To rise. S continue the u. S. Now topping one million american deaths, now surpassing the total suffered in the vietnam war. President trumps top infection expert says the virus is not truly going to go away. Anthony warns any reopening of the economy must be prudent. Breaking news out of south korea right now. We are getting march Industrial Production numbers. When it comes to the month on month figure, a gain of 4. 6 . This was a much bigger than gain then was expected, reversing two months of declines. When it comes to the year on your number for Industrial Production, it is a gross search of 7. 1 percent again. The expectation was at was for a contraction. We have seen the south korean economy really battling the coronavirus pandemic. We had seen First Quarter gdp sinking seeing the biggest drop since the financial crisis back in 2008. It seems that we have a little bit more optimism when it comes to the Industrial Production side of things. We are going to get samsungs final earnings later on. We saw at least in their Industry Semiconductors coming in, beating estimates in the preliminary report. Take a look at what markets are doing at the moment. We are seeing qe Stocks Holding onto a slight gain right there. Remember, he restocks have been on a rally. They are the best performing stocks across the asiapacific since the march low. Seoul futures closing like this. U. S. Futures under a little bit of pressure. We saw the s p 500 lower in the session being led by tech when it comes to those declines. Wti at the moment gaining ground, close to that 13 a barrel level. U. S. Stocks snapped their winning streak but as you can see from this chart in terms of stillvery, they are outperforming their peers. The s p 500 is beating the msci and stoxx 600 since march and now, our next guest sees this continuing. Joining us is a senior portfolio manager, rebecca. Great to have you with us. Do much does this have to with the support we are getting in the u. S. Government, not to mention from the fed . What can we expect more from the fomc meeting this week . Certainlyell, we have gotten a lot, not just here in the u. S. , but globally. That investors are willing to discount a recovery. In 2021, 20 22. The way the market has recovered , we believe we have to be cautious because it could have gotten ahead of itself. Haidi we did get the Consumer Confidence index in the United States dropping to the lowest since 2014, but at the same time, a sector of that index expectation rose. What does this tell you about how long the contraption that we are seeing because of the coronavirus pandemic could last and what would that mean for the markets . That was encouraging, wasnt it, to see expectations rise . On of the things we are keen is the retail earnings are or that will start coming out next month because they are on a different fiscal year and since the consumer is so much a part aredp, certainly, investors willing to discount ahead but until we see a robust resumption in consumer activity, i think it would be difficult to forecast true a true sharp rebound in economic growth. In the retail sector, it supports about one in four jobs in this country and contributes a significant amount to gdp, so when we start seeing some of those Big Box Department stores, electronics retailers, and that sort of thing next month, that is going to be a really important signal as it relates to the resumption of consumer activity. With Consumer Sentiment, consumer behavior, and, you know, the dislocation in the labor market, potentially, you are looking at businesses and jobs that simply do not return. We know that typically, those tend to be the grim reality and periods of high unemployment and recession or depression, so should we be managing our expectations of how sharp how much of a robust recovery we get across Consumer Sentiment and retail spending . Rebecca i think you make a very good point because even if we restart the economy, we already know it is going to occur differently as we move across the country and it is going to occur differently as we move across the industries. If we think of our own workspace, if you go back to work, and instead of having 10 folks in an area, you now have five people. You have to wonder what the implications are there. When they switched to the consumer and you think about, particularly the millennial generation, and younger folks, they do not spend as much on south. They spend more now on golfiential, so travel, simulations, things like that, and you have to wonder, how willing will they be to go to a concert . Theres a lot of unknowns and that is why it is puzzling we have seen this surge back in the market. Have seen a number of asian markets as well bouncing market territory. I am wondering whether you would consider allocations beyond u. S. Equities given that we are expecting to see the earlier and perhaps stronger rebound here in asia. Actually in our longer horizon portfolios added back some emerging markets, japanically in the asia area because you did see economies that had reopened and they experienced a different trajectory than we had here in terms of the virus. We are underweight international. Our longer horizon portfolios, we added emerging asia. Shery much of the market rally comes because of optimism of some economies starting to reopen, but we continue to hear from Health Experts at the coronavirus movie will not go away anytime soon. It could perhaps be here to stay. We continue to see these restrictions get back in place and then again flareup, so how will that affect Market Sentiment . Well it already be priced in at that point . Rebecca it is hard to say because you hit on a very good point. We are experiencing a Health Crisis. This with come into an economic crisis but the Health Crisis is forefront and we dont have any time soon expected that would suggest that test, ora cure, a whatever, so really, the only mechanism we have used to flatten the curve was social distancing. That being said, it is hard for us to envision us not being range bound. We are expecting we will balance around in that area for a while. We have not been able to hold above 3000, and you would have to see that for quite some time in order for the trend to turn back up because the 200 Day Moving Average is still falling. Those types of things are what everyone is watching, those technical indicators, but it will be hard to push through without some breakthrough on the health front. Shery stocks are not cheap, are they . Rebecca no, and estimates continue to fall. Just this week, we are hearing more and more revisions downward so if you think about where we came into the week, i think consensus for forward numbers was 148, which was down from the one 70s, and even there, we are at 19 to 20 times on a forwardlooking basis and that is well above the fiveyear average, 16. 5 times, and above the longerterm averages, so people are optimistic as it relates to a recovery, but when that recovery occurs, i think it is still a gas from all of us. I mean, how much do you apportion to caution . How much cash would you still be holding onto . Much haven alternatives would you be partitioning onto as well . Rebecca generally speaking, in our balance strategy, shorter horizon portfolios, we have gone underweight equities. We have got more fixed income now than we have had in several years but we are still only a couple of points overweight fixed income, and we do have some cash. As we move further out the curve in terms of our seven year to tenure strategies, we have a little more cash. Wein, just as a buffer, so are sitting sort of in that cautiously optimistic territory but we do have the flexibility, and we would be willing to take more out of the risk bucket, if you will, and flip it into cash or fixed income. If we do see a breakdown either in the technicals or if the Economic Data just continues to deteriorate to a level where we have been, you know, where we know we can be even cautiously optimistic. Riverfront Investment Group senior portfolio manager, rebecca, with us. We are just getting some breaking news when it comes to amc theaters. The Movie Theater company saying really responding to these comments from universal, saying it plans to release more movies to streaming platforms as well as to theaters. Letter tohas sent a the chairman, donald langley, saying the policy affects any and all universal movies going into effect today. Amc saying it will not be playing universal movies Effective Immediately and saying they will not license any universal movies under these terms. They find that categorically and acceptable. We will be getting more updates on that, but certainly, we are seeing that response from amc theaters to the universal policy of releasing its movies to streaming platforms as well as to theaters. Still ahead with samsung results to out shortly. He will be along with us to get his outlook on the chip sector. Coming up next, dr. Anthony fauci says it is inevitable that the virus will return next year. He gives us more on that and his views on how china handled the outbreak. This is bloomberg. You are watching daybreak asia. I am Karina Mitchell with the first word headlines. Saudi arabias foreign reserves plunged in march at the fastest pace in two decades as the oil crash hammers the economy. The follow more than 27 billion took the level to 454 billion dollars, the lowest since 2011. Last week, we said it would draw down reserves by 33 billion for the whole of this year. Brent crude crashed by more than 50 in march and has fallen even further since then. Latest pictures from north korea show the capital, pyongyang, operating apparently normally despite the international speculation about the health of kim jongun. He has not been seen since april 11 and missed celebrations for his grandfathers birthday. Some watchers claim he may be critically ill. A crisis. Ggests meanwhile, some European Countries are moving towards lifting virus restrictions with plans saying shops can reopen on may 11. Cafes and bars will have to wait. Its pain is using curves and says it hopes to return to a new normal. Germany reports the number of new infections fell below 1000 for the first time in five weeks , triggering hopes it will be able to relax curves. U. K. Confirms that more than 161,000 people have now been infected with the coronavirus with over 21,000 deaths. Includeres do not fatalities at care homes amid claims the infection is rampant in some institutions. The government says it is on track to test 100,000 people a day and will soon begin trials to see if they can treat covid19. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Haidi. Regrettable milestones have been passed in the u. S. The number of coronavirus cases have passed the one million mark. It means death have topped lives lost in the vietnam war according to data compiled by Johns Hopkins university. Lets get more as we get over to our markets going, Rishaad Salamat it. Even as we continue to see the situation in new york city showing some improvement, these numbers for the u. S. Remain terribly grim. Cases globally topping 3. 1 million. Deaths now passing the 216,000 mark. Severalay be easing in places. That certainly is not the case in the u. S. New york city reporting a decline in the number of people admitted to hospitals for this pandemic. Laying outrew cuomo criteria necessary for certain regions to reopen. The government did say it would be a miracle if new york city and down stay regions reopened in two weeks. New jersey out with a higher increase in coronavirus deaths than new york. That is the first time that has happened, and some at the moment some partsrts have met guidelines with declining cases in 14 days. President trump is planning to order processing plants to remain open. Illnesses in this industry and shifts in demands and restaurants have managed to close or disrupt the supply chain in recent weeks, and of course, economy is taking a devastating toll. Share price plummeting. The automated forecasting in more than 5 billion secondquarter operating loss. That is due to the global car industry, guys. In the meantime, a war of words between beijing and washington goes on unabated. China warning about the repercussions of future infections now. Rishaad absolutely. The Chinese Foreign ministry denouncing the white house trade advisor, Peter Navarro, as a liar. It is the latest volley between the two sides over this outbreak. The spokesman repeated that past rejection of Peter Navarros claims that the chinese side have held back supplies of vital personal protective equipment amid this pandemic, and of course, navarro has always been in the crosshairs of the chinese. He did write a book before he actually before it became a trade advisor. Confronting the dragon. Aina focuses on avoiding devastating second wave of infections. It is returning we have compulsory face masks, being deployed right across the nation. Chinese scientists did say the thenavirus adding to growing consensus that the pathogen will likely perhaps like the flues, does. That is largely because it infects some people without causing obvious symptoms such as a fever. Asymptomatic carriers and it makes it hard to contain transmission as they can spread the virus without knowing it. How is japan looking . They are entering golden week, but lots of restrictions in place when it comes to movement. Began tosome countries relax. Certainly not the case at the moment in japan with citizens being asked to hunker down in what is the busiest travel season of the year, exactly when we have the chinese new year, also seeing china have the worst of it as well. We have got Airlines Cutting flights. Local governments saying tourists should they away, and families have to cancel travel plans as well. According to a survey, we have got average spending during this extended break down by about 216 u. S. Dollars, less than half the spending during what we saw in the 10 day holiday last year. It is set to end along with that holiday, golden week, on may 6. An extension is not being rolled down at the moment as well. The government will examine data until the last minute, apparently, and make a decision on that at an appropriate time. What the appropriate time is, that is anyones guess. Shery Bloomberg Markets coanchor, and here in the u. S. , a top Infectious Disease expert says coronavirus is unlikely to disappear. Said it isci critical to maintain a prudent approach to reopening the economy. There is a little bit of remiss they are that people are going to look at when this is all over. Right away, they had said that this was a virus that jumps species in an animal market, and it only goes from animal to human, and there is no evidence whatsoever that it is transmissible from human to human. And if so, very inefficiently. That before, it was clear there was human to human transmissibility and china. Now, when we look at it retrospectively, not only was it bad for the rest of the world, but they hurt themselves because what they did is soon after the realization that there was this new infection, and to their credit, they put the sequence up on a public website very quickly. What they also did is by not letting their own Health Authorities know that there was transmission from persontoperson, they held Something Like a 40,000 Person Block Party in wuhan, which is the worst possible thing you can do, is to have a congregation as people when you have a virus circulating that has a high degree of transmissibility. Fauci, 56,000 americans have died from this. What is the latest, in your projections, of what the likely death toll will be based on all the modeling that you are now looking at . Dr. Fauci david, as i have often said, although models are helpful, they are only as good as the assumptions he put into the model, and often, you can be misled, as often as you can be helped. At 55,000. We are the model now has been upgraded to, say, instead of 60,000, it will probably be 70 plus thousand. Again, that is an assumption, and the assumption is based on how you respond, and here is what can determine how many deaths we have. As we try, and hopefully, everyone does it according to the guidelines for opening america again, which were carefully designed, and which i played a role in making the very conservative and very careful if, as we open up the country, economically and otherwise, if we have the capability to implement well when new cases occur, which they will there is no doubt that they will, as you try and relax mitigation if we have the capability of identifying, isolating, and Contact Tracing in a highly effective and efficient way, then the numbers will stay low. It may be 80,000, 70 thousand, like the model said. If we are unsuccessful or up,aturely tried to open and we have additional outbreaks that are out of control, it could be much more than that. It could be a rebound to get us right back in the same boat that we were in a few weeks ago. That is why we have really got to be careful, and very circumspect, as we go from a lockdown to a gradual rolling reentry into some sort of normality. Haidi that was the director of the National Institute of allergy and Infectious Diseases. Dr. Anthony r. G. Speaking to david rubenstein. You can get a roundup of all the stories you need to know in todays edition of daybreak. You are and, if bloomberg subscriber, on dayb , on the terminal. It is on the mobile in the bloomberg anywhere app. You can tailor those suggestio