To rise. S continue the u. S. Now topping one million american deaths, now surpassing the total suffered in the vietnam war. President trumps top infection expert says the virus is not truly going to go away. Anthony warns any reopening of the economy must be prudent. Breaking news out of south korea right now. We are getting march Industrial Production numbers. When it comes to the month on month figure, a gain of 4. 6 . This was a much bigger than gain then was expected, reversing two months of declines. When it comes to the year on your number for Industrial Production, it is a gross search of 7. 1 percent again. The expectation was at was for a contraction. We have seen the south korean economy really battling the coronavirus pandemic. We had seen First Quarter gdp sinking seeing the biggest drop since the financial crisis back in 2008. It seems that we have a little bit more optimism when it comes to the Industrial Production side of things. We are going to get samsungs final earnings later on. We saw at least in their Industry Semiconductors coming in, beating estimates in the preliminary report. Take a look at what markets are doing at the moment. We are seeing qe Stocks Holding onto a slight gain right there. Remember, he restocks have been on a rally. They are the best performing stocks across the asiapacific since the march low. Seoul futures closing like this. U. S. Futures under a little bit of pressure. We saw the s p 500 lower in the session being led by tech when it comes to those declines. Wti at the moment gaining ground, close to that 13 a barrel level. U. S. Stocks snapped their winning streak but as you can see from this chart in terms of stillvery, they are outperforming their peers. The s p 500 is beating the msci and stoxx 600 since march and now, our next guest sees this continuing. Joining us is a senior portfolio manager, rebecca. Great to have you with us. Do much does this have to with the support we are getting in the u. S. Government, not to mention from the fed . What can we expect more from the fomc meeting this week . Certainlyell, we have gotten a lot, not just here in the u. S. , but globally. That investors are willing to discount a recovery. In 2021, 20 22. The way the market has recovered , we believe we have to be cautious because it could have gotten ahead of itself. Haidi we did get the Consumer Confidence index in the United States dropping to the lowest since 2014, but at the same time, a sector of that index expectation rose. What does this tell you about how long the contraption that we are seeing because of the coronavirus pandemic could last and what would that mean for the markets . That was encouraging, wasnt it, to see expectations rise . On of the things we are keen is the retail earnings are or that will start coming out next month because they are on a different fiscal year and since the consumer is so much a part aredp, certainly, investors willing to discount ahead but until we see a robust resumption in consumer activity, i think it would be difficult to forecast true a true sharp rebound in economic growth. In the retail sector, it supports about one in four jobs in this country and contributes a significant amount to gdp, so when we start seeing some of those Big Box Department stores, electronics retailers, and that sort of thing next month, that is going to be a really important signal as it relates to the resumption of consumer activity. With Consumer Sentiment, consumer behavior, and, you know, the dislocation in the labor market, potentially, you are looking at businesses and jobs that simply do not return. We know that typically, those tend to be the grim reality and periods of high unemployment and recession or depression, so should we be managing our expectations of how sharp how much of a robust recovery we get across Consumer Sentiment and retail spending . Rebecca i think you make a very good point because even if we restart the economy, we already know it is going to occur differently as we move across the country and it is going to occur differently as we move across the industries. If we think of our own workspace, if you go back to work, and instead of having 10 folks in an area, you now have five people. You have to wonder what the implications are there. When they switched to the consumer and you think about, particularly the millennial generation, and younger folks, they do not spend as much on south. They spend more now on golfiential, so travel, simulations, things like that, and you have to wonder, how willing will they be to go to a concert . Theres a lot of unknowns and that is why it is puzzling we have seen this surge back in the market. Have seen a number of asian markets as well bouncing market territory. I am wondering whether you would consider allocations beyond u. S. Equities given that we are expecting to see the earlier and perhaps stronger rebound here in asia. Actually in our longer horizon portfolios added back some emerging markets, japanically in the asia area because you did see economies that had reopened and they experienced a different trajectory than we had here in terms of the virus. We are underweight international. Our longer horizon portfolios, we added emerging asia. Shery much of the market rally comes because of optimism of some economies starting to reopen, but we continue to hear from Health Experts at the coronavirus movie will not go away anytime soon. It could perhaps be here to stay. We continue to see these restrictions get back in place and then again flareup, so how will that affect Market Sentiment . Well it already be priced in at that point . Rebecca it is hard to say because you hit on a very good point. We are experiencing a Health Crisis. This with come into an economic crisis but the Health Crisis is forefront and we dont have any time soon expected that would suggest that test, ora cure, a whatever, so really, the only mechanism we have used to flatten the curve was social distancing. That being said, it is hard for us to envision us not being range bound. We are expecting we will balance around in that area for a while. We have not been able to hold above 3000, and you would have to see that for quite some time in order for the trend to turn back up because the 200 Day Moving Average is still falling. Those types of things are what everyone is watching, those technical indicators, but it will be hard to push through without some breakthrough on the health front. Shery stocks are not cheap, are they . Rebecca no, and estimates continue to fall. Just this week, we are hearing more and more revisions downward so if you think about where we came into the week, i think consensus for forward numbers was 148, which was down from the one 70s, and even there, we are at 19 to 20 times on a forwardlooking basis and that is well above the fiveyear average, 16. 5 times, and above the longerterm averages, so people are optimistic as it relates to a recovery, but when that recovery occurs, i think it is still a gas from all of us. I mean, how much do you apportion to caution . How much cash would you still be holding onto . Much haven alternatives would you be partitioning onto as well . Rebecca generally speaking, in our balance strategy, shorter horizon portfolios, we have gone underweight equities. We have got more fixed income now than we have had in several years but we are still only a couple of points overweight fixed income, and we do have some cash. As we move further out the curve in terms of our seven year to tenure strategies, we have a little more cash. Wein, just as a buffer, so are sitting sort of in that cautiously optimistic territory but we do have the flexibility, and we would be willing to take more out of the risk bucket, if you will, and flip it into cash or fixed income. If we do see a breakdown either in the technicals or if the Economic Data just continues to deteriorate to a level where we have been, you know, where we know we can be even cautiously optimistic. Riverfront Investment Group senior portfolio manager, rebecca, with us. We are just getting some breaking news when it comes to amc theaters. The Movie Theater company saying really responding to these comments from universal, saying it plans to release more movies to streaming platforms as well as to theaters. Letter tohas sent a the chairman, donald langley, saying the policy affects any and all universal movies going into effect today. Amc saying it will not be playing universal movies Effective Immediately and saying they will not license any universal movies under these terms. They find that categorically and acceptable. We will be getting more updates on that, but certainly, we are seeing that response from amc theaters to the universal policy of releasing its movies to streaming platforms as well as to theaters. Still ahead with samsung results to out shortly. He will be along with us to get his outlook on the chip sector. Coming up next, dr. Anthony fauci says it is inevitable that the virus will return next year. He gives us more on that and his views on how china handled the outbreak. This is bloomberg. You are watching daybreak asia. I am Karina Mitchell with the first word headlines. Saudi arabias foreign reserves plunged in march at the fastest pace in two decades as the oil crash hammers the economy. The follow more than 27 billion took the level to 454 billion dollars, the lowest since 2011. Last week, we said it would draw down reserves by 33 billion for the whole of this year. Brent crude crashed by more than 50 in march and has fallen even further since then. Latest pictures from north korea show the capital, pyongyang, operating apparently normally despite the international speculation about the health of kim jongun. He has not been seen since april 11 and missed celebrations for his grandfathers birthday. Some watchers claim he may be critically ill. A crisis. Ggests meanwhile, some European Countries are moving towards lifting virus restrictions with plans saying shops can reopen on may 11. Cafes and bars will have to wait. Its pain is using curves and says it hopes to return to a new normal. Germany reports the number of new infections fell below 1000 for the first time in five weeks , triggering hopes it will be able to relax curves. U. K. Confirms that more than 161,000 people have now been infected with the coronavirus with over 21,000 deaths. Includeres do not fatalities at care homes amid claims the infection is rampant in some institutions. The government says it is on track to test 100,000 people a day and will soon begin trials to see if they can treat covid19. 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. Haidi. Regrettable milestones have been passed in the u. S. The number of coronavirus cases have passed the one million mark. It means death have topped lives lost in the vietnam war according to data compiled by Johns Hopkins university. Lets get more as we get over to our markets going, Rishaad Salamat it. Even as we continue to see the situation in new york city showing some improvement, these numbers for the u. S. Remain terribly grim. Cases globally topping 3. 1 million. Deaths now passing the 216,000 mark. Severalay be easing in places. That certainly is not the case in the u. S. New york city reporting a decline in the number of people admitted to hospitals for this pandemic. Laying outrew cuomo criteria necessary for certain regions to reopen. The government did say it would be a miracle if new york city and down stay regions reopened in two weeks. New jersey out with a higher increase in coronavirus deaths than new york. That is the first time that has happened, and some at the moment some partsrts have met guidelines with declining cases in 14 days. President trump is planning to order processing plants to remain open. Illnesses in this industry and shifts in demands and restaurants have managed to close or disrupt the supply chain in recent weeks, and of course, economy is taking a devastating toll. Share price plummeting. The automated forecasting in more than 5 billion secondquarter operating loss. That is due to the global car industry, guys. In the meantime, a war of words between beijing and washington goes on unabated. China warning about the repercussions of future infections now. Rishaad absolutely. The Chinese Foreign ministry denouncing the white house trade advisor, Peter Navarro, as a liar. It is the latest volley between the two sides over this outbreak. The spokesman repeated that past rejection of Peter Navarros claims that the chinese side have held back supplies of vital personal protective equipment amid this pandemic, and of course, navarro has always been in the crosshairs of the chinese. He did write a book before he actually before it became a trade advisor. Confronting the dragon. Aina focuses on avoiding devastating second wave of infections. It is returning we have compulsory face masks, being deployed right across the nation. Chinese scientists did say the thenavirus adding to growing consensus that the pathogen will likely perhaps like the flues, does. That is largely because it infects some people without causing obvious symptoms such as a fever. Asymptomatic carriers and it makes it hard to contain transmission as they can spread the virus without knowing it. How is japan looking . They are entering golden week, but lots of restrictions in place when it comes to movement. Began tosome countries relax. Certainly not the case at the moment in japan with citizens being asked to hunker down in what is the busiest travel season of the year, exactly when we have the chinese new year, also seeing china have the worst of it as well. We have got Airlines Cutting flights. Local governments saying tourists should they away, and families have to cancel travel plans as well. According to a survey, we have got average spending during this extended break down by about 216 u. S. Dollars, less than half the spending during what we saw in the 10 day holiday last year. It is set to end along with that holiday, golden week, on may 6. An extension is not being rolled down at the moment as well. The government will examine data until the last minute, apparently, and make a decision on that at an appropriate time. What the appropriate time is, that is anyones guess. Shery Bloomberg Markets coanchor, and here in the u. S. , a top Infectious Disease expert says coronavirus is unlikely to disappear. Said it isci critical to maintain a prudent approach to reopening the economy. There is a little bit of remiss they are that people are going to look at when this is all over. Right away, they had said that this was a virus that jumps species in an animal market, and it only goes from animal to human, and there is no evidence whatsoever that it is transmissible from human to human. And if so, very inefficiently. That before, it was clear there was human to human transmissibility and china. Now, when we look at it retrospectively, not only was it bad for the rest of the world, but they hurt themselves because what they did is soon after the realization that there was this new infection, and to their credit, they put the sequence up on a public website very quickly. What they also did is by not letting their own Health Authorities know that there was transmission from persontoperson, they held Something Like a 40,000 Person Block Party in wuhan, which is the worst possible thing you can do, is to have a congregation as people when you have a virus circulating that has a high degree of transmissibility. Fauci, 56,000 americans have died from this. What is the latest, in your projections, of what the likely death toll will be based on all the modeling that you are now looking at . Dr. Fauci david, as i have often said, although models are helpful, they are only as good as the assumptions he put into the model, and often, you can be misled, as often as you can be helped. At 55,000. We are the model now has been upgraded to, say, instead of 60,000, it will probably be 70 plus thousand. Again, that is an assumption, and the assumption is based on how you respond, and here is what can determine how many deaths we have. As we try, and hopefully, everyone does it according to the guidelines for opening america again, which were carefully designed, and which i played a role in making the very conservative and very careful if, as we open up the country, economically and otherwise, if we have the capability to implement well when new cases occur, which they will there is no doubt that they will, as you try and relax mitigation if we have the capability of identifying, isolating, and Contact Tracing in a highly effective and efficient way, then the numbers will stay low. It may be 80,000, 70 thousand, like the model said. If we are unsuccessful or up,aturely tried to open and we have additional outbreaks that are out of control, it could be much more than that. It could be a rebound to get us right back in the same boat that we were in a few weeks ago. That is why we have really got to be careful, and very circumspect, as we go from a lockdown to a gradual rolling reentry into some sort of normality. Haidi that was the director of the National Institute of allergy and Infectious Diseases. Dr. Anthony r. G. Speaking to david rubenstein. You can get a roundup of all the stories you need to know in todays edition of daybreak. You are and, if bloomberg subscriber, on dayb , on the terminal. It is on the mobile in the bloomberg anywhere app. You can tailor those suggestions to what you care about. This is bloomberg. Haidi lets take a look at how we are setting up for trading. New zealand pretty much flat. Really struggling to find election in the session despite trade numbers that were pretty robust. Came through for the month of march. The country of course getting out of the most strict stage of its this is what it looks like when it comes to seoul futures. We are seeing japanese markets closed as well. Session isnikkei trading. Wti rebounding in the asian session. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Karina this is daybreak asia. I am Karina Mitchell with the first word headlines. The Federal Reserve has kicked off its latest meeting i made an economy and labor market that are freefalling in the worst crisis since the great depression. Members gathered against the backdrops of dismal data with more than 26 million americans applying for Unemployment Benefits and survivors triggered business and social lockdowns. Retail sales have dropped at a record pace while home sales plunged. Cases of coronavirus in the u. S. Rose two point 5 from the day before, taking the overall total above one million. That is higher than mondays new infection rate but below the average daily increase over the past week. 3. 7 to just over 57,000, surpassing the number of fatalities suffered in the vietnam war. New york city reported a decline in hospitalizations. Scientists in china say covid19 is probably here to stay and will return in seasonal worms like lesser flu infections. Researchers say it is unlikely the new virus will disappear the 17 years ago as the asymptomatic effects make it hard to contain transmission. Beijing is lashing out at criticism from Peter Navarro, who said china china hid the truth. Navarro is always telling lies. He has no credibility. What he is saying is nothing but lies and fallacies, completely. Japan is entering golden week under a state of emergency and what is generally the busiest traveling problem of the year. Tauruss being urged to stay home. Average spending is expected to be less than half of what usually is during the time daybreak. Critics say the abe government acted too slowly at the start of the virus crisis. 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. Are awaiting the final First Quarter results. Lets get some preview analysis from seoul. The korea head of global investment. What is really interesting is we are seeing the sort of outperformance or rebounding south korean stocks. Sk hynix and samsung have not been among them. Is this surprising and do you expect to see the resilience when it comes to demand to continue after the pandemic . Yes, i think that if you look at the numbers, clearly, it is much better than expected, if you look at the sales numbers. It is coming at around 55 trillion, which is about 8 decline from the previous quarters. It is up about 5 , and if you look at the operating profits, its about 6. 4 trillion, which is a 10 drop on the previous quarter, but it is rising two point 7 , so the key question is what is going to happen in the Second Quarter with all this pandemic drop that is happening in global scales. In the u. S. Or various other countries in europe, what the numbers look like in the future. However, we think the secondquarter earnings will not to thebad relative global scale of drop in terms of economic growth. The reason for that is because there is a replacement cycle for Cloud Companies in north america, and also, chinese Cloud Companies, strong preference for the chip side. All being said, yes, the numbers are not going to be looking good for the Second Quarter, but when you look at it on a relative basis for the other competitors, the members should look quite reasonably ok. That the shale Price Performance of Samsung Electronics should continue to be better than other competitors. One about putting out consumer devices, electronics, and mobile demand . Do you expect to see weakness there . Dr. Fauci a lot of people are concerned about the hint of a sharp drop for demand. Clearly, the launches were kind of delayed for most of the countries because of the covid19 impact. However, if economy starts to reopen, starting sometime in summer, or probably late june, the pentup demand should accelerate, and also, if you look at a lot of the announcement that is made by u. S. And china, they are talking about the investment cycle. They are going to expect to spend a lot of money in terms of infrastructure related to 5g. If that is the case, we think the Strong Demand could pick up at around the summertime of this year, and therefore, we think that the thirdquarter numbers were looking even better. I think the concern is what happens after that, whether or not there will be a sharp drop or how lending of the demand after these pentup demands were pushed through the Third Quarter, so you think that in terms of the shale Price Performance or the earnings, it looks good probably until the end of the Third Quarter coming out. How much of chinas demand when it comes to building their infrastructure for 5g will turn towards samsung and not towards their own domestic Equipment Companies . We are seeing more nationalistic feelings around the world, especially with china trying to really support their own businesses. Dr. Fauci correct correct. I think that has always been a concern. If you look at the handset business, they are used to produce a huge amount of handsets in china, but now, they produce zero. In terms of the market share, it is as high as 20 domestic but it fell to less than 1 over the period of time so i think people are concerned about that. It happened related to the memory chip side because china is really pushing through the 5g. However, as you know, there is a version regarding china finishing products at this point in time because of the covid19 issues, so credibility is very important. If that is the case, the chinese cannot just use the chinese companies. But also try to use Korean Companies as well. I think that also, Korean Companies can use that as a u. S. Age to sell in the market share related to green markets and he was arriving in. And, how they dealt with in terms of the last several months. Of korea ase image well as. There is concern about that. Chinas government trying to favor the chinese companies, but nevertheless, we think that the level of that negative miss will not be as much as what we saw in china. That, when you say perhaps, south Korean Companies, including samsung, could see an upside, more market share, in countries like the u. S. Or perhaps even in different parts of the world, are those expectations where you are seeing order volumes rising when you check their supply chains, and what sort of demand is out there at the moment . Clearly, we are seeing that. If we checked the supply chains, higher volumeng in april to june, and i think suppliers are happier with that, even the Semiconductor Parts producers are all talking about that. I think theres also concern about what happens in july and september. Clearly, there is a science that the market share is gaining, not just the semiconductor side, but various other Manufacturing Industries all throughout korean to thees, including cars biotech related industries, so we think that there is a clear movement in terms of the Corporate Image about korea improving because of this covid19 pandemic. Haidi what does it mean for the supply side . We have in the data that came out earlier this hour, saying that chip production was up 45 month on month. That, right i think now, the inventory levels are rising because i think the pentup demand, people are waiting for that to happen, the pentup demand sales to happen in the second half of this year, so it seems the shipment, we are not really seeing any drop related to the covid19. The question mark is how strong the recovery is coming through, currently, the price is remaining fairly strong so the question mark is whether or not cannot be sustained in the future . In terms of the growth side, we think that it is reasonably good despite the covid19 concern and the sales of the handsets are really down quite a bit in the Second Quarter. Now is the concern right what it is going to look like in the Third Quarter in terms of the demand side. Thank you very much for joining us today. Head of global investment. We will have more perspective on samsung earnings later with the semiconductor analyst. We have some other big guests also coming up today executivean chairman, bnp paribass ceo, and a managing partner. This is bloomberg. Haidi Mizuho Securities asia says government ownership of many of asias oil and Gas Companies mean they are in a good position to ride out the collapsing oil prices. Lets get more from the Mizuho Securities asia head of fixedincome research. Great to have you with us. Give us a little bit more perspective of what asia Energy Companies are looking at as we see the collapse in oil prices. How exposed are they, and what about the Smaller Private Companies . Of, i guess, the impact of oil prices on the sector in asia, it seems very bifurcated paired on the one part, you have the large oil and gas producers. They have solid access to funding, solid Balance Sheet. I think they have got enough liquidity and flexibility to ride through this period of weaker oil prices. On the other hand, you have the producers that are far more vulnerable. They are starting to reflect some of that stress as well. I guess from a regional perspective, it is important to take a step back and say asia is an importer of oil. Though oil prices are not a bad thing for the region, certainly when it comes to the big state backed oil producers, while their standalone fundamentals might suffer. The ability of the governments my improve because of oil prices. When you are advising investors, would you advise them to go into energy bonds were stay away given that you really have no grasp of what is going to happen to the price of oil Going Forward . Mark our view in the oil center is similar to what we are seeing in the broader market. We think there is value in the sector but we think the value is with a better quality players. We have that flex ability and Balance Sheet strength to see them through this crisis, however long it goes on. This environment, in terms of monetary policy, in terms of the market dynamics, is ever evolving. How are you strategizing given we are getting more and more qe, more and more Corporate Bond creeping, the kind of looming possibility of debt monetization in more and more markets as well . Mark its obviously an unprecedented time. Ist we are telling investors it is a tugofwar between unprecedented stimulus in the markets, a huge amount of liquidity, which is naturally positive for asset prices, but also deteriorating fundamentals. We think the right strategy is to buy credit. We think there is value in credit. We think that on a market wide perspective, credit spreads are still attractive. But ultimately, we think that, again, you should go up in quality and make sure you are, i guess, involved in issuers and bonds, bonds from issuers that have that flexibility to see it through to the recovery. Principleur general is to buy Investment Grade bonds, be more cautious in the highyield bonds, and ultimately, that will be a successful investment strategy, however long the crisis goes on for, which is uncertain at the moment. I want to jump in and bring breaking news crossing the bloomberg. We have been waiting in the samsung First Quarter consolidated earnings that have come through. The final earnings, consolidated won, of 55. 3 3 trillion consolidated operating profit coming in at 6. 4 5 trillion won, and netnet number, 4. 8 9 trillion won, and we have been expecting a pretty robust report out of samsung as chipmakers have riding the surge in demand along with online tech and everything we have seen with the pandemic shutdown so far this quarter. We had a pretty good indication and so, we are starting to see these numbers come through when it comes to samsung as well. We will bring you more details as they get to us, but lets get back to our conversation. Mark, what opportunities are you looking for in terms of where you are seeing the best value across graphics, across geographies . Mark i mean, it is in that highquality part of the market. It is state backed issuers from chinese soes, korean sovereigns. You look at the spread levels you are getting in those sorts of sectors. It is high by historical standards. It is in an environment with an unprecedented amount of stimulus and liquidity being thrown at it. You know, we think those bonds are very well placed. They must become the quasi riskfree assets. We are in this low yield environment where investors will be looking for safe haven. Spaces,sian credit highgrade chinese, highgrade korean they offer a lot of value. Shery where are the weakest quality issuers . I guess each sector has them, but given where oil prices are, we touched on the fact that some of these smaller, independent oil ducers are on silly obviously among the more vulnerable. The high cost of production. They are the ones that are they may well end up being very if we do get a vshaped economic recovery. As you alluded to previously, there is no certainty of that, and that is where we see the vulnerabilities live. Haidi when it comes to borrowing prospects for these companies, how available is credit, given that the cash crunch that we saw during the selloff and uncertainty during the pandemic was huge. How available is credit out there in asia . Mark it is actually pretty good at the moment. Many issues have the benefit of being able to borrow in the local currency market or the local currency bonds here also the u. S. Dollar bond market. And there is a number of avenues for them. Going back to some of our preferred pix, it is the government owned, state owned issuers which we think are best placed when it comes to availability of credit. They are the ones who have very, very good access to bank credit if required, but in general, i would say access to those, there is a number of markets. We have seen a few issuers come to the equity market for funding. I think asian issuers are generally in a reasonable space when it comes to liquidity. Mark reade, thank you very much. Samsung final quarter earnings. We are seeing the secondquarter earnings. First quarter consolidated net coming in at 4. 8 9 trillion won. Secondquarter earnings may impact ofcause of the the virus on demand. When it comes to Second Quarter as well, we could see demand impact. Also, they are saying they see stable server and pc dram demand in the Second Quarter. Of course, we have seen more people working remotely. Cloud sales really being boosted, and chipped demand being higher. Now, samsung saying that uncertainties on the virus will persist in the second half. We will have more perspective on samsung earnings later with hannah financial, investment semiconductor analyst. Plenty more to come. This is bloomberg. Haidi a quick check of the latest business flash headlines for the virus devastated the travel industry and British Airways owner says hedging writeoffs have contributed to a First Quarter loss. That will mean a deep restructuring with the loss of about 12,000 jobs, 30 of the groups workforce. Iag is forecasting a secondquarter loss that he says may be significantly worse than the 580 million shortfall in march. 737 aircraft are expected to remain grounded until at least august because of ongoing Software Issues. The report also says the delay could be extended further. Southwest airlines is the biggest operator of the max globally and it has removed the plane from its schedule until november. The wall street journal reports boeing faces further criminal and civil scrutiny. A 5 billioncasted loss in the Second Quarter as the coronavirus delivers the devastating blow to the Automotive Industry around the world. The Company Expects a significant but the line in every decline in every region. Shares slid in after hours trade. Uber is losing another senior executive. Isef Technology Officer stepping down after seven years with uber suffering plunging traveled demand amid the maynavirus, and the company be discussing job cuts of as much as 20 , which would be more than 5000 people. Uber declined to comment on that report. It is looking at all post virus scenarios. Shery lets get you a quick check on how markets are trading at the moment. Kiwi stocks gaining ground, rising for a second consecutive session, the best performing stock market across the asiapacific since march lows. Take a look at how australia futures are trading at the moment. We are expecting a First Quarter cpi Inflation Numbers later today. That is expected to hit the rbas 2 to 3 mediumterm target ban, but of course, we continue to struggle with this inflationary pressures across the economy. Nikkei futures not doing much. We have the japanese yen a little bit stronger, trading at that 100 six level. Of course, japan away today on holiday. Coming up in the next hour, fitch ratings, ahead of greater be discussingl banks. We also have 111. Com executive turkmen. 11. Coms executive chairman. First quarter consolidated net. Secondquarter smartphones and tv profits could decline significantly. Of course, we do have the impact of the coronavirus pandemic. Mobile dram demand could soften in the Second Quarter as well. They will address memory market changes through flexible spending. They are saying that mobile market uncertainty will remain high, this after First Quarter earnings just reinstated the strength of their semiconductors and dram business. We will discuss all of that as we have the market open in south korea and australia. This is bloomberg. Good evening. Australia and south korea have just opened for trade. Our top stories, asian markets faced an uncertain day as Consumer Confidence undermined the new york session. Waters. Rus muddies the infection rises around the world with the u. S. Topping one million american deaths. Surpasses the number of total sufferers in the vietnam war. The virus is weakening global demand. A mixed session in the markets. Quiet in japan. Japan closed for the holiday. Stocks creeping online in the australian session one quarter of 1 up. Inflation numbers out of australia later today. A bit of an upside after the previous session. Mixedtreet directionless throughout the day before ending lower. Competing signals about a potential reopening and the milestone when it comes to case numbers passing one billion in u. S. Weighing on sentiment. Aussie dollar coming under pressure despite the u. S. Dollar being lower against the peers. Ozzie struggling to go higher than the 65 it has been stuck at given the rba policy stats in view. Gains in new zealand, one quarter of 1 after trade numbers came in positive all in all. Shery lets look at korea markets. Upside for the kospi gaining 2 10 of 1 . This despite the fact we have pressure from samsung the biggest stock of the index. Losing ground. They are warning of possible weakness in the mobile market that could soften going into the year. They expect the memory sector to be robust on server demand. They met the First Quarter wordings earnings estimates. Korean won, a little upside against the u. S. Dollar. Some outflows from the u. S. Dollar way down. We are seeing upside on wti and brent oil. Wti above 30 per barrel. A lot of volatility in the new york session. Aftershocks after the biggest they said they would sell out of future positions. Insight ons get more morganean market with jp Asset Management investment specialist. Janet, stocks were beaten up for so long but the best bounce for the kospi of 30 or more from the low in march. More ee we will see do you think we will see more constructive pricing, particularly as people are saying in the postelection era you still have the same demographic issues and consumption issues and same policies from the government . Korea is interesting to look at right now. From differentit perspectives. In terms of covid, korea has been coming out quite nicely and we see a significant decline in new cases. Election. The recent a landslide victory. So we see a continuation of policy and it is possible the government may push out aggressive [indiscernible] and number three, the korean markets. Right now the valuation is the cheapest among asian still very cheap which should provide fortitude to markets. In terms of stock level, korea [indiscernible] they also havee,. Thers gaining names i think whether youre looking , thesemarket valuation are all very good signs for korea. Janet, how do you feel when it comes to the underperformance we have seen from samsung . One of the worst performers despite the kospi. Samsung says they warn secondquarter earnings could fall on the Pandemic Impact is to see private numbers slide a bit. Would you extend positions on chipmakers . I think there are longterm and shortterm cases. If we look at longterm investment rationale, these are the Global Leaders and we believe there infrastructure trends in member usage so we dont have much concern about longterm case. On valuations or buying and selling its we should focus on longterm. Seen samsung First Quarter chip business operating profits beating estimates. Positive sentiment on the tech sector going to impact your view of the taiwanese market . They are very tech heavy. Take aeneral i think to what we have is uncertainty of ability so if we look at the different sectors, some will be badly received but others are beneficiary in nearterm and longterm and we are [indiscernible] more cloud usage, server systems. We believe there is a structural trend. , very similar to korea. And have Global Leaders especially some of the Companies Still have very solid guidance and painting a robust picture and industries. So overall i think we are still quite comfortable with tech in taiwan. Another trend is the consumption story in china. How do valuations look in the Chinese Market at the moment . Valuations isina still reasonable, unlike some of the asian markets. China has been holding up very well year to date mainly because newer economy and technology software. Overall evaluation is supportive of the earnings trend, specifically if you look at , stayre, health care colts stakeholders. Growth. W impressive overall i think the chinese economy is gradually coming back and consumers can go out and spend. So i think the nearterm outlook is still reasonably healthy. Restrictions what are we expecting in terms of pent up demand later on . Well demand come once the pandemic is over or will social distancing measures affect the economy . Why we areone reason more positive on asia. Thishas been dealing with covid situation relatively comfortably. We are starting to see asian declining new cases. So the pent up demand is quite possible. We have already seen some luxury have recordeda strong sales after opening. The other thing to think about is travel restrictions are still and even if industry lifted, people only want to travel within asia instead of going to the west and europe so i think spending will remain in asia and should provide support to address consumer needs. Two asian consumer needs. This pointere not at be entering into any of the names that would have an upside if we see a lifting of even restrictions . L we have to distinguish. Industries may still take time to fully recover but can growere business partly online can continue to so ia more visible outlook think we actually prefer those with online capabilities and ecommerce, but otherwise we are also interested in commodities in china. Janet, thank you very much for joining us. We have the latest coronavirus case numbers out of china. Casesg, 22 additional april 28, saying 21 of them had been imported from abroad. No new coronavirus deaths. This would be the 11th day of no deaths in china from rotavirus. China also reporting 26 new asymptomatic cases. Chinese experts have said perhaps the virus will not go away, it is here to stay, given these asymptomatic cases. 26 new asymptomatic cases in china. Still ahead, looking at chinas grace wu. Ngs with this is bloomberg. Daybreake watching asia. Cases of coronavirus in the u. S. Rose 2. 5 from the day before, taking the overall total above one million. That is higher than mondays new infection rate but below the daily rate for the week. 57,000 people have died. Surpassing the number of fatalities from the vietnam war. New york city reported a decline in hospitalization. China says in covid19 is probably here to say here to stay. It is unlikely the new virus will disappear like stars. Sars. Beijing is lashing out at criticism from Top White House advisor Peter Navarro who said china hated the truth. The truth. He is always telling lies. He has no credibility. What he says is nothing but lies and fallacies. Completely fictional. Entering golden week under a state of emergency in what is traditionally the biggest travel time of the year. Told tourist are being to stay away an average spending is expected to be less than half of what it was. Critics say the government acted too slowly at the start of the crisis. Some European Countries are moving toward lifting virus restrictions with france saying shops could reopen on may 11. Spain says they hope to return to a new normal in the next two months and germany reports the number of new infections fell below 1000 for the first time in five weeks. They hope they will be able to relax curve. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Shery Samsung Electronics is warning secondquarter earnings may decline as demand falls amid the pandemic. That could trim any gains coming from memory chip demand. Lets bring in Stephen Engle for more. Has anything meaningfully changed for samsung since they announced their earnings . Rest of the world, there is more uncertainty. Two pictures of the giant. Store demand for server chips due to increased work from home and Cloud Computing surge has lifted memory chip prices and prospects shortterm for the chip business. But that is offset by weakness in displays, mobile phones, Consumer Electronics and appliances. Samsung is the largest maker of memory chips, phones, displays, appliances and is probably exposed to the shock around the world. Are getting uncertainty for the First Quarter. That is what they have maintained throughout businesses and will continue to persist into the second half and essay secondquarter earnings may decline as a result of the lower profit in the Second Quarter. They warn these uncertainties will likely persist through 2020. One of the worst divisions was the display business that posted a loss of 290,000,000,001. We got initial results at a similar picture was painted april 7 and it confirms that in the last three weeks we have seen more uncertainty is the pandemic continues. Kospi has been on a tear since midmarch up 30 but samsung has not partaken in the rebound. They have not. And it is reflected in investor concerns by the outlook. Too much reliance on the mobile business, where the other sectors are stagnant or declining and with little visibility Going Forward on global demand. 20 sinceares down the peak in january and the only rally is 1 since april 7 numbers, which were good. 3. 6 percent above estimates but stock has not rallied and this is such a huge component of the kospi index and the kospi has rallied significantly. Two thirds of the members are above the 50 Day Moving Average haveamsung and high next not participated in the rally. We have breaking news. Trump just signed an executive order on Meat Processing plants. We were expecting to see him keep the plants open in the United States but more workers in the factories have fallen ill. We are hearing he has signed an executive order which could set up a showdown between these giant companies and labor unions who are trying to safeguard the health of the workers. Chinese company reporting earnings. And other results to watch out for. This is bloomberg. The earnings season rolls on in china with airlines and oil majors set to report. Sophie is home sophie is in hong kong. Earnings eroded and Free Cash Flow might be pressured given the first tumble we saw in crude. Petra china expected to report losses and refining margins narrowed. Gas sales likely stayed low given the fall in industrial and commercial use. Going forward, unsure if they will be a sustained demand revival as the China Economy adjusts. We are on the lookout for plan to trim Balance Sheets. Longterm investment seem to be intact. We are expecting Chinese Airlines earnings. How bad could they be . The fortunes of these carriers took a turn for the worse at the end of january when the virus spread, resulting in a deep dropoff in passenger traffic. We expect heavy operating losses from the big three airlines. First quarter for china southern, air china and china eastern, we will watch out for guidance on airfares and looking and restoration for how the Summer Season might turn out. We saw a rebound in ticket prices and losses might narrow but it is yet to recover to previrus level, especially with Leisure Travel and hold. Labor holiday is friday and it to see iflitmus test people will travel by road or train. That has surged above 3 million. Lets get a check of the headlines. U. S. Airlines will be allowed to cut more services and delta says it is going to and from massachusetts this month with one passenger and is asking for permission to suspend the flights. Continuing to operate in dallas will harm their future. 737 iss troubled expected to remain grounded till at least august because of Software Issues and reuters says delays could extend further. Southwest is the biggest operator and has removed the plane from the schedule until november. Wall street journal reports boeing faces further criminal scrutiny. British airways owner says iag says it will mean a deep restructuring with the loss of 12,000 jobs. 30 of the workforce. They forecast a secondquarter loss that might be significantly worse than the shortfall through march. Under pressureis as they face a drop in profits while under government expectations to help bailout millions of struggling businesses. This is bloomberg. This is daybreak asia. The fed has opened a meeting amid an economy and labor market that are freefalling in the worst crisis since the great depression. And 26 milliond americans are applying for Unemployment Benefits. Retail sales have dropped and home sales have plunged. From southupper korea has risen 7. 1 on the year. Of the fewne countries not to go into lockdown in march, despite being at the height of infections. Exports were steady but analysts predict worse figures for april. Mike pence is under fire for disregarding virus policy on face masks when visiting a clinic. The cdc recommends masks in public and pence has repeatedly urged americans to follow the guidelines. He was the only person without a mask at the mayo clinic. He says he is regularly tested and does not have the virus. Latest pictures from north korea show the capital operating the rumorsspite about kim jongun. He has not been seen in public since april 11. Some watchers claim he might be critically ill. Korea says nothing suggests a crisis. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Shery lets get you a check on markets. We are seeing brought upside across asia, japan away on holiday. Kiwi stocks reversing two sessions of gains. Kiwi stocks down 4 10 of 1 . This coming in a time where we are getting data out of south korea. The kospi up half of a percent. Industrial productions beating estimates. Samsung at the moment is losing ground. Australia, weto are seeing an upside with energy and financials. Lets turn to china. Lenders likely see and performing incoming surge of bad debt. Pressure could chinese banks face, given that we are coming out of the pandemic and consumers have taken a big hit . Bank expect the chinese will stay pressured because fitch currently estimates chinas gdp will fall to 0. 7 before recovering next year. Economic forecasts are evolving. The are contingent upon duration of disruptions domestically and abroad. In terms of reported numbers we the seen, not much, because pandemic, even though it started in january and banks have expressed deterioration in january and february but some of them have said they have largely the fact there are various grants that have been such as liquidity waivers,nd interest t means how bad could it to not to be . Cards, weme to credit have seen most banks in china, it rose. Done some analysis to try to estimate what the impact we knew the potential rise in npl could our ratedo 3. 5 for from 1. 5 at the end of last year june. Loans could see npls rise as high as 5 . Are we seeing more transparency when it comes to bad loans . Efforts in theen past couple years to improve some of the impairment at ition and we look that has improved for many of the banks in the last couple years. Theextent to which how result ine may relaxed npl recognition, we expect the measures to be temporary and would not necessarily expect banks to report a large rise and overdue gets but they might not reported as overdue in the first place so there could be some lagging indicators. Beijing has talked about opening up the banks and financial sector. You can argue now more than ever they probably need the outsider cash. Have you been concerned about the types of bailouts, particularly for smaller lenders, because are they replacing private shareholders with many who are not in better shape . Challenges of the ,or those smaller institutions it is not new. Problems last year. Backnk the problems trace to the past decade [indiscernible] the way the Business Model worked was on expanding shadow and there was a lot of holding of Wealth Management products so at times we have more volatile market situations, sois also easier to surface we expect it to be challenging for smaller institutions. We expect which support to be given to the rest of the sector is going to differ. , we look atsupport background andd determine how likely the banks will be supported. [indiscernible] we have to remember we are raiding the largest banks. The largest banks. We appreciate your time. Coming up next, more on chinas Bank Earnings ahead. And we will get more on bloomberg television. And ceo ofnk ceo barklay will join us later in the european open. Gavext, the virus pandemic china a further boost. The cofounder of an Online Pharmacy oneonone. Com joins us just ahead. This is bloomberg. With demand for health care and information has boomed during the pandemic and it sets the stage for kelly let us into achieve aims. Shanghai isow from the cofounder and executive 11. Com. N of 1 other side ofthe the pandemic, are you seeing similar numbers of demand for your service . Yes. They found [indiscernible] packed withre still patients and people were afraid of going to the hospital. We were theutbreak first to launch the free online consultation in an effort to alleviate pressure of overburdened hospitals. Our doctors worked day and night provide perto dr. Per day. Surge of patients with diabetes, asthma, cardiovascular patients so that freeed and we launched Refill Services on the platform. Received up permit and were able to deliver drugs to users even at the epicenter during the lockdown. The keyword search masks andere face rubbing alcohol rose. New users worst closely with our companies worked closely with our companies [indiscernible] do you expect that the way people treat health and seek Health Advice and pharmaceutical dispensary will be permanently changed . Do you see that in terms of the reluctance of going to hospitals . Necessarilyina, not the easiest places to access any way. Do you think this is a permanent change . It will be permanent. The impact is profound and farreaching. Opportunity. Ormous saw the public is turning to online help amid the crisis. Very large number of customers who chose our platform have been outbreakeven when the started to improve. ,he number of users chronicscular will and diseases increased by three times and are all retained. When you talk about the delivery of personal protective equipment and you are delivering them across the world, where do you see the biggest need at this point yvonne need at this point . Everywhere. Certainly when the outbreak was , we delivereda nationwide in china. When the outbreak started to improve, we saw a huge demand and we started to deliver to hospitals in new york, washington state, amazon. Free consultation , people abroad17 with the online hospital. Overseaswe launched service to provide direct delivery of ppe including face equipment forr safety. We delivered to 237 countries across five continents, including the hardest hit. U. K. , japan, italy, spain, United States. When it comes to the Health Sector medicine, it is a tightly regulated market, with good reason, because it directly affects people in their health and safety. How much support have you gotten from the government in allowing these Online Medical services to be performed, even like drug refills to be given out . We see a trend. Online and offline health care are both mainstream. That onlinery sign health care in china makes up for the gaps in the system with and there is growing support from the government. In two months, the chinas government has received five policies within two months all supporting Internet Health care, including the newly released guidance, the promotion of Internet Plus Medicare Insurance , [indiscernible] we believe with the excess for online and offline models during the crisis will have a Lasting Imprint on Chinas Health care system. We are heading in the right direction. I know you have launched the platform to provide ppe outside of china. International ambitions being challenged by the diplomatic row beijing find itself in in terms of the coverup in the beginning and the fights we see it has with other countries at the moment . Technology company. We use technology to enable businesses to better serve customers. Right now in china, where they have the largest Virtual Network serving over 25 thousand pharmacies in china, representing half the market, certainly our first strategy is to further scale up the business. Years we willree still focus basically in china 400,000 who connect hospitals, clinics, hospitals, provide online drug prescriptions and disease management services. Enable pharmaceutical companies to reach more patients across the country. Technology. Re in we will not only boost our own. Fficiency we already global in a small way. We are finding various ways of going global. Thank you very much for joining us. 111 cofounder. Ceo and gtv capping capital managing partner will join us later. This is bloomberg. Lets get you a check of the latest headlines. Starbucks says it has reopened almost all their stores in china but the pandemic is cutting sales in the mainland by up to 25 this fiscal year. Samestore returns fell 10 globally in the Second Quarter. Slightly above forecasts but still slumped by half in china. They say the virus impact on Quarter Sales will be greater. We will have a live interview with the ceo of starbucks at 10 30 p. M. Wednesday home tom hong kong time. That is 10 30 a. M. In new york. Caterpillar is warning that the fallout from the coronavirus will last for some time, announcing First Quarter profits have trailed estimates. They say the current time will caterpillar shelved the traditional fourthyear earnings upendst as construction building and energy. Reliance in industry plans the first and 30 years and looks to pay a debt. The market value will continue the share sale when announces earnings at the end of the month. Announcedmerate has three Fundraising Efforts in recent weeks, including a tie up with facebook. Heres a quick check of the markets. Kospi,orea cost by tess kospi,of south korea upside a 4 10 of 1 . Down toer pressure tenths of 1 . Industrial production number out of south korea beating estimates. Investors staying in expansionary territory. Asx 200 gaining to tenths of 1 . Energy and financials leading the gains. Australian First Quarter cpi numbers later today. Watch out for that. Kiwi stocks reversing two sessions of gains to fall. Season,o with earnings centralbank decisions. Analystsing and most expecting minimal change on the front. In the next hour we will have an lie. View with cg our coverage will continue as we look ahead to trade in shanghai and hong kong. Standby for Bloomberg Markets china open. This is bloomberg. These days staying connected is more important than ever. So were working 24 7 to maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. It is 9 00 a. M. In beijing, shanghai and singapore. Welcome to Bloomberg Markets china open. Im tim mckenzie. Tom mackenzie. David im david ingles. Lets get you top stories today. Samsung first and foremost. Final results confirm a beat in the First Quarter with server trip holding up, but the company sees a decline ahead as the virus weakens other markets
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