betty: i am betty liu in new york. as the world with to hear what fed chair janet yellen has to say about u.s. inflation, president trump has stolen the spotlight in just the last few moments, announcing a key appointment to the federal reserve board of governors. randy quarles is the top supervisor at the fed. hays, herekathleen with more. tell us more about randy quarles in this appointment. kathleen: it is very important. it came out of the whole dog think the regulation -- dodd-frank deregulation. , janet the vice chair yellen, and stan fischer. they said we need a vice chair of bank supervision, not so much monetary policy. someone has to be watching that because that is where the systemic risk can come in and we saw the financial crisis. this is a very important post to fill. you can call it the top bank called what are some of randy quarles's publications? the treasury department under bush. he was an undersecretary for domestic finance. it has to do with bonds and issuing bonds. it is something that is the hear

betty: and i am betty liu here in new york. trying to head off a growing emissions crisis by recalling mercedes-benz vehicles in europe, it involves software fixes. it will cost $250 million. the issue has been rumbling for months. cathay pacific says the environment challenging the first half, dashing hopes of recovery. they saw the first annual loss in eight years. they talked about hogg's appointment is disappointing. shares rallied more than 20% thay cutr as cafe -- ca many jobs. martin, a $5.5 million. down payment full-year earnings are15 cents higher. lockheed reported second-quarter profits that the analyst estimates. plenty more still to come. asia's first major market open moments away. yvonne: let's get the latest with sophie kamaruddin who is watching the latest opens. could drivethings the asian trading day, looking to be mixed-down day in europe. day onhave an inspiring wall street. helped -- traders may take note of signals that soft inflation contagion could be undermining central bankers, given the week's cpi o

betty: i'm betty liu in new york. we are getting headlines right now, breaking news from senator mccain's office. john mccain, as we know, he has been recovering in the hospital. according to the hospital, mccain has a primary brain tumor that is associated with a clot. he is recovering from surgery. his underlying health, according to these headlines, is excellent. the issue of concern was "completely resected by imaging criteria appear go there has -- by imaging criteria." there has also been a statement from his office. yvonne: they are saying what you were talking about. recovering from surgery, underlying health is excellent. mccain now reviewing further treatment options. we will continue to follow those lines. we heard from mitch mcconnell yesterday on the senate floor speaking about senator mccain, saying that he will be back soon. ok,ooks like he will be a according to lindsey graham as well. let's switch gears now and talk about the boj. the bank of japan wrapped up a two-day meeting. they have been talking

betty: i am betty liu in new york. plunged your the car rental company said late friday it could not meet all the conditions to read team its 2019 -- it owns -- there is speculation that next week's earning report will be worse than expected. barclays analyst's predict stock will fall to nine dollars. yvonne: heineken outshone rivals in the first half with emerging africa-driving growth. the brewer to the crown of best performer from another. there is demand for tiger in vietnam. adjusted operating profit grew 6% to $2.1 billion. analysts had expected to billion dollars. to $2 billion. added more than $12 billion to his fortune this year. has $33.5 billion. $1.7 billion behind on bonnie -- ambani. i hope people realize that was irony. [laughter] betty: speaking about someone who is not for it at all either is jeff bezos of amazon. really interesting story on the bloomberg i want to point our viewers to, which is donald trump talks about how much he ?entions -- right on amazon.ing the word amazon has been mentioned more

betty: yen and gold writing on these tensions. i am betty liu here in new york. we did get new headlines a few moments ago on this north korean icbm that was fired yesterday in asia. the stakes have risen dramatically, the u.s. confirming this missile test was missile,ontinental which escalates the long-running crisis. we want to discuss this with an expert on conflict management. let's cut right to it. want?oes kim jong-un jasper: kim jong-un sees all of this as just a negotiation game. he wants to sit in a room, face-to-face, alpha male to alpha male, with donald trump. all this flamboyance, military technology displaying to the world during the holiday is just a negotiation game. he sees it as just a bargaining chip. heard by the way, we have president trump entertainment possibility of a face-to-face meeting with the leader. once he gets that, if he gets that, what does he want after that? he wants a meeting, but ultimately, what does he want? jasper: trump and kim jong-un want the same thing -- they want to display power and create a legacy. they want to be

betty: i am betty liu in new york. a big week for earnings in the u.s.. you mentioned we got a earnings from bank of america, goldman sachs, morgan stanley. andorgan stanley, ibm, microsoft. netflix blew it out of the water. likely to hit the nasdaq. joining us now to tell us what to watch for is the chief global strategist, michael purvis. we were focusing an earlier on this call coming out from mike wilson at morgan stanley. i don't want you to -- pretty bullish year saying we -- pretty bullish here saying we are going to grind higher, but certainly to another record here of 10%. what do you think of a bullish forecast like that? i know you are on the opposite end here. michael: i am not necessarily on the opposite end. betty: they are pretty low though. michael: yeah, that was from back right after the election when everyone was laying out there 2017 and 18 forecast where we went through price targets and earning targets. recently, i took my earnings target, 127 for the year, down to 116. the lowest of the top-down

betty: i am betty liu in new york. geopolitical tensions out of north korea, that has been dominating the markets. earlier in the u.s., we were injected with the fed minutes, showing the central bank is on the hawkish tilt that other central banks are around the world and it pumped the markets here a little bit. we closed for the s&p almost near the high of the session and it led to a rally in tech shares. give me a bid for some of the markets in asia. hawkish,ey were more and a division among the members when a came to the timing of the balance sheets. it was not a matter of if, but when, and they seem divided. yvonne: something janet yellen needs to guide them through as we get closer to the timing of the rate hikes. maybe happening in december as well. key questions for investors of course. now we will go to sophie kamaruddin. sophie: a couple of things, geopolitics, the rebound in tech shares, that could play out. and the latest fed minutes. treasuries did rally, especially the 10 year yields, 3.32% and 11325n rebo

betty: i'm betty liu in new york. commodities dropping the most since december, gains in the dollar and higher equity prices limited the demand for the traditional safe haven. our next guest is still bullish. bug,been a long time gold expecting a 10% gain, making it almost 20% for the year in gains. jim rickards is the editor of strategic intelligence. isning us from -- joining us david kudla, our guest host for this hour. lay it out again. why do you think, with no inflation insight in the u.s., why do you think gold is going up? >> the reason is, in first half, gold was up about 8% against enormous headwinds. defense raised rates in december, again in march, again in june. we have seen a slowing economy. everything looks like we are heading into a recession. yet, gold went up almost 8% in that environment. as we go forward, the fed is of -- ahe last to know recession is coming. they will have to reverse course. they will certainly not raise rates in july.no meeting in august. they will not raise rates in september o

betty: i am betty liu in new york. let's break down janet yellen's testimony with julia coronado. hays stayed with us. first and obvious question, what did you think about the testimony? i'm agree that she was more dovish, leaving the door open for a softer interpretation of the inflation trends. betty: soft enough we will not see a rate hike this year? julia: i do not think we will see a rate hike in september. we can wait and see whether the inflation turns higher. kathleen: let's get to the balance sheet. i raised the possibility, people worry -- wondering if the fed will normalize this year. i have a chart for you. you can follow along at home. this overlays the portfolio. two big part of the mortgage-backed securities, $1.8 trillion. and the treasuries, another $2.3 million. security gets you up to $4.5 million. am i right in saying the fed will take this, no matter what happens in the next six months? we will at least get this process underway? julia: it does seem to be on autopilot, not independent, as the rate

this is bloomberg. ♪ ♪ betty: good morning. i'm betty liu in new york. haidi: i am haidi lun in sydney. a quick check on the business flash headlines, china's biggest coal miner expects first half profit to double thanks to higher prices. comeua energy said than it -- the net income is $3.9 billion. that would exceed all of 2016, the first profit in four years. they began lowering output to raise prices. betty: toshiba has agreed to give western digital two weeks before posting any sale of the chip unit. they came from a hurried transaction. western digital has continued to agree to arbitration. toshiba still maintains there is no transactional requirement to consult with them before selling. bros.' dunkirk held onto the top spot for the second weekend, collecting $28 million to take total receipts over $100 million. they held off the emoji movie, which sold $26 million of tickets and was universally hand by critics. -- panned by critics. it came from bad review and social media. yvonne and betty are up with daybreak asia next, for the next couple of hou

betty: good morning. i am betty liu here in new york. haidi: and i am haidi lun in sydney. the three biggest shippers are expected to establish a combined container operation this week. there have been approval delays. all of the necessary international permits have been attained. the venture will create the carrier.ixth largest it is set to launch in april. refiner japanese oil hopes to raise $1.2 billion from a-shares sale. opposition from the company that controls about 34% of the stock. one third is needed to block the merger. haidi: a chinese name does not have the cachet of a french or italian one. they attracted thousands. tang ranked fifth among chinese liars among the european brands. apple is said to be working on technology that a phonesers to open using facial recognition technology instead of a fingerprint. nrated security system scans the user's face. apple is testing iris scanning, that may not be ready at launch time. phase could become the identifier. facebook is seeking a p or payments in australia. just announcedat that they are coming into the australian

betty: i am betty liu in new york. a quick look at business headlines. drive counting on suvs to sales after profits were hit by higher spending in the u.s.. marketing and other expenses rose by 450 million in the april through june period. there was a 13% decline in operating profits. nissan has offered the slump at the cost of a $4000 incentive per vehicle. >> sales not only slowed in the u.s., but costs increased because of strong competition. however, we are seeing recovery in sales in china and europe, thanks to new models. we hope profit will recover. has reported profits that beat analyst estimates, 845 million singapore dollars. that is about $622 million u.s. they did better than the same period last year. bank income was a touch over $1 billion a year. aia says the value of new business rose by a better than expected 39% in the first half, led by growth in china and hong kong. future profitability surged to $1.75 billion in the six months from may 31. those were the last results from the previous cfo. yvonne: singapore airlines returned after a

this is bloomberg. ♪ ♪ betty: good morning, i'm betty liu in new york. sydney, youeidi in are watching daybreak australia. and look at what is happening out of australia today. elliott management getting support. has been talking to a couple of the bigger shareholders, among them yesterday really investment company which holds more than $350 million worth of bhb stock. this describes this whole conversation that elliott started about the performance. --has brought in the focus it has broadened the focus. this destruction of $40 billion in value that they talk about. they also agree with elliott that this jewel structure that hba has is out. they feel the same about the shale assets as well and believes the sooner the hb can get out of that, that is something wilson agrees with as well. healthy and constructive. wilson met with elliott as well. they can't argue with the argument. betty: they could be australia is poised for a fresh wave of mining investment. what is the story there? >> it does not really seem that long ago that the mining now yount boom e

this is bloomberg. 1 >> here in new york500 -- i'm betty liu here in new york. the pension fund is betting on infrastructure. seeking board approval to improve investments in everything from total roads to airports. all the details. everybodybig thing, is hopping on the infrastructure train. >> infrastructure gives funds, especially reliable funds over a long period of time. we are talking workers in the hospitality industry so coffeemakers are coming into the office. when they get to retirement they are going to need some money of course. you don't have 20 to 30 years every time. having a good platform for that, given the money when they get into retirement. expensive? getting >> asset prices are getting up there. on average around $120 million. that is up from 350 last year. the quality of the asset is also something that pension funds and other funds are looking at as well. the quality of the acid is coming off a little bit. sale andcoming up for they're looking overseas. >> these cross-border infrastructure deals. it for thisst morning. of course getting mon

betty: i have betty liu in new york. you are watching daybreak australia. let's go to first word news. the stock market fell on its return to trade after they would not accept any demand proposed. monday is the deadline for the 13 pacific demands which include and al ties with iran jazeera tv network. they say they are not afraid and are prepared to face any consequences. i will plan a deal to develop the biggest gas field -- iran will plan a big deal for the biggest gas field. they will control 61% of the project while the other group will have 30% and another one 19.9%. iran's section of the world biggest gas deposit which shares with qatar. the trump administration is considering separating the repeal and replace components of abolishing obamacare. the president wants to pass the bill soon and is trying to convince the public. mitch mcconnell pulled the senate health care bill from consideration facing opposition from conservative and moderate republicans. the u.s. navy has sent a guided missile destroyer to an island in the south china sea in what some

betty: i'm betty liu in new york will stop you are watching daybreak australia. as we are watching the north korean crisis am we have our eyes on the middle east. the extended deadline for a response to saudi-led demands are running out in the coming hours. go hot delivered its response to the mediator in kuwait. the german foreign minister says he expects the alliance to reject stop i want to ring in a professor of clinical science. heard some of the middle east allies who have noted the demand from the saudi arabia led much.ion, they are too they are unreasonable, so what do you think the response is going to be? guest: these demands are the ones that should be reject it expect them tod arecally say these demands acceptable. they would probably do that in the next 24 to 48 hours. betty: and respond with what leverage? economic sanctions? guest: there are a number of options open to the saudi led group. it could push more toward turkey that is self-defeating for saudi's and their allies. one of the things they want is for qatar to break off relations with iran a

inty: i am betty liu here new york. we dig deeper into janet yellen's testimony with cumberland advisors' bob eisenbeis. and, kathleen hays. bob used to work at the atlanta fed and was director of research. give me your quick take of janet yellen, two days in. bob: that was not much in the way of surprises, as far as i was concerned. he essentially said we will change the balance sheet, we will start letting it winds down. we do not know when. but i think most people think it will be september. and, we will go slow on rates. we will wait and see what happens. and, we are concerned about our inflation objective. think most people think it will be september. and, we will go slow on rates. we will wait and see what those three things are what you can take away from this particular round of discussions. kathleen: let's put it all together. you mentioned three things that intertwined, especially in the markets' mind. big, the sheet that is fed has sworn to reduce. let's look at this chart, it is a simple look at the balance

this is daybreak i am betty liu. yvonne: i-95 man. as we mentioned earlier, japanese politics is something of a shakeup with tokyo failing to counter the new party. taking 60landslide, seats in the 127 strong city assembly here that keeps pressure on shinzo abe and his mp's. with other worst performance in tokyo. talking more about this thing, this was a historic defeat. how serious is this really? does that spell trouble? is a fantastic result. what we have just had here is a smack upside the head for the prime minister and saying, get some points on the board. until we would have strong rumors of the election of the end of the year, they will have an election, you will do almost nothing. nothing is controversial ahead of that. what people want is more money in their pockets, get the economy going, get corporate profits up. as for the stock market is concerned, this is great news. betty: is his job in jeopardy? i think what we have is the children's crusade. we have koike who is good at presentation, but not managed to establish a lo

betty: and i'm betty liu in new york. google, amazon, thousands of other websites joining an unprecedented protest on that neutrality. equal access to the internet could be at stake. isn't the last stand for net neutrality, is probably one of the biggest battles before this is finally decided here. is a lot ofexpect messages coming out from 70,000 websites and organizations saying, listen, you guys have to ante up until the fcc you want net neutrality to a. google, facebook. some of the arguments painted dire picture. slower website access in terms of longer wait times to load. censored and blocked content mighte some isps theoretically favor their own content over the content of other providers and there could be higher consumer bills. the money could be used to pay for infrastructure to pad out some better or faster technology to get infrastructure out there, but it remains to be seen. isps say they don't need to regulation and there's too much restriction out there. it hurts the investment for potentially faster servic

betty: i am betty liu in new york. leaders at the g20 in hamburg. changing alliances, talks on protectionism. there is violence on the streets. matt miller has the latest. matt: standing here in hamburg meeting.0 there are protests on the streets, thousands and thousands being pushed back by police with water cannons. however, all eyes are on the meeting between the biggest leaders, including u.s. president donald trump and russian president vladimir putin. we will be looking to see what comes out of that meeting. other important bilateral's will happen, including president trump meeting with chinese president xi and trying to diffuse the situation in north korea. president erdogan is here and wants to speak at his own demonstrations on the sidelines of the g20 summit. however, germany has forbidden him from doing that. he says if germany holds them back from that, they will be committing suicide. the europeanime, parliament has agreed to freeze the application of turkey to the e.u. there are a lot of geopolitical tensions simmering here as this gro

i'm betty liu in new york. yvonne: i'm it on man in hong kong. you are watching -- i'm is on yvonne man in hong kong. here's our first word news. the biggest reason given for not supporting prime minister abe was a lack of trust in him as a person. the republican party's hopes of repealing and replacing the affordable care act has hit the rocks come with passage of any plan in doubt. bill cassidyator declared the leadership plan a nonstarter. son has eldest confirmed meeting with a russian leader with kremlin ties during the campaign. donald trump junior says jared kushner and then campaign manager paul manafort also attended the meeting at trump tower. says theyork times" did the meeting in hopes of learning damaging information about hillary clinton. iraq says it is has liberated the northern city of mosul from the islamic state three years after its fall alerted the world to the group's strength. the offensive was launched eight months ago. where the group's leader announced his intention to create a caliphate. global news 24 hours a day, powe