Performing significantly better than europe, also pointed to stock that has the u. S. Market gains against other countries. We will continue listening to the president and see if he has anything more to say. We are waiting on anymore comments from a u. S. Stimulus package, not to mention ongoing u. S. China tensions as we are getting close to that and of wecheck. Pps tiktok and quick check of stocks trading at the moment, u. S. Futures holding flat after u. S. Stocks surged briefly to a record high, reachedthat 3386 level february 19, before the pandemic. The s p 500 closed 1. 4 percent higher, tech leading gains. Nothing specific driving the rally, Speaker Nancy Pelosi saying lawmakers are miles apart on another fiscal stimulus package. The s p 500 index saw the biggest jump in over five weeks, all 11 Energy Sectors rose. Look at what oil is doing at the moment. We are seeing it under a little pressure, headed to the 42 a barrel level, after jumping in the new york session to a fivemonth high after an Industry Report pointed to the Third Straight weekly drop in american crude stockpiles. Haidi lets get to our top story today as we continue to watch for more from the president. U. S. And chinese negotiators are planning to discuss progress with their trade deal in coming days, beijing pushing to widen the agenda to include the wechat. N on tiktok and chief Asian Correspondent Stephen Engle has the story. How fruitful can the talks be, we dont even have a date, just expecting them to be held by the middle of the month . Stephen yeah, we dont have an exact date. We dont have an exact agenda as well. We are hearing from sources in china that chinese negotiators are pushing for the bans on tiktok and wechat from tencent to be pushed into the agenda of talks. Aboutre also talking promises and pledges by the chinese of agricultural purchases which, due in large part to the pandemic, have failed to live up to expectations on soybeans and other agricultural purchases. But there are many other issues that have arisen over the past eight months as donald trump whened to just yesterday, he said maybe things have changed in the relationship over the last eight months, and maybe it is not necessarily something he wants to do now, a phaseone trade deal. Haseone trade deal. However, white house officials subsequently down played downplayed concerns that the faceone trade deal is in jeopardy. But it will be interesting to see where negotiations go, if they do happen this week or next week, which would be virtually, over some sort of platform, not facetoface. Whether issues of tiktok and wechat will be discussed in earnest, and whether any more clarity can be guarded from the stocks, because at everything yesterday in beijing, the Foreign Ministry spokesperson said chinas position on the faceone trade deal remains consistent. And he talked about tiktok. Platformtiktok is a for providing entertainment, leisure, show of talent and sharing that with the American People and around the world has nothing to do with national security. So it will be interesting to see whether the chinese can wedge those talks on tiktok and wechat into the broader, faceone Virtual Meeting that will happen this week or next. Wechat,hen it comes to concerns over what happens are completely overshadowing stellar results from tencent. Tencent boosted revenue at the fastest pace in a couple of years p also, profit beat the highest estimates on the bloomberg terminal. Eventives of tencent, though they said they werent getting into hypotheticals about the potential weto ban in the wechat ban in the United States coming up next month, they had to field question after question after question from reporters and analysts on the Conference Call about wechat. John low, the executive order comes at the executive order is focused on wechat in the United States and not other businesses in the United States. We are seeking further clarification from bipartisan parties in the United States, interesting comment there alluding to that there might be changes coming in november in the United States. But right now, a waitandsee process. But executives at tencent are also saying that perhaps this be in wechat would just the United States, not necessarily in china. Veryhat would obviously be concerning to Companies Like apple and google, where they say their business would be significantly her if wechat would not be offered on their various platforms. Shery Stephen Engle, chief north Asian Correspondent on the titfortat between the u. S. And china. Lets get first word headlines with karina mitchell. Karina apples top iphone suppliers as the days of china is the worlds top factory is over. Thely will move away from mainland and increasingly move toward southeast asia. The percentage of iphone manufacturing outside china has risen from 25 to 30 in june. Spokesperson says chinas days as the top production liner finished. Meanwhile, democratic ticket joe biden and Kamala Harris have made their debut. They said the election will shape america for years to come. Biden says there is no such a make hard calls and will energize the female community. Harris is both africanamerican and asian american. Their introduction was scaled down because of the coronavirus, the audience entirely journalists and campaign staff. The u. K. Government warns of hard times ahead as the economy drops into the worst recession on record. Data shows the decline is steepest among european nation, brexit adding to the virus fallout. Gdp plunged more than 20 in the second quarter, the most since records began in 1955 and record double and roughly the the fall seen in germany and the u. S. 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. Ahead, vaccine diplomacy. How should the world be dealing and the rush for vaccines, who gets left behind. We discussed with Asian New Zealand Foundation member simon draper. Outlook withket Institutional Services investors tiffany mcgee. S is bloomberg there this is bloomberg. You are watching daybreak australia. Withis sophie in hong kong asian markets. Futures closed the overnight session higher, chicago up more than 2 , starting the thursday session, we are seeing it Holding Steady so far this morning ahead of the thursday session as the yen weakens to one of seven ahead of 107 ahead of Producer Price data. Figures,ares, earnings a busy day with Companies Due to report and rebel already providing earnings updates. The region, other companies are due to report. Nzx 50, gains after the worst month, the than a kiwi dollar has recovered from the onemonth low it hit as, but below 66. Tilt aresay the dovish aimed at currency and bond markets and the kiwi is the worst performer so far this year. Gold has staged a rebound back above 1920 spot prices, and investors say this is a tactical blip or the start of a bearish run. Above 1930. Rising inflation has been a key driver for gold so far. As for the latest tbi trends, yields rise to july highs with the 10year reaching 50, and treasury futures have cap a fourday drop amid the rotation of bonds to stocks. As and p little changed after the benchmark closed six points shy of a record, the advanced led by tech, health care and utilities, names left out in the cold in the recent shift value. Pulling up the chart on the terminal, a warning sign flashing for markets as Retail Investors have piled into bullish Stock Options at higher prices, and that has pushed the 50 Day Moving Average of puts to calls out a 50 year low. Greed driving sentiment, especially for big tech names. Shery lets discuss was going on in the markets. We are joined by Institutional Investors ceo and cio tiffany mcghee. Great to have you join us, tiffany. Record, or still a does it matter how we get there, given that we were higher on cyclicals, we are going into value stocks, but now the trend has reverseds the chart on the bloomberg is showing how far ash stocks have gone as far the russell 2000 or other parts of the market . Tiffany thank you for having me. So therein lies the question, right . [laughter] like a lot of us in the industry, we have been talking and ifhis run of tech, it is overvalued and growth. And now we are talking about overvalued in growth. And now we are talking about growth. Institutions and foundations and endowments, we are not overgrowth, we are not over growth. We are still very much interested in growth. We are still very much interested in tech. Majorcause we talk about Tech Companies really driving the market, we are trying to use this old rulebook to figure out what they are going to do and how they are going to move, and if they are overvalued or too expensive. Anything we have to throw out the old rulebook, because we are in this interesting time where still still, globally, coming out of a pandemic, and some parts of the world still in the thick of this pandemic. But then on the other side, we , that has its foot on the accelerator pedal. And that creates a perfect storm, if you will, still with lots of opportunities. I believe in this current time, there are lots of opportunities for companies outside traditional tech. But you have to be tech adjacent. , andave to be innovative you have to be really forward thinking do not just survive in this market, but to capitalize. Nd grow shery what are companies that are doing that . I like isne Company Called purple innovation. I am not focused on stayathome stocks anymore. I am focused on companies that were wellpositioned to be for this pandemic, tech savvy companies, and purple innovations is one. It started in about 2016 as a mattress company, they didnt sell their mattresses in stores, they focused selling direct to consumer through their website and on their online channels. So when a pandemic hits and everybody is at home and trying to beautify their living space and make it more comfortable, apparently they were buying mattresses. When you look at that, that stock is up over 150 on the year, 97 the last three months. I look at the threemonths and evaluate companies on the eriod, and that is smack dab in the month of the spent in the middle of this pandemic. I think that is very telling. And purple had a sleep number that really relied on instore sales and instore presence, and that is down 9 for the year. Thei so you still assume wreck and mortar retail, traditional structures of that into assume the brick and mortar retail, traditional structures of retail, will continue to suffer . Tiffany yes. I do. And it is more than just whether you can survive in a pandemic. I think purples strategy, weight before we knew a pandemic was coming, was always this forward thinking, Digital Strategy heavily related to attack. Related to tech. They even have an app that you can control the mattress with. That tells me how forward thinking they are. So i am looking for companies that are forwardlooking, and the pandemic is giving us more data for those companies. Haidi Institutional Development servicesInstitutional Development services. Winemaker , the winemaker, looking at a fouryear adjusted, earnings just shy of four cents, net 260 Million Dollars and fouryour revenue at 6 billion. Last year, we heard about positive signs of recovery in consumption in china and will get more on that what the end of the week with more data out of china. They had said that sort of recovery when it comes to retail sales, they had fallen more than 50 during the pandemic lockdown in february and march, but recovered in april and may. We are also getting earnings out of woodside as well, underlying profit, 303 million. We will get more from tim ford, treasury wind estates, joining us at 1 40 sydney time, 11 40 hong kong time. We will also be speaking with Peter Coleman from woodside as well, to get his views friday. Lots more to come. This is bloomberg. Officials fed criticize that washington response to the coronavirus, saying failure to curb the pandemic is undermining the u. S. Economy. Unflattering comparisons to the experience of other regions, telling us what policymakers are doing to tackle the issue. There will be an appropriate time to have more guidance. At this stage of recession and the pandemic, that guidance is probably only mildly helpful. And the reason is that the longterm treasury rate is quite low, Interest Rates are quite low, and in that environment, i think people are already assuming it is going to be quite some time for Interest Rates rise again. So while it might be marginally helpful, i would say our lending facilities and some facilities run by the new york fed, are probably providing more support because they are getting at the cost of funds to individuals and businesses that are more important than what the outcome to the economy would be. I want to talk about lending programs, chairman powell notasizes the fed can lend, spend. Is that the wrong prescription for the economy . Your lending programs have not seen a lot of take up. They have been quite effective. The announcement of our willingness to buy corporate securities frankly pushed those Interest Rates down, and as a result, you didnt need to buy much because the market reacted. I would say Credit Conditions are much better than they were in more in march and april, because of the federal reserves actions, and that has been an important stimulus to the economy. In terms of spending, that has to come from fiscal policy. Economyonomy see also benefited from the quicken significant stimulus provided, by both providing better and broader unemployment benefits, checks to lowincome individuals, all those things have been very helpful in preventing particularly making individuals spending decisions over the spring in the summer. Many of those programs ended at the end of july. The pandemic has not ended. So we need stimulus and fiscal policy to continue. That is critically important that Congress Come up with some kind of agreement to continue to provide support. Have you modeled the impact from the end of the fiscal stimulus . My personal assumption in my forecast is that some additional stimulus is going to occur. It would definitely be bad news for my forecast and the economy if we dont do additional stimulus at this time. Mainstream program is perhaps the most controversial. According to your figures, 800 56 million in loans and the system. But it is a program that could do 600 billion in loans. Does that suggest modifications are needed for the main Street Program . We have already made a few modifications. We came out with a revised term sheet and then it was revised once again to make the probe ram broader and more accessible to a wider range of smaller businesses. We have also opened it up to the nonprofit sectors. Banks are perfectly able to start negotiations with the nonprofit. It takes a long time to actually negotiate a bank loan. So it doesnt surprise me that we would start gradual and that would it would pick up over time, and i think that is exactly what we are seeing. One reason we are seeing a lot of lending coming from community banks, midsize banks, is because they are more flexible and able to adapt more quickly. I expect larger banks, over time, will start using the facility more. The goal is to make sure that business is actually needed 10 were creditworthy in february and had cash flow disrupted and are likely to be viable business is after the pandemic is over, are able to get that kind of cash flow financing. And we are seeing a pickup in that activity. I expect that as borrowers and banks get more familiar with the program, we will see increases. President ericed rosengren. Fed is more concerned about the failure of the government to rein in the virus and the threat it poses to the u. S. Economy. Bloomberg Global Economics and policy editor Kathleen Hays is here, start with a jump in prices. Kathleen once upon a time, people worried when they saw inflation, but especially after pandemic, you see inflation and signs of prices coming back, and you think it is a good thing. Cpi in the u. S. Has quickened, clothing prices on car prices leading the way, the u. S. At a monthly basis 0. 6 in july for the second month in a row. This chart is core cpi which takes up food and energy and a blue people away because it posted its biggest monthly gain of 0. 6 percent, biggest monthly gainsince 1991 on top of a of. 2 . Previous months had pretty big declines. But it suggests a rebound in demand. People were locked down and didnt spend for three months, past two months they have been spending. Inflation is starting to rise. Eric rosengren just said he is not worried about inflation with unlimited 10 . If you look at another chart, you can see that inflation, when you look at the headline number or the core number, far from the feds 2 number. Broadly speaking, rosengren and two other fed officials said what concerns them is that the virus isnt under control, and the threat that poses to the u. S. Economy. Our Global Economics and policy editor Kathleen Hays. Up next, new zealand investigating the possibility that the first virus cases in more than three months were imported by freight. We get details ahead. 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. He scores stanley cup champions touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Breaking numbers out of evolution minor, evolution income 301year net Million Dollars, issuing final Dividend Per Share just shy 10 australian cents, underlying profit for the full year coming in at 405 million. Badly the stock falling in the last session, down the most in 11 weeks. We will see how investors take that today on the back of record higher gold prices. Yesterday, we also heard about the evacuation of their red like mine in ontario, which is expected to be making up for soft output in Australian Mines due to a nearby fire. But foryour gold output has been pretty good at we are just getting those numbers through today. More about will hear the reflection of the gold price rally. We will speak with ceo jake klein tomorrow, so stay with us for that. Lets get first word news with karina mitchell. Table china says it will President Trumps band on tiktok and wechat when the two sides resumed trade talks this week. White house aide larry kudlow says the deal is working so far, however chinese purchases of u. S. Goods are behind schedule and deteriorating over the coronavirus and tech security. Another leading hong kong democracy activist has been released on bail and says she wont stop speaking out. Agnes chow was held with those held with others under the new chinese sweeping security law. She says restrictions include the surrender of her passport. The Hong Kong Justice department failed to say why she was arrested. A report says President Trump wont have a chance for new nuclear deal in iran if he is reelected. There will be no reversal of policy. Trump said he expect a breakthrough with iran if he were to win. The u. S. Will reportedly have to compensate iran for sanctions damage. Global news, 24 hours a day, on air and on bloombergs quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im karina mitchell. This is bloomberg. Haidi. Facilitycold storage in the biggest new zealand city is being tested on concerned the coronavirus may have reentered the country in revert rate in refridgerated freight. After more than 100 days of no community transmissions, it is unclear how the virus reemerged. Paul allen joins us. What are authorities looking for . Investigators closed down this cold store in south auckland. One of the new cases is an employee who works there. That facility is closed, testing is underway of all surfaces they are of health in zeeland points out the virus can survive in refridgerated environments for quite some time. So maybe it is refridgerated freight that was the origin. And because they are out of other ideas right now, this is a genuine mystery. None of the family who tested positive works with anyone who tested positive, and up until now, that is where all the new zealand cases have come from. So a real mystery here. Shery any evidence the virus is spreading further through new zealand . Is reportedh case this morning, a student at a school in auckland. It was a classmate from one of those four family members who tested positive. So 100 contacts at that school have been told to selfisolate. In three people that a finance company in the city where one of those positive cases also worked are now showing symptoms. But there is concern it could go further still because to members of the family traveled to a tourist hotspot while positive without knowing it. So there is a strong chance this has spread a lot further in auckland. And the director general of health says he cant say how many cases there might now. So auckland is under restrictions for three days. It is possible that could be extended. The Opposition National party is now saying the election should be delayed from september to november. They have selfinterested reasons because they are trailing in the polls, but at the same time, it is very difficult to conduct a Fair Election when nobody is able to campaign. Shery paul allen with the latest on new zealands spreading coronavirus. Up next, nations are growing increasingly desperate for a coronavirus vaccine, turning the drug racing to a highstakes game of diplomacy. We speak with asia new Zealand Foundation director simon draper about the risks. This is bloomberg. You are watching daybreak australia. A slew of us trillion earnings, lets get over to sophie in hong kong. Some ofbusy morning, the companies that reported so earnings, 52 ith year on year drop in the first half underlying profit and announcing plans for a Share Buyback of up to 200 million australia. Plus, amp is buying a stake back in its Asset Management arm from japan as the manufacturer continues its overhaul. Results coming in with guidance, bottom of the range, final dividend of eight cents australia. Over at goodman group, fouryear net profit falling nearly 8 and for your operating profit did meet estimates. Flight center expecting to report underlying loss for , before tax of 875 Million Dollars australia. Producerard, gold evolution coming in with a full years earnings beat in earnings at 38 beating estimates. Also northern star, targeting golden Australian Mining operations and woodside were hoarding annette loss first half hundred ilion dollars, off 17 year on year during that time. Lng price weakness and oversupply have been a drag. And agl Energy Reporting 22 , meeting estimates but guidance for 2021 will see material reduction in wholesale gas and electricity. Scientists and governments around the world are in a race to develop a vaccine for covid19, countries throwing millions at the program and intending to put their citizens first. Health officials are warning against socalled vaccine nationalism. Our next guest says countries after work together. Simon draper is the executive director of the asia new Zealand Foundation and joined us on the line from washington. Interesting topic we have seen develop with deals between big pharma and governments to secure supply, even as we are at least months away from solid data about how effective and widespread and useful 90 vaccine can be. Tell us out widespread and useful any vaccine can be. Tell us about vaccine nationalism . Are trying toes secure the best outcome for them and there is a sense of nationalism, getting a fair stake, what is good for our citizens, and being very driven by political process. But what history has taught us and taught us well is that there is a false economy in this. Thatveryone, it is better as many people as possible get this vaccine. , andwe need is a system traditionally it would be the multilateral system where countries contribute, they share the benefits and this is good for everyone. Because if we dont do it that way and one or two or several countries keep the vaccine and essentially keep it to themselves or price it out for everyone else, they are going to pay anyway. They are going to pay through humanitarian closing of their economies and other bits and pieces. So the thing we are seeing is that traditional diplomats, people who know the failure of the multilateral system, are feeling frustrated that we have used the multilateral system to eradicateth and polio, ebola, smallpox. We have done it before and we know that it works, but geopolitics at the moment is driving us into a sort of nationalistic stance that may make us feel comfy but ultimately is a false economy. Erosionhere is also an of trust, 160 vaccines or so underdevelopment read it is hard to see how the u. S. And china and russia would come together to be behind one single project, but i am wondering, when you look at the likes of china already making overtures to emerging countries, poorer nations, to say, we will give you the money for securing your own vaccine supply, or we will give you vaccines once the chinese one is done, is this the new soft power we are looking at . Simon yes. Historically, this is what powerful countries have done. They have dangled these opportunities are said, we will come to your help because we can. And it is not what i would call heart what i would call soft power, it is hard power in many ways and seeing that play out ultimately is not a good thing for anyone. There is also the fact that there is the words, we will do. When push comes to shove, our country is really going to deliver. And anyone who sort of relies on that bilateral onetoone is exposing themselves. Deal with these things is frustrating, slow, complicated as it can be, is through the multilateral way because that is how everyone gets a fair share. My caution would be to any country relying on a bilateral relying bilateral on a bilateralism, it is clearly the multilateral way works best. Shery is there any organization that can help in an shoring equitable access to medicine and medical supplies . And should there be one . Simon my personal belief is that we have such a proliferation of institutions at the moment, we dont eat more. That is a problem, particularly for smaller problems like new zealand and others, to engage with them, there is so many of them. What we need is leadership. It could be any number of organizations that could pick this up. It was the ebola, Security Council and the g7. There are plenty of organizations out there. The missing ingredient is leadership, the Clear Communication that central communication, that Central Depository where people can go and as i look around, that is the missing piece at the moment. Who are you looking for in leadership, and political leaders are generally focused at the moment. That is the worrying thing for me, that absence of global leadership. We are used to the u. S. Doing this from 1945 on, but i dont see it at the moment, and that is the biggest concern. Shery could china take on that role . Have heard from chinese president xi jinping that there vaccine, if they develop one, would be universally available. Simon there is this absence of trust at the moment. No doubt, around the world at the moment, the absence of trust is something that we are all feeling. If you look at what happened in new zealand recently, the fact that people had faith in the institutions, Clear Communications from the prime minister, good signs and central control, that was part of what enabled us to get on top to a large degree, of covid19. The certainly china has capability, the power and the reach, but it doesnt have the trust. And that is the missing ingredient at the moment. I am hopeful that they could do it, but there is a trust deficit globally at the moment. That is fine if you are a superpower, russia, china, the United States or the u. K. , but what if you are a middle nation, the likes of australia and new zealand, what is there for ensuring we have a supply when a functioning vaccine is available . Simon that is a really good question, and this is the real politics, the hard part of this. The reason countries like australia and new zealand and others have been using the multilateral system is because works for us, it is good for us, it is not out of some rod, humanitarian, good citizen thing. It is because those sorts of systems, the ones we share, the multilateral ones, are the ones that are most effective for us. Toent that, we dont want get something bigger than our neighbor and we are all going to be bigger than our neighbor, that is what dprk is, and it is not working out well for them. At the same time, political leaders have gone, we want to get this vaccine, it doesnt matter how, we want to get it. So what you are seeing is this tension amongst policymakers. On one hand, they want to be seen contributing to the multilateral ongoing effects, but they also want to hedge and do big deals with producers of vaccines. And that is understandable, but it doesnt really help. Medium tofor all smallsized countries is to put their shoulder to the wheel on those multilateral systems, make them work better. They are only as good as the Member States that contribute to them. So that will be the best for the nonsuperpowers. The best thing for the superpowers is to divide and conquer. The best thing for them is to pick off little countries and have these power games, but that is not in our interest. Hw zealand is talking with think tanks across asia at the moment, and all our thinking the same. Own are all aware there governments are hedging, but they are all encouraging them to put their Political Leadership and their money into the multilateral system, because that is the one that will work asked for us. Great tomon draper, have your insights, thank you, asia new Zealand Foundation asia new Zealand Foundation from the thank you, from the asia new Zealand Foundation. How cisco is feeling the bite. We look at the numbers next. This is bloomberg. Declinesamatic sales due to the pandemic and certain outlooks. That is the theme from a trio of airbnb, lyft and cisco. Lyft and cisco reported after the bell. Ft is paralyzed by the pandemic, but not as bad as we thought, after hours shares up as much as 4 before falling back on the dire news. Cisco falling significantly on its weaker outlook lets get to the numbers on lyft. Did beat the expectation of analysts on average. They were expecting a wider loss i should say lower revenue and they were expecting a much wider loss. To 37 tohy didnt 280 Million Dollars, again much better than expectations of analysts. Uber reported similarly dire results in the prior week, but they were offset somewhat by uber eats, the Food Delivery Service that has been in demand in the pandemic, which many point out does not have that same ability. But again, it did report a recent pickup in writer demand, which many thought was a positive in the report, again not as bad as expected. Moving to cisco, they are feeling the bite of the recession. Their lackluster sale forecast is the side that a lot of their smaller businesses and Government Agencies that use their networking systems are spending a lot less and in fact delaying hardware related sales which fell 16 . The ceo pledged to reduce expenses by 1 million and are projecting revenue will fall 9 to 11 from a year ago the first fiscal quarter, a lot bigger drop in revenue then was forecast by analysts. ,su, lets look at airbnb reporting that sharp drop in revenue, but it says it still plans to go ahead with its ipo. Su yeah, clearly a note of optimism from within. According to people close to the matter, because the company is private, airbnb saw profits tumble and lost its amount. Revenue fell to three had to 35 million, according to sources. Down at least 67 from the 1 billion reported in the year ago period. People close to the mattress a the ipo is still on track for the end of the year, and that airbnb did see a pickup in demand toward the end of the quarter. Back to you. Haidi bloombergs su keenan with a rep of overnighter earnings. Tonging eating habits due economic factors from the coronavirus pandemic or boosting business, according to a source. The companyomberg is changing where it spends its money. People are eating at home because of the pandemic. They dont want to go to restaurants. They are working at home more than before and in times of recession, people switch from restaurant at home eating. We see the confluence of those factors but the near term is about the pandemic once we get that under control, the economy is still going to be in rough shape and that would favor more communities eating at home. And they are baking and cooking more than they have before. How do you keep people interested though . Many other people are feeling it as well, there are so many snacks that you can eat before you start to lose interest. How do you innovate to keep people engaged with the products that you are selling . Of the keyss one for us at that started before the pandemic, when we improved the quality of our yogurt by giving it more fruit, or the quality of our soup or biscuits or cereal. What we see now is that consumers are coming back to many products that they may have left for a time and are coming back to Something Different than they left. And they are liking it and that is why demand for our products is up double digits, not only through the first months of the pandemic, but all the way through july. In the future, the key for us is going to be to market our products to solve problems that consumers have through places alsobetty crocker. Com, but to keep innovating. We have great innovations coming in yogurt and snack food because as people eat at home, they want Something Different. There has been disruptions in your supply chains and your costs are rising. How do you offset it . I cant imagine you have the ability to raise prices on consumers now . Our i am proud of the way supply chain has held up. Our demand in the u. S. For our Athome Business was up 28 , but we were able to supply that primarily because we kept workers safe. 98 of our workers in the u. S. At our plants and logistics facilities showed up for work every day because we created a safe environment by peak environment by keeping people home if they needed to stay home and tucked of equipment to keep our workers safe so they can produce food consumers need right now. Let me boil the question down further. Are you expecting inflation to pick him inflation to become a feature of the landscape . Are we going to see it in terms of prices you can chart . There is a lot of monetary and fiscal stimulus we are struggling with, but nevertheless, it are we heading into a more inflationary environment . Jeff for the future for our company, we are not heading into a more inflationary environment. Our costs whether labor or Raw Materials is relatively low. We are spending more money to keep workers safe and think that is prudent. We are spending less on promotional activities. You dont want to can you dont want to encourage consumers to stock up when they are already stocking up. So we are promoting less. Given lower input cost inflation for us and lower productivity gains which we see, we dont see a need to price in consumer pricing and still maintain the profitability of the company. Shery General Mills chairman Jeff Harmening there. Later today, an exclusive interview with Treasury Wine Estates ceo. Ahead. Ak asia is this is bloomberg. A very good morning. We are counting down to asias major market open. Welcome to daybreak asia. China since the usa message. It wants to discuss the potential ban on tiktok when the phase one trade deal comes up for review. Cathay pacific will be a stock to watch when hong kong markets open. Shares soared is optimism
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