The chicago fed president australia heads into earnings season amid the worst recession in decades and a pandemic crippling the economy promises to be one of the most challenging periods on record. Shery u. S. Futures opening flat. This after they finish mixed on the friday session. We had u. S. Stocks falling with the s p 500 flat after five sessions of gains. We have escalating u. S. China tensions. Some positive data. We have the dollar inventing after u. S. July job dated beat estimates. The nasa composite was led lower. Composite was led lower. We had small caps leading the gains on those better than expected econumbers out of the u. S. Here is how oil is trading. We are seeing oil gaining ground above 41 a barrel with brent coming in around 44 a barrel. This after the biggest loss in a week. Not only u. S. And china tensions but the outlook for the u. S. Stimulus. They saw the biggest advance since early july. See some are going to of those uncertainties, the lack of a deadline when it comes to the stimulus talks any the u. S. And the ongoing u. S. And china tensions. Have japanese stocks on holiday from mountain daytoday. This is how we are shaping up when it comes to the asian futures session. Sydney futures as we kick off earnings season in earnest, 7 10 of 1 , which could mean a kick of 1 . We are seeing new zealand up by two tens of 1 . It is worth pointing out we have 100 days new zealand has gone without a single case of Community Transmission of covid19. Health and Human Services is expectedex azar to meet with the taiwan president on monday. He is the highestranking american official to visit the island in decades. Stephen engle joins us from hong kong. This is sure to rub some feathers at a time where we are seeing day by day, escalating tensions between washington and beijing. This definitely is not going to help mend the relations between china and the United States. Taiwan is a sensitive issue to beijing. The United States, they do have taiwan relations. This one is not on the military side. It is more on the health side. A highlevel level cabinet taipei, theing highestranking u. S. Official in decades, shirley to wrangle surely to wrangle beijing. The Foreign Ministry spokesman when they got word he was going to be heading to taiwan, beijing was firmly opposed to interactions between the u. S. And taiwan. The United States saying it is going to go there to talk about the International Response to the coronavirus, which taiwan has been lauded worldwide for its response. They are going to talk about supplies and medical equipment between the United States and taiwan and also get some of the secrets of taiwans success in containing the outbreak of covid19. Shery the u. S. Continues to put pressure on china. We know the sanctions, some chinese mainland and chinese officials. I have to wonder, does that even matter . It is not like they hold u. S. Assets. That is the big question, how much is this symbolic or how much will this hurt the pocketbooks of the 11 officials who have been sanctioned including mainland chinese officials associated in United States terminology to the imposition of the security law on hong kong. The chiefclude executive, carrie lam as well as the Police Commissioner and others. Konglam is the acting hong privacy commissioner. He has come out and said the sanctions and the revealed numbers andssport other officials including of carrie lam, amounted to doxy, xing, which docx carrie lam said would be a criminal offense. Another chapter that is turning into rapidly souring relations between United States and china and also the hong kong government. Haidi what are the latest things we are seeing in hong kong, the reaction of the government, some of the tensions and moves the think taken that you have these critics concerned that you are seeing this tightening of restrictions and tightening of freedoms after the National Security law was put through . That is right. We have seen some arrests and some charges. Wong was of joshua more recently charged with his participation in a Tiananmen Square memorial earlier in july. There have been some moves by the government here to enforce the National Security law but also come down on the movement, make sure there is not necessarily more separatist sentiment in hong kong. Shery our chief north asia correspondent with the latest. We will have more on the rising tensions between beijing and washington when we are joined by Scott Kennedy later today. Still ahead, lots from markets to digest over the weekend. To Bokeh Capital Partners kim forrest. This is bloomberg. Haidi you are watching daybreak australia. The number of covid19 infections worldwide is nearing 20 million with the u. S. Remaining the focus with more than a quarter of those cases. The u. S. Added a million new cases in just over two weeks even as infections and deaths slow in florida and arizona. Bill gates is criticizing the u. S. Response. Sayshicago fed president it is important the u. S. Government delivers stimulus to help the economy through the coronavirus. Charles admin says fiscal policy is vital. President trump has taken executive exit on relief as executive stocks executive talks stall. Japanese Prime Minister says the government must avoid another virus state of emergency to soften the economic blow of the pandemic. Economists expect gdp to have declined more than 20 in the Second Quarter. Has allocated over 20 billion in aid so far. A new survey says less than a third of u. K. Population would accept a vaccination. Kings college says younger people are more likely to refuse a vaccine despite covid19 deaths topping 46,000. Researchers say large populations of the u. K. Are unclear. Shery President Trump is taking matters into his own hands as stimulus talks stall, signing four stopgap executive actions to extend lifelines to americans. The move is being criticized for being insufficient and possibly unconstitutional. Our reporter is in washington with more. How economically significant our president terms executive orders if it can significant are President Trump executive orders . It kind of speaks to what little the executive branch, what little President Trump can do to fund such programs because he does not have the power that belongs to congress. The talks in congress have stalled. Trump has taken things into his own hands. The four actions he took on saturday are probably probably the most difficult was the 400 in extended unemployment payments. It is 300 from the fed, asking the states to kick in and other hundred dollars a week. They are saying they cannot do it. A lot of questions about whether that will have a meaningful impact and how long it will continue for. In the case of the unemployment payments, maybe one to two months. Thepayroll tax deferral and private controversial move because it is only a deferral. At some point, people would have to pay them back. And justd be confusing a worry for people. Haidi are we now expecting fresh legal challenges . Seems if youinly talk to a constitutional law professor, they would say this does not standat by the separation of powers. Many u. S. President s have pushed the envelope on that. Obama did that. Trump has done it even further arguably. I do not know if you will get a legal challenge from the democratic party. Chuck schumer and nancy pelosi were cagey about that today. It may not be the best look for the democrats before the election. Steve mnuchin dared them to do it. He said it is not a good look to be seen when he to keep money out of the hands of Unemployed People to be seen wanting to keep money out of the hands of Unemployed People. It seems like they are going a bit slow on legally challenging trumps move. If anything, maybe they will be successful in getting both sides back to the table. Krasny in washington. You can get more on the relief measures and other stories you need to know in todays monday addition of daybreak monday edition of daybreak. You can customize those settings so you get the news on the industries and assets that matter to you. Coming up next, we talk about how President Trumps stimulus plan and the latest tensions with china will play in the markets. Rest is with us with her view. This is bloomberg. Shery stocks ended last week down with tech shares bearing most of the selling. Joining us heading into the week is Bokeh Capital Partners founder kim forrest. We have seen tech stocks on a tear during the pandemic. These tensions between china and the u. S. , what did they mean for investors . Kim i think it is going to mean there is going to be volatility, which i personally embrace. Secondly, i think that you really have to think long and hard about what your timeline is and what your narrative is for the stocks you are picking. If you think these two things can come to fruition and the stocks you are picking are going to be higher in a couple of years or not. Haidi when you say great volatility, that means you are adding to positions you are confident right now . Kim exactly. I always see a market downturn as an opportunity. At a minimum, it is an opportunity to see what happens when your stocks hit a bad patch of news and how low they go and who is holding them. That is part of our secret sauce is that we really like to watch how individual stocks as well as markets react to turbulent times. But more than that, it gives you an opportunity if you are very confident, about the likelihood of success for the companies you like to buy more. Haidi is the situation now that everyone agrees with seeing bubblelike conditions for tech stocks but you still want to be investors because there is Growth Potential . Kim that is just it. We do not know what is going to happen tomorrow. We have a good idea today and tomorrow going to look a little like, but you get things like covid. We had no idea we were going to be living like we are living. Good things can happen all the time too. You must stay invested and should not hide in cash unless you need that cash to buy something. Everything we are talking about if you are investing is for the future. Company you really like and for whatever reason, the news is trading down, bbuy it. Looking at the stocks that have done well recently, it is because of how they have performed recently. That is a note of caution to investors. Haidi you take fridays payroll numbers, which was the bullish part of the rally. If you were in the next few days or weeks to get actual agreement on both sides with regards to the next fiscal stimulus package, would that be convincing enough for you to look at the consumer facing stocks . Kim probably not because we have this thing that is looming out there in Something Like less than 90 days, and election. Things can change materially. You really have to hold onto that. That being said, it always is determined by price and how long or how well positioned whatever it is you are going to buy. I always have an asterisk saying maybe. If you are doing a shorter term, the consumer is going to be ok for the next three months, that is too short of a timeline. It is good people are going to be taking care of or the unemployed are given a little bit of relief here, but as far as investing, it is dangerous waters. Shery how positive are President Trumps executive actions when there could be negativity including uncertainty over litigation, not to mention it could stall negotiations in congress . Kim i think both parties are going to come out looking terrible if we are fighting over the people and benefits that are going to keep them with a roof over their head and food on the table. War,ikelihood of allout which i would consider lawsuit flying is pretty slim. Has think President Trump the upper hand right now because morally, he looks a little stronger here. Simply with respect to protecting the unemployed or making sure they are going to get the extra statement that has been coming their way or a lot of it. Parties are both going to have to tread carefully. They are going to have to move on and try to come to some kind of agreement. I think that is ideally what happens, that this legislation never gets enacted, but congress has to sit down and get a real deal done. Shery always up haidi always appreciate your time and your views. Cocio shed his views earlier. Andpoke about investing commented on the u. S. Jobs report. While everybody focuses on the change in payroll and people tend to focus on the growth rate, the big issue is the depressed level of spending and isome in the economy, which reflected at around 10 . The longer we are in that situation of a depressed level of income and spending, the more vulnerable individuals and companies are to that set of circumstances and the most likely timeframe for that virus impact is 18 to 24 months. It is very uncertain. We have just had a four month Fiscal Program or one quarter. Imagine having to do that a Second Quarter, third, fourth, eight. Imagine having to do that for eight quarters in a row to make up for the low level of income and spending in the economy. Imagine the potential on the dollar, inflation and other assets. As that lingers on, i think you have a combination of economic destruction with liquidity expansion. The added vulnerability is zero rates. World where they cannot get away from zero rates means for the economy and how we need to rethink portfolios. Can you speak to that . Bob it is a mind blowing thing that when you have a zero Interest Rate on a treasury bond, that means there is no Interest Rate. If there is no Interest Rate, there is no discount rate on cash flows. What is the value of cash flows if they have no discount rate except for the risk premium . From the bond perspective, you have virtually a zero return and you have an asymmetric return because there is no limit to how much the bond yield can go up. Even if it goes to flat zero, you are only going to make five or 7 over the next seven years. 30 with alose 20 to rise in inflation. You have that asymmetry and you are not getting paid any return. What i think people are not registering it had is how that impacts the equity market. There were three big impacts on the equity market. Taken away the floor on equity decline because typically if you get an equity and economic decline, earnings or falling. If bond yields fall, it lowers the discount. If you cannot lower the discount rate, on those earnings, the downside is bigger. If you cannot cut Interest Rates , then you cannot put a floor under the economy except through monetization and fiscal policy, which threatens the currency. The third impact is that if equities are following, normally you get the bond rally to diversify that risk away. That does not exist now. You are holding the equity side downsideh not much protection and you are holding the bond side with an asymmetric return pattern and a zero yield. It is a problematic scenario for any traditional investment strategy. Shery Bridgewater Associates cocio bob prince. Putting is reportedly pressure on the Trump Administration to let it cell components to huawei. The wall street journal says qualcomm is lobbying to be allowed to sell 5g chips to huawei because foreign markets have access to a market worth eight dollars a year. Is set to have preliminary talks about a deal with tiktok, although the outcome is unclear. Favorite. Is the the white house has given the chinese owned app to find a buyer. The administration has also barred American Companies from dealing with its parent, bytedance. Industry regulators in new delhi say the airplane that crashed touchdown too far from the airstrip. It may have resulted from the pilots bad judgment. Over more than a hundred were injured in 18 died and 18 died. Biggestp, the worlds oil exporter is pressing ahead with plans to pay 75 billion in dividends despite sliding profits and a surge in debt. We will have more on oil and saudi aramcos earnings, next. This is bloomberg. Hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. He scores stanley cup champions touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. We are starting trading of course in new zealand, where the country is going through one of the toughest lockdowns in the western world. It is now marked 100 days without a single case of locally transmitted covid19. We are seeing stocks trading up by about. 3 , going on a week where we do get the policy decision. We are seeing fewer members of the shadow board seeing further monetary stimulus as being appropriate, according to a recent report. As we continue to see the highlights when it comes to the uncertainty over the longerterm ones once the existing stimulus measures fade out. We have the new zealand Prime Minister launching her Reelection Campaign this weekend as well. Lets look at how we are setting up for the rest of asia. Witholiday spin session japan and singapore on the sidelines. The start of the week gives us trade and policy and focus. We see s p futures, little change early in the asia session. Some downside pressure. Slightly ahead for the asx 200. Hang seng futures have edged lower following the u. S. Imposing sanctions on 11 chinese and hong kong officials soon after the move to ban wechat, which saw tencent lose 35 billion in value friday. A buying opportunit