Focus in china, the unraveling of the chinese stock rally. Seems like things have stabilized after we saw one of the worst selloffs since the gdp eight out of china. You see china targeting large caps, small caps and the latest is kwai chow moutai. Yesterday, climbing back with the stock. Record after we saw a spike in virus cases yesterday. Watching other things with indonesia markets opening up, focusing more on the Bank Indonesia rate cut, cutting rates for the second time as growth sputters, the stocks are up. 4 area strength in the rupiah. Up. 4 . Strength in the rupiah. Nifty, futures pointing to a positive open. Yvonne the Trump Administrationyvonne is turning on some of americas Biggest Companies saying they are pawns of china. Attorney general bill barr says disney, apple and others are working at the expense of u. S. And western democratic values. He said disney and apple have been manipulated by the communist party interchanging strategy to make money. The coronavirus continues its march across the globe with the u. S. And asia seeing you spikes in Record Numbers. Toppedinfections have 13. 7 million. U. S. Cases rose to 3. 5 million with texas and florida hosting a Record Number of fatalities. Brazil has topped 2 million virus cases as the pandemic ravages forward regions and innercity poor regions. 1300 deaths taking the overall total to 77,000. Brazil is second to the u. S. In numbers and has added one million virus cases in a month. Tokyo is reassessing policy after setting an unwelcome record in infections. 286 new cases reported, the most reported for a single day, sparking fears covid19 is spreading into the community. Hong kong reported record new cases, the third time in a week the outbreak has breached existing levels. Lets bring in our reporter from markets asia. Out of the u. S. Putting pressure on stocks overnight. In asia they are managing to squeeze out gains. How will the shape out . I think u. S. Data yesterday was a very impressive. Sales,retail [indiscernible] but the japanese data was , which wasto decline also increasing but in initial , they couldlaims have had some crack in the nascent recovery as some states reimpose shutdown measures. But overall it was a very positive thing in gdp data. China gdp was the first to rebound from pandemic. This gives some message to the rest of the world growth is coming back. Think the markets are aware focuseds are certainly on the development of treatment around covid19 and vaccines. Market. Strong if you look at the shake off of renewed rising in coronavirus es and shaking off the fed it is a Balance Sheet to last a few weeks and investors are the threat over u. S. China tensions. Recovery,e economic investors will focus on this theme. The market remains intact. Yvonne you have a point. Markets have been perky despite the noise and negative headlines. The aussie is trading near . 70. Copper futures in new york are edging closer to three dollars, and you have got crude trading above 40. What signal the price action spending . But is a good observation. The key thing is Industrial Production rebounds in the u. S. And china and if we study from the china pmi surge at the beginning of this month, to me what is the very outstanding, but as copper outrunning gold. Investors are backing on the rebound of the economy. We have the worst for the economy and getting less bad station now. Optimism, the economy will grind higher and higher, markets will likely see a fighting and consensus over valuation. We may see some of the rotation [indiscernible] what chicagod by fed said yesterday. He sees u. S. Employment raised to 9 . We were at 13 in june. Second half of growth is stronger. Despite the challenges, markets are believing it. Yvonne believing perhaps the worst is over. Thank you. You can follow more on todays stories on the market live blog on the bloomberg at mliv go. Can get a rundown in one click. Plenty of analysis from expert editors so you can see what is affecting your investments. We are turning attention to the private equities space and how the pandemic is shaking things up. We will speak with marcia allen. Haslinda next will be chatting with one of asias Top Economists about chinas strong bent on even recovery. This is bloomberg. Is is bloomberg. Economic activity improved significantly in may and june, trials and april. At the same time Economic Indicators remain the low the levels recorded before the pandemic. We know this crisis may be protracted so at least for the next maybe two years, we will be willing to accommodate. There is a lot of uncertainty but the message is clear, Interest Rates will be low for a long time. We can see a clear bottoming out of spending on goods and production. In the second half the domestic economy is expected to gradually improve. I believe this will be dependent on the developments on the covid19 front. Ofeven if subsequent waves infection are more limited, it is not clear in presuming Economic Activities will return or at least return fully. I am supportive of the idea of putting it get above 2 before we take any action with respect to the fed funds rate. Haslinda central bankers talking about the prospects with economic recovery from the pandemic. Rishaad seems like they are throwing caution to the wind on how big of a bounce we are going to get. We saw a bounce in china yesterday. Gdp figures. The economy is vulnerable to key trading partners. Japan and the u. S. For example. Lets ring in fred newman. He joins us from hong kong. Chemchina keep this economic recovery going if the rest of the world is stalling . That is a big headwinds but remember exports are not that important for the chinese economy anymore. In the gdp numbers, you had hints the domestic recovery is very uneven. Exports are a challenge but domestic Consumer Spending for example still not catching up to where we would like it to be. Opposite private manufacturing still lagging behind. The recovery depended on the construction surge, infrastructure, for the time being. Yvonne we are talking about the stock market as well. We have seen Retail Investors come back in a big way. Is there a connection between the stock market and consumption in china . Is there risk china is using this to boost the economy . The wealth effect, changes in valuations, the impact on Consumer Spending is not that strong in china partly because not everybody owns stocks in china and partly because psychological compartmentalization that people take that money to invest in the stock market, it doesnt seem to be affecting the day today spending decisions. Much more important is the housing market. Here you have seen a rebound in housing demand. If that is sustained, it could help. The authorities dont want to see a housing bubble come back. Gradually appreciating prices might be good but you dont want that to get out of control. It points to a very gradual Consumer Spending recovery given the official sort of preference, we are not allowing asset prices to celebrate sharply accelerate sharply. Haslinda the consumption weakness is not just in china but other parts of asia. We saw how indian households could go highold over the difficult time and credit crunch. How does it look in terms of the consumption story for the rest of asia . Fred consumption is a lagging factor. China, first one in, first one out and still struggling. Other economies are having rising infection rates and seeing downward pressure on consumption. It is not just about the lockdown per se that restrains Consumer Spending but the uncertainty. In economies we remove the lockdown but you have rising infection rates, consumers hold back. Until we see the curve being bent in places like india, it is hard to see a strong Consumer Spending recovery. India is grappling with the added uncertainties china does not have. Uncertainty china does not have. Overall you see Household Spending really lagging in this recovery. We are dependent on government fiscal stimulus. The fiscal and monetary support we have seen so far, it is pretty much predicated on the expectation but we will see an easing or containment of the virus by summer. Here we are seeing a surge in virus cases still. In terms of fiscal and monetary policy, what else can we expect . The trade minister said fiscal stimulus will have limited impact going from here on. You could say the same about monetary policy. It will not really give you that bang for your buck. There is a need for continued policy accommodation but incrementally the monetary easing in particular will lose its impact. It is good at safeguarding Financial Sector to ability sector stability but it is less about driving growth and that means fiscal policy. The problem is many governments are increasingly constrained because of high debt levels. As we go into the second half of the year, you will see differentiation in terms of growth among the economies that can do fiscal spending and those that are more constrained. In the philippines, still have the fiscal firepower whereas the others have to tread more carefully. We see china with the first in, first out advantage. What other economies could follow . What kind of economy will merge out faster than the rest . One ways to look at infection rates. But is important in terms of restoring. It helps to restore confidence among consumers and businesses to invest. Vietnam is the case in point where you see low infection rates. You see it in taiwan and korea and in japan as well. Even thailand is among the economies that have brought down infection rates. The trouble is as we experience in hong kong or in victoria, which we did experience in beijing, you have the risk of temporary flareups that risk going back to the recovery momentum. Generally speaking, those are in a slightly better positioned to maintain momentum because of the reservoir of the virus in the population is lower so flareups are easily contained. Haslinda we heard from the Monetary Authority of singapore it is thinking how to wean companies and individuals from the pandemic relief measures. Is it too soon . Very the mas is always a forward thinking centralbank. I think it is right to think about how do you really get economies to wayne themselves off of this monetary stimulus and not make a continuous dependence if you will. Perhaps it is important to think about this, but it doesnt mean you execute it. It is worth it to think about it and to signal to the market that islly monetary accommodation temporary. That in itself accelerates economic to be economic activity. If that policy is not here to stay, it will incentivize executing these investment projects now rather than waiting for three years on the expectation rates stay low. There is something to be said about signaling, you get easy money now but make sure that remember this is not a continuous state of affairs and remain prudent in your decisions and take advantage of the low Interest Rates now. Haslinda dont get addicted to easy money. Fred norman. Neumann. An attack on chinas Biggest Record 25 billion wiped out in a single session. Attempts to cool the stock after a near 50 rise this year. This is bloomberg. Shares of quite show moutai, chinas biggest company, rising after the plunge that wiped out 25 billion dollars in value after the influential the high price of the liquor it makes. The move to take down the stock is seen as part of official efforts to cool the markets. Did it fall yesterday and why worse why were people worried . The peoples daily published an article saying moutai is often involved in the Corruption Cases and for bribery given their high prices. Although this is not directly targeting the prices of moutai, it was enough to trigger profittaking in the stock which march, the since wednesday drop. Blue chips and liquor makers, so there was a wider selloff. Us what kind of message does the state media shouldend on moutai investors start selling off these consumption stocks now . Jenny after the fed chair rally, people are sensitive to the town of the government the the tone of the government. The timing for the bubble to burst is costly to the regulators tone. Because it is a heavy rate and popular among those institutional and Retail Investors, the criticism is a wants toe government cool down the sentiment. We have had lots of signals already, including the regulation on the Financing Activities and the National Team on big cap insurance names. It is a signal beijing do not want this rally to be too fast and too big. Yvonne our china market reporter on the latest with the liquor stocks in china. Lets get to the business flash headlines. Fresh from the 1. 5 billion rescue package, Virgin Atlantic will return to the skies next week although it does not see travel demand at previrus levels for three years. They will resume flights to hong kong, l. A. In new york but says u. K. Quarantine restrictions will mean essential travel only. Most factors will be low. Netflix plunged 15 after delivering a disappointing subscriber forecast. The largest paid screaming streaming service expects to. 5 contrasting with twice that of wall street. The promoted a chief operating officer to work alongside the current ceo reed hastings. Twitter analysts say the highprofile bitcoin scam raises. Hreats to the Company Shares plunged after hackers targeted several public figures and one person says this could lead to concerns about user and data safety. Twitter says user passwords appear to be safe. Haslinda looking at the markets, asian stocks higher, led by tech. Never mind it was tech stocks that let the benchmark slower in the u. S. Benchmark lower in the u. S. We have the msci index up by 100 , emerging markets trading higher, goldman a big believer in ems. Csi index, look at it go, up 1. 6 . The shanghai slumping, selling off a reflection the massive run since march justified today, that sentiment is in a positive. We have the chinext up 2. 7 . It is expanding its gains now even though some Government Act funds were seen as selling off. It is in a positive to china but rising faster than ever before, rsi hitting a record. Market turnover jumped to the highest level on tuesday. This one is up 1 . Bernstein, buying china mobile, sayu, for fundamental, they sands china, the value debate has returned to asia. They say flip the page. Watching japanese airlines, jal trading lower. Plenty more to come. This is bloomberg. [announcer] imagine having fuller, thicker, more voluminous hair instantly. All it takes is just one session at hairclub. Introducing xtrands. Xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. Theyre personalized to match your own natural hair color and texture, so theyll blend right in for a natural, effortless look. Call in the next five minutes and when you buy 500 strands, you get 500 strands free. Call right now. upbeat music is 10 29 in hong kong. Here are the first word headlines. The European Union is threatening new tensions with the u. S. After striking down big tech data across the atlantic. The court said it has doubts about u. S. Protection laws in the wake of Edward Snowdens revelations about american surveillance. We need to continue to to have a better approach. We need to discuss with u. S. Colleagues to see what is possible to do in the next months or years. Malaysias scandal sees an order of preventing hundreds of millions of dollars fed from saudi arabia accounts in the u. K. Charged with receiving 300 million from the fund. The scandal has sparked Global Investigations. Tension looks to rise on the korean peninsula, which saw opening investigations into the sister of kim jongun. She and a top north Korean Military official are facing a probe into the destruction of a joint Korean Liaison Office on the north side of the border. The 50 million complex was seen as the souths most concrete achievement and attempts to improve relations. Right, a quick look at the markets. We are looking at session highs, but muted gains to end the trading week. Southeast asia is once again flat. The nifty could be having a good session to wrap up your friday in mumbai. U. S. Futures above 0. 3 . After we heard from some state newspapers calling the recent decline just a normal adjustment when it comes to the selloff in chinese stocks. We are also looking at currencies. The dollar, which we have seen gained overnight, still on track for a third week of losses for your bloomberg dollar index. We are seeing weakness in the rupiah after the cut yesterday. 2. 95 four your china 10year. Focusing on tsmc. They boosted sales and forecasts for the year despite not taking any new orders from huawei since may. Chairs up to 15 or more. Acer also up 8 in taiwan as well. Tech stocks having a good day in taipei today. We are seeing a reversal after u. S. Customs placed a detention order on gloves made by two of its top units. Top glove will not hurt their total imports for the company. We are seeing a big move there. Everbright securities down. Goldman cutting that stock to a cell now. The stock down 7 . Haslinda lets look at the private equity space now. Equity,lion of private almost 60 of the worlds total came from outside of the u. S. In the first half. Europe made up 30 of global investment. Asia pac made up 19 . No u. S. Targets were among the five largest yields. Of asiaus is the cohead private equity practice and morrison and foerster. Good to have you with us. We know from the numbers that we can see that a shot is doing better in terms of its share, but it is still a china story, isnt it . I think a lot of it is the china story and a lot of it is a covid19 story. Investorserceived by as having done better with controlling the virus then other s have. China is open for business, which investors think is attractive. It is still lagging behind europe and the u. S. Some say it is the environment that is holding it back. , there is also the regulatory issue. The thing we are dealing with in are there regulatory constraints that dont allow Foreign Investment or make it difficult for you to get your Foreign Exchange out of the country . Much of the First Quarter in private equity was mostly about portfolio bailouts. It was about keeping cash on the sidelines. Is now the time to start deploying some capital and using that dry powder to snap up distressed assets . Marcia i will say that my clients actually are quite active now and we have seen a significant uptick from the beginning of july and a little earlier than that. We are running a coinvestment process right now, where it is oversubscribed within the Grocery Retail sector. That is a very popular sector. I think that people are willing to write big checks right now. When you think the plainvanilla bios are going to come back . We are running two disposal processes, one of them is in auction process. I think that the buyout process, we are seeing it coming. It is going to be going to be midmarket. I think we will see a lot of that in the second half. Yvonne obviously, with this covid shock we have seen sorry. Let me ask one more question. We have been seeing the covid impact, that there have been a lot of shocks in ecommerce, textbased, a lot of pivots into domestic demand as well. Do you think these are trends that are permanent and here to stay . Marcia i think some of those trends are permanent. Inhave seen a big uptick data center interest. Real estate funds are pivoting to doing Internet Data centers and are pivoting to Logistics Warehouse is to support ecommerce businesses. I think a lot of that is more permanent. Other things, who knows . We will see. Wonderingim just whether funds are reorganizing and how they view the longerterm prospects arising from the pandemic. Is there a sense that there could be more divestments Going Forward . Marcia with a fund you always have divestments and acquisitions. They will be about equal. Situationsoking at where Large Companies want to selloff unit and funds may acquire those units as separate withis is the funds i work are looking at a lot of those opportunities were Companies Need to divest a unit that has become a different business than their core business and i think you will see some of those. Thank you so much for joining us here today. The backlash against tictoc and its Parent Company continues to grow over privacy concerns and how it handles collective data. One of its earliest investors spoke earlier about the widening divide between china and the u. S. Days, any company that has any connection with china is under screw you. We are living in an increasingly very polarized world with the two biggest economies, the governments at odds with each other, so it is definitely a complex and evolving situation that we continue to monitor. You look at what tictoc has done. Acquired musically. Team and what they have done and what they have grown business to worldwide is quite impressive. At the same time, we see them working very hard to have most of their top executives be based in the u. S. And have more and more teams be based in the u. S. And try to comply with local laws here in the u. S. So we see that making a very strong effort to make themselves more global. , the newlyentioned appointed ceo of tictoc. That said, you have india banning tictoc. President trump mulling a band, banningrgo considering employees from having tictoc on their phones. Is there a risk . Thatese days, the issue is if you have a server in china, people worry period. How do you solve that . The best way to try to move data , make it more localized, try to have more teams based in local countries you are operating in. There are a number of people are trying to do. Any company today that is connected with china and one way or the other is trying to do that. That is where we are in. The framework people use to look at these Multinational Companies has shifted in the last year and companies are scrambling to make adjustments. We encourage them to adapt, as well. You obviously invest a lot in china, a law across borders as tensions between the u. S. And china continue to ratchet up. Changing anything about how you do business across borders right now . Understand that the world is increasingly volatile. And we try to navigate through these complexities as much as we them as closely as we can. What we do see are the lessons from china and the u. S. , the lesson that are brought about by urbanization and the adoption of Internet Services are driving superior return. Today, we made an announcement on the Digital Economy index. We tracked 91 companies over the last 10 years. , a dollar in each one of them, it delivered over 50 returns year on year over the last five years. Over 30 over the last 10 years, where it is performing 20 or 30 better than nasdaq. We know that by investing globally and having perspectives , it allows them to adopt mobile internet technology, really changing the way people live and business is being done. That is what we focus on as venture capitalists. The gtv ggv managing partner. Coming up, our exclusive interview with speaker of the house nancy pelosi is next. This is bloomberg. Nancyda House Speaker pelosi said she is confident congress can pass another virus relief package in the coming weeks and that republicans will ultimately agree to spending levels closer to the five 3. 5 trillion proposed by the democrats. She spoke exclusively to bloomberg ahead of negotiations for the plan. Because of the unemployment expiring, the rest of that, we have to have theughout have legislation. It has been two months. More people have died, more people have gone unemployed, and more people have been accepted. What is the value of waiting . I know that some people would say it is too much money, but as i said to you before, what we are doing for state and local governments is one half of what the republicans added to the National Debt to pass the tax scam which gave 83 of the benefits to the top 1 . Sure that weke have a consumer economy. The confidence that people have to have money to spend it, to injected into the economy, create jobs, that is what we have to thrive on and not just depend on some possible trickledown if it happens. So anyway, we feel pretty confident about it. There was a lot of enthusiasm. All,of the injustice of it it impacts lower income people in a disproportionate way. We know that we must address that and we must address it especially now when there is a threat to peoples lives, their livelihood, and the life of our democracy. As you point out, some of the least fortunate have been hit hard by the pandemic and the economic aftermath. What can you do to make sure the money gets to those people . There are various reports that a lot of it has not. Speaker pelosi the direct payments get directly to them and the Unemployment Insurance does. We think that the ppp, the paycheck Paycheck Protection Program for Small Businesses did reach a lot of people, but it has had collateral benefit to those who should not have benefited from it. To be very specific and how legislation is written and not just assume people will do the right thing or the fair thing. That was House Speaker nancy pelosi speaking exclusively to bloomberg. Coming up, from president obama bill gates and elon musk, some big names fell victim to a sophisticated hack attack on twitter. This is bloomberg. Haslinda lets do a quick check of the latest headlines. Leading short seller muddy waters says betting against tesla may not be a good idea. Doesn block has said he not have any current bearish wagers. Tesla has baffled skeptics, who say it is grossly overpriced. Waters isnt convinced. You know, in any reasonable look at it, being able to really generate cash on a sustained it at youryeah, sure own risk. I would not do it. Haslinda American Airlines is making a big bet on new york. Jetblue. With the deal includes a cochair agreement with travelers able to use either of the carriers websites to book flights. It ramps up americans faceoff with delta, which is a major presence in new york and boston. Emirates plans to boost its Flight Network in the coming weeks as it recovers from the fallout of covid19. This week, the carrier has resume service to london and paris and intends to reinstall services to tehran later. Global airlines have been hammered by the coronavirus, which has devastated demand for air travel and put several carriers in danger of collapse. Now to the latest on the most serious Security Breach in twitters history. They are trying to find out how their highest profile accounts were hacked to promote a bitcoin scam. Su keenan has been tracking the story. Twitter is now grappling with the idea that possibly this was an inside job . Su yes, that is the crux of their investigation, specifically where twitter employees victims of a sophisticated fishing scheme, where they somehow clicked on an email that inadvertently give hack sirs hackers access or were insiders deliberately giving hackers access to the keys to the store . Twitter stock was down by as much as 4. 5 in the latest session, but it managed to erase a lot of the loss by its close. Should twitter not be able to answer the question of how this happened, many worn that its brand could take a serious hit. Twitter says, we detected what we believed to be a coordinated social engineering attack by people who successfully targeted some of our employees with access to internal systems and tools. Are sayingservers they got to the heart of twitters tools. The attack really targeted some of the top business and political leaders in the country. Billionaire and microsoft cofounder bill gates, teslas elon musk, amazons jeff bezos, many top celebrities, and also the former president obama and the Presumptive Democratic president ial nominee joe biden. These accounts were manipulated to send out messages to the followers that ask that money be sent via bitcoin. Verified, the actual accounts were temporarily blocked from posting. The message said, you send 1000, i send you back 2000. The scam raised about 127,000. While bitcoin can be difficult to track, the fbi and twitter now have a way to at least track digitally where the money is going. A big question now being asked, was it designed to distract from a more serious attack on Sensitive Data . Su well, Security Experts theorize that these targets were to highprofile and the attack too coordinated for it to be just about bitcoin, so they really wonder what may be next. Could there be a market moving scam involving the Financial Markets stood mark you have thousands of highlevel traders who all have twitter feeds or could there possibly be a breach of highsecurity data involving the president ial election . They asked what would happen if Something Like this occurred the night before the election . The incident certainly is a reminder that no source of information is fallible and it shows the risks where you have an wall street highlevel computers very quickly reacting to events. ,o as one observer points out false tweets can pose big and serious threats to the entire financial system. It is certainly a wakeup call for those involved in the Security Industry and throughout Corporate America. Back to you. Just a couple of comments here. Headlines from Chinas Ministry of finance. Yuan. Illion down 5. 8 . Tax revenue contracted 11. 2 while nontax revenue fell 8 . Following 10. 8 year on year. Expenditures down. Yes, youve got to wonder what kind of spending we will see in the second half. Are a look at markets, we looking at the Chinese Markets and once again we are seeing some risk in for your mainland markets. More thanc on fire, 1. 2 higher. Thismal adjustment, retreat we saw yesterday. You have other publications saying, is now a good time for investors to add positions . Up 1. 6 . Eeing shen jen still to eke out some decent gains for the week and it has been a pretty topsyturvy trade cycle here this week as well. All heading higher here today. The tech stocks really fueling the benchmark in taipei today. We are still focusing on what will happen in the india session. Virus cases topping a million now. Seems like they are still continuing to fight the virus. We are looking at a decent open in mumbai. This is bloomberg. Haslinda it is almost 11 00 a. M. In singapore and hong kong, welcome to Bloomberg Markets asia. This is a look at our top stories. The Trump Administration ons of pawns ofcalling them china. Attorney general bill barr says they are doing beijings bidding. Haslinda cases surge in several u. S. States. New high marks in india, near one million infections. Rishaad a new report shows the human and financial cost of the massive floods in china. 20 Million People affected, insurance facing increasing pressure. They are looking and having a full investigation. Approximately 130 accounts were targeted by the attackers in some way as part of the incident. There were able to gain control of the accounts and send tweets from them themselves. There is also talk of this being possibly an inside job in the sense that it did not emanate from within the company. Alloweds may have people to gain access to the accounts. Haslinda thats right, raising the question about whether there may be a change in regulation. Quite interesting to note that 120,000 worth of bitcoin were raised because of this incident, an incident that targeted vips the likes, joe biden. It begs the question, what kind of security measures are needed . Lets do a check of where we are in terms of the markets. Asian stocks. Track for as on third weekly gain. Msci asia index currently up 0. 4 . Gains for the benchmark here in the lion city, showing an improvement in june. Rising 16 year on year. Electronic exports surging 22 . Pretty much the same story, as well. Reliant on those export numbers. Speaking of where we are in terms of brent crude, down a tad. The Global Economic recovery may be slowing. At 1798. Ently people taking some kind of shelter. Rishaad yes, lets have a look at Chinese Markets. Have a look at what is going on in shanghai and hong kong, as well. Hang seng up 0. 7 . Are also u. S. Futures adding a little bit of impetus, as well. You can see futures in singapore there, indicating a high trading day. Investors are shrugging off this fiscal spending. We also have fiscal revenues down by 10. 8 . That coming from the ministry of finance. Just as a word, hang seng here up at the moment in the session and that is currently the state of play for hong kong. Lets move things along from hong kong to new york. Karina mitchell has the first word news. Good morning to you. The Trump Administration is turning on some of americas Biggest Companies, saying they are ponds of china. Attorney general bill barr says they are doing beijings bidding to amass wealth and are working at the expense of u. S. And western democratic values. He says disney and apple have been manipulated by the communist party into changing strategy to sibley make money. If you are an American Business leader appeasing the prc may bring shortterm rewards, but in the end the. R. C. s goal is to replace you corporations such as google, microsoft, apple have shown themselves all too willing to collaborate with the ccp. Karina the coronavirus continues its march across the globe with the u. S. And asia seeing new spikes and Record Numbers. Toppedinfections have 13. 7 million. U. S. Cases rose 2 with texas and florida posting a Record Number of fatalities. Colorado and arizona are the latest states to mandate the wearing of masks in public. Tokyo is reassessing virus a recordter setting and infections. Sparking fears that covid19 is spreading to the wider community. Hong kong reported record new cases the third time in a week that the new outbreak has breached existing levels. Resurgence has affected india is rapidly becoming the virus focus in asia. Cases nearing one million and fatalities rising above 25,000. The country stands third in the global tally behind the u. S. And brazil. The third consecutive day that infection rates have risen by more than 20 and thousand. 28,000. Brazil has topped 2 million virus cases as the virus ravages more remote areas. Tuesday so more than 45,000 new cases with 1300 deaths, taking the overall toll to almost 77,000. Brazil is second in the u. S. Only in numbers and has added one million virus cases in only a month. Infection cases seem to be slowing in big cities, but the rate is rising elsewhere. 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. Im Karina Mitchell. This is bloomberg. Haslinda lets get back to the markets. Asian indices are seeing modest gains. Selloff. Se stocks at a the tensions between u. S. And china continue and Economic Data continue in a long road. Good to have you with us. Talked a lot about signs of a bubble, valuations being a stretch. Monetary policy remains accommodative, so continue to buy stocks. Thinks forning, having me today. Conundrum bit of a between the market situation. The prices and also earnings. Coming through monetary policy. Markets are continuing to move into the equity market space. I think this kind of situation is likely to continue. There could be a bit more volatility. Turning a little bit more choppy. You see this recovery pace in terms of the Economic Data. I think that is going to be a bit of a situation that is moving forward. Haslinda how do you maximize returns . That is a very good question. It goes back to the fact that there is a lot of uncertainty. I think even as we know that , it is a lowon bounce back the markets. It is potentially going to be the case. Itself it is seeing across. I think as you look at covid19, that is going to be a lingering theme still in the second half. The covid19 beneficiaries. That being said, i think it is coming through for us and these covid19 beneficiaries. We have a headline right now saying that Foreign Holding in china bonds and stocks increased 72. 9 billion in the first half, lets talk about that market. It is redhot. There are conflicting signals from the authorities, then warning them about the dangers of where the level is right now. What is your take . Of a hot and cold situation. I think it is also the kind of markets. Ith chinese the sentiment of the market, i , lastwhat we have seen , alsond also this week this reflection of caution coming through. As much as what we have, some surprise particularly. Attention toaying not see the rallies. What we have seen in chinese been on it has really the policy side. Something that the private alsor, it is sluggish, improving another conditions. There is altogether this expectation that more support will come through. I think that over the longerterm, i think they are likely to benefit a little bit better than others in this case. Monitoring. Heread just a quick one about growth versus value. Growth has really outperformed. Does it continue to do so . Do we see rotation taking place . We saw that overnight on wall street with tech being sold off and going into some of those companies, which have really lagged. Think pretty much with regard to the situation itself, i think rather than , we seeuts too much ones that are likely to do better. The fact that the u. S. In particular looking at quite a bit of this infection situation reignited across the area. Caution. Here is the elevated prices see a little bit of caution. Market should actually come down a little bit, i think these stocks, tech and health care, some of the staples, ecommerce, these are the ones that are still likely to benefit a little longer from the change of behavior. I think if you look at who are the ones that are going to bring in earnings, these are the ones market. Ng into the these are the ones that do better. Rishaad the question of the day from the mliv team. It is definitely an interesting one. I think deviating a little bit is aboutquestion, it how markets view the election. I think so far there has been quite a bit of discussion china, tryingnd to take a little bit stronger line. Think in the end, that is something that is an expectation. Markets andg asian , it isd above hong kong these views. Markets have taken it, so i think there is this progressive pricing in markets for the likelihood of this reality. I think it is something that might be a bit more reduced in bes case and it could changed to something more relevant coming through, but i think that seems to be the case now get now. Rishaad thank you. Approval for a 1 billion hong kong listing, tigermed. Set to win approval for this 1 billion hong kong listing. We have some of the companies coming onto the board here in hong kong. Still to come, vaccine viability. We are going to hear from the cfo of Johnson Johnson joining us on our discussion as to the damage being done in china by flooding. About Morgan Stanleys best quarter ever. Next, we dissect the latest data on u. S. Jobs and the physical response to the pandemic. This is bloomberg. S bloomberg. United states seeing more evidence of a surge as the labor market shows signs of work. Promising to maintain aggressive monetary stimulus as it says spending is sorely needed as well. That . Tter to answer what is the latest report . Especially the unemployment data , the unemployment level being actually lower then continuing claims. There is a disconnect. It is normally different. It is interesting. You can step back a little bit further. Sople are not finding jobs, continuing rates remain high, spending so much money. Jumpingales in june back at prepandemic levels, even though jobless claims came in a little bit lower. A couple charts to show you. Lets start with the bad news. What you are seeing here are the white bars. Overd been averaging 200,000. From 1. 31. That is not so good. The bottom line for continuing claims, that is around 17 million, but when you look at retail sales, they came in much stronger than accepted expected. The green bar is the monthly number of 7. 5 . That was already kind of eyepopping. Downoveryear, after being 20 yearoveryear in april, retail sales were down just 5. 6 in may, but they are back in positive territory. How can we get back so quickly to a prepandemic number of things are still so bad . The Homebuilder Sentiment index redhot. Definitely a lot of people still out of work. A number of people still working and they are still spending money. The ecb Crystal Clear it is keeping its policy foot to the stimulus petal. What else today say . Kathleen basically, Christine Lagarde said it is not enough, even though we are doing everything we can do. Apparently the reporting shows it is all the ecb Board Members not in line with Christine Lagarde, but she says we are going to spend our 1. 3 5 trillion euros of bonds, committed to getting this economy out of the pandemic induced ditch. She says the ecb want to constrained against the fight against the virus and ample stimulus is still needed and she urged the eu to pass the recovery fund. This was deliberate. She is sending a message that you must do this. Here is what she said. An ambitious and coordinated fiscal response remains critical. In view of the sharp contraction in the euro area economy. Urgesverning Council Strong and timely efforts to repair the economy. It is important for european leaders to agree on an ambitious package. Eu leaders are going to be negotiating this 855 million euro recovery bond. Out 1. 2 to hammer trillion budget deal. Deal for them to come together on this. What does it mean for the Global Recovery . China came in with a decent secondquarter gdp number. Great story on the bloomberg today suggesting that the recovery doesnt just depend on the chinese domestic economy. China, other exporting nations need to see the rest of the world recover. These countries are going to sink them swim this Pandemic Recovery together. Rishaad kathleen hays, our global up and in next and policy at it economics and policy editor. Tsmc raising its fullyear outlook. We will be asking how it is able to shrug off the pandemic in the huawei ban. This is bloomberg. Resuming ahares rally after the Company Raised its outlook. Lets get more from our Bloomberg Opinion columnist in taipei. Why hasnt tsmc been hurt by the huawei ban . Are aput it simply, they large client of tsmc, but there are a lot of other clients out there. Losing huawei is not a good thing, but there are many other companies that are willing to fill that slot. Tell me something. One of the key drivers for the chip industry this year, what are they . Tsmc and is making other companies optimistic, they actually raised their forecast of revenue this year, expecting revenue to rise more than 20 are sent it is 5g. Andn the network side inard later in the year, 5g handsets. That is the first thing. Another one is ai. Highperformance computer, ai graphics chips, things used in facial recognition, that kind of stuff. There is a lot of this stuff that is may be from the macroeconomic problems right now. Haslinda is there a sense that semi conductors are recession proof . It definitely the feel right now. Conductor company, that nothing can go wrong for them. I very close benchmark to gdp. It is a new thing, a new cycle, a new generation. Ai it is big, booming just a oneoff. Talking about tsmc. Mixed markets across this part of the world. We are looking at chinese lunch break at the moment. Japan is back after this break. 49. 50 i found you good job. Now im gonna stay here and you go hide. Watch your favorites from anywhere in the house with the Xfinity Stream app. Free with your xfinity service. Now any room can be a tv room. Stream live tv, on demand shows and movies even your dvr recordings. Download the Xfinity Stream app today to stream the entertainment you love. Xfinity. The future of awesome. Is a must 11 30 a. M. In singapore, we are in the middle of the trading day. The msci is in positive territory. Singapore exports for june beat expectations, coming in way faster than forecast get ones that we are watching today, aem. It has risen 53 this year. Intel as its main customer. Accounting for over 90 of its revenue and that stock continues to rise, up about 3 to date. Now, lets get first word headlines with Karina Mitchell in new york. Liona ok, we start in the city. Singapore says its Economic Situation remains dire as covid19 upends Global Demand and supply chains. The Monetary Authority says it is unclear if confidence will be restored as long as the virus remains in society. Gdp plunged 40 in the Second Quarter. The government expects the economy to shrink by as much as 7 this year. The Republican Party is planning to scale back its Convention Next month as virus cases in florida continue to rise and some leading figures say they wont be attending. Only Party Delegates will be allowed at the event in jacksonville, when President Trump well accept his reelection nomination. The decision will cut attendance to about 2500 people, well down from the usual tens of thousands. Sees an has scandal , freezing 1 million. The scandal has sparked Global Investigations over claims 4. 5 billion have disappeared from 1mdb. Tension looks set to rise further on the korean and insula with seoul opening an investigation into the sister of kim jongun. She ended top north Korean Military official are facing a probe into the destruction of the joint Liaison Office on the northern side of the border. The complex was seen as the souths most concrete achievement in attempts to improve relations. 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. Rishaad thanks. We are going to go back to the coronavirus. Now above 13. 5e million. Asia, hong kong and japan are seeing Record Numbers. Lets cross to our Senior International editor. Kong, we did have a feeling the virus was contained, but those feelings were misplaced. Tell us about what is happening. There is certainly no good news right now. We are seeing places like manila , which had a lockdown and it return to a lockdown, same thing in jakarta. They are keeping their social distancing measures that were set to expire. In japan and tokyo and in hong kong, things seem to relatively good. Are seeing locally transmitted cases. They are not just from people traveling back. Measures are now being reimposed. Everything after 6 00 p. M. , restaurants and bars. Fines for people who dont wear face masks on public transportation. We are seeing an australian out real concern, New South Wales is going to further tighten restrictions. The second most populous state, victoria, recorded it second day of a spike in cases. Wave ofpped by a second infections. Or a second and third wave. Haslinda what about india . The virus seems widespread. What is the latest . What is the government doing this to mark doing . They have already hit the one million mark. This is a place that had a very, very strict lockdown. People were famously walked home to their villages. They were just starting to feel like they had gotten ahead of this and now theyre really does seem to be no end in sight. It is really hard to contain them, such a large country, such a large population. India is one of the real concerns in the region. Rishaad we have britain come of the u. S. , and canadian government alleging russian state intelligence is hacking developers trying to develop a vaccine. What do we know about this . Have any of these vaccine programs been setback . That is the real question. It is unclear whether they have been damaged or whether the vaccine programs have been back as a result of the hack, but officials are warning the cyberattacks are ongoing. It is a real concern. The u. K. , u. S. , and canadian governments have all u. K. Particularly the being seen first, they are being targeted by this group, how the russian state intelligence. The real question is does this really affect the vaccine production or testing which has been Going Forward . This is one of the bright spots we have seen go ahead. The question is how much has this been affected . Haslinda Senior International editor Jodi Schneider in hong kong. Staying with the coronavirus, Johnson Johnson says it accelerating development of a vaccine, based on preclinical data it plans to publish soon. The cfo told bloomberg he expects human trials to launch next week. You know, since weve announced our lead candidate for the vaccine on march 30, weve made great progress, so very shortly we will have our preclinical data published in a very prestigious scientific journal, but we have so much conviction and confidence based on that data that we are able to move into trials for humans starting next week, next wednesday to be specific. It is going to be better than 1000 people, ranging from the ages of 18 to the ages of 65 and beyond. We will be studying at as a single dose, as well as a prime plus boost regimen. Some really good options. We are in discussions to see if we can begin our phase three data and trials at the end of september. That would also be ahead of timelines. It would measure the vaccines effectiveness. Good morning, guy johnson in london. You are going to do it on a nonprofit basis. Can you explain to me kind of what that in reality actually means . Yes, good question. We are currently working through our structure. We have a good handle on that. It is going to be dependent on the demand that comes through. We have an agreement in the u. S. , but we are also working with the European Union, the that foundation, others will determine what the notforprofit will be. What we think of be very competitive. We have so much transparency around that that we are willing to have that audited by one of the major Accounting Firms to make sure the people fully understand what notforprofit means in this case. Arem wondering, as you moving forward to a vaccine and thinking about scaling up, what are you missing . What is going to cost you the most money . What do you need the most of . Almost a 50 50 split in terms of the development cost, the scientific costs, the additional manufacturing capacity. Has ae a facility that few bioreactors. We have complemented that with manufacturers in the u. S. We are very excited about. Good partnerships off to a good start. It will be dependent upon the demand that not only the u. S. , but many other countries across the globe tell us they are going to need in terms of vaccinations. There are some that want to go about this in an underhand way. There has been a big story broken this afternoon that u. K. Authorities have accused russia of trying to steal details on vaccines from key companies, potentially such as yours. Have you had any problems . Have you had any issues with security around your vaccine develop and program . Is justthe news breaking as you just mentioned. I will speak more generally. Haveke cybersecurity and for a number of years. It is in the forefront of managements mind and our board of directors. I think a natural segue is Everyone Wants this vaccine. We want it now and fast. Who gets the question, the vaccine first . If you make an agreement, how do you protect . Produce asorking to many vaccines as possible. A position ton have hundreds of millions of vaccines to the early part of next year with the goal of achieving one billion vaccines. Our abilities in addition to those of our competitors, we think it positions the overall global marketplace and a good position. The fact that we have many shots on goal is good for the industry and society. Rishaad that was the Johnson Johnson cfo. A bit of breaking news in india. A company has appointed the chairperson. The formerreplacing chairperson stepping down as chairman. He will become the chief strategy officer. That is just coming through. This is bloomberg. Omberg. Rishaad some 20 Million People have been affected by flooding in china. He is terrence wong, senior director of apac insurance. Thank you for joining us. Just how bad are things . China expects for this year, china has been experiencing unusually intense rainfall in many provinces. Rainfall will be issues for several weeks in regions. It is consistently rising to the warning level. Early june. Ll from we dealt with severe floods in widespread regions of china. [indiscernible] regions have been adversely affected. According to the minister of emergency management, more than 30 Million People and more than 140 people have died. 2 million residents need to be urgently relocated. Management is also said [indiscernible] given the heavy rainfall yeah . Rishaad so, you can carry on. I just wanted to ask you, which of the companies which are likely to be most affected by this how much clarity as to what is going on in the ground will the claims actually give us . Terrence well, at this point of time there is no official statistic or estimate indicating how much insurance claims are likely to be. Localcording to the , losses aregulator more than 500 million as of july 9. Media, more than 3 billion. Areas and thected situation still developing in the rainy season is not over yet in certain parts of china to a certain extent the issue is going to further increase in the coming few weeks. If they do have the exposure, especially if they underwrite a deal, it could be affected. If we look at the rainfall from , severeal records floods occurred in 2016. It could be much more. Scale,ust look at the the scale is likely to be estimate is our that the overall claims are likely to exceed 5 million. That to a certain extent represents about [indiscernible] of the return in 2019. Haslinda so, would it warrant a review of the Credit Ratings of some of these Insurance Companies . Who is most at risk . Terrence i guess at this point in time it might be too early to tell as the claims are still developing. Do is tohat we need to closely monitor how the claims develop and which companies are in terms ofected the exposure in those areas. We think that those which have high concentration on the property, as well as in the region, could be affected. Extent, i think this is likely to be an earning , rather than to have severe implications for the insurers at this time. Haslinda there is a sense that there is a lack of flood analytics in china that could help insurers and reinsurers what is your take and what needs to be done . Terrence i guess if we just , at thishe arrangement observations, our [indiscernible] they are actively monitoring the wrist exposure risk exposure in the region. Accumulation, the risk exposure according to the underwriting capacity. If the company are able to find finethe find tune tune the risk exposure model, it could undermine volatility. Haslinda thank you so much for your insight. Week for big banks with the best for revenue even amid the virus. We will hear from james gorman next. This is bloomberg. Haslinda and we have confirmation from the government that india coronavirus cases have surpassed one million. It has been 24 weeks since the first case was recorded in india. Morgan stanleys are record profits for the Second Quarter after capitalizing on the feds extraordinary rescue measures to fight the pandemic. Total revenue rose almost to 13 billion, smashing estimates by 3 billion dollars, as revenue from fixed income and equity trading surged. James gorman gives us his take. James what we designed was a business that in times of severe and when markets are active in volatile, we would perform well. This is that crisis and that is what we delivered. I think it validates the strategy. It is our strategy. It is not for everybody. This is what we chose. We did not want to be credit heavy. Been a strong argument over the last week. We have heard from several ceos on this program that we havent fully realized the risks around this recession, that fiscal policy has made it more difficult to assess credit worthiness and there was going to be more pain in the months ahead. Would you characterize things differently . James for the economy, it is very hard to tell. Outbreaks we are seeing across the south and southwest, it is interesting to see how well people come back to their place of work functions it is too early to tell. We are not a credit centric institution. For us, it is less relevant. For the marketplace, until people get back to work, you were going to have Consumer Credit problems. Even Corporate America is starting to see bankruptcies at a much faster pace. The industry start to get ahead of the bankruptcies here . James i dont know that you can get ahead of it. It is a natural consequence, small and big businesses struggling when they havent got clients coming in. Look at the restaurants, look at all the Small Businesses, the hairdressers and the doctors and the dentists. Before you even get to big companies. That is part of why we saw financing and Companies Got ahead of that to build up stronger Balance Sheet in anticipation of these tougher times. I want to talk about the small customer given that the e trade deal is close to closing. At 340 times earnings, are they flirting with danger . Is this the top of the market . James if you can tell me when the top of the market is, i would be in a different business. No, the market reflects future expectations on earnings and that is what we have. Retail investors have clearly been more active. We have seen a lot of new investors coming into this market as we saw when you see whenever there is a period when the market is on fire, which it has been the last couple months. No, tesla should be based upon what tesla has been able to do and they have created an extraordinary company. I dont connect those two things. I dont expect to get a price target from you on tesla. Wall street has seen a huge amount of success in the last couple months. A question i get asked a lot, what is the best way of explaining that in a moment like this . How wall street has done so well in the last couple of months when the economy and the labor market is still pretty much on its knees . James i guess im not sure i would describe it as huge success, jonathan. We and maybe one other bank are the only banks to be their cost of capital. They have had huge revenues in trading revenues across the street, but they have had huge credit provisions. What the Banking Industry has done has been to support operations that needed support during this crisis. That provided the financing that led those let those Companies Stay stable and position themselves for future growth. The profitability of wall street is actually dramatically down in real terms. We have a different business model. That is why we performed the way we did. If you look at the Banking Sector, Small Business credit, corporate reddit, the bankruptcies i dont think there is a disconnect. I think the Banking Sector reflects the economy. Stanleys ceoan james gorman. Lets get a check of the latest business flash headlines. Netflix plunged by as much as 15 after providing a disappointing subscriber forecast. It expects to sign up just 2. 5 million new users in the third quarter. Compared with twice that number expected by wall street. Netflix also has a new co ceo. Fter promoting the attorney general of new york has launched a probe into the twitter hack the targeted public figures from former president s to billionaires. The highprofile bitcoin scam netted at least 120,000 in digital currency, but by shipping the money around online accounts, they hacker left in money trail. Twitter says no passwords were stolen and it could yet be an inside job. Rishaad ok, just having a look at what has been going on marketwise. Chinese authorities taking some steps to cool things down a little bit. It got fairly exuberant. Seeing what has been happening at the moment is just a normal adjustment. Moutai has had a fabulous year of it. The thing is, we have state that their products are often involved in Corruption Cases and used for bribery, given the high prices. It goes on to say that alcohol is meant for drinking, not for speculation or corruption. There we go. Taking some of the air out of it. Haslinda and that is it for Bloomberg Markets asia. Stay with us for the countdown to market trading in european markets. The best of daybreak middle east is next. This is bloomberg. Its pretty inspiring the way families redefined the word school this year. Its why, at xfinity, were committed to helping kids keep learning through the summer. And help College Students studying at home stay connected through our university program. 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