Is a warning to the entire industry. More planes into a collapsed market. Shery lets get started with a quick check of how markets ended in the u. S. U. S. Futures right now seeing some downside, down 2 10 of 1 at the moment. This after u. S. Stocks closed at a six week high. We have financials leading the gains. Surprisingly good earnings reports coming from Deutsche Bank which is helping sentiment. We have more positive sentiment and perhaps some expectation there could be more stimulus aasures given that we have trio of Major Central Bank decisions this week. 25 s p 500 up more than from its march lows. When it comes to the nasdaq, also gaining ground, about more than 1 for the regular session. Take a look at what oil is doing because we are seeing some upside for wti which is gaining about 1 . Backafter oil plunged below 12 a barrel. We are now seeing it just nearing 32 a barrel. We did get u. S. Drilling cuts but at the same time come we have the biggest oil etf in the u. S. , saying it will sellout of its june wti position. We are closely watching what is happening with the coronavirus pandemic in the United States. President trump now speaking at the white house. The white house now saying it is looking to expand coronavirus testing to reach at least 2 of the American Public after and during criticism over the lack of a widespread tracking program. That as global place cases top 3 million around the world. Lets bring it Emily Wilkins on the line, our bloomberg congressional government reporter. Details aboutmore how this testing will be expended across the United States. Is somethingsting we initially started hearing about way back in midmarch. They were talking about drivethrough testing at walgreens, cvs, walmart. There had been some reporting showing it was taking some of these Testing Centers a little while to get that up as you saw todays briefing, this is something companies have continued to work on were continuing to expand, going to all 50 states. This is something that we are seeing over time, getting the capacity to administer these tests on a wider level. Haidi in terms of how much or how widespread the reopening we have been talking about could happen, what overhearing on an individual state level as to what the roadmap to an economic normalization might look like . Emily the interesting thing to note is that many states across the country, red states, blue states, have started talking about opening up within the next month. I think the big question, the big thing to watch is what does that opening up look like . Does it look like parts that are starting to open up . Restaurants that are being able to come back at 25 capacity, 50 capacity . Which industries are the first ones to be able to begin to open their doors again after this coronavirus testing . You are seeing different states have different approaches on this one as far as exactly how much they want to reopen at this point. I think we are going to see a lot of states try to hit that right target, making sure people are still safe and healthy, but also making sure that the economy can start to get back on its feet. We also have new york canceling its primary scheduled for june 23. This would be the first state to actually go and outright counsel the primary voting canceled the primary voting. What have we seen as the coronavirus has already scheduled the agenda for this year . Emily almost every state with a few exceptions that have a primary in march, april or may bump to those back to the first week in june. Now they are being bumped even further. A lot of states, it depends a lot on the Sanders Campaign. I reached out to a number of states and asking if they would stop the primaries and endorse joe biden. They said, look, we cannot do anything until we get in written form from the Sanders Campaign that he does not want to be on the ballot. You have seen senator sanders said he does want to be on the ballot. He wants to show how strong his coalition is and hoping to use that coalition to see how democrats move forward at the convention, which itself has been moved back. It was supposed to be july. It will now be in august. Situation. R changing Emily Wilkins as the Coronavirus Task force press conference is ongoing. We do have some updated rules when it comes to the relaxing of restrictions in the south wales state. In australia, we hear from the premier announcing the relaxation to some of these restrictions. They will be allowing people to visit other homes from frio friday onward. Previously, pretty Strict Lockdown when it comes to the social distancing rules. You are not really allowed to visit or socialize with anyone other than those within your own singlefamily unit. We will be watching out for more of those but we have been expecting given the flattening of the curve that there would be some restrictions being lifted or relaxed. Lets take a look at the first word headlines. Japan is adding 14 more countries as coronavirus continue to rise. Infected nations include russia, saudi arabia and people who have been in any of those countries for two weeks before heading to japan will not be allowed in. The government already banned 70 countries from entry as tokyo tries to stem the fallout. Japan has more than 13,000 virus cases, 364 deaths. The Indian Government may guarantee almost 40 billion of loans to Small Businesses amid plans to reopen the economy after the 40 day lockdown. Indonesia is allocating 1. 5 billion to help people affected by the virus. The philippines says it may ease virus restrictions that have been placed in place since the middle of march. New zealand is entering the post lockdown world, reporting five it leftnavirus cases as some of the worlds most stringent restrictions. There has been no community transmission, but the worst scenario seems to have been avoided. Some businesses are being allowed to reopen but the government warned social distancing will stay for the foreseeable future. Not a return to precovid19 life. That day will come but it is not here yet. To get there, our team of 5 million needs to have zero tolerance to complete our goals of eliminating the virus. Scientists in china say progress on a Coronavirus Vaccine is at a critical trial stage but work is complicated and a treatment will not be available soon. Market regulators looking to ease virus restrictions when it comes to shenzhen. Listinga could cut the from months to years. Shery still ahead, the virus pandemic hits Food Supply Chains with the potential meat shortage looming. Sarah menker joins us to discuss. Next, carol pepper tells us where she is putting money to work and what areas you thinks will make money no matter what. Haidi we have the interview later than that with chief executive ross mcewen to discuss his banks earnings and the plan to raise more than 2 billion in capital. That is at 10 30 a. M. In sydney, 8 30 a. M. In hong kong. Dont miss it. This is bloomberg. Shery this is the biggest week of the Quarterly Earnings season in the u. S. I third of the companies in the s p 500 including alphabet, facebook and apple are reporting the guidance that comes from them could be a major factor in the direction of the broader stock market. Carol pepper is ceo of Pepper International and manager for High Net Worth investors. It is way too heavy with us. Could we see another opportunity to buy after the earnings season is done for those investors that missed on the march lows . Carol yes. Hi. I do think so. I think this week will be a week of euphoria but the markets are ahead of earnings announcements. For those that missed the loans, wait a little bit and you will probably have better entry points next week. Tory when it comes investing in the stock market and keeping some capital cash on hand, what are you advising your clients . Carol i work with over 100 million in net worth. These tend to be multigenerational, longterm investors. In terms of cash on hand, i dont think we have seen the end of the lows. Asis the reopenings are not robust and successful as we hoped, if we see a spike in virus incidents decreasing, what is going to happen is you will see the market plunging if reopenings fail. Were still not out of the woods yet and i am advising my clients to have two to three years worth of cash on the sidelines for expenses. In terms of their portfolios, most of the leveraged and got positionsot of their other than Health Care Stocks which continue to lead this rally and recovery. I think those will continue to go well moving forward. Haidi you continue to be optimistic on amazon going into earnings . This is not just a quarantine, selfisolation pandemic story. Real structural changes being made to Consumer Behavior . Carol absolutely. I think amazon as i felt for a long time is really that ge of this generation. Put amazon in your childrens college fund account and you will not be sorry because we are talking about robotics developments. We are talking about the fact that the stayathome is probably not the last pandemic, it is the first pandemic. Theres going to be a shift to much more distancelearning. Everything that amazon does well, from the cloud to deliveries, will continue to do well Going Forward. They have enough money and firepower to capitalizeand buy competitors at this time, invest in new technologies. I just see them as a continued market leader. Will there be a dip after this earnings . Probably, there always is. But if you were looking out six months, nine months, two years, you will not be sorry you bought this stock. There is nothing to stop this juggernaut right now. Amazon is the king and will continue to be the king. Haidi so you are not concerned about valuations at the moment . He would still be buying amazon at this level . Alternative strategies to end on this the medic. Carol i think you can enter on the theme at a much lower price point which would be etfs like qqq. In terms of entry point, if you missed the march lows, you can wait for the next low and pounce on that day. But if your time horizon is 5, 10 years, or your kids college or own retirement, this stock is going to continue to go up. Youver, if you buy qqq, have the advantage of getting apple, microsoft, a great basket of stocks and that is much more reasonable in terms of price, around 200, versus over 2000. It depends on where you like to enter. Amazon is a major part of the qqq basket. From that perspective, it will still get a good slice of amazon in qqq. Shery i know that you deal with longterm investors. I do wonder how you are dealing with potentially more tensions between the u. S. And china. President trump right now at his press conference saying they are not happy with china, not happy with the situation. He is saying he believes the virus could have been stopped at the source, saying they are doing serious investigations on china. And the virus, we heard Vice President mike pence allude to a potential investigation when the right time comes. This may not be a problem for longterm investors, but at the same time a fundamental shift between how the u. S. And china operates, including a decoupling of their economies. Is this something you take into consideration when you look at your clients portfolios . Carol of course. China is a very important player to the globe. Unfortunately when political tensions arise between two of the largest economies in the world, it will affect the markets. The you are seeing in United States is more people looking at the supply chains and unfortunately reconsidering. I know this from some of my clients reconsidering their outsourced supplies being in china due to the current tensions. What this may mean is bad news for china and more home sourcing or sourcing in that latin america, for american suppliers. It is unfortunate. I dont think you can point fingers at anybody at this point. I dont think we know enough. I think everybody would love to play a blame game but we are far beyond that. S the most important things investors can focus on our what are the type of traits and investments you can make that will do well no matter what . In this case, think you should be focusing on things like Health Care Stocks, health care etfs, things like ibb. Lets look for cures, solutions. Unfortunately, i would not be putting my clients money into china now. Although i visited china and regard the country very highly, i think this is going to be a tense time for china. Although, there are many other countries willing to trade with china and it is a big world out there. Lots of u. S. Business may simply go to other countries. China may be less affected than we think. China has been building alliances in africa, the rest of asia, latin america for many years. Im not sure that china being such a large drag is going to be bothered if the u. S. Is no longer their top partner. Shery right. Before we let you go, what is your view on oil . We had u. S. Shale selling out of its june wti position. How do you trade oil etfs at this point when there is so much turmoil . Carol i do think again depends on your time horizon. Unless you are and oil day trader, do not dip your toes into oil right now. But if you really think that 13 a barrel oil is not where we are going to land, and i dont think it is where we are going to land on a down day, you can talk some uso into your portfolio and let it sit there for two years. Dont look at it. Who knows what will happen . I do think the world is not ready to be completely oil free. Lets say six months to a year from now, the surpluses will be absorbed, hopefully if we are successful in opening up the economies again. If you want a value play, oil is certainly in the valley territory, as are some of the reets. Thats another place you can find some value because some of the other stocks are little choppy right now. You are going to have to wait for a pullback to get back in. Appreciate you joining us with those views. Carol pepper, ceo of Pepper International. You can get a roundup of the things you need to know on todays edition of daybreak. Bloomberg subscribers can go to on the bloomberg. This is bloomberg. Haidi the First Quarter earnings but the question remains as the company battles an ongoing lawsuit. The results come ahead of the annual meeting on tuesday, facing another confidence vote. Earlier, he told us it is too early to know how the coronavirus will affect the rest of this years results. Off to a strong start, yet the uncertainty remains. We dont know exactly how the restart and the unraveling of the current lockdowns across the world is going to work. Weve said it is too early based on the First Quarter to further have perspective on the remainder of the year. Do you expect the Management Board to get the support of shareholders at the atm this week . We get more support than last time and what kind of a percentage will be a success . Werner well, actually, within the same token of quarter one 2020, if i look back at 2019, i can say as an organization, we have delivered organizationally, strategically. Interactionup our with shareholders around the world. More than 500 shareholders representing 60 of our equity in the company. Feedback during these discussions have been appreciative and very good. We have delivered on all of our portfolio measures with very strong outcomes for the company and our shareholders. One tomorrowg at that is going to be characterized by it being the first one ever of a Dutch Company to go virtual. We have delivered but i cannot speculate on the voting of our shareholders. Understandsveryone the covid19 uncertainty. The roundup uncertainty is far more of the concern for your shareholders. What are you expecting as far as an Approval Rating . Typically, german ceos get 90 or more. This is going to be, i assume, more difficult for you. Would you consider 70 a success tomorrow . Again, we are very happy with the performance of the company, our entire organization has done a marvelous job in 2019. We are looking with confidence and optimism forward to the agm tomorrow. Covid is a concern. I think we have coped with it very well during the First Quarter. Litigation, the number of cases is not indicative of the justification. It has been very clear on our position of that mitigation. That has not changed a bit. We are doing this in the best interest of the company and our shareholders. I am sure they will appreciate it. Covid19,subject of you produce chloroquine, a malaria drug. Do you have a timescale for when we will know whether chloroquine is useful in this fight . You have an expectation of it being useful . We invented, chloroquine more than 80 years ago. It is proven as a malaria drug. Indicated for covid19. It is indicated for malaria. We do have anecdotal evidence chinaome treatments in that it might work and help smooth the trajectory of the of these and of the disease. If it is given early in combination with an antibiotic. Clinical trials are running as we speak. We hope to have readouts in the next weeks and then we can see whether it really works and can actually provide significant relief to many people around the world. We are actually increasing and restarting our Manufacturing Activities in europe. We have secured significant Raw Materials to do so to produce millions of doses and has proven it works. We have been doing all of that as part of our humanitarian efforts to help people and society around the world. Shery bayer ceo. Theres more on the virus and its effect on pharma earnings later on in the show when we speak. Lets get a quick check of the latest business flash headlines. Apple is reported to be pushing back production of four new Iphone Models by about a month, although it is not saying why. Dow jones site sources say and the new handsets will be delayed, although apple and foxconn have declined to comment. The new devices were scheduled to be launched later this year. General motors is suspending its dividend and Share Buyback program investors have spent years pursuing. The condition for gm to amend a Credit Agreement with banks so that 3. 6 billion revolving line matures in april 20 to 22 a year later. Gm has also deferred some staff payments and put thousands of workers on leave. China starbucks rival has been rated as part of a wideranging probe into finances. We are told the regulator moved at the request of the fcc. The stock has plunged since the Company Executives may have fabricated sales numbers. Shery coronavirus cases are at 3 million with the deaths up to 100,000. The rate of debt sent intelligence continues to slow. China has reported no new deaths and italy reported the lowest levels of new infections in seven weeks. U. S. Cases rose at the slowest pace since the beginning of the month, with the total is approaching one million. We will be defeated if we are not united. If we are not united, the virus will exploit the cracks between us and continue to create havoc. Virus death rates continue to fall in new york, reporting the lowest number in almost a month as Governor Cuomo offered a phased plan for reopening the state economy. He says manufacturing and construction may be able to review work before new york city itself. Total deaths have reached 17,000 come all the new cases of infection are falling. The u. K. Government is calling on the European Union to show what it calls Political Movement if they are to reach a trade deal that prevents a hard split at the end of the year with no agreement. Downing street says brussels must modify some of its demand on access and regulation to ensure what the u. K. Calls a level playing field. A second round of talks ended last week with almost no progress. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts. This is bloomberg. Shery . Shery thank you. A quick check of how the markets are trading. We are seeing u. S. Futures and japanese futures under pressure, this after the s p 500 closed on a sixweek high. Financials leading the gains. A little more positive sentiment given that we have a Major Central Bank decision this week and potentially more stimulus measures coming from the central banks. When it comes to wti, we are seeing a trade above the 13 a barrel. Gaining a little bit at the moment. This after it plunged below 12 a barrel in the u. S. Session. The biggest oil etf, u. S. Oil fund, saying it will sell out of its june wti futures position so that is pressuring the markets. Haidi . Haidi yes. The coronavirus pandemic is pushing the Food Supply Chain to its very limits. Plants shutdowns are leaving americans dangerously close to seeing meat shortages at grocery stores. Our next guest says these will have longterm consequences for the worlds Food Supply Chain. Joining us is sara menker. We think about some of these concerns when we spoke to you in november last year at the new economy forum. It feels like light years ago. En beforebeing is beeev the pandemic, there were serious complications with the global Food Supply Chain. How much has this situation worsened things . Sara yes, it does seem like light years ago. In terms of the global Food Supply Chain we did speak about this in november it is about countries that are net importers of calories and countries that are net exporters of calories. One thing that has happened this time around is a lot of the net importers of calories, which are often times emerging markets, have also had massive currency pressure happening. You have the cost of importing going up, even if all else is equal. Then you have disruptions on shipping, etc. There are some structural issues on supplies being able to meet, to move to areas where there is demand. , weegions like the u. S. Have been seeing things like the closure of plants that are processing different types of headlines. Causing however, a lot of the data we are seeing, there is absolutely no shortage of any beef or proteins coming in the u. S. There is some structural inefficiencies in the supply chain of moving products that were meant to go to restaurants, to go into the retail markets. To look at the supply of how much beef and chicken is sitting in storage in the United States is at alltime highs. While there are these shutdowns that are causing certain cuts of beef are at alltime highs right now. We should start to see stock coming out of cold storage for that and slaughter houses are obviously not purchasing livestock and cattle from farmers. So farmers are hurting because they are sitting on livestock and livestock futures prices have gone down, in fact. Theres also some price dislocation. Isis this idea that there potentially a shortage in the u. S. Is not correct. Now in other parts of the world, there are some serious potential shortages are occurring because of what i mentioned, which is the calories are not even being produced in local countries and those countries themselves are facing supplyside issues. Regions like east africa, south asia. You are having some real issues there in terms of potential food shortages. I think the u. S. , it is largely in the clear. Indicate inventories that. November, we were talking about these prepandemic concerns like swine fluid impacting supply and parts of the world, of pork prices for example. Im wondering once we get to the recovery period, how much of a concern is two things one is logistics. The difficulty of getting goods to their end destination. But are you also concerned about the geopolitical overlay . The titfortat between china and its trading partners with regards to its handling of the coronavirus. The australian the Chinese Ambassador to australia recently hinted may the retaliation will be Chinese People wont want australian beef or wine anymore. Are there more complexities going into this now . Sara yeah, theres certainly a lot more complexity but the reality is supply chains we currently have rely on trade relationships to continue to exist. That is in the best interest of places like australia and the United States, as much as it is in the best interest of china in the sense, it is still an issue. Pork prices in places like china are still pretty high. The government has been releasing Strategic Reserves of pork. When you look at protein prices of things like beef and chicken, beef is that really at alltime highs in china. Pricescken, once chicken have declined because a lot of poultry is even in restaurants, three opening led to a vshaped recovery in prices of chicken as well. There are some regions that have excess supply. Regions like the u. S. Are going to have to find markets because the u. S. Always produces way more than it will locally consume. Despite geopolitical tensions, we still have phase one of the trade deal that also needs to be acted upon. While i think there are geopolitical tensions, the reality is these markets need one another and are dependent on one another in ways that are going to be very difficult. Unless you make very deep sacrifices to your local society, whether it is the u. S. Making tough choices and potentially telling farmers they or the Chinese Government saying vice versa. The same for australia. I think while theres a lot of this talk, the reality is the interdependencies that exist are quite deep. It will take some time to change that. Shery they are very intertwined. I spoke earlier today to the chairman of the canadian pork council. He was telling me how interconnected the u. S. And the canadian markets are, but also he was telling me about how farmers, to your point, are suffering because they are sitting on livestock. Take a listen. Wherere are situations euthanizing is being discussed. I know within 20 kilometers of where i am, there is a producer planning to euthanize 3000 little pigs this week. It is a horrific topic and something we dont want to do and we just dont know how else to deal with this because of the Processing Plant challenge. Shery given the reduced capacity and the supply chain disruptions, will we see more of these measures to euthanize livestock . If so, which industries will be hurt the most . Because we have seen, for example, cattle ranchers may have some flexibility when it comes to making their cattle grow and reserving them, putting them aside until they actually do have the capacity. Sara yeah, that is actually a very important nuance. These supply chains look very different for livestock, for cattle versus poultry. Often times, ranchers for cattle are selling to slaughterhouses, they do not own the slaughterhouses. The slaughterhouse shuts down, they sit on the cattle inventory. There is kind of a disconnect. When you look at things like ticket, it tends to be vertically integrated. Meaning those who are raising the chickens are also responsible for the slaughterhouses. You will see slightly different behavior in that. It also depends on the economic wherewithal, because if you are vertically integrated, you have much deeper pockets than if you are kind of a standalone farmer that is dependent on a single stream of income. It is going to be one of those scenarios where the smaller you are, the more painful this will be because the less likely you will have alternative options and optionality about what to do. Unfortunately be the asmsame in Fresh Produce as well. Smaller farmers in the northeast that were dependent on their incomes from selling to restaurants mostly in places like new york city, etc. , they could completely go out of business if we dont find new outlets and new markets for them. Most of them dont have a connection to the retail world to even think about how to make sure that supply is not lost. The smaller you are, the more difficult it is. The bigger you are, the more mechanisms there are in place to help you navigate money orders. Seen in the u. S. , we have corn prices plummet, following energy prices. Just explained to us how the plunging energy and gasoline prices is compounding the problems for these farmers when it comes to their commodities . Sara this is the, what i call the ag Energy Conundrum. 40 of corn in the United States goes into producing ethanol which competes essentially with regular gasoline. One of the things you have seen with crude oil prices plummeting is just the shutdown of ethanol plants, because ethanol is not competitive. You have excessive amounts of corn. That is in the u. S. Sow in brazil, brazils corn i sugarcane. We see that in the form of excess amounts of sugarcane supply which we estimate is over one million acres of sugarcane one million hackers of unneeded sugarcane might be in the market. That translates to 71 million tons. Very large numbers. In southeast asia, the same equivalent of the ag Energy Conundrum is in things like palm oil which has ties to biodiesel. Biodiesel programs in places like malaysia, indonesia and india. You have Vegetable Oil prices that are linked to crude oil prices. Weirdxities and these relationships that agriculture has to so many Different Industries are being exposed in ways that most people probably never would have thought of before. Ill away say i never see people talk about who the way i have today. It is the basics, but we have really theres an intertwined relationship that exists, especially in these three core areas. Corn in the u. S. , sugarcane in brazil, and then palm oil which then gets linked to soybean oil into southeast asia. Fori we could have you on hours. Thank you for joining us. Great to talk to you, sara menker. Coming up next, the coronavirus. The longheld goal of 2 inflation as the bank of japan wrenches it up stimulus to keep the economy from collapse. We will get a wrap from that and other centralbank action expected this week. This is bloomberg. Shery bank of japan governor has made it clear that they are pulling out all the stops the shore up the economy as the coronavirus starts undermining the tight labor market. Whateen hays is here with kuroda had to say and look ahead of japans latest job numbers that are out in less than one hour. What is the boj signaling right now . Kathleen this isr iding to the rescue. This is all about fighting off the impact, the severity of the coronavirus crisis. What it is doing to japans economy, what it could do if increasing steps are not taken. We are going to buy bonds, japanese government bonds without limits. We are going to buy corporate bonds. This is what the boj, this is what kuroda stressed yesterday. He was what he said in the press conference after the policy decision. Weve implemented additional easing measures today as we see japans economy remaining in the severe state for some time. And as the price of momentum has been lost for now. Kathleen of course, to a certain extent, governor kuroda perhaps has anticipated you can have already been buying bonds without limit almost because he of the ability to buy 80 trillion in a years time. In april, only 14 trillion. He did say that the purchase by the bank of japan could exceed ¥80 trillion. I think he wanted to say we will do whatever we have to do. There was price momentum was lost. What they can do to shore up the economy. The idea that even 2 inflation is something he is not stressing. He even said this is not going to be part of his legacy getting to that 2 target whenever he does that as governor. What kind of momentum or loss of momentum are we expecting when we see the labor market numbers today . Kathleen our Bloomberg Economics team is pretty worried we will see let employment rate. Social distancing, they point in japan andeps tokyo will probably be seen in these numbers. For unemployment is 2. 4 . Excuse me, 2. 5 . That would be up from 2. 4 . Bloomberg economics sees 2. 6 . For the jobs to applicant ratio. How many jobs for people who need them are there. That is going to fall from Something Like 1. 3 . That would get peoples attention. In april, they are saying things could be even worse when the state of emergency came into effect. When companies see that, they might be less inclined to give the temporary workers permanent jobs in april and beyond and we will see that perhaps reflected as well. Haidi our Global Economics and policy editor Kathleen Hays with a preview of what we are expecting today and this week. Withn australias failures more planes added to the market at a time where aircraft makers are already struggling to sell them off. We have that story next. This is bloomberg. Shery a quick check of the latest business flash headlines. Demotedas said to have over a scandal involving a social media influencer. Alibaba took away a years of away from thetook board. He was demoted to Vice President from senior Vice President. He was once regarded as the frontrunner to succeed the ceo. Chinas largest listed homebuilders says First Quarter earnings rose 4 from a year ago even as the coronavirus rattled the sector. Rosencome for three months to 170 6 million while revenue remained steady. Chinas lockdown could affect earnings for up to two years. A unit of chinas group is suing a Global Investment firm to force the south Korean Company to complete a 5. 8 billion dollar luxury hotel buyout. It claims it is reneging on the and because of unfavorable financing caused by the coronavirus pandemic. The deal was due to close on thel 17 and mirae has asked beijingbased insurer for more time. Haidi boeing shares were listed in late trade after the playmaker said it would resume production of its South Carolina plant. Thousands of planes are grounded due to the virus pandemic and many more may be added to the market. Carriers like Virgin Australia become insolvent. Georgeet more firm ferguson who is with us on the line. Great to have you. It seems counterintuitive that at times when fleets are grounded around the world that the stock price would pick up with the resumption of a new factory. What is the global glut in really signify Going Forward . George thank you for having me on, first. We are looking at airlines around the world that are flying 50 percent, 60 or 70 of their schedule last year. We are trying to figure out the longterm demand for air travel. Really hard to figure out with the virus if you dont have a treatment or a vaccine. We think this year could see up to 50 less flying by most airlines around the world. Weve got double the number of airplanes than the need right now. Those were probably surplus for two or three years, not the 50 level but something less than that for the next bunch of years. When it comes to Virgin Australia itself, what are the profits for the company now that it has gone into voluntary administration . George typically, it gets pretty difficult once you put a company into that kind of position. Othereard discussions of parties potentially going to be interested in it. It is hard for me to see anybody wanting to jump in to the Airline Business right now, again, given how fluid demand is. I guess i would be a bit surprised if anybody was really willing to buy the rest of the company. If they did, my guess is they would offer a very cheap price. It has to see that to be willing to jump in. Look, theres probably some interesting deals to be had but we dont know what demand will be over the mediumterm. Companies, mayng be ones with pretty strong Balance Sheets, have more flexibly in these environments . George i think you will have to have a pretty deep Balance Sheet as a Leasing Company to even survive the current environment. I definitely think that means they have an advantage here. The smaller Leasing Companies probably have problems financing themselves. If you take too many airplanes back, you will not be able to put profits out. You may be putting on all these losses and that could be quite difficult. Airlines, a lot of the around the world are probably not even paying on their leases and look to get through this really bad period of demand. Haidi our Bloomberg Intelligence senior Global Aerospace and defense analyst george ferguson. Lets see how we are setting up for in this trading session. New zealand seeing trading underway coming back from the public holiday. The company lifting itself out of the stricter phase for restrictions. Some businesses, some nonessential services are allowed to resume. We have seen optimism when it comes to the restarting of the economy. This is how futures are shaping up in new zealand. Wall street getting some support with expectations of a restarting. A big interview later on this morning. Ross mcewan will be along with us in his first interview of the day to talk earnings and the capital raise. Shery good evening. I am shery ahn in new york alongside haidi stroudwatts in sydney. We are counting down to market opens. Welcome to daybreak asia. Our top stories this hour, asian stocks look set for gains after wall street hit a sixweek i. The s p 500 rising to its best close since march 10 on easing lockdowns. Crude fell after the biggest oil etf says it is offloading