Skip to main content

tv   Bloomberg Daybreak Australia  Bloomberg  July 28, 2020 6:00pm-7:00pm EDT

6:00 pm
♪ ♪ >> a very good warning and welcome to "daybreak australia." we are counting down to asia's major market opens. shery: good evening from bloomberg world headquarters. haidi: here are your top stories -- u.s. stocks fall as the pandemic affects earnings. among them, mcdonald's and starbucks.
6:01 pm
america's top infectious diseases expert says he is confident we will have a vaccine by the end of the year as infections slow and california and arizona, but florida reports record deaths. secretary of state mike pompeo praises australia for standing up to china as the traditional allies strengthen defense ties. shery: that's get a quick check of how markets are trading at the moment. u.s. futures opening to the upside, point 1%, this as stocks fell. we had traders assessing corporate earnings, not to mention contentious negotiations on a legal stimulus package. we have the s&p 500 nearly raising money. we had traditional sectors gaining grounds. real estate, utilities performing while energy declines. we had worse than expected results from a few companies 3m.uding mcdonald's and
6:02 pm
the nasdaq composite also lost more than 1%. tomorrow is the big antitrust showdown. we have the big tech giants including jeff bezos and mark zuckerberg testifying, so we will be watching that closely. take a look at what oil is doing at the moment. it is gaining a little bit of ground, holdingthis after oil de regular session. consumer confidence data disappointing, really putting a damper on expectations of a quick economic rebound. let's see how things are shaping up on the asian markets. here is sophie kamaruddin in hong kong. sophie: we are headed for a soft open here in asia as we see the earnings seasons wrap up across the region. we are also watching mcdonald's
6:03 pm
is inspected to sell a chunk of its japanese business after reporting worst quarterly sales decline since 2005. hong kong expected to report an 8.7% contraction and from us really are, cpi data likely to show deflation has arrived. morning, akorea this gauge of consumer sentiment .mproved for a third month in july, a drop registered in the u.s. and precious metals remain in focus. gold steady. futures adding about .5% after we saw spot and futures pulling back from a record high ashe dollar's downtrend narrowed. pulling up, with dollar weakness fueled aplay, that has correlation between asian stocks and currencies with links at the strongest since 2013. our next guest says she
6:04 pm
is shifting her investment strategy. we are joined by the ceo of worldwide investment. we are seeing this huge rally when it comes to growth in tech stocks, also large caps with huge balance sheets. what are you doing when it comes to adjusting your portfolio now that we are slowly starting to reopen the economy? >> i say we need to say where do we go from here after that large run-up in the large cap names in the technology momentum area, the market, now we are seeing the past quarter as we are looking at earnings season was a devastating quarter, and now we are saying look to the road of recovery, which means where we go from here is looking at more of a value play overgrowth play. same run-upseen the , so toward the small and mid-cap area as we have come
6:05 pm
into some stabilization. the vix has stabilized economy. are saying look to the value, look to the smaller cap names. shery: is it too early to get into discretionary stocks? we continue see flashes that notaps the uncertainty is over consumer confidence again disappointing. >> i do think it is definitely a stock pickers market and we do expect more volatility between now and the election, now and the end of the year, so certainly, we need to keep those risks in mind, but if we look at where there are still opportunities for the longer-term investor, if people are looking for those longer-term plays, i think we are seeing some good numbers
6:06 pm
when we look at the economic data to say that while we are stuttering starting in reopening the economy, we are trying to reopen the economy, and eventually, we will get to the other side. arei: given that we expecting further lockdowns in various parts of the world, certainly the u.s. reopen has been so stop/start, do you continue to allocate some of your portfolio toward these stay-at-home stocks? we have seen in some of these tech names at least, the pandemic outpacing trends we were already starting to see emerge before the virus. >> right. we do like consumer staples, which is your traditional recessionary play. we like that theme going forward , and that plays into the idea lockdown may take longer. it may take longer for businesses to open, and once again, i would say once people look at the landscape of what is out there and look and see where
6:07 pm
there are some opportunities where we have seen the run-up mainly is still on the growth side, so take a look at those classic, more value-oriented -- if it's consumer staples or health care, some of those sectors that we see opportunities in. shery: what kind of catalyst would you need to see on the vaccine development path to make you say that it is the right time to start going into the harder hit sectors like industrial and commercial real estate and the like? is a tough call because you know, not only does the vaccine have to be developed, it has to be distributed, and people have to actually take it. in the same way that we have seen people resistant to even wearing masks, there may be some resistance to people getting a vaccine, so then you may have an , you know,t is still
6:08 pm
seeing people have to stay home or business is not reopening. long.ld certainly be i'm not saying we see a quick recovery, but once again, for those people that are willing to go ahead and look at the long term, now we do see some opportunities in the markets could takek people advantage of, for those investors that are willing to take the long term view. lookinghis week, we are ahead to major japaneseanks report earnings, but it seems the financial industry sector really not seeing any upside. this chart on the bloomberg just showing how these banks have been underperforming very badly against the broader s&p 500. not surprising given the macro environment with a record low rates. are there any opportunities in that sector? some large banks
6:09 pm
that are well diversified and are able to get, you know, increase on non-interest revenue such as investment banking, trading. we have seen that. fixed income trading has been robust, so we have seen some of those large banks do well in that area and u.s. banks did in the stressl test. we do see some opportunities there, once again long term, but areas of interest in the financial and once we start seeing recovery and once we start seeing interest rates going up, which we know, we think the fed will keep rates low for longer, but these banks that have been able to diversify their revenue stream we think have the best opportunities. always great to have you with us. still ahead, we get the outlook for one of the world's biggest miner's. rio tinto reports results later today. we will discuss the company's
6:10 pm
outlook and challenges a little bit later this hour. inmulus negotiations go on the u.s. as time is running short for congress to act. we get the latest out of d.c. next. this is bloomberg. ♪
6:11 pm
6:12 pm
>> you are watching "daybreak a trail you." the federal reserve is extending most of its credit programs by three months. the facilities have the potential to deploy trillions of dollars, but only a fraction of that has been used. the fed releases its july policy decision later wednesday. meanwhile, hospitals are in danger of being overwhelmed with beds above 50% capacity.
6:13 pm
philippines now the second highest in southeast asia and hong kong has reported more than 100 new cases for the seventh straight day. stricter social distancing measures come into effect wednesday, and the united easing is considering restrictions on travelers from spain after a backlash from tourists, airlines, and the spanish government. most popularu.k.'s summer holiday destination. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. has staked out its battle lines over jobless and liability limits as stimulus talks continue to rush ahead and time starts to run short.
6:14 pm
republicans and democrats meeting again to try to bridge a wide gap between the gop plan and the 2.5 trillion dollar proposal that is being put forward by democrats. our congressional government reporter emberley wilkins -- emily wilkins is in washington. emily: at this point, everything is a little bit up in the air. officials from the white house were at congress today. they met with republicans, they met with democrats. this negotiation process we have come to expect, but a number of senate republicans left the room saying they were not confident about what was in the bill. remember this is the senate republicans' bill they are negotiating with democrats. even trump said there were parts of the republican plan he does not agree with. while i think some things for testing funding and virus research, i think there is a lot that is still up in the air at this point.
6:15 pm
there are provisions in the bill that everyone seems to oppose, like fbi pug -- fbi funding, which is drawing bipartisan scorn. there seems to be unanimous it is something the trump administration once but none of the legislators do. emily: this is reminding everyone that a tax cut was something the administration wanted and pushed, but it did not have momentum on the hill and was not included in the stimulus plan that republicans put forward, so it will be interesting to see what happens new fundingposed for fbi building. i think everyone is waiting for the final bill to come forward to see what is going to be unemploymenth insurance supplement is, with state and local funding, what kind of protections there might be for businesses, lawsuits
6:16 pm
related to coronavirus infections -- i mean, these are all sticking points right now and all things that lawmakers are trying to work their way through in the next few weeks. we have seen the attorney general launch a pretty against thesense accusations of lack of independence. emily: exactly. this is the first time the attorney general has been before congress, and democrats did not hold back. barr said trump has not interfered with anything. ,e defended things he has done allowing military force to be used against protesters. he sat there for four hours, and it was this very thrilling back-and-forth between barr and the democrats. a lot of frustration was being
6:17 pm
vented from senators who have been very upset with numerous things he has done throughout his last year in office. congressional reporter emily wilkins with all things d.c. former treasury secretary larry summers spoke to bloomberg about the need for more fiscal stimulus for the economy. >> when he fiscal stimulus that includes health investments, so we eventually do the testing -- we need fiscal stimulus that includes health investments so we eventually do the testing that is necessary. we need to support state and local governments, who are at huge risk, exacerbating the innturn by laying off people education and health care, just when basic services -- just when those things have never been more important. we need to take advantage of this moment of epically low
6:18 pm
interest rates, super high unemployment to better maintain and reinvest in the infrastructure of our country. investments in continuing to support american households and american small through what we have gone through. look, we have been on a bit of a stimulus high in terms of consumer spending, and if we try to go off it cold turkey, the withdrawal symptoms for the economy are going to be something terrible. it would be a huge mistake. we need a protracted fiscal infusion into the economy that fairly gradually,
6:19 pm
measured with the progress and health conditions enabling people to come to work. we need a much more sophisticated debate and discussion than the one we are having. >> why do we need more -- not more than what we have had in the past but more than other people need? we now have an historic 750 billion euro stimulus package, still far less than what was done here. if you look at china, it is still astonishing houston -- how little stimulus they put in and yet there economy -- yet their economy is returning to normal. why are we lagging? >> we are lagging in part because we have not done what we need to do on the health care side. we still have to compensate for a ton of fear, a ton of lost income. we have still got to compensate for a ton of business
6:20 pm
uncertainty. that is one part of it. second, those countries, particularly in europe, because they have a different system than we do, they have more of what economists call automatic stabilizers. whenever the economy goes down automatically transfers go up. we don't have as much of that because we don't have as much social insurance. therefore, we've got to do it with discretionary policies. what they have built in to their budgets. they never got as much of a stimulus high, so they don't have the same kind of withdrawal in termsisk that we do of near-term growth rates. those would be the considerations that seem most important to me, but, look, i think this is ultimately not a
6:21 pm
complicated calculus because policy is about risk avoidance. if we spend too much, maybe the will create from 1.5% to 2%, which is the fed's objective. maybe we will have more debt because we borrowed at an below 1% one way average. if we spend too little, maybe the economy tips into a w pattern and we have another recession that gets people long-term out of work to the point where it is hard for them to come back, it causes corporations to cut their r&d budgets, their investments in the future, that reduces the formation.pital was former u.s.
6:22 pm
treasury secretary u.s. -- former u.s. treasury secretary larry summers. he is also a contributor to bloomberg "wall street week." maternal's -- madonna -- erna's vaccine candidate protected 16 monkeys from coronavirus. will it work for humans? this is bloomberg. ♪
6:23 pm
6:24 pm
appearshe virus spread to be slowing in the united states with california and arizona reporting fewer infections. florida, however, has seen a record number of deaths, and there have also been ongoing flareups across asia. good news on the vaccine front reporting positive results. we are talking about these trials with monkeys resulting in
6:25 pm
some positive news, but what about the bigger test with humans being carried out right now? max: yes, so, with any study, you have to point out what it does and does not tell you and the limitations. this was what is called the challenge trial. basically, you give the monkeys the vaccine, you expose them to the virus, and see the results. it appears,ctive, in a small number of monkeys, but at the end of the day, that can only tell you so much, given that different species, different dose in this case, artificial environment, but it is at least supportive of the notion that the vaccine has some promise. at the end of the day, what will really take is success in that much larger trial that has just started, and that is something
6:26 pm
that there remains a good deal of uncertainty, not just on the advocacy front, but on safety, too, because we are talking about a lot of people and a dramatically larger population, and a more diverse population in terms of age, health status, comorbidities than has been studied so far. we will have to see what happens as that data rolls in, which will be a good bit in the future. haidi: we continue to see the president and his son pushing hydrochloric went -- hydroxychloroquine as a therapeutic, resulting in his son being suspended from twitter. be ait continues to mystery why this continues to be a story or something the president focuses on.
6:27 pm
there's just a pretty significant body of evidence pointing to the fact that this does not seem to be an effective therapeutic, you know, from good, controlled studies. the evidence he cited today was a study out of michigan that has real issues and was not controlled. it was observational, there were some bad comparisons, and there was video by a doctor who has, frankly, conspiracy-minded, very strange views on a lot of subjects -- the furthest thing from a reliable source, especially in contrast to the people running studies that have shown it is not effective. it continues to confound me. i don't know why it is happening. i hope it stops. our bloomberg opinion columnist.
6:28 pm
on "bloomberg markets," discussing the impact of virus curbs on hong kong. ♪
6:29 pm
6:30 pm
haidi: u.s. secretary of state mike pompeo has praised australia for standing up to china. as really as foreign minister and defense minister were in washington for two days of talks. paul allen joins us with more. how are the allies cementing this united front against china?
6:31 pm
paul: this is a modest affirmation of a long-standing alliance. both sides reiterated criticism of hong kong's national security law, 5g technology concerns, concerns about what's going on in the south china sea. there was no mention for a proposal for australia to send warships through the area. there was mention of plans to cooperate closely on the next generation of hypersonic weapons, air and missile defense, cybersecurity and rare-earth supply chains as well. the foreign minister anne-marie's pain made it clear that australia makes its own decisions and has no intention of damaging the relationship bothchina, but most -- countries should be able to articulate their differences. we have seen china putting forffs in retaliation australia's call for an investigation into origins of the coronavirus.
6:32 pm
shery: the u.s. might have an enlarged military presence in australia's northern territory. what's happening there? paul: there is already about 1200 marines at the northern tip of australia. it was meant to be 2.5 thousand but that number was pulled back. this meeting was an agreement to expand joint training between australia and u.s. forces and establish a u.s. commercially run field reserve, which is kind of interesting when you consider in 2015 the governor of the northern territory least the port to a chinese company for 99 years in a $500 million deal. that was controversial at the time and with hindsight looks even more controversial. there are backbenchers on both sides of the politics looking into ways to cancel that deal, but you can imagine how that would inflame relations between
6:33 pm
australia and china. maybe that is a discussion for another day. maurice payne was in d.c. physically. she is going to be on her way home later today. when she gets back home, she is going to need to isolate for 14 days due to coronavirus. shery: let's now get to the first word news with karina mitchell. >> u.s. attorney general william barr has been defending himself before house democrats on capitol hill, who say he has politicized the justice department to help president trump and his associates. it was the first time barr has appeared before a committee and the democrat-controlled house became ag seven months ago -- house since he became ag seven months ago. malaysia's former prime minister will appeal after being sentenced to 12 years in jail after the first trial in the 1mdb scandal. he was found guilty on seven counts of corruption involving
6:34 pm
$10 million that found its way to his personal account from the state fund. he was fined about $50 million. the verdict came days after goldman sachs agreed to a settlement with the malaysian government. south korea's consumer confidence improved for a third straight month, offering another sign it has passed the worst of the pandemic. consumer sentiment index rose to 84.2%. despite the improvement, the gauge has yet to reach pre-virus levels that exceeded the 100 threshold which separates optimism from pessimism. global news 24 hours a day, on air and @quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. haidi, back to you. haidi: as the world continues to grapple with the coronavirus, we spoke to the johns hopkins foreign policy institute executive director about the difference in approach between
6:35 pm
east and west and how to control fresh waves of infection. >> it has been difficult to track. i think that's the challenge. as we have been looking around the world, hong kong for example, which used to be ground zero for an excellent coronavirus response, relaxation on travelers coming into the city resulted in a surge in new cases. so i think countries around the world, the u.k. among them, trying to prevent a second or third wave of the virus. but tracking is very difficult because so many people are a symptom addict. >> what is so important here with your expertise on china and broader north asia, they are taking the virus on in a very rules-based way. they make a rule and society has to do it or else. in america, we don't do that. do you think things would be
6:36 pm
better here if we did it more like what the pandemic police are doing in asia? >> i don't think using coercive measures is a good idea as an american. i would prefer that people use sense. it is very clear, now that we understand the science, that the virus can be mitigated by mask wearing. , theerybody wears a mask spread of the virus is reduced. it has been politicized in the united states, mask wearing, so people are not wearing masks. can see that all over the place. which have new york, strong enforcement measures, have seen very significant improvements to the situation and are able to manage the virus. >> it is stunning. much of this mathematics is from johns hopkins university. it is absolutely stunning the
6:37 pm
persistency of excellence of new york state over the last 60 or 70 days. it is just jaw-dropping, the differential between other states in america. >> we have a great story, that it could be 60 to 70 days, like we saw in spain. they got a handle on the virus, then people relaxed. the model is very difficult because you can be doing great and then not so great after a couple of months. tom: one of the news items we see away from the virus is the extradition battle with china. we decided it is a big deal, but is it? u.k. had an extradition agreement with china that has been broken, now canada and others. >> it is a big deal because it signals increasing problems between the chinese and governments around the world, who have very different clinical systems from china -- different
6:38 pm
political systems from china. as you mentioned, the u.k., canada, and other democracies, including the united states, are weighing whether to sustain their extradition treaties with china and hong kong. it is a big deal because it has been a key way of managing many of the criminal networks that flow through that region. endingending that or those agreements will have an impact on crime, but it is also part of the bigger political tensions that are dividing, increasingly, the world between china and the united states. francine: there is talk about espionage and things like that, about research. if you look at the world over, who has the best research into this pandemic? is it first mover's advantage? is it china? >> china has some excellent research.
6:39 pm
a lot of that was done in conjunction with international researchers. china has a set of labs, many of which are working with international partners. there are numerous initiatives around the world. korea, united states, china, europe, to develop a vaccine. there is a lot of great science going on right now. carla freeman there, executive director at johns hopkins. the johns hopkins school of public health is supported by michael bloomberg, founder of the parent company of this network. don't miss our interview with the founder of the -- bank later on bloomberg markets at 9:30 a.m. hong kong, 11:30 sydney. haidi: next, earnings season is in full swing with starbucks headlining a slew of names. we break down the mixed bag of results. this is bloomberg. ♪
6:40 pm
6:41 pm
haidi: earnings season is in full swing with key u.s. companies reporting. wary but signaling a not yet desperate consumer. these are earnings may be a cause for concern with wallets staying closed. bloomberg's ed ludlow is on the
6:42 pm
line. let's start with starbucks. they pointed to a key measure of sales turning positive area what are the takeaways here? starbuckses, 8000 u.s. stores. these were the ones open throughout the whole of the fiscal third quarter. positiveo demonstrate sales in july. that kind of indicates that in the u.s., their biggest market, things are really starting to improve. we also heard things in china are improving as well because prior to covid and even during that period, china has been so important to starbucks. it is its fastest growing market. the company is talking about sales substantially recovering by the end of this calendar year, a dial back of what they said last call, that they were hoping china would have recovered mostly by the quarter
6:43 pm
ending in september. as you know, we had recent resurgence is of cases in beijing, so starbucks dialed that back. even though financials were terrible in the quarter that ended in june, the real covid quarter, there are signs the consumer is starting to get more confident, visiting these kinds of quick serve restaurants. there was a lot of fighting talk from starbucks about how strong their balance sheet is, about the work they have done to regain the trust of consumers, making them feel comfortable by implementing strict to go platforms has really helped them and they seem positive going through the rest of the year. haidi: what about china's specific was starbucks' fastest growing market? ed: the thing when it comes to china is that china is several months ahead of where the u.s.
6:44 pm
is in terms of recovery from the virus. while comparable sales were not down as much as they were, they are still down. prodding the ceo about that. they wanted to know whether this was a reflection of the macro picture of the economy in china, or simply a reflection of covid on the ground. kevin johnson suggests it is not the economy, it is not an impending recession, it is just the restrictions covid has placed on the consumer and starbucks' ability to operate. had somedonald's also news out of asia, although globally investors were not all that happy. ed: sales are still down significantly for mcdonald's globally. in china, it is comparatively negative, but in japan, the business is doing better. comparative sales were positive. mcdonald's actually is trying to
6:45 pm
build up its cash. it wants to have money to play with when the going gets good and things improved. we learned this morning they are divesting some stake in mcdonald's japan, around 49% that they want to bring to 35%. they say that reflects their confidence in the management of mcdonald's japan, but i think investors view that as mcdonald's shoring up the balance sheet, getting funds in the pocket so that when things improve, they can deploy capital to grow the business on things like marketing to entice consumers back when they feel comfortable. shery: ed ludlow there with the latest on mcdonald's and starbucks. let's get a check of the latest business flash headlines. a busy week on the earnings front. pfizer shares rose 4% in new york tuesday after raising the full year revenue forecast. the new guidance suggests the pharma giant has weathered the worst of the pandemic.
6:46 pm
it's german partner is among the frontrunner in the race for a covid-19 vaccine, which they say could be ready for approval by regulators as soon as october. devicesn advanced micro surged after hours on a bullish forecast suggesting the company is winning orders from intel. amd says the third quarter revenue will be around $2.5 billion. the chipmaker raised its full-year sales forecast on the second quarter beat. harley has posted its fourth orderly loss in more than a decade with the iconic motorcycle make o.a.t.'s restructuring plan undermined by the epidemic. hardly sales in the u.s. have been in a five-year slob and the new ceo has embarked on a cost-cutting spree, shedding 14% of the workforce. credit suisse is set to announce a major overhaul of its business. the swiss lender plans to emerge
6:47 pm
the investment bank and capital markets unit into the resurgent global markets division. the bank expects to combine its risk and compliance units. coming up, the outlook for results do later today. peter o'connell joins us next. this is bloomberg. ♪
6:48 pm
6:49 pm
haidi: setting up for a mixed open across asia. let's get to sophie for a check of the markets. futures aren stock pointing to subdued losses midweek with the fed and focus. check out the aussie dollar, looking steady after tracking the stumble in gold, now holding below 1960 following a choppy day that saw the widest price swings since april. the continued drop in u.s. real yields remains a factor that could push gold higher, along with dollar weakness. goldman has raised its 12 month forecast for bully into 2300 but some are peaking if the peak is near for gold. jp morgan sees the rally losing steam after breaching 2000 and has turned neutral on gold as jpm does not see u.s. real yields going much deeper into negative territory.
6:50 pm
turning to gold stocks, minors of the metal have yet to rally to new records. socgen says the conditions are not right for gold miners to perform well until the economy recovers and inflation picks up. gold stocks are up 50% this year , yet asian producers are underperforming with a 47% year-to-date gain. miners are the stand out thanks to rising commodity prices, including iron ore, which citigroup expects will underpin a strong earnings sector. the 126 listed australian materials stocks have delivered returns of at least 100% more than all the other sectors combined. analysts are looking for details on project updates and dividends from the world's second-largest miner. let's get perspective from one of them.
6:51 pm
we are joined by peter o'connor from shaw and partners. great to have you here on bloomberg. is the stock pretty much priced priced to point -- perfection at this point? >> i think that is a correct assumption. most of those issues are priced well. outlook for 2020 is looking like iron ore price will fade. fade intoprices to the second half of this year. you talk about potentially we are at the peak for iron ore as well as broader commodities prices. we have seed gold fall back. you are more concerned about the esg issues. the company has had a horrible track record lately. >> yes, i am. it is a very hard subject to
6:52 pm
value. company'sical to the social license going forward. they are increasingly becoming targeting tabloids across the press generally and coming up in university case studies. related to not just one issue, but a range of issues. that is something they need to address and probably going to involve a change of some senior people to do that at the executive level. it will play out for some time, but what they do will ultimately be not as relevant as getting the social license correct. haidi: how much will they be helped by chinese demand? charts on the bloomberg showing how imports have rebounded when it comes to iron ore and copper imports also jumped to a record. we see tailwinds on those fronts helping. >> certainly we will. the iron ore tailwind, we have
6:53 pm
had that in the second quarter of this year. copper definitely will be the story in the second half, probably alley minium rising as well -- probably aluminum rising as well. iron ore is critical. in the first half of 2020 will likely come from iron ore. i think you will find the chinese data, just released, which highlighted june record imports correlated with record exports by producers globally in june. that is typically seasonally the case. we see that fading into the third quarter. it feels like they have gotten the tailwind right now. shery: what can we expect in terms of dividends? >> that's an interesting question. there is a real chance of a dividend disappointment today. i say that knowing everybody suspects a surprise. it has given surprises in the
6:54 pm
last 1, 2, 3 years. that has been more a function of asset sales and divestments where they have had surplus cash to give back and also share buybacks. speaking about the dividends announced today, rio has a strict dividend policy. 50% have a payout ratio of of their underlying earnings per share. the current consensus estimate for the dividend would suggest a 58% payout ratio for the first half, 8% higher than they have been paying for the last four years. the disconnect could bump that number to a higher ratio. have they done it in any of the last four years? no. it looks like the dividend could be higher than expected, which could lead to disappointment. they should be delivering windfalls. fine andio is entirely
6:55 pm
would be the second half -- the second highest first half dividend either. it may not meet the market expectations, which could lead to disappointment in how it trades. shery: what do you see as the broader challenge in the prices of iron ore and across the broader commodities complex? given that we expect to see the investment boom to drag the rebound there. >> stimulus globally and central-bank stimulus, certainly monetary and fiscal policy will drive that. it benefits from supply issues, particularly out of latin america and brazil with the covid virus tapping some supply potential. going to the second half of this year with numbers looking like they may be plateauing in brazil and seeing production continue to maintain the month on month growth rate, which brazil has done, we will have supply meeting and probably exceeding
6:56 pm
demand expectations, despite the fact the rest of the world is starting to recover. certainly stimulus will be a key feature for the second half. i think it is going to be more about industrial metals. probably other energy items. oil, gas, coal as well. precious metals clearly the story of the day. that is more about real interest rates and also where inflation is heading. iron ore has had its best period of the year. it may continue into july and august, but it is likely to fade. haidi: really great to have you on with us, shaw and partners senior analyst peter o'connor. coming up, we discuss weakness. the morningstar tells us what -- tells us what to watch out for when japanese big banks report their earnings. we have plenty more ahead on daybreak asia as we count down
6:57 pm
to the start of trading. we are looking at a pretty neutral start, fairly unchanged in australia. the aussie dollar just holding at about $.71. ♪
6:58 pm
6:59 pm
7:00 pm
haidi: good morning. we are counting down to asia's major open. shery: i am shery and in new york. welcome to "bloomberg daybreak: asia." asian stocks looking to track u.s. shares lower as they wrap earnings.c affected mcdonald's and starbucks affected the fed concludes


info Stream Only

Uploaded by TV Archive on