Live from bloombergs u. S. And asian headquarters. I am betty liu in new york, it is after 7 00 p. M. Shery it is after 7 00 a. M. In hong kong. I am shery ahn. Injured aftermore a van hit pedestrians in one of barcelonas most popular streets. Two have been arrested in Los Angeles Las ramblas. Spain has a history of terrorism. Passengers were killed by bombers in madrid in 2004. There are rumors gary cohn would be resigning as President Trumps top advisor and not to mention the political scandal going on. That is leading the markets. They took a big hit overnight. Betty they absolutely did, as you point out. It was interesting to see the terror attack rattled investors. But it was gary cohn and his possible departure that hit the markets. I want to pull up a chart g btv 360. It really tells the story. We saw the second worst day in terms of the drop of the s p, down 1. 5 today. The second time it has dropped more than 1 since last thursday. We thought north korea would continue to dominate the headlines. Little did we know charlottesville would become the big news of the week. And now we end with a terrorist attack. Vix indexe fix the with a spike here. Still below what we saw back in april. I want to remind our viewers, despite the declines we have seen, we are 2 below the high so far this year in the markets. At least that puts a little perspective. To show you on the board where we close today, all that nervousness coming in and a selloff. The s p down over 1. 5 . The nasdaq also lower, by almost 2 . Setting up for a dismal session in asia. If wall street is any indication what is to come in asia, we could see a bad day. In new zealand also already losing 6 10 of 1 . The kiwi dollar holding at. 7 287. Was slowly pulling back the losses we saw in last weeks selloff, but in the last trading day of the week we could see some pressure. The asx 200 finished lower in the last session and futures are pointing to a lower open, down 9 10 of 1 . While the aussie dollar is holding steady. Japan, a little strength for the yen, holding below 110. We saw the japanese stock market fall 1 10 of 1 . Nikkei futures unchanged at the moment. Outo get a lot of ecodata of asia, Property Prices out of china, malaysia, taiwan coming out with their Economic Growth numbers. All of that is what investors will be waking up to. Betty lets get the first word news with Haslinda Amin in singapore. Secretary of state Rex Tillerson and defense secretary james mattis say military action against north korea remain an option, despite claims by colleagues to the contrary. Tillerson said a potential strike against the kim jongun regime has been endorsed by President Trump. Aephen bannon said it was nonstarter because millions would die in seoul. President trump has jumped back into the charlottesville controversy, decrying the foolish removal of confederate monuments and attacking republican critics. In tweets he said his is it sad to see American Culture ripped apart. He accused one gop senator of dying. The president s defiance to speak to paul defiance have caused paul ryan to not speak to him. Gary cohn said to be staying on despite reports he was deeply upset at President Trumps reaction to charlottesville. Markets were concerned he might quit, with the s p 500 falling to its lowest level this week. After the controversial Trump Press Conference tuesday, the president had been expected to discuss infrastructure. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am Haslinda Amin. This is bloomberg. Lets get more on the s p 500, second worst drop of the year. Su keenan has been watching the markets. We are seeing the best gainers this year take a big hit. Su tech stock cisco was part of the drop. We were talking about cisco earnings yesterday. Lets talk about the big earners. The close across the board was lower. The nasdaq down almost 2 . Tech was a big part of it. Lets go with the delta, we had Morgan Stanley say they were under pressure. That hit all the airlines. Then you have International Incident in spain. Typically when there is a terrorist Issue Airlines get hit. Delta, three incidents in three days in jfk where they had other planes or trucks. Nobody got hurt, but that is investigated. L brands that own the victorias secret are having trouble getting sexy back. Cisco reported weaker earnings and a decline in sales. Another one, not too worried. Our software business, 50 is from the subscription. We have made a great deal of progress. The strategy we laid out is working. With whereomfortable we are and what our teams have accomplished. Su not that clear on whether the strategy is working. Lets go to the bloomberg, g btv 108. What you see here is the rising ratio of bearish the bullish s p 500 options. You notice in december when you have the rally on trumps election, the bearish options were at a low. Over here they are at the highest since, we have to go back a year ago. What isa reflection of going on and concerns the market could [indiscernible] we will get to jobless claims in a minute. Lets get the pictures and headlines from the data that hit the market. We are at the lowest level since february in jobless claims. That goes back to the 1970s. To see jobless claims that low. If you go to the bloomberg, 26, young to g btv 17 see a graph of initial claims continuing to drop. Continuing claims also lower. This is providing a strong of a stable labor market which supports the case to raise rates sooner than later. Betty it does, thank you. Su keenan, those pesky wages keep preventing that. Despite a week that has seen the threat of war with north korea, outrage over President Trumps response to the violence in virginia, and a terrorist attack in spain. Here to explain is equity strategist. Just is a great chart su showed. It looks like the economy is on track. Is that keeping armor around the markets . Yes, you have a couple and i wouldlloffs, argue this one is more of a sentiment valuationbased selloff. It is pretty stable. Is improving,et earnings expectations have not changed at all. We are still expecting doubledigit growth to continue. That said, we had a market running on fumes going into july. Few purchases in the market rally. The result was, we were vulnerable to news. Last week we had north korea more turmoilek, from policy and terrorist attacks and negative earnings numbers. The result has been, the market is continuing to selloff. It began several weeks ago. Betty running on fumes the past few months or so. I want to pull up this chart g shows youich are talking the last hour about the moving average. It shows we are far from that technical point, as are presented by them rede line. But we have moved past the 50 Day Moving Average, represented by the green. Gina if we moved decisively below the 50 Day Moving Average it will be the first time in several. What you can see from this chart is that the 200 Day Moving Average has underpinned the market. Selloffs have been about 5 . Dip, they saw support in the 200 Day Moving Average. That is now 3. 5 below moving levels. To put this all into markettive, back to them that started the last leg of the bull market an extended 2011 to 2015, that leg included six corrections up 5 to 10 . Think about the last year and a half, we have had an extraordinary market of low volatility, almost no corrections. We had a correction right before we made the bottom in february with brexit last summer. It is a low volatility environment. A 2 correction seems like a lot. Amidst a strong bull trend, you have corrections pretty frequently. Shery does that mean we will get financial conditionings tightening soon . Chart number 40 showing financial concerns ease. Selloff we saws tighten the most since may. Should we worry financial conditions will continue to be this easy . The s p 500 is a significant portion of that index, which is why you saw financial conditions tightening bit. Tighten a bit. August is historically a difficult month, low participation in the markets, with vacations until labor day. We continue to see this turning in the market, the most likely scenario is that financial conditions will tighten a little bit, which counteracts what is happening in the labor market. The labor market is continuing to move, and if financial conditions ease and deflates, that makes the feds job in the fall tougher. I would not be surprised to see more Monetary Policy chatter. And you have jackson hole coming jackson hall coming up. Shery lots of chatter coming up. For martin adams, thank you what is happening in the u. S. Market. Looking ahead, do not miss our exclusive interview with squier ceo. We will talk earnings and what is ahead for latest Property Prices in china. Alibaba is beating amazon on growth. We look at your shopping basket. This is bloomberg. This is shery daybreak asia, i am shery ahn in hong kong. Betty and i am betty liu in new york. Sales and earnings topped analyst estimates, revenue jumping 56 . Profit nearly doubling in the june quarter. Selina wang has more on this. To shine aack ma light on his core business. Even at mass scale they are growing quickly. It was a good reminder we have distractions like Digital Entertainment and cloud coverage. But they are driving margins to the platform, and user engagement. Increasing the average they get per customer. Betty you mentioned their grocery business and how they were ahead of the game in terms of amazon on buying a supermarket and building that out. Selina people like to see alibaba as an amazon copycat. We saw them enter cloud and original content and even buy a highprofile newspaper. But they have been investing in Offline Retail for some time. They rolled out a new Concept Retail store. You download an app and pay with your wallet. You can get it delivered fresh from that place, the warehouse to your home, in 30 minutes. It is an interesting window into what alibaba, what amazon might be trying to do with whole foods. Shery that is a very interesting concept. Hema, groceries, dining, delivery put together. Lets discuss their core businesses like cloud computing. Revenue grew 36 but is down from double digits. We also saw Digital Entertainment only growing 30 after triple digit growth. It is a sign of things to come . Selina you made good points. They have been expecting triple digit growth for cloud computing. It is impressive, 90 , for cloud computing. But there is competition in china. They have to spend heavily on data centers, acquiring users. They did reach a milestone that was promising of one million paying customers. The situation in Digital Entertainment is a little less promising. Growth decreases from triple digit growth to only 30 growth. A lot of increasing cost has to do with acquiring traditional content. There is a tight race waged between alibaba, tencent and baidu and they are chasing for the best content. It will only get more and more expensive. Shery selina wang joining us from new york. Also joining us here in hong kong is a consumer expert, larry, great to see you. Hemaa just mentioned stores. How important are brickandmortar stores for alibaba . This is probably the next big thing for alibaba. Years, onlinew sales had reached record growth. Upever, online cannot pick other shares. Offline retail is still a big chunk of the overall Retail Market. Alibabas ambitions occupy a much Wider Customer point. It is natural for them to pilot and expand this concept from online. Tier are we talking about four cities in china . Tier one,a is only at mostly in shanghai. They are testing this concept and prototypes. Alibabas ambition is not limited to these tier one cities. They are real challenge is about how to scale up from the current, to hundreds of thousands in the future. Betty how expensive is that going to be and how can alibaba, like amazon, mine it data to get that scalability . Larry it is a difficult question. Lets take amazon as an example. Potentialazons position with whole foods. They had a different idea in terms of the physical stores. Fresh,pick up, amazon they have also been testing amazon book. Prototypeepts and shops look beautiful. The challenges about the scaling up. Amazonot as ideal as that they originally think of. There wouldor guess be similar challenges for alibaba, as well. It is not about the concept. The concept is beautiful. It is about the organizational issues they will be facing in their expansions age. Betty that is a risk for investors. I want to pull up a chart here, i know you are not a stock analyst, but i want to put up a check that shows how much investors are paying to own shares in some of these companies. You can see, alibaba is more expensive than facebook, which is represented by the yellow chart when you look at priceearnings ratios. Way, way behind amazon. That is the business when it comes to expensive stocks. This stock of alibaba, along with tencent and others have boomed a higher. Higher. D how big of that risk or headwind is it, and investors betting for higher multiples, should they be worried . Larry great question. In termse is this risk of operational, organizational expansion. The room for imagination is also huge. Lets look at the whole business at this moment. Indicates there is abundance of room for you to grow, for ecommerce to grow. No matter if it is from lower tiers or other categories, there is room to grow. These are new retail concepts at the early stages. That itur hypotheses is is a premium position only for highend customers. Alibaba has already invested in many of these traditional retailers. It will not be a big surprise. Later on, when they have tested good results, they could copy and paste some recipes for those big players. That will bring huge value to the brickandmortar business. Betty larry, thank you so much on this. Story,ly a fascinating the bain and Company Partner on alibaba. You can get a roundup of that story and many more to get your day going in todays edition of daybreak. You can go to your terminals and it is available on mobile. You can customize your settings only get news on industries and assets you care about. This is bloomberg. Betty breaking news on the energy front. Energy capital has agreed to buy u. S. Power generator in a deal valued at more than 17 billion. This is been rumored for quite some time. It looks like itll be happening. Has been struggling with cheap gas and has been looked upon as on the market for quite some time. Shery this deal could be announced as early as friday. S stock rose 11 . No holds. This is a story we will continue to watch for the next few days. Coming up, we will tell you why august is the cruelest month for the aussie dollar. We will look at how the currency is expected to fare for the rest of the year. This is bloomberg. Got you outnumbered. The dinosaurs extinction. Dont listen to them. Not appropriate. Now im mashing these potatoes with my stick of butter. Why dont you sit over here. Find your awesome with the Xfinity Stream app. Included with xfinity tv. More to stream to every screen. Shery it is 7 30 a. M. Friday in hong kong. , everyone. We are now 30 minutes away from asias first major market open. Betty it is 7 30 p. M. Here in new york. Overan see the s p off 1. 5 , rattled by more News Headlines out of washington. I am betty liu in new york. Shery and i am shery ahn in hong kong. Youre watching daybreak asia. Lets get to the first word news with Haslinda Amin. At least 13 People Killed and more injured when a van hit pedestrians on a famous barcelona street. Two suspects have been arrested in what police call a terrorist incident. It echoes similar events in france, germany and the u. K. Spain has a history of terrorism. Passengers on a plane were killed in madrid. Our neighbors in madrid, nice, brussels, berlin or london have experienced of the same or the people of barcelona have. I want to convey the affection, solidarity, and affinity of the whole of spain and the world. President trump is said to have abandoned plans for a infrastructure counsel with which wouldve advised on his 1 trillion program to fix bridges and roads. He signed an executive order on the panel in july but failed to make any formal appointment. It follows the cancellation of two other Advisory Councils after leading business figures quit. Japan has begun a public debate over casinos as big players to also for position. Thehearings on legally gambling industry to boost the economy. Recent polls suggest of the majority of japanese people are opposed to the idea of casinos in their area. The three men who became the face of hong kongs democracy protest three years ago have been jailed for their actions. They had been sentenced to Community Service for the occupied demonstration that shut down Central Hong Kong for weeks. The court of appeals reviewed gave them a six, and eight months instead. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am Haslinda Amin. This is bloomberg. Seen thegust has aussie dollar retreat after sent the. 80 u. S. Cent threshold. It is ignoring some reasonable fundamentals, isnt it . Does. I figured there must be something in the air. But they pushed on something that rba said about the neutral castrate being at 3. 5 . The aussie has been pulling back ever since. The dollar strengthening retail sales, Business Confidence has been climbing, as well. Thursdays read on the jobless figures, encouraging trend there. There have been factors weighing on it. There is a perennial concern about week wages. The pullback in the aussie dollar will warm the hearts of the rba board. Betty there is still a reasonable case for being bullish about the aussie dollar, isnt there . Paul that is true. Overnight we see it push up 3. 3 . We are getting close to 73 per ton. The aussie has been a proxy for that. There are questions over the sustainability. Traders getting their bets in the reserve bank will move sometime in 2018 and that move will be up. An upward move will be the First Time Since 2010. We have a chart for you, g btv 175. It shows us what the hedge fund or doings with hedge funds are doing with the aussie dollar. Over 71,000 contracts. Andcan see the peaks troughs do correspond closely. Hedge fundsseen this bullish since 2013, just before the aussie dollar collapsed off record highs. Betty paul allen, thank you so much. Property lays a huge role in chinas economy. We are counting down to the latest report on prices due at 9 30 in beijing. Ramy inocencio has three charts you need to know. 3087. Want to go to g btv we want to look at bloombergs own gauge for the forecast. This is a blue line and we are expecting it to fall, only 120 square meters sold. The white line is the actual number for the prior month of june. We will see what happens. I would have to say that seasonally, this may not look as bad as it might be. Every single july 3, 2014 has been higher than the july prior. Upm 2016, housing sales are i about 20 . They are up 40 since 2015. Lets see what happens when them chart drops. The second chart you need to know is g btv 183. Strength,tled uneven when it comes to first second and third tier cities in china. The white line is first tier cities that have contracted. With the restrictions beijing has put across all cities, they are not ask affecting all cities. Secondtier cities are in blue and third tier in yellow, have seen the most growth. We want to see if those trends continue with the numbers drop in less than two hours time. 158, when you talk about chinese construction, you have to talk about copper. Copper is one of the biggest uses down in terms of infrastructure and the wiring of buildings. 58, china construction dovetailing with copper. The white line is Morgan Stanleys index, the expectation for new starts. They are moving in tandem. The copper futures price rising where the index is. Look at where we are headed at the end of the year, down and into the negative by the end of this year. We could expect this could be a weight on their price. Trading at 291 and change. It could be around 250. As we wait for the numbers to drop, those are your three bloomberg terminal charts you need to know. Shery copper has been doing pretty well. The highest on record in trading in shanghai. You, withncio, thank an update what we could get out of chinas Property Prices. Lets turn to the u. S. And commercial Property Prices because they remain near records after a sixyear boom. Much of it field by capital from china. Some say that market may falter after china curbs investment. Brian kingston says there is no as the moneyt, flowing into properties is said to become even more so. Take a listen. We are not seeing a slowdown in terms of capital coming out of the region, and not the impact on real estate prices. If you look at where transactions have been happening over the course of 2017, prices continue to be strong in places like london and new york. Sometimes it is from asia or other regions. How is it possible you can take that much capital, that much flow, out of the equation, and capital that was willing to purchase assets at high valuations, and not have a substantial impact on the market . There are a lot of headlines around how much capital is coming out of asia. The reality is, it comes from a lot of places. We are selling assets to european Institutional Investors, asian investors were often part of the equation, but not the only capital. We do see good fund flows out of those regions. How much longer do you think that continues . Infinite supply of sovereign or Institutional Capital for real estate. They are been a shift, much more interested in that asset cash than they used to be. To use your baseball analogy, we are in the early innings of a fundamental shift. This applies to Institutional Investors broadly, also Insurance Companies and pension funds, who have a significant component of their Overall Investment in fixed income, which today earns a very low yield. We think for the for seeable future will continue to earn a very low yield. Theyre moving that from fixed income to real assets, including real estate. Left. Is a lot of time would you measure it in years or decades . Decades. Similar to what we saw in the shift from fixed income to equities in the 1960s and 1970s. If that is true, there is a lot of money to go in real estate. What effect will that have on valuation . People look at valuations right now and think they are rich. Everything is relative and valuations are rich. The stock market is very expensive today and fixed income provides a low yield. It is all about alternatives. As long as we have the amount of capital we have in the global system today, those prices are well supported. There is a good reason for it. These are not prices that have gotten out of kilter with alternative investment. Betty that was brian kingston talking to eric. Much more on properties, where they beating estimates . On the back of increasing sales and a boost in the luxury market. How do we feel about retail . This is bloomberg. Betty we are counting down to asias first major market open just moments away. Japan futures down over 1 . Off of the major declines we saw here in the u. S. , the second worst of kleins we have seen so far this year. This is daybreak asia. I am betty liu in new york. Shery and i am shery hand shery ahn. Luxury realhanks to estate in hong kong. Lets look closely at this with guy bradley, joining us exclusively in the hong kong studio. Lets discuss your revenue and break it down. This is the chart on bloomberg, the function is fa. Office paid the moche, followed by retail, Residential Property investments. Break it down for our viewers, where did you perform best . Was it hong kong, Mainland China . You also have investment in the u. S. We did well across all geographies, all sectors. By first results were skewed the tremendous sales we did on the trading of the last year. We have been selling up to the mid levels. Great trading profits in the first half because of that. The positive to take away for us was the trends we see in office and Retail Market in hong kong and china. Shery talking about those residential budget pipeline is shrinking. Would you consider buying more aggressively in hong kong . Looking to doways more in hong kong on the residential trading side, as we are overseas. If we can find something that fits what we like to build, we will be doing more. Shery when you say overseas . A project in singapore and in office looking at things in jakarta on the residential side. Southeast asia looks interesting and i would not rule out china. Betty guy, it is betty here. Kongentioned the hong market and you are enthusiastic about both office and retail. I want to bring up a turn the focus is on residential to make a larger point. 818 here. The Median Income has barely budged. You see Residential Property prices rise over 200 since since 2001. It is getting unaffordable to buy property in hong kong. I am curious how you think that will spill over into the larger if peopled retail have less and less money to spend . Guy there is still demand in hong kong. The prices on the chart are continuing to go up. We are pretty much out of the Residential Market now, having finished midlevel projects. We have a few projects to sell. That we are out of the residential for the time being in hong kong. Betty the reason i ask is because you know in the u. S. , i know you have properties here in miami, but in the u. S. You have seen amazon taking down a lot of the retailers, the brickandmortar stores, and you seem old turn into ghost towns. Malls turn into ghost towns. Is that happening in china . Guy retail sales in china have been growing doubledigit in them four locations we are in. We are excited about the prospect. Betty even with Online Retailing becoming more and more popular . Growthu are seeing online and good growth offline in china. We have built Great Properties built on chinese consumption. Middleclass consumption is a wonderful but now and for the future. Shery how about offices in beijing and shanghai . They are not doing as well as in hong kong, why is that . Guy there are more supply constraints in hong kong. The Office Market here has been very strong. You can see that in our results. We are excited about this decentralization theme, which you have seen in london and new york, and starting to see it strongly in hong kong. It is really going to be a good beneficiary of that decentralization. Tty was talking about soaring Property Prices in hong kong. We are seeing chinese authorities clamp down on prices in Mainland China. Are you expecting more of those measures . What are your expectations for the market . Guy our expectations are that stability is good. In china they are trying to make the market more stable and that is a good thing. We are not in the Residential Market in china but focused on the Retail Market, which is going great for us at the moment. Shanghai will be our fifth major investment. That is retailled. We are extremely excited about how that is going right now. Betty bringing it back to the u. S. Market, particularly in miami, how are your properties doing their . Mall opened late last year, and so far, so good. We have great anchor tenants sacnd sacks this avenue, avenue, and a movie theater. It is a game changer for that city. On the opposite side we are pretty much full. It is a strong Office Market. Condominium sales are slowing down. Mainly driven by the strong dollar. Sold on the condo side. Things are looking good in miami and we are optimistic. Incredible after the financial crisis how markets have turned around in miami. Are you looking to expand other cities in the u. S. . Guy short answer is no. We have a lot to do in miami. We have a great story going there and a lot more to come. Shery we talk about your properties, you have been trying to diversify. I am talking more about asia. How does that hit your portfolio . Guy it is good, a diversified tenant base is a good tenant base. We try to make it diverse both geographically and sectorally. Shery what is your target percentage . Guy we just like to have good balance. Shery is up because we see more Luxury Brands exit hong kong . In theat we have seen Pacific Place sales in yeartodate so far is that luxury is starting to turn around in a nice way. It had a cup it had a tough couple years in hong kong. But sales figures look encouraging. I would emphasize it is not just in the luxury sector. We have tried to improve the and food andtent beverage changes we have made that have started to kick in. We launched a tremendous Loyalty Program called above, a fantastic private lounge and great rewards. The buzz is coming back, which is exciting to see. Shery exciting to have you here with your earnings, driving 30 . Thank you for joining us, guy bradley, ceo of swire properties. You can watch this interview again. Tv is the function. You can watch interviews again and to watch us live and dive into those functions and securities we talk about. Become part of the conversation. Did i miss any questions from our guest . You can ask them at yourselves on the left bottom corner of your screen. This is bloomberg. Shery this is daybreak asia. I am shery ahn in hong kong. Says itesfarmers remains in talks of various ties over the sale of the it is atold bloomberg possibility but not a certainty. They have been performing strongly despite fragility in the australian economy. These are good businesses with a lowcost positions and good quality products with good infrastructure. Theyre really good assets. We look at what is the best thing for our shareholders. [indiscernible] a news core combining channels into a Single Company mutual mutual a company. The target date for completion including winning Regulatory Approval is the first half of 2018. Buying from massachusetts about 60 of the transaction will be in cash. Yunfeng known for catering to wealthy individuals, but they have a broader reach for regular chinese and hong kong investors. Researcher shows that twitter could lose 1 5. 2 billion will be walked away if the real donald trump stopped tweeting. The loss of their most common user would lead to multiple compression. The president has 36 million followers and just treated more than 35,000 times since it joining in 2009. Betty there is plenty more to come with the major market open moments away. A rocky session given what we have seen in the u. S. Shery we could see anxiety. Sophie kamaruddin has opens in australia, japan, korea. Futures in seoul lower by over 1 . Potentially in asia. This is bloomberg. Track your pack. Set a curfew, or two. Make dinnertime device free. [ music stops ] [ music plays again ] a smarter way to wifi is awesome. Introducing xfinity xfi. Amazing speed, coverage and control. Change the way you wifi. Xfinity. The future of awesome. Shery terror in barcelona. 13 are killed as a van plows into pedestrians. Betty depressing stocks in asia. Markets were already nervous at the continuing turmoil in washington. Shery part of that was speculation about gary cohn in the white house. Betty the great debate. Japan discusses the legalization of casinos, although most voters seem pretty unimpressed. Shery this is the second hour of bloomberg asia, coming to you from u. S. And asian headquarters. I am shery ahn in hong kong. Inty it is after 8 00 p. M. New york. I am betty liu. One more trading day in the u. S. , but in asia, you are wrapping up the week. Today. For you it has been a pretty Terrible Market for the bulls. The second course day second worst day in the kleins all year long, and that is setting up for a lower opening already in asia. Shery if wall street is any indication of what could happen, barcelona, and we had to digest the ecb minutes. We get tons of data out of china in about 1. 5 hours. A lot we need to discuss. Let us get the first word news with Haslinda Amin in singapore. Haslinda at least 13 People Killed in more than one and more than 100 injured when a van hit pedestrians on barcelonas most famous street. The perpetrator is still at large. The attack echoes similar incidents in france, germany, and the u. K. The Prime Minister says spain and the world stand with the people of barcelona. Nicer neighbors in madrid, brussels, berlin, or london, have experienced the same horror that the people of barcelona has suffered, and i want my first words to convey to them the , andtion, the solidarity the affinity of the hall of fame in the world. Haslinda Rex Tillerson and jim say military action against north Korea Remains an option, despite claims by a colleague by the contrary. A potential strike against the kim jongun regime has been endorsed by President Trump. Millions of said seoul. Would die in President Trump has jumped back into the charlottesville controversy, decrying the foolish removal of federal monuments and attacking republican critics. He said it is said it is sad to see American Culture being the apart, and accused one gop senator of line. The president s defiance has prompted paul ryan and Mitch Mcconnell to distance themselves from him. Gary cohn is said to be staying on despite reports that he would be deeply upset at President Trumps reaction to charlottesville. Markets were concerned he would quit, with the s p 500 falling to its lowest level this week. Controversiale press conference on tuesday because the president had been expected to discuss infrastructure. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am Haslinda Amin. This is bloomberg. Shery breaking news out of lenovo. Some surprising results out of the company. We are seeing an unexpected loss for the first quarter. They thought a loss of 72 million. We are expecting profits of 32. 9 million. This is quite surprising. Revenue coming in at 10 billion. The estimate was for nine point 90 billion. On that front, it is better than expected. Gross margin, the estimate was 13. 9 . Of 72 million. Lenovo has been hit by this stagnation in the pc market. Contribute about 70 of their sales. Ke are also seeing a wea segment. Their stock is not valued by analysts very much. They had 11 sells and only four buys. Lost, andned and then has actually risen on the 2 . It rose for the past two sessions. We see how they do at the open at this unexpected loss of 72 million for the quarter. About oneg up in point five hours. The market is trading in korea, japan, and australia. Still to come how they are doing. They are still set check out this column in red, the nikkei 225 is trading lower since may 2015. The kospi snapping a threeday drop. There is a tumble we saw on the s p 500 with its secondbiggest drop after concerns of gary cohn exiting stage left as well as the terror attack on muslim women. Bonds are looking mixed. We have treasury continuing to fall. The dollar is fairly steady. Gold is holy on holding onto the game. The korean won falling on the back of the geopolitical tensions and aussie dollar down. 1 below the u. S. Level. The recent metal rally is taking a bit of a breather, and we have oil keeping brent 47n. 4 , and crude below above, which is seemingly the new battle line for oil. Broadly a riskoff session being painted in the marketability put to the test. Ability put to the test. Showing fewe are signs of fading. Alibaba earnings might provide a lift not so far. The topics falling one point 2 . Telcos commodity stocks, also falling. I. T. Falling 1. 2 . Softbank shares are on the rise in tokyo, snapping a two day drop. Softbank is the single biggest shareholder of the chinese tech giant. Lastly, i want to check on what is going on with the g10 currency given the boost we are seeing for haven currencies like what isand focusing on going on with the euro. We had it falling. 1 . The euro has been defined longterm bears for most of the year. Ecb july 8 minutes may be of the wind out of the sails. The central bank might be reaching its limits when it comes to the ascendancy of the common currency. It did fall to a threeweek low. It looks like it is extending that out today. Betty. Betty really a conundrum for the ecb policy, what is happening with the euro. Much, sophie kamaruddin. More scope to army monetary stimulus, even as it heads toward the exit. No need for the ecb to start unwinding now as inflation is still low. Markng us now is mcfarlane. Mark, i thought it was interesting did morning. What we heard from the ecb, and it speaks to this larger issue of just distortion in the market because of Central Bank Policy for so long. This chart, 8496, which has interestingly enough shown the economics surprises have really been more on the downside as of late, but the euro has continued to strengthen. It is the same thing in the u. S. , where we are talking in the Interest Rate hikes, yet the dollar continues to weaken. Let us just take the euro first. What did you make of the minutes today . Mark to answer your first question, i think the decline in the value of the dollar is more important than what is happening in europe. Is aising eurodollar reflection of what is happening in the United States. Do we think we have a selloff in the dollar amount of fines is happening . In terms of Central Bank Policy, from the european side of things, i think they are two years behind the United States and really replenishing the Balance Sheets of the banks, and i think what they want to do is to try and consolidate the growth that they have in europe. It has certainly improved. We have some political volatility happening towards the end of the year in germany, and a think it is really in the keep growth going as quickly as possible throughout that period up little of political volatility. I think they will not taper until the first half of next year. Shery we are getting some breaking news right now on our bloomberg. Betty i believe this is according to spanish police. The presumed perpetrators have been shot down, killed. The police saying it is presumed the perpetrators of the attack had been shot down. I dont see any more details on this, but when we get more details, we will bring that to you right away. Mark, let us continue our conversation, back on Central Banks and the global economy. This Balance Sheet unwind, an when the fed is going to raise rates. We have kaplan of the dallas fed receives anxious to keep things going, but knowing inflation is below that 2 target. Here is what he said earlier. I would like to see more progress, particularly in the fed reaching his inflation target before i consider another rate increase. Ofm being patient in terms another rate increase. It is also much affected by debt rates for governmentd debt. We should let our Balance Sheet begin to run off. Betty do you think, in the coming months, are we going to get any more clarity that allows definitively start this Balance Sheet unwind and Interest Rate hike . Mark ill think the Balance Sheet unwind really has very much to do with Economic Growth. I think it is a longterm process that has to happen, and it is eight years now since we had the financial crisis. The way in which the central bank interacts with markets, we need to bring back to normal. I think the comments make a lot of sense from the perspective of inflation. If you look at the good markets inflation, the forward markets is a lapseon, there that down below 2 . The central bank is not successful in relating inflation towards that 2 target. It is going to be very difficult to do it in the long term. Anchor the fed seems to be having a difficult time understanding softening inflation. Is it all about technology and just global disinflation as some members have pointed to . Mark we have a lot of debt in the world market. The world has been kept alive by centralbank largess, by the bond buying programs. They have not been successful in raising inflation. We have had a couple of blips in the last couple of years. The last big upsurge was a driven one. Ice we have to get people back to believing in 2 inflation. The central bank has not been successful yet. Shery talking about the commodities riley, we saw Metals Commodities rally, we saw metals surging. Is this commodities prices going to fade . Mark you get a pickup and imported prices. Have inflation going up amongst consumers to get the longterm return of inflation to 2 to 3 . Shery it is interesting to see these days with exports out of asian economies. Their numbers are really robust. Some coming in doubledigit growth. At the same time, it seems that most of these exports are on the electronics. Is that problematic, because this could be very seasonal . Mark you mean the iphone effect from samsung goty even singapore, we the numbers of export growth, and everything messed, but electronics actually beat estimates. Mark you have seen quite a broad pickup and export growth out of the asiapacific region, but we are seeing some countries not doing so well. Korea, for example, have been reporting pretty portrayed numbers. That is largely because of slippage of demand within the chinese market. A lot of people stopped 20 years ago in a way that they think. It is all about united eights demand, european demand. A driverlly, china is of demand for asian exports, and you are seeing a slowdown in Consumer Spending in the chinese markets. Shery we are going to get those Property Price him is as well to get a gauge of where the economy stands. Mark, thank you so much, as always, for joining us. Farland, chief economist at ebp. Still ahead, big point that point bitcoin on the rise. We will look at the price surge. Says President Trump amazon is doing great damage to taxpayers and brick and mortar retailers. We will look at why some say the tech giants are just too powerful. This is bloomberg. Shery this is daybreak asia. I am shery ahn in hong kong. President Rodrigo Duterte or putter activity has included waiting into an online scrap between online retailers and their brickandmortar counterparts he posted amazon is doing great damage to taxpaying retailers, towns, cities, and states. Many jobs being lost. Spencer joins us now from seattle. Spencer, President Trump it is not the first time he has tweeted about amazon and attacked them before. So how come this time it generated all this attention . Have become aets reaction, often times, to Critical Coverage in the washington post, which is owned by jeff bezos, so it has become a pattern for him. This one is one where he could have some allies. Also, some lawmakers, even lawmakers in the Democratic Party raising something turns power of growing tech companies, including amazon. Shery how to you see this latest tax situation being resolved . Mark the hottest thing for amazon spencer the hottest thing for amazon now on the tax front our sales taxes on sales from thirdparty merchant, emergency sell on amazons platform, but amazon does not own the inventory, similar to alibabas marketplace. Those sales are generally not taxed, and states are interested in giving that getting that revenue because it keeps growing as shoppers shift their spending from stores, where their purchases are taxed, to these are not. Where they states are losing a lot of money. It is likely to come to a head here. It is likely to go to a Supreme Court for a ruling on this matter or a legislative solution with potentially new law requiring that those purchases are taxed. A federal law would make it consistent from one state to the next. Shery so this could just be the beginning. Spencer, thank you so much for that, our Bloomberg Technology report of your is get a quick check of the latest flash headlines. West farmer says it remains in talks with various parties over the ceo of coal assets told bloomberg that a deal is possible, but not a certainty. He said the conglomerates have been performing strongly despite some fragility in the australian economy. These are really good businesses with positions on the cost curve, and good quality product coming out of them, with good infrastructure. Really good assets. We will look at what the best thing is for our shareholders in terms of that strategic review. It is a possibility. Sale is a possibility. Uber is hiring a chairman. Entwistle spent three decades at the bank and will become upombergs chief figure come focusing on partnerships and alliances in the region. Since then, he has been ceo at private equity firm ever stone. Energy capital is said to be buying Power Generator in a deal valued at more than 17 billion. The are told it would be an allcash deal. Of the few publicly listed Power Companies selling supplies directly into wholesale markets. Shares have fallen, but surged in extended trade. Betty japan beginning of public debate about casinos. Most people, it seems, they do not want them in their neighborhood. We will be in tokyo, next. This is bloomberg. Shery breaking news out of spain. We are hearing from cut the lawn from catalan police. We heard a few minutes ago that the terrorists had been shot down. The four areying dead. No Police Casualties reported. This is linked to the temer attack in barcelona. More than 100 people injured. Betty isis claiming response ability for that. We will continue to monitor for headlines. In japan, japan has begun a public debate about casinos. Open hearings are discussing the governments plans to legalize table gaming to boost the economy. For more, here is lisa in tokyo. Lisa, what is at issue here . Among the public, no one is a fan of this, right . Lisa no, betty. So casino resorts, the potential enjoym in japan, does not a lot of support locally. Most Public Opinion polls show majority, usually over 60 of the public here, opposes the idea of casinos. They are concerned about the association with organized crime as well as gambling addiction. Shery that is right. I mean, these are certainly bad side effects. What is the purpose of these hearings now . Mark sophie the hearing lisa the hearings are to assuage these public fears. What has happened is the government has convened an expert panel to make recommendations for a bill that how thend of layout casinos would be implemented and operated. The panel earlier this month released 100 pages of recommendations. Companies as well as and potential operators, would be able to make comments on the set of recommendations. There will be hearings in japan throughout the month of august. Betty what are the recommended guidelines . What do they mean for Companies Like caesars that are trying to enter the japanese market . These are just recommendations. There is no there is a potential they may not become law. The recommendations outline everything from casino gaming space to potential tax structure, to access for japanese locals, what are some of the things the operators care the most about, because that will determine the size of investment. These operators have said they may invest up to 10 billion in japanese market, but that all depends on how these policies will be laid out and how that will be britain, and that has yet to be done. Shery 10 billion is a lot of money. Lisa i think the potential of casinos in japan is considered by many to be one of the most lucrative opportunities in years. Gaming in the market could be as high as 25 billion. Shery yeah, and of course, compulsive gambling, always an issue when it comes to japan. Nobody can forget those pachinko parlors that are all around japan. So that of course is a key problem that many people, local people, are worried about. Lisa, thank you so much for joining us for a breakdown on what is happening with casino issues in japan. Lisa du, consumers reporter for bloomberg asia. Coming up next on the show, we will also be talking about chinas secondbiggest life insurer. To moreounced plans than doubled their dividend, so what is driving growth . This is bloomberg. Got you outnumbered. The dinosaurs extinction. Dont listen to them. Not appropriate. Now im mashing these potatoes with my stick of butter. Why dont you sit over here. Find your awesome with the Xfinity Stream app. Included with xfinity tv. More to stream to every screen. Youre searching for something. Whoooo. Like the perfect deal. On the perfect hotel. So wouldnt it be perfect if. There was a single site. Where you could find the. Right hotel for you at the best price . There is. Because tripadvisor now compares. Prices from over 200 booking. Sites. To save you up to 30 . On the hotel you want. Trust this birds words. Tripadvisor. The latest reviews. The lowest prices. Shery it is 8 30 a. M. In singapore. We are half an our away from the open. We could see the first fall for the regional benchmark this whole week. I am shery ahn in hong kong. Betty i am betty liu in new york. Youre watching daybreak asia. Betty, at least 13 people were killed and more than 100 injured when a van hit pedestrians on barcelonas most famous street. Two suspects have been arrested after what police say was a terrorist incident. The perpetrator still at large. Similar eventsed in france, germany, and the u. K. The Prime Minister said stain and the spain and the world stand behind barcelona. Abandon plansp for his infrastructure council. Signed anent executive order on the panel on july but failed to make any formal appointments. The news follows the cancellation of two other Advisory Councils after leading business figures quit. Lenovo posted an unexpected loss last quarter after losing its grip on the global pc market. Its smartphone unit continued to bleed cash, contributing to a net loss through june. Firstas lenovos shortfall in six quarters and compares with expectations of a 32 million profit. Lenovo lost its number one position. Japan has begun the public debate about casinos as the big players also for positions. They want to boost the economy. They have proposed curbs on ming. A majority of japanese people are opposed to casinos in the area. Powered by more than 2700 journalists and analysts in more than 120 countries. I am Haslinda Amin. This is bloomberg. Shery thank you. We are seeing a riskoff sentiment spreading across asia. The nikkei at the lowest level since may. More details on how the markets are trading early in the session. Sophie kamaruddin joining me now. We could see the benchmark fall for the first time this week. Sophie asian stocks are sinknig. 1. 5 percent. That dropped for the s p 500. The nikkei 225 along with the was falling. The asx 200 easing the decline, but still on the back foot, down. 8 , while the kospi is dropping for the first day this week. We are dealing with a summer volume, late trading here. While the barcelona attack along with concerns of gary cohn leaving the Trump Administration , there may not be reason for this selloff, and for the recent volatility. We have the looming question of an eventual correction may transpire. We have other items on the agenda to look too. We have chinas july Property Prices, plus malaysia and taiwan are to report earnings. Lenovo reporting as well. We do have electronic makers and banks dragging when it comes to the tokyo session. The topics falling for a Third Straight day. Japanese stocks might be primed for gains. Risen 27 percent on year, continuing a trend of gradual increases. It can see that with a line in blue. Looking at movers in toto, i want to show you chip equipment makers after electronic with a longterm view. In light of geopolitics, let us show you defend stocks in japan. , a heavy industry. Japans government, reportedly mulling another boost to defense spending for the next fiveyear plan, potentially to counter the north korean threat, betty. Betty sophie, thank you so much. Watching some of those stocks and particularly t lenovo. Also watching a chinese insurer when markets open in hong kong in just a few hours. The Company Announcing a higher dividend after profit rose by more than 6 . I want to bring in stephen lambdin. Seems like a pretty decent set of results. Were they expected are pretty much in line . On the highhey are side of the estimates, definitely, by the new business value. Year ind 46 year on the first half, and you know, it is because of both Market Expansion and volume growth. Surprise in the second quarter. It is mostly coming from the expansion because they added a lot more. If you look at these size of the agents it is 1. 3 million agents, close to the largest level in the country. Betty on top of that, what is the read . How does that compare to the others . Steven so, the way to think pinganhis is that is going towards the customers in china, while they are all over china. Obviously, good results for pingan has a positive read for the other as well. New china lifebe in this respect. Are expecting an analyst briefing. What questions do you want answered there . Steven mostly on the internet finance initiatives. Just a couple hundred Million Dollars versus 43 billion in terms of profits. What the analysts are looking forward to is going to be the revenue. How soon can they arrive at 5 of the company profit, in how many years . Things like that. Their investment appetite. Are they going to continue to go overseas . Do they want to buy overseas real estate assets . Anchor steven lam, thank you so much for joining us. China becauseh property, playing a huge role in the economy, and we are counting down to the latest reports on prices. 70 top cities tracked by the government, the july data is beijing. Stephen engle joining us with a preview. Are the property curves fighting . Stephen they are starting to bite. Insaw a month over month june, at least, in shanghai and beijing. We bigger question, which will get into a little bit, it is what is happening in the second and third tier cities. Chart. Bring up this we got a massive data dump today. Not only did we get the 70 cities to by the government, but individual cities, assisting xsubsidized new e homes. I want to boil it down to the month over month. That is where we can really see the changes, and whether those curves are indeed biting, because the yearoveryear numbers, first of all, all 70 cities in june for price increases in new homes that is because of the base effect from last year. If you look at the month over from may, 60e, up cities. And that is where we are seeing and of the gains in second third tier cities. As i said, beijing and shanghai sought prices fall saw prices fall. Existing home prices in beijing , so 1. 1 month over month those curves are definitely biting, and those buyers, who are friendly, are moving into the other outlying cities, seeking better returns. Betty the tier one cities, they have had these stiff curves. What kind of restrictions are we seeing in tier two and those tier three cities, and are they really biting into those cities . Stephen if the prices keep going up like this, you will start seeing probably more. We have reports in may and june, these provinces, new curves. If you look at some of these we can go on to the bloomberg terminal. G btv 183. After this video, we can call that up. We can see where the third tier cities, the prices are jumping the most, compared to those 70 overall cities. Also, the white line, when we bring it up is firsttier cities. The best performers on names many people have probably not even heard of. This company, down on the coast, up 2. 1 . This company i have never heard of it up 2 month over month. The kinde going to see of heating and the Property Market in the third tier cities, just month over month, you might see more curves. Betty indeed. Thank you. Nice to be hearing about it more. Stephen engle, thank you so much. Guest believes the bitcoin rally will continue until the end of the year. More from the Bitcoin Exchange operator. This is bloomberg. Shery this is daybreak asia. I am shery ahn in hong kong. Betty bitcoin on a record run, up more than 70 in just the last month. For is providing a boom china, at the heart of the cryptocurrencies economy. It hosts some of the biggest exchanges and dominates the mining of new bitcoins. Tom, what is behind the price surge we have seen in bitcoin . Divisione has been a over the future of the cryptocurrencies, which was partially resolved last month when the software was upgraded. We have to look ahead to november, when there is going to be more changes expected for the currency, and whether or not those divisions resurfaced. There was a bit of a relief rally on the back of that. You see more investors in china buying into the cryptocurrencies. There is a chart that shows how this compares to gold, which we can call the red line is the price of gold. You have the price of bitcoin, parity in april. It is around 3. 3 ounces of gold per bitcoin. As you were touching on, china is at the heart of what is going on in the bitcoin space, because you have got the minors , and a largee number of investors, whether they are speculating are seeing this as something of a hedge. You have some of the biggest exchanges in terms of bitcoin, based here in china. They are facing regulatory pressure, as we heard from the cofounder and ceo of the leading maker of mining machines. Take a listen. If you are doing Bitcoin Exchanges, that is quite it is relatedause with Money Laundering and potentially illicit activities around the Money Laundering. Facing regulatory pressure from Central Banks. Far, his company has been allowed to operate here unhindered. They make some of the most powerful chips of these bit mining machines. We visited one of those. He thinks bitcoin could get to 100,000 in the next five years. It is looking ahead to november now, to see whether or not the Bitcoin Community, the Software Developers on one side, and the minors on the other, can come to some kind of agreement over the future of its currency, because there is lots of concern about the transaction speeds. They have been slowing down. Minus want to expand these blocks, so they can pass through more transactions. The Software Developers want to upgrade the software. That debate continues. Betty stick around, because i want to bring in the founder and ceo of gate coin, a token hongnge based here in kong. He thinks bitcoin could reach 5,000 by yearend. 5,000 is a lot. Welcome to the show. Let us talk of a bit about why these cryptocurrencies are so popular and what is going on here. Guest first of all, probably the markets all the uncertainty on the markets are driving a lot of more and more interest on the coin. Another factor which is very rival of is the Institutional Investors in bitcoin. We still have a few Hedge Fund Trading bitcoin in europe and the u. S. And now we have, 60 or 70 of them that are starting to some that areand dedicated to digital currencies, so this is definitely driving a surge in the price, and there is the value of bitcoin. Because of the current uncertainties. Betty given the frenzy, are you expecting more regulation from china . Aurelien china is catching up with other countries like japan or the u. S. , which have already regulated bitcoin. The transactional value is becoming more and more reporting. Currently, we have a 70 billion market cap. We have some rules in place. To me, it is natural and other a good thing that the government and Central Banks are starting to regulate bitcoin. I am curious if you think the growing popularity of bitcoin and these growing at the currencies is that it might be a safe haven or refuge currency . Aurelien if you look at bitcoin, intrinsically, it is othery decorrelated from markets. It makes it impossible you own your own that coin, so nobody can seize them. People are less and less trusting of regular markets. Bitcoin is one of the more than gold. Tom how close are we to the Bitcoin Community coalescing around one idea, one vision, for the cryptocurrencies . Or are we always going to have these splits . And what is the impact on november . Aurelien that is a very good question. Fork in august. Everybody adapted to the upgrade in the software. We had the activation for scalability increase on bitcoin. In november, minors will decide whether or not we are increasing the block to two megabytes. There is some debate at the moment. Developers are against it. Some minors would prefer having two megabytes per block. Overall, the community should i am rather sure we have the same concern as we had before august 1, but to me, we should see the same thing, meaning everybody in the end is agreeing to it and not generating a new fork. Betty we have been covering bitcoin on the program. It seems like every other day, there is a new trend or something new that you have got to follow. Such a fastpaced, moving market, and it changes. The hot trend, i guess right now, is initial coin offerings, which is this way to fund these bitcoinfocused ventures. Describe to our viewers what exactly are these . Aurelien short. Definitely at is hot topic. We are proud to say we have been the First Exchange in the world to participate, because we started. 5 years ago, an intermediary between cross funding and an ipo. Funding, powered, secured by the blockchain. So you can lease them and have liquid markets like you would have. It is a new way of fundraising for startups to fund themselves and also a very interesting way for investors to invest. You have a liquid investment, as you compare it to private equity. You are able to cash out investments. This is more of a securitization of investment and private equity. You enable also investors to cash out easy. Shery thank you so much for joining us today, talking about bitcoin and all of these cryptocurrencies. He is the founder and ceo of gatecoin. You can get a roundup of the stories you need to go to get your day going in todays edition of daybreak. Bloomberg subscribers go to dayb audio terminals. It is available on mobile, the bloomberg anywhere app, and you can customize your settings so you want to get news on the industries and assets you care about you this is bloomberg. Shery you are taking a look at live pictures out of barcelona. We are seeing Police Officers standing on the streets. We have just heard that four people, presumed to be terrorists involved in this attack, had been shot dead. One other person has been injured. This is information coming from government. Regional you can see Police Officers on the street. Standing around as of course, we just heard that they shut down shot down four people presumed to be terrorists. One other person was injured. They may not be necessarily connected to the attack in barcelona, but they are presumed to be terrorists, and they are involved with the attack. Four people have been shot dead. One other person injured. That is the latest information that we got from catalan regional government. No Police Officers killed in this shooting. This occurred in a town south of the capital. Betty no Police Officers killed in the shooting. We are going to continue to get more and more headlines as the night progresses in spain. In the meantime, we are going to be watching some shares of when markets open in the next half hour. The company posting the surprised quarterly loss of 72 million. On the pcs grip market and smartphone business. Not doing that well. Here is our age cap managing editor with more on this. The smartphone unit is still underperforming. Pcs are losing market share. What are the other issues here at lenovo . Peter that is right, betty. It is a pretty rough quarter for lenovo, and it may be a rough opening ashares begin opening as shares began trading today. They have a pretty substantial loss. They are warning component prices will cause trouble Going Forward. The pc market is pretty challenging. The smart phone market is very challenging right now, particularly in china, where they face competition from local competitors that have become very competitive with their design so far. Any bitsat, are there of positive news out of the company . Peter the company is trying to follow this model that it used so successfully in the past. It bought, of course, ibms pc business back in 2005. They were able to gain additional scale. That proved to be quite profitable for them. They could benefit from the profits. They were trying to do something similar with smartphones, which is a related business, but they have been facing headwinds and challenges. Component prices are going up pretty substantially, and that is causing challenges for them with a profitability of both of these businesses. In a Conference Call going on right now, they warm those component prices will continue to be high Going Forward and that will continue to be a challenge for the business. Betty peter, thank you so much. Shares of lenovo. Peter elstrom, our managing editor in tokyo. And that is it from daybreak asia. Coverageets continues. She will be breaking the latest property did out of china in half an hour, and get Immediate Reaction from the regional head of property research. Later, we crunched down alibabas better than expected earnings. We will be joined by the research director, thasandy shen. Revenuegot alibabas rising 56 in the three months that ended in june. They beat the estimates. Stay tuned for a breakdown of those numbers. Asia isg markets next. This is bloomberg. Its 11 00 in sydney. I am haidi them, this is Bloomberg Markets asia. Japan leads the asiapacific down. Markets are unnerved by the terror attack in spain and turmoil in washington. Hiteople died when a van them in one of barcelonas most famous streets