Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240712

On china. Sources say curbs on jack mas group over concerns on National Security. Shery we are getting south koreas current account balance numbers and the surplus right now narrowing the month of august from july, coming in at 6. 56 billion. This is a little bit of a narrowing from that 7. 5 billion we saw in the month of july. The balance widening. The surplus coming in at 7. 0 2 7. 02on dollars and billion dollars and this is widening from the previous month. When it comes to export numbers, we have seen the plunge easing a little bit and in september, south koreas exports rising for the first time in seven months and we are seeing the goods balance surplus widening a little bit, haidi. Haidi take a look at the open we are setting up in the first few minutes of trade here in australia. We have seen that bounce following the super expansionary budget that was delivered this week by the federal government. The asx in the previous session closing at a one month high on those budget expectations that there will be beneficiaries from everything from Retail Stocks to infrastructure and financials. We are seeing upside at. 25 as we get a flurry of increasingly positive analyst views on aussie stocks. We have had months now of range bound trading. The nation continuing to recover from the pandemic and sinking into its first recession in 30 years. The ratio stock upgrades paused the longterm average for the First Time Since march. We will continue to watch whether that optimism continues. In the meantime, the aussie dollar on the back foot at the moment. 71. 37 after what was a bit of a bounce around kind of session for the greenback overnight as potential stimulus. Continuing to watch aussie bonds as well, falling back in terms of that rally, the threeyear retreating from that record low. Shery the futures market looking muted. Getting. 1 . Nikkei futures unchanged. Hang seng futures. Wti crude, about 40 a barrel after it fell below that level. U. S. Stockpiles rising again. The big news tonight and the focus will be on the start of the Vice President ial debate so lets head over to Salt Lake City where our chief washington correspondent, Kevin Cirilli, is standing by in Salt Lake City with the latest. Kevin, what do you have for us . Kevin 90 minutes, nine topics, 10 minutes a pop. They will be standing apart from one another. Susan page moderates. Based on sources from both campaign, this debate will be hopefully a little bit more policy oriented but big topics are coming up for mike pence. It is defending the response of the administration with regards to covid19. He was one of the leading forces, the leader of the Coronavirus Task force inside of President Trumps administration. For senator Kamala Harris, a reintroduction of sorts for a national audience. Plus, with age being such an issue in this race, both of the sides are going to have to pass the commanderinchief test, being a heartbeat away from the presidency. Other issues anticipated to come up, the contentious judicial nomination process for judge Amy Coney Barrett and fiscal stimulus talks. Economic recovery. The fiscal stimulus talks stalling on capitol hill. Stalling but not yet dead. Where are we at in the stimulus saga . Kevin there was bewilderment and befuddlement with the sources i spoke with on both sides of the aisle as they try and keep up with President Trump and Speaker Pelosi, both sides pointing fingers at each other. President trump said they could pass a piecemeal approach deal. Small businesses as well as the Airline Industry right away. Speaker pelosi said she wants to see much more Government Spending and she wants to see it happen very quickly. She will be speaking to david westin tomorrow. Speaker pelosi will give that interview. Either way, its looking increasingly likely that more additional fiscal stimulus will have to be punted until after the election. The markets starting to react to that, starting to bake that into some of their expectations. Taking avin cirilli look ahead to the Vice President ial debate. We will be back with him shortly. Our next guest is not expecting any stimulus before the u. S. Election but he sees a Silver Lining being a democratic sweep when more stimulus arrives after the vote. According to some strategists we have been speaking to at bloomberg, a democrat sweep would boost asian equities as well. Lets bring in our guest. He joins us from melbourne. If you get a democratic victory, the swell of more generous stimulus that comes after that means a boon for asian equities, not so much for the regions bond markets. More or less. I think that is actually what the market is positioning for at the moment, this sort of blue wave ahead of this particular election. Right now, if you look at what is happening in small caps in the United States, we are seeing breakevens again. A general up swell in value stocks which i suppose you directly alluded to with potential benefits to the broader asian region. We are seeing a market position for that dynamic come into the election. We are still looking at a contested result. Are pricing in a blue wave, a bigger round of stimulus, and that is good for this Global Growth narrative. In that case, key to this idea of better times after november with the democratic ens trades less tensions with china. Does that mean a continued outperformance in chinese equities . Kyle i think it does. Mediumterm, we are looking at a market in china that will probably be a little bit more volatile, that will probably outperform on a basis that they are one of the few economies in the world that are showing clear signs of a major recovery. That is tied back to the virus and also the way they have decided to stimulate their economy out of the recession. A bite and victory, on balance, again, more in the short to mediumterm, will be a benefit for chinese equities and chinese assets more broadly on the basis that we are probably going to from little less pressure the fund. The Global Political environment that will try and move back to more beneficial for trade war broadly. Its another one the markets are probably pricing in at the moment as an extension of this flu wave narrative that is taking hold and most certainly relates to the trade war in the short to mediumterm. Release ifl pressure you see a bite in victory. Shery what are we seeing in terms of assets . The commodities space. If we continue to see the rebound in china, how would you position . Kyle i think at the moment, the best way to really play any real islation reflation trade on chinas economic rebound and positioning around away they are attempting to each near engineer their economic rebound. The west is a supplyside story. Trying to lead towards that industrial rebound that is unfolding in china and will probably continue if chinese policymakers reach herself mandate objectives. We are looking constructively on proper prices as continuing to push higher. The australian versus the toanese yen will really lead the chinese growth story. Anything that really does i suppose link itself to that Chinese Industrial recovery is probably where you will be able play more or less the fundamental growth story that will drive the Global Economic rebound. Shery how much of a boost with provide . Llar we have seen periods of strength for the greenback as well. I think the weaker dollar will be a tailwind for the Global Economy because of its effect on emerging markets. There will be all sorts of issues as it relates to rebounds in japan, rebounds in europe, as it relates to, you know, that export led recovery that those economies are gearing towards. A big part of the Dollar Strength recently is tied back to the weakness. Was a a long trade which long euro trade recently which is being unwound in the shortterm as we do price out stimulus before the u. S. Election but on the basis that the market is pricing in this blue wave, that kind of cyclical trend will continue and then that euro strength that we see will be driven by that sort of strength we are seeing in Chinese Business activities so that dollar is bouncing bang around at the moment. It is a choppy market more broadly speaking and we could potentially see some upside heading into the election. That downtrend in the u. S. Dollar could be in play. With yourant to end views on whether we could see a breakout for australian equities following the expansionary budget. On thelook at the chart bloomberg terminal. Positive analyst views are starting to pick up and it could potentially mean that we break out of the range bound situation. We have the asx testing. For theat we are seeing positive uptrend, upgrades versus downgrades, is it enough to drive this higher . Kyle it will be one part of the story. What we have seen over the last couple of days is that very expansionary budget feeding into some of the areas of the market, to strengthen areas of the market that have been under loved recently, the consumer stocks, and more importantly, the banks. Globally,t to see it the asx 200 being positively correlated to the past as well as a bit of a pickup in animal spirits generated by the budget, probably at the margins, some support from the rba, then you will start to look at that level as i see it, as being a key level to watch. Thats probably a q we are looking cue we are looking to push further to the upside. Great having you on. Coming up, the Trump Administration takes aim at two Major Chinese payment platforms over National Security concerns. Tencentst on ant and next. We will analyze the results with idc Senior Analyst later in the show. This is bloomberg. Haidi lets get you a check of the first word headlines. Brexit talks appear to be on the verge of collapse with the u. K. Government saying it will walk away next week if there is no clear deal within reach. Sterling array scans on the news which came after the e. U. Indicated it would test Boris Johnsons resolve over its selfimposed deadline. He said red lines on the brexit trade deal cannot be crossed and it is prepared to call johnsons bluff. A new report from the World Bank Says the coronavirus pandemic is expected to raise global poverty this year for the First Time Since the Asian Financial crisis in the late 1990s. Covid19 will push at least 100 Million People into extreme poverty with total potentially rising 50 by the end of 2021. The world bank defines extreme poverty as People Living on less than 1. 90 per day. Organizers of the Tokyo Olympics say they have found almost 300 million of cost savings as athletes prepare for the delayed games. The report removes some of the traditional frills from next years games. A National Audit indicated the true cost of the games may be twice as high as the official number. Those are your first word headlines for the day. Shery the Trump Administration is keeping up the pressure on china, exploring potential restrictions on tencent and jack mas and group. Sources say the white house is concerned there payment apps threatened rest National Security. The Foreign Policy reporter broke the story. Tempeactly do alipay and threaten American Security here . The analogy that Administration Officials have drawn for us is when you think about what the administration did against huawei in the five space, they dont want huawei to be part of the rollout, thats what they see the threat and the Digital Payment space as. They see this as a booming industry. Its an area where the u. S. Has lagged china by five years to 10 years, and what they are seeing is what they believe is an encroachment in the u. S. And chinesehe world by technology and innovation and what they are saying is, listen, when you have a company like alipay or alibaba or and group, who knows what will happen with that data. It could end up in the hands of the communist party, so we want to nip that in the bud now and make sure that these Digital Payment platforms dont become so dominant that consumers essentially have no choice. Theres a whole group of people who say that this is overly alarmist and unnecessary, but that is where we see the debate taking shape within the administration. This likely to happen soon, and when will chinas response come in potentially, and what are we likely to hear from beijing . Kyle a couple of things for that. These discussions are still at an early stage. According to the folks i spoke with, unlikely anything would happen before the election so thats obviously a big factor to take into account, but what you are also seeing is the administration wants to essentially send a message to a lot of american Institutional Investors that are thinking of investing in the and group ipo thats going to happen in hong kong and shanghai in the next few weeks, expecting to be possibly the biggest ipo in history. Listen, you should know what you potentially getting into if you put money into and group. We may be going after them. This is clearly also a signal from the administration that investors need to be wary. As for the response for beijing, the folks i talked to say this could be on a level far exceeding anything we have seen so far because of the fact that alibaba and and group are so interwoven in Chinese Society and seen as such a success story. Tiktok is such a new thing. Alipay has been around for years. That takes this fight to a whole different level. Shery we are focused very much on tonights Vice President ial debate. Given all of this pressure on china, does it matter at this point who gets into the white house on november 3 . Who gets elected . It seems to be a bipartisan issue when it comes to china. Nick its a great question and something we have all been trying to figure out. There is no question that on both sides of the aisle in the United States, there is a much more negative, hostile tone towards china, and indeed, one of the things the administration does seem to be wanting to do with this and group idea is sort of salting the earth behind them, putting in place sanctions that would be politically difficult for the potential Biden Administration to lift. If we do this now, it would be harder for them to undo it. Theres no question that both sides see National Security nexus between Chinese Technology Companies Like huawei, like and, ant, like tiktok. Concern that companies would have no choice but to turn over data. That is a view that is shared on both sides and while a binding administration Biden Administration would likely be less extreme, theres no question that it would still be very hawkish in the way to purchase beijing. Haidi our bloomberg Foreign Policy reporter with us. Coming up next, President Trump says getting covid was a blessing in disguise. We have the details, next. This is bloomberg. Haidi we are hearing now breaking news the australian Prime Minister announcing he has nominated his outgoing finance minister, matias korman, to the oecd, to replace the outgoing representative. Korman is the longestserving finance minister. We spoke to him not 24 hours prior and did ask him about this he stayed very mom about this. He stayed very mum. Things are in his favor. He is multilingual, he holds a belgian passport. We watched keenly the race to lead the oecd. Nominated already someone. Sweden nominated cecelia maelstrom for that post as well. The race is starting to get quite dizzy there. President trump in the meantime recovering from covid19, says he feels great and it was a blessing from god that he caught covid so he could see the value of the therapeutics he was given. He then called regenerons Covid Treatment a cure. Pres. Trump its a cure. For me, i walked in, i did not feel good. 24 hours later, i was feeling great. I went to get out of the hospital. That is what i want for everybody. Want everybody to be given the same treatment as your president. Haidi the white house doctor said on wednesday that trump had been free from virus symptoms for more than 24 hours and without a fever for more than four days. Therefore clearing him to return to the white house and the oval office. Told bloomberg about the steps taken to keep the president healthy, calling them extraordinary, but that it is important to remember Public Health steps like wearing a mask, are vital for the greater population. Lauren we have all of this evidence that shows us how we can protect ourselves and when we do not use that evidence, we see what happens. We are seeing this cluster from the white house, possibly even a super spreading event, and it shows us testing alone does not work. Testing works in tandem with facial coverings like masks and social distancing and being careful. Haidi the image that is being painted, lauren, is that the white house is not even following the protocol that the cdc set out. Are you worried that others looking at the white house will also not follow the protocol or abandon the protocol . Lauren absolutely. I think it is already happening. I think the idea that the president comes home while he is almost 100 likely still infectious, and takes his mask off while people are close by him, its really concerning, and i think it just demonstrates that these lessons are not being learned in the way that they need to be to recover from covid or be in the process of recovering from covid and still not seem to understand how important that mask is to protect not just you but the staff around you, your personnel, the people who are keeping you safe and healthy at your own home. Its hard to watch. I think the hope is that people will not Pay Attention to that as much as they will Pay Attention to the fact that his care and all of the steps that were taken to get him better were extraordinary. And that people are still dying all around us of covid and that, you know, we have long surpassed that 200,000 deaths, and its going to keep happening unless we follow these basic Public Health principles. Francine how do we get american citizens to reengage with science and scientists, given how the president has behaved . Lauren i think we were all hoping that he would become a messenger of that science and how important it is to follow those basic principles. I think we keep doing what we are doing. We keep talking about the importance for social distancing of the staying home when you dont need to go out, of the masking. We move forward with the science. The fda has just on that even though they were sort of waiting and worrying that the white house would hold up there more stringent guidance on the vaccine process. They have put it out. They included it in a document. I think everyone is trying to push forward with that science, saying this is what we know works. As we continue to build our toolkit, we have to rely on what the data and information that we already have it. That was John Hopkins University assistant professor of emergency medicine, lauren sauer. Johns Hopkins Bloomberg school of Public Health is supported by michael bloomberg, founder of bloomberg lp and bloomberg philanthropys. Coming up, we cross to hear from pence stand in for Kamala Harris debate preparations. This is bloomberg. Haidi we do continue to have breaking news when it comes to a Cabinet Reshuffle in australia. Got morrison in his announcement just now announced that the trade minister, simon birmingham, will be replacing the outgoing finance minister, matias korman, as the new finance minister post the end of the year. We know much ts korman has been nominated by the Prime Minister for the oecd secretarygeneral role so throwing his hat into the ring for that leadership role. We are still awaiting now to hear who will become the new trade minister here in australia. In the meantime, we are 19 minutes out from the start of the Vice President ial debate. Lets head over to Salt Lake City where our chief washington correspondent, Kevin Cirilli, he is standing by with a very special guest. Kevin. Kevin thank you, we are here with pete buttigieg. Actually portrayed mike harris in prepping for todays debate. What will we see . Pete a chance for senator harris to address the American People directly, away from the Trump Twitter noise machine and speak to the issues that are really on our minds as a country. First and foremost, how are we ashley going to end this pandemic that the administration failed to contain, bring back an economy that works for everybody, with so Many Americans getting blow after blow, especially with this latest news that the president is walking away from negotiations on relief. These are the things most people are wanting to hear about. Therell will be a lot of talking points for mike pence. He is a very effective debater after years as a radio host and a lot of times in politics. Looking forward to this conversation. Kevin what would a fighting administration Biden Administration due to an this pandemic end this pandemic . Pete you see a much more robust and clear plan on testing and vaccine development. He would also see Clear Communication about what we americans are supposed to do. Thats getting our act together on masking alone might save 100,000 lives. That is almost impossible to do if mayors or a local Public Health officials or governors are being contradicted by a president of the United States mocking mask wearing. Thats one of the unofficial roles of the presidency, communicating clearly, in addition to all of the administrative work that has to be improved before its too late. Kevin he got elected in a state that is conservative. Some are concerned senator harris would be too far to the left and move nominee biden too far to the left, especially pertaining to issues on rebuilding the economy. How does she navigate through that without really pushing away so much of the Business Committee . Pete the opportunity right now is to build an economy thats going to work for all of us. One thing that is revealing is moodys scored the two campaigns and found that a Bidenharris Administration would be much better for the economy. This is a debate that we absolutely welcome and what i think the American People really deserve to hear because theres a lot of talk on their side about the economy. The results has been disastrous. Kevin you mention about the stimulus talks in washington, d. C. The Biden Administration has proposed increasing the Corporate Tax rate from 21 to 28 . They promised much more infrastructure spending. How does that balance and how would senator harris how does she push back . You know Vice President pence is going to say you want to raise taxes. Pete the vast majority of americans already agree with us that the wealthiest corporations ought to pay their fair share of taxes. Look at how much better growth was during periods where the tax code was fair and we were making those crucial Infrastructure Investments and other investments in education, health, and so on, that are really what it takes for an economy to grow. We know what it will take to restore american competitiveness. It does not just come out of nowhere. It requires real investment. We are capable of delivering that with commonsense adjustments to the tax code to make it fairer than it has been. The top 1 , many of them, including the president , pay an effective tax that is lower than schoolteachers. That is no way to fund the urgent needs of keeping our economy fair. Kevin trade policy is so important. You have spoken about this in terms of negotiating with china. The republicans have really attacked joe biden, especially on the issue of china. Would tariffs still be on the table in a Biden Administration and what you say to middleclass workers who are swing voters and say china has been eating our lunch for too long . Pete this is a big problem in the industrial midwest. China is eating our breakfast, lunch, and dinner under President Trump. Its clear that the Chinese Communist party is running circles around this president , who thinks he is a great negotiator, but lost a trade war with terrible consequences for consumers, performers around where i live, for manufacturing. What we are going to have with joe biden and Kamala Harris in office is an actual strategy for dealing with china. If you want to deal with china, you have to have friends. This president has never missed an opportunity to alienate our allies. It will be a reverse. Kevin there is a historic nature to senator harriss candidacy for vice presidency. Can you pass the commander in chief test . Based upon your experiences with her, what have you learned, and as she passed the commanderinchief test . Pete he definitely does, having served in the military, and having come to respect her even more during the time we competed. She is experienced, served on the Senate Intelligence committee, she has been to war zones, but she also understands how to make tough decisions. She was leading in california the Largest Department of justice in the u. S. Describes the besides the u. S. Department of justice. She is a great complement to joe biden. I think she will do a great job for the American People. Kevin are you optimistic that Speaker Pelosi and the white house can get a deal on airlines . Pete i hope so, but with this white house, you just dont know. Thats exactly the kind of uncertainty that has made it difficult not just for investors, but for ordinary americans who could do without chaos and confusion. Kevin mayor judy judge mayor buttigieg played mike pence. Shery chief washington correspondent Kevin Cirilli there. We will have plenty more coming up and we will hear from Trump Campaign Senior Advisor richard in the next hour. That is ahead of our special coverage of the Vice President ial debate from 8 a. M. In hong kong, it 30 p. M. In new york. And 30 a. M. In new york 8 30 p. M. In new york. Sophie. What tradepshot of is looking like for tokyo. Markets ahead of the open. Nikkei futures in singapore opening to the upside while the yen is trading slightly weaker, testing the 106 level with the focus on the Vice President ial debate in the u. S. , and with that, s p eminis are adding. 2 , this after the benchmark rose to a one month high with amazon meeting those gains. In wellington, we are seeing the nzx up by 1 and the asx 200 extending gains. Analysts are turning more positive on australian stocks. Bestave zip among the gainers in sydney so far, seeing a boost to consumption. Searching out the board for some of the other movers of note in sydney, i want to highlight sand fire resources, the gold and copper miner are gaining ground after goldman raised the stock to neutral. We are seeing csl gaining ground this morning. The company had a deal, thelized the vaccine with Australian Government for a covid19 vaccine developed by the university of queensland. Lets switch out the board to check on australian fuel refineries. Ass company formally known caltex australia. It could decide to close its facility in queensland as we are seeing a drop in demand for oil products. Undernergy pressure. Recall that last month, it had concerns around its refining business. Its Facility Services the victorian state for more than half of its refining needs, haidi. Haidi this is bloomberg. Shery we have breaking news out of south korea. We are getting Third Quarter preliminary numbers out of samsung. They are coming in with their Third Quarter operating profit at 12. 3 trillion won which is much better than expected. The estimate by analysts was around 10 trillion won. When it comes to their sales, 66 trillion won, also better than expected. This comes as a pulmonary number and we do not have the net income or breakout of divisional performance, but when it comes to their operating profit, coming in above expectations at 12. 3 trillion won, this as we have seen that surge in demand when it comes to Samsung Smart phones, huawei has competitive disadvantages at the moment and analysts were expecting samsung to do very well. We dont have the divisional breakout right now, but the expectation is the Third Quarter was helped by its new note series. Their memory chip profit could have moderated a little bit. Still, the expectation is for shipment growth and we are seeing those Third Quarter operating profit numbers pulmonary results coming in at 12. 3 trillion won higher and better than expected. We will have analysis on samsungs earnings in just a moment with ibc Senior Analyst. She has the reaction to these results, haidi. Haidi lets get a check of the first word headlines. In the meantime, President Trump is back in the oval Office Despite continuing to be treated for covid19 and being potentially contagious. His doctor says he has not experienced any symptoms in the past 20 four hours, having been discharged from walter reed on monday. President trump has been speaking about his experience and says he did not have to go to hospital. He did so on the advice of medical experts. Pres. Trump spent four days there and did not have to. I could have stayed at the white house but the doctor said because you are president , lets do it. I said fine. You tell me what to do and i will listen. Tourism revenue collapsed in august as the coronavirus hammered demand for travel. Fell 73 ,y foreigners the seventh consecutive 7. 5 of all services. We are talking about korea, down 20 in 2019. Korean travelers to spend a fraction under 1 billion abroad. Down from 65 from last year. Expected, the wto has named two favorites to succeed Roberta Azevedo as leader. The trade minister and former nigerian finance chief will contest the post with the wto set for its first female boss in a 25 year history. The organization will announce a new director general after the election. Those are your first word headlines. Samsung Electronics Just announcing those preliminary Third Quarter operating profit and revenue numbers. Both beating estimates. The operating profit number, 12. 3 trillion won. Lets have a median analysis from the Senior Research manager. What do you think of the numbers . We dont have the divisional performance as of yet. We were expecting them to actually do pretty well. The expectation was for handsets to have done well given huaweis problems. What are we seeing . A good quarter for samsung. Even the new contrasts the business has been getting over the past couple of months. Up period in samsung in q2. Smartphone sales were at 54 million, which is low for samsung. In general, from the period of march to may, many countries were not happening. Once the markets opened up, there was a huge pentup demand. Divided samsung with smartphone shipments. They were barely able to meet demand. Given the economic challenges posed by covid19, it seems consumers would have been more interested in the low to mid priced range smartphones. What do they offer that is so appealing . Karenjit the new president has been focusing not only on the hold ap, granted it will key spot, but he has been looking at the low end. Couple in the period, starting from the lowend all the way up to 500. This is doing well in most of the markets, emerging markets, india, indonesia, or even the more developed markets. Haidi apple has finally set a release date in midoctober for his latest iphone. How much of a challenge does this pose to samsung . Karenjit if anything, i think it has only benefited it got pushed a little bit. He would see the new iphone coming in the market by the end of september, and now, it got pushed by a few weeks. People who wanted to buy the new iphones, they held up for it. I think more than that, it is probably scaling back, which would have benefited many players, including samsung and apple. Haidi to what extent, if you take a look at the company more broadly, can the upsurge that we have seen in smartphones make up for what is expected to be a softening in the chip is this chip business . Karenjit for the memory chip business, it did see some formative momentum leading up to the september 15 cut off date, so there was some stockpiling that took place. General, the demand for smartphones will probably stay strong through the holiday quarter. That has helped the consumer side of the memory chip business. On the business side, it is still a question mark on when the businesses are stocking up on the inventory. We expecting in the display business . We know that apple has delayed the launch of the iphone 12 this year. Karenjit i would consider that as a delay. Expecting, thee same happened in the q3. Q4 andetting pushed to to the q1 quarter. Delay rather a than a loss, it seems. You seehere do potential the new sort of areas for growth when it comes to samsung, geographically . We are going through a revival of consumer demand at the moment. Expect, i would samsung has been making a lot of effort in the emerging markets. They have more competitive lower end products. We see samsung coming up heavily. Lower endthers models. In the emerging markets, we see samsung stable, even in developed markets. Its interesting to see that samsung started launching some of their 5g phones in that category. Demand asush some well. Idc Senior Research reacting to that samsung thirdquarter results which were a beat across the board. Lets take a look at some of the data that has come out across the bloomberg when it comes to japan. We are seeing the trade balance, the balance of payments number coming through at just over ¥400 billion for the month of august. The current account surplus also theng in, and we are seeing current account surplus, the balance that has come in more of a surplus than was expected for august and improving on the previous month as well. We are also getting some numbers when it comes to foreign buying of japanese stocks, and that actually more than doubled in the month for the preliminary october period coming in at just over 530 ¥531 billion there. Shery all right, haidi. The Worlds Largest iron ore producers sticking with its annual output guidance as it attempts to recover from a tragic dam collapse. The cfo told us about the companys efforts to raise production levels and the potential deal with tesla. Look, the Automotive Companies will need a lot of nickel in the world is not prepared to supply that much. Tesla came to us to speak because also, most comes from jurisdictions that follow best practices in terms of esgs, and there is a road open for opportunities for mutual collaboration to develop those. When can we see an agreement . This can take some time yet because the pinch point where demand for nickel will outstrip supply for electric vehicles will not happen until maybe three or four years. When it comes to best practices, how far along are you in your negotiations to close collapseter of the dam with prosecutors . When can we see a definitive accord . Well, the negotiations are ongoing. It is a long road. Case, it took about two years for an agreement to be reached. There are multiple parties involved. State governments, federal government, prosecutors. It is a long and winding road. Everyone needs to be satisfied with the outcome. Shery will you be able to distribute your dividends as planned . Week, we paid a handsome dividend to our shareholders, beyond the minimum. Shery lets talk a little bit about your performance and the production side of things. Give us an update on where you are with your targets. When you look at export numbers, that is suggesting that perhaps you are a little bit behind on this years target. Are you stockpiling . Luciano in september, brazils shipments broke the record for the past four years. Without anticipating figures, i would say the markets have production is coming back. Target 310 to billion transfers this year. We are well short of our capabilities because we have several in care because of lack of disposal systems. There are many assets coming in on stream to recover that Production Capacity and supply the markets which are in need. Shery how much in need are they . What are you seeing in terms of chinese demand on the ground . Luciano demand is very strong. China is producing more than 3 million tons of steel aday for the past 60 to 90 days. It is an 8 increase. On the calendar year, the increase will be just 1 . Property demand is slowing down a little bit but manufacturing is picking up. O sales, construction there is some increase in inventories. There has been some restrictions on leveraging for Property Developers in place to prevent some speculation, but demand is very solid. In wintertime, it usually slows down, but from a very high base, and because of the lack of supply, we are seeing prices at close to secure heights. Shery does that mean you are expecting the 100 plus prices to be sustained . For how long . Luciano if you look at the forward curves, the market has been expecting prices to come down for a number of years now. And the logic has always been that at one point in time, china will slow down and supply will normalize. Although supply has slowly normalized, there is still a long way to go and chinese demand has been surprising on the upside, so this is a forecast that has never materialized more recently, but the forward curves still point downwards. The vale cfoas speaking to shery earlier. Lets get a quick check of the latest business flash headlines. Chevron has topped exxon mobil as the largest oil company. The close gave chevron a market of exxon. Onally ahead energy suffered in the coronavirus but chevron emerged with the strongest Balance Sheet in big oil. Asked week, it completed a 5 billion dollar takeover of noble energy. Covid19 is having a severe impact on ridehailing services. Is down around 50 from before the outbreak. However, john zimmer says that number is better than at the peak of the pandemic when ridehailing suffered a 75 fall. He says he expects to see more improvements with demand in toronto now back up to 80 . The impact to the Broader Market they were down 75 . We are halfway recovered across the board. That impacts individual drivers as well. Activist investors are calling on disney to permanently suspend dividends and direct funds to its streaming service, saying the company must adapt to a massive industry change. They have written to the disney ceo saying that the 3 billion in annual payments would be better spent on streaming and to double the budget for regional content at disney plus. Shery breaking news at the moment. We are hearing from the New York Times that the Trump Campaign is exploring having the president hold an event in pittsburgh on monday. Not a rally, but an event. The president has covid19. This is bloomberg. Welcome to day break asia. Im hamid hade. In sydney. Im shery ahn in nork. Asias major markets have opened for trade. Our top stories this hour, asian markets look to follow wall street higher on optimism of some kind of stimulus deal in washington. Democrats say theyre open to support for struggling airlines. Samsung is one to watch after beating estimates in the Third Quarter. Preliminary sales and profit both came in ahead of expectations. Net income was 20 ahead of forecasts. Nd a hard beat from the sofele oval office. Senator Kamala Harris and Vice President mike pence, we have expert analysis and live on bloomberg. Japan and south korea coming online. The nikkei and the fopix are doing at the moment. Theyre gaining. 3 . The topix up. 1 and Consumer Staples and materials leading the gains in japanese stocks. This as the japanese yen holds steady. And the weakest level in about four weeks against the u. S. Dollar. Take a look at what the kospi is doing. We had samsung, Third Quarter operating profit and sales beating estimates. And you are seeing samsung gaining 1. 3 at the open. Nd the kospi a huge chunk is samsung and gaining. 9 . And gaining ground for seven consecutive sessions. This will be the longest winning streak since august, haidi. Haidi yeah. We are seeing a buoyant picture across trading in this part of the world, too. You have australian stocks extending their longest winning streak in about three months. This as the i. S. X. Begin tries to test that 200day moving average. Were getting a number of more bullish calls when it comes to expectations for australian stocks on the back of that super expansionry budget that was delivered this week. And some expectation that finally maybe we can break out of the rangebound trading momentum that we have been stuck in for the past few months. Longest run of executive gains since early july. Were seeing the aussie dollar, 71. 34 and aussie threeyear yield bond rally taking a bit of a pause despite the ballooning deficit expected to be very good for the bond market there. New zealand were seeing upside of 1. 5 as a reminder, we get closer to the election there. Shery global Money Managers and strategists are ploog at a potential democratic sweep in u. S. Elections next month. And that could be a boone for stocks in asia. Credit suisse group and b. N. P. Paribas have asset management, see a biden presidency and democratic control of congress leading to substantial fiscal stimulus, reviving the economy and trade flows and all of that flowing into asian equities. Haidi lets get another take from sylvia jablonski, head of Capital Markets and institutional strategy at a. T. F. Dr. Adickes e sylvia, putting aside the fact that we have been tripped up polls and expectations into political events before, is this a narrative that rings true to you . Sylvia i think the biggest thing for the stock market is certainty. So i think that when we actually get an answer, and whether or not we see gridlock, will determine how the market goes. And what i mean if theres a democratic sweep youre going to have radical changes and shifts. Youre going to have big shifts, particularly in tax policy. Youre going to have to worry about energy, banks. But on the upside, youre probably going to have very aggressive stimulus which will help the markets. Perhaps better relation was china which could help the markets. Positive support for technology and clean energy. So it depends on which sector youre looking at. But the biggest overall message is the market wants certainty and an uncontested election. Shery in we do have so much central bank support globally, and the g. T. V. Charts showing global money flows. So really if the fed has your does ast in terms it really matter . Sylvia i think it matters because eventually that runs out. And the fed has made that very clear. So i think that the fed has put a nice floor into the market, rates are at alltime lows. Asset repurchases are being bounced up again. But we do have a troubled economy. We had a pandemic that we havent recovered from. Were not sure if its coming back. There are eight to 10 Million People unemployed depending on the number and how you sort of interpret it. And the fiscal policy is essentially key for some of the Service Industries out there. Thats something that the fed cant do a whole lot to help. So i i do agree with chairman powell that you probably need fiscal and Monetary Policy to work in unison, to really help both the economy and the market get them more in line. Shery on tech, there are a number of head winds and some long term and some more immediate and we potentially see more implications for tencent and National Security implications in the u. S. And of course also the antitrust probes that are putting the pressure on big tech in the u. S. To that extent, does that still make you optimistic when it comes to asian tech . Particularly some of the chinese and Hong Kong Listed tech names . Sylvia im still optimistic on tech globally. And the asian region, i think for a couple of reasons, you know, the growth of the Retail Consumer and online consumption in asia has just soared. And just in general, it seems like Chinese Markets have really recovered from the pandemic. You know, theyre really the only economy in the world right now just having a positive g. D. P. Growth, 3. 2 in the second quarter. Its projected to be 1 to 2 this year versus the rest of the world down 5 . So if i look at one of the chinese e. T. F. s out there, for example china tech related, e. T. F. , cweb up about 55 year to date because of the domestic demand and adoption of Online Retail and Chinese Technology. And also with everything going on, you know, weve heard a lot of a lot of talk from the Chinese Government around circulation and development of Domestic Technology and reliance on domestic product development. So i do think that technology will continue to grow. I think the same story is true in the states, though. Shery sylvia jablonski, head of institutional strategy at direxion investments. And were closing in on the start of the vicepresident ial debate. Due to begin at the top of the next hour. Lets head over to Salt Lake City now where our chief washington correspondent Kevin Cirelli is standing by with a special guest. Kevin. Kevin thank you, shery. Were here with the former ambassador to germany ric grenl and you also have been helping Vice President pence in terms of his preparation. What are we going to hear tonight from Vice President mike pence as he goes up against senator harris . Ric well, i think that Vice President is going to be himself. Hes an amazing guy who really cares very deeply about people. And hes going to try to do what the media hasnt done to Kamala Harris which is pin her down on some of these issues that she keeps avoiding. She hasnt really faced the media or scrutiny or talks since shes been nominated to be the Vice President on the ticket. So i think tonight that we really want to see her answers some questions and as you know shes most liberal senator and shes on a ticket with someone whos trying to not be the most liberal senator. And so theyve got some questions to ask and the media have some questions to ask of them. The American People want to know questions about whether or not she still feels like i. C. E. Officials are akin to the k. K. K. This is what she said. Shes been for open borders. I can tell you she is the absolute queen of the cancel culture. Im from california. Shes been our senator. She refuses to meet with republicans. She refuses to meet with constituents who are republicans, nominated by trump. Shes voted against gay republicans who are nominated by trump in droves. And so i just feel like she needs to answer some of these questions that the media just arent asking of her and shes trying to avoid. Kevin this is the first debate since the president has been diagnosed with covid19, first lady, other staffers at the white house. And the Vice President was the driving person leading the Coronavirus Task force. You know that senator harris is going to attack that record. How does the Vice President defend himself from those attacks, especially when so many staffers have contracted covid . Ric im not sure that you can blame donald trump or the white house or republicans for covid. I mean, what you have to be able to understand is that we have 17 intelligence agencies in the United States, all very different. All very complex. Its incredibly difficult for 17 of them to come together and agree on any one thing. And they did. 17 u. S. Intelligence agencies came together and agreed that the virus, covid19, started in wuhan, china. And that it really became a problem for the world because communist china has secret ways. This is the assessment of the intelligence community. I ask you why is it that Kamala Harris and joe biden never blamed china, never blamed china for this . This is a virus. Its shapeful that they somehow would turn this into a political issue when we know around the world, governments around the world are looking at bringing home their supply chain from china because they are feeling we cant ever be in this position again. Kevin i want to ask you about that in a second but one followup question as it relates to management of the virus at the white house. And in washington, d. C. Because many in washington regardless of party are concerned that this virus has penetrated inside of 1600 pennsylvania avenue. How does this administration guarantee that they can protect those staffers as well as lawmakers even from the virus spreading . Ric well, look, this is a virus. I mean, for anyone to think that politicians can somehow stop its spread is a silly washington idea. Look, we just saw President Trump tonight come out and say, i got covid. I took this drug. This drug was amazing that helped me. And im now going to make it available to all the americans who have covid and im going to do this for free. And what does joe biden do . He attacks kind of the idea that trump said that this was a gift to learn this lesson. This is the typical washington way. I mean, joe biden talks about, you know, cosigning bills in washington and thats his proof that he did things. The American People look at somebody like President Trump, hes a doer, hes an outsider and he takes action. And hes saying look, i took this drug at work. Lets make it available to everybody. Thats action. Its not a piece of legislation that he cosponsors that he can talk about. Kevin the issue of china, the biggest contrast between Vice President pence and senator harris how they dealt with china. Ric look, i think that the reality is that the chinese have made it perfectly clear that they want bidenharris to be elected. This is a team that has complimented china over and over. They engage with china. And they think that having china in the w. T. O. Is an amazing thing. We have tried to pressure china for the first time, around the world, people are very surprised that the United States took on china. This is even before covid. What we have to be able to do in a bipartisan way is come together to recognize that when we tried to engage with china 20 years ago, we brought them into the w. T. O. It didnt work. The idea of engagement with china was we thought that they would move along the line of greater acceptance of the rule of law. More capitalism. The engagement idea is a great idea. Donald trump has done it with the north koreans. Hes he said he would do it with the current regime in iran. We get the idea of engagement. But there also comes a time when washington politicians have to be able to say that engagement didnt work. You know, one of the reasons why i think joe biden doesnt want to do that is because his own family members have gotten rich off their involvement with china. Business deals in china. These are just the facts. This is not washingtonspeak. This is the way that politicians like to work. And their family members in washington, d. C. , get jobs and contracts and money regardless of whether or not theyre qualified for it. Kevin rick sutcliffe. Rich cimini. Former ambassador to germany there tough. A contentious debate. And we have continuing special coverage. Back to you. Shery live in Salt Lake City ahead of that vicepresident ial debate. Kicking off at the top of the hour. We do have special coverage of that debate coming up on bloomberg tv. But of course coming up next, we have more analysis when it comes to samsungs latest proposal. Betterthanexpected sales and operating profit, and hitting rival huawei and more analysis in just a moment. This is bloomberg. Shery lets get a check of the first headlines. Brexit talks appear to be on the verge of collapse with a u. K. Government saying it will walk away next week if there is no clear deal within reach. Gains on the news which came after the e. U. Indicated it would test for the resolve over his selfimposed deadline on the 15th. Brussels says its red line on the brexit trade deal cannot be crossed and prepare to call johnsons bluff. Haidi a new report from the world bask said the coronavirus pandemic is expected to raise global poverty this year. For the First Time Since the Asian Financial crisis in the late 1990s. The bank says covid19 will push at least 100 Million People into extreme poverty with a total potentially rising 50 by the end of 2021. The world bank defines extreme poverty as People Living on less than 1. 90 perfect day. Shery the World Trade Organization has maimed two trade es to succeed minister. The post will be contested. The w. T. O. Set forth the first female boss in its 25year history. The organization will announce its new director general next month. Just after the u. S. President ial election. And those are your first headlines. Haidi were watching samsung just reporting betterthanexpected earnings as u. S. Sanctions hit rival huawei. So lets bring in our Bloomberg Intelligence Senior Analyst, and taking a look at the biggest drivers across earnings in that Third Quarter and the question always being are those drivers the potentially sustainable . I believe that in terms of shifment and rebound of shipment and rebound, thats sustainable. And what happened with huawei, not only that you had problem with the overseas market following last years last year, we are hearing that huawei is having problems with sourcing it cannot make its own chips anymore. That may not you know, happen yet. Because they probably with inventory and next year perhaps, the inventory for huawei another two quarters. And samsung, continue to benefit from that. And also Fourth Quarter, the iphone will be slightly delayed, the new iphone so samsung would continue to be dominant in the 5g market share. But then you are right in pointing out that some drivers, for example, the memory chip profit, may not be sustainable. I mean, the margin continued to be very strong for samsung. But Third Quarter is surprisingly was surprisingly strong because of some rush order from huawei. And, you know, is oneoff. So and losing in terms of u. S. Restriction, that would be indeed a problem for the industry including samsung. Shery whats the outlook for the memory chip market . And we have seen those price declines there. In the industry. Yeah, absolutely. Prices probably wont pick up any time soon. Third quarter indeed, the decline actually was not as bad as feared. And thats because of huaweis order. And think about the real picture in terms of demand, we are already seeing slowdown in server demand. And for smart phones, even though we mention about a rebound in demand, the unfortunate thing was the vendors, they pile up inventory during the covid outbreak because they were afraid of some supply chain disruption. So even those and were not seeing any rebound in for the Fourth Quarter season, and not favorable, even going to the first quarter. So we dont see any signs of recovery in memory chip prices until probably the second half next year. Shery Bloomberg Intelligence Senior Analyst. Plenty more to come on day break asia. This is bloomberg. Shery the vicepresident ial debate is shaping up to be a Public Health issue with concerns raised about pences exposure to trump before the president s diagnosis. Covid19 cases are on the rise in the u. S. With the capital seeing a surge that coincided with the growing white house cluster. Without a vaccine experiences are ping their homes tore now on antibody treatments including he eli lillys experimental therapy. Reed davis spoke to us about how they hope to get the drug out as soon as possible. Weve submitted a request for an emergency use authorization for the single antibody therapy where we announce the data a few weeks ago and then disclose more of that today. And we did that because we think there is evidence that the medicine is safe. And that particularly in high risk individuals, those that are older, and have suffered from obesity, that there is a significant impact. Not only on symptoms. Not only on knocking back the viral load, but also on hospitalization events. And we know too many of our Senior Citizens and those in high risk groups are going to the hospital with covid19. So we submitted this today. We also announced combination data on that very same antibody plus another one which appears to work in a pretty similar way. Perhaps slightly better in some ways. The problem is we started making the single antibody earlier. So we have a lot more quantity this fall. And we want to put that to work rather than have it sit on the shelf. We think it can help people. And we would like to ask the f. D. A. To release it so we can help more people. Shery talk about that quantity and talk about manufacturing and talk about distribution for us. How easy is it to get it out to the masses and how much harder is it to produce in significant quantities versus a vaccine, for example . Yeah. Its a challenging space. Among the kinds of things we make, for medicines in general, mono colonial antibodies monoclonal antibodies are difficult and expensive and they could be used for a lot of people the constraint will be supply. And we we mention a number of companies at the top who are working on this. We hope they all succeed. Because we need all the supply we can get. Unfortunately, theres many, many more patients than probably doses we could supply. The key will be to engage the whole of the system and weve collaborated with amgen, for instance, to use some of their capacity and regeneron and roche and Drug Companies teaming up to bring more to the fight is great and use the lowest doses possible that can still be successful so that we can spread that volume over more patients who are suffering. One big advantage of the mono therapy were submitting today is its a relatively low dose. 700 milligrams. We studied up to seven grams. There was no difference. And so were confident that that lower dose could go a long way and today we said we could treat up to a Million People this fall based on the production. We started really back in the springtime at risk in several of our factories. Haidi where are you thinking on pricing and are you in talks with operation warp speed . Yes. So its a great question. Weve been in talks with operation warp speed, all the Government Agencies here in the u. S. And in other countries for some time. Were not in position to announce pricing today. But what i can say is we are following certain principles. The first and maybe most important is that patients should pay almost nothing or nothing. I think thats a real benefit of working with the federal government here in the u. S. And other foreign governments so that they can really make this not a hurd for patients, their financial means. Secondly, as we believe that the price point should offer shared value. So were not seeking to capture all the value that as we demonstrate today that youll have less hospitalization costs. That will be shared with the Hospital Systems and the government. And well produce value in the system immediately. Thats a goal we have in setting the price. And finally were going to price by ability to pay around the world. Not by selling to the highest bidder. So well allocate quantity based on where the disease is. And then set a price in tiers based on the wealth of the country. So u. S. , europe, japan, those countries will ask to pay the same amount. A higher amount, which will help recoup some of our costs and n. R. N. D. And the poorest countries we hope to have a philanthropic approach where we basically give away our i. P. And seek partners to make it very cheaply, look for some announcements coming up on that. Dave eli lili c. E. O. Ricks. We are hearing from a chief economist saying low rates are effective and they would rather be aggressive with and were hearing from the assistant governor christian hawksbe, inflation is well below target next year and giving briefing on the proposed negative rates. And just ahead of the 2020 general election which is nearing a schedule for october 17. Thats it from day break asia. David weston with our special coverage of thepointal debate from Salt Lake City, utah. This is bloomberg. Bloomberg. [narrator] this is kate. Hey. [narrator] she takes two prescriptions. Kates son jack, takes one too. Kate works hard, and thought she had good insurance. But she still pays too much. Thats no good. So kate downloaded the goodrx app. Now she can compare prescription prices, to find the best discounts. She even beats her insurance price. Good for you kate, good for you. Goodrx, stop paying too much for your prescriptions. Download the free app today. David from blerk World Headquarters in bloomberg World Headquarters in new york, im david westin. A special edition of balance of power coverage of the vicepresident ial debate. Vice president mike pence and senator Kamala Harris are set to take the stage in about 30 minutes from right now. Its going to be a 90minute debate moderated by susan page from usa today and will cover nine subjects in 10minute segments. And although those subjects werent announced in advance, we have a pretty good sen