tv Bloomberg Daybreak Australia Bloomberg June 20, 2019 6:00pm-7:00pm EDT
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in need. live healthier, live happier by resting deeper. right now, you can get 10% off, plus two free pillows. go to leesa.com today. paul: welcome to "daybreak australia." kathleen: i'm kathleen hays at bloomberg world headquarters in new york. sophie: we are counting down to asia's major market opens. paul: here are the top stories we are covering in the next hour. wall street hits a new high as global central banks shift toward easing. gold surges while the dollar falls the most in january. .il climbs the most this year iran takes down a u.s. navy
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drone, intentions pick up in the gulf. kathleen: we have to take a look now at how u.s. stocks ended. look at the numbers on the stock -- s&p 500, a record. hit an all-time high in april and now was at another all-time high. close.at the it was up a full percent at the end of the day. almost a point as well. the dow across the board looking pretty good. we can see the futures pointing a little lower. hard to say why. a big rally started yesterday at the fed decision at the powell press conference where he made it clear the fed is tilting definitely toward cutting rates, so maybe a little bit of give back while markets wait for asia
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to open. let's go on to the bond market because again, a rally kicked off yesterday in the bond market . it continued around the clock. at this point, the 10-year note is around 2.02%. got down to 1.96 percent. is not surprising they take a little bit of a pause to see what the future data is. a vice chair of the federal reserve on blue -- on blooper television -- on bloomberg television early tomorrow in new york. i think that is another reason people are holding back. stocks climb to a six-we high. futures mixed as we wait for the end of the week. in hong kong, we expect more protests. front, the tech industry places bets on a slowdown and apple warns of terror threats -- tariff
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threats. 's regular bond buying operation very much in focus as yields sank lower into the weaker and -- weaker end of the band. japanese inflation data do this morning, expected to show slowing cpi. paul: thanks very much for let's check in on the first word news now with ed ludlow. ed: congress issued a rare rebuke to trump with the senate voting to block arms sales to saudi arabia. a handful of her and's supported a democrat move to criticize the president's use of an emergency declaration to sell weapons to the kingdom despite congressional objections. the resolution passed, but the numbers did not reach the 2/3 majority needed to override a potential trump veto.
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chinese president xi jinping says he is ready to play a positive role in the drive to denuclearize the korean peninsula, calling for a political solution as he arrived in pyongyang. he met kim jong-un at the start of what is a first visit by a korea ineader to north 14 years. the sides are expected to coordinate their approach is to the current standoff with united thees -- approaches to current standoff with the united states. policymakers increasingly concerned about the slowing economy in india. the governor said growth has clearly weekend and headline inflation is expected to remain below the target of 4%. the governor will present a budget on july 5 and sources say it may include a rise in the income tax threshold in a bid to kickstart consumption. the race to become the next u.k. prime minister is down to a field of two. the face of brexit, former foreign secretary boris johnson, extended his lead among consecutive lawmakers, while the
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last remaining rival, jeremy hunt, has the backing of 77 mp 's. they wehner will be announced in late july. 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. ed.: thanks, more now on that record intraday high for the s&p 500 in the first all-time closing high since april. the rise has been spurred by more speculation of a rate cut. su keenan has more. is this a belated reaction the? su: it does seem a day late because we started right off the bat with that surge in stocks and let's go right into the markets: because major a return in june with this huge move higher. readinga third strong
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and we managed to squeeze out a new record close at the end. notice the snapshot shows real estate was strong. that is an interest rate related play. futures slightly weaker. if we go into the major stories of the day, we have to mention slack, technology, the ipo that opened up strong. it closed with an almost $20 billion valuation. analysts warning on demand and profit as the quarter news an end -- nears an end. kathleen: lots of action everywhere. oil, gold, commodities. what's going on? not exactly may be same forces driving those. a couple of catalysts. citigroup saying gold fever has struck. up. poised for a big move
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it has already had a big move and as we noticed, gold rallying to the highest since 2013. the chart has flipped the precious metal back on investors' radar. toward 1400, and again, speculators jumping in, boosting the calm x futures contracts by 16% this month just in terms of volume. take a look at oil. a different story there, and that again has to do with the middle eastern class. there's concerns that it may heat up. trump's tweets about retaliation did not help sentiment but it did boost the price of oil a little bit, and many believe that will carry the day for at least a while going forward. paul: are there any on wall street that believe the fed's move gives dollar bears a green light? two take analysts are making noise about that. let's go to the bloomberg quickly one more time because dollar strength has been
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significant going into this as yields have stabilized. hedge widely followed fund manager believes the slump under the 200-day moving average signals a moment of truth. the continental exchange could come down 5% to 10%, so seatbelts are buckled. a wild ride. what that is what makes it interesting. thank you for covering the market action for us today at the close. for a close look at the markets, the global economy, and the risk factors affected, we turn to wall street veteran and decorated economist at hyman, long recognized by institutional investors joining us right here on daybreak australia. welcome. >> thank you very much. nice to be here. kathleen: perfect time to have you on the show. we have had a chance to look at the fed move a little more and
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it seems something sunk in. it feels like a new message. do you see a new message from the fed, and if so, what is it? this ifed does not do everything is great. we can cover that later, but there are very disturbing things going on. i would add this is a global affair. the message i would have or us this evening is don't fight the fed. we just heard the bank of india is at it. of russia isbank at it. i would say we are in the third inning of a global easing cycle and right now, it is more talk, so the fed has not cut rates. my guess is they end up cutting rates three times this year. simplen: you have a very equation, a metric, and i think from ourll up a chart
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endless source which shows the fed funds rate relative to the 10-year note, and i think this is one of the things -- when you talk about the number of rate cuts you see and one reason why you see this is so compelling now, you can see it right there on the screen. tell us why you see this. what is the story it is telling? >> we do not know what rates should be. the policy rate in australia today is 1.20 five and their economy is not much different than ours. market. market is a fedmarket is saying the funds rate is too high, and i think that is one way to understand why the fed is now pushing, and i would feel more comfortable if fed funds were below the bond yield. the last three cycles, we have had an inverted yield curve, which this is, with bond yields below fed funds. we have had an inverted yield
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curve for about a year and that we always had a recession. right now, it has been a month. i'm counting, and i hope as the months unfold, we will end up with yields a little higher on the bonds and that funds -- fed funds a lot lower, so we will end up with a positive yield curve again. paul: things do not seem to suggest that right now. we have another chart that shows investment-grade debt around the negative.how yielding i'm struggling to make sense of this. yield,are looking for even gold will pay you more than this right now. >> as i mentioned at the beginning, and i'm glad i did, there are some very troubling things out there, like this. why are bond yields in the u.s. 2% or -30 basis points in germany? we can get into what the troubling things are, but i think that the fed is reacting
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, if it'sage of worries trade wars on one side or the point that you make on the other, the yield curve -- or the yield curve inverted that i just made. naturalcessions are a part of the economic cycle. is there perhaps and exceptions now that one is coming and if so, when that might be? >> you are sitting in an economy that has not had one for 28 years, but i'm not there. when we are approaching a recession, we will see clearer signs than we are seeing now. you'll see an inverted yield curve, we have now, but i don't think it will stay that way. you see a fed that is tightening, not easing, and you youinflation moving up, and also will see a bubble. in australia, you had a housing
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bubble, and you have been able dodiffuse that some, but i not think in the context that i'm outlining that we have a bubble like the tech bubble or the housing bubble or in japan in the 1980's when they had a huge bubble in everything. kathleen: stockmarket rally in, animal spirits, waiting for fed if there is something bad out there and potentially a recession coming and not just in the u.s., doesn't this also spell some trouble for equities as well? >> it does, so you hit this isht on the head -- if there a recession coming. i don't think that we have a recession coming. like, 2015, 2016, 2011, you had the eurozone crisis, but they were not recessions. the central bank eased around
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the world. i think the message from the markets is that there are problems out there that the central banks, not just the fed, are now responding to, and as a goldt, risk markets like and the stock market are going up. kathleen: you think the fed is going to cut 75 basis points this year. that is your forecast. we have the 10-year note right now at just around 2%. wasw of the last cycle 1.34%. is this it for the bond rally? is this going to continue? will yields go even lower? >> i would guess we go lower, but i have proven to you and me i cannot forecast where bond yields are going. they are so much lower than i ever dreamed they would be. if you had told me say a decade ago the facts we have now, i would have missed it, but every day, we can start over. inflation is coming
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-- like crazy, paul: all right, eight hyman -- ed hyman is with us for the hour, so stay with us. we will be rejoining him shortly. still to come, we will get his take on the global economy including how the trade war is economic china's picture. kathleen: later, saying no to the ipo. slack takes a different road to the stock market, but is it the right approach? firm valueresearch champion has crunched the numbers. we will share his thoughts. this is bloomberg. ♪
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kathleen: i'm kathleen hays in new york. paul: i'm paul allen in sydney. you are watching "daybreak australia." this week showed in full relief the dovish tide sweeping markets . an is with us for the hour. i want to return to a point you made a little while ago about australia having not had a recession for 28 years and i was sort of posing the question that are they not inevitable and it's funny you made that point because australia's last recession at the time was prefaced by the treasurer, whose remarks have gone down in the recession australia had to have. are they in some ways inevitable, and is it too much to expect central banks to head them off on their own? >> i hear your question and
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implication. i agree completely. i think recessions are .nevitable my view, as i mentioned, is that recessions are preceded by a sequence of events. one, and inverted yield curve, which now i'm on watch, but second is much higher inflation and an aggressive central bank and also some sort of bubble in the system. we can talk about some bubbles like in sovereign debt, but i don't see a bubble like we had in the previous ones that preceded a recession. i think that the next recession is, frankly, years out and i think that will become more of a consensus view, particularly when we get past this quarter and into the next quarter, which will be the 11th year for the u.s. and also the 2019 are for
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australia. i'm not trying to match australia, frankly. paul: might take a while. how did the oil price fit into all of this? fitting you see that into the picture? >> i think inflation is really low. one of the reasons is that technology is always putting extra supply on. in the case of oil, it's tracking -- fracking. because we have cheap money, people can add also its of supplies. when i look at oil, i think about one thing, which is china, and when oil was going down a week ago or two weeks ago, as you see there on your chart, i thought china was weakening, which i think it is weakening, and this move up in oil makes me
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think maybe we have seen a low point and they have been stimulating. we have to wait because the drone attack in the middle east definitely was the lion share -- the lion's share of what has happened, but i lean toward oil and commodities going up because there is so much stimulus in the system and because my hunch is that over the next year, it will tend to reverse this global recession we mini- are in now. kathleen: inflation, u.s. federal reserve had to cut down their inflation forecast for this year on their key number. there are acknowledging there is no way they will get to the 2% target this year. it is a global phenomenon. the ecb cannot get to its target. the bank of japan is about halfway there. we are even seeing in emerging markets numbers coming down. i have a chart here not for the
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world, u.s. 10-year breakevens and you can see how they have come down pretty sharply as well . when you look at what that means for global economies, when you look at business profits and that kind of thing, how important is it, i guess i should say, for central banks to boost inflation again, and can they? >> am not so sure it is important for them to do it, but i'm sure they want to. i'm not trying to pass judgment. i'm just saying that is what they are trying to do. as you put it so well, it is everywhere. in thailand, it's .4. it has come down to a lot of the emerging economies. we heard just now in india, it is below four, which is their target, so there are some very strong structural forces at work ,hat have pushed inflation down and, frankly, i don't fully understand why it is so strong, but they are also putting downward pressure on wages. you are not getting hurt as much
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as you might think on profit margins because labor costs are not going up as much as you might think, so the prices are ok. profit margins are under pressure, but it is not an extreme picture at the moment. kathleen: answer me this because there is so much criticism of this idea. mario draghi a couple of weeks ago, do whatever it takes. he was wanting to cut rates -- excuse me, raise rates. now he is ready to cut the negative rate are there and buy more bonds. i spoke to the governor at the bank of japan and he said they have to pull out again, and most people say you guys are kidding yourself, it's not going to work . what do you think? >> i think they are kidding themselves. in the meantime, i have to work in the market and they are going to keep pushing and keep pushing and you see gold go up, which i think is a reflection of their pushing, and you see stock markets going up, so i think
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that they will keep pushing and asset prices will keep going up. or real estates prices. mortgage rates just dropped 60 basis points in the last year. kathleen: you are bullish on stocks. do you think this rally continues? >> i would say i'm constructive. kathleen: we can think of it that way. you are on with us for the entire hour on "daybreak australia." and don't miss our exclusive interview with the fed vice-chairman. you have to see it after what the fed said this week. this is bloomberg. ♪
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shares closed 50% higher than the price said before the direct listing, giving slack and evaluation about $21 billion, three times its last private funding round. the venture capital arm of bloomberg lp is an investor in slack. about profitbts and demand. a goldman sachs analyst said volume estimates for the rest of the year of your to be on the high side and that tesla has little to stoke interest. he as the second quarter may have improved but "to a level that is likely not sustainable." elon musk has said sales could hit a record this quarter. kathleen: apple is recalling some macbook pro laptops because of concerns about overheating batteries catching fire. apple recommends you stop using the machines and says it will replace the batteries for free. last month, the company confirmed some of its new laptops have keyboard problems.
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so why didn't we do this earlier? life line screening. the power of prevention. call now to learn more. paul: it is 8:30 a.m. friday morning here in sydney. future is looking -- futures looking kind of flat right now, which is interesting considering u.s.igher close of equities -- well, in the u.s., of course. kathleen: in new york, it is 6:30 p.m. and you are watching "daybreak australia." australian futures point lower for friday trading in sydney. sophie: i want to point to what is happening in the bond space, given that we have had more rate cut that's. -- exley,ook at wirp
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focusing on stocks which are in focus today, we are keeping an eye on caltech. goldman upgrading the stock just after the slump yesterday in the wake of some news from the someny and we do have ratings on macquarrie, mcquarrie in focus, given the focus on the financial industry. with the rba'ss recent shift to easing. kathleen: it is a global story watching those bond yields. let's get on to first word news with ed ludlow. ed: president trump is
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downplaying iran's attack on a naval drone in the gulf saying a single person alone may have been responsible. saying theg -- iran shooting is intended to send a clear message to washington. the president says he finds it hard to believe the attack was intentional. >> i find it hard to believe it was intentional, if you want to know the truth. i think it could have been somebody who was loose and stupid. we will be able to report back and you will understand exactly what happened, but it was a very foolish move, that i can tell you. airline isan offering to fly central american migrants back home for just one dollar. it will takesays people to costa rica, el salvador, or guatemala providing they can show some form of id and be willing to take the next flight. the program is called reuniting
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families and runs until the end of the month. renault has welcome nissan's decision to grant a seat on the after the chairman threatened to abstain from voting on a government plan next week. nissan will give her know a place on the panel and read no's ceo -- renault's ceo on its .oard global news on the air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i'm ed ludlow. this is bloomberg. paul: let's get more on what we should be watching us trading gets under way -- as trading gets under way. we have this relentless move lower in bond yields around the world.
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>> we got there on treasuries, didn't we, overnight, and we kind of dipped below 2%, but as you say, it has not been a u.s.-focused story. we have had a very pronounced signal this week, but it has been the breadth of that easing we havetight message been getting, and if you hit g tv on your terminal, you can get that chart up, which and bunds asies well. jgb yields did hit fresh lows with the bank of japan comments yesterday, and the topic of discussion now on wall street is ofoes the japanification yields like we've seen, translate to yields potentially over the next 12, 24 months to see the u.s. and that kind of situation, and we were not even have been talking about that
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three or six month ago, so interesting to see how far the debate -- we are reading a lot of strategist reports with fixed income types are starting to talk about where that bound is, so very big moves for bonds this week and it looks like friday we might have a little bit more to go in that space. by then: oil jumping most this year. is it going to continue? where do you see it going in the second half? >> no doubt a big move, not the kind of move we expect to see in oil in one day and you track it right back to the start of the year. it is really the debate around where the attack took place in a sense and the quick response from the u.s. administration i think damped some of the concern around that it would escalate even further, but you already have on the demand side as a continuation of the slowing global growth outlook, which is
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kind of continuing to be the theme. of course, on the supply side, the fact that some inventory data has been a bit mixed recently is keeping certainly a lid on things at the moment, but a move of that magnitude, would not expect that to continue for too much longer. paul: thanks for joining us. you can check out the gtb library forhe g tv more on those charts and check out plenty of others as well. kathleen: the u.s. and china will try to reheat stalled trade talks. they will discuss the high-stakes meeting between presidents trump and xi at the g-20. we will bring back the chairman of evercore isi, who is spending the entire hour with us here on "daybreak australia." europe was already slowing down before the trade war really got heated up. ,rade war seems like a weight
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certainly on manufacturing. what is it doing to the global economy? a little so far that could get worse or is it already having an impact? >> i think it is having a pretty big impact, a psychological impact for everybody in addition to the actual supply chain impact it is having. ise you point out, europe already slow, and it's not clear what they can do because they don't have the chance to do a fiscal stimulus initiative because they don't have overall policy. that puts a lot of pressure on the central bank to do something. in china, it's not perfectly clear, but they are slowing and so is europe. with that sort of tendency, you have the trade war on top of it and adding up to a fair bit of downward momentum. kathleen: a lot of people think the stimulus that china has done over the last few months has at least stabilized the economy and they optimistically think we
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will see growth and equities will do better. have they done enough? can they do more? >> i am worried about china. companies every week, big multinationals that do business in china. same companies, same questions, and that survey has come down and is well below 50 now, which is sort of the neutral level. it has been as high as 70. right now, it is about 47 and it has been hovering around that level for a while. by which i mean a month. i do not think china has improved any. it may have stopped deteriorating. we do the same thing for 28 multinationals that do business in europe and that has dropped, like, two points to 45 in the past two weeks. economy is weakening, which business apprise to global central bankers, so they are trying to react against that. the themes we hit
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on quite often hear when we talk about the trade war is the need for some of these companies that are interlinked with china to reorganize their supply chains, which is obviously a monumentally complex undertaking . once those are reorganize, the longer this drags on, what is the risk of that reorganized supply chain becoming permanent and what is the danger for china? it is done, it is pretty much 100% that they'll stay that way because they don't want to get back into the position where they are concentrated in one country -- china in this case. i would that -- i would think that both china and the u.s. are under enormous pressure for different reasons, but enormous pressure to get together. i don't have any hope to know when, but i don't think this is amultiyear -- i think this is multi-month issue that probably gets resolved by the end of this year, but there's a lot at
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stake. cook talked tosk the white house today saying that they were having trouble with the domestic business and it hurt the u.s. economy as a result. both sides of this issue are under pressure. paul: we do have, of course, this weekend extended meeting. what are your expectations in terms of a best case and worst-case scenario? >> i don't know. i would say this is totally unpredictable. it could go from they have a deal to trump walks out. that i could make a living trying to speculate on. on the fed, it seems as though they were getting to the point with a would do something and now they are in motion, so i think that is going to keep going, but this trade thing i think will get resolved, but i do not know if it is at this meeting or two months from now.
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i have the feeling that on trump, there is a clock that he probably needs to get something done by september or october for the 2020 election. fixedthat is one big point in the future we are all keeping an eye on. still to come, picking up the slack, we will look back at what for the a dramatic day workplace messaging app. this is bloomberg. ♪
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paul: another unicorn has hit the public markets. workplace messaging company slack soared on its trading debut in new york after forgoing a traditional ipo, opting for a direct listing instead. the company shares opened almost 50% above its reference price and closed the day with a market cap just below $20 billion, so
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that is more than double its last valuation on the private markets. joining us now to date into this a little more is value champion ceo dj kang. slack, of course, forgoing the .raditional ipo did that turn out to be the right call? >> at least for now it seems slackt, but i still ink is a very, very, very expensive stock. paul: ok, where do you see the price heading from here then? >> if you look at all the other enterprise software companies listed in the u.s. -- workday, crm, sales force, even tableau which just got acquired -- there valuation metrics usually range around mid to low teens, and if you look at slack, it is about
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20 times bigger, a little higher. it is being valued like zoom, ,hich had this tremendous ipo but that is also being valued around 25 times sales next year. these are being valued like they have infinite room to grow, no competitors, and even between the two companies, i think zoom probably deserves the valuation a lot more than slack. paul: you do not have a tremendously optimistic outlook for growth prospects then. how do you see those prospects? microsoftfore , it's a its team communication app, which meant its most frequent touch point was users. it has the potential to become the operating system, so to
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speak, for enterprise software. kathleen: the ceo says they want to become the go to for everybody app and they have a lot of users that want to make it much bigger. are they get at least a sentiment boost, and marketing boost? >> it could, but the problem for me is that they had so much confident in -- if they had so much confidence in the business and a lot of room to grow, why did they not ipo and actually raise capital and use that capital to grow the business? by all accounts, they have been killing it -- kathleen: didn't they already say they raised money and don't need it and they wanted to get this directly to employees?
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you don't buy that? >> i think at any given point if you can raise more money to compete against a giant like microsoft, i think every penny can help. paul: what, given your gloomy outlook, do you think the chances are that slack will be an acquisition target? >> yes. i think it is a very strategic asset, especially for players like salesforce, maybe even for google has -- google, who has been trying to grow its enterprise presence, but at this price? salesforce just paid low teens which, arguably, is slowing down its growth quite a bit, but if you look at slack and its lease revenue disclosure announcement, it is growing mid to low single digits, quarter on .uarter
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for anyit would be hard acquirer to be confident and happy to pay five times revenue to take this private and does this r.o.i. really make sense? and athanks very much reminder, of course, we should mention that bloomberg beta, the venture capital arm of bloomberg lp, is an investor in slack. let's look ahead to monday. you can catch our exclusive interview with a malaysian .nvestor don't miss that. ♪
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delta airlines is extending his push overseas by taking an state partner to chase growth outside the u.s. market. about 40% of its largest shareholder and expects to eventually raise that to 10%. the deal comes about a year after the two carriers began a venture that allows them to coordinate flights to 80 destinations in asia and 290 in the u.s. kathleen: the chinese love of swiss watches is fueling gains. better than expected demand or high-end products drove the gains were there was a drop in to cheaper models. paul: hong kong's copa holdings with take a right down on its .ustralian assets the write-down comes in the form of a goodwill impairment on the retail business of its energy is
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trillion unit. it says it expects a first-half loss as a result oil lower retail terrorist may cut sales. tariffs may cut sales. kathleen: let's get back to ed hyman. on the not focused in u.s. economy. you have unemployment at 3.6%. we had a soggy jobs month, but on average still growing. u.s. manufacturing dipped a bit, but services growing strong. that is the bull case for the economy. what is yours? >> what you just outlined. europe.t it is weak. i look at china. it is weak. when i combine the three with the u.s., it is getting weaker. the u.s. is growing about 2.5%, and it has been growing that for roughly a decade. retail sales, you mentioned, six he percent from
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the low in 2009, and the bloomberg consumer index came out today. it went up. i'd is almost a record high for this expansion and employment is strong. i travel constantly and every place i go to is doing well. maybe i don't go to places that are not doing well, but i have 93 cities that i have studied that are doing well. i took houston off the list last year when oil came down and it had a hurricane, and i just put it back on. i think the u.s. economy is the best i have ever seen it in terms of breadth. kathleen: we want to spend more time with you now. cannot just drop that there. is it manufacturing versus services, multinational corporations versus small and medium-size businesses, big cities versus rural areas? ? at is it >> is basically bifurcated between manufacturing and
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nonmanufacturing. what is driving the local economy's health care and higher education, new tech and detainment. i could spend a fair amount of time on each of those. entertainment, for example, is -- vast people going from people going skiing to netflix. health care is bigger than it has ever been before. economy is u.s. doing fine, but it's part of a global economy and inflation is really low. i think the inflation rate you , 1.5 is the fed number, but i think it will be 1.3. paul: the inflation question is an interesting one. all of our guests yesterday -- says he thinks the dual mandate the fed has is a bit outdated. to change that
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inflation target or get rid of it altogether? >> well, we are not going to do that this evening. i do think the fed would be well served if they would give us some explication about what the weight is on growth versus inflation. the impression i get is that it is growth maybe 80% and i don'tn maybe 20%, but think they are going to change the mandate. if anything, they are going to have this average inflation targeting where they let inflation run over 2% for a while if it ever gets there, but inflation is really for this cycle out for the count . paul: i want to get your thoughts as well where the u.s. dollar is headed. is the only direction down from here? >> we were going to talk about gold earlier. i'm definitely at the peak of my career. i have learned that forecasting -- dollar
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kathleen: what is the biggest risk right now? the fed is focused on highly leveraged corporate debt. you say you do not see any bubbles necessarily right now. hawkish from very the kansas city fed. she worried about creating financial excess. where do you see risk? >> the main risk is in this trade war or trade issue that is there. it would be a major positive if we could get past that. i worry about the yield curve being inverted. as you and i have talked about, i think that the political present a real problem for markets if they start to really focus on say, taxexample, a 60% income rate for individuals. you can really get into a concern about what is going to happen in 2020.
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kathleen: i think you just laid the groundwork for your next hour here on "daybreak australia." we thank you so much for joining us today. paul: just want to get you across the of breaking news on the bloomberg terminal right now, this report from "the wall street journal," unitedhealth group agreeing to buy health payments group equian. we will get you more details on the story as we receive it. that news breaking up the moment. there is plenty were to come in the next hour on "daybreak asia." japanese inflation numbers due in the next half hour. we will get reaction and thoughts on how those numbers might affect the bank of japan's thinking. we will bring you that story as well as a check of the markets of the day'sther
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paul: good morning. i am paul allen in sydney. we are under an hour away from the australian market open. >> m good evening. i am kathleen hays. sophie: i am sophie kamaruddin in hong kong. welcome to "daybreak asia." paul: our top stories this friday, asian stocks look set for a muted start despite wall street hitting a new high. gold surges while the dollar falls the most since january. oil rose the most this year.
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