haidi: a very good morning. i am haidi stroud-watts in sydney. shery: i am shery ahn in new york. welcome to "daybreak asia." asian markets looks at for gains after tech lifted wall street higher. the s&p 500 rose above its february record. treasuries climbed. the dollar pulls back. bhp reports full-year net profit just shy of 8 billion u.s., a 4%

fall on year and below analyst expectations. they confirmed plans to exit thermal. u.s.-china relations sour even further. --jing says the tax let's take a look at how we are shaping up for this asian trading day. u.s. futures within shouting distance when it comes to the regular session of that february record but then retreating by the close. we are seeing not much happening when it comes to active futures contracts. the nikkei 225 looking weaker going into the open. chicago futures trading there. the topix in the meantime remains the best-performing market in august. we will see if it continues those gains today. ftse futures looking like we will open up higher by .4%. the data calendar for the day, we get the rba

august meeting minutes, looking into the details of their bond buying as well as the renewed assessment of how that new victorian lockdown will barter economy in those monetary policy settings. also watching crude, we are seeing weakness, just holding over $42 a barrel although we did see a general rally happening before the opec-plus meeting on tuesday. we are expecting the assessment manageddeal given they to revive some of the output that had been cut during the pandemic without sacrificing too much in terms of vices and broadly for commodities, we are seeing that rally alongside crude prices. also adding.s. additional restrictions on huawei and cutting its access to commercially available chips. it is the latest move in an increasingly tense relationship between washington and beijing. andhen engle has the story joins us from hong kong. so what are the new curbs? stephen: the new curbs add to

what the trump administration announced in may that a sickly, those export control measures prohibited foundries from making specially designed chips for huawei based on their design using american equipment and almost all the foundries use american equipment from the likes of applied materials and lam research, but these new restrictions coming from the trump administration add 38 huawei affiliates in 21 countries to an economic blacklist as the u.s. tries to limit the adoption of huawei's 5g technology globally and analysts are saying the new restrictions are likely to further hit huawei's stations and smartphone businesses because it relies on those foreign ships to make those and the foreign foundries that use american equipment as well. huawei's stockpile of certain self designed chips essential to the telecoms industry and equipment will run out in early

2021, within the next few months so this is a critical blow. wilbur ross says the new curbs that did come down from the commerce department are aimed at closing loopholes that huawei exploited or explored after previous u.s. actions we saw in may. donald trump did speak on this. he's telling fox news we don't want huawei gear in the united states because "they spy on us." , he pompeo in a tweet praised the move as a "direct blow to the communist party of china, not just huawei." haidi: and in the meantime, we are seeing some interesting developments. lobbyist in washington beefing up their ranks to try and take this battle over wechat further. stephen: absolutely.

those two executive orders donald trump put out on wechat and then as well on tiktok, there will be some fight back from the chinese companies, obviously, and tencent hiring its first d.c. lobbyist, they have recruited roberto gonzalez, a former treasury department council, and obviously, they want to get into the halls of power and see what they can do to try and change some minds of lawmakers and see if this can be averted so there is a 45 day period that u.s. businesses and consumers are given where they have to stop using wechat. north asiachief correspondent, stephen engle, with us. still ahead, a management their cofounder and ceo joins us next. this is bloomberg.

♪

karina: you are watching "daybreak asia." i am karina mitchell. house democrats plan to add 20 $5 billion for the u.s. postal service to legislation that for a vote on saturday. bloomberg learned the measure would prohibit cutbacks ahead of the november election when millions of ballots are due to be mailed out. the move comes amid a wider stalemate in the stimulus measures and worries that voters may not receive ballots on time. the democrats are pioneering political conventions with an event to nominate joe biden and kamala harris that will be almost entirely virtual. speakers will address delegates from around the u.s. with the whole event streamed on the internet and broadcast by traditional news outlets. speakers include michelle obama, bernie sanders, and other

democratic leaders. belarus is sliding into chaos amid a growing national strike and mass protests against alexander lukashenko. he is refusing to step down after claiming a landslide win in last week's disputed election. he is offering constitutional reforms but observers say he may not retain credibility. he has been in power since the breakup of the soviet union three decades ago. satellite research shows the accelerating melting of ice shelves in antarctica. the study suggests the continent has enough potential amount enougheltwater -- meltwater to fill the grand canyon. trips toesearch antarctica this year have been canceled due to the coronavirus. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg.

haidi, over to you. with the recent rally in -- however,kets august may pose a challenge amid a resurgence of trade tensions, uncertainty about the new u.s. stimulus bill. our next guest is optimistic. the cofounder is and ceo of a management company. great to have you with us. of course, when we talk about emerging markets, they are not created equal at all. which one do you like at the moment given we have had this pretty resilient recovery in china as a driver, stability when it comes to currencies and the weakness of the dollar playing in as well? >> thank you. right now, north asia is a market darling, and that is for two reasons. the most obvious of course is the superior handling of covid

and consequently fewer shutdowns but the second reason is these countries have more fiscal room to absorb stimulus measures without blowing the budget or the currency or the credit rating, and that is a big advantage. [crosstalk] haidi: sorry, continue. teresa: no, i was just going to add that we have also seen broader stock market performance . korea, for example, if we look at recent stock market performance, the best-performing mid-caps caps and then and then last of all, the index in general. that is the opposite of the u.s., which has had this narrow rally that has really been focused around the tech companies, so i think that really does reflect what is going on in the economy even though, as we know, the markets are quite decoupled from the economic picture these days.

shery: it is interesting. we talk a lot about market breadth or the lack there of. when it comes to the u.s., we are driven by growth and tech and we continue to wait for that andtion into cyclicals value. but do you see more breath when adth when itbre comes to these markets? is that actually the case? it is very interesting. in the recovery from the fall in march, it has not been led by tsmc inin korea or taiwan. it is smaller cap stocks that are leading the way which i find very interesting. part of that of course is that some of these smaller cap stocks are supporting the digitalization of the world economy. course the biggest

theme in the world. for us, we believe the new economy is the economy and a lot of these stocks, even though they are smaller in size are supporting digitization everywhere, whether for theom the support 5g base stations or to data centers or other parts of the infrastructure needed for a digitized world. shery: this gtv chart on the bloomberg showing how amazing the rally has been on the kospi. we have seen nine straight days of gains and we have halted a little bit on friday still in overbought territory. does overbought mean that the rally has to stop or will it continue given the factors that you just mentioned? teresa: it is so hard to predict because this is such a liquidity driven market. we just had an announcement yesterday from the people's bank of china that they are putting

another $101 billion of liquidity into their market. could there be some rotation from korea back to china? china is promising a flood of liquidity. that is certainly possible. i would say we are probably on this liquidity slip and slide for a while longer in all of the north asian markets. shery: what about the rest of asia? southeast asia, for example. when you talk about these new economy stocks, tech stocks, it seems to be focused on those north asian markets, especially china. what about the rest of asia? teresa: you know, it is this is ag because in esg which specializes improvement stocks in the mid-cap state. we have been able to find

digitized companies, e-commerce companies, platform companies, simtech companies, that are not mega caps in countries that are outside of north asia. indonesia,, russia, thailand, philippines, where they do not have the rate reserves of venture capital ready to put into companies to keep them private forever. so they have had to tap the capital markets a little earlier and that has given them a nice opportunity for us and i would say brazil is another country that comes to mind on that front. how do you trade volatility re the u.s. election? teresa: [laughter] you know, we don't. we try to stick to our process. we know the fair value of all of try topanies and we

stick with that. i would say from a risk management point of view, we do understand that a continued trump administration could lead to the delisting of chinese companies from the u.s. and even to increased pressure for certain pension funds not to invest at all in china. unfriendlyery market type of policy but it has been signaled by the current trump so, we do try and to not put all of our eggs in one basket so we have eggs andide of the china sphere we also have some eggs in the recovery stock basket. even while our stocks have done very well by being overweight the new economy in this recovery period, we do realize there will

change of regime when covid is no longer such a big threat, so we are also being prepared for that. do you treat hong kong as an extension in terms of risk asset the way that you would mainland chinese assets now? teresa: that is so interesting. we have a couple of hong kong companies, and both of them really cater mainly to the chinese domestic market. what i have to say, while i law inhe rule of hong kong, there are two things that irritate me about the way the hong kong market is run and they could learn actually from shanghai and i am surprised to hear myself say that as a corporate governance advocate, arein mainland china, there dual class shares which are not

allowed and they require quarterly reporting. very irritating to us that hong kong is allowing dual class shares and also that there's only semi annual reporting, so the disclosure, that really means the disclosure is worse. i love the rule of law, but there are some things i have to give china, which has not covered itself in glory on corporate governance, little credit for. shery: good to have your views. teresa barger, cofounder and ceo. in a moment, we will discuss westpac, and it scrapped its first half dividend to protect its balance sheet. analysis, next. this is bloomberg. ♪

haidi: we are getting some breaking news. more bad news out of boeing. the plane maker said they are planning more job cuts. boeing set to share details on august 24. the job cuts are said to extend beyond the initial 10% target that was sacked. the boeing ceo giving those comments in a message to internal employees that boeing is planning more dog cuts through a second voluntary severance. we have had since about may, 13,000 boeing workers, mostly in the u.s., losing their jobs over a number of weeks. these cuts taking place not really just because of the pandemic which caused travel restrictions and the lack of demand for air travel but of course, all of these issues over the 737 max. it is still trying to get that back in the air and we heard that cancellations for the max have topped 400, shery. shery: we also have breaking news out of canada. the finance minister is

resigning as canada's finance minister. he has been at the post since 2015. we heard he had been in disagreements with justin trudeau over ballooning deficits. he has disagreed over the huge amounts that canada was spending to combat the coronavirus, not to mention about some multi-did billion dollar greek -- multibillion-dollar green initiatives. he is now resigning from his post. let's get a quick check of the latest business flash headlines. tesla's rally has driven the valuation above that of procter & gamble as investors bet elon musk will be able to dominate the auto market of the future. the stock closed up 11% on a record despite reports of a fall in registration last month. tesla is up more than 300% this year with a market value of more than $340 billion. hasos chinese order

reported a fall in profit as the coronavirus shutters plans and hammers demand. net income through june -- cutting annual sales targets to 1.3 million vehicles from 1.4 million vehicles. the pandemic has exacerbated an auto industry slump that has been threatening on for two years. bhp reported full-year net profit just shy of eight billion u.s. dollars, a 4% fall on year and below analyst expectations. the miner confirmed plans to offset coal. it was underpinned by high iron ore prices in june. the growth rate moderating over the longer-term sees exploration spending at about $7 billion. witht miss our interview the bhp ceo later on bloomberg markets at 11:30 a.m. if you are

watching in hong kong, and 1:30 in sydney. a look at's take another australian company. we will be watching westpac when shares start trading at the top of the next hour. also increased provisions for bad loans. our reporter joins us on the line now. are all global banks at this point in time. we are talking about the same themes. what stood out to you in this trading update? emily: there are big things going on worldwide but what really stood out is the fact that they decided to completely scrap their dividend. they are the first to do so. australia bank shows reduced dividends. we will get an update tomorrow on it. they were talking about this the whole world over. shareholders have seen dividends rise in the past few decades so

shareholders, this will be the moment when the crisis really comes home. shery: what are we expecting from the rest of the industry? emily: i think in a way, more of the same. as i mentioned, two of the other banks have paid dividends but everyone is clear that we are now into a much lower dividend outlook. the picture is complicated by the fact that so many people are on mortgage payment holiday. come not really until they to the end which will be next year now that we are going to get a picture of how many people are really able to resume their repayments and how they will be forced into sales. that is when things will get much clearer for the whole industry. emily,to what extent, are we seeing all of that being glossed over, at least, i guess papered over by the fact that we are seeing the enormous amount

of fiscal from the government coming through the? emily: i think that is everyone's concern. there's so much stimulus in the economy at the moment was from the government and also from what banks are showing. they are doing everything they to keep businesses operating but in a way that is pushing problems further down the road. all of this comes back to the health expectations. community transition was stopped and the economy bounces back, that is one story, but if things continue the way they are, clearly, glossing over things is not possible forever. see the big do you sources of stress? is there any indication that this is an incredibly resilient property market we have seen across major cities? it is exciting to show pressure

from the pandemic. emily: we are starting to see some signs of strain. that is partly for obvious reasons. the pandemic has stopped international migration, international students who are more likely to live in apartments, so we are being big rental vacancies in the apartment market which hurts investors. in the more established home market, in many high-end suburbs, the signs of stress are lower because there's so little stock in the market that we have not got a huge read of what is coming through, so you know, for now, the market is pricing in resilience. that is not to say prices are not down. you have not seen the clip -- the cliff edge like another times. shery: emily cadman joining us from sydney. we are hours away from the democratic national convention. we have a preview, next.

this is bloomberg. ♪

karina: you are watching "daybreak asia." china is hitting back at president trump's ban on tiktok in the united states, saying his demand that by don's -- the company must sell it is the rhetoric of robbers. the two signs are trading barbs as relations deteriorate with planned trade talks postponed indefinitely. new figures suggest u.s. coronavirus infections are slowing despite cases approaching 5.5 million. arizona reported no new covid-19 deaths while california's members were less than its 14 day average.

the summer infection surge may be slowing down. spain and italy -- france says virus indicators are trending up words. singapore announced new virus stimulus worth 6 billion u.s. dollars, extending -- aviation and hospitality. the program adds to the total package of $73 billion and claims not to need additional funding. the economy is shrinking a record annualized 43% in the second quarter. hong kong is extending social distancing curbs for a week on august 25 including a dining ban at restaurants, two-person limit at tables, and mandatory mask wearing the resurgence could threaten health services and people should prepare for a possible surge in covid-19 cases as winter approaches. the economy remains under threat from the outbreak.

global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. sharing. -- shery. shery: we are ours from the start of the virtual democratic national convention. the speakers include bernie sanders, michelle obama, and even some republicans. joining us now for a preview, charles myers. great to have you with us. let's talk a little bit about this convention, done virtually. i mean, one of the big points of a convention is to generate as much excitement as possible, have voters come out and vote in november. can you actually achieve this virtually? charles: that is a great question, and you know, it will certainly be new for both parties, democrats and republicans, and we will see how it works over the next four

evenings, but it certainly will lack that in person very large crowd excitement that is generated by live events. the one thing democrats are taking some comfort from is when joe biden announced his pick of kamala harris for your, that was done in an essentially virtual format and did generate quite a bit of excitement so it's possible i guess and we will find out over the next four days. tory: will she be enough sway the swing voters that are still undecided right now? charles: party conventions don't change voters minds either way. they are really designed to help unify the party. they are designed to help hone or fine-tune the messaging of the party and very importantly to try and generate excitement, and therefore voter turnout on your side. i think both parties can achieve that at the respective

conventions. the big thing people will be watching for tonight on the issue of unity, party unity, is bernie sanders. there is some question on whether or not he's going to really issue a call to arms to unify behind joe biden or is going to push of his own policy agenda items where he disagrees with joe, things like medicare for all, greenwood deal. something people are watching very closely for tonight. years ago, the bernie sanders, gets walked out of the convention -- bernie sanders delegates walked out of the convention in protest. bernie will be watch pretty closely. haidi: bernie does have some of the most fervent of supporters, so in terms of polls, which i'm hesitant to refer to too much given all of the hard lessons ,earned from the last election

brexit and other occasions, the cnn poll suggesting a shift to the trump camp. are you looking at that and thinking biden and harris should be concerned? charles: first of all, our base case is for a democratic sweep in november. we think biden will win and the democrats will actually flip the senate. they will have a one seat or two seat majority. we have also been saying president trump, who just started to turn his campaign around, will start to get a balance in the polls and run a theer campaign and that polls will narrow into the fall. on election day, it's going to be much closer in the polls that it has been for the last couple of months. gottennt trump has better around messaging for coronavirus, hinting there will be a major breakthrough on the vaccine side, continuing to push to reopen the economy,

continuing to beat up on china, be hawkish on china. all of these things that getting more traction. the poll over the weekend was not a surprise and i think we will continue to see the president do better in the polls and lead polls, see the margin narrow. biden-harrisre the campaign policies for communicating a containment policy post november? is that a straightforward signal for the markets, even if you do get other peripheral policy changes like the capital gains tax? charles: one of the things we have been pointing out is that if there is a democratic sweep in november, we are looking at the biggest regime change in the united in modern history in terms of how very different policies will be in that many of

those changes have not yet been discounted by global financial market and these are very big changes, in a potentially a very positive way for markets. first and foremost, a big increase in two corporate and personal tax, the most underpriced risk today in u.s. financial markets, but also big changes coming in some of the biggest sectors, health care, pharma, big tech, energy, so there's big changes coming and they will not all be market friendly but i think on the positive side, what the democratic ticket would like to communicate over the next four days is they are going to embark on the biggest infrastructure package in modern history, potentially up to 2.5 trillion dollars, a huge allocation to renewables them and getting the economy back up and running at be acan to work so it will very mixed message for the markets and hopefully a positive message for the american people. shery: how would a democratic --ep be painted by disputed

a disputed election given the crisis we are seeing for usps? charles: president trump will call into question the outcome of matter what, even if it's a pretty clear, decisive victory. we think on the day of the election or night of, biden's margin of victory in the swing states will be big enough to call it in his favor, but we would expect the president to continue to contest it or at least refuse to accept the outcome. in the end, the american people will go with whatever the end result is. they don't want months and months of uncertainty. i think it will be less of an issue than the postal service seems to imply. joining us.es myers great to have you with us. do not miss our coverage of the democratic national convention. bloomberg tv and radio will ,imulcast the special today 12:00 noon if you are watching in sydney.

politics, johns. bolton has harsh words for president trump from calling him "an anomaly with the republican but adding his lack of philosophy makes his mistake easier to correct. alton also talked about the legacy of an arms-control asset and fixture of the u.s. defense establishment. >> he was really a dominant withe in policy, beginning saddam hussein's invasion of kuwait in 1990 and the liberation of kuwait, the breakup of yugoslavia, the breakup of the soviet union, the collapse of the warsaw pact, the end of the cold war. it was busy back in those days, and you know, he was a very and obviously, somebody that george h w bush knew very well, which is why he made in national security

advisor. >> are you confident either party can get back to the grace of -- after a given length of a trump era? >> i think it gets harder and harder to do which is one reason why, for the first time in my adult local life, i'm not going to vote for president. i think we can correct what has happened after one trump term. i'm worried two might not be possible to correct. he is not the only cause of the lack of stability although he has made almost every aspect of it worse and i just don't even know how he would react to the way it is today. >> what does joe biden need to do to make it a one term trump? >> i will not vote for biden either. he and the remaining days of the campaign projects evenhandedness, steadiness, courtesy, a sense of humor, lack

of vindictiveness, being a normal guy would go along way. i think people crave it. even with many republicans who will vote for trump, they are not happy about that either and i think many of those people might yet vote for biden if he simply says you are my idea, but i'm going to pursue them in what we used to think of as a more civil fashion. >> ambassador, give us your sense of where the whole feeling of internationalism is. states sothe united well post-world war ii in terms of winning the cold war but internationalism seems to have taken a backseat in the trump administration, whether it is nato, the transpacific ownership, or other partnerships around the world. what is your sense of where internationalism is right now? an anomalytrump is

even within the republican party. one of the reasons i'm confident his damage can be corrected is that there is no trumpism, no trump doctrine, no trump philosophy, and that is one of the reasons why it is so perilous to have somebody like him in the white house, but it also means it is easier to police after its just one idiosyncratic response after another. i would say, in fact, that even under obama, there was a fair amount of isolationism. focusedobama was over on domestic issues and i think, into many cases, his idea of foreign policy was to leave it to the united nations to engage in multilateral diplomacy for the sake of it so i think america has got to pursue his interests. i think the right way to look at it is to summarize it very quickly, in a reaganesque way of peace through strength. >> where do you think the biggest security is for the

united states as we exit 2020? >> existentially, china is the main threat we face throughout the 21st century. i think russia is also a strategic problem because of its nuclear capabilities. i think the immediate problems remain, the threat of the proliferation of nuclear, chemical, and as we now understand better than ever before, biological weapons and international terrorism. these are problems we have had for 20 years. they have changed some of their manifestations but they remain threats to the united states. have: john bolton, and we breaking news. confirmation that bill lowered he is resigning as finance minister to the canadian post. he says he will make a bid for the post of secretary general and he is also saying he will step down from his parliamentary seat. of course, he is part of the liberal party. he has been finance ministers since 2015.

we have heard of clashes between him and justin trudeau about coronavirus spending. he is now resigning as finance minister. this is bloomberg. ♪

haidi: let's take a look at how we are setting up for the asian trading day. sophie kamaruddin is in hong kong. sophie: he is to set up in

australia ahead of the august meeting minutes. the aussie dollar above 72 while the greenback is trading near a 10 day low and in the bond space, we have the 10 year yield just slightly lower while the three year is adding just about four basis points this morning as the yield curve control commentary remains in focus. the rba pausing its bond buying operations after resuming those purchases after a three-month hiatus. that's switch out the board to check in on the focus when it comes to chinese markets. 300 is getting closer to topping its peak we saw back in july and over the past month, the gains for that benchmark have been led by value plays. check out the material adding more than 10% over that time, given commodities getting a boost for china's robust property investment and with that, switching out the boards, bloomberg commodities spot index

has been on a tear, looking to raise 2020 losses in the next few weeks, this after capping a seven week -- the best winning streak since 2013. as jake lloyd wright points out, the broad gains we have seen across the universe, that shows a paradox of gains for oil and copper on optimism over improving demand. we are seeing gains of precious metals being sued did buy a shift into havens. switching out the board this morning, we are seeing the yen testing the 10-60 level while we have the rcn just stalling this morning, indicating some hesitation when it comes to risk assets and nikkei futures in singapore coming online, slightly higher, little change with escape velocity after we saw the benchmark out of the

trading right. we have jgb futures this morning little changed ahead of tuesday's sale we are waiting on in japan, shery. shery: let's stay in japan because there have been questions about the prime minister's health after shinzo abe visited a tokyo hospital. he has been largely absent from the public eye but his economy minister denies any health scares. isabel reynolds joins us now. not surprising, all of this speculation about the prime minister's health, given back in 2007, after his first stint as prime minister, he had to resign because of some issues. >> right, that is the case. this time, what has happened is in the early weeks and months of the coronavirus outbreak, he was giving a lot of very long press conferences and explaining in great detail what the government's policy was to try

and control the outbreak and it has been very noticeable since the end of the session of parliament in the middle of june, he has not appeared in public very much apart from giving very brief -- answering one question to the press here and there, so there was already speculation swirling about what this meant. perhaps he was not feeling well. in the middle of that, yesterday, he went into hospital. some aides have described this as a follow-up check following a physical exam in june and that may be the case but nonetheless, there's a lot of speculation about how he does not look well. at the same time, some are saying it is maybe just a matter of taking some time off. his finance minister last night said it is perfectly normal to feel under the weather if you have not had a day off its cabinet andt's his other officials who have been urging him to take some time off. japan used to have a

rotation of prime minister's. what would it mean for policy continuity if he were to step down? they would not need to be an election necessarily to start with. first of all, we would publicity the deputy prime minister taking over briefly. the ruling liberal democratic party would probably hold an election to choose the next leader. there are several names that have been floated in recent weeks. one of them a former defense minister and one outside player perhaps is the current defense minister, harold. what would be interesting about him is he is kind of a cost cutter. he has a reputation of being so in the past. if he came in, he might try to do certain things differently so that would be something to watch out for in the coming selection. our politics reporter,

isabel reynolds, and tokyo. containment remains the key focus for asian economies but new concerns over a mutated strain of covid-19 are now worrying southeast asia. who says there is no evidence the mutation these to a severe disease but there are concerns it is more infectious. deanked johns hopkins josh what a mutated strain means for the fight against the coronavirus. >> we know all viruses mutate and this virus mutates at a relatively slow rate there to other viruses like hiv. one of the interesting issues is that there is a variant of the virus that has become quite common in the united states and europe and some virologists think it might be because it is more infectious, it is out competing the other variants of the virus. on theave a story bloomberg terminal saying southeast asia detected this mutated virus strain sweeping the world. what are they talking about?

this is a variant we find in europe and the u.s., but it could suggest it is more infectious or it is becoming more infectious than in the past. >> this particular variant has a slightly different protein on the outside of the virus which may allow it to grab onto the receptors a little tighter, a little more effectively, and as a result, be more likely to cause an infection. we do not know that for sure. some people really think that is the case. i suppose it has been detected in malaysia now, which would be evidence that it is spreading around the world. there is no suggestion as far as i can tell that it is more deadly, for example. it is just the virus that is now moving around. i do not think it changes any of the core things people need to do to protect themselves. >> we had the russian vaccine and many people around the world were reluctant to take it,

because they have not gone through the same steps as a vaccine would go through in europe or in the u.s., but does it give you hope that antibodies work or is it too soon to say? joshua: they called it sputnik to make it seem like a scientific achievement but it really was not. it was just an assertion that this virus -- that this vaccine is a good one, and there is no evidence yet for that. we will just have to see what the definitive studies show because you have to look at the effectiveness and efficacy of vaccines before you can give them to a lot of people. >> what do you worry about the russian vaccine, that it could have side effects or that it does not work against covid-19? joshua: both. they have not done enough studies. studies are underway for several vaccines and i think we will get some good data about whether the vaccines work and what their safety profile is and hopefully, at least one of them really does have a major impact on the

chances someone will get coronavirus. >> how do we understand outbreaks in schools? is it possible to see how the virus moves, who gets infected, and how does that help us reopen school safely? joshua: the recipe for reopening school safely is the same. get immunity transmission down and take caution. there seems to be plenty of people who are not following that basic guidance and i think we are likely to see outbreaks as a result. if the community transition rate is high, it is likely to get into schools and be disruptive. fromey get sick even just community spread. if you do not take precautions, kids can give it to each other, particularly older adolescents. just like we saw in israel, we will see outbreaks within the schools. we really want to prevent outbreaks in the schools because

that can make the whole picture worse and drive up community spread. >> what can you tell us about younger children? do they spread at the same as adults? a suggestion is that it is more difficult for them to catch it in the first place. less likely to get symptomatic. they do have -- they can pass it on. i think there's probably a little bit of benefits to being younger for the chance of getting sick but it does not change the need for precautions. shery: that was johns hopkins bloomberg school of public health vice dean, supported by michael bloomberg. let's get a quick check of the latest business flash headlines. boeing is to extend job cuts with a new voluntary offer as it widens plan beyond its 10%

target. the layoffs will be available to staffers in boeing commercial airlines unit. it serves the division and corporate operations. the ceo says the new aviation reality has opted the move, trying to consider -- prompted the move. action by virgin australia has been knocked back. the federal court of australia has dismissed the request to put alternative plans to creditors, having already agreed to sell the collapsed airline in june. creditors meet in three weeks to approve the deal. the pension fund of quebec says it has written off its investment in cirque du soleil. to buy an extra 10% came after long discussions with shareholders and topped $71

million investment in 2015. neither amount has so far been disclosed publicly. we will have plenty more, coming up on "daybreak asia." we will discuss the chinese market with a global investment company. this is bloomberg. ♪ ♪

>> welcome to "daybreak: asia." asia's major markets have just opened frederick. -- opened for trade. the s&p 500, rising above february records. the dollar, pulling back.

full your revenue coming in from continuing operations, just shy of $43 billion. that was more or less in line with estimates. the u.s.-china relations, down even further. lobbyists in washington are consider a possible ban. to sophietraight kamaruddin in hong kong. changere seeing little to the nikkei 225. we are seeing downside moves for the benchmark heading toward the 1600 level. the best-performing major benchmark in the world for the month of august. the yen, hovering the 106

handle. jgb traders will be watching a 30 year option. turning to south korea, markets reopening after the long weekend , as a country warns of another wave of infections. we are seeing the kospi losing .4% after a nine-day rally. we have the korean won suddenly back above 1185. investors will be watching for details on the short selling ban . is preparing a bill that would only allow short selling for korean large caps. waiting ona, we are the rba august meeting. changed ahead of that. you have the kiwi looking to extend its rally for the 11th

straight day. the longest streak since 1985. as for stocks, we have these benchmarks. turning to bhb, they slashed their final dividend by 30% boosting city profits. bhp shares moving lower this morning by more than 1%. let's check in on csl. we're seeing gains for the health stock. astrazeneca is to preserve vaccine.us vexin-- >> the everything rally seems to have returned.

you get u.s. stocks within shouting distance of a record. we are still back to that liquidity story given what we are seeing in the bond space. >> indeed. it does not seem to be as convincing as it was earlier in the year. suddenly got used to the idea that bonds and stocks could rally at the same time. we saw evidence of that yesterday. one of the areas you can tell that people are hesitating a bit , if you look at the aussie against the yen, that cross rate how good indicator as to confident people are in the direction of markets. even though the s&p 500 is on the verge of making a fresh high, the aussie-yen does not seem to get to the 77 level. it's been struggling there for more than a year. you can tell people are not completely convinced. it is not surprising. over the next few weeks, there's lots of reasons why people would want to hesitate a little bit.

the have the u.s. election process going through, the stimulus not put together. any moment, there could be new action against china from the united states. all of those things are making people a little wary. it is a most like a reluctant rally. it is not the degree of strength we saw earlier in the year. on the flipside, people still have enough of a feeling this market is in the -- is in decent shape. >> what is happening in the japanese stock market? despite seeing just a record contraction in the japanese economy. >> the contraction is not a surprise. people could see that was coming. one of the things which is helping is the general level of the japanese yen. although the dollar-yen does not look particularly strong.

you look at the yen, it has been falling against other major partners, such as the euro. that certainly helps japan. if you look at the way in which japanese companies have started to diversify, they are beginning to see some of the benefits from with china.anges we are also seeing early signs of car sales recovery. china had its best july for car sales. car sales globally had a good july. signs that japan is starting to recover. stocks a relatively lowly priced compared to some of the major countries in the world. japan has lagged behind for a long time. the kind of levels we see today in the nikkei, for example, we are still such a long way from all-time highs when you compare that to the u.s. and other parts of the world. japanese equities are not

globally expensive. you're also getting some of the things coming together, which we will see improvements in the third and fourth quarter for japan. >> good to have your thoughts. you can follow more on this story and all of the day's mlibng on the bloomberg at go. we will have more on markets coming up. we will talk opportunities in chinese assets ahead of the open. plus, we break down the earnings boom impactworld's from the coronavirus pandemic. we will discuss the outlook for bhp later this hour. this is bloomberg.

>> you're watching "daybreak:

asia." house democrats plan to add $25 billion for the u.s. postal service. the legislation scheduled to be voted on saturday. the bill would prohibit service cut to strengthen the agency head of the november election. the democrats are parent -- are pioneering the democratic national convention, which will be almost entirely virtual. the whole event will be strained on the internet -- streamed on the internet. speakers include michelle obama, bernie sanders, and other democratic leaders. canada's finance minister has uit

-- and as a government develops a radical new agenda for economic recovery. is sliding further into chaos amid a growing national strike in mass protests against the longtime ruler, alexander lukashenko. he is refusing to step down after a landslide win in last week's disputed election. reforms, butg observers say he may not retain credibility. he has been in power since the breakup of the soviet union three decades ago. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. benchmark stock is in line for the biggest gain since july 20. joining me now from hong kong is

eddie lau. the cio and deputy ceo at rongtong global investment. what is this telling us about the pboc? there were some concerns the risk and china would be the pboc acting too slowly. >> good morning. is a reason why we see a very strong asset by the pboc in the first half. then it moderates a bit. if you look at the economic data in both construction and consumption, also industrial data, you can see the recovery has been really strong. china has been leading the world in terms of recovery. do we need that much of an effort now? can we save some for the future? that is a good question to ask. that is what is happening. >> when you look at a shares, where are you seeing the opportunities? is at the same narrative in china of the consumption?

of consumers growing? of the demographic and the new economy stock? >> certainly. talk of consumption, health care, those are our favorite, long-term favorites. investmentrtunity in driven sectors. such as cement, instruction machinery, heavy trucks, construction materials. i think the first half, you can see the world market has been more liquidity driven. in the third quarter earnings, the market will be more earnings driven than liquidity driven. that is important. it is important to pick good companies. we look for the sectors that present a clear trend on structural growth, and industry

leaders. sectors that capture substantial earnings and are priced at reasonable levels. those are the companies that we see more opportunity in. >> we are seeing this rally driving chinese stocks take a little bit of a breather. the 20 day resistance, the trendline, 4800 has been the sort of problematic level for the csi 300, to be able to surpass that. when do you see that resistance being broken? what sort of drivers are going to drive this next leg of the rally? >> we do believe in fundamentals. timing.an call what but what we can understand is

that the research will guide us on a medium-term, where earnings growth will be. i agree. we should look after -- investors should focus on earnings and growth potentials. that are indeed subsectors are in a very good position for strong earnings, then also for [indiscernible] those are the sectors we want to spend more time on. at thisu avoid tech point, given everything going on between the u.s. and china? tiktok?s of tencent, are stocks we want to avoid for two reasons. one is the reason you mentioned. those are important. we want toson avoid is

short-termore stocks. eventually, we do think they will deliver growth and even higher prices. where we spent our time and energy on is consumer upgrades, and online consumption in china. 5gse are the areas, with coming up, we see very structural stories behind them. those are more domestic consumption's. we want to focus on those were having a lot of exposure to the u.s. where do you find the rally value when you compare onshore and offshore assets? both, in termse of the china assets.

in terms of asset allocations, we allocate more to onshore assets than offshore assets. first of all, on shore market is a much bigger market. it presents more attractive opportunities in both stocks, bonds, and credits. in hong kong, now is also an exciting time, where the hong kong exchange has undergone a second renaissance, since 80's. -- since the 1980's. we see opportunity around sectors like property management, trucking. i think the latest regime change does bring a lot of interest to the hong kong market. capital, we of our will want to put it on on shore

markets. >> appreciate your time with us, eddie lau. the cio and deputy ceo at rongtong global investment. ahead for cold, as well as iron ore. we will be unpacking those earnings. this is bloomberg. ♪

let's get a quick check of the latest business flash headlines. meigroup is to face great from the fed. the bank is being asked to explain how it spends the money --

citigroup claims a clerical error. robinhood is valued at more than $11 billion. it was valued by of -- at about $8 billion last month before posting trading figures for june -- 4.3ow $4.3 million daily trades for the month. wall street critics warn robinhood attracts young investors that may not understand the risks. in 2017, the maker of johnny tequilaurchased the brand cofounded by george clooney for $1 million. .et's take a look at bhp

this is how we are seeing trading going in the first few minutes of trading. seeing modest downside, .3%. -- down .3%. four-year earnings, coming in coal,estimates f offset by the booming iron ore. assets is he looking to get rid of, how will he change the focus? >> i guess you will be surprised that there was more focused on iron ore. really shoring up performance not only for bhp, but for rivals. it is those price gains that have really helped.

mike is really focused on reshaping the company around when he calls future facing commodity, things like copper and nickel. increasingly needed in batteries and the noble energy. energy.he renewable he wants to focus only on high-quality coal and iron ore. there will be review of oil assets. they will look to exit a smaller project in australia. it is very much about focusing on a greener, d carbon rising role in thatding a new world. >> what is bhp's outlook for the market them? >> -- then? ofit does not say the kind price gain we have seen in the past 12 months continuing. iron ore was up about a third so

for this year. that was largely due to the demand been really resilient through the pandemic, through the rest of the year. at the same time, we have seen supply decrease in brazil. expect chinese demand to also moderate of it. that will weigh on prices. david stringer, thank you.. mess our interview with the bhp ceo -- don't miss our interview with the bhp ceo coming up. >> this is part of our strategy to take a human centered design approach and offer a compelling set of

vehicles for our customers, for them to choose. they provide great value and a great selection, whether it be the bronco or the new mustang marquis. commercialfor vehicles. we are innovating on behalf of our customers, letting customers desired which of these -- decide which of these them.es best serve >> with demand on one hand and supply on the other for the new cars, can you produce enough? is there enough demand to over ask for the vehicles? be veryemand seems to strong for the f-150. even the one we are transitioning from. the new f-150 model is going to be more tough, more productive for customers. the bronco has over 165,000 reservations already. from anow working hard

production standpoint to supply even more broncos for our customers, more quickly. we are really excited to deliver that for our customers. >> what visibility do you have and the u.s. consumer at this point? the f-150 is more for the trade, the construction business, things like that. regularco, more for consumers, families. what are you seeing in terms of demand and ability to pay? >> like everyone, we have been impacted from the demand standpoint. commercialsaid, vehicle customers purchase vehicles for their livelihood. -- f-150 will be an fully to increase activity. it has a generator option. we are optimistic, cautiously optimistic, because the future is uncertain.

but this is a new vehicle. in your family for our customers. the response has been beyond our expectations. over 165,000 reservations. so as we look out, we are russia -- we are cautiously optimistic. we are taking a human centered design approach. >> coming up, the huawei backlist grows longer, as the u.s. announces further restrictions on the company's access to chips. we have more details next. this is bloomberg. ♪

>> you are watching "daybreak: asia." new figures suggest the u.s. coronavirus infections are slowing despite cases approaching 5.5 million. new covid-19ted no deaths, while california's numbers were less than its 14 day average. florida indicates the surge may be slowing down. spain and italy have closed that clubs. france says virus indicators are trending upward. a program will add to the total

package of $73 billion, claiming they don't need any further funding. hong kong is extending social distancing curves for a week until august 25, including a dining ban on restaurants and mandatory mask wearing. they say the economy remains under threat from the outbreak. the accelerating melting of ice shelves in antarctica. the content has lost enough potential water since 1994, enough to fill the grand canyon. themelting accelerated in 2000's before slowing once again.

several trips to antarctica have been canceled this year due to the coronavirus. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. karina mitchell. this is bloomberg. >> the u.s. is adding additional aimed atons on huawei, cutting access to commercially available chips. the latest move in an increasingly tense relationship between washington and beijing. stephen engle has the story and joins us from hong kong. give us the latest on these new -- give us the latest on these new curves. >> it is more pressure on huawei and china from the u.s. trump administration. back in may, the trump administration slept these export control measures -- s export control measures on companies to not

sell to huawei. this adds to that move, that executive order, the move this time coming from the commerce department to basically cut access for huawei commercially available chips. say these new restrictions on top of those export controls that we saw in may are likely to further hit both the 5g they station business, as well as the smartphone business of huawei. stockpilesthe huawei of commercially available chips is due to run out. due to run-up in the beginning part of 2020 in a few months' time from now. -- stockpiles are due to run out . in the beginning of 2020, in a few months' time for now. ofs yet another example how the trump administration is going after huawei and the threat that they say it poses to

the security of people's data in the u.s. donald trump said that we do not want while we here in the u.s., because "they spy on us." movepompeo, praising the in a tweet overnight, saying this is not just a direct blow to huawei, this is a direct blow to the communist party of china. huawei has repeatedly denied such accusations. we are watching some of the chip suppliers as we get into the open, particularly in taipei. this is likely to play out in different ways. mediatech looks like it will be the ups and down of the story. >> mediatech surged about 150% since march of 2019 and really searched after that may export order, when the biggest

chip boundary announced that to comply with those export order restrictions, it would stop shipping to huawei as of september 15. k seemeds like mediate to be benefiting from that. mediatek, we will be watching them when they open up in taipei, uses cadence and synopsis to help design chips for huawei. after the export control order hit, mediatek became a major chip supplier to huawei. perhaps this move from the commerce department overnight is aimed at closing what they call the loopholes for companies like mediatek to benefit. this new order from commerce adds 38 huawei affiliates to that economic blacklist. we will have to and see how

these kinds of companies, which have been benefiting from that export restriction that came out in may, whether that has been now closed. engle with the latest. among thene line tensions and sanctions on both sides. joins us tonland discuss. this is bloomberg. ♪

> we are seeing the japanese stocks let at the moment after we have the japanese market at the highest level since february. showing a little bit of russia, as we have a little bit of a stronger japanese yen. we have seen -- of pressure, as we have a little bit of a stronger japanese yen. we have seen one of the best performances worldwide this month. .25%.spi, up energies, pulling most of those big markets down today. after -- falling after rising to that monthly high. we have bhp rising at the moment despite their disappointing

earnings. kiwi stocks, gaining the most in about a week right now, above at the high that we have not seen since february. >> let's get to hong kong. we have been talking about about these investors and what they are going to be doing given the political instability we are seeing in the city. it turns out they are mostly staying put for now. our next guest says it is hard to justify why you want to pull your money out. , great benjamin quinlan to have you with us. as an investor, you see opportunities great for china? investors inyour hong kong the same you would with mainland assets? >> i think there's broader challenges related to the way you are engaging with the banks right now.

there's a challenge for many of the global banks operating in hong kong. they will need to manage their conflicting obligation between the u.s. and china at the moment. on one hand, you have a potential violation of u.s. sanctions. on the other, hong kong's national security law. for many banks, it is still too early to see how the regulations will be implemented in the context of hong kong. this is kind of impacting the way that investors are also managing their own portfolios, t oo. one of the things that is very important is banks will ultimately respond to the interest of the investors, and i do think if you are bullish on china, then there is no reason to pull out as mentioned. i think this new sanctions regulation and the regulatory conflict that hong kong is being put in will ultimately mean investors are going to see how

the banks which is to service them going forward. docan you adequately compliance alongside both chinese and u.s. sanctions at the same time if you are a bank in hong kong? are you just going to be stuck between a rock and a hard place? >> it is challenging. for many years, the global banks have adopted and extravagance are but of approach to this. this is around kyc services. it is a result of penalties, associated in particular with breaking, anti-money-laundering regulations, the threat of sanctions. nothing new over the past few years. beu have seen banks conservative for this. banks are turning away business and deals where there is heightened risk of exposure, fines, and penalties.

morgan stanley decided to push back the opportunity to underline the ipo of one insurance group back in 2017 due to a lack of transparency around the company's ownership structure. that had nothing to do with sanctions, regulations, whatsoever. but when you look at the financial penalties and the breach in u.s. sanctions, they are the highest in the world. almost $9 billion handed out to bnp involving transactions with iran, cuba. $2 billion conducting transactions and sanctions countries. sanctioned countries. they are becoming conservative in their actions. -- 012, 2013,

it is definitely something that comes first and foremost as a on how the banks manage the regulatory risk going forward. >> banks are under no obligation to follow u.s. sanctions under global law, but given everything you told us, can they really afford to ignore that? >> i think banks will be leaning compliance.ion they will need to carefully evaluate the risk of dealing with those businesses or individuals. that includes the opening of new accounts and/or the closure of existing accounts. that impact is likely to be felt across the entire iml compliance process. you will be having a look at on boarding requirements.

assessment,k surveillance is also going to become more severe, not just in terms of the transaction one of the ring investigation, but the review of that. the rate of scrutiny. that also, more reporting to authorities. i do not think banks will ignore sanctions regulations. reaction, i of think it is still too early to say exactly what they would do. i think for banks, primarily in in u.s., it would result fines and penalties. for banks operating in hong kong and china, the risk of noncompliance, it is something that would weigh

in their consideration as a primary concern. for is crippling cross-border financing businesses, which many of these banks conduct. >> great having you with us. thank you so much for your thoughts. the ceo and managing partner at quinlan and associates. australia's second-biggest bank has scrapped midyear dividends amid the coronavirus fallout for business and residential borrowers. earnings ofrted $1.3 billion aussie dollars. -- westpac reported earnings of 1.3 billion aussie dollars. tesla's rally has driven his valuation above procter & gamble's. elon musk will be able to dominate the auto market of

the future. the stock closed up 11%, a record. tesla is now up more than 300% this year, with a market value of more than $340 billion. epic games is asking california to block apple from making the app unavailable to users. last week, epic sued apple and google for removing fortnite from their lineup, escalating a tech dispute that has been rumbling for weeks. up next, jd.com some revenue jump in the second quarter. -- saw revenue jump in the second quarter, chilling evidence that china's recovery continues. alibaba is next up on the docket. this is bloomberg. ♪

china's big tech companies are continuing to see robust expansion. names like alibaba, tencent. >> amazon is an amazing company. i think, really, we have zero

faangs in our top 10 right now. amazon is in the bottom half of the top 10. outperformn able to on the long side of our book. not be -- not being overly exposed to the faangs. it is not a bad place to invest. your general equity investor, consumer, they could do a lot worse than having big exposure to faang stocks. these are the best performing companies and businesses in the world. so we are not afraid to have a little faang exposure. specifically on amazon, they have the number one e-commerce business in the world, quite dominant in the u.s., in continental europe, as well as other international markets, like india, the middle

east. e-comm business is half of the company's value. the other have has been built up on the cloud computing business, with aws. we continue to see them being one of the giant leaders in that business. the fundamentals there are growing 30%. marchers are -- margins are higher than 30%, or close to 30%. they bounce around depending on the quarter. we think that is going to continue to be a great leader. that is why it is one of our largest holdings. >> a lot of your peers also saw the filings on friday, a lot of the tiger cubs getting out of netflix, facebook, why do you think the industry is starting sour a little bit on some of these big names? >> it is probably a rebalancing in terms of looking for companies whose valuations are

more stretche and reducing those holdings. we have some -- we have done that in some of our big winners. it is a normal course of investing, being a portfolio manager. >> a lot of your portfolio, more than 40%, is outside of the u.s. some of that is in china, with chinese companies. what is your feeling about investing in chinese firms amid all these tensions between the u.s. and china? >> yeah, well, i think there has been tension, increasing tension for the last 10 to 20 years. there is tension specifically around chinese companies that wee in the u.s., but what are seeing happen is that many chinese internet firms are now d having an ipo and the hong kong market, giving

them optionality, perhaps, to only be listed in hong kong in the future. i think these are such incredible businesses, alibaba, , tencent, these are incredible companies that have real dominant presence in social media and e-commerce and payments. betweenn't think a row the u.s. and china is really going to change the quality of those businesses in the long-term. they have little to no exposure to our markets here. we are quite bullish on them. glen kacher there. ,e will be watching jd.com showing it was from earnings. beating analyst estimates. we will get details on those

results. take us through the highlights on this round. jd pretty strong from a consumer standing after the worst in the pandemic. the revenue growth for jd was , the best since 2017. --y added buyers have been the biggest addition in two years. category,k at jd's it is strong with

home appliances and electronics. one of the biggest growth drivers for them is actually general merchandise, which stuff.s home household in china, the consumer behavior has changed after covid. people have started to buy more stuff online, which can be a good thing for companies like jd and alibaba. >> talking about alibaba, the is expecting a report this week. what are you expecting? >> it will put a lot of pressure on peers, like alibaba. alibabah quarter, suffered more than jd did, during the pandemic. because it does not have its own household logistics.

the warehouse was a problem from -- problem for alibaba. competition has become more and more. -- more and more fierce. >> in terms of all of these chinese tech names, what are we seeing as the future headwinds coming through from trade tensions? given that a lot of them don't have significant cross-border businesses. geopolitical tensions will matter the most to dividends.

for companies like tencent, jd,ama -- alibaba, their businesses mainly focus on china. trump and the white house have mentioned they are looking to blood providers -- blood providers -- block providers [indiscernible] >> great to have you on those geopolitical tensions ahead of the opening in taiwan. to watch for reaction to the u.s. announcing further restrictions on huawei, cutting their access to commercially available chips. license may need a to continue chipping to huawei. in the next hour, we discuss earnings and latest developments in the race for covid-19's treatment.

do not miss our coverage of the democratic national convention. bloomberg tv and radio will simulcast the special today starting at 10:00 a.m. in hong kong. this is bloomberg. ♪

hike! simon pagenaud takes the lead at the indy 500! coming to the green flag, racing at daytona. they're off... in the kentucky derby. rory mcllroy is a two time champion at east lake. he scores! stanley cup champions! touchdown! only mahomes. the big events are back and xfinity is your home for the return of live sports. but what if you could stdo better than that?k. like adapt. discover. deliver. in new ways. to new customers. what if you could come back stronger? faster. better. at comcast business, we want to help you not just bounce back. but bounce forward.

that's why we're helping you stay ahead and adapt with a network you can count on, 24/7 support and flexible solutions that work wherever you are. call or go online today. for five welcome to bloomberg markets, china open. i'm tom mackenzie. david: were counting down to the open of trade. our top stories today, u.s.-china relations sour even further. first lobbyistts in washington in its bid to head off the impossible bank. tom: bhp report