paul: welcome to daybreak australia. i'm paul allen. shery: i'm shery ahn in new york. we are counting down to asia's major market open. ♪ paul: here are the top stories we are covering. entry, 1950's jazz and an -- angry tweet. trade talks begin in shanghai, coming down to the fed rate decision. the president says a small cut will not be enough. april takes off on a forecast

that will top expectations. tim cook says he is thrilled to the return to growth. shery: later in bloomberg technology global link, we will break down apple's earnings with bloomberg intelligence. first, a quick check of how the markets closed tuesday's session. another day of losses for u.s. stocks. a mixed bag of corporate earnings. procter & gamble rising on earnings. this coming at a time as the fed starts its meeting. president trump did not help market sentiment when he lashed out at china saying it was ripping off the u.s. late market trading, we did see the sentiment recovery as president trump said he recently spoke to chinese president xi jinping. the s&p 500 fell three chance of 1%. the nasdaq down a quarter of a percent. interesting to see small caps outperformed large-cap sweet the dollar held near a two month high. u.s. futures gaining 1/10 of 1%.

let's see how we are setting up for the asian open. paul: new zealand has been trading for a couple of minutes now. not a lot of action across the terminal at the moment. the index looking kind of flat. futures out of australia also looking at little weak. the ask hit a record high on tuesday. we do have second quarter cpi numbers out of australia later on. a data heavy day. nikkei futures higher by 1/5 of 1%. keep an eye on -- it slide tuesday afternoon on news of bad loans. mitsubishi, ufj reporting todayk, futures a little weaker as well. samsung is a big one we are watching out for. we will also have korea and doctoral production numbers -- industrial production numbers for the month of june in one hour. a busy day on asian markets. let's check in on the first word news with ritika gupta. ritika: more attention on the

streets of hong kong on tuesday night. hundreds of protesters gathered around the main police station after local media said 44 people were being charged with writing after clashes on sunday. the chief executive plated a bleak picture of hong kong's economy, saying there is no room for optimism for the second quarter and for the entire year. sterling continues its miserable run, falling a fourth day on growing concern the u.k. is about to crash out of the european union at the end of october. prime minister boris johnson suggested their baby n - there may be no new talks with brussels. johnson reiterated he does not want a no deal brexit, but with the current accord is not acceptable. >> it is up to the eu, this is their call. if we have to -- if we are determined to do it, they won't take us seriously in the course

of the negotiations. avoidingp says it is sending ships through the strait of hormez, fears they could be seized by iran. bp tinker had to abandon plans to load iraqi crude and took shelter off the coast of saudi arabia because it could be a target. the british warship had to intervene to make sure the tanker's safe departure from the persian gulf. >> we are being extremely careful. we have had some ships move in and out. we have had some concerning issuance -- incidents. we are not sending british ships and crews into the persian gulf. ritika: saudi oil exports to the japan slump for the lowest in 17 years, as china took record volumes from the kingdom. japan received about 25 million barrels in june. it is filling the void by turning to the uae which becomes japan's biggest supplier for the first time in four years.

shipments from iran fell to zero after u.s. wagers expired in may. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts. this is bloomberg. shery: to our top story. president trump is lashing out at china once again as trade talks resume in shanghai. bashing beijing for what he says is an unwillingness to buy american farm products, tweeting that china continues to rip off the u.s. and is morning china will get a worse deal if reelected next year. we bring in our u.s. economic team leader sarah mcgregor and tom mackenzie. let's start with you, sarah. these tweets coming at a time where chinese officials are getting ready to wine and dine their u.s. counterparts. sarah: yes, it would seem like an inopportune moment for trump

to be tweeting, chastising china for what he says is ripping the u.s. offer all of these years. i think it sets a tone as negative as they try to go into talks and build goodwill. at the same time, trump is telling us china has not come through on this pledge that president xi told him that they would buy more farming goods. those purchases were contingent on the u.s. giving special licenses to chinese companies to sell to huawei. that has not flown through yet. there is a lot of balls in the air right now. paul: angry tweets, broken promises. is it safe to say expectations are not terribly high? what does a good outcome look like at the end of this week? sarah: next dictation so probably about zero there will be a -- expectations are probably about zero there will be a deal. the two sides really allowed the negotiations to continue and not necessarily break down again and

see how long they can continue. as far offal is as ever. you estimating that china -- the u.s. demanding that the china remove state subsidies and address ip theft with codified laws. these are really heart issues for them to tackle and it seems like today's meeting will be another drop in the bucket. shery: tom, in the meantime, there is one company caught in the middle of this, huawei. you were able to talk to their chairman. what did he say? here -- we are here at the headquarters in shenzhen of huawei. we talked to them about their first half earnings. that is why they invited us to speak to their chairman. the earnings are pretty solid given the pressure they are under. the ban in the u.s., the blacklist, and the pressure campaign from the u.s. to get other countries to ban huawei.

revenue growth in the first half, $58 billion. you lift the hood up and have a little luck, you see the things that are being difficult for the company, particularly after the blacklist. the first quarter, revenues around 39% growth. the 14% after the blacklist is put in place. some top lines from the interview worry confirmation from the chairman that the key supplies are not flowing to huawei despite trump saying they would be able to sell. that is not happening, particular around the k ey supplies. the smartphone division will face pressure if they are not able to use android system. take a listen to what the chairman had to say about being put on the list, what it means for huawei and u.s. companies. liang: i think the damage to the u.s. suppliers is even bigger than it is to huawei. we will have to increase our workload and manage continuity

internally. the damage to the u.s. supplier is direct as they lose the customer. the u.s. removes huawei from the entity list, that would be a solution. 118 millionipped smartphones in the first half of the year. that compared to about 200 million for 2018. the trajectory could look more difficult towards the second half of the year if they don't have access to google. , they have fiv5g signed 50 contracts. they don't have access to intel processor chips. paul: tom, i just want to talk about the situation a little bit further south from where you are, down on the border between china and hong kong. the u.s. is keeping an eye on chinese forces gathered near the border. is this sounding a bit ominous? it certainly does not sound good. this is a u.s. administration

official telling our colleagues that they are monitoring and buildup of either paramilitary police or military along the border with hong kong. they don't have any specific details or did not give them to our reporter in terms of numbers or units. china has not ruled out, beijing has not ruled out using the pla in hong kong and deploying the pla, but they have yet to say that will happen. we have had commentary from chinese officials accusing the u.s. of the the black hand behind those protests, saying you play with fire, you risk being burned. again, blaming the protests on the u.s. to some degree. you have seen protesters hold up u.s. flags. that is not mean the u.s. is behind the protest. 2 million people taking to the streets in hong kong. the u.s. will say we are not behind what is happening. the monitoring on the border will be in focus. the timing is complicated trade talksee

taking place in shanghai between the u.s. and china. this issue is becoming more contentious between the u.s. and china, the question of what happens in hong kong. paul: all right, u.s. economics team leader sarah mcgregor, and our china correspondent tom mackenzie. thanks to you both. still to come, apple jumped in extended trait after projecting better than expect to revenue in the court incurred of -- in the current quarter. shery: next, susan schmidt gives us her outlook on equities ahead of the fed decision. she sees more records on the way for u.s.. this is bloomberg. ♪

shery: u.s. stocks fell in the regular session on the mixed bag of corporate reports. after the bell, the avalanche of earnings continued with apple beating expectations. su keenan us now.

this is the second busiest day of this earnings season on the s&p 500 so so much to get through. start with the regular session. su: when you have trump lashing out at china, that puts the air out of the bag in terms of expectations. let's take a look at the market snapshot. what you will notice is the energy section of the s&p was one of the stronger sectors and had to do with oil rebounding. let's take a look at some of the earnings. winners and losers in the regular session. beyond meet carrying over from its disappointing earnings last night, down from 12%. under armour warning about weak sales ahead. chesapeake writing the energy wave -- riding the energy wave. pronto and gamble out with strong earnings. what we also have his big action after hours. let's take a look at the big moves we've got. three hits and a miss.

apple out with positive news. falling even though they come in line. very disappointed forecast. apple revenue for the fourth quarter. 2.4 percent. that was above the average estimate. it was expected profit would be trimmed as iphone sales slumped. a lot of the services analysts were looking at making up for some of that decline. first quarter gross margins, 38.5%. again, a lot of the numbers gave investors a lot to look at. we will get more into that later in the show. let's take a look at the other moves. amgen next. this again really came in with a very strong -- the maker of the arthritis drug -- sales drop in the second quarter but actually giving a strong forecast. yum china seeing sales accelerate. they have an expansion plan,

sales much stronger than expect it. amd, this has been one of the chip stories that has been a momentum stock. they disappointed in a big way by coming online and talking about gaming chip command down and that is putting pressure. shery: thank you so much for that. from earnings to economic data to trade talks, investors are weighing optimism against pessimism. susan schmidt is developing a strategy for both sides of that coin and she joins us here in new york. great to have you with us. so much to consider in today's session but let's get started with the fed and expert tatian's of a rate cut because as we see on that -- expectations of a rate cut because as we see on the chart, we see the s&p 500 moving in opposite direction. bottom panel, the correlation between the two. a goldilocks scenario when the markets don't see that bad economic data is leading to a recession, but at the same time a fed insurance cut could be great for the market but how

long will this last? susan: the percent is definitely baked in. i think the 50 basis points coming down would be a big surprise to the market and that would be an upward lift tomorrow. shery: the economy -- susan: everyone is going to worry. the market thinks that if we get a little bit of support, it is all good. too much support, people will get nervous that the fed is seeing something negative the market does not perceive yet. it is a goldilocks scenario. i think we do have a quarter of a percent baked in. company earnings have been better than expected. what we have seen since may in the revised upward movement in the movement, it is all because of multiple expansion, not because earnings have gotten better. it is on the commentary of what ceos are saying in the back half. it is going company by company on how things are going for the rest of the year and the underlying fundamentals. you now break it down to which businesses are still able to make money in a challenging environment.

shery: given that stocks are getting so much more expensive compared to other parts of the world, how much will the trade talks play into sentiment as well? susan: i think the trade talks have a huge impact but we have gotten tired of them. they have been going on for a long time to you see the back-and-forth we have. reckon so the tory statements and then -- reckon cilia tour a statements and then attacking statements i think the market is starting to drown that out. right now, we are focused on the fed and the interest rate cut. there is no tangible facts. they are using the data from earnings reports to figure out what companies are valued at. using the multiple extension as a means to show they are supporting the central banks and interest rate cuts we are getting to support the overall extension on this recovery. paul: so, if the market is getting used to no progress on the trade front, so what is the biggest external risk right now in your view? potentially a policy missed that from the fed?

susan: i don't think the fed will be the one that stumbles. the fed has been clear about communicating and they are here to support. i think insurance they are talking about an interest rate cuts going forward is going to continue to sue the market and soothe anxieties. trade is an issue but it becomes noise. the biggest problem is we have a big date -- debate coming up between democratic candidates and this elect tour process, i expect a lot of soundbites to come out that could impact the markets. we could see it with regard to trade, health care. with national health. we have seen some of those issues already. those are just the first. there will be more. we have a lot of cycle in this electoral process ahead of us. paul: a moment ago, you are saying you are not too convinced by what we are seeing in the earnings season so far. is there a time to take a few profits here? do you see limited upside for the s&p? susan: i think we can see an upside surprise because earnings

were better than people expected. we were so negative coming into the second quarter. i think for the most part, we have seen companies hold up well. ceos have shown potential to maneuver through any concerns and uncertainties around trade. we are seeing some good things. i do think we are going to start to see some differentiations between companies and their stock prices and the market. i think there is opportunity for individual stocks within the market to do better going forward. i think the s&p is at high levels. because of multiple expansions. now you have to look for earnings growth to find the true winners from year-to-year. shery: susan schmidt, thank you so much for that. we have an alert on the bloomberg at the moment. we are getting some reports that the u.s. is poised to reissue iran nuclear sanction waivers. this would go against what the trump administration has been doing so far. according to reports from the

washington post and politico, after an internal policy battle, the initiation is set to iveounce edible waive f different nuclear related sanctions on iran. this is not expected to make the iran hawks in washington too happy. 20 more to come. this -- plenty more to come. this is bloomberg. ♪

shery: this is bloomberg technology global link. i'm shery ahn in new york alongside paul allen in sydney and emily chang in san francisco. let's take a look at the top global tech stories of the day. emily: sony is cutting its full-year revenue outlook, saying sales of the playstation 4, televisions and smartphones are declining faster than originally thought. of $79 sales target billion, almost $2 billion less than forecast.

the profit outlook is unchanged amid higher investment in games and chips. we'll be watching reaction in tokyo later to nintendo's dismal quarterly results. profits missed the lowest estimate. then tendo is still positive that it can meet its full-year forecast. it blames the quarterly results on more than $100 million. google is ramping up its effort in the cloud in a bid to catch up with amazon and microsoft. it unveiled a partnership with a software maker. it will help customers who want to move the work from corporate servers to google's clouded. those are the top global tech stories we are watching. paul: thanks. asle surged after the bell the revenue forecast for the court quarter beat estimates. john has been going over the numbers and listening to the call.

what are the key takeaways? what has tim cook been saying? john: number one on my list is china where apple booked a much better than expected quarter. sales were down 4%, but this compares with high double-digit declines in the last two quarters. in my view, we are seeing improvement in a key region that accounts for about 20% of sales. i would say this -- iphone sales were little bit weak, but if you look at all other products, not iphone sales including services, they were up much higher than people expected. up 17% year on year, according to the company. they are doing well across the board which to me tells me they are getting a very good grade on diversifying the business. the iphone, which in some quarters not too long ago, represented 65, even close to 70% of revenue is now about half

the business. they continue to diversify and really push those key growth drivers, including services and some of the newer products like the apple watch and ipod -- air pod, part of me. what appleiphone is still needs to be getting into consumers hand in order to grow the services business because the services have to run something. how confident are you they can continue to serve the -- grow the services business even though iphone sales do not blow it out of the water? john: i think iphone sales are now cyclical. highly cyclical. we had mid-teens growth in the iphone throughout last year on the strength of the iphone x introduction. this year has been a down year in iphone sales because of tough comps. i think next year, we get stronger growth in the iphone and the introduction of a 5g version of the iphone, which

should help. honestly, services and expanding services is about getting new services out there, including content. i think apple is doing a good job there. they probably could do a little bit better if they wanted to put some of their hundred 13 -- $113 billion in cash to work. i think they are making all the right moves in expanding into the content business and pushing the new services like apple pay. emily: tough talk from the president about china and the tariffs which could impact the iphone. how concerned should investors be? john: i think it is a little bit of tough talk before they come to the table. apple has done a good job of surviving so far and i think china in particular has a lot to lose if they get tough with apple. the worries are on the u.s.

side. shery: john butler, thank you so much for that. that is bloomberg technology global link. don't miss bloomberg technology at 7 a.m. in sydney, 5:00 a.m. in hong kong and 5:00 p.m. in new york. this is bloomberg. ♪

paul: 8:30 a.m. wednesday morning in sydney. we saw a record highs on the asx on tuesday. futures pointing a little lower by 4/10 of 1% today. later on, second quarter cpi numbers for australia as well. i'm paul allen. shery: i'm shery ahn in new york where it is 6:30 p.m. let's get the first word news. ritika: thanks. u.s.-china trade talks back underway after a two-month hiatus. officials dining in shanghai ahead of formal discussions. they met as president trump again last out at china saying they don't live up to their word he posted an angry tweet saying

there has been a promise to buy more u.s. farm products but no apparent progress. he ended by writing they just don't come through. the u.s. is urging japan and south korea to resolve its trait differences amid fears the staff could spiral out of control. the white house is calling for an agreement to give tokyo time to negotiate a wider deal. the comments has weeks of comparable silence from washington where japan and korea look to bring the u.s. capital one financial slumped in u.s. trade after revealing personal data on its service from about 100 million people in the u.s. were illegally accessed. prosecutors accused of seattle woman of breaking into the bank's cloud system. she was identified by amazon by one of its former cloud service employees. 6 million people in canada were also hit by the breach. global news 24 hours a day on

air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: thank you. wednesday is fed decision day, with a quarter-point cut seemingly baked in. let's bring in kathleen hays. everyone sees a cut that while the fed signal more to come? kathleen: this now becomes the question. because jay powell has said it over and over and over, the fed chair, his mantra -- we want to sustain the economic expansion. the question is how much will be needed to do that? right now, a lot of talk about insurance rate cut. the idea that the economy needs a little backup in clay global risk materializes and hits manufacturing investment harder. a lot of other things to look solid. jobs are growing and you have had pretty good consumer spending numbers but now enter

once again president donald trump. he wants a big rate cut. he says these a small rate cuts that could becoming are not enough. he is not impressed with consumer spending going up in the second quarter. maybe he is looking at business investment which actually turned negative. recently, a half-dozen fed officials, alan greenspan to janet yellen are saying they cut is needed. the insurance cut but probably the fed is not likely going to need anymore right now. the global economy, the trade war is the answer to what the fed needs to do next because we cannot know yet how much of a toll it will take on the u.s. manufacturing sector and the global economy overall. paul: it looks like the bank of japan is also expecting the fed to cut. governor under pressure to keep up with jay powell and mario draghi at the ecb. kathleen: absolutely, because the fed is ready to cut rates.

we are just asking how many times the european central bank thought it would be cutting -- hiking rates. they have ended the bond purchases. what is governor kuroda do? the boj policy statement definitely started the ball rolling because even though it shaved the growth forecast, it says it will not hesitate to act if further stimulus is needed. one of the most important things he said, yes, the boj is more positive towards easing. who are the global peers? this pivot puts upward pressu re on the yen. it makes it harder for the boj

to reduce inflation. for the boj, their dovish tilt may be slim. they have all five major tools. maybne that's another reason. he thinks the baton is passing . they will wait to see how dovis h the fed is.

there are concerns about an economic slowdown.

going to get a lot more details breakout from that income figure. keep in mind it is the biggest driver of profit and also one of the most vulnerable divisions to the sways in the economy.

micron technology are the biggest rivals globally and the memory chip space. they will be cutting capacity capx.utting in a guidance we can get will be quite vital. 32ond quarter prices for gigabit server modules sell 19.3% quarter over quarter. we got 128 gigabit memory chips falling 5%. they are expected to fall even further in the third and fourth quarter. >> what is in the pipeline for samsung that could lift prospects or events? >> they have basically pulled the launch of the fold in april because of screen problems. the films were falling apart.

we are hearing from the mail business that they are going to be launching on december 18. that is barely enough time ahead of the holiday season. if they are likely to launch in september. this comes of course on top of the fiasco in 2016 with the note seven that had a tendency to burst into flames. boardroom with the legal saga. they do need a killer product right now and a time of great uncertainty. >> the latest on samsung. more tweets lashing out at china. we will see how his anger may affect trade talks in shanghai. this is bloomberg.

>> i am in new york.

>> you are watching daybreak australia. china continues to rip the united states. the tweets landed as the nations resume trade talks. they've shown no signs of doing so. to discuss all of that with a professor of economics at syracuse university. tweets, claims of broken promises does not sound like a great start, does it? our expectations feeling modest? mary: we are seeing expectation lowering going on. most analysts have expectations low into this round anyway. we have not seen movement on key issues that have kept besides apart on intellectual property, rights, and how they would be

enforced. kept the party from an agreement earlier. we see no reason to think they have been worked out. paul: what do you make of the latest tweets and comments from president trump? is this a bad sign? does it get us off to a bad start or is it president trump being president trump? mary: i don't think we can read much into it if it is a negotiating tactic it is not going to work. the chinese will tune out whatever tweets he has. the will to put out there for them. the key issue is whether they feel they can reach an agreement that maintains their view of their sovereignty and that works for them just as we will reach an agreement only if it works for us. unfortunately, on both sides, there seems to be a discounting

of the danger that continuing fee trade war can do. we have already seen a softening , growth investment the united states has been very weak. we have seen more coming out of company reports with the plans were down or already depressed in the latest quarter. if we see president trump twice 5% tariffs on $300 billion worth of goods from will see that having more of a depressing effect. shery: when it comes to negotiating tactics it is relative. profits have shrank so much. in june, year on year, you might numbers in contraction

territory. overall, gdp has beat expectations. could you say u.s. has bigger leverage over china when it comes to the state of the economy? >> the state of the economy and the united states is important. we know with president trump getting ready for his reelection campaign, one thing he has going for him is the state of the election -- the state of the economy. todoes affect his ability carry out a trade war with china. whether the numbers will remain strong is to be seen. the economy is being driven by consumer spending. we will see what happens to consumer spending and general business optimism if that last round of tariffs is levied. for either side, a deal would be in their short-term interest.

mary: it does appear he is setting himself up without narrative with today's tweet. onhas not had a real big win trade yet. that, real pain in u.s. farm country. will turne election on whether the economy is still growing but also on what happens in farm country. we have seen president from direct a lot of revenue to boost other income knowing this trade war is really hurting those who are on farms or rely on farm incomes for their businesses. we saw a rather disappointing

report from caterpillar recently. i think this is a very dangerous game. it is one that could be solved with a trade agreement here. paul: it is not only the trade game in town, plenty of others as well. as far as the u.s. trade dispute with japan, do you see better prospects for an agreement there? mary: there is some chance of an agreement. the u.s. and japan are negotiating in good faith, i believe. the problem is whether the u.s. is asking china to deliver something whether it can deliver. the u.s. wants market access for its farmers. that clearly would be something president trump would like to bring home for the farmers, but the question is at what cost for japan, whichy, for is part of the the revised tpp

which the u.s. pulled out of. that granted market access from japan to the rest of the partners, something the u.s., when it was negotiating a deal desperately wanted, clearly wanted. it makes it hard for japan to offer the u.s. anything more than it offered to other partners. the question is what is the u.s. trying to get out of japan? japan for its part would like to see this threat of auto tariffs by the u.s. go away, or at least not be applied to it. each side does want something from the other, but whether what each side needs is something the other side can give is something we have not seen. so far, we don't have a deal. i think it is possible we can get a deal. it could provide some relief for farmers nba win for the -- and be a win for the u.s. but it

comes at the cost of the pending isomobile trade that trump threatening. shery: on the background of all of these bilateral tensions, you have the president having an assault on the wto. vetoi.s. beating -- b ng a new judge. how big of a risk of not having an international organization mediate these conflicts? mary: some countries have been altering -- offering an alternative. we don't know how big a deal this is because this is uncharted territory like so many of the things we have been experiencing. what we do know is the wto does good work in maintaining and improving the world trade system. one of those things is mediating. most disputes, the biggest dispute in the world are being led by the united states and they are not paying any attention to the wto anyway. i think that it is hard to see how much more disruption can happen.

seepossibility is that we copycat behavior. the idea of just bullying your trading partner or going outside of the system that is done regularly and then we will see a breakdown. shery: and that becomes the new normal. mary lovely, thank you so much for that. more ahead on daybreak australia. this is bloomberg. ♪

paul: carlsberg is one of the world's most recognizable beer brands but it took a major change in culture after a badly timed investment turned things south. in the latest episode of bloomberg turnaround, david tweed found out how carlsberg did it. ♪ year, in april this carlsberg put its reputation on

the line when it launched an advertising campaign at admitted beer in britain was not what it was supposed to be. it was an admission that can only come from a profound change in the culture of the company brought about by this man. a judgment with a reputation -- dutchman with a reputation of forging unity from division. when he arrived to carlsberg in company making a bad investment in the russian market. >> what is special about the carlsberg turnaround is how it triggered the turnaround by returning the company to its original purpose that the founder set out and really engaging the workforce. 2015, ii think back to suppose to me what was very

different versus today is we did not have any real clarity on the way forward. we looked at our competitors, the consolidation that was happening pretty fast at that time. there was a lot of concern about the future. him, i wantedmet to ask how do you deal with all of these issues at once? >> we put it together in a study. we have a savvy program, a start of a journey. on the other hand, we realized ourselves that we did not have the money. so, said ok, let's do two things. we create the future for ourselves. we fund our own journey. david: reluctant to ask shareholders for funds, he cut costs and investor savings in premium brand strategy. the plan addresses the concerns that prompted the carlsberg foundation which controlled the brewery since 1876 to see got a

new chief executive in the first place. the brewer's debt had been mounting, turnover and profit was down. shery: you can see more of the carlsberg recovery story and turnaround airing tonight, wednesday at 6 p.m. in hong kong, 8:00 p.m. in sydney. let's get you a quick check of the latest business flash headlines. first quarter profits fell as lending income declined. slid 5% to the equivalent of $2 billion in the june period from a year earlier. that accounts for almost one third of the bank's full-year forecast which is seen as solid progress by analysts. paul: more evidence that the lack of a resolution to the u.s.-china trade war is hurting global business. the first loss for 2.5 years as planes flew with the most empty cargo space in a decade. it comes as asia bound routes

were the hardest hit. shery: plenty more ahead in the next hour. we will speak to permanent portfolio president. we will also breakdown samsung's full second-quarter earnings. this is bloomberg. ♪

>> good morning i am paul allen in sydney. we are an hour away from the australian market open. bloomberg'sing from global headquarters in new york. i shery ahn. welcome to daybreak asia. paul: our top stories this wednesday, trade talks resume in shanghai. with dinner, dazzles, -- jazz and angry tweet. and tim c