♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond. paul: welcome to daybreak australia. i am paul allen in sydney. shery: i'm shery ahn new york. sophie: i'm sophie kamaruddin in hong kong. we are counting down asia's major markets open. ♪ paul: here are the top stories we are covering. wall street recovers as investors welcomed an apparent truce in the trade war. chip stocks bounce back from a 4% plunge but the pressure is still on. huawei says it has a range of answers to president trump's

been. china says it will win the tariff battle. theresa may rolls the brexit dies one last time and gambles on a possible referendum. shery: we have a big interview coming up. we will be joint exclusively by st. louis fed president in one hour. let's get a quick check of the markets close on tuesday session in the u.s. the s&p 500 gained. most sectors in the green. semiconductors rebounded for the first time in four days after that 4% selloff. we saw some relief coming from the u.s. of these temporary u.s. customers. they rely on business with huawei. we have some stocks in the red. ugly firstn some quarter department store earnings. kohl's and jcpenney. we also had some disappointing existing home sales numbers out this morning.

futures not doing much. let's see how we are shaping up in the asian markets. sophie: we could be seeing a slight balance for asian markets this morning even as it is sticking to its gloomy growth outlook, cutting the forecast. nikkei futures seeing some marginal downside ahead of trading from japan. a pickup and european demand offsets weakness in asia. kiwi stocks opening higher with retail sales on tap. aussie shares with gains in the wake of rba signaling a potential rate cut. gapie bonds that widen the between u.s. and aussie 10 year yields. further gains with three to more rate cuts over the next five months from australia. two year bond yields around 1.2%, looking attractive. paul: thanks very much. that's get the first word news with jessica summers. jessica: thanks.

japan's influential auto manufacturers association says it is disappointed in president trump's declaration that imported cars threatened u.s. national security. the comments are being seen as unusually strong for the group of they come from the chairman who is also toyota's president. he adds the group is just made that the long-term investment in the u.s. is no longer welcome. australian prime minister scott morrison will begin his new term with the economy. the nasa new york city since chinese investment in the country is in freefall amid strained relations with australia's biggest trading partner. after reaching a peak of $10.9 billion in 2016, chinese investment plunged last year to just $3.3 billion. the iranian president says his government needs new powers to resist what he calls an economic war being waged i the u.s. he told the gathering of clerics

that during iran's war with iraq, a supreme council had power and judiciary did not intervene. he says iran is in economic conflict and needs the same type of overarching leadership group. finala may has made a gamble to force her brexit bill to parliament before she steps down. her efforts seem immediately doomed. she promised to give the commons a vote on whether to call another referendum, but only if her bill passes first. many tories, the labor opposition and northern irish party say they will not back or. >> right now, it is slipping away from us. we risk losing a great opportunity. this deal is not the final word on our future relationship with the eu. it is a steppingstone to reach that future. a future where the people of the

u.k. determine the road ahead for the country we all love. jessica: global news 24 hours a day on air and on twitter, powered by more than 2700 journalists and analysts in more than one hunter 20 countries. i'm jessica summers. this is bloomberg. shery: thank you. inying a waiting game washington. bloomberg is called the trump administration held off on blacklisting huawei after concern it could derail trade negotiations with china and officials only when ahead with the latest talks as costs to d.c. and the congress joins us. joe, where are these plans to target huawei have been on the table for months. joe: that is right. planshas been contingency with concerns over security. this is regarding huawei equipment but some officials back when the administration took action against another chinese manufacturer, zte, and

then back off after the penalties had been put in place. now that the talks have hit a stall point, the administration went ahead and posed them on huawei. it raises questions about whether or not this is more of a bargaining chip in the negotiations and whether the administration might lift them should a deal be reached. meantime, the collateral damage from this escalating trade dispute continues to spread. are we likely to see some aid for farmers? joe: we have been told the administration will rollout its plan to assist farmers in the u.s. by thursday. this will be the second time that the administration has acted to supplement farmers income with government money as a result of the trade war. this has been a very touchy

issue for the administration. rural communities were big backers of trump and 2016. he is counting on their support in 2020. they are working on a plan to help both soybean and corn growers as well as other commodities that have been hit by the retaliatory tariffs in china and other potential future action in the trade war. the question though is whether or not this might end up somewhat distorting supply because farmers are now just getting ready to put plants in the ground. they may shift over to soybeans which will have a higher rate of assistance and that could increase the oversupply and could extend the lows over the past of whatever trade war we get to. joe, thank you for joining us. china has the power to know

counterpunch if tensions with the u.s. escalates further. the warning comes from state media which says beijing will ultimately prevail. tom mackenzie is watching this. fighting words from beijing. on thiss is building drumbeat of nationalism. media,ne, social bubbling up anti-american sentiment in china. english-language commentary fighting back against what we have seen in terms of some of the measures the u.s. has put into place. english language commentary saying that china is well onto counterpunch, saying the u.s. will ultimately lose out in the trade war. its unilateral and protectionist approach. in terms of countermeasures, they said there were a number of countermeasures that china could take because of the interdependency of the economies, but they did not detail what those

countermeasures could be. we have had some flavor of some of the steps china maybe mulling when president xi on monday visits the rare earth refinery in china and potentially hinting at a possible move by china to cut off rare earth products and shipments to the u.s. other countermeasures that they could impose around u.s. companies operating here and there has been so great about whether or not they devalue the currency or look at u.s. treasury holdings. the news agency saying that ultimately, the u.s. and its economic expansion over the years was coming to a peak and longer-term china would be winning out. shery: huawei has now given some idea of how it plans to adapt to the u.s. restrictions. what do we know? tom: yes, this was the head of huawei's european operations, the chief european representative speaking in brussels. he said that the company was looking at bidding out its own

operating system after these restrictions were put in place which effectively hamper google's operations with the company. take a listen to what he had to say in terms of the broader scope of measures that washington has put in place to restrict huawei. victimei is becoming the of the bullying by the u.s. administration. attack not just an attack huawei, it is an the law-based order and this is dangerous. paul: huawei smartphones depend on the android operating system and products like youtube and gmail. there is a major? for that future devices as to the products they can offer on those future devices further consumers.

they say their building their own operating system but there is a question as to whether or not u.s. app developers will be able to cooperate with huawei going forward. a for question over that. a lot of work huawei needs to do. they're also looking at potential rivals. blackberry ended their operating system in 2016. microsoft has effectively killed off theirs. they are continuing discussions but clearly the challenge for this company in particular around its consumer devices are very steep. correspondent tom in beijing. we will have more on the huawei story through the morning. still to come, we break down the oecd's latest forecast on global growth and the chances of a fed rate cut. investors tell us why she is optimistic about the

outlook for markets. this is bloomberg. ♪

paul: we are counting down to the citi open. futures pointing higher by 2/10 of 1% so if you're wondering, reduction burns happening in sydney right now. it smells like a bonfire. they are quality is very poor as we count down to the open. i'm paul allen. shery: that is a really grim picture. i'm shery ahn. taking a closer look at the u.s. market close. chip stocks bounce back from yesterday's drop after what is being called a temporary truce in the trade war and u.s. ban on huawei. major retailers plunged after hours. su keenan is watching the action. some ugly first quarter numbers. su: very much an important story

because they tell us about the economic underpinnings. we did get economic data out on home sales which were surprisingly lower so that added a negative underpinning. the relief rally carried the story. let's go to the snapshot because what we saw was bonds slip ahead of the fed minutes that will be the big story later wednesday and the dollar gain. the semiconductor index up in a big way, 2% higher. let's go into some of the big movers and the story to tell is retail. on very and kohl's down disappointing sales that outlook. it it really rattled the entire industry, reversing the optimism we saw from the macy's report last week. meet, the ipo that has been flying time got a very negative report from an analyst

that has a pretty good track flyer, saying this high -- stein mart, an exception in this retail story. they are one of the stories of cannot beat them, join them, excepting amazon returns. they are tying in with amazon to have lockers where they will allow amazon customers to return products. reported after hours and fell on a brutal quarter. they slashed the outlook. if there is any question that nordstrom might give us a different picture, not happening. target reporting later wednesday. they very much might set the tone for how retailers are doing. into the bloomberg, there has been a lot of talk and we have seen the market drop. we saw a rebound.

this has been the best stretch in nearly a decade. when you put the s&p 500 against the 10 day lag, you have a positive outcome. thus far, it has been a positive strategy. paul: in the meantime, we saw oil prices close lower in the regular session. corn hit the highest in a year. what is the story? su: you mentioned the oecd report. there is concern about economic impact of this trait concerned. we have seen brent move higher. brent move higher on concerns about supply disruption and a nigerian pipeline off-line. you look at the five-day intermediate, it came down a bit. there is also some bearish indications of supply data that comes out on wednesday that is a 2.5 million barrel build but also negative prices.

we have a planting issue for corn. the slowest pace in planting in a decade and it has corn surging in the highest for a year. worth noting be as it impacts food prices. paul: thank you very much for joining us. joining us now, we have federated investors manager linda bakhshian. thank you for joining us. let's start off with the trade story. we heard from myron brilliant, the u.s. chamber of commerce head. let's have a listen to what he had to say about the trade situation. myron: right now, we have a very high-stakes poker game going on, but that is really not in the interest of either country. i think china has more to lose here because the tariffs will hit them harder but it is going to hit both of our countries. paul: well, to stick with that poker theme, we hear from the chinese side saying they are not

bluffing and well armed with counter punches. i know you are expecting a resolution to the trade war for the key question is when and how much will get done in the meantime? linda: we in the market were expecting that the resolution would come sooner rather than the escalation that we have seen. however, i think the next milestone we should be looking for is the g20 in japan where the two presidents are going to be meeting. we are looking for a handshake and essentially a promise they will go back to the negotiating table and start to look for common ground again. i think certainly the terrorists wars are going to hurt -- tariff war will hurt both countries. they have to come to one agreement. it will probably be closer to the end of 2019. more so than closer to now. paul: one of the biggest footfalls in all of this is

obviously huawei and that continues to escalate but we did see them rebound in the nasdaq today but nothing has really changed. what did that tell us? was yesterday selloff a bit overdone? linda: we have to divide the market expectations from economic expectations. the market is much more sensitive to day-to-day. i think the economy, the u.s. economy and chinese economy, given the level of stimulus china has put into place and the growth we had in the first quarter and the fed being on hold, i think all of those things point to the underlying economy being strong. i think we have to divide the stock market reaction from the underlying economic impact. to thechina's ambassador u.s. speaking right now, saying

of the door is still open for u.s. stocks, for talks with the u.s. let me turn to the economy in the u.s. we have had some ugly first quarter department store earnings. is that a reflection of the consumer story in the u.s. or just brick and mortars versus online? linda: i think it is the latter. if you look at the consumer, they are gainfully employed, wage increases. their savings are higher as well. put all this together, the consumer remain strong it is how they are choosing to spend. if you look at anything that has to do with jcpenney, they will be suffering. nordstrom was impacted by some execution issues but on the other side, if you look at companies like t.j. maxx or companies that offer experiences, they are doing fine. it is how the consumer chooses to spend that additional dollar on their experiences.

shery: what about the property market in the u.s. because we continue to see some mixed signals. lastly, new construction numbers, new home construction numbers beating estimates but today, existing home sales disappointing. what is your stance on housing -- the housing sector and asset classes surrounding that sector? linda: i think the housing sector, if you look at a longer term trend, you are seeing the demand for households and how formations will increase. there is a structural demand but obviously from month-to-month, there is going to be some volatility. the lower rates we are seeing is going to help mortgages. you may actually see in improvement as the spring and summer months roll-on. paul: just before we let you go, i want to let you -- get your thoughts on brexit. looks as though teresa's may

attempt to get the deal through parliament is doomed as is likely theresa may herself so where does this leave us in terms of your expectations for brexit and the outlook for the pound? linda: i think, as brexit gets kicked down the road one more time, i think for the most part, the market is expecting some kind of a resolution. i think it is one of the more extreme parties take hold, that is when we are starting to maybe hedge brexit a little more. right now, it is almost like we have seen this movie before. the markets are not reacting to the current events but it does have the potential to go bad very quickly if the extreme parties take hold. shery: thank you so much for joining us, linda bakhshian. you can get a round up of the stories you need to know to get your day going in today's edition of daybreak. --omberg's of drivers

subscribers can go under mobile. you can customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪

paul: i am paul allen in sydney. shery: you are watching daybreak australia. a quick check of the latest business flash headlines. the bmw ceo's job is hanging on the balance according to people close to the company. some members of the supervisory board are questioning whether he is the right choice to leave the company and will discuss his prospects in the next few weeks. may.enure ends next bmw is navigating a costly transition to electric vehicles. a stock tont will be watch when hong kong opens later. the ceo of its video streaming business is warning of slowing ad sales in china.

the video streaming has added only 7 million new users in the past six months after previously expanding by almost 40 million in a year. tencent has not said if the streaming platform was profitable. shery: the several claimed inventor of bitcoin is warning the copyright registration for computer code. the agency has named chris wright as the author of the bitcoin proposal and code. it may not settle controversy, as registrations are not as detailed as granting a patent. paul: still to come on daybreak australia, boston fed president says uncertainty around trade is adding a downside risk. we have all the details on his views and a check of the futures as we head into this wednesday's trading. stay with us. this is bloomberg. ♪

at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond.

paul: 8:30 a.m. wednesday morning in sydney. the air is foul. they do hazard reduction burns to reduce the risk of bushfires in the summer at this time of year and it smells awful. the air is thick with smoke for the futures appointing higher. i'm paul allen. shery: it is 6:30 p.m. new york. you are watching daybreak australia. let's get the first word news. jessica: china's official media mouth says the country is well armed to deliver counter punches in a trade war that the u.s. will bear the brunt of his protectionism.

commentaryguage saying victory is in china's hands as free trade is the current trend in joint global support. it adds china will make all necessary action to escalate the dispute. huawei says it has several solutions to being blacklisted by president trump. the company's chief eu envoy says it has ways to offer support to customers and announced what he calls washington's bullying. warned it could happen to any company at any time. becoming the victim of the bullying by the u.s. administration. attack not just an , it is an attack rules-based order and this is

dangerous. jessica: the potential next u.k. prime minister has been denounced as a liar. it would be a disaster for the conservative party. bloombergon has told he is not impressed with boris johnson who looks favorite to become leader went theresa may steps down. johnson is a key brexit figure but denied to challenge for the party leadership afterward the referendum. >> he has lied his way through life, through politics. he is a huckster with a degree of charm to which i am immune. i think it would be a very bad choice, but i suspect it may well happen. jessica: u.s. aviation authorities think a strike is the most likely reason for the problem of the anti-stall of the ethiopian airlines 737 max. wall street journal sites unidentified officials although boeing has declined to comment.

almost 350 people died in the ethiopian disaster in october. both involve the 737 max planes. the chinese woman charged with trying to illegally enter president trump mar-a-lago resort has told the judge she wants to fire her legal team and represent herself. she made her announcement at a routine hearing over the date of her trial. she faces five years in prison for unlawful entry and making false statements. she denies all the charges and told the court she has no need for attorneys. global news 24 hours a day on air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries, i am jessica summers, this is bloomberg. shery: let's go to hong kong for a check of what to watch on markets this morning. sophie: round up some morning calls in australia.

citi downgrading emp. managers have a major --transformation challenge as investors are under appreciating when it comes to the extent to change their business models with the misconduct probes. -- goldmanegulators downgrading to neutral with a lower price target of 14.05 aussie dollars which applies a 14% increase. analysts have trimmed the one your target by nearly 6% in the last six months. this month, challenging u.s. duties on the products for australia. bear that in mind.

paul: thanks for that. let's get more on what we should be watching as trading gets underway with the bloomberg's market analyst adam. what is going to tell us about the global slowdown in stocks like tencent and alibaba? adam: it is an important indicator and soaking to take note of. our reporters have crunched the numbers of one of the big china etf's and it is clear in the month of may, that etf is on course for the biggest reduction of money, biggest outflow in its history. it what it is showing us is the extent to the feelings around the escalations in the trade war. likebig global players alibaba and tencent are being swallowed up. they are big components of this etf and it shows you the vulnerability and the fragility that remains around some of the

risk asset markets have been driven up strongly in recent years and recent months. that people want to dial back on that risk is poser. these kind of tech giants are a great example. it is not necessarily in indictment on business models. it is just in this environment, they want a higher risk premium. so far this month, about $160 million for this china etf. shery: we have seen some huge outflows on the china trade tensions. adam: yeah, it continues to be pretty huge. going into the year, the expectation was you would see a lot of foreign money flow into chinese markets.

part of that was the longer-term story about china's position within global markets. of course, a lot of that being hit pretty badly by not just the trade angst, but the slow down in china's economy and how policymakers are slowing -- responding to that. continuing to dump large swaths of chinese stocks and the weakness of the currency playing into the hands of people thinking that for now, especially with scars of 2015 where you have a huge run-up in stocks, people are very nervous. a lot of that money is slowing. still tilted to the downside in terms of wanting to pull money out of china and are not going in to countries and a big wet. shery: thank you so much. s chartsfind adam' on the library on your bloomberg. u.k. prime minister theresa may has made a desperate final

attempt to get her brexit deal through parliament before she resides, saying the brexit opportunity is slipping away. >> right now, it is slipping away from us. we risk losing a great opportunity. this deal is not the final word on her future relationship with the eu. it is a steppingstone to reach that future. a future where the people of the u.k. can turn the road ahead for the country we all love. shery: let's bring in john joining me in the new york studio. we saw after the prime minister spoke about the pound jumped on potential optimism that we could see a second referendum. that did not last. john: largely because any prospect of the deal would have to be successful. you had all the critical groups you needed to bring into the fold say within a matter of hours that they will not be voting for this.

the main anti-european faction in the conservative party including a number of mp's who have gone along with her and earlier incarnations of this deal are not going to. abour, the major opposition party, those talks have broken down. they have also said they will be voting against this deal. i don't think there was realistically any chance at all this will pass. electionseuropean later on this week. three years ago, you would have thought no british parties would have contested. are they going to make a difference? john: i suspect they will because this has been the story for many years. the country as a whole is quite nearly divided between being pro-european and anti-european but the pit -- people who really want to leave the eu are very much better organized. you have this brexit party set

up by nigel farage who previously led the u.k. independence party. at the moment, they look to get a third of the votes. they will be by far the biggest party. there are various parties that are devoted clearly to saying they would stay in the eu and they have split the vote several different ways between them. again, we basically will have another clear demonstration that the anti-european forces that want to leave the eu are much more clearly well organized and that will be very difficult for any politician to ignore. also critically, nigel farage is saying what he wants is to leave the eu with no deal, no negotiated agreement on what the future relationship will be. rightly or wrongly, the market regards that as very pound negative, very negative for british assets.

shery: one of the reasons that the prime minister has survived for this long is there was not really a clear successor. what changed and who is the front runner? john: what changed his people lost their patience with her. say, she had a very difficult hand to play but she plaited very badly. she has shown a lack of imagination. some gambit along the lines of what you suggested today. if you came up with it a month after her original proposal was announced, it might have made a difference. at this point, it is far too late in the game and people are too entrenched. in terms of where we go next, it is a little like the democratic party in the states. very little barrier to entry so lots of people are maneuvering, saying they will throw their hats into the ring. if you believe the production markets and the pollsters, boris

johnson, probably the best note british politician, he seems to be the very clear front runner. he has a better than 50% chance of winning. agree of whatally he was saying earlier. very charming in a particular way. some of his records, some of the things he has said on the way to the referendum or a little hard to ask plane away. again, this would be -- it is hard to imagine that boris would have any chance at all love negotiating an agreement with the eu if he is plainly very firmly attached to the motion he has to leave. i would see that as increasing very much the chance that britain leaves without a deal, if he gets elected. paul: all right, john authers.

never a dull moment in british politics. thank you. the parade of federal reserve speakers continues today as we gear up for next list of interview with jim bullard in the next hour. ahead of that, kathleen hays has a roundup of remarks from boston fed so what is his view? kathleen: so many other fed officials. jay powell has spoken this week. the new york fed president and now the president of the federal reserve of boston jumps in with the same message. the fed does not need to do anything on interest rates. >> there is no call for monetary policy to change. my own view is that i do view the inflation as predominantly being temporary. i think labor markets are tight and we are going to get much closer to 2%. if the tariffs go in effect, we will probably get to 2% little more quickly. kathleen: in that part of has

prepared remarks today, he is referencing the fact that the fed's key measure inflation is far below 2%. one measure is 1.3%. there is a big gap. will tariffs boost it? he said it is not clear cut. if the tariffs do not last long, it is a temporary one-off thing on inflation but what if they do last? what if they get into pricing? they can have a lasting impact. the whole question of growth, he said the trade war could pivot and in the end, it sounds like he is keeping his fingers crossed on just what happens with a tariff war. >> my some should is the effects are going to be pretty temporary and both sides have an incentive to actually reach an agreement. that may turn out to be a bad assumption. i hope it is not. kathleen: he is helping it does not last long and this has a lot

to do with inflation. bottom line, he says he would be more worried about the economy right now if that inflation stays low because it could be damaging to inflation expectations. shery: he is not only one worried about the trade deal. kathleen: remember when they flashed their forecast and got everybody worried? laurence boone spoke to bloomberg television earlier and here is what she said about the downgrade in the global forecast. >> growth has weakened. quite weak. there has been trained tensions and we are seeing that trade has derailed the global recovery that has been going on in 2017. kathleen: the overall forecast cut to 3.2% but japan and china downgraded again. the u.s. not so much but oecd is now calling on governments to

reignite multilateral trade discussions. sounds pie in the sky but they are concerned about these global tensions getting worse and dragging down the global economy even further. shery: thank you so much. a reminder -- we will have an interview with the st. louis fed president james bullard in the next hour. this is bloomberg. ♪

shery: let's return to the trade war which is causing increasing criticism. nike and adidas among almost 200 companies calling on president trump to abandon his catastrophic tariffs. let's see where things go with marian lovely. my first question will be can there be a real trade deal without the president lifting those existing tariffs on china? >> no, there cannot be a real

trade deal without the president lifting the existing tariffs on china. there was talk about him keeping a subset of the tariffs on as sort of security deposit, an insurance that china would adhere to whatever agreement they meet. but now, we don't see an agreement on the table. both c -- sides see very far apart. the president rather than looking for a solution in terms of working closely with the chinese has ratcheted up the pressure on the chinese in terms of the movement on huawei. it is increasingly -- it looks increasingly unlikely we will have a deal in the short run. shery: businesses in the u.s. are not happy. today, we heard from the president of the footwear distributors and retailers of america. take a listen. gotten a response yet from the trumpet administration, but we can tell you first and foremost as prices go up, the american consumer

does pay that duty, not the chinese. shery: president trump insists these tariffs are being paid by china. are americans buying that rhetoric? mary: most americans are not buying that rhetoric. recent studies have shown the price we pay has gone up because of the tax that is pushed forward to american businesses and consumers. the president has threatened tariffs on another huge group of imports. many of them are things like footwear and apparel and home goods. those are goods in which the producer margins are very low. there is no way for producers to absorb much of this extra tax, so that will be passed forward to consumers and they will see it when they go to walmart or target or wherever they shop. paul: we have been hearing today from kyle bass. he's had some scathing things to say about huawei, adding into the current football status of

that company. let's have a listen. >> it is clear there is a policy that is built into the system of all chinese companies to steal intellectual property from not only the united states but around the world. huawei is a much deeper issue from the perspective of the agreement and all of the other allies of the u.s. it is back to odysseus and the trojan horse. the last thing you want this to realize it is too late that china actually has access to all of your data because you are working on all of their equipment that has backdoors. paul: ok, if we keep that in mind, it certainly makes the path towards resolution rather more difficult, doesn't it? mary: yes. the coming split between the technology world in the u.s. is really game changing for the global economy. kyle bass seems really sure of

what he knows but he has not really had a broad discussion of what exactly it is the u.s. government is worried about with huawei. something of this magnitude, the splintering of the world technology ecosphere deserves a much broader discussion in american society, among american businesses, american policymakers than we have had so far. frankly, it is hard to believe this president's administration on national security. when they have argued that steel imports from canada is a national security issue. or that auto exports from japan or europe our national security concerns. i think we need a lot more discussion before we take even more drastic steps to really splinter the global technology ecospehere and really reduce the market in which are u.s.

companies can really monetize their own investments and innovation. paul: does it concern you this might be started to escalate in ways perhaps we could not previously imagine? we have the official news agency of china saying the company is -- country is well armed to deliver counter punches, but if you put that in the context of president xi's visit to a rare earth mind, what does this tell us? mary: it tells us the chinese are very concerned about the outcome and they are trying to signal that they do have ways to hurt the united states. i think that is not the outcome that they want. that is not the outcome that most americans want. we went into this with a very specific goal. the goal was to increase market access for china for u.s. exporters, to improve the treatment of our intellectual property and businesses. what we are seeing is something entirely different. we are seeing taxes on 1/5 of american imports. we are seeing prices go up for

american families. we are seeing a potential game changer in terms of how our tech companies operate. i think we need to take a step back. will we? that is not the rhetoric we have been hearing. i hope the president is talking to some very calm and sane voices about what is at risk here. paul: thanks for joining us, mary lovely. more ahead on daybreak australia. this is bloomberg. ♪

shery: i am shery ahn new york. paul: i am paul allen in sydney and you are watching daybreak australia. a quick check of the latest business flash headlines. johnson and johnson has lost another case and must pay at least $25 million to a woman who claims she contracted cancer after using the company's baby powder and shower products.

it only reflects the award of compensatory damages. the jury will consider punitive damages that could be higher. shery: hong kong sold its first ever green bond nominated in u.s. dollars to become the second asian government after indonesia to raise such debt. the $1 billion five-year green bond will yield 32.5 basis points over treasuries. the proceeds will be used to finance environmental projects that support the sustainable development of hong kong. paul: it seems not everyone is for veggie burgers. beyond meat is being called up by one small time but well-known analyst who predicted the tumble of facebook back in 2012. $28 target has set a on beyond meat, 60% below the current price. shery: i don't care, i still

like my veggie burgers. coming up, do not miss our exquisite interview with james bullard. plenty more still ahead in the next hour. this is bloomberg. ♪

♪ paul: good morning. i am paul allen in sydney. we are about an hour away from the market open in australia. shery: and i am shary -- ahn in new york. am sophied i kamaruddin in hong kong. welcome to "daybreak: asia." paul: our top stories, asia-pacific stocks look to track the advance, with an apparent truce in the escalating trade war, but the pressure is still on. huawei says it has