♪ haidi: good morning and welcome to "daybreak: australia." i am haidi stroud-watts in sydney. annabelle: i am annabelle droulers in hong kong. we are counting down to asia's major market opens. shery: good evening from bloomberg's world headquarters in new york, i am shery ahn. u.s. stocks slumped, traders blazing for a hot inflation reading and the start of earnings season. chinese adrs all as tech giants phase finds. haidi: tweet tumbles as the legal battle of elon musk up. but they may avoid big losses if the deal falls apart. shery: u.s., secretary raimondo tells bloomberg that lawmakers are playing politics by delaying the chips bill. u.s. futures are seen upside in the early asian session, after we saw the s&p 500 under pressure. we had the big tech giants

leading declines, twitter following 11% today after elon musk walked away from the deal to buy the company. the nasdaq falling more than 2%. and there continue to be questions about whether or not we are headed towards recession. the earnings season start will give us some clues. the 10-year yield falling below the 3% level. oil falling in the new york session, with risk-on sentiment, not to mention we had the flow of kazakhstan oil, as russian courts allowed that to happen. so we are seeing crude under pressure, $100 a barrel level. look at the dollar index, we are seeing it at the highest level since the pandemic. on the other side, we are headed towards a euro parity again. also watching emerging-market currencies because we are talking about 2-year lows since the start of the pandemic. we have to watch commodity

currencies, with commodity prices falling. the chilean peso at one point went through the 1000 level, a key psychological level. it is really about the haven flows into the dollar and what is on the other side of that trade, as well. annabelle: that's right, because the big commodity-linked currency in asia is the aussie dollar. we are seeing it slip below the $.68 level and we could stay below that for quite some time. it is the picture of dollar strength and also domestic factors. we are keeping an eye on diane, still trading at that 24 year low against the greenback. domestic factors are following, signs of policy continuity with the government, and of course, at the boj. we are looking towards a weaker start equity whites. australian futures. were positive new zealand already to the downside.

let's look at the key data set we are watching for today, fairly quiet, but inflation data from japan will be among the highly. we are watching for any -- inflation data from japan will be among the highlights. we are watching for weaker yen, if you are looking to buy the d blackrock is calling itip a high volatility people. we are citing the pressures we have seen, stocks and bonds coming under the worst year in decades. and it will continue, according to blackrock. supply chain issues, the war in ukraine, what they are calling "the politicization of everything." they are calling it a "brave new world of heightened volatility, high risk premiums for both bonds and equities." tread very lightly is the recommendation, when it comes to

jumping in and doing in any bargain-hunting at this point. shery: there had been optimism and hope that perhaps china could be the saving grace, the stimulus measures and the regulatory crackdown easing. but it didn't help, when we saw the regulatory filings on the tech companies. perhaps some optimism left, given that china's credit jumped much more than expected last month. the highest on record for june, so may be an indication that stimulus from the pboc and the government is finally starting to come through the economy. we will see what happens when it comes to the markets. annabelle: certainly, tech stocks are on track for their biggest annual decline on record. this earnings season has a lot riding on it. let's get our mliv contributor, garfield reynolds. haidi: we hear warning from blackrock saying, don't get too enthusiastic about buying the

date. for a while we were thinking that expectations were so low that we could see some upside surprise. mark: the big concern for equity investors is the bond market has already said that recession is coming, with the curve being inverted, and also with pricing and still strong rate hikes the fed, but then soon, rate cuts in the following year. so with that backdrop you look at equities and you look at where earnings are, and earnings have not taken on board the idea that there will be a recession the earnings forecasts, so the idea is that this will bring that idea home, with actual profit and loss is reported, and more importantly, the guidance. if that all comes down the we people are expecting, maybe that has been priced in and thinks

turnaround. the difficulty is that the risks are being seen as skewed to the downside, especially with inflation on top tomorrow. shery: i wonder what happens to the dollar rally once we get those inflation numbers. it was interesting when you were talking about earnings estimates. morgan stanley continues to say they will pressure the profits of large u.s. companies, but at the same time, we are seeing treasury yields not raising anymore. what will that mean for the trajectory of the dollar and its subsequent impact on equities? mark: with inflation, it is interesting to ponder that there may not be too much juice that he could add to the dollar rally , per se. right now the rates markets, if it comes in hot, 75 basis point is already priced in, 73 basis points, so it is just a rounding error really, so how much more aggressively can traders price in hikes?

part of what is driving the dollar now, something that the rate hike momentum got going in the first place, is what is going on with the yen and with the euro. that is something, a huge part of the fx market. the yuan is falling on you see the -- the yen is falling on you see the policy. the euro is falling due to the war and other issues crushing europe so if they wield. rising, the u.s. dollar faces a lot of upside because its two biggest facing major downsides. haidi: the idea that chinese stocks were going to be the saving grace, the latest downturn is interesting to us because it isn't driven by anything new. it is fines on tech, it is the property market with evergrande,

it is covid zero. mark: yes, part of the story a couple of weeks ago about chinese stocks was that they were cheap. they had dropped for a reason, but maybe they got to cheap. those issues which had helped make them cheap had not necessarily going away. there was hope that they made. the common prosperity teams, the crackdowns, the potential that the u.s. might ease, since the u.s. is facing economic difficulty as well, and in particular, there were signs that may be covid was slowing down. around the world, it is very obvious that covid is not slowing down. the major difference is that in china, their policies to fight the virus mean that the virus is directly linked to economic activity in a way that different policies elsewhere have broken the chain. so those are the difficulties facing china and the reasons why you have got to be very wary

about going in, even when they do look so cheap. shery: garfield reynolds, chief correspondent for rates in asia and mliv contributor. you can follow all of the day's trading is on our markets live blog on bloomberg, at mliv . there is commentary and analysis from bloomberg's expert editors, you can find out what is affecting your investments right now. of course, we are watching twitter shares as well in the new york session after they fail. elon musk walked away from his $44 billion deal to purchase the company, setting the scene for a disruptive legal battle. let's get more with bloomberg's ed ludlow. can he do that without paying the one billion dollar breakup fee? ed: they are certainly headed to court to discuss that issue. the latest is that twitter's lawyers in a letter on sunday, wrote to elon musk, saying that his termination was invalid and

wrongful, essentially. i have spoken to a lot of investors in the last five days in sun valley last week, many of them in one place, and we got the sense this was a possible outcome. it is just that it happened so quickly and unusually. it happened friday night when you learn mask and twitter's cfo and ceo were in sun valley. haidi: what are the expectations for this battle, other than perhaps more -- other than perhaps more memes? ed: it is possible that this settles out of court. they agreed on a share price during the merger in april. twitter's board intends to hold elon musk to that deal. what musk plans to prove is that there was material effect.

that over a number of weeks in may and june, he asked twitter for information about the number of bots on the platform, and he says twitter was not forthcoming with that request and that amounts to adverse material effect. past court rulings haven't gone that way in mergers & acquisitions cases where the complainant has been able to prove material adverse. there are other parts at play. maybe musk comes in with a lower price offer. haidi: continuing to watch this space and all those developments. ed ludlow with the latest on twitter and elon musk. let's get to su keenan with the first word headlines. su: we are going to start with sri lanka, the opposition parties there trying to form an all-party government, this after the president and prime minister agreed to resign. the parliamentary speaker said the two will step down wednesday and parliament will vote on the 20th of july to elect a new

president. rajapaksa's whereabouts are unknown, after he escaped before protesters entered his official home. china has handed the u.s. a blueprint for their coexistence in the asia-pacific. the chinese foreign minister said he made the proposal during his meeting with u.s. counterpart anthony blinken over the weekend. it includes rules around upholding current regional cooperation frameworks, and respecting each other's existing interests. the u.s. embassy in beijing has not commented on the idea. that u.s. commerce secretary gina raimondo says president biden will announce a decision on easing some china tariffs. biden said on sunday that his administration is still in discussions on the issue. raymundo also says u.s. lawmakers are playing politics with national security by delaying legislation, for boosting funding for domestic chipmakers to compete with

china. secretary raimondo: if we are going to do this, what can they do on their side of the equation? while i cannot say for sure, certainly that is possible. if it does not happen immediately, it is something we will continue to pursue just in the interest of, as you say, fairness. if we are lifting tariffs, what are they going to do? su: you can hear more from our interview with commerce secretary raimondo in a few minutes, including details on the china discussions and issues around the chips bill. australian prime minister anthony albanese were promised a new era of climate action and energy intervention in a speech on tuesday to the sydney energy forum. he will repeat his promise for new legislation, including a target of emission cuts by 2030, netease zero by 2050. lawmakers say the targets don't go far enough, calling for a 60% cut by 2030.

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. i am su keenan. this is bloomberg. shery: a still ahead, analysis from the latest coronavirus threats in china and australia from deakin university chair in a pretty melody, catherine bennett. haidi: but first, the macro market environment may be challenging right now, but over next guest says things could be different, depending on how traders react. this is bloomberg.

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haidi: markets have solidified another 75-basis point hike this month, and majority of red officials are open to another ujumbo sized increase. one of them is warning that rushing to tighten policy runs the risk of over steering and could backfire. only atlanta fed president meanwhile, thinks the economy can withstand another 75-basis point hike. he is open to a much larger increase if inflation worsens. we can get the fresh rating on u.s. inflation on wednesday, shery. shery: our next guest says the current microenvironment is especially challenging for investors right now. turning this is kim forrest, founder and ceo of bokeh capital partners. you are calling this the weirdest economy have ever seen. why, and how are you adjusting?

[laughter] kim: sure. generally whenever we are in a recession or at least a recessionary sort of economy where you don't have to actually go below negative in gdp, like you are slowing down, you actually see job losses. we are not seeing those at all. in fact, everywhere i go, i see help-wanted signs. i can only imagine that there is a lot of enforceable help-wanted signs out there. businesses that have more white-collar jobs where you are not advertising on the streets. so on one hand we have very high inflation, we have demand killing gasoline prices. and there are sections of the economy having trouble. yet higher, higher, higher. that is what we need to do, apparently. it is just the weirdest time.

you cannot look back to anytime that looks like this in the last 100 years. shery: in fact, we are getting high inflation because of commodities rallying, and supply chain disruptions and supply disruptions as well. but we have seen prices come down. so at the beginning of the year, we had this over all commodities called from lots of analysts. have things changed now? kim: we are seeing a lot of commodities falling, but i will be the most important one is energy, and that is not the high point, but at least the finished products around us are still at really high prices. that affects a lot of people, especially lower income people that are spending more of the money that they earn, even though they are on higher salaries. it is easier to get a job, but they are still spending a lot of

that money just getting to work, right? so that is a problem. but it is very encouraging to see prices fall. that is what high prices do, they keel demand for the product. job done in some cases. haidi: when it comes to putting your money at work, you say you have to let go of the uncertainty of the present and try to work out what is going on or predict the trends of the future. what are you liking in terms of tech and finding value there>> once a technology person, always a technology person. all kidding aside, technology will give us productivity. apparently, we have a worker shortage here in the u.s., and companies will just have to be forced to implement productivity through technology. so because we don't really see any great values out there or any great drivers in software,

we are just playing the semi conductor area. and i know that if we are in a downturn, it is going to get clobbered. but if you have a longer term view, all of technology gets delivered on the semi conductors and that is where we are hanging our investing hat on at this moment. haidi: when it comes to infrastructure, what are your picks within the space? are you still encouraged by progress being made by building back america, and the themes we have been talking about for the last couple of years? kim: yes, i am. not necessarily do to this administration or any administration. if you drive around and look at things, our bridges are literally falling down. not only federal government, but state and local governments will have to spend money here on just

the basic things, like see which programs, roads, and certainly bridges. haidi: talking about being expensive, the u.s. dollar, how much will the strength cost big companies that operate motor nationally, we heard from morgan stanley that this could be a massive headwind? kim: i think it is a massive headwind. we have gotten announcements from global companies like microsoft and they have said it will impact their business. and i believe it. i don't believe there is an alternative, but i believe that especially overseas buyers with a very strong dollar, they may not necessarily by all that they could from the company or the other companies that are selling their products. overseas. that certainly hits companies like caterpillar, where they will probably look for local machinery coming from a different area and that is not

affected by the u.s. dollar as much. haidi: always great to have you with us, kim forrest, bokeh capital partners chief investment officer. you can get the stories you need to know to get your day going on dayb for terminal subscribers. and you can customize settings so you can get just the news on the assets that matter to you. this is bloomberg. ♪

shery: here's a quick check of the latest headlines. rivian is said to be planning hundreds of layoffs to trim its workforce in areas where the electric car maker has grown too quickly. sources tell bloomberg that the cuts will focus on nonmanufacturing jobs. the company could target an overall reduction of around 5%.

morgan stanley has picked two of its top bankers to lead the dealmaking group in a leadership shakeup. they have been promoted as heads of global investment banking. the shuffle comes at a critical time for the investment banking business which has seen its fortunes fluctuate amid market volatility and fears of an economic slowdown. broadcom is using one of its most senior executives, software group chief tom crouse. . he is leaving to become ceo of another company. he was one of the chief negotiators for broadcom's record-setting deal to purchase cloud computing company vm ware. haidi: let's look at the day ahead for austria and new zealand now. the west bank consumer confidence survey is what we're watching. and prime minister anthony albanese is set to address the

sydney energy forum and expected to talk reform, as well as strengthening partnerships in the indo-pacific. next, the u.s. commerce secretary says lawmakers are playing politics with national security over a delayed chipmaking bill. we will get details with the u.s. secretary mattis. this is bloomberg. ♪ millions have made the switch from the big three to xfinity mobile. that means millions are saving hundreds a year on their wireless bill. and all of those millions are on the nation's most reliable 5g network, with the carrier rated #1 in customer satisfaction.

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su: you are watching "daybreak: australia." i am su keenan with the first word headlines. the atlanta fed president raphael bostic, has repeated his support for another 75-basis point hike at the next fomc meeting. he says the central bank can raise interest rates to 3% without sparking a recession. policymakers pivoted to fish aggressively lifting interest rates, as they work to tame the hardest inflation in decades. taiwan's president visited tokyo to pay respects. he is the most senior taiwanese official to visit japan since 1972. the trip is likely to elicit an angry response from china, which claims taiwan as part of its territory. abe was a largely popular figure in a one, for his support -- figure in taiwan for his support of the island.

members have voted to strike over a pay dispute in the train. it could bring the network to a standstill for the second time in months. the union says drivers agreed to walkouts. members of another union also voted to support strikes. travel was halted in june by a three-day railway strike. liquidators off prep crypto hedge fund three ares capital say the fund's founders have not been cooperating and that their whereabouts are unknown. representative byrne traveled to their office in singapore to locate them, but found it dormant, with mail piling up on the door. the lawyers for the fund previously said the pair of owners and to cooperate. 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. i am su keenan. this is bloomberg. shery: strategists are split over u.s. earnings can fuel

equities into the second half. let's get more with our guests. there is both the bull and the bear case. what are they saying? annabelle: if you look at what citigroup is saying, they expect u.s. stocks to rally into your and, the s&p 500 ending at the 2400 level, about a near 8% jump. the reason they are saying this is that they are looking at her correlation we can see between fred rate hikes and also earnings growth. basically their premise is that when the fed hikes rates, we see stronger corporate profits. and likewise when we see an economic slowdown and the fed is forced to cut rates, we see that denting earnings at companies. in the bear case, let's go to one of the chief bears on wall street, michael wilson from morgan stanley. he is saying we are likely to see u.s. stocks sliding further from where we are now. so even if we get the soft

landing from the fed, he still sees the s&p 500 trading around 3400-3500 and in a recession case, dropping to 3000, 22 percent lower from where we are. he says it is all about king dollar and the impact that will have on earnings. haidi: and we are seeing a dip in chinese equities at the moment, but the strong growth in june, it was the highest in record for june. is that providing more positivity? annabelle: it depends on how you interpret the data. china really pushed its biggest banks to loan to businesses, we saw signs that that was a success in the latest credit data. yuan loans jumping. we also saw more longer-term loans to corporate and households and record government debt issuance. but the question is whether all of this went into the economic

activity or is channeling further economic growth. in terms of corporate loans, ing said some of the data suggests loan growth or loan demand was smaller than loan supply. they are looking at the uptick in undiscounted bills as well as the m2 money supply which indicates that perhaps some of the corporate loans may have deposited directly back into the banking system in the same month. that could signal that perhaps corporates art not seeing demand for loans as the economy continues to recover in china. shery: alright, annabelle, we will continue to watch that. investors are also watching the geopolitical front, after u.s. secretary of state anthony blinken's trip to asia. officials from the state department are heading to cambodia and south korea.

vice president kamala harris is also planning to virtually address the gathering of pacific island leaders in fiji. the push is following the lengthy tour of southeast asia by chinese foreign minister wang yi. wang says he handed antony blinken a blueprint for their coexistence in the asia-pacific, of the world's two largest economies continue to clash on security issues. haidi: u.s. secretary of commerce gina raimondo says she expects a decision on using tariffs on chinese goods to come soon. speaking exclusively with bloomberg, she also called on u.s. lawmakers to quickly pass a bill funding more chipmaking at home and called it a national security issue. sec. raimondo: yes, it will happen. it is taking much too long, and what is at stake is our national security. even beyond the economy. every piece of military equipment requires chips. if you talk to the heads of national defense contractors, as i have done, or senior ranking

officials in the department of defense, they are all very worried about the delay. but yes, it will get done. at this point in the negotiation, unfortunately, politicians look for leverage. and while it is not right to play politics with national security, that is what i think is happening. in the past two weeks, we made huge progress. we were closing out issues, finding compromise. i think everyone needs to come back today, get back to work, and commit themselves to getting it done in the next few weeks. >> what difference does it make if it gets done today or six months? what divisions are being made by conglomerates that may not be reversible down the road? sec. raimondo: what you say is exactly right. chip companies are making decisions literally right now because they need to meet demand of their biggest customers in

2025, 2026, which means they have to start getting cement in the ground on new facilities this summer and this fall. earlier today you saw global foundries has made a choice to expand in france. not the united states. you know, that is a loss. you mentioned intel, who is saying that perhaps they will slow down their expansion in favor of germany. the reason is because these big companies are hearing from your customers that they need confidence that the companies will be able to supply to them. 2025, 2026 and 2027 chip demand is expected to be through the roof so these suppliers, whether intel, micron, texas instruments, they need to fulfill for their customers. they want to be in the u.s., but if their choices are not fulfilling customer demand, then

they are going to leave america and do that. that is the risk. that is why today, members of congress back into the sea, do your job, don't let america lose out. >> should we be expecting an announcement from the president for he departs for the middle east on easing tariffs that currently apply to chinese goods, because that will be something i think a lot of people would look for a head of the cpi number. sec. raimondo: i am not sure. i don't know the precise timing. i can tell you that his team are in active discussions with him, something we are talking about everyday. and he is doing his job, which is to say, looking at all the different factors. you will see a decision i think very soon, whether it is before he takes off this week, i am not

sure. >> just to pursue the china issue for a moment, madam secretary, china is one part of a complex mosaic here. we talk about tariffs. he said it will not have a big effect on inflation. but what about the longer-term relationship with china, and to be specific, is it possible that tariffs being taken of could be bilateral, that china could give something to the united states, to try to reformulate our trade relationships? sec. raimondo: that is possible. you raised an excellent point, part of the discussion and one of the things the president is thinking about, which is to say, if we are going to do this, what can they do on their side of the equation? well i cannot say for sure, certainly, that is possible. and if it doesn't happen immediately, it is something we will continue to pursue, just in the interest of, as you say, fairness -- if we are lifting tariffs, what are they going to do? shery: u.s. secretary of commerce dr. ramo: speaking specifically with david westin

and guy johnson. coming up, australia is setting up its corporate treatments to combat a search of an omicron subvariant. we will get more on that with deakin university's catherine bennett. this is bloomberg. ♪

shery: oil prices continue to for in the asian session, under pressure in this risk-off environment that we saw in the new york session. and the haven flows towards the strong dollar did not help, not helping oil prices. so that is really making crude more expensive. a russian court allowed a crucial export booth for kazakh oil to keep flowing. but covid cases rising in china and elsewhere and that is not helping. haidi: it really is a global issue at the moment, this renewed surge in cases, including in china and here in australia, elevated cases in australia and the u.k. as well, the omicron subvariant making its way through two different populations. deakin university's chair of epidemiology, catherine bennett, joins us. always good to have you with us,

albeit always under this circumstance. cases are searching, and that is taking into account -- cases are surging, and that is taking into account we are likely seeing underreporting. at the same time in australia, we have been very quiet on the public health messaging front. there clearly is no political willingness to go back to restrictions. so how do we get through these next few weeks and months, and i guess the future, which shows that we will probably just keep getting variants? dr. bennett: it is actually a double whammy here in australia and new zealand because we are dealing with this in the depths of winter as well, which makes it difficult to get those messages out there, to meet only outdoors if you can, simple things that we know can reduce transmission. you are right, it has been quiet on the public health messaging front. what we would love to see, i think, many of us experts, is more information being released

that isn't just these high-level numbers. testing is variable now, we know it is only picking up a fraction of the cases, may be closer to half, maybe nowhere near have. so it is very difficult to tell people what the actual risk is as exposure rises, as our case numbers rise as well. so you get into these terrible binds where people are turning off, at a time when case numbers are pushing up because of these immune-escaping raids. going ahead, this is a challenge. if we step away every time with the next variant coming along, it doesn't have to be too much more infectious itself, it just has to escape the immunity that we have from prior infection, backed by vaccines. we have higher vaccine coverage here in australia, but we see with omicron variants the vaccine escape. that is the challenge. haidi: we are just getting a line from the washington post,

saying that the u.s. is seeking to offer a second covid booster to all u.s. adults. we know that the biden administration has been pushing for the second booster shot, pending signoffs for all adults. and this week we have seen the booster shot being available over the age of 30, recommended for over 50. seems like in pharmaceuticals, antivirals and boosters, is the way that governments are hoping to get out of this. . we have seen the infectious period be reduced from three months to 28 days. are pharmaceuticals enough? is that enough to get through what we anticipate is this case where people get multiple covid infections over the next few years? dr. bennett: that is certainly what characterizes omicron the reduction to 28 days is the days where people can consider themselves a bit safer after an infection before they are vulnerable to reinfection. we know that even with boosters, you do some cross-reactive

immunity, some reduced risk of infection by month or two afterwards. in australia, if we had enough people get the second booster, and the ones that haven't had the first booster have it, it might help get through the next month or so, which is going to be our peak challenge time. vaccines are still an important part of the strategy. but you absolutely have to get information to people about what their risk of exposure is and help them understand the value of those things we have talked about all the way through, including distancing, hygiene, the basics and of course, mask-wearing. we have had some good results in australia with mask-wearing in the past, but it is really hard to get people back with masks on. it is not just about rules, we still have rules in place. something else is getting people on board with really clear information. shery: is the same case here in the u.s.,, really hard to get masks back on the american public. but i wonder, when it comes to

the risk of exposure, how do you calculate that risk if you are traveling across countries and there are so many different variants of the omicron, of just covid-19 itself as well? and depending on where you are from, how many doses of the vaccine you have bought? dr. bennett: let's write, we have opened up globally again. it really is ba.4 and b.a.5 that are dominating, but between that, there are other issues. the virus continues to evolve. it could be that if you have a ba.5 infection, you might be more susceptible to another infection, because that version of b.a.4 is different enough that it might have a vaccine escape. people have to be mindful of that. the basics in avoiding transmission still matter. you can't lock people in their homes forever because this does

not have an immediate and insight good but if we don't slow it down, we will continue to see more subvariants. shery: what do we know so far about risk and how bed long covid could get? dr. bennett: that is a concern. some studies are showing that multiple infections have been associated with long covid symptoms. and some longer term consequences. it changed risk of things like heart disease. other things that we want to avoid. so there is actually a cost to having multiple infections. one of the things i have been suggesting here in australia, we don't recommend a second booster for people 30-50, but it is available to them, and a lot of health-care workers are interested. it is the people who have had multiple infections who are mixing in circles where the

virus is mixing. if they could reduce their risk of repeat infections, it is good for them, but it also helps the risk with the population if we can keep transmission down. haidi: there is evidence that long covid could mean a higher viral load. that the more evidence for suggesting that antivirals be rolled out more were tested in people who were vulnerable, older people and people with comorbidity. we have very strict rules about age, you had to be 65 and older with very specific conditions, with a list of complications or medical risk for serious illness. now people over 70 can have that

because they recognize the risk. so that is important. but actually opening it up to the whole population, we have drugs that have been trialed in everybody and for most people, the risk of going to hospital, it might make the difference. but what we see with antivirals is that some people, you stop the infection for the time you are taking the antiviral, but then you can rebound and pick up the infection again. all these things don't really stop what is going on because of the way that this virus works. shery: thank you so much for explaining this very complicated situation with all of these antivirals, different doses and different variants. catherine bennett, chair of epidemiology at deakin university. still ahead, australian prime minister will promise a new era of climate action and energy innovation in a key speech. we will look at what that actually means. this is bloomberg. ♪

haidi: the australian prime minister anthony albanese, will promise a new era of climate action in a speech to be delivered today. paul allen joins us with a preview. what is he expected to say? paul: the speech will be delivered at the sydney energy forum. anthony albanese will reiterate, is it about reducing australia's carbon emissions and going to net zero by 20 50. he is also expected to note how australia's infrastructure is not up to the current energy

challenges being posed by the conflict in ukraine and outline the plan to make the country's renewable energy superpower. he is bound by some political realities -- in the lower house there is climate-focused independents on the cross bench. the greens hold the balance of power in the upper house. they would like to see much more aggressive carbon reduction targets as well as a moratorium on new grass" projects. anthony albanese says more aggressive target will not be legislated in his first term. shery: how significant is the timing of this speech? paul: the timing, no coincidence. on wednesday, anthony albanese is off to the pacific islands forum. and of course there are frequent appearances by chinese officials in the pacific as well, both jockeying for power in the region. this is the first meeting of the pacific islands forum for three years. in the last in-person meeting,

they issued a declaration identifying climate change as the most persistent security threat the area faces. so in that context, anthony albanese giving this speech today set him up ahead really well for the forum on wednesday. shery: bloomberg's paul allen. terminal users can watch the sydney energy forum on liv . speakers include the prime minister albanese, the u.s. energy secretary jennifer granholm, and the leaders of the iaea and adb. haidi: let's get you a quick check of the latest business flash headlines. gap shares fell in late trading after the retailer fired its ceo over a series of operational challenges. someone will take over as interim ceo. gap adjusted operating margins to slightly negative. signs change has secured a loan to ease its cash crunch.

operators have. stephen: already sold extra funding to stay afloat. coming up in the next hour, as recession still looms large, we will strategy with michael vogelzang of captrust. and a member of elenchus presidential advisory group will be with us. that is it for "daybreak: australia." we have "daybreak: asia" next. this is bloomberg. ♪ ♪ as a main street bank, pnc has helped over 7 million kids develop their passion for learning through our grow up great initiative. and now, we're providing billions of dollars for affordable home lending programs...

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