haidi: good morning, i'm haidi stroud-watts in sydney. from: i'm shery ahn bloomberg's global headquarters in new york. sophie: welcome to "bloomberg daybreak: asia." haidi: our top stories, the route that he raised gains on wall street has spread to asia, pushing markets further into bear territory. investorata stoking anxiety that rising prices might

drag on economic growth. on the upside, tesla jumping in late trading after posting a rare profit. the model three is becoming one of america's best sellers. we're starting the hour with south korean third-quarter gdp numbers, it's amiss when it comes to quarter on quarter, the number coming in at .6% growth, missing expectations for .8% growth. 2% year on your coming in at with expectations of 2.3% and missing the bearish outlook. third quarter 2017 was unusually , so perhaps it's not surprising that were seeing that decline, but still seeing the decline from the high base, south korea has been having a workable time with its labor and the upside is we're

seeing that trade picture, despite the trade war and the threat to the asian supply chain , the export side of things still looking fairly resilient. shery: and it could be comforting for investors that are thinking hats the lower gdp to the bankd lead of korea not typing as fast. let's get you started with quick check of the markets close in the u.s. session. there's no consolation when it comes to help wall street close, we saw brought selloff with the dow falling more than 600 points, the s&p 500 breaking through that 2700 level. and the nasdaq falling from its -- 10% from its august tie while small caps closed at the lowest level since february. not surprising volatility was very high.

the vix finished above the 25 level, more than twice the average close for the past five months. 10-year gilts were also down again, 3.1% but treasury rally continuing as you see the flight to safety and the dollar index right now unchanged when it comes to the bloomberg dollar index, but we know this is now at the highest level this year. all of this will be felt in asia in this session. and concerns burgeoning that could push asian stocks further into bear territory. take a look at the mu down under, aussie shares continued to slide up by .8%. the auto-parts maker leading the laggards down over 9% this morning. a busy day for investors in australia as we get updates from ,antas as well as fortescue

maintaining its fiscal 2019 forecast on healthy demand from the chinese steel industry. aaa's -- has affirmed australia's aaa rating. zealand posts the biggest monthly trade deficit since records began. korean investors will have third-quarter gdp numbers to chew on. we did see that ms. when it came to estimates. and heading for a 3rd avenue losses, bracing for steven declines in japan's biggest contracts, heating at declines for cpi2% as we wait data for september. today marks the start of shinzo abe's three date trip to beijing. it will be his first trip to the city in three years. haidi: let's get you the first word news with jenna dagenhart.

enforcement agencies are investigating apparent explosive devices mail to barack obama and cnn'sy clinton as well as offices in new york city. on monday, police detonated a pipe bomb at a new york residents of billionaire george soros. president trump called the acts abhorrent. the crown prince of saudi arabia has promised justice in the murder of journalist jamal khashoggi. speaking at the kingdoms investment conference, the prince said he would bring the prevent theourt and diplomatic breach with turkey. he offered no new information about what happened in the saudi consulate in istanbul query >> it is a heinous crime that cannot be justified. today saudi arabia is carrying out all legal things to finalize the investigations, to work with

and cooperate with the turkish government and to present the perpetrators to the court and take their judgment. >> microsoft posted another quarter of revenue growth driven by cloud services, highlighting focused on in internet computing. profit topped expectations with revenue jumping 76%. ,rofits rose to $8.8 billion topping the estimates in a bloomberg poll. four days before the brazilian election, the right-winger is slipping in the polls, although he still holds a commanding lead. the latest survey gives him 57% 59%ort, downsizing from while his rival rose to 43% from 41%. a newspaper says the tax reform plan would at a yearly deficit

of more than $7 billion. 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. we have breaking news on the bloomberg, the uk's financial watchdog right now examining whether secret relationships between companies and hedge funds could have violated market abuse prohibitions. usually the financial authority does not regulate pollsters but they're responding to a bloomberg investigation back in june that details the secret work that pollsters conducted for hedge funds during the 2016 e u referendum campaign. when we got the surprise brexit vote, that caused the pound to post one of the steepest crashes of any major currency in modern history. now the financial watchdog in the u.k. saying they are

examining whether secret relationships between pollsters and hedge funds could violate market abuse prohibitions. that's really interesting. we will continue to monitor that story as develop its become available. let's take a look at the rough ride on wall street. the nasdaq slid into a correction as investor alarm over the -- as fresh economic data showed weakness in housing. su keenan is here to add some companies all this misery. su: let's go right into the bloomberg because what is key was the wild ride, is investor st. lucie got into the day, it this was thent, momentum volatility hitting a two-year high. let's go into this snapshot, it was the 18th day out of 23 that the s&p was lower.

the s&p and dow erasing gains for the year. hours, itower after was higher in the regular session. -- let's go right into losses, which 02 that texas instruments, disappointment after the bell yesterday, at&t added to the story as did general dynamics, which actually .ad more of a margin issue it beat on the numbers that had very tight margins and that was a big concern for investors. set-top box maker was up because of a report of a possible acquisition. bank stocks were down across the board in a very big way. amazon and alphabet report on thursday and many investors hope they give the bulls a reason to run. we took a look at

microsoft which was not all bad. ford also beat estimates as well, but microsoft had use their pay is that part of file we did not see such an outsize reaction? su: it was a muted reaction but we will have to see how it plays out on thursday. we did see microsoft the across the board, showing very strong cloud services performance. look at the start your today, it has been the story of strength. however, they did actually show a slowing rate of growth for the cloud and some analysts may jump on that. strongook also at ford, performance as well with the stock moving higher as much as initially, beating on sales and profits, although they did not have a 2020 target, that maybe something analysts point out as well. shery: chip stocks were on track

for their worst month in a decade. hourst's go to the after chart, it was a story of disappointment. sales in forecast falling short, that since the stocks tumbling and that will have reverberations in a thursday trait. resellers cut orders and that layers on what has been a tough story for the philadelphia semiconductor index. last time the s&p was down along the stock it was ugly. here you have the same scenario again and take a look at some of the chip stocks, the size of the losses alone in one day significant. some of the stocks were down as much as 9% in the regular session. that will be an area of focus on thursday. shery: thank you so much for that, su keenan. ons in los is ben em

angeles. always great to have you with us. today we saw the market ledoff, a flight to safety to the dollar index down near the highest level in a year. with this dollar funding squeeze , what does it bode for the u.s. economy? ben: i think were going to get continued tightening up financial conditions into the year in area the dollar plays a pivotal role because this is happened before, the economy aself hasn't seen much of deceleration, most of the data has come in fine, except for the housing. that's where i interest rates and lack of demand and affordability shows up. the strength of the dollar plays a role for the global economy and that's what is playing out

here in the markets. showing thoseart financial conditions, were seeing the equity decline contributing to tighter financial conditions. liquidityline is u.s. and the yellow line is global financial conditions, and the purple line is the fed continuing to hike rates. is the fed moving as gradually as they claim to be? ben: you could make an argument that it is not as gradual as it looks like. the fed is going to shrink its balance sheet at a faster rate than what we have seen in about a year, that will kick in, and you see this now, a bit technical but it's all to do with the shrinkage of liquidity out of the system. think the tightening is happening of it faster now and that's why the pickup in the dollar is happening.

it's all coming together here now, combined with some of the earnings stories you see today where there is indeed impact as the trade war and tariffs, it's not positive sentiment. so i think it's all coming together in this month and it looks like the worst s&p monthly loss since the 2008 crisis. haidi: there are some you way she can look at my work seeing that momentum that striving the negative sentiment. fundamentally, nothing has changed magically overnight, but it's a congregation of factors and something has just clicked when it comes to the bears. ben: it has, and people are reassessing valuations. for while we pointed out a big diversion between u.s. valuations versus emerging-market valuations, for example.

insulateds not entirely from the global route that we are going through. ultimately we will see the effects on the u.s. economy filtering through in the next year. i think it comes to the mind of the so-called bears that start and itsess valuations was subsequently decelerate. it's a juncture where were getting tight conditions in markets and therefore a lot of selloff and volatility. we started out thinking we could shift out into earnings. has it really surprised you in that the focus is still on these broad macro themes that have been playing out over the past few weeks and months? ben: i think the stock correlation with earnings was a great story from 2017 through

the first half of this year. now it starts to really wobble and we know why this is really the case. the fact that the tax cut is factored into those earnings and the adjustment is now and that the growth forecast is moderated quite a bit into 2019. think that is in the minds of stock investors. at the same time, people are looking at the economic data coming out globally. pmi data as well as the business outlook in europe was actually negative, and the sentiment that global earnings will be under pressure because u.s. companies have a lot of earnings overseas. this is what is driving the sentiment, it's not really going to go way for the time being. will see if the central banks really shift into neutral and take a different stance. shery: does it mean the end of

the bull market or does it just mean more volatility and smaller returns? ben: i think the latter. based on the earnings acceleration, we know that the tax that has really driven that. is now kind of adjusted down. i don't think we will go from of old to bear market altogether in a quick turn. the economic data has to show much more deceleration. we do our assessing it valuations and i think the relative valuation is being reconciled currently. emerging markets are where a lot of people are now looking. that is becoming attractive rather than developed markets. haidi: we always appreciate your time and your insights. ahead, the market is in a meltdown, the fed is under

pressure, the pimco managing director joins us for a look at how all of this is playing out. next, tesla ships the gear with results that smash expectations. this is bloomberg. ♪

haidi: this is "daybreak: asia." tesla we now know why brought its earnings report forward, they made a profit last quarter, just the third time it has ever done so. shares have jumped in post market trading and remember that 13% job.off tuesday's tell us about the numbers. i've before i get to that, been listening in on the earnings calls for the last 45 minutes or so. just to contextualizes, remember that elon musk has been very

combative over past earnings calls, calling out some analysts, but here he has , i'm notbeen chill sure there's any influence with of of missngs he might spoke in recent months or so, but everyone is saying he is confident, he's taking questions and seems like he knows what he is doing. of course we've seen the share price rise by about 11% or 12% in after-hours trading and the numbers on your screen be in terms of revenue and earnings, $312 million there. his is the third time in action the history of tesla that there saying they have profits. came in under estimates there, which is a good thing, and gross margins came in over. the cash burden is another thing. let's have into the bloomberg terminal and i can show you what is been happening here.

not so much right now because it turns out they have $881 million in free cash flow. compare that to the estimate $280 million. so they are $600 million plus in terms of that free cash flow. here we can also see that they had been running out seven or eight months in terms of what money they have moving forward, once this feels in for the next quarter we might expect it to rise again. but the cash on hand they also have is amazing. $3 billion there, and production 4300 cars al three, week on average. if there was anything to poke at , 5000 is the number we been talking about, but it's enough to make money and in the last week of the third quarter, they did hit 5300 -- 5300. it on musk on the earnings call

was saying he sees positive cash flow every single quarter moving forward, aside from any month they might have to make a debt repayment. haidi: despite all the good news, tesla did catch one negative headline for the model s. what is going on there? it has to do with consumer reports, coming out with its reliability surveyed it happens every year. it said it's giving the model as a below average rating, in effect taking away its recommendation. for the model three, the good news is there keeping that at an average which means it keeps its recommendation as well. it's talkingl s, about suspension problems, issues with door handles, and withhe model x, the suv the falcon wing doors, there are issues there which is much worse than average. take a look on your screen, in

terms of the universal cars out there, the terms out that american cars -- turns out that american cars did far worse than any other cars out there. japanese cars, five of the top six were the best, and 11 of the 12 worst were americans. haidi: thank you so much for that. get a roundup of the stories you need to get your day going in today's edition of daybreak. wiping out all the gains for the year when it comes to the s&p and the dow. territoryets in their , not a great deal of positive sentiment to be found. it's also available on the bloomberg and you can customize your settings and just get the news on the industries and assets that you care about. this is bloomberg. ♪

shery: let's get a quick check

of the latest business flash headlines. broadcom said to be under antitrust scrutiny in european union for using its market dominance to pressure buyers to use its chips. the increase focus on sale of chips in set-top boxes used by the cable and satellite industry. we're told u.s. regulators are examining broadcom sales practices. daimler is moving into ride-hailing. it will work to take on the market leader in a 50-50 venture aimed at high level users. terms of the deal have not been released but the government said they will use luxury cars as well as top in cars. haidi: coming up next, we will speak with pimco's head of public policy as we count down

to the key midterm elections in the u.s. this is bloomberg. ♪

it's 10:30 a.m. here in sydney, markets have been trading for about 30 minutes. on the cusp of entering a bear market for the s&p. rest of asia faring just as when itwe had a miss comes to south korean gdp, a number of seasonal factors could be blamed but certainly not adding to any kind of positive sentiment in the asian trading session. you're watching "daybreak: asia." shery: here in new york, markets closed down. take a look at the s&p 500,

breaking below the 2700 level. it was in indiscriminate selloff , the nasdaq also entering construct -- reconstruction territory. let's get the first word news with jenna dagenhart. >> the nikkei financial watchdog is examining whether relationships by late market abuse prohibitions. surprise both salt the pound suffer when the steepest crashes in modern history could u.k. prominence are theresa may has arrived a meeting with lawmakers as they express loyalty to her rather than frustration in her brexit plan. she told a backbench committee they must hold their nerve while she pursues a deal with the european union. her cabinet is deeply split on keeping the u.k. in the customs

union in definitely to avoid a hard border with ireland. and some improvement in north american sales, but forced to jettison its goal by the end of the decade. adjusted earnings fell $.29 a share in the last quarter, down from $.44 a year earlier. forehead launched $11 billion overhaul to replace its aging lineup while moving into autonomous driving a car sharing. tim cook has attacked tech rivals for collecting user data. at an e.u. privacy conference in brussels, he sought to distance apple companies that routinely harvest information such as google and facebook. he has long criticized them for harvesting data for advertising while apple says it retains as little as possible. companies should challenge

themselves not to collected in the first place. the rush to knowledge. users should always know what data is being collected and what is being collected four. it is the only way to empower users to decide if the collection is legitimate and what is not. anything less is a shame. shery: 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. healthyet's check in on markets are faring. sophie is in hong kong. sophie: we are seeing indiscriminate selling when it the aussie sharemarket being led lower by

tech and materials off by 2%. it slides toward the fifth that losses. an ugly day for asia. taking a look at what's make the moves on the asx 200, we have a skin number of gainers, with a few gold miners tracking the declines we see. we want to highlight jb hi-fi, up .7%, rising after itself update ports australia business coming in at 5.2% for the first quarter. 100 stocks on the decline, and i want to highlight fortescue, sliding by as much as 4% earlier in the session. did have it come out with its mest quarter update, it did shipment estimates and

maintaining its forecast of 173 million tons of iron ore. steve declines for japanese and korean shares, and investors will have those of the third-quarter spreads to chew on. we had some key earnings coming , continuing demand for smartphones and server customers providing a boost. the chipmaker did see uncertainty in the dram space, but it's on the rise thanks to trade tensions and prospects of a rate hike. also in the lineup, hyundai motor and lg electronics, the other big names to report. shery: thank you so much for

that. cited a risings stock market is proved that his administration's economic policies are working. now as stock prices tumble, president trump is targeting jerome powell and the fed rate rises. trill,bring in libby can who's joining us from hong kong. that's get started with the market selloff. and the president actually decouple himself from all this selling, if the first claimed that he took credit for the surge? libby: thanks so much for having me, i'm issue all from new york but we have a uniform the of the hong kong harbor here. president trump may have regretted hitching his success to the success of the stock volatility.n market but don't underestimate his ability to pivot.

i think he will likely pivot away from the stock market and focus on some other economic metrics. they peak, but they certainly have been strong. his emphasis maybe less on financial markets and more on real economic growth. the bottom line is, don't underestimate his ability to market himself and to pivot for what is working for him. shery: does that mean president trump blaming the fed could work with voters? i don't think most voters view the fed as sort of a kitchen table issue, so to speak. i think for the common voter, the fed is a pretty amorphous body. rising interest rates to affect consumers in terms of mortgage rates and consumer loans and what have you, but i don't

necessarily think that all this talk is really landing with voters. with policymakers, it it is making them more concerned that president trump may at least threaten to do something with the fed. it's also important to remember that in terms of what the president can actually do with the fed, it's relatively limited. moreess has jurisdiction over the monetary policy approach in terms of the dual mandate and a president cannot change that. he can of course nominate subject too the fed, senate confirmation. he legally might be able to terminate a governor, although the law is silent on the chairmanship. practically speaking, he can job on and try to influence the fed and try toawbone influence the fed.

but he can't really do very much. he can talk a lot in terms of going on twitter and these campaign rallies, you've seen some of the people he has criticized. he's been very critical of the obamas, hillary clinton and i'm looking at the story when it comes to these pipe bomb sent out to these individuals. what does that tell you about how divided american society is going into these midterms? saddened to see when we welcome here in asia those same headlines. unfortunately, it's not unusual. this isn't unique. you have to remember that steve scalise, the third ranking member in the republican house of representatives was shot at a baseball game in the district not too long ago.

this is unfortunately the start of violence and bipartisan -- and it is an indication of how polarized our country is. i think president trump in many ways just sort of picked up on that. ison't necessarily think he because, he is just a general symptom of how divided folks are and this most recent violence is just another piece of evidence of that. d expect meaningful change when it comes to policy him and depending on the outcome of the midterms? do you think the fundamental policies when it comes to portrayedowards china , will that likely see any change? question,s a great and base case, if you looking at and whatendents

they're saying, we will likely have a split congress. no one knows for sure, it will depend on who turns out to vote, which was evidenced in 2016. assuming you have a democratic house and a republican senate, he will likely see more gridlock , but as it relates to trade policy, it's an excellent point you bring up, that trade policy is divorced from the midterm election outcome. that's because especially as it relates to china, in washington there is pretty broad bipartisan consensus that china has been a bad actor, they have not necessarily adhered to the wto rules, they are now the second largest economy and yet they don't necessarily need to adhere to the same rules of the road as other developed countries. so there is consensus on a bipartisan basis that we should try to rectify the economic elation chip with china, and i

don't think that changes regardless of the election outcomes. and we do want to get your take on trade more when it comes to china and mexico and nafta 2.0. president trump has now mentioned a tax package 2.0. is that viable once you get a divided congress? it threw everyone a little bit offguard that president trump was talking taxt how there would be a bill enacted in the next two weeks. i think he misspoke on what he meant, it sounded like the white house is working on a plan to proposed congress, but as you one, thegress is the entity that needs to pass legislation. while there may be headlines about a tax 2.0 package in a new

session of congress, it seems just given the deficit dynamic that it will be very difficult, especially if democrats take the house. even if republicans keep both chambers of congress, it will be difficult to see a deficit finance tax package. you have to pay for it by offsetting spending cuts. i don't see there being the political will to do that. , this is more of a political talking point than a ubstantive policy proposal. haidi: it would be hard to argue the economic requirement for that either. libby: i think president trump in some ways is responding to tax 1.0 wasm that primarily focused on corporate interests.

it took down the corporate statutory tax rate. there was some of the -- individual tax relief that is responding to the criticism that there was not enough for the middle class. having his finger on the electric, he's realizing that maybe he needs to at least talk about something that would be more beneficial to the middle class. but again, i don't think we are going to see that, given the deficit dynamics in the united states. about,lots more to talk us in hong kong. we have plenty more to talk about on "daybreak: asia." this is bloomberg. ♪

shery: this is "daybreak: asia." haidi: investors run for safety on global, economic, and geopolitical concerns.

what is driving sentiment right now? is still with us. many say nothing has fundamentally changed magically overnight, but were seeing a deterioration of sentiment happen very quickly. is this surprising to you or is it the reversion you would expect in an aging bull market? talking a loteen about this in turley at pimco and with our clients and externally, that while the u.s. in particular has been growing in a very solid way, fueled in part by fiscal stimulus, but the tax bill and a government spending bill that was passed earlier this year, perhaps growth was peaking in the united states. how to say that we are at the end of the expansion, but maybe we are getting closer to the end. priced forions

perfection in many ways, with trade concerns weighing on animal spirits, with geopolitical concerns, i don't think it's necessarily that surprising to the folks at pimco. macro thingse becoming more important are influential than earnings news? we were thinking we could shift our attention to fundamentals but that correlation has not really played out. we are more fixed income investors and not necessarily equity investors. that macro things always matter, especially in fixed income markets, but we are seeing that now, the spillover to equity markets in certain sectors. where there is strong corporate , that some of the macro concerns are weighing on business confidence and refining

that in the earnings guide and what have you. i think it depends on which markets you're talking about but the fixed income markets will focus on these macro themes for a while now. shery: in this environment, if you don't get a breakthrough between president trump and president xi next month, how important is it that you can actually get something done in this meeting? a positiveink it is sign that they are meeting, even though there had been reports several weeks ago that the meeting has been confirmed come those were not true. these were just confirmed by the white house two days ago. the fact that there is going to be a face-to-face meeting is certainly a positive sign. however, you know my views on this, i'm skeptical that we see a breakthrough for the very reason that unlike nafta or the european trading relations, the

things we are asking for from china or so structural and inherent in their industrial it seems like it would be difficult to imagine a scenario where they start making those concessions at this point. not to say that they never do, but at this point, it feels like we are pretty far off from having a deal to make a deal and the best thing that could happen out of that meeting is the pleasantries between president and aand president xi promise to keep on talking, but i'm skeptical that we see a major breakthrough in just a matter of weeks. shery: and who will be doing the talking behind the scenes? libby: we know the treasury department has a good relationship with many of the chinese economic advisers and we that-- it's exaggerated

the two countries are not talking at all. we talked to china constantly. it just depends on who you are talking about, and who is doing the talking. you want to see the higher-level and trump and xi haven't met for more than it year now. you cannot underestimate president trump's own kind of personal affinity for president xi. we know he has a very strong affection for him. anything can happen, but given the structural things the administration wants from china, i think we are pretty far from a deal. shery: what about the deal with mexico and canada, nafta 2.0? is it looking more likely that nothing will be done here? libby: it's a great point,

because i think the markets have now just assumed that given that the deal has been agreed upon it wille is a chance not be fined if steel and aluminum terrorists continue to be an issue, assuming it assigned by the end of november, it's not necessarily a done deal. it still needs to be ratified by congress, especially if the democrats take -- take back the house. i cannot imagine democrats just accepting a trade deal that the president negotiated without insisting on reopening and putting in some more labor provisions, for instance. i think we could see more headline risk going into 2019 regarding nafta 2.0 and even if the president threatens withdrawal again, that's a tactic he feels like provides over u.s.everage

congress. shery: always great to have you with us, thank you so much. call me when you're back in new york. more ahead on "daybreak: asia." this is bloomberg. ♪

haidi: this is "daybreak: asia." ahn in newshery york. let's see how things are shaping up at the markets in asia. sophie: there may be few places to hide as the risk of mood is set to engulf asian stocks. some strategists are keeping the faith. investments spoke of improving corporate governance and opening up the labor market

foreigners as a reason for optimism. the aussie dollar had a horrible year, showing no sign of easing up. we have korean economic indicators pointing south. the slowest year on your case since 2009. samsung reporting third-quarter operating profits that missed estimates. estimates for dram demand as well as profits and rate hikes, so the kospi could be underwater this thursday. haidi: let's stick with some of the underperformers in the kospi . , one boybout k-pop

band hit the top of the market and everything is of the moment when it comes to this group. their shares in korea have not been at that level of popularity. take a look at this chart, shares of the talent aji that presents these groups sliding a record 20% in seoul on wednesday, almost a $5 billion industry, imagine if the trade war continues, there's hopes that the cultural export side of things will still hold up. shery: it says a lot when your mother talks about bts. my mother said they are making such a splash in the u.s., and i said who is bts? i have to get caught up with korean pop, a huge industry as

you mentioned. we learn something every day. more ahead on "daybreak: asia." hipi: we are clearly not as as our parents. lots more coming up. this is bloomberg. ♪

haidi: good morning, asian major markets have just opened for trade in sydney. shery: i'm shery ahn in new york. sophie: and i'm sophie kamaruddin in hong kong. welcome to "daybreak: asia." haidi: these are the top stories this thursday. pushing markets further into bear territory. heading for the worst month in over six years.

profit fora rare tesla, the model three is becoming one of america's best sellers. the big story, the huge selloff on wall street. with all the dow and s&p 500 erased this year's gains. the nasdaq composite entering a correction territory, not surprising that were seen asia in early trading -- >> asian stocks are being engulfed in further selling, injuring bear market territory and pushing deeper into that space. the nikkei 225 opening one 18% lower here this morning. the cost be also underwater, down by 2.4%. a slew of earnings out from korea as well. updates from others

and investors will have to significant missing growth to .hew on over in australia we do have shared heading for a fifth day miners -- among the laggards, fortescue falling as much as 414%. over in new zealand were seeing stocks down 1.5%. the new zealand trade deficit coming in at the widest on record. the kiwi dollar under pressure and the korean won back above the update we got. session soke a ugly far. haidi: ugly indeed. let's get first word news with jenna dagenhart.

enforcement agencies are investigating apparent explosive vices mail to barack obama and hillary clinton as well as the cnn offices in new york city. police detonated a pipe bomb at the residence of george soros. president trump call the ax abhorrent and the cnn boss jeff ander said the president his press secretary failed to understand the seriousness of their attacks on the media. the crown prince of saudi arabia has promised justice in the murder of journalist jamal khashoggi. speaking at the kingdoms investment conference, the print said he would bring the killers to court and prevent a diplomatic breach with turkey. he denounced the crime but offered no new information about what happened in the saudi consulate in istanbul. >> it is a heinous crime that cannot be justified. today saudi arabia is carrying out all legal things to finalize the investigations and work with

the turkish government to present the perpetrators to the and take their judgment. >> u.k. financial watchdog is examining whether the relationship between polling companies and hedge funds by late market abuse prohibitions. it follows a bloomberg investigation that detailed secret holds for hedge funds during the 2016 budget referendum campaign. it's all the british pound supper one of the steepest crashes of any major currency in modern history. the tpp ad has given boost, ratifying the company into than progressive agreement and taking to for the number of countries that have already adopted the accord. new zealand joins japan, mexico, and singapore who have already ratified. australia and canada are expected to join them soon. said minister david parker tariffs and higher exports

should begin early next year. 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. let's look at what markets will be moved today, great to have you with us. bad, i'mooking pretty wondering if the bears in this part of the world are going to welcome americans. quick thanks for joining our picnic. it turns out we got some fresh supplies. it has been looking grim in asia for a while, and to be honest, the american meltdown, if that's what it is, the loss of confidence when it comes to equities is kind of the last thing that was needed because we

did have signs that china was acting to turn around its markets. you had some hoax that with abe getting his -- you had hopes getting his third term and all those green shoots have been wiped out by what is happening in the u.s. how blessed plane would happen in the u.s. overnight. a lot of analysts are scratching their heads saying that nothing fundamentally changed overnight, but it seems like a perfect storm caused this to continue to happen. definitely the big question right now. the thing people are trying to disentangle is whether this is a technically driven selloff as we see people reduce positions that are most exposed to interest rates, and some exposure to duration as well. here this week there was a rumor of a large portfolio rebalancing

in after hours, being a polite euphemism there. what we saw yesterday leaves the question open, is it technically is it investors starting to worry about something fundamentally changing in the u.s. economy. it's worth pointing out that the selloff seems to accelerate shortly after we have the latest home data on new housing sales. with had about four months of bad u.s. housing data. you're thinking housing in the u.s. is starting to deteriorate, maybe that says something about the strength of the u.s. economy in the face of rising rates. shery: garfield, will this be temporary for japan, because were seeing some positive corporate earnings, not to mention a weaker yen, despite the fact that it has been strengthening recently. garfield: the difficulty is that

it is another set up where hoax has been fostered by a rebound, the nikkei had been alone almost across asia in breaking out of the down trend. if china was still down, korea was down, but japan had lifted above some of the highs earlier from the year and was heading for that january high. so you had some hope fostered their that japan was fixed, so to speak. now it's being slammed back down. the yen is on the cusp of potentially some serious gains which would unwind things. i think you're right to point out japan as a key area of concern. it helped to lead the rebound a couple of weeks ago. if it cannot recover, that's going to spread a lot of fear across asia. shery: and of course the fear

right now is if you see concerns about global economic growth, concerns about financial markets, and fed tightening, you could see a stronger dollar which could affect all these emerging markets. do we know if this point what the consensus on the direction of the greenback? consensus is probably lacking but your right to focus on the u.s. dollar. yesterday's selloff, i mention the housing data but if you're trying to find one other trigger, you could do worse than looking at the bloomberg dollar index which had a fairly big surge. lots of people are starting to pour into safe havens such as the u.s. dollar and u.s. treasury. even the japanese yen is catching a little bit of a bit now. it had been left out of the recent haven buying. that points to a new development in the selloff is what we had earlier work risk positions being sold but you didn't have

to haven buying that suggested a lot of panic and worries in the market. that changed yesterday. one other point i would leave you with, i mentioned the housing data. there's an interesting question you can ask now about whether or not the fed starts to look at the recent market carnage and starts to recalibrate its path for rising rates. we both remember a few years ago , we used to say that bad news was good news in the market because the assumption was that the fed would hold off on raising rates will we saw soft data come out of the u.s.. some people are starting to talk about that again. i feel like when you start looking at china as being the last man standing, will be different. garfield: the difficulty is that the u.s. meltdown boards selloff

-- or selloff is not going to be appreciated by china investors. we just had the good news of the pboc coming in to resolve the bad news, now we have a situation where the u.s. bad news will overwhelm that, and it's anybody who bought into the cavalry coming, they are now worried that the cavalry are wearing the wrong uniforms and we are in more trouble than we thought. haidi: maybe it's more of a staggered deployment of weaponry. garfield reynolds and tracy alloway joining us out of hong kong. the only good news when it comes to the u.s. markets, thes turn to tesla now, electric car company actually making some money. that has only happened two other times in the country -- in the company's history.

turbocharged in the post-market. you've been listening to the earnings call with elon musk. is there anything that stood out? ramy: his own personality, for one. in the past, he was combative, brash and rambling. this one he was very focused and subdued. he has reason to be because of the hugely strong numbers. beats the much across the board when you look at revenue, earnings per share, capital expenditure, as well as gross margins. look at all of those. $2.90 a share, that is a positive. the estimate was for a loss of $.15 a share. revenue came in at $6.8 billion. in terms of a profit, tesla made

$312 million. hop into the bloomberg terminal because i want to tell you about free cash flow. the company said it had $881 million in free cash flow. the estimate was for $280 million. so are seeing a difference to the plus side of $600 million. we can see the money it has on hand in order to stay in operating circumstances is about in seven or eight months, we might expect this quarter to fill in higher than we been seeing over the past several quarters. tesla said it had $3 billion of cash on hand. i seem to not be able to find much of anything that is negative to find about this company in the third quarter. production, 4300 cars on average a week. the target we have been talking about all this year is 5000 cars

on average. in the last week of the third quarter, it hit 5300. so even though there's a bit of negativity, it's still very positive looking ahead for the fourth quarter and beyond. elon musk is saying he expects positive cash flow for every single quarter moving forward, unless they have to do a debt repayment, they are looking at positive profits, positive cash pacific for our asian viewers, they're saying the model three to be coming to your shores in the second quarter, if not the first. you did manage to find one negative headlines out of all this. ramy: i guess i am debbie downer, sorry. it had to do with consumer reports. but looking at the share price, there wasn't much of a negative coming out of that.

consumer reports is talking car, not asdel s famous as its model three cousin. but consumer reports said it's giving a below average rating on coupleel s because of a of issues, suspension problems and issues with door handles. but the model three still has an average rating and it keeps that recommendation. theconsumer reports ranking reliability of the car brands out there. top five, it turns out that five of the top six brands in the world are actually japanese cars. as i've been saying, it pains me to say this as an american that 11 of the worst 12 on that consumer reports list are all from the united states.

, thisoking at tesla clearly is a huge win. the question moving ahead and looking ahead to the active trading session is whether elon musk and tesla can keep this going. can they sustain this into the future and can they get away from all the negative headlines that elon musk has been shooting himself in the foot. haidi: can he just a out of trouble. ahead, a moody's economist joins us to talk about the dark trade clouds that continue to hang over asia. shery: our next guest says emerging market still hold a valuation advantage and its growing. that's coming up. this is bloomberg. ♪

haidi: we're seeing a pretty in earlyure here trading in the asia-pacific. a number of markets have capitulated to a bear market territory. stocks pretty much on the cusp and the nikkei 225 seeing some of the steepest declines. were seeing the yen seeing the by andof that safe haven a bit of a bit of in gold as well. here in australia where the edge of a bear market there, seeing declines of 2% there, pretty widespread selling, not a great deal of discrimination when it comes to the different sectors. seeing declines of about 1.5% there. this is "daybreak: asia." shery: i'm shery ahn in new york. i next guest says investors with

a long-term view should maintain .trategic exposure to em stocks stay active and focus on fundamentals. rting and sophie kamaruddin joining us there. we continue to see the selloff environment jitters across economies, concerns over will thatlowdowns, just boost the dollar, and wanted become a challenge for emerging market to gain ground? be seeing they beginning of a rotation back to emerging markets, at least in relative terms. the nikkei down 3% and the kospi down just 2%. in the u.s. are seeing disappointment this week. the price you pay for the u.s. market is 50% higher than emerging markets. investors are starting to wake up and see they've made money in

the u.s. or at least not lost any this year. down 17% even though earnings growth will be strong again next year. you will see some rotation back. you need basically three things, a weaker u.s. dollar, some sort of circuit breaker, and ideally you need a fed that is a lot less hawkish than it is right now. barring the fact that we may not get any of those things, are there sectors or market specific geographies that are little bit more sheltered from the story of the trade war? morgan: we see great opportunities in select energy companies in emerging markets. energy is not subject to tariffs really anywhere. 12% thisup 11% or year. these are companies with strong

intrinsic cash flows that are paying out high dividends in trading at low multiples. we think that will continue even in the face of some weakness in oil prices because of their low cost of production. when it comes to problems on the em landscape, china is one of the big bugbears there. we see measures taken to ensure they have some sort of stability , but when it comes to sectors you're seeing of funding squeeze for the private sector. is a liquidity crisis underway? morgan: investors in china have been concerned about the shadow banking system and some defaults in the corporate bond market. 0.25%, sot rate is rate you findthe in the u.s. market for defaults are also very low levels. the chinese market is not used

to having any default at all. it is digesting things for the first time in transitioning to a more normal state of affairs for functioning capital markets. that is a shock for many investors. the trump-xi have meeting schedule but some are saying it will not be that big a deal. what is your expectation at the meeting? has been progress in the so-called trade war in countries apart from china. the u.s. started the year picking fights with almost everybody in the world. we've seen a bilateral agreement with south korea, and the u.s. announced the intention to negotiate new treaties with the u.k., europe, and japan. in the case of china, at least you have the tariffs in place and you know more are coming. businesses can operate with greater certainty and they can start to invest again, knowing

what the terms will be. haidi: lots more to come here on "daybreak: asia." this is bloomberg. ♪

shery: let's get a quick check of the latest business flash headlines. said it's been accessed illegally, raising concerns of vulnerability to cyber activity. it says is no evidence of misuse. an operating profit of 5.7 million u.s. dollars, beating average analyst forecast by almost 3%.

to $10.1 billion and was a narrow miss on estimates. shery: bmp shares opened lower unit fors of celebrate $2.3 billion. it was thrown into crisis in april after admitting it misled a previous banking regulator. with thed going down broader market, the asx 200 just a hair away from a bear market. already in bear territory while the msci asia-pacific index already down more than 20%. not helping confidence is the fact that we saw third-quarter gdp growth in south korea missing estimates, growing at the slowest pace since 2009. kiwi stocks also down 1.4%. forin all, a very bad day

bulls in equities in the asia session. many more to come. this is bloomberg. ♪

haidi: it's 8:30 in hong kong, we are one hour away from the open of trading. hard to see any bright spots coming through from asia going into the open of trading in china and hong kong. china yesterday was one of the few markets that managed to keep its head above water on the hopes that the calvary will be arriving and the stimulus support will be coming through to support sentiment. elsewhere around the region, we see some really steep losses, namely japan, the kospi on the cusp of their territory. haidi stroud-watts in sydney, i'm joined by shery ahn. i have to put the blame on the u.s., given the state of the selloff spread there are some pretty idiosyncratic troubles.

shery: every time asia wants to pull us back up, wall street brings us down. the nikkei now losing more than 3%. the japanese yen also strengthening. we have the strength of the u.s. dollar. you see those safe haven moves happening. let's get to the first word news with jenna dagenhart. of saudie crown prince arabia has promised justice in the murder of jamal khashoggi. speaking at the kingdom's investment conference, mohammad bin salman said he would bring the killers to court and prevent a diplomatic breach with turkey. he denounced the crime, but offered no new information about what happened in the saudi consulate in this demo. may prime minister theresa survived a meeting with conservative lawmakers as they expressed loyalty to her and frustration at her brexit plan. she said they must hold their nerve while she pursues the deal with the european union.

deeply spent on keeping the u.k. and customs union indefinitely to avoid a hard border with ireland. days before the brazilian election runoff, one candidate is slipping in the polls. he holds a commanding lead. the latest survey gives him 57% , climbing from 59%. his rival rose to 43% from 41%. his tax reform plan that would add a yearly deficit of more than $7 billion. new zealand has given the tdp a boost, ratifying the comprehensive agreement and taking the number of countries that adopted the accord. new zealand joins japan, mexico, and singapore, who have already ratified. australia and canada are expected to join them soon. tariff cuts and higher exports

should begin early next year. apple loss. tim cook tech rivals for collecting user data. an eu privacy conference in brussels, he sought to distance apple from companies that routinely harvested information with google and facebook. cook has long criticized them for harvesting data. apple says it retains as little as possible. >> not to collect it in the first place. you should always know what data is being collected and what it is being collected for. it is the only way to empower the users to decide what collection is legitimate and what isn't. anything not is a shame.

jenna: global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than one edge of 20 countries. i'm jenna dagenhart, this is bloomberg. haidi: let's get a look at how asian markets have progressed so far this pretty awful morning. sophie is in hong kong with a look at the damage. sophie: 1 -- awful is one way to put it. the dominoes are falling. bonds are tracking treasuries higher. the yen back below 112 amid this move. we had the disappointing gdp report from korea weighing on totiment to the kospi, set close in bear market territory, off by 2.2%. kiwi shares underwater. dropped to225 has the lowest level since april, with electronic makers dragging the most in tokyo. portfolios are being adjusted against the black drop of

sliding -- backdrop of sliding chip stocks. onwe look at what is going with the likes of samsung, electronics, off by over 3% this morning. we did have high vix morning of a weakening demand of deram chips. playershave other reporting results this morning, the likes of samsung, sds, neighbor court, both stocks under pressure. sharp is under pressure after reporting its half-year earnings. demand for lcd tv's weakened in china. i also want to highlight line corp., falling 10% after a surprise loss for the third quarter. a lot of the pain is concentrated in the chip space. sk high of the key factors after its report card. shery: sophie kamaruddin, thank

you so much. south korea's economy grew more thely than expected during third quarter. construction and facility investment declined, exports continue to grow. kathleen hays joining us now. any time we see some weak data, we go to first is it because of the trade war? exports seem to be doing fine. kathleen: they have slowed, but i think it is important bloomberg economics, even ahead of this release, we pointed out that last year in this quarter, south korea gdp growth was 3.8%. when you look at it year-over-year, you get a slowdown from 2.8% to 2.0%. to 0.6%.w from 0.8% if we look at what's happening in korea, it's not so much that exports. i want to show you one of the charts. if you look at the year-over-year number, down

8.2%. in this third quarter, experts -- exports did add. these were still well into the green. you had a pullback, maybe that's a one-time thing. there are also questions about the labor market, just how strong it is. the bank of korea said it may keep hiking rates. there may be another rate hike in november. for now, it's understandable we are also in the midst of a global market selloff of all of the exports dependency in nations like korea. is not surprising to see people putting more attention on this than they would otherwise. maybe it is warranted, maybe you can't take too much for granted. shery: some people were saying korea was being too ambitious a when it came to the bank of korea raising rates so they should slowdown. it's quite difficult to do when you have the fed tightening and continuing to hike rates. kathleen: i think people are wondering -- if it is ambitious,

especially after the drops in home sales, is it a red flag? new home sales are at their lowest in two years, mortgage rates are rising. will this put more onus on the fed to think twice about what they are doing? the president cleveland spoke at a forecasters meeting club today, she did agree to a question about financial tightening. she said we will put more weight on that. they don't seem to be overly tight. more people -- one said maybe a stock market drop of 30% maybe get -- make it the stock market attention. the fed thought it was going to start raising rates, china stocks rolled off, u.s. stocks --d off,

they need to make a move because they don't want to act like their cow told the president. haidi: we are also watching the turkish and central-bank. how times have changed. they are still a geopolitical headline geopolitical headlines being made by turkey, but not after the pressure with the standoff

with the u.s. does that alleviate pressure on the central bank? kathleen: it alleviated a lot of pressure because they were right in the middle of a huge selloff in their currency. the release of this u.s. pastor facing espionage charges -- in september, the bank of turkey made the big 675 basis point increase in rates to 24%. that stabilized the lira and got stronger. the move by the turks to led the pastor go -- let'the pastor go you can see the yellow line how we continue to strengthen over the next month. that was still not so strong. the problem for turkey, here's the dilemma. what they want to signal coming out of the meeting, their inflation rates is five times higher than the target rate of 5%. it's hard for them to start using, even though they have positive -- easing, even though they have positive signals coming from their economy. at this point, people think the bank will sit tight, no rate hike, maybe not even a signal. is 2003, look at that line inflation and how it is all focused at the far right-hand side. that's because the weakness in the lira will shove the inflation rate higher. the best the bank of turkey can do is hope this works and the

lira continues to strengthen. and they will get a handle on the high inflation rate. haidi: kathleen hays in new york. shinzo abe has to beijing today for a landmark visit as prompted by share concerns. he will meet with president xi jinping in a dramatic warning of relations after some pretty frosty months. our asian government reporter, isabel reynolds, joins us. this trip comes at a particularly significant time, why? becausethat is true, those countries are in trim -- under tremendous pressure from trade.trump over in that situation, with japan as its major ally, and china its major trading partner, they are looking for other friends in the region. they fully understand the significance. you have to look back six years when abe took office amidst an outbreak of people fearing -- a

fear that outbreak could -- were could happen. managed to gradually reduce tension. they had mutual visits. this was really taking things up to the next level. in previous meetings, you reluctant.i looking but now china is rolling out the red carpet for the japanese prime minister. that is significant in itself. a big historical issue between the two of them. expect?uld we they are getting together because of these trade tensions with the u.s. should we expect more progress on their trade relationships? if thatwe don't know will happen directly. they are both part of the asset negotiations that have been moving slowly, in terms of the region. we don't know when they will reach an agreement. they will be looking to work economic, they are

taking a business delegation of at least 500 people that will be a big form. they will discuss working jointly on infrastructure projects in countries such as thailand. we are expecting, according to the newspaper, about 50 deals to come out of that situation. they will also talk about more general things. they will revive a arrangement that has been dormant since 2013. they will sign an agreement on clamping down on market manipulation. perhaps more importantly, they will discuss confidence building matters, such as revising military exchanges, and potentially setting up a hotline to avoid any military clashes around the islands. that is important to look out for. shery: thank you so much. bloomberg asia government reporter isabel reynolds in tokyo. coming up next, we talk pride and protectionism.

take cochran gives us his on how u.s. trade policy impacts asia. this is bloomberg. ♪

shery: a down day for equity markets across asia. the nikkei fell 3%. the japanese yen gained ground as investors are flocking to save havens. the cost be is down 2%, entering a bear market. the asx 200 is falling for a fifth consecutive session. 1.4%.k also down equity is really having a bad day. macros, we keep returning to the trade war. implications for chinese, and a global slowdown, playing into sentiment as we see the selloff spreading from u.s. to asia.

tradext guest says u.s. policy has potential to do more harm than good to america manufacturing and the broader theomy, particularly if protectionist moves are implemented by the u.s., or if it's trading partners begin to retaliate. let's talk about that with moody's analytics chief stephen program -- steve cochran. we are starting to see a retaliation. china has been measured in its responses in the beginning. we are seeing a tit-for-tat. the implications for the asian supply chains, not just for china, not just for the u.s., are pretty significant. steve: they are pretty significant. the important thing to remember is despite all of the volatility in the equity markets, the global economy is quite strong. while tariffs will damage the economy and slow the global economy, if they stay where they are right now, the impact will not be too great. the bigger impact would be if we

went well beyond where tariffs are today and say if they were placed on all trade between the u.s. and china. i think we have a major impact that would be felt in the u.s., china, and across the rest of asia. haidi: that scenario, the doubling down, isn't out of the realm of possibility. i would say since may be a couple of months ago, it is looking more likely, given we don't have expectations of a circuit breaker in this relationship. steven: it is more likely. a scenario one could easily lay out would be that we have the current tariffs in place today , the ones implemented a couple of weeks ago, 10% tariffs on about $200 billion worth of therts into the u.s. with possibility of a hike to 25% in january.

i can see that playing out. there isn't much movement, in terms of negotiations between the two sides right now. we can see that tariffs rise to 25% beginning of next year. that would begin to create some pinpoints -- pain point in china and the u.s. maybe it leads to the beginning of some realistic negotiation, something along the lines of what we have seen between the u.s. and its north american trading partners. perhaps coming to some agreement where the additional tariffs can come to a halt. shery: even before going as far as the worst-case scenario, even looking at things right now, we are already taking a look at the impact on chinese stock markets, investor sentiment, consumer sentiment also being heard. even if things stay like they are right now, what would be the impact on economic growth and financial markets in china and

the rest of asia? steven: the uncertainty is really important. one of the impacts to china would be if manufacturing goods exported to the u.s. were at a higher cost, demand would falter, and it would likely lead to slower job growth in china. of a losss any fear of jobs for higher wages in china that hits consumer sentiment, and it could hit consumer spending. that would have a pretty strong impact on the chinese economy. we're already seeing consumer sentiment and spending began to falter in china. that would be the immediate and most direct impact on the chinese economy. shery: i'm not sure if you follow baseball, but we have this story on the bloomberg. the world series now getting underway, even baseball caps in the u.s. were getting really expensive, because they were

all coming from china. when -- are consumers already feeling the impact? how much worse could it get," depending on the different trade scenarios -- could get, depending on the different trade scenarios? steven: this is where the impact in the u.s. could be greater than the u.s. -- then china. we are already beginning to see an impact on consumer prices. if consumers have to spend more on goods that are imported from china, there is less left over to spend on other kinds of goods and services in the u.s. on to that the effect manufacturers of having to pay more for imported the media goods that go into the production process. you get an impact on both consumer spending and profitability for manufacturers in the u.s.. that's the double hit. if there's continued uncertainty across the globe, continued

flight to safety, in terms of capital shifting towards u.s. treasuries, that could add strength to the u.s. dollar and make it difficult for u.s. manufacturers to export. a multifaceted impact on the u.s. economy that would be palpable, particularly if we went to the worst-case scenario, where there were tariffs on all goods traded between china and the u.s. haidi: we have seen asian policymakers, central-bank makers, react to the aspect of the slowdown, particularly when you take a look of the pboc. is it likely in the economic modeling that you use that they will have to respond? is the expectation that there will be an impact from the inflationary aspect of tariffs, of what happens in the mid to them longer-term's -- the mid- to longer terms, or if the lie will be so much that it will not

be easily seen in the numbers? steven: the biggest threat longer-term is the threat to productivity. of goodsnufacturer moves to locations where they compare -- the competitive advantage is less than today, then productivity growth has potential to slow. that is one of the biggest problems in the global economy today, really over the last 10 years or so, since the financial crisis. the u.s. economy, the european economy, asian economy has struggled to make improvements in productivity growth. that is key for the long-term potential growth rate of the global economy. that theof the fact size of the labor force in so many countries, we already see the labor force declining in japan. we see the labor force probably at its peak size in china right now. europe faces the same problem of

weak labor force growth. without the productivity growth to offset the decline in a labor force, or slow growth in the labor force, it really sets the stage for slower economic growth across the globe. that would lead to lower commodity prices and probably have a negative impact on emerging markets, which depend on commodity exports for an important driver of their economies. shery: thank you so much for your time, steven cochran, moody's analytics chief apac economist. if you have missed out on that interview and want to check it out, tv is your function on the bloomberg. you can also go back to our interviews. if you look at the right hand side corner of that screen, you can see all of our charts that we show you through the programming. on the left lower part of your screen, you you can ask the

guess a question. ask a question and we will try to get to them. this is for bloomberg subscribers on. this is bloomberg. ♪

haidi: asian markets are selling off. let's get over to sophie for a look at how bad the damage is so far this morning. red whent is a sea of

you look at the losses across major benchmarks. down by 2.2%, falling to an april oh. electronics makers leading the drop. under pressure. the asx -- asx 200 lower for the fifth day. sk hynix to deliver a beaten profits, but it did warn about the dram space on trade tensions and prospects for a rate hike. markets,or bloomberg the china open coming up next. this is bloomberg. ♪

♪ david: now when you are the head of the imf, do people recognize you? christine: it is a lot of ego food. david: how did you get to be the head of the entire firm? christine: it is in those situation a woman arises. david: with synchronized swimming, you became a member of the national team of france. christine: i did european championship and many international events. david: you experienced a lot of discrimination. christine: when i used to firms, i with law was told back in those days that i would never make partnerships because i was a woman.