National security and tiktok says it is pure politics. And the official nomination of President Trump at the republican convention. He says his opponents want to steal the election. Haidi we have again u. S. ,arkets with fresh record highs a little relief given expectations of the fasttrack process when it comes to vaccines and therapeutics as well. The s p 500 notching another alltime high, there is optimism the virus will not hamper growth. We are seeing a muted session on it comes to the futures sessions, flat at the moment. Little negative when it comes to the start of trading in asia. The nikkei to do five trading in chicago seeing downside about 1 10 of 1 . Dollaryen holding. The biggest declines in the g10 space was the kiwi and looney. We are also watching the price of crude as we have twin storms approaching. 80 of refinery output in the gulf of mexico has been halted, potentially seeing some impact when it comes to crude prices, which did rise, gasoline hitting the five month high overnight. That price is moderating and it comes to trading in new york crude at the moment. Shery and it is official, the u. S. China tussle over technology and trade is now in court. For the latest on tiktoks lawsuit against the Trump Administration, lets bring in david ingles. What is tiktok claiming . Claiming that, to borrow a phrase from the chinese, smash and grab is the simplest way to describe it it is unconstitutional and violates the right to due process. They basically have said they have provided more than enough documentation to support, among other things, that they have taken extort an measures to ensure things like Data Security and that despite that all of this has been ignored and theyve not been engaged by the u. S. Government, have a look at this. Im going to paraphrase this to make it simple, that the u. S. President is taking plaintiffs property without compensation. It says it has been ignored multiple times. In other words, again, it is a violation of a right to due process. Andcase was filed in l. A. , you will see it is against the u. S. President himself. Hearinghat are we also about a tiktok employee filing a separate lawsuit . One was in san francisco. A few hours after the case was l. A. By bytedance in patrick ryan, at google 10 years and then joined bytedance a couple of months back. His contention is essentially as well, unconstitutional, that he hasnt received any notice and that the ban was an effect would in effect the private from having a job and a paycheck. As a u. S. Citizen, he says i see a clear due process problem. That one is in san francisco. Shery what is the white house saying . Also what is being said about tiktoks chances . David it is a tough sell. For one, and it is separately in our story, decisions made by the committee of Foreign Investments are all but impossible to overturn in court. That is the legal reality. We are getting a comment from james dembski, the executive director at the Berkeley Center for law and tech. He says courts generally do not challenge the president when he invokes national security, that is one. The other is that it would be a tough sell for tiktok or bytedance to establish that they did at the beginning have the First Amendment right. That is the legal challenge and the reality is that seldom do we see these things overturned by courts when it is in fact a decision made by the committee on foreign investment. All right, david ingles in hong kong talking us through some of the legal intricacies when it comes to tiktok and wechat. We have some breaking news across the bloomberg. To anation when it comes andisition between kirin lion dairy. We had heard airily early the australia was backing buyout of one of its best one best known dairy brands. That has now been terminated. We know that theyve been on an acquisition spree for overseas assets after they purchased the dairy and a formula producer here in australia. Lets get you the first word headlines with karina mitchell. Karina latest virus data indicates infection dates rates are declining in the u. S. Spanish cases fell from four month highs while germany is scrapping plans to test travelers from high risk regions with Health Service capacity. With restrictions on social gatherings. Hong kong investigating the reinfection from someone who recovered from the virus in april. The 33yearold man was found to have a second infection while passing through the airport returning from europe. Researchers determined he was infected by separate strange of the virus that could circulate even if patients gain Natural Immunity. President trump marked his official nomination at the Republican National convention by once again criticizing mailin voting and saying his opponents are trying to steal the election. He launched into his attacks even before he thanked delegates in charlotte for their backing. The convention opened with a few hundred people in the hall, different from different from previrus events. Oil fell in asia. Systemse two threatening refineries. Storms marco and laura have the potential to cause damage. In new slid for 10th york after earlier rising 7 10. 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. Im karina mitchell. This is bloomberg. Ahead, Icbc International Research Sees more new drugs being launched in china at a faster pace. What that means for International Pharma Companies Already struggling with agings bulk with beijings bulk buying. But first, an economist owings us. Joins us. This is bloomberg. Alert crossing the bloomberg when it comes to numbers out of oil. The interim Dividend Per Share of essentially not declaring an interim Dividend Per Share, and also revenue for the first half of 625. 6 million. Debt coming in at 2. 33 billion. When it comes in to the analyst ratings on this, we still have 11 buy, swap, hold. Costs, when it comes to the Oil Equivalent to 10. 50. 9. 50 production more in line more or less in line with expectation. We will continue to watch those. But the net loss of 266 million coming through from oil search. Heading to jackson hole, central bankers have been meeting virtually this week to discuss Monetary Policy. Our next guest says the focus has shifted to the recovery, which will be longer and more complicated that the downturn itself. He joins us now from seattle. Great to have you with us. Talking about this idea of markets being very excited about any signs of a rebound, that that is vastly different from talking about a true, sustainable recovery. Paul right. We will not see a vshaped rebound some people were talking about, we were never really in that camp. It will be multiyear and different across sectors. Some sectors are doing ok, such as tachy, parts of financial services, Health Services, and we know what got hit hardest by social distancing. When we put that together, we will talk about a multiyear recovery where we dont recover all of the lost output or get back to precovid unemployment rates until 2022 in some and in some cases 2023. Haidi as we head into jackson hole, we are seeing framework changes from the fed, does it feel like we have hit peak Monetary Policy . What can be done . It feels like were in a situation where we are looking for more than for more of the heavy lifting to come from fiscal. Paul we agree with that, the Monetary Policy swung into action early. It was effective at stabilizing the market, etc. What the heavy lifting both protecting the most impacted groups as well as link the foundation for the recovery will have to come from fiscal policy. Maybe the good news is we have a bit more fiscal space than we thought, there were worries going into this that with the debt level so high there were not be enough fiscal space to tackle the next crisis but we are here with unprecedented fiscal deficit and offbalancesheet guarantees. It looks like at least in advanced countries, fiscal response has been robust and should do a good job of cushioning the downturn. Shery yet in the u. S. We are still struggling to pass another round of fiscal measures and are at a debt loss. What are the risks of a premature austerity, intended or unintended . Paul i was going to say, this is not premature austerity. We flagged that as a risk where we get fiscal religion too early in the recovery process. This is just the government not functioning properly. There is a clear case to extend the fiscal stimulus, whether it is ppp or any other measure that supports the combination of Small Businesses and the labor market. It is unfortunate this hasnt happened in the u. S. And the risk is we get a flattening of the recovery building some momentum. We will have to see in the coming weeks whether that happens. We are still looking for a good balance in q3 but not a good balance in q3 but not as what we were hoping for. Shery after tapping the bond market at a record pace, forms firms more indebted than ever before. How much of this overhang will act as headwinds in the longterm . Paul its hard to get the data on actually what the borrowing was used for. Some of it was used to build up a cash buffer, so it was smoothing. Very little of it went to stock buybacks or to new capex. Its a question of whether it was used to coffer cover operating losses or buildable war chest. But Market Access was there and it will become clear in the coming months when we get more data in. It doesnt seem to be a huge constraint right now. As we just this gust, the constraint over the next month or two as the covid situation its wobbly is to make sure the fiscal support is still there because we are not seeing enough private sector demand and there will have to be Public Sector demand to support the recovery. See the loss in labor market activity being a global trend . We are seeing all sorts of estimate, a quarter of u. S. Jobs not coming back, 60 of restaurants, for example, and stores, not reopening. What kind of permanent structural shift you see in these numbers . Paul there are two parts to that. One is how much output will be lost permanently. If we think as the economy on a willprecovid, post covid be on a lower but parallel path. But you are right, we will have destruction of physical and Human Capital or labor and Human Capital or labor in some of these sections sectors hit hardest, whether it is restaurant or entertainment. Some of that will come back in the recovery and we will see shifts in the composition of output. There will be more online stuff, security, hopefully more Green Investment in infrastructure. We will have to resort the labor market, resort some of the sectors of the economy. Thats why we will not see a vshaped, it will take time and the multiyear bounceback. Hopefully we get back to a decent path when this is all done. We still have 2 growth in the u. S. And we dont have too much destroyed labor and capital. U. S. China the tensions and uncertainty going into the november elections, how concerned are you about a bifurcated Global Economy . Paul bifurcated is a strong word. The u. S. And china are still pretty linked up but we know where the tectonic lazar rubbing rubbing, around data privacy and security and around health security. I think that came to the fore the next couple of quarters. There will be areas where the u. S. And china will agree to disagree. We could have some duplication. We already see some duplication. Think of the number of firms operating, u. S. Firms operating in the Chinese Market and serving the Chinese Market. It is hard to buy these stories of a total bifurcation or separation. Maybe we call it a partial divorce. A partial divorce on those two or three areas i mentioned, and hopefully both sides can find their way to keep the relationship going outside of those. Something approaching business as usual. Shery as an economist do you factor in those components . Internet, different standards, and companies having to adhere to different regulations and not really talking to each other. It will raise the cost of doing business worldwide and also affect Global Growth. Do you take that into consideration longterm . Paul duplication is clearly wasteful, that is a good point that is right. On it will hit china more than the u. S. If you think of chinese growth over the next decade, chinese growth will not come from or labor or capital, it will come from productivity growth. Interacting with the u. S. And the europeans on Technology Transfer and accessing Tech Knowledge and ways of doing business, etc. Will be the growth driver for the chinese economy over the next decade. If that process gets blocked or slowed, we get slower productivity growth in china, we get slower Global Growth. Remember that china alone is driving one third of Global Growth and if chinese growth comes down a notch because they have slower productivity growth, it takes everyones growth down. That is something that could potentially move the growth needle over the next decade. Shery what happens if we get a vaccine sooner than expected . Do you see demand shooting up and what happens to emerging economies that right are suffering so badly, like india, really dragging on your Economic Forecast anyway . Paul that is one positive risk have flagged. We are not epidemiologists but we have some inhouse we are working with. Our working assumption is we get a global vaccine discovered and distributed sometime the middle of next year. It looks like that could be on the conservative side. That is good and of itself, but something we have not talked about, which is the lack of physical space in some of the emerging market countries. They do not have the fiscal resources to cushion the blow, economic or humanitarian, or support a recovery. The sooner we get a vaccine, i think you are correct the relative winners in that scenario everyone will win, but some of the bigger ems struggling with the crisis will be the happiest ones if we get a vaccine sooner rather than later. Haidi fingers crossed there. Great having you on. S P Global Ratings global chief economist. We will discuss more about the virus. Thefirst confirmed case of infection has been confirmed in hong kong. We will get the latest on that and the race for treatment, next. This is bloomberg. Scientists in hong kong firstan armed the worlds case of reinfection from someone who recovered from covid19. Michelle, we know the patient did mount an immune response but it was still a new infection. What are the implications of this . Michelle we know that can get a very longlasting infection people have been testing positive for weeks and months even after an initial infection, and researchers and doctors were not aware whether that meant they were still infectious. What we see here is the first definitive evidence that someone had a coronavirus infection, completely recovered from it, and then picked up a new virus. The reason why that happened is there was a genetic shift in the virus itself so that the second infection was slightly different from the first. Haidi what are the implications then what this means for a and the ideacacy, if we haventibodies, different strains . Michelle we know there can be drift in this virus. What that means is in an initial infection and perhaps in a vaccine, it will not provide magic bullet protection against future infections. You can still be vulnerable if you get infected again, if you come up with a different type of the virus. Is, the patient, the 33yearold from hong kong, did not have symptoms the second time around. Researchers are saying that does mean perhaps he had some protection from the first infection. While he can transmit it and can get infected again, most likely it would not make him sick and that is important for Natural Immunity and for vaccines. With thechelle cortez latest on that reinfection case. You can get latest on the hope for a vaccine and other stories you need to know to get acquainted with todays issue of daybreak. Bloomberg subscribers have it on their terminal, its also on your mobile app. You can customize it so you just get the news on the industries you want. Apple plans to start reopening Retail Stores in the u. S. That had been closed by covid19. Sorcerers say they will start with a small number of outlets this month, with customers served on appointment only. Apple closed stores back in march and began limited reopening in may but had to close more than 120 because of rising infection numbers in local areas. Cutting the price of diamonds after the coronavirus cuts into the jewelry industry. The number one producer will lower the price by 10 . Rivals de beers and rivals sold less than last year. Companyy revenue for a bounceback after the pandemic. The Worlds Largest Meal Delivery service announced a rise in the june quarter. Daily deliveries in august hit 40 million, up by 10 million in just a year. Tencent jumped the most in a month on reports white house officials are saying a ban on we chat will not be. U. S. Companies will still be able to use the messaging app in china. We are told u. S. Officials realized an allout ban on wechat could be devastating for american retail and other industries. Still to come, donald trump formally nominated for a second term. What to expect from the fourday republican convention. He is speaking on all four nights. That is next. This is bloomberg. Hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. He scores stanley cup champions touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. But what if you could stdo better than that . K. Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. President trump has floated the possibility of decoupling the u. S. Economy from china, saying beijing has treated america badly over many years. Speaking to fox, he said the u. S. Has had nothing from china except being ripped off. Beijing says it supports Chinese Companies in the face of potential u. S. Bans. China supports companies in using legal weapons to safeguard their legitimate rights and interests, and take all measures to safeguard those rights. Karina indonesia reversing plans to reopen the tourist island of bali next month as virus numbers continue to spread. The government says travels will be barred at least through the end of the year as the area is in red zone. They lifted the debt. Eiling, 60 of gdp new zealand is extending the lockdown and auckland by four more days alone as it looks to contain a coronavirus outbreak. They are expected to be lifted sunday. Auckland was put under stage iii restrictions august 12 after four new cases were discovered, run ofthe countries being free of covid19. A german doctor is treating an unconscious russian Opposition Leader and they said they found poison in his system and he was likely attacked deliberately chancellor Angela Merkel is demanding answers from moscow. Flown to berlin for treatment after falling ill. The kremlin has not responded. 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. Im karina mitchell. This is bloomberg. We are just getting breaking news across the bloomberg when it comes to china consumer confidence, the index when it comes to australia consumer confidence, the index rising to 92 born kevin. To 92. 7. Rising that was a tick up. We do have an extended lockdown for another three weeks in melbourne. Shery in the u. S. , President Trump marking his official nomination for a second term by attacking opponents and mailin voting. Lets get a preview of the Republican National convention with our contributor and Political Science professor. Great to have you with us. Give us your take of what President Trump and the Republican Party needs to achieve this week. What they do want to achieve, we are told they want to present an optimistic vision for the country more than the democrats presented last week. You were just talking about the pandemic. They want to be optimistic about the idea of a vaccine coming and the idea of an economic recovery after that that will bring us back to what donald trump thinks are the areas he is strongest in. He not only things that come up the polls support that, that the American Public does give him high marks in terms of the economy. They want to stress those and talk about what he is going to do in the next four years if he is reelected, and turn the page on some of the really bad hes had the last few days, everything from the intel report to rbc the issues involving his sister and some of the other news that dragged him down in terms of the new cycle the last few days. The negative news he has been facing, including an investigation by the new York Attorney general about his company and his assets, how important is that he stays on message and will he be able to do that . Jeanne it is really important he stays on message. We saw him out just afternoon east coast time, he was talking in charlotte and he is there all day today and he is supposed to talk again tonight. Onis not rate about staying prompter but he does entertain the crowd and he did that today. I think he wants to make news that is positive for him and turn the page on what has a difficult news cycle for him. You mentioned the attorney general, that is the latest in a series of stories that have really dragged down the way people are seeing the convention rollout. Haidi setting up for a contested election with President Trump continuing to double down his criticism of usps and mailin voting. Trumprd from a major donor, the postmaster general. Jeanne he was before Congress Today and he said he does not find the president s comments about questioning the ability of the Postal Service to deliver ballots securely, he does not find that helpful. While he is a major donor to the president and was nominated to this position by the president , he has distanced himself today from the president s remarks about questions about mailin ballots. The president continued today saying democrats are trying to harvest votes, trying to steal votes, and trying to steal the election in the same way he claims in 2016 mcats unfairly investigated his Campaign Democrats unfairly investigated his campaign. Haidi our contributor their ndc dc. E get into there in we have special coverage of the Republican National convention. Coming up next, china changing how it is buying drugs, crowding out pharma giants from the west. We will hear about the implications. This is bloomberg. Oomberg. Lets look the asian part of the session, the u. S. Reaching near highs on vaccine and therapeutic optimism. This tuesday, asian futures mixed across the board. I want to highlight korean markets, volatility for the aspi, price swings rising to seven week high on monday on a second wave of concerns put the economic recovery in south korea at risk. More choppiness likely as investors awaiting a decision, a third possibility could be on the table extending a ban for certain stocks or markets. Corner, anthe m a dairy to to sell lion , Foreign Company investment authorities are not likely to give the deal a nod. It has been scrapped between these players. Takata isto keita selling its healthcare unit for 2. 3 billion to blackstone, which plans to take it public in about five years. The price tag was lower than the 3 billion expected, but the deal is part of takedas plan to shed debt after it acquired shire last year. Turning to chinese pharmaceutical stocks, nomura impact on the third round of book buying will be minimal. The health care gauge has been gaining ground this year, up about 40 46 . Second only to Consumer Staples and leading 2020 gains for the benchmark. Shery for more on the battle between chinese Pharma Companies and multinationals, we are joined by our guest. Great to have you with us. We saw the results of chinas latest round of drug procurement, virtually shutting out foreign pharmaceuticals. How has this new centralized system in china fundamentally changed the game for pharma in china . This is notuld Say Something new. [indiscernible] the past two years [indiscernible] fundamentally transforming the pharmaceutical sector. [indiscernible] the centralized procurement, no matter who the chinese have two categorize to categorize. [indiscernible] in some extent cases, slashed more than 95 . [indiscernible] pharma, thechinese process is [indiscernible] most of them can only make generics. So they would say goodbye to Public Hospitals in china that account for 70 of total drug sales. That being said, they might go out of business. [indiscernible] , the impact onnd their financials [indiscernible] because they have more rich portfolios and they can bring more drugs into china to offset the pain. Shery what about the fact that its all about cutting prices . What about the fact that centralized drug procurement is about getting a cheaper and cheaper . Does that have an impact on innovation and research and development and bringing in new drugs to the public . Jialin we dont think so, because on the macro level, we think pressure on traditional [indiscernible] patient accessibility to drugs will improve. We also see chinese farmer are not pharma are not only lowering price of drugs, but [indiscernible] about quite optimistic drugs developing in china. Haidi what about the provision of drugs for patients . We have seen typically, especially when it comes to high , access hasrugs been problematic and extremely expensive. Is there an opportunity now with this kind of progress being made that you can get cheaper, more effective and widely distributed drugs in that Health Care System . Haven it is true, you chinese pharma participating in the centralized government [indiscernible] take their place in the market. [indiscernible] patients can get a lower price for the drug. Prospectst are the for a covid19 axing from china . How covid19 vaccine from china . How are they faring in the competition were seeing between china, u. S. , u. K. , even russia . Expert, but not an i would say it is quite interesting to follow the dynamics. World is working on the andlopment of the vaccine antibodies. [indiscernible] haidi we are all crossing our fingers for a viable and safe vaccine sooner rather than later. We appreciate your time with us. Update when itan comes to the virgin purchase. Aeditors are set to get 9 30 return on the latest news we have at the moment. Alternative, it would have returned around two thirds. That plan has been pooled. We are continuing to watch with the details are. We are getting a little closer when it comes to what the potential restructuring looks like before Virgin Australia. , a couplef creditors of the creditors are withdrawing their arrangement proposals according to a letter sent to deloitte. Updatescontinue to get on this. Shery another company we will be looking at press play. Why investors are flocking to nintendo. There market cap rose by 3 billion on monday alone. This is bloomberg. Haidi we will be watching nintendo when tokyo opens for trading, the company adding another 3 billion in market value on monday with u. S. Investors helping to fuel the rally. Our guest joins us. What is going on with the stock price . Peter it has been a bit of a surprise. Nintendo shares have in on quite a rally this year. As you mentioned, the stock had three billions in 3 billion in market cap on monday, yesterday. Investors caught on to the businesss promise and they are up 70 from their peak. It has been a strong rally and was boosted by nintendo reporting earnings earlier this month that beat all estimates. Switch game console has proved popular during the pandemic, and in particular animal crossing is popular and investors see that as an opportunity to build on financial gains the company has had so far. Shery and the robinhood app playing a part . Peter yes, it is interesting to see this. Robinhood has become popular with Retail Investors. The investors have driven up a number of stocks around the world, including tesla and thisly kodak, when it had apparent contract with the u. S. Government. In the case of nintendo, it is a sign that robinhood investors are going global, and in particular looking hard at some of the stocks in japan. Nintendo is one of the most popular among robinhood investors in japan. Sony is number one according to the last data we saw, new nintendo number two, softbank number three. Theres a lot of excitement among Retail Investors for nintendo and the prospects for the switch and animal crossing. Haidi what about future drivers of growth . We are waiting to see what the new game stable looks like and potentially rumors about a new powerful switch console as well. Peter that is exactly right. I think the risk we have seen with robinhood as a platform is that Retail Investors can flood into a stock and then flood out very quickly. We saw that in the case with kodak in particular, drawing gains separate from the fundamentals of the company. In the case of nintendo, what investors and analysts are looking for is how consumers react during the pandemic to the products they put on the market. Thatisk for nintendo is its big competitors sony and microsoft will come out with their own game consoles that will still some spotlight from the switch and other successful products they have. Been out assing has while and game players want and different all the time, so they need to follow up with additional game titles to build on the success of that and help extend the success of the franchises they have out there now. Shery peter, great having you on. Lets get a quick check of the latest business flash headlines. A u. K. Chipmaker says it will retain its internet of things platform and data units, canceling plans to spend them off to softbank. Inspection shows they can realize the same benefit while remaining on dependent under the group umbrella. In 2016,bought arm saying the company has the potential to grow rapidly as productivity expands. Oil search is dropping its dividend after low Energy Prices in papa new guinea in alaska brought a firsthalf loss. Shortfall through june, compared to a 160 million profit six month earlier. They will review the situation at the end of the year. They paid a dividend in 2019. At 2 45speak to a guest sydney time. For ipo, has filed saying revenue has more than doubled on the year. Snowflake was valued at more than 12 billion in a february funding round and is listing at 100 million. Fromised 179 million investors including sequoia and salesforce ventures. The ipo is being led by Goldman Sachs and morgan stanley. Acquisitions saw 200 million of stock in its ipo last friday, and is setting its sights on a new acquisition. We spoke with the ceo, who founded a Restaurant Franchise and about the special acquisition company. We are looking for a good brand we can make great. You do that by making the brand stronger, more relevant, resonating more with the consumer, or product driven, culinary focused, more technology application. That is key along with branding. And we want to fold in operations and a great talent team for real estate for future growth. I am curious, now youve got this launched, do you have a short list . You can share the names with us if you like, i understand if you dont want to. Are you able to execute in short order . We have a shortlist of 100 down to about 10. We will chip away at them three at a time. See who is interested. Toare pretty agonistic as who of the 10 we could get, we think they all could be good and many great. We look forward to the journey on that. We would like to move fast. Obviously ruby tuesday, great success, you have proven your mettle in the industry, but at the same time, all of those you have mentioned, if you are agnostic it means they are all doing a good enough job or there are things you see in each one of them that you could shine up like a diamond. You or themttract to you, if you like, why should they pick you . Be ifhink one, it could it is entrepreneurial operated or family operated, maybe they would like to be public. Us in a Public Company could be a great benefit to them, minimize their risk, but in addition, you get a great team. Fasteam, we have run casual brands, fullservice brands, large to Million Dollar companies, international, large, small, we have done it all. I think we have some wisdom and could help Smaller Companies quite a bit. When you move to private equity funds, these are challenging times. Some funds have time limits, of course. It might be the right time to have a transaction. So Different Reasons for different folks, but we think we will be a positive to either group. Obviously the challenge right now if youre in this business the covid19ven lockdowns and that some people are afraid to go out and reengage. Is it precisely because we are in crisis mode that you have this opportunity . Pandemic has, the created crisis but with that comes opportunity for sure. You just have to be selective. The segment we are looking at hasnt been as affected as much as the overall segment. Who is getting killed are the fullservice restaurants, larger dining rooms, versus drivethru, the smaller dining rooms, fast casual, etc. Fast shery acquisitions founder speaking to us. Coming up, and exclusive interview. A ceo joins us in the next hour. A guest joins us for the market open. This is bloomberg. Shery welcome to daybreak asia. Inm bloomberg headquarters new york, i am shery ahn. Wall street extends its record run, investors increasingly optimistic for a virus vaccine and the pandemic drag on the recovery. A new potential health scare in hong kong, as a man is diagnosed with coronavirus just months after he recovered from the virus. And tiktok, suing President Trump for imposing a man in america, imposing a ban in america over security issues. Australia coming online. Lets get straight to the Market Action with sophie kamaruddin. Soph . All right, does look like we have got a bit of an upward momentum when it comes to trading so far in asia. Trading in japan there, as well. Lets take a look at how we are going in just the first few minutes of trading. We had u. S. Stocks closing in terms of the s p 500 as well as the nasdaq, again, at these record highs, as we get signs the Trump Administration make fast track approval for therapeutics as well as that plasma authorization from President Trump and the fda yesterday, seeing just over 1 with the nikkei 225. Nintendo with gains. The topix also up. Pretty much unchanged from the dollar yen after a rebound for thehe g10 complex dollar, and the japanese 10year yield not moving much either, shery. Consumersgy, christian ore stocks leading gains. We have heard from the energy, Consumer Discretionary stocks leading gains. Ratee headed to the bok decision thursday. We are watching this as we are seeing the virus across south korea, the government warning of a nationwide outbreak. Haidi . A look at, lets take how new zealand is doing. The virus in this part of the world, as well. Upside by about 3 10 of 1 when it comes to trading in aussie stocks. The alltime in on high as auckland extends the continuation of the outbreak of the virus, the index looking february, the kiwi the first to erase those losses in june thanks to the pandemic handling. We are also looking ahead to trading over in hong kong, as well, as the tech headwinds continue to plague asia tech stocks. And we get more on that, because the asian tech stocks are running neck and neck in august. We continue to talk about the dominance of the tech sector being a significant drama in both of those rebounds since march, but our next guest says the alarm bells are ringing for tech. He joins us now in sydney. Always a pleasure to have you, nader. Lets start off with this. The rally we have seen in asia tech stocks, taking a bit of a breather as of last week. From ai index falling record in early august. Taiex, thehing the weekly loss. So we are starting to see if not in the u. S. , in asia, some sense of, i guess, caution returning for the froth we are seeing in the tech sector. The first economic rebound was all led by the pent , computers and computing components, so you look at regions like korea and taiwan, providing those, and they benefited, from that. Whereas from here, there is a lot of bad news in those tech stocks, and a lot about buying and being brought forward, and if anything, the component from retailsales driven to producing and manufacturing and i. T. , and, hence, there is a strong possibility of rotation out of those frothy pix into more economically sensitive areas of the market, and that is, in fact, what we are seeing in the market with that new high. Yes. airlines, for example, carnival, some very badly beaten. There has to be a great deal of volatility as we get volatility in the opening up, right . Absolutely. You have a lot of uncertainties. Number one is the election. President trump has been nominated and accepted that. He will go hard on china. Arepopularity or the polls indicating he is nose diving, so he is going to come out and look tough against china, and there volatility inof the market as we get closer to election day. But i think at the end of the day, the roach ration the rotation, one part of the market you look at, it is 20 above the numbers, and the other part of the market, it is actually pretty bad. So what is it . I do not think a vaccine will change that, and as we get closer to a vaccine gang released sooner rather than later, nasa volatility and the ation of that volatility massive volatility and the rotation of that volatility in the market. This chart on the bloomberg showing gold, and everybody seems to like it, but you say you are already selling out your position in gold. Why . Gold, first of all, is becoming too crowded. Stocks,haven, with tech as well, so when looking at roth,res of thrall f that is it, and there was the collapse in real yields, and from here, we start to see, especially since the fed rejected the idea of a yield curve control, nominal yields are picking up, and that would be a massive headwind for the crowded position in gold. Fromdrops to around 1800 these levels, it is frothy with downside. Shery we could see more risk if we do get a vaccine soon, whcih which takes me to the question. What is most sensitive to vaccines . Financials,of our areas which have not performed first of all, those on the front line of the covidimpacted areas, airlines, there, they will be quite responsive to a vaccine being announced, but more broadly, centers like energy, financials, and other sectors, most of the cyclical, valuepart of the market, and then at the regional level, emerging markets in europe, which have lagged the u. S. Substantially since the march lows. Shery great having you with us. Naeimi. We are seeing stocks at the highest level since january. Sophie kamaruddin is in hong kong. Soph . Been onthe focus has nintendo, 3 billion on monday, up 2 this morning in tokyo, but pharma gaining ground with a deal to sell a Health Care Unit 3 billion. One for 2. Checking out some movers of note in australia, alumina gaining ground. A drop in the firsthalf net 90. 5 billion, and ore losing, as they say there was china underperformance. We sought sales to china under pressure. Plus, it is looking to cut jobs, and the businesses looking to pare back their global footprint, as well. And some stocks to watch real stocks we are keeping an eye on in hong kong. At goldman, it was cut to did have one announcing this morning a plan to raise money in hong kong, which would be the secondbiggest s p ipo, and keeping an eye on alibaba shares after the price target was cut, 350 from 275. Haidi . Debut. A chinext will be speaking to the founder coming up, steven yang, of anker. And tiktok is challenging the president s ban. This is bloomberg. You are watching daybreak asia. New cases in florida at a monthly low, while arizona reported no deaths for the second time in a week. French and spanish cases fell, as well as germany scrapping plans to test travelers from high risk regions with stretched capacity, and switzerland is imposing social gathering limits. Andwhile, asia reverse plans to reopen plans to reopen bali as virus numbers continue to spread. The airy remains in a red zone. And malaysia is boosting their economy by lifting the debt ceiling, the new limit 60 of gdp from 2023. Health officials in hong kong are investigating the reinfection of someone who has recovered from the virus in april. The 33yearold man was found to have a second infection while passing through the airport while returning from europe. Researchers determined he was infected by separate strains of the virus, which may be able to circulate even if someone gains immunity. And a lot down in continue the latest coronavirus outbreak, restrictions set to be eased tomorrow but instead now expected to be lifted on sunday in new zealand. Auckland was put under restrictions on august 12 after four more cases were found, ending their run of being covid19 free. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. I am karina mitchell. This is bloomberg. Tiktok and its parent bytedance have asked the government to ban the Trump Administration from banning it in the u. S. , and separately, a tiktok employee has filed his own suit, saying any ban would deprive him as a job. I bloomberg reported. This order from the president getting pressure from several sides, but what is the actual likelihood that the courts will reverse the executive order . Well, it is very difficult to reverse an order like this. The president has a large amount of power under emergency declarations. To just sort of do this sort of thing, the Supreme Court powerly has tested that framing and tends to come down on the side that the executive can kind of do a lot of things that they want to do. However, that does not necessarily mean that tiktok is out of options. This idea of challenging the ban puts it in court, puts it in place for discovery, puts it in a place where tiktok has a lot of options through the legal system, and it certainly may extend some of the deadlines here. Now, if the sale is still going to go through, then the practical effect of challenging this may be to ease some of the pricing constraints that you have there, right . Because if you are forced to sell by a date certain, then you lose a lot of leverage. If you are in court, maybe you get some of the costs of that leverage back. We know that microsoft and oracle are interested. Maybe some other people may be interested. Maybe this changes some of the dynamics, but this is the sort of step that injects a little bit more, lets say, control, a little bit more power on tiktoks side to be able to try to control some of these things. Wonderyes, you have to about these proceedings that might go past november, where things might change again. Right, derek . There are many sides to this, with an employee and also wec hat also. Derek let me begin this answer by saying that point you made in the lead in is one that people should put on their walls. There will be a lot of actions coming up in the next little bit to push things past november but really passed january 20, when you have that change in power if joe biden wins, and if joe biden wins, or if it looks like he is doing very, very well in the polls, expect more of this stuff, and start asking yourself a tactic to overturn or if it is a tactic to just go away past into late january for the administration change, so this is something that we really need to watch on a whole range of things. Now, on that suit, there is an employee who is suing, saying this is a violation of his personal right to get a paycheck, essentially. Again, hard to say exactly how that will work. It seems to be a little bit more of a creative legal theory. Not saying that is good or bad, but that is a little bit creative. We will see how that one plays out. Again, when you start getting into these things, you open yourself up for these Legal Discovery practices and increase the amount of liability you have an agency Going Forward. Wallbank. Ek President Trump has officially been nominated for a second term as the Republican National Convention Gets Underway this week. This is bloomberg. The Republican National convention has kicked off, with President Trump being formally nominated for a second time, talking about the issue of mailin voting. A correspondent on the ground for us. Kevin, does this set the tone for the rest of the week . What are you expecting . Kevin well, in terms of firing up the base, this convention will have plenty of red meat to fire up the base. Look for donald trump, junior, and on foreign policy, look at former u. N. Ambassador nikki haley. Potentially even taking on china. This afternoon, i spoke with the Communications Director for the president s reelection campaign, and he told me that china is going to be front and center this week in terms of foreign policy, and then on the domestic front, on the economy, and on the pandemic, senator tim scott, intentionally having 2024 political ambitions. Talking about the economy, and the ideology. I think that is what i have my eye on. It is a contrast to last week with alexandria because you senator cortez. The criticism he has faced, including on the handling of the pandemic . Kevin a great question. There was a wall street journal poll, with biden leading trump by almost double digits, but this is what gives republicans optimism. First and foremost, there is the margin of error. Battleground states, where the president has this Approval Ratings that have skyrocketed in terms of the economy, he leads by, get this, 10 on his ability to handle the economy, so voters are still sticking by this administration in terms of handling the economy, but they are disapproving of his handling of the pandemic, so very much in play as we are now entering the republican convention. Kevin, we continue to see President Trump doubling down on his concerns over mailin voting, and the post office head, who is a trump supporter. Kevin precisely. Louis dejoy, the postmaster general, concluding another day of testimony at the house of representatives. We should know that the house, controlled by the democrats, has a 25 billion package they fiscalon saturday, stimulus coming in the next couple of weeks, but the bottomline here, based upon my reporting and the conversations i have had with democratic and republicans, they are using this to get out the vote for their progressive base, showing that underserved communities are registered to vote and make sure that is all squared away to them, and republicans are doing the same thing, President Trump making brief remarks at the convention, saying republicans have to be on guard in terms of the whole mailin voting issue. Chief washington correspondent there, kevin cirilli. Tune in at 10 00 a. M. Hong kong, noon if you are watching at sydni, at 10 00 p. M. In new york. A quick check of the latest business headlines. A judge hearing apples fight they are gains says looking at the ability to offer Graphic Technology to App Developers but not to reinstate fortnite. That what was going on was unfair. The hearing began monday and has finished for the day. The judge says she will make an order soon without offering a timeline. Delta says it will furlough almost 2000 pilots with improvements in commercial aviation over the next six months. The carrier will still have more pilots that it needs, even after 1900 flight deck and crew accept early retirement. Delta highlighted the threat of thousands of layoffs after september 30, when federal job support expires. Abouts have been revealed a deal that does not make good reading. Deal who are brokering the for Virgin Australia say creditors could expect an average return of between 9 and 13 , and there is a warning it will be even less if they veto the deal. Shareholders such as Singapore Airlines will get nothing. The vote is due tomorrow. Is dropping its dividend after writedowns in new guinea. The Company Reports a shortfall u. S. Throughon june. That is compared to a profit 12 months earlier. Will review the situation at the end of the year. They are paying a dividend they paid a dividend in 2019. If you are watching from sydney, we have a guest at 2 45 p. M. , keiran wulff. Ofing up, a reinfection coronavirus in hong kong. We will have the latest on that story. This is bloomberg. We have breaking news at the moment. The United States saying china and the u. S. Have held lighthizer andt mnuchin have discussed the phase one deal, saying they had a call with china today, the u. S. Saying both sides are seeing progress on the phase one deal with china. They were supposed to have a Virtual Meeting in the last couple weekends but we had not seen any updates on that. Finally we have confirmation with the u. S. Saying both sides are seeing progress on the phase one deal with china. According to that trade agreement, they were supposed to review implementation of the deal every six months but that deadline was set last weekend and it did not happen. It finally happened today in a call. The pledge of china purchasing an additional 200 billion of the end of 2021 but given those flashpoints over tiktok and huawei, negotiations finallyn delayed but andirmation that Lighthizer Mnuchin had a conversation with chinas vice premier and both sides are seeing progress on the phase one deal with china. Lets get to karina mitchell. Stormsfell in asia as threatened the gulf of mexico. One of the systems has been downgraded about reducing the threat. Butther has shut down storms marco and laura still have the potential to cause significant damage. Futures split in new york after earlier rising. That crew will not stay in International Space station. The astronauts are in no danger normal sses above but air loss is above normal. It requires periodically pressurization. Treating and a cautious unconscious russian german chancellor Angela Merkel is demanding answers from moscow saying those responsible must phase justice. He was ultimately flown to berlin for treatment. Saysnwealth bank australias recession will extend into the third quarter, the longest drop the longest slump since 1983. Cba predicts gdp will fall 7 10 of 1 after a 6 decline previously. Jobless rate is forecast to be 9 this year and be just below that through 2021. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Haidi trump says coronavirus treatment will be expanded to more americans after this therapy was fast tracked. Critics say not enough is known about the antibody treatment which uses blood plasma donated by recovered patients. Hopkins school of Public Health for his reaction. The theory of antibody treatment as you are getting antibodies to fight off the virus. The concept has been around for over 100 years and was used to stop measles outbreaks in the early 1900. The idea is some people have recovered in part because theyve neutralized antibodies and you can take them from them and give it to someone else and it might help. Evidence has added up that this has benefit for patients with covid19. The earlier it is used, the greater the benefit, which is what has been seen in history but they have not completed a trial of sufficient size yet to know for sure. The efforts ofs vaccine scientists. Convalescent plasma is for people who are already sick . Not necessarily. There is a Clinical Study at hopkins for people who were just exposed. If oneould also be used person is sick in a household, to give it to the other people. So at least exposed. Then you see whether the others get sick because they have gotten plasma. That is in theory but we have to wait for the results of studies to see if it is true. But it is promising. It will not be perfect but if it has an impact, it is something to add to the tools doctors have to help. Give us the latest thinking around school reopening. In london, children go back to school in early september. Its a question of how long they stay. What is the latest thinking on how you manage the risks surrounding back to school . Let me just say one thing on convalescent plasma. I think there is an important discussion about whether it should have been authorized but i do not think it was a good idea for the president to announce it in the Campaign Style event, attacking the integrity of the fda. It would be much better that have this discussion outside of political theater. On schools, i think the latest is coming from the u. K. , a major report showing their experience in june with reopening schools on finding as predicted, the biggest risk factor for having problems in school is the level of Community Spread for communities with a lot of virus circulating. They had more problems in school. It was most likely teachers bringing it in and passing it on s. Other adult it was rarely children passing it to adult. Adults. Its good to have plans in place for when there are positive cases, but i think what we are seeing with data is consistent with bringing cases down in community and taking precautions to goool and be prepared online for little bit of cases pop up. This is supported by michael bloomberg. Yuan,g at the offshore you can see the job after the news that mnuchin and lighthizer called chinas vice premier today to review phase one trade deal. U. S. Tradeof the representative released a statement saying both sides see progress on our committee and committed to taking steps necessary, also acknowledging china took structural changes to ensure greater protection for intellectual property right and also mentioned agriculture purchases china has implemented since the deal went into effect. U. S. Futures jumping one quarter of 1 . Lets go to jodi schneider. How significant is the latest development, given we expected these negotiations to take place last week . We were waiting for a confirmation they had happened. Isi do not think it significant in terms of the phase one deal or future potential deal. Its just a status check phone call. It was just going to be a status check, not real negotiations moving forward. So markets like it in the short run like today because it shows they are talking to each other but in terms of actual negotiations and Movement Toward coming together on trade, i think this was symbolic. Its also interesting, the timing. It comes as the Republican National Convention Starting and trump is going to take a tough line on china during it. We have seen that in statements he has made, saying he thinks joe biden is going to give in on china, and he wont. Be him trying to show the Administration Still wants to talk to china, even callingump is coronavirus the china virus and things like that. Even as they try to contain the damage to the phase one trade can, which is limited we bring up the graphic showing on the one hand what we have in terms of successes in that trade relationship and the list of other issues. Actmuch will be a balancing for the president wanting to show there is success in getting the deal but continuing to take the hawkish line on china with regards to tech and geopolitics . Chinahink he has decided and theectoral winner talk will satisfy his base and get him some swing votes who are and what heut biden might do with foreign policy. So i think he is doubling down on tough talk in china. Undoingtiktok,references with hong kong almost every day we see this. So i think that will continue and he could perhaps accelerate that Going Forward before the election. Buyingsame time, china u. S. Good is viewed as good in the heartland, the farm country like iowa where they have soybeans that the president wants those votes. Its interesting that they released this statement. They released a statement about a phone call to show theyre andl talking to each other they will continue to talk and both sides seeing progress. Statement but it is not backed up by anything. Jodi schneider in hong kong. , joining a host of other tech stocks. We will speak with stephen yang next. This is bloomberg. Witness some extraordinary performances yesterday. Stored 120 ations on debut while other cameras posted big numbers. Joining us is the founder and ceo, stephen yang. Congratulations on the ipo. Tell us what you will be doing with the funds raised from the ipo. Thank you. There is a lot of product area we hope to join one day. Especially manufacturing is capital consuming. We are happy people thought our stocks. Tell us about your business. What is your geographic focus . Where do most of your sales come from . Anker, we started from mobile charging. Are the first Line Products we put in market. Started audio, so speakers on headset. Later, smartphones. Global. Ically, we are major sales in europe, very recently in china as well. Indicationgive us an of your annual Sales Numbers in unit of monetary or numbers . The numbers are public. Lastyear we did slightly then 1 billion in terms of global revenue. In terms of units, we shipped close to 40 million units. Much do you depend on the Distribution Agreement with apple for u. S. Sales and how can cardio the u. S. China tensions and how concerned are you the u. S. China tensions . We started online and a lot of the sales still go online. We are extending offline quickly. Buy,er apple stores, best 7eleven, southbank in japan. Softbank in we are striving to be omnichannel. Wherever customers want to get our product. , for techf challenges companies, there are challenges every day. Wherever and whenever they come from. Producthope to focus on. We are always working on something new we are trying to bring the customers so to focus on that and that Everything Else happened. That is what we believe. A do you consider yourself Chinese Company . You might make a big difference on the u. S. China tensions. This could make a big difference on the u. S. China tensions. Someone said this is an International Company [indiscernible] so in terms of the culture and atmosphere, we are internationalized. Our product and people as well. We have different regional offices. We do r d largely in china but marketing and sales, its global. From yourd you bring time working at google when it comes to structuring and expanding the company . A lot of things. I saved google shaped a lot of my values. The opr system via google, our withoutare all glass concrete walls which indicates the transparent culture and the company. I sit in an open office instead of my own office. I sit right behind a glass wall. Next big thing in mobile technology . Technology is always happening and for us the most theting thing coming is Device Manufacturers are likely to stop shipping charges. Chargers. 4 billion are made each year and 95 are shipped with your phone or laptop. Charger willde. Oon be obsolete drawer full of unwanted chargers. Our dream is to help the world getugh that drawer rid of that drawer. But we need the help of Device Manufacturers to stop shipping and box chargers. Inbox chargers. That would help the world save waste each year and create a convenient charging experience. Everything. Charges hoping we can help the customers. You can buy a charger and use it for 10 years. Time. Appreciate your next, chinas megabanks are ramping up recruiting as they enter a bleak labor market. This is bloomberg. Chinas megabanks are ramping up recruitment, boosting employment as a Record Number enter a bleak labor market. Charlie, what kind of market are they entering into . Employment situation in china is gloomy. Rate hit ayment record. [indiscernible] it is extremely bad. They are going to hire more students this year as compared to last year. 8. 7 billion this year. Chinese banks are facing pressure on the earnings having to support recovery of the economy. Yes. Industryd out by the government called to , some banksjobs have started hiring this month [indiscernible] we will have to leave it there. That is it from daybreak asia. Markets coverage continues. China open is next. This is bloomberg. Experience the ultimate sports hub. Where you can find games, news and highlights. All in one place, right on your tv. The xfinity sports zone. Use your voice to search every stat and score. Follow the teams you love. And, even get notifications with breaking news alerts and more. With the xfinity sports zone everybody wins. Now thats simple, easy, awesome. Say xfinity sports zone into your voice remote today. Welcome to Bloomberg Markets china and. Markets open. Lets get to your top stories. Phase one progress. The u. S. And china hold trade talks and say they are satisfied with the advances made so far by both sides
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