I am paul allen in sydney. We have some breaking news right now on south korea. We are awaiting the bok decision. Industrial output for october, down 1. 1 in industrial output month on month. Year for october, down 5. 9 . Expectations were for a continued rebound in industrial output. Not great on year, so news at all for the south korean economy, industrial output had been on the rise of wing to the export of electronics and other items. Have a bit of the damper may be countering some of the opinions that the bank will raise Interest Rates this morning. We will introduce more uncertainty in that decision. Markets seem to have priced it in. We will wait and see what happens when we do get the results of the bank of korea Board Meeting later on. Running ints up and the asiapacific. Lets take a look at new zealand. Off. 3 . The kiwi dollar little changed against the greenback. Trading just getting underway and australia. Not too many stocks online at the moment. We are seeing a little bit of weakness come off. 1 , no change to the aussie dollar. The 10 year easing off a little. We are also counting down to the opens in japan and korea. Lets check in on japanese futures trading out of chicago, higher by. 1 . 5 ,ikkei 225 higher by the u. S. Dollar strengthening a little the against the yen. Hearinger we had been , now chinasley envoy to the United Nations is speaking in china, saying all parties and north korea should. How strength this after comments by President Trump singh he spoke with president xi jinping and that will turngreed they the dial up on north korea with stronger sanctions, but not clear yet what the sanctions are and who would be opposing go sanctions. We will continue to monitor the chinese envoy and his comments to the United Nations. Back to the u. S. And the selloff in tech stocks. Moving higher, but the nasdaq tumbled with the fangs stocks taking a big hit. Su keenan withis more. We started off on a high. Tax reform. On you are seeing a rotation out of fangs stocks into the momentum yet to occur in those related tax gains. What we saw was a tale of two markets. He dow posting gains the nasdaq at 100 was down more than 2 lets look at some of the big movers. Look at block chain, anything bitcoin,o block chain, the Technology Associated with that taking a hit. Speculationte on and a story after hours on reported talks for an acquisition by nokia. Target up the big on the move in retail. Lets go to the after hour in juniper. It was up better than 20 at one point. Cnbc reporting that nokia is in talks according to unidentified sources with juniper. According to the source would vie you juniper at 60 billion. That is really driving the stock up. Interesting to see how that plays out thursday. Retail on fire. This is a group that has been badly beaten up. Positive commentary on the strength of the shopping season ahead. All these stocks have wind at their back, particularly some of the more troubled stocks like nordstrom and macys. The fangs stocks taking a big hit. Tell us more about the rotation and the tax issues at play. That allis a view these tech stocks have gotten a pretty good tax advantage, so they dont have room to run. The decline was significant. Trop llion combined drop. At this. It trails the broad market. Chart 350 three of 1 changes in the s p 500 versus this group. Huge drop here. The block slumped on speculation that u. S. Tax reform were not benefit this group and investors wanted to move to other stocks. , the indextors taking a big drop. You can see the huge runup this year on a couple of different. Actors lets go into the today chart one thing that concerns analysts is that these stocks are a leading indicator of demand. That could have significance in terms of taxes. Lets go to macron. You can see the drop weve had. Down grades ons momentum baked into the cake. Stockso saw two other that did spark a reversal. There you go. 20 move. In the context of bitcoin, that qualifies as a healthy correction. , 3661. To show this chart that strips away some of these firemen moves we have seen. These are violent moves we have seen. You some of the wild swings in bitcoin are not quite so wild when you consider it in that context. That looks like the right chart. See a fewcan potential flaws for bitcoin that makes it a little less shocking and we have been discussing. Joseph stiglitz had some interesting points as well. Betty he has indeed. It is maybe why he makes these points. Bitcoin is about as viable as netflix. , it might disappeared be sad what to do on a friday night, but i dont know anybody will be losing their jobs over it. This is what he said about bitcoin. One of the main functions of government is to create currency. Bitcoin is successful only because of x potential for circumvention and lack of oversight. It seems to me at all to be outlawed. It does not serve any social usable function. Betty he is using the argument that a lot of people who have been critical of bitcoin because it has been used for Money Laundering, the black market, what is the good that bitcoin brings . Paul i feel like he is stealing my lines. I have been asking a number of guests about the role of government in currency. It is a cornerstone of solvency. It will be interesting to see what happens if that doesnt hinge on the authority of the nationstates. I think he was watching you last night and earlier this week. Turning from bitcoin, other news we are following this morning, lets get to courtney collins. You. Ank new sanctions are to be imposed on north korea after President Trump discussed its latest missile test with his chinese counterpart. The white house has not specified whether they will come from the u. S. Or china, but beijing has far greater leverage over its ally. Current sanctions have only limited impact and talks have been stalled for years while the north has continued strive for nuclear weapons. Priced its jumbo bond sale to be the biggest dollar bond sale bashir. The 7 billion transaction will be offered in five points, eclipsing chinas 6. 6 billion offering in june. 8 billion dollars in its first bond sale, the largest by any Asian Company outside japan. Well producers offered a united front as they arrived for talks in vienna. They recommended the current curbs be extended. Final details will be announced later with oil traders expecting any extension to be reviewed at the cartels major meeting in june. Goldman sachs and citibank warned of russias reluctance to accept the cuts. It was nine months, not six months, ok, so this is solid. The majority of members will agree that it will be in conformity with that. Told aolm turnbull has after the banks themselves ask for an inquiry. Scott morrison sang it is vital to rebuild public trust and into the Political Uncertainty depressing the sector. Shares of the big lenders opening lower in sydney after thursday morning. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Betty still ahead, we are counting down to the bank of career great decision. Joining ushs and with the prediction on whether thursday is the day for a rate hike. Plus, the clock is ticking on a u. S. Tax deal by year end as President Trump claims the bill would hurt him and his wealthy friends. This is bloomberg. Looking at live pictures from the floor of the u. S. Senate where republican lawmakers are voting to start. He debate on that tax bill republicans do have the votes to get that debate underway. One of the things interesting to watch her will be this trigger for tax increases if revenue targets are not met. There is some question over whether or not that will be possible. We have President Trump keen to see some concessions for child care, but one not bring that Corporate Tax rate above 20 to pay for it, so we may see some discussion over the trigger for revenue targets and a potential increase in taxes as well. Lets have a listen to President Trump, who promised not to veto the bill when it arrives at his desk. Desk, iey send it to my promise all the people in this room, my friends, so many friends, a great state, i promise you i will sign it. I will not veto that bill. Isl all right, with us now our capitol Hill Reporter laura davis. We were talking about the trigger. If that tax trigger happens, what could it look like . One option is basically a provision that would say if we dont meet the growth, that Corporate Tax rate will come up one percentage point. Another option is that it would cut spending. That would runn afoul of senate rules they are working with. Increaselike a tax more likely than a spending cut, those in the house and senate the dont like that. It creates uncertainty for businesses. Other saying we believe it will grow the economy and this is an insurance policy we will never have to use. Gop billts say this does pass on thursday or by the end of the week, what is the timeline after that . They are moving at breakneck speed and want to get this done before the end of the year and before whoever takes over the new Alabama Senate seat. Basically what will happen is they will pass this bill and then have to compromise with the house formerly through a Conference Committee where they sit down with representatives from both sides or it could be an under the table, behind closed doors, unofficial compromise, then both chambers would have to approve the bill again. We are not done. There are still changes. They still have to make sure they have 50 votes in the senate and enough support in the house. Betty thank you very much. Reformig deeper into tax with stephanie miller. You give a 75 chance that congress will pass tax reform and a 60 chance they will do it in this quarter, in the fourth quarter. Are those numbers rising for you . Thank you for having me. They will go pretty high if the senate can pass this bill on the oror if it happens tomorrow early friday. Those numbers will go way up. I need to see the Senate Passed this first. Where they are now is where the senate was with aca repeal earlier in the summer. It was on the next major vote on the senate floor during this reconciliation process that we saw senator mccain and senator collins and senator murkowski voting to kill the bill. I dont think we are quite there yet, but i am very bullish and i think it is very doable. Betty we are not quite there yet, but could we encounter, could this be obamacare 2. 0 in the senate . There are a lot of reasons why we will be able to look back on this in a month and say it may be either way. Thehe end of the day, all members on the republican side of the senate really want to make this happen. Lookingsenator corker at that trigger option to try to help him justify a vote as someone who cares deeply about the deficit. Them working intently to make it possible, but every one of these issues that they raised could raise other issues and other problems on the floor, and so it is unclear, but i think the intent and the will is there, so there will likely be away. Betty indeed. It seems like some of the big thees that we saw like deduction, the individual mandate come and those have been largely resolved, so what will be the biggest Sticking Point now . I actually dont see a major Sticking Point between the two chambers. Ort was the worry with salt aca. Aca has brought a few senators to the table. Senator collins and makowski might be getting a commitment on independent market stabilization for a vote to repeal the mandate, so it ends up winning their votes. The real issue is can the senate get to a compromise among itself. If that is possible, i dont see any real issues between the two chambers that are not resolvable. Betty no Sticking Points today, but are there a few down the track . Paul not once did President Trump a mention debt. This will add 1. 5 trillion to the debt. Are we setting the scene for another grand showdown . Absolutely. The folks in the senate who care deeply about the debt, corker, flake, mccain potentially come a could have a problem with this. The Tax Foundation estimates the senate bill and a previous form would end up adding once you take Economic Growth into account roughly 500 billion to the deficit in the longterm. That number is probably too high for the senators and needs to seendown, but we have not a dynamic score that incorporates that Economic Growth for the latest senate version, so there is an opportunity Going Forward to try to include new policy and this is what the trigger could do, either increase Economic Growth or create some sort of backstop if they dont hit it. The real issue with his trigger as it is currently envisioned is by making corporations worry that their tax rate might go up in the future, that impacts behavior now and down the road if they do not get that Economic Growth they need to get in order to not have the trigger set off in the first place. Betty thank you very much for joining us. Us andou can always find the days big newsmakers on the. Adio from 7 00 a. M. Hong kong you can download the app or adio. Com. At bloombergr this is Bloomberg Markets asia. This is bloomberg. Betty this is Bloomberg Markets asia. Shares of the big aussie banks have opened lower. After Malcolm Turnbull called a wind ranging inquiry into the finance industry. The big for themselves had asked for a Rail Commission to rebuild public trust and into the Political Uncertainty they say is depressing the sector. For more, we are joined in sydney by our next guest. Why now . Good question. We have in talking about this for the last year. This was coming. The government has been done under pressure and momentum was building for Opposition Mps to conduct an inquiry. The government has decided this is the way they can control this situation. Paul there are some risks involved. The big risk at the bank is bank what will be uncovered. They have been looking for things that could be embarrassing to them and they have selfreported a number of issues, but you never know when a commission that can subpoena witnesses what they will find. Betty it is always a relief for them, right . It has been weighing on the sector for quite some time. Yes, it has. It has been a drum roll going on and on in the background. Does give the banks and the government as well a 12 month inquiry, sir relatively short. Give some certainty and hold out the possibility they can put some of these issues behind them. Betty thank you so much. Sector. Ustrian banking some headlines coming in. Several vacancies on the board of fed governors. Nominated toriend be another fed governor. Several vacancies on the board of governors, and yet another name being put into contention on the fed. Plenty of vacancies to fill it we will be keeping an eye on that story. Coming up, north korea facing further sanctions after its latest missile launch. We will look at what is on the table. This is bloomberg. This is bloomberg. Paul 9 30 in sydney. 30 minutes away from the first major market open. York, 6 30 p. M. In new where markets close lower, dragged down by that selloff in tech shares. Got one step closer to passing tax reform in the United States. I am betty liu in new york. Paul i am paul allen in sydney. Lets get first word news. Thanks. First up, Senate Republicans may have provisions to the tax bill that could trigger 350 billion in automatic tax increases beginning in 2022. Some senators sought the provision to prevent the tax cuts from increasing federal deficits. The gop bill reduces revenue by 1. 4 trillion over 10 years before accounting for any Economic Growth it might produce. President trumps retweaking of antimuslim videos has wronged condemnation from lawmakers on all sides. The president s Early Morning tweet sparked rare criticism from the u. K. Prime minister theresa may said he was wrong in Jeremy Corbyn said it was dangerous and a threat to society. The president has yet to say why e read tweeted the post. Theresa may visited troops in iraq, she said negotiations were continuing and the u. K. Would honor its commitment to the european union. She also insisted there would be irelandborder between and the republican after brexit and that Free Movement will be respected. Bali airport has reopened after a threeday closure sparked by a smoking volcano. Ash awayift pushed from the airport, leaving clear air for planes. Hundredsown canceled of flights and stranded thousands of tourists. Indonesia said the danger is not over. Urgedent joko widodo has anyone still near the volcano to seek safety elsewhere. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Paul thanks. We are counting down to the market open in tokyo and seoul, korea with sophie kamaruddin. A bit lower in australia and new zealand at the moment. What are you keeping an eye on . Fluie we had that fang that could catch on in asia. Tencent has been on the back foot. As you can see from this chart 4512, tencent in blue has then outperforming the fangs stocks in the bottom part of the panel right here. We have to keep things in context when it comes to the tech space in asia versus the United States. Bitcoins wild ride is continuing , now below 10,000. When it comes to the ecoagenda, asian factories in focus, chinese pmi data, factory output from japan and south korea. Did have aories sluggish october with production falling 5. 9 . Pulling up the futures board, some jitters before the open in seoul, korea and tokyo. Forill