paul: good morning. i am paul allen in sydney. we are under one hour away from the market opens in japan and south korea. shery: i am shery ahn. welcome to "daybreak asia." paul: our top stories this tuesday, washington confirms china's top trade negotiator will be in town on thursday. the agenda will include tech transfer, intellectual property rights, and enforcement. the white house backtracks on turkey's incursion into syria.

president trump warns he will smash the turkish economy. hong kong calms down after a long and difficult weekend. leadership in beijing should meet protesters. get you across some breaking news out of south korea right now. this is the current account balance for the month of august, and it is coming in, contacting on the july figure. billion. in july, it was 6.9 billion. we have seen rather disappointing export numbers out of south korea, but however, the current account remains in surplus after the chart, dipping into deficit back in may last year. it is trending a little down. the trade war is weighing on career. the current account balance for the month of august, 5.265 william dollars. chari. 5.265 billion dollars. shery: the trump administration

put 28 chinese entities on a new trade blacklist. the s&p 500 was down .5% in the regular session. major indices ended in the red and they were fluctuating between gains throughout the session but we had energy and consumer staples leaving the clients. we saw oil giving up the biggest gains in more than two weeks. it is not just because of conflicting signals, but also geopolitical stability. take a look at how futures are trading across asia. kiwi stops at the moment are down .1%. this after two sessions of gains and the asx 200 at the moment, futures unchanged. nikkei futures and kospi futures unchanged, but we will continue watching what the markets do. we saw the japanese yen strength and a little bit after weakening

on news of china's willingness for a partial trade deal but president from now saying he wants a complete deal. let's get the first word news with critical -- data. ritika gupta. trump warneddent he would obliterate the turkish economy if the military oversteps an unspecified line in syria. the president sparked criticism by allowing turkey to cross the .order before backtracking the white house is adding to the confusion by saying he did not authorized military action against the kurds. is hong kong subway system back to normal on tuesday after a long weekend of protests left several stations badly damaged your exam will remain closed and all trains -- badly damaged. all stations will remain closed. president trump warned china that trade talks would suffer if anything bad happens to the

protesters. pres. trump: i would just like to see a humane deal be worked out, and i think president xi has the ability to do it. i sort of said that i think he is a very convincing man and if he met with some of the leaders, that could be one problem. you do not seem to have a specific leader. index says china is expanding at a pace close to what official figures claim. although the growth is likely more volatile than the numbers indicate. the china cyclical activity tracker uses eight indicators including retail sales and exports to estimate how growth deviates from the underlying trend. china is slowing but is not about to collapse. the world bank is joining the growing list of institutions warning about global growth. it says the outlook is worsening thanks to the downturn in europe . the wider trade tensions and the uncertainty surrounding brexit.

the president says the world economy looks even weaker than in the world bank's two forecast of 2.6% growth this year. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. paul: thanks. the trump administration has blacklisted eight chinese tech companies, accusing them of human rights violations. the move came just as u.s. and chinese negotiators began preparations for trade talks for later this week. we have two of our trade experts on opposite sides of the globe. tom mackenzie in beijing and sarah mcgregor in los angeles. let's start with you. what exactly has the trump administration done to restrict business around these companies? administrationp took a similar move today as it did against a company like

huawei, where it put it on a blacklist. u.s. companies are barred from doing business with these chinese companies. there are a lot of american suppliers in california who deal with these chinese companies. some of thed from people in silicon valley that it does hurt the u.s. companies as well, and so, with this action today, that really became a bit of a surprise because it was put on the back burner. the trump administration theseced blacklisted from companies are surveillance firms, ai firms, over human rights violations. paul: so tom, what do we know about these companies? they are involved in surveillance. what do they do and why do they matter? tom: these are major companies here in china, but also, internationally as well. they attack, the two of them, for one third of the global

market for surveillance cameras and equipment, and then you have the ai companies, which by some metrics is the most valuable ai start up in the world, and then you have another that is focused on voice recognition. it has been named by beijing the last few years as a national champion. these are the kind of companies we are talking about. the ai,he software, facial and voice recognition primarily as well. they are saying they are implicated for these companies and what they described as human rights violations and repression and domestic -- i should say tension in shenzhen, where according to the united nations, there are up to one million people held in the master tension camps, -- mass detention camps. they are helping to put in place this surveillance state essentially and helping to enforce this mass detention of

muslims in the region. shery: this comes at a time when the vice premier is going to washington. will these latest moves be kept separate from trade talks, and is that even possible? tom: that is the key question, isn't it, is whether or not this was a coordinated attempt by the ministry, the department of commerce in the u.s., with those leading the trade negotiations or whether this was a separate action, and that the -- a key question for the tiny side is whether they start to interpret this again as a broader push by the u.s. simply to check china's rise that it is far more than just trying to level the balance, butte the trade, the balance -- be it the trade. that is a concern from hawks in beijing. this move by the u.s. may feed into that perception. in terms of whether or not we

get any action on the deal, there have been reported by bloomberg suggesting that china was going to narrow the scope of discussions, and again, it does seem to add to the risks around these talks and whether or not they can actually achieve anything. president trump came out and said he wants to get a comprehensive deal, a 100% deal with china, and he voiced moderate optimism that he thought something could come out of these trade, but it does seem to make it much more complicated now that you have this blacklist on an additional eight companies as well as the issues around huawei, which will remain unresolved, which chinese officials want to get sorted as well before they move on with these trade discussions. shery: a complete deal is not necessarily what the president gauck 20 signed the u.s.-japan trade deal. trumpo -- president signed the u.s.-trade deal. what we know so far? sarah: i think it will be harder

for the trump administration to sell a half deal with china as a win for the u.s. concessions some for farmers if china agrees to buy more agricultural goods. that has been important for trump and it will continue to be heading into the 2020 elections, but i think with japan, there was not as much of a spotlight on those talks. reported what we have -- china is not willing to come to the table to talk about industrial policy and state subsidies, which are two of the biggest issues the trump administration wants to tackle at the heart of this tariff war to begin with, so we see ourselves on even worse footing with this latest action today taken by the commerce department with the blacklisting of chinese companies. thank youah mcgregor, and tom mackenzie. still ahead, samsung has valued more than 20% this year on hopes

of a pickup for semiconductors. we are counting down to the result later this hour. paul: but up next, u.s. stocks fall on light volume as revived trade talks approach. we talk with andrew milligan of standard life investments. this is bloomberg. ♪

paul: this is "daybreak asia." i am paul allen in sydney. shery: i am shery ahn in new york. let's dive back into the conflicting forces causing u.s. stocks to swing. china is ready to make a deal to concerns that the trade agenda will be limited and news of the blacklisting of more chinese tech firms. su keenan has the action. the blacklisting happened after the close but investors have a lot to digest at the moment. su: when you look at the conflicting geopolitical portions, you can add in the trump tweets about turkey. it is hard to know which force

will prevail on the market. let's take a look at the market snapshot. you will notice again that tech, which led the way higher when stocks were out, actually was a drag and energy stocks also lower. energy having a bit of a drive. the dollar gained, treasury slipped, and let's go into the bloomberg. it decided to freeze its pension plan for 20,000 employees, and in the process, we will go into the bloomberg right now. it is cutting $8 billion from the pension deficit. notice the debt meanwhile making a bit of a comeback as the stock has been under pressure. we saw the stock to cap -- tick up. remember all the ipo's, recent ipo's, being thrown out with the bathwater. take a look at how they are coming back. they are taking off the week again strong. got dragged down and are coming back in the

cybersecurity software space. 6%.ce biotech down that debuted recently. it was up some 30%. and this is another one that was day, and we are seeing those trade. e*trade, which got thrown out last week, with all of the news about cutting fees, also came back in a big way on an upgrade, saying even though it's revenue may be down, because of the fees, it has a very good following that keeps it in the running. let's talk about commodities. we had oil giving back earlier gains. some investors think that maybe it is the end-of-the-line for gold as well. what is the story there? su: commodities seem to closely track what is going on with trade. oil surrendering earlier gains. take a look at gold, we are you are seeing gold in the past month dancing 4% from a six-year high. they of the gold bugs --

are thinking the mojo has been lost. rebounded from 8000, so again, in some ways, they are operating on the sentiment that the trade talks resuming is good but there continues to be a lot of uncertainty affecting these commodities. thank you very, much, so that's good to our first guest now this hour. andrew milligan is head of global strategy with standard life investments. he is usually based in edinburgh. today, he is joining us from tokyo. muchay that bonds pretty got a recession priced in, but equities are looking more towards a slow growth story, so which of those two is right? berew: well, markets can like that for some time. it isnk, on balance, still likely that equities over time will make better progress. bonds placed in a bit too much

bad news. that is going to need some changes to the political outlook, especially between the u.s. and china, but other parts of the world as well. that is not likely to happen quickly. range trading for markets is the order of the day for some time. easingor equities, fed and other central bank easing is all they have got at the moment absent a resolution to the trade war and an environment of slowing global growth. moneyidence of the easy from central banks being put together productively in terms of capex? andrew: not on the capital spending side. and i think many investors will be waiting for the meeting later and does that cause some changes? we are beginning to see investment being put to work in

terms of moving material out of china and into vietnam. forward, theing u.s. earnings season starts soon. expectations are for modestly negative growth. it ends up modestly positive. are buybacks will start to to can as well. we will have earnings news, which we think should preside -- a floor to the market and the potential upside. shery: how about emerging markets? we continue to see this hunt for yields turned to the ems. andrew: yes, we do like emerging markets. ony are slightly better valuation ground, and of course, we are in an environment currently where even if the dollar is creeping higher on a trade-weighted basis, they are able to make rate cuts.

the reserve bank of india the other day. emerging market debt is one of our most overweight positions at present. emerging markets generally, yes. more selective in terms of equities. it is an attractive part of our portfolio at present. wel: we have heard -- shery: have heard the valuation reasons for them favoring japanese stocks yet the gtv chart on the bloomberg showing that a bloomberg survey sees analysts with more yen out performance. so how do you measure those two up and what will this mean for japanese equities? andrew: we do like japanese equities again. u.s. emerging and japanese are our most favorite markets. the fundamental drivers are very clear. profits growth at present compared with the dividend growth and governance changes taking place.

we wait to see whether or not the sales tax will crimp that in the short-term. so it is a favorite part, but we absolutely take the case that the possible yen strength -- it must be said that the yen -- you mentioned gold earlier. those are classic parts of many investor portfolios as a safe haven and diversifier. on balance, we do like japanese equities, but it is only overweight. we have the possibility of a yen spike, if there is some bad news for the world economy. on those days, investors are not rushing back into safe haven assets so it cannot be a heavy overweight in portfolios. the yen, hows of much stronger do you see it getting and at what point does it invite intervention from the boj? i think your last point is absolutely right. i don't think the bank of japan or the european central bank can

cut interest rates much further. are well aware of the dangers for the banking system and the underperformance. qe by the are into bank of japan. whether it is at the meeting think thereonth, i are undue periods of yen strength. the exchange rate moving too quickly over to short a period of time, moving too far away from whatever their values suggest. the bank of japan has plenty of firepower to do that. boj standing the pat because the economy is going relatively well and inflation is at least moderately in positive territory. we are waiting to see if it needs to act on the currency. they: we continue to see debate, whether monetary easing

is becoming stretched. how much could fiscal stimulus help global growth? i think itandrew: could help a lot. the problem is that in not many countries are we actually seeing the debate picking up. in my country, the united kingdom, there is a busy war taking place between the various parties as to how much an increase in capital spending is. if we go to europe, it is quite small. the debate is building up in germany. i think we would need the green party possibly to enter parliament and then much more expenditure on climate change. china is doing a small amount to keep the economy afloat, but you have to stay wary of relying too much on the construction boom. japan is trying to offset some of the consumer tax increases. it is patchy. going into 2021, we would expect that pendulum to swing much more.

we need higher unemployment in many countries to encourage the government to do more on the fiscal side. we are caught in this transfer of the batch on between the monetary and fiscal policy tools. it looks to be slow progress and that is why we are all expecting relatively muted economic growth and stable flatlining, range trading equity markets, for a little while longer. shery: thank you so much for your time today, andrew milligan, aberdeen standard investments head of global strategy. don't forget, if you are away from the screen, you can find analysis on bloomberg radio, now broadcasting live from our brand-new studio in hong kong. you can download the app, bloomberg radio plus, or listen via bloombergradio.com. ♪

i just want to get your cross and alert on the bloomberg at the moment. morgan stanley seeing the iron ore price sinking to $70 a ton by 2020 as the market loosens. iron ore currently trading a little above $92 a ton. it was last at that $70 level back in december of last year, so iron ore seeing that market loosening as china steel output drops. $70 a ton by the end of the year. of course, they will be returning to supply the markets by around that time as well. shery. check let's get a quick of the latest business flash headlines. it is not clear what apple plans to spend on content for its upcoming tv plus streaming service. the huge pile of cash means

program will not be a problem. they say that, assuming relatively few subscribers in the first year, apple would burn about $6 billion, almost twice the amount of negative free cash flow at netflix. apple's 2020 cash flow is expected to top $60 billion. takingeneral election is -- general electric is taking action. the ceo struggles to turn the company around. ge is freezing pension benefits for more than 20,000 blaze and setting aside $5 billion. that should trim the shortfall by $8 billion. shery: an indian hotels startup is leading investors such as softbank as it expands into new markets in europe and the u.s. in 2013hed the service and has vaulted to the second

most valuable startup in india. it covers more than one million rooms in 80 countries and entered the u.s. market this year. coming up next, confusion grows over president trump's stance on turkey. we will have details. this is bloomberg. ♪ mberg. ♪

shery: this is "daybreak asia." i am shery ahn in new york. paul: i am paul allen in sydney. let's see how markets are trading right now in asia. about .1%.weaker by a different story in australia. the asx higher by .4%. up by .4%. they announced a further customer remediation charge of 500 59 million australian dollars, not affecting the share price at all.

it is higher at the moment. take a look at futures for japan. also higher by .5%. the kospi futures looking kind of flat right now. let's check in on the first word news now with ritika gupta. ritika: trade talks are back on track this week with the white house confirming that top chinese negotiator liu he will be in washington for negotiations on thursday. the administration says they will be looking to build on lower level discussions in recent weeks. the agenda will include forced tech transfer, intellectual property rights, nontariff barriers, and enforcement. chinese companies trading in new the jumped midsession after economic advisor, larry kudlow, dismissed regulation they could be delisted. alibaba and jd.com initially reversed earlier losses.

tencent parity declines. mood didally positive not last long at all for companies closed the day in the red. >> the delisting is not on the table. i do not know where that came from. looking at actually is investor protection. u.s. investor protections. you are quite right. transparency and compliance with a number of laws. ritika:ritika: the white house welcomed movement on a trade deal with japan. president trump and prime minister abe agreed for a broad outline for the deal last month. the final draft of the trade agreement has been signed. halt tariffsed to on cars imported from japan. tokyo is concerned the administration might change its mind. climate change activists rallied around the the world. outsideing in a diane

the new york stock exchange. the demonstrations are part of a worldwide extinction rebellion campaign demanding much more urgent action from politicians and big is next. the campaign started in australia and new zealand and rolled on through europe and finally onto the united states. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. thanks. let's get some more on what we should be watching as trading gets underway in asia. trade talks of course likely to keep investors on their toes after some narrow losses on wall street. bloomberg cross-asset editor, -- hong kong back from a holiday as well. what can we expect? >> they are coming back and especially hong kong after this long weekend with escalating tension. that could very well weigh on

markets. australia is up a little bit at the open, but you know, a lot these trade talks. the art thomas -- the outcome is far from clear with competing news on that. we had this blacklisting of the companies, and that is for the recent human rights violations and that could strain tensions between china and the u.s. at the time when they are embarking on trade talks. go, data overall remains weak. there are concerns about global growth. we have got a chart that has just come up that shows bond bears are retreating and cutting the short treasury positions as the outlook for the u.s. economy deteriorates. you know, the fed minutes that are coming out this week are going to be very, very important. they are going to be scrutinized for any clues on what fed policymakers are thinking in terms of interest rates. traders have ramped up expectations for further rate

cuts so a lot of things out there still are weighing on the mind of investors as the week goes on. shery: we are expecting samsung pulmonary third-quarter earnings at any time now. in fact, it asian chipmakers have been driving a technology rally. tell us what is going on here? andreea: that's right. the msci asia-pacific information technology index is up almost 20% this year, and that is despite the trade conflict we have seen and the women doing in the chip market. that rally, as you said, has bygely been driven chipmakers and investors are starting to see a bottom forming in the chip market. is samsungfor that electronics. shares are up more than 20% this year. a lot is expected. some positive news is expected out of its earnings today. we had other stocks like tokyo

electron, sk hynix, have done very well, helping that index outperform the broader asian equity markets, and analysts have turned a lot more bullish on the chip sector. a slide in prices has slowed considerably in the third-quarter, and there is also some optimism that increasing investment in 5g will underpin demand for chips, and therefore, help chipmakers continue with this rally. shery: thank you so much for that. herof course, you can find charts on the gtv library on the bloomberg. there is mounting confusion about u.s. policy towards kurdish allies in syria and turkey. president trump appeared to make a major policy shift by allowing the u.s. -- by saying the u.s. would allow turkish military action over the border but later appeared to backpedal. ours crossover to

washington correspondent. help us make sense of where the president and the white house stands on syria and turkey. theome shifting lines from white house lately. last night, we saw that the u.s. forces would be nowhere near and would not be involved. yes, turkey decided to invade syria. that statement was issued after a call with the turkish president, erdogan, and it marked a stark change in u.s. policy on syria and provoked a backlash on lawmakers, including some of president trump's defenders. trump seemed to respond to the backlash today, issuing a series of tweets. one in which he said that he would seriously destroy and obliterate turkey's economy if they committed some off-limits actions that were not exactly specified. later in the day, we heard from the white house, telling reporters that trump had not actually given the green light

to turkey to invade syria, and then of course, now, it still remains to be seen what turkey will do. this does samsung rather confusing foreign-policy signals in an area which has become a byword for confusion. is there anything that lawmakers can do to take control of this situation? greg: the backlash was really strong from lawmakers, including some republicans, members of president trump's own party. top senate republican issued array of rebukes, calling the move a mistake that would only benefit russia, iran, and aside ssad's regime. a senator lindsey graham said that he would introduce bipartisan legislation to sanction turkey and to call for its suspension if turkeymembership went into syria and attacked the british forces that assisted the u.s. nikkie also heard from

haley, saying that this is a big mistake. senator graham seems to think his legislation on sanctions and suspending nato membership would garner enough votes for a vetoproof majority. lawmakers are already upset over the fact that turkey has purchased the russian antiaircraft missile systems, so there is some palatable anger there. it is possible they could get some votes to pass the legislation to sanction turkey over this. how robust that is, that would depend largely on what turkey does at this juncture. paul: on another foreign policy front, the impeachment inquiry into president trump over the dealings with ukraine shows no sign of slowing down. what is the latest here? greg: things seem to be continuing apace. we know that the second whistleblower may emerge. congressional committees planned to hear from more witnesses tomorrow and throughout the week. house lawmakers are not slowing down there impeachment pursuit

at all at this juncture. now, it seems likely that to losey, depending on what comes out of these inquiries, could get the votes to impeach president trump, but actually removing him from office would fall to the senate. as of right now, republican lawmakers do not seem to be breaking ranks with president. he remains popular among republican voters. it would be a politically risky move to actually break with him given republican support for the president. so while it does appear that the house could be moving quickly towards impeachment, removal from office does remain a long shot. shery: marc sullivan, thank you so much. -- greg sullivan, thank you so much. for the third quarter operating profit, reporting 7.7 trillion won. this is a beach. -- a beat. this is much lower for the year on your numbers but it is still a beat when it comes to

expectations. third quarter operating profit coming in at -- and the third quarter. sales coming in at 62 trillion won. this is higher than the estimate of 61 trillion won. operating profit, 7.7 trillion won, much higher than estimate. we have seen the profit slowdown continue at samsung, especially after the second quarter. we saw weakness on dram and price declines. we have seen some improvement recently when it comes to those dram chip prices, so we are now seeing their third quarter operating profit beating expectations, coming in at 7.7 trillion won. the stock year-to-date has gained more than 23 percent. joining us on the line from san francisco is the senior analyst. give us first your take on the latest samsung numbers, a beat

when it came to expectations, but much lower than a year ago. >> absolutely, and thanks for having me on the program. yes, the results were expected. what is significant is their operating profit shows sequential improvement. that got intoers the september quarter have indicated a sequential decline. the fact that samsung is able to demonstrate this growth in operating profit is positive. having said that, without concern for the memory prices that are still going to be at a depressed level, my concern is that this is a one-time event, and the quarterly operating profits will show a sequential decline into december. we need to wait for the samsung quarterly earnings later this month to get that died. i am expecting a better-than-expected september,

but december to come in below expectations. shery: you are really not seeing the bottom yet for those chip prices? mehdi: we are seeing that, but we are not seeing a significant improvement in prices. i think it will be a slow improvement in price for memory chips, and therefore, samsung's margin would take some time before they show sustainable improvement. shery: -- paul: as encouraging as these numbers are, the profits are still way off last years, so what can samsung do to recapture the sort of performance that we are used to seeing? are all the hopes around 5g? is oversimplified. i do believe that samsung will benefit from 5g infrastructure, but for 5g, it is going to become a significant catalyst. we need to wait for the 2021

timeframe, and obviously, last year was a strong upside. andre looking at the number to compare it is challenging. the quarterly earnings should start to show a sustainable rebound by the middle of next year, and that will be driven by improving semiconductors business unit and that could 5gtain into 2021 as the smartphone fiction. we were talking about -- smartphone kicks in. paul: what about the trade impact? south korea is fighting battles on two fronts. their worst to come for samsung when you take those into consideration? mehdi: a very good point. in my humble opinion, the trade issues have been nothing more aan light a headline -- like

headline. it did not have a material impact. negotiation between the u.s. and china has not really had a significant forct on demand semiconductor chips. there may be some dislocation as supply chain adjust's, but when it comes to fundamentals, i think we basically have gone through a classic downturn. we are seeing it bottoming. to a large extent, the recovery depends on the global economy. to me, the trade issues are nothing more than a headline. shery: what about when it comes to the huawei issues? how much has samsung benefited from huawei's problems with the u.s.? mehdi: i would say none. when it was announced in may, we thought samsung and high next woodgate some shares against next -- sk high

hynix would have some shares against micron. it did not change the comparative landscape. paul: senior analyst, mehdi hosseini, thanks very much for joining us to break down those samsung members with us. don't forget, you can always find in-depth analysis on bloomberg radio. broadcasting from our brand-new studio in hong kong. tune into daybreak asia from 6:00 a.m. hong kong time. that is 9:00 a.m. in sydney. you can download the app. bloomberg radio plus or access it via bloombergradio.com. this is bloomberg. ♪

shery: this is "daybreak asia." paul: this is "daybreak asia." and i am paul allen in sydney. one of the federal reserve's most -- is arguing for more rate

cuts just one day after the fomc's most ardent hawks. she is still not convinced that more stimulus is needed. kathleen hays has the story. neel kashkari on one side of the ring. esther george on the other. who will win? su: formidable opponents. -- kathleen: formidable opponents. we can put them on two sides of the argument. if we start with neel kashkari, when the fed was reluctant to cut rates early this summer, jim basisd was -- a point cut. sees risks-- he continuing. global economy slowing. inflation below target. he says we need to support the economy with rate cuts, that is, not cap on the brakes. here is what he said earlier today. cuttinghappy we are

interest rates. i don't think we should be raising them. how much more do we have to cut? i don't know yet. kathleen: let's move onto to esther george. she has dissented against both times the fed has cut the key rate by 25 basis points. he was speaking 24 hours ago in denver. she repeated what she said in the past. the economy is ok. labor market still strong. people are spending money. you do not need to cut rates until you see a slowdown. you only want more cuts if the data say there is a need for easier monetary policy. is not that far below target. cutting rates is not going to necessary boot -- necessarily boost it. close to 2%, close enough. jump into the world interest me -- productions with projections with me. , here is the

october meeting, getting closer and closer. chances are seeing another 25 basis point cut. to december, maybe 40%, so not so much conviction because the jobs report was not quite weak enough . some people see that. some people, shery, are doubting there could be an october cut. some people say may be the fed could pull back and wait until december. shery: given the diversions, who can blame them. where do we expect chair powell to come in here? up.leen: let's set this jay powell speaks for the whole federal open market committee. he spoke very briefly on friday and he repeated his mantra. the economy is in a good place. besides saying that the economy is in a good place, he also recently said, more times

than one, the fed will act as needed to sustain economic expansion. that is seen as a sign he will do what it takes. if he thinks the economy is weak, he will do more. he seems to be on the side of insurance rate cuts. he said at the last meeting, after the last meeting, at the press conference, research shows that if you are concerned about a slowdown, it is better to get out ahead of it to be preemptive than it is to wait. on tuesday at the national association for business economics. this is the perfect time for him to make these points and maybe he will talk a little bit more about the beauty of central-bank independence. something he talked a lot about today when he was celebrating mostistory of one of the noted and expected fed chairs in history, who he credits with setting up and enshrining the central-bank independence that the fed enjoys, something that is probably very important to him given what he has gone through. shery: given the political

environment. kathleen hays, our global economics and policy editor. breaking news out of japan. we are getting the japan current account surplus coming in at ¥2.157 trillion. this is higher than the previous month of july, and it is also higher than estimates. the surplus has been widened to ¥2.157 trillion. we know that japan has a pretty strong net foreign asset position, a strong source of support. bloomberg intelligence thinking the primary income from overseas likely picked up. we have seen japanese investors increasing their holdings of u.s. government bonds in july. we will have plenty more, coming up. this is bloomberg. ♪

paul: this is "daybreak asia." i'm paul allen sydney. shery: i am shery ahn in new york.

the trump administration has placed eight chinese tech companies on a blacklist. accusing them of being located in humans rights -- human rights violations against muslims and shenzhen province. multiple companies. some analysts say they can -- paul: the union representing pilots in southwest airlines is suing boeing for rushing the rollout of the 737 max 8 to stay competitive. the suit claims boeing made a calculated decision to rush a b engineered aircraft to market to secure market share and prioritize its bottom line. the union says it is seeking 115 million dollars for damages sustained through this year, primarily for lost pay and legal expenses. its chinese and pearman are planning to merge their power unit operations into a standalone company, aiming to cut costs as they shift to a

fully electrified lineup. it would supply to million combustion engines compared with a 600,000 turn out currently. it could supply competing auto companies, although none have expressed interest at the moment. anz: and fed has taken -- bank has taken a charge for wrongly charged fees. it is the latest mediation moved in a bid to restore consumer confidence. last week, the national australia bank set of five $560 million to compensate giving bad advice and selling junk insurance, taking his total payout to $1.3 billion. in on asian markets. in australia, we are higher by .3% other giving up some of the earlier gains that we saw. new zealand has taken a turn for the worse, now off almost .3%. nikkei futures out of chicago looking kindures

of flat right now. still to come on the next hour of daybreak asia, trade uncertainty gripping investors around the world. the asian markets strategist will give us her outlook and the market opens, next. this is bloomberg. ♪

paul: good morning. asia's major markets are about to open for trade. shery: i'm shery ahn. welcome to "bloomberg daybreak: asia." ♪ paul: our top stories this tuesday, the u.s. confirms china's top trade negotiator will be in town on thursday. a new tech blacklist casts a shadow over the talks. the white house backtracks on turkey move into syria. president trump warns he will

smash the turkish economy. shery: and samsung third-quarter profit and sales beat estimates, but are still substantially down from last year. paul: let's get a check of what is happening on the market right now. japan and south korea have just opened for trade. currently we have the nikkei higher by a better than half of 1%. heavyweightndex samsung announced unexpected results for the third quarter, although still down substantially on the year. byaustralia, we are higher 0.3%. we've got the kiwi off 0.2%. look at that 10 year yield down at the bottom of your screen, 0.87, that is a record low on the aussie 10 year. shery: we have breaking news at the moment. we are hearing from hong kong

exchange that they will not be proceeding with the offer they made for the london stock exchange. the hong kong exchange saying they will not proceed with that offer they made towards the london stock exchange. we had seen some challenges for that offer. some of them were perhaps political challenges, given hong kong ex trying to buy the lse might not be well taken by the u.k. we are getting headlines that they will not proceed with that offer. let's get the first word news with riddick a group that. >> the lira fell after president trump warned he would obliterate the turkish economy if its military over steps and uncertified line against turkish forces in syria. the president sparked criticism by saying would allow turkey to cross the border before backtracking and making his warning and the white house is

adding to the confusion by saying trump did not endorse military action against kurds. hong kong subway system is almost back to normal after a long weekend of test -- of protests left several stations badly damaged. some stations will remain closed and all trains will stop running at 8:00 p.m. hong kong is cleaning up after an 18th weekend of unrest. president trump has warned china that trade talks would suffer if anything bad happens to the protesters. >> i would like to see a humane deal worked out and i think president xi has the ability to do it. he's a very convincing man and i think if he met with some of the leaders, that could be one problem, you don't seem to have a specific leader. >> a new index from the san francisco fed suggests china probably is expanding at a

pace close to what figures claim. the china cyclical activity tracker uses eight indicators, including retail sales and exports to estimate how growth deviates from the underlying trend. butays china is stalling, is not about to collapse. the world bank is joining the growing list of institutions warning about global growth. they say the outlook is worsening thanks to the downturn in europe, trade tensions, and uncertainty surrounding brexit. the president says the world economy now looks even weaker of 2.6% forecast growth this year. 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 riddick a group. this is bloomberg. shery: the trump administration has blacklisted eight chinese tech companies, accusing them of

human rights violations. the move comes just as u.s. and chinese negotiators began preparations for high-level trade talks. our china correspondent tom mackenzie is in beijing. .t is not just this commercial we are also talking about public. give us the latest on this move. tom: you are absolutely right. private firms and also public entities in shenzhen in china. what we are hearing from the commerce department in the u.s. is these companies and entities are being blacklisted because of implications for their involvement in what the u.s. is saying are human rights aroundons and abuses mass detention and high-tech surveillance against muslims. this is a region where, according to the united nations,

up to a million muslims are incarcerated in what some call reeducation camps, others have called concentration camps. these companies are seen by the u.s. as being involved, not just in those camps, but in the broader surveillance state, and they are being blacklisted according to the u.s.. biggest of some of the surveillance companies in the between them, about one third of the market of surveillance equipment and cameras. and then you have the software makers, particularly artificial intelligence. as as labeled by beijing national champion when it comes to artificial intelligence. and a startup based in beijing, one of the most valuable startups involved in ai in the world. those companies have been blacklisted as well. this is evolving.

it is another front from the u.s. in terms of their restrictions on china. shery: tom, so the move itself is not surprising because we have been hearing speculation about this potentially happening for months now. reviewedlast year had legislation to this effect. the timing seems to be crucial here. tom: absolutely right. to some extent, beijing's officials shouldn't be taken by surprise. it has been in the works for so long. it has all been about the timing. they've done it now, as you say, and is it coordinated? is the commerce department coordinating with this? it would be a surprise if they weren't. is this going to make those trade discussions in washington more difficult? it would seem it is adding

another fly in the ointment. we know the vice premier is on his way, if not landing soon, to continue those talks. we've got reporting from the bloomberg team in d.c. as well around china trying to limit the scope of these talks, not putting subsidies on the table. trump still saying he wants to get a comprehensive deal. there is this significant gap between the two sides. the blacklisting of these companies would seem to make it more difficult. beijing saying the u.s. is determined to check china's rise. paul: have we had any reaction from china yet, and what might we expect to hear? tom: we haven't had any official reaction yet area -- yet. we are looking at the state media. there will be press conferences at some point in the week.

we will hear from officials to get an official response to this. something we should look out for ,s the unreliable entities list a list of u.s. companies and others that it would restrict access to in terms of access to the chinese market. whether or not they add to that list, we've been waiting for it to come out. that may be one area of response from beijing. then there are other measures they can put in place. that would be the concern from the u.s. corporate lobby groups who have a footprint in china. that is why it is important to look at the beijing response to this officially and unofficially as well. we are going to be monitoring that closely. paul: tom mackenzie in beijing, thanks very much. let's look at how this news will affect markets. garfield, china has been off on holiday for a week.

there's no shortage of news to trade. what sort of news might we expect? garfield: i'm not sure we are going to see a huge amount of movement in chinese market, especially -- if you look at chinese stocks fell quite severely into the end of last month. while they've been away, the china etf's have recovered. the chinese offshore yuan has also been relatively stable. it is often difficult to pick what is going to move the chinese markets. the trade situation in a lot of ways is not particularly worse than it was when china went away. to some extent, we might be a little bit favorably set up for markets. until this latest move i the by the u.s., which drew

down expectations for what can be achieved at the talks, you had this clash of aims. trump has been saying he wants a broad deal and china was saying they won a narrow one. now both are effectively reminding everybody that you are not going to get some big, swinging deal that is going to wrap everything up in a bow. expectations have been lowered enough that there is less potential, perhaps, so that is throwing a dart at a dartboard in a lot of ways. there's probably lower expectations and, therefore, perhaps skewed to the upside for what markets will be able to get their teeth into once the negotiations take place. shery: what about some reaction from the markets on eco-data out of china? we had manufacturing numbers.

servicesget the pmi number out of china as well. numbers werese pmi actually, comparatively speaking, quite good considering what came after for the rest of the world. they slightly beat expectations , andhe official numbers then i think the manufacturing pmi actually beat expectations. taking that along with the mix of data signals that there have been leading into those readings , as the fed's tracker was showing, china's economy is slowing. it is a bit volatile. but it is not collapsing. that is kind of the message you've still got from the data. thank garfield reynolds,

you so much. of course, you can find garfield's commentary on the blog at mliv . there's analysis from bloomberg's expert editors. you can find out what is affecting your investment right now. still ahead, we have a pair of strategists as chinese markets return from the golden week holiday. jennifer chen lai says long-term investors may want to take this opportunity to lift their holdings. paul: and ig asia markets strategist jingyi pan tells us how she sees currencies and gold. this is bloomberg. ♪

shery: let's get a quick check of our current futures. we have seen some weakness for the japanese yen and it is currently trading around 107.32,

this after weakening on news of china's willingness for a partial trade deal. we are seeing the offshore yuan at around 7.1327, this after the offshore yuan headed for the biggest decline in more than a week on monday. the onshore yuan market will reopen today after that week long holiday. paul? paul: thanks, shery. chinese markets are returning after their break. investors likely to focus on trade talks in washington and the situation in hong kong. joining us from singapore, market strategist jingyi pan. plenty to keep an eye on. let's start with that yen strength. it has been easing back a little. where do you see the yen heading? is the kindar, this

of noise we have in the market. we see the yen itself strengthening in what could be a volatile october. i think a lot of other political risks are in the picture as well. surprised if it clocks a little more down, 105 to 106. expect that isou going to get onto the radar of the boj? do you think we might see a return to intervention? japan hase bank of been watching this situation, ,ut with what we have right now i wouldn't say that could be a level for the doj to be

particularly concerned at this point. we know that they are going to be a little bit more -- in terms of scrutinizing the situation of the economy. think in terms of the yen strength itself. [indiscernible] another haven asset that has rallied in 2019 has been gold. insaw the first price fall five months in september. is this a turning point or is there still room for rallies? good morning. i think that situation is a bit of a mixed picture. much different from $1500

traded in usd terms. tamed by the fact that we have the u.s. dollar strengthening. [indiscernible] in the near term, i think there could be some risk sentiment heightening this again. even though in the longer term -- in the near term, the weakness itself could help with gold prices climbing a little bit. shery: weakness for the dollar against other asian currencies as well? we continue to see asian central bank coming to the fray and trying to ease along with the fed. jingyi: exactly. i think that is the reason why

-- [indiscernible] if we look at the asian bloc as --hole, i think the weakness it is still uncertain. we did see some signs of civilization with china into september, but the picture remains -- [indiscernible] in that environment of dollar strength, do you steer clear of the yen, or are there some opportunities if you are going to be active? in terms of the asian

currencies, it is really about the time horizon. in the near-term, with regards --u.s. dollar -- this is [indiscernible] that could give the asian currencies a little bit of breathing room. we get a little clearer with outcomes out of the u.s.-china trade, and a little tariffs inthe september, and whether more tariffs may come, i think that is the point of time to look. [indiscernible] jingyi pan, always great having you.

thank you. you can get a round up of the stories that you need to know to get your day going in today's edition of daybreak. also available on mobile. you can customize your settings so you only get the news from the industries and the apps you care about. this is bloomberg. ♪

paul: this is daybreak asia. i'm paul allen in sydney. shery: and i'm shery ahn in new york. samsung has announced third-quarter earnings that beat estimates, but still less than half of what the company reported a year earlier. kim joinss reporter us now from seoul. we saw samsung rally as much as 1.4%. investors seem to like these numbers. what are your key takeaways? mentioned, rising

as much as 1.4% in seoul, and third-quarter earnings beat the highest estimates. to several people after the results and there response was, it is better than our thistation, but honestly, was somewhat expected. it doesn't mean that much for them. what they are seeing is, maybe earnings wast, the a little better than our expectations. here some market speculation that samsung may be reducing in some other businesses. wereis why their earnings

slightly better than market expectations today. paul: to keep it in broad context, profit is still a long way off where it was a year ago. what is the outlook? say that whatrs they are seeing is now the conference call of the samsung electronics, which is the end of this month, and what they want to hear from samsung is how samsung is impacting the prices , which is said to be making a faster turnaround, and they also want to know what is going on with the samsung technology as well, and also there's some speculation that samsung's display business might be better than their expectations.

seriesto the iphone 11 or something like that. paul: all right. kim, stocks reporter heejin thanks for joining us. let's get a check of the business flash headlines. hong kong stock exchange has scrapped its bid to buy the london stock exchange and says it is disappointed and it is no longer in the best interest of shareholders to pursue the proposal. this comes ahead of a wednesday deadline that required the hong kong exchange to revise the terms of its offer. shery: do you think you could convince a robot to hire you? singapore is using a chatbots to help find candidates for wealth management business. says his lack of natural bias and prejudice when talking to candidates has already improved the initial

screening process. paul: don't forget, you can always find in-depth analysis and newsmakers on bloomberg radio, now broadcasting live from our studio in hong kong. this is bloomberg. ♪

paul: 8:30 in hong kong. close on monday for a public holiday. an interesting session when we get underway. asia,"watching "daybreak a let's get a quick check on the markets. we are getting positive sentiment. seeing the asx 200 gaining 0.4%. every sector is in the green. the nikkei is seeing its biggest jump since september 13. almost a month. we have seen weakness on the yen on news china could be willing

to sign a partial trade deal. the kospi higher by 0.5%. half of those gains are being by electronics, with better-than-expected sales and profit numbers. >> trade talks are back on track this week with the white house confirming the top chinese negotiator will be in washington on thursday. the administration said they will be looking to build on lower level discussions in recent weeks. will include intellectual property rights, nontariff barriers, and enforcement. chinese companies trading in new york jumped in mid session after top white house economic aid larry kudlow dismissed speculation they could be delisted. reversed,d jd.com while tencent paired declines throughout the day.

the generally positive mood did not last long. all four companies close the day in the red. on thesting is not table. i don't know where that came from. ist we are looking at investor protection, u.s. investor protections. transparency. compliance with a number of laws. >> the white house welcomed movement on a trade deal with japan. president trump and prime minister abe agreed to the broad outlines of a deal last month and a final draft of the digital trade agreement has now been signed. the u.s. agreed to hold off tariffs on cars exported from japan. climate change activists rallied around the world, culminating in a die-in outside the new york stock exchange. the demonstration demanding much

more urgent action from politicians and big business. the campaign started in australia and new zealand and rolls on through europe and onto the united states. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. mounting confusion about u.s. policy toward kurdish allies in syria. and nato member turkey. president trump appeared to make a policy shift by saying the u.s. would allow turkish military action over the border. he later appeared to backpedal. it's spring in her senior international editor -- let's bring in our senior international editor. onwe have any more clarity where the white house stands? >> there has been a lot of back and forth on this. president trump had ordered u.s.

troops be removed from this hiser area of syria and comments, his first comments appeared to say the u.s. was giving a green light for an incursion of turkey into that area after two years of the u.s. trying to dissuade turkey from going there, partly out of --cern for the u.s. allies kurdish u.s. allies. now a senior u.s. administration official is saying that was not what president trump meant. what he meant was he did not want u.s. troops in harm's way if that was to occur, but the u.s. was not giving a green to that incursion. , bipartisanantime condemnation from congress. senator lindsey graham, known to be a trump ally, condemning this latest move. what have we heard? >> you are right.

not just democrats, who you would expect to criticize the president on foreign policy, but also republicans, including lindsey graham, including former haley, whoary nikki has been a big supporter. she was obviously appointed by president trump. there is a lot of concern. kurds, but about the also the way this was done. all of a sudden, a tweet, an order. it seemed to come out of no over -- nowhere and it would undo years of u.s. policy. senior administration officials spoke to bloomberg saying that's not the case, that the pentagon knew about this, the state department knew about this, but there is a lot of concern about all of a sudden, quick policy changes that seem to undo things and that could destabilize the region. subject of a potential

turkish invasion, what are officials saying about that? >> at this point, they are saying if that was to happen, if there was any destabilization of that area and any harm to civilians, that would be on turkey. the turkish president would have to deal with that. they are saying this is not something the u.s. is supporting. there has been a lot of back and forth over the past day or so. there is a lot of concern on capitol hill. paul: senior international editor jody schneider, things for joining us. president donald trump is warning china if it does anything, quote, bad to quell protests in hong kong, trade negotiations would suffer. he also suggested the leadership should work towards a solution. pres. trump: i would like to see a humane deal be worked out. i think president xi has the ability. met -- he is a very convincing man. i think if he met with some of

the leaders, that could be one problem. you don't seem to have a specific leader. to hong kong.ver our chief north asia correspondent stephen engle. that is an unusual suggestion. president xi meeting with protesters. how realistic is that? >> that is not going to happen. end of story. it is interesting to listen to donald trump talk about hong kong. over the last 4, 5 months this saga has unfolded, he has made several comments, including alluding to the fact the pla had built up soldiers on the other side of the border. he hoped things would work out, etc. sharpime, a little more connecting what is happening in hong kong with the prognosis of any trade deal with china. he warns china if beijing does anything bad, his word, to quell unrest, trade talks would suffer. he said, quote, they have to do that in a peaceful manner.

as various committees in the house and the senate are still talking about this hong kong human rights and democracy active 2019. -- act of 2019. similar bills have gone through committee fairly quickly. has the fastest case scenario, if you want to call it, this could be put into law by the end of the year. president trump has not indicated whether he would sign that bill. little bit always a surprised when we hear president trump talking about hong kong and what president xi jinping should do because we know that this is a very sensitive issue for beijing. especially when you have trade talks going on. not to mention, several foreign firms in the crossfire of asian's anger. -- a beijing's anger. stephen: absolutely. yesterday the story was about

the general manager of the houston rockets tweeting perceived support for the protest movement that drew a sharp rebuke from the online community in china. backtracking from the houston rockets, which has been hugely popular in china because of yao ming. alibaba,cofounder of he is now the owner of the brooklyn mets. he put out a long statement trying to explain the historical sensitivity in china about any call for separatism, which he mentioned perhaps hong kong is calling for -- you know, a separate state from china, which perhaps it is not necessarily doing, but still, it is muddied. the relationship companies have with china who want to do business with china. the latest is the shoemaker vans. they have an annual design competition and they got one design that depicted the hong kong protesters wearing goggles,

wearing facemasks, wearing the signature yellow hardhats. -- company has had to pull you see pictures. they pulled this from the website competition. they put out a statement. we have never taken a political position and review designs to make sure they are in line with our long-held values of respect and tolerance. keep in mind, there is a franchise holder in hong kong, saying they are suspending operations. they are suspending operations at three of the franchise locations in hong kong. obviously we have seen over the weekend companies have been targeted by protesters perceived to be leaning toward pro-establishment or beijing. paul: another big story this morning, a hong kong exchange scrapping its bid for the lsc. it's not a huge surprise, is it? stephen: no, i think we saw the

reading on the wall -- the writing on the wall, and basically, the hong kong theynge basically saying continue to see a combination with the lsc as strategically compelling and it is disappointing it has not been able to engage with the management of the lse realizing this. rejected thehe lse initial takeover proposal. there were a number of couple occasions ranging from the unrest in hong kong, but also rob him's with regulators. the hkex brought in the likes of ubs to persuade shareholders to reconsider whether this would be a good deal, but it looks as though the hong kong exchange is going to walk away from this one. paul: alright. our chief north asia correspondent, stephen engle. thank you for joining. chinese markets are set to reopen after the golden week holiday. we will see what investors now have to grapple with from

protests to the latest news in the trade war. ♪

paul: this is "daybreak asia." shery: chinese and hong kong markets open in under an hour after holidays. there is plenty for investors to digest with trade talks in washington and the ongoing protests in hong kong. our next guest invests in both markets. jennifer lai is a portfolio manager. they have a lot to catch up with.

the violence in hong kong. not to mention the trade headlines. what is most important for chinese markets? well toarkets respond certainty. any visible progress in the trade talks this week would be very positive for markets. going into these talks, we have seen positive signals from both sides. earlier, the u.s. agreed to postpone tariffs that were originally scheduled for october 1. china had also been buying agricultural products from the u.s., including over 2 million tons of soybeans just in the past month. to me, this seems like both sides have an appetite to come closer and get closer to a deal. shery: we have seen today the trump administration blacklist 28 chinese entities, including commercial forms. up 70% orai composite so this year. jennifer: that won't be good.

any sort of blacklist or further sanctions against chinese companies will not be positive news for markets, for sure. if you are looking at opportunities in china, where do you look? are there still good buying long withies to be the attitude that this too shall pass? jennifer: i agree. the headlines about trade war escalation and about hong kong protests, they are negative. for long-term investors, we have to keep in mind china is a country where gdp per capita has grown 30 times in the last 30 years. that is an in norma's explosion of wealth. wealth.ous explosion of that has created a lot of companies that are profiting from the increase of power of the middle class. it make sense to price in some risk for trade war uncertainty and hong kong protest, but china instill underrepresented

investor portfolios. for a long-term investor, you enormoussure to that growth. you almost can't afford not to. paul: i want to turn the clock back to may. do you change your call? do we just need to be patient? sense to buymakes businesses that take advantage of china's growing middle class. we continue to light consumer-facing businesses. there is a lot of upside for share gainers, including industries that are undervalued. a lot of those companies we find interesting are providing goods and services to chinese consumers as well as taking advantage of overall macro trends such as the growth of i.t. and digitization in the

economy. shery: this gtv chart on the bloomberg is showing us the ratio of consumption as part of chinese gdp continuing to grow as opposed tocade just government investment in green. what are the consumption stories you like within china? could they be susceptible to potential chinese economic slowdown? if trade tensions continue. jennifer: trade tensions have been a headwind toward smaller businesses that have trouble getting financing, but overall, china is an economy that is growing. china still will likely become the world's largest economy in the next decade. ravenousa tremendously middle-class that wants better quality food and beverages, that wants better educational opportunities and all sorts of

travel experiences, leisure, hospitality, restaurants, all sectors we think have good long-term positive -- yvonne: we have seen -- shery: we have seen the hang seng underperform. jennifer: hong kong has been a challenging area, as you know. gdp growth will likely be negative because of the protests and the second order effects. unfortunately, the long-term story for hong kong has become challenged. hong kong has always been valuable for its role as a conduit into and out of china, and that is increasingly being called into question because of these protests. these protests are also negative for the u.s.-china bilateral relations as well. it is now may be the biggest risk to derailing trade talks. paul: how do you see the future

for hong kong? its economic importance to china has diminished. what does hong kong look like in 10 years time? jennifer: that is right. hong kong used to be 18% of china's gdp. now that has diminished to only 3%. a cycle, hong kong companies entering a cycle of earnings downgrades. on the other hand, you have mainland chinese companies that, after a tough 2018, are starting to see positive earnings surprises. relatively speaking, it does make this -- make us more cautious on the future of hong kong. right, jennifer lai, thanks so much for joining us. you can always find in-depth analysis on the bloomberg radio, broadcasting live from our brand-new studio in hong kong. tune in to daybreak: asia from 9:00 a.m. in sydney.

the app ornload access it by bloombergradio.com. ♪

paul: let's get your alerts on the bloomberg terminal. hong kong exchange's director rating up blog post -- or writing a blog post.

best interesthe of shareholders to pursue it. ising the primary obligation to act in the interest of its investors. always acts in the interest of investors to make the best decision on long-term growth of our business. alsossing disappointment with the level of engagement from lse. the pursuit of the businesses was not in the best interests of shareholders. some comments there in a blog post at the end of the bid for the lse. the trump administration has placed eight chinese tech companies on a blacklist accusing them of being implicated in human rights violations against muslims in shenzhen province. the list includes a video surveillance company.

some analysts say they control a third of the local market for video surveillance. >> the union representing pilots at southwest airlines is suing boeing for rushing the rollout of the 737 max 8. the suit claims boeing made a calculated decision to rush a reengineered aircraft market to secure market share and prioritize its online. the union is seeking damages sustained through this year for lost eight and legal expenses. shery: volvo and its chinese parents are linning to merge their power unit operations into a standalone company aiming to cut costs as they shift to a fully electrified lineup. supply 2nit would million combustion engines compared with 600,000 volvo turns out currently. it could also supply competing companies, though none have expressed interest at the

moment. an indian hotel startup is raising $1.5 billion from its founder, and leading investors such as softbank, as it expands into europe and the u.s.. 2013, india'sd in second most valuable startup. it covers more than one million rooms in 80 countries and enters the u.s. market this year. shery: it is not clear what apple plans to spend on content for its streaming service. bloomberg intelligence says a huge pile of cash means programming will not be a problem. assuming relatively few subscribers in the first year, apple would burn about $6 billion, almost twice the amount of netflix. cash flow is expected to top $60 million. a charge to compensate

customers for poor advice and wrongly charged fees. that is the latest mediation move from a big australian lender to restore consumer confidence. aside $550they set million to compensate for bad advice and selling drunk insurance, -- junk insurance. general--shery: electric is taking action. the ceo struggles to turn the company around. ge is freezing pension benefits for more than 20,000 employees and setting aside about $5 billion to cover funding obligations through 2022. it says that should turn the pension shortfall -- trim the pension shortfall by $8 billion. paul: let's have a quick look at how we stand right now. in japan, the nikkei higher by 0.9%. in australia, up by zero point

5%. in south korea, the kospi up by% right now, being driven the results for the third quarter from samsung, coming in better than expected. the kospi trading higher right now. we are seeing more positive sentiment with u.s. futures gaining. it is all about china coming back from a weeklong holiday. we saw the offshore yuan heading for its biggest decline in more than a week on monday. that's it from "daybreak asia markets coverage continues in hong kong, shanghai, and shenzhen. this is bloomberg. ♪

♪ >> it is 9:00 a.m. in beijing. welcome to bloomberg. i'm tom mckenzie. >> i'm david engles. the u.s. confirms china east top trade negotiator will be in town on thursday. they cast a shadow over the upcoming talks. yvonne: the exchange is scrapping its hostile bid for the l.s.d. saying it failed to engage management. tom: and hong calms down. president trump says x