Gdp readings are expected to show an 18 rebound from the covid19 fallout. 15 asiapacific nations formally launched the biggest freetrade deal. The accord covers 2 billion people and is a decade in the making. Howi lets take a look at it is feeding through. Havent seen much of a reaction when it comes to the kiwi aussie dollar. We are seeing bond markets the little bit cautious. We are seeing 3 10 of 1 when it comes to trading in sydney. Thirdquarter gdp numbers showing a sharp rebound in japan. We are seeing nikkei futures trading mildly optimistically. That is the picture when it comes to u. S. Futures. Back to thiss get incredible trade deal. After eight years of difficult negotiations, the largest ever freetrade deal has finally been signed. The regional, comprehensive, Economic Partnership includes 15 countries with china, japan, on. Ralia and all of aussie how important is the timing of this considering the damage caused by covid19 . This will be, as trade ministers will say, a big shot in the arm. It has been a long time in the making and it is a diplomatic coup for china. This is a regional grouping of 15 countries. Combined gdpn of covering 2. 2 billion people. Houses ofhe our china, japan, south korea with as well asasian australia and new zealand. It does not include india. They were concerned about a flood of cheap chinese goods that would decimate smaller manufacturers in india and would hurt their bread and butter services industry. India still a possibility to enter, but not at this point. This is a chinaled initiative at a time when the Trump Administration prefers more Bilateral Agreements rather than multilateral. They pulled out of the transpacific partnership. Questions remain, where will india play and where will the United States play in . Tos will reduce tarrifs up 92 on traded goods. Supply chains with common rules of origin. Ecommerce rules and it simple procedures. Fies sectors will be fully open with increase in foreign shareholder limits. Tension between china and australia and other places around the south china sea. We will see if this moves over some of those trade differences between china and its trading partners. Beijingss is seen as baby. Notably absent is the u. S. President trump got out of the tpp as well. What is next for biden and washington . It depends who will be in the white house and that is president elect biden. He had showed a willingness to enter the latest recreation of the transpacific partnership, the rctpp, which is being led by to see somee wants improvements before committing to go full steam. Asiapacifiche chief Economist Says that china is the one who has pulled off this diplomatic coup in dragging over the line. He says that it is shallow compared to tpp. Broad, covering many economies and goods. What we will be looking for in the Biden Administration is, will they carry on with the protectionist policies of donald trump . Some say very unlikely. More bridge building with the likes of china. Not necessarily committing full force for tpp. Lets get you to Karina Mitchell with the first word headlines. Karina reported virus cases in the u. S. Have topped 11 million. New jersey recording a Record Number for the second straight day. The u. K. Prime minister Boris Johnson needs to selfisolate after being exposed to someone with covid19. Downing street says he is well and does not have symptoms. Forces in berlin seven germany will face considerable social restrictions well into next year. President trump is refusing to concede the election but refuses to admit that joe biden may have won. Saying a wave of tweet he won because the election was rigged. The post was flagged by twitter for containing disputed claims of election fraud. The president tweeted he is conceding nothing and that there is a long way to go in the race. China has issued a pollution alert telling northern regions to reduce emissions as air quality worsens with the approach of winter. Is beijing and her bay area expected to see heavy air pollution this week due to the poor weather conditions and higher heating emissions as the economy recovers. Officials say that emissions from iron, steel, and cole have exceeded levels of recent years. , 24 hours a day, on the air on bloomberg and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Kathleen still ahead, we are expect and quite a rebound when japan releases gdp figures. Will joino wanton abe us to discuss the challenges ahead. And the controversial ceo says the market will keep heading higher. She will give us her tips next. Haidi Global Equities expected to continue higher. Stocks expected to pick up from gains last week. The u. S. Futures pointing higher. The rally will continue to build. All of this coming as coronavirus cases rise in the u. S. And around the world. Joining to discuss this brave new world is carol pepper. Lets start with the Vaccine Developments which are still driving the good news sector of the market. We can see what this sort of macro surprise can do when it comes to trade. Our last guest, william haseltine, very dubious we will get a consistent rollout of the vaccine before the end of 22 anyone, our markets for the the markets are already pricing that in . It is hard to say how early they can roll out and i think it is early to speculate, but we do know that the end is in sight. That will continue to support the market. Itit is sixmonth longer, might damage how quickly we rise. This time next year, we will have more to be thankful for. We will have a vaccine in the world and we will have a way to get hold of this pandemic. Is this a theme that is here to stay . We saw this play out in a dramatic fashion. Outperforming growth stocks. That was really dramatic in asia last week where the gap was at its most since 2000. Is that something that makes more sense in asia, given that we are seeing more of an individualistic recovery in north asian economies from covid . In the end, growth is going to win. I think this is a shortterm rotation. For the next two years, we are going to be mostly stuck at home or indoors. Tech will continue to rise, which drives the wave of growth. Tech will continue to be the winner. We get the whether vaccine six months from now or a year from now, we will be stuck at home for a while. End. H will win in tthhe kathleen in terms of the things that you like, you are very positive. It must be that kind of night, because our first guest was very bullish. You like asia tech, why . We heard a great discussion around this new trade agreement. You are seeing the coalescing of a market that will be easier to develop new products and services, regionally and globally. It will make it easier to take the innovations in asia and roll them out to the rest of the world. Think about with the sim corps government. They have consolidated holding come of these together and now they have 75 billion going out to tech development. That is a lot of money to pour into a sector. There are some any big mega trends that favor asia and tech, even with what happened in thatsia over the time alibaba started the company that allows you to order groceries from home. Lazata. At that was a Huge Consumer behavior shift in a matter of months. I think we will see more of that. When you get used to a new habit, youre less likely to go back to a less convenient habit. This is the direction the world is going. Kathleen one habit people have not broken away from much, like amazon, i want to show you a chart. The valuations for apple and amazon have soared high this year. They have both come back down. Some say that they may be good for the next 10 years, but do they have a lot of upside . I have managed money for people who have over 100 million all over the world. If youre going to be buying stocks, you should not be daytrading them, but looking for longterm play. Years, yourn in 10 will be bad that you bought amazon and apple and have it tucked away. Daytrading. Into i look for the fundamental propositions that will last a long time, tends trends that we can get into. Are going to have a more dip down down between now and march . Absolutely. We will have more virus spikes had more fear. That will happen and those are opportunities to get into the position that you want to hold for the next 10 years. Haidi the longerterm portfolios, surely you need to be buying some of these. Ships,ney, the cruise the airlines. Certainly the travel and leisure we dontat eventually, know if it is in two years or five years, will see a recovery. Absolutely. I recently had to take a flight for business. I went down to florida on united and came back on delta. From that experience i would definitely recommend delta over united. Why . They cared enough about their passengers to have every other seat empty. Where is the plane was packed like sardines for united. United seems to be thinking shortterm. Delta seems to be thinking the longerterm strategy. Same in coach, there was a lot more space on delta than united. Look for the companies that are smart and responding well. Those are the social good signals that a company can give out. I agree with you, cruising will come back, flying will come back. You can pick up the stocks had a good price. At a good price. Witheen you think that joe biden in office, the stimulus is coming. Some people say that is optimistic, especially if the senate is held by republicans. There has been no softening on either side of what they want. What if it doesnt come . What if it takes months . 10 years from now it may not make a difference, but watching the market now, it may. If it takes a lot longer, there will be a lot more stress on consumers. There is a lot of food insecurity. There are a lot of people hurting. I really hope that everybody will get together and pass the stimulus that we need. If it doesnt come, then the market will look more sour. Trying to time to be day trade the market. You cannot guess fundamentals at this time. It is politics and policy. Those are not things you can invest in. You can only gamble. If you want to day trade in gambles on what day we are getting the vaccine or stimulus, thats on you, but thats not investing. Investing is looking for longterm trends and seeing where you should position yourself to do well. If you are away from a screen you can always find indepth analysis on the days biggest newsmakers. Broadcasting live from our studio in hong kong. Listen via the app, radio plus, or bloombergradio. Com. Haidi we are continuing to watch these beautiful photos. A live shot of spacex. The launch coming up in an hour or so. They had to delay the launch of what would be the first regular. Ommercial crew flight it was meant to happen on saturday night. We are expecting it to go ahead on time in over an hour. Carrying four astronauts to the International Space station. It is a milestone that offers a peek into what the future can hold. Launchinganies businesses, tours, and services in lowearth orbit. That launch happening in just over an hour. It looks like all things are on track for that spacex launch. More to come on daybreak asia. This is bloomberg. Kathleen chinas economy is expected to show continued recovery. And to pick up an october. The markets coanchor Tom Mackenzie joins us on the line from beijing. It seems like there is a lot riding on this data. So many investors are depending on its recovery to pick up a little steam. Will the recovery be sustained . That is what investors and economists will be hoping the data later today will shout. One of the key data points is retail sales. Just to give us an idea of how strong the consumption rebound is. There is an expectation. An expectation that you will see a decent number, partly down to a boost in holiday spending. The flipside of that holiday boost is a potential slowdown in Industrial Production. Many families closed up shop for at least part of that week. Still, youre looking at a number of 6. 7 year on year. They slightly slower pace than we saw in september. How Bloomberg Economics team shows it is looking pretty strong and that demand from china is holding up despite the pandemic. They think that Industrial Production will remain on sure footing. Youre looking at ask looking at expansion which record into the estimates would be double what we saw in september. That data with the jobless rate in beijing around at 10 00 a. M. Local time. Hearing reports that the Trump Administration is preparing for a lastditch crackdown action on china. What do we know . Surprise given that mike pompeo said we have not taken our eye off the ball when it comes to china, but this is reporting from Senior Administration officials saying that the Trump Administration will be looking to ramp up actions in these last 10 weeks. Partly to cement his legacy on china and importantly to make it politically difficult for biden and his administration to change course in any fundamental a fundamental way when he changes office. Citing these officials. You are looking at sanctions and restrictions on trade with Chinese Companies, Government Entities and hitting out government officials as well. It has comenoted, down and come after the administration blocked u. S. Investment in 30 when Chinese Companies for the u. S. Linked to the chinese ministry. That may spanw that list. About the impact of the resurgence to virus cases around the world and whether he sees a doubledip recession ahead. We believe that the second wave that we are seeing today, whether it is a second wave, or part of the first wave has an increasing number of cases, increasing number of hospitalizations, increasing number of deaths. It is probably going to go into the Fourth Quarter. It will weaken the Fourth Quarter and it will weaken the into 2021. H we come we will come out on the first of december with our economic outlook. Weaker on that may be the 2021 outlook. What is the most important attribute that your successor needs to have . He will have to be a very good listener and a very good leader. Leadership, but its always consistent of listening to everybody once you get it right. When you know what you have to do, you go forward. Remember, the International Organization will only go as far as the members want to go. Inspired but to document why it is that you want to do certain policies. Evidencebased to convince them. Oedceen that was the general secretary. Heavily indented chinese developer everett round is seeing a sea drop in nonbank financing over the last few weeks adding to its challenges as it dodges a crunch. The funding pipeline has dried up according to data providers. Raising is considering 5 billion via ipo next year. Have vantaget will towers in frankfurt. Saybidens virus advisors that a National Lockdown is not on the agenda, even as cases surge across the u. S. More on the virus plan next. This is bloomberg. Karina this is daybreak asia. China, japan and australia helped find the worlds longest freetrade deal, encompassing one third of the global population. 15 nations formally agreed to Economic Partnership but the Virtual Summit hosted by vietnam. People and billion 26 trillion of global gdp. Brexit talks may be extended as the sides face Something Like a deadline. Negotiations had back to brussels with the johnson government sing it will not be changing its status. Simon coveney is reported to have done a deal is difficult but doable. An australian newspaper is reporting that legislation forcing tech giants to pay for news will become law within four weeks but incumbents from the treasurer who previously said he hoped the code would come back in but fierce lobbying in recent weeks has pushed the government to consider weakening some of those rules. Global news, 24 hours a day, on the air on bloomberg and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Haidi lets look at how we are shaping up at the start of this trading week. S p 500ntinue to see future starting the week pushing through the 3600 line. Saying they would not favor a nationwide lockdown. Closer to home we are seeing and 1. 25 . An upside of we continue to wait to hear from the rba. In the meantime, we are getting some optimism after the signing of the trade agreement over the weekend, including the likes of china, japan, south korea, new zealand and australia. We are looking to get an optimistic up in trading. We get closer to getting that Third Quarter gdp number expecting to show a sharp recovery from the previous period. U. S. Health has passed 11 million coronavirus cases. Joe bidens advisors say that a National Lockdown is not on the agenda. Ian, we are seeing outbreaks continue unabated. Where are we seeing the hotspots . What policy measures are in the pipeline . The hotspots are everywhere at this point. You see it. The northeast, looped to the southwest and to the midwest. Now we are seeing it all over the nation. We have gone quickly from 50,000 cases per day to 100,000, to 200,000. Weve nearly hit 200,000. Of 11 the total million hit in only six days. s coronavirusn advisors are ruling out a nationwide lockdown. How do they plan to do this at a time when virus cases are rising sharply . They havent really announced a plan. President trumps plan, to the extent that he had one, was to have the governors to all of the work. The governors had different ideas of what to do, ranging from someone like Governor Cuomo who has been strict, to places that essentially had nothing whatsoever. Even though they dont want to National Lockdown, the Biden Administrations top advisors say they want to use a scalpel rather than an axe. Presumably he will be working with governors and Health Officials to try to find Different Solutions to different areas. We are hearing more from Anthony Fauci about the public willingness to get inoculated. Of vaccines is seen as one of the hurdles. What is dr. Fauci saying . I think dr. Fauci is trying to instill confidence in the vaccine. One poll shows that 50 of americans would not take the vaccine. Partof it is a distrust, of it is just opposition to vaccines generally. Thing that could get life back to normal. They are trying to instill confidence saying it is 90 effective. Board by thele on time this thing rolls out early next year. Thank you for joining us here in new york. As coronavirus cases continue to rise the distressed investor revenue capital expecting the vaccine will drive revenue next year. The ceo spoke to bloomberg exclusively about the sectors focusing on the current state of the u. S. Economy. There are parts that are doing it well and parts that arent. The parts that arent are the leisure side. It would have been around 2 trillion to 3 trillion. I think for the u. S. Economy, everything is good. Pandemictalk about the in the markets. The vaccine rollout does not come in time to save some of these companies that are desperately holding on, or will we see a wave of bankruptcies . I think what you will see is a wave of lending. Is what wallr that street was worried about, nobody knew how long anything would take. If you thought about it, people could say you are optimistic if it was six months, if youre pessimistic it was three years. Now if youre optimistic it is threemonth sent pessimistic one year. Ultimately what that means is you will be more willing to lend money to companies because you know that things will be working out sooner. There is a cost to that. You will have some copies that you will be filing but the opportunity to do rescue lending and to lend money will grow exponentially. Early on you invested in Companies Like macys, frontier communications. What have been the changes to your position that you can tell us about . I think on frontier the bonds have gone from 30 to 45. They have gone up about 50 . We try to keep the same percentage, but because of the price of how high they have gone , we have to sell a bunch of them. We haveth macys continued our opposition. Majority of all of the positions that we have that would be another one, over the course of the last three months to six months, things have been working out. I know you are looking at amc entertainment, do you see them surviving and when do we see them with audiences . I think people will go back to movies. You are creating that company around a tier three multiple. In less you tell me that people will not go back to movies, they will. They may not have the same number but it will still be a good amount of people. I think that amc and the Theater Companies will survive. And airlines . Airlines are continuing to invest. Thatre a big believe people would fly back over the course of the next couple of years. You will see that come this summer as more people have got the vaccine. You had to sell off some of your positions because things got so expensive. The opportunity now . Is anything cheap . What is the pandemic discount . Things are still cheap. There is a lot of specialty lending. In the u. K. We are investing around the 15 . Anywhereing money between 10 to 15 . The reason you are doing that is because people need that capital. You will see an increase in specialty lending. You will still find special situations. That is this belief because things are working out on the vaccine is back to normal, it isnt. It is getting back to normal but you still have hundreds of billions of dollars on the leisure side, on the energy side. Haidi mark lasry speaking to vonnie quinn. Coming up, gdp from japan and a couple of minutes. And thediscuss those potential Biden Administration with the former japanese vice minister of finance, hiroshi watanabe. This is bloomberg. Governments have invested trillions of dollars. The blumberg economy takes a look at where that money has gone. For a full recovery, trillions more will need to be spent. In march the u. S. Senate passed state to trillion dollar stimulus bill. Published an ambitious slate of Energy Efficient infrastructure goals. It has also rolled back regulations. Green measures account for less than 1 of total coronavirus related stimulus spending. What are the implications for the future . Crisis,e 2008 economic emissions dropped 1. 4 in 2009 before rising 5. 1 the following year when the economy started to bounce back. The most Efficient Solutions for rebuilding the economy are those that also reduce Carbon Emissions. This oxford Economic Policy study published in may cited for major climate benefits such as Disaster Preparedness and zero carbon lesstudy asserted that in policymakers keep Carbon Emissions top of mind the world leaps from the covid frying pan. Nto the climate fire kathleen taking steps to rebuild the economy in a post covid world. Be watched online and twitter and facebook. We are counting down to the release of thirdquarter gdp out of japan. Expected growth bound back deepeback to 4 after a contraction in the Second Quarter. Watanabe, is hiroshi president of the institute for International Monetary affairs. Great to see you again. In terms of gdp, it is having a solid bounceback. It wont take the economy back to the levels that it once was. The government is talking about a third extra budget. Is it necessary and how big should it be . Good morning. I think when it comes to the budgets, the fiscal stimulus is needed. Since the summer, we have done a lot. The first quarte r of 2021, we need some more the input to the market. Kathleen in terms of the virus, japans numbers have hit records, but relative to other countries, they have been much less serious. Much more benign. As we see the virus cases offset tos that an anything that the new government. An do in terms of spending whatey are going to show kind of experts they are going to make in the coming weeks of the quarter. Less contaminated, but if you see our neighbors in the northeast, or asian, we have a lot lower contamination here. Some them, japan is having symptom of the resurgence of v covid19. We have some worries in the coming six months, especially the wintertime, with a virus. Haidi breaking news to our viewers. We are hearing that Pnc Financial services is in talks to by the u. S. Arm of the spanish lender bdba. That is according to a wall street journal report. If this goes ahead, it would become one of the largest bank tieups we have seen since the financial crisis. The dow jones reporting that pnc could join imminently. Lets get back to the conversation. Hiroshi watanabe still with us. Did you look at the trade deal signed over the weekend, the parsec rcep. Are you seeing in a Biden Administration more of a willingness for the u. S. To return to these multilateral deals and institutions and agreements . We are not sure who will be the next u. S. President but mr. Biden has expressed his views to coming back to the multilateral agreements. There is some anxiety for the who operations. The government to government coordination will be possible with biden. Readyk japan is very much to join the good coordination with other nations. Given how difficult it was for the bank of japan, for policymakers to get back to a nonregressive dynamic, when it comes to Price Inflation in japan, how much of a psychological dent does the pandemic create when it comes to this pursuit of trying to get that 2 target . Im not 100 supporting the boj policies. The 2 target is very much a in 2013. The 2 inflation is not expected to have the realization. 1 of then, around inflation will be kept in japan. The japanesead for economy. Big experience. Four decades. To 1 would not be so bad for japan. The boj should focus not to raise the inflation rate to 2 , but their efforts should be made on to how to avoid the 0 inflation. Haidi we are getting some encouraging signs from the Third Quarter gdp numbers. We are expecting a positive rating. Third quarter preliminary seasonally adjusted. 21. 4 growth. Spurts the biggest growth since 1968. That means the economy is halfway back to its prepandemic size. The seasonally adjusted headline number. Growth at 5 . Better than 5. 2 , expectations of 4. 6 . The inflation coming in at 1. 1 , higher than expectations. Private consumption slightly slightly weaker than estimates. 4. 7 growth. Business spending also contracting more than expected. Contraction of 3. 4 . Across all of those, we have seen improvement from the contractionary figures of the Second Quarter. Investors are worried about the lack of balance when it comes to the economic rebound and some of these highfrequency indicators. Economics seeing that that recovery would have slowed in the Fourth Quarter. The Prime Minister is putting together this extra budget. How crucial is it that this fiscal effort continues to make sure that this nascent recovery does not go away . In the case of japan and the United States, and the gdp figures, the rate of consumption is important. Covid19fter the contamination. The sentiment is damaged. They have to ekeep the peoples minds for normal consumption. Even for the supplementary budget, they should forecast on these issues. The Banking Sector or the Financial Sector is moving in a better way in comparison to 2008. At the time of the crisis. This time, the Financial Sector is not the origin of the difficulty. So far, they are making some good function. The government stimulus will give a lot of the push up. It will have some better position. Its smaller than the United States and the recovery in the Third Quarter is smaller than the United States. We have a smaller fluctuation in economic activity. Push upeeing a mind to to a situation like that. Kathleen are you concerned about the yen . It was getting quite stronger. It seems to have pulled back lately. Is that something that could be an issue for the economy and for the boj governor kuroda down the road . Have the srb and japan pumped in too much liquidity into the markets. The market itself is not so fragile to that. The yen gh and of the appreciation of the yen havi ng been observed. The Foreign Exchange rate is moving to smaller boxes. Now, they are higher. The economy has not changed. I think even the sharp rise of the yen would not be unexpected. There is much more appreciation to the yen, like two digits. In that case, the doj will think about that. Haidi that is her roshan watanabe. Iroshi that is high roh watanbe. The fx equity market is currently paused. No trading taking place. They are investor getting market data issues. They are working to rectify the issue. Trading has halted on the asx in australia do to market and data issues pending more information. This comes almost a month after the asx had technical difficulties with its new website. Its plagued by some of these traumas. Kathleen lets look at the quick business flash headlines. A month after picking up a computer to create one of europes biggest payment providers. Kkr have acquired a majority stake in this supermarket chain. They value the company at 1. 6 billion. Coming up, ages october data dump is due in a couple hours. We will dive deeply into that. This is bloomberg. Kathleen daybreak asia. From bloomberg world headquarters, and kathleen hays. Haidi im haidi stroudwatts in sydney. Asias major markets have opened trade. Our top stories, asian markets look to set to rise to the start of any week after the record close on friday. Investors file new u. S. Lockdown is looking less lock less likely. 15 asiapacific nation launched the worlds biggest freetrade deal the accord covers more than 2 billion people and has been a making. N the we are counting down to the latest spacex launch. The mission is the latest step toward the commercialization of space. We have thought launched from Cape Canaveral live this hour. Speaking of had rockets we had a jump in japans gdp that looked like a rocket. Lets see how it is affecting the nikkei. Up more than 1 . 263 points. The topics, up. 9 . Remember, this came after a pullback in stocks in japan. The nikkei had stopped an a day winning streak after hitting its highest level since 1991. This positive news on gdp, also of course u. S. Stocks rallying. Taking a look at next at the end. The yen weakening a bit. Not much of a change. It looks like the 10 year bond with the yield rising a little bit means the price has fallen. Just positioning. Looks like the change in stocks is what is most impressive. Going to move on to take a look at the kospi now. Because this is a market that has been doing pretty well lately. Now we can say the open is up about. 7 . We saw a big move in korean stocks last week. It boosted the stock market to a record market capitalization of 1. 5 trillion. There is a lot of optimism that with a new u. S. Administration in place, there may be more predictable policy from the u. S. Visavis korea. We can see that because deck index rising. And of course, we have the korean won actually getting a bit stronger as well. There has been a lot of demand for korean dollars as investors have plowed into korean stocks. Howi lets take a look at we see sydney trading. We are not trading at the moment. We had a statement saying Equities Trading is paused as they investigate technical difficulties, market data difficulties. Waiting for more news. We do have semistocks trading at the highest since february. Aussie dollar holding steady, higher additive a week heavy with china data expected to show the steady recovery continuing. We are also watching watching the bond market when it comes to Monetary Policy. Take a look at kiwi stocks surging ahead. Trading at a record high. Up by 1. 25 . We are getting more optimistic incrementally optimistic news vaccines. Mes to were hearing from Johnson Johnson that their vaccine trial is set to begin on monday volunteers. 00 Johnson Johnson unit is set to start phase 3 Covid Vaccine trials in the u. K. Across 17 sites. This is the third candidate to be tested in the u. K. Joining in after a zeneca. But as the one in partnership with the university of oxford novavax. Johnson johnson saying 30 million doses could be available in the u. K. By mid 2020 one if the vaccine is proven to be safe and effective. Joining us for more on the markets and vaccine optimism is the cio. We saw exactly what kind of impact this abrupt upside macro and pfizerhe biotech Vaccine Development news, that came out last week what i can do for markets. Is this sustainable given how little we know about efficacy, safety, about distribution, transport, the logistics of getting a global population vaccinated . Haidi i think it is sustainable haidi . I think it is sustainable. Cases in the northern hemisphere. I do see promising news going forward. Then we move into the authorization period. To have manufacturing foresee at risk populations. Getting vaccinated. The world is starting to move back to normal. Forwardet looking toward eventually reopening. Real yields probably bottoming out. Some stocks doing better. I think that is the month the momentum that will be caught that will be followed through. Haidi lets talk about this rotation into cyclicals and values stops stocks. Incredible performers we saw last week. Specifically, taking a look at just how much asian value stocks outperformed their growth peers last week. The gap is the most since 2000. Is this something that is an ongoing rotation trend . A lot of people are saying you should be buying the dip when it comes to growth, particularly tech growth because that is still a theme and companies will continue to have benefit over the next five to 10 years, even if we do see a pandemic recovery. The thing i the thing about growth. It certainly does have a nervousness now and then. See acceleration into cyclical recovery. It has enormous benefit and very weak growth and liquidity cropping things up. Continue to grow through the cycle. But the bond yields and accelerating liquidity probably are not there going forward. But we will see is economies opening up or activities coming back. Re are spending activities real rotations across the market. That said, a lot of disruption. A lot of support from governments. And scheduled banks will be hankering for the long end of yields. We have seen more of the andwinds in opportunity value rather than acceleration of what we saw last week. Rapid rise in bond yields and probably possible in this stage. Going back and looking at the cyclicals in companies that have been behind and have catching up to do. Kathleen i think it is interesting that you are saying you know to people have responded to the lockdowns. We are not traveling, not eating much. You think there is an opportunity to buy companies in travel entertainment where earnings have been impacted on the view that the worst is behind us and there will be a return to normalcy. Sean yeah. Definitely. Travel stocks, the flight center, casinos, those come to mind. The travel space. Some of the areas have been doing really well. Home wears an online Trading Retail has probably picked up. So you are rotating back toward these areas. Certainly out of construction orders out of an emergence of things like [inaudible] construction and other things in construction areas. The opportunities are there. That trajectory that we see over the next six to 12 months. Haidi as an investor, are you bracing in any way for a series of speeches from the reserve bank of australia . We have governor phil low speaking tonight. He will be followed by christopher kent, the assistant governor for Financial Markets on tuesday. Then Deputy Governor guide about will be talking about foreignexchange as well. Low speaks again. What is the message going to be . Is it going to be good for the markets or not . Sean probably good. They are taking it as insurance. Certainly 15 basis points. Talking about the Housing Market. Trying to put momentum back into housing and into the economy. They will be talking about the longterm angering, to talk down that and get that back into lending. Get assets moving up to reduce risk. We see that is receding already. Even areas of the economy that are stressed, that is basically what we are doing. The worst will continually be talking about low rates. Much. En thank you very you are the third bullish guest on stocks we have had today. It must be something about, well, we will see. We hope it is true. That was the cio sean fenton. Its good to Karina Mitchell with the first word headlines. Karina President Trump is refusing to concede the election but appears to have admitted joe may have won. He sent a wave of tweets on sunday saying he won because the election was rigged. The post was flagged by twitter for display for claiming election fraud. Later, the president tweeted he is conceding nothing and there is a long way to go in the white house race. The u. K. Is hinting brexit talks may be extended if the two sides deadlines. Mposed negotiations head back to brussels this week with the johnson government saying it will not be changing its stance, despite progress. Simon company has reported to have set a deal is difficult but doable. Some sources say this is the week to move or there will be no deal. Reported virus cases in the u. S. Have topped 11 million with new jersey recording and kurt a Record Number for the second straight day. U. K. Prime minister Boris Johnson is selfisolating after being exposed to someone with covid19. Downing street says he is well and does not have any symptoms. Sources in berlin says germany will face considerable social restrictions while well into next year. 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. Im Karina Mitchell. This is bloomberg. Haidi still ahead, chinas october data dump is due in a couple of hours. We are previewing the numbers with an economist. Asiapacific nations launching the worlds biggest freetrade deal. The accord covers more than 2 billion people. It has been a decade in the making. This is bloomberg. Kathleen after years of sometimes difficult negotiations, the largest ever freetrade deal has been finally signed. The regional comprehensive Economic Partnership includes 15 countries with china, japan, australia, and all of the on. Our senior asia economics reporter Michelle Jamrisko is on the line. Im particularly interested when i look at our set up at how much it is actually going to lower tariffs . Is a cumbrian sieve, is it bilateral . And what does it mean for the members . Michelle when we talked about the scope of it, certainly huge. You just trade deal ever. We have 20 chapters in it. You asked about tariff elimination. It will eliminate tariffs of 92 on traded goods among those member countries, as well as stronger provisions on nontariff measures. Here,is a lot in procedures, intellectual property rights. It tries to tackle ecommerce issues, changes in the supply then, and it tries to give small and Mediumsize Enterprises such a backbone of many of the economies in region. These are all big covid arrow topics. A lot of things that these economies have been talking about trying to ease the transition to the post covid economy. This comes at a great time for that. It also includes hardfought topics like rules of origin around how to identify where products were made as well as temporary movement of persons. Which is an issue that india was sensitive to. There is a clause in into to leave the door open for them to return. Six of the aussie on countries and three nonaussie on members must ratify it. That singapore has at least pledge they will get it approved in the next few months. We should see more action in getting tool full forte coming to full force soon. Haidi how significant is it at this time for the broader landscape . Particularly for a potential return to multilateralism . Michelle yeah, it is a huge statement. Especially as i mentioned, covid has prompted more countries to look inward in these topics are applying into those conversations about how to move into a post covid world. Gdp, it counts for 30 of 30 of the worlds population countries. Ember japan was among those talking about how this will put it on founder footing for that transition to a post covid economy. For a few years, we have been waiting on this signing. There was extra energy to get it done this year. We see a china let agreement. China, i should note, was not in the tcp p but the u. S. Isnt either. There is a lot of talk about what a time to make a statement, not just because of the covid conversation, but because he have a new administration coming in on the u. S. Side. The biting team has not been so enthusiastic about joining either treaty. We know the trump team has certainly talked down it. Wilbur ross called it a lowgrade treaty. This is really asias time to shine, to show they have moved things forward. Despite all that is happening in world, asia is moving ahead. They are setting the rules for nextgeneration issues around ecommerce and accounting for more complex value chains in asia. Certainly have a lot of tough work done to lay the groundwork for further global trade agreements in the future. Asia economics reporter Michelle Jamrisko they are taking a look at the milestone agreement. You can get more on other stories you need to know to get your day and week going in todays edition of daybreak. Bloomberg subscribers, go to dayb on your terminals. It is customizable, you get news on the industries and assets that matter to you. A reminder that the Bloomberg NewEconomy Forum takes place this week, bringing together Global Leaders to focus on rebuilding economy in a post covid world. The all Virtual Event can be watched online on the terminal and on bloomberg social channels on twitter and facebook. This is bloomberg. We are getting confirmation of the financial deal. Said to be in talks with that for 10 billion dollars. Said to be in these talks nearing a deal for the u. S. For 11 billion according to the financial times. We had earlier seen reporting from dow jones, the journal as well. This would be the biggest Financial Sector tie up and deal that we have seen since the financial crisis. We are getting more details on that. Pnc financial said to be in talks to buy bbvas u. S. Arm for over 10 billion. We will get you more details as they come to us. Lets get you a check of the latest business flash headlines. A chinese developer is seeing a steep drop in nonbanks, adding to its challenges. The company has been on a debt binge last year. And this year, the funding pipeline has dried up. This according to data provided. It accounted for 40 of ever grounds total 120 billion financing at the end of last year. Raising is said to be 5 billion to buy a iphone of its unit here. We are hearing it will list of Vantage Towers in frankfurt, following the business at 24 billion. That would make it the biggest share sale on a European Exchange for three years. Ongoing. Ay talks are the final size and timing of any ipo may yet change. That is the chairman and ceo who sees a slowdown in u. S. Consumer spending as the current stimulus package dries up. And with new talks for an additional round of spending remaining stalled. He spoke exclusively to bloomberg about the risk to spending. Consumer spending obviously, no one is traveling the way they use to. No one is going to the theater. Nobody is out in public entertainment events. We have been managing through four stages. The first one is entertainment. Whenever thing began to shut down, the second motive stabilization came at the bottom of the shutdown. Normalization which is a big word for better than stabilization but not really new normal. There was some stages of that. It goes back and forth depending on looming shutdowns. And finally when you get back with vaccines and travel comes back toward the second half of next year, we are looking at getting back to a precovid phase. Consumer spending, domestically, and pretty good shape. Most countries have been growing. The second wave is bursting through the u. S. Travel is certainly challenged. In our case, we can do other things. One is that everything is going digital. People are now using some form of a contactless card, all of which helps run through our system. The second is on data analytics, cybersecurity businesses, these are doing very well in the environment where everybody is going digital. Kind of a mixed bag over there. Within that. Unpack lets segmented a little bit. Lets talk about what is happening with travel. You talk about the weakness we are seeing with travel. I talked to a number of ceos and asked them the question, how much are they traveling . They say a lot less. I talked to the swiss ceo and he told me his budget next year is going to be down by 30 . He thinks it will be probably more than, in terms of what they ultimately come into. When does travel come back . When does Business Travel come back . And how different do you think Business Travel will be when it comes back . Ajay i think travel will come back before Business Travel. Companies like china and japan, where there is a greater thing of normalization and the environment then you have today. It looks like sometime it will come back visit quicker than Business Travel. I do think travel per se requires not just a vaccine. It also requires testing and crossborder possibilities. See it is experiment and with core doors with countries, as is china and japan, and australia is beginning to talk about it. I think travel begins cross borders. Nondomestic. Domestic travel has already commenced. More than a million passengers a day. At the bottom of the crisis in that stabilization phase, they were down to 100,000. Precovid, it was 3 million. We are not back to where we used to be. But Domestic Travel is up. Im talking about cross travel when im talking about that. One thing we are seeing different this time around haidi the ceo there. Looking at live pictures now if Cape Canaveral as we are a couple minutes away from the spacex launch. The crew one launch is scheduled to pet to blast off at 27 minutes past the hour. They will be docking at the International Space station some 27 hours later. They will be faring with them four astronauts. It is a milestone trip. This was the first regular commercial crew flight that had been delayed from its original saturday schedule to launch because of weather conditions that were seen to defend to potentially threaten the recovery if the Dragon Capital had two aboard at any time. The astronauts will be heading to the International Space station in just a couple of minutes time. This is a mission that really is seen as a milestone, offering a peek into a future in which multiple companies would provide trips there. Lets listen in. 9, 8, 7, 6, 5, 4, 3, 2, 1. 0. Ignition. Lift off roger. One alpha. Godspeed, resilience. Vehicle pitching downrange. Propulsion is nominal. State stage one, throttle down. Falcon supersonic. Max q. One, throttle up. Roger, one bravo. Haidi it is never not impressive watching space launches like that, watching those astronauts launch into orbit. They are headed for the station. Onal space spacex and those four astronauts watching the first regular crew mission. The first regular taxi service, if you will. There you have it. The control room. The socially distance control room that you see at Cape Canaveral. Lets get more from our bloomberg intelligent Senior Aerospace dispense an Airline Analyst who joins us. You are watching this as well. It always catches me by surprise, the emotional response from watching Something Like this. It really does still look like something of a miracle. Whatd the implications of this particular flight as being such a milestone . George thanks for having me. A gray big milestone, day for the u. S. Putting people back in orbit again. After the Space Shuttle program was shut down a bunch of years ago. And for spacex and elon musks efforts there. Nasa really trying to use a here to putaradigm people into orbit. I think in the view that it can bring more efficiencies, maybe get more for their dollars. If we can do more work in space. So, having spacex and boeing both build competing capsules, compete for launches, i think helps them along to bring that competition to space, which is going to open space up for all of the opportunities that are there. I think it is a great day for competition as we get into orbit again and really try to open up space for commercial opportunities as well as research. Kathleen when we see that shot we just showed of the team on the ground, watching over that, making it happen, it takes me back to that movie apollo 13. Very dramatic. This one looks like so far a very good take off and probably a very successful. In terms of how big this can get, very different when you have private companies involved. And they are depending on building up a market for this, right . Compared to the government doing it as it did for so many years. How big code be at this get and how profitable . George i think it is hard for us to tell. Space,f endeavors like it is not always clear for all commercial opportunities. You can orbit and manufacture better than on the ground. Things in space we may find we want more of. Reach forbeen hard to our existence because it is so expensive to get there. I think as you open it up, you find the opportunities, you find pharmaceuticals are made better up there or some precision pieces up there. I think this is all about the unlocking. The more you can drop the price of accessing space, the more you can enjoy the benefits of space. To me, and a lot of that is still very, very unknown. I think with satellites up there and experiments. But a lot more to come. It is just hard to say. Haidi you talk about opening up space and opening up a market that is already pretty competitive. Course thising of milestone launch for nasa and spacex. At the same time, we have Richard BransonsVirgin Galactic and jeff bezoss blue origin. Really forging ahead and what is the Competitive Landscape look like from here . George i think you can make a division of what some of the efforts are. Some of the efforts seem to be very touristic. Atmosphere just barely in space kind of tourism. We are not focused as much on those. Into orbityou get up and into space, i think things have become more competitive. But they are not getting crazy yet. Elon musk has really brought this view that you can reuse pieces of your spacecraft to drive down the cost, you can use manufacturing processes, economies of scale to drive down costs. Which i think is big because the other big competitors against them are still some of the u. S. Primes like lockheed and boeing, where the innovation is not occurring as quickly. And the drive to push down cost is not occurring as quickly. I think really elon musks is the ones that is burling and there in changing the landscape. The other ones, not as much right now. Kathleen another quick question here. In terms of keeping the cost down, being competitive, expanding this landscape, is there a technological breakthrough that could be made, that needs to be made, to take it to another level . It is just barely getting started, but what is going to drive it now . George again, im going to come back to it is going to be cost, there is always technological barriers to break us through. But i think still, sometimes you go for those technological barriers or for those leaps in technology changes, and they get bitterly expensive. I think what nasa is telling you when they are contracting for spaceflight is they are looking for a way to drive down the cost on something they think that will be very repetitive. I dont think there is a Technology Breakthrough coming here. I think it is all about these companies driving down the cost and getting to orbit all the time so that we can do more there. I think it is really about those efficiencies being built in. George ferguson, as we continue to watch and anticipating now after the state the first stage separation, spacex will be attempting to land the falcon nine on the just the read the instructions drone ship stationed in the atlantic ocean. We are looking for that. We saw the rocket breaking off of the second stage rocket which has its own engine that is optimized of lasting blasting through atmosphere that is superthin. The second stage is paring the crew driving capsule to higher speeds to reach orbital velocity. We are now watching out for the landing of the falcon nine first stage on the just the read just read the instructions drone ship in the elliptic ocean. Atlantic ocean. Expected losses of signal in Cape Canaveral. Kathleen we are watching as the inside now of the spacex rocket, as it continues onward to the International Space station. To land therawing falcon nines first stage. They just read the instructions drone ship in the atlantic ocean. Watchingnd of like im a movie more than a live video of something that we are so lucky to be able to see in real time. I mean, like i say at the beginning, i feel like im watching apollo 13 or one of those movies. This is really happening. Haidi one that is a lot more successful. And what we have seen is the falcon nines first stage booster has successfully landed on the just read the instructions drone ship which is stationed in the atlantic ocean. We have the stage when stage one separation successful is way. On its way to trajectory which is nominal. Honornamed resilience in of the stressful and tiring and difficult time the world has been enduring in 2020. And we had that message from one of the astronauts on board from nasa saying this is the inspiration for a nation, we are trying to do our part. Crew one for all. So we continue to watch the control room on this milestone flight. This is essentially the first commercial taxi launch, if you will, taking those four three i should say, nasa astronauts. One from the Japanese Aerospace services to the International Space station. Take us through what the next steps will be. Be spending will six days on the iss. What are we looking out for . Time theythink by the get docked with the iss and once the capsule leaves and reenters orbit and lands in the ocean, that is the measure of success, that transportation as much as he. Said earlier. It is a taxi service. Reentry will be the final success and then as we go forward boeing will bring their crew flight to the space station as well in january. We are looking for them to do their last on crew test on that. And then the crew test as we get later into 2021. And that will set nasa up with two contractors that can give them lift into orbit. As we know, the russians for lift into orbit has a. I dont think we want to go back and contract them anymore. So once we get the boeing star liner on board, they will have the contractors they need to continue to push artwork on the space station. If we decide we have the budget and we want to go to the moon or want to start doing things in direction of mars, that is what this steppingstone could be. Kathleen final question, how is justset up in terms of not international cooperation, but International Investment and International Consumption of the services that are being developed and provided . Andge i mean, boeing spacex can provide some of these same lift services i imagine to other countries. And as you mentioned, there is also we will carry along other countries come astronauts on our flights. Is pretty expensive to get into state into space. There is not a lot of countries that can afford it. And you will have Computing Services from the European Space agencies and the russians as well. I think they can offer it to other countries to bring them into orbit for other types of work. Kathleen george ferguson, thank you so much for joining us and guiding us through, giving us some perspective on this as we watch this very exciting launch of spacexs rocket on its way to the International Space station. That is george ferguson. Now we take a look at the markets paired Sophie Kamaruddin joins us. Are they rocketing too . Sophie we do have some gains in asia. Australian equity trading is disrupted on market data issues. But the exchanges online. Over in japan, and the nikkei and the june 1991 hi, building gains above 25,000. Make a bank, mitsubishi, jumping to a high a fivemonth high. A februaryising to 2018 high with chipmakers and banks providing a boost. Samsung shares climbing to a fresh alltime high. Gaining ground. Despite the u. S. Virus cases above 11 million in the United States. Global infections have topped 50. 4. 2 million flipping the board to check in as the dollar extends losses, you have the korean won eyeing the 1100 level. Trading at a december 20 18 high after capping a twoweek event. As markets 764 line assess the likelihood of a rate cut this thursday. Abovessie dollar hovering 73 just below 73, ahead of the rba governor lows speech. Offshore u. N. Testing 660. The yen stalling aftermarket had the best week since june, picking up the cause ben with yields. This as we digest the latest gdp report from japan out this morning showing the expansion clawed back some loss growth. Japans economy measured mission or cautioning the economy does remain below levels. Na flipping the board, aside from the updates on japan, a factory output from the company country. Chinese monthly activities numbers. The pboc to conduct mlf operations. I will offer clues on liquidity. Expecting money supply may be tighten on the mainland. Later this monday, jd. Com and baidu earnings are on top. We have 13f filings which are on watch. Asia hope it holding in focus. Kathleen from markets to japan posting its biggest expansion in half a century, and its First Quarter of growth in the last four. We break down the data next. This is bloomberg. Economy saw a strong rebound from the record crash during the pandemic as businesses reopened, trade brought back government stimulus. Gdp grew at an annualized 21. 4 in this quarter. The fastest pace in half a century. Our reporter is in tokyo with us. What does it tell us about the rebound and how much work there is to be done . Right. It is indeed a very optimistic figure for this particular quarter. Growth, which is the fastest since 1968. On the surface, that sounds great. We have seen a recovery in trade with china and the u. S. Reopeningbusinesses after the virus shut down. Consumers are making up for lost time during that period. What happens next depend on the spread of the virus which reached the new record pace in japan last week and government officials are hinting there are fresh restrictions on peoples activities coming up if we do not see a leveling out of the numbers. There are fresh waves of the virus hitting the u. S. And europe. And that could mean exports would a struggle again over the winter months. I think nobody is relaxing at the moment, even though these figures look good. Kathleen you just mentioned, we can is overseas. Weak exports not good for japan. How about the deal. The biggest trade deal in the world. What does it mean for japan . Will it help . Yes, i think there is certainly some hope this will help. Japans trade ministry welcomed the agreement. The Largest Global trade agreement, regional trade agreement in the world at the moment. Ban on reaction with the demand for Technology Transfers and the protection of intellectual property will help build free and fair economic rules. O the cuts should help japan. Be helpful for one of the most significant things is that it brings together china, japan, and south korea and these three asian economies have failed to reach their own separate trade agreements. So that could help trade between japan exports, exports from japan to china. One of the disappointments for japan is that india is not taking part. Clearly this agreement is going to be dominated by china, by the largest economy. Although it has been a statement saying it will be welcome to be rejoined in the future, i think there will be some disappointment in today that that has not been achieved. Haidi thank you so much. Our politics reporter, Isabel Reynolds joining us from tokyo. Recovery mode. China will release more ecodata today pointing to gains across retail sales and investments. We will discuss the number with barclays chief economist john chang. Jian chang. This is bloomberg. Kathleen new data in a couple of hours are expected to show chinas economy continuing to recover, with Industrial Production accelerating even as the golden week holiday reduce the number of working days in october. Joining us is barclays chief economist jian chang. Great to have you on. These seem like important numbers for investors. Anybody who is following china. Economy, lets start with this manufacturing export side. One side where you see optimistic. What will we what will be see in the numbers today . The continue to better than expected export growth, and also the manufacturing pmi, we expect growth to remain strong at 6. 8 . Similar to 6. 9 point 6. 9 last month. Despite few working days in october. Kathleen is it at risk if the virus continues to rise in two of chinas biggest export markets . The United States, and especially europe . Jian actually the performance has been the question since the Second Quarter of this year. Veryve been maintaining a constructive view on chinese exports partly because on one side, china continues to post a reasonable growth in covid related exporting. We have already seen external demand to see a recovery since june, july on the back of the reopening. Lockdown andurn to social distancing measures, we continue to expect than on covid related expert performance to be robust. We saw last month, the chinese exports was 11. 4 year on year growth. We expect the strength to extend into the First Quarter. And in fact, if you look at anecdotal evidence on trials,uring in the those producers are working around the clocks and orders have been extended into next year. Particularly in the area of home appliances, electronics, and the Production Capacity cannot meet demand. That is the issue facing by manufacturers there. Haidi what does it mean potentially for the pboc . We know there was talk about how they unwind the stimulus measure. What do policymakers do to ensure that it is managed unwinding . Jian right. Indeed. Rate claimskets in have been a concern about a potential pboc tightening. Say beginning of next year. Beenentral bank has talking about active strategy. In earlier we drew stimulus in september. Recently, particularly in the area of financial risk, and also see this made us withdraw for Monetary Policy easing is less likely in the short term. If we look on the financial risk side, the government has tightened the Housing Market in july and august. House Price Development has really slowed. And that what has been the concern for the Chinese Government. And in the area of inflation, we have seen the pace of decline, it has been faster than expected this month with the data risk belief that last week,. 5 . Seen that. Lation has we see it is expected to see some deflation in the First Quarter. Pboc,ing these in the more pace with the potential for the withdraw. A gradualn terms of unwinding of the stimulus. Especially compared with the market two or three months ago. Haidi does that mean there is further upside for the yuan and is the pboc comfortable with the level of strength in the currency . Jian indeed. This is also the question weve got. The pbocs tolerance or comfort in us with the appreciation. I do think the Chinese Government recognizes. Currencyciation of the is supported by economic fundamentals and the first in, first out chinese recovery story. In the differentiation between china versus the u. S. Pboc versus the fed. Theyf this suggests need to tolerate. And they are aiming to have a more flexible Exchange Rate driven by the markets. And they have exited the normal intervention in the markets. Anyway, they need to empower it. Haidi barclays chief chinese economist, jian chang. We have Bloomberg New economy firm taking place this week virtually. Global leaders getting wet getting ready to focus on the rebuilding of the global economy. This is bloomberg. Economy. This is bloomberg. It is not it is 9 00 a. M. In beijing. Welcome to Bloomberg Markets china open. Ofcounting down to the start trade in the chinese mainland as well as right here. Our top stories, formally launch the worlds biggest bigotry deal. Covering more than 2 billion people. It has been a decade in the making