Gathering over stores. But there may be a silver lining. Betty this is daybreak asia, live from bloombergs u. S. And asian headquarters. I am betty liu in new york where it is just after 7 00 p. M. Yvonne i am yvonne man. Attention in the Korean Peninsula with duck with President Trump doubling down on rhetoric in pyongyang. An ugly day ine asia after ending the trading day rough. Pretty strong declines. We have been remarking how the markets have seemed resilient to these headlines coming out, whether it is on china, north korea, or russia. Here we are at the second day of the big losses. It looks like the market not quite knowing how to price in these ratcheting tensions, setting you up for a pretty dismal opening in asia. There are some guests we have talked to over the last 24 hours, is this all geopolitical risk, or an excuse for investors , investments that have gone too far and are too expensive . It is a risk off across the board. I love this line, hard to price in an extinction event. Something to keep in mind. Betty he does not need to price that in. Yvonne i hope none of us do. New zealand, pretty ugly for the nzx 50. We are down 1 for the index. 7. Wn also is the kiwi at. 726 trouble withng possible intervention. Down day for stocks after the asx 200 ended the day flat on thursday. Oil, wti fell overnight despite saudi arabia and iraq strengthening production curves. In japan, equity futures, we are seeing possibly more than a 350 points drop with the nikkei 225. We see the yen strengthening for four straight days. Currency. The there are new havens out there. A year ago you could not imagine this. Andchinese yuan cryptocurrencies. They are now betting on ethereum as the safety net. Betty what is this world coming to come out when it cryptocurrencies might be safer than the dollar . Lets take a closer look. Speaking of the dollar, what is happening in the u. S. Stocks,p drop in u. S. The biggest oneday drop since may. I want to bring in su keenan. We thought it would be summer doldrums in august. But it is anything but. Su with stocks it records, strategists had already warned we were setting up for a change in direction. We talk about how the now range for the s p got knocked out of the range. We had not seen many weeks with less than 1 change. We definitely got that in the thursday market. Lets go to the big movers. Earnings were a catalyst for big moves in the market. Coming in withs disappointing numbers, showing retail cannot get out of the slump it is in. Macys announced a new recovery effort and it was not met with much and is he is in. Afterso had nvidia down hours. Lets go to the bloomberg g btv 9336. This is a graphic look at the negative same source sales. Macys. Es are kohls, if you look far to the right, you see a large box in terms of negative sales. In spite of rebound efforts, they are still struggling. U, lets talk about that busy after the bell reporting and that unusual situation out of nvidia. Unusual, they crashed on the numbers. Strong, better than expected on revenue and outlook. But disappointment, the datacenter failed. Little changed from the preceding three months. There is a view that with no real growth in datacenter, that is a disappointment. We saw nvidia down in the regular session. When you have the kind of performance your today, up 60 , it is priced to perfection. Without a perfect report, investors are going to sell. You saw a little money taken off the table, which we can anticipate will be reflected in friday trade. Yvonne snap falling as much as 11 on the earnings miss. User growth continued its slow. Su a different story going into the report. Snap has been far below, 19 below its ipo price. There was concern about its growth. It missed growth estimates. Facebook is copying a lot of its unique features, that is taking a toll. Aggressive competition from facebook is really going to blunt its growth. This was a make or break order. One analyst said it has a tremendous potential, but can it capitalize on the opportunity . This was not really demonstrated, capitalizing on this opportunity, in its latest report. As it becomes cheaper, it will become more to acquirers, they are saying. It will be interesting to see the friday wall street trade. Dig into those earnings from snap at the bottom of the hour. Lets get first word news with Haslinda Amin in singapore. Surgeda noble saw a net by one billion u. S. Dollars as trading losses and limited access to funds piled on the pressure. Reaches 3. 8 million by the end of june, with a 1. 75 billion secondquarter loss. Roots,ing to its asian the stock lost more than 90 since 2015. Benchmark is trying to get theis kalanick kicked off board. They were an early uber backer. Bill gurley led the effort to have Travis Kalanick removed as ceo in june. Nick gain deceits by hiding his growth is gross mismanagement at the company. Robert mueller appears to be bearing down on President Trumps former Campaign Chairman in the investigation into alleged collusion with russia. His washington grand journey is said to have issued subpoenas for financial records of Paul Manafort and rick gates. Manafortes alexandria orts alexandria home was raided. Trump is that perhaps his fire and fury message was not enough. His latest remarks follow days of escalating rhetoric from both against a largely u. N. Vote against sanctions. Pyongyang has threatened a preemptive strike on guam. If north korea does anything in terms of even thinking about attack of anyone that we love or represent or our allies or us, they can be very, very nervous. I will tell you why. And they should be very nervous. Because things will happen to them that they never thought possible. Unsettling has made the yuan the unlikely winner. 6. 66se more than 1 to against the dollar. In january, the yuan was at its weakest since 2008. Theyre concerned about capital outflows and rising optimism on the chinese economy. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Yvonne betty thank you. For more on the escalating words between President Trump and north korea, bill daley is joining us from chicago, head of a swiss hedge fund. Careera long and storied in washington, served as chief of staff to barack obama him and was commerce secretary under president bill clinton. Bill, great to see you tonight. Bill thank you for having me. You heard comments that north korea would see things they never thought possible. What do you read into that . Bill obviously the president thinks that will somehow back down the kim jongun. There is no one in the world, who is rational, that does not realize the power of the u. S. Military is unparalleled. It is, without question, the most formidable military. I do not think it will surprise anyone we have capacity beyond anyone else. Hesitate,use one to because it is not normal for a president to draw a line, basically. Ornorth korea attacks guam fires any missile toward guam over japan, that is different. But this president is different than the previous ones. Betty very different, bill. Do you condone this kind of strategy . Bill the bottom line is, what works . Betty do you think it will work . Bill i do not believe it works with kim jongun. It might work with another leader. It surely does not work. This kind of rhetoric we have it seldomrically, ratchets down. You have a mixed signal from secretary tillerson, who was talking about facetoface negotiations with the north koreans, with conditions. Then, the president goes out and raises the level, not lowers the level, of rhetoric. Betty the other player in all of this is china, a very important player. I want to play for you and our viewers a comment President Trump made about how he is using north korea to leverage the trade relations with china. Lets play that. Well loserump hundreds of billions of dollars a year on trade with china. They know how i feel. It is not going to continue like that. But if china helps us, i feel a lot differently toward trade. A lot differently toward trade. Betty do think that is going to work, bill . Bill the chinese do not take too kindly to being threatened. Everyone knows the president ran on a very tough trade change with china. That is a given. Twoputt solving the north korean problem only in the lap, and see if you do not solve this we will take a actions against you in trade, i do not know if that is a strategy that can work. The chinese will not be threatened into doing something. They did vote at the u. N. For sanctions. They have to enforce those sanctions. No one else is in a position to enforce those. But those will take a long time to hurt in north korea. Whether or not the north koreans, who have proven they can take a lot of pain, with a bad economy, will respond because the Economic Issues i think it is more nuanced than what the president is saying. Yvonne approach . We spoke with the former u. S. Special envoy for human rights in north korea. For theit might be time u. S. To abandon the one korea the one china policy. They need to get china on board because of the fear of a unified korea is greater than destabilizing pyongyang. Korea extent is the one idea not viable . Bill it does not look like it is viable right now. It is not as though we have pressed to that one korea policy. Anything overne the last 60, almost 70 years, to reengage north and south. At times, the south has wanted on their own to take steps to lessen the tension. 20 something years ago there was effort made before this new leader to reestablish family relationships between the north and south. That is probably an idea that should be put on the table. The line the president has drawn is, they are having the capacity of Nuclear Weapons to strike our shores, that is a redline that every president has said cannot be crossed. It looks like the north koreans are very, very close, having the capacity. It is a situation that is probably the most serious that withve had in the u. S. Another country since the cuban missile crisis in the early 1960s. Yvonne stay with us, we will have more with bill daley, former u. S. Commerce secretary and chief of staff. We have big interviews to tell you about. Bankhilippine central governor joins us live in Bloomberg Markets with his debuted late decision. That is at 11 00 in sydney. Betty we will look at the latest sing tao earnings that is it a 30 eastern. This is bloomberg. Betty this is daybreak asia, i am betty lou in new york. Yvonne i am yvonne man in hong kong. It is been two weeks since john kelly was named white house chief of staff. He has fired to medications director Anthony Scaramucci and dismissed two aides, who had attempted to tame President Trumps tweets. We have someone with inside knowledge of the workings of the white house. Bill daley joining us. Give us contrast on the Obama Administration that you served, and the Trump Administration you see now. How does it john kelly tame and unpredictable President Trump . Bill i do not think he can tame the president. It is obvious the expectation, that somehow general kelly would control the tweets, has not quite happened. On thee comments, rhetoric regarding north korea. He has brought stability and the control in the white house with of the white house staff. Them as less leaking less pointing fingers at each other, less of the infighting that seemed so prevalent for the first seven months. From that perspective he is extremely good. During thethere crisis with north korea is a tremendous advantage for the president. Obviously, the general knows the subject. He has strong relationships with the people that would have to prosecute some kind of military action and the options in the process the military goes out there. His being very this critical time is invaluable to President Trump. The thought that he or someone else would change the president after 70 years of the style he has had and the success he has it. Added, at why do think the president is surrounding himself with military men in general . Is it because they take orders . Bill that is part of it. Many clinical people, they are very disciplined, follow the process style. It is so contrary to the president s style. It is understandable why your National Security adviser would be a military person. Donald trump has had no experience with these subjects in his entire life. He admitted during the campaign he got his news about the military from generals on television. At least there he is a knowledge in a shortcoming in trying to make up for it. Betty you were and of podcast with jason axelrod, the Senior Advisor to the president obama. You said you did not think trump was going to run in 2020. Why . Bill i think the president will not run because he will probably see that there is a good possibility he will not win. He, in my mind, to use gambling terms, pulled an inside straight and pulled off an election that was quite surprising. Even though he lost by almost 3 million popular votes, he won the electoral college. To win that twice i do not think he will do that. I do not think you will risk the thought of losing and going out on a high. Betty something not helping that situation is trying to repeal obamacare. With saw earlier today President Trump tweeting out, lambasting Mitch Mcconnell for not getting it done. Canredo that tweet you believe that Mitch Mcconnell, who has screamed repeal and replace for seven years could not get it done . Must repeal and replace obamacare. As always, an exclamation market the end of it. Do think it is completely dead . Is, the irony of this President Trump has talked about this, but he never put a plan out to repeal and then replace. Betty it is going to be harder to do that then he realized. Bill he realizes health care is complicated. That is a big mission at this stage. It big it makes it very hard. He has a debt ceiling, a continuing resolution with the budget to keep the government going in september, he may have more and tougher sanctions on north korea, and there may be a tax bill. Hard, especially with these immediate crises going on and challenges for congress. You were commerce secretary, how do you think wilbur ross is doing right now . Bill i think he is doing fine. He is lacking people within the agency to help them. But they put their markdown that the Commerce Department will be negotiating renegotiating nafta. Nafta is 24 years old. Improving it, updating it, is needed. There is a challenge that if it did not get improved the way he wants it, he might do away with it. That is a bold statement that could have an enormous impact on our economy, the north American Economy overall. Betty thank you for joining us, bill daley, former white house chief of staff and former commerce secretary. You can get a roundup of that story in more detail your day going in todays edition of daybreak asia. Subscribers go to dayb on your terminal. It is also available on the mobile anywhere app. Customized settings to get the news you care about. This is bloomberg. Yvonne a quick check of the latest business flash headlines. Slowing recovery from a housing scandal, they insisted there are no more skeletons in the closet. Shares rose for a fourth day. They gave a qualified endorsement of a much delayed earning. That included a net loss for fiscal 2016 of 8. 8 billion, slightly better than estimates. Toshiba may be delisted in tokyo. Betty Softbanks Vision Fund investing 2. 5 billion in India Company flipkart. It will make mashayoshi son flipkarts biggest shareholder. Amazon bossa jeff bezos plans to spend at least 5 billion on his indian market that is seen growing at 30 a year. Yvonne international and shanghai farms among the bidders for a specialty drugmaker. They are looking for a stake of 20 to 30 , 700 million. Arbor is looking for a potential ipo. Management prefers to sell only a minority stake. Parent missings growth estimates again in the face of competition from facebook, instagram. This is bloomberg. Yvonne it is 7 30 a. M. Friday in hong kong. We are waiting for the first major market opens. Equities in the red after this escalation and the trump talks. Jumping 44 . X it was a down day for wall street, overnight. Betty certainly a down day in wall street. The s p down almost 1. 5 . 7 30 p. M. Thursday evening in new york. Markets are in the red. I am betty liu in new york. Yvonne i am yvonne man in hong kong. This is daybreak asia. The new york fed president is more positive about the u. S. Painting a picture that is improving for those in the financial crisis. They say optimism is improving for the economy. He added that he expects that to continue. Next month and bets are rising as policy will announce a timeline for reducing the balance sheet. Our outlook has not changed, we anticipate a moderate growth trend with further strengthening in the labor market, which we think will push inflation over the mediumterm back to 2 . Opec raising forecast for demand this year and the next, with consumption strongerthanexpected, and a weaker outlook for suppliers. Projections that 200,000 barrels a day, even though the recovery in libya has forced its overall output to the highest this year. Opec lowered forecast for rivals, for north america, last quarter. The bank of india pay the government and annual dividend of 4. 8 billion, which may drain public finances. Paid more than twice as much last year, and even more in 2015. Had reported the government a dividend of 9 billion. Philippines governor Nestor Espenilla cap to rates unchanged at his first policy meeting, but slightly raised inflation forecasts. The rate was left at 3 , as predicted by all 17 economists surveyed by bloomberg. They raise the forecast to 3. 2 this year and next. Governor Nestor Espenilla will join us on Bloomberg Markets at 11 a. M. Sydney time. In hong kong, 9 00 a. M. Google has canceled a staff meeting that wouldve addressed the firing of an engineer for questioning diversity in tech. The meeting was cut after questions were leaked, raising concerns employees that question might be harassed online. Jam