As more nations and states move toward reopening, we ask what needs to be done to make it safe. We hear from Johns Hopkins university. We hear from Johns Hopkins university. Lets take a look at how we are setting up in these markets. We had mixed messages from wall street overnight as investors try to make their way through the global reopening. Asianlook at how the session is shaping up. The globaler we saw cell overnight, there could be little and the way of conviction for asian markets this morning. Futures fluctuating in the asian session. Off by slightly here. We have kiwi stocks getting grounds by. 2 . K futures in Chicago Holding on to three day ahead of a heavy earnings day in japan that will include names like toyota and honda due out later this afternoon. Today we are washing for the topics potentially push into a bull market with optimism for parts of the economy restarting. We could see wider headwinds weigh on the asia session. Checking in on what is going on with bonds, australian bonds this morning continuing to depth, with supply looming. Been plaguing bond markets from us tried to china to india. Today we saw indian bonds drop by the most since 2017. We have inflation data due from india and china as well. Check out oil this morning. Deputy i rebounding as output cuts and easing storage pressure. Old Holding Steady below 1700 per ounce. Shery chinese trade officials are considering the option of avoiding the phase one trade deal with the u. S. , according to state media. The report comes amid questions over chinas purchases of u. S. Goods. President trump says he is not interested in restarting talks. Bloomberg markets coanchor Tom Mackenzie us from beijing. This from the global times, what are they reporting . [no audio] we do have inflation data. Tom mackenzie in beijing, lets see if we can get you connected. We were asking about where the report is coming from and what it is thing about that phase one trade deal . We will try to reestablish that connection with Tom Mackenzie in beijing. It has been about that chinau. S. Trade tensions. Haidi yes, thats right. Else thats something perhaps emerging markets does not need now, is this revival of the trade war between the u. S. And china. Coming up, still ahead, s p 500 dividends may fall short of last year and take until 2027 at best. We discussed the payout pessimism next. Tesla is saying it is recharting restarting production in fremont, defined county rules. We look at elon musk and his standoff of california officials. This is bloomberg. Lets get back to chinau. S. Trade tensions as we hear from state media in beijing that china may be weighing potentially avoiding the phase one trade dell. Lets get to Bloomberg Markets coanchor Tom Mackenzie in beijing. What is the globe times saying . A state backed tablet here in china. They are citing officials tabloid. They are citing official suggesting that maybe the chinese side is considering the possibility of avoiding the phase one deal the paper says chinese trade officials are angry about the u. S. Accusations over chinas handling of the pandemic. Down everything in their options, essentially. Another option they are apparently looking at come apart from avoiding the trade deal, as renegotiating the deal, to tilt the balance as they, more to the chinese side. The thinking, currently, is that they could use a force majeure measure baked into either we work it or pull out altogether. Either to rework it or pull out altogether. This is from the nationalistic tabloid, backed by the state but this could just be gamesmanship. We have some in the states considering saying they could consider pulling out themselves. This could just be a way of china trying to balance that Pressure Campaign we have seen around this. We know that last week lighthizer on the u. S. Side, the thattrade had and his on chinese side did have a phone conversation. Both sides to stick to their mittens and work toward the completion of the phase one deal. Stick to their commitments. In the meantime china is contending with new virus, what we know . Be athis is not going to smooth line back to full opening of the economy with no exceptions. The epicenterjan, for the outbreak, has reported its first cluster of infections since the lockdown was lifted in april. Five new cases that all live in the same residential compound. It is a reminder that officials have to be on their toes, alert if they want to get this going back up to full speed. We have seen other clusters on the chinarussia border and on that chinanorth korea border as well. Ofna has a system in place testing and quarantining people when needed and the hope that will allow them to ensure these clusters are contained, as they try to fully of the economy. But that will put it to the test. Do get cpi numbers out of china. , and factory prices what are we expecting . On the financial get prices side we expect another deflationary number, a fall of 2. 5 for april, compared to 1. 5 in march. You have weaker Commodity Prices in that, and the demand picture here remains tepid. Bloomberg intelligence thinks when it comes to these factory get prices you will see the deflationary picture continue in the months ahead because of the weak economy, the drag on demand. That could weigh on Company Profits and make it harder for them to pay down debts. In terms of consumer prices, youre looking at rise of 3. 7 , according to forecasts. That is below the number we saw back in march. Weaker pork prices already factor as well. The data coming out at 9 30 a. M. Local time. Any changes in weather hampers the policy response. We heard from the pboc over the weekend suggesting they will take more aggressive measures to support the economy. That inflation data around 930 a. M. Local time. Our correspondent there in beijing. Now lets get you caught up with first word headlines. Global Health Services are warning of a second wave of Coronavirus Infections with new cases in south korea and a spike in infections in the city where the outbreak was first reported. Wuhananto cases todds first new cases since the city ended its strict lucked out last month. Italy reported its its strict lockdown. Whilereported its fewest france and spain ease restrictions. Russia is lifting is lockdown as a surge. President putin is ending the stayathome order while putting response build on regional leaders. Russias economy has contracted by one third since the lockdown began. Oil has collapse adds more pressure. Infections have topped 10,000 per day for the past eight days. Germany says the ok is not taking brexit seriously and that a favor failure to agree with a deal with the eu threatens catastrophe. The latest talks via video link and germanys Main Business lobby says progress has been completely inadequate. The b. I. Says coronavirus has cost billions of jobs and failure in brexit negotiations will turn a difficult situation into disaster. Saudi arabia 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 said it will cut production by an extra Million Barrels per day on top of what it agreed with opec plus allies. Oil futures rose on the news, later followed by cuts from quite and uae. Global news 24 hours a day on tv and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am karina mitchell. This is bloomberg. You can get around up of storiesquite and uae. You need to know to get your day going in todays edition of daybreak. Daybberg subscribers go to on your terminals and it is available on the mobile app. This is bloomberg. As investors continue to assess the fallout from the coronavirus, Coleman Sachs says pessimism will have the upper hand and said the s p 500 20 in the next three months. Goldman sachs. Our next guest is more optimistic saying we have likely seen the lows already. Joining us is Wells Fargo Asset Management senior Portfolio Management marjorie patel. We continue to seek flareups in infections worldwide, really bad ecodata at rising u. S. China trade tensions. What makes you so positive about the Market Outlook . , in particular, the Federal Reserve acted very proactively and flooded the system with liquidity. That is really what stops the market from going down. That is why we sire low point in march. And why we that is why we saw our low point in march and why we will not reach that point again. They provided liquidity so we do not have seizing up in the money markets, which were getting seized up even before the crisis, because of the demand for dollars. And the una plummet checks people are getting is coming at a rate of around 1 trillion, annualized, per year. On a plummet checks. Unemployment checks. It comes to leadership we have seen that restricted to the big tech giants and health care. Will we continue to see that her could this be more widespread . Out there or could this be more widespread . Certain Technology Companies and Certain HealthCare Companies and i think we will not see a turnaround in the value stocks, the smaller cap stocks. This is still a market where the strong will get stronger and the big will get bigger, for the foreseeable future. Im not looking for any change in that. Over exuberant now, because it does seem like participants are pricing in a vshaped recovery, when we know theres a slim chance of that happening in most economies around the world. As far as the u. S. Goes, we should see our worst economic numbers in the Second Quarter, but by the time we get the numbers for june, i think we will start to see an improvement. You will have the opening of the economy and the benefit of liquidity the fed has spread around, and the benefit of higher incomes, thanks to those unemployment checks that have been passed around. From there i think we will see strength in the second half of the year. When you look at the market, it was at a 30 rebound from the low point at the end of march, which shows you the power of the fed and pumping in liquidity to the system. So i would not rule out a small correction on that but not near a 20 step back, thanks to the liquidity and that the economy in a few months will be improving on a fundamental basis. So, at least in the mediumterm, if this is a fed liquidity policy driven rally we are seeing, as a longterm investor, where would you be recommending you put your money, by the time we come to the date when that policy support is withdrawn . Equities willnk be an attractive asset class, because i do not see any sign we will have an increase in Interest Rates. The fed brought Interest Rates down was no turnaround there. So the cash flow and dividend stream from equities i think will continue to be attractive compared to riskfree, and in the u. S. Especially, the highyield markets, the so called . Market, will be pretty attractive because those bond prices and yields one up along with equities. So they are really at an attractive level where yields 5. 75, four toptier names and a percent for middletown names and the prices of these bonds are now discounted at say 5 or 10 from their face value. So if the economy stabilizes and starts to improve even gradually, we could see equitylike returns from that part of the fixed income market, close to 10 , say. Dress Companies Falling to junk at the fastest pace in and the fed seems to be backstopping Corporate Credit as well. I think that will help the price action in by good companies. I do not think anything is going to save that Numerous Companies we are starting to see file for bankruptcy is. That would be industries in the travel and leisure sector, retail, restaurants, and energy, i think we will continue to see sharply higher default. The fed is not going to be able to help those companies, but other companies will benefit. And you have seen record issuance from Investment Grade companies and from highyield companies so far in the last month or two, with a are proactively try to raise cash, not to spend it, but just to hold it on their books, so they can meet their liquidity needs case the banks tell them they will not lend them any money, so they can control their own destiny by raising cash. So it is incredible to see investors enthusiastically accepting these deals from goodquality Junk Companies or Investment Grade companies, that the idea they are not going to spend it and well just keep it on their books, in case of a rainy day, if the economy does not pick up, and the next couple of quarters. Given your outlook, are you also heading for inflation . How would you do that . Hedging for inflation . I thick inflation is dead for the foreseeable future, so nothing with inflation. We do not particular care for commodities for that reason. We think this trend of Deflationary Forces we have seen in asia, and europe, will continue to prevail in the u. S. So we are not looking for any inflationary action. How long does that outlook last for then, the other concern is that even you say there will be an increase in incomes, is that Discretionary Income . With the levels of unemployment we are seeing, is it reasonable to expect this will not be a consumer driven recovery . I think it will be a consumer driven recovery, because many consumers have kept their jobs through this time. And the money flow to Small Businesses and to those who lost their jobs, is designed to basically replace those incomes. Yet, in some cases, people will be getting a higher unemployment pay than they were when they were employed. So, some people of criticized the program for that reason. But i think anything that keeps the consumer a, even a few extra dollars here and there, is really to the good of the whole economy. Great to have you with us, Wells Fargo Asset Management. Lets get a quick check of the latest is this flash headlines. The billionaire behind the india carrier indigo is considering a bid for virgin australia, to capitalize on the First Airline casualty from the coronavirus. He is one of 20 potential buyers ros . Deloitte is seeking binding offers by june. Version collapsed owing 4. 5 billion and indigo itself says is not involved. Elon musk is headed for a showdown with california, demanding that his Fremont California factory stay shut because of the california because of the coronavirus. Musk says he will reopen and ask that if anyone gets arrested that it only be me. The plant has been closed since march 23. Treasuryretary secretary Steven Mnuchin and weight in urging california to prioritize reopening. Filing as thesee virus crash demand raises doubts on ability to repay debt. It says it may not have enough cash to repay bells amid the Bleak Outlook for car rentals. The First Quarter loss per share at 1. 92. Autonation says the decline in auto sales during u. S. Lockdowns has paired to 20 down from 50 at the end of april. This underscores pentup demand, particularly for pickup trucks. Half,iness was cut in with shelterinplace, sales down 50 . Protecto take action to furloughed 7000 associates, almost 30 of the company. But we were deemed essential everywhere that we operated. And if you think about it, we are. All of the doctors and nurses, firemen, policemen, if they have diff cultic with their vehicle, they had to they had to be fixed. I think all of the autonation employees. Customers said they want a safe environment within which to do business, and we have extensive protocols for that. But they said they want personal space and mobility. They want their own personal cars, where they decide who is in it when, and they control the safety of that environment. So, we see in automotive recovery that is underway. From 50 e developed down, to 20 down by the end of april, going into may. Have developed. So theres pentup demand. Expectation for personal safety. Financing isabel and cheap, contrary to the great recession. Financing is available and cheap. We need plans to restart. We are going to need more inventory. We fully support the reopening of the plant. Even elon musk should be allowed to reopen the tesla plant in california. I do not understand how you can fly a plane packed like sardines but you cannot open up plants with fred percent with 30 of the workforce. Plants need to reopen and the auto recovery is underway. Based on that and im glad you brought up inventory. I wonder where the holes are . As Economic Activity restarts in your company sees better sales, where are your holes . On the new vehicle side, is pickup trucks in particular, the General Motors summer auto and gmc. If you think about it they had the strike, which reduced avella velti and then got hit reduced availability. In the most demand relative to supply, the silverado. Pickup trucks performed the best through this disruptive. , only down 10 . If they can restart the pickup i will bet first, standing here in line saying send me all you can get. But the point is that America Needs to gradually, safely reopen and resume Economic Activity. And you mentioned you will be the first in line saying give me all of your talks. How does that shortfa