Coming to you live from bloombergs asian headquarters in hong kong. Checking in on markets in asia this morning to new zealand, we have the Second Quarter jobs numbers out with the Unemployment Rate coming in line with estimates at 5. 9 . Stocks currently rising 2 10 of 1 . 6536. Olding at we are counting down to the openings of australia, japan and south korea. Japan seeing downward trend. Down 2 10 of a percent. Futures now pointing to a slightly higher open. The dollar yen at 124. 35. We will stick with the markets with some relief for commodities and oil came back from a sixmonth low. That was not enough to lift equities in the u. S. Su keenan been tracking the action on wall street. Su we definitely salw oil rebound. We also saw stocks slide and th at was as you had to focus on earnings which continues. Results were negative. That stock got hit by about 10 . The real focus though has been on apple whose shares have been down since it reported earnings more than one week ago. It was the fifth day lower. What we saw in terms of apple trading was the volume explode to double what we would normally see. More than 120 million shares changed hands. One veteran traders said when people see stocks that is owned by everybody, they dont want to be the last one selling. Shares down 14 since closing in a record in february. No real reason despite the initial concern that demand in china is declining and iphone sales are down. One major shareholder, david einhorn, is having a ton a tough month in july. In february, he held about 1 billion in the stock which makes up . 12 of his holy of 12 of his portfolio. The environment has been unbearable. While he could have done better in some spots, we dont expect to do well when investors shun value stocks in favor of momentum stocks. Weve experienced this a few times before. The shortterm results have been painful. We expect the environment will improve and we will recover. Su meanwhile, the earnings parade continues. Almost three quarters of benchmark members reported this beatingf 44 profits. Because you have so Many Companies reporting decent results, when you have one that reports not so decent result, they really get hit hard. Shery there was also some big earnings after the bell. Lets start with etsy. Su very different results from etsy. Etsy is the online marketplace for handcrafted goods. It is a fairly popular stock. It tumbled after reporting a slowdown in gross merchandise sales. 17 andk plunged some that is after dropping 6 in the regular session. Grew nearly 24 but that compares to the growth rate of more than 28 in the first quarter. That stock is getting hit hard. Different story for first solar. Results beat expectations. They are recovering from the first loss in three years after a newly formed joint venture helped boost revenues over 65 . The ceo is shipping the companys Business Model from selling solar farms to utilities which is forming to rival sun power. Again, very impressive results for first solar. Back to you. Keenan,hank you, su with the latest earnings. Over in japan economics continues to delight. Japan one hand, corporate is a start of asias earning seasons as Companies Benefit from the Prime Ministers policy about optimism. It is reflected on a more personal, individual level. We are here with why japan is leaving some behind. What is happening . Halfway into the earnings season, the company posting profits as they doubled. Japan is outperforming its major peers in the region in terms of profitability. You have a weaker yen contributing. Economics continues to give a boost to these companies. When china is in a pace of slowing down in such big market volatility, japanese markets capitalize. It is really a remarkable story here, how well these companies are doing in the face of a macro environment which on the surface does not seem to be doing so well. You are seeing technology companies, the sector doing the best, that Industry Group is outperforming their japanese peers. The earnings game, the profit gain is across the board, all 10 Industry Groups, the major Industry Groups in japan, have seen positive earnings surprises and that number outweighing negative ones. A strong quarter. Shery nice time for corporations. What about the individual . A lot of that is not really trickling down to them, is it . Zeb it is not. The wage growth is stagnating. Japanese workers have seen the biggest drop in monthly earnings since 2009. That is due in part to changes for summer cash awards, bonuses this year. It also due to this larger and ongoing issue that Japanese Companies are not sharing in the love necessarily, they are not spreading out the additional profits to their workers. We know the government has been pushing Japanese Corporate very hard to filter through these wage increases and filter through the Earnings Growth so the ordinary person can earn more. That is important because it supports the overall recovery. Domestic spending, Consumer Spending which has stagnated in japan. Shery spending is falling 2 . Thank you, zeb. Disney is falling in extended trading after missing thirdquarter sales estimates. Lets bring in Bloomberg Intelligence media analyst gita. Expectations were fairly high, but we got some mixed reviews. Where has disney fallen short . This report is a fairly strong quarter, but you were right, revenue did come in slightly lower than consensus estimates mainly due to negative foreignexchange impact. I think the real fear for investors was when management basically cut its revenue guidance for the Cable Network and that was driven not just by for exchange, but also lower affiliate c Revenue Growth because of declining number of subscribers of its Cable Network. That said, disney is a diversified Media Company with multiple revenue streams. It has a very strong portfolio of very strong franchises. Some minor hiccups but there should be no major cause for concern. Shery there has been talk about cord cutting, younger audiences not subscribing to traditional tv anymore. Is this a challenge for disney . Geetha yes, this was a topic that was featured on todays earnings call. Cord cutting is a growing phenomenon. When you have younger audiences, especially millenials, turning more to streaming, Services Like amazon, netflix. This really represents a trend for the entire tv ecosystem, for all of the major media companies, not just for disney. Disney actually is in a little bit of an advantage here because it does have a very strong property in espn. Espn is one of the biggest brands out there because of its live sports content. Very high value content which is virtually dvr proof. It does command some of the leading some of the industry leading affiliate fee, about 6. 5. Shery thank you so much for joining us, geetha. Coming up next, stopping this selloff. Will the rebounding of oil turn around the commodities around . We will have analysis when we return. Shery checking some of the stories making headlines around the world calling on beijing to stop reclaiming land in the South China Sea. Foreign ministers expressed concern the work is escalating tensions in the area. China recently started expanding talks on the code of conduct of asean, offering behavior in the waterways. Ministers say there is a gap between beijings pledge and the situation on the ground. We agree it is imperative that this matter is handled withructively and explored the possibility of putting in place for vented it measures to ensure preventative measures on matters related to the South China Sea does not escalate into a situation that may underminep p peace and stability. Shery thailand says its Human Trafficking operation is causing young women to go into the sex industry. They used social media to entice women and send them to china, malaysia and singapore. Is blacklisted by the u. S. To failing to combat modernday slavery. Washington says abuses in the industry is persistent and largely ignored by the government. Japan has announced temporary suspension of relocation work on the controversial u. S. Airbase in okinawa. Plans to remove them as prolonged issues between local residents. It was announced the head of a local meeting on friday. About 50,000 u. S. Troops are based in japan under bilateral security treaty. One ofe markets the lead gainers in the u. S. Was netflix. After rose a record high securities recommended the stock with a price target of 160. That is the most out of all Analysts Covering the company, more than 7 . Chinese travel website surged by the most in a year. Shares rallied after it offered to buy out u. S. Shareholders and take the company private. Up 20 . Apple fell 3. 2 , pushing further into a correction. Shares are now 10 lower than february. As for the broader market, the s p 500 lost 2 10 of 1 , slipping below its average price during the past 100 days. Lets get more with mark, the chief investment strategist. He joins us live from pittsburgh. Good morning. Lets talk about earnings. Disappointing a little bit overnight, but in general, they have been pretty positive. Do they reflect fundamentals . Mark i think they do. They were expecting to be down about 4. 5 . Earnings is coming in north of 30 which is helped the yearoveryear decline to about 1 . In light of the fact we had the strong dollar which is impacting multinational revenue and Profit Growth and slowing conditions, not just domestically but globally, i think that is factoring into a fundamental picture that is portrayed in terms of what we are getting in terms of q2 results. Shery you mentioned the strong dollar. Is that a transitory factor, especially with low Energy Prices because the fed has been talking about this as if they were transitory factors. Mark i dont think the strong dollar is a transitory issue. We have seen it rallying since the summer of last year. By all accounts, the Federal Reserve seems eager to raise Interest Rates this fall, likely september. As a consequence of the path, the u. S. Central bank is on against the most literal Central Banks around the world, particularly systematically important institutions like the European Central bank and the bank of japan. I think it is likely to continue to strengthen and will not go away. That is something the Federal Reserve will be taking into consideration. Shery where did you see opportunities in the u. S. Amid this environment . Mark we still think the u. S. Economy is 30. Sturdy. Consumers actually are in pretty good shape. We think job growth has helped get Consumer Confidence which bodes more firsor spending. We like Consumer Discretionary stocks like the housing space. We like the consumer staple which benefits from oil prices. Financials are performing very well as we see better domestic and commercial loan activity and recovery in the housing market. Collectively, those are High Conviction sectors in the u. S. Shery you mention oil. We are seeing it read out a little. Commodities overall, are they overdue for an upside, rebound . Mark they probably are. I was looking at a chart this afternoon and by all accounts it looks like it is poised to rebound. Pca countertrend rally in the context you see a countertrend rally in the context because of lingering concerns about chinas economy and the pace of growth. It is coupled with the headwinds of the strong dollar. Shery mark, also in europe, we are seeing solid earnings. Where do you see opportunities there . Is it still time to invest . Mark i think it is still time to invest. We continue to advocate a position in european equities at large, particularly in germany, particularly in spain as well. In terms of sector, our favorite sector within the european complex are financials. European financials are trading below value which makes them very cheap when compared to the usbased brethren. We think the economic picture continues to brighten in europe. You do see critical expansion taking place since we passed the stress test that was conducted through the year last year. That bodes well for financials as well. We think that is the opportunity. Shery thank you for joining us, mark. Ore we go, breaking news Southeast Asias biggest developer has just posted its results. Secondquarter net profit came singapore4 million dollars. It opens in less than two hours. Coming up next, we are off gem hunting in indonesia. Join us after the break. Can one of asias greatest a aheadstories of its competition as it enters middleage . All this week onh bloomberg television. Shery alibaba has named a new president. Former Goldman Sachs partner Michael Evans will take charge. His brief is to make alibaba a platform for commerce which connects 350 million Chinese People from across the world. Web purchases from chinese consumers amounted to more than 20 billion last year. Build it and they will come. Foxconn chairman borrowed from Kevin Costner to buy infrastructure must be improved if the Company Wants to attract investment. Foxconn may spend 2 billion over the next decade if india fixes its power, transport and supply issues. Foxconn is a leading apple supplier looks open about 12 factories in india. It held talks about a possible tie up. Greece says it aims to Reach Agreement with creditors in time to make it 3. 5 billion payment to the ecb. The bill will be submitted to parliament by the end of next week. Approving conditions on the loan from the european stability mechanism. The bill would follow on august 19, a day before the payment is due. The Athens Stock Exchange saw some optimism after mondays 60 plunge. The market closed down 1 following calls for restrictions. Meanssoon as possible that the conditions of the Stock Exchange will be such that all banks, all restrictions can be lifted. When this happens depends on shery a slowdown in china is starting to affect some of the worlds biggest carmakers with bmw debating how to adjust a weakening demand. China slowing economy and the recent stock market rout has put the brakes on car buying. Juliette has been following this. Juliette what we heard from bmw and toyota is that they have to adjust to the normalization of the china market. This is a car market that took over the the u. S. As the worlds biggest carmaker. Recently, we have had the equity rout and a slowdown in the chinese economy. That means consumers will have to pull back on nonessential items like our spending. Bmw sales down by a 10th of 1 in june. The car market dropping for the first time in more than two years. Toyota has been doing a little better, outpacing the industry in china with it being up by 12 but they are seeing how the overall market will be. Lets listen to what toyota had to say about it sales. Market forthe commercial and Passenger Vehicles is shrinking in china. However, our sales for the first seven months of the year are up 112 . Toyota sales in china have not been affected so much and we are not changing our sales target for the rest of the year. Shery japan opening in about half an hour. How are we expecting shares of carmakers to react . Juliette we saw a little bit of a pullback yesterday before the numbers came back. They were down by 1 on the close. It was down by 2. 5 in new york. Toyota is looking quite good in japan, it is up by about 8 year to date. Particularly consider we saw toyota say it is doing better than other carmakers. A bit of a pullback in new york. Shery of course, we are not just talking about toyota and bmw suffering. Who else . Juliette we are seeing ford say it is seeing a factory in china in 2009 and now it is struggling with delivering to the asian region. Volkswagen has seen a pullback as well. It depends on what we are seeing which was a little unexpected in this discretionary market. Shery thank you. The Luxury Department store Neiman Marcus has filed for an ipo in new york. It plans to use the proceeds to repay debt. Neiman marcus was bought by aris agogement only two years for about 6 billion. Bankrupt the Japanese Carrier skymark without a clearer idea today. Creditors will vote on whether the company should be backed by delta airlines. The winning proposal must be approved by creditors and lenders who own more than half of skymark. Coming up next, imf says more work is needed with chinas currency. We will have a special repo shery it is 9 30 a. M. In sydney and you were looking a shot at the sydney opera house. A little bit cloudy. We are 30 minutes away from the opening of trading. On your tv, mobile and online, you are watching first up. The top stories this hour changes the summer bonus in japan has resulted in wages seeing the biggest fall since 2009 in wages. Excluding bonuses in overtime, rose for the fourth straight time. The Prime Minister wants people to earn more money to boost consumption. Theme parks in hong kong and paris are not the happiest places on earth for disney after shortfalls triggered a mess of thirdquarter sales estimates. It grew more than 13 billion. Disney posted earnings of 1. 45 a share, beating estimates. The results were driven by gains in its tv businesses and licensing. Shares fell in afterhours trading. Apples shares slide and its taking its toll on the u. S. Market. The stock fell for the 10th time in 11 days. It entered a correction after