anchor: good morning. welcome to "daybreak: australia ." i am haidi stroud-watts. : and i am. -- shery ahn.

anchor: alibaba investors headed to hong kong. under threat for the covid-19 resurgence, the unemployment rate will jump in the next two months, and the republicans launch their national convention on monday, with a new poll that suggests their supporters like the economy and the government handling of the coronavirus. let's get a quick check of how the markets are trading, up 2/10 of 1%, this, of course, after we had another rally on friday session, the nasdaq gaining 4/10 of 1%. data,e plaza -- positive and a record in july helped by chief borrowing costs. homebuilders lead that round in the s&p 500, which was up for a fourth straight week. we have seen really records for the s&p in the last week, and the sector that gained the most ground was tech.

in the moment, holding steady after gains on friday, but we trend, down around 10% since the march i. taking a look at what oil is doing, reversing some of the losses we saw on friday, above $42 a barrel at the moment. we saw it pare back the weekly gain, with some major economies from europe to asia stumbling. also this week, we do have back-to-back storms in the u.s. that will hit the gulf coast, so do watch out about that. about 13% of oil and another portion of natural gas have been shot. haidi: here is sophie kamaruddin in hong kong. we are looking for a muted week. we saw earnings in asia that will deal with the coverage.

key results are due from australia, and aussie futures settled just lower, the worst week in the last three. a grouplso keeping an after its chairman resigned. and flipping the board, korean assets will be closely watched on a warning that tighter restrictions may be needed amid concerns in south korea. lost 4.2%world rally on the week, the worst rout since march. and the chinese tech stocks will be tested today as the chime mix next rules kick in.

it is still outperforming other seebenchmarks, as you can with the graph on the screen there. anchor: strengthening the role as the financial center, we get more on the u.s. tensions. we are joined by our north asia correspondent, stephen engle, in hong kong. askingre a lot of people whether beijing is willing to sacrifice the role of hong kong in this. well, obviously, they do not want to sacrifice hong kong's role, but they do want to restore law and order. that is their terminology. it is said that china will provide support for their financial institutions in hong kong and also, of course, offer continued services to companies here. but we have had these

tit-for-tat sanctions by the u.s. and china over hong kong. it has kind of left global institutions walking a tight rope, if you will, between those different regulations, established, of course, under british common law as well as the new regulations under the national security law as well as these added sanctions, so banks with global footprints need to comply with those u.s. sanctions, so it leaves them in a sticky position. in a statement over the weekend, they said at present, the hong kong financial market is generally operating smoothly and the dollar peg has a solid foundation, which also reflects the confidence in the international market. konges onto say that hong 's status as international financial center will not be weakened or shaken, but it will become more prosperous and stable in the future. we will have to see, of course. u.s.,: and, steve, in the

we are hearing there may be bans on about those wechat and tiktok. lumped under are the same umbrella, but tiktok plans to file a lawsuit against the trump administration later monday, challenging that executive order that bans transactions with the chinese deal app in the united states, tiktok, which, of course, is owned by bytedance. the company says it strongly disagrees with the concerns raised by trump, who back on august 6 ordered this man on the app in the united states within 45 days, which was superseded by another order giving it 90 days businesses.s u.s. oracle and twitter are said to be interested, as well. but in this to talk statement,

disputing or planning to file this lawsuit, they said there was no due process ahead of this executive order, so they plan to file this lawsuit. we are not sure which jurisdiction or which court they plan to file that. and very quickly, on wechat, a group of wechat users have asked to block this ban on what they say is a ban on all users on wechat in the united states, again, on national security concerns. we will have to see how this plays out, as well, but they say that ban was unconstitutional. anchor: stephen engle with our update. still ahead, republican convention. president trump looks to outdo the democrats. guest who will discuss. it's -- markets with

a wall of worry. whether the s&p is likely to it 4000 or 2500, next. this is bloomberg. ♪

fx global coronavirus cases, deaths rising from 998, the first time the total has been under 1000. however, california reported their highest number of new infections, while france had their largest increase since mid april. greece and mexico also report surging numbers. stateile, a threat of border closures as there is a resurgence. 700,000 people have regained work after being furloughed

earlier this year, but the australian unemployment rate is expected to exceed 13% in the coming months. almost half a million jobs will be lost. and in india, a grim milestone, topping 3 million infections as the outbreak accelerates. new covid cases rise by more than 59,000, almost 57,000 people having died in total. in south korea, meanwhile, they are considering imposing restrictions at their highest level amid warnings their country is facing a massive nationwide resurgence. in other news, goldman sachs as almost a quarter of jobs will not return despite the recovery. in the early months, employers shed more than 22 million jobs, most build as temporary, and goldman sees the labor market deteriorating and says about 25% of temporary layoffs will become

permanent. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. haidi, over to you. the tech rally may have more room to run, but there are clear signs the market is becoming unsustainable. the fund is now looking elsewhere to diversify risk. see a huged why they reversion coming. stocks, now we have to add a "t" in there because of tesla. they are all doing well because of covid-19. then, there is a question about what happens due to covid-19. dave wilson, his chart of the day, a shout out to him. these are bigger than all of the financial stocks.

if you look at the russell 1000, so the 1000 largest stocks, and you at value and growth, will go back to levels we saw in 1990, and one of our managers set me some material yesterday, when you look at old measures, like price to book, sales to price, these are things that tom keene used to love. you look at those measures, the at the 99echnology is percentile of valuations. at some point, you're going to have a huge reversion to the mean. it can stay and persist for a while, but at some point, when the health crisis is solved, we are going to go back and shot places like amazon and use microsoft as we used to. but you will have a reversion of the mean, and that will be painful.

anchor: on that note, it is interesting, chris, that growth has been outperforming value, and we keep talking about this value trade back into it, and yet, it is painful that growth has continued to be the big outperform her. extending growth those leads overvalue? chris: we have considered an extreme move for a long time, and that is what it has been painful. ending in july, small-cap growth had almost double digit returns, where small-cap value had a negative return, so it has been painful. but the question of how we protect a plan like ours, you diversified. you just do not load up in those names. you have to spread your risk around and diversify in other areas. are of the outside u.s. doing well.

in our case, we will be in real estate and in fixed income and in other strategies besides just global growth, so everyone out there who has a 401(k) needs to step back and look at their asset allocations and not just day in the large-cap names. while, andn for a hallelujah, they are up again, but nouriel roubini, not always wrong. this market is well overextended, and it is already flashing signals that tell us it is not sustainable. anchor: yes, dr. doom talking v's, and, chris, in your view, that it is time to look outside of the u.s., and we have slowing momentum coming out of europe and a downward trajectory for australia and japan earlier today. how much does the dollar value factor into it?

chris: it is big. we are a big global investor, so over half of our portfolio is always in the usa, but we have been looking at when is it the right time to go overweight to developed markets outside the u.s. and eventually emerging markets. we could have said emerging markets have been undervalued for almost two years running, but there are going to be some opportunities. once you are out of the health going tohe market is struggle, i think, to go higher, but you really do need to look at diversification and be more global in your portfolio. the concentrations in these names, people came in, and they are going to leave just as quickly. anchor: chris there with our colleagues taylor riggs and caroline hyde and romaine bostick. soon shifting, joining us is the sandra morris ceo, gorge ball. george, great to have you with

us. morris ceo, george ball. we had the stock split with tesla and apple trying to make things cheaper for their individual investors. george: there is no doubt that the reemergence of the retail investor is a significant factor in the market, something that is unexpected and at the margin very important. roughly speaking, retail volume has gone from 10% of the overall to 15%. one could say, well, that is only a 5% swing, that is not a big deal. that is a huge difference at the margin. today, the retail investors are number one, speculators, and number two,

they understand the idea of technology and the value of stocks, and number three, they are all in on it for now. part there, iant think, is the prepositional phrase "for now," and that is going to change. see people embracing tech. with a also be embracing currencies? george: as the retail investor bloodied,r her nose and i think that is almost going to happen, they will not stop trading. it is new, interesting, something to do with your time. but the retail investor will quickly understand that i think theshift to

cryptocurrencies, blockchain, bitcoin, however you want to choice,term it, it is a and that could be a fairly dramatic and fairly impactful change that is phenomenal. george, if you look below the froth, if you will, in this current rally, what are you liking? in which stocks do you see not just opportunity but also value? george: value is harder to come by that it was one year ago, over six months ago. than it was one year ago, over six months ago. i have never said bitcoin or another, and i think for trading and investment reasons, they will come to the forefront. the very smart investor is probably going to look for small riskuations,

arbitrage opportunities, like a company called phoenix, and other things are pretty much sure bets. category, the animal health business is, i think a sure bet. people are going to feed fido. they are going to feed the cat, no matter what. so even if 25% of the market is declines,tocks and there will be special situations, and there will be what i would call no matter what bets that will perform comparatively very well. large, theby and stock market outside of the u.s. is playing catch-up to the rally, so do you see more , like with a pretty robust situation out of

china right now? george: the recovery in china and other parts of the world is going to lean money towards the emerging markets. last, but they may emerge very powerfully. with the weaker u.s. dollar, i think a balanced portfolio probably becomes internationally diversified as opposed to u.s. and it probably goes towards the third world countries and emerging markets more than the developed ones or the next 1.5 years. anchor: george, i appreciate your time, george ball with some of the opportunities outside of the u.s.. anchor: the latest on the virus front, next.

well, the trump administration has granted emergency use authorization for convalescent plasma. president trump: through this study, over 100,000 americans have already enrolled to receive this treatment, and it is projected to decrease mortality by 35%. anchor: this comes as u.s. cases show signs of decreasing. we were talking earlier how convalescent plasma transfers have been used for some time. it has been part of many studies. what does it essentially mean? havell, i think what we heard is that this action by the

fda will allow it to become maybe more commercialized and basically to expand. there were already tens of thousands of people receiving from recovered coronavirus patients, so they were already in it, but we heard todayhe fda commissioner that he thinks it will allow the administration to that this treatment to more people. there are certain limitations to when this treatment can be effective. one that kind of jumped out to me is it has to be administered within about three days of a person showing symptoms, so that can be kind of a limiting factor, but it does seem like a promising treatment, maybe not the total game changer that the president is suggesting. what has been the relationship between trump and the fda commissioner? we have seen the fda commissioner featured

prominently, but recently, president trump had talked about members of the deep state in the agency. ros: yes, exactly, president trump's tweet on saturday that seem to come out of the blue. there have been many employees at government agencies that have been on his radar, but he has sort of left the scientific agencies alone, but coming out and suggesting there is deep fda who arehe trying to undermine his reelection was a surprise, and i fda former and current employees who say it is not the case, a very scientific agency with doctors and scientists really focused on the science. hahn is an mind that trump appointee. the relationship could have been better, but there is some thought in the trump administration that the fda is

dragging its heels, and at the same time, they want things to ofat warp speed, is the name their program, and they want it to go as quickly as possible, and whether it is this covid treatment or the development of a vaccine, and they are pushing up against deadlines that may not be possible, so that has created quite a little bit of tension with the president wanting to be able to show very strong results by election day. ros, and in terms of the curve we are seeing in the u.s., are we seeing signs of improvement? are.i think we we have seen s. i think that the profile of people who are being diagnosed as positive for covid has changed a lot. we have gone through a situation where it really swept through

nursing homes and swept through really high risk places, and that is not so much the case now, so i think that is why you are seeing lower deaths. anchor: all right, our washington editor there. "daybreak: to, on australia."

♪ earning seasons continue. the drumroll in australia, the iron oreof minor dividends i share of one dollar versus $.24 a year on year. full net income of $4.74 billion, marginally higher and expectations. the company still protecting that meant to be $3 billion to $3.4 billion and of course getting details around

expectations of the idle price. we are expecting that as well. that sounding rally in the idle price in the last couple of weeks underpinned by the chinese recovery and demand. there is concerns the supply-side risk in terms of pandemic restrictions. other minds may start to see we will see some down when it comes to idle prices. fairly strong earnings. we are getting analysis and terms of what they are looking from the ceo herself. elizabeth gaines will be joining us later on. catching. if you are the conversation from new york. karina: the house of representatives is setting up to to fall back on the u.s. postal service that it claims will hurt the election in november. the house has allocated $25 billion and had limited republican support in the house

and faces a veto from trump. the number of voters using the mail and service for the election is expected to surge amid concerns. mass protests continue and belarus as the president puts the army on alert and warns of a military threat on the border. more than 100,000 people gathered in -- although police checkpoint stopped more people gathering from outside the capital. nato officials deny the president's acclaim -- claim. the russian opposition leader has been flown to germany amid claims he has been poisoned. he collapsed last week and was denied the right to travel for treatment. his aides say he has been attract for opposing president putin. the string of kremlin critic's have also fallen ill in recent months without any expiration. year'sonvicted of last double mass shootings will be sentenced on monday. the australian government

changed his plea to guilty on 51 counts of murder and 40 of attempted murder and one account of terrorism, the first such conviction in new zealand history. himself at thent four day hearing. 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 am karina mitchell. this is bloomberg. haidi: as a gears up for this week's republican convention, one thing is clear. expect for the president of doing a democrat mostly could -- mostly virtual convention. joining us now is terry hays. we appreciate your time. we also hear that we will be hearing from trump on all four nights. this will be the trunk show. what is his strategy and what is

the most important thing you are looking for from the president to beautify the party and appeal to the country given the present -- criticism of the pandemic handling? terry: -- haidi: it appears we will try and get terry haines back in just a moment. we will be getting more voices on the election. ceo at wall street is more concerned about -- no light in this exclusive interview, we asked her how the markets are viewing the prospect of the biden-errors presidency. >> there is a big difference between the short-term reaction and long-term fundamentals. i think it is a long-term fundamentals that will win out. we know the story. markets do better under democratic administrations.

that is a fact. i think it is the long-term structural issues despite a near-term possibly bid on the worries that will win out. >> we have to look forward to a bigger stimulus package whether there is a republican or democrat in the white house. how are investors dealing with that reality, that america will be in so much debt? >> the bottom line is if you think back to us directly into the great depression, the percentage of stimulus as it relates to gdp, it is reasonable. it, we note we are on the right track. stimulus needs to be monetary, but ultimately it needs to be fiscal. we need to have proper spending that will bring returns. spending on infrastructure, education, correcting racial

injustice, and spending on technology. spending on old trends that have already been in place. this kind of spending will drive the kind of growth that will allow us to deal with the debt we have to accumulate now. >> what is the limit? the question is how far-left is biden prepared to go. there is lots of questions if he can stay there? . what freaks you out? >> everything freaks me out and do nothing freaks me out. what freaks me out the most is if we face the health crisis, the economic crisis and the racial crisis, the limit crisis, if we face them in chaos. if we face them with pragmatism and follow-through, our economy and our society will be resilient.

we will get used to the new normal, so that is white and the long-term we can be constructive and not freak out. >> speaking about making progress on these initiatives, you have seen when biden brought on kamala harris to be as vice president a lot of white, wealthy donors had come to her support. i am wondering if a lot of this is symbolic or it we are going to see firms make real changes at their own ranks as we see governments start to change itself. >> i think we are. the reality is this is inevitable. the pool of talent that is out there with people of color, women and with their being engaged in what is going on, it is inevitable. it is not at all symbolic. morgan,examples at jp the new cfo because she earned it, she more than our day. the idea of hurt now having

access to information, access to data, access to capital, everything is about access. for those of us who do sustainable and impact investing, the idea of giving access to what is needed for progress for everyone, you cannot beat that. we round this conversation out, i would love to get your perspective. what are you doing from a portfolio perspective? thee are positioned for long-term, proper asset allocations and understanding your investment objectives, your values, and how consistent you want to be. that is the first thing. about, let us say equities. we want our clients -- and our clients are positioned for innovation. you can do that with the value style, with the growth style. erica karp speaking

exclusively to us. let's get now to terry haines. we have viewed this time. i was asking you earlier about your expectations for this week's rnc. we know trump will be speaking across all four nights. what is the tone of the message he has been hoping to deliver? >> there is a negative component and a positive component. the negative component is a differentiation between the two political parties. truck and his people will characterize democrats as being the party of death and destruction. that is a phrase that has been used. the death of the american economy, the death and destruction. you will hear about biden's unfitness, which is a live

issue. drug has been doing his best to stoke it, but it is a life issue. 40%public shows that believes biden might have diminished capacity and 60% you might not finish gives first term. about ayou will hear lot of that and a lot of the that will beities emphasized art democratic run and run by democratic officials. that will be a huge problem. the positive stuff will be, trump will push on the economy, which is a big strength of his with voters. he will push on opportunity, and you will expect to hear a lot from senator tim scott. asy will occupy the center casting biden and harris as a trojan horse, and frankly, on the covid response, they will talk about the balance between dealing with covid eddie reopening the economy as opposed to a shut down.

i think that is the kind of think you will hear from them. thei: why do you say biden-harris combination is not a centrist combination when it has been widely perceived as in picking kamala harris biden as struck a centrist tone that wall street and the initial reaction has been positive on? >> two things. it has been clear for months now that biden has been a centrist throughout his entire career. the platform is not a centrist left form. the platform skews heavily toward progressivism as demonstrated not only by the aatform itself but i -- by veteran-sanders community document that came out in august. i think he did well to pick harris. progressiveinly is

light. obviously is not captured by the sanders-warrant wing that you could not be elected on a statewide basis to two different offices unless you were skimming progressive. as far as the markets go, and how i have characterized this is as a looming negative, the more likely the markets think biden is to become president as they do think today. it is the $4 trillion of the tax change inpotential mandate of the federal reserve to emphasize racial equity, and it is an economic message that on biden's part emphasizes passing large parts of the green new deal and taking away economic advantages in swing states like pennsylvania by banning fracking and the like. voters in the

markets see this stuff having a possibility of coming to fruition, the likelier you will see a negative market reaction. bity: let's talk a little about trump. how important will it be to keep the president on message? we have seen him all the recent days being more vocal on baseless allegations and embracing conspiracy movements as well. >> it is interesting. being on message, staying on message has never been a strength of president trump's. of whatame time, a lot he does is designed to stoke a highand maintain enthusiasm among kids base, and he does well among that. there is a huge enthusiasm on this stuff. as you get into the general , what viewers,gn

particularly those from outside the united states need to understand, this election will come down to about six or seven battleground states. there are all of the states that are competitive. that race is tightening substantially, almost a margin in error of most. trump thinks he is. and a bad position. he will go on attack on all these fronts. , with hisry haines insights on the upcoming rnc. and update on the coronavirus in australia. there are signs of numbers in signs ofwill fall amid a flareup in british-born. this is bloomberg. ♪

haidi: we are getting latest retail sales out of new zealand. , pretty ugly contraction albeit not as bad as expected for the second quarter, 14.46% excluding the impact of inflation quarter on quarter. the survey was expecting to see a contraction of 15% coming off the back of the flat meeting in the previous verse court reporter -- previous first quarter. the impact of the strict lockdown as well as the renewed lockdown in auckland as states

continue to consider whether they will move to a level two as of this wednesday. contraction of 14.46% when it comes to retail sales as they undertake at lockdown review as to what happens in auckland. let get a check of the markets. sophie: asian stock futures mostly higher, ep futures in by the gun is edging toward 106. s&p minis -- with a front month contract rising to a record. korean assets will be in focus today under potential for tighter virus controls higher. expectations continuing to build regarding that shortselling bent , june news reporting that bent anuld be extended -- bea extending -- -- sent the board, the

to all adverse creditors meeting this monday evening to discuss a potential restructuring deal after it halted in debt payments. hong kong, over $3.4 billion at the end of july stocks slumped 37% body record low on the back of that is. in austria, futures reporting lower with more earnings interview, dachshund supplier out with results due on friday. the company supplied a non-cash and payment charge of $1.35 billion australia with a light share related to its american assets. and nodend from borrow dividend from -- which reported 139rst-half net loss of trillion u.s. dollars. insured neighbor holding missed estimates.

a slow-growing recovery for its travel. it is also nib expecting an unpredictable claims trajectory. shery: we will be watching what is cute metals, it is announced quarter your profit in dividend after soaring dividend prices. our guest joins us now with more. the lines are in for fortescue. what are the numbers saying? nearly 50% toup $4.74 billion, revenue up by one third as well. so thelar per share, plan is letting up for fortescue, the iron oil price product isir only iron ore. that product goes to china. there was a huge stimulus program intranet with record production as well. that puts rockets behind this

result, but also because are coming down due to bigger shipment volumes. the overall really weakens the u.s. dollar against the earnings theory. that was the result as well. this will add up to $1 billion payday for the german --chairman . here is about 40% of fortescue shares. outperforming kind of animal at the moment. australian lawmakers getting back to parliament today. we have had a new 10 week hiatus due to the coronavirus. to produceackages jobs and business during the operate. what are we expecting in terms of continuity? quite some legislation to will need to be passed urgently to allow payments to continue, and they will continue at a reduced rate. the opposition to once a debt to be reconsidered in light of recent outbreaks. the finance minister and saying

at some point, there will have to be a transition away from this unprecedented level of help . the treasurer presented analysis today. the aussie's that lost their jobs are back to work. these tightening orders do remain a concern. haidi: our guests with the very latest. we will be speaking to the fortescue ceo about those results a little later. p.m. new york. do not miss out on that. ♪

shery: heading into an extremely busy earnings week in china. we have new rules on trading limits that take effect today. david ingles joins us for a preview. let's start with earnings. david: it is extremely busy. 35% in roughly two the earnings season. by the end of the week, 77% through 2000 companies set to report this week. what will be key here is we have seen big tech and by virtue we have had a good sense of how the consumers held up to a large extent. what will be important is the

big banks toward the latter part of this week. this will show you the damage to the economy as far as graham and its. lung performing lows, load loss provisions. in terms of where we are earnings expectations wise, trying it wasn't first in first out in leading this recovery. as far as earnings forecasts are concerned, gps of about 10% on index, 242 --hare 246 roughly on ebs. are we going to get an earnings recession in china? the answer is no. you thet chart shows downgrade, while they have stabilized, we are not seeing upgrades just yet. 10% is your estimate for earnings growth at the start of just an, 30%, indication of how badly projections were damaged from

what was happening with the economy during the pandemic. haidi: today is very exciting when it comes to china, investors will be looking ahead to new trading rules. what does it mean for the gains we might see? mean the trading debuts might get more attention, because what is happening today you are getting trading limits expended for all stocks in the index for 10%-20%. those 10% limits will be kept in place for the main boards. fort trading debuts starting today, this a batch of 18 companies, low -- note limits for five days. that will be something we direct closely. get ainext index will little while there. we will see what happens. haidi: david ingles there with a look ahead. let's get you a check of

headlines. microsoft backing epic games get its developer fund with apple. apple will ask a court later on fortnite -- restore and limiting its ability to provide geographics technology. saudi aramco is shaking up senior management. it is creating a new position of portfolio optimization to assess and changing the heads of its up and downstream operations. charlie's conglomerate today is firmto shut off -- to platinum. it would value -- at $7 billion which talks continuing. coming up in the next hour, we will be speaking with oxford economics about the prospect of employment in austria. we will continue to watch u.s. china trade tensions.

plenty more ahead as markets begin to start trading for the week. this is bloomberg. ♪

haidi: good morning we are counting down to asia's major market open. shery: welcome to "bloomberg daybreak: asia." companies challenging washington. to sue wechat users operating in china.