Bill gates says the nations testing has mind blowing problems. A mediag Police Arrest tycoon and prodemocracy activist reportedly on allegations of foreign collusion. Nexts in his Media Group Digital slumped. Gone 6 00has just a. M. In london. Good to see you this morning. Names a ceo and president from november. He had previously served as the chief operating officer. He will take over on november 2 he did his first interview, fiveandahalf years, go to your bloomberg 6 returnelivered relative to peers of 6. 4 so a change at the stop on equinor. We will keep an eye on any more detail on that. Rump, turkey, tiktok i am on tiktok. I have sent something out on. Tiktok trump, turkey, tiktok, and trade. Im determined to boost my tiktok numbers. Nejra good morning. Ill add tech because tech lead a decline last week on friday with the confrontation with china being ramped up with the white house. I cant wait to see your tiktok account. Manus it is awful, dreadful. I havent worked it out yet. I need to outsource tiktok. Anyone who wants to bid for the outsourcing of tiktok, please go right ahead but you are right. Tech is a key thing and when we look at the tech dimension, how important is tiktok . I. T. Services were the fastestgrowing part of the chinese economy last year, 19 . Tiktok that is why that is why tiktok and wechat matter. Nejra lets get to the market and japans closed for a holiday today. The msci asiapacifics unchanged. Underperformance in hong kong. Out a small gain for the s p 500. Caps outperform friday following the jobs data. Futures slightly positive, european futures in the green. For theks of decline dollar and we are holding onto to that weakness fairly steady on the bloomberg dollar index. Gold pulls back a little bit. Streakps a today losing with saudi aramco predicting improvement for the rest of the year. Manus there is little supporting that sovereign. Certainly not the rhetoric of a strong dollar policy. The president signs four executive orders related to the Coronavirus Relief. Extendednu, unemployment benefits, temporary payroll tax deferral, eviction protection, and student loan relief. The plan provides 400 a week in extra jobless benefits, down from 600 but it does require states to cover 100 of the cost. As for the stimulus negotiations, democrats and republicans are trillions of dollars apart on overall spending. The two parties are still disagreeing on aid, state and local government, and the added jobless benefit. Steven mnuchin said he would listen to any proposal offered by democrats but did not give a first date for talks to restart. Any time they have a new proposal, im willing to listen but let me say, you are right. We agreed with the democrats, saying lets pass legislation on the things we agree about and knocked these off one at a time and theyve refused until they get their trillion dollars for the states. Nejra joining us for the hour, the funds manager of investco Asset Management. Thank you for joining. I would like to get your thoughts on small caps versus large caps in the u. S. Given the outperformance on friday for the russell 2000 as we inch toward the stimulus from the u. S. And reflect on the jobs report. Smalluld you be trading caps versus large caps in the u. S. . Good morning, nice to see you. It is difficult because i think any suggestion that theres Domestic Support in the u. S. , any kind of cyclical recovery underway, it is economies have done around the world to keep that helpful smallcap companies. The difficult this time around is small caps in the u. S. Are more expensive going into this crisis and they remain expensive and i think a lot of the stimulus measures which have been put in place have been helpful domestically but i think as we go and the longevity of this process continues, i think it gets much more difficult for these already expensive to perform well. We would caution against it. Well see why they did friday, but as a longterm investment opportunity, we would be quite cautious and probably look elsewhere rather than small cap segment of the market. Manus apple, i think there is a fantastic chart. Apple is no more valuable than the entire russell 2000, so we can delve into that theme in a moment. I like your notes, they are very short. I love that. I am an Income Investor. Stimulus round to as an Income Investor, is it bigger per stocks or is it more procredit allocation . We need to see the details on the stimulus . As an Income Investor come around to, are we skewed to a more top off than a credit top off . Georgina i am skewed toward a credit allocation. More domestically in the market, but given the policy support in a number of countries directly supportive of ongoing buying of credit, i think we would definitely focus there as we remain more neutral, more cautious on equities and the reason for that is Interest Rates are likely to stay lower for longer. Fixedsupport for the income market from that perspective, but the Growth Outlook is uncertain and that is critical for equities and given the valuations and where they are, we would see credit over the equity market. Nejra what about your ideas on the dollar, georgina . I know youve been buying the dollar against certain em currencies. Are you looking to shift that stands given the weakness we have seen over the past five weeks . Georgina weve been prodollar for a long time. That view did start to change last year and coming into this year and i think a number of the supports for the dollar suddenly got eroded in the sense that the Interest Rate advantage of the world, thisd the political uncertainty, policy uncertainty, all of these factors that have impacted elsewhere are impacting the dollar now. For us, we cant rely on the dollar to be your defensive asset of choice, to bail you out if there is another setback in growth iskets, but certain in emerging markets where we see a number of risks, we are happy to hold the dollar but we dont want to haul it versus the euro and catch the drivers of the currency pair have shifted a lot versus the last few years. Manus we will touch on that. You prefer again. Prefer yen. Gold is a positive correlation to stocks, i get the sense from you you say is that yen, might lean into that as your defensive protection versus gold . Is that a correct interpretation . Georgina we definitely prefer the yen versus the u. S. Dollar in the currency sphere. More of a valuation perspective. We think there is value in the yen, but if things turn down again, we think assets will go back home. Gold is complicated. I think gold definitely has some support from a store of wealth perspective. Ple are several nervous still nervous, the real yield argument is supportive of gold. The issue is there is a demand factor for gold, as well and if this crisis continues, you could see demand start the ball. Fall. The outlook for gold is less certain. It gives away the run it has had. I would prefer yen over gold allocation and dollar from an incentive perspective. Inspect thell shocks from the real yield spiking on friday. Guest hostylor, our this morning from Invesco Asset management. Lets get your first word news with laura wright in the london hq. Laura billionaire bill gates says it is mind blowing the u. S. Government has not improved coronavirus testing. He described the process as slow and lacking fair access. Speaking on cnn, he cited long lines at commercial labs. He says wealthy people have quick access but others have to wait. Because no other country has such insanity. A is the most senior visit by u. S. Official in four decades, health and Human Services secretary alex azar is in taiwan, a move likely to fuel tensions with china. Island democracy and praise the governments response to the pandemic. Beijing last week said it would firmly opposed the trip. After last weeks deadly blast, World Leaders are pledging almost 300 million to help after a Virtual Conference cohosted by Emmanuel Macron and the united nations. It comes amid protests in lebanon. Demonstrators are calling for the resignation of the government over its role. Violence in belarus after a contentious election result. Policing riot gear dispense thousands who challenged the ballot. Victoryident claimed but the challenger is challenging the results. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Nejra laura wright, thank you so much. Prominent Democracy Advocate arrested in hong kong under its controversial security law. We bring you the details next. This is bloomberg. Nejra this is bloomberg daybreak europe. Im nejra cehic in london with manus cranny in dubai. Manus Hong Kong Police have arrested media tycoon and democracy activist, rating the office of his flagship newspaper, the latest action under the new security law passed in late june. Our chief north asia correspondent joins us now. Good to have you with us. What do we know . What are the details . Stephen this is the most prominent figure and most proDemocracy Advocate to be arrested under the new law. Police in hong kong are saying between e aged 39 between 39 and 72 have been arrested on allegations of breaches of the law. Police did not name him by name, but we have gotten confirmation from officials at his next Digital Media company, mark simon, who sent in the milk confirming jimmy was arrested. We saw the video of him being led out of his house in hong a socialell as on media live feed of police, inering jimmy lai handcuffs in what is being described as a police raid for evidence. It is a significant move just a little more than a month after the implementation of the controversial Nelson Ayotte security Law National Security law. Weve had other activists like joshua wong condemning the arrests. He says i strongly condemn the latest arrest of jimmy lai. Nejra if we bring everything together under a theme of u. S. China tensions, adding more trouble for the u. S. China relationship, a visit to taiwan by health and Human Services secretary. What can you tell us about that . Stephen when beijing got word of this late last week, the Foreign Ministry spokesperson said beijing was firmly opposed to official interactions between taiwan andd this isnt including the meeting of the president of taiwan with alex azar come a definitely going to wrangle beijing even more. It is the highestranking u. S. Official to visit taiwan in decades and will certainly worsen the strained u. S. China ties and he is there supposedly to discuss the coronavirus and limiting ofcessful the pandemic. However, it is widely believed other issues, more sensitive issues, would be discussed, as well . Manus our chiefmanus north asia correspondent on the developing story of the rest in hong kong. Thank you very much. China consumer inflation accelerated and factory price deflation eased in july as the nations economy continues to recover from the coronavirus crisis. Inde prices posted higher the month, partly due to damage and transportation disruptions caused by the floods in central and southern china. Georgina taylor from twos, tens Asset Management from Invesco Asset management is with us. The escalation in china relations around the world. As an asset manager, when do you become actually genuinely concerned this could affect the flow of money and investment for you . Think it is a real concern already in the sense that we have enjoyed for the many, many years this globalization team, fame, china being at the epicenter of the world opening up and all assets on the back of that. The broader theme that comes out of these u. S. China tensions is the breakdown in the globalization factor, if you like, and we all need to think more carefully about how we value assets. If you get some decoupling between countries, between regions. Number is an interesting part of that. The opening up of supply chains, a choking off of that. For whatever reason and for obvious reasons in terms of u. S. China debate, means we have to think about margins differently, costs differently. All of these Different Things we have gotten used to not being a problem, if you like, for equity markets and broader Asset Classes around the world. What is yourna, rationale behind the idea in your portfolio of stronger dollar, weaker yuan . Georgina i think for us, currencies need to sometimes be thousand in economic tension or political tension, arising. For us, we think theyuan might see the bit of the equation that perhaps has to give. For us, allowing the currency not necessarily a dramatic the evaluation quickly, but along the currency in the background to slowly devalue, so it cant be accused of anything in the currency. That for us is a genuine game that needs to be theme that needs to be part of the economic solution longterm that they allow their currency to move a little bit. That maintains their competitiveness but shows they do not maintain full control over the currency and that to some degree is positive for investors. It allows Market Forces to drive the level of the currency. Can i just pursue one theme . An hour and ashow half ago saying where is the voice of strong dollar policy . We havent heard it for a long time and this is an incredibly important narrative when it comes to assessing the state of play in currency and u. S. Equities. Is the era of strong dollar policy now an irrelevance . Georgina i think it is becoming less relevant because it is how much it can really work. I think the strong dollar policy worked when there were other factors at play as well, which it was obvious why investors would want to support a stronger dollar longerterm. From and a coats perspective, it is less relevant equities perspective, it is less relevant anyway because they are less dependent on weaker currency, stronger currency. They are less sensitive to euro, where it is a driver. It is less relevant because dollar aren for the starting to play out and they cant ignore their deficit issues, the need and political risks arising. Risks finally, maybe real demand. Georgina taylor from invesco stays with us. The u. K. , how badly is the economy going to be hit in the coronavirus lockdown . We look ahead to this weeks gdp data and the big trade on sterling. This is bloomberg. Nejra this is bloomberg daybreak europe. Im nejra cehic in london with manus cranny in dubai. In the Second Quarter come u. K. Gdp plunged to levels not seen since 2003. The median forecast is for a 20 fall come a sharper slump than european peers and the recovery is made harder by local spikes in cases. That gdp number is due on wednesday at 7 00 a. M. U. K. Time. Georgina taylor from Invesco Asset management is with us. An idea that is fairly esoteric. The norwegian krone versus the pound. Georgina i think the pound has been something we put on the sidelines for a period of time but with the risks around growth , i think the drivers of growth are so uncertain, lockdowns where construction has been turned back on, we might get better data but the Services Structure sector will be under pressure. Maybe it isu. K. , the currency which has to provide that release fouled to the economy release valve for the economy. We think from here, the pound would weaken. Asxit talk comes back in much as we talk about coronavirus risk and the norwegian side, you have to be careful what you perish with. Is actually buying the norwegian krone domestically so are individual drivers of norway that we quite like but we think a weaker sterling will be a big part of it. It is amazing how we spend 26 minutes together and keep going back to the fx narrative for the equity allocation. I just wonder, differentials, trading the pears, trading the spreads. How do you look at the u. K. With relative political and covid and Interest Rate risk relative to negative rates with the stimulus plan, i. E. Europe . The drivers of the euro feel to me they have changed this huge amount. It was simple in some ways, simple to say it is a weaker euro environment until this year. The flow dynamic around the world in terms of assets, some of that money has come back potentially to europe and that has supported the euro and i think for currencies, we have to be careful about when it is about Interest Rates and growth momentum. In europe, there is a narrative of growth momentum. Got to hop on for a moment. Georgina taylor from Invesco Asset management stays with us. This is bloomberg. Manus good morning from bloombergs middle east headquarters in dubai. Im maness cranny. Nejra cehic is in london. Your top stories this morning, a mixed day for equities amid uncertainty on u. S. Stimulus. Governor andrew cuomo pushes back on President Trumps executive action of unemployment aid. Calling the plan laughable. Australia has had its deadliest day in the coronavirus pandemic as infections in the United States top 5 million. Bill gates says the nations testing has mind blowing problems. Hong kong Police Arrest a media tycoon and prodemocracy activist jimmy lai, reportedly on allegations of foreign collusion. Shares in his media group next digital slumped. Nejra welcome to bloomberg daybreak europe. Another a week after week of gains for Global Equities and u. S. Equities. And i sit here wondering what is going to drive the trade this week . It feels to me like the u. S. Real yield collapsing equities trade is firmly in place. Manus nobody bothered to notice real yields spiked the most in a month on friday. The question i think is, we spent 30 minutes with georgina, and weve come back to currency, currency, currency. Dislocation in market currencie