haidi: very good morning. i am haidi stroud-watts in sydney. we are counting down to asia's major market open. shery: i am shery ahn in new york. our top stories this hour. asian markets faced an uncertain start with a pre-election stimulus deal seen unlikely despite reports of progress in washington. the two sides will talk again thursday. the imf is warning of big risks still ahead for asia despite the recovery. the fund repeats that china

remains fundamental to the global economy. consecutive a fifth quarter of profits and says it is on track to supply .5 million cars this year. the streak adds momentum for the stocks inclusion on the s&p 500. howi: let's take a look at we are setting up for the asian session as we continue to see the ricocheting price action in the u.s. with no stimulus deal insight. let's get it across to sophie kamaruddin to look at how australian markets have opened. i love the idea of investors like a cat chasing a laser pointer. how are we setting up today? sophie: still chasing that tail. asian stocks set to drift lower after the choppy session. treasury selloff is weighing on aussie bonds this morning with the 10 year yield rising above 80 basis points, rising for a fourth straight session. treasury futures are continuing to edge lower and that greenback

is seeing the aussie dollar hold above 71 this morning and the asx 200 opening lower by .2%. the are keeping a close eye on resource names this morning after a series of production updates from the likes of santos and woodside and energy players focused after we saw wti fall below $40 a barrel. old miners also interview with one-weekolding near a high as markets assess if this is a risk on play or if gold is still a haven bet. copper in focus after futures inped $7,000, the first time two years. we are seeing futures stalling somewhat, taking a bit of a breather this thursday. and we are keeping an eye on crown resorts as well, flipping the board to check in on that stock this morning as weak -- that casino operator has sent investigation. crown under pressure by more than 1% at the start of cash trade as the chairman apologized and said changes to the board will be made as shareholders

push for reform, sharing. shery: let -- shery. shery: signs of progress on stimulus talks in washington with the white house saying it would like a deal in the next 48 hours. nancy pelosi and steven mnuchin have talked at length and will speak later thursday. our senior economist editor, joe sobczyk, joins us from d.c. with progress at a snails pace, not a surprise we may not get a deal before the election. joe: that is correct. it is very unlikely given, if they were even able to come up next 48ompromise in the hours, getting the legislative text written, passed by the house and senate. at this point, it looks all but impossible given what needs to be done, so there's -- they are not fully at a deal. there remain some upsetting

issues that remain bedeviling to talks, including aid to state and local governments. also propositions among republicans in the senate to any for the treasury secretary, steven mnuchin, talking about $1.9 trillion, so even if they get compromises, there is no guarantee the senate will take it out before the election or even after the election. thei: just take a look at latest polling of course, just 1.5 weeks from the november 3 vote, where are we at, particularly when it comes to these key battleground states? the gaps we are seeing, are they be on the margin of error? joe: that's right. there is a spate of new poles has aday and biden substantial lead in michigan as well as a 5% need in

pennsylvania, and he's also leading in wisconsin. those are three key states that help put trump over the top in 2016 by only the narrowest margins. in addition, there is a poll out that shows the two men are tied in texas. byt is a state trump won nine percentage points in 2016. the fact that biden is running even with them there, it's a sign of some real trouble for the trump campaign for republicans in general that is going to force them to spend money in areas that they perhaps had not anticipated they would need to at the beginning of the year. now, the battleground is much wider. anothern -- shery: election variable could be the confirmation of the supreme court nominee. where are we at? the senateow,

judiciary committee will take votes to advance through the full senate. it's pretty much a foregone conclusion. democrats are planning to boycott that session and will not participate in the vote. to 10publicans have 12 advantage on the committee. that will not stop. mitch mcconnell has already set out a timeline in the senate that will lead to a confirmation vote in another week. the eight days before election. that is play much on track to go along and it's pretty much baked in at this point for the politics. the democratic opposition is unified as a republican support is as well. senior congress editor

joe sobczyk with the latest in washington. let's get you the first word headlines for this hour. the trump edna's is ramping up tension wounds -- the trump administration is ramping up tensions. daily,clude the economic which provides a window into china's view and five other less well-known publications. the state department says all six are effectively controlled by a foreign government. the u.s. approved a potential $1 billion arms sales to taiwan, insisting it will not alter the balance of power in the region. the state department says the plans and serve u.s. national, economic, and security interests, as taiwan seeks to maintain incredible capability. beijing has repeatedly warned against weapons and other dealings with taiwan, which it regards as part of greater china. sterling rose the most in six months as the u.k. government backtracked and agreed to resume brexit talks.

it jumped after bloomberg reported downing street was willing to talk, sources telling us to know -- no-deal deadline is november. boris johnson terminated negotiations but the two sides are set for daily talks. the u.k. still wants more compromise from brussels. lee thai prime minister says he is willing to lift the state of emergency in bangkok if antigovernment protests remain peaceful. he has pledged to open the door with talks for demonstrators, calling for more democracy, confidential -- constitutional reform. he is prepared to make the first move as long as protesters guarantee there will be no violence. those are your first word headlines this hour. shery: still ahead, the imf china mission chief discusses the outlook for china and the post-pandemic risks. catch that interview later this hour. justxt, we speak to our about the best opportunities in emerging markets. this is bloomberg. ♪

haidi: let's get you a quick check of the latest business flash headlines. could be the group biggest ipo on record with securities regulators giving the ok for a share sale in shanghai and it is aiming to raise $35 billion. it is set to price october 27. the deadline for payments will be november 2. the dual listing could give them a market value of $280 billion. beijing is warning sweden that its ban on huawei could hurt the prospects of local companies doing business in china. the announcement comes a day after they blocked local operators from using huawei and zte as part of the 5g rollout. hasing says sweden discredited china and is cracking down on telecom companies without any evidence.

it calls stockholm's decision wrong. florida seems to have won the race for one of the biggest names in hedge funds. it is said to be moving its headquarters from midtown manhattan to west palm beach. joining many funds heading to the sunshine state. lord i has no individual income taxes, no estate duties or capital gains requirements and it has become a hot destination in recent years. shery: emerging market stocks are looking to continue their hot streak as the msci equity index test its highest levels in 2018. optimism over u.s. fiscal stimulus has been stoking appetite for risk. joining us now is the portfolio manager and head of emerging-market equities. great to have you with us. we have seen extreme optimism when it comes to chinese markets. this chart on the bloomberg showing our viewers how chinese stocks have hit 13 year highs and we are headed towards an all-time high as well how are you positioned in china?

thanks for that question. we are underweight china, marginally, but it's based on the way the index is right now. the chinese and is north of 40%. it is concentrated in a lot of the internet company so while we have owned a lot of these for some time, it has been on site in terms of their performance. otherwise, in china, we are constructive. we own, across the board, from consumer financials, where i think some of the leading financials are looking very attractive and some of the internet assets, which we also believe in. more: when we are seeing earnings prices being revised upward, rising over potential stimulus measures in the u.s., helping them out, perhaps a weaker dollar as well. where do you find value in this environment? that is a good question.

i think with the ramp you see in share prices, it's been concentrated across most markets and particularly in china. more thematic and momentum trades and while the fundamentals for a lot of these as messes the internet tech era look good, i think the multiples are extended. china,financial side in where we have seen some of these smaller, not the large, state-owned ones, and particularly in india, you are finding where the economy is recovering quite nicely despite, i think, covid still taking its course, but the better run private sector financials in india are showing really good numbers and they seem to be over provisioned and kind of ignored. that's probably in my mind singularly the best opportunity out there. interestingreally

to me that you are seeing the likes of mainland china as well as indian assets kind of perform almost as risk hedges against u.s. volatility, u.s. election volatility. will they continue to serve as electionges after the in the sense that they will not be as much affected by the political situation in the u.s.? conrad: i think with china, there's obviously the back and forth. with the current administration, you have seen them single out individual names in china as well as in the u.s., so that is added volatility, in a sense. all of those economies structurally have tremendous growth, underpenetrated consumption, embracing technology. even the financial sector has a long runway so i could see those countries with secular opportunities. i truly believe now, from a standpoint that china and the index reflects the chinese dominance and emergence.

runway that has a longer from that standpoint. haidi: i also want to get your views on ant financial as we get incrementally closer to that ipo. you talked about high valuations for alibaba. ant financial, when you take a look at the profitability and growth trajectory, is a high-quality ipo. is it something investors can make money off of? conrad: that is always the conundrum when the valuations have been raised, when you are growth at a 40% plus cts in the first nine months of the year. have significant growth runway, but again, it's how much money is left on the table in the short-term. there's a? . i will just say that for alibaba, is not as cheap as it used to be, but if you look a couple of years out, there's a

lot of properties across asia but also across emerging markets. globally, in fact. it makes it look reasonable when you look 24 months and you can get this business at 25 times. it's definitely not cheap, but it is reasonable and not agree just like some of the other businesses that are potentially even losing money. manager, conrad saldanha, joining us. great to have you with us. let's take a look at some of the movers this thursday morning in australia. helio's jumping to a record high. it has been extending these gains that we have seen recently deliver strong revenue and profit growth expectations for the first quarter. we are seeing that apple performance to the tune of 8%. the minor filing after its quarterly production report, just failed to meet expectations. the financingt

company falling after westpac completed the sale in the player following the banks tie up with the rival, after pay. coming up next, tesla smashing estimates across the board. elon musk says it was their best quarter in history, even across the rest of the global auto industry. we take a look at results, next. this is bloomberg. ♪

haidi: tesla has reported a fifth consecutive quarter of profits, handily beating estimates, remaining on track to deliver .5 million cars this year, despite weaker sales than the rest of the auto industry. ed ludlow joins us now. you take a look at whether it is earnings, revenue, cash flow. there is not a lot you can pick apart when it comes to this report. came down toy execution.

tesla is basically just getting better at building electric vehicles and then sending them to customers around the world, and the narrative concerns growth. shanghai boosted its outputs to 250,000 vehicles a year. elon musk wants to get one million vehicles a year out of shanghai and it needs to be an area of growth. one thing we did not really hear about is demand specifically out of china. they used price cuts as a lever to drive demand here and in the united states. really talk to it. we do know they had big plans to ramp up. 2021 looks to be a big year where they bring in berlin at factory online, the austin factory online, and the big takeaway is that next year, we will see the tesla semi-truck as well as the cyber truck, which is the futuristic pickup which americans love. is it concerning that a huge chunk of their income is coming from regulatory credit?

ed: this is what the street wants to know about. even for tesla, regulatory credits came down from a prior quarter but they are more than tesla was expecting, more than the street was expecting. the concern is that there is -- as legacy automakers ramp up their production of vehicles, they will not necessarily take on tesla in terms of market share. gm,worry is the likes of fiat chrysler, that tesla currently sells credits to to offset their emissions, they will not need them anymore. if you look across wall street's earnings report, growth margin expansion, they had an operating margin of 9.2%. margins, --ross gross margins, elevated. saw a lot ofsts potential, a lot of optimism, that future growth and future gross margin is expected.

software sales can continue to impact the bottom line in a really positive way. shery: ed ludlow with the latest on tesla. staying on earnings, verizon exceeded wall street profit estimates and raised its full-year forecast. signs that the company's focus on mobile and broadband market services is helping it whether that pandemic. the pandemic.ther the ceo spoke about the results. >> we are working with all the top brands our customers want to have. that is how we work. we have the best distribution, the best network, and a ramp. that is why we have that. microsofto working in . that is how we are working. we work with all of them to give

to our customers and we monetize it. >> i would like to get your perspective on what you think about the antitrust case on google and the animosity in washington among big tech and how that may affect you in the longer term and your relationship with google or the money you wind up getting from google to put your search -- their search on your phones. i have seen the same news reporting. i have no insight into what this doj is claiming, etc. i have no comments on it. we are working with different companies and google is one of them. >> unfortunately, we are not going to let this go just yet. revenue sharing agreement with google to install google search as the default option on the new phones that you send out? hans: we have a long relationship with google when it

comes to different applications. on all theused phones that's not the iphone. we have a commercial relationship with them, yes. >> i understand you will not give us a hard number. if we get pushback from the likes of google and how they are able to distribute their search engine, that's going to affect your own. it's going to affect how consumers react to it. i mean, there has to be some contingency plans or something. whatever her decision comes out, we will cope with that. we work with many different decisions in our industry over time so it's nothing unusual. we are only seeing this for one day. let's see what is going to happen. haidi: let's talk about the numbers. what was behind the improvement in guidance you have delivered to the market today? what are the factors that are driving it right now, and how sustainable are they?

you talked about 5g. is there anything else? you saw that our service revenue was coming to growth in the third quarter even though it was 7.7%. it was not very important. we improved from july to august and august to september so we are moving, and clearly, what you see in the consumer side, we are now improving on the business side as well. improving on the broadband. best in six years. much was your read on what was needed in these markets. we are very happy with that. we saw our media companies doing good in this quarter, improving from coming down. high double digits up to 20% in the second quarter, now down 7% and then improving in the order. many assets, they are improving

dramatically when it comes to users on the network. we continue to have good cost control in the companies and that's why we can see a good quarter coming. we are adding that with the iphone launch coming in the fourth quarter. last year, it was in the third quarter. that's why we see a good base for going into 2021 as well. thei: that was a rising -- verizon ceo, hans vestberg. we had that whipsaw session on wall street overnight. will there be a stimulus deal, once there? -- won't there? this is what we are seeing when it comes to trading here in australia. downside of one point 1% here. a pretty bearish outlook despite some strengthening we are seeing when it comes to the aussie dollar with that weakness in the bloomberg dollar index touching its lowest level since the start of september. new zealand trading a little bit

lower, .5%. the nikkei 225 looking like we will get a tepid start to trading coinciding with a lower look when it comes to futures. lots more to come. this is bloomberg. ♪

karina: you are watching "daybreak asia." i am karina mitchell. stimulus talks edging towards an agreement in washington with nancy pelosi and stephen mnuchin making their progress. an aide to the speaker says they are closer to putting pen to paper on draft legislation. they will talk again later thursday. the white house chief of staff said the administration is aiming for an accord within the next 48 hours. the nomination of amy coney barrett to the supreme court reaches a first vote later thursday with democrats on the senate, judiciary committee, saying they will pot -- boycott the pole. the democrat move will not hold up the process. gop leaders aim to confirm her

nomination in a full senate vote on monday despite democrats saying the process is rushed. is the latestor prominent figure to call for more fiscal stimulus, saying failure in washington is biggest that to the u.s. outlook. she says withdrawal of federal support could hit employment and spending. the beige book economic survey shows the economy continuing to grow but in an uneven way with activity markedly different by sector. olympic officials in tokyo revealed plans to protect visitors from the coronavirus ahead of next year's event. they displayed screening measures at a convention center which will host media at the games. most are familiar but there's also an innovative sticker to measure body temperature in a matter of seconds. the ioc has said any athlete testing positive will be excluded from the game. day, onews, 24 hours a air and on bloomberg quicktake, powered by more than 2700

journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. haidi: the imf is whining that despite the tentative recovery taking place in asia, there are still big risks ahead. the fund is upgrading its growth forecasts for china to 1.9% for the full year thanks to the faster than recovered, better than expected recovery that barely gathered pace in the third quarter. kathleen hays joins us now. kathleen: i'm joined by a very special guest. someone who is totally immersed in what is going on. joining us from washington, i believe. i want to get right to one of the big themes in the report, the regional outlook, which came out today for asia and the pacific, and its this recovery. asia is going to contract 4.4%. of one point -- 2.2% instead 1.6%. getting my asian numbers mixed

up. the bottom line is this. china must have its own category if you are talking about multispeed recoveries because they are the only ones growing. why? they were first into the pandemic, first out. is it locked, is it a better fiscal policy, what is it? >> great question. they are close to getting out of the woods if they get what we expect to get in the first quarter. they will end up with 1.9% positive growth, one of the only -- effectively the only major economy with that. of gettingombination covid under control, localized measures, being quick about it in the course of the year, but it's also a result of good policies that helped to mitigate the impact of the crisis and support the recovery. we are not quite out of the

woods, however. we are still looking at this hand over. .n particular, consumption it's not quite at the point where you can withdraw your support and stop worrying about growth. nexteen: when they meet week, china's four days to hammer out the next five years, what would you like to see? you just mentioned that move from public support to private sector support and private sector support -- it raises china's debt. everyone is putting that on the back armor in every country. what do you want to hear, in the atmosphere, -- imf's view, what do they need to put on the table? >> it is a short-term and long-term question. in the short term, since you mentioned it being higher, we would like to see that fiscal policy focuses on targeted problems, helps households, to

support consumption and facilitate that handover we would like to see to make the recovery more sustainable but that's also sort of a slightly longer term agenda. plenty of scope for reform in china. markets can play a large role in the recovery going forward so we want to see some of the long-standing reform agendas to be implemented and reinforce that going forward, soe reform and competitive neutrality. kathleen: so one of the biggest risks, in your latest report out today, asia and the world, rising u.s.-china tensions of all kinds. technology, trade, you name it, and they are continuing to grow. every day, we get something from the u.s., and china fires back, etc. how is this affecting china?

let's start there. is this a risk to them? can they keep these battles going with the u.s. and not be hit by it, too? risksre are a couple of to the recovery scenario we have in our forecast. there is the handoff i mentioned. there is also some concern about financial volatility across corporate debt, but external tensions are clearly part of the risk metrics we are worried about. this adds a couple of dimensions which have different timelines. trade tensions are still with us. it is sometimes easy to forget. we started the year worrying about tariffs between the u.s. and china. they are still there. they are still hampering growth. there are still impediments for the recovery. here, these things could get worse. we want to see the upside.

also onl decoupling is the table. it's just a hypothetical issue. clearly something to worry about, given the importance of the global financial market that functions well for everybody. lastly, as you pointed to, technology is a potentially very damaging issue for a country like china that is still far away from the technological the best defined as performance globally so that is still a gap, and we need to sort of work on those. not getting there and not having technological tensions become part of the baseline -- kathleen: in a nutshell, that makes sense. everyone can agree with that. is that going to happen? how big of a risk is it that this continues to get worse? everyone can see that those are potential problems, but they don't seem to be going away. helge: if you want to work on there is multilateralism.

i think it is helpful in these circumstances, but the country itself can also do something about it. volatility will be more of an issue going forward because of these problems, then you want to focus on domestic sources of volatility growth and that's why we are pointing to market forces and reforms that can be done fosterlly to productivity in the domestic market. you are our china expert. do you think china is ready to push forward on this or are there obstacles? helge: we are optimists. we are certain that the plan will pick this up, and indeed, there's been confirmations that the reform agenda that exists and that is well-known will be put back on the table and will be sort of rejuvenated. youleen: another risk that mention is the risk of external demand.

yes, china is trying to move towards this dual path and boosting consumption more. yes, that china's services sector is growing. nevertheless, it's a very big exported to many parts of the world. what do you see happening there? the u.s. has not leveled out completely yet. risk to china's growth and asia's growth? helge: it's a global pandemic so some of these risks are simply shared globally and what we would like to see, the second handover in terms of growth support from china and then pandemic oriented exports, the surge we are seeing towards a more novel composition for china and everybody else in the region. however, some of the same risks that are threatening china under the baseline, also exist or other countries, the pandemic

remains an issue that could tamper with the recovery elsewhere and these external tensions we just discussed share issues. they have to keep an eye on this , and continue to support the recovery right now, not being premature and withdrawing the support both fiscally and monetarily. it should be on the agenda of policymakers, not just in china but globally. kathleen: helge berger, thank you so much for joining us. he is the china mission chief at the imf and we hope by the time of the spring meeting, that things are looking a bit better for the world, so back to you. aery: kathleen hays with great conversation. we have breaking news. we want to take you to a press conference by the fbi. they have been saying that the u.s., that iran and russia have attempted to interfere in the election so let's listen in. >> both sides of the aisle.

there is complete unanimity in the u.s. government in our resolve to combat the enemies of freedom. the president has instructed me to keep the public informed as appropriate and you have my commitment that i will continue to do exactly that. with transparency and with candor. foreignnot tolerate interference in our elections, and we will continue to work with our many partners to disrupt and to impose costs and consequences on any adversary that attempts to interfere in our democratic processes. president tof the empower us to put towards election security over these last four years are working. i will now turn it over to my the fbi to address law enforcement's activities.

>> thanks, john. fbi is the primary agency responsible for investigating malicious cyber activity against election infrastructure, malign foreign influence operations, and election related crimes like voter fraud in voter suppression or intimidation, and that's exactly what we have been doing. workingbi, we are closely with our intelligence community partners as well as our other federal, state, and local partners to share information, bolster security, and identify and disrupt any threats. toleratet going to foreign interference in our elections or any criminal activity that threatens tutee of your vote or undermines public confidence in the election. when we see indications of foreign interference or federal election crimes, we are going to aggressively investigate and work with our partners to quickly take appropriate action.

we are also coordinating with the private sector, both technology and social media companies to make sure that their platforms are not used by foreign adversaries to spread disinformation and propaganda. yearse been working for as a community to build resilience in our election infrastructure, and today, that if the structure remains resilient. you should be confident that your vote counts. to thenverified claims contrary should be viewed with a healthy dose of skepticism. seekcourage everyone to election and voting information namelyliable sources, your state election officials, careful, thoughtful, and discerning consumers of information online. and if you suspect criminal activity, we ask that you report that information to your local fbi field office. as always, the men and women of

the fbi remain committed to protecting the american people, our democracy, and the integrity of our elections. we are not going to let our guard down. thank you. shery: you have been listening to christopher wray, who talked about the election infrastructure remaining resilient, that the fbi will not tolerate foreign interference in the elections. we had heard from the director of national intelligence earlier saying iran, russia, those two countries had attempted to interfere in the u.s. elections, this coming 13 days ahead of that vote and also just one day ahead of the last presidential debate between president trump and his rival, joe biden. now, john ratcliffe saying that this is not a partisan issue, that the u.s. has acted swiftly in response to this threat. we will have plenty more ahead on "daybreak asia."

this is bloomberg. ♪

trials bycine astrazeneca and johnson & johnson in the u.s. may resume next week according to the head of the so-called warp speed program. our health care reporter, michelle cortez, is on the line, aree know that these halts pretty common when it comes to these vaccine developments, but this is a crucial point. as we suffer from this global

pandemic, how much of a setback has this been? michelle: the pace with which vaccines have been developed for coronavirus is absolutely unprecedented. the fact that we can get to an answer on whether or not these vaccinations are safe and effective within nine or 10 months of the virus even appearing is astonishing, but as we say, we know that there are setbacks that occur. is in delayt this for two weeks to a month, it's a but in the moment in time, of course, we all want something right away, so any kind of problems, any hurdles, are unwelcome. hear that brazils health minister has announced it will buy sinovac biotech. resident bolsonaro is not happy about this. what is at play over there? michelle: the sign of vaccine is

not -- it has not yet completed its clinical trial process. we have seen this happening in other places, russia, china, where there are some people who are getting the vaccine, not as part of a clinical trial, but just in order to give them some heads dart on getting protection before the trials are available. president bolsonaro does not want to do that in brazil. he wants to make sure that those results are in and that the vaccine is safe and effective before any of the brazilian citizens have access to it or are getting it so there is a battle that is going on right now in brazil. we know what vaccine they are going after. we are not entirely sure when they will be able to get it. haidi: michelle cortez with the latest. don't forget, if you are away from a screen, you can always find in-depth analysis on bloomberg radio. we are broadcasting from our studio in hong kong. you can listen via the app or at bloombergradio.com. we have lots more ahead. this is bloomberg.

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reshaping the u.s. shale industry with of thetions creating two top three operators in the permian basin. pioneer is -- scott sheffield spoke to bloomberg about the deal. about bringing the

best companies together. as you know, their acreage is continuous to pioneers and it's really creating, in my opinion, the only permian powerhouse today. it will be the largest permian independent player. timing is good essentially areuse all prices stabilized around $40. i am still very optimistic about all prices getting back to 50 in the second half of 2021. >> can you give us some insight if you looked at any other companies? scott: we have not. we have only looked at parsley over the last few weeks. it was so easy. it's very creative on all metrics. returning to our shareholder base. it was done at a low premium, 7.9%. good morning. you are still on the call. all the best assets have

basically been taken over the last few weeks. are you done? scott: yes, we are done. it will take several months to bring them in. we are working on a transition team now. we are excited about mike gallagher becoming a director of transaction this closes so we are done. we are excited about the new company, the new powerhouse. >> something else on the call, you said there is only four pioneer,e bmps, eog, maybe hess. what made you say that? there's basically four companies today that are over $10 billion market cap. obviously, two of those just got larger with pioneer and philips buying the company. when you talk to most investors today, they are only looking at

companies that are investing at a $10 billion market cap. the companies below that will have to emerge over time so i still think a lot of those companies have to deliver with higher oil prices before they start combining. i still think we will get down to just a handful of less than 10 independents in the sector over the next several years. >> you think the bigger companies have done what they have got to do and probably will not do anymore? there is not a company that will do a series of roll up's around the region, consolidating some of those smaller businesses. it will be smaller business kind of getting together with smaller business and gradually acquiring scale. i am kind of curious how long that takes. mergersou will see more . companies have to deal ever. instead of taking a bad balance sheet and combining with a bad balance sheet, they will have to deliver over time. theou know, in london,

pre-european majors have changed the investment strategy. i really do not see them acquiring any u.s. companies at this point in time with their movement into alternative energy. exxon and chevron, the key is whether or not chevron will continue to do other mobile type deals. i don't know. factor is the potential change in administration. there will the continuing pressure on exxon and chevron to go the way the european measures are in regard to alternative energy. sheffield scott speaking to alix steel and guy johnson. turn into commodities, oil and gas futures on the latest u.s. inventory data confirms rising supplies as a result of weakening demand. bloomberg su keenan has this for us. what we see when it comes to the latest electronic trading, wti

is dipping below $40. the concerns about the new waves of the virus as well as that, really weighing. oil in the latest session, it plunged 4%. the same amount fell. fears beingorst confirmed. supplies appeared to be searching as covid cases and demand starts to slump. week fore 5th street oil, but the real focus was on gasoline. domestic gasoline supplies were in barrels last week. that's the biggest jump since may. while gas consumption slid to the lowest since last september, there are many that think the situation could get worse. rising supply and lackluster demand could weaken as we get into the traditionally slow

winter months. the delay in stimulus, we know the legal wrangling continues in washington and the rise of worldwide covid cases only makes the outlook a lot murkier. one of the bright spots right now is china. fuel consumption, there are many betting on demand by the end of the year and some oil traders are buying up cargo. are now seeing exxon signaling they may lay off workers. ceo indicating in an email to staff, he claimed to lay off an unspecified number of employees as low oil prices force the company to delay a lot of projects. was thatof the email there are difficult times and they will be making some very tough decisions. back to you. shery: su keenan with the latest on oil. we have the market opens

in seoul and tokyo, coming up. this is bloomberg. ♪

>> welcome today break asia. haidi: the markets have just open. top stories. asian markets uncertain. jack ma near to the biggest ipo.

it is set to press on october 27. prime minister will lift the state of emergency if protests remain peaceful. japan and south korea coming online. let's get to the action with sophie. sophie: down day. ant group in gauging in investor demand. the nikkei and the topix this morning. accusing russia and iran of attempted interference in the u.s. election. a one month low. watching stimulus from japan.

extra supported is required. unless have upgraded profit targets for japan inc. lg display checking in on the index, losses, lower this morning, but gaining ground on its profit outlook. lgo a lift to suppliers like kim. retreat, buton the asia's best performing currency in october. , the turn to australia index under pressure, even as yields are picking up following news and treasuries with the 10 year yield tracking 80 basis

points. the 10 year yield holding steady at the start of cash trade. stocks in sydney under pressure. wti below $40. spot retreating. the copper rally has stalled ther futures top 7000 for first time in two years. look at the markets. off with oneart week until the november 3 vote, how much volatility is being given positive growth stories taking hold. hi, good morning.

markets will range trade. coronavirusblem is numbers and more extensive lock tales -- lockdowns globally. that is a key driver for markets. china's numbers are looking better. i think the keyword is there is still risk in opening up. remaining risks from covid. it remains key. i don't think the markets are expecting too much big picture change out of the election. i think it is probably positive that if joe biden wins that there could be a reduction in fewerainty because of the

swings in rhetoric. are -- haidi: were looking at emerging-market equities, rising the fastest when you look at m compared to the world. at the rise in earningsere the picture is looking more positive. is that a good way to hedge u.s. political risks? >> we don't think the u.s. markets are overvalued. asia is ant in certain percent to fair value. look at it that way. when you talk about hedging, china has done

,articularly well, tech names consumer names. have olderou still economy stocks on the index. the s&p 500 is slightly over the so there isiod, still upside for asia, but i would not say em will see the greatest rebound. i think it will be selected on a sector basis. about those talk sectors. under $40. ,his function on the bloomberg it shows the energy sector performance lagging this year. seewe find value as we pressure from oil prices continuing to plummet?

>> yes. the energy sector is one of the picks we have. year lackluster going into next year. $20 ist think sustainable with the supply-demand balance. toe looking for brent to go $60 as the global market recovers and opens from lockdown. that is the base case. because of that, it the energy sector holds a lot of value for investors over the next 12 months. one of our preferred stock picks , here in asia, and in particular with competitive cost advantages. we could face more u.s.-china tensions, right?" so how do you protect yourself

from being exposed, especially when the u.s.-china tensions are being played out in the tech sector with the likes of huawei? think the long-term picture will change so much in terms of the restrictions the certainl impose on chinese entities. you may see a targeted approach, return to tariffs under biden. that may help slightly in terms ispredictability, but there an element of the trade that will continue. we think what the market has been doing is favoring domestic-centric players, and probably the consumer sector, rather than the industrial are

high-value-added sectors, so it will be possible for stocks like tencent. we do have estimated clear value for that company on the high-end expectations at $316 billion. those of the types of names were looking to favor, and the consumer centric names as well. >> great to have you on. thought -- stock. 3%, after they announced they will be halting a majority of flights linking internationally from multiple airports in japan, according to domestic media, the airline consolidating the routes. ana now falling more than 3%.

group hasd, ant cleared another hurdle, winning approval for its shanghai listing. it is now gauging investor demand. plus, the u.s. curbs six more chinese publications in the latest tit for tat. china says it will retaliate. this is bloomberg. ♪

>> you are watching "daybreak: asia." forrnor brainard calling fiscal stimulus, saying it is the biggest threat to the u.s. outlook. book shows the economy growing, but in an

uneven way. meanwhile, u.s. trials of coronavirus vaccines may resume next week, according to the head of the warp speed program. elsewhere, spain is the first nation in western europe to record one million covid cases. olympic officials in tokyo have shown plans to protect visitors. screening measures at convention center will host media that the game, but there is an innovative sticker for the risk that measures body temperature. they said any athlete testing positive will be excluded from the games. the u.s. has approved a $1 billion arms sales to taiwan. the state department said the

plans are in its interest as taiwan seeks to maintain a credible defensive capability. about taiwan,rned which it regards as part of greater china. global news 24 hours a day on air and on bloomberg quicktake by bloomberg powered by more than 2700 journalists and analysts in more than 120 countries. this bloomberg. u.s. officials warning iran and russia are trying to interfere in the presidential election. our senior editor joins us now. we are only 13 days away from the election. what did the director of the fbi and national intelligence have to say? iran andad learned russia obtain voter registration information, had been using that

to target voters with this dis information. there was allegations that emails generated by iran were meant to intimidate trump opponents in the u.s.. they did not give a lot of details on what the interference was. we have known for some time that russia has engaged in election and interference. specific on that, but it is unclear what the voter registration information was they obtained. u.s., it is compiled by private companies and sold for marketing purposes. suggestion they had breached any system, but the fbi

at --or said that i ran iran had damage president trump's reelection effort, and russia was known to damage biden's efforts. to assure thed public the voting system was intact and had integrity and that people should not be worried about unverified claims that their vote won't be counted or it will be a fraudulent verdict. questions.t take any there why the cp more detail that comes out -- there will obviously be more detail it comes out. >> this coming on the people of the final presidential debate. behow much will this issue

given the domestic concerns the president has?\ >> the president has been stoking election integrity, tried to divert attention from russia's actions in 2016 saying iran and china are aiming to so ibiden in the election, expect to hear from the , if not theout that campaigndebate, his rallies over the coming days. >> our senior congress editor in washington. unprecedented amounts of government aid that alan greenspan sees a correlation between it and gross

domestic investment. he spoke with bloomberg. is creating a major element of uncertainty, and so we have to deal with it. forecasting it is very precarious. all we can forecast is that ultimately it will disappear. , ands over the generations i say generations, because this type of problem has confronted , and they arey always a little bit different, behind that is a more fundamental issue, which is , the agingake hold of the population. numbers around that

if you can? what is that telling you? >> first of all, i have a series of data. population is aging is very obvious from all the data available, both the united states and from the rest has a world, because it fantastically important impact on economic behavior, and the wason is essentially that the population is aging, ,omething fundamental happens people start to retire. until theyt retire basically can no longer function. historically,

people worked until they died. , the issuef pensions of various different social security did not exist in those days. finding now is that it has been a very significant expansion, specifically in social security benefits. that, in turn, is creating a major decline, or slowing in the domesticrowth in gross savings. >> explained how that works. spending more money on old people doesn't sound people. they spend that money. the money has to come from somewhere. where is it coming from? of,t is basically the issue

when we are dealing with gross fundamentallygs, coming out of the private sector, we are finding, with the data show, actually, is that when you get a significant increase in social benefits, they crowd out the current demand, the current supply, i should say, that gross domestic savings. if you curtail gross domestic savings, you will also curtail gross domestic investment, which is key to economic growth, because fundamentally, it all of the economic activity in the capital goods markets. so fine am very much concerned

about this. i don't know how we are to get out of it. >> that is alan greenspan speaking exclusively with david westin. more ahead. this is bloomberg. ♪

designated six chinese publications in the latest move over media outlets between the two nations. beijing will retaliate to the move. our china government reporter is on the line. waslast time we saw this february, when beijing kicked out that dozen journalist. what are the implications this time around? more designated by the u.s.

the last time, there were more than a dozen expelled from china bracingult, so we are for retaliation, and they have said there will be retaliation, and that this could extend to the operation of media in hong kong, a new twist in the story. we have to wait for the official response, because the global , but does not represent it hopefully we will have more clarity as the day goes on, this afternoon, china. >> may be some of the issues might come down to the election. that is not likely to get any kind of easing, right? .> correct it has become highly politicized

, and will be so pass the , because theobably industry is so important that the u.s. and china, even other countries, although the global is concentrated, so everyone wants to build their own industry, so there is tension between the u.s. and china in particular. >> our china government reporter with the latest. let's get you the latest headlines. beijing morning sweden that it's been that hurt the prospects of local businesses in china, coming after they blocked local operators from using huawei. beijing says it is cracking down without evidence. crownw chairman of

resorts has apologized, saying it will bring significant reforms to restore confidence in the company. she told the crown that there will be improved management structures and the focus to address money laundering. isakson -- a home sharing startup plans to go public later helpyear and says he will develop airbnb's design team. first is one of the companies to say they are collaborating with him. ipo,g up, a massive dual winning approval for its shanghai listing, now gauging investor demand. that will be october 27 with the latest. this is bloomberg. ♪ - i'm dough hirsch.

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all from the comfort of your own home. visits are confidential and affordable. need a prescription? your doctor can send it to your pharmacy or have it mailed to you. get the healthcare you deserve at goodrx.com. >> this "daybreak: asia." talks in washington, nancy pelosi and stephen mnuchin said to have made progress. out are closer to putting draft legislation. they will talk again thursday. they said the white house is aiming for an accord and the next 48 hours. the first boat naming amy coney barrett to the court will take place. republicans hold a 12-10 majority on the panel.

gop leaders aim to confirm in a full senate vote monday, despite democrats sing the process is rushed. the trump administration is ramping up tensions with china, designating six mainland media outlets as foreign missions. they include the economic daily and five other less known publications. the state department says all six were substantially owned or effectively controlled by a foreign government. backtrackedernment and has agreed to resume brexit talks. downing street was reported to be willing to talk. the new deal deadline is mid november. boris johnson terminated negotiations last week. the two sides are set for talks to resume. the u.k. still wants more compromise from brussels. global news 24 hours a day on air and on bloomberg quicktake by bloomberg powered by more

than 2700 journalists and analysts in more than 120 countries. haidi: let's look at how we are trading. sophie kamaruddin is in hong kong. continues to be a choppy week. health care among the biggest drags. we're seeing the biggest drop in three weeks, with banks under pressure and energy sliding has oil slips lower. let's check u.s. futures. under pressure, losses accelerating, falling to the lowest level in two weeks. we are seeing treasuries reachingy higher after a key level overnight. check the dollar recovery,

after falling. the korean won on the back foot after the high yesterday. below 71. dollar back the offshore yuan losing ground after adding 1% over the last four days. dollar staying morenged, as we see intervention from the hong kong monetary authority, this as ant group will gauge investor demand for a share sale here in the city. the green light from china security watchdog for its ipo and shanghai, heading towards what could be the biggest share sale ever seen. trackitor continues to

--se in criminal steps that these steps in the listing. >> that is right. moreroup will issue know than 5.5% of shares after the ipo,or the china leg of and the same amount of shares for hong kong, considering the green shoot included. ant will issue no more than 6.2 2%. even the trump administration people within the trump administration are exploring the possibility of a ban on the company. the company is moving ahead with its ipo and investor interest is strong. what does this mean for valuations, and is this the biggest ipo? >> the company could raise $35

billion in the dual listing, and $280uld reach at least billion. haidi: in terms of the growth trajectory, it is between getting in on a high-quality ipo , and looking at whether you can make money, because the demand, margin financing in hong kong right now is enormous. >> yeah, that's right. some brokerages are offering 20 times margin financing in hong kong. --re is a retail friend safe frenzy. if you look at the china sale, drivingntentionally

more institutional investors to its ipo. in hong kong, it has decided to leave out cornerstone investors, anduse of the share sale, that means there is only a limited slot for people to subscribe, and that is why margin financing is increasing and people are just trying to win allotment for the shares. haidi: thank you. , the latest on anti-government protests in thailand. the prime minister says he will lift the state of emergency if protests remain peaceful. we will have the latest from bangkok. this is bloomberg. ♪

haidi: the imf said the asia-pacific will see output below level in the medium-term, even as china leads the recovery. person for an assessment. andover -- hand over to private support, the assumption is it is not where you can

withdraw support and stop worrying about growth. plenumchina's fourth meets to hammer out the next five years, what would you like to see? the move fromned public support to private sector support. debt on the putting back burner and every country. private support, what do they need to put on the table to keep china's recovery going? >> this is a short-term and long-term question. the short-term, you mentioned public debt higher, we would like to see fiscal policy that focuses on targeted problems, ands vulnerable households facilitate that handover we would like to see to make the recovery more sustainable.

reforms the longer term, in china, markets can play a larger role in the recovery going forward, so you want to see the long-standing reform agendas to be implemented, reinforced going forward, all of this will help productivity and anchor growth. >> ok. inone of the biggest risks your latest report out today is rising u.s. china tensions of all kinds, all technology, trade, you name it, and every day we get something from the u.s. and china fires back, etc. china?is this affecting is this a risk to them? can they keep these battles going with the u.s. and not be hit by it, too? risksre are a couple of

to the recovery scenario. there is the handoff, i debt,ned, also corporate at is part of the risk matrix. timelines.ifferent trade tensions are still with us . it is sometimes easy to forget, but we started the year worrying about tariffs, and they are still there hampering growth, and still an impediment to recovery. here, these things could get worse. we want to see tariffs coming down. financial decoupling is also on hypothetical,t a but clearly something to worry

about given the global market. is ay, technology potentially very damaging issue for a country like china that is defined as the best performer globally, so that is the cap that we need to work -- gap that we need to work on. , protestsbangkok now continued wednesday despite as state of emergency. will liftminister restrictions if demonstrations remain peaceful. our reporter is in bangkok. what prompted the prime minister's olive branch? >> the prime minister said he wanted to make the first move to de-escalate the protest movement , to offer a goodwill gesture to the pressers -- protesters.

we have seen the protests increasing with gatherings and bangkok. the prime minister said he will lift the state of emergency if protests remain people. he suggests the government and protesters take a step back and try to find solutions to the problems and asked they trust in the process to address their grievances. how did the protesters react to that? >> endearing the televised speech last night, thousands of protesters submitted a resignation letter for him to sign. they broke through several police eric tates, -- barricades, but mostly peaceful. the office had accepted the letter from the demonstrators,

taking arotesters said step back like the prime minister suggested meant he needed to resign in the detained protesters, they gave him a three-day deadline and threatened to return in three days. haidi: what are we expecting in the next few days, some sort of escwa -- de-escalation? >> the key demands are his resignation, the rewriting of the constitution, and monarchy reform. they have not made any compromise on those demands. the government role is to protect the monarchy, so we will not see any monarchy reform. political analyst view the parliamentary process to rewrite the constitution will not result in the changes protesters want to see. the prime minister said he won't resign.

met,less these demands are we are likely to see this movement continue to escalate. our reporter in bangkok for joining us with the latest ongoing protest. coming up, we speak with ripple about its plans from a possibly relocating to japan. this is bloomberg. ♪

haidi: a quick check of the business flash airlines. has that nippon airlines scratched the majority of international flights. it has seen a loss of $5 billion this year. it will prioritize domestic services and smaller planes. service iseo shutting down. in april.ppeared it did not attract enough viewers, despite $2 billion to launch the project. the race towon attract elliott management group , moving its headquarters from midtown manhattan to west palm beach, joining a growing list of those heading to the sunshine state. florida has no income stated

taxes or estate duties. bitcoins searched -- s urged. a u.s. blockchain company is looking to pull out of the company, saying unclear rules will undermine fintech growth. joining us now is the ceo of ripple. great to have you on. thank you for joining us. in thistart with paypal huge jump in cryptocurrencies. how much is due to the broader global pandemic and the huge changes in spending patterns? >> it is clear the pandemic has put a tail wind behind the crypto market. when you print a lot of additional fiat currency, that is inflationary on some level,

so you have seen the crypto market overall increase by 90% this year. gold has performed really well. , thatve away from cash also helps. things like what paypal are doing is indicative of a macro trend that will continue. argue expecting more transactions from merchants, rather than exchanges and speculation? critical point. if it is just speculation, just trading, it is not solving the problem. of anyg-term value cryptocurrency is what utility it is delivering. some markets, the fiat currency is not as strong as the dollar, the yen, or the euro, but you might see cryptocurrencies used for traditional transactions.

it is still early and most g20 major markets, but you saw crypto isthe inroads making progress. regulatorye is the oversight at the moment? you as regulators -- u.s. regulators have been talking to ripple. can you give us some indication of what questions were asked? japan,see countries like the u.k., and singapore have clear dynamics as it relates to cryptocurrencies, helping companies know how to invest and build their company. in the u.s., you have competing regulatory environments, some saying a commodity, some say the currency, others say a property, and other say cryptocurrencies or just securities. that makes it hard.

ripple is definitely a proud u.s. company, and we would like to stay in the u.s., but we need regulatory clarity to invest and grow the business. shery: have you had these conversations, and is it likely you will get the green light, or are the conversations ongoing? >> ripple has been talking to regulators around the world for years, here in the u.s. as well. we seek a level playing field. you have two technologies chinese mining companies, and we have not seen a level playing field the way the japanese government and the u.k. has, of the u.s. is out of sync, because you have different pockets of regulation from different parts of the government. getting that options

to move to a different jurisdiction would be on the table. making serious about japan the new home for ripple? >> japan has been one of our strongest markets. they are our largest outside investor. the ceo has been an innovator and pioneer around finance, technology, and fintech. of the markets because there is clarity. japan was on the leading edge in 2017 to help regulators how they were going to look at different cryptocurrencies. haidi: have you started talking to the financial services agency in japan? >> i'm not prepared to talk about the different conversations, but japan is one of the countries where we think ,here is clarity, specificity and article from the start has

not been to circumvent regulation, but not a guessing game without knowing how regulation will play out, and that is what we are seeing in the u.s. haidi: some investors feel like , givingthe lions share you the opportunity for market manipulation. any chance you might change how the company funds that and holds your reserve coins? we put over 90% of the xrp into escrow accounts that ripple bones that we can access. access --hat we can owns that we can access. we -- can't access.

we want to see it deliver a lot of utility. to solve ahat xrp payments problem. we have been successful with that. we have customers using xrp to manage real-time, cross-border payments. shery: what would change the way you fund the company in that case? >> we have a mixture of revenue from software sales, transaction revenue. a piece, but we do not sell it through program granik -- programmatic trading. isdi: how much deployment happening for mainstream financial institutions in the adoption of ripple? >> we have been super lucky. during the quarantine we signed contracts,production

so that has continued to grow nicely. we have done $7 billion worth of transactions recently, so we feel like we will see a lot of growth, even relative to last year. about 400 to be up five under percent on the year on year basis compared to -- 400% to 500% on eight year on year basis. they are not offering xrp. ripple is a private company. is an open source, decentralized technology. paypal plans to go live with ofcoin and ether, and part that goes back to regulatory clarity. if you are building upon a , if there iske xrp

not regulatory clarity, you will go with the ones that are clear, not just paypal, but others in the market who say i will start with bitcoin and either because they have the seal of approval in the united states. japan,r countries like ucr broader base -- you see a broader base and the opportunity for success in that market. your timeappreciate with us today. will hear about how asia is making progress in stimulus talks. friday, the imf acting director joining us. that is it for "daybreak: asia." market coverage continues. we look to the start of trading in hong kong, shanghai, and

shenzhen. stay with us. the china open is next. this is bloomberg. ♪ are you frustrated with your weight and health?

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