Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240712

The hearing was set before the bank agreed to pay 4 billion. The race for tiktoks assets aress the globe sees we told its been talking to geo platforms. We do have some breaking news crossing the bloomberg. Current account numbers coming through. We are getting the july current account surplus coming in at 7. 5 billion u. S. Dollars. The trade surplus sitting at 6. 9 7 billion in july and we are watching out for some other developments coming out south korea today. Highlevel officials of the Ruling Democratic Party and the government will be meeting to discuss a second cash handout and potentially a fourth extra budget according to local mode media reports and we are expecting perhaps an announcement when it comes to the social distancing measures as well as the coronavirus update to come. Lets take a look at the fed when it comes to the markets. It was a fallback overnight when it comes to u. S. Stocks and driven by a correction in the highflying tech sector. We saw u. S. Stocks falling the most in three months and that rotation play starting to really pick up steam. In terms of futures, we look like we will see this correction continue and a lot of analysts saying that is healthy. The more of a pullback, the healthier it is for the breath of the market. Nikkei 225 futures setting up for downside. 4 higher going into the tokyo open. Dollaryen actually pretty steady. The dollar largely higher against the g10 we saw declines in the kiwi as well as the aussie really pacing these kind of risk declines so it did feel like they were not haven bids for yen and gold. We saw crude falling back a little bit along with gold. Sophie. Sophie joining us now for more on the markets is the portfolio manager, louis lau. Where areion shift, you seeing the opportunity when it comes to beatendown sectors . Is quitek it interesting. I think investors are getting tired of the high valuations in technology and beneficiaries of the pandemic so in terms of where we think funds can shift to, banks definitely deserve a second look at some of the provisions might be coming off next year from loan losses. Energy can be another area that could be beneficiary and within industrials, auto stocks could also be a place where some of the funds could go into, especially for Car Companies that are expected to beef up the electric vehicle lineup. Tohie calls to allocate ems, those have ramped up. Pulling up the chart in asia to see what has been going on in china across the board in asia, the gap to the u. S. , that is nearing a record when it comes to the yield gap and liquidity concerns are driving a flatter yield curve in china as the pboc has been holding back from its aggressive using. With the long end supported, what sectors benefit on the mainland . Been calling out some of the yield spreads for a while. I think we see strengthening of the rmb because of the yield spread. I think at this point, we would not be changing some of the technology or Health Care Stocks that have benefited but i think several areas that have not really had good rallies will be the insurance industry. Consumerof dis Discretionary Spending is subdued at this point. Im talking about travel. Even spending on durable goods such as household appliances. These companies have not seen the benefit of a resumption of consumption. These areas could see some rotation into them as well. Do we continue to see downside pressures and risks in asia as we continue to hear of this prioritizing of their own homegrown ship industry by china . You know, i think some of the leading manufacturers in taiwan and korea, they still remain wellplaced. Yeary, a five year to 10 gap in terms of Technology Like the Semiconductor Companies in china have to catch up but i think in the shortterm, we can also see some pressure on all Semiconductor Companies from some of the sanctions on huawei. I think that will lead to a depression in demand. Ofwei could easily be 10 the demand for some of these semiconductors as a percentage of revenue, so i think we could see some pressure from that, but no, i dont see some of the foreign players getting hit too badly from this. Are your assumptions about where the u. S. Dollar goes from here . That will all dictate the price moves we see across ems. Yes, thats a different question to answer. Have a forecast and how much it could depreciate. There is more downward pressure on the dollar. We see currencies like the euro, of the, and even some emergingmarket currencies in india or in brazil being beneficiaries of this rotation out of the dollar. Brazil, howking of are you assessing latin america . We are getting more record numbers when it comes to infections. Fitch warning that Mexican Companies are most at risk to become fallen angels. Louis thats definitely a hotspot in terms of virus spreads. Latin america right now. The figures have not been encouraging. But you do see some Silver Lining a little bit because in the last week, we saw 31 out of 32 mexican states lift lockdown restrictions so life is slowly getting back to normal. In brazil, the lockdowns were never strictly enforced so i think the strategy at least for us is to focus on companies where the sentiment has been depressed. Companies inbout the supermarket space in brazil that can still be resilient. In mexico, a good way would be to look at some of the some ofal as well as the diversified Real Estate Investment trusts in mexico that are going to be quite resilient. Going along the line of the yield spread, some of these are paying 7 to 9 dividend yields and we know the u. S. Treasury is yielding 60 to 70 basis points so i think that will continue to be attractive. Thatf the good things is mexico and argentina, the governments have been partnering up with astrazeneca to secure some supplies of vaccines that could come out later this year where the first half of next year so that could help the continent as a whole. Joining us. Lau really appreciate your time. Lets get you to Karina Mitchell for the first word headlines. Karina thailand has lost its 100 day virus free streak, reporting its first locally transmitted infection since late may. It involves an inmate at a bangkok person whose history shows he worked as a dj before being jailed. Euros on ahrowing stimulus plan. Away. Ection is two years the government of indonesia says it does not support proposals to dilute centralbank independence and relies on policymakers to help fund the fiscal deficit. Ministers intend to maintain sovereign bond purchases to support social protection amid the coronavirus despite Bank Indonesia saying this week that the program has been simply a oneoff measure. Singapores de facto central bank is to ease bank access to local and u. S. Dollar funding to protect the Financial System from the fallout of the virus. The Monetary Authority will provide an additional channels to borrow money and will allow vendors to accept more forms of collateral. They say the move is intended to contain any liquidity strains before they should be, serious threat. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Sophie. Still ahead, republicans and democrats agree to avoid a u. S. Government shutdown right before the election. Details on their informal agreement, next. Reports softbank may pull together a group of bidders for tiktoks india assets. This is bloomberg. Sophie democrats and the white house cooperate to avoid federal shut down right before the election but it does not resolve the standoff over the stimulus bill. Lets cross to our government reporter, emily wilkins, in washington. Not enough goodwill to drag that virus relief over the line. Emily now, at this point, we still have a number of obstacles left for democrats and republicans to come to an agreement on with this package. The good news is that it seems like we are likely to avoid a Government Shutdown. That is not what either side wants at this point with an election coming up in november, but both sides, when it comes to coronavirus spending, there are more than one trillion they are more than one trillion dollars apart. Sophie in haidi in terms of what we are seeing the polling, going into november, some increasing talk about an uncertain outcome, what do the polls tell us now . Emily the polls but biden ahead of trump although not by a huge margin. That will be interesting. If the election is barely close and you see certain states like michigan, which does not start counting the absentee ballots until the day of the election, michigan is expecting 3 million absentee ballots. That could take some time to count. Especially if we are seeing a very close race. We might be waiting several weeks to get the results of the president ial election. Haidi we are waiting to hear from President Trump. He has set to deliver from pennsylvania. What are we expecting to hear from the president after the rnc . What is his narrative that he is wanting to set in place going into the last weeks before the election . Emily i think trump has sort of been focused on two things. One is this very consistent message of law and order, trying to sort of blame the protests and the writing that we are seeing they can only get worse during the biden presidency. We are seeing a bit of a shift with him talking more about the coronavirus and a potential vaccine. We saw the cdc come out the other day and say start preparing for a potential vaccine around the first of november. The election is around november 3. There is a debate over exactly what we should be expecting but those seem to be two issues we are seeing the Trump Campaign hit on a little bit more. Emily wilkins in washington. Facebook has revealed new policies to guard against Voter Suppression and misleading posts ahead of the u. S. President ial election. These policies include the blocking of all new campaign ads. Mark zuckerberg spoke to cbs this morning about the companys plans to prevent Election Night uncertainty. If someone tries to prematurely declare victory, before there is a consensus, we are going to add some context to that post saying that there is not an official results on this election and directing people to a Voting Information Center where we will have the list of the official results that have come in haidi emily chang spoke with nick, facebooks Vice President of affairs and communications, to outline the companies strategy. It is an unprecedented step. This is an unprecedented election taking place in an extraordinary time, so unprecedented times require unprecedented measures, and the reason we are doing it for the last week is this. Of the campaign, if ads are run which are particularly false or misleading or polarizing, you do not have time for you in the media, for opposing campaigns, to scrutinize and challenge and contest what is said, so we have tried to create this sort of guard rail, if you like, in the final week of the campaign so that any and that are run ads that are run mobilize voters spirit all of that is which amended are legitimate. They cannot run new and. Would not have time to be properly scrutinized and if necessary, debunked and contested. Crucially, it is important for your viewers to appreciate that all the ads that are run are launched in a library, which is probably the most transparent version of its kind anywhere, including in radio, television, print media, so that anyone can see who has paid for an ad, what its been directed at, and what the different variants are. Octomom transparency combined with no new ads being produced in the final week of the campaign. Emily that said, Mark Zuckerberg made no indication that the content of political ads is changing. What about the critics who say this is piecemeal . Or the real problem, which is that facebook allows misinformation and even lies in political ads to persist . Nick no major operation in Silicon Valley a seeks to try and adjudicate on the exaggerations, halftruths, and characterizations politicians say about each other. Political speech is always about one candidate. So there is a reason why no major player in Silicon Valley has tried to enter into that and somehow be the arbiter of complete accuracy and truth. We have Community Standards against violence, hate, and all sorts of other things we dont want on our platform and react where we must in order to remove ts, for on the whole, we think politicians in an open democracy should be able to say what they want to voters and indeed they should be able to say what they want about each other within those guardrails. One of the significant announced ends announcements we made today and just acted on in the last few hours on a post posted by President Trump is that we are going to apply much, much more visible, much more aggressive labels to posts where there is any question in the post about casting doubt on the efficacy, the legitimacy of voting methods, and we are asserting very clearly for our users these labels that, for instance, voting by mail is a trustworthy way of floating in the election. That was nick, speaking with emily chang. Lets get you some lines breaking on young china. The company set to guide racing for hong kong, listing at 412 hong kong dollars per share. The deal was being marketed at a maximum of 468 so this is under that target and young china young china did close its books early. Goldman sachs faces court in malaysia over the 1mdb scandal. We will have a preview. This is bloomberg. Haidi Goldman Sachs is due in court in malaysia. The hearing was set before the bank struck a settlement when it agreed to pay 4 billion. Lets cross over to Haslinda Amin in singapore for more. What are we expecting from todays hearing and what is the significance of it . Haslinda the hearing is happening at 9 00 a. M. Local time. We are expecting the court to drop the criminal charges against goldman and that is significant for goldman. It has been having this scandal for the past two years. It wants an end to it. 3. 9 a settlement of thre billion, that may happen today. If you recall, malaysia has directors,goldman past and present, including tim leisner, who pleaded guilty for conspiracy to money laundering. Have the man in asia and he faces the same charges and he said he would plead not guilty. He will be exit i did expedited to the u. S. Another has been banned from the banking world for the rest of his life by the doj. You cannot imagine the magnitude of the scandal for goldman. This is the biggest scandal for goldman since the financial crisis. It wants an end to it. With the charges dropped, which it hopes will happen today, that will be pretty significant. Its also significant for asia because it sees this as a win. It is facing trial. The end of the scandal with goldman marks a victory for the current prime minister, who came to power in the majority. The 3. 9 Million Dollars is significant in terms of the settlement because it comes at a time where malaysia needs a lot of money. It is in deep debt. 70 billionnounced in fiscal stimulus. It needs all the money it can get. Gdpccounts for about 1 of for 2019. Its a huge amount for malaysia. Sophie does this mean the end of the 1mdb for the west bank . The u. S. Bank . Haslinda it is not over until the fat lady sings and the fat lady is the doj. It faces a probe by the doj. They said the 600 million that goldman made from the three bond sales linked to the 1mdb scandal is unusually high so it is under probe. Its been such a difficult journey in terms of trying to put an end to this scandal so you and i have covered this. It is a web of funds that travel the world from malaysia to singapore, luxembourg, switzer switzerland, to the u. S. We have hollywood movies. Its been quite difficult. It aint over for goldman, but hopefully soon. Sophie im just waiting for this movie to come out about this whole episode. Haslinda amin in singapore. Lets get a quick check of the latest business flash headlines. Seesates for tiktok assets softbank considering the bid. Softbank owns a stake in tiktok s parent. Sources say negotiations have stalled but softbank remains interested. The Parent Company is weighing its options after several countries moved to shut tiktok down. Bans are around the world, led by the u. S. It will also launch 22 socalled experience stores. Always app gallery is the worlds thirdlargest with 33 million active users in europe. Fedex is planning to hire about 70,000 Seasonal Workers to handle a holiday search in packages surge in packages. The carrier has added thousands of jobs with shipments spiking from last years peak. Sunday deliveries will be expanded to 95 of the u. S. Population as more consumers browse and shop from home because of the coronavirus. We will have more on the jobs market, next. Be. Jobless claims seem to painting a mixed picture of the recovery. Investors also waiting on payroll data due later. Do not miss a big interview later with which claims to be the Number Two Company in the world. The ceo joins us exclusively. This is bloomberg. Karina this is daybreak asia. I am Karina Mitchell. Worldwide coronavirus cases have topped 26 million with 865,000 deaths. There are warnings about new u. S. Infections coming after this weekends Labor Day Holiday , and in brazil, cases have exceeded 4 million. There have been more than 800 deaths in the last 24 hours. Infections and deaths are slowing. India reported record daily infections of more than 80,000. Democrats and republicans will Work Together to avoid a Government Shutdown ahead of the election and to push a stopgap bill to that federal agencies keep working. Mnuchinlosi and stephen clinched an informal agreement to keep the government running after the start of the fiscal year on october 1, however, there is no progress yet on a new virus stimulus deal. The u. S. Trade deficit rose to its widest in 12 years in july with the surplus on services plunging to its lowest levels since 2012. The overall cap of goods and services swelled to more than 63 billion from 53 point 5 billion in june with the positive balance on services declining for the first time in three months. Exports rose month on month by 8 but imports climbed almost 11 . Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Sophie. Get a snap of how markets are faring. Global stocks under pressure. You have futures for usc menus under pressure. ,asdaq futures off more than 1 this after the tech lead selloff we saw on wall street, and here in asia, aussie yields falling for a day following the continued both flattening we saw overnight for treasuries and gold futures, holding a two day drop, treading water before the august jobs report, which is expected to show a deceleration some ofgrowth alongside the concerns we have seen around the economy. We could be seeing a drop in unemployment with the pandemic having a big impact on the labor market, parsing the numbers may be more complicated than usual. Kathleen hays is here with a preview. What is forecast and what is the pandemics impact . If you look at the forecast, we are going to see an august jobs report which shows the fairly mixed view of the labor market recovery. We heard yesterday from the its survey things were either flat or slowing down. Lets take a look at a lovely bloomberg chart for the payroll of the unemployment outlook. We see the forecast august payrolls. They are supposed to be at 1. 3 5 million. That will be a slowdown from july when they were 1. 7 6 million and thats happening even as reopening continues so we might expect to see a net increase in jobs. Pretty wide range from a drop of 100,000 to a gain of 2. 4 million. It has a very interesting point to make about goals. It. S think about a lot of schools are not opening. They will open on a very limited basis. Fewer teachers, bus drivers, janitors. Because of the seasonal factors, the seasonal changes, we have a higher we have to hire more teachers. The labor market adjusts for those because theres less teachers being hired, that will be emphasized to a less robust number because of these factors. That is something to keep in mind. The employment rate, the bottom chart is 9. 8 . 14. 87 . The peak at that would be the climb. Maybe not as good as it looks. If people stop looking for jobs, they are no longer just unemployed. Known longer in the labor force. They drop out of the labor force. They might be getting some drop in the Unemployment Rate just because people have stopped looking for jobs. What does the jobless claims report tell us about where the labor market is headed . Kathleen the jobless claims of course have been very closely watched because even as the economy is trading jobs, people are concerned about the big g ap. From 1eased to 881,000 million and change. That seems pretty good. Heres another little statistical wrinkle that clouds the picture a bit. New again, they have added factors to adjust the changes every week of people vying for Unemployment Benefits with the impact of the pandemic. They are trying to smooth it out. That is what all these adjustments are meant to do. These are new adjustments, and they are probably making the numbers of at because on an unadjusted basis, claims actually rose. A lot of this increase is coming from california. We know if they have been hit hard, in los angeles, that might be looked at as a problem particular to california where the rest of the country can trend a bit lower in claims. Haidi Kathleen Hays with us. An Analytics Firm that tracks drug trials says we may see the first results on whether a vaccine can stop people from getting the virus by november. The preliminary data is always for any type of clinical trial, its always taken with some grain of salt. Aboutd to be hopeful these findings, of course, but they are preliminary, so what we are basically going to be seeing is patients who have been enrolled in earlier trials, antibody responses. We will not know much about durability. We will not know much about the potential for exposures or reinfection but we will know how well they do or do not produce antibodies, which is similar data to what we are already seeing in the studies done in phase two. Faring that in mind, what is the optimal speed at which authorities around the world including the fda should move to approve vaccines . Im trying to work out how soon it is likely, rightly or wrongly, that we will get approval of a vaccine . Thats a good question. In the United States, the fda has a couple different options. Obviously, with any kind of clinical trial, whether it is randomization or placebo, we have a data safety monitoring board. These are the people external to the trials job it is to review the data and say if they are signals of a response and if there is not, they can stop the study and ended early. It early. If there is a Strong Enough signal that says theres a great response here and its actually helping to prevent disease, they can fasttrack the vaccine or any kind of intervention studies so what that monitoring board will be doing is monitoring the data independent of the investigative team. Its their decision on how fast the trial continues to move forward. Trust isly, public really essential for this vaccine, not only for its uptake, but also for when we think about the way the public thinks about the speed of things. We are hearing a lot of anecdotes right now that the public is mistrustful of us going too fast. Rightly so, because side effects and other types of responses from vaccines take time to know and to understand and we need to monitor carefully and slowly and to ensure that we have the right and safest possible vaccine options. It possible to fasttrack or do you have to wait longer . Jason there is the right way and then theres the fast way, so what we should do is wait until we have the trial completed and the monitoring board has made a final analysis. Ultimately, i think governments are really looking for speed here. Again, i think the most important thing is that we get the safest and most efficacious vaccines to market, and the timeline for that really depends on the science and not the speed in which that can occur. Whatever data we are seeing, whatever safety profiles we are able to view, that should drive that decisionmaking and not a rush that could put patients lives and the public in danger. Speaking ton farley bloombergs anna edwards. A quick note. The Johns Hopkins Bloomberg School of Public Health is supported by mike bloomberg, founder of bloomberg lp and bloomberg philanthropy. Up next, we will be speaking with the founder obama capital. Disrupting the predatory behavior of big banks. More on that. This is bloomberg. Valuations, technology landscape, have got into some pretty extraordinary levels. Its not a surprise. Theres been a lot of free money anywhere. Some latecomers, craziness in the 2020 summer of love for investors getting out of hand. Its not surprising we are getting a little bit of a pullback. Of course, there is the robinhood shenanigans that have been going on. It was not really a surprise. You have too Much Technology in your portfolio, this is the time to start taking a low bit off. A lot of money has been made tech has a downside to move here. Uncertainty. Our guests commenting on the selloff in tech. Chip stocks were dragged to ther amid that slump with index marking the worst day since june on news china is planning to boost support for its domestic chip sector and its fiveyear plan. The offshore yuan trading above 684 this morning while vol gauges are demonstrating the shadow being cast by the u. S. Elections with the yuan outrunning the onemonth measure by the most on record, haidi. Folks, the economic fallout from covid19 touches practically all areas. It is set to create particular challenges when it comes to raising capital for startups. One survey is working to mitigate that impact. She joins us now. So wonderful to have you. We appreciate your time, particularly staying up in the u. K. , where you are embarking on your masters because you dont have enough on your plate already. Tell us about your approach to dealing with Small Businesses and what are the findings coming out of these myriad challenges from the pandemic . A lot to learn from the pandemic. One of the things that has stood out for me during the pandemic has been the importance of adaptability. Some businesses are effectively adapting and responding to the challenges of coronavirus which is cool to see. They seem to be a lot more resilient than the traditional bricks and mortar businesses. As a result, they are doing a lot better than most. All of these online businesses are doing really well. Areexample, at company, we are seeing them increase facilities to expand and make the most of these extraordinary times. They are adapting and changing habits. Its a real mixed bag i think. You are a young woman in what is typically a maledominated part of business. How do you find that impacts the way you think about Business Decisions . We always talk about representation means better and more diverse Strategic Decisions are being made. I think, there is a female funding gap. That is something i have been interested in. My passion for it grew when we started operating because that is where i saw a discrepancy firsthand. It became quite apparent early females were not putting themselves out there when it came to that financing. We had dozens of cases where females would complete 90 of the loan application process and then drop off the radar so that bromleigh founded the female Founders Program to get them over the line but that is sort of i guess when my interest in the funding gap really flared so doing further research into the matter, its a significant issue in australia which really does need addressing, so its a complex matter. Definitely ways to improve. Taking a Bigger Picture view, given australias economy is in recession, are your experience any issues with own repayment . Moodys pointing to borrower stress, going to push higher. Olivia i have been quite surprised. When the pandemic hit, i was pricing myself. Majorityuite a large of that is ecommerce businesses which is online focused, our portfolio has been remarkably resilient and we have been super lucky. It has been really nice to see. Very proud of my clients who have been able to adapt and change to the needs and demands of the pandemic. Sector of thene huge economy and ecommerce online sector. Loan repayments is a real struggle. Hospitality, for example. It differs depending on which data you are talking about. We primarily work with ecommerce businesses, so we have been seeing amazing results in that sector. How are the businesses you are engaging with dealing with shifts in Consumer Behavior . Nowger consumers have a buy pay later attitude. Whats the sentiment towards banks in the wake of the World Commission . They are to attend a perimeter hearing. Olivia yes parliamentary hearing. Olivia back when bromleigh first started, that is when the Royal Commission first kick started bromleigh. These large australian banks really reduced their Small Business lending. It definitely has disrupted the market for sure. Emergence ofg the lots of these unethical online lenders, credit providers, and that is where there is a gap in the market, identified as a result off the back of that Royal Commission. Something like only 27 of simtech startups are founded by women. What are you doing . What do you think broadly needs to be done from a policy point of view to reduce that gap . Olivia yes, its a really complex issue to solve. Statistics are really scary. For example, the amount of companies in australia is 34 . The figure has increased. Some of the figures are quite alarming. Its a complex issue. One thing in my experience, its important to sort of see two sides of it. What are we investing into . Are we investing into a decent amount of female run businesses . Who is doing the investing . Capitalalia, only 410 firms have female partners. Its important to nurture this idea of females investing into females. If we want to increase the amount of female businesses, its important we sort of provide a nurturing Supportive Network of businesswomen and i think its part of the problem that is often overlooked. Pleasure having you on. Olivia molesworth joining us. Lets get you a quick check of asian markets. We had a return to earth story with u. S. Stocks falling the most in just about three months overnight. Text, we are continuing to see the rotation away from growth. New zealand seeing downside of 1. 2 5 . Sydney futures, we are looking like a little bit of pain as we get into the start of the friday session here in sydney. 1. 8 asutures down by well. Coming up next, we have a bloomberg scoop. Sources telling us softbank is actively looking for partners in india and could be a per could be in tiktoks assets there. This is bloomberg. Sophie lets get a quick check of the latest business flash headlines yum china closed its sale books early, guiding its listing price. Chinas largest Restaurant Operator aims to raise 2. 5 billion u. S. Dollars in the offering, selling 42 million shares. Yum will use half the proceeds to expand its restaurant network. Tesla shares are now officially in correction territory. The Company Announced a share trim its stakes. The stock fell 10 in new york, bringing the losses to 19 . The steepest oneday drop since march. The broader tech declines handing the nasdaq 100 its worst oneday loss in six weeks. Redstone is said to be weighing the sale of its u. S. Based Firestone Building Products unit for around 2. 5 billion. Firestone is part of bridgestone ofrica and reported profits 250 million. Its expected to attract interest from private equity firms and other Companies Involved in the roofing business. Bridgestone is the Worlds Largest maker of tires. Also watching softbank at the open in tokyo. We have a report mafiosi is looking for local partners according Masayoshi Son is looking for local partners. Sawosoft, walmart, oracle, think might be throwing its name into the ring for india. How does this fall into the broader strategy . Come up aks name has lot in the news in relation to tiktok. They have actually been playing an active role in negotiations. In the u. S. , they brought walmart as a lead investor. That group has fallen apart because the u. S. Trumps administration wants a tech company to make the effort. While reliant seems to be out of the picture and talks have stalled, it seems like softbank is still very much in the game in both countries. In india, son has been investing in india for a decade. It was million, with a new unicorn in india. They have a massive solar power venture. A deep network of business connections that son could tap for partnerships in that country. Sophie microsoft wants tiktoks cloud business. Walmart is after the yum consumers. What is selling interest in tiktok . Pavel actually, son had a chance to invest very early into the parent of tiktok. This was before the Tiktok Service when they only had a news app. Chinese newsas a aggregate. They will probably double their money. Tiktok is one of their best investments in the portfolio. Happens that whatever with Tiktok Sophie haidi how does this get structured . Do they buy it outright . With all the nationalist fervor surrounding these shares in the United States and india, is highly unlikely they would let a Japanese Company buyout tiktok. Its likely they would be working as part of the partnership, contributing cash. Be in a softbank must go it alone position. They have no shortage of cash. 42 billion of assets. Their chipmaker to nvidia and that will net 35 billion. Son does not like to sit on his cash. When people started to speculate, naturally, tiktok came up. It could be a venture we dont even know about. ,ophie Pavel Alpeyev bloombergs Asia Technology reporter. 50 x falling as much as 2 . They will likely boost bonds today. That is the set up going into the open. This is bloomberg. Sophie welcome to daybreak asia. Im Sophie Kamaruddin in hong kong. Haidi im haidi stroudwatts in sydney. Asias major markets have opened for trade. Our top stories this hour, asian stocks set to fall as the tech rally stumbles. U. S. Equities suffered their biggest fall in three months. Big tex dragging down as well as utility spikes. Theyve close their hong kong trail sales. The main lands largest operator aims to raise. 2. 5 million china is betting on chips to counter rising pressure from washington. The plan has the same highlevel backing given to the atomic weapons program. Theie lets take a look at way things are shaping up for asian markets. The pivot to value may not be a is dramatic given some strategists have already like the potential for cyclical heavy indexes to rebound like in japan. Is weighted tocs classic value sectors. That is little relief today in japan. Off by 1 . Nikkei under pressure as well. The yen is trading near overnight highs. Support coming through for bonds. They may extend the u. S. Yield a fall during asia hours amid concern over the u. S. Payroll result, the last positive print before more job losses. Lets switch the board to check in on the move in south korea. We have the kospi off by more than 2 . Reportscks on watch on that china plans to boost its domestic assistant domestic semiconductor. Samsung off to percent this morning at the start of cash trade. The korean won is on the back foot, above 11. The government word on social distancing measures, likely being extended. Plus local media reporting authorities will hold a meeting to discuss cash handouts and the fourth extra budget, the size of which could be 8. 10 trillion one. Haidi lets look at how we are shaping up in asia. Dollar andaussie yields falling after u. S. Stocks fell off overnight. We are seeing downsides when it comes to trading in australia. Off by. 6 as we get to the start of the staggered cash session. The aussie dollar on the back foot. 72. 59. Chinaconcerns about the and australian relationship weighing as well. We saw the risk reversal play out when it comes to the moderate declines in the aussie and the kiwi dollars overnight. The u. S. Dollar broadly stronger in the g10 space. The as a 10 year yield holding at. 88 five. Looking at trading in new zealand, seeing a downside of. 4 tent. 4 . Some analysts concerned the Central Banks will be one of the Major Players in potentially a new currency war leaving their doors open to potentially more extraordinary earnings using, i should say. Lets get more on the Market Analysis. We are joined by equity Portfolio Managers stephen glass. Her question of the day, let me start off with that the question of the day for the bloomberg users is how long will it take the u. S. Stock to regain their record highs . I also want to talk about the nuances of the overnight session. While we did see the selloff across tech, it was fairly limited. There did not seem to be a feasible day given there were not any haven bids, credit treasuries and commodities held up. Is this a pretty narrow selloff and if so, is it a healthy thing for the markets to be going through . Evening,it was an odd or trading session during the u. S. , because there was no real single impetus for the decline. The 10 year yield actually dropped a bit. It was a yield driven drop spread. It was really quite strange. Toetimes, it is hard describe these things as a fundamental backers. If we were to take a step in look at the Bigger Picture, these stocks, these highflying gross stocks do have a major selloff. It is always good to put numbers around this. To put numbers on the side of these companies, apple today is larger than the whole of the german market. Apples market cap is greater than the whole of the german dax. It is actually larger than the whole australian and brazilian markets. 8. 4 trillion, is more than japan and u. K. Combined. Most those companies alone are comprised with the lurch the thirdlargest market. There is a lot of money thrown in here. A lot of the money is retail money because everyone knows around the world retail flows have been booming. They have made up 20 of all trade compared to 15 in the preceding year. Retail investors tend to follow there is a lot of momentum trade if we. See a selloff, that is going to be exacerbated. Our senses these things are very expensive, they are due for a drop. There was no fundamental reason to explain. Justse these stocks are way too expensive in our opinion. Haidi yeah, we are about to bring a chart that shows that apple was a percentage of the russell 2000, still at 90 . We have spoken to so many people who have said there is no alternative. This is these companies have good longterm growth stories that have been accelerated by the pandemic. Dipou then buy every because he cannot afford as a longerterm investor to not be in the tech trade . Exited all the faang stocks. We do not have a single faang stocks. The only ones we have held over the past year are alphabet and microsoft. And that is less than 5 of our portfolio. We have materially outperformed the market. I think we have outperform Something Like 9 . It is actually possible to outperform not being in these faang stocks. The fact of the matter is, i know there is a comment that there is no alternative. But there are plenty of alternatives. There are lots of ways to make money in the market. We look at the stocks and we now look across the board. There are they are on a 2 yield. It just doesnt make sense. If we were to imagine no such thing as a stock market and you were to a by these stocks, even with the dark growth rates of 15 to 20 , it would take you Something Like 20 years to get your cash back. Expensive. St too thats if they maintain their growth rate and it is very hard. I dont think anyone can say with any level of certainty that in eight years time, these companies will be grown at that rate. I think it is very, very dangerous game to play. I would not be buying these so steep because they have had a massive rally. I think theyve got further to drop. There are other places to look. Some of these places are things Like Companies sophie on that, are there value opportunities to be had within tech . Steven very, very tough. Very tough. It is an old adage that buying value tech is actually quite a dangerous trade. People dont buy them because they are cheap. They buy them for the growth. So you have to marry the two. We do think alibaba makes sense. We also think tencent make sense. We think those stocks are valuable. We think pinterest makes sense because it just started to monetize its user base. We think those companies, we can make sense of the valuations. They exist. But they are few and far between. And they certainly are not in the faang stocks at current prices. Thank you so much for your insights today. Steven glass, portfolio manager. Lets get a check on softbank truth shares that are trading lower, off more than 2 . An august when he fourth level. This amid reports that the company is considering a bid for tic toc for tiktoks assets. Lets turn to Karina Mitchell for first word headlines. Karina thank you. Thailand has lost its 100 day virus free streak, reporting its first locally transmitted infection since late may. The case involves an inmate at a prison whose history shows he worked as a dj before being jailed. Further afield, frances throwing 100 billion euros at a stimulus plan aiming to revive the economy and president macrons prospect with the election two years away. The government of indonesia says it does not support proposals today late centralbank independence, and still relies on policymakers to help fund the fiscal deficit. However, ministers intended to maintain the sovereign bond purchases next year to support social protection amid the coronavirus. That despite Bank Indonesia saying this week, that the program has been a oneoff measure. Singapores central bank is to ease bank access to local and u. S. Dollar funding to protect the Financial System from the fallout from covid19. The Monetary Authority will provide additional channels to borrow money, and will allow lenders to accept more forms of collateral. The mas says the move is intended to contain any liquidity strains before they could become a serious threat. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Karina Mitchell. This is bloomberg. Fed isstill ahead, the added impetus and the dollars decline. Now seeing fx treasures where they say some u. S. Dollar consolidation is overdue. We will get his thoughts next. Coming up next, details on chinas plan to develop its domestic chip industry in a move to counter u. S. Restrictions. This is bloomberg. Sophie this friday, we are seeing chip stocks in tokyo and seoul under pressure with samsung, the biggest drag on the kospi. Falling as much as 3. 3 this, as we have to place under pressure. Growth stocks also declining in the region after we saw the tech selloff on wall street. Chip stocks under pressure on chinas reported plan to boost its domestic Semiconductor Industry. Are chief north Asian Correspondent Stephen Engle is taking a look at this and joins us from hong kong. The chip stocks rally we are seeing, it is looking to deepen. What are the ramifications . Stephen yes, the pullback we saw on wall street, obviously on the tech stock, was a broader based pullback. For the chip space, it was possibly tied to this bloomberg story that we have citing people familiar with the situation indicating china, not unexpectedly, will build out its thirdgeneration Semiconductor Industry with broadbased support. We know president xi jinping has earmarked about 1. 4 trillion u. S. Dollars to invest in hightech industries. Networks, from wifi too of course artificial intelligence. This story is that they are going to be focusing on these socalled that socalled thirdgeneration factory and design. As a pushback against the restrictions that the Trump Administration has put on Chinese Companies like huawei and others. The Trump Administration has put these restrictions on dozens of Chinese Companies restricting them from accessing u. S. Made chips and the technology, and even telling Companies Like tsmc, because they use American Equipment from the likes of applied materials, to nauset to not sell to huawei. It will be included in the next fiveyear plan with china, this bifurcation, if you will, of the chipmaking industry in the tech world as a whole. Haidi is bifurcation that they are saying it is a start of a new tech cold war between washington and beijing. So in this context, is the mood from china inevitable, given how critical these next generation chips are . Mean, you could say in many ways that this is going to speed up chinas evolution and development and innovation in the chip space, rather than relying on, as it does, almost solely right now, the next generation in the top level buying from the United States. I think china sources 300 billion dollars a year worth of highend chips from american designers and taiwanese fabs like tsmc. It is not a surprise that if they are going to be restricted from, that they will build out their own industry. That is why if they are going to be putting this emphasis in the that14th fiveyear plan will be discussed by top leaders next month starting in beijing, that it will be broadbased support, if it is coming from the top. Yeah, Interesting Times indeed ahead. Our chief north Asian Correspondent Stephen Engle and hong kong. Lets get you a check of the latest business flash headlines. The race to the tiktok assets is seeing softbank considering and. A bid in india softbank opens a stock. And it has talks of the deal platforms. Sources say negotiations have stalled but softbank remains interested. They are weighing their options after several countries have moved to shut tiktok down. Yum china have said to close its shares early, guarding its price of 412 hong kong dollars a share. Chinas largest Restaurant Operator aims to raise 2. 5 billion u. S. And offering, selling almost 42 million shares. They will use half of those proceeds to expand its restaurant network, much of the rest will be the new technology as well as supply chain and food innovation. Tesla shares are officially in contraction territory a week before the Company Announced a share sell that could dilute its value and a leading investor stake. S the stock fell 10 in the new york session during the loss of mondays close to 19 . That is the steepest oneday drop since midmarch. The broader tech decline handing the nasdaq 100 its worst monday loss in six weeks. Oneday loss in six weeks. They have discussed his views on tech evaluations amid the current uncertainty and told us how a trump or biden presidency could shift his companys investment position. Take a listen. Not the beginning of the end. But i would say we are coming up on one of the most uncertain periods in american history. We have a very divisive president ial election, coupled with a virus that has had a huge impact on the economy in the markets have been remarkably strong since the third week in march. It is not surprising. Valuations particularly, technology landscape, have gotten to some pretty extraordinary levels. I think it is not a surprise. I dont think it is any indication of the beginning of the end. But i think markets dont like uncertainty and we have an election in 60 days, where it is a tossup who will be the next president. And what the policies of that expresident , whether it is trumps second term or bidens first term, what that means for the country. What it means for corporate america, what it means for taxation. These are on certain issues and uncertainty. You have said that it would not change your investment personn, no matter which was to be president for the next administration. Are you changing your thoughts that . You think there would be widely different policies where there to be a biden administration, for example rather than a second trump term . Bill i dont know that it is completely knowable. I think a biden and his choice of Vice President suggests a more moderate, as opposed to more Progressive Democratic administration. To the extent that biden is sort of the winter. But i do think they will have different policies and approaches toward taxation, business, etc. Although i do think biden, Kamala Harris is in a moderate camp rather than a bidenworn administration. Vonnie i want to push you on valuations. You mentioned how things got a little fully valued or overvalued. Docking down 12 . Tesla down a percent. The realloser to valuation for these companies or a fair valuation in this environment, or could there be even more to go . Bill i dont know enough about either of those businesses to know whether the price is a fair price or not. But a lot of when i speak of valuation, of some of the more highflying companies, and lot is predicated on what will happen in the future. What is interesting is when you have a world with almost 0 interest rates, the discount rates used to discount the future are very, very low. With companies which are growing very rapidly, you know, low discount rate rates, you can get high valuations. Although the problem is, small changes in your assumptions can lead to a very different outcome in terms of what a business is worth. I think those small changes in assumptions can relate to confidence of what the future looks like. I think it is hard to depict the future when we have an uncertain political environment, and the inheritance or did he about the virus. Yesterday, the cdc says tell states to prepare for a distribution of a vaccine by november 1. If there is a real vaccine that is distributed in scale before isntd of the year, there one until the second half of next year. I just think it is not known today what those outcomes are. You factor in your risk premium should go up when there is more uncertainty. The risk premium relates to the discount rate. The risk rate causes a risk premium that you discount in the future. Companies,y growing you cannot justify the value placing a multiple on next years earnings which is they convention for many more mundane businesses. You have to make certain expectations about the companys ability to become profitable, and for those profits to grow at a rapid rate to justify the values of where these companies are trading. I think that leads to more volatility. Haidi bill ackman there, speaking exclusively with bloombergs vonnie quinn. Lets take a look at internet stocks trading in the korean market. We are seeing a fluctuating session when it comes to these names. Nc softcore about down by 2 . David down by close to 3 . We are seeing a broader decline when it comes to the benchmark kospi from the open. We are seeing tech and Growth Stocks follow that tech selloff lower in the u. S. That we saw overnight. We are also watching some of these electronics and chip related stocks after that report that china is planning sweeping new Government Policies to prioritize its Domestic Semiconductor Production and innovation industry to counter these u. S. China trade tensions. Coming up next, Goldman Sachs is facing court in malaysia. The date was set before its 4 billion payout. We will take a look at the implication for todays hearing. This is bloomberg. Mberg. This is what we are seeing in the final trading session of the week in asia. We are following the return to earth lower after we saw the tech selloff in the u. S. Stocks down the most in just about three months. We are seeing downsides when it comes to trading in japan. Down by. 4 . Hear,spi as we await to more conversations about a fourth extra budget as well as social distancing restrictions. Lower across the board in asia. Goldman sachs is due in court in malaysia today overcharges linked to the 1mdb scandal. The hearing was set before the bank that struck the settlement. It agreed to pay almost 4 billion to have those charges dropped. Lets get over to our Bloomberg Markets coanchor who has been covering this out of singapore. One of the applications given the settlement for todays hearing . First and foremost, it is happening at the top of the hour. That is under one hour. It is significant because we are expecting the court to drop criminal charges against goldman. It is significant for goldman because they have been waiting for this moment. It has been two years since it was found linked to this 1mdb scandal. Goldman one wants an end. If you recall, malaysia charged 17 goldman directors pass and president including the likes of the former asia chairman, he pleaded guilty in the u. S. For conspiracy to money laundering. Currently in malaysia, waiting to be extradited to the u. S. He faces similar charges. Andre balla who has been banned from the financial industry by the doj. You can understand the magnitude for goldman. And of course, this deal with malaysia, 3. 9 billion it struck in july to clear it of all the criminal charges. It is significant for malaysia as well because it comes under the administration, many prime minister, who came to power with a majority. It is seen as a win for his government. The money 1 of cannot come at a better time because it settled with a lot of debt. 3. 5 billion of bonds in 20222023 also, 70 billion since the fiscal stimulus. It does mean money will be used to help financially for the country. A winwin for both sides. We await the decision from the court. There is a slight chance the criminal charges may proceed about they but that would be surprising. Sophie Haslinda Amin in singapore, are coanchor. Lets get a check on how the currency corner is faring. The yen trading near its overnight highs, above the 106 level. Offshore yuan is holding steady. We are seeing the korean won on the back foot of 1190 while the aussie dollar is set for the worst week since mid june. 2 billion. More about that next. This is bloomberg. T. This is bloomberg. You can go your own way go your own way your wireless. Your rules. Only Xfinity Mobile lets you choose shared data, unlimited or a mix of each. And switch anytime so you only pay for the data you need. Switch and save 400 a year on your wireless bill. Plus, get 400 off when you buy the new Samsung Galaxy note20 ultra 5g. Sophie asian stocks falling following u. S. Cut apart lower. We saw the friday session come down to earth when it comes to the tech sector, driving u. S. Stocks the biggest in almost three months. Indices declined, particularly internet stocks. They are listed in korea, with any report china is trying to prioritize its domestic Semiconductor Development and the broader industry. We are seeing surpluses when it comes to trading here in australia. The to perfect percent in early part of the trading session. Thosealand also following at about. 25 percent. Not a lot of data to guide sentiment other than some daily drops when it comes to inflation over the philippines. Lets get to Corinna Mitchell further check of for the check of first word headlines. Corinna there are warnings of new u. S. Sanctions coming after this weekends Labor Day Holiday. Beenazil, where it has and 4 million infections deaths are slowing. India reporting daily infections of more than 80,000. The u. S. Trade deficit rose to its widest in 12 years in july with a server was on services plunging to its lowest since 2012. The overall gap of goods and services swelled to 63 billion, with the positive balance declining for the first time in three months. Importsrose 8 but climbed almost 11 . Democrats and republicans will Work Together to avoid a Government Shutdown ahead of the election and it close the stopgap. House Speaker Nancy Pelosi and treasury secretary Steven Mnuchin clinched an informal agreement to keep the government running after the start of the fiscal year on october 1. There is no progress on a virus stimulus deal. Global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. Im Corinna Mitchell. This is bloomberg. This is bloomberg. China is poised to raise more than 2 billion and is hong kong secondary listing. They set price guidance at around 5 of a discount with u. S. Shares. Lets get the latest with julia free ready. You have another firm heading home. What is the strategy behind this move . Its a bityes, so of a nobrainer, especially given the rising tensions between the u. S. And china, which have resulted in threats to delist some of these u. S. Trade and chinese firms because of disagreements over accounting issues and the chinese funds. Its raising money in hong kong gives them a foothold and its almost a hedge against tensions. It allows them to access a different pool of investors they may not have been able to access from the u. S. Moneyo gives them extra at a tight discount. Most of these firms have come at tight discounts. Its also, at least until yesterday, was a great time to raise money given stocks were rising and there was liquidity in the markets. Julia, are there likely to follow . Julia yes. There are consul he reports about companies constantly reports about companies considering this option. Alibaba did it last year, so that set the stage for more to do it. There are others. Basically, most of the companies that are eligible to do these second listings in hong kong are looking at it in some way according to bankers and especially because of the reasons mentioned earlier, its such a good option to hedge against rising risks and to access different ports of capital. , education firms are also looking at it. It will definitely be a great boon to hong kong to have these Companies Raise money here. Kong. julia here in hong lets take a look at some of the damage being brought and sold with the kospi under pressure. You have internet stocks under the gun here. They have been some of the best performers amid the boost for Online Gaming and other ecommerce plays, the likes of samsung under pressure. We are also seeing tip stocks under pressure. A selloff in risk assets lifting the u. S. Dollar. Rodrigo control says it will take more to reverse the trend. He joins us next. This is bloomberg. Sophie i of the weekend, we do ahead of the weekend, we do see stocks under pressure. Asian stocks led lower by tech and chip stocks weighing the most in tokyo and seoul and tech names are dragging in sydney. We are seeing the likes of others falling on the removal of the asx 200, which is to take effect later this month. Lets check in on the fx corner, moves relatively subdued when you look at the damage brought and stocks. To see the yen restored its haven credentials, but the jobs report may be a trigger for the positioning. The aussie dollar under pressure, noting the volatile volatility and the offshore yuan trading in the 684 zone amid tolerance for the crises. Dbs and mizuho noting a stronger yuan is ideal for beijing at a time xi jinping is pushing for a selfreliant economy. For more, we are joined by roderigo. What are you making of the lack of buying havens amid the stock selloff . Rodrigo morning. Well i suppose we have seen a little bit of selloff evident on risk sensitive currencies overnight. Now we are seeing a settling market. Ahead of payrolls, it makes sense them not wanting to take theyre risks and because move lower, investments are likely to see whether the followthrough in the next section in the u. S. Theres a little push makes sense and this environment we are likely to see during the day today. Sophie the dollar trading wider, but the greenback did hit a twoyear low. Are you seeing the potential for a currency war faring if they look to ease further . Weve had some commentary already from the ecb and the rb and that. Rbnz. Francine certain rodrigo certainly. The move by the fed, the decision of other Central Banks, and in particular, the ecb, the big one that has got a lot of attention recently in the last couple of days. Our sense is that the commentary coming from the ecb, there is a concern that spurred the gains and there are significant gains in the u. S. Dollar will complicate their own sort of objective of lifting inflation in europe. But at this stage, its just a concern, something they are looking at, not to look beyond that and say this is the start of a currency war. We think its too early for that. But if we were to receive another 10 decline in the u. S. Dollar, i think it will be a major concern. But for now, our sense is this is a topic for discussion, but not a topic for action, if you like, by the ecb, especially for next weeks meeting. Haidi weve also seen a strengthening of the yuan. How does that play, particularly as we go into election season in the u. S. . Does that change your year and view on where r d ends . Rodrigo i suppose a review has 6. 87ts likely to be at currency. Were getting closer to the bottom of that range. Now were seeing this revival of the u. S. Dollar, given the risk aversions. And then for now, our general sense is that from chinas perspective, a stronger but steady yuan works well for them. You dont want the you want to become too expensive because then it becomes a problem from an economic perspective. But it also brings on the political issues from the u. S. , as well. As steady as you go approach, which is been the message from the pboc and during the election, there will probably be an interest to keep the currency study and not to bring headlines in that direction. Haidi our sentimentals constructive for further outperformance in the aussie . Rodrigo well, thats a great question. We think it depends on your timeframe. We think in the nearterm, from a modeling perspective, hanging above 74, was looking a little bit too expensive for us. Over the nearterm, because of, purely from shortterm valuation perspective, we think around 72 looks better. And then of course we have this known risk events coming in front of us, which the resolution or reaffirmation of the european fund, and of course there is a certainty around the fiscal support or no fiscal support that the u. S. May get in front of elections. This uncertainty is placed in the view the aussie will struggle to perform. When we think of the u. S. Aussie dollar outlook over the next year, we think the u. S. Dollar has embarked on a cyclical downturn. So that would be very favorable for the aussie. And commodities are likely to remain well supported with the expansion that weve seen in china, which is very much led on infrastructure and the sort of paradigm and that would be supportive for commodities. Nearterm, were cautious. That medium to longterm, we think its got solid upside potential. Haidi always great to have you on with us, Rodrigo Catril states with us. Coming up next, the u. K. Premier terminated its broadcast in china. We get you that story next. This is bloomberg. Sophie a quick check of the latest headlines. Huawei is looking to expand its presence in europe as it fights 5g bands around the world. The Company Plans to open eight Flagship Stores by the end of the year in spain, france, germany, belgium, and the u. K. They will also launch experience stores. The app gallery is now the third largest. Facebook says its moving to stop Voter Suppression and electoral misinformation by banning new political ads ahead of the november vote. This is after they said it will prevent candidates and parties posting uncontested measures messages ahead of the polls. Mark zuckerberg said he is concerned about election uncertainty and official results being announced. Bridgestone is weighing the sale of Firestone Building Products around 2. 5 billion. Firestone is part of Bridgestone Americas and reported profits of 250 million. Its expected to attract interest from private equity firms and other Companies Involved in the roofing business. Bridgestone is the Worlds Largest maker of tires. Nba legend Michael Jordan is pushing into the Online Gaming space after receiving a stake in jack kingston. He will provide draft kings. He will provide guidance. Cofounder spoke with bloomberg. Were really excited to have Michael Jordan join as a Strategic Advisor to the board. I oversee marketing and rent building. I think see think hes one of the geniuses in terms of brand building. Hes built an iconic image and brand around himself and brought that to millions. Its an entire Cultural Movement really and i think just being able to collaborate, work with michael on our different business initiatives, our marketing, our brains, and just the daytoday interactions will help on all aspects the way we go to market and connect with our customer. To yourded 1 billion capitalization so the market was excited about what he could provide. Talk to us about the focus on marketing and how competitive it is because youve got new entrants into the market. Other also got competitors. There has been worries that there has been too much focus on marketing. Is that going to be a key concern or do you think you can get more focus . No, i mean draft kings is a performance marketing company. We invest where we think we can get a good return on the Marketing Investments were getting. The Sports Betting expansion in the United States has dramatically increased ltds in those markets, and then some markets where theres casino offerings and other things, all of that adds up to a really valuable customer were chasing after, and theres millions of them throughout the entire country. We believe our culture of analytics, performance marketing, and using that framework to go to markets and invest aggressively, but up to our limits in Customer Acquisition is the right formula to win, longterm. We have eight years of experience doing that, and now we are applying that to Sports Betting and casino. How much of that is trying to capture the customers attention while you have them . Many are working from home, so they are feeling like gambling and Sports Betting is something they have time for. Are you worried about a shift if we do end up going back to work . How do you continue to capture their attention . Day in, i mean its a day out effort to make sure we understand the context around sports and were staying relevant and connecting with the customer. Last year, there was an nba playoffs. There wasnt major league baseball. Our team was scrappy and hungry to retain every last sports fan in the United States, so thats what we do. Were a content Companies First and everything we do is meant to drive the retention of the audience thats so coveted right now. Why a physical location . You announced this location across from wigley field. As a kid who wrigley field. As a kid who ran around comiskey park, i wont fall you from going to the north side than the south side, but what does it bring you . What does having a physical location at . A officialngs has partnership with the cubs. I think a crown jewel of that agreement is the right to build a retail sports book, which is really going to be a flagship destination sports book in the heart of wrigleyville. Were in the process of collaborating with the illinois gaming board, as well as the city and state officials to make sure we can get our plan approved and break ground. I believe draft kings, as a part of that community, we can add a lot to the experience of going to a cubs game, stop by the book, make a couple bets, cash them on your way out. It could add to the experience i think fans are looking for. But we wanted to do it the right way. We wanted to build relationships with the city and collaborate with the gaming board and make sure thats a fantastic relationship all the way through. Cofounderat was the and founder of draft kings speaking with Caroline Hyde and taylor riggs. Staying on sports, the English Premier League terminated its lucrative football broadcast agreement in china, reportedly worth more than 600 62 5 million over three years. 660 5 million over three years. Our beijing bureau chief says they are not pleased by this. They have a huge following in china. You know, they have tracks that are open here, chinas chinese owners, so it would be a big deal to watch the games. I suppose they could find ways to do that online. Earlier also, the main state broadcasters relegated matches from its main sports channel to one that is only for paying subscribers. Significant if they are cut off from one of its major markets. A geopolitical backdrop against which were seeing this happen. Sharon well, there are rising tensions between the u. K. And [indiscernible] there were problems with negotiating the contracts. They put out statements talking about how there were disagreements over the payments and also negotiations over the next contract. And a person familiar did tell bloomberg that they are looking for another broadcaster in china. So, its unclear if there is Government Intervention in the inability toan reach a contract. Sophie not a lot of time for that to happen with the new season scheduled to start september 12. Whats next with what is happening with upl in china . Sharon i guess we would have to see if there is another broadcaster that comes into the mix and how those negotiations go. And if the government get involved in these negotiations or if there are statements that indicate that its political in nature. Haidi our beijing euro chief, sharon chan bureau chief, sharon chen, with the latest. The number two mma company in the world, peter will joins us exclusively. Before we headed over to Bloomberg Markets for the china open, lets get a quick roundup of how markets are trading so far in the early part of the friday session. We are seeing the extended selloff following the losses we saw overnight. U. S. Stocks sinking the most in almost three months. We are getting sentiment passing through to the asian session. Declines ing internet stock names and. Emiconductor electronic names here in australia after the rebalancing, we are seeing not a lot of positive sentiment and concerns about an extension of that lockdown continues to weigh, as well. The aussie dollar on the back foot. 01 lower zealand, as we get the super dovish analysts question whether we are setting up for the kiwi to be front and center in the global currency war. Sophie tech stocks will be watched in hong kong, as well as china. They see a drop of 1 , with the chinext likely to see the biggest pain. We do have growth in interesting sector, such as bgm investments, saying they are the best markets for asian equities, even with valuations looking rich. We are seeing downside risk, potentially for taiwanese stocks, futures fighting. 9 while the offshore yuan holding 6. 84. 4 well have more Market Analysis throughout the day. Kelly joins us ahead of the china open. Eddie on this sector of a currency war, and j. P. Morgan head of asian equity strategy, james sullivan, on how the selloff and risk assets is spreading through asian markets. So far at the start of trade, were still questioning whether the selloff in value soft and Growth Stocks will be what we saw in the u. S. So far, shipmates under pressure in the region with the likes of sensing and hyneks. Thats it from daybreak asia. Our markets coverage continues. Shanghai and shenzhen, stand by for number of markets the china open Bloomberg Markets the china open. This is bloomberg. Yvonne it is not 00 a. M. In beijing and shanghai. Welcome to Bloomberg Markets china open. Im yvonne man. David im david ingles. We are counting down to the last session of the week on the chinese mainland in hong kong. Stocks across the region ending the week with the kleins is the tech rally stumbles. U. S. Equities have their biggest