from , that we actually don't know what the outcome will be. haidi: thank you so much for that, joining us here for the vickest venture partners chairman and co-founler. 10-yearsie news -- u.s. treasury yield was the low nest about a month in that overall. session. going to continue watching the u.s. dollar in particular. the bloomberg dollar index and the aussie dollar in this session as well. this is bloomberg. ♪

haidi: i'm haidi stroud-watts in sydney. ramy: and i'm ramy inocencio in new york and are you watching "bloomberg daybreak: australia." a quick check of the latest

business flash headlines. the b.h.p. may have avoided a strike after -- at its giants chilean copper mine. union members will have their stay in the coming days after the two sides reached broad agreement over conditions. if ratified the deal would remove a major potential supply shop for copper emboldening the bears who have pushed prices down nearly 20%. haidi: macy's second quarter results were clouded by concerns over the cost of growth. justed a.p.s. also raced macy's four-year forecast. concentrate on bargain and discount concepts. mark: increasing a stake in

canadian marijuana growth. that deal is expected to close in october when canada is slated to legalize recreational pot use. analysts say the companies are positioned to grow a global cannabis empire. haidi: that is about it for "bloomberg daybreak: australia." but we have "daybreak": asia coming up. yvonne, what are you watch something >> it's really going to be tencent and how it trades when hong kong markets open. fell as much as 10% overnight and sent shock waves across global market. we'll speak to a partner and portfolio manager. they've come up with china focused e.p.f. eats. he says the setback for tencent

is just a slight head wind. from what he understands the intention of the government is to work with game makers and not against them. raul: and from china tech, yvonne later on will go into hina bio investment. this just started trading on the nascar today and it's -- nasdaq today and it's bringing together 20 chinese bio tech firms to try to bring back u.s. investors into the growing game. haidi: yes, we'll also be talking about the issues we saw overnight with the tech sell ah. we'll be joined by the financial c.e.o., also talking about the fallout from turkey, whether we really are past the geopolitical tensions. he citizen it's not surprising that the markets have come down

somewhat when it comes to turkish con teenage si but he says this strategy of turkish ar fare could be here to stay. this is bloomberg. ♪ ♪ >> it is 7:00 a.m. here in hong

kong, live from asian headquarters. top stories this thursday, asia-pacific markets decline after wall street's first -- worst session in seven weeks. on tech afterng shockingly poor earnings that suffered a first quarter drop in a decade -- indicates. i am ramy inocencio in new york. it was a bad day for commodities. copper fell to a bear market and west texas crude hit his lowest.