Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240713

Industry leader this hour. Masayoshi son the company is forecasting a massive loss for the year has investments in startups shery lets get you started with a quick check on the markets. U. S. Futures supported at the moment after u. S. Benchmarks ended the session mixed. This ahead of earnings season kicking off officially tomorrow with j. P. Morgan and wells fargo reporting. Afterutures up. 3 , this the s p 500 rallied almost 25 from its march low. Nikkei futures also gaining ground. 4 . We had a little bit of strength for the japanese yen in the overnight session as we saw more safe haven bids play out during the u. S. Trading session. This of course as we saw japanese stocks falling in the previous session. We have been trading most markets away on holiday. Today, only india is off. Crude prices rebounding from losses in the previous session. We had seen crude under pressure despite opecplus managing to strike a Historic Deal to cut output by nearly. 1. Market sentiment guided by what happens with the latest coronavirus headlines. President trump saying that he has the old to lets authority when it comes to a decision on reopening the economy. This after state governors on both sides of the u. S. Teamed up to discuss coordination among themselves on when to reduce restrictions. Bloomberg opinion columnist max neeson covers health care, biotech, and pharma. President trump seems to be singing a different tune right now. Just a few days ago, he was talking about the states have therate having responsibility to stock up on equipment, leaving it up to individual states when it came to deciding whether or not to close down. So why is the president now saying he has ultimate authority . He even said there were parts of the constitution that gave them that authority. Know, the you president seems to believe whatever about the constitution if it is whatever he wants to do. Totever there is robust cuts constitutional scholarship behind his change of opinion, why one thing applies to, you closing down states but another applies to reopening, i cannot say. It does not seem especially likely. What it really comes down to is that the president feels some to reopenlitical push the economy more rapidly or be seen as having control of that, whereas, you know, closing down might have been seen as unpopular. The actual legal question about who has that power is something that may end up having to be resolved in courts if states or these coalitions of states and up having a difference of opinion with the president. There are reports that trump may announce new curbs on funding to the who and there is then that criticism thats part of his narrative for some time now. Do we know what these look like and when they may come . Max that is still to be determined. Freezing oring at cutting off funding but nothing concrete about it. It is sort of this continued effort by the president to shift whether it is to the who, whether it is, you know, focusing over and over again on travel ban from china instead of, you know, the 1. 5 months afterwards where not much happened in virus plaque. That will continue to happen, whether the who plunging or any wehis other attempts are will have to continue watching. Shery there are 70 vaccines in development. Where are we on that front . Max sure. There are three candidate vaccines that are little further along. The earliest human tests. But that still does not mean that the timeline is going to be as fast as people might like. You still have to actually confirm safety and efficacy of those vaccines and the ones coming after it, and then that is fundamentally a long process, and it should be for anything that is going to be given to lots of people, and something worth highlighting is that those vaccines happen to be from smaller lessexpensive companies, for the most part. Some involve new technologies that have not resulted in a widely scaled vaccine today, so you know, a lot of scaling of the manufacturing and a lot of testing to come, but it is really messing that generates hope, that there are so many vaccines involved in concert because it will likely take a few failures to get to one that works and can be scaled up rapidly. Is it a narrower field and hopefully a quicker process to get effective and widespread tests for Antibody Testing to test immunity . The key tooken about getting the workforce back into the economy, workplaces open, schools open, and such. Are we getting any closer . What does that potentially look like in terms of efficacy on the ability to be widely distributed . Progress. A work in there are a number of these tests now. It is a process that, you know, we have been doing for decades, especially complicated tasks. I think the kind of barrier will be when you can have a really rapid, simple pointofcare, one that people can do at home or will go to, you know, a clinic removed from the hospital. You can see a more significant scale. For now at least, it seems like we are in the ramping up stages in the United States where you have limited use of this testing in hospitals, looking for people that have established immunity to potentially use their plasma as a treatment, but still a bit away from sort of broad population testing, let alone the sort of, at the moment, Rapid Testing that you would like to see the kind of use serology testing as a component of reopening the economy. Someone degree to which is presented family infection by a positive test on the serology test and how much that lasts. It is still yet to be determined. Pleasure. , always a max neeson with us. Lets get you the rest of the headlines. Karina mitchell with the first word headlines. Karina france is extending its coronavirus lockdown to may 11, with president macron admitting the country was not prepared for the pandemic. The decision follows a similar decision in italy, where new virus cases declined again. Spain is letting workers returned to their jobs but said it is in no position to set a date for reopening the economy. The indonesian president said he is prepared fiscal stimulus for the coronavirus and would widen the budget deficit if necessary. He said that if the pandemic lasts for more than six months, the government can raise the deficit target beyond the current goal of 5 of gdp. Indonesia has announced three virus stimulus packages so far. The International Olympic Committee Says postponing the tokyo games because of the coronavirus cost it hundreds of millions of dollars. The president told the overall bill could be as much as 6 billion worth all the nonioc costs being borne by japan. Before the postponement, they put the bill for the games at more than 12 billion although a government audit doubled that amount. Sales of Production Equipment in up. A ticked the economy is starting to recover from the virus shutdown. The top 25 excavator manufacturers sold 50,000 pieces of equipment in march, almost 12 more than the same month last year. 90 of the machines were brought by domestic companies. 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. I am Karina Mitchell. This is bloomberg. Share you. Shery. Says ittill ahead, is too early to know if markets have bottomed. Signs that china is 95 back to work with weaker demand now the main concern. Shares their outlook on retail. This is bloomberg. Haidi pretty mixed start ahead of one of the most uncertain u. S. Earnings seasons on record. Futures in japan pointing to a modest rise. Artist in hong kong, australia, set to reopen after the four day long weekend to the easter holidays. Its got some investor perspective from shane. He joins us from sydney. You have wall street firms sticking closely to their year despite 10 of s p firms withdrawing guidance and delaying guidance with macro uncertainty arising from the lockdowns and the Pandemic Impact on the economy. I am wondering how that has changed the way that you invest and approach this earnings season, because even with the guidance that you do get, surely you have to take that with a grain of salt . Shane you certainly do. The normal things we used to give you guidance from a macro point of view, you also have the bottomup point of view, sort of left reliable in this environment because theres so many unknowns, and even when we members, it will be released for the march quarter. They are likely to be down substantially. Even then, you look to the outlook statements to some degree and therell be more uncertainty around those. You have to be a lot more cautious coming into this. It will not provide the usual the glee of clarity degree of clarity you would normally expect. I think we do have to look at the earnings numbers. It atts are focused on the moment. Concern isn relaxed and the impact of the fiscal stimulus. Investors have been used to over the last 20 or 30 years. Haidi what opportunities are you looking for . I am wondering if you think that this market is correctly pricing in the crisis at this point, as we get more and more people starting to talk about when reopening will be. If you reopen too early, theres risks, the longer you keep economies launch down, the greater the risk of another depression is solidifying. So how are you feeling this idea reopening . Ht have a for australia, the Prime Ministers that we are still many weeks away this morning. Shane the prospect of a reopening has to be very positively. Two weeks ago, the top was about six months shut down in australia. That seems to be weakening a little bit. I think rightly so. We are seeing a significant decline in the number of new cases in australia, and it looks around the world that we may be seen the peak in the number of new cases so that does allow for the prospect of a reopening sometime in the next month or two but i have to say it would probably be a phased reopening spread over several months. There is a risk of a second wave, so to speak, that has been experienced in asia. Get to relaxed initially, you have another spike in cases. It has to be seen as something that would occur over time. Outlookmore positive that may have seemed to be the case background march 23 when markets were bottoming locally. I can understand why share markets have become very oversold. Theets have fallen 35 from high in february. We have seen more positive signs in relation to the virus but there may be light at the end of the tunnel. As to where the markets are probably , i think that is a very difficult one to tell at the moment. Theocus more in terms of markets had a massive fall. We had a massive bounceback. The market is up to 20 from the lows. That is understandable given the size of the fall. That weo early to say have seen the bottom. There are some positive signs with theto tick off curve flattening, prospect of a reopening. It looks like we are not going to be locked up six months, prospect of a rebound in global activity through the second half of the year. It might not get to the previous highs. Massive monetary stimulus. Time, markets tend to have a retest. There is a high risk of a retest we have to see if we do get a pullback, how far it goes down, whether we managed to remain lows seen lows seen in march. A lot of uncertainty in the shortterm but i do think markets will be higher. Shery once we come back from this outbreak, can we really demand,hat surge in pentup demand, when we are still not sure how behavior could be fundamentally affected, especially when it comes to social distancing, and just Consumption Patterns . Shane i think there will be longerterm impacts, but i do think there will be a lot of pentup demand. There was a lot of people locked up inside now who do want to get out there. Obviously, mixed with people, but also, you know, a lot of people would have delayed purchases. Ofis really just a matter getting those people confidence to get out there and spend, and that is where the fiscal and monetary stimulus is coming to try and protect businesses, to protect people from the worst of this shutdown such that when we get through the other side and they do emerge, and if they were still getting paid a salary, then a lot of that money would have gone into their bank account to become savings. They would have found their financial position improved. Theres another group of people who have lost their jobs and hopefully, they are protected by Government Programs and there will be a degree of pentup demand as to the question of giving people confidence to get out there and spend this money once the lockdown is relaxed. Shery always great having you with us, chief economist and head of investment strategy. Plenty more ahead on daybreak asia. This is bloomberg. Haidi after the unprecedented opecplus deal over the weekend, the saudi industry minister told Annmarie Hordern that he hopes the oil market will use in the next couple of months. We are keeping all options open. I think the new spirit and the new life and the new arrangement, including cooperation with the other producers, be mindful of their national circumstances, including the new spirit with the new ethic. And what else to demonstrate. We are showing the whole world that we are up and running and acting responsibly. With that in mind, it does not take a hero to predict that this itle arrangement, be generically created, as a result , will not alsoon be attentive to any further require this happen. Hoping this situation can be mitigated within the next couple of months. As opposed to more uncertainty. We turn to that curve away from we descending curve things will be a lot better and things we will be in terms of prejudice, yes. I think i can speak of saudi arabia that as long as all of our partners outside. Ready to do anything necessary. We would be the first to commit and the last to abandon our annmarie five weeks ago, you and russia were headed towards a nasty divorce. Where does this leave the relationship now . All is said and done into years, could we see another place where potentially come back . Annmarie prince bin salman i will carry on with your method. I would not call it any time, they go through distances. Usually, families will keep it to their inner circles. It all depends on the bonds of the family. Like any family, they go through resilienceproved the once they go through some time. The family were much more resilient and much more strong the way that any potential crises that may emerge in the future. Annmarie is the United States now part of this family . Prince bin salman sorry to disappoint. We dont need any divorce stories. Annmarie i want to know what who was the most important people in the deal . We have seen President Trump tweet a lot about it. Are you surprised that an american president is pushing for Higher Oil Prices . Prince bin salman no. Certainly, it is not my job to defend the president , but i would have to be fair to him and speak up. The truth is a responsible president. The truth that which is creating jobs. Creating communities. Creating growth. Creating income. Creating prosperity. Creating certain sectors. S while being looked after. I have yet to see any president of any country that would not do that job. Haidi the outlook for the Energy Market with a commodities strategist at bloomberg intelligence. Mike, we are seeing a little bit of a rebound in crude prices right now, but what a wild ri de it has been. Where do we stand . Mike crude oil is stabilizing to its new lower plateau. Pers sustainable around 20 barrel in wti. It had that one bounce in there. What are you hearing about output cuts . Noise that is mostly responding to the lower price and the lack of demand because the key thing is demand has been subpar and simply the outlook for crude oil was really bad before the coronavirus, but to me, it is adjusting to those levels. Missing to remember is it has some significant companions. Natural gas dropped to a 20 year low in january. And bond yields are the most ever, so this is just part of that newer, lower plateau of disinflationary low prices and crude oil is just part of it. On the more volatile to adjust to these levels. Haidi clearly not the silver bullet. What are the implications for u. S. Shale . A lot of . If the u. S. Does not cut. Mike that is the thing. The u. S. Is not the country that automatically. This is reducing production in the u. S. Shale but there will be higher prices if at some point that might come but the thing is, it is going to hurt the Energy Sector but overall, the u. S. Is a Net Energy Exporter but most of the country really benefits when energy is lower, so yes, it helps create jobs. We understand that. When Energy Prices are lower, it is better for everybody. Shery thank, commodities strategist at bloomberg intelligence. We are looking at how emerging markets are holding up daring the pandemic. During the pandemic. We speak to gary. This is bloomberg. These days you need faster internet that does all you expect and way more. Thats xfinity xfi. Get powerful wifi coverage that leaves no room behind with xfi pods. And now xfi advanced security is free with the xfi gateway, giving you an added layer of network protection, so every device thats connected is protected. Thats a 72 a year value. No one else offers this. Faster speed, coverage, and free advanced security at an unbeatable value with xfinity xfi. Can your internet do that . Shery the emerging market stocks fell on monday after the best week in four years as investors face and earnings season upended by the coronavirus pandemic. I recently spoke to the secretarygeneral of the United Nations conference on trade and development. He explained why many pms have been struggling. Many of the countries are seeing a massive loss of export earnings because of disruptions to the Global Supply network. Disruptions in international markets. Aroundptions in movement the world. Rapid cuts to outflows in the course of portfolio investors. Shery joining us now for more insight on emerging markets is a partner and ceo, gary. Diverse field. We are seeing john hopkins update us on the current coronavirus cases surpassing 2 million. We have seen some stabilization in asian emerging market economies, but really, we have not even seen the start of what could happen in latin america. How do you gauge the winners and losers once this pandemic is over . Know, we have been active in Growth Markets globally for over 20 years in boesch asia and in both asia testing as well as contact tracing. And social distancing. Been three elements have in large part absent from a lot of latin america and in part because leadership does not fully recognize the risk. To point to the president of brazil, bolsonaro, who has become sort of the poster child of denying the impact of this virus. That will have longerterm implications for that country. The other point i want to make is, in certain countries, india and brazil, two examples, there is not the luxury of social distancing because of the level of poverty and the way people live. The slums, the major cities in india, in brazil, obvious examples. When i was speaking to the secretarygeneral just earlier, he talked about among the most unconventional methods, potentially having been being forced to be used in some of these emerging economies including capital controls. Could you see some of those more draconian measures being put in place, and how would that really affect Investor Sentiment in these economies . We are not expecting capital controls. If your question relates to ease of entry, ease of exit, we just do not envision that. I think we have come too far. There has already been an exit out of risk assets. In into safety. And more liquidity. In publicins the drop market e. M. So to answer your question directly, no, we are not anticipating capital controls or something along those draconian lines, however, it is still early and it is a dynamic situation, so it is difficult to have a hard and fast expectation at this point. Do emerging market assets and opportunities present themselves quicker than the rest of the world in terms of the recovery out on the others of this if we consider that we may have a quicker than expected and more robust than expected recovery from china . Gary terrific question. Interestingly, and we have spoken about this before, sectors that are more durable, as well, are responding to the new normal, if you will. For example, logistics. Chain, datad storage. These are examples of durable sectors where if people are forced to live work out of their homes or not use their offices or not congregate as they were before, Online Shopping continues apace, and food delivery, the demand for food, animalresh health, human health, also cool and cold chain related, these are centers that we have always liked and have always been active. We like them more. At yearend, we acquired a Logistic Company based in shanghai, and that business is strong and thriving, you know, in china. E slowdown it will not be a boom year in china, however, in that particular sector, there is a strength. The imf and the world bank are meeting this week, ill be at virtually, and the narrative going into it has been the need for extraordinary support during these extraordinary times for emerging markets in developing nations. Are there opportunities, do you think, in Frontier Markets that do have the backing of the imf in terms of potentially seeing a stronger rebound . There might be. It is interesting. In years past, we have been more to frontier, but several less than ideal experiences seasoned us and have encouraged us into much more of an institutional Growth Market orientation just because, in our view, the Political Risk outweighs what the imf may present as a shortterm boost. So we are more sensitive to the movement of sovereign wealth funds. Have favoredtners more institutional e. M. Thank you so much for joining us. Gary gary brandt with us, and just getting you breaking news from Johns Hopkins global virus cases passing the 2 million mark, doubling what we have seen since april 3, and we continue to see the u. S. Really being the new epicenter of new viral infections as well as fatalities, but just that line, global virus cases surpassing that 2 million grim milestone, doubling in numbers since april 3. We are also hearing differently from the Vice President , mike pence, saying a new Antibody Test may be approved in a matter of days, so pretty critical in terms of all this talk about reopening the economy is the ability to test within large parts of the population. We do have some big guests coming up later on including Michael Milken, and the Asian Development Bank President. This is bloomberg. Karina this is daybreak asia. The World Health Organization is repeating its call for lockdown vigilance. Countriessays those that impose strict social distancing and wearing of masks early in the pandemic shows that infections can be largely controlled. Risinglitical pressure to ease restrictions, the who says now is not the time. Meanwhile, a number of u. S. State governors say they will form regional alliances to coordinate the reopening of schools and businesses when the coronavirus outbreak subsides. That sets up a potential clash with President Trump, who says he alone has that authority. Californias gavin newsom said he and other governors will be byded i facts and science facts and science. The last two democrats chasing the white house have put any rancor behind them with Bernie Sanders endorsing rival joe bidens run. They held a joint livestream event. The endorsement comes less than one week after sanders abandoned his campaign. They are working on a task force. 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. I am Karina Mitchell. This is bloomberg. Cherry. Ery. Hare a sh economicsomberg estimates activity reached 95 of its normal level. For more on what the new normal means for chinas Retail Sector, from bring in our guest new york. Great to have you with us. We are hearing now that many multinationals have reopened their Stores Across china. How does this new normal look across retail in china when we are still seeing people being pretty cautious given the coronavirus outbreak and social distancing guidelines . What we are seeing in terms of this new normal is changes in terms of what people are buying, how they are buying it, and the pace at which they are buying it. Health and wellness, mental withh, anything new and the power of live streamers, continuing to see this definition of the new normal comes through loud and strong. Shery this new normal, how much of it depends on ecommerce as well . Already, we sat ecommerce being a bigger chunk of the chinese Retail Sector then here in the u. S. Will this exacerbate or emphasize that trend . Deborah i think what has been impressive with regards to china and ecommerce has been the capability with which they not only opened up their newness to the world but also, during the lockdown, some of the newly utilized strategies in terms of coemployment of employees, efficiencies, and really building to and from the relationships with the consumer. Haidi what is the permanent impact of this . Ry talked about Consumer Behavior changing permanently. In wuhan, people are still really reluctant to go out, still wearing masks, still social distancing even if that is no longer a government mandated requirement. What kind of opportunities are there for companies to really double down on these new behaviors, assuming that they are going to be with us for some time to come . I think utilizing opinion leaders, which we call influencers in the u. S. , to wide stream and also, you know, message for the companies, we have seen some incredibly interesting partnerships between the likes of adidas and mcdonalds and these new and exciting products that i must haves on are must the consumer lists. They use wechat to talk to other customers and look at themselves as a community leader, continues to drive commerce and also ecommerce in this new normal, as you call it. Shery one of our previous gases said it casts into sharp relief how the internet is basically a fundamental human right so that people can get work done from home, so that ecommerce can take place. What pitfalls are there for companies . I am talking mostly in australia because you have seen a falling over of the Retail Sector, and so many retail players were not prepared with the infrastructure to be able to go online rapidly and efficiently. Is that something you think companies should be quickly investing in right now . Deborah it is a very important point is this idea for the ecommerce perspective. One is we have seen some challenges around messaging online have new approaches during this lockdown period, and what are the appropriate messages to get across, how do you tell consumers what youre are doing to help them and to help others . There has been reluctance in terms of this approach because there is fear by the retailers. What do we say, how do we say it, and how far do we go . How important are these nonessential items . It is really challenging. We are seeing unprecedented investment, partnership between the Large Technology companies and the retailers. It really brightened our heart. We will all get through this together. I do think this is a time where we have Seen Technology Companies Really step up to support, whether it is through the best approaches to the consumer or the best approaches for their own infrastructure, so it is True Partnership and collaboration. Shery in the u. S. , we are seeing more retailers trying to reserve and preserve cash, trying to retain cash. How important will it be to draw on credit facilities, for example, has getting cash could become more expensive as getting cash could become more expensive . Deborah i have to say it has been really impressive. We have been through this shock and we are now in this realization phase, and many of the factors a stepped up to support the retailers. We are seeing unprecedented support of them because the consumer i would say that in this phase, we all understand globally how important it is to support we were talking many of the retailers step up. Are seeing ppe and whether it is a way to keep their employees , you know, currently working, or as a way to drive topline and bottomline, it is unprecedented innovation from the retail landscape in my two decades plus of working with rebalance so i have been very impressed. One other important point is while retail has historically been competitive, we are seeing barriers come down and retailers truly Work Together to support each other and their employees. Haidi Deborah Weinswig joining us from new york. Really appreciate your time. We get more on the outlook for china ahead. We are speaking with economists from number and bank of America Securities ahead. It is a big data dump this week that will give us an indication of the impact of the coronavirus knocked down. This is bloomberg. Haidi watching the tokyo session, when japanese markets open shortly, will be softbank. A massive upgrading loss to the Financial Year after having to write down investments in startups such as we work. Our guest joins us from tokyo. That is on red ink, although not surprising given the drama they have gone through with some of their highprofile investments as of late. Good morning. You are sensitized to march numbers but this was exceptional. ¥1. 3 trillion or 12. 5 billion operating loss for the fiscal year that ended in march. A record for softbank. Point ¥8 trillion loss against 16. 7 billion and another 800 alien dollars came from so zone invest in, which is we work and oneweb. They just filed for bankruptcy last week. This was far outside any of the expectations. Than theminary numbers final numbers are expected in midmay to give you a picture of how bad things are. Shery this could just be the beginning, right . Thats right. The 100 billion vision fund. Just calculating the loss for the fourth quarter, it looks to be ¥1 trillion, which is a staggering number. The company did not give a breakdown. Most of it comes from uber. Oil, a, and probably large investment. The question is, what else is being written down . There might be 15 bankruptcies but that might prove to be optimistic. The first two years, it was 1. 6 trillion profit. In last year, i love that has been wiped out. For 240s in the red billion. Softbank plans to sell off assets including some of its shares to buy back shares and pay down debt. How does that potentially get implanted now . Impacted now . Pavel it should add some urgency to these moves. Earlier this year, in february, it was revealed that Elliott Management bought into soft. Shares have shot up. They have fallen by as much as of and its the kind declines the company has not seen since it listed, which includes. Com bubble dotcom bubble in 2000. Know, it is worth less than the value of the stake it owns in alibaba. Softbank has to liquidate some of those holdings and it will probably be a tugofwar between positive news on that side and what is most likely to be more and more bad news. Shery our asia tech reporter. Lets get a quick check of the latest business flash headlines. Amazon is expanding its hiring spree by another 75,000 workers as it looks to meet everincreasing demand from people stuck at home during the pandemic. The company has already filled an extra 100,000 temporary and alltime positions since the crisis began. Amazon has been classified an essential service amid the shutdown as other retailers around the world are forced to close their doors. Has pulled its earning guidance for 2020 even as americans shelterinplace during the coronavirus outbreak. The chicagobased company cut productions, protections. To generateexpects just 5 million in earnings for the second quarter, down on 100 million it had hoped to make for the entire year. Food deliveryt site has rejected claims it has been charging overthetop commissions to restaurants during the covid19 crisis. A Food Association says it received hundreds of complaints from merchants about excessive delivery costs. It is backed by tencent and says its Delivery Business is starting to recover. Profit has plunged at chinas biggest carmaker. They reported a 29 drop in full year earnings as the Industry Sales slumped, hit the largest market. Net income fell 3. 5 billion in 2019 with revenue down around 7 year on year. Trades slowing growth and tensions with the u. S. And now the coronavirus have been blamed for the slump. Lets take a look at our asian markets and how they are shaping up. Marketsg and australia coming online after the four day weekend. We ended the thursday session up at the highest levels in about a month. Looking to potentially continue on with that rally, despite a mixed a lower picture for u. S. Stocks yesterday. When it comes to trading in tokyo, we are looking at bullion hitting the twoyear high on monday, staying elevated but coming down the topix is up almost 14 from its march 16 will and the yen strength continues to be set to continue for a fourth day. We also keeping an eye out for the kospi, snapping that twoday gain on monday. Coming up on the next hour of daybreak asia, we have a special interview coming up with. He chairman, Michael Milken our colleagues, haslinda amin, will be along with that. We are counting you down to trade data out of china and we will be hearing all about it from number and bank of America Nomura and bank of America Securities. This is bloomberg. Shery good evening from bloombergs Global Headquarters in new york, im shery ahn. Markets have major just open for trade. Welcome to daybreak asia. Our top stories this hour, the coronavirus marks another grim milestone, 2 Million People have been confirmed with the infection around the world. Graces on to find treatment and to allow normal life to return. Woes keep piling up for softbank. The company now forecasting a massive loss for the year ending march as investments go south. Shery lets look at how the nikkei and the topix are doing right now. We are seeing some upside for the nikkei, gaining. 5 . The japanese yen continues to strengthen, after we saw the best day in two weeks for the japanese yen on safe haven demand. We are getting the latest lines out of the nikkei, the japanese new caper the japanese newspaper saying softbank is freezing division its visionreezing fund 2. Were keeping a close eye on what happens to softbank as we continue to see the losses now managed to 12. 5 billion as we can continue to see the startups backfire. Nikkei saving they saying they have frozen their bid on two. Take a look at the kospi right now. We seen the korean won just come off its worst day in two weeks against the u. S. Dollar. We are seeing a little bit of rebound for the korean won as the Risk Appetite returns slightly across markets. , coming ataining 1 a time when exports have taken a beating. The first 10 days of april, exports falling almost 20 year on year. We continue to watch the markets , as we gauge sentiment coming from the coronavirus headlines. Starting to stabilize, at least across asia. Question as to whether the crisis has been priced in, lets look at how we are trading in austria. That staggered opening coming online and we had that for day long weekend for the easter holiday, so some catch up to do fourdate long weekend. Rise on thursday, the last session highest in about a month. The australian lender reported increase provisions, down to 1. 4 billion being reported today. When it comes to the aussie dollar, were looking set for seven day gain. A bit of consolidation with hedge funds adding to the increased recession risk. We heard from the Prime Minister saying reopening the economy is looking premature, that the lockdown will continue essentially for weeks yet. When it comes to oil, as we continue to process the implications of what was a historic and ultimately the king like its not enough of a deal from opecplus, as well as questions over whether reduced output will eventually have to come from the u. S. As well. Cudmore ind by mark singapore. Great to have you. The question about earnings continues to be top of mind this week, of course. At the same time when youve got about 10 of S P Companies withdrawing Earnings Guidance and even more company suspending Earnings Guidance, you still got banks sticking to their year in forecast. How good a forecast in this unprecedented time when every analyst is really saying weve never been here before . Mark i think thats completely valid that we need to be focused on earnings, the forecast for earnings. We have no real idea exactly what we are looking for. Its like the most momentous earnings season, but we dont understand how to evaluate the kind of guidance looking forward. First of all, the headline earnings are kind of useless privet we know it is an exceptional circumstance. Its all about the guidance, how we get back into normal economic activity. Is the Business Leaders dont really know themselves. Even epidemiologist dont know the course of the virus or when we will start reopening the economy. Will be really focused on this guidance, yet we will be secondguessing it almost immediately. While tot will take a get a picture of how to interpret, how to understand it. News is notheadline necessarily the best guide. That said, i think the initial focus will be on the more positive end, with a little bit of a grace period for most trading partners. The concern about corporate debt or loans being written down has been mitigated quite a bit, given the size of the stimulus packages from the fed to alleviate some of those credit concerns. We wont know how to interpret it and we will focus on the guidance. We wont know how to interpret that either, but as we get to the earnings season over the next couple of weeks and combine that with Greater Knowledge on the schedule for reopening the economy, we will be able to put those two things together and get the broader earnings picture. We are also seeing a lot of volatility in the oil prices, not living up to what has been called a historic youll by opec less. Where are we headed here . Mark i think there were two big Historic Deal by opec plus. A superficial headline level, this deal was what does it mean for the next month or two for World Trading . Essentially, nothing. In the longer term, i think it has been a really important deal. That has gotten missed a little bit. Its the length of commitment that these opec less producers have made toward reducing supply, opecplus producers have made toward reducing supply. The problemeviate going into next your. Commitmentsf supply have been massive. Is we havent removed the risk of a sudden top in the oil market in terms that we just run out of storage. We are Still Producing a massive excess of oil every single day and running out of places to put that oil. There was a real chance that sometime this summer we will see a complete dislocation in the brent trading significantly lower than they are now, even on a temporary basis. Breaking news, we do have softbank trading at the moment, and they are now falling on the open, down as much as 3. 6 . This of course on news coming from nikkei that softbank has frozen their vision fund. We know they have seen significant losses across the board on their start up, the backfiring with about 12. 5 billion in losses. The vision find operations are set to book a ¥1. 8 trillion loss and we are seeing softbank losing ground as we have heard from luke local media that they are freezing their vision 2. D haidi lets get a check of your first word headlines this hour. The coronavirus has marked another grim milestone, 2 Million People now being confirmed around the world is having been infected. The total has doubled in size just since april 3. The World Health Organization is repeating its call for lockdown vigilance as governments around the world begin to plan for lifting restrictions. Political pressure rising, the who says now is not the time. You cannot replace the lock down nothing. You must replace the lockdown with the very deeply educated, committed, empowered, and engaged community. We are going to have to change our behaviors for the foreseeable future. Haidi the indonesian president said he is prepared to boost the 28 billion dollars fiscal stimulus for the coronavirus if necessary. He said that if the epidemic less for more than six months, they can raise the target above 5 of gdp. A bleak report from the australian treasury sees the Unemployment Rate doubling this quarter. The treasurer said the jobless rate will soar to 10 for june, twice as high as the rate in february. He also said that without government subsidies, unemployment would reach 15 . Sales of Construction Equipment in china picked up last month, showing signs the economy is starting to recover from the coronavirus shut down. 25 excavating manufacturers sold about 50,000 pieces of equipment in march, almost 12 more than the same month last year. Thats 90 of the machines that were sold and bought by domestic companies. Onlinestill ahead, learning in the virus era. Will discuss expanding the Global Learning network. The Vice President joins us later. Up next, special interview between Michael Milken and her colleague, haslinda amin. They will discuss markets and his philosophic work in health care after his institute is trying 16 potential virus treatments. This is bloomberg. Im confident that by mid summer we will be back to some sort of normalcy. Not like we will be going back to rock concerts, but we will be going to work, our kids will be going to school, life will look somewhat normal. Haidi the Milken Institute has launched a resource to help policymakers with programs in the midst of they have compiled from publicly available information about the focus of each clinical trial. Lets bring in Michael Milken joins us from los angeles. Morning from asia, good evening to you. Haslinda thank you for joining us. Is fantasticinda, to hear your voice, and it seems like our asian summit that you help host with us was a generation ago in september. Know that the Milken Institute has redirected institutes to combat covid19. You are working with house tinted to shins Health Institutions for a cure. Give us a sense of how close we are to finding a vaccine. Can it be sooner than the 1218 month timeframe that we are looking at right now . Michael haslinda, as you mentioned, we have broken our efforts into six areas, as we redirected the centers of the Milken Institute. Education, testing, prevention, treatments, cures, and financial safety nets. The question you asked about vaccines, theres almost 70 vaccines we are now tracing. One went into human beings on march 16. There is a feeling if it was successful and not able to produce it in larger quantities beginning in september or october. Cure is the issue of first going to occur with control. And the monitoring of antivirals or antibody or immunology efforts to control the virus first, to track those that have had it and those that havent, will come before the vaccine. And yes, in the u. K. And other places around the world, there are those that believe they might be able to bring a vaccine i the end of this year. By the end of this year. Haslinda what is the biggest challenge in containing covid19 . You talk about how that has to come first. Michael the biggest challenge is, this virus moves very quickly, and no ones immune system had ever seen it before. So it has had a significant percentagend a large of the deaths are primarily due storm that comes with the response. So we have turned to cancer, many of the new immunology drugs that were developed over the last few years have had to deal this storm and have the potential to control it. So the first step to control is to find a way to use things that have already gone into human beings, been used for other purposes in the past, and can be directed. Once we bring it under control, then ultimately, a vaccine will make people comfortable going forward. Moving faster than it has ever before in history, and the cooperation throughout the world is unprecedented at this time, and the tracker that you spoke to about, that tracker covers more than 100 different therapies, vaccines, antibodies and antivirals, and will they stand in moving into human beings and what the results of their work have been. The issue really is and wevefacturing seen the likes of india banning the import of eight malaria drug that could help in the treatment of covid19. Economic politics stand in the way of this vaccine being made available. How do you ensure access . Michael this is an issue we have been very focused on, our center for faster cures, Public Health, and others. I have been doing, i think as you know, these podcasts every day, one or two a day. They are on apple and spotify. J j talked about it on podcast, the technology that they are creating if there vaccine works to create millions of vaccines quickly. As you probably know, they have agreed to provide them free to everyone in the world. So yes, the challenge of ramping up, but the technology that Johnson Johnson and others are focused on will allow us to create millions and millions of doses quickly. Mike, we heard recently that the u. S. Is at risk of having 18 months of ongoing shutdowns, so we dont have this effective vaccine. Your thoughts on that . Michael i think the shutdown issue really is going to be dealt with by knowing who has had it, who cannot get it again, and who can return. Apple, and, google, other companies right now are focused on how maybe we can give you something on your phone to tell you that you have anybodys that were measured. At the beginning, we focus just on testing whether you had the virus or not. Now we are very focused also on testing to whether you have anybodys due to the fact that you had the virus. Not just that you had the virus, but what proteins have you created so it is safe for you. You will not give the virus to anyone else, and you cannot get the virus. We dont know at this time what percent of the population has actually had this virus. In some areas, it might be 30 or 40 of the people, and if they have built up these anybodys that we have to test for, there will be no problem of them returning back out in society. And those that are at risk or have any preconditions, we can keep them isolated. Theyone wants to reopen environment, get the economies going again, but its going to take this testing to do it, and ultimately a vaccine. Mike, this pandemic is sending the Global Economy into a tailspin. Ray dalio said theres a possibility that the economy could see a depression. Do you agree with that . And what do you make of the efforts so far made by the fed . Has it done enough, or has it gone too far . Michael it definitely has not gone too far. I dont see us going into a depression. The most optimistic message i can give you is hundreds or thousands of Bioscience Companies are working on a solution here. Dozens or maybe even 100 companies are working on a testing solution. Advanced so much, forget,s we do not something we have discussed constantly, that every human life is rushes, and if you save on life, you save the world. On an economic standpoint, Public Health and medical research has been accountable for more than 50 of all Economic Growth in the last two centuries. Expectancyg of life in many parts of the world, and not only increasing life expectancy, but the quality of life. I think whether it was the sikorsky, with alan the ceo of j j, the Worlds Largest health company, or the head of the nih, or David Baltimore who won a nobel prize on his work with viruses, or eric schmidt, the former ceo of google, talking about what we need to do to open the economy. I believe we will find a way to start to open the economy once we establish who has had the virus, who has antibodies, who hasnt had the virus, and ultimately, a sense of normalcy will occur when we get vaccines. With 70 of them working today, i am very confident that we will find one or many of them that work. However, i believe you are looking at the First Quarter of 2021 for that to occur. Thats why we have to first control and test. Haslinda mike, we have to leave it there, Michael Milken, Milken Institute chairman. We thank you so much for your time today. Plenty more to come. This is bloomberg. Haidi the company said to be freezing its vision fund 2. Given all the losses and setbacks for softbank, are you really surprised that we wont be seeing a vision fund 2 anytime soon . It was on ice after the first two quarters of losses, thats what was basically said. One or two years before they were back in the game. Now they spoke about ¥1 trillion worth of losses. The question is whether there is any business left after this. Are macro factors there that are completely unpredictable. Coronavirus at the beginning of the year, and now the biggest factor, saudi is not the place to put money with oil prices down and they are preoccupied in russia. Some of it was problems of bad judgment, overpaying for companies. It could be just a bump in the road, but his reputation is legendary as an investor and he could survive. Haidi thank you so much for that, the latest on softbank. Really tough times. We have a number of major interviews later today including the Johnson Johnson cfo. And former fed chair Alan Greenspan will be with us as well. Much more to come. This is bloomberg. Lets get a quick check of markets. We are seeing a mixed picture with the nikkei and the kospi gaining but we are seeing pressure on the asx 200. Tech and materials are leading the but real estate weighing on the index. As we continue to see strength in the aussie dollar, which was already allemande month at a onemonth high against the u. S. Dollar, the nikkei up 0. 5 at the moment as we see strength for the japanese yen as well. This coming on the back of the boj cutting its assessment of japans regional economies given the coronavirus outbreak. The kospi is rebounding from losses in the previous session. The korean won coming off it worst day in two weeks after abysmal export numbers for the month of april. Reliance ino much terms of these indicators, trade data from march expected today, and they are expecting a huge hit from coronavirus in terms of Global Demand. A key week in terms of the chinese data. We know it is going to be ugly. To what extent are these numbers backwards looking . We know with a virtual complete shutdown of the economy the numbers are going to be terrible. Yes. Backwards. Y [indiscernible] and also imports, a single digit decline. Think it is because it is not complete. On the other hand, chinas consumption is at its initial stage of recovery. It also limits chinas imports as well. In terms of looking ahead, this got about 95 of the chinese economy back online. How quickly do you expect the recovery to take hold and how robust will that recovery be . China april [indiscernible] but people, the markets, the manufacturing reopening, etc. But i think most importantly for china it is where we see Consumption Services back to normal. This is something that is lagging behind. [indiscernible] this is the key. But it is only back to 20 or something. In my mind it will be around may something. Haidi what will normal look like when we still dont have a vaccine against coronavirus, we still dont have effective treatment, so if we continue to see social distancing measures, wont that affect consumption . Absolutely yes. But i think there are also some signals you can see. [indiscernible] but i think theres another indicator we should look at. The schoolsly about in china opening up. The primary schools, kindergartens. Away. Not that far when people see [indiscernible] that is the time everybody will go back. You remember [indiscernible] how much will china be hurt by decoupling efforts, whether it is individual countries trying to veer away from their dependence on china or Companies Just trying to relocate given that it is not just the coronavirus outbreak, but also trade tensions with the u. S. Playing out for the last couple months i mean years. Absolutely. For the longterm i would say it deglobalization, decoupling, and deconstruction. It is not as simple as it appears to be. Global. Mpanies are like they will be even more global because they know where the demand is. The demand is coming from china. Why should they decouple from china . But for every single country theres also a question. How do you support yourself . This is also something that is going to happen. It is becoming even more. This is something i think for or inecoupling other words, can i become even more selfsufficient . The spillover effect to the other countries, especially emerging markets, is [indiscernible] the decoupling is happening for china and e. M. You will now see emerging countries out of recession. Im just wondering how much more support you think we will be getting from the pboc in china. The measures have been fairly targeted and modest compared to whatever it takes elsewhere around the world. State runouple of Media Publications this week saying that the priority needs to be expanding domestic demand. Is that a pretty good signal that we will see more fiscal monetary measures to come . Yes. Theres always a difference. [indiscernible] this is what we see from the u. S. They have said it is better to save the market, because the market is a result of this covid19 crisis. This covid19 crisis is about economic crisis, social crisis, financial crisis. China, it is about the economy. For us, as market analysts, we always say watch what they do. But if you see the money they have released, 5 trillion rmb in march [indiscernible] it has been double digits again. This is very high. They are really doing something. Markets shouldnt worry. I believe they can continue to do as much as possible. Ji, thank you very much. More perspective on chinas economy later. For now, lets go to Karina Mitchell for the first word headlines. Friends is extending its coronavirus lockdown to may 11 at least with president macron admitting the country wasnt prepared for the pandemic. This follows a similar decision in italy where new virus deaths declined. They are letting some workers return to their jobs but are in no position to set a date for reopening the economy. Furthernavirus has weakened Global Demand for energy and saudi arabia has cut most of its oil pricing. Aramco reduced prices for may exports to asia and the Mediterranean Region while raising pricing to the u. S. And trimming discounts for europe. Opec and its allies have agreed to slash output in the hope of draining the glut. Thee are still hopeful that situation can be mitigated within the next couple months or [indiscernible] that once we bend curve away from the descending curve, things will be a lot better. A number of u. S. State governors say they will form regional alliances to reopen businesses and schools. That sets up a potential clash with President Trump, who says he alone has that authority. Californias gavin newsom says he and other governors will be guided by facts and science as he announced a partnership with Washington State and oregon. The last two democrats chasing the white house have put any rancor behind them with Bernie Sanders endorsing joe biden. Joint livestream event saying americans should support the former vp. The endorsement comes less than a week after sanders abandoned his campaign. He and biden are creating a task force. Global news, 24 hours a day, onair and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Coming up next, Online Learning in the virus era. To expand thelans network. We are joined by the vice chairman and executive director. This is bloomberg. Shery as the coronavirus continues to spread, schools remain closed around the world. Our next guest says the virus has presented his company more opportunities. Joining us from hong kong is simon loan. Simon, great to have you with us. We saw a revenue on your education business being pressured back in 2019. We even saw some losses. Different given the spike in demand for Online Learning . It actually will be different. Thank you for the invitation. It is great to be here to talk about education. Is driving situation us in a very interesting direction. Distance learning is becoming key. Surge in termsa of traffic. We are putting a lot of resources behind the business, not only to push the business, but to help the world get ready for the new normal. Shery simon, give us your assessment of which sectors of your business you are seeing the spike and surge in demand and where in the world you are seeing that demand come from. Ofthere is a Community Teachers and students and parents, so they can collaborate not only inside the classroom, but outside the classroom. Because of the coronavirus situation, a lot of kids are staying home. Parents are staying home. Teachers are staying home. So they are using our platform. So weve seen traffic going up all over the world. In the span of two weeks, our travel went six times. So they create a challenge for us to keep up with the demand but also create opportunity for us in terms of helping everybody to learn while they are at home. Simon, im wondering how youre planning for this pandemic has changed. At the beginning, there was an schools maythat reopen after easter or the shutdown would only go for a number of weeks. Now theres talk that it is more there is ahs and if targeted reopening, it is going to be limited and probably will stop and start. What does that mean for your planning for the business and how it is expected to benefit from that . That is a great question. Just in the span of two weeks, we have reoriented our company. Really focusing on the features that can enable Remote Learning and remote collaboration. That kind of concept will extend out to businesses. The concept of remote collaboration. It is a great opportunity for us. We talk about the new normal. Is going to be a lot of Remote Learning and remote collaboration. I was going to ask what happens to your Business Model when we get to the other side of this. Sounds like you are expecting behavior in this regard, Consumer Behavior or parental behavior, that these learning patterns will change permanently . I think so. Not only the behavior of the students, the parents, but also the country. We announced about three weeks educationinistry of decided to put all the students on that model. Students, overn a million teachers, because they see that as the new normal. I think this kind of platform will go on for a very long time. So that creates a great opportunity for us both from a business standpoint and also something we can impact the world of education. Shery we have seen billions of dollars being allocated to education in the United States with the stimulus package. I do wonder how this will affect your Business Outlook and potential with markets like the u. S. When you have seen u. S. In your business being affected. Is a very interesting question. We know there will be more money investing into education. Even with the virus situation, our business continues to grow. Because we also offer technology into the classroom. So we can see the Classroom Technology demands slowing down, that willsame time be earmarked into Remote Learning. I think everybody is looking at learning differently. Remote learning, remote collaboration will be the new normal. For our business, i think it is very good news for us. Technologye the outside the classroom. Shery are you worried about the u. S. Tariffs . No, because essentially we have been absorbing it and we have been working smartly to avoid to find a way to minimize the tariffs. We are handling it. Simon, a pleasure having you with us. Soft Holdings Vice and executive director. Emerging markets have been beaten down by the virus, but the tide may turn in their favor. We will take a look at the reasons why, next. This is bloomberg. Just a correction out of Johns Hopkins. They had a data error which caused the count of coronavirus cases to top 2 million. Now they are saying the correct count appears to be slightly below that mark. In the month of april, we had seen just half the number of cases around the world. Below 2 million. As we continue to see the Global Pandemic keeping more pressure on earnings, ford is considering additional financing, expecting to report a loss later this month and says it had about 30 billion in cash as of april 9. Bloomberg intelligence says that suggests ford has burned through 8 billion since the end of last year. The company has already suspended its treasury dividends. Grubhub has pulled its earnings asdance for 2020 even americans shelterinplace during the coronavirus outbreak. The company cut projections, saying demand for food delivery grubhub now expects to generate just 5 million in earnings for the second quarter. Chinas largest food delivery side has rejected claims it has been charging overthetop commissions to restaurants. Says itssociation received hundreds of complaints from merchants about excessive delivery costs and exclusive contracts. They say the Delivery Business is starting to recover. Lets take a quick look at our markets, in the start of the trading week for a number of markets. Just back from that long weekend, we are seeing the nikkei, just 0. 9 . Over in south korea, we are seeing some upside there as well. 1 higher in australia. Now reversing earlier losses and back to those highest levels in about a month. The aussie dollar continuing to see strength. Emerging markets are being hit hard by the fallout from coronavirus. Over 21 gauge is down this year. The time may be right for a turnaround. Stocks have been so badly beaten down this year. Where could we see the trajectory going from here, particularly if we look at what potential recovery we see in china . Emerging markets have been beaten down by the economic fallout of coronavirus and are being hit much harder than developed markets. Theyve been lagging behind the markets. From now on, probably the time is right for them to start to narrow the gap or outperform rivals. If you look at the ratio, it is not trading [indiscernible] e. M. Stocks is not far away from the cheapest level. It looks like a good value given the declines in 2000. China is one of those e. M. Likely to see some recovery ahead of others. Ratio why choose the pb as the metric of valuation instead of price to earnings ratio . Under normal circumstances either pb or pe could be a good metric. But we are currently seeing a new normal. Profits are becoming harder to estimate and many countries have already canceled guidance for now. For now until we see more clarity on earnings, the more traditional pb might be a more useful metric and more reliable than pe. Haidi thank you very much for that. You can follow more on this story and all trading on our markets live blog, the bloomberg at mliv go. In the next hour, we will be joined by citi private banks investment strategist and after that by j. P. Morgan asset managements Global Market strategist. And we will have more guests coming up. Plus, Asian Development Bank President will be joining us a little bit later as well. That is it for daybreak asia. Lets continue as we look ahead to the start of trading in hong kong, coming back from that easter long weekend. Shanghai and shenzhen also coming online. Stay with us. Bloomberg markets china open is next. This is bloomberg. You doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Beijing. Welcome to Bloomberg Markets china open, rishaad beginning of the trading day on the chinese mainland and in hong kong. Heading toward a grim milestone. The impact on trade will be reflected in chinas latest data, coming soon. Selina investors