Virgin australia tracks interest from indias largest by just budget carrier. Shery lets get you started with a quick check of how the markets are trading. We are seeing u. S. Futures under pressure, this after the regular session ended mixed. Markets pretty optimistic about reopening some parts of the u. S. Economy, but also a bit more cautious given that we have seen flareups around the world. The s p 500 finished unchanged. Health care led the gains, but financials weighed on the index. The nasdaq composite getting for the sixth consecutive session, outperforming again. The longest winning streak this year. Take a look at what oil is doing. Wti gaining ground, above 24 a barrel. This after it fell and erased earlier gains in the new york session. Tohave saudi arabias plan output, providing a boost but that was not sustained. We have opec given its Monthly Oil Market report on wednesday. Haidi in the u. S. , President Trump has responded to reports china is considering scrapping the phase one trade deal by saying he is not interested in restarting talks. Pres. Trump we signed a deal. I heard that too, they would like to reopen the trade talks and make it a better deal for them. China has been taking advantage of the United States for decades because we had people at this position right here where i am standing, sitting right in that office, the oval office that allow that to happen. Im not interested in that. Lets see if they live up to the deal that they signed. Shery our congressional government reporter emily wilson joins us from washington. This war of words has been going on for a few weeks and it continues to escalate. Emily yes, absolutely. We have seen trump initially criticized china. We saw china pushback. Last week, they were supposed to be doing trade talks and now we see this today. I think this is something where you are seeing the u. S. And china both politicize the other countrys response to the coronavirus. You are seeing trump tried to talk tough, act tough. Secretarywe know, lighthizer is still expected to speak with top chinese officials about the trade agreement. They have been doing this every six months. That is still on the books as far as we know. It sounds like trump may have been trying to put the pressure on china a little bit with this statement today. Haidi right. As we continue to see cases in the u. S. Rise, we continue to rising, the president saying they have prevailed. What is he talking about . Emily trump said today to reporters that the u. S. Prevailed against the outbreak and sounded very optimistic. This is focommon. He has had an optimistic tone about the virus since the very beginning. You are seeing a continuation of that today. We had seen cases go down slightly in the u. S. , but we are still seeing a number of people being infected. Unfortunately, we do see the death toll continue to rise. This is certainly not something that is in the Rearview Mirror for the u. S. Shery some of those infected among the highest ranks in washington as well. Emily yes. There have been now several cases reported at the white house among staff and employees, including the press secretary for Vice President mike pence. Pence has been quarantining himself, trying to stay away fro. The white house today sent out a memo requiring all employees to wear a mask. They did relax that if they are at their desks and the desks are socially distanced from everyone else. Visitors must wear a mask. There was a note today urging people if they dont need to come to the white house to not come. We have not seen trump wearing a mask yet. We have nothing other top senior officials wear a mask. It seems like a memo might go out, but it has not gone as far as it could go with requiring everyone to wear a mask at all times. Mixed messaging there. Emily wilkins. Get you caught up with the first word headlines with karina mitchell. Karina Global Health services are warning of a second wave of coronavirus get you infections w cases and south korea and a spike in the city where the outbreak was first reported. Wuhan saw its first new cases since the city ended the Strict Lockdown last month. Italy has reported its fewest new infections since march 4. France and spain continue to bs restrictions. Indonesia is warning about the fallout of the coronavirus amid a capital exit is that is even larger than the financial crisis. The finance ministers says the domino effect they require extra steps. Japan is said to be ready to lift part of its state of emergency as the rate of infections false. Lift. E government may russia is lifting its nationwide lockdown even as they learn new cases of the virus surge past most european countries. President putin is ending the stayathome order while putting the responsibility on regional leaders. Oils collapse adds even more pressure. Arabia has announced a surprise cut in oil output to its lowest in 18 years as it tries to counter the Energy Crisis that is crippling the economy. Hours after releasing new austerity measures, the kingdom says it will cut production by an extra Million Barrels a day, on top of what is agreed with opecplus allies. Oil futures rose on the news, which was later followed by cuts by kuwait and the uae. Powered by more than 2700 journalists and analysts in more than 120 countries. Im karina mitchell. This is bloomberg. Haidi . Haidi still ahead, more on the saudi move on oil but will it be enough to offset the demand disruption . We would discuss that with the lead analyst. Silversteinxt, capital ceo tells us why she is taking with cash and gold right now. This is bloomberg. Shery Amc Entertainment sort on reports that amazon is discussing a possible takeover, although the stock paired gains when another outlet cast doubts. The daily mail said it is not clear if talks are active or will eventually lead to a deal. Neither amc or amazon made a comment. Amc has fallen with the wider Entertainment Industry battered by the coronavirus restrictions. Marriott international fell as business collapsed last month. With travel virtually at a standstill amid the coronavirus, revenue plummeted 90 in april, indicating the Company Faces a long haul back. Marriott reported earnings in the first quarter, well down from average estimates. 25 of its Worldwide Hotels have been closed by the virus. The coronavirus lockdowns have sent electronic transactions soaring and muster countered mastercards value proposition. It is now worth more than jp morgan. Visa is worth even more than that. Shares have risen by more than 25 since the start of march. We will see if cash makes a comeback in the lockdowns are lifted. Stocksu. S. Partial mixed with reopening in new york state but Bond Investors are looking to the future and now. Joining us now is the founder great to have you. This dislocation we continue to see between bond markets and equity markets, does this play into the concern that you say investors will still buy in large price in a v shape recovery even though you cannot find an economist that can convincingly say that is what they are expecting . I couldnt agree more. Bond markets are obviously disagreeing. Where on the side of the bond markets. They are looking beyond the three to mfour liquidity bridge that is being afforded by Central Banks across the world. Theres a big difference between liquidity and solvency. Hertz, it isrket another key story showing that. We do not think this is a buy and hold environment because of that. Haidi when it comes to gold and cash, that makes it seem pretty dire. Are there parts of the market where you are continuing to seek because there are valuations . When wee net long, but say we are tactical with cash because the vix is less than 30, it is about 27 when i was checking out. The team maintains a tactical stance. If you are holding key long positions and they might range between 3 and 10 a day. If they are flagged as overbought as we can see, we will trim or exit them. Some days, you will see a pullback than then we may reenter the same security. We are doing the same thing with shorts. The key difference is when you have low volatility and more certainty of economic trajectory, you can buy and hold positions. But now here we are really trading. That is like cash is your friend. You dont have to keep one position, one net position. You can change it day today so cash can be tactical. Shery what about specific sectors of the market because we have seen outperformance by those growth companies, internet tech giants that Even Health Care has been really resilient to this pandemic. We have been overexposed to tech, health care, certain staples. Obviously some of the grocery players. Maybe the less known names internationally because obviously some of the bigger names stateside have been picked over a little bit so the asymmetry is not there as much anymore. We are enjoying some of the gold companies, Royalty Companies created telecommunications, there has been some Communication Companies which has been an amazing run. I dont think you have to marry yourself to tech. Tech has been great but health care has done quite well. There are names around the world that are benefiting from whether it is remote work order increased use of technology. We liked a lot of different sectorsi dont think you have ty yourself to tech. But you have to know where to pick the name. Shery would you pick some of those names in emerging markets as well . If you are looking for opportunities, you can find something that is even cheaper that emerging markets at the moment. We do have some chinese tech companies. We do have other e. M. Plays out there but we have to be cautious about the dollar. Theres a lot of emerging markets with that in u. S. Dollars and you can have a lot higher volatility in those stocks, which are less related to the underlying businesses. Wethe counts we can hedge, try to hedge out that risk. Narrowing on the fundamentals of those businesses versus fx swings. We do see there are attractive plays in e. M. , but you have to be cautious on what is going to drive the security. Bigi what about companies, wellfunded companies that will suffer in the shortterm as we get through the uncertainty of what is the new normal, but undoubtedly still has a future . Im talking about names like disney. Could you be taking a longer position at the moment . Areas, i think you would have to look at some clients have put together an Energy Portfolio in the past few weeks. If you are looking at the beatendown sector where there may be Good Companies with amazing assets that they have been investing in over time. You can find maybe intermediateterm attractive plays. You really have to have it aligned with their capital. You have to be gay type of investor that is less concerned with interim volatility which is obviously higher. As you mentioned, someone like disney, sure, you can say there are certain pieces of those you like but there could be a structural change in travel, a structural change on a lot of the money making business as they have. It could bring out the investment horizon such that your rors are not as exciting as before. We like to look at companies that may not have that structural issue. Therefore, have a little greater certainty for our clients. Shery always great having you with us. Nadine, cio of saltzstein capital. Coming up, the owner of indigo is the latest potential suitor for Virgin Australia. The details ahead. This is bloomberg. Haidi indigo is considering a bid for Virgin Australia which collapsed last month, crippled by travel restrictions. Paul allen has the story. What do we know about this potential interest we are seeing . Though renaultas dutta is responsible. He is looking at the data and finalizing a strategy. Denied beforely any interest in Virgin Australia but the strategy is being prepared by indigo. Will bess, dutta joining an increasingly long line of suitors for Virgin Australia which has now 20 potential buyers. Deloitte is looking for indicative bids to be by the middle of this month, looking to get assailed by the end of june. Virgin did collapse on the 21st of april after appealing for an failing to get a government bailout. It has pretty much grounded to a halt wind Coronavirus Travel restrictions hit. For over 10,000 creditors. A long way to run yet. Shery airlines are working on social distancing guidelines when travel resumes. Any idea of what will happen for the infamous middle seat . Paul the middle seat. I dont think anyone ever covets or wants the middle seat. There was a feeling that maybe it would go up in the era of social distancing. Weighed into this. Even if the middle seat is empty, all you are buying is an extra 60 centimeters of space on either side of you and that will really not cut it with social distancing guidelines, usually requiring something in the order of 1. 5 meters. It is barely a third of that. Alan joyce agrees with the sentiments, that there is no guarantee that keeping that middle seat empty is going to stop the spread of coronavirus anyway. Of course, there is the financial could duration consideration. Hard toint, gets very make money on a flight. Unless you increase fares and who wants to fly anyway . Working with the government to try to get some social distancing in place for air travel. Who knows when that will be . When flights finally do resume. Shery paul allen in sydney with the latest. The u. S. Airline industry also continues to struggle under major headwinds amid the coronavirus pandemic, even as the economy gets set to restart. Earlier, Southwest Airlines chairman and ceo told us exclusively that he does not think demand will recover anytime soon. Demand is still very modest. Were seeing very gradual improvements in air traffic. Our load factor last week was probably around 20 at best. Southwest, we are not booking our airplanes full anyway to allow for physical distancing on the airplane. You wont see a full airplane. But, the good news is we are beginning to see a recovery. Our government has asked us to remain open for business throughout. We never shut down, but we have reduced a lot of our flights. Were working with the government to hopefully implement temperature screenings so we dont have ill passengers getting into the airport and onto airplanes. We have a number of cleaning procedures we have implemented. Hand sanitizers are available. We are asking customers and employees to wear masks. We have hepa filters on board the aircraft, creating hospital quality air. There is a number of things that are being done as a multilayered approach to make the environment as safe as we can possibly make it. 20s isfactors in the not going to be ultimately sustainable. How long do you think it will take to get load factor backup to the level of which legs are viable . Do you think some routes are not going to be viable, with the kinds of load factors you will have to live with for some time . Taking air traffic as a whole worldwide because we are in a recession, we are going to see some very gradual return of business traffic. That is very typical in a recessionary environment and that is exactly what weve got. Talking about International Travel earlier. I think International Travel is going to be very slow to return. I think it will be years before we get back to 2019 traffic levels. In terms of the consumer, historically in recessions, consumers do travel. They watch their budgets. They will be looking for low fares. Of course, i do think lowfare carriers like southwest will see more demand in an environment like this. I think overall, it will take several years for the traffic to recover. All of your preparation seen predicated on revenue coming back, even if it is five years down the road. If it doesnt or if it takes longer than that or if there are too many airplane seats with too few customers, is there a round of consolidation that takes place . What would be the Tipping Point for you to consider Something Like that . I think all of that is premature. Right now, we are just making sure that we keep southwest healthy and we survive this crisis. How long it takes to survive, i think, is the essence of your question. And then, what techniques will we need to not just survive but then thrive are all open. We acquired Airtran Airways in 2010. Obviously, we have proven it is something we are willing to do and able to do. That is not the preferred course at this point, but you make an excellent point that in this kind of environment, if in fact travel demand is lower, there very well could be some consolidation. If so, we want to be prepared for that. Right now, we are doing everything we can to minimize our spending, focus on safety, focus on the health and make sure we have plenty of cash and weve done all of those things. That was southwest airline ceo gary kelly. Lets take a look at how we are setting up in the early part of asian trading session. A little directionless as we have had u. S. Stocks fluctuating, as investors are continuing to track the latest virus developments and reopening efforts we are seeing. Despite new infections rising in some parts and concerns over a second wave and a lot of economies. We are seeing a seventh day of gains for the market in new zealand. Australian stocks, the futures when it comes to the asx 200 all in a little bit in the early part of the session, starting the day flat after the 1. 3 gain we saw yesterday. Also watching commodities and oil in particular with saudi arabia saying it will cut oil output, bringing the production down to the lowest in 18 years. Coming up, double jeopardy. The u. S. China trade deal is coming under increasing pressure from both sides, as anger mounts over the coronavirus blame game. We get the latest from beijing next. This is bloomberg. Karina you are watching daybreak australia. Global Health Services are warning of a second wave of coronavirus cases with a second wave in south korea and a spike in infections in the city where i