Headquarters. Zealand,oing to new seeing some weakness down 1 10 of a percent. Snapping that losing streak that they saw. We saw comments from the governor talking about further cuts likely to come, but he said several factors could be supporting growth in new zealand. It is not weak enough for large rate cuts as some have been speculating. The new Zealand Dollars but is actually gaining. We are counting down to the opens in australia, japan and korea. We are expecting retail sales from japan coming out later this hour. Bk 225 closing down 1 10 of a percent. Futures pointing to a higher open. The dollar yen is weakening. It is almost as if three weeks of intervention in the markets did not happen we are talking about china. The losses were not as severe as the day before but stocks went down nearly 12 since thursday. Juliette is watching the markets for us. Juliette security regulators say they will investigate what happened on monday when we saw the 8. 5 plunge. Yesterday selloff was not quite as severe. You can say we did have the 5 plunge in open, but it is up by 1 at one point before selling up again. It looks a little stable at 7. 5 . We did see some consumer stocks but it has not been an official word on whether the chinese of 30s authorities will step in. It is a bit more of a stable economy. This is the world swinging on the shanghai composite compared to the dow jones. It was contained to china. Yvonne fortunately, the stocks did not extend to the u. S. The abrs really took a plunge. Juliette you mentioned chinese stocks were down for a third day. We saw the bloomberg chinese equity index down with lowest level in three weeks. Adr fallen by about 4. 3 new york. We are seeing the fear whether there will be continued intervention in the chinese market, whether it is sustainable coming through in those u. S. Stocks. Market,into the overall for the chinese adr is down. Yvonne we keep asking this every day and im sure you dont know the answer at this point, but what should we expect today . Juliette we will expect a wild ride. The numbers of new stock investors in china has fallen to the lowest level on record. Ist suggests this fear getting new investors out of the market. They are going what is going on like we all are . We are looking at futures the futures when i looked at them, it looked like we might see the continued movement in hong kong. It was rising yesterday. Hopefully, we will see more some work more support. Who knows . It is anyones guess what will happen in shanghai. Yvonne thank you so much for that. The relative stability in china helped u. S. Stocks and their longest losing streak since january. Lets go to oliver joining us now. What about the u. S. Overnight . Oliver all the 1 plus moves, i think today was one of the more boring ones, where these not the more encouraging one. Not a lot has changed. I think the big shift was happening overseas, closer to you guys. China was down upwards of 5 during the day and did not close quite as low. That helped the u. S. There is no real sign anything grand is changing. There is no real huge alteration in terms of the story. The earnings season will have about 4 losses. It will be about 4 down yearoveryear. There is contraction on corporate profits. You look at Consumer Confidence that number is not very good either. There is nothing that says we are changing our outlook. What this was more of was relief in that really shows if you look at what happened on some of the movers throughout the index. You have micron, transocean, chesapeake companies that have been pretty weak for the past five days that are finally getting a little bit of a bounceback. They either came down from earnings or the Energy Companies went down because of the oil slide. That is what we saw in the market. It is positive to see some of that reversion, but it is not that it was to be expected. The market is generally pretty uplifting and if things are positive again tomorrow, we will see that. Yvonne people waiting for those to come out. Thank you. You can get more on all the days, stories on our digital destination. Bloomberg business brings the best of news, business week and new Digital Content in one address. Bloomberg. Com macaus big gamble, doubling down on investments despite the chinese slowdown. The latest tech startup investment why it is backing payment providers. That is bloomberg. Com. Check it out. Other stories making headlines weaker than expected Sales Forecast sent baidu sales lower than 2009. It missed estimates by more than 6 . Baidu is not helped by the slowdown in china which provides the main source of revenue. The founder is trying to restructure the business and put more emphasis on mobile and local services. Trade imbalances are limiting Global Growth and contributing to financial instability. That is the key take away from the imf annual report into external balances and exchange rates. It cites chinas largest surplus and the deficit in the u. S. As the biggest driving forces behind the imbalances. China should boost domestic consumption and open up its financial system. Reports from japan says it will replace its entire current an announcement will be made later outlining plans to replace all the directors. The briefing is also expected to give details of Management Changes and the strengthening of internal controls. Toshiba has admitted misstating revenue for over six years. The ceo says it has the status as a leading company. Surges in the most in three years as fashion and leather sales picked up. Profit jumped 15 based on the Strong Performance in the u. S. And europe. That helped lvmhs offset declines in china. U. S. Demand for cognac compensated for consumer weakness in china. Twitter is tumbling in extended trade after executives warned user growth will be slow, despite beating revenue estimates. Terim Ceo Jack Dorsey and the cfo said it was finding it hard to attract new users. Sarah frier has been tracking all the developments. Why are twitters efforts not panning out . Sarah it is surprising to twitter. They thought a lot of the product update they were making like making it easier to become a user would have helped the user growth, but they solve very flat organic growth in the quarter. The company was pretty honest about how they felt this really was not this is something that will take a lot longer than they anticipated. Yvonne twitter is still hunting for a new ceo. Jack dorsey, this is his first conference call. How is that going so far in that process . Sarah i just got off the phone with the jack dorsey. He is dodging my questions about whether he wants to remain in the position at square and twitter. He will not say if he is picking one job or the other. Basically, this call was important to bring either way because if he remains ceo of twitter, or hired, here is building relationships with investors if he stays with square, they are aiming for an initial public offering. He could be a Public Company ceo there too. He did pretty well. Yvonne when it comes to user base, that is still a big issue for twitter. It is much smaller compared to its competitors like facebook. What do they have to say about this quarter . Sarah they said and so they could tap into the masses, they will really not see much growth in users. They said they will have to launch a Wide Marketing Campaign to tell people exactly what they can get out of twitter. A lot of people dont understand why they want to use the product. Executives were very clear with wall street that twitter has had trouble explaining why people should be on twitter. Yvonne some honesty could be good. Sarah frier, thank you for joining us on those twitter earnings. We will hear from one company that is taking advantage of the slump in gold prices. The treasurer of ppurse mint joins us next. Yvonne checking on the stories making headlines greece has moved a step closer to reopening the stock market. The ecb has approved proposals for trading rules. The timing of his return and any additional restrictions will be decided by the finance ministry. The ecb is not formally responsible for stock market regulation, but policymakers were concerned that a reopening could worsen liquidity of greek lenders. The north korean envoy to the United Nations has given a rare press briefing rejecting the iran deal. He said his country has no interest in such an accord as it is already a nuclear state. He said the weapons are needed to protect north korea from what he called hostile u. S. Policy. International talks on the Nuclear Programs have installed since 2009. The investigation into last years crash of the Virgin Galactic spacecraft said the designers failed to anticipate human error. Triggered thet brakes to early causing it to this in a great. Reports makes clear that virgins Partner Sales composite should have had that in the design. The copilot died in the crash. U. S. Stocks snap their longest losing streak since january. Ups shares jumped the most since 2010. Their stock estimates helped by a new pricing system. Shares up 5 . Ford gaining after seeing a 44 surge in secondquarter profit. The automaker posted north american income. Crude oil reentered a bear market last week as the continuing glut. After five Straight Days of losses, the s p 500 back in black. The index closed at 1. 2 up. Gold remains a fiveyear low, but has plunged in prices which has seen rising demand for the physical metal. Lets talk to perth mint. We are joined by treasurer nigel moffatt. Thank you for joining us this morning. We talk about the market for gold these days and there are some real fear in the market for the first time, but you say demand seems to be growing white now right now. Why is that . Broke theuppose gold mark. We have seen a surge in in demand. We were probably just dripping before but now it is running full trough. Biggestw, our restriction is the amount of unrefined gold we are getting from producers, because everything we get in is going straight out of the doors. They demand right now. It is not just into asia. We are seeing this in coins as well. Yvonne in this market right now though, we are seeing china by less in the metal than the market expected. Who do you see is buying right now . Nigel well, basically, we distribute in the market via the banking system, but we know it is the traditional buyers of gold who are taking it. That basically means china, india. Also out of thailand as well. We find these countries tend to bars and look to stock up on the price is right. Yvonne a lot of people have been talking about this for the last couple of days and weeks. It has been a painful two years for a lot of the gold miners and the gold bull. We see a lot of people talking about prices dropping below 1000 and could even reach 800 in the worstcase scenario. The Bigger Picture what the uc for gold rices what do you see for gold prices . Nigel gold prices are hard to call at this point, but i think one of the flaws in the market is the cost of production. If it falls below the cost of production, it makes it worthwhile for a miner. In australia, we have a slightly different situation because we have a weakening australian dollar. That puts the gold price around the 1500 market. Australian producers are doing remarkably well at this time. Yvonne sure. You know, you talked about the impact on production on some of these prices. How big of a hit do you expect for the miners, maybe not the australian ones . Government, as a owned organization, we actually dont make predictions on the gold price, but we have to watch it very closely. It is good to say there is some support at this point of time around 1070, but at this point i have to say i would not be at all surprised to see it fall. There is expectation we will get and clear the1000 market out again before it has another run. Yvonne some even argue in the discussion about gold is it a valuable alternative currency . No dividend, no yields. The strong dollar maybe it is better to buy bonds. What do you think of those critics . Nigel well, they are good points. I get that is really why we have actually seen gold going down to where it is at this point. However, gold still does have intrinsic value, too. You can look at the various Central Banks around the world, particularly in russia and the former russian states who have been buying to bolster their reserves. The belief in gold has not disappeared completely. We are still seeing supporters, in the official market too. The amount of individual interest that seems to have been generated in recent times is interesting. Down to small investors as well. If you look at the coin market, for example, the only restrictions on coin sales is the amount we can produce. If we can find more skilled press operators to make more coins, we would be selling more as well. We have big demand out of the u. S. And europe. They filtered out into the hands of individual buyers, too. There is a lot of demand that is suddenly hitting the market. Yvonne what about dual the weler retailersew because you are seeing demand out of asia . In hong kong, retail sales have taken a bit of a tumble. Nigel yes, jewelry. We dont take accurate readings on the jewelry market. It seems like it is more the investor market and collector market when it comes to coins that are actually the source of demand at this point. Jewelry seems to have taken a hit. It is not a good market right now. One of the other areas too is our depository market. We just launch the new online product here. 24 7is just an online, product that enables people to invest and buy in gold. Once it is live, it is more advanced beta testing. Publicity buto hundreds of people have found us through the website and open to account with us. A very publicity at all, viable business is just starting out. This is just individuals taking views on gold. Yvonne sales are taking momentum. Nigel moffatt, thank you for joining us. Next, out with the old and in with the new. Minister hasime criticism over the scandal. We will have details after this. Yvonne malaysias Prime Minister has dumped his deputy amid questions about his leadership over the scandal related to a state investment company. Razak is facing his biggest challenge yet. Lets bring in our correspondent. Good morning. Run as to the background of this cabinet shuffle. Has he says you must have a solid and unified team running in the same direction while he accepts dissent and criticism, they should take place within the cabinet. He obviously is referring to the rumblings and pressure from within his own party. His deputy yassin has been stepping up calls in recent days for najib to clarify the investigations. Hisnew deputy is hammidi, minister who stood by najib. He is the one that said allegations to put the Prime Minister border on a criminal. Also, four other cabinet changes. They are replaced by members of one of the groups investigating. Yet another replacement. The attorney general on the task force investigating the money trail. It is said to be for health reasons. Yvonne hamidi is seen as an ally to the reserve. What has been the reaction to this rumbling recently . Haslinda well, some will say they cabinet shuffling was seen as a way of sidling questions, a sign of a lack of direction. They also say the changes najib made could lead to a bigger headache for him. Still, it wont be easy to remove najib. He still has a lot of support from within his party and us because of his popular policies, he has built since coming to power six years ago, he has put in place various promalaysian policies. He is in a comfortable position in terms of support. Yvonne thank you. Coming up next, back in fashion. We will look at what is helping lvmh to its biggest profit jump in three years. Yvonne good morning. Taking a live look over victoria harbor right now. A Beautiful Day for a ferris wheel ride. We are waiting for the opening day for australia, japan and south korea. You are watching first up. The top stories this hour the selloff in china slowed. The china composite reversed most of its losses after seeing its biggest oneday loss since 2007 on monday. U. S. Traded chinese stocks fell for a third day, slumping to its lowest in three weeks. There is speculation that official intervention is not enough to prop up the slowing economy. Oil has ended its longest losing streak since january. Crude rebounded as u. S. Stocks helped fuel gains in the energy market. Brent entered a bear market in the past week despite the overnight climb, oil is heading for a monthly decline on signs of global surplus will persist. Twitter is tumbling in extended trading after executives warned user growth will be slow. Interim Ceo Jack Dorsey and the cfo said the company will not see sustained meaningful growth for some time. Sales did Beat Estimates though. Revenues jumping more than 60 to about 500 million. The company said there is no update for a search for a new ceo. 50 prettyland the much flat. The new Zealand Dollar is taking some strength this morning after the governor said much depreciation is needed in the dollar. It is up about one third of a percent right now. We are also coming down the openings in australia, japan and korea. Japan retail sales coming out and about 15 minutes. We see about a 9 lost from last month. Pointing to a slightly higher open of about 1 10 of a percent. It was down yesterday when it closed. Ise dollar yen hi staying flat. Crude prices have rebounded from a fourmonth low, ending its losing streak since january. Prices heading for a monthly decline on signs of global surplus. Lets go to Bloomberg News Energy Reporter dan. He joins us live from houston. Good morning. How long is this supply going to last . It will not go away anytime soon. Saudi arabia and iraq has reported record production this summer. In the u. S. , even though they cut half of the rates from the shale rigs, we are not seen much of a dent in production. Bank of america says they see the crude supply glut lasting well into next year with an oversupply of over one Million Barrels a day until 2016. They reduced their forecast for the Fourth Quarter oil prices. Brent is down from 54 to 50. So, they dont see it going away. Bp echoed their statements in their Earnings Call today. The ceo says oil will be lower for longer. Yvonne lower for longer, that is what we should expect. What are Oil Companies doing about it . Dan they are doing the only thing they can do which is cut costs to balance out what they see as cut revenue from lower prices. Chevron, bp came out that they would be selling hundreds of millions from their budgets. Chevron is eliminating 1500 jobs to save 1 billion, including 950 jobs in houston. Yvonne it does not look too good. How are traders responding to this glut . Dan traders are doing a lot of different things. Said theys sheri su there are tankers going to south africa. They are buying crude oil now while prices are reduced because of the glut. You lock in higher prices in the future. It is low risk, possibly high reward trade that traders are using the supplied a lot to supply glut to make. Yvonne thank you so much. The combination of depressed Energy Prices and economic sanctions has pushed russian banks and its Big Companies to look to china and hong kong for cash. David is looking at this for us. What is this all about . David it is a great story. It is on bloomberg. Com. Down, theil prices dollar ruble pushing past 50. The russian corporates have had time getting down from the dollar debt. The big reason is the primary market. The banks are looking at more friendly places to help their clients raise money which is fairly critical because there debtbout 120 billion in across russian corporate that needs to be refinanced. That has been in the form of simple credits. Syndicated loans. The latest is the banking problem. Applying for a license in hong kong to offer underwriting services. I think it would be get help their energy rates. Btb became the first russian lender to be given a license to trade in chinas bond market. The exchanges also expecting some of the russian corporate will be enlisting their debt on their own exchange. I think this comes at a time that is fairly interesting because the debt issued in chinese currency has dropped about a third compared to last year, but it is about time as well, because you have the last time we saw a russian corporate issuing in that debt was way back in january 2014. It is about time. Yvonne what kind of yields are we talking about . David if the issued it now, they are looking at higher yields. It would have to be more expensive. Part of that is the currency exposure. In other words that the risk the ruble falls against the chinese currency. We have sliced and diced the data. That is the market average. Can we get back to the other screen . 4. 3 is the average yield. At the low end, russian corporate state to pay about seven points. The higher point is 8. 8 . The advantage is china is encouraging it. Trading in this currency, it is actually doubled. It is a natural hedge. Yvonne thank you much for that. Now for look at other stories, here is haslinda. Confirmed itar has is in talks to buy a stake in indias biggest carrier indiego. It is denied reports it is negotiating with other jets. Low shares and Economic Growth has boosted incomes which helped indigo became a rare bright spot in indias competitive aviation sector. Carriers have lost a total of 10 billion since 2009 and ipos have fallen below sale prices. Amazon says improvement in the policing of air traffic will be eccentric before essential before they can bring out the drone delivery. They have worked they have agreed to work with nasa in the u. S. Amazon has created a drone delivery unit, but current laws do not allow such a thing. Intel and micron are starting production on a new memory chip which they claim will change how computers access big data. The new chip is said to be 1000 times faster than what is currently in use. It is also the first new mainstream memory chip to come to market in 25 years. Intel and micron say the new chip will target new applications. We think the scope will be during a long period of time across all types of computing from the highest performing supercomputers down to small devices as well and to the internet of things. Haslinda that was a look at some of the top headlines this hour. Yvonne the Worlds Largest luxury goods maker has been earnings estimates. Sales of lvmh fashion and Leather Goods accelerated in the first half which drawn growth in europe and the u. S. Lets go to sherry ahn joining us with the numbers. It is offsetting what we saw here. Sherry they are saying the sales in the First Quarter did pretty well, but not so great in china. Let me break it down for you. Theych conglomerate had earnings increase the 15 . Profit rising to 5. 3 billion which is better what analysts estimated. Revenue up 19 . Strong growth in europe and the u. S. , not so much in china. Bernard arnault said they saved the second half of the year with confidence. What helped them this time of year was the division. They have a turnaround. They rebounded from 1 drop to sales rising 2 . As we see this u. S. Demand for cognac in the u. S. Offsetting weaker sales in china. Yvonne that is less to giftgiving. It seems like we are seeing a westwardinese heading to go shopping to buy these luxury goods. Luxury makers seem to be shifting westward to chase some of these tourists. Shery it is not necessarily Chinese People are not buying. It is just that they are not buying in china inside china. They are going to u. S. And europe to make those purchases. We are seeing the luxury markets shifting back westward. That has been happening since 2012 when we saw this corruption crackdown. Not to mention, we are seeing slowdown in china. Burberry is saying their sales were boosted by rising the number of Chinese Tourists shopping in china. Hong kong is seeing this plunge in sales. Is trying to appeal to the wealthy chinese. The owner of the gucci brand saying they are hoping to ask their rent to be lowered in hong kong. ,ong kong has huge rent to pay not just for companies, but for residents. It is pretty expensive. The land owners dont seem to realize that the market is not the same anymore. Burberry said they are hoping to renegotiate here in hong kong. Yvonne changing strategy and asking for lower rent. We all need that. Coming up next, microsoft releases its latest operating system. We will talk to one person who was already tested it. Brian joins us after the short break. Yvonne checking some other stories making headlines the malaysian Prime Minister has sought to head up any challenges to his leadership by dumping his deputy. He is facing the biggest crisis of his six years in power and in investigation into troubled state investment funds. There have been allegations that 700 million from the firm and it up and bank account bearing the Prime Ministers name. Zimbabwe is searching for an american tourist who shot and killed a wellknown protected lion. Conservationists say the man paid 50,000 to hunt the animal. He has been identified as Walter Palmer from minnesota but his whereabouts are unknown. The line was shot with a crossbow and then killed with a gun. Palmer issued a statement being he was unaware the lion was so wellknown. A Las Vegas Museum does it dedicated to the mafia is opening an exhibit called fifa. The museum known as the mob beautifulputting the game turned ugly name. U. S. Investigators have used federal racketeering laws to charge current and former fee ifa officials with corruption. A big day for microsoft with the launch of windows 10, one of the biggest upgrades ever. Our next guest has tested the version. Joins us live from singapore. Really good to see you. Windows 10, they said they grandly called it the last windows. You tested it out. What do you think . Brian they have actually done a really good job. They have basically taken the best parts of windows 7. They have finally made windows eight lessj windows 8 less jarring and they finally put it together. It was such a warm feeling to finally have that start button again after so many years. It is really smoother. Yvonne i think all of us have missed the start button. People have said this is the windows returning back to the basics but still seeing new design. Again, in the passed with new windows, we have seen lines of people in the Computer Stores trying to buy a new pc to get the new operating system, but you dont expect that this time. Why . Bryan no, this will be different, right . First off, those lines you saw were back in the day when pcs was still king. These are the days where smartphones and tablets are the far the forefront of peoples minds. What microsoft is doing differently is they are doing a free upgrade that is downloadable onto your existing machine. It is not about lining up to get a physical box. Is about it going down the pipe. It is free for consumers. Yvonne it seems like the chipmakers are not too upset about it this year. Not expecting a boom in demand. This is coming off of windows 8 which was pretty much a big flop. They were trying to do a lot of new things. A lot of people were not really almost resisting changing their operating system. Bryan yeah, exactly. Windows 8 was pretty much a flop. It was a bad experience for a lot of folks, but i think in this particular case, they have done such a good cleanup job of the os and the experience is so much better. Hopefully, it will be a lot easier for these users to move ahead. Microsoft has stated they want to hit one billion units installed within two or three years. We think they will beat it largely on the back of these free upgrades because people will go ahead. It should be easy for people. Yvonne it is free and easy to use, why not . Tell us about the new features because there are some possible Game Changers here. Cortana, a personal assistant, and the Microsoft Edge which is the revamped version of internet explorer. Bryan id underscore the word possible. I dont think it will change things overnight. Longerterm, there is potential, particularly if you look at cortana. The whole idea of personal assistance as a broader category regardless of it is what google or apple is doing, personal assistance do have quite a bit of influence. What microsoft has done a building it into the os has created stickiness around the microsoft ecosystem which is where microsoft is going as a company pivoting away from microsoft and going towards their broader sources services. Cortana is in there. The edge browser, that was what impressed me as well. It is very clean. All the days where you try to import avoid internet explorer, edge really changes the perception of that. I have been personally happy with edge. Yvonne maybe no Google Chrome or firefox. Lets talk about when it comes to the shift to apps, tablet modes that has been a struggle for them. To have seen a shortage in a lot of modern apps. Now this universal operating system how will this entice or engage more developers in building apps . Is im challenge not sure about the execution. Once fory is you write any of the screen sizes whether it is as big as a pc or a large tv all the way down to a small phone. Back to that phone about having one billion windows 10 devices within two or three years, the idea is Developers Get attracted to the big user base and see the potential money to be made. The problem with all of that is while it sounds very nice in theory, it will work on the pc side, the problem is what you do on a mobile phone and arguably tablet can be different from what you do on a pc. The best example is uber. You look at Something Like that which takes advantage of the gps you have on your phone, you dont quite do that on your pc. When folks are writing apps for mobile phones, they are not necessarily thinking i want to write it for windows just because there are one billion pcs that i can take advantage of, too. It is great in theory and credits a microsoft for creating developer tools to make it easy to develop for Windows Phone and tablets or at least windows for the phone. Anyway, the point being is i will not change their phone and tablet situation overnight but it helps the pc side. Yvonne hopefully, the corporate side as well. Thank you for joining us. Coming up next, cheers to better profits. One Japanese Company is reporting positive results last quarter. firswe will be back. Yvonne welcome to the stock exchange. The openings of japan, korea and australia. Our reporters are tell us the stock they are keeping an eye on. Juliette i have a manufacturer sales and construction of machinery. They were down about 24 year on debt. The Fourth Quarter sales dropped and sales down 5. 5 . We will see that continue today. Yvonne david sounds like he cares, but he really doesnt. David it is an interesting story. The reason i say that is because make automotive equipment. You had shares plunge in the u. S. You had analysts coming out this morning and they are saying all this news is so negative when it comes to the company. They are putting their fouryear forecast. Net income will probably be 1. 3 billion for the full year which is 17 lower than the forecast they made three months ago. Comes aboutguidance two or three months after they said they would boost their dividends. Juliette they tried it yesterday as well. Yvonne a potential net wider nailbiter. Shery . Shery potential holdings. Rarerecycle metals. The firstquarter operating profits rose. It is not a huge upside when it comes to the earnings, but they have been falling for the whole month. They are very close to answering entering that territory. Yvonne we will see what happens. That is the verdict from the stock exchange. Arereporters highlights based on news events. Coming up in the next hour, beating expectations we will have more on twitters rosie quarter later in the program. We are counting on the openings in australia, mark im mark halperin. John and im john heilemann. Andjohn and im john heilemann. With all due respect and jon stewart, youve been making secret trips to visit barack obama at the white house . Go on. John happy National Donald trump day. On the trump show today, trump and trump. But first, morgan freeman. A video to support the run deal. A run iran deal. Like americas actual
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