i'm finding more and more people are saying, wash your hands. so wash your hands. we want young americans to avoid packed bars and other crowded indoor gatherings. we are all in this together. going toans, we are get this complete, we are going to do it properly, we have been doing it properly. sections of the country come up that we did not anticipate. for instance, florida, texas, etc.. but we are working with very talented people, very brilliant people. and it is all going to work out. and it is working out. if of that, i will take a few questions. aporter: i want to ask you a question about the surge in various cities. the mayor of chicago said moments ago that they are doing this for your failures on coronavirus. you are -- pres. trump: we have not had it that bad. reporter: is this a political stunt? pres. trump: the city's unfortunately that are in trouble are run by democrats.

you have radical left democrats running cities like chicago and so many others that we just had a news conference. unfortunately, that is the way it is. that's the facts. when you look at chicago and you look at the job mayor lightfoot sent me a letter yesterday. i think in their own way, they want us to go in. there will be a time when they want us to go in. right now, we are sending extra people to help. we are arresting a lot of people who have been very bad as far as the coronavirus, as you say, i think we have done some amazing things. i think you will probably see that if you compare our statistics to other countries. and if you look at death rates, etc., you will see, and especially into the future with what's happening, you will see some very, very impressive numbers for the united states. president, do you plan to do a national strategy to help schools reopen and reopen safely?

regarding the children in your family, your son and grandchildren, are you comfortable -- do you plan to have them back in person in school? pres. trump: i'm comfortable with that. strategy. a national as you know ultimately, it is up to the governors of the states. i think most governors, many governors want the schools to open. i would like to see the schools open, especially when you see statistics like this. we have great statistics on young people and safety. we would like to see schools open. we want to see the economy open. we just had a report literally as i walked in that we set an all-time record on housing price increases. up 21%. which is a record that has never happened before. that is a great sign. we have an economy that is going to be booming. it's going to be a lot of jobs that are going to be produced. job numbers will be coming out shortly, over the next week or so. i think it will be a

continuation of the last two months. the last two months have been incredible. i think we will have a great economy. i think you are going to have a good third quarter when the out. quarter numbers come interestingly, they will be announced before the election. they will be announced around november 1. yeah, i would like to see the schools open. open 100% and we will do it safely, carefully, but when you look at the statistics i just read, having to do with children and safety, they are very impressive. they have strong immune systems. reporter: you understand children who go to school and then go back home with their grandparents, there is a real risk. pres. trump: they do say that they don't transmit very easily. a lot of people are saying they don't transmit and we are looking at that. we are studying very hard that particular subject. that they don't bring it home with them. they don't catch it easily, they don't bring it home easily, and if they do catch it, they get better fast. that is a factor and we are looking at that strongly.

we will be reporting that over the next week. reporter: at least three governors today came out with new orders on masked requirements. is that something you wish all the governors would do? pres. trump: a lot of the governors, they have different requirements. some of the governors are very strong on masks. others are not. i think it is really going to ultimately be up to them. we have given them the facts, everything we know. they have their own facts. some are strong on masks. some aren't in the same ballpark . i think all are suggesting if you want to wear a mask, you where it. i have one, i've worn it. i think when i'm in certain settings like hospitals and when i'm close -- when you cannot socially distance, i believe in it. do i? i do. i have it. thinktain instances, i you want to travel with a mask there there are instances when you can use it.

i would believe it would be a good thing. reporter: a mayor came out with an order today, and it does not apply to federal properties. but would you encourage federal properties, including the white house complex, to follow the order? pres. trump: we are going to make a decision over the next 24 hours. we will let you know what that decision is. reporter: do you agree with republicans that the possibility of extending short-term unemployment insurance today, so that they prevent benefits from expiring? pres. trump: i think a lot of politicians are discussing, republicans, democrats. and a lot of my representatives are on the hill and they are discussing cares act or phase four. i think ultimately, something good will come out of it. the economy is starting to really come back strongly. when you look at the numbers, even with the fact that like california is still closed up and many big states, i think the

numbers are more impressive considering some states like california, big ones, are pretty well shut down. we expect to have something over a periods of time. much.er: thank you very two questions. today, you said you are sending federal law enforcement officers to run cities run by screen politicians, a word you use, who happened to be all democrats who supported black lives matter protests. pres. trump: no, i said democrat politicians. these are the cities where you have the problem. if you look at chicago, if you look at detroit, look around any of the cities where we have the problems. we are sending them help. but we are really waiting for them to call for the big help, for the big numbers, for the large numbers of people that we have ready, willing and able. you look at chicago where 14 people were shot yesterday, where over the weekend, many people died and many people were shot, and over the last month,

they are setting record numbers. we are waiting for the mayor, respectfully, and other mayors, and governors, to call us. we are ready, willing and able to go in there with great force. we also have people going in and arresting drug dealers, arresting some of the shooters that are doing the shooting, we know who they are. we are working with police forces. even though in some cases they are told don't work with the federal government, the police forces have great respect for the federal government of what we do. we are ready, willing, and able to go into the cities that are being decimated with shootings and we are going to help. reporter: i have a question on crime. i don't think we have gotten an explanation yesterday on why the health experts are no longer joining you in these briefings? pres. trump: because they are briefing me, i meeting with them, i spoke to dr. fauci, dr. birx is right outside. they are giving me all of everything that they know as of

this point in time. i'm giving the information to you. i think it is probably a very concise way of doing it. it seems to be working out very well. involved,ery much they are very much with the relationships that are all very good. the relationships that we have with the doctors, with everybody working on the virus has been extraordinary. kaylee is here, and i think you would say the same thing. go ahead. 2016, you said it was president obama's fault that homicides were up in chicago. why was at the president's fault then but it is not your fault now? pres. trump: chicago is a disaster. the mayor is saying don't come in. the mayor is telling us not to come in. at some point, we can void that if we have to. and we may have to. because it is out of control. i assume she is saying that for political reasons. i think it is negative political reasons. she is a democrat.

she's a democrat. she's making a big mistake. people are dying in chicago and other cities and we can solve the problem. they have to ask us. reporter: why was it president obama's fault in any 16? pres. trump: because president obama was invited in and he did a poor job. president obama could have gone into chicago and solved the problem and he didn't. in our case, they don't want us in. we can solve the problem easily. we are equipped with the best equipment, the best people, and you see what we are doing. portland was coming down. it was busting at the scenes. we went into protect it all. those federal buildings are totally protected. portland is a very different place than chicago. but chicago should be calling us and so should philadelphia and detroit and others, to go in and help them. when you are losing many people a weekend, many, many people, you see the same numbers. when you are losing these people, they should call us and say "come in." it's incredible to me that they are not doing it.

at some point, they will. at some point, we made have no other choice but to go in. reporter: are you looking at closing further chinese embassies in the united states? and did you ask ambassador woody johnson to bring the british open to your turnberry property? pres. trump: i never spoke to woody johnson about that. turnberry is a highly respected course, one of the best in the world. i read a story about it today. i never spoke to woody johnson about doing that. as far as closing additional embassies, it is always possible. you see what is going on. we thought there was a fire in the one that we did close. and everybody said there's a fire, there's a fire. i guess they were burning documents or papers. i wonder what that's all about. how about one or two more. reporter: do you have a response to joe biden who set -- who described it as the first rate to be elected president? pres. trump: it's interesting

because we did criminal justice reform, we passed criminal justice reform. something obama and biden were unable to do. we didn't opportunity cities. we did -- if you look at what we have done with opportunity zones, nobody has ever even thought of a plan like that. the china plague coming in, floating in, coming into our country and really doing terrible things all over the world, doing terrible things, we had the best african-american, hispanic american, almost every group was the best for unemployment. the other employment numbers were the best. so you look at employment, you look at opportunity zones, and maybe most importantly, you look at criminal justice reform. you look at prison reform. i've done things that nobody else -- and i've said this, and i say it openly, and not a lot

of people dispute it. i've done more for black americans than anybody with the possible exception of abraham lincoln, nobody has even been close. thank you very much, everybody. shery: welcome to "daybreak: australia." you have been watching president trump as he gives us an update on the virus pandemic in the u.s. you touched on it -- on everything from police reform to the stimulus package, even to china and the closing of additional consulates. he says it is always possible. of course, the focus was on the virus, infections across the u.s. where he cited the black lives matter demonstrations as a reason for the surge in infections. he also talked about pfizer being a winner after that vaccine deal with the government ordering up to 600 million doses of that vaccine. let's discuss all of this with our white house reporter, jordyn fabienne who joins us from washington.

great to have you with us. the president also saying that those mask mandates will be ultimately apt to governors. it seems that the tension between states and the federal government is again at play. jordyn: yeah, and a lot of people in washington have been talking about the change in the president's tone. but we are not seeing a change so far in his actions. he has hesitated to impose a nationwide mask mandate, but the cdc says could help close the coronavirus. the president is doing his press briefings once again, trying to highlight the things that the administration is doing, claiming he has a national strategy to fight this. at this specific level, he is leaving many of the decisions up to state and local leaders. we also heard president trump briefly comment on the closure of the chinese consulate in houston, saying it is always

possible that more diplomatic sites across the u.s. could be closed. what is the latest from the state department and the reaction from beijing? secretary of, was bellicose today in describing why the united states to scrap -- decided to close the consulate. saying there was activity there that they'd did not like. you also had marco rubio, the florida senator, suggesting there may have been some inappropriate activities going on. he did not specify what. in china is responding that they could take a reciprocal step, that they could possibly close u.s. consulate in mainland china or elsewhere. this would seem to escalate the situation that has already been inflamed by the coronavirus and also with what has been going on with hong kong and the population in china. jordan fabian there on

the escalating u.s.-china tensions. we will get more insight on these tensions throughout the day. we will hear from the former u.s. ambassador to china who will be with us. the united states -- she will be joining us later. don't miss out on another big interview later on bloomberg markets. mattea's gorman will be with us live from canberra after the budget announcement. that is 1 p.m. in sydney, 11:00 a.m. and hong kong. shery: tesla extends its profit streak, paving the way for inclusion in the blue-chip s&p 500. we will discuss that with a company that has money invested intact and media. wells fargo securities and a hand joins us with her outlook for markets and why she says this stage is set for the equity rally to continue at least short-term. this is bloomberg. ♪ this is bloomberg. ♪

shery: u.s. stocks rose to a

five-month high despite escalating tensions between the u.s. and china and the steady march of the covid-19 pandemic. anna han's wells fargo securities and joins us from washington. this chart showing how much fed support is out there. the balance sheet continuing to grow alongside the s&p 500 rally. given this backdrop, is there nowhere else to go but up? anna: it looks like it. with the expanded balance sheet like you mentioned, to grow even bigger, it is going to help push equities higher. it will push the risk seeking and what we have been calling for is a stop. you are starting to see that pick up steam. potentiallythen derails the melt up? is there anything absent to signal that the tapering that we know we will not get from that at this point that will stop this?

anna: i don't think it is going to be anything like you say on the central bank side. a big risk really and the number one risk has always been, it escalates to the point where we need to fully rollback these re-openings. and the impact on those rollbacks is large enough to really collapse consumer confidence, collapse that retail sale, and bring down and put us back in that march state. we really think that is a low probability. so other than that, we are looking at domestic political risk in elections. shery: we have tesla officially on its way to joining the s&p 500. the regent -- reason i mention tesla is because we've seen volatility with the vix staying above 20 -- above for some time. the addition of tesla, will it add to this volatility, given how much retail investors could crowd the stock? anna: it is particularly concerning. we know tesla is one of those

click bait hot names that you have seen. in general, in context of it being added to the s&p 500, how that makes is in and diversifies is still yet to be seen. withix staying above 20 the economy still recovering, it is not surprising. if you remember, it has come down a lot since the 80's we saw. the decay actually seems on pace with what history would suggest. you see other upsides for the stay-at-home stocks? anna: there definitely could be further upsides seeing that there are still concerns and with the virus cases increasing in certain areas, stay-at-home is looking like it will be continuing for longer. for some, may be permanently. for us, that is not where we think we will be the winning trade. shery: what could be the winning trade, other than just a growth stock that we have continued to see rally? anna: besides the growth stocks,

we have to take another look at the value side. for us, especially, the higher risk. if you look even quarter to date, the s&p is up nearly 6%. small caps have also outperformed. in addition to that, tech has trailed. in fact, industrials, one of the good value spaces we were looking at. that has led -- haidi: wells fargo security equity strategist anna han there with us. 15 million cases will hit the grim new milestone as a record daily infections hit countries around the globe. we will get the very latest. this is bloomberg. ♪

has anthe world unwelcome milestone a 15 million coronavirus infections as australia, hong kong, japan and california report daily records.

some hope ahead as the u.s. has a pact with pfizer for a vaccine. let's get the detail from our reporter michelle cortez. let's start off with these new grim numbers. not only california even worse than new york when it comes to the new daily record, we are also seeing record debts in texas. we just heard from president trump who continues to talk up testing in the u.s. where do we expect this to go from here? in the beginning, we were talking about this is a situation that we are seeing more infections, but lower fatalities. is that still playing out? michelle: no, you are right. we are now starting to see an increase in fatality. the death rate is increasing south.the that is something public health officials told us to be ready for and now we have seen it, bringing it back to the issue of testing, what we are seeing now is accelerating numbers of cases. at some point, it will get beyond testing.

there's going to have to be steps to be taken to get this increasing case number under control, and simply testing will not be helpful with that. shery: president trump also talking about pfizer being a winner after that vaccine deal. is pfizer the leader when it comes to that potential injection? michelle: pfizer is not necessarily the leader when it comes to bringing a vaccine to the market. we do have three companies now that are pretty much moving in lockstep. one starting trial this month and one next month. the pivotal trials will start after that. what pfizer has done is it has set a ceiling for prices for the coronavirus vaccine. it is going to be charging $20 a dose, it is most likely that we will need two doses of that vaccine, should everything work. that is a big question mark. now we know it will be about $40 ticket protection against this virus, if it actually does work. the other players coming along after will have their own

negotiations with the u.s. government and other governments. prices will probably only fall from there rather than rise. shery: our health care reporter michelle cortez in minneapolis with the latest on the vaccines and the coronavirus pandemic. let's get a check of the latest business flash headlines. kathy specific is delaying new airbus planes for as much as two years as it covers with a virus led collapse of air travel. deliveries of a350 jets are being deferred to 2023 for next year. new a320 one neo deliveries may wait until 2020 five. abouts talking to boeing delaying reception avenue 777x. the move could cut the carrier's cash losses in half. saysts from germany mercedes parent is going to take cost cuts before the pandemic which could mean the loss of 28,000 jobs. we are told it has raised its saving target to the equivalent of $2.3 billion. daimler will give a clear

picture of earnings later thursday, a week after reporting a preliminary second-quarter loss of almost $2 billion. tesla reported a fourth consecutive quarterly profit paving the way for it to join the blue-chip s&p 500 index. the profit was $.50 a share, beating a forecast of a loss of more than one dollar a share. revenue fell to over $6 billion. that is still more than estimates of $5.4 billion. the results were further boosting the lofty shareprice which has quadrupled since march. haidi: we are just getting updates out of evolution mining. new gold output. beating expectations and their copper output also vastly beating expectations. this as we see these rallies continue when it comes to precious metals as well as that heated rally in copper prices. they are also reporting

significantly when it comes to that gold output production beating expectations. evolution gold also being reported pretty robust number there as well. lots more to come on "daybreak: australia." this is bloomberg. ♪ 49... 50!

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shery: china has vowed to retaliate after the u.s. forced the closure of its houston consulate. it is one of the biggest threats to diplomatic ties between the countries in decades. tom mackenzie joins us from beijing. we have seen several actions coming from the u.s. and beijing responding with a really subdued, measure response. what are we expecting this time around? tom: in terms of the rhetorical response from china, it has been very fierce indeed. they describe this as an

unprecedented escalation by the u.s. they said it will sabotage china-u.s. relations, and they have promised or vowed firm countermeasures if the u.s. does not revoke its position to close the consulate in houston. the most obvious steps for china going forward would be to retaliate by closing one of the five consulates that the u.s. has on the mainland here in china. you have got consulates in guangzhou and wuhan. the editor of the global times has suggested wuhan could be the consulate they decide to close. they also have services in hong kong that serviced thousands of americans. if china wanted to up the ante, they could close the hong kong consulate as well. potentially, that is an option. as you rightly say, in responding to u.s. actions over the last few months and years, china tried to be proportionate and we would expect that to be the same this time going around

as well. china has also accused the u.s. of harassing its diplomatic staff in the united states. also chinese students. u.s. law enforcement officials have been forcing them to hand over electronic devices, so china is incredibly angered by this. the news is widespread in china. in terms of the pressure on beijing, it is certainly there for them to act. have wehat reasons heard from the state department for closing the consulate so suddenly? given it aave not whole lot of details so far. they talked about intellectual property, wanting to protect intellectual property and u.s. trade secrets. we heard from the state department that in the last few years, they say china has stepped up spying in the united states, influenced operations, particularly involving u.s. business owners and have also pointed to the threat they say by china. to some chinese-americans and

their families living in the united states. senator marco rubio, who was on the intelligence committee, he tweeted saying that houston is a "central node in the chinese, party'shinese communist spies and influence operations." years, in the last few two chinese citizens have been convicted of stealing energy industry trade secrets in houston. most recently in the last few days, the u.s. came out and accused two chinese members or citizens of working with beijing to steal research around the coronavirus vaccine in the u.s. so clearly, the influence campaigns and the spying of the u.s., according to washington, has been increasing. this is one reason it seems why houston has been closed down. we are seeing reports that the san francisco consulate, again, according to axios, is holding a research -- chinese research that the fbi wants to get hold

of. we just heard from president trump saying we should not rule out further consulate closers, that they are -- closures, that they are always possible for the u.s. side. haidi: our bloomberg markets co-worker, tom mackenzie, in beijing with the latest. we will get more on the geopolitical tensions throughout the course of the day. we will be hearing from the former u.s. ambassador to china and the united states institute of peace analyst be joining us asia."n "daybreak tesla sword in extended trading, paving the way for inclusion in the blue-chip s&p 500. we break down the results with our guest. this is bloomberg. ♪

>> you are watching "daybreak australia." i am karina mitchell with the first word headlines. mobile coronavirus cases top 15 million. the u.s. is the focus of the pandemic but infections are surging in brazil and the asia-pacific. countrywide cases increased almost 2%. fatality rates hit a daily record in indonesia. australia set a new high. brazil reported more than 67,000 new cases in the last 24 hours. worldwide confirmed covid-19 deaths are mere 620 thousand. meanwhile, pfizer's $2 billion deal to supply an experiment a

vaccine to the u.s. sets a price ceiling of about $20 a dose. that will affect how much other drugmakers may charge. their and bio intact say price tag takes into account public health requirements and claims their treatment would be 30% less then what other companies charge for a flu vaccine. hong kong reported a record 105 new local virus cases in what is being called the city's most severe situation, prompting health officials to expand protection measures. more than half the new infections are not linked to previous cases with untraceable spikes signaling hidden transmission is widespread. the health secretary says the epidemic has reached its most severe moment. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. shery: let's turn to tesla, reporting earnings after the bell on wednesday, posting a

fourth consecutive daily profit. the milestone paves the way for the electric car maker to join the ranks of the blue-chip s&p 500 index. joining us now to break down the numbers is the president and ceo . great to have you with us. we have another quarterly profit. free cash flow in the middle of a pandemic. results?g were the >> it is incredible what we have accomplished. we have an incredible impact. in toronto, the factory was shot for over four we expect to be able to run the factory in this environment was incredibly challenging. not only to beach your numbers, but to beat -- to be profitable in this environment. being shut down for a month just shows that the underlying strength of tesla's business is enormous right now and their execution has been phenomenal under the leadership of elon musk. let me turn a little bit

to the factors themselves. tesla shanghai production has assumed the role of growth engine, overshadowing the fact that we are not seeing that much growth in the u.s. market, which is pretty mature. is it a little bit problematic that perhaps they are relying on lower prices, perhaps even some cities in china, and how sustainable can that demand be? ross: no, i do not see that at all. i see china as the biggest ev market in the world and china has an environmental problem so they need to have ev's be successful and they are very much supporting tesla and doing that. tesla's ability to have a willing consumer and great suppliers, all in the same place, makes the shanghai factory just an enormous asset for them in driving not only ev innovation in asia, but just the adoption of ev. tesla is not saturated in the united states by any means. i think their production

constrained in the united states -- they are production constrained in the united states. haidi: how much risk do you assign to the operations in china given how dependent tesla is and what is going on with u.s.-china tensions, particularly as we know one of the things beijing could do is step up protectionism and push their own made in china brand? look, china is a lot smarter than the u.s. government currently, and the bottom line is china has never acted in a short-term manner. china is a long-term player in everything it does. there should be no conflict between the u.s. and china longer-term. this was solely created by trump. trump will be gone in three months and we will restart these negotiations from an actual place of making progress versus some sort of blackmail to try and get him reelected.

the chinese have been very patient dealing with trump for the last couple years, and hopefully, we will be able to have a much more, much more productive business environment moving forward, so i am super bullish on the biden administration making amends with the chinese so we can have a much more productive global trade environment. a lot of people say that -- ross, let me get your view across the rest of the text complex. you're pretty bullish across most of these tech names, even when it comes to netflix, which for most of the market, was disappointing last week. what do you like in particular? the enterprise facing, retail facing like apple, or is it really both? ross: well, no. what we like is the digital economy. what we are seeing now because of coronavirus is mass adoption of digital economy. the more digital you are, for example, microsoft and netflix,

the more profitable you are. microsoft just put up great numbers. the more reliant you are on retail sales and/or ad revenue, the harder your business will do. the twitter and facebook and snapchats are having to struggle to get ad money even though they have a lot of user engagement. they make their money from the ads. apple is somewhere in the middle. business andreat some great products everyone needs in this era but they also have a lot of retail sales that will be affected and global sales that are affected and their products are expensive. apple weay mutual on owned all the stocks other than twitter and facebook, but i am very bullish on technology. i am very bullish on non-at revenue technology. d-revenue technology. investors getnew

into tech stocks right now given the valuations? ross: this is a tough market to get into right now. we are bearish on the markets, bearish on the economy, so i would say that all investors need to be conservative, but for the stock portion of your portfolio, technology stocks are the ones making the money, so you can find value. maybe they are not that cheap. i think you have to go for the companies that have rising ems. these are still going to be the big winners out of coronavirus, iswhatever allocation incredibly conservative. it still should be in companies that have the greatest reach. haidi: really appreciate your time, ross gerber. nasdaq's stock jumped 2.5%

yesterday on better-than-expected second-quarter revenue. the ceo says the environment for retail investment has been good for several years. she spoke with us about the democratization of markets and how chinese public listings in the u.s. may change in the near future. i certainly think that the environment for retail investing has really been pretty great over the last 10 years, frankly. i think the fees retail has had to pay to be able to enter the markets, the democratization of the markets by allowing them to have direct access to the markets over the last 10 years to 20 years has really been a key trend that has driven the u.s. markets, that i do think that is a longer-term trend, the fact that the commissions have gone there has driven more demand within the retail environment and retail investors coming into the markets this year. >> is a free lunch? this is -- is it a free lunch? i go back to his respect for the

individual investor 30 years ago. is it a free lunch? schwab says it is free. td ameritrade says it is free. is it a free lunch? all, it really is free for retail. that he really was on a mission to make it so we democratize access to the capital markets and he went a long way in that regard. the online brokers have done an enormous amount to create services that benefit retail and i do you think that at the end of the day, they are getting a good experience. the spreads in our markets are extremely narrow which means they are getting good executions. they are not having to pay commissions against -- to the retail brokers to gain access to the markets. it really is free access. might bereads narrow. here,re filing for ipo's trading without the same types

of oversight that u.s. companies face. >> that is something we have been in active dialogue with about. we encourage them to have a round table with the experts. the underwriters, accounting firms, the lawyers, the fcc itself, nasdaq, and all the ages, we play a great role together to make sure we create the right disclosure regime for companies coming to the u.s., including companies from china. there are differences in terms of the disclosure obligations that companies have coming from china as well as reduced oversights they have on the accounting firm set that supports these companies. that is an area we are focused on and trying to create positive change. that requires some diplomacy between the united states and china, something we have been encouraging them to focus on. >> you have been incredibly proactive about all of the spear can you walk us through what

exactly you have done specifically? >> we have definitely had some concern we want to make sure we can play our role in addressing, so we have increased our oversight of the accounting firms that are being used by the chinese companies. we normally really rely on the fcc for that, but at the same time, we want to make sure we have some oversight over the quality of accounting firms being used. we are requiring at least one member of the management team or a consultant to the management team to have u.s. public company experience in the third thing is we have actually increased the public requirements for companies listing from china, and all those three things are things we can achieve but it is a broader ecosystem issue that we are trying to make sure that the government is working with the chinese government to address. >> the backdrop for this, folks, it's really important. alibaba, cayman islands, positioning. etc.. you have the recent wire card train wreck in germany as well.

this is really important. to you and your other markets. do you feel the fcc is abrogating its duty? >> i think the fcc has an anonymous amount of responsibility and they take it extremely seriously in terms of the disclosure obligations on companies that choose the united states. they do an excellent job of managing the- disclosure obligations and being proactive in writing back questions and comments for companies with their filings. it is a huge part of their role. come, australia is preparing to announce its biggest budget deficit since world war ii. we will discuss the implications with anz chief economist richard. this is bloomberg. ♪

haidi: the australian government will deliver an economic and fiscal offset since the second world war. the second wave of infections delays any kind of pivot in stimulus towards recovery. let's take a look at the implications of august. we have the anz chief economist. we know broadly what we are expecting today. the treasurer has called it potentially eye-watering. does the development as we continue to see record numbers

out of victoria change your assessment of how the recovery, any kind of tapering plans could go? >> it probably has changed things a little bit, to be honest. they said a similar forecast profile was a sharp contraction in the second quarter. the beginning of the government's fiscal year. that big balance in the third quarter now -- bounce in the third quarter now is half what it was thought to be previously because of what is happening in victoria. it changes the profile a bit for the forecast and puts a bit of downside risk on the growth forecast. and probably on the budget deficit for the 2021 fiscal year. australia price for that recovery? we know tourism and services are unlikely to be picking up before any kind of travel restrictions and border closures are used. do you expect resilience within domestic retail and what about

the trade front given we are continuing to see commodities prices hold up? story hasmodities been very fortunate in regards. they continue to struggle for quite some time to alternatively, the closer we can get the domestic economy back to health, the more will see australians traveling within australia, which will replace at least some of that tourism spend , and as you suggest, from an external perspective, they are doing well. shery: how much will the extension of the jobs stimulus package help and what is this really telling us about the stance of the government now that we have this resurgence of virus cases in melbourne? richard: look, i think the government's response is a really important point. we have some extension of the program and our forecast. it never looked likely that the programs meant to expire at the

end of september would just be allowed to expire. that fall native effect washed through the economy. everywhere,rnments not just in australia, have been really responsive to the virus. if the virus gets worse, they are upping the stingless programs and i think that is one reason financial markets, despite the virus news on the back of it, financial markets continue to trade relatively well. shery: especially given the possibility that perhaps there might be some upside surprises. we have seen iron ore prices remaining elevated. it is not just iron ore. the economic data generally through this crisis has only surprised on the downside for very short periods. this is very different from the two thousand eight crisis when we saw economic data surprise on the downside for quite a long period. we understood the scope of this crisis much earlier. the activity is still weak. thans not been weaker

expected and we have been well calibrated as a response. haidi: we have seen strong demand for australian sovereign debt. we have seen the dollar climbed 30%. two parts of the question. is the rba comfortable with the aussie above 70 u.s. cents and does this suggest that at least, you know, from foreign investors from the outside, that those expectations that australia's economy relatively is coping 30 well? --coping pretty well? richard: i suspect so but you can also look at economies like korea and some others in asia that are relatively well. i don't know that the currency is necessarily a vote on that although it necessarily is to some degree. we have not had a genuine global squeeze.y the response from the fed and other major central banks have defrayed that risk. i suspect the rba, all other

things being equal, would like the currency a bit lower. the fact that the economy has they cannotcovery, argue the currency as far out of line of where it should be even if it might look a little bit expensive. haidi: great having you with us. richard yetsenga. more on australian the coming hours. don't miss interviews with the former prime minister on bloomberg markets. quick check of the latest business flash headlines this hour. bhp is facing the biggest class in u.k. history as 200,000 claimants look to sue over the deadly collapse of the dam in brazil five years ago. a court in manchester begins an eight day hearing on thursday to see if british judges have jurisdiction. 19 people were killed when it gave way. claimants in the class-action are seeking $6.5

billion in damages. a semiconductor unit is attracting takeover interest from nvidia. softbank has been options to sell part or all of its stake in arm. nvidia is said to have made an approach in recent weeks. couldle of u.k. based arm become the biggest ever deal in the semiconductor industry. the former head of the collapsed german payments platform wire card has been rearrested on claims that he and other executives hid losses as far back as 2015. executors say he and two colleagues conspired to obtain the equivalent of $3.7 billion in fraudulent loans. they allegedly inflated the books to make wire card look more attractive to investors. coming up in the next hour of daybreak asia, the former u.s. ambassador to china weighs in on what beijing is calling an unprecedented escalation in tensions with the united states.

he tells us where the diplomatic ties will go from here. south korea is expected to have slipped into recession in the second quarter. we have those growth numbers in just a couple of minutes. we are breaking them down with angela. what's more to come. this is bloomberg. -- lots more to come. this is bloomberg. ♪

shery: welcome to "daybreak asia." i am shery ahn in new york. haidi: i am haidi stroud-watts in sydney. we are counting down to it has major market opens. u.s.-china ties plummeted -- plummet to new depths. president trump will not rule out closing more diplomatic missions. --al coronavirus cases