Transcripts For BLOOMBERG Bloomberg Markets Asia 20240712

It is a little unusual for the secretary of state to be involved in politics of any shape or form, but it sure does sound like good theater and im anxious to see if youd see it. David ok, many thanks. You will be back with us tomorrow night. We will have live coverage again of the second night of the Republican National Convention Starting at 10 00 p. M. Eastern time. As we said, secretary of state mike pompeo will be appearing from jerusalem as well as First Lady Melania Trump headlining the night. This is coverage of the Republican National convention on Bloomberg Television and radio. Welcome to Bloomberg Markets asia. Asia looking set for gains after wall street extended its record run, investors increasingly optimistic for a virus vaccine and that the Global Pandemic will not drag on the recovery. One progress,e the u. S. And china held trade talks and say they have made advances and both sides insist they are committed to the deal being a success. Rishaad and the Republican Convention continues to vilify democrats come being painted as complicit with crime and violence with speakers saying america will not be safe under joe biden. Haslinda and of course, we have the ustr saying in a statement that talks are pretty much intact, the u. S. And china did hold talks and progress has been made. We did not hear anything to do with tiktok or wechat. We still have to wait and see, a lot of questions unanswered. Absolutely. It certainly is a trade war with perhaps technology characteristics. Au mentioned tiktok, going to federal court saying Donald Trumps executive order to ban americans from using the social Media Network is essentially something done for lyrical motives only. Political motives only. There are also other frictions out there as well. Dont forget the south china sea, the uighurs. Hong kong, taiwan. Those geopolitical issues and lets not forget on top of all of that, the blame day game on whether the coronavirus started because of a lack of transparency on the part of the chinese. Today, we are seeing risk on an asian markets, asia pretty much extending the gains for the morning. The asia index of 710s of 1 . Gains. Further among gains but lagging behind Consumer Staples and health care. China says its megabanks are ramping up the hiring. That is despite lenders having to deal with plunging earnings, ballooning debt as well. China front and center. Up for a third day. Index, debutantes continue to search. Beware of revamped rules. The gap between the most expensive and cheapest on the china is the widest ever. Chinext is the widest ever. The gains for the region up six tents of 1 . A position boost for thai tech stocks. Have a look at what is going on with the futures contract, s p futures pointing to the upside at the moment and we could be setting yet another record high with regards to that. The u. S. Dollar index moving cellular to the moving slightly to the downside. Pretty much unchanged. Of lightstrengthened but that could be a dollars story. Study news at the moment concerning vaccines helping to boost Risk Appetite according to some people. Not supporting the search to record high territories for u. S. Indices, but david ingles is with us what is standing out . Give us a broad sense of sentiment. It seems to be a oneway trajectory and level equity now approaching record highs. David we are very, very close to that. Im guessing at this point, within have a percent of the high. You mentioned the progress in the vaccine. We woke up with that news and midmorning right before markets in china open, we got the other aece of news, which is positive news that the trade conversation is progressing. Not that there was much progress to boast, but was acknowledged they are short, the attorney said is short, but they are committed to the phase i deal, it was enough to give markets a further boost. Not to mention, when you put the story together with the outlook for rates, any progress on the phase one trade deal, you can look at it as reflationary but it doesnt really change the fact that it doesnt bring forward any future rate hikes. Outlook fords, the lower rates continues and you have positive sentiment boosting where you are market wise. We will see if that holds into tuesday. We might get to that record by the end of the day. About how ittalk is a risk on day in asia, but not the hang seng. What is happening there . David no, no. Remember, a couple of hours back, you made a bet, you won the bet, if it continued gaining you wouldve still won the bet. I had a look at some of the technical charts. Rsi,tum indicators, 14 day a lot of the momentum really lost in early july and never really recovered. Farooks like now maybe as as the index can go without looking too stretched. The graphic you are looking at, thats the next big test and it doesnt look like we will have a convincing breakout today on a moving average on the hang seng benchmark. It fair to say that markets are looking past these tensions between beijing and washington for the time being . David equity markets, probably yes. The bond markets are probably a story of supply and what is happening with domestic recovery. What i would. 2, since were talking politics, is despite the good news or relative good news on trade, the premium on the six volh, three months expected on cnh and the spread over the onemonth is actually still moving up. In other words, not that it is being priced in that there are expectations that as you chinach the election, the bashing is going to continue to be part of the market conversation. That hedging is playing out with a chart on your screen. Dave, there still time for me to be right. Ingles, thank you so much for that. Here is the first word news. The latest virus data indicating infection rates slowing in the u. S. With new cases in florida at a monthly low while arizona reported new deaths no deaths for the second time in a week. Spanish cases fell from fourmonth highs while germany is scrapping plans to test travelers from high risk regions with Health Capacity at full start full stretch. Social gathering limits in munich. In hong kong, they are investigating the reinfection of someone who recovered from the virus in april. A 33yearold man was found to , aftersecond infection returning from europe. Infected by two separate strains of the virus, which may be able to circulate even if he gains a natural immunity. Bali will not open next month as virus numbers continue to spread. Travelers will be barred at least through the end of the year as the area remains in a red zone. Its byoosting lifting the debt ceiling for the First Time Since 2009 the new limits will be 60 of gdp through 2023, up some 35 . The philippines has approved the final version of a virus relief bill that will provide subsidies to subsidies and on up limit assistance. It needs the president signature to proceed. Also provide for Contact Tracing as the country battles the biggest Virus Outbreak in southeast asia. Still ahead this hour, we will talk about Food Security in china with dow foods international. Andaad next, the u. S. China seeing progress on the phase one trade deal just as the Republican National Convention Kicks off. We will have the latest on that here on bloomberg. Haslinda republicans make a case for a second trump term at the rnc, reiterating the America First policy and attacking the democratss dovish stance on china. Beijing biden is so weak on china that the Intelligence Community recently assessed that the Chinese Communist party favors biden. They know he will weaken us economically and on the world stage. Haslinda it comes as washington reports that top trade officials spoke about progress on the trade deal. Lets go to Jodi Schneider for the latest. What is the republican strategy ahead of the election, is there clarity on that . It will be obviously attacking the democrats on a number of fronts. They will try to portray joe biden as weak on china, using President Trumps tough talk to say is this what you want, should we go back to this . And they will also try to paint democrats as very to the left, very socialist, which whether or not that is actually the case, the portrayal will be would you like this, our country changed in this fundamental way . At the same time today on the first day of the Republican Convention, they tried to paint a positive picture of President Trumps widely criticized handling of the pandemic, saying he is helping to develop a vaccine, and the economy was good and could be good again. An interesting case to make given the wide criticism but that is the case they are making. They had some rising stars in the party like nikki haley, who was the yuan ambassador un ambassador and senator tim scott, the only lack republican in the senate, talking about his childhood growing up and how interactions of his family went from a poor background to him being in the senate. This vexesat about you about trade . What we know about the column the phase one deal . Any significance . Jodi the significance is probably that it happened. We know the u. S. And china trade negotiators were supposed to meet just for a status update week or so ago and called that off. President trump said he did not want to talk to china now. The u. S. And chinese trade negotiators are talking, even on the limited trade deal, it shows they are still in contact and may see something happen on trade. They say they hope to make progress and for china to sign to buy more american goods. It is more symbolic than anything else, especially given the rising tensions between the countries. Inse one was negotiated january, before the pandemic spread, and it was pretty limited in scope. Haslinda another issue involving the Current Administration is tiktok. What is it asking a federal judge to do and what is its argument . Jodi tiktok, this is in reaction to what President Trump had said, President Trump wanted tiktok to end operations in the u. S. Now the company has gone before a federal judge and said it wants them to stop the action and it wants to continue to act, it is notent is obstructed by the chinese government. It says it does not want to get caught up in a geopolitical fight and President Trumps actions will destroy an Online Community were millions of people come together to express themselves. We did not hear any, for the white house. Rishaad Jodi Schneider there. Accessoryw to phone maker anchor innovations. On hismore than 120 debut yesterday. The founder and executive spoke to bloomberg about the companies companys global ambitions and navigating trade between the u. S. And china. Theres a lot of product area where we hope to join one day. R d and manufacturing is very consuming. We are happy the people are buying our stuff. Tell us about your business. What is your geographic focus . Where do most of your sales come from . Sure. Anchor started from mobile charging. Our batteries, chargers and cables are the first line product on the market. And there, we moved on started doing audio. Speakers and headsets. Later, other things. Global,ically, we are in theave major sales u. S. , europe, japan, at least, asia. In china as well. Haidi how much do you depend on the distributional with apple and these pressures coming down on Major Chinese tech players like wechat and tencent, how will that impact the relationship . We talked online and are expanding offline as well. Buy, costco, best in the u. S. , 711, softbank in japan. We are starting to be a rand. Butjust a single channel, wherever customers want to get our product. In terms of the challenges, i would say for tech companies, there are challenges every day. Wherever and whenever they come from. On thee hope to focus product. Were always working on something new to bring to the customers. Given your Global Distribution in operations, do you consider yourself a thoroughly Chinese Company . This might make a big difference on those u. S. China tensions. So, a u. S. Journalist gave interesting remarks saying, he was mentioning anchor as an International Company like he could find in silicon valley. In terms of the whole culture , it isosphere and anker very internationalized. Haslinda ankers founder and ceo. Now a quick look at the latest business flash headlines. 2000ys it will pilots in october as it sees little improvement in commercial aviation in the next six months. They will have more pilot senate needs after 1800 flight deck crew except voluntary retirement. There have been thousands of layoffs at airlines. Details have been revealed about the deal to buy version australia. It doesnt make sense to creditors. They can expect a return of just 9 13 percent and even less if they vetoed the deal. A vote is due tomorrow. Oil search is dropping its dividend after low energy prices. The Company Reports a shortfall dollars inion u. S. June compared to a profit 12 months earlier. Oil search says it will review the situation at the end of the year. It paid a dividend of five u. S. Cents and 2019. Apples aring applicability to offer ethics ability to developers but not to reinstate fortnite. The App Store Fee of up to 30 is unfair, they say. They hearing began monday and is finished for today. The judges says that she will make an order soon without offering a timeline. Rishaad lets get to the Market Action toward the chinese lunch break. Strengthening, and a day of positivity. Up, some bighinex gains. We saw a few up by about 500 or thereabouts. Shanghai composite pretty much unchanged. Shanghai markets under little bit of pressure. Have been positive but worsening a little bit of pessimism creep in. This is against the backdrop of asian stocks on the up, optimism about treatment for the coronavirus. We have the offshore yuan strengthening. Washington boasting that china and the u. S. Is progress on their trade pact, phase one. We have stocks up elsewhere. About u. S. And china trade strains we also have india with its phasing out of a quitman from hallway equipment from huawei. A fresh blow for tech giants in that part of the world. What else of we got . We will discuss Food Security in china amid the pandemic and because of the tensions taking aoace, we will do that with d foods international. 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. 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 it is almost 11 30 a. M. In singapore and we are in the middle of the trading day. I saw four rainbows and the lion city yesterday. But i digress, currently standing has gained for the day, up i 1. 4 . Singapore also saying it will address the issue of competition for jobs in the lion city, saying there is great urgency to transform singapores economy with the pandemic threatening openers. Said by the president of singapore yesterday. 1. 4 . I up rishaad once look at the first word headlines. U. S. And chinese officials holding a routine call saying there satisfied with progress under the phase one trade deal. Have taken they steps to ensure copyright, and remove barriers to u. S. Companies in finance and agriculture. Both sides think they are committed to the success of the deal. Ella roos launching military exercises near its western border after a belarus launching military exercises near its western border. It mobilized forces, cleaning the west is attempting to force them out. This while russia has offered support. Crew of the International Space station will stay in the russian part of the lab for now. There is no danger from a leak, but the airlock is above normal levels and all hatches are being closed. Periodices repressuring is a pure repressurization. Could remain elevated next year. Cba predicting it will fall through the current period after 6 construction contraction. Forecast to pick at 9 this year and be just below that figure through 2021. Haslinda lets take a look at the markets. Risk on my asia up for a third day and holding at january highs. The nikkei to do five leading the gains, up by 1. 8 . Canon, casio. We are watching kirin, which is down, they terminated the lion dairy deal. Also nintendo, the strongest performing bluechip stock in japan. It is seeing some kind of correction. The hung thing down for 10th of 1 hang seng down 4 10 of 1 . The kospi up. Restrictions could hurt consumption and the benchmark. In australia, up way for 10th of 1 up 4 10 of 1 . The cba is now saying the session could extended to the third quarter. Rishaad lets look at the Indian Trading day. We have prices coming through futures at the moment pretty much flat. It comes against the backdrop of rising tensions between new delhi and beijing. India phasing out equipment from Chinese Companies from its telecom network. In anh low to huawei important market. Looking elsewhere, what is going on with the bond market there, we have a story at the moment that we could a big hit for bonds in places like india. Fixed income could indeed be held victim to what has been happening with the u. S. We saw the spike in u. S. Inflation numbers and it could be bad news for investors and indian, russian and mexican bonds. The fixed Income Securities of those three appear the most vulnerable to any surge in consumer prices. Lets talk about Food Security, because it is becoming a big issue in china with fears of the Global Pandemic and increased global tensions to disrupt supply. China has increased its reliance on soy and pork from the u. S. To meet protein demands. China has also launched a National Campaign to stop food waste. Have the cow founder cofounder of dao foods. President xi saying food waste is something the country cannot afford. They are taking measures to stop it from growing. What are your thoughts . I think he is right. Initiative and should be adopted nationwide from a management perspective. I think it helps to some extent, that in terms of solving the Food Insecurity, longterm Food Insecurity challenge, it is not necessary a longterm solution. If you look at food waste, it is not just consumers but everywhere. I will give an example, china is indeed wasting food, but about 1 6 of the food waste produced in china is wasted in production, processing and transportation of food because of poor equipment and those sorts of issues. Perspective, you can break down the Food Security challenge into two aspects. The Food Security issue we need to examine for china. One is grain or crop security, and the other is probably more relevant to what we are talking about, meet and protein security. Meat and protein security. Rishaad does the timing interest you . Weve had huge floods and Health Scares and not to mention what is happening with covid. Is there a food shortage in china . Is that what it is really about ultimately . I think in terms of grain security, china is pretty much selfsufficient. A selfsufficient ratio of the major staple Food Products like wheat, rice and corn is pretty high in china, over 90 . On the other hand, if you look at chinas protein security, because china has a great reliance on imported soybeans, most of the imported soybeans have been used to raise farm animals, for the livestock the farm to feed raised animals so people have more meat, i think that is where the real challenge or the structural challenges longterm. If you look at the shortterm impact factors, the pandemic, economic decline, u. S. China trade war, all of these things are happening, but they are having more of a psychological on the Food Security issue or peoples perception of Food Security. I think chinas challenge in terms of Food Security is more of the meat security i pointed out. That is an issue that needs to be resolved longterm. Haslinda you say you are not concerned about grain security but reports have suggested we byld see grain supply out 2025 because resources are shrieking. How real is this and why are you not that concerned . Tao basically, if you look at what china has been doing, the structure in terms of Food Security structure, china basically has focus on most of , plantinge land wheat, rice and corn. Hybrid also developed rice and grain. The technology has been developed. They basically have solved the grain security issue in china over the past few years. I think china is pretty selfsufficient. In shortterm, there could be youlems related to how allocate the different resources to different people, different geographies. Decline andconomic things like that. At that is more like government allocation issue. What they have, like particular the major stable Food Products, wheat, rice and corn, i think china has what it takes to meet demand, domestic demand. I still a challenge is more protein for Food Security. Haslinda how prepared is china to overcome the challenges . Tao you know, what we do is we plantbased,evelop alternative Protein Products in china. I think thats one way for china to solve the protein security challenge longterm. But it will take time. Scientists, you need government policy support in order to truly create an alternative protein in order to replace chinas reliance on imported soybeans. Rishaad it is all about importing, isnt it, ultimately . ,ustralia, a big story today ended a deal to buy kirin in australia. The treasurer saying it wasnt in the national interest. They are importing more from the u. S. Because of the phase one trade deal. Is that the pendant on external Food Supplies is the dependent on external Food Supplies a cornerstone, and they cant get around it . Tao they cant. Longterm, there is impairment in the supply chain. If you look at countries restricting food exports because of the pandemic, both in china and elsewhere. From my perspective, the Food Security issue is not just internal and china but also a global issue. Countries,ferent they need a globally integrated food system. Back tord to just go their own countrys inner loop, so to speak. That will be hard to do shortterm. Even longterm, i think it is full of challenges but i think Different Countries understand that they need to worry about their own domestic Food Security challenges. , the narrative in terms of Food Security is that they have. 0 of the world arable land the challenge is always there. From my perspective, china needs to put in resources and time, and a lot of patience to develop alternative protein solutions. Haslinda given that backdrop, what is your Investment Strategy . How are you capitalizing . Tao basically we invest in entrepreneurs. We support entrepreneurs in this space. It is still a nascent space in china. Even the china has a history of plantbased food. The definition that people in the u. S. And europe are used to is very different from the chinese concept. Thats what we are trying to do. Investments, we Just Launched an incubator in april. 30want to invest and support alternative protein ventures in china so we can have an army of inventors to come up with the right products to appeal to mainstream consumers and help create sufficient Consumer Awareness of what we call nextgeneration good Food Products. This alternative kind of products can eventually stand on their own. Haslinda thank you so much for are,ng us from where you where it is almost midnight. Show, hongme on the kong confirms a case of reinfection and south korea warns of the Economic Impact of containment measures. And bali closes for the rest of the year. We have the latest on the virus in asia, next. This is bloomberg. Lets have a look on what is going on in Indian Markets, coming on stream, having a look at the price action at the moment and looking at what was predicted to be a flat open. That is not the case at the to the upsidef 1 for Indian Markets at the moment. Are helping to drive things as far as that goes. Some positivity as we have been witnessing in other parts of asia as well, with the exception of hong kong and the shanghai comp. Haslinda hong kong researchers say they have found the worlds first documented case of a covid19 patient being reinfected after recovering from the virus. The findings suggest the coronavirus could continue to circulate even after patients require immunity from natural infection or vaccination. Rachel, lets start with the details of the case and significance. Rachel it is quite a groundbreaking study that has been published. The important thing to remember secondhis guys infection, he did not have any symptoms. The immunity from the first infection could have helped his body be stronger for the second. But it did not prevent him from contracting it a second time and that kind of confirms what researchers have been suspecting, that there is really no way to eradicate the virus, that different strains will be around a long time and you can get different strains. That will be very complicated for Vaccine Development and economies trying to reopen safely. So what are the challenges for the race to produce a vaccine . Rachel i think a clear issue now is we know that antibodies will wane after a few months, which could mean implications in terms of a vaccine having to be delivered multiple times. It will not be one shot that protects someone forever or be a magic bullet that countries will get vaccines and everything goes back to normal. That will not be the case. We might also need a variety of different types of vaccines against different strains. The truth is that people will probably get infected again even with a vaccine widely available. This just confirms that vaccine is not a magic will it for what countries are going through right now, and that is a sobering reminder. Rishaad thank you very much. With the coronavirus theme, President Trump sang a treatment will be expanded to more sick americans after the fda fast tracked a therapy despite that its effects are not fully understood. Critics say not enough is known about the antibody treatment that uses blood plasma donated by recovered covid patients. We talked to the vice dean of Johns Hopkins school of Public Health for his thoughts. Theory tos damage in the antibody treatment, which is you are getting antibodies that can fight off the virus. This concept has been around over 100 years, when it was used to stop the Measles Outbreak in the early 1900s. Weredea is people who recovered in part because they have neutralizing antibodies and you can take them from that person and give them to someone else and it may help with the infection but also to prevent someone from becoming seriously ill. The evidence has been adding up that has a benefit for patients with covid19. Probably the earlier it is used, the greater the benefit, which is what has been seen in history, but they havent been able to complete a definitive randomized controlled trial of sufficient size yet. To be clear on the doubtsutics, and nobody the scientists the convalescent plasma is for people who are already sick number right . Not necessarily. There is a Clinical Study at hopkins for people who have just been exposed. It could also be used, for example, if there is one person sick in the household, you quickly give it to the other people. So at least exposed. And then you see whether the other people get sick at all because theyve gotten the plasma. Again, that is in theory and you have to wait for the results of the study to see whether that is true. But it is definitely promising. Its not going to be perfect but and it isan impact, something that adds to the various tools for doctors. Give us the latest thinking around school reopening. We are speaking to you from london and children will be going back to school in Early September in our case. It is just a question of how long they stay there, i suppose, for many parents. What is the latest thinking about how you manage the risks surrounding backtoschool . One super quick thing on convalescent plasma. I think there is an important scientific discussion about whether it should have been authorized but i dont think it was a good idea for the president to announce it in a Campaign Style event attacking the integrity of the fda. Much better to have the discussion outside of that kind of political theater. , i think the latest is coming from the united kingdom, which is a major report showing their initial experience in june with reopening schools predicted, that, as the biggest risk factor for having problems in schools is the community spread. Communities with a lot of virus circulating, they had more problems in the schools. It was most likely teachers bringing it in and passing it on to other adults, or adults bringing it in. It was rarely the kids passing it to the adults. Of course, it is really important to follow precautions, have lands in place for when there are positive cases, not be surprised by that. I think, you know, what we are seeing with the emerging data, it is consistent with the key principles, bringing cases down in the community and take precautions in the school and he prepared to go online a little bit of cases pop up. Haslinda the Johns Hopkins Bloomberg School of Public Health, the school is supported by the founder of bloomberg lp and bloomberg philanthropy. Stay with us, this is bloomberg. A quick check of the latest business flash headlines. Jumpedrce and honeywell in late trading on news they are to be added to the Dow Jones Industrial index. Moves will happen before the open next monday and the changes were prompted by apples stock split that lowered the index weight in the tech sector. A company will retain its internet of things platform and plans to spend them off to softbank. The two firms can realize the same benefits power manning independent under the group umbrella. Bought arm in 2016, saying the company had the potential to grow rapidly as conductivity expanded. Apple plans to start reopening Retail Stores in the u. S. That had been closed by covid19 spikes. They will start with a small number of outlets this month with customers served on an appointment only basis. Apple closed all 270 American Stores in march and began limited reopening in may closed more than 120 of them later due to rising infections in local areas. And lets do a quick check of the markets here in asia. Asia hanging onto gains, rising for a third day. The u. S. And china said they are committed to a phase one trade deal and progress has been made. The yuan raising on the back of that. Up on that. 25 sengonk saying hang bucking the trend. The virus case could be weighing on sentiment. The kospi is up. Rishaad these are the ones trading in hong kong and even though they had a declining market, they are moving to the upside and in quite spectacular fashion. Looking at china southern, which is not there, having its biggest pop up since the ninth of june. Is down to the Environmental Protection agency and for allied s product, a new weapon against covid19. It is a surface coating that kills coronavirus for up to as many as seven days. It would allow American Airlines to use it and the hope is other airlines in this part of the world get the same would get the same deal. We had now to daybreak middle east. Manus this is bloomberg daybreak middle east. And chinese negotiators discussed the phase i deal. Sides sawys both progress and their committed. The Trump Administration medifast track treatments. A breakthrough agreement betw