Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240712

Plan, but Republican Leaders warned the gap remains wide. Mitch mcconnell says the plan contains poison pills. Bloomberg economics cuts its growth forecast for japan, saying the recovery is weaker than expected. This hour brings a survey showing what business thinks. We are getting breaking news crossing the bloomberg. President trump has moved to sign an order which would expand u. S. Mining, citing a threat from china. President trump has moved to expand rare earth mining in particular according to an official. We know china has in recent years have a huge presence when it comes to rare earth mining, which is used from everything from cars to mobile phones. Officials say President Trump has moved to expand rare earth mining for the u. S. There is a political element where union votes will be key going into the election. We will get you more details as they get to us. Lets take a look at the thursday session with sophie kamaruddin. Miers we are watching across the region following those lines from the u. S. , trump signing an executive order to boost mining. Asia has a holiday week. China, hong kong, south korea, taiwan offline for the rest of the week. We will get korean trade data along with a Rate Decision from the philippines. Lets check in on the tone for markets in the region early this thursday. Futures pointing slightly higher and invesco seeing a shortterm boost for asian risk assets after the president ial debate. Markets are positioning for a potentially messy u. S. Election. Ikkei futures are rising the aussie dollar extending gains potentially for a fourth straight day. This is on prebudget details from the morrison administration. We are keeping and i on Energy Stocks in sydney with oil mackenzie predicting an mma boost an m a boost. Belowll have gold trading 1900 after the worst month since november 2016, as we saw the dollar snap a five month decline, but gold still managed to come through. Pulling up the chart on the terminal for a check on oil, we are seeing wti edge slightly lower after the biggest rise in two weeks. Oil prices pretty much going nowhere, as we saw over the past quarter, despite the volatility. Signals are pointing to more weakness for oil prices with spreads for brent and wti. Getting a u. S. Stimulus package in the back would be a boost for recovery. We have reason to keep our eye on that. Shery u. S. Senators have passed a stopgap funding bill to avert the Government Shutdown while house leaders have postponed a vote on the democratic stimulus bill. That should give Stephen Mnuchin and nancy pelosi more time to negotiate the pandemic relief package, but agreement still appears some way off. Laura davidson has the details. What does this mean in terms of getting another round of stimulus measures before the election . Laura there are several things republicans and democrats agree they want another round of stimulus checks, more money for the paycheck protection program, Small Business loans. They want to have some money going towards unemployment. There is something they dont agree on, how much money state and local government should get. There is a big fight going on over tax breaks in the original cares act. This is something trump in the New York Times article about his tax returns, he used. Democrats want to get those revealed. They dont agree on the overall price tag, so that will be the discussion going forward. There was some momentum today. They delayed the vote to get more time to talk. House lawmakers are going to vote tomorrow and then go home. If something doesnt happen tomorrow, the optimism fades. Haidi we have seen a few pieces of breaking news from the white house, including the executive order signed to support more rare earth mining and companies within the u. S. , but also previously we saw the potential investigation into the vietnamese currency for currency manipulation. To what degree are there geopolitical angles to such a probe . Laura this is something the Trump Administration has done to some success. The 301 investigations into china, which ultimately imposed some tariffs. There was one they did into france earlier and recommended tariffs. They have not put those into effect. It is a real threat and would be something that happens. Election,oses the this would either be stalled or fall off the table with a new administration with different policy objectives. Shery china also was a hot topic during the president ial debate last night. It was really challenging to watch when it comes to president ial debates. Has this moved the needle in terms of swing voters . Laura not really. When you look at the data in terms of swing voters who are watching and if they expect the data to change their vote, it doesnt show that. It was a big money raiser provided. He raised 10 million during those three hours while the debate was going on and particularly while the debate was at its most intense, most hateful exchanges. Just aed 4 million in short period of time. It may have not done much in terms of the overall election, but in money gain, biden won. Haidi we do have some breaking news as we continue to watch for prospects of a fresh fiscal stimulus package in the u. S. Willen mnuchin saying he be speaking with House Speaker nancy pelosi again tonight, saying these negotiations have come up from a trillion dollar deal. The republicans are prepared to accept a fair compromise and he presents a fair stimulus proposal to nancy pelosi. He is making these remarks in an interview with the Foxbusiness Network and calling the talks productive. He now says the stimulus deal is between 1. 5 trillion to 2. 2 trillion. President trump has said previously he would consider something up to 1. 5 trillion. This after we had no agreement on a stimulus package, but a lot of progress being made now saying the deal is between 1. 5 trillion to 2. 2 trillion. Lets get to Karina Mitchell. Isthe Federal Reserve extending its constraints on Dividend Payments and share buybacks of the top u. S. Banks. The limits will continue due to uncertainty from the coronavirus and the need for the vendors to preserve capital. The move is likely to disappoint the banks. Jp morgan has said it would resume share buybacks. The u. K. Government says the coronavirus is not under control and rising infection rates may mean tougher new curbs. 7000 new cases were reported for the second day running for the highest total since the pandemic struck. Boris johnson says he wants to avoid a new lockdown, but his governments handling of the crisis has brought increasing criticism. It,f the evidence requires we will not hesitate to take further measures that would be more costly than the ones we put into effect now. Karina the retail sales slump continues in hong kong, though it eased last month. Sales fell more than 13 from the year earlier. That is better than the median forecast of a 17. 5 percent fall in a bloomberg survey. Sales by volume also dropped 13 on the year, an improvement on the 24 decline in july. In the u. S. , wildfires ravaging Northern California are forecast to destroy even more land. The National Weather service is issuing a red flag warning for the glass fire above napa valley with predictions of extreme heat and gusting winds. Temperatures in napa are set to top 100 degrees fahrenheit over the weekend. News 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. Shery we will be joined by four more boj Monetary Policy Board Members as the boj releases its First Business Confidence Survey since Prime Minister suga took over. Next, we will hear from zach pandl on why he expects the dollar to weaken into year end and beyond. This is bloomberg. Shery we have an alert on the bloomberg. We are hearing the u. K. Will be banning chinese postgrads from security linked studies. The times is saying the foreign commonwealth and Development Office will expand from todays remit of security betting for overseas applicants and these measures are expected to block hundreds of Chinese Students from entering the u. K. And that visas will be revoked from students already in subjects deemed to pose a risk. This coming on the back of the United States canceling hundreds of visas for Chinese Students. Now we have the u. K. Saying they will ban chinese postgrads from security linked studies. Haidi we will keep monitoring those headlines. Lets take a look at the u. S. Dollar. It closed the quarter with a monthly gain, but not enough to raise quarterly losses. You can see the bloomberg dollar index fell 3. 5 this quarter, the worst quarterly performance since 2017. Joining us is zach pandl, the Goldman Sachs cohead of global affects and em strategy. As we head into the escalated volatility environment that goes into the november elections, what are your expectations for the Fourth Quarter . We have already been through volatility related to the upcoming election related to uncertainty around the debate, the phase four fiscal negotiations. We are through some of that now and investors are starting to look to the postelection environment, which is involving planning potentially for a new president or a second term agenda for President Trump, as well as vaccine approval and delivery starting in the Fourth Quarter. We are looking for the dollar to begin weakening again. It started over the last trading session we think that continues over the coming months as Global Prospects improve and markets look forward to the next agenda from the u. S. President. Postnovember, when you expect this to settle down . As we look at em currencies, rest of the world currencies performing based on relative fundamentals and economic strength . We do think you are going to get through the near term hurdle around u. S. Politics and be looking at the macroeconomic drivers. Four emergingmarket currencies, they are likely to benefit the most from an resurgence in optimism related to vaccine development. We dont know when the fda will approve a vaccine, how fast it will be distributed to emergingmarket currencies. This could lift expectations for growth outside the u. S. And other developing market economies, particularly for economies, excluding china, that have struggled with coronavirus control. We are thinking about a variety of em currencies into the end of the year as we focus on the vaccine and developments in u. S. Politics. Shery we had an interesting take from Bloomberg Intelligence , which said if you have a joe biden win with his promise to rejoin the climate accord and more electric vehicles, you could see an oil shock and Oil Exporters could lose, not to mention the yuan could gain. China is pretty advanced when it comes to alternative energy. Could that factor into your equation . We do think abided win would be positive a biden win would be positive for the yuan, but not because of green initiatives. It would be a new approach to foreign policy, something that brings together allies in the region like japan and south korea as well as beyond the region. Maybe some of the trade war risks that the chinese yuan has been. Could come out in a biden win and result in more yuan per dissipation in broader yuan more yuan participation. The early tracking bowling suggested Vice President biden was having a fairly good night. The clearest signal in currency markets was the appreciation of the chinese yuan. That indicates that is the cleanest way to position fx markets for turnover in the white house. Shery take away the equation of the election. Obviously we cant, but put that aside. What about the fundamentals . There are two sides to where the yuan is going. You have attractive yields, relatively lower volatility in the chinese yuan. At the same time you have a real demand for the chinese yuan being not so strong as for the dollar from the corporate sector. I would say looking beyond the politics, the fundamentals for a chinese currency are unquestionably positive on a global basis. I would emphasize may be the yield, first and foremost. You have extremely low yields throughout the world reflecting central bank easing down to their lower bounds for Interest Rates. Chinese policymakers began raising Interest Rates several months ago, so the yuan is a relatively highyielding currency and does not have some of the risks that other emergingmarket currencies offer. I think the yield combined with the bond index is going to lead to a substantial amount of fixed income flow over the Chinese Market into the coming year. Beyond the yield, i would be positive on the basic macroeconomic fundamentals. The domestic growth picture, the trade surplus. The chinese economy is improving faster from the coronavirus recession than other places. I also think it is a positive picture leaving politics aside. Shery what the heck is happening with the lira . They had a surprise rate hike and yet we continue to see some weakness. Surprise rate hike, but not enough. Turkish Interest Rates still too low to help the country rebalance, to help the current account move back toward zero. A long way to go toward tighter policy if they want the currency to stabilize. Haidi zach pandl, always great to have your thoughts. Next, highlights from our exclusive interview with the highest u. S. Official to visit taiwan in decades. He says china poses a threat to democracy. This is bloomberg. Shery the highest level u. S. Official to visit taiwan in decades has told Bloomberg Chinas communist party poses an urgent threat to democracy. Exclusivelyspoke with bloomberg on a range of issues, including the ban on tiktok. Tiktok is more than about one company, more than about a tiktok and a we chat. What it is really about is the ccp threat, the Chinese Communist partys threat to democracy and their surveillance state. If you look at what they are doing, they are extending the firewall where all the data comes in but none comes out. Reciprocally, all the propaganda goes out but the truth does not come in. Tiktok happens to be an app like wechat that collects massive amounts of data that goes into their ai machines so they can come up with that one number. That one number is a social credit score in china. It is for every person, every company, and that number defines how loyal you are to the Chinese Communist party. They can do that in brussels, the u. S. , anywhere in the world. How loyal . It is not really how loyal, but how easy it will be to ally with the Chinese Communist party, or turn them. Thats really what it is about. The president has been clear about this in terms of projecting American Security on that. That is what the network is all about. When you look at what is happening with the court and they say you may have overstepped, your views are clear. You dont trust any of these apps. Are you going to win this case . I dont know, but alls i know is it is great we have three branches of government with checks and powers so we dont end up with a lifelong dictator like president xi. Thehat do you say to chinese saying what the u. S. Is doing is extortion . I would say look at your market. You cant even use your twitter that you use all around the world, your ambassadors use all around the world. You dont let google in, dont let facebook in. I say you are the biggest hypocrites in the world. I have to ask you because you know the tech world very well. You are an american company, supplier to huawei. Do you worry that these restrictions are detrimental to u. S. Companies or could be in the future . I took secretary pompeo out to Silicon Valley at the beginning of the year. We kicked it off with a dinner at my house. We had 36 of the top ceos and had them go around the room, tell your favorite china story. It is famous when i have my bilaterals with different governments, literally look around and say, we dont trust them. Nobody trusts them. One of the things that i said that night, the chinese comets party is a real and urgent threat to democracy around the world. It is also a threat to businesses because they dont just want to compete, they want to put you out of business. In Silicon Valley, we say Corporate Responsibility is social responsibility. It is also Global Economic security. We have seen now over the last six months since the pandemic, citizens of the world have woken up to the fact that the truth about chinas i call that the three cs doctrine, concealment, cooption, and coercion. The pandemic is the result of the concealment of the virus. They understand the invasion of hong kong has disarrayed their freedoms. Has understand the coercion created some of the most crazy human rights abuses in a long time. Shery that was the undersecretary for economic krach, speaking exclusively to maria in brussels. Helen Tier Technologies has begun trading in new york. The Data Analytics Company Opened at 10, above the record price of 7. 25, for listing directly. It failed to capture the 20 billion valuation private investors have given it. s Cloud Software moving to prepandemic levels of business. The internet computing arm is growing at about 60 . The Cloud Service emerged from the computational power needed to handle the billions of transactions handled by alibaba. A struggling german payments operator is being shut down in singapore, told to see selectivity and return customer funds. They have told the Monetary Authority they cannot continue providing services to a significant number of merchants. The company filed for bankruptcy in june. Next, our interview with the richmond fed president about the labor market. He says getting back to work will be tough. Karina i am Karina Mitchell with the first word headlines. The commission that runs u. S. President ial debates says change coming after the first clash descended into insults and chaos. They say restructures will be needed to ensure a more orderly discussion, although precisely what remains unclear. The cleveland debate saw interruptions, candidates talking over each other, and few clear policy statements. Pres. Trump i thought the debate was great. We have gotten tremendous reviews. We are hitting what people want, law and order, which bided was unable to talk about because his radical left followers i dont think there is too many of them left. It was a great, exciting evening. I see the ratings were very high. Biden the president of the United States conducted himself the way he did. I think it was a national embarrassment. Karina the u. S. Has avoided a shutdown of the federal government after the senate voted 8410 to pass a stopgap spending bill. The bill heads to President Trump, who is expected to sign before the midnight deadline. The bill would keep the government running through december 11 at current spending levels. The covid relief package is a separate discussion. Stephen mnuchin says stimulus talks with nancy pelosi have made progress with more to come thursday. He says he will not agree to democrats call for a 2. 2 trillion deal and wont go beyond 1. 5 trillion. Mitch mcconnell says a wide gap remains, adding the democrats plan to take poison pills. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Mitchell. This is bloomberg. Shery we are seeing more layoff announcements globally with thousands of job cuts in the last day. Car insurer allstate and walt disney are among the big names in the u. S. Goldman sachs is another. The richmond fed president spoke exclusively to bloomberg about issues facing the labor market recovery. The economy took a deep dive, as you know, and it did come back quickly when we opened things up. You would expect to see the recovery be more gradual. The real challenge is getting the last 5 of americans back into the workforce and that is where i have got my focus. What are ceos and Business Leaders telling you about your plans to hire and invest to spend more money . There is a lot of uncertainty with the virus but also what the demand picture is going to look like next year. I do think companies are streamlining, taking the last 5 to 10 and finding those efficiencies. I am starting to hear some amount of pivoting to tomorrow. Ok, wemean by that is, are going to get this behind us, lets talk about where we go from here. I think they have streamlined, but i am hopeful that as we get into next year we see that starting to grow again. Do we see Significant Growth in the coming year . Sure. First of all, you have got a significant drop, so we are going to grow out of that significant drop. I think you will see a strong thirdquarter. Even next year, part of the legacy of the accounts we have for this year is you will see Growth Numbers that look strong. I do think the question is going to be, what do we look like yearoveryear . I think by the end of the Fourth Quarter, we will still be down yearoveryear and it will be hard to get back to where we were until the end of next year. Forecast assuming we get a fiscal stimulus package . What happens if we dont . I dont try to assume anything in terms of what happens in washington. They are talking and we will let them figure out whether there is going to be a stimulus package. If there isnt one in the short term, there are people down on their luck who will get less support than they otherwise need. I am more focused on longterm or mediumterm issues. We have a lot of people who used to be waiters or work at an Amusement Park who now need new jobs. There classic next job would have been at a retailer or maybe another restaurant. ,f those places are not hiring how do we get them redeployed . Issues of job retrading, getting pell grants and getting them funded, those are the things that are important if we are going to bring the economy all the way back. Another major issue, and you have one of americas biggest banks in your district, is whether the economy can withstand as forbearance comes to an end and we see rising business debts and increased faults, particularly for commercial real estate. How do you see that playing out . I think the fiscal stimulus we have been we have done has been helpful to the industry. There are people down on their luck who have gone stimulus payments. You see credit card outstandings down, Small Businesses that got ppe money, Big Industries Like Airlines that would have been much more challenged if they had not gotten the money they have. Wood,k so far, knock on what i am seeing from the banks is still pretty healthy. What about in terms of loans and lending . There have been concerns expressed that particularly in commercial real estate you are going to have a wave of defaults . I think there will be challenges, particularly on the retail side. The question is, are those defaults going to overwhelm the system . My sense is there has been a lot of Capital Building in the last 10 years. The exposures there dont seem to prepare. To compare. Richmond fed president speaking to mike mckee. All but one fed officials are calling for more stimulus. Kathleen hays is here. In just heard from bark saying more help is needed for workers displaced by the virus. Kathleen the line is being pushed uniformly. People are getting back to work, but a lot are stuck on the unemployment lines. Mary daly, president of the San Francisco fed, was saying the government must support americans who dont have the money to pay their bills. The president of from dallas, relatively upbeat, but saying without more fiscal support, Downside Risk will materialize. The president of the st. Louis fed last week on this program said it first. He thinks there is enough fiscal support from the april stimulus package and even without that he thinks the economy can keep going. Maybe next year they need to reassess. If you look at the economy and a couple of charts, you can see the economy is going to rebound hugely in the Third Quarter. Gdp,s down in terms of 31 plus, and it is supposed to 35 , so at 30 , least it makes up partly for the jobs. You can see how they plunged in the spring. 1. 3 million was the again last time. Now they are expected to rise 850,000 or more on the private survey of jobs by the adp. We will see how these numbers play out, the big jobs report on friday. Steve mnuchin said today even after meeting with nancy pelosi, they dont have a deal yet. They are going to talk more. They are having a hard time getting that stimulus done. Shery we still have the fed, big move to an average inflation targeting framework. We heard from the ecb president , christine lagarde. Could she be thinking of something similar . Kathleen she made it clear. She thinks inflation has been ,tuck to stuck below 2 below zero right now in the euro zone. They are definitely going to consider, not going to change the rulebook, but take a look at measuring and what it needs. Posess environment fundamental questions for central banks. I will borrow from winston churchill, who said, however beautiful the strategy, you should occasionally look at the results. Analyzeto thoroughly the forces that are driving inflation dynamics today and consider whether and how we should adjust our policy in response. Thiseen you can see from chart, the white line is core inflation. It is not just below 2 , it is below zero. Christine lagarde and other officials having knowledge that these are temporary factors. It will go back positive in the next few months. You can see the breakeven, the blue line, shows that when you look out five years, they still see inflation far from target. It is similar to what we have seen in the u. S. And japan. This is why the ecb appears to be opening the door to looking at this having the same kind of debate the fed had for over a year, perhaps making a move. Shery we have breaking news at the moment. We are hearing the Tokyo Stock Exchange is investigating reports of network issues. We dont have more details, but the open in tokyo is in about 20 minutes. The Japan Exchange Group Spokesperson now coming out saying the Tokyo Stock Exchange is investigating reports of network issues. We will get you more details as we get them, but the open is supposed to be in 20 minutes, so we will be watching closely. Gpx holding trade of all security due to network issues. Actually we do have more breaking news. American air will begin laying ,ff 19,000 people tomorrow according to the ceo. Beinge seen the airlines battered by the pandemic, more and more layoffs. The ceo of American Airline saying they will begin laying off 19,000 people tomorrow. They have been depending on federal subsidies and help. We still dont have another round of stimulus measures and American Airlines saying they will begin laying off 19,000 people. We had heard u. S. Airlines were planning to lay off thousands of people if that round of stimulus measures didnt come through. Plenty more to come on daybreak asia. This is bloomberg. Shery just a little more on that breaking news earlier. Japan exchange saying they will be halting trading due to a system issue. They are unsure when the system will be restored, but Japan Exchange is halting trading. Japan was supposed to open in less than 20 minutes, so we will be watching closely as we hear they have a system issue and all securities have been halted due to that issue of, which we dont know at the moment. We will get you more details when we get them. For now, lets get a check of what markets should be watching. There is a lot to digest, especially when we have korea and china closed on holiday days. Taiwan and hong kong potentially offline for the rest of the weekend. We could see a very thin market this thursday. We have futures pointing slightly higher, nikkei futures trading to the upside at the start of the session. Steady tost holding kick off the fiscal second half for japan. We do have the aussie dollar extending gains for a fourth session, trading at a oneweek high. You have socgen saying focus on asia exposed currencies like the aussie dollar against european focused fx to play the trend we are seeing when it comes to Economic Growth. We are seeing some support as u. S. Stimulus talks are seen progressing. Goldman out with a note saying a Biden Victory would be good for em assets with countries like south korea more positively correlated with the democratic win. But goldman noting a second term for trump would be advantageous for the russian ruble. You have the ruble among the worst emfx performers in the Third Quarter along with the turkish lira, argentine peso, and indonesian rupiah. Monetizationt debt in indonesia. We saw the government approve a record spending plan for next year and this morning the government announcing it is seeking to raise 14 billion this quarter in bonds, so the rupiah could stay under pressure. Indonesia has a long road to recovery ahead. On wednesday the president saying a return to normal is hoped for when vaccination begins. He says around 170 to 180 Million People should receive the vaccine first and that will take several months. Haidi we are going to stick with the vaccine race, in sharp focus as ever as global cases continue to rise. We are seeing new waves of infections. Astrazeneca is facing a wider probe in the u. S. With better news in europe. Michelle cortez is on the line with the latest. We have u. S. Authorities regulators taking a closer look at previous historical data. In europe we are getting indications they could be first to market and could be the region that gets a vaccine first. Regulators in europe and the u. S. Are taking dramatically different approaches when it comes to astrazeneca is vaccine. There was a case of some spinal cord issues in one of the patients who got the astrazeneca vaccine. Thatiew in europe decided was not related to the vaccine. In the u. S. , they are going to look at it more closely. They are going to look at other trials to see if there is any indication of risk. Europe is saying they are going to consider starting a rolling review, which means approval code come as an emergency authorization any time in the next few weeks or months. In the u. S. , they are not even reviewing the credible trials yet. Shery we have a bit more news when it comes to moderna, news on the response in older people. Whats the latest . Michelle the vaccine is most critical for elderly people. The reason is because their immune systems are not as strong as younger people. Thats why we see increased rates of infection and more serious illnesses and they are more likely to die. Immunization helps trigger their immune system to respond to a virus, but that alone might not be enough because they dont respond as aggressively, just as they dont respond as well to the actual infection. The news that modernity vaccine is generating strong results in older people is very welcome news. Hopefully that will carry through so when we get the trial results, the older people will benefit from the vaccine and not get as sick and be less likely to die. Shery michelle cortez, our health care reporter, with the latest on the vaccine race. Next, we will be joined by siri shirai as japan releases its First Business Confidence Survey since Prime Minister suga took the helm. Shery breaking out of japan. We are getting the Large Manufacturing index coming in at 27 for the Third Quarter, more negative than economists had expected. It is still an easing of the declines in the previous two quarters. It was a contraction of 34 in the previous quarter. The outlook also 17. The nonmanufacturing index, 12. This also a bigger disappointment than economists had expected for the Third Quarter. When it comes to numbers, it is a growth of 1. 4 for the Third Quarter, beating expectations, although it is a slight decline from the previous month. We were expecting these numbers to perk up a little given we have seen a decline in production driven by exports with sentiment being lifted. We are seeing more negative numbers than expected. Lets get the reaction to the data and bring in Keio University professor Sayuri Shirai. She is also a former board member at the bank of japan. What are you seeing in these numbers . They seem worse than expected, but at the same time we were expecting the face of the recovery not to be too positive either way. Yes. Was notember data, it as good as we thought. Because weising started to see a pickup in production from june. I assume the data should be much better, but when we look at improvement pace of between september and december is not so bad. Is within ourk it estimation, but it is still negative territory which means Many Companies feel the Business Condition is in poor shape. Which means japanese Economic Growth is very sluggish. It takes three to four years gdp back to before covid19. Estimates,s to beat growth of 1. 4 for the Fourth Quarter. How positive is that . Expected, better than but i think it is still quite low. Just thinking about the trends. Becauseit is positive there is a lot of investment in 5g. And all of the ai investment. Overall excluding that, there is a lot of uncertainty. , it issee a lot of data quite weak. And the Automobile Industry investment, i think that will be a very weak investment. Haidi we saw a report earlier today saying the government is considering further virus related stimulus measures. How much of this is a necessity to encourage the recovery . You do at the end of this month. I think they need to add something more. Inis easy to see a pickup june because after the worst conditions, but we see a very sluggish recovery growth. A lot of companies suffering. So i think government needs to provide some targeted support for the Smaller Companies and also some very low income people. Government is not going to give quite large scale stimulus as they did in april and may. We here at the same time the government is mulling potential travel corridors and bubbles for a select number of countries where the virus has been curtailed. To what extent is that crucial for the next leg of the recovery, as is Something Like the limbics definitely being able like the olympics definitely being able to go ahead . We started to see a pickup of trouble in japanese, partly because the government has implemented a subsidy. Makes the Tourism Sector very sluggish. Infected people is not as bad as the United States, but still government is not able to contain the infected people. Many people are not able to have a pcr test. In that sense, government is quite slow. I hope government takes quick action and tries to find a way to contain covid19 so that we can prepare for the olympics next year. Shery thank you to Sayuri Shirai from Keio University. We are getting the latest when it comes to the trading disruptions in japan. Index is nowock saying they are experiencing system issues, saying they have halted trade of all stocks. Over the last 20 minutes, we did hear from the Tokyo Stock Exchange talking about connectivity and systems issues. The Japan Exchange saying they dont know when the system will be restored. We have lots more on that story and plenty more. This is bloomberg. Shery welcome to daybreak asia, im shery ahn in new york. Major markets have just opened. Asia may seem modest gains at the start of a new quarter, although markets although volumes may be low due to holiday. Trading is halted in tokyo due to an Unidentified Network issue. Democrats offer a new plan washington, but the gap remains wide, Mitch Mcconnell says it contains poison pills. And in japan, the recovery weaker than expected, the boj agrees Business Confidence remains low. Shery breaking news out of south korea. Export numbers for the month of september turning positive for the first time in seven months. Exports rising year on year seven point 7 , beating expectations it would only rise 3. 5 . This is a reversal after six months of declines for those export numbers as they took a hit with the pandemic. Imports year on year gaining 1. 1 , beating expectations of a contraction. We are seeing trade surplus at 8. 8 billion dollars as well, slightly lower than expected but still, exports are beating expectations. Withve to consider though, more working days in the month of september at the holidays, companies have to get more shipments out the door. So that may have contributed to these strong export numbers, considering six months of sliding exports. We saw in the numbers for the first 20 days of the month that exports to china and the u. S. And Semiconductor Shipments were strong. Sophie kamaruddin in hong kong for a check the markets, and what could be a thin trading session. We have holidays, and japan halted Given Network issues. Tradingthat is right, has been halted on the tokyo and nagoya exchanges, due to systems issues. The Exchange Says orders are not being affected at this time, but trading on the soft x Osaka Exchange are still trading, nikkei futures adding. 3 , and steady,is trading listing from the pandemic low. Pg traders will be weighing options today to kick up the Second Quarter in japan is more coronavirus stimulus may be on the table in japan. Open in australia this morning, asx 100 capping its first monthly drop since march, the , andmark gaining. 5 looking at mining as President Trump signs in order to boost mining in the United States. Flipping the board to check u. S. Futures this morning, snp gaining. 1 . Steady, justyuan under 679, gold still trading below 1900 per ounce after marking its worst month since november 2016 after the greenback snapped a fivemonth decline. Wti is edging toward 40 per barrel as we have doubts over demand continuing. And we have concerns around job losses in the industry as well. Haidi let get more on the trading halt in japan, one of the few major markets open in the region today. We are going to see a liquidity impact. Our bloomberg reporter joins us on the line from tokyo. What to we know about what is being impacted and the source of disruption . In terms of the source of disruption, we dont know anything at the moment. Se maybe a decade ago had a history of these system issues, but they are not saying anything now in terms of what might have caused it. There have been issues with other exchanges around asia in recent months, but we have no idea what the cause of this one is. In terms of what affected everyone on the new york on theTokyo Stock Exchange, Osaka Exchange, which is where the derivatives on futures are traded, is not affected, so futures isoptions on unaffected, going ahead, we just past the 9 00 a. M. Mark, when the cash equity market would open, but nothing is trading right now. Shery what should investors be watching out for . We have the japanese yen holding at the 105 level rate it has been range bound recently, but Given Network issues, what should investors look for . It is possibly fortunate this error happened on a week when much of asia, many traders might be out. It is one of the unfortunate things here. Investors dont have the immediate ability to respond to anything, and fortunately it is very quiet in terms of news flow right now. Later, once we know the source networkissue, the Japan Exchange in 2000 had a lot of repercussions, the company was heavily reprimanded by authorities and i think it led to some Management Issues and changes as well. So that will be one thing in focus once we know a little more about what is causing this. Shery haidi we have an update saying that japan sapporo exchange has halted trading as well. We continue to monitor that breaking story. As was just mentioned, one reason why we were looking to today was because large parts of asia are on holiday, Chinese Markets on a National Holiday today. You are looking at pictures of a flag raising ceremony for brexit being attended by the chief executive of hong kong, taking place in hong kong, executive carrie lam is there. The city is bracing for a day where authorities have threatened to arrest anyone who protests in a crackdown on dissent across hong kong, the Chinese Government warning that those who defy the protest ban on the anniversary of the founding of the peoples republic today will risk running afoul of sweeping new National Security laws. We are expecting 6000 riot police to be out across hong kong today. Lets take a look at first word headlines with Karina Mitchell. Karina the u. S. Has avoided a shutdown of the federal government after the senate voted 8410 to pass a stopgap spending bill. The bill heads to President Trump, who is expected to sign it before the midnight deadline in washington. The funding bill would keep the government running through december 11 at current levels. The covid relief bill is a separate discussion. U. S. Treasury secretary Steven Mnuchin says stimulus talks with nancy pelosi have made progress, with more to come thursday. However, he said he and republicans will agree to republic to democratic calls for a 2. 2 trillion dollar deal and wont go beyond 1. 5 trillion. Senate majority leader Mitch Mcconnell says the democratic plan contains poison pills. In the u. K. , the government says the coronavirus is still not under control, and rising infection rates may mean tougher new curves. 7000 new cases were reported for the second day, the highest total in britain since the pandemic struck. Boris johnson he wants to avoid a lockdown, but his governments handling of the crisis has brought increasing criticism. I have to be clear that if the evidence requires it, we will not hesitate to take that will, ims afraid, be more costly that we have put into effect now. Karina global news, 24 hours a day, on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Coming up next, pepperstone financial groups chris weston joins us to discuss his outlook for the dollar. Stevenreasury secretary mnuchin and nancy pelosi extending stimulus talks, republicans warning the gap means wide. This is bloomberg. Howi lets take a look at we are shaping up, disruptive day, to the asia trading connectivity issues on the tokyo exchange. Still waiting to hear what is causing that, but a number of exchanges in japan, halting trading as a result of the open. In terms of markets that are trading, sydney up to 8 and mainland markets are off today, a holiday session for the rest of the week. Look at risks lying ahead for the markets. Joins us now from pepper stone group Pepperstone Group on the line from melbourne. Chris, the temporary disruptions in tokyo aside, what are you watching . It seems asia is going to be in a meandering mood, given escalated political volatility from the u. S. And lack of liquidity from mainland traders. Chris everything is looking fairly comfortable at the moment. Things arekets, going to be opening fairly strong, liquidity assets up 78 basis points. That comesapan, when back online, the hang seng future 1. 4 . Eyes on stimulus negotiations taking place in the u. S. , and the likelihood. I think it is 5050 whether that will pass the senate, but at least they are at the table and the market has been quite consolidated by that. U. S. when it comes to the dollar, a horrible quarter, likely to be a bumpier ride ahead. You expect further weakness . Furtheru expect weakness and how does that bear on asian and emergingmarket . Chris we have got the reflation the idead matching q3, that we have seen real yields lower, at the dollar has benefited, commodity assets as well. Once we get november 3 out of the way, we get an accepted election, that will happen at some stage, then we can finally look at the makeup. If you look at the way this is shaping up, it is looking very likely biden is going to take the white house. The question is, will the senate go down toward the republican side were toward the democrats . That is where republican senators now are just desperate to save the senate. But if we get the blue wave, you could get uncertainty on the day, but after some time and everyone realizes that deficit spending, we could see breaking Inflation Expectations breaking higher. I think that is therefore going to be a correlation for the dollar to continue to weaken, and go back on that reflation trade and the idea that the Monetary Policy is there to benefit fiscal. That is where we are going to continue to trade. Shery what is that due to the japanese yen . The gtv chart on the bloomberg showing the japanese yen had its best quarter in a year or so. Chris as an election hedge, everyone has been biting volatility and as and p options been buying volatility and as and be options and s p 500 actions. That might be an attractive way of hedging this, the japanese yen in that situation. But this is all about relative growth and real yield. Asia still has a positive real , that in the jgb market is an attractive place to be. If you just u. S. Treasuries for hedging costs, for japanese investors, you are getting eight or nine basis points, still getting a positive return. Choice and suggests that any rallies in dollaryen give you the opportunity to sell for a longer time. The low down for those figures and more fromre the bank of japan, but it is almost like positive real yields relative to what we are going to see in the u. S. If we see a blue suite, the argument is how low this dollar yen go . Weston, head of research at Pepperstone Group. Plenty more coming on daybreak asia. This is bloomberg. Shery u. S. Treasury secretary Steven Mnuchin says he and House Speaker nancy pelosi are closer to a deal on the next virus relief package. Mnuchin said republicans are looking at stimulus in the range of one point 5 trillion to 2. 2 trillion dollars, which at the higher end would meet democratic demands. Bergs Laura Davidson has the latest. Is this too optimistic on a day when Mitch Mcconnell said the two sides were still very far apart . Optimistic that mnuchin and pelosi are on the same page. The question is, can mcconnell get his people to a great . Be a mustion would double the upper end of what republicans in the senate said they would accept. So mnuchin and pelosi can get a deal, but nothing will come to that unless Senate Republicans sign on. Numbers we are talking about here are vastly different from what the president said he would accept, and a world away from the socalled skinny package that was proposed. Laura the president changed his tune. The white house says the 1. 5 trillion deal is in the ballpark that they would look at. But the question is this router picture and the elements of that deal. Republicansing both and democrats agree they want, they want stimulus checks to go out, they want more unemployment benefits, but there are still some hot button issues, aid for state and local governments, something democrats really want and republicans dont like, there are also tax breaks for businesses, using a tax rate donald trump reportedly used to get big refunds that democrats want to repeal. That is another political issue they are fighting out. We will see the next 24 hours, after that, the window of getting a deal before the election starts to close. Reporter Laura Davidson. Japan may be considering an additional stimulus package, according to nikkei news, but it the people want government to focus on tackling the pandemic at the economic and social fallout. Told what the government would be focusing on. Want to say when there should be an election or when there shouldnt, but as one of the coalition ruling parties, we are always thinking about policy priorities. What is it that people want more than anything . It is for the Coronavirus Infection to come under control. They want us to bring social and Economic Activity back to normal. It is important for politicians to work earnestly on that. Opinion polls show people dont think there should be an elected before the end of the year. The majority say it could it should come around the end of the term next year. Business leaders want us to create an environment where they can become more active, so politicians should respond to these wishes from people lend Business Leaders. Need you think there is a for another budget by the end of this year . And social activities are suffering constraints and blows from the Coronavirus Infection. We have taken various measures to help recovery, but there are concerns that the effect may be wearing off. There also been the effects of disasters. As to whether we should put together another budget now, we in yenven trillion left over from the previous budget. Reserves can be used quickly at the will of the government. If there are such needs, we should first use the reserves. But if the 7 trillion yen is not enough, i dont deny we should consider a third, extra budget. But i dont see a concrete path to that moment. We need to prepare measures to help the economy return on its own, such as the travel campaign. Jobs are under threat, so expending subsidies to keep employees may be necessary. In november, we will see figures from july happen september gdp. So we should monitor the economy and use the reserves. If that is not enough, then consider a third extra budget, that is the order we should take. We dont know for sure what will happen with the Tokyo Olympics and paralympics, but we really want to stage them. To that end, we should gradually return Economic Activity to travelers overseas to have a proper testing system, so anybody infected could be tested quickly as a basis of preparation for the olympics. There have been calls within the visit to japan by xi jinping to be canceled completely. What do you think of this idea . Ally,ven japans biggest the u. S. , is clashing with japan, how do you see the importance of the chinajapan relationship . Japan and china are neighbors and have the worlds second and Third Largest gdp. Our mutual ties are deep. The International Community wants the countries to Work Together for peace and prosperity. The International Community wants the two countries to Work Together for peace and prosperity. Ism a broad perspective, it important to improve relations so that leaders, including president xi, can pay mutual visits, and the people of the two countries more generally can do so. There has been friction from the coronavirus and criticism of china, and it is not as though china has done nothing to deserve such criticism. It is important to point these things out to each other honestly on both sides should make efforts to improve momentum for relations. In particular, the state visit by president xi should be realized. Relations between the u. S. And china have become very deepeningional, but the confrontation will damage both sides. There will be negative effect on allies, including japan. Countries like japan, that have deep ties to both countries, should lead to things in a harmonious direction. That is the role of countries, including japan, the eu, and south korea. Japan wants to take leadership in this respect. Atsuo party leader not s yamaguchi. Week outlook pushed down a banks share price, however, it says the right down wont affect earnings or its forecast. Japanese rules require companies to write down value when stocks fall below 50 below book value. Goldman sachs is resuming job cuts with plans to eliminate 1 of its workforce, around 400 employees. Themove comes even as companys trading and dealmaking businesses are booming. Goldman announced at the start of the pandemic that it would production after signaling in january it was looking to cut 1 billion in costs. More than 500 workers at j. P. Morgan took assistance from taxpayers aimed at helping consumers through the pandemic. And according to an internal investigation, they shouldnt have. Bloomberg broke the news that some employees benefited, but i hasty probe found the problem was much deeper. J. P. Morgan is the most Profitable Bank in the United States. Live pictures in hong kong of that reception being held by hong kong leader carrie lam, who led a flag raising ceremony for the anniversary of the founding of the peoples republic in 1949. See heightened political tensions in the city continue. There could have been possible protests outside. 6000 right police have been dispatched. You are now looking at that ceremony and reception, and carrie lam on the podium. We will have plenty more to come. This is bloomberg. This is daybreak asia, im Karina Mitchell with first word headlines. Fed is spending share buybacks at top u. S. Banks. Limits will continue due to uncertainty over the coronavirus and the need for lenders to preserve capital. The move is likely to disappoint the banks. J. P. Morgan says it would be interested in resuming share buybacks. Financial firms in the u. K. Have shifted or than 7000 employees and 1. 6 trillion of assets to the European Union ahead of brexit. Reports say more will move in coming weeks after the split. Passport rights will be removed and london will have to rely on the eu, which is by no means certain. The u. K. Is preparing to band chinese post grad students for studying sensitive subjects related to National Security over concerns of theft of international of intellectual property. Hundreds ofys Chinese Students are expected to be blocked mentoring the u. K. Students already they are considered a risk. The retail sales slump continues in hong kong, although it eased last month. Value fell 13 from a year earlier, to the equivalent of 3. 3 billion u. S. That is better than the forecast of a 17 point 5 fall in a bloomberg survey. Volume also dropped 13 of the year, but it is an improvement on the new 24 decline in july. Global news, 24 hours a day, on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Shery. Shery we have breaking news at the moment. The founders of indonesias lowcost carrier, lion air, are planning to start a new airline, according to sources that spoke to bloomberg. The new carrier is a project started by lions founders. This, according to the transport ministry, that confirmed it is processing one application for air operator certificate, but he declined to reveal more details. This is an interesting time to start a new airline, given that we have the fallout from the global pandemic. We did see air travel rebounding in july for indonesia, but that is far below the prepandemic levels. And now we are here that lion planning tors are launch a new carrier in indonesia. Haidi interesting timing uncertaintyn over the economic recovery and closed borders. Manufacturing pmi numbers just out across asia, a slew of them, but among them, improvement when it comes to activity in vietnam, asiaasia vietnam, male falling it malaysia filing into contraction territory, also indonesia. Lets get a broad look at japan and the factory outlook forefore september there september. Manufacturing 47. 7. Lets get it over to editor Kathleen Hays who joins us now. To what extent does this move the needle when it comes to policy, as we are hearing about the potential for another fiscal stimulus package to try to get the recovery more momentum. that third leg tha can get more government spending. Of the plus side, things are looking up a bit. Not in positive territory on the tankan, Large Manufacturing indices, but they all improved. As purchasing manager index, exports have gotten less week, they are Getting Better as well. And the negative side is, you are not there yet even if you are improving. But you can see that the large manufacturers current 27 was the reading today for september. 34 in august. The outlook has gotten less negative for the First Time Since 2017. 12, from 17. Services improving, 17 from 22. The bottom line for japan is, as the new Prime Minister takes and as there is a pledge to continue monetary stimulus, but in japan there may be more a realization that, look, we need something stronger now than aiming for 2 inflation, particularly when most countries cant reach it yet. You can see three quarters of decline in japan, the Second Quarter is to be expected, when the pandemic it, down 28 quarterly number annualized. But two quarters ahead of that. So japan after falling so much is certainly ripe for a rebound, and the latest numbers cannot hope to that. But also, a reminder to Prime Minister suga that more spending is needed. That is what every government around the world is hearing. Shery pmi numbers out of southeast asia, what do they mean for the region . Kathleen a mixed bag, because we saw some improvement, we saw some improvement, was also getting weaker. For the philippines, they are expected to meet today on hold policy study because they have already cut rates so much and they are also saying the government needs to do something not to move things ahead. The philippines number went further below 50, philippines but you do again see the movement in some of the countrys getting stronger. Pause bsphat prudent is taking. Very important to step back. Yes, the pandemic is a problem to many countries, countries that had partial reopenings and cap restrictions in place. It is like pushing ahead with one foot but being dragged by another. We saw the purchasing manager indexes yesterday, chinas, and china is remaining, in manufacturing and services indicators, they are staying above ft. China is the biggest driver for many of these countries. If china can keep its recovery going, if china will continue to need supplies and parts from the countries that surround them, that is a good sign for the rest of southeast asia. It is a good sign for japan as well. And we will have some gauge for demand in china given golden weeks holidays. Global policy editor Kathleen Hays there. The imf managing director says there is a chance the World Economy will emerge stronger from the pandemic. There was a discussion with David Rubenstein to discuss working from home. Is relatively quiet data imf headquarters because of the pandemic. People are working remotely. Are you generally working remotely . On march 13, we took a decision to work remotely. And we have sustained the decision because conditions are still such that, for the safety we have to continue to respect that modality of work. It has been amazingly successful, we are doing much more because of the crisis, and we are doing it working remotely. But it does have some downsides, but david, we would never go back to where we were. We would never have 100 of people sitting here in these offices. We now know that we can be very ,roductive working from home, and we would be hiving and we would be striving to have 5050 or 6040 every day, with from home. David what are economists here telling you about the state of the economy around the world, are we likely to have a global recession for another year . We have optimism on two grounds. Actionst is exceptional by financial authorities. They put the floor on the World Economy. Done ourour side, have part for countries that have no resources on their own. The second reason we are more optimistic today that we were a couple of months ago is that we see the World Learning how to function with the pandemic that is with us. Themake no mistake, recovery is partial, and it is uneven. In 2021,t going to see a return to precovid conditions. And we are seeing big divergence, parts of the economy doing really well and parts and this is my biggest concern, that we may come out of the other side of inequality with more , higher debts, higher deficits, and the Climate Crisis still hanging on us. Strong, as a world we ought to come together. A massive, coordinated stimulus have ae it so that we better economy on the other then that was 2019 Kristalina Georgieva speaking with bloombergs David Rubenstein. The pandemic affect what we see . We get a preview from Coresight Research ceo Deborah Weinswig. This is bloomberg. Day oftodays the first chinas golden week and a major test for the chinese travel industry. Coresight Research Just released a new report looking at this years holidays and the impact of the pandemic on tourism in china. Joining us with the finding is Coresight Research ceo Deborah Weinswig. Great to have you want. This golden week will be longer than usual because of overlapping festivals. How much activity are you expecting . Deborah we are seeing a strong start already. We reached out to many retailers across china. What was interesting this year, almost unusual, is the strong lead up to the holiday. Today is incredibly special, ath a double celebration, festival and national day, so really exciting for everybody in china today. Shery lets talk about travel. Because it looks like Chinese People are now starting to travel domestically. How will this compared to outbound trips . And where are you seeing the focus of this activity . Deborah we are seeing quite a bit of domestic travel. Referred tong of it in many different ways, this carnival,e travel revenge travel, and we are seeing not only many bookings, the numbers are quite 500 50 million citizens are expected to travel. Millione 550 citizens are expected to travel. These are official estimates. When you consider 320 5 million citizens in the u. S. , this is a significant number. And for the most part, the dollars spent will remain in china. I continue to talk about the repeat to relation talk about the repatriation of spending in china. This will continue to drive the chinese economy, this holiday season. And we believe that we will this golden week veryutumn festival, significant spending not only around travel, but also gifts to parents and a lot on health and wellness. Know, in a way this works well with longerterm policy objectives for beijing, they have long been promoting domestic consumption of long term chinese brands. Does this have longerterm implications for changing the way Chinese Consumers spend . Deborah we work with many western brands who have long been interested in the chinese and asfor growth, chinese tourism evolves and tourists travel to the west. We continue to see Significant Growth in Significant Interest by the Chinese Consumer in these western brands. Growth has been outsized this brands evenr some stronger than it has been historically. Where i have been surprised is that we have yet to see strong growth in terms of chinese luxury brands. Come, but that is to this idea around growth in i think consumption, there continues to be opportunities, especially in certain categories. But this idea around discovery from a tourist perspective, there is a lot of opportunity, and maybe this is just the beginning. Mentioned some other things people will be consuming, not only travel, also gifts and so forth. Where are you going to see most strength when it comes to the consumption side of things . Deborah if we look at some of the very strong categories, i will talk about things you wouldnt necessarily expect, roasted nuts, fresh fruits, beverages, and the gifts to parents as well. Be in any of a number of categories. Interview,for this we got on the phone and made and calls to retailers, they see strength across the board, beauty, apparel, foot wear, jewelry, handbags, it has all been strong and across price categories as well. Dollars to over 400. It says to us that the economy is quite strong. Much of it has been driven by group buying, lead streaming, gameification. And i would say there is overall optimism, and much of it has been driven by what the country faced in january and february. And being on the other side of it now, and really being able to celebrate this double thisration, there is renewed sense of optimism like i havent seen in quite some time. So i think they are celebrating toh giving gifts not only others, but this idea of self gifting as well. Shery it is not only about the sale of moon cakes then. Narrative we this have been seeing from economists, that perhaps the recovery in china is a little uneven, that you are seeing a lot of spending on those luxury goods, expensive cars, but not necessarily so much on the basics and essentials, because the poor in china are not doing as well. Think that there is around, you know, some of the change we had seen in the economy, much of it was this idea that there had been new areas of the economy. We have seen this throughout ustory, and i think all of have gone through changes in Economic Activity. Based on what we had seen in january and february, we will see some new Economic Activity created. We are still waiting for that. Of course, we will see some areas of the economy that have and wely taken a slump, are waking those to rise up again. Thatthere are some areas have taken a bit of a pause, but there will be areas to be created again. Was veryave seen, what interesting, talking about the t five years, worthies were these cities that had significant Economic Activity. Tier two,int, those tier three, tier four activities have taken a bit of a pause. There may be areas of opportunity that we see when we go into the back half of 2021, whether it is the next generation of Live Streaming or the next generation of ai, but we will see everyone working together. We appreciate your time, Coresight Research ceo Deborah Weinswig joining us. More on Chinese Airlines and the golden week holiday, coming up. Holiday,the chinese hong kong protests, but chief executive carrie lam says the National Security log restored order. We get more. This is bloomberg. Hong kong is bracing for a tense national day, with authorities threatening to arrest anybody who turns out to protest. Rosalind chin is live in hong kong. What is happening . So far, we have seen the flag raising ceremony, chief executive of Hong Kong Carrie lam attending the ceremonies at the convention center, marking the 49th anniversary of the founding of the marking the anniversary of the founding of the prc. They are threatening to arrest anyone who turns out to protest. And that goes along with that tougher approach with which authorities have been handling protests the past few months. However, there has been chatter about these protests online, one calling for 2 00 p. M. Today in hong kong, urging people to wear black and carry glow sticks for what they call nonassemblies this evening. So there is an undercurrent of dissent, but people are perhaps concerned about outward dissent, and we will have to see if people turn up for the protest at 2 00 p. M. Shery given tensions in the city come im not surprised we have seen the economy take a hit. We have retail Sales Numbers out. Retail sales falling 13. 1 year on year to 13 billion u. S. , according to the government, still better than expected and better than was forecast. But compared to previous months, it is making a slight recovery, still though, as long as orders are pretty shut for hong kong, we see people coming in and out, but with strict rules, there isnt going to be a bounce back in the numbers or in tourism, specially from china, for some time. And that just continues to be a real stress on the hong kong economy, which was already stressed after several orders because of the protests last year, and this year because of the virus pandemic. Hong kong, not really recovering as much or as fast as china. And until visitor arrivals increase, that is probably going to remain in the doldrums. Bloombergs Rosalind Chin in hong kong with the latest. Lets check business flash headlines. Alibaba sees first profit at its Cloud Services unit this year as it moved toward the pandemic levels of business amid chinas recovery. Alibabas internet computing arm is growing at about 60 . Investors are told that should make money in the fiscal year that ends in march. The Cloud Service emerged from power needed to handle billions of transactions at alibaba. Digitaloing german paint wirecard is being shut down in singapore and told to see selectivity and return customer funds by october 14. Wirecard told authorities it can continue providing services to a significant number of merchants. The company filed for bankruptcy in june after seeing more than 2 billion u. S. That it listed didntts as assets exist. Palantir technology has started trading in new york, ending 17 years of secrecy. The Company Founded by peter thiel open debt 10, above the Reference Price of 7. 2 set by the new york stock exchange. However, it failed to capture the 20 billion valuation private investors had given it in recent years. An nyuup, we hear from school of law professor on how investors have become transformational players in Global Financial markets. Our coverage continues with malaysia and singapore opening at the top of the hour. This is bloomberg. David this is my Kitchen Table and also my filing system. Over much of the past three decades, i have been an investor. The highest calling of mankind i have often thought was private equity. [laughter] and then i started interviewing. I watched your interviews, so i know how to do interviewing. I have learned in doing my interviews how leaders make it to the top. I asked him how much he wanted and he said 250. I said fine, i didnt negotiate with him. I did no due diligence. David i have something i would like to sell. And how they stay there. You dont feel inadequate now