con michalakis robert o'donnell haid haidi: welcome to "deborah daybreak australia, i am haidi start was? shery: we're counting down to the asian open. ♪ haidi: these other top stories we are covering, u.s. equities strummed back from a global selloff with the nasdaq seeing its best daily performance since march. amazon delivers a wild day, plunging after hours as sales

and revenue missed. google also down, as parent company alphabet. more to partners for charges for each and it runs? ofry: to get a quick check her markets closed, confidence market.g to the you can see the dow gaining 400 points after a plunge of 600 session. the last the s&p 500 is also higher by 1.9%. we had consumer discretionary up, also energy stocks and oil -- as oil rebounded from the two-month low. the nasdaq saw its biggest jump since march, and the bloomberg dollar index also gained .2%. fromw this reaction positive corporate earnings coming from twitter, microsoft and tesla, overnight, but we also had amazon and alphabet after the close in this session. we will see how all of that will

be found throughout the week and throughout asia as well. sophie: that's right, quite a few catalysts to digest. after a harrowing week, we could be gearing up for a rebound in asia. are inn benchmarks oversold territory, but we could perhaps. reports hoping to boost sentiment sentiment may also remain fragile on the wake of monetary normalization will not be derailed. i quick report on the eco-agenda, not much in the way of heavy hitters, factory out factory output and cpi numbers are coming out this friday. sharingand ici bank today, shinzo abe is also set to hold formal talks with leaders in beijing, japan and china are set to reportedly sign a few deals? so much, sophie

kamaruddin. let us get to the details for what could be a short-lived bounce back in tax. earnings from twitter, microsoft and the tesla helped the s&p 500 erased most of yesterday's losses. there were some less than stellar numbers. keenan has the details. expectations were pretty high in the first place, one they? su: yes, but they did not manage to erase all the losses of the week and the s&p is still on track for its worst monthly loss years. take a look at the returns, what we can shape is where that strength was, at least in this most recent trading day. what we have is a lot of green on the screen. 10% gains for amazon and microsoft, the big movers. what i could tell you about

international paper, and grab attention because -- if we could see the movers of the day -- talked about tariffs, saying that they were reporting as much. damage as had been expected. investors like that. looking at the other movers, you also had microsoft with big gains and twitter up in a big way as well. what someook also at of the other asset classes work, the dollar has been in a tight race throughout the summer and it moved to the highest we have seen all year. you can find all of these charts on the bloomberg gtv. in addition to the strength of the dollar, we also saw the stoxx, which has been under pressure, a big area of strength along with the tech heav heavyness. haidi: intel also give a bit of hope to the chip sector, what if they say? su: they are talking about pc

demand. we are seeing intel move higher after hours, that stock counteracting some of the damage that amd caused, they came out after the bell yesterday talking about weak demand. if you see how they did in this amd lostssion, almost half their value, down 20% at some point. it will be interesting to see where the semiconductor index goes from here, again, heavily concerns?y trade shery: we also saw oil bouncing from the two-month low, but we still expect a loss for the month? su: oil is definitely under pressure. at one point, we were hearing that they were going to produce as much or as he could, now we are hearing they will cut back. that is a positive for oil. gold is also at a three-month high and you are hearing the gold bulls talk about how the run has more room to go. haidi: that was bloomberg's su

keenan, with a bit of a relief for markets. there was a flash of investor optimism in tech stocks, but it turned out to be short-lived. number technology host, emily chang, jens us from san francisco. what were your key takeaways from the badge of tech earnings today? emily: lots going on, that right . we should address amazon first, revenue growing 20% year-over-year -- 29% year-over-year, but the disappointment came for the forecast for the holiday quarter , it was like when it comes to revenue and profit. perhaps it has something to do with costs, we know that their increasing minimum wage for their workers across the company, and also, whole foods is continuing to work on that particular acquisition. alphabet was also a bit light, it narrow miss on revenue. i spoke to the cfo and she blamed it really on currency

headwinds, talking about the bright spots which are mobile, hardware, ai and cloud. having anr, interesting report, monthly average users continued to decline, in fact, they dropped by 9 million, but revenue is increasing. users are coming back to the platform, and despite the declining users, they are in the hopes of finding a more engaged audience? shery: let us talk a bit more about alphabet. it spoke to the cfo, tell us details of what she said about the numbers. emily: we talked a bit about amazon, ironic because amazon also reported today. amazon is certainly encroaching on google and facebook when it comes to digital advertising. but at some point, amazon could become a real threat. we talked about that and she digital adhe new

business is really increasing opportunity. we also talked about china and still planningis to try to reenter china and bring its search engine back to china. here is what she had to say -- we continue to help support chinese users from developing android apps like google translate. as the ceo has said repeatedly, we are not launching a product in china, we are focused on the dishware we are doing the right thing for the long-term. set down for a chat with the twitter cfo as well, what did he say? emily: as i mentioned, the results are interesting for twitter, users decline, but stocks soared today. what we are continuing to see is the company work through these efforts.e health i asked what would happen with monthly average users going forward if you are continuing to work on cleaning up the platform . will he continue to see users

decline? monthly active users would decline in the mid single-digit millions in the fourth quarter because of gdp are, our ongoing health work and decisions we may make regarding sms content with carriers. we don't forecast sau usually, but we did it in the first few quarters because we could see a decline coming and we wanted to share that with people. we don't want to be constrained by the disclosed metrics, we want to prioritize health above all because we know it is a growth factor for the company. emily: and that was the cfo of twitter there, talking about a collective health effort, but it will be interesting to see how these efforts impact twitter numbers going forward. they say there are continuing to challenge some 9 million accounts a week, so we could continue to see these potentially dramatic declines all in the name of improving the overall platform.

much. emily, thank you so that was the "bloomberg technology anchor about emily chang there, in san francisco. words get you the first news now with jenna dagenhart. jenna: haidi, former vice president joe biden an actor, robert de niro are the latest targets in a series of nail bombs sent to opponents of president trump. two similar packages were found in delaware addressed to joe biden. the new york times says investigators believe some were mailed from southern florida. saudi arabia has all but admitted that the murder of jamal khashoggi was premeditated. they say prosecutors have evidence from turkey that the suspects flew to istanbul with the intention of silencing the writer. the kingdoms shifting narrative has sparked criticism with the u.s. under growing pressure to act against its leading ally in the middle east.

european central banks confidence in the euro zone economy is about to face a seven-week test. key data over that time will end with an updated forecast in the banks final policy meeting of year. mario draghi and his team might judge whether to halt the bond buying program. for the time being, he admits is temporaryness and remains manageable. >> incoming information, while somewhat weaker than expected, remains over all consistent with an ongoing broad-based expansion of the euro area economy and gradually rising inflation pressures. >> the most powerful storm to hit u.s. territory since 1950 has killed one person in the northern mariana islands as theow -- and is now on track to hit philippines and

taiwan. it had winds of 290 kilometers dropped.and almost 20 centimeters of rain and cut all power and local authorities say that they could be months before electricity is restored. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am jenna dagenhart. and this is bloomberg. haidi? haidi: jenna, thank you. i had come australia's top-performing superfund chief investment officer joins us to talk strategy. shery: but up next, much more on tech after the short-lived rally. we take you through amazon and alphabets disappointing numbers. this is bloomberg. ♪

♪ haidi: we are counting down to the start of trading this friday morning here in sydney. features looking -- we are seeing a bit of life trickling

into the market. not quite as bad as the bear market we have seen elsewhere, but we are looking at a bit of a pop in a sydney futures, the biggest rally since early july. and indicated upside of 1% one trading proper begins this friday? shery: about time, given the asx 200 is an oversold territory, the most since 2013 or so. i am shery and in new york. haidi: and i am haidi stroud-watts in sydney, you are watching "daybreak: australia." investors were not convinced by amazon numbers, after missed revenue estimates. remy innocence year devil with the details. amazon.tart off with the revenue side,

the topline side. hop into the bloomberg terminal, i would like to show you what is happening here onto the gtv library. 29.3% growth in the third quarter. yes, it is double digits, but look at slowing growth since march. 66.6rms of numbers, billion dollars, coming in at light against 67 point $1 billion, which was the estimate there. flipping to my next bloomberg terminal there, $2.8 billion is the net profit they had quarter on quarter. look at the last time it was down, that is 10 times in terms of growth after years of small profits and even some minor losses here in the red. in atquarter eps came five dollars 75 cents versus an estimate of three dollars 11 cents. limit show you another number as well, operating income also was b, 3.7 billion.

there are also guiding for the sales at less than estimated numbers. investors seem to be worried about the outlook, especially when you think about holiday sales, christmas time sales. what one saving grace is amazon web services, and saw sales up 46% year on year, up from 42% year on year this time a year ago. seems that alphabet seems to be like a topline, bottom line story. what happened to costs here? ramy: it seemed to be a tech acquisition cost, you have to pay some to get some and in this case, they are paying a lot to riyadh $6.8 billion, to try to get all the revenue and sales

out there. the ceo said this was because of an updated partner agreement and also their ongoing shift to a mobile. take a look at the traffic acquisition cost in the bloomberg terminal, $6.5 billion. ever since 2013 -- probably since ever, this is at its highest. flipping to my last terminal chart, looking for sales growth, also falling 21.5% year on year. this is a very similar story to what has been happening as well with amazon. finally, let us take a quick look at the final numbers, you can see that googles are the revenue, for print $6 billion. the only light at the end of the tunnel is paid clicks, up 62%. it is dragon the fang stocks this is definitely dragging the fang stocks down.

shery: we welcome our next guest, bob o'donnell. we know you were expecting pretty strong numbers whether it was amazon or alphabet. what surprised you hear? rob: it was a bit surprising. but our which you think about it is, this is the day for cloud computing. when he took it best when you look at amazon and alphabet, the day -- when you look at the aws business for amazon as you were talking about, as well as google's cloud business, and intel's data business, it tells an interesting story about where the overall tech market is going. growth also cloud tells a story. these acquisition costs will continue to grow, it is harder and harder to get a hold of people and people will expect more from people providing the

customers to them. at the same time, you have a couple of interesting things to look out for, the amazon ad business for example, small now, but growing credibility. and the opportunity, advertising along with the stuff you are selling makes so much sense come as i think it is an interesting opportunity when you think about that moving forward. google spent a lot of money on r&d, some of that is going to work to their cloud platform, which is important. they actually lead in a icloud, an interesting area, but they're also moving their own products. we will see how the hardware businesses do, like pixel. been a modesthas business for google, but we will see if it makes an impact. but both companies are building money to build up these smaller businesses, longer-term? shery: veggie tv chart on the bloomberg library is showing the outperformance of these large tech companies including amazon, google, microsoft.

what does the earnings report say about the future of their stock? think think if we longer-term, it looks good, because the world is in fact, women toward a cloud computing model, both in business and in services like twitter and uber. all these things are leveraging that computing and that is rather world is going. these three companies, amazon, microsoft and google, are the leaders in cloud computing. and people who supply to them, like intel, for example, have a stronger story to tell longer-term. are things how much like government regulations likely to continue to weigh on this, given that there is a bit of uncertainty in just how much pressure that will put on companies like a and alphabet. a hugethink that is overhang, particularly for google and alphabet. -- obviously, we

pr and the impact that is had come out the issue of data surveillance, the fundamental business models pointed to by tim cook in his comments were facebook and alphabet. longer-term, those are big issues that i think investors have to be aware of and think about. it is unclear how that will impact them, but they will absolutely be an influence. haidi: what would be your pick for the best in tech earnings season so far? there have been sort of generic headwinds in this sector, not just in the u.s., but if you look at the asian tech names, is there a particular sector or company that you think is better positioned to come out of this with all of the trade issues and regulatory concerns? bob: i actually think microsoft has done a great job of --

positioning themselves long-term, they have start out their businesses and positioned themselves well internationally. they work better with a lot of these companies, so i think you cannot go wrong there. obviously, apple is a great growth story, i think we will continue to see great numbers from them. storyna, one interesting that came out is, if google doesn't in fact, go into china, what does that do for baidu? that is an interesting opportunity. if they don't come of that opens up more opportunities, i think, for baidu in china? and bob, you talked about long-term growth. in order for that to happen, -- doing the same thing. how strong are their core businesses, in order to be about to sustain such a long-term cost? bob: that is exactly right.

if you think about those two companies, they each have repeatable strong revenue in their core businesses. andle with advertising, now, amazon with cloud computing. very stable and growing strongly. as well as their retail business. so when you have that or strength, you are ideally positioned to be able to make a lot of different bets. obviously, amazon has come up alexa,ings like investigating the retail stores and reinventing brick-and-mortar. google is with all of their other bets, such as health care and autonomous cars. all of these things position both of those companies very again, barringm, any unforeseen regulatory changes, both of these companies are well-positioned to keep milking that very strong core business and adding additional businesses along the way. i think that will serve them well for the next several years. shery: bob, always great to have

you on here with us. ceoi: techanalysis research bob o'donnell. this is bloomberg. ♪

♪ shery: welcome back, i'm shery ahn in new york. haidi: and i am haidi stroud-watts in sydney. you are watching "daybreak: australia." this is australia's largest mining event, bringing together more than 600 leaders in the industry, policymakers and investors. we will be speaking to a top lineup, including the ceos of rio tinto, the chairman of devolution mining and many others, next week. -- commoditiesrs or one of the industries hardest wars. the ta tariff

shery: and coming up next, we are speaking to one of australia's strongest performing super funds which managing best which manages nearly $6 billion. this is bloomberg. ♪

haidi: it's 9:30 a.m. here in sydney. we're seeing a breath of life sentiment through the picture here in australia. the market has fallen into correction territory. and upside of about 1% when we get trading here in sydney. i'm haidi stroud-watts. shery: and i'm shery ahn in york. that's get the first word news with jenna dagenhart. ministerpanese prime seeking to bolster warming ties

with china. he marks the 40th anniversary of the peace and friendship treaty and will hold formal talks with president xi later friday. but have were strained improved as a consequence of president trump's trade war. to be put oni said hold with theresa may cabinet unable to agree on how to advance talks with brussels. sources say no new british proposals are expected before monday's budget announcement after anger erupted in a stormy cabinet meeting earlier this week. lance to discuss the widening split on thursday were abruptly canceled. consumer confidence in argentina plunged to its lowest since the 2002 economic crisis. the country edges toward recession. and the peso gaining $.11 against the dollar with a new imf monetary policy. economic policy fell for it with

straight month in august. officials estimate argentina will contract both this year and next. china's purchases goal from hong kong declined in september to the lowest in more than seven years. bloomberg an official data say it imported just under 11 metric tons, below august. gold prices fell for the six months through september in the longest months in 1997, on dollar strength, higher u.s. interest rates

clear, thing that's been the macro drivers are what are underpinning this. they're talking about macro spotinds, and one bright that will get later on today, u.s. gdp data. we are expecting that to show the best back-to-back quarterly gains since 2014. clearly this has been the , comfortable in a way the u.s. economy is developing at the moment and wake the fed are handling inflation on the one hand and growth from strength on the other. the big thing for asian equities and especially places like china is whether or not we see anymore movement by the authorities to very fragile sentiment,

but in the u.s. there has been a lot of talk around the fed dialing back, certainly not enough on the table yet to see the fed withdrawing from this path. shery: this week has been so tough, even some bullish investors have changed their tone. why has the route been so damaging to the outlook? >> i think his argument speaks to a lot of what bullish investors have felt this week. that's the amplitude and magnitude of these moves have gotten ahead of any kind of discussion around discounted valuations that you've got now during the selloff and the technical damage are seeing in markets. he alluded to a couple of things, one being the complete ofakdown of technical, some the key moving averages on s&p 500, which makes it incredibly tricky. so you have a good rebound in s&p 500 on thursday and then we

get not so great on earnings from the likes of amazon and google overnight, and you immediately see pressure coming through. nasdaq futures pretty weak already, not looking toward a very good set up for the friday session on the back of what people hope was an earnings driven relief rally on thursday. the situation in where people look at the technical picture of the equity market and continue to be quite worried about it. that's mainly because the speed at which this is happening, a lot of this is about people readjusting to the higher interest rate environment but the peso surprised a lot of people this week. shery: we will have to keep a close eye on the earnings reports and the friday session. thecan find adam starts on library on the bloomberg. haidi: we're still trying to make sense of what happened this week and what will be happening in the week to come.

another while session on wall street, our next guest expects sex volatility to continue as we face what he calls a toxic mix of geopolitics and rising rates. he's one of australia's largest pension funds and he joins me here in sydney. great to have you here. a big fan of your notes on twitter. let me start with this chart which was originally in our gtb library. it's a good summary of what we saw this week. it gives you an indication of how widespread the selloff was. there was not a great deal of nuance to what happened this week. >> i think markets just react, and we've had such a good run in markets the last six or seven years. higher, we'veg got geopolitical issues and impending trade wars.

suddenly markets wake up and then just say, i'm worried. then there's a little momentum and then this is how markets behave. tales going up and then down. it becomes negative momentum as well. that's the history of markets, and i'm not surprised by that behavior. i think we will see a lot more volatility. it will be a feature of this environment the next for a front years as we deal with higher rates and the toxic mix of what's happening around the world. it's either everything is perfect an amazing or everything is terrible, there's not much in between. what does the smart money do when you're in the aging part of the cycle? if the money was that

smart, it would be a little more resilient. the years will test investor resilience and temperament. you get market psychology that goes up and down, and i think we are seeing that. we saw in february and we're seeing it again in october. futures again are down. the world we were -- we are inheriting will be inherently more little and lower return. shery: does it mean it will not affect the fed's thinking at all, given that this is pretty much expected? con: the fed has to do what it's got to do. it's going to raise rates if it thinks inflation is coming up. it will raise rates as the economy is going along. if it's going to react to a 10% move in the market, in the world really is in a very bad place. he will do what he has to do. will it get spooked? the late 90's was a good example

in the asian crisis when markets collapsed and greenspan sort of backed off as we had a pretty bad couple of quarters. he may see that, but i don't think we are there yet and you probably need to see more pain for the fed to back off from raising rates. interesting, be everyone has factored in a december rate hike. in the markets will rebate is what the fed is thinking, based on how they communicate. shery: given that tightening with the fed, not to mention a fight to save havens, we are seeing the dollar strengthening. today we saw the highest levels this year. this chart on the bloomberg showing you that even know we continue to talk about a stronger dollar and emerging markets continue to fear a stronger dollar, we haven't really seen it move or break out of this range of around two points.

when can we expect a breakout, if there will be any, or what is the direction call for you? con: i think the dollar seems to be overrun. i think it's a crowded trade. it has moved a lot and i'm not surprised by the price, it seems the couple of days we've been speaking to our funds managers, it feels like the australian dollar and the aussie dollar, the most crowded position is to be short the aussie and long the u.s.. it has probably maxed out a bit. need a bitou really of a perfect storm or a less hawkish fed and something of a circuit breaker on the u.s.-china front for emc recover? we have global equities and emerging markets, value and growth. what we find is when the spreads her that wide, you don't know

what the catalyst is to see the spread come in. that could be the catalyst and hawkish bida less or you may see china putting in a stimulus, as you said earlier. valuationere are investors, if you believe in long-term value you probably want to be entering into that and waiting. sometimes value is hope and weight, but it is also patients long-term. haidi: you've been critical about policy paralysis in the side of the world. does it matter? i think the greek prime a rotten lastad six or seven years in terms of policy from changing of leadership. it would be nice if we had some stability. up and let'sl come

just hope we get a good run, it would be nice to have a leader actually last eight term. haidi: great to have you here. shery: of course australia matters. coming up next, we look ahead to the brazilian presidential runoff as the route in emerging markets deepens. this is bloomberg. ♪

haidi: breaking lines across the bloomberg. exactly on expectations of 1.0 4 billion singapore dollars there. nonperforming loans huishan ticking, staying unchanged at 1.6% year on year. $1 interest income at billion, and will get you more

details on that when singapore begins trading today. are sticking banks to their scripts on removing stimulus. the ecb signals it will keep tightening even as growth appears to wobble a bit. the u.s. economy is at its strongest level in a decade. kathleen hays is here. mario draghi doesn't seem to be too concerned about the euro area of growth and inflation and he doesn't seem to be that concerned about the italian fiscal risks. he's not concerned enough to signal that he's not on the road to remove stimulus, but definitely that is tightening. that means the ecb is on track to wrap up its bond purchases by the end of the year and perhaps to hike the key rate as soon as september 2019. he downplayed the risk in nero economy, noting trade tensions and said they are temporary.

here is what he said about going ahead and moving ahead. >> incoming information was somewhat weaker than expected. it remains overall consistent with an ongoing broadbase expansion of the euro area economy and gradually rising inflation pressures. let's take a look at this because there was an important number out on wednesday that suggests maybe there are some risks materializing in the euro area economy. let's take a look. you can see the composite pmi has sunk to 52 and change. withwould be consistent easier monetary policy. he sidestepped the question of italy's budget standoff saying it's a fiscal discussion that doesn't come up in deliberations. are coming that

ahead, will they show the risk materializing? shery: he was not the only one who's stuck to the script. the new vice fed chair. kathleen: he is in line with jay powell. we will have more gradual rate hikes. he means if you look at employment and inflation, they are right where they should be, three point 7% unemployment, roughly 2% for the inflation rate. here's what he said about moving ahead toward more gradual rate hikes. >> if the data come in is i expect, i believe some further gradual adjustment in the federal once rate will be appropriate. as i mentioned earlier, i believe monetary policy today remains accommodating and with the economy now operating at or close to mandate consistent levels for inflation and unemployment, the risks that

monetary policy must balance are now more symmetric and less cute to the downside. -- less cued to the downside. kathleen: he said there is no way of consideration, we have a job to do, keep the economy on track, etc. he said the economy's fundamentals are very solid. shery: kathleen hays, thank you so much for that. let's talk about brazil because the presidential runoff takes place on sunday with the right-winger maintaining a widely over his left this rival -- leftist rival. let's check the mood with julia who joins us in the new york studio. great to have you here. i remember in the first round, it was much better than the polls thought he would do. what are we expecting this time

around? >> the polls have been reliable don'teliable, so we just know. he did better than expected in the first round. i think he did 10 points better than the polls were rejecting. show his league narrowing a little bit but will have to see on sunday what actually comes up, if it prompts more people to go vote or what the outcome is. right now the markets are taking him as being more market friendly. believe can we really what the expectations are? will he really be as freely sec missed to be? >> it seems to be. we're expecting a announcement, an announcement from the economic steam, maybe that will try to pass something

in congress so they start off 2019 in a better position. i remember when i was having that conversation with he won tot president, get some of those things legislated through congress before he left. >> there's been a lot of mixed messages from his team. they arele said scrapping the pension reform because they don't like it. some reports have said maybe they will try to negotiate parts of it and pass parts of it because it really is something brazil needs to do right now. we any sort of significant market reaction, regardless of what the result into being? depends on what his lead into being. different from the polls, i think the markets could

still rally. a lot of his victory has been priced in because he is so far ahead in the polls and has been for weeks. if there's by some chance they dodgy win, then monday will be a complicated day for brazilian markets. , we appreciate you coming on with us. get a roundup of the stories you need to know in today's edition of daybreak. you can customize your settings so you just get the news on the industries and assets that you care about. mixed messages from tech earnings and the markets. read all about it on the bloomberg. this is bloomberg. ♪

shery: i'm shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. you're watching "daybreak: australia."

we got trading in new zealand getting underway, just a few minutes away from the open here in sydney. let's get a quick update on the markets. this is how we are trading in new zealand in the early part of the friday session. a strong lead from wall street on those tech earnings, still a recovery rally underway. .8% when it comes to trading in new zealand. , sydney dollar holding futures looking like they were jumped the most since early july. that's a market that remains in correction territory. the aussie dollar seeing a little bit of a gain their. shery: that market the most oversold since 2013. we will keep a close eye when the markets open and will discuss at all with the managing director of capital markets silvio jablonski. we'll talk about tech earnings and whether they can help in saving the markets as we see the

equity selloff. that's it from "daybreak: australia." this is bloomberg.

haidi: good morning, australian markets have just open for trait. shery: good evening from new york, i'm shery ahn. sophie: welcome to "daybreak: asia." haidi: asia pacific stocks may struggle to match wall street's gain. a denver on the friday session. amazon delivering a while day, leading gains in the regular session and plunging after