Transcripts For BLOOMBERG Bloomberg Markets 20240713

Could you suggest which specific areas of the country could have guidelines relaxed . Trump i think there will all Start Talking about that in a few minutes, tony will talk about it, but cant say lets close. People dont want to close. I say it again and again. The reason i do is that i want you to report it eventually. Reporter when you talk to president xi tonight, what do you want to talk to him about . President trump it is his call. I think we will have a beautiful call. It is tonight at 9 00. We will be talking about the virus. Reporter the market rally again, up over 4000 points in the last three days, largest increase since 1931. The Economic Activity has passed . President trump no, it has not passed but it has come along way. They think we are doing a really good job in terms of running this whole situation in terms of the virus. I think they feel that the administration, myself and the administration, are doing a good being very important in keeping people informed, because there was a great fear rate at a lot of good things are happening , and the mortality rate, in my opinion, you will have to speak to deborah and tony and the others, but in my opinion, it is way down, and that takes a lot of fear out. It is one thing to have it. It is another thing to die. When i first got involved i was being told numbers that were much, much higher than the number that seems to be. Thatemember, the people have it many people have it come i spoke to two people who have it, they never went to a doctor, they have it, the absolutely have it, but they never went to a doctor. He never went to anything. They didnt reported. They didnt report it. You have thousands and thousands of cases like that, so you have to add that to the caseload also. And the people that actually guy, that percentage is a much lower percentage than i ever thought. That is one reason i say, we are going to beat this and we are going to get back to work. Yes, please. Reporter there was reporting today the doj is going to be charging Nicolas Maduro with drug trafficking. It is also expected venezuela will get hit hard by the coronavirus. As the is ministration does the administration see this as a weak point for the maduro regime . President trump no we dont look at it as a weak point. This is serious for 150 nations. Venezuela and maduro, we are watching closely and we will see what is happened that we will see what happens bit but that is correct. Reporter you said you would use the Defense Authorization act on two occasions, what are those . President trump we will let you know. Reporter on classifications for counties, a lot of these areas have not done testing it. It is is it safe to say the current timelines will be extended into next week . Will you wait to change those guidelines until you have the data . President trump i want those guidelines to go even when we are open and fully operational, and frankly, much of the guidelines like shaking hands, maybe people arent going to be shaking hands anymore. Tony mentioned to me the other day, tony fauci, i dont think he would be too upset with the concept of not shaking hands. He said the regular fluid be cut down by quite a bit if we didnt do that, if we didnt shake cant. The regular flu, you have the deaths you have a lot of deaths and a lot of problems oo, so i think we are going to have a lot of great things. As soon as we are open, that doesnt mean we are stopping the guidelines. You will still try to distance yourself, maybe not to the same extent because you have to lead a life. At the time has come. One more question. Guy ahead, please. Go i had, please. Reporter goahead, please. Reporter you said the other date is important to protect Asian Americans. President trump it is important to me. We have to protect our Asian Americans. That is very important, a tweet, to me, because i didnt like when i was hearing. Reporter what are come bash one of the concrete measures you are taking to combat hate . Americanstrump asian in this country are doing fantastically well, im very close to them as you know when they are doing fantastically well. But i didnt want to put out the statement, the social media statement, because Asian Americans are great part of our country. Thank you all, very much. Well see you soon. You have been listening to President Trump address the public. He was talking about the stimulus bill he expects the house to pass. We have heard from Speaker Nancy Pelosi saying the house will move quickly friday to give final congressional approval to this historic, 2 trillion rescue plan. Saying this is and we have seen a surge in masks. And President Trump says he will discuss this virus with xi jinping. In u. S. Has now passed china coronavirus cases according to john hopkins. In the markets, u. S. Futures higher 3 10 of 1 after we saw the first three day rally since february for the efts for the s p 500 index. Defenses were higher, utilities and real estate let the way, we have the dow surging 21 from the lao it hit monday from look at dei. Look at wti, a strong rebound after the head of the International Energy agency said Global Oil Demand is in freefall, made worse by the price war between saudi arabia and russia. Still volatility being seen in the crude market but we are headed in the last trading day of the week in asia and it looks like a show will follow wall street higher after that threeday game for u. S. Stocks. This is the positivity we are seeing across asian futures in we moment, looking firm that will see australian markets open in the green, looking over 4 . Qantas,watch airlines, after International Airlines passengers plunged 44 in the month of february. New zealand, trading 4 higher despite Consumer Confidence falling. In terms of other numbers we are watching out for, China Industrial profits are dropping later today and that is expected to see doubledigit the clients for the year, just getting doubledigit declines for the year. The jet pan market open will be ,nformed by inflation correlation in the nationwide price trend expected to show further weakness in march. Sx, anothers to decline overnight, falling against all its g10 peers, trading at one on nine, the aussie dollar for seeing the aussie dollar seeing a respite, as we watch for quantitative easing, looking like it has gone pretty well so far in the first few days of its quantitative purchase program. It is starting to get interesting, we had thursday the pboc asking for stabilizing after he had been with arforming, strongerthanexpected level thursday. So perhaps a bit of signaling its intention to support the currency. As we saw few moments ago, President Trump speaking as cases in the u. S. Surpass those of italy, numbering 80,000, and according to Johns Hopkins data, overtaking china with most cases as well. Our reporter Laura Davidson is in washington. We see these cases continuing to mount and President Trump talking about his intention to get the country. Lara he said he laura he said he would be putting up guidelines to the governors of states to go about opening up their economies. It is unclear exactly what that would look like. He said he still wants people to practice social distancing, follow cdc guidelines, but also go back to work and resume life as normal. Those guidelines as a reminder say no more than 10 people gathering at one place, so it would be very hard to see how schools could be open or how many businesses could operate. He is talking about lightning those up and that has been really concerning to both president s own Health Advisors as well as outside advisors who say, look, if you let up the guidelines and restrictions on people moving around now, we could see a trend line of deaths and cases that is already slanted up just spike, and any containment that happened over these past two weeks, we would erase those gains. Shery we are also hearing from Vice President pence that he expects the house to take up the stimulus bill tomorrow around midday. Tell us about what is included. This is a historic bill in size, two point 2 trillion worth of stimulus for individual households as well as Small Businesses, large businesses. There are individual cash transfers about 1000 per person going out to middle and lower income taxpayers, there is a big fund for corporations that comes with Strings Attached on stock buybacks and ceo pay. There are loans, including loans given to Small Businesses if they keep employees on the payrolls. There is also a lot of funding for Health Professionals to make sure they are getting funding at the equipment that they need. It is a massive bill. It is set to be voted on tomorrow when the house. It appears it should pass, but it is possible there could be some delays, there are some members upset with the process, but it would not be enough block final passage, we would just be looking at a delay of a couple of hours during the day. Shery Laura Davidson in washington, thank you. Resident trump and chinese president xi jinping are set to talk later today, this comes after xi called for Stronger International cooperation to fight the outbreak at a g20 meeting. Lets check with correspondent selina wang. Say . It president xi is a sign of positive cooperation between these two countries at a time when Global Cooperation is needed. For unityxi calling and Cooperation Among companies in order to stave off a Global Economic recession. So china is asking for countries to implement strong fiscal and monetary policies, keep Exchange Rate stable, Work Together to stabilize supply chains, and also said countries need to reduce tariffs and trade barriers but did not directly mention trade tensions with the u. S. And the fact tariffs remain in place on china in terms of the faceone trade agreement. You also heard xi call for an increase in the output of pharmaceutical supplies and medical this cities, as countries around the world are desperately trying to acquire and stockpile more medical equipment, including masks and ventilators, as cases around the world now top 500,000, more than 23,000 deaths. The g20 leaders are pledging for cap committedts to spending trillions of dollars at these ordinations are critical to these crises, including the Global Financial crisis in 2008, so it is critical that you are seeing multilateral multilateral cooperation, the backdrop up u. S. China relations is still very tense in terms of this fingerpointing and blame game going on between the two countries, not to mention the broader economic trade and technological tensions. Of important terms cases china is struggling with, the country has announced a new measure to limit foreigners coming into the country. What do we know . A china is going to temporarily suspend the entry of foreigners starting saturday, but they will ban foreigners, even those with valid permits and visas. This is a comprehensive ban. It follows bands imposed by other countries, which china had resisted previously because most of the cases were within its borders. But as the official data now shows the vast majority of cases are coming from people who have been traveling overseas, you are seeing china change its stance. Our as they are relaxing restrictions domestically with the announcement that on april 8 the wu had locked down will be lifted, and recent days you have seen april 8 the wuhan lockdown will be lifted, and in recent days you have seen them require international panzers International Passengers to take a test, and in beijing flights have been directed to other airports, and only people virus free can go into the city, and still have to undergo a 14day quarantine. Shery selina wang, our china correspondent, thank you. Hearing from american ceos in a note to employees that they are hopeful voluntary leave uptake will be robust. They are saying they will continue to reduce lights flights scheduled. The american airport will forgo cash compensation. We heard President Trump talk about support for the airline business, saying it is vital for the country, that they want to keep airlines going. This includes the stimulus package that includes 25 billion in grants, 25 billion in loans to carriers and so forth, american air now saying they will reduce flight schedules even further. Still ahead, neu capital director edward jones tells us how the coronavirus is affecting debt, and why he sees unemployment hitting 12 by june. Up, wealthwiseng financial president loreen gilbert. This is bloomberg. You are watching Bloomberg Markets asia. Lets get to headlines. President trump says he is confident the u. S. Economy will rebound as soon as the economy opens up to the coronavirus. He says it is not the fault of the u. S. He says he is in close contact with his counterpart in china, and that deploying troops to the canadian order is equal justice for action on the frontier with mexico. Fed Balance Sheet has topped 5 trillion for the first time as it tries to cushion markets from the coronavirus fallout. However, it says it will continue to provide essentially unlimited support to the u. S. Economy to the u. S. Crisis. Chairman Jerome Powell acknowledged the u. S. May already be in a recession. We are not going to run out of ammunition. That doesnt happen. Rating timenterest at what we think is right, giving the economy the right level of support. If we had raised Interest Rates more, it would have been higher and Economic Growth would have been slower, so it would not have mattered in the end. We are really always setting our Interest Rates at the level we think is appropriate. Shery the European Union announced a new fund of 40 billion to combat the coronavirus, saying citizens of the block will member that lawmakers were there when people needed them. The Commission President called for urgent and Massive Action to stop the out rake and overtake the outbreak to stop the outbreak. Haidi china is suspending entry of foreign travelers during the coronavirus, halting admission of people with valid visas. The move goes into effect saturday. The ministry of Foreign Affairs says it is in response to decisions taken by other countries. The president used a g20 Conference Call to call for greater cooperation to avoid a global recession. 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. This is bloomberg. U. S. Futures are gaining again after stocks are on a Third Straight day of rises as the u. S. Stimulus plan cleared major hurdles. The dow saw its biggest preday gain since 1931. Gilbert,s is loreen wealthwise financial president. Great to have you with this peer not something you would expect in the job in the stock market when you have jobless claims spiking to 3. 2 million. How do you assess the action . Million is a. 2 large number, the biggest that we have seen in a oneweek period. I think that a lot of that will turn out to be hospitality and leisure, because that sector acted quickly to respond to their vacancies. Going tong at what is happen next with the economy, when it comes to the stock market, the stock market is looking forward to that stimulus package, trusting that that is going to help us get back on track. Shery where are we in terms of valuation . And could we get stocks cheaper, given the amount of volatility and uncertainty . Loreen i do think so. Back days that are positive for the markets, but i think we have to go in with caution, looking at most likely vshaped instead of a recovery, and looking at another downturn in stock. Haidi would you advise people to increase their equity holdings, given the valuations we are seeing . Nothing fundamentally has changed in terms of a turning point in the Public Health crisis. We are not seeing at the infection numbers come down, which most people say is what you would need to see for any indication on when the economic shutdown can begin to recover. Loreen i agree. When we look at what it is going to take to come out of this, first there was Monetary Policy. Then fiscal stimulus. And then the third thing is, we have got to see a decrease in the infection rate, and people going back to work before our economy can truly recover. So we are not there yet. We are just now looking at fiscal stimulus being passed. It has to work its way into the economy and into the system. And then we have to see a decrease in the infection rate for people to go back to work. So i would say enter into the markets with caution. And we are focusing on the Large Companies that we now have strong Balance Sheets, have lots of cash on hand, and we know will get through the crisis. There will be a time to invest and put more cash in other companies, may be and midsize, but i would say for now to be focusing with a sense of caution. What are your feelings at this point about big tech . As a sector it was the slowest to fall and quickest to rise, so does that indicate resilience going into the next phase of the crisis . Loreen we are looking at all different sectors. Specifically technology, there are great names there to look at, and i think it is names people are comfortable with. People know those names. For instance, we were buyers of microsoft this week. And we like that name because it is a large cap company, lots of cash on the Balance Sheet, wellpositioned for the recovery, so that is one stop we are watching. We are watching many others. But i would say that technology as well as other sectors, there are good names to be found. Shery we have seen Companies Like target, for example, really cut their forecasts. Because although we saw sales surge in march, they are worried about the future. What the cash handouts in the u. S. Help retailers, as we not only see panic buying right now, but perhaps consumption could get a boost . Or is it too early to get into that sector . Loreen i think it is too early to know a lot of things. When we are looking at Consumer Discretionary and trying to look at names, i would focus on those names that are recession proof, in essence where people shop when they are feeling a crunch, and those would be your bargain companies, companies were people go and think they can save money. So i would be focusing on that. But until we get Forward Guidance from companies, we just dont know how much this is going to impact them. Loreen gilbert, president of wealthwise financial with us, thank you for joining us. We will speak with top policymakers on bloomberg friday, exclusive interviews at 8 00 p. M. Hong kong time, joint by the atlanta fed president Raphael Bostic about 30 minutes after that. Lets check business flash headlines. Is expecting higher credit losses due to the coronaVirus Outbreak, even after regulators allowed greater leeway to do with unpaid loans. The bank is putting a program on hold, saying it must account for the wider impact of the pandemic. Disruption may have an adverse impact on the value of its assets. Shery citigroup is pausing planned job cuts as it supports its workforce amid the coronavirus of people, but sources say the move is only temporary. Earlier this week citi said it would hand out bonuses to certain staff and told workers to date during the pandemic wont count toward paid time off. Morgan stanley said it wont cut headcount this year. Haidi Deutsche Bank is considering tapping government subsidies by putting staff on shorter hours while keeping salaries intact. The lender said it is preparing norio spurred the German Government made it easier for companies to apply for aid to offset wage losses during furloughs. Up next, an exclusive with house Speaker Nancy Pelosi, who expects quick approval of the record 2. 2 trillion rescue package expected to pass the house on friday. Theres no place like home. Especially when xfinity has you covered with fast, reliable internet. With advanced security to help keep you secure online. And with the most tv shows, movies and streaming apps all in one place. With simple Digital Tools you can get the help you need or even trouble shoot your services on your own. Download the xfinity my account app or just say help into your xfinity voice remote. We are working to make things a little easier on everyone. Download the xfinity my account app today. You are watching daybreak asia. Quick check of headlines, u. S. Jobless numbers soar in a quick sign of economic devastation from the coronavirus. More than 3 Million People filed front appointment insurance in the week ending march 20 first, dwarfing previous levels and records going back to 1967. Two weeks before the shutdown, the total was 210 thousand, close to a halfcentury low. Shery japan is cutting its assessment of the economy during the virus has factories or shut down and people are out of work. The Cabinet Office cut its forecast, saying the nation faces a severe situation. Officials have abandoned their view the economy is moving toward a quick recovery. This follows the postponement of the Tokyo Olympics. Hong kong exports cap to their worst twomonths in a decade as the coronavirus upends global trade. Its the weakest performance since 2009, despite an unexpected rise last month due largely to the timing of the Lunar New Year holiday. Shery singapore has delivered a second stimulus package, worth about 33 billion u. S. Dollars, to fight the corona package, drawing on National Reserves for the First Time Since the financial crisis a decade ago. The extra spending will raise the governments release program to almost 11 of gdp and will widen the budget deficit. The government says the situation calls for extorting our measures. 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. You are watching bloomberg. Nancy pelosi says the house will move swiftly on final congressional approval of the 2 trillion coronavirus rescue plan and will then have it then pivot two additional steps to protect the u. S. Economy. She spoke to us exclusively. Hoyer gaveht mr. Notice to members that when the senate bill passed we would come to the floor on friday morning. We have to give 24 hours notice of bringing a bill to the floor. So that will be friday morning, and it will be a lively, wonderful debate. We are very proud of the legislation. We will have a strong, bipartisan vote and hopefully by noon, we will be finished. That will depend on how carefully we have to come in, in small numbers on the floor of the house, to vote. We are very proud of the legislation, because we believe that many elements of the House Democratic bill are contained in bill. Nate will senate it helped support the senate democrats, who did jiujitsu on the republican bill, that was very corporate focused. So we are very pleased with that, just to change the leverage. You mentioned some of the oversight in this bill for larger corporations, some might call it a bailout. After is it oversight the fact, or will there be advance consultations, now, it shouldnt go to that company . Speaker pelosi there are a couple of categories. The airline industry, for example, has a direct formula, nearly 5050, part of the money goes to loans for airlines, and part of the coaster grants because it goes directly to the employees, and that is the condition there. The money just touches base there and goes directly to employees to keep them employed, and the other funds do have conditions about no buybacks, no dividends, no bonuses, all of becaused of provisions, people felt very burned about what happened in 20082009. We dont want to keep into resources from anybody who really needs it in order to help our economy grow at this time, but it really has to be coronavirusspecific, that has been our position from day one. This is our third bill. Our first bill was about an emergency, our second bill was about an emergency, this third bill is about medication, try to mitigate the damage done to our economy as well as continue to make the Emergency Health needs of the american people. Will bills will lead toward recovery as we go forward and restore the infrastructure of america. All these things are being done in a bipartisan day, but we have to make sure the leverage is more equal, rather than trickle down, grow up. Speaking with speaker of the house nancy pelosi peerless talk about the next bill you refer to. What are you looking at . Some people on the hill say this is a time for infrastructure. Are you starting to think about what sorts of things would help with that recovery . Speaker pelosi we still have a little Unfinished Business with the two previous bills. For example, the first dell, we said testing, testing, testing, testing for everyone. Bill, tothe next facilitate that. However, what we want to do that has not been provided for in the two bills is to make sure that the funds that are required to cover the cost of testing, not , we dont want anybody to get a high deductible because they were responsible in responding to the requirement that they be tested, for those that are required to be tested. Haidi that is house Speaker Nancy Pelosi speaking to us earlier. Lets check in with Bloomberg Markets editor in sydney. Adam, how much followthrough can we really expect when we get to the Asian Session today . Adam that is the big debate now, whether it is just a bear market bounce or something sustainable. But clearly going into the friday session in asia, the set up is pretty well supported, very broadbased gains across equity markets, all the futures markets looking on the order of 3 higher in both japan and in hong kong. So you should see some of this feeding through. But what was particularly interesting about the speed and pace and magnitude of the decline is the Coronavirus Crisis exploded, that that caught a lot of people off guard. That didntpeople have enough bonds and cash in their portfolios would quickly fall into double down Massive Equity positions. And now we are seeing, only two or three days in the rally, but also the speed and magnitude of how quickly things are moving higher. And that still has people nervous. So there are enough people in the markets still happy to be selling these rallies, to continue to have that cautious positioning over the longterm, they are still concerned about the peak not just in u. S. Cases, but the peak in many other cases around the world, what you do in terms of response, as well as how that impacts businesses, people, and the operations of economies around the world. And that is still very much an unknown, and of course totally unprecedented in the way we have responded to this with the monetary and the fiscal side, but also the Ongoing Health crisis and how that continues to impact the way people are making investment decisions. So yes, a massive bounce, no doubt about that, and it looks like a decent set up for asian equities on friday. But there is still a lot of nervousness in the market. Shery is anyone at this point upgrading their equity stance . Week,yeah, a few this bank,y binky and deutsche and he has done quite well in positioning in 2019, and also turning cautious early in 2020, not that he forecast the pandemic, but he saw things were a little fragile, so he has gone from an underway possession after the selloff in moving to a neutral position. At the essence of that is that they had been defensively position for some time and are now starting to price in a market that is a lot more bear. And at the Credit Suisse investment committee, we have seen them move to a slightly more bullish stance as well. So there is a notable move, and not just the sellers come but the Money Managers themselves who have shifting positions, but it is not a wholesale, we are out of the woods and everything is better. Of course, lots of unknowns, particularly with the way prices what has been reassuring this weekend contributing to some of these rallies, is that the fed and the fiscal side have gone over and above what we were expecting. The fed of course have repeatedly tried to do their utmost to reassure investors that they are doing enough to maintain the plumbing of the thencial system, and also economic repercussions of how they can cushion the blow from the crisis. So that is helping people incrementally take a little risk at this point, given how bearish people have gotten during the rout. Shery thank you. Up next, australia has thrown more than 100 billion dollars of stimulus at the coronavirus, but is it the right stimulus . We will hear from corporate financier at neu capital, which is a stark warning for the economy. This is bloomberg. Shery haidi the australian economy had troubles before the coronavirus, and now companies are cutting workers by that thousands as the virus hits markets. Rba hasrnment and the unleashed more than 100 billion in fiscal in fiscal and monetary stimulus. Neu capital director edward jones joins us. Tell us what you are seeing thet the rescue package in transmission mechanism . Multipleeeing announcements so close together with such large dollar figures across monetary and stimulus tells us the situation is changing rapidly. The government is trying to get ahead of it, but it is an Unprecedented Demand and supply shock, and an erosion of trust in credit markets. We are expecting this to get worse. We saw the horrible jobless claims data from the u. S. Overnight, and you act that to be replicated globally. This is going to be a labor market tissue for some time. Absolutely, especially on the service side of the economy. The fiscal path pages that have been unveiled are quite powerful and will help a lot of companies the fiscal packages that have been unveiled are quite powerful and will help a lot of companies, but on the surface on the service side, you are not getting that revenue back. So it is the Service Economy we are particularly worried about. Shery which means people could lose their jobs. Here in the u. S. , jobless claims already topping 3 million. How bad could it get in australia . Edward we have run some numbers and believe 12 is on really stick. Is unrealistic. I think the attributes we are seeing now in the speed at which monetary supply has shrunk, and indicators from u. S. Unemployment data, tell us they seize heading for something quite significant. We are particularly worried about the midmarket, the large corporate sector, and needing more bailout money. And the midmarket is the engine of the economy, the supply chain, and they are the ones that have to let go of their employees, and we are seeing especially in some Service Sector areas and leisure businesses having to close all fire most ofand their staff. Shery here in the u. S. , there is optimism that the u. S. Economy was pretty resilient going into the outbreak, but australia was already starting to slow down, so how much more risk is the australian economy face . Is a really interesting comparison. To the managed to get gst relatively unscathed compared to some of the other nations, and i think a lot of people have said we are overdue a recession. It has been some time. And we have certainly seen in the runup to coronavirus, but before the actual impact in february, we had noticed a significant uptick in the level of insolvency receiverships we sawaustralia, and that to be a negative sign for the next few years. Add on one of the biggest economic shocks this country has ever seen and yeah, we certainly expect that the australian economy is going to have a tough time in the next few weeks and months. A source last week told us that proportionate to the amount of debt burden u. S. Companies are carrying at the moment, things are going to be potentially worse than what we saw during the Global Financial crisis. Im wondering about the impact on your business. I know you ventured into private equity matchmaking for midmarket companies in australia. For private equity in particular, it is probably a pretty opportunistic time at the moment, would you say . Edward absolutely. The nature of the underlying funding for different elements of the Financial Markets becomes critical at this point in the cycle, where you are a publicmarket funded entity and have to borrow wholesale in order to fund loans, or you find yourself with openended funding structures and equities. You are going to be seeing a lot of controls. That makes it harder to write new business. And on the flipside, in the absolute return markets, what Global Investors call the alternative space, private equity there, that is more commonly with committed capital and more commonly focused on the use therve, so not to wrong word, but they are going to be quite excited about opportunities that normally have fall down, and we several hundred alternative Capital Providers across news dread across australia and new zealand and globally that have actually been increasing their ability to execute prior to the Coronavirus Crisis. So we are expecting some of these private markets to ramp up is whattivity, and that a lot of our relationships are telling us now. Haidi edward, what sectors would be most targeted . Im assuming the most vulnerable ones, across energy and travel and tourism, but there is a sense that maybe some of these companies would be holding out, to wait to see what more often meant stimulus could potentially do . Are we likely to see dealmaking, or a delay . Edward i think we will see a fair amount of dealmaking. The rate at which this crisis hit is so significant that cash reserves are drying up very rapidly, a lot of what we would call very Strong Companies not seeing huge dropoffs in their performance so far. So the amount of trust across the economy is certainly increasing. As far as where we see the most private capital going, i think the areas that are least hardest hit would be the more tangible to theses that pertain Remote Working economy, those are the ones that are going to be most busy in terms of deal flow. Quite a few of the Service Economy businesses that have been operating on low margins with low cash reserves are going to have a tough time. We dont expect them all to make it through this crisis. And on the flip side, there are stronger plays out there and we are providing advice right now to give our businesses an opportunity to consolidate market share. Shery edward jones, neu capital , thank you. Plenty more to come on daybreak australia. This is bloomberg. The economic slowdown due to the coronavirus has created the most distressed private markets since 2008, but an asset magic an Asset Management company is buying. One investor told us where he sees opportunities. Yes, we are buying, we are buying at 1000, buying at 1200, we are buying at value. The first thing we are buying is quality that will recover irrespective of where spreads are. We want to buy that 80 low price asset that has a nice coupon 80 price asset 80 price asset plus your coupon, that is the first thing we are buying and we can buy regardless of assets are. Ield and we want to buy a bond that will make it through with no question of restructure, make it to the cycle intact. There are lots of bonds. We have a shopping list. Where there it is 900 off or 850 or 1000 or 1200, we may have price volatility, but we are patting a portfolio with those type of bonds because those bonds that you find at 80, you might be able to find at 70, you have a 5 coupon and that dollar price would be very interesting to us. And the third thing want to do is be involved with companies that are going to be restructured, but that is for a later discussion. It is too early to see how this plays out, but if you look at 2008 for instance, and this is an important lesson, when General Motors filed for cardsptcy, and the geithner are was appointed and geithner was appointed to manage the bankruptcy, they were trading around a 20 price, 25. When the bailout package came from the government, the restructuring was all about the , which were exchanged for debt and equity. The bank debt rate that was in the 30s got taken out, which wr debt and equity. , that was the security interest above the insuranceo marathon analyst and our bankruptcy lawyers are doing this work on these companies, but we are not paying dividends in advance. We are waiting for the opportunity to unfold, for deciding what is intact above the fulcrum security that we will want to purchase. There are going to be lots of opportunities like this, because the forwards are going to 10 on a 3 trillion market. So we are not going to see 100 billion, but hundreds of billions of dollars of paper we can invest in. S will be less about a and equity story and more about a credit story. Buys would be low rated securities, trading at huge discounts, above the fulcrum securities and nonperforming loans that we will be buying out of europe, because we are going to replenish tales at the banks from 1 trillion to ills at theh t banks from 1 trillion to 2 trillion. Avoid energy. Dont touch it. From a credit perspective, i would not want to buy anything in traveler leisure. It is too early. But once the government stabilizes the companies, from an Equity Perspective and from a stability perspective, i think they are going to force the force from a stability perspective, there , highlymoves to equity equated to creditors who can come into that situation. Optimist, and speaking to some leading medical scientists and so forth around the globe, and we will get through this and we will come out with antibodies and vaccines and drugs to come bed covid19 to combat and when we come through this, the assets will be cheap. As the british say, keep calm and carry on. How low does the leverage at the vix go . Into the 60s before this is all over. How high does the highyield index spread go . 1100, 1200. That is it. Richards,t was bruce marathon Asset Management speaking exclusively to bloomberg. Up, we discussed how the flood of fiscal stimulus and monetary intervention and all the extraordinary measures sweeping through the bombed the bond markets, and how investors should rework their strategies. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Haidi a very good morning. On haidi stroudwatts and sydney were markets have just come online. Asia. Welcome to daybreak asian markets look set to extend gains that we saw on wall street despite the u. S. Surpassing china for the highest number of virus cases. More than 80,000 people have tested positive. China closes its borders to foreigners to stand stem any import of infection. The ubs boss says the response so far by government and Central Banks has been effective. We will hear from the ceo. Lets get straight to sophie to see if we are carrying if we are seeing this carrying on into wall street. Sophie we are seeing us ashares open higher. Futures indicating gains with Global Shares on course for a 13 rise at the end of a week that saw more stimulus unleased. Withba bond buying Group Funding stress easing. We have already had Consumer Confidence hitting a record low and south korea. The kiwi dollar slipping after new zealands Consumer Confidence tented much, but the kiwi and aussie set for weekly gains of more than 4 . 110. En trading below we are seeing threemonth dollaryen moving in favor of yen calls on japan as shinzo abe moves closer to declaring a state of emergency. Ecb, buting on the rate strategist do see euro weakness. Credit swaps have continued to tighten, but companies in the region are not yet joining this weeks frenzy to tap debt iskets, but asia issuance expected to rebound in the. Oming weeks an appetite for junk likely to stay cautious. Defaulteasing risk of looming large. Shery thank you very much for that. President trump pushing the house to quickly pass a 2 trillion stimulus bill without delay as the u. S. Has overtaken china for the most confirmed cases of the coronavirus fueled by a surge of infections in new york. Us from d. C. Joins the president very much ready to go back to work, but of course, we do have the stimulus package to pass. What are we expecting tomorrow . Thats right. We do have this big stimulus package. The Senate Approved a bill last night on a 960 vote after intense negotiations in the chamber. The bill goes to the house where nancy pelosi has predicted passage by noon tomorrow. The house has said they would like to pass the bill swiftly, but the mechanism to do that, they worry any one lawmaker could block that, so they may ,ave to hold a roll call vote so that would mean bringing the entire congress together. That would mean bringing the house together. We will know more about that tomorrow. Haidi in the meantime, we are seeing cases in the u. S. Getting worse, surpassing italy and china. President talking about the economy reopening. What is the latest when it comes to slicing or flattening the curve . Thats right. It is a bad day for cases in the u. S. , and we have President Trump who actually in a letter to governors today saying his administration was trying to working on a plan to reopen parts of the country. That plan would essentially rank counties in the u. S. Into one of three categories high, medium, or low risk. The ranking would be mostly a guideline to local officials to decide on maintaining increased or relaxed certain social distancing guidelines or other measures. We heard Vice President mike pence saying trouble getting range of options. Jobless comes as the claims. Once he deepsea official did warn in an interview that relaxing social distancing does risk outbreaks in parts of the country. On top of the fiscal stimulus we are seeing around the world, we are also seeing plenty of Monetary Policy. The infinite bond buying from global Central Banks upending bond buying strategies. Lets bring in the global head of rate strategy. Great to have you with us. Give us your take on how all of this Monetary Policy action, not to mention fiscal action as well, is affecting the bond markets. Thanks for having me on. I think this entire situation, more from being a supply shock to a demand shock to a market functioning issue, i think last week, there were days when equities were underperforming and treasury yields were rising. The fed i think came in very strongly. By the end of tomorrow, they would have already surpassed what they did in qe2. Qe2, which lasted nine months was about 600 billion. I think the fed is telling us clearly that they want market functioning to come back to normalcy, but at least in the treasury market, you have to stop there, and over time, that will create tension. They have been very flexible and very proactive. I think that is bringing normalcy somewhat to the treasury market. Treasury rates are somewhat in flux because theres going to be a record amount of increase in treasury supply. Of 2e the stimulus bill trillion, which not all of it adds to the deficit because about half of that is actually loans, most of which should get paid back. If you think of the treasury market, at one point, you have a significant amount of supply. On the other side, you have the economy that seems to be slipping into recession, and the fed is buying. My sense is that fed buying ultimately will dominate and will offset additional supplies. In terms of rates, this means or decline astay little bit in the near term, but you asked about the bond market. I think there is still stress because default risk is getting repriced. I think the big question, we have not had Something Like this happen to any of us before is how short or long will the recession be. The longer it drags on, the more that default risk gets repriced. While i think normalcy is coming back to treasuries, bonds need a little more time for people to feed on within that time. They will get their money back. I was going to ask about normalcy and treasury markets. We saw treasuries trading on a narrow range when compared to the huge move we have seen already this month, right . Could we say a lot of the Downside Risk has already been priced in . Yes, and i think today we saw claims, whiche in came in higher than expected. People looking for 2. 5 Million Dollars in jobless claims. Treasury rates did not fall, so i think we priced in the bad news. What now . We need to figure out how long this is going to last. I think the markets pricing in this weakness to last one quarter, you know, a couple of months. The longer it last, and i think we are looking at the rate of infections and the mortality rate, it is all of that which is going to drive when people can come back to work. You have the dynamic of how long it will last. That we dont know, but my sense is the market is pricing in a fairly short duration of this weakness and then how effective can the stimulus be . Home, you stuck at cannot really spend, so the plan might be less than what people are expecting, but the fact that the treasury data i think we are pricing in some weakness, some support from stimulus, it is just a month from now when we realize we are still stuck at home and the data not looking any better, i think that is when you can get that further downside. It sounds like you think this is just a reflex rally we have seen over the past few days. I think so. I think we wind pretty far very fast. I think the market repriced, this is nothing, just a supply chain shop to this might actually be a recession and then we have this immense onslaught of stimulus globally as well as within the u. S. , we have had the fiscal package. Helps the market find some sort of bottom, but now, unfortunately, we have to look at the infections, and maybe ive been staring at these curves a lot of on how the infections are going with the fact that im in new york city which seems to be this place where there is Significant Growth in infections. Those numbers dont give me a lot comfort right now. I think as testing picks up, these numbers will only grow, so even if some parts of the country can come back online, i dont think new york, california, some of these big regions will still be on lock down, and that is when the market might have a second moment of doubt saying we just had all this stimulus and we are still stuck at home, and for the stimulus not being able to work through, i think that is when you can get a second leg of nervousness risk off, but we need more data. As we start getting data, i think that is when you get this renewed nervousness or risk off. Todoes that mean we are not discount the potential strength of the dollar Going Forward . It is setting up for the worst week can about 11 years, but this comes on the back of the best week for the greenback on record. Right. I sort of go back to the 2008 crisis as well. A big difference between 2008 and now, but price actionwise or the fact stimulus wise i think happen faster. Then isk six months happening in two weeks, but if you look to do thousand eight as well, initially the Dollar Strengthened and as you began to see that all the stimulus coming through, the fact that growth was weak, over time, the dollar began to weaken, so we are somewhat bearish on the dollar. I think any views now, are supposed to have less risk on because we are getting such significant moves that tomorrow, the dollar could be up again, but over time, we do think the dollar is likely to be headed lower. Just because we are in this for the longer haul and we dont see this vshaped recovery, so it is harder to make that case for higher rates or higher returns in the u. S. Thank you very much for that, global head of global rate strategy. We have breaking news right now. We hearing from state media, the Korean Central News Agency saying north korea has quarantined 2200 80 people for potential virus infection. Of course, we have seen north korea shut their borders even more after the first outbreak in january in wuhan in china, but since then, we had not really seen any more confirmed cases out of north korea or any more reports. We are hearing from the casein a that north korea has quarantined 2280 people for potential infections. We have heard from other people other media reporting. We were starting to see north korea ask for International Help in increasing coronavirus testing and north korea. Now more than 2000 quarantined in north korea. We will have plenty more to come. This is bloomberg. You are watching daybreak asia. Here are the first word headlines. The Federal Reserve Balance Sheet has top 5 trillion for the first time as it attempts to cushion the markets from the coronavirus fallout. However, it says it will continue to provide essentially unlimited support for the u. S. Economy during the crisis. Chairman jay powell says he is focusing on bolstering recovery once the threat receipts but acknowledging the u. S. May already be in recession. We are not going to run out of ammunition. That does not happen. Atset Interest Rates in time what we think is giving the right support. If we raise Interest Rates even more, it would have been higher than we thought and economic rates even slower, so it would have been higher in the end. We are always setting Interest Rates at the level we think is appropriate. Japan is cutting its assessment of the economy amid the virus has factory lines are shut down and people are enabled work. The Cabinet Office cut its forecast saying the nation faces a severe situation and is depressed. Nations have abandoned their views the economy is moving toward the First Recovery since 2013 with the outlook further weakened by the postponement of the Tokyo Olympics. Singapore has delivered a second stimulus package worth about 33 billion u. S. Dollars going on National Reserves for the First Time Since the financial crisis a decade ago. The governments Relief Program to almost 11 gdp. The government says the situation calls for extraordinary measures. Kong exports have cap there was twomonth stretch in more than a decade as they coronavirus as the coronavirus continues to opened trade. This despite an unexpected rise last month, which was due largely to the timing of the Lunar New Year holiday. President trump and chinese president xi jinping are set to talk later today after xi called for stronger cooperation to fight the Virus Outbreak at a virtual meeting. What exactly did we hear from president xi jinping . Selina given the ongoing pandemic, this was held via videoconferencing, so this very powerful Conference Call among g20 leaders. Xi jinping called for unity among coordinating nations to fight off a global recession, asking countries to implement strong fiscal Monetary Policy, stable. Hange rates he did not mention ongoing trade tensions with the United States. Coordination among these inncies have been critical coordinating response to these crises. The backdrop for this meeting has been strained relations among the u. S. And china given years of trade tensions, technological disagreements and more recently, fingerpointing over the genesis of this crisis, but we did hear coordination among the g20 leaders pledging to inject over 5 trillion into the Global Economy and committing to do whatever it takes to overcome the pandemic which now has reached more than 500 thousand cases, more than 23,000 deaths, and these countries including china said they would increase manufacturing and investment to boost supplies of medical equipment as countries have been desperately trying to stockpile these materials. In the meantime, china has announced new measures to limit foreigners coming into the country. We know even as we get local transmissions, really coming have so many of these cases. Selina china will be temporarily suspending the entry of foreigners, even foreigners with valid visas and work permits will not be able to enter. There are only a small handful of exceptions to this rule, including for diplomats, and this move does follow the bands imposed by many countries, but until now, china has resisted this type of ban, even criticizing some countries for the action, giving given that the majority of cases had until now been within its borders, but domestic transitions has almost entirely been halted, and it is dealing with an increasing number of cases, they have changed their stance. Chinas. Just surpassed with the most infections in the world. Even as china is surpassing these restrictions with the lockdown lift, china is stepping up its measures around the world. All right, our china correspondent selena when with the latest out of beijing. The World Health Organization says europe accounts now for seven out of 10 virus debts. The report comes as eu leaders struggle to find a concrete to restrain the fallout. According to you, what problems have been fixed . What issues still remain . The problem certainly seems to be very much in abeyance now is the recurrence of the problem that we had seen back during the sovereign debt crisis at the beginning of the last decade where the spreads between the guilds of the peripheral countries had widened drastically compared to the call. Obviously, italy being the central concern because it was the biggest concern before the crisis and, tragically, it has suffered more than anyone else from the coronavirus so far. Needed tohe ecb that happenedale after president lagarde made a very unfortunate gaffe and said it was not her job to close spreads, which caused spreads to widen. Now that it has adopted bond buying without limits or without daily limits, it really has succeeded in narrowing those spreads. The brief risk that this Public Health crisis that the that this Public Health crisis would metastasize into the return of the sovereign debt crisis really does seem to be being dealt with very well. All i would argue is a problem is in the Banking Sector where you still see the euro zone banks selling at a pricetobook multiple as low as it has ever been at any point over the last 15 years, that plainly is there plainly is very great concern still about their ability to survive, to continue to operate successfully and the fact that those bond yields have come down as much as they have obviously makes it harder for them to continue operating at a profit, particularly when youve also got the issue of coronavirus. There will still be an enormous issue or perhaps harder issue for the ecb to deal with, which is nurturing the Banking Sector through ideally the longer term fixing the Banking Sector. You make ofdo europes fiscal measures so far . As you said, it is historic, potentially a game changer. As with all things, we need to see exactly how this happen. It certainly looks as though the pandemic could do what many other european crises have done and push the euro zone towards becoming a coherent fiscal as well as Monetary Policy unified zone. Areously the countries feeling much more entitled and emboldened to be aggressive for that. That is potentially an Enormous Development that makes for a much greater stability in the future but will create many more doubts before we get there. Thank you very much for that. Pledging were to come on daybreak asia. This is bloomberg plenty more to come on daybreak asia. This is bloomberg. S P Global Ratings has put toyota and nissan on review for downgrade a day after downgrading ford to junk. They set pressure from the coronaVirus Outbreak on global sales, describing what it calls grim conditions for the auto industry. Been cut bylready moodys along with honda. Shery the carrier will issue new stock and 10year convertible bonds and will arrange a bridge loan to support nearterm cash needs. Haidi abn amro is the first big european lender to suffer a Major Trading loss in the coronaVirus Outbreak with a single u. S. Client responsible million prepack kit. The bank will book a net shortfall in the First Quarter after client sales meet risk and margin requirements. When you move homes, you move more than just yourself. Thats why xfinity has made taking your internet and tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. News out have breaking of tokyo. We are seeing an alert on the bloomberg showing that cpi year in your headline inflation rose 0. 4 , similar to the previous month of february. Fit is also a faster inflation rate than the expected estimate. When it comes to the core inflation excluding fresh food, youre on your gaining 0. 4 in line with estimates, slight deceleration from the previous month. Excluding food and energy, core cpi rising at a similar rate to the previous month. We have seen some oil prices declining and Weak Energy Prices weighing on cpi, but at the same time, we saw some panic buying adding to daily necessity prices, so we continue to see these Inflation Numbers coming broadly in line with estimates. In the meantime, lets get you a Broader Market check with sophie in hong kong. Sophie we have aussie shares gaining ground, headed for the first weekly rise in five and stocks and bonds trending higher for a fourth consecutive session despite more grim signals for the economy, which has more strategists revising forecast lower for new zealand. The kiwi dollar Holding Lower but, below that 60 handle, easing that slump we saw. King dollar now gaining ground after the worst session since 2009, but we have the greenback snapping a twoweek advance. Dramatic moves so the s p 500 cap is first rally since february. We have futures edging lower assessing how long economic paralysis will remain. Earlier, the pm telling us she expectation of duration, but telling us of a month from now the situation has not improved, there could be the downside moves in yields of stimulus is not able to work through the u. S. Economy. Sophie kamaruddin in hong kong. G20 leaders vowing to do whatever it takes to stem the virus. What . Epresent about 80 of the Global Economy . Measures with about 5 trillion dollars. In a virtual emergency meeting, saudi arabia is hosting , not meeting in person, they are trying to show a united front. Of course, there has been bickering and blame game going on at least between china and the United States on the origin. F the virus there has been blame within the United States as well about the fed versus the states. It seems like Everyone Wants to blame everyone. The g20 leaders said in their joint statement that they will offer up a united front to combat this unprecedented outbreak. This is the statement or part of the snake as part of the statement they put out. The virus knows no borders as the top line. We are strongly presented strongly committed to presenting a unified front against this common threat. G20 leaders say, as you just mentioned, they are injecting more than 5 trillion u. S. Dollars. Some countries, multiple stimulus packages either already out there or being mold. He goes on to say we will continue to conduct bold and largescale fiscal support. The magnitude and scope of this response will get the Global Economy back on its feet and set a strong basis for the protection of jobs and the pico of growth recovery of growth. Theycp president saying are fighting two wars, against the virus and against, of course, this Global Economic weakening. The latest death toll, 23,900 56. This is the running total on the Johns Hopkins website. 529 thousand and counting global cases in the u. S. As we have been reporting. Overtaking chinas reported cases, the u. S. Reported to Johns Hopkins 83,504. Keep in mind the United States, china, and italy all have reported more than 80,000 infections. We are seeinger big stimulus packages coming from all over the world, including india. What are we seeing . We are seeing a number of stimulus packages, india, a number of steps, taking the biggest nationwide lockdown. One point 3 billion people in the india population. They have a relatively low outbreak, but many analysts are saying it could be the beginning of a much worse situation given the state of the Public Health urbanizationnd the and the densely populated urban core. 720 cases, 16 deaths, but that lockdown by narendra modi, also announcing an unprecedented 22. 6 billion dollars spending plan that right now august on the poorer people of india. Its going to include cash transfers and steps for Food Security such as paying for cooking gas, subsidies for the last for the next three months or so and the government also hinting there could be further stimulus steps in the pipeline. We all know japan scrapped the olympics and the tone has shifted quite significantly since the olympics were delayed, i should say, not scrapped. They are really topping up talking up the dire state of the Virus Outbreak. Tokyo having more cases than anywhere else. Saying aet office is severe situation in japan. Engle, our chief north asia correspondent, thank you for that. Responsethe violence by governments and Central Banks has been effective. The ceo spoke exclusively to bloomberg about the policy action and the role of banks in the global market. Actions that were taken are unprecedented and have an quite effective in counting down and funding markets, particularly on the dollar side. I do think that maybe there are some more technicalities that need to be addressed, but i think that Central Banks and governments have been acting very efficiently at this stage. Of course, i think there is little anybody can do about fear , and fear is probably one of the most dangerous sentiments you can have in this environment. Particularly, its not fear about markets, its fear about so thered their life, is very little a central bank or government can do in the short term to alleviate this major issue. Given rise fear has to a huge implosion and risk assets and haven assets. As you look at the markets recovering in the past couple of days, and i emphasize past couple of days because we have seen these reprieves before in previous crises are we moving from fear and irrationality to rationallightly more moves . What is your interpretation of this recovery . Its difficult to call rational moves 10 ups and downs on the s p every day. I would say the market is starting to stabilize after a major correction. Acrossalmost down 30 credit and all the Asset Classes have been moving so rapidly that its very normal for the market. O try to find a new level it is way too early to predict which direction we will go next. I ask you mario draghi wrote an oped this morning, which i know you have had a chance to glance at. Banks need to lend funds at zero cost. Since this is a way of becoming a Public Policy vehicle, neither regulation nor collateral rules should stand in the way of creating all the space that is needed in the bank Balance Sheet and that the guarantees should not be based on credit risk of a company. Can i ask you, as a ceo of a major bank doing Major Lending around the world, would you sign on to this prescription this morning . Will this gather momentum . In principle, yes, but the devil is in the details. I do think that banks this time are not part of the problem, are definitely now part of the solution. We want to be part of the solution. We are actively working with all governments and agencies that are involved in this Initiative Worldwide as a global bank, particularly in switzerland. We are supporting with the swiss government has implemented. That outts very clear of this program, we will make no profit. We do not want to make a single cent of profit and therefore, we are there to function as a mechanism for policymakers to transmit the liquidity that is necessary at this stage to act. What we have to Pay Attention to is making sure banks are coming andtrong into the cycle that we do not infect the Banking System with problematic problems that will need to be resolved in the future, but we take it very seriously overall and we are well prepared for that. Ceo. that was the ubs thousands of bankers are set for a reprieve as Morgan Stanley and citigroup joined their european counterparts in pledging to preserve jobs amid the pandemic. What do we know about these plans to keep the labor force and these major lenders intact . Right, we have seen across the board, first, european banks, major u. S. Banks, but wells fargo, all of them talking about laying off people and you really have to look at the backdrop of why this announcement is coming at this time. Look at the numbers we saw in the United States thursday morning. 3. 3 Million People firing filing for joblessness claims in the past week alone. The virus has undoubtedly been a Health Crisis around the world, but it is also taking a horrific economic toll. This economic stress and strain we are seeing out there is not really rooted in the banking world. It is not a banking crisis, so for a lot of these institutions to be able to say we will not carry out any reductions in workforce or pause any plans we have for this year is, i guess, at the end of the day a small positive sign. Much does it help banks and keeping these jobs, especially after that fiscal package includes rules that may give some relief to banks from those requirements imposed during the financial crisis . Well, look, you dont want to be a bank that has been extended all kinds of help from Central Banks and governments around the world. From that sense, it just would not have been a good look. A number of these people are also part of the business roundtable. This is the first real unified global moment we have seen and this is a chance to put their words to action. Thank you very much. Our bloomberg reporter with the latest on the u. S. Banks. Up next, china autosales drop during one week in february. We look at the outlook for this year. This is bloomberg. Haidi you are watching daybreak asia. President trump says he is confident the u. S. Labor market will rebound as soon as the economy reopens after the coronavirus upheaval. He says the surge in jobless claims is not a surprise and that it is not the fault of the u. S. He also says he is in close contact with his counterparty in. Hina the European Union has announced a new fund to combat coronavirus. Commission president ursula varner layin ursula von der p are the ecb scrapping bond buying firepower. Shery china suspending foreigners and response to decisions already taken by other countries. President xi jinping used the urgeonference call to greater cooperation to avoid a global recession. Claims almosts 3. 3 Million People filed for Unemployment Insurance and the week ending march 21, dwarfing previous levels going back to 1967. Shery shares and chinas ba icy grow. We have seen a week on week gradual increase in china autosales since early february. Are we expected to see that recovery continuing accelerate . Yes, i think what we are expecting in february as well, the whole country tackling the coronavirus, we see businesses getting back to normal, but we in the supply chain earlier, we got approval from the authorities, but we are seeing that their production rate is well below capacity at the moment. Are seeing the below capacity, mainly because part supply is still very unstable at. He moment i think the replenishment from the dealers is also very cautious. I think what we are expecting is and also in the situation is getting more stable , if the trend is still stable Going Forward. Expect that for the First Quarter it would be about 45 the full year,r we are assuming the coronavirus be detained by june, we expect for the full year 5 to 10 just ouruming current expectation, but i think we should recognize the situation is constantly evolving , especially now the situation an incapacityis to the overall economy. Expecting to see in terms of support policies . There will be some stronger to i think what we have been mentioning the last few years, but in these two months, we had a relaxing quarter of the asset price. , lessons cap for this year. Beijing, the capital city also plan. To government officials in beijing seriously considering opening up that controls, and i think has a meaningful occasion because beijing at the capital city and the most congested city in china and also has the highest number of vehicle , i thinks in china cities had noed reason to not follow. I think the impact will be quite and will comeicy up soon in the next few months. What about incentives and . Ubsidies when it comes to evs ev is one of the sectors the Company Always wants to be performing because they have longterm plans to be a leader in the industry. In this year, the subsidies will remain largely stable or even. Nchanged we got a loss of tension and. Ven more support target has the probability to achieve very low rates. Haidi thank you very much. He will have plenty more to come on daybreak asia. This is bloomberg. Asia. This is daybreak im shery ahn in new york. Markets open in tokyo and south korea over the next hour. What are we watching . Sophie we are keeping an eye on chipmakers. Korean air also in view on a news report the government may have a meeting this friday to larges measures for Companies Facing liquidity risks. Eye onso keeping an announcement for a Delivery Service provider up to ¥30 billion. Nissan and toyota under review at s p with the Global Industry is very grim conditions. Over at moodys, ratings have been lowered by one notch and two notch downgrade for nissan. Of soccer futures in this morning, we are seeing a move to the upside and the yen extending gains, staying below 110 while jgb futures pointing to gains asset benchmarking yields briefly dipped below zero and today, traders will be weching bond buying that have seen of late in the repo market. Haidi all right, lets get you a check of asian markets as it stands. We have that rally for u. S. Stocks as investors increasingly question if we get an extended boost from this monumental stimulus package in the u. S. Soon to take effect. We are seeing gains of over 2 when it comes to trading insignia new zealand, despite weaker Consumer Confidence readings coming in this morning. Nikkei futures very much firmly in positive territory, up almost 4 to the upside. Shery coming up, we will preview the earnings out of banks. Big the market open is next. This is bloomberg. Haidi in morning. Asian markets have opened for trade. Good morning. Asian markets have opened for trade. We saw on walls street despite the u. S. Surpassing china and reported virus cases. More than 80,000 people have tested positive. Infections. They must be20 closer to fighting the virus. Haidi another blow to the hong kong economy. Lets get straight to the market action. Asian stocks are set for the best in since 2011. They might catch a bid on bond buying to ease tightness in the market. Optimism despite revising its forecast for the economy. Lets check in on the mood in seoul. Thisost be gaining ground morning. The korean won also trading against the dollar while we have focused on what is going on with policymakers. We will be getting an emergency , providing emergency funds for countries facing liquidity issues. Decline in keeley stocks. , weng on what is going on are seeing them edged slightly higher. The dollar with the worst drop since 2009. U. S. Treasury slightly lower this morning at about 83 basis points. Lets get more with our analyst, mark. The question must be, how long will it last . It is a question everybody would like to know. We have seen extremely volatile trading this month. Know if itants to will continue into april. We have digested a lot of information. And a lot of people have been able to look past the number and they have. Een reassured by Jerome Powell there are some distortions. People need put money back onto their Balance Sheets, onto their portfolios to show what they are doing. A little bit of a dollar funding situation. They will have a clean Balance Sheet to work with in april. We might see a lot of erratic trading in that new period. It would not be surprising if we see them revisit the lows. We are getting some of these Credit Ratings coming through. There could be some big ones. They could be more countries that might get downgrades. Ahead andews coming we can expect some crazy trading conditions in april. Shery we saw big spending coming from singapore. The price reaction to that spending . We have seen impressive gains. If a country comes in with a big stimulus, very early, it can give you an advantage over other countries. It would not be too surprising if it starts to outperform other currencies. Day that, on the same they announced a severe contraction in growth, even predicting that it would be a negative year for growth, very unusual for the full year for singapore to do that, yet they came back with a large stimulus at the same time. Singapore is acting very quickly to get the economy back on its feet. With so many countries locked down, that will not be helpful. Once the lockdown is lifted, they will be placed to take advantage of it earlier than other countries. You can probably see it now. Emergingmarket currencies as well. It is giving the pboc a little bit of breathing space. Is there an indication that this is a signaling of their intent for the currency . Like a pretty clear message. They were asking the market to calm down a little bit. Not too far from the highest that we saw last year. Fell pastshore yuan 720, that could cause a lot of action in the market. They would like to avoid that. Wasaw a fixing that deliberately designed. It already had a big result even in the past 24 hours. The pbmc will be watching very closely and you expect it will continue to steer the market towards a trading range. To 695. 15 they will be happy to steer the market in that direction. Mark krahn field there. You can follow more on this story on markets live. News asetting breaking we hear from Prime Minister shinzo abe speaking and japan. Saying that he is wanting to take bold steps for the japanese economy. We are hearing from kyoto news report that they will be deciding on the Tokyo Olympics 2020 schedule in three weeks time. We have heard confirmation at the 2020 olympics will be delayed by a year. It is still being called the 2020 olympics. Dates in give us some three weeks time. Obviously wanting to take bold steps to ensure a quick recovery. Global oil demand is in freefall. We are getting the latest on crude prices and the ongoing impact of the pandemic. Shery we will preview the earnings with the head of Greater China bank. This is bloomberg. Shery you are watching daybreak asia. Has announcednion 40 billion to fight the coronavirus. Massive action to stop the outbreak and avoid a economic crisis. Virus to boost its firepower. Singapore has delivered a second package to fight the coronavirus. Drawing on National Reserves since the National Crisis a decade ago. Gdp and provided the visit further. Japan is flashing its acceptance people are unable to work. The nation faces a severe situation. Officials have abandoned their views that the economy is ,orking towards its recovery further weekend by the postponement of the Tokyo Olympics. One day after triumphantly declaring itself virus free. Almost 2300 people are being isolated. That it isdmission having an impact. Had suspect north korea has a number of positive cases. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Haidi most new coronavirus cases are coming in from overseas. Selina wang has the story from beijing. They are pretty stringent quarantine measures but it does not seem to be enough. They are stepping up their measures. It will be suspending the entrance of foreigners, even those with valid reasons and work permits will not be able to enter the country. Ofre is a small handful exemptions. Resisted the ban, criticizing other countries for putting them in this place. Now they are changing their stance as they have halted local transmission and they are dealing with an increasing number of people being infected. Local cases top half a million and the lesser prices china with the most reported infections in the world. Already been escalating these measures on International Travelers with tests issued at the airports and beijing. Anybody trying to get into the city has had to be redirected. Ok, they haveest to go through a quarantine at a dedicated location. A more measured approach. Are we expecting to see any more steps from policymakers as we continue to see this Downside Pressure on the economy . Are expecting to lower that rate. Cutting its benchmark deposit rate. That would be the first time it has made such a move since 2015, so this could support growth by reducing funding cost and encouraging consumption by lowering the savings rate. Policymakers talk up this fast recovery, they continue to cut their forecast, predicting a 20 drop and willcting that gdp growth come in at 1. 4 . This is as the Manufacturing Sector is facing a second shockwave. To industrial, who makes tools like hammers and axes. They expect a major drop in sales and they have seen a dramatic turnaround. Now, the Chinese Company is to shery selina wang, thank you for that. Watching for any signals on how the Virus Outbreak might have when theyhanks reported earnings today. Banks when they reported earnings today. Grace, wait to have you with us. We are talking about the lower rate the are seeing. Pressuring that is banks and revenue . In terms of pressure, we believe part of the pressure will be alleviated by further and possibly, measures in order to lower the funding cost. We understand that banks have been asked to support retail and encourage mortgages. At the moment, the policy from mainland authorities remains quite selective and targeted. We can expect a bank led stimulus. Think theat is we lack of bank capital holds a major constraint against monetary reasoning. Shery given the state of the economy right now, what can we see in terms of rising delinquency . Assete banks withstand quality shock . We have done a scenario based on the gdp forecast which points to 2. 2 downside for china gdp 5. 9 beforempared to the coronaVirus Outbreak. We estimate it could potentially from 1. 5 . 3. 5 this assumes some of the higher manufacturing and wholesale sectors. Estimatescenarios, we there would be some banks that would be below the 7. 5 ratio. See in the banks would excess offer less than 100 basis points, except for china merchants banks. It does mean that the impact on the bank will vary. We see capitalization and leverage as the high influence. Because thethat, default rating for the chinese isk our support driven, this why we have maintained our stable meetings despite we have negative sector outlooks. Action onive rating some of the banks outside of china. Haidi what are your expectations for the shadow Banking Sector . There was going to be more curve on products. I would imagine that would be a lot of businesses that would be thinking given the nearing distress levels. We expect that would be some baking with shadow shadow banking activities. Believeder term, we that will be maintained. It is more sensitive to our assessment. It is not so much nearterm Economic Impact but the mediumterm issues around leverage and credit stimulus because what we have always been seeing with regards to the it mostly comes from credit growth. Can withstand shortterm economic downside, but given the leverage in the system and the lack of bank capital, banks have just been making enough profit to keep pace with growth. They really isnt Additional Bank capital available. Banks,head of china thank you for that. We have the latest numbers on coronavirus cases and deaths. China is seeing 55 additional coronavirus cases and 54 of them have been imported from abroad. They will temporarily suspend the entry of foreigners into the country starting saturday. The total number of cases is now at 81,340. The u. S. Has overtaken china when it comes to coronavirus cases. Five toal rising by 3292. This is lower than the previous day. Imported fromses abroad. Coming up, we will have an exclusive interview with the finance minister. You are watching from sydney. 12 30. This is bloomberg. Shery brent crude has started trading this hour. Prices are rising. The games following steep losses with a warning on Global Demand. Global demand is in freefall. Su keenan joins us now. Pumping as they are more oil. First it was about the supply surge and now it is about demand destruction. They mainly traded in new york and are down almost 8 in the regular session. We are seeing a little bit of rebound and the way oil plays out, in the friday session, it could be the determining factor because we had a run for weekly declines that could be broken if we saw a rebound continue in the regular session. The projection was dire. They say Global Demand is in freefall and you really see that projection. It really has fallen off a cliff and started to rebound. Closing close. It was a saying consumption quick fall of 20 Million Barrels a day and it worsened in the second quarter. Is, how much can it help . If you look at the technical charge of what had been 30 to what 30 oil is now resistant. There would be many who would be happy if oil could get back up to 30. It might help the stock market in other aspects, but a lot of people are homebound, really locked in their homes and you cannot stimulate demand when people are not out driving their cars. Industry is not going to be ramping up anytime soon with job losses. There are questions about where to store all of the oil. To bere starting optimistic in the general market. Trumpsow on president priorities. Haidi su keenan with us. Thats get a quick check on business headlines. Of refining and chemical segment. The income at the gas producer or thanto 6. 4 billion, a billion less than the year before. A 69 drop in refining and chemicals. Hong kongs richest man has been buying shares of its own conglomerate. Property, spanned retail and telecommunications. Indias bank has a plan to raise ,2 billion and revive growth even as the coronavirus brings Economic Activity to a halt. Billion fromof 1. 3 eight local vendors led by state banks. Good morning oh no, here comes the neighbor probably to brag about how amazing his Xfinity Customer Service is. Im mike, im so busy. Good thing xfinity has twohour appointment windows. They have night and weekend appointments too. Hes here. Bill . Karolyn . Nope no, just a couple of rocks. Download the my account app to manage your appointments making todays Xfinity Customer Service simple, easy, awesome. Ill pass. U. S. Hasis is overtaken china for the most reported cases of the coronavirus. Cases jumping over 80,000, and china, cases have slowed considerably. Shery china closing its borders , halting ambition, even for those without the disease. Ministry of Foreign Affairs says it is in response to actions taken by other countries. They are pushing for more coordination to avoid a global recession. Haidi inflation in tokyo has hit its slowest pace as the coronavirus spreads and oil prices fall. Earlier,om a year matching the median estimate. We have seen an early indication of nationwide inflation tracking. With hong kong exports the worst stretch in more than a decade as the coronavirus up in trade. Value, thene in weakest performance in 2009 despite an unexpected spike last month due to the timing of the Lunar New Year holiday. Lets get another market check with sophie. Sophie we are seeing asian stocks headed for the best week since 2011. Snap. St be said to a goodme through with outlook. Jumping 19 as we wait to learn if they will provide emergency funding for Companies Facing equity issues. Speaking of under pressure after mexico was downgraded given the shock of virus and collapse in oil prices. Looking steady after a choppy thursday session. Cooling rally may be after the moves that we saw on thursday. We will be showing you what has been going on with european bonds. Spike in to reverse a southern european yields. Be included in this program after being shut out. We are staying on Central Banks. Extending the push to convince investors and the entire u. S. That he has what it takes. Policy editor Kathleen Hays is here. To the door opened wider helicopter aid . Kathleen we are harkening back to history. Talking about dropping checks over the american people, what he thought you would need to do to stop the depression. Whats referring to friedman referred to once upon it. Fed hassked, does the more that it could do . If we raised Interest Rates more, we would be higher and Economic Growth would be slowing. We are always setting Interest Rates at the level that we think is appropriate. Kathleen basically he said the fed never runs out of ammo. Look at the stimulus package. Up4 billion can be leveraged for 4 trillion of liquidity. That is the helicopter credit side of this argument. Certainly a lot of new bonds being issued. What about inflation . Radio. E on bloomberg she thinks it is too early. World, around the inflation and expectations are what investors will be watching closely. It could create an inflation spike, which would not be a good thing. You look at bonds as a safe haven. This is bonday strategizing. How unusual is it for a fed chair to use the r word . It is very unusual. They have gone out of their way not to frighten people. When you see the kind of numbers that we have seen, it is pretty clear that is going to take control. It is so important to grasp this point. We might be in a recession, but i would point to the difference between this and a normal recession. There is nothing fundamentally wrong with our economy. Well right performed through february. We start in a very strong position. This is not something wrong with the economy. Kathleen jay powell is he expects that there could a rebound by the second half of the year. We are already in march and a quarter of the way. Talking about these big numbers. How could you possibly forecast what jobless claims are going to do when there is no benchmark . There are no indicators that tell you that. They are doing what they can. Fed chair is confident that they continue to do whatever it takes to make sure it does not turn into anything worse. We will talk to some policymakers later. We will have an exclusive interview with Robert Kaplan and we will be joined by the atlanta fed president , about 30 minutes after that. Next, coming up from the hong kong exhibition. Prospects for the sector. This is bloomberg. Shery g20 leaders are violent to do whatever it takes to overcome the coronavirus and its fallout. What further steps are the leaders taking . Does it include anything concrete . Thank god they did not use the term the kitchen sink. They are presenting a unified front. They are playing the blame game a little bit about procuring supplies and about where the virus originated. Meeting, emergency chaired by saudi arabia this year. A joint statement. Let me give you the top line. The virus knows no borders. That is what they are saying. We are presenting a unified front. Need andess the importance of sharing data and information as the u. S. Has overtaken china in the number of cases. U. S. , china and italy have more than 80,000 reporting cases of the coronavirus. Half a million plus to havee are confirmed the coronavirus. The g20 leaders saying, we will continue to conduct largescale fiscal support. More than 5 trillion u. S. Dollars and counting. We are hearing from shinzo abe speaking in tokyo, seemingly unhappy with the way conversations have gone with the 2020ing of olympics. What do we know about what we are expecting in terms of when it could be rescheduled for . You have to be between the lines. They are not oftentimes direct their language. Ist they were trying to say the decision forced upon them is a common narrative, where the japanese politicians like shinzo abe made the decision to cancel the olympics, that would be political suicide, but if the world came out and said, you theot hold the big games, bureaucrats can say, we did not make a decision, it was thrust upon us. It is what the common discourse is in japan. We are getting these headlines that the japanese finance minister is saying there is no need to declare a state of emergency right now. That is something an Emergency Panel has been set up to discuss the possibility of an emergency declaration, that would give them the ability to have a national lockdown, much like the governor of tokyo has done this weekend, asking the people of tokyo to stay indoors. Concerns as the crisis has taken over. Would have severe effects on the economy and it is extremely important to avoid a virus surge. Tokyo has become the new epicenter with more cases in japan. Cases and many of them in tokyo over the last four days. Shinzo abe goes on to say we want to take the steps to build a vshaped recovery. The olympics were supposed to go a long way in kickstarting japan out of its doldrums and we are seeing situation where the Cabinet Office has dropped its view of the economy as recovering or moving towards a recovery for the First Time Since 2013. Already in a technical recession, not going to get the springboard affect. Haidi Stephen Engle there with the latest. , the eventst guest sector has been double hit by social unrest and the coronavirus. He is optimistic that there will be an upswing when normality returns. Joining us is the chairman. Great to have you. Undoubtedly some of the hardest times for the industry. News forlot of good the industry in hong kong. Conventionseen no since early january. It is a long time with zero cash revenue coming in. It has hit the industry very hard. The share price has been hit the. Down 47 . Period. In that it will take quite a long time for those companies to come back. The question i am asked a dozen times a day is when will the industry return . I cannot predict the future. I was speaking with the Government Agency and hong kong. To july. Heduled haidi in terms of how quickly it happened, you see things. Hanging that was stuart bailey. We will try to get back in touch with him. Impact have more on the of the pandemic on industries later with the shipping chairman. Watching in sydney. This is bloomberg. Haidi lets get back to our guest. Kong evenm with hong before the unexpected shock of the coronavirus, the city had issuesaling with its with ongoing street protests and unrest. Fundamentallycern . If you are being particularly pessimistic, you could take that view. Wherehibition industries a little bit, the average attendance has dropped around 20 , so there was some impact from that. I preferred to be positive. The elections take place and september and we will have new people in government. The people of hong kong want to get back to business. In 2003 was a strong surge of people who had gone through a tough time. There, spend out money, meet and connect with people. He was saying that there is a lot of evidence to suggest that people will want to spend a lot more time with one another after isolation. Companies will want to collaborate that a lot more than they did in the past. This plays into where they really excel. Shery what industries usually exhibit there . Hong kong is high and exhibitions. In wine, leaders spirits, electronics. We do not have a heavy manufacturing base, so we do not have big machinery shows, but we do have very high end. In withoutg goods having to pay any duty on them. Even not be able to show in china. Protest wen the talked about, not to mention these opening measures we are seeing in Mainland China, what role can hong kong play in the long run . The key fundamentals that make hong kong such a wonderful market have changed. Yes, we have been hit by a flock , but i stills think that fundamentally, we had a fantastic transport. Mentioned it is an exciting dynamic. I do see a time where we can get out of this turmoil. They will bounce back strongly as long as we are taking care of the fundamental and we do not see more of this unpredictable these unpredictable events taking place in hong kong. Shery thank you very much. Lets get a quick check of the latest is the splash headlines. Flash headlines. Shery offsetting a slump in tral demand during the Coronavirus Crisis. The rest will come via a rights issue. It will back the plan. After cutting, a downgrade. Pressure from the coronaVirus Outbreak on global sales, describing what it calls conditions for the auto industry. Haidi morning that it expects higher credit losses due to the coronaVirus Outbreak. Putting its job Cutting Program on hold saying it must account for the wider impact of the pandemic. Haidi lets get to Sophie Kamaruddin for a check on the markets. It with that threeday rally on wall street overnight. Forie we are seeing gains the kospi to lead the region higher with chipmakers the biggest boost, strongerthanexpected revenue outlook. 19 after it secured a credit line. We are waiting to see if there meeting an emergency that face liquidity issues. We are seeing financial players gaining ground. Deterioratingthe credit in south korea. We are seeing gains for korea across the region. Optimism as we end the week, which will be the best for asian stocks since 2011. Shery we continue to see this upside in markets. Of they embracing that idea liquidity from banks . What are we seeing in the markets right now . There seems to be a lot of optimism about Monetary Policy and what fiscal stimulus can do. We partly answered a question. Numbers . A surge in increasingly solving the ills of the market. Determine whether it can continue and risk asset, whether there has been structural damage that has been done to the economy. Be at abouty to 1. 5 . Question, who knows really, these are unprecedented Market Conditions and second dances, but then again, you get the you get to the point where they are attractive enough to some people. It will be interesting play to see what this looks like in the next four weeks. Track. Dollar has been on how much of a big factor is this and is it to click to say we are seeing Dollar Strength . Based on the notes that i have gone through so far, it is very hard. The dollar will remain supported, especially against cyclical currency. When times are under stress, the currency weekends as well weakens as well. The correlation is at an eight month high. It should prevent a little bit of a floor for em stocks. We will have an exclusive interview with the finance minister. They will be joining us at 930 been a. M. Hong kong time. We are getting into the next hour of Bloomberg Markets with more markets coverage at the start of trading in hong kong, shanghai and shenzhen. It is 9 00 a. M. In singapore, beijing. We are counting down to the open of Mainland China and hong kong. Morning,p stories this the coronavirus rolls on, the u. S. Surpassing china and reported cases in reported cases. Haslinda