tv Bloomberg Daybreak Australia Bloomberg July 16, 2019 6:00pm-7:00pm EDT
paul: welcome to daybreak australia. i am paul allen. shery: i am shery ahn. sophie: i'm sophie kamaruddin. we are counting down to asia's major market open. ♪ paul: here are the top stories we are covering in the next hour. stocks fall and the offshore yuan weakens as president trump says he can add more china tariffs if he wants to. the chairman watching developments closely. jay powell says he will do what is required to bolster the
economy. contrasting fortunes. jp morgan cuts its full-year forecast. goldman sachs revenue bucks wall street trend. shery: later in bloomberg technology global link, we will be talking about the showdowns in washington facing silicon valley. let's get a quick check of how the markets closed in the u.s. regulatory scrutiny in congress being felt across the market as tech stocks underperformed in today's session with the s&p 500 now holding the five-day rally. we had president trump's comments on tariffs dampening sentiments as well. tech giants took a hit. we had energy producers leading some of those declines as we continue to see the selloff in oil markets. we had u.s. bank earnings. they little bit mixed. goldman sachs managed to jump after beating the unit. we had some strong data out of the u.s. when it came to retail sales. that sent yields higher but at
the same time, chair powell speaking in france about taking appropriate measures to deal with the economy. that led to the yield level being paired back a little bit. u.s. futures not doing much at the moment but let's see how we are setting up for the session in asia. sophie: midweek in asia, futures are pointing lower in sydney, seoul, and tokyo. a two-day decline. datadney, miners with the on tap and iron ore prices at a five-year high. cryptocurrency related stocks, they will be in view and all the earnings line. we hear from a chinese liquor maker which reports after the bell. check out the offshore yuan which is back on the retreat. of note, the premier says beijing will adjust military and fiscal policies as appropriate given the economy is facing more
downward pressure despite the upward data. paul: thanks very much. let's have a check on the first word news now. >> thanks. contrasting fortunes of the big banks. jp morgan cut its full-year net income forecast as revenues from stock trading fell more than expected. there was more from goldman sachs which bucks the trend with an unexpected stock trading revenue jumped. largestrgo posted its lending income since 2016 and said the fed rate cuts would be a welcome boost to the business right now. >> there is something to be said for a softer landing if in fact the fed does go and reduce rates, to the extent that it makes credit better and keeps consumers and businesses in the game, transacting, borrowing, investing, et cetera. holding the u.s. treasuries has slid the most in
two years as the trade war rebels on. -- rumbles on. to 1.1 by $2.8 billion trillion dollars according to treasury data in washington. that is a third straight month of declines with china holdings the smallest since may 2017. beijing remains america's biggest foreign creditor. starling fell to its lowest against the dollar since 2017 as the prospect of a no deal brexit returns to the table with increasingly tough rhetoric from the men vying to be the next prime minister. the pound fell against the euro as boris johnson and jeremy hunt said the so-called backstop to avoid a hard border in ireland would have to be scrapped. the plan is considered essential by brussels. the german defense minister has been confirmed as the new president of the european commission she is the first woman to hold the job and only the second time in eu history a german has been in the role. she told lawmakers the most
pressing issue at the moment is climate change and that she would seek to bolster relations with the united nations. >> we do have issues, but we should never forget that we are allies and friends. we sit on the same side of the table. and, therefore, we are going to negotiate hard about the different topics, but in the very end, we know it is better to be in an intensive, healthy way trading with each other. >> global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts. this is bloomberg. shery: thank you. wall street fell from a record and the offshore yuan weekend after president trump reminded us the trade war is far from over. president trump: we have a long way to go as far as tariffs. we have another $325 million we
could put a tariff on if we want. so, we are talking to china about a deal. but, i wish they didn't break the deal that we had. shery: his latest threat comes a day after treasury secretary steven mnuchin says talks with beijing would likely resume this week. let's go to our washington reporter caitlin webber. does this mean the president is backtracking on the promise to backtrack tariffs that he made at the g20? caitlin: i would not necessarily he means that. president trump has been known to raise this threat to increase tariffs on china periodically. something investors do not like to hear. this roller coaster of relations between u.s. and china. he has brought it up since. last month, when there was discussion that china for its part was not holding up its end of the bargain that they agreed to at the g20, in which they agreed to buy more u.s. farm products.
i would not necessarily take it as a sign that talks have broken down, that they reached another impasse. i think it is more trump being trump, and reminding people he likes tariffs. he will continue to use those as a strategy if these talks don't go anywhere. reportedewhere, china holdings of treasuries dipped the lowest in two years. does this mean anything or does this mean nothing? caitlin: it is hard to know what to glean from that selloff. i think a lot of analysts are mixed. there may be technical reasons for it. china trying to diversify the portfolio and buy more gold. there has been a lot of, you know, doubt as to whether china would sort of weaponize thereby of u.s. treasuries in this trade war. another reason for that is because it would be
counterproductive. it could weaken the value of the u.s. dollar which is something president trump wants. it continues the trend over the last three months. as you said, the lowest point in two years but it is hard to know at this point what exactly to glean. it is certainly a mixed bag. shery: treasury holdings take a hit if china needs to defend the currency. we have seen president trump again today talk about the devaluation of the yuan. caitlin: yes, it is something that has been a preoccupation of president trump since he has been in office, even before. he was in the campaign and said over and over in his criticisms of the fed and other places that the u.s. should act like china or act like the european union and potentially devaluing the u.s. dollar in order to make our exports more attractive and be able to compete with these other currencies on a global scale. paul: washington reporter caitlin webber, thank you for
>> central banks have to keep an eye on the circumstances in their particular jurisdictions and try to keep their economies on the right trajectory to achieve their objectives. we all need to be ready in case there is a significant slowdown to respond much more forcefully. shery: the imf's acting managing director david lipton talking to bloomberg as rate decisions from south korea and indonesia as well. we had fed chair jerome powell
speaking today in france. he is saying the central bank is carefully monitoring global risk to u.s. growth and will act as needed. >> the outlook has increased however, particularly trade of elements and global growth. issues such as the u.s. federal debt ceiling and brexit remain unresolved. fmoc participants have raised concerns about a more prolonged shortfall, inflation below the 2% target. shery: let's bring in bond veteran, the vice chairman and portfolio manager for the firm's flagship bond fund which has an annualized return of almost 9% since its inception in 1991. we are also joined by our global economics and policy editor kathleen hays. welcome both. dan, at least for today, we saw yields higher. u.s. retail sales. can this be more than a blip if we have an idea of where the fed is going this year and where the
state of the economy is? dan: i think it is a blip. there are some technicals in the market every day, all the time but this was small. powell did make a point in his maybe thelking about effect of the trade war was going to be a bit more. keep an eye on that. all the more reason to expect and cut. kathleen: i want to pull up a chart because one of the things the fed has been appetizing, particularly chairman powell -- global indexes and the u.s. 10 year yield. the u.s. 10 year yield is the blue line. you can see it as backup to 2.1%. if you look at j.p. morgan's global pmi, china pmi, they have weakened to levels that suggest contraction. is this the factor, this global factor that is driving the fact and it is going to drive the bond market as well? dan: yes is the simple answer.
it is more serious than i think the press indicates from time to time. this is a big factor, not a little factor. it starts to not overwhelm, but be more important some of the time than what we are used to looking. is that theade war, big concern and do you share that concern? it seems like that is one of the big reasons we have seen the rally. it seems like it is the trade war in the sense it is not over. when donald trump says we can put more tariffs on, it could get worse. dan: the trade war is a big deal and it is part of a broader -- war is a harsh name for it but it is the reaction. it is one element of china leading the u.s. and trying to sort this out. a serious, serious matter. the fed knows that. it potentiallyld
become more serious as well? we had pimco's global economic advisor saying a full-blown currency war cannot be ruled out. are you concerned about the risk of that? dan: yes, and other things with it. the way these things go, it is not just trade per se. trade is an aspect of things. thinks of doing some of the missile tests or some missile landings closer to taiwan? what if somebody puts it is troyer through this -- a destroyer through a zone that china does not want it to the. there are many aspects. the trade war is visible. it is part of a broader working out that hopefully will work out well and will get through it to the other side, which is good. but right now, it is rugged.
shery: what about the aspect of the debt issue here in the u.s.? this chart on the bloomberg showing u.s. total debt. we have the debt limit. we have debt ceiling talks coming up. we could be running out of funding in october. not just that, but the fact you have an ever-growing overhead of u.s. and private, government debt. with that cancel out any of the positives you would get out of the economy like perhaps a fiscal stimulus? dan: it could in the current situation. i don't think it would if we can get through this sorting out with china. we are not home free. and then we can deal with these other things. they are lesser magnitude. we still have to sort things out and get through congress so we can go on servicing the debt. shery: that is coming up. we are already seeing some pressure on the dollar and
shorter data treasuries. should investors start thinking about the months ahead? dan: yes, as always. shery: always be careful. fed --n: dan, if the will the fed cut rates? dan: yes. kathleen: what would happen if they don't? i don't know if that part is important because it seems like they will cut rates and everyone will say how much more and bond investors have to say do i keep wanting bonds or is the rally just about done? dan: you don't know the answer. weeks,s is thatin two they will cut rates by a quarter. i would say the odds are very low but you never know. then they will stop and wait and talk about things waiting to happen. our rates are still high relative to the other major reserve currencies. it is not that we are the lowest, but in practical
matters, we're already below the level that we would normally be worryon-external situation. if we only worried about the stop, we would not be at this level. kathleen: i cannot resist because we have one of the bond kings onset with us. dovish world, another chart. yielding below zero. $12.2 trillion record. you have been doing this for many decades. what does this signal about the world? is that how you are going to make money, pushing yields down until they get negative in the u.s.? dan: i like that forever comment. i don't know. these rates are administered now. who in their right mind would normally want to invest money -- to put money to a bank for safety and pay to do it?
that in today's day and age is ridiculous, right? yet, that happens. that is not somebody saying it is a great investment. it's less bad than others perhaps. and a lot of it is administered. you've got to own government bonds, ok. what are the yield? nothing. as a matter of fact, you pay them but you have to do it part of your reserves. it's crazy. i'd like tot end, get your thoughts on inflation or deflation. is this becoming an invented trend, a new normal in developed economies? what can be done to shift it? dan: that is a great question. i don't have a clear answer. my off-the-cuff answer on that is that mature economies are also economies where population has peaked. and, it's starting to decline.
is mix of the population younger people, not older people more and more. you would expect to find inflation slowing. as far as inflation actually going away, it would be a good thing in a way for many reasons. because the other extreme just means that your savings are gone. i really don't know. some of these things you could argue -- paul, you and i could debate both sides of this from now until next tuesday and we wouldn't have the answer. it is in the evidence that inflation is slowing. that's the evidence. shery: great to have you with us. thank you so much for coming into the new york studio. of course, you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak.
shery: this is bloomberg technology global link. i am shery ahn to new york alongside paul allen in sydney and emily chang in san francisco. let's take a look at the top global tech stories of the day. emily: online shoppers are trying to take full advantage of amazon's two days of mega sales for prime members. internet searches for canceling amazon prime were 18 times higher as the sales begin, suggesting many shoppers are signing up to cash in on discounts and then immediately trying to back out of a long-term commitment. shoppers are projected to spend almost $6 billion over the course of the sale.
apple is planning to fund original podcasts that would be exclusive to its own audio service, bringing investment in the sector to fend off competition. executives contacted media companies to discuss buying extrusive rights to content. apple has not outlined a strategy but it still accounts for 70% of listening. facebook's cryptocurrency plan came under more fire from senators on both sides at a banking committee hearing on tuesday. lawmakers blasting facebook for ripley lee violating consumer privacy and how it could affect -- expect the public to trust facebook with its finances. david marcus pledged to address concerns and said the company would "take time to get this right." those are the top global tech stories we are watching. paul: thanks very much. as you mentioned, facebook's digital token was not the only
big techtarget in the firing line on capitol hill. executives from apple, google and amazon appeared before the house antitrust panel as silicon valley heads towards the biggest showdown with congress in 20 years. tech'sdy covers big influence in washington. who got hit hardest today? ben: no question about it, it was amazon the lawmakers were really going after. that was not a total surprise. this hearing recently hired a staffer that is known for her scholarship on the relationship between amazon itself and its third party sellers who sell through the platform. she basically says it is anticompetitive the way that amazon competes against those folks. a lot of questions about that. what are the fees those martins -- merchants face? are they pushed to give data so that amazon can take things that are popular from the third parties and put it on its own private label? there were some testy extent just. at one point, the chairman
reminded the amazon witness -- "i'm reminding you you are under oath." that is a lawmakers way of saying don't lie to me. it got a little bit nasty. emily: how do the companies respond? for my heard, it was repeating for familiar arguments. ben: they basically say we face robust competition. for amazon, that is against walmart, ebay, alibaba. all these different places third party sellers can go or we can go to shop. they talk about how they face robust competition. they talked about all the messaging apps, social media platforms for facebook. they say we are actually really good for small businesses. facebook and google talk about letting small businesses reach new customers more cheaply because they could help them do digital advertising more easily. that was the kind of thing they were talking about, pushing back against that idea that they clamped down on entrepreneurship
and created this kill zone where small company's go to die if they are not going to be acquired. paul: ok, what is next for these antitrust hearings since we are not done, are we? ben: no, this is part of a series. the chairman told reporters after the hearing that they are in the fact gathering part of this. so, when you hear that, you immediately ask does that mean subpoenas? we don't know yet but you have to believe that is on the table because they are essentially saying the answers these witnesses gave were sort of insufficient. we had trouble believing them. whatever we are going to get from that information we are going to get it. the questions become do they do laws, and i think they might. shery: thank you so much for that. that was bloomberg technology global link. do not miss bloomberg technology at 7 a.m. in sydney, 5:00 a.m. in hong kong and 5 p.m. new york. figures.outlook
we like drip coffee, layovers- -and waiting on hold. what we don't like is relying on fancy technology for help. snail mail! we were invited to a y2k party... uh, didn't that happen, like, 20 years ago? oh, look, karolyn, we've got a mathematician on our hands! check it out! now you can schedule a callback or reschedule an appointment, even on nights and weekends. today's xfinity service. simple. easy. awesome. i'd rather not.
paul: get you across some breaking news right now. fourth quarter production numbers from bhp, the world's biggest miner. pretty much in line with estimates, fourth quarter iron ore output. 62.6 million tons, the estimate was for 62 million tons. very slight. total iron ore output for the full year between 273 and 286 million tons. iron ore output pretty much flat on the year. a note on thermal coal. bhp looking to exit thermal coal in australia. coming in at 7.3 million tons. copper, also a slight beat.
444,300 tons. those numbers from bhp coming out just now. we will have more reaction on them right now. and the ironlook ore prices at a five-year high, a good time to be talking to david lennix. thank you for joining us today. right off the bat, i know you have not had much time to digest but what do you think of those bhp numbers? david: you would have to suggest it was a reasonable result. if you have a look at the broader picture, i think bhp and rio's results yesterday really looking at them starting to find some avenues for growth. that is starting to show up in their operation numbers now. paul: the iron ore numbers were interesting. they are kind of flat, the production. do you see this underpinning the skyhigh iron ore price at the moment? david: no doubt about it. put the vale happened, that
the platform under higher prices. as we are seeing both rio and bhp, and vale, the big three miners having difficulty maintaining momentum in the iron ore division, that kept the iron ore prices at elevated levels. at about $100. shery: would you say that peak prices have passed for now? david: we certainly do think when you have a look at all the news that has come out with regard to iron ore, over the past six months, yes, we believe the iron ore price has hit its peak. from here, we can expect to see production coming on stream from smaller iron ore producers and perhaps also the bigger ones in rio. looking for growth avenues. perhaps revisiting what they can do in their iron ore division, because you have to pass back four to five years now and really ramping up production
through their iron ore operation. that has really paid them handsomely in terms of dividends and they will probably look to do that again if the prices stay where they are. shery: how are you gauging chinese demand because we continue to see mixed messages? outre seeing china turn steel but the economy slowing. david: it still has a lot to do with the fact that china continues to look at infrastructure and one of the big inputs into infrastructure is steel. that really has over the course of this year, if you look at the industry, it is still growing. not rapidly but grow enough to satisfy the demand or the supply of iron ore that particular country. from that point of view, we would have expected iron ore to be higher this year if the vale event didn't happen. that has been underpinned by what is happening in china still. it is getting to a point now where we can talk in absolute
terms. i think china steel production is going to break through one billion tons. paul: i want to get you across more detail, getting the petroleum output numbers from bhp, fourth quarter petroleum. 30 million barrels. that is up 3% on quarter. we have seen the oil price going down a little, now below $60. his weak demand still in the driver seat here? david: we think demand is pretty much balanced at the moment. the traders did go through some concern that global growth was going to impact oil demand. it was looking as though demand was being forecasted at 98 million barrels of oil a day. we are starting to see some confidence in 99 to 100 million barrels. that initial doubt is starting to come out of this, out of the prices. it is still there because with all the geopolitical events we
have seen in oil, it is not at $90 a barrel. it is still in the mid 60's for brent. that doubt is keeping it from rallying. paul: we had a story just today on iran. might be ready for some talks with the u.s. that will probably bring more downside pressure? david: the world is getting used to talk. talking on brexit, talking on talking -- atde, some point, there needs to be real action or what will happen is the traders will target -- we need to walk the walk. if that talk keeps going, the traders will start doubting a conclusion positive for any of the and we will see the markets react. not only the oil market, but the brought equity class. shery: how big of a risk is a stronger u.s. dollar for commodities at a time where you have not only the fed cutting rates, but also other parts of the world easing because their
economies are slowing down? david: yeah. this is the real problem we have. we believe the u.s. dollar is going to weaken. because there is a negative correlation between the u.s. dollar and commodity prices which are in u.s. dollars, every time we have seen that u.s. dollar rise, the index is stuck between about 96 and 97. every time that rises, we have seen a fall in commodity prices. it does not matter what supply and demand is doing, just reacting to that dollar price. if the dollar goes higher, that is going to bput an unfortunate headwind against the commodity prices. it will keep rallies and check. you have to look at copper. in the 260's region. just not going anywhere. paul: to bring it back to the big aussie miners, we have recommendations on bhp and tin to. david: we have said yes. we have only exited part of the
portfolio so we we still have exposure. it has to come down with the direction of the u.s. dollar. if that is right, we are still exposed. we reckoned in the near-term, we have probably seen a peak and happy to have $100 in rio. a couple of years ago, they were half that. paul: true. david lennox, thank you for joining us. let's check in on the first word news. ritika: the offshore yuan weakened after president trump again said he might propose additional tariffs on china. speaking at the white house, he said it is having a positive impact on the u.s. economy and more measures could follow. the two sides have been edging back towards trade talks with the u.s. team saying it may travel to beijing if negotiations over the phone go well this week. president trump: we have a
long way to go as far as tariffs. we have another $325 million we could put a tariff on if we want. we are talking to china about a deal, but i wish they didn't break the deal that we had. ritika: the chinese premier has openly admitted the economy is facing increasing downward pressure and says the government will do whatever is required. he pointed to a range of challenges as global growth weakens and trade in investments slowed. the rise of protectionism around the world. li set the government would continue the use of fiscal policy. fed chairman jerome powell says the central bank is always monitoring any threats the growth, adding he will act "as appropriate to sustain expansion." speaking in paris, he said uncertainty is rising, particularly in trade and global growth .his comments echo his testimony
earlier this month in washington and support the case for lowering interest rates. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than one hunter 20 countries. this is bloomberg. shery: thank you. coming up, contrasting fortunes of the big banks. we will look at how the fed's potential rate reversal is weighing on revenue. this is bloomberg. ♪
paul: i am paul allen in sydney. shery: i am shery ahn in new york. a quick check of how the markets are shaping up in the early trading session in asia. sophie: taking a look at what is going on. a snapshot of some assets in focus. checking in on the dollar index still holding onto the gain after rose by the most in 11 days. futures are hinting at further gains as considering fed chair
powell's affirmation for a rate cut despite the upbeat sales data as well. holding overnight losses above this morning. it has been in this range for most of the past month between 6.85 and 6.90 as volatility for the currency have dissipated. the pboc keeping a tight ring on the daily. it may signal traders may becoming too complacent. values continuing to fall after falling below $10,000 after surging above it for the first time in a year as congress scrutinizes crypto related stocks today. paul: thanks very much. let's get more on what we should be watching as trading get underway in asia. adam haigh joins us now. growth is a value debate in the
stock market heating up again. why does one strategist at tb morgan think value stocks are now a once a decade trade? adam: this is a theory being raised at j.p. morgan. a strategist fairly known for his big macro calls. he is saying right now not getting into value, but stocks will look at it. he is looking at the disparity that is shown clearly in this chart. that is between value stocks on the white line and so-called low volatility stocks on the blue the realh is really strong trade of this year and recent years. people betting that volatility in the equity market will stay low. he says that is looking like one of the biggest troubles he has seen in modern equity market history. what he is saying is when that money moves out, hedge funds and shorter-term money comes out of that light volatility trade, you will see a pickup and rotation out of that and looking at some
of the value plays. value has been underperforming sector across the world for many years, relative to growth but also relative to other factors. rallies starting to get back in it as a way that people could get into make a little bit of money in the next leg of the ballpark -- bull market if things continue. shery: we are seeing firm styling back, risk exposure, blackrock and morgan stanley suggesting to take less equity risk. one firm that is a little bit contrarian, janice henderson thinks the bit risk is bailing out of stocks. what are they talking about? held yeah, this is a view by the global head of asset allocation at janice henderson. what he is saying really to people is don't try and fight the fed at this point. the central banks are giving you this gift. whether or not that is warranted
and he certainly places doubt on whether the fed should be cutting rates at this point given what is happening in the economy. he says they are and will continue to ease policy over the next 12 months. what you are going to see is essentially an extension of what is happening in this chart here. that is the rally in risk assets on this chart and credit and equities. he's saying do not bailout at the moment.if you are becoming cautious, it is a big risk to pull money out of stocks at this point but you've got central bank policy that is loose enough to further support upside for equity especially given the fed is going to be cutting over the foreseeable future. it is an interesting counterpoint to a lot of firms on the street and asset managers who have been dialing back there risk exposure in recent months. time will tell because with that end of july rate cut pretty much priced into the market, after
that, it is a little uncertain. there is certainly for him further upside in equities. shery: thank you so much for that. you can find adam's charts on the gt library on the bluebird. we have breaking news. the u.s. were presented of has announced the vote to in order to condemn president trump's comments recently. the president has been accused of being racist and divisive, telling four female democratic lawmakers to return to the broken and crime infested places from which they came from, despite the fact that the four lawmakers are all u.s. citizens. you are taking a look at the vote happening in the u.s. house of representatives. it is not finished yet, but the yeas have the vote right now with a total of 223 against 183 names, which is enough votes to condemn the president's comments. we have heard the top half
republican dismissing this vote as being all politics. president trump doubling down on his attack on the four freshman democrats. right now, we are seeing the u.s. house has the votes to condemn the president's comments. biging to other big news, banks are beginning to feel the pain of lower rates. jp morgan cut its full-year net income forecast as revenue from stock trading and investment banking both fell more than expected. while wells fargo posted its mulling lending since 2016. the wallachs bucked street trend with an unexpected revenue jump in its stock trading unit. let's bring in our finance reporter. should we start with the bright spot in goldman sachs? >> let's start with the right spot. david solomon made a big deal about praising the equities division. he said across the board,
equities did really well. it is interesting because goldman is seeing as this trading powerhouse on wall street and they delivered on that side of the house. other areas the business did not do well but equities was carrying the banner today. paul: goldman, the standout on wall street. but the main street banks did not do so well. can they toss the blame for this to the radel -- the federal reserve? lananh: i think a lot of the blame does go to the federal reserve here. it has been such a big day with three big banks reporting and two of them have large main street franchises. that means when they look at the prospect of lower rates and the federal reserve changing its policy, that means they are likely to earn less from higher interest rates. we saw that impact with jp morgan today obviously. jamie dimon says net interest income is like blowing in the wind, but unfortunately, the wind is blowing against jp morgan in this instance.
shery mentioned wells fargo is posting its mulling lending income since 2016. this is now becoming to show up in bank revenue and showing up in the bank outlooks not well. shery: bank of america wednesday, morgan stanley thursday. lananh: we want to see what the macro outlook will look like. now as the other main street banks have started to see some impacts from the prospect of lower rates, perhaps bank of america will feel that pinch as well. morgan stanley, big trading company as well. shery: thank you so much with the latest on the bank earnings season. we will have plenty more ahead on daybreak australia. this is bloomberg. ♪
higher on monday as the sales begin, suggesting many shoppers are signing up to cash in on the discounts and then immediately trying to back out for a long-term membership commitment. let's look closer with spencer soper. what does this mean for amazon then? spencer: it is tricky news for amazon. they have enjoyed rapid prime member growth. once they lock in a prime member, they can count on that for more sales through the year. the typical prime member in the u.s. spent a little more than twice as much what i nonprime member does on amazon. prime, even though it is a big tale of deals, the revenue they make is not as important as a new prime member sign-ups because that is where the revenue keeps coming year round. the indication that people who were not prime members are simply joining for a brief period to get the deal and backing out is bad news for
amazon's prime member recruitment strategies. paul: what are people buying anyway? some of the purchases do not sound terribly glamorous. spencer: it is not much different from previous years. big emphasis on amazon's on gadgets like the echo speaker, fire streaming stick device, e-readers. it is typical from previous years. some kind of lingering favorites like the instant pot that is selling well and some laptops and electronics which are typical. shery: they are having amazon rivals that have also done their own sales to counter the prime day promotion. how are they doing? spencer: you are seeing -- we're getting sources from various folks monitoring this. you are seeing lift across the board. ebay, best buy, walmart seeing a traffic spike. it indicates people are diving into amazon, but also bouncing around to other sites to see
what deals they are offering. basically, just bargain hunters shopping around. it will benefit all of them in terms of revenue for this. period. paul: bloomberg tech reporter spencer soper, thank you for joining us. a quick check of the latest business flash headlines. deutsche bank's radical revamp includes an exit from servicing a hedge fund price. the plan to see $170 billion of funds transferred to b.n.p. paribas. pulling $1 billion a day from funds, raising the pressure for a swift deal. if the deal goes ahead, it could transform bnp into one of europe's prime brokers. shery: united airlines is raising its full-year profit forecast as strong domestic travel demand helped absorb cost pressures from the grounding of the boeing 737 max. the carrier says earnings will climb to at least $10.50 a
share, up from $10 in the previous tradition. united is improving its outlook less than a week after delta boosted its own forecast, citing robust demand. puffer jacket maker montclair ditched seasonal collections and now launches a new collection every month. transferors the company from a ski where brent to one of the worlds top fashion makers. he talks about how he redesigned the company. ♪ >> in 2003, rafini bought moncler, a 50-year-old french sports where company on the brink of insolvency. sales were less than 50 million euros at the time. $1.4year, turnover was billion.
people tell me you are considered to be a master in grand rejuvenation. what did you do when you first went into moncler in 2003 and looked at the range and thought this is how we are going to take this brent forward -- brand forward? what were the nuts and bolts of that? >> honestly, i went there. i started working on small things. i started working first on the product, the quality, to design ideas because of the end of the day, you need a big brand and a contemporary product. ♪ >> this is the global puffer jacket. his big idea to take a piece of outerwear that was normally only used on the slopes when you are skiing or alpine expeditions and turn it into a luxury item that people would like to wear in town. you develop this idea of the
global down jacket. >> yes, for me, it was important not to just remain in these kind of stores not just used for hiking or climbing, but also i think the big potential to use it for walking in the street. workingwhat i started on performance in all these kinds of things. shery: you can hear more from the ceo remo ruffini in turnaround airing tonight, wednesday in sydney and 6:00 p.m. in hong kong. plenty more ahead. we will discuss market action with region atlantic partner and director of research andy caperin. it from daybreak australia. we will have all of the action and a check of the markets in a moment, next. stay with us. this is bloomberg. ♪
paul: good morning. i am paul allen in sydney. we are under one hour away from the australian market open. shery: i am shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to "daybreak asia." paul: our top stories this wednesday, stocks fall and the offshore yuan weekends -- weake ns. president trump saying he cannot more tariffs if he wants to. jerome powell says he