♪ >> good morning. welcome to daybreak australia in sydney. in hong kong, counting down to the major market open. >> in new york, i am shery ahn. the u.s. may ramp up the trade war with beijing. the biden administration is weighing a new investigation into chinese subsidies. >> north korea has successfully

touched -- test launched a new missile. sa games is appealing after a u.s. court sided with apple on a antitrust lawsuit. across lawsuit we are seeing u.s. futures rebounding after the s&p 500 saw five sessions of losses, something we have not seen since february. it was the worst week for u.s. stocks since june. we had concerning inflation risk and market reaction to the ppi above expectation. we had that biden and xi jinping call which helped china slightly in the early session. that faded and chinese adr fell, down 25% year-to-date already. commodity currencies did gain

against the dollar on that phone call. wti at the moment is down 3/10 of 1% after its third weekly gain, mostly because of production concern after hurricane ida. we have tuesday cpi members under the u.s. to look out for. it will be all about inflation. look at what cost more in august. we see ppi goods hitting 40 year highs. we can see the metals, fuels, chemicals, paper, they all gain ground. a broad metals rally. but really, it has been about that busy week for noble equity capital markets. since 2012, nearly $40 billion of deals. september is marking traditionally start for new ipo's. so, we could see a lot of

activity coming up. >> we are also seeing a lot of activity in energy and mobile spending. we have this global confluence of events where you have pent up consumer demand and a that there will be a payoff with greater outlays of spending and production bottlenecks as a result of covid meeting more investment in production. we are also seeing environment policies exploited -- spurring demand for electric vehicles. there will be a 13 percent jump in globally this year. >> that phone call between xi jinping and biden help sentiments but did not last long. sources tell bloomberg that the biden administration is actually

looking into more action against chinese subsidies to see how that is affecting u.s. economic growth. so, we will continue to see a trickle of headlines on that front and what that does to global optimism on all fronts. >> the trade war has been kind of on the back burner. we have been more focus the tech war, china's domestic tech crackdown. we are looking ahead to big domestic activity. retail sales and real estate property numbers. along with industrial production, that will tell us about the tradecraft down -- the regulatory crackdown at the impact of delta. >> let's turn to sophie for what to watch. >> we are looking at a potential risk off tone from markets in

asia. investors turning cautious as breaks in recovery club racing taper tantrum. we are seeing ems more vulnerable. the jp morgan range of emerging currency -- currency correlation. we get japanese inflation from india. we have seen price pressures felt. -- build. higher energy cost could hamper the recovery. lng prices in asia are above 30 proc -- $30. we can see global gas prices continue to surge.

that means more expensive utility bills for households and businesses. the likelihood that producers pass on the cost is high, meaning inflation may not be transitory. >> good morning. the biden administration is issuing a new investigation into chinese subsidies and their damage to the u.s. economy to pressure beijing on trade. commerce secretary gina raimondo will meet to discuss the potential inquiries. the ustr has asked outside agencies to help quantify the damage. north korea has successfully testfired a new type of long-range missile saturday and sunday. the state says the missile hit targets 1500 kilometers from the

launch site. kim jong-un presided over the event where displays of weaponry were scaled down from previous exhibitions. the yuan nuclear watchdog signaled progress in talks with iranian officials. tehran will be able to replace done -- damaged surveillance. a new paul --poll suggests the japanese vaccine is leading to replace the president.

party members vote for a new later -- later september 29. -- leader september 29. epic games filed an appeal. a judge rejected epics claim that i -- apple is a monopoly. she did say apple is engaged in some anticompetitive conduct, ordering the company to a now developers to let users pay for transactions online, circumventing apple pay. i am vonnie quinn. this is bloomberg. >> economic data continues to reflect the damage from the pandemic. some indicators, like capital spending, may be suggesting we have reached peak delta. here's what some guests are saying. >> speaking. >> the virus may be peaking.

>> we see rising vaccination. >> the reopening of the economy is stuttering. >> we still like cyclicals. >> defensive versus cyclicals. >> back to a time of cyclicals outperforming defenses. >> if the pandemic takes a rest. >> we could see cyclicals doing better. >> we are hopeful. >> companies have already taken the slowdown in. >> the stock market is not the economy. >> despite debates, the u.s. travel sector posted the biggest gain in dollar terms in august of all industry groups, climbing 199% from one euro area. our next guest is bullish on the travel sector. cic executive vice president markham joins us from washington. how much can you bank on the reopening trade when we see u.s. equal data starting to sputter

-- pico --eco data starting to sputter? markham: we are very bullish on the travel space and its resurgent -- resurgence. there is so much pent-up demand in the system. hopefully the guests you showed before me were accurate in their predictions that maybe we have reached peak delta. couple that with the vaccine mandates announced by president bynum last week -- barnum -- vitamin last week. that might -- biden last week. that might create the perfect storm. about q1 of this year -- the demand we have seen is going to come back with a vengeance. >> malcolm. breaking news. house democrats are said to

propose raising the corporate tax rate to 26.5%. this falls short of president biden's ambition. democrats in the house ways and means committee plan to put forth and increase of the current rate of 21%, less than the 28% president biden was talking about. malcolm, back to you. tell us what this means for the markets. how much have they been pricing in of the higher corporate tax rate? malcolm: what is interesting is the corporate tax rate is hotly debated. it is always a point of contention between democrats and republicans. what we have seen in actual data is that it does not really matter too much what the corporate tax rate is.

business productivity is not going to stop. it is not going to slow down. people are not going to stop writing their companies and being productive because they have to pay more taxes. it usually tends to be much ado about nothing. lots of corporate lobbyists will be at the halls of congress making noise and fighting the good fight to make sure the tax rates stay as low as they can for corporations. but in reality, apple will still sell iphones. google will still get paid. facebook will still run ads that get paid. the corporate tax rate will really affect how much of their own shares they buy back probably, in the long run, how much excess free cash there is to buy back additional shares. it is probably not going to have a tremendous effect on fulks -- fulks -- full --folks'topline.

obviously, everybody wants to pay as little in taxes as possible. but we have seen the corporations will do business because that is what they do. they will make money. >> speaking of willingness to extend their business, we heard from s&p global talking about that 13% predicted jump in spending globally. this is so different than 2008. how do you invest around more spending? malcolm: i will say, it is tough to invest in small caps, any time that tax would be a point of contention. anytime we have changes that happen in the system that are this big, it is usually the smaller companies that do not have the money to afford the high-priced lawyers to create special carveouts in the tax code their behalf. so, we would say it would probably have a decent impact on small-cap. even though, the same five

largest companies are bank stocks at microsoft is leading the way because they have the ability to create those carveouts and adjust the game to themselves, versus, the other way around. so, that is one thing to keep in mind as you are looking at your opportunities in the space with this major change, should it go through, that oppose a threat, basically, to companies on the smaller end of the totem pole. >> right have you with us. still ahead -- great drive you with us. still ahead, silverlight is on track to open australia's biggest operation in more than two decades. anthony mcclure gives us his precious metal scorecard as inflation pressures loom. this is bloomberg.

>> my forecast is for inflation to remain this high this year and then move down next year. but, i do see upside risk. it is possible that the higher prices could cause longer inflation expectations rise above levels consistent with our 2% goal. thereby, putting upward pressure on inflation. >> i do not think we are anywhere close to the kind of carter era double-digit inflation. but, i do think we are in very serious danger of repeating almost all the mistakes of the 1960's and early 1970's. >> it is time for the week ahead. surprise surprise, the big event over the next few days is u.s. inflation numbers. it has been one of the hottest debates on wall street. our rising prices transitory,

like the fed claims? -- are rising prices transitory, let the fed -- like the fed claims? forecast expect consumer inflation to remain above 5% year-over-year. supply chain constraints are showing few signs of easing. normal -- and these levels would normally be concerned for -- cause of concern for the fed, but chair powell is emphasizing that this is transitory. >> apple is unveiling its latest iphone. that is always exciting. that happens on tuesday ahead of the holiday season. we will be watching for any commentary around supply and production. we saw a judge ordering the company to change the way it's operate -- it operates its app store in an antitrust ruling. we are hearing from the u.s.

climate envoy in india on his 2050 climate goals as we count down to that key climate summit. the chinese foreign minister will be visiting since the first time -- or the first time since november next year -- last year. >> heidi, investors will be looking for clues in the wednesday data. signs of weakness raised concerns over china's ability to drive a global growth rebound. numbers are expected to show the impact of the recent delta outbreak on the mainland with retail sales likely to take the brunt of the damage. >> more on what to expect with the chinese data dump with our chief asian correspondent. china is the world's second-largest economy. what are the implications of a

chinese slowdown in 2021? >> i think all indications are that investors and analysts are worried about the impact of the virus. over august, we saw the pmi surveys showing a big slowdown in the services sector. ever grand, a property developer . the concern now is that the slowdown in activity in china will challenge both financial markets and trade. >> we have that estimate by s&p global saying they are expecting a 13 jump in spending -- a 13% jump in capex spending globally. >> we know the back story that

the recovery is slowing down. essentially, companies are spending money to get ready for the post-pandemic world. on the one hand, they are having to invest in automation. the pandemic accelerated the digital economy. on the other hand, they are having to spend to get ready for the new climate agenda coming through in may countries around the world, especially showing up in -- in many countries around the world. capex this year is looking to be 13% higher. morgan stanley is saying that the recovery in corporate investment will be much higher after this crisis compared to previous crises. i cannot say the net result will offer a pillar of support for global close -- growth. >> the biden administration is issuing a new investigation into

chinese subsidies and their damage to the u.s. economy to pressure beijing on the trade front. let's bring in our chief asian correspondent david ingle in hong kong. do we see this of an extension of the frustration biden expressed in the phone call friday? >> >> that is a good way of putting it. biden has been frustrated with a lack of engagement that he is seeing, or not seeing, from the chinese. i think there are many in the bided administration who -- the biden administration who feel that trump era paris -- tariffs no longer lead to the desired effect of having china change its ways and are no longer any leverage get china back to the table. the state broadcaster in china quoted xi jinping, telling biden in a phone call that those policies the united states has had on china of late have caused serious difficulties in their relationship.

so, what we are learning in this berg news scoop is that the biden administration is weighing a new investigation into chinese subsidies and the damages they are allegedly having on the u.s. economy. the u.s. trade representative katherine tai as well as gina raimondo the congress secretary met friday to discuss a possible path forward. >> we know what specific steps the u.s. could take if an investigation is launched? >> obviously, they will be reviewing the trump era, january 2020, phase one traded deal which, the goalposts were really resets because of the pandemic. but, we have to see about enforcement of the trade deal and whether that is still relevant. and also, these $300 billion terrorist goods. -- tariff goods. they are likely to consult with

outside consultants to give the white house a proper pass -- path forward for any possible investigation if one is formerly -- formerly launched. -- formally launched. >> stephen engle with the latest. breaking news from sydney airport. we saw the sweetened bid from the consortium. investors are now offering a dollar five cents per share with due diligence. --eight dollars 75 -- $8.75 per share with due diligence. it is very interesting. although sydney airport has been clinging to the optimism of mobile travel reopening, since his those initial offers were made, the outlook for australia has darkened with almost half of the population nationally still under lockdown.

the lifting of borders is clearly playing into that sweetened bid. we will get the latest on that if there is a reaction. more to come on daybreak australia. this is bloomberg.

♪ >> here is a joke of the latest business flash headlines. -- a latest check of the business flash headlines. a strategic investment while hma infrastructure gets one from development holdings. both units plan to issue new shares for the repayment of debt. the plan is subject to approval from a chinese board. wage deals at 2 billion mines. they agreed to end the strike. union members assess of the new

wage proposal. the world's top copper producer is coming of the end to an intense time. we have plenty more to come on daybreak australia. this is bloomberg.

shery: north korea says they have successfully testfired a new type of cruise missile over the weekend. let's bring in upland bird reporter in washington. tony, this is the first with the biden administration. how significant is that? reporter: it could turn out to be. we do not know much at about the launch. it is a cruise missile. north korea's official news agency has given some details about how long it was in the air and how far it traveled.

they say it hit targets about 1500 kilometers away, almost 1000 miles. this comes as joe biden is still somewhat settling into his presidency and a persistent cache and north korea has been a persistent challenge for any u.s. administration. last week they staged a military style parade. it was the first since biden became president. of course, the missile launch, whatever it turns out to be, on a weekend when america is commemorating the victims of the september 11 terror attack, is also -- it is timing that could be significant. shery: -- haidi: we have the u.s. envoy in tokyo for talks is weak. what do we expect in terms of a

cohesive korea strategy from the president? reporter: that's very much still in the making. i think the administration is working on that. it is really not clear yet. the white house has not commented on this launch. and neither has the pentagon, for that matter. so this will all sort of come together as that visit proceeds. haidi: they are the latest. we will continue to monitor the story. let's get you to new york. vonnie quinn is the first word headlines. clicks u.s. democrats are set to propose a 26.5% corporate tax rate is part of president biden

3.5 trillion dollar economic plan. bloomberg has been told that there will be a top capital gains tax of 25%. joe manchin says he is concerned about inflation and higher corporate taxes. >> he will not have my vote on 3.5. chuck knows that. we have talked about this. there are so many differences we have. they are so much apart from us from where we are. i've been talking, i'm working with people, i'm willing to talk to people. it makes no sense at all. ? -- reporter: china has sent a covid team. they are reported 64 positive cases, half of which were locally transmitted. authorities efface more than 1000 people under contact.

sri lanka has defined a new central bank governor. the governor's departure comes as they faced dwindling reserves and revenues, looming debt repayments, and struggles with an extended lockdown. sri lanka's forex reserves dropped to $4.8 billion in july. 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 am a vonnie quinn. this is bloomberg. haidi: australia's airports are reportedly warning that -- the industry is worried that insufficient government planning. we are looking at case numbers and vaccination numbers for

australia. we got that sweetened bid for sydney airport. reporter: the case numbers are looking in sydney a little more positive. they look like they are studying, at least. but those vaccination rates are creeping up towards where the governments to want to reopen. we are expecting 80% of the adult population of new south wales to have their first exiting this week. in victoria it looks like it will hit a 17% mark in the not-too-distant future. we are looking at reopening. the aviation industry is worried . this could result in more expensive flights for australians overall. shery: what is the aviation industry asking for? reporter: they are looking for certainty about flight capacity, the quarantine system, about the year might look like. international airlines might pull out.

they might look to other countries where there is more certainty to focus their efforts on them. haidi: the sydney bureau chief there with the latest on the pandemic in australia. the former u.s. treasury secretary says the pandemic is the biggest national security threat for the usf americans and the rest of the world do not get vaccinated. he told david westin that the president's vaccine mandate is absolutely men -- absently necessary. >> i think he did the right thing. i think this will be with us in serious ways for a long time unless we get the vaccination rate up. what he did is necessary to get the rate up. i think it is supported by the vast majority of americans. i think it will ultimately be accepted by most other americans. it is like fluoride in the water, the tests our kids have to take to go to camp, or go to

school. this is like going through security at airlines. a more complicated and dangerous world require stakes -- requires things that did not used to be required. this is an example of that and we are struck that he is doing it right now. two years from now, it will be hard to imagine a world where there has not been vaccination requirements good for the administration. i do think there is a crucial dimension of all this. which is, what is happening globally, that is still not getting enough attention. this has been something i have been focused on for a long time leading up to the g20 with our panel. we need of much more global vaccination. we need much more preparation

for the next pandemic. this is the biggest vulnerability for our national security from the rest of the world over the next decade. that the virus mutates, takes a new form, a different pathogen comes along and we are not ready. that is by far a greater risk of americans using their lives prematurely from a foreign threat, relative to military conflict, terrorism, even for the next few years relative to climate change. we just need a major effort to stop this threat. americans are dying at a rate of 9/11 every two days.

maximizing our preparedness for threats of that kind, which also means engaging in global dimensions has to be a central priority for our country. i hope we will be moving on. to that i am encouraged by the reports of what the president is going to be doing during the un's general assembly. meetings, i am and courage by the signs. but really on the bold u.s. leadership on that issue in conjunction with other countries is i think the single most important foreign policy and national security challenge facing our country. haidi: larry summers speaking with bloomberg's david westin on wall street week. we continue to track the biggest vaccination campaign in history. more than five point 5 billion doses have been given out right now.

coming up next, australia's biggest new operation into decades. the managing director given us -- gives us the precious metal outlooks. this is bloomberg. ♪

haidi: you are watching "

daybreak australia." time for the morning calls. gold is holding below the monday session. will there be more pressure ahead? >> macquarrie reckons so. they do see it being more gradual. they have adjusted their average forecast for this year and next slightly higher. in the long run, they have seen the drop in global bond yields. flipping the board, they are fighting the chance of u.s. gas possibly doubling to $10. high energy costs may trigger a transitory argument but morgan stanley does not see double-digit levels were gasping supported in the long runs. shery: we could sydney see the rebound cash continue to see the

rebound. it is about $70 a barrel. this after hurricane ida shut down production capacity here in the u.s. take a look at the metal spaces. aluminum at a 13 year high. supply chain sank sending the metals, about 48% hydrate -- higher year today. goldman recently raising the cast. nickel also i recognize given that it continues to be art of the ev narrative, when we continue to see those electric vehicles using nichols as part of their elements. copper also on the up. we are using labor tensions. we are following that closely. take a look at precious metals, as well. a slightly different story when it came to gold because we have the first weekly decline since early august. we have u.s. inflation data and that's really sending more

speculation about the fed tightening. also the abandon treasury yields adding to pressure there. retail investors have had this crowding the silver space but that is cool down since then. tracking the pullback in gold prices with investors switching to more exposed economic coverage. haidi: we are taking a look at increased cap exit spending on expectations of stronger demand. that is the case with one australian miner aiming to tap into long term demand. when it comes to online, silver mines project will be the country's biggest new mine for silver and more than two decades. to get more we joined the senate -- the director. great to have you with us. tell us see investing -- the expectation why this is happening.

>> thanks for having me. silver mines limited is developing a project as you mentioned. the largest silver line development in australia for many moons. capital cost about 250 million dollars. i hundred 80 u.s. dollars. we will produce about 6 million ounces of silver a year initially written we are tapping into about 35% of our resource. there is a small amount of sink and let in there as well. so with the size of that resource, and obviously the possibilities are increasing production as we go forward. haidi: the increasing panel installations have been one element of the bullish forecast for silver from a lot of

analysts. where do you expect the demand to come from. >> well, we saw the bided in ministry and talk about wanting to have a big part of their electricity from solar power. whom so they announced last week that 40 to 45 percent of electricity generation in america by 2035 will be from solar power. that is great news for us because silver is a prominent component in solar power so the u.s. is one big country. we see elsewhere the growth that australians want but a small market. middle east is a massive market for solar paneling. >> we have seen technological advances recently post 8 -- focusing on reducing the amount of silver used in solar panels. will that affect your forecast.

>> i think the best way of expanding that is as prices go up, technology looks for cheaper alternatives. silver is the reason why it is used in electronics. we are not just talking solar power, but ev's and almost all electronics. the reason silver is used is by far it is the best conductor available of all metals and there is no over raising that. >> other than industry uses for silver, what is the demand outlook like for other areas? >> well, that end of the market is always strong and as asia picks up, particularly out of china and india, there is a huge amount of investment in precious metals and silver is a part of that. i think investment in silver, whether it is physical or

products, is as high as it has ever been. we see that increasing. active the industrial components. the industrial part of the silver market. we talked about solar panels and ev's and so forth. but it is everything you can think of. the reason why -- silver being the best conductor, is throughout the tv's, mobile phones, computers, aircraft, and so far, just on the mobile phone outlook, we are moving into 5g. there was zero 5g a couple years ago. over the next two years we expect 1.2 billion users of 5g. so those technologies are at the forefront of the electronic age. silver will be a big part of that. being the best conductor out of

all the metals by far, it has a very strong outlook. haidi: back in february we saw silver, as well as silver miners, getting caught up in the reddick crowd. the retail frenzy crowd. to do see that as a useful accelerator for the fundamental value proposition behind silver and silver mining? guest: that was speculation but most of us silver companies came out the other side of thatn a better position. so that was good. it puts modes -- more focus on something like silver mines. being a midsize company -- we have 12,000 shareholders. it is great to see now more focus on silver and seeing some of the big u.s. institutions buying our stock on market is very encouraging for us. there is speculation the market can be a bit noisy but i encourage people to follow the

fundamentals. shery: thank you for joining us. we have plenty more ahead. stay with us. this is bloomberg. ♪

? --shery: the judge or up --

rejected epics claims that the iphone maker is a monopoly and did not order apple to restore fortnite to the app store. joining us now is bloomberg opinion columnist. on the surface it looks like a win for apple. is the case when you look under the hood? >> i do not agree with that. if you look at the one count that epic one, it is really significant. basically the judge struck down the prohibitions that apple has on anti-steering rules. if this decision stands, assuming appeals do not overturn it, every game developer will be able to link out to cheaper purchasing alternatives and potentially evade the 30% fee that most of them pay to apple. this is the first real big setback for apple. a lot of things happened over the last year. apple is giving a minor concessions, nibbling around the

edges but that's the first thing that strikes at the core of apple on the app store. haidi: what are the implication for the bided administrations attempt to take on competitive behavior? >> i think it is helpful. the judge wrote 185 pages, going through every single detail. internal documents, facts and figures. she sent the market definition as the mobile gaming market. i think this helps the doj, the bided and nutrition, lawmakers, and congress get the momentum to go after apple and strike at their market dominance. i think this is the first step in what will be a long process but this is the first time apple has really gotten a setback that really hurts the bottom line in a significant way. shery: what are the implications on the global stage? >> everyone in the world will look at this. korea passed a law that is only

1% or 2% of their global revenue but worldwide, this is just for the u.s.. i am sure european countries, asian countries will look towards this and do similar things. if the u.s. does this it allows developers to link out to cheaper purchasing alternatives and there is no doubt that europe will follow suit. shery: here's a quick check of the latest business headlines. early discussions about going public as soon as next year. we are told the digital payments company is considering a market debut doing a direct listing or ipo. in march they had a valuation of $95 billion, making it the most valuable u.s. start into inscription -- encryption. messages stores on google drive in the cloud can still potentially be accessed by platform providers alphabet and apple.

facebook ceo mark zuckerberg says it will be the fourth chest first large-scale messaging service to offer encryption on backups. it follows that after scrutiny off its privacy policies. shane chee and the legend of the 10 rings has top the box office for another weekend. it broke labor day records for a ticket sales. the first marble film featuring an asian star may just under $36 million in u.s. and canadian theaters on sunday according to preliminary numbers. does he release the film exclusively in cinemas and surpassed estimates on its opening weekend. haidi: and of course it was the u.s. open weekend. the return of crowds. normality. but we are all watching novak djokovic to see if he can get the elusive grand slam, all four men's titles in the grand slam and one year. it eluded him. but the record still being held

stands. we did say golden slam for dylan al qaeda, the first man there -- the first australian man to do that. a lot to celebrate including some up-and-coming young performers in the women's game. shery: when it comes to that u.s. open final, of course, very closely watched games, we are talking about 218-year-olds, one beating the others, and one of them expected to become the best paid british sports woman, earning more than $1 million for reaching the finals. so lots of first-tier and a very exciting weekend. coming up, we get more insights from wells fargo asset management senior investment strategist brian jacobson. that's it for now for daybreak australia. daybreak: asia is next. you stay with us. this is bloomberg.

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haidi: welcome to daybreak asia. >> we're counting down to asia's major market opens. shery: i'm shery ahn. our top stories this hour. asian stocks dipping as the delta strain sour sentiment. democrat said to post new corporate and capital gains taxes