haidi: a very good morning. australian markets have just opened for trade. shery: good evening from new york. sophie: welcome to daybreak asia. haidi: our top stories, more signs of slowdowns in china. profits declining for the fifth consecutive month in september. october cannot end soon enough for some. s&p close to a

correction. victorysonaro makes a in brazil. startedet's get you with a quick check of the markets flows -- close on friday. we saw the tech selloff continue. the nasdaq continues to fall, now in correction territory. 12% below the august high. 1.2% while the s&p 500 on the verge of correction territory. we saw brought pressure across markets. emerging markets also affected by this risk of sentiment across the u.s. although of this will affect how asian markets play. there they are at the lowest since last year. sophie: they fell into a bear market and this monday we are seeing a mixed start for asian shares so far. up 1/10 ofng gains,

1% after losing more than $55 billion last week. earnings are due out this week. we are set for a busy week. we just saw the results from the brazilian election. we are down to the last u.s. jobs report for the midterm elections. futures rising higher before that. big earnings this week. and samsunglineup, electronics due to report. disappointing third-quarter results have dented sentiment. let's look at some equities in australia. we have some results on tap. this morning, that stock climbing 5.2% this morning. predictingducer

earnings coming in at the top of its target range. the stock has not upgraded to neutral. we are light on the agenda. -- areetail sales art be to be released in less than an hour. later this morning we have vietnamese trade data do and chinese official pmi out on wednesday. weekend we saw another stock data point for china. industrial profit growth slowing for a fifth month. haidi: brazil has elected far right candidate jair bolsonaro as its next president. hadformer army captain almost 56% of the votes with more than 96% of votes counted. he will be taking office on january 3. yorke joined out of new

now. it is oh is a case of the magnitude of this victory, but the hard work begins given how divided the congresses. guest: exactly. now we will have to see, speaking, he is still he has not really announced any specific measures but that is what we're looking for now. measures and the first names of his government, to see how he will get these things done in congress. we do not know yet. we can see that the victor of this election is ,peaking in rio de janeiro hugging his supporters, talking about how it was not just his victory but a victory for everyone who supported them. he has spoken about wanting to privatize state assets, want to fix his ailing economy. do we have any details? the market on brazilian assets has rallied. julia: the market rally was

mainly focus on his choice of economic advisor. a very liberal economist, has said he wants to privatize everything. we do not have a lot of specifics. we don't know what their plan for pension reform is, what their plan is for tax reform. they have said they want to privatize a little over 100 companies in the first year of government, but probably none of the major ones. none of the banks. so we do not know how they are actually going to do these things and how much money it will raise. shery: in his victory speech just now, bolsonaro saying he will reduce of the government, cut government costs. the also talked about pacifying the country. interesting he was in brazil is home to different races and religions and he is pledging for clean government. basically all the things that got him elected in the first place. julia: exactly. it was very much in line of what he had campaigned on. his family.

they started with a prayer. it is very much in line with what we have seen from him throughout the campaign. brazil is home to different races and religions. we know he has a history of skeptical statements about brazilian democracy. julia: his first interview after the first round, they both started saying they will uphold the constitution. vp had saidis something that was not much in line with that so, they have been trying to reinstate that. bolsonaro, the main criticism of him is he will not respect democracy or will not respect the constitution. he is trying to make that point very strongly that this will be democratic and everything will be fine. that he has to say he will try to pacify the country after a very divisive campaign. the fact he is pledging for clean government.

corruption was a key issue in brazil and what of the key reasons the workers party is not coming back to power. julia: exactly. the workers party first tried to put former president lula in t here, and he is in jail. it has been a roadblock for them. they still got a lot of lawmakers elected. something that they did not manage to overcome and hat left the way for bolsonaro to win. shery: let's not get the first word news with haslinda amin. the weekend brought more signs of a slowdown in china. been decline for a fifth consecutive month, rising just over 4% compared to 9% from august. it comes as industrial out put growth decelerated from a year earlier.

profits for the first nine months rose 14% from a year earlier to $715 billion. the british government presents the government later with the chancellor warning and no deal brexit might mean standard austerity. a harsh bid would slow the you case -- the u.k. to a near standstill, saying he would have to introduce a spending plan to support the economy. he also said the bank of england would have to consider interest-rate changes. >> getting a deal that allows us to continue trading with our european neighbors with a low friction behind the borders would minimize any negative effect on the u.k. it will minimize any negative affect. whether overall there is a negative effect or positive effect i cannot say. haslinda: it has been confirmed of thee boss

conglomerate died in a helicopter crash in england saturday. bought aonaire football club in 2010. the aircraft came down about 45 minutes after he watched the team play. no one on board survived. the names have been released of 11 people murdered in saturday's mass shooting at a pittsburgh synagogue. the victims were aged between 54 and 97. to accused gunman is due appear in court monday to face 29 charges. he madepers say statements about genocide and killing jewish people. a law enforcement official says he owned his guns legally. global news 24 hours a day on air and on tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm haslinda amin. this is bloomberg. shery: thank you so much.

busydent trump has another week of campaigning with nine days to go until midterm elections. trade tensions with china are still hanging in the backdrop. our bloomberg editor joins us now from washington. let's start with the domestic picture. with one week to go until the midterm elections we have now seen the bomb scares, the mass shooting in pittsburgh in a synagogue. anything that the president is doing to try to lower the political temperature? was this morning he tweeting again and mocking his political opponents. >> that is exactly right. we saw him somewhat subdued last night at a rally. he made some kind of olive branch comments about let's all get along, but at the same time he feels his back is against the wall with keeping a republican majority in congress. of course he is not on the ballot himself but he is the figurehead for the republican party.

if being aggressive and laying into democrats is the way he thinks republicans will win, i expect him to be back doing that. we will get at least eight to 10 looks at him over the next nine days. he is rallying everywhere from florida to montana and everywhere in between. a huge effort. shery: how are republicans and democrats faring in polling? ros: polling always has a margin of their. -- of error. we are seeing some close senate races. looks like democrats will win in arizona. the florida senate race is very close, too close to call. the bottom line is that a lot of democrats are vulnerable in this election cycle in states that trump won in 2016, in some cases in a landslide. montana, indiana, west virginia. for the house it is sometimes

hard to tell. there are more than 400 individual races. on generic ballots democrats have been ahead for months anywhere from seven to 10 points. we do not know exactly how that will play out on election day, but word we are getting from within republican circles is that they are pretty much resigned to losing the house. but maybe president trump can pull out a hail mary, as he did with his own election in 2016. haidi: ros, in terms of the backdrop of all this, the trade war, we have been looking forward to this trump xi showdown, now we are hearing that trade may not even be on the agenda when they meet. ros: right. you could call the trillion dollar question. so markets are certainly interested and there are so many stakeholders who want to know what will happen.

it would seem pretty extraordinary if the two were to meet and not talk about trade. but than they could talk about trade in very simplistic terms about coming to any kind of deal. so, i think our reporters at bloomberg are heading the phones trying to track down what is happening and there are people within the administration who think there is no panic stations to be had here, that they will talk about trade. as we heard from the chinese ambassador to the u.s. a few weeks ago, officials never really know who is driving u.s. trade policy. is a china hawks, or more china traders. that is one of the many unknowns here. i personally felt that there might be some kind of pre-election breakthrough on trade with china, some kind of statement put out that would suggest the u.s. and china are making progress. that would certainly be bullish for the markets before the election.

oftenk trump, who so talks about how is your 401(k) doing, would like to see that. at the same time, it seems like the president feels like the u.s. is in the seat. has -- chinc growth ese are on the weak side. we will see in the next few weeks how this shakes out. haidi: ros, thank you so much for that update. still ahead, a reaction from brazil's election results. , first, the week ahead for central banks. find out why merrill lynch says wednesday's boj meeting is a nonevent. this is bloomberg. ♪ event. this is bloomberg. ♪

haidi: this is daybreak: asia. central-bank watch continues in earnest as more voices call for the fed to be mindful of the impact of its rate hikes on global stock markets. are economics and policy editor kathleen hays joining us from tokyo. we heard some contradictory remarks from fed officials on friday. kathleen: there is clearly a spectrum of opinion, a spectrum of you on where the fed -- of view on where the fed should be in terms of rate hikes december and next year. we heard exclusively from the dallas head of the fed on friday speaking to us from mexico city, where he sounded cautious on rate hikes. not because of the stock market. no. he said market volatility up and down, that is typical. here is what he said about what

he thinks is the path for rate hikes. not stimulating the economy or slowing it down. >> i have said it could be 2.5% to 3%.%, 2.75% we will have to make that judgment over the next year as the economy unfolds. to your point, i am very sensitive to not be rigid or predetermined about the pace in which we get there. kathleen: ok. definitely an important voice on the fed. we will see what happens with that. the president of the let the fed is a voter. concerned we will have overheating in the fed does not go fast enough. it could hurt lots of people, particularly in lower income levels. -- fedneapolis fed level

president is the dove of the dove. he said the fed should pause in rate hikes. the have a symmetric target, flexibility. he also thinks prematurely tapping the brakes could restrain rages. -- wages. seems like a minority view. is pretty clear when it comes to the bank of japan there is a lot more clarity in their part. they are far from making any move on rates. what could they signal this week that could change how the markets feel? no change in policy. survey do not expect any extra action to offset the consumption tax hike next year. with people really want to hear, after the tweak which widened,

there'se on the yield, more concern about financial stability, more concern about a bubble building up. concern for the regional banks. a flat yield curve makes it hard for them to make money. also will he expressed concern about potential global slowdown. he may come out saying he is confident in the domestic economy in part because monetary stimulus has worked so well. those are the cons of things people will be looking for. anything about the yield curve range, do you need to change it, will that lay the ground for a change in that regard before they go so far as to change the yield curve control target. that is a ways down the road. tokyo for bojn in decision week.

let's bring in bank of america head of economic strategy. kathleen was talking about increasing concern about sustainability and systemic risks as the boj continues to roll out its unprecedented monetary policy. the ecb.the fed, is that a core concern, we have never been here before? you don't really know what will happen? >> that is a fair point. there is a feeling of an experiment that we have this coordinated unwinding. the fed seems pretty set. it will be much more interesting the boj normalize. that would be a big deal. i agree with you. there is a level of uncertainty about how this works. shockscertainly these like the trade war in recent selloff, we are comparing the

odds of a december hike against what is going on with the s&p 500 which is teetering on the edge of a correction. you can see expectations of what happens in december have edged lower. --tainly while the market the question is should they be looking at what happens to the market and tailoring their approach to that? tony: the markets have quite a big response considering the effects of the downturn. in bank of america we think the u.s. economy is very strong. the hurdles for the fed are pretty high. maybe some of those inflation risks, they have to stay the course. we are penciling in a december hike. a lot of things happen before the fed meets in december. midterms,s, th -- the the xi, trump meeting.

maybe the fed will be more confident. latest gdp report we saw solid growth for the u.s. economy but we also saw business spending slowing down, now the weakest since 2016. how big a risk is this? tony: also we saw stock numbers as well that were strong. they will unwind. even know the headline number was really impressive, the market's focused on that overall. we still think there is a lot of momentum going into next year. just a reminder going back to the fed, the unemployment rate, that should remain a major focus for the federal reserve. the feedback loop into the trade issue, that is something we have to watch. we still think the momentum on the u.s. economy will sustain growth around 2.8% into next

year. shery: does that mean you could also be considering a faster hiking cycle from the fed? we think it will still be in december and three more next year. on --erage early i suppose that is something markets have not been pricing in, some sort of inflation break. that would be a real worry. considering the path of what is happening on bond yields, we have seen them respond quite aggressively last week over the stock market problems. we expect 10 year yields to get 335 by the middle of next year. that is not on the basis of inflation breaking out. the markets suggest that overall. haidi: what happens when they get beyond neutral? tony: long-term they see that as a higher level.

they have estimates of rolling neutral rates overall. we should be looking at other financial positions. central banks are not able to lift as well, then you will get a response with the u.s. dollar. we think the u.s. dollar will weaken. does that view on the dollar change if you get a doubling down on the trade war? tony: we are hoping a trade war can be sorted out. brexit, ifee a hard italy does not blow up, and we see process on the trade war. what is interesting is the pain on both sides of the stock markets. fear --mption is the atmospherehe market is meaningful progress. words, looking for a boring 2019. tony, thank you very much.

a lot more to come. this is bloomberg. ♪

is 10:30 in sydney, markets have been trading for 30 minutes now, seeing some gains. asx 200 up .9%. seeing very strong gains for health care, materials also catching a bit as well with weakness in the u.s. dollar supporting the commodities sector. not much relief for wall street. check drove gains down again. big week for earnings coming up, sherry. shery: 7:30 in new york. it wasn't a great day for equity bulls friday. the s&p 500 near correction territory since the september

high also heading for the worst month since 2009. i am shery ahn in new york. haidi: i am haidi stroud-watts in sydney. let's get you to first word news. the brazilian president-elect has promised clean government and what he calls the pacific asian of the -- asses ita he had almost 56% support with almost all the votes counted. he promised to reduce the size and cost of government and reform foreign-policy. support for germany's governing party plunged in the latest stake electoral test with the christian democratic union suffering its worst showing in hesse in 50 years. chancellor merkel's main allies its lowest share of the vote since the second world war. the green party almost doubled

support, and the far rate -- the far right got seats for the first time. thailand's leading political party has a new chief. they have named this man as leader and will decide if he will be their candidate for prime minister. he was a lieutenant and general and was the only name on the ballot. thailand had been run by military government since a coup in 2014. elections expected in february and may next year. saudi arabia is rebuffing calls from turkey to hand over the suspects in the jamal khashoggi murder, saying they will be tried in the murder. president erdogan called for them to be extradited as a sign areood faith, but they saudi nationals and will be prosecuted at home. 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 am haslinda amin. this is bloomberg. haidi: thank you. last week's tech meltdown pushed the dow and s&p 500 to the brink of a correction. we saw treasuries, gold seeking havens. we look at what lies ahead. the shaping up to be the worst month for stocks in about a decade. one person saying it was a treacherous environment. look at friday's selloff in the in faangnvested stocks. facebook, amazon, all of them taking a hit. the strategist said many of us saw the ups and downs at -- and at the end of the day got there head handed to them. gtv.an find our charts and you will see the tech stocks

have been the worst since aang index16 and the f is down a quarter trillion a month. goldlked about bonds and spiking as a haven trade. oil has been down in a huge way. some traders who were veterans of the oil market are saying the risk averse nature and the fear trade in stocks and other asset classes is bleeding into the oil complex. they are seeing oil under a lot of pressure this week ahead. haidi: it is another big week for energy names. will this have any impact on momentum? su: earnings is key in terms of of theing the real mood market. take a look at some of the big players that will be reporting. ,e have more faang stocks

facebook, apple will be closely watched this week and we also have e-commerce, alibaba. we have ebay. at the end of the week we are getting big oil again. this is key, what they have to say. we have seen the benefit in the past quarter for much higher oil prices but the outlook given the current environment and the price of oil is what we are focused on. ask -- shery: some are questioning the fed. su: we have a lot of traders, interest rate traders scramble into a position. if we go into the bloomberg, you can find our library of charts. there are many who are questioning the rate hike plan. you can see in the white, this is the odds of the september rate hike. it has come down quite a bit where it was previously looked at as a lock. it corresponds to the huge drop from the s&p 500.

we are getting the all-important monthly jobs number. many say that could influence the fed, but the general thinking is that rate hike for december is locked in. would be big news is a continued to wobble some more. shery: if you are anxious about earnings results, you are not alone. in the u.s. traditional roots support like a stronger economy is turning into a headwind. ramy inocencio takes a look at earnings season and why investors are worried about for the future of their stocks. ramy: anything that is positive really just isn't able to support the stocks. we are talking about strong u.s. economic growth. 3.5% beating the estimate later on this coming week. expecting a strong jobless number, 3.10%. with that said, even when she

was talking about the number showing up, it was red after red. what could possibly raise investors confidence? not sure. want to showal i you one of my first charts. this is the gtv terminal library . this month of october is on track to be one of the decade's worst, down 8.8%. last time we saw this all the way back to 2009 of february, this is when it fell in that month by 11%. on pace for its worst month in pretty much a decade. folks areng at what thinking about in terms of earnings, not just this year but also next year, could flip up the screen, those are falling. analysts are cutting their 2019 s&p forecasts. those are in blue. you can see for the first quarter and second quarter, it is being cut by as much as half.

in the third quarter of this year, looking at this in terms of profits, but the projected growth rate for next year could be as low as 11%. , so what could possibly hang on to the positivity, not sure, because we are talking about said rate hikes and the u.s.-china trade war that continues to persist and hangover all of us into the -- hang over all of us into the future. haidi: do you think anything could snap this pessimistic streak? ramy: no. why do we go back into the terminal? there is still good news. i talked about gdp growth. in the terminal, we can see 3.5% for the third quarter. that is still pretty good. last time we saw anything less put another way, we

have been higher for much of this since the past 2018. the only time it was better was second quarter which was 4.2%. the analysts are saying, we still have good growth, but it is slowing down the sugar rush in terms of momentum might bp during out. with costs rising, that could also be an issue here. you are talking about the positivity here. earlier we spoke to mick mulvaney, director of office management and budget management. he is looking at the silver lining. >> i feel like we are in the goldilocks moment where we are getting good gdp growth but don't have the inflation you might traditionally have seen with this market. takes pressure off the fed to raise rates as they have indicated, so all things are pointing in the right direction. ramy: one final thing. -- chance of said rate hikes

of rate hikes could be one the game changers. i want to show you the amount of fed tightening that is priced in for 2019. it is declined ever since october, september to 41 basis points. the consensus is december is priced in, and there are three for next year. with all of the negativity around us, there is a possibility or the hope investors are saying maybe the fed will take a pause next year. steve cohen nicolas had this quote. fed pause, no u.s.-china deal, it could be halloween every day for investors. if there is a pause, it could be a santa claus rally. shery: thank you for trying to bring us good news. ramy inocencio with the latest.

ibm has agreed to buy red hat for 33 billion dollars in its biggest ever purchase. the deal is aimed at helping ibm jumpstart and catch up in the cloud. let's get more from our reporter in chicago. tell us what does red hat do, and how would this help ibm. >> good evening. red hat works with the distribution of providing of services and infrastructure related to the linux operating system which is completely operating -- open source. they are behind the deal. this will allow the woman to fulfill her pledge of increasing ibm significantly. it has fallen behind alphabet and microsoft. shery: how does it compare to pass ibm deals and tech a man a -- tech m and a? >> in the clips is their

previous record, $5 million from 2007. it is the third-largest tech purchase aing dell's during the dotcom boom. shery: what does it mean for the red hat ceo? >> gina is adamant this is not her goodbye. she plans to stick around the next few years. while red hat will be absolved into the cloud division of ibm, james white house, the ceo, will be staying, and the company will be given out autonomy with ibm. haidi: doing know about how this is being financed? reporter: it has been a lucky day for j.p. morgan. they will be providing the financing. will significantly -- they

will significantly affect the capital infrastructure. haidi: the m&a reporter in chicago. monday merger madness with details on the red hat deal. we will discuss one of our top stories, the applications of the win in brazil. we are joined by the citigroup had of latin america economics. this is bloomberg. ♪ ♪

welcome back. brazil has elected a far right candidate as its next president. he told supporters he will trim ,he deficit and public debt likely to please markets. we have the head of latin citigroup.nomics at let's take a look at the gtv chart which shows brazil's

itscit in percentage of gdp. we know its surge in 2015 and 2016 is leveling off. how important is raining in the deficit for investors? ernesto: it wasn't a surprise he won. now the markets will focus on what he does on the fiscal. you show, there is a huge fiscal challenge for brazil. words that of home was announced, pension reform. it is essential for brazil to ensure sustainable growth going forward. we saw 7% of gdp will require lots of effort by the man. shery: last time i spoke to michelle temer, he said he would try to push pension reform before he left office, before january 1. now we see the latest headlines

that he has offered bolsonaro to push this reform. do you expect any change? ernesto: the outgoing president something from the incoming president, but we don't expect that to happen. the political equilibrium is difficult. , thee close to bolsonaro people who will be his finance ministers do not like the details of temper's reform. -- tmere's reform. there is a possibility of reform. saw the currency relatively in june, something called the rally. does that mean it could continue or a lot will hinge on how he interacts with congress? ernesto: [indiscernible] there can still be a small rally

in fx, and the equity markets, in rates, but it has been mostly priced in. now the markets are focused on the specific details of the cabinet and the policy proposal. the market likes of bolsonaro very much as opposed to 40% of resilience that are opposed him in the presidency. the markets like him because of , hisegulation speech privatization policies, and because the pension reform as we discussed is the biggest issue, he probably will want to do it first before anything else. shery: what happens if they can't get pension reform? brazil is one of the most generous states when it comes to welfare. ernesto: if you look at the microeconomics of brazil, everything looks good. the economy is in recovery after a big depression, externally counts work well, but fiscal is

not good or the market would not like at all if we don't get news on the fiscal and the pension, the first half of 2019. it will be bad news because debt will touch 80% of gdp soon. those levels for an emerging markets, it is difficult territory. haidi: brazil on what the rest of emerging markets have been subsisting on his tightening path and global headwinds have affected e.m.'s as well. how particularly vulnerable is brazil in that? ernesto: not so much except for the fiscal we have discussed. they haveflesh -- strong fundamentals with recovery going on. we are excited -- we expect 1.4 to growth this year something higher next year. external accounts are rocksolid

with the current account deficit and brazil is financing in local markets. in this difficult environment for emerging markets, brazil would be ok if they sold the fiscal, and this is where all eyes will start focusing now bolsonaro is officially the president. uphillhe does have an that all in terms of amount of resistance and division in the congress, the lack of detail he has given about his reform policies and concerns about lack of experience his finance minister has. do you believe it will come together in a coherent strategy? doing pension reform is difficult everywhere. we saw in brazil have difficult it was for president temer he had lots of experience in congress, the putting coalitions together. now we will see about bolsonaro who doesn't have a long experience as september -- as resident hammer.

the names that have been floated for minister of finance and chief of staff are market friendly and certainly capable of doing a big tension reform. that is why the eyes of the market are focusing on brazil for starting now and all of 2019 to see advances they are doing in terms of the politics of pension reform. haidi: looking at live pictures of celebration, jubilance and celebration. a short while ago we have heard from jboss and are essentially hehis victory speech saying will be a defender of the constitution, democracy and freedom, saying it is a promise not from the words of a man, it is an oath to god. it is important for that given concerns about his feelings towards democracy and the concerns over how divisive this campaign has been for the country, ernesto.

that was the big concern. they like him because of market friendly policies to turn brazil from left to right. we have a good fiscal account, target that they will put upon, but the concern was his democraticp with institutions in brazil. his victory speech was meant to country.eople in the it was a good speech but same as mexico when we have a good victory speech for the markets, people are focusing on details. that is what will happen in brazil on the details of his policies he will try to do. shery: how much should we focus on trade tensions between the u.s. and china given they are brazil's two largest trading partners? ernesto: it is difficult for the rest of the -- brazil and latin america, but there are positive aspects emerging from latin

america that you have the u.s. and china fighting and don't want to import from each other, there is a space for countries like brazil. we have heard anecdotes and stories of resilience exporting more to the u.s. because they don't want to buy from china. there are things we should keep watching. shery: they just a. great having you with us. the head of latin america economics at citigroup. we have breaking news on the bloomberg, getting japan september retail sales data. .2% month on month, in line with estimates. when it comes to year on year, figures came in line with estimates, rising 2.1% but for both numbers, they were a slowdown. we had the natural disasters in japan including typhoons and earthquakes affecting those. more ahead. this is bloomberg. ♪ this is bloomberg. ♪

this is daybreak asia. i am shery ahn in new york. haidi: let's take a look at how the aussie markets are tracking so far. seeing greene shoots after falling into a technical correction last week. we saw the asx 200 wiped out $55 billion worth of market value we have the aussie dollar moving around $.71 u.s., support from prices andon ore aussie bonds hedging higher as well. investors are preparing for a few data points this week. september building approvals are due on tuesday followed by third quarter inflation and the september trade balance thursday. checking in on stock movers, let's check it out. you have health care shares leading gains on the benchmark, sector around 13% this year,

outpacing gains for tech and consumer staples. with individual stock movers, i want to highlight linux. malaysia's regulator will concern -- consider the rare metals miner as part of operations. oil player sees fiscal 2019 output and earnings coming in new the top of its target ranges. servicesnvestment sliding earlier as much as 7.3% as the stock was cut to underperform at credit suisse are those are some of the movers early on in sydney. shery: sophie, thank you. tom the next hour, we speak a woman from goldman sachs who thinks japan including the boj's for tokyoble move traded stocks. the japanese market open is next. look at futures trading now. we have seen the nikkei fell to

the lowest since march this year and also the topix down for a.g. sessions. this is bloomberg. ♪ ♪

haidi: i am haidi stroud-watts in sydney where the major markets have just opened for trade. shery: i am shery ahn. sophie: i am sophie kamaruddin. welcome to daybreak asia. haidi: our top stories, asia-pacific markets facing a mixed start at best, their worst month in the decade seeing the dow and s&p 500 close close to correction. signs of a slowdown in china, industrial profits declining for

a fifth consecutive month in september. shery: a right-wing candidate sweeps to victory in brazil after a campaign dominated by crime and corruption. most asian stocks are gaining ground in early trading session despite the fact that u.s. stocks fell in the last session on friday. let's see how things are shaping up. week, asianr last stocks are looking mixed. the nikkei 225 said to snap a two-day decline. sales coming in with expectations falling on the monthly basis for september but that is not really the optimistic we are seeing this for. august -- aussie shares are getting shares -- ground. and the kospi is up .1% after the benchmark fell into bear market territory. we have had is appointing third-quarter earnings and

sentiment, along with prospects of a bok rate hike. we have reassurances for regulators. the fx see saying they will put in measures to stabilize capital markets. regulators saying of fun will begin investment early november. we saw the tech heavy small-cap [indiscernible] hall to in october 2017 low. the anz is off .1%. with bolsonaro winning the brazilian elections, we check in on the mesa -- mexican pao, seen as a proxy -- the mexican peso, seen as a proxy. it is a little lower. watching for reaction in an exchange traded fund from japan would fall as the brazilian and smart. when you look at the broader view of that etf, it has jumped 20% since hitting a low in september. stock figures in sao paulo are

expecting the rally to continue. for investors remain less convinced. haidi: sophie kamaruddin on the markets. first word news. haslinda: the names have been released of 11 people murdered in saturday's mass shooting at a pittsburgh synagogue. the victims were aged between 54 and 97 and included two brothers and a married couple. the accused gunman is due to appear in court monday to face 29 charges. he made statements about genocide and killing jewish people. a law enforcement official said he owned his guns legally. the british government presents the budget later with the chancellor warning a no deal brexit might mean extended austerity. there is a hot split that would slow the u.k. to a standstill there wouldeaning

have to be a new spending plan to support the economy. he suggested the bank of england need to consider interest rate changes. allows us a deal that to continue trading with our european neighbors with low friction at the borders and kind the borders will minimize any negative effect on the u.k.. >> there will be negative effect >> it will minimize it. whether it is negative or positive, i can't say. haslinda: support for germany's governing party plunged in the latest state electoral test with a christian democratic union suffering its worst shooting in hesse and 30 years. chancellor merkel's main ally the christian social democrats got the lowest share of the vote since the second world war. the green party doubled support and the far right afd got a seat for the first time. callsarabia is rebuffing

him turkey to hand over the suspects in the jamal khashoggi murder, saying they will be tried in the kingdom. president heard of one called for them to be -- president erdogan call for them to be extradited but saudi arabia says they will be prosecuted at home. he also described media coverage as hysterical. 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 am haslinda amin. this is bloomberg. shery: right-wing candidate gyre -- right-wing candidate bolsonaro will be the next president of brazil. he will take office anywhere a first. let's cross to brasilia. so in his victory speech, he the he will try to pacify

country. how challenging a task will this be after a divisive and emotional campaign? will be enormous. one of the reasons there was so much attention paid to these speeches was it is the most divisive confrontation and violent campaign in brazil since its return to democracy in 1985. both the narrow had 10 percentage point lead. it is more or less in line with expectations, some less than the polls had suggested, but a solid victory over the leftist rival. he tried to touch all the main points. he tried to speak out in favor of unity and said result was a country for everyone. this comes after the racist agenda slurs he has been using during his campaign. there is also something for financial markets. he pledged to tackle public

debt, reducing public deficit, reduce the size of the government of the state. so probably his speech will at least try to calm down both investors and brazilians who were concerned about his coming to power. shery: with his economic policies, his allies had a strong showing in seven congressional elections. does it mean we have -- he has more leeway to pursue his agenda? >> it does on paper. there are some 30 political parties in the lower house great he has a lot of negotiating, little experience. his finance minister have little experience as well. it will not be an easy task to forge a working majority in congress, particularly to prove controversial issues like the pension plan. foremost needs to tackle

exorbitant spending on pensions. the question going into this was the magnitude of his victory. is it commanding he would be able to use that as a mandate to wrangle with the rest of congress? >> it was lower than what the polls suggested but 10 percentage point lead over your is still good. he has a party that could become the largest. start a pretty solid head to form a majority government if he does it right. touching on some of the points people wanted to hear. leave there does this worker party? ways the nailme in the coffin for the workers

party. this is the first time since 2002 they have lost the national election. the leader is in prison. their presidential candidate lost, so they are not entirely gone. they have a large caucus in the lower house of congress. it certainly was a severe beating for them. haidi: appreciate your time. thank you so much for that very latest on the brazilian presidential election. let's look at how the markets react to the win. roslyn, very limited way you can asian investors pay we have seen them rally on expectations of a bolsonaro win. their expectations are not terribly based in a lot of substance in terms of his record and details of the economic policy he has been talking about. reporter: good morning.

what we have seen leading up to this election is financial markets think he will be good for business, and you have seen a decent rally in the equity market in brazil, a strengthening in the brazilian currency as well. it is clear people who put their money to work in financial markets, like bolsonaro as the new president and they are happy . in the short-term, the fact markets have gone up so far in advance of the vote, and it is no surprise he is likely to win, even if these percentages are slightly below what was thought , it is still good for financial markets, but there might be profit taking in the short-term. we have seen a run-up where people say, good, that is it, it is priced in. what more can we expect? we have to see what people he appoints, what policies are in

place, but signs are for the medium term it is good for brazilian financial markets. you look at the tentative positivity in asian markets so far. looks like they have saved of themselves to live for another day, but could they prevent the selling despite being a massive week for earnings and data. -- for data and the bank of japan as well? reporter: absolutely. we saw a very weak finish on wall street at the end of a week when people may have thought the markets had already fallen off to represent values for people am a doesn't seem to be the case yet. it has been a dreadful month. people are saying the way the tech market is crumbling in the united states is beginning to weemble the kind of selloff saw in tech at the beginning of the 2000's, so a gloomy outlook. in the background we see no progress between united states

and china, one of the biggest risks were global growth. it is a pretty gloomy outlook. the fact that october is almost finished, we have a new month later this week, that could be a reason in the short-term for a flooro actually put under this market. maybe we will get relief simply by the fact october is coming to an end, but the big picture is not that great. what about china? will it provide any new catalyst this week? we know equity volatility is not great when it comes to the global markets either. reporter: no, exactly. are having arities battle with their currency. there is speculation on friday. they had to send in reinforcements to stabilize the yuan. there was a lot of talking from the pboc deputy governor and

speculation there were people in the market trying to strengthen it. this could be temporary. if the situation continues where china growth is not good, early is is the of october growth is not encouraging. we will see more with pmi later this week. but it states the case the chinese economy is heading towards a soft landing, then the currency will have more pressure. there will have to be a trade-off. china will have to decide at which point it relates on the currency to help its broader economy, or can it continue with targeted measures to try and stimulate demand? it is difficult. maybe we will get more clarify -- clarity at the g20 if president xi and president trump meat, but they night -- might not be out to discuss trading at that meeting. the outlook is cloudy, and there is nothing on the horizon to

suggest we will get any relief. shery: thank you so much for that. mliv strategist mark cranfield. you can follow him at markets , on on the blog, mliv go the bloomberg. when it comes to another catalyst that could affect the markets, we are seeing next funds, and etf from japan that follows brazil's stock index, rallying 13% on the news that bruce tomorrow -- bolsonaro has been elected president. the white house plays down prospects of a trade breakthrough between president trump and xi jinping meeting next month. haidi: after last week's market carnage, asian equities have room to fall. our next guest makes his bearish case next. this is bloomberg. ♪ ♪

asia. this is daybreak i am shery ahn. haidi: our next guest says asian equities have room to fall and em currency volatility will remain as well. is a market strategist. chart to bring up this that shows not just the s&p 500 but global stocks as well. when it comes to u.s. equities, they are having their worst month since 2009. it looks like it will be stemmed . what has fundamentally changed in the last 10 days or so. -- or so? >> markets were pretty willing to price in the fact u.s. rates were climbing. hadbig difference was we

the likes of caterpillar and 3m reporting. pressures looming in the u.s. economy, not only that, the effects of the trade were certain to appear on the bottom line of these -- are starting to ofear on the bottom line these companies. for a while i thought it would prospectlived, but the it will be away from that has stimulated selloff. haidi: in a lot of ways this reversion, given the have gone up so quickly is not so surprising. is there pockets of opportunity or further declines before you would try to hit those markets? >> a market correction like this is easy to draw a broad stroke

about the whole thing some kind of cataclysm. it will not be the case. it functions in such a way there pockets of opportunity to be found. saying it as an index trader, i think room for downside to go, because this is largely structural shift in markets. we attribute very short-term catalysts, but at the end of the day they are perks in the bubble to create the change -- pricks in the bubble to create the change. there have been reports out of wall street. global rates will have to increase, and that will put pressure on global equity markets as equity drives up. -- liquidity drives up. opportunities that exist in markets, yield assets will start to me back into vogue, value stocks as well. overall the sentiment is to the

downside and quite bearish, and it will be a while before the correction plays out and we can see what was old news being played out and shaken out of markets and new news priced in instead. shery: earlier the charts show how badly beaten u.s. markets have been. one sector that has been badly hit was this chart showing how tech has had its worst month since 2016 or so. u.s. areif outperforming their chinese peers. does the u.s. tech still have more leeway to rise than chinese tech, or are they near their bottom? techthink in terms of u.s. , looking more at chinese tech, chinese is complicated because it is embroiled in a trade war and concerns which can be noise, but it is opaque.

if you look at the u.s. tech number there is less breadth to the market if you use the nasdaq as your trojan measure. -- chosen measure. they are preparing to park money and save cash returns. you look at the crude benchmark, a group -- delivering a greater yield than what you are seeing over time in most stocks across the nasdaq are definitely less appetite for the growth momentum. we have the earnings out of alphabet and amazon. they effectively downgraded their outlook on what we see .oming up into 2019 it will be value and tech stocks -- in tech stocks ultimately but across the whole space we will see a diminished appetite for those companies, then we start weighing off the risk. shery: how much [indiscernible]

our chinese markets? is the great -- growth outlook still there? >> policymakers could turn on the fiscal taps and the pboc to stimulate the economy. risk is down. while the yuan is devaluing, we won't see a market jump too much. but there could be reversal. sentiment would have to clear up. shery: thank you so much. ig market strategist. warming relations, we wrap up witho abe's visit to china an idea of whether he made -- this is bloomberg. ♪ is bloomberg. ♪

haidi: this is daybreak asia. i am haidi stroud-watts in sydney. shery: i am shery ahn.

relation seem to be warming after shinzo abe became the first japanese prime minister in seven years to make an official visit to china. president trump will be holding talks with xi jinping next month. we are joined by enda curran. what was the result of this summit between shinzo abe and xi jinping, and can they promote a united front? was a significant development. there were agreements of cooperation in areas from the currency swap arrangement to cooperation in ocean search-and-rescue. but it is less about the agreements that were made between the two governments and more about the fact it really happened at all despite years of tensions over territorial disputes and other issues. it was a great amount of progress that the minister

operate -- prime minister abe could go to beijing. it also puts a spotlight on the kind of tensions the u.s. is generating in asia at the moment. president trump's hawkish trade strategy and coming out of a tough look at the u.s. relationship with japan. it is pushing japan and china closer together. you wouldn't want to overstate what is happening. the remains plenty of differences between both governments, and none of the tough territorial issues are near resolution, but it is a better place than it was two years ago. in terms of the trade issue, we have been looking at the g20 meeting between president xi and trump and providing opportunity to get off this ramp of escalation. might noteports trade

even be something they discussed. enda: there is a lot of managing of expectations pre-we have seen that before. we could be surprised. the message from the u.s. is is likely there will be a deal on the table. we know the u.s. concerns go well beyond the deficit. there are more structural issues such as a potential of ip and technology transfer, but china's whole economic strategy is unlikely to be resolved in one meeting between presidency and trump. but we know china is willing to make, to offer some olive branches. we know they are willing to make concessions on ip production and technology transfer officials state that. whether or not the two sides can reach common ground that states the hopes in washington -- states the hopes in washing -- sates the hopes in washington we don't know.

can they agree towards a platform to go forward? haidi: thank you so much, our chief asia correspondent. lots more to come. asian earnings next. this is bloomberg. ♪ this is bloomberg. ♪

it is 8:30 in hong kong and we are an hour away from the opening of trading their purity -- trading. a little bit of caution in the a's of dutch asia-pacific good they are trading up by half a percent after a selloff last week. not a strong lead from wall street on friday. a big week ahead for earnings, china pmi, and the latest indication of how the trade war is playing out. and it is a bank of japan week as well. a lot going on on the agenda. not giving earnings,

us a lot of direction for the market. it seems that investors are discounting a surgeon profits these days, but a lot to come at a time when the s&p 500 is headed for the worst month since 2009. you are watching "daybreak: asia." let's get to the first word news. haslinda: the brazilian president-elect is promising clean government in what he calls the acid vacation of the country after his victory. the former army captain had almost 56% support with almost all of the votes counted. he also pledged to reduce the size of government and reform fallen -- reform foreign policy good -- policy. germany, chancellors mark -- chancellor merkel's main ally one a lower share of the vote

since world war ii. the green party almost doubled in support, and the far right one seats for the first time. thailand's main political party has picked a main chief. they have named the leader and will decide later who will be the candidate for prime minister. the new leaders name was the only one on the ballot. an election is expected between february and may of next year. the weekend brought more signs of a slowdown in china. industrial profits declined for a fifth consecutive month, running just over 4% compared to a 9% rise in august. the slowdown comes as industrial output grows and factory acceleration decelerated. profits rose 14% from a year earlier to 1700 $15 billion.

24 hours a day powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. . howet's take a look at asian markets are shaping up this morning. let's get over to sophie. at the minute, we are seeing some gains across the region. sophie: it seems that with a lack of catalyst, we are seeing a more cheerful note this monday, asian stocks gaining ground after the roller coaster ride last week sparked in part two -- in part due to concerns in tokyo. the nikkei 225 snapping a decline, utilities leading gains and the yen off the back foot by a 10th of a percent. week, there was a wipeout. 50,lso have the nzx

recovering a touch after falling to a years low last week. we hadwake of a selloff, korean regulators saying they will take measures to stabilize capital markets. of axample, the creation scale up fund, flagged earlier this week. that's to start in november. that is the macro backdrop. let's look at some stock movers of note across the region. in tokyo. falling the most since may 2016. they reported better than forecast profits for the second quarter but offered a forecast softer than expected. hitachi chemicals gained the loss of the most ground in four years. reports.r media

coway is best known for water purifiers and air cleaners, and the offer price is a 22% premium to the friday closing price share. >> thank you. an insurance company is reporting third-quarter earnings today. our analyst is joining us now for a preview. expect for their numbers, especially after its peers reported last week? >> it has been some choppy times for chinese insurers. when we look at the numbers in the past couple of days, we have net profit weaker than expected, at least compared to our expectation, largely due to investment losses, because the sluggish stock market in china. okthe same time, peers did during that time. that goes to show the different

kind of investment strategies or capabilities between the two companies. an, theyomes to ping are in the safer camp. we expect them to be relatively stable. it has a banking arm, so profit wife, -- so profits should be more stable. on the life insurance we still expect headwinds in terms of investment losses. his -- to compared to its peers, how do we expect it to have done? steven: the key metrics on the life insurance side would be [indiscernible] an has a decent quarter. we expect that to continue because of a relatively stable asian enforcement -- stable

agency force. likeeed that during times a week sentiment in the stock market. we have seen that in terms of building up at china life as well, but a very mild increase, about 1% or so in the quarter. well in thed pretty third quarter and gives us the confidence that ping an will be ok. a key metric will obviously be an has that -- but ping been reporting operating profits and we expect that to be relatively stable as well. haidi: you look at the trade war, the domestic slowdown, the fed doing its thing, the pboc adding stimulants. what is the outlook for insurance in the fourth quarter and next year? steven: one of the key drivers

for the bottom lines in the near term would be the bond yields. we have actually seen some decent bond yield recovery in china in the past couple of quarters, and what that have done, it allows insurance companies to believe what they have a short up in the past two years or so. if that momentum continues, it should be a positive tailwind for life insurance. however, the burning question is still the equity market. not turn around, the sentiment in the near term will not be any good. but just going into 2019, i think in terms of the new business value front, on the life insurance side, it gives them an easier base comparison for the first of of this year. that's basically what's going into 2019. haidi: thank you so much.

we are looking ahead to a big week when it comes to earnings. in asia, hsbc is front and center today. third quarter results out today about midday in hong kong. investors will be watching the key.ting jaws, a we will have a -- we have a preview. >> we will be focusing on the job number, that we will try to well on guidance as asia expansion. 8 p.m. -- gets a lot of its profit from hong kong, as well as the u.k. they are its two main headquarters. 67% of operating profit comes from those two markets alone, and a key part of the strategy is to expand to other parts of asia, which contribute 77% of a pretext profit in the first half.

just looking at what the market is looking at today and these number, it is jaws, income growth versus cost growth. in the first half it was negative. a number of banks say if we get a third straight quarter of negative jaws, it would send a negative signal. but the bank has been signaling they are likely to turn positive jaws in the first half. the me run through what a few of the big banks are talking about. goldman sachs says eyes will be on third-quarter revenue momentum, morgan stanley agrees. good operating leverage would be key to meeting the positive jaws guidance. saysberg intelligence again, the third quarter, if they reported a third-quarter of negative jaws, it would be received by the market very negatively, and a key swing --tor could be the top line with the top line could be with the foreign exchange market. deutsche bank sees fx rates

hitting-- sees it negatively. they see no impact yet from the trade friction and the geopolitical issues. keep in mind, as i mentioned at the top, with hong kong and the ,.k., the two big markets contracting 67% of operating profit, you have to keep in mind the trade war, the slowdown in china, and the looming brexit. haidi: lots to think about. what about hsbc's plans to list in china, do we expect to hear any more? we would like to, hsbc has signaled they would like to be the first company to take advantage of the new program that could be launched. as early as december, and hsbc is saying they would like to be the first to list in shanghai under this new link. this is part of the strategy of

expanding further into asia. that would be a good first step. were also hearing that securities could be opposite, listing in london. shery: thank you. someonep, we speak to from goldman sachs, and look at all things japan, including the boj's next possible move. a look at the japanese markets is next. this is bloomberg. ♪

♪ this is "daybreak: asia." shery: the boj will maintain policy this week that may use greater flexibility in yield movements as a tightening measure. joining us is a chief equity

strategist, and kathleen hays, who is covering the boj decision this week. kathy, thank you for joining us. i want to start broadly on a question i think markets are thinking more and more, a big one for central banks -- tightening financial conditions. if you look at the average of financial conditions for the , it isapan, and europe heading for its biggest monthly drop since 2015, according to bloomberg calculations. banks, something central especially the federal reserve, needs to take heat up? i think in terms of the variety of metrics and watch signs that the central banks, including the fed, might be monitoring, financial conditions and the momentum of the various

indices globally are clearly one of the most important metrics i think they will need to monitor. obviously the heavy correction in global stock markets has played a role in the tightening conditions, and the fed's moved to tighten in recent quarters had an effect as well. in the broader context of a global growth and what is happening to conditions on the lending side, for financial institutions come on top of the metrics i just mentioned, i think central banks will be very mindful of how these conditions are changing and shifting across the broader landscape of what they are looking at in the global economy. so yes, of course it is an important metric to watch. kathleen: at what point does it slow central -- global central banks down? we know that the boj is not

going anywhere fast, but what about the federal reserve, with the rising bond yields in the u.s. so key to the stock market selloff in the u.s. that has spread around the world? again, it's very important for them to monitor financial conditions, but at the same time, they need to also be very careful to watch other metrics of inflation, for instance, wage inflation, asset inflation metrics, property around the world as well. on the one hand, they need to be very careful about the pace of the tightening they are conducting amidst the broader inflation metrics, including financial can -- financial inflation indices. in thet they expect global landscape going forward. we have seen in recent weeks that more on the mixed side than the all engines on fire side. i think with more mixed macro

data, central banks globally will be looking carefully at these conditions. unitedsaid that, for the states and the federal reserve, they will probably continue the tightening path into next year we see like -- because inflation continuing to increase because of pressures there. but a lot can change given the fluid situation we are seeing in at least global asset markets and the last couple of weeks. kathleen: even fed officials make it clear that they are data dependent when it comes to the economy, watching the stoxx and not concerned yet. at this week's boj meeting and -- meeting, do you expect the global stockmarket rally to be reflected in the monetary policy report, anything we hear from governor kuroda and that important press conference after the meeting? kathy: i think it is a bit too recent, the global stockmarket

selloff to be reflected that directly in any comments that may come out of the governor's remarks after the meeting that closes this wednesday. i think they will be very howful on how they phrase they see the economic landscape in japan, what is their outlook for example for gdp growth. our economists expect them to bring down the forecast for japanese gdp in 2018 on the back of slower growth in china am a natural disasters -- china, natural disasters in the summer, etc. you might see reference to volatility in asset markets globally. they just released their financial stability report. he might also make reference to some of the conclusions in that piece that referred to what happens if negative rates, low

interest rates remain intact for a longer time, what impact that could have, for example, on the domestic banking sector. were not expecting any major given there are more volatile conditions in asset markets globally, more mixed rate on growth globally, it is quite likely he will make some reference to that in terms of adding a cautionary tone perhaps to the forward prospects. i'm sorry -- go ahead with your question. i have a question regarding how keenly you think policymakers at the boj are are,ing what the trade war the macro implications, especially when you look at the

implications for the asian supply chain. will that derail or cause them to tweak their policy? i think at this juncture, again, it is still too premature to judge, you know, the effects of the trade friction thus far, even on japanese corporate supply chains. i guess it earlier, i think in the mix of things outside of japan that are looking volatile and uncertain, i think it is likely that the bank of japan may reference these more unstable and uncertain conditions globally in terms of whyonalizing or explaining it is appropriate for the bank to maintain an ultra lose framework longer. i know people are expecting some tweaks to the framework somewhat similar to what we saw in july, but i think compared to july, it is safe to assume there are more uncertainties in the global

landscape and not less. that provides very little if any change from the outcome of this week's meeting. in this macro environment, what are some of the catalysts investors should be following for their strategies? kathy: i think from a japanese stock market perspective, obviously it has not been immune to the global equity market correction of recent weeks, but if we look at the fundamentals, we are heading into the peak of the earnings season right now. we are expecting that earnings are going to come in again, not explosive growth, but decent growth, mid single-digit range. we also expect japanese companies that are still sitting with large pulls of excess cash to announce increases in buybacks and possible increases in dividend payments as well, which should be favorable for shareholders. japan is the only developed market that has risen over the

past almost six years, entirely because of earnings. shrunk.ation aspect has clearly investors are already assuming that growth is not sustainable, especially at the etf level, that's where we think the investor base is wrong, and where there are interesting opportunities to be had once the dust settles in the japanese stock market. what are a couple of your top opportunities? i think a lot of people have been wrong not being more confident on the japanese stock market, and also, if banks are showing signs of excess that the financial stability warned about, -- about. kathy: one of our top investment is looking to boost -- looking at the boost to the

economy, it is and over tight job market, limits on overtime hours and employers have no choice but to invest in i.t. to boost productivity. a lot of companies in the space have frankly gotten sold off quite hard. a lot of them exposed to the chinese market as well. i think looking to reengage in some of those names is one thing that is still one of our favorites. your question on banks, we find it still difficult to pound the table in this sector despite how cheap they are, largely because of our house view that we don't expect any significant alteration to the boj monetary framework for the foreseeable future. until we get there, i think it will be tough to see a for stable -- see a sustainable rally. not that it won't come at some point but we think it is early at the structure. always appreciate your .ime and insight, kathy matsui

you can get a roundup of the stories you need to get your day going in today's edition of daybreak. bloomberg subscribers can find on your terminal, and on our mobile apps. you can tweak the settings. the top story, the presidential victory in brazil. you can get the news on the industries and assets you care about by tailoring your preferences. this is bloomberg. ♪

♪ this is "daybreak: asia." haidi: before we headed over to torkets: asia," are going take a look at markets trading this morning. racing modest upside after a horrible week for global equity. about -- stocks are up 1/8 of 1%. still in the bear market the seeing a little bit of upside. shery: that is it for "daybreak: asia."

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rishaad: this is bloomberg markets china open. yvonne: higher with markets with some relief from the selloff. -- and in hong kong in china. and disturbing to victory in brazil after a divisive campaign dominated by crime and corruption.