Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240713

Data, the u. S. Saying that beijing underplayed the number of cases and deaths. And we work may take legal action that softbank wants better terms on theirh rescue plan. Haidi . Inflationary pressures or lack thereof from south korea coming through the cps for the month of march. We are seeing a contraction of 0. 2 , better than the contraction we were expecting of 0. 4 . That is a month on month figure for Consumer Price pressures and south korea for the month of march. In atmber on year coming 1 , so a little better than 0. 8 expected, a little softer from the 1 reading in february. Expectingse have been some demand as well as the impact of lower energy costs, lower oil costs, the plunge in oil prices, down an average of almost 50 year on year so far this month. Debtor february february data carried through, and you would expect that to carry through to april as well. That is the south korean numbers. We have been looking at a lower open going into the trading in seoul and tokyo. Lets look at the situation and australia. Just giving back the gains we had an yesterdays session, the thursday session starting off with a downside of just about. 2 in the first few minutes of the staggered open. Seeingland, we are also a bit of downside. We have had 3, 4 sessions of pretty solid gains, the kiwi stocks in that country under a national emergency, extended another six days. Japanese futures looking pretty soft going into the trading session today. And u. S. Futures come on the back of taylor, what we saw a pretty horrid session of selling across all major indexes. Idi, you are right, it was a rough day wednesday for the stock market, but the White House Press conference on the virus continues. We have been wrapping it up in the last few moments, President Trump warming it will be a horrific couple weeks ahead and admitting the severity of this crisis has changed his view that its not just like the common flu. s bring in air brake daybreak cohost. What are you we hearing from press conference in the number of u. S. Cases and number of deaths . Picture, theim press conference coming at a time when we have 200,000 cases across the United States, more than 4400 people dead. To provide as many as 100,000 militarystyle body bags from the pentagon. President trump saying there is a threat that malign actors will try to exploit a situation in the u. S. Also we have heard from dr. Fauci and the task for saying that the u. S. Is right on target vaccine, but it will come in about a year or 18 months, so we have to be patient. Pennsylvania, a couple more states have issued stayathome orders and we have , younger adults being hospitalized at surprisingly higher rate. In terms of the economic forecast, we are looking at the white house assumptions of the pandemic threat carrying through to the summer. This is really calling into the question the extension of the lockdowns and closures. What did the president say about a potential phase for simply list bill phase four stimulus bill . Trumpery she ry the airline industry, saying that closing every flight on the industry is a decision and he is looking for the mystic travel restrictions and hotspots, all of which puts more pressure on the u. S. Economy. He said he is considering stopping flights between hotspots and the recommendations made come on travel. President trump also saying Health Workers should be compensated for their work. He likes the idea of hazard pay for some workers in the medical industry, not to mention he is looking at doing something for those people who are uninsured. We have heard dire predictions about the u. S. Economy, Goldman Sachs expecting on employment to soar to 15 . Theor not to mention scathing report this morning. The u. S. Intelligence now saying that china concealed the extent of the outbreak, but further details, what do we have . very interesting this report is coming out at this time, as we have seen President Trump time and again talk about this virus originating in china. Sources telling us that the u. S. Intelligence community has concluded and a classified report to the white house that china concealed the extent of this outbreak in their country, that the underreporting was intentionally incomplete. The report concludes that chinas numbers are fake. China reported only about 82,000 cases, 3300 deaths. Compare that to the staggering u. S. Numbers and we have seen some skepticism over chinese data as many times it has changed with the methodology. And we have seen viral videos inside of hospital showing the extent of the outbreak there. Our bloomberg coanchor shery ahn, thank you. Taylor the u. S. Is seeking as many as 100,000 military style body bags as authorities warned the coronavirus deaths across the country may soar in the coming weeks. The pentagon may draw the bags from its stockpile, with the Trump Administration saying as many as to how to thousand people may die. President trump says the next 30 days are critical in the u. S. As coronavirus cases continue to rise around the world. The coronavirus cases have more than doubled in the past week. In the next few days, we will reach one million confirmed cases and 50,000 deaths. Italy is extending its sweeping virus lockdown for another two weeks, even as reported deaths from the infection slow. Restaurants, bars and public venues are closed, all nonessential Economic Activity stopped, and internal movement severely restricted. Health authorities report 727 new fidelitys in the last day, the lowest number of deaths new for tallies in the last day, the lowest number of deaths in the last six days. India is stepping up measures to tackle the infection. The r. B. I. Is introducing relief and allowing states to borrow more to shore up finances. The pandemic has stalled a business and triggered a nationwide lockdown in the imf has already declared a recession. Experts say that india may be the next coronavirus hotspot as cases and deaths rise. Global news 24 hours a day on air and on quick take by bloomberg, powered by more than 2700 journalists and a list in more than 120 countries. This is bloomberg. Taylor . Ahead, american Small Businesses clamoring for aid from the latest to be less package, but is it coming fast enough . We will speak to the head of the Small Business Entrepreneurship Council later this hour. First come figuring out when to researche market with affiliates llcs chris brightman. Thats next. This is bloomberg. We are watching westpac, which has started trading in the first few minutes after the bank named peter king as its chief executive officer, staying on in the role he had been serving an interim position. This is what we are seeing in the trading in the stock, down over 5 after three days of gains. Having said that, it is still underperforming the broader australian markets, off about 3. 7 , westpac the countrys second largest lenders saying the acting ceo peter king will be taking on that role permanently for the next two years come as the oldest bank in australia is looking to steer its way from the pandemic crisis and of course looming large is the shadow from the royal inquisition into financial misconduct. We are continuing to watch that as one on the move in the sydney session. In terms of u. S. Stocks, the session fell for a third time in four days as investors see a lack of consensus on whether this bear market has truly bottomed out. Stanleyn and morgan agree that stocks have seen low points, but oak street, power mark, and other say the worst is yet to come. Joining us now to discuss all of this is Research Affiliates cio chris brightman. I suppose part of the difficulty for investors is the first thing and i want to throughout this bloomberg chart, we have been looking at this a lot the past few weeks, how enticing it must be to buy into these rallies. We do know, and this goes back to 2008, bear markets produced some really enticing rallies. How much cash would you be holding on the sidelines and how much harder is this crisis to navigate versus a true credit crisis . Chris well, from an investment strategist advice, i would not try to trade such a market. If you have cash in your savings bills, itr upcoming does not along anywhere near risky markets at this point. On the other hand, if you are nearing retirement as an investor and you are starting to feel like you have more risk in your portfolio than you are comfortable, i would say come up with a lower risk portfolio an average into that over the coming months and quarters. And if you are young investor, you should just think of this as a wonderful gift an opportunity to be regularly contributing to your retirement account at Bargain Basement prices. However, in my position, im a professional asset manager who is responsible for tactically allocated and timing markets. Risk are nowhere near full on. We intend to get about half risk weeks becauseming we can now start to see the contours of what looks to be peak fear. Peak fear is when you want to buy. When is peak fear . It is a pandemic probably somewhere between the peak of new cases of the virus and the peak of new deaths. Close tobe pretty darn the peak in case right about now, although the peak deaths is likely to be mid april or maybe not even until the end of april. April seems like a really good time to take the first big step intorerisking portfolios or increasing your positions. So i would hold back from going all the way because things could get a lot worse. Right, so mid april is basically when you are saying the market will truly panic and start pricing in the end of the world . Well, yes, i think James Mcintosh in wall street journal had it right today when he said we all answer to the immunologist today. Partners, the founder and another one of our partners, is a professor at duke university, kim harvey. Are both running they are both running their own models of the spread of the global pandemic, and we really had to do that because until early this week, there were no published models out there. We were all fitting our own models. The we have kind of models we have been looking at, both our own as well as for instance the models that were discussed in the White House Briefing yesterday or pointing pointing to are mid april as the peak. That seems like a good time to be averaging into positions. Would you like me to share where we see some of the great opportunities . Taylor yes, please. Well, let me highlight three areas. One in Interest Rates, one in fx, and one in equity markets. In Interest Rates, here in the u. S. , breakeven inflation rate, the difference between 10year, nominal year, the 10year or the tip shields is down about 1 . Believe thatreally inflation is going to be only 1 for 10 years . For 10 years . That certainly cannot make any sense, especially with many trillions of dollars of additional deficits here in the u. S. , funded by the fed. I think i take the overall that for sure. Over on that for sure. Related to Interest Rates is the fx. The dollar started this year being very expensive relative to most of the rest of the currencies in the world, and it has gotten a lot more expensive during this coronavirus period. All the while we have extreme money printing. Dollarse shortage of and the fed is trying to remedy that as quickly as they can with all sorts of facilities, including swap lines to both developed and emerging markets. Taking a multiyear horizon, we are looking at a dollarltime peak in the and a sort of declined the dollar, or from a u. S. Dollar perspective investor, the appreciation of foreign currencies that we saw on the order of 30 , 40 that we saw from 2000 to 2007. I think that is likely to be repeated. Lastly there is a huge opportunity and value stocks. Periodabout a dozenyear of underperformance, to the tune about 4 per annum, and now i think they have got even cheaper. To give you an idea what im , weve got a situation where value stocks around the world are trading in low singledigit pe multiples, only 20 the valuation of markets. Again, probably the easiest and most direct way to participate in this coming acquiring a nice diversified portfolio of value stocks. Taylor like you said, valuations have certainly come off the highs we have seen. Our thanks to Research Affiliates cio chris brightman. Up next, Eric Rosengren tells us what the central bank is doing to ease market strain and gives us an update on the new lending s here in thee u. S. This is bloomberg. The u. S. Federal reserve of itemsshed a torrent to try to block the coronavirus effect. Eric with the rate cuts we did at the emergency meetings in march, were reduce the federal funds basis points by 150 basis points. Normally we would expect that to flow through seamlessly and you would see borrower wears, both individuals and firms, seeing lower costs as they try to borrow funds. Unfortunately, the plumbing in the Financial System was overwhelmed by the number of people trying to sell whatever assets they had and get into cash. So some of the Interest Rate reductions we did, which are primarily at the short end of the market, has not perfectly gone through to the rest of the market. These facilities we are setting up our intended to in effect get the plumbing better. So the new york fed has been buying mortgages and treasury securities. I would say the treasury Securities Market is operating reasonably well. The Mortgage Market is operating much better than it operated a week or two ago. Still its not by any means all the way back. Some of the commercial paper markets, some of the shorterterm markets are seeing margins come in, which is a good sign. Means the lower Interest Rates are starting to be passed on to firms and households. But i think it will take some time. So the primary goal of what the Federal Reserve is doing is trying to reduce the amount of spillovers that occur. There is not much we can do about the Health Crisis that was created by covid19, but there are things we can do to limit the amount of spillover to financial markets, and i think the fact we quickly got our facilities up and there are stormer facilities coming there still are more facilities coming has helped in reducing the amount of financial spillover, but has not completely eliminated it. Last week you provided more than 30 billion in the Lending Facility. How is that working . Eric i thick it working pretty well. The money market liquidity facility clearly we are focused on money markets. There are different kinds of money market funds. The ones that are governmentbacked really have had inflows, not outflows and have experienced no problems at all. A second set of money market funds are the prime money market funds, which borrow highgrade corporate paper, and to the extent that corporate paper was not trading because people were trying to get into cash, it was very difficult for money market funds that were prime money market funds to get the required liquidity as people were trying to get into cash. There are municipal money market funds focused on the taxexempt sector. Retail, soostly to mostly individuals involved in that. Not tradedebt was very actively either. So i think our facility has helped in bringing those margins down. We have had for the most part seen the outflow from prime funds and municipal funds flattening out, and in some incidences actually starting to increase again. So our primary purpose was to make sure that money market funds did not get to the point where they had serious liquidity problems, and i think that goal has largely been achieved today. You have any details on how the Corporate Lending facility in mainstreet Lending Facility will operate or when they will begin to operate . Commercial paper facility should be up and running relatively soon. The corporate facilities that are more focused on investmentgrade corporate debt are somewhat longerterm and will take a little bit longer. And the main street is still in the design phase. So it is a complicated facility to appropriately scope, so i thicket will still be another couple weeks. Mike do you worry they will not be up and running in time to save a lot of businesses . Eric we are doing these facilities as fast as we can add like every organization we are dealing with a lot of working remotely from home, and in addition we need to make sure that banks and other organizations understand what the nature of the facility is, get the paperwork in that is necessary to run them. Unfortunately these facilities do take some time. We are doing it as fast as possible. Hopefully we will have the facilities up and running to help a large number of firms over time. That was boston fed president Eric Rosengren speaking to us earlier. We have more big guests coming up on bloomberg tv, including , as well assuntory air asia joining us. Because you cant get to the theater, were bringing the theater home to you with xfinity movie premiere. Such news. I know what this is. This is a real thing. Our Brand New Service that lets you watch movies at home, while theyre still in the theater. Oh, mister elton. Ahh he has figured out a way to be invisible. They picked the wrong woman. Just say xfinity movie premiere into your voice remote to bring the theater to you. Softbank plans to let the imminent deadline for a 3 billiondollar deal with we work shareholders expire without completing the agreement to buy more equity. Guest says thisw is a wjor blow to restructuringeworks. How big of a hit is this for we work . I thicket is more of a hit individually to some of the benchmarks. Did are really the ones who the initial gut punch. Remember, there was some debt funding associated with this as well. I think overall it is a bit of a black eye. But i think for softbank it continues to be a very difficult situation. Asset looks ak lot different today than a month or two ago. Taylor dan, i was trying to understand how wework goes forward from here. A few months ago, even just a few weeks ago we all thought it was fine to be super close to each other and have all these working, open environments, shaking hands, coughing within six feet of each other. Now we look back at wework and we really wonder how that Business Model translates, if it changes behavior on a permanent basis. What does that mean for weworks outlook . There will be a different world postcovid19, and obviously wework, that is another headwind for them, as well as what we are seeing with unemployment across the board. I think that will be a big question for them and its also something for softbank that they need to consider as well. Going forward there will be a big focus on this is a game of high stakes poker. If this ultimately goes into the step, obviously there is funding Going Forward, with weworks cash burn. Haidi dan, we are getting a breaking line across the bloomberg with regard to another company i think almost has a bit of an existential struggle on the other of this pandemic situation. Airbnb is said to have discussed convertible note issuance with investors. A kind of goes to the broader point, how many more of these startups, these disruptors really need to consider their Business Models . With the new normal on the other end of this. Dan i think it is the tip of the iceberg. What we are seeing, just in terms of overall big economy, you look at airbnb, this is something where the Business Model changes for a lot of these. I think you will see a lot more consolidation, valuations change , and ultimately there will be a few winners and a lot of losers. No doubt the Business Models have really changed upside down in terms of what we have seen with the corona pandemic. Dan, i want to throw up this chart if we can, which talks about make a cat tech acap tech stocks per historically in this bear slowest toy were the fall below their 200 day moving average, and a quick list to recover. In terms of havens within tech, would you be sticking with the bigger names at this point . Dan that has been our strategy, along with some areas and cloud and cybersecurity. I think the big tech companies, you look at amazon, apple, obviously netflix, among others, there seems to be relative these sector trends on the other side of the dark valley. I think right now youre starting to see investors move to security blankets, and its a treacherous market, but i think the strong gets stronger on the other of this. Which is why i view in terms of microsoft, the, cloud, cybersecurity, those are the areas to stay in in tech despite the uncertainty. Taylor im desperate to get your thoughts on another company we have talked about almost daily for the last six months or so, and that would be tesla. Walk me through with tesla here. With china with the shanghai factory, but there is the consumer here in the u. S. And the low oil prices, reducing the immediate need to go to an electrical vehicle from a traditional gas guzzler, if you will. How are you starting to thing about tesla in this era . Dan i think tesla is a good example where the world looks different for tesla today than a month ago. In terms of the demand situation, obviously within the u. S. And europe, as well as what we are seeing in terms of shutdown and overall production issues across the board, when the delivery numbers come out tomorrow or friday, there are worries about what it looks like in q2. I would say right now the full story for tesla, longerterm, i think that trend continues to be there come up there is definitely dark days ahead for tesla over the coming quarters. Haver how long does tesla on the Balance Sheet to work through these challenges . I think the best thing the board and elon musk ever did was tap the markets when they did. Right now that took any liquidity issues off the table, lastially in terms of the 2 billion, 3 billion they raised. I dont really see any liquidity issues in the next 18 to 24 months, but the cash burn will be an issue. That is why i think the focus of the street is to see what the cash burn looks like here over the next three, four quarters. Now ford willght wait to see what the deliveries look for the year, just put numbers on it. Somewhere atg about 400k, and that is just in a matter of a few weeks how the forecast changed. Foxconn reassured investors that they can still push out the 5g iphone according to schedule an apple is sticking to that for now as well. Is that likely . What do you see in the smartphone space in the next 12 months for apple . Dan when it comes to 5g we think there is a 10 , 50 chance this gets released in september, october. 10 , 15 chance this gets released in september, october. With think the supply chain has been strained. Is it possible, yes, but it comes down to the overall consumer demand. With unemployment massively surging, that is not the environment apple wants to release a 5g phone into, which is why we believe it goes into december. , theext quarter to a year iphone is down 15 , 18 , but the 5g cycle remains, which is why we continued to be bullish on apple. Right now to put numbers around it, when you include these services businesses, getting into the core iphone hardware business for about two times revenue. I think that is how you have to view a name like apple. 5g, we expect that to be pushed out in the december timeframe. Dan, always great to have you with us, wedbush securities. Dan ives come all things tech. A look at how we are traveling in trading, in asia, a sobering mood as we had all three major indexes in the u. S. Softer 3 rnight to the tune of over apiece. This is what we are seeing in sydney, off about 2. 8 , the aussie dollar also seeing renewed pressure. The u. S. Dollar regaining strength higher against all currencies and the g10, other than the yen. We are looking at weakness as we head into trading in tokyo and seoul. And taiwan markets are closed today. Lets get the first word news now in new york. Is accusinglligence china of concealing the true extent of the coronavirus outbreak, underreporting total cases and deaths. We are told the Public Statement about the infection have been intentionally incomplete and that the numbers are fake. Beijing has changed its reporting of people with the virus, showing no symptoms, and added 130 thousand extra cases in the first day. Growthia is cutting forecast by more than half as the virus undermines the economy. Growth is estimated at 2. 3 this year compared with initial projections of 5. 3 . Said in ae minister worstcase scenario the economy could contract by. 4 this year. Stocks in japan slumped, ending march with the demand hit by octobers task hike tax hike. Manufacturer sold 5 million vehicles in the 12 months, with sales in march falling 9 . Automakers have been suspending production at plants at home and abroad as the demand plummets and workers seek safety. China is considering lowering subsidies for electric vehicles even as it commits to extending the program another two years. State council said rebates will continue until 2022 as the coronavirus hit the demand for cars, but various Government Agencies are discussing whether to compensate just 10 this year. The range of cars covered by the subsidies may also be narrowed. Global news 24 hours a day on air and on quick takes by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Taylor . Taylor dont miss the exclusive interview with standard onrtereds Bill Whitaker bloomberg surveillance. This is bloomberg. Taylor Small Businesses across the United States say they mean need money in their pockets weeks ago. Is the aid coming fast enough . Karen kerrigan is the president and ceo of Small Business Entrepreneurship Council, a nonpartisan advocate for Small Business. It is great to have you won. A lot of people say they needed the money two weeks ago, and by now, by the time they get the aid its almost too late. What are you doing to make sure that businesses frankly are getting the cash they need it yesterday . Karen we are pushing the process along to the extent that withn, in terms of working the administration across agencies, the treasury. Emergency loan program has been up and going now for about a week and a half. Many of our businesses have applied to that. There have been some changes now. There is a 10,000 advanced that can be given, and that was up and running about two days ago, so hopefully some of these Small Businesses will beginning at advanced getting in advance prior to getting the loan. This friday, april 3, small proprietorsnd sole will be able to apply for paycheck protection loans run by the sba under a loan program. , independent contracts and the selfemployed. We are trying to get ready to apply for these, working with the banks. Many of them will become sba loan lenders. And also working again with the administration to make sure that the rules are clear, the guidance is clear, and there is clarity so that they know how to pull all the stuff together, what they are applying for, and if there are going to be loans for business for some of the things they need to cover, expenses, over than a couple months. Taylor this sounds great, and the problem is, and i want your input on this, Small Businesses are really worried about the red tape surrounding the sba, where could take months to get a loan. The treasury and fed have hinted that they are working on backing up loans for banks so that a Small Business can go to the bank, they dont have to go through the sba. What are you hearing from some of your constituents about getting around some of the red tape the sba may be known for . Karen that is a really good question. Loans on thedes Economic Injury disaster loan directly. If businesses apply for that loan, hopefully they will get that 10 advance soon. They said it would happen within 2, 3 days. On the sba loan Paycheck Protection Program, that is central bank. Banks, thernment and banking community, Financial Institutions, they have to deliver. We will have to see once these applications start going in on the paycheck protection loans friday with the turnaround time is. Withve been keeping track our members on the Economic Injury loans. We will start tracking them on the sba loans. A big piece of this now for treasury is getting more banks involved, community banks, credit unions, a wider swath of Financial Institutions of all sorts, even online lenders, getting them approved. Institutions,ore and hopefully in the backyard of Small Businesses, where they can going apply for these loans right away and get the capital they need right away. Karen, obviously the priority at the moment is speed. Time is of the essence, to get money into the hands of these Small Businesses. As quickly as possible. Im wondering about the longerterm repercussions of this, though, because six months, 12 months down the track, are we going to end up and this is not just the u. S. , there are concerns in australia about the subsidies and easier lending conditions, that on the other side of this you will have a lot of businesses that are still facing insolvency that wont be able to feasibly get back and be a successful business. Of concerne is a lot out there, absolutely. So how this Paycheck Protection Program was designed was to hopefully give Small Businesses a bridge loan so they can bring back some employees and keep the men the business and have the dna of the business stay intact. Once we get on the other side. When there isght, uncertainty of when this will end. Im talking to you from the state of virginia right now. The shutdown order, that is what we are calling them come is in place until june 10. I dont think anybody expected this even a week ago for this turnoff and Economic Activity and the restrictions on Business Activity to go that long. There will be losses, no doubt about it. We will have businesses that will go under. And right now, though, we need to save as many Small Businesses as possible and we are doing as much as we can, trust me. They dont go to the government for much. I would say this bridge loan is very important, but they are really repurchasing, remaking themselves, doing what they can to cut all costs to the bone, but still bring in revenue in the door and doing things that, again, they can survive and hopefully this will be shortlived. But as i said, it is an evolving situation, has been, and continues to be, and that is why we are pushing these programs to get the money out as quickly as possible to these businesses, again so they can be supplied with some fuel, the capital they need to go another couple months , and hopefully this will be behind us. Karen, quickly, where you sing the most resilience in terms of industries and sectors . Karen it really depends on the entrepreneur in the business owner. We are seeing amazing innovation, resilience, and grittiness from Retail Stores to restaurants. Its really great to see that americans across the u. S. Are rallying around their restaurant sector, take out tuesday, continuing to support that important industry and do the take out. But they are all doing very interesting things in terms of deliveries, collaborating with other businesses. So i think it really varies by the entrepreneur and how innovative they are and how , and whatthey are they are doing by themselves to survive this. Knowts very tough, as you , in all these industries. If you dont have that foot traffic, if you dont have the mobility, you just dont have the volume in the store. Again, its going to be tough once we get to the end of this and see the carnage, but there will be some good stories and good lessons and new models that come out of this. And new entrepreneurs as well for your is always an opportunity where there is a problem in the marketplace, and we do seem to have a big one right now. Karen, thank you so much for joining us. Karen kerrigan, chairman and ceo of Small Business Entrepreneurship Council. Up next, increasing spending as japan looks to fine tune the target when it comes to boosting spending. This is bloomberg. Taylor lets get a quick check up of some of the headlines. Theyll sterling government is unlikely to provide a bailout to virgin. The Australian Government is unlikely to provide a bailout to virgin. Sources say ministers dont want to be saddled with equity in the company that was struggling even before the crisis. Tmobile has completed its rival,r of a smaller sprint, creating a new wireless giant that rivals at t and verizon. The agreement was first announced two years ago but has taken time to complete because of pushback from regulators. Deal will belion funded mostly by corporate bonds, with tmobile said to be preparing a 10 billion offering immediately. Ministers new prime has been appointed to lead the countries wealth fund. He takes over as chairman immediately, replacing the person who resigned as Prime Minister last month. Alicias finance minister has also been appointed to the board. Malaysias finance minister has also been appointed to the board. Haidi we are a few minutes away from the market open in japan, seems like a lower open. In the meantime, the country revisiting the idea of cash handouts but with finely tuned targets, not a blanket giveaway. Are hearing the same kind of sentiment in lots of countries. This is something that will be targeted, scalable, directed at the portions of the economy that needed the most. What we know about what japan is considering . Haidi, japanright, tried this before during the Global Financial crisis and it did not go very well. It pretty much flopped. In order to get it right this time, i think what we saw last time was the payment was just too small and everyone got them. Including the affluent people, who really did not have much need. I think the government also hoped these payments would boost consumption across the board and fuel growth in the economy, which just didnt happen here. As you know, there is a high saving rate in japan and people ultimately just pocketed the cash. The latest data we have suggests people are only spending about 65 of their income here. So as a measure to boost consumption, it didnt work last time, so i dont think they will try it this time. Enough or 10 of gdp do we need more . Lets see, the is thatfrom last time japan will unveil more packaging. The Prime Minister made a big play out of this being a record stimulus compared to the Global Financial crisis. The figure we have seen from his trillion, bigger than the 57 trillion they had in 009, but package in 2 they ended up having five packages during the Global Financial crisis, which takes the grand crisis up to 157 trillion, which is considerably more. The measure so far taylor paul, we have to leave it there. We appreciate the insights. Paul jackson from tokyo. Coming up next hour with bloomberg daybreak asia, we speak with the Standard Chartered head of global fx eric robertsen. Market open is next. This is bloomberg. Good evening from bloombergs Global Headquarters in new york. Im taylor riggs. Pigot haidi strapped japan and south korea have just open for trade. Welcome to daybreak asia. Our top stories this hour. Asiapacific markets are set to andow wall street lower question governments ability to handle the coronavirus pandemic. Treasuries rise along with the dollar. China is accused of taking virus data faking virus data. A liberally underplayed the number of cases and deaths. Lockdowns and social distance wreaking havoc when it comes to businesses around the world. We discuss all of that and the fallout. I want to get a check in on the markets. Rough to kick off Second Quarter on wednesday. You had the s p 500 falling about 4 or so. Weaknesshat translating into overseas markets that are now opening up. Aboutopening up lower by 0. 5 . You are getting yen weakness relative to Dollar Strength. Some of the traditional safe havens that you get from the yen, weakening of it. You are getting a drop in the 10 year yield. Look at that. 0. 2 . My colleague said that jgb traders will be watching for japans first debt auction for the fiscal year. The last auction we got has seen poor demand. All this liquidity drying up as we enter into the month. I want to take a look at australia markets as well. We do have Australian Shares trying to hold on to some of the gains here. Banksd originally have really tracking down the sector saidost after the rba z lenders would not be paying dividends. The rba continues to slowly reduce liquidity which is still staying near record levels with overnight rates dropping further from the centralbank target. A lot of funding issues as well as centralbank action in some of these bond auctions that are continuing to have an impact here on these equity markets. Look to recap where we were in the u. S. Futures are higher. U. S. Futures opening up in the last two hours, reversing some of the losses that we saw on wednesday. You are starting to see weakening in the bloomberg dollar which is a relief for a lot of traders given that there was a lot of funding issues with the massive Dollar Strength that we have seen. Crude finally starting to rebound with a 21 handle. You know that three days ago when we head a 19 handle on crude, that pushed it down to the lowest since 2002. Crude catching a break. There are tons of concerns, not only about demand but with a lot of the supply side in saudi, saying they will continue to increase their production. Flooding the market, the most on record. Really a source of continued concern. Lets get you the first word news with ritika gupta in new york. Raqqa the u. S. Is seeking as many as 100,000 body bags as authorities warn the coronavirus deaths across the country may soar in the coming weeks. The pentagon may draw the bags from its stockpile which the Trump Administration says they have a the Trump Administration says as many as 250,000 people could die. Coronavirus cases continue to rise around the world. Deaths has more than doubled in the past week. In the next few days, we will reach one million confirmed deaths. D 50,000 accusing china of concealing the true extent of the coronavirus outbreak, underreporting total cases and deaths. The Public Statement about the infection has been intentionally incomplete. The numbers are fake. Beijing has changed its reporting of people with the virus showing no symptoms and has added 130 extra cases in the first day. Italy is extending its sweeping virus locked down for another two weeks even as reported deaths from the infection slow. Restaurants, bars, and public venues are closed. All nonessential Economic Activity has stopped. Internal movement is severely restricted. 727 new fatalities in the last day. Thats the lowest number of deaths in six days. Total cases are more than 110,000. India is stepping up measures to tackle the infection. The r. B. I. Is introducing relief and allowing states to borrow more. The pandemic has stalled business and triggered a nationwide lockdown. They have already declared a recession. Health experts say india may be the next coronavirus hotspot as cases and deaths rise. 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. Im ritika gupta. This is bloomberg. Haidi thank you. Taylor thank you. We are joined to discuss the outlook for the consumer sector. Coming up next, we speak all things fx. Taylor i want to bring you breaking news. The we work Board Committee has come out in any mel statement and said that softbank will not complete their offer. This is exactly what we were hearing from our reporter in the last few hours. We knew that softbank was getting ready to abandon its we work investor deal. It was a deadline for a 3 billion deal with we work shareholders. Softbank is going to let that expire without completing the agreement to buy more equity. That was despite threats of legal action from some of the members of the company board. Softbank had previously agreed to buy shares from the former ceo. It looks like they will not complete that offer. Heard in the last hour that this is a bigger problem for that former ceo adam neumann. More so than anyone else. We will continue to follow all things softbank and we work and venture capital. Our next guest says the ongoing Dollar Strength is no longer just a symptom of the market crisis. It risks becoming a crisis itself. I want to bring in Standard Chartered global head of excess, rates, and Credit Research and head of global macro strategy, obertsen,. What do you mean . During u. S. Ly economic a performance and certain strong interestrate differentials, you see the dollar favored. That would be a symptom of the economic environment. When you get into times of crisis, you see the dollar being collected and held as a safe haven. Thats really a reflection of a couple of things. One, a desire to hold the u. S. Dollar cash at the expense of nearly all other asset classes. We did see evidence of that a few weeks ago. Whichher aspect of this is especially troubling for emerging markets is the amount of dollardenominated debt that has been issued by both sovereign issuers as well as corporations. That dollar by ability becomes a real problem for the issuers during these times of Dollar Strength. It becomes a crisis in and of its self. The feds repo announcement for em Central Banks over the last 24 hours is partially a response to that. Taylor i want to get to the emergingmarket fx because that is presenting issues. You did talk about some of the fed intervention. Has that not been enough or help solve some of the funding issues we were seeing . While the dollar is still very strong, it has come off of the kies that we were seeing peak highs we were seeing in the last week or so. Eric its a great question. I would agree that a number of the measures that the fed and the treasury have put into place have gone somewhat some way to mitigate liquidity blockages that we were seeing in the Financial System and the interbank market. Some of the more typical credit spread and interbank liquidity were all extremely stressed over the last couple weeks. Theyve seen a number of those metrics normalized. Weve seen fx volatility come lower as well. In some instances, we saw the dollar trade lower in response to that. Weve also seen the Federal Reserve increase fairly significantly its quantitative easing or asset purchases. That should also go part of the way towards taking some pressure off of the Dollar Strength. As you mentioned moments ago, the concern is not just in the u. S. Financial system but in the broader Financial System and emerging markets as well. Haidi do you expect dollar you want to stay range bound . Weve hardly had a blip from the chinese currency since this threat started. Does it stay the stable anchor currency in this part of the world . Are you surprised we have not seen that stability seeps through to emerging markets . Before this, the correlation was stronger. Eric the short answer is yes, we do expect dollar see and why to remain relatively stable cny to remain relatively stable. There are a couple reasons for that. Part of it is pure economics. Part of it is financial. Its a Global Travel shutdown. Weve seen outbound chinese tourism come to a halt. View,n economic point of that takes pressure off of the Services Deficit within chinas current account. That is currency supported. The more financial factor which i think is highly important is we continue to see very Strong Demand for chinas fixed income products, whether it is government bonds or quality bonds. Those markets have been very stable. China fixed income has behaved much more like u. S. Treasurys rather than any a market. That has offered quite a bit of stability for the currency as well. To your final question on the spillover to the rest of em and asia, i think it will ultimately help when fears around coronavirus and the Economic Contraction start to stabilize. I think until we see evidence of that, the rest of em asia is going to be fairly challenged. We remain fairly cautious on currencies like korea, singapore, malaysia, etc. Haidi what about in terms of the commodities related currencies . How much more downside could we see from the aussie dollar . Aussie is interesting at the moment. Your points on commodities generally is important. Obviously, we are seeing crude prices trade below the lows that for the oilrly 2016 exporters. That will remain a significant challenge from a fiscal point of view in terms of lost revenue. For the broader commodity complex, and specifically aussie, theres a bit more of a twoway argument. Yes, the us trillion economy has been hit very hard and will continue to be so. Ofare also seeing evidence stimulus coming through the pipeline. If you believe that china is going to be early relative to some of the other economies in the region or even globally in terms of getting its factories up and running again, theres potentially an argument that perhaps the aussie has seen the lows for this cycle. Great to have you on with us. Ceo isbank of america taking an optimistic view of the recovery prospects for the u. S. Economy, saying that growth will bounceback fairly quickly. This happening once the coronavirus pandemic is resolved or manage. He told us exclusively why he thinks the u. S. Growth potential and recovery potential is in a better position than many think. As we went through january and february, we saw that are consumers are spending money at a doubledigit rate. The economy is going to grow faster than People Project it would have been like. Into march, you saw the situation, even with the impact in march, we will still see our Consumer Spending and aggregate be up for march. Not a lot but two or 3 . Yeartodate, it will be up in the high single digits. Thats faster than last year versus the year before. The economy is on this path. It has changed dramatically as march has played out. With the Federal Reserve does is stabilize the markets. The stimulus bill is an effort to keep people employed. Thats the number one at bank of america. Our teammates have a job until yearend. To the extent we keep people employed and keep cash into the household, that will be terrific and keep the baseline economy growing. How do you help Small Businesses do that . That is the program that has been announced that they will implement beginning friday. The key to that is to get the money out quickly on behalf of congress and the president and the administration. They developed a set of regulations that are coming out. They are in the process. They are starting to publish them. Customers need to be patient. Who theyo your bank already have a lending relationship with. Have manys will customers come to us. We will them into the program. They can continue to play their employees. That is what the money is here to do and cover overhead to help Small Businesses through this tough time. Setting up shop and activating thousands of people to be able to take the applications. If everybody can just do it in an orderly fashion, it would be very good for the u. S. Economy. All of us are trying to live daytoday, week to week and get through this crisis. Id like to look forward little bit. Some economists are talking about the permanent reduction in consumption because of the crisis. Is there a risk of that . How large a risk is there . At the end of the day, one of the things that is great is if you think about the throughput of the u. S. Economy, with the amount of stimulus and fiscal support that is coming, if you , the sheernomists amount of dollars in that is overwhelmed by the amount of support coming from the markets. To get uss geared through the other side faster. There is no structural issue in the economy. If we mitigate the Health Care Crisis, you will see a rebound on the other side of this. As people have adjusted their secondquarter down more due to the and implement claims last , there will be a deeper downdraft. Most economists that i see believe there is a reversion back to where the economy gets back to the same size sometime next year. Thats a pretty fast turnaround. I think that is the core belief. You are not changing anything fundamentally about the Business Cycle or whats going on. You are saying if you get by this virus, it works. In china, you are seeing the data get stronger. They are on the other side of this situation. , factories are at 70 goods coming out of china. You are seeing factories start up in some of the places that were most affected. The question between us and that will be when the consumer feels comfortable going out and going to restaurants and going to shop at a store and do things like that. That will come when the Health Care Crisis is solved. Obviously, theres a tremendous amount of people and a Great Health Care system working on it every day. When that happens, thats when the behavior will go back. Its a matter of how fast we get there. Taylor bank of america ceo. Dont miss our exquisite interview with the Standard Chartered ceo on bloomberg surveillance. This is bloomberg. Haidi we are watching southbank shares trading to the downside in tokyo. 3 in theclose to previous session. So much pressure for the stock. The very latest in terms of this ongoing drama. It wont complete this agreement to buy more equity in terms of this we work investor deal. The deadline for the 3 billion deal with we work shareholders is going to be allowed to expire without the completion of the agreement to buy more core equity. This is despite threats we have someof legal action from members of the companys board. We are also considering the implications when it comes to the broader refinancing options within that bailout deal. Lets get over to ellen hewitt, joining us from san francisco. Latest gekko latest . Ellen we may have an update soon. Our reporting shows that softbank is not planning to go through with this 3 billion deal. Thats a big deal for the shareholders of we work, in particular for adam neumann who was set to sell close to 1 billion in this stock sale as part of his exit package from the company last fall. In addition to him, there are early shareholders and large investors as well as many ask and current employees were looking toward this tender offer as a way to recoup some of the value of their shares after they saw that value plummet last fall in the ipo fiasco where the company tried to go public and didnt. This is a deal that many people have been anticipating. Now it seems like softbank is pulling out. Be aect that there will lot of battle Going Forward in which we might see lawsuits or potential other repercussions as people try to figure out what to make of this change in plans. Taylor what does this mean now for we work Going Forward . The future of adam neumann . Ellen this has been a big part of what adam neumann expected to collect on his way out of we work. I cant read his mind. I have to imagine that hes fairly disappointed that it seems like it will going to be going through. It wont be going through. I think its not a good sign for we work. This is a company that is now 80 owned by softbank. You have your majority owner saying, we dont want to buy more shares. Signnot a great science or showing confidence in the company. Many businesses are facing an unprecedented and unexpected challenge to their business. This is a company that has built an entire Business Model on the fact that your Office Experience will be better and more energetic and more collaborative if you are working in close proximity to other people. That now sounds like a pretty foreign concept for millions of people who are being told by the government to stay home in order to stay healthy. Its unclear how the larger pandemic is going to affect we works business future. At the same time, they are experiencing a protracted battle between them and their biggest shareholder. Taylor ellen hewitt in san francisco. We do have some big guests coming up later today including the ceo of suntory. Haidi lots more to come. We have the Quarterly Business Sentiment Survey up next, giving us the latest quick reading of what business is feeling at the moment. This is bloomberg. Nowadays you do more from home than ever before. The xfinity my account app puts you in control with Digital Tools to give you the help you need when you need it. Get fast and easy answers with personalized help 24 hours a day, 7 days a week. Change your wifi password to a phrase thats easy to remember. Even troubleshoot your services on your own. Were working to make things a little easier for everyone. Download the xfinity my account app today. Taylor we are getting the latest reading on the economy here in australia. The Quarterly Business survey seeing a pretty steep drop when it comes to business confidence. 11 when it comes to business confidence. Business conditions at negative three. Both Business Conditions and confidence contracting in q1. Whats interesting or discouraging is that the survey was conducted in february and the early part of march. The most australian states and cities, the more severe shutdowns of businesses across retail and the Service Industry really happened in the middle and towards the end of march. Suggesting that the next reading perhaps is more reflective of the downside. Group chiefhe nav economist saying we expect the broadbased decline to continue. The biggest hit to personal Recreational Services and retail. We continue to see that disruption to the labor force in those sectors as well. Leading indicators. The u. S. Intelligence community has now accused china of concealing the extent of its coronavirus reporting of the outbreak. Thats according to three u. S. Officials citing a new classified report to the white house. Were joined now by your tv north asia correspondent Stephen Engle with all the latest details. He joins us out of hong kong. What do we know about this Intelligence Report that has been submitted . We know the white house has had it for a few days now. Stephen thats right. The u. S. Intelligence community classified report to the white house, as reported by three officials who did not want to be identified. Telling bloomberg news, saying the report concludes that the number that china that has reported on the coronavirus in their estimation is fake. Says the reality is that we could have all been better off if china had been more forthcoming. Yes, china did impose stricter lockdowns on wuhan and Hubei Province than other countries did in their jurisdictions. It also changed its methodology for counting cases several times. That raised a lot of skepticism around the world and in china. Pictures have surfaced of the number of turns piling up urns piling up. Sayics of this report also that perhaps the white house is using this report for political motives ahead of the election this year. Ofare getting other reports a city under lockdown again. Local media saying one person was confirmed to have contracted the virus in this county and subsequently we learned that three doctors have tested positive. Taylor we are also getting some other numbers out of the south and southeast asia. Those not encouraging. Is the outbreak picking up pace there . Stephen it seems as though. This is one of the biggest concerns in places like india which had under tested and underreported. India, weve seen a surge of 601 new cases. Philippines, 247 new cases. Indonesia, 149. Malaysia, 142. Basically march 31 and april 1 saw the worst two days yet in this outbreak in southeast asia. Thats basically being described as a second wave. A lot of these cases being imported back from other parts of the world which are seeing bigger outbreaks. Confirmed cases now around the world approaching one million. 932,000. Spain having their deadliest days yet. New york and new jersey saying their deaths have doubled in the past few days. Its a grim picture right now. Spain having their deadliest days yet. Taylor thank you to our chief north asia correspondent Stephen Engle. We want to bring you breaking news we are getting. The Flagship Fund is facing 30 drop in the quarter, the 3 billion hedge Fund Reporting their worst ever start to the year. This is after their structured credit waivers have soured along with the broader market. We have preliminary estimates coming in for the Directional Opportunities Fund that is this Flagship Fund. The fund was headed for a decline of about 30 or so. Again, this is not new. We are continuing to see a lot of these big bets not turning out the way the people want them. We want to get an update on the first word headlines. Thats with ritika gupta. Riddick orders and employment at u. S. Factories contracted in march at the cook is paid in 11 years. By sm says bookings tumble to their lowest level since march 2009 when the employment is at its close weakest. Record monthly manufacturing declines in dallas, new york, philadelphia. President trump intends to meet top on how to stabilize the market. These potential talks between saudi arabia and russia come after white house diplomatic efforts to get a solution to the current war. Moscow says it has no such plans to speak to opecs leading member. Oil is reeling from its worst quarter ever. Car sales in japan slumped in taxyear, demand hit by a hike and the coronavirus pandemic. Sales for march falling more than 9 . Automakers have been suspending production as demand plummets and workers seek safety. China is considering blowing lowering subsidies for electric vehicles as it extends the problem for another two years. 2022es will continue until as the coronavirus hits cars. Areas Government Agencies are discussing whether to cut incentives by tacit 10 this year. The range of cars may be narrowed. 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. Im ritika gupta. This is bloomberg. Haidi thank you. Lets get you look at asian markets that we are tracking into the close of the week. We are seeing the nikkei 225 extending losses for the fourth straight session. A sobering mood here in asia. This continuation of the mood we have overnight with all three major u. S. Indices falling. The i asx by 3. 7 . Banks in this part of the world weighing the most. , aussiehe rbnz ruling lenders want be getting dividends from their subsidiaries. We are watching the kospi, giving up earlier gains as well. A pretty tepid read for march inflation continuing to paint a picture of dampened Economic Activity and the slump across consumer demand as well. , we are of the bok further away from that 2 inflation target. Very little room for the bok to do more in terms of rate cuts. Taylor we will take a look at what that means as some of the u. S. Markets wake up tomorrow morning. You can see the futures up on the 1 . We had a pretty bad day on the wednesday session, closing down more than 4 . 10 year yields holding in study. A pretty big rally. Listen to this. We are down 132 basis points alone on that tenure for the yield. Its incredible, the demand for a full faith and credit for the 10 year. You are taking a look at jgbs. Theyve been under pressure a little bit. Thisll be the first of the new fiscal year. Aussie bonds as well falling, yields rising as the rba continues to slow down some of its qe purchases. Qualcomm says it is seeing the return of consumer demand in china amid the coronavirus. The ceo spoke exclusively to Bloomberg Technology about the impact of the pandemic. If i look at demand, i think everyone has been hit by really an impact to the consumer while the virus has been peeking in individual countries. It has worked its way west. In china, you seen an improvement in terms of demand and exhibitions of fun. Everybody is trying to put their arms around how western world and the u. S. Will deal with this. In terms of the operations of the company and the supply chain , i would say the ultimate and demand for the technologies that we work on still seems to be quite robust. We just have to consider how we timehrough this nearterm in terms of dislocation of demand. The technologies themselves and the operations of the companys continue to go quite well, even given the difficulties of this environment. I know that there is still a lot of uncertainty. You have to be doing the math and preparing for the worst case scenario. What is your operating themption about just how overall economy, an indication of demand in general . Guide,ou use china as a it took about five weeks for their handset activations to resume to a more normal level. I dont think anyone thinks that the issue worldwide is going to be any less severe than what we saw in china. I think what happens with companies, big tech companies, we are very much focused on making sure that we are positioned well coming out of these situations. If you look at technologies like 5g or smart phones that people are using to get by during this environment, we know that those will continue to be important to people. More sothat, maybe even given the usage patterns we have seen. We want to make sure that we are prepared to take advantage of what we think will be a pretty significant uptick on the backside of the situation. I think theres probably less work trying to figure out how long its going to be, at least right now, and more to make sure that you are organizationally strong during the downtick. For us, we continue to higher. We continue to add people in the areas that were driving 5g. That will continue through any length of time that we can envision in terms of the length of this situation. We are in a different situation than some other Companies Just because we know that the technologies we are working on will continue to be important as we come out of it. You preempted my next question. I want you to dig deeper in terms of what your operations are looking like in the midst of the lockdown. How much of the company is operating as compared to normal . We went to work from home and essential personnel over two weeks ago. We are going to extend that. We did that worldwide. We will extend that in the United States until the end of april, consistent with the guidance that the president gave a few days ago. Differentthere are guidance given from the local governments that we are in compliance with. What has happened, even given the fact that the majority of our companies are working from home, we are continuing to make progress because of all of the we had already instrumented our labs so you dont have to physically be in the lab to make a lot of progress. We dont expect or see in the near term any indicators that would suggest anything other than we are on track for 5g deliveries. We continue to bring up new chips and make progress on 5g. His remarkable. Its a tremendous amount of bandwidth being used to the homes of our Software Engineers to make sure that we make progress. Like every tech company last week, we had to figure out how to deal with the shutdown in india. We figured our way through that. Most people have and continue to do well. Tremendous usage of data into the home and into mobile data to make sure we are successful. Haidi that was the qualcomm ceo speaking to us earlier. Coming up next, we speak to the president and ceo of suntory about the outlook for the beverage industry. This is bloomberg. Haidi our next guest says the coronavirus outbreak is hitting consumption of alcohol which could affect profits at brewers and distilleries. Joining us now from tokyo is takeshi niinami. You were reasonably optimistic about the companys performance in the u. S. Even a couple weeks ago. Im wondering how that may have changed. Globally, what kind of an impact are you seeing when it comes to extended lockdowns . Yes, the landscape has changed a lot since i had an interview with bloomberg. Its quite evident that our businesses are slipping down quite a lot. , theg said that restaurants and bars, that is not doing well at all. We can manage. However, the consumption at homes, that is doing great. There are a few features i should address. Brands are famous preferred by consumers like jim beam. Dont want to try something new. They will drink standard or premium. Is the larger size. The big size is sold very well. That shows they think that the consumers think that this a very long time more, staying at home. We are responding to those needs of consumers. I believe the business, the home now for compensating what comes from this is that restaurants and bars. You cant compensate completely. , wise, it is a low profit margin. We are not selling the superpremium brand through restaurants and bars. Perspective is much at thehan we projected beginning of this fiscal year. This, youn before seemed concern about the global trade war, the u. S. China trade war, the trips between the eu and the u. S. As having an impact on your business. With this extended pandemic threat and the possibility of lockdowns in the u. S. Until we go into the summer season, what are the numbers were crunching . What does it look like in terms of declining sales . We dont know. Sales are slipping down , around 2030 . We dont know yet. How long will this situation really continue . Thats the question, as you know. Hopefully, it should still be around 30 down. Responding to on the huge need for home drinks. Willwill compensate, that we are working as much as we can. Taylor we are trying to go around to all the ceos we speak to to gauge what this new environment has been like. What have been some of the Biggest Challenges for you working now from home in different environmental conditions . As well as some of the demand impact that has been caused by this. What has been some of the Biggest Challenges for you recently . Production is now under pressure. Workers at these operations, at the production mind. How to keep them safe is a huge concern. Infected,ople get theuse we dont know circumstance of the coronavirus at this moment. We are so concerned about what ifs. Our production had to stop operation. About very much careful sanitary conditions for people working for the distilleries, plants, factories. We want to supply enough products to homes through ecommerce. There are whole sellers. The biggest concern is production and people there. Taylor weve been talking a lot about alcohol. Scrolling through your website, you come across a lot of different brands you have. Tea. E, t water, that thosey hope consumer staple items can offset the decline you are seeing on instore drops . Buyingare still perhaps teas or sodas or water. How does that dynamic look like to you . Takeshi exactly. Nowle are no asking asking us to supply water, soda, and tea. They have Strong Demand from consumers. Items are going into supermarkets and ecommerce. In china, our Ecommerce Partners are doing great to deliver water and t. Same as in europe and in japan and southeast asia. Items are mostly in large bottles. People do not buy Premium Products. Marginalize, its not the highmargin. That we want to be going to all the premium stations for every item or product we are working with and producing. Not ordering Premium Products but the standard products. Thats a concern. We want the increased gross margins. Its really hard. You to the big thank suntory president and ceo. We will have many more big ceos coming up on the impact of the coronavirus on businesses. We will speak to link hospitality group. This is bloomberg. Haidi lets say you a quick look at how markets are trading at the moment on this thursday session. To panic futures extending losses now for a fourth straight session. We are seeing downside when it comes to australia as well. We are in session lows over in south korea. We have the additional Downside Pressure when it comes to inflation readings. The cpi suggesting we will see a continued slump in consumer demand as well as broader economic weakness Going Forward. The bank of korea was not that much space when it comes to conventional monetary policy. Rate cuts. The bok conducted their first Retail Operation as part of the unlimited Quantitative Easing Program that is slated to last for three months. Taylor coming up in the next hour, number of will be on Bloomberg Markets to share his advice on how to position yourself in the markets these days. I will be waiting for that. Thats it for daybreak asia. Our markets coverage continues in hong kong. This is bloomberg. Asiapacific markets follow wall street down as investors question governments ability to handle the coronavirus. Treasuries rise with the dollar. China is accused of faking data on the infection. U. S. Intelligence says beijing has deliberately underplay the number of cases and deaths. Ravaged travel. Hairlines