>> good morning and welcome the debris goes dry you. we are counting you down to india's major market opens. dark i'm shery ahn. >> here are your top stories. u.s.-china ties face yet more strain. washington is sanctioning hong kong officials as the beijing crackdown on free speech. u.s. cases top 5 million.

the chicago fed president -- australia heads into earnings season amid the worst recession in decades and a pandemic crippling the economy promises to be one of the most challenging periods on record. shery: u.s. futures opening flat. this after they finish mixed on the friday session. we had u.s. stocks falling with the s&p 500 flat after five sessions of gains. we have escalating u.s.-china tensions. some positive data. we have the dollar inventing after u.s. july job dated beat estimates. the nasa composite was led lower. composite was led lower. we had small caps leading the gains on those better than expected eco-numbers out of the u.s.. here is how oil is trading. we are seeing oil gaining ground

above $41 a barrel with brent coming in around $44 a barrel. this after the biggest loss in a week. not only u.s. and china tensions but the outlook for the u.s. stimulus. they saw the biggest advance since early july. see some are going to of those uncertainties, the lack of a deadline when it comes to the stimulus talks any the u.s. and the ongoing u.s. and china tensions. have japanese stocks on holiday from mountain day-to-day. this is how we are shaping up when it comes to the asian futures session. sydney futures as we kick off earnings season in earnest, 7/10 of 1%, which could mean a kick of 1%. we are seeing new zealand up by two tens of 1%. it is worth pointing out we have

100 days new zealand has gone without a single case of community transmission of covid-19. health and human services is expectedex azar to meet with the taiwan president on monday. he is the highest-ranking american official to visit the island in decades. stephen engle joins us from hong kong. this is sure to rub some feathers at a time where we are seeing day by day, escalating tensions between washington and beijing. >> this definitely is not going to help mend the relations between china and the united states. taiwan is a sensitive issue to beijing. the united states, they do have taiwan relations. this one is not on the military side. it is more on the health side. a high-level level cabinet taipei, theing

highest-ranking u.s. official in decades, shirley to wrangle -- surely to wrangle beijing. the foreign ministry spokesman when they got word he was going to be heading to taiwan, beijing was firmly opposed to interactions between the u.s. and taiwan. the united states saying it is going to go there to talk about the international response to the coronavirus, which taiwan has been lauded worldwide for its response. they are going to talk about supplies and medical equipment between the united states and taiwan and also get some of the secrets of taiwan's success in containing the outbreak of covid-19. shery: the u.s. continues to put pressure on china. we know the sanctions, some chinese mainland and chinese

officials. i have to wonder, does that even matter? it is not like they hold u.s. assets. >> that is the big question, how much is this symbolic or how much will this hurt the pocketbooks of the 11 officials who have been sanctioned including mainland chinese officials associated in united states terminology to the imposition of the security law on hong kong. the chiefclude executive, carrie lam as well as the police commissioner and others. konglam is the acting hong privacy commissioner. he has come out and said the sanctions and the revealed numbers andssport other officials including of carrie lam, amounted to doxy, -- xing, which docx carrie lam said would be a

criminal offense. another chapter that is turning into rapidly souring relations between united states and china and also the hong kong government. haidi: what are the latest things we are seeing in hong kong, the reaction of the government, some of the tensions and moves the think taken that you have these critics concerned that you are seeing this tightening of restrictions and tightening of freedoms after the national security law was put through? >> that is right. we have seen some arrests and some charges. wong was of -- joshua more recently charged with his participation in a tiananmen square memorial earlier in july. there have been some moves by the government here to enforce the national security law but also come down on the movement,

make sure there is not necessarily more separatist sentiment in hong kong. shery: our chief north asia correspondent with the latest. we will have more on the rising tensions between beijing and washington when we are joined by scott kennedy later today. still ahead, lots from markets to digest over the weekend. to bokeh capital partners kim forrest. this is bloomberg. ♪

haidi: you are watching daybreak australia. the number of covid-19 infections worldwide is nearing

20 million with the u.s. remaining the focus with more than a quarter of those cases. the u.s. added a million new cases in just over two weeks even as infections and deaths slow in florida and arizona. bill gates is criticizing the u.s. response. sayshicago fed president it is important the u.s. government delivers stimulus to help the economy through the coronavirus. charles admin says fiscal policy is vital. president trump has taken executive exit on relief as executive stocks -- executive talks stall. japanese prime minister says the government must avoid another virus state of emergency to soften the economic blow of the pandemic. economists expect gdp to have declined more than 20% in the second quarter. has allocated over $20

billion in aid so far. a new survey says less than a third of u.k. population would accept a vaccination. king's college says younger people are more likely to refuse a vaccine despite covid-19 deaths topping 46,000. researchers say large populations of the u.k. are unclear. shery: president trump is taking matters into his own hands as stimulus talks stall, signing four stopgap executive actions to extend lifelines to americans. the move is being criticized for being insufficient and possibly unconstitutional. our reporter is in washington with more. how economically significant our president terms executive orders -- if it can -- significant are president trump executive

orders? >> it kind of speaks to what little the executive branch, what little president trump can do to fund such programs because he does not have the power that belongs to congress. the talks in congress have stalled. trump has taken things into his own hands. the four actions he took on saturday are probably -- probably the most difficult was the $400 in extended unemployment payments. it is 300 from the fed, asking the states to kick in and other hundred dollars a week. they are saying they cannot do it. a lot of questions about whether that will have a meaningful impact and how long it will continue for. in the case of the unemployment payments, maybe one to two months. thepayroll tax deferral and private controversial move because it is only a deferral. at some point, people would have to pay them back.

and justd be confusing a worry for people. haidi: are we now expecting fresh legal challenges? seems if youinly talk to a constitutional law professor, they would say this does not standat by the separation of powers. many u.s. presidents have pushed the envelope on that. obama did that. trump has done it even further arguably. i do not know if you will get a legal challenge from the democratic party. chuck schumer and nancy pelosi were cagey about that today. it may not be the best look for the democrats before the election. steve mnuchin dared them to do it. he said it is not a good look to

be seen when he to keep money out of the hands of unemployed people -- to be seen wanting to keep money out of the hands of unemployed people. it seems like they are going a bit slow on legally challenging trump's move. if anything, maybe they will be successful in getting both sides back to the table. krasny in washington. you can get more on the relief measures and other stories you need to know in today's monday addition of daybreak -- monday edition of daybreak. you can customize those settings so you get the news on the industries and assets that matter to you. coming up next, we talk about how president trump's stimulus plan and the latest tensions with china will play in the markets. rest is with us with her view. this is bloomberg.

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shery: stocks ended last week down with tech shares bearing most of the selling. joining us heading into the week is bokeh capital partners founder kim forrest. we have seen tech stocks on a tear during the pandemic. these tensions between china and the u.s., what did they mean for investors? kim: i think it is going to mean there is going to be volatility, which i personally embrace. secondly, i think that you really have to think long and hard about what your timeline is and what your narrative is for the stocks you are picking. if you think these two things can come to fruition and the stocks you are picking are going to be higher in a couple of years or not. haidi: when you say great

volatility, that means you are adding to positions you are confident right now? kim: exactly. i always see a market downturn as an opportunity. at a minimum, it is an opportunity to see what happens when your stocks hit a bad patch of news and how low they go and who is holding them. that is part of our secret sauce is that we really like to watch how individual stocks as well as markets react to turbulent times. but more than that, it gives you an opportunity if you are very confident, about the likelihood of success for the companies you like to buy more. haidi: is the situation now that everyone agrees with seeing bubblelike conditions for tech stocks but you still want to be investors because there is growth potential?

kim: that is just it. we do not know what is going to happen tomorrow. we have a good idea today and tomorrow going to look a little like, but you get things like covid. we had no idea we were going to be living like we are living. good things can happen all the time too. you must stay invested and should not hide in cash unless you need that cash to buy something. everything we are talking about if you are investing is for the future. company you really like and for whatever reason, the news is trading down, bbuy it. looking at the stocks that have done well recently, it is because of how they have performed recently. that is a note of caution to investors. haidi: you take friday's payroll numbers, which was the bullish part of the rally. if you were in the next few days

or weeks to get actual agreement on both sides with regards to the next fiscal stimulus package, would that be convincing enough for you to look at the consumer facing stocks? kim: probably not because we have this thing that is looming out there in something like less than 90 days, and election. things can change materially. you really have to hold onto that. that being said, it always is determined by price and how long or how well positioned whatever it is you are going to buy. i always have an asterisk saying maybe. if you are doing a shorter term, the consumer is going to be ok for the next three months, that is too short of a timeline. it is good people are going to be taking care of or the unemployed are given a little

bit of relief here, but as far as investing, it is dangerous waters. shery: how positive are president trump's executive actions when there could be negativity including uncertainty over litigation, not to mention it could stall negotiations in congress? kim: i think both parties are going to come out looking terrible if we are fighting over the people and benefits that are going to keep them with a roof over their head and food on the table. war,ikelihood of all-out which i would consider lawsuit flying is pretty slim. has think president trump the upper hand right now because morally, he looks a little stronger here. simply with respect to protecting the unemployed or making sure they are going to get the extra statement that has

been coming their way or a lot of it. parties are both going to have to tread carefully. they are going to have to move on and try to come to some kind of agreement. i think that is ideally what happens, that this legislation never gets enacted, but congress has to sit down and get a real deal done. shery: always up -- haidi: always appreciate your time and your views. co-cio shed his views earlier. andpoke about investing commented on the u.s. jobs report. >> while everybody focuses on the change in payroll and people tend to focus on the growth rate, the big issue is the depressed level of spending and isome in the economy, which

reflected at around 10%. the longer we are in that situation of a depressed level of income and spending, the more vulnerable individuals and companies are to that set of circumstances and the most likely timeframe for that virus impact is 18 to 24 months. it is very uncertain. we have just had a four month fiscal program or one quarter. imagine having to do that a second quarter, third, fourth, eight. imagine having to do that for eight quarters in a row to make up for the low level of income and spending in the economy. imagine the potential on the dollar, inflation and other assets. as that lingers on, i think you have a combination of economic destruction with liquidity expansion. >> the added vulnerability is

zero rates. world where they cannot get away from zero rates means for the economy and how we need to rethink portfolios. can you speak to that? bob: it is a mind blowing thing that when you have a zero interest rate on a treasury bond, that means there is no interest rate. if there is no interest rate, there is no discount rate on cash flows. what is the value of cash flows if they have no discount rate except for the risk premium? from the bond perspective, you have virtually a zero return and you have an asymmetric return because there is no limit to how much the bond yield can go up. even if it goes to flat zero, you are only going to make five or 7% over the next seven years. 30 with alose 20 to

rise in inflation. you have that asymmetry and you are not getting paid any return. what i think people are not registering it had -- is how that impacts the equity market. there were three big impacts on the equity market. taken away the floor on equity decline because typically if you get an equity and economic decline, earnings or falling. if bond yields fall, it lowers the discount. if you cannot lower the discount rate, on those earnings, the downside is bigger. if you cannot cut interest rates , then you cannot put a floor under the economy except through monetization and fiscal policy, which threatens the currency. the third impact is that if equities are following, normally you get the bond rally to diversify that risk away. that does not exist now. you are holding the equity side downsideh not much

protection and you are holding the bond side with an asymmetric return pattern and a zero yield. it is a problematic scenario for any traditional investment strategy. shery: bridgewater associates co-cio bob prince. putting is reportedly pressure on the trump administration to let it cell components to huawei. the wall street journal says qualcomm is lobbying to be allowed to sell 5g chips to huawei because foreign markets have access to a market worth eight dollars a year. is set to have preliminary talks about a deal with tiktok, although the outcome is unclear. favorite.is the the white house has given the

chinese owned app to find a buyer. the administration has also barred american companies from dealing with its parent, bytedance. industry regulators in new delhi say the airplane that crashed touchdown too far from the airstrip. it may have resulted from the pilot's bad judgment. over more than a hundred were injured in 18 died -- and 18 died. biggestp, the world's oil exporter is pressing ahead with plans to pay $75 billion in dividends despite sliding profits and a surge in debt. we will have more on oil and saudi aramco's earnings, next. this is bloomberg. ♪

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we are starting trading of course in new zealand, where the country is going through one of the toughest lockdowns in the western world. it is now marked 100 days without a single case of locally transmitted covid-19. we are seeing stocks trading up by about .3%, going on a week where we do get the policy decision. we are seeing fewer members of the shadow board seeing further monetary stimulus as being appropriate, according to a recent report. as we continue to see the highlights when it comes to the uncertainty over the longer-term

ones once the existing stimulus measures fade out. we have the new zealand prime minister launching her reelection campaign this weekend as well. let's look at how we are setting up for the rest of asia. witholiday spin session japan and singapore on the sidelines. the start of the week gives us trade and policy and focus. we see s&p futures, little change early in the asia session. some downside pressure. slightly ahead for the asx 200. hang seng futures have edged lower following the u.s. imposing sanctions on 11 chinese and hong kong officials soon after the move to ban wechat, which saw tencent lose $35 billion in value friday. a buying opportunity for some. also saw you off -- offshore yen the most in two weeks. we see the currency study after weaken data showed its upside

surprise in china's july exports. traders will be watching for the u.s. china trade talks planned at the end of the month. morgan stanley warning of the wildcard risk for markets from that relationship. with that pulling up the terminal, seeing a pickup for the e.m. space. five-day gain through friday was the biggest rise since march. last week's turbulence for the turkish lira adding to the concerns. the move would reverberate across high-yield assets and investors worry about the next domino to fall as a result of the virus. watchingd we are also the direction for oil this week. concerns about u.s. china tensions weighing on prices. oil futures bouncing back from friday's almost 2% drop. su keenan joins us now.

we have doubts over another u.s.'s to be is package, adding pressure on friday -- another u.s. stimulus package adding pressure on friday. signe saw president trump some executive orders over the weekend that appears to reduce some concern, but volatility is expected. we are up on the week but down on friday by 1.7%. 1% in as much as electronic trading in asia. if you look at the real big picture, there are many that are concerned that the combination of concerns about covid stimulus that will come out of congress, which remains in a deadlock, and the recent attacks by president trump on china's tech companies are really going to put a limit on any further rise in oil. as we mentioned, trump signed four executive orders on saturday that we use some concerns about whether jobless benefits would be paid. but bigger picture, crude has

been tempting the upper range this week. against the declines in u.s. stockpiles. the recent trend in u.s. stocks and china tensions likely to limit the upside. we have also seen that in brent crude. traders are taking a wait-and-see approach, according to one veteran oil partisan. he says there is a lot of large countervailing forces on the market right now. haidi: su, yeah. in terms of related oil patch news, saudi aramco reporting second-quarter pop-up plunging. in contrast to its rivals, it will still pay that dividend. su: yeah. we have seen bp and shell withdraw their dividend. that is not the case for saudi aramco. of course it is a state owned company. saudi aramco reported that profits fell some 73% for the second quarter, falling to $6.6 billion after crude prices collapsed.

it is also indicative of just how severe the impact of covid on demand for energy has been. the results cap a turbulent period for aramco. in terms of the dividend, they will pay a dividend of $18.75 billion for the quarter. most of that will go to the government, because the government owns around 98% of the company. so, that is a distinction. as mentioned, rivals are not able to do that because of the financial pressure of the losses they are suffering. aramco's profit and demand for energy they say will probably improve over the rest of the year. but again, this is one of the major oil companies coming out with just confirmation that they are continuing to deliver some sustainable result, but taking big hits because of the devastating effect of covid-19 and demand reduction on oil prices. back to you. haidi: su keenan with the latest on saudi aramco and oil.

next, earnings season kicking off in austria. paul xiradis is with us next. this is bloomberg. ♪

karina: you are watching daybreak australia. the u.s. says it will protect november's election from foreign meddling, warning anyone who tries to interfere will face severe consequences.

intelligence officials say russia would prefer president trump to win, while china wants to see him lose. the national security advisor says the u.s. will not accept any meddling, but declined to comment on recent talks between president trump and vladimir putin. meanwhile the u.s. house secretary arrived in taiwan for the highest profile visit by a senior american official in decades. alex azar is expected to meet the president and health minister later monday.

--t optimism that is there stocks come back a little. there isthe view that a lot of that news piped into expectations. recovery from the share market perspective point of view over the next few months. >> is that also the reason we have seen the effects 100 trade on such a no arrange. range, a really tight not to mention volatility has remained flat. what is going to be the driver that either falls out of this range either upwards or downwards? the equity markets have --

concerns with covid. the real reason is coming to the full and -- it has been effort as far as that is concerned. there is an expectation that covid will pass. it will slowly but surely become less of an impact. where there is a prospect. vaccine.e an effective strong seen some leadership as well, which has been driving the market higher. drivingwhat has been the return. performing well. other sectors where expectations are low and have underperformed,

to negativee immune news because of the news it will recover. if we see liquidity, which i think is unlikely, or there's a view that the impact of covid will be far more longer-lasting that the recovery -- feel about theou resilience of the australian consumer at this point? paul: the consumer has been interesting, i must say. that that isrn true. levels in a quick amount of time. we have seen activity which

does not seem to be really explained by the cautiousness. new car sales have grown dramatically. we have seen hardware or building activity or repairs, maintenance, have been beneficial. we have been seeing people staying at home, rather than traveling abroad, spending money on their household. we have seen a quite remarkable and wefrom retailers, have seen the consumer experience partly because they have a bit of cash to allow them to do so despite the concerns.

so that has been a really interesting outcome. at the same time we have seen retail benefit because costs have come down for them. we have seen rental come back as well. overall, some of the retailers are really surprised on how well they are performing. they are performing exceptionally well. us.y: great having you with his take on the current earnings season in australia. coming up, when berkshire hathaway reports earnings. investors want to see where they are putting their cash to work. this is bloomberg. ♪ is is bloomberg. ♪

shery: warren buffett is betting on brighter prospects for berkshire hathaway. it shows what he is doing with at least some of his record $146 billion cash pile. seen recorde have numbers for buybacks of his own stock. >> i think that exactly going to make some shareholders quite optimistic. at the start of this pandemic,

buffett has been really quiet. he was not buying many things and if anything he was selling airlines stocks. what we learned in the second quarter is even if he was not finding value in stocks of other companies he was at least willing to put more money into back 5.1and he bought billion dollars in stocks, a record for him. in what ways did we see the pandemic hit hard at the berkshire business stable? katherine: he has a large business. one of his most recent large deals. it makes parts for the airline industry. they actually had to take a $10 billion charge tied to that business in the second quarter. and they warned that the airline business has been hit particularly severely by this pandemic. thein their judgment, timing and extent of the recovery will be tied to any vaccine or medicine to help with

the pandemic. haidi: tell us a little bit about the chart you just mentioned, the $10 billion charge. this business makes a lot of parts for airlines and aircraft manufacturers and it has really been hit hard. we have had airlines cancel aircraft orders which trickles down to all the manufacturers and businesses in the supply chain. and precision, which is one of berkshire's largest manufacturing businesses and one of his most recent hope rifle would -- recent high-profile deals, they cannot escape it to the point where they are cutting 10,000 employees and the first half of this year. -- in the first half of this year. haidi: is there a sense particular at a time like this when we are seeing seismic shifts in investing narratives that we need to be hearing more from the man himself? silencee: i think his

is a little bit odd. obviously he plays it quite carefully and when we heard from him in may he was walking people through his logic, that ultimately he felt america would make it out ok. we have made it out of many different terrible times in the past. that hisd caution record cash file, which at the time was $137 billion, it was not that high when he considered the worst case possibilities. we do not normally hear from him around second-quarter earnings, but i think investors are wanting to know where does he see opportunities. and i think by the fact that he mostly just bought back shares in the quarter come i think it really showed he is just sticking close to home during this time. consol energy glenn ski on berkshire hathaway --

let's take a look at saudi aramco pressing ahead with plans to pay $75 billion in dividends despite a slide in profits and rising debt. the company will pay $19 billion this quarter most of the government as the kingdom battles a widening deficit. the net income fell 73% from a year earlier after crude prices collapsed. but the ceo expects a recovery over the rest of 2020 as countries ease lockdowns. isn't talks be but to -- we are told they have entered exclusive negotiations and a deal for the california-based company could come at the end of the week. softbank division fund is a minority stake in bloomberg has received reported it has been working with advisors on a potential sale. germany suspects payment platform wirecard extended loans of about $1 billion to partner companies before it collapsed in

june. prosecutors surmised the loans may have been unsecured, and companies in dubai, singapore and the philippines. they filed for insolvency after admitting almost 2 billion euros it previously reported as cash probably did not exist. coming up in the next hour, we will talk to tony australia sees record covid-19 fatalities over the weekend. we will discuss what this means for the virus pandemic, and how australian authorities are trying to cope with the ongoing outbreak, not to mention the renewed lockdown. haidi: yeah, of course that victoria lockdown really weighing in as australian markets brace for a turbulent earnings season. this is how it is shaping up when it comes to futures. about 1% upside as we saw the s&p 500 matching its longest

winning streak since about 2003. we see active futures up by about .1%. new zealand, we are being treated to a bit of modest upside. this is decision week this week. the shadow board not seeing the so weor further stimulus, are continuing to watch that going into the monetary policy decision after the country marked 100 days without a single locally transmitted case of covid-19 after that super restrictive lockdown there. the aussie dollar, we are seeing board u.s. dollar steadiness against pretty much all g10. aussie trading a little softer. see commodities as well as oil coming under a little bit of renewed pressure, given these ongoing china u.s. tensions. it is a big week when it comes to emerging markets as well. trump, trade and potentially more currency volatility out of the turkish lira, forming that trifecta of risks for emerging

markets. a lot more to come in the next couple hours of daybreak asia. this is bloomberg. ♪ this is bloomberg. ♪ experience the ultimate sports hub.

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>> good morning. we are counting down to asia's major market open. shery: welcome to daybreak asia. our top stories this hour. >> further strain over the most senior to the medic visit to taiwan in decades. washington is sanctioning hong kong officials over beijing's crackdown on free speech. president trump takes action to boost virus relief as u.s