Infections heading towards 16 million. Hong kong says the situation is increasingly severe. Has extended the Wage Subsidy Program beyond september to protect the economy from fallout from coronavirus. Shery a quick check of how the markets are trading. We are seeing u. S. Futures kicking off unchanged. This after we saw u. S. Stocks rally amid encouraging vaccine news, this time from the university of oxford and astrazeneca. The s p 500 finished at the highest since february, turning positive for the year. Tech and discretionary stocks outperforming. The vaccine optimism sort of faded. We have a very Competitive Landscape that failed to impress. Risk was revived in the afternoon session following improved u. S. Infection numbers. California and arizona reporting a slow down infections. We still have that stayathome defense rate being back with strength. The underperformance from the russell 2000 very pronounced, while the nasdaq also finished at another record high. Take a look at what oil is doing at the moment. We are seeing pressure towards 40 a barrel. Oil has been treading water all month long. We are talking about this level for the entire month of july. We have those vaccine news boosting optimism but at the same time, infection rates and the wait and see stance of the opecplus i for Russia Partnership harming the sentiment around the crude price and the industry outlook. Lets see how things are shaping up for asian markets. Here is Sophie Kamaruddin in hong kong. Tuesday, futures are pointing to a tepid start. Kiwi stocks added one quarter of 1 . In sydney, the focus will be on resource players with production updates from bhp. We will also be getting earnings from south korea cosco. After moves on wall street related to vaccine development, watching stayathome stocks which recently lost shine in asia but that could shift with infection fears. In hong kong, thornys are warning of a potential lockdown. Today, we will be gauging reaction to news of seeking to list in hong kong and shanghai. Checking in on currencies this morning, checking in on the offshore yuan. Barrier which98 has cap gains this month. The aussie dollar testing 2020s above 70ding ahead of the rba minutes. With the compromise on the stimulus package, the euro is holding a twoday gain of 1. 14 while sterling has slipped to a twoweek low as a new round of brexit negotiations kicked off. Pulling up one more board. Sticking with bonds. The market is readying for japans 20 year bond sale this tuesday. The yield is staying above 40 basis points which could draw demand, but the result is expected not to be as strong as the recent thirdyear option which could steepen the yield curve again. Shery joining us now for more on the markets is the Portfolio Manager at gradient investments. Always great having you with us. Really interesting that the markets continue to move on these vaccine headlines. A lot of optimism, but at the same time, if you look at the rest of the rally since the march low, we only have around four of 11 s p 500 sectors in the green. Not surprising the bloomberg chart shows how the s p 500 has really been stuck in a very small range. What is this telling us about the help of this rally . That the health of the rally is really depending upon the health of the world. We you know, we have news on these covid vaccines. There is a few now that has passed a key trial stage but we need further affirmations. We need this together with widespread production and distribution. We are getting news that is positive in that area, but we really need the health of the population to help drive the markets higher. Shery what about the Fiscal Health or at least the fiscal stimulus we are getting in the u. S. And around the world . We are getting news that secretary mnuchin is calling for a stimulus package centered on those jobs and children going back to school. We have a little more info when it comes to the eu fiscal package. How much of this rally is being supported by those measures and what is the risk if we see a fiscal cliff . I think thatll, any elected official who votes against further stimulus package will not be an elected official after november 3. I think we are going to have to have bipartisanship driving another stimulus as we have seen parts of the u. S. , particularly the southwest, start to pullback on their economies in order to s beenthe covid that growing over there. So, we know i think the markets are pretty convinced that we are getting a stimulus. How much it will be, we dont know, but weve got to have something that carrie is us through election day carries us through election day. Haidi what then do you assign as risk when we eventually get there . Because we will have to get there eventually. Mariann im sorry, what is the risk when we get to what point exactly . Haidi tapering. Tapering both on the fiscal side and the Monetary Policy side. Mariann oh, the tapering, yes. I think that tapering will not occur until we have Significant Health progress. So then, i believe the markets will, you know, have a grip on an expanding, returning economy again. So, the risk will be really minimized. Do you see further opportunity within tech and Growth Stocks as we continue to see another record high for the nasdaq and tech still continuing to drive the bulk of this rally . Mariann we have seen cuts in that momentum a couple of times now. Last week being one of those periods. To stop aust so hard moving train. Doing very, very well. I am reminded of back in the day when we thought there was an internet bubble and we were two years too soon to call that. It should burst any day now. It is just really hard to stop the momentum thats going on on the tech side. Valueeing said, we think is very much apparent in the cyclicals and the industrials and materials. We saw an improvement in those sectors last week. We are steering people more towards the value side these days. Shery so that tech underperformance we have seen recently, this chart showing how tech is trying to make a comeback especially when you look at the ratio between the s p 500 tech sector against the s p 500. I do wonder what happens to those sectors that have been underperforming. Today, we have a trade again where we saw the big underperformance on the russell 2000. Will they ever make a comeback . Believers in the small and midcap side of things. Fewn, you have had a select really driving the s p 500 with the mega caps and technology typicallyhe pendulum swings only so far and they have to come back and people discover the value that exists on the smaller cap side and maybe this e smallcap doesnt have haidi Mariann Montagne there. Thank you so much for joining us. Coming up next, we will go deeper into the latest developments of covid19 and the new challenges. Plus, we are watching out for production numbers. Global markets analyst will be joining us to break down this outward data. This is bloomberg. Haidi you are watching daybreak australia. Karina china is warning the u. K. To abandon plans to expand theexpedition treaty saying statement is brutal meddling in the internal affairs. Beijing is urging london to halt what it calls comments on human rights are slander. Ties are already strained over huawei. Unemployment in Hong Kong Rose last month to 6. 2 , the highest level in 15 years as the economy reels from the coronavirus and escalating chinau. S. Tensions. The increase marks nine consecutive months of worsening employment data, an indication of hong kongs deepest recession on record. The competition of jobs is elevating the citys already enormous wealth gap. Hong kong is considering a lockdown is coronavirus cases surge, suggesting capacity of starting to run out. The city reported 66 new local cases monday with almost half unknown origins. Transmission of are widespread. The Health Department says lockdown becomes sustained possibility. Virus levels fell below 200 and tokyo even as rates spread beyond the capital. Virus cases are often lower on monday with hospitals closed during the weekend, so fewer tests are carried out. The abe government says new restrictions to stem the outbreak are not needed for now despite infections hitting a record of the end of last week. Global news 20 for hours a day on air and on Bloomberg Quicktake powered by more than 2700 journalists and analysts. Im karina mitchell. This is bloomberg. Haidi. Haidi we saw driving Market Sentiment overnight with positive development on the coronavirus front. Promising vaccine data from Oxford University and astrazeneca. Lets get more with robert. Explain to me, for the broader markets listed by positivity over vaccine progress. Astrazenecas stock is actually falling from a record high. Is it a mixed set of results and how do these pieces of data compare with the progress made by moderna and pfizer, for example . Robert the way to think of these is these are all very preliminary results. These are and i initial safety trials. If there was not a massive pandemic, the world would not be watching these stages closely. All the investors want to read things very carefully, how these early results predict how they will ultimately turn out in terms of whether they will work or not. The fact is, we dont know whether any of these will work or not and how well they will work or not. The only thing that will tell us that is a much larger phase three trial which is just starting up now and underway now for the astrazeneca drug and starting up soon for the pfizer and moderna vaccines. Those are thousands of people and those provide the real answer. These are initial safety tests. People are trying to read into them, how the given vaccine stack up but you can read into them what you want. Shery investors are also watching how many doses of the vaccine you would need for some of them. How does it complicate the manufacturing and logistics picture if you would have to give the entire world or large populations two doses of the vaccine . Liket yeah, so it looks in these first testing, a lot of people will need two doses and that is not unusual for vaccines. There was some hope because of the pandemic that you could do it in one dose. There may have been some hope with the astrazeneca vaccine. Now the most recent results, it looks like it will get better results to have a vaccine with two doses. That may have been one of the reasons some of the sentiment soured and the astrazeneca tumbled. It is more likely it is going to initially and that makes logistics more complicated. We are talking about a pandemic. We are talking about trying to vaccinate billions of people and talking about two doses. One and another a few weeks later and the protection would not kick in for a few weeks after that. That makes the process much more complicated, the logistics much more complex. That is especially true if you have to repeat the process all over again in a year or so. It makes it a complicated process. It is not really surprising but it makes it more complicated. Shery thank you. Robert langreth joining us from new jersey. Coming up, eu leaders edge towards a deal towards the Virus Recovery Fund as talks and extend into a fourth day. The latest from brussels next. This is bloomberg. Haidi European Union leaders are looking forward a deal and i 750 billion euro stimulus package as the fourth day of talks go on. Billionion euros to 390 and a compromise by the netherlands. Im trying to fight for european interests, strong European Union and a strong balance. All over europe to make the union stronger. We need solidarity now in times of crisis. We need to really implement and it is crucial. We want to maintain we think we have a legitimate agenda. Haidi maria tadeo is in brussels. Four days of talks. Are we getting closer to a resolution and how much of a compromise is this from where we were originally coming from . Maria we are now stretching into day five and it continues for another six hours. It is going to be a recordbreaking moment in the amount of time we have spent here over this one summit. We do understand we are entering the final stretch to get this deal that there is a path to a deal which should come in the next few hours. The grants which is really the problematic issue and the funds in the aftermath of the corona crisis was the sticking point. We now have compromise of 390 billion euros. That is below the 500 billion euros that was originally presented but we knew this was a tough negotiation and it was going to be watered down. We understand that the countries that receive this money now believe 390 billion is a good compromise. They actually believe looking at the different pieces of the puzzle, that ultimately, they are going to be better off if this is signed off today. For a country that has been very hawkish, they get a bigger rebate on the money. And this is probably good enough. We are headed towards what looks like a compromised deal in a few hours. Shery how high are the stakes what investors seem to have already priced in an agreement . Maria investors have price then a deal for a few days because the idea of a failure was not even an option. If you listen to Angela Merkel macron, all of them going into the summit made it clear there was no room to fail. This was just a matter of time. What i would say is that ultimately, the fact that there was no collapse in the talks, the fact the summit has gone on for five days does show european leaders want to get this done. The devil is always in the details. Shery maria tadeo joining us from brussels. The World Bank Says developing countries are bearing the brunt of the pandemic all out with many nations already struggling with enormous debt loads. The president told us what kind of relief is needed. Developing countries are under immense pressure because of the global recession. The economic shutdown in countries and the pandemic itself is still spreading through countries. This problemered with a lot of debt already on their books. Those of the problems we are trying to address as the recession deepens. And we hope finds the other side and we come out of it. In your distinguished career at bear stearns and as you build out the world best latin american coverage at bear stearns, there was a ne mechanism for challenges in the third world and emerging markets. Are the mechanisms they are right now or do we have to go to a debt suspension . Can we use the processes in em that we have available or is this a New Territory . I think we have to look at New Territory because the debt itself has changed. In the 1980s, i was in the Reagan Administration and there was a latin debt crisis that came from the dollar recycling. Oil prices have been high so the deposits andot of they would lend those to the developing world. The problem was they didnt get paid back when will prices went low. So it was a bank crisis because they couldnt, the Bank Deposits were a big fortune of the capitalization of the banks so they were critical. It was syndicated loans. This is quite different. There are eurobonds involved. Theres a lot more commercial creditors than in the past. Debtlso, the nature of the china is a much bigger player. They were really a creditor in the 1980s. Those two changes mean you have to look at a different process. What we are doing is a suspension of debt payments now. That is the official bilateral creditors and we are encouraging the commercial creditors to stop taking payments from the poorest countries. That is a response to the crisis. Tom you dont represent the Trump Administration but you were certainly selected by the president to take over this important task at the world bank. Great. He is going after other institutions. His own cdc. He is going after the world health organization. For all i know, hes going to go after the world bank. How should your institution respond to a president who is not an internationalist . David one correction i was not selected by him. I was proposed by him to the world community. I was happy to be elected by the board and governors of the world bank unanimously and it has been going well in terms of the changes we are making at the world bank that can help countries with growth, with Better Living standards, with all the things we are trying to do climate, education, health and down the line. Poverty is a big part of the problem. Wantf you boil it down, we to have International Cooperation among the various organizations, but the drive for growth has to come from individual countries. That is what we are trying hard to do at the world bank. We have Country Offices in almost all of the developing countries. Those offices work with the government to find out what will work best for the countries and then we can help fund it with grants and loans. The world bank heavily is doing grants which helps a lot with a net positive flow into the poorest countries. That is what we want others to do. It is hard to say you are going thatke a loan to a country is in the extreme poverty because where are they going to get the resources to pay it back . We try to shift the balance towards grants. That was the World Bank President david malpass. We are getting bhp output numbers. Fourth quarter output coming in at 413,900 tons. 26,322um output at million barrels. Iron ore output, a little more analysis as we continue to see strength in the iron ore market. But the chinese stockpile is going into expansion. Whether that can continue to drive Prices Higher or if that ia isre austral extending the flagship Wage Subsidy Program to stop the employment rate from going lower. This is bloomberg. Karina you are watching daybreak australia. The United States continues to be the epicenter of the global coronavirus pandemic as worldwide infections approach 15 million. Reported numbers rose to 3. 8 million in the u. S. With fatalities topping 140,000. A vaccine trial from Oxford University is said to show promise while pfizer has published positive data on potential treatment. The European Union is edging towards a massive virus Recovery Plan with a compromise on 850 billion deal. The arrangement reduces the total number of disbursements and includes new lowinterest loans to countries hardest hit by the pandemic. Talks have been going on since friday with benevolence unhappy with the way the initial program had been funded. South korea is central to the global tech supply chain but it is failing to keep pace with its largest customers. Confinedt is that the capitalization of all companies is now less than the market value of apple, microsoft or amazon. The cost compares with gains of 31 for apple, 29 for microsoft, and 60 for amazon. Has reportedve dam a floodwater record with another record river surge. At least 31 people are dead and as many as 23 million affected with the bill already topping 9 billion. The countrys Biggest Oil Refiner is planning to reduce production as some of its refineries. Global news 24 hours a day on air and on Bloomberg Quicktake powered by more than 2700 journalists and analysts. Im karina mitchell. This is bloomberg. Haidi, over to you. Australia will extend its Wage Subsidy Program worth about 70 billion aussie past september as it tries to protect the economy from the ongoing impact of the coronavirus. Paul allen joins us now with more. There will be some tweaks so what is being proposed . Paul all of this is central to the economic statement which we will get on thursday. Two programs. The first one is the wage subsidy scheme known as job keeper. Paid to 70 billion employers to keep employees in jobs. That will now continue until march when it was supposed to end in september. There will be two tiers. One for parttime workers, one for fulltime workers. Keptxact rate will be under wraps until we get that announcement on thursday. There was a concern, there was incentive for some workers to get back to work because some employees were doing better than being writerly employed. It did work. It slowed the rise in unemployment that sits at sevent 7. 4 . And the job seeker, which is effectively the unemployment benefit, that will stay in place until march at the current level. Shery we will be hearing from the reserve bank of australia as well. What can we expect . Paul phil low will be giving a speech, unambiguously titled, covid19, the labor market and balance sheet. We will get a few thoughts on stimulus, the future of the rbas bond buying scheme. The yield target has been stable. We will get some comments along the lockdown in victoria which saw another 275 cases on monday. Later on today, we will have the rba minutes. That is backward looking with all the policy settings that got held steady. We did get those remarks but the nature and speed of the recovery remains highly uncertain. To illustrate this, we have a chart reflecting the uncertainty. You can see new daily cases against the asx moving average. Theres a strong correlation between the rise in the number of coronavirus cases and the stalling of the risk rally. Uncertain times indeed. Haidi Uncertain Times indeed. Paul allen in sydney. Not so uncertain or getting increasingly a little more uncertain is the outlook when it comes to iron ore. We are getting the production and output numbers out from bhp coming through, talking about iron ore output from Western Australia for 2021. Expecting that to come in at 267 million to 286 million tons. Some interesting around chinese demand. It has been improving according to bhp, the worlds biggest miner and dominant in the iron ore space. Saying that the pace of the scope of the recovery will vary across countries but setting more encouraged about growth when it comes to china. Weve had pretty close to record numbers when it comes to the output levels for iron ore being produced and shipments going to china. Now some of that is coming into question, the robust risk of potentially coming unstuck as china is seeing a rebound after a long run of declines. Analysts say that signals more tightness in the market that had seen supportive prices and maybe starting to ease. We will get more on those bhp numbers and the outlook with Carl Capolingua. This is bloomberg. Haidi lets get you a quick check of the latest business flash headlines. Softbank is set to post 700 billion from a Credit SuisseFund Following the banks internal review of the conglomerates investment role. Admonish the inquiry last month after softbank was involved in several assets from u. K. Bank. Softbank also holds a stake in the company. Southwest Airlines Says more than a quarter of its staff has agreed to take leave, boosting the carriers effort to save cash. About 4500 have agreed to leave and another 12,000 are signing up for extended emergency time off. Southwest has been trying to avoid the voluntary job cuts and its 49 year history as the Coronavirus Travel restrictions ravage aviation. Indias Biggest Airline is to cut 10 of its workforce as the virus hammers airline and travel demand around the world. Indigo was one of the Fastest Growing airlines before the pandemic and had been seen as one of the more healthy carriers with enough liquidity to ride out several months of turmoil. Indigos decision will affect around 2700 employees. Chevron has agreed to buy noble energy for about 5 billion in shares as it looks the beef up the Permian Basin amid the worst ever crude crash. The takeover is the industrys first major deal since the pandemic struck in the biggest this year. It will increase chevrons crude reserves by along one fifth, along off the coast of israel. Shery here is how we are setting up for the markets right now. We have seen asian stocks being pretty mixed and lacking clear direction this week. We have the resurgence of the coronavirus pandemic, but also investors bracing for rampup and earnings reports throughout the week. Nikkei futures unchanged at the moment. This as we continue to have the japanese yen Holding Steady within that range, of low it did weekend so the most in two weeks against the u. S. Dollar at one point. Kospi to the downside. We are expecting south korea 20 days of delight july trade numbers later today so do watch out for that. Futures,omes to sydney 7 10 of 1 . We do have speeches by governor low. We also have the rba july meeting minutes. Kiwi stocks at the moment gaining or tenths of 1 . To thelets get back outlook. Bhp has just released reduction data. Lets go over to analyst Carl Capolingua joining us with analysis. Oil was look for commentary with regard to the rebound as well as the expectations of the recovery in china. They are saying investor activity in china appears to be a little more over recovery. Just taking a look at the inventory side of things. Weve had this really robust rally in part of that has been driven by the fact we have seen inventories in chinese ports falling every month this year. Now they are starting to climb. Does that tell you this rally we have seen across iron ore is about to come to a halt . Carl good morning, everyone. It has such a great run over the last month or so. Iron ore up about 12 and copper rised since march. Those gains are unlikely to be sustainable in the mediumterm. I think as you say, both copper and iron ore imports in china have recently iron ore specifically was not over the last week or two. They are still lower now than they were at the start of the year. And prices have been rising. I dont think that as much a major issue. Production is still pretty strong. That, up from the mid to low 70s in the last production report. Into the 90s now. Chinese firms are still pretty bullish and gearing up for higher production. You could argue that there could be some knock on effects from external economies from china and some low demand externally. That equals lower production of steel. China goods from Something Like 10 of steel exported. It is really about internal growth for china and that is looking pretty good. I dont think it is a major issue. Copper is more vulnerable to demand. Of products go out of china. Probably more vulnerable than iron. You will probably see relatively stable prices Going Forward but i would not be surprised to see a little bit of a pullback in copper as some of that supply from south america comes back online. Haidi you mentioned that. A big part of the Iron Ore Price story has been disruption from brazil. Are you still looking at the possibility of another major given the coronavirus there and consistent guidance and policy on how they are managing that with relation to the Mining Sector . Carl possibly. We are talking about, obviously vale reduced production by about 10 . All expectations at this stage is that that supply will come back online in the second half. Obviously, the covid situation over there, as it is in many other countries that are suffering at the moment. If you look at the cases in brazil, the trajectory is still not good. Notthe Mining Sector is necessarily a representation of the population. Companies are like cockroaches. They are hard to kill them. A lot of them want to survive and will do whatever it takes to do that. I think that is a red herring on the covid front. I think that supply will come online in the second half. Shery what is the latest we know about chinas inventories and how important the chinese economy will be when it comes to these Commodity Prices . Carl i think the chinese economy is going to be the major driver of Commodity PricesGoing Forward. I think the focus will be on china and chinese demand. Inventories for iron ore spiking up, not the right word, but they will move slightly higher to the last couple of weeks. As i said, they are still lower today than they were at the start of the year. I think with the internal demand story, china is still quite strong. Ee have seen a number of th fiscal stimulus mentioned. Oreont think i wasee m Going Forward and there is a general underlying confidence within the chinese economy now. I think that will be supportive of prices Going Forward. It continue to build. It is hard to see another gain for iron ore and a 40 gain for copper over the next three or four months. I think we will see prices hold firm. That is the key for a lot of these stocks. I think some investors potentially may be betting on prices dramatically falling. Prices will stay firm and i think the commodity stocks will be that with the cash flows largely unaffected on whats happening in the world, thats a big surprise. You wouldnt think that six month ago. We are going to have this great global pandemic, we will see maybe 5 Global Growth and not staying steady. And stable cash flows for the big miners. It is a bit of a cash cow story Going Forward. I think the market situation in australia, it is an alternative to resource stocks which is banking stocks. Hadnow banking stocks have a far larger impact Going Forward and that reason is why they have suspended dividends in many cases indefinitely. Still paying out dividends. There is no chance of them suspending dividends now. I think the numbers are on the table for the june quarter. Rios largely long expectations. Probably a little lower than i would have expected to get commodities extended. Shery quickly tell us about the Energy Exposure that the companies you just mentioned. Has the, obviously bhp largest exposure out of the three. More of the pure iron ore play. Metalsmore a diversified play. All three have large exposure. It released its guidance in terms of its broader Petroleum Production numbers, but only slightly. You could call it substantial. No surprise there. Going forward, they have longer guidance for energy production. But prices, you go to the last quarter, we had negative on crude oil. I think it is a pretty decent balance point. Shery thank you very much for joining us. Carl capolingua. We will have plenty more to come. This is bloomberg. Shery seeking evaluation of more than 200 billion between listings in hong kong and shanghai. Shares of alibaba close more than 3 higher in new york with analyst saying it 33 stake in ant financial could be worth 60 billion. Earlier, alibaba president Michael Evans spoke to david rubenstein. They discussed the impact of the coronavirus and u. S. China tensions on alibabas business. Michael people are always surprised when i sit down with the u. S. Government official and talk to them about what we are doing in the United States. In the become very supportive when they start to understand the impact and the scale of what is being sold by American Companies to the chinese consumer. And the may have had misperceptions of what we have been doing based on what other Chinese Companies have been doing. They are very supportive and they understand that is going to be our core mission in the u. S. Going forward. David many of the ceos with whom i have talked on the show say their employees are working remotely but some of them dont really want to come back to work until there is a vaccine. Or if theres a vaccine, they say i can work from home efficiently. Are your employees in the u. S. And china actually interested in working from home more than they did before . Michael the bulk of our employees outside of china and even in china want to make sure that when they returned to work, they can do so safely. That is a real prerequisite. But, all of us would like to be back in the office. The thing that we missed the most is that the ability to run the business properly and continue to grow it, but the interaction which is a huge part of our culture. One to one, in groups. You cannot really replicate that virtually. David the tension between the United States and china other than covid is often over Technology Related things. United States Government has said we dont want huawei to be used for 5g technology. I dont know whether your company uses huawei technology. I assume in china it does. How do you explain that issue to an american audience about why wait or about technology and the tensions . Michael i think it is hard to actively engage on that issue with our clients. What our clients really want to know is how can you help us, particularly during covid . But before covid and long after covid, how can you help us grow our business . The conversations i am having with ceos of hundreds of brands all the time is how was your business doing in china . The response back particularly in the last few months is it is going much faster than they expected. Part of that is the really rapid recovery which you have seen recently in the gdp results and National Statistics and Data Information on retail in china. But the other part of it is the repatriation effect of know Chinese People traveling abroad and spending money, those same Chinese People are buying products, those u. S. Products in china. So, many of the ceos see their China Business growing rapidly and they are pleased about that because it was not doing well in other parts of the world. David amazon has done so well in the u. S. , it almost does not have a number two competing with it. Does alibaba have a number two or are you so dominant just like amazon is in United States . Michael we have a never to, number three and number four. One of our Biggest Challenges is the need to aggressively and continuously innovate in order to stay ahead of our competitors. We like our competitors because we learned a lot about them, about things we should also be doing or ways to change our business model. But we have huge competition in china. It is a big part of keeping us sharp and allowing us to provide the Digital Tools to our merchants and the ease of doing business on our platform for consumers. David for a company like alibaba, the controversy going on in hong kong is not that relative because your core business is china and not hong kong. Has not produced any tensions within the company or problems for you . Michael we are a corporation and we are not part of the government. The geopolitical tensions and the tensions between china and u. S. Kong, or the china, and hong kong these are not areas we can resolve or have a Material Impact by us moving one way or another. We are sticking to our core strategy and our business and try to do that as well as possible. Haidi that was the Alibaba Group president Michael Evans. We are seeing aussie rally after beating the highest revenue estimates on the strength of this cloud sales. Su keenan is tracking this. We continue to see the cloud theme drive gains here. Su that really was the story and it helped offset the losses that we did see in Global Business and Global Technology services which make up about 56 of total revenue. The boost from cloud sales gave the stock a bounce after hours, as much as 6 . Ibm Second Quarter be the highest estimate out there and overall sales at 18. 1 billion. It was down 5. 4 yearoveryear but it beat the lowered estimate from analysts in a big way and that was 17. 6 billion. Cloud revenue increased 30 . That was the clear bright spot. Serviceshit ibm businesses howard. Many of the clients as with other companies delaying purchases to make it through or survived the pandemic. We are also seeing the new ceo who took over in april spearheading ibms third major transformation toward the Cloud Services in its 109year history. He says he believes client see the value of the cloud and has confidence overall. Shery su keenan the latest on ibm. Coming up, we discussed the volatility in the market with Franklin Financial Services chief market try to just brett ewing. Japans data is due at the end of the hour. We have the outlook for the japanese economy. Plenty more ahead on daybreak asia. This is bloomberg. Hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. Touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. 49i 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. Haidi a very good morning. I am haidi stroudwatts in sydney. We are counting down to asias major market open. Shery our top stories this hour, asian stocks look set for gains after a tech rally lifts u. S. Markets to their highest since february. The s p 500 is positive for the year. The nasdaq 500 hit a record. Investors welcome optimistic news of a vac