Wilbur ross tells bloomberg the china agreement is near periods tries President Trump wants this signing to take place in the u. S. The worlds Top Oil Company presses go on its longawaited share shale. They brought five brush off concern and says the price is right. Shery all change at the golden arches are the ceo is fired after breaking the policy. Markets have opened for trade lets. Lets get you straight to the Market Action. Sophie shares opening higher by 2 10 of 1 . This happened with the drop we saw for the benchmark. Keeping a close eye on westpac after a disappointing set of earnings. Ozzie yields tracking fridays drop in treasuries, rising six basis points amid trade optimism and a stronger jobs report. The aussie dollar is firmer. Offshorein on the yuan, trading below 704, building on fridays gains amid signs of stabilization. Asian stocks broadly looks to rises monday. Japan is offline for the weekend. Semiconductor players will be on watch on a report that the u. S. Government has urged them to stop this applying chips to huawei. Heres where we stand as november trading warms up. The asian regional benchmark has outperformed the s p 500 over the past two months. Past 16 sessions, asian stocks lost ground on three. Friday, chinese stocks had the best day since ms. Since mid august. The nikkei 225, 150 points shy of 23,000. This rally has been supported by the recovery in asian tech hardware plays but Credit Suisse warning the potential for a reversal that cannot be ruled out. Haidi Sophie Kamaruddin there in hong kong, lets get you to first word news. Su keenan is in new york in new york. Su we will start with saudi aramco. The company may be worth 1. 5 trillion or even less. Thats according to Research Investors by the banks involved in the companys longawaited ipo. It is well below the 2 trillion target 2 trillion target. It suggested the struggle to pinpoint a valuation. They will list on the Stock Exchange in riyadh and likely start trading next month. It is very safe. Have full proof to that, you see the oil prices. Oil prices went up the first two days by 20 . Then it came down by 10 . In all the future traders saw this as an event. We have 1 8 of the Oil Production in the world. In the oil traders, they saw this as an unevent, and that means it is really safe. Su okinawa, the governor there is warning the u. S. To look elsewhere as the pentagon hunts for sites to deploy new missiles. The governor says any attempt to place new weapons would be firmly opposed by local residents. He was elected last year on a campaign to move the u. S. Airbase out of the area. He says okinawa carries an unfair burden by hosting half of the 55,000 u. S. Military personnel stationed in japan. At least 200 people were arrested in hong kong as prodemocracy protesters clashed with police once again over the weekend. On saturday, police fired tear gas and deployed Water Cannons on demonstrators who had a built barricades across streets. More unrest broke out sunday when police and protesters clashed at shopping malls and a prodemocracy district counselor was attacked. Hasdelhi now, pollution worsened to levels that the government says should be treated as a Public Health emergency. The air quality index rose to 744 in some parts of the city over the weekend. Thats according to the website monitor air visual. 50 as seen as safe. Any reason reading above 300 is regarded as hazardous. The toxicity is blamed on a range of factors including agricultural burning and auto emissions. Global news, 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im su keenan. This is bloomberg. Haidi thank you. The u. S. And china say they are close to agreeing to the first part of a trade deal. Secretary wilbur ross spoke exclusively to bloomberg, expressing optimism that the phase i deal will be reached this month. Sec. Ross i think we are in good shape. We are making good progress. Theres no natural reason why it couldnt be. But whether it will slip a little bit, who knows, it is always possible. Haidi lets get to our china correspondent Tom Mackenzie in beijing. No natural reason why it would not be done. Let needs to be done before we have a signing . Tom it sounds like they are very close. We had that phone call between the likes of mnuchin and lighthizer on friday. The lead negotiators on the u. S. And chinese side on the back of the phone call, we got a statement from the chinese saying there was an agreement in principle on the call issues. The u. S. Was more circumspect on the back of the phone conversation but they did say progress. Been as you heard from wilbur ross, he sees no natural reason why there cannot be a deal signed later this month. In terms of what work needs to be done between now and any signing, the details around agricultural purchases and intellectual property and exactly how china will be opening up its financial markets, all part of this phase one deal. Ironing out the details is what is in focus for the that as the trade talks continue. President trump came out of the weekend sounding optimistic. He says he wants to see this deal signed in the u. S. As well as some point. As we have been reporting, this is the phase one deal. It includes those components i mentioned. It is the phase ii and phase three where there is skepticism in china and further fears as to whether or not progress can be made. We were reporting last week on the fact that china has and looks at President Trump with great skepticism. They dont trust him to keep to his word. Thats the key concern. They want to see the tariffs removed if they will. Deal. And then we have the ageold issue of whether or not china will really budge on things like industrial policy. In terms of a phase one deal, both sides showing there is progress the question is where they will sign this and when . Shery have we heard anything on what will happen to the huawei front on selling components to the company . Tom wilbur ross talked about this to haslinda and suggested there would be in the near future a decision made by the white house to allow some of these u. S. Companies to export some of these components, noncore components, to huawei. This is something President Trump had pledged to do earlier this year. We have still been waiting for followthrough and huawei has been waiting for followthrough because they need those core components. Particularly, the android software. There is a big question as to whether or not google can work with huawei. That is an area china would like to see some progress on before they get forward and moving forward on a conference of deal. I think they can get to phase one without those commitments on huawei. In terms of getting an allencompassing deal, they will need to see progress in terms of the huawei situation. In terms of the location, we had President Trump saying he would like to see this deal signed in the u. S. He has expressed and communicated his preference for iol which is the state that produces the most corn and hocks in the u. S. You would expect the chinese would be very cautious about to the president xi u. S. Because of their concerns about the lack of trust around trump and whether or not he would pull back or make any lastminute demands. The u. S. Saying may maybe iowa is in play. Maybe hawaii or alaska. Wilbur ross also saying china was an option for signing up signing off on this deal. Tom mackenzie in beijing, we will have more on trade from the commerce secretary, wilbur ross in our interview coming up after the break. Shery saudi aramcos evaluation could fall far below the original target of 2 trillion. Details coming up. This is bloomberg. Shery this is daybreak asia. Im shery ahn in new york. Haidi im haidi stroudwatts in sydney. The 33,000 summit is underway with leaders from the 10 Member States meeting in bangkok. Among the attendees, the chinese premier and u. S. Commerce secretary wilbur ross who says he is optimistic on a trade deal. Our chief International CorrespondentHaslinda Amin is at the event. Trade is front and center. They have been caught in the middle pair they have become Collateral Damage at this prolonged u. S. China trade war. Malaysia is on the verge of being imposed with sanctions on palm oil. We have vietnam being singled out by the u. S. For a trade surplus with the u. S. Singapore has been dragged into it as well. It is among countries named by cf u. S. For its current practices. Estimations have been front and center, caught in the middle of it all. It is not surprising that over the weekend, we heard the leaders, the Prime Minister of singapore, saying they have to come together even more to do better in places like digital economy. They have to explore how to fund these initiatives to bring the economies together. Organization, nation, a region of nations. What has been pretty challenging. We also heard from the Prime Minister of malaysia, he talks about coming together with one voice, responding with one action to all the measures being imposed on the region by the u. S. He believes that perhaps asean nations should put a titfortat initiative responsive to what ever they u. S. Is imposing. I caught up with the u. S. Commerce secretary to find out the safest of negotiations between the two sides. Take a listen. Sec. Ross i think you will see that there was a said yesterday about iowa, about alaska, there was a sub a suggestion about hawaii. Im sure the chinese will have some suggestions in china. That should be the easiest part of the whole thing to negotiate. Haslinda the trade deal will be signed in november . Sec. Ross you say it wonderfully definitively, i wish i could be as definitive. [laughter] sec. Ross i think we are in good shape, we are making good progress, and theres no natural reason why it couldnt be. But whether it will slip a little bit, who knows, its always possible. Haslinda are there still obstacles . Sec. Ross not so much obstacles but making sure that each side has a very correct and clear detailed understanding of what each side has agreed to. Trade deals are very, very, located. And this one is particularly complicated. Haslinda secretary ross, the huawei band, some kind some American Companies are confused of whether they can do business with huawei. Given the progress made through the phase one trade deal, is there a possibility that huawei could be removed from the entity league, whether restrictions can be eased . Sec. Ross sec. Ross first of all, huawei, is an enforcement action. Huawei is not a part of the trade negotiations. Some 260here have been requests filed for licenses. The way the entity list works, is you need a license to sell any controlled product to them. That is a lot of applications. It is frankly more than we would have thought. Too, with entity lists, there is a presumption of denial. The safe thing for these companies would be to assume denial, even though we will obviously approve quite a few of them. Haslinda speaking of licenses, the special licenses for huawei suppliers, based in the u. S. , which are not dealing with Security Link components, when do you expect the Trump Administration issue those licenses . Sec. Ross those will be forthcoming very shortly. Haslinda what is shortly . Could you quantify . Sec. Ross its shortly. [laughter] sec. Ross it is less than longly. [laughter] haslinda asian economies have been pretty disappointed by President Trumps absence for two years running now, and asian economies are on the verge of signing a trade pact backed by china. Is there concern within the u. S. Leadership that perhaps the economies here, maybe even more economically dependent on china . Sec. Ross first of all, asean is not much of an agreement. It is not a trade agreement, not anything remotely like tpp, nor anything remotely like our arrangements with japan and with south korea. I dont think you want to blow that out of proportion. It is a very lowgrade treaty. Second, in terms of our participation here, it is very, very wholesome. Haslinda u. S. Commerce secretary wilbur ross. He is a keynote address earlier late later today. That will be the focus for leaders to see the direction of using engagement. There has been talk about how the u. S. Has pretty much snubbed asean nations by trumps absence at this meeting. Everybody is curious to see what kind of engagement will be taken in the years to come, or in the months to come. Shery since we are in the second year pair thank you for that. Our chief International Correspondent for Southeast Asia, Haslinda Amin. We will have more from the asean summit later. She will speak with a guest. Coming up next, tech is outperforming the broader markets as u. S. Stocks hold as a record highs will show if theres any momentum left in the sector. This is bloomberg. Haidi this is daybreak asia. Im haidi stroudwatts in sydney. Shery im shery ahn in new york. U. S. Stocks are at record with the tech sector helping to lead the way. Our next guest says we are at the top of a tech bubble. Lets cross to San Francisco ifc stone. T, at great to have you with us. Really, itstack correlation with momentum starting to fade a little bit. This gtv chart showing on the bloomberg that there was a high correlation between the fangs and a momentum etf. That is fading as we continue to see bond alike sectors now gain more demand. How cautious are you about this sector in general . Vincent this is precisely one of the things that worries me. For the past three or four years, we saw a strong correlation between tack on longterm yields. That makes sense because if you think of a typical unicorn with a negative cash flows at the beginning, and hopefully highgrowth in the next five to 10 years, it is a very high duration asset. Saw theis dropping, we big unicorns rally. That broke last summer. My interpretation of this money this momentum is the market is starting to question whether there is any letter level of rays that can make the unicorns work. If you have negative cash flows, you end up with a negative present value. Shery if you dont like growth, if you dont like tech, where do you go . Vincent obviously, the antigrowth, antitech trade has been International Equities and value. We have seen a modest comeback of value. Interestingly, value has not outperformed as much as growth or momentum has disappointed. Which is another reason why im cautious in the market in general. We certainly have lost the leadership we had in the past three or four years, but we have not found the thing that will eventually pick up yet. Haidi he said emerging markets are looking more interesting. Where specifically will you be looking at . Vincent well, in general, i guess my core is out of consensus, i feel there will be a revival of inflation. It has to do with the debt. I hope we can get to that in a couple minutes. In general, inflation will have assets at midyear lows. Commodity oriented emerging markets has been especially hardhit. Moreld probably avoid the like china and south korea in favor the more resource heavy emerging markets. At yourm looking notes, you are saying Bay Area Companies would need to hike their prices by 40 if they were to operate under normal business models. Vincent yes, thats the part i wanted to go into. Sixoked at basically the zip codes around San Francisco and Silicon Valley and i built and in that an index with market cap. And i looked at how much they pay in dividends and buybacks. Close to zero. How much they pay on debt, close to zero. How much they collate pay on taxes, close to zero. So they dont have they have free p they dont pay taxes. They dont need to have earnings. Perhaps most importantly, they pay most in stocks. If you think in terms of the cash leaving the company, theres almost none. It leaves them with a lot of ability to undercut on prices. And this is the model we have uber, wherework, you accumulate these losses early to build a consumer base. As the market for this model dries up, you are going to see very strong price increases. The question i was trying to answer is how much of a price increase . Could that affect the cpi . My answer is yes. Companies would behave like normal companies . To price increases of 40 . Haidi it is a chicken and egg situation. Vincent correct. That is where i was trying to go at. For the past decade, we had the stories that inflation, thick it was Bloomberg Businessweek that had this with the dinosaur thing. Inflation is dead. We have these very low rates. This big unicorn bubble and everybody wants to allocate to the pension funds. It is a mad rush into a very tiny asset class and then you have all of these entrepreneurs that are full of money and they have to justify that they are the amazon of this, the netflix of that. The best and easiest way to do that is to subsidize your customer and sell your on cost. We see less and less inflation and a keeps going again and again. What worries me that i think this is breaking because valuation on the Tech Companies are starting to break down. , thankvincent deluard you so much for joining us. Lets get a check of the latest business flash headlines. Westech is raising money and slashing its dividend as profit missed estimates. It aims to raise 2. 5 billion in a share sale as cash profits file 15 in the year. Cut toidend is being . 80 from . 94 last year. They say they are raising money to meet new regulatory standards and give a give itself the flex ability to deal with any potential litigation. Haidi reports say federal officials are looking into Accounting Practices at under armour and whether the company manipulated the numbers to appear healthier. The inquiry is focused on whether under armour shifted sales from quarter to quarter, with the Justice Department and fcc questioning people i