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Microsoft overnight. That is being digested as well by u. S. Investors. You have the currency offshore at seven, currently. It is weakened by about 2 10 of 1 . The aussie dollar is looking like that, said he six. The euro is flat. The bloomberg dollar index is weakening, down a 10th of 1 . Lets move it down. The stock was suspended on july the 13th after they failed to get a renewal for their license. Currently trading at 10. It is down 30 . It just reopened after a 10 day suspension of trading. The company saying it is in talks with its creditors over longterm debt. It will continue businesses that dont require that franchise. Noncoret nunc activity. Rishaad china vowing to retaliate for the u. S. Closing its consulate in houston. Protectd it is to information. President trump indicated more such moves might happen. President trump as far as closing additional embassies, it is possible. We thought there was a fire in the one that we did close. Everyone said there is a fire, there is a fire. I guess they were burning documents or papers, i wonder what that was about. Rishaad beijing plans firm countermeasures against washington. Jodi schneider joins us with more on this developing story. Run us through the rationale for the closure of this consulate and overspent from china. What can we expect . It was to protect American Intellectual property and American Private information. Although they did not provide more details. At least two chinese citizens of stealingcused secrets from houston. We dont know a lot more than that. It is clearly a very big escalation in this on the diplomatic front in terms of increasing tensions between the u. S. And china. They said that china planted to act with firm countermeasures. Obviously, there does not appear to be any revocation of this decision by the u. S. Rishaad what are some of the longterm implications of this . Ove could it have the titfortat moves of the cold war . Jodi it looks like it is headed that way. China has struck back. We expect that that will happen here. This is a dramatic blow that has been under strain already. Maintainand china both consulates within each others borders. China could close one of those. There is all kinds of speculation about which it could be. It has one in wuhan. Some thought that might be the first to go, the first to close. Others have said there has been speculation that china might close others. Kong had been treated differently. Had beenconsulate treated differently than the other ones. There is some speculation that that could close as well. At this point, we dont know. Clearly, this diplomatic relationship suffered a big blow with the closing of that houston consulate. Show thatoesnt it the hawks are in charge of Foreign Policy in the u. S. . Are the hawks in charge in china now . We have seen rising tensions between aging and london. Then india and australia on top of that as well. Dont forget the south china sea. U. S. , the in the hawks are in charge. That is one thing we can say. That is one thing we can be very definite about. President trump really tried to balance demands of these hardliners who wanted a strong crackdown on china. Also to cultivate a stronger relationship with xi jinping. Thosehopes are going for trade deals. Mike pompeo is pushing u. S. Policy to a more antagonistic place. To answer your question about the china side, i think we see the hardliners emerging there as well. Perhaps in response to this without much leeway to negotiate. The hardliners are now reacting to china in similar fashion. We continue to watch for that expected chinas reaction to the closure of that consulate. Lets get the first word news with Karina Mitchell in new york. Karina the australian budget is 185 billion aussie dollars short. That will take net debt to around 35 gdp. Unemployment is expected to peak at just around 9 . Coronavirusr 403 infections. The thirdhighest daily tally since it began. Exports plummeted and this cut investment because of the virus. Gdp contracted 3. 3 on the border through the end of june. That was worse than estimates, manufacturing fell by 9 . Exports slowed by double digits in each of the three months as Global Commerce collapsed. Hong kong reported a record 105 new local virus cases at what is being called the most severe situation. It is pumping Health Officials to expand official measures. Half the new infections are not linked to previous cases. Has the epidemic has reached its most severe moment. Global news, 24 hours a day on air and on bloombergquint take, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell, this is bloomberg. Tom . Tom tesla surprises the market again after booking its Fourth Quarterly profit and rub. We will go over the Company Prospects for growth with gene loop ventures. Why risk assets are at a crucial inflection and how this firm is advising clients. We will be speaking with Eugenia Victorino next. This is bloomberg. Our brighton interrelationships and. This is a surprising move against u. S. And china it consulate but it fit within the fabric of a structural deterioration of the relationship. Time ofved from a strategic cooperation with china to a time of significant strategic competition. That is on every front. China is in the process of losing its most important ernal elation relationship. We will have to see what happens after the elections in november. I think the Trump Administration has been stronger with china than any other Previous Administration in many years. That strength is in certain cases very important to be demonstrated. Thinks this will change chinas behavior, he is mistaken. Reform ents weekend relations with china. We have to make sure that our own house is in order. We keep pointing the finger at china but we have been naive in terms of how we protected ourselves. Voices there on Bloomberg Television after the u. S. Gave china just three days to close that consulate in houston. There is no upside risk. Lets start of with exactly that question. Where does that particular pairing go . Before this a private the surprise move yesterday, this was to elevate to electionrelated tensions. That came a bit early with the closure of the youth and consulate. Depending on how china would there arethis point, five consulates, the u. S. Consulate in china. If china were to have a titfortat reaction, the be int consulate would wuhan. If china were to order a closure of a more important u. S. Consulate, that is definitely an escalation, significant to where we are right now. At this point, risk sentiment remains positive. The Market Reaction was just reflected where Global Sentiment remains positive. Rishaad rishaad what about elsewhere . Stocks moving up. Is any of this being baked in . The implications and the seriousness of it. Right now, risk assets very criticaleak levels. We are still at an inflection point. It is not clear where there is a risk sentiment that would lead to a persistent trend. Yesterdays move would suggest that the optimism with regards to further fiscal stimulus and even a vaccine have offset the row. Matic for now, it is risk on. Sometimes you have a mild risk off but at the end of the day, it is a risk on. Support of risk currencies like the aussie. We look at the data from the u. S. It does seem as though after the strong rebound, the data was leveling off. It is not in fact going down another leg. That could prove to be a real head scratcher for governments and central banks, certainly. Investorsthat the have not really looked at that closely. What is your view on that . Indeed. We have the reopening. They are stalling. That is basically lengthening the recovery. We are in the recovery. In asia, it is quite clear that china and korea are leading the recovery and their equity markets are suggesting that. It is a global risk on, some of these have not been fully erased except for these two markets. Tom let me ask you our question of the day. It is about saving. People have been working from home. They have been refraining from shopping and going out. To what extent are the savings a cap on growth and yield . When you have domestic demand compressed of the way we are currentight now, account balances would likely be improving. These thingsave likely improving. That would lead to even more savings, so long as to mr. Demand is weakening. As far as the effect on the the unprecedented release of liquidity would more than accept that. The unprecedented release of liquidity. We also saw the previous stimulus conversation. There are still . About whether or not they will get that additional stimulus across the line before the elections. In europe, they had progress there. Liquidity are the liquidity conditions Going Forward . In to asseted prices . At this point, all of that liquidity is leading to a softer dollar. Eventually, that liquidity will build into asia. Forctation is for the ofs to continue regardless the intensification of the u. S. And china tensions. Always good to get your insights. Discontinuing this conversation, this risk on move is playing out in taiwan. You have the 10 year Government Bond yield dropping to its lowest ever. Your5 is the yield on taiwanese 10 year. A risk on move there. Virus has tackled the very well. It is the leading jurisdiction that has this virus under control. The economic endpoint suggests the economy is recovering. Again, this yield dropping to its lowest ever. 20 more ahead, we will talk about the tesla story. Stay with us. This is bloomberg. Tom the nasdaq stock jumped almost two point 5 on better than revenue. The environment for return investing has been good for several years. She spoke with us about the democratization of markets and how chinese public listings in the u. S. May change in the near future. I think the environment for Retail Investing has really been pretty great over the last 10 years. The democratization of markets have allowed them to have direct access to the markets over the last 10 or 20 years. It has been a key trend that has driven the u. S. Markets. I do think that is a longer term trend. The fact that commissions have gone has driven more demand within the retail environment. Retail investors have come into the markets this year. Is it a free lunch . Tv ameritrade says its free. You can trade nasdaq shares. Is it a free lunch . It really is free for retail. During his 10q year. Tenure. He went along way in that regard. Amount n anonymous enormous amount. Markets arein or extremely narrow. Having to payot this. For them, it is free access. The spreads might be narrow. Are there sufficient protections against losses . Are they trading without the same types of oversight that u. S. Companies face . We encourage them to have a roundtable. Itself,ers, the sec this is the disclosure regime. This includes companies from china. They said to support these companies. That is an area that we are focused on, trying to create positive change. The sec is also focused on it. That requires some diplomacy between the United States and china. That is something we have been encouraging them to focus on. You have been incredibly proactive about all of this. Can you walk us through what you have done . We had some concerns that we want to play our role in addressing. We do want to make sure that we have some oversight over the quality. One member of the management m we have increased the public requirements for companies that are listing in china. This is a broader ecosystem issue that we are trying to make sure that the government is working with the Chinese Government to address. Alibaba and the up for you have the recent wire card train wreck in germany as well. This is really important to you and your other markets. Fccou feel that the ftc is aggregating its duty . I think they have a arms amount of response ability and the taken very seriously. I think i do an excellent job of this disclosure and running back questions and comments to companies with their filings. It is a huge part of the role. Friedman adina Adena Friedman joining us there. Tomorrow, there is no trading. Asianpacific stocks are being dragged down by what is going on in china. Down 1. 3 percent but overall it has been quite something. The dollar has been weakening. We have that reverse correlation as well. China is going to the downside valsg written retaliation. This is bloomberg. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. But what if you could stdo better than that . K. Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. It is 10 29 a. M. In hong kong and beijing. 10 29 p. M. In new york. Is vowing to retaliate for the u. S. Decision, ordering the closure of its consulate in houston. Emergency services were called to the building after reports that papers were being burned. Movedg denounced the u. S. In saying it plans stern countermeasures against washington. The state Department Says it is protecting American Intellectual property and personal information. Far asnt trump as closing additional embassies, its always possible. You see whats going on. We thought there was a fire. Everybody said there is a fire, theres a fire. I guess they were burning documents or burning papers. The u. K. Government says it result ofct as a its banning of huawei from the 5g networks. It lowers the number of suppliers to just the two skin and a leaving the u. K. Vulnerable to any downturns. Carriers must remove huawei 5g 2027the end of 2020 after years of u. S. Pressure. Havel coronavirus cases talked 15 million, with the u. S. Remaining the focus of the pandemic wall infections surge in the asian pacific. California surpassed new york and countrywide cases increased on most 2 . Fatality rates hit a daily record in indonesia with australia setting a new high. Brazil reported more than 67,000 new infections of the last 24 hours. Worldwide confirms covid19 debts are approaching 627,000. To billion dollars deal supply an experimental vaccine to u. S. Has a price dealing of about 20,000 that will affect how much other drugmakers will charge. The 19 price tag takes into effect Public Health requirements and claims of irish treatment would be 30 less than what other companies charge for a flu vaccine. Global news, 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell, this is bloomberg. Staytesla managed to profitable, even in the midst of the global virus pandemic. Positive quarterly earnings. Surprising wall street analysts, possibly paving the way for the soaring stock to join the s p 500 index. Our next guest says teslas valuation will likely have wild swings in the future, but move higher overtime. Lets bring in the cofounder that conducts research into, and heavily invests in the tech sector. Thank you for joining us. T were the key earnings what were the key tools for you from these earnings . They did it again. They did it again. A lot of anticipation around profitability to get to that important hurdle for the s p induction. Into the long Way Community that tesla will survive. Two years ago that was not as clear. I think thats one take away most people are focusing on. That said, i think that the most important take away is a bigger picture, part of the longerterm trajectory of tesla that is underappreciated. That is that the company is following amazons playbook. They are building this Virtuous Cycle of reinvesting profits to drive growth and scale and innovation. I want to give you one quick example that you on musk talked about on the call. They had commented about some of the profitability trend, the positive trend around production at in some of the highermargin model white. Tok commented they wanted walk a fine line of profitability, and also allowing that profit to flow back to customers in the form of lower prices. The abilitymight, to use a profitable business and fund other businesses and tesla is doing the same thing. As we step back, it gets progressively more difficult to see a path where traditional automakers can really compete with tesla when it comes to ez. What we see in this quarter will likely continue for many quarters. Analysis is that interesting. Youre talking about the ecosystem tesla is building. Its a fine balance because they have to invest in r d to build out that ecosystem. To get that balance and also ensure parts of the business remain profitable, that is a risk for investors Going Forward, is it not . Gene its a risk. Amazon hasods where had massive losses or spending in continuing to spin the flywheel. What we have observed with amazon is that when investors have anopportunity to openended Growth Opportunity and this is more about electric cars, its about a client applying technologies to renewables and power backs. When investors see this window of a decade plus of growth, they tend to be ok with the investment and some of the losses. I think it is hard, just mentally for investors to get their head around whats happening with tesla stock. It looks like the charts are in cryptocurrencies. Ultimately, this is still a 300 million market cap that is addressing probably the biggest untapped markets. I can see room where investors will forgive some of those investments in the hope of capitalizing on these massive markets. Lets tease out more of your views on the market cap, because it could be included in the s p 500. What are the potential upsides of that inclusion for the stocks . I think a lot of that, with the after hours trading is priced in. The stock has moved up in anticipation of that. There is the headline around this quarter thats around that profitability that gets into the s p, likely into the s p index few months. I do think when you step back and think about the market cap, and ultimately where this can go longerterm, i want to emphasize this will be a wild ride. These will be days that are up meaningfully and down meaningfully because it still remains controversial. I want to just plant this foundation. The longterm value of tesla will not wise solely in its automotive mission. Themnk it will rely on taking technology around motors, batteries, what they have learned around. Driving and really repurpose thing those technologies into new markets. That could be anything from other Energy Products to hvac for homes and apartments in office buildings, to even small aircraft. You will probably think that i am going to an extreme here, but i do believe that if they pursue those opportunities and leverage their existing tech in the new markets, there is room for upside to improve market cap. Rish in hong kong. How much do these regulatory coverages flattened the profits . This is a bizarre phenomenon with the tesla story. Governmentsis that have regulations about what efficiencies need to be for different automotive makers. Per gallon and the amount of vehicles they have that are electric. If those automakers cannot meet those targets, they are penalized or they can purchase these credits from other companies that are making a lot of these. It turns out tesla is the only when making a lot of these cars. Is effectively a penalty for other automakers not making enough progress to evs. From 35428 million of million in the march quarter. That did have in impact. Ultimately them reaching profitability. It is not a sustainable part of their business. Eventually these tax credits will go away in the future. That is the dynamic around the tax credit. Real read is that it is an indictment against the Auto Industry that they are struggling to build electric cars that people want that comes to her and how many tax credits they need to buy from tesla. Tesla is regarded by some as being a religion in terms of investing. It seems that Tech Companies themselves, are they in a bubble . You could argue that some of these are in a bubble phase. But you only know you are in a bubble in the bubble bursts, right . Gene correct. You could have built a strong argument on some of these Tech Companies have surged three months ago that they were in a bubble or when year ago. It is difficult. I do agree that the tesla story is a religion for many. I cautiously am to even express my optimism. I think it puts me into a camp that, someone who is a fanatic and is not viewing this with a clear view of site, i really try to keep a middleoftheroad approach and ultimately see what is the undeniable truth. Tesla has a competitive advantage thats not appreciated. The ability for them to make cars that people want. The question about the bubble peas to get to the core of your question, i dont know. If the bubble breaks the tesla it will probably be breaking for a lot of these other Tech Companies. Isview, my fundamental view , ultimatelydership there will be a fraction in the market between the haves and havenots. You will see Companies Like tesla be part of this new thing that may have times that are perceived to be a bubble. But if you look at a 5, 10 your time, they will prove to be the best outside place. Rishaad looking at the things this is not meant to be compared to the. Com boom, but they did not have revenues. They had free cash flows. They are different east altogether, are they not . Noteasts altogether, only are they not . Those painfuler stories well and its a different story. Very few of them are still around. I think these companies that have these big grownups, whether its microsoft or tesla, they are going to be sustainable. Ultimately they will continue to capture more value. Believe there will be a fraction in the market very different than what we saw in the. Com bubble burst. I want your views on the controversy surrounding tictoc. There is a story in the scj suggesting that u. S. Investors are looking to buy tiktok from its chinese owners. What is your view on how this is playing out . Are there solutions for tiktok to carve itself out or are regulators determined to crush this company . Gene i think there is a tictoc ion to ban tickktok. Ultimately it will be a political suit political decision. Predictd for me to whether it happens or doesnt happen. I do believe there is enough economic value. This is the Largest Company in the world in terms of valuation. Your talking about 100 billion valuation to. The next biggest is closest to 30 billion. When you look at the economic and the Wealth Creation opportunity, people who have equity could have equity in ktok. C ti it will create a new entity clear of any kinds of ties that it will cause political rifts. Its hard for me to determine whether tiktok is based in the u. S. Either the political environment will cool, or there will be structural changes to it. Was critical here is they have lightning in a bottle. Teenagers and younger people describe it as a addictive, and that is typically an opportunity for Wealth Creation. You will see changes to enable that future. Thank you so much. Mars group may be feeling the pressure on its ipo. Justify its ambition. We are looking at the potential for the worlds biggest mobile payment platform. Thats next, this is bloomberg. Founder jackaba myers and listing the group for worldsld be the biggest ipo. But the valuations may be tested all of med all admit it shift in strategy. 200 billion dollars valuation target, tell us about how they arrived at that number. I think mid2018, which was the last part of the venture capitalists fundraising, their valuation has been reaching 150 billion already. Two years after that mark they are seeking 200 billion. Its not a surprise. I reckon that level of valuation is 45 to 62 times for priceearnings ratio if we are making assumptions that it will year as much as 40 from a end of march, 2020. We are still saying its more expensive than some payment firms, such as the household savingike paypal, only for square, which is really another buster in that field. Valuationcompare the jp. Com nt, alibaba, jd. Com. They are trading higher than the variation. To investors its in interesting proposition, but we need to wait. One i spoke to the former ceo, he said it was more than a payment program. They have Wealth Management products and all sorts of other utilities. What is the strategy Going Forward . Knows theveryone antimeasure from the beginning, the Payment System in china. Over the past two or three years we see the pboc has been posting more restrictions on this business. And the Financial Group has been working really hard to leverage on this platform. The Financial Services country rooted 50 of their earnings. Contributed 50 of their earnings. But in mid2019 they really want to transform the company between consumer and technology services. Other than just Financial Services air providing to their customers. They also target the small merchants, the qualified institutions to provide them with the technology solutions. It up toant to have 80 and five years time from 2019. We are still in the process of an overhaul for the company. To be dealing with some of those funds. Rishaad very quickly, what is the implications, what are the implications here for profitability . So far, we have been seeing, for instance, the Cloud Business together with tencent, portion of 1 of the market. Whether that could whatming a decline for they have been doing, or the numbers from alibaba. We need to wait and see, but we do have a phase already from Financial Services. Tom breaking down the listings for us. That was our Bloomberg Intelligence senior asia financial analysts. You can catch up with our interviews by using our interactive function, tv. You can watch live in dive into any securities or bloomberg functions we talk about. Send us instant messages, should you wish to do so during the show. This is for bloomberg subscribers only. Check it out at tv. This is bloomberg. Rishaad lets have a look at the business flash headlines. This company is looking erased ripley and dollars. Bloomberg looking to raise 3 billion. Comparing the offering that could happen as early as this year. Lufax exclude this and geopolitical tensions between u. S. And hong kong could affect the decision. Hynix comes out with secondquarter numbers. The highest estimated operating profit was 1. 6 billion in the dataset to clients and consul members are meeting surging demand for people stuck at home during the pandemic. Watt down. Despite the big numbers, chinext as it to recover from a difficult 2019 for the semiconductor industry. Units areemiconductor said to be attracting takeover. Has been exploring options to sell part or all of its stakes for which it bought for 32 billion in 2016 and they made an approach in recent weeks for sales of the u. K. Base, which could become the biggest ever deal when it comes to the chip industry. The former head of the collapsed hitgerman Company Losses as far back as 2016. Marcus brown and two colleagues conspired to paying the billion. T of 3. 7 they allegedly inflated the books to make wirecard to be more attractive to investors. We got reports from germany parent is torcedes make deeper cost cuts than it plans before the pandemic, which could mean the loss of 27,000 jobs. Are told it raised its savings them a target is the equivalent of 2. 3 billion. They will get their earnings thursday, one week after reporting the secondquarter loss of almost 2 billion. Heavy losses in the mainland. Csi 300 down 2 . Geopolitical tensions are back. How will china respond to the closure of that consulate in houston . The breaking it down, financial are leading the losses down two points percent. Followed by industrial materials. Onsumer materials health care is flat. Hsi is down attempt of 1 . Going to be looking at some of the currencies. Gold is again looking and getting too close that 1900, above 1900 an ounce. That was part of the focus for investors. Kospi is down 1 . We have korea confirming it is in recession now. Plenty more to come in in a tower of Bloomberg Markets. Including the state of the australian economy. Who better to do that than the finance minister of the country. He will be along with us in a few minutes time. This is bloomberg. Its almost 11 00 a. M. In singapore and hong kong. Welcome to Bloomberg Markets asia. Lets have a look at our top stories. Promising ties up retaliation for the houston consul enclosure. The president said he milk desk he may shut more diplomatic missions. Haslinda a grim milestone as global virus cases top 15 million. The numbers are rising in the u. S. And asia, with hong kong warning of a most severe situation. Australia announces its biggest budget deficit since the second world war. The pandemic devastates the economy. We are joined live by the finance minister. Looking forward to that. Lets take a look at where the markets are at this point in time. Asian markets are mostly lower as investors mull over escalating china u. S. Tensions. How china responds to the consul enclosure in houston. The pan shut for in extended weekend. Msci asia index down 3 10 of 1 . Climbing to the most expensive the weekly drops are due later today. Csi 300 expanding its losses, down by more than 2 . China bowing retaliation after the u. S. Forced the closure of its consul in. That coming hot over heels of the u. S. Accusing to chinese bankers of working with beijing. The hang seng down to 10th of 1 . We have the hsi down about 11 for the year. 3 5 of its members have lost that leads 16 or more in that time. The benchmark bucking the trend of 4 10 of 1 . Yesterdays loss has seen record volumes on the latest stocks. Helping them outperform the rest of it major global peers. Yeartodate with a 43 gain we saw for the hong kong exchanges. We have the aussie currently weakening a tad. 7137. Thedollar on the back of budget blowout amounting to 132 billion in 2021. From our treasurer we heard from our treasurer who said unemployment peaking at 9. 25 in the Fourth Quarter. Right now. Lds at 87 0. 87 . Yields and 10 year bonds down about two basis points right at this point in time. Rising after the houston consul enclosure. Gold continues to climb upward, 1865 right now. What we were expecting out of india, trading day beginning and 43 minutes. Futures got back down a quarter of 1 . We did see the equities in india snapping a five day winning streak wednesday. Benchmarks had modest losses as well as a volatile session. We also have a bit of turbulence today as we get double witching in the shaved of nifty. Nifty bank contracts are set to expire through the day. Lots of earnings today. Asset management and abb india among those reporting. Reactionexpecting some. Lets get back to australia. They have unveiled their biggest budget deficit since world war ii, reaching 132 billion u. S. Dollars this year. That theests government will go to the next election with the nations finances deeply in the red. Joining us is our finance minister. Good to have you with us. The data to the economy will stay long up the pandemic is gone, but todays updates did not include any new significance to the measures. What do you hope to do to mitigate the impact of virus recession, given that the measure so far aim to be temporary. Temporary . Whichay was an update, summarized a very long list of measures that we have taken since earlier this year to boost the whole system to support the economy and to support and protect jobs. The situation in australia, while challenging, we all know why we are here. Here because of the impact on the economy and consequently the budget of the coronavirus pandemic. It is a clear reason for it. Australia is in a better position than most other countries. We are in a more resilient position than most countries in economic terms and in terms of our budget. And in terms of our Health Outcomes so far. You are forecasting a jobless rate of eight and its reader a. 25 . Winding down. Is that reasonable . Before thermann Coronavirus Crisis hit we had an employment growth rate at twice the rate can trade to the average. We are doing with a challenging situation, but the economic contracts in an australia has been up for the part of the world. And the employment impact has been much less than other parts of the world. We hadmonth of june 280,000 australians go back into the market. Number of hours worked went up, under employment went down at 210,000 jobs were restored in the economy. Somehere is still challenging times ahead, but we continue tonight just continue to make the decisions that provide support and the economy and to protect jobs as appropriate. We do have to get back into a situation as close as possible to normal. We do have to get back into a situation of viable businesses. Haslinda if needed, is there any wiggle room to help jobs, given that somehow the government had an additional 20 billion aussie dollars to . Upport the jobs program minister cormann we will continue to put australia under a strong foundation. We are taking measures across the board, including providing tax incentives to businesses, encouraging to invest so that they hire more australians again. We continue to pursue our deep regulation agenda. Exporting businesses out of australia. Our Infrastructure Investment program. And our energy reform. We will continue to make all of the necessary decisions to give businesses around australia the best possible opportunity to be successful in this current environment so that they will hire as many australians as possible in the months and years ahead. We had your boss, scott morrison, talking about him expecting the economy to be coming along nicely in the middle of july. Clearly with the outbreak of the coronavirus again, thats not going to be the case. How concerned are you about recession deepening . I think youmann are misrepresenting what the Prime Minister has said. The Prime Minister said that our objective was to get the economy back to as close as normal by july, and we are in that position. With aare dealing localized outright in one stead. One jurisdiction and there are some trends in New South Wales that we will all this week ebay watching eye on. But across the trillion, there is no Community Transmission and a very long number of active characters and businesses are coming back. And the coming back recovery, and large parts of australia, at least in many parts of the economy has started. We continue to do what we can. We have to continue to manage the risks. Weve also got to focus and put in the context where australia sits compared to the rest of the world. Our economy is in a stronger and more resilient position than most. Our outcomes are better than most. We just have to continue to do everything we can. The fiscal side, you have done heavy lifting their and the central bank is doing heavy lifting. Do you think they could do more in your view . Do you think they should be going towards negative Interest Rates in support of whats going on in your efforts . Our centralmann bank makes decisions on Monetary Policy independently. Awould just point to statement that the reserve Big Government said is not in the cards and that he does not envision a circumstance or would enterre we into negative Interest Rates and territory. The government continues to do what we need to do to provide proper levels of fiscal support. On an International Comparison basis, even after the crisis level expenditure that we had to isur now, our debt level lower than many other countries debt levels. Our growth andat debt levels of the sheer gdp that continue to be comparatively low, which gives us the necessary fiscal flexibility, fiscal support should support measures of the future. No economy is having a good time of it, what are you most worried about looking ahead . Until suchrmann time as there is a effective vaccine that can be distributed around the world, we will have to continue to manage the risks of the coronavirus in our lives. It is a highly infectious enterovirus. It will be with us for some time. We keepto ensure that the economy going in the best possible position. Find the right way to run things in the economy or the virus remains around. That is going to be the key challenge for some time. Are you concerned about Household Debt, currently debt to income ratio of 200 . Could Household Debt derail the economic recovery in australia . That is notmann what we are seeing right now, times of higher unemployment that is one of the risks you want to monitor. Providing historically unprecedented income and of into the support of the economy. Things thatof the we have to continue monitoring into the future. Banks and australia have been very good in working with their customers where that was required to help them transition through this time. Watching. Ill be at this stage it is still looking ok. You are leaving politics, what are you going to do, what do you think your legacy is going to be . What has you left behind as you could say, i did this . Ister cormann annmarie minister cormann i have been the finance minister for the entire time of government. Government ands a fiscal position as a result of the budget prepare after 6. 5 years in government. Certainly take a level of satisfaction out of the fact that australia and australians are in a stronger, better and more resilient position as a result of the work as a result of the work we did. I do next, i am here until the end of the year. We have a budget to deliver in october. We have a budget for christmas and 100 focused on the job at hand. At the appropriate time i turn my mind to whats next. Go,inda before we let you under what consumption would you fast track personal tax cuts . Budget isormann the on the sixth of october, in the lead up to the budget we do what we always do, we review all the economic data, all of the information an opportunity to adjust policy settings to provide the appropriate incentives and the appropriate support to the economy as required. We will be doing that today. We will do that over the weeks and months ahead. When i asked you earlier about what you are most worried about in the future, im surprised you did not mention anything about china, your biggest trading partner. And the decoupling taking place there. How concerned about you and the damage he could do to the australian economy . Damage it could do to the australian economy . Minister cormann its a mutually beneficial relationship. Our resourcesof into china and china needs our resources to grow thereupon a me there are economy. It has to be a mutually respective relationship. From time to time there are issues that arise and we have to work through any issues that arise in a way that is constructive and that is what we will continue to do. There focused on having best possible relationships with all countries around the world. Sell as many products and services out of australia and around the world as well as into china. We continue to work to have the best relationships with all countries around the world, including china. Thank you very much. The australian finance minister joining us from the australian capital. Lets move to the first word headlines with china bowing to retaliate for the u. S. Decision ordering the closure of its consulate in houston. Emergency services were called to the building after the order amid reports that papers were being burned. Beijing announced denounced the u. S. Move saying they are going to have firm countermeasures. The state Department Says they are protecting American Intellectual property and personal information. Auth korea fell into recession in the Second Quarter for the First Time Since 2003. Its exports plummeted and businesses cut investment. Contracted three point 2 . Manufacturing actually dropping my percent of experts fell by double digits to east of the threemonth of Global Commerce collapsed under lockdown. Pfizers 2 billion deal to supply an experimental vaccine to the u. S. That they price ceiling of 20,000. That will affect how much other drugmakers may charge. 19 claimsat their their overall virus treatment otherbe 30 less of what companies charge for the flu vaccine. Haslinda still ahead, china could retaliate to the closure of its in houston. My President Trump it might last be the last laugh. The fight for survival. We will discuss the outlook with. He chairman this is bloomberg. Haslinda china is vowing to retaliate for the u. S. Ordering the closure of its consulate in houston. The state Department Says it is being done to protect American Intellectual property and private information. President trump indicated more moves may happen. As far astrump closing additional embassies, its always possible. You see whats going on. We thought there was a fire in the one that we just closed. Everybody said theres a fire, there is a fire. I guess they were burning documents and papers and i wonder what thats all about. Beijing denounced the move saying it bans firm countermeasures or court against washington. We are joined now from beijing. The reaction in beijing so far has been one of disbelief, one of outrage, state media has obviously followed up with the fallout from the Foreign Ministry statement condemning the most also condemn the global times that has come out and blamed. They think the move on Political Considerations for the white house, they have called the explanation that the state Department Gave about protecting ip and information about u. S. Citizens, they called it a lame excuse. Rishaad haslinda haslinda people are wondering how china will retaliate. And it, how will it, whether the phase one trade deal is in jeopardy . John i think the majority of the speculation we have not had an official response as to how beijing will respond, but the speculation has been that one of the consulates that the u. S. Has in china, the u. S. Has five in addition to the embassy in beijing. One of those would obviously be closed. It pertains to the trade one phase deal. So far, as recently as last deals have continued to be done. The chinese are still buying u. S. Farm goods. I would suspect that as long as that continues to happen, it should tell us that the deal is continuing. John, it does seem that both sides have become more vocal, not just with each other, but to other countries as well. Particularly in the case of china and that about the u. S. Does it show that they are not in charge just in washington, but also in beijing . Think the overall dynamics of the relationship are far more competitive, far more confrontational, thats for sure. I think that is a pretty good indication that the hawks are in descendents. We had an accident article from our colleagues in washington about how secretary of state mike pompeo has really been leading this charge in the administration in the more hawkish wing of the administration by taking a harder stance. As the u. S. Takes a more aggressive stance, that fuels the hawkish wing of the Chinese Government. You could see a reciprocal, upping the ante by the chinese. What you risk is this very bad titfortat that just ask that dust that just escalates. Haslinda still to come, we will discuss hong kongs fight for survival, as virus measures bring new threats to the restaurant sector. Bringing inrity law the resolution. This is bloomberg. Haslinda lets do a quick check of the latest business flash headlines. Postedpmaker has secondquarter numbers that top the highest estimates. Operating profit was 1. 6 billion in the data sent to clients and consul members ordered memory chips to be surge and demand for people stuck at home in this coronavirus. Despite the big numbers, hynix has yet to fully recover from a difficult one he 19. Softbanks Semiconductor Unit is said to be attracting pay cover interest from the chipmaker. They have been exploring options to sell part or all of its stake , which it bought for 32 billion in 2016. And they are said to have made an approach in recent weeks. Could be the biggest ever deal in the semiconductor industry. Lets have a look at where we are market wise, then we have chinese stocks under pressure. Seeing the shanghai composite down 7. 2 . 73 . Looking at this negative mood out there at the moment. Even though we have some people coming out and saying this is a definite time to be buying chinese equities, even though valuations are steepening. Really thatolitics before. We have the ministry of finance coming up that said the state owned Enterprises Revenues were up 7. 1 year on year in june. That should feed into well of whats been happening in terms of profits and the like. That should also inform us about an improvement in gdp. It is this spat with washington that has been weighing things down when it comes to the trading day in china. They are headed after the lunch shenzhen. Hanghai and this is bloomberg. Haslinda a gloomy lion city this thursday. We are in the middle of the trading day. We have singapore appealing to its own people to support a battered hospitality sector in a bid to limit job losses. Singapore launching a 33 million Domestic Travel campaign called singapore rediscovers. This is its biggest ever to boost local spending. The tourism board is hoping to avoid major job losses. E have the sti currently up half a percent. Global coronavirus cases have no topped 15 million now topped 15 million. Infections surged in the asia pac. California stepped past new york in total infections as countrywide cases increase almost 2 . Fatality rates hit a daily record in indonesia with australia also setting a new high. Worldwide covid19 deaths are approaching 620,000. Hong kong reported a record 102 new local virus cases in what they call the citys most severe situation prompting Health Officials to expand protection measures. More than half of new infections are not linked to previous cases, with untraceable spikes signaling hidden transmission is widespread. Food and Health Secretary says the epidemic has reached its most severe moment. Japan is raising its view of the economy for a second month, saying conditions are picking up while warnings that the situation remains severe. The latest report sees improvement in six of 14 categories including consumption, exports production and public investment. It describes overall conditions as severe, although that is better than extremely severe description back in june. The European Central bank is said to be leaning toward asking banks to delay dividends this year, weakening hopes that payouts could resume in the next quarter. Sources tell us members of the Supervisory Board dont see enough in the Single Market economy to justify lenders returning capital. No decision has yet been made. The ecb declined to comment officially. Hong kong secretary for food and health has warned the Coronavirus Crisis is at its most severe moment. Joining us is simon wong, Kampery Group chairman. Thank you so much for joining us. How bad are things . We got another extension of restrictions on restaurants. They are hurting, arent they . Simon they are really hurting the business. After 6 00o business p. M. Every day until 5 00 a. M. In the morning. Doot of restaurants cannot any business and they have to close down their business or they have to operate their business in a sordid time. While i think some restaurants withdo daytime business dining in, but after 4 00 in the afternoon they would simply close down the business. After that, they see that the business is hurting them. There are not too many business. People are not willing to come out they dont walk on the streets. In july,t the business average, we are losing 3 billion hong kong dollars in business only in july. If the restriction continues and pose furthernt im restrictive measures, then the business of the catering business would drop. I heard that the government today might impose another restrictive measure such as not allowing people to dine in in daytime. That would further hurt the business. I foresee that the business may billionanother 2 business. That accounts for a total of 60 drop in the business. Canaad simon, how restaurants adapt . What strategies are they employing . Weeaway, and on top of that have Home Delivery coming to the fore. Simon can you hear me . Rishaad perfectly. Simon ok. I see some restaurants cannot do 6 00 p. M. Fter restaurants and because of the social distancing measures, they are not allowed to have more than four people at a table. Restaurantsof cannot do any business, they would just close down. Increase moreto business is to take away service. But not all the restaurants can do such business. At this time of the day, it is not easy for the small restaurants to open accounts. Like in the past week, there are already more than 1000 restaurants that closed down their business. They have seized operations. About 1000 restaurants would shorten their operating hours. They would close the business after 4 00 p. M. Or after 7 00 p. M. Sector is suffering very much from this strict measure. Residentsery quickly, could claim 10,000 hong kong dollars, myself included. Did you see any of that end up in the coffers of restaurants at all . Everybody expecting to receive the 10,000 cash from the government. Gradually we have already received the money since early july. We all expect that the money would go to the catering and also the retail industry. About 35 billion hong theg dollars may go to catering and retail industry. Because of the third wave of the hope is hone. Is gone. It seems people are not willing to spend their money at the moment. Hope the strict measures imposed by the government can help to contain the pandemic spreading. Such strict measures, we dont count on july anymore. We might have a good chance to recover a little bit in august, as august is the summer time and people are willing to spend the money in catering and in retail. Haslinda if people are not willing to spend their money right now, how else can the government help support the Hospitality Industry . What do you hope to see . Simon before the government has wrote out two relief funds. There is also an employment saves enterprises to lay off people. Is quite successful in the way the government assisted enterprises with 50 of the salary. The the third wave of situation of the pandemic, i see the business is actually suffering a lot. I hope the government will roll out a third round of relief funds. There is 8 billion hong kong dollars relief fund which is approved before. It hasnt been used. To can immediately use it relieve the Current Situation of the affected industries. Haslinda with the National Security law, we are also beginning to see expats leaving hong kong. Is that impacting business in any way . A heavy dont see situation. His of course, there are some people but i dont kong, see the situatn is too worse. Money see that a lot of actually is flowing into hong kong in the stock market and also in the financial sector. Situation, first of all, china is still helping hong kong. The whole situation is not as was mentioned in other places. I have confidence in hong kong. I still do a lot of investment in hong kong and china. Haslinda simon wong, chairman of Kampery Group. Thank you so much for your insight today. As the world tops 50 million covid19 infections, the race for treatment is heating up. A recent report found covid antibodies fade rapidly, raising concerns over the durability of a vaccine and lost immunity. A Johns Hopkins University Assistant professor of emergency medicine talked about what they know about antibodies so far. We are working really hard to understand the difference between antibodies created by a natural infection and antibodies created by these vaccine candidates. Othert vaccine trials, in infections, we see antibodies produced in this first phase one and two that these vaccine trials are in, but it doesnt always mean we conferred protection. As we do more work on collecting data around these neutralizing antibodies in particular, we will understand better, particularly when we get to phase three of these vaccines, whether or not these antibodies mean people are protected. Can we be protected from covid19 with t cells even if an individual does not have the antibodies . Lauren there is a lot of work happening with t cells versus antibody response. In a traditional vaccine landscape, you would spend several years trying to figure out if the vaccine itself needs to be good at producing antibodies in the body or if we have to induce t cells or if you have some combination of the two. Right now we dont have that timetable, so we are Going Forward with these approaches that the astrazeneca and mrna vaccine that we just heard about last week. I think we will find out as we move forward. A lot of people are working on the t cell experiments, but we need a little bit of time to understand how they both work in the body. Francine there was quite a lot of hype about these vaccine trials that were successful. How far away are we from making sure these vaccines are safe and usable . Lauren we have a few candidates, which is incredibly promising and incredibly fast. We have seen vaccines in other infections. When you get to phase three, that space where you are seeing, does this broadly protect the population and can we move this into largescale production and get a vaccine out to the world . Sometimes in that phase three we dont get that brought production that we need to have broad protection that we need to have a successful vaccine. The safety data looked good. There are still some adverse events in these vaccines. As we move to phase three, we have three promising vaccine candidates right now, which is incredibly good. Sauer, that was lauren Johns Hopkins University Assistant professor of emergency medicine. The Johns Hopkins Bloomberg School of Public Health is supported by bloomberg philanthropy. Tesla extending its quarterly profit streak, putting it in the fast lane to become part of the s p 500. Details on the way next. This is bloomberg. Rishaad lets have a look at what is going on with indian markets. This is a day where we are seeing a winning streak erased, at least on the sensex. The nifty banking index down by 3 10 of 1 . One stock we are flagging up at the moment is yes bank, down at the moment 20 of the session. A share price of 14 rupees. Its fpo achieved its minimum required subscription, which means we do have people at the moment buying this offering. That is what we have. This is a follow on public offer driving book value per share down. That is why we are seeing this stock under severe pressure. Titansa two tech reported earnings after the bell in new york. Tesla posted a fourth conservative quarterly profit, a milestone that paves the way for the company to join the s p 500 index. Microsoft saw shares fall on slowed sales of Cloud Services. Lets start with tesla. Seems like the path is clear for it to join the s p. Su that definitely helped push the stock higher in the extended session. This had been a make or break Earnings Report for tesla because the insane rally in the stock had already priced in the Fourth Quarter profit. They did deliver on that expectation. It was a strong report when you consider tesla overcame a sevenweek pandemic related shutdown that posted surprising 104 million profit for the Second Quarter. They exceeded expectations. Revenue better than 6 billion. Earnings per share, a . 50 profit versus an expected loss. They say half a million vehicles will be delivered on target this year. The first deliveries are expected to occur in 2021. If you look at the big picture of the stock, it quadrupled since march due in part to the expectation that it would qualify to enter the s p 500, a more prestigious index. Hugelon musk unlocked a chunk of pay for his performance. [indiscernible] if he were able to catch them out today cash them out today, would be worth more than 2 billion. They plan to build a Vehicle Assembly plant in texas. His focus Going Forward would be to make a more affordable car. He says it bugs him that most people cant afford it and he wants to fix that. Rishaad tell us about microsoft, su. Quite a different story. A disappointment on the Cloud Services front. Was it simply people being too optimistic . Su very optimistic. They were looking for much stronger growth in the Cloud Business. Microsoft did not reach that very high bar. That is why the stock fell 2. 5 in extended trading. On sales of the Cloud Services, they were up, but that was less than the lofty 49 projection of analysts. To 30, sales rose 13 billion. Not too shabby. Some of the bulls were looking for much more beat. Results showed substitution in Cloud Services continuing to grow as more work from home, it was not enough for the investors. Meanwhile, we are seeing economic weakness. Haslinda su . Su keenan in new york. Still to come on the show, a hong kong chief executive carrie lam announced big plans to make the city a global media for arbitration. A lot has changed in 12 months. Next, we look at the erosion of trust in hong kongs legal system as companies bypass the city for paris and london. This is bloomberg. Rishaad hong kong is losing out to london, paris, and singapore as the jurisdiction disputes arbitration. It is a sign chinas new National Security law eroded trust in the territorys legal system. Our Senior Editor for asia has more. How did hong kong build up such a strong niche for arbitration in the first place . It is one of the hallmarks of hong kong that made it such an important Financial Services hub, the rule of law. Biggeste of the arbitration businesses in the world. Rather than go through a court process, companies go to these independent arbiters. They settle privately. Last year alone hong kong did about 308 of these cases. It has been an important center for hong kong. That is now under threat with the National Security law. Haslinda talk to us more about that. How does the new security law threaten that business . David it really adds a layer of uncertainty, as we reported many times. There are vaguely worded statutes in that law that carry potential life sentences for subversion of state power and collusion with foreign entities. It is a particular concern as it relates to chinese companies. If an arbiter were settling a dispute with chinese companies, mainly state owned, how independent can this arbiter be in hong kong in the face of the new law . That is the concern we are hearing from a lot of lawyers. Mentioned the likes of paris, london, or singapore could benefit. Are we already seeing a shift . What other cities may well benefit . David certainly singapore seems to be the obvious one. As we reported, there have been several signs of both capital and talent moving from hong kong to singapore. This may be another example. Several lawyers we have been speaking to saying singapore makes a lot more sense all of a sudden because of that independence. In the last couple years, we have seen a shift already to singapore from hong kong. This may just accelerate that trend. Haslinda asia finance Senior Editor david scnlan. Lets do a quick check of the latest headlines. A chinese fintech giant is looking to raise at least 3 billion in a u. S. Share sale. Bank of america, ubs and Goldman Sachs are among banks preparing the offering, which could happen as early as this year. Lufax previously explored a listing in hong kong and geopolitical tensions between the u. S. And china could affect its final decision. The former head of a collapsed german wire payments has been arrested on claims he and other executives hid losses. Prosecutors say he and two colleagues conspired to attain the equivalent of 7. 3 billion in fraudulent loans. They allegedly inflated the books with fake assets to make wirecard seem more attractive to investors. We are going to be talking about Monetary Policy, where does it go next . We will be chatting with the former new york fed president coming up it 8 30 p. M. Hong kong time. In new york. Haslinda that is it from Bloomberg Markets asia. Keep it here with us. Plenty more to come. This is bloomberg. 49. 50 i found you good job. Now im gonna stay here and you go hide. Watch your favorites from anywhere in the house with the Xfinity Stream app. Free with your xfinity service. Now any room can be a tv room. Stream live tv, on demand shows and movies even your dvr recordings. Download the Xfinity Stream app today to stream the entertainment you love. Xfinity. The future of awesome. Announcer the following is a paid presentation brought to you by rare collectibles tv. The 10 indianhead gold eagle containing nearly half of an ounce of pure gold is one of only two coins legendary sculptor augustus saintgaudens was responsible for designing. The inception of this stunning coin began with Theodore Roosevelts famous letter to secretary of treasury shaw on december 27, 1904. This letter blatantly states, i think our e

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