♪ >> a very good morning and welcome to daybreak australia.

i am haidi stroud-watts in sydney. >> i am sophie kamaruddin in hong kong. >> good evening from new york. i am shery on. the top stories this hour. big oil loses big to climate activists. exxon shareholders voting green activists while they vote to speed up emissions cuts. >> the u.s. trade chief get set for her first meeting with chinese counterparts. she speaks with officials as early as wednesday as washington looks to build on a trade deal. >> pressure grows on australia's government to speed up vaccinations after covid-19 cases rise in melbourne. authorities are not ruling out a new lockdown. >> a picture across wall street. u.s. futures are unchanged at the open. this after we saw u.s. stocks gaining modestly in the new york session. small caps taking the lead. we had the russell 2000 outperforming other benchmarks

after losing ground to mega tech or the dow fluctuated and finished unchanged on its 125th birthday. the s&p was led higher. banks advancing after day one of the ceo costs on the largest lenders testifying before congress. they are under pressure after climbing to the highest in more than a week after we saw u.s. crude stockpiles falling. haidi: let's get to our top story. a tiny actavis investment firm has won two seats -- three seats, a third has been deemed it to tell. how did this play out and how much is a stinging setback for the exxon ceo? >> shareholders did not agree with that sentiment. it means that two exxon

incumbent directors need to step down, which is unprecedented. a third one may step down once the final tally is complete. we are in new territory in the american oil industry. i have never seen anything like this and it remains to be seen how it changed its strategy going forward. >> it is interesting. one of the reports from your story saying when you are the biggest and baddest, you can get away with all that in terms of the approach. what does this outcome say about how investors and shareholders feel about that attitude? >> exxon used to be the biggest cash machine on wall street, the biggest stock on s&p for years before the crash of 2014. when you are the cornerstone of

the equity market, you can do things other companies can't. over the years, we have seen exxon's financial performance deteriorate, they made bad investments around the way, misjudged the shareholder revolution. there was a deterioration of financial performance that gave investors inroads. shareholders have been unhappy with performance of the stock. exxon has been seen as a laggard in the big oil space. investors have had enough. >> looming large over other big majors. shall ordered by a dutch court to slash emissions. kevin: that is right, quite a surprising ruling. shell was one of the first to go down the path toward net zero.

dutch courts ruled it is not enough. it has worked before 2030 as opposed to 2050, shell's plan. europe is more aggressive on this. chevron lost a shareholder vote around emissions targets. another vote -- lost a vote a few weeks back. clearly, the private movements that may be in europe are certainly gathering steam in the u.s.. >> kevin crowley there as exxon investors met. criticized by shareholders who back to the proposal. the ceo told bloomberg the industry can change. >> investors of all types are focused on this, as we are. it is part of the environment today for companies that are providers of energy.

i believe our industry is part of the solution would we have the technical capability, project management capability, engineering acumen and financial capacity to be part of the solution. shery: investor carl icahn said this about the upheaval. >> we are not involved with exxon or chevron. i have always believed in a lot of copies. a lot of the problems we have in this country, you have very good management, but too many poor management's and boards. shery: energy stocks performs well this year. let's see how markets are across the asia open. sophie is there. sophie: asian futures little changed after they capped a five day game to push the benchmark against the 50 day moving average. downside about 1%.

health care sliding on its earnings and missing estimates. checking on how stocks are faring, the dollar perked up wednesday. yen back above 1.09. the kiwi dollar above 73, following the rb and z'-- following the rbnz. we may see tightening by the middle to late next year. we are seeing the korean won ahead of the ok decision. we will see if they raise the growth and inflation targets. while we may see improving outlooks, korea and japan cut their assessment for consumption and business conditions. profits are due this thursday. checking on the renminbi, the offshore rate below that 640

handle after breaching the level with the onshore yuan yesterday. seeing a move toward 630 for the currency. the pboc will likely mitigate the rally on china's exports. i do not see the renminbi moving far from that 640 level. dollar depreciation will moderate. the u.s. is seeing the tightening shift globally. haidi: let's get back to one of our top stories. the u.s. trade representative expecting to hold discussions with her chinese counterpart in the coming hours. china is stressing the importance of tariff rollbacks. our white house reporter in washington, and our markets coanchor, tom mackenzie. what do we know about these talks said to be taking place

soon? >> we don't know a ton yet. the ambassador will speak with beijing as early as this evening. the timing is fluid. we are not sure who won the chinese side she will be talking to. a key counterpart during the trump administration's trade talks. a lot of similar conversations. we will be looking to see if he is the person she ends up talking to. in the earlier call, as a prerequisite, they wanted to see tariff rollbacks the u.s. side expects china to live up to massive agricultural purchases they had as part of the phase one trade deal under the trump administration. shery: tom, elaborate on the

phase one trade deal and what was achieved when that deal was struck between the trump administration and china. tom: absolutely peered we talked about the significant commitments i china as this phase i deal. many said they were overly ambitious. 200 billion dollars in additional purchases on top of 2017 levels for 2020 and 2021. in terms of progress, last year, china was well behind the targets, came in at 76%. they can blame the pandemic, the rupture in the supply chain. this year you have seen a ramp-up of agricultural products and energy products, but they are still well short of their target for this year. the other elements we are likely to be looking at, those commitments around intellectual property and to the opening up of the financial services.

both areas arguably china can point to modest progress. >> when it comes to potential flashpoints, is there anything with the influx of u.s. corn? tom: we have seen them counseling u.s. cargos, about one million tons of u.s. imports, according to the chinese market. compare that to this season. it did cause concerns it caused a drop in the price of corn. some analysts say this is what china is looking for, leverage in terms of the price. you have above seven dollars a bushel for corn. china is trying to push the pricing down. timing is interesting given the talks between katherine tai and her chinese counterpart. in terms of imports, it is likely to be a record year. shery: this could come at a very

tense time as we are hearing from president biden he will be asking his staff to continue investigating whether the coronavirus came from a lab in china. kevin: this is a real pivot -- just: this is a real pivot for the biden administration. what we heard from the white house today was that they have asked the intelligence community in the u.s. to spend three months preparing another report on the possible origins of the virus. the president said he received a report on this issue a few weeks ago, but it was split. two elements of the intelligence community said they leaned towards animals being the source of the virus while the other leaned toward the origin in that wuhan lab. you can tell the president spurred details.

it is feeling political pressure, considering the massive death toll both in the u.s. and globally, to determine what the origins of the virus are. >> that was justin sink in washington, d.c., and tom mackenzie in beijing. crypto exchange with a record corridor, the bitcoin roller coaster. next, the market outlook. her picks as she looks outside the u.s. for opportunities. this is bloomberg. ♪ s bloomberg. ♪

>> you are watching daybreak australia. first word headlines -- senator elizabeth warren called jamie

dimon the star of the overdraft show. she made the remark as they testified virtually about the state of the industry. warren noted that hefty fees on customers struggling during the pandemic. she said jp morgan made almost $1.5 billion and over trapped last year, seven more times than competitors. prime minister boris johnson facing read a schism from former chief advisor during seven hours of testimony, dominic cummings laid out what he calls the government's disastrous handling of the pandemic. he said johnson's poor leadership caused countless deaths and caused it -- calls him unfit. >> in any sensible government, it is completely crazy that i should have been in such a senior position, in my personal opinion. it is crackers that someone like

b should have been there, same as for boris johnson, but the choice last election was morbid. >> new york offering 54 college scholarships to boost the number of those getting vaccinated. 12-year-olds to 17-year-old who get their shot can enter a pool to win. teenagers who already received their first dose are also eligible. the incentive comes with only a small percentage of adolescents vaccinated. charged with the downing of the malaysian flights. they have inspected the wreckage of the plane. the boeing 77 was shot down over eastern ukraine as it flew from amsterdam took a while a lump. -- to kuala lumpur.

global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. shery: emerging-market equities and currencies continue to rise as investors see value and global investment fears are receding. our guest thinks em's are attractive compared to their peers. alissa corcoran works at kopernik and joins us. investors have been cautious about emerging markets, given the fact the infections of covid continue to rise, not to mention , measures coming from developed markets are stronger. are you staying put in international markets? alissa: absolutely. it is important to remember we are long-term investors. if you look at the u.s. markets, they are at all-time highs on every single metric.

they are expensive on sales, market cap to gdp, on cyclically adjusted earnings. u.s. markets are overvalued. emerging markets, while up, are only up 50% since 2011. compare that with the nasdaq, up 400%. o'er the s&p, up 230%. we are finding attractive opportunities in the market. shery: in asia we have seen value outperforming growth. this chart on the bloomberg shows is that the trend we are going to continue seeing? alissa: we are bottom up investors, we focus on valuing businesses. for us, we have found opportunities in the utilities, in telecom. we have one of the largest names

in our fund at 60% of book value. one of the largest electric utilities in the world, in russia. it is clean energy. it is absolutely attractive on a valuation front. it is relatively a trend. compare that to the u.s., 1.8 times the value for electric companies. >> you talk about the uncorrelated nature of the way we invest. how much attention are you paying to the inflation outlook? alissa: if you talk to clients they say, we have no other portfolios that have the names you own. from that standpoint, we are very different, a very different product than you can find elsewhere. we are also not afraid to the go -- to go to the places unloved

and under followed. we mentioned inflation. the best time to buy commodities is when there is too much supply. it will take years for supply to work itself through the market. however, most investors shun that because it is highly uncertain. it is hard to imagine the commodity prices rise. we look at commodities from an incentive price, a long-term price. we are finding still opportunities in gold and uranium and natural gas and others. >> are you afraid to go into crypto? most institutional investors we have spoken to have gone away from the volatility. alissa: cryptocurrency is a

really interesting phenomenon. however, we prefer gold. there are things we like about crypto. bitcoin is scarce. in a world where there is lots of money printing, something that is scarce should do well in an inflationary environment. the monetary base is up nine times since 2008, up two times over the past year. things like emerging markets, commodities, should do well. we prefer gold over crypto. gold is time-tested. it has been an inflation hedge for thousands of years. and it does not have the hype. the gold mining index is down 40% since 2011. even as gold does not go up, there are a lot of gold mining companies that we own. >> one of your picks is here in australia. we have been covering the

changes to the board, exxon, the big decision to get shall as well. how does the investing side effect decisions you make in your portfolio? haidi: it is a factor we enter into the risk adjustment process. we come up with a theoretical value for all the holdings in our portfolio and risk-adjusted from there. geopolitical risks, financial risks, allocation decisions, all those things are built into a company-specific risk adjustment factor. first sure oil is very risky. the price of carbon, what is that? from our standpoint, we think it will take a long time for hydrocarbons to be phased out.

there are some opportunities because of this from esg. >> great to have you with us, director of research at kopernik . carl icahn ways in on the activism we have been seeing as well as cryptocurrencies. that conversation is next. this is bloomberg. ♪ ♪

>> there is not enough tax for the private sector to pay for this. there will have to be a private public partnership. ic partnership. >> here is a quick check of the latest is this flash headlines. the pace board rejected two proposals to diminish the power of ceo mark zuckerberg. he declined a proposal -- they declined a proposal to replace zuckerberg with an independent representative and turned down the bid for his a super voting shares that gives them a 50% --

58% stake in the company. it is frustrating for shareholders who want more independent oversight. amazon agreed to buy the nearly century-old mgm movie studio for $8.45 billion, the second-biggest deal for amazon since buying whole foods for $7 billion. mgm adds 25,000 hours of content to amazon's library. chinese regulators put tencent into a new financial holding company where they can be better supervised. financial authorities have not specified which of tencent's businesses are impacted. >> locked again. authorities monitor the growing

covid crisis with football grounds and in office among the places visited by infected people. we get the latest from melbourne, next. this is bloomberg. ♪ bloomberg. ♪ look...if your wireless carrier was a guy, you'd leave him tomorrow. not very flexible. not great at saving. you deserve better - xfinity mobile. now, they have unlimited for just $30 a month. $30 dollars. and they're number 1 in customer satisfaction. his number? delete it. deleting it. so break free from the big three. xfinity internet customers, take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes it easy to switch and save hundreds. in business, it's never just another day. it's the big sale, or the big presentation. the day where everything goes right. or the one where nothing does. with comcast business you get the network that can deliver gig speeds to the most businesses and advanced cybersecurity

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>> we have confirmation confirming control centers strikes at the copper mine in chile. the strike will begin thursday. bhp saying the minds will take contingency members during the strike. nonunion staff will continue working and they may be able to continue mining and processing even during that stoppage. bhp group operations rejected the latest wage offer.

that paves the way for the strike to begin thursday. we are seeing futures lower. the pushback has been on china tamping down on the excessive levels of those seen across commodity price rises. analysts are still bullish on copper, given the expectations of limited supply and taxation. shery: breaking news, confirmation on jd logistics ipo, their hong kong ipo offer. the ipo shares will be coming at $40.36 hong kong cents apiece. they will start trading on may 28. they are raising net $41.1 billion in the hong kong ipo, around $2 billion u.s. dollars.

>> as america withdraws the last of its troops from afghanistan, the taliban warns no u.s. bases will be allowed in the region. pakistan vowed on their territory is forbidden. the u.s. will want a nearby area from which to launch strikes against militant targets even after he pulls out. the u.s. said september 11 is the deadline for a full withdrawal. the union wants a belgian court to order astrazeneca to provide 20 million more vaccines than it plans to next month. the push amid bitter dispute over the alleged broken delivery promises. they want the drugmaker to pay a penalty of $12 a day for each shot they failed to deliver on time. they said there was a shortfall in production issues at european plants. china clamping down on foreign imports over concerns it overseas purchases, prompting

some cargo cancellations. aging -- beijing with quotas threatening to drive up prices. bloomberg has learned of the european union is aiming to hit belarus with a new round of sanctions by june. this after the forced landing of a ryanair flight and the arrest of a journalist. it --the e.u. sanctioned belarusian individuals and the president lukashenko. eight people are dead after a shooting at a california railyard serving silicon valley. the alleged gunman was an employee of the valley transportation company, which provides transit to parts of the bay area. the suspected shooter was identified as 57-year-old sam

cassidy. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. >> melbourne deciding whether further action needed to clamp down on the growing covid cases. it is more than the number that triggered a lockdown in february. our melbourne bureau chief joins us. all signs are pointing to another short-term lockdown for melbourne. >> that is right. it is starting to look that way. it is early in the day. we are waiting for official case numbers to come out. local media and social media is blowing up with the number of cases in each cluster growing in the last 24 hours.

the government is holding meetings to flesh out details of the potential lockdown. >> rebecca, hold on, we have breaking news. we are hearing the u.s. justice department is opening up probe into the archegos implosion, after that debacle, nursing more than $10 billion in losses. federal prosecutors is in manhattan said the request for information and dealt with people talking to bloomberg. it is unclear what potential violations or entities authorities are examining. the family office made massive high leverage bets on companies here in the u.s. and china. the department of justice is investigating the meltdown of archegos in march. let's continue our conversation

about covid infections across australia. are they close to finding out the length between all of those cases? [no audio] shery: we don't hear rebecca at the moment. this as we continue to delve into the story of the growing infections across australia. we will try to get back to that. in the meantime, the trial of an australian writer begins in china, accused of espionage and faces a possible death penalty in a trial that will be held behind closed doors. paul allen joins us with more. what is the background on this case and how is it connected to worsening relations with china? paul: he is a chinese citizen, became a citizen in 2002, and

used to work for the ministry of foreign affairs per been in australia he criticized economic policy and corruption in stock -- inside the chinese communist party. in january 2019 he flew with his china and has been in prison ever since. the foreign minister said china has not said how the doctor committed espionage. there is no evidence for the charge. in the current context of strained chinese-australian relations, it is hard to ignore this. human rights organizations called it an attack on freedom of expression. the trial is due to begin today behind closed doors. he is not allowed family members present. china's criminal justice system has a 99% conviction rate. things do not look good for dr. yang. >> no doubt families and

supporters of the detained journalist will be watching keenly. i am wondering what consular assistance australia has been able to provide to dr. yang. do we know about his health, mental state? paul: consular assistance has been limited, not just due to the opaque justice system, the coronavirus restrictions per he has been confined 26 months with no fresh air or sunshine. one of his friends said dr. yang is extremely angry about the closed-door trial. he released a message to friends and family. this was recorded back in march, intended for today. there is nothing more liberating than having one's worst fears realized. i have no fear now. the values i shared with my readers are bigger than myself. as you pointed out, dr. yang is not the only australian citizen detained in china. there is another in custody on

claims of trading state secrets, and is being dealt in a similar capacity. >> lots more to come on "bloomberg daybreak australia." this is bloomberg. ♪

♪ >> the activist investor carl icahn said he is interested in getting into cryptocurrency in a big way and may eventually put more than $1 billion into an alternative currency. he revealed he has taken a stake in the insurer space. those shares rose on the announcement. we asked him the future of activist investing. >> all kinds of activism can get on the boards. we have done it innumerable times. some successfully, some not. a lot of these companies have hidden jewels. the board and management do not want to do anything about them. that is activist going in. you find out you have assets producing enough, and you want

them to do so with enhanced value. that is what it is. >> to add value now in the economy, is the economy in the u.s. running too hot? what do you make of this inflation debate. if taylor and i had to take a drink every time we heard transitory -- how much are you thinking inflation is transitory or not? >> i really think we are pumping a lot of money into this economy. obviously, you're going to get inflation. you already have it. you have to be able to deal with that inflation and put on the brakes. otherwise, eventually, we will hit a wall. i don't know if that time is here yet. on a value basis, a lot of these companies are ridiculously priced. eventually, you can't have this

without excess inflation. there will be a price to pay for it. i don't think reddit and robinhood and of guys are bad. they serve a purpose. some of these companies might be ok, but a number of them are absurd. i go back to my example, my favorite one. where you got people to support only 2% return, to sell insurance on these malls. it is an absurdity. that is being done not by people you might criticize. we are really moving right now. >> what would it take for you to be an investor in crypto? >> unnatural manifestation of this inflation, it is not yet

there. a phenomena of that will be looking for other stores of value outside the dollar. we are a reserve currency now. if you keep printing the money, it is not going to be there. i am not telling you that will happen for sure. i am not telling you it will happen. a currency like this, you look at and say, it really has a value. if you look where you have another stored value, the criticism is wrong. what is the value of a cryptocurrency, what is the value of the dollar? >> icahn went on to say he is

looking into cryptocurrency's and might get involved. bitcoin continues to fluctuate around 40,000 dollars as analysts focus on technical factors to provide clues on where he could go next. our next guest talks about a good thing for the firm. a crypto trading platform with record results. he joins us from new york. the volatility played into your latest results. speaking to a lot of people and a general consensus seems to be the volatility is an asset when you are a retail investor. it is not such an asset when it comes to adoption of the asset class. is there balance to be found going forward? >> thanks for having me, i appreciate that. it is a boon for retail investors, an opportunity for institutional investors to enter

the market at this point as well. we are a retail-focused broker-deal. we are trading for retail consumers. the activity we see for consumers is increasing. i think the same dip is an opportunity for institutions to start participating in the space as well. >> how does that fit into their mandate? how do you explain to your clients that an ordinary day in an asset class you can see swings of 16%, 20%? >> that is the abnormal swings of 16% to 20%. we have seen that happen a few times. from a long-term perspective, this is an opportunity to invest, as mr. icahn said, what may be a reserve currency, a store of value. there are more opportunities

than bitcoin. we see opportunity investing in old coins. we are curious over the next three weeks how much money is coming into the opportunities. >> how do your clients feel about the outsized influence of tweets from just one person, elon musk? steve: it is great for business. when you have someone tweet, it adds volatility. it is the growth and maturity of the space happening now. remember, cryptocurrency has only been around 10 years. we are in early stages where that may have an impact and does have an impact on the cryptocurrency. as it becomes held by more and more people, more currencies held by more consumers, you will see volatility go away. to expect no volatility in a 10-year-old asset is not reasonable. we will see less volatility over

the long term with a different cryptocurrencies. >> given it is such early days for the cryptocurrency space, could we see more regulations, especially with china having their own digital yuan? what pressure do you expect from this side? steve: that is interesting when you talk about regulation. there is significant regulation in the u.s. today. we have no your customers rules, anti-money laundering rules. many of our competitors are doing a lot of the work required with regulation. do i think more regulation is going to come? i do. i spent time with my senators, congressmen, to talk about regulation to come. we participate in the blockchain association as well. everybody wants more regulation,

because i think that will help adoption. >> steve ehrlich, thank you for your insights today. the asian trading day with sophie kamaruddin. wti under pressure, after climbing by the most in two weeks or so, given we have seen the draw dan -- draw down in u.s. crude stockpiles. what is the outlook for prices right now from analysts? sophie: i want to highlight the view from jp morgan, they raised their 2021 forecast for brent and wti. their brent call for $80 until the second quarter of next year. there offsetting the weakness in softening demand. the dollar trending weaker is a factor outweighing the return of iranian crude. jp morgan sees risk to upside global demand.

it could see an increase from july. haidi: lots of analysts wondering if south korean stocks have gone up too far, too quickly. one says samsung is a bargain. sophie: the stocks are looking extremely cheap, the likes of samsung and hyundai. we see growth of korean growth stocks, which helped the kospi. the market reforms have been underweighed at these companies in south korea. they could decide for investors how to price that in. the gap between fundamentals is at one of the historically widest levels. it is usually 50% to 70%. haidi: that market is opening in

an hour. investigating the market-rattling meltdown of archegos management in march. this is bloomberg. ♪

♪ >> the department of justice is

investigating the market-rattling meltdown of archegos in march. it left big banks in europe, asia and the u.s. nursing more than $10 billion in losses. joining us now, senior analyst alison williams. what are prosecutors looking into right now? >> we don't know exactly what they are looking into. what we do know from our bloomberg reporting team is the fact several requests have been sent to banks. i spoke briefly with eliot stein, our legal analysts. his view is, the focus of the probe may be on archegos itself and not potentially the banks. >> what would we see as a potential outcome to such a probe in terms of changes to the regulatory environment? alison: it is not surprising.

we have this probe, a lot of regulatory probes going on. there is a lot out there. this probe is perhaps more focused on archegos, but there are regulators globally looking at the issue. i would point to two key things. one, there does seem to be reporting differences within the family office, especially when they are a prime brokerage client. that transparency was a contributor to the blowup and some of the pain at the bank. that is something regulators will want to look at in terms of transparency and reporting. the second point i would make, if you look at the losses, there were 10 million losses across a handful of banks.

the risk and reward was certainly not commensurate. if you look at morgan stanley, one million, credit suisse, over 6 billion. for about 1/3 of the size of morgan stanley, that is perhaps why swiss regulators are more focused on the banks and their banking system. >> we did not have the wall street ceo's testifying in congress. alison: we did. the focus today, both archegos and issues across investors with ceo's, did focus on the close to home issues, what happened over covid. one of the issues some of the politicians have focused on is lending, which has ironing, -- irony, because angst have so

much to lend and are dying to make loans. another issue that came up is that of overdraft fees. this has been more of a commercial issue for banks. we had a lot of fintechs coming in, not charging those fees, and different pricing structures. we do not expect -- our policy analyst does not expect new policies to come out of the process. >> alison williams there. let's get a check of the business flash headlines. a tiny investment firm won two seats on the exxon board. exxon mobil vocally opposed the nominees in the lead up to the vote. it sends a signal institutional investors are ready to force corporate america to tackle climate change. royal dutch shell has been

ordered to slash emissions harder and faster than planned. it could have an impact across the fuel industry. they want them to reduce emissions by 20% in a decade -- the court said more than double that amount. ♪

♪ ♪ look, if your wireless carrier was a guy you'd leave him tomorrow. not very flexible. not great at saving. you deserve better... xfinity mobile. now they have unlimited for just $30 a month... $30. and they're number one in customer satisfaction. his number... delete it. i'm deleting it. so, break free from the big three. xfinity internet customers, switch to xfinity mobile and get unlimited with 5g included for $30 on the nations fastest, most reliable network.

haidi: a very good morning. welcome to "daybreak australia." i am haidi stroud-watts in sydney. shery: i am sophie kamaruddin in hong kong. -- i am shery ahn. the u.s. trade chief gets set for a first discussion with chinese counterparts. -- could speak with beijing officials on wednesday as