On the value of its new business, following the fall since it listed the most. We will be joined by the ceo. Reports amid rising u. S. Tensions and fears of backlash from the white house. More challenges may be growing closer to home. Lets get a quick check of the markets with sophie kamaruddin. Stocks with a subdued start, futures lower. Kiwi stocks higher by 0. 2 . At m a, andlooking south korea raising a red flag. In sydney, stocks hit a fivemonth high. Qantas hosting its first loss in six years and warning it will not make money in the next financial year. 2000 after retreating on the fed minutes. The index going since jumping the most since june on the fed. One analyst said he does not think positioning is stretched, but even with broad dollar weakness, asian currencies have underperformed, but record forex reserves are one key reason. Steady afteryuan retreating from a sevenmonth high, retracing gains it has seen since last month. Focus, callsira in for the central bank in turkey to see rate hikes, but we have that decision in limbo given the pressure on the central bank. Haidi we will get more on the fed. The central bank tempering halfmism over second rebound. From our more analysis bloomberg economist. , how did you read this and what are the expectations for a policy rebound . Andrew thank you. Came out in late july, so we have had a lot since that meeting. The dovishness on the economic front is pretty well understood. Unemployment, subpar inflation, but risks in the u. S. And around the globe, but where markets expected more is some clarity on the future policy course. Ae fed has been involved in review of its tools and framework for over a year, predating the recession, trying to figure out how to get inflation sustainably higher. We think some changes are coming this year, but represent an evolution, not a revolution. We think yield curve control, where they decide to go further curve looks unlikely, and more so after the latest fed minutes, but we think they will threshold onto a unemployment, Something Like 5 . The economy will need to hit rates, not lifting occurring until 2022 or 2023, so an extended period there. It is more that the market has no clear sense that the fed is willing to commit to extra tools. What about the fiscal stimulus negotiations in washington. How do they incorporate that into their thinking . Andrew sure. This snapshot did involve a time when negotiations were at a high point, but we did not get a clear extension of fiscal measures, including Small Business aid and an extension of unemployment benefits. Ofgot a stopgap measure executive action still being implemented, so the fiscal stimulus front is undershooting what the fed was expecting, so how it will approach its next meeting in september, there will be less positive news, pointing to the need for more action, but improving signs, like a drop in jobless claims, so as we get into the back to school seeing problems reopening. We will know more in the september meeting that it did in july, adding more seeing uncerty markets moving forward. Shery apple hits the 2 trillion mark. We will discuss, next. Plus, earnings for aia. Ur interview with the ceo he is widely credited to lead the rise to be chinas top insurer. This is bloomberg. You are watching daybreak asia. The u. S. And china revising talks, after a conference was called off. Sources say the review will happen soon, although a precise date has not been set. President trump said he killed the talks. It never made it onto the official agenda in washington or beijing. The u. S. Is stepping up opposition, terminating three agreements with hong kong, the surrender of fugitives, transfer of convicted people, and tax exemptions. The state Department Says it indicates the concern over beijings growing influence in hong kong and the control over legislation. The uae says plans to establish notal ties with israel will salvage a plan will salvage a plan, normalizing relations c, saying it is a Natural Evolution of reality. It is seen that all but ending hopes of a palestinian homeland. The eu is rejecting the Election Results in belarus, stopping short of calling for a new vote. Several leaders say they have been able not been able to reach president lukashenko by phone. There have been warnings from moscow not to interfere. The eu claims that the vote was neither free nor fair. Global news 24 hours a day on air and on quicktake by bloomberg powered by more than 2700 journalists and analysts in more than 120 countries. Shery apple becoming a to trillion dollar company. Trillionght 2 company. This is the latest example of the rally in tech stocks driving markets. , aaronow from pimco brown. Great to have you with us. Rallye seen this recent that seems focused on tech stocks and people say we have not seen Something Like this dot com days. What do you say . Thank you for having me. You have to look at the tech sector delivering. Is higherech sector on higher weight of global indices, over 25 percent of the s p 500. When you look at the profits out of the tech sector, they are contributing a larger percentage in terms of total profit share at ae market, growing faster clip. The return on equities is twice that of the rest of the s p 500, so d accelerated move and continued appreciation is justified given the profitability they are delivering. What about the backandforth between the u. S. And china, will that have an impact for Tech Companies across asia . Do have to be specific in terms of the exposure you are taking. Certainly there are headline risks ahead, and you will see think u. S. Take a harder stance against china, and the tech sector is in the crosshairs of that reciprocal action we will techbut by and large, the sector specifically in china is largely servicing the chinese economy, and for those domesticallyoriented technology names, they are fairly well insulated from falling and the crosshairs of u. S. China trade tensions. Shery i want to get your s positions. M a lot of people are saying we are seeing momentum, dollar iskness, but the euro region seen to recover quicker than the u. S. , so bullish on economic prospects there as well, so why do you prefer the theme of u. S. Exceptionalism when there are so many problematic factors with how the economic rebound in reopening story plays out . Erin it is a great question, one we have been discussing internally. I will separate it. Segments like certain of the emergingmarket asset class, but we like her currency duration, rather than equities rely onhich largely strong Global Economic growth in order to outperform, so why do could see temporary emergent area emerging markets outperforming, in order to have sustained emergingmarket outperformance, we will need to see a global rebound back to the levels we saw prepandemic, and we are not expecting that until 2022. While we are seeing a gradual itling of economic activity, is slow and will take time for the economy to really heal, so we would rather own duration assets in emerging markets, where we think there is good value, rather than owning growthoriented assets like emergingmarket equities. With respect to european equities, we think there is certain value in certain segments of european equities, but the challenge with owning european equities overall is the index is heavily weighted in more oldeconomy sectors, unlike the u. S. Market, which is a techoriented, new index, so certainly it makes sense to own certain segments of the european services, even some European Industrial companies. When you look at the composition of the market overall, we think it is disadvantaged given the sector weightings within europe given the u. S. Market. Shery we have to haidi we have to leave it there. Holding fire on leverage loans and other areas that have benefited from government onervention, the ceo of company said there will be reckoning if asset prices dont reflect reality. This is an unprecedented time in terms of the fed and its comparables outside the United States and governments have intervened in markets, so that has divorced the actual assets on the ground, so we have triaged the market, looking at areas where the actual facts of the matter upon the ground are showing through. And so, i would divide that into credit,ike oil and gas transactions in aviation, retail, and Small Business lending in north america, where basically the damage has been so great that it has begun to kind of move independent of what any Government Agency or anyone else would seek to prevent. They are other areas like real estate loans that are just beginning, the real the effects of not only the asset bubble weve had over the last decade, but also the adoption of technology in the way we work and live, and its effect on commercial real estate is just beginning to show through. On the loan side in the Second Quarter, we have seen Bank Earnings move to reserves, and we will see more with that with the expectation those loans will move along, along with properties, etc. And then there are things where we have not seen any movement in response to the facts of the matter, leverage loans, istgages, abs, rbs, and that just a question of time, after which there will be a reckoning. Haidi there are opportunities now, but will be a bigger opportunity down the line. Where are you holding on to your fire and strategically investing . Give us a little bit more detail. Dan we are certainly holding fire in these areas that have been particularly affected by the intrusion of the government into the marketplace. We think there is a lot of coming. The numbers are frequently very, very poor, and not likely to improve materially, but getmately people have to there before investmentgrade owners of those securities want to sell. On the other side in oil and gas credit, it has been tough for the last few years, march was the final straw. You are seeing her assets in and oil andorth american gas levels that are favorable, compelling, and dont require any view on oil and gas prices, which we have none anyway. As you noted also, retail is a big one. Obviously the experiential aspect has been taken out from retail. Pool ofit as a intellectual property and real estate that really fundamentally need to be restructured, so we are involved in lending against the collateral, liquidating that collateral, and will be several years of that to go. When will we see the next leg lower . I know you mentioned this will go on for what could be years, but surely there will be a hit to the consumer without more stimulus, and soon, and that will cause another round of bankruptcies or what have you. Dan well, it is interesting. Since covid and government intrusion, when we look at the aps and consumer behavior, we have largely seen material over performed to what we expect, and that is because a number of people are receiving aid not likely to persist indefinitely, so the reality is that none of us really know what we call the undisturbed consumer looks like, and certainly the security backing up those obligations take into account virtually none of the probability or conditional probability that could take a leg lower. Up next, oil at a fivemonth high, as members are urged to comply with output cuts. We will get a look at were crude is heading next. This is bloomberg. S bloomberg. Shery a quick check of the headlines. Said to ben china is facing issues. It has a joint venture with bmw in china. One of its bonds tumbled 35 . Million in pay 200 outstanding bonds this year. There are questions whether the company has the financial ability to do so. President trump calling for a aftert of goodyear, maggot apparel was shown as being unacceptable. Apparel was shown as being unacceptable. One group has frozen half of the 900 million it wired to revlon creditors. That one 127 million entity is refusing to send back. The same judge halted 170 4 million at the gate capital. Citi is suing all three firms. It wired as some more than 100 times two big. Big. Slipping, this foil slipping, this after the fed tempered optimism. The outlook for the market remains fragile and uncertain. Is on theoil trading line. What did we hear from opecplus . Thanks. Great to be with you. The meeting was very interesting. We had saudi arabia and russia coming together, showing how they are complying to the curbs, sending this unified message to other producers. There is concern there will be cheating among other countries, especially like nigeria and iraq. The big question is if there will be cheating by those producers, will saudi arabia and russia join, especially with prices at these levels . In the meantime, what is the demand side of the equation looking like . If we use todays meeting has guidance, russia says the oil market remains fragile, a lot of uncertainty ahead, showing the pace of recovery has been slower than expected with covid. Arabiasave Saudi Energy Minister saying oil demand could return to 97 of prepandemic levels by the fourth quarter, so that is sitting that is encouraging to me. We will have to wait to see if that happens. See a we started to slight presumption that u. S. Shale returning to exploration as well. Are we expecting exploration to return in full . With quail around 40 a barrel, a lot of producers can ramp up, especially if prices stay within this range and moderate in the mid 40 a barrel range that would be a concern for opec, going to all this up, thatnd shale ramps cookie problematic, right . That could be problematic, right . Haidi yes. Since 2010. The most the chief executive and president joins us next. This is bloomberg. Haidi a check on the first way it this ally. Onto therris stepped stage as the potential Vice President and layout why the democrats should win in november. And sharing the spotlight with former president obama, senator warren and nancy pelosi. The u. S. Remains the focus of the coronavirus pandemic, but that there are signs infection rates are starting to slow. They arelso indicating easing. Hong kong has reported the slowest number of virus cases since the latest outbreak, as low outbreak. Mid july. 60 in they are considering extending the state of emergency to prevent a new wave of cases and three months without a local infection. China is facing its highest level of flood levels. What is expected to be the biggest surge in four decades. They have suffered severe flooding since june. It has caused around 26 billion in can in damage. Most sinceing the the insurer went public in 2010. It has made it harder to meet prospective clients. The key measure of profitability slumped 38 . Lets cross over to hong kong where yvonne man is joined exclusively by the chief executive. A familiar face on bloomberg tv, a former ceo. Ceo atthe role of another company. First and for your first interview since joining the insurer. Good morning. It has been a wild. Lets talk about the first half. It was a tough period. You are dealing with more restrictions on the region. Tell us a little bit more about what you are seeing in terms of Business Value growth. Signs of aing bottoming out now . Yes it was a very challenging first half of the year with the whole world on lockdown. In the context of this environment, it was down, but we see a strong recovery in the months of may and june. The momentum in china, vietnam, even in markets like thailand,. Ndiana the men tell him that we see the momentum that we see has been quite encouraging. Yvonne china is perhaps doing a little bit better. Given the signs there situation that we are seeing their . Yes. There. Yes. China came out of the pandemic little earlier. Year on year, month on month growth. Recovered tomuch precovid levels of reduction. Yvonne tell us about the dislocation that you are seeing. Just given the challenges of the pandemic, how have you had to adjust, in terms of how you hire people and how you are living around now. We have digitalized most of our processes. High. Very for example, in singapore, even after coming out of the circuit of new, the proportion business coming through digital or remote selling remains at a high level of 80 . , all they high business is coming through inward selling. 99 comes through remote selling. Your business was done remotely. Do you see this as a sense of a permanent change in the industry . Complicated planning process for the future. Out, and agents are able to see the customers we see in china a reversion. Yvonne you obviously had the chinese experience and you have this enthusiasm for technology. How do you see the technological side of development . Do you want to be a leader . Yes. It is a very different company, a great company. It has done a lot. It is very focused on the use of technology to power business. Transforming our technology to much more cloudbased to allow us high levels of automation to achieve 90 . The whole Customer Experience will be transformed. Yvonne there has been talk about stock connect being wellconnected and insurance connect has become a buzzword. What shape or form do you see this initiative taking shape now . What did markets need to do to be ready for that market flow . Seeingially, what we are in the set up there are a lot of mainland customers who like to buy hongong kong kong companys insurance, with the restriction at the border. T is difficult for them will help these customers. Yvonne what do we need to regularly see in order for them to open the doors . . Ow does it affect affect you and what you do on the mainland . Premises within china. The unique in the sense that we are 100 ownership. We do not have to share any of the economics with a local partner. Whether the customer buys from hong kong or on the mainland, we get 100 of the economics of it. Yvonne what kind of factors do you look at when you try to expand . Do you look at geography or distribution platforms . Have seven major. Rovinces in beijing these are the geographies that we are operating with now. We can go to more provinces. In china is like a midsized country, so we are on 10 to 12 new provinces in the near future. They are talking about hundreds of millions of customers. We have seen new Business Value theyre continuing to be sluggish. With the National Security legislation coming into effect, what considerations do you make for companies . What are you looking at now to stay resilient . We are headquartered in hong kong. We remain very optimistic about hong kong. We are an asian focused company. Kong, it hast hong the best business and environment, compared with the operating inare the world. Remains good for businesses. Yvonne do you think, if they relax restrictions he took a lot of your business from mainland visitors. Do you see those mainland visitors coming back the way they did before . Perhaps som