The broader markets are approaching previrus levels. Passed . Or crisis has tiktok is seeking another legal and to curb the use of the out in america. Shery lets get a quick check of the markets. We are seeing u. S. Interest, on the market pretty flat. Had hopes for reelection preelection stimulus, and those hopes are fading away. We have mixed banking reports. The s p 500s song for a second session. Communication stocks are leading decline. As oil rose in todays sessions. Take a look at what oil is doing right now. It rose to the highest level in nearly one week. We got a weaker dollar. The u. S. Shares turned negative. It was a weaker dollar. We had expectations for supply declines in u. S. Inventories, and that really pushing the oil price higher. Lets see how things are shaping up, here is sophie. Stock futures are pointing to more losses, after it pulled back from a march hike. Japan watching reports in , and over in south korea, the agency they hit makes it trading debut after an ipo valuing the kapok company. Kpop company. We had overnight dollars selling, lifting offshore you in un. Toare seeing a can tend you gain after rising about 5 . This Strong Demand that we saw for chinese date debt is working toward depreciation. The aussie dollar is steady. Tap as well,ech on and the kiwi dollar is holding steady. Chart on, and the reporting season is underway. Analysts have raised the earnings outlook. Economic activity picks up in the region. Politics may overshadow the stable earnings season. The governor speech that ou mentioned, whats speaking at a city conference. Watching there Global Economic prospects. Of u. S. Prospect stimulus package measures here in the u. S. , experiencing their own volatility. Sent these words. I would say getting something done before the election and executing on that would be difficult, given where we are in the level of detail. We are going to try to continue to work through these issues. Shery within the last hour, he told reporters that he and Speaker Pelosi have made significant compromises. We are speaking now with victoria. I wonder how much of a potential. O deal is going to be in this we have already seen significant pullback and the last few weeks. Victoria we have. I think that it is in the last couple of weeks that it has become priced in a little bit more. Of intel that point, the majority of investigators investors figured we would get some type of deal, maybe even a smaller deal. Individual stimulus checks going out or the Unemployment Insurance or the additional funds for that being given back. We are a little surprised that we are not seeing movement they are, and that could be part of the pulled the market back over the last few weeks. Even though minutia came out, and you played the clip of Steve Mnuchin speaking, we had cyclicals playing, and that really does not play into the story. You have to wonder if the market is doing some adjustment, and perhaps the movement that we are saying is not tied to the stimulus, and there is still some hope they small deal could be done in the next couple of weeks. Shery did you do some positioning with a recent pullback . The Third Quarter is typically a strong holiday season. Victoria right, it is strong season and Strong Quarter each year. We did a little bit of positioning. Talk about how earlier in the year, we started training some of those higher flying tech names, like apple and microsoft. There are still Large Holdings in our portfolio. We took a little off the table. Over the past week, we have been buying names like visa and broadcom. That is a great way to play the financial space. Banks is not a sector that we really like at this point in time, even though we have seen good earnings over the last couple of days. You can play the financial space through Credit Card Companies as more and more people are going away from cash. With covid, people are using Online Shopping and payment apps linked with credit cards. With broadcom, we like the secular growth story. You have a name here that has a lot of different vertical growth businesses, but it can continue to do well in, that have to do with communications and 5g. That is a great space that we feel that we can have. It is not really a sexy name, but it is done very well, and it has a strong Balance Sheet. Those are two names that we have added over the last week. Paul what is it that is convincing from an investment perspective about the banks right now . Victoria the majority of that is probably going to come through where the Federal Reserve is sitting right now. We know that they are all in and keeping rates at the lower end tied to zero. We anticipate that that will happen through 2023 based on what powell has said. It could be another two years before the economy gets back to where they think it should be, never that new normal is going to be. Whatever that new normal is going to be. We have heard banks talking about the net interest income. Concern there, until we get a steeper yield curve. Do not seetep we yields moving tremendously higher. Theably, until after election or closer to the end of the year, i do not think that we will see huge event there. For now, banks will probably not be our preferred space. Vshapedoking at a recovery, we are seeing a huge increase and covid cases and europe right now. There is risk around the contested u. S. Election results . Victoria there are some areas in the economy that are vshaped. Housingly areas like and durable goods and consumer confidence, and Small Business optimization, as of late. There are certain areas that have that vshaped recovery. But we do believe you need to put in place a barcode strategy a barbelled strategy. Look at walmart or mccormick, the spice company, as people cook more from home. Add in those names, and some tech names, like netflix and amazon, but all of that in your portfolio and kind of build a willll strategy, and that give you a buffer against the volatility that we are expecting to see, with increased cases of covid and the election, and even brexit that we anticipate will wrap up a little more as we get to the end of the year. Fernandez at a cross mark global investments, thank you for joining us. As get a quick check of the first word headlines. Supreme Court NomineeAmy Coney Barrett has faced further questioning by senators. They have chosen to focus on statements by President Trump. She was asked about his suggestion that the election might be delayed and the question about him pardoning himself if necessary. U. K. Prime minister Boris Johnson has told you eu leaders that he was disappointed about the lack of brexit talks. On thursday, johnsons selfimposed deadline is for the courts, but the two sides say that they remain far apart. Johnson is saying that he will review that u. K. Position after. Europe is rapidly becoming the newst covid19 focus, with cases rising in several countries. France is imposing new curfews and paris, and there is a partial lockdown in netherlands. Italy and portugal are performing record numbers. German chancellor Angela Merkel is saying that the country cannot afford a second wave. China is taking steeping action to step out a possible surge. The total number of new cases is only in the low double digits. But authorities are saying that they are taking no chances even in a small outbreak. Those are your first word headlines. Shery up next, a closer look at the latest u. S. Bank profits, starting to reserve lines before covid. Plus, more insight into the with hal tensions, brands and what Foreign Policy will look like under the next president. This is bloomberg. Shery wells fargo has fired or the 100 employees for improperly taking Coronavirus Relief funds. This is the same program and which jp morgan released its workers months ago. We had earnings from wells fargo that were not that great. The net income missed. You have more problems for the bank of a completely different nature. Busy day for the banking world and for wells fargo. Injury Disaster Loan Program was expanded earlier this year as a part of the 2 trillion government stimulus. Paychecke Bank Protection program, this money came directly from the fda. To lookks were urged out for suspicious deposits from the program. Fargo found wells improper activity from its own employees in the program. Paul in terms of the rest of the banks, we had some good results from goldman, which was a mixed bag. Hannah it is proven to be weirdly enough a sweet spot for the banks. They set aside massive amounts for loans and the first two quarters, and that number for the Third Quarter came in a way lower than expected. That led to a profit rebound. With goldman, there was a pandemic trading boom. Leadersame time, the have cautioned that we are not out of the woods. They are still very much in the wait and see mode. They have set aside the money, and they are not taking the losses yet, so we have a strange quarter. Paul financial reporter, Hannah Levitz in new york. Wells fargo cfo told bloomberg that he is expecting higher than expected severance and remediation charges to be a thing of the past. Those two things were higher than most people wouldve estimated. The structuring recharges will come when they come. They are generally harder to forecast. I think as we said on our call earlier today, given what we know, there is an exultation on the customer remediation fund, that we will work through it, and that should not be a part of the expanse expense story going forward. Through business simplification and product simplification and a range of other things, we should be able to run this company on a lower expense base. This is at a time when there are still a lot of concerns about the economy and how that will be for consumer thanks. As you were sort of mapping things out heading into this earnings season, do you get any sense here the economic environment is going to be supportive of the current plan that wells fargo has in place . We are seeing a real improvement in a lot of areas over q2 of this year. We do not know the effects of the next couple of quarters due to covid, but we are seeing Consumer Spending pickup through debit card and credit card. The Mortgage Market is picking up. A lot of home purchase activity is happening as in some cases people are moving from cities to suburbs, in part of what has happened with the virus. Autos, a lot of activity in autos. Credit, as a result looks better today than we thought it would one quarter ago. I think you have mentioned that provisions have been down below analyst expeditions. 29 basise ups were points in the quarter. While we are not out of the woods, there is still uncertainty in the past, it feels a lot better than it did a quarter ago. Feeling better and terms of delinquencies and loans . Know, from both the cares act and what has been offered by banks, the deferral programs that allowed people to take a pass on mortgage payment or credit card payments, were seeing the utilization of those deferrals come way down. We are down to about 5 of the consumer loans outstanding. The people who have come out of the deferrals have been permitting current, about 90 . Stimulus,s no more and the deferral programs are over, we will see who rolls into the liquid see. There will be some and a goodie about delinquency ambiguity until that happens. For both consumers and for businesses. Since the Federal Reserve order and 2018, you have been limited in regard to Balance Sheet growth. Youre worried that you cannot extend the type of lending that you want. For several, to Small Businesses. Is there a limitation to what you can do, and will they be a credit crunch and those areas . Will there be a credit crunch . I dont think so. More of the constraint is on the deposit side. So much liquidity is floated into the banking system, but the growths and for certain types, we have worked with customers to find other places for that money to go. On the loan side, that reverse is true. We could use more loan demand then we are seeing. The Housing Market is on fire. Autos are very busy, and people are buying cars. People have been a little slower to spend on credit cards, because they have been appropriately conservative as unemployment peaked and is still at higher levels, and there is more uncertainty. Wells fargowas the cfo john shrewsberry. Tiktok has asked a federal judge to block a second round of u. S. Restrictions. The details are ahead. This is bloomberg. Atl chinese social media tiktok is trying to fend off looming further restrictions in the United States. Stephen engles is tracking the developments and is joining us now from hong kong. Tiktok has already one already won one legal battle. What remains . Won the firstk trump executive order on tiktok, the first band. This wouldve banned tiktok from the u. S. App stores, with android and apple. , bytedance that argued that the Trump Administration exceeded its authority. The judge agreed. Preliminaryposed a injunction, halting the impending banana on the app ban on theending app store. Deadline is from trump and includes a deadline for the sale. Would forbid American Companies from providing the underlying web services that make the app available for a than on it states before the United States. Order exceeds Donald Trumps executive authority, and this is what they have said in the statement. There would be permanent devastating harm to tiktoks user base and competition, even if the government ban was lifted after a couple of weeks or months. Round one went to tiktok. We will see about round two. Shery what do we know about the nt group inisting a america . Stephen people with people familiar are saying that the u. S. Is possibly looking at putting the answer group and ,he ant group and wechat digital payments, a big part of that business. Chat pay from tencent, with the concern of the United States , as the apps get more exposure, giving chinese apps exposure to millions of peoples banking information and personal user data. That is what the u. S. Is arguing. We reported that perhaps the United States was looking at putting ant on this embassy list, a blacklist. We are hearing that the Chinese Foreign ministry has accused the u. S. Of economic bullying. The Trump Administration has not produced any substantial information. The latest information about the blacklisting is coming from reuters. Shery that was stephen engle, joining us from hong kong. Lets get the quickest check from the latest business flash headlines. As the worlds biggest car market becomes more more a source of income, it is recruiting in major cities. Tesla and its approach and u. S. With its Communication Team has largely been disbanded. In new yorkords thanks to a vote of confidence on wall street. 20 of the market by 2025. Data shows a 60 for new vehicle owners. Up next, what will the u. S. China look like under the next president . We dig into that with hal brands. This is bloomberg. Paul you are watching daybreak australia. We have been hearing from the with a bank of austria, speech being given about the recovery of an uneven recession. Hes been saying that the effect on the Household Income in australia has been following has been following. He is reiterated that there is not going to be any great hikes years,tria release three until inflation gets and that target range, at least 2 to 3 . Dollar the aussie weakening a little bit. Lets get a check on the first world headlines. Fired more than 100 employees for improperly using Coronavirus Relief funds. Foster visitations were made about the relief aid. False revelations were made about the relief aid, similar to what happened with jp morgan. To theocks react stimulus deal perhaps not passe before the election. Nancytion says that pelosi and Steve Mnuchin spoke about how the democrats may be holding back in hopes of winning the senate next month and driving their own bill. Governmentainst the continue, as the king returned home from germany, and they did not stop. Protesters want new elections, because additional reform, and curbs on the power of the king. They said that they do not want to bring down the monarchy. Malaysia faces more political upheaval. United Malays National organization those were your first word headlines. Calls for for morning snapshot of notable traits for the day. Sophie is with us in hong kong. Of ans a little bit outside, but the down trend has continued. Sophie taking a longerterm hear that 2020 is the turning point to diversify away from the greenback, including more liquid currencies against the dollar, such as the euro, the yen, and the pound. Themparison was drawn to of disrupteriod risks are election likely adding to the pressure. Bol we look at the be ok k. What are we expecting from the government . Stephen sophie governor lee said that the central bank would be willing to ramp up bond buys. Capital economics expects the next move to be to reach into a nonconventional toolbox and announced an explicit policymakers will likely want to rein in funding costs. Shery lets turn to car makers. What is driving the optimism there . Sophie we have seen a state of updates from chinese carmakers. With moreting this upbeat numbers, when it comes to chinese car sales. September report, the expectation is that there can be great growth by 2025. There are policy incidents from the government. Also, key for the industry, tesla, which is driving a rising tide. Are less than three weeks, about three weeks away from the u. S. Election. President trump and joe biden are making their final pitches. One of the talking points has been increasingly tense relationships with china. Joining us now about how that relationship to change under the next administration, is hal brands. Hal is also a Bloomberg Opinion columnist. If you look at any number of polls, President Trump appears to be in trouble right now. Would you expect to hear an increase in antichina rhetoric as we get closer to election day . I think it is possible. Although one of the things that has been unusual about the selection, is that for policy has been absent from the debate. Cyclebate and election has been so dominated by covid and the president s personality. I think what will happen regardless of the election outcome, is that the United States will continue to move to a more competitive stance, visavis beijing. I do not think that it will change under the Biden Administration. What might change under the Biden Administration . To think some of the heat would change up . Hal i think there would be less of an infosys on less of an emphasis on broad range, in favor of more narrowly financial sanctions on chinese firms or visuals engaged in malign hader. Malignered be behavior. The trumparea that Administration May was the position toward china and then the position toward americas allies. I think the Biden Administration realizes that the only way for the United States to conserve interest is to combine the dealing of the world with the challenges. Shery with some of those challenges including the tech sector, what do expect with policy changes in dealing with huawei and tiktok and alibaba . Hal the major element missing from the Trump Administration policy is not a willingness to warn about the dangers of technological dependence on china, it is been the inability to help develop alternative dependence on china. When american representatives visited the year conference, much of what they heard is that there are dangers and letting while weight build huawei build 5g. By perhaps 10 or 12 leading democracies, to pull better alternatives for 5g. Shery there have been more more advocates as we get this consensus of pushing back against china. Advocates for decoupling with china. What would be the broader, longterm implications for that for the United States . Hal i do not think that there would be a complete decoupling. I do think that there needs to areas,upling and some where it dependence on an authoritarian rival is dangerous. There is a report that the department of defense put out, that Many Americans have source components made in china. I do think that decoupling will happen quicker than we might expect because the Political Climate will increasingly at risk for firms that are doing business in china and might risk becoming the victim of a further downturn in relations. , professor ofds johns hopkins. Rounds, morest than just progress for getting people back to work. This is bloomberg. Australiarve bank of chief says that he wants more than just progress to help with employment. The jobless rates is expected to remain around 7 . Recovers from its a rare recession, its first recession in 30 years. We heard from james mcintyre, about how the government is saying that a lot of what has been released from the government was a focus on jobs. What more was he saying should be done . James he is saying that basically the unemployment will bring the unemployment rates back. It will put the market in the place that needs to be to generate enough tightness for 2 to 3 inflation. There is a real shift. This wasnt just from the governors speech, but also from the government pleasure release. Is very much focused on seeing everyone get employment back and getting employment back hard enough and fast enough, and this is reported if they have any hope of saying inflation return sustainably. Shery we are getting australias september unemployment rates in about two hours from now. Luckily expect in that data . What can we expect from that data . Tell us a little book about what has changed. James what we can expect to see ism the labor market data where employment was at the beginning of september. That is when the survey was taken. It is likely that we will see a fall there. We got a little bit of a surprise and the august data because of the large lockdown in melbourne. Hitas expected that with jobs growth. We are likely to see that come through in september. That is something that will be buffered on the others with recovery in other states. The labor market focus, that shift, that is an issue there for the rba. It plays into another point that the governor made in his speech today, reiterating how long the rba expects to be on hold before rates are raised. They do not just want to see inflation get back to two to 3 . They want it to actually be there, and they went to sustainably forecast inflation going forward. Governor brought and the broadened the scope to make it clear that they want to see the labor market tighten up and the unemployment rates get back down to where it needs to be. The budget was released last tuesday by the australian government, and with that, came confidence in the rba, and from those powers, it was pretty clear that fiscal authorities were expecting recovery for employment. They are expecting jobs not getting back to where they were before the pandemic for three years. We know from history, that needs to get below 5 . The full employment rates needs to push beyond that to get the kind of inflation from the rba. Than thet be lower previous. Shery thank you so much, james mcintyre. G20 agreed to review at debt initiative. As the pandemic pushes millions of people into poverty, the world bank and ims are pushing for continued relief and support for the lower income nations. They are encouraging governments to take advantage of record vote Interest Rates. We heard about this earlier. Levelsworries about that are going up and not for now. For now, the biggest worry is that if we do not do enough to support the economy until we have a durable exit from the health crisis. With Interest Rates being at a record low, governments can productore potent growth so they can repay the debt that they are acquiring now. This is however, not the case for low Income Countries already in debt stress. This is why it is so important that we make sure that they are provided with relief and supported with grants and succession of financing, a big great from our meetings. Risk, and the biggest you have increased your production somewhat . The situation today is less dire than it was a couple of months ago, but it is dire, nonetheless. 4. 4 . E projecting the biggest problem is that we face is that we are not out of the woods of the pandemic yet. Until we have this durable exit, we have to be concerned whether there is sufficient support for firm and workers. So that we do not hit a wall of massive bankruptcies and massive increases under limit. Shortterm, this is my biggest worry. Longterm, we are very concerned this the current that crisis is brain. The sectors of that this crisis is bringing. Women,t affected are young people, they are hit the hardest. How we make sure that inequality does not expand dramatically as a result of this crisis, with the digital economy, working really well, and the rest of the economy doing poorly. That requires sound policy and thinking and making right now to prevent this. Covid19do not have a becine and 20 31, will it another loss year for the economy . James if we do not have the vaccine, we will sustain support that we have had in 2020. There will be recovery, but it will not be as potent as we needed to be. What do we project for next year . This will not bring us to the arepandemic levels, we projecting that by 2025, we will 28e lost 20 1 trillion trillion as a result of his pandemic. Uncertainty and not enough to bring the vibrancy to our economy until we get a that weor treatment so can exit the crisis. Paul that was the managing director of imf speaking to bloombergs francine lacqua. We have plenty more ahead. This is bloomberg. Shery singapore will not see the return of mass air travel for at least two years. Only the wide availability of an effective vaccine will help countries reopen their borders and allow for free travel. Spoke about the balancing act of maintaining the virus and keeping the economy functioning. Bordersnk closing the and suffering the economic crisis, or you open up, and you focus you suffer from the economic crisis of the virus. We do not know much about the virus. We know that it is very infectious. We do not have test facilities. At that time, back in march, we in 2000 people in one day. That was mostly for hospitals. Today, the testing is still there. The biggest difference is number one, we have kept the epidemic under control. If we have not, then there is nothing to talk about. Cases, and Foreign Workers down. That is a big milestone. Secondly, it is no longer such a big constraint the more. 30,000 tests doing per day and going up to about 40,000 in november. I think that a good portion could be dedicated to airport usage. I think they could better strike a balance between travel as well as epidemic control. Anchor what are the prospects for Singapore Airlines . When does it support from the when theinally support runs dry, what are the prospects for the carrier . It is a dire situation, and we do not really have a domestic market. Is very muchcal related to the state of the airport. Where do gradually open up the borders. The key destinations around the those once we establish figures, it would not be commercially viable. But keeping the links open and the flights going, as some passions are some passengers are traveling, when the vaccine becomes widely available, at least the links are open and the passengers have the time. We have kept in touch with our customers. Prospects,t are the which you have to rein in the plans for terminal five . There were so much hope for the terminal five. Which you have to downsize those plans . We have to. Terminal five, the assumptions have now completely changed. Expandedave done is the development for the next two years. Even now, i do not have a crystal ball for terminal five or what will happen to global aviation. But those two years, will give ,s time to assess the situation and we can decide what to do with terminal five at the end of the period. Anchor when do you see the best travel market going ahead . When there is a vaccine, and the vaccine is widely available around the world, and the people gain confidence to travel again into other countries, then we will have aviation back on its feet, almost fully on its feet. How long will that take . I cannot take a guess. I would say minimally, a couple of years. Paul that was singapores minister of transport, ong ye kung. Coming up in the next hour, we behindop, as the company sensation bts begins trading today. Vicell also speak with chancellor Claire Robinson about new zealand elections on saturday. The market opens, and this is bloomberg. Good morning. I am paul allen in sydney. We are counting down to asias major market opens. Shery i am shery ahn in new york. Welcome to daybreak asia. It looks set to extend u. S. Declines. Stephen mnuchin points to political reality, saying a deal before november 3 would be difficult. Financials underperform the broader market