Transcripts For BLOOMBERG Bloomberg Markets Asia 20240713

Opening up like indonesia. It is broadly risk in in asia. Jakarta, a little slow at the get go. Singapore higher. Of 0. 7 . The china security journal says china may lower that mls. The hang seng up 150 points. The bondaction in markets overnight, especially when it comes to treasuries. Aelds in the twoyear fell to record low. Fund fed funds pricing in a negative policy rate. This is ahead of the u. S. Jobs. Bonds still up. Bit of ar taking a slump ahead of the jobs data as well. Crude, still below 30 a barrel. Set for a second week of gains for oil. Lets get more analysis. Patrick joins us. Always great to have you. It seems like we have risk coming back. Disconnect to be a to what equity markets are saying and the signal from bond markets in the prospect of some type of economic recovery. Which side is right . Actually you could overplay the disconnect. The dichotomy between markets. Right tohey are both some degree. Littles are probably a spare. It is not crazy to see some recovery in equities. Levels, you can justify using not crazy assumptions. Even though we probably overshot a little bit. The markets are being caught data andwful economic they are looking forward to the recovery. Crucially, this is how you bring in what is going on in bond markets, there is a norm us amount of stimulus a large amount of stimulus Central Banks have brought to bear which is why yields are low. I dont think what is happening and markets is too crazy, even if it is happening a little fast. Anything you think that can take risk assets meaningfully higher from here . Anything above 2800, the air gets thin. We are more neutral at these levels. Buy intoe looking to any substantial debt which is one way of saying, we dont think we are going back to the march 23rd lows or lower than that. To take it meaningfully higher, it is pretty hard. Short of a miracle cure for the virus, it is hard to see what would do that. We have seen the markets price in a negative rate. What could that mean for assets . We think that is probably more technical and position driven. We think it is unlikely the fed will go to negative rates. They areething generally averse to contemplate. Policy will stay very loose. Choice is more forward guidance. Rates, evenegative in europe. The trend toward negative rates is coming to a halt. In terms of the inflation story, we heard from a famous kenzie and professor saying we could be looking at inflationary depression. Is it something you are starting to think about and how would you protect yourself . That is a good question. Clearest trends is inflation linked bonds. They are pricing in inflation above 1 . That seems mispriced to us. Question, ierm think the jury is still out on that. With clearly a possibility the fiscal spending. Nd then qe the extra issuance we are seen. The growth we are getting from lockdown is disinflationary. Supplylooked at the problems. But clearly the this has been overtaken by demand. Quarters, wele of are unlikely to see a pickup in inflation, rather the opposite. Thinking inflation, medium to longer run is underpriced. So that is a buying opportunity. What else are you liking in the bond space . To a neutralt space for equities. Is there something more value driven in the credit space . If you want to put some risk on, the other thing that is easy is investment rate credit. Fed buys, even though they have not done much of it yet. It is supported by Central Banks. Should be relatively contained. I think it is in contrast to the riskier end of credit. Emergingmarket debt, there is a lot of currency and balance of payment problems. We would stay away from the risky and. Looks like a pretty good trade as well. Always great to get your insight. T is patrick durbins rick from applications for u. S. Unemployment increased as the economy slowed. That takes the two month total to more than 30 million. With with california reported the highest. Torolls are expected highlight the loss of jobs amid the Virus Outbreak. Cases of covid19 surged the most in more than two weeks. Fatalities are topping 75,000. President trump and Vice President pence say they will be tested daily for the virus after a military staffer was confirmed positive. Cnn reports the person is in the navy and works as a valet, suggesting possible contact with the president. It bank of england signaled could inject more money into the system. The coronavirus drove the pound to its lowest level since 1985 but it has recovered. It faces further pressure with a bleak indicating forecast. They are predicting a 14 pretend contraction and says it will act as necessary. Assessment ofts the Global Economy has worsened. More turbulence can be expected. There are three scenarios for the virus. Staying longer than thought, returning next year, or both. A lengthier pandemic would wipe 3 off of gdp. I am karina mitchell. This is bloomberg. The outlook for ipos amid tensions. We have that discussion coming up as we look ahead to the cloud ipo in the u. S. , one of the First Chinese companies to list after that scandal. Also, take a look at highyield and fixed income. And of course the check in singapore thank earnings. This is bloomberg. Welcome back. U. S. And chinese trade officials expected to resume trade talks next week after President Trump threatens to terminate the phase one agreement. Know about these talks . Are we going to see a reescalation of the tensions . Know the chinese vice this is premier the first time they have spoken about the agreement. Right when the pandemic hit the Global Economy. Deal does call for six months of meetings. Question for what we are watching after these discussions is whether the trade tensions are imminent. Optimism trade ties could salvage the broader relationship is gone. Over the past week, trump has threatened to scrap of deal altogether. He has escalated rhetoric blaming china for the outbreak. There has been a rapid deterioration in relations. When it comes to getting more terrorists, when the trade war first started, the u. S. Economy was going strong. It was in a position to absorb the impact. Now it would be much harder for trump to justify starting a trade war. Having a productive talk striking a deal with china is not politically beneficial for trump. The way these talks transpire is going to be closely watched. Deescalating tensions, whether that is a good thing remains a question. How far behind is china and its commitment . Much of the initial part of the year at a standstill. Because of disruptions from is behindak, china its purchase target. So far, there quite behind. The pressure to catch up is mounting. According to the agreement signed earlier this year, china agreed to sign by 200 billion in goods and services. The decline in exports to the u. S. Following 60 . Least trying to move forward in its implementation in the trade deal. Beijing does claim to show the u. S. Has been working to fight the virus. The pointto make measures to boost enforcing of i. T. Protection needed to be approved by the National Peoples congress. They are making the argument they will eventually make good. Selina wang in beijing. Thank you. Coming up, only a slow recovery. Daly says no one is seeing a vshaped rebound. This is bloomberg. Welcome back. Has saidporean bank they are going to maintain their plan to expand operations in the china area. Private Bank Business is slowing, expected to slow. After they reported those blank earnings where net income fell. What is happening with the fed and the u. S. Economy, mary daly says she expects the u. S. Economy to shrink this year. She sees more optimism than one might think. She spoke to us exclusively. Make every other company and the u. S. And globally, they are feeling pain because we have had to shelter in place. They want to do the right thing but they are doing the pain. Thinking about getting past this, they are getting their finances in order, taking advantage of the programs advantage available from congress or the fed. Is looking atd to a vshaped recovery. They think this will be gradual and it will take time to build confidence back up. Optimistic than you might think. Reopen andady to reengage. I know you want the paycheck Protection Plan to help but is there evidence it is doing that . Protectionest program is about keeping workers they have. When the economy reopens, we expect them to come back and perform work. Right now, most of the country remains in shelterinplace. We are providing emergency support. The main street program, still not up and running. Is there a chance it is going to get started too late . Been what we would call announcement effects. We say we are going to have a facility and markets starts to function better. I dont think it is going to be too late to be effective. I think it is already helping markets. I dont want to get into the alphabet business. Are negative about the idea of any growth. You did not see expansion until 2021. Out talking about annual data. Positive int to see 2021. I think that is about as good as forecasting can get. It is always a tough business but it has become very tough right now. Markets are seeing things differently. Ago,dea just a short while the fed futures priced in negative interest rates. That is not a policy procedure you guys are interested in. What do you think about the Way Investors are looking at it . As the are looking at it virus is with us until we get a vaccine or some nice way to control it. They price that in. That is what we are all dealing with. Am an evidence based optimist. Is already seeing disses are fundamentally entrepreneurial. We are starting to think about, how do we reengage . I have a little more optimism. Municipal finance is in tatters. What are you hearing from cities and states in your district . Cities and states in my district are in trouble, they are struggling. They are trying to figure out where can we cut costs when revenues go down . They are facing declines in revenue and trying to figure out where can we keep essential services. This is just hard. We are working with states and localities to think about what is the best way to make difficult choices. And be wellpositioned to go forward. That was the San Francisco fed president very daily. It seems like the phone call between the u. S. And china has happened. We have heard trade negotiators have spoken. They say they are strengthening economic cooperation. Making efforts to implement the phase one trade deal. A lot of questions about what this means. A disconnect about threatening to pull out of this. At this point, cooler heads are prevailing. One line is you attack the chinese. The other line, you continue to work with them. Cannot afford to impose additional terrorists. Been wee in beijing has are going to push ahead implementing this deal as best we can all do we have had officials say, we may need some leeway. There has been a sense from officials they want to stick to the phase one deal. Up, we discussed the prospects for Companies Going public during the covid 19 pandemic. In terms of the market implications, we have seen a little bit of strength for the currency. Looking at futures, we see futures gaining. A strength in the currency and rmd chinese currency. Keeping this risk rally going. That is the head of the u. S. Jobs report later on. A lot of questions, do you Clinical Questions tension seemed to be deescalating, will that help ahead of bad data out of the u. S. . More than 20 million jobs lost in april. This is bloomberg. Staying connected your way is easier than ever. Youre just a tap away from personalized support on xfinity. Com. Get faster internet speeds with a click. Order xfi pods to your home in a snap. Or change your Xfinity Services with just a touch. All in one place. Youre only seconds away from all of that on xfinity. Com. Faster than a call. Easy as a tap. Now thats simple, easy, awesome. Is 10 29 a. M. In hong kong and shanghai. 10 29 p. M. In new york. Applications for u. S. Unemployment benefits topped 3 million. Total is 33nth million. With california, texas, and georgia reporting the highest levels. To highlightcted the unprecedented loss of jobs. 11 people have been killed in a gas leak at a Chemical Plant in india. Thousands of people have bid been evacuated. This came as the company restarted operations following the nationwide lockdown. At least 20 people are said to be in critical condition. Households cut spending by the most in five years in march. Outgoings fell 15 since the year earlier, making it six months of street klein. North Korean Leader kim jongun has sent a message of support to handling ofor his the coronavirus pandemic. Little is known of the Virus Outbreak in north korea, but state television says the country has recorded a few cases and no deaths. Global news, 24 hours a day. Powered by more than 2700 journalists and analysts. This is bloomberg. Lets take a look at markets right now. We are focused on the line negotiators asde well as their chinese counterparts did to speak on the phone. That phone call has happened. They vowed to continue those efforts to implement that trade deal. Helping risk assets. Or. Futures higher by 1 more. Southeast asia having a good day as well. Indonesia and the positive, manella under a bit of pressure. Singapore up 0. 3 percent. Most of the reaction in u. S. Futures. As well as the offshore renminbi. Earnings, the big one loan provisions surge. It seems like this profit drop caps what has been a bleak earnings season. Air asia as well. Sources saying they could seek a one billion ringgit loan. Sing air as well, a material operating loss. Outstanding loans to virgin australia. U. S. Chinaioned the tensions. Nonetheless, they are not putting off one company due to start trading later today. They are said to have christ shares in the upper half. Raising as much as 450 million. Join us is in asiapacific ipo leader. What is your sense of the appetite for listening and the u. S. For u. S. Firms . General, the chinese verys are where important for the ipo market. The biggeste of markets, supposedly they should go for the u. S. With the recent relationship between the u. S. And china, it is hard to tell. I can see that some of these Companies May consider to choose other markets like hong kong or asian markets. Which sector as you look across at the broad spectrum, is seeing the most activity in terms of potential ipos . Mentioned the cloud related companies which will be one of the key Tech Companies that should continue to be important. Another key sector may be biotech. Which is important with the covid19 pressure among us. The accounting scandal has led to suspicion about Chinese Companies and what has always been a speculation about how murky their Accounting Practices have been. Do you see this impacting Chinese Companies . Notfact that king soft is consumer facing, does that help its prospects . I cannot comment on a particular case. I think in general it is important. You can see from the sec like to, they would look into a lot of factors for the developing countries. The work quality is crucial for them. Company will be assumed to be more stringent. And make sure investors can see their financials in a more transparent manner. A lot of walln street banks pull out of chinese listings. There have been people pulling out. What do you think they are targeting in terms of the size of offerings, the types of companies they want to take on . I think for the financial sectors, it is related to interest cycles and the atmosphere of the markets. Need things may coming of the expected conditions. In the meantime, if there rushing out, i think the relationship will be lower or the secondary listing story, in terms of the success of alibaba. Same thing in hong kong. Is that trend likely to continue on the back of this . How much success do you expect them to have . This is a trend for the Chinese Companies already listing in the u. S. Announcement of information in the market, talking about the u. S. And also the chinese relationship, some of these Companies May consider not only staying in the u. S. But being listed in other places including china or hong kong is their hometown. In particular, with the different trading timing, alibaba can trade in u. S. Time and hong kong time. I would expect a lot of these type of companies with early stages may consider to come back to hong kong or the mainland. There are around 200 and 40 plus companies. Benefitsnot enjoy the for some exemptions. They can still go through the process getting a dual listing and hong kong. Longer there should be a larger number. Some of them may not be very attractive to the market. The market will scrutinize some of them. Whichl only accept those have hike liquidity and are more popular among the chinese market. Ringo, thank you very much. Some lines crossing the terminal in terms of the reopening of some businesses. Restartinging to be u. S. And canadian outlets. Supply chain issues have been a major factor for automakers across the globe. Honda saying it is going to restart u. S. And canada out what for cars. We are hearing some lines crossing with the prime minster of australia. Scott morrison speaking about the reopening plans for the country. Saying australia is making its way through a difficult battle. Saying when it comes to the treasury, they plan to restore 850,000 jobs. Aiming for a covid safe economy by july. As the National Cabinet agrees to a threestep national opening. Retail companies and restaurants are reopening. This is going to be a gradual process. They have been quite cautious. Australia is a bit of a different case. As they the threat entered to the winter season perhaps there is the threat of a second wave of infections. Cases of covid surging the most. Deaths topping 75,000. Farley whoth jason is seeing some positive results. We are seeing some glimmers of hope. Capacity is stable. We have a wonderful Field Hospital started by our governor opening hoping to restart the hospital. Ventilator capacity is holding strong. All of those metrics are glimmers of hope we see in our health system. Do genetics play a big role in who dies from covid19 . I think that is an important question and we are investigating a type a variety of types of genetic analysis. There are important differences in viral genetics. We have heard a lot about strains that came from china, europe. Importantly, is our host genetics. Ist we are seeing individuals who may have weakened immunity. System does not respond as briskly. Actually are the ones somewhat protected moving forward into the need for mechanical ventilation. Does not ask as briskly, you are not as overwhelmed. It is not the virus that does is your immuneit systems response. Are there disparities because of gender and race . How can we protect the people most at risk . Genderthink about from a paypective, we have to close attention related to increased cardiovascular respiratory diseases. It is the same when you look at race. Is to do with access to care. Poverty, disparity between populations. If you live in a community ,cross any part of the world any hospital is a low resource hospital. Less available intensive care beds. Primaryions accessing a care provider. You may present later for evaluation. There are many things that need to be unpacked in relation to things that may influence differences in gender and Racial Disparities we are seeing. That was dr. Jason farley from the Johns Hopkins school of nursing. Now, coming up, first facebook. Now equity partners. A deal worth in 1. 5 billion. We will have the details next. This is bloomberg. Asias richest man is said to become even richer with a 1. 5 billion dollar injection. The company has purchased a two 2. 3 stake. First it was facebook. The third dealis in a month. That is right. This is the third fundraising they want to have a zero debt company before march 3, 2021. I think he will probably hit that target much earlier. After, you had several partners. Now you have this stuff. Million dollars. A lot of interest in the growing population. I understand you are looking at selling your stake in asian paints. What are the details . Still a lot of costs there. That the location is on a spree, you have all sorts of the looking for another stake. They are deftly pretty busy right now. Tell us a bit more about this devastating news on this gas leak in india. What is the latest . It comes at the worst time. 11 people dead. Thousands have been evacuated. There has been a gas leak in a plant in southern india. Rules to allowng for Economic Activity in the country. Workers are trying to find out if the plant was ready. That led to 11 deaths right now. Usands of people had to be the country is already in the midst of a storm. It was chaos when this happened. People were rushed to hospitals. Thank you. Air india equities reporter with an update. Onitoring that gas leak the devastating images there. Have numbers from the u. S. And the treasury, issuing a statement on the call. Progress has been made. Are seeing some optimism perhaps this phone call did go well. Despite the current Global Health emergencies. The meetings will continue on a regular basis. Futures punching higher. Plenty more ahead. This is bloomberg. Quick check of the latest business flash headlines. Amazon said to be considering adding to its investment. Stake in an indirect future retail. We are told they are in talks with the parent company. Future resale stalled in mumbai. Helton is a warning any post Pandemic Recovery could take several years. U. S. Demand will lead the way. The real problem was april, when revenue per room dropped 90 . They are expecting a dramatic second quarter. Tesla has suspended production at its plant in shanghai. Sources say it told workers to extend the labor day break until saturday. One of the reasons for the the reason for the pause is not clear. United airlines junkbond sale is struggling to gain traction. Issued discussions were around the range of a 9 yield. Eager to lend. They even have their limits without double digit and ironclad collateral. Clocks what has happened in the last hour or so when it comes to the u. S. China relationship . We got that statement on how it plays out. It seems like it was favorable for both sides. They are even going to communicate virtually were on the phone despite this pandemic. They said they are going to vallow to keep those commitments implementing the phase i trade deal. If there is any other reason to be optimistic, that is one. That is one. Out morey are pointing reasons. European economies are getting relatively aggressive in terms of reopening their economies as well. The yuan trading stronger. U. S. Hedge being squeezed. A few factors to bear in mind. When it comes to trade, the question is whether china can meet those obligations. A commitment of 200 million. Picture in terms of the trade data. For will be a question chinese policymakers. That is part of the commitment. It seems to neuter at least temporarily tensions between the sides. Quiet that is what we are seeing from trade negotiators. We have learned in the last couple of weeks as they get closer to november and the president ial election, perhaps being nice to china is not favorable politically for President Trump. Biden has taken not opportunity to call out trump as well saying he is being too soft on china. A lot of questions about where things stand. Certainly. You are seeing bipartisan pushes from some and the congress and senate to tackle china in some issues. Now, coming up, moodys gives up its outlook for singapores biggest lenders after a quarter acrossw profit plunge the board. We are going to speak to the head of u. S. Public and fixed income debt. Lots more ahead. We are counting down to nonfarm payrolls in the u. S. This is bloomberg. It is almost 11 00 and singapore. A 30 a. M. In mumbai. I am haslinda amin. I am yvonne man. We are entering the last session of the morning in hong kong. Stocks rise ahead of the u. S. Payroll. The reading is inspected to be the worst in decades as the virus shatters businesses and keeps workers laid off. Heads for the first backtoback weekly gain since february. Demand is starting to rebound. The u. S. And china resumed their trade talks yvonne the u. S. And china resumed their trade talks, it seems that phone call went well. Keep to those commitments. That is contributed to the positive mood we are seeing across asia despite the u. S. Adjusted part. That is just one thing to believe, that the worst may be over in terms of the economic hit. We are talking about steps to reopen. That is adding to the positive sentiment as well. The index is up about 1 right now. We hadout 30 minutes ago reported confirmed by the treasury, issuing a statement. Both sides agreeing that progress has been made, Good Progress has been made to make the deal a success. Adding to the positive sentiment. We had the nikkei 225 of as well. As well. Gatherings can be as big as 8 . , 2 10 of 1 . Airlines has its first operating loss in six years. Foot the page. Take a look at where we are in terms of Southeast Asian markets. Down aboutpressure,. 1 when we talk about the philippines, we are seeing some upside. This is the stock that was about 15 just on wednesday. This is offering an olive branch. Yvonne we are just seeing some live crossing from indonesia. They are saying they have done some discussions about reopening southeast asias largest economy. They are letting this in in gradual steps. They are considering unlimited flights and bars. The dollar has been lower on the prospect of this u. S. Jobs report coming out. Yieldsinue to see stabilizing but holding onto the losses. The u. S. 10 year yield, 64 basis points. Not doing much. The two year and the fiveyear have been in focus. The yield head to record lows. Covering around 13 basis points. Negative futures now. Traders perhaps the fed could go to negative rates next year. Some of the boards we are watching, u. S. Futures is seeing one of the most pronounced reactions to that u. S. And china phone call going through. It looks like things are looking better. More optimism on the trade front as well. 1 higher or more for u. S. Futures. Nikkei futures are going higher as well. We are expecting the worst Weekly Performance from indian stocks in two months. Brent crude as well. Get set for a second week of gains for oil. Bitcoin is the big talker here. Back about 10,000. Youre not seeing it there. It is about 9902. We are seeing that five digit price for the cryptocurrency. This is more along the technical events that goes to having that in the industry as well. For now we are seeing those prices quite elevated. Stocks, howdonesian are they faring on the back of a government that plans to read gradually reopen the economy . They are up by. 2 . They have a full reopening of the economy in five phases. It is considering allowing unlimited flights and bars to open. Past, it is not a good time to reopen the bar. As they try to reopen the, we had some margins earlier. They plan to reopen a straley as well. Lets get first word headlines with karina mitchell. Karina we start in the u. S. Were cases of covid19 surged to the most since 2019. Rising almost 2. 5 . President trump and Vice President mike pence say they for thetested daily virus after a staffer at the white house was confirmed positive. The person is in the navy and works as a valet. The International Monetary fund economy hasbal worsened since the most recent forecast weeks ago. More turbulence can be expected. The april outlook coming up. A lengthier pandemic would wipe 3 off global gdp. Meanwhile, households in japan cut spending by the most in five years in march. That as the spread of the virus widened. Outgoing fell 6 from a year earlier. The most since 2015. Making it six straight months of decline. This was triggered by the rise in sales tax. Spending also seems to have fallen in april because of the emergency. Global news, 24 hours a day on air and on quicktake by bloomberg. Powered by more than 2700 journalists and analysts in 120 countries. I am karina mitchell. This is bloomberg. China the u. S. And negotiated efforts to implement the phase one trade deal. This after President Trump threatened to terminate that phase i agreement if beijing is not sticking to its obligations. Its cross over to our correspondent in beijing for the latest. What do we know about this phone call . You have a pretty positive update. President trump and ambassador roberts might have participated in a phone call to discuss trade economics and issues. The effect is that they both vowing to commit to this agreement. They both agreed that good. Rogress is being made in spite of the current Global Health emergency, they are expected to meet their obligations under a timely manner. The big question before this call was whether or not we were going to crv escalation of trade tensions and whether or not that was going to be a minute. It seems that at least from this discussion, they are moving forward. Escalatedter trump the blame game. He has been threatening to scrap the deal of china as well as escalating right away, blaming china for covering up the scale of the coronaVirus Outbreak. He is threatening to increase tariffs as punishment. There is a rapid deterioration. It is clear that it is in the best interest of both sides to not reescalate trade tensions even all the economic pressure from covid. Yvonne how far behind is china in its commitments . China has agreed to by an additional 200 billion of goods and Services Compared to 2017s level. That would mean that they would. Eed to reach a target they are far behind it. They are declining almost 6 in the first four months of 2020. Very huge pressure. That pressure is mounting but from the call it sounds like theyre going to be coming through on the promise. That was selena with the update on that phone call. We have a preview of a jobs report coming out later today. Expecting a pretty abysmal number. We have the outlook for singapores biggest lenders. That is later this hour. U. S. Eak to the head of public fixed income to get his take on the negative rates from the fed. This is bloomberg. The treasury hit a record though. Americans final unlimited benefits fueled that negative rate in the u. S. By 2021. It also underscored how dramatic the report may be. Our Global Economics and policy editor, Kathleen Hays is watching this for us. A powerful rally in bonds. Why is there a negative rate . Lets talk about the jobless rate in the u. S. 33 million since midmarch. That is still extraordinarily high. This is one of the things driving it. It went to a new record low. That is 0. 13 . That is awfully close to zero. The previous low was 1. 43. That was in september of 2011. That was european debt crisis. Can the u. S. Ever get out of this recession . It was one thing feeding the other. They were looking at the fact that the fed funded futures market lets pull up this chart. Negative rates next year. 2021. I think they are looking at how this note was going. How could this not go below zero . The lefthand side of the spring, you can see that back in january, they were betting on next year, 1. 4 or 1. 5 . Why the change from jay powell . Ill he really go to negative rates . Said daveeconomist pell should cut the key rate below zero. Doubling capital, a big bond guy. He got out about 24 hours ago. This would be fatal for the money markets fund. It would be a big problem in the united states. Governors said they were not in favor of negative rates. Certainly the different structure that money market funds part of the financial sit serve system. They are not ready to follow the ecb down this path but when you look at the labor market, Bloomberg Economic saying that the jobless claims are a great indicator of where the economy is going. They say it is suggesting the worst contraction in the u. S. Economy in the postwar era. It is certainly interesting what they do. They follow europe or japan. You could argue that japan has not done much for executive rates or growth there. Lets look at the april jobs report. Everyone anticipating this. How bad will it be . At the topets start of the list, payable. As we pull up this chart, have that up there. Down 22 million. That is one of the things the jobless claims are suggesting. 22 million in a loss of jobs. Be 27 times bigger than the worst monthly drop in the recession days of 20072009. The biggest drop. 11 times bigger than the previous drop from the postwar era. 1945. You could see a big bad number. The Unemployment Rate is supposed to go to 16 according to the bloomberg survey. Here, we have all been looking at the bretz losses. Of the job shut down, lockdowns, no wonder. It is spreading to whitecollar jobs. That is the concern, the damage is deepening. It is something that will last after the reopening starts. Beyond that, a couple of things i would like to throw out there. That would be number one, small businesses. Latestusinesses, in the april service, finding that one of the key things in the survey, will you hire new workers . That is down to a net number of just 1 . There is another number that does not go there. That is announced layoffs. The percentage increase for the. Onth of april was 1500 this is what people are concerned about why people are concerned about the future. Is going to be getting worse. Yvonne how can people actually get back to work . Kathleen hays giving us a preview. Just ahead, we get the outlook for the u. S. Bond market with bearings. This is bloomberg. Lets take a quick check of the latest business flash headlines. Prices hasin fuel led to contracts maturing in the fourth quarter. With capacity cuts caused by the coronavirus, it will be overhead on fuel consumption for the year ahead. The airline says it expects to report a net loss when it reports fullyear results next week. They predict a difficult year ahead as they look to modify this. The sevenyear run of Profit Growth has come to an end with the fallout from the coronavirus pandemic. The net income fell 8 for the whole year. 1. 8 billion, u. S. Before a final 40 dend had been slashed by and Earnings Guidance for the rest of the year due to the uncertain outlook. Productionuspended in shanghai, bringing its Global Manufacturing to a temporary hold. They are working to expand their labor until at least saturday. This website says it is because of a shortage of parts and a critical piece of equipment needed. The fed will cut its policy rates below zero. That drags the treasury to a twoyear low. More of the damage is caused by the coronavirus. Lets bring in david, head of u. S. Public fixed income and high yield. They queue for staying up and joining us. . O you make this move heading negative . Is it a technical move . Do you think they could go down that route . Thank you for having me. I think as you indicated, there is likely some technical factor that plays in the shortterm. If you listen to at the fed has been saying lately. They have been pretty clear that the effective lower bound is zero. We would be surprised if we get to a point where they cut rates below zero. Are in fairly unprecedented economic times. There is a great deal of uncertainty out there. When we look at the world today, it is all about how the reopening goes. From north carolina, tomorrow they left the stayathome order. It is the reopening of the local economy going here. We will start to see this rule out here. The real focus is how that reopening goes and how that translates into the economy in the second half of the year. Grim economicetty picture with the latest jobless names number. Outre expecting that coming today. One of the west prince we have seen since the postwar. Is the market still suggesting that the fed needs to do more . It is all the lagging indicators, they are certainly bad. Is not as bad in terms of how quickly it has come on. I think the fed has done a lot to improve liquidity in the markets. They injected a lot of liquidity. At this point, it really is about how the reopening goes. That is what investors are focused on. That is what we are focused on. We are optimistic. It is really going to be following the realtime Economic Data with a lot of data, you can follow in realtime to see how things are going. Hopefully the virus days under control. The fed will react accordingly as things evolve. Central banks around the world have indicated they will do the proverbial whatever it takes. We are optimistic that as the economy starts to reopen, you will see some green shoots. It will take some time. This is unprecedented but we are optimistic that we will make progress and the economy will gradually improve. Just one line before we carry on our conversation, the cloud is set to guide its pricing in the upper half. We are looking at 510 million u. S. Dollars. That is the portion relating to that. Back to the bond market. ,e are looking at bond yields there is so much appetite for risk. What do you make of that . The markets really separated companies into three buckets. There were companies that were having trouble before the coronavirus came upon us. You think highly levered retailers like Neiman Marcus and j. Crew filing for bankruptcy. Perhaps the current event that accelerated those, you have another group of companies that are otherwise Good Companies that have been completely shut down by this. Companies that were doing well have had to shut down completely. They just need liquidity. You get to the market receptive to those kinds, the companies coming to the market and raising liquidity. There is optimism that those companies when we get to the other side of this will be very Good Companies again. Another set of companies is doing very good. You think of a company like netflix or television broadcastings that have higher you readerships. Higher readerships. You have to go another layer down and look at the different tabs of companies. It is really about these are times where active managers can really make a difference. Trying to go through all those different types of companies and riskadjusted opportunities for our clients. Patients had to do with king soft. 17, post share, the king soft news there is also some out of the philippines. It remains in good financial position. They are to honor all existing obligations. Station that has been under a lot of pressure. Just a question to do with that, have you seen the ratings downgraded . Have we seen the worst . On how the depends economy unfolds. Beenly the agencies have quite the downgrade, companies are having issues. It depends on the shape of the recovery. The prospects of of the recovery are looking less and less likely but a ushaped recovery if the economy opening goes well over the next several months and you start to see more and more Economic Activity, businesses get back to work and start generating cash and liquidity companies are going to get their side of this. Certainly we think there could be a moderation in the pace of downgrades. It is all about that forward look. That is what we are focused on. Thank you so much for joining us. That was david from bearing. Joining us from north carolina. It is certainly on the upside here. Are on good china terms. Youre starting to see this up more than 1 . This is bloomberg. 49. 50 daddy, i found you good job. Now im gonna stay here and you go hide. Watch your favorites from anywhere in the house with the Xfinity Stream app. Free with your xfinity service. Now any room can be a tv room. Stream live tv, on demand shows and movies, even your dvr recordings. Download the Xfinity Stream app today to stream the entertainment you love. At this friday. Almost 11 30 a. M. We are in the middle of the trading day. Pretty flat. Isfar this week, the index down about 1. 5 . They are set for a hearing. Then they will embark on this deal to secure financing from multiple banks. Oil is on the rise. The sei is flat. Official headlines now with korean initial. Pledged to this is to cooperate on the economy and public health. Chinas vice premier talked with u. S. Trade representative Robert Lighthizer and the treasury secretary, Steven Mnuchin and today. They agree to maintain communication. The economy slows amid lockdowns and business closures. That takes the near the two month total to near 33 million. California, texas and georgia reporting the highest new level. Aprils payroll is inspected to highlight the unprecedented loss of jobs amid the Virus Outbreak. Saudi aramco is trying to support oils nascent recovery. Documents seen by bloomberg says the company is prepared to look prices for most of its june shipment while coming out. Will doays they whatever is needed to support prices. At least 11 people have been killed in a gas leak at a Chemical Plant. Thousands of people have been evacuated from the city. Theincident came following easing of indias nationwide virus lockdown. About 400 people needed hospital treatment. At least 20 are said to be in critical condition. Will 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. Yvonne. The risk seems to be the back of the table year as we enter this training week. We are on course for modest gains here. The u. S. Prospect of and china improving when it comes to the trade negotiations. It will continue to teat to keep talking. They will keep bowing to maintain those commitments during the phase i trade deal. U. S. Futures are up 1 . Riven be is also stronger as well. Stronger as also well. Yield, you canar see that trend where bonds are up. Here is a look at how singapore banks are faring. They are down and in the red. Singapore lenders are bracing for a wave of bad loans stemming from the coronavirus pandemic. This caps the worst earnings season in years for singapore banks. Lets get analysis from eugene, the Vice President at moody investor service. Eugene, good to have you with us. About the prospect of npls. Deepest recessions the region just this morning, ocbc mentioned that their ncos over two years might reach as high as 3. 5 of their loans. From 1. 5 today. This is a deterioration. Increase i a huge would say. Whether ithat is a provision for those npls, that capital is not affected. That is the key we are watching. Speaking of provisions, do you expect provisions to increasingly hurt the bottom line given expectations of a recession . Indeed, provisions will continue to increase. Our expectation is that provisions will probably be next year only. This is when your moratorium on loans will be lifted. You can see the true reality on the loan book. Banks are able to spread those provisions over a twoyear. Maybe even a three year. Would be the best outcome. Thehat does this mean for Credit Profile of the singapore lenders . Are they coming from a place of strength . Is liquidity an issue . Indeed, their Balance Sheets have never been stronger. Strong. Is pretty liquidity is and also very strong. Liabilities he those are strengths that support the Credit Profile. The quality will deteriorate, no doubt about it. Importantother very things that make this comfortable with a very high credit rating. It seems that at this point, the fundamentals are sound. Is it enough to buffer against the pressures of the acid quality from the oil and gas segments . Banksf these singapore have exposure not to just the Oil Trading Companies but the collapse in oil. Indeed. So far, those buffers have been enough. Oil and gas is a risk factor. If you quantify the oil and gas exposures, this is about 3 where you will be and five and 6 of loans for ocbc. It is not a huge amount we are talking about. The banks expect more from those oil and gas buyers. Have seen the likes this is an area that we are watching particularly for the traders. I was going to ask about other vulnerable sectors. How much exposure to these lenders have to other sectors out there that are perhaps a little bit more beatendown . Indeed, all three lenders, we other corporate sector think it was airline, the hospitality industry. If you combine all of that oil and gas add the part as well, you will have 10 or 20 of the loan books in those more vulnerable industries. Then the big question is what leading. Hat will be this is a good question. Far, the singaporean lenders than inmuch different the last couple of weeks. Eugene, if youre looking for some silver lining, would you is one . Loan growth eugene this is indeed happening. Corporates are growing credit lines. This is what is driving as had increases. This is a global trend. More likely than not, that story will come through in q2 and q3. All the corporations wanted to cash in on these lines have already done so. There will probably be less than that. This is important for your capital ratio. Part is on your wicker loans. This is what we are watching basically. Deteriorate,will you will have a higher rating on those weaker loans. We are washing that carefully. Watching that carefully. From moodysugene investors service. Singapore banks still to come. First facebook and now vista equity partners. The platform getting another boost. Billion. Was 1. 5 details next. This is bloomberg. Asias richest man is said to become even richer with a billiondollar injection from vista equity partners. The company is purchasing a 2. 3 stake in geo pad forms. Reliance industries is up by almost 3 on the news. What do we know about this deal with vista . This is a Digital Platform Company being bought for. 5 billion. Making the private equity from the largest investor. Cute more. Ng to exit this will enable them to launch more applications across the country. There are still a lot of cantions about whether they trim the debt. Can they bring that net debt to next to zero by next year . That is a promise made by the chairman during his speech in august of last year. Levelea was to bring that by next year. The deal showed pull up a deal with facebook for 5. 7 million. Million dollar investment by another private equity player. Theyre expecting more such deals in the making. Thing part of that strategy of bringing down the debt is potentially selling some parts of the business. Your team has been looking into some of the things they could be starting to shed. In particular, the asian paints unit. What more do they know on that front . Coming into the marketing. There also talking to Investment Bankers to find an opportunistic time to set up these kinds of markets. They are trying to do two things. They want to reduce the net debt also timed then there with Technology Partners to launch their own ecommerce applications. That was our reporter joining us from mumbai. I just want to bring an update on the Chinese Company that is planning on bringing its ipo to the u. S. Milliond to raise 510 in a u. S. Ipo. This is the official confirmation we have gotten. At least from our team after isr reported this earlier as well. This is the First Chinese accountingce the scandal. A lot of questions about whether there will be some suspicion about these types of Companies Listed in the u. S. Our Foreign Investors going to be able to gravitate . This is want to watch during the u. S. Session. Uberg way to turn for after the ride hailer saw its first ever drop in bookings. This is bloomberg. The economies around the world are still in freefall investors should not inspect of v shaped recovery. The idea that is ignoring these numbers that are really awful. Theyre hoping there will be a v shaped recovery in the third quarter. We are still in a freefall. Shapedexpect a v recovery. It has fallen only 20 . People expected that theyre going to go back to 170. The economy is going to go for a ushaped recovery. Theyre going to be back to 140 next year. These valuations dont make sense. Economy in the corporate sector and the household sector, everybody has to save more and do less investment to repair Balance Sheets. Reducing spending, consumption for household, labor cost for the phone sector. Get thet know how to v. We have zero policy rates and tenure bond yields at 0. 6. You can have much higher ratios even if the economy is just liquidity. Liquidity can only sustain markets for a little while. Liquidity, look at earnings yields, right now, there is only 400. Youre not even compensated. There is no guidance. The market has delusion about the shape of the recovery. By the quiddity. They have been trading new accounts by the millions with online brokers. I am not sure how many unapplied people have been participating in this market but i would say about the shape of the recovery. Spend a little time talking about that. What is the policy initiative that could come from washington that would make you more hopeful about the future . A massive monetary stimulus, massive fiscal stimulus. Even the policy mix is somehow biased toward wall street and not that more toward not that much toward main street. Workers, what is wall street . Large corporations, large banks and large initial institutions. If you look at what they have done, the backstop is highly risky. High yield, highgrade commercial papers. With a bailout of wall street, demand is going to main street. Market sense, the stock reflect the economy. They have people who have lost their jobs. They are going to go improve their Balance Sheets, they are going to do it at the cost of workers. They are going to stop hiring people fulltime with good jobs, good wages and good benefits. Everything is parttime workers, hourly workers. Contractors, freelancers, you name it. The same thing will happen. Nouriel roubini. Lets take a look at the earnings now. Uber rose after the bell. The Company Reported a decline in ridehailing customers for the First Time Ever but says the worst appears to be older over. A surge in food delivery sales. We see that in new york when so many were confined to their homes and were definitely ordering out. That surge in demand for over everffsets the first ridehailing service. They were up just by the fact that they announced that the business had fallen off by 80 in april. They also said the worst is over. They see the u. S. Coming off the bottom. If you look at that big chart, you can see where the stop cratered. They are also a major investor in the largest ridehailing operator in china. By april they had already withdrawn their financial forecast for the year. Again, they had taken a multibilliondollar charge of the investment, analysts were expecting bad news. The quarterly net loss came at 2. 9 billion. That is nearly triple the loss of your go. The good news is theyre probably going to be able to show an adjusted profit by 2021. That is what they are saying. That is also a positive piece of news even though it is unlikely that well get there this year. The real bright spot was the food delivery service. Atr reads, bookings came in 4. 6 8 billion in terms of revenue. At 10. 8esharing came in billion. Again, the homebound customers where the saving grace by boosting the demand for food. Uber faces a move that could change their business model. What is the story . Are comingt and uber up with a model that is based on gig workers. California says they are violating a law that enables the drivers to get employee benefits, life insurance, things like that. If the Ridesharing Services were to lose the case, they would face substantial new costs. It would alter their Business Models and some are saying it states toe other follow californias lead. Take a look at bloomberg. Thats go into the chart that we have for you. Both lyft and uber. Relatively recent companies, they had a rough start out of their ipos. They had yet to rise above where they started. Willnearterm period continue to be a challenge for the stock price. Lyft did surge. Analysts are concerned that even though there is evidence of resilience in the business, these Ridesharing Services are going to be under pressure while this pandemic continues. Back to you. From newnan joining us york. Lets do a market check before we go. Indias markets opened a couple of minutes ago. Continuing this risk on trend, we are up. The rupee is seeing a little bit of pressure. Not a lot of movement there when it comes to the bond and currency markets. This is out of alliance. The big news is that vista will buy a stake in the geo platform for 1. 5 billion. That is the third deal we have seen in a month for the company. Also, watching the likes of asian paint as well. That stock falling for eight straight days. The reliance is eyeing the sale of the stake of 985 million. Premuch in line with a positive sentiment across all of asia. Good news when it comes to the china trade. Tensions that seem to show some kind of of Bloomberg Markets asia. The best of Bloomberg Markets middle east is next. This is bloomberg. The following is a paid presentation brought to you by rare collectibles tv. Announcer containing nearly half an ounce of pure gold is only two coins of the that the legendary sculptor agustin assange got in was agustin assange gardens was responsible this letter