haidi: a very good morning. welcome to daybreak as trail you. sophie: i'm in -- welcome to "daybreak australia." shery: u.s. stocks rise to a record in treasury yields raise

to a record. haidi: alibaba hotels exposing the toll on the campaign against the online sector. shery: this is the picture across wall street. we see u.s. futures muted under a little pressure at the moment. this after the s&p 500 rose to another record high. we did see stocks pressured in the early part of the sector given that new york city is asking for proof of vaccination for some facilities. the delta variant concern really pressuring the market. still, we managed to rise to another record high. for goldman china indexed seeing its worst day in about a week. proved climbing after falling

two a one-week low. again, those delta variant concerns really reaching the market. take a look at some gaming companies in china. state media in china talked about the spiritual opium of games. we thought tencent take a hit, and all of these chinese avr's following, but really, it seems to be about hot money inflows. those are the areas you want to stay away from. tencent, for example, has had antitrust issues. still, they continue to see venture capital investments going in and regulators seem to be now tightening regulations on those companies even more. haidi: this same part we spoke to about yesterday, the

pavlovian response from everyone still bullish saying it will blow over or it is sector specific and very targeted, in particular the consumer-facing tech names. the regulatory write-downs we mentioned earlier, really showing up in alibaba's earnings. revenue missing estimates for the first time in two years. stephen engle joins us now. going into this, jack ma was where a lot of this started. how do they see this in the bottom line? stephen: i go away for nearly four weeks, and you guys are still talking about this regulatory crackdown. sorry, i tuned out for a little bit, but this really shows that this crackdown has legs. of course, every global investor watching this right nowalready. alibaba was the first company that really came into the crosshairs, and even now, that first shoe fell back in october,

and even now, we are still feeling the ramifications, and it was reflected in these latest quarterly results. the previous quarterly results from alibaba came in at a loss because they took that record fine of $2.8 million. however, what we saw is revenue declined in this latest quarter across most of its biggest business, from e-commerce to cloud, and it does underscore the pressure that alibaba continues to be under. they cannot just spend their way out of this problem. there's the crackdown on the behaviors with merchants -- there's a crackdown on anticompetitive behaviors like the contracts they have with merchants. the government really going after that.

the ceo talked about that, saying he is in essence in support of these policies, and it could be long-term positive for the sector. he is trying to say all the right things. profit fell, down 30% from the previous month. ant group, they lead behind, so we are starting to get the true ramifications following the international ipo that was supposed to be last autumn. shery: it seems tencent is going down the same route. stephen: absolutely. tencent, one of its bread and, is gaining.

-- one of its bread and butter businesses, is gaining. they are going to be under pressure because the concern is that gaming will be and already probably is under the thumb of regulators and of beijing because you had that article i'm certain you reported on it extensively yesterday while i was on an airplane flying over from the states, but again, that article about spiritual opium, which was taken down and then reposted without that reference to opium, but still, the messaging is very clear. we saw them coming out saying they are going to limit the time for those under 12 years old playing online games and doing online purchases in games, and analysts say it could lead to an outright man on gaming for those under 12 years old. that is a big part of the business, and tencent took it on

the chair and obviously again yesterday. shery: you can get more analysis on the crackdown on "red lines" on the bloomberg youtube channel. sophie: we are keeping an eye on the aussie dollar, holding gains sparked by the rba, the economy sticking to its tapering plan, which was a surprise for many economists, although it did hold

on rates, as expected. the rbnz may be likely to tighten standards. with the yen holding their a two-month high after briefly catching that 1.09 level overnight. the canadian loonie has tracked oil prices lower. checking in on wti, we are seeing falling below that. we have wti falling below the daily average. this as global demand is being clouded by the spread of the delta variant in parts of china, which has researchers saying it wiped out 5%.

the company boosted a surprise boost to the dividends. here's what the ceo had to say. >> what you are seeing is a story of confidence, a story of confidence in the underlying performance of the business. 12 months on from when we laid out for your strategy, of course, the world is in a very different place from the environment -- 12 months on from when we laid out our strategy. shery: we have an alert on the bloomberg right now. the cbc saying the eviction ban -- the cdc is allowing more targeted relief.

new measures aimed at helping struggling renters. let's get over to vonnie quinn for the first word headlines. vonnie: thank you. president joe biden along with other top democrats are calling on new york governor andrew cuomo to resign after a new york state report found he sexually harassed multiple women and violated federal and state laws. the state attorney general says cuomo retaliated against at least one employee for coming forward. cuomo denies the allegations. >> are you now calling on him to resign? >> yes. >> if he does not, do you believe he should be impeached and removed from office? >> let's take it one step at a time. >> the investigation found governor cuomo sexually harassed multiple women, many of whom were young women part -- by

engaging in unwanted groping, kisses, hugging, and by making inappropriate comments. vonnie: the u.s. envoy to afghanistan says the local government is too weak to negotiate a settlement without a new military strategy. the official called military advances by the taliban concerning as the u.s. prepares to complete its troop drawdown this month. the spread of the more infectious delta covid-19 variant has -- needs a threshold of 80% to reach heard variant. the cdc says 50% of americans have been fully vaccinated. global news 24 hours a day and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120

countries. haidi: still ahead, more analysis on those alibaba earnings and the tech crackdown. also coming up next, the market outlook. our guest tells us why she is still bullish when it comes to big tech. this is bloomberg. ♪

haidi: stocks advanced in the u.s. as mostly positive earnings offset results of china's crackdown on games. most tech names still have good growth prospects despite the regulatory backdrop. let's bring in late le pen's -- layla -- laila pence of pence

who well management. is this a buying opportunity for long-term investors? laila: we think certainly the regulatory environment is going to have to change and get better, but for long-term investors, there's so many opportunities in great companies. haidi: where does this put a recovery stop against those large growth stocks? >> we think the delta variant is not going to stop the recovery. certainly some people are slowing down from travel and some spending. we are seeing around here, people are it bit more worried. we see this as an opportunity.

we do have this slowing down, and maybe there is an opportunity for recovery stocks of four things get back to normal sometimes -- some time in the next few months or maybe next year. haidi: that is the uncertainty. are there potential uncertainties in the inflation outlook from here? >> we think the federal reserve will want a lot more inflation. they wanted inflation and they are finally getting it, and they do not want to derail the recovery. they have already basically been living with inflation for the next year or so. we do not see the movement

interest rates until 2023 and we don't think they will begin tapering until toward the end of 2022. shery: of course, that links to consumer confidence and consumer trends as well. there was a bit of a blip with amazon earnings. what are the trends that really inform your constructive position when it comes to e-commerce? >> the u.s. is still 13%, 14%, compared to china for 25% of sales are e-commerce, we have a long way to go. we certainly had a big bump because of covid and the lockdowns, but we don't think it is going away. we think there is tremendous

growth potential. we talked about infrastructure for years and we are so excited to finally have a bill. it is much needed money that needs to be spent on infrastructure. we estimate there will be around $2 trillion of spending within the next 10 years, which is needed. so we do think, although the stocks have definitely been doing well recently because of the upcoming money that is going to be spent, but we think there is tremendous more spending that is coming. haidi: you can get more on the markets and a roundup of the stories you need to know to get your day going.

this is bloomberg. ♪

>> the global chip shortage has been impacting us. >> we manage it day today. the chip shortage will continue throughout i would say the beginning of 2022. let's say some fluctuations. >> it is important to have the fluctuations. >> it is hard to predict. >> i think we have to overcome

-- we have overcome chip shortages so far. >> it is something we will have to deal with the rest of the year, potentially into 2022. quickly have a lot of customers wanting to buy our cars. shery: executives from some of the world's largest automakers commenting on the chip crunch. stocks reporting after the bell. lyft reporting profit ahead of schedule. we are also watching amgen and activision blizzard, which both reported earnings. japanese carmakers toyota and honda report later. we are also expecting singaporean brands to release results in a few minutes and

expecting healthy second quarter profit. haidi: another big day with earnings on top. softbank also one to watch on several fronts. we have also learned that nvidia 's a deal with arm, which is owned by softbank, could be at risk. >> we do know that softbank is one of the biggest shareholders according to data compared by bloomberg. we also saw growth increased during the pandemic, particularly with its covid-19 testing business, the company's diagnostic position. it has a lot of aging cancer

drugs facing competition. people close to the matter believe the division is undervalued. it does rely on a strategy, a database discovery of drugs and designing of its research. shares of the company are up about 9% in the past year, slightly below the interest rate standard. it is important to note softbank has been very focused on biotech and health care, and sources close to the matter say they have very slowly been building this very large space for five years. shery: we're letting the u.k. government could be blocking the deal. su: the u.k. apparently

concerned about security issues, that if they were to rise to a certain level, they could possibly block the deal. nvidia has been down almost 20% intraday. advanced micro devices, a big competitor on the other hand, not only closed at a record high, but closed at a series of record highs. i believe it is the fifth straight record close. any move to block this acquisition could impact nvidia's position in the market. nvidia announced the deal to acquire arm back in september. it is part of its push into semiconductors. arm has the most widely used set of standards and designs in the chip industry. we know in april, the u.k. was concerned about security issues as anticompetitive

issues. we are told by nvidia, which issued a statement on this, they are cooperating with the regulatory process, and again, no major decision has been made. haidi: let's get a quick check of the latest business flash headlines. back to earnings, lyft delivering its first quarterly profit amid surging demand for is right-hailing services. it says it will continue to address the shortage. >> the financial impact of maintaining elevated incentives while prices decline, we really have to look at those combined. this is built into our outlook,

and to an extent, we plan to further reinvest in supply and growth, which is the right thing to do right now to prepare for additional demand. shery: videogame giant activision blizzard posted quarterly results higher than estimated even as it faces allegations of sexual harassment. haidi: let's take a look at the day ahead for australia and new zealand. we will be watching for reaction as the bank of new zealand -- after the bank of new zealand august meeting.

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haidi: new york governor andrew cuomo was defiant in the face of a report that found he sexually harassed multiple women. the state attorney general has alleged cuomo engaged in groping and kissing multiple women. calls for his resignation are mounting, with president biden being the latest to say he should step down. let's get more from our reporter. talk us through the main

findings of the ag investigation report. emma: hi, yeah. the attorney general has had this investigation ongoing since march. the first allegations came out in september. now, she has confirmed cuomo either assaulted power harassed at least 11 women who either worked for the governor or some who did not even work for him. one was a state trooper assigned to be his private detail. cuomo has continued to deny these claims, but the report was pretty damming -- pretty damning and people are starting to turn against him. haidi: even president biden calling on him to resign. emma: yeah, biden is the latest. a string of democrats saying

they no longer support governor cuomo, including speaker pelosi. you are currently seeing a montage that cuomo put out himself as proof that what he does is harmless or whatever, but as james laid out, there's a very big difference between friendly kissing someone on the cheek and cuomo is accused of groping women, inviting women to the executive mansion for him to grope them, so it is very different. speaker nancy pelosi and senator chuck schumer, who is from new york, as well as new york senator kristen gillibrand, and the entire democratic delegation from new york to the u.s. capitol, have now called on him to resign.

haidi: where do we go from here? emma: there is another investigation ongoing. currently, the new york state assembly is doing their own investigation into if they should impeach cuomo, and kind of just in the past hour, the biggest thing that broke was the assembly speaker, who has been an ardent supporter of cuomo from the start, he has not said that cuomo should resign before this. he said that cuomo should resign. he also said he has discussed with the majority of the assembly, he has enough people to impeach him, and i think that is a big step forward. it does not mean they are going to start impeachment right now, but he does say that that is what the assembly is leaning toward.

shery: in new york, we are seeing the rise of delta cases, and this continues to be front and center. >> we are engaged in discussions about amount of resources. there will be a broad comprehensive approach to pandemic preparedness and response at every level. >> the key to n.y.c. path will be a first in the nation approach. it will require vaccinations for workers and customers, indoor dining, indoor fitness facilities, indoor entertainment facilities. this is going to be a requirement. the only way to patronize these establishments indoors is if you have at least one dose of vaccination. shery: the spread of the delta

variant has pushed the threshold for herd immunity to well over 80% and potentially approaching 90%. joining us to discuss this is bloomberg columnist max neeson. is this because the delta variant is so much more contagious? why is this pushing the threshold higher? max: that is the rentable reason. the sense of herd immunity is you have enough people unlikely to catch or transmit the virus because of vaccine-induced immunity or previous infection, so there's basically nowhere for it to go. but because delta is so transmissible, for it reaches one percent, it is much more likely they will pass it on.

there's also evidence that in the rare cases where they contract a breakthrough infection, they may be able to transmit as well. it makes it more difficult to get the level of containment, the level of immunity you need to reach that sort of herd immunity status. shery: the younger population has proven to be a really worrisome segment. we are seeing higher numbers of infections among babies and toddlers in certain states. are we also seeing it harder to convince younger people, teenagers, to get vaccinated? max: that has definitely been the case, teenagers and young adults as well. it sort of makes sense. they are younger, at lower risk essentially of bad outcomes.

we seen the argument about the need to not just protect yourself but others does not necessarily breakthrough all the time. it may well be that it will require some combination of either bigger incentives or as the new york city government just announced, having some sort of requirement where you cannot access certain services unless you are vaccinated, to really get over the hump in that age group. shery: could we see other parts of the country also following suit? max: i would certainly hope so. in order to get to that age group especially, there's polling that suggests that that requirement of proof may be something that might move the dial in those cases. especially in the younger population. i'm not sure you have as many of

these politically motivated or misinformed people. i think there's maybe more room for persuasion, and one of the means of persuasion may be for dining, concerts, things like that. haidi: a lot more people suddenly interested in signing up for vaccination. let's get you to first word news now with vonnie quinn. vonnie: the u.k. may block a takeover of arm by nvidia. in april, the cma was asked to investigate if the deal could be deemed anticompetitive. and the ftc chair is signaling a

pathway forward for bitcoin. he said strict rules could provide investors with necessary protections. the ftc is morning that companies awaiting merchant -- awaiting emergency approvals may be in for a long wait. the government agency is processing the highest number of -- processing its highest number of cases. at the tokyo olympics, american gymnastics start simone biles made an emotional return to competition. she withdrew from earlier events

. she now ties the record for most decorated u.s. gymnast. haidi: a big guest from tokyo on those olympic games coming right up. an exclusive conversation about how these unprecedented olympic games are going. coming up next, more views on china's possible crackdown on games after it decried the spiritual opium of games. this is bloomberg. ♪

>> there's been some concern about weather capitalism is at an end in china amid all these crackdowns. we don't think so. >> i think that we are in the middle of structural change. >> one thing investors don't like is uncertainty.

>> i don't think it is safe to consume that investors can trust putting money in chinese companies. haidi: investors weighing in on fresh regulatory concern when it comes to chinese tech. let's get analysis on alibaba's first-quarter earnings. james lee joins us now. great to have you with us. we really do remember that jack ma was one of the first targets of this regulatory crackdown, right? this reorganization within alibaba, are we seeing that play out on the broader line now? >> thanks for being on your show. the outlook stabilizing compared to the last couple of quarters,

if we look at the negative side, right, advertising and commission revenue grew 14% year-over-year, about three points below consensus, and this is mainly due to two some of the weaknesses we saw in april and may, and they also continue to support merchants by reducing their logistic cost, but if you look at the positive side, they are making progress on some of the new investments they are making, on top of deals, which is the new app focusing on the direct supplier to consumer model, they gain about 10% user growth quarter for quarter. at the same time, community buying business models, and on the regulatory front management reaffirm the focus on complying, on issues such as antitrust, they do an open platform to

allow competitors to be on their platform and data security at this point in time, so in conclusion, the outlook is actually stabilizing over the last few quarters. we saw some downward earnings revision investments. shery: ant financial has promised earnings. what does that outlook look like now? >> it is hard to determine because they are going through restructuring. they have set up a separate consumer financing company and reestablished a credit standard similar to commercial banks. obviously, maybe that will curb some of the growth in consumer financing. we need to look at the latest data in order to assess where the valuations lie, but my

assessment is probably that ant financial restructuring will be done by year-end and we will go from there. haidi: when it comes to alibaba, we have seen the stock underperformed in the last few months with analysts at least bullish. when can we expect some upside for the stock? >> if you look at valuation, it really has come down quite a bit, and i think most of the people who look at alibaba, the company as a whole, they look at the parts, and if you look at the current stock price, the court economic system is actually trading maybe six times fiscal year 2021 ebitda. we took a substantial hit in terms of valuation already

because of regulatory risk. i think there's a lot of risk coming from policy specifically. shery: one of those risks, the open platform initiative where you have other companies having their apps in alibaba's platform and vice versa. when it comes to giants like alibaba and tencent, who benefits from this initiative from beijing? >> i think the whole purpose is to allow a more equal competitive playing field for a lot of smaller competitors in general. i think the government wants to enable smaller players in the e-commerce space to be able to acquire customers in a more economic way. from that perspective, we are

going to see probably some of the smaller players come into these platforms and be able to generate business on their platform. i think from that perspective, it is benefiting everybody. it will bring competitors onto the platform which will allow consumers to be able to explore more different products. i think at the end of the day, it could be a different situation. haidi: securities analyst james lee joining us from boston. coming up, more on china's crackdown on tech. we do have breaking news, jobless rates coming out of new zealand, dropping more than expected to 4%. the unemployment rate dropping as we continue to see a growing labor market. we are starting to see a lot of these countries including

australia where borders have been closed that we are seeing emerging skills shortages. we are seeing numbers when it comes to participation rate staying pretty steady as well as a little bit of wage growth, more than expected when it comes to that quarter on quarter number, just shy of 1% for wages excluding as well as including overtime, and we're just waiting for the number when it comes to hourly earnings, but certainly this picture of a tightening labor market continuing. shery: citigroup analysts saying the chinese market has overreacted to the critique of online games. sophie kamaruddin has more. perhaps a buying opportunity in the making? sophie: it could be the outperformance that could provide a lift.

there's a healthy dose of skepticism, and switching out the boards, it couldn't has the prospect of buying opportunities. that is not new, noting that players such as tencent have been delivering such measures since 2018 and on tuesday allowing more measures to be rolled out. the risk of volatility spilling over from china's regulatory woes and noting that so far, e.m.'s north asia have been isolated, and i could be the

primary driver for outperformance ahead. haidi: singapore's top three banks reporting earnings as the country reports a resurgence in covid-19 cases. we will take a look at that. ♪

shery: --haidi: singapore's three largest banks are due to report second-quarter earnings. let's get the view from our correspondent, haslinda him in. haslinda: the dividend payout suddenly is in focus, and that is because the authority of singapore removed that cap just last week. the cap was put in place on shore liquidity among banks. the fact that the mes removed that cap means banks are in a financial state, so that payment one to watch. we are also keep an eye out for loan provision. we saw a 75% drop in loan

provision back in q1. the situation coming out of covid is much better, and we could see that persisting. overall, singapore banks expected to do better still on that gangbusters q1 number. shery: does that mean we could see bank stocks rallying further yea -- rallying further? they are already among the best performers this year. haslinda: further upside possibly. expected to see as much as 15% per share in 12 months, but having said that, there are risks. remember what the said about recovery. singapore, malaysia, indonesia

-- remember what the imf said about recovery. shery: our chief international correspondent for southeast asia, haslinda amin. meanwhile, bill withers is the latest to signaled that tensions between china and the u.s. will not derail his investments. quick to geopolitical tensions are always on our mind, but the fact is the chinese economy is going gangbusters. the chinese connection to the rest of the world is increasing, not decreasing. as supply chains are reconfigured not just by western companies but also but chinese companies, the opportunity for

us to provide the financing, the associated risk management, is very, very strong. rishaad: what are you doing about staff retention? we have a lot of these passport holders who may well be leaving. are you seeing evidence of that? >> we are not seeing a material migration either of money or of people. i think people have always left from time to time. people are also coming back in. this is the place to be if you want to participate in the chinese capital markets. in our case, we complement our hong kong business with our shanghai business. they are almost the same operation these days. part of the reason i'm here, i was here for quite a bit in the

fall as well, because this is a hub on chinese capital markets, and i don't think there will be any change any time soon. haidi: bill winters there. daybreak asia is next. ♪

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haidi: hello and welcome to daybreak: asia. >> we are counting down to asia's major market of. shery: and for the evening from new york. asian stocks face a caution open despite wall street records as the pandemic and china's crackdown dampened sentiment. tencent