>> good morning and welcome to "daybreak: australia." we are accounting down to asia's major market open. shery: good evening. haidi: top stories this hour. president biden indicates a new era in relationships with china. beijing publishes new rules on

monopolies. triggering legal action by by -- against tencent. 28 asx companies reporting this week. let's get a check on what is going on with the markets. >> markets in new zealand are closed this monday. asian stocks -- the index capped the best week since early november. there is the potential for tighter policy across asia. oil prices heading towards $50 a barrel. on the calendar, want to highlight japanese trade. we are keeping an eye on chip

stocks as well as japan's company is in talks to purchase a chip designer. also, in the forex space, aussie dollar is under pressure. the currency is expected to be 76 at the end of this quarter. the yen trading firm or this morning after the u.s. dollar capped its biggest drop following the u.s. jobs reports on friday. that could be enough to stop the dollar recovery. shery: our top story -- president biden making a louder case for a big relief package. u.s. job numbers disappointed. this comes as more economists raise questions about

overheating risks and a stock market bubble. let's get the details from washington. we heard a similar tone coming from the treasury secretary, janet yellen, as well. roz: we definitely did. we heard from janet yellen twice today. we know her well from being the federal chair. -- federal reserve chair. she really laid out two scenarios. the u.s. could get back to full employment next year. and that there could be a long drawn out recovery. she was around during 2008, 2009 , the recession and saw how long it took to recover from that. she is wary of that worried the stock market is slowing down.

this is not persuading a lot of republican lawmakers who still feel the biden plan is too big. $1.9 trillion. there is tension now between the yellen camp and the biden camp and people like larry summers that typically would be in line with janet yellen. she says as treasury secretary now she has to deal with the entire company and the long-term fallout of job losses. she talked about job losses specifically among minorities and women which are very sticky right now. paul: is a compromise dead now? >> it seems like it never got up

off the ground. democrats just want to go with the more aggressive plan. and put the assurance into the economy with the $1.9 trillion. biden did meet with the republicans. trying to get them on board for some sort of compromise measure. whether that is the final word is hard to say that listening to republican lawmakers in the last few days and again today, they want things to be more targeted. if there are stimulus checks, they want the cut off to be at the lower level. this is something the democrats oppose. we will hear more in the next few weeks but it does seem like bipaship is a struggl

this piece of legislation. paul: ros from washington. during his first tv interview, president biden said there will be extreme competition but not conflict with china. the highest level of communication between the countries since biden took office was a phone call between the secretary of state and his chinese counterpart on friday. stephen engle joins us now. what more do we know? >> during that conversation on friday, some sparks flew because anthony lincoln -- antony blin ken pushed his counterpart on human rights. that did not sit well with the chinese.

that being said, joe biden has counterpart. joe biden has been in the white house now for about two and a half weeks going on three and he has spoken to a number of world leaders including vladimir putin of russia. he has not spoken to what he is calling the biggest strategic competitor on the planet. he says -- we have not had occasion to talk yet. there is no reason not to call him. more of this interview will be broadcast during halftime of the super bowl today. he said we need not have a conflict but there will be extreme competition. we are going to focus on the international rule of the road. when he talked about the differences on human rights and democracy, joe biden went on to say -- a bit of a jab -- the chinese president does not have

a democratic, small d, bone in his body. shery: what do they say about the monopoly? stephen: we have draft antimonopoly laws that came out in november and then we got a sudden scrapping of the ant ipo. we now -- last week, i reported on bytedance suing tencent as a monopolistic behavior by allegedly blocking the domestic equivalent to tiktok from the qq and tencent platforms. they filed a lawsuit under these antimonopoly rules that of just been made official. these were just the opening salvos. and antimonopoly watchdog firm

of these rules and they took effect today. now, these are official. the new roles curb behavior in three ways. they will curb the sharing of sensitive consumer data. they will prohibit forming alliances that squeeze out smaller rivals. and they will prohibit subsidizing low cost services to eliminate competitors. the poster child of this regulation is alibaba. we will have to see how this plays out for these companies. ant, we know, is already being put into a holding company that will be overseen by the pboc. shery: and the stock reaction in hong kong is another thing we will be watching. let's head over to karina mitchell. >> new data from the u.k. said jess a collapse in january.

the association says the volume of goods destined for the single market fell by 60% in the first -- 68% in the first month after brexit. eeo trucks are increasingly empty because truckers do not want to be trapped in new red tape. iran says it is willing to return to nuclear negotiations but only if the u.s. is sanctioned first. iran will only comply once it has verified that international penalties have been removed. this may meet fierce pushback from washington. myanmar -- people demand the release of civilian leaders. the army shut down the internet. several towns have thousands of people in the streets.

these are the biggest protest since 2007. at least 100 workers at a hydropower plant are still missing after a glacier collapsed causing flash floods. the plant and the dam were damaged in the incident and the army has moved into run search and rescue operations. 12 workers have been freed but dozens more are unaccounted for and are likely trapped in tunnels at the plant site. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. paul: still to come,, sanders morris harris says retail traders will determine which stocks perform best. the chairman, george ball joins us next. and showing significantly down in corporate profits. we will discuss this with rbc

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>> the labor market we are seeing is stagnating. >> i would call it disappointing and puzzling. >> it was softer than expected. >> this is good for those that want a big fiscal support. >> the stimulus we need depends on the pace of vaccination. >> markets are looking through to herd immunity. >> everything else will fall into place. >> the faster we get immunity, the faster we get back to pre-pandemic life and the faster the economy will be able to heal. shery: we also had january u.s.

unemployment reports falling short of estimates. this as washington debates the merits of president biden's relief bill. the chairman of investment firm, sanders morris harris joins us from houston. george, great to have you with us. how much has -- how much of the stimulus package has markets already set up for? george: i don't think the stimulus package is going to be a disappointment to the market. almost no matter what. the republican proposal which was, i think, a bit of a stalking horse, will come of the market thinks, cause the $1.9 trillion biden proposal to end up around $1.4 billion or $1.5

billion with fewer people getting $1400 checks then originally planned. that will not disappoint the market. there is momentum in the market and as of now, as long as a vaccine rollout improves, continues to improve as it should, and if the stimulus package is around $1.5 trillion, the direction of the next few months is likely to be upward as it has been for the last few months. shery: with the fiscal tap remaining open, we are seeing oldish retail investors, -- bullish retail investors, as we get more margin debt on the sidelines.

george: there is a real risk, although probably not in the immediate future, for the next months or two or three, the presence of the enlarged segment that is retail trading, gamestop trading, reddit trading is a huge force in the market that we have not seen for several years. retail trading was 5% of the overall volume. today, it is 25% or more. that is a gigantic delta, a gigantic influence at the margin. and for the time being, that is going to be a huge upward propellant on the market. as you suggest, usually those forms of somewhat uninformed speculation and up badly.

this one will too, although not quite yet. paul: you clearly identify the risk factor from the retail trading influence and we saw a profound example of that with what has happened with aim stop. gamestop falling 80% last week. do fundamentals always win in the end though? george: like father time, the fundamentals always win in the end. no question about that. as a semi-related short-term phenomenon, if you look at stocks in the u.s. trading for less than a dollar a share, literally pennies stocks, they are up 30%-40% in total in just the last month. the retail speculator is looking for the cheapest, the most trendy, the most chat worthy

type of stock. that has caused margin debt imbalances. they have been spiking upward very rapidly. in the past, and i think this time also. that is a red flag that portends badly for the markets as we get further into 2021. it is a definite warning sign. and time after time, in 2007, in 1999, when we had major selloffs, -- paul: george ball, thank you for joining us. chairman of sanders morris harris. our exclusive interview with the ceo of coach in china. they are bullish for the outlook

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shery: cure's a quick check of the latest headlines. softbank aims to raise more than $600 million through two new companies. spacs have become a popular way. more than $35 billion has been raised by spac this year alone. softbank will focus on technology companies including artificial intelligence. stepping up -- offering a new deal that would value the company at more than $13 billion. it says it is exasperated. the bid covers 70% of what is

already owned. in the latest twist in this saga. the government of mongolia is asking rio tinto if it is prepared to mutually terminate plans to expand a copper mine in the gobi desert. it says rio tinto has told the minister it is ready to explore a reduction of the project. a private equity firm is seeing -- sources say it is based on its track record. it has also been profiting from

its market in asia. paul: an economic rebound in china helped the coach parent. speaking exclusively to bloomberg, coach china ceo yann bozec says the company is aggressively ramping up its digital presence. yann: as you are seeing, our business in china has grown by more than 30%. despite the fact that there were still very strong regulations. we still [indiscernible] -- at the end, we focus on --.

we are very optimistic about what is happening in q3. we are having a very strong digital interaction with our customer. we are looking at our e-commerce plans. we are very optimistic about continuing to see our e-commerce ratchet up in an extremely strong way. >> you have about 300 stores in the chinese market. are you looking to expand that store footprint this year? yann: we are confident about the future of china. the middle class -- we believe [indiscernible]

what we are looking at in detail is we know a lot of our business comes from tier 3 cities. we will see where the customer is. paul: are you looking to expand your digital presence this year? yann: we are very ambitious about our digital and e-commerce strategy. we are not afraid to be one of the first brands trying new platforms. we had a store for quite a while. we are the first brand in this category. we will continue to look. we believe social media and social e-commerce are something that are very promising.

>> would there be a material impact on the business if tariffs were cut? yann: we are listening to the conversations. there is a new administration. in washington. we will be very mindful about seeing what can happen. we are really focused on the business. what we hope for today is the strength of our brand. what has made a successful -- what has made us successful is our transformation. the enclosed to the customer and listening to them. making sure that we are where they want. and with the right product. we will continue to engage

digitally in a very strong way. we are trying to be as agile as possible. ♪

karina: you are watching "daybreak: australia." i am karina mitchell. janet yellen seeing full employment next year with a strong stimulus package. however, she fears the labor market is stalling and said more action is required. he stresses the board is still needed. christine lagarde says it may be hard to wean the market. meanwhile, president biden is indicating a new era in relations with china.

the two superpowers are in extreme competition but not conflict. speaking to cbs, the president says there is no reason why he has yet to speak to xi jinping but says there has not been time yet. he added he will deal with beijing differently than his predecessor while sticking to international roles. and china has published official rules on internet monopolies aim to curb the sharing of sensitive data, the formation of alliances that squeeze smaller rivals, and question competition. the increased scrutiny has already triggered legal action with alleged monopolies and wechat. world health organization scientists say they have uncovered important clues about the origin of the coronavirus pandemic after a trip to wuhan, or the outbreak was first reported. the report is to be released this week after it spread

explosively from the city. one expert says the who trip may be the turning point. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. paul? paul: thanks, karina. australia is likely to see a rebound in corporate profits with ongoing strength and optimism over vaccines. we are joined now by our guest. the plan is aligning at least for earnings season here in australia, and you say it is looking pretty good, but what do you need to see to justify some of the evaluations that we have got right now? >> good morning. yes. that would be the very difficult part for the australia reporting. we have seen decent rallies and

a lot of the share prices, especially in some of the e-commerce names, and i think that it may prove to be a little but of a reality check, unfortunately. i think earnings will be good, but i think there has been a dislocation between share prices and valuation, which may be the reality check for the market. >> well, we have got an environment of really low rates and australia. house prices are rebounding strongly, and one of the big announcements is to come by by far the largest listed company on the asx. what are you expected -- expecting? >> the cba touches a broad part of the economy, including consumer credit card businesses, so it will be interesting to see how the economy and australia is going. i think will be taken as a very positive signal. there is the potential for

special dividends. it would be very powerful. shery: of course, helping the earnings season in australia is the amount of tease. they were showing a surge alongside the approval, and now they are at multi-year highs. given that this sector was one of the worst-performing last year, what can we expect now, and we also have a slightly stronger u.s. dollar? karen: the u.s. dollar may be a problem, depending on management and costs, but otherwise, the bounce in commodities is going to be very helpful, especially for dividend payouts, and also with the ongoing yield flow as they see opportunities. shery: let's talk a little bit about the other side of the coin. the aussie dollar rallying as well in the past year. what would that mean for those companies that really have so

much business overseas? karen: yes, that is going to be a problem. depending on which currency reporting, so that could be something to watch for as well, just the result in the balance sheet. shery: and how will all of that really filter into the m&a space? karen: i think m&a is going to be key. we just mentioned we had extremely low rates, and the rba has recently talked about it for a long time. i think corporate sick going to be looking for m&a, and -- i think corporate's are going to be looking for m&a. looking to take advantage of such low rates. paul: the rba is signaling it is not planning to move in the future, or the government, on the other hand.

what kind of expectation is there around biden? karen: well, that could be problematic for some sectors. i think if you look at, for example, the travel sector, it could create some volatility, because it creates elements of uncertainty. the economy is broadly doing ok, but it will be a very telling sign to see what happens. the stimulus could be an offset, but, yes, it is going to be something that markets will be watching closely, and like i mentioned, in some sectors, it will be problematic. paul: karen, you were talking about some of the iron ore minors. there is concern going forward about the role of coal in a low carbon economy, and china, as well, not taking some australian coal shipments.

karen: it has become an increasingly large issue for the coal miners. so i think we are going to see that being ongoing as we go forward. there will be a bigger and bigger focus. shery: karen, thank you. one of silicon valley's famous venture capitalists putting the blame squarely on robinhood for the trading frenzy, saying the platform is glorifying speculation. he spoke to "bloomberg technology." >> what is interesting is there were big hits taken by companies. they took write-downs in a market that is predominantly hot. the other super interesting

thing is it has uncovered that it is viewed as a problem in the plumbing. i think there are lots and lots of problems in the plumbing that fester for years and create the dynamics that allow something like this to happen. the key question -- emily: so let's talk about the problem in the plumbing and start with robinhood. i know you said their business model is built on a bizarre reality. where do you think robinhood is getting it wrong? bill: their whole business model from the beginning was to tell the user that something was free and then to make money somewhere else. that somewhere else in this case is what is known as payment for order flow, and so the practice of payment for order flow is illegal in a few are other

developed countries, u.k., canada, india, and australia, and for reason. it creates massive and enormous conflicts of interest, and what happens is when you put an order into robinhood, they do not put it on the exchange, the nasdaq or the nyse. they sell that order to six different companies that they work with who are really their customers. that is who pays them revenue. there are several. all of that is disclosed. you can find it on twitter, on the internet. and those people are even, in addition to kind of may you know choosing how they went to fill it, they are allowed to front run the trade in their own account, and, one, i think it is misleading to the user to say something is free when you are probably -- those companies are not paying for the water flow for no reason, right? you have to ask, why are they paying for

it? well, they are monetizing it. and that has to do with giving you bad execution or front running, which has a market moving away from you, and you imagine you get a whole bunch of people buying out of the money call options, and then you get the broker that is clearing those trades, front running them, and you're going to create massive volatility, like we saw. emily: so in that case, what should robinhood do differently? or what should the sec be doing about it? bill: it is now known that 64% of the revenue comes from options trading, and so the company would like you to believe and goes on public television and claims that their mission is to mock were ties investing -- is to democratize investing. there is no book from warren buffett or peter lynch or bert

mikael that says, hey, the way to invest for the long-term is to trade options. no one is saying that. they would all dispute that. so what robinhood is really doing, i think, is kind of glorifying speculation. they are not democratizing investment. paul: that is benchmark capital partner bill gurley speaking with our calling. coming up next, new coronavirus cases in the u.s. shows signs of slowing, and further surges. this is bloomberg. ♪

paul: time now for the morning call with sophie kamaruddin in hong kong. so, sophie, what is the read? sophie: paul, the drop in the china reserves is bigger than the broader market expectation. they are sticking to the view for significant pressures this year on rate differentials, but capital inflows from the program are continue with the pboc gradually exiting its easing. 6.3 by midyear and 6.0 by year end. shery: talking about china,

course, is very important, and, of course, iron ore has been under significant pressure. we are talking about their worst in 10 months of weekly losses. what is the story there? sophie: there could be even more volatility hanging in the global balance, seeing prices in a larger range. $100 to $200 could be that trading range for the iron ore, and nonetheless, citi has raised estimates, possibly rebounding to 170, 110 year. shery? shery: with a global pandemic, virus infections in the u.s. continue to slow, but there is a warning of a more transmissible

variant first found in the u.k. likely to become the dominant strain. still, president biden says he wants to see schools reopen but only if they see a meat certain requirements. president biden: i think it is time for schools to reopen safely, safely. you have to have systems that have been reworked. our cdc commissioner is going to be coming out with science-based judgment within, i think, as early as wednesday as to what the minimal requirements are. shery: we even had the governor of ohio now saying that his state is on the road back. how encouraging are the latest numbers? >> well, there is no question about the latest numbers, particularly cases and hospitalizations. the number of cases were basically daily cases are half of what they were a month ago. there is what is considered a

lagging indicator, and that still remains high. if you take new york, 5, 10, 15 deaths, now about 150, 160 a day. so the change is real. there is the race between the variants and the vaccine. paul: a another study -- another study says the more transmissible variant is expected to become the dominant strain by march. >> well, it certainly could. it is more transmissible. that means more cases, more people in the hospital. it is not necessarily more deadly itself, but the question of can you get enough vaccine out there to provide some immunity to the u.k. virus,

these are the vaccines in the market right now that are effective against the u.k. variant. and so, like i said, that is the real question. it is a bit of a race between the spread of the variant and the ability of vaccines to do their work, and, of course, for public health officials and politicians to keep up with the messaging and masking, social distancing, other measures to control the virus. shery: and it seems we are getting a little more information on which vaccines are effective for which variants. one is not as effective as the counterpart, johnson & johnson. >> correct. well, all of the vaccines show some reduced efficacy against the variant, the one from south africa, to begin with, but for astrazeneca, south africa suspended today using

astrazeneca's, saying it would go with johnson & johnson, which showed a little bit more efficacy. astrazeneca says it is aware of this, and they are working on a booster or a supplemental vaccine that will be available by the autumn. but, you know, the numbers are a little bit shaky. the studies were quite small. still, everyone agrees that the vaccines are not as good on the south african variant. we have seen it in three states in the u.s. so far. paul, all right, ian. the world's largest independent oil -- says markets are getting ahead of themselves. this is bloomberg. ♪

shery: and here is a quick check of the latest business flash headlines. taiwan is punishing foreign lenders after they got into local dollar speculation. the bank is banned in working in fx derivatives, others facing a

penalty. the speculation was on trading. ups is set to be increasing the bonus pool for investors after a surge in trading revenue help the company reported its highest profit in five years. we are told staff will see significant levels of compensation from region to region when ups publishes its plans next month. the bank paid out 2.7 billion dollars in variable compensation in 2019. rolls-royce is planning to shut operations at its airspace unit for two weeks in the coming months as coronavirus batters commercial aviation. the company says the plan will affect 19,000 workers, two thirds of them in the u.k. the u.k. is going to have losses over the whole year rather than in the single two-week shutdown

period. more than 80% of sales to be driven by electricity by the end of this decade, with a ceo saying that the cars will include fully electric and hybrid variants, although porsche will continue to offer the iconic 911 series. porsche has already said it hopes to meet half of its annual sales as electric by 2025. paul: that's stern to commodities. oil futures in new york and london have had a remarkable comeback. -- let's turn to commodities. progress on the vaccine. su keenan joins us with more on this. let's start with why something oil prices have come too far, too fast. su: well, it has been a dramatic rise from below zero for the

nymex. just look at the last week. you can see nymex oil, which is traded in new york, largely used in north america, came all of the way from 57, and big sure, that is a dramatic rise from where we were -- and, for sure, that is a dramatic rise. there is a concern that the glut is disappearing faster than many expected, and european commodity advisors are also weighing in at this may be too far, too fast. there are clearly some factors that have pushed both west texas intermediate and brent crude right up to that $60 mark. that has a lot to do with vaccine euphoria and a lot of optimism about opec. that is driving prices higher. just last week, opec pledged that it was going to continue to be vigilant in draining the

pandemic-driven surplus, but where analysts have been cautioning is it may already be priced in, this post vaccine demand, and the fact that opec actually could be heading into some disagreements as they begin to look at the rebound in price and start talking about producing more. so those are couple of issues that could create some bumps in the road as oil clearly is on a strong rebound and will be closely watched this week. shery? shery: major oil stocks are going along for the ride. no surprise there. su: yes, let's take a look at some of these oil stocks. they have come up hugely, and that is with a democratic-led administration taking a lot of policies in the white house the do not necessarily favor oil, but if you look at exxon and

others, they have come up in double digits just since the start of the year, so they are surpassing the s&p's performance, and they started to do this at the end of the year. let's go to the bloomberg, where brent crude and new york traded futures are versus where they were pre-pandemic or even in the height of the pandemic, and so this rebound is really creating a drive in the prices, but, again, analysts caution that the democrats could be speeding up the shift away from fossil fuels, which a lot of the u.s. companies depend on. they are already under pressure to start pulling money out of these projects, and, again, those stocks could have a bit of a comeuppance. both the commodity and the stocks. back to you. shery: su keenan in new york with the latest on the oil market. let's now turn to sophie in hong kong as we go to the sydney open.

soph ? sophie: a listing in the u.s. being mauled by a company where they owned businesses in the e-commerce space, building up. it has received a nonbinding offer from an infrastructure group, valued at $3.4 billion australia. -- australian pew the company is considering a three way split to create a standalone u.s. business, and in the wake of that report, they are assessing internal operations. checking in on how we are shaping up for the trading day ahead, new zealand markets after a long weekend, the kiwi dollar under pressure, steady declines, now lower after posting a third weekly advance. and we do have aussie futures under pressure, and we will keep

an eye on what is going on in japan, along with earnings very much in focus today. paul: all right, thanks very much, sophie. in sydney, the open next. this is bloomberg. ♪

paul: good morning. i am paul allen in sydney, counting down to asia's major market open. shery: i am shery ahn. our top stories. beijing tightens the rules on internet monopolies including bytedance and tencent. president biden says they are in

compet