Chinas most powerful figures meet in the new year to discuss the First Amendment to the constitution since 2004. Details no details on changes but saying the decision was made on wednesday. The constitution was first adopted in 1982 and has been revised four times since the commonest Party Central committee reviewed will review amendments later in january. Hedge funds may be the big losers on some investment returns in china. It takes effect on january 1 and is part of a broader shift in the Companies Pay tax. The worlds second in the worlds secondbiggest economy. Chinese hedge funds are already under official scrutiny. Neutral funds are partly exempt from the new charge. The world most valuable spirits maker has a bullish view of this year and next. The price ofse corn liquor by 18 next year, the biggest hike in five years. They want to grow revenue by 10 in 2018 and expect total profit to have risen by almost 60 . A new gallup poll finds President Trump beaten by his predecessor is the person most americans admire. The First Time Since 2008 that a sitting president has not one the accolade. Manrs on the most admired include the pope, john mccain, elon musk, a jet b cells. Hillary clinton was the most admired woman for a 16th Straight Year although her support phil to the lowest since 2002. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Allen. L this is bloomberg. The asiapacific. Howing strong gains mscie is looking at the index, close to the november record high. Weep . E are will we not pointed out in november we did see these record highs when it comes to the close for the msci index. On this chart. We are not seeing much in the way of equity markets gaining ground this morning. We have the taiex and the coffee higher. Y text kospi sony optical is the best performer on the hang seng and i want to highlight the bank in jakarta, extending gains. The stock raised to equal weight at morgan stanley. In on shanghai, a stronger profit outlook and it june 2015 hi in hong kong. Hyundai rising after its record plunge but on course for a slump this month. Losses of nearly 39 this december. Lets check in on chinese carmakers, they are broadly climbing. The top shareholder of bubble a be, earlier jumped nearly 9 after being raised to outperform at credit suisse. Byd set for the first drop in three days. The time when hes dollar trading at the strongest level since the summer of 2014 the taiwanese dollar trading at the strongest level since the summer of 2014. The greenback booming on bond inflows and better tourism inflows. Currencies, thats the trend. We just talked about emergingmarket currencies and how they have been outperformed the dollar, and that is expected to continue. , andrew,k at all this confidence lower than anticipated. The foreignexchange markets making it out . The companys number pushed down the dollar, which gave currencies a bump as we head into the end of the gear. They are up for a fit day today closing in on an 11 gain for the cure, which would be the best performance since 2009. A number of factors behind this. As you have party mentioned, the dollar has been generally fairly weak this year. We have also seen massive inflows into stocks and bonds this year which has buoyed those currencies. Global growth both in the developed and emerging economies stand very well and it is forecast to increase again next year. Well has held up recently reasonably well. Some were anticipating more of a slowdown, and we have had a fairly modest path of u. S. Rate increases. All those factors have added up to a good year for em currencies. Talk about the south korean won, it is one to watch. Tell us why. Its been the best performer in in asia this year. A lot of people might think that is somewhat surprising, given the brakes when ship weve had between north korea and the u. S. This year the brinkmanship it had this year. Growth comingrong through in south korea in the third quarter. On top of that barry very big bond flows into korean bonds and the wine is also the most liquid em asian currency. Won is most liquid. Rishaad what about the gamut of emergingmarket currencies elsewhere . To happen strong across the board. The best performer is the currency in the czech republic. Its a bit of a similar story to had strongthat weve growth there, around 5 in the czech republic. The Check Central Bank has hiked twice this year and will continue to go on hiking next year. Elsewhere come in december, the south african rand has been an absolute star performer, going up about 12 against the dollar. A lot of that has been on the back of the men who won the election contest against the wife of the current president , jacob summa. Will tackle corruption and get the south african economy on a firmer firmer path. Theres speculation in the market that some of the positivity has been overdone. He faces a very hard task, and south africa could be in for more Credit Rating downgrades. Rishaad thank you so much, andrew james in singapore. Its been a strong year at home and abroad for chinas president she jinping we will look at the challenges to come. Will asian equities managed to squeeze in another record before years in . We are tracking that next. This is bloomberg. Rishaad we are back. This is bloomberg lie. Lets have a look at the business flash headlines. Mitsubishi says it has lowered its estimation of customers 229 two 200 for an says the final report on the issue will be published around the end of february. A company said they have not received any poor quality goods. Airways in a has apologized to characterize to passengers after tokyo flight returned to los angeles because someone was on the wrong aircraft. The flight was four hours into the trip when the pilot decided to turn back. Was onel Chrissy Teigen board and is asking why everyone had to suffer for one persons mistake. Has completed a 3. 3 billion dollars deal for fortress investments. Time a publicly traded firm has delisted. The stock closed tuesday almost 60 below its ipo price. Softbank agreed to buy fortress at 8. 08 a share back in february. Lets have a look at this chart, with a record0 high. Trading thin on volumes over this Christmas Period with. Do we see more emergingmarket strength . Approaching the record high. Steve is with us for more. Steve, there we have it. Will get fresh records and 2017 teach us what possibly comes in 2018 . For the first half of the year, it seems to be more of the same. Generally looking fairly positive. There is no reason to change that view as we switch from december 30 12 the first of january. As far as we can see, the only potential cloud on the horizon for 2018 may be inflation picking up for the backend of the year. Rishaad that is possibly the back end of the year. November was all about the tax bill in the u. S. And every gyration caused a market gyration. What is going to be the next immediate wall of worry that we will be facing . Least on aat shortterm basis, its going to be digesting the effects of the u. S. Tax cut. We have already begun to see some Foreign Companies noting that this does have a Balance Sheet impact, whether or not it has much of an impact on the p l at the moment is still being worked out. That will be what we are focused on for a bit of january. It will also be any changes to the lord of the Federal Reserve in the u. S. To really see if we can glean a little bit more from the tea leaves. At the moment, it all seems to be steady as you go and likely to continue, and when janet yellen steps down at the end of february. And our three rate hikes priced into the dollar now . I think so. It has been very widely telegraphed and that has perhaps been one of the reasons why the dollar, as you pointed out earlier in the program, has been a little bit weaker than one would have normally expected in a rising rate environment. But that comes back to my if inflation about starts accelerating a little bit more during the course of 2018, then the speculation will be four rate not we get increases in 2018 and possibly more in 2019. Theaad the bond market and flattening of the yield curve notwithstanding, thats probably windowdressing, but that is something that is worth watching, or is it something that you dont watch anymore because it has been manipulated so much, the bond market, that perhaps its not giving you the vision that it perhaps used to do if you were in equities . I think that is true. Obviously the high level of correlation weve been seeing across a whole range of different Asset Classes for quite a long time now has broken down a lot of the traditional relationships between the bond market and equities and so forth. Inis certainly the case that overall terms, notwithstanding shortterm moves, bond yields. Re very much at historic lows therefore, the Downside Risk in the bond market does seem to be more announced and perhaps for the equity market. For that, you have to look at Interest Rate policy and see whether or not we get Interest Rates rising faster than expected. At the moment, that does not seem to be in the cards, for the early part of 2018. Rishaad someone call that about complacency some would call that complacency about inflation. We have qe in place still, when does that get wound back . Japan, the answer is probably never. Glib, i admit, but nonetheless, they are so far off their longterm inflation target said it seems unlikely we will see any changes in 2018 to their extremely accommodative centralbank policy. In the case of the ecb, perhaps a little bit closer to gradually winding back, as they stated they would do on qe and bond market purchases. So that will be a gradual thing during the course of next year. Obviously eurozone economies are actually doing reasonably well at the moment. Publicly the only thing that is causing the central bank to be a little bit more cautious is the ongoing gyrations over brexit and europes reach a relationship with the u. K. And what impact, if any, that has on economic act dividend. Activity. Talk to me about britain. The uncertainty around brexit has affected not only currency, but weve seen the ftse underperforms some of the other indices. Are we likely to get more clarity, and i suppose, will it be for the good for those who are long . It is an incredibly difficult question to answer. There was obviously a degree of optimism that surrounded theresa mays supposed opening of the next round of discussions with regard to trade and various other bits and pieces. As we can now see, watch more people are highlighting the degree to which there are very real obstacles to rapid negotiations and rapid agreement over a whole host of different things. I think unfortunately, that remains a core theme or 2018. Unfortunately, also, we are now 15 months away from march 2019 and the supposed deadline. I think that 2018 will certainly increase the pressure for a deal, but whether or not we actually get it i think seems very unlikely. Rishaad what is your top idea, looking into the year ahead . I think it is still pretty much focused on asia. , which isike japan producing the most rapid rate of earnings wrote of any of the major markets. Growthon of earnings of the major markets. That is what weve been following for all of 2017 and will not change in the first half of 2018, along with india and vietnam. Everywhere else, pretty much steady as you go. Europe will be producing steady gains during the course of next year. In overall terms, it will still be in equity focused portfolio strategy. Rishaad good stuff, steve. Have a great 2018. Steve davis, cio and founder. Elon musk said he will be turning out model three by the thousands by now. He remains some way away from his goal. Rishaad this is bloomberg markets. Musk says his longawaited model three is still parked in what he is calling production hell. Covers has a neutral rating saying the production line is the problem, but things may improve. Now they are trying to plan our to 5000 cars by the in 5000 cars a week by the end of the First Quarter. They were supposed to be there by now in december. So far they have produced 280 model threes since introduction in july, so they are behind. A lot behind, i would say. Up to 5000 cars a week by the end of december. What is the issue, is that the battery, or what is it . The issue is the whole production line. As elon musk has set, the Production Supply line all he moves as fast as their slowest supplier. Yes said many times he has been living in production hell. Is anything materially going to change in the next three months to allow them to get to this ambitious target . Hopefully one issue is they rely on many Single Source providers for a lot of their components. Mercyin, they are at the of their slowest moving supplier. But once production kicks in, they do occupy a factory that its peak in the 1970s produced 1,000,300 thousand cars a year. It used to be a pontiac factory. They have taken that factory and brought it into 2017 hightech production levels. It is probably one of the most technologically advanced factories. The capacity and capability are there. Its just organizing the thousands of components and parts that have to be in place to produce the cars. Does it matter if he doesnt reach that target by the end of the First Quarter of 2018 . Yes, for two reasons. Elonholders have given musk a lot of passes on not meeting his production schedules , because he has built such an incredible car and company and he is such a great ceo and visionary. However, investors are relying on the model three to take it to a mainstream automobile manufacturer. In the beginning, they were kind of a niche manufacturer. And meet theevenue earnings targets and expectations in cash flow expectations to eventually be cash flow positive and then make money, they are going to need to get pretty close to the production schedule for the model three. Do you see the stock price cratering if they continue to go through delays . Yes, that is the big risk, if they dont meet their production. If it dont have the revenue and money they need to get to be cash flow positive and proper, then they will have to try to raise more money. Many otherthere are electric cars coming onto the market over the next two years. By 2020, gm will have 23 electric models. Almost all the mainstream auto manufacturers will have electric cars as part of their lineup. Lets look at the trading day and see whats going on. Asian stocks approaching records. This is the view of sydney, looking like a gorgeous day there. The asx 200 up. 10 . Looking at it in u. S. Dollar terms, where already on it day to day basis . Maybe 16 your today for the sydney market. Looking at hong kong,. 6 up, taking a rise this year to 34 plus. It is 11 29 a. M. In hong kong. Hedge funds may be the big somes from th e new tax on investment returns in china. Shift int of a broader how Companies Pay tax in the worlds secondbiggest economy. Products such as mutual funds are exempt from the new charge. 15,000slipped below after its biggest rally in two weeks. It and in a route that wiped away more than 9,000. Futures slipped more than 3 . Volatility adds to the debate about how to value the digital coin. Tim cook received a 74 rise in his annual bonus in 2015 as apple posted higher revenues and net income. Intook him 3 Million Dollars cash he took home a 3 Million Dollars in salary plus and equity award of 39 million. The tokyobound flight carrying Chrissy Teigen and john legend turned back to l. A. Four hours after takeoff because somebody reportedly boarded an error. Doissy teigen tweeted, why we all caps on get punished for this one persons mistake . Why not just landed tokyo and send the other person back . The airline has apologized saying they failed to deliver the Customer Service that they strive for. 2700l news powered by analysts and journalists. I am paul amlin paul allen, this is bloomberg. Tailwindnot much of a coming out of wall street. Volumes are low at this time of year but the tokyo session is getting underway. End can say were ready to 2017 on a high note. These are leading equity markets higher along with shares in china. With stocks, bonds and currencies rallying, even though we are seeing light volume. Country gardens has climbed to a record, one of the best performances. Shares in manila have jumped to a fresh high. The Malaysian Ringgit is climbing. The currency is the secondbest performer in asia. The bit current moves we are seeing bit currency moves we are seeing. This is clocking the biggest jump since july thanks to bond inflows and tourism spending. And of stocks also at a fresh high today. This dish the rupee holds at its strongest level in one week. We have the yen edging higher but staying rangebound. The nikkei 225 is adding about 0. 1 . Firms are helping to support them this thursday. Rishaad signs of strength in japan, data showing a better than expected fracturing. Henry joins us from tokyo. How do the numbers set us up if we take the whole quarter . The story remains the same. The Global Economy continues to support growth in japans economy. Exports have been strong. Exports in november were 16 . We are seeing that feed into higher Industrial Production and growing capital investment. Solid numbers in industrial output today with a slight increase on month and a solid increase on year. External demand continues to drive japans economy. Themes is not running over the course of the year. How to these figures from november dovetail into that . Again, the story remains the same. We saw a Strong Semiconductor going toward the u. S. Is strong andand synchronized. There are some concerns about momentum in the Global Economy in the second half but right now things look good for japan. Rishaad do we see any kind of impact from these corporate scandals . Has that affected Industrial Production . On the face of it, it would seem absolutely not. We dont see anything in the numbers to suggest that these scandals have had an impact on the real economy. It seems like every week a n