ip. that's how xfinity makes tv... simple. easy. awesome. ♪ >> a very good morning to all our viewers just joining us and waking up around the region. : i'm kathleen hays in new york, welcoming you to "daybreak: asia." back forocks roar their biggest one-day pop since 2009 and asian markets look set

to follow suit. ack to the negotiating table, u.s. delegation is heading to asia next month for new trade talks. president trump may get the fed rate hike pause he's been asking about, next year. kathleen: a roaring back in the u.s. stock market. let's show you what i'm talking about. people were so concerned about the beginning of a bear market just ahead of christmas. up more than at least 5% across the board and all the major market indexes, each market posting its best close since march of 2009, when the bear market bottomed and started rallying. the dow is up more than 1000 points, that is a record itself. s&p 500, up 4.9% itself. fallasdaq, which did

briefly into a bear market, also bouncing back. another thing that helped stocks was rebound in crude. , 0.75%.ust about energy stocks, in fact, falling with a 6% rally. 10's giving up some ground. the yield curve -- a week 5-year note option did help things. the u.s. dollar, up one third of a percent. the bloomberg dollar index at 105. david: thank you, kathleen. australia just getting underway. we are making our way through the alphabet. -- we arecations called higher, but 20 points there. 2.5, roughlyg at a 2.5, 3% based on fair value pop

on the nikkei. about 20,000 is what we are looking at for that index. up 0.8%.ures the fx markets, a big headline about an hour back, a u.s. team is set to be traveling to china for trade talks in early january. that is a bloomberg exclusive on the website. higher on the aussie dollar from the cash close in sydney yesterday. dollar-yen trading at the very high-end. dollar-korea, 11.25. consumer confidence back up above 97. we are looking at gains across the asia-pacific. that's a quick look at markets. lots of other things happening in the world to help you get caught up. your first word news. ed: president trump expressed confidence in treasury secretary steve mnuchin and the federal

reserve, moving to calm markets amid reports he discussed firing the fed chairman. he called mnuchin talented and smart, and said the fed would get things soon. an economic advisor said trump would not fire fed chairman jerome powell. , the course, 100% chairman's job is not in jeopardy by this president. inside a buying search to i know -- to an eight year high. executives acquiring shares of their own company. that signal is a vote of confidence in stocks. the last time insider buying spiked in this fashion, the s&p 500 staged a rally in each of the next two quarters. bank plans to sell perpetual bonds worth as much as 40 billion yuan or $5.8 billion.

chinese authorities met tuesday to discuss ways to help banks replenish capital and sell perpetual debt as soon as possible. new regulations force them to absorb off-balance-sheet debt. an outbreak of the ebola virus in the congo will push back a long-awaited presidential election. congo's electoral commission says sunday's election will be delayed for months in certain communities where hundreds of people have been infected. the vote to choose a successor to the longtime president has already been put off for more than two years. global news, 24 hours a day on air and at tictoc on twitter, this is bloomberg. david: thank you. i mentioned this a couple of minutes back, bloomberg has learned that washington and beijing are set to reopen trade

talks. sources are telling us that a u.s. delegation will be week,ing to china next negotiations with -- negotiations which would be the first since donald trump and president xi agreed to a 100 day truths. else do you know about these talks? margaret: i think what we don't know yet, in a full sense, is what the president is prepared to do between now and the january 7 date we are looking at. that is important in terms of how he lays the groundwork publicly and what his directions are privately to his team. we have been preparing for quite a while for when this president will have the second summit himself with president g -- president xi, and how that with fit into two fronts,

the trade talk and the summit with the north korean leader. there is a desire for the president to get all these pieces put together in time so we can sit down and have a meeting with xi early in the year. we don't know whether this will help lay the groundwork for that to come together or if we are looking for a further erosion of the groundwork. it is being seen in these early hours as we learned about this as potentially the precursor to some meeting of the minds. david: at least they are talking. i guess that is a good start. do we have an idea of who is going and do we have a date? margaret: we are looking at early january, jenny leonard on our trade team has been breaking news this afternoon on this front. again, because the president is traveling, we are waiting and hoping to get a little more from the white house itself as he

makes his way back to the united states. our colleague jen epstein with him on the trip back. kathleen: what are you hearing from your sources about what they think -- not just what they hope to accomplish. we have seen a lot of delegations go and come back. robert lighthizer has been, wilbur ross has been. today have anything they have heard from the chinese side that makes them very confident that this is the time they will make some concrete progress? soonret: i think it is too to say. there are a couple of things i would watch that don't immediately appear to have anything to do with china but i think would be important in the timing of these talks as we see representatives from the u.s. and the treasury go over. note are, again, china-specific events but there are two specifically in january to look for. one is the president's state of the union address and the other is the president's travel to

davos. these could be early indicators setting the stage for his comments domestically and for the rest of the global economy. kathleen: you and the rest of the white house team abrupt the big story on friday of last week that president trump was asking his environs if he could -- his advisers if he could fire jay powell, now there seems to be backtrack. what are you hearing inside the white house about that? did the president realize this was counterproductive, did he just sort of mean to bluster and express his anger? margaret: as we were reporting the story last week, we wanted to be responsible about this. if it is the president just letting off steam, you don't want to turn it into a bigger deal than it is. there was word that the president could be pursuing, testing what the law gives him the potential to do. fromnk the reaction both

individuals and markets to this has helped to dial back the issident's thinking there still a real interest by the president and potentially talking with powell himself or having emissaries inside the white house who are not steve mnuchin, to have a meeting with jay powell. what is not quite clear to us is whether the president can convince jay powell of decisions or -- just when that would happen and who would be part of that meeting if it does happen is still tbd, but it does seem that, for now, the uniform pushback from both republicans in congress and people in the finance world inside and outside the white house has sort of help the president to see the perils of pursuing this any further. you have not seen a president himself see anything -- himself say anything nearly as emphatic as we heard earlier today.

kathleen: thank you for joining us, margaret talev, our senior white house correspondent. joining us now, robert ready. we just touched on a couple of big topics i would like to have you weigh in on. the federal reserve, your point is that you think the markets are too downbeat on the fed. when i ask the fed president if the markets will pause, no rate hike in january. what do you think now, especially after we have seen this big downdraft and stocks, that the idea of three big hikes is not on the table and might end up just doing one? robert: great points and great questions. i guess we need to just watch the ebb and flow in the markets through the end of this year and into the beginning of next year. i think the key argument we would make is that the economy itself rather than equity

markets are still on a solid footing. you have annual growth running at 1.7, 1.75%. signs of wages starting to pick up. you are running at somewhere and that isand 2.7, certainly well above equilibrium , both for employment and growth in the u.s. as well. those numbers would justify the fed continuing, although in a data-dependent and opportunistic fashion, to continue to shift toward neutral rates. rates in the u.s. were still below neutral and ultimately, that implies a move on the part of the fed towards 3%. kathleen: when you see this trade delegation getting ready

to go from china to the u.s., what is going to have to happen to affect your outlook for the markets in 2019? robert: we've had a modestly pessimistic outlook on the trade situation for some time. we've believed for a long time that the u.s. administration would push on tariffs. we do believe it is ultimately inevitable that we see the tariff rates on the 200 billion rising a full 10% to 25%. i think importantly, the next 25 billion, which would be largely consumer goods, we see enough momentum for tariffs to be avoided. that would apply for the monist interior ration. what is important here is we are not really outside of pmi's and soft measures. we are still not seeing an actual impact in terms of east-west trade. levels out oft

the asia region are still positive. they are probably slightly stronger than i would have expected to have seen given the models i'm looking at. i think what that really implies is ant while trade important political consideration, it is not really showing up as an economic consideration. i think ultimately that is a positive that i think markets are missing out on at the moment. david: nice to see you, merry christmas by the way. is that down to simply frontloading. a lot of people would point to that. what happens when that disappears? robert: i think that is an important point. there are two or three considerations. one is frontloading. we've all known there would be a we knowr coming up and it is important to get orders in early. we are also seeing signs of redistribution of trade networks

around asia as china looks to offshore some of that production as well. i think there is a third consideration here. we have certainly seen this historically when we have seen a significant shift in tariffs. the first impact is usually on the price of goods imported and exported. that has been very much down to this negotiation that we are seeing between the u.s. and china. obviously, it is a positive that there will be the official trade mission between the u.s. and china in early january. it is a positive that we are seeing early talks. that is probably enough to avert further deterioration in the trade situation. rob, plenty more to talk about and discuss. rob rennie staying with us.

we ask if the worst is actually over for these japanese markets. stocks in tokyo are set to rebound -- well, that is what we are seeing today. whether that is sustainable, we have yet to see. this is bloomberg. ♪

this is "daybreak: asia perko -- asia." david: looking at futures right now, a 600 point pop on the nikkei 225. us,rennie is still with head of global strategy out of australia. i'm looking at some of your broad assumptions for next year. you think the dollar would hit

100 but you are also constructive on asia equities. how can those two things coexist? robert: i think it is really down to timing. as i said in the previous section, we continue to expect a data, at least in dependent path toward higher rates. we've got another two possibly three hikes from the fed, and that is something that sees the u.s. dollar continue to strengthen toward the 100 level by q3 of next year. in terms of asian equities at least in the short term, again, as i said in the previous section, we are not as pessimistic about the impact of trade tariffs on the region. we are thinking the market probably has overdone the negativity. i think we do see positive notes coming from the u.s. trade mission to china early next year. that shouldthing

continue to support sentiment at least in the short term across asia equity markets. david: assuming that the u.s. correction continues into next year, is that going to be a curse or a blessing for everyone else? i think, if we do ca -- do see an improvement in equity market sentiments that should be a positive. the current correlation between weakness and, for instance, oil markets, and some of the production we are seeing in higher yield markets as well -- we have certainly seen a noticeable interior ration there. i think a -- noticeable deterioration there. i think the lead up should, in the short-term, be positive for other equity markets. kathleen: oil has been such a big story. the big move down, one of the downers for stocks.

one of the reasons you had a nice big rally in the stock market today was that move up in crude oil. energy stocks were rallying as well. what happens from here and what is going to drive the oil market? robert: i think for oil markets to continue the balance, we will need to ca couple of things. i think, importantly, some of the levels that we are getting oil production midlands, for instance, has traded below $40 per barrel. that is in the region where you would certainly expect to see production beginning to be caught in the permian region. see some ofneed to

this negativity about global demand beginning to wane because i think that is important. if i'm correct on those three assumptions, that we do see more activity from opec, the production of the u.s. is probably set to slow, and expectations for global demand, that should be enough to stabilize crude prices. but i'm not particularly optimistic. we had an expectation that somewhere in the region of $50 to $60 is probably something of an equilibrium. i'm not particular he optimistic about crude prices. kathleen: i know the question of brexit is near and dear to your heart as it is to so many people. robert: indeed. kathleen: a big factor now for two years. march 2019, what is going to happen with brexit? will we get a deal, a second referendum? good or bad for the pound? what will that mean for british

stocks ? robert: a big question. as you point out, march 29 is the critical day. 14, wek of january expect the meaningful vote to take place in the house of commons. personally, i see the house of commons rejecting that bill. i've long felt there was no agreement that will meet the requirements of the u.k. cabinet, parliament, u.k. people, and the eu's 27 nations that would have to agree. i've long felt that another referendum and an ultimate rejection of brexit was one of the likely outcomes. what that implies is significant polarity, soliciting -- significant risks around the pound for the first quarter. my preferred path is lower, below hundred 25, through early

january, if that bill is projected. if i'm correct on another referendum that sees brexit being voted down by the u.k. people, that would imply a sharp strengthening in the pound as we move through the first into the second quarter. volatility ahead, a a lot of risks for the u.k. economy. obviously, that very much depends on developments in the first or second week of january. kathleen: if there is a second referendum and they vote to stay, what would that do to the british stock market? real quick. robert: it should be positive, but remember that the bank of england would probably begin to think about executing on higher rates as well. a sharp move higher in the currency, i'm not sure that is too good for u.k. stocks. certainlyrobert, we carried a lot of ground with you this morning. westpac head of global strategy.

this is bloomberg. ♪

asia."this is "daybreak: kathleen: we are taking a quick check of the latest business flash headlines. morgan stanley agreed to pay a $10 million fine to settle for fraud monitoring. the regulatory authority says, for more than five years, the bank's anti-money laundering program failed to monitor transactions that ran through brokers accounts. morgan stanley neither admitted nor denied the allegations. david: amazon is calling it a record-breaking holiday season. more items have been ordered worldwide than ever before. tens of millions of people started free trials or paid amazon prime membership. they say sales of amazon does devices aremazon

up. or than $1 billion shipped. we get you a preview of these markets as we get underway this thursday. this is bloomberg. ♪

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time, get $150 off - and free shipping too. just go to buyleesa.com today. you need this bed. a.m.. it is 10:30 markets have been up and running for about 30 minutes. 80 points higher on the asx 200. the broad-based rally so far. when you look at volumes, no volumes, 40% lower. take your pick. we are of course approaching the end of the year. we are getting some price boosts . perhaps less conviction. 18% rally across the markets. otherwise we will end in the red. is 6:30 p.m. in new

york. a chilly christmas week. the empire state building decked green.red and the s&p futures are also red, not green, as we have a day where the major indexes are up .% roughly, even more quite a bounce back. maybe after that one-day move people are saying, is it really over? you have a net change of 4.25, not a big job. it is an interesting signal. i'm kathleen hays. david: i'm david ingles in hong kong. you are watching "daybreak: asia ." let's get you an update with first word news on the u.s.-china trade negotiations. inthey will hold talks january. sources say the u.s. delegation will travel to beijing in the week of gender seven. the representative another

officials will lead the trump administration's team. they agreed to a 90 day tariff truce. president trump met with soldiers in iraq in his first visit to troops in a combat zone. he told reporters he is no plans to withdraw american troops from the country and may use it as a basis for regional operations against adversaries. his trip comes days after jim mathis was dismissed as defense secretary. partial u.s. government shutdown and it it's that day with the white house and lawmakers at odds over trump's demands to fund a border wall. he wants $5 billion while proposed 1.3e billion dollars for border security. nancy pelosi says the house will pass a bill to reopen the government without money for a lasts past shutdown january 3. the bank of japan governor says

growing overseas risks and volatility are the kind of circumstances that call for sticking with sustainable stimulus. noted brexit as a particular cause. he cautioned against two much pessimism. ly overseas economies have demanded further attention. what is required is to pursue the current powerful monetary easing and measuring the benefits and the costs in a balanced manner. news 24 hours a day on air and on tictoc on twitter powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. david: ed, good one. let's have a look at the markets as we get underway this thursday morning.

u.s. futures, we talked about australia. acid drop on the fix. down about five points. as you would expect after what was a very rare day. 5% on the index. every stock with the exception of one closing higher. 13 nikkei futures, close to priced into the open. about a 2.9%. christmas, the dollar-yen trading at the high end of the range. you do not see oil. up about 10%. kathleen: i'm glad you ran through those markets for us. a very important question, could the worst be over for japanese stocks? long as thek so as economy avoids slipping into a recession. our managing editor is in tokyo with more on this prediction. the ceo of japan warning against undue pessimism.

what does he see that the pessimist don't? >> that's right. telling bloomberg in an interview that there is no reason to be trading at the levels we are for the nikkei. ,eep into bear market territory it has been a terrible month, a terrible quarter for japanese stocks along with many other markets. he is pointing out the global economy is in decent shape. japan is in decent shape. it has pulled out of inflation. moderately.ing this is no cause for massive pessimism in the japanese market. with the market set to rise today after the powerful u.s.

look, his remarks well-timed. kathleen: what are the takeaways from earlier this month? a big story for the company and country. >> that's right. ipo for the telecoms unit of softbank did not do well. the main takeaway that i think helysts told us is that extracted every last little bit of value out of that transaction and prices fell. i don't think people have seen the drop in the stock price for theen as meaningful broader market. mention theid not

prospects for trade tensions going forward and how that could be applied to the japanese market. to the trumperable administration's review of car tariffs, something coming up in february. down,bal markets settle that may make president trump feel more confident he can proceed on aggressive trade agenda which would reflect negatively for japanese stocks. one key point to look for with regard to the japanese market is the outlook for car tariffs in washington. david: right. we should also note we did enter a bear market on the nikkei. nakata-san's is one view. how does that stack up against what others are saying? i think there is a group of

investors and strategists that .gree the fundamentals of the global economy are quite good. yes, we are seeing a synchronized slowdown. the federal reserve seems to be responsive. they are set to pause on the interest rate hiking cycle. you've got some constructive movements on trade. you've got a u.s. job market and consumer in remarkably good shape. for thisno real cause massive decline we have seen in u.s. and global stocks this quarter. at the same time, there are a number of strategists that say the skies, the clouds have lifted.

while there is quite a bit of confidence at some point we will see a rebound in stocks, we could be in for high volatility. traitor's market. when do we take advantage of those valuations? thanks for letting that out for us. coming up on the program, we are talking venture capital and china hitting a roadblock. that is thanks to the trade war. we will hear from an angel investor on the future of vc next. this is bloomberg. ♪

welcome back. you are watching "daybreak: asia ." kathleen: i'm kathleen hays in

new york. we are going to get a check of the latest does this flash headlines. mutual funds are getting no joy in the lap to the holidays -- in the lead up to the holidays, biggest outflows since october 2008. figures from the institute show even though traders and investors dumped mutual funds, they added $25 billion into exchange traded funds. that shows some investors seeing the volatility as a buying opportunity. david: let's have a look at tesla. improving cash flow, putting the risk of a backgrounde in the for now. very strongooks into 2019 and beyond that. shareholders have endured significant swings, exceeding

20% this year in either direction admit concern over elon musk's behavior and tweeting. gap will shutter a three-story location on fifth avenue. the ceo said last month it may close hundreds of underperforming stores and the value of some flagship locations is being scrutinized. ap shares have lost about quarter of their value this year. let's have a look at nissan. looking at shares, we are still closed in japan. and overoking at 900, 5% pop at the open. board member was charged he had underreported compensation.

our reporter has been following the nissan saga and joins us out of tokyo. nice to see you. tell us what is going on and what this is allowing him to do? >> david, he's had medical issues and the reports have been he's had to undergo some very serious treatment for a spinal issue. there's that. more importantly as regards to the case, he is able to mount a defense from outside of the jail. in japanese jail, there is limited access to legal resources in terms of visiting lawyers, studying your case. it is a tight detention atmosphere. by getting out, he is able to mount a broader defense and meet with his lawyers and discussed the case more thoroughly studying the allegations and all of this. it will be easier for him to

mount a solid defense. he is still in jail. he is still detained. new charges he faces. can you tell us more of the charges he is facing? dayt seems like every other there's another unrelated allegation. this involves a saudi individual him out of ad tough financial spot and receive from the sun itself. this is a very complicated story. it is unsourced from the prosecutors. we don't know what is going on. it is down to be subject to a lot of speculation. those are the basic allegations, ghosn funneled money to this saudi individual. it is a serious allegation, that

broadens the case if it proves they have evidence of this and if ghosn directed this as an individual, it could be a very serious expansion of what is involved here. kathleen: nissan filed a statement clarifying cross shareholdings which was downplayed by the company. has anything changed? if so, what? >> one of the reasons the company downplayed this, there emerged reports this move by the company was related to a possible attempt to selloff some .r all of its stake that would be a bold move for the company. in some ways would suggest they are seeking to break up this .lliance from a lot of other perspectives, that does not make sense. it is true as well as the

company has said this is a routine step companies take to update their corporate governance code. historically nissan has been among the companies and automaking conglomerates, they've been a company that has minimized their cross shareholdings. this provision within the updated corporate governance bylaws suggest they will take a look at some of the cross shareholdings. that does not change what is going on at the company. they doe some holdings hold and those would be subject by thetiny, not just management, but also other shareholders as to whether those are benefiting the company and shareholders. it doesn't really represent a big change in what the company is doing. kathleen: ok, thank you for joining us. joining us from tokyo.

don't forget our interactive tv function tv . you can watch us live, catch up on past interviews and dive into any of the functions we talk about and you can be part of the conversation by sending us instant messages during our show. we would love to hear from you. this is for bloomberg subscribers only. this is bloomberg. ♪

david: welcome back. you are watchingdavid: "daybreak: asia." because of trade tensions in the slowing economy. a lucky few seem exempt. our china correspondent caught up with an angel investor last month to find out more. terms of market

opportunities, it does not feel like anything is slowing. by far the most interesting segment is in social commerce. what i mean by that is little red books, social and e-commerce. the really interesting one that social buying that is off-line in communities. if you think about how people people, product, and place. if you can target specific communities, like we live near each other, we are probably buying the same things. and so what is happening because of it, there are groups, a company like good stuff has a groups.e chat they push things to you like a shipment of 30 pounds of potatoes. can you distribute them to meac peopleresell it and so

are getting notifications to buy corn, potatoes, bread, whatever it is. this is interesting. >> when you invest in companies like that, are they looking at ipo's as an exit given some of the disappointing listings? or are they thinking of a longer-term strategy? >> this is really early. for our startups that are be ing at a ipo, it will five, seven years. right now they are thinking about getting the new fund-raising. is there funding for something like this? there is. for some of the hot sectors, there is a herd mentality. everybody is looking at this. these companies will get more and more money and gradually only did top you will get a lot of money. about your strategy, does the trade war impact how you approach your investments? is this something your factoring in? >> not really.

it impacts us an interesting way. there is an emergence of support for local companies and brands. brands, we have a cosmetics company, they are doing 40 times what they did last year. they are the number one online local domestic brand. and so the global rents are exporting. they are becoming a little more expensive. these brands are cheaper and can target the customers in a different way. they are using some of the social methods i mentioned. they are benefiting as people focus their energies. in terms of ai, that is been a ofic at this forum in terms the trade tensions. you are not so hot on ai. is that a question of monetization? the generic use is already there

and it is much more expensive and costly? >> i think there are a lot of successful ai examples. a lot of companies already. bearish, in was terms of new opportunities, there are these big behemoths that are already successful. there are relatively few startup opportunities. valuations, they have fallen around 30%. -- they starting to >> the top companies are still g astronomical prices. for the middle and lower, that is a slowdown. i would say there is half as many deals. writeups are slower. people are taking their time to do diligence. there definitely is a slowdown.

one interesting thing, the new science and technology board. launch nextably year. that will focus on ai opportunities. there's going to be a lot of exits in the local china market. >> that is interesting. in terms of fundraising, people , somebout the challenges say it is not a big issue. is it a challenge for you? >> not at all. the best funds have been easy time fund-raising. there is always money. >> do you expect fewer year given what happened this year? >> for the u.s. dollar? yes. it is the want to watch next year. we could have up to 10 ipo's from our technology portfolio. david: that was angel investor anna fang speaking with tom mackenzie.

let's get a sense of where we are as we head into the tokyo open. our jumpncy markets, off point when it comes to the treasury market, it is a sizable move up. the euro and the sterling are 50 points given the latest drop. have a look at the 10 year yield. the first time in about 15 months it is trading near the level where the fed fund rates are. maybe no rate hike next year. that is up to you. have a look at where we are as far as our chart is concerned. we will talk about the nikkei 225 in a moment. 2019, wee our way into are comparing this bit how that has held, above the 40 level. that has shifted below that of bullish range in 2018. what you want to see is for that

to move up and stay up for 2019. are we getting that? not yet. you have to wait and see. at theave a look indications for tokyo. 3.9%. have a look at the futures market. it is going to be a really good start to the trading session in tokyo. we did enter a bear market in christmas. there is a technical element involved. s&p futures down. 700 points roughly speaking on the nikkei 225. the dollar-yen on the higher end. way, if you have any questions for the markets, we will be joined in a couple of minutes from an investor. she is head of equities research. if you have questions, send them

in. tv is the function. a lot to talk about. just a couple of minutes away from the open of markets in tokyo. a beautiful shot of the imperial palace. two minutes to the open. a cold winter morning in tokyo. this is bloomberg. ♪

i'm all about my bed. this mattress is dangerously comfortable. when i get in, i literally say ahh. meet the leesa mattress. a better place to sleep. this bed hugs my body. i'm now a morning person. the leesa mattress is designed to provide strong support, relieve pressure and optimize airflow to keep you cool. hello bed of my dreams. order online. we'll build it, box it and ship it to your door for you to enjoy. sleep on it for up to one hundred nights and love it or you'll get a full refund. returns are free and easy. i love my leesa. today is going to be great! find out why so many people love the leesa mattress, then try it in your own home.

order now and save big. for a limited time, get $150 off - and free shipping too. just go to buyleesa.com today. you need this bed. >> welcome to the show. you're watching "daybreak asia." i'm david ingles here in hong kong. kathleen: and i'm kathleen hays in new york. welcome to "daybreak asia." our top stories on this thursday, asian stocks set for gains after u.s. stocks were back from the brink of a bear market. it was wall street's best one-day rally since 2009. david: woo hoo. optimism over trade here helping lift the mood across these markets. u.s. delegation by the way will be heading back to beijing early next month. kathleen: still, the market

volatility might give president trump a fed pause on interest rate hakes that he's been hoping for next year. the case of self-inflicted damage. david: yep. and all of that put together we're getting a massive jump up here on the nikkei 225 at the open. have a look at my bloomberg terminal. g.m.m. is your function. a broad based across assets. this early thursday morning, 2% pop. not quite as high as futures were indicating but again opening minutes so let's wait for this really, really get warmed up. and for markets there to stretch their legs. i should note as well this close to new year and basically sandwiched between christmas and new year. we're not really getting a lot of volume so yes, we did get a massive pop in the u.s. but volumes there were quite light. relative to your recent averages here. and across these markets here in the asia pacific, as you can see the s&p futures right here talking about .4%. not a lot of action in the currency markets so far. it's fairly clear, though, this fourth column sovereign bonds a move up across your sovereign

yields here and the japanese 10-year as you can see giving a little bit more space between them and zero. commodity markets were 10% up compared to -- west texas here compared to where we were back in christmas but then again really come down crashing quite hard here. nikkei 225, let me update. the imat function, let's wait for this to get warmed up. i'll take you back to this a bit later on and in the meantime, ed lovelo is with us. ed. >> pobc advised a margin and said replenishing the capital of japanese markets to keep boosting lending and keep supporting the economy. chinese securities journal that allowing banks to issue perpetual bonds will encourage lending and lower risks. bank of china will sell perpetual bonds worth as much as $5.8 billion in what is set to be the first such issuance from a chinese lender. pank of japan govern says

growing overseas economic risks and recent market volatility are the kind of circumstances that call for sticking with powerful and sustainable stimulus. in a speech to business leaders in tokyo, he flagged the trade war and a possible no deal brexit as particular causes of uncertainty. and kuroda cautioned against too much pessimism. >> recently, downside risks mainly related to overseas economies have demanded further attention the somewhat complicated situation what is required is to per civility pursue the current powerful monetary easing while measuring both the benefits and the costs in a balanced manner. >> president trump met with u.s. soldiers in iraq in his first visit as commander in chief to troops in a combat zone. trump told reporters at joint base al-assad no plans to withdraw american troops from the country and may use it as a base for regional operations against adversaries. his trip comes days after jim mattis was dismissed appearance

defense secretary. police arrested at least 18 people in rallies after a journalist set himself on fire to protest the country's economic problems. abdel razaki died in the region and a reminder that the spark that ignited 2010 arab spring uprising the tunisian journalist union is calling for a general strike on january 14. global news 24 hours a day on air and at twitter powered by more than 2,700 journalists and analysts in over 100 countries. david and kathleen. david: ed, thank you. as called by futures here massive pop in japan at the open here. so it did take a couple of minutes to get warmed up. up 3% on the topix and nikkei 225 in early trade. thank you, wall street. so that's a two-day look so from the cutoff that's about 3% here. 4.5% over two days from christmas. though we are still in a bear market mind you. down about 20% from the peak

but it's christmas and i'll leave it for that headline and get you updated a bit later on. the other top story that we're tracking here today most related to this is we have learned -- bloomberg has learned that the u.s. and chinese americans -- are set to reopen these trade talks. first one since the 19-day tariff truce agreed to back in argentina. sources aren't telling us that a u.s. dell garings will be traveling to beijing early next month for further talks. let's get more on the story, jody schneider our senior international editor is here with us. how much progress can we expect from this? >> well, a good sign. these are the first talks as you indicated since that truce was called when the u.s. and chinese presidents met it at the g-20. though they are sending not cabinet level officials but -- from the u.s. side a u.s. trade representative deputy, trade representative and an undersecretary from treasury. so these are not -- this is not

steve mnuchin and robert lighthizer and we would expect they are sub officials as well. that's a signal that not to expect too much out of this. however, it's a step in the right direction and china has come out with another kind of olive branch there week. basically stopping or really halting some tariffs on 700 different products and the u.s. has said it will not reimpose -- will not i pose more tariffs while these -- this truce is going on. so this is all kind of in the right direction but people are saying you can't expect too much from this meeting. david: speaking of halt, the u.s. government, partial shutdown six straight days or sixth day now in fact, what's the latest there? >> it doesn't look like president trump is backing down at all. he says he wants that full $5 billion for that wall between the u.s. and mexico.

and that is his -- his line in the sand. that he will not back down. on january 3, a democratic leadership takes over in the u.s. house which will make it much harder to get things through there. president trump is already blaming nancy pelosi who is expected -- widely expected to win an election for house speaker. and he's saying it's her fault. chuck schumer is willing to deal in the senate but she won't deal but it will be very difficult to get anything -- certainly get $5 billion past the democratic-led house. so it doesn't look like it will it be a short shutdown and some federal workers are already starting to feel pain there and they are not being paid while this goes on. they will usually will -- what happens is it's made up at the end and they do get their pay back but in the short run it's a tough christmas for some federal workers. kathleen: jodi, and the noise trump is making about the border wall and his attacks on the fed might actually get the fed to pause, hitting the stock

market hard, making all kinds of things and even the fed can't ignore. the logical argument? >> well, it could be. as you know the fed when it raised rates earlier this week or last week, basically said that it may slow the pace of increases signaled and may slow the pace of increases next year and a rosy economic forecast. but given president trump's comments about jerome powell and some things have unsettled the markets that could lead to lower growth and could lead to lower growth forecasts which could mean the fed would pause more next year. so it could have this kind of unintended effect of pausing that slowing. of course, president trump doesn't want to talk about a slowing stock market. he wants -- he's saying that, you know, things are looking up and economy is strong but he doesn't see a need for these continued increases. but this could have been -- could have unintended consequences. david: jodi schneider, our senior international editor and

back to markets. we are up about 4%, 3.8% on the topix and could keep us on track for the biggest one-day pop since the u.s. elections. talking politics with jodi. let's track this for and you see where we go from here and joining us from singapore corrine png, a.i.a. investment management, regional head of equities research. corrine, very nice to see you. we talked about trade there and you may have heard part of that conversation we had with jodi. does this mean or do you expect the u.s. and china to kiss and make up first quarter of next year? corrine: it will be too overly optimistic to assume this. there's been a lot of key issues, very difficult ones to resolve between the two countries. they have different national interests, different policies. so we expect some progress because of politically -- likely to want to cut a deal with china and sending a trade

delegation to china in january to negotiate. but i think there will be some element of kicking the can down the road and we have some wins but certainly some of the longer drawn issues about investment restrictions, about technology transfers, the nontariff part -- may still be the sticking points for the two countries. david: corrine, i'm just look at valuations here basically across the region. the question really for investors, we've been asking this for several weeks now. dores the picture get worse next year or do these valuations basically already price in worst case scenarios, your thoughts? >> yeah. in asia, we have seen significant earnings downgrades for quite a number of months now. the msci asia index is trading at 11 times earnings. only 8% below its historical average levels. we've seen some countries pricing in recession scenarios

like corea at eight times earnings. and realistically we need to separate the market noise from fundamentals. while we expect a moderate economic slowdown, but we're nowhere close to a global recession and -- or a u.s. recession or even in asia. you look at the fed, the fed has cut the u.s. growth rate, g.d.p. growth rate to 2.3% but this is still ahead of the u.s. economy's average 10-year growth rate of 1.6%. and if you look at the unemployment rate, it's a 50-year low. and the current account, fiscal deficits, not actually not excessive relative to their 10-year history. and in asia, we're seeing slowing growth, but there's also very strong domestic demand, particularly in the asian markets which can actually help to support the growth going into next year. and we're seeing quite

significant government spending, particularly on infrastructure and that's going to help to lift growth as well. so we're going to -- the face of more sustainable growth going forward. and the thing with equity investors fear uncertainty so they tend to discount the worst case scenario. but certainly if we do see some positive catalysts going forward, then to valuations would likely basically have bottomed and could potentially rise from here. kathleen: kathleen hays here in new york jumping in as well now. you know, one of the concerns in the stock market, and you get a day which is almost record making, right? 5% across the board in the major market indexes. is it the stock market been sending a signal that investors do see more slowdown ahead and that no matter what we say about bouncing back in valuations they feel the fed is ignoring that, it seems to me if that's the case that is --

something that would kind of work against your outlook coming true in 2019. you don't have that same concern, i take it? corrine: a bit of a short squeeze last night. but very -- and during the holiday season, trading volumes tend to be thinner. so you expect greater swings in share prices and also there's a lot of volatility because of the market uncertainty. but if you look at what the fed is doing, its normalization of monetary policy is a necessary evil. i mean, it creates some shock and pain but at the same time, it gives the fed greater flexibility to do quantitative easing when the u.s. economy meets it. and, you know, basically if you look at the economic numbers, if you look at the global p.m.i., it's not pointing to a very significant slowdown in the global economy and something that investors should

discount a. recession at this point in time. kathleen: a quick question, asian central banks, you think they're going to slow down on rate hikes this year? because if -- is that mainly because you do see somewhat slower growth and think the fed is also going to be less aggressive in 2019 than people thought just until, you know, the last few weeks? corrine: indeed. the fed in the recent comments, they did say that they're at the lower end of the neutral right now. and they will let the incoming data and access to a lot of the nick and financial markets' data to decide on the appropriate path going forward. so it's very unlikely that the fed is going to raise rates so much at the peril of the u.s. economy. and from that point of view, the asian central banks will also not be too worried about having to raise rates, defend currencies as aggressively as they have done this year.

and it's going to be mostly favorable market for asia as a well, we have stabilizing currencies and going to benefit countries, especially like indonesia where they have a huge u.s. dollar that exposure of 41%, and also if you look at oil prices, they've actually come off significantly. so there's less pressure on inflation, cost pressures for a lot of these markets as well. kathleen: sure. ok. and if people see stronger growth in asia will offset one of the concerns that -- hurt stocks going into the end of the year so concern about a global slowdown. corrine, we have a lot more to ask you but corrine png, you stick with us. a.i.a. investment management, regional head of equities research. still ahead on this show, perspective from former new york fed president bill dudley on the central bank's path in 2019. david: but first japanese stocks are off to the races on the heels of what was a very extraordinary day really in new york trade. we'll get more from corrine png next. this is bloomberg.

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david: welcome back. you're watching "daybreak asia." i'm david ingles here in hong kong. kathleen: and i'm kathleen hays in new york. so with us corrine png, a.i. investment management regional head of equities research. so corrine, trade, they're not going to kiss and make up any time soon. that's your view. are you not hopeful that perhaps u.s. side, china side, starting off the new year with a meeting on january 7, what do you need to see to make you say, aha, this is it? they're final will he at the point -- it may take some time but they're really ready and make a deal they can agree on? corrine: yeah. both sides need to feel a bit more pain in -- in order to, you know, be a bit more amicable about having a better

deal. but what we will look to see and what investors would look to see is that the tariffs get abolished or at least additional tariffs are no longer in place. i think that will give investors a lot of comfort. because at the end of the day businesses do not like uncertainty. and if they are able to get more clarity on what's going to happen to the tariff policy, they can then plan. if tariffs are going to stay in place at least they can start to reconfigure their global supply chains, relocate some of the manufacturing facilities out of china into the rest of which pecially markets could be bishop of this. so we need more uncertainty. and costs. china has taken -- china has taken baby steps forward as

they have also cut tariffs on the 700 items and more agricultural products from the u.s. lately. and they are starting to focus more on imposing greater penalties on i.p. theft, focusing more on private investments. so these are all the steps in the right direction. and that's going to be encouraging for investors. kathleen: corrine, what would you say the top two or three -- just give me a quick list of equity markets in asia that you would say this -- this is where goy to put your -- this is where you go to put your money now? corrine: in the short term, investors are likely to be quite neutral and stay relatively more defensive. they will be looking at industries where domestic demand remains strong, for example, in health care markets n malaysia, thailand, and also

they will be focusing on companies with higher yields, dividend yields. and this would include, for example, china, taiwan markets, an e to 5% right now, interesting sector real estate, high yield of 4.8%. a bottoming out in the china real estate market that could look interesting as well. david: corrine, since brought it up, just to follow up there on dividend yields, dividend yields are in a large way backward looking because it's based on what the companies did previously, in previous quarters relative to their stock price. how does free cash flow look like given that economies are expected to slow down a bit further? will those dividends come to fruition? corrine: free cash flow marge vns held up -- margins have held up pretty well. stronger corporates have

actually been cost cutting and they have actually been looking toward building healthier balance sheets. so there's been quite a bit of corporate deleveraging going on as well. and we've seen some of this cash being returned via dividends, by share buybacks and that's going to continue. and greater pressure for companies to do so, especially if they don't see a huge -- very attractive investment opportunities out there for em to grow organically and might look at cash earnings distribution back to shareholders. david: corrine, very quickly here, do i buy msci china right now? what do you think about the index? corrine: generally, the markets do cautious on chinese markets. yes, valuations are looking quite attractive, pricing in a lot of the risk but near term some head winds for china

because the economic rebalancing will take time to bear fruit and export numbers are not going to look pretty. if you look at the latest p.m.i. numbers, especially new export orders down to 47 and there's been a lot of restocking and front loading of exports ahead this year ahead of the tariff hikes. and therefore, the economic umbers will be quite unattractive. but longer term, as we move into the second quarter and second quarter we will start to see the benefits of policy easing on the chinese economy and that's when investors could potentially turn more positive off the market and we're seeing greater infrastructure spending as well and positive. david: all right. corrine, if i bought anything based on it just being cheap, i would be in jail, and serious medical condition, or i would probably be dead. corrine, thank you so much for that kind reminder.

corrine png. a.i.a. investment management. regional head of equities research. we'll get you all the top stories in market update next. this is bloomberg. ♪

david: this is "daybreak asia." i'm david ingles in hong kong. kathleen: and i'm kathleen hays in new york. now we're going to take a quick check of the latest business headlines. morgan stanley will pay a $10 million fine to settle allegations of poor fraud monitoring. the financial industry regulatory authority says it's more than five years of bank's anti-money laundering failed to appropriately monitor tens of billions of dollars of transactions that ran through brokerage acts. morgan stanley neither admitted or denied the finra allegations. david: amazon calls it a record breaking holiday season and more imes ordered worldwide. tens of millions of people also starting free trials or paid

amazon prime memberships. now, the company says sales of amazon devices are also up significantly this holiday season compared to what we saw in 2017. and more than a billion items were shipped for free. kathleen: mutual funds are getting no joy in the leadup to the holidays. redemptions in the week ended december 19 topped $56 billion. that's the biggest outflow since october of 2008. however, figures from the investment company institute show even as traders were dumping mutual funds, they were adding $25 billion into exchange-traded funds. the i.c.i. says that shows some investors seeing the market volatility as a buying opportunity. david: right. now, lots more coming up here in the program. we're talking china as well so in terms of where we are, as far as lenders are concerned, rights right? a concern m.p.l.'s and defaults boosting capital might be needed so we dive into bank of china's plans for a first-ever

perpetual bond sale. we will get to the details of that deal. plus a market update when we come back in a couple of minutes. so keep it here. stay with us. this is bloomberg. ♪ ♪ there's no place like home for the holidays ♪

♪ 'cause no matter how far away you roam ♪ ♪ if you want to be happy in a million ways ♪ ♪ for the holidays you can't beat home sweet home ♪

david: good morning. we make our way through the markets here in the asia-pacific. just under an hour away. still 18 degrees celsius out there. ot too cold. n it will be hot as far as markets are concerned. things will open in hong kong in 59 minutes from now. kathleen: you are watching "daybreak asia." david: let's get you would update of the first word news. ed: bloomberg has learned the

u.s. and china will hold mid-level trade talks in early january. u.s. delegation will travel to beijing on the week of january 7. mid-level officials will lead the team. it will be the first face-to-face -- face-to-face discussion since president trump and xi agreed earlier this month to a 90 day tariff truce. the u.s. government shutdown entered its fifth day with -- the president wants $5 billion for the wall. the democratic leader nancy pelosi says the house will pass a bill to reopen the government without money for a wall if the shutdown lasts past january 3. he hasr putin says witnessed the final test of a hypersonic warhead that can overcome existing and future defenses.

russian officials say the glide vehicle can carry conventional or nuclear weapons and maneuver past defenses. it is one of several weapons he counted in his annual speech. to getnt trump's bid other countries to contribute more to the u.n. is coming up short. themore than a quarter of peacekeeping budget is creating a $220 million shortfall. the affected nation is still the top contributor to the u.n. thing more than $10 billion a year. global news 24 hours a day on air and on tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. let's get you an update of markets right now 30 minutes into the session in japan and south korea. south korea is not playing ball. take a look on my bloomberg. top of the world in asia. markets, longuity

story short we are coming off highs of the day as we make our way into the open of southeast asia and china. futures down 4/10 of 1%. sovereign bonds essentially on offer as well. let's change things up and have a look at avat. yes, we got a pop overnight. low volumes in the u.s. and here in the asia-pacific. there is your overall number, 23% compared to. still very early. that is where we are projected to go throughout this trading session. don't be surprised if we are stuck between christmas and new year. quickly, financial conditions, if you believe the fed will pause, it will obviously be good for equity markets, perhaps a stating the obvious year. when the worst days for equity markets, you see this year, is

when this tends to go down. here's 2018 for you. there is your pause overnight. whether that continues is something else. check that out on your gtv library. kathleen: let's move on. oil rebounding as u.s. stocks jumped and russia signaled opec and its allies are willing to beat to help manage the market. it set the crude benchmark before it was on christmas eve. stephen joins us now. which factors with the most important for trading overnight? we have seen down and now we are seeing up. what is going on? what are you busy watching? >> oil is very volatile and biggest factor is the stock market surge. obviously that market sentiment put a lot more faith into oil and you are seeing that across equities in asia and oil as well. we'll jumped the most in two years. -- oil jumped the most in two

years. at the same time you have russia, an open partner, say tner, sayingpec par 2019 will be stable. at the same time russia said if there are many more problems, anymore issues, opec can do more action. they can meet before april. they can try to work something out to put more ground, more volatility in the market and more faith into where oil is going. kathleen: expectations for opec after the russian energy ministry's comments? stephen: absolutely. he came out and said listen, we can do more to put a ground under this market. we can do more to increase stability. i think there is an ancient -- an expectation that opec said they would cut 1.2 million barrels a day of production. that did not do much for the market and prices fell. there were a lot of factors.

there was a large oversupply. there was a lot less face in opec than a few years ago. what russia really did was they said, we can do more, and we are more willing to go out and add more to markets to try and cut production, to put more stability in their. -- in there. that is kind of helping with the prices today. after yesterday's big rise we are also up a bit more today as well. we can maybe expect more of that to come, depending on what opec does going forward. david: i guess in a lot of ways that is another way of saying be positive market sentiment at this point in time might be sustainable. what do you think? what is the sense? -- of course the if you look at market fundamentals, there was a large selloff. that happened over the last few days. if you look at the indexes, you can see maybe it was over-sold.

so this market pop-up was expected in the market to kind of rebound where we were before. david: yeah. we were down substantially and we are up 10% this christmas. stephen, thank you so much. live for us out of singapore. now, the dollar rose overnight, giving back a little bit of that, but overnight a big pop in the dollar and equity markets after president trump touted an opportunity to buy, and reassured markets jay powell, his job was 100% safe. joining us to talk more about all of this in the currency markets is chief currency strategist. very nice to see you. good morning from hong kong. let's get started with the u.s. dollar. you get that right, you get half

the equation right. the dollar index, we're going to get a simple graphic up. do you think we have peaked this year? the the purduenk thousand 19 will be balancing the dollar and other currencies. theme for 2019 will be balancing the dollar and other currencies. an end it is coming to in 2019. i think the dollar will keep strengthening against the yen a little bit. it will be weaker against other currencies, especially the euro or australian dollar. the euro and the australian uplar will probably pick strongly later next year. david: right.

the reason the dollar was strong this year is the outperformance of the u.s. economy. next year the general sense is not just the u.s., but elsewhere in the world, everything basically slows down as well. you have the net effects from the trade war being felt, all these rate hikes from e.m. will be kicking in next year. does that keep the dollar big? thisumi: well, i think year, 2018, the fed hiked four times. the fed hikes probably twice next year. so, the strength of the dollar may continue, but the balance of power will shift away from the dollar. will see other currencies to buy against the dollar. arecentral banks, which

preparing for these rate hikes. kathleen: the thing is if you look at the euro, there is no rate hike coming until probably into well into 2019. it is not seem to be a big move there. boj will not do anything. if we look at other countries, the asian currencies are going to get a break if the fed slows down and their central banks are pressured to do anything. that says this list of currencies that will not have these pressures will have a chance to stabilize and even move higher? thefumi: i think in 2019, asian currencies, most of them were oversold. partly because of the strength of the u.s. dollar and the weakness of that particular country. but into next year i think the domestic strength, currencies

with domestic strength has a high chance to recover strongly. among them, i think indonesia has a big chance. i think they will have the .lection relative stability and economic strength in the election will push up. among asian currencies, that has the best outlook. kathleen: to a certain extent will china currency get boring next year? they push towards seven but the pboc isn't expected to lay out anything weaker than that. hard to say when the trade war issue gets cleared up in any way. what is your view for that currency? masafumi: yes. renminbi willllar

see saw around 6.95 throughout next year. chineseconcern over the slowdown will weigh on the renminbi. pessimisticoverly view on the u.s. china trade war, i think in the coming trump cannotnk ofh farther to china because the u.s. economic fragility into next year. i think the u.s. economy is ok, but it will slow, as compared to this year. so, i think the u.s. economy will feel more the pressure between u.s. and china in 2019. so, i think trump cannot push farther on china on trade issues. david: right. i'm just looking at the survey,

a final question here on the japanese currency. i noticed the assumptions among large japanese manufacturers on dollar-yen, 10941. whyyou help us understand the forecast or assumptions are so conservative on the japanese currency? why dollar-yen is assumed to be so low. masafumi: i think it is similar to the results. they tend to be conservative assumptions. upper revisions compared to downward revisions. they tend to assume the dollar-yen at a relatively lower level for them than the current levels. actually for the japanese exporters, the

dollar-yen level is not a big problem. i think the regular level is much lower. i think u.s. exporters, especially the larger ones, should be ok. japanese authorities are not particularly concerned about the strength of the yen. even below 100. david: ok. on a positive note, let's leave it there. thank you so much for your time. coming up next, we're talking bank of china. a transaction coming up. details of it. we will tell you what they are planning to do. this is bloomberg. ♪

kathleen: this is daybreak: asia. i'm kathleen hays in new york. david: so we are looking at bank

of china. the stories the bank plans to sell as much as $5.8 billion. it would be their first issuance of this kind of debt to a lender, replenishing the capital. eventually hopefully supporting the economy. let's get more on the story. our reporter is here with us in our studio. so, why is bank of china selling for petrol notes for the first time? >> this deal bank of china is planning to do, it is still waiting for regulatory approval. but pboc made an announcement wednesday saying they are discussing matters to help capital and help them increase ratios. the banks in china have issued these before but this is a new

form for them to raise ratios. david: making the balance sheets more complicated. carrie: also because of the new regulation, banks will absorb shadow banking. it will make them more difficult. david: this will help them achieve the ultimate objective of lending to nonstate companies. carrie: yes. the getdata showing ratio has increased the highest in 10 years, which means they have for the room to further lend to corporate. because regulators are supportive to smaller nonstate private firms, it will make their ability to support these enterprises. kathleen: other banks in the same position, could we see more banks tapping the market for perpetual bonds? how big is this market expected to get? carrie: i would think so because chinese banks are taking a large

share of the market and a lot of issuedmaller banks dollar 80 ones, and not to have this open up i would said the market would be potentially very big. we can expect more of these in the near future. kathleen: thank you so very much for joining us. very interesting story. continue to keep a wash on the markets in asia on the day. certainly we saw a big bounce back in u.s. stocks. we will see how far goes and how long it lasts. a lot more ahead. this is bloomberg. ♪

kathleen: welcome back. i'm kathleen hays in new york. david: and i'm david ingles here in new york. a quick check of your latest headlines. exxon mobil, they say the development work off the coast of vienna will continue after the venezuelan -- calls the move aggressive. exxon owns about 45% of the world's deepwater oil recovery.

has been on giant track for its worst annual performance since 1981. kathleen: tesla is poised to generate improved profitability and cash flow, putting the risk of a capital raise in the background. elon musk's company has turned the corner on model three production in demand look strong into 2019 and belong -- beyond. 20% in either direction amid concerns about musk's behavior. ared: gap says they planning to close one of their major new york stores next month. they will shutter a three-story location here on january 20. may close hundreds of underperforming stores. the valley of some of these flagship locations was being scrutinized.

shares have lost about a quarter of their value so far in 2018. era atn: end of an alibaba with the founder announcing his plans to step away. he will hand the reigns over to the ceo on his 55th birthday, but stay on the board through 2020. in 20 years and went from english teacher to world renowned business leader and china's richest man. tom mackenzie spoke down with him to discuss life after alibaba. jack, you aref, going to die old and stupid one-day like anybody. so, what do you do when you retire, you die in a car accident, then the company is gone. you half a country, a group of people, they can believe the

vision we all believe. this is being built for 10 years. down as ceo 2013. five years passed, things are good, shareholders happy, customers happy. confidence in my team. full confidence in the structure, which a lot of investors don't like. hong kong don't like, new york don't like. i think this is the contribution that i and my team built for this world and people in the future will love it. it can make the company last long. tom: you said you want the company to last 102 years. you think that can still happen if you step down? jack: of course. i cannot be ceo for 102 years. so, we have another 83 years to

go for this company. why not? let it go. fullyu have to be prepared for this. just like a kid. 18 years old? kick them out. you cannot hold them all the time. i went to africa. age, kicknt, certain them out. alibaba is a kid. but it does not belong to me. it belongs to society. let it go. that is the test. i love this kind of thinking. tom: and yorkie investors are aware and consent and happy with this? jack: i am very happy. i think people are very happy. david: and that was the cofounder and share of alibaba speaking in september. how marketsook at

in china are likely to shape up, we will talk about futures in a moment, but again, key data coming up. let's do futures, why not. 1.1%, we're coming off a high for the day. expect we're coming off a 6% hawk, just in case you missed it on wall street overnight. every single stock on the s&p 500 was higher with the exception of one, a gold mining stock. futures pointing to gains on the open in china's mainland. up 1.2%. looktle away from markets, at china key data points coming out at about the time cash market opens up its industrial profits, which is in green. we titled this one where you go, i go. that really shows you the co- relation between wholesale price

inflation and how much industrials make. kathleen: a great chart, as so many of our bloomberg charts are. we can things over let's have a look at how markets are trading right now across asia. the nikkei was up 3% briefly. 2.9% this early in the day is looking pretty good. kospi down a-- little bit. we can pretty much call that flat in australia holding onto a gain of just about 1%, about 54 points. live action. we are going to continue this of course on bloomberg markets china open, so keep it right here. this is bloomberg. ♪ is is bloomberg. ♪

>> 9:00 in shanghai. welcome. >> japanese stocks surge the most in more than two years after wall street boards back from the brink of a bear market. >> the u.s. delegation will head back to aging early next month. >> oil holding its biggest advance in two years as russia suggests that opec plus is ready to do more. ♪ >> all right.