Infection rates low in tokyo but hong kong says the situation is increasingly severe. Jack ma looks to make more headlines. He is aiming for a 200 billion valuation with between listings in hong kong and shanghai. Look at how take a we are setting up when it comes to the asian open. We have a lot of positivity carrying on from that session. Investors are backing that buy the dip trend. The nasdaq hitting the alltime high. The s p hitting positive for the year. S p active futures contracts a little bit lower at the moment but it seems like the positive. Evelopment on vaccines trading sideways if you will. The dollar was broadly weaker in g10 except for the yen. We had Dollar Strength and yen weakness overnight. That is the handle we are looking at ahead of Inflation Numbers out of japan and getting machine tool numbers as well as some Retail Sentiment numbers by way of Department Store sales. Crude and gold were both a little bit lower in the asian start to the session. Some positive developments in the race to come up with a Coronavirus Vaccine. Oxford university and astrazeneca releasing publishing data from their early tests. Lets get more from yvonne man in hong kong. What do we glean i guess from these latest very preliminary results from astrazeneca . Yvonne preliminary but positive, as you said, from the early human testing of the university of Oxford Astrazeneca study of about 1000 or more patients. This was interesting because they found that dual immune responses were able to create these neutralizing, protecting antibodies, and then also producing these pcells, white blood cells that haunt and target the virus hunt and target the virus, a durable way of immunity versus just antibodies alone. The ceo saying the aim now if all goes well is for mass production of this vaccine as early as later on this year. The results, as you mentioned, were not enough to convince the market. There were some unconvinced this is matching the progress we are seeing from other vaccine candidates like pfizer, i o and tact, that partnership as well as moderna. And said that one shows inoculation. To do this in double dosages means it will be more complicated for manufacturing and logistics. Experts say the vaccine may wane over time in repeat dosages. Shery we did see astrazeneca allying only to really lose of its gains. It seems that in this very competitive vaccine landscape, it did not really impressed, so how does it compare to other vaccine candidates . Yvonne right. Good newsee sets of we saw overnight with other types of studies that come out with positive developments. One was from the chinese but the pharma company, in there made clinicals their made clinical midclinicalir study showed immune responses. They did stress that at this point, no participants were exposed to the sarscov2 virus, suggesting that it was not possible for the study to whether the candidate vaccine effectively protects against infection. Another one that we saw, another front runner right now, is pfizer and bio and tech. They deliver positive results in their trials as well. The german phase of their study. The first time also including celltea spell t response we saw from a u. S. Trial. Yvonne man in hong kong with the latest developments on vaccines. Still ahead, how that tops the s p 500 erased yeartodate losses. The outlook for u. S. And asian first Franklin Financial Services, next. We are expecting inflation data from japan at the bottom of the hour. Continuum economics joins us for the numbers later. This is bloomberg. Karina you are watching daybreak asia. I am Karina Mitchell with first word headlines. China is warning the u. K. To expend excess tradition treaty with hong kong, calling the statement a brutal in his internal affairs. Beijing is urging london wrong words and actions, saying comments on human rights were smears and slander. Ties are strained. Meanwhile, unemployment in Hong Kong Rose last month to 6. 2 , the highest level in 15 years, as the economy real from escalating chinau. S. Tensions and the coronavirus. The increase marks nine consecutive months of worsening Employment Data and is an indication of hong kongs deepest recession on record. The competition for jobs is elevating the citys already enormous wealth gap. South korea is central to the global tech supply chain, but it is failing to keep pace with the largest customers. The result is the combined capitalization of all kospi companies is less than the market value of apple, amazon, or microsoft. The kospi is little changed this year compared with gains of 31 for apple, 29 for microsoft, and a whopping 60 for amazon. In other news, chinas massive a floodwater record with another river surge looming. Torrential rains have left with the property and agricultural damage bill high. The Biggest Oil Refiner, sinopec, is planning to reduce production at home as the flood hits demand. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Shery. Shery lets get another check of the markets. Asian stocks look set to climb after tech fuel rally lifted their u. S. Counterparts the highest points since february. This following encouraging news on a potential virus vaccine from Oxford University and astrazeneca. Our next guest does not view vaccine data as important in places where the virus is out of control, such as here in the u. S. Lets bring in the chief Market Strategist. Always great having you with us. How long are we going to continue trading on virus headlines . Think we arei going to have plenty more opportunities to do virus trades through the fall. We do not see a vaccine coming into play until maybe november at the earliest for the First Quarter of 2021 and we are always going to have market reactions with this type of news. Shery we have continued to see this rally despite some disappointment, whether it is on the vaccine front or infections rising around the u. S. , and what has been really interesting is that volatility has really remained high. This gtv chart on the bloomberg showing how elevated the vix has been, especially in the last few months, where it has been stuck at around that 30 level. Right now, it seems to have come down a little bit from those highs. What is this telling us . Brett i will tell you that in our eyes, it is pretty positive. We had the vix close today at about a four month low, and i think that is an important thing to Pay Attention to. It is certainly driving that with the stock market reaching, you know, higher highs. I think that trend is going to continue. Is the s p our firm 500 will hit an alltime high prior to the november election. To seewhen you continue broader markets being driven by any, you know, nuance of vaccine developments, progress, and in our previous guest he said you normally would not be paying attention to these very early stages of any Clinical Trial right . You are an expert, now everyone is an expert if you have money in this market. How do you invest if you dont want to be driven by every micro development on the vaccine front . Job is to focus and make calls on the market, and i will tell you the two main things i am focused on right here is number one, the intervention by the Federal Reserve and also by congress with the fiscal response, and i am focused on that. We believe that the deaths are going to continue to trend down and that the fiscal response is going to continue to be there through congress, and we also believe this unprecedented fed response, unlimited back stop right there, bringing credit spreads down, is something you just cannot fight, and so, those are the two main macro things we are focused on as a firm. You see a return to cyclicals, particularly, if as you say, this requires confidence to return . Astt well, i think as long deaths continue to trend down, we believe there is a 30 to 45 day lag by the time the science actually gets out there to mainstream main street. We believe that the deaths will continue to go down, and we believe the reopening play is really your best value here in the u. S. Market. Shery do you see the potential for upside risk in the stock markets, given that a lot of the negative news has already been discounted . Brett i do. I believe that our price target on the market here for the end of the year is 3500 on the s p, and i believe that as the economy reopens and deaths continue to trend down that this market is going to continue to melt up. First Franklin Financial Services chief Market Strategist nadine terman, thank you so much for that. Brett ewing, thank you so much for that. Republicans and democrats are lining up their list of demands for a fourth stimulus package but divisions are not necessarily along party lines. We will explain, next. This is bloomberg. Shery chevron has agreed to buy noble energy for 5 billion in shares to be five beef up its presence in the permian basin. It is the first major deal since the coronavirus introduced slump in auto markets. The chairman and ceo told bloomberg why the portfolio makes sense for chevron. Deal that builds on chevrons strengths, highquality assets at a fair price. It is a good deal for the shareholders of both companies, and i think it shows why we are different than many others in our set your. This is not just about the permian basin. Noble has got a very impressive position in the Eastern Mediterranean, position in west africa, a nice position in colorado, so this is a diversified company with assets that fit our portfolio well that fit our portfolio well but fit our capabilities well. There shareholders now have access to a stronger balance sheets, stronger dividend, and they retain some upside exposure to an eventual recovery in price. From that perspective it seems the takeover was opportunistic rather than strategic which leads me to believe this is not the start of a buying spree in the permian to consolidate even more acreage there. Is that the correct interpretation . We are always looking and we look at things through the lens of value. We have to see a good portfolio fit, so there are strategic screens we look at for any transaction. We have a pretty high bar for these things, and we have to believe these are assets that will compete for capital within our portfolio that will strengthen our portfolio longterm and help us improve returns. This is a deal that is on earningspershare, Free Cash Flow per share, so it has Strong Financial attributes and these are assets we expect to be in our portfolio for a long, long time to come. It is a strategic fit, and certainly, we think the time is right for both companies to engage in this combination. If you had a little sheet of paper with names scribbled on it, are there any more names on that sheet of paper for possible takeover . We always have a long sheet of names that we look at, but theres also a strict set of criteria that we apply, and we have got a high bar. We look to create synergies here, looking to improve returns. This is in line with our disciplined returns focused strategy, and so, we are focused on this transaction. We think its a very good one for the shareholders of both companies and that is really our focus today. Something that was interesting with noble in particular is was the bigger driver the assets, or was it conventional . Where do you see unconventional here in the u. S. , where do you see the biggest appeal . All of the above. It is a really attractive asset base. Sok, i think they have been successful in the Eastern Mediterranean that it does bring with it a set of geopolitical complexities and potential risks that for a company the size of noble, is pretty meaningful. We have a large global, diversified portfolio. We have exposure to many different basins, many different geographies, many different governments, and we have got many decades of experience in managing these risks, so that is a very nice fit. Their position in the permian is very good, but it is not the same scale as ours. We bring that together and we have scale, efficiencies, capital efficiencies that we will see, and their position in colorado was an ad for us we like. We have unconventionals in argentina, in canada, and in the u. S. , in texas, and new mexico. This gives us exposure to another unconventional base and that is a highquality resource. The entire portfolio was a nice fit. It is not about one or the other. Shery chevron chairman and ceo mike worth. Lets get a check of the business flash headlines. It is said to be seeking evaluation of more than 200 billion dollars with twin listings in hong kong and shanghai. It is already more highly valued than most wall street firms. The aim to raise more than saudi aramcos recent 29 billion hold and has been accelerating into an online mode for loans, travel services, and delivery to challenge tencent. Softbank is said to have hired Goldman Sachs. They are seeking about 1 billion from any sale. Earlier this month, softbank said it would separate from its chipmaker arm because its investment requirements are limiting arms ability to grow. A billiondollar sale would be 66 more than arm paid for in 2018. Ebay is set to be near a deal to sell its classified ad unit two a norwegian online marketplace. The sale would be worth 9 billion and ebay would retain a minority stake. Shares were halted monday pending an announcement. It was competing with an ecommerce investor and private Equity Consortium backed by blackstone. The push for a fourth economic stimulus package in the u. S. , and hitting crunch time, the 2. 9 trillion in initial stimulus is almost out and divisions over what to do next are not necessarily along party lines. Joe sobczyk joins us from washington. Joe, President Trump also again saying he wants a payroll tax cut as part of that stimulus package. Is he going to get it . Of resistance lot among republicans in the senate to cutting payroll taxes, which are used to find the Social Security and medicare programs. Trump has repeatedly offered this up as a solution. It has been rejected or at least ignored in the past, and theres already some pushback from a number of people in the senate the finance chairman, chuck grassley. He is questioning how serious the administration is about that, and trump indeed has vacillated somewhat, calling it very important but suggesting he might not necessarily stand in the way if they passed something that does not include that. For it, butssing there are a number of republicans that have they are concerned about it because of the effect it would have on the Social Security trust fund but also because it would largely impact people who have jobs and not the millions of people who are now out of work. Joe, so the federal money running out now, how soon could we expect this stimulus package they will bejoe entering furious negation additions negotiations. Stephen mnuchin said he wants it done by the end of the month. It may bleed over into the first week of august. After that, the senate and the house are both scheduled to be out of town on august. After that, the Election Campaign is taking a lot of attention. It probably will take all three weeks. They have to get something hammered out. They have got to resolve the differences among republicans, and then they face a pretty unified front among democrats, who have already proposed their own package. To want toing extract quite a bit, some concessions from the republicans, and really, the pressure will be on the white house and the Republican Senate to make it work, because trump himself has been promising that by the third quarter, the economy is going to take off, but there is a lot of signs that that is not really going to be a very good prediction at this point. We are getting breaking news crossing the bloomberg that the house has blocked the use of k on work devices. Are you really making tik tok videos on your work phone . That is something under consideration over these concerns over national security, data harvesting from the owner. Joe right. This has been an issue thats crossed party lines. There is a great deal of suspicion about tiktok and its relationship to china. Of pressuresot building from both sides of the white house as well as congress, to take stronger action. There is a great deal of concern right now about the possibility of election interference, and a lot of social Media Companies have been in the crosshairs for some time. Of more of a symbolic measure, as we point that probably are not too many federal employees on their workktok phones but this does happen. It is one more little slam isinst tiktok and there undoubtedly more coming from the administration and possibly congress. They joe sobczyk with latest from washington. And we have the largest iron ore producer now reporting their secondquarter results, and we are hearing that their secondquarter iron outputs came in at 67. 6 million tons. This is slightly missing estimates of 69 million. They also see their full year iron output coming in at between to 330 million. Their sales were down year on year, 12 , to 54. 6 million. Also, copper production coming in between 360 million to 380 million tons. The expectation was for that rally in iron ore prices, which rose above 100 a ton to help them recover in the secondquarter. The price of the pandemic inflation in japan expected to take another hit. It is due to decreased demand. The june cpi data out in a moment. We will have instant reaction. This is bloomberg. Haidi we are just getting breaking news out of japan when it comes to the latest inflation readings. National cpi year on year, that number being on expectations. Bang expectations and matching the same pace we saw in the previous month of may, excluding fresh fruit year on year. We are seeing flat inflation or just a sort of lack of any progress but still better than expected of a slight contraction, e