Back to gadgets . We will be live this hour. Betty a jampacked day today. You cannot get the bond kings to not talk today. This is noting that the 10 year, seemseasury bull market to become to an end and the bear market is starting with a yield and hitting 2. 5 and then you have jeffrey, coming out of the later, also in his outlook and webcast when he talks about bill gross saying that this might be a little early but with these yields rising, it is going to hurt u. S. Equities, he noted that everything about two point 63 is going to start hurting equities and that is why he sees the negative return in 2018. Heard that from a lot of the analysts we have heard talk to. But perhaps he jumped the gun when it comes to calling and confirming the end of that bowl, on the market. Bullbond market. It is going to be very interesting when it comes to the face income and currency. Lets see who is right we did see another day of record in tear, the s p , igher and as you can see all that is having his we will get earnings out and it will move these markets have become a better than the forecast. Stocks in asia, treading water but it will be the fixed income and a story today. This is the bonds selloff. This is the key right now, stocks are flat. Juststralia, sydney is getting underway, piercing stocks up about 10 points are so, we are asking the obvious, 7821, piercing the odds resuming that monthlong rally overnight after we did see those building approvals, trying to iron ore futures. Look at oil, 6347, a threeyear high so that commodity rally is continue to support the currency on the yield, up six basis points, that is to 73, looking up or chinese inflation data out. Japan, we will watch federal session. That dod the boj, they are stepping back from their monetary policy, that would be a key focus for the currency. 63 right now, j. P. Morgan among might beng that it early to go along and given that we suit do see years yields picking up. Yvonne lets get you caught up with the first word news with katie lyons. They have agreed to hold military talks in their highlevel dialogue after an 11 hour summit on tuesday. However, the north criticized this out for raising its Nuclear Program. Kim jonguns chief negotiator called the issue a strong complaint over the issue, usually a great that they would join the winter holidays in the southern town of pyeongchang. Bloomberg told that has been told that china changed the regime to manage the yuan. Effectively removing a component to deal with this. The pboc told some lenders to adjust their socalled countercyclical factor. Analysts see that china is confident in the you on yuan s current trajectory. Blasted byon was President Trump over disparaging family. About his will consider voting his alibaba units, this is allowing listings of the dual clashes. Chinas emerging man which is meant is while doing this. A listing from one of chinas largest corporations would be a triumph for the Hong Kong Exchange which is considering a number of changes to attract international businesses. Dayal news, 24 hours a powered by what and 27 hundred journalists and analysts in more than 120 countries, i am kaylee lyons, this is bloomberg. Hours after thats what selloff and they declared bear market and bonds have begun. We heard another bonking saying that is another a little early. Kathleen hays is here with more. This was in this webcast that he put together. What is did he say . One of the original buntings, he is now the henderson capital advises but he says the bear market and bond has started, here is what he said, he broke a line. R trend we are now going back 25 years because this is pretty instructive, here you are with the benchmark 10 year treasury thing as high as 2. 5, that was a pretty big move as you can see, you have to go back to march, that is when they were making their first rate hike of the year and then you saw this move up, back then, you get to 2. 6 , you have a bear market but we didnt, things turned around, inflation was reeked. Week. Ak. What is interesting, on this this is the double in, the gross is it that of it early, he says if the 10 year we have get over 2. 63 , a ways to go on that, it will head higher. He also said that the 10year note has to close at 3. 22 and actually and the market and bonds, id do see that he says this is plausible sometime in 2018 and he says it looks like a 2. 5 twoyear treasury could be in the offering. This whole business of what happened, doj, the regular operation, they all made something shipping, congress and i dont think so, the boj is ready to change their bond and it helped spur the sellout that was over to the u. S. , 60 billion of bonds coming to the u. S. , you get, japan and germany. The u. S. Treasury getting ready to sell the most debt in eight years as it has to do with the deficit caused by the tax overhaul. There is a lot of supply coming on, Central Banks moving away from bond purchases, it seems like it is a perfect as perfect selloff. This has turned into a fullblown their market and pulled that yield steadily higher. This is what we see with the pboce span, china, the will choose the way it manages the yen and also in the mix of Market Forces in the past 24 hours. So how can we interpret this move . Just something us to throw in the make as a what else is going on here, the pboc have put on their website darius comments but this is one of the most transparent Central Banks in the world. Lets look at btv 51. Yuan. S the drop in the it was the biggest drop in two months on the news and right now, with the way the wind rate goes, it can trade a maximum of 2 on either side. What they are saying is it is a countercyclical factor that the banks have to take into account. That factor was put in way back , may, june because the currency weakened. It helped get it stronger, it certainly seems that way because you can see the strengthening getting back on todays nice, stronger levels again and now the question is what does it mean . There very least in ms. More confident in having a strong chinese currency, it could also mean they want to get closer to a more freely Floating Exchange rate. It means that they could want a new division. This will is more headwinds in 2018 and need more help. Tweakst of technical there. Now from bonds to stocks, look at the new round of alltime highs, this is a tone that it sets forth the major earnings report, we will look with su keenan. The s p and nasdaq keep trudging along, hitting records every day this new year. Sue six Straight Days in a row. The dollar getting a boost from policies, check it out, this is right across the screen. Lookds once again, lets at some of the big movers, bitcoin is a theme here, lets call it codec coins, look at the huge jump in a company that was bankrupt a couple of years ago. Toward digital film and now it is announcing codec coins, getting into cryptocurrency. Jazz pharmaceuticals getting a big bump, this is one of the First Companies to specifically and thats the tax reform will be very, very good. This is a midsingledigit drop in the tax rates. That the pressure should stocks are continuing to be other in light of the fallout, samsungs profits will get to that in a day. Meanwhile, lets go to bloomberg because who is afraid of the big bad valley . , aarently not very many performance of Fund Managers and individuals alike, all very bullish. This was all around the world, the s p 500 index chart against the several indexes. This is all in the overboard territory and again, the average of these rising to a Record Record late last week. Again, indicate no one is really ready to say jumped out just yet. Jump out just yet. That big stocks soared today has been jumping on a report that appears to be working with optionstanley on including a potential sale, what is the latest . Pressure from the major activists out there and what you have is bloomberg reporting that sources close to the meta, they are not be publicly identified and they are saying that they have hired Morgan Stanley to pursue options, take a look at the stock chart, you can see there has been a significant rise, the activist paul singer is really involved in pressuring countries to get involved, there is a 6. 5 stake in the company, we are not hearing directly from ,ither singer or Morgan Stanley however those close to the matter said the options that are being reviewed, the Strategic Review could include a sale or it could go nowhere, that that is what we are hearing now. If you look at the yearlong stock performance, you can see the pressure the stock has been under an singer is known for coming in at a weak point and buying a lot of stock and putting pressure to make changes that add value which explains why a lot of investors have jumped on board as of late. Thank you so much su keenan. Later on daybreak asia we will be live with the consumer electronic show in las vegas, dont miss our interview with the president and ceo, that is coming up in 20 minutes. Will be speaking to the Martin Sorrell. Lots of great guests coming up. Lipo to that. More on that rare facetoface meeting between north and south korea, we will go live to so and speak to Park Strategies who say they will have a sign that they are hurting pyongyang. His is bloomberg. This is bloomberg. This is daybreak asia. I am yvonne man in hong kong. Yvonne i am betty liu here in new york. Clear thatas made it is Nuclear Program is not on the table. When that wased brought up. Stephen engle is falling all of the developments from seoul. Can you describe to us how the talks went, as you mentioned early on, it started off promising. Actually, it started promising. It even started with a joke from the head of the north korean delegation who basically said that the relationship with the and ofas been frozen course, you can see the steam coming from my breath, it is extremely frozen here in the koreas right now, minus nine unders here in seoul but blue skies, that is a plus. But again, the money session was all about the low hanging fruit and that is the olympics and south koreas desire to have games that basically personified intent and that is goodwill and not have the threat of war hanging over the games. So south korea was able to get that by allowing more promising the North Koreans offering the North Koreans to come march with us and bring your athletes, bring a highlevel delegation, the North Koreans, this video the games as a korean of the games, not just in not just south korean games. So there was goodwill around and there was also progress made on the military, the military hotlines, they will be reconnected after more than a year of being disconnected, that will be reconnected today, starting today. There was some progress and goodwill in the morning session and then they broke for lunch, a separate and went there are various directions, north and south for lunch and came back to the real nittygritty working level discussions, that is what it started getting a little testy. They started getting into other issues, the South Koreans pressed for a possible restart of denuclearization talks and wanted more answers on north koreas missile and Nuclear Programs. While the north korean delegation took exception to that and basically drew a bit of a redline, north korean delegation, mr. Lee issued a strong complaint that south korea even dare to bring up this missile and Nuclear Program so relations,e start of just the first day of discussions and at the end of the day, the discussions went late into the night towards midnight and if not beyond that. Not helpe could himself, he made the statement saying all of north korea positive high and strategic reckons weapons are targeted at the United States. He doesnt like a North Koreans will back down from their programs. It looks like they went back to being quite frosty at the end there. Steve that we wait and see of the stock is going to last into thaw will last into the spring. Will these discussions on the limits escalate or broaden to them as a programs and other issue between the two koreas . We are standing here at the blue house complex, the Government Center of south koreaf because later this morning at 10 00 local, we will hear from president moon jaein who will give his new years speech and keep in mind, since he took ,ffice, in may of last year there have been 11 missile test by the North Koreans, including their six nuclear tests, there are a lot of questions that South Koreans have of the president in his first year in office. Quite good points, thank you. Stephen engle, or Asian Correspondent joining us live from a very frosty so. Up, a former u. S. Congress official, now the Senior Vice President of Park Strategies to talk a little bit more about what is next. It seems the momentum has stalled pretty early on, was at the right move from south korea . To bring up the issue of denuclearization on the first round of talks . I guess they thought they had to. North korea has made it clear that they are not given of the nukes, in fact, they cannot, the north Korean Response is exactly what i would have expected. The ball is in whose court . Etiquette is a south koreas court to walk away. Intellectually we cant argue with the talks because we always told pyongyang that the road to washington runs through seoul, we can talk to them until i talk to her ally. Southe in danger of korea is so desperate for some kind of it is bad enough that theyre coming to the olympics, now we hear that south korea is paying for it. Why dont they pay for it pay for a few rockets as well, as i see it we are desponding the enemy. This breeds a lot of questions about the redline, theres been some uncertainty about what president month red eyes are and how they line with President Trump and how do you see how he deals with these stocks and how some of the liberal predecessors who historically have been pretty solid when it comes to these negotiations with pyongyang . We had sunshine in the past and it seems like moonshine is a little tougher than sunshine because while he is a liberal, that is the korean nationalist he is x special forces and seems to be a lot tougher than his two liberal predecessors and still is pretty closer to the United States, the Czech Republic is a lot tougher on the north that was 10 or 15 years ago so i think he will roll over for the north like his two liberal predecessors did that he will not be as tough as the other two as to conservative predecessors. Are you disappointed with how the talks came out . Definitely. I didnt expect so soon that they would be willing to send goodies to the north just for them to smile and then to i skaters to john chen. They are walking a very tight line here. Are they afraid that north korea is going to attack them if they dont go to the lipids . Theyre kicking the can down the road, giving more money to the regime that has been under the gun. Pay them now or pay them later. I guess they see having what about diplomacy . I am open diplomacy but diplomacy at what end . At it we should talk to them but giving money before there any concessions, that is how my diplomacy, thats as i can oneway street and i know have just mood has an incentive for north korea to be at the olympics. The last time korea posted the others in 1988, north korea blew up a korean airliner to scare people away. They may do some kind of propagation on the border but the idea that they would attack themselves, that was far to begin with. So kim jonguns overture on wasyears day, you think it a complete farce . There was no genuine meaning behind that . Inside the head of kim jongun. I dont even understand what is going on in this country let alone north korea. I thought it was a decline down from north korea. The three had refused to engage the south. Them, the south was a foreign control colonial puppet. For us to refuse to engage the north and reach out south, north korea blinked. The talks themselves dont bother me. Does this put the u. S. In an awkward position . Other questions to choose between retreating from this fire and fury language and actually planning for some type of war . Does this hurt or help this south korea good cop, u. S. Bad cop strategy . Outthink was in the cards but we are in a spot because as i understand it, south korea asked us to delay the exercises during the livex andy lopez are february 925. Is jonguns birthday february 16 so that could have always been an excuse for another provocation. So we delayed it out of there will. What now . What about when we do do this, the next exercises . And we look like the bad guys occupier, north korea may say that you had to delay further, then what . Asks ussouth korea again and win of doing exercises on her own without south korea. I think it could be a potential Public Relations trap for us. But we had to support the south and the right to talk. What do they present from should do next . At executive what hes doing what do more of it, keep tightening the sanctions, any Chinese Oil Company that supplies north korea and stuck in a series about secondary sanctions on the chinese banks and entities enabling the north, cut them off, we have them on the ropes, that his wife. Im not on twitter myself, i dont know. Now, a quick check of the latest business flash headlines at this hour, microsoft says that exist to the security flaws in intel chips could significantly slow down some servers for personal computers. This is just the slowdowns could be more substantial than the previous indicated. The machines running windows 7 and eight or 2015 earlier would be affected. Intel chips are used in more than that present of laptops and 88 of desktops. Thatberg has been told there is boring Strategic Alternatives to a