>> 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. cases top 5 million.

charles evan calls for credibly important government stimulus. australia heads into earnings seasons amid the first recession in decades and a virus pandemic that is crippling the economy. it promises to be one of the most challenging periods on record. here is how markets are trading. we are seeing u.s. fewer sugars -- u.s. futures under pressure. we had ask leading u.s.-china tensions fan yelling -- fanning the data. the bloomberg dollar index flat at the moment. this after a fifth consecutive weekly decline that will be the longest losing stretch since january of 2018. the offshore yuan is flat at the moment. this after the yuan led declines in asian currencies. we have president trump moving to been tiktok and we chat. hang seng futures down to tense up 1%. under pressure from the last two sessions.

it is a thin trading day. singapore and japan are closed. we have a china data blitz that could be confirming the recovery we are seeing. we have ppi numbers. not to mention retail sales and investment numbers out later in the week. markets are bracing from eventually more diplomatic feathers being ruffled as we get the u.s. health and human services secretary expected to meet with taiwan's president on monday. this is a trip that stands to further worsen relations between the u.s. and china. azar is the highest-ranking american official to visit the island in decades. let's get some context from stephen engle. the timing of this is beijinging in terms of and washington. >> so much is happening. we have this taiwan visit from

alex azar. on tiktok.pments on taiwan as you are seeing, the health and human services secretary arriving in taiwan sunday. he will be meeting with the president later today. fairly soon. there's that to discuss the international response to the coronavirus, which taiwan has been lauded for its clampdown and protection of citizens and not having a big spread. they are going to discuss supplies of medical equipment and cooperation. beijing, when they first got wind of this high-ranking visit, the highest-ranking u.s. official visit to taiwan in decades, they put out a statement saying they were firmly opposed to official interactions between the u.s. and taiwan. another flashpoint in already soured relations between the

united states and china. shery: you mentioned the sanctions on mainland officials. how significant are the? -- are they? >> it is debatable how effective they will be, whether the properties or assets by these officials including chief executive carrie lam as well as the police commissioner. the interesting development is after those sanctions were announced, the acting hong kong privacy commissioner ritter-sized u.s. department of treasury for what he called doxx ing the chief executive, carrie lam, putting out personal information such as passport details and the like in the public domain, which the privacy commissioner said is potentially a criminal offense. escalatingwords is between hong kong officials and the united states.

we are seeing the sanctions targeting people and their property and assets in the united states -- it is unclear about the extent or the effectiveness of those sanctions and whether they have any assets abroad and whether the banks in hong kong could enforce that -- those sanctions. shery: despite the escalating tensions, it seems the trade deal is still in tact. we are heading to officials meeting on august 15 to review the phase one trade deal as well. >> that is right. that is the big one that is hanging out there, whether that can be done, given all these different tensions between china and the united states. i mentioned tiktok. there could be a federal lawsuit filed soon. that according to npr radio, saying that band by donald trump

-- that ban is unconstitutional. there is tons of different tensions between china and the united states. the one saving grace so far, the phase one trade deal has not necessarily been scrapped. there are a lot of headwinds for sure. we will be watching closely -- shery: we will be watching closely. still ahead, betting on entrepreneurship. how entrepreneur shares is raking in the returns from companies with visionary leaders. a coo explains, next. plus, australia's biggest single day jump in virus deaths. we are live to victoria to speak with tony blakely later. this is bloomberg. ♪

>> you are watching daybreak asia. a new survey says less than a third of the u.k. population

will not accept a coronavirus vaccination, with respondent skeptical about the science behind such a plan. king's college says young people are more likely to refuse a vaccine. researchers say large parts of the u.k. population are unclear about the information and misinformation surrounding the virus. the chicago fed president says it is incredibly important the u.s. government delivers new stimulus to help the economy through the coronavirus. fiscal policy is vital. president trump has taken executive action on relief as congressional talks stall, although his measures fall short of what the democrats say is needed. the japanese prime minister says the government must avoid another virus state of emergency to soften the economic low from the pandemic. economists expect gdp to decline by more than 20%.

allocated almost $20 billion so far. inshes -- clashes continue beirut amid surging anger about the chemical explosion. is in political and economic crisis and needs international funds. the imf says the country must show debt sustainability and a new solvent financial system if it is to be allowed to borrow more money. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm karina mitchell. this is bloomberg. another big week ahead for markets with the u.s. and china reportedly planning to assess the phase one trade deal. this could pose a challenge to asian equities. our next guest says we are poised for a strong rebound. great to have you with us. >> thank you for having me.

shery: we have the u.s. economy and the u.s. markets really rally in the last few years. that idea of u.s. exceptionalism has been with us for years. is this the end of what we are as china and the rest of asia overtake the u.s.? >> that is a great question. no u.s. markets are poised for strong rebound. we believe the best opportunities reside in non-us health care ise priced to perfection 20% year to date with a number of companies above 100%. $2 billion move from u.s. equities to non-u.s. equities. we believe this could be a trend

for the rest of the year because if you think about international farets, most countries are behind with some countries in particular, down 10 to 20% here today. we see things changing. we are seeing signs that some countries -- for example, stocks in china last month went up more than 30%. stocks in brazil appreciated about 9%. shery: does this still hold in an environment where we have renewed china-u.s. tensions including another tech war on tiktok and so forth? when we had these tensions last week, we had the ruffle 2000 gaining ground. eva: that is right. we see a lot of tension. there is a lot of noise. this is part of the general

noises we are seeing in the market both in asia and the u.s. we do not think president trump wants the recovery from the covid crisis. technology, large still has room to run even though most of the stocks are priced to perfection and are very vulnerable right now. we believe the biggest opportunity right now is in the non-us markets. we have been seeing many countries catching up. to avoid the noise that is happening now between u.s. and china and all the uncertainty we have with daily news coming, we suggest investors look for opportunities in markets and especially for entrepreneurial growth companies. to thewhen it comes

threats facing emerging markets, especially here in asia, two out of the three t's, trade and trump, directly correlate to what we have seen between the u.s. and china. does that have to do at the risk we see in ems? it is a problem of two different markets. the developed markets have seen their economy shrank. there is no question that without strong governmental global economy would suffer more than it does experiencing. members of the g20 have been working independently to inject aid to their market and provide support to emerging markets. spent $4has recently

trillion. $2 e.u. has close to trillion. china has spent at least half a trillion. each of these major markets are working hard to send to seri resources -- to send necessary resources to contain covid. we believe the markets as well as some emerging markets are very much at risk during this crisis. this crisis may take many years for this market to recover. suspended debt repayments to offer support for covid. this is not enough. the economic consequence -- that may goidi: through some of the peaks within china. a lot of them are technology-based.

you have billy billy, which is backed by tencent. we saw what happened through we chat at the end of last week. are you concerned these are the names that are directly in the firing line if we continue to see the tech were being exacerbated? they are we think going to be affected, but modestly. those particular companies, they are entrepreneurial. they are very strong. as of now, most of their income comes from the asian markets. they are not going to be affected that much from the united states' ban. isn you see tiktok, this kind of an interesting case because there reason announced -- because the recent announcement to ban them and then you see microsoft saying company, thisthe

could be a good prototype for a company trying to enter the united states market. competitor,ing which many people in the u.s. do not know yet, it is alive in eight different countries right now. this could be another potential uniform. similar --have a coming through the u.s. in the future. shery: this is the gtv chart on the library that despite the fact we talk about tesla and their stock soaring, you see they have beat them all with a gain of more than 800% in the past 18 months. we understand why you would pick this company, but at the same time, it is still losing tons of money, $1.5 billion net loss last year. how do you pick the winners and does that concern you,

especially since there is so much optimism bake in? eva: you are right, but they are still growing a lot. favorite by far -- our favorite pick when it comes to a $17reneurial growth is billion company. they appreciated 460% today. this is the world's largest manufacturer of rubber gloves. your listeners in asia might know them. there based -- they are based out of malaysia. they produce 26% of the global glove supply. as a result of covid, the demand has increased 10 times year to date. the prophet price more than priced -- the profit more than doubled. we are tracking many more

companies in asia that are doing great right now. haidi: coming up next, nonstop heavy rains battering south korea, killing dozens, displacing thousands. we will have the latest. this is bloomberg. ♪

shery: let's get a quick check of the latest headlines. qualcomm is a poorly putting pressure on the trump administration to let it sell components to huawei, saying u.s. restrictions threaten to channel revenue to foreign competitors. qualcomm is lobbying to be able to sell 5g chips to huawei. qualcomm cites samsung and mediatech as examples. twitter is said to have had

plumbing are talks about a deal with tiktok, although the outcome is unclear. microsoft is favored for a buyout of the operations. the white house has given the app until september 18 to find a buyer. the administration has barred american companies from dealing with bytedance. talks toin advanced buy oisis. we are told they have entered exclusive negotiations and a deal could come in weeks. fun as a vision minority holder. bloomberg has been reporting it is working with advisors on a potential sale. haidi: now to south korea were has been raining nonstop for over a week. floods and landslides have killed 30 people and displaced thousands more.

let's get the details. what is the latest on the situation? >> the rain has let up a little bit. it is drizzling right now. as you know from over the weekend, the torrential rains caused significant damage, mostly to the south and central arts of the country -- central parts of the country. 31of last night, they had people died and 11 are missing. most of the damage seems to be to homes and farmland in the rural areas of the country. so far, the damage does not -- the flooding does not seem to have impacted any major businesses in terms of factories, plants, offices. economicat are the ramifications at a time when south korea is trying to rein in the coronavirus outbreak and we have seen tens of fiscal help to support the economy? >> i do not think it is clear at

the moment. most of the damage was to homes and farmland. major businesses operate normally. as to how that would impact the unemployment rate is not unclear. the survey is estimating it would be around -- when they report this on wednesday -- it is expected to be around 4.4%, up slightly from 4.3%. itin, it does not seem like will have that much of an impact on the unemployment rate. --s does add to the damages all the damages add to the woes the country is facing relative to the coronavirus outbreak. it does not help. what is alarming to some right now is there is another storm coming this afternoon. .here is a typhoon that is supposed to hit land

this evening. that could add to the damage and maybe make it worse because already, so much of the is that a weak point -- is at a weak point. haidi: do we know if the flooding is affecting north korea? pete: yes, it has. -- peter: yes, it has. over the weekend, state tv showed kim jong-un out and about touring some of the villages, which were destroyed by the flooding out there. it was significant enough that he ordered grain and rice to be shipped to those villages where this impact was significant. shery: coming next, president

trump's pandemic relief orders are likely to face legal challenges. analysis on this, plus reaction to the latest jobs report as our guests share their views. this is bloomberg. ♪ ini think the continued rise payrolls and bear in mind, it is a hotspot. >> this is a very good report, very promising. strong recovery continues. we are aware we have a ways to go. >> if -- the labor market continues to heal. the last two months, job creation was stronger. >> unless we get the virus under control, i would expect us to remain in this lower breadth of jobs gains. >> it is going to get increasingly more difficult. it is about 42% of jobs lost have been recovered so far. >> the big issue has been the depressed level of spending in the economy. >> the level we are at, slightly

above 10%, is where we were in the peak of the global financial crisis. >> the problem with this report is that it is not going to resolve much. >> monetary policy only works to a certain end and then you cannot go anymore. >> these leaders have to come together and understand about what is ahead, not what is behind. ♪ what happens when a wireless carrier

puts its customers in charge? well, the good news gets shared. and it gets rated #1 for customer satisfaction. but don't just take our word for it. take theirs. it's your wireless. your rules. only with xfinity mobile. call, click or visit a store today.

♪ karina: you are watching daybreak asia. hasu.s. health secretary arrived in taiwan for the highest profile visit by a senior american official in decades. alex azar is expected to me to the president and taiwan's health minister monday. this will strain already deteriorating relations between washington and beijing. the chinese foreign ministry says it opposes the visit. the hong kong government is threatening countermeasures after washington put sanctions on chief executive carrie lam and other and city -- other city and mainland officials area they

say she is responsible for implanting chinese -- implementing china's policies. the hong kong government says it is a gross interference in china's affairs. the u.s. says it will protect november's election from foreign meddling, warning anyone who tries to interfere will face severe consequences. russia would prepare -- sources say russia would prefer trump to win while iran and china would prefer him to lose. the u.s. not accept any meddling but declined to comment on talks between president trump and vladimir putin. 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 richel -- mitchell. this is bloomberg. haidi: of course the payrolls number out of the u.s. on friday, one of the bullish stories that drove stocks to extend again we saw albeit

marginally by the end of trading friday. with the labor market, we have got news from bridgewater's co-cio. he spoke to that report. he gave us his views about what a lower to invest in for longer environment. >> while everybody sort of focus is on the change in payroll, and people focus on the growth rate, the big issue is the press -- depressed level of spending in the economy. 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. the most likely timeframe for the virus impact is 18 to 24 months. it is uncertain. we have just had kind of a four-month fiscal program or a

one quarter. imagine having to do that i second quarter, -- that a second quarter or eight quarters in a row, to make up for the low level of income in spending in the economy. on the the potential dollar, on inflation and other aspects. as that lingers on, you have a combination of economic destruction with liquidity expansion. >> the added vulnerability is zero rates. what zero rates, and a world where they can't get away from zero for the for seeable future means to the economy, and how we need to rethink portfolios -- can you speak to that? >> when you have the zero interest rate in the treasury bond, it means there is no interest rate. there is no discount rate on cash flows. how long is the duration and

what is the present value if they have no discount rate? there are a number of obvious implications for bonds and the traditional 60-40 portfolio. you have virtually zero return, and you have asymmetric return because there is no limit to how much the bond yield can go up. even if it goes to flat zero, you will only make about 5% over the next seven years, but you could lose 30% if you have a normalization or rise in inflation. you have asymmetry in the market, and you are not getting paid in return. people are not registering how that impacts the equity market. first of all you have taken away the floor on an equity decline. you get an equity decline, earnings are falling but if bond yields fall, it lowers the rates and supports prices.

if you can't over the discount rate on those earnings, the downside is bigger. if you can't cut interest rates, you can't put a floor under the economy except through monetization and fiscal policy which threatens the currency. the third impact is if the equities are falling, you get to diversify that away, but that doesn't exist. you are holding the equities side of it with not much downside protection, and you are holding the bond side with an asymmetric return pattern and zero yield. it is problematic for any traditional investment strategy. associatesgewater co-cio bob prince. president trump was not bluffing. he said if democrats and republicans could not agree on a plan by saturday, he would take plans into his own hands. he did.

kathleen hays is here with the latest. talk about those actions taken by the president, because they did kick up a major outcry. kathleen: they did. he is taking unilateral action on stimulus steps. that in itself is questionable on many levels. some would say constitutionally, others would say practically. it was the payroll tax holiday that everybody has been talking about. most people quite critical. he announced something else he said he would do if he had to, to extend unemployment benefits himself, the moratorium on evictions and to offer student debt relief. the democrats remain deadlocked and the gop. let's talk exactly what he is proposing. it is a deferral, not a suspension.

so it means people have to pay more when they make up the payments they have not made along with their employers. it doesn't apply to everybody. only peoples who is -- whose annual income is -- trump said he could extend or and this. this obviously as i said, it was bashed not just by democrats but also republicans. nancy pelosi said what many seniorsay, it endangers social security and medicare. it is a defunding. he also said it doesn't help that much, the market -- money trickles out. a leading republicans that it was an unconstitutional power grab. cutting to $400 a week, he is having the states make up the

difference in his proposal and that is also being criticized because some people think there may not be enough money in the coffers to do that. all meanat does this for the potential of recovery? kathleen: what a lot of people are worried about, what fed official including charles evans on face the nation, saying we need the fiscal help, the economy needs it, or it won't function as well, the account -- let's look at the payrolls numbers. we were hearing from bridgewater's co-cio who said even with the jobs we saw, he is concerned about income and spending. that will be an issue for stocks. let's jump into the number -- the terminal. payroll jobs rose. it was higher than the median forecast. falling, nearly

a full percentage point to 10.2%. larry kudlow was on bloomberg television after the report. he was impressed even with the rough going on rising virus cases, the economy was able to perform as well as it did. let's listen to what he told us. payrollis a hot spot, report. this is july 20 2 july 2018. end ofgin in the back june and lasted through july. there was pullback of s, yet we still got almost a full percentage point drop in the unemployment rate, which will move to single digits easily in the summer and fall. against that

optimistic outlook, and he is not alone in this. let me leave you with a negative find on jobs. of the 16.3 million unemployed workers in the united states, half of them have been out of work for 15 weeks or longer. if those people could get jobs, would they? republicans say they don't want to go back to work. if you are in leisure, hospitality, anything with services jobs, there are no jobs right now. so many people say more fiscal stimulus is needed and it is needed now. haidi: kathleen hays with the latest on the implications. don't miss the interview on the outlook for india. modi's chief advisor will be joining us. coming up next, the latest on australia's deadliest virus date so far. this is bloomberg. ♪

♪ japan and singapore away on holidays today. let's turn to sophie kamaruddin for what to watch in markets. hittingasian stocks are -- going for a mixed start. he restocks edging higher while

the new zealand dollar under pressure. backil falling -- crawling friday's losses after the forecast of energy demand will improve oil consumption in asia has almost returned to pre-virus levels. worries over where the next domino could fall on virus in fact is stirring up a headwind for em, the turkish lira extending declines after a turbulent week stock -- with credit concerns. the spread between the three and high,nth is a 2018 indicating more is expected going into the u.s. elections for relations with china remaining the wildcard risk according to morgan stanley. there has been plenty of political posturing, jumping into the terminal once again led to a wipeout in tencent's market value on the we chat -- wechat

ban.. following a clarification from the u.s. h-shares was three times the average and more choppy trade is expected when tencent reports on thursday. for some the selloff is a chance to buy with pointing to valuations for -- compared to u.s. peers. seven analysts upgrading their calls or affirmed with tencent. sophie kamaruddin in hong kong. aviation regulators in new delhi say the air india express jet that crashed friday touched down too far along the airstrip. they said to local media the incident may have resulted from the pilot's bad judgment. more than 100 people were injured after the flight overshot the runway in the heavy rain at the airport in corolla.

-- karalla. its line inspite profits and rising debt. the company will pay $19 billion mostly to the government as the kingdom battles a widening deficits. aramco's net income fell 73% after crude prices collapsed. they expect a recovery for the rest of 2020 as countries is lockdowns. germany suspects payments extended loans of about $1 billion to partner companies before its collapse in june. prosecutors say the loans may have been unsecured and made to companies in dubai, singapore and the philippines. they've filed for insolvency after admitting the previously ported cash probably did not exist. shery: warren buffett is betting on brighter prospects for berkshire hathaway and shows

what he has been doing for his record $146 billion cash pile. kathleen covers berkshire. the record buybacks, what are we learning about his capital allocation strategy here? kathleen: i think this quarter showed us he is not just sitting on the sidelines. when this pandemic started, he was quiet, not doing that much. he was if anything selling airline stocks. he has been cautious. $5.1 billioncord buying back his own stock and we have learned in july and august he was willing to do a natural gas energy deal and was willing to buy up more bank of america stocks. he is willing to put some of this money to work. he is willing to do it in this climate. he is sticking close to home, buying his own stock and buying

bank of america, a longtime investment. he owns a large energy empire, so it is a familiar area for him. haidi: in what ways did the pandemic hit the berkshire businesses? >> it hit operating profit, and it was across a range of businesses. the railroad, lower volumes across all of the products. we saw a lot of retail companies get hit. we also saw precision parts, one of his mate -- biggest businesses, get hit because of the slowdown in air travel. shery: what do we learn about his investment strategy, especially his style, because he tends to be careful and conservative. knitting.k to that he is more willing to put money to work in recent months that he

was at the start of the pandemic. it is hard to say he is eager to start doing a lot of deals, it does show there is more clarity with the situation and how they are weathering it. haidi: at a time like this, would we expect to hear, or investors are hoping to hear from the man himself in terms of the investor call? >> investors would love to. he doesn't normally do earnings calls. the second-quarter results can be kind of quiet. he has been relatively quiet during this whole pandemic with only his annual meeting in may being the only time we have heard from him. he is careful about this, and his strategy is to absorb information, to read for hours a day. that shows he is sticking to that strategy instead of talking

to a lot of folks. shery: art finance reporter -- our finance reporter there with the latest on warren buffett. we have president trump speaking in new jersey about the executive actions he has related to the economic relief package. he has heard mostly positive things. we are talking about measures including expanded unemployment payroll and temporary tax deferral. he said states can afford to kick in $100 a week for the benefits. this will be required for him to extra the $400 a week in jobless benefits which would include $100 per week from the states, which there has been pushed back given the states saying they did not have the money for this. president trump speaking in new jersey. plenty more to come.

this is bloomberg. ♪ this is bloomberg. ♪

we are just getting some breaking news. the founder of the apple daily newspaper is said to be arrested on alleged collusion with foreign forces according to the daily. we are getting the one line at the moment, but we are continuing to seek more details.

he has been one of the most outspoken pro-democracy activists in hong kong and has railed in this time of the pro-democracy protests as well as the introduction of the controversial security law. he is the owner of the opposition newspapers at the apple daily. we are now hearing from them, that their founder has been arrested for colluding with foreign powers under the scope of the new law. if this is confirmed, this is the latest in a string of arrests, detentions and other actions taken on pro-democracy politicians, opposition politicians, the likes of joshua , arresting them for prior demonstration related charges. we are hearing jimmy lai has been arrested for alleged

collusion with foreign forces. we will get you more details on that story. saudi aramco is pressing ahead with a planned $75 billion in dividends this year. pay $19 billion this quarter. that mostly goes to the government as the kingdom battles a widening deficits. let's get more on the second quarter earnings. what is the murray -- the main takeaway other than the fact it surprisingly paid out this dividend unlike big competitors. to have atried forward looking picture for the results. we had the chief executive saying here expected performance to improve the rest of the year, based on expectations coronavirus lockdowns will continue to ease. there is a big question whether that is the case but the oil

market is giving him the benefit of the doubt. we have seen an uptick. at the margins, the fact they are sticking to the dividend payout is perhaps reassurance they are backing that positive video with cash. on the other hand as you pointed out at the top, the saudi government is reliant on these because of the oil drops. they are reliant on these, so it would have been a shock if they had not stuck with that policy. the big drop was entirely expected. we knew that was coming. the positive outlook has given the market something to grab hold of fantasy short-term gain -- and see short-term gains this morning. shery: with the investment still go ahead? would the investment still go ahead? >> there was some doubt whether they would proceed, given the pandemic and the impact on

economics around the world. it looks compelling, if you take the view we will find a vaccine and the world will return to some normality, because it gives them access to the indian markets. the demand for refined crude and oil is huge, potentially. traction there is a still there for aramco and they are sticking with that. you could probably say if we see things continue to improve, the deal will get done. big questions over that. india itself is struggling with coronavirus still, many cases there. we would need to see improvement, not guaranteed. the deal will still go ahead. shery: our sydney energy reporter with the latest. let's get a look at how markets are trading at the moment. kiwi stocks are gaining .3%.

thekiwi dollar was among worst g10 performers last week. we are expecting the rbnz rate decision later this week there they could hold rates but expand to a. -- expand qe. we have seen the aussie dollar holding a three-day gain. rhetorica more dovish from the rba. we will get australia's unemployment numbers later thursday, the kospi futures gaining. in fact we are heading, the highest level since to september 2018 south korean stocks have been on a 10 or while u.s. futures are under a little bit of pressure. i talked about the tensions. we did get some positive data with the eco-front and jobs numbers. we will look ahead to the week for eco-numbers with mizuho.

and a senior advisor, scott kennedy. the market opens, this is bloomberg. this is bloomberg. ♪ this is bloomberg. ♪

♪ shery: good evening from bloomberg's global headquarters. i am shery anh. haidi: i am haidi stroud-watts. markets in sydney and soul have just opened. u.s.-china facing a string over the most senior diplomatic visit to taiwan in decades. washington is sanctioning hong kong officials over beijing's crackdown on free speech. china which was the first in to

the pandemic could be the first out. the economic recovery is gaining traction. saudi aramco presses ahead with dividend plans despite declining profits from rising debt and income falling 73% on the year as crude prices collapsed. take a look at how we are setting up for asian trading. marketsseoul and sydney coming online. we do have japan sidelined. aey are on a break for holiday. take a look at what we are seeing in the start of trading, as we get the staggered open, up point -- .1%. we got the virus tempers out of victoria, 19 fatalities which would make it the deadliest day yet in terms of this pandemic for the coronavirus across australia and still over 400 new cases being reported as the

continues to get through its restrictive lockdown measures. the aussie dollar is unchanged, although we have been on a weaker footing for the morning session. we are seeing a proxy for the concerns over risk appetite. we will take a look at how the --t of the region is being is trading. a lack of impetus given japan is a way for mountain day. shery: we continue to see the kospi is flat, but this after we saw a really south korean stocks on a tear, the highest level since september 2018, five sessions of gains, the korean won under pressure. dollar the back of weakness. take a look at what oil is doing, because we have seen its biggest loss in a week last week

but right now in the asian session we are seeing oil gaining ground area this after saudi aramco said they are seeing a recovery in demand. u.s. futures under pressure, down .1% as we see the u.s.-china tensions escalating. that has led to the offshore yuan expanding of the worst drop in a few weeks. we have president trump banning tiktok and we chat. take a look at the lira extending the drop at a record low after authorities stepped back from intervention. let's get more with mark cudmore. what are you watching? we continue to see volatility in the emerging markets, and not only all of the things i mentioned, whether it is u.s.-china tensions, lira volatility as well. mark: there is quite a few drivers we need to be wary of.

emerging-market volatility is more of a slow bleed. in august we see higher volatility and the lira trade is worrying, but the money came out of turkey a long while ago and there is not much liquidity so i would not want to over interpret especially in the asia session on a day like this with a lot of traders out of the market. the biggest picture is the u.s.-china trade tensions but that is playing out over several years, expected to intensify ahead of the election. we are not sure how much it will intensify or if we have seen the worst posturing already. the story that is hardest to interpret is around this stimulus agreement. how do we way out the executive orders against the idea or the fact we don't have a stimulus agreement? some people are saying trumps action makes it likely -- trump's action means it will be

an agreement. others say there is a failure. the market seems to be nervously holding the conviction it is probably ultimately a positive for markets and a deal will be reached, but there is a lot of disappointment if a deal is not reached. , you have got trump, trade, potential more volatility with the turkish lira, but could there be good news in the china data deluge? mark: i think that will emphasize the story china is the world's outperform are it -- it is one of the few major economies that should get growth overall, given the most are shrinking. that is a story that is well known. it will be positive at the margin, but not a game changer. we know china's share is surging.

growing while the u.s. economy is shrinking. it emphasizes most of the world is underweight china. the theme will be covid investors need to get more exposure to china. at the same time the opportunities to trade with china are being closed up by the u.s. shery: whether it is china or the virus headlines, or stimulus headlines, this year has been about momentum trade. what is the risk we could see a meltdown if we get anything negative? validi think that is a point here the momentum trade has been key amtech has been a part of that. we saw a slowdown last week. copper is another worry signal. copper has really let the rebound, extraordinary move up, we got confirmation china has had a second straight month of record inputs. we saw the worst day in more than three months for copper and

that could be a warning for trade. given therewill say is this momentum, people have chased the rally and retail investors are in it, but it is vulnerable to upset. that makes sense, but worried about folks -- we have heard that refrain multiple times the last two or three months, but it has been pretty resilient so far. mark cudmore there with a look at what he is watching as we get into the start of a brand-new trading week. you can follow that and the analysis and the markets live blog on the bloomberg at mliv . we will get more on the rise in tensions between -- a senior advisor is along with us later this hour and he says a decoupling of tech's reign the two would do more harm --

between the two would do more harm than good. and the week ahead for asian economies. we talked about the data deluge out of china that is expected to show a recovery that is gaining traction. this is bloomberg. ♪ mberg. ♪

karina: you are watching daybreak asia. i am karina mitchell. the number of covid-19 infections is nearing another grim marker, 20 million. the u.s. remains a focus with more than a quarter of those cases, adding one million in two weeks, even as new infections and deaths slow in florida and arizona. criticizing the response, despite it -- describing testing as slow and marking access. the chicago fed president said it is important the u.s. government delivers new stimulus to help the economy through the

coronavirus. he said fiscal policy is vital with the pandemic not yet under control. president trump has taken executive action on relief as talks stall, although his measures fall short of what the democrats say is necessary. and shinzo abe says the government must avoid another virus state of emergency to soften the blow to the pandemic than it would be worse seen in the financial crisis a decade ago. he has allocated almost $20 billion in aid so far. withes continue in beirut anger about the michael explosion. widening calls for the government to resign. lebanon is in political and economic crisis and needs funds. the imf says the country must show sustainability and a newly solvent financial system if it is to be allowed to borrow more

money. 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. mitchell.a this is bloomberg. karina: hong kong police are said to have arrested media tycoon and prominent democracy activist jimmy lie under a lie -- a law according to media reports. stephen engle has been tracking this. we were talking about in the early our how part of the u.s. response to hong kong has been in response to the ramp up of actions taken under the national security law with local security activists and politicians. stephen: i can confirm through the business associates of jimmy lie, mark simon, he has sent me an email confirming jimmy lie has been arrested. he said the lawyers are on the way to the police station. the tweets that have gone out

from mark simon and others, saying jimmy was arrested this morning within the last hour on collusion withly foreign powers. we need to get that confirmed from the police as well. it is also allegedly under the national security law, which is interesting because whether or not he has or has not been colluding with foreign forces, this security law is not supposed to be retrospective, meaning it is not intended to be used for past offenses. it will be interesting, deeper into this. the prominent activist joshua the former chair of one party who was banned from running in legislative council elections, he is tweeting, i strongly condemn the latest

arrest of jimmy lie. jimmy is the next digital chairman, the operator of the apple daily, the founder of the newspaper which has been a , at least in its editorial policy, allegedly pro-protester over the last year and a half. he is the founder of one clothing chain. it is a developing story that we will keep track of. is not the first one to be arrested under this new law. we had students being arrested because of allegedly inciting secession on social media. tell us about how widely implemented this security law has and because you mentioned the disqualification of candidates in the upcoming election. stephen: there have been other arrests of pro-democracy

advocates, not necessarily under the national security law gesture, -- attending an illegal gathering in terms of the honor were -- illegal tiananmen square in 1989. that commemoration was banned by police. joshua wong has been charged for that illegal gathering or participating. there have been others, including july 1, the first day of the implementation of the security law where people who were carrying placards are advocating independence or self-determination were arrested under that. colluding with foreign forces, going back to the jimmy lie arrest, if that is the case, under the national security law, there are provisions some more sensitive cases that involve state secrets could possibly be tried on the mainland.

that is something the entire camp here in hong kong would be your full of. -- fearful of. haidi: we have seen the crackdown on activists and dissidents in hong kong. is it symbolic? stephen: let's talk about that statement. it is coming up from the united states, u.k., australia and canada. they put out a statement condemning the postponement for a year legislative council elections as well as the implementation of the security law. this is a tweet from the u.s. secretary of state. he says there is a deep concern over this security law which alliance,he five eyes they say the national security law is eroding the hong kong

people's rights. and we saw the united states, the treasury department sanction 11 officials tied to the implementation of national security law including carrie lam. shery: stephen engle with the latest. on thatus updated developing story. more perspective on hong kong's outlook ahead. scott kennedy joins at the bottom of this hour. this is bloomberg. ♪

check let's get a quick of the latest business flash headlines. qualcomm is putting pressure on the trump administration to let itself components to huawei, saying this could threaten

revenue to foreign competitors. the wall street journal says it is lobbying to be allowed to sell 5g chips because foreign rivals have access to markets worth $8 billion a year. cited samsung and mediatech as examples. twitter has had for luminary talks with a deal with tiktok although the outcome is unclear. ,arket -- microsoft is favorite with twitter seen as a long shot . the white house has given the chinese owned up until september 15 to find a buyer for its platform. the administration has barred american companies from dealing with its company bytedance. buy one talks to software maker for about $5 billion. we are told they have entered exclusive negotiations and the deals for the california-based company could come within weeks. softbank's vision fund is a minority holder, and bloomberg

has reported it has been working with advisers on a sale. china continues to offer the nation's first inter-coronavirus crisis will be the first data to come out, showing accelerating recovery. retail sales may have stopped -- stopped shrinking. this morning we have cpi and ppi data. let's bring in the head of economics and strategy at mizuho bank. this works out well when you have a massive domestic market. is that what is working in china's favor? >> for china, what has really driven the activity has been two things. one is the resumption of industrial production. part of it exaggerated by low inventory going into the phase one deal before the lockdown

came up. the ability to shift reduction to respond to the pandemic has also helped. also the activity to get back into the property market has also infected whereas the underlying demand has been somewhat less enthusiastic than the other components. china's recovery appears to be a little bit smoother than what we are seeing elsewhere, where there has been -- haidi: in the most recent comments, he said policy will be more flexible and targeted. we will see more given we are getting credit and new loans data. if we see the same case of continued recovery, the pboc don't need to do anything extraordinary. sense is the statements is

it will not be anything that will be earth shattering here. traditionally from a credit point of view it is unloaded in the first half of the year anyway. in this case they need to respond to pandemic as well which is a lot of this has been -- frontloaded. the flexibility for the cost of the narrative will be determined not just by the pandemic but what goes on with u.s.-china. you can't predetermine the outcomes. to some extent they want the flexibility because of the legacy issue in china. not need to be targeted and a drop of stimulus in any case, which is why the script will be made up as we go along. shery: when will the demand side of things catch up to the supply recovery in china, because it

has continued since the pandemic with industrial production doing well but not being reflected whether it is retail sales or the services side of things. >> that is the $1 million question. that tends to be the issue because it is hard to predict when we will get the coordinated coming back not just for households but for businesses to get into investment, capital expenditure and expending business. expanding the business. we could get stuff picking up. some sign of relief but bear in mind it is falling in 2019 as well. beat.a soft we see further extension so again this is going to be confidence. it will be more caution into spending for a sustainable and more emphatic demand recovery. it probably will not reveal

itself until late 2021. in the interim, all of these uncertainties will fall back demand recovery. shery: this is a economy reliant on how the global recovery goes. we get final gdp numbers out tomorrow. will they be as bad as the preliminary figures showed, and what does it mean for policymakers? >> it is definitely something we want to watch. going to give a bit of indication of how the conditions are. our sense is it will do worse. primarily because it is in the numbers, disappointing for q2 with respect that things were already downbeat. the service sector doesn't move in a big way, which is doubtful given the -- what will happen?

we will come back from a 12.6 year on year contraction to a 13% -- essentially the story is afc for thethan first half and the recovery will be pretty tentative. very quickly, in terms of the space the r.b.i. has, it was a surprise old. we are expecting a contraction of more than 20% on the year. the numbers are ugly but is the central bank stock? -- stuck? >> you nailed it. i will not try to rephrase that. they are struggling with stagflation, but they will ease, but in the meantime, what they will do is introduce liquidity and increase credit conditions.

whatare trying to -- inflation get mellow from where it is right now. at the end of the day there is no demand for inflation. the r.b.i. will be set to ease further. investors across asia if you data. great to have you with us. when it comes to india don't miss a big interview -- modi government's chief economic advisor joins bloomberg markets later. decouple, scott kennedy takes the temperature of u.s.-china relations. this is bloomberg. ♪ his is bloomberg. ♪ you doing okay?

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china with as. and so-called phase i deal expected to happen around august 5, 61 after the agreement took effect. let's bring in scott kennedy, from think tank csis. to have you. great it seems on every front, whether it is the hong kong sanctions, the issues around hong kong, immunearound tech, how will the train negotiations be, given that tensions are

escalating everywhere else? that: well, it is amazing despite the storm, it is now the u.s. china relationship, and whether china or xi jinping want to jump the deal, but with trump, it is about farmers and the sales they can make from red states that helped him in the election. xi, it is about stability and keeping things from collapsing. but it is not fully immune from a downturn in the relationship, so it is not necessarily going to stay forever, but right now, it is hanging on. shery: in the meantime, we just had news that a media tycoon was withted for collusion forces in hong kong. as we continue to see the national security law affecting more and more people in hong kong, how will that affect the u.s.-china relationship? how much worse will it make it? scott: well, i think what we are

seeing is, every single day, the trump administration roll out a new action on beijing on tech or finance or some other area, and the language or rhetoric keeps going up, and on the chinese side, they have decided that hong kong is a chinese national security and sovereignty issue, so they are implementing this about in as tough a way as they possibly could, and that is not good for the relationship, for the china relationship with the rest of the world, the u.k. and everyone else watching things, too, and it is really sad to see what is going on over the last few months. scott, how much continuity in this policy and in the frictions do you expect to see regardless of what happens in november, because we know that the betting tough on china stance is one that garners bipartisan support in the u.s.? scott: well, i think it is,

regardless of whether trump is being elected or biden takes office in january, the overall sentiment in the united states is not going to change, because china is not changing. it is pursuing a much harder line on foreign policy and economics, with hong kong and elsewhere, but i do think overall foreign policy will change. if you watched the vice president's speeches or those of his advisers, he actually once to do a much better job of engaging with allies and friends -- he actually wants to do a withbetter job, and also climate change and dealing with the pandemic, where there is more likely had some common so i think there is a greater possibility of finding greater stability in the u.s.-china relationship even though there will still be tension. shery: we have also seen the

targeting of tiktok and wechat, on the back of the drama of huawei, so are all chinese tech companies up for grabs and in the firing line? and, conversely, i am wondering if china defends all of them in the way they defend their national champion in huawei. scott: it is possible. the trump administration is not short of creativity and a list of actions that they could take, so some companies, like alibaba or some of these and other spaces, the trump administration could point to things, problems that they cannot solve, that they want to block them from the american market for, and, certainly, the chinese can respond in kind with retaliatory measures or in other ways that show they are less open and are not going to give in. xi jinping is probably under a rate deal of tension.

the twonot a time for sides to be negotiating a full cease-fire and stabilizing their relationship. i do not think that is going to -- some quite seem time. scott, we have the highest level visit in some time going on, but it could also -- show commitment to the region and deter or avoid any conflict in the region, as well? : well, certainly could, and it is part of the administration's effort to show more concern and support for taiwan, although it does not violate the one-china policy in any way. the last u.s. cabinet official was there in 2014. actually, i think the most

important news from this trip is not necessarily on the u.s.-china front. it is on the pandemic front. taiwan has done as good a job as anyone while the u.s. has done as bad a job as anyone, and i hope that secretary azar has his notepad and is taking notes of what taiwan has done and shares it with the president, and then they can do with the pandemic challenges, because, actually, solving america's policies at home is a better way of dealing with challenges, like china. shery: scott, you mentioned the pandemic, taiwan, hong kong, the human rights issues. what else? we have the tech war. have we hit rock bottom in terms of u.s.-china tensions? what else is left out there to have tension on? scott: the list is quite long. let's go with one of the most important, that the u.s. moves

ahead with some of their most important restrictions on finance. the trump administration essentially coming out with their own policies to push chinese companies off of american security markets in the beginning of 2022, instead of giving them a three-year window, as congress would like to. that would lead to financial decoupling. and probably most of them, one way or another, is reversible. the real challenge is if there is a conflict in the south china sea or over taiwan, that is really lights out on any type of engagement or even modified engagement, so we really need to avoid that type of hostilities breaking out. shery: who loses out more than? because all things are not equal. for example, you talk about journalists having their visas revoked. there is plenty of other journalists covering the u.s.. there are not that many journalists covering china. is the favorable skewed to china

being able to cut off its markets? aott: well, i think in decoupling scenario, where both sides really pull up stakes from their economic relationship with each other, how it is going to win out depends on what the rest of the world does, not just what the u.s. and china do, so what does europe do, and i think it will be much more messy than some sort of bifurcated group going with the americans and the chinese. but at the end of the day, from the point of view of an economist like myself, less trade, less investment, less people to people ties is going to be bad for everyone economically. now, from the national security point of view, it is about relative gains, and i think the u.s. is generally well positioned and has the upper hand in terms of technology and overall power, but i think the choice is, can we figure out a way, short of full scale decoupling, to both walk and

chew gum at the same time, compete where we need to compete, protect ourselves where we need to protect ourselves, but also do things together. shery: you make it sound so easy. scott kennedy from csis. we will get more on the rising tensions between the u.s. and china throughout the course of the day and hearing from some guests. all right, let's get you a check of how markets are doing. shery? u.s. stocks and mixed, and not to mention the better than numbers comedy kospi -- numbers, the kospi higher, as , andas old stock slipping

copper futures are higher by one quarter of 1%. this after the worst session for copper in three months. chart on thet this bloomberg. copper surging for a second month in july. plenty more ahead. this is bloomberg. ♪

reporter: you are watching bloomberg. jimmy lai, hast, been arrested and detained for alleged collusion under the sweeping national security law of china. said thatril, lai china would kill the goose that lays the golden egg and would mean the end of hong kong. meanwhile, protecting the november election from medley, warning anyone who tries to interfere will face consequences -- protecting the american election from meddling. russia would like to see trump win, while china and iran would like to see him lose. ony declined to comment recent talks between president trump and vladimir putin. than new survey said less

one third of the u.k. population would accept vaccines. says they are more likely to refuse a vaccine despite covid-19 deaths above 46 thousand. researchers say large parts of the u.k. population are unclear about the information and misinformation surrounding the virus. minister,se prime shinzo abe, says we must avoid another virus state of emergency, suffering and economic blow from the pandemic. economists expect the gdp to have declined more than 20% in the second quarter, which would be worse than what was seen in the financial crisis one decade ago. allocated money. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. haidi? had itsustralia

deadliest day in the pandemic yet. you continue to see the strict confidencehaking across nations, but our next guest says there may be cause for some optimism. an epidemiologist at the university of melbourne joins us now. great to have you. we are talking about the department of health and human services in victoria changing the way these 24-hour virus numbers are presented. it is interesting, because in your view, we should not be focusing so much on the daily spikes, which could be 800 one day, 100 the next, and what does it tell you in terms of how the lockdown is working? week ago, the numbers were spiking up and down, no fault of the hhs. a five-dayu do moving average for that, you get some reassurance, and the first one is that the peak appeared to

happen around 30 july, which is about seven to 10 days after we all started wearing masks, so it makes sense. it went flat for a week and went down. i think heading down, we cannot frome will see that wednesday this week through the weekend numbers, but what is happening is, i suspect, the increased in control and the fact that we have all been anticipating stage a few are, probably modify our behavior -- 4,.e four are -- stage haidi: right. in the meantime, you look at the strictest measures in the western world, very similar to what we have seen in victoria. is the problem not the fact that we expect if we keep up these measures we will be able to crush the virus? what happens when you gradually reopen? because it seems like human

behavior just cannot, you know, persist with these guidelines that are needed to keep it under get an until we effective, widespread, and long-lasting vaccine? yeah, there are two strategies. the first one is that we go for and achieve elimination. that looks like a big ask. that is what new zealand has done. victoria to go for elimination at the same time, but if we do that, it will require people like myself to provide estimates in three weeks time so we can as a society make a decision, because it will probably mean probably mean , -- if we do do that, we can look and see if the quarantine is good. the other future scenario that is that we get low

numbers, and the virus is in too many nooks and crannies. with widespread mask use, very good contact tracing, very good support for people who have the infection and isolating them will much be the stuff we are doing, and we could look for some virus at low levels. those are our two optimal scenarios. going forward, i am not sure what we will see. the scenario of living with the virus at low levels, does that give some herd immunity? i have looked at studies out of florida, for example, which suggests that almost one quarter of the population may actually have antibodies that suggest heard immunity. is that useful in any sense? is an important question. if australia went for a suppression scenario, i doubt we will get anywhere near the levels in florida, where they

are getting a lot done, 1%, 2%, maybe 3% by the time the vaccine arrives, which is not going to give you very much herd immunity. florida is interesting. thinkl appear that people of the united states as 10 times the numbers we see in the official data. if that is true, then about 10% to 15% of u.s. citizens are already infected. and that means that they have a partial herd immunity. it is not a lot, but when you add that on top of, say, wearing masks, that are contact tracing, handwashing, that herd immunity helps them, so the chaotic way they have managed the virus, in a few are to six months time, you may see them to have partial --d immunity -- in four are time, you six months'

may see a partial herd immunity that is helping them. it seems right now that even mitigation is difficult. let's talk about the u.s.. i do not condone what has happened. but given to how they are managing it, they will continue to have relatively high infection rates, and we may sort of get on top of it, and that is not elimination in any stretch. they will get into a position where they will have some partial herd immunity, where if it were combined with all wearing masks, say, with good contact tracing, that could have an effect in six to 12 months time. is the process, but nevertheless, they will be in a different place from us in six to 12 months. the other example is sweden, which has had a deliberate

that ison strategy, but not as high as the u.s., and then you look at countries like india, whereby just controlling the virus, it is just not possible. you cannot do it, so they will have some herd immunity. now, as far as the immunity, i about immunityt that is lasting, that may not be exactly correct, but there will be some that will last for some amount of time for the majority of people. anchor: so quickly, tony. what happens if we get a vaccine? we have seen locking up nearly one billion doses of potential vaccines. what if the emerging nations do not get it? can you still use travel restrictions at that point? that is a complex situation that we have to see unfold. i hope that the vaccine will be

made available as quickly as possible to as many countries, although it needs to be prioritized. seemingly, it would go to those countries who have the highest need. for example, from the new zealand point of view, they may be low down on the list, because they do not have a pressing needs. once the vaccine starts a rollout, and this is assuming we get a vaccine, the countries will become far more comfortable about opening up borders to those who have been vaccinated. to have your great insight from the university of melbourne. we do have more on the bloomberg right now out of south korea, the daily newspaper is saying that the south korean parties will be discussing a budget that, according to the ruling course, the south korean government has already pledged more than $225 billion or roughly 14% to extra budget measures, and we have not heard

from the finance minister. but wew their budget, are now getting local media saying the ruling party may be discussing a fourth extra budget. letting more to come. this is bloomberg. more to come. this is bloomberg. ♪

anchor: months of protests and the coronavirus pandemic have weekend the property market. 7 billion dollars from the real estate moguls, with the hong kong real estate reporter joining us now. changesrising given the they have faced. what is the situation for the tycoons in the city? >> good morning. so like you said, it has been a very tough year for the hong kong market, so like everyone else in the world, hong kong is struggling with covid, which leads to lower traffic and higher vacancy in the offices. there is a reluctance to go outside now. konghat is unique in hong is the aftermath, the protests. last year, tourists avoided hong kong, and protesters disrupted operations, so landlords started the year with very weak operations, so the latest earnings show real estate

a loss of almost $1 billion in devaluation to a portfolio, but going forward, they have to find traffic to the malls to covid and to inspire confidence in an increasingly pessimistic outlook. anchor: yes. the macro outlook is not great. where do they find new avenues of growth? >> going forth, they went to increase exposure in the mainland. as there is expansion in the greater bay area and additions from the government that could be on top of the development for benefiting, like some property companies, with luxury malls in china in the past few months. they had contained the virus locally. i expect more hong kong developers will do so, enhancing their exposure in mainland china.

ok, our hong kong real estate reporter there. into thest listening australian prime minister, scott morrison, speaking at a press conference in canberra, commenting on the control factors when it relates to the coronavirus, in victoria, in particular, saying he is more hopeful when it comes to the virus surge in victoria. we have seen lower case numbers, however two straight days of hire fatalities. we had the latest data out this morning saying we had 19 deaths, which would be the worst day for fatalities as they continue in reallytions and that serious lockdown that is in place. that is the australian prime minister, scott morrison, speaking in canberra, addressing some of the economic ramifications of the shutdown, as well. lots more to come as trading

continues. trading in to the shanghai and hong kong and shenzhen. this is bloomberg. ♪ >> on the basis of what we have followed. ♪

>> it is 9:00 a.m. in beijing and shanghai. i'm tom mackenzie. david: we are counting down to the open of trade in the chinese mainland and hong kong. tiesop stories, u.s.-china facing further strain over a rare senior diplomatic visit to taiwan. washington is sanctioning hong kong officials while prominent democracy advocate jimmy