haidi: welcome to "bloomberg daybreak: australia." tory: we are counting down asia's major market open. ♪ haidi: these are the top stories we are covering in the next hour. u.s. stocks fell on continuing unease on trading growth, oil falling to its lowest in a month with tensions and saudi arabia. president trump says it looks as if jamal khashoggi was murdered.

he now speaking about severe consequences. steve mnuchin is the latest to drop davos in the desert because of the issue. russia is sending even more people. shery: that's get you started with a quick check of markets, the close of the thirsty session on wall street. stocks under pressure, the dow falling for a second consecutive session. some industrial firms missing earnings estimates. that pulled down the index like there. the s&p 500 down 1.4%, slightly above the moving average but only by touch. large make a cap stocks under pressure, the nasdaq falling 2%. facebook and apple under pressure and the dollar index surging the most since august. look at the different sectors within the s&p 500 and you can see where we saw the most pressure. tech line the big decliners but also financial.

concerns over ongoing trade tensions between china and the u.s., not to mention concerns over economic growth. jpmorgan now saying the chance of an economic recession here in the u.s. are topping 60% in the next two years. inergy also under pressure. oil hit a one-month low, not to the bond proxy stocks were slightly higher but only by a touch. utility slightly up. all this we be felt in asia. how are we looking? doesn't look like much of a happy friday for asian markets. we started with a plunge in chinese stocks. look at how were shaping up when it comes to trading in this part of the world. kiwi stocks up by .7%. risk in commodity related

purchases, all commodities of the -- other than gold saw decline overnight. we're building up to chinese gdp as well as the most the mystic activity indicators. that will either be relieved are really feel the trade center -- traits in met driven selloff. also looking ahead to japanese inflation coming out in the next little bit as well. theresa may is gambling on a go slow brexit as she and the european union try to bridge their differences. the summit fell short of the breakthrough it had been touted as but there is hope that keeping the u.k. under e.u. wrote -- role a little longer may help break the impasse. top e.u. leaders say the ball is in her court now. >> you can see there is no room to maneuver.

it's now the key element for the final deal, it's on the british side. italian bonds plunged on thursday as the e.u. executive arm laid out its concerns about the populist government spending plan. the yield on the 10 year note search as much as 15 basis points, to levels not seen since 2013. the euro weakened us e.u. commissioners warned the draft budget is not acceptable. prominent members of the wto are calling for an investigation into u.s. metal tariffs, opening up a new front in the escalating trade war. china, e.u., russia and norway say the new rules violate the rules and wanted independent assessment of the situation. washington said it falls under an exemption that allows

governments to act in national security interest. to a president's most senior aides are said to have had a bitter argument outside the oval office. were told chief of staff john kelly a national security advisor john bolton turned the air blue, although it's not clear what they were upset about. the clashes and indication of the rising tension in the administration come a less than three weeks before the midterm elections. global news, 24 hours a day, on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jenna dagenhart. this is bloomberg. our top story this hour, president trump says it certainly looks as though missing saudi journalist jamal khashoggi is dead. he would not say on what basis he formed that conclusion, but did warn the consequences for any saudi arabia and involvement would be severe. >> we are waiting for some

investigations and waiting for the results, and we will have them very soon. a very we will be making strong statement, but we are waiting for the results of about three different investigations. greg, there is a reason the president has been reluctant to call out saudi arabia. they are a huge ally in the middle east. does this mean we could see a tougher stance now? seem to certainly does signal that the administration is feeling the pressure. they have made that relationship central to their foreign policy, both in the middle east and in other areas. president trump's first trip as president was to saudi arabia, but there's no doubt they are beginning to feel some international pressure here. steven mnuchin did backout of an investor forum in saudi arabia earlier today.

perhaps he was feeling a little as others have already backed out as well, but it does seem to signal -- feel they need -- that they need to take this very seriously. shery: we know that congress could have acted. could we see some sanctions then? of the most interesting things about the situation is there's a clear contrast to the line the white house has taken before today, not ready to acknowledge that the journalists had potentially been killed. whereas several lawmakers have not felt that reluctance and have clearly said they believed saudi arabia is behind the killing of this journalist, let alone his disappearance. other lawmakers have warned of everything from sanctions to curtailing arms sales and lawmakers have been trying to make the case that even though we do have the strategic alliance with saudi arabia, there still needs to be some

statement, some pushback, some declaration that the u.s. does not find this disappearance acceptable. some lawmakers think you can have this relationship and still have that kind of statement. clearly a lot more heat coming out of the white house than congress at the moment. others say there will be repercussions slowing the other way as well, that the people who have canceled their attendance will be blacklisted. to what the former u.s. ambassador to saudi arabia had to say earlier. >> there will be a time of and notit in his knows who did come to double's in the desert inl be penalized -- davos the desert. this will highlight to the business community the reality that there is no transparency in the government, that there is no

written rule of law and there is an arbitrariness about the government that makes investing in doing business a real risk. haidi: the situation has catapulted the relationship between washington and saudi arabia to the middle of the u.s.-middle east policy. greg: that's right. the u.s. is having to confront challenges with one of their biggest allies. where the president saying he doesn't want to tap down on military sales. there are reports that jared kushner is urging him to stick by prince mohammed. on the subject of sanctions, there is precedent for congress acting out ahead of the administration. they passed a law allowing them

to sue even know it kingdom's government has not been found to have any formal law and that -- formal role in that attack. there's some precedent that congress could come out and act even if the administration doesn't but it is proving a challenge for the administration as well. haidi: thank you so much for , with the sullivan latest on this fast developing story. still ahead, high interest rates are here to stay, but the st. louis fed may have a solution to that. shery: up next, a pimco advisor says emerging markets are the trade of the decade. this is bloomberg. ♪

shery: i'm shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. you're watching "bloomberg daybreak: australia." a dive into the latest u.s. stocks slide, raising an

essential questions about whether the seller's resume control in the friday session. s&p 500 slotting back toward its 200 day moving average, the dow losing more than 300 point. su keenan joins us now. we saw volatility making a return as well. we came in on weak footing because of the selloff in china the week before. we saw the intensification of selling after treasury secretary withdrew from the saudi arabian conference. just another layer of geopolitical concern. let's take a look at the way the market closed. you see the dollar rising but oil fell to a one-month low in the regular session. gold moving higher, selling off a bit in extended trading but there were strengthen the regular session as a safe haven play.

the real question with support the s&p 500, the 200 day moving average being watched very closely, several times throughout the intraday trading broke through but managed to close right at that support level. issue in thekey friday session whether that holds. going to some of the big movers, , we sawarnings reports mixed bag of earnings reports, the previous day what we saw was negative earnings, volatility rising more than 20% in the session. you can see we are coming back into almost the level we were at last week. last week jpmorgan pointed out 45%. the software company out of germany, taiwan semiconductor a big disappointment that set the

tech sector lower. alsoon and united rentals a big disappointment. united rentals creates a lot of equipment for the construction industry, so the downturn in housing construction is playing out there. so you got the bad news out of the way, what about the good news? we got some positive earnings from paypal and american express. leading on earnings and exceeding in terms of their forecast. look at how they are trading in after-hours. this will give some earnings strength going into the friday session. apl exceeded analyst estimates and it shows they are making a lot of progress toward venmo.ing then mow -- american express continues to expand. they're known for pitching their

products to more affluent market. your today charts for these companies, you can look at how they have done so far. both are expanding their partnership, american express and paypal, and that extends the market for each. earnings has been a big driver this week. this is one positive going into friday. is portfoliog us .anager rob arnott great to have you with us. it looked i cut mixed bag, especially for today. we have about 10% of the s&p 500 reporting. you can see how the equity markets performed in the last few earnings seasons. we saw there was a pause in the surge on the s&p 500 in the first quarter earnings season. we you look at the state of the u.s. economy and what you expect

out of earnings, will markets be better or worse off after earnings? rob: earnings in the long run powerfully. revert when earnings have been unusually strong, as they have, the overwhelming tendency is for the growth in earnings to slow down or even reverse in the subsequent years. from an earnings peak as lofty as the current one, i think the more important message is not whether earnings this quarter are a little higher or lower than expectations, but what is going to happen in the coming 5-10 years. our own outlook is that earnings 10 years from now will not be higher than they are today. that would suggest that if the market is priced to reflect an expectation that earnings will win on top ofle win, then the market has gotten ahead of itself. shery: no wonder we are seeing a bit of a pullback and volatility

taking the slump of the equity markets to more than 5%. i believe it's the third time this year index has lost that much during a selloff in the month of october. what does it say about volatility going forward, given that you mentioned these you asians? rob: in the last nine years we've had a low volatility bull market. these breed complacency. when volatility junks, you write that you wind up rattling complacency and that's what we are seeing now. another phenomenon that doesn't get nearly enough attention is the fact that markets in one segment of the world and markets in another segment of the world act sort of like a magnet, pulling one another towards different outcomes. when you have a situation where one market, the u.s. stock market, has overwhelmingly

outperformed the rest of the world, the tendency will be pretty strong for there to be some mean reversion, for u.s. markets to take a breather, or perhaps even enter into a correction or bear market, while the other markets have an opportunity to rebound. do you think we are finally seeing that rotation we have been talking about since we started looking ahead to this year, away from buying everything growth, our investor gator -- are investors rotating toward value? rob: i think that might be the case. i'm always wary about making short-term forecasts. they are largely a coin toss. we wrote a paper a few months ago entitled, it's a bubble, so what?

the important thing in that paper was not its title, but the fact that we provided a rigorous, robust definition for the word bubble. people had bandied about the word very readily without defining it. our definition was simple. a bubble is defined by an asset, stock, or market in which you have to use implausibly aggressive assumptions to justify current valuations if you use a conventional valuation model, like a discounted cash flow model. you have to make implausible assumptions. the second part of the definition is that the marginal buyer of the asset or the market doesn't care about these models. doesn't care about a valuation model using that definition, tesla and netflix, clearly bubbles. and apple and microsoft, clearly not bubbles. for going to talk more

about emerging markets in china in a minute. were you surprised in the reaction we saw the cello overnight and does it suggest the u.s. market are not as domestically focused as not so immune to volatility elsewhere? rob: there is a lot in what you just said. what we have seen is that world events can move markets that are actually unaffected by those world events. controversy, the with saudi arabia these days has very little to do with most of the emerging economies of the world. and yet we saw a selloff in the emerging markets, in the aftermath of that. that is interesting. if you have a selloff in a market, based on phenomena that should not really impact those markets, isn't that perhaps a buying opportunity? do stick around us, lots

more to talk about. will stay on with us. bloomberg users can interact with the charts featured on bloomberg tv. charts for your future reference. this is bloomberg. ♪

haidi: the u.s.-china trade dispute -- trade numbers are out in just a few hours. economists expect 6.6% gdp growth compared to year earlier. the headline doesn't tell the entire story. rob arnott is with us from newport beach, california. i want to start with s&p versus the shanghai composite chart. looking at the relative strength in terms of the ratio between the two, if you look at the levels we are hitting now,

history will tell us over the past couple of decades this is where we see a bounce back for chinese stocks. do you think that's going to happen, given the selloff, if you look at the metro -- macro picture, when it comes to the trade war, has it materialized? has the depth of that selloff really surprised you? no, it hasn't surprised me at all. the nature of the trade tensions exacerbate any downside risk. the nature of bargains is very simple, bargains get there i didn't of inflicting pain -- by dint of inflicting pain and losses. there's no such thing as a bargain in the absence of pain and losses. the fear creates the bargains. is china a bargain now? it's getting there. is it likely to rebound soon? who knows?

the thing that's interesting is buying a little bit more as it goes down ensures that you have maximum exposure when it turns. shery: jpmorgan saying the chance of a recession in the u.s. in the next two years top 60%. if we see a recession, will it take down emerging markets with it, or will the stimulus from china the apple to support these economies? rob: people think of emerging exacerbating swings in the u.s. markets and likewise, the economies. when you have a tumbling u.s. stock market, you get a sieve the decline in emerging markets. historically, it's often worse than the decline in the u.s., but let's not forget that the last time we had a bear market in the u.s., the u.s. was expensive, but emerging markets were extraordinarily expensive. 38 times earnings in emerging

markets, 27 times in the u.s.. no wonder they fell harder. now you have the u.s. at 31 times and emerging markets at 13 times. it seems to me the downside risk there is not very bad. both: some of them are really cheap in terms of valuations and fundamentals. what would you be picking? rob: i prefer not to pick the individual market. overweight the ones that are the most out of favor, recognizing that there is greater uncertainty there. overweight doesn't necessarily mean a large position, it just means overweight relative to markets that have a small allocation to these economies. turkey, for instance, or wildly out of favor and are dirt treat -- dirt cheap. haidi: rob arnott joining us

from newport beach. up next, the st. louis fed president is proposing a new monetary policy rule. don't tell you what it entails. this is bloomberg. -- we will tell you what it entails. ♪

haidi: it is friday morning in sydney. futures looking pretty miserable. we are looking at the kleins of up to 1% with sydney. training begins properly. 6:30 p.m. in new york. president trump is threatening severe consequences if it is proved that saudi arabia murdered a critical journalist. president trump told reporters that it certainly looks as if the journalist is dead.

the kingdom has promised an investigation into what happened to the writer. we are waiting for some investigations. we are waiting for the results. we will have them very soon. we will be making a statement. we are waiting for the results. three different investigations. is the latesthin up a lot of saudi arabia's investment for next week. goldman sachs backed out as well. top russian finance and business figures are going. bloomberg is no longer acting as a media partner in the saudi forum. mexicoorea has overtaken as the leading buyer of american liquefied natural gas. they have had a jump of almost

70% on 2017. itea's demand has surged as moves away from burning coal and oil to generate power. is looking at investments in lng projects in alaska, louisiana, and texas. road targetsairing and dropping plans to balance the budget by the end of the decade as it focuses on income equality. the prime minister says cost-cutting could hurt the economy. has capped a 10th straight year of household wealth growth and is set to remain the world's leading hub for rich people. north america led global gains for rise in household wealth.

low rates and tax cuts have all contributed. global news 24 hours a day on air and on tictoc on twitter. this is bloomberg. leading fed officials continue to weigh in on whether the hike -- whether they should hike more or to pause. trump said his biggest threat is the fed itself because it is rating -- writing hates -- hiking rates too fast. >> it depends what camp you are in. we had to fed officials come out. quarles is in the raise camp. jim bullard is in the pause camp. let's listen to mr. corals

first. >> i think we will be able to follow a gradually increasing path without actually moving into stricter territory. what the practical implications of that are, are we restrictive or not? that is a function of optimism. >> he said that he thinks the economy is in a good spot. bullard, there is the idea that maybe he is trying to push his own doctrine. he is saying that the currently held thought with regard to interest-rate rises still generally hold and he doesn't think that they actually have room to rise, at least not much more. [inaudible]

where do you go with both of those guys coming out on different sides of the spectrum? i'm not so sure. pop into the bloomberg terminal. follow me into the g tv library. i can show you where we are in terms of the federal funds target rate. hovering around 2.25%. the white line is the neutral rate. this is not the actual neutral rate. it does move around. this is the natural rate of interest here. sensibly, we are 25 basis points away from this. that would be one more hike. gotfed minutes we just earlier this week were saying that they could go into restrictive territory as well you get whether he -- well. love you think we will start to hit a wall, it depends on what camp you are in. shery: president trump has been

heavily criticizing the fed. how much of a point does he have on inflation right now? >> whether you like donald trump or not, it seems like he has a good point about inflation. hop back into the bloomberg terminal here. i want to show you the g tv terminal library, talking about inflation. core inflation and headline inflation is a 2.2% core. the fed's preferred gauge is under 2% here. is saying, if inflation is where you wanted to be, you don't need to start raising rates even higher to restrict the growth. there are concerns that a recession might be in the next 24 months. whether you think you need to start raining and inflation that isn't happening, or maybe putting in ammunition into the gun, it depends on which side you are on. haidi: thank you so much for

that. joining us now is the asset management chief macro strategist, great to have you with us. we saw the fed minutes this week. chair powell and some of his colleagues have noted the greater risk of an overheating economy could come through the financial markets rather than inflation. if that is the case, how positive is it that we have trade tensions raining in the financial markets at this point? >> it is absolutely correct. if you look at the financial markets, they are a faster mechanism to get a problem into the u.s. economy. in terms of trade, it is interesting. it continues to be spiraling or escalating. that's important. policy, ifry something is announced to the day on the trade front, it takes time for that to filter into the economy. the start of the year, the

tariffs on china go up to 25%. we are starting to look at some sizable numbers which we think will intentionally slow the fed down from what their current dot plot is. even last month, the imf cut their forecast for u.s. and global growth. the bid came down 20 basis points. mount, andncerns uncertainty mounts around that, you are starting to see forecasts letting up a little bit. the fed stocks continue to creep higher in their quarterly projections. one of those things has to give. either trade is going to be resolved and we won't have to worry about the negative drag from tariffs and things like that, or there's going to be an economic impact that the fed is going to have to respond to. not only on the rate side. they are also ramping up their quantitative tightening phases well. -- threeose threes

will have to give. calculation, how high will policymakers have to go before causing rate hikes -- pausing rate hikes? >> they don't have to go far beyond 2.5%. we believe that neutral rate is lower. there's a lot of structural changes that have occurred. we don't think inflation is a problem yet. as the tariffs taken impact, that is going to be a headwind to growth. there is not only the first-order effect of the tariff itself, the second order effect. things like capital investment, foreign direct investment. they have a much stronger force for future growth and job creation, we are already seeing foreign direct investment

slowing dramatically. right now, you would expect it to be excelling rating. if you look at the u.s. economy growing stronger than most of the dibella -- developed markets, you just got a tax cut profits.rate i'm a foreign company, it should be attractive for me to want to access that market and have some capital investment in the u.s.. look at the second-quarter numbers, they were negative. they were pulling money out. that's the uncertainty being created around this trade rhetoric. continues toriffs escalate. it is starting to have a real effect on investment in the economy. that will start to play out in 2019. shery: it's quite refreshing. you are one of the first people who has said that policy makers in the u.s. will have to react to the impact of tariffs and trade.

the consensus seems to be that the u.s. is so domestically focused with internal strengths the transition, will be so staggered that policymakers won't have to react. what is your response to that? interesting ifs you look at how the tariffs have been scaled in. the first couple of rounds were on capital goods. those are impotent to companies. companies will have higher cost of production. that is going to be balanced with the corporate tax cut they have. it would raise their margins. the higher costs from tariffs will lower the margins. you combine the two, you should be positive. side, look at the other the next round, they are on the consumer side. you look at the final round of tariffs with china.

textiles, clothing, consumer technology goods, that is going to be something that is passed on much faster to the consumer. side, the nextthe costs are going up. even on the nafta deal. you look at how auto production is being affected. that theandating source of origin for a hike -- high percentage of the components, you are trying to get a certain wage for a large part of the car production, that is raising costs. either's company -- either companies eat the cost or will -- it will be passed on to consumers. much does the possibility of a democratic possibility in the midterms change your outlook? >> if the democrats when the the house, nothing will get done in policy. congresss support from and the senate.

that means is, you look at trade. narrative, after the tax cut got through, you got a restructuring of the republican party. to get thead joined tax cut through so they had something to stand behind in the midterms, you started to see that fracturing occur. what can the president do without broad congressional support? one of the unilateral areas is trade. you can do executive orders, as he has done with the 301 investigation. it looks like that is going to continue to be something where trump can continue to give his base something that he campaigned on in 2016. he can do it by himself, especially with these carveouts. they are going through another round of 232 investigations for autos. it seems like trade will

continue to be, even more so with the democrats take the house, nothing will get done from a policy perspective. shery: 30 seconds. what do you think investors are missing at the moment? >> right now, it is late cycle. cycle, especially with all the uncertainty from things like trade and quantitative tightening, make it much more challenging to determine when the cycle is ending. with all that uncertainty, you have more volatility. as an investor, when volatility is up, i would be looking for risk adjusted returns. for this year alone, high-yield bonds have a better risk-adjusted return than the s&p 500. no the risk you are taking in your portfolio. so that your risk-adjusted returns are where you want them to be. haidi: we appreciate your time

and views. the chief strategist at argonne asset management. investors take cover again amid market volatility returning. more on what to expect as asia wakes up to the selloff. this is bloomberg. ♪

shery: i'm in new york. haidi: i'm in sydney. you are watching daybreak australia. a quick check of the latest bigness -- business flash headlines. boosted profit forecast for the year as it trims fees. revenue, a measure of fees charged to merchants surged 8% to $6.2 billion, topping analyst estimates.

blackstone continues to attract money. brought in over $24 billion last quarter, helping it to be profit expectations. income rose to 11 -- rose 11%. blackstone is bucking the private equity fund raising slowdown in hopes to reach half $1 trillion in assets early next year. a slowdown is hurting tm and see. it reported a decline nonprofits in the third quarter. they forecast fourth-quarter revenue below estimates. they are lagging the 9.5 billion average estimate. possible spending but next year to as much as $12 billion. shery: europe's biggest tech companies raising project ends -- projections on the year. sap missed profit

forecast. rose 37% in the third quarter as constant currencies. entry forbined software and cloud has been up 12%. i cannot see any signs of deceleration. we have also increased our guidance for the combined cloud and software revenue figure for the full year. what we see is an accelerated revenue missive. our cloud business continues to gain strength will are classic core license and support business is still resilient. hear more about s.a.p.'s asia business when we by the company's president, joining us on daybreak: asia. stick around. wery: let's get more on what should be watching us trading

gets underway in asia. are we going to see that grim lead continue? it started in asia yesterday. >> it is hard to work out where had has started. looking at the futures, i think the open is going to be pretty grim in asia. we have almost a full red day yesterday. there's a good chance that the open will get that as well. u.s. and out of italy and europe overnight is not what anybody in asia was wanting. it is going to be a tough start. mess, if it's a >> that would be good. it would be straightforward. , there it is a mess might be more stimulus is on the way. you could see a dump and a rebound. the other thing to remember is

that, there's a lot of new wants and these figures because there is expectations that exports will show an increased contribution. that maybe frontloading. digging down into manufacturing activity on a forward-looking basis, that will be the key takeaway for markets. is there anything there that shows that there will be resilience rather than the potential last gasp before the day luge? haidi: it has been tricky to turn around sentiment in asia. even if china data was really good, with that be enough? >> i don't think it will be. ways, this problem is very much made in america. i'm not just talking about the trade wars. i have a chart to show you. looking at what is going on with financial conditions in the u.s. and in asia outside of japan. emerging asia. that shows that while the fed's

tightening and other things have been going on globally and in it has., oil prices, taken some of the heat out of the u.s. economy by tightening conditions. a lower number here is tighter. above zero is loosening. the u.s. is still in loosening territory. asia keeps on getting tighter and tighter. will make it very hard to see a sustainable bounce from here. if we do get a bounce, you will see a lot of people saying, this is a good opportunity to sell that bounce. haidi: thank you so much for that. editor.g's cross asset you can find the chart you just showed you on the bloomberg. you can also get a roundup of the stories that you need to know to get your day going in today's edition of daybreak. bloomberg subscribers can get it

on mobile. you can customize your settings and you only get the news on industries and assets you care about. this is bloomberg. ♪

shery: you are watching daybreak: australia. was get a quick check of the latest business flash headlines. siemens are neck and neck to develop power stations, a contract worth $15 billion. intervention by the trump administration has tipped the balance in the world of ge. that itsbeen warned relationship with the u.s. could be at risk if it opts for seamen. city left almost 40% after raising 359 million u.s. dollars in an initial

public offering in new york. the gaming industry has been hit by increased officials green tea. an index of six macau gaming industries has fallen 27% so far this year. a singapore company has stumped by expanding into the energy sector. consortium led by two indonesian investors are taking a major stake with funding worth 385 million u.s. dollars. theas been racing against cost to put together a scheme to as itsize its borrowings moratorium expires around mid-december. haidi: the u.s. international trade commission is reviewing a judge's finding that fujifilm infringed upon to sony patents. the ruling said fujifilm had to patents.ated

there has been a global struggle for control of mass data storage under the standard that is used to secure long-term backup. trading in new zealand is underway. we are just a few minutes out from the staggered open. let's take a look at how we are faring so far. new zealand down by about 1%. sydney futures still looking like we could see downside of up to 1% at the open. the kiwi dollar and the aussie have seen some declines overnight. this as the bloomberg dollar index headed biggest two-day jump since the middle of august. the yen also gaining as well. the aussie and kiwi falling alongside commodities. shery: we will be discussing all of that with our guests. we will ask him about the different midterm scenarios and

what that means for the equity market. he thinks it is bullish for equities if the democrats win the house. daybreak: asia is next. ♪

haidi: a very good morning. australia markets have just opened. shery: welcome to daybreak: asia. ♪ shery: our top stories this friday. asia-pacific equities set for losses. investors weigh in trade tensions. president trump says it looks as though the saudi journalist was murdered. he is now talking about severe consequences.