But says ridehailing bookings fell for the First Time Ever last quarter. Shares rise on signs that it is emerging from the virus slowdown. Take a look at how we are setting up when it comes to the final trading session of the week in asia. U. S. Futures flat after we saw gains on wall street. Despite those historically high unemployment and jobless levels that we are still seeing in the u. S. , there is some sort of consensus among Market Participants that the worst may the over but we are looking ahead to the optimism of the economy reopening. We are also seeing optimism when it comes to new zealand, this despite the budget deficit numbers that were released earlier from the treasury report. New zealand just emerging from that stated four lockdown with the economy stage four lockdown. Also outlining steps for a gradual return to more normal economic functioning. New zealand on track for an entire week of gains. Definitely the outperform in the region. Ofcould get maybe a gain. 25 . We are getting the rba statement a little bit later on today. And we are seeing some upside when it comes to japanese futures but also downside when it comes to trading in hong kong futures going into that open in hong kong in mainland china, shery. Shery we are getting breaking from another singaporean bank. Ocbc First Quarter net income coming in at 698 million sing dollars. The estimate was for over 900 million sing. This is missing expectations. When it comes to noninterest of 24 it has a fall year on year, coming in at 864 dollars. Ing First Quarter net income missing expectations, coming in at 698 million sing dollars paid we are waiting to see what we will see in terms of Loan Loss Provisions. We have seen rivals put it at one billion sing dollar charge given that they are worried about how nonperforming loans will rise with the global pandemic. All of the three singaporean banks have seen profit declines. Net profits falling. Net income coming in at 698 million sing dollars. As stocks keep climbing higher, we are hearing a lot of debates on whether stocks are still cheap or ahead of themselves. This chart showing mobile dividend yields offering the highest premium over treasuries on the record. A potential vote for cheap but the ceo of Legacy Advisors has a warning about socalled value traps. He joins us from philadelphia. Great to have you with us. How important is it that investors be conscious about certain actors and regions that might look cheap given that they have been most affected by the global shutdown . Here. Appy to be thank you for inviting me. To question really relates the dissonance that i think we are seeing play out across the equity markets, fixed income, and the real economy. Weightedhe headline indices like the s p and the nasdaq rising dramatically from the bottom, but you also are seeing smallcap cap as well as cap weighted indices not rising as much. And derivative bond markets. On bloomberg tv, they were talking about the threat of negative rates and record low rates. You have 30 Million People unemployed. There is dissonance out there in the marketplace so just try to find the value traps if you will and be opportunistic in these sectors that have been hurt by the covid crisis. I think it poses very high risk to investors because there is just a lack of clarity in terms of the first order, second, and tertiary affect of what the damage could be to the Global Economy. Are my standpoint, we planners. We leave that to the ivory tower, wall street prognosticators. Let them worry about the letter shapes of what the recovery can look like, including the swoosh. Our focus is on three things and that is we because we work with very successful, you know, Business Owners and families, we can drive what we call Balance Sheet we can look beyond the Capital Markets, and we can take advantage of things like putting dollars to the clients bottom line. When Interest Rates decline, that present a lot of opportunities to add value to a clients Balance Sheet by shifting assets, as an example. On unemotional decisionmaking framework. Shery where would you shift your assets . Would you stay within the United States . Would you go abroad . Where are you finding opportunities for your clients . Ron two. 5 months ago, it was very hard to find any dislocations. Markets were priced probably to perfection. Find offense to and defense. We are looking all over the world across Asset Classes to play both offense and defense. For some of where some of the opportunities are, the overarching theme is really trying to find the winners and losers. There will be a wide dispersion of winners and losers through this crisis and coming out of the crisis. The secret to success is finding investing in strategies that can capitalize dispersion. Some of the other areas we have invested in and that we like, for example, investmentgrade corporate bonds. Two areas that would put you to sleep just a few months ago, but with the onset of the crisis, those spreads go outputting widely. Very opportunistic interns of carving out in terms of carving out a strategy that can take advantage of spreads that went from 150 basis points to 400 to 500 basis points. Same story. Both of them are headline risk and downgrades, and we think that that is going to continue for the next two years or three years so that volatility presents an opportunity to take advantage of. You talk about the massive amount of stimulus, monetary, and fiscal that we are seeing as being more like life support as opposed to additional stimulus, so how does that play into, you know, the adage of do not fight the fed . This is a trade of expecting them to do evermore. Ron yes. You know, it is easy to call this, on these measures, stimulus, but the patient is somewhat in an artificially induced coma right now, and we are just replacing income with a lot of these programs. What we may see Going Forward are programs that are designed to generate a multiplier affect mso for every dollar fiscal dollar lent, hopefully, you see two or three dollars in terms of the economic impact. I can tell you that the programs that we have in place, which are somewhat like the helicopter money we have seen in the past, that tends to have a different relationship. You put a dollar out there, and you may get 25 to . 30 of growth. We have yet to see a multiplier ite of programs, like a Public Infrastructure program, to incentivize a way to unlock the dramatic increase in savings we have seen. 6 tos have gone from 13 , and that is ultimately a drag on the economy. It creates the paradox. You have to unlock those savings, create incentives to put that capital work in investments but the challenge this crisis will end with science. Until that happens, most stimulus programs will have a challenge. Haidi thank you so much for joining us. Ron, ceo from Legacy Advisors with us. Still to come on daybreak asia , we will get more on business sentiment, exclusively with ubs aipac cohead. Shery some more on those breaking news we got you earlier. Ocbc, the singaporean bank, saying their total cumulative allowances increased by 632 million sing dollars quarter on quarter. Their First Quarter loans ratio coming in at 1. 52 versus 1. 5 year on year. The uncertainty, because of the pandemic raising the ratio to between 2. 5 to 3. 5 have also suspended Share Buyback speed that is very important given banks around the world have been setting aside large buffers against nonperforming loans. We are seeing the same play out with ocbc. They are saying Cost Management will be further tightened. However, they are not really expecting they are not planning on retrenchment. They are expecting a Net Interest Margin compression in subsequent quarters. Of course, we know that that does have a delayed effect when it comes to those rate cuts that we see across the world. Bankan see the singaporean Loan Loss Provisions just continuing to rise ahead of the impact that they are expecting from this global pandemic. Still ahead, japans biggest brokerage posts earnings later friday. We preview nomuras members. Plus, the economic recovery will not be vshaped. Highlights from our interview with the economics professor, next. This is bloomberg. You are watching daybreak asia. The Karina Mitchell at first word headlines. The International Monetary fund said its investment in the morel economy turbulence can be expected. The april outlook sketched out three scenarios for the virus. It staying longer than thought, returning next year, or it would wipe 3 of global gdp. Early sterling rally. N early it has recovered in recent days. It faces further pressure with the bank indicating a bleak forecast for the u. K. Economy. The boe is predicting a 14 contraction this year and as it will act as necessary. Meanwhile, saudi aramco is trying to support oils nascent recovery by raising prices for customers around the world. Documents seen by bloomberg show the company is prepared to lift prices for most of its june shipments while simultaneously cutting output under the opecplus agreement. Riyadh repeated it is ready to do whatever is needed to support prices and maintain market share. 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. Top u. S. And chinese trade officials will speak as early as next week about progress on the implementation of the phase i trade deal. This comes after President Trump threatened to terminate the agreement if beijing was not sticking to the terms. Bloombergs congressional government reporter, emily wilkins, joins us from washington with the details. It is all looking a bit muddy, as we get this to and fro over the origins of the virus. Theres been threats of potentially more tariffs on china from the white house. It will be interesting how these talks go. Emily absolutely. I mean, we have seen a bunch of rising tensions between the u. S. And china because of the coronavirus. Other. Des blaming each both sides trying to say the other one is not handling the situation correct. At one point, there was a question about what would happen with the trade deal. The announcement today that Robert Lighthizer and the chinese vice premier are expected to meet next week and half ahead of schedule, i think that should probably give some idea to how important both of these countries still feel that the trade agreement is even at this point of heightened tensions. Seeing int are we terms of the reopening happening here in the United States . A have seen data leaked from plan on how states should reopen, but the white house does not seem to have shared this with the broader public. Emily absolutely. Too detailed. They said they wanted to leave it more up to governors of various ways to figure out how their state needed to reopen. That is what we have seen these last couple weeks is is individual is individual states saying we will reopen slowly. You have seen other states like today in michigan, he saw the governor go ahead and extend the lockdown period to almost the end of may. The white house is saying they want to leave it in the hands of governors. Meanwhile, the cds these plan that was doubt has very detailed centers,for childcare restaurants, businesses, about how to clean, social distance, keep people safe. You did see today Speaker Nancy Pelosi come out and criticize the white house for not having released that guidance sooner. Shery emily wilkins. Says economies around the world are still in freefall and investors should not expect a vshaped recovery. The economics professor from the New York University stern school of business spoke to bloomberg earlier. My view of the markets are ignoring these numbers that are really awful because there is still a view that while we are in the middle of this severe depression, there will be a vshaped recovery starting in the Third Quarter of this year. Therefore, right now, we are still in a freefall. If you look at earnings some people have 100 earnings per share. Only 20 and people expected by q4, they will go back to what they were at the beginning of the year. 170. It is totally ushaped recovery. They will be back to 140 next year. These valuations dont make sense because the market is pricing in a vshaped recovery while the economy, with the deleveraging, will curve in the corporate sector in the household sector. Everybody has to save more and do less to repair Balance Sheets. Saving more means reducing spending, consumption for households, labor costs for the sector, and less investment by the corporate sector and less residential investment by household sectors. That is a ushaped recovery. Second argument people make in the market as well, with zero policy rates and 10 year bond yields at 0. 6. You can have much higher ratios even if the economy is lousy. Liquidity can sustain markets only for a while. Even if you look at liquidity, if you look at 12 months of earnings yields, right now, it is only 400. 10 year treasuries. During the Global Financial crisis, 600 to 700. Theres uncertainties. No guidance about profits and earnings. You are supposed to have key ratios right now. It does not make any sense. The market has delusion about the shape of the recovery, liquidity. They are creating new accounts and chime to bet on the market. It is not fundamental. I am not sure how many Unemployed People have been participating in this market but i take your point about the shape of the recovery. Talk about that. What is the policy initiative that the come from washington that would make you more hopeful about the future . Nouriel we have had massive monetary stimulus, fiscal stimulus. A fourth round fiscal stimulus. Mix is biasedy towards wall street and not very much towards main street. People are suffering. Households, workers, small and mediumsized enterprises. Wall street is large corporations, large banks, and large financial institutions. If you are looking at what the fed has done, a lot of the backstop is backstop of highly risky. Highyield, commercial paper. Large corporations. A bailout of wall street, while the money going to main street is small. The stock market does not reflect the real economy. Be flushing labor costs. 40 Million People have lost their jobs. They will improve their Balance Sheets, improve, but they will do it at the cost of workers. A decade ago, after the Global Financial crisis, firms stopped hiring people, good wages and good benefits. Hourly workers, contractors, freelancers, you name it. Haidi ab inbev Nouriel Roubini speaking to us. Coming up next, uber says the worst is over for its business after posting its firstever quarterly decline. We get our earnings analysis ahead. This is bloomberg. Shery shares of uber rising after the bell. A rise in ridehailing customers but says the worst appears to be over. Su keenan joins us now. No big surprise that there was a drop off in rides due to the pandemic but investors seem to be looking at the bright side of things. The ceo the ceo su said the worst is over. You are seeing that reflected in after hours trading even though the ridehailing business was down. On the key take away from the Earnings Call was a surge in food delivery sales helped uber offset that decline. Think things will be better Going Forward. These are the numbers that tell the story. The First Quarter ridesharing that is versus an estimate of 10. 68. Uber eats cayman strong. Billion came in strong. 4. 6 8 billion. Back to you. Shery that was su keenan with the latest on the uber earnings. The stock reacted positively. Later on, we will be taking a look at the electric cars seen in china with the founder, chairman, and ceo. He will be joining us at 9 40 hong kong time. Lets get you a quick check of the latest business flash headlines this hour in the meantime. Tesla has a suspended production at its plant in shanghai unexpectedly, bringing manufacturing to a halt. Sources say it told workers to extend the labor day break until saturday although the reason for the pause is not clear. Chinese tech news said it is because of a shortage of parts with a critical piece of equipment needing a fix. Amazon is said to be considering adding to its investment in indias future retail. This as the debt laden retailer battles the cash crunch. Amazon has an indirect state of 1. 3 in future retail. It is an talk with its Parent Company to boost that to as much as 4 . Future retail soared in mumbais session on news of the talks ending a sevenday losing streak. Ify sores 80 soars 80 so far this year. Set ups Companies Platforms to sell their products online. It recently tweeted that april was like black friday traffic every day as businesses looked for ways to stay afloat. Next, signs more stimulus may come from the bank of england as soon as next month with a highlight, our into be with the boe governor, just ahead. This is bloomberg. Haidi we are awaiting japanese data when it comes to cash earnings and households pending numbers to take a look at the yen. The currency has become the bestperforming g10 currency in the year, to date up to percent against the u. S. Dollar and holding pretty steady in the session so far, but in terms of what we are seeing for this friday set up in the asian session, no strong moves either way. We are getting a fifth day of gains when it comes to new zealand. Australia futures looking pretty look atwell as taking a gains of. 2 . Going into a u. S. Session, we will get payrolls numbers. Quite a bit of uncertainty. Karina mitchell with the first word headlines. Karina u. S. Cases of covid19 surged the most in two weeks, rising 2. 5 with deaths topping 75,000. President trump and mike pence say they will be tested daily for the virus after a military staffer at the white house was confirmed positive. Cnn reports the person is in the navy and works in the valet, suggesting positive contact with the president or his family. China and the u. S. Will resume trade talks next week after President Trump said he may cancel januarys phase i deal. The administration indicated it is not happy with pace of beijings u. S. Purchases and that the president says he will terminate the deal if necessary. Be ons vice premier will the call next week along with u. S. Trade representative Robert Lighthizer. North Korean Leader kim jongun has sent a message of support to xi jinping for his handling of the coronavirus pandemic. State media says kim congratulated xi for containing the crisis and controlling the situation. Little is known of the Virus Outbreak in north korea but they have reported new cases and no debts according to state media. The philippines with a pause in Monetary Policy moves. Reductions in rates and the reserve ratio requirement provided sufficient buffers. The governor said another 200 basis point rrr cut is possible and the bank remains ahead of its goal. Bankingthinks the system can absorb as much as 5 in bad loans. 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. We are just getting those numbers out from japan labor cash earnings. Year on year, that number matching expectations. 0. 1 again. Slowing on that 1 gain we saw in the previous month of february. And it comes to real cash earnings, that is a contraction of. 3 , missing expectations of no growth area Household Spending weaker than expected. Slightly better than expected contraction of 6 . Worse,ly, that is far net. 3 was signed february. State of emergency nationwide continues until may 31 although we are hearing some parts of japan could from that earlier. Yen holding pretty steady at that 106 handle. The bank of england says the u. K. Is facing its deepest recession in 300 years. However, governor Andrew Bailey opted against me stimulus. He told bloomberg he is willing to act as necessary, suggesting bond buying could be expanded for as long as needed. We are keeping all options open. I am very clear on that. We are keeping her options open. To my colleagues on the wanting to do more kiwi now, they thought it was a sensible decision to take in our next meeting. We may have some more information. Are we any closer to negative rates or is that just not an option right now . We are not ruling anything out at the moment because it would be unwise of us to rule anything out in terms of responses, so i do not want to say we are nearer to negative rates but we are not ruling anything out. Under what circumstances would we get negative rates . The committee has a long way to go in terms of discussing the negative rate russian, were it to think that is a sensible thing to do. It is a complicated question. You have to view it in the context of the times and the context of the financial structure we have, how the Financial System works, and what will be the consequences of it. We are nowhere near it in that respect. Inyou assume a recovery 2021. Why are you more optimistic and the ecb . Than the ecb . We are all using scenarios. I think all of us are finding that there is a much bigger sort of gap between the judgments and decisions we are having to take and the scenarios of the ecb. It is the first time, really, in any inflation report, we have not published a forecast, as such, so these are very much scenarios to guide us. I was looking at the scenarios the ecb published earlier this find and actually, you can a scenario that underpins our forecast. It sits frankly in the middle ground of what the ecb published. What does it do to your thinking if we have a slowdown that is not as severe this year but then we have a much worse number in 2021 . If there is a second lockdown, for example. We will obviously have to reevaluate. There would be a new scenario in that case area we have a gradual lifting of the lockdown in the Third Quarter of this year. We have a further assumption voluntarily are then quite cautious about the way they reengage. A degree of caution. That pushes the path of our recovery out next year. Obviously, if it evolves in a different way, we will have to come back to that. Is there a risk that this crisis becomes a financial crisis . Obviously. If you go back to the middle of the second half of march, we were looking at very, very severely difficult conditions. Very disorderly markets. We and the other central bank had to step in and we all stepped in in very big ways. A lot of firepower has been brought to bear, closely correlated between the central banks, and it has had an effect. I would say this. I think we are still on very high alert because i will give you an example of what happened in the oil crisis the other day. Price negative. How could this be . Of course, you talked a lot about this. There are all sorts of stories you can tell about how this is idiosyncratic, all sorts of things. I would just caution that, you know, history and i have seen a lot of these bear out we can always tell stories but to dismiss this is the slightly odd idiosyncrasy. Is always one thing you have to have in mind, the canary in the coal mine, which says, actually, there are wider fragilitys we have to accept. It is not because we have a particularly different story about the oil story. It is because it points to the fact that we still have fragile market. England governor Andrew Bailey. Coming up next, we check the outlook when it comes to banks in japan. Global ratings representative will be with us. This is bloomberg. Shery lets get a quick check of the latest business flash headlines. United airlines 2. 5 billion junkbond sale is struggling to gain traction with investors placing orders of a little over half of that so far. Pricing discussions were initially around the range of a 9 yield but that now looks investors have been eager to lend. United bond sales show they have their limits without double digit yields in ironclad collateral. Struggling californian utility pg e has been fined a record 1. 9 billion for its role in some of the worst fires in three and 20he blazes of 2017 18 destroyed thousands of homes and killed more than 100 people. Pg e was penalized for failing to properly maintain and operate power lines. The fires led to an estimated 30 billion in claims against the company, forcing it into bankruptcy. Profit felluarter more than anticipated as Noninterest Income slump and provision for loan losses more than doubled in the coronavirus pandemic. Net income slid 43 from a year earlier to just under 700 million through march. That missed the average estimate of 906 7 million as seen by analysts surveyed by bloomberg. Ocbc joined hear in preparing for joined its peers in preparing for mounting losses. Haidi the full impact of the virus pandemic on Nomura Holdings could be marked by a jump in trading in the last order. Japans biggest brokerage posted fullyear results on friday. Lets check in on the market when it comes to number and the urarall japanese nom and the overall japanese Banking Sector. Is there a chance that trading revenue, as we have seen across some of its peers, could be the saving grace in this set of results . Well, with the market earnings for nomura could be higher. On the other hand, if we talk take the earnings nings as a risk factor , exposed tof nomura the Capital Market conditions. Beyond, in case the our expectations. Makesample, nomura substantial losses, that could be a downward pressure. The of earnings is already incorporated into our rating assessment. And also haidi warnings from the like of j. P. Morgan, for example. Is the risk that that cannot sustained . Chizuru for the mid to longterm, we view the operating environment for the japanese firms continue to be challenging. Because of higher competition in aging society. Is not likenue stable earnings. Nomura is changing its revenue cost structure. Even in the Unfavorable Market conditions. So we think the key for numerous credit isnomuras whether it can accomplish this plan. They already took actions, including overseas operations, such as by focusing on the products of its strength and reducing costs. We think it may take more time to see a result. Accomplishes its plan will make a difference in the future as it can prepare a activity as well as investment and growth opportunities. Shery when it comes to the broader japanese Banking Sector, how difficult will these credit costs be given that they have already been suffering from years of unconventional Monetary Policy . Yes. Ru cost talk about the credit , if we put pressure on the japanese Banking Sector because japanese banks, they are threatened with low profitability in the low interestrate environment and high competition. So this means the banks have less developed costs within their profit. Shery how about the difference between the major banks that we are talking about right now as compared to those smaller regional banks that are really focused on the domestic lending business . Negative impact is different among banks as mentioned depending upon their business portfolio or diversification. Major banks, diversification in business angiography, these factors and geography, these factors mitigate impact on profitability. Regional banks face more downward pressure. There revenue mostly comes from income of domestic lending business and figurative investment. If their credit cost rises, this will more affect regional banks because they have less buffer to observe additional costs. Haidi is there a sense that some of these japanese banks, including nomura, is there a sense that they are going to have to really rethink their strategy . We have seen the impact of social distancing, what it has on facetoface Branch Activities and that has passed through to the drop in product sales, right . Is that going to be an ongoing issue Going Forward . If because of the pandemic, that could be some impact in the retail businesses, but not because of the pandemic. Japanese banks are trying to. Hange their Branch Structure for example, they have more smaller branches, and then, they in some branches. Really cause reduction for japanese banks in the next two or three years. Shery chizuru tateno, thank you very much, of s P Global Ratings paid we will have more on singapore banks with jeffries analyst, krishna, plus more from our exclusive interview with another guest. This is bloomberg. We are all going to be permanently scarred my having lived through this pandemic. This is my first pandemic. I do not really know what i am doing. I am trying to your this out as i go. How soon trying to figure this out as i go. How soon will anyone get on an airplane . Frankly, it could take a year or two years for traffic to return. How soon will anyone stay in a hotel . We have very limited visibility. What will come back first is domestic businesses. How soon will anybody go to a mall . We plan to reopen over 90 of our Starbucks Stores by early june. The fact that these places may be open does not necessarily mean that they will be doing business. Investors in ceos on the challenges of reopening because of the pandemic. The uncertainty weighing on the price of oil as well as Goldman Sachs said crude demand could exceed supply by as early as next month. Others say that swiftly reversing if a second wave of the virus returns. Here is a look at the recent turmoil. Oillack monday, the day prices went negative. Here is how we got there. First, february. The coronavirus shut down most of china. Everyone still expected a vshaped recovery, and most still thought this was just a china story. Towards the end of the month, cases in italy started rising and prices darted to rollover. The ugly march. March 6, prices fall the most since 2008 after saudi arabia and russia were not able to reach a Production Cut deal. Prices today are 10 or more cheaper than prices a year later. Soon after, the who classified covid19 as a pandemic. A little over a week later, the sunday rate cut failed to protect markets are President Trump warns that u. S. Will be fighting the outbreak until august or later. Equities sink and brennan breaks branch breaks below 30. Cases and the death all rise all over europe. California and new york shut down. Craters, storage starts to build. Oil producers call for a joint texas cut. President trump brokers a deal between russia and saudi arabia, amounting to a cut, more than 20 . It is too late. April 20, a day before may, oils futures contracts rolled over to june. If a trader has not already sold the contract, they could be on the hook for taking the physical oil, only this time, there is nowhere to put it. Selling intensified. 40. S. Oil prices hit it is oil in crisis. For more on oil, we are joined by bloombergs market editor, adam haigh. We are seeing oil pairing a second weekly gain as we see the saudi price hike. What are the expectations of what we will see in the Market Dynamic from your . Here . Adam so much rests on the demand side of the equation. As you heard at the end of that clip, it is incredibly uncertain how that plays out. Given the changing dynamics on the supply side, the demand side of the equation for Energy Markets is very uncertain, so the survey session was quite volatile and we did not finish off too low pricewise. We are up about 20 on the wti contract this week, and it continues to be the push and pull between those increases in prices coming from, you know, the saudi side and the curbing of production against the uncharted territory for how the Global Economy comes out of the pandemic and how demand gets restored across some of the largest economies. Of course, theres lots of data now coming out of china which suggests that a lot of production is ramping up again, and in many respects, the economy is moving some way therds where it was before big shot down, but of course, the u. S. Is weeks if not months behind in terms of that and that is the biggest side of the equation from the demand side because the u. S. Being the Worlds Largest economy, of course. Shery what is the latest on the oil glut . We continue to see signs that perhaps the glut is easing, but then you have figures like Standard Chartered coming out and saying you have a surplus averaging 21 Million Barrels per day back in april. The i think that speaks to difficulty that analysts and strategists, not just in Energy Markets, but more broadly across markets, are finding difficult in terms of trying to make an estimate on that. As you say, incremental data points that we get can lead you one way, in your forecast, but next week or next month, you get a different read on it, so it is a hard one to forecast, and i think really, that is one reason why we continue to see this elevated volatility in Energy Markets with that demand side of the equation so uncertain and some of those data points from the supply glut so tricky for people to read. Distribution of estimates, continues to be very wide so you are having quite might volatility in the market. Shery shery what does this mean for Energy Stocks . We saw the Energy Sector leading the gains in the equity markets. What does it mean for asian Energy Stocks . Adam of course, you know, many areas of the energy complex, be it in equities or the debt space, can offer quite considerable value given the movement and prices we have seen in the last two or three months so there are people in the to buildo are happy positions or take new positions and businesses where they can see longterm value, but of course, it is still a significant part of the market. Towhich perhaps will not be ard if Oil Prices Stay down at this level. It is trying to determine where that value is and you could indeed see a bit of theowthrough and some of asian Energy Producers on friday, given the u. S. Moves. Shery adam haigh, thank you. Bloombergs Global Markets editor in sydney. We have special coverage of the oil market later. Join us to hear from industry executives and analysts for a coronavirus special. Saturday morning. Comingome great guests up in the next hour. Ofwill have the ceos various companies. Stick around for that. 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. Swithout even on yoleaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need saving you up to 400 a year. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. Haidi welcome to daybreak asia. On haidi stroudwatts in sydney alongside shery ahn in new york. Australia jumps, open for trade. Top stories this hour, asia facing uncertainty ahead of a u. S. Jobs report that could show a dramatic impact from the coronavirus. Twoyear treasury yields hit record lows. Oil and a wide ride wild ride. Concerns about the glut remain. First quarter profit falls more over thected at otbc coronavirus fallout. Shery lets check markets. The nikkei now coming online, gaining ground more than 1. 5 at the moment. Every sector in the nikkei on the green, led higher by energies and materials, as the japanese yen holds steady. A little weakness right there, ek ofof course after a we significant strength, down from a sevenweek i. Household earnings, Household Spending numbers, both under pressure we did get earnings and Household Spending numbers, both under pressure. We are awaiting april pmi numbers. Afterspi gaining. 8 barely changing in the last session. We are seeing the korean won also accelerating gains accelerant gains against the u. S. Dollar, risk off gains in light of tensions between china and the u. S. Asking korean minister households to increase spending and to keep up investment. We are seeing positivity at the start of the open to trading here in sydney. The asx 200 up 3 . Rba Meeting Minutes we have rba Meeting Minutes to look forward to coming up, and we are also looking at new zealand. When it comes to numbers out of new zealand, the first weekly gain since about february, this despite news from the new zealand treasury, publishing Financial Statements and saying the budget is slumping into deficit territory as a result of virus measures. Of course, the country coming out of that stagefour lockdown. Looking at oil, more volatility of the oil patch, paring the second weekly gain is the global glut overrides the high we are seeing in saudi prices. News out ofing Singapore Airlines right now, saying they expect a material operating loss for the final quarter of the year. They report a net loss for fiscal 20192020. They also say there operating cashless they also say theyir operating cash flows will remain negative. They are seeing reduced cargo flows, but cargo yields will sustain into the First Quarter as well. They say they have seen no obligation to provide capital to virgin australia. Remember, they went into voluntary administration, another collapse of an airline an airline. R of singapore air, saying they may that may needght to modify inflight services, the continuation of the narrative that airlines around the world are suffering with travel limitations, given the coronavirus pandemic around the world. So lets turn to broader markets. We are joined by our bloomberg managing editor, mark cut more. Mark, sustained gains here in the u. S. Equity markets. We have seen more positive sentiment filtering through, given that u. S. And china trade negotiators could be meeting next week or the offshore next week. Alsoffshore yuan was positive. How likely is this to continue through asia, when we have that job number in the u. S. Likely tomorrow . I think it will contain the sentiment we saw in the u. S. A lot of positions have been done already and part of the gains we have seen the past couple of days have been about positions wearing. We have seen bears get squared up, but the yuan has strengthened the past couple of days, enough to provide a little confidence and positive sentiment around the potential for u. S. China trade talks to ease tensions. And we are getting economies start to reopen. Perhaps more exciting than what is happening in america is the large view that it may be premature, some of the reopenings. In europe, where they have a better control of the virus, many Major Economies now have clear, stepbystep reopening plans. There are reasons for happening. I think we will probably stay pretty quite ahead of the big data that you mentioned, but i think it will be slightly positive territory. What are we hearing about a potential doubledip when it comes to equities . Because the consensus seems to be that the worst is pats is past its peak when it comes to the virus. Does that mean gains we have seen equity markets can be maintained . Mark the conviction across markets is definitely very low and there is a big divide about whether we do have a double, whether we go toward those march lows again. Because central actions have done enough to tied us over until we get past virus problems. I am in the camp that we will have the doubledip. But i admit my conviction is dropping all the time. It always pays to be a pessimist. The fact is we have seen extraordinary central bank action, but also a clear signal and clear messaging that they will do whatever it takes and add more stimulus. If it isnt enough to prop up prop prop up markets, who knows what they will do next . Anynt think we have conclusive decision either way just yet. Maybe today it will be decided, maybe the u. S. China trade talks will decided, but at the moment it is still in play in either direction. Udmore, our c Bloomberg Live managing editor. Still to come on daybreak asia, more on the impact of the virus when it comes to business sentiment, exclusively with the ubs Global Health manager, later. Lets go to Karina Mitchell not for first word headlines. Karina thank you. The says its assessment of the Global Economy has worsened since three weeks ago. More turbulence can be expected. The fund sketched out recent scenarios for the virus, sustaining it longer than thought. A lengthier pandemic would wipe 3 off global gdp. Theling, early rally after bank of england signaled could inject more money into the system next month. The Coronavirus Crisis has driven the pound to its lowest level in since 1985, but it is has but has recovered in recent days despite oblique forecast for the u. K. Economy. A 14 contraction is predicted this year. Apartaramco is practice the oil recovery by raising prices for customers around the world. Documents seen by bloomberg show the company is prepared to lift rices foremost shipments, most shipments. Saudi arabia has indicated it will do whatever can to maintain market share and uphold prices. Reductions in rates in the reserve ratio requirements have provided assistant buffers, according to the governor, who says another 200 basis points in rrr cuts are possible and the bank of philippines remains below its goal to take it below 10 by 2023. They think the Banking System can absorb as much is 5 in bad loans. 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. On Karina Mitchell im Karina Mitchell. This is bloomberg. Lets look at stocks, nintendo falling as much as 2. 9 , under pressure. We saw aprs desk abr rising as the company beat quarterly expectations. But at the same time they forecast a weaker current fiscal year under the impact of the coronavirus. Lets take a look at fujifilm. They say they have developed a testing reagent that will automate pcr testing, allowing users to get faster tests test results for coronavirus without needing diagnostic specialists. Haidi we continue to see strength when it comes to anything potentially therapeutic or vaccine related. This any session, down just over 1 , under par underperforming the broader Financial Sector and the asx 200. Mccrory group flashing dividends on the back of the Global Economic shut down that sent impairments at the investment ,ank soaring, including a run and massive Global Infrastructure financing manager there, refraining to provide guidance for 2021, meaning the virus impact means there is on means they are unable to provide any info guidance this year. Stilli had, the impact i had, the impact of the coronavirus on the chinese Film Industry and box office. This is bloomberg. Haidi top u. S. And chinese trade officials will speak as early as next week on the phase one trade deal. This comes as threat as President Trump threatened to kill the agreement if beijing didnt stick to the terms. We talked about the negotiations for phase one and it being signed. What do we expect out of these talks . Whetherig question is an escalation of tensions is imminent. The upcoming president ial election has increased that risk, the president blaming china of for the outbreak blaming china for the outbreak and previously threatening tariffs. Whatys china has to buy they promised and if they dont, they will terminate the deal. But the reality is that when the trade war started, the economy was going strong. It would be much harder now for trump to justify more terrace, and this justify more tariffs politically and economically. Trade negotiators could speak as early as next week. First timebe the they have officially spoken about the agreement since it was signed in january, before the coronavirus pandemic hit the economy. It calls for Robert Lighthizer and the chinese to meet every six months. Be aheads call will of schedule, at least they are having discussions. Shery how far behind is china and its commitments . Agreed to buy an additional two hundred billion dollars of goods and services from the u. S. Over two years compared to 2017, an additional 200 billion of u. S. Goods. Purchases have been significantly behind the pace needed to reach the target for the first year, 76. 7 billion increase. Declined inhe u. S. The first six month of 2020 compared to eight year ago the first months of 2020 compared to a year ago. Purchases from china greatly improved in march, but the ,hortfall remains very large and the shortfall is across all categories. On the bright side, our sources say beijings plan is to show it is working to meet its commitment despite delays caused by the virus. Be instance, there could enforcement of international of intellectual property protection. Marchas postponed from until later this month, and they are working to fulfill that commitment. Shery talking to correspondent selina wang in beijing. The qualcomm ceo says tensions between beijing and washington will not hit the Company Bottom line. In an interview with david rubenstein, the ceo says he still sees tremendous stability. Last 10 years, a lot of infrastructure providers who would have possibly who would have classically been part of the western ecosystem consolidated into a smaller number, now you just have ericsson and nokia. There will be a change in that market when things go virtual, which means i Key Technology that you have, your chief information officer, that ecosystem of providers will be able to produce equipment as well, but it will take time. So that market will change, but it has to do with some of the moves that happened over the last 10 years. David the u. S. China relationship is always complicated. Whenever you have two Major Economies in the history of the world, they spar. We thought we had resolved a lot of that with our trade agreement, but now some blame china for covid19 around the world and the u. S. Do you expect problems that will arise from political campaigns will impact your business . Steven it is too early to talk, but we have not seen that so far. If you look at history in china, and we have a lot of history in china, me over the last seven years or so, what has happened is that although there is a lot of political rhetoric, on the ground you see a lot of cooperation in this Technology Ecosystem we play in. Usot of chinese partners for , they have International Businesses that were helpful in establishing that we were helpful in establishing, we participate inei the International Standards bodies to make sure 5g happens across the world in a big way. So underneath all the rhetoric, there is a tremendous amount of cooperation. Said you thought there would be 200 million 5g telephones sold in the u. S. This year. You still think that will be possible now . we do. We riffed we reaffirmed that on earnings recently. David apple is producing a 5g phone. You must have technology in it. It is supposed to cost 1000 or more. You think with the economy going down, people will spend more than 1000 for a new 5g smartphone . See twoyou tend to things at the beginning of a ramp of technology. We saw this with 4g and well see it again with 5g. You see at the beginning a fairly big uptick at higher prices, which tend to be a little less price sensitive. You tend to see subsidies from carriers to make sure they can apply it they can deploy it, because it is an advantage to them to deploy it. But more importantly, you are seeing big growth in the scale of growth of handsets worldwide. With the gala 5g, even more than 4g. With the first year of 4g, you did not see as many phones launch and you did not see them places. Cross so many we are actually seeing faster penetration with lowerpriced tears with 5g. Lowerpriced tiers with 5g. Technologyhave your in everybodys smartphones. You carry around lots of smartphones in one day use a samsung, how do you tell people which phone you use . i do do that, and i oftentimes get in trouble for being in the wrong place at the wrong time with the wrong phone. David is the apple 5g available . it is not available. To be honest, i never talk about a customers product plan, even if i am aware of them. Haidi that was the qualcomm ceo speaking with us. Up, the outlook of singapore bank, just ahead. This is bloomberg. Prepares for mounting bad debt in the face of the virusled recession. Jeffreys equities had krishna guha joins us now. Give us your reaction on the numbers today . The mounting bad debt, overall loss from nonrealized portions was not expected. That is the hit for the ocbc bottom line. Shery we have seen the three banks posting the first profit loss since 2017. How are singapore banks position to come out of the pandemic . Our Balance Sheets ok . Liquidity . In liquidity, i dont much overall liquidity is of an issue. Banks are increasing prices to have a capital buffer. The question is how prolonged this sentiment will be. What do these, banks have to take . I dont think anybody in the industry is estimating an Asian Financial crisis. That is not our base case. So yes, it is an unprecedented banks are positioned with strength, having a buffer of liquidity. Krisna, how much it krishna how much is the oil rout an issue . We have a higher exposure to the oil and gas sector. They have taken a position, but whether it is too much needs to be seen. They took a higher general position. I think management is seeing how much exposure may come often, to have Going Forward. In that sector, all the banks but theimpacted, exposure remains to be seen. Do you see any improvement in their insurance unit, which was one of the drags this quarter . Krishna [inaudible] has been volatile. But i think they are unrealized monthtomonth losses if this whole thing continues for a while. Concern, and we will see how that pans out. Shery jeff haidi jeffreys equities analyst krishna guha. Withe focusing on thailand an exclusive interview. Coming up next, we speak to the ceo of an Entertainment Company about the virus impact on the chinese Film Industry. This is bloomberg. Cq model shery breaking news. We are hearing the u. S. Justice department is investigating the meatpacking industry for possible antitrust violations. Beenow President Trump has trying to keep these meatpacking companies open, given the expansion of the Coronavirus Infections into those factories. People doj, according to familiar with the matter, say the probe is in the early stages and began before the coronavirus spread. President call President Trump called for the industry to be investigated after the disruptions that we saw in big packing companies. Gp the u. S. Anies in control about 80 of the meatpacking market. Bloomberg has learned the doj is investigating the industry. Haidi shery, more japan data prussic the bloomberg. Theapan data crossing bloomberg. Pmi, Services Sector 21. 5, theng back from 21. 8 previous rating was 22. 8. The pmi falling from the previous reading of 27. 8, both inthose readings firmly contract you where he territory. Those readings firmly contracting. Shery a next picture on the markets, nikkei up 1. 5 at the moment after it rose coming back from holiday yesterday. We are seeing every sector of the nikkei in the green, energy and utilities leading the gains. Both rising, are wti above 23 a barrel. When it comes to the kospi, gaining 1. 2 at the moment. We have seen the korean you want korean yuan under pressure because of risk off sentiment tend not so much today, gaining against the u. S. Dollar, the korean yuan. South korea is asking the public to keep spending and is asking companies to maintain jobs. The asx 200 gaining one kiwi stocks gaining asx 200 gaining, kiwi stocks gaining. Karina applications for u. S. On Employment Benefits top 3 million for a seventh week as the economy froze. That takes the near two month. Otal more than 33 million california, texas and georgette report the highest a new levels. April payrolls are due friday and are expected to highlight jobs during the coronaVirus Outbreak. Meanwhile, u. S. Cases of coronavirus surged the most in two weeks, rising almost 2. 5 topping 75,000. President trump and Vice President mike pence say they will be tested daily for the virus after a military staffer at the white house was confirmed positive. Cnn reports the person is in the navy and works as a valet, suggesting possible contact for the president and his family. China and the u. S. Resume trade talks next week after President Trump hinted he may cancel the january phase i deal. The administration indicated is it is not happy with the pace of beijing purchases in the president says he will terminate the deal if necessary. Premier will be on the call next week along with u. S. Trade representative Robert Lighthizer. And north Korean Leader kim jongun sent a message of support to the chinese message to the chinese president for his handling of coronavirus. State media says kim congratulated xi for controlling the situation pete little is known of the coronaVirus Outbreak in north korea situation. Little is known of the coronaVirus Outbreak in north korea. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Gettinge are just numbers of coronavirus cases in china, reporting 16 a symptomatically coronavirus cases since may 7, one additional coronavirus case on may 7, just one. We expect to see a breakdown when it comes to china porting no coronavirus deaths. We expect that break down, when it comes to whether that one case may have been an important case or not. Just one on may 7 in additional coronavirus case in china on may 7. The Coronavirus Impact on the Film Industry is being felt worldwide. Some analysts say covid19 could cause losses of at least 5 billion in Box Office Revenue and reduced production. Lets look at the chinese box office. With maoyah executive director zheng zhao. Your company as a leading platform providing Internet Services in china. Tell us about the impact of covid19 and the restrictions in china on your business. Zheng thank you for having me here. We dont see a lot lot of new cases of covid19 in china. Covid19about it, severely hit entertainment, not only in china but also around the world. Is, we have observed here especially in the cinema, it will not go away. Here this year pared to lester that last compared to last year, there may be a 37 billion Box Office Loss compared to last year. Investment has been put on pause. Haveu mentioned, cases been getting less and less and it is pretty much under control in china. And when the cinemas open, the audience for the movies will go fast. Of regular moviegoers would what we haveck, so is a team on reopening. So hang in there. Definitely we are optimistic about what is coming up. Are you able to give us an indication of the impact on earnings, and what the rest of the year might look like . We have released our guidance for the year. We shouldnitely think get ready to reopen. Top priority, meanwhile we put a lot of online seminars on for training professionals, getting new and also come, our system is really prepared , newhe theaters to reopen seating new selections for social distancing, precautions we have taken. A we will probably have better picture when the theaters and we see that upcoming blockbusters will be released. The quarantine has kept people at home for too long. They intend to go back to the cinema. I was at manynd, Tourist Attractions that were packed. Given you are optimistic people will actually want to go to the cinema, in the u. S. We are seeing the opposite. People are really enjoying streaming movies online. Arehat something you looking into investing more in, releasing new films online, streaming, is this a new trend. Or china or maoyah great question. [inaudible] we actually have two new movies that is being released. [inaudible] there are many studios that are thinking about producing content for online streaming. The cinema experience and online video streaming, it is a totally different experience. Home, itcan watch at and youial experience, have companionship when you go to the cinema. [inaudible] and we are on both sides. , weou look at the numbers have to offer better financial terms for many of the big and you dont see that in the online streaming versions. As ouron both sides, business. Impactgiven how big an the chinese movie has take movie industry has taken, do you expect the government to readjust quota targets for foreign films to help out local films . I believe the government is trying to help out local films, theaters and businesses getting ready to open. I dont have a specific date for but ieater to reopen, believe a lot of government officials are putting policy into place, helping us. And we are probably getting close to the reopening date. Exploring other business venues . More on focus production and investment, for example . Sure. That is for for the time being, we have asked everybody to be patient. We will continue the longterm value of the business. Ae model is not only for production platform, promotion, different platforms, we are in this longterm. So this is a good time for us to sit down and get ready for the next promise, and be ready for the next progress. Is a good moment. We can streamline our business and ask, what does the market need, what does our consumer need moving forward . I alwayse same time, believe we have to put the. Onsumer first when they had the cancellation of all the big movies right , were the film festivals had over 5 million tickets and many others had tickets. And we all rely on the system we built. To have tore going leave it there, great having you with us, zheng zhao maoyan entertainment executive director and ceo. Ceo of thailands biggest bank on the outlook for their financial industry. This is bloomberg. Shery our next guest says actions by the Thai Government and central bank to mitigate the pandemic may reduce pressure on asset quality in the shortterm. Joining us from bank top is ofkasa indaravijaya, ceo ikornbank of kasikornbank. When you say you will be prudent provisioning for losses, what does that mean . What is the level this year and next year . Kattiya because covid19 has impacted every business around the world, including banking, k has accumulated a position r one the past few years. Even though we havent been a cubit we have been accumulated, we need to do more maybe next year also. Does that mean that you expansion . N overseas kattiya as k bank has fundamentally expanded the Regional Business by adopting hassset light strategy, it not only required less burden on capital expenditure, it is also strengthening our digital framework. We see the covid19 crisis as the opportunity to revolutionize the banking business in with much more reliable channels for the operation. Strategy part of the expansion, overseas is their model, would you take a Minority Stake or take control over a foreign entity . What are you looking at that the moment . Kattiya our purpose, we want to have a meaningful impact in this region. Need a significant market share and control. It depends on the market situation and the Regulatory Environment to theort local regulators and progress of collaboration of our partners. So we intend to take control. Does that apply to indonesia, and also Farmers Development bank in myanmar . Are you taking control over those banks . Kattiya we have currently in at 35 market share. In the Third Quarter we plan to have around 40 market share in won. Them dobeen helping the Strategic Planning to expand the business in their own wantry, so that means we to have a meaningful impact in this country. Spoke about how the bank of thailands actions are sort of mitigating pressure on your bank. I do wonder though, how you are dealing with margin pressure, given that even record lower rates will not help . Is given the relief measures from the government and the bank of thailand, the pressure on the asset quality might be lower in the shortterm. However, i think there is still portfolio. Our loan the covid19 potential loan almost 20 ,around really from the sme segment, which is around 12 billion u. S. Dollars. Impact toe possible the myanmar portion shery if you need that myanmar portion. Shery if you have to do more costcutting, where would that come from . We have seen bonus reductions, for example, for executives. Kattiya for the past few years we have been doing management and productivity improvement. Last year for example, we saved almost 7 billion last year. This year, we would continue to do what we plan, and invest more engineeringess, re our core process, which is fromim credit process, loan origination to collection. And we also want to improve the frontline, our sales staff, to be more effective when they see the customer. However, for the short term, for to first helpant our customers go through this crisis first. Thank you for joining us. Ceo was Kasikorn Bank Kattiya Indaravijaya speaking to us exclusively. Singapore airlines, straight ahead. This is bloomberg. We will be watching Singapore Airlines when it starts trading at the top of the after the carrier announced a loss tied to the Coronavirus Crisis and losses earlier this year. Haslinda amin joins us. Haslinda this is the first operating loss in six years for Singapore Airlines, not unexpected, not surprising. It has to do with hedging losses, oil, eight over hedged when it comes to fuel consumption for Financial Year 2021. It mentioned a material operating loss in that statement that was released. Oil is the biggest expense for all carriers. The reduction of flights, not helping, catching everybody by surprise, as is a slump in oil prices. Airline points to an that is reeling from the fallout of the pandemic. It is the same story pretty much all over the world for airlines. About 36 of flights have been canceled for singapore air, it is only flanked 15 cities. To stay afloat it will raise or than 6 billion and issue new stock, and an investor said it will bank the resolutions, all pointing to a difficult financial situation for the carrier. Trades to see how sia when markets open at 9 00 local time. Singapore air betting thistors will help capitalize the carrier. Haidi this is the Singapore National carrier. What is the government take on its survival . Government has been clear. It will spare no effort to spare the carriers survival. With the backing of the major shareholder, sia does have financial backing, it has a lifeline. But recovery will be changing will be challenging. Globally, 80 of global capacity is idled, according to an industry association. It is suggesting airlines could need as much as 200 billion dollars in government date bailout measures to survive. In government bailout measures to survive. It will be very difficult for Singapore Airlines and the rest of the airlines around the world. Amin inaslinda singapore. Our market coverage continues as we look ahead to the start of trade in hong kong, shanghai and shenzhen. The china open is next. This is bloomberg. It is not 00 a. M. In beijing. Welcome to Bloomberg Markets china open. David we are counting down to the open of trade in the chinese mainland. Our top stories as we round up this week. Stocks up ahead of u. S. Payrolls. The reading is expected to be the worst in decades as the buyer is locked down shutters isnt says and sees workers laid