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tv   Bloomberg Daybreak Australia  Bloomberg  August 6, 2019 6:00pm-7:00pm EDT

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paul: welcome to daybreak australia. i'm paul allen. shery: i'm shery ahn in new york. sophie: i'm sophie kamaruddin in hong kong. we are counting down to asia's major market open. ♪ paul: here are the top stories we are covering in the next hour. president trump keeps up the pressure on china with a new set of tariffs. the final list of duties may be published in days. wall street clause back after china stabilizes the yuans, maybe cooler heads will divert
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escalation. central bank decisions. trade uncertainties are accounted for. later in bloomberg technology global link, we will break down disney's earnings. now, let's get you started with a quick check of the markets close tuesday session. some calm returning to the markets. the stocks rising, the dollar studying. the search we saw in treasuries peering back a little bit. the s&p 500 being led higher by tech and financials. every sector of the s&p 500 was in the green, except for energy. oil slumping into bear market with brent falling more than 20% since its april peak. not even the fact we have eight straight weeks of declines in u.s. stockpiles helped debt those losses. the nasdaq gained 1.4%. the dow up more than 300 points. u.s. futures at the moment not doing much, but let's see how we
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are setting up in asia. as we saw markets fall to the lowest point in weeks. sophie: we saw the asia benchmark fall to the lowest level in nearly seven months. futures this morning pointing to a mixed start. after the pboc moved to stabilize the yuan. it will be closely watched. in wellington, stocks opening higher by 6/10 of 1%. dollarave the rbnz decision on tap. a rate cut is expected to support the labor market in new zealand and reduce pressure on the dollar. policy decisions from the r.b.i. and bank of thailand. export data from taiwan and indonesia. we already had resorts -- results from commonwealth bank today, posting a decline in full-year profit. loan impairments increased. softbank and toshiba do to report. cathay pacific, coming at a time when hong kong is grappling
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with political unrest and trade concerns. the australian government has issued a warning for travelers to the city, warning to exercise a high degree of caution to hong kong. paul: thanks very much freedom let's check in with the first word news. ritika: there were more clashes in hong kong on tuesday night. police charged at protesters who surrounded a police station. a district counselor was obtained during the confrontation, accused of attacking off the verse -- officers. he says he was just a bystander when police charged. there are more protests planned later wednesday, including a march by members of the legal profession. london and brussels trading blame over brexit with less than three months before the divorce deadline. the u.k. minister involved says the eu is at fault for failing to engage on new negotiations. brussels says it is open to talks, but the eu's position
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remains unchanged and the current deal is the only one possible. a key measure of the japanese economy has fallen to a level not seen since the wake of the financial crisis. adding to concerns about growth ahead of the sales tax hike in october. the index dropped to 93.3 engine, the lowest since february 2010. one of the broadest indicators of activity, including industrial output and shipments of consumer goods. north korea is being accused of hacking into both traditional and high-tech financial systems to funnel cash into its nuclear weapons program. a u.n. report says pyongyang has amassed $2 billion from financial institutions and crypto exchanges. the panel says kim jong-un has 30 agents working overseas, controlling bank accounts and money transfers. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts. this is bloomberg.
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shery: thank you. the white house as trade talks in washington next month are still on, despite the latest tit-for-tat trade squabbles. >> we are planning for the chinese to come here next month. if there is a good deal or good progress, we may reconsider some things. but similarly, he has also said if there is no good deal and no progress, he may consider some things on the other side. shery: tensions remain high despite china's stronger than expected yuan fixing yesterday. sarah mcgregor in l.a. it seems to be larry kudlow who has to come out and soothe the public, whether it is today with the trade negotiations or before about the u.s. not looking to intervene in the currency market. sarah: absolutely. there was a little bit of solace today, in the markets, whether it was larry kudlow's remarks or the stabilization of the yuan. we did see the s&p group close
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1.3% higher on the day. not close to the record high it reached over a week ago but that is an improvement if we compare with some of the previous days when the trade war escalated. it seems per -- premature. almost surprising that kudlow and the administration would come out and say they still expect these talks in september. it seems like the relationship has hit a low point. it will be interesting to see, it seems obvious the u.s. side is willing to give the talks going, but will china? china is boring the brunt of this escalation recently. we really need to hear -- wait to hear from them to see if the talks are still on. paul: in the meantime, we've got president trump promising to take care of united states farmers. more farm aid, if required. that is not really an enduring solution, is it? sarah: it does seem like the u.s. farming groups -- they
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still support trump. but, it does seem like some of these farming groups are losing a little bit of their patients. ce. we saw some press releases, when halt said they would agricultural purchases. we saw some data that showed that u.s. exports to china, agricultural farming exports $9l 50% last year to about billion. it was around $25 billion in 2014. the farming groups are starting to lobby harder in washington, saying we want trade, not aid. aid is not a sustainable solution and not something they can depend upon. sarahsenior trade editor mcgregor, thank you for joining us. still to come, disney fell and extended trade after missing estimates in the third quarter. we will ask what is dragging results down. paul: finally some calm in the
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markets after the storm of the worsening trade war. we have an outlook. this is bloomberg. ♪
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paul: i am paul allen in sydney. shery: i'm shery ahn in new york. let's return to u.s. markets. statep 500 hoping a sick losing streak come arising more than 1%. a relief rally or a bounce? su keenan has been watching the action. we have seen more positive moods and rhetoric coming both from the u.s. and china, but the fundamental trade issues remain. su: yes, but a lot of strategists, especially on the bull side are saying it was an orderly selloff, no capitulation and that gives them confidence in what we are seeing. let's go right to this market snapshot. the dollar steady to. we did see one of the areas of strength, the s&p 500
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technology, that proved to be strong. you can see a big bounce back in apple which had its biggest drop in two months, down more than 5%. amd also back, juiced by the fact their ceos said rumors that she was leaving are not true. hertz on the mix with a strong earnings report. but, let's go into the bloomberg stocks oversold, the title of the msci index i have on the bloomberg. gtv is where you can find a library of charts. this shows us what we are seeing, that the market did come back. there are many that said what we saw yesterday does indicate there is a lot under the hood, so to speak, that could rattle the market going forward. paul: su, commodities definitely have been rattled this week, particularly oil now in a bear market.
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su: we definitely saw that with brent and west texas intermediate. ahead of bullish data that will come out. let's take a look at the five-day chart and we saw oil for don to its losses. there is a lot of concern. take a look at the big picture on oil. tariffs on oil are now inevitable and that concern over weighing pretty much everything else. you can see even west texas intermediate is down quite a bit from its peak in april. trade woes are the main concern. bitcoin flying higher. gold continues to trade near a six year high but the rally gave back some of the early gains as the pboc made some adjustments. there's a bit of a bumpy ride ahead for gold even though the general trend is higher. shery: let's bring in erin browne for more on the latest market moves. she is a multi-asset strategy portfolio manager at pimco.
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we have seen these trade tensions and headlines for over a year now. why did markets react so violently this time around? erin: i think it is because of the unexpected. the market has become sanguine to the fact the tariffs in place are not going to be escalated. i think that is the quickness and speed of the tariffs being put in place, an unilateral decision not just in the hands of the u.s., but the hands of donald trump exacerbated the tensions. i think that the market had become accustomed to the tariffs in place, but the escalation of the tariffs and then the response of china, allowing it to break above seven, i think that is what really concerned the markets. because that, i think reignited concerns you are going to have messiness emerge, particularly with respect to asia complex outside of china. shery: take a listen to what
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jim bullard had to say about the fed's reaction when it comes to all of these trade headlines. >> the nature of a tit-for-tat trade war is there are threats and counter threats occurring all the time. some of these might be some of these might be implemented, some might not ever get implement it. but the nature of the war's you have tit-for-tat going on all the time. it is not reasonable for monetary policy to respond to all of these threats and counter threats. shery: because there seems to be lingering sentiment in the markets that perhaps the fed did not provide enough clarity when it comes to really supporting the economy no matter what. how much has the volatility we have seen this week have to do with fed chair powell not committing to do whatever it takes? erin: i think that in part that the fed, the market expert tatian was the fed would be more -- expectation was the fed would be more dovish. this factor really concerned the market that maybe they were only
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going to do one and done or two and down. the pricing priced into the market was probably preemptive. wet is interesting is that have repriced even more fed cuts after the last three days of trading. the market is expecting a pretty ofnificant rate cut pass over 100 basis points over the next year. the market did take out some of the market pricing immediately after the fmoc, but now has put that pricing back into the market. paul: yes, erin. president trump was not able to influence the fed through the power of tweets but able to do it through the power of escalating the trade war. even though jim bullard saying the fed does not like the response, the market sure does. what do you make of that big sell down we saw this week? a buying opportunity or is it like catching a falling knife? erin: i think it is hard to go
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all in with the markets right now given the fact we are at the beginning of august. august tends to be a less liquid month for trading. you look at gold, you look at stocks, you look at bonds and they are up 14% year-to-date. people are sitting on pretty good gains already. funds have done decently well. at this point in time, market investors are going to be patient. they are not going to go all in into the month of august when it is really an illeiquid month. there is so much uncertainty that needs to be ironed out. whether or not president xi and president trump meet. whether or not trump decide to impose tariffs on europe. brexit. there are a lot of issues over the next quarter. i do think it pays right now to be patient, to be more defensive in positioning. to continue to be long duration
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and really pick your spots with respect to the market. if you want to buy equities, you can buy in the less cyclical exposures that are more domestically oriented in u.s. stocks. even longbuilders or technology like services sector, that is where you can be opportunistic. but i would not be buying more cyclical sectors of the economy right now, particular given the degradation of the data that flows through both here in the u.s. and across the globe. paul: how about fx? where are you position in terms of that? the yen has been strengthening. do you still like it? erin: we have been long yen all here. we like that as a hedge versus the rest of the book. we think it will pay in periods of volatility like it did over the last couple of days. we continue to be negative on the asia complex, particularly
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that is very export oriented. think about singapore, taiwan, korea. continue to come under pressure with the trade tensions and potential weakening further of the yuan. that is a place we don't like right now. i think there are areas, particular in e.m. affects which have come under fire -- fx which have come under pressure, that i think you can be long. like indonesia or brazil. you want to be tactical in the positioning with paring it against some of the shorts i mentioned in emerging markets but there are opportunities, particularly after last couple of days. a much, we're taking more cautious stance across our portfolios. shery: thank you so much for joining us tonight. erin browne, pimco portfolio manager. plenty more to come on daybreak australia. this is bloomberg. ♪
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paul: this is bloomberg technology global link. i'm paul allen in sydney alongside shery ahn in new york and emily chang in san francisco. let's take a look at the top global tech stories of the day. vivendi's in toxic to sell a 10% stake in universal music with tencent. it would valley the world's most top music business at $11.2 billion which means efforts to sell a universal stake as investors balk at the terms. it is discussing cooperation with tencent and wants to promote artists. president trump says he is keeping a close eye on google, tweeting more accusations that the search engine is working against him in the run-up to the election. he says despite a meeting with sundar pichai, the ceo, who was insured that google has no influence the results.
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if you are looking for advice on investing infant tech, you could do worse than asked the rapper snoop dogg. at $5.5s now valued billion after a fresh round of funding. some big names have followed snoop's lead, including blackrock and the commonwealth bank of australia. those are the top global tech stories we are watching. shery: disney shares slumped in late trading after quarterly results fell short of estimates. earnings were squeezed by falling theme park attendance, spending on new streaming services and the flop of a movie in the acquisition of fox assets. let's discuss this with ivan. always great having you with us. we were expecting that new star wars attraction to draw more people, but what happened there?
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ivan: the problem is it is drawing too many people. the park has been packed. it is very successful. like bob iger said at the start of the call earlier, this is a very complex quarter. a lot of moving parts as the integrate fox into disney. i think it was a good quarter because it is building up to what i believe will be a very successful launch of disney plus. i have set it for a long time, content is king. and disney, especially with the merger of fox, is the king of content. they have so far $8 billion in box office revenue which is a revenue in the first seven months of this year. they have over 36% of box office revenue. the next biggest competitor has 14%. they own the box office, they own content which will feed into the launch of disney plus and also drives theme park attendance and license product sales. eventually, it works its way
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through. they announced today the a package of hulu and espn plus together with disney plus for $13. shery: is there a risk of disney relying too much on movies, theme parks? ivan: that is their business. that is what they are good at. of seven of the top 10 grossing movies of all time are disney movies now. emily: what is your take on the pricing for not just disney plus, but bundling three streaming services in one? plus espn plus and disney for $13. ivan: i think it is a great deal. disney plus for seven dollars is a lot of content. you get disney, national geographic, pixar, you get all the marvel, all the star wars, including some original content. there is a new star wars series
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coming up. that alone could drive a lot of subscriptions. you add five dollars more for espn plus, which is normally five dollars on its own. and also hulu, the ad supported version of hulu, you have a lot of content for a really good deal. emily: this is a little hard to digest, given disney breaking box office records. the avengers, toy story, aladdin, yet that does not impact the bottom line? ivan: it does. while people say they are disappointed in the results, missed expectations, disney does not give guidance so i don't think the company missed. i think the analyst community missed. bob iger said this is a very complex quarter of merging everything together so it is really not fair to compare it to some of the expected results. and, the merger -- the acquisition of fox is designed
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to drive the future, of which i think it will. i think this weakness we are seeing in the aftermarket, which may follow through tomorrow, is a buying opportunity. shery: let's talk about the stock because we have seen an incredibly -- incredible rally this year but we have continued to see this pressure. how much further up can they go? ivan: i think there is significant upside. i think -- too conservative for their expectations for disney plus subscriptions. they are looking at 10,000 -- 10 million in the first year. i think they will have 10 million in the first month. i think they can eventually outnetflix netflix. you have netflix losing a lot of popular content and disney launching a lot a popular content. so, i think the launch of disney plus, which i said a year ago would be a powerful driver. last april, it was a huge catalyst an upward move for the
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stock. i think that will continue. i think -- they are in the business of creating content. netflix has to create content just to try to keep up, or buy content. disney has over 5000 characters and a huge library that they continue to produce content from. mom, i can certainly see the value. if you are so bullish on disney plus, how do you think the launch of it will impact netflix and other coming competitors like apple with its new streaming service, warner, etc? ivan: it will be driven by content and disney has powerful content. marvel, obviously by the success of their movies, is huge. disney is huge. plus, bob iger said on the launch of disney plus that he took his grandchildren to see cinderella, the same movie his grandparents took him. five generation saw the same movie and did not care how old it was, everybody enjoyed it.
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disney's content for the most part is timeless. eth,: all right, ivan feins thank you for joining us. that is bloomberg technology global link. this is bloomberg. ♪
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paul: 8:30 a.m. in sydney. the market open is 90 minutes away. a rough start of the week but today futures are pointing higher by three quarters of 1%. i'm paul allen. shery: i'm shery ahn in new york. let's get the first word news with ritika gupta. ritika: the trump administration is keeping up the pressure on china, slapping tariffs on more than $4 billion of wooden cabinets imported into the u.s. the move is only a small step in the trade war that comes as the administration prepares to publish a final list of goods to be hit by far greater duties. president trump imposing tariffs
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on 10% of $300 billion of imports and is threatening to go higher. saying fed president says policymakers have taken steps to account for trade war uncertainty and he is only expecting one more rate cut this year. he told the national economist club in washington that it is important to watch data ahead of the fed's next meeting, but little has changed since june when he forecast a half percentage point cut by the end of the year. >> the nature of a tit-for-tat trade war is there are threats and counter threats occurring all the time. some of these might be implemented, some might not ever get implemented. but the nature of the war is you've got tit-for-tat going on all the time. it is not reasonable for monetary policy to respond to all of these threats and counter threats. ritika: australia has issued a warning for travelers to hong kong, recommending the exercise a high degree of cautions as unrest as late.
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more clashes on tuesday night as police charged at protesters who surrounded a police station to demand the release of a student they said was arrested unfairly. more protest events planned later wednesday, including a march i leaders of the legal profession. global news 24 hours a day on air and on tictoc, powered by more than 2700 journalists and analysts. this is bloomberg. shery: thank you. investors across asia have a lot to digest today, including a trio of central bank decisions. let's turn to sophie for what to watch in the markets. sophie: i want to get a quick round up of stocks on the radar in sydney. amp on a report in australia that the group is weighing plans to sell its banking arm to free up capital after new zealand blocked its life insurance unit sales. suncorp reported a drop in net profit, missing estimates on the
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loss of its sale. cash profit matched estimate and the company plant a capital aussie.f$560 million full-year profit decline in net interest margins shrank. the group does see scope for future capital management which may include an off market share buyback or neutralization of the dividend investment plan. stocks in focus in sydney. of itseporting a review inventory of hand. rio and bhp may move after being downgraded to hold. more pressure points to emerging, including the devaluation of the yuan and tightening measures and that chinese property market. paul: thank you very much. let's get more on what we should be watching as trading gets underway in asia. we have adam hague with us. the daily fixing of the yuan
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will be crucial to markets today. have investors see authorities do enough to reassure them? adam: i think what happened yesterday was pretty instrumental for people. you got some kick up and wrist ask it which played out pretty well in u.s. equities. . a pretty decent rebound. some weakening of the haven trades that done so well on monday. wednesday looks like a bit of a reset for asian markets. volatility remains pretty elevated. libraryrt on your highlighted pretty well. equities and currency markets, and the move is the proxy for bond market volatility in the u.s. they have seen significant spikes. when you see out of the normal moves of those magnitudes within shuts -- such a short space of time, it takes a while for investors to take stock and work out what has changed and how the
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landscape is changing for their asset allocation. although we are seeing some resemblance to calm, we are not seeing all signs that everything is well again. they are still looking for signals from the u.s. and the chinese in terms of what the next step will be in terms of a return to some kind of negotiation and discussion. i think the fixed today, if we get some kind of real firming up of some strengthening of the daily operation, that will be taken in kind and could lead to more of this move supporting risk asset. shery: we saw the aussie 10 year yield falling below 1% for the first time ever in the last session. how significant is this? adam: of course, this is an australian phenomenon. this is part of a far wider movement we have seen globally. and down to 1%ng
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through australia. in much of the rest of the world , the negative yielding debt is increasing. the $15 trillion number across the world, much of europe and japan, the epicenter. australia's not out of the realm of possibility to get towards that over the next few years if things continue to deteriorate. it is not just that total number. it is also the fact in the investment market, there is now 25% of the entire market globally that yields less than zero. it is part of a bigger story about how this search for yield is continuing to put the hammer down and people who need to find funds long-term pension and investors that look over the long-term still are finding it difficult to find long-term money. of aalia remains somewhat place that gives investors the advantage. looks0 year 1% still
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decent on a global basis. as every month goes by and that continues to come down, that relative advantage for australia is somewhat eroded. paul: thank you for joining us. new can check out our library for some of the charts we have been talking about. o> onan find that on gtv
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that he will do more if needed but he wants to have a little look if that is needed. a couple of things have changed since the last cut. it looks to have stabilized. if you look at option clearance rates and all the anecdotes, not necessarily showing it yet but good enough anecdotal evidence to suggest there is stabilization going on. we also have the australian dollar finally give way. the rba wanted a bit of weakness to kick in and support the economy. that is starting to happen. his handsan sit on for little longer now. shery: a trio of rate decisions today, not only the rba yesterday but new zealand, thailand and india. new zealand, stocks are strongly start -- strong. what are we expecting? malcolm: we are expect to get cut according to 18 of the 21 economists we have surveyed. new zealand was the first among
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the developed nations to cut this cycle. it looked like it was going to do so again. it is the same story across the developed world playing out in new zealand. robust labor market numbers you referenced are not kicking into the broader economy. not seeing any wage gains. inflation is mid or below targets. some of the other sentiment gauges like consumer sentiment is underweight. because everyone else seems to be cutting in that direction, there is no reason not to. a cut is broadly expected today in new zealand. paul: another common theme for central banks, they all seem to complain that they are getting no help from governments. rbi as well. is that a theme for them? malcolm: it certainly is. their broad-based to slow down be in place in india. numerous headwinds, the list of which is not the banking crisis going on. inflation is below the 4%.
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they have room to cut. they were quite active in raising interest rates last year. now they are reversing that. we are expect and a fourth straight interest rate reduction in india later today. shery: thank you so much for that. our asia economy managing editor. trade tensions have been beating down on the oil price. brent crude fell into a bear market tuesday, down 21% since april. bloomberg energy reporter kathleen joins us from denver. we saw equity investors more confident given the fact we have seen some actions and rhetoric both from china and the u.s. that could ease trade tensions. why hasn't oil reacted the same way? >> yeah, oil is being a little bit tricky. we would expect to look at the supply picture of prices to be more supportive, but it seems like trade is weighing on the market right now. you have the two biggest oil
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consumers, u.s. and china, escalating tensions. the big question is what is going to happen to oil demand. i think the market is being a little pessimistic right now given where supply is that. paul: we have china as well starting to dial back. what is that going to mean for the market if that continues? not said: china has they will curb u.s. will purchases but when we look into the numbers, the numbers have been declining over the past few months as tensions have ramped up. obviously, it would not be great for u.s. oil. china is increasingly purchasing more u.s. oil over the last couple of years, but i think the purchases of u.s. oil, there are other ways china could retaliate that would have an impact on oil demand. one example we saw recently was allowing the currency to weaken to the lowest level in, what, a decade? that certainly sent brent downward as well.
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shery: given u.s. stockpiles falling has not helped oil prices, what should investors be watching then? catherine: the consensus among analysts right now as we go into tomorrow waiting for the u.s. data on oil supply, the consensus is that oil supply is going to shrink for the eighth consecutive week. that would be the longest string of the clients in a year and a half. that should be supportive. as we have seen over the past month, even these declining stockpiles have been not a left -- have not been enough to raise prices because demand is eclipsing the supply picture. shery: thank you so much for that. coming up next, as earnings season is heating up in australia, we will speak to the jp morgan head of equity research. this is bloomberg. ♪
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shery: i am shery ahn new york. paul: i'm paul allen in sydney. you are watching daybreak australia. earnings season in australia is ramping up this week. asx at an all-time high at the end of july. the reporting season is going to test the resilience. our next guest has ease looking ahead, jason steed joins us now. thank you for joining us. in terms of your sense of earnings, i want to bring up a chart. we have seen business conditions pulling back in australia, yet the asx hitting all-time highs until this week. why the diversions? jason: what we look at is the state of business conditions, confidence. today's levels versus the average are very low. there is a sense that business is looking forward to a period of growhth.
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yet the markets are pointing to reasonably high and positive outcomes which we don't think will manifest in this results season. pmi's seeing it between but what seems to be given sustenance to the global markets with respect to the last couple of days is affect u.s. earnings have come in better than expected. that is something that probably won't happen in australia. reasonabled a pretty result from rio tinto but what are your expectations for bhp because the iron ore price has been strong but how strong is it going forward? jason: there's a question of lag in the time it takes for the high prices to manifest themselves in earnings. we will see quite clearly a significant uptick in earnings. rio tinto will come back in the shape of dividends and special returns. evenng at these companies,
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with the iron ore price, it is still very high. low leverage within these companies, operating efficiently. the mining sector still has a reason for positivity. we think china will stimulate through fiscal policy and that will be a positive for demand. at least helping iron ore prices stay high level but dropping back. these are still very high level in context of recent history. shery: take out the mining asx 200what does the look like? jason: it is very stretched. it is something we are very concerned by. if you look at the headline, in context, they very low end of the yield curve. it does not look overly stretched. if you strip out the extraordinary increases we have seen in earnings expectations, tradingdual asx 200 is above the five-year average.
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we call that the asx industrials miners which to suggest a positive picture in terms of earnings for many of these companies. then, we think it will play out over the course of three to six months. much of that will be evidence in the guidance. shery: you are also not too excited about financials. what is going on with that sector? jason: the challenge for financials at this point is clearly the rba is in a mode to further cut the cash rate, as given from the statement yesterday. what that means for the banks is continued pressure. what you need to see to offset that is credit growth. there is evidence of credit cards bottoming out and perhaps beginning to recover. the degree of credit growth we have seen it is really hard theresa -- realize. we need to have it back to the 5%, 6% range which is improbable
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to say the least from the point of view of the consumer, borrowing capacity. financials makes it difficult for the financial sector is not as overvalued as other parts of the market. a number of equity headwind still facing the sector. paul: on your point in financials, the nimm holding that are than expected, but cash profit was missed. we did start talking about business conditions. how about consumer conditions because one of the sectors has to be retail? jason: retail is sitting in the category of uncertainty. we have the election results, rebates are starting to flow. the earnings side has weakened from the challenges we undertake around the sector. there's always a debate of how long that might take to get into. ultimately the tills of those companies in the retail sector,
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but right now, the picture looks gloomy for the sector. i would say for many of the companies, that will be a critical focus for the market because that will give some sense of the degree consumers are willing to spend tax rebates. right now, it looks like the consumer is inclined to save more than put the money back into the retail channel. paul: you were saying how resource stocks have been buttressing the asx. perhaps gold mines is in that as well. in the current environment, how will it be? in timesld is a haven of volatility which we are in at the moment. in terms of how the real interest rate picture looks, quite clearly that is a big factor in the extent of which the gold stocks are performing and gold itself is moving. we are seeing a great deal of activity. coupled with the fact it is a very highly penetrated
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sector. it has been underpenetrated in that regard. capital flows are beginning to come in which will add to the fact it is a safe haven, plus the interest rate environment working in its favor. paul: all right, jason steed, thank you for joining us. you can watch us live and see our past interviews on our interactive tv function. you can also dive into any of the securities or bloomberg functions we talked about. new can become part of the conversation as well by sending us instant messages during our shows. this is for bloomberg subscribers only. >.u can check it out at tv
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shery: we have breaking news. singapore's largest developer announced second-quarter earnings coming in with the revenue at 1.0 8 billion singapore dollars. second quarter net income coming .8 million singapore
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dollars. this is singapore's biggest developer earnings. it could benefit from its improving china property business that has been driven by both home sales and retail in china's major cities. we have seen second-quarter net income come in at 579.8 million singapore dollars when it comes to second quarter revenue. above the $1 billion mark. second-quarter portfolio gains, 52.8 million singapore dollars. paul: let's get a quick check of the latest business flash headlines. hsbc's swiss private bank unit is paying 330 million dollars to settle a criminal inquiry and belgium. it is accused of helping wealthy clients dodge taxes. it must still be approved by a judge next month. hsbc came under investigation
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after its toll client details and give them to prosecutors. hsbc has settled similar fines in france. shery: intercontinental hotels is being hurt by the trade war and protests in hong kong. shares slumped after revenue per room fell half a percent in greater china and the second quarter. corporate travel in china also fell but was balanced by resilient leisure business. the ceo says hotels in china mostly rely on domestic travelers but hong kong is a slight concern. >> as the demonstrations began, we did not see any material impact in hong kong but as they have progressed, we have seen a bit of a slow down over all and some of the meetings and events. that disruption and in certainty will have an impact going on in hong kong but it is a small portion of her overall global business so hopefully that will be resolved in the near term. paul: singapore is tightening regulations on ride haven such
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as -- bringing safety rules in line with taxi operators. new rules come six years after ride-hailing apps hit the streets in singapore. before that, 28,000 taxis. today come about 20,000 and 40,000 private cars. shery: occidental is selling $13 billion of debt to help pay. the offer comes after occidental received orders of more than 75 billion, the biggest demand for a debt sale since saudi aramco received more than 100 million in orders in april. a sign investors are willing to take a risk again this by the trade war and volatility in markets. year profit of commonwealth of australia feell and net interest margins shrink. australia's biggest lender is suffering the cost of a series
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of scandals from charging people for services they did not receive an selling junk insurance. the compensation bill climbs to almost $1.5 billion. shery: plenty more still ahead in the next hour. we are speaking to nico asset management chief global to breakt john vale, down a massive week in the markets. paul: that is almost it for daybreak australia this morning. we have trading underway in new zealand. we've currently got the -- l ooking like this. hang on a moment. it is higher than 1% after a couple of days of declines inspired by the escalation we saw in the trade war. sydni futures pointing higher by three quarters of 1%. 1/10 offutures of by 1%. it looks as though we might see something of a rally from what
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appears to be a temporary truce in the trade war. that is it for daybreak australia. all the action in a moment next. this is bloomberg. ♪ hey! i'm bill slowsky jr.,
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i live on my own now! i've got xfinity, because i like to live life in the fast lane. unlike my parents. you rambling about xfinity again? you're so cute when you get excited... anyways... i've got their app right here, i can troubleshoot. i can schedule a time for them to call me back, it's great! you have our number programmed in? ya i don't even know your phone anymore... excuse me?! what? i don't know your phone number. aw well. he doesn't know our phone number! you have our fax number, obviously... today's xfinity service. simple. easy. awesome. i'll pass.
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paul: good morning. allen in sydney. we are under one hour away from the australian market open. shery: i'm shery ahn. sophie: i am sophie kamaruddin and hong kong. welcome to "daybreak asia." paul: our top stories this wednesday, presidential keeps up the pressure on china with a new set of terrorists. the final list of duties may be published in days. china stabilize the yuan, prompting speculation


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