Hurting the economy. Retail sales and Hotel Offices tumble. Tourism from china sliding more than 40 . Shery later on Bloomberg Technology global link, we will talk about airbnb charting an unconventional path to the Public Market and how vcs are looking to disrupt the ipo business. Lets get you started with a quick check of the markets. U. S. Futures gaining 1 10 of 1 but this after we saw the s p 500 fall the most in about a month. We have the s p 500 finishing below its 50 Day Moving Average of 29. 48. Every sector turned to the red after we saw that we u. S. Manufacturing number appeared we had industrials leading the declines, not to mention banks moving lower as we had raising pressure towards the 1. 6 level. High volatility was pretty and the vix headed towards the 20 level as we have had october very volatile, if not the most volatile month of the year. That also having an impact on the markets. We are seeing u. S. Futures slightly higher at the moment. Lets see how asia futures are looking now. Paul yes. That is pretty unsurprising. It looks like we are shaping up to have a fairly ugly day on the markets. Nikkei futures unchanged but in australia, declines of more than 1 . New zealand has been trading for one hour, off a quarter of 1 . Both off ondia holidays today. We will have more on all of that in a moment but for now emma lets get the first word news with ritika. Ritika the Global Economy is showing warning signs as manufacturing is stuck in a slump. Exports falling and sentiment sliding. The u. S. Factories index and excitedly dropped to the lowest since 2009. South korea reported a fall in Consumer Prices and the rba cut rates to a record low. The wto cut its forecast for comments to the lowest in a decade. Toyota led the u. S. Auto sales rate last month but in a good way. Overall deliveries fell in september by 12 . Recording a 16 decline year on year. Automakers had to pay record 4000ives of more than last quarter according to jd power, automotive. The record 93 month sales growth streak has finally come to a halt. U. K. Prime minister Boris Johnson will lay out his final brexit deal on wednesday, warning the country will crash out of the European Union if brussels will not engage. Planelegraph reports his was seen in a special relationship with the eu until 2025, subject to customs checks at the irish border. The eu is said to be discussing a potential time limit on the backstop mechanism. President trump has reviewed fashing the fed, tweeting that jay powell and his team have let the strong dollar at a global disadvantage he continued his andaign saying the governor the fomc are the worst enemies. He says they dont have a clue. Pal is yet to indicate whether he will cut rates again this year. Global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Paul thanks. The Global Economy is flashing a clear warning sign with a wave of data showing manufacturing stuck in a slump exports falling and sentiment sliding. Garfield reynolds and Sarah Mcgregor joins us now with more. Numbers goten those released, we saw a profound reaction. The yields, dollar, stocks all down. How are we setting up her asia . Garfield asia will be more of the same. In asia come of the u. S. Dollar will actually strengthen against currencies. Asia is very export driven, very export oriented. So exports go to the u. S. , if the u. S. Manufacturing sector is doing this then that is bad news for them. It follows on some pretty poor pmis across asia. Also Industrial Production in south korea. I think japan. All ready lots of reasons to be nervous. That will hit stocks and currencies. As far as bond yields, they started backing up seriously because of what the boj has been doing to its market. Some talk of bond are beginning but the in my snuffed that fire out. Shery there are some issues, whether semiconductors in south korea or cars in germany. Does this mean we should be more nervous in those sectors of the market . Beeneld well, those have the centers of pain. In fact, there has been a fair bet of bad news priced in for semiconductors in south korea. Taiwan has been bit of a standout. It has been outperforming but it is quite semiconductor exposed so there has been some concern around that. Problemsas a lot more than automakers. The german industry has been on life support at best for two were three months at least. That was actually the clearest Early Warning sign. It is hard to see much capacity for picking and choosing your poison when it comes to germany. The hit on manufacturing coming from these trade tensions. We just have the wto cutting the global trade growth forecast for this year to the weakest level in a decade. As you can see in the chart, the volume of trade increasing by 1. 2 this year. 2. 7 next year. That is the forecast after a 3 gain in 2018 but at least it seems in one part of the market, the commodity sphere, soybeans in particular, there could be more trading going on coming from china. Sarah absolutely. Since this trade war began, we have heard everyone from the wto to economist warning that trade risks are the biggest impact for Global Economy. That is starting to show up in the data and in forecasts. We heard from the imf today which indicated it may lower its forecast for 2019 growth for a fifth time in october, later this month when it releases the economic outlook. That is really looking at this soft data. As you said, there is some hint right now, indication that china is resuming these soybean purchases and scaling them up. That is a good sign for the trade talks. If china and the u. S. Can come to some sort of agreement, a lot of people would agree that would be a good sign Going Forward for the Global Economy. Potentially a path of a little more of a recovery rather than a slowdown. Paul yes, sarah, im sure we remember President Trumps tweets a few months ago. Trade wars are good and easy to win. Does not seem to be shaking up that way. 10thn washington on the october, what is the best hopes . Sarah we know officials were in washington a couple of weeks ago preparing for those talks. China making these soybean purchases would be a good thing. We heard from wilbur ross that the u. S. Appreciated that move but a lot bigger fish to fry in these trade talks. I think we need to see the two sides meet, what they could potentially agree on. Can they come out with any sort of deal from these two days of talks or will things simply get worse . It would be impossible for them to make any progress. Shery thank you so much. Also thanks to garfield reynolds. Lets turn to hong kong, reeling after the most serious clashes since widespread unrest erupted in june. A demonstrator was shot by police for the first time. Sophie kamaruddin on the ground for us today and the Hong Kong Police commissioner calling it one of the most violent days the city has seen. What is the atmosphere like right now . Sophie yeah, you can see the remnants of the violence. Helmets on the ground, graffiti on walls and billboards. It beginning the afternoon as people gathered around an authorized assembly for the worst hit District Across victoria harbour. While we had tens of thousands of demonstrators expected in a peaceful march from Victoria Park passing along this route. By sometime, violence erupted on Hong Kong Island as well as to the east. Using petrolters bombs, throwing bricks, destroying public property including stations while we had police bringing out their arsenal of teargas, rubber bullets, batons and water cannons, leading to more than 118 arrests on the day. Charges including rioting. More than 30 hospitalizations, including an 18yearold student who was shot. The Police Commissioner said the officer acted within reason and lawfully, but the u. K. Foreign system secretary called the act disproportion and risk inflaming the situation. Police confirms six live rounds were fired, including to warning shots. Mess all right, so a real on tuesday. What can we expect today . Sophie on wednesday, as we have become accustomed we had traffic early morning. Street cleaners cleaning this graffiti and stations are to be open. Hong kong Financial Markets are to be opened as well. According to local news, we could see the 96 protesters charged with rioting being brought to court today. There has been calls for a general strike to be placed next wednesday but it is difficult to gauge how much participation there may be. Shery Sophie Kamaruddin from hong kong, thank you for that update. Still ahead, u. S. Auto sales hit the brakes last month, setting the stage for hefty incentives to clear older models. We will look at the rocky road ahead. Rba joins the the race to the bottom, cutting rates in its latest meeting. Philip lowe warns of more actions if there is a global shock to the system. This is bloomberg. Shery i am shery ahn in new york. Paul i am paul allen in sydney and you are watching daybreak australia. Ofecord low in australia. 75 after the reserve bank made a third cut since june. Our next guest says the cuts in fairly quick successions hurts the reputation as a policymaker. He joins us now. Here we are. We are deeper into uncharted territory, three quarters of 1 . The governor spoke after that decision. Lets have a quick listen to what he said. Importantly, the board also recognizes that Monetary Policy still works. It supports employment, jobs and Income Growth across the economy. Paul well, these low rates also refuel house prices and prop up equity markets so to what degree is the rba have a balancing act . Is it pushing on a string now . Guest good morning. I think the rba is doing the right thing given the outlook the domestic and International Economy in terms of easing Monetary Policy and financial conditions. It has only been to the Housing Market not seeing it lift the domestic activity but that is more of a supply issue rather than anything else. For us, it is a case of looking with the rba stated with the Forward Guidance being stronger. Driving the labor market to full employment which is getting the Unemployment Rate down to 4. 5 . That means further rate cuts are more than likely as the rba does want to get there. The question is whether that comes in november, whether that happens next year and what degree we see them start talk more about unconventional Monetary Policy to drive that growth rate higher. Rba does nothe usually cut in isolation. When do you think it is going to be . Are we looking at february next year and when do we see qe . Isry the question really about how the data unfolds between now and november. We are looking towards the resale retail sales figures. Consumption has not been playing its role like it had in the past. For a long time come of the Australian Consumer was willing to spend even though wage growth was not great. You have seen that turned. You have seen that leverage weigh on the consumption outlook even though you have the support for Monetary Policy and a little bit from fiscal policy in terms of the tax cuts. Of beingate of case dependent on outlook consumption and international factors. As the risks easiest, the rba should keep pace. It makes it more difficult for the rba to hold through next year. That pushes out currency the wrong way. However, i dont think the rba months to rush in terms of where it is going with rates and it does not want to go into qe. It is hoping the federal government will actually step up and do more fiscal policy, but that may not happen until next year which is some time away. Shery what do they need for australian stocks in the meantime because we saw them surge the most in a month after the rba rate cut, but than the earnings outlook does not look particularly exciting at the moment . Kerry absolutely. I think what you will see more in terms of the equity Market Outlook is being dominated by still the trade narrative but the growth concerns are now feeding through. Manufacturing, Business Sentiment survey have been weak and there is concerns about whether they will flow through the services sector, employment around the world. It is a Growth Outlook weighing on equity market right now. Given that multiples have expanded so much around equity markets globally and in australian market, it is a case of saying you are at risk of paying a lot but not a huge not of earnings as revisions go down. It is not exciting to think about equities right now given the prospects in given the fact multiples can expand that much more to keep prices higher. I think equities are likely to be range trading for a while as we see more clarity around the macro outlook and that comes down to what happens with trade which is such a big uncertainty. Shery we are now continuing to see this Global Manufacturing slump. Whether it is the ism number is we saw in the u. S. This chart showing manufacturing has taken a hit, whether it is in china or germany. When it comes to investing trends, do you steer clear of some of those specific sectors that could take a bigger hit from this manufacturing slump . Think there is a word of caution around these indicators because what you are seeing in terms of global pmi numbers is a little bit of a stabilization and some of the countries that are much weaker, that is feeding through in terms of economies being hurt by this trait outlook particularly germany. A few of other factors to consider. For us, we are thinking about the sluggish Growth Outlook. Allocation is a bit higher when everything is looking a bit more expensive and you have a lot of negative bond yields around the world. It is a case of thinking of the more defensive regions and sectors. Moving away from those three cyclical ones such as autos and thinking about how you can position income in this environment and the defensive nature and portfolios in terms of having a quiet quiet quality bias as well. Paul jp morgan Asset ManagementGlobal Market strategist kerry craig, thank you. Still to come, later this week on bloomberg tv and radio, guy johnson speaks with the chicago fed president Charles Evans in madrid. Do not miss that live conversation. This is bloomberg. Shery we have breaking news. We are hearing from the Japan Coast Guard saying north korea appears to have launched a missile. We know the u. S. And north korea are starting Nuclear Negotiations again. This was confirmed by the state department. This will happen within the next week, but now we are seeing north korea appeared to have launched a missile. We have seen north korea stopping Intercontinental Ballistic Missile tests during the Nuclear Negotiations with the u. S. But not necessarily the short range Ballistic Missiles that have been launched in recent months. Paul this is Bloomberg Technology global link. Lets take a look at the top global tech stories of the day. Taylor thanks. Apple closes in striking distance of a record of optimism about the latest iphone. Tim cook told the german newspaper that iphone 11 sales have had a strong start and he could not be happier. Apple is more at 17 from an august low and 2. 5 below an alltime closing high rate about a year ago. Sony is slashing the price of the Playstation Game service as competition and online offerings uses up. The service will cost 9. 99 a month and there is top selling titles like grand theft auto v. The game pass for microsoft starts at nine dollars and . 90 month. 9. 99 a microsoft is using ships in its azure cloud service, confirming a shift away from intos semiconductors. Companies have become major purchasers of service chips and turning to act as accelerators. Those other top global tech stories i am watching. Shery thanks. Silicon valley is looking to disrupt the ipo business. Venture capitalists and Corporate Executives are meeting tuesday in the tech hub to discuss whether the system for Public Offerings is still working. This after a year of many of the biggest deals flopped. One possible are tendered of direct listings. Joining us to discuss is sonali. We know the tech startup usually has a traditional ipo route so what are the benefits of this direct listing . Sonali in a direct listing, it is not that the bankers and a group of small investors set the price, which typically is below what they expect to be treated at. A direct listing really sets the price. It starts trading the next day. The company does not raise any money in a direct listing so they have to be able to survive without the need to raise money. With that said, they like the fact venture capitalists in particular, that the market sets the price. Taylor talk to me about the type of companies that will direct list versus ipo. Bigger Name Companies we know of that can have Better Success . Sonali that is what they say. What happens is the need to raise money but the other thing is wall street serves as a