| The U.S. considers action against Chinese software beyond TikTok. Virus cases spiral in Australia's second-most populous state. Equities look set for a muted open. Here are some of the things people in markets are talking about today. The Trump administration will announce measures shortly against "a broad array" of Chinese-owned software deemed to pose national-security risks, U.S. Secretary of State Michael Pompeo said. The comments suggest a possible widening of U.S. measures beyond TikTok, the popular music-video app owned by ByteDance, one of China's biggest tech companies. President Donald Trump told reporters Friday that he plans to ban TikTok from the U.S., but his decision hasn't been announced. That move would have implications for Microsoft, which has been exploring an acquisition of the app from ByteDance, according to people familiar with the matter. Talks on the possible acquisition were in limbo over the weekend. ByteDance would rather spin off the video-sharing app than sell it to Microsoft, the South China Morning Post reported on Sunday. The government in the Australian state of Victoria on Sunday declared a state of disaster after the coronavirus outbreak showed no signs of abating three weeks after Melbourne's 5 million residents were ordered to stay home except for work, medical care, provisions or exercise. The lockdown will now cover all of Australia's second-most populous state, and residents of the city will be under curfew between 8 p.m. and 5 a.m. The new restrictions will be in force for six weeks, and Australia's Treasurer Josh Frydenberg said the nation's economy faces another significant hit. In Asia, the Philippines is reimposing a lockdown in Manila and Indian Home Minister Amit Shah said he tested positive for the virus. In the U.S., cases in California increased by more than the 14-day average and New Jersey's transmission rate rose further. Here's how Bloomberg is tracking the virus. The U.S. dollar was mixed in early Asian trading Monday and the Australian dollar fell. Equity futures pointed to a muted open amid spiraling Covid-19 cases. S&P 500 Index futures edged up when they opened in Asia. Infections are picking up again in some U.S. states; a senior Federal Reserve official on Sunday urged Congress to act to support Americans laid off due to the pandemic and suggested a fresh lockdown. Friday, U.S. stocks extended their July rally amid a surge in technology shares and talks over a virus-relief package. Treasuries climbed. Oil edged was little changed and gold ticked higher. The staple U.S. portfolio of 60% equities and 40% fixed income has proved resilient this year, but strategists are now considering alternatives to government debt after some bond yields reached historic lows. Sanford C. Bernstein recommends taking more risk by favoring stocks and gold, and argues the negative correlation between equities and fixed income is likely to unwind. Morgan Stanley said corporate bonds may be the best alternative to sovereign notes for curbing portfolio volatility and providing a level of income. Blending stocks and bonds, a decades-old investment staple to balance risk and reward, is being tested by ultra-low yields. Five-year Treasury yields fell to a record after the Federal Reserve last week delivered a dovish message of support for the coronavirus-stricken U.S. economy. Goldman Sachs and Bank of America were left off Ant Group's upcoming stock sale in Hong Kong because of their past work with rivals of its affiliate Alibaba, according to people familiar with the matter. Bankers have been told by senior executives at Alibaba Group, which owns a third of Ant, that they should refrain from doing deals for its competitors if they want business from Jack Ma's sprawling empire, the people said. Ant filed last month to go public in Hong Kong and Shanghai in offerings that could top Saudi Aramco's record $29 billion IPO. The directive shows that Wall Street banks are having to make early bets on which firms to stick with in China, especially as juggernauts like Alibaba and Tencent extend their tentacles into hundreds of businesses in finance, transportation, retail and entertainment. What We've Been Reading This is what's caught our eye over the past 24 hours: And finally, here's what Tracy's interested in this morning Welcome to August, the most dangerous trading month. As my Bloomberg colleague Katherine Greifeld notes, the Cboe Volatility Index has gone up an average of 11.7% in August over the past 15 years, more than any other month. There are a few reasons for this.  August marks the dog days of summer, when Americans and Europeans are wont to embark on extended holidays. Senior traders at large banks often take their mandatory leave around this time, leaving desks manned by junior personnel and sometimes exposing frauds. Liquidity overall creeps lower, which means events that might "normally" result in relatively small price moves can suddenly end up having a surprisingly large effect. All in all, weird and unexpected things tend to happen in markets at this time. And since 2020 has already been marked by an overabundance of weird and unexpected things, it feels prudent to be extra cautious. You can follow Tracy Alloway on Twitter at @tracyalloway. | 
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