>> good morning. we are counting down to asia's major market open. >> welcome. our top stories this hour. a big step toward the next them as package for the u.s. republicans lay out their $1 trillion plan for the next stage of recovery. global coronavirus cases top 16.3 million.

sovereign wealth result,orts the worst warning things could get worse. let's get started with a quick check of markets, setting up for trading. here is sophie kamaruddin in hong kong. >> we are seeing the s&p edging slightly higher. stocks, picking up across the region. etc. on the lineup today. you have gold trading steady. consolidating around an all-time high. we are watching for a push toward 2000. check out silver, extending , features flirting at the

25 level silve' rally outpaced gold since march. the ratio has fallen below 80. they expect a drop to 70. but gold is still looking overvalued against silver, at around 60. morgan's are expected for metals. -- more gains are expected for metals. new lows are seeing on dovish seen on dovish fed bets. the u.s. dollar remains weaker. the dollar is hanging by a thread. >> senate republicans have finally released their stimulus plan, which they say was delayed due to indecision.

on a newons are taking urgency. emily wilkins joins us now from washington. what is the latest we know in terms of the negotiations between the two sides? >> today was the day senate republicans finally released their bill of what they would like to see in the next coronavirus stimulus. we have been waiting for this since may, when democrats passed their bill. republicans wanted to see what happened with the economy. they are coming out with a $1 trillion bill with payments for schools, americans. a lot of stuff in there. democrats are saying it does not go far enough. i am sure we are going to see them trying to make sure that the bill has funding in it for american businesses and families and individuals. >> mitch mcconnell, calling this

bill a starting place they cannot pass without democrats. what are we expecting in terms of which areas the democrats and republicans can actually compromise on? >> we are probably going to be seeing this play out over the next two weeks, perhaps a little bit longer. lawmakers are scheduled to be leaving d.c. and going back in mid august. we have two weeks to get things done. as far as the agreement, another round of payments are there for americans. funding for schools is something we have heard. we are also going to be seeing some sticking points, democrats have really been pushing a lot of aid for states. republicans are looking to protect businesses from lawsuits, the coronavirus. those are potential sticking points for negotiation. >> what about the supplemental unemployment benefit? >> that ran out this past

friday. that was that extra $600 a week people on unemployment were getting. democrats are proposing to keep it. republicans wanted to go down to $200 for the next the months. -- want it to go down to $200 for the next few months. democrats are certainly going to try to get that up. republicans have said it needs to be at that level to encourage people to continue to try and find work. >> emily wilkins, with the latest on the next round of stimulus measures here in the u.s. still ahead, the sierra investment management's

chief investment officer says defense matter. find out why ahead. we have more. this is bloomberg. ♪

you are watching daybreak: asia. global cases of the coronavirus are now approaching 16.5 million. inections have slowed florida and california. -- in the u.s., infections have slowed in california, arizona and florida. in europe, health officials are worried about a new cluster of cases after in outbreak at a farm. more than 170 workers tested positive. the employees have been put under a mandatory quarantine. hong kong is introducing strict new virus curves as cases continue to surge. the city will ban all dine in services at restaurants and all gatherings of more than two people not from the same family. masks will be made mandatory and outdoor areas. -- in outdoor areas.

this is hong kong's third round of tightenings in three week. the city reported 142 local infections monday. a sixth straight day with more than 100 cases. rodrigo duterte has signaled corporate tax cuts for pandemic-hit industries. he will revitalize his plan to lift the economy. the philippines propose one of the longest and strictest virus lockdowns, but also shows the second highest numbers of infections in southeast asia, at about 80,000. singapore's sovereign wealth fund reported its worst result in more than a decade. it is warning things could get worse. reported a return of 2.7%. the worst performance on that metric since 2009. when the fund lost over a fifth of its value in a single year. gic's one of the world's biggest dealmakers.

one estimate putting its total assets at $440 billion. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. ' counterpartss closed higher. the fed will reinforce their dovish message. guest says defense matters more now. terri spath. are you sure you will get monetary and fiscal support? >> i do think that is what has led to the support we have seen

in the market so far. thank you for having me. it is good to be here. the economic data is absolutely disastrous. the profit outlook is not so great, either. we have seen this big rebound in the stock markets in the u.s., particularly, the reality is that the fed has proclaimed that they are going to keep the french press -- the printing presses rolling. creating this all-you-can-eat buffet. our view is the data to support this. expect volatility. expect drawdowns going forward. the bottoms may be in for the year, but we do expect volatility in the future. >> in the meantime, with all of easing, not to mention the rescue package, we have seen pressure on the u.s. dollar this chart, showing this hanging on by a thread when it comes to the support

level for the dollar. what does that spell out for emerging markets, and the broader picture going forward for stocks? >> i'm glad you brought that up. i do think there's a couple of things going on that have propped up the stock market. because --ernative, there's no alternative, because interest rates are so low, and the central banks are doing so much, stocks seem like a great place to go. but we would like to point out to the listeners are -- of our show is what we are other opportunities with payinge sense attention to defense. one of those is emerging markets' debt in particular. yields are roughly 4%. we think that looks attractive

compared to emerging-market equities from a defense point of view. >> which debt markets would you be specifically looking at? what we would encourage people to do looking at amd is managedat the actively mutual funds out there. there were so much that the one with the currencies, whether something is denominated in dollars, etc. what we have been at the getting is brought funds in a in this assetpate class to get nice gains that still have some cushion on the downside in terms of the interest payments that you get. they also do not follows quickly -- fall as quickly as u.s. stocks, for example.

defense really matters for us. volatility matters. drawdowns matter. we would at the gate for an actively managed fund -- advocate for an actively managed fund. on wheres your view the greenback goes and how much federal weakness we can expect? >> it is really hard to make a prediction on interest rates or on the u.s. dollar. the u.s. dollar definitely matters when it comes to a lot of different things. if you are looking at emerging-market debt, for example, it is generally a weaker dollar that can help those issuances. we have seen a lot of weakness in the u.s. dollar. we have interest rates that have a lower for longer environment to a lower forever. that has put in some weight on the dollar, which can also help in this type of market.

>> another theme that has played in has been that huge rally growth stocks, tech giants. techs, we have the hang seng tech index launching this week. the components are similar. how interested are you in the asian tech sector, given that we have continued to see this rally in the u.s. tech giants, as well? >> there's been a huge rally in technology. if you are just looking at sectors, it's been the place to be. there is still so much risk out there. not just on the things we have talked about from an economic standpoint or profit standpoint,

but even here in the u.s., we have presidential elections coming up. i think i would just caution these go-gome of areas of the market that are really tempting and had these huge run ups. i think there will be better opportunities in the future. why? i do think the bottoms are in for the year, but there is absolutely going to be continued volatility. there will be opportunity to take these things up at lower levels than where we see them today. terri spath, always appreciate your time. singapore's sovereign wealth fund has reported its worst return since a financial crisis. break down that result next. this is bloomberg.

>> singapore's sovereign wealth

fund gic has reported its worst return since a financial crisis. it is warning things could get worse. we have more from singapore. what numbers are we looking at for gic? 2.7%.are looking at a 3.4% last year. this is the worst since 2009. it was not because the markets be expected.would the funds have already become more defensive due to high valuation, geopolitical uncertainty. it is more because the dot-com bubble fell out of the investment window. that pushed performance lower. looking forward, it is not looking encouraging. gic, not too upbeat about a comeback globally.

it is the timing, the ship of the recovery highly unclear. -- the shape of the recovery highly unclear. a lot of things to consider looking forward. >> is gic tweaking it strategy? how is it positioning itself as volatile market? >> this is not the first time it has warned about volatile markets. they have repeatedly warned of falling return caused by geopolitical tensions. faced whitenvestors uncertainty.- wide one key area is real estate. gic is one of the world's largest property investors. they remain committed to that, but they are reassessing other areas which are deemed

vulnerable, offices, hotels, shopping centers. it is also looking at investments in student housing. they are hunting for potential whims amid the u.s.-china trade war. >> just how much dry powder does gic have? >> you know what? they say they have plenty of dry powder to make investment opportunities. the manager over $100 billion in assets. but it is estimated that holdings have been closer to 440 billion. gic is one of the biggest you makers in the world. they say some opportunities came about when the market for us crashed in the wake of covid-19. these have quickly evaporated, because government stimulus packages continue to send valuations soaring. what it is looking to do now is look for potential partners in s in larger countries,

like china, where domestic tourism could receive a boost. spots and areas it wants to invest in. check of thek latest business flash headlines. founder and the company cfo have been named in a federal probe over accounting practices. they received a notice from the fcc, which may file an overcement action 2016 allegations. under armour plans to defend any allegations. earlier this down year amid lackluster sales. intel, announcing its chief engineering officer. lastly, the company said the latest technique for building the most advanced semiconductors

was a year behind schedule. intel's chief engineering officer will leave the company on august 3. intel says the change will accelerate product leadership and improve focus and i can ability -- and accountability. >> google has pushed back the reopening of its offices as the coronavirus continues to rage in parts of the u.s. the company had previously said workers could stay home until the end of the year. the directive applied worldwide. google send workers home in march at the start of the pandemic. europe's biggest tech company rose 3% in frech for monday after it announced plans to survey ipostomer units. question plan explains why sap is selling a stake less than two years after buying the firm called tricks -- firm,

qualtrics. >> they performed far beyond all the expectations at the point of the acquisition. now, three months back, when i became the ceo of sap, we discussed options about how to move to the next level. both been fully convinced it is a win-win situation for both sap and qua ltrics. it will allow qualtrics to focus non-sapon- -- customer base. ll remain fully committed to experience management. we will develop further cases for our customers. of course, how to continue going to market. sap is fully committedand highly committed to qualtrics and will remain a

shareholder of qualtrics going forward. >> with that structure, do you expect to be able to compete with salesforce still? which was the rationale initially of acquiring q ualtrics? >> we launched the human experience management, which helped with the sales of qualtrics. we did the same for commerce. we expanded experience management across our portfolios. we are very excited about that. we see the benefits for customers. this will not change with the idea. we allow more otani to go after the market -- more autonomy, to go after the market. riskestion, is there a

that investors will see flip-flopping or like of clarity around strategy? not just because of this change rics, but also the fact you have gone from a co-ceo to a ceo structure? >> when you look back into our last quarter, we are very proud of this result. it shows the resiliency of sap during this crisis. we closed 17,000 license transactions. sap isows how resilient in this market. customers are increasing their resiliency with sap. sap is more relevant than ever in this crisis. our free cash flow is up 59%. to tightly manage

bottom line, and at the same time, also invest into our future. we are doing this now out of a position of strength. sap ceowas the speaking to bloomberg earlier. let's get you a quick check of markets. we do have the latest on the virus outbreak coming up next. ofhave these expectations health officials around the world grappling with renewed outbreaks. however, some hopes of vaccine development in this large-scale trial being conducted by moderna. we are seeing u.s. futures and asian futures sitting in the greens amid this continued relentless rally not just in gold, but also silver prices. more than doubling from the march low we have seen.

new zealand, also treading higher by 3/10 of 1%. this is bloomberg.

karina: you are watching "daybreak asia." senate republicans have presented their plan to bolster the pandemic ravaged u.s. economy. the bill would trim unemployment to most americans and she'll businesses, schools, and other organizations from lawsuits arising from covid-19. it is the first step towards negotiating a compromise with the democrats, who offer their own $3.5 trillion solution. president trump national security advisor has tested positive for covid-19. the white house says there is no risk to president trump or vice

president pence. he believes he caught the virus from a family member. he has been isolating at home while still running the national security council, doing most of his work by phone. the international monetary fund approved 4.3 billion dollars in funding for south africa, the largest payment yet of any country to fight the virus. the money will be used to battle the spread of the disease and help the recovery efforts that follow. south africa has almost .5 million confirmed cases, making it the worst hit country on the continent. 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, over to you. shery: staying on the virus global cases have now surpassed 16.3 million with 650,000 deaths. while cases in u.s. hotspots have slowed, there's been a pick up in asia. yvonne man has the latest.

china reporting the biggest jump in cases since the end of the wuhan outbreak, when we already had 80,000 plus infections. what happened this time around? like the recent outbreaks were likely links to infections of people traveling now that domestic travel has boomed in the country for some time now. the infections on monday, 57 of which were local cases, 41 of which were in xinjiang, the western province. the rest were found in the port city. the cases have already spread to several cities across three northeastern provinces as well as the southern province of -- china at this point still undergoing the same playbook. they will be doing this blanket testing once again. they have done targeted lockdown restrictions. the capital of xinjiang, we have

seen bus and subway services have been shot, housing compounds have limited the number of people who go in and out. they have begun testing the population of 6 million people, and of course, china has done this type of massive testing before where they tested 11 million people in just two weeks time, so china now scrambling to try and contain this virus. it seems like it is more of a bit of a game of whack-a-mole as this virus continues in parts of the country. haidi: returning to hong kong as well where the governments had inmore restrictions -- add i more restrictions. yvonne: i went to the grocery store yesterday. you do see more people, more lines out there. outt of people cannot dine starting tomorrow in this latest round of measures. the third we have seen in three weeks, which is a big blow to the restaurant industry. on top of that, the city banning

public gatherings of more than two people unless you are from the same family or household. masks are now required in outdoor areas as well with only medical exemptions so even those exercising are not excluded. pools will be shut. we have seen a sudden jump in cases. no signs have let up yet. 142 cases on monday. this is the sixth day where new infections were above 100, 40% of which are still untraceable. compare that to before july, we were just dealing with cases that were never higher than 30 a day, so certainly, there is tension here in the city. as much as the government is trying to boost testing, expand quarantine facilities, and at hospital beds, hong kong was in such a long stretch where we thought we dodged a bullet. it is less that the government defends his low now and we are seeing the virus spread across

the city. yvonne man in hong kong with the latest of these new restrictions in hong kong. we are going to get more on the impact of these tighter restrictions in hong kong on business later with a co-founder of a company. newrna shares soared in york after getting a second round of funding and kicking off the first large-scale covid-19 vaccine study in the u.s. we spoke with the ceo about the timeline for getting results. -- timeframe. it is possible that -- october. that is not the base plan. that is the best plan. and then, when this happens, i , they based on the data could decide to give us emergency approval, and it will be available in the u.s. for people at the highest risk. the elderly, may be health care

workers. approval for the general population. what we have been doing at in may, we raise capital 2 invest in raw materials -- in may to invest in raw materials. as we speak, we are making as many vaccines as we can. with the goal of making 500 million -- maybe up to one billion doses in 2021. >> can we just talk about how easy it will be to attract the necessary demographics within the test? how easy is it going to be to attract those key demographics, the most vulnerable demographics, particularly seniors? are you struggling in that area? are people coming forward and wanting to take part of the test? stephane: it is a bit too early to know about phase three. what i can tell you is over the last week, we have had thousands

of people across the u.s. asking into the study. we have had people in diverse african-american and so on, which is important for us. we want to make sure the study has the right presentation from the core demographics in the u.s. that are at the highest risk. >> this might be a silly question, but bear with me. is your vaccine and antibody vaccine, t cell -- an antibody vaccine, t cell? stephane: it is a vaccine that b-cellsto activate both and t cells. neutralizing antibodies. the t cells are used for memory. what we have shown in the human studies that were published in the new england journal of medicine two weeks ago is that

-- neutralizing antibody, around four times more than people -- people that have been naturally infected. for thevery good sign vaccine. at the end of the day, -- every other company, we have to run the phase three to really know the full efficacy of a vaccine. guy: we are seeing other vaccines producing a t cell response. is this going to be one of the key differentiators, do you think, as to whether or not we get an antibody and cellular response? is it going to be one of the areas we are going to -- people who are going to receive it need to differentiate? stephane: people are very actively looking to those differentiations now because we do not have any more data. trying, fromis industry, the community, the regulators, to figure out what we know today, from the phase one study for those that have

corona phase one in published data, and only a few companies, just to try to get it. but the real test that everybody is going to have to go through is to run for the u.s. 30,000 participant study, 50 percent plus control, every other person getting the vaccine, every other person getting a placebo, and measuring the number of -- to e efficacy of the vaccine. phase three will be the real test for everybody. moderna's ceo, stephane bancel. we will speak with the head of japan research, chris for her, who sees a big operating loss. this is bloomberg. ♪

shery: a lot for investors to keep an eye on this week, whether it is earnings reports or just the stimulus package in the u.s. let's turn to sophie kamaruddin in hong kong for a check of the markets. focusing first on the commodities side, we are seeing the rally in precious metals continue with spot gold topping 19.50 an ounce and silver about $25 as the greenback falters at a two-year low. we do have the yen trading at a four-month high, steady around

made 105 levels with the dollar being sold against the euro and aussie. the euro holding a seven-day gain with leveraged shorts being scaled back. check out the offshore yuan back below the seven handle. switching out the board, hang seng futures did set a higher after a down day for the benchmark, which saw hsbc extended its drop to a 1996 low and tencent lead tech lower on the day. we are keeping an eye on hong kong property players with the city's strict s&p restrictions which macy's stores suspend operations or close permanently. new zealand became the latest to suspend its extradition treaty. gains likely for the taiex. it has been key for that advance. we have been wanting to see if the kospi can follow suit with a breakout on intel's outsourcing. japanese chip suppliers are on

watch. tokyo electron fell on intel's update. it is to report earnings this tuesday along with kanaan and stantec. canon and fanuc. defaultsning that debt are likely to rise in asia with policy support expected to be more targeted when it comes to the pandemic spending, haidi. haidi: speaking of earnings, nissan set to report an operating loss that is more than expected for the last quarter as it reduces costs ahead of schedule, according to a bloomberg source. let's get more on the automakers prospects with the deputy head of japan research, chris richter. you have obviously read this bloomberg report as well. how do you think that the company will go? you say that would be great news, but it is really down to the quality and that ability of the cuts that they make. >> i agree with that.

we were surprised to see this. theprojection for -- by source in the bloomberg story was substantially better than we or even consensus are looking for today. some things done very aggressively behind the scenes that we have not seen, that is great news for the company. at thing is, we looked toyota's guidance. we were not far off the mark there. we looked at mitsubishi motors. we run the numbers the same way for nissan. so, you know, it doesn't surprise us so we are going to take a careful look at these cost cuts. it is my job as an analyst to be skeptical. we want to see the quality of the cost cuts and the sustainability of them. at the end of the day, this will be about the global demand story. the outlook is pretty depressed

for nissan and across the broader sector. christopher: it is still tough news. quite likely global auto sales will be off by more than 20% on year. that kind of fall is hard for many automakers to be profitable at. on our current numbers, in the japanese auto center, we only have toyota and subaru posting operating profits this year. everybody else we think we'll have an operating loss and a lot of this has to do with what kind of margins you went into the crisis with, those who were in a strong position are looking better. those who went in very weak like nissan are facing greater challenges. in andchina is the first the first out of the pandemic and whoever has big exposure in china will have the upper hand. when it comes to japanese makers, who are the most exposed to that market? christopher: toyota, honda,

nissan. toyota and honda in particular have been doing well in china. a lot of that has to do with the move -- a lot of buyers becoming second time buyers and becoming a lot more interested in resale value for their cars, and this is something that historically, toyota and honda have done very well that. shery: how much of that positivity could be offset by the japanese yen that continues to strengthen and has already broken through that 106 level in australia around 105? we continue to see strength. assuming 105we are for a long time. most of the makers in the market has that in their mind. it creates a slight headwind for them. fortunately for them, in china, most of the manufacturing happens in china. we don't have as much of a mismatch in costs and revenues.

shery: does the supply chain -- haidi: does the supply chain disruption, the dislocation we signed the earlier months of the pandemic, still way as a concern weigh as ard? -- concern going forward? christopher: most of the automakers have gotten their house in order as far as manufacturing goes, and their supply chains, granted surprises can still happen. second waves can still happen. for the most part, the problem is about demand. we still have a very depressed global vehicle market. the only market that is doing well is china. everybody else is down well into the double digits. you have the factory. you are all dressed up and ready to go but you have to be able to sell the cars you make. shery: christopher richter, thank you very much for your thoughts. another depressed market that we are looking at right now is aviation. ryanair saying it will keep

losing money through the summer after posting a loss of $217 million in the second quarter when the jets were grounded. the cfo told us he does not expect the company to start earning a profit until 2021. >> we are planning this year to carry 60 million customers in our business, which has a reduction where we had 140 9 million and as you rightly said, we had a very difficult quarter where we made 5 million. the losses into q2 are somewhat lower than we saw in q1. >> talk me through as to what impact that can actually have on the numbers. i know it is difficult to predict but if the second wave fears materialize to the extent that we start to see more quarantines imposed to other countries other than spain, does that mean potentially several quarters of losses? are notis year, we

guiding for the full year. we are not going to see profits in the current financial year. you will have to look into next year before you see a recovery on that front, and that is why it is hugely important. we ended the quarter with 3.9 billion dollars cash up from $3.8 billion in the previous quarter which puts it in a strong position as we go into the winter period. we have a lot of competitors receiving a significant amount of state aid, which i think is inevitable. we don't need cost selling from them, which will need to reduce fares. it is very important that the likes of ryanair -- we are doing that, getting our space into even better shape than it was, reducing our labor costs, our handling, working with goingcturers to reduce -- forward. what we are planning for these

kind of scenarios within the business, we would hope that the trace and track strategies put in place by governments will help stave off the second wave and huge lockdowns. we will see some kind of a vaccine either this year or early next year, which will give people a lot of confidence. that was the ryanair cfo, neil sorahan. hedge fund returns have trailed behind the s&p 500's rebound since the financial crisis. we will be discussing this new reality for a humbled industry, next. this is bloomberg. ♪ . ♪

shery: let's get a quick check of the latest business flash headlines. tsmc has become the world's 12 most valuable stock after soaring to the trading limit monday, adding 35 billion dollars to its market cap. the taiwanese chip maker shares were already 17% year-to-date before monday's jump. the latest boost came after intel said it may have to outsource production with tsmc expected to get some of that new business. tencent has offered to buy the chinese search engine in a deal that will see its purchase of all the remaining shares it does

not already own. tencent plans to take the company private and delisted from the new york stock exchange at a price of nine dollars a share. that is a 57% premium over its closing price on friday. tencent currently owns just over 39% of sogou. credit suisse could be set for a big windfall when jack ma and -- goes public. this was bank invested $100 million in the simtech giants last funding round in 2018 in a deal that was not disclosed at the time. that round put value at around $115 billion. in two years, analysts say it could be worth as much as $210 billion, which would be a 40% jump on credit suisse's investments. hedge fund fees had already been shrinking well before the pandemic rips through global markets, and now, they are in seemingly terminal

decline as managers go to extraordinary lengths to attract new money. be the standard for hedge fund fees but that has been changing over the years. what has really been the impact of the ? -- of the pandemic? is this something that has taken hold even pre-covid? >> it has been a downward spiral when it comes to fees for a number of years. it used to be a stable fixture for the industry decades ago when funds were smaller and return were greater. we have seen funds grow in size. feestors have objected and have fallen, and we have seen that over the recent period of years. what we are seeing now especially is an embracing of new models, where they can charge either 1% on assets, if it is a bad year, or 30% of profits if they perform well. we are seeing a lot more

concessions being made from hedge fund managers these days. one fund is doing away with performance fees altogether until data another says they will cover all losses. these creative things we have reflects afore lot of pressure on these managers. shery: what has been can contribute into the pressure on the industry, even pre-pandemic? contributingeen into the pressure on the industry even pre-panic? -- pre-pandemic? hema: they have pulled $55 billion. i will say as a caveat to that a number ofar adds funds that have opened up to new capital. we have seen inflows into these big specialty managers that are very coveted. that is still a smaller proportion of a broader trend we are seeing, which is generally a little bit of souring on the

space. is particularly challenging for smaller managers, and so, it is more difficult to launch a fund and we are seeing more funds closing than we are seeing launches and the number of launches we are seeing has slumped a bit, too. in general, it has been a challenge to industry. shery: tell us a little bit about some of the trends you are seeing, especially with those mega hedge, just quickly. hema: yes of course. some of the bigger funds, you are seeing them have to think about this reckoning. we have seen some big managers have to bring down there fees, too. so it is not just a matter of smaller funds, but there are some bigger funds that are hiding there fees, some outliers for this broader trend like de shaw and element capital. interesting right now. haidi: bloomberg's hedge funds

reporter hema parmar there. lots more to come. this is bloomberg. ♪

♪ >> good evening from bloomberg's global headquarters in new york, i am shery ahn. haidi: i'm haidi stroud-watts. welcome to "daybreak: asia." our top stories, asian markets with a quiet start as u.s. stocks as higher on signs the fed will reinforce a dovish message. gold with the record. coronavirus cases topping 16.3 a plan forbally as

the next u.s. stimulus is laid out. also, a warning that things could get worse. korea andan, south australia coming online. that's get straight to the market action with sophie kamaruddin. sophie: in japan, the topics moving lower by 2/10 of 1%. getting back some of the -- giving back some of the gains we saw on monday. the nikkei opening flat. rising over a 40 year option. a busy earnings schedule with companiest of 140 listed this week. samsung. frontrean won on the

foot, trading at a june 10 hi. we are seeing some gains for the asx 200, being led higher by bhp group. the upcoming earnings season could be quite painful for the industrial and transportation space. the aussie dollar holding as we are seeing continuing climbing for the greenback. checking in on bonds, aussie bonds falling ahead of a noose indicated on being priced. futures bonds have been high ahead of the sale. we have treasuries holding steady at the start of the asia session. a series of u.s. bond sales may add to pressure on rates. check out precious metals, continuing to gain as the dollar falls through from is two-year low. ubs seeing 2000 for bullion by the end of september. check out silver, above 25 with gains from the march low outpacing even the rally in

gold. emerging market stocks and currencies have climbed on the back of that weaker dollar story. traders betting that the fed will keep policy accommodative when it meets this week. let's get some analysis. great to have you. get inh further do we the dollar weakness and how do we play that when it comes to the benefit for emerging markets? >> there is quite a lot of weakness to come. there are a bunch of things driving the u.s. dollar down. more kiwi money printing and other central banks. the u.s. dollar has collapsed as the fed has cut interest rates. normally when there is a bit more confidence about the global economy, safe haven demand reverses and that's what we are seeing now. the u.s. economy is less cyclicals on the rest of the world.

when it recovers that typically works against capital flows into the u.s. and pushes the u.s. dollar down. we have started this get back and we could to the lows we saw earlier last decade ultimately. is a positive omen for the global economy, good news for the emerging world as far as commodity prices, such as the surging gold overnight. there is some consternation in some countries because as their countries go up relative to the u.s. dollar, it could cause angst in their central banks, including australia. aussie holding firmly, about 71 u.s. cents at the moment. was the biggest beneficiary across the em space in the weak dollar environment, given we continue to have uncertainty and

pettiness on the coronavirus recovery and reopening front? shane: that's right. latinly i would say countries because they have more u.s. denominated bids. -- denominated debt. but in latin america, the virus is still wreaking havoc. i think it's more likely to be asian countries, particular southeast asian countries, those that have the virus under control. are seeing less pressure in terms of u.s. dollar debt they have. those countries also benefit from an eventual upswing in global growth and trade. my bet would be on asian countries in the emerging markets space. shery: another major theme that has played out since the pandemic, sort of a defense play. the incredible rally we have seen in tech growth stocks. this is the highest since the

dot-com bubble but there's been a lot of pressure. about two thirds of the tech stocks have fallen. that takes me to the question of the day today -- day to day. sector's revive the mojo? shane: that's a good question. i could understand why tech has done so well, along with health care stocks, which has helped the u.s. share market in the relative sense. but always things come to an end eventually. wonder, as more signs emerge, the global economy is recovering, that will benefit cyclical stocks and work against growth stocks like tech and ultimately health care. i don't know which way that will go this week in terms of earnings numbers. i think the numbers generally will be pretty good for tech companies. been been a fair

issues -- beneficiaries of the coronavirus situation. , it'snear record pe's hard to see upside from here. you could almost argue they've been priced to perfection. at some point that will work against them. shery: also helping sentiment has been the flood of money that's come from both the monetary side as well as the fiscal side. we know the u.s. right now is working around the $1 trillion extra stimulus package. not to mention last week we saw australia releasing up deficit that will rise to a post-world war ii record. should we worry about the long-term implications of debt soaring? shane: it does raise issues longer-term, including the ability of governments to respond to future crises. that said, similar concerns were anded after the last decade

countries found the means to further increase debt. it is an issue but i don't think it's as big an issue as many people worry about. at the end of the day i think governments had no choice but to do this. businesses were not spending and the governments had to borrow the money to give it to those who need it. that government debt is different from private debt. if a government has difficulty servicing its loans, it can at the extreme, print more money, or get the central bank in cahoots to keep bond yields down. which is happening at present to some degree. and it can raise taxes. i don't think it will cause some sort of calamity. it may be an issue for some countries that have borrowed in , as we saw ancies decade or so ago, but i don't think it will cause big problems for the u.s., the euro, or

countries like a stronger. shery: shane, great to have your thoughts. ahead, hong kong bans all dining services as virus restrictions are tightened for the third time in as many weeks. later this hour, we get more on the city's bleak outlook from black sheep restaurants, which owns two locations with michelin stars. first, the surge in coronavirus cases in asia and the latest in the global race for treatment, next. this is bloomberg. ♪

>> you're watching daybreak asia. havee republicans presented their $1 trillion plan to bolster the pandemic ravaged u.s. economy. the bill would trim unemployment payments tond $1200

most americans, and shield businesses, schools and other organizations lawsuits arising from covid-19. it is the first step toward negotiating a compromise with democrats, who have offered their own $3.5 trillion solution. trump'se, president national security advisor has tested positive for covid-19. the white house says there is no risk at president trump or vice president pence. bloomberg has learned o'brien caught the virus from a family member. whileeen isolated at home running the national security council, doing most work by phone. hasphilippine president delivered his annual state of the nation address, signaling corporate tax cuts and support for pandemic hit industries. he has also sought to revitalize his infrastructure plan to lift the economy. the philippines impose one of the region's longest and strictest virus lockdowns but still has the second-highest number of infections in southeast asia at approximately

80,000. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. the virus,ing on global cases have surpassed 16.3 million with 650,000 deaths. u.s. hotspots have slowed but there has been a pickup in asia. of on man has the latest. vonne manon man -- y has the latest. how bad is it? yvonne: these recent outbreaks were likely linked to infections with people traveling now that domestic travel has resumed. we have the latest numbers coming from one area reporting six new virus cases there. on monday, 61 new infections in one day.

an area that's a boards the western province, where the muslim uighur population is. surrounded a port city. cases have spread from there. cases across three northeastern provinces and a southern province as well. for china right now in terms of tackling this, they are basically going through the same playbook, the massive blanket testing we have seen and targeted lockdown restrictions. seen buspital, we've and subway services shot, housing compounds limiting the number of people who can go in and out. the city began testing is population of 6 million people. basically playing the game of whack-a-mole across the country.

we've seen the recent flareup in places like hong kong. these cities felt they dodged a full it with covid-19 -- dodged a bullet with covid-19 but they are dealing with new infections. yvonne: you mentioned tokyo. yesterday, they had 131 new cases. indonesia as well. they just topped 100,000. the president there is ordering health officials to focus on containing the disease to the country's eight provinces. newe were 1500 or more confirmed cases and 24 hours. the number of infections in indonesia has quadrupled since the end of may. the government still insisting on pressing ahead with reopening the economy. bali welcoming back visitors even with a surge of cases.

they are trying to revive the economy with fiscal stimulus, still set to contract 3.4% in the second quarter. launched itsa first large-scale virus vaccine trial in the u.s.. what is a copy trying to achieve in the trial? yvonne: it's the first large study in the u.s. for moderna, which began dosing its first patient monday morning. this is for 30,000 people under the trial now across 89 testing sites. , the vaccinecally has been codeveloped with the national institute of health. there is government support behind it as well. it is basically designed see whether the shot is a 60% effective in preventing covid-19. leadingi, the nation's in disease expert, says the earliest result could be november or december. if successful, the company is on track make 500 in of the vaccine

in 2021. jumped on monday with the news. there also getting more u.s. funding. we are also seeing at least three other phase three trials not far behind. the university of oxford, johnson & johnson, and another as well. haidi: the vaccine development really ramping up. policymakers globally are grappling with whether schools should physically welcome students back, go online, or take a hybrid approach. johns hopkins university spoke to bloomberg as institutions in the u.s. finalize plans for the upcoming academic year. >> i would be pretty reluctant to do that in areas where there is a high amount of spread. i would be especially reluctant to do high school football, which requires a tremendous

amount of contact, obviously. it has been shown, with all of these colleges, to be a place where the virus gets transmitted. >> it is and extorting the moment for the country. it is july 27 and in 10 days it will be more urgent for the east coast as well. schoolmasks work in a when the kids are trotting around the hallways? >> part of the idea for schools is to reduce the amount of trotting around in the hallways. for younger kids, you keep the kids in a class. older kids, you might move teachers between classes. but it should not look like it did last year in terms of crowded hallways. and this isd be -- what governors are concerned -- governments are concerned about around the world, public health. educationan have an at home and the benefits to students. it was the best person to choose

these kind of difficult lines between the economy and public health? but notsaving lives letting people starve or go uneducated? ofwhat we did is we sort consciously picked to the andomy and its collapse that approach has not worked. it is important to follow the path so many other countries have done, where you take care of the virus. you spend money to keep people fed and housed, you don't let evictions happen, and you beat back the virus first. that allows you to have more of an economy. people who are jumping to help the economy are finding out the consequences. there is an enormous amount of viral transmission. note,her thing to individually people are risk-averse, afraid to do things because they are worried about the virus. but socially we have been reckless in a lot of places.

, encouraging people not to wear masks, telling people it is behind them and it will go away. we need to line up our social policies with the individual risk aversion we feel if we want to protect schools, protected nursing homes, and other places. we have to do that together and not just one at a time. >> does the message to people have to be that we have to do this for the next two years? people are quickly to dismiss -- that we have gotten over the worse in the virus is under control. >> back in the spring, the path was pretty clear. drive downigilant, cases, slowly open up with public-health capacity to do contact tracing and containment. and focusing on the highest risk areas in the sum of the underlying issues causing infection. we did not do that then but we can have a do over.

that doesn't mean you shut down for nine months. it means you shut down long enough to drive the cases down, and you are vigilant, and then you have the public-health capacity. >> you came out of the boston children's health combine and harvard and you went down to washington and did a lot of work overseeing the fda. savvyve a real political from the medical side. what do you want from the politicians right now? >> i think much more of a sense of responsibility from the top. ofhink the characteristic the white house and the administration has been that this is not our problem, this is the problem of the states. we heard that over the weekend and it is enormously frustrating. one of the most important roles for leadership is to take responsibility and to help illuminate a path. you don't have to dictate every decision but illuminate a path

forward instead of just saying this is your problem and good luck with that. seennk it is going to be as one of the major failures of leadership right now. was the dean from the johns hopkins bloomberg school of public health. the school is supported by michael bloomberg, our parent company. next, singapore's sovereign wealth fund, one of the largest dealmaker's in the world, just reported its worst return since the financial crisis. we will get you the details, next. this is bloomberg. ♪

♪ singapore's sovereign wealth fund has reported its worst results in more than a decade and is warning things could get worse. let's get more from our asia

investing reporter. the annualized returns over the last 20 years, lowest since the financial crisis. can we attribute this all to be pandemic effect? >> we actually cut. last three years, the organization has been warning that overhyped evaluations would likely lead to a recession or downturn in terms of valuations as well as turns. the pandemic isn't and what they expected, that in preparation for that, they've been moving out of public market equities and more into private equities. from a the blame comes blast from the past, the late 1990's tech bubble blowing out. if we use to the five-year onenal returns, those have -- have a return from last year. shery: what is the outlook for the year ahead? david: pretty bleak.

they have warned that all of the government stimulus going in, with a lack of maneuverability with low interest rates means we will have an impact on currencies, especially in countries that don't have the balance sheet to continue supporting these kinds of subsidies. ony also quite cautious deals in a range of spaces, including property. what deals are they willing to make in this environment? david: few and far between but they outlined interesting prospects. u.s.-china relations still going badly and tensions continuing, they see some opportunities in helping shore up both u.s. and china supply chains. china will be dependent on american technology for a while, but it wants to move away from that. it believes there are opportunities to back that up. building plants and other

things in china itself. also travel. while international travel is down, they think large, domestic economy such as australia or china, with domestic terrorism, it can pick up -- domestic tourism can make up the slack. our asian investing reporter in singapore. next, as hong kong continues to grapple with the latest outbreaks, we will look at the outlook for restaurants in the city with the cofounder of hong kong-based hospitality like sheep restaurants. -- black sheep restaurants. reducede u.s. mint has the volume of gold and silver coins it is distributing to authorize purchasers as the coronavirus pandemic slows production. this according to a document seen by bloomberg news at a time when investors are demanding

more precious coins. this is bloomberg. ♪ you say the customer's make their own rules.

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♪ acrossa muted day markets in asia today. let's turn to sophie. sophie: asian stocks treading water. material and attack leading gains. samsung added nearly 3% this morning as the kospi gained or than 1%. helping the a's p 100. gold spot prices have topped 19.50 and silver is at about 25 as the dollar extends a decline. check out the korean won, leading em asia gains, a june 10 hi while the yen is edging

closer to the 105 level. let's check in on some movers. 8.8% after there was an agreement to pay to buy a new cancer drug. on the earnings front, nissan falling the most since may and june ahead of its earnings. ae carmaker set to announce loss. motorsshi moser's -- stock falling as much as 10%. sliding tostruction a four year low, well below estimates as heavy equipment demand has been crushed by the virus. these are some of the companies do report or have reported. ,ore than 280 on the docket this as pimco warns we could see more corporate debt defaults as spending to alleviate the volume -- virus fallout is more

targeted in the next phase of policy support. haidi: all right. hong kong has rolled out its strictest virus measures yet as the infection continues to rise in the city. masks will be mandatory in all outdoor areas and bands will be placed on all dining-in services in the city. our next guest runs lack sheep restaurants -- lack sheep restaurants. -- black sheep restaurants. wonderful to have you with us again. tell us your take on the latest measures. do you consider them to be the strictest and hardest yet for the hospitality industry? >> good morning to you and thank you for having me. look, it is hard to look at this as anything but another punch in the guts. operating in a difficult environment now for year. for the industry at large, i

feel this may be another nail in the coffin. we have heard murmurs there is no more fiscal support coming from the government and i think that will make things very challenging. sheep, our company, we are fortunate that before the pandemic, we had developed and deployed our own proprietary delivery system. that is the life boot we are all sailing on. i've been saying this to my team this week, that we are no longer a restaurant team but rather a meal delivery service. for this week, next week, and for the next few months maybe. haidi: i just want to throw up a chart in our gtv library that paints a bleak picture of the

restaurant industry in hong kong. a four quarter decline, receipts at a nine year low as of march 2020. there is hope that the latest period not yet reported could look a little better, that certainly that data is looking dire. as you said, you are now entirely reliant on food delivery, take away. your stablele that of restaurants will survive with that pivot, particularly as we see this as a medium and maybe longer term issue until there is a vaccine? us, evendelivery, for with our proprietary system, accounts for only 5% of total sales. to be higherthere delivery demand in the coming weeks, but that only takes the number up to 10%, 12%. that is not even half of payroll for the month for us. impossible to be survive at these levels.

i should also say that the the , take storiesvery overstated. for restaurant operators, our magic happens within the restaurant. that's where we are able to give guests a level of hospitality. that's where we are able to make our sales. earlier, this is the life but we are sailing on. i saidriest part, as earlier, is there are indications there is no more fiscal support coming. that will make a tough situation tougher. i've been talking to policymakers in hong kong and i keep imploring them that restaurants need to be part of hong kong's comeback story. you say you don't expect more help from the government. what does that mean for your business? will you close shops or cut more jobs?

report very proud to but we've had not 1, 2, three black swan against -- events in hong kong. still, we have made redundancies this year. andumber one, number two number three on my list are to protect as many jobs for as long as i can. that may be harder if we are to exist in stricter lockdown for the next few months. are youow much support getting from landlords when it comes to rental reduction? been -- thehas answer is, it is quite varied. we have over 40 commercial properties in hong kong and the responses and reactions have been all over the place.

some landlords are more supportive, some have not supported us at all. , discussionsions with policymakers, we are asking them to put a little more pressure on the landlords and real estate houses in the city. do you see the need to make a decision about resizing your portfolio is this is -- of businesses? >> i will say again what i said earlier. for us, the number one priority is to protect as many jobs for as long as we can. redundant in our industry and in this environment means they are not getting another job for the next 2, 3, four quarters. us remains the nuclear option. that is the last thing.

bloomberglier to early this year that i anticipate that by the end of the year, a third of the industry will be gone and i am sticking to that prediction. shery: that is a really bleak outlook. what do you expect in terms of restrictions being lifted once the virus outbreak is contained? do you expect a v-shaped recovery for the remaining restaurants, where you see pent up demand really hitting, helping you out? losto you offset already revenue and business? >> thank you for the question. i have given you the bad news, now let me give you some reason for perhaps optimism. we in hong kong have been in the -lockdown since the beginning of the year.

as soon as we get ahead in our fight against the pandemic, local demand comes screaming back. example, may, june, really good months for us. and for the industry at large. harsherng in this lockdown for the next 46 weeks means we get ahead in our fight toinst the pandemic, i have addict that local demand comes screaming back. that is one reason to be optimistic. we have been in this over a year. the restaurant industry has not imploded. food means we can, operators can continue to rely on local demand. haidi: what would you like to see from the government? what can they do to help? >> i think there are two things. we have been fighting them.

more clarityle around policy. harsherple, we have had travel quarantine protocols than the government. folks in the aviation industry that have been flying, we haven't allowed them to come to a restaurant since the start of the year. the government didn't have this protocol, they were allowing folks in the aviation industry -- they did not have a mandated quarantine period. i think the more clear, more complete policy, and the other thing is more support. there have been two rounds of fiscal support and we need a third round. as i said earlier, restaurants need to be a part of the city's comeback story. shery: thank you so much for your insight. china's theking at guest domestic -- company, we

will preview their earnings report next. this is bloomberg. ♪

♪ global cases of

coronavirus have had 50,000 deaths. in europe, german health officials are worried about a new cluster of coronavirus cases after an outbreak at a farm in bavaria. of 500an 170 people out workers tested positive. employees have been put under a mandatory quarantine. the international monetary fund has approved $4.3 billion in funding for south africa, the largest payment yet to help any country fight the coronavirus. the money will be used to battle the spread of the disease and help the recovery efforts that follow. south africa has almost half a million confirmed cases and 7000 fatalities, making it the worst hit country on the continent. malaysia's high court is expected to hand down its first verdict today over its former's involvement in a state fund. a series of trials has been focused on how $10 million found its way into the premiers

account. he is facing seven charges of corruption and money laundering, each carrying a sentence of 5-20 years in prison. 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'm karina mitchell. this is bloomberg. let's turn to kweichow moutai. chairs have increased more than 37% this year. the company -- shares have increased more than 37% this year. the company is due to release earnings later. is a senior research analyst. great to have you with us. how much does a company like kweichow moutai get hit during a pandemic when there always seems to be this perennial short supply of their premium brand? >> that is correct.

we don't expect there to be much impact for them as a result of the coronavirus. difficultrs find it to get a hold of enough product in the best of times. there are extremely high margins with the products. what we're hearing is distributors are buying what they can get their hands on. about 20%,is down 30% in actual fact from what we are hearing in the channels, the distributors are happy to take on the extra risk. shery: the market seems to be pricing in a rapid recovery in the beverage industry. what are you expecting? euan: well, i think what we have seen across the baidu and beer industry is meant has been increasing. situation there's been some issues, especially in

the mid end segment. int is causing a delay selling for the producers. there has been a lot of speculative demand on a product. that's one of the reason why kweichow moutai is a good shape in the short-term. but it causes a lot of risk for the company down the line. the demand is getting back to normal but they've had to manage channel inventory very tightly. industry, there's been a lot of exuberance the last couple of months with the statistics predicting brewers have been stockpiling for the summer. we are cautious on the reality of those numbers. we think the double digit is probably overdone. to the extent they have been

stockpiling, we think there will be disappointment in terms of sellout because the company is on -- the country is on the road to recovery but not normal. links is kweichow moutai when it comes to the political vulnerability of the product and stock as well, that other bands and beverages are not? it is so intrinsically linked with corruption probes, banks, and being a stock heavyweight. following every time regulators decide -- falling every time regulators decide it is gained so much. euan: that's right. the central government takes an interest in the price and the concern is the rapidly increasing consumer price might be a signal that corruption is rearing its head again and is a problem. the regulator does tend to cap the price. are as a of that

sporadic blast. in markets ateing the moment is a lot of speculation that there will be an imminent price increase. that may be politically think there'sd we a risk it doesn't materialize in the short-term. distributors are cautious about the prospect of a price increase anytime soon. arer beverage categories less political, much more around insuring a recovery. on some some pressure brewers in particular show positive results, show momentum and that things are getting back on their feet in q2. and to the extent that they show a particular strong q2, reducing demand on the ground, we think they can course correct.

what is the outlook for foreign brands, particular with the overlay of u.s.-china and other countries in the trade war? euan: i think the primary risk would be the government encourages a boycott of foreign brands. happen withhat japanese autos and korean cosmetics. it makes it kind of a self-fulfilling prophecy when products are not available on the shelf. for brands like budweiser , the abilityhina to lock the product over the border is not there. wines is a fully imported supply chain and there is some tension with large tariffs on australian barley recently. there is a degree of risk there.

although we do see the darlie tariffs -- australian barley linked not necessarily to the covid investigations as many have suggested. great to have you with us. up later on today, we will get more on the upcoming earnings report. just getting an alert across the bloomberg, another rise in cases of the coronavirus out of china. cases forrting 68 new july 27, this as we continue to see new infections across parts --the country ranging from and a recent surge of case numbers in another province has wealthier we will continue to watch that -- another province as well.

we will continue to watch that as there are renewed blitzes for testing. this is bloomberg. ♪

♪ a quick check of business flash headlines this hour. haidi: madonna climbed as much as -- moderna climbed after getting support for a vaccine. $1is backed by almost

billion in funds after adding half $1 billion. betudy of 30,000 people to given doses has started. they expect a vaccine early next year. over accounting practices. beotice that there may filings against the company. under armour says it plans to defend allegations and its ceo stepped down amid lackluster chiefuntil is ousting's intelligence officer after it failed to keep up with advances. last week, the company said its latest technique for building the most advanced semiconductors was a year behind schedule. a top engineer will leave the company next week. intel says the change will accelerate product leadership

and improve focus and accountability. more gainsan may see when markets open in a few minutes after the benchmark hit new highs on the back of a $35 billion rally monday. the chipmaker staggering 25% grabting on the index and and -- and dragged it up. sophia, the question is how long can the rally continue? sophia: good morning. move have a daily stock limit in taiwan of 10%, which the company -- they rose yesterday and it can rise again today. overnight in new york, up 12%. we are expecting at least another gain today. inwould take only 3.5% taiwan to push the stock's

top 10cap into the ranking of the world's stocks. and that the first time taiwan would have a company in the top 10. it is a hugely influential stock in taiwan, a third of the index there. wherever the stock goes is essentially where the index will go. i don't think there's any other benchmark in the world that is so dependent on one stock. it is a pretty bullish signal for the broader taiwanese market? sofia: yes, we see foreign inflows picking up as well. the amount of money going into taiwan's stock market this month is the most among asian markets by far. it is also strengthening the with foreign investors buying more taiwanese

stocks. holdings to transfer into the local dollar, which is slightly problematic for the central bank. if you look at the intraday price for the taiwan dollar, they do tend to weaken it at the close. it is a bullish signal. goes, the index will go, but it is a very concentrated index and portfolios can shift very quickly. our china markets team leader. guest joins us i to discuss his strategy amid the resurgence, and why markets are afraid of a brick wall in august. shery: our markets coverage continues as we look ahead to the start of trading in hong kong, shanghai and change in. china open is next.

this is bloomberg. ♪

>> it is 9:00 a.m. in beijing and shanghai. i'm tom mackenzie. >> i'm david ingles. we are counting down the open of trade on the mainland and hong kong. our top stories, republicans unveil a $1 trillion aid package to bolster the u.s. economy. it proposed more direct payments to people and liability protection to