Fed president Robert Kaplan this hour. President trump orders chinese to shutdeo app tiktok down in the u. S. Next month unless there is a deal with microsoft or another leading american company. Breaking news out of south korea. The cpi numbers for the month of july year on year, a growth of 0. 3 . This is of course after inflation remains flat for the previous month year on year. We have seen somewhat muted demand. Perhaps weighing on the month on month numbers. We are seeing inflation at zero growth. This really missing expectations that prices would rise 0. 1 if also inflation is decelerating from the previous month of june. Core cpi take out oil prices, and you get a rise of 0. 7 , in line with estimates, and slight acceleration from the previous month. We have seen brent crude prices recover somewhat from aprils slump but still down 38 year on year also. The are also expecting tokyo Inflation Numbers within the hour so take a look at what japanese futures are doing at the moment. 106japanese steady at that level. We have seen significant strengths on the japanese yen but for the past two sessions, we have seen a little bit of weakness against the u. S. Dollar. Japanese futures at the moment unchanged. They rose yesterday. The nikkei rose after falling all of last week so watch out for the japanese markets which we did have for the first ,uarter gdp contraction unchanged at an annualized 2. 2 from numbers yesterday. U. S. Futures flat after stocks rallied. We have the tech sector leading that rally. Crude prices under pressure again, headed for the 40 a barrel level. We do have opecplus starting to unleash crude again after historic cuts. Haidi. With tech. S stick our top story, President Trump the u. S. Should get a big cut of any sale of tiktoks american operations. Pres. Trump the United States should get a large percentage of that price because we are making it possible. Without us, its like the landlord and the tenant, and without the lease, the tenant does not have the value. We are sort of in a certain way the lease. We make it possible to have this great success. Is just one example of how any deal between microsoft or tiktok would be complicated one. Melissa hathaway, president of Hathaway Global strategies. Wonderful to have you. Really appreciate your time. I want to take a step back because one of the points you made i thought was quite interesting and this is really kind of a personal issue for President Trump because of tiktoks role in the tulsa rally and attendance there. Does this mean it becomes a nonevent if we get a change of leadership in november . Melissa i think that the microsoft talks are important for creating it to be a u. S. Based company. Inre certainly was concern the United States based on the amount of data that tiktok has access to from 100 million americans that was raised by congress but i dont think the president stepped in until it became personal to him. The lack of attendance of the tulsa rally that was really, you could point to kapok and k pop and tiktok working in adjacent markets for that matter. September 15 is going to be a big day, whether or not microsoft can cut a deal to take over this social media Success Story from china. There are myriad issues with regards to a short timeline, the pricing you see given the political pressures on the business, despite the fact that it has been such a pandemic Success Story. Im wondering how ideal is microsoft as a partner from the u. S. Government point of view, given his history in helping build the great firewall, and having been in china . Well,l melissa microsoft understands what it takes to operate in china, and then taking over a key platform, just like they did with skype from estonia in 2007, and they left it as a whollyowned subsidiary so one would hope they do the same thing for ,iktok and really take it over being a u. S. Company broadly. Understand the transparency of how the data is used and repurposed and allowing it to continue to be the sensation it is. A securityiktok threat . Melissa i think that any company that is collecting data about its users is a threat, whether that is tiktok, google, twitter, facebook. The important thing is to get to the data handling transparency. Isre is the data stored, how it used, who and how is it repurposed for market gains . All of these platforms are having a similar problem. It is just a question of when they come into the political crosshairs, whether it is here in the United States, in china, or in europe. Shery in the case of huawei, they insist they do not have access to personal data, so how much of a Security Threat does huawei pose, and when it comes to huawei meeting in the network space, that seems to be a more beijing policy drive. Is an economic versus a political motivation for china . Melissa well, i think that huawei is a different story from tiktok, and i think that their technology is very good. But as part of the china 2025 strategy, huawei is one of the key National Companies core to and asng china 2025, such, they are getting assistance from beijing. For are getting subsidized the price point of their product, and they are trade preferences part of the belt and road initiative, so i think huawei and how it is being treated from beijing is very different than how tiktok is being treated. Haidi the way that tech has become the new front in the u. S. China world and chinas pursuit of dominance in this area and the threat of a bifurcated internet and bifurcated world of tech, what is a better alternative strategy for the u. S. Government to be pursuing here . Melissa i really think the u. S. Government should be thinking about how do we what technologies do we really want to champion as we are Going Forward and where do we want to be 10 years from now . Because this is truly what china did a decade ago. Start to chart that pass through trade preferences and negotiations, through preferential research and Development Tax credits, through protecting these particular companies and technologies that we think are important to our economic future. A 10 year strategy, not this quarter by quarter or term by term. We need to think about the longterm Economic Health and wellbeing of the United States for the companies or the western alliance broadly. What are the true priorities in the ways that china is building its own National Champions . What should the u. S. Be prioritizing . Melissa we need to be really mindful that the chinese and. Heir strategy are transparent they are published. They are published in english. Think the thing that maybe surprises the americans is that they are executing these strategies. Many republish but dont actually follow and execute. That is completely different over there. They have broadcast quite clearly what they want and the sectors they want to dominate in from biotechnology to agriculture to smart cities and smart technologies, quantum computing and the like, and so, you know, they are investing accordingly. This for be looking at where we are going to compete and where are we going to coexist and how do we Work Together . Right now, we are forcing our allies to choose between us versus them, and we have a very with. World to work the asiapacific region, our colleagues in singapore and indonesia and thailand and vietnam and japan and philippines, etc. , are feeling the tension more significantly than our european allies and allies in other parts of the world. Shery melissa hathaway, great to have you with us. More perspective on tiktok ahead with your ration geotech analyst later. Pimco says more firms will be allowed to fail as policymakers tighten support. The outlook for debt defaults with the apex portfolio manager. Plus hong kong bans facetoface teaching until further notice. This is bloomberg. Karina you are watching daybreak asia. I am Karina Mitchell. The United States remains the focus of the coronavirus pandemic at several areas are starting to see improvement. California and arizona reported positive trends on new infections although they admit one week does not change the overall picture. U. S. Fatalities are over 155,000. Global infections are above 18 million. The pandemic adding one million new cases every four days. The u. S. Treasury has outlined how much it needs to borrow to keep the economy going for the next three months. Amid unprecedented spending on the coronavirus fallout. It expects to raise almost 1 trillion in debt through september, more than 270 billion higher than it projected in may. Since then, virus cases have surged, forcing congress to consider new fiscal stimulus. The more senior another round of relief is critical for the u. S. Economy. The fed is due to expire and congress is divided on what to do next. Charles evans says any failure to launch new support would be hugely damaging. His dallas colleague says enhanced benefits have probably kept more people in work. The australian city of melbourne enters new stricter lockdown measures from midnight on wednesday. There will be a curfew from 8 00 p. M. To 5 00 a. M. Large parts of Manufacturing Centers will be shut down and people will only be allowed outside for one hour of exercise. Victoria fights a spike in virus cases. 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. Staying with the pandemic, cases in hong kong have slowed while experts warn india is flying blind on its virus data. Yvonne man has the latest. Lets start where you are. Some signs things may be easing in hong kong. Reported cases on monday here, which is the first of 12. The number of daily cases actually not surpassed 100s, the triple digits, so certainly, theres signs of perhaps some kind of easing here although a quarter of those 80 cases were still untraceable, but one day does not make a trend. You heard from the government yesterday, extending these social distancing measures for at least another week. Dine out after 6 00 p. M. And 5 00 a. M. Has only allowed bars and gyms to remain closed. I buckle experts did arrive over the weekend to help when it comes to expanding testing, makeshift hospitals have also been created and set up here. Still not a time to let your guard down. We heard that hong kong wants to resume classes soon but the government saying they are banning facetoface teaching and classroom learning until further notice. On the Online Learning is allowed. The kind of questions over mortality rates continue to confound, particularly when it comes to india. Or tell eddie rates relatively low despite having the worlds Fastest Growing epidemic. Mortality rates relatively low despite having the worlds Fastest Growing epidemic. Yvonne the reason why india is seen as a Success Story, but more and more so, hearing from independent experts saying the data is outdated. Failing, the country is to properly record the number of deaths. To show you a chart and comparing it to some of the top infected countries in the world, indiana remains pretty low on that list. The mortality rate, 2. 1 . The death rate is nearly 20 times lower than the u. S. Despite india having the thirdhighest number of virus cases. India has when it comes to testing capacity, it is also one of the lowest among most infected countries as well. Just last week, we heard from big cities like mumbai, new delhi, chennai open. They revised their covid deaths significantly upwards for the month of june and experts say the big problems still remain but the data is mired with a lot of red tape and that is why we are seeing these delays. One even likened it to a pilot on an aircraft flying blind. Still no signs that in india, this virus is getting to the worst of it at this point. Last week, we saw every day 50,000 new cases have been added. Bady it would be really for Southeast Asia as well. We saw some markets slump on news of lockdowns in the region. What is in store today . Yvonne we will see how this plays out but you kind of see how these markets react. Anytime you see headlines of more stricter restrictions or even lockdowns being reimposed, you do see markets slump. Indonesia and philippines were a clear example of that yesterday. They were the top two losers in the region on monday. This is on news in jakarta. Delaying the easing by social distancing measures by at least another two weeks. Iny were seeing a surge cases once again. The jakarta composites fell as much as 4 . The rupiah has also been under pressure. It fell more than 3 after the stricterrought back a lockdown starting today. You know these two markets, indonesia remains the highest in terms of virus cases in the Southeast Asia region. Philippines is a close second so investors at this point are probably weighing whether to pull back from these markets. They are a little bit worried that when we get these secondquarter gdp numbers, they may be worse than what is expected. Keep in mind, indonesia reports gdpe gdp numbers their numbers on wednesday this week. Haidi yvonne man in hong kong. Earlier, we spoke with device unit of Johns Hopkins rubric school of Public Health. She told us things could get worse once the flu season rolls around. It is a major concern. I think the worlds hitching records and the total number of coronavirus cases, so we are really in the thick of the pandemic and we are seeing surges in the philippines and in vietnam, which have not had serious coronavirus outbreaks to date, and even japan has had the highest number of cases that is reported. I think in japan, i think the answer very clearly is that they clearly opened up, acted like the virus was behind them. That is a mistake that every single country in the world will make at its own peril. The other countries, they have been almost completely stared at the beginning and people wondered whether there was some special thing. It probably was just a little luck and very Good Public Health work and they will need some of those under control. How should we be looking at this . Is it better to be in a full lockdown for a shorter amount of time to save lives than the kind of open not so open phase a little longer . Joshua it is different for different countries. A lockdown is necessary to really control the spread and then when it comes way down, you cannot stay locked down forever. Just have to be prepared even some bad luck will lead to a resurgence. You have to be able to have the capacity to respond to that. We are going to see the Public Health systems of vietnam and the philippines tested and that is not just walking down. That is all the chase and come all the testing, all the things that have to happen. I think japan, even though it is having a surge of cases, should be able to respond to this. They are still relatively there are still relatively very few deaths in these countries. If they can respond effectively, they should keep this down. It is not surprising we will see these surges from time to time. The key is whether people can get them back. Are the northern months are those months going to be worse . Joshua it is hard to imagine much worse because the value vis in so many places, rising so quickly, and our rates are high. Its possible it could be worse, particularly as the flu comes. If we are able to control the coronavirus through distancing, the flu may not be so bad. On the other hand, we are not able to control the coronavirus through distancing so it may be even worse with the flu season. We dont know. It was not long ago that people were saying the summer is going to be better. It is very hard to predict with this virus. We just need to be focused on the severe situation we are in right now. What drugs work to try and cure the sick and which ones dont . Evidencehe drugs with are remdesivir, steroids, inhaled immuno modulating drugs, and we know hydroxychloroquine and do not have evidence for them at this point. That the i would say other thing that has a growing amount of evidence and may be even more widely used cm is convalescent plasma, using the antibodies from people who have. Ecovered to treat there are definitive studies happening now but there is emerging evidence from repeated studies of a benefit there. Sharfstein. A the school is supported by michael bloomberg, founder of bloomberg lp and bloomberg philanthropys. Do not miss our exclusive interview with singapore tourism boards ceo. He will be talking about singapores campaign to spur Domestic Travel as the asian hub is hit hard by the coronavirus. This is bloomberg. Shery here is a quick check of the latest business flash headlines. Zoom is to rely on thirdparty operations in china to reduce the chance of a ban in the United States. America remains its biggest revenue market and companys with china are under increasing pressure from the antibeijing ceiling in washington. Zoom is facing stiff competition in china where other companies have more revenue and user numbers. Twitter is under investigation by the federal trade commission for using phone numbers uploaded for security purposes to target people with advertising. The fec alleges the social media platform violated the 2011 agreement to better protect users personal data after it was found to be misleading consumers. The latest probe may lead to losses of up to . 25 billion. Almost 6s selling billion of bonds with rockbottom yields in the largest corporate no sale in the environmental, social, and governance sector. It wants to support black entrepreneurs as well as Affordable Housing and Small Businesses hit by covid19. Alphabet has only borrowed in the investmentgrade market. The last issue was four years ago. Get you thewill latest on the stimulus deal as President