♪ haidi: good morning. we are waiting for asia's major market open. shery: welcome. our top stories this hour. tech weakness on wall street is said to drag on asian markets. fast post virus activity start to dim. covid-19 setting unwelcome records.

cases surging in many u.s. states. india considers new lockdowns. facebook insists it has diversity at the top of its list. but it seems to have done little to boost black staff numbers. let's take a look at how we are shaping up. that drag coming through from u.s. stocks. rotation ofsee this the highflying tech stocks. netflix casting a very dim shadow. missing horribly on just about every metric investors care about.

nikkei futures up by a quarter of 1%. tsmc raising its outlook for evan -- revenue. maintaining there for your guidance. saying that they are seeing improve conditions coming out of china. let's take a look at chinese stocks in particular as we close out this trading week. one state media article suggested it was responsible for corruption and bribery cases

against china. we will continue to see if that stock stages much of a rebound. shery: of course. also moving markets as the coronavirus. deaths topping 585,000. u.s. infection rates rose 2.5%. brazil's count rose above 2 million. cases sort across asia. tom mackenzie has the latest numbers. aboutue talking potentially a second wave or is this a first wave? the only thing we know is cases continue to soar. tom: the spread is relentless. i will start with the u.s.. texas and florida posting record deaths. day recordingird infection rates above 10,000.

switching focus to brazil, you mentioned this in terms of the top numbers of infections. we are looking at about 2 million now in brazil. india has reported more than one million cases. hong kong remains a key area of concern. 63 new cases.

haidi: encouraging product dress -- progress on the development of a vaccine. but there are reports that the research is being stolen by hackers. tom: it was the u.k. that took the lead on this, including -- accusing russians of trying to steal information. they were the same group of hackers who were accused of breaking in and hacking into the democratic national committee back in 2016. they have been leading the charge in these hacking attempts by russia. and trying to hack a number of research facilities around the world. the u.k. did not name which labs

where the tax have been successful. russia came out and said it has nothing to do with us. watch this space on this hacking story. still ahead, it is possible to see companies trading with a margin of safety even if markets are ignoring the bad news. facebook has not increased black representation. our exclusive interview on that is about a bit later. this is bloomberg. ♪

♪ karina: the trump administration is turning on some big companies, saying they are pawns for china. they say they are doing beijing's bidding. arr says disney and apple have been manipulative by the communist party and are changing strategy to simply make money. the european union is threatening new tensions with the u.s. after tracking down big tech programs. the european court of justice ruling on the privacy shields. that ship information to the u.s. face increasing scrutiny. there are troubling revelations about american surveillance. it is a mixed feeling we have today.

it is more in line with the gdp. we could see a new policy decision in the next month or years. : the 1mdb scandal sees in preventing millions of dollars from being transferred. been charged with conspiracy over receiving $3 million from the fund. the scandal sparked global investigation. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. managers reachnt

about 90%. much of that is in asia. in this part of the world, it can still find good companies. which companies and sectors do you think are trading within the margin of safety and value? >> it is lovely to be on with you. one thing to put in perspective is the u.s. china conflict. many have plans to move production out of china.

this would have an impact on the types of companies we would look at. they are hoping japanese companies can repatriate their companies back to japan. we might see that for other countries as well. movesneficiaries of these , they target countries where these facilities are moved to. japan, taiwan, korea, india, and vietnam. each one of those has attractive opportunities. haidi: which sectors would you be interested in?

what investment themes are you convinced on. the common themes across different countries seem to be digital transformation. a lot of companies are so moving to the cloud or need to do some work. there are many global leaders among the countries in asia. once wel do very well get through this pandemic. there are also companies focused on outsourcing. all of these companies have a lot of potential. areke the u.s. market, they trading at reasonable levels. they give us safety as we make investments. i will give you an example in japan. themes, not just these

but the ability to expand and go forward in time. you have to start off with cheap evaluations. you have high cash levels. japan is in a cash position. it is amazing to think about. the overall corporate debt is like 40% of gdp. the highest it has ever been. at the same time, you have had five years of corporate warm leading to finitely -- among corporate management. the make is much more attractive to opportunities in private equity companies. we think there are all sorts of options in japan, not just because of the chief valuation but these other factors as well. shery: when it comes to asia as a whole, is it worrisome that a hasof the growth and rally

been around these growth stocks? much really are not as economy stocks. >> this is an interesting question. if you look at the spread of growth and value, we are be much near an all-time diversion. growth has way outstrips value. arehe same time, they beyond the biggest companies. there are still a lot of companies.

they are very good for the environment. they have a dominant market share in japan. the net cash they have on their books is about 45% of market cap. that is pretty remarkable. they are training at a very reasonable level. that is very robust. they have different sources of growth. for different reasons. they had a basic. supply chain.

there are definitely companies who meet our criteria. shery: great having you with us. thank you. saw all record profits for the second quarter. total revenue grew by almost one third, to $13 billion. revenue from fixed income surged. the ceo gave us his take. what we design was a business that in times of severe stress will be fine. when markets are volatile bowl -- volatile, we will be fine. that is what we delivered. i think it validates the

strategy. but that is our strategy, is not for everyone. >> we have heard from several ceos that we have not fully realize the risk around this recession. that fiscal policy has made it more difficult. >> it is very hard to tell for the economy. it is too early to tell. shery: even corporate america

starting to see bankruptcies at a faster case. -- pace. >> i don't know if you can get ahead of it. it is a natural consequence. that is part of why we saw such a massive wave in the first quarter. they built up stronger balance sheets to participate. >> i want to talk more about the small customer here. are they flirting with danger? >> when you can tell me when the the marketmarket is,

reflects future earnings. that is what we have. whenever there is a time when teslarket is on fire, should be based on what tesla has been able to do. >> wall street has seen huge amounts of success in the last couple of months. what is the best way of explaining that in a moment like this? how wall street has done so well in the past couple of months? when the economy and labor market is still pretty much on its knees? --i am not sure i would's would describe it is a huge success. we are the only banks to beat the cost of capital.

they have huge trading revenues across the street. the profitability of wall street is actually dramatically down. if you look at the banking i don't think there is a disconnect. i think it reflects what is going on in the economy. haidi: the morgan stanley ceo there speaking to us. today, and exclusive interview. coming up, we have the data.

this is bloomberg. ♪

shery: netflix shares are taking a hit and lay trade. details. the reactionof this price is actually to do with disappointing results? in?much is already priced stockhink obviously the had gotten ahead of itself. you have to take a step back and look at the big picture. growth had really strong through the first half of the year.

extremely strong growth. the stock got ahead of itself. haidi: obviously it was price to perfection. there really considerable challenges under the hood. critically within the u.s.. the u.s. has reached its saturation point. netflix management has spoken about this many times. they made a huge foray into the international market. you particular quarter, will see 85% of new subscriber growth comes from overseas.

it is a huge potential for netflix to grow in nationals is carrier -- international subscriber base. we are currently at 193. a huge runway. we expect to see a lot of growth in the future in asia. investors have been getting really excited about some of the plans they are offering. marketally expands their further. what about the production and content side? are they having to rely more on outside the u.s.? >> yes. they are. production has been at a complete reads since covid-19.

but some production centers are gradually reopening. we make them have their production in advance. you look at july alone. you have new cycles coming out. it speaks to the power of their strategy. great to have you on. thank you. up, the trump administration turns on some of america's biggest companies. the details ahead. this is bloomberg.

hike! simon pagenaud takes the lead at the indy 500! coming to the green flag, racing at daytona. they're off... in the kentucky derby. rory mcllroy is a two time champion at east lake. touchdown! only mahomes. the big events are back and xfinity is your home for the return of live sports.

shery: you are watching "daybreak asia." let's get a quick check of the headlines. the u.s. and asia seeing new specs in record numbers. global infections have topped 13.5 million with deaths approaching 600,000. of 3.5ses rose 2% million with texas and florida posting a record number of fatalities. colorado and arizona are the latest dates mandate that wearing --the wearing of masks in public. tokyo is reassessing virus policy after setting an

unwelcome record in infections. 286 new cases, the most ever for a single day, sparking fears that covid-19 is spreading into the wider community. hong kong also reported record new cases. the third time in a week the new outbreak has breached existing levels. the resurgence affected about 300 people in less than two weeks. india is rapidly becoming the virus focus in asia with covid-19 cases topping one million and fatalities raising about 25,000. the country stands stern in the tally behind the u.s. and brazil with a rise in single day cases of 32,000. that is the third consecutive day that inflection numbers have risen by more than 28000 and several states have been forced to reimpose sweeping law nouns. 2 million virus cases as the pandemic ravages poor remote regions and intercity areas. thursday saw 45,000 cases with

1300 deaths, taking the overall toll to almost 70 7000. brazil is second only to the u.s. in numbers and has added one million virus cases in a month. infections seem to be slowing in big cities but authorities warned the rate is rising elsewhere. haidi: the u.s. attorney general is the latest official in washington now attacking china's actions and global ambitions had william barr turned on some of america's biggest companies, alleging the likes of disney and apple are working at the expense of democratic values. american are an business leader, appeasing the prc may bring short-term rewards. youprc's goal is to replace . corporations such as google, have shownapple, themselves all too willing to collaborate with the ccp.

emily wilkins joins us now from washington. put furthernd of pressure on u.s. corporations caught in the middle between wanting this growth in this part of the global market but also facing the ira president trump ire of president trump and william barr? emily: they want to be international. they want to appeal to a wide base of customers. to sort ofontinued impose restrictions on companies, having them bend to the country's will. certain things, like they had apple reporting news on hong kong protests. as you mentioned in the clip, they are concerned about potential copyright infringement. shanghai disneyland opened up and then a similar amusement park opened up with similar characters to it. you are seeing william barr go ahead and give this morning.

telling companies you cannot worry so much about the bottom profit line. you need to be thinking long term in your relationships about china. also warning about potential hacking attacks. he was not the only one. we had other governments warning of this. especially coming from russia. emily: yes. both the u.s., u.k., and canada also say russian state intelligence is hacking international research centers. china hackingr american companies and universities but the goal of stealing information, i mean, to be frank, this is the one thing everyone wants this vaccine had the first country to get it will have potential advantages in how the economy reopens. this is certainly a very big prize. i think the whole world has their eye on it right now. happensur eyes on what with fiscal stimulus measures in the u.s.

a lot worry we might be headed towards a fiscal cliff given we might see more political brinksmanship. hoping notakers are to get a bill passed within the next couple of weeks, bipartisan discussions are just getting started behind the scenes, but look, this is something that republican senators have said that they want and they are on board for an house democratic speaker nancy pelosi says they really reaffirm that. there will be some tricky issues. we will have to see if states and localities get funding, what sort of funding goes to those who are unemployed. a little bit of a boost in the money they get. that might not continue. just the complication in negotiations. it must include a cutting of payroll taxes. has is something trump touted. republicans and democrats are not so interested in it. as we have other times, we will be seeing a lot of negotiation here but everyone is trying to get to it. wilkins, r blumberg

congressional reporter. we have nancy pelosi speaking exclusively to bloomberg ahead of negotiations between democrats and republicans. take a listen. have that to legislation. it has been two months. it has been two months. more people have died. more people have gone unemployed. more people have been infected. what is the value of waiting? i know simple say it is too much money. what we are doing for state and local government is one half of what the republicans added to the national debt in order to pass the tax scam which gave 83% of the benefits to the top 1%. we are not a caste system. we have to make sure we have, as

we recognize, a consumer economy. the confidence people have in order to have money to spend it, to inject demand into the economy, create jobs. that is what we have to thrive on and not just depend on some possible trickle-down. so be it. comfortable about it. there's a lot of enthusiasm. much of the injustice of it all, whether it is economic, health, education, coronavirus specifically, lower income people and people of color in a very disproportionate way are impacted. we know we must address that and we must address it especially now when there is a threat to people's lives, their livelihoods, and the life of our democracy. >> some of the least fortunate countries have been hit the hardest by the pandemic itself, by the disease, and by the

economic aftermath of that. what can you do to make sure that money gets to those people? there are various reports that a lot of it has not. >> the direct payments get directly to them and the on employment insurance does. we think that the ppp, paycheck protection program for the small businesses, did reach a lot of people, but it has collateral benefit to those who should not have benefited from it. that was unfortunate. very specific in how legislation is written and not just assume that people will do the right thing or the fair thing. that was house speaker nancy pelosi speaking exclusively to bloomberg. bringing diversity to the board room. stephanie joins us to explain why it is not just about changing representation in the world's largest corporations. our bloomberg equality series is next. this is bloomberg. ♪

shery: let's get a quick check on how markets are trading at the moment. u.s. traders extending gains, up .3%. this after we had stocks declining in the regular session. we had investors continuing to rotate out of this year's top performers in tech the declines. nikkei futures unchanged at the moment. this as we have the japanese yen really trading at a tight range, holding about 100 seven level.

wti at the moment has rebounded and really recouped some of those earlier losses in today's session. we have seen it now at around the $40 a barrel for the entire month of july. opec plus confirming it will start tapering output cuts from next month. of racial equality protests in the u.s. has reinvigorated the call for diversity in the boardroom and there appears to be some progress. recent studies show a record 59% of new director positions in 2019 were taken by women and minority men, but it takes more than representation. that is according to stephanie creary, a scholar of boardroom diversity, assistant professor of management at the university of pennsylvania has wharton school. stephanie, great to have you with us. tell us a little bit about this relationship between boardroom

diversity and the benefits that come with it and perhaps even profits related to these companies. stephanie: thank you so much for having me on today. there has been a lot of research from the academic field and from leading consulting firms, suggesting that board diversity is important for the performance of the firm. sometimes, the results are somewhat mixed, but the reality is that many companies believe that diversifying their boards is good for business, and the reality is, as we can see, we have conversations about diversity in corporations more broadly. these are the types of issues we continue to address. however, there continues to be a struggle with creating diversity on boards. as you have shown in your graphic, much of this diversity is by women. in the u.s., white women, and by minority men, so we see a lag in

getting more women of color on boards that is what we are wrestling with. shery: how much is this just an issue of getting the numbers there, mandates increase gender diversity on corporate boards and just racial diversity as well with just increasing the numbers? one member, to member? two members?stwo -- stephanie: i have been doing research to help us understand increasing board diversity. in my research, what i have found is the culture of the board actually matters and what i mean by that is you can have women, you can have people of color on a board, but if the board culture is a set up such that people's opinions about even companies performance or for that matter around diversity, if they are not welcome, than the diversity will not do much for the firm, so what i have been trying to do in my research is to push leaders and boards to reconsider the boardroom dynamics and how those

are helping or hindering the diversity, helping to create the gains companies are seeking. haidi: there is often the old fallback when it comes to recruiting that there just is not a sufficient pool of talent or of available talent when it comes to, for example, people of color who are female. but is that just an excuse do you think, and does this bring you to the debate over two we want equality or do we really need equity? stephanie: there is a long-standing excuse and we are talking about boards right now, but we think about workforce and we think about engineering jobs and we think about scientific jobs. this is constantly the excuse that is being made for why we do not have women or people of color or whichever group is underrepresented. in reality, all the stats point to the fact that firms just are not looking and they are not looking in the right places, and often times, they see the prop

up in the recruiting process with respect to which institutions we deem are elite enough for our needs and the fact that it is a long-standing history of long-standing -- history of ceo's. we are ready are not going to have a lot of women in the pool. we are already not going to have a lot of people of color in the pool but if you ask board directors, as i did my study, necessary, they are really hard-pressed to give you reasons why. there are these criteria that often do not make sense to board member stem cells. my research and other institutions is interrogating the criteria that are really necessary because once you begin to create a less than exclusive net, we begin to widen the and we are able to cast a broader net. haidi: what can corporate

allies in the workplace do to make sure we maintain this momentum that has been gained in 2020? stephanie: certainly speaking, that becomes really important. for so long, we have relied upon those who are feeling most affected. we have relied upon women, women of color, and other racial minorities to point out when there are issues. those ways of speaking up and their concerns have largely gone unheard. people who are not from those groups amplify the voices and concerns of those in the minority so we actually begin to see progress. we must be unafraid to amplify the concerns that your minority or female colleagues are expressing. also being committed to the long haul. if you amplify concern, you will have to continue to carry that forward and see it towards execution of action plans.

speaking up alone is not enough. i think that is what is different this time. more allies staying with the conversation as opposed to just raising the issue and then backing away. shery: we are talking about mosley gender diversity, racial diversity. what about the need for idea and thought diversity? perhaps even recruiting from different professions when it comes to getting those people on the board? stephanie: what is so interesting about that is in my research that i have been sharing with you on board diversity, i ask these questions and the reality was, the gender diversity and the demographic ofersity was the same source thought diversity. for example, if i said that historically, ceo's and potentially ceo's from financial services firm, they were comprising the majority of board membership. in opening up the field of

candidates to board memberships and by including women, including people of color, all of a sudden, we have human resource leaders, tech leaders, people from cyber, a burgeoning area of interest for many firms, these are actually not different. diversity of thought and racial or social diversity, these are not different. they are coming from the same source. --hink it is helping to helping the firm to create these broader conversations that are much-needed. haidi:haidi: how problematic are these conversations about whether a candidate is a good cultural fit? stephanie: they are really problematic. and it is because this notion of what it means to fit has been stretched in so many different directions. take for example that every organization has norms and values and certain things that are important to uphold in order for us to work well together.

what the notion guys in the process of hiring a worker or in the process of hiring somebody for the board is that we are often assessing based on similarity, based on our comfort zone. went to to wharton, i wharton. you vacation in this destination, i vacation in this destination it all these things that really do not matter to the performance of the company, the performance of the board, and up being factored into this notion. that is why it is problematic. unless this idea of cultural fit is really firmly about values and norms that are important to the workplace, and that is where the tension is is that is not where most companies are. they have not codified that or decided that in a discreet way so hiring managers or board recruiters are really taking this much more subjective assessment of fit that creates inequality in the long run. think about.o

really appreciate your time and your views for us. assistant professor of management at the wharton school at the university of pennsylvania, stephanie creary, with us. facebook has failed to improve its black representation in technical roles since it began diversity numbers. the chief diversity officer spoke exclusively to bloomberg about the social network's struggle to recruit and retain black employees. thate interesting thing is we also do not want any -- on our platform. most of the people who use -- the 3 billion people who use our platform, they are doing it to connect with people that they love, to do things they are interested in, and it is all goodness this scale, there is some hate, and we have every incentive to reduce that, and we have. over this time, we have greatly reduced the amount of hate people see before they even see it. we have developed systems. we have thousands of people. this is an area we are just

going to keep because it is in our interest for it to come down. critics say that this is a failure of leadership. i know that they repeatedly say these things are important to them but are they important enough to them? are they making diversity enough of a priority? >> absolutely 100%. emily: where's the proof? >> in the investment. i am like 117 years old. i have worked in a lot of places. i have worked in different industries. i have never worked in a place where i have had this much leadership driving this. leadership saying we need to do even more. we need to do it faster. we need to do it better. what are the resources we need to do this? we will apply those. facebook's chief diversity officer, maxine williams. if you are away from a screen, you can find the in-depth analysis and a day's big

newsmakers on bloomberg radio, now broadcasting from our studio and hong kong pimp listen via the app, bloomberg radio plus, or bloombergradio.com. this is bloomberg. ♪

shery: let's get a quick check of the latest business flash headlines. as 15% afters much the company reported first income profit. 11% to just over $.5 billion through june. infosys says at expect revenue to be flat this financial year with an operating margin of just over 20%. twitter analysts say the high-profile bitcoin scam raises potentially long-term threats to the company. shares plunged after hackers targeted several public figures and mk on partners to says the issue could lead to concerns about user and data safety. the stock has risen 60% from a march low but remains above 25%

below its peak last september. twitter says user passports appear to be safe. saysng short seller -- betting against tesla may not be a good idea. the ceo is a longtime critic of elon musk company but told bloomberg he doesn't have any rent wagers. tesla 300% surge since march has baffled skeptics who say it is grossly overpriced. the value of bets have swelled to nearly $20 billion. i just do not see this business in any reasonable incarnation of it being able to really generate cash on a sustained basis. own risk.that their i would not do that. let's take a look at how we are faring when it comes to the asian trading session this

friday after we have u.s. stocks backing the two-day rally as we see the rotation away from these highly valued tech names. new zealand, we are seeing upside of .4% in this part of the world when it comes to sydney futures. we look like we will get that positive open and in particular keeping an eye on the miners after rio tinto maintained guidance on doctrine and also has some fairly positive things about a modest recovery for china to say. nikkei futures are up by .1%. chipmakers in that market after tsmc raised its guidance when it comes to outlook, when 49... 50!

i found you! good job. now i'm gonna stay here and you go hide. watch your favorites from anywhere in the house with the xfinity stream app. free with your xfinity service. now any room can be a tv room. stream live tv, on demand shows and movies even your dvr recordings. download the xfinity stream app today to stream the entertainment you love. xfinity. the future of awesome.

♪ shery: good evening from bloomberg's headquarters in new york, i am shery ahn. haidi: and i am haidi stroud-watts in sydney. asian markets just open portrayed. welcome to "daybreak asia." tech weakness is set to drug on asian markets, microsoft and apple leading losses in new york as hopes for a fast virus .ecovery start to dim

cases surged in several u.s. states. in highg in tokyo marks, and india considers new lockdowns. brussels sets the stage for another battle with washington as it tightens rules on the internet today. we hear from the e.u. commissioner of justice. shery: japan, korea and austria are coming online. let's get to the market action with sophie kamaruddin in hong kong. sophie: we could see consolidation on late eco-data, with singapore exports headlining. we are focused on the tech space, giving signs that the nasdaq maybe speaking. peaking. we are seeing light gains for .oth the topix and the nikkei we are keeping an eye on banks and brokers as well, on a news report that the government is considering eliminating a client information firewall. ,his morning, the yen is steady

set for a weekly drop ahead of the boj's buying on the front end. less check in on the mood in seoul. we have the kospi moving higher, adding .04%. the korean won is steady, above 1200. korean yields are supposed to stay rangebound after it disappointed bond traders yesterday who were expecting a signal of more debt buying. we will be watching the meeting today, which will discuss corporate bonds and commercial paper. australia, traders are on watch for the rba to resume bond buying, with the three year yield above target. aussie stocks are opening slightly higher, by .01%. gains thisave led

week, and we are watching employer guidance, with china's demand stabilizing after on improving second quarter. haidi: all right, let's get some insights on the market from julius baer head of asia research, mark matthews. mark, in your recent commentary, you talk about the fact that you think these markets when it comes to the u.s. may not be so overvalued, if you take into consideration that perhaps the bank earnings week we just had is evidence of this, that the wall street consensus of the earnings season may be a little side. mark: that is right. i have not seen the most recent numbers, but last i looked, companies who reported beat expectations by 80%. we all knew that the second quarter would be terrible, but it is turning out to be a little less terrible. haidi: in terms of asia, you are fairly critical about the lack

of a new economy spacings for stocks or companies in this part of the world. mark:. yeah. i like to use the example of sea limited, the largest app in southeast asia. they do gaming, the largest e-commerce site. they are now the largest listed company in southeast asia, and it has gone up dramatically because there is nothing else to buy. we have energy, we have banks, consumer, but there is no new economy in asia but he might -- pretty much outside of china. shery: there is gtv charts on the bloomberg showing this huge rally we have had in the u.s. when it comes to growth stocks, tech stocks mainly. the shanghai composite also going along the ride when it comes fo to that rally. but, as you mentioned, there are very few new economy stocks in the rest of asia. yvonne

you know, there are so many moving parts. one thing is that the dollar has been weakening gradually. 15k: stripping off about basis points a day the last couple weeks. so if we get it continue dollar decline, that would be helpful to the rest of asia. i think people will increasingly be looking to invest outside of the united states particularly if there is a blue wave in the united states, the democrats get the senate as all of the house of representatives and the white house. our focus is on china because it has new technology. you mentioned shanghai composite, it doesn't have new economy, but it is still going up because of a bunch of reasons. they seem to have beaten the virus in china. the economy is coming back and the government has signaled the likes of a rising market. so that is where our focus is,

maintenance china in particular. haidi: you mentioned the elections in the u.s.. our question is what assets are sensitive to trump. the have an answer? mark: if you are talking about if there is a change in government, there is a bunch of things. democrats would be even tougher on the financials, i think. they would go back to the kind of consumer protection obama was doing. on the green big new deal. that is good for the oil price, it means less production of oil in the united states. i suspect it would mean the escalation of the trade war. i think that with neoconservatives, neo liberals back in the state department, you would see a muscular u.s. military president in asia, but

on the trade and economic side, i suspect it would get that are. haidi: it is interesting, we just had the story on the bloomberg terminal basically arguing that the world is too changed for a biden victory , because inange other parts of the world, we have populous leaders as well. we have a confrontation with china. so when it comes to geopolitical , has not beens set regardless of what happens in november? mark: i don't think so. by the way, a lot can happen in four months. there is no guarantee that biden is in the white house, but i think there could be a lot of de-escalation between the u.s. and its traditional allies like an and mexico and europe. yes, it is true there are populists in brazil, japan, and

india, but it is hardly like the world has been taken over by them. lack of revert to, for a better way of saying it, a kinder and gentler geopolitics. whether the market cares about that or not, i don't know, but on the trade side, i think it appreciate if there was a better relationship between the u.s. and other countries. haidi: all right, always appreciate your time and your views, mark matthews in singapore. we have more on the outlook for global markets. we will be joined later on by daewoo securities president period to shira later. you can catch that interview at 9:30 in hong kong, 11:40 in sydney. this company has raised its 2020 outlook. coming up next, dr. anthony fauci says he sees the

coronavirus vaccine within months, as the coronavirus cold war flares up with new claims of a state hack attack. this is bloomberg. ♪

. >> the trump administration is turning on some of america's biggest companies, saying they are simply pawns of china. attorney general barr says disney and apple have been motivated by the chinese companies. virus cases in florida continue to rise. leading figures say they will not be attending the convention. on the party delegates will be

allowed of the event in jacksonville, when president trump will be accepting his nomination. that decision will cut attendance to the convention to about 2500 people. the european central bank says it will not be constrained by potential political dogma as it tries to support a single-market economy through the virus followed. christine lagarde says she expects the bank to expand the buyingount of the bond program, despite policymakers saying that will not be necessary. the ecb governing council came to know decision at its latest meeting. global news, 24 hours a day, on air and @quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am karina mitchell. this is bloomberg. shery: the coronavirus continues to set grim and unwelcome records. global cases are now above 13.5 million, with brazil topping 2 million alone, and india, one million.

in asia, hong kong and japan are likewise reporting record figures. cross to our's international editor, jodi schneider. let's get started with places like japan and hong kong come out where the virus seems to be contained. what is happening now? jodi: these are places where the numbers are still lower than in places like the united states. but where there had been at least a feeling that things had been contained pretty well, people are going back to work and to school, no they are going the other way. hong kong, the last few weeks now, there has been a fair bit of local transmission. yesterday there was a record in the daily cases, of 63, which sounds relatively small when you look at arizona, which is in the thousands of cases, that still, this is concerning because it

had been under control, and now it is not seen as being. , thereng kong and tokyo is another center of transmission in japan, are trying to stop the spread. in hong kong, schools had went back, they have ended. restaurants are closing at 6:00 p.m. measures like about, but the numbers are still going up day-to-day. same with tokyo. tokyo does not really have a work from home culture, which has been part of the issue there , very difficult to get people to not be in the office, and that is something they are trying to work out as well, because it affects public transportation, the number of people on public transit.

haidi: as we get encouraging initial developments on a vaccine, we are hearing from that russian state intelligence is also part of this hacking of international research, we have heard this from the u.k. and the u.s. as well. jodi: that's right. statement,ic they say multiple countries have been targeted by this russian hacking center, and that it is almost certainly part of russian state intelligence. the u.s. and canada later issued their statements backing up those findings. what is unclear is whether research facilities have been damaged or vaccine programs have been set back as a result of these hacks, which, of course, would be a major setback, because these are vaccines --

the testing has really started ramping up, and there have been some hopeful signs, so this is quite a dramatic incident. it comes on a delicate time also in geopolitics, with the u.s. election looming in the u.s., and the pandemic plunging the world economy into recession, so it is quite a dramatic development. haidi: senior international editor, jodi schneider there in hong kong. next, thousands of u.s. companies have to rethink how to move data from the e.u., after a key data transfer pact is scrapped. we will talk about the details and what this means for silicon valley, next on bloomberg. ♪

shery: let's get a quick check

of the latest flash headlines. million rescue00 package, virgin atlantic is preparing to return to the skies next week, although it will not see demand at pre-virus levels for at least three years. the company says u.k. quarantine restrictions will mean it is essentially travel-only. it says bookings remain limited. american airlines is making a big bet on new york forming a tie-up with jetblue, to spur traffic. the deal includes a cochairing agreement with travelers able to use either carriers to book flights. the plan to boost the standing k is in competition with delta. this week, and carrier resume services to london and paris, and intends to reinstall

services to tehran, guangzhou and others. this airline has been hammered by coronavirus, which had devastated demand for travel and put several carriers in danger of collapse. we are getting breaking news. according to reporting from the financial times, the white house is weighing the potential blacklisting of tiktok, after we had several house makers rising to the u.s. attorney general. attorney general barr calling for the ban, saying the social media app represents a security threat to anyone who has it on their phone. we continue to watch developments. theaccording to the ft, white house is now considering blacklisting of tiktok. alexa are at the center of a sweeping antitrust probe in the e.u., saying that these devices could be used to keep a tight grip on the

industry. markets is a risk that could develop in a way that could harm consumers and competition. that is why we have launched this inquiry, so we can take action before it is too late. haidi: the probe comes after that you use top court invalidated a packed known as the privacy shield, which is sending thousands of u.s. companies scrambling to figure out how they will be able to move data across the atlantic. bloomberg editor for privacy as well as data security joins us now. of whata better crux this means, in the implications -- and the impositions for companies affected. who a lot of companies transfer data from the european union to the u.s. rely on privacy shield. however, that no longer exists.

so the other options were standard clauses, however, there were issues in the decision. you might have to go on a case-by-case basis, and social media data may not live up to european productions. so there will be issues going forward for a lot of large tech companies. shery: what products are we talking about question mark we are hearing cases of connected fridges and washing machines being under the spotlight. dan: a lot of the data here, some of it is just day-to-day information. it spans of the whole globe. 23andme type companies and a lot of other r&d companies you have .een mentioning as well stoler with the latest.

our guest told us what it means for thousands of companies who need to transfer data into the u.s. and europe -- between the u.s. and europe. that we willare receive a decision of the courts. and we have prepared the reaction since many months. also in discussions with our colleagues in the u.s.. but today it is important to take note of the adjustment of the ecb. it is the highest court at the european level, so we need to abide by the decision. the decision is an invalidation shield,, but it is also a validation of the standard contractual clause. that is the most used instrument tool to extend, to exchange data between the u.s. and europe and

its many partners in the world. so it is a mixed feeling that we have today. we need to continue to modernize the standard contractual clauses to have a better approach on data protection. continue to discuss with our u.s. colleagues to see what is possible to do, to decision in the next months or years. >> have you talked to your u.s. colleagues? dididier: yes. wasecember of last year, i in washington to discuss with attorney general william barr, and yesterday i had the trade secretary, wilbur ross, on the phone. will talk tomorrow to see if it is possible to talk together. it is an abiding decision. we need to abide by the decision of the court and we need to

discuss with our u.s. colleagues to see what are the possibilities we have to give a full application of the decision. but, we need first to analyze in detail the decision. it is not just after some hours that it is possible to say the content of the decision. alix: this affects thousands of companies who sent data between the u.s. and the e.u. what is the u.s. supposed to do? didier: they have different elements. we have a valuation of all the tools for piracy shield, it was -- privacyy tool shield was not the only tool to exchange data. there are also other instruments inside different groups. so it is possible to use different tools. with the u.s., it is possible to give an answer to the court and to maybe organize a

better data protection. -- we need to be sure that the protection that we are giving to the citizens about their personal data is traveling with the data. if we exchange data at that level, of course, you have the gdpr, protection of data but if you exchange with countries out of the european union, we need to be sure we have the same level of protection. so we need to see what is possible to do to have a better level of protection for data coming from europe, in full compliance with the decision of the court. an example, we have, since many years, this question about the ombuds person in the u.s.. maybe to have a better role for the ombuds person to have

better protection in europe. shery: take a look at airlines -- japan airlines is now falling the most in about one week, after the japanese government said that they plan to exclude tokyo from their planned go-two campaign. the campaign was aimed at promoting domestic travel to boost the tourism industry. ana holdingss and both falling today, on the news about tokyo may be excluded from the campaign. haidi: we are also watching rio tinto, surging one point come out gaining more than it has in the last six months. point, gaining more than it has in the last six months.

demand is keeping prices elevated. the company also says it sees conditions in china improving through to the second quarter. lots more to come. this is bloomberg. ♪

haidi: breaking news in singapore. trade numbers are showing a slight improvement in the month of june in nonoil domestic imports. the number is up .5%, bouncing back from the contraction of 4.6% in the previous month. it is coming off a low base, though, mainly driven by , andectronics pharmaceuticals are a major part of that as companies come back from the strict looked on

electronics also played a role. the market as a whole has grown in 2020, although the singapore government says exports to hong kong, indonesia and thailand all declined. certainly, the number for a on year, 16.1%. particularly crucial for this very export-oriented externally-dependent economy in singapore. let's look at the market reaction. sophie. sophie: we are seeing muted reaction. the dollar is slightly weaker, still on course for a modest decline for the week, staying above 139 against the dollar. let's check in on the broader markets. in asia, we are seeing modest moves to the

gain ina .7% wellington. the kospi gaining ground, but it has gone back to the red on a year to date acis, about weight percent so far in 2020. -- on a year to date basis, about .01% so far in 2020. we are seeing aussie shares hold above 6000 points. overall, tech stocks are leading gains this morning. pulling up a chart on the terminal, there are signs that momentum could be stalling for the tech space in the u.s.. but in asia, they are playing catch-up. the hang seng has been strong throughout the pandemic is money has continued to favor fast-growing businesses. if fun at goldman is boosting bets in asia with holdings in tencent, alabama and others

making 20% of the funds portfolio. to apple'ss turn main chip maker. it raises outlook for 2020 revenue, counting on global 5g smartphones and continuing demand, despite growing signs of another wave of coronavirus infections. joining us now from hong kong is the clsa regional head of technology research, sebastian hou. ,he improved outlook for tsmc is it really a reflection of the forvery in the end markets semiconductor makers, or is it more that inventory may be low? is atian: i think it things.ion of two first, there is some recovery on markets.

strugglingeconomies to reopen. people coming out to consume again. recoverseen consumption in the last two months. another reason is that i think it is more structural, because the world's economy needed to be more digitalized during covid-19. more people work from home, so that has driven a new wave of ,emand for example for pcs servers, networking. people need to upgrade to by anyone. something that the other sectors don't have the privilege to enjoy. that kind of strength has emerged in the past few months. these don't go reasons are , are the major factors which drive tsmc's outlook for the second half. shery: how much did the rush shipment to huawei affect this,

and what happens now with the new huawei beeban? sebastian: we estimate it generated 17 percent of the revenue for while indirectly. it was 14% last year. it is the biggest customer of tsmc. but it looks like the company has been able to back fill that. unless we hear anything different from the u.s. outlet, they will stop shipping to huawei. so the revenue will turn to zero. guiding anpany is even stronger outlook for the full year, the second half of this year, before the sanctions.

it is interesting because --[indiscernible] -- big to build added capacity. to your question, how much of that is affecting? i think it is fully factored in. haidi: it was a real show of confidence. theirent on to raise forecast, as well as adding money to equipment spending plans as well. the situation for these chipmakers, regardless what the new world looks like, if it is stay-at-home or if it is returned to the office, if it is lockdown or reopening, people are still installing hardware, and chip demand will be resilient regardless of which of

in.e mires we end up sebastian: that's right. on the positive side, i think the structural change, the paradigm shift driven by covid-19, the way people live likely to be changed for good, even post-covid. for sure, some of the near term spike in demand for pc or networking service will likely the economy opens, when people go back to work, when things mobilize, but that also means that when that happens, some of the other demand -- auto, industrial, consumer, related to the old economy demand, that will recover. so they can offset some of the rollover risk with that demand.

it will balance out. so you can see the tech or semiconductor world will be higher in post-covid world. thater thing to note is given the world is more digitalized, you need a lot more semiconductors as core steps to make those functional. that means a lot of chips will be needed now and going forward. be beneficiary, because everybody has to go to taiwan semiconductor to make this chips. haidi: we also saw another chipmaker surge more than 200% in its trading debut, the biggest ipo of the year in china. how much does this represent the race for global supremacy when it comes to the

chinese versus the u.s. or u.s. allies? do you see a renewed dominance within china to be about to make their own chips? sebastian: that was a very impressive ipo, because in terms of the timing, within three months from the first application to the final listing, i have never seen such a fast pace. it also showcased how strong a chinesent the government is being a champion to catch up or accelerate investment in semiconductors globally, because they are apparently lagging far behind. this becomes even more

important. so the whole process accelerated. whether or not it is to be a game changer, if they are able to raise a lot of money, if you look at smic, they have a lot of their funding from government in the past 18 years. which means they have to put a lot of money into their investment in technologies. in recent years, they have made progress, but compared to tsm c and other leaders, they are still behind. technology is more important, so that remains to be seen. shery: great having you with us, clsa regional head of technology research. another from the bloomberg -- the bank of korea released a statement saying they will provide up to one trillion won of loans to vehicles for corporate bond for justice. 24. will begin from july

they will be buying corporate bonds and commercial paper for six months. they will focus on bombs with a to bbb ratings. as the be ok tries to focus on more non-rate tools. this is bloomberg. ♪

>> you are watching "daybreak: asia." india is rapidly becoming the virus focus in asia, with covid-19 cases topping 1 million and fatalities rising above 25,000, third in the global tally behind the u.s. and brazil. that is the third consecutive day that infection numbers have risen by more than 28,000. several states have been forced to impose sweeping lockdowns. meanwhile, malaysians 1mdb scandal now has the order of dollarsng billions of being transferred to accounts in the u.k. the former leader has been charged with conspiracy of receiving millions of dollars from the fund. there are claims $4.5 billion disappeared from 1mdb. tensions still look to rise further in the korean tenants are not come out with seoul

opening an investigation into look to of -- tensions rise further in the korean peninsula, with seoul opening an investigation into the sister of kim jong-un. global news, 24 hours a day, on air and @quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am karina mitchell. this is bloomberg. thank you. we are counting down to the start of trading in china. the question investors are debating, whether chinese stocks have peaked, or whether there is more room to rally. we have our guest joining us from hong kong. the consolidation or profit-taking we saw yesterday, there have been analysts saying that this is signs of a healthy bull market. exactly, but has been the

message that state media this morning is also trying to give. we had two commentaries on the front page saying that investors should be rational, they should not be wearing about the markets, it is just a normal adjustment, and investors should continue to take the long-term view in the market. but yesterday's selloff was brutal. most half a trillion u.s. dollars, now tying china's biggest stock loss, the most on record. some people are more relaxed about the drop. it is unlike 2015, in that certain conditions in the market are cooler. others are saying that the fast

bull market is definitely over, and it really shows that china wants to manage this downward. let it also has every interest in ensuring that the bull run remains healthy. should investors be watching out for this last trading day of the week as we get more geopolitical tensions and perhaps mixed equal data -- eco-data? sofia: economic fundamentals in china. we had gdp numbers yesterday, which in the global context, is a bit better than most parts of the world. but retail sales figures were still bad. drives amer, which huge chunk of china's economy, is still fragile. that shouldis not the recovery there is not something to scream about. we just got leveraged data out of the shanghai stock exchange, and it looks like it dropped

yesterday. so in terms of margins, if people are unwinding positions, we will see what the market does today. a sign from state media is to keep buying. we will see you next week if the pboc does anything to lower interest rates with the lpr deal on july 20. shery: china markets reporter, sofia horta e costa there with the latest. staying with china, petrobras, brazil's largest company and latin america's largest producer of crude oil, sees strong demand from china, its biggest export market. i spoke to the ceo about what he sees from the country. roberto: the chinese economy is part of the recovery. stalled demand for commodities, including crude oil, it did not

, it started some months ago in april. levele an all-time high of exports of crude oil to china. we export only to private sector refineries. we are doing well. there is significant demand. as we have more oil, we will have the opportunity to sell to china. unfortunately, we don't have so much, because the brazil demand for food has increased over the last two months, so we are refining more about oil in brazil in order to sell -- such as oil and diesel -- gasoline

and diesel. >> does that mean you will have to boost production even past ?our 2020 production targets roberto: it is normal. withn't have problems production or inventories. they are below the normal because demand outside brazil for crude oil coming from china and for bunker oil is strong. shery: where are you when it comes to your 2020 production targets of around 2 million barrels a day? roberto: we are on target. .e have records of production , two daysil fields

ago, we reached a total production in the field of 845,000 barrels per day. that was very good. we are on the way to grow over time. shery: we have seen crude prices hover around $40 a barrel in july. do you expect prices to stay above or below this level for the rest of the year? roberto: it is the $1 billion question. that is feasible to sustain profit around this level. but there is a few more strategies. we are still navigating through uncharted waters. economy, the the numbers for the u.s. economy are

good. brazil is recovering. doubts, is this recovery sustainable or not? when small and medium-size --, therestart to will be some softening of the recovery. shery: what do you think of opec+ gradually starting to produce again starting next month? roberto: to be frank, i am of the debate skeptical about the influence of opec. toause they have agreements cut production, but there is no coordinator, there is no one mandated with the power to identify the noncompliant countries. imposeh authority to some punishment to the

noncompliants. that was petrobras ceo, roberto castello branco. haidi: if you are away from the screen, you can go to bloomberg radio, now broadcasting live from most of your in via the bloomberg radio plus app or bloombergradio.com. more ahead. stay with us.

haidi: a quick check of the latest headlines. leading short seller muddy waters says at betting against tesla may not be a good idea. a longtimeblock is critic but he told bloomberg that he does not have any bearish wages. tesla buffalo skeptics, who say it is grossly overpriced. the value has fallen, but muddy waters is not convinced. theon: i just don't see business in any reasonable incarnation of it being able to really generate cash on a sustained basis. but, i mean, short it at your own risk, i would not do that. analysts say that high-profile bitcoin scam raises potential long-term threats to

the company. shares plunged, after hackers targeted public figures. the issue could lead to concerns about user and data safety. the stock had risen 50% off a march low. twitter says user passwords appear to be safe. infosys surged as much as 15% to in year high, after the company -- to a near high. net income rose 11% to just above $500 million in june. infosys is serving its major clients through the worst of the fallout. the company says it expects revenue to be flat this year, with an operating margin of just over 20%. shery: before we hand over to "bloomberg markerts: china open," let's get a quick check of how the markets are trading. we continue to see the japanese yen trading in a narrow range, holding at107 levels.

we have seen strength in japanese government bonds throughout the week. up .06 percent. consumer discretionary and tech leading gains. the asx 200 is up .02%. utilities and materials are leading gains. we also have the aussie dollar at the moment gaining ground against the u.s. dollar. look at what features are doing. we continue to see some strength 3% as a futures, up .0 u.s. stocks fell for the first time in three days. looking toures are the upside, after the shanghai composite saw the biggest fall since february, a bit of downside pressure from the offshore yuan. coming up, and exclusive interview with dallas securities deputy president, keiko tashiro at 9:40, hong kong, 11:40 in

sydney. this is bloomberg. ♪

w?w?uhió'ñó

♪ tom: 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open. i'm tom mackenzie. david: i'm david and glass. top stories, the trump administration turns on some of merrick's biggest companies, saying they are pawns of china. attorney general bill