>> welcome to "daybreak: australia." i'm paul allen in sydney. shery: i'm shery on. ahn.e: -- i'm shery sophie: and i'm sophie kamaruddin. paul: the top stories we are covering in the next hour. wall street closes lower. the dollar extends its rally to a four-month high. tesla swings wildly in late trade after a mixed bag of results. new losses.

max crisis forces bowing to pull its forecast for the its -- boewing to pull forecast for the year. shery: later, we will break down some of the top tech earnings, including facebook and microsoft, with daniel morgan. let's get you started with a quick check of the markets close. here in the u.s., stocks fell from record highs. the s&p 500 holding above the 2900 level, but still falling 0.2%. we had the likes of caterpillar falling after reporting results. not to mention the energy shares weighed on the market. the oil rally hit a wall with a surprise rise in crude supply here in the u.s. still, about 80% of companies that have reported earnings on the s&p 500 have beat estimates. a few companies coming out after the bell.

we will go through those throughout the show. for now, let's get a check of how asia is expected to fare. australia and new zealand are off-line. sophie: we are looking at a subdued start to the data. plenty of earnings on tap. ahead of that, we are seeing japanese investors prepare for the long holiday break. nikkei futures pointing to slight gains. aussie looking to extend declines. concerns that the electronic picture is slowing. we're waiting on earnings this morning. gdp data from south korea due in an hour. we've had pressure ahead of that, the yuan tumbling to the weakest level since july 2017.l -- 2017.

government's extra budget is not invoking confidence, falling short of 10,000,000,000,001 that -- 10 trillion won that was anticipated. paul? paul: all right. thanks for that. let's get to "first word news." iran says it-- will be impossible for the u.s. to slash it rainy and imports 20 -- slash iranian imports to zero. president rouhani said he considered negotiations with washington. the talks would have to be held in mutual respect. the united states is also punishing those who seek to fulfill their multilateral obligations under security

council resolution 2231, which calls for normalization of economic relations with iran. this is the first time in the history of the united nations that the permanent member of the security council punishes countries who are observing a revolution -- resolution of the security council. unheard of. topsri lanka is chasing level security after officials failed to act on warnings before the easter sunday bombings taht -- that killed more than 300 people. the president says he will take stern action against anyone who failed to share security information. kim jong-un meets president putin in vladivostok later thursday, seeking a new ally in his standoff with the united states. russia is unlikely to say or do anything that might irritate washington and is expected to merely offer diplomatic

support. officials say they won't sign any agreement or make statements after the talks. and j.p. morgan chase has promoted a record number of women to the position of managing director. d.'s aree 117 new m. female. wall street has been under fire for a lack of diversity in its upper ranks. jpmorgan announced a management reshuffle that puts a number of women in place to prefer eventually -- to potentially succeed jamie dimon as ceo. global news, 24 hours a day. i'm ed ludlow. this is bloomberg. shery: the dollar's rally on economic data and the latest round of earnings grabbed the spotlight in u.s. trading. while the s&p 500 slid from records, earnings were still generally promising. su keenan has more. stocks were taking a little

breather. 80% of the s&p 500 companies reporting earnings have exceeded expectations. that's the general message in the market. take a look at the market snapshot. the dollar hitting a four-month high. we also had bonds on the move. check out the big sectors. energy lower. the energy sector, a big surprise surge in supply pushing the commodity down. you'll also notice the related stocks down as well. going to the big movers. it has to do again with earnings. what you see is at&t and caterpillar, both lower on their respective reports. boeing actually had stronger earnings. we saw the stock at one point up some 2%, but they scrapped their 2019 outlook because of all the concern about the grounded max jets. anadarko in the spotlight with a bidding war in the oil patch is

taking place. occidental petroleum making public a $38 billion off it to buy -- offer to buy anadarko. we've got a three-way war to buy in at arco -- buy anadarko. let's take a look into the bloomberg at what the sector performance has been since the earnings season kicked off. you will notice the yellow at the highest. that is technology. consumer is the second-highest. let's quickly look after hours. we do have a story in terms of companies reporting earnings. we'll go through them one by one in a bit. they have been blowing it away despite regulatory oversight. michael soft coming in strong. one of these is not like the other, and that is tesla -- microsoft coming in strong. one of these is not like the other, and that is tesla. paul: a slew of earnings.

let's get into some of the big names you mentioned, that have made moves in extended trading. let's start with facebook. su: facebook, amazing numbers, really coming in strong. let's take a look again at how it's moving after hours, getting back to its high last week in july for the stock. the sales topped estimates. legal costs did cut into earnings. they've set aside about $3 billion for the ftc. look at the big picture for facebook, and you will see a strong year. the one-year look at the stock chart. it is coming back into its strength. rose to $15.1 billion, and that beat predictions of $14.9 billion. let's go on to microsoft. azure, the software-maker's

inud unit, was up some 73% revenue, blowing away every estimate on the street. strong consumer demand. the prophet was boosted, including -- the profit was b oosted, including by deals with new clients, which bodes well for microsoft. let's take a look at tesla, which has seen stocks fluctuate after hours. it was up earlier. now it is slightly down. that has a lot to do with comments on the call by ceo elon musk. return thed to company to profitability, but there's a big dent in that from the actual numbers. they were expected to be ugly. $2.90 perd loss of share, twice the average loss that analysts had expected of $1.30. it has raised the demand question again. musk made a declaration that

tesla has entered an era of sustainable profits. he said that earlier in the year. it was per map -- perhaps premature. he is reiterating that vow, but there are a lot of questions about demand for tesla going forward. paul: elon musk says all sorts of things, doesn't he? thanks for that, su keenan. let's get more on tesla. those results drop in about 20 minutes ago. the call is still ongoing. craig trudell. what's been said in that call? craig: you gave the perfect intro by saying elon musk is sort of one to say interesting things. during the q&a, within the last few minutes, a morgan stanley analyst asked musk about whether he would prefer to be a private company and sort of rekindled the talk about that. musk did say that he wishes that

tesla were private, but said, more or less, that ship has sailed. interesting to hear him say that, given the volatility in the share price and the attention that gets paid to this company and its earnings and delivery results today. shery: one of the reasons that analysts had been bracing for this set of earnings from tesla was that they had really disappointed on those delivery numbers earlier this month. take a listen to what musk had to say about those deliveries. an increase in overseas volume that strained our logistics operation. was the most difficult logistics problem i have ever seen, and i've seen some tough ones. shery: so, what are we expecting from tesla in terms of

production and also profitability? craig: that deliveries issue he is referring to is not going to get any easier, because this is a company that is not only going overseas with the model 3, but even -- don't overlook just taking that car from california, where, obviously, that's its backyard. that's close to the factory where it makes all of its cars. a lot of its early sales have been these early adopters who are crazy about the company. you see a lot fewer resurrects during -- fewer registrations outside of california. they have to contend with moving that delivery operation across the country, let alone around the world. you've seen bumps in that process along the way, where the company has struggled to really smoothly get cars into the hands of customers in europe and china. and they need to smooth that out in order to be able to hit their numbers going forward.

sales for the model s and model x are also declining. what's the plan? what's going to ride to the rescue? is it the model y? craig: they did talk last night about updates to the model s and model x. that was another thing musk talked about on the conference call. he said there was some anticipation on the part of consumers that s and x would be updated and blamed that anticipation for the crummy numbers they had in the first quarter. he sort of is predicting stronger demand for those models now that s and x have had some upgrades, which they announced just last night. but those updates were not extremely significant, so it will be interesting to see if that does come to pass. it's really important that it x,s boost the s and the because those are the higher-margin vehicles in tesla's lineup. the three, it would be great if

they were able to reach the mass market with that vehicle, but in order to keep wall street happy, they also need to have the fat profit margins of the x and s to keep the money coming in. paul: craig trudell, thanks for keeping and i -- an eye on the tesla story for us. we will have more on it later on as well. still to come, decision day for the boj with governor kuroda expected to lower inflation forecasts, despite years of super stimulus. we are live in tokyo later this hour. shery: up next, how did this happen? that's the question plaguing boeing over the 737 max. more just ahead. this is bloomberg. ♪

shery: boeing shares closed slightly higher, despite missing

estimates for the second time in five years and abandoning its 2019 forecast. all turbulence caused by the 737 max crisis. george ferguson is a veteran aerospace analyst and covers the industry for bloomberg intelligence. what did boeing have to say about the plane's return? george: boeing gave no timetable. analysts and investors were hoping for that. really, they laid out the path to getting the airplane back in the air, and that path includes the software fixes they are working on now, which is pretty readily understood by boeing on timing. the real variable here is getting the constituents for the airplane on board with the fix satisfied that it will be safe and ready to go. and that's about getting global regulators, the u.s. regulator, the faa, pilots, and airlines satisfied with the fix. that's something boeing doesn't have a lot of clarity around.

they talk to the fact that that's the path, but they didn't have -- give a sense for when they think this will happen. paul: george, perhaps you at bloomberg intelligence can give us a sense with all those moving parts. how do you see this timetable moving -- playing out? george: we think probably into may some time boeing will be done with the software fixes and such. we think by the time you get into the third quarter, they should have this grounding lifted and starting to deliver inner planes. -- deliver airplanes. they could extend longer than that, but there will be a lot of cash burn to keep building airplanes at 42 airplanes a month. about $40 million per airplane. burn is probably a bad word. by the time you get well into 3q, they will have consumed a

lot of cash and put a lot of airplanes in inventory. they will need to see a lift in orders to keep that production rate. we think 3q is what they are planning on. paul: all right. bloomberg intelligence's george ferguson. thanks for updating us on boeing. we have plenty more to come on "daybreak: australia." this is bloomberg. ♪

paul: this is bloomberg technology global link. look at the top global tech stories of the day. >> samsung intends to invest about $116 billion over the next decade or so to take on intel and qualcomm in the chip market accelerating its push for greater control of the global semiconductor industry.

samsung aims to create 15,000 reduction and research jobs by 2030 to become the world leader -- production and research jobs by 2030 to become the world leader. of at&t fell by as much as 4% in the regular session, following higher than anticipated subscriber losses in the first quarter. the company lost 204,000 net wireless users. at&t is sacrificing promotions in the hope of reducing debt that stems from its takeover of time warner. in latebook jumped trade after reporting better-than-expected revenue of 26% -- up 26%. that despite regulatory threats and privacy concerns. facebook says it set aside $3 billion in the quarter, related to an ongoing privacy investigation by the federal trade commission has not yet been resolved.

for reaction to facebook results, we turn to a shareholder. dan morgan is a senior portfolio manager at sign of trust -- at synovus trust company. he joins us from atlanta. i want to get your take on this $3 billion that facebook has set aside for this ftc investigation. what do you make of that? this led to a significant reduction in earnings. dan: it was a huge surprise. when that number came across the tape, i was like, whoa, where did that come from. i didn't know the ftc was in the process of investigating them, and they felt they had to put some money aside for a future charge-off. we work through those numbers. it was a pretty good number. we add it back into the charge. we get about $1.89 per share. the estimate was about $1.63. year-over-year, earnings increased about 15%. i was really encouraged by the

number once i netted out that charge-off. selina: during the conference call, zuckerberg reiterated this newfound focus on encrypted tape -- encrypted communication and privacy. how do you see that impacting the company long-term, as well as its advertisers? dan: we net out that charge-off. we come up with operating margin of about 42%, a bit of a drop off from what we saw a year ago. the big question is, as they continue to spend money to increase their security, obviously that dilutes the growth you have on the bottom line. as you mentioned earlier, there was a 26% jump in revenues and advertising, yet we only saw 15% jump in earnings per share. you can see how those margins are being squeezed a bit because expenses are going up as it relates directly to security. of course, if they can get that behind them, then that would put

aside all these new stories that keep coming out about privacy and preaching. i think it would increase the confidence in facebook and would obviously help the stock tremendously. shery: we also had microsoft reporting profit and sales that topped analyst estimates, largely on new cloud computing deals. does that mean such in the della -- mean satya nadella is being successful? dan: it's interesting. if you talk to microsoft, they say it's a two horse race, especially in the infrastructure of the services market, between microsoft, acer, and aws, which is amazon's product. acer was up 73% over the quarter. intelligent crowd was up over 22% -- intelligent cloud was up over 22%. aws is about three times greater in terms of market share. gcp offering their

as a distant third. we still have to consider amazon with aws still the leader, especially in infrastructure service. shery: one company that disappointed investors, at least in terms of forecasts, was netflix. we know they have boosted their cash for the year. this chart showing how much they have already burned through. now they are boosting it to $3.5 billion. what does this say about the company? are investors right to worry about netflix, especially when you have so many new entrants in the field? dan: the big issue with netflix is the cash burn. once they burn through that cash, they have to go out and take on more debt, and i think the last -- 2018, they had about $10 billion in debt they had to take on to offset the cash burn. they need the cash to build out content to attract subscribers.

you bring up a good point, that they have increased that forecast. it was about 2.5 to 3. now they've increased it to 3.5. you have disney coming in with their latest disney plus. you have all these other entrants into the market. it is a concern, no doubt. of course, their cash flow number guidance looks like it moved up, which is something we have to take note of, no doubt. selina: thank you, daniel morgan. back to you, paul. paul: thanks very much. that is global link for today. don't miss "bloomberg technology" weekdays. onll to come here "daybreak: australia," an industrial bellwether, caterpillar, warns it is losing market share in china as competitors get aggressive. we will have details on that and more. that's coming up. this is bloomberg. ♪

paul: i am paul allen in sydney. in newi am shery ahn york. let's get to first word news. >> president trump is said to have indicated u.s. support for an assault on the libyan capital of tribute just aaa. he backed the drive to -- the current u.n. government. national security advisor john bolton, also said to have left with the impression of u.s. support for an attack. thee house spokesman says description is inaccurate. they week after the indonesian election, the name is -- nation is divided with both candidates

claiming victory and authorities issuing a warning against this. there will be a healthy lead, but the rival says pollsters indicate he won the vote. the outcome not expected until late may. chinese app maker by sense has won a victory in india, overturning a ruling on its tiktok. it will be available at certain safeguards. there had been growing concerns it could expose children to pornography and how -- other disturbing content. are holding as yard sale fit for a queen, auctioning furniture and artifacts which once belonged to european monarchs. 60 will be offered by christie's in london and it will net $30 million. the top of the bill is a pair of

flemish cabinets created for philip the fifth of spain. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am ed ludlow. this is bloomberg. shery: let's go to sophie. newie: we have had a few signs that we will be monitoring including honda recalling 50,000 vehicles for transmission control and another 94,000 on timing belts issued. we had a nikkei's report that he hitachi is looking to sell its article unit that could be worth -- chemical unit. outlook the board, missing estimates by considerable amounts, waiting for reaction to that and canon had an 8% drop in first-quarter operating income on sliding camera sales and the company has slashed guidance. first-quarter

profit that met estimates after a subsidiary line saw an operating loss wider than expected and aggressive investment seeing continuing. we will watch reaction in this japanese jet engine after they scrapped earnings forecast with no timeline for the 737 to get back on track. we have machinery makers very much in focus. we had a few results from sectors in the region. delivering, but it is being hurt in china. we had he touchy construction with a warning that roberts will -- hitachi construction that there will be a pricing slum. the mining business is a slump for these people as miners seek equipment.ce aging and komatsu will report on friday. we'll get to caterpillar

sin but first the latest on chevron. the spokesperson saying they are confident the deal will be competed. for $38 billion to gain access to the permian basin. we know they would be two second-tier oil and natural gas producers. chevron, a much larger deal. the spokesperson saying they are confident this deal will be concluded. if anadarko were to make -- breakup with chevron they would have to pay a $1 billion fee. occidental making a $38 billion offering for anadarko, and chevron is confident that deal with anadarko will be competed. -- completed. back to caterpillar, the mining unit beat estimates, but it wasn't enough to ease concerns -- ease investor concerns. our mining reporter joins us with details. caterpillar dropping despite leading estimates slightly in

the first quarter. they have had a lot of this, beating earnings, expectations and once they start getting into the details, speaking to reporters, things seem to go downhill. it seems like today we had an interview with cfo who he expanded on the china issue. the chinese market is growing, we are not expecting to see such a flat performance. competitors in china are getting aggressive with pricing. they are selling it cheaper and caterpillar has to figure out how to get the market share back. it almost seems like a glass half-full. we have heard construction companies in china are going to renew their equipment, there is demand. what exactly is the issue? sounds like opportunity. they didn't give much

clarity. on the phone they said we are talking to our dealers now. said, the resource industry, the mining is looking good now. a lot of the analysts were expecting to see that we got follow-through in the earnings. the question will be how much an good mining sales offset slowdown you are seeing, maybe in the china numbers or the construction industries or oil and gas. they said he would look good in the second half of the year -- it would look good in the second half of the year. they haven't had one since september 2017. at that point we could get more info what they are expecting on margins, still a lot of questions. shery: could it be that narrative, this is as good as it gets, is true? -- startingrying to to stick with investors. they are trying to figure out, are we passed the peak?

if so, how far have we gotten? they want to improve on those, good in the construction agencies. now we see people focusing on fundamentals. what will they do with free cash flow, how much buybacks will they be doing? talking less and less about economic growth and super optimistic numbers. now we are asking minutia questions. thank you for updating us. credit suisse's main trading business is out to two quarters of losses. it is emerging unscathed from what the rival called one of the worst environments in recent history. the credit suisse ceo said he is pleased with the global markets unit. >> march was very strong. it is the second highest month in revenue in 39 [indiscernible]

definitely strong. april, we see the same trends continuing. america is strong. the economy is as a tift, low inflation -- employment. there is a slight slowdown because stimulus is fading. it is still very positive, strong growth. creates a very positive environment and we will take advantage of that. asia is doing better. china is doing better. we see that in our numbers. q1 2018.low europe, that is always pressure zone, but -- >> interest rates? >> eurozone, germany, the struggling. it drives the whole economy to a

more difficult place. being the swiss bank, we have control. what matters is switzerland where everything is good. we are doing extremely well. that is the differentiation favorite --lay our in our favor over time. switzerland doesn't share the challenges of the other economies. when i ask if the europeans -- because wee cautious are the first to announce. others really talk about so much, but we are pleased. we are pleased for our people also. we have been under intense criticism and pressure. i am sure we will have difficult orders, but what we wanted to show is a viable business.

delivering byow working more closely with -- which is what we have always wanted. it was up 11%, up now 20%. and becoming material. it is a huge -- >> there is speculation with banks and asset management. is there any part of your bank that would benefit from m&a? >> we believe the results we have produced are based on relying on our strategy. m&a is not something we find attractive at this point in time. we are very -- have very high hurdles for m&a. we find in most situations the returns are not appropriate. 4%, 5%,row assets at when we do $35 billion, you have to weigh any acquisition. --ry: the credit suisse sure

germany. the bank of japan will cut its , but itn forecast today would raise questions on how the economy is barely halfway to its 2% inflation target despite nine years of intense stimulus. tokyo forays is in us. deja vu for governor kuroda. i am afraid so. there is no doubt that after nine years of unprecedented stimulus the bank of japan has not come close to hitting the 2% target no matter how you look at it. today here i am, on the street in tokyo. the bank of japan behind me. they are wrapping up their two-day meeting later this morning. the reason i'm here is four times a year the boj up dates its outlook on the economy. that is why people are very focused on inflation.

,hy don't we focus on inflation bloomberg terminal chart. it tells the story of what is going on. looking at the yellow line, the national headline inflation of -- it is the white line i want you to zero in on because cpi minus food prices, it fell not even barely at 1%. the purple line is food and entergy, but the shortage on the call desk that is what we want to look at. you can see the boj would lower its forecast, particularly out to 2021. our news team saying we could see a reduction to the lowest two year outlook from the boj in years. but i showed you that chart. we are also looking at gdp forecast because we see weaker industrial production, exports, not looking so hot. the recruiter looking for a

second half pick up. he and others expected a trade war to be resolved. china stimulus would go down and be a plus for the region and for japan as well. press conference in particular, people want to hear what the governor says about the real estate market. it has gotten hotter. there are loans building up there that could be seen as one of the side effects keeping rates so low for so long. up.prices have had a move that could have headline inflation and the consumption tax -- everyone says it is not going to hit the economy hard but i am sure governor kuroda will be asked about the hike as well. he will repeat what prime minister abe has said, unless we see growth prices, the tax will go through. about: it is not just all japan. anothes across the water in south korea, gdp numbers. the question is the government

spending offsetting negative forces. government is doing everything they can with a much bigger budget. the inactive a supplemental budget recently. the bank of korea at their last meeting kept rates steady but made it clear risks are to the downside. one of the big risk people see to gdp expected for the fourth quarter from 3.6% year-over-year to 2.6% still growing but a big reduction in exports. let's look at this chart. you will see red and green bars. the red -- the green bars showing it is preliminary first 20 days of the month for south korea exports. and on the right-hand side, they are in the red. look below and you see how that corresponds to the final permit number showing reducing exports through that is a big risk, but it is not just the china trade war. you have seen week investment especially on facilities,

construction. consumption is mixed. retail sales holding their own have people take extra spending from the government that will make a difference, but a very important report for korea today. if you get something weaker, it will be a wet flag. -- red flag. paul: thank you for that. stay with us here on bloomberg daybreak australia. ♪

paul: i am paul allen in sydney. shery: i am shery in. after a strong start to the week, u.s. stocks got lower wednesday as investors assess corporate earnings and economic data. let's dig in with the head of research and strategy. great to have you with us. we have seen earned stocks seeing impacted by the latest headlines. very strained geopolitics, policy driven. could we see them go towards this earnings season and what is

the implication? >> in q1 it was about the fed. importanthe most thing. now that policy is set for the next six to 12 months, the next thing investors want to look at is earnings. we came into this season with low expectations. you are starting to see companies [indiscernible] that is bringing optimism. by -- one thing fueled health care. looking at this sector, should we be concerned regulations will be an issue for the rest of the year when it comes to health care stocks? >> yeah, this is a policy driven market whether the fed or internet discourse. what you are seeing in health care is a lot of discussion if it should be single-payer, how do we change drug pricing? that creates uncertainty. even though this is actually a good earnings growth quarter for

health care, one of the worst, performance year-to-date. it creates problems. one of the companies we have been looking at, caterpillar, a bit of a mixed bag. it looked ok until the talking began during the analyst call and there was concern over market share in china. caterpillar is a metaphor for the broader macro picture. what are you taking away? jay: caterpillar is an emerging markets stock into size. -- in disguise. most of its revenues are from overseas are you this could be information that the market is getting about the broader picture, what it means for china and kind of larger pacific asia. at the same time it is one company. we are looking at the broader earnings of the entire sector to make a real informed decision.

to what degree have the mood music been set? other factors like the fed, central-bank policies, other background noise? you have seen a lot of companies focus on the consumer. in the united states, 70% of gdp growth is driven by consumption. what you have seen in tech has been strengthened, social media, really good retail numbers. there is policy and noise related to that but at the end of the day, consumers, spending power, that is where we have seen a sense of strength. rising oil prices could be a threat to that consumption. jay: we have seen a rise in the last four or five months. we have a tax season that you don't know how it will shake out in terms of how consumers get

the refund back from the government. when you think of discretionary spending, a couple more dollars at the pump, $1000 in a refund you don't get, that could change q2 earnings. globalthank you, executive of research and strategy. you can get a roundup on these stories. bloomberg subscribers go to dayb on your terminal, also on the bloomberg anywhere app. customize settings so you only get news on industries and assets you care about. this is bloomberg. ♪ ♪

shery: i'm shery ahn in new york. paul: i am paul allen, and you are watching daybreak australia. let's get a check of business flash headlines. china's most expensive stock continues its winning streak. they posted a 32% rise in the

first quarter net income to more than $1.6 billion and revenue growth of 24% also beats guidance and guerrilla narrate estimates. -- preliminary estimates. they have slowed down demand for other luxury demands. tumbled the most in seven months after they failed to soothe concern about outlook of other operations. they beat estimates but industries are growing. caterpillar warns of declining market share and aggressive competition from rivals in china. shery: the privacy concerns are growing about amazon's alexa smart speaker. bloomberg is learning a team of -- it can access users' data and easily find the customer's home address. but look at the implications of this. location data is one of the most sensitive pieces of information.

what do we know? a team ofon has thousands around the world whose job it is to analyze a small portion of what users say to its alexa smart speakers. in some cases people doing that reviewing have access to geographic coordinates that verify location of the speaker and appears to be location data referring to your smart phone. there does appear to be a shortcut to come to find who is doing the speaking where they are elect -- talking of alexa data. paul: for some this could chill thempaul:, but for most consumers, do they care? will that affect sales? matt: it is a mixed bag. there have been privacy concerns about sports speakers, not just amazon but amazon -- apple and google since they emerged on the scene a few years ago. there has been some portion of consumers who would not consider buying one of these anyway. letting a powerful set of

microphones into the house. some just don't seem to care. there are tens of millions of these things. comfortableto be with the trade-off they are making. shery: what is amazon saying? they have got the strict safeguards for how employees can deal with this data. they have no tolerance for abusive -- abuse of the system or anyone accessing sensitive customer data when they are not supposed to. they also say they audit who can look at customer data and make sure there is no leaks there. you don't get the impression this is business as usual and they run a tight ship when it comes to personal data, folks speaking to the alexa system. paul: the alexa system, not the only smart speaker on the market. are we aware of similar problems with other speakers or are they tighter? matt: our report doesn't go much into the other guys.

it is not just amazon keeps humans in the loop to review some portions of voice commands. google has a version of this does as well. open secret in technology. when you are building this system that relies on complicated algorithms to churn out these images come off of the systems are at some level checked on by humans. in many cases, it might be called ai but their arguments in the loop. -- our humans in the loop. shery: there are humans involved. thank you so much for that. number technology on amazon. plenty more -- bloomberg technology on amazon. we will look at the bank of america policy meeting. paul: that is it from "daybreak australia." it is a public holiday so markets will not be opening as usual.

we will have all the action of daybreak asia next. looking forward to the open of markets. this is bloomberg. ♪ ♪

paul: good morning, i am paul allen in sydney. shery: i am shery ahn. sophie: i'm sophie kamaruddin theory welcome to daybreak asia. paul: asia looks set for a mixed start after wall street pulled back from a record. the dollar extends its rally. i mixed bag of results for tesla, investors weighing new losses and in the -