Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240712

Company. Elon musk returns to twitter to taunt his critics. And washington approved sanctions on china over hong kong as a Top White House adviser says the u. S. Is increasingly unhappy. New trade restrictions could be on the way. Lets look at how we are setting up in asia for that final trading session of the week. To trackstocks are set wall street as we assess the latest job numbers from the u. S. We did see some sluggish data indicating the pace for hiring maybe cooling as the virus spreads. Just keeping an eye on that. Ae index could be headed for weekly gain that could massively sway sentiment. We have retail sales to from singapore and Inflation Numbers from thailand, along with a pmi reading from china. Overall, we are set to end the week higher after thursdays event. Settledg futures have lower after the index cap the biggest rise in three months, let higher by property names and chinese brokers rallied as well. Financial markets have been resilient in the face of with the ructions mainland and troubles with market stability. Week forhe busiest hong kong with 14 listings launched. That is helped push shares of the Hong Kong Exchange from a 17 month low to an alltime high amid this bullish sentiment, but there is a dent in the armor. Jp morgan has cut its call on the stock to neutral. Thats just away from a record high. Are 19 and one set of calls on the Hong Kong Exchange stock. Shery tech shares march on and are approaching one measure not seen since the dot com bubble. Is betting on tack. He joins us online from california. Tech is a core part of your portfolio. I want to bring in this chart for our viewers showing the nasdaq above its moving average and its just one of the measures im talking about. Another measure of velocity relative to the s p 500. Are we all little overstretched year . How much higher are you expecting it to go . Think we are going to continue to see while we had this big jump, we continue to see a lot of strength in the tech area because it is these companies that are facilitating the distributed lifestyle and changes in behavior that are going to happen post this coronavirus and people working from home. These companies enable people to work in a distributed way and have a distributed lifestyle. The market has gotten a bit ahead of itself, so theres some bouncing us and volatility coming up over the next three or four months, but the point is, here in the United States, you have more stimulus being poured into the economy, really overcoming the virus piece and then you have these companies enabling a different type of work lifestyle. Those are the companies we think are going to continue to do very well. So i think theres some room for it to run, but theres volatility in that process still. A bumpier ride but not necessarily stalling. What sort of gains can be expected in the sectors we were talking about . Dryden its hard to put a finger exactly on the gains we see Going Forward, but you are going to continue to see this tremendous growth in utilization. Think of ecommerce going into this. Retail is about 11 . Anybody who wasnt shopping can see this you increased demand. If we got to our china is with 25 of retail on ecommerce, you see almost a double, so theres a lot of room we can see in the United States just in ecommerce before you get to the distributed lifestyle. So its a huge manned figure and we think weve got some way to go through that sector. The post Pandemic Take up when it comes to ecommerce and what does it tell you what the strength of the u. S. Consumer and the inflation outlook which is a big uncertainty weighing over portfolios . Dryden with regard to the u. S. Consumer, if you break it down two days, we have 48 days worth of stimulus and additional more stimulus. One out of six people unemployment are making more money than they were when they were working, so the consumer seems to be in decent shape for the next several months. But what we will see in the post pandemic environment is a change in how people execute on their normal behaviors and that is whats going to move us forward. Do you see opportunities in travel and leisure . We are seeing a bit of a recovery with cruise carriers but stocks like is the land are going to come back. Do you use this opportunity to pick them up . Dryden absolutely. The fundamental question to ask in all of that is do you think two years from now human demand is going to have recovered . Think about timing and is the economy going to be stronger . Aree fundamental demands, they going to be stronger a year or two years than they are today . If they are, the companies that capitalized earnings based off that demand are going to be doing well. Those are sectors you have to be willing to be very patient on and you have to say whats the question two years from now, not two months from now. Haidi thank you very much. You can get more on u. S. Jobs data we have been talking about and all the other stories to get your day going in todays edition of daybreak. You can also customize those settings so you get the industries and relevant news you care about. Still ahead, we will get more on the pandemics impact on the labor market, especially when it comes to women and minorities with betsy stephenson. But coming up next, u. S. Senate bags sanctions on chinese officials over hong kong. The bill now heads to President Trump. This is bloomberg. Numbers hitrus stocks as investors here fear infectionsecovery rose the most since may 9 with florida setting another hi mark. Texas has ordered the wearing of face masks as houston reports a 4 jump in intensive care patients. Nationwide, cases rose almost 57,000. Japan is warning of a resurgence in virus cases with tokyo reporting its highest number since early may. The governor says many infections involve people in their 20s and 30s and are linked to evening entertainment centers. Another state of emergency is possible. Meanwhile, the German Parliament has ended a legal standoff over bond buying, backing a program seen as a key component of the euro areas rescue plan. Chancellor merkels alliance showing the pro business democrats to accept the ecb purchases as a clear signal berlin intends to keep the Single Market in one piece. Germanys top court has ruled the plan could be illegal. The former role friend of Jeffrey Epstein has been arrested on charges in new hampshire. Shes accused of assisting epstein to abuse minors and helping to recruit and room victims known to be under age. She had previously denied all involvement. Epstein was found dead in prison last year while awaiting trial for sex trafficking. His death was ruled a suicide. Onbal news 24 hours a day air and on quicktake powered by more than 2700 journalists and analysts in more than 120 countries. The u. S. Senate has given final approval to legislation that would impose sanctions on chinese officials cracking down on dissent in hong kong. Emily wilkins is following this bill. What is the mood in washington right now . Is the president going to sign this . Expect theutely president to sign this bill. It has i high level of support from inside his own party and we have seen the president escalate things with china. Theres been a bit of a titfortat in recent months ,ver coronavirus, over trade over the South China Sea and this is the latest brick in that wall. Its not just about hong kong. We have a Bipartisan Group of lawmakers who want the Trump Administration to go hard on china when it comes to human rights abuses. A Bipartisan Group sent the white house a letter urging them to do something more than just have strong retorts when it comes to china arresting muslims, putting them in camps. They have faulted the administration for not doing more. Want to make sure no u. S. Companies are selling surveillance technology. Similar to the sanctions over hong kong, but those would extend to Financial Institutions. How much times will banks have to prepare for this . Emily thanks to prepare to make sure they are not going to be in violation of this law. But these are u. S. Banks, chinese banks, any institution found working with chinese officials can face sanctions and the president will have the power to seize assets of officials found to be interfering in hong kong affairs. Americas Development Bank has invested roughly 20 billion to advance foreign policy, including helping the u. S. Take on Chinese Companies like huawei. Israel said less than a week ago they are not going to go forward with huawei, so thats a very specific example. I will tell you something about israel some people like israel, some people dont, but they are fairly thoughtful when it comes to security and data security. I think the u. K. Has indicated y are seriously rethinking they were just using it at the outer edge where they felt comfortable but now they are rethinking it. You have the british, the is alis telling you this Real Security problem. We dont all say that all the time. That isre commerce, but you have three countries known for their Security Intelligence services, saying do not do this. There are certain places where i say its not worth any amount of money. My sovereignty as a country is critical and thats what you are hearing these countries say. Huawei has long had a foothold in this region. How is that going here . Im not inclined to talk about that and every country has the right to make their own decision. Then they have to decide whether that makes sense. It something every country has to think about seriously. There are other laces to cut corners and save money. There are other places where you are not putting the entire security of your country at risk. Cut corners there. Theres a lot of things that come cheap from china that you can buy. Do you want your entire backbones infrastructure to come from that country . Is dfc putting its money where its mouth is . In the particular area of i. T. . Yes. We have been looking as spectrum becomes available and people are buying equipment, we are out there financing that. Were looking at a number of Different Countries at purchasing spectrum and buildout in financing. Mentioned you belton road. China substantially subsidized. They do it in telecommunications. They are generous come humanitarian gestures and i think Everyone Needs to know that. To helpsometimes is counter that where it makes sense to say we can be out there and when i go to countries, they say this is the most common number one most common thing they will say is i didnt want to take money from that country. I knew what i was getting into but i had no alternative. Wheres the alternative . That is what dfc is. We are the alternative which is why i travel so much to make sure the messages there but to build a personal relationship so people know there is an alternative and it is an alternative that will respect your sovereignty. Im not going to bring in thousands of americans to work, im not going to threaten your environment, im not going to build shoddy infrastructure that may collapse later. Im not going to set up a deal where im going to reclaim a port you own and say im sorry, thats an american port now. We tried that a few hundred years ago and it was called colonialism. This is a form of colonialism. Haidi plenty more to come on daybreak asia. Haidi shares continue to surge for tesla and elon musk is taking to twitter to taunt regulars. Join us now is craig trudell. He just cant help himself. Craig he really cant get out of his own way. Somekes a bit of decoding of these posts we saw this afternoon. He talked about the idea that tesla was going to make fabulous short shorts and thats a reference it is a way he has trolled people like David Einhorn, Hedge Fund Manager who has been famously betting against tesla for years. A couple of years ago, he said he would send a box of short shorts to David Einhorn to make up for the fact tesla shop tesla stock was going up and today, not only sending that tweet, but renewing his jibe at the sec, referring to them as the short seller enrichment commission. This is a day that started with positive headlines with deliveries being better than musk couldnt necessarily keep quiet and just take it all in and enjoy it. The skeptics have a point. We have seen tesla shares adding more than General Motors or ford s entire valuations. Craig i think the report you are referring to from rbc capital is a smart observation. This is a master expectations teslas irlast week, department gathers estimates of what people think deliveries are going to be and the number was lowly low it was in the 70,000 range. People saw that and said tesla will be able to beat that number and that helps bring the stock up. And then earlier this week, you saw musk sending emails to employees. He knows those leak to the media very quickly. A couple of those emails talked about maybe breakeven was possible this quarter and employees were doing a great job. Weve seen one day after another of people getting excited about first a deliveries number and the idea maybe they can breakeven. As you referred to come about 48 alien dollars worth of market capitalization and seven trading days, not a bad seven days work. Lookedit would have pretty bad if they continued with the salary reductions. Does that put an end to those . Some headlines moving on that front costcutting measures that were implemented, we saw a lot of companies do this. General motors deferred some pay for workers and cnbc, we should give them credit they got their hands on an internal memo that just went out the idea that they are going to restore pay for folks, so we will see if that costcutting measure was enough to combine with the deliveries, whether it was enough to carry tesla to a profit. We should note that is something that is really key. If tesla is able to eke out a profit, the stock would be eligible for the s p 500. Thats another reason people are optimistic about the shares right now. We have heard concerns about workers being let go. Craig the reports we have seen on that front has been a handful of workers. What we are seeing at car plants across the country, we had a story about Fiat Chrysler where againstk a hardline people staging production stoppages, work stoppages at the factory. You are seeing some employees of Car Companies really being nervous about the fact that they are in close quarters, they are on an Assembly Line and it would be difficult to social distance. , fiatr it is tesla chrysler, gm or ford, you are hearing about workers being concerned about the risks they are taking going to work every day. Tesla is downplaying the idea that they are putting people at special risk and that workers are unhappy with the way they are approaching the handling of people heading back to work. Lets get a quick check on the latest business flash headlines. Blank bank of America Planning and officer turn after labor day with a limited number of staff making their way back in phases. Workers will be given 30 days notice in line with the banks cautious approach during the coronavirus pandemic. Business travel and in person meetings would remain restricted. Deutsche bank may buy all or the the germans german payment platform after one of the biggest corporate scandals in years. The lender is in talks with a regulator and administrator. Wirecard filed for insolvency after admitting more than 2 million probably never existed. Bidlondon Stock Exchange for infinitive is facing another hurdle. After singapore ruled yield could reduce competition in the forex market, the competition and Consumer Commission cited concern over whether it would retain access to the benchmark at a fair cost and on reasonable terms. Mandate forexas mask wearing as u. S. Cases jumped the most in two months. We will have the latest on the outbreak. This is bloomberg. By 4. 8payrolls rose million jobs as the labor market make greater progress panic than expected in the rebound after the pandemic. We spoke with larry kudlow about the data as well as possible future stimulus and u. S. Relationship with china. first of all, its a spectacular number and helps the overall situation enormous late. Thats the key point. Weve created a lot of jobs in last couple of months and the trends continue. One thing i was listening to the earlier conversation and i dont think people understand the relationship. The rescue package the president led with bipartisan support in secretarynd the ppp mnuchin fostered and implemented , it is the temporary layoffs, the furloughs that are coming down. We kept people connected to their employers. They did receive assistance, but we kept them connected so as the economy reopened and businesses reopened, roughly 80 of Small Business reopened, so we saw it again today. Are now temporary workers. That was 75 to 80 . I dont see why that trend cant continue. If there is an intellectual disconnect a lot of temporary layoffs will go back to work. I think a lot of people think you cant extrapolate this out because we have to slow down and reverse the openings elsewhere. Many people think more help is needed. This is what the president had to say when he was asked about more direct payment. He said i support it and i support larger numbers than the democrats. That doesnt sound like a consideration. It sounds like the president has made a decision. Is that a fair characterization . A i dont think a decision has been made at all. The president has always favored that but he wants it to be done in a smart and targeted way. The shape of any kind of package is very much up in the air. He has emphasized a number of programs. Negotiations wont formally begin until after the july 4 recess. Hes talked about payroll tax cut, hes talked about reemployment benefits and bonuses because we dont like dishut at is a disincentive to work. Hes talked about the Tourism Industry with utter business writeoffs. Hes talked about capital gains, investment writeoffs, there a very large package here and we wont know until we go into these negotiations. Table, itss on the just a question of shaping it and doing it smart. I thought the original rescue package was very smart. I dont know if everything has to apply all over again. We assess the economy. Thats the key point. Whats the evidence of that it has been a disincentive to return to work . A right now, i can only give you anecdotal evidence. I hear this a lot of us here this and secretary mnuchin heres this, so many Business People have said to us, particularly the smaller businesses, the most vulnerable to the pandemic, they cannot hire people back because the Unemployment Benefits are generous. I happen to think the generous unemployment package was probably a good thing at the beginning of this pandemic when we put it on the table in mid march, late arch. Working with the ppp program, i think the unof limit compensation could be a good thing, but that moment has passed and we are moving into the reopening and as these numbers show, people are starting to move back, they want to go to work. I think we have to look at this little differently now and reemployment benefits will help fill the bill and those have to ,e targeted to the right people competing with the unemployment, it will be a better story for the Small Businesses. They will be able to afford people. Thats the key point. Shery larry kudlow there. The u. S. Continues to be the epicenter of the coronavirus pandemic as infections surge. Take a look at this chart showing the total number of toward 3 million in the u. S. , really overshadowing all other countries around the world. You see brazil taking second place with almost 1. 5 million cases reported. Lets get the latest with Michelle Cortez in minneapolis. The numbers here in the u. S. Are incredible and a lot of the responsibility reigning in these infections have fallen on individual states instead of the federal government. What are we seeing from authorities now that we continue to see this resurgence of the virus . Local officials really are trying to start taking some action here. The concern its happening in the southern part of the United States that would hit later than the initial outbreak in the northeast and northwest. So theres concern that they wasted some of this early notification they had and the number of cases we are seeing day after day is increasing and they expect the next four weeks will be worse than last four. So they are shutting things down, closing their beaches, rolling back all of the opening efforts. We have seen in the last hour Miamidade County putting in place a curfew and making masks both indoors and outdoors mandatory. Expecting to see authorities break for a surge brace for a surge this fourth of july . Michelle absolutely. At the time everyone gets together. Its about getting your family together, your neighbors having parties, watching fireworks going to the beach. Together,e get people especially in the context of eating or drinking and not wearing masks, the risk of it spreading increases and we are seeing very high levels of transmission. Congested parties, no masks in the context of increasing numbers of infection, it is a disaster. Shery there were expectations that the heat would help with the virus infections, but dr. Fauci is saying this is mutating and it could get even worse. Michelle absolutely. But the information about the mutation is very early still. They are seeing in some in vitro tests that theres a change thats happening that makes it easier for the virus to transmit from person to person and can increase levels of the amount of virus in your body and that is worrisome because its easy to pass this virus along already. Expecting in the summer, when it is warm and humid, people are out doors more, that we would see a decline because we normally do see a decline for respiratory viruses, but so far, that has not happened. Transmissibility and a decreasing benefit from the weather again, things are getting worse, not better. These numbers really are grim. Thank you. Coming up, Betsey Stevenson joins us to discuss the impact of the pandemic on women, minorities and low income earners. This is bloomberg. President trumps top economic adviser says the administration is increasingly unhappy with china. New trade restrictions could be on the way. Larry kudlow says the u. S. Is concerned about hightech transfers via a link to the military. Security, they say is under threat and washington will take appropriate action. Is a huge problem. We are engaging with them on trade, but what they are doing in hong kong as well as other problems becomes a larger and larger difficulty in our relations as secretary pompeo and National Security advisor obrien have said time and time again. Warning western countries of strong reprisals over criticizing. To offer a route to citizenship for hong kong residents and washington is preparing sanctions. Aging says it will respond and its critics will have to accept the consequences. Brexit talks have broken up early amid nature differences still existing. Brussels and london say negotiations will resume next week and discussions have not collapsed. The eu has admitted officials are working on the assumption a no deal brexit is becoming more likely and has urged the u. K. To be more engaged. Mobile news 24 hours a day on air and on Bloomberg Quicktake powered by more than 2700 journalists and analysts in more than 120 countries. That u. S. Labor market made great progress last month. In the u. S. And across the globe, the devastation from the pandemic is not at evenly spread. Our next guest says women are faring much of the economic fallout. Etsy stephenson joins us now. Wonderful to have you with us. Thisow that gap was before pandemic. In australia, we know women and up with about 40 less Retirement Funds compared to their male peers. Research intoyour how traumatic this has been when it comes to the incremental progress being made for equality so far. Betsy tainly women they dont reach the same height in their career as they were meant to. But one thing we have seen is women had hit a milestone. In december, they became the majority of job holders. When we looked at total jobs in the economy, women held more than men and that persisted in january and february and then the pandemic rot that to a crashing end. They went from holding over 50 of jobs to just over 49 of jobs and the pandemic tended to shut down the jobs women are most likely to work in, things like education and Health Services and leisure and hospitality. Those are majority female occupations and they got the brunt of the layoffs in that industry. Thats not taking into account they are bearing the greatest burdens when it comes to working from home, homeschooling children and not to mention just the emotional labor side of things. How quickly do you expect this could rebound post pandemic . Betsey thats a really good point. I really tried to dig into the data and this is what i see women whoproblem is were in jobs like health jobs thatr lowwage got sent home, they lost work and we see real disparities there. But we dont see real disparities among women who have kids versus men who have kids right now. Dealing withwe are this two phenomenon a short run phenomenon which is what happened when we shut the economy down, and we are starting to see that reverse into the days job report in the u. S. We saw the gap between men and women in Labor Force Participation narrowed, so we are getting improvements there see women starting to struggle with the caregiving burden and we have yet to see how thats going to hit their careers because that is not something that happens overnight. That is slow and is the kind of thing that will make women decide over time that they need to step down their hours, take time out of the labor force, pass up a promotion. I think we will see a generation of women who had to slow things down over this year because of their caregiving needs to their children, their elderly parents that is going to give them longrun labor market pain. How challenging is this for women to get back into the workforce once they have to leave because of all these reasons you mentioned . Of the thats one primary challenges. Despite the fact women have almost as much Work Experience as men, we have a labor market of offhere are plenty ramps from the highway of work but not very many on ramps. What happens is if you take time out of the labor market, you have to step quite far back in order to get back in, making a perhaps a career in a position that uses your skills less well and you may even find it hard to get act into a job that can get you going back in the same direction and you may get stuck at permanently lower wages. We need to figure out how to be more flexible so we can reincorporate people who have taken some time out and that has been a long challenge and its one of the reasons women in the United States dont take much time out after they have had a child because the longrun penalties in terms of their career, their wages are so dire that a lot of women try to just work through that even though we know what is best for children would be if parents took time at home when they have a newborn. Shery we have seen some businesses come to the forefront like uber and pepsico offering more flexibility and resources for working parents. What sort of support thing not only from the private sector but from the government . Betsey the private sector has stepped in where the u. S. Government has failed. Some of that you mentioned some companies that offer flexibility. That is what they are offering workers, Companies Like uber, where its not high pay but lots of flexibility. We are seeing it from a more highly compensated workers where employers realize they were using too much they were losing too much talent not creating flexibility for women in particular and where men started to stand up and say i need that flexibility. One of the important things we see is we need men to stand up and request the same kind of flexibility is women so we dont see women getting discriminated and we see that equal share of caregiving in the home. But this pandemic highlighted failure of the u. S. Safety net to really help families manage things like childcare, Early Childhood education, taking time off for being sick. Problems throughout the country where people have gone to work sick with covid and spread it across factories and businesses because there are so many workers in the United States that cant take a single paid sick day. Here in australia on that same tangent, we have seen the government offer free childcare. That, it would have not even been up for debate for a fiscally conservative government to be giving out free childcare. Is this a moment for disruption . Should government be reassessing what they can do when it comes to social and welfare policies . Clearly it can be done. Governmentsink around the world are starting to realize childcare is not just a personal issue, not just a family issue, but it is an economic issue for the entire economy. We need to think about it as a social issue and Work Together to make sure people have sufficient childcare because thats the way we are going to be able to ensure people can perform at their Peak Performance in the economy. We have long converted problems socialalth care to a problem but childcare has been one of the last areas where people have said this is mine to solve, this is not the governments problem. But the truth is, if you are struggling with childcare, someone elses probably struggling with childcare so collectively we have a problem. To are not going to be able do the kind of performance, to achieve what you want to achieve, and that holds the economy back. A Silver Lining coming out of this is hopefully a greater recognition across the political spectrum that childcare is not a womens issue, its not a family issue, its an economic issue. Haidi thank you for your time today. Also a member of the council of Economic Advisors under former president barack obama. This is bloomberg. Haidi lets get a quick on the latest business flash headlines tesla shares soaring toward wall streets most bullish target. The electric car maker livered 90,000 cars coming gaining on the Fourth Quarter and beating estimates of about 83,000. Shares rose as much as 10 in the biggest oneday jump in 10 years. A day after 10year after tesla became the worlds most valuable car company. Haidi an Indonesian Airlines topany traffic has risen 60 of capacity after authorities lifted a ban on nonessential travel last month and garuda says demand should improve further if tourist destinations such as bali are reopened. Arguably the worlds most famous plane may be heading into retirement. Theng is said to be pulling plug on the jumbo jet after a 50 year run. Their 747 to an early retirement. Why are we saying goodbye to the queen of the skies . Is thereort answer isnt that much need for a plane that big. The 747 has been dying a slow death as a passenger carrier. It hasnt been sold as a passenger plane in years. A lot of airlines, including qantas have been easing them out. It has gotten life as a freighter, but with the covid19 pandemic, it was the final nail in the coffin. Boeing is just not seeing enough demand to justify it. As you said about qantas, many of those planes, many whether freighters or passenger airliners are parked right now. Shery will it make a material difference when it comes to the Business Impact of retiring the 747 . Brenden it wont be a huge impact for boeing because that plane hasnt been such a big moneymaker. The real challenge at another hadt with the 737 max which certification fights with the faa. Important,much less however thats the iconic boeing jet and its going to be on its way out. Haidi what is boeing going to do with the extra factory capacity given the outlook for air travel generally looking so bad for the next couple of years . Brenden that is one of the big mysteries. They have a gigantic plant in everett, washington that makes twin aisle jetliners. They will be closing the 747 a couple of years and that would open space if they wanted it to build perhaps the 767 or a different model. Get back toy does demand. At this point, its hard to figure out how money planes the world is going to need, so that remains one of the big mysteries in this case. Brenden case with an update on whats happening to the boeing 747. Coming up, Morgan Stanley over optimism building in the economy. Will asia be first in an firstout in the crisis . Plus the state of the asian consumer. The confidence hold up in second half . And on another programming note make sure to join bloomberg for our annual broadcast of the boston fireworks spectacular. Carrying on the fourth of july tradition from the company of europe the comfort of your own home. 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. Good evening from bloombergs Global Headquarters in new york. Haidi asias major markets just opened for trade. Our top stories this hour asian markets look to follow wall street as u. S. Payrolls upset concerns about the post virus recovery. Gold is on track for a fourth week of gains. Global infections continue to rise as u. S. Cases jump the most in two months. Tokyo numbers surge again. Texas makes face masks mandatory. The u. S. Senate approves sections on sanctions on hong kong. Lets get straight to the market open with sophie and hong kong. In hong kong. Ei 225 green for the nikk while the yen is sticking amid 1. 07 levels ahead of the bojs bond buying operations. A decent auction on thursday. Bets are rising on bears steepening. As0 to 30 year spread analysts recommend steeper strategies. Open ineck on the seoul. The third extra budget vote is expected to be the last virus stimulus package. Not straying far from the 200 level. Turning to sydney, stocks are holding above 6000 points after rising to a six week high on thursday. We are watching miners with copper production at risk. A flagship project in mongolia could see a delay of 29 months. The aussie dollar slightly under pressure, holding a fourday gain ahead of retail sales due later this morning. Checking in on commodities, on crude, oil headed for a weekly gain, up almost 5 over the week. Slightly paring down that advance was brent, off nearly 1 . After a choppy overnight session for havens on u. S. Jobs data, trading steady this morning gold trading steady this morning. The 10 year yield off by one basis point ahead of the friday holiday in the United States. S p just nudging slightly lower. Shery lets dig deeper into the Market Action with mark renfield. It has been a strong week for china and hong kong stocks. Can this be sustained . Mark interesting that you mentioned, can i be it be sustained, because my colleague in hong kong noted the volumes for the csi 300 are over 25 billion shares traded. One of the positive aspects was that margin traders, as they like to be known, have come back strongly into the market. This is typically a sign that the momentum in the market has further to go. It is probably related to the way in which china responded to the pandemic. The shutdowns were earlier and they have come out of it more cleanly. The country is opening up in a uniform way. In general, the chinese domestic economy is mostly open and responding pretty well. That is quite a contrast to other major countries in the world. We had been thinking earlier in the year that china markets could show this year as the year they would rebound more strongly than other parts of the world. That could play up in the third and Fourth Quarter. People seem to be more confident that the chinese situation is good enough that the domestic economy can support decent profits for Companies Based in china. Some on a global basis, but some because of the Domestic Travel scene can generate income there. Hong kong stocks are benefiting from this as well. There is a long way for hong kong stocks to catch up in relation to the rest of asia. It looks like a pretty good outlook for china in the near term. Haidi what sort of catalyst can we see that will stir bond markets from their slumber . Mark it doesnt look too interesting on the face of it. Central banks are committed to low rates, but there is something happening in japan which probably other major markets should take notice of. We have seen before that when something stirs in the japanese bond market, it can have an effect to other major markets. We have seen quite a steepening on the long end of the japanese curve. 30 year yields are up to levels we have not seen for slightly more than a year in japan. That hasnt yet filtered into other major markets, but it often does. When japanese yields rise quickly, it often plays out in the treasury market. So far, it has been a fairly muted response. This can cause a very sudden panic in other bond markets. People have been watching this closely. U. S. Markets are closed today, but possibly over the weekend people will digest what is happening in japan. Why is the curve steepening so much . Probably because the bank of japan is ignoring what is happening on the long end. We could see a response next week from other g10 markets as they try to catch up with this steepening in the japanese curve. Haidi Mark Cranfield with us. You can follow more on the trading action with our markets live blog. You can get a market rundown in one click. Ongoing commentary and analysis from bloombergs expert team of editors, so you can see what is affecting your investments at any time. Still ahead, asia may have been the first to show recovery from the pandemic, but will it be a phenomenon that will last . We ask a Morgan Stanley economist next. First, the u. S. And u. K. Step up solidarity with hong kong and put more pressure on china. That is next. This is bloomberg. Karina you are watching daybreak asia. Rising virus numbers hit stocks. U. S. Reported infections rose the most, with florida setting another high mark and imposing a curfew in Miamidade County. Texas ordered the wearing of face masks with a 4 jump in intensive care patients. Nationwide, cases rose 57,000, to 2. 7 million. A new report from washington says the u. S. Economy will contract more steeply, but will rebound. The Congressional Budget Office sees gdp tracking almost 6 in the coming months and then expanding by nearly 5 next year. The cbo expects the job market to improve, although weaker than before the coronavirus hit the economy. German parliament is at a legal standoff, backing a program seen as a key component of the euro areas rescue plan. Joinedlor merkel proliberal business democrats seen as a clear signal that berlin intends to keep the market in one piece. Germanys top court ruled the buying plan could be illegal. The former girlfriend of convicted pedophile Jeffrey Epstein has been arrested on sex charges in new hampshire. Ghislaine maxwell has been accused of abusing minors by helping to recruit and groom victims known to be under age. Maxwell priestley denied all involvement. Previously denied all involvement. Epsteins death was ruled a suicide. Global news 24 hours a day on air and on quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im karina mitchell. This is bloomberg. Shery the u. S. Senate has given its final approval to legislation that would impose sanctions on chinese officials cracking down on dissent in hong kong. The bill heads to President Trump for his signature. Lets go to selina wang in beijing. What do we know about this legislation and the expectation as to whether the president will sign it . Selina this legislation sanctions tiny officials cracking down on dissent in hong kong, as well as Financial Institutions working with officials the u. S. Determines are interfering in hong kong affairs. But it does give a yearlong grief period for the businesses to stop doing business with those individuals. After that point, the Treasury Department can impose penalties, including barring top executives from entering the u. S. And restricting their ability to engage in u. S. Dollar denominated transactions. It requires the state department to report each year about officials seeking to undermine the one country, two systems principal and gives the president the power to seize the assets of those individuals and block their entry to the u. S. This legislation has been a high priority for both parties, pressuring beijing over hong kong over human rights. Trump tostep is for sign this bill. Given there is significant bipartisan support, that is an expectation of many lawmakers, but we have not heard from the white house yet. Shery the International Condemnation also coming from the u. K. , which has offered a path to citizenship for around 3 million hong kong residents. How is china responding . Selina china is hitting back hard, questioning the u. K. s right to offer a home in the u. K. For chinese residents. China reserves the right to make further reactions on the consequent is borne by the u. K. Site. Prime minister Boris Johnson called this National Security law a clear and serious breach of the 1984 handover treaty between london and beijing and had promised nearly 300 hong kongers visas and a path to citizenship after china enforced this law. But legally, experts say there are potential problems in implementation. China could try to block people from hong kong from traveling to the u. K. Our china correspondent selina wang in beijing. Up next, an Morgan Stanley analyst joins us as optimism builds over the economic recovery. Will asia be first in and first out of the crisis . We discuss. This is bloomberg. Haidi the betterthanexpected u. S. Job data have pushed that nations reading on an economic surprise index to an alltime high. That is contrasting with asias recent mixed data, which means in this part of the world, the asian reading falling below zero. Our next guest holds the view that a gradual recovery is underway. Morgan stanley economist deyi tan joins us from hong kong. The assumption from the start of this is asia would be first in, first out. Many economies like hong kong, south korea, japan, and australia seem to have handled the pandemic outbreak fairly well. The idea was they would recover fairly quicker. Is that still the case . When you look at that chart, it appears europe could emerge as the quickest to recover. Even the u. S. Is starting to pick up. Deyi our view is asia is still first in, first out. China will not only lead the recovery in the region, but in the global economy. What you are seeing now in terms of the chart you mentioned is simply reflecting the timing of the reopening on these economies. Certain economies have just reopened. Usually the pace of rebound is sharper at the start, but once you get further away from the reopening, perhaps the momentum will not be as sharp. That is what we are seeing in asia right now. Overall, we believe asia is on track for a gradual cyclical recovery. If you look at export numbers or even asia pmi numbers, they found at the bottom korea export numbers, those were announced two days ago. That suggests the trough of korea exports seems to be in early may and things are getting less bad. Trade,when it comes to and as you say, a lot of this is a on this is on the back of robust recovery. Numbers later today hope link supporting later hopefully supporting that. We are seeing strained relations between hong kong and beijing. Is that going to overtake the hopes of a trade recovery in this part of the world . Deyi geopolitical tensions is definitely something we are watching out for. Maybe i should put it this way, i would differentiate between the cyclical recovery versus what looks like a more structural, mediumterm outlook. I do believe the nearterm cyclical recovery would be more determined by what happens on the covid front, the reopening of the economies and strength of the policy easing so far. If you look at the policy easing in asia, yeartodate, it is in fiscal of gdp measures already announced. I think these are some of the factors which will help asia to see a cyclical recovery. To your point about the there willl effect, be shortages in asia in the mediumterm, such as tensions between the u. S. And china, for example. It may make it more difficult for asia to generally extract growth from the global cycle Going Forward because of some of these geopolitical tensions in the background. But having said that, there could be some relative winners to the extent which covid19 has reinforced the importance of diversifying supply chain risk. To the extent to which some of the manufacturers may be thinking about putting incremental capacity into china, even Southeast Asian economies like india could be potential beneficiaries. Haidi is there any threat of chasing a fiscal cliff facing a fiscal cliff across asia, especially in the countries that dont have the leeway for prolonged support . Deyi some of these economies you are referring to, indonesia and india, because of the external constraints that they seem to be under. India, because of the high public debt to gdp ratio. Our view is, at least in the case of indonesia, in the sense we are getting, policymakers do want to keep fiscal policy in a conducive manner. Deficite 2021, fiscal will not be what we saw this year. We expect the economy to be getting more on its feet. Withdrawymakers to fiscal stimulus in an aggressive way, that seems to be unlikely. As it stands now, policymakers in indonesia are guiding a fiscal deficit around 4 , which is not going back to the 2 levels we have historically seen in this economy. It seems like there will be a gradual rollback in terms of policy measures. Haidi deyi tan, Morgan Stanley economist. Thank you for your insights on china and the rest of asian economies. Turning to the u. S. Economy, payrolls rose by an above forecast as the u. S. Jobs labor market made greater gains than expected. We spoke to larry kudlow about the data and possible future stimulus and the u. S. Relationship with china. Larry first of all, it is a spectacular number. It helps the overall situation and enormously. That is the key point. We created a lot of jobs in the last couple months. The trends continue. One thing i was listening to, that earlier conversation, i dont think people understand that the rescue package that the president led with bipartisan support in congress, and the ppp that secretary mnuchin fostered and implemented it is the furloughs that are coming down. We kept people connected to their employers. They did receive assistance, but we kept them connected so that as the economy reopened and the businesses reopened roughly 80 of businesses reopened. Are of unemployed now temporary workers. And number was 75 to 80 7. 5 million. I dont see why that trend can continue. That is the point i am making. I dont think there is an intellectual disconnect. A lot of temporary layoffs will go back to work. A lot of people believe you cant extrapolate this out too far. For that reason, many people think more help is needed. This is what the president had to say when he was asked about more direct payments for individuals. He said, i support it, but it has to be done properly. He said, i support larger numbers than the democrats. That does not sound like a consideration. It sounds like the president has made a decision. Larry i dont think the final decision has been made at all. The president has always favored that, but he wants it to be done in a smart and targeted way. The shape of any kind of package is very much up in the air. He has emphasized a number of programs. Negotiations wont formally begin until after the july 4 recess. He talked about payroll tax cuts. He talked about reemployment benefits and bonuses, because we dont like the 600 plus up on on and limit. It i on unemployment. He talked about helping the tourism, the Entertainment Industry with Better Business writeoffs. He talked about capital gains, investment writeoffs. There is still a large package. We wont know until we go into these negotiations. He is right. Many things are on the table. It is just a question of shaping it and do it smart. I thought the original rescue package was smart. I dont know if everything has to apply all over again. We assess the economy. That is the key point. Jonathan lets assess the data. What is the evidence the on and plummet benefits is the Unemployment Benefits is a disincentive to return to work . Larry i only hear this, secretary mnuchin hears this so many Business People said to us, particularly the smaller business, in some sense the most vulnerable, the restaurants and small shops, they cant hire people back because the Unemployment Benefits are very generous. I happen to think the generous unemployment package was probably a good thing at the beginning of this pandemic when we put it on the table in midmarch. Working with the payroll protection program, i think the Unemployment Compensation could be a good thing, but now that moment has passed. We are moving into the reopening. People are starting to move back. They want to go to work. We have to look at this a little differently now. I think reemployment benefits probably will help fill the bill. Those too have to be targeted to the right people who are having trouble getting a job or competing with unemployment at 600. It will be a better story for the Small Businesses, they will be able to afford people. That is the key point. Haidi white house Economic Advisor larry kudlow there. Lets get a quick of the latest business headlines. Bank of america is planning a wider Office Return with a limited number of staff making their way back in phases, depending on their role, department, and location. Workers will be given 30 days notice. Business travel and in person meetings remain restricted until at least the same date. Ofs rally amid rising hopes more ipos in the city. Share of Hong Kong Exchange jumped 6 on thursday. June was the best month since january 2018. The stock gained 41 . Hkex is now up from its march low. Potential of more chinese listings. The london Stock Exchange nned 27 billion bid h the competition and Consumer Commission cites concern over whether rivals will retain access to the companys benchmarks at a fair cost and on reasonable terms. Next, we get the latest from the virus surge in tokyo and how pandemic is impacting women in the labor market. This is bloomberg. Haidi we are getting some alerts coming through when it comes to the Economic Data from singapore and japan. The bank of japan pmi Services Number coming in shortly. Hasnt dropped yet. Lets get you the market in singapore pmi. Really bouncing back from the previous decline that was 27. 1. A sizable recovery remains firmly in retractionary territory. Singapore had one of the strictest economic lockdowns to counter the rise in new virus cases with essentially nonessential activity coming to a standstill. We are waiting for those numbers when it comes to think of japan pmi services and composite number. The final number for june when it comes to the services pmi is 42. 3, so still in retractionary territory. The pmi composite number for june 37. 9. This being more of a frontloaded number would have reflected that early stages of the emergency that was lifted in full by late may. Shery seems the numbers have improved with the actual of number for Services Final at 45 and the composite number at 45. 8. Lets go to japan and talk about the virus cases there. Tokyo found 107 new coronavirus cases on thursday, the most since early may, as authorities urge residents to take extra caution in the capital. Lets cross to tokyo and our senior editor. What is behind this surge in cases all of a sudden . We have seen cases tick up over the last couple weeks. Yesterday was a sudden spike of 100 for the first time in two months. It certainly seems to be amongst young people, predominantly people in their 20s and 30s. A lot of fingers are being pointed at what authorities refer to as the nighttime entertainment district, hostess clubs and other establishments where people are very close ventilation, a lot of talking in close contact. Yesterday, authorities for the first time took the step of urging people not to go to these places. They are trying to prevent any further spread into an Older Community that would be more likely to be hospitalized. Shery what is the reaction we have seen from authorities . Fairly so far, they are relaxed. There are a lot of people here who are the numbers are similar to where they were when the state of emergency was imposed in early april. So far they are suggesting there will not be any draconian steps. There will not be anything that requires businesses to shut down or people stayathome. They are encouraging people to stay out of these venues that are high risk. The governor and an economist made an impassioned plea for businesses to follow the guidelines they say will prevent the spread of infection any further in their businesses. Sounds like a lot of businesses arent following those guidelines. Shery you mentioned the governor right there, giving a presentation. What do we expect for the gubernatorial elections . Gearoid the vote is on sunday. As of now, she is almost a shoein to win a second term. Her response to the virus hasnt been perfect. As many as in osa ka. The messaging was confused. She still is the most popular of the remaining candidates. The vote for the opposition candidates is hugely split amongst a number of candidates. It would be quite the shock if she did not sail to victory on sunday. Shery we have been talking about the impact of the pandemic on representation of working women globally. In particular, this will become more of a problem in japan. Struggled to make any sort of headway. Onroid yes it depends where you look at it. Prime minister abe likes to tout that the female Participation Rate in the labor force became extremely high during his term, and indeed was higher than the u. S. And many other western countries. The flipside is a lot of those jobs are parttime and contract jobs. Those are the first jobs to go when you have the session that we have at the moment. So women working in those jobs they have been more impacted since the economy took a downturn following the pandemic. Obviously japan has not seen the mass unemployment you have seen in the u. S. And other regions that have been impacted. Companies cant let go of fulltime workers easily. What they do is turn first to eliminating contract jobs. Those are mainly filled by women. Reidy, our senior editor. Lets look at the nikkei 225 as we get reaction to the pmi numbers. The final june japan pmi services and composite numbers coming through, showing a pick up. 7. 9osite pmi from a steady in the previous reading. That services pmi jumping up to in theickup from 42. 3 previous reading. Both firmly in contractionary territory as the japanese economy tries to get on its feet after the state of emergency ended in may. Nikkei 225 seeing gains. Fourth Straight Days of gains for the u. S. Although we saw wall street paring the exuberance of those gains with the close for fourth of july weekend. We are seeing an extension of gains when it comes to trading in sydney. Ray dalio says recent interbank actions means Capital Markets Central Bank Actions means Capital Markets are no longer free. We spoke to the owner of the Worlds Largest had fun largest hedge fund. Ray today the markets are driven by the Central Banks. With theination central government. What i mean by that is the purchases right now of Financial Assets by the Federal Reserve, or purchases by the Federal Reserve of government securities, are the drivers of that market. Whof you look at money and is in the market the Federal Reserve for example will set an Interest Rate for different types of creditors based on its economic objective. In the old days, when we had the 2008 financial crisis, we needed to protect banks, because they ine systemically important paper money and the like. Now it is much broader. The whole economy is systemically important. If they didnt go out and make lending to companies, including what we call fallen angels, those that were just above Investment Grade and fell into Investment Grade, we would lose large parts of our economy. Where in a situation now they are the market makers. Take the Central Banks out and you have a different story. Including the value of money. What is the value of money . Think about it in europe, for example. The central bank will lend to banks at 1 . That means you dont have interest payments. In fact, you have interest credits. The Central Banks will take that debt on. They will own it. They have a political agenda, not an economic agenda, in which they will determine whether they will be paid back or when they will be paid back based on how the economy is doing. Like similar situations in the United States and japan to varying degrees, they will make loans that have interest and you may not have to pay rentable back pay principal back. Those are markets driven by Central Banks, not only their actions, but their desire to be an owner of those assets and their priorities about when they buy and sell are not the same as the classic free market allocations. As a result, the Capital Markets are not free markets allocating resources in the traditional ways. Questionsthe investors are wrestling with, bankss how far central are willing to go in their replay Financial Assets, then transmit something to the real economy that would result in growth and jobs. How far are the Central Banks willing to go with this power they discovered they have . Ray Central Banks are willing asgo and need to go as far it takes in order to keep the system afloat. Because we are in the late stages, we have a lot of debt. You will see Central Banks Balance Sheets explode. They have to, because the choice is the sinking ship. Haidi that with Bridgewater Associates cochairman ray dalio. Next, we look at how the aipac Retail Industry is faring during the crisis. This is bloomberg. Karina this is daybreak asia. President trumps top Economic Advisor says the administration is increasingly unhappy with china. Larry kudlow says the u. S. Is concerned about hightech transfers via Chinese Companies linked to the military. He accepts the phase one trade deal is making progress, but says u. S. National security is under threat and washington will take appropriate action. China is warning western countries over reprisals over its secured a law in the hong kong its security law in hong kong. London ready to offer a route to citizenship for hong kong residents and washington preparing sanctions. Beijing says it will respond and its critics will accept the consequent is. Consequences. Brussels and london say negotiations will resume next week and that discussions havent collapsed. However the eu admitted officials are working on the assumption that a new deal brexit is becoming more likely is becomingrexit more likely. Arguably the most famous plane in history is reaching the end of the line. Boeing is pulling the plug on the jumbo jet after five decades. We are told the last 747 will roll out in two years, signaling the end of the four engine plane. It will follow the airbus 380 into history as airlines opt for more efficient jets. Global news 24 hours a day on air and on quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im karina mitchell. This is bloomberg. Shery asia has been at the forefront in many areas like digitalization and engaging consumer needs. Our next guest says the pandemic has only accelerated these existing trends. Is ang us from melbourne apac retail specialist. Becauseart with retail, we have seen major disruptions in this sector. What happened since the pandemic . As you said, retail has been going through a big disruption, and in many ways asia was already at the forefront if you think about online penetration as a measure of disruption. Retail in karina and china were already very high and very penetrated. What we have seen now and outlined in our coming publication on the future of retail in asia is that those shifts have accelerated significantly. We have seen rapid shifts and polarization of behaviors around online, around convenience, and around looking for value as we have a more distressed consumer Going Forward. Online gets the most attention. Crisis, we of the have seen online grow up to 65 in a couple months. Now, post crisis, as things return to normal, we have seen a boost in online migration stay at high levels. Shery does that mean we will see a faster death for brickandmortar . Who are the clear winners and losers after the pandemic . Melanie it has been a mixed story. Certainly physical space will come under pressure. We have seen that in markets that are very overspaced or have high degrees of space per capita will expect to see space come out. We have seen a number of retailers in recent weeks and months make announcements about closing stores. Store declared they will reduce their count by 1000, a number of those it asia. We think physical space will come under pressure in many markets. Shery do you expect to see a wave of bankruptcies and restructuring the way we have seen across major u. S. Retailers, or is that something that does not necessarily play out in asia because a different type of consumer and retailer . Melanie the backdrop in asia before the crisis and probably post the crisis is a more healthy growth environment for retail than other markets, like the u. S. I expect that in some more mature markets in the asian economy, probably japan and australia, you might see a wave of consolidation and may be some bankruptcies where formats were already under distressed and suffering from gratian to online from migration to online. These are formats Like Department stores that were already struggling and could perhaps be accelerated by what happened. Shery how much do travel restrictions, particularly international ones that could go on for the rest of this year, probably into next year how much does that weigh on consumption, particularly when you are talking about Chinese Tourists spending . Markets, thoset that have been the beneficiary of tourism from asia will be impacted. The most obvious candidates, retail, leisure and entertainment, restaurants, etc. , apparel in some categories and the luxury market will all suffer as a result of the travel restrictions. Of course, some markets are more or less exposed to that trend. It varies by market. It will certainly be an impact. We are seeing many nations look at domestic consumption, think about how they can fill that gap. Shery you also mentioned these behaviors focused around value as well. How much has the income inequality that has been worsening in asia contributed to this new trend . Melanie apart from the online trend, we havent talked much yet globally around what is going to happen. I expect the consumer is going to be very value conscious Going Forward. We can expect to see retailers respond and think about how they deliver value to the consumer. Certainly those that have a value positioning are going to be beneficiaries during this period. We have low levels of income growth. We know wage inequality has been growing, particularly in markets like china, india, and indonesia. Now we are facing a significant wave in unemployment. 22 Million People in china expected to lose their jobs. 2. 7 million in australia out of work. We can expect to see consumers looking very aggressively to value. Retailers will need to respond. Melanie sanders, appreciate your time today. Dont forget, if you are away from the screen at any point, you can find indepth analysis on bloomberg radio. We are now broadcasting live from our studio in hong kong. You can listen via the app or bloomberg radio. Com. Annual bloomberg for our broadcast of the boston fireworks spectacular, a salute to our heroes in the fourth of july tradition from the safety of your own homes. That starts at 8 00 a. M. Hong kong time on bloomberg television, radio, and. Com. This is bloomberg. Haidi china is speeding up the process of potentially merging two of its largest investment banks. Combined, they would create an 82 billion brokerage powerhouse. Our bureau chief joins us. This plan has been in the air for a while, but how close are we to actually getting a merger . It looks like there have been steps taken toward making this happen by getting some tangible details from people familiar with the deal. There has been no official based on whatbut we are hearing, the parent of chinas largest broker will act as a main buyer in the stake of csc financial, chinas number two broker. Makingould buy shares, it the largest shareholder of csc and pave the way for the consolidation. One detail is that the communist basicallyittees are deciding on the strategy according to the people familiar that we spoke to. That is one hurdle that is cleared. Been pretty have seismic changes going on in the securities industries. Why have we seen this push now . Sharon one of the things is that it is a way for china to compete more effectively with wall street, with u. S. Brokers. The regulators have spoken before on how they want to create an Aircraft Carrier sized broker that can compete with the u. S. This would likely spark more consolidation within the entire industry. Haidi what is next in this opening of the Financial Sector in china . Aaron we have already seen ramping up of the opening, especially as china implements the reforms it has pledged to do. We have seen u. S. Companies especially really take advantage of that. It is likely to provide a fresh jolt to the sector. Asset managers are ramping up investment into the industry. In beijing. N chen lets get you a quick check of the latest business headlines. Sony is said to be weighing a move for a Chinese Technology company, setting up a bidding war. It receivedonfirmed a proposal, having already been in talks with other bidders. Leyou has risen 20 this year, giving it a market value of more than 1 billion. Indonesian fly carrier garuda is betting easing of social demand. Ng will trigger traffic has risen to 16 of capacity after authorities lifted the ban on nonessential travel last month. Garuda says demand should improve further if tourist destinations are reopened. That is it for daybreak asia. We look ahead to the start of training in hong kong and shenzhen. Standby. The china open is next. This is bloomberg. W . W . Uhiono beijing 9 00 a. M. In and shanghai. Welcome to Bloomberg Markets china open. I am tom mackenzie. I am david ingles. We are counting down to the open of trade in hong kong. Lets wrap up this trading week. Congress passing a bill sanctioning china for its crackdown on hong kong. Beijing warns of a strong response saying foreign pressure will not succeed. Tom