150 dollars off and free shipping too. sale prices are available right now. go to buyleesa.com today. you need ♪ good morning, i am paul allen in sydney, where australian markets just open for trade. >> from bloomberg's headquarters in new york, i am shery and. sophie: and i am sophie kamaruddin in hong kong. or come to "daybreak asia." ♪ -- welcome to daybreak asia. paul: here's a look at our top stories this friday, a mixed start for the asia-pacific after declines on wall street. tech and energy lead in the s&p 500 down from a one month high.

interest rates remain on hold as policymakers note strong growth, rising wages and higher tariffs. and oil falls for a night straight day in new york with crude entering a bear market ahead of the weekend talks. shery: let as get a bit check of the markets close. the fed left rates unchanged, and we saw the dog giving up of its gains. tech underperforming, the nasdaq falling .5%, and disappointment coming from square and a roku to we have. financials higher. , but at the same time, energy stocks led the decline as paul just mentioned. oil is in bear territory from yard take a look at what the wti has done this year, surging and ground, getting close to $78 a barrel, surging to her to be dollar a barrel level, falling into bear market territory.

there are signs right now though, that the market could be oversold. as i is below 30. let us see how the markets shape up in asia as they digest them feel that here in wall street. sophie. sophie: starting it off with what is happening with oil producers, this energy losing sydney, leading declines in energy producers in australia thus far. inwill be watching if miners sydney will get a boost from chinese imports, but right now, the asx 200 is just marginally higher. in tokyo we will be watching if carmakers -- after nissan's earnings. there are also reports that major mobile carriers will be asked to split handsets. there are also reports that regulators will approve more mobile units, plenty to do just

today. we also have aussie home loans less of the rba's final quarterly statement. we will be watching for any changes to forecasts when it comes to gdp, inflation, unemployment. later this morning, china's cpi for october is due. we also have malaysian factory output for october after the central bank held on its key rate. all, looking ahead next week, we will have vice president mike pence in the region from november 11-18 for the series of summits. he is scheduled to meet with the likes of narendra modi, shinzo abe and others. diplomaticafter the security talks to be held in washington dc this friday between the u.s. and china. a lot to the agenda. we are also counting down to sunday. paul: all right, softly, plenty to was in there. let us get the first word news

dagenhart?nna >> the u.s. is proposing borrowing immigrants who illegally cross the border from mexico from being granted asylum. in a statement, the acting attorney general and homeland security secretary said the current system is overwhelmed. u.s.resident has blamed asylum rules for lowering thousands of migrants a year american countries. he says he plans to issue a friday.tion on google says it has changed some policies on sexual misconduct after thousands of employees walked out around the world last week in protest there we had it is ending mandatory arbitration for sexual harassment and assault claims and promising greater trust a on investigations and their outcomes. however, some critics say the changes do not cover google contractors or claims of racial discrimination. a marine combat veteran killed 12 people at a country music bar in southern california come up and took his own life, doing

college night at a bar in thousand oaks. police are yet to identify a motive. 28-year-oldnamed as david long, in machine gunner who served in afghanistan. he had been interviewed by police earlier this year for possible ptsd-related behavior. the world's leading market is closer to the first annual fall in at least two decades. retail sales of dropped more than 13%, just under 2 million. the total for the first 10 months of the year is down 2.5% to 18.4 million. carmakers are already reeling from weak profits under the trade war. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm jenna dagenhart, this is bloomberg. all? .aul: thanks, jenna central banks are in focus again

as the fed met for the penultimate time this year and there were no surprises. a strong signal that there could be one more rate hike in december. our economics and policy editor kathleen hays is here to dive into the data. kathleen come of policy statement had very minor tweaks? kathleen: we can only say so much, in a tersely worded 303 word policy statement. if you take out the names who only 200the decision, 65. nevertheless, the fed counts on these statements to send a clear signal. there was nothing to change the view that this federal reserve is on track for a rate hike in december. when we tell you about the tweaks, they were pretty small. they said business investment has moderated from a rapid pace, previously they had said how strong it was, for some reason it pulled up shortly in the quarter.

they said household spending has continued to grow strongly and that is a bit of a stronger statement than they made before. implement rateon has declined, is that of stating that it had stayed low. acknowledging the 10% drop. they also see the economy rising at a strong rate. our bloomberg chart, when of our most popular chart that we look at every day, 12 outl see that we have of 16 looking for the rate hike in december. nothing has changed their. the fed said it sees the risk to the economy as roughly balanced. the president who ran the richmond fed agrees. >> i don't see any imbalance at the moment, you have a risk on both sides. if it remains that way, i would expect in the fed's projection of continued gradual increases to stay onet rate

track. or you are looking for is, just to give you an example, if you see more signs that housing is weakening further, or that is disinvestment is going to continue to soft and, and critically, consumer spending, if it shows any signs of slowing . kathleen: another thing he mentioned, trade wars, stock market volatility. in three weeks will get the minutes of the meeting and then we will know what the discussion was like. but that is certainly what we are waiting for in the speech as we get and the meeting, december 19. shery: kathleen, you are talking about some of the concerns that if the fed continues its balance we could get something ugly for the banking sector. kathleen: remember, what did quantitative easing do, it kept buying bonds. when you stop buying bonds and reduce those purchases, that is not much running out there. also, there are stricter rules

on banks and investment banks, they need to hold more reserves given the dodd-frank role, so that has created a problem that people are seeing in the fed's funds rate. this is a lovely chart into the bloomberg library -- remember, the fed targets a range for the fund rate, now it is 2% to 2. 25%. the effective fed funds rate, see how it used to be a little margin here, now they are too close together. how will you control the funds rate if you cannot control the interest on access reserves? what i'm turning say is that the demand for fed funds has grown at a time when there is not a lot of liquidity out there, that is what people are worried about. what he said was that if they need to make a technical adjustment, they already made one and they can do it again. i will wait to hear from the new york fed president, john williams, when he speaks and

talks about the dilemma, because they are the ones who are at the plan and may be involved in changing it, if they feel like they need to slow down on reducing the balance sheet. shery: citigroup was thinking it could happen in december, so they could move on rates and not give a mixed signal. kathleen, thank you so much. the former goldman sachs boss personally held ties with malaysia, years before money went missing at 1mdb. lloyd blankfein was supposedly the unidentified high-ranking official mentioned in court documents who attending a meeting -- who attended a meeting with the van finance minister. let us bring in our next guest. embarrassing occurrence for goldman sachs? could there be legal ramifications out of this? >> goldman is still in the process of an investigation and working with the doj, so there remains to be seen what will

ultimately happen with the bank, whether they will have to pay a fine or not. ultimately, this was a meeting between the prime minister and lloyd blankfein. this was notthat -- the pursuit of 1mdb was not a few random employees in asia, this is a concerted effort by the farm to develop relationships in malaysia shortly after this 2009 meeting. moved into malaysia and started operations there and went on to raise $6.5 billion for that sovereign wealth fund. high-level meeting aside, were there any other meetings between senior goldman officials -- the former malaysian prime minister and others? michael: there was another 2013 meeting, where there was,

according to the documents, a high-ranking executive at goldman sachs who attended. there is no indication whether that was the same executive that attended in 2009, which we are ,eporting, was lloyd blankfein but there were senior people at goldman involved throughout the years. paul: michael moore, thank you very much for that. still to come here on bloomberg "daybreak asia." disney smashes through earnings estimates thanks to its long-awaited "incredible's 2" sequel. discuss theirst, we trade war next. this is bloomberg. ♪

♪ paul: this is "daybreak: asia."

i am paul allen in sydney. shery and in new york. declines in four days exported drop here in and you've the u.s.. the former of is investment portfolio manager, di zhou. gotme dig into the numbers from chennai yesterday on trade. the gist of the chart on bloomberg shows we did not see much of an impact from the trade war on exports or import numbers. we are seeing chinese exports actually gaining more than expected, so when can we start to see some sort of fall out from trade tensions that seem to continue to rise between china and the u.s.? >> that is correct. the trade war, the impact and when the impacts come, and whether it actually brought an impact to the chinese economy. well first of all, it will be a gradual process the written company will switch their supply

chain is really out of china -- no company will snap their fingers and switch their supply chain completely out of china. recently, we would have seen china injecting more credit into the system, increasing infrastructure spending and cutting taxes, and so it will be a gradual process, we probably will not see a sharp reaction anytime seen. haidi: and yet, in order to hedge for potential impact in the future, should you be focusing on domestically oriented chinese businesses? di: that is exactly right. companies arestic exposed to the domestic economy, so they will not be impacted by .his trade war per se if we do get some stimulus happening in the domestic company, they will be the beneficiaries of it. paul: this trade war is not just

about the trade deficit in your estimation, is it? di: that is a good point, paul. we think -- the background, the rhetoric about trade war is about trade deficits, but it is a lot more than that. they say that china will be highly amenable to buy more goods from the u.s., but it is a long war -- it is a lot broader and more complex. for example, the u.s. wants to improve ip production, or potentially change the mix or structure of the chinese economy. to be --s us not want it is complex and will take time to figure out a solution. paul: let us take that ip example you just gave. does that affect your investment decisions at all?

di: it does. so again, we are looking at -- one is domestic-focused and may be something more consumer-oriented, and less reliant on foreign technology. so this sort of access to from the developed market is one key area that china really cares about. you might not care about the u.s.,more toys to but accessing technology from the u.s. and other developing world is the key. haidi: but it seems to be -- shery: it seems to me that you are busy your calls on the fact that the chinese economy will still be strong. but if the chennai u.s. trade war intensifies, we are seeing the impact -- but if the china-u.s. trade war intensifies, we are the impact on retail sales, and also,

consumer sentiment could be heard. will this be an issue going forward? di: it will be periodic going back to the chinese government wanting to, and having tools to stimulate their economy. when the impact that is, and it does come slowly, with the tax-cut coming in in november, ahead of -- people are getting a bigger paycheck from the tax-cut , from education, health care and other areas. see ay will b significant increase from the discretionary spending. shery: you base a lot of your calls on the believe that authorities will scale back the chinese economy to react should we be investing more on those segments of the economy that sayorities want to promote, with china policy 2025, when we see more investment into chinese ai into examples. di: that is a good point.

of makesmpany we know environmental monitoring equipment. so again, this company -- the environment is a huge issue in china and gets a lot of classes support. so even though there is a slowdown in infrastructure spending today, you see that environmental spending is still very high yield so these company is number one, the largest, growing over 30% topline and bottom line, but because of this, it is trading at four times pe. so companies like that will benefit from the trade war and their foreign competitors will lose their market share in the domestic space and they will be the beneficiary of that. paul: i understand you see some other opportunities, as well, in that space, to do with cabling and semiconductors. can you tell us about that? di: yes, one company we like is

a tallying cable company. when you look at cable, you are probably thinking about kimmel net splitters, rather than cable connecting the offshore wind turbines back to onshore wind turbines. it is the world's largest cable company and they are benefiting from a number of structural growth, such as renewable energy deployment of globally, namely global wind, and also five g fiber deployment. they also purchased one of their competitors in the u.s. called general cable. we think the synergy that they generate in the and is couple of years is still not in the numbers yet. and at the same time, because of the geopolitical risk and it is become aware they are trading at 9.5 times pe. so you could think of it as throwing the baby it with the bathwater in that instance.

do continue. di: on the semi conductor company, we have this company that we really like because it is exposing to the automotive segment. what they do is they are the largest semi conductor manufacturer for autos, and the content of growth would be tremendous. when we think about the -- in ev it will be $750 a car, which is significant for them. the valuation is very attractive as well. paul: thank you very much, thornburg investment manager, di zhou. plenty more to come. this is bloomberg. ♪

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paul: this is daybreak: asia a," i am paul allen in sydney. shery: and i am shery and in new york. choke offent seeks to migration from an america. bloomberg news washington reporter greg sullivan joins us now. we have known that this caravan of migrants was headed toward the u.s. mexico border, what would this mean for them, if this order is strengthened? greg: the trump administration it is announcing new plans for the way to conduct a silent. as century, whether are looking to do is limit where migrants can claim asylum and coming across the mexican border. published by the justice department today, the trump administration said it asylum to everybody crossing the border illegally, essentially meaning that

migrants would have to present themselves at points of entry where they would be processed and claim asylum. those who did cross the border illegally would face a higher bar for what is called a "credible fear threat standard" for determining whether a some applies. it is all part of trump's approach to immigration which we saw in the election, stoking fears of the migrant caravan. though the administration does expect it to be challenged in the courts. paul: let us talk about the robert mueller probe. the former attorney general recused himself and there are questions about whether the acting attorney general will do the same thing. greg: that is correct. acting attorney general matthew whitaker will not be recusing himself over the russia probe, according to a person familiar to riyadh this a despite the fact that he did criticize the cnn.t mueller probe on

democrats, of course, are calling for him to step back and recuse himself given the past comments, but a he will not be that. there are questions as to whether or not he will consult an ethics adviser in the department on those questions. the president's own attorney also said today that he does not think having the acting attorney general in his new role will affect the probe at all, at least in the day today, he is expected to continue interacting in a professional manner. fory: thank you so much your time, greg sullivan. we will be keeping an eye on everything that happens in washington. coming up next, disney's fourth-quarter profits beating the most bullish estimates, fueled by film division and theme parks. we break down the results and have a reaction from ceo, bob iger. all of that coming up.

this is bloomberg. ♪

paul: it is 10:30 a.m. here in sydney. shery: it is 6:30 p.m. in new york. s&p future is down 1/10 of 1%. the fed kept rates on change. the dow tried to gain ground but finished unchanged. paul: you are watching daybreak asia. let's get to jen with the first word news.

jen: tobacco companies moved after the fda is set to impose severe restrictions on most e-cigarette project -- products. sale limits could be announced next week. they're worried about the growing number of young people trying e-cigarettes. overall smoking rates are the lowest on record. as predicted, the fed stood still in their meeting of 2018 but remains on course to hike next month. economic activity is rising at a strong rate. it repeated plans for further rate increases in the coming months. they added that risk to outlook seems balanced. the european commission's latest

forecast for the italian commodity is more pessimistic than those of the populist government. the finance ministers says those numbers are inadequate and the government will stick to their plan. says's new chairperson elon musk will be reined in despite run-ins with regulators. she is a tesla insider and takes on the role immediately and will leave her post as cfo and head of strategy in australia. chairman.had been day onnews, 24 hours a air and on tictoc on twitter. this is bloomberg. shery: let's check on the australia markets with sophie.

what are the stories? sophie: stock is taking a plunge, 15% after expecting to take a 350 million aussie dollar charge on engineering and services unit. they will start a review of the business. when you look at the australian market real estate that is the biggest drag in sydney along with energy stocks. after a three-day rise, you have the nas -- you have yields rising ahead. the aussie dollar gaining ground against the dollar as well as the kiwi. says it haster become significantly under valued with the kiwi recent

rally going to far -- too far. there is more run -- more room to run for the kiwi dollar. there is a rising risk of a rate hike in new zealand. we will see if we get positive news coming from friday's trade talks abc from the u.s. china dialogue. we are due to get china's october inflation which will come out in two hours. chinese exports accelerated in october. engle whog in stephen is back from the big trade expo in shanghai. what are we expecting to see? >> we are likely to see the tug-of-war.

on the one hand, a slowing chinese economy. tariffs inr, higher soybeans which could push up prices. bpire likely to see inflation staying steady at 2.5% in october, same as september. this is the highest pace of cpi inflation since may of 2014. that is due to food price inflation. pork makes up a big part of that food portion of inflation. china has already imposed tariffs on u.s. soybeans. china imports a lot of soybeans. and they go into hawk feed -- hog feed. if that goes up, pork prices go up. so you can see the trickle up

onact on the tariffs inflation. and you have a slowing economy. so we have to look at pricing power at the factory gate. that is likely, according to an economist, to have eased off in october 2 3.3%. it was 3.6% in september. it was 4.7% in june. 4.6% in july. so we are seeing less pricing power at the factory gate of chinese manufacturers who have to import and export into the domestic economy. paul: you mentioned the seasonal distortion we see from the chinese new year. are we getting into distortion from the front loading going on? >> absolutely. exports have held up, despite trade tensions and a slowing economy.

we have seen lots of frontloading, especially ahead of the ramp up of u.s. tariffs in january on the next $200 billion of goods. ,o yes, you are seeing exports and even imports, holding steady in october, despite the tariff threats. and ahead of the holiday season. shery: and you just got back from the china international export expo in shanghai. businesses participated. what were your takeaways? >> the biggest take away was the fact that all these companies around the world, 3000 different companies, it was a madhouse. one of the largest buildings in the world, the shanghai expo, and it was packed to the gills with people from africa, europe,

and less from america. it was a fascinating thing. was on the complaint one hand, we love the opportunity to sell to china. mentioned, inon many industries, if you sell into china, the chinese then turn it around and make the same product and you lose the market. so there is pledge fatigue by many ceos. a whisper that to you on the sidelines. we hear a lot of promises about opening the economy. but is is -- but is it really being opened up? of the reasons why the u.s. is not happy with the way china carries on business. let's talk about earnings. disney shares moved higher after the company reported fourth-quarter earnings that beat estimates.

details from remy inocencio. good numbers. do athink we could even superlative and say they are great numbers. bob iger was on a few hours ago revenue beat growth by 12%. the expectation was 7.5%. you are looking at the revenue breakout on your screen. media networks, there have been issues with the transition from television to digital, but they mentioned to eat out $6 billion out $6 billion. year for year on those. was moreproducts

slight. parks and resorts, this has been consistently giving over the years, consistently in the high single to low double-digit growth. studio entertainment, where talking about movies that came out like incredibles to -- incredibles 2 and the second movie in the ant man series. , $1.2 billion. better,t one was still but we were all waiting for this to happen and we all went to the box office to see it. , the costbig issues associated from trying to get from television to digital. a lot of people are pulling the court. i am one of them. i do not want to pay the massive bills, i will do all apart. -- a la carte.

bob iger is saying one of the reasons for the deal is to help expand the streaming division. details? >> when you think about fox, they have a lot of ip that disney is going on board. -- bloomberg spoke with bob iger about when we expect this to happen. >> we are still going through the regulatory process. thatnounced a few days ago we gained approval in the eu. there are still some markets, some countries, that we are waiting for approval on. in june we said it could take as long as 12 months to close and we are increasingly optimistic it will occur meaningfully before that, but we are not saying specifically when. remy: he said there is a

suspension will justification -- substantial justification for the pricing. in terms of streaming, now we know the name for the new disney streaming service. a lot of people said it could ,ave been called disneyflix like netflix. now we know it will be called disney plus, coming to our screen sometime in 2019. paul: very creative. will look at who is leading the field in japanese carmakers after russian earnings this week. this is bloomberg. ♪

tory: we are counting down asia's first market open this morning. japanese futures falling now by

3/10 of 1%. it could be a gloomy day in japan when it comes to the weather and also the stock market. we saw them rise a two-week high but we did not get a strong bead from wall street. the japanese yen is a little stronger today. this is daybreak asia. be watching shares when tokyo opens after second-quarter profits fell 8% on year. they blamed a rise in raw material costs. but that the results in context. manager at forecast ihs market for japan and chinese vehicle sales. what are your thoughts? think it is a slowing down for the economy and the auto market in the u.s. and european

countries slowing down. on the other hand for china and japan, some of the asian , there is a balancing out, particularly for the japanese market. paul: we had a mixed bag. toyota had weaker sales. what is happening more broadly? i do carmakers in a downturn or is there a -- are the carmakers in a downturn? perspective,ader we have the china u.s. trade war that is escalating and it is

slowing down the global economy so it might affect the chinese and u.s. market. on the other hand, being risk-averse on the market, it is a growing economy in the process . it might be on the ground -- it is in the balancing out of the market. for the u.k. exit from the eu, that might be coming in for the next year and it might slow down . in the u.k. they might be slightly for the risk seeing in the market as well. shery: how japanese cars doing

in china where sales have now fallen for a fifth month, not to mention we have seen increased tariffs on vehicles moving from china in the u.s.? china the market itself is slowing down in recent months but on the other hand they have already reduced import tariffs from seen -- from some seasons from this year, particularly toyota, import is increasing. but on the other hand china to u.s. market, there is a risk obviously and it could be seen in the u.s. if the u.s. tariff is soaring to 25% taxation or the tariff has been raised and

that could be some of the risk obviously for the chinese exported to the u.s., or the china and thenin probably importing to u.s. from china, that might be slightly risk, particularly for the gm, cadillac and buick, some of the risk might be seen on that. is planning to export andthe global brand vehicles might be exported to the u.s. that might be affected for the u.s. trade deficit and so for the relationship in china and the u.s. shery: right. where also hearing that china might be cutting the u.s. tax on

car purchases. how much of a big benefit with this be for carmakers? china andproducing in mainly china and consumed in china there would be a benefit mainly for the foreign capital market infrom the producing in china would benefit as well but on the other hand they are already putting back 10% of the smaller engine car tax breaks, put it back and at the beginning of this year that was the case where the last year's huge russian demand before the tax raise back in normal but it is cutting back so for the tax break then slightly currently negative throwing down but that might be for the push of the sales particularly in domestic

as well as foreign capital, the companies, the automakers produced in china, that might be the benefits. shery: we saw them cut the taxes three years ago and sales soared . thank you so much for your time. let's take a look at some of the stories trending. on bloomberg.com, find out why you probably should not expect more surprises from the fed anytime soon. the meeting goldman sachs chairman had with key players turned out to be a scandal. and tictoc is following the fallout from the white house banning a cnn reporter. check out those stories trending online. this is bloomberg. ♪

paul: alibaba's annual shopping event happens the sunday. ofbrings it twice the value black friday and cyber monday combined. here's a look at the big numbers. >> let's start with 2 billion. that is the number of transactions alibaba could process today. they are expanding further abroad and deeper a do china. -- into china. my star services were in focus. merchants on the platform give discounts on services. year, alibaba processed

355,000 orders and they could grow this year. there is an unknown. to what extent will the trade war put a damper on it? shery: tom mackenzie will be covering the event and joins us from beijing. it could be a good test of china's customer health. goodit is likely to be a test of china's consumer health at a time when consumers are expected to be under slightly more pressure. wage growth is slowing and the real estate sector is weakening. equities have been hammered. you have online scandals. so consumers have been hit with a number of factors.

there could be some support for majora ahead of this shopping event. it ends at midnight on the 11th. the number hit 25 billion dollars of sales in 2017. alibaba is facing a saturated market. they have more competition domestically and they are trying to pull together a number of different assets, including shopping malls and a delivery service. this is part of their new retail strategy online and off-line. they expect a record year and you would not want to bet against them. they have done it 10 years in a row. international expansion was explained in the package. we have presales and additional numbers. have already sold 7000 buicks. cosmetic sales have more than doubled from last year in terms of presales and consumer electronics are up six times from 2017.

so we expect big numbers even with pressure on china. paul: what about the pressures from the trade war? any likely drag for alibaba? tom: that is in focus. alibaba reported results last year -- last week and it was a record. but they cut the targets by 6% in terms of future sales. so this is something alibaba is looking at. the founder has talked critically about the trade war and the impact a number of times. we will see to what extent that weighs on the sales on sunday. this is something the company is taking very seriously. shery: tom, thank you so much. coming up, a look ahead to china's data with the jc morgan chief had of equity strategy. food prices are white -- rising

and slower pace and oil metal prices are falling and could affect numbers. plenty more daybreak asia next. this is bloomberg. ♪ show me movies a grinch would love.

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paul: good morning. major asian markets just opened for trade. good evening. sophie: welcome to "daybreak: asia." paul: our top story this friday, asian stocks set for a decline. they fear the hikes to come.

oil falls for a ninth straight day. entering a bear market ahead of the weekend talk. investors in asia will have all of that to digest. it will be releasing their quarterly statement in about a half hour. let's see how markets are looking in early trade. sophie: it looks like asian stocks are set to parent their sentiment. the dollar pushing higher overnight and the yen is trading near a one-month low. the aussie dollar is regaining ground after retreating overnight. this is ahead of the rba statement. we do have aussie stocks under pressure.

you have real estate and energy shares, the biggest laggard. now trading just about escape dollars a barrel -- $60 a barrel. jumped.ty has this ahead of the opec meeting in abu dhabi on sunday. we have plenty of stocks on the radar this sunday. nissan missed estimates. due in part to slowing demand in the u.s.. onare also keeping an eye tobacco players in asia. aboutfter a report cigarette sales and is next week. the asahi newspaper reports splitting data fees in their plan.

softbank could get the green onht for its mobile unit monday. sophie, thank you very much. let's get a check on the first word news with jenna dagenhart. departmentjustice suing ups for selling more good back securities, repeatedly making fraudulent statements about the trust. thatlates to 40 securities they sponsored, underwrote were offered. it is not supported by law. google has changed policies on sexual misconduct after employees walked out in protest. it is ending mandatory arbitration. promising greater transparency about investigations and the outcome.

some critics say it does not cover google contractors or claims of racial discrimination. car sales in china decline for a fifth consecutive month in october, bringing them closer to the first annual fall in at least decades. under 2 million. the total for the first 10 months of the year is down 2.5%. viewing from the trade war. lion air for -- suffered further in southernnt sumatra. inlost part of its wingtip the accident and was immediately grounded while investigation finds out what happened. just daysnt comes after a 737 crashed soon after takeoff. global news 24 hours a day, on

air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jenna dagenhart and this is bloomberg. let's have a look at what we should be watching as the asian trading day begins. adam, what can we expect of market today? >> a mixed picture in japan. we had that u.s. selloff. midterms andh the a lot of people now positioning for further upside going into the year and. course, overnight we had a fed that gave us largely in

picture of the playbook that we had going into the decision yesterday. themuch there to ruffle applecart. those people who had been jumping back in, seeing some value in some of these oversold current in places like the philippines. there is some reason to believe that they have some way further to go. data coming out of china later today that will be closely watched. the move in the dollar was at least notable. >> it was. it surprised and raffled a few people across the investing landscape, trying to explain why it happened. it does not fundamentally change the picture for emerging markets

in asia. we know that one of the main reasons why we have seen some weakness in some of those currencies is due to what has ,een happening with the dollar but also the restricted dollar and the quiddity is starting to hit some of those markets. inflation is a problem in the philippines. those kinds of things. it has not really changed in the past 12 hours with what the fed has done. -- wel continue to be will get a press conference in the december meeting where pretty much every man and his dog is expecting a hike. it comes down to this environment and whether the said goes twice or goes a little more aggressively.

it is a huge disagreement. shery: the are seeing the equity rally. will share back save the day? >> they were certainly notably selloff selloff in october. a lot of people suggested one of the reason equities did so poorly is that that marginal buyer was removed during the blackout season for earnings. people had been expecting a little bit of an uptick. index isck outperforming the s&p 500 by 1% or 2%. that huge marginal buyer of equities returns to the u.s., certainly for the people at j.p. morgan, they do see that as one of the key underlying reasons

why you can get a protracted rally going into the year in and into next year. you have companies buying back their stock. it will go up somewhere in the order of $700 billion worth of buybacks. clearly, corporate buying back their own stock is to be one big theme that they come back to. a common refrain during the bull market. thank you so much. thecan find his charts at library. oil is on a roller coaster ride, $100hat is heading towards , you us crude has entered a bear market. prices are stabilizing a little bit. surprising, you us crude

production is at a record. we have also seen waivers for countries to continue to buy uranium oil. is there any surprise that we are seeing so much volatility? october, look at people were saying we were going to go to $100. people are not expecting the waivers to come into place. this will keep iranian next words at a level the market did not really aches rex. on top of that, production from opec, saudi arabia and opec friends like russia are jumping to higher levels. it is the highest since 2016. they are on track to beat productions at its highest ever. production continuing to boost. demand out.g

bit and not able to eat up all of that supply. are much stockpiles higher than the market anticipated. you are seeing that way down on the price and the u.s.. could we hear anything from the meeting of ministers is weekend in abu dhabi? >> that is what everybody will be watching when they come into the office on monday. reports that it will be something. whether or not to put a cap on production. you have seen the trump administration asking for partners to cut production or put a cap on production. that will be something that they will be discussing this weekend.

intould definitely play where it goes for the rest of november and december, based on that decision. paul: how about this potential supply? into, we arests i heading towards oversupply because of the waivers. that could start getting sucked away when the waivers six higher around able. you could start seeing in the middle of 2019, this oversupply starting to shrink a little more. productionthat opec levels off in the first quarter. meeting over the weekend, it will be key to figuring out whether or not the oversupply and stock piles situation can get sucked up from

2019 and onward. that is stephen in tokyo. climbing's bond yields . we will bring that update in 20 minutes time. shery: and sean taylor spots opportunity in emerging markets despite the selloff. this is bloomberg. ♪

shery: this is "daybreak: asia." paul: i'm paul allen in sydney. stocks in asia are following, tracking a drop in their u.s. counterparts. the fed stayed on course to hike again in december. let's discuss the market moves.

joining us in hong kong. seen the big selloff in october, but we are seeing's docs easing again today. is there time to go before we reached the bottom? have pretty much at the bottom, but there is not a fear catalyst for why they would outperform in the next couple of months at the moment. the rally last week was really short. where getting to a level a valuations are looking very attractive on a one-year and two-year basis. next year, emerging markets will be looking very interesting. you said some stage next year. china can rally at

the end of the year. economic momentum coming out of china with what will happen with fiscal policy. we have had some positive news in brazil with the election. , theding on the government market locally is quite optimistic. that could turn the tide in latin america. the three major headwinds still remain. the dollar is still rising. rates are still carrying on. we still have uncertainty over trade. there is a holding period. periodng on your holding , we have lost money on a one-year basis. we have headwinds over the next three to six months. shery: could dollar weakness be

a catalyst? it was not a lot of fiscal stimulus coming from the u.s.. the dollar wewhen akens. .here will be a stage we must be getting to the end of the race. we will see with the democrats winning the house, that will put more emphasis on infrastructure and less on tax cuts. that will probably be dollar negative. shery: you mentioned potential in the chinese market coming after the big selloff that we saw in the shanghai composite. , taking a diveio near a level.

bounceback over the past 25 years. if you look at the chinese market, are there any's the civic sectors like you like? get government help? -- more that could get government help? >> they have held up pretty well. they will continue to be stable. probably, the margin, the good areas that will go up will be auto. the consumer will probably be helped out as well. definitely staying in domestic areas where you will have some potential for support. one of the long-term themes, education in china has sold off a nexus early. it probably will not be helped by stimulus. i want to --

paul: you got out of jd.com. you have pulled back on your samsung holdings. can you help us understand the >>ing of that russia mark stem -- the thinking of that? , we took technology down 2017. then we thought, we have seen this is a good recovery across broad-based recovery in the domestic market. i do not know if you remember. , thetil about nine months emerging-market rally was defined by tech and energy -- internet stocks. is still driven and it

is getting cheaper. nothing to do with what is happening in asia. it was a concern. the apple chain stocks are under pressure. probably look interesting the second quarter. domestic box have sold off. the earnings are holding up more. shery: great have your thoughts. plenty more coming up on "daybreak: asia." this is bloomberg. ♪

paul: this is "daybreak: asia." a check of thet business flash headlines. that isg earnings

fueled by movies and the price. the ceo tries to steer his largest division towards a new future built around streaming. they are still waiting on approval from the purchase of much of 21st century fox's assets. tesla.o challenge beare told vehicles could built in germany. the plan has yet to be signed off. in 2020e to start sales and expects to sell -- a year. the trade war has led many companies to shift production. george told bloomberg what changes he is being in global

supply chains. it depends on benefiting. a lot of trade and investment are version. >> talk to us more about this diversion. >> far from it. the company is in the land of fire, even if the conflict is resolved, it can come, go and come back. in any case, because china has , there ise expensive an outflow of investment in the low level manufacturing. the process is being accelerated. it makes companies anxious to get out from the land of fire. is it fair to say the supply chain has changed for good?

>> it is changing and continuously changing. also because of technology. >> we know that there are potentially more coming out. what are you anticipating and who tends to benefit? there are some retaliatory measures. companies who share products, they elected to be involved. , they are trying to get it across quickly. there is a surge in movement. each now commands. this is temporary.

in china, there is a possible slowdown in manufacturing. the company is are all reacting. he talked about the slowing down of the chinese economy. what would it mean? how much of a drop can we expect in the next 12 months? >> we know we can make a lot of money. right now, the american economy is strong. it is importing a lot. interest rates are rising. there are indications that the global economy is slowing down. the chairman speaking

exclusively to us. let's get a check up on markets. a bit of a big -- mixed picture. falling for the first time in four days. this is bloomberg. ♪

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paul: we are waiting on breaking news out of australia. here it is. current consumption growth. likely toerest rates be appropriate at some point across the reserve bank of australia. it has not raised rates yet. it is currently lower than what we have. current inflation at 2.25%. of course, it is currently hovering below that. rba lifting its 2018 average

3.25%.to 3.5% up from already movingar a great deal, hovering around 32 spots. not surprising. significantm poses risk. let's get to first word news with jenna dagenhart. jenna: it is predicted by remains. but it thatolicy statement knows it is rising at a strong rate and the labor market continues. they added that risks to the ed balanced.

the acting attorney general is -- said the current system is overwhelmed. they have blamed u.s. asylum rules. they plan toays issue a proclamation on friday. the washington post reported -- the officials saying filled limits could be announced as soon as next week. number.ng -- a growing smoking rates are the lowest on record. chairman saying elon musk will be reined in.

a tesla insider has been on the board since 2014. she takes on the role immediately. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jenna dagenhart. this is bloomberg. paul: time to check on asian markets. sophie, it has been a mixed bag for gaming stocks in tokyo. gaining ground despite a softer forecast result. company is maintaining its full-year forecast. saying the investment in its new business is going according to plan.

executive say there is no impact from china, but they are expecting a 20% drop in chinese revenue this quarter. back to japan, under pressure after missing estimates for the third quarter. operating profit in japan due to the impact of natural disasters. , the most in nine years. in expected charge on its engineering and service unit. we are seeing japanese stocks this morning up 1/10 of 1%.

when you take a look at how the dollar-yen is faring on this session, hovering around that 114 level. thank you. the federal reserve on course. emergency before its final meeting. kathleen hays is here with a recap of what we learned from the policy statement. it is really not wavering. at the november meeting, nothing was asked acted from the fed. no press conference. it has become the fed's way. press conference at every meeting. glad you put that in place. as for today, they did tweak their ss meant of the economy, but they did leave in place that

they will move in september. 12 out of a total of 16. they have to move in september. if anybody tells you about it, it does not change anything. moderatednvestment is . reflecting reality. continuing to go strongly. the economy is rising at a strong rate. it underscores this sense of the fed. it seems like it would take something pretty big for them not to. one of the most read stories on the bloomberg is about the fed being in denial on

the bond market. it could get ugly. why? >> we just take for granted. you do not buy bonds like you used to. liquidity back into the system. it looks more and more like that factor. thanks, investment banks are meeting to hold more reserves. jump into the bloomberg. look at it with me. you can see the yellow line showing the range. reserves.n excess that is intended to be the level that is cap. of theas in the middle range, it would be up here. it is right underneath that.

people are saying it is because there are not that many reserves out there. it is making a problem for the fed. we asked the former fed bank president for many years. he said they can tweak it again. i do not see that as a major issue. they made one technical adjustment. there was some thought that they might make another one. this does not seem to be an urgent issue from the standpoint of fed policy. they can do it in december. kathleen: they changed the level to keep it where they wanted.

the current plan for normalizing the balance sheet calls for acceleration, buying fewer and fewer bonds. it will be interesting. i think right now, if anybody from the fed is watching, they are saying we will not need to. we will see if they do anything to tweak this again in december. kathleen, thank you for joining us. lessee easing in october? this is bloomberg. ♪

paul: this is "daybreak: asia." shery: expecting more key data

in the coming hours. inflation may have edged down in october. rising at a slower pace than a year ago. ease commodity prices during the month. weaker demand with higher price pressures. joining us now from hong kong, great to have you with us. what i your expectations? -- what are your expectations? trying to bring in more stimulus. we expect they will edged down, compared to last month data. if you are talking more of the immediate term, it will stay about 2.25%. think it is

relatively benign. it will stay below 3% and it will trend downwards. we think that it continues to have above 3%. overall, we are talking about 3% or 4%. .ot gdp growth will stay shery: what about the policies for maneuvering? policy, the two biggest uncertainties facing china, number one, the trade talk. are going to see further escalation or a truce in the beating. on the domestic front, we have seen a lot of adjustment since july.

if you think about it, the typical policy lag, it is supposed to be recovering. today's standard, it is very important for policy impact. impact,further policy given the weaker momentum. the government has made clear ,hat more policy will calm particularly on the fiscal side. we already see the cuts for the household sector. -- furtherbe father tax cuts. what does that mean for china's economy? how strange is china's highly leveraged corporate sector, not to mention the government sector.

very good question and very important. when you talk about policy stimulus going forward, it is probably different compared to past policy easing. it is typically led by the policy easing. credit growth is rebounding. themyear, we saw aggressively cutting. they continue to pin lower. it puts a lot of constraint on the monetary policy easing. the tax cutre about and less on the investment.

the newtion is, given framework, with that have the same policy effect that we saw in the past? it tends to be lower. it also tends to be longer. periodng of 2019 is a that we should be more concerned about. front, stillic visible. is an interesting point. there is plenty of room for adjustment. a point whereach that does not work anymore? how much longer cannot continue to provide dividends? caret is policy room, but not unlimited policy room. facing a number of

structural problems. we talk about the deleveraging efforts, but in the corporate is and the company private sector, we are talking about the difficulties and a also, if you field look at the external front, although the trade data holds up pretty well, the surplus should continue to come down and keep pressure. it is a trade-off between different policy objectives. , but it islicy room much more limited. you need to consider the side effect of different policies. paul: trade numbers were impressive. frontloading going on there, but also on the trade

front, steve engle was talking about inflationary pressures there and gave the example of soybeans. pressures any other emerging because of the trade war? >> the trade war, the first is on the trade area. impressive.ta is if you look at the details, the number is not that strong. benefitexport data may to the rest of the world and we to thet relates appreciation in the last few quarters. on the u.s. side, there is a frontloading. it has been preventing the collapse. the thing to january 1, it talks

25% andving up to possibly escalating the war. becoming much more visible. it is a more broad perspective. including companies. out,the company is moving the worry on china's side of the investment, the employment problem that may rise up. shery: let me ask you about the chinese stock market. it does not seem to be stopping foreign investors from coming into the market. the library chart is on bloomberg right now showing this inflow. touching this record high.

is this just a hint of optimism rather than argue -- armageddon? dangerous is it that you have these pledged as collateral? market, you would think that the possibility of a technical rally because variation is low and market sentiment has improved because of ongoing trade talk. there is a big uncertainty there. all the domestic front, there is a lot of communication. it will help to support asian market sentiment. what we are talking about, it is quite a big number. theirnow, the policy put a forced cleanup

in the system. isthat sense, the government using the measures to prevent this issue to become a systemic risk. the question is more about the immediate term. you are seeing the economic growth and momentum. market will still face a downward pressure. we are positive. it largely depends on the trade war outlook and how the policy will take effect. paul: some great insight there. coming up next, seeing the world's biggest retail. in thebaba keep raking revenue? we have the numbers next. this is bloomberg. ♪

shery: this is "daybreak: asia." paul: i'm paul allen in sydney. alibaba shopping event taking place this sunday is a single day extravaganza. it is roughly twice the value of black friday and cyber monday combined. here is a look at the big numbers. >> let's start with about 2

billion. that is how many transactions they could process in a single day. andnding further abroad deeper into china. alibaba is promoting the event. servicescoupons and for a whopping 800 counties in china. as alibaba tries to wrestle market shares. one of the 50,000 merchants are getting discounts. incrediblecess an 355,000 per second. the event is growing as much as 30% this year. there is one big unknown. will the trade war put a damper on demand? paul: our china correspondent

tom mackenzie will be covering the event. presales have already started. how are the numbers looking? i have run through some of the numbers. 7000 of those. about $14rands of million. , more than sixs times what we saw in 2017. it looks like they will get a fairly large number when the clock ticks down to midnight. .hat is despite the headwinds it is a challenging environment in china. in the second quarter, online retail sales. it was down 12% from the previous quarter. .ou have the slowdown alibaba is trying to put -- pull

together. far more than just an e-commerce giant. it is also trying to expand overseas. an attempt to grow in the u.s. market has been hampered to some degree. a record of $25 billion worth of sales. that was an increase. we will get that final number on midnight. shery: halfway look at what is coming up in the next few hours. before you tell us what you are watching, you gearing up? i think so. this weekend will be pretty big, especially if they are incorporating some of these

sales. to thelooking forward numbers coming through. you mentioned the distressed debt situation in china that continues to rise. in terms of the market, the business is actually improving. sales activity has surged. ted osborne will be joining us the next hour to talk things through. shery: looking forward to that single day of sales. here is how markets are looking. a pretty mixed picture right there. this is bloomberg. ♪

>> it is 9 a.m. in hong kong and shanghai. >> here are the top stories this morning. three days of gains and they wall street decline overnight. oil is down for a ninth straight day in new york. >> the fed remains on hold, signaling further hikes. aticymakers are looking rising wages and higher tariffs. .> alibaba doubling down