Can he avoid the curse of rolling door leaders . And the s. E. C. Is examining electric truck maker nikola over a short sellers allegations of fraud. Our u. S. Futures are coming online. Flat at the moment after u. S. Stocks rose in the regular session. Stocks rebounded from blast last weeks selloff with the likes of high dimension, oracle, tiktok. Now, the dow ended at the highest level in more than a week. The s p 500 had every sector in green and was led by real estate and tech. Take a look at what oil is doing at the moment because its gaining ground and its above the 37 a barrel level. This after feeling the pressure in the new york session. Opec downgrading its outlook for the Global Oil Market and cut its Global Oil Demand forecast for each quarter to the end of 2021. This ahead of that meeting of ministers that will be held virtually to assess the curbs theyve implemented. We go to hong kong with more. This tuesday asian features are mixed. Trade numbers from india as well as indonesia, plus we have chinese monthly activity, data likely to show that the recovery is continuing. So moodys has growth at 1 15 this year. Little change with the new Prime Minister pending a vote in partly yes. And stocks adding. 4 . Highlighting the government this rning signaling plans to require financial entities to get the latest read of Consumer Confidence falling azzi oyear low and the dollar falling to a twoyear low and check out the offshore u. You yen, back at 680, trading at a yeartoyear high. And j. P. Morgan raising their year end forecast. Pointing at the chart on the terminal as Asian Companies are joining the borrowing binge, perhaps to get ahead of potential u. S. Election spreads. A bit of a premium, that yield bidening a bit, the most since april. Strong demand for its biggest yonled bonds sale in 20 years and this week kim china getting in on the action with a mega offshore sell, which will test the u. S. Over sanctions. And today we learned the vice chairman is looking to raise money to capitalize on the stocks rally and alibaba also on watch in its talks to invest 3 billion. So oracle may have sealed a deal with tiktok but now the hard part for oracle, winning the governments nod. Lets get more from naomi. How dulled the Trump Administration respond once we heard more details about this deal being made and what are the imply craigs . So far the Trump Administration has responded positively. Treasure secretary Steven Mnuchin told reporters that the white house had a lot of confidence in oracle and he outlined what he expects will be the approval process. A twotrack National Security review. One like an enter Agency Review that looks at National Security implications and then there will be a separate security approval process by the commerce department. Weve also learned this is not necessarily an outlight sale, sell, right . More like a corporate restrukting . How could the administration respond . Thats the interesting thing. Trump has been saying for quite some time that he expect it would u. S. Business tiktok to be sold to an american buyer but what oracle has proposed, essentially, just as you said, a corporate restrurkting. The details we have, so far a lot is not known but oracle would likely have a steak in the u. S. Business and it would also essentially host tiktok u. S. Business in its Cloud Computing services. Theres also talk of at least two Share Holders that are currently in that would also have stakes in the deal but a lot of the details of the terms of the full restructuring arent known. One thing the Trump Administration will be able to point to as a win for them but, as secretary treasure steven money chin mnuchin put it today. There will be thousands of new jobs that are coming to the u. S. And tiktok will essentially create what its talling tiktok global, headquartered from the u. S. Were hearing that we could get a finalization of all details over the next 48 hours or so. So what happens next . What should we be watching out for . So the consecutive order that trump first signed requiring the sale in the first place required that a deal by finalized september 20. That doesnt give them a lot of time. Well be looking at whether china agrees to sign off on this plan. The Chinese Government has indicated that it would also wants to review the details of such an acquisition. The other thing we should be looking for trump previously indicated that he wanted this deal to result in a big windfall for the u. S. Government but theres not an obvious mechanism for either tiktok or the buyer to pay some sort of fee to the u. S. Government so whether trump decides to abandon that requirement or they find some way to have a compromise on that so that the u. S. Government gets some money out of this remains an open question. What what that will mean legally, right . Naomi, great to have you on. Lets join to carina mitch early mitchell for the first word headlines. s brexit bill has class ha passed the first part of parliament. T would give Boris Johnson the right to override parts of the deal to the e. U. He said its essential for the political integrity on the u. K. The u. K. Has not e. U. Has not taken that particular re involver off the table. It seems incredible that the effort u. Could do this. Were not taking powers in this bill to neutralize that threat but obviously reserve the right to do so. No other news, the European Union has stepped up demand for china to further open its market to more investors. The blocs representsive said the ball is now in chinas court. The effort u. Wants beijing to pursue fair ireconomic policies and provide more concessions. A lot still remains to be done in other and important chapters of the agreement, particularly into areas that one is market and the other is sustainable development. We need china to move on these two issues. China has to convince us that it is worth having an investment agreement. Suga gains his first full day as Prime Minister elect. His role will be starting wednesday. The vote marks the first change of Prime Minister in almost eight years after abe stepped down because of illness. Powered by more thaten 2,700 journalists and analysts in more than 2, 500 countries. Heidi, over to you. Heidi beyond oracle and tiktok, analysts with the Australian Policy Institute looks at the bigger challenges polesed by chinese social media. But first, a warn that the stealth rotation in stocks could pick up team. The steam. This is bloomberg. U. S. Stocks rallied on monday ahead of a number of Key Central Bank decisions this week from the fed, b. O. E. And b. O. J. Joining us to discuss is Charles Schwab chief goebel investments strategist jeffrey kleintop. Tau for joining us. Weve seen a steady rally for u. S. Markets. I wonder how long this will last and what we can expect in the fall. Given that a lot of the penaltyup demand on Global Recovery from the pandemic seems to be fading now. Thats right. I think were in the second stage of the recovery. The first was the initial snapback. Now were seeing various lock downes reinstituted around the world and a slower pace of economic rebound that will probably linger until we get to stage three, which will be defined by when a vaccine is available. In this intervening time, however, hopefully just months it takes, i think well begin to see more of a rotation in leadership and that could point to maybe tired Tech Leadership and a return to maybe some of the more areas of the market. So which areas are we talking about . Especially going into the Central Bank Decisions . Of course we are seeing an increased focus programs on inflation. Thats right so i think we could seibert performance from financials and it was interesting because in the last few weeks as weve seen the selloff in tech shares, financials have been leaders but even today financials were among the groups or at least yesterday in the stakes, we saw tech financial stocks being among the leaders. Tex continue, as we see the fed and other Central Banks keep rates to zero or negative in the short term but communicate that they be letting Inflation Expectations continue to rise. That could be a good indicator of financial performance. You start to see some doubts breaking that suggests the market needs to hear more from the fed about how it plans to get inflation right. What about indications with the dollar . Does the slump continue . We believe it does and primarily against the euro, although we may continue to see it against the yen as well. The effect could be that further the prices boost material sector. We have every letter under the sun in gauging what the shape will be across different economies. What does that mean for Companies Guidance . Does that mean greater volatility coming Going Forward . Particularly since weve had a bit of a reality check when it comes to the vaccine optimism . It depends. Theres been a pretty powerful rebound in the all the supply chain. Its seen a strock rebound with good auto demand and the restocking of inventories but more on the service side, travel, transportation, restaurants, those areas of the economy which still represent a very large large portion of the economy and certainly a lot of employment havent had the same visibility in terms of reopening and reestablish their vision plans. Especially as things begin to cool down in the Northern Hemisphere and Outdoor Dining isnt as attractive an option. I cant believe were getting back to this, the possibility of Nodeal Brexit. The chart showing shows risk reversals on the pound returning to last time when a Nodeal Brexit was seen as a real parliament. Weve been seen a little bit of uproar in parliament against johnss proposals but how big a risk is this for the markets and also, does it present some opportunities . It may be less of a risk than the market is making it out to be. Theres a potential for a Nodeal Brexit but a year ago, as you mentioned, there were a lot of concerns about making that Withdrawal Agreement in october, there was a lot of fear that that wasnt happen and yet it did and i think well see the same thing as we get down to a lastminute deal, probably in october. I think the fact that u. K. Stocks are still down over 20 pks in year, sharp little underperforming their european peers, such as germanys, and the fact the pound has fallen so far, a potential deal could lead to a rally in the pound and u. K. Stocks. Particularly in financial stocks due to a risk in the market and current concerns that the bang of engine dwhranled might have to go to negative Interest Rates in order to offset the heartbreak of a brexit. Thank youful we appreciate your time. Bill gross says investors should be playing defense as stimulus ebbs and it becomes harder to stomach the massive deficits. Hich trends do you see accelerating as the pandemic goes on . I think globalization has turned into deglobalization. Which is not deflationry but inflationary and thats going to change outside the pandemic and of course the pan dem i guess has not helped globalization. Its actually accelerated deglobalization. So to some extent, yes, the virus is changing things. Bill, i have to go to your memo today where you talk about a 6 trillion deficit. Weve heard this from other course co sources. Sohmreat economist claudea has made clear we need much, much more deficit coverage. What does the bond world do if we get out to 3, 4, 5, and 6 trillion deficits . The bond world at the moment is a melding of the fed and the frushry. To my way of thinking, this sounds rather derogatory but the fed is the dogs tail and the treasury is wagging it. To a certain extent if the treasury wants money then the fed will provide it through m. M. T. And through purchase, which theyve done. Now, do i endorse that . No. Is that a constructive thing down the road . Probably not. Es an inflation probably, yes. Like in japan. But well have to say. Yeah, deficits can increase but gosh, were at 100 of g. D. P. Already and it goes to 120, 130, 140,150 and at some point, as others point out, if the fed then out of it or theyre inflation is going to come back. In nee nee at any rate, weve had them in frbles and commodities. The bond world fell off its collective chair. Now we have permanence of growth financial repression. Im going to give you great credit for coming up with that concept. Do we have an asset bubble or bubbles plural because we have your financial repression . Oh, i dont think so and we have an asset bubble because Interest Rates are near zero and negative in many parts of the world and that, to my way of thinking, through dividend discounts models and so on have inplated Growth Stocks ask anything that have profits far in the future that are growing fast. To yeah, with you financial repreparation repression, if we want to speak to that, has always been interpret under the rug not only by pow elle butly yellen and t by bernanke, etc. Theyve other focused on inflation or focused on reinvigorating the economy and to the extent that werees and pension fund and savers so to speak are being hurt, well, that can just wait but at some point it cant and i think were beginning to see that. We dont have to talk about prudential or Insurance Companies or banks. We can talk about mom and pop on main street in des moines, iowa, where they have no more savings and theyre not able to earn money on whatever they have left. And the problem year by year is getting increasingly greater and i think ultimately that becomes e real chink in the armor of this entire financial complex. Speaking to bloombergs tom king. Coming up, with wednesdays vote seen as pretty much a formalty, the focus turns to sugas policies and cabinet picks. This is bloomberg. Yoshihide suga is expected to be installed as japans new Prime Minister on wednesday. The question now turns to his picks to help run the country. Jeremy joins us from tokyo. What do we know about the likely cabinet lineup . Is it going to be a continuity lineup as well . Now that Yoshihide Suga has been elected the president , he will form a new cabinet and the names of the likely ministers are expected to trickle out later today. He has said he wants to appoint reformminded people who could come from any faction. So far reports are that he plans chairman the committee and in a leadership reshuffle. He also plans to name a form early affairs and Communications Minister as chairman of the partys General Council counsel and the currents Committee Strategy chairman will take over the partys chairman counsel title, replacing his election rival. And we know that suga has pledged to continue with abenomics but what does that mean . Because at the same time he wanted lower cell phone fees, which doesnt help with the inflation target, does it . Thats right, hes been saying he will push ahead with abenonics which leaves hes likely to leave economic policies as they are while trying to make his mark by bringing cell phone charges, as you say, down. One thing could be the timing of growth in starting a stimulation. Keep in mind japan already faces macroeconomic issues that have been made worse by the pandemic. And theres been talks about a snap election. Is that something that we expect in the next couple of months . The general election will have to be called by objects 2021 and some senior lawmakers have hintsed at a snap election after new Prime Minister is elected. The finance minister has said an election may come soon. The defense minister expects one possibly last month but suga technically would have the final say. Difficult unless the virus has been fully gotten under control so it may not happen anytime soon. Coming up next, chinese social media invasion and an explanation of why the challenges polesed by tee t. K. O. And wechat are bigger than we know. This is bloomberg. Watchingou are daybreak australia. Im karina mitchell. 120 9000 reported deaths from covid19 and the World Health Organization reported more deaths in a single day than ever before. India remains the second most affected country, with a surge reported there each day for the last five days. One day after astrazeneca announced its Covid Vaccine trials have resumed in the u. K. With oxford university, reuters is reporting they remain halted in the u. S. It says regulators are still examining the side effects affecting a reddish patient. A british patient. In theth toll has hit 35 west coast wildfires burning from california to washington state. Thousands of homes and buildings have been destroyed, tens of thousands have fled their homes. Fire fighters could have another problem this week the forecast is for low moisture and high wind. The u. S. Is now recommending americans reconsider travel to hong kong. The data permit raised its advisory for the city based on the implementation of the National Security law. U. S. Citizens in hong kong are strongly advised to avoid demonstrations. The move comes as u. S. China ties remain strained over the coronavirus, the treatment of leaguer michael of uighur muslims, and hong kong. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im karina mitchell. Haidi we stick with china. Tiktok willid for need the blessing of the president. Our next guest says there are still wider issues. A cyber analyst with the australian Strategic Policy institute. Great to have you on. Does this investment by oracle potentially reassure you when it comes to some of the censorship issues, the suppression issues that you have raised in your report on tiktok . Fergus based on the information we have at the moment about the oracle deal, i cannot say that i am hugely reassured. Of course, when we look at this problem, there are two big National Security issues. One is the privacy side of things, and the other side is censorship and the potential for vectorto be used as a for Information Operations. That, in theview Media Coverage that we have had so far about tiktok, the data privacy part of the equation has but thet of attention, other very important part of the National Security question here is to what extent can tiktok be used as a vector for . Isinformation from beijing haidi we have seen wechat long being in compliance with beijing. That is largely uncontested. Tiktok, though, says that they do not. What are your findings that show this is contrary to what you see . Fergus what we have found is tiktok has adopted a policy as they have expanded around the world of trying to be a political to be apolitical. What we have discovered is mainly after the murder of george floyd in the United States and the activism that flourished after that, with the black lives matter movement, a happened on tiktok. That put tiktok in a position where it could no longer credibly continue to have this ticaly of being an apoli platform. What that means is now there is a lot of political discussion happening on tiktok, and bytedance, the company that owns and operates tiktok, is essentially under the thumb of the Chinese Communist party. The ccp has enormous leverage over this company, and that means it would be trivially easy bytedancep to force to very subtly nudge up or that would bet preferential to one president ial candidate, for instance. E where a lot of political discussion is happening, and that is very concerning when you consider that the ccp have this enormous leverage over the company. Different is the content they suspect from, say, other Global Tech Companies like facebook, twitter, that are trying to curb misinformation . Fergus what we are up here to be seen on tiktok is that ,ytedance has adopted a policy certainly in countries like vietnam and russia come of almost censorship as a service. So tiktok will say that what they are doing is complying with local law, but in our view, what it appears they are doing is over complying with local law. For example, in russia, putinis onief is shadowbanned tiktok, which means people can post using that hashtag, but it appears to all other people on the platform, including people all around the world, that that post hasnt gone out. Hashtags related to lgbtq related issues are also shadowbanned in russia. Notter, facebook, etc. Do over comply with local law in that way. They do not completely block hashtags. They leave it up to the users, up to the russian people, to decide whether they want to exercise their free speech in that way. Haidi and tell me a little about the privacy part of things that we have been more focused on here. Is that a factor that worries you as well, especially when tiktok comes out and says, no, that should not be a worry, because they are not storing the information in china, that it is in the u. S. And singapore and that they do not share it with beijing . Fergus tiktok may very well say that the information is not stored in beijing, but that does not mean that it is not being accessed from beijing, and, in fact, tiktok themselves say that their goal is to minimize access to tiktok user data from beijing, which is them admitting that that data can still be accessed from beijing. And that is very worrying, because there is essentially no firewall between the authorities in beijing and that tiktok user data, if it is being accessed from beijing. Should australia and other western nations be taking a stronger stance against the use of tiktok within their jurisdictions . We know the Australian Government has a pretty full plate when it comes to canberrabeijing tensions. Fergus i think governments, like the Australian Government, for example, can take a stronger stance on this issue, but they neednt do it in the same way the Trump Administration has done. What the Trump Administration has done is quite a blunt policy move. View, it would be much better if governments like australia ensured that all apps had more transparency around and also, importantly, that apps like tiktok and wechat and facebook and twitter and all social media apps be required to investigate any disinformation and Information Operations that may be taking place on their platforms. Because dont forget, youtube, facebook, twitter, in the past all investigated Information Operations on their platforms that they have said have come from china. That ifs highly likely beijing have been conducting these Information Operations on those platforms that they would do the same on tiktok which, after all, is owned by a chinese company. Go, i before we let you the to get your ideas on compiled 2. 5h a million people. What do you think is the intent here . Fergus this is, yet again, another story that adds to the wider narrative of china having a voracious appetite for this type of information. And what it appears is happening is that there is sort of mosaiclike, a picture being constructed inside china come of other societies and people in them, influential people, that can then be leveraged for geopolitical goals. Great fergus ryan, having you on, with his thoughts from canberra. Sayss global head of m a m a is back, and it would seem he is right after an unprecedented day monday. We have been talking about tiktok, but also we have arm and softbank, gilead, verizon. In and ask close of interview , theyloombergs ed hannon discuss the future of dealmaking of it. And april, a lot of capital raising, a lot of pulling down revolvers, because it was about liquidity. A lot of concerns about what happened last time. And as the equity market stabilized and started to recover, number of ceos said i have a strategy. Becomertunities actionable, i will start looking at them again. Lookther thing is if you at valuation running at 11 times for stuff reported in the public market, the lowest since 2013, so there is a bit of a valuation opportunity that people are taking advantage of. If that is sustainable given the equity market is highly questionable. Ed and we have seen a return to certain kinds of deals being done. One of the interesting features as we have seen a lot of role being involved. We have seen, just this morning, the arm and arm deal where the u. K. Government looks to have a role. And certainly tiktok and oracle, where the u. S. Government has a role. If you have mark it is a great question. I am not sure i have a great answer for you. But it is clear we have seen relative regulation. I think most of us would conclude, as practitioners, that the Regulatory Environment has gotten generally suffer, whether it be around antitrust, so it is not that surprising. And given a lot of concerns about sustainability and what we do about it, we are in an environment that is not going away. We will see more government interventions. You have to plan around them and plan for it. Ed what can companies do to plan for it . Do they look at a risk of the deals closing, does it change some of the conditions they may ask for in terms of getting something under over the line . Mark it is a little bit all of the above. You have got to be smart in the planning process. You also have to look at feasibility. Can you really get something through . In an environment like this . And the other thing around we areability and esg, seeing a lot of effort be put in by our client base, whether it be on the fossil fuel side all the way through technology. People are planning for it and embracing it. And i thicket is high time we did it. Shafir speaking with bloombergs ed hammond. Coming up, a trifecta of major Central Bank Decisions all ahead. What does it really mean for markets . More analysis, next. This is bloomberg. Asian markets anticipate data coming out of china with investors pricing in japans new leader. We are also looking at the yuan, rally into a 2020 high. Is the yuan headed, especially on a day like today when we have a data dump coming from the country . It is just going to reinforce this view that the chinese economy is coming back to life much more quickly relative to the United States economy and some of the other major places around the world, and that is partly why you are seeing the strongerd lower, or from its point of view, against the dollar. That is really something that is part economics and partly about the fed being dovish. People expect more of the same when the fed meat. And also the diminishing risk that the u. S. Election is going to be a rayleigh a really major event for currencies. So this is helping drive the yuan lower. It would take quite a bit now to turn things around. You can see through the Options Market that people hedging for a weaker yuan are gradually thing up on that idea up there there people betting that the yuan will have a significant decline. People are accepting that the u. S. Dollar is in a medium balance train. We will see more strong data today, and the people were not happy staying with a situation, where the dollar is generally a weakish currency. The pboc is fairly neutral, some people even say fairly tight. All of those things are coming together to make the yuan look relatively attractive, even allowing for all of the rhetoric on the surface, the noise between the United States and china. But none of that is really turning anything material. We are not seeing significant action between the United States and china. There is a lot of noise but nothing really damaging to take people away from the fact that the yuan is a stable currency. Put all that together, and it is becoming a little onesided in the direction of a stronger yuan. You can see that playing out in the market as we head towards the 6. 80 level for dollaryuan. Haidi and we get the monthly domestic china activity markers today. So as we have seen supplyside driver cover, will that lead to an uptick in asian sentiment . Mark we will probably pretty much look at the chinese gauge of equity for that. It has been going a little sideways. People would probably like to see chinese equities make some new highs. If we get an endorsement from the data today, particularly Industrial Production will be a that, to show that chinas recovery is still on court, we could see decent strength in equities. A liftuld give asia across the board and prove sentiment across the region. What we are seeing on the back of the tech move in the United States, some of that is filtering through into korea and taiwan as well. Haidi Mark Cranfield in singapore. Coming up next, the sec may be looking at allegations electric truck maker nikola deceived investors. This is bloomberg. The sec is said to be examining nikola to assess the merits of a short sellers allegation that the electric truck maker deceived investors about its business prospects. Joining us now is our bloomberg sec reporter. This seems to be based on a september 10 report. What exactly is the sec probing here . Atso the sec is looking determining the merits of the report, which call into maybe overstating nikolas technology. Anytime a Company Makes a statement, they need to make sure a reasonable investor would consider that truthful and not misleading. Thatoking to make sure those statements are in line with that. Kind ofo what are the likely outcomes that we are looking at . One thing to point out business a preliminary probe. It does not necessarily mean there is going to be enforcement action. So the agency is going to look at all of the disclosures the company has made over the recent years. In the companys response today, they said they shared information, so they want to make sure that all of the risks involved were disclosed to investors and that the company was not painting a rosier picture. The interesting thing about this case is they do not have a product yet. It is very much in the future. It is similar to a biotech company. So there are a lot of they do disclose those risks. The sec wants to make sure they did not overstep and overpromise what it is currently at. Haidi all right. Our bloomberg sec reporter Matt Robinson there. A quick check of the latest business flash headlines. The ubs chairman has been studying the feasibility of a megamerger with rival credit suisse. An exercise and there are no formal discussions. And actions are being weighed against citigroup over control functions that persisted even after their the lenders spent an additional 1 billion in that area this year. Citigroup says the bank remains in discussions with overseers, including the federal reserve, and no imminent action is expected. Alibaba said to be in talks to invest as much as 3 billion in grab. The chinese ecommerce giant would be the only investor in the world and would potentially grab some of grabs stocks held by uber. It would give it access to data on tens of millions of users across eight markets. Tencent picked singapore as its asian hub, joining alibaba in the race to boost its presence. T currently has dozens of job openings in singapore. Billionaire steve cohen has finally reached a deal to buy their new york mets after a ninemonth saga. Terms of the transaction were not discussed. Cohen was in talks to acquire the team late last year but negotiations broke down. The deal isorts valued at around 2. 4 billion dollars. Softbank will raise more than 10 billion for selling more than one third of its wireless arm. It will also sell softbank court shares at 1204 yen a piece. Nvidia willarm to ceo as hee considers taking the company private. We are seeing u. S. Futures higher after u. S. Stocks rebounded after last weeks selloff. The dow at the highest level in more than a week. In the s p 500, every sector there gaining ground. A bit of weakness in the bloomberg dollar index at the lowest level in more than a week. The japanese yen seeing a little bit of strength, the strongest level in more than two weeks, breaching that 106 level. The nikkei futures right now unchanged, but we could see some pressure if this yen strength continues. We are now seeing a kiwi stock gaining for a second consecutive session, a oneweek high. We saw the kiwi dollar leading gains among g10 currencies. Zealand now dialing back covid19 restrictions. That actually also is a similar story playing out in south korea that led to the south korean won theing as well as government there relaxed social distancing rules. Futures under a little bit of pressure. We have the rba september meeting minutes. The aussie dollar a little bit of strength in the last two days or so, rising against the usd on a weaker greenback but higher commodity prices. Watch out for those minutes and a discussion around further easing policies. And of course a reminder that the bloomberg green festival continues, focusing on core issues of climate action. Tuesdays lineup includes the phillips ceo. Plenty more ahead on daybreak asia. This is bloomberg. Good morning. We are counting down the asian major market open. Shery welcome to daybreak asia. , a bid for emerge tiktok u. S. Operations which faces a National Security review and must win the blessing of trump. Im studying the feasibility of a mega merger