tv Bloomberg Daybreak Australia Bloomberg September 15, 2021 6:00pm-7:00pm EDT
civilian crew into orbit. the historic landmark a new area -- sheriff or commercial space travel. pfizer and moderna pushing for booster shots after saying the efficacy of their vaccines diminishes over time. we are seeing a u.s. futures slightly higher on the open but this after the s&p 500 already saw the best day in almost three weeks. we had the nasdaq 100 grainy ground for the first time in more than a week. a little bit of pressure for chinese adrs, dragging the chinese index down for a fifth session. the doppler weakening again. we are seeing unchanged with a bond at seven dollars -- $70 a barrel. hurricane ida, storm nicholas, all being felt across the oil markets. nicholas knocking out power in texas and you can see the
hurricane impact on the manufacturing side of things. factory output, expanding last month but more slowly at the .4% pace for august but still worth mentioning that we have recruited most is out losses we saw during the pandemic when it comes to the manufacturing side of things. gaming stocks not doing well again. the s&p gaming index fell to a three week low after scrutiny in china. we have heard from jeffries saying there is considerable more risk when it comes to casino stocks. despite the downside pressure, is worth mentioning the market exuberance continues. ipos are dropping. twice the new stock offerings today surging 50% or more. these ipos have raised nearly $50 billion in the past two weeks and nine companies went public today in new york, one of the busiest days of 2021.
haidi: it is already looking for the next big thing to find their investors the next make amazon for example. this is a new research out firm the head of the global investing talking about these. there are 14 innovation futures of tech and including, as you can see, six generation telecom network technology that could download the entirety of the new york public library. it seems like bionic humans with electricity. this is incredible stuff. they are saying they need to identify the future attack that is going to make a default on our lines. sophie: of a difference in our lives has been the vaccines. now pfizer and moderna pushing for booster shots. those who got the vaccine can really go back to a semblance of normalcy. pfizer is now citing data from realizing the u.s. and israel saying immunity wanes over time but the booster shots can actually help.
that presentation will be given to those outside advisors to the fda on friday. we are expecting to hear more on that. haidi: quite a bird of drama overnight. we just heard in the last hour or so this is a security partnership between the us, uk, and austrlaia. staging becomes more confident and aggressive in its territorial investing -- investments around the region. australia will acquire summary technology nuclear powered which signals an end of its deal with france. they are getting more on the top story shortly. shery-ahn: that is quite something. let's see how the headlines will affect the markets sophie with a preview of what to watch. sophie: we will be watching utility stocks.
what is going on with the backdrop today. stocks not moving very much and we have the gdp data due later this hour. i had of that, we have markets pricing for rate hikes in october and november with a possibility of 50 basis points hiking next month with auckland restrictions eased. i checked on the aussie dollar ahead of jobs data. we have a aussie dollar staying above 73 this morning but they see a push to 80, 85 in the next 12 months on a full recovery and that is the start of a new super cycle. some of the positives offsetting concerns over tiny growth and look at the chart. global stocks are set for a second monthly decline as regulatory hits add to the strike and this thursday, wall street executives in chinese officials will hold a virtual meeting to discuss topics such as the private sector crackdown
on the mainland and china. haidi: very interesting to see the reaction of beijing. australia is joining a new index specific security partnership with the u.s. and u.k. that could pave the way for nuclear powered submarines. it comes as china explains its military presence across the region. let's start with the imlications for australia. reporter: this is a new alliance announced this morning. scott morrison repeated this acronym several times so we remember what it is. president biden and trump -- prime minister johnson joined virtually. the key development will be the development of nuclear powered submarines for australia. there will be an 18 month consolation -- consultation
period to decide the path forward. the bills will take decades after there is no indication about the cost although there is an intention they will be built in australia. there is no domestic nuclear industry here beyond research. scott morrison says this is not the start of civilian nuclear program in australia nor is at the start of any plan to develop nuclear weapons and all the leaders pointed out these nuclear submarines will be conventionally armed. haidi: our understanding is president biden mentioned the trilateral planet to the president of china during our recent conversation. beijing not expected to like this. reporter: he might have mentioned it but he didn't mention it at all during his press conference the word china did not, one single time. there was talk of evolving threats in the pacific and australia and the u.k. and the u.s. and together. they had more than its -- then a
century but you cannot ignore china claiming the south china sea. it has been building artificial recently area and had trade strikes against australia over the past few months so it is hard to see improving that situation at all. haidi: paul allen with the latest on u.s. australia and china relations. data from pfizer and moderna suggest the efficacy of covid-19 vaccines wane over time but they say a booster shot is effective at warding off the virus and new variants. let's get more from carol wessel. we thought we were getting the breakthrough in factions because the delta variant was more contagious but is this to do with immunity instead of just the variance? carol: the data today suggested that the breakthrough cases among the vaccinated have to do more with the efficacy of the
vaccine waning over time rather than the delta variant. the data shows the vaccine becomes less effective as children get more risky cases and more time goes on. the case they are making is we need a booster shot. this is data presented ahead of an fda meeting on friday that is expected to weigh in on the need for the booster shot for the pfizer vaccine. the fda release their own data summarizing their findings and offering their views but it didn't get an indication on the meaning of the shot. we're looking to fight and in see. haidi: moderna hasn't shared twice the amount of antibodies. they're also saying efficacy wanes and i believe they're asking for approval for a shot a third of the usual full dosage. kara: moderna came out separately with data that shows
it shot also showed declining efficacy against a study of people who have gotten a shot five months apart and they should the people who got it earlier had as much as a fifth -- 50% reduction for rate through cases. moderna is making the case that it had submitted for approval from the fda. the meeting is strictly related to other vaccines but we are not clear on when the ads da will weigh in on moderna. this data will boost that. sophie: the boosters continue. haidi: the latest on the vaccine and virus we are counting down to a big space launch in a couple of hours. basics will carry its first all civilian crew into orbit aboard its crew driving spacecraft into the high-stakes mission representing the biggest potential for commercial space travel. ed ludlow is at the launch site at cape canaveral unit we cover
a lot of the spacex launches across the other private space enterprises but there is no way getting around the fact that this is -- >> every investor i have spoken to, every nasa official says this is a much bigger deal. what you were seeing was the expression for the hatch on the dragon capsule getting close and pressurized and they have been reclined into launch position. we have one hour and 15 minutes until launch and it gives you an indication of how thorough these checks are. they have been having communications checked and they will stay in constant communication with spacex until lunchtime and you wonder what they are feeling like. incredible. sophie: -- haidi: inspiration for is the name. what are we expecting? reporter: it is similar to the mission spacex has done for professional astronauts. it is a launch that last 12
minutes. there are several stages of separation where the falcon nine rocket decorates off but they are not going to the iss. they are going to an orbital apogee of 360 miles. to give you context, bezos went up to 65 miles for a few minutes. this is an order of magnitude. with the greater distance comes rest. -- risk. the ceo beating this mission and paying for it was,. he acknowledged if they are going to do this, they wanted to do it properly and go somewhere that not only hit civilians but humans had not gone -- done nbefore;l haidi: the estimate by nasa is one in 270 chance of catastrophic failure. it is a risky mission. what happened when it is a success? reporter: it is interesting. the aim is to orbit for three days but with any launch, there
is risk. withdrawing capsule is autonomous and has thrusters around the side of the vessel which control the direction and put it into orbit part of something goes wrong, they have been training intensely for five months. he is the mission commander and it is up to him to act in the event that something goes wrong. they lose contact with spacex which is a possibility. spacex is confident in their technology and the preparation they have done with it but again, there are inherent risks and nasa officials told me yesterday the public needs to be aware that. haidi: west coast reporter ed ludlow on-site and he will bring us live coverage of the launch. let's get over to vonnie quinn with the headlines. vonnie: chinese authorities -- not to expect interest payments on bank loans. a government minister warned
this means ever grade will not be able to pay its debt obligations due september 20. the company is still discussing loan extensions. the world's most developer it's suing on more than $300 billion. north korea fired two ballistic missiles wednesday in a second major task in a week -- test in a week. it came one week after the south korean president launched missiles becoming one of only one -- a few countries to acquire the technology. a conservative speaking to the next president told bloomberg the u.s. has seen records in its diplomacy with north korea. >> americans see things in such a naive way. they thought north korea was like europe but they are not. they're like a monarchy from a feudal era. reporter: michalski seen operators are bracing for another tough day as china's latest --
six casino operators plummeted 23% wednesday, the biggest light on record. china alone god -- u.s. stocks hit hard. the new moves threatened the fundamentals at the epicenter of global gaming. u.k. prime minister boris johnson has overhauled his cabinet. [indiscernible] 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. ♪ haidi: we get more on the --
>> [indiscernible] >> we have seen a big pickup in uncertainty. >> [indiscernible] >> we are in a decelerating growth environment globally. >> supply chains remain disrupted. >> earnings peak, monetary policy. >> pile on top valuation concerns. >> margin discussions are starting to heat up again. >> the new ring opening trade will face headwinds. >> strategists over the past
week articulating pullback concerns. >> this looks like bounces in a downtrend. >> the short-term impact is clearly interest sentiment. >> market equities -- haidi: weighing in on uncertainties for the market. our next guest is fullest on large growth -- -- bullish on the large growth companies. always great having you with us. we have seen the mega trade rallies continue against the s&p 500 as the bloomberg shows. how is it that even with such stretched valuations we can continue that rally higher? david: we do have stretch valuations but when we look at where we are relative to interest rates, the 10 year hovering around one point 3%, interest rates have stayed low which is favorable for growth stocks. we expect that to continue because we believe is not the
consensus view that the fed will not taper as early as some might think. haidi: when you are saying you're looking at more international stocks, where exactly are you looking at? the uncertainty over china seems to be clouding a lot of the markets. david: an important distinction here. we are looking really at the valuation difference between the u.s., the s&p 500 index, and msci all country index which is about 85% developed markets. those two indices, there is right now for the developed countries around the world trading at a 30.5% discount to the united states on a forward earnings ratio. it forward earnings price earnings ratio. that is the highest ever. at the same time, we have japan, earlier this week setting the highest level for the nikkei in
31 years. countries in europe, those indices are also reaching new highs repeatedly. christine lagarde was able to pull off a taper announcement last week without a tantrum. markets rallied on that. we look around the country because we know the valuations are stretched. we are still bullish and this interest rate environment on large-cap growth. he think there is opportunity investors need to look outside the u.s. to these developed country markets for opportunity both tactically and to diversify our portfolio. haidi: tell us about these opportunities. are they the same somatic views that your trading in the u.s.? david: in the u.s., there has been -- i think the consensus has changed. there is a lot of analysts looking toward resurging value.
we had that earlier this year and the reopening trade. the problem with value stocks and cyclical stocks in the u.s. and globally is we are only one variant away from another clampdown or the covid impacts to the economy. also, we do not think interest rates are going up significantly anytime soon, which is favorable to banks and other value cyclical plays. like industrials, materials. we stay with mega cap growth stocks. when we look internationally, we are looking in the same area. typically people look abroad from the u.s. for value and cyclical plays but we are looking for large-cap growth companies there as well in those developed country markets. haidi: in terms of the risk of a taper tantrum, are there markets within asia, particularly developing that you need to be cautious of? david: we are cautious on china.
we have been for some time. with the increased regulation, the government clampdown, and we do like emerging markets but we think there is a little bit more risk in general in emerging markets stocks. we are looking toward emerging markets to some degree but we think that the best play right now is large cap growth. same as our u.s. theme in the developed country markets. the advantage is they are trading at such a discount from on a forward price earnings multiple, the largest discount ever at 30.5%. haidi: mainstay capital management founder and ceo. great to have you with us. always appreciate your time. it would be the first private all civilian crew to or the earth. the inspiration mission is scheduled to launch in under a couple of hours time. we will have special coverage brother programming. this is bloomberg. ♪
haidi: the ecb president said they remain highly cyclical. />> crypto's are not currencies. . full stop. they are highly speculative assets that are not currencies. they are not. i think we have to distinguish between crypto's and highly speculative -- that are highly speculative, and high intensity in terms of energy consumption assets. they are not a currency. on the other hand, you have stablecoins proliferating, which big tax are trying to promote and push along the way,
which are --need to be regulated and there has to be oversight at some cost to the business irrespective of how they name themselves. you have the central banks. they are prompted by demand of customers to produce something that will make the central bank and central bnak currencies fit for our century, why we are looking at cbd seeds, central-bank digital currencies so that instead of having banknotes in cash in our pockets or wallets, we can have exactly the same thing but in a digital form so all of us are working on this and i would push the cbdc issue on our agenda. reporter: if the ecb were to
>> the future of each of our nations and the world depends on a free and open indo pacific, flourishing in the decades ahead. this is about investing in our greatest source of strength, our alliances. and updating them to better meet the threats today and tomorrow. haidi: president biden speaking about australia's inclusion in a new trilateral security partnership with the u.s. and u.k. that will allow canberra to
have nuclear powered submarines. china expands military strength the ground -- around the region. let's get analysis of the geopolitical implications with our guests. it was a deliberate announcement with no mention of beijing. we know that this packed was alerted to president xi in that phone call with biden. what are the implications of this in terms of the significance of this agreement? >> you are right to point out that it was a very tightly choreographed, diplomatic presentation of what amounts to a momentous decision for australia to acquire nuclear propelled submarines. that is quite momentous. there were only six countries in the world that currently operate
nuclear powered submarines. australia would become the unlikely seventh. it's the only country not to have nuclear weapons, but to be intent on acquiring nuclear propelled submarines. all three leaders have been very clear to emphasize that australia is not willing to acquire nuclear weapons. this would be nuclear powered some marines but not nuclear armed submarines. that's a point that they were clearly wanting to express, to reassure the world that there would be no nuclear proliferation risks coming out of this deal. but it does send a very clear signal to china. they didn't mention china in their press statements, of course. this is very clearly designed to bolster alliances amid rising
tensions with china. there's no way that america would be sharing this sort of technology with australia if it weren't for china. how has -- haidi: how has this changed geopolitical risk for the region? herve: australia is becoming a much more important ally for the united states as it seeks to pivot away from the middle east as it closes down its operations in afghanistan. and really emphasizes the importance of the indo pacific as the primary theater for great power competition in the world. australia's place within the u.s. alliance network becomes a lot more important. the united kingdom is a long-standing ally of the u.s.. they want to play a role here as well. a lot depends now on the
regional reaction, southeast asian countries, south korea and japan. we are likely to see varied reactions on the parts of the u.s. east asian allies. this will be welcomed in southeast asia. there will be more ambiguity in beijing. haidi: does a closer alliance between australia and the u.s., how does that bode with china? is australia more vulnerable to the wrath of beijing or is it protected more? herve: it is a step up in terms of australia playing a more proactive role. not just in terms of defending the island continent of australia, but with nuclear propelled submarines. your distances are vastly longer. you can operate the submarines for longer times and further
away from home in theaters like the south china sea. it does appear that australia is buying into the u.s. push for greater alliance driven collective deterrent and for australia to play -- pay a greater price and collaborating in that effort. that obviously involves greater risks for australia in taking a more proactive role with the united states and the u.k.. it is a step up. it's the most momentous and significant change of the strategic direction for australia in decades. this will be one of the most complex and technically challenging projects in the world. it won't happen immediately. we are talking about an initial phase exploration of 18 months. it may take up to a decade or more before they actually acquire this sort of capability
for the royal australian navy. nevertheless, it's a clear signal of intent that australia is stepping up its role in the region. haidi: what will be the diplomatic reaction from china, especially when it comes to building its own alliances? herve: it's interesting. we will have to see what will happen now. there's no way this would have happened without china. china will see it as a form of escalation, obviously. the way that australia and the united states will see it is that they are responding in a proportionate manner to china's growing power, to its assertiveness, to ask expands and isham in the south china sea. every story has two sides to this. there's no denying that this will escalate great power competition in the region.
it's all the more important therefore that the u.k., u.s., and australia were so keen to emphasize that this was not an acquisition of nuclear weapons for australia, but this would be eventually armed submarines that would be nuclear powered. that does serve to clarify and potentially also reassure china as to what the intentions here are. haidi: the biden administration's countering of beijing focusing on these alliances. does wind get taken out of the meetings next week? herve: now. not at all. i think this is all very tightly quarter -- choreographed in the lead up to the summit later this month. it just suggests that there are
multiple avenues being pursued here. you have the quad with india and japan, the u.s. and australia awkwardly titled the tense partnership office. the newest tool in the overall arsenal. you've got the five eyes partnership which is with new zealand and canada. that serves an intelligence sharing function. all these initiatives serve slightly different purposes. a slightly different array of players. they are all centered on the united states and a deliberate push to try to respond to china and create a balance of power in the indo pacific that would level the challenge presented by the people liberation army, the
navy's growing footprint. haidi: it was great having you on, as always. the head of research joining us from sydney. let's turn to the first word news with vonnie quinn. vonnie: pfizer says data from the u.s. and israel suggests the efficacy of the covid vaccine wanes over time. it says a booster shot is safe and effective. the company detailed the data in a presentation that it will deliver to fda advisors on friday. the panel is expected to make recommendations on whether americans need booster shots. a fire at achaea electricity in the u.k. has found a major cable that brings power from france. the uk's grid manager says the outage will last until at least october 13. power prices are already at record highs.
an importer of power has plans -- two cables that run across the english channel. simone biles says the fbi turned a blind eye to the sexual abuse she and other young athletes suffered at the hands of larry nassar. testifying before the senate judiciary committee, biles says the system enabled abuse of more than 100 women. he was convicted in 2017 and is serving sentences that amount to life without parole. spacex is preparing to blast a billionaire into orbit along with a health care worker. it's the first chartered passenger fight for elon musk's company. the passengers will spend three days orbiting earth at an unusually high altitude. we will bring you the launch
live when it happens. global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. i'm vonnie quinn. shery: -- haidi: we are getting the liquidity crisis at china evergreen group. authorities are warning lenders that they won't be able to make interest repayments due next week. let's get the latest from stephen engle in hong kong. the clock is ticking. every incremental development feels like a slow-motion car crash at the moment. is there a way to avert the disaster? stephen: yeah. the difference there, how do you quantify a disaster? ever grand is in discussions for extensions of these loans. it's not looking necessarily very good for the world's most indebted to lever -- deliver. we know that chinese a -- authorities have hired
international financial advisors, laying the groundwork for china's largest ever debt restructuring. the bonds are pricing in a possible default. these interest payments that are coming due next week are the latest headache. sources are telling us that the chinese housing ministry authorities have told the major lenders not to expect those interest payments that are due on subject -- september 20. they will miss a principal payment on at least one of their loans due next week. again, a slow-motion car crash yes. things are coming to ahead pretty quickly and escalating this week as the cash crunch is really biting them right now. shery: another day, another rating agency downgrading ever grand. herve: that's right. s&p is not up -- stephen: that's right. s&p is not optimistic. not surprising necessarily.
fits and others have cast a very dire picture about ever grand. s&p saying that the liquidity right now is severely shrinking and will not be able to serve debt in time. that's according to the latest statement from s&p. ever grand does not have bonds do this year. the next one is 2022. they do have coupon payments due this year including 84 million u.s. dollars due next week. next week is crunch time with the bank interest loan and the bond coupons due by next thursday. shery: stephen engle with the latest on the ever grand. one of the top ranked conservatives seeking to be south korea's next president says the u.s. approach to north korea talks is naive and into --
better than expectations. surveys expected 1.1%. also pick up from the 1.6% we had. year on year, that number coming in at 17.4%. better than expectations of 16.1% there. picking up from the 2.4% we saw earlier. the nation being listed out of the lockdown. we continue to see a trend of the economic expansion being extended into the second quarter. australia is looking ahead to the next quarter to see whether that national wide lock around -- lock down this rails that. delta variant lockdowns here resulting in large declines in jobs and our -- hours worked. let's get a preview from jacobs mcintyre.
james: thanks. the unemployment rate initially starting to reverse course. it really dived quite a lot over the last few months in the combination of the strong jobs rebound but also the fact that temporary workers had left. we have seen a lot of pressure building in the labor market. delta has changed that. we are likely to see the jobs data being the start of what we are likely to experience over the next couple of months. in september and october data of the un of limit rate in australia. reversing course into the fives. potentially into the high fives as lockdowns in the major economic centers has its impact on the labor market.
shery: new zealand beat first of the second quarter. that was before the nationwide lockdown. james: that's right. whether it's australia's market data or the new zealand gdp, we are really looking at what these economies were feeling prior to the delta disruptions. very strong growth. one of the reasons why, the rbnz momentum to raise rates. we really have to see where the economies on the other side of this delta outbreak that new zealand is seeing. it is still in lockdown. it is number -- an important part of new zealand's economy. that lockdown continuing. it's going to continue to cs reverse course on gdp in the third quarter. in my view, is likely the rbnz
holds fire again in october. we have to see how the virus fares. shery: james mcintyre there. let's turn to north korea there. it conducted its second major missile tests in less than a week. pyongyang is pressing ahead with its armed buildup. the biden administration's diplomacy stalls. the leading presidential candidate told bloomberg exclusively that he thinks the u.s. approach is naive. >> [speaking non-english language] >> wins dies -- wednesdays missile launches nothing new. what is important to me is the fact that north korea has reached the completion stage of its submarine launched program. this means the collapse of the u.s. nuclear defense network. the u.s. is prepared to defense against intercontinental
missiles. with a submarine launch, that defense network will be in -- neutralize. >> how can the u.s. defend this? >> that's how far the new korean nuclear issue has come. american still want to use diplomacy. i find that approach hard to understand. we have to come up with a better way to handle this. >> how do you plan to facilitate this? >> americans are approaching north korea in a naive way. diplomacy is nothing but a reckless approach. it has no foundation, just blindly pushing to molest the. -- diplomacy. they will never back down. they pretend to back down. if you look at the way the u.s. approaches north korea, they've become dragged into their ways. it by bit, north korea has crossed the red line.
♪ >> we need to have a level playing field on the rules and regulations on a global scale. it's >> it doesn't open -- only happen within the four walls. it creates the supply chain. this is a unique opportunity for europe to create strong platforms. >> this is going the direction to enable our industry to develop the solutions that enable countries worldwide to become useful. that should be the agenda. >> this is now not all about risk. it's an opportunity for germany and europe. let's talk about the environment. haidi: business leaders talking about climate policy there.
look at the commodity space. the bloomberg index has rallied for four consecutive sessions now. it's at a decade high. not surprising that we have seen u.s. natural gas level surging to a new seven-year high. a little bit of consolidation and pullback. the top of production remaining shut after hurricanes nicholas and ida. a different story for iron ore. the longest losing streak since 2019. trying to -- china plunging to a 17 month low. we are seeing a rebound when it comes to platinum and palladium. that group of metals being hammered by the chip shortages, given some carmakers have had to shut down their factories, given the lack of semiconductors. palladium rebounding in the session. in europe, gas and power prices soaring, breaking records day
after day. factors including low wind output as well as rising costs of emitting carbon feeding into energy crunches in the u.k.. prices intensifying after a fire shut down a major cable bringing power from france. sophie kamaruddin has been tracking the surge in power prices. what's your assessment? sophie: the price action has been remarkable but not unreasonable with current levels reflecting tight balances and a growing winter risk premium. should there be colder than average seasons, that could so competition. goldman is the only balancing mechanism, balancing higher prices which raises the risk of power blackouts in europe. keeping an eye on japan's utilities as well. mitsubishi expecting that is
when they will be credit positive for the energy sector in japan. this morning, local media reporting that they don't plan to replace or build nuclear reactors. shery: -- haidi: let's get you a quick check of the latest business flash headlines. one of australia's largest pension funds -- they will invest $732 million in bonds by year-end. the fund is trying to harbor omissions by the end of the decade. it is planning to decarbonizing toll fixed income portfolio. hong kong genomics and diagnostic testing companies say they are listing on the nasdaq. the merger gives them $1.25 billion. we continue to count down to the spacex launch of inspiration,
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