>> i'm heidi insignia. kathleen: our top stories today. the stock market almost wiped out gains but other companies rally to a record. opec-plus stays the course.

kathleen: ready for round two. the doj prepares a lawsuit against google. let's take a look at wall street. weaker than expected jobs report that cast doubt on a strong u.s. government jobs report on friday, maybe the fed has to keep stimulus. not all that impressive. s&p 500 gaining fractionally, however, when you look at the index, we are talking about mega cap tech, apple, amazon, microsoft, netflix. they went across the board. you can see a gain of 1.3%. at the same time, bonds managed to make some gains. the center of the range. weaker than expected adp report gave them a little bit of a boost. strategists are saying 1.90% in

the next few months. they see a bearish formation on the chart. looking at new york crude, the market open down about a half a percent, 2% earlier in the day. people knew that opec-plus supply hike was coming. when the news came out, it did fall. i love this chart. this is a bigger picture. ted is a gain of nearly 650%. it is so interesting to me, if you would told me 10 years ago that big tech companies would become defensive plays, i would have said are you crazy? haidi: let's take a look at the asian markets as we head into the end of this week. this is a picture across australia and new zealand. australia less reacting to second-quarter gdp, but looking

ahead to what lies ahead in the third order which is not as pretty. take a look at new zealand, flat picture. sydney futures up about one quarter of 1%. we are watching iron ore mi ners. perhaps $120 at the next level. the aussie 10 year yield, little bit of a move there. the chicago nikkei up 1/10 of 1%. the aussie dollar is in outperform or, the aussie and kiwi are pacing broad weakness in the u.s. dollar. the third quarter gdp focus, we are in contraction territory, consumer sentiment, spending continues to be hit with two of the major state economies in lockdown. kathleen: that is a big number to watch for the rba and investors.

i want to take a look at the u.s. adp payroll report. this is a survey, they have so many small and medium companies. people saw this weaker than expected number, a gain of 374,000. that is the blue line along the bottom. the yellow line across the top is the actual increase in jobs. the last number we have is july, the white number is payroll survey forecast. it is coming down from strong, 940,000 to 750,000. there have been some big misses, because there is a week adp number, does not mean that friday jobs report could not hit 750,000, million payrolls some people are looking for. haidi: the recovery in the labor market globally depends on how economies are handling the delta variant, lockdowns. it's going to be where other

parts of the world are headed. in melbourne in particular, melbourne has had a strict resume when it comes to covid. we heard from the premier yesterday, it sounds like they are facing up to the reality of having to live with a certain number of infection. he is saying once the state gets to 70% vaccination, there at about 35%. once they get to 70%, he is saying there will be greater freedoms. kathleen: a terrific take on bloomberg today, on the terminal. business travel looks like it could be doomed. that is what seems in the survey. 45 big companies showing 84% plan to spend less on travel post-pandemic.

they see cutting travel budgets between 20% and 40%. the question is, what does this mean for airlines? at the same time, a lot of people saying you can't do the -- do away with the benefit. maybe over time, the premium business travel comes back. haidi: very interesting, particularly as travelers and employers are weighing in on in person. lots to think about. let's get over to vonnie when. reporter: opec and its allies have agreed to stick to their existing plan of gradual increases. ministers ratify the 400,000 supply hike schedule for october after a videoconference.

opec-plus is in the process of rolling back output cuts implemented during the pandemic. about 45% have been revised. the taliban and other afghan leaders have agreed on the formation of a new government. it taliban official says an announcement will come in the next few days. we are told the taliban have been waiting for the fall withdrawal between making public many plans. u.s. democrats are attacking jerome powell's record. how's lawmakers including casio cortez wrote memos. plus, they are not backing a single alternative. the doj is preparing a second

monopoly lawsuit against alphabet. a source says action could come as soon as the end of the year. last year the doj and 11 states filed antitrust case. google disputes it dominates at tech. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. kathleen: thank you. number of risks for investors. an earlier guest waiting -- weighed in. >> we get bad outcomes. >> what happens at september? >> september. >> september. >> this is when the rubber meets the road. >> we expect the market to

pause. >> all budget things going on. >> announcing tapering. >> geopolitics. >> a lot of people waiting on the correction. >> september is critical. kathleen: despite those concerns, cover next guest says the macro backdrop is supportive. joining us as the head of global asset allocation strategy for wells fargo investment institute. welcome back. one of the other subthemes here is valuation, equities, highest since the year 2000. at these levels, you seem fairly bullish, wide? -- why? guest: we think valuations are attractive. we have seen earnings coming in much stronger than analysts predicted, we still see upside to earnings of another 10% to

12%. we think that level of earnings, together with strong margins should be enough to grow into that ratio. if the fed does start removing stimulus, we have made it clear they are removing bond purchases , and sooner or later you get rate hikes. maybe sooner if the economy -- are you sure you are going to see a weaker dollar? guest: that is our base case. we think the fed will stick with their word and start tapering later this year, but we do not think they will be in any hurry

to raise interest rates. that might not come until 2023 in the latter part of 2022. with today's weakness and payroll report, not sure what we will see tomorrow. the fed is keeping a close eye on the employment market. we look just have to see that market improve more. haidi: is there a gap between jay powell is concerned about delta and how much the markets have priced in further restrictions? guest: the markets don't really seem to be pricing in any further restrictions. we do think that is probably behind us, so the market is skating covid more as a risk.

we may be peaking at this point and we will have to wait and see, a lot of kids are going back to school and they are unvaccinated. there could be some ramifications in the fall, we don't expected to damage growth going forward. haidi: it's interesting, you prefer the u.s. over international but you can't ignore china. which parts and how do you square that the question of adequately discounting an unknown level of regulatory risk? guest: we are certainly seeing more regulatory risk in the chinese market in particular. we do like emerging markets probably, but you have to have a

view on china if you are going to invest in emerging markets because there is such a large portion of that index. we see the chinese communist party trying to balance a number of different factors to optimize the overall power. certainly economic strength is one of the things they are looking to gain. we do like emerging markets, we look to asset management on the grounds that maybe we can tilt away from some of the markets where it may be more risky. haidi: wells fargo investment institute, always great to have you with us. still ahead, opec-plus sticking to production hikes and a united decision. the outlook for iron ore and broader commodities.

later on this week, an exclusive interview with a bank ceo. >> one of the jobs of the bank is to comply with complex laws. that complexity has increased, but we will navigate that, and we will continue to do so going forward. haidi: you can catch the full interview on the bloomberg terminal. lots more ahead. this is bloomberg. ♪

kathleen: we will check in on the commodities space, starting with iron ore after three days of losses, beijing steel production cuts are trying to

cut ambitions, be more efficient. a small bounce back. 783, that is positive. anything about agriculture commodities is being affected by hurricane ida. corn and soybeans over again. 2%, 1%. new orleans is the number one export hub, two thirds of our cultural commodity exports go out of new orleans. as long as there are questions, that is why you see the prices falling. farmers can't sell what they can ship. sugar falls about a full percent, the production of sugar is in question. there could be a shortage of supply. it's having a move. let's turn to energy commodities, crude oil in focus after opec-plus went ahead with the hike, crude had fallen today

. it was down nearly 2% at one point, relieved to see it reducing the decline. we have gasoline futures -- a gas lower. -- natural gas lower. haidi: let's stick with oil. a united front. su keenan joins us with the final details, less than an hour with a virtual meeting, very efficient. su: this is very rare. the last meeting was very contentious, this kind of swift ratification shows a united front. they agreed 400,000 barrels a day. this will take effect in october. there is also a view that the demand recovery is both gradual and subdued.

many analysts believe the path ahead for opec-plus is very challenging. there is a number of tailwinds they are dealing with. a shrinking demand versus stockpiles. going into the meeting, data show the outlook must for the market to continue to tighten for the end of 2021, then to flip and be a surplus. they see an issue with india, they are very focused on covid. there are concerns about how this is adding to uncertainty. in terms of reaction to the market, slightly down in asia, but we did see a flattening of price as the u.s. market reacted. we pointed out august was a big dip, the largest drop, one of

the largest monthly declines. many are seeing a recovery. kathleen: what are analysts saying about the next move? su: there is a difference of use because opec has the opportunity and voice last summer they would possibly reverse course if needed. they are monitoring the market. in terms of the call, citigroup sees opec and allies likely to pause increases. goldman sees oil rising to $80 a barrel, jp morgan sees a similar increase, $74. we saw oil steadying around $68 in the latest session. diving into the bloomberg natural gas prices, continuing to soar. we are looking at a continuation of this which impacts heating in

the winter. kathleen: that is coming soon, thank you so much. you can get around up of the stories on today's edition of daybreak. it's available on mobile, you can customize settings to get news you care about. this is bloomberg. ♪

haidi: the chinese presidents determine tatian to displace the housing bubble -- the strategy to endure severe short-term pains for long-term gains. [indiscernible] willing to endure painful reforms. i we about to see the commitment to that?

guest: yes. [indiscernible] the former fed chair who brutally tightened the monetary policy. later the groundwork for future growth. china is adopting a similar approach that the president is committed to deflate the housing bubble, and investors may be underestimated how they will bring the housing market to reasonable prices.

kathleen: i wonder if the ruling powers in china are going too far. give us some examples of how the well-intentioned policy to make it more affordable is starting to reverberate through the economy in negative ways. do you think they might have to reverse it? guest: there are concerns that this is a tough balance, trying to avoid -- at the same time, if you push too hard, growth is going to suffer. this is exactly the risk china is trying to balance. kathleen: thank you so much. don't miss our exclusive conversation with the ceo of the

hong kong exchange, that is 10:30 a.m. sydney time, 8:30 in hong kong and new york. ne-yo is the latest automaker to flag supply constraints due to an uncertain and volatile semi conductor supply. the chinese carmaker expects 22,500 vehicles in the quarter, down from 25,000. gladstone is said to be -- we are told blackstone is working. amazon says it will hire more than 40,000 people in the u.s., but the company is calling its biggest ever recruiting and training event. they sent to hold a career fair on september 15. amazon employs 950,000 people in the u.s.. haidi: but sick a look at the

day ahead. decode data in focus, trade numbers out for australia, trade surpluses expected to narrow in july. that is driven by record exports to china. we are watching home loan numbers in the coming hours, new zealand is reducing their second-quarter updates. lots more ahead. this is bloomberg. ♪

♪ vonnie quinn with the first word headlines. , weather is providing respite to california firefighters trying to keep a wildfire from entering the resort town of south lake tahoe. residents interest fled the area. the caldor fire is one of more than a dozen major places burning in california. president biden has met his ukrainian counterpart at the white house, telling him that the u.s. will counter russian

hostility toward ukraine. biden says the u.s. remains committed to the you -- ukrainian sovereignty. a texas law barring abortion after six weeks of pregnancy has taken effect, at least temporarily. the supreme court has stayed silent on a bid to block the measure. the high court taking no action. the texas law kicks in wednesday, becoming the country's strictest abortion measure. the u.k. is set to offer a -- a third covid vaccine to people aged 12 and older with weakened immune systems. this following a recommendation from the government advisory committee. authorities say the booster will go to those with conditions including leukemia and advanced hiv. no decision has been made on boosters for the wider population.

global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. ♪ haidi: pressure continues to mount in australia's covid zero policy with the premier laying out a severe opening. the two large estates are increasingly getting to the same page when it comes to reopening australia to the world. paul allen joins us now. this is quite divergent and striking compared to how new south wales acted at the start of the pandemic. >> the two states coming much closer together in their view of what the future holds. they are saying that victoria can get to 70% vaccination and you will see restrictions start to ease. those lockdowns remain in place for now. the easing of measures yesterday, there weren't many in

the end. you have to keep lockdowns in place to suppress numbers while the vaccine rollout is given a chance to catch up. he acknowledges that the experience of new south wales was proving how hard it was to keep the delta variant under control. to that end, we had 1100 new cases in new south wales yesterday. the hospitalization rate is going up as well. on the plus side, 148,000 people got vaccinated. the premier in new south wales saying, it's possible that the 70% fully vaccinated target could be reached earlier than the mid-october date that is being anticipated. once we hit 80%, that's when the idea of international travel comes back on the card. we could see an interesting situation then. a number of states are not on board with that idea. we could have a possibility we could fly from sydney to the united states but not to perth. kathleen: that's quite a story.

second quarter gdp better than expected. once the outlook for the next quarter with half of the population facing these restrictions? paul: 7/10 of 1% for the second quarter. the third quarter is expected to be quite ugly. 16 economists surveyed. for a 3% contraction in the third quarter. the most pessimistic among those 16 seeing a 4.5% contraction in that quarter as well. avoiding a technical or -- technical recession would rely on a few things. first off, vaccination targets getting hit. it relies on the savings rate remaining relatively high. and then it relies on a spending snapback of the type that we saw towards the end of 2020 and the start of 2021. all premieres acknowledging that future outbreaks are going to require some sort of suppression measures in the form of lockdowns.

that will put questions on how significant that snapback and spending might be. kathleen: we shall see. thank you so much. business travel may be becoming a thing of the past. businesses are signaling that communications tools are making those trips history. joining us now to discuss is carol witzel. big picture, what survey did you do? what were the main findings? >> bloomberg talked to 45 companies around the world. getting an idea of what the plans are for business travel. 84% said that they will be reducing spending on business travel. we've been in this for a year and a half. tech companies have found that we are communicating effectively through meetings and virtual ways. a lot of the travel is simply not necessary. it's a way to save money. a lot of things aren't deemed

essential. internal meetings came up as one. a big area to cut costs. do you need to fly across it the country when you can just do a call and get those things out of the way? it's a broad-based phenomenon through a lot of injuries. we talked to volkswagen, deutsche bank, a bank of singapore. they see it as a way to save money. haidi: we continue to watch the development of office renters. we've been asking every ceo. >> apple is asking employees now to verify their vaccine status. it's not a mandate. they want them to voluntarily sheriff they've been vaccinated so they can get a idea of compliance. they are stopping short of a

vaccine mandate. in the tech industry, they have been very mixed. google and facebook are requiring them to get to the office. apple and amazon are not. every suit -- everyone is taking a different tack. apple has delayed its return to office until january. haidi: we are hearing more and more about acceleration when it comes to boosters including one out of but dharna. it was seeing very strong data when it comes to these boosters and the effectiveness. >> yes. they are firing -- filing for fda approval. they are getting that out of the way. they need full approval of the shot. yeah. they are showing strong antibodies. stronger than pfizer. the hope is to get booster shots

out in the next eight months after they have gotten their last one. haidi: that's the latest on the virus. coming up next, opec-plus sticking to its planned production hikes and one of those united decisions. they say there are signs of softer demand next year. we have lots more ahead. this is bloomberg. ♪

kathleen: time for morning calls. let's kick it off with a bullish call on the aussie dollar. citibank recommending going long aussie following the rally in the kiwi. their chief check set -- ethic strategist said it was identical to what they have seen last december. now let's go to the commodity space. ubs says, time to go long brent. pick up longer oil contracts. ubs and -- knows that oil stocks will benefit from the economic reopening and those assets have yet to fully reflect the price recovery. haidi: staying with oil, opec and allies agreeing to stick to their existing plans for gradual

monthly oil production increases . this has ratified the 400,000 barrel supply schedule. let's bring in daniel hynes. given how contentious this has been, this was a surprise. you don't think that this level of agreement is necessarily a long-lasting one. daniel: yeah. it has been clear that the market has been calling out for a strong oil. we are seeing increasing headwinds for the demand, particularly in asia. the delta variant has certainly curtailed mobility. it is surprising. to see them so unified. as you suggest, the 2022 outlook is certainly on a knife's edge. i think we don't see demand

returning to pre-pandemic levels. particularly international travel. there's going to be some sort of stealing on that recovery ultimately. that will come to fruition through 2022. opec members will be faced with a difficult situation as they continue to push ahead with their increases which will bring them back to output levels we saw back in 2019. or today. oil demand has ultimately, will ultimately start at levels slightly below 29 k as a consequence. they will have to make a judgment about whether to continue those production increases. haidi: i want to take a look at the biggest producers in terms of who has the most skin in the game. the u.s. on top of the biggest

producer, russia coming in at number two. saudi set number three. where does this dynamic potentially leave u.s. shale? >> -- daniel: it is certainly an interesting dynamic at the moment. clearly, russia and the opec group itself is fairly set to increase production levels. the u.s. shale industry will rain -- remain relatively cautious. that's the result of the experiences that have been suffered over the last decade. the ceos and shell companies themselves are certainly trying to maintain the sunshine. that means keeping a relatively cautious view on capital extended sure. also keeping it relatively contained, at least focusing on

producing wells. the ultimate gripe in our book from that industry looks relatively subdued. i think they are going to ultimately lose market share to opec and russia. i think they are relatively happy with that. if they continue to produce strong returns, shareholders will see that as a strong thing. kathleen: rob kaplan. he represents a fairly heavy oil-producing region. what he points out is that there's a big move to alternatives. the speed at which the world can get there does not match any sense that we are going to be able to completely back away from oil. do you agree with that? what does that mean for the longer-term price of oil? daniel: absolutely. that's an issue we are seeing plenty of right now. you can obviously see that

elected he prices in europe and the u.s. rallying. noble energy capacity has been strong. subsequently, low levels of capital expenditure going into fossil fuel. the power industry is really crying out for any type of fuel to meet electricity demand. markets like crude oil, coal, lng. in the shorter term, they will benefit from that huge level of demand coming from the power sector. kathleen: what's your sense of the price of oil looking over a year or two? china's growth looks wobbly. they are a huge demand or of oil. the u.s. economy has come back. if the world does get stronger the way all the stock market

bulls think it will, what does that mean for the price of oil? or vice versa. daniel: i think that the recovery story is still in play. i talked earlier about the man. the broader economic recovery will continue to bolster prices. we are relatively positive on oil, at least over the six month or so. in the back half of 2022, we may see those dissipate. i think ultimately, some of those supply issues come into play. so you can still get a relatively tight market, even if the growth in demand abates slightly. over that timeframe, we still think that lower oil prices can continue to rally. that pushes into $80 a barrel

with that tightness. obviously, that could all be right out the window. we see u.s. shale managed to get a pick up their and increase the outlook strongly. on the balance of risks, we think the market remains price tie. oil prices will continue to push higher. haidi: i just want to throw up this chart. the collapse through what we've seen since may. do we continue to see this variation? even though companies have seemingly hit peak profitability, it does feel like the only way from here forward could be down. daniel: yeah. the risks are clearly skewed to the downside. china's efforts to campaign

missions by reducing the output from the steel industry is going to have a significant part in supplying that. ultimately, there are some positives emerging. the infrastructure packages we are seeing outside of china, those will benefit global demand for steel and raw materials. clearly, china is the real driver of that market. i suspect we will continue to see steel out book -- output curtailed. ultimately, the stabilization in the recovery resulting in growth saying that all is well. that's very well for iron ore. i think it will be a couple years. haidi: always great to have you with us. daniel hynes. iron ore exports overall. we are hearing a call from anc

saying that the reserve bank of australia will announce a delay in the reduction of bond purchases. also, hearing about that this could be concerns with delay to tapering between a close call. of course, with two of the major states and economies in australia under lockdown, it's expected to be huge impact when it comes to third-quarter gdp numbers. particularly to household consumption and consumer confidence. the second quarter numbers came in pretty strong, really. we are expecting to see contractions in the third quarter. still to come, google is in the crosshairs of usaid i trust officials. this time, it's over its digital advertising business. we get the details. this is bloomberg. ♪

♪ kathleen: the u.s. department of justice is preparing a second monopoly lawsuit against google over the company's digital advertising business. this is in addition to the antitrust case looking into the company's web search business. our reporter covers the doj. this is another push from washington. where is it going to take everything? dave: right.

this would be the second lawsuit by the federal government, the second monopoly lawsuit against google. the first one was filed by the trump administration at the end of last year. that focused on internet search. this is google second most important business. a $20 billion business. this is about the technology that automates the buying and selling event space, display ad space across the internet. which is where google is a very big player. haidi: does the company's defense that they don't dominate the space, that's it take -- that it's a competitive and healthy marketplace, does that stand up? dave: well, that is certainly going to be one of the key

issues in the case. if and when it gets filed. antitrust cases, the issue of how much market share a company has in whatever market is at issue. in a lawsuit, it's a qui question. you will see dispute about that on both sides. these things can get very complicated. certainly, google points to competition from some very big companies including facebook and amazon. so these are not small companies that are in this market. these are big players. the other interesting part of this investigation, which was raised in on lauder lawsuit, google is in an illegal agreement with facebook to rig the market.

haidi: let's get you a quick check of the latest business flash headlines. apple is asking all u.s. employees to report to their vaccination centers. they are telling workers to very entirely -- voluntarily declare by mid-september. unlike its peers, apple isn't mandating vaccines. it says it will use the vaccine data to inform its covid response efforts and protocols. a new safety mode will automatically block abusive accounts. the company says the technology will assess negative interactions, considering a tweets content and its relationship. a new feature that lets users receive their paychecks two days early. the option does early direct deposit to be available within existing direct apposite

features. softbank is the uk's most valuable startup. it's planning a new payday launch for its product and targets achieving billions of dollars and injure will sales before it will go public. the ceo spoke to us earlier. >> we are trying to innovate is much as possible and cut out legacy, providing a more range of products. >> what more can you do? what kind of services will i be able to have in three or four years? will i be able to ask two months salary in advance? do i pay for something over 12 months? where are the spaces you want to innovate and i want as a consumer without knowing it yet? >> we are starting our payday products. it allows you to draw part of your salary.

instead of using credit cards and a loan overdraft, you get your salary that you already earned and that's just the beginning. in the future, we can give you up to 50% or more. >> when do you want to go public? >> sometime in the future. we are venture funded company. i don't really know. >> are you looking for more partners? how bugged -- big do you want to be before you ipo? you are talking about your products. do you have a target of how big you want to be before deciding or ipo owing? >> not really. we need to be more multi tiered

than where we are now. to be able to ipo successfully, we need to be in that range of revenue. haidi: daybreak: asia is next. this is bloomberg. ♪

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♪ haidi: welcome to daybreak: asia. we are counting down to asia's major market opens. kathleen: good evening. our top stories this hour. asian traders mole a defensive tilt on wall street. the dollar slipping to a three week low. opec-plus stays the course. members agree to stick with their planned supply hikes as