tv Bloomberg Daybreak Australia Bloomberg July 31, 2018 6:00pm-7:00pm EDT
which could save you hundreds of dollars a year. plus, get $150 dollars when you bring in your own phone. its a new kind of network designed to save you money. click, call or visit a store today. haidi: u.s. stocks advance as renewed optimism lifted text in recovery. oil sank and the dollar gained. >> apple was among the winners, the stock rising in late trade as demand for high-end phones remains strong. services also payoff. commodities rebound may give rio tinto a boost later. we expected strongest interim profits since 2014.
>> sources say the us and china are discussing how to reengage and reboot stalled trade negotiations. is just that's 8:00 a.m. in sydney. this is "bloomberg daybreak: australia." 6:00 p.m.it just past here in new york. over the next hour we will look at how the action on wall street will play into your asia-pacific trading day. before we get into that, we do have breaking news crossing bloomberg terminal here. incident, perry and aircraft with at least 100 inple on board has crashed the state of durango in northern mexico. this happened shortly after takeoff. there's no information as yet as to any the tallies, but according to one official, multiple people were injured after this happened, along with an emergency landing there. we will get more headlines out of this as it crosses, but right now and carol mexico plane has
crashed in durango in mexico. meantime let's get a check and reminder on how u.s. stocks ended the day. we did see a rebound after three days of losses, in large part due to check. look at the nasdaq right there, rebounding up by little more than .5%. what is registering is what happened with apple, because finally a lot of tech watchers will be saying i'm a finally one of the fangs was able to post an earnings beat, and this happening through the lens of --ebook, twitter, and nick netflix, all losing after posting the earnings only, trying to hang on to slim gains -- after posting earnings early. folks are pulling out of the bond markets, u.s. 10 year yield 2.96%. especially with what happened
with that extended dovishness out of the bank of japan yesterday. haidi: the bank of japan may have been the big event of the start of this week, but were not exactly sure, as we get into the middle and second half of this week. we will talk about the fed later but also today were looking ahead toward the bank of india decision there, pretty much expect it to raise by about another 25 basis points to contain inflation in the economy and also looking for the central bank in brazil as well later on this week. we're looking molly positive in terms of the equity open in this part of the world. trade in new zealand just getting underway, looking flat in the morning for kiwi stocks. we had a broadly higher bloomberg dollar index overnight and the yen was the biggest loser in the g10 space. sydney futures looking positive, rio tinto the one to watch as we get earnings later this afternoon, looking at the strongest interim profits since 2014.
that commodities recovery paying playing a large part in that. light is they of trade standout between china and the u.s., reports of possible negotiations being restarted imminently. let's get a quick check on commodities, and the report card as we round out the month. we had the longest losing streak when it comes to gold since 2013 , a fourth monthly decline for the precious metal. volatility the lowest since january, the strong u.s. dollar a key theme. not so great for oil, crude fell overnight. with all the biggest monthly loss since july 2016 with concerns of weaker demand with a trade war. key opec producers looking like they're upping output. a reminder of how the bloomberg commodities index has been faring, a pretty flat session
but it has been a roller coaster ride so far. ramy: let's get into the tech space, but before we do that, baidu has just come out with second-quarter revenue coming in at $3.93 billion. this is that bp the estimate was for $3.75 billion. we are still waiting for further lines to drop. , $3.18quarter profit versus an estimated $2.43, so upbeat both on the revenue as well as operating profit side. baidu rising just had, by about .3%. as get right to our very top story, apple shares jumping in extended trade after third-quarter earnings came out. the iphone maker be on revenue and had strong guidance for the current quarter as well. apple a sunny outlook for pretty much every way you look
at it. emily: tech investors are breathing a sigh of relief right now. the revenue beat, they also reported a strong forecast for the current quarter. strong services revenue, strong revenue in the other category which includes the apple watch and the light. the one thing that was not positive when you look at the iphone numbers, they still miss. analysts had expected close to 41.6 million in the quarter so they only sold about 1% more iphones this order year-over-year and they were looking for a 2% increase. this quarter is always a little bit slower because people are holding out for the iphones in the current quarter. its whenmake up for you come to average selling price of the iphone in that was much higher than expected. so there selling more of the higher-priced iphones like the iphone x. tim cook once again said that the iphone x is the most popular
iphone this quarter. the most important thing we heard from him came to tariffs. we know the u.s. and china are on the brink of possibly a full-blown trade war. the bloomberg is reporting that talks could resume, but we haven't heard a lot from tim cook and apple on the subject and it could affect them greatly , given that all of apple's products are assembled in china. this and what tim cook said on the call about tariffs. look at those three tariffs, none of our products were directly affected by the tariffs. terror whichurth includes goods valued at $200 fourth tariffs also focused on goods imported from china. probably like everyone else, we are evaluating that one in will be sharing our views with the administration at some point.
emily: apple has a lot at stake here and some of its products might fall into some of the categories in question, so it's something investors are going to be watching very closely. overall, a strong report from apple and a good reaction from the market. haidi: and wearables were a highlight this order. emily: interesting, the wearables category up 37% when it comes to revenue, including ,he apple watch and air pod which often you cannot even get because they are out of stock. it's been sort of a sleeper hit for apple. tim cook did talk extensively about the other products on the call. take a listen to what he had to say. >> our third highlight of the core is the outstanding result in wearables which comprises , and beats, air pod and was up over 60% year over year with growth accelerating
for the march quarter. wearables revenue exceeded $10 billion over the last four quarters, a truly remarkable a competent for a set of products that has only been on the market for a few years. emily: so wearables up 60%, as he said. the other products category overall as well as hartsock apple tv and apple pay -- as well as apple tv. one product that did not perform well was the mac, the worst performance since 2010. customers are not necessarily by. -- not buying. much withnk you so the rapid those apple earnings. , andome analysis outperform rating on apple with
the $210 price target. that given the context, what happened and what it means for a tech names, these numbers are fairly impressive. the services business remains secondly, itand suggests expect a good product launch this fall and don't quite see the invocations from terra issues impacting the guidance at this time. haidi: should investors be concerned about the weakness we saw in iphone sales? >> to some degree, yes. june is always a soft quarter and when iphone units are up 1%, they did draw down 3.5 million units of inventory.
sellthrough is better than the numbers reported. ramy: i want to hop into the bloomberg terminal and show you and our viewers what were talking about in terms of iphone revenue. 55% is apparently what the iphone revenue is coming in at, 31% you said you saw growth for services. do you think 31% is sustainable? >> the target doubles the 16 toss from fiscal fiscal 20. has beene number accelerating to the upside. if you look at the breakdown of the 30% growth they have, we think roughly 20% is from incremental monetization of the installed base.
about 10% vat is really from increasing the installed base over time. i think two thirds of this is incremental monetization, which should be sustainable for them. ramy: apple sees fourth-quarter revenue of $262 billion. even know it's better than expected, it's not quite a blowout. >> it is incrementally better than expected. the fear was if you have a bigger disappointment given what you see with some of the other tech names. i would say that context of apprehension with a big disappointment, a modestly better print is very solid, especially given the brewing china trade war concerns that you have. ramy: we will leave it there, thank you so much. let's get the first word news with jessica summers.
jessica: when work has learned the u.s. and china have been in to to restart talks divert a full-blown trade war. sources tell us representatives chinese mnuchin and the premier have held private discussions as they look for ways to reengage and lower steadily rising tensions. the next wave of u.s. tariffs may hit as early as wednesday. u.s. and mexico are said to be close to a deal on cars. one of the biggest sticking points is overhauling nafta. were told the two sides exchanged new proposals and more talks are scheduled in washington on thursday. two months ago, mexico said it could be flexible after the u.s. demanded at least 40% of a vehicle be made by workers earning $16 an hour. says it's identified a coordinated campaign to influence november's midterm elections.
says it deleted at least 32 pages and accounts on facebook and instagram. the company has been working with the fbi to investigate activity and says it does not yet know who is behind the accounts. the los angeles district attorney's office says it won't prosecutors les moonves for alleged sex crimes because too much time has elapsed. said thetified woman first incident happened in july 1986 and that there were two more on new year's day 1988. prosecutors decided the stature limitations had expired on the three alleged incident. 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. still ahead, a recovery in commodity prices may send
ramy: welcome back. haidi: you're watching "bloomberg daybreak: australia." just getting an update on the aero mexico flight. most passengers left on foot. no report yet of any for tallies in that -- of any fatalities according to officials there. the durango government saying there were no deaths in the crash. we will get you more details on the incident as they become available. let's get more reaction on all the central bank activity going
on this week. os, he used in dino k to work at the new york fed, so well-placed to give us some insight into what policymakers are thinking at the moment. trade war,about this potential trade tensions and how it weighs on monetary policy. how can the fed way up these uncertainties as a deliberate this month and next month when were expected to see another hike? dino: there isn't much they can do about the trade tensions himself. but they will be interested in doing is to assess the impact it might have on economic growth or inflation. what you are seeing already in the earnings reports of a number of companies, there talking about inflationary pressures, margin compression. the risk is there will be passed through into inflation.
that will maintain pressure on the fed to continue along the path they are of gradually increasing -- tightening monetary policy. ramy: when we get the statement out tomorrow, what is the best expectation? something in the statement. dino: i don't think we will get a whole lot in the statement. i think it will be pretty much steady as she goes. it will get the market attention because the fed will want to downplay the meeting and kind of prep themselves for september. it's clear they want to tighten two more times this year, that's in the commentary they've given. i don't think the statement will be interesting. what might be interesting is the meeting itself that will have to wait five years for the transcript to come out. there's two things they might talk about, the impact of fiscal policy, that may or may not make
it into the statement. the other thing is that the administration has lobbed a couple of shots over the bow in terms of what they want the fed to do. the president has tweeted a couple of times about the fed and they got to be thinking about how to position themselves for the pressures that may come from the administration. that may be the most interesting thing that happens at the meeting. "the we won't really know about that until the transcripts come out five years from now. the start of talks about thes, we've got the gdp for second quarter, four point 1%, the best in a couple of years. to what degree do you think this is ammunition to try to be more aggressive in the fed rate hike path? expecting tore more -- two more this year. unlike what some people
have said, there have been times in the last the years where we had for an even 5% france -- prints. there was a contraction from gdp youuse of and it will drive it gives the fed the ammunition to stay on its present course. it's pretty much there with what the consensus is, something in maybe.h 2's that will just support them staying where they are, so look for tightening in september and another one in december. it's zero for the first time in a decade. it's been negative for the last 10 years. we are about to cross over into positive territory, so yes, monetary policy is going to be tighter, but overall it's still
pretty loose. copies can still borrow money pretty freely. tore is still ammunition keep going a little bit longer, but there are constraints we're facing up against and at some point we will run out of the capacity to grow. in ouri want to bring central-bank watcher, kathleen hays, in tokyo, looking at the aftermath of the bank of japan press conference. it was seen as something of a sigh of relief to see the reaction across by markets and also the yen. kathleen: actually people felt, and the governor did his best to underscore at the dresser afterwards that the tweak in will curve control policy allow the boj to keep its full stimulus going even longer.
he specifically mentioned the government bond market and the fact that liquidity has been drying up. the question i want to ask about clear-cut where the boj ultimately goes. he sees the range for the tenure doubling. is this a wind down the road for the boj to just let the market when it needs to push yields up, .2, without proclaiming the end of monetary stimulus? dino: that would make a lot of sense, so i would tend to think they will gradually allow the 10 .ear yield more flexibility but it some point, there's another issue, negative interest
rates. they did tweak some things where fewer banks are going to be subject to negative interest rates with their regime, but at some point they will have to move away from negative interest rates. of course they have kind of hung that on what happens to inflation. it kind of means they are stuck and he states his policy framework on getting inflation to 2%. until they do that, it's kind of hard to see there's something meaningful, which is that you get both the teen year yield having the kind of move your suggesting and also moving away from negative rates. so will probably be stuck in this kind of regime with minor tweaks over who knows, the next several quarters at least. on this issue of the 2% inflation target, they will cut their inflation expectations for
next your and the subsequent year as well. they are not the only central-bank globally as having an existential head scratching moment about where is wage growth. if most other economic indicators pointing to the japanese economy are looking healthy, should they consider abandoning the inflation target is something that have had their policy to? dino: let's ask ourselves a question, why is to present the target in just about every country that we talk about? even know potential growth rates differ from country to country, why is it that 2% may or may not be the right number for the u.s. , but why is it in japan which ,s had more inertia on prices and which has a decreasing population and a shrinking workforce and the like? why is 2% the right number for them? you can look at those factors newmaybe come up with a
conclusion that 2% is not the right number. maybe it should be 1%. the former governor has pointed out more than once, even at the top of the bubble in 1989, japan did not achieve 2% inflation. so it may just be the nature of that economy which keeps inflation pretty sticky, close to 1% or below. i want to get your thoughts on something president donald trump has just said. he is in tampa, florida, talking about workforce development. saying the economy is going to do even better next year. we are seeing live pictures here out of florida. will the economy do even better next quarter? dino: next quarter, or next year? ramy: next quarter. dino: as possible. there's a lot of stimulus in the pipeline.
have the big spending bill in january, we had the tax cut in december. some of that probably still has to feed through in terms of investment plans. it's certainly possible. i would tend to think there will be some reverses, but it would be a pretty good quarter, one that people will be happy with. ramy: when will be start to end in terms of growth? 2019,i was going to say but fiscal policy is kind of push things out a little bit. 2020 macklemore the time to look for the economy to begin to go into a normal cyclical swing, which would mean having sort of a downturn. nothing wrong with that, that's what happens with cycles. ramy: thank you very much, we will leave it there dino kos and kathleen hays in tokyo.
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♪ markets open in just about 90 minutes in sydney. futures looking positive, 0.3% higher in the sydney opener. u.s. stocks rallying, tech lightg a comeback, a shining through. haidi: definitely -- some relieftely there. you are watching daybreak australia. let's get the first word news. forecast sales that would top estimates.
continuing demand for iphones and wearable devices. it expects fourth-quarter revenue to be as much as $62 billion. analysts had been looking at $59 billion. the stock gained more than 10% this year. apple is moving closer to having a trillion dollar market value. china is signaling it will focus it facesting growth as risks from a leveraging campaign and the simmering trade war with the u.s. there was a communique after a meeting of senior figures. they will continue to measure pace. policy will be improved this year to be more forward-looking, flexible and effective. china plans to make it easier for foreign buyers to take stakes in companies listed on domestic exchanges. this may address complaints that it's markets are too closed. the ministry of commerce is d totening the lockout perio
three years. -- to one year from three. the national basketball association is betting on mgm. the league is forming a tie up that will make the casino operator a gambling partner. the deal is worth $25 million. mgm will be able to use official nba and wnba logos and trademarks and it will have access to data streams to create in-game betting. the pixar sequel "incredible's worldwide billion in ticket sales. the movie reached the number about six weeks of -- after debuting. and follows "black panther" "avengers: infinity war" in reaching $1 billion this year.
more than 2700 journalists and analysts, this is bloomberg. haidi: let's get you an update on the markets. ,rading gets underway in asia trading in new zealand is getting underway. a flat session there when it comes to the kiwi stocks. kiwi dollar 68.1 seven. broad dollar strength overnight. sydney futures looking like we will see positivity going into the open. tinto, earnings expected to be positive this afternoon. the aussie dollar seeing support. a trade detente on the way between washington and beijing. let's more -- let's get more from adam. we saw a rebound in tech stocks after the three-day selloff. is this a meaningful recovery?
>> i think it is hard to know what this point. there are a number of indicators pointing to something more than a dead cat bounce. there is an underlying recovery here we could have. one of those is, we have decent numbers from apple overnight. being a market leader in the sector, we will be looking at the asian chip makers that should do well off the back of that. that might lay a bit of a foundation for some stabilization here. at this chart. it shows the extent of the rundown we had in tech stocks recently. they have been under pressure. we started to take up, but these are some of the solid momentum names that have been driving the bull market in u.s. stocks. the concerns around whether to much of that gross in earnings are priced into the stoxx is one of the reasons why they have sold off so significantly, most
notably facebook last week. lofty expectations can still push the stock price higher. going into the apple numbers, people had high expectations. we had a bounce in after-hours trading, a lifting and nasdaq futures. for sometting up stability and some signs of a decent rebound in tech. ramy: apple looks to set a fresh record high on wednesday, and it brings the question of whether it will hit the $1 trillion market cap. do think the stock can get their? -- do you think the stock can get there? >> apple got up to 4% in post-market trading and that gets it into the market cap billion dollars,
$970 billion. that gets closer to the $1 trillion marked, which has been talked about. for the u.s.estone equity market as a whole. there is a slight nuance in the calculation of the number of outstanding shares that are relative to the share price in terms of when we get to the $1 trillion mark. the magic number is $206.47 based on the latest reading of the number of outstanding shares . we are trading at about $197 in after-hours trading so we have a bit further to go, but it is not out of the realm of possibility. ramy: exciting for apple investors. adam, thank you very much. don't forget to check our gtb library for the charts you just go on the bloomberg terminal. let's bring in eric, a managing partner and chairman of rebel
.ouse previously he was ceo of the huffington post and a special partner at softbank capital. $1 trillion. you think it will get their? >> in the next few days. they have had a stunning quarter and the momentum will carry on. the next quarter is the one where they traditionally unveil new products and iphones, so that is a nice bridge towards those announcements. ramy: i want to show you and our viewers, iphone year on year revenue growth. we can see it beat expectations. we were expecting 15.2% and it hit 20%. they didn't sell as many iphones. that said, maybe it didn't matter. >> it didn't matter because the surprise is the average selling to 700 andhot up what ever the number is. mostly on the basis of the strong sales of the top line, the iphone x, which many
analysts said is too expensive at $1000 or more. it appears to be picking up steam. i think the numbers were tempered by the fact that they drew down their inventory. if they didn't do that, they would be a year-to-year increase in sales of the actual devices. haidi: do you think the downsides will come from the trade tensions are still to come, given that there is concern over the potential impact of global supply chains in this part of the world? >> that would be a big concern. issue with the trade wars is not so much the tariffs, which are bad by themselves, but the disruption in the supply chain. apple, like most tech companies, sophisticated and dependent on the vast network of different suppliers, most of which are in asia. if we go to war with china on trade or other countries, the
disruption would be very difficult for them to replace that sophistication. haidi: what did you make of the thing we saw in wearables, 60% year on year growth, particularly when it comes to the apple watch? when it was released, it was seen as an apple aficionado type product. is that segment looking encouraging? >> it is. i love my apple watch. i have had it from almost the beginning. this might have been a product that was ahead of its time. the version 3,n 4, 5 of the operating system and it is easier to use. there are more features. it is a more useful device. i think sales will pick up. in that category are also the earphones from beats. a strong category, they do $10
billion in annual sales. they are likely to go up. ramy: i was holding out on the ear pods. but i use them every day. let's expand this beyond apple. lots of folks until now are saying, maybe -- were saying, maybe it is time to go out of tech. let me show you the faang stocks. since facebook reported they are down by about eight .3%, is the argument off the table? >> you have to separate the apple,tocks between microsoft, and amazon, and google and facebook, which are separate categories. facebook is the one that has led the downturn, and twitter as well. mostly because of the trouble with the content. , thessue of fake news issue of people hijacking the platform for their various deeds
, that i think will continue. it will continue to plague lesserk, and google to a degree, but it will definitely not affect apple, microsoft, and the other ones. sorry. ramy: one thing that strikes me is, it is interesting based on what they are offering, whether it is hardware, software, or services. looking ahead on the memory front, it seems like that is the place to go. >> the diversity of the different revenues, the service revenues are going up at least twice the rate of the hardware revenues. yes, i think the diversification of revenues is important to them. these are sticky revenues. once you have a device come a you subscribe to a variety of services and you continue to do this forever. haidi: is the weakness and the malaise over the macbook seasonal?
we had the gap where it didn't quite make it into the new release. is this something that is going to stick for apple? >> it is hard to say. i think it is not a hard product , computers and laptops by themselves. most of the developing world has never used a computer and will never use a computer. so it is essentially a replacement product, and that market has been saturated in the developing nations because, particularly the united states for a number of years. haidi: good to have you on, eric. joining us in new york, talking over the tech recovery and the apple earnings. next, sticking with earnings, great expectations ahead of rio tinto's report. will it proved to be the strongest since 2014? this is bloomberg. ♪
♪ i'm in sydney. i am in new york and you are watching daybreak australia. let's turn to after the bell earnings aside from apple. baidu and hyatt hotels are in the spotlight. baidu shares beat estimates on profits. su: it is all about the mobile ads that adjusted profit. that is on the growing amount of revenue, coming from mobile that is affecting the bottom line. the ceo says they are happy with the second quarter earning, coming in strong. ,ales jumped to 26 billion yuan $3.9 billion u.s. the estimates are good news for the internet giant, which has been under pressure due to the steady business.
and a lot of competition. let's go to the big picture chart. the story is about the growth in have thate app they has activation trends, and they are seeing high monetization visit -- potential. they see three quarter coming in 4.03. 2 billion to is positively against the analysts' rankings. of3 and 18 is an estimate $2.43, that came in strong. second quarter active online marketing customers have grown about 9%. the per online marketing --tomer rue about 16%, and grew about 16%. a strong quarter in the makings for baidu.
the shares are trading flat after hours. they have mixed reports. that is a gauge in the hotel , and in terms of the year to date for hyatt hotels, they have had a bumpy ride. but they narrowed the forecast coming forward and that is causing shares to rise moderately but not any big moves after hours. haidi: taking a look at commodities, oil fell on the day and the month. gold, the longest losing streak since 2013. the bears are crushing the bulls on gold. let's go to oil. the story has a lot to do with a stronger dollar. we have a surprise gain in supply, supply data coming out will be the biggest focus wednesday. early indications are that it will be coming in stronger than expected. put those together and this is a very negative outlook for the oil bulls. in terms of the bigger picture
in oil, we were below $69 per barrel. in july, it was a down month. that is part of the trend. if you go to gold, a different story. the longest losing streak in several years. you have to go back to 2013 to see an uglier chart. the picture on gold has a lot to do with the stronger dollar, and the view that there are other ways to safe haven these days than gold. haidi: thank you so much for that. we are getting numbers crossing the bloomberg on new zealand. the unemployment rate, 4.5%, slightly higher than expected for the second quarter. employment change year on year, 4.7%, also higher. the participation rate holding what was in line with expected. the average earnings quarter on 0.02%. number coming out
this comes when we see industrial strikes in new zealand due to discontent over stagnating wage growth. of incentive to move on. let's take a look at earnings this part of the world. rio tinto expected to announce their strongest profit since 2014 today. that is largely due to a rebound in commodity prices. what are we looking for? >> a strong set of numbers for rio tinto. the underlying profit expected 23 .3up on a revenue of billion dollars. high commodity prices, particularly aluminum and copper, expected to patel that -- propel that. rio has been selling copper and gold assets recently.
indonesia, its stake going for $3.5 billion. we will look out for how that cash gets returned. the news on the iron ore front, rio tinto announced it will hit the upper end of the target range for shipments at around 340 million tons for the year. ramy: what are the risks for rio in the second half? is one of its strengths and weaknesses. it is more exposed to the iron ore price rivals. we had a report last week saying seeing the scope slipping below $50 per ton, a drop in demand. we are seeing lower grades being hit. another potential risk area is cost, particularly in aluminum from energy prices. there has been industrial action in canada and south africa. then there is trade.
the trade were between the u.s. and china is something john sebastian is watching. those are some of the potential clouds on the horizon for rio. ramy: paul allen, thank you very much. let's switch gears area bloomberg learned the u.s. and china have been trying to restart stocks to avert a trade war. representatives of stephen mnuchin and the chinese counterpart have held private discussions. the next wave of tariffs may hit as early as wednesday. cut -- joining us now is joe. a game changer? >> these are talks about talks, not actually negotiations. this does give breathing room to pull back from the brink of it. the next round of sanctions could take effect as soon as thereday in the u.s., but
is a bit of flexibility that the administration has to bring this back. the question is also whether or mnuchinsury secretary has the rest of the and ministration in line with this approach to china, to get these talks restarted. there is a number of people in the white house, including the trade representative, who have been taking a firm line with china. perhaps getting restarted would be a good sign, but we have to remember just a few months ago, when there were rounds of talks and the president pulled back as they seemed to be progressing. the u.s. will look for some concessions. just as we are talking about this, we are getting this line crossing the bloomberg. the u.s. said to be planning higher tariffs on $200 billion worth of chinese imports. the u.s. trade representative said to public cause -- to
propose additional tariffs. the announcement make him over the next few days. that is according to a person familiar with this. the united states said to plan higher tariffs on 200 billion dollars worth of chinese imports. this illustrates the emotional roller coaster we are on in terms of talks about possible talks. it could be part of this .argaining gamesmanship process >> it certainly could, but it is also a sign that there is a split within the administration over how to deal with china. mnuchin has advocated taking a somewhat softer approach in trying to get negotiations restarted, whereas there are others who have the president's ear and urge him to hold a firm line. politically this plays well for trump in the u.s. to keep a firm line on china trade. so there is still some room to maneuver for both sides here,
but we have seen this before where it is back and forth before we get to any real result. tradethe u.s. representative's office is said to propose a 25% tariff versus the current proposal of 10%. it seems as if we are seeing both sides of the trump administration, the side that is for trade and decide that is very protectionist, mnuchin on one side, like heiser on the other. seems like the side of lightheiser is in full force, at least for these hours. >> yes it does. we have yet to your from the president, whose word will be final on this. iser isbe that lighthe trying to force the hand of mnuchin, who has been pursuing talks. we saw in the past the treasury secretary was sidelined on these issues. this goes to the heart of what
trump campaigned on, and it is something he has promised and something that has pretty much been one of his enduring positions, that the u.s. needed to get tougher on china in terms of trade. winning be that side is out, but we will have to see what the president says. we are seeing market reaction. 0.01%ssie dollar dropping . offshore yuan falling in tariff plan.he is there a sense of who has more to lose? theou see the reactions in market, there is an argument that beijing is probably looking worse for wear than the u.s. at the moment. >> that has been trump's position, that the u.s. has a roaring economy, a booming stock market, so the u.s. had plenty of room to take a little bit of with thesever comes
tariffs and what potential trade war, and on more than one occasion trump has said that trade war's can be good. he believes the u.s. can win it by being able to hold out for some concession from china. today is the deadline for the other tariffs, the $16 billion worth. , ending.ntary to what degree is this trying to compound the proverbial nice to get beijing to do something? is putting a pressure point on the chinese government. an indication that the u.s. is serious about what it is demanding from them in terms of concessions on trade. they will, it keeps up the pressure quite a bit. they still do have some flexibility on the next round of tariffs. it could be as soon as
wednesday, but they could be delayed if there is a breakthrough where there is an agreement to halt talks -- hold talks, they could dial back a bit. now, they have a heavier threat they can hold over as they go along. thank you so much for that. will get you more on this story as it develops. the trump administration, set to propose raising to 25% its planned 10% tariff on $200 billion worth of chinese goods. we will talk more about this over the next two hours. taking a look at the guests coming up. ramy: that is right. we will be taking a look at tom ford, an analyst, talking more about what is happening with technology and the greater technology space after apple's earnings. aboute roberto talking the fed decision, reaction and
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haidi: welcome to daybreak asia. the top stories, asia-pacific markets are set to rise after renewed optimism. apple, among the winners. demand for iphones remains strong. services are also paying off. globalrom bloomberg's headquarters, iming new york. it is just past 7:00 p.m. on tuesday. by do is seeing a bounce after hours. it beat estimates last quarter as its personalized news service helps sustain growth. it is time to talk, or is