haidi: very good morning. i am haidi stroud-watts in sydney. we are counting down to asia's shery: major market opens. shery:i am shery ahn in new york. asian markets may be less enthusiastic than their peers in the u.s. wall street had a third straight high -- third week high. expectations for loose monetary policy. for a 20 plm hong kong and shanghai.

the simultaneous listing could bring evaluation of 225 billion dollars and may raise more than aramco's record sale. day twot lady headlines of the republican convention. the theme is the land of opportunity as melania trump makes the case for her husband winning four more years. working news at the moment. we are getting confirmation that the u.s. business will be charged in a generic drug price-fixing probe. this coming from the department of justice, saying the pharmaceuticals company was charged for its role in a saying tesla's u.s. u.s.mers -- teva's consumers were charged $350 million. it was charged for conspiracy including landmark and -- glen tech.nd apple

it is falling more than 4% in post-market trading. teva pharmaceuticals being charged with conspiring to raise prices for generic drugs. this is after years of price-fixing in the generic drug market. the doj saying it is the seventh company to be charged with generic drug price-fixing. teva was charged for price-fixing. you can see the stock after markets falling more than four point 5%. haidi. at howlet's take a look the asian markets are setting up a missed what was a pretty benign day in terms of moving slow in the u.s. but still, we saw the s&p 500 as well as the nasdaq matching up the third straight days of record highs. we are seeing futures trading pretty flat at the moment. a muted start in asia despite the record high on wall street.

seems like investors, despite things like consumer confidence falling, are pricing in a robust recovery. just under .1% higher. we saw the greenback on the back foot again in the overnight session. we are watching crude prices currently trading at 43.44 a barrel. laura,g tropical storm expected to strengthen into a hurricane greater than before making landfall this week. u.s. gasoline futures hitting the highest since march over these concerns about the possible impact of the hurricane on fuel shortages. shery. shery: let's turn to jack ma's group which has filed for its long-awaited ipo which will be a joint listing in hong kong and shanghai and could possibly be one of the biggest market debuts in years if not ever. stephen engle is taking a closer look and joins us from hong

kong. so what do we know about this ipo? stephen: we know it is going to be big because people familiar with the situation say that the company is likely seeking evaluation of upwards of 225 billion dollars u.s. and that an ipo of it based on 30 billion u.s. dollars if market conditions hold up and we could see here that would put it beating therld, saudi aramco ipo, up $29.4 billion, bigger than alibaba, its parent company, listing in the united states. softbank, the biggest ipo's. alibaba is jointly listed. also here in hong kong last year for the $13 billion ipo. the numbers are quite staggering. its cornerstone, alipay payment service, we had $10.5 billion in revenue in the first half. this coming out of the earnings

report, most recently shedding some light on the financials of this company. they had a profit of 21.2 billion yuan, but if you look at alipay, and the staggering member is $17 trillion in transactions, 118 trillion yuan in the year through this past june. 700 11 million active monthly users in the same period, 12 months through june. the app had more than one billion overall users, more than 80 million merchants are using alipay, mostly in china. proceeds, according to the prospectus, is going to be used to expand cross-border payments. that is a significant issue. of course, right now, with the ongoing u.s.-china trade war. haidi: we know it is listed in new york. can we say they have avoided a u.s. listing because of these uncertainties associated with the u.s.-china tensions? stephen: you might want to draw

that conclusion. they are not necessarily saying that exactly. they are going to go to hong kong, shanghai, with a place holding listing, and hong kong has been on fire with its tech listings, including the alibaba listing last year of 13 billion u.s. dollars, but basically, but trump administration has signaled it has increased scrutiny on chinese companies that are listed in the united dates. the state department has warned university endowment funds to possibly divest their holdings in chinese shares. foreign equities made up nearly 14% of college endowments that have more than $1 billion in investments so there is a sizable amount of money in these large funds that have gone into chinese companies. it really returned very nicely including companies like alibaba. that state department letter to those endowment funds, says holding these has high risks associated with prc companies having to restate financials.

that is what the trump administration is alluding to. chinese companies listed in the united states may have to restate their financials and some may have to delist if fraud is the allegation that is proven true. these big companies from china, i'm not saying they are conducting fraudulent behaviors, but again, the trump administration is putting a bigger microscope on these companies and you can draw the dots and say do you want to avoid that? listed in hong kong, list and shanghai -- list in hong kong, list in shanghai. haidi: potential to get really messy. stephen engle with us. let's get to karina mitchell with the first word headlines. karina: detained huawei cfo -- has failed to win access to documents withheld from her by the canadian government. restrictions on six papers involving canada's agency is warranted in the information they is not relevant to her

arrest 20 months ago. she wants canada to dismiss the extradition request that alleges she and huawei violated international trade sanctions. the president of the un security council has rebuffed u.s. demands to restore extensions on iran, prompting the u.s. ambassador to accuse members of supporting terrorists. last week, mike pompeo insisted washington has the right to reimpose sanctions despite abandoning 2015 nuclear deal. all security council members, bar one, say the u.s. move would be illegal. the u.s. continues to be the focus of the coronavirus, but there are signs infection rates are slowing further. california and florida show improvement while arizona has been taken off new york's travelers quarantine list. some u.s. universities are seeing a spike in cases. further afield, new infections in france slowed. pedro sanchez rejected calls for a new nationwide lockdown. near an germany, four-month high. hong kong will not relax social

distance -- they will relax social distancing rules. parlors, ands, ute some outdoor sports venues will also reopen. thailand has approved an extension of its virus emergency plan through september, seeking to prolong its streak of three-month without a local covid-19 transmission. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. shery. shery: still ahead, we will assess what could trigger the first tradable correction in equities. theresa kong says growth stocks will continue to outperform. its, palantir lays out plans to go public in a direct listing. details on that, ahead. this is bloomberg. ♪

haidi: morgan stanley is warning investors -- growthlson once of a scare to be followed by a rates care and that might be a sharp increase in lung data rates given the federal reserve's lack of willingness to employ yield curve control. next guest sees rates well anchored and lower for longer. theresa, always great having you with us. take a look at this gtv chart on the bloomberg. we are now seeing signs of perhaps yield starting to gain ground a little bit, at least taking on the 50 day moving average when it comes to the 10 year yield. what are your expectations here given we still have yet to see, mind you, congress is next round

of fiscal stimulus measures, and what will that mean when it comes to rate and its impact on other asset classes? >> in the short-term, it is certainly possible for rates to back up a little bit from your here. from it is important to ask where rates will be over the longer term. if you look at it from a longer-term perspective, we see rates being well anchored. the reason is as follows. there are structural reasons. it is largely due to demographics of aging populations. lower productivity growth and even things like inequality and no public investment has all lowributed to our structural rates. in the short-term, could we see a reprieve? certainly. with 10 year yields above 1%, i would be getting along. shery: what does this mean when you have u.s. rates so low and you have the valuation of these companies just soaring?

teresa: when using about u.s. rates, it surprises from all asset classes. when you look at equities, one of the key things we do is -- we discount future cash flows. it really means we are assigning the same value to a dollar tomorrow as we do today. things has shifted valuations in favor of both companies. will this persist? over the one-year to three-year perspective, we think we are well anchored. types of valuations we have seen. with the flood of liquidity we are seeing, the lower cost of capital, does that translate to the lower cost of efficiency in terms of what bang for your buck you are getting in terms of this monetary policy? teresa: absolutely.

you can think about it. if you can borrow lower, it means you require return on the capital is also lower. that translates to more zombie companies. the thing about these companies that would have folded under a higher interest rate environment would have been that much higher. along withan muddle lower costs. classic value traps. we think that those are the type with continued operational shocks from covid. haidi:haidi: do you expect broad-based dollar weakness to continue? does that change and who are the winners in the asian space? the $10,000's question right now. we do think that the u.s. dollar will continue to weaken against currencies like the euro, asian currencies like the dollar. we cannot really say the same of

all em currencies, so investors should not see this as a on, where it is a tide that rises all boats. we think the fate of emerging-market currencies will depend on how quickly they can recover for covid-19. a lot of this will have to do underlyingur structural factors are. for countries that are dependent on things like terrorism, it's going to be difficult for them to recover, given that we are not seeing, at the moment, treatment. at this point, we are underweight currencies and we are overweight other currencies. shery: we are headed towards jackson hole symposium. we are expecting chair powell to discuss the policy framework review. here's our question of the date coming from mliv. what do bond traders fear most at jackson hole? teresa: has them all broadcast

that the fed is willing to lead inflation run higher for longer. certainly be true before covid. we were not able to hit our 2% inflation targets. that is what the market has priced in. it will be difficult for us to imagine a scenario where the fed wants to surprise the markets. the fed really very much is providing a put and they feel this is a time when the economy really does need extra. if the fed said something very different than what is priced in the market, it could hurt the markets. that is a very low probability at this point. haidi: always appreciate your time with us, teresa kong, head of fixed income strategy for matthews asia with us. testing an experimental

antiviral pill that might have the potential to unseat covert treatments available right now. we will get the latest on these developments. this is bloomberg. ♪

haidi: news at the top of the hour. an israeli drugmaker has been charged by the department of justice for conspiring with rivals to raise prices for american medicines. shares fell in the regular session and slumped after the bell. let's get more from michelle cortez on the story. what do we know and what are the implications in the significance of these charges? michelle: this is the latest company that has been charged with price-fixing with generic drugs. the generic medicines are supposed to be less expensive than branded pharmaceuticals because drug companies

don't have to do all the research and development to get them out there but the allegations are the generic companies are working together to prop their prices up together so when they are going against -- everyone keeps their price high and no one gets the benefit for having lower prices. shery: we have also some news when it comes to these antiviral pills coming from merck. experimental, but it could really have an impact on authorized treatments for covid-19. michelle: we have been waiting to have some type of a pill or therapeutic that will make a difference when it comes to coronavirus and this is the first product that is going to come along. that is what many people think of as drugs. it is something you could theoretically get a prescription for from your doctor even if you have a mild case. he could take it at home for five days. more likely to recover from coronavirus. everything with this virus is

still early days so we are waiting any day now to get the phase two results and then merck is supposed to be starting its next trial of this medication in september but the only things we have now are things like convalescent plasma and remdesivir so you generally have to be in a hospital for those. if we can actually get a pill, that would be a huge breakthrough. shery: that would be great news. michelle cortez, our health care reporter. let's get a quick check of the latest business flash headlines. air asia reported a record loss of $230 million for the second quarter, becoming the latest carrier to reveal the extent to which the coronavirus has decimated the airline business. plunged 96%e period in just 20 million. the group ceo has been looking at ways to raise capital. cutican airlines is to another 19,000 jobs when the federal payroll a ends on on october- aid ends

1. 17 thousand people will be furloughed and eligible to return should conditions improve. virgin atlantic has won the support of creditors for a $1.6 billion rescue plan for the next one point five years, aimed at returning the airline to profitability. identified 1.5 billion dollars in cost savings and $800 million will come directly from shareholders, including virgin itself. the rescue needs the approval of the british high court. staying with the airlines, a european carrier reported third-quarter results that were better than initially feared. that sent shares soaring. the ceo spoke with bloomberg about the impact of the pandemic on his business. that we arear extremely dependent on the travel restrictions imposed by different governments and different countries. since they don't work

hand-in-hand, rather uncoordinated, it creates anxiety among our customers. for example, when we went into an beginning of july, we saw ease in travel restrictions that would cross a number of the european countries which created a rather significant request for additional demand. people wanted to travel for primarily master purposes. thehe end of the month, whole thing shifted, and some countries started to reimpose restrictions again and close down the freedom of travel. of course, travel stopped rather quickly and ceased to exist. it is very volatile and makes it very hard to plan and predict. we move into the fall, we are fairly dependent on business traffic and the behavior has shifted that people tend to book

their travel close to departure so we have very limited visibility into the future months, i.e., october, november, and december. again, makes it difficult to plan. uncoordinated activities among governments is a key issue for us. >> how do you think demand would react if there was a vaccine that was widely available? >> that would make a huge difference. that is what will be required in order to have a more stable situation. that is what we plan for a fairly slow ramp-up in demand and that will continue throughout this year, throughout the whole of 2021 to 2022, when we believe we might have some more stability in the month, and at levels that are comparable to pre-covid-19. to 90%% but maybe 80% what it was back then, but i think we need to have seen a global vaccine. pursuing acurrently

rights issue. you need your creditors to sign onto that. this is the financial lifeline that is required to keep the airline going. what kind of feedback are you getting right now about whether or not your terms will be accepted? >> it has been extremely intense work throughout spring and summer, trying to get all these different take holders aligned and build back a tangible and robust recapitalization plan. i am pleased we have been able to announce a plan that is fully .acked by our shareholders the government of sweden, the government of denmark, and the foundation. it is a plan that has been fully endorsed by the e.u. commission, which said this was compatible with state regulations. we agreed -- agreement in principle with our key bond

holders and hybrid holders that they would want to convert that into equity. i think we made significant progress but we cannot claim victory yet. bondholderset all or the majority of the bondholders in favor of this, which will happen on september 2, and then we need to turn to our shareholders on september 22. theire to ask for consent. there are key milestones to overcome, but massive progress so far. again, i'm grateful for the are seeing from keynote holders and key shareholders. the ceo speaking with guy johnson. pelletier, one of the most secretive in silicon valley, is going public amid a surge in tech ipo's. we have the details. 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.

karina: this is "daybreak asia." i am karina mitchell. melania trump will headline the second night of the republican national convention, speaking from the newly renovated white house rose garden after mike pompeo delivers his pitch for the president's reelection from israel. the rnc theme this year is land of opportunity and the first lady will talk about her life as a mother and make her own case for her husband winning another four years. and while, the governor of wisconsin declared a state of emergency after violent protests, following the shooting of a black man by police. tony evers entered after a second night of protests in kenosha, saying systemic racism and injustice cannot continue

and damage and destruction is not the answer. jacob lake was reportedly shot several times. his father says he is paralyzed from the waist down. refiners and drillers in the gulf of mexico are pulling back as a powerful storm heads towards the texas-louisiana coast. hurricane laura is forecast to be a category three system with the potential to cause billions of dollars of damage and hold 12% of u.s. refining capacity for months. more is expected to have winds gusting when it arrives late wednesday or early thursday. japanese prime minister shinzo abe is reported to be planning a news conference on friday amid speculation about his health. he made two trips to hospital in the last week although his office says -- routine checkup and the second was to receive the results. rumors about his future have prompted jp morgan to suggest it could search to 100 if you -- surge to 100 if you were to step down in favor of a new leader. 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 committed mitchell. this is bloomberg. -- i am karina mitchell. this is bloomberg. haidi: one of the tech world's most valuable private companies -- plans to go public. palantir is backed by peter thiel and has filed for a direct listing under the -- joining us now is our deals reporter with some more. what did we learn about this highly secretive company? >> everybody has been expecting this moment for a very long time. it is a very private company. it has been called secretive and the reason is that they have a lot of government ties to three letter agencies. what we have learned from the prospectus is the company has reviewed that the growth has been pretty impressive. they have climbed revenue in the

first half of the year and the other piece of it is the company has been around for 17 years but has never been profitable, which is not unusual for companies that go public in the u.s., but it hasmpany has been -- been reviewed as a very military defense approach. we see a lot of languages that resemble the defense military language. defend a country and used by many u.s. allies. shery: what do we know about the listing itself? we know they will not be raising many proceeds from it. crystal: it is a direct listing which has not happen very many times. this lack and spotify have used this to go public. it is a system in which you sell shares on the exchange without raising any new proceeds. managementce

technology also filed for direct listing yesterday. we had predicted that 2020 would be a year of direct listing but because of this feature where companies raise new capital, a lot of the company have been rethinking the capital needs since covid hit them. , if it is not one of them -- if the direct listing -- there's no price range in the perspective. there's no application of what the price will be at the trading so that would be an interesting exercise for bankers and investors to further down the line. haidi: crystal tse joining us from new york. coming up next, u.s. consumer sentiment drops for the second straight month. we will get you the details with the chief economist. this is bloomberg. ♪

haidi: we do have a situation when it comes to trading in new zealand. the new zealand stock exchange prices and indexes unavailable. the website is down as well. we are getting more details as to what is behind this given that we did see trading resuming normal this morning after yesterday's late afternoon denial of service attack from an offshore hacker hitting

that service provider which caused a halt of trading as he restocks are pretty close to hone in on that record high. we are ceiling stock exchange prices and the index unavailable again this morning. we will bring you the latest when we get the details of that. in the meantime, let's get to sophie for a look at the rest of the markets that are trading and are about to start trading. [no audio] haidi: all right. we will get back to sophie in just a moment. in the meantime, we saw overnight u.s. consumer confidence dropping for the second consecutive month. sinceime, the lowest 2014. conditions indicating americans are becoming despondent and persistently high. joblessness is starting to weigh. joining us to discuss is the chief economist. responsible for the consumer confidence index. i want to throw up the chart

that takes a look at the consumer confidence element. it is kind of stark when you take a look at where stockmarkets are at the moment. two out of three major indices continuing to hit record high after record high despite consumer confidence falling to a six-year low. joblessness at 10% plus. how do you explained that other than say stockmarkets are not the economy? >> [laughter] thanks for having me on. that, we ask consumers what i think of stockmarkets and consumers believe stockmarkets continue to be improving a little bit. the question however is do you think they will benefit from it themselves? if you look at the august reading of consumer confidence, you see it in the consumers assessment of the current conditions and current employment situation that really are showing a big drop again and in addition to that, in

expectation, when they look forward, business conditions and unemployment and not going to improve and very importantly, they think income is going to improve and that will be critical for consumers for economic growth. uncertainty do you generally assign to a u.s. or global recovery in the sense that there is so much we do not know about a vaccine, about how this virus behaves, about how the next six months to 12 months really plays out despite the optimism we see from the day today. the reason we have seen and -- bart: the reason we have seen an improvement is we have seen the number of new covid cases come down in august over july. we had expected consumers would become a little bit more comfortable. it is not just the whole story. it's interesting that in texas, we have been seeing an

improvement. in florida, we still do not see an improvement. there is more going on. do consumers really believe that once the recovery proceeds, they are going to get jobs back. is the fiscal stimulus which was supporting on employment benefits, is that going to be as powerful as it was in the last few months? how many companies will fall and will that potentially make them lose their jobs? uncertainties brings it into the picture. green is not going to resolve that unless it would be a vaccine that would serve the whole population and cure everyone at once, but that would be a real miracle. haidi: what happens if we don't get the round of fiscal measures given the deadlock? bart: a little bit has been approved by the president, but it's pretty much stuck in congress and i think it's unlikely that we will have a really big outcome coming out of it because we are really heating up for the election season right now. for the next couple of months,

the consumer is expecting they are not going to see much of an .mportant fiscal stimulus i think that is really playing into the fact that they are not so confident the situation will improve very much over the next four or five months. shery: we have heard from goldman sachs that a quarter of covid-19 layoffs could become permanent. what are your expectations about jobs if we don't get the extra stimulus package? bart: the nature of the job losses is changing. those sectors were very much exposed to social distancing. basically shutting down entirely and all jobs were gone. a lot of these jobs are coming back. to a smaller degree. not all jobs, but some are coming back. the job issue across the economy -- originally, you have bankruptcies because of solvency problems or liquidity problems. gradually, we will get

bankruptcy problems simple because businesses cannot basically reinvent themselves in a new business model that will work in the post covid error. haidi: does the change -- era. haidi: does that change your perspective as to the shape of the future economy? bart: it is very hard to verdict at this point in time -- predict at this point in time. we don't believe it is reflecting anything. it's too far off. election season is heating up. it will become a very tight race. it is beginning to feed into confidence. coming out of the election, it depends on a lot of factors. it depends on how strong a win it would be for either of the candidates. will there be more uncertainty down the road or can consumers believe that election of a president might actually help to accelerate the path of recovery that would help their incomes, help their employment prospects

and business conditions? haidi: bart van ark, great having with us. we have confirmation from the spokesperson when it comes to the trading issue on the kiwi stock exchange. it is similar to yesterday when it comes to those issues we have seen, that denial of service attack that was confirmed by the nzx. let's turn to sophie kamaruddin for a check of the broader markets. stock futures in asia pointing to a soft start after the u.s. pushed higher amid concerns of narrowing market breadth. about 60% of msci asia-pacific index listed stocks trading above their 200 a moving average. we are keeping an eye on tech heavy indexes as well in asia after we saw u.s. chipmakers jump on to say. flipping the board to check in on the yen, we are seeing it trading near a one-week low with rising u.s. yields, a drag on

the currency. later this week, shinzo always planned-- since abe's press conference. an impact for a change at the top as well as the united states, with a climb if this transpires. down -- thestep biggest risk to policy will come after governor kuroda was turn and's in 2023. speaking of the boj putting out the board, some japan market watchers are anxious about the potential losses on the etf holdings that could affect future buying, particularly with att breakeven point now ¥20,000. increasing that impairment risk. 75% of owns more than the etf market in japan and has already slowed their buying after raising the ceiling on purchases back in march and going forward, several former

officials of the boj say the bank can skip some buying in the month to come given there is less market turbulence in japan, haidi. haidi: we have lots more to come on "daybreak asia." this is bloomberg. ♪

shery: let's get a quick check of the latest business flash headlines. group has filed for a twin ipo in hong kong and shanghai. john -- ant generated more than $10 billion in revenue with just over 3 billion profits. the simultaneous listing could be one of the biggest in years. saudis say it could top aramco's record, $29 billion. apple is said to launch its first online store in india next month, taking advantage of the loosening of strict curbs against foreign direct retail. we are told that digital outlet will be ready ahead of the diwali spending spree. apple planned it last year when -- the project was held up by

the coronavirus pandemic. surged in late trade. the software company reported a rise in revenue of 30% for the over $5 billion and boosted earnings predictions for the rest of the year. salesforce will soon be added to the dow jones industrial average. the stock has climbed by more than one third this year. let's get the latest on new zealand. we have heard from a spokesman saying the trading issue that sees prices in the index not available is "similar to yesterday." let's get it over to our managing editor, joining us now. it is essentially confirmation we are seeing another denial of service attack since the one that took trading online yesterday afternoon. >> good morning. that does appear to be the case. details are still coming through. yesterday afternoon, shortly before 4:00 p.m. in wellington,

this system was hit by a volumetric distributed denial of service attack from offshore, that impacted the network service provider. said to disrupt services by saturating a network with significant volumes of internet traffic, and they were hoping that pricing services would be restored this morning, but it's been hit again with prices and index updates halted around 11:23 a.m. in wellington so we will be keeping a close eye on that throughout the course of the morning. no finger-pointing at. in australia, when we get such offshore attacks, it does not take long before experts and the media start pointing the finger at particular state operators. that has not happened yet, but we will be keeping a close eye on that. shery: we will be watching what scott morrison has to say. he is set to announce the one billion aussie dollar spending

package later today. edward: that's right. he has been widely trailed on this announcement. we have the details late last night. going to spend about $1 billion to support 4000 jobs in the defense industry. the armed forces who have had -- the coronavirus. $200 million will be spent to improve regional military basis and received in the context of increased fiscal support that the government has been rolling out to shore up the economy and shore up jobs amidst the pandemic. shery: edward johnson, our bloomberg managing editor for australia and new zealand. sky bridge capital says the trade war with china has taken a backseat to america's pandemic response when it comes to what is driving the markets.

in an interview with bloomberg, the partner and co-cio said tensions between beijing and washington are not high on his list of market risks. topot anywhere near the five. my not even be in the top 10, which is a shift between cobit, the pre-pandemic era, where that was front and center. the number one risk to markets with major policy change from out of d.c. and there were trade tensions in the background. to the point of the comment, you think about what has been driving markets, it has been the pace of recovery and primarily, hyper-loose monetary policy and in fiscal policy, it has done a tremendous job of plugging that whole and not only consumer balance sheets but also helping small businesses so anything about what will drive markets going forward, it will be back to whether the fed will do more, which we think they need to. do we get another round of fiscal stimulus? can rates stay this low for long enough to drive further multiple expansions?

trade tensions are not high on the list of words right now. >> long-term, you say this could be a drag on growth. what is long-term and what type of drag on growth do you see? troy: if you think out to her three years, by the end of 2021, we are back somewhere near a normalized economy, 5% or 6% unemployment, that is when the focus of policymakers will once again be how do you optimize the mix of trade with china and others while protecting american jobs? from a pure economic standpoint, the less trade you have, the less productivity enhancement you get, and that leads to gross. it is still not significant. you are maybe talking 10 to 20 basis points lower growth long-term even in a world with more heightened protectionism. short-term, not that big of a deal. even longer-term, it is not like u.s. gdp will be 50 or 75 basis points lower each year because we have more protectionism,

regardless of who wins the election. >> you said the fed needs to do more. what more do you need to see? troy: it is pretty curious. the fed balance sheets exploded from february 24 onward, improved by approximately 3 trillion. money supply comes to lag. it has been flat as well. when you think of one of the key drivers in markets, all things being equal, it is money supply and fed balance sheet. when we look forward, unless we get fiscal stimulus and keep the trajectory we are going at, we see the fed balance sheets expanding by several trillion more over the next 1.5 years. it will need to in order to keep money supply in the economy to make sure we get unemployment down to that 5% to 6% range by the end of next year as opposed to staying elevated. >> is that fed expansion overcompensating for a lack of action on the fiscal side?

troy: yes, it is similar to what happens in the crisis. even though the fiscal measures took a while, we did come out. we did have the trillion dollar stimulus in 2009. after that, fiscal policy completely went away and we actually went into a period of drag where we had such tension between mcconnell and boehner and the obama administration at member could strike a powerful fiscal deal. not that history necessarily repeats, but it is similar where arer that response, you seeing politics and other pedestrian matters interfere in unnecessary fiscal stimulus, so that does put more onus on the fed again, similar to what happened from 2010 to 2014, so we, for one, would much rather see an appropriate balance between the two. the fed treasury bonds and

mortgage-backed securities is not a substitute for advanced unemployment, which would be much better approaches. if we do not get that stimulus, then the fed will have to do more for far longer, very similar to what they did from 2010 to 2014. sky bridge capital partner and co-cio troy gayeski speaking to taylor riggs. we have and others on the bloomberg. 900 millionthe dollar misfire happened amid a software switch. remember, this would be the payment to lender is of revlon -- lenders of revlon and they are talking it up to one human error. the bank saying it mistakenly transmitted the payments after an employee did not manually accept the correct operations in its software. this has really led to huge citi as they made

those payments by mistake to revlon in saying the hundred million dollars misfire happened because of a software switch, haidi. haidi: just an extraordinary story as they continue to struggle to get a lot of that money back. let's take a look at how markets are setting up in asia in terms of major markets about to come online. s&p as well as the nasdaq hitting a third straight day of fresh record highs and we are seeing upside of about .1% despite consumer confidence falling to the lowest in six years. sydney futures looking marginally less positive. .6% lower. in japan, nikkei futures off by .3%. in new zealand, trading is halted again in terms of not having prices or the index available. the stock exchange saying we are seeing a repeat of yesterday, which was the cyberattack, denial of service attack, which seems to have happened again for a second straight day, targeting the new zealand stock

exchange. we get the opens in sydney, seoul, and tokyo. eleanor cried is here with -- thoughtshere with her on the potentially overheated markets. this is bloomberg. ♪ experience the ultimate sports hub.

where you can find games, news and highlights. all in one place, right on your tv. the xfinity sports zone. use your voice to search every stat and score. follow the teams you love. and, even get notifications with breaking news alerts and more. with the xfinity sports zone everybody wins. now that's simple, easy, awesome. say xfinity sports zone into your voice remote today. more voluminous hair instantly. all it takes is just one session at hairclub. introducing xtrands. xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. they're personalized to match your own natural hair color and texture, so they'll blend right in

for a natural, effortless look. call in the next five minutes and when you buy 500 strands, you get 500 strands free. call right now. (upbeat music) ♪ shery: welcome to "day break asia." haidi: sydney's markets have just opened for trade. asia market mace be less enthusiastic than their u.s. peers. wall street hitting a high but investors weighing the pace of the rally. and trading halted in a second straight day in a possible epeat of a cyber attack that

closed them yesterday. it had opened for trade earlier. and yakima's ant files for twin i.p.o. shery: let's get straight to market action in hong kong. >> they are reporting to a soft start. we are seeing declines in the start of cash trade with the nikkei off .2%. we're also watching activity on with a group nt closing in. check out the yen, mid 106 levels. one-week low. amid the global uncertainty around sinn hoe abe, they're penciling in 100 for the yen if there's a leadership change for

japan and the united states. watching for the opening in korea, we're watching for any lines about the budget plan as they hold a meeting ahead of the decision. we could be get information about that. and watch for information on schwartz. kospi losing ground but the tech gaining ground by .1. we're also keeping an eye on shipbuilders after a singapore cleared a proposed merge en2002 -- merger between two players. we have stocks moving lower by .2% on the asx 200. we're keeping an eye on payment this morning. the aussie dollar a little changed around 2. we are seeing the bond yield steepening ahead of a bond sale expected to set a record with goldman saying the book could top $51 billion australian

dollar. we have new zealand trading being interrupted again in a possible repeat of a cyber attack that halted trading in new zealand late tuesday. haidi: let's get more on the markets. great to have you as always, it puzzles me a little bit, the flow from the overnight session there wasn't terribly much that was positive. we had data about son qume -- consumer confidence dropping to a six-year low. yet would have to of the three major markets hitting record highs. what does that tell you about the bifurcation between the real economy and the stock market right now? >> certainly it's more visible than ever i think when you look at how the real economy trajectory is tracking and how the stock market is tracking. i mean when we look at markets, they are really grinding higher, i think under the premise that there's no reason to fight, i

guessing the free market and liquidity provisions we have seen to date. the fed has all but guaranteed rates are going nowhere for at least two years. we'll hear more on that tomorrow. there's also i guess the auction of a vaccine embedded there. really equity remains the place for investors to escape the secular stagnation that we had last seen within the real economy. this is zero yield world produces. that's why the earnings duration and free cash flow yields that investors can garner in the equities market. microsoft with a free cash flow yield of 3% and 10-year treasury around 60 to 70 basis points. those stocks continue to be beat up under the premise that the free throw cash flow yield that this is attractive real toiv yield available elsewhere. under that scenario it's not inconceivable that microsoft along with other growth stocks can continue to trade higher.

despite the already very stretched valuations. it's also the premise that i guess valuations have been exposed to this long run shift that current interest rate dynamics have skewed this return proposition. i think it's a world where really potentially only inflation can save us from that skewed risk-reward premise offered by up zero interest rates. policy and alluded to in your question, it's rosy in the equity markets. central banks can sus prevolatility but we do see it showing up elsewhere. and as we see the equities continue to be undermined by a larger population, it feeds into that increased social tension and inequality which has already been exacerbated by past monetary policy and of course labor's diminishing share of income and influence over capital.

haidi: you touched on inflation. this is heating up to be the great divide. where do you sit in that argument in do you see inflation returning with just the flooding of pandemic spending an fiscal monetary policy that's being exercised or do we look at the potential joblessness in the united states, consumer confidence is at multiyear lows and factories are still out of work and think that's not going to happen? >> i think it's a bit of both. i think the overarching strend that covid-19 has been a disinflationary pulse and beyond those do have obviously key structural drivers of inflation which is technology, debt, demographics, continue to be huge structural inhibitors or offsets to future inflation. but then i guess you have to balance that with on the other hand we also have this ongoing supply chain shakeup not only from the u.s.-china trade war but also from the sort of my

nation first impulse that comes from covid-19, heightened protectionism and deglobalization trends which also will add to inflationary pressures down the track. but i think the root of where inflation will come from in the future and that primary evolution of inflation will depend on the path of government policy. so we really need to see, i guess, the acceleration of redistributed policies aimed at righting the wrongs of past policy decisions which have exacerbated those generational inequalities that we see in today's society. i think it's that fiscal environment that's going to be pivotal for whether we actually realize the inflation of central -- banks. haidi: bloomberg is showing how they've consistently fallen short when it comes to achieving inflation target.

what do we expect in this issue and others in this long-awaited monetary policy review framework? >> look, certainly, i think it's again reminiscent of the fact that picking an inflation target is easy, getting there is the hard part. we have what is likely to be a pivotal speech from powell on thursday. the topic really presenting the perfect opportunity to present some meaningful findings from the long-awaited monetary policy framework review. we don't expect a formal announcement but i think powell could certainly signal where the committee are placed in terms of changes to monetary policy and what we expect will be an active commitment to inflation. the july minutes already pushed back on the prospect to curb control. that centers us around the likelihood of theout right guidance and inflation becoming key policy pillars that could include commitment to keeping the funds at zero until we have

actual inflation reaching or exceeding the 2% target. and with a period of above 2% inflation tolerated as an offset for it running below 2% for a long time. there you have a clear signal that not only will the fed tolerate inflation temporarily above 2% but they're aiming for that outcome. this is going to be really key, i guess, for the inflation expectation picture. it's going to be key for real yield. that's certainly going to continue to drive price action in precious metals, in the commodities markets, in technology stocks. but again it centers around that debate, picking that inflation topic is -- target is easy but the fiscal response is going to get us there. haidi: eleanor, always great to have you here. still ahead we speak with insiders on the outlook on oil. we also preview china's second

quarter results. up next, a mega i.p.o. in the works. jack ma's group files for dual listing in hong kong and shanghai. it could rival the biggest debuse on record. we'll have details. this is bloomberg. ♪

shery: you are looking at a live shot of wellington there museeland investors are struggling with interruptions to trading as well as the indecks not available. the website is also unavailable at the moment after being interrupted again following a second cyber attack in as many days. we had just had the resumption of normal trading this morning after the late afternoon denial

of service attack yesterday, on tuesday, that was due to a volume metric distributed denial of service attack from offshore and the operator saying the problem today was similar to yesterday and they'll be releasing a statement shortly. we'll continue to watch that as trading has been halted following a second cyber attack in new zealand. let's get you to the headlines now with corina mitchell in new york. >> refiners and drillers are pulling back as a powerful storm heads to the texas-louisiana coast. category three system and could halt refining capacity for months. it's expected to have winds gusting 180 kilometers per hour when it arrives late wednesday or early thursday. the governor of wisconsin declared a state of emergency after violent protests following the shooting of a black man by protest.

after a second night of protests in kenosha saying systemic racism and injustice can't continue but damage isn't the answer. jacob blake was shot seven times and his father says he's paralyzed from the waist down. the u.s. ambassador is accusing u.n. members of supporting terrorists. last week secretary of state mike pompeo insisted washington has the right to reimpose sanctions despite aban tchoning 2015 nuclear deal. all security councilmembers bar one said the u.s. move would be illegal. and huawei's c.f.o. failed to win access to dock yulets withheld from her by the can canadian government. they say the information therein is not relevant to her. she wants canada to dismiss the extradition request that allege she is and huawei violated

international trade sanctions. global news 24 hours a day on air and on bloomberg quick take powered by more than 2,700 journalists and analysts in more than 120 countries. shery? shery: jack ma's group filed for a long after awaited i.p.o. which will be a joint listing in hong kong and shanghai and could be one of the biggest debuts in years if not ever. we are taking a closer look at this, steve joins us from hong kong. this could be even bigger than saudi aramco. steve: that's right. ant is small in name only. this is a growing part of ali baba's sprawling business. it's involved with the payment side of the business through alipay. if you see the i.p.o.'s, globally since 2000 you can see that this one potentially could be right at the top of the list

once it finally does go public. we can see that saudi aramco was just over $29 billion u.s., ali baba in the u.s. listing in 2014 was $25 billion. now people familiar with this i.p.o. for ant group say they're targeting a valuation of about $225 billion based on an i.p.o. of about $30 billion. if the markets are favorable as they seem to be right now. but again it could be a month or two until its listing. but we can look at the statistics that we've goten from this company already. for the first half of this year, revenue for ant group was 10.5 billion u.s. dollars. profit of 21.2 billion yuan. but ali pay and the transactions business is amazing. $17 trillion in transactions. that's $118 trillion -- that's 118 trillion yuan in the year

through june. that's 12 month through june. the ali pay app has a billion users, 711 million monthly active users in the 12 months through june. more than 0 million merchants, mostly in china, using ali pay. this will be a dual listing in hong kong and shanghai with 10% of the -- 10% of shares of new shares of outstanding total capital no less than 10% new shares of total capital. that's what we know right now. shery: ali baba is listed in new york. can we assume they avoid a u.s. listing because of the uncertainty thrown out by the u.s.-china situation? stephen: i don't think they'll say it but you can connect the dots. you're seeing pressure from the trump administration and more than just hins that the chinese listed companies in the united states are going to have higher

scrutiny, more scrute any. the microscope will be much bigger on those companies. possibly there are some allegations that i'm not name anything company here at all but there's allegations being thrown out about possible fraud. there could be some delistings. there could be some restating of financials. so there's some risk listing in the united states for these chinese companies. even the state department last week put out a letter to university endowment. university endowments that have more than $1 billion invested, about 14% of their holdings of stocks are in foreign equities. many of them are chinese companies that ast -- that's a potential big risk for chinese-listed companies as well. it really does also, the u.s.-china trade tensions really is a harbinger for things to come for companies like ali baba. like ali baba, ant group has put the brakes on expansion in the united states. jack ma even said the prom to create one million new jobs in

the united states will be impossible given the current tension. shery: all right, our asia correspondent stephen engle with the latest on that monster listing. coming up, what to expect from president trump on night two. melania and mike pompeo taking part in the republican national convention. the theme this evening is land of opportunity. this is bloomberg. ♪

haidi: the theme for day two of the republican national convention is land of opportunity. secretary of state mike pompeo is among those who will appear along with first lady melania trump and the president is planning to speak every night of the convention which is a departure from the norm. bloomberg white house reporter josh joins us from washington. already some raised eyebrows about secretary pompeo speaking from jerusalem.

josh: yeah. for a couple of reasons. the main one is that generally secretaries of state stay above the fray, not get into the muck of partisan politics. a.p. reported that pompeo actually sent embassies around the world not to get too involved in the election. effectively himself going to break that tonight. but -- we'll see what he has to say, obviously he'll bring an element of foreign policy to it, we haven't heard a lot about that in the first day. that'll be a bit of an outlier tonight. a lot of speeches tonight are for lack of a better phrase ordinary americans telling their stories. particular circumstances they credit president trump with bringing it back. the aim of tonight really in me ways is sort of outlining accomplishments for the last fur years and sort of painting trump as kind of a helper which is a bit of a change from four years ago. but we'll see. they have actually reportedly

just dropped one of the speakers at the last minute because she tweeted an anti-semitic thread of tweet, retweeted an anti-semitic thread of tweets a few hours before she was due to take the stage. so off to a bit of a rocky start. haidi: we expect to hear from president trump every night of the convention this week. we were speaking with another bloomberg contributor and former mccain campaign manager, he was talking about the almost cult of personality. how much of this is putting president trump front and center? josh: absolutely. many of the speeches have been deliver sod far as if they are sitting in a room speaking to trump personally. and of course the republican party drew raised eyebrows when they didn't really adopt a formal policy platform, instead everything is just sort of in service of president trump. unusual but also not surprising. we've been headed this way for a long time.

trump has bent the party around himself. since the moment he took office. and frankly before that. a colleague wrote today, win or it's not a done deal but win or lose this fall the republican party is trump's party. that's while why we'll see tributes tonight and tomorrow with all roads leading to trump in every speech. haidi: where are we in the polls after the d.n.c. last week? josh: we're not seeing much of a change in the post-d.n.c. i don't know that we'll see much change after the republicans either. the president has been doing a lot of public appearances. a lot of speeches. may be a saturation effect. a lot of people have made up their mind about president trump. they either really like him or decided they don't want to vote for him. he's not the type of president

who leaves a lot of room in the middle. so i don't know, we'll see -- i don't know that we'll see much of a bump. vice president biden has a, you know, healthy but not at all insurmountable lead over president trump, in particular in states like pennsylvania, wisconsin, michigan. three crucial states that won trump the presidency effectively four years ago. we'll see. trump yesterday reached out in particular to black voters to make -- who make up a big chunk of the population in most swing states. they're trying to close the gap. haidi: josh wingrove in washington ahead of the second night of the national convention. our convention continues at noon sydney time. shery: israeli drugmaker teva has been charged in the u.s. with conspiring with rivals to fix prices of generic medicine.

the justice department said the company overcharged american consumers by at least $315 million. they rejected a deal for a fine and admission of wrongdoing. five other companies settled and paid a total of $426 million in penalties. mcdonald's ongoing investigation into former c.e.o. steve easter brooke is looking at whether he covered up improper behavior by employees. an executive said the board is working with outside council on a claim he may have helped conceal actions by others. he was fired in november over a consensual relationship with a staff member but mcdonald's was later told he'd been involved in multiple affairs with employees. merican airlines is to cut another $-- another 19,000 jobs when the federal aid ends october 1. that brings job losses at the

carrier to 40,000 or one third of its work force since the pandemic began. 7,000 people will be furloughed and able to return when things improve. they are expected to announce flarns when federal help stops. virgin atlantic won support for a rescue plan over the next year and a half aimed at returning the airline to profitability. virgin has identified $1.5 billion in cost savings and $800 million will come from shareholders including virgin itself. the rescue now needs the approval of the british high court next week. up next, feeling the lockdown pain, hosting its biggest quarterly loss. we break down from results from what's now southeast asia's second largest budget carrier. this is bloomberg. ♪ you doing okay?

yeah. this moving thing never gets any easier. well, xfinity makes moving super easy. i can transfer my internet and tv service in about a minute. wow, that is easy. almost as easy as having those guys help you move. we are those guys. that's you? the truck adds 10 pounds. in the arms. -okay... transfer your service online in a few easy steps. now that's simple, easy, awesome. transfer your service in minutes, making moving with xfinity a breeze. visit xfinity.com/moving today.

haidi: we are seeing the nikkei holding flat as we have the japanese yen moving with the u.s. dollar. we are trading at around the 106 level. we're watching closely on what's going on with prime minister abe's health. we have heard from j.p. morgan that if we see a double whammy of prime minister abe resigning because of his health not to mention president trump losing the election that could push up the japanese yen against the dollar to a strength of 100 because of safe havep demand. we'll be watching that closely. the kospi moving around .5% at the moment. we did have the korean wan.

consumer confidence numbers in south korea improving despite the fact that we have another resurgence of the coronavirus andemic there. the aussie dollar stronger against the u.s. dollar at the moment. the index pricing right now unavailable. we are hearing that they are facing a similar issue that they did yesterday with denial of service attacks that were reported. u.s. futures holding steady after we saw three record sessions for u.s. stocks. haidi: we will be watching air asia territory when trading kicks off in kuala lumpur. they become the latest carrier to -- airasia the latest to show the extent of the damage from this pandemic. what is airasia doing to try to secure funds and keep cash flow

going? >> well, they are in talks with the banks right now to see if they can secure loans and they are also in talks with investors otentially for sale. we reported in june they were in talks with airasia to buy a small stake in the airline itself. but not much has come out from those talks as of yet. but airasia did confirm they're still in talks with a few other investors as well. so we'll have to see how that comes out to be. haidi: given how limited travel is, how gloommy is the situation for airasia and other airlines as well? >> one of the things that's been a saving grace for some carriers around the world is the fact that domestic travel is not under a lot of restriction at the moment in a lot of countries. that's helped some airlines ease some of the cash flow where

domestic flights are -- have resumed and actually we're seeing more activity there. the real problem is the international side because the governments still have border restrictions in place with the covid-19 outbreak right now. and we are seeing several new waves of burning up in some countries. for the international travel to come back, we're going to have to wait a few more years for hat to happen. haidi: great having you on. let's get some other headlines. >> the u.s. continues to be the focus of the coronavirus but there are signs infection rates are slowing further. california and florida show improvement while arizona has been taken off new york's travel quarantine list. new cases in france also slowed. infections in germany near a four-month high. hong kong will relax social

distancing rules beginning friday allowing evening dining at restaurants again and the removal of masks while exercising. muevea theaters, beauty parlors an some outdoor sports venues will also reopen. thailand has approved an extension of its virus emergency plan through september. seeking to prolong its streak for three months without a local covid-19 transition. -- transmission. yap these prime minister shinzo abe is planning a news conference on friday. he's made two trips to the hospital in the last week, his office said the first was to a routine checkup and the second was to receive results. rumors about his future have prompted j.p. mor can to say the yen could surge. and soccer star lionel messi may be able to quit barcelona. he handed in a transfer request citing a clause in his contract that would let him leave for free. barcelona say the clause expired

in union and they'd hold out for 700 million injure oh -- euros. that's $830 million u.s. messi is known to be increasingly unhappy as the team's season fell away. global news 24 hours addai on air and on bloomberg quick take. this is bloomberg. haidi? haidi: with china and the u.s. have reaffirmed their commitment to the trade deal with both sides demonstrating a work on it.to question asked about the current climate between washington and beijing. >> i don't think much as changed. remember these talks have had been delayed took place against the backdrop of the republican national convention where there was a lot of harsh rhetoric about china and trump's been quoted recently about -- saying

that the u.s. is not obligated to do business with china. so there is a lot of tension still in the air. meanwhile we're conducting drills in the south china sea as hina rolls out its own sea drills in many maritime regions around its coast. so tensions remain very high but it was surprising to hear this fairly sanguine message about macroeconomic coordination between the two countries. shery: do you think we're hearing different messages from president trump and other members of the republican party? we have people analyzing the r.n.c. and suggesting that maybe on certain topics secret messages are being allowed to come through to appeal to different parts of the electorate. is that true on international relationships with china? does everybody in the republican party think like trump on this? >> i think there are diverse opinions even within the trump

administration in how to handle china. i think frankly trump seems more willing to work with china in many aradio in as than other members of the white house. pom te'o -- pompeo for example, secretary of state pompeo has take an strong sans on the issue of the nature of china's political system and has pushed for making sure that the united states presence in the region is very clear to china. it has criticized the preceding administration as being far too weak on china. trump has certainly criticized the obama administration on many fronts including on its china policy but he has been willing been willing he's to coordinate and though he's taken a hard stance on the trade deficit has seemed willing to negotiate with china and leaves open the possibility that the two countries could work out some kind of trade deal for the

long term. haidi: as china watches the run up to the u.s. election do you think china has a preference for trump or biden? i've heard many views on the subject. >> this is a debate inside china. there are different people weighing in. there are many who argue that a biden administration would provide valuable stability to the international system and that that would in the long run benefit china more than another four years the trump administration. but there are many in china that see trump as a gift to china because he's been willing to take apart a multilateral system that has -- that the chinese have not always seen as in their interests. it gives more space to the chinese to start to push for its own norms and preferences internationally. moreover, many in china see trump's policies as ultimately

damaging to the u.s. economy and predict a soviet style american collapse on the horizon. there are very different views n two sides. haidi: carla freeman of johns hopkinses. coming up next what mealters to the oil market. our guest tells us what's driving food and energy prices. this is bloomberg. ♪

haidi: oil and gasoline are moving as hurricane laura rattles toward the u.s. gulf coast where refiners are bracing for the storm and shutting down operations. joining us now from singapore is vandana hari. what are we expecting in terms of impact from these tropical storms hitting the u.s. gulf coast? how long lived will they be? vandana: good morning from singapore, thanks for having me on your show. the two storms in the u.s. gulf of mexico, more so laura, have been impacting oil market sentiment and the prop up in

crude prices overnight to fetch five-month highs. there have been some precautionary shut-ins at the gulf of mexico. nearly 1.6 billion barrels a day has been shut in. there have been refinery shut ins in texas and louisiana. three million barrels a day of capacity out of 19 million in the u.s. as i said these are precautionary shut ins. the mark has to wait and watch what effect, especially for any damage to the offshore facilities and refineries. that's a real problem if that happens because that leads to a longer term outages both upstream and downstream. >> how does this affect the level of oversupply we already have in the market? >> one of the reasons, i mean, less than 2% overnight and for this level of shut ins, in

normal circumstances, precovid, one would have seen a bigger jump in crude prices and probably downstream in the u.s. as well. but right now if you take, zoom out and take a macro picture there's plenty of supply in the world. best case scenario, global demand is mow probably i would say 95 million barrels per day. still about five million barrels per day to catch up with. and of course then we have more than 10 million barrels per day easily spare capacity with opec and nonopec because they have cut back production as well. so not -- plenty of oil not tight market scenario even as the shut ins are prolonged. shery: what assumptions are you making about the u.s. dollar and the impact of crude prices? vandana: the u.s. dollar has been a major factor especially

supportive pactor. crude typically moves in inverted proportion to the dollar and it's been a very tight negative correlation over the last couple of months. now the dollar depreciation is likely to continue. at the least i expect it to remain under pressure. we have a lot of easy money in the u.s. and expect it to continue. so you know that will remain a supportive factor i think. would look out for yes roam powell's u.s. speech tomorrow to see what he says in terms of forward guidance, the three-month policy of the fed. i think we might see quite a bit of volatility in the dollar. but in general i think the dollar will remain supportive of crude prices in terms of being under pressure. >> does opec at this point just kind of sit back and see how the current policy settings play out? >> yeah, i think -- after opec's decision in april to make that

huge 10 million per day cut, i think it's pretty much staying the course. they tapered those cuts a little bit. i think it's petty much now out of opec's hands. they have -- or rather the market has to wait to see how demand catches back up to regular levels. probably not until the end of next year but you know it's very, very dependent on how the pandemic pans out. and basically the dollar strength as well which is also pretty much nothing opec can do about it. just wait and watch for them. shery: we do have china results out thursday, what are we expecting here given we have seen more people return to work in china, a little more stabilization after the pandemic? vandana: i think the chinese companies would probably draw plenty of potential in the oil markets because it's been a two-speed world.

in the pandemic recovery phase as we know china began reopening much before the rest of the world. the chinese lapped up a lot of crude while it was going on the cheap. tchand was completely destroyed and the remaining was picking up in china. i would expect, look,ier-on-year i think it's going to look bad because there's plenty of red ink but quarter on quarter perhaps, it will be interesting to see if they get a little bet for the q2 versus q1. we do know their defining margins are protected to some extent as well because the government has a floor. crude does not reduce pump prices. refine verse to turn over those quote-unquote profits back to the government. but on paper the margins may look a little better. sales may look bet for the q2 versus q1. year-on-year it's still going to e red ink.

shery: we appreciate your time. coming up, ali baba and tech companies have surged. we talk about whether it can sustain that level of investor interest when it reports earnings later. this is bloomberg. ♪

haidi: a quick check of headline this is hour. apple set to launch its first online store in india next month. we're told the digital outlet will be ready ahead of the diwali spending spree. apple planned the store last year when rules were relax bud the project was held up by the coronavirus pandemic. one of tech's most valuable private companies has broken years suspense by filing to go public on the new york stock exchange. they're backed by a tech billionaire and is valued around $20 billion. it's expected to be the largest tech listing since uber. jack ma's ant group has filed for a twin i.p.o. in hong kong and shanghai offering at least 10% in new shares to bolster its position as china's top online payment platform. it's generated more than $10

billion in revenues the first half. the sim all tains you listing could be one of the biggest in years and could top saudi aramco's record, $29 billion. >> chinese tech company set to report second quarter earnings in a few hours. shery: shares have risen the ast 10 days. the dominant smart phone business faces uncertainty in big marks such as india. let's ask bloomberg intelligence's, give us a little bit of background when it comes to xiamoi's market share and where it stands in this global competition. they're p -- xiaomi, lucky, they benefited from the pandemic situation. given that it has very strong

online distribution channel. very good at using online channels and its own application to sell smart phone. recently we have seen that even for higher end smart fones they do pretty well. they don't have to deal with a lot of offline that have been hut down in china. they're stronger than offline distribution for that, they had to shut down stores on and off so they benefit from that and obviously given the fact that they put most of the focus on 5g phones, that helps a lot in terms of shipment because china arket is all about 5g now. shery: we were just talking about apple's store in india.

what about india? how is it faring there in competition? >> i would be more concerned in the india market even though it has been dominating, number one market share position. the reason why i'm more concerned is not only you mentioned about spending there but also they have a formidable rival, the number one telecom operator in india. and we have heard a lot of news about the platform with facebook, google, and one reason they worked with google, they want google to partner with them in making low end hand seths for india. it will be difficult for xiaomi to maintain its position and at he same time provide services.

shery: 2021 is supposed to be the year of 5g if it weren't for the pandemic. where does xiaomi stand here? >> we expect they'll continue to do well this year. a lot of consumers may prefer more affordable devices which xiaomi can offer. but when it comes to more mature or later stage, it comes to r&d is still xiaomi's not as good as huawei's. one may argue that given what ,appened to huawei's u.s. trade xiaomi will benefit but at the end of the day quality is a very important thing. without its own chip making capabilities, it would be a challenge for xiaomi to compete

in the high end for 5g. so more applications -- when more applications come in, how do they experience differ across different ventures, then xiaomi would have to come up with roducts to be competitive. shery: we're also hearing that there's changes at the top, they just appointed credit suisse head of asia technology, what do you see in terms of staffing changes and the direction hey're trying to take now? >> they are putting a lot of emphasis on overseas extension. i think obviously china is a very difficult -- very competitive market. you already have four dominating company there is. they could have a hard time

getting market share. xiaomi the fact that needs to define its user base and most internet users already come from local chinese consumers, they need to venture out in order to be an internet company, they have to go global. shery: great having you on. we have an alert on the bloomberg now chinese gaming firm suspended trading in hong kong. remember sources told bloomberg that they were close to taking it private in a deal that would value the firm at about $1.3 billion. negotiations were set to -- were said to be in an advanced stage and an agreement could be announced as soon as this week. this comes as tencent is consolidating its gaming business. this would also mark the end of

an almost year-long process where we have seen interest from sony and others on the technologies and also coming at a time when tencent is looking at making a streaming gaming giant as well. plenty of news on that front. as they face more pressure from the u.s. on their ban. haidi: that tech realm, you recall that story we had breaking a little while ago. taiwan reportedly set to tighten controls on chip investments to china that supporting the commercial times. starting an official from the industry. we'll be watching the shipment including tsmc, media tech and others that are used by huawei as well. so those are some of the stocks we're watching in terms of that market. we are also getting breaking news when it comes to the situation with that second attack on the new zealand stock exchange. they are saying it is working to

repair the system connectivity issue. we earlier heard from a spokesperson from the exchange saying the problem today was similar to yesterday's offshore denial of service attack. this is ploomberg. ♪

>> welcome to bloomberg markets china event. imt tom mackenzie. ivid: we are counting down -- am tom mackenzie. david: we are counting down. hong kong and shanghai i back in the spotlight. the simultaneous