>> welcome to day break australia. i'm in melbourne. >> i'm in bloomberg's world headquarters in new york. >> and i'm in hong kong. we are counting down to asia's market major open. >> u.s. stocks dragged down by tech amid new fierce that president trump is ready to ramp up the trade war with china. the s&p fell sharply from its all-time high while the dow dripped briefly into correction territory. the nasdaq hit its lowest since may. the president will slap tariffs

on all chinese imports if there's no progress made at next month's top-level talks. >> let's get a quick check of markets here in the u.s. of course that report that the u.s. is preparing for new tariffs come december, early d.e.a. december, on all chy nice -- early december, on all chinese imports has hit sentiment. we saw the dow falling more than 200 points while the s&p 500 near correction territory and also near a new round number. 2,600. we had tech and energy stocks leading the decline. so the nasdaq now down for a second consecutive session, down 1.6%. of course the focus this week on earnings, we have facebook, we have apple. not to mention the october jobs report also out on friday. so all of this shaping up sentiment and what will happen in the asia markets? >> skepticism looks set to continue as we are seeing that nervous monday session extend into the tuesday session here with futures pointing lower

across the board. as you point to dow, we have the renewed tariff fears and also the ongoing strength in the u.s. dollar. as well as anxiety over earnings. so that's adding to that skittishness among investors. of course when it comes to the central bank front, plenty for the b.o.j. to consider when it kicks off its two-day policy meeting this tuesday. over in seoul, looking to extend declines at a december, 2016, low and aussie shares look to resume their losses after that brief respite we saw on monday. october shaping up to be the worst month since the height of the financial crisis. when it comes to the earnings calendar, it is looking very busy indeed. let's check in on some of those big names. the highlights today from japan include advances, so eny, honda and anyone tend -- sony, honda and nintendo. we'll hear from china's banks and brokers, they'll round out their earnings roll calls today. plus we have the likes of

petrochina, sinopec and china outhern due to report. 7:30 a.m. hong kong time, we'll get japanese jobs data. an hour after, that it's australian building approvals and at 10:00 a.m. hong kong time, it will be south korean department store sales due out this morning. >> thank you so much. we'll see how all of that data shapes up asian markets. but here in the u.s., it was a wild ride. the dollar rose, stocks rebounded. but by the close, all three major benchmarks had the -- had erased their gains and then some. to quote one chart watcher, it as a technical disaster. we haven't seen a reversal like this in years. >> no, not since 2015 where you see a complete reversal on s&p. that is negative technically for the next day's trading. let's go right into the bloomberg. because what you see in our charts and you can find these on

g.t.v. is what we've already basically said. it's one of the decade as he worst months. look at this -- decade's worst months. the bleed has tnd where many thought friday's decline -- continued where many thought friday's decline would erase some of this. take a look at the s&p itself. the last five days. i'm giving you a five-day chart here. you can look far to the right and see just as we were about 11% from the recent all-time high, we've bounced off the bottom. that was in the final 15 minutes of trading. the final hour of trading, all three benchmarks as mentioned. the nasdaq, the dow and the s&p were in correction. let's take a look at the snapshot. again, what you see is the s&p 500, info technology index the biggest drag. in the nasdaq, 100, that's where all the tech stocks are, that's down better than 2%. that was the story of the day. the tech. >> let's talk about that.

we are now seeing a lot of hedge funds holdings. >> yeah. we are. a lot of the trades have been called hedge fund hotels because so many hedge funds have pretty much moved into that space. let's look if we can at how they declined in these stocks were pretty severe. and again, these are off the lows of the session. because they came back in those final minutes of trading. take a look at some of the other big movers. and tech lays heavily there. we saw video game makers selling off and really leading the decline along with tech. no boeing down on the airline disaster. one of the few exceptions, the software cloud company rising because of the i.b.m. acquisition. and finally, let's look at the nontech, nontseng stocks. big moves across the board. macies, which is a really battered retail stock, showing big gains. good year tire, hershey, a lot of food companies also, and real estate holdings amongst the

moves higher. >> there's now growing debate on whether the fed will come to the rescue of stocks. or whether we'll see a surge in corporate buyouts after these earnings-related blackout period ends, right? >> yeah. some would say that's wishful thinking. there is a growing view that perhaps the december rate hike may be called off. although a lot of economists will say, forget about what's being called the fed put. that's baked in the cake. let's go into the bloomberg. the vics is why they're starting -- vix why is there's starting to be questions. it's really risen here. the volatility on the stock market, the stock market losses are what many say require either the fed to sort of ease up on the rate hikes or a lot of companies to speed up their buybacks which might give the market a bit of a shot in the arm and much-needed dose of confidence. again, the debate starting to row on those fronts. >> that was in new york. let's get you first word news.

>> thanks. data from the cross indonesian airliner should the plane hit the sea at hundreds of kilometers per hour. the flight plunged from 1,500 meeters in just 21 seconds. it was carrying 189 people and all are feared dead. shortly after leaving jakarta, one of the pilots requested permission to return to the airport. that indicates the crew may have been struggling with some type of failure. angela merkel's confirmed she'll stand down as leader after 18 years. but says she will remain as chancellor for the rest of the current legislative term. that would mean she would quit in 2021. merkel says she won't seek any other political office. she's in her fourth term as chancellor. but her government has been weakened by infighting and coalition parties were punished in recent state elections. turkish prosecutors discussing the khashoggi killing and

turkey's khashoggi killing and turkey's demanded suspects be handed over. the two sides is announced a joint investigation yet turkey has leaked evidence to the media n an apparent attempt to put pressure on riyadh. saying a saudi hit squad flew to istanbul to kill khashoggi and then tried to cover it up. as new home sales cooled in hong kong this month, yet another sign that the world's least affordable property market may be heading for a correction. the value of transactions so far in october is $1.4 billion u.s. that's the lowest level for 16 months. once holiday distortions are excluded. reality says the numbers of deals stands at 1,1 30rks down by almost half from september. global news 24 hours a day on air and attic tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ >> thank you. new trade fears were the

catalyst that sent u.s. stocks lowering. investors were spooked by a report that the white house is preparing to announce another round oftary i haves on china. it all -- tariffs on china it. all depends on meeting between president trump and xi at the g-20 meeting next month. we have the latest from washington. i thought they weren't even going to discuss trade at this -- discuss trade at this meeting. what's on the agenda, what do we know so far? reporter: so we know that they plan to meet at the sidelines of the g-20 meeting next month. as you said. it's unclear what they'll be discussing. but these are the two most powerful leaders in the world. meeting. so it's whatever they discuss will be consequential. of course we also know that it's probably likely that trade will come up even if it's not on the agenda. it's been a source of tension between the two leaders for a long time. and whether they can actually come to some kind of agreement is somewhat doubtful in just one single meeting, given all that has been going on between the

two countries and of course the $250 billion in tariffs the u.s. has already placed on chinese imports. >> in the meantime, president trump very much focused on the midterm elections. 10 rallies in eight states over the next week. but of course we have seen some recent incidents, including attempted pipe bombings, also the mass shooting in a synagogue in pittsburgh. how's all this translating to president trump's appeal? >> it's definitely shaking up the race. for one, we know that president trump's approval rating actually did sink a bit. for a while, election analysts were looking at that, eyeing it, wondering if it could buoy republican candidate, potentially stem some republican losses. with that popularity diminishing and voters worried about the uptick in these violent incidents that you mentioned, it's unclear. however, trump is hitting the campaign trail and trying to motivate his voters. trying to get them to turn out. because at the end of the day, whatever happens in this election will largely come down to turnout.

we know that the democrats in one chamber, the u.s. house, are poised to take control of that chamber, according to polling. whether they miss that number that they need to flip the chamber or exceed it or exceed it greatly will largely depend on which party is able to turn out their voters and president trump, as you said, is committed to trying to make sure that he rallies his voters to go to the polls. on the senate side, a little bit different picture. the math favors republicans there a little bit more. they could even pick up a seat in this year that otherwise avors democrats. >> bloomberg news also reporting new and interesting numbers when it comes to campaign donations. the biggest spending so far has been health care. so how much money are we talking about and why is the industry spending so much? what do they want? >> that's correct. the health care industry is spending a lot of money. through their, what are known as political action committees or the official political arm of these companies. they spent $46.7 million in this

campaign cycle. this campaign cycle as a side note is projected to be the most expensive in midterm election history. as elections get more and more expensive, these p.a.c.'s are increasingly contributing more and more it. tips the playing field in these elections toward the companies and the wealthy and big industry groups. among health care spenders, doctors leading farm suit -- pharmaceuticals. but we've seen a wide range of health care issues have been at the center of several campaigns. democrats campaigning on protections for people with pre-existing conditions. republicans trying to rebut claims that they don't support protections for people with pre-existing conditions. and of course drug prices have been at the certainty of the campaign as well. with president trump saying he intends to try and halt the rise in pharmaceutical drug prices. what these companies and industry groups are seeking, probably a seat at the table when major legislation is written. as we saw in the last congress, the republicans trying to repeal

obamacare. if democrats take the chame berks they'll try and -- chamber, they'll try and rebuffer the law that republicans have sought to weaken and health care companies, they just want a seat at the table to make sure that their opinions are heard and potentially influencing any legislation coming out of congress. to do that, they're spending money. >> that's the way the world works, isn't it? greg sullivan there in washington. still coming up on day break australia, we'll be speaking to rio tinto live from melbourne where i am a little bit later this hour. >> plus, templeton global growth fund on where to find value in today's volatile markets. that's next. this is bloomberg. ♪

>> welcome back. i'm in new york. you're watching day break as you trailia -- australia. u.s. stocks hit hard aztec shares stomach tummabled -- as tech shares tumbled.

tempton global growth fund portfolio manager who joins us now from melbourne. thank you so much for your time. so, u.s. stocks sold off today. but many value stocks rose on the day. we're talking about regional banks. auto parts. utilities. insurers. how significant a day is it for the valued trend? >> well, it's been an interesting year to date so far. it's been a very difficult time really since the global financial crisis for values. so there does seem to be something of a change in what we've seen so far in october and, as you say, the day's trading last night for us does seem to be a long those loons -- along those lines but the market has been volatile. tech stocks have had bad periods earlier in the year and then gone on to recover. i think we're optimistic that you are starting to see a number of signs that do show that it's

going to be values time in the sun again. >> is this an indication that value factors will read the markets next leg up or at least offset some of the losses we could see in the coming months? >> if you look at the markets broadly and particularly through 2018, it's really been i think two key parts of global markets that have outperformed. one is the u.s. market, more broadly, you've been in correctional bear market now for a number of the other markets around the world. and that's coming after a period where really since mid 2009 the u.s. markets outperformed by just so far. if you look at markets in europe, asia, japan, they've lagged substantially and so far in 2018, they've already been in correction phase whereas the u.s. had powered on through that. so clearly in october so far we've seen the u.s. seeing the down turn that we've seen in some other markets. the other market has clearly been tech.

which has really been testify lon to most of the other concerns that people have had about global markets through this year. whether it be a slowdown in the pace of economic growth, whether it be rate increases from the fed, and trade fees. tech seems to have been impervious to all of those so far this year. but again, there may be starting to be reassessment along those lines. >> we're seeing this recent selloff being really broad as well. this g.t.v. chart on the bloomberg showing how many of those stocks are now at 52-week lows. we're talking about this percentage of s&p 500 members at 52-week low. we haven't seen this many in about two years. what's the danger of this broad selloff that we haven't seen this sort of bred rggetth in three years or -- breadth in three years or so, that as soon as we breakthrough that new round number, the 2,600, we could see a whoosh downward to retest those february los?

-- lows? >> yeah. as a firm we don't spend that much time looking at technicals i'd have to say. we're very focused on the fundamentals of the company. but certainly what we've seen this year is that notwithstanding earnings growth across many markets, earnings upgrades, which isn't the usually state of affairs. in twebt we saw earnings upgrades -- dwent we saw earnings upgrades -- 2017 we've seen earnings upgrades. it's been bolstered by the tech cuts that scrum through. in other markets we've seen good earnings picture. in spite of that you've seen lots of markets around the world pressured. you've seen price earnings multiples come down. so there's been value emerging after a bull market in many other markets around the world. we'd probably argue that the haws got more room to decline where -- argue that the u.s. has got more room to decline. >> it's a good thing you don't really focus that much on technicals because we have heard that today was a disaster for

technicals. looking at other markets, though, so, we're seeing this trend towards value instead of growth. where in asia can we find those? >> there's plenty of markets which have been under pressure for a while. we've seen how severely pressured the chinese market, both mainland markets as well as chinese stocks listed in the u.s., listed in hong kong, have been. they've obviously been impacted by both the slowdown in the chinese economy, as well as being the prime target now that the u.s. government's resolved some of their issues with the nafta trade. a seeming hiatus with any disputes with europe on trade, it seems and clearly. so news coming out last night was about -- clearly some of the news coming out latest into the -- last night was about trade -- tariff fears. probably one of the other areas of the asian market where we've

seen pressure, korea still looks like a very attractively valued market to us, but tech broadly across the region, while we've seen the fangs and other stocks, tech stocks, particularly in the u.s., continue to perform well, up in this month, we've seen a lot of tech stocks in asia more broadly come under pressure. and they're also looking for apractive, we'd argue. >> thank you so much for -- attractive -- more attractive, we'd argue. >> thank you so much for your time. >> still ahead, we are taking a look at currency calm when comes to the yen. it is holding steady. despite the risk of sentiment we're seeing across equity markets. investors are waiting news from the bank of japan's october meeting. we'll be live in tokyo next. this is bloomberg. ♪

>> in melbourne for the international mining and resources conference taking place here.

>> and i'm in new york. watching day break australia. let's get a quick check of the latest business headlines. regulatory finding says outside investors may not be the only ones pulling money from a bond fund. his family's personal stake in the fund fell to about $566 million at the end of last month. down more than $200 million from a year earlier. accounting for the fund's $6.-- 6.3% loss, that suggests gross may have moved about $150 million of shares. snapchat's parent tumbles on reports that a new chief business officer was hired on friday and replaced on the sunday. sources say the c.e.o. promoted owe harrah, but then changed his mind, resinleded the offer, and picked former amazon sales chief instead. we're told ohara has already left snap, telling colleagues she's going as part of changes to the team structure. struggling commodity trader

noble says it sees a net loss of $950 million to $150 million in the three months through september. that's primarily due to estructuring expenses. >> economists expect the bank of japan to maintain its policy settings when its two-day meeting wraps up on wednesday. so what are investors looking for in terms of signals that the govern core give up bloomberg economic policy -- just a couple of weeks ago, the governor told you about his concern when it comes to government bond markets as being an issue of sustainability. he kind of suggested to us that they were in it for the long haul but they want to make is something they can do sustainably. >> absolutely. i think it's interesting. because this very important tweak that was made in the range of the 10-year g.j.b., its

trading range, he made it clear, it's anchoring at zero. but widening the range up to 0.2% on the top side is a way to counter any negative side effects. including the fact that the bank of japan -- and buying more and more of the j.g.p.b.'s all the time, the market isn't as liquid, it isn't as active. it's clear when i spoke to governor again two weeks ago that this is one of his top concerns and a big focus for the b.o.j. let's listen to what he said. >> markets took it so -- [inaudible] -- plus-minus 10 basis points. so because of fluctuations, sometimes there are sellers but no buyers. buyers but no sellers. market is not good. >> interesting, in the press,

starting with bloomberg news, maybe a small scoop of an important one because apparently there are several officials at the b.o.j. right now who would be in favor of moving that range for the j.g.b. up higher to 0.25%. reporting that they're discussing ways to make trading more active. could we hear about that in the monetary policy report? reuters reporting that they may tweak their bond buying program to maintain these levels. but they're not going to rush them. so we'll see what comes out of that meeting on this very important issue for the b.o.j. >> thank you so much for that. we are waiting on governor kuroda. coming up next, rio tinto c.e.o. joins us from the international mining and resources conference taking place over the next couple of days right here in melbourne. lots to talk about. he's been spending time in

china. we'll be picking his brains about whether the tone of things has changed given the domestic slowdown and given that we may see a doubling down in this trade war. this is bloomberg ♪ .

>> it's 9:30 a.m. here at the international mining and resources conference here in melbourne. markets open for trading here in australia in just 30 minutes' time. it was a whipsaw session. the dow swinging 900 points in the overnight session on wall street. we are looking at early declines when it comes to the sydney trading starting in 30 minutes' time. certainly this volatility and the wild ride continues in the equity markets. >> i'm in new york. where it's 6:30 p.m. you're watching day break australia. let's get the first news. >> thanks. sources in washington say the u.s. is preparing to slap tariffs on all chinese imports. that's if talks between presidents trump and xi fail to

ease the trade war. the two leaders are expected to hold brief talks at the g-20 in buenos aires next month. and we're told announcement could come early in december that would mean the effective billion worth of new duties would be around the lunar new year in early february. china said to be considering a tax cut to revise the flagging auto market. support for a key sector that's been damaged by president trump's trade war. car makers shares surged around the world after bloomberg reported the idea which would simulate a market they've increasingly relied on for growth. b.w. jumps in frankfurt, along with daimler. chancellor has developed a budget promise of early tax cuts and an end to austerity. that's despite weak u.k. growth forecast and continuing uncertainty about brexit. he says the country has reached a defining moment on a hard journey and he views the future with confidence.

24 hours earlier he said brexit might mean an extra emergency budget and prolonged austerity. >> i could report to the british people that their hard work is paying off and the era of austerity is finally coming to an end. >> and the battle of the billionaires has broken out in las vegas. warren buffett and sheldonned aleson are questionnairing -- squaring off over control of the power that keems the bright lights blazing in nevada. a ballot would let customers choose their power provider. that could threaten envy energy which is owned by berkshire hathaway and has a virtual monopoly in the state. global news 24 hours a day on air and at tic toc on twitter, powered by more than 2,700 journalists and analysts in more than 20 countries. this is bloomberg. >> thank you. let's look at the markets in terms what have we're setting up for here in asia. a pretty awful lead from wall

street. had that bloomberg report suggesting that if no circuit breaker is found at the meeting next month, president trump is planning to slap tariffs on a reminder of $260 billion worth of chinese good, we could see wild swings in u.s. markets. let's go to hong kong with a look at how asia is setting up. no doubt this bull market in the u.s. looking very long in the tooth. is this kind of the new normal now? >> new normal perhaps. but everyone's asking, is this going to be the unhealthy correction perhaps for u.s. stocks when it comes to the asia session? a fresh tariff fears will likely weigh as jessica pointed out and as you just highlighted earlier. the u.s.-china trade spat is make itself felt across the board when it comes to ecodata like p.m.i., along with the likes of car sales. but some japanese machinery makers could be fighting them -- finding themselves less affected. this is sales in regions outside of china, picking up and demand growth in other businesses like factory automatic mation. we did get a mixed bag when it

came to results on monday. but keep an eye for continued reaction in those stocks on the back of those results. when it comes to earnings, also going to gauge reaction to western areas, quarterly reports. the nickel player seeing fiscal winte growth cap x rising. origin energy is also tuning up ts report. when you look at the cost sale catalysts that are moving towards asia this morning, we do have on the futures board contracts pointing lower across markets here. new zealand also under pressure. when it comes to highlights on the agenda share, the b.o.j. kicking off its two-day policy meeting today. a slough of earnings from japan s well as korea.

when you look at this chart on the terminal, it will show you just how this punishing october is setting asian stocks for their worst month since the height of the financial crisis. the worst month in a decade. >> thank you so much for that. a check of the markets. let's take a deeper dive into what's moving equities and bonds with our reporter. it was another down day for wall street. of course doesn't bode really well for asian stocks. already facing the worst month since october, 2018. and there doesn't seem -- 2008. and there doesn't seem to be any relief in sight on the tariff front. >> hi. indeed there is really no good news wherever you look. you have the s&p 500 and the nasdaq on track for their worst month of this record bull run that we're seeing.

and that is probably going to most likely set the stage for how markets will open here in asia. asian stocks are already down about 12% this month. and just when you thought things couldn't get any worse, we have this news of the u.s. considering extending tariffs to all chinese imports into the u.s. and of course it comes, it adds factors that have been weighing on investors in october. probably the chief one amongst those is this concern about peak earnings growth. we've seen $8 trillion wiped off global equity markets this month. and there's very, very little solace for investors and the next thing they're actually looking for is those facebook

earnings coming out in the u.s. on tuesday. for any potential relief. but that just seems quite illusive at the moment. >> australia's big banks are set for the worst earnings season since the global financial crisis. so how much is it because of the regulatory crackdown there? >> that's right. it's been a really miserable year for australia's banks. a financial gauge has been worst performer on the local benchmark here. and a lot has to do with the financial inquiry into misconduct, into the financial sector. plus we have a softening housing market here. you have got increasing funding costs that are squeezing -- putting pressure on margins. nd banks have also tightened lending standards amid regulatory crackdown. and because of those things, all

these things are squeezing profits. so you have two of the banks and the national australia bank expected to report their first declines in full-year cash profit since 2016. >> our bloomberg reporter, thank you so much for that. executives from across the mining industry are gathering in melbourne for the international mining and resources conference. of course our very own haidi is there speaking to a number of leaders in the industry. who do you have now? >> i've got a very special guest here with me. rio tinto c.e.o. j.s. joins me right here in melbourne. this is a gathering of industry leaders, top miners, including rio tinto, which is the largest miner in the world. we're going to talk about iron or and how this trade war with china is fading into the narrative. great to have you. >> good morning.

>> you've just come off the stage from your speech this morning. how did it go? what was the tone of the room? >> i think the room was in good spirits this morning, to be honest. it's a very large conference. but the industry is doing well. that is absolutely clear. however, the -- [inaudible] -- operate will change quickly. i'll give you a few examples. the expectation from society. the importance of digital, of new technologies, the expectation of not only all employees but future employees. so the discussion is going to be in the coming days, what do we need to do as an industry? because we're doing fine. the question here is, are we going to find a way to disrupt ourselves and remain relevant or somebody is going to distract us in the real way. that's what the real question is about. the end of the speech was more about rio tinto, what we're going to do in this environment in order to remain vell rant and help the industry to move forward and a few examples of what we're doing is about

engagement of all employees. for example, we're using internal twitter. we have 23,000 people on it every day. that's one aspect. a certains a wect we're doing is we're creating --s a -- certain aspect we're doing is we're creating a lab to think about where we should take the company forward in 10 years down the road, in terms of new type of partnership. as an example, the one we saw with apple and alcoa. so, industry is doing fine. but we are at a crossroads. it's a critical time for the industry. and we have a choice. either we're going to disrupt ourselves in a proactive way in order to remain relevant or somebody from outside will disrupt us. that's where we are. >> you referenced the wiz ard began daff in your speech -- gandalf in your speech. when we spoke to you in august, you were pretty sanguine and optimistic about the situation in china. i know you recently spent some more time there. has anything changed?

what are your clients telling you about the environment, the trade tensions, the slowdown structurally in china? >> i was there with 60 leaders of rio tinto two weeks ago. we spent a full week in china. we had an opportunity to meet with many of our customers, suppliers, partners. we feel pretty good. lots of talks about trade wars. , if you look on the ground they are full. the chinese machine is working very well. what is clear, and it was not real surprising, the chinese government is putting more money into the system. it's pushing the infrastructure. what came as a surprise to us was putting more money at the provincial level. we didn't expect that. but doesn't really matter. if you look at the statistics, china will produce around 975 million tons of steel which is the highest ever. the demand is strong. we're concerned the answer is.

no looking forward, which is more important, is we've got no doubt that china will lead the way in terms of -- [inaudible] -- revolution which means -- [inaudible] -- in terms of copper and some of the minerals in addition to battery technology. so we see significant upside and the other aspect is -- [inaudible] -- even if it's not clear cut what will happen in practical terms, but that would generate more demand for our product. we are a long term business. we're a capital intensive business. we take the long term view. are we overly concerned about the middle to long term, the answer is no. >> you spoke in your speech, changing the way you look at doing deals with partners and even competitors. is that struck sursomething you'd be open to in china? -- struck sursomething you'd be open to in china? >> absolute -- structure something you'd be open to in china? >> absolutely. in order to see if we can find some new deposits in order to meet market demands.

we are open and back to the partnership we saw recently with alcoa and apple. breakthrough technology on aluminum, which will make aluminum a green prufpblgt absolutely a green product. with no co-2 emissions. we're open. >> in terms of copper, are you looking to boost your below market exposure to copper given that the first half of that revenue was still iron-ore? >> over time, do we want to increase our exposure to aluminum or potentially copper? yes. but for us it's about creating value to our shareholders. we don't allocate money, capital, across the company only on the back of diversification. we believe in diversification for shumplete but we look at capital to the best project. over a longer period of time, would i love to have more copper and aluminum and other minerals to support the battery technology that is absolutely required for the vehicles? absolutely. but it would be project by

project. >> in terms of the structure of your assets, are you looking at more divestments over the next 12 months? >> it's always the same question on this one. >> i'm sorry to bore you. >> that's ok. i know the answer, i think. yes. not all our assets -- [inaudible] -- we will continue to try values for some of the assets -- [inaudible] -- at the same time look at the strength of bond sheets. we have the best balance sheet across the industry. we will continue to divest if we believe -- [inaudible] -- however there will be no fire sale whatsoever. we will do it only if we can extract value. the recent transaction with dow chemical is a good example of extracting more than -- [inaudible] -- >> one of the themes of this year in the industry is seeing this move from really i guess caution to growth for the first time. you're seeing a lot of big miners spending, investing, looking into m&a for the first time. do you think that's wise given how much volatility and

uncertainty there is? >> i can talk only about rio tinto. we have a brief on m&a. we will pursue it if it creates value for our shareholders. our view is 0% of the transaction -- 80% of the trns action does not create value. but if -- transaction does not create value. but if it's there we will allocate. are we going to rush into the space for the heck of it, the answer is not. if it makes sense we will look at it. because for us it's very simple we have made a commitment to create value in the short, medium and long term, and we'll deliver on our commitment. look what we did in the last 18 months. $10 billion to shareholders. the first -- [inaudible] -- we've already cleared around $7 billion to our shareholders. that's what it's all about. we're not going rush into it. >> when your next earnings quarter comes out, are you going

to be in this much of a good mood? >> time will tell. let's see where we are in the early march next year. >> we'll catch up with you then. c.e.o. of rio tinto joining us at the conference just getting under way this morning in melbourne. policymakers, big miners of course, all gathering together as these global headwinds when it comes to china's slowdown, the trade war, the u.s. dollar strength. lots of uncertainties and lots to talk about. >> we already saw steel makers just get a shot in the arm from china's potential tax cuts on car purchases. what a day to talk to all of them. thank you. coming up next, all flights canceled. mexico's incoming president scrapping a massive airport project ands me cag -- mexican assets taking a dive. we'll bring you the details next. this is bloomberg. ♪

>> welcome back. bloomberg sources say china's considering a tax cut to revive its flagging car market. the move would bolster a key

industry damaged by the ongoing trade war with the u.s. our china correspondent joining us now from beijing for more. i remember we saw a similar move back in 2015 and then car sales just surged the following year. hat do we know that the point? >> absolutely. they're looking to something they've used before. what we're hearing is the national development reform commission, which is the main state planning body here in china, is considering, has tabled a proposal to cut those taxes, sales taxes, on cars with engine sizes of 1.6 liters or below. from 10% to 5%. we don't know when this will proposal will be implemented or if indeed eventually it will be implemented. but even so, we saw some of the main car makers both in europe and the u.s. in terms of their shares rising on the back of this news. yesterday the likes of v.w., ford and daimler. it is seen by analysts of course as a significant positive should

this proposal be taken and put into play, given that you're seeing potentially the first slowdown in the chinese auto market for more than two decades. you've seen the likes of v.w., the likes of ford cutting their forecasts for sales in the chinese markets, for this year. we've had four straight months of sales drops. you've seen the likes of the buyers of some of these passenger vehicles, you've seen in terms of those numbers falling by about 13% in september. in terms of passenger car purchases by some of the dealerships here. so if this goes ahead, yes, the analysts say it will be something of a stimulus to this auto market. >> tom, to what extent is the slowdown in the chinese car market something we can assign as being a symptom of the trade war? >> certainly the trade war has impacted consumer confidence here in china. more than it has done in the u.s. but it's also been the response

from policymakers here that has led to some confusion. at least to one of the main industry associations here in china. because you have the u.s. or the chinese policymakers ranching up import taxes on cars being imported from the u.s. by 40% while at the same time cutting the taxes on cars from other jurisdictions to 15%. that the association has said has led to some confusions amongst consumers here and that has dampened demand. this tax cut good to go some way to reshaping or refocusing consumers on the potential opportunities. we should of course look to. so chinese auto markets when they start trading later it morning. the likes of autos. to see if you'll see upside from those automakers. as well as the dealerships and some suppliers, of course. >> thank you so much for that. incoming mexican president has ditched a $13 billion mexico city airport project. the cancellation comes with 1/3

of the airport already built. four-month lling to lows. for more let's go to mexico city. the president says or the incoming president says that there are funds available to protect investors in these airport bonds. but what's the message that sends to the business community out there? >> hi, thank you for having me. the message is not being very well received. the business community is definitely worried. they were seeing this airport project as sort of a test for incoming president, for his actions, for his market friendliness. the cancellation is not a good sign that he's going to commit to prior commitments by the prior administration. so markets are nervous and we could see it in the plunge and airport bond yields and in several stocks that dropped to month-lows today. >> how much would canceling the

project cost at this point? and what's the alternative then? >> the estimates vary but some analysts point to a figure of $10.5 billion for cancellation. that would include repayment of the bonds and some cancellation fees. but nobody really knows what's it going to take to unravel a project that's so big and already 1/3 constructed. but we can expect now for the incoming government to try to build two runways at a nearby military base and expand another airport in the city. what they want is to try to make a sort of hub in different -- a hub structure in different airports around the city. but analysts and experts are not sure that's going to work. >> thank you so much. bloomberg's andrea navarro. more ahead on day break australia. this is bloomberg. ♪

>> i'm in melbourne. >> i'm in new york. you're watching day break australia. let's get a quick check of the latest business/headlines. indian stocks rose the most in more than two weeks. led by i.c. -- icici bank after the lender returned to profit ast quarter and cut bad loans. icici surged more than 10%. the biggest jump in a year and he best performance on it. insurance will be one to watch later after reporting a jump in third quarter operating profit. the insurer prefers that gauge to net income saying it better reflects performance, profits increased to more than $12 billion in the first nine months, implying a rise of 12% for the three months through september. they're also focusing more on new technology.

bank of china announced share sales worth $17 billion u.s. dollars to shore up capital in the face of a slowing economy. lenders are being urged to support it. says the money will help it meet more stringent requirements that come into effect next year. separately bank of china reported a $5 -- 5.7% increase in third quarter net income, broadly in line with estimates from bloomberg intelligence. >> coming up in the next hour, we're looking at day break ashesia, of course. -- day break asia, of course. mining and resources conference in melbourne, talking about the outlook given all of these headwinds that continue to come through from the president's threats on chinese trade. the structural slowdown and key markets like china, and whether the industry is shifting from caution to growth at last. that's just about it for day break australia. some of the market opens coming up next on day break asia after what was another horrible

session on wall street over that, providing a weak lead for the start of asian trading. this is bloomberg. ♪ i am a family man.

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"all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. haidi: welcome. executives around the world are gathering for this conference. >> good evening from the inomberg global headquarters new york. ahn.shery >> and i am sophie. >> asian-pacific markets remain under pressure as president trump is ready to ramp up his trade war