More deaths from the coronavirus as cases approach 5. 5 million. The u. S. Bans entry from brazil. Violence returns to hong kong as protesters announced chinas new security law. Washington said it could be the death knell for asias leading financial center. David quite a stark and dramatic drop. We will talk about that more. Risk off, a lot of markets are closed today. We are off a few points for the s p, nasdaq and dow. Whiteutes or so, the house saying trump is restricting entry from brazil. There is a 1 retracement in the bloomberg dollar index, higher as we go through. You can see downside following the 2 less drop we had on friday. Indi and given is holidays the u. S. And singapore, trading for the futures session in asia. We are seeing modest upside going into the start of trading in tokyo, korea and australian richard looking higher after closing out the week down ralia after ofther easing of lockdown restrictions in New South Wales and victoria states. This is the week more australian schoolchildren are returning to classroombased learning. We are watching developments in new zealand as well. Currencies are pretty muted although we are seeing the aussie dollar and the offshore yuan trading softer. Chinas foreign minister has warned the u. S. To give up what he calls Wishful Thinking about changing china, warning some in america are pushing relations to a new cold war. Lets bring in selina wang. What else did he say . Carol he warned that some in america were pushing relations towards a new cold war after relations between the two countries reached new lows, widening the gap with trade and more. Take a listen to what he had to say. China has no intention to change the u. S. Or replace the position of the u. S. While it is impossible for the u. S. To change china, the u. S. Cannot stop the historical process of the 1. 4 billion Chinese People towards modernization. Some u. S. Political forces are hijacking the bilateral relations and pushing them to a new cold war. Spiral the downward being exacerbated by chinas introduction of the Hong Kong National security law which would criminalize Harsh Criticism of the ruling party. He warned the u. S. Not to challenge chinas red line on hong kong. This after secretary of state mike pompeo congratulated taiwans president on her second inauguration. The foreign minister saying reunification between the two sides is an inevitable trend of history. No one will stop it. David suffice it to say by the day, relations and tensions between the two are ratcheting up on many fronts, trade being one of them. Talk to us about the new and incremental implications on oh one hope is the phase one trade deal with china said it is which china said it is going to do that. But Kevin Hassett told cnn the u. S. Is studying penalties it could place on china related to the Hong Kong National security inflation. This after china approved legislation that could lead to Chinese Companies from being barred on trading on u. S. Stock exchanges. Our Bloomberg Economics said with the economy already in a historic slump and fears of a slide back into u. S. China trade war, the Great Depression is getting harder to ignore. And these capital flows [indiscernible] even harder. You have the world banks incoming chief economist declaring localization is probably dead with the flaring trade tensions between the u. S. And china supporting that. David lots of good news. Think you so much. Our china correspondent. We will be getting a lot more perspective on Chinas National Peoples Congress throughout the day. We have barclays coming on to talk us through the economy and 21st century china, joining us all later in the program. Lets get over to new york. Police hong kong arrested 180 people after using to your desk and Water Cannons. Teargas and Water Cannons the biggest rally in the city since the outbreak of the virus came after the new security law, electedg elected the legislative council. They say this proves the need for the new measure. U. S. Coronavirus cases jumped 1. 3 in the last few hours. They are closing in on what hundred thousand deaths 100,000 deaths. Brazil has the secondhighest number of cases. But the areas around milan, hardest hit in italy, reported no fatalities for the First Time Since the outbreak began. Japanese media says the government will lift the state of emergency in tokyo as cases decline. They will lift restrictions on monday ahead of schedule. There were 14 new infections on sunday, the most since may 16, but the overall rate has allowed the government to lift the lockdown. Businesses are in within in australia are without power. A cyclone with window 100 Kilometers Per Hour and a storm up to eight meters. The worst of the storm may not hit until later monday as the system moves across perth and heads further south. 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 still ahead on daybreak australia, we are assessing the Market Outlook with region atlantic partner and cohead of investments. He has five years of trends. We will give your take on the Consumer Outlook next. More analysis on the sectors recovery in china. What it foreshadows for the u. S. Our next guest will go through alibabas earnings later on. This is bloomberg. David welcome back to the program. Early monday morning, have a look at futures. ,e are also getting out of bed so we will see what happens. U. S. Markets are shut for memorial day. Keep that in mind as well as asian equity markets. Not as representative as you might wish, the price action today. Lets map out the week for you. Our partner now, andy, joins us over the phone. Good morning from hong kong. Top of mind for you this week . How do we andy . How do we assess the . Ends when i see a crisis i am as a gameto see it changer, that it will materially change the near future, but in this crisis, it will bring it forward. What i like to think of, there is a lot of trends already in play, that we will see five years worth of change in five months. When the lockdowns end, we are not going back to february 2020 but 2025. [loud meowing] david ok, all right. Andy. Mate to be quiet. We can talk to him or her in a moment. I am not sure they have an equity here in opinion here in a way markets, which are up 20 . Are we trading on hope if you buy into these levels . Trading onink we are optimism. It is not irrational. The markets are responding to a couple of actors. One of them is hope the lockdowns will end relatively soon. Life will get back to normal but one of those factors is an unprecedented amount of Federal Reserve stimulus, centralbank stimulus around the world and never before seen and also unprecedented amount of government stimulus in every measurement in the world. To look that in the face, recognizing we are seeing the biggest economic collapse since the Great Depression, on the other hand recognizing we are doing something differently from how governments intervened in the late 1920s and 1930s. There how much doubt is of a Consumer Recovery not just in china and the u. S. But a Global Driver of what shaped this recovery takes shape as . Structurally what does it look like . Andy the consumer is the linchpin here. What we dont know is how strongly the consumer will come back when they are allowed to go through the normal day to day trapping of what they have been used to doing. There is some interesting early and anecdotal evidence coming out of china because china has experienced this sooner than the rest of the world. They are six to eight weeks ahead of europe and the u. S. Starbucks is claiming their storefronts in china are back to about 80 of previrus day today sales day to day sales. 20 decline is not good for anybodys business. It will take a while to get back to normal. Normal will not happen until well into 2021. Is it a more deglobalized normal we are bracing for, even before implementation of that part of phase one trade deal . We could be on the cusp of another global diplomacy and tariff war. Deglobalized normal is what we are going to experience in the economy. I would say that was a trend that was already in play. We had a detente between the u. S. And china in late 2019. We were on course to make compromises and deals. In an otherwise strong trend. Deglobalization was going to be a big drive throughout the 2020s. We saw it with rex it and the election in the u. S. Brexit and the election in the u. S. This will undo five years of globalization. The impact of the coronavirus will tell Business Leaders it is important to be selfreliant. The look a lot of the weakest links have been relying on trading partners and in some cases trading partners have proved to be unreliable. The next question when you come back is whether or not ps potential growth moving ahead. Have a good weekend. Paribas sees a softer slower recovery ahead than initially hoped. The pandemic will also change the way it views is workforce with changes to real estate and travel. The u. S. Head told us how that is affecting is returned to office plans. We have 90 of our staff working from home and the bank is open for business moving full speed serving clients. Return to the office, we are planning on very with a lot focus. Istency and i would say you should expect it to be gradual and through phases. We will get our staff back on premises and we will assess how the pandemic evolves. We will do it with state guidelines and policy. We are engaging with employees. Feedback is important to us. I see three concerns. One is commuting. The second is around testing. There will be different kind of testing and the third is around social distancing once back on premises. Some of the other banks have been looking at setting up a temporary office in the suburbs are only bringing back capacity or only bringing back capacity to do you have any specifics . Havech Business Model we will have their own criteria in terms of timing. As it relates to bnp paribas, i dont expect for phase one more than 15 back on premises. There is no rush, no urgency to get back because the bank is functioning effectively. What you told me 2. 5 months ago we would be operating successfully with 95 of the staff working from home i think i would have been hardpressed to believe you. Getting dding. No ki are you looking at a smaller rental space, smaller office space, footprint, less people in the office . Facebook said that would be there way forward. Highlightingu are another important point which is what kind of structural changes we might be experiencing. You are working from home, going to be a trend to last. There will be collateral consequences. The one you mentioned, i believe companies will review their real estate footprint in the dense urban and various urban areas. We are getting used to Business Travel and doing it digitally. I see the structural changes coming from my clients this time. Domestication of supply chains, economic, independent , on theould be a way planet rate is increasingly financially to contribute to job creation. Insight. Is good i am interested, i know you are ahead of the usa, but you will have insight for the rest of the world. Do you get a read from your clients which region will recover the fastest . We have a view on asia, europe and u. S. Eurozone and u. S. Here. Across, it will be a softer, slower recovery than we would have hoped for initially. Retraction, in the u. S. Around 6 , eurozone 8 . Paribasst was bnp u. S. Head. Oil is giving us gains after closing higher for four straight weeks. Will improving supply fundamentals offset increasing growth fears in china . This is bloomberg. Up some ofis giving those gains after closing higher for four state weeks, investors weighing improving supply fundamentals against the growth fears and geopolitical tensions. Today . Driving sentiment a few days ago it sounds like one of the factors driving the gains was expectations of a return to full economic recovery activity in china. We are seeing a continuation of the move on friday. We ended the day with a 2 drop on friday. Started slightly higher than ramped into negative territory. The chinesemove was move on friday to abandon their growth target for 2020. Over the weekend the Chinese Foreign minister warned of a new cold war with the u. S. If american leaders continue to ratchet up their rhetoric against beijing. That sparked nerves this morning. You can see that filtering through in terms of the price action. I would caution against reading into it too much. It is still inside a range. Formarkets are pausing breath after that strong rally which you pointed out at the top. Got four straight weeks and as you alluded to, we are seeing a lack of strength. Take us through the next few days. What is top of the agenda we should be tracking . James what is interesting this weeks we have got a big range of oil meetings from the big totalies, chevron, exxon, and bp. That will give an interesting insight into how the big producers have been hit by the price collapse we have seen. The other thing worth noting is the russian president Vladimir Putin giving his government a deadline of june 15 to give his government to come up with a plan to help the oil industry there. We are going to see signs of tensions and stress emerging this week. People are strongly focused on those lockdowns being lifted and what it means for demand recovery. Failing that we have had quite a nice recovery. This week might be the week of consolidation and there might not be too many people worried about that if we manage hold study and hold these gains we have seen in recent weeks. Haidi our Energy Reporter james thornhill. Thank you for your time. Theill get more analysis on commodities complex with cba and trade flow joining us. A quick check of the business flash headlines, baincapital is preparing a second round of proposals for Virgin Australia saying it has the strongest case of any of the remaining bidders. Of four. Ne deloitte saidtor it wants banking offers by the middle of next month. Rhymedy says Amazon Amazon primes aircraft fleet will grow in the next few years. Depaul University Said while other airlines are downsizing, amazon is on ambition to up timetable. It would create a Delivery Service that would threatening and would threaten ups fedex. Mounting pressure to isolate sk hynix. Huawei has biggests among the customers for these chips, spending 1 billion each year. Hong kong sees its biggest rally since the virus as protesters reject china security laws. This is bloomberg. China has become much more aggressive from the international stage. We should not be calling this a trade war but a full spectrum strategic competition. This is the type of confrontational developments on both sides of the relationship you would expect in a cold war. The only is the American Companies that have the supply chain problem, but it is the Chinese Companies as well. It captures the challenges of the u. S. China relationship, growing tensions over geopolitical flashpoints even if the two sides are trying to keep the phase one deal intact. China will be a central focus in the u. S. President ial election. Joe biden and President Trump have advocated the relatively i think hawkish position towards china and china trade. The u. S. And u. K. Will be taking the lead on the hong kong issue. What you hear is we have got to draw a line and this line has to be firm. Some of our guests weighing in on the mounting tensions in the u. S. And china. Here we go again, almost 200 people were arrested as protesters denounced chinas security plans for the city. Stand rightong kong now . Stephen renewed street classes in places like causeway bay, one of the most densely populated as well as Retail Center of hong kong. We had pitched battles of at arrested mostly for illegal assembly. They have the social distancing religion still in place in hong kong in the aftermath, not even the aftermath, in the midst of the coronavirus outbreak. Four Police Officers were said to be injured. Members of the public as well. You can see the footage and videos being passed around the community of protesters, attacking innocent bystanders or Police Coming up to people who were not provoking Police Officers but being sprayed with pepper spray. You can twist it anyway you want 30on a 32nd clip second clip. We have not seen this in several months. We went through the coronavirus. Utbreak with relative peace the police did bring up the water cannon trucks, they did fire tear gas as protesters gathered to oppose the new National Security laws proposed late last week at the legislature in beijing. Protesters will continue to fight. More protests are scheduled. Estimate news puts the in the hundreds. Others in the thousands but nowhere near the numbers we saw last year. Estimates by the protesters of one million or 2 million people. Maybe this is getting momentum or perhaps some people in society, quite a few, or having protest fatigue or plenty of fatigue because of the outbreak. One of the most prominent activists since we must stand up and let beijing know we will never surrender. One of the biggest questions remains how washington response to beijings move. Do we have any further last week we were hearing news of new bills potentially that would be that reaction. You heard a crosssection of views in the soundbites before this report. Saying what can the United States do and will this be the new flashpoint or resurgent seashpoint in the ten u. S. China relations . Mike pompeo is waiting weighing how to respond to the new security laws. The options include sanctioning chinese officials, putting tariffs on hong kong goods. Hong kong is a reexport center of chinese goods for the lower of hong kong. Saying if youews revoked the privileged trading status the u. S. Puts on hong kong, you are really hurting hong kong more than perhaps what they would say would be the perpetrators, which is beijing. The foreign minister of china, he tried to assuage all of these fears. He spoke yesterday in beijing. He says it will not affect the high degree of autonomy hong kong at choice, nor the rights and freedoms of residents, nor the Foreign Investors in hong kong. The index was down 5. 5 , the biggest fault since july 20 15 2015. L since july he said people should have confidence and dont be to worry. There are look of worries given what the American Chamber of commerce said. Vaguely defined law is what is concerning a lot of investors. Hisfinancial secretary in blog post try to allay fears as well that the move will not threaten confidence in the financial sector. What are the next steps . We have to watch the npc before we get to see what that law will look like. Give us a rough timetable. Stephen there probably will be more protests coming up. One protester was quoted in Bloomberg News saying the unrest could turn more violent. He said i must take every step i can. But in beijing it is their move now as the National Peoples congress will be debating this likely move through to on next steps of approval may 28. And then the Standing Committee which generally convenes every two months would have to have its rubberstamp approval, then we could see the imposition by august at the earliest. Summeroing to be a tough for hong kong as we head towards the october elections. 2019 all over again. It was rough roughly 12 months ago when we were in the same boat. Thank you so much. We will talk more about this and dissect the story in the program. Program twon the hours now. Australia continues to use its lockdown but the government is under fire for 40 billion welfare bungle. The details of that story and access money, or is excess money, or is it . This is bloomberg. Karina you are watching daybreak australia. China says it will never return to a planned economy and will let the market decide its futures. Speaking of the sidelines of the National Peoples congress, the foreign minister says china should not be changed by the u. S. It was drifting towards a cold war. North Korean Leader kim jongun is testing relations with the west calling for a step up in his countrys nuclear capabilities. He told military leaders they should boost north koreas arsenal. He promoted senior weapons experts. State media did not say when the meeting happened, nor when he wants what he wants the strategy to be. Benjamin netanyahu is the first is really Prime Minister to face a criminal trial while in bri e, denying charges of bes and fraud. S asking said it is a leftwing scam. And spacex has completed final preparations for this weeks launch carrying astronauts to the space station. It is americas return to missions. Rewed this is the first one since the Space Shuttle was retired in 2011. Nasa has used russian soyuz rockets since then. 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 many studies heading back to school in australian states. More workers are expected to return to offices. As lockdowns ease, the government continues to get criticism over a stimulus bungle. Paula live joins us. What is the latest on lets start with the easing of restrictions in major states. Paul they are back to school for New South Wales and queensland after two months of online learning. Wales,ne 1 in new south bars and cafes will allow 50 people together. That will get them back to normal. There was reluctance among some of them to open under the 10 person limit. People can doa 20 it from june the fifth. Every state is doing its own thing and the federal government changes the guidelines as the federal government changes the guidelines. Queensland is keeping its borders shot while other states shut while other states open. The country will be opened to new zealand. Australians can visit new zealand before they can visit queensland. David i want to talk about this number that is there and not there, money that is supposed to be raised and might not be. Bond curves ,lattening or flatteners because they will be a reevaluation of how much money australia needs. The comes to the story coming under pressure from his calculating the size of the job rescue package by 40 billion u. S. What is being said . Paul miscalculation is an understatement. This is the job keeper plan which subsidized employers to keep workers during the shutdown. The initial cost was 5 billion u. S. , now it is 46 billion. The government says it is because people felt out the forms wrong. The treasurer says this is good news because the budget will not come under so much pressure. But the opposition says that is a huge bungle. How can you make a mistake a big . They want the treasurer in front of the Senate Committee to answer questions and examine Government Spending and expenses. The treasurer called this political point scoring and Scott Morrison says the problem rests with him. We have all had a rather pleasant surprise as a result. Scratcher. Ad baincapital is preparing a secondround bid for the collapsed version of it Virgin Australia. What do we know of the next deadline . Paul baincapital on the short list of four bidders. Md, he saidased bain have the strongest base and that aviation will not return to normal anytime soon but they are here for the normal and they had the long haul. Brookfield rejoin the process. They pulled out because they felt there were too many bidders and two short a time frame. Sources say they are back in discussions with deloitte. There is a chance the short list could be expanded to five. Dont have the money, we know where to look for it. Paul allen, joining us live. Alibaba reported earnings, beating estimates from pandemic related shopping but it logged its worst quarter on record by one measure. We will talk about that coming up next with joseph berger, ceo of a research firm. He will join us to debrief us. This is bloomberg. David lets get you the latest business flash headlines. Looking at lufthansa, nearing 10 Million Dollar bailout. Germanys exit from the direct stake it would take in the airline with one report saying lufthansa would face a threeyear deadline for repayment of any aid. Berlin had hoped to make a final offer this week. The talks are dragging on. Reliance industries has launched its Online Grocery portal across india with them aiming to operate in 200 cities currently in lockdown. They have run a Pilot Project around mumbai and are expanding. This takes the reliance chairman a step closer to challenging amazon and Walmarts Flipkart and the ecommerce market. Naspers and a group backed by a german publisher are said to be among the suitors for ebays classified advertising business. Axel springer has teamed up with kkr4s offer. Also joining the bidding. The unit could fetch between 8 billion and 10 billion. Shares declined in new york on friday. With we will stick ecommerce. Alibaba benefited from pandemic shopping, but the better than expected 22 Revenue Growth was its lowest on record. The company is facing rising new challenges from the competition and disruption of u. S. China tensions. Joseph berger joins us. Was it disappointing and surprising to the downside we did not see alibaba come out as one of the few obvious beneficiaries . We saw their Cloud Business growing. We saw growth in ecommerce but it was the slowest we have seen in a long time. Holding the thing alibaba back . Clearly it was a tough quarter, march was that time when the pandemic was in full effect. That is when things were challenging. Of came out of a slow month february with Chinese New Year and things to not ramp up the way they normally do. The copper bowls were tough for them. We think they did well. Q2 being a lot stronger and , butng prepandemic levels clearly february and march were tough months for them given the situation on the ground. Haidi if your an optimist, you say the economy is back to full capacity, the return story is getting does that mean should get a return for alibaba or is the downside further to come given the macro picture globally . One measure is the sentiment of the merchants. We do a story of a survey of alibabas merchants and others. It is quite good. Better than the other three, but we are seeing pindodo starting to pick up. Based on our assessment of the market, we are coming into a very break promotion period with the june promotions on all three platforms. That generally is a catalyst for growth. We think that generally things will start to come back to a more normalized growth rate as the year progresses. Despite the economic headwinds that are there, online tends to do better in these situations than the offline market would. David joseph, david in hong kong. Alibaba is really a proxy when you look at the data that you have analyzed on the ground of the health of the chinese consumer. When you look at what they are buying, is there a sense based on highfrequency data that there is a preference . For things other than staples at the moment . It is one of the areas our data is showing i think the staples are definitely the stronger areas. Things like home decor, improvements and Consumer Electronics tend to be the stronger growth areas in terms of ecommerce category screen we are seeing sluggishness categories we are seeing sluggishness in luxury goods. We may see a shift that may take place in june as promotions take effect because those are the categories, discretionary categories tend to do well because they are heavily discounted during the june promotion. It is yet to be seen. We are watching this closely. Comes to thet enoughtself, do you have visibility to say whether or not the stock is valued, chief cheap or expensive . A look at alibaba from you lookstandpoint if at the fundamentals of alibaba, they are clearly starting to, the growth rates are starting to normalize from past years. We are starting to see them come in from a time of normal growth. There is some uncertainty as the year progresses. We think they are wellpositioned as people have accommodated the Online Shopping approach to life. We think that will bode well for. Hem along with jd and indodo all three will do well because of the fundamental shift that took place during the lock down. Priceariety and sensitivity, those Online Platforms tend to do better during uncertainty. Haidi for all three of those businesses, how much uncertainty is being potential to do list Chinese Company delist Chinese Companies in the u. S. . We are looking at the core businesses of alibaba and the other platforms in china. That is where their business is. I said, we think it will continue. We dont think businesses will be impacted. Policy related issues. Our focus is on tracking their performance in china. David have a good week ahead. Thank you for your insights. Joseph berger joining us to debrief alibaba. Look at where you are market wise, fairly quiet start. A lot of markets are going to be shut today. Liquidity this time of the day, new zealand, that is what we have so far as well. Features indicating you might get upside. Does it last . We will have to wait and see. One thing we are watching his hong kong following the epic fall from grace at mci hong kong. Natasha, pluslow Leslie Russell from the mens the center from Health Policy coming up to discuss the big stories of the day. This is bloomberg. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. David welcome to the program. I am david ingles in hong kong. Happy monday morning. Welcome to daybreak asia. We are Getting Started with renewed tensions between the u. S. And china. China is rejecting a planned economy and saying the market will decide and warning the u. S