ann berry, partner at cornell goodal paul allen --paul: morning. i am paul allen in sydney where the markets have opened in japan and korea. shery: i am shery ahn in new york. kamaruddin --ify i am sophie kamaruddin in hong kong. welcome to "daybreak: asia." ♪ paul: our top stories this friday. boris johnson's snap election bid in doubt after the opposition demands he rules out a new deal brexit. higher, but no

joy for amazon after poorly profit falls for the first time in more than two years. shery: mike pence sends messages of support to hong kong protesters. check of theuick markets. australia has open. sophie? sophie: we are headed for mixed start with aussie stocks nudging higher by .1%. set 45th day of gains. looking for the 6700 level. those companies have reported with more due today. we are watching samsung electronics on the vice chairman's retrials for his bribery case. the south korean government is announcing this morning at the country will give up its withoping nations status the wto. checking in on aussie bonds. the 10 year yield a creeping back toward 1%. pimco snapping up australian

state debt. of the as speculation are present and rba have to follow the fed and have quantitative easing. euro, slipping to a one-week low. advance.ed its early pmi, split, on the thought of whether a boost in the pound would result from brexit. shery: we have breaking news. budweiser brewing for asia. ine months net income coming at $5.42 billion. the first report since

the ipo in hong kong. we are getting the latest numbers coming in at $5.4 million. $5.42 billion. -- billion. actually, we had to correct those numbers. $853ncome coming in at million. nine months net income, $853 million. we are talking about revenue for the first nine months, coming in dollars -- $5.34 billion. gross margin will be 52.4%. at 853 million. revenue at 5.3 port billion

dollars. -- $5.34 billion. their first report since their ipo in hong kong as the stock gained more than 10% since that ipo. paul: let's catch up on the first word news. jessica? >> mike pence has criticized china's actions against protesters in hong kong. he is calling for greater engagement between the worlds to biggest economies. he told demonstrators in hong kong that we stand with you. he criticized the mba for failing to defend freedom of speech over a tweet from one of its executives that supported hong kong's protest. >> hong kong is a living example of what can happen when china embraces liberty. last few years, beijing has increased its interventions in hong kong and

engaged in actions to curtail the rights and liberties of its people. mario draghi has bid farewell to his tenure as the president of the european central bank with a gloomy take on the euro area economy. he said the labor market has lost some strength, growth is showing weaker momentum, and risks to the outlook or on the downside. he will hand the rates to christine lagarde on november 1. >> i have no advice for her. she knows better than anyone else what to do and what to say. no advice is needed. she knows perfectly well what she has to do. by the way, she has a long period of time ahead, during which, she will have to form her own view, together with the governing council about what to do. jessica: nato's secretary-general says he is encouraged by the reduction of

violence in syria. a two-dayhead of meeting of defense ministers in brussels. the meeting follows a temporary truce last week that start fighting in the region. brazilian president jair bolsonaro has given up on his push to appoint his son as the country's ambassador to the u.s. while the trump administration had approved the suggestion, also known as are submitted his son to brazil's senate. that is as he struggled to get enough support. instead, he is appointed a career diplomat to the position. -- has appointed a career diplomat the position. 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. i'm jessica summers. this is bloomberg. after being denied the right to fast-track his brexit deal through parliament, boris johnson once a snap election on december 12.

>> the reason for having that deadline is because otherwise, i don't think the people of this country are going to believe that parliament is really going to do it by the deadline. it has been 3.5 years, meaning to do it. let's get it done and come out of the eu. shery: the opposition says, not until he no deal brexit has been ruled out. the eu says they need more clarity from the u.k. before they decide how long of an extension to offer. we are joined by our reporter. give us some insight. will he be able to get his way when the opposition has veto power at this point. -- point? >> probably not. the bulls is in the court of the eu. it's quite difficult to not have a general election within those three months if you are the labour party. otherwise, you are saying, we

need to do what we did this last period, again, with the main purpose of continuing to evade in election. the chances that we do have an election within the next matter of months are quite high. the question boris johnson has to answer, and frankly, i don't see the logic in the position he is trying to get away with, he is within a few days' discussion of getting the deal he has thrashed out through parliament. there are quite a number of labor mps who said they were prepared to counter that because they voted for it on the second or third week. , ok, we are not say now going to keep discussing brexit for another couple of weeks, get the eyes darted entities crossed. and then, we are going to leave dotted and the

t's crossed, and then we are going to leave the eu. that's the simple thing, i don't understand why he isn't doing it. paul: in terms of logic, that has eluded the debate at large over the last three years. it has exposed some deep divisions and what was the united kingdom. there is a new poll out. >> this is what shocked me. dispassionate about this, but i am british. i was horrified of this poll created by a legitimate polling agency answering questions set by the university of cardiff, and found that a majority of both people who voted to leave and people who voted to remain

said they would be prepared to take the risk that violence or violence and injury for members of the public as part of a protest that led to them getting their way on the brexit issue was a risk they were prepared to take. levers areof prepared to see violence against mps if it helps them get out of the eu. a majority of remainders are prepared to see violence against mps if it means we stay in the eu. i find that very horrifying and depressing, but it appears to be a reasonable poll. thank you so much. they are saying revenue grew by

3.1% in the first nine months of 2019, driven by their continued ization of their premium strategy. it has driven up there might -- margins so far. china,er saying, in budweiser is the number one premium rand. corona is the number one super premium brand. but the more ahead. this is bloomberg. ♪

shery: this is "daybreak: asia." i am shery ahn in new york. paul: i am paul allen in sydney. the parade of earnings that drove stocks hires -- stocks higher continued after the bell. su keenan is here. -- what we have is

amazon, intel and visa. the waytake a look at the market ended the regular session. what we have is a market that was swinging between gains and losses, even though a lot of earnings were positive. let's get to some of the big movers. what you see is tesla, microsoft, twitter, 3m, different directions for them. microsoft and tesla, very positive after hours yesterday. twitter and 3m, disappointing. twitter, their fourth quarter revenue outlook missed even the average estimate. 3m, continuing to blame it. the disappointing line is on a global industrial slowdown. that is what is of interest there. look, teslatake a was the big story here. 24% year to date loss.

the head of the earnings was fascinating when you go into the bloomberg and look at what we are seeing now. an eight month high in the latest session. the tactical analysts are agains surprise profit earnings report. shery: a disappointment for amazon. we are seeing a plunge there. su: this is what paul was talking about. amazon, disappointing in a big way. and online retailer. they are reporting they're not going to have a positive holiday season. they missed in a very big magnitude. in tow, positive news. wish outlook on data centered shift demand. -- check demand. -- check demand. -- chip demand. su keenan, thank you.

joining us now for more the markets is ann berry, partner at cornell capital. she was talking about this plunge in amazon, given they are the third-largest constituent of the s&p 500. are we set up for iraqi friday?? friday?ky ann: it's not just what's going on with amazon. it's also the rest of the retail sector. the holiday season for the rest of the year versus expectations, a 9% drop. what is interesting is how does it set the tone for walmart and target later in the season at this is a lead indicator? shery: we have seen, this isn't only for amazon, but these can -- companies coming out and reporting earnings, the gtv chart showing how analysts are slashing their profit estimates were 2020. no wonder, weere,

consider -- continue to see the s&p 500 stalled new record highs, but not get there since july. ann: what's also interesting is is this a point where the level of -- level of forgiveness where it starts to turn -- forgiveness of profit where it starts to go? ann:ann: they have gotten a lot market onons from the not delivering on profit. is this the moment where amazon gets judged in a different way? paul: you touched on it earlier, about what it means for walmart, ebay, they are signaling mably -- maybe the next corner will not be -- quarter will not be what it is cracked up to be. is this telling you something about the u.s. consumer? ann: it's a great question. consumer spending has driven 85% of growth in u.s. gdp over the

last five years. to the extent the market interprets it as a slowdown, it really could cause consternation. at a different point, is this a way of trying to understand better how the content -- competitive landscape is changing? if you look at what happened to walmart in the earnings season in august, they pointed to next day from -- a an same-day fulfillment as part of the reason they grew so quickly. they seem to have figured out how to compete in e-commerce. this is a resetting of expectations by amazon, also pointing to the way in which the u.s. retail winners have started to figure out how to take them on. paul: going back to your point about how the snp has been performing over the past few months, this is something we raised with our previous gas.

has this rally been driven by the fed? ann: possibly. i think it's a little bit the fact that the trade attention has cooled down a little bit. you saw mike pence pence, today saying that the u.s. definitively does not want to decouple from china. i think that language has been there a little bit. as interest-rate environment. at least the heat seems to have come out of the rhetoric a little bit. shery: and yet we continue to see the impact of everything happening on the trade front. as a company 3m beginning to be weighed down. boeing -- resolve boeing, their 737 dreamliner production being cut. how do these industrial concerns filter through the market? ann: it's interesting because you've seen the slowdown in turbo goods and autos slow four months ago.

the data showed up today. that pattern has existed for a while. texas instrument talked about there being an issue. the chemical sector was seeing that last earnings season. it's not new news. we are just not necessarily seeing the reactions you would expect. there were also other sectors that are asset intensive that are doing well. raytheon, the defense sector. it's a time when business fundamentals seem to drive values so much more than cyclical expectations you might have seen before. -- susan shirk -- ann berry, partner at cornell capital, things for joining us. this is bloomberg. ♪

shery: this is "daybreak: asia."

i am shery ahn in new york. paul: i am paul allen in sydney. amazon shares plummeted after extending trade after the quarter earnings. for the first time in more than two years, they reported a decline in quarterly profit. let's go to seattle. covers amazon forest. why are some analysts concerned? services is the cash cow for the company. it's their most profitable company. there grows came in and the slowest since they reported. they are investing heavily in building out sales and marketing teams to sell to corporate customers. there is worry percolating on wall street that the cash cow may be slowing after so many years. shery: not to mention those big investments in next day delivery may not be paying off as of yet.

that's a mixed report card. their unit sales, the total vote cells, they have reinvigorated a bit since they started pushing for one day delivery, particularly in the u.s.. that's coming at a high cost. they said they will spend $1.5 billion in the current quarter to make one day delivery happen over the holiday season. investors are worried when that payoff will show up. shery: we saw advertising businesses say strong. matt: that's definitely a great spot. amazon web services, concerned as some customers are, it still the most profitable business for amazon. it accounted for like 70% of their operating profit this quarter. stay tuned to "daybreak: asia," for more earnings inside.

we will talk to the intel ceo on their bullish forecast after strong third-quarter results. let's get a quick check of the latest business flash headlines. the uber ceo says india will be key in his drive to push the company to profitability. lost over $5 million in the third quarter. it has fallen 25% since its ipo. he says india is a massive untapped market. feature to sink delis transport system. transporthli's system. paul: it's the latest move in the latest ongoing cost reduction program. to -- the commercial banking unit may bear the brunt of the reductions.

hsbc employs a 4% of its total workforce in that region. shery: cbc says it is talking to investors about it singaporean bank license. it wouldn't confirm reports it is talking to singtel. they will face pressure on all fronts, including lending margins, and forex rates. say theo u.s. senators couldr video app tiktok be a security threat and should be investigated. they say the growing fan base produce risks, including the potential for censorship and foreign influence campaigns. they are owned by the chinese company bite dance. it has been downloaded 110 million times in the u.s.. let's see how things are doing on the asian markets trading

right now. new zealand up and running for a couple of hours. up by .3%. we are trading higher as well in australia by .6%. the features for the nikkei and kospi as well, looking flat. coming up next, lingering risks from margin squeeze and rising credit costs will test third-quarter earnings were chinese banks. we will tell you what to expect for results from icbc. we will look ahead to the market open. as we continue to see japan and south korea gain ground, the rest of the asian markets are in the green of the moment. that was after we saw the s&p 500 rise above the 3000 level and approach its all-time high. plenty more to come. this is bloomberg. ♪

jessica: this is "daybreak: asia ." these are the first word headlines. force johnson's bid for a snap election is in doubt. his opponent say they want to rule out a no deal brexit first. the opposition labour party to seesays he also wants if the eu will offer an extension before making a decision. johnson called for parliamentary --e on monday to have us another election to and what he called a nightmare. the reason to have the deadline is because i don't the people of this country are going to believe that parliament is really going to do it.

it has been 3.5 years. let's get it done and come out of the eu. jessica: british police have confirmed all 39 people found dead in a refrigerated container truck near an english port were chinese citizens. the magistrate gave detectives another 24 hours to question the trucks driver, who has now been arrested on suspicion of attempted murder. police say they traveled by ferry from a port to -- before being picked up by the driver. secretary-general says he's encouraged by the reduction of violence in syria but says the situation is still fragile. he spoke ahead of a two day meeting of defense ministers in brussels. the meeting followed a temporary truce last week that caused fighting in the region. and brazilian president jair bolsonaro has given up on his push to appoint his son as the

country's ambassador to the u.s. the trump administration had approved the suggestion. bolsonaro never submitted his name to the brazil's senate. that is as he struggled to gain enough congressional support. instead, he has appointed a 56-year-old career diplomat to the position. 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. i'm jessica summers. this is bloomberg. markets have been trading for half an hour. let's turn to sophie. resoluten sydney, mining, adding 10% after announcing operations will resume at its goldmine and molly -- ub -- in mali. rising afternment some ratings. credit suisse was a stock to underperform.

it did raise its target. clean away falling to a combo of lower economic activity, softer commodity prices and a drop in local queensland volumes. resmed jumping up to 15%. have had a series of central-bank decisions in the past 24 hours. here with theis highlights. let's start with the ecb and mario draghi. no change in policy, but a kathleen:sage certainly a change in leadership as mario draghi steps down after eight years.

as he leaves, he is focusing on the downside risks. remember mario draghi demands that he will do whatever it takes to do whatever he could and he did rescue it himself. he kept the euro area together. even after the ecb has restarted stimulus as it did in september with more -- a deeper negative rate and more bond purchases. all they can do right now. knew he wouldever have to contend with a trade war. ite's what he said about today. confirmedoming data our previous assessments of a protracted weakness in the euro area growth.

>> as if he needed any more reminding, let's look at what we are looking at today and terms of downside risks. latest are seeing is the purchasing managers index, from market, they are the big providers of this data from europe. seeing is germany's pmi is low. the euro zone pmi well below 50. that is the problem. germany is the euro area's biggest economy by far. services are weakening. as he leaves, remember, in september, one third of the voting policy members opposed the move to restart stimulus. he is trying to get these companies to do fiscal stimulus. we have a lot of questions about the christine lagarde.

he said it over and over, she does not eat advice -- need advice. shery: as we continue to see these easing moves, philippines and indonesia, adding more stimulus. are doing what they signaled last week. that is pretty aggressive. they cut the key rate for the fourth meeting in a row. that's what they said they could do. the bank of indonesia, the governor said this is appropriate. we have inflation under control. the economy is slowing. one more thing to look at in terms of what is going on, the r is stable. is stable.he rupiah it was getting smashed. that's why they had to do it.

now they are cutting rates as it is stable. the governor told me that they were open to cutting the reserve requirement ratio. there was a reserve ratios to 40%. they are moving in the right direction. they are going to cut their rates three times this year. he signaled to me that is not their next move. put cutting the rrr is very important to the philippines. paul:paul: it looks like a bit of a policy cliffhanger at the bank of japan ahead of next week's meeting. the team of tokyo's reporting officials are now considering not adding stimulus. in september, a couple of things happen. said he was more

ready to consider adding more stimulus. they also called for a review of the impact of the global slowdown on price momentum and inflation. that has put more on inflation, because when the order to global assessment of prices was followed by a move to yield curve control. sinceas happened sets -- september, the economy isn't taking big hits on bloomberg's team in tokyo. a lot of officials are saying maybe they don't need to do it. the price momentum is not deteriorating. the yen has weekend. even if they cut that key rate, they don't have to worry about the yen strengthening. boj is watching the data in the markets right up until the end of the meeting on october 31. the door is still open. they are weighing all the evidence. thanks for joining us.

some breaking news right now. hasn's trade minister offered to resign. this is over a probe. he is giving remarks in tokyo. do with the kansai electric company. there, is in place trying to uncover how much cash and gifts were received. we will bring you more details on that story as it unfolds. he is making some remarks to the media in japan at the moment. three of china's biggest banks report earnings on friday. will becomeon trade

clear. tom mackenzie joins us with a preview. should we be bracing for bad news? to the analysis from bloomberg intelligence, yes. the banks are facing a number of different pressure points. in the first half of the year, overall, delivered biggest banks in china, 9.2% earnings growth. it will come under pressure in the third quarter. we are talking about three of the biggest banks. the bank of china and the bank of communications, all reporting earnings. in terms of pressure points, one key area are margins for these lenders. these low towards prime rates, which are encouraging the lenders to reduce their rates to the private sector. that is expected to squeeze margins.

forward as ifoing we see additional easing and cost of that low prime rate, theh economists expect, near the trade war pressures and the economic slowdown. that is being felt in sectors like industrial sectors, manufacturing and retail. you would expect that you are seeing a degrading of the loan quality. you might seek to cap long -- nonperforming loans. -- tick up in nonperforming loans. is essentially flat year to date. bank of china is down 5%. shery: where are the sober lines for lenders? -- silver linings for lenders? tom: some of them may come

through in terms of credit card fees and wealth management fees. wealth management is still a big business, a growing business in china. all of these banks are trying to expand the footprint on the wealth management side of the footprint then you have the likes of icbc. it has done a tie up with we chat. those are a few things we look at. credit cards, wealth management and tieups with private businesses like we chat. they then expand their deposits. shery: you can always find in-depth analysis in the days big newsmakers on bloomberg radio. broadcasting live from our studio in hong kong. app,n via the bloomberg bloomberg radio plus or bloombergradio.com. 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. ♪ n more than 120 countries. --this is bloomberg. ♪

this is "daybreak: asia." shery: let's go to sophie kamaruddin. index, the bloomberg sub looking to buy $20 billion of u.s. farm goods and a deal. traders want more information with sentiment neutral and corn, soybean futures. potential purchases may bring them back to pre-trade war levels and will be far less than the 40 or $50 billion proposed earlier this month. agriculture has been vulnerable to trade tensions. disliking the broader commodity market. this, as more u.s. factors -- farmers expect less going forward.

paul: u.s. vice president mike pence has criticized china's actions against protesters in hong kong, while calling for greater engagement between the world's two biggest economies. he said beijing's human rights record would not stop the two nations from trying to resolve their trade war. >> we will continue to negotiate in good faith. want to bring about long-overdue structural reforms in our economic relationship. as i heard from him this morning, president trump remains optimistic. tom: susan shirk is a former deputy terry -- deputy secretary assistant of state during the hint -- hillary clinton -- between the clinton administration. she joins us from san diego. you heard pence attacking china on one hand for its human rights, and on the other, for what's happening in hong kong,

and then on the other, saying, we can get a trade deal. is it possible to about -- to have both? susan: it certainly is. the vice president basically reprieved a speech he gave last year, which was a long list of evil deeds that china has done, not just on human rights, but on the south china sea and in its economic and trade policies, its military buildup, as well as its efforts to try to influence public opinion outside of china. coercively. to agree with beijing's taiwan, and tibet, and hong kong, which are essentially domestic political issues.

he did that, then he went on to say, to actually reach out a hand to china, and to suggest get the economic issues right, if we can get an agreement, not just about trade, but the structural issues that bring china back in line to international market norms, then they could be open to opening a relationship. paul:paul: there appears to be progress on the phase one deal, particularly around agricultural purchases. can any deal be enforceable and durable? we have to tested by an -- an effective negotiation. it looks like, maybe after a long time of not very effective negotiation, our side is trying

to work the issues at the lower levels so that it can then be blessed by the leaders. we have to test the flexibility of xi jinping and the folks on that side. that thet was good vice president did put out the offer of restoring some balance to u.s.-china relations if they can take the hard steps to get there economic system more back in line with international norms. it's interesting. after launching china's reform and opening back in 1979, and the 80's, that the u.s. would welcome that, supported that, and help boost china as an international player, because we were so

encouraged by the reforms in china. if somehow he could act like maybe we could get on a decent relationship between the two countries. shery: the vice president saying, rather than decoupling the two economies that the u.s. is seeking engagement with china. have we seen the u.s. actions backing the vice president's words? good question. what is engagement -- what does engagement really mean? together withng chinese counterparts, chinese anicials, to try to get agreement on areas where we have serious complaints. other than a trade agreement, there hasn't been that much agreement between the two sides.

the other side has put up new barriers by imposing decent restrictions. there are other obstacles that domestic politics, primarily on the two sides, are driving the two countries further apart. what has changed since the talks broke down in spring? it seems china wants the same things. purchase,s,k about they won't do what trump suggested, 50 billion of farm dollars -- $50 billion worth of farm goods, but china saying they will only do it if they take the tariffs off the table. lot harderake it a for the chinese side to compromise and get their own interest groups to go along with concessions. to harsh a stance

think ahina, and i number of actions on the u.s. side, including the embargo of u.s. technology sales to huawei, the arrest of the woman in canada. changed opinion in china. they now see the u.s. government , and not just the trump administration is being so hostile to china that it makes it very difficult for them to make compromises. i think the pence speech is a step in the right direction of taking a tough principled stand. at the same time, leaving the door open to getting back to cooperation.

paul: university of california thanksor, susan shirk, you. plenty more ahead. this is bloomberg. ♪

paul: this is "daybreak: asia." shery: let's get a quick check of the latest business flash headlines. lending of kkr's business in india is leaving thatprolonged and upheaval has worsened the company's credit rating. replaced by the head of the india unit. paul: third-quarter profitpaul:

china's largest insurer, reporting a net income of $4.5 billion in the. -- period. profit jumped 20% in the first nine months of the year. they have been focused on selling high value products for wider margins. shery: softbank is planning of taking a write-down of $5 billion reflect the plunge in value of some of its biggest holdings according to people close to the move. the parents of the $100 billion vision fund would martha write-downs when it announces second-quarter earnings on november 6. the move is being japan by the co.ings in we work and we let's turn to sophie for what to watch. sophie: we are on earnings watch. growth in japanese sales. discount is cautious after soft results.

after thethe watch lowest quarterly profits in 2016. they are caught up in the indian markets worst sales slowdown. onthe start is not trade friday, a remained untreated on thursday and was bid as an upper limit for second session. nissan in view as the carmaker weighing options about its two plants in europe as it faces declining sales in the region. we are keeping an eye on sony as responses to third point -- third-quarter sharing and they have stopped suggestions to break up. radar after an operating profit. budweiser announcing it is rolling back price increases in south korea. come, intel gave an upbeat forecast on global chip demand. we will discuss the results with

the ceo. this is bloomberg. ♪

paul: good morning. i'm paul allen in sydney. asia's major markets have just opened from trade -- for trade. shery: i'm shery ahn. sophie: welcome to daybreak: asia. ♪ paul: asian stocks set for a boost from tech driven gains on wall street. to tokyo where

softbank is said to be planning a $5 billion write-down on its investments. or ceothe luxury tool tells us exclusively how he's expecting china sales to double. the market is opening now in japan and south korea. let's get straight to the market action. sophie? sophie: japanese stocks nudging higher with plenty of earnings on cap. the yen just steady here. set for a third drop ahead of the boj and fed meeting do next week. the kospi is adding about one quarter of 1%. the korean won on the back foot off by 1/10 of 1%. hotel corporate calendar, is financial with results do this morning. we are watching chipmakers on intel's bullish forecast. samsung on view. the government is to announce this morning if south korea will

give up its developing nation status with the deputy a. -- wto. paul: all right. thanks very much. let's check in on the first word news with jessica summers. jessica: u.s. vice president mike pence has criticized china's actions against protesters in hong kong. he's calling for greater engagement between the world's two biggest economies. speaking in washington, he told demonstrators in hong kong that we stand with you. he criticized the nba for failing to defend freedom of speech over a tweet from one of its executives that supported hong kong's protests. >> hong kong is a leading -- living example of what could happen when china embraces liberty. and yet, for the last few years, beijing has increased its interventions in hong kong and engaged in actions to curtail the rights and liberties of its

people. jessica: u.k. prime minister boris johnson's bid for a snap election is in doubt. his opponents say they want to rule out a no deal brexit first. the opposition labor party leader jeremy corbyn also says he wants to see the eu offer a brexit extension before making a decision. johnson calls for a parliamentary vote on monday to back an election in a bid to end what he calls this nightmare. issuese economy minister -- has resigned after facing allegations of suspected violations of campaign finance laws. he said he didn't want to stall parliament with debate about his own issue. he's the first member of the prime minister's new cabinet to leave after being appointed in september. he will be replaced by a lawmaker. secretary-general says he's encouraged by the reduction of violence in syria but says the

situation is still fragile. he spoke ahead of a two-day meeting of defense ministers in brussels. the meeting follows a temporary truce last week that caused fighting in the region. caused fighting in the region. linux pilots flew a 737 max 8 on october 28 last year despite knowing about a malfunctioning airspeed indicator. the flight landed safely but that same aircraft crashed, killing 189 people. the earlier flight with the faulty airspeed indicator is expected to be outlined in a report by indonesian investigators scheduled for release on friday. 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'm jessica summers. this is bloomberg. ♪ shery: we have an alert on the bloomberg.

south korea is giving up its status as a developing nation at the world trade organization. president, from the signaling out south korea as one of the countries that are a developed market but they are being treated unfairly by claiming the developing country status that gives them some a betters and actually treatment from the wto when it comes to those tariffs. one of the factors that could be hurt the most in south korea could be agriculture. riceve seen products like am red pepper, and garlic where tariffs are significantly higher , according to the wto regime. they are able to protect their industries and now we are hearing that south korea is announcing that they are abandoning that developing nation status. president trump in july named cows korea one of those countries that are benefiting

from this status despite the fact that it is one of the world richest countries. korea imposes a tariff of more than 500% on rice imports. joining us now is bloomberg markets live managing editor. great to have you with us. we continue to see a raft of earnings out of south korea. we just got the results with south korea now announcing they will be giving up the developing nation status. how are we expecting markets in asia to try today given this series of headlines? there's two different issues here. the korean story is very important for korea. story isthe regional the context of earnings can be

skewed either way. it's one of those great situation where bulls and bears can fight. we have seen owner links guidance completely slashed. this has been a recurrent theme in the last couple quarters. at some point, this reaches a finite limit. that means they have been slashed so far they are generally getting more submissive. there have been prominent names missing, things like texas instruments, amazon, caterpillar. one of the themes, we are beating overall in the headlines. that is very low guidance. the next part of the story on earnings is that we are seeing future guidance really get quite aggressive. it was looking bizarrely high. the idea we would have 10% earnings growth. most of the world economies are headed into recession. we are seeing that guidance for next year get cut very aggressively. that is very negative. the final thing that is positive

, many people on the earnings calls are saying that this kind of guidance is being cut because of consumers are investors being cautious. not because they are already seeing a slump in demand. bulls are seeing that as a silver lining. there is something for bulls and bears and everyone. for the korea story, it will take a wild to place this into markets. the impact on trade negotiations has been where they have placed imports. they will have to slash the tariffs they have on imports. no one knows how that will trade on korean assets. it is more about the marginal impact on other countries. it will take a while for analysts to establish were that impact will be. shery: how long will we see this focus on earnings instead of trade headlines? criticizingnt pence china for their treatment of hong kong protesters. >> the trade is going to remain the biggest story. the u.s. china trade

relationship, whether we can actually get some deal signed next month. we will need guidance. whether we will remove the tariffs are it he lamented looks very unlikely. there will continue to be this drag on company earnings in the u.s.. this deal might never get signed and we may see a real escalation. trade remains the big story. it will ebb and flow, we will get positive moments, pessimistic moments. while it's the most dominant story of 2019, it is not dominant day by day. earnings will trump for the moment. we will continue to look at the headline news earnings. we've only had 40% of companies reports of our. there are more to report in the next couple days. it's only after a week or two that we will assess how the earnings season was overall. that verdict might be disappointing when people realize how much guidance has been slashed.

the future is looking bleak earnings. paul: we have seen the s&p up 20% year to date. what you think the chances are of having a repeat of what we saw in the fourth quarter of 2018? >> i think that year metric is very arbitrary. we had this tremendous collapse in the last quarter of last year. point was almost below for a multi-year low. i think the low was actually does them are 26. it's a little bit arbitrary. much of anywhere over the last 18 months in the s&p. we keep on nudging towards records high. we are not getting any momentum to the top side. earnings are going to probably say that, look, earnings topped out in the third quarter of 2018. that is the bigger picture story here.

they topped at a tremendous level because of those corporate tax cuts in the u.s.. a year ago now was when we saw a earnings topped. it has not beaten any quarter six. earnings will continue to come lower from there. paul: thanks for joining us. you can follow more on that story and all the day's trading on our markets live blog. find that on the bloomberg at mliv . on a market run down commentary and analysis from bloomberg says great editors. expert editors. we will be speaking to the ceo of intel who released a report earlier today. shery: up next, the fate of the asian economy as we head toward central-bank decisions in japan and the u.s.. this is bloomberg. ♪

paul: this is daybreak asia. i'm paul allen in sydney. shery: i'm shery ahn in new york. the bank of japan is currently considering reframing from extra stimulus but will look for a fresh way to show its continued readiness to take action. joining us now from hong kong is , great to have you with us. we have seen the boj make a call for review on their price growth policy, given the global economic slowdown. how high is the bar for mr. kuroda when the markets are expecting something from the bank? always expecting something from boj because it has shown the world that more and more can always be done. you know, kuroda is always under pressure. the reality is that the minister

of finance has made it pretty the for kuroda, let alone horrible manufacturing data that just came out. simply because they have raised again this tax at the worst time, basically when japan was suffering from a trade war and deteriorating global trade conditions. in that regard, kuroda has been hit twice as hard. stimulus is expected, whether physical or monetary. kuroda is basically telling the mof, do it first. please do it first. i might follow if what you do is not enough. that would be on doing -- undoing the hike in sales tax adjusted. it is a circle. japan needs more and it can't get its act together. that is why corrode is under pressure. shery: how difficult is it to

make the call to do more when you have a pretty resilient domestic economy? when you take a look at the services sector, you also have upside risk from the fact of potential fasts -- flashpoints globally could easily bit now. more can come. still inices are japan. everything that comes from the rest of the world, trade and manufacturing, is really poor. consumption will be head -- hit by the sales tax. we are expecting a recession in japan. , if i were him i would keep the very few he has left and wait for the government to take action in this. terms of action, we saw

some from the bank of indonesia. no surprises, really. with the imf revising its growth forecast for indonesia lower, do you see more to come? >> yes. more to come in indonesia, generally. the immediate impact of the trade war is very negative for the region. beyond theit going external sector to consumption in general. it's already basically in the market. 100 basis points cuts in several departments. yes, indonesia, philippines, they all need more liquidity in the markets for their banks to lend the real economy. paul: 100 basis points you see for the philippines. that is very aggressive. why do you see that? >> it is that reserve requirement. in terms of rates, 25 basis point. consensus is waiting for 2020.

we may as well see an earlier in 2019. the reality is that lending growth in the philippines is decelerating very rapidly at a time where they keep this mantra that, i want to build more. if you want to build more and create infrastructure that is going to change the nature of that country after years of delay, you need more lending. if you need more lending, you need to free liquidity. reserve requirements are the fastest way to doing that. we have seen 100 basis points or more from what was already announced, which would be in .lace on the first of november already thatr had 200 basis point. we are 400 basis points in liquidity. this is a structural change. as countries graduate in the region, they do not want to run monetary policy with high percentage requirements.

that is something that differentiate central banks in the developed world from the emerging world. the philippines is in bsp, it is in that transition of reducing requirements. it is part of a structural change. it's the right time because they need more liquidity. that's what it is. shery: where watching the fed rate decision next week as well. how much are you expecting the fed to provide to these asian central banks? >> well, we expect more leeway. whatis why we are seeing we are seeing an asian central banks. they know there is room to cut. the fed is allowing them to cut. inflation is allowing them to cut. the philippines is well within target at the lower end of the target. why not cut if you know the fed is not going to change anytime soon? , bothomestic conditions inflation and growth, deserve cuts.

the fed is only basically putting the red carpet out there for everybody in the region to feel easy about their economy by executing cuts and injecting liquidity. paul: i just want to get your thoughts on the legacy of mario draghi. he has held his last meeting and press conference. he will have his last day next week. we bring up a chart on the bloomberg terminal. we see the impact of mario draghi. the yellow circle is when he took office. we see volatility for the euro declining since then. is that his legacy? will he be remembered for something else? >> for me, mario draghi will be remembered for saving the euro, to be frank. we now may say that he had overdone it lately. there are very different calls there as to whether he should refrain from even taking additional action before leaving. that is not his legacy. his legacy is whatever it takes.

he did that. others have learned from him. that is indeed his legacy. let's see what lagarde does a summit legacy. the ecb saved the euro. that is a big thing that mario draghi really did. the texas chief apex economists. thank you for joining us. let's have a check on what's moving in the markets now. let's get over to sophie in hong kong. sophie: of the chemical rising as much as 3.2%. it says its battery business returned a profit for the first time in three quarters on rising demand from carmakers and a lower expansion costs. is adding 7.4%d this morning as the japanese drugmaker and its partner seeks u.s. fda approval for an alzheimer's therapy. the stock has not been actively trading over the past two sessions.

onres closed 18% higher wednesday. let's check in on cisco, rising as much as 30%. the company's third-quarter guidance is conscious. checking in on pharma. jumping the most since october 2017. rising to a fresh record high after raising its profit forecast, citing increased revenue from japanese sales of its mainstay products. softbank this morning, extending losses for a fourth straight session after a bloomberg report that it is planning a write-down of $5 billion when it is to announce second quarter earnings. the stock falling to a january 22 low. we will be in tokyo with more on that story. this is bloomberg. ♪

shery: this is daybreak asia.

i'm shery on in new york. paul: i'm paul allen in sydney. softbank is planning to take a write-down of $5 billion to respect a plunge in the value of some of its biggest holdings including we work and uber. let's bring in the bloomberg technology reporter in tokyo. 5 billion, that's a lot to write down. is that a surprising number? >> that is 5 billion for the starters, right. it could be as much as 7 billion. a few weeks ago, analysts venture the losses for the quarter. that's about the ballpark. it does help that some of the companies already public. softbank will book 3.5 billion for uber alone. another 750 million from declining shares in slack. another 350 from garden. heress the real wildcard is we work.

they are still questioning how much the company is worth and what stage softbank has invested. the losses might be at 2.8 billion. this is at 15 billion valuation coming down from 24. now we know that the company might be worth as little -- worth as little as a. sock -- softbank uses blended valuations. it's anyone's guess on how much of a hit they will take. there are bigger questions. the fact that uber's valuation is falling so steeply both negatively for the rest of ride-hailing portfolios. that is about $20 billion of investments. none of those have been booked yet. softbank can also book returns from oil to balance it out. it's not going to be a good quarter for them. inry: it doesn't too much his efforts to raise that second vision fund.

already, we saw that is challenging for him. -- as challenging for him. >> it certainly doesn't help. imploded,e we work the announcement for second glaringund had omissions. the biggest investors in the first fund were nowhere to be seen. since then, it remains to be seen whether they will put any money at all. if they do, it might be nominal amounts. of course, you have the typical . curve in venture capital the problem for softbank is that they invested in late stage. they have not been shy about booking the valuation games. -- gains. going forward, the vision fund story might be quite negative. the timing is off a. asy could use good optics they try to convince a new set of investors to put up another

$100 billion. it's not good timing at all. shery: thank you so much for that. coming up next, we will be discussing demand in china. this is bloomberg. ♪

jessica: first word headlines. mario draghi has been farewell to his tenure as the president of the european central bank with a gloomy take on the euro area economy. at his last press conference, he said the labor market has lost , andgth, growth is slowing risks to the outlook on the downside. he will hand the reins to -- to christine lagarde november 1. >> she knows better than anybody else what to do and what to say. no advice is needed. she knows perfectly well what she has to do. by the way, she has a long time

ahead during which she will have to form her own view together with the governing council. presidenthe brazilian has given up on his push to appoint his son as the country's ambassador to the united states. all the trump administration had approved the suggestion, both torow never submitted brazil's senate. he struggles to get congressional support. he has appointed a 50 60 career diplomat to the position. confirmedlice have that all 39 people found dead in a refrigerated container truck were chinese citizens. a magistrate gave detectives another 24 hours to question the truck's driver who has now been arrested on suspicion of attempted murder. police say the container travel by ferry from a port before being picked up by the driver.

global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. ♪ paul: thanks very much. let's check in on what's happening on the markets now with sophie. sophie: kicking it off with what's happening in tokyo. japanese stocks nudging higher by 1/10 of 1%. pushing the benchmark into overbought territory. blackrock has warned not to chase the rally in japanese stocks. morgan stanley is among the bulls. the kospi has eased his earlier advance. financials among the biggest drag. the co-we and want is on the back foot. -- korean won is on the back foot. dollar hovering above 68 and headed towards the first weekly decline in four years.

up over 5% aso is a reported a drop in profit on surging costs and warned of muted steel demand. sydney sliding with several strategists cutting their price targets after the minor posted a drop in gold and copper output in the first corner. at 70-72.put shery: the asia-pacific unit of a be index has posted a decline in profit in its earnings debut as it faces a slowdown in its key chinese markets. asia consumer editor rachel chang joins us now to break down the figures. have seen a point to the success of their superpremium brands. what happened? >> well, what they are saying is that they saw a slowdown in their key china market, especially in the nightlife and restaurant channels. volume dropped the most 6% over that quarter.

value did rise about the same amount. they also pointed to difficulties in south korea where their key brand, a competitor came on really strong. they will roll back a price increase that they put forward in korea. in order to adjust what they are doing there. i think the broader picture really is that the slowdown in the chinese market is intensifying throughout the economy. this unit is very exposed to what's happening in china. paul: what will this mean for the bite was are a pet -- budweiser a pet going forward? >> the business will be very competitive. it will be an intensifying challenge to achieve the kind of growth that people were hoping to see from this unit. we must rather, when this unit was lost, they were seen as really key to go in and appeal china's play in terms of what's going on in the market over

there. i think people are going to be looking at quite -- whether they will take the brunt of the weakness we will see. paul: asia consumer editor, thank you for joining us. chinai expects sales in to double in the next 3-5 years even amid the broader economic slowdown. our china correspondent spoke to the ceo. what did he say? ceo ats speaking to the their annual exhibition in china in shanghai. this is where their highest-paid clients can attend. he says that despite the broader economic slowdown in china, it is an feeling it. he's expecting sales to double for -- from the coming years. there are some factors. you have the chinese government trying to encourage that home spending, a weaker yen prevented more trouble about -- a broad.

the bulgari ceo did say that despite the fall in sales in the hong kong region, that was more than offset by more mainland spending at home. that over theic long-term, hong kong can regain its status as a luxury destination. take a listen to what else he had to say. bukhari, inomes to didn't, part is loosely related to what you said. and chinese buy in china less are buying out of china. there has been a repatriation of some investments in china. in so far, we have never gotten such a strong demand in china. , we are speaking in september. we are already well above the full year last year. >> the protests have weighed on

luxury sales in the region. september and august sales fell. how is bulgari being affected? >> we have been equal to the second one, the first one in terms of growth rate. what is happening in hong kong has been set -- offset by growth in china. that is good news. we like the idea of clients buying locally. the strength of the brand is not so much in retail. much more in selling to your clients, whether it's -- we firmly believe that. come, canrs to probably double its potential when it comes to bukhari jewelry shells. >> in addition to the nba, you have seen luxury country -- companies come under fire in china. tiffany's for seemingly political ad. but for including a mass

didn't have taiwan as part of china. what is your reaction on the situation? beenr us, china has never a question or issue of discussion. , as a rule, considers bulgari is unique. our ceo is in china. our organization is very clear. mirroring a respected chinese sovereignty. >> given your heavy supply chain dominated in europe, are you impacted at all by the u.s. china tariffs or the usb you tariffs -- u.s. eu tariffs? >> we have been impacted by the trade war. it will be better for the world that it finishes. know, long-term, you

have never been successful countries. haveow that open markets ever been positive to the global economic >>. >>there is still this large population of upper-middle-class chinese were mostly single children that are graduating from university, getting their first jobs, that have a large chunk of discretionary spending. they are considering opening more stores outside of beijing and shanghai. citieseing 5-10 of are with a don't have a presence yet. they are hoping to open more in the coming years. shery: our china correspondent. thank you so much. if you are away from a screen, you can find us on bloomberg radio. now broadcasting live from our brand-new studio in hong kong.

this is bloomberg. ♪

shery: this is daybreak asia. i'm shery ahn in new york. let's get a quick check of the latest business flash headlines. softbank is planning to take a write-down of $5 billion to reflect a plunge in the value of some of its biggest holdings, according to people close to the move. the parents of the $100 billion vision fund will mark the write-down when it announces second-quarter earnings on november 6. the move is being driven by the vision funds holdings in huber and we were parent. profit ofd-quarter peng on insurance jumped thanks to higher investment returns and banking income. china's largest insurer reported

net income of $4.5 billion with operating profit also jumping more than 20% in the first nine months of the year. it has been focusing on selling higher value products to wider margins. shery: to of kkr's lending business in india is leaving the company amid a prolonged upheaval in the country's debt market. the ceo of kkr india financial arvices will be replaced by man who has kkr's india unit. the debt market has been in a prolonged freeze after a string of shadow funds defaulted in the last year. paul: hsbc is embarking on a fresh round of job cuts targeting hundreds of employees in the middle east, north africa, in turkey. we're told the global banking units maker the brunt of the reductions. employees are 4% of its

total workforce in that region. shery: the uber ceo says india will be key in its drive to push the company to profitability. uber lost more than $5 billion in the second quarter. the stock has fallen more than 25% since its ipo. india is a massive, untapped market. huber can demonstrate rapid growth. this week, huber unveiled a featured service to the public has persistent system. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers, go to your terminal. it is available on mobile in the bloomberg anywhere app. you can customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪

shery: this is daybreak asia. paul: i'm paul allen in sydney. intel is bullish on chip demand even in the face of the trade war. it beat estimates for both revenue and profit and gave an unbeaten forecast for the fourth quarter. joining us now is the ceo from intel's headquarters in the santa clara, california. thank you for joining us today. you were saying before we began

that this is the best quarter in intel's 51 year history. this is a climate where there is trade war difficulties, signs of strain in other parts of the industry. how have you done it? is it sustainable? yeah, we delivered $19.2 billion in revenue. the best quarter in the company's 51 year history. we saw a really good momentum almost across the board. it was a record for our data center business. it was a record for our memory business. it was a record for iot business. it was a record for mobile light business. for the course of the quarter, we saw a real good strength. strength in her outlook for the fourth quarter that had us raise our for your outlook on both the top, bottom line, and cash flows. your shares did seem

pretty decent after-hours. ceo's never like to comment on share price. intel has been underperforming the broader index. why do you think investors aren't on board with the store you are telling? >> i think we are focused on delivering for our customers. believe,is will be, we the fourth year in a row that we've had record performance for the company. they've got really good momentum across the entirety of our business. we are confident in the plans, the multi-your plans we laid out for investors a few months back. we are investing behind those plans. shery: how much will the $20 billion buyback shares help in telling your story? >> i think what it is, we did our board offering an additional $20 billion for share repurchases.

for us, it's a confidence sign. we look at our multi-your plan. we feel good about where we are. we are building good momentum. more and more intel technology going into them. we feel confident. the increased buyback is a sign of that confidence that we have in that multi-year growth plan. shery: how much of the momentum you are seeing now is coming from stockpiling by some of your customers ahead of those terrorist hikes we are seeing on chinese -- terrorists hikes we're seeing? >> we outperformed by about $1.2 billion in the quarter. we expect about 200 million of from the fourth quarter in light of the anxiety about availabilities. not a whole lot of it. some of it. despite that, we did take our

fourth-quarter outlook as well. just want to talk about what you are doing with the competition. we have amd advanced micro devices trying to ease into your server process. micron is going to be competing with you on a of data center hard drives. what is your strategy for dealing with that? that weok at the market are serving, which is roughly $300 billion. it's the largest market in the company's history. it's really driven by our belief that this insatiable appetite for data, whether it's consumers enterprises, needs more and storage, and faster and faster movement of data. it is that demand that is driving the need for high

performance compute which we consider our sweet spot. that's really what resulted in a strong quarter and our strong outlook. we realize that our customers have options. with those options, our commitment to them is that they can count on us to continue to deliver high performance, differentiated compute to solve the problems and challenges that they are wrestling with. until we feel good about where we are, the market we are serving is as large as it's ever been. we are delivering more and more technology into more and more devices. paul: back in june, you said you were reviewing your supply chain. this was in the context of the trade to peace -- disputes. i'm wondering if you could share any insights from that review. are you making any changes? >> for our customer base, we have china as a large market for us in terms of customers for

china consumption. also for global oems that have more of their assembly and test operations in china. -- ine are saying, it light of the debate around tariffs, we are trying to work with our customers to ensure that they can get their product most effectively by leveraging our global supply chain to diminish the impact that tariffs could have on their supply for global markets. we have a wonderful global supply chain. we work closely with our customers to deal with the dynamics we are wrestling with. we are encouraged that china and u.s. are talking. we are strong believer in global trade. we don't find tariffs to be a constructive mechanism for global trade. we are very encouraged that the two sides are back at the table. in the meantime, we will leverage our global supply chain

competencies to mitigate impact on our customers around the world. shery: what are your shipments to wally looking like? they have been blacklisted by the u.s.. >> we don't really get into talking about specific customer demand. huawei has been an important partner and customer of ours over the years. see them to be an important customer going forward. at the same time, we have to adjust and adapt to the laws and markets in which we serve. we will continue to serve them to the extent we are allowed to. shery: are you getting those temporary waivers and licenses to supply to wally at the moment? industry, the semiconductor industry, and intel, we have put applications and to get licenses. we have not heard back yet. we hope to hear sometime soon. we have not heard back yet.

shery: thank you so much for your time today. that was the intel ceo from santa clara, california. congratulations. two u.s. senators saying the popular video app tictoc may be a national security threat and should be investigated. tictoc is owned by the chinese company by dance and has been downloaded over 110 million times in the u.s.. asia technology reporter joins us now from hong kong. why are senators saying that tictoc is a particular threat here? >> on the face of it, it looks like a fun video app that people are uploading funny videos on. it's anreak it down, artificial intelligence company. they're collecting all sorts of information on the people who are using it, such as their location, their habits, their ages. all sorts of different types of information. if it got into the wrong hands,

senators are worried the pose a threat to national security. are there any other ways that an app like to talk could pose a threat to the euro -- to national security? >> the data gathering is their first concerns. there are other concerns they brought up. including perhaps censoring content on the app. there has been suggestions that tictoc has censored videos related to the hong kong protest and other politically sensitive issues for china. tiktok in gauging in some sort of disinformation campaign. they are worried that china could use it to do a similar thing that russia did ahead of the 2016 u.s. presidential election. shery: we have seen 110 million

downloads of the app in the u.s.. any signs that the appeal could be waning anytime soon? >> for the first time ever, we have seen a decline in growth for installs. the amount of people who are downloading the app for the first time. that is pretty interesting. is that because people are downloading it less around the world? is it because they are spending less to advertise and get that in organic growth? are there competitive factors? it is something to keep an eye on for the future. shery: thank you so much. let's get a preview of what to watch in markets later this morning. sophie: we are watching reporting aewing 24% drop in quarterly profit, raising alarms over slowing chinese consumer demand. nota's pension fund has told any shares in the lender as of october 31.

results are due today. expectations of a sharp volume recovery in the near term. we will get more chinese automaker results threat the coming week. sales pressure will continue throughout 2019 as consumers have already pulled their car purchases forward. shery: that's it from daybreak asia. our markets coverage continues as we look ahead to the start of trading. paul: stand by for bloomberg markets the china open, coming up next. this is bloomberg. ♪

9:00 a.m. in beijing. i am tom mackenzie. >> we are counting down to the open of trade here in hong kong. let's get to your top stories this friday. we are talking earnings, the excitement surrounding the parade edging markets higher in the asia-pacific. bubbles in some places. first asia-pacific results. a messagepence sends of support to hong kong .rotesters david: banking