how do we explain tsmc defying gravity?it is certainly causing investors to breathe a sigh of relief. it is seen as a bellwether for the global tech economy. it has major tech bunnies as its clients. it is also the world's largest manufacturer. the first half of the year was difficult for this company, the worst performance since 2011, hampered by the trade war and geopolitical issues. thought what they were expecting, which was a bit of a bottoming out and we are seeing a revival. part of that is that tsmc has continued to sell and work with huawei. part of that is because they are not really being hampered by u.s. trade restrictions, though they did get that indirect impact from the overall dampening of demand in the smartphone industry, but geopolitical risks remain a key concern for the company, especially with the japan-south korea dispute continuing right now. we heard from the chairman that that is the key uncertainty for the company. it is so uncertain, that they cannot even pinpoint what products will be impacted t

we had chipmakers gaining ground, some positive outlook numbers for tsmc, which is an apple supplier.had a boost from geopolitical news with the word out that iran had offered a substantial deal to the u.s. that boosted equity markets, but then later had news that the u.s. shot down an iranian drone, so that tempers gains. 0.3% at theing moment. let's see how we are setting up for asia. sophie: a mixed start with kiwi shares weaker. inures pointing higher seoul, korea in sydney on earnings prospects. gains in tokyo to wrap up a tough stretch into sunday selections in japan. a ramp up in volatility for the nikkei 225. looking for support after a two-day drop with calls for fiscal stimulus after the surprise rate cut. the aussie holding onto gains on bets the central bank will hold off. it continues to benefit from diversions, and the offshore yuan folding onto gains. the yen near at three week high as geopolitics fuel it. shery ahn: thank you. let's check in on first word news now. >> thanks. relations between the u.s. and iran have and further strained by the seizure of a tanker in th

defyinge explain tsmc gravity? investors toing breathe a sigh of relief.r the global tech economy. it is the world's largest contract manufacturer. the first half of the year was difficult for this company, the worst performance since 2011, hampered by the trade war and geopolitical issues. ing outs got a bottom and we are seeing a revival. tsmc has continued to sell and work with huawei because they are not hampered by u.s. trade restrictions, though they did get that dampening of demand in the smartphone industry, but geopolitical risks remain a key concern for the company, especially with the japan-south korea dispute. we heard from the chairman that is the key uncertainty for the company and they can't pinpoint what products will be impacted the rest of the year. emily: given the geopolitical issues between the u.s. and china, japan and south korea, how is that impacting the regulatory situation? what is the position that the chinese government? >> it has been an interesting contrast. in the u.s., we are seeing antitrust issues, concerns tech companies

tsmc, down 1%.f the biggest drops in the asian region but the chip stock had a significant run with earnings by texas instruments. tsmc talking about lifting the capex. 10%,lifting the mood, up the most since 2014 on the earnings beat. this is bloomberg. ♪ paul: 10:29 a.m. in hong kong, 12:29 in sydney. time paul allen. the european central bank has centered strongest signal that stimulus will be stepped up with lower interest rates and renewed asset purchases on the agenda. eurozone inflation remains far from the bank's goal and recession clouds are gathering. the new governor of the bank of turkey deliver the country's biggest rate cut in 17 years, slashing are in costs by 425 basis points. japan is weighing a new trade weapon against south korea as the staff persons. wednesday is the deadline for a decision on whether to remove seoul from its white list. it would curb the chip meant -- shipment of hundreds of products. the u.s. is urging both sides to cool down. spacex has successfully launched i

also in the spotlight today, tsmc with analysts respecting -- analysts expecting signs of a revival after dismal first-half. paul: thanks very much. iran offering a grim outlook for any chance of opening new nuclear talks with president trump. the foreign minister has told bloomberg the u.s. shot itself in the foot by pulling out of the nuclear accord. he also accused european countries of failing to carry out their own commitments under that 2015 deal. we spoke to john mickelthwait in new york. is an agreement, a multilateral agreement, and no multilateral agreement can be implement it unilaterally. everyone has to chip in. europeans believed this was important for their security. if it is important for your security, you invest in your security. you don't just get security by praying for it. you must invest. you must do what is necessary and europeans need to take the necessary action. the united states has basically, in my view, shot itself in the from thisthdrawing agreement -- john: what is the necessary action europeans need to take? do you want them to buy the oil on credit? >> it

then, you know, this continuing narrative out of the semiconductor companies like we heard out of tsmc, where things aren't getting worse things have been adjusted a little bit for supply chains and for huawei, but things look to be getting a little bit better from here. >> okay. now, let's bring in synovus trust portfolio manager, dan morgan dan, that was a set-up to what i consider to be a deeper question for investors here we're in such an unusual period, take microsoft for example when you get these big cloud and 5g transitions, often the big stocks don't make a really big move microsoft has managed to do that so if you're an investor, how do you find the next microsoft, maybe a big stock that has got a lot of potential still >> well, jon, you know, just kind of taking from the earlier discussion, i wanted expect those microsoft numbers to roll into the amazon report that's going to be coming out on friday we know that the infrastructure has a service cloud space that's very strong. i think we're looking for aws at about 8.5 billion, about a 40% increase we know that commercial clo

some breaking news, tsmc second-quarter net income coming andt 66.77 billion there, the estimate was, so a little bit of a beat on second-quarter income, the red headline on the bloomberg now. sales dropped for the most in eight years, but third-quarter guidance is likely to be strong. we are waiting for the guidance, the key line. second-quarter operating profit, 76.3 billion, estimated 77.35, so a miss there. manus, you're looking at richemont? manus: i am, indeed. some of the household brands, dunhill,hloe, alfred very much the luxury market. sales increased 12% on actual exchange rate basis, and 9% on comparable exchange basis. double-digit growth in japan and asia-pacific, notably mainland china. reflecting the burberry story, high single digit growth in the americas, double-digit in japan and asia-pacific, notably in china. when it comes to the americas, high single-digit growth. this is where it begins to sting. in europe, the middle east and strong decreases among comparatives. a slight growth in specialist watchmakers, which reminds me, i have to pick up a couple of watches

tsmc in taipei having its best session in two months and flowing into the japanese chipmakers. sydney, ross mcewan, trying to turn that bank around. at one of thek other major banks in australia. juliette saly in singapore thank you so much. equity markets got a tailwind on dovish comments from richard clarida and new york fed president john williams. the comments arrived before the blackout period before the next meeting. williams said it is important to take preventive measures than wait for disaster. it moved market expectations closer to a 50 basis point cut this month. richard clarida said, you do not need to wait until things get so bad to have dramatic rate cuts. it adds more fuel to easing money markets, pricing in 41 basis points in july. this relates to the 35 basis points after a new york spokeswoman took the unusual -- she says these were on an academic speech on 20 years of research. asking, will the fed take a small step or a giant leap this july? reach out to us and the mliv team on your bloomberg. ,oining me now, michael sneyd global head fx strategy & cross ass

i would believe them more than tsmc who doesn't have end customer visibility the way aero does i could name a host of companies that are saying the sanch. so same thing our call continues to be that all the risk is in two areas in the market now it's in defensive areas, bond proxies, and it's in high quality. that includes growth it's really high quality we have a lot of names in there. our fresh money buy list, our focus list has outperformed dramatically over the last 12 to 18 months by 12 basis points because we've been overfocusing in those areas i'm nervous because those are the risks that are the greatest. we have to go through the course of that. people are overpaying for that defensiveness. i think that's where the risk is in the markets >> mike, aero has been getting a lot of play this week. people have been talking about it a lot how much of that is the inventory carryforward or the demand carryforward in advance of tariffs, things happening at the end of the fourth quarter into the first quarter because of china couldn't that easily reverse inventories, which are projected t

we also had tsmc out of asia. are you feeling -- how are you feeling about chip stocks?you mentioned a number of earnings releases that were quite positive. .ne we honed on was asml it's a chip manufacturing stock. it makes the machines that produce the chips. they started to guide positively. you are seeing an increase in the orders that make the chips, they must be confident on the supply and demand balance looking forward. that justifies a more you towards the -- view towards the chip companies themselves such as my crime. -- micron. nejra: this fits with our discussion earlier in terms of trade. tout u. and china. in terms of the japan korea spat, i'm sure you've got great insight on this. do you see that posing a lot of risk to tech companies globally? riskdon't see it as a real , globally. i see it as a risk to japan. the logic that we see there is that, if you look at the past when you had china which started to clamp down supplofearth matew was japan starting to diversify and look for other sources. when it comes to this supply of specialty chemicals from the jap

microsoft follows on thursday along with apple manufacturer tsmc, which will give us more insight onting supply chains around the world. for now, let's get a preview for the market later this morning. sophie? chinesethe nerves of stock investors will be put to the test with chinese data dump and new tech support listings that may drain liquidity. to thes are also adding picture which saw the shanghai composite cap its worst week on friday in two months. we are data deluge expecting from china on out, retail sales, and gdp, which is expected to show the slowest growth for three decades and china, indicating the economy is struggling to stabilize. that made bolster the case for policymakers to boost to millis. heads up for aussie bond -- to boost stimulus. 400 million aussie worth of 2041 notes to be sold at 9:00 a.m. hong kong time. recent issuance has been focused on the 10 year sector. that could be a signal of investor demand for the longer tenure. it from daybreak asia, where market coverage continues as we look ahead to the start of trade in hong kong, shanghai, and schengen paul

they have companies like tsmc that they want to supply.l have to choose, do we go with samsung companies say, and taiwan. that is a decision they have to make and it does not work out well for the south koreans. shery: thank you for that. now the world's largest supplier of consumer goods is the latest to sound the alarm on the damage the trade war is doing to global supply chains. goodsupply and transports for walmart and nike. of its revenue comes from the u.s.. the supply chain extends across asia but it sources most goods from china at a time when it has to resent pushing for production to be shifted elsewhere. theceo told us he sees disruption underway regardless of whether a trade deal is reached. months,e last 12 to 18 the world has been experiencing a lot of changes. sometimes even on a weekly basis. as a result, that disrupts the trade flow, the global supply chains for our customers especially the u.s. based customers. the u.s. trade, the trading corridor is being disrupted whether there is a deal or not, whether there is tariffs