♪ >> good evening bread we are counting down to asia's major market open. i'm shery ahn in new york. -- welcome to daybreak australia. tensions are focused on tech .ompanies the pandemic reaches another grim milestone with cases in the u.s. climbing above 3 million

red that is a quarter of global infections. california is reporting its biggest daily jump yet. tech wins praise from washington. for their stance on user data in hong kong. futures kicking off trading slightly higher by two tents of 1%. we have another tech rally. the rest of the market was more subdued. the nasdaq ended at a record high. the s&p 500 saw many stocks down but we have gained enough to push it to a one-month high. mega-caps pulling the gauge higher, despite the fact that the pandemic sensitive sectors like airlines sank. the dollar fell against the g10 peers. look at oil. it is unchanged. through the entire month, we have seen wti trading within a

tight range of two dollars. it is still hanging around the four-month high. we got a report showing that stockpiles rose by more than 5 million barrels last week. let's see how things are shaping up for the asian market. midweek session , futures are mostly higher pointing to slight gains. falling.shares are like, we have aussie home loans on tap. in japan, earnings are kicking off with retailers. today, a retailer report card is

due this afternoon. the focus will remain on chinese stocks with gains for a seventh straight day. in tradeil buyers jump morgan stanley seeing more gains ahead. target to levels near the 2015 take. the dollar is holding steady. the offshore you want is holding. want is holding. the html continues to demonstrate its willingness, it has reserves to do so. there is little anxiety propping up in the options market.

check out gold. prices topping $1800 per ounce. momentum traders could make a push for billion. >> the nasdaq continued its hot streak on wednesday ending the day at a record high. do the fundamentals support these levels? earnings are the same place they were in 2017, yet the index 60% higher. we have seen another rally today on the nasdaq at a record high. other sectors are more subdued. tech giants are pulling the indices higher. go?far can they they can continue to go higher, because there is so much stimulus in the market for the federal reserve banks worried as long as the reserve banks have the intention of

continuing to try to provide stimulus through the global economy into the market, the markets will continue to drive higher even as they dislocate from the fundamentals. what is volatility telling us? despite the high levels, we are theng the vix hanging near moving average. >> i expect market volatility to remain elevated through the rest of the year. what we are seeing in the equity markets which is keeping the volatility for the next high is this shift between risk on and risk off trades. you would normally see it between equities and fixed income, but we are seeing a nuanced approach where there are days that stocks that are perceived to be at risk off, that is technology believe it or not. the types of stocks and

companies that are viewed as insulated from the him -- impact of the pandemic. it is those types of stocks then we have seen risk on days where airlines really devalue and energy stocks do well. the volatility is being driven by this move on risk on and risk off depending on investor sentiment. >> tech seems to be shielded from the virus. are they shielded when it comes to trade and the broader issues of china and hong kong? we had mike pompeo praising the tech giants. mean they just now become caught in the clockwise -- caught in the crosshairs between washington and aging? >> i think -- investors don't appreciate the impact on the technology companies are it

china is an important part of the supply chain rated if tensions continue to rise, there is going to have significant impact on these companies ability to continue to manufacture their products. this is something the market is not paying enough attention to. it really is something that could very much impact overall global economics -- global supply if it continues to escalate. >> are we still talking about there is no alternative when it comes to the prevailing sentiment of what drives the upside risk in this market? me, the markets are really being worked by the reserve banks. to haveally hard for me a good insight into what drives the market on any given day. because it is trading so out of line with fundamentals, the risk on the upside is hard to assess.

for me, what i'm trying to do in our portfolios is focused on finding ways we can dampen the overall market volatility in the portfolio because it is so hard the upside of the market risk. sentiment pushing the u.s. dollar higher, that also means emerging-market equities, international equities get pressured. would you be willing to go outside of the united states in this environment? yes.r our portfolios, it is hard to do it in a smart way. when of the products we try to use to mitigate risk is a hedged product. one. iq has hf x i.

that provides us a way to try to mitigate the risk of dollar strength. i know that the trump administration has been trying to make the dollar weaker and having rates around zero, what is an attempt to try to create inflation, to weaken the dollar. i can't foresee a situation where we are not going to continue to have dollar strength. when you look at how the currency situation fits in the rest of the world. while i am not necessarily totally bullish on non-us stocks, i think there are ways to maintain that exposure through hedged products. the risk oftigate the dollar strength and still get the benefit of the diversification related to international and emerging-market equities.

>> given the low rate environment that we are in and prospects that will be out, should we be looking more at real estate? >> ivy league real estate has a lot of opportunity right now. investment in real estate is compelling case of the zero rate environment. u.s., in recent weeks we have seen a huge acceleration and mortgage application which is indicative of the fact that buying real estate whether residential or commercial does look attractive here. i have been looking at, there are a couple of etf is a real estate space and i have a preference for the more actively managed ones, because the different types of real estate and different sectors in the real estate market are going to have different types of impact as a result of the epidemic. global quality and anotheretf

actively managed real estate etf are attractive here to get the exposure because the return on investment on anything in the real estate space at a zero interest rate environment is very attractive. especially from an income producing perspective. a lot of people that are near retirement, our clients looking for more income as they get older are looking for alternative ways to get that because you aren't getting it in the fixed income markets at all. >> i appreciate your time with us. still ahead, hong kong becomes upon in a geopolitical chess game. as u.s. coronavirus cases top 3 and the trump rallies

holidays are being blamed for the spread. this is bloomberg. ♪

♪ the coronavirus has marked another grim milestone in the u.s. confirmed cases have risen 2% in the last day and top 3 million cases in total. thanornia reporting more 11,600 new cases. the biggest daily job so far. for more, we have our health care reporter. record again today. there were concerns about the fourth of july holiday weekend as well as the tells the rally -- the tulsa, oklahoma rally.

is that coming to fruition? >> we know that cases of coronavirus were spread at the rally in tulsa. there are probably you are people getting tested right around the holiday. there was -- we have been seeing record numbers of people day after day. the surge we are seeing today may have been a little bit inflated, but the numbers with otherwise come a day or two ago which were also record highs. number.s no inflated we will see more cases coming in the next one-to weeks because that's the incubation. . there were cases as people spread around for the holiday, we will see those for a few days. >> president trump continues to insist that we reopen the schools. what do we know on this front? >> the president definitely wants schools to be reopened.

he wants to be teaching students in person. schools,id that universities that don't have in person teaching, the people should not come into the country to attend those schools. hurt a lot of universities because the united states educates the world. it will be devastating for those universities and the students. the same thing for elementary and high school students. the students, parents, and economy needs it. but if we have more cases because of that, it will make things worse. they want to control that based on how things are in a location and a mandate from the top is going to make it difficult. >> more on the pandemic just ahead.

we will look about the lockdown thatlbourne and how threatens to deepen the worst recession and 30 years. on can get more bloomberg.com, the mobile app. this is bloomberg. ♪

♪ drugmakers are racing to develop a vaccine for covid-19. expects tos firm start human testing by the end of this year. he says he will not rush development at the expense of safety. he spoke david rubenstein. approach tour coming up with vaccines is we try to make sure we are focused only on the science. funding considerations to us our secondary.

we're working on two different vaccines. of those vaccines have certain things in common. confereve they both can protection with a single dose which we think is extremely important. promise ofse give a being able to be deployed broadly. in the history of the world, there has never been one vaccines that has had to be given to every person on the earth. we wanted tog is use proven platforms. that is to say, if you think about a vaccine let's give an analogy trade the front end of the vaccine is the antigen or the protein that stimulates the immune system and gets the particular virus. that gets plugged into what we call a platform which is like the hardware. the two platforms we have chosen have already been approved by the fda in different contexts.

one is the measles virus platform. measles virus back seen has been given to millions people -- millions of people across the world safely. the other virus platform we used in ebola most recently. for us, it was important to be able to work with proven platforms that we know are safe and effective and have been used in many people. >> messenger rna which is being used by moderna, are you comfortable that that can work? >> that is not a technology we are pursuing. one of the great things about the covid-19 vaccine situation differentave been 160 programs pending with different technologies. messenger rna, some people think that will offer the promise of speed. for us, we wanted to make sure we have a proven platform and to have confidence that the vaccine

can be done with one dose. -- we have experience with a weakened virus vaccine. that is what we have done before. that is what we know. therefore, that's where we went. >> some companies have been given billions of dollars to the federal government. is that an unfortunate -- unfair advantage? >> i will say i don't care. i have to manage profit in lost data. but we want to be able to pursue this in a rigorous, orderly way. if we are able to come forward with a vaccine and we are confident that we will, we think the funding will be there. i don't think it is a disadvantage. >> when you say you are confident if it will come through, when? when will there be a vaccine? i will speak to other people's vaccine programs.

what i would say is that we expect to go into human testing with both of our vaccines at the end of the year. the fastest vaccine ever developed was our vaccines that took four years. situation isf the going to cause us to move quickly. never at the expense of safety. >> human trials do you mean phase one? phase two? >> that is part of the way people are thinking about speeding up the vaccine development. for us, we are thinking about going into human trials. you can call them phase one/phase two trials if they are designed in the right way. the fda came out with thoughtful guidance and what they have said is that they wouldn't even approve a vaccine for emergency use unless it was six months observation of data. that tells you that the fastest it could be is a year from now. >> some companies that are

getting money from the federal government under the operation warp speed program are manufacturing the vaccine already on the hope that they get approved. are you manufacturing the vaccine you are developing? >> know, we are scaling up to be able to make hundreds of millions of doses of both vaccines. that's what i'm saying about trying to compress the time without sacrificing safety. we're going to be prepared if the data bears out that one or both of these vaccines are useful from a safety, efficacy, risk-benefit standpoint, we're going to be ready to come forward with hundreds of millions of doses in very short order. was a clip from leadership live. melbourne,n australia are expressing concern over the heavy economic blow

they face. melbourneing about which has about 20% of the national population. how restrictive for the new rules? >> good morning. it is pretty grim to be honest. this morning, we went into stage three lockdown. stay-at-home orders were issued for everyone in greater melbourne. that means we cannot leave our home unless it is for work for study and essential shopping and exercise. forre not going anywhere the next 6-8 weeks which is causing huge issues on a lovely small businesses, cafes, restaurants. double-digitome rises in case counts. we assume that go into triple

digits. yesterday, we had 134 cases. there is quite a lot that we don't know where the origins are. we have the community transmission going through here. while the number's sound low compared to areas in the u.s. and europe, we had all but stamped out the virus and a few lapses have happened in containment. it has spread quite rapidly. the big thing is the string this is going to cause on the health system. that is why we have acted in this way. is so reliant on tourism, how dire is the economic outlook with the lockdown? catastrophic,ng

according to someone i spoke to yesterday. a lot of businesses relook and forward to trying to make it through until the june reopening and we are slowly getting there. me,pub down the road from they opened their doors for the first time in months with only limited capacity of 25%. that was the same across melbourne. that pub has shuttered stores. so have quite a lot of them. what we are looking at is $1 billion per week lost from the economy. it is looking pretty grim parade. it will essentially remove the heart and soul of melbourne. >> great to have you. melbourne has gone into a lockdown. coming up, australia's potential

role as a safe haven for hong kong residents. this is bloomberg. ♪

♪ >> you're watching "bloomberg daybreak: australia." president trump's top economic adviser says the phase one trade deal is in bed. larry kudlow says u.s. companies should think twice about investing in the mainland. he says the administration is weighing its options but it remains closely engaged in the trade deal. famousamerica's most colleges are seeking a court order to blot president trump's sayr to stop basis. they

it's to pressure universities to reopen classrooms despite rising virus levels. the colleges want a temporary restraining order. a landfill in hong kong is boosting the property market among wider issues. soldt of industrial land for more than 720 million u.s. dollars. as much as was estimated. the buyer is a unit of china mobile. global news 24 hours a day on air and on quicktake by bloomberg. powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. state u.s. secretary of mike pompeo has praised google, facebook, and twitter for information.ell

he has encouraged others to do the same. are we essentially looking down the pipeline of hong kong quickly becoming part of the one system? particularly when it comes to internet freedoms and the independent we had previously associated with one party to systems? i think we are going to move straight to a fault great firewall over the internet. there is going to be a grouping pressure on free speech and what forms being allowed to host different views. the new national security -- it is so wide ranging power that gives the police and the government the power to police speech and thought. it is very concerning. that's one part of it.

the other part is the way it's being implemented unilaterally by beijing really changes the government system in hong kong so we can see the hong kong he --ment, it has no time it has no autonomy. trust -- the key to hong kong's success has been this protection from the political and legal system in the mainland and what the national security law has done is brought that system into the heart of hong kong. reports thaten schools in hong kong have been told to review their teaching materials and there are materials that may be seen to contradict the new national security law. a week ago or two weeks ago, we were talking about this being implemented, there was a view that it was going to be this pervasive. >> there was a lot of wishful thinking.

particularly from the business community. i think we have seen the signs of this coming down the tubes for quite a few years. we have seen growing pressure on hong kong's freedoms. beinge seen hong kong as kidnapped by agents acting for beijing. we have seen them blocked from running for office. the signs have been there and this codifies the pressure and makes it clear to people. seem like it is a shock to many people, but the signs have been there. it is a signal that beijing's determination to bring hong kong -- no matter what china's relationship is with the outside world and no matter the consequences for the hong kong economy. >> what do you expect big businesses like tech giants to do? will they leave or will they operate sort of like they do

inside mainland china? we have seen microsoft censoring content and it operating a chinese version. could they stay in hong kong and operate within the framework or will they leave? >> the first thing to understand is the tech companies, hong kong is not a particularly large marketplace. it is very different from mainland china. base an important regional for some companies. the question is if they intend to stay in hong kong, will they keep regional offices? eventually, they will have to follow the law. or risk being blocked and having their services cut off. the second thing to understand is a facebook, google, they are already censoring and other countries. facebook and google will remove content in vietnam that is antistate at the request of the

government. similar in thailand. while some of the companies did pull out of china previously, even facebook and google and other space are agreeing to this kind of thing. the extra risk is that the u.s. government and other western governments are so activated the question of china and what is going on there that there is a risk you get caught between the chinese government and the u.s. government on the other side. commentseferencing the earlier. that underlines the position that these companies is in now as they do business in a fast-changing hong kong. >> the international community trying to help the hong kong people, we have seen the u.k. and taiwan offering a path to citizenship. there has been an idea that we could see a mass exodus from

hong kong and that could take wealth, skills, technology to the west. what are you -- what are your thoughts? >> it is much better to look at this as a humanitarian issue rather than trying to win talent or capital from this exodus. for a start, many of the richest people in hong kong already have secondary citizenship or permanent residency in another country. many of the wealthy families acquired that before the first handover in 1997. the second thing to understand is that while hong kong is a concern and a few activist have lived already, many people are not keen to leave. this is their home and this is where the family is. hong kong is a unique city. people don't want to give that up. i don't think there will be a mass exodus especially given the time we are in of covid-19 and the travel restrictions.

a lot of economies are in difficulty. even if you can get a visa, you still have to get a job or at set up a business. that's not easy to do given the global recession. i think for those countries ,ooking to help like australia they are looking at it as h monetary and question and providing assistance to those in need it. many of the activists are young people read they are not wealthy businesspeople with a lot of capital or experience. i think they should be helped because it's the right thing to do, not because it's the way to profit from a tragic situation. >> without that invitation, they can always go through the process of seeking asylum on a political persecution basis. australia, is it worth it for the government to do this given that beijing has said

there will be huge negative economic impact on australia if they were to offer this kind of asylum? there won't be an immediate flood of people, but over time, that could change. depending on how quickly the pressure on hong kong is ratcheted up by beijing. it depends on what they are going to offer. the prime minister has not been clear and the suggestion is it might not be a special program. it might be helping those in hong kong get access to existing programs of immigration. again, it should be seen more as a moral question. in terms of the relationship, that is already in the freezer. i don't think that's going to improve because australia decides not to provide assistance to those in hong kong when things are so bad. i don't think that should be a motivating factor given the

pressures on the relationship in any case. i don't think it's going to make things significantly worse. we always have to look for the bite and not the bark. there is a lot of barking at the current moment. what are they actually going to do? that is the real question. >> thank you very much. we have live pictures. president trump and the president of mexico are holding a news conference live. this is after they hosted a working dinner. this visit today was touted as a celebration of the new north american free-trade deal. we know that this is happening just four months before the presidential election here in the u.s. not to mention an ongoing global pandemic. the political risks have been high for this meeting.

we will discuss more on what happened today when we get back. we'll have two more to come on daybreak australia. this is bloomberg. ♪

♪ >> let's get straight to the markets. >> we are anticipating modest

gains in asia with the focus on chinese stocks will keep up the rally. dollarsns above nigeria for the first -- above $9 trillion for the first time since 2015. meridian and contact energy are slumping after the news to close a smelter. rio says prices are too low to be profitable with the industry producing more than it needs. aluminum prices have dropped nearly 8% this year. the largest u.s. aluminum producer erased gains. it's elementary second-quarter results beat forecasts. copper marching higher after

erasing 2020 losses on tightening supplies. a gauge tracking 30 copper producers have climbed to a six-year high. one guest says a copper deficit is not beyond the realms of possibility. lay has confirmed cases of covid-19 topping 300,000. >> let's take you to live pictures of president trump and aesident lopez obrador giving joint statement. this after they had a working dinner with businessmen. this has become an interesting time. we have the ongoing global pandemic, but also this is among the first overseas trip in three years.

just four months ahead of the u.s. presidential election. earlier, the mexican president shownresident trump has mexico understanding and respect in the government saying the ideological differences have not lead to confrontations. we know that the two leaders stand on the opposite sides of the political spectrum. our reporter is joining us from washington. we know that this was touted as celebrating the new usmca, but at the same time, it is interesting timing for the visit. >> it is absolutely. it is true that they are nearing usmca.alization of the they are neighbors. justin trudeau was initially extended an invitation to be there, but he had a scheduling conflict. it looks like a normal thing to

go on, but you are right. the timing with the election four months away made it something quite controversial. i was speaking earlier to the vice president of the council of the americas. this is what he had to say about the usmca potentially curbing chinese influence of the same time. ,> in the auto sector negotiations try to change the rules of origin, tried to change the incentive for producers so that jobs would be created within north america specifically. my perspective, what it does is ness withinompetitive north america and that is something we have to build in order to be more competitive with china and other emerging markets. >> what are the implications for u.s. trade policy? >> there are wide-ranging

implications. for farmers and auto workers and a variety of people across sectors. this is something that was long negotiated in congress. democrats worked on it closely with the trump administration create it had bipartisan support. the trade deal is incredibly important for the u.s. given you look at the relationship with china. there is a trade deal between those two countries. there is also a lot attention. to have a trade deal with a company -- country like mexico and have the president's standing next to each other praising the relationship saying things are better than they have ever been before, that is a sign of strength right now in the u.s. relationship. emily.k you, a state investment fund says is taking advantage of the opportunity made by the

coronavirus pandemic. we estimate the outlook for 2020 after seeing record profits last year. was a record year for profits in 2019. for 2020, basically finding opportunities during the covid crisis to acquire new assets. also at the same time, going to release the assets that we had. [indiscernible] we came into covid with a strong balance sheet. from manydifferent we keepng-term -- focused on the long-term horizon.

you look at the market today, it is a bit -- you talk about opportunities, where are you seeing them right now? asia first is the u.s. and europe? think clearly there is a bit of a divorce between valuations. [indiscernible] in the depth of the crisis, there were opportunities to acquire long-term assets. we think there are opportunities for building positions as well. the long-term, to provide growth opportunities.

it is not something we're looking at in the long-term but [indiscernible] >> which are the right markets? are you looking to invest overseas? >> we are. have been expanding our global asset portfolios as well. that is the right thing to do. over time to diversify. it wouldn't make sense essentially for a country like malaysia to have its own [indiscernible] when the government's tax base has a domestic focus. just like other funds, we try to diversify. >> would 40% be a fair assumption of the part of your portfolio that is invested overseas? >> no. the process of rebalancing our portfolio will take some time. today, we are under 20%.

we have a view of growing that overtime. this cannot happen overnight. take 5-7 years to get it will want to be. >> are their targets you have set for yourselves in 2021? despite the fact that you are looking long-term? 2019 was a great year for us. markets have rebounded. it is up to us to -- the rebounds. at the same time, build positions for the future. given what has happened with the economy and especially the fact , with airlines and bake investments in tourism, those sectors in particular will take

a bit of a hit in terms of risk evaluations. that fromelieve operation point of view, [indiscernible] davidnty more to come on -- daybreak australia. this is bloomberg. ♪

♪ analysts have lifted their earnings forecast for a company that bankrolls lawsuits on expectations that the pandemic could spark more legal disputes. why the profit expectations have risen so much this year. thatalysts expect litigation funding will sustain growth in the pipe -- pandemic. typically, they fund lawsuits than take a cut of the proceeds. it is a sector that becomes more attractive when there is a lot of risk and that is what we are seeing right now in this health crisis. healtht of risk for companies and a letter risk for legal disputes. they have seen a surge in funding request this year and that demand has prompted them to

hire in offices around the world to keep up with the demand. any downside from the coronavirus? any is this,ike their operations have had to adapt to lockdowns, people working from home. they have also had to grapple with the effects of lockdowns on legal proceedings in several countries. in the u.s., jury trials were effectively stopped and arbitration proceedings that involved multiple jurisdictions have been difficult to carry out. that has affected those parts of the business. litigation funding related to insolvency has been muted because of safe harbor protections that were put in place to help companies whether the crisis. omni bridgeway expects those will pick up once again the protections are pulled back. that was just the edwards. -- jackie edwards.

airbus has failed to secure any new aircraft orders for a third month as the coronavirus pandemic continues to hammer global airlines created attracted zero interest in june and had one cancellation bringing the total net orders to 298. airbus has tried to keep business going. handed over 36 aircraft in june and more in may and plans to cut 15,000 jobs. financial is denying reports of a ipo in hong kong. the chinese tabloid would reflect the views of the communist party. it is suggested the payment platform is seeking evaluation of $200 billion. alibaba owns 30%. shares surged by as much as 9% in new york. we will have plenty more ahead on "bloomberg daybreak: australia."

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haidi: a very good morning. i am haidi stroud-watts in sydney. shery: i am shery ahn in new york. welcome to "daybreak asia." asian stocks set to follow the u.s. higher as investors again look past u.s.-china tensions and focus on companies seen as immune to rising coronavirus numbers. the pandemic reaches another grim milestone with cases in the u.s. climbing a