Closer to the mainland. Wrapping off the iphone 12. It is bigger, pricier, and supports 5g. It could trigger a wave of growth. Lets get a check of the markets. We are seeing u. S. Futures under pressure at the open. This after u. S. Stocks retreated from sixweek highs during the regular session. Prospects for us fiscal for a fiscal stimulus have remained stalled and we have mixed corporate views. The s p 500 lost 0. 06 , nine sectors were down. Financials leading the declines. We had a positive start for Bank Earnings but they went south of her investors took a look at reserve relief and Regulatory Risk. 0. 1aq composite, down percent, apple shares tumbling after the release of those latest iphones. Giving up some of the big gains we saw ahead of the event. Oil is under pressure, but still above the 40 per barrel level. It held onto gains in the new york session. This after data from china showed robust crude imports but we did get an executive director shuttered restart of output may push crude prices down. Lets see how the markets are setting up in asia. Of thetaking some lackluster lead from the u. S. Stocks overnight, asian seeing modest declines after the slip in u. S. Equities overnight. These concerns over when we might get a fresh round of u. S. Stimulus, weighing. The nikkei 225, marginally higher. Startingures in seoul, lower after we snapped a winning streak after 14 days of gains ending the previous session in negative territory. Looking ahead to the start of trading in sydney, seeing declines when it comes to the futures, suggesting an early decline of 0. 5 or so. We are looking at data that shows the stimulus measures from australian policymakers could drive local shares higher. And finally diverted from the picture we have seen in the u. S. When it comes to stimulus. Continuing to watch the rally we have seen in kiwi stocks, rising in previous sessions despite a broader risk off sentiment across asia, at a record high, the best winning streak since 2017. Looking a little more contemplative when it comes to trading in auckland. The u. S. Session led down by financials, which had to do with city and jp morgan being more cautious about the economy, saying it is in a long grind. Joining us is a portfolio manager. Great to have you with us. Lets go into the u. S. Trading session because we have the banks, was this surprising to you that these banks reduced reserves at a time when they also said they were worried a little about the future of the economy . That is an interesting question because i was surprised at the raise in the earnings for jp morgan, on the release of reserves. I think to the extent right now, they are not seeing it, it makes sense for them to release them because they may have taken them a little on the early side. The other side of the coin is that if the economy continues to have problems, i think the problems in the credit markets will come later and i think if there is something i would worry about going forward, it would be that those reserves, that we will have to build them again at some point because you will have more problems when people have been out of work for a long time. You had the stimulus through july and that gave people a lot more room. Now it is a fairly short time where you havent had some sort of fiscal stimulus. Since we are still arguing over it in the united states, that is a question about how the timing affects people in their credit. Shery we are seeing divergence in the markets, even with the rally we are seeing sectors gaining ground and other sectors that arent. This chart on the bloomberg, showing how tech has been trading as a pandemic safe haven. We are seeing an interesting trend, when tech outperforms as health care underperformance underperforms. This chart is tech against the s p 500 and the health care ratio in blue. When you look at the different sectors in the american market, where do you go when there is so much uncertainty still about tech giants and the diversion trade . Sarah the hard thing right now is because you have an election in the u. S. Where there is some question about how that will affect health care, although the health care names seem to have more value, the market now doesnt want to look at value stocks. The market seems to be much more interested in growth. The problem for looking at valuations is that where you are getting the growth is where people have been buying those tech stocks, so the valuations are higher. I think if you will continue to see lower Interest Rates, which we are, and concerned about the global economy, which i also think we are, where people are willing to put money to work even now is still going to be in those areas where you see growth. To the extent that that is not Just Technology but also companies that have to touch on esg and alternative energy, it is looking for places where people are thinking governments and corporations will put money and i think the tech sector continues to be a recipient of what is happening right now. You talked through the themes of growth in tech, esg, some of the new energy type narratives. These were already coming along prepandemic. To what extent is it an agnostic trade regardless of what happens with the recovery in the Health Care Crisis . Done ishat you have accelerated trends that were already in place but you accelerate them in ways that i dont think anybody prepandemic could have envisioned, that all of a sudden, you were going to need much more bandwidth for people to be at home, and technology for people to work from their homes and connect with one another and have meetings over technology. All of those were trends that were happening, but they were enormously accelerated by the fact you have this pandemic and economies had to shut down and people started working from home in bigger numbers. Extrapolate those trends and say, lots of corporations say for employees, you can continue to work from home even after we get back to some sort of normal. There have been several corporations that said that. You have to start thinking about how that affects commercial real estate and other sectors going forward. I think those trends were in place but they were rapidly accelerated by the pandemic. Me about your expectations about volatility going into the u. S. Election. We are seeing bets on volatility pulling back fast. There seems to be a widening lead for joe biden. Are the markets getting complacent when you look at where we are in volatility . For october, contracts were at the lowest part of the curve all this year. Think, if we know anything from the last election, we know there has been volatility even when the polls were looking like they were very strongly in one direction. To some extent the market has become complacent betting on the election but i think what investors are looking at now is, no matter who wins the election, we are going to get some sort of fiscal stimulus. Fiscal stimulus will be good for the economy and good for the stock market. I dont think they are pricing in any major changes in tax policy or anything else that i think the markets are pricing in but i think the markets are pricing in that some stimulus will come out of this no matter what and the fact that Interest Rates globally remain at levels that have never been seen before, negative across europe and low levels across the united states, it is difficult to find other alternatives to put your money to work. Equity markets are benefiting from that. Hunt joining us, we appreciate your time. Lets get you to new york. Karina mitchell has the first word headlines. Says the world faces an uneven postvirus recovery although it has a less dire view of the recession. They see global gdp for shrinking 4. 4 this year, down from just over 5 in june. That would be the deepest contraction since the great depression. Staying on the imf, it is slashing its outlook for india even further, saying it faces the biggest contraction among major emerging markets. Gdp is expected to shrink by more than 10 for march, far worse than the 4. 5 percent decline the imf saw in june. India imposed the worlds biggest lockdown in march, causing the economy to shrink by a whopping 24 in the june quarter. The u. K. And eu are dialing up the rhetoric as brexit talks failed to make progress ahead of Boris Johnsons selfimposed deadline. Negotiationssays havent moved forward enough to enter the socalled tunnel phase , while johnsons Spokesman Says the u. K. Is ready and willing to lead the Single Market without a deal. Sterling fell on the news. Global news 24 hours per day, onair and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im karina mitchell. This is bloomberg. Shery still ahead, the latest on the global race for a covid treatment. Johnson johnson sticks to its timeline even as clinical vaccine trials are put on hold. We hear from the cfo, later. First, chinese president xi jinping is expected to lay out his vision for the greater bay area leader. What to expect from his speech and what it could mean from hong kong. This is bloomberg. Haidi xi jinping will deliver a major policy speech across the border from hong kong. He will spell out his vision for an integrated global tech Silicon Valley. Stephen engle joins us from hong kong. We know the policy priority shenzhen plays. At are we expecting to hear today . Inphen like what happened , widely seen in china as a critical moment in chinese history, unleashing the power of the province to counter at that time the four asian tigers, there are four different challenges with the u. S. Led i guess crackdown or pressure on the socalled bifurcation of the next generation of tech innovation. China wants more selfreliance. That is what xi jinping is hinting at, what is come for his in in change in shenzhen. Here is a quote from him, according to a news agency. We are seeing changes unseen in a century and we need to guide ourselves on a path to Higher Quality selfreliance. This speech in shenzhen is rightly hailed as a major policy address ahead of the Central Committee in beijing meeting at the end of next week to lay out the next fiveyear plan. The Greater Bay Initiative is expected to be paramount or play a prominent role in the priorities of investment and policy over the next five years. It is to get the greater bay to drive Economic Growth. And also bring hong kong more into lockstep with the mainland. You are talking about stitching together nine major southern cities with hong kong and macau, they are calling this a socialist pilot zone with chinese characteristics. Maybe they need a better tagline than that. Haidi what about hong kong . How does the city fit into the equation . Stephen obviously they have separate trade and investment and rules than the mainland. They have an open capital account, but they also have a history of the last couple years, significant unrest and economic hardship. As we heard from the financial secretary in my latest hong kong on edge documentary, he is encouraging hong kong people to go across the border, get jobs in the innovative tech corridors. We know shenzhen is the headquarters for huawei and tencent. This is not new, it is expanding and wants to be on the forefront to rival Silicon Valley and in tokyo, the tokyo Bay Headquarters for the next future defining technologies in 5g and beyond. Carrie lam, the chief executive here, postponed her own policy address which is due to be given today, to attend the speech in shenzhen, to meet with xi. She has already had to quiet criticism that she is waiting to take directions from beijing for hong kongs own policies. Obviously, the leaders in beijing and hong kong are positioning this is the way forward, the feasible way forward for hong kong. Shery Stephen Engle there, joining us from hong kong. A panel coming up in a couple hours from a global conference. The australian trade minister and speaks amid tensions between beijing and canberra. Bloomberg subscribers can watch on bloomberg go. This is bloomberg. Shery the race to develop a covid19 treatment has hit backtoback snags. Eli lilly passed its antibody trials over potential paused its antibody trials over potential concerns hours after Johnson Johnson halted its tests on a vaccine. Our Health Care Reporter has the latest. Side effects are emerging in the vaccine race. Will they delay progress . Everyone expected complications and side effects to emerge because that is what happens naturally in the Drug Development process. But it happened so quickly that development of these approaches, we havent heard about the complications until now. So the fact that they are all coming out is actually a good sign because that tells us they are taking it seriously, they are not going to sweep something under the rug that is one or two people, they found something a little untoward. There are now multiple vaccines and candidate therapeutics and development, so hopefully we can winnow out the ones that arent effective and ends up and up with ones that are really beneficial. Isdi in the meantime, china floating the idea of vaccinating Chinese Students going abroad before these drugs even receive regulatory approval. Given that we are seeing anticipated adverse events, is this a good idea . Michelle you can see why people, students from china would want to take some kind of action. In china, there is really and embracing of the idea of social distancing and Wearing Masks and reducing the amount of virus in the population by everybody being on the same page, which we dont see in the united states. So the idea of giving students vaccines to give them some kind of a protection when they go to a place that doesnt universally protect themselves is, it makes sense. But you see the risk. We dont know for sure whether these vaccines will be effective. You would potentially put the students at risk for complications from a vaccine, for a disease they might not even get, even though there is a lot of virus in the u. S. Most College Students arent getting it. The majority of those who do, are doing fine. You will be putting people at risk for something they might not ever benefit from. That is something that is raising a lot of questions. A difficult riskbenefit scenario. Michelle cortez with the latest on the vaccine front. On Johnson Johnson falling after they paused their vaccine trials, dealing with a sudden illness, the cfo told bloomberg they remain confident in the vaccine which they aim to make available late this year or early next year. With respect to details around the temporary pause on our vaccine candidate trial, there is little in terms of details known at this point. We were informed 36 hours ago that and that information was elicited by the independent drug safety monitoring board. That data is blinded to us. It is up to that independent group to determine what will be unblinded. We have had significant confidence going into the vaccine trial itself. We tested 100,000 people on this platform for ebola, zika, and hiv without any Serious Health consequences and very well tolerated. We are confident we just have to let the process play out and hopefully, the public is reassured that we are following the highest scientific, medical, and ethical standards that we do for all our drugs. That is true for Johnson Johnson and i believe it is true for our pharmaceutical counterparts. We saw that with astrazeneca, issues. To assess some but it hasnt yet been approved by the fda to continue but it can continue in other countries. Help us understand the procedure globally as you test the vaccine in many countries, as to what stops and moves forward, how quickly that can happen. I wont speak specifically on astrazeneca. From our perspective, the details are being finalized about the patient. It is a 60,000 person study, the largest of any vaccine trial being currently conducted. It is probably not uncommon to illnesses thated occur. That is what has happened. So we will let the board do their study, do their diligence and we will proceed accordingly. We have been in contact with the fda and other Health Regulatory authorities around the world, so they are well advised as to what we know at this point. We will certainly work in lockstep with their direction. Timeline, about the your ceo has said in the past, and im quoting, that he would expect vaccine to be available late this year or early next year. Is that timeline still the one you are working to or do you think the risk is, it gets pushed out further . I think the best way to answer that is to say we are not changing any investment plans to expand manufacturing footprints. We are planning for success without same timeline in mind. That is a fair point. On the same lines, i wonder if you could give insight into Johnson Johnsons conversations with regulators. A lot of the conversation and confusion in the market comes from the fact that we dont know if we can trust the vaccine, how do you know if it is safe to take, etc. What is your conversation . Our conversation has been to keep them advised of our scientific protocols. We are being transparent not only with regulatory authorities but also the public at large. We have a detailed website which outlines our design protocol, our study results, our enrollment as that gets posted. We are being very transparent. I would hope the public would look at todays temporary pause and be reassured that we had Johnson Johnson and across the industry are following every proper safety protocol, guideline to its utmost degree. Shery that was Johnson Johnsons cfo. The latest business flash headlines, apple launched its latest iphone. It was expected to spur a new cycle of growth. A virtual at a virtual event, they showed the iphone 12 and a variety of colors. It starts at 799 with a smaller vision version 100 less. Asmax versions go as high 1100. They all support 5g technology. Tencent is said to be planning to double its stake in universal music before the option expires in january. Last year it let a consortium that bought 10 of the company from vivendi in a deal that valued it at over 35 billion. Tencent and the partners hav