haidi: very good morning. i'm haidi stroud-watts in sydney. shery: good evening from new york, i'm shery ahn. sophie: i'm sophie kamaruddin in hong kong. welcome to daybreak asia. ♪ haidi: our top stories this wednesday -- trade talks resume in washington with the u.s. calling for a stable yuan as part of any potential trade deal. u.s. stocks rising. the s&p 500 gaining for a sixth time out of seven sessions.

it is of the highest since early december. a big week of earnings for all the -- aussie miners. the latest numbers. shery: let's get you a quick check of the markets. it was a low-volume session given that we came back from a long holiday weekend. we saw the s&p 500 gain ground with utilities leading the gains. materials also rising. energy stocks also higher, gaining ground for the fifth consecutive session on concerns opec will continue to cut production. we are seeing the nasdaq up 2/10 of 1%. a lot of factors playing into here, but also the fact walmart had the best numbers in the back a decade -- about a decade. that is lifting retailers that and helping the broader market. let's see how we are shaping up for the asian markets. tohie: asian futures point japan and korea.

we are seeing upside movement in new zealand. aussie stocks coming online, looking little changed. a mixed picture at the start of cash trade with earnings very much -- waiting on wage data from australia. checking in on one stock mover in particular. surging over 8% this morning. this is a company that says it is not the headwinds from china. we did see chinese label sales rising 83% on a yearly basis and lifted its guidance, second-half revenue growth coming in line as it did for the first half. haidi: sophie kamaruddin there. first word news with jessica summers. jessica: the sterling rallied the most since november 1 amid optimism of a brexit breakthrough before parliament take control of the process next week. theresa may met jean-claude

juncker later wednesday with downing street talking of a significant plan to break the irish border deadlock. indications are brussels are not expecting much from the talk. >> there is not enough movement for me to be able to assume it will be a productive discussion. an unregulated exit of britain from the european union will have devastating consequences for both britain and europe. sophie: taking immediate steps in response to the world commission's financial misconduct. toroducing 16 initiatives to improve relations with individual customers and small business. the ceo hsing elliott admits full cultural change will take years. the rival says the chief executive will leave at the end of the month with a $1 million payment in lieu opf six months notice -- of six months notice. india has overtaken italy with the country with the worst nonperforming loan ratio of any

major economy. the debt has risen to $190 billion. the rbi said two months ago that the ratio was too high for comfort. malaysia and china a revive a high-speed rail project that the prime minister said he would cancel for being too expensive. since returning to power last may, he's talked tough on chinese investment. he warned against what he calls a new version of colonialism. negotiations are progressing better, with china willing to reduce the $20 million price tag. >> they are quite willing to kill down, if you would like, the size of the project and the cost of the project. probably,sion is now for lack of better expression, in the last mile. jessica: global news 24 hours a

ter,on air and on twit powered by more than 2700 journalists and analysts. i'm jessica summers. this is bloomberg. haidi: u.s.-china trade talks resume in washington with the americans asking beijing to keep the yuan stable as part of any deal. they have reached a tentative agreement, but the clock is ticking towards the march 1 tariff deadline. our congress editor joe is with us. how close are we to a deal? a pledge to keep to that has been working its way through every round of negotiations. joe: at this point, what we know is both sides have tentatively agreed that this will be part of some deal. the precise language and the mechanisms are yet to be worked out. so, it is a sign of some progress because the chinese

valuation has been a sore spot for u.s.-china relations for some time. since president trump's arrival, 2016 campaign that china was a currency manipulator. the treasury department has not taken that step. the fact that the chinese have agreed this could be part of a deal, it is probably a good sign for the progress of talks. whether or not they can wrap up all of those issues by march 1, the deadline, still is unclear, but there may be some breathing room there. shery: investors also watching what is happening with the presidential race in 2020. we are hearing that senator bernie sanders has announced a second presidential bid. he recently had the fiery op-ed against share buybacks. what do we know about his candidacy? joe: he is entering a different political climate than he was in

2016 when he made a surprisingly strong showing against hillary clinton. at that point, he was the progressive candidate. runningage was unique, against a very conventional candidate.he is jumping into a race with a lot of competition. there will probably be a dozen or more candidates. quite a few of them are taking on some of the positions he champions in 2016 and have become fairly mainstream in the democratic party. the idea of expanding medicare. addressing income inequality. these are all the issues that senator elizabeth warren is running on. she is probably going to be his main competitor going into the race. he still has a few advantages. a 50 state organization and a huge mailing list that he can draw on for donations and support, but he may find himself at this point the democratic party has moved on. shery: our bloomberg congress editor, thank you.

let's to a deeper into the trade talks with our fx an rates reporter. we are now seeing sources say that the u.s. is demanding china keep the yuan stable as part of these trade negotiations but we do know they do like to target the chinese currency. what would it mean if china agrees to this? katie: just looking at markets today, it is unsurprising the australian dollar was among the biggest gainers in the group of 10 currencies. that is not surprising given how closely linked australia's economy is to that of china. while my colleague joe before me said we don't have the precise wording of the deal yet, any sign of the u.s. and china are moving closer to a truce on this contentious trade issue, that could open the door to more australian dollar gains. thei: the aussie, the kiwi,

currencies look to gain but in terms of the yuan being seen as a regional anchor currency, will em's feel the effect as well? katie: absolutely. the yuan is seen as an anchor for emerging-market currencies. in particular, the export heavy economies, those currencies could feel a boost. that basket includes the taiwan dollar, the south korean yuan. even the yen to some extent. shery: tell us a little bit about the aussie dollar. you are saying we could see some gains, but at the same time we have the rbi turning more dovish than expected. katie: there is a bit of a tug-of-war. you have the dovish rba, but you have the trade news which is definitely a positive for the australian economy. as soon as this trade issue gets cleared up, that removes one

uncertainty for the rba. haidi: thank you so much for that, katie, our bloomberg fx and rates reporter, taking a look at the yuan and the effects of the aussie. let's look at the early movers in sydney. sophie? sophie: we do have corporate travel management the best performer so far on the asx 200, jumping more than 15% on the back of its results that it is looking to guidance after reporting a net profit increase of 27%. klimbing the most -- a2 mil rising the most since october. this after the company says it does not see headwinds in china. fortescue gaining ground this morning, up about 5%. first half income beating, but a miss on revenue and is at $1.2 billion. looking at some laggards this

morning. we are keeping an eye on domino's pizza. the lower end of the guidance for same-store sales to be within the guidance. that is down by 7.7%. crown resorts under pressure after a reported flat profit and the soft and to 2018. coles group is under pressure this morning. we do have the company stock being cut to underweight at jpmorgan. there may be some moves here on the back of the reports from the theralian that coles -- in coming days in the deal worth 500 million australian dollars. haidi: still ahead, bucking the trend. we will take a look at what helped walmart to its best holiday quarter in at least a decade. bucking the trend as the rest of the retail sector hurts. shery: good the biggest risk to the u.s. economy be deflation? we will be joined by peter to

discuss his contrarian view next. this is bloomberg. ♪

haidi: we are counting down to asia's first major markets open this morning. this is how japanese futures are shaping up. u.s. stocks came back from the three-day weekend. in particular, seeing gains and retailers. walmart with the stellar earnings release. six out of seven gains for the s&p 500. pretty weak volume. looking ahead to japanese trade numbers, nikkei futures looking pretty positive going into the tokyo open. this is daybreak asia. shery: the s&p 500 extended gains for the sixth time in seven sessions. boosts from walmart as the earning season winds down.

looking ahead to the fed minutes released wednesday and adjust the odds of a u.s.-china trade deal. su keenan joins us now. many different factors investors have to watch out for. su: we talked about the low volume earlier. it appears some investors are waiting to hear what the fed has to say on wednesday and waiting to see what happens with the trade deal. will this tariff deadline be pushed back? materials were the strongest sector in the s&p. tech barely higher. it was really the financials that were among the decliners, in part due to the declining or the dip in the yield on the bond. take a look at some of the big movers. what you will notice, walmart having these hugely positive holiday sales which ramy will get to later. caesars -- billion note investor carl icahn revealing he has almost a 10% stake in caesar's

and wants to push the company. wynn resorts doing really well. a couple of different casinos, particularly the one in macau, reporting positive results. electronic arts, very negative reviews on their latest videogame. a badly be enough sector -- beaten up sector. let's go to the bloomberg for something that has been surprised and under the radar. a bounce for bitcoin. you can find the sharks on gtd -- charts on gtv. j.p. morgan chase, jamie dimon who called bitcoin a fraud, may have introduced their own form of cryptocurrency. they will try that out with payments for their own customers. haidi: in the commodity space, oil extending that winning streak. still on the optimism that the saudis are whatever it takes

when it comes to cutting supply. su: let's take a look at the five-day. five straight days higher. in new york, a slight dip in brent crude. if you look at the big picture, we are up roughly 23% year to date on oil. a lot of the headlines are a mix of things in terms of build up and supply in the u.s. but the saudis continuing to cut their output, slashing their exports. a bullish factor for oil. in lot of investors boasting on the trade talks, is one that are a traders said all it takes is one tweet or headline to turn it all around. i don't think volatility will go away anytime soon. a lot of volatility in oil, more than normal. let's take a look at gold. gold also picking up at a ten-month high which is a surprise. copper advancing as the dollar shows some weakness.

highest for gold since april/may. haidi: joining us now is quad group chief strategist, peter. in terms of the lack of conviction we are seeing in the markets, how would you explain it because it feels like investors have priced in what could be a reasonably positive, at least short-term resolution to these trade talks, right? what is going to be the next major catalyst in terms of where the market goes from here? peter: it is a pleasure being here. it reminds me a lot of last year where we had the high on january 26 and then we had the xib meltdown in early february and the pickup of volatility. we are starting to see some of those early warning signs that happened last year. look at the weakness in wheat and soybean prices today. everybody looks at crude oil as the bellwether. before we broke in the end of september, crude got as high as

$75 and went down. we cannot change the supply and demand dynamics. we understand saudi arabia is trying to reduce supply but every single one of our policies domestically and around the globe outside of that is adding to supply. at the same time, we are seeing growth estimates decline rapidly, not only abroad but in the u.s. it seems to be the likelihood is that crude is in a topping pattern and it will go down, and likely there will be continued weakness in other commodity markets. youi: the deflation thesis, are concerned global deflation is more of a concern over inflation. you talk about it the structural issues like technology, changes in the labor market being responsible. does that lend credibility to the idea that central banks are focusing too much on a metric that is beyond their control? paused and, the fed

part of that reason is because of that rapidity of which the inflationary pressures are building. that historically tends to be the norm. the inflationary boom with major technology changes and it ends with a technology bust because technology advances far more rapidly than markets and individuals have the chance to adapt to it. we have been trying to push that off through this long period of quantitative easing. even with a pause, that may not be sufficient to get things going again. you have tremendous instability and that is one reason all of a sudden, our fourth-quarter growth is almost at one point said -- at 1%. it is possible the second quarter could be less. shery: when it comes to the cpi numbers, we have seen some strength underneath those very soft and unchanged headline numbers. we are talking cpi three-month annualized rate rising the

faster since march. is there a risk we might overshoot? peter: overshoot in terms of 10 year yields going down because inflation is not as low as people expect? shery: in the sense that inflation could rise to fast. in the sense the fed would have to move is that of holding steady and actually have to reconsider its pause. peter: we don't see that. the cpi is a little backwards looking. that is what i said if you look at the commodity markets today and what happened since the beginning of the year -- if you look at the breakout in gold today, that can be confirmation of further policy uncertainty. we see all these different things. the cone of uncertainty has certainly gotten larger. we don't know what is going to happen with china tariffs. our own view is that time is on china's side. you have a president that is elected for life against someone who has to face elections. so, if i am the president that

is elected for life, i can hold off against a president that is going to run for election again. he may win, he may not win but at some point there is a termination. from a game theory perspective, the chinese are likely to hold off which means if we limit those tariffs, it is further deflationary. you are seeing -- at the beginning of the year, the up shoot up equities, everything was moving together. we are now not starting to see that. that is always the first sign of warning signals in the marketplace that it might be getting ready for a correction. shery: where are we in terms of consumer sentiment? this chart shows that recent data has trended down. consumer sentiment taking a hit. put if we do see oil prices slowing down and declining, wouldn't that helped the purchasing power and perhaps give a boost? walmart results today and others being right that people are

still spending. a lot you have a of good things packed in it. we had the shutdown in september so that would lead to that. we had this huge decline in the equities market. the rebound in the equity market in january, the reopening of the government will lead to that. some of this uncertainty around the tax plan is an offset to that. the other aspect when we talk about walmart's earnings for example, if you look to quarters ago, walmart had its best day in 10 years. everybody was talking about that here on bloomberg there is no follow-through. what we need to see now -- that was a 10% move. this was a 2.25% move. we have to see if there is follow-through after the news. walmart closed in the middle of the ranks today. it definitely bears watching from a technical perspective. shery: peter, thank you so much

for coming into the studio. peter borish. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers go to your terminal. it is also available on the bloomberg anywhere app. customize your settings so you get only the news on the industries and assets you care about. this is bloomberg. ♪

shery: business daybreak asia. haidi: a quick check of the latest business flash headlines. walmart surged after finally delivering the u.s. retail sector some good news. it brushed off the largely disappointing december sales figures, with the best holiday quarter in at least a decade. rose more than 4% in the quarter, beating estimates by four percentage points. u.s. retail sales fell 1.2% in

december. shery: tesla's latest sales figures shows increasing reliant on the home market. the company resolved production affecting the model 3 and ramped up delivery. sales were mostly limited to the u.s. with revenue more than doubling from a year earlier. income from china fell, while the netherlands overtook norway to become tesla's third-best global market. haidi: woolworths is down the most in three years after outpacing rival coles in the last quarter, but warning it sees the same headwinds. second-quarter sales rose 2.7%. the company says it is confident it can deliver better performance through this year and next. woolworths says trading of the final seven weeks has improved, thanks to more settled whether. coming up next, week of reckoning as australian miners posted the earnings. we will break down the results. topline results came in meeting

expectations or better. really dodging some fears. a further dent on revenue growth on the back of these winter productions in china. this is bloomberg. ♪

jessica: i am jessica summers with the first word headlines. elon musk is preparing for lift off. the u.s. is awarding spacex $300 million of contracts for three military launches. launch alliance has been given $440 million to launch satellites used for early warning missile-defense. the highest of the two biggest defense contractors, lockheed martin and boeing. trade talks have resumed in washington with the u.s. team calling for china to keep the yuan stable. the u.s. wants to fend off any attempt by beijing to devalue its currency to counter american tariffs. the yuan was discussed in earlier talks.

both sides agreed it would be part of any final deal framework. the latest negotiations are set to run through friday. new zealand's a2 milk says it does not see the trade war or china problems seeing a slowdown. profit jumping over 50%. a2 milk gets a quarter of its revenue from china and the ceo told bloomberg that demand is still strong. >> we've got a business that is built on a very strong brand that is oriented around the very best of dairy nutrition for parents. in china, that is resonating beautifully. jessica: twitter will introduce new checks on lyrical ads in europe to combat disinformation and meddling in the run-up to the eu elections in may. for march 11, political advertisers will have to post verification of the right entities with twitter. back in january, brussels

to step up tech protection or face new regulations. has died at the age of 85. he rose to prominence as the creative director of chanel, reaching sales of $10 billion in 2017 and employing 20,000 people worldwide. he developers successful line under his own name. there have been speculation about his health after he missed the paris show last month. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts. i'm jessica summers. this is bloomberg. shery: asian stocks gaining ground for the third consecutive session. let's see how the markets are doing now. sophie: in sydney, stocks nudging higher for the fourth straight day with resource players leading the charge. that stock is up 6.6% this

morning. real estate and consumer shares under pressure in sydney. in wellington, shares snapping a four-day decline. a2 milk leading gains after its results. we have the aussie dollar and kiwi dollar trading near a two-week high on the bloomberg report that the u.s. is seeking yuan stability. some of the biggest laggards in sydney. sliding the most in five years, falling to a march 2017 low after its earnings update. wise tech slipping the most since august, halting a seven-day rally. the logistics company did raise its full-year revenue forecast. pact group heading for the lowest close on record after posting a first-half loss. let's check in on sparks new zealand, after first-half net income fell 11% after a drop. huawei, the company is saying it

is disappointed to lose the company as an equipment provider, but has said it could use others to build out its five g network. haidi: let's take a look at fordescue. beat estimates. paul allen joins us now. better than expected. looking at the next period and possibly going to be more positive. paul: in the, ye -- indeed, yes. that is probably one of the reasons we are seeing shares performing so well on the asx. the second half shaping up to be quite impressive not only because of price increases as a result of the production, but also fortescue looking at lifting production and shipping higher grades as well. $1.3 billion mine development is still on track. as for the numbers, net profit did beat estimates, $644 million, down 5% on the year. but considering the declines we

have seen during that half, still a very strong result. it was the dividend that surprised everybody. $.19 interim dividend, far above production.imistic net debts, $3 billion, much in line. still, $13 a ton. fortescue is still one of the lowest cost iron producers out there. saying theyve bhp cannot really rescue the iron ore market. what do their numbers show? also yeah, the bhp numbers pretty much in line. earningsunderlying $3.7 billion. bhp has had a few outage issues of its own on the supply side. there was the train derailment. there has been some production troubles in chile and the

olympic dam mine in south australia. still, the vale outage as a result of the terrible tragic dam collapse, that is seeing bets on iron ore hitting $100 a ton increasing. we have seen ubs, commonwealth bank pin the number on iron ore. it could hit $100 a ton. depending on how severe those outages by vale are. on the matter of dams and safety, the ceo of bhp saying these dams need nuclear level safety. he is calling on the industry to get together to make sure there are some improvements made. shery: paul allen, thank you. walmart shares rose to the highest in more than three months after reporting its best holiday quarter in at least a decade. right in the face of the overall retail industry which saw a disappointing december sales.

ramy has the numbers. what drove walmart's very happy holiday? ramy: and a lot of it had to do with food. if you carry food, that beat all the clothing. another thing was toys with the demise of toys "r" us. taking a look at what is happening in terms of same-store sales because that was the big barometer we were taking a look at. on the bloomberg terminal, will show you the growth we saw. on the right-hand side of your screen, 4.2% is the number you want to remember. that is one full percentage point higher than what analysts expected. that is also the highest for the fourth quarter and at least the past 10 years. as you were talking about, contrast that with what the u.s. commerce department came out with in terms of sales figures for december. those were the worst in the past 10 years, falling 1.2%. we can see that while it is a tale of negativity for the

sector, walmart is bucking the trend. moody's saying this is a blockbuster quarter for walmart. i want to show you all of the numbers you do need to know. eps and revenue both beat $1.41. just a tad higher than the estimate. e-commerce sales, you can see it was stagnant. 42% growth. but, the whole entire division is not profitable. that is a concern. sam's club, the wholesale company, beating estimates. walmart reiterating its fiscal 2020 forecasts. growth from october through the rest of the year. i mentioned the toys and the food. toys "r" us, the death of that come a lot of the folks in the u.s. grew up buying toys for themselves and family movers. now, walmart taking advantage of this. increasing their own toy

offering. up by about 40%. looking at the share price, for example, walmart and its competitors, it is interesting. you take a look at that chart, you can see the company's that have grocery offerings, that have food do do better than their peers that don't. walmart and target at the top are doing better year to date than nordstrom and macy's. no food there. haidi: it is reassuring for investors given some of these worries about new markets like india. we were expecting the $16 billion deal for flip card to be reflected in the numbers. ramy: that was definitely the concern. there was pressure on operating margins. i want to show you this terminal chart. this came in, u.s. operating markets, at its lowest over the past several years for the fourth quarter.

you can see it continue really doing this. did this actually get a bump or ght of the $16 billion deal? it does not seem so, according to analysts that have been speaking. baird as been saying the concerns over flipcart disrupting walmart's plans are overblown.on the earnings call , the cfo is saying there is some disruption to the business, but they don't expect there is going to be a significant impact. the ceo doug mcmillon saying they do remain optimistic. bloomberg intelligence also saying that walmart still does not need to leverage flipkart's capabilities to get bang of the buck. haidi: ramy with a stellar earnings out of walmart.coming up next , the malaysian prime minister talks to bloomberg about the in the get -- investigation and infrastructure deals with china.

we get highlights from that interview next. this is bloomberg. ♪

shery: we are counting down to asia's first major markets open this morning. nikkei futures up one third of 1%. we could be headed to a third consecutive session of gains after the governor told government that the boj would consider qualitative easing. this is daybreak asia. i'm shery ahn. haidi: i'm haidi stroud-watts. one week after the trial of the former malaysian prime minister was postponed indefinitely, bloomberg has been told all countries connected to the 1mdb scandal have been cooperating and the investigation is more than just money. wherehink this is a case

not only malaysians, but everyone around the globe wants to see a closure. a closure is, of course, not just about bringing back assets and money and what have you, but also to ensure that some people who are responsible have to be -- to be well punished. haidi: the foreign minister told bloomberg that malaysia is in the last page of talks with china to scale down their $20 billion rail project. >> we understand that china wants it to carry on. we also understand that china understands our constraint and quite willing to scale down, if you would like, the size of the project and also the cost of the project.

so, the discussion is now probably, for lack of better expression, in the last mile in trying to see to what extent can numbers.n terms of the haidi: trade talks resume in washington with the u.s. asking china for a stable yuan as part of any trade deal. the next guest says the two sides may not necessarily reach an agreement. joining us from hong kong is the head of asia economics at oxford economics. we keep thinking about these trade negotiations as being part of this broader relationship, this competitive, strategic relationship between two superpowers. there is going to be contentions for years and decades to come. what is the best case scenario we can expect at of this current puzzle?

>> i think the best case scenario we can expect is that realizeo powers, who they are at some degree of rivalry, that figure learning how to manage that rivalry. it looks like at the moment we are going through some flux. the u.s. is getting used to it and having problems with that rise of china and is trying to contain china in certain ways. that is why i said i do think we will get some further good news out of these trade negotiations, but the underlying relationship looks like is getting more complicated. the best case scenario is that both sides learn how to manage that tension. haidi: in terms of this pledge for yuan stability that washington is asking for in every round of these trade talks, is a bit like the currency manipulating fear? a few years too late to be

concerned about this is a major issue. i would imagine they want to maintain the currency. louis: i don't think this is something they are worried about. beijing has much bigger issues on the man's in its the method policies with regards to industrial policy, technology transfer. beijing really does not like a deal with verification enforcement that the u.s. is insisting on. this seems to be an easy one. shery: yet, we continue to see yuan volatility given the talks. this chart showing that the one-year volatility is at the highest level in about a decade. how in line with fundamentals is the value of the yuan at the moment? louis: good question. is notlly think the yuan miles away from where we would want it to be, in terms of how consistent the exchange rate

with the economic fundamentals. i don't think there is a huge issue. it is quite interesting. for 1.5 years now, the yuan has much more exposed to market pressures. that means the market has also been pushing it in the direction where the economic fundamentals would want it to be. i don't think the yuan is miles away from where it should be. shery: the slowdown in global trade has been largely blamed on an economic slowdown in china. is that the full story? louis: i absolutely think that china's weakness, the weakness in china's economy has been a major factor in pulling down the momentum of global trade but not the only one. we can clearly see from china's own trade data, that are other issues. some people like to compare the current episode with what happened in 2015-2016 when china was very much the major factor in pulling down the global economy.

there is a little bit more going on at the moment. it is not only china weakness. i do think the trade war is playing out, but also i think there are other parts of the global economy that are slowing down, especially europe. how does the domestic china slowdown story end? because even if you put aside the trade war tensions, the detrimental effect on spirits in consumer sentiment within china and broadly across the region, you are still seeing an economy that is seeing a major structural slowdown. policy priorities have shifted. i'm wondering how this story ends. is it just the kicking of they can down the road when it comes to structural reforms and the window for getting those reforms through are really close? louis: they are trying to really halt the more pronounced slowdown without giving up these

achievements in terms of deleveraging. they have made some nice progress, at least on containing further deleveraging. we have seen the debt to gdp ratio plateauing out. that is some good news that they don't want to jeopardize. some people are expecting some kind of classical recovery in china with growth at some point starting to bounce back. i don't really look for that. i think what they are looking for is to halt the slide. shery: do stay with us. we have breaking news out of japan. we are getting the latest trade numbers. we were expecting that trade numbers would turn back into a surplus, but they haven't. they are actually in deficit by ¥370 billion, largely really disappointed expectations of a surplus of more than ¥150 billion. the deficit widening in january

from the previous month of december when it was around ¥180 billion levels. the trade deficit on the seasonally adjusted basis has actually widened. the trade deficit, again, also ¥1.4 trillionound which is larger than expected for the month of january. exports falling much more than expected as well, contracting 8.4%, instead of the expected 5.7%. a bigger contraction than the previous month. imports falling less than expected, .6%, instead of a gain of 1.9%. we could have some short-term fluctuations given the chinese new year holiday in february, but still the numbers look pretty bad for the japanese economy with a trade deficit on a seasonally adjusted basis remaining in the red, and even

wider than the previous month. what do you make of these numbers? we were expecting some fluctuations, but the numbers look much worse than expected. is this because of the broader slowdown story because of the u.s.-china trade tensions? louis: i think that has a lot to do with it. we have seen absolutely horrible trade data this year, particular starting in november. it got really bad in december. in some countries, we still see it in january. in china, january was better than what people expected. but in japan, that is not the case. that are a lot of economies in asia that are seeking quite bad trade data. i think people are waiting for that stabilization. on the one hand, coming from the straight talks. and other the other hand, coming from the halt in the slowdown of china's own economy to get some good news later on. shery: january exports in china

really following more than 17%. also, the exports number, the biggest drop since 2016. thank you for hanging around, head of asia economics at oxford economics. we will continue discussing those japan trade numbers, much worse than expected. more ahead on daybreak asia. this is bloomberg. ♪

shery: this is daybreak asia. haidi: i'm haidi stroud-watts in sydney. a quick check of the latest business flash headlines. quitting the baltic states and russia after being kicked out of estonia from money laundering. authorities giving them eight months to return deposits to customers and then sale or transfer loans to other banks. it has admitted much of the $230 billion that was passed through the estonia unit was tainted and facing several investigations, including in the u.s. shery: alibaba has picked up

more shares in cicc, spending about $230 million to raise a stake from 5% to almost 12%. cicc was once dubbed china's goldman sachs, the biggest state-run firm to market. it was part owned by morgan stanley until 2010 and shares were lifted in hong kong five years later. haidi: watching macau casino stocks later on as resorts have better results. peers also rose in the session. the best-performing stock among the six macau operators this year. up more than 30% in new york this year, while bloomberg intelligence macau gaming index is up 15%. korea japan and south kickoff trading at the top of the hour. plenty to watch for investors as japan trade numbers really disappointed. . sophie kamaruddin with a check

of what to expect. sophie: we have futures pointing to gains in tokyo and seoul, but on the back of disappointing trade figures, that can weigh on japanese investors. the yen moving on the back of that update from japan. this is the numbers confirmed early. data suggesting the total amount of trade tumbled and further out signals are looking mixed at the outcome of u.s.-china trade talks will be key to the outlook of supply chain demand. stock to watch when cash trade starts in tokyo. keeping an eye on honda after confirming the close of its u.k. factory. let's keep an eye on -- it announces plans to cut jobs. keeping nissan on watch with a credit rating looking for a downgrade from moody's. haidi: coming up, we will be live in singapore for exclusive interview with southeast asia's biggest developer. the cfo joins us with the

company's latest earnings. do not miss that. live from new york, sydney and hong kong, this is bloomberg. ♪

haidi: asias'major markets have opened her trade. "daybreak: asia." haidi: exports collapsing last month as the trade roar -- were rolls on. trade talks resume in washington with the u.s. calling for a stable -- and a potential deal.

yearofit surged 71% last on asset sales and revaluations, we have an exclusive interview. >> let's get to the market .ction with sophie sophie: we did see some moves on the back of a disappointing trade figure from japan. 110.65 rateuching it has been steady in the back of those numbers, we did see japanese exports falling 8.4% on a yearly basis. another trade deficit. u.s. stocks moving to the upside with the nikkei 225 adding .3 of 1%. sliding. be -- kospi is a fourth day of gains. we have fortescue jumping at the rebound and iron ore prices. and rising to a record on its

results. the company had nasty headwinds in china. haidi: let's get you to the first word news. jessica: sterling rally the most since november 1 on optimism of a brexit breakthrough before parliament takes control of the process next week. meetsome may eats -- indications are that brussels is on expecting much from the talks. >> there is not enough movement to be able to soon -- assume it will be a productive discussion. an unregulated exit from the eu will have consequences for the britain and europe. jessica: it is introducing 16 initiatives to improve relationships with individual customers and small business. they admit full cultural change

will take years. chief executive andrew thorburn will leave at the end of this month with a $1 million payment in lieu of six months notice. india has overtaken italy as the country with the worst nonperforming loan ratio of any major economy. the pile of debt has risen to $190 billion casting the future of some lenders and out. the r.b.i. says two months ago the ratio was too high for comfort. malaysia and china may revive a high-speed rail project that the prime minister had said he would cancel for being too expensive. since returning to power last may, he has talked tough on chinese investment. he canceled the grassland project and warned against what he called a new version of colonialism. the $20lling to reduce billion price tag. to kill downilling

the size of the project and also the cost of the project. so the discussion is now probably for a lack of a better expression in the last mile. >> global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers, this is bloomberg. >> exports saw their a guest decline in two years, well over $9 billion. we are joined from our managing editor. i want to throughout this chat we whipped up to illustrate that japanese exports fell the most since 2016, a decline we had this month that goes all the way back to december. 22016 for the next worst drop. we know there are seasonality

issues related to the 17% plunge. is this a trade war? guest: that is the real worry, it is not japan we are looking at and getting worried about, it is the north asia complex, we are seeing some soggy numbers out of korea. read numbers out of japan and we saw those slightly weird numbers out of janet -- china in january which showed a surprise increase in trade but the they were hard to decipher because you had this chinese new year affect, a lot of that could be exporters trying to get the shipments out before the holidays. put although's together which is what you need to do to get a pulse check on trade in north asia. it is not looking good. the other worrying thing is the chart you put together is you will see there are these times when trade can be soggy and await on japan for quite a while in 15 at 16 and it moved to

being a booster growth in 17 and 18. that was a welcome boost to a rather flatlining economy. , if tradells into falls into becoming a headwind rather than support for japanese -- the japanese economy, that is not good news for the boj and if it is to reflate the economy. be a snapshot of what the global economy is doing and we are not just talking about exports, to china falling more than 70 -- 17%. experts to the u.s. -- exports to the u.s. rose 6.8%. what is this telling us about the global economic picture right now? it is one month, we should be clear. those numbers reinforce what we know about the global economy. the u.s. consumer remains fairly robust, remains -- supportive of

global growth, there are wobbles in europe and china is the big worry out there the moment. we are going to get a better chance to take the pulse of this export picture tomorrow. we get some numbers out of korea for the first 20 days of february. weakness isif the extended out of north asia into the new month a we will get some real numbers out of japan which tell us the momentum of prices on friday. none of those look too good. the price number out of japan would be below with the boj would want to see. the export act drop is not helpful. >> corroded did say they might intervene if needed. thanks for joining us. the yuan also making headlines with the u.s. calling for a stable exchange rate as part of any potential trade deal. we are told that the two sides have reached a tentative agreement on the issue as talks resumed in washington. our china correspondent tom

mackenzie joins us from beijing. we know that you on bears are looking in the shadows. what with this mean to stabilize the currency for china? tom: there are some broad indications for whether that is foreign employers -- inflows or -- allakers a possible of these things a question marks surrounding them if this pledge to stabilize the yuan becomes enforced in any deal between the u.s. and china. what we do know is there has been a tense disagreement, this was discussed among a number of different talking meetings between the two sides. a tentative agreement to include a pledge to stabilize the yuan a memorandum of understanding, that would go to the two presidents to sign off on. president trump on the campaign trail made a big play about

calling china a currency manipulator. no treasury department found grounds for putting that in place and labeling china currency manipulator. among the administration that is stock -- still high on the agenda. in terms of china the pboc and other officials stress they want to keep the currency stable and they will not devalue it as a response to the trade war but it remains a concern for the trump administration. this is being looked at by both sides. beijing has had to intervene to support the currency, to keep it from being devalued more than they are comfortable with. what are the implications if they were to strike this pledge? tom: you are right about the $1 trillion worth of x -- of fx reserve, they went from $4 trillion to about $3 trillion after that surprise drop. that was supporting the measures by beijing to underpin the

currency. in terms of how this is enforced, that is the question. the u.s. want tariffs to be the measure to put in play if china is seen as devaluing the currency. defining it and enforcing it will be tricky. we heard that from janet yellen, saying it would be treacherous or would be treacherously difficult to define whether or not and how a country is getting there currency. there is an irony, the u.s. has called on china to have more of a market role in its economy. more market reforms. we will have to look at the wording of this and in terms of the yuan, it fell about 5% in 2018, it is up 2%. hasave some volatility that peaked in terms of the dollar yuan, it suggests the market is having more of a role in terms of the fx moves in china. ems has implications for

that are positive. you expect any wording of this to be in focus when and if it comes out. tom mackenzie in beijing with the latest on the trade talks. asking about the big risks to -- the markets should be watching out for. >> an exclusive interview with n. joining us from singapore to discuss the latest. this is bloomberg. ♪ mberg. ♪

>> this is daybreak asia. haidi: i and sob boosted sales and gains. two struck a deal to buy

units last month creating what could become asia's largest diversified real estate company. >> capital and is the company we are talking about, the largest property developer in singapore on its way to being voted night largest real estate manager with the acquisition you talked about. those numbers pretty strong given the challenge and the environment. the cfo joins me this morning. i want to talk about the biggest arelenge going forward, you pretty much across those markets seeing a slowdown like china and singapore, like europe. guest: good question. what is important is that we maintain focus but in a very diversified way. so we focus on our key markets. within our key markets we are effective and we maintain our

discipline and execution. what this will bring is greater diversity but operational excellence in this new economy sector. this is what has us very excited. there is a slowing of the chinese economy and people say europe is the biggest worry. guest: it looks like we have basis, and a global the situation like that, seeing a global player, you have to sharpen and double down on what you know in what has worked well for you in the past. for us, it has been this discipline, it has been the ability to nimbly move forward believe the opportunities are and i think it will become important to out execute our peers and that is where our ourational dna, institutional knowledge in sectors of retail, hospitality, office, and residential, something we have been doing for a long time will help us through this time of high uncertainty.

haslinda: this $4.4 billion merger is a him changer, still pending shareholder approval. our things still on track to be ofpleted by the first half this year? andrew: very much so, we have meant to our counterparts and had some good dialogue. we are limited by what we can out and can do together at this point but it is safe to say that both sides are raring to go, we are working to word getting minority shareholder approval. we can [indiscernible] how can the company's work together? guest: one of the things we are excited about is the complementary nature of these companies. they have assets that n does not have, they have a great presence in korea and australia and this

has a wonderful track record in this new economy sector of and business parks. these are areas that could be useful in our growth path. when the two companies come together, they will do so in a natural way that allows us to integrate quickly and then [inaudible] at 12da: are we looking months, 24, is that realistic? andrew, you are right, any mergers sink and swim on integration and execution. that is the feedback we have received from our investors and shareholders. the industrial logic is not in question, many of them like with ac on paper in the companies coming together but the proof will be in execution when this is approved by minority shareholders, hopefully. we have set a target of december 2020 and the date where the deleveraging that has to occur post transaction has to have and

by that time. that is a natural day to work towards in making sure integration happens and we stand that -- by that. pricing we are seeing cases of defaults and we are seeing the larger property developers buying the debt of the smaller rivals. is this going to lead to credit consolidation within the chinese market? andrew: i think so. you are seeing it where the smaller ones have overextended themselves and they have had to look for partners and the stronger winds, the ones with more of a buffer, have been more prudent have been in a position of strength. think of ourselves in the letter bucket. where you have this location and disruption, you will get a situation where opportunity presents itself. this is something we are watching closely in the markets. haslinda: what is your growth strategy in china as part of

your plan to be at global player? andrew: china is our largest market. of the to be mindful macro economic challenges that face china. at the same time if you look at how china has navigated its way out of prior crises or situations, they have done so very successfully and i think they will be able to do that in this round. for us it is a case of staying true to message, staying on focus. we have presence in the five core city classes, let's not overextend ourselves, let's look for opportunities in these classes, there are lots coming up as we talked about before. bringingng -- sustainable portfolio development into play, that gives us a set of opportunities to merge and build on. it is a very exciting time to be looking at opportunities in

china provided your sensible. haslinda: we have greater regulations in the chinese property market, what kind of growth numbers and sales numbers are you looking at? andrew: the target has been to sell 68,000 homes a year. we have had years where we did really well, in 2017, that was a strong year. we are in that range in 2018 and we set the same target for 2019. i think it goes back to not overextending, not getting turned away when times are good but having enough pipeline, having enough in the pot to offer first time and second time home buyers a good product and that is something we have been able to until now and we are confident we will continue to do so because of our focus in tier one and tier two cities where demand is strong. haslinda: what do you make of implemented

recently? that caught everyone by surprise. andrew: the severity and extent of the measures and july caught us by surprise but i would have to say that prior to that, we we didder no illusions, not leave the measures would be lessened anytime soon. we had taken steps before to make sure that we were not overly reliant on the residential market and the results of 2018 speak for themselves. what i think we want to focus on going forward is to be 2000 homes in singapore is something we can live with every can find the right projects and that is -- we canthat can take over but not the reliant on the market. you see theere do property crisis in singapore headed? andrew: the main view on the street which is do not expect a big bump anytime soon.

i do not expect prices -- haslinda: quantify that. a 5% rise in see home prices that would be a pretty good year for the residential market. haslinda: thank you for your time. of n. lim capitaland. wi -- carmakerr 2019.ake around 500 k in 150,000 cars. on are funny in san francisco, they will head to europe. we are headed for potentially more tariffs on chinese goods

depending on how the u.s.-china trade talks go. tesla has begun building their $5 billion factory in china and elon musk announcing he is confident that tesla will make around 500,000 cars in 2019. plenty more to come. this is bloomberg. ♪

shery: new zealand is not see the trade war hurting its bottom results with first profit jumping over 50%. it gets a quarter of its revenue from china. the ceo told bloomberg that demand still look strong.

>> we've got a business that is built on a strong brand that is inented around the best dairy nutrition for parents and in china, that is resonating beautifully. shery: walmart surged with good news, brushing off the industry's december sales. u.s. stores rose more than 4% beating estimates by four percentage points. official data showing retail fell 1.2% in december. macau casinotch stocks after they reported that are than expected fourth-quarter results. abr surged on the news. stockthe best performing up more than 30% in new york.

the gaming index is up 13%. alibaba has picked up more spending 230c million u.s. dollars to raise its stake from 5% to almost 12%. it was dubbed china's goldman sachs after it bought some of the country's -- it brought some tothe countries biggest market. shares were listed in hong kong five years later. let's get a look at how trading is faring in this wednesday session. the nikkei 225 not reacting too much but a horrible set of trade numbers that declined the worst since 2016 when it comes to exports. upside about with three when percent for the nikkei, kospi in positive territory. lots of earnings news to digest including a mixed bag of numbers with some of the big miners, a two is one of the big movers

there after its earnings red -- reached a record high. new zealand saying upside is 1 -- .25 of 1%. this isn't just any moving day.

this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today.

jessica: i am jessica summers with the first word headlines. falling the most since 2016, shipments were down 4.8%, much worse than the 5.7%. the slowdown in china and ongoing trade war blamed with statements to china tumbling more than 17%. the boj says it must mean -- it stimulus.y's trade talks have resumed in washington with the u.s. team calling on china to keep the yuan stable. they want to counter american tourists. the yuan -- had been discussed in earlier talks.

both sides agreed it would eat -- bef a deal framework part of a deal framework. discussions are set to run through friday. and checks on new lyrical ads in europe, to combat this information. political advertisers looking to post ads relating to the election would have to verify their identities with twitter and confirm they are based in the eu. in january, brussels warned them or faceup protection new regulations. elon musk is preparing for a lift off again. the u.s. is awarding spacex $300 million for contracts for three military launches. united launch alliance has been given $440 million to launch satellites used for early warning missile defense. alliance is the bigger of [inaudible]

has died aterfeld the age of 85. ofhelped chanel reach sales $10 billion and employing 20,000 people worldwide. labeligned for italian friend he and developed a successful line under his own name. there has been speculation about his health after he missed chanel's paris show last month. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers, this is bloomberg. numbers crossing the bloomberg with a miss on expectations, they fourth-quarter wage index rising , missing expectations for growth at .6 of 1%. 2.3% growth and wage price index for 2.3%.stimate was meeting expectations when it comes to that number.

this has become the key number for not just the rba but broader in terms of how the economy is faring given that wage growth has been underwhelming compared to levels of inflation which have been tracking at 2% and the a rate cuting in from the rba on the basis of the weakness we are seeing in the wage price growth outlook. we are seeing the aussie dollar falling .201% after the wages numbers missed estimates. we are seeing some brought optimism out there, positive sentiment spreading across asia area did -- asia. what is the latest? sophie: asian stocks pushing higher at october levels although signs of strains are showing with the benchmark and aussie shares fluctuating after a three day gain with earnings in view. led higher by tech

and the korean won is gaining ground and the ringgit on the advance approaching its strongest level of the year. do have the yen looking little changed. figures may prompt the boj to talk down the yen as we saw on tuesday and we are seeing the nikkei rising for a third day. let's check in on some stock movers in tokyo. afterg as much as 3.2% they do see the announced job crown resorts falling the most in two years after the drop in turnover led to fret -- flat profit growth. the company is doubling down in china and corporate travel surging the most in five years

on expectations earnings will come in at the top of its guided range, it does see double-digit growth in north america for the second half but when it comes to europe, guidance looking more prudent for corporate travel on brexit uncertainty. rallying,h sterling optimism of a brexit breakthrough before prom and takes control of the process. quite sois not confident. what has changed? are trying to get changes to the irish border backstop which seems to be an obstacle. is eu president says that he minimizing chances for a breakthrough and expressing his frustration with brexit saying he is losing his patients. it is up to theresa may to get those changes, to try to bring

them back and get them through parliament before february 27. >> the eu has repeatedly said they will not reopen the withdrawal agreement so what can we expect? this is a take it or leave a deal, they have made that clear. if she does get a deal, she would try to bring it back to parliament before february 27 whoh is the day that those do not want to leave the eu without a deal said they will take over the process in parliament. if she does not, it looks like that will happen anyway. and the real question is to my can anyone get anything through before that deadline or is it going to be about talking about extending that deadline, or trying to extend that deadline. many quarters see a no deal brexit as a nonstarter.

we have heard more about that in recent days. the business secretary gregg clark said it would be a disaster and a hammer blow to u.k. industry if the u.k. leaves the eu without a deal. this has got to happen pretty quickly, march 29 is the deadline, the divorce deadline. >> it is looking unlikely that some of these asian trade deals with the u.k. and asian partners are trying to salvage before that deadline, it is not likely they will get through in time either. greg clark also said that in the past day, that they u.k.'s deal, trade deals with south korea and japan are unlikely to be rolled over before that march 29 deadline. , sells aboutabout $24 billion in u.s. dollars worth of goods to those countries.

they import goods to the u.k. as well. this would be problematic. there is a ship that left eastern england that is headed toward osaka, it is supposed to japan on march 30 which is the day after that deadline and it may not get there in time. shery: jodi schneider there in hong kong. positive sentiment we are seeing today in japan. let's discuss that with jennifer wilmot. great heavy with us. it was a pretty devastating mess even if you take into account seasonality on account of china's new year. when itseen the decline comes to the trading relationship with china and japan. is this an indication that in terms of animal spirits and willingness to put money down, you are seeing a reaction to the trade war? guest: i think absolutely.

january is a weak mounts for japanese trade. what it tells us is there an air -- is there is an air pocket in global growth in the last few months. the indicators that we looked at, we think that in the three months to january, global industrial production is a broad measure of what is happening with the economy, it fell at a 3% annual rate area did we have not got all the data but that is our estimate. in the previous three months it was growing at 4% annual rate. this is another indication that the trade dispute and issues have given us a short-term air pocket in global growth. >> elsewhere you have seen momentum chugging along when it comes to the u.s. market, chinese markets have stellar gains since it came back from

the chinese new year break. are we seeing pockets when it comes to investor sentiment where they are pricing in moderately positive outcome to these talks between washington and beijing? pocketn: i think the air in growth is what helped to take the u.s. equity market down 20%. between early october and christmas. aw we're looking forward to potential policy resolution of all of the things that have worried people about the world economy. over the last few months. first and foremost, some kind of trade deal probably comes to fruition toward the end of next month. then obviously, if we do not have a hard brexit my that is a help and the fed changing policy, that is important.

there were a number of things that will be weighing on the world economy. both on the financial sector and on business. they are beginning to look more positive. the sentiment in markets is moving ahead probably off the actual growth numbers. pivot killedovish the risk of a yield curve in version and has potentially delayed the end of the cycle. do you believe that we are nowhere near a recession at least in the u.s. economy? jonathan: it is a significant change. the only real reason to expect a mistaken, it would be a if you frightened consumers and businesses enough at a time when consumer income growth is ok. you could create a recession but if you avoid any major policy your, the chances of recession alone and what the fed has done is maybe stay one of a two-stage

process. they have certainly taken the immediate heat of markets. and a more profound shift which lies behind this, central banks around the world have got a taste of what it feels like to think about the danger of recession. they looked over the edge and they do not like what they see. it does not matter whether it is krugman or whatever, lots of people are worried. policymakers do not have the tools to do with the next recession. there is another stage of the policy shift that may be more a bit strategic in which they might change the terms of reference going forward. make a move toward something a targetingrice level than inflation targeting, that would we one option. a better way of dealing with recession risk. in a way, it is bullish that

central banks are getting concerned now where six months ago they were thinking about tightening. >> what about the balance sheet runoff? we have heard from cleveland fed president advocating the end of the balance sheet runoff by end of year and investors have not been happy about the volatility they believe the runoff has caused. how much should the fed focus on this aspect of the tightening cycle? interesting, i think most of the theory and most of the opinions in the fed said running off the balance sheet is not the cause of the volatility. seem to be, they listening to the markets, the markets are concerned about it. they have become more pragmatic. this is part of losing what i -- plan a ofen a preparing for the next recession which is to get rates up to being above and get the balance sheet down and expand the

balance sheet in the next session. plan a will not work out for -- and neither will plan b. counter and foot -- counterintuitive if the fed has two plans, they would not touch the balance sheet and we are expected to assume it will be autopilot or like paint drying. does it make sense that now that is on the table as well? jonathan: it makes sense and the fed is showing it is pragmatic and it is showing that its focus has shifted from worrying about andmuch economic strength being credible in the face of rising wages and a strong economy. it is focusing on maybe a bigger risk which is how this policy work in the next few sessions, how to safeguard, how to put that recession off as long as possible.

i think that is a positive thing and i think -- shifting on the balance sheet is part of that signal. have we seen more prudence out of the chinese central banks in the fed in terms of their restraint we are seeing from the pboc stimulus versus the chocolate we have -- versus the talk we have, market capitulation or capitulation to the markets? jonathan: you need to look at the pboc policy in context of all the policy levers the chinese have at their disposal. the main thing to say is that all of those policy levers are available to support growth in the short run and they are using more to some extent. whether or not the pboc goes forward with interest rate cuts is a debate. my guess is they will if they have to. i think that fiscal policy, policy, policy, trade regulatory policy is directed

toward signaling to the markets, maybe to the u.s. administration that the economy is going to be supported in the near term and they want to show signs of progress as they go into the last stage of the trade negotiations. we have seen a massive increase in social financing in january. see thewe will probably chinese calibrate their policy response, depending on the outcome of trade talks and how the economy reacts to that. >> especially if the chiat -- chinese yuan is included in those talks. thank you for that, jonathan wilmot, head of macro research. one of china's biggest online health care startups may spin off a major slice of its business. that is next. this is bloomberg. ♪

>> this is daybreak: asia. one of chinese -- china's biggest health care startups may spin off a major slice of its business by listing on china's technology board which is soon to be created. lulu chen has been tracking the story. what doing about a potential spinoff? isu: that is right, wedoctor planning to list their business on the much-anticipated tech board in china. what we have learned from our sources is that they are focusing on the unit that services government and local hospitals because the government is sensitive about the personal data that these units handle and they hope to keep all of that

information at home within the country. it is a $6 billion company that that was the valuation they got in their last funding round. it does not mean that they are rolling out listing other parts of its businesses overseas. it's ivf business that they have operations in australia, mainland china, and hong kong, they are considering to list in the u.s. and that is what our sources have told us. forhat are the applications the business as a whole? lulu: the sense we are getting as of now is that the company is seriously thinking about securitizing various parts of its business and not necessarily doing it through one chunk. the goal might be to list the group but we are seeing how they are spinning off these business units and trying to capture whatever moments on the market there is right now. this is a company that is backed

by some of the largest companies in the world and they are trying to capture that going into businesses, including selling insurances, booking dusters -- doctors and including operating off-line clinics. lulu chen with the latest on wedoctor's plan. into a of the securities on the bloomberg functions we are talking about and join in on the conversation, send us instant messages with any questions you have. it is for bloomberg subscribers only, check it out, it is at tv . this is bloomberg. ♪ ♪

"daybreak: is asia." the industry saw disappointing fields, and walmart enjoying a happy holiday. >> they are still work -- talking about this but we were going through the numbers and store sales were the best in more than a decade.

you what has been happening in terms of comp sales, 4.2% is where we are at all the way on the right-hand side of your screen. this has been gangbusters. a lock, they say this is buster quarter for walmart. this is in comparison to the yellow line on your screen. 1.2% to the negative, the u.s. summer's department saying retail sales tanked in december, the most since 2009 so it is an interesting dichotomy. is positivelyhere pretty much all around. let's take a look at the charts. in terms of the top and bottom line numbers, fourth quarter adjusted eps $1.41. the estimate is $1.34. revenue was higher than expected, 130.8. for the rest it was stagnant am a 40% year on year but looking ahead, they are reiterating cash to 3.5%.-

>> was there any mention about earnings numbers? >> in terms of operating margins that was a concern as well. with that $16 billion deal, you want to get the most bang for your buck. that was a little bit of a hit. hop back in and i can show you this fourth-quarter operating margin. this was not the best, it was the worst over the past several years. for the most recent fourth-quarter number. the idea that this would be a bit of a knock on effect from what is happening with flip card is not playing out if you ask some analysts. peter benedict said the concerns over flip card disrupting walmart's plan proved overblown. calln the earnings car -- the cfo said there is some disruption but they say they expect there will not be any

significant impact. it remains to be seen how the company can leverage this $16 billion, they want as much of a return as possible. to watchr more on what for markets, let's get to sophie in hong kong. sophie: we are continuing to watch chinese vase with exposure to the greater bay area. flipping the board we are keeping an ion chinese -- and i on chinese drug makers. we are keeping an ion macau toppedstocks after they estimates. keeping an eye on the start up cash trade in singapore after it saw profit climbs 71% in the fourth quarter boosted by projects and asset sales. in terms of the data

flow, we have had disappointments when it comes to japan trade that collapsed in chinese exports. we are still seeing the nikkei holding things up by .5 of 1%, the kospi trading to the upside. data reflecting china always ways, they are reacting to the story that bloomberg put out that a pledge to keep the yuan stable is going to be key to the trade negotiations. our markets cover -- coverage continues. the china open is next. this is bloomberg. ♪ the latest innovation from xfinity

isn't just a store. it's a save more with a new kind of wireless network store. it's a look what your wifi can do now store. a get your questions answered by awesome experts store. it's a now there's one store that connects your life like never before store. the xfinity store is here. and it's simple, easy, awesome.

a.m. in hongs 9:00 kong and in shanghai. this is bloomberg markets, china open. yvonne: signs of stress in japan, exports collapsing but the trade war rolls on. shipments to china fell 17%. david: trade talks have resumed calling for a chinese currency getting stable as part of any deal. rishaad: stocks are in overboard territory, the benchmark struggling for direction. ♪